Bombay High Court
Trishul Construction Co vs City And Industrial Development ... on 10 September, 2024
Author: Amit Borkar
Bench: Amit Borkar
2024:BHC-AS:36361-DB
864.24-wp.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.864 OF 2024
BASAVRAJ M/s.Trishul Construction Co. ..... Petitioner
GURAPPA
PATIL Versus
Digitally signed by
BASAVRAJ GURAPPA
PATIL
Date: 2024.09.10
14:48:27 +0530
City Industrial and Development
Corporation of Maharashtra Ltd. & Anr. ..... Respondents
Mr. Navroz Seervai, Senior Advocate a/w Mr. Rohan Cama,
Mr. Aditya Udeshi, Mr. Sanjay Udeshi, Mr. Rahul Sanghvi,
Mr. Netaji Gawade i/by M/s. Sanjay Udeshi & Co. for Petitioner.
Mr. Janak Dwarkadas, Senior Advocate a/w Ms. Namrata Vinod,
Mr. Rahul Sinha and Mr. Soham Bhalerao i/by DSK Legal for
respondent No.1 - CIDCO.
Mr. P. P. Kakade, Government Pleader with Mr. O. A.
Chandurkar, Additional Government Pleader and Ms. G. R.
Raghuwanshi, Additional Government Pleader for respondent
No.2 State.
CORAM: DEVENDRA KUMAR UPADHYAYA, CJ. &
AMIT BORKAR, J.
RESERVED ON : AUGUST 20, 2024
PRONOUNCED ON : SEPTEMBER 10, 2024
JUDGMENT (PER : CHIEF JUSTICE)
1. Heard Mr.Navroj Seervai, learned Senior Advocate
appearing for the petitioner, Mr. Janak Dwarkadas, learned
Senior Advocate representing respondent No.1 - CIDCO and
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Mr. P. P. Kakade, learned State Counsel. We have also perused
the records available before us on this petition.
(A) Challenge:
2. Initially, the instant writ petition was filed seeking a
direction to respondent No.1 for issuing necessary demand letter
with respect to second installment of lease premium in respect of
the plots in question, viz. Plot No.23 situated at Sector 7, Plot
No.7, situated at Sector 8 and Plot No.6 situated at Sector 8,
Ghansoli, Navi Mumbai along with late payment charges (LPC) in
accordance with the directives issued by the Department of
Urban Development, Government of Maharashtra, in its letter
dated 1st August 2018 addressed to respondent No.1.
3. During pendency of the writ petition, respondent No.2 took
a decision cancelling the allotment of the subject plots made in
favour of the petitioner and further forfeiting the earnest money
deposit and 25% of the paid lease premium, which was
communicated to the petitioner by means of the impugned
letter/order dated 30th January 2024.
(B) Background Facts:
4. Pursuant to a tender process for acquiring plots of land at
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Ghansoli, Navi Mumbai conducted by respondent No.1, the
petitioner was issued letter of allotment by respondent No.1 by
accepting its offer, on 18th December 2007 in respect of Plot
No.23, Sector 7. Similarly, by means of two separate allotment
letters, dated 19th December 2007, the petitioner was also
allotted Plot Nos.6 and 7, Sector 8 at Ghansoli, Navi Mumbai.
The said allotment letters contain certain condition and also
prescribe the payment schedule according to which in respect of
Plot No.23 the first installment was to be deposited by the
petitioner by 24th January 2008 and the second installment was
to be deposited by 25th February 2008. Similarly, in respect of
Plot Nos.6 and 7, Sector 8, the petitioner was required to make
deposit of the first installment by 25 th January 2008 and second
installment was to be deposited in respect of these two plots by
25th February 2008. The petitioner was also required to pay
certain miscellaneous charges.
5. The petitioner is said to have requested for extension of
time for making payment of the first installment of the lease
premium for the subject plots, in response to which extension till
23rd March 2008 was granted by respondent No.1 vide letter
dated 18th January 2008 to make deposit of the first installment
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of the lease premium and accordingly in March 2008 the
payment of the first installment of the lease premium in relation
to the subject plots was deposited.
6. The second installment of the lease premium could not be
deposited in time and according to a request made by the
petitioner, respondent No.1 granted extension of time vide its
letter dated 30th April 2008 for making payment of the second
installment of lease premium till 24 th August 2008. It has been
stated in the writ petition by the petitioner that on account of
global recession and economic meltdown in 2008, the petitioner
could not make payment of the second installment and
requested respondent No.1 to refund the payment already made
by the petitioner, however, the refund was not made. In the
meantime, respondent No.2 resolved to request the State
Government to relax the provisions of the New Bombay Disposal
Land Regulations, 1975 (hereinafter referred to as the 1975
Regulations) on 14th July 2009 so as to give time extension to
the allottees on account of downfall in the real estate market
and also realizing that because of the downfall in the real estate,
marketing rates of respondent No.1 were not satisfactory since
2008. Said resolution was made on the request made by several
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allottees. Regulation 15 of the 1975 Regulations provides that
respondent No.1 may, with previous approval of the
Government, relax any or all of these regulations in a special
case or cases. Resolution passed by the CIDCO requesting the
State Government to relax the regulations and extend the time
for making deposit of installments by the allottees was approved
by the State Government vide letters dated 4 th March 2010 and
29th March 2010.
7. It is the case set-up by the petitioner that in view of the
request of respondent No.1 to the State Government seeking
approval to relax the regulations permitting extension of time to
make deposit of installments in case of certain other allottees,
the petitioner continued to make applications/prayers to
respondent No.1 for issuing a letter granting extension.
8. Respondent No.1 wrote a letter on 15 th September 2011 to
the State Government requesting them that Regulation 5 read
with Regulation 15 of the 1975 Regulations be invoked for
condoning the delay caused in making the payment of second
installment of lease premium by the petitioner in respect of the
three subject plots. The State Government, thereafter wrote a
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letter to respondent No.1 on 31 st October 2012 calling upon the
respondent No.1 to furnish certain information such as (a) what
were the existing rates of the plots allotted to the petitioner, (b)
what was the rate of interest determined by the CIDCO for
extension of time, (c) whether the current sale price of the plots
was more than the sale price plus interest, (d) what is the effect
of not depositing the second installment within the prescribed
time as per Rules and (e) whether the said allotment cannot be
automatically cancelled ? The letter dated 31 st October 2012
also required the CIDCO to furnish information as to in whose
possession the plots were at the relevant time.
9. Respondent No.2 again wrote a letter on 27th May 2015
seeking certain information relating to current market price of
the plots allotted to the petitioner and amount of lease premium
along with the late fee etc. The State Government again wrote a
letter on 26th September 2016 requiring the Corporation to
submit a detailed report to the Government after verifying as to
what would serve the financial benefit to the CIDCO. Thereafter
respondent No.2 submitted a brief note through its letter dated
1st August 2017 stating therein, inter alia; that during the
recession period the Corporation had considered the request
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made by many other allottees and vide resolution dated 14 th July
2009 had urged the State Government to condone the delay
beyond maximum permissible time prescribed in Regulation 5 of
the 1975 Regulations, whereupon the State Government had
approved the decision of the Board of CIDCO vide letters dated
4th March 2010 and 29th March 2010. The brief note submitted
through letter dated 1st August 2017 by CIDCO also stated that
the petitioner had withdrawn its earlier decision of surrendering
the subject plots and requested the Corporation to grant
extension of time for making the payment of the second
installment for all the three subject plots without charging any
interest or at a discounted rate of interest for the extendable
time period. The note further stated that the said request was
made by the petitioner on account of the then prevailing
recession. Brief note mentions various correspondences made
by the State Government with the Corporation and accordingly,
submitted necessary information.
10. The brief note submitted by respondent No.1 through the
letter dated 1st August 2017 to the State Government also noted
that in case regularization of the subject plots by charging
delayed payment charges is made, the Corporation can earn a
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total revenue of Rs.66,42,76,927/- and further that the rate of
recovery will be more than the rate per square metre received
by the Corporation in the recent scheme. The note also stated
that in case the Corporation prefers to cancel the allotment of
subject plot by way of forfeiture of 25% of the balance lease
premium and thereafter re-tender the plots, there is no
guarantee that the Corporation may receive such rates, due to
ongoing recession. In the light of the said observations, the
Corporation, vide its brief note appended to the letter dated 1 st
August 2017 proposed to regularize the allotment of subject
plots by condoning the delay beyond the maximum time as
prescribed in Regulation 5 of the 1975 Regulations by charging
the delayed payment charges as per the terms and conditions of
the allotment letter and as per the calculation details submitted
to the Government. The relevant extract of the brief note
appended by the CIDCO along with its letter dated 1 st August
2017 addressed to the State Government is quoted hereinbelow:
"2. Whereas, the details provided to the State Govt., vide our
above referred letter dated 18.05.2016 & 14.10.2016 in respect of the
total amount including the Delay Payment Charges that has accrued
for the period from the stipulated date of payment of the 2 nd
installment i.e. from 25.02.2008, up to 31.10.2016 for the subject 03
plots is as follows:
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TABLE -
Sr. Plot Sector Area in Total Lease DPC Amount Total Amount Rate /m²
No. No. m² Premium in Rs. incl. DPC incl. DPC
in Rs. up to in Rs. in Rs.
31.10.2016
1 6 8 1790.28 14,08,56,724/- 9,19,89,629/- 23,28,46,353/- 1,30,061/-
2 7 8 1788.80 14,07,40,280/- 9,19,18,879/- 23,26,59,159/- 1,30,064/-
3 23 7 1459.65 12,03,63,761/- 7,84,07,654/- 19,87,71,415/- 1,36,177/-
TOTAL AMOUNT Rs. 40,19,60,765/- 26,23,16,162/- 66,42,76,927/-
As can be seen in TABLE-B above, in consideration of the total amount
receivable to CIDCO including the Delay Payment Charges, the rate
per m² for these 03 plots varies from Rs.1,60,061/- per m² to
Rs.1,36,177/- per m².
Whereas, as can be seen in TABLE-A above, the rates received fro the
06 R+C plots in the recently launched scheme varies from
Rs.91,006/- per m² to Rs.1,31,031/- per m².
3. It is pertinent to state that, in case of regularization of the
subject allotments of 03 plots by charging the Delay Payment
Charges, the Corporation can earn a total revenue of
Rs.66,42,76,927/-. Further, the rate of recovery as can be seen in
TABLE-B above will be more than the rate per m² received by the
Corporation in the recent scheme mentioned in Sr.No.1 above.
4. Whereas, in case, the Corporation prefers to cancel the subject
allotment by way of forfeiture of 25% of the balance lease premium of
all the 03 plots and thereby retender the plots, there is no guarantee,
that the Corporation may receive such rates, due to the ongoing
recession.
Proposal:
In light of the above facts, it is proposed to regularize the allotment of
the subject 03 plots to condone the delay beyond the maximum
permissible extendable time period as prescribed in Chapter-IV,
Regulation-5 of the then prevailing regulation i.e. as per NBDLR-1975
by charging the Delay Payment Charges (DPC) as per the terms &
Conditions of the Allotment Letter and as per the calculation details
submitted to the State Govt., vide our above referred letter dated
18.05.2016 & 14.10.2016."
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11. The matter was thereafter considered by the State
Government and the State Government communicated its
decision to CIDCO vide its letter dated 1 st August 2018 stating
therein that, "in the present matter you are hereby informed to
take steps as per the option suggested by the CIDCO, which
would be financially beneficial to the CIDCO." The letter dated
1st August 2018 is on record at page 97 to 102.
12. The notings and the decision appended with the said letter
dated 1st August 2018 reveals that it was noticed by the State
Government, inter alia; that if the allotment of subject plots is
cancelled and recourse to re-tender was taken then there was no
possibility of getting additional rates in the present economic
recession situation and that the CIDCO was likely to suffer
financial loss during re-tender process. The relevant extract of
the notings and the decision as appended with the letter dated
1st August 2018 addressed by the State Government to CIDCO is
extracted hereinbelow:
"08. Considering the aforesaid facts, it becomes clear that pursuant
to the directions given by the Principal Secretary (U.D.1) on Page
No.22 of the Noting Subject, the CIDCO has given below-mentioned
opinion:-
A) The amount of remaining installments towards 3 plots situated
at Sector 7 and 8 at Ghansoli, allotted to M/s.Trishul Construction
Company has not been paid within the prescribed time period and
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therefore, if the allotment of the aforesaid plots is cancelled and if the
re-tender process is implemented then, as there is no possibility of
getting additional rates in the present economic recession situation,
the CIDCO is likely to suffer financial loss in the re-tender process.
B) Therefore, instead of implementing re-tender process for the
aforesaid plots, if the excess period after the additional time period
determined for paying remaining installments in respect of the plots
as per Regulation No.5 of Appendix 4 of the New Bombay Disposal of
Lands Regulation, 1975, is condoned and if the lease premium
amount of the plot together with late fee (Up to the date 31.10.2016)
is recovered as and by way of second installment towards the said
plots, then, the CIDCO would get financial benefit. (As shown in
Statement-B).
Hence, in view of the aforesaid opinion given by CIDCO, the proposal
to implement re-tender process as mentioned in Point No.(A) or to
inform the CIDCO to take steps as mentioned in Point No.(B), in the
matter of the aforesaid plots, is submitted for appropriate order.
(Signature illegible)
23.01.2018
D.O./(Shree Thorve)
CM Secretariat - File No.1527 dated 12.03.2017
Presented by JS/DS : Shri
Seen by Sec. : Shri
Finally seen by Pr.Sec : Shri
(Signature illegible)
12.03.
(Illegible)
It is proposed to instruct the CIDCO to
implement accordingly, the very
option, which the CIDCO has informed
that it is financially beneficial for it.
(Signature illegible)
A.S. (Shri Khatkale) (Signature Illegible)
(25.01.2018)
D.S. (Shri Yadav) (Signature Illegible)
(27.01.2018)
A.C.S. (U.D.-1)
Hon'ble Chief Minister
(Signature Illegible)
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P.S. (U.D./15)
(Signature Illegible)
DS15
UD/10
(Signature Illegible)
05.04.2018
(Signature Illegible)
05.04.2018
// True Copy //
----
Photocopies of the documents in the
matter made available under the
Right to Information Act.
----xxxxx----xxxxx----"
13. Thus, it is the case set up by the petitioner that the
proposal made by CIDCO that if the lease premium amount of
plots is recovered by way of realising the second installment
after condoning the additional period for paying remaining
installment as per regulation 5 of 1975 Regulations and late fee
is also recovered, then the CIDCO would get financial benefit.
According to the petitioner, the only option left with the CIDCO
was to condone the delay and accept the second installment of
the lease premium along with the applicable late fee.
14. We may note that the relevant portion of the noting and
the decision of the State appended with the letter of the State
Government, dated 1st August 2018 has been extracted from the
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official translation of the said document furnished by the Official
Translator of the High Court, a copy of which was also provided
to the parties.
15. The writ petition was, thus, filed initially with a prayer to
issue direction to CIDCO to issue necessary demand letter with
respect of second installment of the lease premium of the
subject plots however, during pendency of the instant petition,
CIDCO took a decision to cancel the allotment which was
communicated to the petitioner by means of letter/order dated
30th January 2024 which is also impugned in the writ petition. It
is in these background facts that the instant writ petition has
been filed with a prayer to quash the decision of the CIDCO as
embodied in its communication dated 30 th January 2024
cancelling the allotment of subject plots and also for issuing
direction to CIDCO for issuing the demand letter for making
deposit of the second installment along with the late fee etc. and
thus, to regularize the allotment of the subject plots.
(C) Submission on behalf of the petitioner :
16. It has been argued by Mr.Navroj Seervai, learned Senior
Advocate espousing the cause of the petitioner that the
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impugned decision of respondent No.1 cancelling the allotment
of the subject plots is contrary to the directives contained in the
letter of the State Government dated 1st August 2018, whereby
the State Government had not only accepted the proposal
submitted by the CIDCO but has also directed the CIDCO to act
accordingly. He has stated that thus, the cancellation of
allotment of subject plots by respondent No.1 was impermissible
in view of the provisions contained in Section 154 of the
Maharashtra Regional and Town Planning Act, 1966 (hereinafter
referred to as the MRTP Act) which according to Mr.Seervai
provides that any directive or instruction issued by the State
Government under Section 154 of the MRTP Act are not only
binding on the planning/development authority but it is the duty
of such authorities to carry out such direction or instruction
within the time limit, specified in such directions or instructions.
(D) Submission on behalf of respondent No.1 - CIDCO:
17. The prayers made in the writ petition have been
vehemently opposed by Mr.Janak Dwarkadas, learned Senior
Advocate representing respondent No.1- CIDCO, who has
contended that prior to the formal decision of cancellation of
subject plots on 30th January 2024, CIDCO had invited fresh
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tenders in September 2018, March 2019 and October 2022,
however, the said process of re-tendering the plots in question
was never challenged by the petitioner in any Court of law. It is,
thus, his submission that the moment the CIDCO decided to re-
tender the subject plots firstly in September 2008 and thereafter
in March 2011 and October 2022, decision on the letter of the
State Government dated 1st August 2018 was taken by the
CIDCO and accordingly, the said decision of the State
Government was acted upon by the Corporation and hence, now
at this juncture, it is not open to the petitioner to challenge the
order cancelling the allotment.
18. Mr.Janak Dwarkadas has also argued that from the facts
and circumstances of the case, it is clear that the
communication/letter dated 1st August 2018 has been issued by
the State Government in exercise of its powers under regulation
15 of the 1975 Regulations and thus, it is not a "directive" under
Section 154 of the MRTP Act and it is so also for the reason that
the petitioner, in its letter dated 1 st November 2024 addressed to
the CIDCO has referred to the letter of the State Government as
an "order" and not as a "directive". According to Mr. Dwarkadas,
thus, the communication dated 1st August 2018 made by the
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State Government to the CIDCO cannot be termed as a
"directive" within its meaning under Section 154 of the MRTP Act
and hence, the alleged non-compliance with the alleged directive
contained in communication dated 1 st August 2018 cannot be
pleaded as a ground to challenge the impugned cancellation of
the allotment orders in respect of the subject plots.
19. Another submission made on behalf of respondent No.1
CIDCO is that the CIDCO, till date, has not informed or assured
the petitioner that despite non payment of second installment,
and its continuing defaults, the allotments made in the year
2007 shall be regularized. It has also been contended on behalf
of respondent No.2 that the Board of CIDCO resolved on 4 th
January 2024 that the financially beneficial option for CIDCO was
to cancel the petitioner's allotment by forfeiting the earnest
money deposit and 25% of the paid lease premium and
thereafter re-tender the plots.
20. In sum and substance, the petition has been opposed on
behalf of respondent No.1 on the basic premise that the
communication made by the State Government to CIDCO on 1 st
August 2018 is not a "directive" in terms of the provision
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contained in Section 154 of the MRTP Act; rather it is referable
to regulation 15 of the 1975 Regulations. Another noticeable
submission made by Mr. Dwarkadas is that vide communication
dated 1st August 2018, the Urban Development Department of
the State Government responded to CIDCO informing it to
choose the alternative which is financially beneficial to CIDCO
and accordingly, Board of CIDCO took a decision in its meeting
held on 4th January 2024 to cancel the allotment of subject plots
made in favour of the petitioner by forfeiting the earnest money
deposit and 25% of the paid lease premium which was found to
be financially beneficial option for the Corporation and
accordingly, the decision to cancel the allotment of re-tender the
subject plots by CIDCO is in tune with what has been observed
by the State in its communication dated 1st August 2018.
21. Further submission on behalf of the CIDCO is that the
subject plots were allotted through tender process in the year
2007 and now because of lapse of such a long period if the lease
rights in respect of the subject plots are settled with the
petitioner on the old rates offered by it, the same would not be
in public interest for the reason that it will result in heavy loss to
the CIDCO on account of escalating price in the real estate
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market. According to Mr.Janak Dwarkadas, the Board of
Directors of the CIDCO decided to cancel the allotment in its
meeting held on 4th January 2024 considering various aspects
including the fact that if the delayed payment charges per
square metre are calculated upto 31st October 2023 the valuation
of Plot No.23, Sector 7 will be 1,73,575/- per sq. metre,
valuation of Plot No.6, Sector 8 shall be 1,65,965/- per sq.
metre and that of Plot No.7, Sector 8 would be 1,65,972/- per
sq. metre, whereas, market price received by CIDCO for Plot
No.16, Sector 8, which is opposite to Plot No.23, Sector 7 was
Rs.3,63,636/- per sq. metre, in recent past and since Plot Nos.6
and 7 in Sector 8 are at 50 mtr. wide road, the said plots are
likely to fetch the average rate of Rs.3,12,776/- per sq. metre
which was the price received in recent past in respect of the
plots situated at 50 mtr. wide road in Ghansoli.
22. According to Mr.Janak Dwarkadas, it is, thus, clear that the
rate per square metre along with the delayed payment charges
for subject plots is much less than the current market price. He
has cited an order dated 29 th April 2004 passed by a Division
Bench of this Court in Mahalaxmi Mahila Sahakari Grahak
Sanstha Maryadith Vs. The State of Maharashtra & Ors in
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writ petition (L) No.115 of 2004. The order dated 24 th July 2024
passed by this Court in writ petition No.728 of 2011 in the case
of Discovery Properties & Hotels Pvt. Ltd. Vs. Ministry of
Urban Development has also been cited by Mr.Janak
Dwarkadas, wherein the Court considered the difference of
amount in the past rate and the offer made by the applicant in
the year 2007 and refused to grant stay on the process of e-
auction by observing that the award of contract, whether it is by
a private party or by a public body or the Sate, is essentially a
commercial transaction, and in arriving at a decision, commercial
considerations are paramount.
(E) Arguments made by Mr. Seervai in rejoinder:
23. Refuting the submission made on behalf of Mr.Janak
Dwarkadas on behalf of the CIDCO, Mr. Seervai, representing
the petitioner has argued that the communication dated 1st
August 2018 is referable only to Section 154 of the MRTP Act
and a plain reading of the language occurring in Section 154
makes clear that it is mandatory for any planning/development
authority to comply with the directions issued by the State and
in the present case the direction contained in letter dated 1 st
August 2018 by the State Government has been clearly defied,
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as such the impugned action on the part of the respondent in
cancelling the allotment of subject plots is illegal being in clear
violation of mandate contained in Section 154 of the MRTP Act.
He has also submitted that so far as the submission made by Mr.
Janak Dwarkadas that the communication dated 1st August 2018
is referable to regulation 15 of the 1975 Regulations is
concerned, the said provision permits the Corporation with
previous approval of the Government to relax any or all the
regulations in a special case or cases and since the proposal
submitted by the CIDCO was approved by the State Government
by its communication dated 1 st August 2008, whereby CIDCO
was instructed to act in accordance with the proposal submitted
by it before the State Government, hence, the said submission is
of no avail to CIDCO to defend the impugned decision whereby
the allotment of the subject plot has been cancelled. He has
also stated that regulation 5 of the 1975 Regulations permits the
Managing Director of CIDCO to extend the period for depositing
the installments, on payment of interest, by the intending lessee
at the rate to be approved by the Corporation by a general or
specific order, however, period of payment of both installments
from time to time shall not exceed 12 months in all and
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accordingly, the communication contained in the letter dated 1 st
August 2018 cannot be said to be referable to regulation 5 read
with regulation 15 of the 1975 Regulations.
24. As regards the submission made on behalf of the CIDCO
that if the petitioner is permitted to deposit the second
installment along with delayed payment charges and
condonation of delay, the same may result in financial loss to
CIDCO, Mr. Seervai has vehemently argued that when a contract
is to be evaluated, the mere possibility of more money in the
public coffers, does not in itself serve public interest and further
that the blanket claim by any public authority claiming loss of
public money cannot be used to forgo contractual obligations,
especially when it is not based on any evidence or examination.
He, thus, submits that the Courts need to have proper
understanding of public interest keeping in view the fact that
larger public interest of upholding contracts and fairness of
public authorities is also relevant consideration. In this regard
he has placed heavy reliance on Vice Chairman & Managing
Director, City and Industrial Development Corporation of
Maharashtra Ltd. & Anr. Vs. Shishir Realty Pvt. Ltd. &
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Ors.1. He has also placed reliance on an order passed by the
Hon'ble Supreme Court in Discovery Properties & Hotels Pvt.
Ltd. Vs. The Ministry of Urban Development & Ors.2
25. Mr. Seervai has also relied upon the Division Bench
judgment of this Court in Trimbak Joma Thakur (since
deceased) through his LR and heirs Dashrath Trimbak
Thakur & Ors. Vs. Principal Secretary, Urban Development
Department &Ors.3, Sea Kunal Corporation Pvt. Ltd. Vs.
Municipal Corporation and Ors. 4, Nishant Karsan Bhagat
Vs. City and Industrial Development Corporation of
Maharashtra Ltd. & Ors.5, to emphasis that any directive
issued by the State Government under Section 154 of the MRTP
Act is binding on the planning/development authority, which has
to be necessarily carried out by such authority and that there is
no escape available to the planning/development authority from
such directive.
(F) Issues:
26. On the basis of the facts and circumstances which can be
1 2021 SCC OnLine SC 1141
August 2022
3 2022(4) Mh.L.J. 457
4 2019 SCC OnLine Bom 349
5 2022 SCC OnLine Bom 1758
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culled out from the pleadings of the respective parties available
on record and the submissions made by the learned Counsel
representing the respective parties, the following issues emerge
for our consideration and decision:
(a) Whether the communication dated 1st August 2018
made by the State Government to respondent No.1 is
binding upon respondent No.1 being referable to Section
154 of the MRTP Act ?
(b) As to whether there exists any dispute between the
State Government and respondent No.1 in respect of the
communication made by the State Government dated 1st
August 2018 which requires final decision to be taken by
the State Government in terms of the provisions contained
in Section 154(2) of the MRTP Act ?
(G) Discussion:
27. The fate of this petition hinges around the purport and
meaning of the communication dated 1 st August 2018 made by
the State Government to respondent No.1 - CIDCO. We have
considered the different views expressed by the learned Counsel
for the petitioner and the learned Counsel representing
respondent No.1 - CIDCO in respect of the said communication.
As already noticed above, learned Counsel for the petitioner has
emphasized that the communication dated 1 st August 2018 is a
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directive issued by the State Government to CIDCO under
Section 154 of the MRTP Act and hence, it is binding, whereas it
has been argued by learned Counsel representing respondent
No.1 that the said communication is not a directive in terms of
the provision contained in Section 154; rather it is a
communication which is referable to regulation 5 and regulation
15 of the 1975 Regulations.
28. For appropriately appreciating the aforesaid rival
contentions, we need to quote section 154 of the MRTP Act
which reads as under:
154. Control by State Government.
(1) Notwithstanding anything contained in this Act or the rules or
regulations made thereunder, the State Government may, for
implementing or bringing into effect the Central or the State
Government programmes, policies or projects or for the efficient
administration of this Act or in the larger public interest, issue, from
time to time, such directions or instructions as may be necessary, to
any Regional Board, Planning Authority or Development Authority and
it shall be the duty of such authorities to carry out such directions or
instructions within the time-limit, if any, specified in such directions or
instructions.
(2) If in, or in connection with, the exercise of its powers and
discharge of its functions by any Regional Board, Planning Authority or
Development Authority under this Act, any dispute arises between the
Regional Board, Planning Authority or Development Authority, and the
State Government, the decision of the State Government on such
dispute shall be final.
We also need to extract regulation 5 and regulation 15 of
the 1975 Regulations, which are as under:
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Clause 5 of New Bombay Disposal of Lands Regulations reads
as follows:
Payment of premium:
(1) The premium agreed to be paid by the Intending Lessee
shall be paid in two equal instalments: the first
instalment shall be paid within the month from the
receipt of acceptance by the Corporation of this proposal
and the second instalment shall be paid within two
months from such receipt of acceptance.
(2) The Managing Director may in a deserving case, extend
either of the foregoing periods on the payment of interest
by the Intending Lessee at the rate to be approved by
the Corporation by a general or specific order:
Provided that the period of payment of both instalments
of the premium shall not exceed twelve months in all:
Provided further that the period for the payment of the
first instalment shall not exceed three months:
Provided further that if there shall be default by the
Intending Lessee in the payment of first instalment of the
premium, the agreement concluded between the
Corporation and the Intending Lessee shall stand
determined and the earnest money deposited by the
Intending Lessee shall stand forfeited to the Corporation
without prejudice to the rights of the Corporation to
recover compensation for loss or damage, if any, suffered
in consequence of such default.
15. Relaxation of Regulations: The Corporation may, with the
previous approval of the Government, relax any or all of these
regulations in special case or cases.
29. A perusal of regulation 5 of 1975 Regulations reveals that
the said regulation provides for payment of premium. According
to regulation 5(1) the premium agreed to be paid by the lessee
is to be paid in two installments. The first installment is payable
within a month from the date of receipt of acceptance by the
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Corporation of the proposal and the second installment is to be
paid within two months from such receipt of acceptance. Sub
regulation (2) of regulation 5 permits the Managing Director to
extend the period for payment of installments as provided for in
regulation 5(1) on payment of interest by the intending lessee at
the rate to be approved by the Corporation by a general or
specific order.
30. However, the first proviso appended to regulation (5)(2)
provides that the period of payment of both the installments of
premium shall not exceed 12 months in all. The second proviso
provides that the period of payment of first installment shall not
exceed three months.
31. Regulation 15 permits relaxation of the regulations
according to which the Corporation may, with the previous
approval of the Government, relax any or all the regulations in a
special case or cases.
32. In view of the two provisos appended to regulation 5(2) of
the 1975 Regulations which are quoted above, since the time
period extendable for making the deposit of both installments
cannot exceed 12 months and in this case the said period had
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expired long ago, therefore, operation of regulation 5 of 1975
Regulations in this case is out of question. Accordingly, the
submission made by Mr.Janak Dwarkadas that the
communication made by the State Government to the CIDCO in
its letter dated 1st August 2018 is referable to regulation 5 read
with regulation 15 of 1975 Regulations merits rejection, which is
hereby rejected.
33. We will now proceed to examine as to whether the
communication dated 1st August 2018 made by the State
Government to CIDCO can be termed to be a directive in terms
of Section 154 of the MRTP Act. It is to be noticed that the
communication dated 1st August 2018 was issued by the State
Government on certain correspondence between the CIDCO and
the State Government. The State Government, from time to
time has solicited various relevant information from CIDCO and
ultimately, the CIDCO, vide its letter dated 1st August 2017
submitted a note/proposal to the State Government which
contains only one proposal which has been quoted hereinabove
in paragraph No.10. According to the said proposal, the CIDCO
proposed to regularize the allotment of the subject plots by
condoning delay beyond the maximum permissible extendable
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time period as prescribed by regulation 5 and by charging
delayed payment charges as per the calculation details
submitted to the State Government. The proposal made by the
CIDCO clearly stated that in case of regularization of subject
plots by charging delayed payment charges, the Corporation can
earn certain revenue and the rate of recovery in this manner
shall be more than the rate per square metre, which may have
been received by the Corporation in the recent schemes. The
proposal further states that if the Corporation cancels the
subject allotment and re-tenders the plots, there is no guarantee
that the Corporation may receive such rates due to ongoing
recession.
34. The State Government considered the said proposal and
communicated its decision vide communication dated 1 st August
2018 by clearly deciding to instruct the CIDCO to implement that
very option which the CIDCO had informed that it was financially
beneficial for it. The said fact is revealed by the noting and the
decision enclosed with the communication dated 1 st August 2018
made by the State Government to CIDCO which has already
been extracted above in paragraph No.11. Reading of Mr. Janak
Dwaradas of the said noting to the effect that the noting
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mentions two opinions expressed by the CIDCO and as such
decision of the State Government as contained in communication
dated 1st August 2018 has to be read as giving an option to
CIDCO to accept either of the two options, does not appear to be
correct. The noting mentions two opinions at (A) & (B). The
opinion (A) as mentioned in the noting, mentions about the
opinion of CIDCO expressed in its proposal dated 1 st August
2017 that if allotment of the subject plots is cancelled and if re-
tender process is resorted to, then, there is no possibility of
getting additional rates in the present economic situation and in
such a situation CIDCO is likely to suffer financial loss in the re-
tender process. The opinion (B) as extracted in the noting is
clearly in continuance with opinion (A) which says that,
"therefore instead of implementing re-tender process if excess
period is condoned and if lease premium amount is recovered as
and by way of second installment, then the CIDCO would get
financial benefit.
35. Accordingly, in our opinion the noting does not contain
discussion about two opinions or two proposals submitted by the
CIDCO; rather it is only one proposal and the proposal was to
allow condonation of delay for paying remaining installments
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which was approved by the final authority in the State
Government where it is recorded that "it is proposed to instruct
the CIDCO to implement the very option, which the CIDCO has
informed that it is financially beneficial for it". Such instructions
or directives, in our opinion, can be given by the State
Government in exercise of its powers conferred upon it by
Section 154 of the MRTP Act. The said provision in an
unambiguous terms contains a mandate that any directive issued
by the State Government is not only binding on the
planning/development authority but such directives are to be
carried out by such authorities. There cannot be, thus, any
escape by the authority from the directives which are issued by
the State Government in exercise of its powers vested in it
under Section 154 of the MRTP Act.
36. Even if the communication dated 1 st August 2018 made by
the State Government to respondent No.1 is construed to be
referable to regulation 15 of 1975 Regulations, since the said
regulation permits the Corporation to relax any of the
regulations of 1975 Regulations with approval of the
Government, said communication would be considered to be
approval of the State Government to the proposal of the
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Corporation which was contained in its letter dated 1 st August
2017.
37. In view of the aforesaid discussion, whether the
communication dated 1st August 2018 made by the State
Government to respondent No.1 is to be treated to be a
"directive" under Section 154 or the approval by the State
Government to the proposal of the CIDCO under regulation 15
of the 1975 Regulations, it does not make any difference. To
cancel the allotment of subject plots contrary to the contents of
the communication dated 1st August 2018 made to CIDCO by the
State Government, CIDCO cannot be permitted to take the plea
that the communication dated 1st August 2018 is referable to
regulation 5 read with regulation 15. In any case, any approval
sought by the Corporation and accorded by the State
Government as per the requirement of regulation 15 of the
1975 Regulations will be binding on the Corporation and any
deviation there from will not be permissible by operation of
Section 154 of the MRTP Act.
38. However, having observed as above, we may also note that
the provision contained in Section 154 (2) of the MRTP Act,
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which, though has not been argued on behalf of either of the
parties, however, having regard to the over-all facts and
circumstances of the case, in our opinion, is not only relevant
but necessary to be taken note of. Section 154, in its entirety,
has already been quoted above. Sub Section (2) of Section 154
provides that if in exercise of its powers and discharge of its
functions by the planning/development authority under the MRTP
Act, any dispute arises between the planning/development
authority and the State Government, the decision of the State
Government on such dispute shall be final. From the records
available before us on this petition and also in view of the
discussion made hereinabove in the preceding paragraphs of this
judgment, what we find is that as regards the exact purport of
the decision expressed by the State Government in its
communication dated 1st August 2018, there appears to be
divergent views between the State Government and respondent
No.1. The State Government, along with communication dated
1st August 2018 had enclosed the entire note sheet and the final
decision, where the decision on the proposal of the CIDCO
contained in communication dated 1st August 2017 was taken by
the highest authority concerned of the State Government,
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according to which the CIDCO was instructed to act upon the
proposal which was made to it which was more financially
beneficial to CIDCO.
39. However, the CIDCO, as argued on its behalf, has
construed the said decision to mean that it was open to it to take
decision in its discretion independent of the instructions
contained in the communication dated 1 st August 2018. During
the course of arguments, it was emphasized by Mr.Janak
Dwarkadas that the communication dated 1st August 2018 made
by the State Government to respondent No.1 left the final
decision to be taken by the CIDCO in its interest. From what has
been observed by us above it is a clear case where we find that
as to the true purport of the communication dated 1 st August
2018 made by the State Government to respondent No.1 there
exists divergent views and perspectives. Accordingly, since in
terms of the provisions contained in sub section (2) of Section
154 in a situation of existence of such a dispute arising between
the planning/development authority and the State Government,
the decision of the State Government is final, we find it
appropriate to refer the entire matter to the State Government
to clarify the actual intended purport of the communication made
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by it to respondent No.1 vide letter/communication dated 1 st
August 2018.
40. Since we find it appropriate to refer the matter to State
Government to take decision in view of the dispute between the
State Government and respondent No.1 on the actual purport of
the communication dated 1st August 2018, which shall be final,
we need not advert to the submissions made by the learned
Counsel for the petitioner Mr.Seervai on certain other aspects of
the matter such as non availability of the plea to CIDCO on
account of the alleged expected financial losses in case the
process of re-tender is not resorted to.
(H) Conclusion:
41. In view of the discussions made and the reasons given
above, the writ petition is disposed of in the following terms:
a) State Government will take decision as to the actual
purport of its decision contained in its communication made
to CIDCO, dated 1st August 2018 in exercise of its powers
available to it under Section 154(2) of the MRTP Act.
(b) Decision in terms of this order shall be taken by the
State Government within two months from the date
certified copy of this order is communicated to it.
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(c) The State Government, before taking decision in
terms of this order, shall provide an opportunity of making
representation, both to the petitioner as also to the
respondent No.1.
(d) Operation and implementation of the decision of
respondent No.1 cancelling allotment of subject plots as
communicated vide letter/order dated 30th January 2024
shall be kept in abeyance till decision by the State
Government in terms of this order is taken.
(e) The decision of respondent No.1 communicated by
letter/order dated 30th January 2024 shall, however, be
subject to and abide by the final decision which may be
taken by the State under this order.
(f) Costs made easy.
42. Interim application(s), if any, stands disposed of.
(AMIT BORKAR) (CHIEF JUSTICE)
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