1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 9467 OF 2005 1. Popcorn Entertainment Corporation, through is proprietor Shri Nilesh Gala, D-1/S-10, M.G.Complex, Sector-14. Vashi, Navi Mumbai. 2. Shri Nilesh Gala, D-1/S-10, M.G.Complex, Sector-14. Vashi, Navi Mumbai. ... Appellants. V/s. 1. The City Industrial Development Corporation, Through its Managing Director, CIDCO Bhavan, Kokan Bhawan, Navi Mumbai. 2. The State of Maharashtra, Through its Secretary, Mantralaya, Mumbai- 400 032. Maharashtra. ... Respondents. WITH WRIT PETITION NO. 9468 OF 2005 1. Platinum Entertainment, through is proprietor Shri Nilesh Gala, D-1/S-10, M.G.Complex, Sector-14. Vashi, Navi Mumbai. 2. Shri Nilesh Gala, D-1/S-10, M.G.Complex, Sector-14, Vashi, Navi Mumbai. ... Appellants. V/s. 1. The City Industrial Development Corporation, Through its Managing Director, CIDCO Bhavan, Kokan Bhawan, Navi Mumbai. 2. The State of Maharashtra, Through its Secretary, Mantralaya, Mumbai- 400 032. Maharashtra. ... Respondents. 2 WITH WRIT PETITION NO. 3423 OF 2006 Platinum Square Trust,through its trustee Shri Damji Kunverji Gala Navi Mumbai. ... Appellant. V/s. 1. The City Industrial Development Corporation, Through its Managing Director, CIDCO Bhavan, Kokan Bhawan, Navi Mumbai. 2. The State of Maharashtra, Through its Secretary, Mantralaya, Mumbai- 400 032. Maharashtra. ... Respondents. Vikas Singh, senior counsel with Ms.Amrita Narayan, Navdeep Vora, Rajmani Verma, Madhukar Kalzunkar and Mr.Suhas Patil i/b. Navdeep Vora & Associates for the petitioners. G.S.Hegde with C.M.Lokesh i/b. G.S.Hegde & Associates for respondent No.1. P.I.Khemani, A.G.P. For respondent No.2. CORAM : V.C.DAGA and MRS.MRIDULA BHATKAR, JJ. LAST DATE OF HEARING : 4th August 2009. DATE OF JUDGMENT : 1st September 2009. JUDGMENT : (Per V.C.Daga, J.) The first and second petitioners  M/s.Popcorn Entertainment in W.P.No.9467/2008 ( M/s.Popcorn for short) and M/s.Platinum Entertainment in W.P.No.9468/2008 ( M/s.Platinum for short) were allotted plot of lands by 3 respondent No.1  The City and Industrial Development Corporation ( CIDCO for short) for erecting entertainment complex in Navi Mumbai. Whereas third petitioner - M/s.Platinum Square Trust in W.P.No. 3423/2006 ( Platinum Square for short) was allotted plot of land for establishment of country club. The said allotments were cancelled by CIDCO. The petitioners have challenged the said orders of cancellation through these petitions filed under Article 226 of the Constitution of India. 2. The facts giving rise to these petitions are almost similar. The questions of law raised are identical. Rival submissions made are common to all petitions. Common written submissions are circulated by the parties. However, the petitions filed by M/s.Popcorn and M/s.Platinum Entertainment are the subject matter of remand order passed by the Hon ble Supreme Court, whereas third petition, filed by M/s.Platinum Square is coming up for consideration before this Court for the first time along with other two remanded petitions since the facts and issues involved are common. It has become necessary to state the facts separately in each petition for the sake of clarity and to demonstrate common thread running between them requiring identical judicial approach. But, before we do so, we may point out the facts common to all in relation to the source of power of allotment of land by CIDCO and reasons for cancellation of allotments made in favour of the petitioners. 4 Facts Common to All : 3. The respondent No.1  CIDCO has been nominated as new town planning authority for the new town of New Bombay. The respondent No.2 is the Managing Director of respondent No.1. Respondent No.3 is the State of Maharashtra, who is having ultimate authority and power to control and regulate the activities of planning and development under the Maharashtra Regional and Town Planning Act, 1966 ( MRTP Act for short) 4. In exercise of powers conferred by sub-clause (a) of clause (1) of section 159 of the MRTP Act, the CIDCO being new town development authority for the area comprised in the site of New Bombay under sub-section (3A) of section 113 of the said Act, has with the previous approval of the State Government published in the Maharashtra Government Gazette Part IV0C on 26th July, 1979 the New Bombay Disposal of Lands Regulations, 1975 ( the Regulations for short). 5. The aforesaid regulations, inter alia, provide for the demarcation of plots vested in the Government by CIDCO into disposable plots having regard to their size and use. The said regulations also make provision for conditions of lease, mode of disposal and for grant of land for religious, educational, charitable and public purposes. For the present purpose, regulation 4 of Chapter IV which provides for mode of disposal is material. We may quote the same. 4. Manner of disposal of land: The Corporation may dispose of plots of land 5 by public auction or tender or by considering individual applications as the Corporation may determine from time to time. 6. Suffice it to say that in exercise of the above powers the plot of lands were allotted to the petitioners by CIDCO and after receipt of full consideration, CIDCO executed agreements of lease in favour of two petitioners, viz. M/s.Popcorn and M/s.Platinum. Though the entire consideration was paid by the third petitioner- M/s.Platinum Square to CIDCO, the possession of the plot was to be handed over to it only after its registration as society and/or charitable trust as the case may be. 7. The State Government subsequent to the confirmed allotments appointed the Additional Chief Secretary, Government of Maharashtra Dr.D.K.Shankaran to go into the question of validity of the allotments of plots during the tenure of the Managing Director of CIDCO, one Mr.V.M.Lal. Dr.D.K.Shankaran, after conducting discrete enquiry, submitted his reported on 31st March, 2005. The State Government vide its letter dated 15th April, 2005 forwarded this report to the CIDCO with direction to implement the recommendations made by Dr.D.K.Shankaran in his report ( Shankaran Report for short). 8. The show cause notices were issued by the CIDCO on the basis of the above report to the petitioners without making any allegations of fraud, misrepresentation or undue influence on the part of the petitioners in the matter of allotment of plots. The substance of the notices is that the allotments were made 6 without inviting public tenders and the concluded agreements were void on the thrust of section 23 of the Contract Act, 1872 being opposed to the public policy. 9. The aforesaid show cause notices were replied by the petitioners by their separate replies requesting therein to supply copy of the Shankaran Report contending that in absence of report it was not possible for them to effectively reply the show cause notices. The petitioners also alleged breach of principles of natural justice and raised other legal and factual contentions reiterating their specific request for supply of copy of the Shankaran Report which had been heavily relied upon by the CIDCO in its show cause notices. 10. It appears that the CIDCO without furnishing copy of the Shankaran Report passed impugned orders cancelling allotment of plots mentioning therein that the Board of Directors of CIDCO had found themselves in substantial concurrence with the findings recorded by Dr.D.K.Shankaran in its enquiry. The impugned orders further mention that the agreements signed by the CIDCO were void ab initio under section 23 of the Contract Act as the tenders were not invited and that the allotments were made in violation of Article 14 of the Constitution of India. The petitioners were called upon to remain present on the site to hand over peaceful possession of the subject plots. It also provided that on the surrender of the plot, CIDCO would repay the amount of consideration to the petitioners received by it on account of premium without interest. 7 11. Being aggrieved by the aforesaid orders, the petitioners have filed these three separate petitions detailed hereinbelow. 12. Two petitions out of three, i.e. the petitions filed by M/s.Popcorn and M/s.Platinum Entertainment came up for hearing before the learned Division Bench presided over by Shri V.G.Palshikar, J. (as he then was). The petitions were heard and dismissed by an order dated 30th June, 2006 relegating the petitioners to have an alternate efficacious remedy by way of civil suit. 13. Being aggrieved by the aforesaid order, both petitioners approached the Hon ble Supreme Court by way of S.L.P. The Apex Court, on 24th July, 2006, issued notices returnable within six weeks and stayed dispossession of the subject petitioners with further direction directing them not to put up any construction until further orders. Later on the leave to appeal was granted. After hearing the parties to the appeal, the Apex Court vide its judgment and order dated 29th February, 2007 was pleased to hold that the writ petitions were maintainable and that an error was committed by this Court in relegating the petitioners to the civil Court. The matters were remanded to this Court for decision on merits. The Apex Court while remanding the matters expressed its opinion on the rival contentions raised by the parties, the details of which are referred in the latter part of the judgment so as to maintain proper sequence. That is how, all these matters were placed before us for final hearing. 8 The Factual Matrix : 14 The factual matrix giving rise to each petition is sketched hereinbelow: W.P.No.9467/2008 : 15. The petitioner made an application on 22.2.2004 requesting for allotment of plot reserved for multiplex. On 8.6.2004, the petitioner made a request for allotment of the plot in Airoli for setting up multiplex-cum- auditorium-cum-entertainment centre. CIDCO, in response to the said application, requested the petitioner to submit a project defining their future built-up activities. The petitioner submitted detailed project report. CIDCO, by their letter of intent, requested the petitioner to pay an EMD 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 petitioner. The petitioner accordingly made EMD on 29.6.2004. On 29.7.2004, CIDCO approved the allotment of Plot No.2, Sector 11, Airoli in favour of the petitioner 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 petitioner was directed to pay the balance amount of Rs.1,86,93,000/- by 14.9.2004. The allotment was 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. On 16.8.2004 and 13.9.2004, the 9 petitioner paid Rs.1,86,93,000/- as demanded. On 15.10.2004, CIDCO after inspection of the plot issued a corrigendum asking the petitioner to pay a further sum of Rs.53,236/- being the additional amount due to the marginal increase in the demarcation of the plot. The petitioner paid the balance amount of Rs.53,236/-, thus, making a total payment of Rs.2,08,22,420/- being the full and final payment in respect of allotment in favour of the petitioner as demanded by CIDCO. An agreement to lease was entered into with CIDCO in respect of the plot allotted to the petitioner. 16. CIDCO, on 1.8.2005, issued a show cause notice to the petitioner regarding the plot at Airoli seeking to cancel the agreement to lease executed in favour of the petitioner. The petitioner submitted reply to the show cause notice. The petitioner also sought information from CIDCO under the Right to Information Act on 21.12.2005 / 3.4.2006 / 4.4.2006 / 13.4.2006 / 20.4.2006 regarding allotment to various parties and the details thereon. 17. The petitioner on 28.10.2005, approached this Court against the cancellation order dated 18.12.2005 by way of present petition. The petition was listed for hearing on 2.1.2006 and this Court granted stay to the operation of the order dated 18.12.2005. Parties were asked to file their reply and rejoinder etc. in the petition. The matter was listed on 17.5.2006 for hearing and thereafter it was heard and dismissed in limine by an order dated 30th June, 2006 detailed hereinafter. 10 W.P.No.9468/2008 : 18. The petitioner made an application for allotment of plot on 18.5.2004 for construction of a multiplex at Kharghar Railway Station. The first respondent, the City Industrial Development Corporation (in short CIDCO ) asked the petitioner to pay an EMD of Rs.20 lakh being 10% of the tentative price of the plot in order to consider the application of the petitioner. The petitioner deposited the said amount of EMD immediately. CIDCO, vide its Board resolution dated 3.6.2004, approved the allotment in favour of the petitioner 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 later in favour of the petitioner asking the petitioner to pay Rs. 1,80,00,000/- being the balance price of the plot. The appellant made two separate payments of Rs.90 lakh each towards the balance price of the plot on 16.8.2004 and 19.8.2004. The petitioner paid a sum of Rs.20,00,600/- being the other charges demanded by the respondent. The petitioner was asked to pay a further sum of Rs.65,096/-, which the petitioner paid immediately. CIDCO unilaterally decided to ask the petitioner to pay a further sum of Rs.20 lakh by enhancing the rate at which the plot was to be allotted to the petitioner from Rs. 2500 per square meter as demanded in the allotment letter to Rs.2750 per square meter because the plot of the petitioner was on a 24 meter road. The petitioner on 17.11.2004 paid a further payment of Rs.20 lakh along with Rs.2,96,078/- plus Rs.4957/- being the additional cost and the other charges. On 14.1.2005, the petitioner paid a further sum of Rs.19,828/- being the sum demanded 11 by the respondent. The petitioner on 17.1.2005 entered into an agreement to lease with the respondent for the allotment of the plot. On 28.2.2005, CIDCO being the development authority of the area issued commencement certificate to the petitioner permitting the petitioner to start construction. 19. On 14.7.2005, the petitioner received a show cause notice seeking to cancel the allotment in favour of the petitioner on the ground that the allotment was void in view of Section 23 of the Contract Act as being opposed to public policy. The main ground in the show cause notice was that the allotment was without issuance of tender and was opposed to public policy. On 27.7.2005, the petitioner submitted reply to the show cause notice. On 16.12.2005, CIDCO issued an order cancelling the agreement to lease and sought to resume the possession of the plot. 20. With the above facts, the petitioner approached this Court on 28th December, 2005 with the present petition against the impugned order of cancellation dated 16.12.2005 and this Court granted stay to the order dated 16.12.2005 and adjourned the matter for further hearing on 4.1.2006. 21. The petitioner, vide reference dated 8.3.2006 of CIDCO, under the Right to Information Act, 2005, has asked them to supply information regarding the allotments made by the Social Service Department without any advertisement i.e. by considering individual applications. On 16.3.2006, the petitioner filed rejoinder before this Court pointing out further 12 information sought under the Right to Information Act, so as to demonstrate that the allotment in favour of the petitioner was completely in order and was made in terms of the Land Pricing and Land Disposal Policy and also that there was no loss caused to CIDCO in the said allotments. 22. The petitioner sought another information from the CIDCO authorities regarding methodology for allotment of plots for service industries, warehousing, multiplexes, etc. Again on 4.4.2006, the petitioner had sought for further information in respect of 15 cases similar to the case of the petitioner regarding whether disposal was by tender or without tender, whether the pricing policy was adopted or not, etc. Further information was sought on 13.4.2006 regarding allotment of social facility plots during April 2003 to March 2005. CIDCO, vide its letter dated 13.4.2006, has informed the petitioner that during April 2003 to March 2005, 27 plots were allotted for the opening of schools, 9 plots were allotted for opening of colleges, 5 plots were allotted to charitable and religious institutions, 9 plots were allotted to cultural organizations, 2 plots were allotted for sports and 13 plots were allotted for social welfare. 23. In all, 65 plots were allotted under the category of social facility. CIDCO has also confirmed that all the allotments had been made without issuance of tender and that all the above mentioned allotments had been made as per Land Pricing and Land Disposal Policy of CIDCO i.e. the same as was done in the case of petitioner. None of these allotments have been cancelled by CIDCO till date. 13 24. On the above backdrop, the petitioner is contending that the entire basis for seeking to cancel the petitioner s plots is illegal and the same cannot stand to the test of judicial scrutiny. W.P.No.3423/2006 : 25. The petitioner made an application on 4th December, 2003 through its Managing Director requesting for allotment of plot of land admeasuring 80,000 sq.mtr. at Kharghar hill for establishment of country club. The first respondent  CIDCO having a plot of land earmarked for similar purpose, considered the request of the petitioner and called upon the petitioner to pay Rs.39.52 lakh on or before 20th April, 2004 before 20th April, 2004 constituting 10% of the value of the plot as EMD so as to enable the CIDCO to place the proposal of the petitioner before the Board of Directors. CIDCO further requested the petitioner to submit registration certificate either under the Trust Act or the Society Registration Act before allotment/ possession of the land so that the case of the petitioner could be considered for allotment at subsidized rate in terms of the policy; otherwise commercial rates were to attract for such allotment. The petitioner in terms of the letter of CIDCO deposited a sum of Rs.39.52 lakh with them. 26. The petitioner got its trust deed registered on 14th May, 2004; wherein six Trustees were appointed. Amongst others, objectives of the Trust are to establish and support, maintain and run sports club, gymnasium, health club, amusement park, yoga centre, water sports etc. and to carry out activities relating thereto. One 14 of the trustees of the Platinum Square Trust vide his letter dated 18th May, 2004 addressed to the Assistant Charity Commissioner, Thane gave his no objection for the Platinum Square Trust to use his address as registered address of the Trust. 27. The petitioner was alloted 50,350 sq.mtr. Of land by CIDCO for a total sale consideration of Rs. 3,43,70,800/-. Out of the said amount of consideration, the petitioner had already deposited Rs.39.52 lakh as such the petitioner was directed to deposit Rs. 1,52,09,400/- in two installments i.e. on 30th July, 2004 and 29th August, 2004 being the balance lease premium payable in respect of the subject plot. In the allotment letter, it was specifically mentioned that payment of lease premium in a stipulated period is an essence of concluded contract. It was further provided in the allotment letter that extension of time could be granted which would be up to 3 months for payment of the first installment and up to 16 months for the payment of the second installment. It was provided therein that up to 3 months the petitioner would be charged 13% interest and beyond 3 months the petitioner would be charged 16% interest for the extended period of time. 28. The petitioner, on 15th September 2004, paid the first installment of Rs.1,52,09,400/- within the extended time permitted under the allotment i.e. within 2 months from the due date and within 3 months from the date of allotment of the plot. The petitioner, on 3rd May, 2005, wrote letter to the CIDCO for extension of time for making payment of second installment up to December, 2005. Clearly in terms of the allotment letter, the 15 petitioner could ask extension of second installment up to 29th December, 2005. 29. The petitioner Trust was registered under the Bombay Public Trust Act, 1950 on 19th April, 2005. The petitioner submitted documents to CIDCO on 25th May, 2005 evidencing registration of the Trust. 30. The petitioner, on 20th July, 2005, received show cause notice seeking to cancel the allotment made in favour of the petitioner on the basis of Shankaran Report. 31. The petitioner, on 3rd August, 2005, submitted its detailed reply to the show cause notice challenging the cancellation of allotment of plot, reiterating that the allotment was in accordance with law as such it could not be cancelled. 32. The petitioner, on 29th December, 2005, wrote letter to the Marketing Manager of CIDCO requesting him to accept payment of second installment being the last date up to which the extension could be granted under the allotment. However, CIDCO refused to accept the payment. The petitioner on the same date wrote another letter recording the fact that CIDCO has refused to accept the second installment and that the petitioner would not be liable to pay any further interest from the said date and that the allotment could not be canceled on the ground that the payment has not been made by the petitioner. The petitioner also informed the respondent that they would be responsible for any damages, liabilities arisen out of nonacceptance of payment. 16 33. The petitioner was served with the order dated 28th April, 2005 canceling allotment of plot made in favour of the petitioner. 34. Being aggrieved by the aforesaid order of cancellation, the petitioner approached this Court on 11th May, 2006 by way of present petition filed under Article 226 of the Constitution of India. This Court by an order dated 17th May, 2006 stayed the impugned action and, thereafter, on 22nd March, 2007 admitted petition for final hearing. Rival Submissions Common to All : 35. Heard learned counsel appearing for the respective parties. Rival submissions advanced by them are sketched hereinbelow: 36. The gravamen of the submissions of the learned senior counsel for the petitioners is that the allotment made in favour of the petitioners was cancelled by CIDCO by issuing show cause notices wherein CIDCO had referred to Shankaran report in relation to the petitioners alleging that in the allotment in favour of the petitioners, CIDCO had suffered losses and in the same show cause notices, according to the petitioners, the only ground seeking to cancel the allotment was non- issuance of tender before making allotment in favour of the petitioner and the same being void under section 23 of the Contract Act was opposed to the public policy. 17 37. It was urged that in the case of Popcorn Entertainment and Platinum Entertainment when the Writ Petition was initially filed in this Court the same was dismissed by this Court relegating the petitioner to seek alternative remedy by filing a civil suit, which was challenged by the petitioners before the Hon'ble Supreme Court and the Hon'ble Supreme Court by a detailed judgment reported in 2007 (9) SCC 593 allowed the Civil Appeal filed by the Petitioner. According to the petitioners, the Hon'ble Supreme Court noted extensively the arguments canvassed before the Court and while remanding the matter specifically held that the arguments advanced should be taken into consideration by the High Court before deciding the instant writ petition. The Hon'ble Supreme Court in para 48, however was pleased to set aside the order of CIDCO seeking to resile from a concluded contract in favour of the appellants. The Hon'ble Supreme Court in para 49 was further pleased to record as under : 49. It is also pertinent to mention that CIDCO in the show-cause notice has taken the ground of non-issuance of tender as the only basis for cancelling the allotment and CIDCO in the final order has also confined itself to the non-issuance of tender as the ground for cancellation but in the reply to the writ petition, CIDCO is seeking to add further grounds to justify the order of cancellation, which is clearly