The main legal point established in the judgment is that the failure to comply with the regulations governing land disposal by MIDC, specifically regarding the deposit of earnest money, led to the absence of a concluded contract between the parties, and thus, the MIDC's action in returning the demand drafts and refusing to consider the allotment of land was not arbitrary.

MANISH PITALE, J.

1. Heard. Rule. Rule is made returnable forthwith. Learned advocate Ms. Shyamali Gadre waives service of notice for the Respondent – MIDC. By consent of parties, petition is taken up for final hearing.

2. The Petitioners have invoked writ jurisdiction of this Court praying for quashing of letter dated 30th March, 2005 issued by the Respondent – Maharashtra Industrial Development Corporation (hereinafter referred to as the “MIDC”), as being arbitrary and illegal and they have further sought a direction to the MIDC to execute leasedeed in favour of Petitioner No. 2 in respect of the piece of land in question, allegedly allotted to them in what is called the Knowledge Park Airoli, with a further direction to place the Petitioners in possession of the said piece of land. The essential grievance of the Petitioners is that, having allotted the said piece of land in their favour, and the Petitioners having adhered to the requirement of deposit of consideration amount, the MIDC could not have returned the demand drafts of the said amount by the impugned letter dated 30.3.2005, thereby rescinding the allotment of the said land made in favour of the Petitioners.

3. The facts of the present case, as discernible from the pleadings and documents on record, are as follows:

On 7.7.2004 the Petitioner No. 1 made an application for allotment of the land in question i.e. 116000 sq. mts. in Knowledge Park, Airoli to the MIDC in terms of the MIDC Land Disposal Regulations, 1975 (hereinafter referred to as the “Land Disposal Regulations”), wherein the land can be disposed by the MIDC either by public auction or by entertaining individual applications. The Petitioner No. 1 submitted the said application along with a Project Note, giving a brief description of the project that he intended to start on the said piece of land. Petitioner No. 1 was called to attend a meeting with the Land Allotment Committee of the MIDC on 9.8.2004, and thereafter on 17.8.2004 a resolution was passed by the MIDC to allot the said piece of land in favour of Petitioner No. 1 by charging premium @ Rs. 1,800/- per sq. mt., amounting to a total consideration (premium) of Rs. 20,88,00,000/- (Rupees Twenty crores, Eighty Eight Lakhs).

4. On 15.9.2004 the Area Manager of the MIDC issued an offer letter to Petitioner No. 1 stating that the Land Allotment Committee of the MIDC had decided to offer him the said land in question by charging premium at the aforesaid rate. The Petitioner No. 1 was requested to submit the enclosed blue application, completed in all respects with a demand draft of Rs. 10,44,00,000/- towards earnest money within 15 days of the receipt of the offer letter. The said amount was equivalent to half of the total amount of consideration for the said land. As per Clause 9 of the said offer letter, it was stated that said offer was valid only for 15 days, by the end of which the offer letter would stand lapsed. Clause 8 of the said letter stated that the MIDC reserved its right to reject the application without assigning any reason. On 29.9.2004, Petitioner No. 1 submitted a letter to the concerned Minister, who was Chairman of the MIDC, seeking extension of 90 days period i.e. upto 30.12.2004 for deposit of the aforesaid amount of earnest money. An endorsement on the said letter by the Minister / Chairman of the MIDC states that such extension stood granted. As a result, Petitioner No. 1 now had extended time till 30.12.2004 to submit the blue application along with the aforesaid amount of earnest money.

5. On 18.12.2004 Petitioner No. 1 in the capacity of the Director of Petitioner No. 2 submitted the blue application before the MIDC, but the demand draft of the amount of earnest money was not submitted along with the said application. On 27.12.2004, Petitioner No. 1 claimed to have entered into an arrangement with Petitioner No. 2 – Company for the proposed Project on the said land. On 30.12.2004, which was the last date of the extended