Allahabad High Court
Logix Buildwell Private Limited vs State Of U.P. And 3 Others on 11 August, 2022
Author: Pritinker Diwaker
Bench: Pritinker Diwaker, Ashutosh Srivastava
HIGH COURT OF JUDICATURE AT ALLAHABAD A. F. R. Judgment reserved on: 12.05.2022 Judgment delivered on: 11.08.2022 Court No. - 29 Case :- WRIT - C No. - 8923 of 2022 Petitioner :- Logix Buildwell Private Limited Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Prakash Tripathi Counsel for Respondent :- C.S.C.,Anjali Upadhyay, Kaushalendra Nath Singh Hon'ble Pritinker Diwaker, J.
Hon'ble Ashutosh Srivastava,J.
1. The writ petitioner which is a company incorporated and registered under the provisions of the Companies Act, 1956, a group company of the Logix Group of Companies a leading name in the field of real estate development in the National Capital Region of India has approached this Court invoking its extraordinary jurisdiction under Article 226 of the Constitution of India claiming inter-alia the following reliefs:
"i) to issue a writ, order or direction in the nature of certiorari calling the records and quashing the impugned order dated 12.3.2021 passed by respondent No. 3 (Annexure No. 16 to the writ petition).
ii) to issue a writ, order or direction in the nature of mandamus commanding the respondent authority to refund the allotment money of Rs.62,09,59,254/- to the petitioner along with interest @ 14% per annum from the date of deposit till the date of realization."
2. It is contended that in the year 2011 the respondent No. 2 i.e. the New Okhla Industrial Development Authority (hereinafter referred to as the Development Authority) invited sealed tenders in two bid system for allotment of commercial plots on lease for a period of 90 years on as is where is basis. The petitioner submitted its bid under the scheme for allotment of the plot and deposited a sum of Rs. Ten Crores (Rs.10,00,00,000/-) as earnest money. The bid / tender for allotment of commercial Plot No. 4, Block-CC, Sector 32, Scheme No. 2010-11, (Commercial Builders Plot-VI) was accepted the petitioner being the highest bidder @ Rs. 1,11,250 per square meters. The total area of the plot was 50,000 square meter and as such, the total premium of the plot allotted to the petitioner at the rate accepted worked out to Rs.556,25,00,000/-. As per the scheme, the petitioner was required to deposit 10% of the total premium amount of the plot within 90 days of the issuance of the allotment order after adjusting the 10% earnest money already deposited by the petitioner. The balance 90% of the premium was payable in 16 equal half yearly installments. The allotment letter further provided that the lease deed in respect of the plot would be executed within 180 days and the possession of the plot would also be given within 180 days.
3. It is submitted that the petitioner sought extension of time by 120 days under Clause H-1 of the scheme to submit the balance amount of Rs.45,62,50,000/-. The said extension was granted by the respondent / Development Authority vide its letter dated 30.6.2011. However, the authority informed the petitioner that the area allotted to it was in excess of 50,000 square meters and was actually 50,050.75 square meters and as such, the petitioner was liable to pay the excess area premium of Rs.56,45,937.50. The petitioner prayed for further time extension under Clause H (2) for 3 months for the payment of the allotment money and excess area premium which was granted vide letter dated 18.1.2012. The petitioner thereafter deposited the balance allotment money along with interest thereon totaling Rs.51,47,83,377/- as also the excess area premium along with interest totaling Rs.61,75,877/- on 21.1.2012 and requested the respondent / Development Authority to process the papers for the execution of lease and its registration at the earliest. Thereafter, the petitioner requested the Development Authority to issue the check list for land registration vide letters dated 23.1.2012 and 16.3.2012 and again on 6.4.2012. The respondent / Development Authority instead of responding to the request of the petitioner to proceed for executing the lease deed / registration issued a Notice dated 13.6.2012 requiring the petitioner to deposit a sum of Rs.59,02,92,796/- towards the 1st and 2nd installments along with penal interest payable under the allotment letter. The petitioner yet again in response to the demand raised by the respondent / Development Authority informed it about the urgency in getting the lease deed and its registration done as in the absence of the same it was difficult to get the bank loan approvals to initiate the project in time. The petitioner accordingly sought extension of time of six months to pay the installments due. The Development Authority, however, did not respond to the above request of the petitioner and further raised a demand of Rs.92,73,04,316/- being the 1st, 2nd and 3rd installments payable along with penal interest failing which the allotment of the plot would be cancelled. The petitioner was constrained to file Writ Petition (C) No. 4835 of 2013 (Logix Buildwell Pvt. Ltd. versus State of U.P. and others). The writ petition was entertained and an interim order was passed in favour of the petitioner restraining the respondent / Development Authority from creating any third party rights in respect of the plot in question. Even during the pendency of the aforesaid writ petition, the petitioner requested the Development Authority to provide the check list for executing the lease deed, but to no avail.
4. On account of the inaction of the respondent / Development Authority to provide the land to the petitioner, the entire project of the petitioner turned unviable and the petitioner was constrained to amend the writ petition by deleting the prayer for execution of the lease deed and incorporating the prayer for refund of the amount of Rs.62,09,59,254/- along with interest @ 14% per annum from the date of deposit and till the date of realization. During the pendency of the writ petition, the respondent / Development Authority proceeded to pass an order dated 12.3.2021 whereby the plot allotted to the petitioner was cancelled on failure of the petitioner to get the lease deed of the plot executed within 180 days of the issuance of the allotment letter and the entire amount deposited against the plot was forfeited. The petitioner on receipt of the order dated 12.3.2021 prayed for withdrawal of the writ petition No. 4835 of 2013 with liberty to file fresh petition which liberty was duly accorded.
5. It is further contended by the petitioner that the petitioner deposited entire due amount and prayed for execution of the lease deed and its registration within 180 days of the allotment letter, but the respondent Development Authority failed to get the lease deed of the plot executed in favour of the petitioner and never handed over the possession of the plot to the petitioner so that it could carry out it's project. The respondent / Development Authority carried on to demand money from the petitioner without performing the part and ultimately cancelled the plot allotted and also forfeited the money deposited by the petitioner against the plot allotted which cannot be justified and in such circumstances, the petitioner has been constrained to approach this Court by means of the instant writ petition for the reliefs stated here-in-before. The writ petition is liable to be allowed as prayed with cost imposed upon the respondent / Development Authority.
6. At the time of entertaining the writ petition on 7.9.2022, the Court passed the following orders:-
"Sri Prakash Tripathi, learned counsel for the petitioner. Sri Kaushalendra Nath Singh, learned counsel for respondent nos. 2, 3 & 4.
According to the petitioner, the respondent Development Authority had allotted a commercial plot on 28.3.2011 and the petitioner was required to make deposit of requisite allotment money. The petitioner has since deposited the entire allotment money but yet the Development Authority has failed to handover the possession of the plot to the petitioner and has also not executed the lease deed in its favour.
Learned counsel for the petitioner submits that more than 10 years have elapsed but yet the Development Authority has not carried out its responsibility as a result of which the petitioner has suffered heavy financial loss. He submits that had the possession of the plot, in question, been handed over to the petitioner in time and the lease deed could have been executed at the earliest, the petitioner would have achieved its goal.
Further case of the petitioner is that now they are no more interested in the land in question because the project is not viable for the company and therefore, direction be issued to the Development Authority to refund the allotment money to the petitioner along with up to date interest. Further case of the petitioner is that on one hand, the respondent Development Authority has failed to discharge its duties and on the other hand, the order impugned has been passed cancelling its allotment and forfeiting the huge amount deposited.
Sri Kaushalendra Nath Singh, learned counsel for the Development Authority prays for time to seek instructions as to whether the Development Authority is willing to refund the allotment money to the petitioner. Considering this aspect, a week's time is granted to him to seek instructions in the matter.
List on 19 April, 2022.
As an interim measure, effect and operation of the order dated 12.3.2021 (annexure-16 to the writ petition) passed by the respondent no. 3 shall remain stayed till the next date of listing."
7. Shri M. C. Chaturvedi, learned Senior Counsel assisted by Shri Kaushalendra Nath Singh, learned counsel for the respondent / Development Authority has filed counter affidavit. Shri Lalan Sinha and Shri Prakash Tripathi, learned counsels for the petitioner have filed rejoinder affidavit and as such, the pleadings between the parties are complete. With the consent of the parties the writ petition is being finally decided.
8. In the counter affidavit filed by the respondent Nos. 2, 3 and 4 certain clauses highlighting the terms and conditions mentioned in the scheme have been stated which are being reproduced here-under:-
"Clause G-
2. Successful tenders shall be issued allotment letter by registered post. The allotment will have to deposit 10% of the letter tendered amount, after adjustment of earnest money, through bank draft favour of NOIDA PAYABLE at Noida/ New Delhi// within 90 days from the date of issue of allotment letter, through prescribed challan available in the banks mentioned in the allotment letter and submit the copy of the deposited challan (s) In Commercial Department of NOIDA. In case of failure to deposit this amount within time, the allotment will stand cancelled and the entire earnest money deposited shall be forfeited in favour of NOIDA.
3. The allottee shall also deposit due stamp duty (Stamp duty calculation should also be got verified, from the concerned Sub-Registrar, Gautam Budh Nagar by the allottee himself/themselves) for lessee deed in treasury of District/Guatam Budh Nagar and should produce a certificate to that effect in Commercial Department Noida within 180 days from the issue of allotment letter.
H. EXTENSION OF TIME
1. Normally extension or depositing the allotment money shall not be allowed. However on receipt of request from the allottee in within and on being satisfied with the reasons mentioned, the NOIDA may grant a maximum of 120 days extension to deposit reservation/allotment money, subject to the payment of interest @ (11% normal interest + 3% penal interest) per annum compounded half early on pro-rata basis. Thereafter, ordinary no extension of time will be granted and the allotment will be cancelled along with the forfeiture of the earnest money.
2. In exceptional circumstances the time for the payment of balance due amount may be extended the Chief Executive Officer of the Authority.
N. EXECUTION OF LEASE DEED & POSSESSION The allotee will be required to execute the lease deed of the plot within 180 days from the date of issue allotment later. In case of failure to do so, the allotment of plot may be cancelled and 30% of the premium (tendered amount) f the plot may be forfeited. Amount deposited towards the extension charges, interest and other penalties etc. may also be forfeited. However, in exceptional circumstances, the extension of time for the execution of the lease deed and taking over possession may be permitted. The extension will be subject to the payment of charges 5% .p.a. of the total premium of the plot the tendered rate, which will be calculated on day to pay basis. After execution of lease deed the allottee will take over the possession of plot as the date of taking over of physical possession and no plea contrary to this shall be entered.
The cost and expenses of preparation, stamping and registering the legal documents and its copies and all other incidental expenses will be borne by the allotte, who will also pay the stamp duty levied on transfer of immovable property, o any other duty or charge that may be levied by any Authority empowered in this behalf.
X. CANCELATION OF THE LEASE DEED In addition to the other specific clauses relating to cancellation/determination, NOIDA/the lessor, will its be free to right cancellation/determination of the allotment/the lessee of this commercial plot in as of the following:
i. Allotment having been obtained through misrepresentation, by suppression of material facts, false-statement and/or fraud.
ii. Any violation of the directions issued or of the rules and regulation framed by NOIDA or by any other statutory body.
iii. In case of default on the part of tender/allotee/sub lessee(s) or any breach/ violation of the terms and conditions of the tender, allotment, lease and/or non-deposit of the allotment amount, installments or any other dues.
If the allotment is cancelled on the grounds mentioned in para (1) above, the entire amount deposited by the tender, alottee, lessee and sub-lessee (s) till the date of cancelation/ determination, shall be forfeited by NOIDA and no claim, whatsoever, shall be entertained in this regard.
If the allotment is cancelled on the grounds mentioned in paras (ii) or (iii) above, 30% of the total premium of the plot shall be forfeited and the balance, if any, shall be refunded without any interest and no separate notice shall be given in this regard.
After forfeiture of the amount as stated above, possession of the plot will be resumed by NOIDA, along with the structures there upon, if any and the tenderer, allottee, lessee and sub-lessees will have no right to claim any compensation thereon."
9. On the strength of the aforesaid clauses, it is contended that the petitioner was required to deposit the 10% amount within 90 days from the date of issuance of allotment letter else the earnest money would stand forfeited; the petitioner failed to submit the stamp duty certificate which was required to be deposited with the authority within 180 days of the allotment letter; as per Clause-H, the petitioner failed to deposit the amount even after 120 days further time prayed; the petitioner failed to comply and deposit the outstanding amount in terms of the allotment letter and consequently, the authority could not proceed to execute the lease deed; Clause-L sub-clause 2 clearly provided that if the petitioner wanted to surrender the plot, it ought to have done so within 30 days of the allotment and if it chooses to do so now the total amount or 30% of the total premium whichever is less, will be forfeited and remaining amount will be refunded to the petitioner. In the case at hand, the petitioner has deposited only 10% of the allotment money and as such, the entire amount stands forfeited and the petitioner cannot claim refund after 10 years of the allotment.
10. In the rejoinder affidavit, the petitioner denying the averments made in the counter affidavit has submitted that despite repeated requests that the balance allotment money along with interest and excess area premium along with interest had been deposited and a check list be issued, the Authority failed to respond and consequently the lease deed was not got executed and now on account of the fault of the Authority itself, the allotment has been cancelled and the amount deposited has been forfeited. It has been specifically stated that the Authority granted extension of time till January 31st, 2012 subject to deposit of balance allotment money of Rs.45,62,50,000/- along with interest thereon of Rs.6,40,68,210/- and excess premium of Rs.56,45,937.50 along with interest thereon Rs.5,61,261.50. The petitioner deposited the amount vide HDFC Bank Ltd., Challan No. 30056 dated 21.1.2012 and Challan No. 30057 dated 21.1.2012 and requested the respondent authority to execute the lease deed but the authority did not respond.
11. A perusal of the respective stand of the parties, as borne out from their pleadings, reveals that the moot question for consideration of this Court is whether the respondent Noida Authority is justified in cancelling the allotment of plot in favour of the petitioner and forfeiting the entire allotment money to the tune of Rs.62 crores and odd and further requiring the petitioner to hand over the possession of the plot on considering the conduct of the respondent Corporation.
12. Having gone through the facts of the case, pleadings of the parties and perusal of the record, the Court finds that the respondent Authority failed to perform and discharge its reciprocal contractual obligation listed on the anvil of reasonableness and rationality. The Authority blatantly ignored the difficulties faced by a developer such as the petitioner to arrange for the finance after the deposit of the initial bid money/ performance security/allotment money etc., with the Authority. Such finances are usually arranged from banking institutions investors and the market. In the absence of bare minimum requirement of lease registration in favour of the developer arrangement of finances are next to impossible and the entire project of the developer is jeopardized. The Authority has nothing to loose but the developer looses everything i.e., the project and above all his reputation in the market.
13. We find that the respondent Authority is guilty of fulfillment of its contractual obligations inasmuch as it failed to provide the checklist necessary for execution of the lease deed in favour of the petitioner even after the petitioner deposited the entire allotment money. The petitioner legitimately expected the Authority to carry out its obligations in the letter and spirit.
14. The doctrine of legitimate expectations has been judicially recognized by the Apex Court as also by this Court in a catena of judgments. In Noida Entrepreneurs Association versus Noida and others reported in 2011 (6) SCC 508, the Apex Court observed as under:-
"38. The State or the public authority which holds the property for the public or which has been assigned the duty of grant of largesse etc., acts as a trustee and, therefore, has to act fairly and reasonably. Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. Every holder of a public office is a trustee.
40. The Public Trust Doctrine is a part of the law of the land. The doctrine has grown from Article 21 of the Constitution. In essence, the action/order of the State or State instrumentality would stand vitiated if it lacks bona fides, as it would only be a case of colourable exercise of power. The Rule of Law is the foundation of a democratic society. (Vide: M/s. Erusian Equipment & Chemicals Ltd. v. State of West Bengal & Anr., AIR 1975 SC 266;Ramana Dayaram Shetty v. The International Airport Authority of India & Ors., AIR 1979 SC 1628; Haji T.M. Hassan Rawther v. Kerala Financial Corporation, AIR 1988 SC 157; Kumari Shrilekha Vidyarthi etc. etc. v. State of U.P. & Ors., AIR 1991 SC 537; and M.I. Builders Pvt. Ltd. v. Radhey Shyam Sahu & Ors., AIR 1999 SC 2468).
41. Power vested by the State in a Public Authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact-situation of a case. "Public Authorities cannot play fast and loose with the powers vested in them". A decision taken in arbitrary manner contradicts the principle of legitimate expectation. An Authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred. In this context, "in good faith" means "for legitimate reasons". It must be exercised bona fide for the purpose and for none other. (Vide: Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16; Sirsi Municipality v. Ceceila Kom Francis Tellis, AIR 1973 SC 855; The State of Punjab & Anr. v. Gurdial Singh & Ors., AIR 1980 SC 319; The Collector (Distt.Magistrate) Allahabad & Anr. v. Raja Ram Jaiswal, AIR 1985 SC 1622;Delhi Administration (Now NCT of Delhi) v. Manohar Lal, (2002) 7 SCC 222; and N.D. Jayal & Anr. v. Union of India & Ors., AIR 2004 SC 867)."
15. Further, we find that the order of cancellation of allotment of plot in favour of the writ petitioner and the forfeiture of the amount of the allotment money is nothing, but an unjust enrichment on the part of the Noida Authority which is not liable to be permitted in the facts and circumstances that stand attracted to the case of the petitioner.
16. This Court in the case of Aharwas Singh @ Atarwas Singh versus Lucknow Development Authority, Lucknow reported in (2015) 108 ALR 181, while considering a case in which the Lucknow Development Authority after advertising a scheme for allotment of plots in Gomti Nagar Extension Scheme after making allotment and taking deposit of the entire amount from the public, failed to deliver possession and execute sale deed even after a lapse of more than 7 years while keeping the money in its account and earning interest or utilizing it in other schemes, then it shall be incumbent upon the Authority to pay reasonable interest to the allottes on the cost of the land or plot deposited.
17. The Apex Court in Indian Council for Enviro Legal Action versus Union of India reported in 2011 (8) SCC 161 has defined the "Unjust Enrichment", as under:-
"UNJUST ENRICHMENT "
152. 'Unjust enrichment' has been defined by the court as the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience. A person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust. Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another.
153. Unjust enrichment is "the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience." A defendant may be liable "even when the defendant retaining the benefit is not a wrongdoer" and "even though he may have received [it] honestly in the first instance." (Schock v. Nash, A.2d, 232-33).
159. Unjust enrichment is basic to the subject of restitution, and is indeed approached as a fundamental principle thereof. They are usually linked together, and restitution is frequently based upon the theory of unjust enrichment. However, although unjust enrichment is often referred to or regarded as a ground for restitution, it is perhaps more accurate to regard it as a prerequisite, for usually there can be no restitution without unjust enrichment. It is defined as the unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience. A person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust. Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another."
18. Thus, from the above, we find that the conduct of the respondent Nos. 2, 3 and 5 in not facilitating the execution of the lease deed in favour of the petitioner cannot be approved. There was thus total failure on the part of the said respondents and they were certainly deficient in rendering service in terms of the obligations, they were expected to perform.
19. The endeavour of a Constitutional Court must always be to ensure that everyone gets just and fair treatment. Constitutional Courts while rendering justice must adopt a pragmatic approach and in appropriate cases realistic costs and compensation must be ordered to discourage dishonest action. In the case at hand, we find that the petitioner had deposited a sum of Rs.62,09,59,254/- towards the entire allotment money way back in the year 2011-12, but the respondent-Authority did not execute the lease deed of the plot allotted to the petitioner nor handed over possession of the same and now have proceeded to cancel the allotment and forfeit the amount entirety.
20. We are, thus, of the view that in the given set of facts that stand attracted to the case of the petitioner, the petitioner is entitled to the refund of the entire amount of the allotment money deposited with the respondents-Authority.
21. Accordingly, the writ petition is allowed. The order dated 12.3.2021 passed by the respondent No. 3-Deputy General Manager (Commercial), New Okhla Industrial Development Authority, NOIDA, so far as it forfeits the amount deposited by the petitioners in respect of the plot No. CC-4, Sector-32, NOIDA, is set aside. The respondent No. 2- New Okhla Industrial Development Authority, NOIDA is directed to refund the amount of Rs.62,09,59,254/- within 45 days from the date of service of certified copy of this order before it.
22. So far as the interest part is concerned, at this stage, we are not passing any order, leaving it open to the petitioner to prefer an appropriate application before the competent authority of the respondent. In the eventuality of such an application being filed, it is expected from the authority to pass appropriate orders after considering all aspects of the matter strictly, in accordance with law.
Order Date :- 11.08.2022
Ravi Prakash
(Ashutosh Srivastava, J.) (Pritinker Diwaker, J.)