Bombay High Court
Shishir Realty Private Ltd. vs The Vice Chairman & Managing on 6 December, 2013
Bench: V.M. Kanade, S.C. Gupte
1
(WP702/11, 5245/11 & PIL 55/11)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.702 OF 2011
1. Shishir Realty Private Ltd., )
a Company incorporated under )
the Companies Act, 1956, having )
its registered office at 1st Floor,)
Capri, Anant Kanekar Marg, )
Bandra (East), Mumbai - 400051 )
)
2. RKW Developers Pvt. Ltd., )
Company incorporated under the )
Companies Act, 1956 having its
ig )
registered address at HDIL Towers, )
4th Floor, Anant Kanekar Marg, )
Station Road, Bandra (E), )
Mumbai - 400 061 ) .... Petitioners.
V/s
1. The Vice Chairman & Managing )
Director, City and Industrial )
Development Corporation )
of Maharashtra Ltd., having his )
office at "NIRMAL", 2nd floor, )
Nariman Point, Mumbai - 400 021 )
)
2. City and Industrial Development )
Corporation of Maharashtra Ltd., )
a company registered under the )
Companies Act, 1956, having its )
nd
registered Office at NIRMAL, 2 )
floor, Nariman Point, )
Mumbai. - 400 021. )
)
3. The Principal Secretary, )
Urban Development Department, )
Government of Maharashtra, )
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2
(WP702/11, 5245/11 & PIL 55/11)
Mantralaya, Mumbai - 400 032 )
)
4. The State of Maharashtra, )
Mantralaya, Mumbai - 400 032 ).... Respondents
----
Mr. R.A. Dada, Senior Counsel with F. D'vitre, Senior Counsel
with Mr. M.S. Doctor with Mr. N. Engineer with Ms. Misbah
Dada with Mr. Ajay Vazirani with Mr. Dinesh Pednekar, Mr.
Shailesh Poria and Mr. Swapnil Gupte i/b Hariani & Co. for the
Petitioner.
Mr. V.A. Thorat, Senior Counsel with Mr. G.S. Hegde with Mr.
C.M. Lokesh for Respondent Nos. 1 and 2.
Mr. D.A. Nalawade, Government Pleader for Respondent Nos.
3 and 4.
----
ALONGWITH
APPELLATE SIDE
WRIT PETITION NO.5245 OF 2011
M/s Metropolis Hotels, )
759/34, Bhosale Pavilion, )
Bhandarkar Road, Deccan )
Gymkhana, Pune 411 004, )
Through its Partners )
1. Sun-n-Sand Hotels Pvt. Ltd., )
2. Classic Citi Investments Pvt.Ltd.,)
3. Avinash Bhosale Infrastructure )
Pvt. Ltd., )
4. Ramu Real Estates Developers )
Ltd. ) ....Petitioners.
V/s
1. The Vice Chairman & Managing )
Director, City nd Industrial )
Development Corporation )
of Maharashtra Ltd., having his )
office at "NIRMAL", 2nd floor, )
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3
(WP702/11, 5245/11 & PIL 55/11)
Nariman Point, Mumbai - 400 021 )
CIDCO Bhavan, CBD, Belapur, )
Navi Mumbai - 400 614 )
)
2. City And Industrial Development )
Corporation of Maharashtra Ltd., )
a Company registered under the )
Companies Act, 1956, having its )
nd
registered Office at 'NIRMAL', 2 )
floor, Nariman Point, )
Mumbai. - 400 021. )
)
3. The Principal Secretary, )
Government of Maharashtra )
Urban Land Development
ig )
Department Government of )
Maharashtra, Mantralaya, )
Mumbai - 400 032 )
)
4. State of Maharashtra, )
Mantralaya, Mumbai. ) .... Respondents.
Mr. Aspi Chinoy, Senior Counsel with Ms. Chandana
Salgaonkar for the Petitioner.
Mr. G.S. Hegde with Mr. C.M. Lokesh for Respondent Nos. 1
and 2.
Mr. Sameer Patil, AGP for Respondent No.3 and 4.
ALONGWITH
APPELLATE SIDE
PUBLIC INTEREST LITIGATION NO.55 OF 2011
1. Shri Kisan Baburao Hazare @ )
Anna Hazare Age: 68 years, )
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4
(WP702/11, 5245/11 & PIL 55/11)
Occ: Social Service, R/at: Village )
and Post Ralegaon Siddhi, )
Taluka Parner, Ahmednagar )
District, Maharashtra 414 302 )
)
2. Shri Sanjay Kumar Surve, )
Age: 42 years, Occ: Business )
R/at : 302, Saburi Apartment, )
Plot No.41, Sector 5, Sanpada, )
Navi Mumbai - 400 703. ) ... Petitioners.
V/s
1. The State of Maharashtra, )
through ig )
The Secretary to the Government )
of Maharashtra, in the Urban )
Development Department, )
Mantralaya, Mumbai - 400 032 )
)
2. The City Industrial Development )
Corporation, through its Managing )
Director, CIDCO Bhavan, Kokan )
Bhavan, Navi Mumbai. )
)
3. The Managing Director, )
The City Industrial Development )
Corporation, through its )
Managing Director, CIDCO Bhavan, )
Kokan Bhawan, Navi Mumbai. )
)
4. M/s Metropolis Hotels )
A Partnership Firm, having its )
Office at Bhosle Pavillion, 759/34, )
Bhadarkar Road, Deccan )
Gymkhana, Pune - 411 004 )
)
5. M/s. Shishir Reality Pvt. Ltd., )
having its Office at )
Bhosle Pavillion, )
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5
(WP702/11, 5245/11 & PIL 55/11)
759/34, Bhadarkar Road, )
Deccan Gymkhana, Pune-411 004 )
)
6. The Navi Mumbai Municipal )
Corporation, Through the )
Municipal Commissioner, having )
st
his Office at 1 Floor, Belapur )
Bhavan, CBD,Navi Mumbai-400614 ) .... Respondents.
Mr. M.J. Bhatt for the Petitioner.
Mr. Sameer Patil, AGP for Respondent No.1.
Mr. G.S. Hegde with Mr. C.M. Lokesh for Respondent Nos. 2
and 3.
Mr. Aspi Chinoy, Senior Counsel with Ms. Chandana
Salgaonkar for Respondent No.4.
Mr. R.A. Dada, Senior Counsel with F. D'vitre, Senior Counsel
with Mr. M.S. Doctor with Mr. N. Engineer with Ms. Misbah
Dada with Mr. Ajay Vazirani with Mr. Dinesh Pednekar, Mr.
Shailesh Poria and Mr. Swapnil Gupte i/b Hariani & Co. for
Respondent No.5.
Mr. Sandeep Marne for Respondent No.6.
CORAM: V. M. KANADE &
S.C. GUPTE, JJ.
Judgment reserved on : 15/10/2013
Judgment pronounced on: 06/12/2013
(WP702/11, 5245/11 & PIL 55/11)
ORAL JUDGMENT: (Per V.M. Kanade, J.)
1. Heard.
2. Rule. Rule is made returnable forthwith. Respondents
waive service. By consent of the parties all the three
Petitions are taken up for final hearing.
3. These three Petitions can be disposed of by a common
judgment since the issue involved in all these Petitions is
common. Out of these three Petitions, two Petitions are filed
challenging the show-cause notice dated 06/12/2010 issued
by the Vice Chairman of CIDCO and final order dated
16/03/2011 of termination of lease by CIDCO and a PIL has
been filed challenging the said allotment of plot and sub-
division of the said plot and change of user granted by CIDCO
and for other consequential reliefs. [Wherever reference is
made to the Petitioners, it refers to M/s Metropolis Hotels and
Shishir RealtyPrivate Ltd & Anr and wherever reference is
made to PIL Petitioner, it would refer to the Petitioners who
have filed the PIL].
4. Petitioners - M/s Metropolis Hotels in Writ Petition
No.5245 of 2011 were allotted Plot No.5 by the Respondent -
CIDCO for being used for the purpose of establishing a Five
Star Hotel in pursuance of the Tender in which the Petitioners
(WP702/11, 5245/11 & PIL 55/11)
(hereinafter referred to as "M/s Metropolis Hotels") in Writ
Petition No.5245/2011 were the highest bidders. Thereafter,
they applied for and were granted change of user of the plot
from the use of hotel purposes to partly for commercial-cum-
residential purposes and partly establishing a Five Star Hotel.
They also applied for subdivision of the plot and for
assignment of their interest in respect of the plot on which
commercial-cum-residential user was permitted. This plot
was assigned to Shishir Realty Private Ltd who are the
Petitioners in Writ Petition No.702 of 2011.
5. CIDCO, thereafter, executed two separate lease deeds
in respect of the said two plots viz Plot No.5 and Plot No.5A.
Shishir Realty Private Ltd. took further steps for mortgaging
their plot with the permission of CIDCO and obtained loan for
development of the said plot for commercial-cum-residential
user and third party rights were also created.
6. Some complaints were received by State of Maharashtra
regarding transfer of plots by CIDCO during the tenure of the
then Vice Chairman B.M. Lal and an inquiry was held by the
Chief Secretary. Thereafter, new Vice Chairman of CIDCO
issued a show-cause notice dated 06/12/2010 to M/s
Metropolis Hotels and Shishir Realty Private Ltd -
Developers, as to why the lease deeds which were executed
in their favour should not be cancelled on account of breach
of tender conditions by M/s Metropolis Hotels. An inquiry was
(WP702/11, 5245/11 & PIL 55/11)
held by the new Vice Chairman and he passed the impugned
order dated 16/03/2011 cancelling the lease deeds which
were executed by M/s Metropolis Hotels Ltd and Shishir
Realty Private Ltd - Developers. Being aggrieved by the said
order, Petitioners have invoked writ jurisdiction of this Court
for quashing and setting aside the said order.
7. PIL has been filed by Social Activists, challenging the
allotment of plot No.5 to M/s Metropolis Hotels and for
cancellation of lease agreements dated 30/03/2010 executed
by CIDCO in favour of M/s Metropolis Hotels and Shishir
Realty Private Ltd. - Developers. They also challenged
subdivision of plots of land and for consequential reliefs.
8. After the PIL was filed in February, 2011 CIDCO had
cancelled the lease deeds which were granted in favour of
the two Petitioners by order dated 16/03/2011 and, as such,
the said PIL has practically become infructuous. We have,
however, heard the learned Counsel appearing on behalf of
the PIL Petitioners at great length and have also heard the
learned Senior Counsels appearing on behalf of M/s
Metropolis Hotels and Shishir RealtyPrivate Ltd - Developers
and the learned Senior Counsel appearing on behalf of CIDCO
and also the learned Counsel appearing on behalf of the
State of Maharashtra.
9. During the course of arguments, the learned Counsel
(WP702/11, 5245/11 & PIL 55/11)
appearing on behalf of PIL Petitioners has tendered a
compilation of documents which has been taken on record
since the learned Senior Counsel appearing on behalf of the
Petitioners submitted that they have no objection if the said
documents are taken on record. These documents being
relevant for the purpose of deciding these Petitions, they
were allowed to be placed on record, though during
pendency of these Petitions no attempt was made to bring
them on record by filing detailed further affidavit.
10. In order to appreciate the rival contentions, it will be
necessary to briefly state the facts which are relevant for the
purpose of deciding these Petitions.
11. CIDCO issued an advertisement on 11/06/2008 and
15/07/2008 which was published in the news papers inviting
tenders for the lease of plot No.5 admeasuring 47000 sq.
meters. The said plot was permitted to be used for Five Star
Hotel and allied activities. Several bids were received by
CIDCO but, finally, the plot was allotted to M/s Metropolis
Hotels on 07/08/2008, it being the highest bidder and the
total lease premium was fixed at Rs 282,39,99,700/-. On
29/12/2009, M/s Metropolis Hotels applied to CIDCO for
change of user of the said plot and requested CIDCO to
convert 34000 sq. meters to commercial-cum-residential use.
On 11/02/2010, CIDCO granted permission to Metropolis
Hotels for change of user of the plot to the extent of 23000
(WP702/11, 5245/11 & PIL 55/11)
sq. meters and permitted them to use it for commercial
-cum-residential purposes. CIDCO, however, levied charge of
Rs 500/- per sq. meter in accordance with the existing rules.
On 11/03/2010, M/s Metropolis Hotels made a request to
CIDCO for subdivision of Plot No.5 into two plots of 24000 sq.
meters and 23000 sq. meters. CIDCO granted permission to
divide Plot No.5 into two plots being plot No.5 and Plot No.5A.
The request made by M/s Metropolis Hotels for transfer of
Plot No.5A in favour of Shishir Realty Private Ltd. was
accepted by CIDCO on 30/03/2010 and two separate
agreements to lease in respect of Plot No.5 and 5A were
executed by CIDCO on 30/03/2010 in favour of M/s Metropolis
Hotels in respect of the area admeasuring 24000 sq. meters
and in favour of Shishir Realty Private Ltd. in respect of the
area admeasuring 23000 sq. meters. On 31/03/2010, share-
holders of Shishir Realty Private Ltd - Petitioners in Writ
Petition No.702/2011, agreed to purchase the entire share
holding of the Company for aggregate consideration of Rs
265 crores.
12. Thereafter, Shishir Realty Private Ltd made an
application to CIDCO to grant no objection to mortgage Plot
No.5A to secure the loan taken by them from M/s Indiabulls
Financial Services Ltd. This permission was granted by
CIDCO on 28/4/2010 and Plot No.5A was mortgaged in favour
of M/s Indiabulls Financial Services Ltd. On 12/05/2010,
Petitioners - Shishir Realty Private Ltd. applied to Navi
(WP702/11, 5245/11 & PIL 55/11)
Mumbai Municipal Corporation for permission to commence
development of Plot No.5A. All the relevant permissions
were obtained and Commencement Certificate was granted
by Navi Mumai Municipal Corporation on 08/06/2010 under
the provisions of Bombay Provincial Municipal Corporation
Act. It is the case of the Petitioners that on or about
10/06/2010, they commenced development activities on Plot
No.5A. However, on 18/09/2010, Navi Mumbai Municipal
Corporation directed the Petitioners not to undertake any
further construction on Plot No.5A.
13. A show-cause notice was issued by CIDCO dated
06/12/2010 asking the Petitioners - Shishir Realty Private Ltd.
and M/s Metropolis Hotels why CIDCO should not cancel and
revoke the agreement of allotment of plot dated 07/08/2010
and agreements to lease dated 30/03/2010. Reply was filed
by the two Petitioners and hearing was given by the Vice
Chairman and Managing Director of CIDCO and, finally,
impugned order was passed on 16/03/2011 cancelling the
allotment of plot No.5 in favour of M/s Metropolis Hotels and
also subsequent permission for change of user and
subdivision of the plot and lease deeds in respect of Plot No.5
and Plot No.5A. Both the Petitioners filed Writ Petitions in
this Court and interim relief was granted by this Court and
this Court was pleased to observe that Petitions would be
disposed of finally at the stage of admission.
(WP702/11, 5245/11 & PIL 55/11)
14. Before we deal with the rival submissions, it is
necessary to take a note of the admitted facts. It is not in
dispute that M/s Metropolis Hotels had offered the highest
bid and was allotted Plot No.5 admeasuring 47000 sq.
meters. Their application for change of user was granted by
CIDCO to the extent of 23000 sq. meters for commercial-cum
-residential use. They were also permitted thereafter to
transfer this area to M/s Shishir Realty Private Ltd subject to
payment of entire lease rent and payment of additional
transfer charges to the extent of Rs 712 lakhs.
ig They had,
thereafter, applied for subdivision of the plot; 24000 sq.
meters in favour of M/s Metropolis Hotels and 23000 sq.
meters in favour of M/s Shishir Realty Private Ltd., which was
also granted and, on the very next day, CIDCO executed two
separate agreements to lease in respect of the two plots viz
Plot No.5 and Plot No.5A. It has also come on record that M/s
Shishir Realty Private Ltd. soon thereafter sought permission
to mortgage their plot No.5A to a Finance Company in order
to avail finance from them. This permission was also granted
and the plot was accordingly mortgaged. M/s Shishir Realty
Pvt. Ltd thereafter proceeded to take steps for the
development of the plot by making an application for
commencement of construction and this permission was also
granted and the plans submitted by them were sanctioned
and Commencement Certificate was issued. Thereafter, M/s
Shishir Realty Private Ltd. commenced the work of
construction and third party rights were also created by sale
(WP702/11, 5245/11 & PIL 55/11)
of plots by accepting deposits to the tune of Rs 6 crores. It is
only after almost three years, show-cause notice was issued
and, thereafter, the impugned order of termination of lease
agreements was passed solely on the ground that
Petitioners - M/s Metropolis Hotels and Shishir Realty Private
Ltd. had committed breach of the terms and conditions of the
tender document.
15. It has been strenuously urged by both the Petitioners
that on the well settled principle of promissory estoppel,
CIDCO is estopped from contending that its decision was
invalid or could be impugned after it had been acted upon.
Reliance has been placed on the judgments in the case of
Sunil Banthia & Ors. vs. CIDCO1; Popcorn Entertainment
Corporation vs. CIDCO2; Shree Ambika Developers vs. State
of Maharashtra3 and CIDCO vs. Shree Ambika Developers4.
16. On the other hand, it has been submitted by the learned
Senior Counsel appearing on behalf of CIDCO and the learned
Counsel for PIL Petitioners that the Petitioners have violated
statutory condition and the action of CIDCO in granting
permission was ultra vires of the Act and, therefore, ratio of
the judgments on which reliance has been placed by the
Petitioners is not applicable to the facts of the present case.
It is contended that the said transfer of the plot in favour of
1 (2007) 10 SCC 674
2 (2009) 6 ALL MR 133
3 (2012) 3 Mh LJ 640
(WP702/11, 5245/11 & PIL 55/11)
Shishir Realty Private Ltd. is contrary to Regulation 10 and,
therefore, the action of CIDCO is ultra vires the Act. Reliance
has been placed by the learned Counsel appearing on behalf
of CIDCO on the judgment of the Supreme Court in
Vasantkumar Radhakisan Vora and Another vs. Board of
Trustees of the Port of Bombay and Another 1, more
particularly on paras 19, 20 and 23. The learned Counsel
appearing on behalf of PIL Petitioners has relied upon the
following judgments:-
(i) Mukund Swarup Mishra vs. Union of India &
Ors2 (para-24)
(ii) Union of India and Others vs. Godfrey Philips
India Ltd.3
(iii) M/s Jit Ram shiv Kumar and others vs. The
State of Haryana and another4
It must be mentioned here that it has been argued for the
first time across the bar by both the learned Counsel for
CIDCO and PIL Petitioners that there was breach of
Regulation 10 of the Navi Mumbai Disposal of Lands
(Amendment) Regulations, 2008. Both the learned Senior
Counsels appearing on behalf of the Petitioners have rightly
taken objection that CIDCO or PIL Petitioners cannot for the
first time across the bar submit that there is a breach of
1 (1991) 1 SCC 761
2 (2007) 2 SCC 536
3 (1985) 4 SCC 369
4 AIR 1980 SC 1285
(WP702/11, 5245/11 & PIL 55/11)
Regulation 10. It is submitted that had this fact been
pleaded in the PIL Petition or in the affidavit-in-reply filed by
CIDCO, the Petitioners could have responded by filing their
affidavit-in-reply. Secondly, it is submitted that the quasi
judicial authority cannot be permitted to supplement reasons
given by it in the impugned order by mentioning these
additional reasons in the affidavit-in-reply.
17. In our view there is much substance in the said
submission made by both the learned Senior Counsels
appearing on behalf of the Petitioners. It is a matter of
record that this submission was made for the first time
across the bar and it does not find place in the averments
which are made in the Petition by PIL Petitioners or in the
affidavit-in-reply filed by CIDCO. It is a well settled position
in law that a quasi judicial authority cannot be permitted to
raise such a plea for the first time. This position is well
settled by the Supreme Court in several cases including
Mohinder Singh Gill vs. Chief Election and Commissioner of
Police vs. Gordhandas Bhanji2. The Apex Court also has in a
similar case of cancellation of Agreement to lease by CIDCO
has precluded them from raising the additional grounds
which are not mentioned in the impugned order. Apex Court
in Ambika Developers vs. State of Maharashtra 3 on pages 6
to 10 has in terms not allowed the CIDCO to raise such plea.
1 (1978) 1 SCC 405
2 AIR 1952 SC 16
(WP702/11, 5245/11 & PIL 55/11)
Similarly, in Chandra Singh vs. State of Rajasthan1 ((para 47
Pg 561) reaffirmed the principles laid down in the case of
Mohinder Singh Gill (supra). Apart from that, perusal of
Regulation 10 itself indicates that restriction against transfer
of rights derived under the Agreement to lease is subject to
satisfaction of the conditions imposed by the Corporation.
The said Regulation 10 reads as under:-
"10. Restrictions against transfer of
rights derived under the Agreement to
Lease: The intending Lessee shall not transfer
wholly or partly the rights, benefits and
interest he derives in respect of the plot
agreed to be leased to him, provided that
nothing contained herein shall apply if the
Intending Lessee, after execution of
Agreement to Lease, shall perform to the
satisfaction of the Corporation the following
conditions:
i. The intending Lessee pay to the Corporation
the Transfer Charges at the rate as may be
fixed from time to time, subject to a minimum
of Rs 5000.
ii In the instruments by which the intending
Lessee transfers his rights, benefits and
1 (2003) 6 SCC 545
(WP702/11, 5245/11 & PIL 55/11)
interest in respect of the plot agreed to be
leased to him, he shall impose upon the
person to whom such rights are transferred, to
perform and observe all the conditions
stipulated in the agreement to Lease;
Provided further that in case of plots agreed to
be leased under Regulation 4 (iii), transfer of
such rights shall not be permitted.
Explanation: (i) the intending Lessee may, with
the prior written permission of the Managing
Director, mortgage the plot to the Central
Government, State Government, Life
Insurance Corporation of India, the
Maharashtra State Finance Corporation, the
Nationalized Bank, Employer of the Intending
Lessee or any other Financial Institutions as
may be approved by the Corporation from
time to time, for obtaining a loan for paying
the lease premium to the Corporation in
respect of the said plot and for constructing
the building/buildings, factory on the said plot
in accordance with the plan approved by the
Town Planning Officer, provided that such
mortgage can only be created after the
execution of Agreement to Lease.
(WP702/11, 5245/11 & PIL 55/11)
(ii) Transfer of rights derived under the
Agreement to Lease shall mean and include
the transfer of share or shares by the
shareholders of a Company registered under
the Companies Act, 1956 (I of 1956) or by the
members of a Co-operative Housing Society
registered under the Maharashtra Co-
operative Societies Act, 1960 or by the
partners of a Partnership Firm registered
under the Indian Partnership Act, 1932, in
which case the Transfer Charges as is
allocable to the extent of the share or shares
so transferred or at the rate as may be
determined by the Corporation from time to
time, shall be recovered."
18. In the present case, it has been urged that the said
conditions could be performed only after application is made
for transfer of benefits, after execution of Agreement to
lease. In the present case, the plot was subdivided on
29/03/2010 and the agreements to lease were executed on
the very next day i.e. 30/03/2010. Perusal of the said
Regulation does not indicate that the said condition is
mandatory but it appears to be directory. Apart from that,
no loss or prejudice has been caused to CIDCO since the
entire lease rent and transfer charges have been paid by
(WP702/11, 5245/11 & PIL 55/11)
M/s Metropolis Hotels and on the very next day the
agreements to lease have been executed. From the
aforesaid facts, it cannot be said that on that ground, CIDCO
which was a party to the entire agreement could invalidate
the agreements of lease after a lapse of three years. In this
case, therefore, we are satisfied that the change of user or
subdivision of plot or execution of agreements to lease is not
in violation of any statutory condition or ultra vires of the
Act. Once it is held that action of CIDCO is not ultra vires to
the provisions of the Act or Rules or Regulations framed
thereunder or not in breach of any statutory Rule or
Regulation, principle of promissory estoppel would squarely
apply and, therefore, ratio of the judgments on which
reliance has been placed by the learned Senior Counsel
appearing on behalf of the CIDCO and the learned Counsel
appearing on behalf of the PIL Petitioners would not apply to
the facts of the present case. In all these cases, the Apex
Court has held that if an action is illegal, contrary to law or
ultra vires of the provisions of the Act or statutory provision
then the said principle cannot be evoked. On the other hand,
the facts stated in the judgments relied upon by the learned
Senior Counsels appearing on behalf of the Petitioners are
more or less identical to the facts in the case in hand and in
the said cases also the land was allotted to Petitioners by
CIDCO and change of user was permitted and, thereafter, the
Agreement to lease was cancelled by CIDCO on the
subsequent date. The Apex Court in all these
(WP702/11, 5245/11 & PIL 55/11)
cases has held that the said action of CIDCO was barred on
the principle of promissory estoppel.
19. In the present case, the Petitioners M/s Metropolis
Hotels have acted pursuant to the permission granted by
CIDCO to change the user of land. Thereafter, they had
sought permission to transfer and assign their interest in
favour of Shishir Realty Private Ltd., which was also granted.
Thereafter, they had applied for subdivision of the plot in two
plots. The said subdivision was also granted. Agreements to
lease were executed with the two Petitioners. M/s Shishir
Realty Pvt. Ltd was permitted to mortgage the said plot; the
loan facilities were availed by them; Commencement
Certificate was granted by Navi Mumbai Corporation; work
of construction had commenced and, thereafter, after three
years, the change of user, subdivision of plot and
agreements to lease were cancelled. Petitioners, therefore,
had acted to their detriment on the representation made by
the CIDCO and, thereafter, unilaterally, CIDCO had cancelled
the said agreements. The impugned order is, therefore,
liable to be set aside on this ground alone.
20. The second aspect which also needs to be taken into
consideration is that, admittedly, CIDCO was initially acting
in duel capacity since it was also a Planning Authority. The
State of Maharashtra had decided to develop a twin City
known as Navi Mumbai and CIDCO was formed. There was
(WP702/11, 5245/11 & PIL 55/11)
admittedly no development plan for Navi Mumbai
Corporation and broadly certain nodes were given to CIDCO.
The land in question though was earmarked for Five Star
Hotel, it was admittedly in Zone which was fixed for
commercial-cum-residential user and, as such, the change of
user partly for Five Star Hotel and partly for commercial-
cum-residential user by itself was not illegal and contrary to
any development plan. It is an admitted position that in
countless cases, CIDCO had permitted such change of user.
It cannot be said, therefore, that the action of CIDCO in
allowing the change of user or subdivision of plot was
contrary to the provisions of Maharashtra Regional Town
Planning Act or any other law or Regulation. Feeble attempt
was made by the learned Counsel appearing on behalf of the
PIL Petitioners by contending that CIDCO itself did not have
an authority or power to permit the change of user or
subdivision of plot since on the date on which the said
change of user was allowed, it was no longer the Planning
Authority, since, by Notification, the Government had made it
clear that from 1997, the said Navi Mumbai Corporation
alone was a Planning Authority. The learned Counsel
appearing on behalf of the PIL Petitioners has tried to draw
our attention to the said Notification in support of his
submission. Surprisingly, this submission has not been
supported either by the learned Senior Counsel Mr. V.A.
Thorat who had appeared on behalf of CIDCO in the case of
Shishir Realty Pvt. Ltd or by the learned Counsel Mr. Marne,
(WP702/11, 5245/11 & PIL 55/11)
who had appeared on behalf of Navi Mumbai Municipal
Corporation. It is obvious that the said submission is
misconceived and is not supported by any provision.
21. The learned Senior Counsels appearing on behalf of
Shishir Realty Private Ltd and M/s Metropolis Hotels then
challenged the reasons given by CIDCO for passing the
impugned order. It has been submitted that three reasons
had been given viz (i) M/s Metropolis Hotels was not
registered in June/July, 2008 when it submitted tender, (ii)
change of user in respect of 23000 sq. meters of plot
permitted by CIDCO on 11/2/2010 was illegal and (iii) sub-
division of plot and execution of two agreements to lease
was contrary to the tender condition and the plot was
subdivided even before execution of agreements to lease. It
has been submitted that the Petitioner Firm had duly
disclosed alongwith its application that the Firm had applied
for registration and the Registration Form and Partnership
Deed were forwarded alongwith the tender and,
subsequently, the Firm was duly registered. It has been
contended that the CIDCO had accepted and entertained the
tender with full knowledge of the said fact, possibly because
the Petitioners' Tender was higher than the next bid and the
difference was about Rs 23 crores between the Petitioners'
bid and the next bid. It has been then submitted that CIDCO
had accepted the tender and, thereafter, allotted the plot
and acted on the basis of allotment for a period of three
(WP702/11, 5245/11 & PIL 55/11)
years. It has been further submitted that CIDCO had
accepted the lease premium of Rs 282,39,99,700/- from the
Petitioners - M/s Metropolis Hotels and further transfer
fee of Rs 1,38,56,000/- at the time of change of user and
Rs. 8.50 lakhs and Rs 721 lakhs at the time of subdivision
and execution of agreements to lease. It has been therefore
submitted that it was not open for CIDCO to contend after a
lapse of three years that the Petitioner Firm's tender was not
eligible on the ground of non-registration of the Firm.
22. Mr. Thorat, the learned Senior Counsel appearing on
behalf of CIDCO and Mr. Bhatt the learned Counsel appearing
on behalf of PIL Petitioners vehemently opposed the said
submission and contended that when CIDCO realized after
new Chairman was appointed that certain illegal allotment of
land had been made, inquiry was held and it was noticed
that the tender bid of the Petitioners could never have been
accepted and, therefore, in the impugned order it was
correctly held that the Petitioners - M/s Metropolis Hotels
being not eligible, the allotment made to them was liable to
be cancelled on that ground alone. Mr. Bhatt the learned
Counsel for PIL Petitioners submitted that, in fact, there was
collusion between the Petitioners and the CIDCO authorities
and this could be clearly seen from the acceptance of tender
bid of the Petitioners. He submitted that CIDCO authorities
had tried to favour the Petitioners and deliberately ignored
this lapse on the part of the Petitioners.
(WP702/11, 5245/11 & PIL 55/11)
23. In our view, there is much substance in the submission
made by the learned Senior Counsels appearing on behalf of
the Petitioners. It is an admitted position that M/s Metropolis
Hotels had disclosed the fact of non-registration and
annexed the Registration Form and the Partnership Deed. It
is also admitted that soon thereafter the Firm was registered.
CIDCO authorities were aware about this fact and they had
accepted the tender, acted on it for a period of three years
by allotting the land to M/s Metropolis Hotels and had further
accepted the lease premium of Rs 282,39,99,700/- from the
Petitioners. Thereafter, transfer fee of Rs 1,38,56,000/- was
accepted at the time of change of user and the CIDCO had
also accepted an amount of Rs 8.50 lakhs and Rs 721 lakhs
at the time of subdivision and execution of agreements to
lease. Having done that, it is now not open for CIDCO
authorities to contend that the tender bid could not have
been accepted or that the Petitioners - M/s Metropolis Hotels
were not qualified.
24. The second reason given in the impugned order for
cancellation of allotment of land was that change of user
which was permitted by CIDCO was illegal. Admitted position
is that the Petitioners - M/s Metropolis Hotels had made an
application for change of user of portion of the plot
admeasuring 34000 sq. meters on 29/12/2009 and in the
said application reasons seeking change of user were
(WP702/11, 5245/11 & PIL 55/11)
mentioned. This application was considered and approved
by the CIDCO after taking into consideration the Board
Resolution dated 08/12/2007 which had approved the
general policy permitting expansion of certain users. In the
said Resolution, Managing Director/Joint Managing Director
were authorized to permit change of user on payment of
premium and it was specifically mentioned in the said policy
that user for hotel could be changed/expanded to hotel-cum-
residential on payment of charges of Rs 500/- per sq. meter.
This application for change of user was processed and the
opinion from all Departments was called for. Accordingly,
Marketing Manager and Chief Town Planner had given their
detailed notes in which they had considered various aspects
and, thereafter, after taking into consideration all these
aspects a decision was taken by the Vice-Chairman and
Managing Director of CIDCO. It has to be noted here that M/s
Metropolis Hotels had asked for extension of time for
payment of installments of the lease amount on account of
financial constraints. While granting permission for change
of user, CIDCO authorities had imposed a condition that M/s
Metropolis Hotels should immediately pay the second and
final installment of lease premium of Rs 132.44 crores and
they were also asked to pay additional amount of Rs 115
lakhs and Rs 23.56 lakhs as administrative/miscellaneous
charges. Petitioners - M/s Metropolis Hotels paid
additional/miscellaneous charges on 11/2/2010 and on
15/2/2010 they paid CIDCO the second and final installment
(WP702/11, 5245/11 & PIL 55/11)
of the lease premium.
25. It has also been contended by the learned Senior
Counsels appearing on behalf of the Petitioners that CIDCO
under the said policy had granted such change of user in
numerous cases. This fact has not been specifically denied
by CIDCO. The examples given by the Petitioners in the
affidavit-in-rejoinder have not been specifically denied by
CIDCO. It is therefore clear that CIDCO had the authority to
grant such change of user under the General Policy
Resolution dated 08/12/1997. CIDCO authorities having
allowed the application for change of user and acted on it by
accepting administrative/miscellaneous charges and the
premium paid by M/s Metropolis Hotels, they are now
estopped from contending that their decision was invalid or
the said decision could be set aside after it was acted upon
by the Petitioners. In our view, therefore, the CIDCO
authorities had power and authority to grant change of user
in view of the general policy Resolution dated 08/12/1997
since they had allowed the application of the Petitioners and
had acted upon it and therefore they could not have
impugned the order of allotment on this ground.
26. The third ground which has been given in the
impugned order is that the subdivision of the plot and
execution of agreements to lease; one in favour of M/s
Metropolis Hotels and the other in favour of M/s Shishir
(WP702/11, 5245/11 & PIL 55/11)
Realty Private Ltd. were illegal.
27. So far as subdivision of plot is concerned, it is a matter
of record that one month after the change of user was
permitted, an application was made for subdivision of the
plot in two separate plots and permission was also sought for
separate lease in respect of the two subdivided plots. The
learned Senior Counsel appearing on behalf of CIDCO and the
learned Counsel appearing on behalf of PIL Petitioners have
contended that subdivision and assignment was invalid and
in breach of the tender condition, allotment condition and
also was in breach of Regulation 10A. It has been firstly
contended that subdivision and assignment could have been
done only after execution of Agreement to lease. While, on
the other hand, the learned Senior Counsels appearing on
behalf of Petitioners have submitted that the Petitioners have
paid entire premium of Rs 282 crores before seeking
subdivision and the Agreement to lease was executed on the
very next day i.e on 30/03/2010. It is, therefore, submitted
that the fact that it was executed on the very next day
would not invalidate the permission to subdivide and assign.
It has been further submitted by the learned Senior Counsels
for the Petitioners that subdivision and assignment had been
duly acted upon by CIDCO by executing two separate lease
agreements upon payment of Rs 721 lakhs and the CIDCO
had also further granted permission to Shishir Realty Private
Ltd. to mortgage the said plot. It is also submitted that in the
(WP702/11, 5245/11 & PIL 55/11)
impugned order subdivision and assignment was held to be
invalid because it was in breach of tender/allotment
conditions and only during the oral arguments it was
contended that it was in breach of Regulation 10A which
contention was not pleaded by CIDCO in their reply and by
the PIL Petitioners in their Petition.
28. In this context, it would be relevant to take into
consideration clause 16 of the general terms of the tender
and clause 21 of the conditions stipulated in the allotment
letter which are reproduced hereinbelow:-
"16. Transfer of assignment of rights
The intending lessees can transfer or
assign his rights, interests or benefits
which may accrue to him from the
Agreement with the prior written
permission of the Corporation and on
payment of such transfer charges as
may be prescribed by the Corporation
from time to time. Such permission
can however be granted only after the
agreed lease premium and any other
amount required has been paid in full
and after execution of Agreement to
lease. In case of transfer of plot, the
Transferee should fulfill all eligibility
(WP702/11, 5245/11 & PIL 55/11)
conditions prescribed in condition 4 of
the invitation of offer."
"21. Transfer or Assignment of Rights:
You can transfer or assign his rights,
interests or benefits which may accrue to
him from the Agreement with the prior
written permission of the Corporation and
on payment of such transfer charges as
may be prescribed by the Corporation from
time to time. Such permission can however
be granted only after the agreed lease
premium and any other amount required
has been paid in full and after execution of
Agreement to lease. In case of transfer of
plot, the transferee should fulfill all eligibility
conditions prescribed in condition 4 of the
invitation of offer."
Perusal of clause 16 clearly reveals that allottee was
permitted to transfer or assign his rights, interests or benefits
with prior written permission of the Corporation and on
payment of such transfer charges as may be prescribed by
the Corporation. Both the clauses have further stipulated
that such permission could be granted only after the agreed
lease premium has been paid in full and after execution of
Agreement to lease. In the present case, agreed lease
(WP702/11, 5245/11 & PIL 55/11)
premium was paid in full. However, Agreement to lease was
made on the very next day i.e. on 30/03/2010. In our view,
merely because the Agreement to lease was executed on the
very next day, that by itself wold not invalidate the
assignment and transfer by the Petitioners since prior written
permission was obtained and Agreement to lease was in fact
executed on the next day.
29. In view of the above, it can be seen that if the impugned
order is examined from any angle, all the reasons which have
been given for cancelling the allotment will have to be held
to be illegal and the Corporation is precluded and estopped
on the doctrine of promissory estoppel from cancelling the
allotment on the aforesaid grounds.
30. It has been then strenuously urged that financial loss
was caused to CIDCO. It has been argued by Mr. Thorat, the
learned Senior Counsel appearing on behalf of CIDCO that
the fact that CIDCO accepted Rs 282 crores from Shishir
Realty Private Ltd itself indicated that loss was caused to
CIDCO which was to the extent of Rs 282 crores. It has been
vehemently urged that if the CIDCO had invited tenders in
respect of the said plot, it would have fetched that much
amount. In our view, there is no substance in the said
submission. Firstly, perusal of the extract of the Report of
the Secretary clearly reveals that in his report he has
specifically noted that CIDCO had not suffered any loss of
(WP702/11, 5245/11 & PIL 55/11)
revenue. Moreover, in the year 2008 the bid of the
Petitioners - M/s Metropolis Hotels was highest at Rs 60,085/-
followed by Rs 55,319/- of M/s Indian Hotels Co. Ltd.
Similarly, it has been placed on record that even in
December, 2008 CIDCO had received bid of only Rs 55,000/-
per square meter in respect of the plot for residence-cum-
commercial use. It has been rightly argued by the learned
Senior Counsels appearing on behalf of the Petitioners that
CIDCO had received Rs 5000/- per sq. meter more from the
Petitioners even on the basis of residence-cum-commercial
use and thus there is no substance in the allegation of loss of
revenue. As rightly submitted by Mr. Chinoy the learned
Senior Counsel that reference to the amount received by
Shishir Realty Pvt. Ltd in 2010 i.e. two year later is
misleading and could not be the basis for alleged loss which
might have been caused to CIDCO in 2008. He has rightly
pointed out that the chart of property prices annexed by the
PIL Petitioners shows that by mid 2010 prices in the area had
doubled over the prices prevailing in 2008. He submitted that
rates of 2010 cannot be related back to the rates in 2008 and
the submission that the loss was caused to the Corporation
is, therefore, without any substance.
31. Both, the learned Senior Counsel appearing on behalf of
the Corporation and the learned Counsel appearing on behalf
of PIL Petitioners have given list of authorities. In our view, it
is not necessary to refer each and every authority which has
(WP702/11, 5245/11 & PIL 55/11)
been cited since, in our view, ratio of these judgments do not
even remotely apply to the facts of the present case.
32. For the aforesaid reasons, Writ Petition No.702 of 2011
filed by Shishir Realty Private Ltd is allowed in terms of
prayer clauses (a) and (b) and Writ Petition No.5245 of 2011
filed by M/s Metropolis Hotels is allowed in terms of prayer
clause (a). The impugned order passed by CIDCO is quashed
and set aside. Rule in both these Petitions is made absolute
accordingly. PIL No.55 of 2011 is dismissed and the Rule is
discharged. However, there shall be no order as to costs.
33. Petitions are disposed of accordingly.
(S.C.GUPTE, J.) (V.M. KANADE, J.)
B..D. Pandit
PS.
