Bombay High Court
Wipro Limited vs Maharashtra Airport Development ... on 19 August, 2025
2025:BHC-OS:13803-DB
Neeta Sawant WP-395-2025-FC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 395 OF 2025
Wipro Limited
A Company registered under the
provisions of the Companies Act, 1956,
having its registered office at Dodda Kannelli,
Sarjapur Road, Bengaluru -- 560 035. ....Petitioner
: Versus :
1. Maharashtra Airport Development
Company Ltd.
A Company registered under the
provisions of the Companies Act, 1956,
having its régistered office at 12" Floor,
World Trade Centre, Cuffe Parade,
Mumbai -- 400 005.
2. State of Maharashtra
through Government Pleader,
High Court, Original Side,
Bombay -- 400 032. ....Respondents
Mr. Rahul Narichania, Senior Advocate with Mr. Shubharata
Chakraborti, Mr. Naozad Golwalla and Mr. Aayush Barat i/b
Mr. Mehernosh Humranwala, for the Petitioner.
Mr. Zulfiq Multani with Mr. Manoj Kumar Mishra, for Respondent
No.1.
Mr. Atul Vanarse, AGP for Respondent No.2-State.
Page No.1 of 53
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CORAM : ALOK ARADHE, CJ. &
SANDEEP V. MARNE, J.
Reserved On : 12 August 2025.
Pronounced On : 19 August 2025.
JUDGMENT :
(Per Sandeep V. Marne, J.)
1) Rule. Rule is made returnable forthwith. With the
consent of learned counsel appearing for rival parties, the petition
is taken for final hearing and disposal.
2) Petitioner has filed the present petition in this Court
challenging the communication dated 27 May 2015 issued by
Maharashtra Airport Development Company Limited cancelling
the Letter of Acceptance (LOA) dated 5 April 2007 and forfeiting
the advance amount of Rs. 10.29 crores.
3) Petitioner-Wipro Limited (Wipro) is a global
technology services provider and consulting company. With a
view to remove the regional disparity in the State of Maharashtra,
the State Government decided to develop a composite project
named Multi Modal International Passenger and Cargo Hub
Airport at Nagpur (MIHAN). The aim of the project was to
develop the existing domestic airport at Nagpur into an
international passenger and cargo hub airport along with a Special
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Economic Zone (SEZ) adjoining the boundary of the airport.
Accordingly, the State Government constituted Maharashtra
Airport Development Company Limited (MADC) for the purpose
of planning, constructing, operating, developing and maintaining
aviation infrastructure in the State of Maharashtra. Respondent
No. 1 is declared as a Special Planning Authority for the notified
area under the provisions of Maharashtra Regional and Town
Planning Act, 1966. MIHAN is the flagship project of Respondent
No. 1, which is undertaken under the provisions of SEZ Act, 2005
and SEZ Rules, 2006. For implementing MIHAN project,
Respondent No. 1 decided to acquire large tract of land near
Nagpur Airport and after developing the same, allotment of such
developed land was planned for setting up inter alia industries.
4) The MIHAN project is proposed to be established in an
area of 3,588 Hectares, out of which area admeasuring 1,100
Hectares has been earmarked as a SEZ. As a part of MIHAN
project, Respondent No. 1 proposed establishment of State of the
Art Multi-tenanted Software Technology Park/Information
Technology Park in the SEZ area and designated land
admeasuring 500 acres for the same. MADC accordingly decided
to involve India's leading software companies such as Wipro,
TATA Consultancy Services, Infosys etc. for establishment of their
offices under the MIHAN project. Accordingly, Wipro was
approached by MADC vide letter dated 20 October 2004 offering
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land at concessional rate. After Wipro showed interest in the
MIHAN project, a commercial presentation was made by MADC
to Wipro offering land area of approximately 100 acres for
establishment of IT park at the lease rent of Rs.40/- lakh per acre.
After Wipro showed willingness to accept the allotment of land,
MADC earmarked a plot of land admeasuring 107.42 acres and
communicated to Wipro that out of 160.42 acres of land, land
admeasuring 30.24 acres was covered by Zudpi region and land
admeasuring 13 acres was under water channels, leaving about
117 Acres of land for the purpose of development of IT park by
Wipro. Accordingly, Letter of Acceptance dated 5 April 2007 was
issued by MADC to Wipro in respect of land admeasuring 117
acres at the price of Rs.44 lakh per acre on lease basis for the
period of 99 years. The consideration was agreed at Rs.51.48 crores
out of which 20% of the consideration of Rs.10,29,60,000/- was to
be paid in advance and remaining 80% was to be paid at the time
of handing over possession of the land. Accordingly, Wipro paid
20% advance amount of Rs.10,29,60,000/- to MADC on
24 April 2007. Petitioner started paying establishment and
administrative costs every month of Rs.9,103/- to MADC and paid
an amount of Rs.5,26,500/- over the period of time.
5) It is Petitioner's case that the cost estimated for
development of IT Park on the allotted land was to the tune of
Rs.60 crores. Petitioner contends that there was lack of necessary
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facilities such as approach roads, water supply, telecommunication
network, power supply layout, transportation and efficient and
reliable air connectivity on account of which, Petitioner was not
willing to go ahead with development of the project on the allotted
land. According to the Petitioner, the necessary infrastructural
facilities at MIHAN project were not established as promised.
Petitioner further contends that the allotment was accepted by it
under a bonafide and valid assumption that MADC would provide
the requisite and basic infrastructure for development of the
project. After waiting for some time, Petitioner wrote to MADC to
limit allotment of land to 23 acres proposing to commence
operations within 36-48 months. On 22 February 2013, MADC
responded agreeing to the request to limit the allotment of land to
23 acres, on condition of commencement of operations within 24
months. MADC, thereafter, sent letter dated 3 December 2014,
threatening to terminate LOA and forfeit the part payment. By
letter dated 12 December 2014, Petitioner pointed out absence of
infrastructure for development of the project. On 27 May 2015,
MADC terminated the LOA and forfeited the amount of Rs.10.29
crores paid by the Petitioner.
6) According to the Petitioner, even after termination
letter dated 27 May 2015, MADC once again approached the
Petitioner with an offer for allotment of land admeasuring 23.40
acres. The Petitioner expressed interest in seeking allotment of the
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land vide letter dated 7 February 2018 and made enquiries.
According to the Petitioner, the dispute remained under
discussions and correspondence, without yielding any positive
result. On 13 September 2024, Petitioner addressed notice to
MADC alleging wrongful termination of LOA and seeking refund
of the amount paid alongwith interest. Petitioner sent one more
notice dated 8 November 2024. On 8 November 2024, MADC
refuted the claim of the Petitioner. In the above factual
background, the present petition is filed by Wipro, challenging the
communication dated 27 May 2015 and seeking refund of the part
payment made, alongwith the interest.
7) Mr. Narichania, the learned Senior Advocate appearing
for the Petitioner, would submit that the MADC has erroneously
forfeited the amount of part payment made by the Petitioner for
allotment of land. That allotment of land could not be accepted by
the Petitioner on account of lack of basic infrastructural facilities.
That the amount of Rs.10.29 crores is not paid towards earnest
money deposit, and the impugned communication itself accepts
that the same is paid towards part consideration. That since the
allotment of land has not taken place, Respondent has no
authority in law to illegally retain the consideration amount. That
the LOA does not contain any stipulation for forfeiture of the part
consideration paid by the Petitioner. That in absence of any
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forfeiture clause, Petitioner is entitled for refund of the part
consideration.
8) So far as the aspect of delay in filing the petition is
concerned, Mr. Narichania would submit that MADC approached
the Petitioner with an offer for allotment of smaller portion of land
and therefore the Petitioner could not approach this Court
immediately after issuance of the impugned communication. That
MADC was contemplating allotment of smaller piece of land and
adjusting the amount already paid by the Petitioner. That the
matter remained under discussion for a long time and the
Petitioner decided to adopt legal remedies only after realizing that
execution of the project is not viable even on smaller piece of land.
That the Petitioner decided to adopt legal remedies after realizing
that MADC was whiling away time by sitting on part payment
received from the Petitioner. That therefore there is no delay or
laches in filing the present petition. That in any case, Respondent
No. 1, being an Instrumentality of State, cannot be permitted to act
arbitrarily or indulging in unjust enrichment. That Respondent
No. 1 has illegally retained the consideration paid by the
Petitioner, even though no allotment of land has actually taken
place. That there is no question of delay, as MADC never had the
entire land admeasuring 117 acres for allotment to the Petitioner.
That Affidavit-in-Reply indicates that the land admeasuring only
33.52 acres has been allotted by MADC to other entities.That
MADC has received far better rates than the one at which the land was
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offered to the Petitioner. That cancellation of allotment in favour of
the Petitioner is to advantage of MADC, who has secured better
price for the land. That since MADC has not suffered any
prejudice, the part payment made by the Petitioner is required to
be refunded. In support of his contention that mere delay cannot
be a ground for dismissal of writ petition, reliance is placed on
Constitution Bench judgment of the Apex Court in Ramchandra
Shankar, Deodhar and others Versus. State of Maharashtra and others 1.
In support of the contention that even contractual disputes with
State authorities can be adjudicated in writ jurisdiction, reliance is
placed on judgment of the Apex Court in Unitech Limited and
Others Versus. Telangana State Industrial Infrastructure Corporation
(TSIIC) and Others2 In support of the contention that the amount of
consideration cannot be forfeited in absence of forfeiture clause,
reliance is placed on judgment of the Apex Court in Suresh Kumar
Wadhwa Versus. State of Madhya Pradesh and Others 3. He has also
relied on order passed by the Apex Court in M/S. Utkal Highways
Engineers and Contractors Versus. Chief General Manager and others4,
in support of the contention that writ jurisdiction can be invoked
for recovery of admitted amount. Mr. Narichania would
accordingly pray for setting aside the impugned decision and for
refund of consideration of Rs.10.29 crores along with interest.
Alternatively, he would submit that Petitioner is willing to accept
(1974) 1 SCC 317
(2021) 16 SCC 35.
(2017) 16 SCC 757
SLP (C) No.14350 of 2022 decided on 8 January 2025.
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the principal amount of Rs.10.29 crores in the event this Court is
not inclined to award interest in favour of the Petitioner.
9) The petition is opposed by Mr. Multani, the learned
counsel appearing for Respondent No.1. He would submit that the
petition suffers from gross delay and laches and is liable to be
dismissed on this ground alone. That a time barred claim is sought
to be agitated by filing the present writ petition, which is
impermissible in law. He would rely on judgment of the Apex
Court in S.S. Balu and Others Versus. State of Kerala and Others 5. He
would press into service the doctrine of acquiescence in support of
his contention that Petitioner has acquiesced in forfeiture of
earnest money deposit (EMD) of Rs.10.29 crore. He would submit
that Petitioner has committed breach of terms and conditions of
the LOA and that the EMD has rightly been forfeited. He would
submit that the amount of Rs.10.29 crores paid by the Petitioner is
towards earnest money deposit. In support, he would place
reliance on the judgment of the Apex Court in Videocon Properties
Ltd Versus. Dr. Bhalchandra Laboratories and others6. He would
further submit that Petitioner sat over the allotment of land for
over 8 years and failed to make balance payment of consideration.
That such an act has adversely affected MIHAN project. He would
also rely upon judgment of Single Judge of Delhi High Court in
State Bank of India Versus. Union of India and others 7 in support of his
(2009) 2 SCC 479
(2004) 3 SCC 711
2013 SCC OnLine Del 1456
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contention that EMD once paid continues to remain the property
of recipient in view of forfeiture clause. Mr. Multani would
particularly draw our attention to the email dated 2 April 2007,
under which the 20% amount was agreed to be forfeited in the
event of nonpayment of 80% balance consideration within a
period of 30 days. He would therefore submit that Petitioner had
agreed for forfeiture of 20% advance payment which is a reason
why it never requested for a refund of the same for over 9 long
years and acquiesced in its forfeiture. He would place reliance on
draft Multi-modal International Hub Airport at Nagpur (Disposal
of Land) Regulations, 2014, providing for compulsory payment of
EMD for allotment of plots.
10) Mr. Multani would further submit that MADC was
always ready and willing to handover possession of entire land
admeasuring 117 acres, and it was the Petitioner who did not
show interest in taking over possession of land. He would take us
through the entire correspondence between the parties to
demonstrate as to how multiple opportunities were granted to the
Petitioner for making payment of balance consideration. He would
submit that even request of the Petitioner for allotment of smaller
portion of land was accepted by MADC but the Petitioner
ultimately did not pay consideration even in respect of smaller
plot of land. He would submit that MADC has suffered huge
losses and public interest has suffered as MIHAN project is being
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set up by the State Government in public interest. That the
conduct of the Petitioner prevented MADC from allotting the land
to other entities. That so far MADC has been able to allot only
smaller portion of land to three entities and Petitioner is solely
responsible for MADC's inability to allot the land to other entities.
Mr. Multani would accordingly pray for dismissal of the petition.
11) We have also heard Mr. Vanarse, the learned AGP
appearing for Respondent No.2-State.
12) Rival contentions of the parties now fall for our
consideration.
13) The dispute involved in the present petition is with
regard to the allotment of vast tract of land admeasuring 117 acres
in MIHAN SEZ project, which is being implemented by MADC.
Petitioner was allotted the said land for development of IT park
vide Letter of Acceptance dated 5 April 2007. The allotment has
been cancelled vide impugned communication dated 27 May 2015.
Petitioner is no longer interested in the allotment of land and has
accordingly not made any prayer in the petition seeking allotment
of the land in its name. Petitioner is thus not aggrieved by the
action of MADC in cancelling the allotment. However, the
impugned communication also directs forfeiture of advance
amount of Rs.10.29 crores paid by the Petitioner to MADC for the
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said allotment. Petitioner is aggrieved by forfeiture of the said
amount by the MADC, which is the only grievance raised in the
present petition. Therefore, the only issue that arises for
consideration is whether forfeiture of advance of Rs.10.29 crores
by MADC is valid, and whether Petitioner is entitled for refund of
the same ?
14) The first objection raised by MADC to the
maintainability of the present petition is delay and laches on the
part of the Petitioner in challenging the impugned communication
dated 27 May 2015. Petitioner has challenged the impugned
communication after about 9 long years by filing the present
petition on 24 January 2025. According to MADC, the decision of
forfeiture of advance payment has attained finality on account of
non-raising of challenge thereto by the Petitioner for a period of
over 9 long years. It is contended that if Petitioner was to file a suit
seeking refund of the amount of Rs.10.29 crores, the same would
be barred by limitation. It is therefore contended that if Petitioner's
remedy of suit is barred by limitation, it cannot be permitted to
invoke the writ jurisdiction under Article 226 of the Constitution
of India for seeking refund of the forfeited amount. In short, it is
contended that the relief which is not grantable in a suit cannot be
sought by filing a Writ Petition under Article 226 of the
Constitution of India.
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15) On the other hand, it is contended by the Petitioner
that the decision of cancellation of allotment of land, as well as
forfeiture of advance amount, did not attain finality as both the
issues were under consideration before MADC. Reliance is placed
by the Petitioner on letter dated 17 November 2017 issued by
MADC to the Petitioner once again offering part of the land. It is
Petitioner's contention that the letter dated 17 November 2017
constitutes withdrawal of the forfeiture decision dated
27 May 2015.
16) It appears that after cancellation of the allotment and
forfeiture of advance amount vide letter dated 27 May 2015,
MADC made a voluntary approach to the Petitioner vide letter
dated 17 November 2017 making inquiries as to the plans for
development of 23.40 acres land. The letter dated
17 November 2017 reads thus :-
No. 5779/MIHAN/______/2017 Date : 17/11/2017
To,
M/s. Wipro Technologies,
Dodda Kannelli,
Sarjapur Road,
Banglore-560 035.
Sub: - Development of Plot in Sector 12 of about 23.40 acres in
MIHAN SEZ area.
Sir,
This has reference to your application for allotment of plot in
MIHAN SEZ area.
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Based on your application and subsequent scrutiny, we have
allotted you above plot vide our letter No.
MADC/MIHAN/MM/40 did 5 April 2007.
Further as indicated in our allotment letter, the subject plot was
allotted for development of IT(Software Development)Unit and
the allotment was governed by the Land Disposal Regulations
(LDR)& Policy of MIHAN. The same LDR policy also indicates a
time limit for development of the plot. However, as of now we
have not heard from you about your plan for development of
the subject plot.
In view of this, we now request you to kindly let us know the
schedule of development for the subject parcel of land
immediately.
We would also like to interact with you to understand the issues
and to explore whether we can extend any support for the
proposed project. In view of this we request you to kindly get in
touch with our office, so as to schedule a meeting with our VC &
MD at the earliest.
We now await for your response at the earliest.
Thanking you,
For Maharashtra Airport Development Company Ltd.
Sd/-
Advisor (Tech)
17) It appears that after issuance of impugned
communication dated 27 May 2015 cancelling allotment of land
and forfeiting the advance amount of Rs.10.29 crores, Petitioner
did not approach MADC for allotment of land nor made any
enquires with the MADC. MADC, on its own, wrote to the
Petitioner on 17 November 2017, referring to the Letter of
Allotment dated 5 April 2007, and inquired with the Petitioner
about the time frame within which it could develop a plot in
Sector 12 of about 23.40 acres in MIHAN SEZ area. The letter
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dated 17 November 2017 accused Wipro of not intimating its plans
for development of the subject plot (plot admeasuring 23.40 acres
as referred in the subject letter). MADC offered to interact with
Wipro to understand the issues and to explore the possibility of
providing support for the proposed project. Wipro was invited for
a meeting with Vice Chairman and Managing Director of MADC,
who had issued the impugned cancellation and forfeiture letter
dated 27 May 2015.
18) The question that arises is if the allotment was already
cancelled and advance amount was forfeited, what was the
occasion for MADC to make inquiries about time frame within
which the plot would be developed. Petitioner therefore is correct
in contending that the letter dated 17 November 2017, at least to
some extent, had the effect of revocation of letter dated
27 May 2015. This aspect, at this juncture, is noted to consider the
objection of delay.
19) The letter dated 17 November 2017 would clearly
indicate that the issues of cancellation of allotment or forfeiture of
advance amount had not attained finality between the parties and
MADC was interested in Wipro taking allotment of smaller
portion of land admeasuring 23.40 acres. Petitioner responded to
the letter dated 17 November 2017 vide its letter dated
7 February 2018 as under :-
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February 7, 2018
To,
Maharashtra Airport Development Company Ltd
Central Facility building, B-Wing(North),
1st Floor, Mihan SEZ, Khapri (Rly),
Nagpur -- 441108
Kind Attention: Advisor (Tech)
Ref: Your letter 5779/Mihan/2017 dated 17/11/2017 -- for
development of Plot in Sector 12 of about 23.40 acres in MIHAN
SEZ area.
Dear Sir,
I write to you with respect to the Land in MIHAN SEZ area and
regarding your letter dated November 17, 2017. We appreciate
your offer to discuss issues related to development of the land
allotted to Wipro.
Despite our earnest intent, we were unable to expand our IT/
ITES operations in MIHAN SEZ due to lack of supporting social
infrastructure.
We are however keen to discuss and engage with you to
understand your plans for Sector 12 and explore opportunities.
Based on mutual convenience we can meet up with your VC
and MD and take this forward.
Thanking you,
Yours sincerely,
Sd/-
Raghunandan CB
Vice President Operations
Wipro Limited
20) The Petitioner's response vide letter dated
7 February 2018 would again indicate that the matter of allotment
of land by MADC to the Petitioner did not attain finality upon
issuance of impugned communication dated 27 May 2015. In
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detailed Affidavit-in-Reply filed by MADC it has chosen to
maintain silence about this correspondence in the form of letters
dated 17 November 2017 and 7 February 2018.
21) In our view, since the MADC voluntarily approached
Petitioner by making inquires about its development plans in
smaller plot of land admeasuring 23.40 acres in pursuance of
original LOA dated 5 April 2007, it becomes difficult to accept that
the decision to forfeit the advance amount of Rs.10.29 crores
communicated vide letter dated 27 May 2015 could attain finality.
In fact, the letter dated 17 November 2017 would clearly create an
impression that the advance amount would get adjusted against
allotment of smaller portion of land. This is not the first time that
MADC was willing to offer smaller plot of land to the Petitioner.
Even before issuance of letter dated 27 May 2015, MADC had
repeatedly offered smaller piece of land (of which possession
could be handed over) to Wipro by adjusting the advance amount
already paid. Petitioner had apparently showed disinclination to
accept allotment of entire 117 acres of land and had applied for
23.40 acres of land vide letter dated 25 January 2012. MADC had
showed willingness not only for allotment of 23.40 acres of land
but also for adjustment of the advance amount of Rs. 10.29 crores.
This aspect is being dealt with in latter part of judgment. Suffice it
is to observe at this juncture that the MADC's offer vide letter
dated 17 November 2017 clearly created hope in the mind of
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Petitioner that the advance payment made by it was still secured
in the form of securing allotment of smaller plot of land.
22) As observed above, Petitioner responded to MADC's
proposal vide letter dated 7 February 2018 and requested MADC
to convene a meeting for understanding the future plans for Sector
12. It has all along been the complaint of the Petitioner that
necessary infrastructural facilities were not made available by the
MADC on account of which Petitioner was not willing to take the
risk of undertaking large scale investment for development of the
project. This is a reason why Petitioner did not immediately accept
the offer made vide letter dated 17 November 2017 and called
upon MADC to discuss the issues relating to supporting social
infrastructure. After addressing letter dated 7 February 2018, it
was quite natural for the Petitioner to wait for at least some time
for a response by the MADC. The previous history between the
parties was such that MADC had reverted with an offer to the
Petitioner after 2 years and 5 months from the date of sending
communication dated 27 May 2015. It was, therefore, quite natural
for the Petitioner not to take immediate precipitative steps by
indulging into litigation.
23) What must also be appreciated is the nature of
relationship between the parties. The case does not involve usual
case of allotment of government land through open tender process
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where there are multiple bidders competing against each other.
This is a case where MADC had approached Wipro and requested
it to set up an IT Park with a view to make MIHAN project more
viable. Unfortunately, the development of the IT Park by Wipro
could not fructify and it is not necessary to go into the issue as to
who was responsible for such non-fructification, as Petitioner is no
longer interested in the land in question. Suffice it to observe that
the case does not involve eagerness or extreme interest on the part
of the Petitioner in seeking allotment of the land. In fact, sequence
of events indicates that it was MADC was more interested in
Wipro setting up its project to make MIHAN project look more
attractive. It was apparently MADC's intention of attracting a giant
software companies to the MIHAN project and the allotment of
land was made under a hope that a large IT park would get
developed creating several job opportunities. The relationship
between the parties deserves to be appreciated in the light of the
above background. This is a reason why the parties never took
adverse stand against each other for 8 long years when the issue of
taking over possession of land remained hanging. Though, Wipro
did not show interest in taking over possession of the land, MADC
never took immediate precipitative steps for cancelling the
allotment and waited for Wipro to take its own time in deciding
whether to take over possession of entire land admeasuring 117
acres or smaller portion of land admeasuring 30.24 acres. The
correspondence indicates that MADC was willing to offer the
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smaller portion of land under a sanguine hope of Wipro setting up
IT park in MIHAN SEZ. This appears to be a reason why MADC
decided to make a fresh approach to Wipro two and half years
after cancellation of allotment and forfeiture of advance payment
vide letter dated 17 November 2017. Considering the above nature
of relationship between the parties, Petitioner-Wipro cannot be
held responsible for not initiating the litigation immediately after
issuance of impugned communication dated 27 May 2015 as the
issue remained under discussion between the parties at least till
the year 2018.
24) Though provisions of the Limitation Act, 1963 do not
apply to proceedings filed under Article 226 of the Constitution of
India, the Constitutional Courts have imposed a self-restricting
rule of not entertaining the stale claims by applying the principles
of delay and laches. This self-imposed rule is a rule of practice,
based on sound and proper exercise of discretion, and there is no
inviolable rule that whenever there is delay, the Court must
necessarily refuse to entertain the petition. Each case has to be
decided on its own peculiar facts. In this regard, the observations
by Constitution Bench judgment in Ramchandra Shankar Deodhar
(supra) in paragraph 10 are apposite, which read thus :-
10. The first preliminary objection raised on behalf of the
respondents was that the petitioners were guilty of gross laches
and delay in filing the petition...
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There was a delay of more than ten or twelve years in filing the
petition since the accrual of the cause of complaint, and this
delay, contended the respondents, was sufficient to disentitle the
petitioners to any relief in a petition under Article 32 of the
Constitution. We do not think this contention should prevail
with us. In the first place, it must be remembered that the rule
which says that the Court may not inquire into belated and stale
claims is not a rule of law, but a rule of practice based on sound
and proper exercise of discretion, and there is no inviolable rule
that whenever there is delay, the court must necessarily refuse to
entertain the petition. Each case must depend on its own facts.
The question, as pointed out by Hidayatullah, C.J., in
Tilockchand Motichand v. H.B. Munshi MANU/SC/0127/1968 :
[1969]2SCR824 "is one of discretion for this Court to follow from
case to case. There is no lower limit and there is no upper limit-.
It will all depend on what the breach of the Fundamental Right
and the remedy claimed are and how the delay arose." Here the
petitioners were informed by the Commissioner, Aurangabad
Division by his letter dated 18th October, 1960 and also by the
Secretary of the Revenue Department in January 1961 that the
rules of recruitment to the posts of Deputy Collector in the
reorganised State of Bombay had not yet been unified, and that
the petitioners continued to be governed by the rules of Ex-
Hyderabad State and the Rules of 30th July, 1959 had no
application to them. The petitioners were, therefore, justified in
proceeding on the assumption that there were no unified rules
of recruitment to the posts of Deputy Collector and the
promotions that were being made by the State Government
were only provisional, to be regularised when unified rules of
recruitment were made. It was only when the petition in
Kapoor's case was decided by the Bombay High Court that the
petitioners came to know that it was the case of the State
Government in that petition-and that case was accepted by the
Bombay High Court-that the Rules of 30th July, 1959 were the
unified rules of recruitment to the posts of Deputy Collector
applicable throughout the reorganised State of Bombay. The
petitioners thereafter did not lose any time in filing the present
petition. Moreover, what is challenged in the petition is the
validity of the procedure for making promotions to the posts of
Deputy Collector-whether it is violative of the equal
opportunity clause-and since this procedure is not a thing of the
past but is still being followed by the State Government, it is but
desirable that its Constitutionality should be adjudged when the
question has come before the court at the instance of parties
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properly aggrieved by it. It may also be noted that the principle
on which the Court proceeds in refusing relief to the petitioner
on ground of laches or delay is that the rights which have
accrued to others by reasons of the delay in filing the petition
should not be allowed to be disturbed unless there is reasonable
explanation for the delay. This principle was stated in the
following terms by Hidayatullah, C.J., in Tilokchand v. H.B.
Munshi MANU/SC/0127/1968 : [1969]2SCR824 :
"The party claiming Fundamental Rights must move the
Court before other rights come into existence. The action
of courts cannot harm innocent parties if their rights
emerge by reason of delay on the part of the person
moving the Court."
Sikri, J., (as he then was), also re-stated the same principle in
equally felicitous language when he said in S.N. Bose v. Union
of India MANU/SC/0506/1969 : [1970]2SCR697: "It would be
unjust to deprive the respondents of the rights which have
accrued to them. Each person ought to be entitled to sit back
and consider that his appointment and promotion effected a
long time ago would not be set aside after the lapse of a number
of years." Here as admitted by the State Government in
Paragraph 55 of the affidavit in reply, all promotions that have
been made by the State Government are provisional and the
position has not been crystallised to the prejudice of the
petitioners No rights have, therefore, accrued in favour of others
by reason of the delay in filing the petition. The promotions
being provisional, they have not conferred any rights on those
promoted and they are by their very nature liable to be set at
naught, if the correct legal position, as finally determined, so
requires. We were also told by the learned Counsel for the
petitioners, and that was not controverted by the learned
Counsel appearing on behalf of the State Government, that even
if the petition were allowed and the reliefs claimed by the
petitioners granted to them, that would not result in the
reversion of any Deputy Collector or officiating Deputy
Collector to the post of Mamlatdar/Tehsildar; the only effect
would be merely to disturb their inter se seniority as officiating
Deputy Collectors or as Deputy Collectors. Moreover, it may be
noticed that the claim for enforcement of the fundamental right
of equal opportunity under Article 16 is itself a fundamental
right guaranteed under Article 32 and this Court which has been
assigned the role of a sentinel on the qui vive for protection of
the fundamental rights cannot easily allow itself to be
19 August 2025
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persuaded to refuse relief solely on the jejune ground of laches,
delay or the like.
25) It is also equally well settled position of law that unless
delay causes prejudice to the opposite party, the petition need not
be rejected only on the ground of delay. The Courts are justified in
not-entertaining petitions on the ground of delay where it is
observed that the inaction on the part of a party has led the other
party change its position and grant of relief in favour of former
party would require reversal of position taken by the latter party.
In Madamsetty Satyanarayana Versus. G. Yellogi Rao and others 8, the
Apex Court has held as under :-
12. The result of the aforesaid discussion of the case law may be briefly
stated thus : While in England mere delay or laches may be a ground
for refusing to give a relief of specific performance, in India mere delay
without such conduct on the part of the plaintiff as would cause
prejudice to the defendant does not empower a court to refuse such a
relief. But as in England so in India, proof of abandonment or waiver
of a right is not a pre-condition necessary to disentitle the plaintiff to
the said relief, for if abandonment or waiver is established, no question
of discretion on the part of the Court would arise. We have used the
expression "waiver" in its legally accepted sense, namely, "waiver is
contractual, and may constitute a cause of action : it is an agreement to
release or not to assert a right"; see Dawson's Bank Ltd. v. Nippon
Menkwa Kabushiki Kaisha [(1935) LR 62 IA 100, 108] . It is not possible
or desirable to lay down the circumstances under which a court can
exercise its discretion against the plaintiff. But they must be such that
the representation by or the conduct or neglect of the plaintiff is
directly responsible in inducing the defendant to change his position to
his prejudice or such as to bring about a situation when it would be
inequitable to give him such a relief.
(emphasis added)
AIR 1965 SC 1405
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26) In the present case, inaction on the part of the
Petitioner in not challenging the impugned communicated dated
27 May 2015 has not induced MADC in altering its position in any
manner. Even though MADC has allotted some portion out of 117
acres of land to third parties after 2022, Petitioner is not seeking
allotment of the land and therefore there is no question of reversal
of position taken by MADC. Petitioner's claim is only for refund of
the advance amount. It is also not that the inaction on the part of
the Petitioner in initiation of litigation prevented MADC from
allotting the land to third parties. As observed above, MADC
made a voluntary approach to Petitioner on 17 November 2017 for
accepting allotment of 23.40 acres of land. Thus Petitioner's
inaction in initiating litigation has not made MADC alter its
position in any manner.
27) Reverting to the sequence of events, it is seen that there
was some hiatus between the parties after Petitioner showed
interest in securing allotment of smaller land of 23.40 acres vide
letter dated 7 February 2018. Petitioner's case is that it kept on
waiting for response from MADC's side after 7 February 2018. As
observed above, MADC had previously displayed the conduct of
responding after 2 and half years. Therefore, there is no reason to
disbelieve Petitioner's stand that it waited for action on MADC's
part after submission of letter dated 7 February 2018. On
24 November 2022, Petitioner finally wrote to MADC referring to
correspondence for refund of the advance amount and requested
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for a meeting in the second week of December 2022 discussing
refund of the amount of advance payment. This email dated 24
November 2022 is produced by MADC along with its Reply, which
is silent about MADC's response to the said request. This was then
followed by Petitioner sending Advocate Notice dated
13 September 2024. Thus the case does not involve total silence or
inaction on Petitioner's part after issuance of the impugned
forfeiture letter dated 27 May 2015. Parties not only discussed
allotment of smaller plot but also engaged in correspondence for
refund.
28) Also of relevance is the fact that when the Petitioner
served Advocate's notice dated 13 September 2024 on MADC
seeking refund of advance payment with interest, the only
response that was received from Advocate of MADC on
10 October 2024 was that MADC would give a detailed reply to
the notice dated 13 September 2024 within a period of one month.
However, MADC failed to give any such detailed reply, which
prompted Petitioner to serve another notice dated
8 November 2024 threatening MADC of institution of litigation.
Again, a terse response was received from MADC on 8 November
2024 once again reserving right to issue detailed reply to the initial
notice dated 13 September 2024. Thus, beyond repeatedly seeking
time to give a detailed reply to the notice dated
13 September 2024, MADC did not deal with the contentions
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raised by the Petitioner in the notice dated 13 September 2024.
MADC thus did not resist the claim raised by the Petitioner for
refund of security deposit on the ground of delay. It is only after
the petition is filed that MADC has raised the issue of delay
through its Affidavit in Reply dated 2 June 2025.
29) Considering the above position, we are of the view that
the cause of action for filing the present petition did continue
beyond 27 May 2015. The damage caused to the Petitioner in the
form of forfeiture letter dated 27 May 2015 was not complete, even
upon service of the said notice. The cause continued as MADC
voluntarily came back to the Petitioner with the offer of allotment
of smaller land admeasuring 23.40 acres on 17 November 2017.
Petitioner also showed interest in allotment of smaller plot by
MADC vide response dated 7 February 2018. If the fresh offer
made by MADC was to fructify into allotment of smaller land
admeasuring 23.40 acres, the advance payment of Rs.10.29 crores
made by the Petitioner would be adjusted in the price of the said
smaller plot of land. The eagerness on the part of MADC in
allotting smaller plot of 23.40 acres is required to be considered in
the light of its inability to dispose of the land agreed to be allotted
to the Petitioner vide LOA dated 5 April 2007. Though Petitioner's
allotment was cancelled on 27 May 2015, it appears that MADC
was not able to allot any portion of the land admeasuring 117
acres for the next seven long years. In para-19.20 of its Affidavit in
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Reply, the MADC has given details of allotment of three land
parcels out of the total land of 117 acres. Para-19.20 of the Reply
reads thus :-
19.20. That the Petitioner has no locus to demand cogent description of the
present status of the Plot of Land and its current valuation from the
Respondent No.1. It is pertinent to note that the following land/s
parcels out of the total land of 117 Acres has already been allotted to
the following parties-
Sr. No. Name of Allotees Date of Land Document/s
Provisional Alloted
Allotment
1. Maharashtra 22.02.2022 About A copy of the provisional
Remote Sensing 6.52 allotment letter sent by
Application Acres Respondent No.1 to
Centre (MRSAC) MRSAC dated 22.02.2022
is given in ANNEXURE-
[Govt. Body] "22"
2. State Disaster 25.02.2022 About A copy of the provisional
Management 10 allotment letter sent by
Authority Acres Respondent No.1 to
Maharashtra SDMAM dated 25.02.2022
(SDMAM) is given in ANNEXURE-
[Govt. Body] "23"
3. M/s. GAIL (India) 20.02.2024 17 A copy of the provisional
Limited Acres allotment letter sent by
Respondent No.1 to M/s.
GAIL (India) Ltd. dated
20.02.2022 is given in
ANNEXURE-"24"
30) Thus, the case involves peculiar circumstances in
which MADC itself was unable to dispose of the land allotted to
the Petitioner. Out of 117 acres agreed to be allotted to the
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Petitioner, it appears that MADC has been able to allot only 33.52
acres of land to the three entities, two of whom are arms of
Government of Maharashtra, that too after 7 long years of issuance
of impugned communication dated 27 May 2015. There can only
be two possibilities for this action. First possibility could be
MADC's voluntary offer for 23.40 acres of land to Petitioner made
on 7 November 2017 and Petitioner's positive response to that
offer on 7 February 2018. One may infer that MADC kept on
mulling allotment of 23.40 acres of land to Petitioner till 2022 when
Petitioner finally requested for refund of advance amount. Second
possibility could be MADC's inability to dispose of the land due
lack of interest by other parties in the land. What is more
important to note is that out of 117 acres of land allotted to
Petitioner, MADC has been able to allot only 33.52 acres of land till
now. Balance land is not allotted either because the acquisition is
incomplete or because there are no takers for that land. Be that as
it may. In the absence of any concrete material on record, it is not
necessary to delve deeper into the reasons for non-allotment of
balance land out of 117 acres by MADC. Suffice it to observe at
this stage that it took about 7 years for MADC to allot 10 acres of
land on 25 February 2022 and 9 years to allot 17 acres of land. It
does appear that MADC was unable to find takers for the land,
allotment of which was cancelled vide impugned communication
dated 27 May 2015. This appears to be the reason why MADC
made a voluntary approach to the Petitioner on 17 November 2017
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for allotment of smaller plot of 23.40 acres. The silence between the
parties after 7 February 2018 till 24 November 2022 is required to
be appreciated in the light of the above developments where
MADC was not able to find takers for the land in question.
Therefore, Petitioner was justified in waiting in expectation of
MADC either allotting smaller portion of the land or refunding the
advance payment.
31) Considering the above circumstances, it would be
unjust to dismiss the present petition only on the ground of delay.
The facts and circumstances are such that the Petitioner cannot be
held guilty of delay and laches. If MADC was not to make fresh
offer for allotment of smaller land on 17 November 2017, the
Petitioner could have been held guilty of delay and laches in not
timely challenging the communication dated 27 May 2015.
MADC's voluntary offer on 17 November 2017, Petitioner's
response on 7 February 2018 and Petitioner's request for refund on
24 November 2022 offer enough justification for ignoring the
delay, if any, particularly considering the nature of relief we
propose to grant in Petitioner's favour in the present Petition. We
are therefore not inclined to dismiss the petition only on the
ground of delay.
32) We now proceed to consider the merits of the petition.
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33) Petitioner paid amount of Rs.10,29,60,000/- towards
20% of total consideration of Rs.51,48,00,000/- towards price of 117
acres of land calculated at the rate of Rs.44,00,000/- per acre. Since
the transaction of allotment of land has not been completed, the
Petitioner has sought refund of advance payment of
Rs.10,29,60,000/-. MADC on the other hand has forfeited the said
advance amount vide impugned communication dated
27 May 2015. The reasons recorded for forfeiture of the advance
amount by MADC in the communication dated 27 May 2015 are as
under :-
Coming to the proposal of refund of the advance of Rs.10.29
Crores with interest @ 24% p.a. and to terminate the current
Agreement as you don't want to hold any land, etc. is contrary
to the terms of the Agreement. There is total failure on your part
to comply with any of the terms of the Agreement. Operations
of our project are smoothly going on and have been reached to
the expected satisfactory norms. There is no question of refund
of advance as well as the interest as claimed by you. On the
other hand, the advance paid by you is liable to be forfeited
because there is total inaction and avoidance on your part when
you have been given repeated chances and opportunities to
commence your project as was expected from time to time.
Therefore, your proposal cannot be accepted.
You have made an alternative proposal for taking land to the
extent of Rs.10.29 Crores with no firm commitment to
commence in next five years. You have already been apprised of
total facts wherein from time to time you have been given
opportunities to take possession of the lesser land than shown in
the letter of acceptance and come forward with the firm
commitment. However, you have never responded to the same.
This type of "No firm commitment" is not a legal offer nor it can
be considered as practical commitment. Your expectation in the
said proposal that MADC should terminate the contract and pay
back the advance along with the interest is also contrary to the
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terms of the Agreement, nor there is any equitable reason to
consider this type of offer in the light of the facts and
circumstances stated above. Therefore, MADC hereby reject
your both the offers. MADC reserves its right to recover the
interest for withholding of the 80% of the premium without any
reason whatsoever.
In the light of the facts and circumstances stated above, the letter
of acceptance dtd. 5/4/2007 for allotment of 117 Acres of land is
liable to be cancelled and is hereby cancelled. The advance
amount of Rs.10.29 Crores is hereby forfeited.
(emphasis and underlining added)
34) MADC has contended that the amount of Rs. 10.29
crores was paid by the Petitioner towards Earnest Money Deposit
(EMD) and what is forfeited is EMD. However, the impugned
communication dated 27 May 2025 does not brand the said
payment as EMD and repeatedly refers to the same as 'advance
payment'.
35) In the impugned communication, MADC has stated
that Petitioner's request for refund of advance payment is contrary
to the terms of the Agreement, i.e. terms of the agreement. By
referring to the terms of LOA, the advance payment of Rs. 10.29
crores has been forfeited. We therefore proceed to examine
whether the LOA provided for such forfeiture. It would be
apposite to extract the relevant terms and conditions of the LOA
dated 5 April 2007 for facility of reference :-
2. The price of the land for 117 Acres thus works out to
Rs.51,48,00,000/-, out of which you will have to pay 20% of the
total consideration i.e. Rs. 10,29,60,000/- towards advance
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payment for this plot. The remaining 80% amount will have to
be paid by you at the time of giving possession of the land. In
case net area increases, you will be required to pay additional
amount as per the rate in Clause 1 above. A demand note as
desired by you indicating the payment details is given as per the
Enclosure No.3.
3. As discussed with you from time to time and informed vide
various emails, that out of total 160.24 Acres of land, other than
the Zudpi jungle and the land presently under water channels,
MADC is having around 30 Acres of land in its possession. The
possession of the land in possession can be given to you at any
point of time whenever you so desire on payment of remaining
80% of amount for 30 Acre in lump sum or installment which
may be fixed by MADC. The possession of remaining land will
be given on acquisition by MADC, which is being done by
applying urgency clause.
Delay in Payment:
11. In case the of delay in making the balance 80% payment, an
interest @ 15% shall be charged from the due date of the
payment.
12. In addition to the price for the land mentioned above, you
will have to pay a lease rent of Rs.40/- per acre per year for net
area. This lease rent shall have to be paid on or before the 15 th of
the first month of every year, considering the date of payment of
80% amount as a zero date.
14. MADC promises to give you the functional infrastructure
like roads, water supply, sewage disposal and
telecommunication network within 24 months from the date of
giving possession of the land. In case of failure to do so MADC
shall pay penalty for delay. We are intending to have our power
plant and supply system and till that comes up, we will assist
you in getting power from existing system of Maharashtra State
Electricity Distribution Co. Ltd.
36) The entire LOA did not contain any clause for
forfeiture of part payment of Rs.10,29,60,000/- and there was a
reason for not stipulating the forfeiture clause. The LOA also did
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not fix any specific time for payment of 80% balance consideration.
Clause-2 provided that 'The remaining 80% amount will have to be
paid by you at the time of giving possession of the land'. The LOA thus
did not provide for any particular period during which the
balance amount was required to be made. Provisions of Clause-3
of the LOA are vital in which it was indicated that MADC was
only possessing 30 acres of land as on the date of issuance of LOA.
MADC offered to handover possession of only 30 Acres land on
payment of remaining 80% of amount for 30 Acres land. Para-3 of
the LOA specifically provided that 'The possession of remaining land
will be given on acquisition by MADC, which is being done by applying
urgency clause'.
37) Thus, Clauses-2 and 3 of the LOA when read together
would indicate that the entire 117 acres of land was not available
in possession of MADC and payment of 80% balance
consideration was to be made by the Petitioner only on receipt of
possession of 117 acres of land. This is the reason why no specific
time was indicated for payment of balance consideration in the
LOA. MADC possessed only 30 acres of land as on the date of
issuance of LOA and taking over possession of 30 acres of land
was left at the discretion of the Petitioner on account of use of the
words 'at any point of time whenever you so desire' in Clause-3 of the
LOA. Thus, it was not compulsory for the Petitioner to
immediately take over possession of 30 acres of land. Petitioner, at
its option, could wait for handing over possession of entire bulk of
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117 acres of land. Thus, Petitioner's obligation to make payment
of 80% balance consideration arose under the terms of LOA only
when MADC offered possession of entire 117 acres of land. This is
the reason why the LOA did not contain any stipulation for
forfeiture of advance payment.
38) In support of his contention that the parties had agreed
for forfeiture of the EMD, Mr. Multani has relied on email dated
2 April 2007 sent by MADC to the Petitioner stating as under :-
Once the land comes under our possession, MADC would
inform Wipro and within 7 days to make the balance payment
80% payment. Which required to be made within 30 days from
the date of receipt of the information from MADC. In the event
of non-payment of any amount of the 80% the balance payment
the 20% advance payment will be forfeited and for any delay an
interest @ 18% would be charged on the balance payment due
and unless otherwise the reason is genuine one to satisfy
VC&MD.
(emphasis added)
39) By relying on the above email, it is sought to be
suggested that the balance 80% amount was agreed to be paid
within a period of 30 days from the date of receipt of information
from MADC. However, such information was to be given once the
land came under the possession of MADC.
40) In our view, reliance by MADC on email dated
2 April 2007, does not make its case any better for two reasons.
Firstly, the email dated 2 April 2007 is superseded by the LOA
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issued on 5 April 2007. The terms and conditions of transaction
between the parties would be governed by the LOA and not by
email dated 2 April 2007. In the LOA, there is no condition for
forfeiture of 20% advance payment. Secondly, even if email dated
2 April 2007 is to be treated as terms and conditions of the
transaction between the parties, the said email provided for
making the balance payment within 30 days of receipt of
intimation from MADC, which intimation was to be given only
after the entire 117 acres of land came in MADC's possession.
Thus, even email dated 2 April 2007 contemplated making of
balance 80% payment only upon handing over of possession of
entire 117 acres of land.
41) Having held that Petitioner's obligation to make
balance 80% payment was contingent upon MADC offering
possession of entire land parcel of 117 acres, we proceed to
examine as to when MADC offered possession of entire land
parcel to the Petitioner.
42) Alongwith with its Affidavit-in-Reply MADC has
produced series of correspondence that has taken place between
the parties after issuance of LOA dated 5 April 2007. It would be
useful to take a quick stock of the said correspondence :-
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i. By email dated 9 October 2009, MADC called upon Wipro
to take joint measurement on the land ready for possession.
The email did not indicate that entire 117 acres of land was
ready for being handed over to MADC. The email would
only mean that the land admeasuring 30 acres could be
measured and handed over to the Petitioner. However,
under the terms of the LOA, it was optional for the
Petitioner to take over 30 acres of land. The fact that the
offer for joint measurement was only in respect of 30 acres
land is clear from trailing email dated 27 August 2009 in
which MADC made a request for release of payment of 305
lakhs for 30.343 acres.
ii. By letter dated 31 October 2009 MADC again requested
Petitioner to make full payment towards 30.343 acres i.e.
Rs. 3,05,49,200/-. Here the email dated 27 August 2009 and
letter dated 31 October 2007 indicates that MADC was
willing to adjust the entire advance payment of Rs.
10,29,60,000/- against 30.343 acres of land even though LOA
had provided for making 80% payment of the amount for
30 acres in lumpsum. The above correspondence shows
that MADC was pushing Petitioner to accept allotment in
respect of 30.343 acres of land on account of the fact that it
was unable to acquire the balance portion of the land.
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iii. On 8 March 2010, Petitioner requested MADC to
withdraw/cancel the allotment and refund the advance
payment of Rs.10,29,60,000/-.
iv. By letter dated 24 February 2011, MADC reiterated the
request for making the balance payment of Rs.
10,91,20,000/- towards allotment of land of 31 acres land,
again indicating the fact that MADC was unable to make
available the balance portion of land.
v. On 12 September 2011, MADC wrote to the Petitioner
contending that it was in complete possession of entire area
of 117 acres of land and requested the Petitioner to take
over possession on payment of Rs.51.48 crores minus the
amount already paid.
vi. On 18 January 2012, MADC wrote to Petitioner accusing it
of non-commencement of any activity despite passage of 56
months. MADC threatened the Petitioner with termination
of allotment by giving 15 days' time to explain its conduct.
Curiously the letter dated 18 January 2012 did not make
any reference to earlier letter dated 12 September 2011 nor
did the said letter mention that the entire 117 acres of land
was available for allotment to the Petitioner.
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vii. On 27 August 2012, MADC again requested the Petitioner
to take over possession of the land without indicating the
exact land which was ready for being offered in possession
to the Petitioner. It accused Petitioner of not paying the
balance amount of Rs. 48.43 crores despite passage of 5
years.
viii. It appears that by its letter dated 3 January 2012, Wipro had
accused MADC of not completing the basic infrastructure.
By letter dated 25 January 2012, Petitioner requested
MADC to limit the allotment to only 23.40 acres by
adjusting the advance payment made by it. MADC had
favourably considered the request for restraining the
allotment to lesser area. However, since no further interest
was shown by the Petitioner, MADC addressed letter dated
31 December 2014 again threatening the Petitioner with the
consequences of termination of allotment and forfeiture of
the advance payment.
ix. On 22 February 2013, MADC wrote to the Petitioner that
Petitioner's request for limiting the allotment to 23.40 acres
would be considered only if operations were to be
commenced within a period of 24 months.
x. On 12 December 2014, Wipro once again accused MADC of
not providing essential infrastructural facilities and
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Neeta Sawant WP-395-2025-FC
requested for refund of advance payment of Rs.10.29 crores
alongwith interest. Alternatively, it requested for allotment
of land corresponding to Rs.10.29 crores without any firm
commitment to commence operations in five years.
xi. MADC proceeded to cancel the allotment by impugned
communication dated 27 May 2015 and forfeited the
advance payment of Rs.10.29 crore.
xii. Wipro responded by letter dated 15 June 2015 expressing
difficulties in setting up of project in MIHAN. Another
letter dated 26 June 2015 was sent by the Petitioner
requesting for refund of advance payment.
43) The above correspondence would indicate that MADC
was never in a position to handover entire land parcel of 117 acres
and was pushing Wipro to accept possession of 30 acres of land
and was ready to adjust the advance payment of Rs.10.29 crores
against land value of 30 acres. In one stray letter dated 12
September 2011 MADC has claimed possession of entire area of
117 acres. However, the correspondence after 12 September 2011
creates a serious doubt about the ability and willingness of MADC
to handover entire 117 acres of land to the Petitioner. MADC's two
letters 18 January 2012 and 27 August 2012 that followed letter
dated 12 September 2011 did not make any reference to the said
letter and did not accuse Petitioner of not making payment of
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balance consideration despite offering possession of entire land
vide letter dated 12 September 2011. The pleadings raised by
MADC about letter dated 12 September 2011 are also curious. In
its reply, while referring to the letter dated 12 September 2011,
MADC has not pleaded that the entire 117 acres of land was
acquired by September 2011 and ready for being allotted and
handed over to the Petitioner. The pleadings with reference to
letter dated 12 September 2011 in the reply are as under :-
Further, vide letter dated 12.09.2011, the Respondent No.1 had again
informed the Petitioner that the payment of Rs. 10,29,60,000/- was actu-
ally in the nature of earnest money and further informed the Petitioner
that in case of Petitioner's default, the Respondent No.1 would have no
option left but to terminate the contract with all of its consequences, as
cited below:
Thus, the letter dated 12 September 2011 is produced along with
the reply to highlight the aspect of failure to make the payment by
Petitioner and there is no statement in the reply while referring to
the said letter that the entire land of 117 acres was acquired or was
available for possession by the Petitioner.
44) It also appears that by letter dated 29 January 2012,
Petitioner had requested for allotment of land of 23.40 acres and
MADC showed willingness to restrict such allotment to 23.40 acres
vide letter dated 22 February 2013 subject to the condition of
Petitioner undertaking to commence operations within 24 months.
WIPRO apparently did not give any such commitment and again
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approached MADC vide letter dated 12 December 2014 seeking
refund of entire advance amount of Rs.10.29 crores or in the
alternative for allotment of land equivalent to the amount of
Rs.10.29 crores. It therefore becomes to difficult to hold on the
basis of one stary letter dated 12 September 2011 that MADC was
in a position to handover possession of entire land parcel of 117
acres. The parties thereafter started discussing allotment of lesser
portion of land admeasuring 23.43 acres. Thus, the time for
making balance 80% payment for entire land parcel of 117 acres
never really arrived.
45) MADC has however cancelled the allotment by
impugned communication dated 27 May 2015 by accusing
Petitioner of not complying with the terms and conditions of the
LOA. As observed above, LOA never fixed any time limit for
paying balance 80% consideration except by stray letter dated
12 September 2011, there is nothing on record to indicate that
MADC offered possession of entire land parcel of 117 acres to the
Petitioner. Even if it is assumed that letter dated
12 September 2011 constitutes offer for possession of 117 acres of
land, parties thereafter started discussing allotment of lesser
portion of 23.43 Acres. Considering the above position, in our
view, Petitioner cannot be entirely blamed for not paying balance
consideration of 80% in respect of 117 acres of land.
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46) Petitioner is no longer interested in allotment of the
land. Even though we are not in full agreement with MADC's
decision to cancel the allotment, Petitioner is no longer insisting
for revival of the allotment. The only prayer that is pressed in the
present petition is for refund of advance payment alongwith
interest.
47) It is sought to be contended on behalf of MADC that
amount of 10.29 crores was paid towards Earnest Money Deposit
and that MADC was entitled to forfeit the same. As observed
above, there is no forfeiture clause in the LOA. The LOA does not
use the word EMD for describing the amount of Rs. 10.29 crores
and brands it as 'advance payment'. Though it is sought to be
orally argued that Rs.10.29 crores was paid towards EMD, MADC
has itself referred to the said payment as 'advance payment' in
numerous correspondence including forfeiture letter. We therefore
reject MADC's contention that Rs.10.29 crores were paid as EMD.
Therefore, it is not necessary to discuss the ratio of the judgment
of the Apex Court in Videocon Properties Ltd. (supra). We are not
impressed by reliance of MADC on draft Land Disposal
Regulations, 2014. The said Regulations were in draft format and
were not even in force at the time when the impugned
communication was issued. Subsequent finalisation of the Land
Disposal Regulations in 2018 is of little consequence as the 2018
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Regulations cannot retrospectively apply to the cancellation letter
dated 27 May 2015.
48) As observed above, there is no forfeiture clause in the
LOA. Right to forfeit is a contractual right and unless the contract
provides for right of forfeiture, there cannot be unilateral
forfeiture. Therefore, it is impermissible in law to forfeit the
advance payment made by the Petitioner in absence of a forfeiture
clause in the LOA. Provisions of Section 74 of the Indian Contract
Act, 1872 are relevant here, which provides thus :-
74. Compensation for breach of contract where penalty stipulated for.
--
When a contract has been broken, if a sum is named in the contract as
the amount to be paid in case of such breach, or if the contract contains
any other stipulation by way of penalty, the party complaining of the
breach is entitled, whether or not actual damage or loss is proved to
have been caused thereby, to receive from the party who has broken
the contract reasonable compensation not exceeding the amount so
named or, as the case may be, the penalty stipulated for.
Explanation.--A stipulation for increased interest from the date of de-
fault may be a stipulation by way of penalty.
Exception.--When any person enters into any bail-bond, recognizance
or other instrument of the same nature, or, under the provisions of any
law, or under the orders of the Central Government or of any State
Government, gives any bond for the performance of any public duty or
act in which the public are interested, he shall be liable, upon breach of
the condition of any such instrument, to pay the whole sum mentioned
therein.
Explanation.--A person who enters into a contract with Government
does not necessarily thereby undertake any public duty, or promise to
do an act in which the public are interested.
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Thus, parties to contract can agree to specify a sum to be paid in
case of breach of contract and upon breach being proved, the party
who complains of breach is entitled to receive the said specified
amount whether or not any actual damage is caused. However, for
claiming such sum, it is necessary that there is a contractual clause
between the parties. In absence of such a clause in the contract, it
is impermissible to retain amount paid towards advance payment.
Thus, forfeiture cannot be resorted to unless the contract explicitly
provides for the same.
49) The law in regard to impermissibility to forfeit the
security deposit in absence of a forfeiture clause is well settled. In
Suresh Kumar Wadhwa (supra) is apposite in which it is held in
paras-23 to 29 as under :-
23. Reading of Section 74 would go to show that in order to forfeit the
sum deposited by the contracting party as "earnest money" or
"security" for the due performance of the contract, it is necessary that
the contract must contain a stipulation of forfeiture. In other words, a
right to forfeit being a contractual right and penal in nature, the parties
to a contract must agree to stipulate a term in the contract in that
behalf. A fortiori, if there is no stipulation in the contract of forfeiture,
there is no such right available to the party to forfeit the sum.
24. The learned author-Sir Kim Lewison in his book "The Interpretation
of Contracts" (6th edition) while dealing with subject "Penalties,
Termination and Forfeiture clauses in the Contract" explained the
meaning of the expression "forfeiture" in these words:
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"A forfeiture Clause is a Clause which brings an interest to a
premature end by reason of a breach of covenant or condition,
and the Court will penetrate the disguise of a forfeiture Clause
dressed up to look like something else. A forfeiture Clause is not
to be construed strictly, but is to receive a fair construction."(See
page 838)
25. The author then quoted the apt observations of Lord Tenterden
from an old case reported in (1828) Moo. & M. 189 Doe d Davis v.
Elsam wherein the learned Lord while dealing with the case of
forfeiture held as under:
"I do not think provisos of this sort are to be construed with the
strictness of conditions at common law. These are matters of
contract between the parties, and should, in my opinion, be
construed as other contracts" (see pages 840).
26. Equally well settled principle of law relating to contract is that a
party to the contract can insist for performance of only those
terms/conditions, which are part of the contract. Likewise, a party to
the contract has no right to unilaterally "alter" the terms and conditions
of the contract and nor they have a right to "add" any additional
terms/conditions in the contract unless both the parties agree to
add/alter any such terms/conditions in the contract.
27. Similarly, it is also a settled law that if any party adds any
additional terms/conditions in the contract without the consent of the
other contracting party then such addition is not binding on the other
party. Similarly, a party, who adds any such term/condition, has no
right to insist on the other party to comply with such additional
terms/conditions and nor such party has a right to cancel the contract
on the ground that the other party has failed to comply such additional
terms/conditions.
28. Keeping in view the aforementioned principle of law, when we
examine the facts of the case at hand then we find that the public notice
(advertisement), extracted above, only stipulated a term for deposit of
the security amount of Rs. 3 lakhs by the bidder (Appellant) but it did
not publish any stipulation that the security amount deposited by the
bidder (Appellant herein) is liable for forfeiture by the State and, if so,
in what contingencies.
29. In our opinion, a stipulation for deposit of security amount ought
to have been qualified by a specific stipulation providing therein a
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right of forfeiture to the State. Similarly, it should have also provided
the contingencies in which such right of forfeiture could be exercised
by the State against the bidder. It is only then the State would have got
a right to forfeit. It was, however, not so in this case.
(emphasis added)
50) Even in a case where the amount is paid as EMD
(which is not the case here), the Apex Court has held that the
forfeiture clause must be clear and explicit. In cases where the
amount is paid towards part payment of consideration and even if
there is a forfeiture clause in the contract, the same would not
apply for forfeiture of such part payment of consideration. In
Satish Batra Versus. Sudhir Rawal9, it is held as under :-
15. The law is, therefore, clear that to justify the forfeiture of advance money
being part of "earnest money" the terms of the contract should be clear and
explicit. Earnest money is paid or given at the time when the contract is en-
tered into and, as a pledge for its due performance by the depositor to be for-
feited in case of non-performance by the depositor. There can be converse sit-
uation also that if the seller fails to perform the contract the purchaser can
also get double the amount, if it is so stipulated. It is also the law that part-
payment of purchase price cannot be forfeited unless it is a guarantee for the
due performance of the contract. In other words, if the payment is made only
towards part-payment of consideration and not intended as earnest money
then the forfeiture clause will not apply.
(emphasis added)
51) In our view therefore, there are two reasons why
MADC cannot retain the amount of 10.29 crores paid by the
Petitioner. Firstly the said amount is not paid towards EMD or
security deposit and secondly, there is no clause in the LOA for
forfeiture of the said amount. In absence of a specific clause for
(2013) 1 SCC 345
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forfeiture, in our view, the action of MADC in forfeiting the
advance payment of Rs.10.29 crores is clearly unjustified.
52) MADC is a public authority and is expected to act
fairly. Failure of transaction between the parties has not really
caused any loss or prejudice to MADC. MADC has not pleaded
cause of any loss in monetary terms in its Affidavit-in-Reply. On
the contrary, the Affidavit-in-Reply indicates that MADC has
allotted some portion of land to other entities at much higher rate.
MADC had agreed to allot land to the Petitioner at the rate of
Rs.44 lakhs per acre, whereas the land admeasuring 6.52 acres
appears to have been allotted to Maharashtra Remote Sensing
Application Centre for Rs.9.10 crores which works out roughly to
Rs.1.39 crores per acre. Similarly, land admeasuring 10 acres is
allotted to State Disaster Management Authority on
25 February 2022 for Rs.13.96 crores which works out roughly to
Rs.1.40 crores per acre. MADC has also allotted land admeasuring
17 acres to M/s. GAIL (India) Limited for Rs.38.50 crores which
works out to approximately Rs.2 crores per acre. Thus, failure of
transaction with the Petitioner has enabled MADC to allot the land
at much higher cost to other entities. It is not that other entities
were in queue for allotment of the land and the Petitioner
deprived MADC from allotting the land to other entities. Despite
cancellation of Petitioner's allotment in 2015, MADC has been able
to allot only 33 acres of land out of 117 acres to the other entities.
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In our view therefore, conduct of the Petitioner has not resulted
into any loss or prejudice to MADC.
53) Ordinarily, remedy under Article 226 of the
Constitution of India cannot be permitted to be exercised to settle
contractual disputes between the parties, even if one of the parties
to the contract is a State Authority. However, there are well
recognised exceptions to this usual rule. In ABL International Ltd.
and another Versus. Export Credit Guarantee Corporation of India Ltd.
and others10, the Apex Court has held that writs under Article 226
are maintainable for asserting contractual rights against State or its
instrumentalities. Referring to the judgment in ABL International
Ltd., the Apex Court has held in Unitech Limited (supra) as under :-
38. Much of the ground which was sought to be canvassed in the
course of the pleadings is now subsumed in the submissions which
have been urged before this Court on behalf of the State of Telangana
and TSIIC. As we have noted earlier, during the course of the hearing,
learned Senior Counsel appearing on behalf of the State of Telangana
and TSIIC informed the Court that the entitlement of Unitech to seek a
refund is not questioned nor is the availability of the land for carrying
out the project being placed in issue. Learned Senior Counsel also did
not agitate the ground that a remedy for the recovery of moneys
arising out a contractual matter cannot be availed of Under Article 226
of the Constitution. However, to clear the ground, it is necessary to
postulate that recourse to the jurisdiction Under Article 226 of the
Constitution is not excluded altogether in a contractual matter. A
public law remedy is available for enforcing legal rights subject to
well-settled parameters.
39. A two judge Bench of this Court in ABL International Ltd. v. Export
Credit Guarantee Corporation of India MANU/SC/1080/2003 : (2004) 3
SCC 553 [ABL International] analyzed a long line of precedent of this
(2004) 3 SCC 553
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Court6 to conclude that writs Under Article 226 are maintainable for
asserting contractual rights against the state, or its instrumentalities, as
defined Under Article 12 of the Indian Constitution.
39.1 Speaking through Justice N. Santosh Hegde, the Court held:
27. ...the following legal principles emerge as to the
maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or an
instrumentality of a State arising out of a contractual obligation
is maintainable.
(b) Merely because some disputed questions of fact arise for
consideration, same cannot be a ground to refuse to entertain a
writ petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary
claim is also maintainable.
This exposition has been followed by this Court, and has been adopted
by three-judge Bench decisions of this Court in State of UP v. Sudhir
Kumar and Popatrao Vynkatrao Patil v. State of Maharashtra.
39.2. The decision in ABL International, cautions that the plenary
power Under Article 226 must be used with circumspection when
other remedies have been provided by the contract. But as a statement
of principle, the jurisdiction Under Article 226 is not excluded in
contractual matters.
39.3. Article 23.1 of the Development Agreement in the present case
mandates the parties to resolve their disputes through an arbitration.
However, the presence of an arbitration Clause within a contract
between a state instrumentality and a private party has not acted as an
absolute bar to availing remedies Under Article 226.
39.4. If the state instrumentality violates its constitutional mandate
under Article 14 to act fairly and reasonably, relief under the plenary
powers of the Article 226 of the Constitution would lie. This principle
was recognized in ABL International:
28. However, while entertaining an objection as to the
maintainability of a writ petition Under Article 226 of the
Constitution of India, the court should bear in mind the fact that
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the power to issue prerogative writs Under Article 226 of the
Constitution is plenary in nature and is not limited by any other
provisions of the Constitution. The High Court having regard to
the facts of the case, has a discretion to entertain or not to
entertain a writ petition. The Court has imposed upon itself
certain restrictions in the exercise of this power. (See Whirlpool
Corporation v. Registrar of Trade Marks [ MANU/SC/0664/1998 :
(1998) 8 SCC 1].) And this plenary right of the High Court to
issue a prerogative writ will not normally be exercised by the
Court to the exclusion of other available remedies unless such
action of the State or its instrumentality is arbitrary and
unreasonable so as to violate the constitutional mandate of
Article 14 or for other valid and legitimate reasons, for which
the Court thinks it necessary to exercise the said jurisdiction.
(emphasis supplied)
39.5. Therefore, while exercising its jurisdiction Under Article 226, the
Court is entitled to enquire into whether the action of the State or its
instrumentalities is arbitrary or unfair and in consequence, in violation
of Article 14. The jurisdiction Under Article 226 is a valuable
constitutional safeguard against an arbitrary exercise of state power or
a misuse of authority.
39.6. In determining as to whether the jurisdiction should be exercised
in a contractual dispute, the Court must, undoubtedly eschew,
disputed questions of fact which would depend upon an evidentiary
determination requiring a trial. But equally, it is well-settled that the
jurisdiction Under Article 226 cannot be ousted only on the basis that
the dispute pertains to the contractual arena. This is for the simple
reason that the State and its instrumentalities are not exempt from the
duty to act fairly merely because in their business dealings they have
entered into the realm of contract. Similarly, the presence of an
arbitration Clause does oust the jurisdiction Under Article 226 in all
cases though, it still needs to be decided from case to case as to
whether recourse to a public law remedy can justifiably be invoked.
39.7. The jurisdiction Under Article 226 was rightly invoked by the
Single Judge and the Division Bench of the Andhra Pradesh in this
case, when the foundational representation of the contract has failed.
TSIIC, a state instrumentality, has not just reneged on its contractual
obligation, but hoarded the refund of the principal and interest on the
consideration that was paid by Unitech over a decade ago. It does not
dispute the entitlement of Unitech to the refund of its principal
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54) In M/s. Utkal Highways Engineers and Contractors (supra),
the Apex Court has held in para-8 as under :-
8. Be that as it may, the High Court has not dealt with the merits of the
writ petition. Moreover, it is not an inviolable rule that no money claim
can be adjudicated upon in exercise of writ jurisdiction. Non-payment
of admitted dues, inter alia, may be considered an arbitrary action on
the part of respondents and for claiming the same, a writ petition may
lie. Further, throwing a writ petition on ground of availability of
alternative remedy after 10 years, particularly, when parties have
exchanged their affidavits, is not the correct course unless there are
disputed questions of fact which by their very nature cannot be
adjudicated upon without recording formal evidence.
Thus, there cannot be an absolute bar in entertaining a writ
petition seeking refund of advance payment made to an
instrumentality of a State. There are no disputed questions of fact
in the present case, which can be decided only on law point of
permissibility to forfeit advance payment made by Petitioner in
absence of forfeiture clause in the contract.
55) In our view, therefore Petitioner's prayer for refund of
the advance payment of Rs.10,29,60,000/- appears to be reasonable.
However, we are not inclined to award any interest to the
Petitioner considering the time taken by it to file the present
petition. Considering the peculiar facts and circumstances of the
present case, it would be equitable if MADC refunds advance
payment of Rs.10,29,60,000/- to the Petitioner without any interest.
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56) We are inclined to order refund of the advance
payment to the Petitioner considering the peculiar facts and
circumstances of the present case as discussed above. Grant of
such equitable relief would cause no prejudice to either of the
parties. On the other hand, if MADC is permitted to retain the
advance amount, the same would amount to unjust enrichment as
MADC has already allotted 33 acres of land to other entities at
much higher rate. MADC is an instrumentality of State and is
expected to act fairly. It is not set up with the objective of doing
business of land development and disposal. MADC's objective is
to harness the potential of the Vidharbha region and to remove the
development backlog of the region. It is with this objective that
MADC pursued the proposal with Wipro for setting up its IT park
in the SEZ to attract large number of jobs for the youths in the
region. The transaction unfortunately could not go through. If
MADC was to suffer any financial losses, this Court would have
been loathe in ordering refund of the advance payment. However,
since MADC has been able to dispose of some part of the allotted
land at much higher rate of upto Rs. 2 crore per acre as compared
to the rate of Rs. 44 lakh per acre by the Petitioner, refund of
advance amount paid by Petitioner would balance the equities
between the parties. If the MIHAN project has indeed progressed,
and if the entire 117 acres of land is acquired by MADC, the
balance land is available with MADC to be allotted to other
entities at much higher rates. Therefore, no prejudice has been
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suffered by MADC on account of any actions of the Petitioner. We
are not directing MADC to pay any interest to the Petitioner which
would provide some solace to MADC, which would enable it to
utilize the said amount for over 18 years without any interest. In
our view therefore ends of justice would meet if the advance
amount is directed to be refunded to the Petitioner without any
interest. It is however clarified that the direction for refund of
advance payment is being granted in the light of peculiar facts of
the present case.
57) We accordingly proceed to pass the following order :-
(i) MADC is directed to refund amount of Rs.10,29,60,000/-
to the Petitioner within a period of six weeks without any
interest.
(ii) Writ Petition is partly allowed to the above extent. Rule is
made partly absolute. There shall be no order as to costs.
[SANDEEP V. MARNE, J.] [CHIEF JUSTICE]
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2025.08.19
16:31:46
+0530
19 August 2025
