IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
PRITINKER DIWAKER, ASHUTOSH SRIVASTAVA, JJ.
Allure Developers Private Limited – Appellant
Versus
State of U.P. and another - Respondents
Civil Misc. Writ Petition No. 19361 of 2020
Decided on : 23-05-2022
Companies Act, 1956 - U.P. Urban Planning & Development Act, 1973 - Section 41 (3) - U.P. Industrial Area Development Act, 1976 - Section 12 - Plot - Handover possession - Lease-deed - Direct respondent No. 2 to handover vacant, physical and peaceful possession of Encroached Portion of Subject Plot – Direct respondent No. 2 to give ''zero period'' from date of execution of Lease-deed - Held, Respondent No. 2 under impugned order has noted that encroachment ad-measuring 17621 square meter was removed - It necessarily flows that petitioner was not put in possession of entire land allotted to it consequent to execution of lease-deed - In such view of matter, Court is of view that respondent No. 2 was not justified to restrict zero period benefit only - In circumstances that stood attracted to case of petitioner, it was liable to get zero period benefit when encroachment was admittedly cleared from plot allotted – Court also find that respondent No. 2 is not justified to charge lease rent - Order passed by respondent is set aside - Petition allowed.
JUDGMENT :
By the Court.-Shri Amit Saxena, learned Senior Advocate assisted by Shri Siddharth Singhal and Shri Ravi Nanda, learned counsel for the petitioner and Shri Sarthak under the authority of Shri Kaushalendra Nath Singh, learned counsel for the respondent No. 2.
2. The writ petitioner is a private limited company registered under the provisions of the Companies Act, 1956, with its registered office at 3016/5, Second Floor, Street No. 12A, Ranjeet Nagar, New Delhi. The petitioner is engaged in the development of residential as well as commercial projects.
3. The writ petition was initially filed seeking the following reliefs :
(ii) a writ, order or direction in the nature of mandamus directing the respondent No. 2 to give ''zero period'' from the date of execution of the Lease-deed i.e. 19-12-2014 till the time the petitioner is given the vacant, physical and peaceful possession of the said Encroached Portion of the Subject Plot being Plot No. SC-02/C, Sports City, Sector 150, Noida Gautam Budh Nagar allotted to the petitioner.
(iii) a writ, order or direction in the nature of mandamus directing the respondent No. 2 to defer the payment of annual lease rent for the period commencing from the date of execution of Lease-deed dated 19-12-2014 till the date on which the vacant, physical and peaceful possession of the Encroached Portion of the Subject Plot is handed over to the petitioner:
(iv) a writ, order or direction in the nature of mandamus directing the respondent No. 2 to grant extension of time with regard to the time period stipulated in the lease-deed for completion of the project commencing from the date of execution of lease-deed i.e. 19-12-2014 till the date on which the vacant, physical and peaceful plot of Encroached Portion of the Subject Plot is handed over to the petitioner; and
(v) a writ, order or direction in the nature of mandamus directing the respondent No. 2 to not issue any demand note or any further or subsequent default notices till the time the petitioner is given the vacant, physical and peaceful possession of the Encroached Portion of the Subject Plot being Plot No. SC02/C, Sports City, Sector 150, Noida Gautam Budh Nagar allotted to the petitioner; and
(vi) any other writ, order or direction as this Hon'ble Court may deem fit and proper in the circumstances of the case to meet the ends of justice.
(vii) Award cost of the petition to the petitioner.''
4. The writ petition was amended and the following reliefs were incorporated :
(ix) a writ, order or direction in the nature of mandamus directing the respondent No. 2 to not take any coercive steps/actions pursuant to the Impugned Order dated 11-02-2021.
(x) a writ, order or direction in the nature of mandamus directing the respondent No. 2 to expeditiously grant approval of the building plans submitted vide application dated 12-03-2020 (Annexure 19 to this writ petition) in respect of group housing project of the petitioner in the Subject Plot.''
5. It is contended on behalf of the petitioner that the respondent No. 2 floated a scheme, being Scheme 2014-15 (Sports City) for development of Sports City in Plot No. SC-02 in Sector 150, NOIDA and invited bids from interested parties for being awarded the project under the scheme. The petitioner submitted its bid as a consortium member and the bid was accepted by the respondent No. 2 vide
Authority must deliver physical possession of land to the allottee; failure to do so grants the right to zero period benefits under lease agreements.
A party cannot be denied benefits due to issues beyond their control; zero period benefits were affirmed due to delays stemming from governmental actions.
Development authorities must adhere to mandatory conditions regarding possession certificates; failure to comply invalidates lease rent claims and CIC charges deemed illegal must be refunded.
Actual physical possession must be established for lease obligations; mere issuance of possession certificate is insufficient.
The lessee is not obligated to pay premium and interest until actual physical possession of the leased land is delivered to them, emphasizing the authority's duty to provide possession first.
The cancellation of a lease due to shareholding changes is unjustified when actual possession of leased land has not been delivered, invalidating claims for rents and penalties.
Developers are entitled to waivers and extensions when failure to provide essential infrastructure, such as access roads, obstructs project execution, affirming obligations under lease agreements.
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