Binod Kumar Agarwal And Others vs The State Of West Bengal And Others
2022 Latest Caselaw 7441 Cal

M.L.-06
Ct No.09
10.11.2022


                                 (Assigned)

                           WPA No. 2615 of 2021
                            IA No: CAN 1 of 2021

                       Binod Kumar Agarwal and others
                                    Vs.
                      The State of West Bengal and others

             Mr. Sabyasachi Chatterjee,
             Ms. Dona Ghosh,
             Mr. Sandipan Das,
             Mr. Ankur Sharma,
             Mr. Bodrul Karim
                                              .... for the petitioners

             Mr. Chayan Gupta,
             Mr. Sandip Dasgupta,
             Mr. Saaqib Siddiqui,
             Mr. Aviroop Mitra
                                              .... for the WBHIDCO

             Mr. Arunava Ghosh,
             Mr. Atish Dipankar Ray,
             Mr. Asit De,
             Ms. Sanjukta Ray
                                 .... for the respondent nos.8 to 10

The writ petition was heard only on the point

of maintainability. Hence, the merits of the matter

are not entered into at this stage and all the

findings below are prima facie for the purpose of

deciding the question of maintainability.

The respondents plead non-maintainability at

the outset.

Relief B) of the writ petition, it is contended,

concerns a money claim and is not amenable to the

writ jurisdiction.

Secondly, the petitioners are not parties to the

development agreement on which they heavily rely,

hence hit by privity.

The said agreement is not a statutory

agreement; hence, no writ lies for its

implementation.

Fourthly, all the private respondents are

companies having privately elected Boards of

Directors, having no connection with the

Government of West Bengal.

That apart, the petitioners, it is contended,

have failed to demonstrate that not handing over

their flats within the alleged time given amounts to

violation of fundamental rights, namely right to life

under Article 21.

The respondents cite judgments, which have

been discussed later on hereunder, and seek to

distinguish the petitioners' citations.

The petitioners, on the other hand, harp on

the public law element allegedly involved in the

present case to justify the invocation of the writ

jurisdiction. It is submitted that mere availability

of alternative remedy is not a bar to the exercise of

jurisdiction under Article 226 of the Constitution.

The first decision cited by the petitioners is

Smt. Vrinda Gujarati & Ors. V. Bareilly Development

Authority & Ors., reported at AIR 1997 All 107, in

which a Division Bench of the Allahabad High

Court had interfered in the case of delay

occasioned by the authorities in registering

applications for allotment of houses. However,

there the judicial review had emanated from

contracts which originated from statutes and rules.

The inaction complained of was that of the Bareilly

Development Authority. Although, in the present

case, the HIDCO is also involved, the inaction

complained of is primarily of the Respondent Nos.

8 and 9 which are not statutory bodies, nor are the

agreements statutory contracts. Thus, the said

judgment is not applicable in terms.

The next cited judgment of the petitioners is

LIC of India & Anr. V. Consumer Education &

Research Centre &Ors., reported at (1995) 5 SCC

482, where the Supreme Court contemplated

interference in the writ jurisdiction in state action

in the contractual field. Paying capacity for life

insurance was broadly included within the right to

life and public element was read into it. The said

principle, no doubt, holds true for the present

case, though analogically.

The ratio laid down in W.B. Housing Board &

Ors. v. Brijendra Prasad Gupta &Ors., reported at

(1997) 6 SCC 207, however, pertains to land

acquisition and involves the role of the Housing

Board, which is a statutory authority. Hence, the

ratio laid down therein is not applicable directly to

the present case.

The next citation of the petitioners, being

Urmila Roy & Ors. v. Bengal Peerless Housing

Development Company Limited &Ors. [(2009) 5 SCC

242] relates to the W.B. Housing Board Act, 1972

and is not apt in the facts of the present case,

which is not under the said or any similar statute.

The ratio laid down in the next judgment,

Whirlpool Corporation v. Registrar of Trade Marks,

Mumbai &Ors. [(1998) 8 SCC 1] is broadly

applicable in the sense that the existence of

alternative remedy is not an absolute bar in several

circumstances.

Magadh Sugar & Energy Ltd. V. State of Bihar

&Ors., reported at 2021 SCC OnLine 801,

encapsulates the principles of law governing

interference in the writ jurisdiction. Exceptions to

the rule of alternate remedy have been discussed

there and it has also been reiterated that an

alternate remedy by itself does not divest the High

Court of its powers under Article 226 of the

Constitution. The discussions below would go on to

clarify that the broad principles laid down therein,

for interference in judicial review under Article

226, are met in the instant case. The scope and

gamut of the present writ petition is not restricted

to private contractual relief but relates to a public

purpose as well.

Keeping in mind the above propositions, the

facts of this case are as follows:

The cause of action of the present writ petition

is comprised of a sequence of events and

agreements. The first is a development agreement

dated March 7, 2007 entered into between the

West Bengal Housing Infrastructure Development

Corporation Limited (for short, "the HIDCO"),

which is a Government of West Bengal Company

and Shapoorji Pallonji and Company Limited (in

brief, "the SPCL"), a public company not being an

instrumentality of the State.

The salient clauses of the same are to be

examined for the present purpose, since the said

agreement is the genesis of the entire sequence of

events.

The very first clause in the recital declares

that the Government of West Bengal, through the

HIDCO, has decided to undertake a large scale

construction of Housing Complex in order to

address the housing problem in Kolkata by

implementation of a Mass Housing Scheme in the

New Town, Kolkata.

With this end in view, the HIDCO had invited

Detailed Expressions of Interest (DEOI) for

construction of dwelling units for low income group

and middle income group along with physical and

social amenities. The HIDCO shall provide

peripheral services including approach road,

drinking water supply, street lighting, storm water

drainage and sewerage etc. and may also facilitate

for providing required power supply.

Clause 4 of the agreement provides that the

project was to be implemented, phase-wise, in all

respects within four years from the date of handing

over land to the Developer or from the date of

sanction of the plan, whichever is later.

Clause 5 iterates that SPCL was selected for

being awarded with the sole responsibility of

developing the Mass Housing Scheme in the New

Town, which was subject to the terms and

conditions of the Letter of Allotment.

Pursuant to the application of the SPCL, it

was allotted the residential plot for development

and construction of dwelling units for LIG and MIG

for implementation of Mass Housing Scheme.

HIDCO's obligations are stated in Clause 5,

sub-clause (a) of which provides, in no uncertain

terms, that until the completion of Mass Housing

Project, the possession of the said land by SPCL

shall not be exclusive but jointly with HIDCO.

Sub-clause (g) provides that the HIDCO is not

only to provide phase- wise peripheral services

including approach road, water supply, etc. but

also may engage a competent Project Management

Engineering Firm at its own costs for monitoring

and supervision of the project work.

Importantly, Clause 6 (C) of the agreement

provides, among other things, that if the

construction of the Scheme is not completed and

handed over to the successful allottee within four

years, SPCL shall be held liable to compensate

suitably HIDCO and the allottees of the flats "as

may be decided upon".

Clause 7 (f) provides that SPCL shall be

entitled to execute conveyance deeds for and on

behalf of HIDCO, although SPCL would retain the

sale proceeds after payment of the consideration

amount to HIDCO.

Clause 8 throws further light in this regard.

According to it, the HIDCO shall be entitled from

time to time to make reasonable inspection of all

the works, other records of SPCL regarding

implementation of the dwelling units including

common amenities in Mass Housing Plot and give

such directions and instructions in respect thereof

to SPCL as may be deemed necessary. Further, in

case HIDCO finds any wilful gross default on the

part of SPCL, HIDCO shall be entitled to give such

directions as it may deem fit and proper and SPCL

will comply and/or implement the same to that

extent.

Clause 11 (a) stipulates that SPCL will allocate

land in the project area as per the Scheme

approved by HIDCO with regard to the social

facilities like school, market, hospital, etc. as

described in the Fourth Schedule to the agreement.

In case of disputes, Clause 13 speaks of

arbitration before the Secretary, Housing

Department, Government of West Bengal or any

person nominated by him.

In a word, the entire agreement speaks of

SPCL to act as the developer/agent of HIDCO for

the specific purpose of implementing the

Government scheme of providing affordable

housing to the LIG and MIG people.

The argument of privity of contract between

the SPCL and the HIDCO is neither here nor there,

since the agreement between them clearly reflects

the very purpose of the agreement to be

implementation of the Government scheme to

provide housing to the Lower Income Group and

Middle Income Group sections of West Bengal.

The clauses thereof, as discussed above, are

sufficiently germane to elucidate that the very

purpose of the project is in public interest.

The above clauses clearly show that the

control and liability of the HIDCO, including

possession of the land, is retained till the end of

the project, which can only culminate in its

natural course upon handing over of the houses to

the target group of allottees.

The respondents seek to highlight the

commercial aspect of the transaction between the

respective allottees (including the petitioners) and

the SPCL. However, the public element in the

purpose of the entire project overshadows the

monetary transactions. It is absurd to suggest that

all public projects are free. Even providing

housing, which is a basic and integral component

of the right to life guaranteed by the Constitution

of India, at reasonable rates to low and middle-

income groups is evidently a project in public

interest.

The SPCL merely acts as an agent of the

Government, through the HIDCO (which is a

Government Company) to implement the

Government's task of providing housing at

affordable rates to disadvantaged strata of society.

The transaction may be commercially viable

from the point of view of the SPCL, inasmuch as it

gets to retain the sale proceeds, but such

ingredient simpliciter cannot confer a commercial

hue to the public project.

The counter to the privity argument also finds

shape in Clause 6 (C), which stipulates, as one of

the obligations of the SPCL, that if the

construction of Mass Housing Scheme is not

completed and handed overto the successful

allottees within the said four years' time, SPCL

shall be liable to compensate suitably HIDCO

and allottees of the flats as may be decided

upon.

Thus, the writ petitioners' rights to get timely

possession of the flats, in the capacity of finalized

allottees of the scheme/project, in the alternative,

suitable compensation from the SPCL after the

stipulated four years, flow from the Development

Agreement dated March 7, 2007 itself, despite the

individual allottees not being signatories thereto.

The entire authority of the SPCL flows from

the project and the development agreement, as

amended till date, which, in turn, is necessitated

by and directed towards providing affordable

housing to sustain the lives of citizens, which is

obviously a function of the Welfare State, that

India is as per her Constitution. The Bengal

Shapoorji Housing Development Private Limited (or

"the BSHDPL") is at best an instrumentality in the

entire chain of events leading to the writ petition,

being a sub-agent of the SPCL.

The 'Sukhobrishti' project floated by the SPCL

and the deeds/agreements entered into between

the individual allottees (including the petitioners)

and the SPCL, thus, are a sequel to the

development agreement between SPCL and the

HIDCO, which cannot be interpreted in isolation to

invoke privity as a bar to the writ. The contract

between the allottees and the SPCL are not

statutory contracts. However, the entire housing

project, of which the individual contracts are

components, definitely involves a public law

element.

Inasmuch as the West Bengal Housing Board

Act, 1972 is concerned, the same is not attracted

in the present case, nor is the SPCL a joint

enterprise with the Government. Nevertheless, the

public law element involved in the scheme under

consideration cannot be brushed aside.

The allottees admittedly belong to the lower

and middle-income groups and evidently have

much at stake since a substantial chunk of their

savings and income must have gone into the mass

housing project, in the hope of having homes to

call their own. The inordinate delay even prior to

and after the pandemic lockdown apparently

occasioned by the SPCL and its instrumentalities,

at least prima facie, indicate serious abuse of

resources meant for public housing and translate

to increasing costs for all concerned.

There is no dispute as to interpretation of the

terms of the relevant agreements, nor are there any

serious disputed questions of fact of complex

nature requiring oral evidence to prima facie

observe that there has been a gross dereliction of

duty on the part of the HIDCO in not ensuring that

the mass housing project is completed within

reasonable time. The HIDCO retains joint

possession with the SPCL as per their mutual

development agreement and, as per its clauses,

both the HIDCO and the allottees are entitled to

compensation from the SPCL for not completing

the project in time.

Coming to the decisions relied on by the

respondents, the legal tests laid down in Joshi

Technologies International Inc. v. Union of India &

Ors., reported at (2015) 7 SCC 728, for interference

under Article 226 of the Constitution are, thus,

satisfied in the present case.

In Eastern Coalfields Limited v. Ravi Udyog &

Ors. [1994 Supp (2) SCC 466], a money claim was

made, for which the Supreme Court remanded the

matter to the High Court, directing the writ

petition to be treated as a plaint. No proposition of

law relevant to the present case has been laid

down in the said case.

The third decision cited by the respondents,

being Pimpri Chinchwad Municipal Corporation &

Ors. v. Gayatri Construction Company & Anr.

[(2008) 8 SCC 172], reiterates the proposition that

private contracts between parties are governed by

the Contract Act, which is a matter either for

arbitration or for the civil court. However, in view

of the public law element involved in the instant

lis, the said ratio is inapplicable here.

The question raised in the present writ

petition is not restricted merely to interpretation or

implementation of a private contract but covers a

broader spectrum inasmuch as the alleged

dereliction of the public duty cast on the HIDCO

and SPCL, as its agent in the public scheme, in

implementing the mass housing project meant for

LIG and MIG cross-sections of society is

concerned. The public element and the entire chain

of events giving rise to the cause of action here

relate back to the development agreement dated

March 7, 2007, which was to carry out a mass

housing scheme. Hence, the scheme and the said

agreement together form the core of the common

cause of action for all the petitioners.

Inasmuch as the relief B), relating to

compensation package, is concerned, the same is

only an ancillary relief consequential to the main

reliefs sought in the writ petitioner.

In view of the above discussion, the present

writ petition is maintainable in law and its present

form. Thus, the maintainability issue is held in

favour of the petitioners.

As such, the writ petition is required to be

heard on merits and shall be enlisted for final

hearing in the monthly combined list of cases for

January, 2023, to enable the respondents to

challenge this order, if they so choose, in the

meantime.

Urgent server copy of this order be supplied to

the parties upon compliance of all formalities.

(Sabyasachi Bhattacharyya, J.)