Punjab-Haryana High Court
M/S Janta Land Promoters Limited vs State Of Punjab And Others on 26 November, 2010
Author: Jora Singh
Bench: Jora Singh
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
Date of Decision: November 26, 2010
1. CWP No. 11744 of 2008 (O&M)
M/s Janta Land Promoters Limited
...Petitioner
Versus
State of Punjab and others
...Respondents
2. CWP No. 18518 of 2008 (O&M)
M/s Janta Estate and Housing Development Ltd.
...Petitioner
Versus
State of Punjab and others
...Respondents
CORAM: HON'BLE MR. JUSTICE M.M. KUMAR
HON'BLE MR. JUSTICE JORA SINGH
For the petitioners: Mr. Rajiv Atma Ram, Senior Advocate,
with Mr. Sunish Bindlish, Advocate,
For the respondents: Mr. Suvir Sehgal, Addl. AG, Punjab.
Mr. Sanjeev Sharma, Senior Advocate, with
Mr. Shekhar Verma, Advocate, and
Mr. Vikram Sharda, Advocate.
Mr. R.S. Khosla, Advocate.
1. To be referred to the Reporters or not?
2. Whether the judgment should be reported in
the Digest?
M.M. KUMAR, J.
1. These two petitions under Article 226 of the Constitution filed by sister concerns have raised two questions of law. Firstly we are required to determine whether agreement dated 24.06.2005 (P-7) has resulted in conferring illegal largess without considering public interest. The agreement was entered into between the State of Punjab and the petitioner- company-M/s Janta Land Promoters Ltd. The other issue is 'if the CWP Nos. 11744 & 18518 of 2008 (O&M) 2 agreement does not suffer from any such illegality then could it be said that the petitioners are liable to pay External Development Charges, licence fee and charges in lieu of change of land use or all these charges are exempted in pursuance of agreement dated 24.6.2005 (P-7)'.
2. The Ist petition is concerning 'Mohali Project'. M/s Janta Land Promoters Limited (petitioner in CWP No. 11744 of 2008) has sought a mandamus directing the Competent Authority-respondent No. 6 under the Punjab Apartments and Property Regulation Act, 1995 (for brevity, 'the Property Regulation Act') to refund the amount of bank guarantee amounting to Rs. 1,37,17,000/- and advance External Development Charges of Rs. 29,37,083/-, which were deposited by it for obtaining a licence for developing a project of residential colony. A further prayer has been made for quashing order dated 21.5.2008 (P-19) whereby the petitioner has been asked to pay a sum of Rs. 121.56 crores on account of External Development Charges/Licence Fee/Change of Land Use for the Mega Project of the petitioner. Still further quashing of order dated 16.7.2004 (P-3) has been sought whereby the Punjab Small Scale Industries and Export Corporation-respondent No. 9 while granting its consent to provide connectivity to the petitioner for development of Janta Township at Sector- 91, Mohali, has raised a demand of Rs. 83.91 crores on account of share in unearned/tentative profits and proportionate development charges. A direction has also been sought directing the respondents to honour the agreement dated 24.6.2005 (P-7) and to fulfill all the obligations in relation to the project undertaken by the petitioner.
3. In the other petition concerning 'Ludhiana Project', M/s Janta Estate and Housing Development Ltd. (petitioner in the other writ petition No. 18518 of 2008), which is a sister concern of M/s Janta Land Promoters CWP Nos. 11744 & 18518 of 2008 (O&M) 3 Limited, has sought quashing of orders dated 8.7.2008, 3.7.2008 and 29.8.2008 (P-6, P-7 & P-13 respectively) asking the petitioner to deposit External Development Charges for the Mega Project so that its case for change of land use for group housing over an area of 13.63 acres at Ludhiana could be considered. A further prayer has also been made for directing the respondents to grant permission to the petitioner for change of land use for residential purpose in respect of 13.63 acres of land in village Bullara, District Ludhiana.
MOHALI PROJECT - OLD & ABANDONED PROPOSAL:
4. Facts may first be noticed concerning Mohali Project. On 27.8.2003, the petitioner filed an application for grant of permission for change of land use in respect of approximately 120 acres of land situated in the revenue estates of villages Sohana and Lakhnaur near Mohali for development of a self contained and value added township near SAS Nagar Mohali (for brevity, 'residential colony'). On 31.10.2003, the State Government allowed the said application under the provisions of the Punjab Regional Town Planning and Development Act, 1995 (for brevity, 'the Town Planning and Development Act') and the Punjab New Capital Periphery (Control) Act, 1952 (for brevity, 'the Periphery Act'), subject to certain terms and conditions. The petitioner was required to obtain licences for development of the residential colony under the Property Regulation Act. It was also directed to purchase not less than 60 acres of the land within 90 days failing which the permission was liable to be treated as having lapsed. It is claimed that on 22.3.2004, the petitioner applied for grant of requisite licence for development of a part of land into a residential CWP Nos. 11744 & 18518 of 2008 (O&M) 4 colony in the revenue estate of villages Lakhnaur and Sohana (Mohali) falling under Sectors 90 and 91 SAS Nagar, Master Plan. The application was submitted to the Competent Authority-cum-Chief Administrator, Punjab Urban Development Authority (PUDA). However, the said application was rejected by the competent authority vide order dated 15.6.2004 (P-2) on account of various adverse reports received from various departments of the respondent State of Punjab (P-2). One of the objections raised by the Chief Town Planner, Punjab, was that there was lack of proper road connectivity of the proposed colony with the area developed by PSIEC and 'No Objection Certificate' from PSIEC was not produced. Feeling aggrieved, the petitioner filed an appeal under Section 33 of the Property Regulation Act before the Appellate Authority against the aforementioned order.
5. On 16.7.2004, a demand of Rs. 83.91 crores was raised by the PSIEC from the petitioner. The said demand included Rs. 78.50 crores on account of unearned/tentative share in the unearned/anticipated accrual from the sale of residential and commercial property that would accrue to the petitioner by use of the connectivity to be provided through the roads of PSIEC and Rs. 5.41 crores being the proportionate development charges including cost of land of PSIEC under roads and other services already laid by PSIEC (P-3).
6. On 2.8.2004, the Appellate Authority passed an order partly allowing the appeal of the petitioner and remanded the matter back to the Competent Authority to take a final decision after due enquiry on the original application of the petitioner for the grant of a licence to develop a colony. The Appellate Authority issued the following directions:- CWP Nos. 11744 & 18518 of 2008 (O&M) 5
"1. The scope of the enquiry on remand shall be limited primarily to rule 11(e) of the Punjab Apartment and Property Regulation Rules, 1995;
2. In order to further demonstrate its seriousness as well as cash liquidity, the appellant company shall furnish to the Competent Authority a bank guarantee equal to 25% of the estimated cost of development works, at the standard rates and also deposit the first instalment of the External Development Charges (EDC) at the standard rates in respect of this colony, to the Competent Authority, in advance. The Competent Authority, before hearing the case on remand, shall ensure that both these stipulations have been fulfilled;
3. Nothing in the aforesaid direction shall, however, preclude the Competent Authority from initiating separate proceedings to carry out a comprehensive assessment of the EDC amount and the bank guarantee amount (as a security for the execution of internal development works), if the licence is granted, and prescribing higher amounts, based on detailed calculations, after associating the promoter company;
4. The matters decided in this appeal shall not be re-
opened;
5. The appellant company shall submit the documents it has omitted to do under rule 10(e) of the Punjab Apartment and Property Regulation Rules, 1995, or any other document which it feels is relevant, directly to Chief CWP Nos. 11744 & 18518 of 2008 (O&M) 6 Engineer, PUDA, as soon as possible, with a copy of the entire set to the Competent Authority;
6. The Chief Engineer, PUDA, shall after examining the documents so required to be submitted, and after associating the appellant company shall give a clear report to the Competent Authority, within a period of two weeks of the submission of these documents to him, on the three points enumerated in rule 11(2) of the Punjab Apartment and Property Regulation Rules, 1995 i.e. i. Whether the documents now submitted substantially conform to the requirements of the rule 10(e), and ii. Whether the plans and the designs of the development works submitted are technically sound and workable, and iii. Whether the estimated expenditure on water supply main on extra mural and outfall sewerage is commensurate with the size of the colony.
7. On the receipt of the report of the Chief Engineer, the Competent Authority after affording the present appellant a reasonable opportunity of being heard, and after considering the report of the Chief Engineer PUDA and conducting such further enquiry, in this respect, as it may deem fit, shall pass a final order, on merits and in accordance with law subject, of course to the directions CWP Nos. 11744 & 18518 of 2008 (O&M) 7 given in this order, in respect of the application of the appellant company for the grant of a licence to develop a colony under PAPRA. This shall be done, within a period of 2 weeks of the receipt of the Chief Engineer's report.
......it is further directed that if and when the licence to develop this colony is granted, it shall also be made subject to the following terms and conditions, apart from the ones normally stipulated:
All the issues decided in this appeal shall form a part and parcel of the terms and conditions of the licence; and All the terms and conditions contained in the HUDM's quasi-judicial order dated 31.10.2003 shall also be deemed to be among the terms and conditions of the licence; and The appellant company shall also remain responsible for the payment of all or any charges that may be payable under the provisions of any other law for the time being in force; and It shall be the responsibility of the promoter company to comply with all the statutory requirements, including statutory clearances, if any, under any other law for the time being in force, in particular the Government of India, Ministry of Environment and Forest Notification No. S.O. 801 (E) dated 7.7.2004, CWP Nos. 11744 & 18518 of 2008 (O&M) 8 issued under the Environment (Protection) Act, 1986; and With a view to secure the financial interest of the State Government regarding the recovery of the change of land use conversion charges, as laid down in the HUDM's quasi-judicial order dated 31.10.2003 (condition No. viii, page 17 of the order), the appellate company shall submit, within 60 days of the issue of the licence, a bank guarantee at the rate Rs. 1.50 lakh per gross acre of this colony to the Competent Authority. This shall be retained till the issue of the Completion Certificate and may be returned/released thereafter under a specific order which the Competent Authority may pass at that time, considering the circumstances then prevailing."
7. In pursuance to the aforementioned directions issued by the Appellate Authority, the petitioner furnished a bank guarantee of Rs. 1,37,17,000/- and also deposited advanced EDC instalment of Rs. 29,37,083 with the Competent Authority and it seeks refund of the aforesaid amount.
8. The PSIEC challenged the order dated 2.8.2004 (P-4), by filing a revision under Section 34 of the Property Regulation Act, which was partly allowed vide order dated 9.4.2005 (P-5). The Revisional Authority set aside the directions given by the Appellate Authority to PSIEC to construct roads and the method of deciding the quantum of compensation. However, it has upheld the order of remand of the Appellate Authority. In para 26 of the order it has been observed as under:-
CWP Nos. 11744 & 18518 of 2008 (O&M) 9
"26. In view of the above discussion, I uphold the order of remand of Appellate Authority, sans the riders imposed, and direct that the competent authority shall decide the matter of the grant of licence to the applicant (JLPL) afresh. The issues formulated and decided by the Appellate Authority shall not constitute directions to the Competent Authority, but may be kept in mind by the Competent Authority as its considered views on those matters. Since the prerogative, the duty, as well as the responsibility to grant the licence is squarely with him, the Competent Authority shall decide the issue of grant of licence under Section 5 of PAPRA and rules 10, 11, 12 of PAPRA Rules, 1995 without the scope being hedged in by any directions."
9. The first proposal had only gone this far. The petitioner had furnished bank guarantee amounting to Rs. 1,37,17,000/- and had also deposited a sum of Rs. 29,37,083/- as EDC for grant of CLU under the first and abandoned proposal. However, in respect of Mohali Project again a revised new proposal was mooted in pursuance of Industrial Policy-2003. NEW REVISED PROPOSAL UNDER INDUSTRIAL POLICY-2003
10. The State of Punjab had formulated an Industrial Policy-2003 providing for certain incentives to the investors and promoters who were interested in setting up of mixed use Mega Industrial Parks in the respondent State (P-5A). It is claimed by the petitioner that since no decision in terms of the orders dated 2.8.2004 (P-4) and 9.4.2005 (P-5) was taken by the Competent Authority, therefore, it had decided to abandon the project of residential colony and instead applied for setting up a Mixed Use CWP Nos. 11744 & 18518 of 2008 (O&M) 10 Industrial Park over the land which was to be utilized for residential colony. On 28.4.2005, the Empowered Committee of the respondent State, which was constituted under the Industrial Policy-2003, approved the Mega Industrial Project of the petitioner and permitted it to develop the industrial component of the project in Sector 82 and residential component in Sectors 90-91, Mohali as a part of the Mega Project. The decision of the Empowered Committee was communicated to the petitioner vide letter dated 25.5.2005 (P-6), which reads thus:-
" Please refer to your letter dated 17.12.2004 regarding your proposal to set up mixed use Mega Industrial Project in 500 acre at two location in Punjab i.e. Mohali and in distt. Ludhiana. The proposal was considered by the Empowered Committee constituted under Industrial Policy 2003 in its meeting held under the Chairmanship of Hon'ble Chief Minister, Punjab on 28.04.2005.
Considering the proposal, the Committee approved the concessions as enumerated in Annexure-I for the mixed use mega Industrial Park to be set up in an area of 30 acres in Mohali with investment of Rs. 264.80 crore and the other in an area of 200 acres in district Ludhiana with an investment of Rs. 156.80 crore (total investment being Rs. 421.60 crore).
Since it was noted that no single contiguous piece of land measuring 300 acres will be available in Mohali due to constraints imposed by the Master Plan of Mohali, therefore the committee allowed the company to develop Industrial, residential & commercial project components on non- contiguous pieces of land in the ratio of 60:30:10 as prescribed CWP Nos. 11744 & 18518 of 2008 (O&M) 11 under the scheme of the Industrial Park and the Guidelines framed there under, as a special dispensation. However, the proposed site, which as per the company comprise of two chunks at a distance of 2-3 Kms from each other, should conform to the Master plan of Mohali. Subject to the fulfillment of the conditions, the two portions of the project at Mohali will be treated as a single unit for all benefits available to industrial parks under the Industrial Policy-2003. ...(sic)... developed on a contiguous piece of 200 acres of land. The project shall be further in accordance with guidelines notified vide No. CC/JDP/IP-2003/CLU/3497 dated 25.5.2005 by the Department of Industries & Commerce.
Further, grant of above concessions will be subject to signing of an agreement as per draft enclosed (Annexure-I) by your company with Industries Department and complying with the terms & conditions of the agreement, failing which the said concessions will stand withdrawn."
11. On 24.6.2005, an agreement was executed between the petitioner and the State Government through the Secretary, Department of Industries and Commerce (P-7). Clauses 5 and 6 of the agreement deserves to be quoted in extenso being relevant which read as under:-
"5. Whereas the Government of Punjab has required the Company to enter into the Agreement with the Governor of Punjab hereinafter contained. Now this indenture witnessed that it hereby agreed and declared as follows:-
(i) The Company shall make an investment of Rs. 264.80 crore including fixed capital Investment of atleast Rs. CWP Nos. 11744 & 18518 of 2008 (O&M) 12
100 crore or above as defined by the Department of Industries by setting up a mixed use mega Industrial Park in an area of 300 acres at Mohali and investment of Rs.
156.80 crore including fixed capital investment of atleast Rs 100 crore or above as defined by the Department of Industries by setting up a mixed used mega industrial park in an area of 200 acres in Ludhiana, both projects shall be completed in a period of five years effective from 28.4.2005.
The said projects shall have to be fully implemented and brought into commercial production within the said stipulated period.
(ii) The company shall develop the Industrial Estate first and housing and commercial projects subsequently. Before developing the residential and commercial pockets, the company shall not only first develop industrial pockets but also dispose off atleast 50% of the industrial plots to industrial units which will be set up in the industrial pocket and the entire project shall come up with proposed investment level in stipulated period.
(iii) The project of Industrial Parks shall be further subject to the provision of the guidelines notified by Department of Industries & Commerce. Some of relevant provision shall be:-
a. A minimum of 60% of area will have to be developed as an Industrial Pocket, a maximum of 30% of area may be developed as residential CWP Nos. 11744 & 18518 of 2008 (O&M) 13 pocket and 10% of area can be developed as commercial pocket. Government in the Department of Industries may however, reduce the permissible limits for non-industrial use in particular cases.
b. Permissible saleable area in the industrial pocket shall be 65%, in the residential pocket 60% and for the commercial pocket 40%. Balance of area shall be used for common facilities, open spaces, green belt etc., as per approved zoning plan and as per applicable byelaws.
c. Zoning and Layout plan will be cleared by a competent authority declared by Director of Industries & Commerce, Punjab.
d. Common facilities would include the facilities for air conditioning, roads (including approach roads), water supply, sewerage facilities, common effluent treatment facilities, telecom networks, generation and distribution of power, provided that the facilities are used for more than 2 industrial units in the industrial park.
e. Infrastructure development would include roads (including approach roads) water supply and sewerage facilities, common effluent treatment facilities, telecom networks, generation and distribution of power, parking facilities, parks, street lights and such other facilities as are of CWP Nos. 11744 & 18518 of 2008 (O&M) 14 common use for industrial activities which are identifiable and are to be commonly used.
f. Industrial Parks with a residential component shall have only non-polluting units and distance between industrial area and other areas will be in accordance with guidelines issued by Punjab Pollution Control Board from time to time.
g. Necessary clearances from various central/state agencies will have to be obtained by the developers as per statutory requirements and on payment of such prescribed fees as required under the law. The Department of Industries & Commerce, Government of Punjab will be the single nodal agency for approving and facilitating the projects for getting clearances etc. and will also facilitate in getting resolved various issues which will relate to Government Departments/Agencies.
h. An Industrial Park shall come up as one unit at
single geographical location and shall be
developed in contiguity. However, public service which already exists such as road, canal, park etc. shall not be construed to break the unity & contiguity of the park. However, in case of your Mohali project, the provision contained in para shall not be applicable as it was noted that no single contiguous piece of land measuring 300 CWP Nos. 11744 & 18518 of 2008 (O&M) 15 acres will be available in Mohali due to constraints imposed by the Master Plan of Mohali, therefore the committee allowed the company to develop Industrial, residential & commercial project components on non-contiguous pieces of land.
i. Benefits to industrial parks under industrial policy, if provided by the Government shall be withdrawn by State government in case the park is not put up/developed in accordance with the sanctioned plan within the prescribed time period.
(iv) The Government of Punjab has agreed to provide the following reliefs and concessions:-
a) As per the Industrial Policy 2003 exemption will be granted on 100% stamp duty and registration fee on sale/transfer of built up space of the units or land in side the project area. Such exemption shall extend to the project area upto first sale of developed area/plot/built up space to any party by them or to any of its affiliate. There shall be no stamp duty on lease instrument of units located in the project area. Such exemption shall remain operative till the completion of the entire project as per the agreement.
b) State Government shall acquire land as per
provision of the Land Acquisition Act to the
extent of 10% of the total area of the project, if
requested by the company.
CWP Nos. 11744 & 18518 of 2008 (O&M) 16
c) The land use change in the area falling under the
control of the Punjab Periphery Control Act shall be allowed without any charges levied by the Housing and Urban Development Department in accordance with the draft master layout plan of the periphery and periphery policy of the Government of Punjab. However, such concession would be subject to the decision of various cases pending in Hon'ble High Court of Punjab and Haryana on this issue. However, if any or whole part of land of the project area is not covered in any master plan or planning zone under PUDA Act, the land use thereof shall not be changed or amended and shall be incorporated as such and included in any future master plan or zoning which shall be prepared under the PUDA Act.
d) Permission under Punjab State Tubewell act, 1954 to dig Tubewell in project area for requirement of the project was allowed.
e) Exemption from the provision of Punjab Mines & Mineral Act shall be allowed within the project area for works relating to development of the project.
f) High-rise buildings beyond 45 metres shall be allowed subject to clearance from Air Force Authorities.CWP Nos. 11744 & 18518 of 2008 (O&M) 17
g) work contract tax on construction material
required for the project shall be charged at
minimum floor rate.
h) FAR of 2 shall be allowed for industrial and
commercial purpose. However, the relevant
Building Bye-laws/regulations shall be applicable to the area.
i) The State Government shall ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project is provided within 240 days from the date the same is applied for to the concerned department/agency/authority/local body on fulfillment of various terms and conditions required in this regard at such rates/fee etc. which shall not be less favourable to them compared to similarly placed project/customers.
j) The project of industrial park shall be exempted from PAPR Act.
k) Exemption from electricity duty (excluding cess) for 5 years shall be allowed from the date of release of connection by PSEB.
l) State Government shall allow the company to connect the project area to the State Transport Network. The State Government shall also allow them to operate their own public transport system within the project area and also for connecting the CWP Nos. 11744 & 18518 of 2008 (O&M) 18 project area to the main urban centre nearest to the project area subject to the fulfillment of required terms and conditions in this regard.
m) The State Government shall not allow hazardous industry as defined under Factories Act within 500 metres of the project area and industrial plots within the industrial park shall also not have any hazardous industry.
n) Pollution control Board shall grant NOC and consent to operate to the Green Category Industry to be located in the Industrial Park in 30 days on fulfillment of all the required terms and conditions.
o) No State Agency shall erect any barrier or create hindrance in various connectivities which shall be allowed to the project as per Sr. No. (i) above except on the ground of major law and order problem or National Security considerations.
p) The State Government may consider notifying the project area finally developed as an Industrial Township under Article 243(Q) of the Constitution of India.
q) The Department of Industries shall be the single Nodal Agency for facilitating the project and getting clearances etc. required for the unit for the project and the project area and will also get resolved various issues which will relate to the CWP Nos. 11744 & 18518 of 2008 (O&M) 19 Government Departments or Punjab Government Public Sector Undertakings/Authority/Local Body." (emphasis added)
6. In case the above company fails to comply with the provisions of para 5(i), 5(ii) and 5(iii) above, the concession(s) enumerated in para 5(iv) above shall stand automatically withdrawn and the company shall have no claim or liability whatsoever on the State Government in this regard. The Government of Punjab shall be entitled to recover the cost of all relief's/concessions availed by the Company (as dues recoverable by the Government) under Para 5(iv) above in the event of failure on the part of the Company to fulfill its obligations under Para 5(i), 5(ii) & 5(iii) above."
12. Thereafter various notifications were issued to give effect to the terms and conditions of the agreement dated 24.6.2005, which have been placed on record as Annexure P-8 (Colly). It has been claimed by the petitioner that since it was allowed to develop residential colony in Sectors 90 and 91, Mohali, as part of the Mega Project, therefore, in terms of the agreement there was no requirement to obtain a licence under the Property Regulation Act, which has been specifically exempted.
13. On 2.9.2005, the petitioner filed an application for cancelling its earlier request for grant of licence under the Property Regulation Act. The Competent Authority was also requested to release the Bank Guarantee and refund the External Development Charges paid in advance, which were deposited by the petitioner in pursuance of the order passed by the Appellate Authority, dated 2.8.2004 (P-4). The petitioner has made the same prayer in the instant petition. However, vide letter dated 17.11.2005 it CWP Nos. 11744 & 18518 of 2008 (O&M) 20 was informed that the decision regarding refund of the aforesaid amounts would be taken only after the conversion charges/fee is finalised by the Government (P-10). On 3.12.2005, the petitioner again apprised the Competent Authority all the subsequent developments which had taken place after deposit of the bank guarantee and amount towards External Development Charges and again a request was made to refund the same (P-
11). The said letter was followed by a reminder dated 10.3.2006 (P-12).
14. The petitioner started the project and invested a sum of more than Rs. 300 crores till 11.3.2008. It has been claimed that it has created various world class facilities such as roads, water supply, sewerage, common effluent facilities, telecom networks, distribution of power, parking facilities, parks, street lights etc. After approval of the layout plan by the Competent Authority, which comprises 970 industrial plots in Sector 82 Mohali and 614 residential plots in Sector 90-91, Mohali, the petitioner has already sold 723 industrial plots and 573 residential plots till February 2008 and possession of 507 industrial plots and 464 residential plots has already been delivered.
15. It has been alleged that after execution of the agreement dated 24.6.2005 (P-7), the petitioner fulfilled all the conditions on its part but the respondent State did not comply with the terms and conditions as incorporated in clause 5(iv) of the agreement, inasmuch as, the respondent State has failed to provide connectivity to the industrial Sector 82 and the residential Sector 90-91, Mohali. The building plans submitted by the petitioner as well as the plot holders have been withheld on the ground that the petitioner is liable to pay a sum of Rs. 83.91 crores to the PSIEC on account of proportionate external development charges and 50% share in the profits estimated to be earned by the petitioner as a result to the proposal CWP Nos. 11744 & 18518 of 2008 (O&M) 21 to set up a residential colony. It has been pleaded that the said demand is totally illegal and arbitrary because the petitioner has already given up the said project of residential colony in pursuance of subsequent approval and of allotment of the Mega Project in its favour. It is further alleged that the respondent State has also failed to grant 100% exemption from Stamp Duty and registration fee and to acquire 10% land for industrial Mega Project. Permission to dig tubewell in the project area has also not been granted. In that regard the petitioner sent a number of communications to the respondents, which have also been placed on record as Annexures P-14 (Colly) to P-18 (Colly).
16. On 21.5.2008 (P-19), the Competent Authority-cum-Chief Administrator, Greater Mohali Area Development Authority (GMADA), raised demand from the petitioner on the following counts in relation to its Mega Project:-
1) EDC Rs. 8154.53 lacs
2) CLU Rs. 1255.07 lacs
3) License Fee Rs. 2746.50 lacs
Total Rs. 12156.10 lacs
17. The aforesaid demand has been raised in pursuance of various notifications dated 11.1.2008 (P-20 Colly), issued by the Government of Punjab, Department of Housing and Urban Development (Housing-II Branch), notifying the rates of External Development Charges, Change of Land Use, license/permission fee for setting up of industries in the State of Punjab. It has been claimed that these notifications are contrary to the agreement dated 24.6.2005 and in pursuance of agreement subsequent notifications granting exemption from payment of EDC/CLU/license fee etc. in favour of the petitioner were also issued. The petitioner has also CWP Nos. 11744 & 18518 of 2008 (O&M) 22 placed on record copies of the letters dated 25.7.2007 and 22.8.2007 asking it to deposit the EDC, CLU and licence fee charges (P-21 & P-22). Evenutally, on 24.6.2008, the Chief Town Planner has conveyed to the petitioner that its revised building plans cannot be considered without deposit of the charges which have been demanded by the GMADA and without obtaining a No Dues Certificate from the said authority (P-25). In the above mentioned factual background the petitioner has filed CWP No. 11744 of 2008.
18. In the short reply filed by Shri Arun Goel, Secretary to Government Punjab, Department of Housing and Urban Development- respondent No. 3, a preliminary objections has been raised that under Sections 33 and 34 of the Property Regulation Act there are statutory provisions for appeal and revision. Further, under Section 35 there is a bar of jurisdiction, which stipulates that no civil court would entertain or decide any question relating to matters arising under the said Act or the rules framed thereunder. Every order passed by the competent authority is subject to appeal and every order passed by the Appellate Authority is subject to revision. Then every order passed by the State Government in revision, is deemed to be final and could not be questioned in any Court of law. It has been submitted that without exhausting the remedy of appeal and revision the petitioner has straightway approached this Court, thus the writ petition is liable to be dismissed. With regard to raising of demand dated 21.5.2008 (P-19) by the GMADA directing the petitioner to deposit dues of EDC, CLU charges and licence fee charges, it has been stated that the demand has rightly been raised by it being the competent authority. Further it has been submitted that the Secretary to Government of Punjab, Department of Housing and Urban Development has the power and CWP Nos. 11744 & 18518 of 2008 (O&M) 23 competence to issue directions to the PSIEC to raise demand from the petitioner. It has been denied that there is any mala fide intention to raise such a demand.
19. In their reply, respondent Nos. 6 and 7 - GMADA have asserted that it being a statutory body constituted under the provisions of Section 29 of the Punjab Regional and Town Planning and Development Act, 1995, is not a privy to the agreement 24.6.2005 (P-7) and, therefore, it is not bound by the terms of the said agreement. Referring to a cost appraisal for basic infrastructure services in some of the area falling within its jurisdiction, it has been highlighted that a total expenditure of Rs. 19185.30 crores was required to develop 26,000 acres of land. The total area which falls within the ambit of GMADA for development is over 1200 square kilometers. It has been emphasised that the expenditure incurred for development by GMADA at the initial stage, is to be recovered from the ultimate beneficiaries to whom the land is directly allotted such as individuals or groups/organizations. However, in the case of land which is developed and sold by a private colonizer, the proportionate cost of development is recovered from the colonizer.
20. It has been then submitted that the petitioner seeks to develop the area in two blocks - one for residential and commercial activity and the other for industrial use. There is a distance of almost 6 Kms between two pockets. These two isolated pockets are of no use unless they are connected to the rest of the city and its surrounding area, which is connected by road, rail and air, hospitals, stadiums, parks and other facilities. Therefore, it is not possible to establish the private colonies in the area without upgradation of the existing development.
CWP Nos. 11744 & 18518 of 2008 (O&M) 24
21. On merit it has been submitted that all the persons who have been granted exemption from the provisions of the Property Regulation Act and have submitted housing mega projects have been treated at par. Therefore, the petitioner cannot seek special treatment. All other similar megaprojects which have been approved within the periphery of Chandigarh have already deposited the dues demanded from them. In the case of at least 8 other similarly situated megaprojects that have been sanctioned, each one has already deposited various amounts on account of change of land use, licence fee, external development charges etc., the total of which comes to Rs. 51,866.04 lacs. It has been pointed out that certain writ petitions were filed by various persons in this Court, including CWP No. 14357 of 2002, seeking regularisation of their constructions made in the Periphery area. It was brought to the notice of this Court that the State Government has constituted a High Powered Committee headed by the Chief Secretary, vide order dated 10.9.2003 and the decision regarding regularisation of constructions made in the Periphery area would be taken in the light of the recommendations of the said Committee. Accordingly, on 18.9.2003, a Division Bench of this Court disposed of the writ petitions. Eventually a comprehensive policy has been formulated for regulating further growth which would involve heavy investment in roads connectivity, provision of civic amenities, electricity, water supply and sewerage. The said policy was notified on 20.1.2006. In the said policy external development charges based on basic infrastructure requirements were also incorporated. Apart from this, charges for conversion of land use and betterment were also recommended, which were also notified.
22. It has, thus, been emphasised that the petitioner is liable to pay the external development charges as well as licence fee and other dues, CWP Nos. 11744 & 18518 of 2008 (O&M) 25 which have been rightly demanded and are in consonance with the policy of the State. No concession or special package could be made available to a person until and unless he clears all the outstanding dues payable to the Government.
23. In the written statement filed on behalf of respondent No 9- PSIEC it has been asserted that demand of Rs. 83.91 crores vide order dated 16.7.2004 (P-3), has rightly been raised in case the petitioner wanted to have access to its complex through the roads or land belonging to the PSIEC. The action of PSIEC was challenged by the petitioner in the appeal and ultimately the Revisional Authority vide order dated 9.4.2005 (P-5) upheld the demand. PSIEC also denied any privity or obligation to provide connectivity to the petitioner from its land/roads.
24. Respondent No. 5 has adopted the reply filed by respondent Nos. 6 and 7.
25. A discordant and contradictory stand has been taken by respondent No. 2 as against the stand of respondent Nos. 1 and 3. It has been stated that the External Development Charges, Licence Fee and Change of Land Use charges are payable by the petitioner not only under the Property Regulation Act but such charges are also leviable under the Periphery Act, which have been prescribed by the State Government vide notification dated 19.9.2007 (R-1). It has been pointed out that the petitioner has not brought to the notice of this Court the provisions of notification dated 19.9.2007 whereby External Development Charges, Conversion Charges and Licence/Permission fee in the area falling in the jurisdiction of GMADA have been prescribed. Admitting the factum of granting special package of incentives vide letter dated 25.5.2005, agreement dated 24.6.2005 and subsequent notifications dated 4.8.2005 and CWP Nos. 11744 & 18518 of 2008 (O&M) 26 5.8.2005, it has been stated that the said benefits were in the nature of largesse without considering the relevant parameters of public interest. It has been pointed out that various illegalities were brought to the notice vide a memorandum dated 6.12.2006, which was submitted to the Governor of Punjab for enquiry and investigation in the matter. However, the matter is pending. When the default on the part of petitioner for non payment/withholding of dues came to the notice of the Government, steps were taken through respondent Nos. 6 and 7 for taking suitable action and notices were issued for deposit of EDC, CLU and Licence Fee etc. The failure on the part of the petitioner to deposit the charges due from it, is clearly detriminetal to the public interest and prejudicial to the State because it is deprived of its lawful dues.
26. Respondent No. 9 has also adopted the reply filed by respondent Nos. 6 and 7.
27. During the pendency of CWP No. 11744 of 2008, the petitioner filed C.M. No. 13600 of 2008 seeking grant of ad interim orders. In para 2 of the application it has been stated that the petitioner has also initiated the project known as 'Canal View Heights' in 13.63 acres of land at Ludhiana, where it has proposed to set up a Group Housing Colony. For the said project, on 7.10.2007 an application was made for grant of change of land use as per Government policy and under the provisions of the Property Regulation Act, subject to payment of charges. Similar applications were also made by other colonisers also. It has been alleged that from September 2007 to April 2008 the respondent State has granted 96 permissions for change of land use. However, no such permission was granted in favour of the petitioner. On asking the information under the Right to Information Act, 2005, it was informed vide reply dated 8.7.2008 that its case would be CWP Nos. 11744 & 18518 of 2008 (O&M) 27 considered only after the balance charges of different projects falling in the area of GMADA/PUDA are cleared by the petitioner. However, the said application was withdrawn by the petitioner with liberty to file a separate petition and the prayer was allowed vide order dated 7.8.2008. Accordingly, the sister concern of the petitioner, namely, M/s Janta Estate and Housing Development Ltd. filed CWP No. 18518 of 2008 seeking the reliefs which have been noticed in para No. 3 of the order. RIVAL CONTENTIONS:
Petitioners' Submissions:
28. Mr. Rajiv Atma Ram, learned senior counsel has drawn our attention to the Industrial Policy-2003 (P-5A) and submitted that various measures have been envisaged to encourage private sector investment in development of Industrial Parks/Estates/Agro Parks/IT Parks. Placing reliance on clauses 10.4 and 10.4.1 to 10.4.3 it has been argued that in order to facilitate and encourage private participation in such like projects in the private or joint sector the State has exempted the petitioners from applicability of the Punjab Apartment and Property Regulation Act, 1995 in accordance with the powers vested with the State Government under Section 44(2) of the Act. It further contemplates assessment and determination by the Empowered Committee. Once approval by the Committee is granted then the Department of Industry which is a nodal agency, was to issue an eligibility certificate. Learned counsel has emphasised that no permission for change of land use was required anywhere in the State. Even the stamp duty on first sale has been exempted. CWP Nos. 11744 & 18518 of 2008 (O&M) 28 Mr. Atma Ram has also drawn our attention to clause 10.5 dealing with the development of integrated Multiplex Complexes where similar relaxation with regard to entertainment tax for a period of five years.
29. In order to avail the aforesaid benefits, Mr. Atma Ram has argued that in respect of Mohali Project, the petitioner filed application and in reply thereto respondent No. 4 i.e. the Department of Industries being the nodal agency sent a letter to the petitioner and the proposal made by the petitioner was approved in terms of details given in the annexures for mixed use mega Industrial Park to be set up in an area of 300 acres in Mohali, with the investment of 264.80 crores. The Empowered Committee also accorded approval to the other project in an area of 200 acres in district Ludhiana with an investment of Rs. 156.80 crores. Thereafter on 24.6.2005, a formal agreement in the name of the Governor and the petitioner was entered into. According to the agreement, concessions have been listed in clauses 5(i)(ii)
(iii) and (iv). Learned counsel has argued that in view of the aforesaid clauses no CLU charges, no external development charges, no stamp duty charges on the first transfer, no connectivity charges could be demanded from the petitioner. In order to facilitate and encourage the petitioner, various permissions are required to be granted to the petitioner, which include no objection by the Pollution Control Board, exemption from electricity duty (excluding cess) for a period of five years. The obligation of the State Government to ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure facilities are provided to the petitioner upto its project within 240 days. Therefore, the charges concerning connectivity demanded from the petitioner and further charges named and styled as future profits amounting to Rs. 78.50 crores by the PSIEC are wholly un-warranted and illegal.
CWP Nos. 11744 & 18518 of 2008 (O&M) 29
30. Mr. Atma Ram has also raised the plea of estoppel and submitted that in para 20 of their written statement respondent Nos. 1 and 4 have conceded the factum of the agreement between the State of Punjab and the petitioner in respect of the Mohali and Ludhiana projects. Likewise, in para 20, GAMADA-respondent No. 7 has also not disputed the factum of agreement. In para 20 of their written statement, respondent No. 2 has although taken a different stand but still has accepted the factum of the agreement. In order to substantiate his argument that principles of promissory estoppel would be attracted to the facts of the present case and the promises which have already been made and acted upon bringing third party rights in existence cannot be avoided. In support of his submission, learned counsel has placed reliance on the judgment rendered in the case of MRF Ltd., Kottayam v. Assistant Commissioner (Assessment) Sales Tax, (2006) 8 SCC 702, which deals with sales tax exemption. Reliance has also been placed on other judgments of Hon'ble the Supreme Court rendered in the cases of Sunil Pannalal Banthia v. City and Industrial Development Corporation of Maharashtra Limited, (2007) 10 SCC 674; Delhi Development Authority, New Delhi v. Joint Action Committee, Allottee of SFS Flats, (2008) 2 SCC 672; and M/s Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of Uttar Pradesh, AIR 1979 SC 621.
31. He has then submitted that no reliance can be placed by the respondent State of Punjab on any subsequent notifications and notification dated 18.6.2009 (A-4 with C.M. No. 13949 of 2009) because it would amount to novation of original agreement contrary to the notified agreement dated 24.6.2005 (P-7) and the subsequent notifications issued granting various exemptions to the petitioner in pursuance of the agreement and Industrial Policy-2003. Referring to the notifications dated 18.6.2009 (A-3, CWP Nos. 11744 & 18518 of 2008 (O&M) 30 A-4 and A-5), granting various concessions regarding payment of CLU charges/EDC/licence fee, learned counsel has submitted that even in the current period such like charges have been exempted. Despite the aforesaid notification, the petitioner has been served with a letter dated 5.6.2009 (A-
7) sent by the Deputy Director Policy informing the petitioner that the project of the Company has not been approved, learned counsel has maintained that there is no power with the State Government to modify the contract unilaterally and any novation of contract has to be with the consent of the petitioner. In that regard, learned counsel has placed reliance on the judgment of Hon'ble the Supreme Court in the case of MRF Ltd., Kottayam (supra). He has drawn our attention to the observations made in para 39 to argue that principle of legitimate expectation is another facet of principles of estoppel and natural justice. If on the basis of promise given by the State, one party changes his position to his detriment then the Government cannot later on resile from its obligation leaving the other party to suffer huge losses and refuse to honour the promise because it would be highly un-reasonable, unfair, unjust and violative of Article 14 of the Constitution. He has also submitted that exemption in terms of Section 44 (2) of the Property Regulation Act is deemed to be granted to the petitioner in terms of the Industrial Policy-2003, agreement dated 24.6.2005 (P-7) and subsequent notifications issued, which are attached collectively at Annexure P-8.
32. Attacking the demand with regard to profit sharing, learned counsel has argued that profit sharing cannot be claimed unless it is a joint venture project. There is no partnership in the project of the petitioner Company with the State Government. Placing reliance on the observations made in para 27 in the case of U.P. Power Corporation Ltd. v. Sant Steels CWP Nos. 11744 & 18518 of 2008 (O&M) 31 & Alloys (P) Ltd., (2008) 2 SCC 777, Mr. Atma Ram has submitted that the general principle of promissory estoppel is that once a representation has been made by one party and the other party acts on that representation and makes investment then thereafter the other party if resiles, cannot be considered to have acted fairly and reasonably. Explaining the applicability of doctrine of promissory estoppel, learned counsel has further argued that the principle has to be determined by weighing the equity on the one hand and public interest/legal provision on the other hand. He has submitted that in pursuance of promise, the petitioner has invested over 300 crores and has already carved out 970 industrial plots and sold 723 out of them. Possession of 507 plots has already been given and third party rights have come into existence. Likewise, total 614 residential plots have been craved out and out of which 573 have been sold. Out of the sold plots, possession has been given for 464 residential plots. All the equitable consideration would weigh in favour of the petitioner.
33. Mr. Atma Ram has further argued that the respondent State has failed to perform their part of the contract by granting exemption from the payment of stamp duty under Section 9 of the Stamp Duty Act, 1899, by refusing to sanction the site plan and providing connectivity of roads and also acquiring the land to the extent of 10% which is owned by the private parties in small pockets. Referring to the order dated 28.7.2009 (A-6), learned counsel has stated that the State has made an attempt to resile from the promise made earlier, which is wholly impermissible in law.
34. The other argument raised by Mr. Atma Ram is that huge amount of money was paid by furnishing bank guarantee to the tune of Rs. 1,37,17,000/- and advance EDC was deposited amounting to Rs. 29,37,083/-. The aforesaid amount has not been refunded so far on the CWP Nos. 11744 & 18518 of 2008 (O&M) 32 excuse that huge amount is still outstanding in pursuance to applications and sanction granted in respect of the Mohali and Ludhiana Projects. Respondents' Submissions:
35. On behalf of the respondents, Mr. Suvir Sehgal, learned Additional Advocate General, Punjab, Mr. Sanjeev Sharma and Mr. R.S. Khosla have argued that the basic case of the petitioner hinges on clause 10.4 and 10.4.1 to 10.4.3 of the Industrial Policy-2003, agreement dated 24.6.2005, notification dated 4.8.2005 and 5.8.2005, granting certain concessions to them and that the impugned demand of external development charges, change of land use etc. is contrary to the terms of agreement dated 24.6.2005 (P-7) and the notifications dated 4.8.2005 and 5.8.2005 (P-8). However, the demand raised against the petitioner, vide order dated 21.5.2008, by GMADA does not suffer from any illegality for the following reasons:-
(i) The agreement dated 24.6.2005 (P-7) does not grant any exemption to the petitioner from external development charges or change of land use charges. In this behalf learned counsel has drawn our attention to clause 5(iv)(c) of the agreement and argued that the change of land use qua the area under the control of Punjab Periphery Control Act is to be allowed without any charges levied by the Housing and Urban Development Department subject to the decision of various cases pending in this Court on the issue. Thus, there is no unconditional exemption from change of land use. It is subject to the court cases on the subject, which were then pending.
CWP No. 14357 of 2002 and various other writ petitions were filed in this Court seeking regularization of their constructions CWP Nos. 11744 & 18518 of 2008 (O&M) 33 made in the periphery area. During those proceedings, it was brought to the notice of this Court that the State Government has constituted a committee headed by the Chief Secretary vide order dated 10.9.2003 and the decision regarding regularization of constructions made in the periphery area will be taken in the light of the recommendations of the committee. Vide judgment dated 18.9.2003, the Division Bench disposed of the writ petitions accordingly. Meanwhile, CWP No. 7186 of 2003 was filed by way of a Public Interest Litigation, inter alia, seeking enforcement of Periphery Act and demolition of unauthorized structures. The said writ petition was dismissed on 10.11.2005. Thereafter the policy for regularization of construction in the periphery area was placed before the Council of Ministers of the State of Punjab in the meeting dated 17.11.2005. The salient features of the said policy includes:-
I) Acute shortage of accommodation in and around Chandigarh was noticed;
II) The factum of several unplanned and unauthorized colonies coming up in the vicinity of the city was noticed;
III) Necessity to strike balance and provide for planned development in the periphery area also was emphasized;
IV) Planned development and regulated construction in the periphery area for housing by private parties or Government/Semi-Government agencies has been recommended;
CWP Nos. 11744 & 18518 of 2008 (O&M) 34
V) The guidelines include regulatory measures to
regulate the activities of the developers and
charges for ensuring requisite development,
licence fee and conversion charges as per notified rates.
VI) The policy duly approved by the Council of Ministers has been notified in the official gazette after the approval of the Governor of Punjab. VII) The policy draws power not only from the various provisions of Punjab New Capital Periphery Control Act, 1952, but also from the provisions of Article 162 of the Constitution as the subject matter of policy is indisputably a field on which State has competence to legislate.
The detailed comprehensive policy dated 20.1.2006 was duly published in the official gazette. The policy dated 19.9.2007 issued in continuation of the above policy dated 20.1.2006 stipulates the rates for EDC, CLU etc.
(ii) The exemption from land use charges envisaged in clause 5(iv)
(c) of the agreement, which was subject to the decision of pending cases, thus, have to be considered and construed in the light of the decision of the pending cases pertaining to Periphery Act and the periphery policy framed upon the decision of those Court cases. It will also have to be considered and construed keeping in view various charges including land use conversion charges, external development charges etc. envisaged in the periphery policy. Thus, construed CWP Nos. 11744 & 18518 of 2008 (O&M) 35 the demand made from the petitioner is not contrary to the agreement (P-7) and is rather in consonance with clause 5(iv)
(c) thereof.
(iii) Under Clause 5(iv)(i) of the agreement (P-7) the obligation of the State Government to provide connectivity to power, roads accessibility, communication, civic and other infrastructure is on fulfillment of the terms and conditions and at such rates/fees which may not be less favourable vis-à-vis other similarly situated projects. It is submitted that the above facilities of connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project are nothing but various aspects of the external development. Ex facie, there is no exemption from payment of charges in respect thereof. The only concession contemplated is that the demand of such charges from the petitioner will not be less advantageous vis-à- vis other similar projects. Charges demanded from the petitioner are the same which have been demanded/paid by the other developers for external development for similarly situated projects. Therefore, the demand made from the petitioner, vide letter dated 21.5.2008 (P-19), does not violate the provisions of clause 5(iv)(i) of the agreement (P-7) and is indeed in complete conformity therewith.
(iv) The external development costs huge and substantial amount in providing infrastructure, the roads passing upto and providing connectivity to the project. The project of the petitioner has several kilometers of public road which is constructed by the authorities by incurring hundreds of crores of rupees. In fact, CWP Nos. 11744 & 18518 of 2008 (O&M) 36 two pockets of the petitioner's project has a distance of 6-7 kilometers. One Kilometer of public road costs the authorities an approximate amount of Rs. 33 crores. This entire amount cannot be spent by the State without charging from the beneficiaries like the petitioner. The demand of external development charges is, thus, valid, just, fair and not arbitrary or unjust.
(v) The omnibus/general clause in para 5(iv)(j) of the agreement that the project of industrial park shall be exempted from Punjab Apartment and Property Regulation Act, 1995, is not in derogation of special stipulation in respect of land use charges and developmental charges envisaged in clause (c) and (i) of the agreement set out above. Reliance has been placed on the judgment of Hon'ble the Supreme Court rendered in the case of Belsund Sugar Company v. State of Bihar, (1999) 9 SCC 620, to contend that where there is special and general provision, the latter has to give way in favour of the special provision. Learned counsel has further submitted that 'generalia specialibus non derogant' is a well acknowledged maxim of judicial interpretation. Therefore, the general omnibus provision or exemption contained in clause 5(iv)(j) does not debar the respondent from levying/demanding change of land use charges or developmental charges for providing roads etc. as per clause 5(iv)(c) and clause 5(iv)(i) of the agreement. Thus, the demand raised does not in any way contravene the agreement (P-7) CWP Nos. 11744 & 18518 of 2008 (O&M) 37
36. Learned counsel then referred to the notification dated 4.8.2005 (P-8 Colly at page 148) and argued that the approval has been granted for setting up industrial estates for about 300 acres, subject to various terms and conditions. The exemption from the applicability of all the provisions of Punjab Apartment and Property Regulation Act, 1995, except Section 32, have also been granted subject to terms and conditions contained in para 5 of the notification. Under para 5(ii) of the notification, the exemption granted is subject to strict adherence of the agreement dated 24.6.2005 (P-
7). Reiterating the submissions made with regard to the conditions of the agreement (P-7), learned counsel has submitted that the petitioner is liable to pay change of land use in terms of clause 5(iv)(c) and development charges for providing connectivity in terms of clause 5(iv)(i) of the agreement dated 24.6.2005 (P-7). According to the learned counsel, notification dated 4.8.2005 (P-8 colly at page 148) does not confer exemption from the provisions of the Punjab Apartment and Property Regulation Act, 1995, pertaining to the licence fee, change of land use and external development charges. Therefore, the demand made vide letter dated 21.5.2008 (P-19) does not in any manner contravene the notification dated 4.8.2005 (P-8 colly at page 148).
37. As regards the notification dated 5.8.2005 (P-8 colly at page
150), learned State Counsel has submitted that the same has no relevance for determination of the present controversy as it only pertains to the power/obligation of the Department of Housing and Development to acquire the land at the request of the promoters, subject to the terms and conditions contained in the said notification. Therefore, the impugned demand vide letter dated 21.5.2008 (P-19) does not in any manner contravene the notification dated 4.8.2005 (P-8 colly at page 148). CWP Nos. 11744 & 18518 of 2008 (O&M) 38
38. In respect of the notification dated 5.8.2005 (P-8 colly at page
152) it has also been submitted that the same pertains to exemption of charges for change of land use under the Periphery Act. It is in continuation of the notification dated 4.8.2005 (P-8 colly at page 148) and envisages that the petitioner will be entitled to change of land use under the Periphery Act also without any charges/fee subject to the terms and conditions stipulated in the notification dated 4.8.2005 (P-8 colly at page 148). Thus, the impugned demand made vide letter dated 21.5.2008 (P-19) does not in any manner contravene the notification dated 5.8.2005 (P-8 colly at page 152).
39. It has further been argued that the non obstante clause contained in para 6 of the notification dated 5.8.2005 (P-8 colly at page
152) provides that the condition regarding non-charging of change of land use charges in the Periphery Area is subject to the outcome of relevant case which may be pending in the High Court. The stipulation reads thus:
"The condition regarding the non-charging of the change of land use fee/charges etc. shall be subject to the outcome of any relevant case that might be pending in the High Court of the State of Punjab and Haryana."
40. It has been submitted that after the decision of CWP No. 7187 of 2003 (Dr. B. Singh v. Union Territory, Chandigarh and others), vide order dated 10.11.2005, the State Government took up the matter relating to approval and notification of the policy for providing for regulated construction in the Periphery Area. Consequently, the periphery policy was notified vide notification dated 20.1.2006. The demand of charges from the petitioner is in terms of the rates notified by the State Government vide policy instructions dated 19.9.2007 (R-1), which is in continuation of notification dated 20.1.2006.
CWP Nos. 11744 & 18518 of 2008 (O&M) 39
41. Learned State counsel summed up his arguments in the following manner:
a) Neither the agreement nor the notification envisages exemption from development charges or change of land use charges etc. In fact, as per clause 5(iv)(c) and (i), such charges are specifically envisaged to be payable. In clause 5(iv)(i), the only condition is that the demand from the petitioner will not be less favourable than the similarly situated project/promoter.
b) The general stipulations in clause (j) is subject to in any derogation of specific provision of (c) and (i) relating to change of land use and development charges.
c) The demand of change of land use, connectivity charge/development charges, made vide letter dated 21.5.2008 (P-19) is supportable and permissible as per the periphery policy dated 20.1.2006/19.9.2007. In the absence of any challenge to the said policy contemplating the demand for various charges including development charges, change of land use and licence fee, the petitioner is not entitled to resist the demand made vide letter dated 21.5.2008 (P-19).
d) The periphery policy dated 20.1.2006 and the policy dated 19.9.2007 (R-1) is uniform and casts universal obligation to pay for regulated development. It is also a regulatory measure to check unplanned and unregulated construction in the periphery area. The petitioner cannot claim any exemption therefrom without any valid basis. The periphery policy is relatable to the power conferred by the provisions of the Periphery Act and also to the executive power of the State as CWP Nos. 11744 & 18518 of 2008 (O&M) 40 contained under Article 162 of the Constitution of India. In this regard, reliance has been placed on a judgment of Hon'ble the Supreme Court rendered in the case of Pancham Chand v.
State of H.P., (2008) 7 SCC 117, wherein it has been held that "the State, although, has a general control but such control must be exercised strictly in terms of Article 162 of the Constitution of India. Having regard to the nature and the manner of the control specified therein, it may lay down a policy. Statutory authorities are bound to act in terms thereof...........".
e) In the present case the periphery policy dated 20.1.2006 has been issued after the approval of Council of Ministers and the Governor of Punjab. It has binding force qua the statutory authorities and the demand made in terms thereof does not suffer from any infirmity.
f) The Industrial Policy-2003 can contemplate the concession or grant of exemption only in respect of the industrial area. Out of 300 acres of the project, the demand in the present case pertains to only 138.35 acres only. This area pertains to residential group housing and commercial area. About the remaining 162 acres (approx.) covered by the Industrial Policy, there is no demand. The area developed by the promoter for industrial estate has not been included in the impugned demand dated 21.5.2008 (P-19). Therefore, the challenge of the petitioner that the demand contravenes the industrial policy is baseless and misconceived.
CWP Nos. 11744 & 18518 of 2008 (O&M) 41
42. It has been stated that the challenge to the demand of respondent No. 9 is misconceived as the said demand attained finality with the decision of the competent authority, vide order dated 9.4.2005 (P-5) whereby the order and directions dated 2.8.2004 (P-4), was set aside in respect of the demand raised by the PSIEC for providing connectivity. In view of the finality of the order passed by the Revisional Authority, dated 9.4.2005 (P-5), the challenge by the petitioner to the demand raised is untenable.
ANALYSIS AND CONCLUSION I. The Industrial Policy 2003 - Background
43. Before we embark upon bestowing our consideration on the claim made by the petitioners, it would be imperative to examine the Industrial Policy-2003, which is one of the basis of their contentions. The industrial policy is extremely significant and it has important bearing on various issues raised in these petitions. Referring to the earlier policy of March 1996, the Industrial Policy-2003 issued by the State Government observes that the main features of March 1996 policy were incentives and subsidies with a varying mixed of these being offered to different industries. The thrust areas then identified were agro based industry, tourism industry, electronic industry and export-oriented industry and special incentives were provided to these industries. Later on, Information Technology industry and the units set up in the rural focal points were also added to the group of industries made eligible for special consideration. A single window concept with time bound clearance for setting up new industry was another feature.
44. The Industrial Policy-2003 also took notice of the changing scenario. It was noticed that under the old policy of 1996, in addition to CWP Nos. 11744 & 18518 of 2008 (O&M) 42 continuation of incentives of capital subsidy and sales tax exemption/deferment, a scheme of modernisation and technology up- gradation for existing industry, particularly small-scale industry, was introduced. An option of availing interest subsidy or sales tax concessions was also provided under that policy. Thus, clearly the basic reliance in the 1996 policy was on direct financial incentives, in the form of subsidies and tax deferment/exemption to individual industrial units. The experience concerning industrial development indicated that it has had an indeterminate outcome. Under the old policy there was uneven and unfair advantage given to the new industries as compared to the old industries. It resulted in lower rates of growth for the old industry and even shrinkage. The Industrial Policy-2003 further noticed that old policy incentives led to adverse stress on State finances as tax exemption since 1987, amounting to Rs. 13843.48 crores had been sanctioned. The backlog of capital subsidy was found to be more than Rs. 550 crores and it has accordingly been discontinued with effect from 1.5.2000. The shift, which was required to be brought, has been noticed as follows:
"......From the role of direct promotion and direct financial assistance, the government has to change to the role of a facilitator, by creating a physical and institutional climate of investment and industry friendliness, that increased the efficiency and competitive ability of industry, or groups of industries in general, in a sustainable manner. This becomes even more critical in the era of trade liberalization brought about by the various WTO agreements, which are already in place, and will progressively come into play over the next few years. Trade liberalization is both a threat and an opportunity CWP Nos. 11744 & 18518 of 2008 (O&M) 43 and the Industrial policy needs to deal with both these aspects. The State's industry has to meet the challenges of higher product standards, environmental requirements and increased competition, while at the same time, take full advantage of new markets, inputs and technologies available. The new Industrial Policy is based on these concerns, with the following broad objectives:
To create a conducive investment climate through infrastructure creation, reduced regulations and general facilitation.
To rejuvenate and make competitive existing industry, particularly in the small scale sector through improved technology, product quality and marketing. To create a special thrust in the areas where Punjab has an edge in terms of cost and competitiveness." (emphasis added)
45. In Chapter-3 of the Industrial Policy-2003, emphasis has been laid down on hassle free dealing by creating more industry-friendly environment under various Acts like the Indian Boilers Act, 1923, Standards of Weights and Measures (Enforcement) Act, 1985, Indian Electricity Act, 1910 and Indian Electricity Rules, 1956, various environmental laws also Self Certification Scheme under Labour Laws and avoidance of exploitation of industry by trade unions. It also envisaged Monitoring Committees, which was named as 'Empowered Committee under the Chairmanship of Chief Secretary'. Composition of these Committees has also been given in detail in the policy. Emphasis has also been laid on enhancement of the competitiveness of the existing industry. CWP Nos. 11744 & 18518 of 2008 (O&M) 44 II. Industrial Policy 2003 - Fore Ground
46. For the purpose of this case, Chapter-10 of the Industrial Policy-2003, which deals with industrial infrastructure development, is extremely significant. It is envisaged that serious endeavour would be made to attract private investment and participation for creation of adequate infrastructure as well as for up-gradation of existing infrastructure. All industrial parks were to be developed through private sector or as joint ventures of private sector and public sector undertakings. The agencies of the State Government like Punjab Small Industries and Export Corporation (PSIEC) were to act as Master Planner Facilitator and Infrastructure Coordinator. Such agencies were to act as a vehicle to channelise flow of financial assistance as well as grants available under various schemes. Paras 10.4 and 10.5, which have been repeatedly referred by the learned counsel during the course of arguments, deserves to be reproduced, which is as under:-
"10.4 Following measures will be taken to encourage private sector investment in development of Industrial parks/Estates/Agro parks/IT parks :-
10.4.1 External Development Charges for Private Industrial Estate Developers In order to facilitate and encourage private participation in Industrial Parks / Estates / Information Technology Parks/ Agro Parks / Special Economic Zones in the private or joint sector shall be exempted from the Punjab Apartment and Property Regulation CWP Nos. 11744 & 18518 of 2008 (O&M) 45 Act (PAPRA) 1995, in accordance with the powers vested with the State Government under Section-44 (2) of the Act. To be entitled to avail of these benefits, the eligibility of each such park / estate / zone will be assessed and determined by the Empowered Committee for Industrial Approvals. Upon approval of the Committee, the Department of Industries will issue an eligibility certificate.
10.4.2 Change of land use Change of land use will not be required anywhere in the State except in the areas falling within the municipal limits, Chandigarh Capital periphery or planning or controlled areas and along the notified schedule roads and bye passes. However, in the case of Industries being set up in the areas other than specified above, intimation by the Industries Department about the location of the proposed unit shall be sent to Chief Town Planner, Punjab, Department of Housing & Urban Development, so as to keep the data bank regarding land use updated.
10.4.3 Sale/Transfer of developed infrastructure There shall be no stamp duty on first sale/transfer of developed infrastructure by CWP Nos. 11744 & 18518 of 2008 (O&M) 46 the developer in industrial parks / complexes as approved by the Department of Industries during the setting up of such areas and subsequently for a period of three years. Thereafter, the normal stamp duty would be chargeable on such transactions. 10.5 Development of Integrated Multiplex Complexes 10.5.1 Development of Multiplex Complexes with integrated entertainment and Shopping Centre / Complex having atleast three Cinema Halls with total minimum capacity of 1,000 seats, set up in an area of 4,000 square yards or above with minimum investment to the tune of Rs.20 crore will be encouraged in the State. The entertainment area will have Cinema Halls, Restaurants, Fast Food outlets, Video Games Parlours, Pubs, Bowling Allies, Health Spa/Centre and recreational activities. Such Complexes will be given the status of Industry. 10.5.2 Following concessions will be given to these Complexes:-
(a) 100% entertainment tax exemption for first five years.
(b) Existing Cinema Halls converting into Multiplexes shall also be entitled to 100% exemption for first five years.CWP Nos. 11744 & 18518 of 2008 (O&M) 47
(c) Liberty to fix the ticket rates by the Owners.
(d) Power tariff rates as applicable to Industry.
(e) No transfer fee except stamp duty shall be liveable on first sale of Shopping area."
III. Industrial Policy 2003 - Mega Project
47. There is then some provisions made for development of Mega Projects in Chapter-11 of the Industrial Policy-2003. The State Government is required to consider and determine a special package of incentives as well as facilitation by way of relaxation of Rules and Regulations and to make provisions for legal, institutional and financial dispensation for new as well as existing industrial units undertaking expansion. The special package of incentives was to be monitored by an Empowered Committee headed by the Chief Minister. The committee was to consider and determine as per Annexure-V of the Industrial Policy-2003, a special package of incentives as well as facilitation by way of relaxation of Rules and Regulations. The limit of fixed capital investment by a unit to become eligible for special package was fixed at Rs. 100 crores and above.
Agreement, Special Incentives, Package and Various Notifications issued by the State Government
48. The stage is now set for considering the facts of the present case in the light of the Industrial Policy-2003. It was in pursuance of the aforesaid policy that the State Government, vide letter dated 25.5.2005 CWP Nos. 11744 & 18518 of 2008 (O&M) 48 (P-6), granted special package of incentives as Mega Project to the petitioner in respect of its Mohali Project. According to the petitioner a proposal was made on 17.12.2004 to set up mixed use mega industrial project in respect of Mohali as well as Ludhiana in 500 acres. The proposal was duly considered by the Empowered Committee as per the Industrial Policy-2003 in its meeting held under the Chairmanship of the Chief Minister on 28.4.2005. The Committee approved various concessions for the mixed use mega industrial park to be set up in an area of 300 acres in Mohali with investment of Rs. 264.80 crores and the other one at Ludhiana in an area measuring 200 acres with an investment of Rs. 156.80 crores (total invesmtnet being Rs. 421.60 crores). The contents of the letter dated 25.5.2005 (P-6) in verbatim, have already been noticed in preceding para No. 10.
49. On the basis of the aforesaid letter dated 25.5.2005 (P-6), an agreement dated 24.6.2005 (P-7), was entered into between the petitioner in respect of Mohali project with the Governor of Punjab. In para 5 of the agreement various obligations, which are to be performed by the petitioner, have been incorporated. However, in clause (iv) of para 5 of the agreement dated 24.6.2005 (P-7), various incentives which has been agreed upon between the parties, have been detailed, which have already been extracted in preceding para No. 11.
50. On 4.8.2005 (P-8 Colly at Page 148), a notification was issued by the State Government and in exercise of power under Section 44(2) of the Property Regulation Act and all other powers, the Governor of Punjab exempted the petitioner in respect of Mohali Project from all the provisions of that Act except Section 32, which required that the development works are to be carried out in accordance with the lay out plan to be sanctioned by CWP Nos. 11744 & 18518 of 2008 (O&M) 49 the Chief Town Planner, Punjab. The petitioners were to strictly abide by the aforesaid legal agreement dated 24.6.2005 (P-7). They were also to adhere to the Outline Master Plan of SAS Nagar (Mohali). They were also required to deposit the entire amount in respect of the contribution to the Punjab Urban Development Fund created under Section 32 of the Property Regulation Act within a period of 30 days of the sanctioning of the layout plan.
51. Another notification, again in the name of the Governor was issued on 5.8.2005 (P-8 Colly at Page 150), it envisaged that the Department of Housing and Urban Development at the request of the petitioner were to acquire land not exceeding 10% of the total area of the project under the Land Acquisition Act, 1894, at their cost including enhancement in compensation and the departmental charges in respect of such acquisition at such rate as may be fixed. Yet another notification dated 5.8.2005 (P-8 Colly at Page 152) was also issued. In exercise of the power vested under the Periphery Act and all other powers enabling him to act, the Governor of Punjab has permitted change of land use of the project land from the existing one to "Industrial Estate" (including industrial, residential and commercial uses, as per approved norms). Paras 5 and 6 of this notification reads as under:-
"5. Now, therefore, in exercise of all the powers vested in him under the Punjab New Capital Periphery (Control) Act, 1952 (Punjab Act No. 11 of 1952) and the Punjab Regional & Town Planning & Development Act, 1995 (Punjab Act No. 13 of 1995) and all other powers enabling him to act in this behalf, the Governor of Punjab is pleased to permit change of land use of the project land from the existing one to "Industrial Estate" CWP Nos. 11744 & 18518 of 2008 (O&M) 50
(including Industrial, residential and commercial uses, as per approved norms) in the proposed Sectors of SAS Nagar (Mohali), District Ropar, in accordance with the lay-out plan sanctioned by the Chief Town Planner, Punjab, in accordance with the Punjab Government, Department of Housing & Urban Development Notification No. 18/50/2003/1HG2/7667-72 dated 4.8.2005, without charging any change of land use fee/charges etc., subject to the following condition that:-
(i) the promoters shall comply with all the terms and conditions stipulated in the Punjab Government, Department of Housing & Urban Development Notification No. 18/50/2003/1HG2/7667-72 dated 4.8.2005.
6. Nothing in this Notification shall affect, mitigate or abrogate any rights that might have accrued to the promoters under the quasi-judicial order dated 31st October, 2003, passed by the Housing & Urban Development Minister, Punjab and circulated on 31st October, 2003 as well as under consequential communications in this regard issued by the Department of Housing & Urban Development.
The condition regarding the non-charging of the change of land use fee/charges etc. shall be subject to the outcome of any relevant case that might be pending in the High Court of the States of Punjab and Haryana."
52. Likewise, another notification was issued on 25.7.2006 (P-8 Colly at Page 154). The Governor of Punjab exempted the petitioner from the provisions of the Punjab Minor Mineral Concession Rules, 1964, for CWP Nos. 11744 & 18518 of 2008 (O&M) 51 bonafide requirements of the project as per clause 5(iv)(e) of the agreement dated 24.6.2005 (P-7) for a period of five years, which was to commence from 28.4.2005.
53. In respect of the Ludhiana Project, the Governor of Punjab, in pursuance of a policy called 'New External Development Charges Policy, 2004' (issued vide notification dated 6.7.2005), has issued a notification dated 19.9.2007 (P-1 with CWP No. 18518 of 2008), to rationalize and make it more realistic and has partially modified the rates of the external development charges and licence/permission fee for residential group housing and commercial purposes in the entire State of Punjab excluding the area falling within the jurisdiction of GMADA as per the detail given in the annexure. The area of the petitioner falls within the municipal limits of Ludhiana and, therefore, is covered by the High Potential Zone-Category-I. The external development charges, conversion charges and licence / permission fee has to be levied in accordance with the following table:-
"High Potential Zone- CATEGORY-I Ludhiana, Jalandhar, Amritsar M.C. Limits & Area within radius of 5 Kms, outside M.C. limits.
(Rs. In lacs per gross acre)
Sr. Purpose External Conversion Charges Licence/
No. Development NH SH/ Other permission
Charges Sector Road fee
Road
1. Residential 26.78 5.38 4.53 3.60 3.00
(Plotted)
2. Residential 60.25 8.09 6.76 5.38 4.00
(Group
Housing) (FAR 1.75) (FAR 1.75)
3. Commercial 93.95 43.18 35.98 28.81 100.00
(FAR 1.75) (FAR 1.75)
CWP Nos. 11744 & 18518 of 2008 (O&M) 52
High Potential Zone-CATEGORY-II
Ludhiana, Jalandhar, Amritsar outside M.C. Limits within radius of 5 Kms. To 15 Kms.
(Rs. In lacs per gross acre)
Sr. Purpose External Conversion Charges Licence/
No. Development NH SH/ Other permission
Charges Sector Road fee
Road
1. Residential 22.76 5.38 4.53 3.60 3.00
(Plotted)
2. Residential 51.21 8.09 6.76 5.38 4.00
(Group
Housing) (FAR 1.75) (FAR 1.75)
3. Commercial 79.85 43.18 35.98 28.81 100.00
(FAR 1.75) (FAR 1.75)
NOTE: The conversion charges are the same in all the
categories as notified vide notification no. 17/17/01-
5HG2/6682 dated 17.8.2007. These have all been converted into per acre."
54. In respect of Mohali project, the first claim of the petitioner is for refund of the amount of bank guarantee amounting to Rs. 1,37,17,000/- as also the external development charges of Rs. 29,37,083/-, which were paid in advance. The aforesaid amount were deposited by it for obtaining a licence for developing a project of residential colony. It has also come on record that this project could not mature although against the demand raised by the PSIEC, an appeal and revision were filed. But all this went in vain. The petitioner had requested and applied for cancellation and withdrawal of its earlier application dated 2.9.2005 and the competent authority was requested to release the bank guarantee for the reason that it has applied for mega project under the new Industrial Policy-2003. Therefore, it is patent CWP Nos. 11744 & 18518 of 2008 (O&M) 53 that the aforesaid amount of bank guarantee and external development charges paid in advance are refundable to the petitioner i.e. M/s Janta Land Promoters Limited.
55. The second prayer made by the petitioner emerges from the issuance of demand dated 21.5.2008 by GMADA. The demand has been raised in two parts. A total amount of Rs. 8154.53 lacs (2038.63 + 6115.90) has been demanded on account of external development charges and a sum of Rs. 1255.07 lacs has been demanded on account of change of land use. A further demand of licence fee of Rs. 2746.50 lacs has also been raised by the same authority as is already noticed in para 16 above.
56. The question which falls for consideration is whether there is any specific stipulation in the agreement dated 24.6.2005 (P-7) or there is anything exempting the petitioner from payment of aforesaid charges in the notification issued subsequently in pursuance of that agreement. There is already a detailed examination in preceding paras of this judgment with regard to the Industrial Policy-2003 and the agreement between the petitioner and the respondent State (P-7) and the notifications issued subsequently. It is patent that the project of the petitioner is covered by the Industrial Policy-2003 being a Mega Project. According to various stipulations under para 5 of the agreement dated 24.6.2005 (P-7), the petitioner seems to have complied with its obligations and it has been given various concessions. According to clause (iv) of para 5 of the agreement dated 24.6.2005 (P-7), the petitioner has been given, inter alia, the relief and concession from payment of change of land use. Para 5(iv)(c) clearly stipulates the aforesaid relief, which reads thus:
"5(iv)(c) The land use change in the area falling under the control of the Punjab Periphery Control Act shall be allowed CWP Nos. 11744 & 18518 of 2008 (O&M) 54 without any charges levied by the Housing and Urban Development Department in accordance with the draft master layout plan of the periphery and periphery policy of the Government of Punjab. However, such concession would be subject to the decision of various cases pending in Hon'ble High Court of Punjab and Haryana on this issue. However, if any or whole part of land of the project area is not covered in any master plan or planning zone under PUDA Act, the land use thereof shall not be changed or amended and shall be incorporated as such and included in any future master plan or zoning which shall be prepared under the PUDA Act."
57. A perusal of the aforesaid clause makes it patent that the change of land use in the area falling under the control of Periphery Control Act was to be allowed without any charges being levied by the Housing and Urban Development Department in accordance with the Draft Master Layout plan of the periphery and the periphery policy of the Government of Punjab. The respondents have made an attempt to captalise from the rest of the stipulation by arguing in vain that the demand raised has to be construed in the light of the remaining portion of the stipulation. It was submitted that C.W.P. No. 7187 of 2003 was disposed of on 10.11.2005 after the letter of intent was issued on 25.5.2005 (P-6) and agreement was entered into on 24.6.2005 (P-7). It is pertinent to mention here that two writ petitions, namely, CWP No. 7187 of 2003 and 18295 of 2003 were filed by Dr. B. Singh purporting to be in public interest. In CWP No. 7187 of 2003, he sought enforcement of Section 4(2) of the Punjab Land Revenue Act, 1887, Section 22(A) of the Punjab Gram Panchayat Act and Section 15 of the Punjab New Capital (Periphery) Control Act, 1952, so as to protect the CWP Nos. 11744 & 18518 of 2008 (O&M) 55 Abadi Deh of all the villages located in the State of Punjab, Haryana and U.T., Chandigarh. Without elucidating the details of those cases, it is suffice to notice that both the aforementioned writ petitions were clubbed together and dismissed vide judgment dated 10.11.2005.
58. After dismissal of the said petitions, the respondent State notified the periphery policy for regulating construction in the periphery area. Consequently, the demand raised by the respondent-GMADA is in terms of the rates notified by the State Government by policy instructions dated 19.9.2007 (R-1), which is continuation of notification dated 20.1.2006.
59. We are afraid that the argument raised by the respondents suffers from many legal flaws. Firstly, changing of rates concerning the change of land use (CLU) or external development charges (EDC) or licence fee would not affect the stipulation made in the letter of intent dated 25.5.2005 (P-6) and the agreement dated 24.6.2005 (P-7). Likewise, the other argument that the aforesaid decision has been taken in pursuance of the order dated 10.11.2005 passed by the High Court would also not make any significant difference because the issue before us is with regard to grant of exemption from CLU, EDC and licence fee. The issue before us is not whether at what rate the charges are to be levied. As such there is no direction issued by the Court which might have changed the stipulation in the agreement. Therefore, we are of the considered view that the issue deserves to be decided in favour of the petitioner. Accordingly, the demand raised by GMADA-respondent No. 7 cannot be sustained.
60. It is well settled that once an agreement has been entered into between the parties and in pursuance of the agreement one party has changed its position to its detriment then the other party cannot resile from CWP Nos. 11744 & 18518 of 2008 (O&M) 56 the agreement. In a recent judgment rendered in the case of State of Bihar v. Kalyanpur Cement Limited, (2010) 3 SCC 274, Hon'ble the Supreme Court has reviewed the whole case law and have discussed the principle of promissory estoppel. In that case a Public Limited Company engaged in the business of Cement manufacturing and marketing operations was the writ petitioner before the High Court. On account of market forces and recession in the Cement Industry it suffered heavy losses. It was registered with BIFR which declared it as sick company in the year 2002. Accordingly, the Company sought financial assistance from various institutions which has been approved in principle subject to the condition that it would be available only if the Company obtains Sales-tax exemption for a period of five years from the State Government in terms of the Industrial Policy-1995. As a result it moved an application to the State Government on 21.11.1997 for grant of Sales-tax exemption under the Industrial Policy for a period of five years even though the Company was entitled under the aforesaid policy to claim exemption for eight years. The judgment of Hon'ble the Supreme Court has noticed various proceedings held by the State Level Committee on Rehabilitation which eventually recommended for tax exemption. The matter was also considered by the High Powered Committee and it was accepted that the benefits under the Industrial Policy-1995, which were to be given to the new units could also be given to the sick and closed units. In the year 2000 the State Government informed the lead institution that the matter was discussed in the Cabinet Sub Committee and draft notification was approved therein. However, on account of ensuing Assembly Elections it was being examined whether it was violation of Model Code of Conduct or not and that once it is sorted out action would be taken in this regard. Eventually no notification CWP Nos. 11744 & 18518 of 2008 (O&M) 57 exempting the Company from payment of Sales Tax was issued. It was stated that the Company had acted honestly and in good faith on assurances/approval given by the State of Bihar at various stages and continued with its operation in anticipation of receiving the appellant's approval at one point of time or the other. On the basis of assurance alone the Company continued its operation and their Lordships' of Hon'ble the Supreme Court placed reliance on various clauses of Industrial Policy and the doctrine of promissory estoppel while granting the relief. The principles of promissory estoppel have been laid down as under:-
" The doctrine of promissory estoppel has been developed in the administrative law of our country. In order to invoke the aforesaid doctrine, it must be established that: (a) a party must make an unequivocal promise or representation by word or conduct to the other party; (b) the representation was intended to create legal relations or affect the legal relationship, to arise in the future; (c) a clear foundation has to be laid in the petition, with supporting documents; (d) it has to be shown that the party invoking the doctrine has altered its position relying on the promise; (e) it is possible for the Government to resile from its promise when public interest would be prejudiced if the Government were required to carry out the promise; and (f) the court will not apply the doctrine in abstract. In order to invoke the doctrine of promissory estoppel, clear, sound and positive foundation must be made in the petition itself by the party invoking the doctrine and bald expressions without any supporting material would not be sufficient." CWP Nos. 11744 & 18518 of 2008 (O&M) 58
61. The first principle laid down in the aforesaid judgment is fully applicable to the facts of the present case. According to the requirement a party must make an unequivocal promise or representation by word or conduct to the other party. The present case is even on better footing because there is not only a written agreement between the parties but there are notifications issued on various dates exempting the petitioner from payment of those charges like CLU, EDC, licence fee etc. etc. The second requirement that there must be an intention to create legal relations or effect the legal relationships to arise in future have been amply fulfilled because the notifications and the written agreement which has been entered into under Article 299 of the Constitution are clear expression of the intention of the State Government. The third requirement also is fulfilled as all these documents have been placed on record. There is no doubt that the petitioner has changed its position by placing reliance on the promises and agreement/notification. In the present case the Government has not shown any intention to resile from the promise by taking the plea that public interest would be prejudiced if the Government were required to carry out the promise. The only argument raised is that the authority like GMADA was not a party to the agreement between the petitioner and the Government. Secondly, the stipulations made in the agreement were subject to the result of any pending litigation. The aforesaid pleas have already been dealt with and it is not the case of the respondent State that it could not carry out the obligations undertaken by it on account of the agreement between the parties and the notification issued thereafter.
62. In the case of Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd., (1983) 3 SCC 379, loan was advanced for construction of a hotel by the Financial Corporation and when the hotel was built up to half CWP Nos. 11744 & 18518 of 2008 (O&M) 59 portion, the Financial Corporation developed cold feet leaving the hotel management in an unenviable position. The question considered by Hon'ble the Supreme Court was whether the principles of promissory estoppel would apply or not. The answer given in unequivocal terms is as under:-
"13. Now if appellant entered into a solemn contract in discharge and performance of its statutory duty and the respondent acted upon it, the statutory corporation cannot be allowed to act arbitrarily so as to cause harm and injury, flowing from its unreasonable conduct, to the respondent. In such a situation, the court is not powerless from holding the appellant to its promise and it can be enforced by a writ of mandamus directing it to perform its statutory duty. A petition under Article 226 of the Constitution would certainly lie to direct performance of a statutory duty by 'other authority' as envisaged by Article 12."
63. These principles have followed and applied in large number of judgments viz. Jit Ram Shiv Kumar v. State of Haryana, (1981) 1 SCC 11; Union of India v. Godfrey Philips India Ltd., (1985) 4 SCC 369; State of Punjab v. Nestle India Ltd., 2004 (6) SCC 465; Express Newspapers (P) Ltd. v. Union of India, (1986) 1 SCC 133; M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, (1979) 2 SCC 409; Ester Industries Ltd. v. U.P. State Electricity Board, (1996) 11 SCC 199; B.S.N.L. v. BPL Mobile Cellular Ltd., (2008) 13 SCC 597. In the present case, the petitioners have already incurred huge expenditure and have committed itself beyond recall. As per the stipulation in the letter of intent and the agreement (P-6 and P-7), the petitioner has carved out the CWP Nos. 11744 & 18518 of 2008 (O&M) 60 area into 60% for industrial pocket, 30% for residential purposes and 10% for commercial purposes. It has further gone on to sell the industrial, residential and commercial plots after obtaining sanction to the site plan. Once the petitioner has committed itself beyond recall then the respondents cannot back out from their obligation to exempt the first sale by the petitioner to its buyer by exempting 100% stamp duty as stipulated in para 5
(iv)(a) of the agreement. Even the other obligation of acquiring 10% of the land at the cost of the petitioner has not been fulfilled. There was further stipulation in para 5(iv)(i) that the respondent State was to ensure the connectivity to power, roads, accessibility, communication, civic and other infrastructure up to the project area, which has also not been done. It has also been stipulated that the provisions of Property Regulation Act, which envisage imposition of external development charges were not to apply to the mega project. The other provisions are that the State Government was to permit the petitioner connectivity of the project area to the State transport network and also allow them to operate their own public transport system within the project area. It further stipulate connecting of the project area to the main urban centre near to the project area subject to the fulfillment of terms and conditions in this regard. A number of other concessions which flows from various sub-clauses of para 5(iv) of the agreement dated 24.6.2005 (P-7), have also been given which are required to be fulfilled by the respondent State. Therefore, we are of the view that once the petitioner has complied with its obligations and has changed its position then the State Government cannot deny the benefits like connectivity of roads, exemption from EDC and CLU charges, licence fee etc.
64. The respondents have argued that there is novation of contract by virtue of subsequent development. The concept of novation of contract CWP Nos. 11744 & 18518 of 2008 (O&M) 61 is not a one sided affair. It has to be based on consent of both the parties. Otherwise it can result into complete havoc for one of the parties. Once the parties are of sound mind and competent to contract then it follows that the obligation and stipulation made in the agreement have to be honoured. Likewise, the notification issued by the State Government in the name of the Governor cannot be brushed aside.
65. One factor which requires to be clarified is that respondent Nos. 6 and 7 - GMADA have asserted that it being a statutory body constituted under Section 29 of the Punjab Regional and Town Planning Development Act, 1995, was not a party to the agreement dated 24.6.2005 (P-7). It is pertinent to mention that GMADA came into existence on 14.8.2006. It is needless to add that all acts done by the State by following proper procedure are binding on its agencies.
66. Another issue, which requires to be discussed is the stand of respondent No. 2 i.e. the Department of Housing and Urban Development, which has stated that the benefits given to the petitioner are in the nature of State largess without considering the relevant parameters of larger public interest. It has also placed on record a memorandum dated 6.12.2006, which was submitted by none else than the leader of Shiromani Akali Dal Shri Parkash Singh Badal. In the memorandum a demand was raised that an inquiry and investigation be ordered in the matter as undue benefits are given to the petitioner. We raised specific queries on 21.5.2010 to the learned State counsel Mr. Suvir Sehgal as to whether there is any investigation/inquiry conducted by the respondent State. There was a 'stock reply' that the matter is pending. There is no interim order either by this Court or by any other Court which might be hindrance in making inquiry, especially when the complainant who presented the memorandum to the CWP Nos. 11744 & 18518 of 2008 (O&M) 62 then Governor is presently himself at the helms of affairs since 2.3.2007 after a period of three months from the date of presentation of the memorandum. Therefore, we do not find any substance in the stand taken by respondent No. 2.
67. After the judgment in these petitions was reserved, an application, namely, C.M. No. 10531 of 2010 in CWP No. 11744 of 2008 was filed by the petitioner Company on 5.8.2010, for placing on record an additional affidavit. It has been disclosed in the additional affidavit dated 5.8.2010 that the respondent State has issued a notification dated 22.6.2010 (Annexure A) and has announced much lower rate of EDC, CLU and licence fee. On that basis a revised tentative demand was raised by the respondent State on 30.7.2010 (Annexure B). A total sum of Rs. 495.92 lacs was demanded apart from the interest on EDC etc. The petitioner deposited Rs. 293.85 lacs vide demand draft, being 25% of the amount subject to certain conditions. However, another additional affidavit dated 19.8.2010 was also filed by the petitioner Company along with C.M. No. 11407 of 2010 in CWP No. 11744 of 2008, bringing on record a letter dated 17.8.2010. In the said letter it was stated that some clarifications have been sought from the State Government and the revised demand notice dated 30.7.2010 earlier issued be deemed to be cancelled (Annexure E).
68. Both the applications came up for consideration of this Court and notice was issued for 10.9.2010. The respondent State has filed reply stating that the proposal was put up before the Chief Administrator, GMADA, for ex post facto approval on 9.8.2010 and it was found that the revised demand notice had been wrongly issued (R-1/5). The Department of Housing and Urban Development has asserted in para 7 of its reply that the Chief Administrator, GMADA was to take decision at its own level. CWP Nos. 11744 & 18518 of 2008 (O&M) 63 However, a new argument has been raised that the earlier exemption granted did not cover the establishment of Mega Projects, as is evident from the notification dated 23.6.2005 (Annexure R-1/8).
69. A separate reply has also been filed by the non-applicant- respondent No. 7, namely, GMADA, which has taken the stand that on account of mistake, the revised demand was issued, which was without considering the Periphery Policy dated 20.1.2006.
70. After hearing learned counsel it becomes evident that no useful purpose has been served by issuing a revised demand notice. Eventually the notice dated 30.7.2010 (Annexure B) for revised demand has been withdrawn.
71. In reply to the application a new issue has been sought to be raised, namely, that the Mega Projects were not covered by notification dated 23.6.2005 (R-1/8), therefore, the petitioners are not entitled to take any advantage of that notification. Even that argument lacks substance because agreement dated 24.6.2005 (P-7) clearly stipulated by its clause 5
(iv)(c) that the land use change in the area falling under the Punjab Periphery Control Act shall be allowed without any changes, hence, the concession to Mega Projects put forward by the petitioners is covered by the stipulation made between the parties and is in the binding nature under Article 299 of the Constitution.
72. On principles, precedents and agreements by the respondent- State, which is binding under Article 299, these petitions succeed. We hold that the agreement dated 24.6.2005 duly executed between the parties is valid and binding on both the parties as per the subsequent notifications (P- 8 Colly). Accordingly, the respondents are directed to refund the amount of bank guarantee, amounting to Rs. 1,37,17,000/- and also refund the external CWP Nos. 11744 & 18518 of 2008 (O&M) 64 development charges of Rs. 29,37,083/-. The demand notices dated 16.7.2004 (P-3), 21.5.2008 (P-19), 22.8.2007 (P-22) and notice dated 24.6.2008 (P-25) are also quashed. The order dated 21.5.2008 (P-19) raising the demand on account of external development charges /licence fee/change of land use for the mega project is also quashed. Likewise, the order dated 8.7.2008 (P-6 in CWP No. 18518 of 2008), refusing to consider the case of the petitioner for change of land use in respect of 13.63 acres of land at Ludhiana and similar order dated 3.7.2008 asking for external development charges (P-7) are also hereby quashed. The petitioners are also held entitled to cost, which is determined at Rs. 50,000/- for each of the petition. It is needless to observe that the petitioner Company would be entitled to claim return of Rs. 293.85 lacs earlier deposited pursuant to tentative demand notice dated 30.7.2010 (which was eventually deemed to be withdrawn vide letter dated 17.8.2010).
73. The writ petitions stands disposed of in the above terms along with all the miscellaneous applications.
(M.M. KUMAR)
JUDGE
(JORA SINGH)
November 26, 2010 JUDGE
Pkapoor