Case: M.D., H.S.I.D.C. & Others Vs. M/s. Hari Om Enterprises & Another

S.B. Sinha, J. 1. Leave granted. 2. Validity of orders of recession of allotment of industrial plots and resumption thereof by the appellants herein is in question in this batch of appeals. With a view to appreciate the questions involved herein, the factual matrix of the matter, however, would be noticed from Civil Appeal arising out of SLP (C) No. 14074 of 2006. Appellant - Corporation is a public sector undertaking. Its principal function is allotment of industrial plots belonging to the State of Haryana. It was set up as a catalyst for promoting economic growth and accelerating the pace of industrialization. It not only provides financial assistance to the industrial concerns by way of term loans; it also develops infrastructure for setting up of industrial units. The Corporation also invests money in developing the industrial estates at strategic locations. In exercise of its functions, it also allots industrial plots to entrepreneurs for setting up their industries on "no profit no loss" basis. The entrepreneurs, according to the Corporation, must be the deserving ones. For the said purpose, it keeps in mind the principle that allotment of land should not be made to speculators who invest in property for getting high returns on escalation of price. 3. Respondent No. 1 is a partnership firm. It was previously known as M/s. Dysa International (Firm). It applied for allotment of 1000 sq. m. size plot in IMT, Manesar. The Allotment Committee of the Corporation having found the respondent to be eligible for allotment, allotted plot No. 177 in Sector 6, IMT, Manesar measuring 1012.50 sq. m. wherefor a letter of allotment was issued on 10.01.2001. We may notice the relevant clauses thereof. Note appended to Clause 3 of the said letter of allotment states that in the event of failure to comply with the terms and conditions by the Regular Letter of Appointment (RLA) holder, the allotment of an Industrial plot/ shed, within the stipulated period, the RLA shall automatically lapse and 10% application money deposited towards the cost of the plot/shed shall be refunded without any interest. However, if the allottee makes a request for the surrender of the plot/shed after complying with the terms and conditions, then the Principal amount will be refunded without any interest after making a deduction of 10% of the cost of the plot/shed. 4. Clause 4 provides for other Terms and Conditions governing schedule of payment of the balance 75% of the price of plot/shed. Clause 6 provides for the consequences of non-payment of the balance amount or non-fulfillment of the terms and conditions of the Letter of Allotment/Agreement. In such an event, the RLA shall stand withdrawn with the resumption of the plot/shed and refund of the deposit without any interest with 10% deduction. Clause 8 provides for the Schedule of Construction and "Going into Production". It mandates the allottee to commence construction of building as per the approved building plans within a period of one year from the date of the offer of possession. The allottee will be required to start commercial production within a period of three years from the date of offer of possession. Extension for commencement of construction can be granted for 6 months maximum if circumstances were beyond the control of the allottee. Similarly, extension of one year can be granted for commencement of commercial production for reasons beyond its control and only if 10% of the permissible area has been constructed and effective steps taken for completion of project subject to payment of the extension fee. 5. An allottee will be deemed to have completed the project if he constructs minimum 25% of the permissible covered area and starts commercial production within the period specified therein. Clause 14 provides for consequences of non-adherence to the schedule of payment and schedule of implementation. In such an event and on an unsatisfactory reply to the show cause notice, the HSIDC is empowered to the plot/shed and the principal amount is to be refunded without payment of interest and after deduction of the 10% of the plot/shed. 6. Clause 26 provides for the resumption of plots by HSIDC in the event of non-compliance of the terms and conditions after giving show-cause notice therefor. The principal amount will be refunded without payment of interest and after deduction of the 10% of the plot/shed without interest. The allottee will be free to remove the structure/debris within a period of 2 months of resumption order at his own cost. The allottee will not be entitled to any payment/compensation for building constructed by it on the resumed plot. Clause 27 provides that no restoration of resumed plots shall be allowed. 7. The agreement also provides for an appeal against the order of the competent authority of the Corporation before the Commissioner, Industries, Government of Haryana. An offer of physical possession was made to the firm by the Corporation by a letter dated 20.12.2001 wherein the schedule of payment in five instalments beginning from 1.07.2002 to 1.07.2004 was specified. It was furthermore stipulated: "...You are, therefore, requested to deposit the installments along with interest @ 18% per annum from the date of offer of possession on the due dates otherwise you would be liable to pay penalty equivalent to 10% of the amount due and if you fail to pay the penalty within the prescribed period which would be specified by the Estate Manager, the plot would be liable for resumption after affording you opportunity of personal hearing before MD/HSIDC." It, however, appears that handing over of actual possession took some time and possession was handed over only on 8.12.2003. At the time of handing over of possession, the area of the land, measurement thereof as also the boundaries were delineated. 8. Indisputably, Respondent No. 1 herein filed an application for construction of the building on 19.12.2003. Indisputably, again the permission for construction of the buildings was to be granted only by the Corporation. The Corporation itself granted permission only on 20.03.2004 where after the construction started. It was completed in May, 2005. 9. The Corporation, however, by a letter dated 13.07.2004 asked the firm as to what steps had been taken by it for constructions of the plot in question with documentary proof as also need to apply for extension on the premise that offer of possession was issued on 1.01.2002 and the construction activity, thus, was required to be started within one year therefrom and production of the Unit should have been started from the date of offer of possession. Respondent No. 1 intimated about the change of the constitution of its firm. It by a letter dated 30.11.2004 categorically stated: "We could not start the construction on the above mentioned plot, due to some financial constraints. We are pleased to inform you that we have been able to arrange sufficient funds for the construction and have already started the construction of your factory at the above mentioned plot. The factory will be operational within three months. Since we have the building plans approved by your department and have obtained temporary connections for water and electricity, the construction is going on in full swing. Regarding the balance amount, enclosed please find Demand Draft No. 000433 for Rs. 908461/- drawn on HDFC Bank. This clears our account as mentioned in your letter. Copy of the approval of the building plan is attached herewith for your reference." 10. Despite the same, as no action was taken, a legal notice was issued by the Respondent No. 1 through its lawyer dated 1.03.2005 inter alia drawing its attention to : (i) Actual physical possession had been handed over on 9.12.2003 and the building plans were approved by the Corporation on or about 20.03.2004.(ii) Steps for construction had been intimated to the Corporation together with a letter for extension of time.(iii) Pursuant to the show cause notice dated 2.11.2004, a sum of Rs. 9,08,461/- had been remitted.(iv) 25% of the construction had been completed and despite the same the land was said to have been resumed without issuing any show cause notice although the respondent had already deposited the said sum. 11. The Corporation was asked to withdraw the said notice of resumption. By an order dated 3.03.2005, however, the plot was said to have been resumed inter alia on the premise that Respondent no. 1 had violated Clause 4 of the said Agreement. A demand draft of Rs. 9,08,461/- was not accepted and a cheque for a sum of Rs. 6,83,349/- towards the refundable amount as also the demand draft for the said sum of Rs. 9,08,461/- were returned. 12. Admittedly, an appeal preferred there against has been dismissed. Respondent No. 1 aggrieved by and dissatisfied therewith filed a writ petition before the Punjab and Haryana High Court. A Division Bench of the High Court by reason of the impugned judgment while setting aside the order of resumption as also the order of the appellate authority dated 27.05.2005, directed: "...The plot in question stands restored back to the petitioner. The amount refunded by the Corporation to the petitioner shall be repaid to the Corporation within a period of two weeks from the date a certified copy of this order is received.The respondent - Corporation would be at liberty to inform the petitioner through a written communication, if there are still any outstanding dues against the petitioner - firm. On receipt of the aforesaid communication, the petitioner - firm shall be required to clear all the aforesaid outstanding dues also, within a further period of two weeks thereof. It is made clear that if the payments as notice above are not made by the petitioner - firm, the present petition shall be deemed to have been dismissed." 13. Mr. A. Saran, the learned Additional Solicitor General appearing on behalf of the appellants, would submit: (i) Respondent No. 1 admittedly having violated the terms and conditions of contract, the High Court acted illegally and without jurisdiction in issuing the impugned directions.(ii) The High Court could not have entertained a writ petition in a matter arising out of a contract qua contract. It in any event it could not have condoned the delay in making payments.(iii) The High Court could not have re-written the contract.(iv) Respondents were not only aware of the terms of contract, they acted thereupon and as such they are estopped and precluded from contending that the date of actual handing over of physical possession would be the relevant date.(v) In any event, as before the High Court the appellants in their counter-affidavit categorically denied and disputed the assertions made in that behalf by the respondents herein, such disputed question of fact could not have been gone into by the High Court in exercise of its writ jurisdiction.(vi) Taking any view of the matter, the High Court should have considered as to who was to be blamed; the allottees or the Corporation and only upon arriving at a finding of fact that the respondents were not handed over actual physical possession despite all attempts made by them to obtain the same, the date of handing over of actual possession could have been held to be a relevant one. 14. Mr. Puneet Bali, learned counsel appearing on behalf of the respondent no. 1, on the other hand, would submit: (i) Appellant in its list of dates has suppressed the fact that actual physical possession had been handed over only on 8.12.2003 and despite the fact that within a period of seven days, the Firm applied for sanction of the building plan, the same had been issued only on 20.03.2004, thus, the building having been completed within a period of 14 months and commercial production having been started, the terms of the contract had not been violated.(ii) In any event of the matter, the show cause in respect of resumption of land could be issued only upon demand of penalty and not prior thereto.(iii) The action for resumption of land and/ or forfeiture being draconian in nature could have been taken recourse to by the Corporation only as a last resort. 15. Allotment of industrial plot keeping in view the object and purport for which the Corporation had been constituted and incorporated must be held to be a governmental function. In a case of this nature where the aim and object of the Corporation as also the State is to encourage industrialization while adjusting equity, the purpose for which the Scheme was made would be a relevant factor. Only because allotment of land has been effected through a letter, the same by itself does not make such allotment and/ or the provisions contained therein to be matters within `private law domain as contra-distinguished from `public law domain. The State exercises deep and pervasive control over the activities of the Corporation. 16. The parties themselves agreed that despite the fact that the Corporation is a juristic person, an appeal against its decision shall lie to the Financial Commission of the State. Indisputably, the function of the appellant is a sovereign function. It, in any event is a State, within the meaning of Article 12 of the Constitution of India. Its action, therefore, must be fair and reasonable so as to sub serve the requirements of Article 14 of the Constitution. 17. In the aforementioned backdrop, the issue involved in the matter must be determined. The letter of allotment dated 10.01.2001 indisputably sets out the terms and conditions thereof. But, the same is not exhaustive. The terms and conditions were supplemented by the Corporation itself in its letter dated 20.12.2001 when offer of handing over physical possession was made, by reason whereof not only a period of two years was provided for deposit of installment along with interest at the rate of 18% per annum but also a provision had been made that in the event of failure to adhere to the schedule enumerated therein, penalty equivalent to 10% of the amount due would be levied. It was furthermore laid down that in the event of failure of the `firm to pay the amount penalty within the prescribed period, the plot would be liable for resumption. The terms and conditions of letter of allotment would clearly show that resumption of the plot is not automatic. 18. The question as to whether the allottee had failed to comply with the terms and conditions was required to be determined. The terms of the contract would have to be construed having regard to the respective rights and obligations of the parties to perform their part of contract. It provides for issuance of a show cause notice. It provides for refund of the principal amount, of course, without any interest. Resumption of plot, it is trite, would not be automatic. Clause 26 provides for an enabling clause. The decision of the Corporation is not final. An appeal lay there against. The jurisdiction of a `State to resort to the drastic power of resumption and forfeiture ordinarily should be undertaken as a last resort. Keeping in view the fact that the Corporation was obligated to comply with the principles of natural justice and, particularly, in view of the fact that was required to determine the capacity as also bona fide of an entrepreneur to start an industrial undertaking on the plots, the Corporation was required to assign some reasons as to why the plot in question had to be resumed. While doing so, it evidently was required to take into consideration its own conduct. A party cannot take advantage of its own wrong. While a State takes penal action against the allottee, its bona fide would be one of the relevant factors before an order of resumption and forfeiture of the amount deposited is passed. The particulars contemplated in the letter of allotment as also the letter of offer of possession and the procedures laid down therefor were required to be scrupulously complied with. The letter of allotment as also the letter of offer of possession must be read conjointly. The very fact that not only the amount specified therein was required to be paid in instalments but also with interest at the rate of 18% per annum, was required to be borne in mind. Thus, in a case where the allottee had complied with the terms of allotment in the matter of payment of instalments, the same would be a relevant factor for exercising the enabling clause of resumption by a `State. Not only that, a further opportunity was required to be given to the allottee even if there was some default on its part inasmuch as the appellant itself provides for levy of penalty. The power of resumption, thus, must be resorted to only in a case where despite grant of the opportunities contemplated in terms of the letter of intent were violated. 19. Despite issuance of letter of offer of physical possession dated 20.12.2001, the fact that actual possession had not been handed over for a period of two years is not in dispute. The Corporation did not say that actual possession was not taken by the respondent despite offer having been made in that behalf. It, in its anxiety to set a time limit for ensuring that the commercial production starts at an early date, was expected at least to send a reminder. It failed and/ or neglected to do so. For the purpose of approval of the building plan, the time taken by it also would have been a relevant factor for passing an order of resumption. 20. We although do not intend to lay down a law that all the aforementioned period should be excluded from computation for the purpose of grant of notice of resumption, but there cannot be any doubt whatsoever that while judging the conduct of the parties, the appellant was obligated to judge its own conduct in the matter. 21. A law far less a contract does not warrant compliance of the contractual or statutory obligations where it is otherwise impossible to do. An entrepreneur may start raising constructions over a plot only when the physical possession thereof is handed over and/ or plan for construction of the building is approved. A State cannot ignore the aforementioned relevant factors. 22. It may be true that ordinarily in a matter of enforcement of a contract qua contract, a writ court shall not exercise its jurisdiction under Article 226 of the Constitution of India. But, it is also trite that where the action of a State is violative of Article 14 of the Constitution of India as being wholly unfair and unreasonable, the writ court would not hesitate to grant relief in favour of a person, where both law and equity demands that such relief should be granted. 23. Appellant being a "State" within the meaning of Article 12 of the Constitution of India, it without a justification cannot make any discrimination when the parties are similarly situated. [See Mahabir Auto Stores and Others Vs. Indian Oil Corporation and Others [(1990) 3 SCC 752, para 12]. Moreover, the act on the part of the respondent must be a reasonable one. [See Bharat Petroleum Corporation Ltd. Vs. Maddula Ratnavalli and Others [(2007) 6 SCC 81, para 16] 24. This Court in ABL International Ltd. and Another v. Export Credit Guarantee Corporation of India Ltd. and Others [(2004) 3 SCC 553] laid down the law in the following terms: "28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction." [See also Sanjana M. Wig v. Hindustan Petroleum Corpn. Ltd. (2005) 8 SCC 242 and Noble Resources Ltd. v. State of Orissa and Another (2006) 10 SCC 236 ]. 25. In Kumari Shrilekha Vidyarthi and Others v. State of U.P. and Others [(1991) 1 SCC 212] , this Court opined that even in contractual matters the State cannot act arbitrarily, stating: "31...This decision clearly shows that no doubt was entertained about the applicability of Article 14 of the Constitution to an action of the State or its instrumentality, even where the action was taken under the terms of a contract of tenancy which alone applied by virtue of the exemption granted under the Rent Act excluding the applicability of the provisions thereof." 26. Referring to M/s Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay [(1989) 3 SCC 293] , this Court held: "24. The field of letting and eviction of tenants is normally governed by the Rent Act. The Port Trust is statutorily exempted from the operation of the Rent Act on the basis of its public/governmental character. The legislative assumption or expectation as noted in the observations of Chagla, C.J. in Rampratap Jaidayal case cannot make such conduct a matter of contract pure and simple. These corporations must act in accordance with certain constitutional conscience and whether they have so acted, must be discernible from the conduct of such corporations. In this connection, reference may be made on the observations of this Court in Som Prakash Rekhi v. Union of India reiterated in M.C. Mehta v. Union of India wherein at p. 148 this Court observed: (SCC p. 480, para 55)"It is dangerous to exonerate corporations from the need to have constitutional conscience ; and so, that interpretation, language permitting, which makes governmental agencies, whatever their mien, amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperio."25. Therefore, Mr Chinai was right in contending that every action/activity of the Bombay Port Trust which constituted "State" within Article 12 of the Constitution, in respect of any right conferred or privilege granted by any statute is subject to Article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest." 27. When time granted is flexible, the constructions of the term may not lead to a conclusion that it is imperative in character. In M/s. Jagdish Chand Radhey Shyam v. The State of Punjab and Others [(1973) 3 SCC 428] , this Court while interpreting Sections 8 and 9 of the Capital of Punjab (Development and Regulation) Act, 1952 in the context of Article 14 and 19(1) (f) of the Constitution of India, held as under: "13. Section 9 speaks of resumption of the site or building by the Estate Officer and forfeiture of the whole or part of the money paid on account of consideration in the case of non-payment of consideration money or instalment or breach of any condition of transfer or breach of any rule.14. Under the ordinary law of the land it is open to the Government to enforce the charge and to recover the due on consideration money, instalments or any other due from the transferee. It is also open to the Government under Section 8 of the Act to proceed against the transferee to realise the amount due on consideration money or on instalment or any other due as an arrear of land revenue. Section 8 provides penalty for default in payment of money and the recovery of the same as an arrear of land revenue. These remedies are deterrent and drastic.15. Section 9 of the 1952 Act empowers the Government to forfeit the whole or any part of the money in case of non-payment of consideration money or instalments or other dues for breach of covenants. Under the ordinary law of the land there is relief against forfeiture for breach of covenant or provisions. Section 9 does not offer any relief against forfeiture. This feature that the Government can proceed either under the ordinary law of the land or under the 1952 Act shows that there is discrimination. There is nothing in the statute to guide the exercise of power by the Government as to when and how one of the methods will be chosen.16. Section 9 confers power to resume the site. There is a charge on the land for the unpaid consideration money. This charge can be enforced by instituting a suit in a court of law. The owner will have the opportunity of paying the money and clearing the property of the charge. On the other hand when the Government proceeds under Section 9 of the Act, to resume the land or building the Government proceeds under the Punjab Public Premises and Land (Eviction and Rent Recovery) Act, 1959. There is no guidance in the Act, as to when the Government will resort to either of the remedies." 28. Although the provisions of the aforementioned Act are not applicable in the instant case, Jagdish Chand (supra) is being referred for showing that when two remedies to enforce a contract are available, the power should be exercised in reasonable manner. So construed, a harsher remedy may not ordinarily be resorted to. The learned Additional Solicitor General places strong reliance upon a decision of this Court in Indu Kakkar v. Haryana State Industrial Development Corporation Ltd. and Another [(1999) 2 SCC 37] . Therein the lady had assigned her interest. One of the questions which arose for consideration was as to whether such transfer was valid having regard to the locus standi of the appellant therein. What was emphasized was that as a rule the party cannot transfer its liabilities under the contract without consent of the other party. It was in the aforementioned context, this Court considered the question of locus standi of the appellant therein holding: "19. In fact, the question is not whether there is any legal bar for the allottee to make assignment of the plot. The real question is whether the assignee has a legal right to claim performance of any part from the allottor. The answer of the said question depends upon the terms of allotment. Assignment by an act of the parties may cause assignment of rights or of liabilities under a contract. As a rule, a party to a contract cannot transfer his liabilities under the contract without consent of the other party..." 29. The said decision, in our opinion, cannot be said to have any application. Reliance has also been placed on Orissa State Financial Corporation v. Narsingh Ch. Nayak and Others [(2003) 10 SCC 261] for the proposition that a writ court would not direct writing off the amount due or waiver of the interest, stating: "...The order, to say the least, was beyond the scope of the writ petition which was being considered by the High Court and beyond the jurisdiction of the Court in a contractual matter. No doubt, while exercising its extraordinary jurisdiction under Article 226 of the Constitution the High Court has wide power to pass appropriate order and issue proper direction as necessary in the facts and circumstances of the case and in the interest of justice. But that is not to say that the High Court can ignore the scope of the writ petition and nature of the dispute and enter the field pertaining to contractual obligations between the parties and issue such directions annulling the existing contract and introducing a fresh contract in its place." 30. The High Court, in our opinion, has not re-written the contract nor waived the rights and obligations of the parties. 31. We may notice that in Teri Oat Estates (P) Ltd. v. U.T., Chandigarh and Others [(2004) 2 SCC 130] , a Bench of this court while interpreting the provisions of Section 8-A of the Capital of Punjab (Development and Regulation) Act, 1952 opined that power of resumption and forfeiture should be taken recourse to as a last resort. While holding that each case may have to be viewed on its own facts, the action of the statutory authority must be judged on the touchstone of Article 14 of the Constitution of India. This Court applied the doctrine of proportionality having regard to a large number of decisions operating in the field. This Court, however, also put a note of caution that no order should be passed only on sympathy or sentiment. Doctrine of proportionality has since been applied in Sandeep Subhash Parate v. State of Maharashtra & Ors. [(2006) 8 SCALE 503] and Jitendra Kumar & Ors. v. State of Haryana & Anr. [2007 (14) SCALE 125 : (2008) 2 SCC 161 ]. 32. In State of Bihar and Others v. Kameshwar Prasad Singh and Another [(2000) 9 SCC 94] whereupon strong reliance has been placed by Mr. Jaspal Singh to contend that in a given case, this court may not exercise its discretionary jurisdiction under Article 136 of the Constitution of India even if the order is found to be illegal. This court was concerned with a service matter. It was held: "36. It is further contended that as the respondent was, in the meantime, appointed/promoted in the IPS cadre and as per requirements of the State Government he has already submitted his resignation from the State service, the acceptance of the appeal and setting aside the directions of the High Court would result in great hardship to him and amount to unsettling his settled service rights particularly when his promotion/appointment to the IPS cadre has not been challenged and is not in dispute. Such a plea by itself cannot be accepted as a ground to dismiss the appeal filed against an order which we have held to be illegal being contrary to law and the Service Rules applicable in the case. Once the judgment is set aside, the consequences have to follow and a person taking advantage or benefit of the wrong orders is to suffer for his own faults which cannot be attributed to anybody else. However, in appropriate cases this Court can mould the relief to safeguard the interests of a person wherever required. For doing complete justice between the parties, appropriate directions can be given to protect the interests of a person who is found to have been conferred the benefits on the basis of judicial pronouncements made in his favour. As the appellant State has been found to be careless and negligent in defending its cases, we feel and are inclined to protect the interests of Brij Bihari Prasad Singh, respondent. We are convinced that the interests of justice would be served by holding that despite setting aside the judgments of the High Court, his interests be protected by not disturbing his promotions made from time to time. However, judgments passed in his favour cannot be permitted to be made a basis for conferment of similar rights upon other persons who are shown to have filed writ petitions or representations which, if accepted, are likely to adversely affect the interests of more than 150 Inspectors and 400 officers in the rank of Deputy SP. Similarly, if any benefit has been conferred upon any other person who has superannuated, no useful purpose would be served by directing his demotion retrospectively and recovery of the excess emoluments paid to him." 33. Indisputably, the court can balance the equities between the parties but the same does not necessarily mean that in all cases this Court should refuse to exercise its discretionary jurisdiction. Each case must be considered on its own merit and no hard and fast rule can be laid down therefor. 34. We would consider the question about the balancing equities between the parties in each individual case. In a case of this nature, this Court in exercise of its jurisdiction under Article 142 of the Constitution of India may also consider rendition of individualized justice. [See Shyam Nandan Prasad and Others v. State of Bihar and others (1993) 4 SCC 255 ]. Our attention has been drawn to the fact that the Punjab High Court in some of the matters in Jaisy Designs v. MD. HSIDC [decided on 4th July, 2006] had issued similar directions. A Bench of this Court, however, dismissed the special leave petition being SLP (C) No. 12074 of 2006 by an order dated 7.08.2006. 35. However, another Bench of this Court in Civil Appeal arising out of SLP (C) No. 20235 of 2007, presumably, without noticing the said order directed issuance of notice by an order dated 4.12.2006. Following the said decision, even other Benches had issued notice in other matters including Civil Appeal arising out of SLP (C) No. 14074 of 2006. 36. Reliance has been placed on State of Kerala and Others v. P.T. Thomas [(2005) 12 SCC 347] where this Court having regard to the orders passed in number of cases in regard to payment of interest dismissed the appeals inter alia taking into consideration the said factor. However, in P.T. Thomas (supra) it was not the sole consideration. This Court noticed that payment of interest was not an issue in the main writ petition and that was the principal reason in dismissing the appeal. We have noticed hereinbefore that in Kameshwar Prasad Singh (supra), this court made a clear distinction between an order which is illegal and, thus, the order being illegal the benefit thereof would not be extended to persons similarly situated on the premise that Article 14 is a positive concept. 37. In the instant case, the High Courts jurisdiction is in question. The learned counsel for the parties have addressed us at great length on the individual merit of the matter. We, therefore, are of the opinion that on the said ground alone, we would not refuse to interfere. 38. In Civil Appeals arising out of SLP (C) No. 17426 of 2006, no opportunity had been given to the appellants to file counter affidavit. Even the High Court had proceeded on the basis that equity demands that they should be given some extension of time to perform their part of contract. It was submitted that even the doctrine of proportionality is applicable in these cases in view of the decision of this Court in Teri Oat Estates (P) Ltd. (supra). 39.

Decision reasoning: 1[ds]Allotment of industrial plot keeping in view the object and purport for which the Corporation had been constituted and incorporated must be held to be a governmental function. In a case of this nature where the aim and object of the Corporation as also the State is to encourage industrialization while adjusting equity, the purpose for which the Scheme was made would be a relevant factor. Only because allotment of land has been effected through a letter, the same by itself does not make such allotment and/ or the provisions contained therein to be matters within `private law domain asfrom `public law domain. The State exercises deep and pervasive control over the activities of theparties themselves agreed that despite the fact that the Corporation is a juristic person, an appeal against its decision shall lie to the Financial Commission of the State. Indisputably, the function of the appellant is a sovereign function. It, in any event is a State, within the meaning of Article 12 of the Constitution of India. Its action, therefore, must be fair and reasonable so as to sub serve the requirements of Article 14 of theletter of allotment dated 10.01.2001 indisputably sets out the terms and conditions thereof. But, the same is not exhaustive. The terms and conditions were supplemented by the Corporation itself in its letter dated 20.12.2001 when offer of handing over physical possession was made, by reason whereof not only a period of two years was provided for deposit of installment along with interest at the rate of 18% per annum but also a provision had been made that in the event of failure to adhere to the schedule enumerated therein, penalty equivalent to 10% of the amount due would be levied. It was furthermore laid down that in the event of failure of the `firm to pay the amount penalty within the prescribed period, the plot would be liable for resumption. The terms and conditions of letter of allotment would clearly show that resumption of the plot is nota State takes penal action against the allottee, its bona fide would be one of the relevant factors before an order of resumption and forfeiture of the amount deposited is passed. The particulars contemplated in the letter of allotment as also the letter of offer of possession and the procedures laid down therefor were required to be scrupulously complied with. The letter of allotment as also the letter of offer of possession must be read conjointly. The very fact that not only the amount specified therein was required to be paid in instalments but also with interest at the rate of 18% per annum, was required to be borne in mind. Thus, in a case where the allottee had complied with the terms of allotment in the matter of payment of instalments, the same would be a relevant factor for exercising the enabling clause of resumption by a `State. Not only that, a further opportunity was required to be given to the allottee even if there was some default on its part inasmuch as the appellant itself provides for levy of penalty. The power of resumption, thus, must be resorted to only in a case where despite grant of the opportunities contemplated in terms of the letter of intent wereissuance of letter of offer of physical possession dated 20.12.2001, the fact that actual possession had not been handed over for a period of two years is not in dispute. The Corporation did not say that actual possession was not taken by the respondent despite offer having been made in that behalf. It, in its anxiety to set a time limit for ensuring that the commercial production starts at an early date, was expected at least to send a reminder. It failed and/ or neglected to do so. For the purpose of approval of the building plan, the time taken by it also would have been a relevant factor for passing an order ofalthough do not intend to lay down a law that all the aforementioned period should be excluded from computation for the purpose of grant of notice of resumption, but there cannot be any doubt whatsoever that while judging the conduct of the parties, the appellant was obligated to judge its own conduct in thethe provisions of the aforementioned Act are not applicable in the instant case, Jagdish Chand (supra) is being referred for showing that when two remedies to enforce a contract are available, the power should be exercised in reasonable manner. So construed, a harsher remedy may not ordinarily be resortedHigh Court, in our opinion, has notthe contract nor waived the rights and obligations of thethe court can balance the equities between the parties but the same does not necessarily mean that in all cases this Court should refuse to exercise its discretionary jurisdiction. Each case must be considered on its own merit and no hard and fast rule can be laid downthe instant case, the High Courts jurisdiction is in question. The learned counsel for the parties have addressed us at great length on the individual merit of thetherefore, are of the opinion that on the said ground alone, we would not refuse toCivil Appeals arising out of SLP (C) No. 17426 of 2006, no opportunity had been given to the appellants to file counter affidavit. Even the High Court had proceeded on the basis that equity demands that they should be given some extension of time to perform their part ofagree with the High Court that Clause 3 of the said offer of the order of allotment dated 18.07.2003, on the one hand, and Clauses 4 and 5, on the other, are irreconcilable. Payment to be made under Clause 3 cannot be subject to the stipulations contained in Clauses 4 and 5. They are independent of each other. The allottee in terms of Clause 3 had an option. Mode of payment in terms of Clause 3, on the one hand, and Clauses 4 and 5, on the other, are distinct and different. However, the High Court was not correct when it directed thatof land would be subject to the final decision of the case. Cancellation of plot as also reallotment thereof had been made in June 2004. The writ petition was filed in July,reason of the judgment of the High Court, the right of a third party has been affected. He without having been impleaded as a party in the writ petition cannot suffer an adverse order for which he is no way responsible. A statement has been made before us by the learned Additional Solicitor General that no residential plot is available for allotment. He, however, submits that as and when such a plot is available, the same would be offered to the respondent. We may place on record the aforementioned submission. However, we feel that the respondents were not to be blamed for not depositing the amount. Invocation of Clause 4 is clearly illegal. We, therefore, are of the opinion that the respondent should be suitably compensated on monetary terms. We direct the appellants to pay a sum of Rs. 1,00,000/to the respondents herein. We, however, also direct that keeping in view the statements made at the Bar, as and when any residential plot becomes available, the same should be allotted to the respondents on the sameis a clear case where the respondents have failed to abide by any of the terms of contract. It did not deposit even the initial amount in time, there was no reason for it not to do so. Even interest payable on the said amount had not been paid. The appeal should, therefore, bethis case, the respondent has clearly been discriminated against. Appellants action is clearly unfair and unreasonable. In any event, it has waived its right. Furthermore, it was a case where the principles of natural justice should have been compliedHigh Court in, this case, in its impugned judgment has taken care to see that the object for grant of allotment were fulfilled being promotion of industrial growth. Applying the principles of law as indicated hereinbefore, we are of the opinion that no case has been made out for our interference with the impugnedhad already appointed an architect for construction of the building. It had already started constructions. The fact that it was the Department which did not grant any license. The Appellate Committee, however, did not consider this aspect of the matter at all and thus the appellate orders suffered from totalhe High Court while allowing the petition quashed the resumption order and directed the respondent to complete the construction of the industrial building within a period of six months from the date of offer of the possession of theall these cases, it is difficult to uphold the order of the High Court. But a general offer was made by the learned Additional Solicitor General that those who intend to obtain reallotment of plot may do so on payment of the price as per the current rate as on the date of the order of the Highus, several allottees had categorically made a statement that they are ready and willing to pay the prevailing price as fixed by the appellantCorporation. Keeping in view the facts and circumstances of this cases, we are of the opinion that in the event, respondents offer the prevailing price as on the date of judgment of the High Court, the plot, in question, shall standand should be subject to the same terms and conditions. Such reallotment may be made even in cases where we have found the order of the High Court to beshall deposit the amount within six weeks from date. Appellant shall hand over the possession of the plot, in question, within four weeks thereafter. The highest executive of Appellant – Corporation shall see to it that the order of this Court is complied with. It is, however, made clear that in the event of failure on the part of the respondents concerned in making payment in terms of this order, it would be open to the appellant to take recourse to such action as is permissible in law.