M/S Xanadu Estates Private Limited vs State Of U.P. And 2 Others on 24 February, 2025

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Allahabad High Court

M/S Xanadu Estates Private Limited vs State Of U.P. And 2 Others on 24 February, 2025

Author: Mahesh Chandra Tripathi

Bench: Mahesh Chandra Tripathi





HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


Neutral Citation No. - 2025:AHC:25731-DB
 
AFR
 
Reserved on : 27.11.2024
 
Delivered on : 24.02.2025
 
Court No. - 42
 

 
Case :- WRIT - C No. - 26640 of 2021
 

 
Petitioner :- M/s Xanadu Estates Private Limited
 
Respondent :- State of U.P. and 2 Others
 
Counsel for Petitioner :- Prateek Sinha
 
Counsel for Respondent :- Kaushalendra Nath Singh
 

 
Hon'ble Mahesh Chandra Tripathi,J.

Hon'ble Prashant Kumar,J.

TABLE OF CONTENTS S.No. HEADING Page nos.

Facts of the case 01-10 2 Arguments on behalf of petitioner 10-12 3 Arguments on behalf of respondents 12-17 4 Analysis & Conclusions 18-21

1. Heard Sri Amit Shukla, Advocate holding brief of Sri Prakeek Sinha, learned counsel for the petitioner, Sri Devesh Vikram, learned Additional Chief Standing Counsel and Sri Mohan Srivastava and Sri Fuzail Ahmad Ansari, learned Standing Counsel for State-respondents and Sri Manish Goyal, learned Senior Advocate assisted by Sri Kaushalendra Nath Singh and Ms. Anjali Gokhlani, learned counsel for the respondent-NOIDA.

FACTS OF THE CASE

2. New Okhla Industrial Development Authority1 sometime in the year 2011 floated a scheme known as "Sports City-II" which was to be developed in Sectors 78, 79 and 150 of NOIDA. The scheme was launched on 03.03.2011 and closed on 24.03.2011. As per the Scheme, a Sports City was to be developed on a land parcel of 72.75 hec. in Sector 78, 79 and another in Sector 150 of NOIDA. The reserve price for the scheme was set at Rs.11,500/- per square metre. The price was purposely kept low as the developer was supposed to create sports facilities over 70% of the entire land allotted to them, which was not marketable, and on top of it, the developer had to infuse his funds to develop the same. In the remaining 30% of the land, (28% was meant for Group Housing and 2% for commercial purpose). The scheme clearly stated that the population density in this Sports City would be 1650 people per hectare. In this scheme, maximum permissible Floor Area Ratio2 of the total land was 1.5. The open/green area of the recreational component (i.e. sports activities such as Golf course, stadium etc. and open spaces) was to be considered as open green areas for the entire land. The brochure of the Sports City laid down conditions for the development of Sports City. The relevant part of the brochure is as follows:-

" The shareholding of the lead member in the consortium shall remain at least 30% till the temporary occupancy/completion certificate of at least one phase of the project is obtained from the Noida.

In case of Consortium, the members shall submit a Memorandum of Agreement (MOA) conveying their intent to jointly apply for the scheme(s), and in case the plot is allotted to them, the MOA shall clearly define the role and responsibility of each member in the consortium, SPCs that will subsequently carry out all its responsibilities as the allottee, and will have to construct on their own a minimum of 30% of the total permissible FAR on allotted area.

The "Lead Member" shall continue to hold at least 30% of the shareholding in the SPC till the temporary occupancy/completion certificate at least one phase of the project is obtained from the NOIDA In case of default in depositing the installments or any payment, interest @ 14% compounded half yearly shall be leviable for defaulted period on the defaulted amount.

The Lessee shall be required to complete the construction of minimum 15% of the permissible area earmarked for sports, institutional and other facilities within a period of 3 years from the date of execution of Lease Deed and shall complete the project in phases within 5 years. However, the residential and commercial development/construction may be completed in phases within 7 years.

Further more, the lessee has to develop residential and commercial component in the project in proportion to area earmarked for recreational uses.

The 'Completion Certificate' will be issued by the NOIDA on the completion of the project or part thereof in phases and on the submission of the necessary documents required for certifying the completion of the project or part thereof.

The lessee shall execute an Indemnity bond Indemnifying the NOIDA against all disputes arising out of non-completion of the project.

Without obtaining the completion certificate the lessee shall have the right to sub-divide the allotted plot into suitable smaller plot as per the planning norms of the NOIDA only for the area available for residential and commercial use and to transfer the same to the interested parties, if any, with the prior approval of the NOIDA on payment of transfer charges at the rate prevailing on the date of transfer.

After the written approval of the Lessor/NOIDA Authority, the lessee can implement/develop the project through its multiple subsidiary companies in which the allottee/lessee company shall have minimum 90% equity share holdings Choose an account Sub lease of land/built-up area shall be allowed on the basis of approved layout and building plans by NOIDA.

NOIDA will monitor the implementation of the project. Applicants who do not have a firm commitment to implement the project within the time limits prescribed are advised not to avail the allotment."

3. In response to the advertisement, only two companies applied for this project first being M/s Wave Pvt. Ltd, which had applied at the reserved price and the second was a consortium of petitioner-company namely M/s Xanadu Estates Pvt. Ltd., (Lead Member) and 8 other companies (being the Relevant Members). The consortium members and their shareholdings in the consortium were as follows-

Sl.No. Members Status % of share holding of lead and relevant member in the consortium 1 M/S Xanadu Estates Pvt. Ltd.

Lead 30% 2 M/S Meriton Infotech Pvt. Ltd Relevant 5% 3 M/S Sutlej Agro Products Ltd Relevant 5% 4 M/S Xanadu Infradevelopers Pvt. Ltd.

Relevant 10% 5 M/S Xanadu Infatech Pvt. Ltd.

Relevant 10% 6 M/S Xanadu Realcon Pvt. Ltd Relevant 10% 7 M/S Sequel Buildcon Pvt. Ltd Relevant 10% 8 M/S Sequel Building concept Pvt. Ltd.

Relevant 10% 9 M/S Kindle Developers Pvt. Ltd Relevant 10% Total:

100%

4. M/s Xanadu Estates Pvt. Ltd., which was the Lead Member of the consortium, was incorporated on 10.03.2011, wherein the promoters were Mr. Nirmal Singh, Mr.Vidur Bhardwaj and Mr. Surpreet Singh Suri. The shareholdings of the petitioner's company was with M/S Three C Universal Developers (99.99 per cent share) and Mr. Supreet Singh Suri was nominee of M/S Three C Universal Developers (.01%).

5. After the evaluation of the bids, the bid of the consortium led by the petitioner company was found to be compliant. An Acceptance Letter was issued by the Noida Authority on 28.03.2011 and thereafter, the Allotment-cum-Reservation Letter was issued on 04.05.2011 in favour of the consortium, wherein 7,27,500 square metres of land in Plot No. SC-01-01, Sector 78 and 79 were reserved for the development of the Sports City by the consortium.

6. The petitioner company being a Lead Member of the Consortium moved a letter on 11.10.2011 requesting the NOIDA authorities to sub-divide the entire sports city in favour of the relevant members of the consortium.

7. The request was accepted by the Noida Authority vide letter dated 24.10.2011 and the project was allotted to the members of the consortium. The letter dated 24.10.2011 is reproduced below for ready reference:

" New Okhla Industrial Development Authority Main Administrative Building, Sector-VI, NOIDA-201301 No. NOIDA/Commercial/2010 Dated : 24 October, 2011 M/s Xanadu Estates Pvt. Ltd. (Consortium) C-23, Greater Kailash Enclave, Part-I, New Delhi-48 Sub : Sub-Division of Sports City Plot No. SC-01-01 Sector - 78 & 79 under Scheme No. 2010-11 (Sports City-II) Dear Sir, With reference to your letter dated 11th October, 2011 on the above subject, I have been directed to inform you that in view of the terms and conditions of the brochures of the scheme, your request has been accepted by the competent authority to sub divide the aforesaid plot in six (6) parts in the following manner ;

Sub division of plot No. SC-01 Sector 79 in 5 parts & Plot No. SC-01 Sector 78 which is the part allotted area total 712981.00 sqmts of plot no.SC-01 Sector 79 Noida i.e. (1) SC-01/A admeasuring 1,00,000 Sqm.

(2) SC-01/B admeasuring 48,000 Sqm.

(3) SC-01/C admeasuring 2,50,027 Sqm.

(4) SC-01/D admeasuring 1,00,000 Sqm. and (5) SC-01 Sector-78 14,272.50 Sqm. which is the part allotted area total 14,519.00 sqmts of plot no.SC-01 Sector -78 Noida Simultaneously in view of the terms and conditions of the brochures of the scheme, the SPC for Plot No.SC-01/C, Sector-79 measuring 2,50,0207.50 Sqm. Namely M/s Three C Green Developers Pvt. Ltd. Consisting of consortium member (1) M/s Xanadu Estates Pvt. Ltd. - 62.5% (2) M/s Meriton Infotech Pvt. Ltd.-18.50% (3) M/s Sutlej Agro Products Ltd.-9.5% (4) M/s Xanadu Infra Developers Pvt. Ltd.-9.50%-2,50,027 Sqm., is approved for execution of lease deeds.

Execution of lease deeds of sub divided plot No. SC-01/A Sector -79 in favour of relevant member namely M/s Sequel Buildcon Pvt. Ltd. - 1,00,000 Sqm is approved.

Execution of lease deeds of sub divided plot No. SC-01/B Sector -79 in favour of relevant member namely M/s Sequel Buildcon Pvt. Ltd. - 48,000 Sqm is approved.

Execution of lease deeds of sub divided plot No. SC-01/D Sector -79 in favour of relevant member namely M/s Kindle Developers Pvt. Ltd. - 1,00,000 Sqm is approved.

Execution of lease deeds of sub divided plot No.SC-01/E Sector -79 in favour of relevant member namely M/s Xanadu Realcon Pvt. Ltd. - 80,000 Sqm is approved.

Execution of lease deeds of sub divided plot No.SC-01 Sector -78 in the name of relevant member M/s Xanadu Infratech Pvt. Ltd. - 14,272.50 Sqm, which is the part allotted area total 14519.00 sqmts of plot no.SC-01 Sector -78 Noida is approved.

Accordingly the calculation details of above plots are being enclosed.

Yours faithfully, Sd/-

Manager (Commercial)"

8. Separate lease deeds were executed by the Noida authority with these six sub-lessees on 24.10.2011. However, one of the condition of the lease deed was that the lead member should have at least 30 per cent share in the consortium and the percentage of shareholding till the temporary occupancy or completion certificate of at least first phase, is granted to the lessors.

9. The Noida Authority for some reason could not hand over the possession of the entire land of 7,27,500 square metres, hence, the allottee made a representation to the authority to grant the benefit of Zero period. The possession of the entire land was given except 48,520 square metres, as there was some encroachment.

10. The Noida Authority in its 177th meeting of the Board held on 27.05.2013 resolved that the balance land of which possession could not be given in lieu thereof, 48,520 square meters of land of the adjacent sectors may be allotted to the allottee. Thereafter, 48,520 square meters of land in the adjacent Sector 101 was allotted and a notice for allotting the same was also issued to the allottees on 21.06.2013. With this allotment 80 per cent of the area offered in the sports city project has been achieved with the effect that the minimum requirement for project was achieved.

11. The allottees/SPC collectively applied for the approval of a master layout plan for the development of the sports city in Sectors 78 and 79. The plan was approved on June 16, 2014.

12. However, the Noida Authority vide its letter dated 30.12.2016 granted benefit of Zero period upto 31.01.2017 for an area of 3,24,729.30 square metres. While granting the benefits, the Noida Authority made it clear that no further benefit would be accorded to the allottees. The Noida Authority further issued a revised payment plan for the plot allotted to the sub-lessee. The effect of the shifting was that the date of making payment of the dues were shifted and the payment schedule started w.e.f. 31.07.2017 to 31-01-2025.

13. It is claimed by the petitioner company that after the land was allotted in Sector 101, the representatives went to take possession of the land and found that the land was still in possession of the farmers and there was large scale agitation, hence the possession could not be handed over to the petitioner company.

14. The petitioner submitted a revised Master Plan for the sports city project with an FSI of 2.0, along with a letter dated October 17, 2018, and payment for the additional FSI is also stated to have been made. However, the approval of this plan is still pending with the Noida Authority.

15. It transpires that there was some report of scam in development of sports city, hence, the entire issue was referred to Comptroller and Auditor General3 for evaluation. The CAG submitted a report, which was shocking and revealed the entire scam. It mentions as to how the Noida Authority and the State Government had suffered a huge loss amounting to Rs.9000 crores, as Noida Authority while making the scheme had done wrong pricing of the Sports City. As per the brochure only residential and commercial plots could have been divided but the Noida Authority sub-divided entire plots, which were earmarked for Sports City as well. Bids of the allottees were not screened and the turnover of the candidates were also not considered before allotting the plot. The Lead Member having the highest share was ousted from the project completely and thereafter, the allotment was done to various other companies, which individually could not have qualified in the financial bid evaluation. By adopting such dubious methodology, the Noida Authority had resultantly allotted the plots to those, who were not even entitled to apply individually.

16. On receipt of the report of the CAG, the Board of Noida had a meeting on 18-01-2021 (201st Board Meeting) in which it was resolved that in order to complete the sports facilities in the Sports City, a Committee should be formed, which would look into the situation and put a report in the next Board meeting and stayed any further steps to be taken in the Sports City including revalidation of the maps. After the CAG report, NOIDA froze all the activities in the Sports City and referred the matter to the State Government for direction and guidance as to what has to be done.

17. The Committee made a report and on the basis of the report, the 202nd meeting was held on 26.07.2021 in which it was resolved that there was no further sub-division in the sports city and no revalidation of the map until further orders and referred the matter to the State Government for its guidance and directions.

18. After the CAG report, looking into the gravity of the situation, a Public Accounts Committee comprising of members of Legislative Assembly was constituted to look into the issue.

19. The petitioners once again made a representation on 11.08.2021 for approval of the revised Master-Plan and grant benefit of Zero period. Since no action has been taken on the representation made by the petitioner neither revised master plan was sanctioned nor the benefit of zero period was granted. Hence, aggrieved by the inaction of the Noida Authority, the petitioner has filed the instant writ petition seeking the following reliefs:-

"i. To issue a writ order or direction in the nature of mandamus directing the Respondent No. 3 to declare the zero period from 01.02.2017 till the date of handing over the actual, vacant & complete physical possession with regards to land admeasuring 3,24,729.30 sq. mtrs. out of the total subject land admeasuring 3,63,409.80 sq. mtrs, situated at Sector 78, 79 and 101, Noida, for which Zero Period has been granted only from 04.05.2011 to 31.01.2017 by the Respondent No. 3;

ii. To issue a writ order or direction in the nature of mandamus directing the Respondent No. 3 to declare the zero period from 04.05.2011 till the date of handing over the actual, vacant & complete physical possession with regards to land admeasuring 38,680 sq. mts. out of the subject land admeasuring 3,63,409.80 sq. mtrs. situated at Sector 78, 79 and 101, Noida for which,no Zero Period has been granted by the Respondent No. 3;

iii. To issue a writ order or direction in the nature of mandamus directing the Respondent No. 3 to expedite the approval of the revised Master Plan with original FAR of 1.5 with respect to the Sports City filed vide Application dated 10.09.2020 by the Petitioner and also to provide such other approvals/sanctions/ clarifications in respect of our Sports City as may be required from time to time under law for the construction and development of the projects;

iv. To issue a writ order or direction in the nature of mandamus directing the Respondent No.3 to grant additional FS1 of 2.00 to the Petitioner with respect to Sports City Project in terms of letter dated 17.10.2018by the Petitioner and subsequently add the same to the revised Master Plan of the Sports City Project.

v. To issue a writ order or direction in the nature of mandamus directing the Respondent No. 3 to extend the period of construction and completion of the Project by equivalent period of such Zero Period without any payment of the extension fees/charges in respect of the development of recreational/ residential/ commercial area on the Subject Land till date of grant of actual & complete physical possession of the Subject Land;

vi. To issue a writ order or direction in the nature of mandamus directing the Respondents not to levy or collect any lease rent and interest on lease premium from the date of the lease/ allotment on account of grant of Zero Period approval till the date of grant of actual & complete physical possession of the Subject Land;

vii. To issue, a writ order or direction in the nature of mandamus directing the Respondent No. 3 to adjust the principal and interest amount deposited by the Peritioner during 04.05.2011 tilldate, against future installments in respect of the Subject Land;

viii. To issue a writ, order or direction in the nature MANDMUS directing the respondents to provide to the Petitioner, a restructuring of the repayment schedule so that amount is paid to Noida Authority in terms of reported order dt. 10.06.2020 and 10.07.2020 by the Hon'ble Supreme Court in CWP 940/2017 in the Amrapali Batch matters as against the allotment of the Subject Land in question;

ix. To issue a writ, order or direction in the nature of CERTIORARI preventing the Respondent Authorities from taking any coercive action against the Petitioner with respect to the legal right of the Petitioner over the Subject Land in question;

x. To issue a writ, order or direction in the nature MANDAMUS. directing the Respondents to pay punitive damages and compensation to the tune of Rs.200 Crores to the Petitioner which includes the interest cost paid by the Petitioner(borrower) on the loan taken from the lender and also for loss of business on account of avoidable litigation and the consequent loss of reputation and goodwill on account of failure of Respondents to hand over the entire vacant physical possession of the land is question to the Petitioner for competition of the project.

xi. To issue a writ, order or direction in the nature MANDAMUS, directing the Respondent No. 1- State of U.P. to constitute an Enquiry Committee comprising of three members to conduct an enquiry into the illegalities, violations and abdication of statutory duties by the Respondent No. 3, Noida Authority and to submit a report to this Hon'ble Court during the pendency of the present writ petition, xii. To issue any other order of direction which the Hon'ble Court may deem fit and proper in the circumstances of the case.

xiii. To award the cost of the petition to this Petitioner."

ARGUMENTS ON BEHALF OF THE PETITIONER

20. Learned counsel for the petitioner submitted that right from the inception there was a problem with the development of sports city. The Noida Authority had not acquired the land and were not in possession of the land. Still they announced the sports city project and after the petitioner being allotted, the possession of the land could not be given in time. With the result the project got delayed and because of the delay the petitioner had suffered huge financial loss.

21. At the time of execution of sale deed, no physical possession was handed over to the petitioner company and only paper possession was given. When the petitioner company went to take the possession of the land, they had to face the agitation of the farmers. Apart from it, a number of petitions were filed in the High Court qua the acquisition of the land by the farmers, which were pending adjudication.

22. The petitioner company further submitted that the entire sports city was an integrated project and such a large scale development cannot happen in a piece meal unless and until the entire vacant possession was handed over to the petitioner; the development of the Sports City could not commence.

23. The learned counsel submitted that even the land allotted in Sector 101 in lieu of the encroached land of Sectors 78 and 79 was also not free from encumbrances.

24. The Zero period policy of the Noida Authority was applicable for all those land, where the Noida Authority had failed to carry out its obligations like handing over the physical possessions or in providing the necessary infrastructures, which they were supposed to provide by them or in cases where there was any such injunction or stay granted by the Court.

25. Further, the development of a large spread project cannot happen in piece-meal unless entire vacant physical possession of the land in question is granted to the petitioner company for completion of the project, and as such, the possession of small portions of land in fragments out of the allotted land granted to the petitioner, is of no use and is actually inconsequential and a mere eye-wash, until the entire vacant physical possession of the land in question is granted to the petitioner, the project cannot be initiated.

26. Learned counsel for the petitioner submitted that the land was allotted in three different locations. When the representatives of the petitioner company went to take physical possession in Sector 101, it was revealed that the respondent no.3 did not have possession, and the land still remained with the farmers. A mass-scale agitation was taking place at the site, with the result nothing could be done on the site.

27. The benefit of the Zero period was only granted until January 31, 2017. However, proper physical possession was not handed over, nor was the promised infrastructure and road by the Noida Authority was provided even after that. Therefore, the benefit of the Zero period should be extended in accordance with the Zero period policy of the State Government.

28. The petitioner company, which was the lead member of the consortium, applied for, in terms of the policy for increase in FSI from 1.5 to 2.0. A payment of Rs.25 crores was made towards the additional FSI, but it was never granted by the Noida Authority.

29. The development of the project was halted due to several issues, including the non-approval of the master plan, the unavailability of appropriate infrastructure, the absence of a connecting road to the project, and a lack of decision by the Noida Authority following the CAG report.

30. Since there was a delay on the part of the Noida Authority in handing over possession. Hence, the delay cannot be attributed to the petitioner and the petitioner is entitled to the benefit of the Zero period policy.

ARGUMENTS ON BEHALF OF THE RESPONDENTS

31. Sri Manish Goyal, learned Senior Counsel for the Noida Authority submitted that before proceeding in the matter it is worthwhile to mention about the petitioner herein. He submitted that no doubt, the petitioner was a lead member of the consortium which had applied for the project, but as soon as the project was allotted as per the scheme, the lead member was required to hold a 30 per cent stake in the project. However, on the request of the petitioner, the lease was executed by the Noida Authority with the other relevant members of the consortium, and the name of the petitioner was found to be missing. The leases executed by the officials of the Noida Authority at that point of time were contrary to the conditions outlined in the brochure of Sports City, and the petitioner could not have walked out of the project. However, the consortium members, as well as the Noida Authority, allowed the petitioner to walk away, and the entire project was allotted to the other relevant members.

32. He further submitted that an application was made by the Consortium in which Lead Member was M/s Xanadu Estates Pvt. Ltd. along with other Consortium Members. A chart showing the composition of the Consortium and their date of registration, list of Directors and shareholdings, are as follows:-

Sl.No. Name of the Company Lead Member/Relevant Member Percentage Date of Incorporation Directors Holding of the Company

1.

M/s Xanadu Estates Pvt. Ltd.

Lead Member 30% 10.03.2011 Nirmal Singh Vidur Bharadwaj Surpreet Singh Suri

2. M/s Meriton Infotech Pvt. Ltd.

Relevant Member 05% 19.10.2005 Surpreet Singh Suri Vidur Bharadwaj Nirmal Singh Mayank Chaurasia Anand Kumar Chaurasia Hari Veerapaneni Krishna

3. M/s Sutlej Agro Products Limited Relevant Member 10% Nirmal Singh Vidur Bharadwaj Supreet Singh Suri

4. M/s Xanadu Infradevelopers Pvt. Ltd.