IN THE HIGH COURT OF ALLAHABAD
MAHESH CHANDRA TRIPATHI, PRASHANT KUMAR, JJ.
M/s Lotus Green Constructions Pvt. Ltd. - Appellant
Versus
State of U.P. and others - Respondents
WRIT - C No. - 15604 of 2021
Decided on : 24-02-2025
(A) Sports City Scheme - Development of sports facilities in NOIDA - Allegations of irregularities and scams in allotment and development - CAG report indicating loss of Rs. 9,000 crores due to improper pricing and lack of compliance with scheme conditions - Court directed CBI inquiry into the actions of NOIDA officials and developers involved in the Sports City Project. (Paras 1, 27, 160, 162)
(B) Judicial Review - Scope of judicial intervention in contractual matters involving public authorities - Courts can intervene to ensure fairness and adherence to public interest in government contracts. (Paras 138, 140)
(C) Corporate Veil - Lifting of corporate veil to hold parent companies liable for actions of subsidiaries when used to defraud stakeholders - Court emphasized the need for accountability in corporate structures. (Paras 108, 110, 124)
(D) Final Decision - Writ petitions dismissed; CBI directed to investigate the scam; NOIDA ordered to recover outstanding dues and issue notices to stakeholders. (Paras 162, 163)
JUDGMENT :
TABLE OF CONTENTS
S.No. | Heading | Page nos. |
1 | Facts of the case | 3-7 |
2 | Present Sports City Scheme 02 in Sector 150 | 7-17 |
3 | CAG Report | 17-19 |
4 | Board meeting of the NOIDA Authority | 19-21 |
5 | Prayers made in the leading writ petition | 21-24 |
6 | Prayers made in the connected writ petitions | 24-33 |
7 | Arguments on behalf of petitioners | 33-37 |
8 | Arguments on behalf of respondents | 37-44 |
9 | Change in shareholdings of various companies | 44-45 |
10 | Further arguments of the petitioners | 45 |
11 | Analysis by the Court | 45-46 |
A. Deviations | 46-47 | |
(I) Formation of the Scheme | 47-48 | |
(II) Approval of Bid | 48 | |
(III) Failure on behalf of NOIDA Authority | 48-51 | |
B. Illegal sale | 51-52 | |
C. Outstanding dues of the Sports cities | 52-55 | |
D. Illegal benefits to the allottees | 56-61 | |
E. Need for lifting of corporate veil | 61-62 | |
F. Liabilities of the original allottees with regard to its subsidiaries | 62-66 | |
G. Conduct of the petitioners | 67-70 | |
H. Withdrawal of the writ petitions | 70 | |
12 | Scope of judicial intervention | 70-73 |
13 | Enquiry against the delinquent officers and other conspirators by C.B.I. | 73-77 |
14 | Conclusion | 77-79 |
1. All the aforesaid writ petitions have been clubbed and heard together as they involve similar issue, and hence, they are being decided by this common judgement and order.
2. Heard Sri Shashi Nandan, learned Senior Advocate and Sri Anoop Trivedi, learned Senior Advocate assisted by Sri Prateek Sinha, learned counsel for the petitioners, Sri M.C. Chaturvedi, learned Additional Advocate General assisted by Sri Devesh Vikram, learned Additional Chief Standing Counsel and Sri Mohan Srivastava, learned Standing Counsel for the State-respondent nos.1 and 3 and Sri Manish Goyal, learned Senior Counsel assisted by Sri Kaushalendra Nath Singh and Ms.Anjali Gokhlani, learned counsel for respondent no. 2-Noida Authority.
FACTS OF THE CASE
3. Board of New Okhla Industrial Development Authority, [NOIDA] took a decision on 16.8.2004 to develop sports facilities of international standards in NOIDA. In the next meeting held on 25.6.2007 the Board came to a conclusion that since there are no sports facilities available in NOIDA, hence an area of 311.60 hectares was marked for development of the sports city. In the next Board meeting held on 8.4.2008, it was resolved, keeping the upcoming Commonwealth Games-2010 in mind, that the land use of Sector 76,78,79,101, 102, 104 and 107 be changed for the development of the sports city. However, the area earmarked to develop sports city was increased to 346 hectares. Accordingly, Grand Thorton was appointed to formulate the scheme and to lay down conditions for the allotment of the land. In the next Board meetings held on 18.9.2008 (154th Board Meeting), the amended Master-plan 2031 of NOIDA was considered, and for the first time, the details, as to what is expected in the sports city, were mentioned. Clause 5.9.3 of the Master plan laid down the details for the development of the sports city, which is extracted below:-
“Development of a Sports City was proposed in the Central – Eastern part of Noida along the DSC Road. The proposed site is well linked by the proposed Master Plan roads connecting Expressway. National Highway-24, Greater Noida and other parts of the city. Noida Sports City envisions itself to be one of its kind in the Country, with a clear and defined focus on an integrated sports theme, its form providing a strong and such clearly identifiable image to Noida, where sports events catalyze other activities such as tourism, community meetings, exhibitions, conventions and festival. In order that the vision remains relevant, the sports and other related recreational and institutional facilities were proposed in the Sports City. Large size project of Sports-City could not be implemented. Therefore, the authority decided to have more than one projects of sports city of lesser sizes at different locations of the town. These Sports City projects would have about 50-100 hectares, or more land. The Sports City is basically a part of recreational land use and therefore its development is proposed in







The court emphasized the need for accountability in public contracts, allowing judicial review to ensure fairness and public interest, while directing a CBI inquiry into irregularities in the Sports ....
The court emphasized the need to pierce the corporate veil to hold individuals accountable for fraud, asserting judicial authority to intervene in administrative decisions when public interest is com....
A lead member of a consortium who opts out lacks locus standi to challenge the actions of the authority regarding project delays and cannot claim damages.
The court emphasized that insolvency proceedings should not be exploited to evade liabilities, confirming the necessity to protect homebuyers' interests and investigate corporate fraud.
The court emphasized that reverse CIRP cannot be used to evade liabilities, and the interests of homebuyers must be prioritized in insolvency proceedings.
Writ petitions can be maintained against administrative actions affecting contracts, especially when principles of natural justice and public policy are at stake.
A public interest litigation cannot be used by a petitioner who previously supported the actions being challenged, as it constitutes an abuse of the judicial process.
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