Madhya Pradesh High Court
M/S Krishna Builders And Developers vs Jabalpur Development Authority on 4 May, 2017
Author: Anurag Shrivastava
Bench: Anurag Shrivastava
1
HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT
JABALPUR
Division Bench : Hon'ble Shri Justice S.K. Gangele &
Hon'ble Shri Justice Anurag Shrivastava
Writ Petition No.20852 of 2016
M/s Krishna Builders and Developers
Versus.
Jabalpur Development Authority and anr
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Shri Sanjay Agarwal, counsel for the petitioner.
Shri Prashant Singh and Shri Manas Verma, counsel for the
respondents.
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Reserved on: 25.04.2017
ORDER
(Pronounced on 04.05.2017) As per S.K. Gangele, J:
1. Petitioner has filed this petition against the order dated 28.09.2016 [Annexure-P-30] passed by the respondent No.2.
2. Petitioner is a partnership firm registered under the provisions of Indian Partnership Act. The respondent No.1-Jabalpur Development Authority is the statutory body constituted under the provisions of "Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam 1973 [hereinafter in short "the Adhiniyam 1973"].
3. On 30.09.2010, the respondent No.1 published an advertisement inviting tenders for development of commercial-cum- residential complex on a commercial plot No.1 area 16650 square meters. As per advertisement, successful bidder had to deposit 25% of the total amount after acceptance of tender and possession shall 2 be delivered to the successful bidder with no objection certificate. The petitioner participated in the tender proceedings and his tender was accepted because the petitioner firm offered highest rate i.e. Rs.13999/- per Sq. meter. The Board-respondent No.1 in its meeting held on 27.10.2010 accepted the offer of the petitioner and same was communicated to the petitioner vide letter dated 08.03.2011. The total amount of premium was fixed Rs.23,30,83,350/-. The petitioner deposited 25% of the total amount of Rs. 5,82,70,838/- on 18.03.2011. Thereafter, petitioner and respondent No.1 executed an agreement on 18.03.2011 on certain terms and conditions. As per agreement, the petitioner had to deposit total premium amount in 18 equal monthly installments. The security amount of Rs.25 lacs deposited by the petitioner shall be adjusted with last installment.
4. The Tahsildar [Nazul] Gohalpur, Jabalpur on 10.03.2011 in the mutation proceedings initiated by the respondent No.1 in regard to mutation of the land in the name of respondent No.1 which was included in the agreement held that the lands comprising Khasara Nos. 179 and 178 are the Government lands and the name of the respondent-JDA could not be mutated as owner of the land.
5. The Chief Executive Officer of the respondent No.1/JDA wrote a letter on 28.04.2011 to the Tahsildar,(Nazul) Gohalpur, Jabalpur mentioning the fact that the land allotted to the petitioner may be pinpointed in the enclosed map It be specified which Khasara numbers belong to the respondent Authority.
6. The Tahsildar Gohalpur by letter dated 12.05.2011 informed the respondent authority that land comprising Khasara No.179, is part of the proposed commercial complex sought to be given to the 3 petitioner-firm and the land of Khasara No.178 and 179 does not belong to the respondents Authority because it was vested with the State Government in pursuance to ceiling proceedings. The respondent-Authority allotted the said land to the petitioner-firm due to mistake. The Collector, Jabalpur vide note sheet dated 20.05.2011 recommended allotment of land to the respondents on payment of lease rent.
7. Inspite of the aforesaid facts, the petitioner paid Rs.1 Crore through cheque and further amount of 4 Crores was paid under protest to the respondent-authority. The petitioner made a request that all land disputes be cleared and possession be handed over to the petitioner.
8. Sub-Engineer of the respondent-authority issued a letter to the petitioner on 23.11.2011. It is mentioned in the letter that possession of 17114 Sq. Meters of land is hereby handed over to the petitioner. The land which was part of Khasara No.167, 169, 178 and 179 was also included. The petitioner vide letter dated 30.11.2011 informed the respondent authority that Jabalpur Development Authority is not the owner of the land comprising of Khasara Nos.178 and 179. The respondent authority cancelled the allotment of 464 Sq. meter of land vide letter dated 22.03.2012 which was not the ownership of the respondents-authority. Thereafter, the petitioner made request to the authority that boundaries and area of the plot be specified for which possession has been handed over to the petitioner.
9. The Chief Executive Officer JDA directed the Superintending Engineer to enquire into the matter. The SE vide letter dated 05.04.2012 on enquiry observed that the land of Khasara No. 177, 173 and 179 does not belong to the respondent-JDA. He suggested 4 that the possession of the land to which the respondent is owner, be handed over to the petitioner excluding the land which does not belong to or vested with the respondent-JDA. In pursuance to the aforesaid letter of SE, the respondents authority informed the petitioner vide letter dated 12.10.2012 that out of estimated land ad- measuing 16650 Sq meter, the petitioner can get possession of 10670 Sq. meter because remaining land is of ownership of State Government. The respondent authority demanded premium from the petitioner of a land area 10670 Sq. meter.
10. Vide letter dated 08.04.2013 the petitioner requested the respondent authority to revise the map showing the correct dimensions and Khasara numbers of the land of which respondent is actual owner and reschedule the payment of installments from the date of delivery of possession. The CEO of respondent-JDA informed the Chairman that the petitioner firm can be handed over possession of 10670 Sq. meter of land and demand can be raised accordingly. However, the respondent authority vide order dated 24.12.2013 [Annexure-P-23] canelled the allotment of land made in favour of the petitioner in accordance with the decision of the Board. The Board had taken decision in its meeting held on 23.12.2013 on the ground that the petitioner did not pay the installments as per agreement.
11. The petitioner filed a writ petition against the order of cancellation of allotment of land before this Court being W.P. No.43/2014. A public interest litigation was also filed before this Court challenging the resolution of the Board of Directors dated 23.12.2013 which was registered as Writ Petition No.3192/2014 (PIL). The Court vide order dated 4.3.2014, disposed of the petition with the direction to the State Government to decide the legality and 5 validity of the resolution dated 23.12.2013. Thereafter, the Principal Secretary, Urban Administration and Development, Govt. of M.P., vide order dated 18.11.2015 declared the resolution of the Board dated 23.12.2013 null and void.
12. The Board of Directors of respondent No.1-JDA in its meeting held on 15.07.2016, passed a resolution that the petitioner firm be directed to submit representation within 7 days. Thereafter, the CEO vide notice dated 23.07.2016 called upon the petitioner to submit its representation in pursuance to resolution dated 15.07.2016. The petitioner firm submitted its reply on 06.08.2016. It pleaded that the petitioner was not responsible for delay in payment of installments of premium amount. The respondent-JDA was not the owner of the entire land for which agreement was entered by the petitioner. There was a dispute about the ownership of the land in question. It was obligatory on the part of the Board to handover the vacant possession of the land of which Board had a ownership free from all encumbrances. The petitioner had already paid substantial amount and after delivery of possession, the petitioner shall deposit the installments. The respondent authority vide letter dated 28.09.2016 [Annexure-P-30] cancelled the allotment of land which was made in favour of the petitioner and also cancelled the agreement dated 18.03.2011 on the ground that the petitioner did not deposit the premium within time. The respondent authority further observed that loss suffered by the respondent-JDA be recovered from the premium amount of the petitioner and the petitioner would not be eligible to get any interest on the amount of refund.
13. The respondents in the return pleaded that cancellation of allotment of land which was done in favour of the petitioner is in accordance with the provisions of the agreement. The petitioner did 6 not deposit the installments of the premium. Inspite of notice, the petitioner failed to deposit the rent. The petitioner was directed to deposit the amount of Rs.7,09,56,935/- vide letter dated 25.10.2011. However, the petitioner did not deposit the same. The petitioner was under obligation to deposit the remaining amount within 18 installments. It is admitted by the respondent that SE vide report dated 05.04.2012 submitted that JDA/respondent is not owner of the total land ad-measuring 16650 Sq. meter and out of aforesaid land, 5890 Sq. meter of land is pertaining to ceiling proceedings. The answering respondents could reduce total area of land ad-measuring 10670 Sq. meter and allot in favour of the petitioner and reschedule amount of installments at the rate of Rs.13,999/- per square meter. Petitioner firm submitted its consent for modification of total area of land and rescheduling of premium inspite that the petitioner firm did not deposit the amount and the Board had taken a decision to cancel the allotment made to the petitioner vide resolution dated 23.12.2013. The respondents further admitted the fact that Hon'ble Chief Minister vide order dated 21.12.2013 dissolved all the Board of Directors of Development Authorities excluding the Indore Development Authority. Consequently, the Board of Director of Jabalpur Development Authority become functous officio and the resolution of the Board of Director dated 23.12.2013, was not proper. The State Government declared the resolution of the Board dated 23.12.2013, null and void vide order dated 18.11.2013. Thereafter, another notice was issued to the petitioner and opportunity of hearing was provided to it. The Chairman of the respondent-JDA by detailed order which was approved by the Board of Directors on 28.09.2016 cancelled the allotment of land in favour of the petitioner.
714. Learned counsel for the petitioner has submitted that the order passed by the Board is arbitrary, illegal and unsustainable. The Board of the respondents has played fraud and misrepresentation with the petitioner. The respondent-JDA was not the owner of the total area of land for which it issued advertisement. Subsequently, the area of land in question was reduced at that time the petitioner had already deposited more than 10 Crores with JDA. It was obligatory on the part of the respondents-JDA to handover possession of the land and then the petitioner would be eligible to pay his remaining installments. As per terms and conditions of the agreement, remaining installments shall be paid in equal monthly installments subject to delivery of possession hence, there is no violation of any terms and conditions of the agreement.
15. Learned counsel for the respondents has submitted that the petitioner did not pay the remaining premium amount of installments. The respondents-Board issued notice to the petitioner inspite that the installments were not paid hence, the respondents-JDA has rightly cancelled the order of allotment of land in favour of the petitioner.
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 principles in regard to interference by the High Court in exercise of powers under Article 226 of the Constitution in a contractual matter and the question of maintainability of writ petition. The Apex Court in State of Kerala and others Vs. M.K. Jose reported in (2015) 9 SCC 433 has considered the principle of law on the above 8 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 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, 9 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.
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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 10 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:-
".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 11 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. 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 12 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."
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 matters 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. Admitted facts of the case are that the respondent-authority was not owner of the plot No.1 area 16650 Square Meters of the land for which it had issued advertisement and invited tenders for development of commercial-cum-residential complex. Some portion of the land in question was of the ownership of the State Government. This fact has been admitted by the Superintending Engineer of respondent No.1-JDA in its report. The report was accepted by the respondent-authority. As per aforesaid report dated 05.04.2012 [Annexure-P-19], the respondent-JDA had ownership right of 10,670 Square Meter of land. Inspite of that, the respondent authority issued advertisement for total area i.e. 16650 Square Meters and after accepting highest bid of the petitioner received an amount of Rs. 5,82,70,838/- from the petitioner within 30 days. Thereafter, the petitioner had also deposited an amount of Rs.1 13 Crores and 4 Crores respectively. It means that the petitioner had deposited total amount of Rs. 10,82,70,838/- on the misrepresentation of the respondent-JDA.
19. The apex Court in the matter of S.P. Chengalvaraya Naidu vs. Jagannath and others reported in (1994) 1 SCC 1 has held in regard to fraud:-
"6. ................... Jagannath obtained the preliminary decree by playing fraud on the Court. A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage........"
20. The apex Court further in the case of A. Ayyasamy vs. A Paramasivam and others reported in (2016) 10 SCC 386 has held as under about fraud:-
"'Fraud' is a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. Fraud can be of different forms and hues. Its ingredients are an intention to deceive, use of unfair means, deliberate concealment of material facts, or abuse of position of confidence. The Black's Law Dictionary defines 'fraud' as a concealment or false representation through a statement or conduct that injures another who relies on it[5]. However, the moot question here which has to be addressed would be as to whether mere allegation of fraud by one party against the other would be sufficient to exclude the subject matter of dispute from arbitration and decision thereof necessary by the civil court."
21. From the aforesaid judgments of the apex Court, the fraud means "knowing misrepresentation of the truth or concealment of a 14 material fact to induce another to act to his detriment". In the present case the respondent-JDA had knowledge that it does have ownership right of total area of land i.e. 16650 Square meter for which it had issued advertisement and invited tenders. This fact is further proved from the fact that mutation proceedings at the time of inviting tenders were pending before the Tahsildar (Nazul). The application for mutation was filed by the respondent-authority itself and in that mutation proceedings, the Tahsildar has held that respondent-JDA is not the owner of total area of land 16650 Square meter. In such circumstances, the decision of the authority that the petitioner had not paid the total amount of installment/premium within time is illegal. The respondent-authority could not get the benefit of it's wrong. The Superintending Engineer on the instructions of the Chief Executive Officer of JDA has held that the respondent authority has ownership right of 10,670 Square Meters of land. The same fact was informed by him vide letter dated 12.10.2012 [Annexure-P-20]. Hence, it could be held that the respondent authority has ownership right of right of 10,670 Square Meter of land on 12.10.2012. On the aforesaid date, the petitioner had already paid a total premium amount of Rs. Rs. 10,82,70,838/-.
22. The remaining installment of premium have not been fixed by the respondent-authority. Neither the possession of the land area 10,670 Square Meter was delivered by the respondent-authority to the petitioner in accordance with the terms and conditions of the agreement. Hence, it cannot be held that the petitioner did not pay the installments or premium amount to the respondent authority deliberately. Contrary to this, on the misrepresentation of the respondent-authority, the petitioner suffered a loss. It had deposited near about 11 Crores [Eleven Crores] with the respondent-authority 15 for the total area of land as promised by the respondent authority. The agreement was also executed. By the cancellation of agreement, it can very well be presumed that the respondent-authority has played a fraud with the petitioner when it is discovered that respondent authority has ownership right of the land area 10670 Square meter, then it was obligatory on the part of the respondent- authority to handover the possession of the aforesaid area of land after obtaining proper sanction from the Town and Country Planning to the petitioner and reschedule the installments and premium. Contrary to this, the respondent-authority blamed the petitioner. The act of the respondent authority is arbitrary, illegal and against the law. In such circumstances, the writ petition filed by the petitioner is maintainable.
23. Learned counsel for the respondents has submitted that in accordance with the rule 29 of the Adhiniyam 1973, there is possibility of sub-divisions of plot. The aforesaid rule reads as under:-
"29. No plot or land in any Authority layout shall be of a size less than the minimum size sanctioned for such layout. No plot shall be sud-divided in a manner by which any of the sub- divided plot becomes lesser in size than the minimum size sanctioned for the layout in that locality."
In accordance with the aforesaid rule, no plot shall be sub- divided so the sub-divided plots become lesser in size then the minimum size in that locality. This is not the case. There is no averment by the authority that plot size of 10670 Square meter would be less than the size sanctioned for the layout in that locality. Contrary to this, the then Chairman of Jabalpur Development Authority and CEO of the respondent had agreed to handover possession in favour of the petitioner of a land area 10670 Square 16 meter as proposed by the SE. Hence, the arguments advanced by the counsel for the respondent is rejected.
24. Another aspect of the matter, the respondent authority accepted an amount of Rs.11 Crores [Eleven Crores] from the petitioner on misrepresentation of facts. The respondent-authority has enjoyed the benefits of aforesaid amount including interest.
25. Looking to the aforesaid facts of the case and keeping in mind the principles of law laid down by the apex Court, the petition is allowed. The impugned order dated 28.09.2016 [Annexure-P-30] passed by the respondent No.2 in regard to cancellation of allotment of land in favour of the petitioner is hereby quashed. The respondent authority is directed to handover the possession of land area 10670 Square Meter to the petitioner and execute the lease deed. The authority may fix remaining amount payable by the petitioner as per the rate of tender accepted by the authority. The petitioner may pay the amount of installments as fixed by the authority and shall complete the construction as per the agreement. The authority shall obtain necessary sanction from Town and Country Planning Department.
26. No order as to the costs.
(S.K. Gangele) (Anurag Shrivastava)
Judge Judge
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