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J U D G M E N T (Arising out of SLP (C) No.14300/2006) ALTAMAS KABIR, J.

Leave granted.

This appeal is directed against the order passed by the Division Bench of the Bombay High Court dismissing the writ petition filed by the appellants herein challenging the action of the respondent, City and Industrial Development Corporation of Maharashtra Ltd. (for short 'CIDCO') in cancelling the allotment made in favour of the appellants. The Division Bench indicated in its impugned order that in identical matters other writ petitions filed at different points of time had been dismissed on the ground of alternative remedy available. The facts as can be garnered from the materials on record, indicate that the CIDCO had issued a letter of allotment of a commercial plot measuring 1453.75 sq. mts. on lease in plot No.1 in Sector 9, Panvel (West), Navi Mumbai, for a period of 60 years for a premium of Rs.2,12,24,750/- in favour of Mrs. Meera Balkrishna Dhumale and Mrs. Neeta Hemant Patankar jointly. The original allottees applied for transfer of the said plot to the appellants herein. Upon accepting the transfer charges of Rs.2 lacs, CIDCO issued a corrigendum to the original allotment letter dated 5th February, 2004 and executed a Deed of Lease in favour of the appellants on receipt of the full lease premium of Rs. 2,12,24,750/-. CIDCO also executed a Deed of Confirmation in favour of the appellants and issued the Development Permission and Commencement Certificate in terms of Section 45 of the Maharashtra Regional Town Planning Act, 1966 ( for short 'the MRTP Act').

Mr. Cama submitted that in the instant case, there was no such prayer and it was the appellants herein who had challenged the cancellation of their allotment by CIDCO in terms of its order dated 29th March, 2006 purportedly on account of violation of the provisions of Section 23 of the Contract Act. According to Mr. Cama, the only question to be decided in this appeal is whether having accepted the entire premium lease from the appellants as also the transfer fees from the original allottees and having issued Sanction and Commencement Certificate, CIDCO was entitled to resile from its original actions and to cancel the allotment unilaterally on the ground of violation by CIDCO itself of its own Regulations which attracted the provisions of Section 23 of the Contract Act. It was urged that since the appellants had substantially altered their position to their prejudice on the assurances held out by CIDCO by investing huge amounts on the development of the allotted plot, CIDCO was estopped in law from resiling from its earlier assurances and seeking eviction of the appellants on the ground that the allotment had not been made in accordance with the Regulations.

Referring to the decision of the Court of Appeal in the case of Falmouth Boat Construction Limited vs. Howell, reported in (1950) 1 All.E.R. 538, Mr. Cama referred to the observations made by Lord Denning with regard to the steps taken on the basis of an oral assurance. While dealing with the situation where a Ship Builder had proceeded to effect repairs on the basis of an oral direction, Lord Denning held that whenever government officers, in their dealings with a subject, take on themselves to assume authority in a matter with which the subject is concerned, he is entitled to rely on their having the authority which they assume. He does not know and cannot be expected to know, the limits of their authority and he ought not to suffer if they exceed it. Mr. Cama submitted that the defence being taken on behalf of the CIDCO that it had acted arbitrarily and in contravention of its own rules, was not available to CIDCO since the appellants had acted and altered their position on the basis of such assurance and the appellants were not required to know whether CIDCO had acted in conformity with its rules or not.

On the question of the allotment being opposed to public policy, we failed to see how CIDCO can raise such an issue. On the other hand, the stand taken by CIDCO is, in our view, opposed to public policy since CIDCO was not entitled to take a unilateral decision to cancel the allotment after the appellants had acted on the basis thereof and had expended large sums of money towards the construction which has progressed to some extent. The Regulations allowed CIDCO to entertain individual applications for allotment, as has been done in the instant case. Merely by indicating that the law declared by this Court was universally binding under Article 141 of the Constitution, it could not contend that such allotment was contrary to public policy on a fresh consideration made by the Board of Directors of the Corporation upon considering the recommendations made by Dr. D.K. Shanakran, the then Addl. Secretary (Planning) of the State of Maharashtra. It may be mentioned that Dr. Shankaran had been appointed by the State Government in January 2005 to conduct a discreet inquiry into allotments of certain plots of land made by the Corporation during the tenure of Shri V.M. Lal, the then Vice-Chairman and Managing Director allegedly in contravention of the established Rules, Regulations and Conventions. That consideration, in our view, was not sufficient in the instant case to cancel the allotment which had been made in accordance with the Regulations and the appellants had made payments as directed by the Corporation, which, in fact, was higher than the price recommended by the Shankaran Committee.