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J U D G M E N T (Arising out of S.L.P. (C) No.336/2006) WITH CIVIL APPEAL NO. 410 OF 2007 (Arising out of S.L.P. (c) No.655/2006) VIJAY ASSOCIATES (WADHWA) DEVELOPERS ..Appellant Versus PUBLIC CONCERN FOR GOVERNANCE TRUST & ORS. .Respondents ALTAMAS KABIR,J.

Of the four Special Leave Petitions heard together by us, two have already been disposed of and the remaining two, namely, SLP (c) Nos.336/06 and 655/06, are being disposed of by this common judgment.

Leave granted in both the special leave petitions. Public Concern for Governance is a registered Trust which filed a Public Interest Litigation, being No.43/2005, in the High Court of Judicature at Mumbai, questioning the manner in which certain residential plots in the Navi Mumbai Municipal Area had been allotted by the City and Industrial Development Corporation (hereinafter referred to as 'CIDCO'). CIDCO is an authority constituted by the State of Maharashtra under the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as 'the MRTP Act') for development of Navi Mumbai and other townships. The allotments made have been challenged on various grounds. The main ground of challenge is that the allotment and disposal of plot Nos. 24 to 29 (Nerul) was in violation of the existing regulations regulating such allotment. According to the writ petitioners, the Regulations provided for the allotment of plots effected either by public advertisement, or at a fixed price for co-operative housing societies or on individual applications. However, tenders were to be invited as far as plots which were to be granted by public advertisement were concerned. Since genuine co-operative housing societies are usually unable to compete with builders in open tender, they were to be granted plots of land at a fixed concessional rate and the buildings to be constructed were to be used for residential purposes only. According to the writ petitioners there is even a difference in the Floor Space Index, (hereinafter referred to as 'the FSI'). In the case of purely residential constructions, the permitted FSI is 1, whereas in the case of constructions to be used for both commercial and residential purposes, the FSI is 1.5. According to the writ petitioners the plots in question were cornered by builders who set up dummy societies to acquire the plots and to raise constructions thereon, which would be used both for residential and commercial purposes, thereby making large gains for themselves and defrauding CIDCO. It is the specific case of the writ petitioners' that having acquired the plots for the use of co-operative housing societies with FSI 1, the builders who are the only entrepreneurs in the construction project, sought to convert these plots for commercial use with FSI 1.5, thereby causing wrongful loss to CIDCO to the extent of Rs.36 crores. In support of their case, the writ petitioners relied on two Resolutions adopted by the Board of Directors of CIDCO, being Nos. 8848 adopted on 23rd October, 2003 and 8886 adopted on 25th November, 2003, respectively. By the first Resolution, a deviation was made from the normal mode of allotting plots by fixing the rate for plots to be allotted to the co-operative housing societies (with 1 FSI and purely for residential purposes). The said Resolution reads as follows:-

Yet another breach of the rules for the purpose of favouring the said respondent was that although under Rule 3 (1) CIDCO was required to publish a scheme to invite applications from persons intending to promote co-operative housing societies, no such scheme was published and the plots in question were allotted to the six different co-operative housing societies merely on their applications made to the Chief Minister. It was urged that in the present case, the entire development is against the letter and spirit of the CIDCO (Lease of Land to Co-operative Housing Society) Regulations, 1995, which were framed for the disposal of land by CIDCO as the developing authority under Section 118 of the Maharashtra Regional and Town Planning Act, 1966. It was contended that on account of the manipulations effected in order to favour Vijay Associates (Wadhwa) Developers, CIDCO incurred a loss of about Rs.10,000/- per sq.mt. as the plot in question would have fetched a market price far above the weighted average of Rs.10,743/- for the said plot. Reference was made to a report of a committee set up by the State Government, popularly known as the Shankaran Committee, which estimated CIDCO's losses on account of the aforesaid transaction of going into Rs.35 crores.

It was also submitted on behalf of the respondents that since the writ petitioners had raised an allegation of under valuation and financial loss to CIDCO, an independent valuation could be made to ascertain the loss, if any, on account of the transaction and to compensate CIDCO to that extent.

The submissions made on behalf of the respondents did not find favour with the High Court which appeared to be convinced that the respondents had indulged in fraudulent and illegal activities which could not be accepted by the Court. Referring to several judgments of this Court cited both on behalf of the appellants as well as the respondents, the High Court arrived at the conclusion that the allotments made in favour of the six societies were liable to be quashed and there was no question of regularizing the same. The High Court held that having accepted the writ petitioners' prayer for quashing the allotments made in favour of the respondent Nos. 5 to 10, with a further direction to stop the construction activities, there was no question of considering the alternate prayer made for obtaining a fresh valuation and compensating CIDCO to the extent of its losses, if any. On the basis of its aforesaid conclusion, the High Court quashed the allotments made to the six housing societies, i.e. the respondents Nos. 5 to 10 herein, by letters of intent issued by CIDCO dated 26th March, 2004 and 6th May, 2004. All rights of the persons who had entered into agreements concerning development of the plots nos. 24 to 29, including those of the six housing societies, Amey Co-operative Housing Society Limited which is the amalgamated society and successor to the six housing societies, and Vijay Associates (Wadhwa) Developers would stand extinguished. The said respondent along with its agents and servants were permanently injuncted and restrained from entering upon, remaining in and/or putting up any construction on the said plots. In addition to the above, the entire construction on the said plots Nos. 24 to 29 was to stand forfeited and vested in CIDCO. CIDCO was permitted to enter upon the land and take over the entire construction and appoint its security personnel to guard it. The Navi Mumbai Municipal Corporation was directed to examine as to whether the construction could be regularized and CIDCO was directed to move the Municipal Corporation for that purpose. A further direction was given that if in the opinion of the Municipal Corporation the construction could not be regularized then CIDCO would pull it down and recover its costs for pulling down the structure as well as the removal of debris from Vijay Associates (Wadhwa) Developers. Thereafter, CIDCO would decide whether the plot with constructions should be allotted to genuine housing societies or whether the plot and construction shall be allotted to a builder to be decided by the process of inviting tender. In the event, CIDCO decided that the plot should go to genuine housing societies, it would have to issue an advertisement accordingly and on receiving offers based on the construction cost with appropriate municipal charges it could take necessary decision for allotment. Several other directions were also given by the High Court while making the rule absolute with costs to be paid by Vijay Associates (Wadhwa) Developers to the petitioners assessed at Rs.1 lakh.

Mr. Rohatgi next contended that the regulations would have no application to the case of the respondent co- operative societies as no scheme, which was one of the methods for allotment of plots, had been published by CIDCO. On the other hand, CIDCO acted in terms of its Board Resolutions which have not been challenged in the writ petition.

Mr. Rohatgi submitted that at all stages CIDCO had followed the rules and regulations and it would be unfair to attribute any bias to its officers involved in the allotment of plots in the Navi Mumbai Township Area. It was pointed out that since the Chief Minister was the ex-officio Chairman of CIDCO, applications for allotment of plots were often made to him directly and were thereafter routed to the concerned officials of CIDCO. There was nothing extra-ordinary in the applications having been made by the respondent-societies to the Chief Minister which were then endorsed to the officials of the Corporation.