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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. KULKARNI, R.N. LADDHA, JJ.
Shelton Infrastructure Pvt. Ltd. – Petitioner
Versus
The State Of Maharashtra, through the Urban Development Dept.-I and Ors. - Respondents
Writ Petition No. 2473 Of 2021 With Interim Application No.20290 Of 2022 With Interim Application No. 1067 Of 2022 With Writ Petition No. 2479 Of 2021 With Interim Application No. 20295 Of 2022 With Interim Application No. 1068 Of 2022 With Writ Petition No. 2476 Of 2021 With Interim Application No. 20296 Of 2022 With Interim Application No. 1064 Of 2022 With Writ Petition No. 2477 Of 2021 With Interim Application No. 20293 Of 2022 With Interim Application No. 1062 Of 2022 With Writ Petition No. 2478 Of 2021 With Interim Application No. 20292 Of 2022 With Interim Application No. 1063 Of 2022 With Writ Petition No. 2475 Of 2021 With Interim Application No. 20294 Of 2022 With Interim Application No. 1069 Of 2022 Writ Petition No. 1214 Of 2021 With Interim Application No. 20297 Of 2022 With Interim Application No. 1066 Of 2022
Decided On : 03-05-2023
CIDCO - PUBLIC TENDERS - ALLOTMENT OF RESIDENTIAL-CUM-COMMERCIAL PLOTS - UNCERTAINTY OVER RESERVATION OF PLOTS BY NMMC - INTERIM ORDERS PASSED BY COURT SUSPENDING SCHEDULE OF PAYMENT AND RESTRAINING CIDCO FROM TAKING ANY COERCIVE ACTION - DISMISSAL OF SLP AGAINST DIVISION BENCH DECISION UPHOLDING CIDCO'S AUTHORITY TO MAKE ALLOTMENTS - PETITIONS BY ALLOTTEES SEEKING RELIEF FROM PAYMENT OF INTEREST AND DELAYED PAYMENT CHARGES - COURT HELD THAT INTERIM ORDERS HAD LEGAL CONSEQUENCES AND CIDCO WAS BOUND BY THEM - CIDCO DIRECTED TO ACCEPT LEASE PREMIUM IN TWO INSTALLMENTS WITHOUT INSISTING ON ANY DELAYED PAYMENT CHARGES OR INTEREST.
Fact of the Case:
CIDCO invited public tenders for allotment of residential-cum-commercial plots at Navi Mumbai. Petitioners participated in the tenders and were successful allottees. Before they could deposit the first installment of lease premium, clouds of uncertainty hovered over the plots due to proposed reservation by NMMC for different public purposes. Petitioners filed petitions challenging the reservation and obtained interim orders suspending the schedule of payment and restraining CIDCO from taking any coercive action. The Division Bench of the High Court upheld CIDCO's authority to make allotments and dismissed the PILs filed by NMMC. The Supreme Court dismissed the SLP filed against the Division Bench decision.
Finding of the Court:
The court held that the interim orders passed by it had legal consequences and CIDCO was bound by them. The court further held that CIDCO could not demand any interest or delayed payment charges from the petitioners, nor could it terminate the allotments. The court directed CIDCO to accept the lease premium in two installments without insisting on any delayed payment charges or interest.
Issues: Whether the interim orders passed by the court had legal consequences and were binding on CIDCO. Whether CIDCO could demand any interest or delayed payment charges from the petitioners, or terminate the allotments.
Ratio Decidendi: The court held that the interim orders passed by it had legal consequences and were binding on CIDCO. The court further held that CIDCO could not demand any interest or delayed payment charges from the petitioners, nor could it terminate the allotments. The court relied on the following principles: * The rule of reasonableness and fairness requires statutory authorities to compensate loss occasioned to private parties or citizens who were misled in acting on such mistaken or negligent advice of the public authority. * No litigant can derive any benefit from the mere pendency of a case in a court of law, as the interim order always merges in the final order to be passed in the case. * However, in the present case, the petitioners had partly succeeded in their prayers, which pertained to their case of assertion of rights against reservation of the plots in question, having been turned down by a Division bench of the court. * Thus, the petitioners were not in the same position as that of the petitioners in the case of Amarjeet Singh & Ors. (supra), where the petitioners had claimed benefits under the interim order passed by the High Court, when the petitions itself stood dismissed before the High Court.
Final Decision: The petitions were allowed. CIDCO was directed to accept the amounts of lease premium in two installments as per the terms and conditions of allotment letters issued to the petitioners, to be paid by the petitioners within ten weeks from the date of the order without insisting on any delayed payment charges or interest, on such installments. In the event, the amounts of lease premium as directed were not deposited by the petitioners with the CIDCO, the CIDCO was permitted to take appropriate action as may be permissible. It was declared that the petitioners shall be entitled to develop the plots subject to the terms and conditions of the allotment letter, and as may be permissible in law as per the development permission, which may be issued in favor of the petitioners.
JUDGMENT :
(G.S. Kulkarni, J.)
1. Rule. Rule made returnable forthwith. Respondents waive service. By consent of the parties, heard finally.
2. This batch of petitions raise common issues of law and facts, hence can be conveniently disposed of by this common judgment.
3. The conspectus of facts, which are not in dispute are required to be stated:
The City and Industrial Development Corporation (for short “CIDCO”) is impleaded as a respondent in all these petitions. CIDCO issued public tenders sometime in February, 2021 inviting bids for allotment of residential-cum-commercial plots of land at Navi Mumbai. Such plots offered for allotment, were plots belonging to and/or vested with the CIDCO. The petitioners participated in the different public tenders as invited by CIDCO. The petitioners were successful allottees qua the plots as alloted to them by the CIDCO and subject matter of the present proceedings. In participating in such tenders, each of the petitioners have deposited with CIDCO substantial amounts, as earnest money deposit, later to be adjusted in the total consideration to be paid by them, namely, the lease premium to be paid to the CIDCO. The first instalment of the lease premium was to be paid in four weeks from the date of allotment and the second instalment after six weeks from the payment of first instalment. Thus, within ten weeks, the total amount of lease premium was required to be deposited by the petitioners with the CIDCO.
4. Before the petitioners could deposit the first instalment of lease premium with the CIDCO, under their respective allotments, clouds of uncertainty hovered in relation to these plots of land allotted to the petitioners, on account of actions being resorted by the Navi Mumbai Municipal Corporation (for short “NMMC”), namely, that it was proposed by the NMMC that these plots of land, which were allotted to the petitioners shall be subjected to reservation for different public purposes. It is not necessary to delve into details of such public purpose for which the plots were proposed to be reserved, suffice it to observe, that such issue of reservation being asserted by the Municipal Corporation and the same being resisted by the CIDCO was subject matter of litigation before this Court in Public Interest Litigation No. 22 of 2021 in case of Nishant Karsan Bhagat & Ors.vs. City and Industrial Development Corporation of Maharashtra Ltd. & Ors. and in Public Interest Litigation No. 37 of 2021 in case of Mr. Sunil J. Garg & Ors. vs. State of Maharashtra & Ors.
5. Some background on such PIL proceedings can be noted. The State Government sometime in the year 1970 conceived a plan to set up a twin city across the Mumbai harbour at the relevant time known as “New Bombay” and now “Navi Mumbai”. According to the provisions of Section 113 of the Maharashtra Regional and Town Planning (for short “MRTP Act”) which falls in Chapter VI of the MRTP Act providing for “New Towns”, specified sites came to be designated for setting up the new town of Navi Mumbai. Subsection (3A) came to be inserted in Section 113 of the MRTP Act by Maharashtra Act 21 of 1971 authorizing the State Government to constitute a New Town Development Authority. Sub-section (3A) as inserted by the said amendment reads thus:
Writ petitions can be maintained against administrative actions affecting contracts, especially when principles of natural justice and public policy are at stake.
The principle of unjust enrichment and the doctrine of legitimate expectations were central to the court's decision, emphasizing the obligation of the Development Authority to act fairly and reasonab....
The State Government's communication was deemed a binding directive under Section 154 of the MRTP Act, mandating compliance by CIDCO.
The court emphasized the legal principles related to the disposal of public properties, legitimate expectations, and the authority's discretion in allotment decisions.
State instrumentalities must act fairly and provide equal treatment in tender processes unless justified, as arbitrary actions violate principles of fairness.
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