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Madhya Pradesh High Court

M/S Oasis Build Mart Pvt. Ltd. vs Jabalpur Development Authority on 4 May, 2017

Author: Anurag Shrivastava

Bench: Anurag Shrivastava

                                              W.P. No. 20854/2016
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     HIGH COURT OF MADHYA PRADESH PRINCIPAL
                SEAT AT JABALPUR


(Division Bench: Hon'ble Shri Justice S.K. Gangele
& Hon'ble Shri Justice Anurag Shrivastava)


                     W.P. No. 20854/2016.

              M/s. Oasis Build Mart Pvt. Ltd.
                            Versus
         Jabalpur Development Authority and another.


                      **********
Shri Sanjay Agrawal, Advocate for the petitioner
Shri Prashant Singh and Shri Manas Verma, Advocates for
the respondent.
                      **********


                       ORDER

(Pronounced on 04/05/2017) Per S.K. Gangele J Petitioner has filed this petition for quashment of the order dated 28/09/2016 Annexure P/39. The petitioner is a private limited company incorporated under the provisions of Indian Companies Act, 1956. Respondent no. 1 is a statutory body constituted under the provisions of M.P. Nagar Tatha Gram Nivesh Adhiniyam, 1973.

2. On 16/02/2007, respondent no.1 authority published notice inviting tenders for corporate development/ Multiplexes/shopping complex at Block No. C area 9014.80 square meters situate at scheme no. 11, II Phase, Shatabdipuram, Jabalpur.

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3. Pursuant to the tender notice, the petitioner and other persons submitted their tenders. The tender of the petitioner-company was highest, it was accepted by the allotment committee. Decision of the committee was placed before the Board of Directors, it was accepted in the meeting of the Board of Directors held on 27/02/2007. Respondent no. 1 communicated the fact of acceptance of offer to the petitioner vide letter dated 14/03/2007 and the company was required to pay total premium amount of Rs. 8,22,60,050/-. Initially the petitioner-company was directed to deposit 25% of the total premium amount i.e. 2,05,65,013/- within a period of 30 days from the date of the letter. The petitioner-company accepted the offer and deposited 25% of the total premium amount within the stipulated period.

4. An agreement was executed between the petitioner- company and respondent no. 1 on 17/04/2007, the area as advertised was reduced to 8530.99 square meter and the premium was also reduced to Rs. 7,78,45,284/-. Subsequently, vide another letter dated 19/09/2007, respondent no. 1 authority increased the area of lease from 8530.99 square meter to 10735.96 square meter and the premium was also increased to Rs. 9,79,65,635/-. The petitioner-company was directed to deposit additional W.P. No. 20854/2016 3 amount of Rs. 39,25,869/-. As per the terms and conditions of the contract, the petitioner-company had deposited an amount of Rs. 41,50,000/- in this regard accordingly. As per the agreement, the petitioner-company was to deposit remaining amount in installments. The possession of the land was delivered to the petitioner- company. The petitioner-company requested the respondent Jabalpur Development Authority for extension of time to deposit the remaining amount vide letter dated 04/05/2009. The petitioner pleaded that in view of the recession in Housing and Commercial Construction Industry sometime may be granted to the petitioner to deposit remaining amount. The Board accepted the request and communicated to the petitioner vide letter dated 27/06/2009 that the petitioner-company could deposit remaining amount which was near-about six crores including interest within a period of four years in eight installments. As per the petitioner-company it had deposited total amount of Rs. 7,20,18,504/- upto 5 th April, 2012. As on 31/03/2012, the petitioner-company was required to pay balance amount of premium near-about Rs. 2,59,47,131/-.

5. The committee who granted approval for construction of building consisting of Commissioner, W.P. No. 20854/2016 4 Jabalpur as President granted permission to the petitioner to construct the complex with a condition that the petitioner has to obtain permission from Municipal Corporation, Jabalpur, Town and Country Planning Department, Jabalpur, Fire Authority, House Construction and M.P. Electricity Board for Electricity Security vide letter dated 01/04/2010. The Joint Director, Town and Country Planning, Jabalpur vide letter dated 10/06/2011 granted permission to the petitioner-company on certain terms and conditions. The Municipal Corporation, Jabalpur also granted permission and approved the plan vide letter date 07/06/2011. The aforesaid facts demonstrate that the petitioner finally accorded permission of construction of the complex in accordance with the agreement by various authorities on 07/06/2011.

6. Vide order dated 28/03/2011, the Assistant Commissioner, Income Tax directed the petitioner-company to deposit an amount of Rs. 2,30,42,204 towards TDS out of total amount of premium payable by the petitioner- company to the respondent authority. The Income Tax Commissioner has held that the lease premium paid by the petitioner-company to Jabalpur Development Authority was a rent paid in advance, hence, in accordance with the provisions of section 194(1) of the Act, the petitioner- W.P. No. 20854/2016 5 company is liable to pay TDS on the rent amount. The petitioner-company deposited the aforesaid amount. The petitioner-company wrote a letter on 28/04/2011 to the respondents authority to explain that whether the payment should be made by the petitioner or the Development Authority is liable to pay the amount because as per the terms and conditions of the agreement, the petitioner- company is not the owner of the complex. The ownership is with respondent no. 1 and respondent no. 1 had received premium of lease. The respondent did not answer the letter.

7. After obtaining sanction and permission and after completing legal formalities the petitioner-company started construction work in accordance with sanction plan on the lease land. It had also invested an amount of Rs. Six crores towards that. It had entered into agreements for sale of commercial and residential units being constructed in its project with number of persons. As per the petitioner company, it had entered into agreements with near-about 26 persons. List of the persons has been filed as Annexure P/26 with the petition and when the construction was not completed by the petitioner-company, some persons filed application before the Consumer Court and Court passed orders.

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8. The petitioner-company filed an appeal against the order of the Assistant Commissioner, Income Tax before the Commissioner, Income Tax, Bhopal. The Commissioner, Income Tax vide order dated 09/04/2012 allowed the appeal with the following observations:-

"5. The impugned order as well as the application and submission of the applicant were carefully examined. The agreement between the JDA and the applicant was also perused. At the outset it is held that the AO erred in considering the agreement amount of Rs. 7,78,45,284/- for short direction under section 194(1) of the Act. Instead of Rs. 2,82,15,550/- being the amount actually paid to JDA and so accounted for in the books of accounts. On a perusal of the agreement between the two parties it is seen that the same was clearly an agreement of builder/developer and there was no intention to lease the land in question to the applicant for its user. The payment made to JDA resulted in the acquisition of a right in sell property under that agreement and no other right. The term "premium" in this instance cannot be over- stretched to mean rent. Further as per clause 22 of the builder/ developer agreement between JDA and the applicant, the applicant was never given the possession of the subject land either as owner or leasee sub-leasee or tenant but it was given possession of the subject land only as a builder with the restricted right of entry for making the construction on the subject land. In spite of making payment of premium of JDA, the applicant was never entitled to derive any right in the land as owner or in any other capacity. In fact, clause 25 of the agrement specifies that the applicant would be liable to pay lease rent in case the construction work of the building is not completed within four years. This clearly belies any intention to charge lease rent during the expected normal period of construction. Lastly, while the amount to be paid to JDA is Rs. 7,78,45,284/- the entire project cost has been estimated at Rs. 47,12,49,299.92/-. Thus, the land cost comes to about 20.7% of the W.P. No. 20854/2016 7 total project cost which approximates the ratio of land to total cost in such projects. In case this payment made to JDA was for rent, it would not have been close to the market value of the land, but would have been a fraction of it. In fact, the entire scheme of the agreement is for the builder/developer to bid for the market value of the land and to later recover the same by selling the construction units.

6. In view of the above, the impugned orders under Section 201(1) of the Act, in so far as it relates to short deduction under Section1941 of the Act on payment of Rs. 7,78,45,284/- made to TDS and the consequent interest charged under Section 201(1A) of the Act, are hereby cancelled."

9. On 22.03.2013, respondent no. 1 issued a notice to the petitioner-company that the petitioner-company was allotted the land on 17.04.2007, an agreement was also executed, however, the petitioner-company did not pay the amount of premium to the respondent, hence, the petitioner-company is directed to show-cause why the allotment be not cancelled and the amount deposited by the petitioner be not forfeited.

10. The petitioner-company submitted its reply on 08.04.2013 and pleaded that it had already deposited total amount of Rs. 7,20,18,504/-. The petitioner-company had also deposited an amount of Rs. 2,30,42,204/- as TDS with the Income Tax department, however, the liability to pay TDS was of the Development Authority because an appeal was pending and the petitioner-company had made request to the Development Authority to suspend the W.P. No. 20854/2016 8 payment of installment on account of payment of TDS amount and now the appeal has been decided, hence, the petitioner is willing to deposit rest of the amount within 30 days and the registry of the land be executed accordingly. The petitioner-company specifically pleaded that if the authority agrees to execute the registry of the lease land then the petitioner is willing to deposit remaining amount within 30 days. However, the Board of Directors of the respondent authority had taken a decision to cancel the allotment of the land to the petitioner in its meeting held on 23.12.2013 and the same was communicated to the petitioner on 24,12,2013.

11. Prior to passing of the resolution of cancellation of allotment of land to the petitioner, the Chief Minister of the State on 21.12.2013 dissolved all the Boards of Development Authorities, hence, the Government dissolved the Board of Jabalpur Development Authority vide order dated 23.12.2013 because the Board was dissolved prior to passing of resolution of cancellation of allotment of land of the petitioner-company i.e. on 23.12.2013, the aforesaid resolution became null and void. A PIL was filed before this Court which was registered as W.P. No. 3192/2014 challenging the resolution of the Board of Directors dated 23.12.2013, this court disposed of that writ petition with W.P. No. 20854/2016 9 direction to the State Government to decide the legality and validity of the resolution dated 23.12.2013. In pursuant to the aforesaid direction, the Principal Secretary, Urban Administration and Development, Government of M.P. Vide order dated 18.11.15 declared the resolution of the Board dated 23.12.2013 as null and void. The petitioner-company also filed a writ petition before this Court challenging the legality of the resolution of the Board dated 23.12.2013 which was registered as W.P. No. 41/2014, same was disposed of vide order dated 24.02.2016 with a direction to consider the case of the petitioner-company.

12. The petitioner company submitted a detail reply on 06.08.2016. The petitioner-company in the aforesaid reply submitted that vide order dated 27.06.2009, the authority accepted the request of the petitioner and granted time to deposit the premium of amount upto 31.03.2012. Copy of the reply filed by the petitioner-company annexed in the petition as Annexure P/38. The petitioner-company had deposited a total amount of Rs. 7,20,18,504/-. It had also deposited an amount of Rs. 2,30,42,204/- against TDS with the Income Tax Department, however, the liability was of the respondent-authority. The Joint Director of Town and Country Planning, Municipal Corporation accorded W.P. No. 20854/2016 10 sanction upto June 2011, thereafter, the petitioner- company had started construction as per sanction plan. Jabalpur Development Authority stopped construction work vide letter dated 11.06.2012 without any reason. The petitioner-company had invested an amount of Rs. Six crores. The petitioner-company also paid an amount of 50,00,000/- to the development authority, however, amount was not accepted. The petitioner-company paid the amount through RTGS in April, 2012 in the account of the respondent authority, however, the State Officer informed the petitioner-company not to pay the amount. The petitioner-company had also entered into agreements with 50 persons for sale of commercial and residential premises, but it could not proceed with the construction. The petitioner-company already informed the respondents that it is willing to pay balance amount within 30 days subject to execution of lease deed. In such circumstances the petitioner-company is not responsible for non-deposit of the amount. The petitioner-company further pleaded that it is willing to deposit the remaining amount within a period of 30 days with interest with liberty to dispute the payment of interest on balance amount. The petitioner- company further pleaded that it had already informed the respondent-authority that petitioner-company is willing to W.P. No. 20854/2016 11 deposit balance amount with interest within 30 days subject to execution of lease deed, thereafter vide impugned order dated 28/09/2016 Annexure P/39 the respondent authority cancelled the allotment of land, of the petitioner-company. It is alleged that on 26.04.2016, possession of the land was also taken by the authority.

13. In reply to the petition, the respondents-authority pleaded that the petitioner-company had not paid the premium amount as per the terms and conditions of the agreement. It had made persistent defaults towards the payment of premium amount, details have been mentioned in the impugned order. As per the terms and conditions of the agreement, Rule 15 of M.P. Nagar Tatha Gram Nivesh Viksit Bhumiyon, Grihon, Bhawano Tatha Anya Sanrachnaon Ka Vyayan Niyam, 1975, if the amount of installments be not paid the Chairman of the Board of Development Authority is empowered to cancel the allotment of land and forfeit the amount deposited by the purchasers. Because there was gross violation on the part of the petitioner-company, hence, the allotment of land to the petitioner-company is hereby cancelled.

14. Learned counsel appearing on behalf of the petitioner company has contended that cancellation of allotment of land by the respondent is arbitrary and illegal. W.P. No. 20854/2016 12 The petitioner-company was willing to deposit the amount of installments with interest. The petitioner-company could not be held liable for delay in making payment of installment. It has already paid substantial amount of near about eight crores. The respondent-authority in violation of terms and conditions of the contract stopped the construction of building upto that time the petitioner- company already invested near-about six crores rupees in construction, hence, cancellation of allotment is illegal and arbitrary.

15. Learned counsel for the respondent-authority has submitted that the petitioner-company has violated the provisions of the agreement i.e. in not depositing the installments of lease premium amount within time. There is inordinate delay, hence, the authority has rightly cancelled the allotment of land of the petitioner-company.

16. Before adverting to the rival contentions of the parties and the arguments advanced by the learned counsel for the petitioner-company and respondents- authority we would like to consider the legal principle in regard to interference by the High Court in exercise of powers under Article 226 of the Constitution in a contractual matter and the principle of maintainability of writ petition. The Apex Court in State of Kerala and W.P. No. 20854/2016 13 others Vs. M.K. Jose reported in (2015) 9 SCC 433 has considered the principle of law on the above subject in detail and also considered the previous judgments on the subject. The Apex Court in paras 16 to 20 has held as under:-

"16. Having referred to the aforesaid decisions, it is obligatory on our part to refer to two other authorities of this Court where it has been opined that under what circumstances a disputed question of fact can be gone into. In Gunwant Kaur v. Municipal Committee, Bhatinda[8], it has been held thus:-

"14. The High Court observed that they will not determine disputed question of fact in a writ petition. But what facts were in dispute and what were admitted could only be determined after an affidavit-in-reply was filed by the State. The High Court, however, proceeded to dismiss the petition in limine. The High Court is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right to relief questions of fact may fall to be determined. In a petition under Article 226 the High Court has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition. Rejection of a petition in limine will normally be justified, where the High Court is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it W.P. No. 20854/2016 14 in the writ jurisdiction, or for analogous reasons.

15. From the averments made in the petition filed by the appellants it is clear that in proof of a large number of allegations the appellants relied upon documentary evidence and the only matter in respect of which conflict of facts may possibly arise related to the due publication of the notification under Section 4 by the Collector.

16. In the present case, in our judgment, the High Court was not justified in dismissing the petition on the ground that it will not determine disputed question of fact. The High Court has jurisdiction to determine questions of fact, even if they are in dispute and the present, in our judgment, is a case in which in the interests of both the parties the High Court should have entertained the petition and called for an affidavit-in- reply from the respondents, and should have proceeded to try the petition instead of relegating the appellants to a separate suit." [Emphasis added]

17. In ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd.[9], a two-Judge Bench after referring to various judgments as well as the pronouncement in Gunwant Kaur (supra) and Century Spg. And Mfg. Co. Ltd. v. Ulhasnagar Municipal Council[10], has held thus:-

"19. Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the parties to a suit. In the above case of Gunwant Kaur this Court even went to the extent of holding that in a writ petition, if the facts require, even oral evidence can be taken. This clearly shows that in an appropriate case, the writ court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact.

xxxxx xxxxx xxxxx

27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:

(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.

(b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.

(c) A writ petition involving a consequential relief of monetary claim is also maintainable.

While laying down the principle, the Court sounded a word of caution as under:-

"28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks[11].) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction".

18. It is appropriate to state here that in the said case, the Court granted the relief as the facts were absolutely clear from the documentary evidence brought which pertain to interpretation of certain clauses of contract of insurance. In that context, the Court opined:-

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".51... The terms of the insurance contract which were agreed between the parties were after the terms of the contract between the exporter and the importer were executed which included the addendum, therefore, without hesitation we must proceed on the basis that the first respondent issued the insurance policy knowing very well that there was more than one mode of payment of consideration and it had insured failure of all the modes of payment of consideration. From the correspondence as well as from the terms of the policy, it is noticed that existence of only two conditions has been made as a condition precedent for making the first respondent Corporation liable to pay for the insured risk, that is: (i) there should be a default on the part of the Kazak Corporation to pay for the goods received; and (ii) there should be a failure on the part of the Kazakhstan Government to fulfil their guarantee".

And it eventually held:-

"51..... We have come to the conclusion that the amended clause 6 of the agreement between the exporter and the importer on the face of it does not give room for a second or another construction than the one already accepted by us. We have also noted that reliance placed on sub-clause (d) of the proviso to the insurance contract by the Appellate Bench is also misplaced which is clear from the language of the said clause itself. Therefore, in our opinion, it does not require any external aid, much less any oral evidence to interpret the above clause. Merely because the first respondent wants to dispute this fact, in our opinion, it does not become a disputed fact. If such objection as to disputed questions or interpretations is raised in a writ petition, in our opinion, the courts can very well go into the same and decide that objection if facts permit the same as in this case".

19. In this regard, a reference to Noble Resources Ltd. v. State of Orissa and Another[12] would be seemly. The two-Judge Bench referred to the ABL International (supra), Dwarkadas Marfatia & Sons v. W.P. No. 20854/2016 17 Board of Trustees, Port of Bombay[13], Mahabir Auto Stores v. Indian Oil Corp.[14] and Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai[15] and opined thus:-

"29. Although the scope of judicial review or the development of law in this field has been noticed hereinbefore particularly in the light of the decision of this Court in ABL International Ltd. each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise the power of judicial review. In a case where a public law element is involved, judicial review may be permissible. (See Binny Ltd. v. V. Sadasivan[16] and G.B. Mahajan v. Jalgaon Municipal Council[17].)"

Thereafter, the court proceeded to analyse the facts and came to hold that certain serious disputed questions of facts have arisen for determination and such disputes ordinarily could not have been entertained by the High Court in exercise of its power of judicial review and ultimately the appeal was dismissed.

20. We have referred to the aforesaid authorities to highlight under what circumstances in respect of contractual claim or challenge to violation of contract can be entertained by a writ court. It depends upon facts of each case. The issue that had arisen in ABL International (supra) was that an instrumentality of a State was placing a different construction on the clauses of the contract of insurance and the insured was interpreting the contract differently. The Court thought it apt merely because something is disputed by the insurer, it should not enter into the realm of disputed questions of fact. In fact, there was no disputed question of fact, but it required interpretation of the terms of the contract of insurance. Similarly, if the materials that come on record from which it is clearly evincible, the writ court may exercise the power of judicial review but, a pregnant one, in the case at hand, the High Court has appointed a Commission to collect the evidence, accepted the same without calling for objections from the respondent and quashed the order of termination of contract."

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17. On the basis of the decision quoted above in which the Apex Court has considered the earlier decisions of the Court, the principles of law in regard to maintainability of writ petition on contractual case is that in a proper case, the writ petition against the State or instrumentality of the State is maintainable and merely because some disputed questions of facts arise, the same cannot be a ground to refuse to entertain the writ petition. Public interest may be one of the factor to exercise the power of judicial review in a case where the public law elements is involved, judicial review may be permissible. However, if there are serious disputed questions of facts have arisen for determination such dispute ordinarily could not have been entertained.

18. In the present case the petitioner-company was allotted a land which was reserved for corporate development/ Multiplexes/shopping complex. Petitioner- company had deposited 25% of the amount as per the terms and conditions of the agreement. The petitioner- company had to complete the construction work on the land as per the sanctioned map and layout plan and thereafter, the petitioner-company can sell the house and shops and complex and receive the premium amount. The petitioner had to pay premium to the Development Authority. Authorized person of the Development Authority W.P. No. 20854/2016 19 approved the layout plan and petitioner-company had to obtain necessary permission from the departments of the Government for the purpose of construction of the complex. As per agreement owner-ship of the complex shall remain with the Development Authority and the petitioner had to pay premium of the lease rent and as per the clause 24 of the agreement after completion of construction Chief Executive Officer has control on the premises and the petitioner-company has to comply the directions of the Chief Executive Officer. The possession of the land shall be delivered to the petitioner-company from the date of execution of the agreement, the petitioner would not get any right of owner-ship on the land. It could start construction after obtaining relevant sanction from the concern departments. The petitioner was required to complete the construction within four years. The petitioner-company has been given right to allot the shops and houses to the persons as per the directions of the Government. The authority shall execute sale deeds and lease deeds in favour of the aforesaid persons and they had to deposit required lease rent with the Authority. The petitioner had to comply the rules of 1975.

19. The admitted fact is that the petitioner had submitted an application for extension of time to deposit W.P. No. 20854/2016 20 installments and vide order dated 27.06.2009, the petitioner-company was granted four years time to deposit the installment upto 05/04/2012. As per the aforesaid letter, petitioner had to deposit rest amount within a period of four years. The petitioner-company deposited amount of Rs. 7,20,18,504/- upto 31.02.2012. It had also deposited an amount of Rs. 2,30,42, 204/- towards TDS in pursuant to the direction of the Assistant Commissioner of Income Tax. Subsequently, the aforesaid order was cancelled. Prima facie the liability to pay the TDS was not of the petitioner-company as held by the appellate authority and in accordance with section 194(1) of the Income Tax Act. The explanation of rent as mentioned in the section prescribes that rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or Building or Land apartment to a building. Admittedly, the land is of ownership of the authority and it has received the amount as lease premium.

20. The petitioner-company accorded permission for construction of the complex from various Govermment Departments in June 2011 for this petitioner-company could not be held responsible. Thereafter it had started construction and invested near-about six crores in the W.P. No. 20854/2016 21 construction. It means that the petitioner-company had invested total amount of near-about fifteen crores rupees. Seven crores paid to the Development Authority, six crores in construction and more than two crores with Income Tax Department. The petitioner-company also entered into agreements for sale of the residential and commercial shops with 50 persons. The construction has also been made upto some extent. The petitioner-company informed the authority in pursuance to the show-cause notice that it is willing to pay the remaining amount with interest within 30 days subject to condition that the authority shall execute the lease deed, the authority cancelled agreement and allotment of land of the petitioner which was in favour of the petitioner-company only on the ground that the petitioner had not paid the premium amount within time. The authority did not consider other facts as mentioned in this order. The public element has also not been considered by the authority. Hence, the decision of the authority, cancellation of agreement and allotment of land in favour of the petitioner is arbitrary and contrary to law.

21. In our opinion, the public element is also involved in this case because the petitioner-company has invested an amount of Rs. 15 crores a substantial amount more than 80% of the premium has been paid by the petitioner. W.P. No. 20854/2016 22 Actually the petitioner-company have to pay at the time of agreement an amount near-about Rs. 10 crores. If the project is cancelled then the interest of 50 persons who had entered into agreements with the petitioner-company for purchase of residential premises and commercial shops would be adversely affected. The construction has already been made upto some extent. The petitioner company spent near-about six crores in construction, hence, in our opinion, it would be just and proper to grant time to the petitioner to pay rest of the premium amount with interest and the Development Authority shall also execute the lease deed in favour of the petitioner-company.

22. Consequently, the petition is disposed of with the following directions:-

The impugned order of cancellation of agreement and allotment of land in favour of the petitioner-

company Annexure P/39 dated 28.09.2016 is hereby quashed. It is further ordered that the petitioner shall pay the rest of the premium amount with interest at the rate of 9% per annum as due against the petitioner within a period of 30 days from the date of receipt of the copy of the order to the Development Authority, shall execute the lease in favour of the petitioner-company and deliver possession. In W.P. No. 20854/2016 23 accordance with the terms and conditions of the contract petitioner-company shall complete the construction within the time limit as may be prescribed by the authority.

No order as to costs.

Certified copy as per rules.

         (S.K. GANGELE)            (ANURAG SHRIVASTAVA)
            JUDGE                          JUDGE



MISHRA