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2003 Supreme(All) 2135

IN THE HIGH COURT OF ALLAHABAD
M. Katju and R. S. Tripathi, JJ.
INTERNATIONAL HOSPITAL (P.) LTD. - Appellant
Versus
STATE OF U. P. - Respondents
C. M. W. P. 13556 Of 2003
Decided On : 09/26/2003

Advocates Appeared:
KUMKUM SEN, RAKESH DWIVEDI, VINOD MISHRA, YASHWANT VERMA

The main legal point established in the judgment is that demands for change in constitution charges and revised lease rental must be supported by statutory provisions or contractual agreements, and cannot be imposed unilaterally by one party.

Headnote:

Constitution Charges - Challenge to demand of change in constitution charge and revised lease rental - Uttar Pradesh Industrial Area Development Act, 1976 - Article 265 of the Constitution - Legal provisions, their interpretations, and influence on court's decision discussed.

Fact of the Case:

The petitioner, a private limited company, challenged the demand of change in constitution charge and revised lease rental imposed by the respondent No. 2, New Okhla Industrial Development Authority (N.O.I.D.A.). The petitioner had applied for and was allotted a plot of land for establishing a Super Speciality Hospital and Research Institute. Subsequently, the petitioner transferred 75% of its shares to Fortis Healthcare Ltd., leading to the imposition of change in constitution charges and revised lease rental.

Finding of the Court:

The court found the demands for change in constitution charges and revised lease rental to be wholly illegal, as there was no statutory provision or contractual agreement justifying the imposition of such charges. The court held that the terms and conditions of the lease deed and the tender document were binding on the parties, and the respondent could not unilaterally change the terms of the contract.

Issues: The issues revolved around the legality of the demands for change in constitution charges and revised lease rental, and the interpretation of relevant legal provisions under the Uttar Pradesh Industrial Area Development Act, 1976, and Article 265 of the Constitution.

Ratio Decidendi: The court held that the demands were illegal as there was no statutory provision or contractual provision for imposing change in constitution charges. It emphasized that the terms and conditions of the lease deed and the tender document were binding on the parties, and the respondent could not unilaterally change the terms of the contract.

Final Decision: The writ petition was allowed, and the impugned orders were quashed. The court recalled the interim order and left it open to the respondent to consider the application of the petitioner for permission to mortgage the land. No order as to costs was made.

M. KATJU, R. S. TRIPATHI, JJ.

( 1 ) HEARD Sri Rakesh Dwivedi, learned senior counsel, Ms. Kumkum Sen and Shri Yashwant verma, learned counsel on behalf of the petitioner and Sri Vinod Mishra and learned standing counsel for the respondents.

( 2 ) THE petitioner has challenged the demand of change in constitution charge made by the respondent No. 2-New Okhla Industrial Development Authority (hereinafter referred to as the n. O. I. D. A.) and the revised lease rental demanded by the letters dated 15. 3. 2002, 23. 10. 2002 and 21. 2. 2003 vide Annexures-G, L and O to the writ petition.

( 3 ) THE petitioner is a private limited company registered under the Indian Companies Act, having its registered office at B-9 Maharani Bagh, New Delhi. The petitioner is engaged in the business of establishing state of the art hospitals of international standard of technological excellence and quality of medical and related services. It is also alleged in para 4 of the writ petition that in consonance with its objectives to establish a Super Speciality Hospital and Research Institute and to provide medical facilities of International standards, the petitioner applied for and was allotted a plot of land bearing No. B-22, Sector 62. N. O. I. D. A. , measuring 22,400 sq. mtrs. in response to the issue of a tender floated by the respondent No. 2. The respondent No. 2 is a statutory authority constituted under Section 3 of the Uttar Pradesh Industrial Area Development act, 1976 and has been established for the purpose of setting up an Urban and Industrial township and is entrusted with the responsibility of allotment of land for institutional purposes, and for the planned development of the district.

( 4 ) SOMETIMES in the year 1994, the respondent No. 2 through its Chairman/chief Executive officer, invited sealed tenders along with detailed technical project report, land area requirements and land rate offered for it from renowned corporate houses/institutions/nris for allotment of land for establishment of a Super Speciality Hospital and Research Institute in the n. O. I. D. A. Complex through public advertisements. The petitioner applied against that advertisement and was successful in the bidding for the hospital in Sector 62, and was allotted a plot bearing No. B-22, Sector 62 in the N. O. I. D. A. complex for a total consideration of Rs. 1,79,20,000. Subsequently a lease deed was also executed between the petitioner and the respondent No. 2 on 2. 1. 1996. A copy of the allotment letter dated 19. 4. 1995 is contained in annexure-B and a copy of the lease deed is contained in Annexure-C to the petition. A copy of the tender document containing the terms and conditions of allotment, is contained in annexure-D to the petition. The lease deed provided in Clause II (g) that the terms of the allotment order and the terms and conditions of the tender shall be deemed to be part of the lease deed.

( 5 ) IT is alleged in para 7 of the petition that the project involves a huge amount of investment in terms of experience, financial funding and technological know-how. Since the petitioner was facing certain financial and other constraints in proceeding further with the project in spite of best efforts, the petitioner approached Fortis Healthcare Ltd. , a company incorporated under the indian Companies Act, having its registered office at 25, Nehru Place, New Delhi, for obtaining financial and other assistance for the project with a proposal to also invest in the equity share holding of the petitioner company as majority shareholder. Fortis Healthcare Limited is inter alia engaged in the business of setting up a network of world class super speciality hospitals linked with a large network of Multi Speciality Hospitals to provide the best quality health-care to the people of North India.

( 6 ) IT is alleged in para 8 of the petition that on the basis of the petitioners above proposals, representations and assurances, Fortis Healthcare Ltd. agreed to develop th































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