MAIN POINT
Allotment of Govt. plots should be transparent and without discrimination, favouritism or nepotism.

Headnote:(a) Indian Contract Act, 1872 – Section 23 – Land disposal policy mentioning disposal by fixed rate/competitive bidding – However no procedure adopted – No notice or advertisement issued/published – Two valuable plots allotted to two different companies under proprietorship of same person – Trust of the same person was allotted a third plot – No transparency maintained in allotment. (Para 34, 35, 36)
       (1980) 4 SCC 1; (1979) 3 SCC 489; (2011) 5 SCC 29; (1983) 4 SCC 556; (1987) 2 SCC 295; (2002) 7 SCC 564; (2012) 3 SCC 1 – Relied upon
       (2003) 8 SCC 567; (2007) 10 SCC 674 – Distinguished impliedly
       (2007) 9 SCC 593 – Referred
       (b) Administration of Justice – Judicial Review – High Court noticing points of illegality in allotment of plots – Not agreeing with cancellation thereof merely because those grounds were not mentioned in cancellation order – Losing sight of the admitted fact of allotment of three valuable plots to the same person in different names by entertaining three private applications – Not proper. (Para 45)
       © New Bombay Road Disposal Rules, 1975 – Chapter 5 – Provision permitting allotment for religious, educational, charitable etc. purposes – Instant allotments for commercial purpose – No consideration of merit of applications – Amounts to largesse at sweet will and not founded on a sound, transparent, discernible and well-defined policy – Allotments arbitrary. (Para 46, 47, 49)
       (2011) 5 SCC 29 – Relied upon
       (d) Indian Contract Act, 1882 – Section 23 – Allotment of plots arbitrary and favouritism based on nepotism and was irrational and unreasonable – Cancellation of all the allotments by CIDCO justified. (Para 51, 55)
       (1979) 3 SCC 489; (2011) 6 SCC 125 – Relied upon
       Facts of the case:
       These appeals are directed against the common judgment and final order dated 01.09.2009 passed by the High Court of Judicature at Bombay whereby Division Bench of the High Court has allowed three Writ Petitions being W.P. Nos. 9467, 9468 of 2005 and 3423 of 2006 preferred respectively by M/s. Popcorn Entertainment Corporation, M/s. Platinum Entertainment and M/s. Platinum Square Trust. By way of these writ petitions, the writ petitioners had challenged orders of appellant-‘The City & Industrial Development Corporation’ by which allotment of plot of lands to M/s. Popcorn and M/s. Platinum Entertainment for erecting entertainment complex in Navi Mumbai and the allotment of plot of land to M/s. Platinum Square for establishment of country club were cancelled.
       Finding of the Court:
       CIDCO was justified in cancelling all the allotments made in favour of the respondents.
       Result: Appeals allowed.

Judgement Key Points

Key Points: - (!) Government largesse must be exercised within law and non-arbitrarily; actions must reflect public interest. - (!) State/agency allotment of land must be founded on a sound, transparent, non-discriminatory policy and not through private applications dehors invitation/advertisement. - (!) Government action in grant of largesse must be reasonable, nondiscriminatory, and non-arbitrary; departure requires rational justification. - (!) Bulk sale/disposal practices must consider public interest and avoid favouritism/nepotism; open tender/public auction preferred where applicable. - [p_54 to p_59] CIDCO Land Pricing and Disposal Policy distinguishes disposal methods (tender vs fixed rate vs by request) for different plot types; in multiplex/auditorium cases, disposal should be by fixed rate or competitive bidding. - [p_80 to p_82] Public trust and equality principles constrain state dealings with natural/public resources; transparency and fair process required. - [p_94 to p_101] High Court erred in disregarding lack of transparency; three plots allotted to same individual in different capacities without proper tender/invitation undermined public policy. - [p_104 to p_112] CIDCO’s cancellation of allotments upheld as consistent with law, policy, and public interest after considering Shankaran report and Section 23 of the Indian Contract Act.

What is the legality and transparency of CIDCO's land allotment process in Navi Mumbai?

What standards of reasonableness, non-discrimination, and public policy apply to government disposals of land to private parties?

To what extent can a government authority cancel allotments made under private applications when such allotments were not publicized or tendered?

JUDGMENT

M.Y. EQBAL, J.

Leave granted.

2. These appeals are directed against the common judgment and final order dated 01.09.2009 passed by the High Court of Judicature at Bombay whereby Division Bench of the High Court has allowed three Writ Petitions being W.P. Nos. 9467, 9468 of 2005 and 3423 of 2006 preferred respectively by M/s. Popcorn Entertainment Corporation (in short, ‘M/s. Popcorn’), M/s. Platinum Entertainment (in short, ‘M/s. Platinum’) and M/s. Platinum Square Trust (in short, ‘M/s. Platinum Square’). By way of these writ petitions, the writ petitioners had challenged orders of appellant-‘The City & Industrial Development Corporation’ (in short ‘CIDCO’) by which allotment of plot of lands to M/s. Popcorn and M/s. Platinum Entertainment for erecting entertainment complex in Navi Mumbai and the allotment of plot of land to M/s. Platinum Square for establishment of country club were cancelled.

3. The facts giving rise to aforesaid writ petitions and consequently present appeals are almost similar. However, for the sake of clarity factual matrix of each appeal has been mentioned here separately.

4. The respondent-M/s. Popcorn Entertainment (SLP (C) No.1290 of 2010) in the appeal by special leave arising out of Writ Petition No.9467 of 2005, by way of an application made a request for allotment of plot in Airoli for setting up multiplex-cum-auditorium-cum-entertainment centre. On CIDCO’s instructions, respondent submitted detailed project report. CIDCO, by their letter of intent, requested the respondent herein to pay an Earnest Money Deposit of Rs.20,77,000/-within 15 days from the receipt of the letter to enable the Board to consider the allotment in favour of the respondent. The respondent, accordingly made EMD on 29.6.2004. On 29.7.2004, CIDCO approved the allotment of a plot in favour of the appellant as the Board had not got any response for similar plots in public tender. The total lease premium in respect of the plot was Rs.2,07,70,000/-and the respondent was directed to pay the balance amount of Rs.1,86,93,000/-by 14.9.2004. The allotment was allegedly made in terms of the New Bombay Land Disposal Regulations, 1975 and also in terms of the Land Pricing and Disposal Policy of CIDCO under which the land could be allotted to any person by considering individual application at the reserved price fixed by CIDCO. Thereafter, by making balance payment including additional amount due to the marginal increase in the demarcation of the plot, M/s. Popcorn Entertainment made a total payment of Rs.2,98,22,420/-being the full and final payment in respect of allotment in favour of the respondent as demanded by CIDCO. An agreement to lease was entered into with CIDCO in respect of the plot allotted to the respondent.

5. However, on 1.8.2005, appellant CIDCO issued a show cause notice to the respondent regarding the plot at Airoli seeking cancellation of the agreement to lease executed in favour of the respondent. The respondent submitted reply to the show cause notice and also sought information from CIDCO under the Right to Information Act regarding allotment to various parties and the details thereon. The Agreement of Lease was repudiated and rescinded, against which the respondent approached the High Court by way of a writ petition.

6. The respondent-M/s. Platinum Entertainment in the appeal by special leave (SLP(C)No.1117/2010) arising out of Writ Petition No.9468 of 2005, by way of an application made a request for allotment of plot for construction of a multiplex at Kharghar Railway Station. Upon being asked by the appellant CIDCO, M/s. Platinum deposited EMD of Rs.20 lakh being 10% of the tentative price of the plot in order to consider the application of the respondent. Thereafter, CIDCO approved the allotment in favour of the respondent considering the fact that there was no multiplex in the area and the earlier effort of CIDCO to advertise for such plots had met with no response. CIDCO issued allotment letter in fav

Click Here to Read the rest of this document

2014 Supreme(SC) 722

MAIN POINTAllotment of Govt. plots should be transparent and without discrimination, favouritism or nepotism.

What is the legality and transparency of CIDCO's land allotment process in Navi Mumbai?

What standards of reasonableness, non-discrimination, and public policy apply to government disposals of land to private parties?

To what extent can a government authority cancel allotments made under private applications when such allotments were not publicized or tendered?

Cases Referred (12)

MAIN POINT
Allotment of Govt. plots should be transparent and without discrimination, favouritism or nepotism.