M/S Sree Krishna Mutually Aided ... vs Telangana State Industrial ...
2022 Latest Caselaw 4528 Tel

       THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN
                                 AND
       THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY


WRIT APPEAL Nos.1187 of 2018; 481, 484 of 2019 and
                          285 of 2020

COMMON JUDGMENT:         (Per the Hon'ble the Chief Justice Ujjal Bhuyan)



      This judgment will dispose of the four writ appeals.



2.    We have heard Mr. A.Sanjeev Kumar, learned counsel

for   the   appellants    in      W.A.No.1187               of     2018     and

Mr. A.P.Venu Gopal, learned counsel for the appellants in

W.A.Nos.481, 484 of 2019 and 285 of 2020.                           Also heard

Mr. K.V.Simhadri, learned Senior Counsel appearing for

Indian Railway Welfare Organization (IRWO).



3.    All these appeals arise out of the common order dated

04.10.2017 passed by the learned Single Judge dismissing

W.P.Nos.5876 and 7581 of 2004 filed by M/s. Sree Krishna

Mutually Aided Cooperative Society Limited (appellant in

W.A.Nos.481, 484 of 2019 and 285 of 2020), but allowing

W.P.No.17077 of 2005 filed by IRWO.
                                     2




4.    Thus from the above it is seen that as against the

common order disposing of the three writ petitions, one

writ appeal has been filed by the State (Andhra Pradesh

Industrial      Infrastructure       Corporation         Limited,       now

Telangana Industrial Infrastructure Corporation Limited)

(APIIC) and the other three writ appeals have been filed by

M/s. Sree Krishna Mutually Aided Co-operative Housing

Society Limited (hereinafter referred to as, "the Society").



5.   Facts

leading to filing of the three writ petitions were

summed up by the learned Single Judge in the following

manner:

The Andhra Pradesh Industrial Infrastructure Corporation Limited (for short "APIIC"), initially, on the request of M/s.Sree Krishna Mutually Aided Co-

operative Housing Society Limited (for short "the Society"), petitioners in WP Nos.5876 & 7581 of 2004, vide letter, dated 13.03.2003, has allotted an extent of 5.40 acres of land at IDA, Cherlapally Phase-II for purpose of construction of houses for its members, @Rs.500/- per square meter, subject to the condition that the members of the Society should have an industrial unit at IDA, Charlapally, and directed to pay the sale consideration of Rs.109.24 lakhs within 90

days. The Society made three representations to the APIIC on 28.05.2003, 18.07.2003 and 03.02.2004 duly making part payment of Rs.25.00 lakhs and requested APIIC to reduce the land cost, in view of 40% of land would go towards roads and would be kept unutilized for residential plots, but the same was not considered by APIIC. Further, APIIC, vide letter dated 12.03.2004 cancelled the allotment made in favour of the Society on the ground that the Society failed to fulfill the conditions stipulated in letter dated 24.04.2003. Challenging the said cancellation order, the Society filed W.P.No.5876 of 2004. At the stage of admission of the writ petition, this Court granted interim order of status quo.

3. In the meanwhile, APIIC, vide letters dated 20.03.2004 & 06.04.2004 allotted the same land of an extent of Ac.5.40 gts in favour of the Indian Railway Welfare Organization (for short "IRWO") for an amount of Rs.1,99,26,361/-. Questioning the said allotment, the Society filed W.P.No.7581 of 2004 and in that writ petition also, this Court granted interim order of status quo.

4. The Indian Railway Welfare Organization, New Delhi filed W.P.No.17077 of 2005, stating that on their request, the APIIC allotted land of an extent of Ac.5.40 gts for construction of houses for railway men both for serving as well as retired on outright sale basis for an amount of Rs.1,99,26,461/- and in terms of the allotment letters, dated 20.03.2004 and 06.04.2004, the IRWO paid the entire sale consideration, as agreed. But surprisingly, vide letter dated 06.06.2005, the APIIC cancelled the said allotment without assigning any

reasons and refunded the amount. Questioning the said cancellation proceedings, the IRWO filed the writ petition."

6. All the three writ petitions were contested by the

APIIC by filing counter affidavits.

7. Learned Single Judge vide order dated 17.09.2014

had allowed W.P.No.17077 of 2005 filed by IRWO by

setting aside the cancellation of allotment order in favour of

IRWO. On the same day i.e., on 17.09.2014 the two writ

petitions i.e. W.P.Nos.5876 and 7581 of 2004 filed by the

Society were dismissed. The Society thereafter preferred

appeals, being W.A.No.1442, 1454 and 1480 of 2014,

raising a technical plea that on the date of passing orders

in the writ petitions, there was bifurcation of the composite

state of Andhra Pradesh. Therefore, APIIC had no interest

in the matter. Instead, the competent authority was the

Telangana State Industrial Infrastructure Corporation

Limited. The appeals were allowed by the appellate Court

whereafter the writ petitions were remanded for

adjudication afresh.

8. On remand, learned Single Judge framed the

following two points for consideration:

"1) Whether the action of the Industrial Infrastructure Corporation in firstly allotting the land to M/s.Sree Krishna Mutually Aided Cooperative Society Limited on 13.03.2003 and subsequently cancelling the same on 12.03.2004 on the ground that the society failed to adhere to the terms and conditions of the allotment letter in not making the payment within the stipulated time and allotting the same land to the Indian Railway Welfare Organization (IRWO) is justified? and

2) Whether the allotment of the land to IRWO on 20.03.2004 and subsequently cancelling the same on 06.06.2005 is liable to be set aside since it is cancelled without assigning any reason or giving any show cause notice?"

9. As would be evident from the above, the first issue for

consideration was whether APIIC was justified in first

allotting the land to the Society on 13.03.2003 and

thereafter cancelling the same on 12.03.2004 on the

ground that the said Society had failed to adhere to the

terms and conditions of allotment. Corollary to the above

issue as framed by the learned Single Judge was whether

after cancelling the allotment to the Society, the appellant

was justified in allotting the same plot of land to IRWO.

After a detailed analysis of facts, learned Single Judge held

as follows:

"19. A perusal of the above facts clearly show that the petitioner/society has violated the terms and conditions of the allotment not only in the matter of payment of the cost of the land within the stipulated time but also the other conditions imposed in the letter of allotment.

20. The competence, authority and right of the respondent/Corporation to cancel the allotment if the terms and conditions are not complied with within the stipulated time is well settled. There are catena of authorities which lay down that the allotment can be cancelled if the allottee fails to comply with the terms and conditions."

10. After referring to various case laws, learned Single

Judge took the view that if the allottee fails to comply with

the terms and conditions of allotment, the allotting

authority would be competent to cancel the allotment. It

was held as follows:

"25. The above authorities which have direct bearing to the facts of the case in hand clearly laid down that if the allottee fails to comply with the terms and conditions of the allotment letter, the

respondent/Corporation is competent to cancel the allotment which cannot be challenged.

26. In the instant case, as already stated, the land was alslotted to the petitioner/society on 24.04.2003 and for nearly ten months instead of making the payment of about Rs.1.10 crores, the petitioner/society requested the Corporation to reduce the cost of land and started negotiations and bargaining on the grounds which were not open to them. Inspite of the request being rejected by the Corporation and society being called upon to fulfil the terms and conditions of the allotment letter, the petitioner/society has once again reiterated their previous request by offering a different rate per square meter as against the rate fixed by the Corporation. Therefore, the impugned order cancelling the allotment in favour of the petitioners/society cannot be interfered with.

27.    Once        the      cancellation         made     by    the
respondent/Corporation               in        favour     of    the

petitioner/society is held to be valid, they cannot question the allotment of the self-same land to another organization as has been done in the instant case. After cancelling the allotment in favour of the petitioner/society, the respondent/Corporation allotted the same land to IRWO for a total consideration of about Rs.1.99 crores, which was also subsequently cancelled and which is the subject matter of W.P.No.17077 of 2005. In view of the above, there are no merits in the writ petitions filed by the petitioner/society and

therefore W.P.Nos.5876 and 7581 of 2004 are liable to be dismissed."

11. Insofar the second issue, namely whether allotment

of land to IRWO on 20.03.2004 and subsequent

cancellation of the same on 06.06.2005 without assigning

any reason or giving any show cause notice was justified,

learned Single Judge noted that from the year 2002, IRWO

was requesting for allotment of land in Survey No.184

which was abutting the land that was allotted to IRWO

where they had already constructed 151 dwelling units for

the benefit of in-service and retired employees of Indian

Railways. Since there was more demand for house sites,

IRWO was requesting the State Government/APIIC to allot

more land for construction of additional dwelling units.

After cancelling the allotment in favour of the Society,

APIIC allotted the said land to IRWO on 20.03.2004. Cost

of the land was determined at Rs.1,80,29,385.00 at the

rate of Rs.825.00 per square metre. Subsequently, on

measurement of the land, the total cost of the land allotted

to IRWO was enhanced to Rs.1,99,26,461.00. Pursuant to

the original allotment letter, IRWO had paid

Rs.1,80,29,385.00 to the APIIC within ten days of the

allotment. When the additional amount was demanded on

06.04.2004, IRWO paid the same on 21.04.2004. Though

IRWO was given ninety days time to pay the amount, it

paid the entire amount including the additional amount

within one month. However, the allotment was abruptly

cancelled on 06.06.2005. Learned Single Judge noted that

no reasons were mentioned in the cancellation order. But

in the counter affidavit, stand taken by APIIC was that it

had taken a policy decision to the effect that vacant land

earmarked for housing in the industrial areas should be

put to industrial use only, in view of the growing demand

for industrial land. Learned Single Judge found as a

matter of fact that no such conditions were incorporated in

the allotment letter dated 20.03.2004. That apart, the

cancellation order was without any reasons. Accordingly,

the order dated 06.06.2005 cancelling the allotment in

favour of IRWO was set aside. Learned Single Judge held

as follows:

"30. As per the terms and conditions of the provisional allotment letter, the allottee was required to pay the

consideration within ninety days but the same was paid within one month. No other terms and conditions of the allotment appeared to have been violated by the petitioner/IRWO.

31. Even though in the order cancelling the allotment, no reasons whatsoever are mentioned but in the detailed counter that is filed by the respondent/Corporation in the writ petition it is stated that the respondent/Corporation has taken a policy decision that the vacant land earmarked for housing in the industrial areas should be put to industrial use only, in view of the growing demand for industrial land. As per the terms and conditions of the allotment letter dated 20.03.2004, no such condition is mentioned that the respondent/Corporation is reserving the right to cancel the allotment on the ground which is mentioned in the counter affidavit.

32. Without issuing any show cause notice, for no reasons, whatsoever, the respondent/Corporation has cancelled the allotment by a cryptic three line letter which is arbitrary and cannot be countenanced. Even though the respondent/Corporation is having authority to cancel the allotment, but the same should be for the reasons to be stated in the order, but it cannot be an arbitrary cancellation. Therefore, the order cancelling the allotment in favour of IRWO, dated 06.06.2005, cannot be sustained and the same is liable to be set aside. The writ petition filed by IRWO is therefore to be allowed."

12. Consequently, the two writ petitions filed by the

Society were dismissed and the writ petition filed by IRWO

was allowed.

13. In the course of the hearing our attention was drawn

to the cancellation letter dated 06.06.2005, which reads as

follows:

"To The Chief Project Manager, Indian Railway Welfare Organisation, South Central Zone, DRM Office Compound, OPP: Rail Nilayam, Secunderabad - 500 071.

Sir, Sub: IDA Cherlapally, PH II - Allotment of Housing land to IRWO - Cancellation Orders issued - Reg.

Ref: 1. LR No.11461/IDA/CHP/2004 DT.20-03-

2004.

2. LR No.11461/IDA/CHP/2004 DT.06-04- 2004.

~O~

With reference to the subject cited, the allotment of 5.40 Acres of land made in favour of M/S. Indian Railway Welfare Organisation at IDA - Cherlapally for construction of Houses is hereby "CANCELLED". The amount paid by you will be refunded in due course."

14. As rightly held by the learned Single Judge no

reasons were assigned in the letter dated 06.06.2005 as to

why allotment made in favour of IRWO was cancelled.

15. When APIIC had allotted land in favour of IRWO,

whereafter IRWO had paid the entire consideration,

including additional consideration, a right had accrued in

favour of IRWO. By the aforesaid letter, such right accrued

in favour of IRWO stood infringed. It was therefore

necessary that the cancellation order was required to be a

speaking order. In other words, the order should speak for

itself containing the reasons as to why cancellation was

resorted to. Instead of doing that, some reasons were

mentioned in the counter affidavit stating that a policy

decision was taken to earmark vacant land to be put to

industrial use only.

16. First and foremost, it is a settled proposition of law

laid down as early as in Commissioner of Police, Bombay

v. Gordhandas Bhanji1, which has been followed by the

Constitution Bench of the Supreme Court in Mohinder

1 AIR 1952 SC 16

Singh Gill v. The Chief Election Commissioner2 that an

order must speak for itself and it cannot be justified by

additional grounds given later in the form of affidavit etc.

17. Second important aspect is that even if such a policy

decision has been taken, it could not have been given

retrospective effect to adversely impact the rights which

had accrued to an allottee in the meanwhile.

18. Regarding cancellation of allotment made to the

earlier allottee i.e., the Society, there is a clear finding of

fact that the Society had not complied with the conditions

of allotment. As against the requirement to deposit more

than a crore of rupees, it had deposited only Rs.25.00

lakhs. Even though more than ten months had elapsed,

no further amounts were paid. Instead, it was found that

the Society was negotiating and bargaining with APIIC to

allow it to pay the entire amount in instalments. Thus the

terms and conditions of allotment were not complied with

by the Society; rightly the allotment was cancelled.

Therefore, on thorough consideration of all aspects of the

2 (1976) 1 SCC 405

matter, we do not find any error or infirmity in the view

taken by the learned Single Judge. Order passed by

the learned Single Judge is a well reasoned one and no

interference is called for.

19. Consequently, all the writ appeals are dismissed.

Miscellaneous applications pending, if any, shall

stand closed. There shall be no order as to costs.

______________________________________ UJJAL BHUYAN, CJ

______________________________________ C.V.BHASKAR REDDY, J 12.09.2022 vs