Bombay High Court
Kamlakar Bhimrao Patil vs Maharashtra Industrial ... on 30 November, 2017
Bench: Anoop V. Mohta
WP. 9315-05.doc
VPH
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION No. 9315 OF 2005
1 Kamlakar Bhimrao Patil )
Adult, Age 37 yrs. Proprietor of )
Maitreya Group of Companies, )
Residing at Flat No.12, IVth floor, )
Bipin Vijay Super Market, )
Burud Galli, Sangli )
2 Terrafirm Softtech Private Limited )
formerly known as Everest Realtors )
Pvt. Ltd., a company registered )
under the Companies Act, 1956 )
having its registered address )
at Everest House, Office Floor, )
th
Plot No.157 18 Road, )
Near Ambedkar Garden, Next to SBI, )
Chembur (East), Mumbai-400 071. ... Petitioners
Vs.
Maharashtra Industrial )
Development Corporation )
A Statutory Corporation, constituted )
under the Provisions of the MIDC )
Act, having registered office at )
Jeevan Prakash, 4th floor, )
Mumbai 400 001. ... Respondent
***
Mr. Virag Tulzapurkar, Sr. Advocate a/w Sowmya Shrikrishnan for the
Petitioners.
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WP. 9315-05.doc
Mr. Shrihari Aney, Sr. Advocate a/w Ms. Shyamali Gadre a/w Shamira
Naik i/b M/s. Little & Co. for the Respondent-MIDC.
***
CORAM : ANOOP V. MOHTA, &
MANISH PITALE, JJ.
RESERVED ON : NOVEMBER 28, 2017
PRONOUNCED ON : NOVEMBER 30, 2017
JUDGMENT [PER : MANISH PITALE, J.]
1. Heard. Rule. Rule is made returnable forthwith. Learned
advocate Ms. Shyamali Gadre waives service of notice for the
Respondent - MIDC. By consent of parties, petition is taken up for
final hearing.
2. The Petitioners have invoked writ jurisdiction of this
Court praying for quashing of letter dated 30 th March, 2005 issued by
the Respondent - Maharashtra Industrial Development Corporation
(hereinafter referred to as the "MIDC"), as being arbitrary and illegal
and they have further sought a direction to the MIDC to execute lease-
deed in favour of Petitioner No. 2 in respect of the piece of land in
question, allegedly allotted to them in what is called the Knowledge
Park Airoli, with a further direction to place the Petitioners in
possession of the said piece of land. The essential grievance of the
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Petitioners is that, having allotted the said piece of land in their favour,
and the Petitioners having adhered to the requirement of deposit of
consideration amount, the MIDC could not have returned the demand
drafts of the said amount by the impugned letter dated 30.3.2005,
thereby rescinding the allotment of the said land made in favour of the
Petitioners.
3. The facts of the present case, as discernible from the
pleadings and documents on record, are as follows:
. On 7.7.2004 the Petitioner No. 1 made an application for
allotment of the land in question i.e. 116000 sq. mts. in Knowledge
Park, Airoli to the MIDC in terms of the MIDC Land Disposal
Regulations, 1975 (hereinafter referred to as the "Land Disposal
Regulations"), wherein the land can be disposed by the MIDC either
by public auction or by entertaining individual applications. The
Petitioner No. 1 submitted the said application alongwith a Project
Note, giving a brief description of the project that he intended to start
on the said piece of land. Petitioner No. 1 was called to attend a
meeting with the Land Allotment Committee of the MIDC on
9.8.2004, and thereafter on 17.8.2004 a resolution was passed by the
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MIDC to allot the said piece of land in favour of Petitioner No. 1 by
charging premium @ Rs. 1,800/- per sq. mt., amounting to a total
consideration (premium) of Rs. 20,88,00,000/- (Rupees Twenty crores,
Eighty Eight Lakhs).
4. On 15.9.2004 the Area Manager of the MIDC issued an
offer letter to Petitioner No. 1 stating that the Land Allotment
Committee of the MIDC had decided to offer him the said land in
question by charging premium at the aforesaid rate. The Petitioner
No. 1 was requested to submit the enclosed blue application,
completed in all respects with a demand draft of Rs. 10,44,00,000/-
towards earnest money within 15 days of the receipt of the offer letter.
The said amount was equivalent to half of the total amount of
consideration for the said land. As per Clause 9 of the said offer letter,
it was stated that said offer was valid only for 15 days, by the end of
which the offer letter would stand lapsed. Clause 8 of the said letter
stated that the MIDC reserved its right to reject the application without
assigning any reason. On 29.9.2004, Petitioner No. 1 submitted a
letter to the concerned Minister, who was Chairman of the MIDC,
seeking extension of 90 days period i.e. upto 30.12.2004 for deposit of
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the aforesaid amount of earnest money. An endorsement on the said
letter by the Minister / Chairman of the MIDC states that such
extension stood granted. As a result, Petitioner No. 1 now had
extended time till 30.12.2004 to submit the blue application alongwith
the aforesaid amount of earnest money.
5. On 18.12.2004 Petitioner No. 1 in the capacity of the
Director of Petitioner No. 2 submitted the blue application before the
MIDC, but the demand draft of the amount of earnest money was not
submitted alongwith the said application. On 27.12.2004, Petitioner
No. 1 claimed to have entered into an arrangement with Petitioner No.
2 - Company for the proposed Project on the said land. On
30.12.2004, which was the last date of the extended period for
submission of the blue application alongwith the demand draft of the
aforesaid amount of earnest money, a person claiming to be a partner
of one of the group of companies of Petitioner No. 2, sent a letter to
the Regional Officer of the MIDC claiming that he was making
arrangement for deposit of the amount but as he was stranded in
Malaysia on account of Tsunami, he would be able to deposit
demand draft as soon as he returned to India in the first week of
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January, 2005. It is relevant that the scored out portion in the said
letter stated that a cheque for amount of Rs. one crore, dated 6.1.2005
was being enclosed but since the said portion was scored out, there
was no such cheque accompanying the said letter dated 30.12.2004.
Thus, even on the last day of the extended period, the Petitioners had
failed to deposit earnest money, as required under offer letter dated
15.9.2004. In fact, no amount was deposited by the said date.
6. Thereafter on 13.1.2005, the Petitioners submitted a letter
to the Regional Officer of the MIDC stating that, as promised by one
of the Directors of Respondent No. 2 by letter 30.12.2004, a demand
draft of Rs. one crore was being sent alongwith letter dated 13.1.2005.
It was also stated that Petitioners were making arrangements from
Banks and Financial Institutions for payment of the balance premium
amount. A request was made in this letter that further communications
may be addressed in the name of Petitioner No. 2. On 14.1.2005 the
Regional Officer of MIDC sent a letter to Petitioner No. 2 referring to
the aforesaid letter dated 13.1.2005 and requested for certain
documents. On 17.1.2005, Petitioner No. 1 sent a letter to the Chief
Executive Officer of the MIDC requesting that appropriate directions
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be given to the Regional Officer of MIDC for issuing letter in the
name of Petitioner No. 2 and further that he was ready to deposit the
entire amount of premium instead of the earnest money, which was
only half of the entire premium. On 31.1.2005 Petitioner No. 2
submitted documents before the Regional Officer of the MIDC.
7. On 4.2.2005 the Area Manager of the MIDC sent a letter
to Petitioner No. 2, returning the demand draft of Rs. one crore dated
13.1.2005 and it was stated that the proposal for allotment of the land
to the Petitioner No. 2 could not be considered. The Petitioners have
seriously disputed the existence of the said letter dated 4.2.2005 on the
ground that they never received such a letter.
8. Thereafter on 9.3.2005, Petitioner No. 1, as Director of
Petitioner No. 2 Company sent a letter to the Chairman of the MIDC,
enclosing three demand drafts, amounting to balance premium of
Rs.19,88,00,000/-. It was stated in this letter that as per a meeting held
on 7.3.2005 with the Chairman, the Chief Executive Officer of MIDC
agreed to accept the aforesaid balance premium for the land in
question towards full and final payment. A request was made that a
lease agreement may be executed in the name of Petitioner No. 2 for
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the said land. On 30.3.2005 the Area Manager of MIDC sent a letter
to Petitioner No. 2 returning all the four demand drafts, amounting to
entire premium, stating that the request of Petitioner No. 2 for
allotment of land in question at the Knowledge Park, Airoli could not
be considered.
9. It is this letter, which is the subject matter of challenge in
the present writ petition, filed on 22.12.2005. It is relevant to mention
here that when the present writ petition was filed on 22.12.2005, the
Petitioners did not annex the letter dated 9.3.2005 whereby they had
deposited the amount of balance premium, although a reference was
made to the fact that the demand drafts for the balance premium
amounts were deposited by the Petitioners on or about 9.3.2005. The
writ petition was heard by this Court on 31.1.2006 and an order was
passed dismissing the same on the ground that Petitioners were
claiming specific performance of contract, which prayer could be
considered by a civil court of competent jurisdiction. Aggrieved by
the same, Petitioners filed a Special Leave Petition (Civil) No. 3162 of
2006 wherein notice was issued by the Hon'ble Supreme Court on
20.2.2006 and interim direction was given that no third party rights
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would be created.
10. On 28.1.2009, the Hon'ble Supreme Court disposed of the
said SLP by granting leave and holding that the High Court could have
decided the matter. The writ petition was restored by the Hon'ble
Supreme Court, directing the parties to appear before this Court on
9.2.2009, extending the interim direction till the said date. The
Hon'ble Supreme Court categorically observed that it had not
expressed any opinion on merits of the case. The interim direction of
the High Court was continued by this Court. It is seen from the record
that even before the Hon'ble Supreme Court, the Petitioner did not
annex a copy of the letter dated 9.3.2005 whereby they had deposited
the demand drafts towards balance premium. The Petitioners made
only a reference to the said date in the SLP.
11. On 10.5.2012 the MIDC filed its reply to the writ
petition, opposing the prayers of the Petitioners, in response to which
on 20.6.2012 the Petitioners filed their rejoinder. Thereafter,
Petitioners applied for extensive amendment of the writ petition,
which was allowed by this Court on 22.11.2012 and the amendment
was carried out on 30.11.2012. The writ petition, upon remand from
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the Hon'ble Supreme Court, has now come up for final hearing before
us.
12. Mr. Virag Tulzapurkar, learned senior counsel appearing
on behalf of the Petitioners submitted that the impugned letter dated
30.3.2005, whereby the Respondent MIDC returned the demand drafts
of the Petitioners and communicated that request of the Petitioners for
allotment of the land in question could not be considered, was wholly
arbitrary and unsustainable, which was required to be quashed and set
aside. He contended that the said land had already been allotted to the
Petitioners and that since the Petitioners had deposited the entire
premium amount of Rs. 20,88,00,000/-, there was no reason why the
MIDC could escape from its duty to execute lease-deed in respect of
the said land in favour of the Petitioners and handing over possession
of the same. It was contended that even as per the Land Disposal
Regulations of the MIDC, an allottee could deposit the premium
amount within six months of the date of the offer letter, and the
Petitioners having made such deposit within the said period, the
MIDC could not have issued the impugned letter dated 30.3.2005. It
was further contended that a concluded contract between the parties
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existed and that the MIDC could not have issued the impugned
communication when it had accepted the initial demand draft of Rs.
one crore, and thereafter it had accepted the balance premium amount
on 9.3.2005 in pursuance of the extension granted by the Chairman of
the MIDC in the presence of Chief Executive Officer in a meeting
held on 7.3.2005. It was also contended that the MIDC being an
agency and instrumentality of the State was expected to act in a
reasonable, fair and non arbitrary manner, even though the present
case concerns a contractual matter. It was also submitted on behalf of
the Petitioners that even if it was assumed that this was not a
concluded contract between the parties, the cancellation of allotment
by the MIDC by letter dated 30.3.2005 was illegal and invalid, since it
was an administrative decision, which did not satisfy the test of
reasonableness and non-arbitrariness. A further contention raised on
behalf of the Petitioners was that there was breach of principles of
natural justice as no hearing was given to the Petitioners before
issuance of the impugned letter and that there was total non
application of mind by the Respondent - MIDC.
13. The learned senior counsel appearing on behalf of the
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Petitioners, in support of his contentions, relied upon following
judgment of Hon'ble Supreme Court and this Court:
(i) Mahabir Auto Stores & Ors. Vs. Indian Oil
Corporation & Ors.1
(ii) Rajesh Sadanand Vs. Addl. Collector, Pune2;
(iii) Oryx Fisheries Pvt. Ltd. Vs. Union of India &
Ors.3
(iv) City Industrial Development Corporation Vs.
Platinum Entertainment & Ors.4
(v) Mohinder Singh Gill & Anr. Vs. The Chief
Election Commissioner, New Delhi & Ors.5
14. Per contra, Mr. S. G. Aney, learned senior counsel
appearing on behalf of the Respondent MIDC contended that the
claims made by the Petitioners, particularly after amendment of the
writ petition, gave rise to disputed questions of fact and that it was for
the civil court to decide the dispute raised by the Petitioners and not
the writ court. It was contended that there was no material produced
by the Petitioners to show that a meeting had taken place between the
Petitioners and the Chairman of the MIDC in the presence of its Chief
Executive Officer, other than claims made by the Petitioners in the
1 (1990) 3 SCC 752
2 2003 (2) Mh. L. J. 200
3 (2010) 13 SCC 427
4 (2015) 1 SCC 588
5 AIR 1978 Supreme Court 851
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letter dated 9.3.2005 and other communications, as also in the writ
petition. It was contended on behalf of the MIDC that disposal of the
lands of the MIDC is governed by MIDC Disposal of Land
Regulations, 1975 and that the procedure of acceptance of earnest
money and extension of time for such acceptance in pursuance of offer
letter is governed by Circular dated 5.5.1990.
15. It is further contended that on reading of the offer letter
dated 15.9.2004 in the present case along with Circular dated 5.5.1990
and Land Disposal Regulations, it would be clear that in the present
case Petitioners could have maintained the claim on the land in
question only if they had deposited earnest money i.e. 50% of the
premium amount (Rs. 10,44,00,000/-) either before expiry of the
period of 15 days from the offer letter dated 15.9.2004 or before
expiry of the extended period of 90 days i.e. on or before 30.12.2004.
It was contended that when the Petitioners failed to deposit the said
earnest money, by operation of the aforesaid circular and the Land
Disposal Regulations, the offer made to the Petitioners lapsed and that
no further communication was required on behalf of the MIDC in the
matter. It was pointed out that the Petitioners had failed to deposit
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even a single rupee before expiry of the extended period. It was
contended that Petitioners had failed to make out basic foundational
fact regarding the existence of the concluded contract between the
parties, for this court to exercise writ jurisdiction. It was also
contended that since the Petitioners had failed to comply with the
conditions of the offer letter dated 15.9.2004 and the extension granted
on 29.9.2004, there was no acceptance of the offer and in this situation
the Petitioners could not claim any relief. The learned senior counsel
appearing for the Respondent - MIDC relied upon the following
judgments:
1. Ratan Singh Rathore & Ors., Appellants Vs. Vikram
Cement, Respondent6;
2. Noor Aga, Appellant Vs. State of Punjab & Anr,
Respondents7;
3. R. Maheswari, Appellant Vs. Secretary, Selection
Committee, Tamil Nadu Professional Courses, Madras &
Anr., Respondents8;
4. State of U. P., Appellant Vs. Kishori Lal Minocha,
Respondent9;
6 AIR 2009 SC 713
7 (2008) 16 SCC 417
8 AIR 1995 Mad 168
9 AIR 1980 SC 680
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5. Union of India & Ors, Appellants Vs. Mohanlal Likumal
Punjabi & Ors.10;
6. State of U. P., Appellant Vs. Sheo Shankar Lal Srivastava
& Ors., Respondents11;
7. Sukhdev Singh & Ors., Appellants Vs. Bhagat Ram &
Ors.12;
8. State of Bihar & Ors., Appellants Vs. Jain Plastics &
Chemicals Ltd.13
16. We have referred to the chronology of facts and the
related documents in detail because an appreciation of the sequence of
events in the present case is necessary in order to analyse and
pronounce upon the contentions raised on behalf of the parties.
17. At the outset, we are of the opinion that the contentions
raised on behalf of the Respondent MIDC that the present case,
particularly after amendment of the writ petition, involves disputed
question of facts and therefore, writ jurisdiction may not be exercised,
does not deserve to be accepted. We find that challenge to the
impugned action of the MIDC in the present case is on the basis that
10 (2004) 3 SCC 628
11 AIR 2006 SC 3548
12 AIR 1975 SC 1331
13 AIR 2002 SC 206
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such action is arbitrary, unreasonable and unfair and that such
challenge can certainly be entertained in writ jurisdiction.
18. The central question that arises for consideration in the
present case is as to what is the manner and procedure in which the
Respondent MIDC can dispose of lands and whether the claims of the
Petitioners, as regards to their entitlement to the land in question, can
be said to be within the framework of such procedure The related
question is, whether in the present case, action of the Respondent
MIDC in issuing letter dated 30.3.2005, thereby refusing to consider
case of the Petitioners for allotment of the land, can be said to be
arbitrary, unreasonable and unfair, requiring interference from this
court while exercising writ jurisdiction.
19. The admitted facts narrated above, show that the
Petitioners were required to deposit earnest money amounting to 50%
of the total premium within 15 days of the offer letter dated 15.9.2004
issued by the MIDC. It is an admitted position that the Petitioners
failed to make such deposit and on 29.9.2004, they applied for
extension of time for making such deposit, which extension was
granted by the Chairman of the MIDC. This extended period was till
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30.12.2004. It is also an admitted position that the Petitioners failed to
deposit the aforesaid earnest amount on or before 30.12.2004. In fact,
not a single rupee was deposited by the Petitioners till the said date.
There is only a letter dated 30.12.2004, written by the Director of one
of the group of companies of Petitioner No. 2, promising that an
amount of Rs. one crore would be deposited in the first week of
January 2005. This letter also does not promise deposit of earnest
money which was 50% of the entire premium. There is also,
admittedly, no written application from the Petitioners for further
extension of time on or before 30.12.2004.
20. It is only on 13.1.2005 that a demand draft of Rs. one
crore is deposited by the Petitioners for the first time. Thereafter, the
Petitioners sent the demand drafts of the balance premium amount
along with their letter dated 9.3.2005. This letter and the demand
drafts are sent by the Petitioners on the basis of a purported meeting
with the Chairman of the MIDC, in the presence of the Chief
Executive Officer. There are no minutes of the meeting said to have
taken place on 7.3.2005 and there is no document showing any
application submitted by the Petitioners for further extension of time
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for deposit of balance premium, although when the extension of time
was granted upto 30.12.2004, there was a written application by the
Petitioners in the form of letter dated 29.9.2004 on which the
Chairman of the MIDC had granted extension by making an
endorsement. There is, admittedly, no such document for further
extension of time. The reliance placed by the Petitioners on letter
dated 14.1.2005 sent by MIDC to claim that it amounted to the MIDC
entertaining the case of the Petitioners for extension of time, is also
wholly misplaced. The said letter only called upon the Petitioners for
some documents concerning status of Petitioner No. 2. Therefore,
other than the alleged meeting dated 7.3.2005, for which there is no
document or written material to support and alleged oral directions
given by the Minister / Chairman of the MIDC on 7.3.2005, there is
no material to show that any extension of time was granted to the
Petitioners beyond 30.12.2004.
21. We have perused Circular dated 5.5.1990, which provides
for revival of offer letter beyond the period of 15 days. In the present
case it is evident that such power, as provided in the aforesaid
Circular, was exercised on 29.9.2004 in favour of the Petitioners
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whereby the period for deposit of earnest money was extended upto
30.12.2004. There is nothing on record to show that in the present
case any such request for further extension of time was made on
behalf of the Petitioners.
22. We have also perused the relevant portions of the Land
Disposal Regulations. The Petitioners have heavily relied upon
proviso to Regulation 12 which provides that the MIDC, in its
discretion, may extend the period for payment of balance premium,
not exceeding 6 months. It is contended on behalf of the Petitioners
that since they have deposited the demand drafts for the entire
premium amount within 6 months from 15.9.2004 i.e. the date of offer
letter, the MIDC was bound under the said Regulation to accept the
amount and to execute the lease-deed in their favour. Relevant portion
of Regulation 12 of the Land Disposal Regulations reads as under:
"12. Payment of balance money. Where any plot of land
is allotted on premium basis, the allottee shall pay the
balance within 30 days from the date of the receipt of the
letter communicating the allotment to him :
Provided that the Corporation may, in its discretion, extend
the period for the payment of the balance premium not
exceeding 6 months on payment of interest at such rate as
may be fixed by the Corporation from time to time on the
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amounts remaining unpaid:
..."
We find that the aforesaid proviso pertaining to the 6 months period
would operate when the party who is given an offer letter deposits
earnest amount with the MIDC within the period stipulated in the offer
letter or in the extended period, which in the present case was till
30.12.2004. It is only when earnest amount is deposited that the
question of payment of balance amount of premium would arise and in
the present case the Petitioners could have taken the benefit of 6
months period under proviso to Regulation 12 of the said Regulations
only if they had deposited earnest amount as per offer letter dated
15.9.2004 within 15 days or on or before 30.12.2004 when the
extended period expired.
23. Having failed to deposit even a single rupee till 30.12.04,
it cannot lie in the mouth of Petitioners that they are entitled to claim
the benefit of 6 months period referred to in the proviso to Regulation
12 of the said Regulations. Therefore, the said contention of the
Petitioners seeking benefit of the said Regulation cannot be accepted.
24. Once we have found that the Petitioners failed to deposit
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even the earnest money in the extended period of time, it becomes
clear that there is no concluded contract between the parties. In this
situation, when offer of the land in question by the MIDC stood
lapsed, the Petitioners cannot claim that the MIDC could not have
returned demand drafts submitted by the Petitioners on 9.3.2005 and
that by doing so, the MIDC acted in an arbitrary and unfair manner.
The only basis for the Petitioners to claim that they were entitled to
the land in question upon depositing the demand drafts on 9.3.2005, is
the alleged meeting that they had with the Minister who was Chairman
of the MIDC, in the presence of the Chief Executive Officer.
According to the Petitioners, it is this meeting and the oral directions
given by the Minister / Chairman of the MIDC that amount to an
extension of period of time for deposit of premium.
25. The Petitioners claim that this meeting and the extension
granted by the Minister / Chairman of the MIDC was in the same
manner, as was granted on 29.9.2004. But the Petitioners have failed
to produce any document or minutes of the meeting to show that any
such meeting ever took place or that oral directions were given by the
Minister / Chairman of the MIDC, which were recorded in any
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manner. The only documents referring to and supporting claim of the
Petitioners that such a meeting took place are the letter dated 9.3.2005
sent by the Petitioners to the Respondent MIDC, and subsequently the
alleged letter dated 6.4.2005 sent to the Chief Minister and the
averments made in the writ petition. Thus, other than the word and
claim of the Petitioners, there is no record to support that such a
meeting ever took place or that any oral or other directions were given
by the Minister / Chairman of the MIDC for extension of time to the
Petitioners for deposit of balance premium.
26. In such a situation, we find that the Respondent MIDC was
well within its rights to send the letter dated 30.3.2005, returning all
the four demand drafts, deposited by the Petitioners for allotment of
land in question. Admittedly, all the four demand drafts were
submitted to the MIDC much after expiry of the extended period of
30.12.2004. Even if we accept the contention of the Petitioners that
the Respondent MIDC never sent the letter dated 4.2.2005 whereby
the first demand draft of Rs. one crore was allegedly returned, it still
does not carry the case of the Petitioners any further. The Petitioners
have to make out their own case in support of the contentions raised in
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the writ petition. We find that, other than the purported oral directions
given by the Minister / Chairman of the MIDC in the alleged meeting
dated 7.3.2005, the Petitioners have no basis to claim that MIDC had
granted any specific extension of time for deposit of premium, or that
any right had crystalised in favour of the Petitioners, despite the fact
that they failed to deposit even a single rupee towards the earnest
money till 30.12.2004.
27. In the case of Mumbai International Airport Pvt. Ltd.,
Appellant Vs. Golden Chariot Airport & Anr., Respondents 14, the
Hon'ble Supreme Court has held that the contesting respondent
therein was not justified in claiming relief on the ground that Officer
of the Airport Authority of India had orally assured for extension of
licence because mere oral assurance of extension of license by officer
of the Airport Authority of India was of no legal consequence since no
such assurance had been proved and even if it was proved, such
assurance did not and could not bind the Airport Authority of India.
This was because being a statutory corporation, it was bound by the
Airport Authority of India Act, 1947 and the regulations framed
thereunder. The relevant portion of the said judgment reads as follows:
14 2010 (10) SCC 422
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"34. The AAI is a statutory body constituted under Section 3
of the Airport Authority of India Act, 1994 (the AAI Act).
Under Section 3(2) of the AAI Act, it is a body corporate with
power to hold and dispose of both movable and immovable
property and to contract. The power of the AAI to enter into
contracts has been conferred under Section 20 read with
Section 21 of AAI Act. As per Section 20, the AAI is
competent to enter into contracts (subject to the provisions of
Section 21) which may be necessary to discharge its functions
under the AAI Act.
35. Section 21 of AAI Act lays down the mode of executing
contracts on behalf of AAI. The Section requires that every
contract on behalf of AAI is to be made by the Chairperson or
any other member/officer who has been empowered to do so.
Further, the contracts, which have been specified in the
Regulations, have to be sealed with the common seal of AAI.
Sub-section (2) of Section 21 of AAI Act provides that the
form and manner of the contract shall be such as may be
specified by the Regulations.
36. The relevant Regulations have been framed by the AAI
with the previous approval of the Central Government and in
exercise of the power conferred on it under Section 42(1) read
with Section 42(2)(e) and (4), read with Section 21 of the
AAI Act, 1994 and the regulations are called the Airports
Authority of India (Contract) Regulations 2003. Obviously
the regulations are statutory.
37. The said Regulations specify that contracts by AAI are
required to be sealed with the common seal of AAI. They
further provide that contracts are to be made with the
previous approval of the Central Government and AAI.
Regulation 3(3) also state that all contracts shall be finalized
by the execution of a Deed of Agreement, Deed of Licence,
Indenture or like instrument, duly signed by AAI and the
party concerned, and the said instruments or deeds are to be
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executed on non-judicial paper of appropriate stamp value
when necessary.
38. Having regard to the aforesaid statutory framework, the
case of the contesting respondent that it was orally assured of
extension of licence by some officer of AAI is of no legal
consequence. No such assurance has been proved, even if it is
proved, such assurance does not and cannot bind AAI. Being
a statutory corporation, it is totally bound by the Act and the
Regulations framed under the Act."
28. Applying the ratio of the aforesaid judgment of the Hon'ble
Supreme Court to the facts of the present case, it is evident that the
Petitioners are not justified in claiming relief in the writ petition on the
basis of purported oral directions given by the Minister / Chairman of
the MIDC on 7.3.2005, which are not supported by any material on
record, other than claims of the Petitioners themselves.
29. Thus, we hold that the Petitioners having failed to deposit
any amount towards earnest money before expiry of the extended
period on 30.12.2004, are not entitled to any relief from this Court
exercising writ jurisdiction. The disposal of lands by the MIDC can
only be in consonance with the aforesaid regulations and circulars
governing the field and the procedure is required to be strictly
followed. If the contentions of the Petitioners are accepted, it would
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lead to a situation where an applicant for a piece of land would not be
required to follow any of the requirements of the procedure governed
by the regulations and the circulars, and upon an offer being made, the
applicant could walk into office of MIDC on the last date of 6 months
period from the date of offer letter to deposit entire premium amount,
claiming that oral directions have been issued by the Minister /
Chairman or any other official of the MIDC. Such a situation cannot
be countenanced in the context of disposal of lands by a statutory
body like Respondent MIDC. Therefore, the contention of the
Petitioners regarding availability of period of 6 months to deposit the
amount is unacceptable. The basic condition of deposit as prescribed
in offer letter was breached, as a consequence there was no question
after 30.12.2004 to consider the case of the Petitioner for extension of
time, quite apart from the fact that no such application for extension
was shown to have been made. In this backdrop, the deposit of
demand drafts on 9.3.2005 by the Petitioners cannot be the basis for
claiming relief.
30. After the completion of hearing of the matter and the
judgment being reserved, the learned senior counsel appearing for the
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Petitioner mentioned the matter on 29.11.2017 to place on record a
recent judgment passed by a Division Bench of this Court in Writ
Petition No. 9659 of 2015 (Smt. Julie Amitabh Parekh & Ors. Vs.
Reliance Asset Reconstruction Company Ltd. & Ors.). By placing
reliance on para 26 of the said judgment, it was contended on behalf
of the Petitioners that where a particular fact is stated on an affidavit, a
non-denial thereto by counter affidavit, would deem such averment to
be uncontroverted and, as such, admitted. It was contended that since
Respondent MIDC, in the present case, had not denied the fact of the
meeting dated 7.3.2005 between the Petitioners and Minister /
Chairman of the MIDC, it stood admitted.
31. But the said judgment and the legal proposition laid down
therein, with which there cannot be any quarrel, does not come to the
aid of the Petitioners. Even if it is accepted that such a meeting took
place and oral directions were given by the Minister / Chairman of the
MIDC, it cannot lead to extension of time for the Petitioners to deposit
the premium amount. As held by the Hon'ble Supreme Court in the
case of Mumbai International Airport (supra) mere oral assurance of
the Minister / Chairman of MIDC shall not bind the MIDC, as it is a
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statutory corporation, totally bound by the MIDC Act and regulations.
Thus, the aforesaid contention of the Petitioners is also rejected.
32. Therefore, we do not find any substance in the contention of
the Petitioners that the Respondent- MIDC ought to have given
detailed reasons while issuing the impugned letter dated 30.3.2005 or
that a hearing ought to have been given to the Petitioners before taking
the impugned action. A defaulting party cannot claim that it was not
heard in the matter when the impugned communication is nothing but
a fallout of the default on the part of the Petitioners. The contention of
the Petitioners that having accepted the demand drafts on 9.3.2005 and
having kept them for 21 days, the Respondent MIDC could not have
issued the impugned communication, is without any substance as the
demand drafts were never encashed. They were, admittedly, deposited
well after expiry of the extended period of time i.e. after 30.12.2004.
33. We have not referred to the judgments relied upon by both
the parties in support of their respective contentions, because there is
no quarrel with the propositions of law laid down therein, but the facts
of the present case are such that the Petitioners are clearly not entitled
to any relief from this Court while exercising writ jurisdiction.
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Accordingly, the writ petition is dismissed and the Rule is discharged
with no orders as to costs. The interim order stands vacated.
Respondent MIDC is at liberty to dispose of the land in question, in
accordance with law.
Sd/- Sd/-
[MANISH PITALE, J.] [ANOOP V. MOHTA, J.]
Vinayak Halemath
. At this stage, the learned senior counsel appearing for the
Petitioners orally requests for continuation of interim order. In view
of the reasons, so recorded in the judgment so pronounced today, we
are not inclined to continue the interim order. The oral request for
continuation of interim order is, therefore, rejected.
Sd/- Sd/-
[MANISH PITALE, J.] [ANOOP V. MOHTA, J.]
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