Bombay High Court
M/S. Devagirikar Industries Pvt. Ltd, ... vs Maharashtra Industrial Development ... on 25 March, 2025
Author: A.S. Chandurkar
Bench: A. S. Chandurkar
2025:BHC-AS:13694-DB
RAMESHWAR
LAXMAN
DILWALE 1 WP-9866-2014.doc
Digitally signed by
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
RAMESHWAR CIVIL APPELLATE JURISDICTION
LAXMAN DILWALE
Date: 2025.03.25
17:11:35 +0530 WRIT PETITION NO. 9866 OF 2014
M/s Devagirikar Industries Pvt. Ltd. )
Plot No.26, D-III Block, MIDC, Chinchwad, )
Pune-411019 representing through its )
Managing Director Mr. Venkatesh P. Devagirikar ) ... Petitioner
V/s
1] Maharashtra Industrial Development)
Corporation, )
'Udyogsarthi' Mahakali Caves Road, Marol Indl. )
Area Andheri (E), Mumbai )
)
2] The Regional Officer, )
Maharashtra Industrial Development Corporation, )
having its office at Jog Centre, Wakadewadi, )
Pune - 411003 )
)
3] The Principal Secretary, )
Industries, Energy & Labour Department )
Government of Maharashtra, Mantralaya, )
Mumbai -400 032. )
) ....Respondents
4] The State of Maharashtra )
Mr. Pralhad Paranjape a/w Mr. Rahul Punjabi & Mr. Yash Tembe,
Advocates for the petitioner.
Ms. Shyamali Gadre, Advocate i/b Little & Co. for respondent no.1 -
MIDC.
Mr. N.C. Walimbe, Additional Government Pleader a/w Mrs Reena A.
Salunkhe, Assistant Government Pleader for respondent nos. 3 and 4.
****
CORAM : A. S. CHANDURKAR &
RAJESH S. PATIL, JJ.
Date on which the arguments were heard : 17/12/2024
Date on which the judgment is pronounced : 25/03/2025
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JUDGMENT:
(Per A.S. Chandurkar, J.)
1] The petitioner, a private entity is a lessee of the Maharashtra
Industrial Development Corporation - MIDC having been granted a
lease for a period of 95 years in respect of an industrial plot of land
being Plot No.26, D-III Block, MIDC Chinchwad. It has approached this
Court by filing the present writ petition and seeks the following reliefs:-
"(b) That this Hon'ble Court be pleased to issue a
writ of mandamus or a writ in the nature of
mandamus or any other appropriate writ order or
direction under Article 226 of the Constitution of
India directing the Respondent to enter into an
Agreement of Lease for a Plot No.F-II-52/3
admeasuring 1387 sq. mtrs at Pimpri for a plot at the
rate of 7700/- per sq. mtrs And refund the excess
amount to the Petitioner;"
"(c) To hold and declare that the possession of the
plot handed over to the petitioner should be
reckoned from the date the agreement of Lease is
entered into with the Petitioner."
"(C1) To quash and set-aside the demand letter
dated 26 June 2019 sent/issued by the Respondent
No.1 & 2 asking the Petitioner to make good the
amount of Rs 1,16,36,236/- for delay of Petitioner in
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developing the plot from 2014-2020."
2] It is the case of the petitioner that it was undertaking engineering
activities on Plot No.26, MIDC, Chinchwad. It sought to expand its
activities and hence on 03/03/2011, it applied for allotment of Plot
No.52/3-F-II Block admeasuring about 1387 square meters. Pursuant to
a meeting of the Land Allotment Committee on 24/08/2011 its
application was scrutinized and the said Committee decided to allot Plot
No.52/3 to the petitioner subject to conditions laid down in MIDC
Circular dated 18/03/2008 for expansion of its Unit. The MIDC issued
an offer letter to the petitioner on 05/10/2011 stating therein that the
rate of premium payable for the land to be allotted was Rs 8,251/- plus
additional 10% of the said amount, thus totalling Rs 9,077/- per square
meter. The petitioner was called upon to submit its duly completed
application alongwith Demand Draft of Rs 62,94,900/-towards the
earnest amount within a period of fifteen days. The petitioner on
20/10/2011 submitted a Demand Draft for the aforesaid amount to the
MIDC alongwith the requisite "Blue Application" duly filled-in. On the
aforesaid basis, the MIDC on 23/11/2011 issued an order of allotment
in favour of the petitioner subject to various terms and conditions. One
such condition was that the agreement of lease was required to be
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signed within a period of thirty days from receiving the balance
occupancy premium amount. This amount was to be paid by the
petitioner within a period of thirty days from the date of receipt of the
order of allotment. Another condition was that the petitioner was
required to commence production within a period of two years from the
date of possession with a stipulation that no further extension would be
granted. On 18/04/2012, the MIDC issued a communication to the
petitioner stating therein that in terms of the order of allotment the
balance consideration was to be paid within a period of thirty days of
receiving the order of allotment. This amount was however not
deposited. The petitioner was thus called upon to deposit the balance
amount by 15/05/2012.
3] The petitioner on 20/04/2012 preferred an appeal before the
Joint Chief Executive Officer, MIDC raising a grievance that the
premium charged ought to have been at the rate of Rs 7,700/- per
square meter and not Rs 9,077/- per square meter. It sought to rely
upon the Circular dated 18/03/2008 in that regard. On 03/05/2012,
the MIDC informed the petitioner that the last date for depositing the
balance amount was 21/05/2012. Accordingly, on 21/05/2012 the
petitioner deposited an amount of Rs 68,66,400/- with the MIDC.
There being delay of about one hundred and fifty days in depositing the
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balance amount, the MIDC on 23/05/2012 called upon the petitioner
to pay interest of Rs 4,30,330/- at the rate of Rs 15.25% . This amount
was corrected to Rs 4,79,710/- on 01/06/2012. The petitioner
accordingly deposited the aforesaid amount on 21/07/2012. The
petitioner on 07/10/2012 issued a communication to the MIDC seeking
clarification as regards the amount of premium charged from it. On
27/11/2012 the MIDC called upon the petitioner to take possession of
Plot No.52/3 on 06/12/2012. On such possession being taken, a
possession receipt was executed on the said date. The petitioner
thereafter on 10/10/2013 submitted a further proposal for approval of
its plans to the Executive Engineer, MIDC. On 17/10/2013, the MIDC
called upon the petitioner to submit various documents including the
lease agreement. Since the lease agreement was not submitted, the
proposal of the petitioner came to be rejected on 13/11/2013. It
appears that the petitioner in the meanwhile approached the State
Consumer Disputes Redressal Commission by filing a complaint under
the provisions of the Consumer Protection Act, 1986. The complaint
was however withdrawn and the petitioner thereafter has filed this writ
petition.
4] By an order dated 01/08/2018, this Court passed an interim
order directing the MIDC to execute agreement of lease in favour of the
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petitioner by incorporating relevant clauses therein. It was further
directed that after execution of the lease agreement, it would be open
for the petitioner to complete the necessary formalities and seek
sanction of its plans. On the aforesaid basis the agreement of lease
came to be ultimately executed on 20/09/2021. However, in the
meanwhile on 26/06/2019, the MIDC issued a demand note to the
petitioner calling upon it to pay a total amount of Rs 1,16,36,236/-
towards the development charges with penalty. By amending the writ
petition, this communication has been put to challenge.
5] Mr. Pralhad Paranjape, learned counsel appearing for the
petitioner submitted that the petitioner was holding Plot No.26, D-III
Block and had sought to expand its engineering activities. Its
application for seeking allotment of another plot had been favourably
considered by the Land Allotment Committee. In terms of the
expansion policy Circular dated 18/03/2008, it was incumbent upon
the MIDC to apply the prevailing land rate of the industrial area with
10% additional charges for the plot allotted to the petitioner. Being the
only applicant for Plot No.52/3, F-II Block, the petitioner was liable to
pay the prevailing land rate of Rs 7000/- per square meter with 10%
additional charge being Rs 700 and 5% road width charge being Rs
350/-. Thus the petitioner was liable to be charged Rs 8050/- per
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square meter and not Rs 9077/- per square meter as per the offer letter
dated 05/10/2011 and thereafter Rs 9489/- per square meter as per the
subsequent offer letter dated 23/11/2011. Both the offer letters were
contrary to the expansion policy Circular dated 18/03/2008, the Board
decision of the MIDC dated 18/04/2011 and the decision of the Land
Allotment Committee dated 24/08/2011. The MIDC had thus acted
arbitrarily in the matter and had sought to demand higher premium
from the petitioner. Various representations made by the petitioner
were not considered resulting in delay in finalising the premium rates.
It was further submitted that the MIDC failed to enter into the
agreement of lease without any justifiable reason. It was incumbent
upon the MIDC to have called upon the petitioner to have the
agreement of lease executed but no steps in that regard were taken by
the MIDC. It was only on 06/12/2012 that the petitioner was put in
possession. It was further submitted that even after the petitioner
approached the High Court and order dated 30/03/2016 was passed in
the writ petition, the agreement of lease was not entered into. It was
only pursuant to the Court's order dated 01/08/2018 that the
agreement of lease was executed. The subsequent demand raised on
26/06/2019 for an amount of Rs 1,16,36,236/- was also unjust and
arbitrary as the MIDC sought to recover extension charges for the
period from 2014 to 2020 for no justifiable reason. There was no legal
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basis for the MIDC to demand such exorbitant amount. As a result,
grave prejudice as well as financial loss was caused to the petitioner.
Relying upon the decisions in Tata Iron and Steel Company Limited and
Another vs. State of Bihar and Others, (2018) 12 SCC 107, Sharayu
Ashok Gokhale and others vs. Nagpur Municipal Corporation, Nagpur
and others, 2022 (5) ABR 320 and Ramon Distilleries Ltd vs. State of
Maharashtra and Another, 2022 SCC OnLine Bom 11766, it was
submitted that the impugned demand was liable to be quashed as it was
without any legal basis.
On the stand taken by the MIDC that disputed questions were
involved, it was submitted that there was no such dispute on facts.
Since the MIDC was a State entity, the writ petition as filed was liable to
be entertained on merits and the prayers as made ought to be granted.
6] Ms. Shyamali Gadre, learned counsel appearing for the MIDC
relied upon the affidavit-in-reply and opposed the writ petition. She
submitted that the petitioner was an existing lessee of the MIDC and
hence had full knowledge of the policies and Circulars issued by the
MIDC. The demand of premium was made from the petitioner on the
basis of expansion Circular dated 18/03/2008. Since the highest bid
received by the MIDC was at the rate of Rs 8251/- per square meter, the
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same was taken into consideration for determining the amount of
premium payable by the petitioner. The MIDC had acted in accordance
with the offer letter dated 05/10/2011 given to the petitioner. If the
terms mentioned in the offer letter were not acceptable to the
petitioner, it could have refused the allotment. It was further submitted
that the petitioner accepted allotment of Plot No.52/3, F-II Block
without any protest. Hence the terms of the offer letter were binding
on the petitioner. The time limit to complete the construction and also
execute the agreement to lease had been stated in the allotment letter
dated 23/11/2011. The petitioner failed to abide by the time frame
stated therein. Possession of the said plot was also accepted and hence
it was not permissible for the petitioner to thereafter contend that
higher rate of premium was being claimed by the MIDC. It was only
after the building plans submitted by the petitioner were rejected by the
MIDC due to non-submission of an agreement to lease that the
petitioner approached this Court. There was considerable delay in
doing so and hence no discretionary relief be granted to the petitioner.
It was thus submitted that the parties were governed by the terms of the
contract entered into and as those terms were unconditionally accepted
by the petitioner, no relief could be granted to it. To substantiate her
contentions, the learned counsel placed reliance on the decisions in
Suganmal vs. State of Madhya Pradesh and others , AIR 1965 SC 1740,
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Union of India & Others vs. M/s Bhim Sen Walaiti Ram , [1970] 2 S.C.R.
594, Jawahar Lal Burman vs. Union of India , 1961 3 S.C.R. 769,
Punjab National Bank and Others vs. Atmanand Singh and Others ,
(2020) 6 SCC 256 and the judgment of the Supreme Court dated
21/11/2001 in Appeal (Civil) No.7932 of 2001 ( State of Bihar and
Others vs. Jain Plastics and Chemicals Limited ). It was thus submitted
that there was no merit in the writ petition and it was liable to be
dismissed.
7] We have heard the learned counsel for the parties at length and
with their assistance we have perused the documents on record. At the
outset, it may be stated that the petitioner seeks to rely upon the offer
of allotment of Plot No.52/3 which it had sought for expansion of its
engineering activities. The relations between the parties are thus
contractual in nature and keeping the said aspect in mind the
entitlement of the petitioner to the reliefs sought in the writ petition
would be required to be adjudicated. It is not in dispute that pursuant
to the petitioner's application seeking allotment of Plot No.52/3, a
decision to allot the said plot to the petitioner as per the Circular dated
18/03/2008 was taken on 02/09/2011. The petitioner was issued an
offer letter dated 05/10/2011. The rate of premium to be paid by the
petitioner was clearly indicated as Rs 9077/- per square meter. Various
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other terms and conditions were mentioned therein. It is not in dispute
that the petitioner in accordance with the offer had paid an amount of
Rs 62,94,900/- towards the earnest money and had also enclosed its
"Blue Application". This would indicate that the rate at which the offer
was made by the MIDC came to be accepted alongwith other terms and
conditions mentioned therein. As regards payment of the balance
amount, the petitioner did not abide by the time frame as indicated
therein. Hence, the MIDC called upon the petitioner to pay the balance
amount by its communication dated 10/04/2012. It is at that stage that
the petitioner sought to raise a grievance with regard to the rate of
premium charged from it. The MIDC however on 03/05/2012 informed
the petitioner that the last date for paying the balance consideration
was 21/05/2012. On that date, the petitioner deposited an amount of
Rs 68,66,400/-. Though it was urged on behalf of the petitioner that
this deposit was without prejudice to the grievance raised by it in
respect of the rate of premium, the covering letter issued by the
petitioner on 21/05/2012 alongwith the Demand Draft for sum of Rs
68,66,400/- does not indicate the same. It thus becomes evident that
even this amount was deposited by the petitioner without protest.
Thereafter, the petitioner was called upon to pay the interest of a sum of
Rs 4,79,710/- on account of delay of about one hundred and fifty days
in paying the balance amount. On 21/07/2012, the petitioner paid a
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sum of Rs 4,79,710/- without indicating that it was under protest. It is
only for the first time on 07/10/2012 that the petitioner has stated in
its communication that the earlier amounts were deposited under the
protest. In absence of any protest whatsoever being raised while
making such payment, the protest raised on 07/10/2012 after about
five months from making such payment appears to be an afterthought.
We therefore find from the conduct of the petitioner that it
accepted the allotment of the plot in question for the amount of
premium of Rs 9077/- per square meter as stated in the offer letter
dated 05/10/2011 and made the entire payment on that basis. In these
facts therefore we do not find that it would be open for the petitioner to
re-open the issue with regard to the rate of premium charged by the
MIDC from it. Hence no relief can be granted to the petitioner in this
regard.
8] Coming to the challenge as raised to the demand letter dated
26/06/2019 calling upon the petitioner to pay an amount of Rs
1,16,36,236/- on account of delay in developing the plot allotted for the
period from 2014 to 2020, certain factual aspects are required to be
borne in mind. Pursuant to the offer letter issued by the MIDC on
05/10/2011, the earnest amount of Rs 62,94,900/- was paid by the
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petitioner on 20/10/2011. The balance amount of Rs 68,66,400/- came
to be deposited by the petitioner on 21/05/2012. On account of such
delayed deposit, the MIDC called upon the petitioner to pay interest of
an amount of Rs 4,79,710/- which was paid by the petitioner on
21/07/2012. It is thus clear that the entire amount of premium
towards allotment of Plot No.52/3, F-II Block was paid by the petitioner
by 21/07/2012.
In accordance with the offer of allotment dated 05/10/2011, the
MIDC was required to enter into the lease agreement. Same was
however not executed. On 06/12/2012 the petitioner obtained
possession of the plot in question and executed a possession receipt in
that regard. The plans submitted by the petitioner on 10/10/2013
seeking approval to the construction sought to be undertaken came to
be rejected on 13/11/2013 on the ground that the lease agreement was
not executed. In the aforesaid factual backdrop, the petitioner
approached this Court by filing the present writ petition. On
30/03/2016, an interim order was passed directing the MIDC to
consider the petitioner's proposal in the matter of seeking sanction.
Thereafter, on 01/08/2018 a further order was passed in the writ
petition noting that the petitioner had already deposited the lease
premium with the MIDC and that despite such deposit in terms of the
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demand made by the MIDC, the agreement of lease had not been
executed due to pendency of the present writ petition. It was thus
observed that as the petitioner had deposited the lease premium as
computed by the MIDC, there was no impediment for the MIDC to enter
into the lease agreement subject to making appropriate provisions in the
lease deed. A direction was thus issued to the MIDC to execute the
agreement of lease in favour of the petitioner after which the petitioner
could comply with the necessary formalities for seeking sanction of the
plans. The agreement of lease was to be executed within a period of
four weeks from the date the petitioner approached the MIDC.
9] Accordingly, on 28/08/2018 the petitioner approached the MIDC
seeking execution of the agreement of lease. Since there was no
response to the petitioner's request, a reminder was issued on
27/11/2018 to the MIDC. On 01/01/2019 the Regional Manager,
MIDC informed the petitioner that after receiving necessary instructions
from the Head Office, the lease agreement would be executed. Since no
further steps were taken by the MIDC, the petitioner filed Contempt
Petition No.470 of 2019 raising a grievance that the order dated
01/08/2018 passed in the writ petition had not been complied with.
Instead of executing the agreement of lease, the MIDC issued the
impugned communication dated 26/06/2019 calling upon the
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petitioner to pay development charges of Rs 1,16,36,236/- on account
of delay in commencing such development. Thereafter on 24/02/2021
the learned counsel for the MIDC made a statement that the order dated
01/08/2018 directing execution of the agreement of lease would be
complied with by the MIDC within a period of three weeks. It is only
thereafter that on 20/09/2021 was the agreement of lease executed.
From the aforesaid sequence of events, it becomes clear that
despite having paid the entire amount of premium as demanded with
interest by 21/07/2012 and thereafter putting the petitioner in
possession on 06/12/2012, there is no justifiable explanation by the
MIDC for non-execution of the agreement of lease. On account of
absence of the agreement of lease, the development plans submitted by
the petitioner came to be rejected on 13/11/2013. Despite the interim
order passed on 01/08/2018 by which the agreement of lease was to
be executed within a period of four weeks of the petitioner approaching
the MIDC, such agreement was not entered into by the MIDC. It is only
after the order dated 24/02/2021 was passed in the Contempt Petition
that the agreement of lease came to be executed. It is thus clear that no
fault can be found on the part of the petitioner in not having the
agreement of lease executed. The entire amount of premium having
been paid, the MIDC ought to have executed the agreement of lease in
accordance with the offer of allotment. There is no explanation
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forthcoming from the MIDC as to why the agreement of lease was
executed only on 20/09/2021. Issuance of the impugned
communication dated 26/06/2019 demanding further amount from the
petitioner cannot be a justification on the part of the MIDC in not
executing the agreement of lease. It was made clear in the order dated
01/08/2018 that the additional amount claimed by the MIDC would be
subject to adjudication of the present writ petition. We therefore find
from the material on record that the MIDC without any legal
justification failed to execute the agreement of lease in favour of the
petitioner.
10] Having found that the MIDC was responsible for the delay in
execution of the agreement of lease resulting in rejection of the plans
submitted by the petitioner, the demand of development charges from
06/12/2014 till 05/12/2020 in the absence of an agreement of lease
cannot be countenanced. The MIDC refused to approve the plans
submitted by the petitioner as no agreement of lease was entered into.
Despite interim directions given by this Court, the MIDC delayed the
execution of the agreement of lease. The petitioner was required to
invoke the contempt jurisdiction of this Court. Considering these
aspects, in our view, the impugned demand as made in the
communication dated 26/06/2019 does not appear to be justified.
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11] Yet another reason for holding the impugned communication to
be bad in law is that it has been issued in breach of principles of natural
justice. The impugned demand has been issued in response to the
petitioner's communication dated 28/08/2018. This communication
was issued by the petitioner seeking implementation of the interim
direction contained in the order dated 01/08/2018 in the writ petition.
Without granting any opportunity to the petitioner and without
complying with the interim direction, the impugned communication has
been issued. The communication dated 26/06/2019 does not indicate
the basis on which the amount of Rs.1,16,36,236/- has been arrived at.
On this count too, the impugned communication is liable to be quashed
and set aside. We may only observe that if any demand is to be made
from the petitioner, the same has to be done in accordance with law
after giving due opportunity to the petitioner.
12] As a result of the foregoing discussion, we hold as under :-
(i) The petitioner having accepted the offer made
by the MIDC on 05/10/2011 demanding premium
at the rate of Rs 9077/- per square meter, the same
is binding on the petitioner.
(ii) The impugned communication dated
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26/06/2019 issued by the Regional Manager,
MIDC is quashed and set aside. The MIDC
however is at liberty to make a claim against the
petitioner on the basis of the offer letter dated
05/10/2011 and its prevailing Regulations in case
there has been any non-compliance on the part of
the petitioner. In case any such claim is made, the
observations made/findings recorded hereinabove
shall be borne in mind.
13] Rule is made partly absolute in the aforesaid terms leaving the
parties to bear their own costs.
(RAJESH S. PATIL, J.) (A. S. CHANDURKAR, J.)
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