Sunil Pannalal Banthia & Ors vs City And Industrial Development Corpn. ...

This appeal is directed against the order passed by the Division Bench of the Bombay High Court dismissing the writ petition filed by the appellants herein challenging the action of the respondent, City and Industrial Development Corporation of Maharashtra Ltd. (for short 'CIDCO') in cancelling the allotment made in favour of the appellants. The Division Bench indicated in its impugned order that in identical matters other writ petitions filed at different points of time had been dismissed on the ground of alternative remedy available. The facts as can be garnered from the materials on record, indicate that the CIDCO had issued a letter of allotment of a commercial plot measuring 1453.75 sq. mts. on lease in plot No.1 in Sector 9, Panvel (West), Navi Mumbai, for a period of 60 years for a premium of Rs.2,12,24,750/- in favour of Mrs. Meera Balkrishna Dhumale and Mrs. Neeta Hemant Patankar jointly. The original allottees applied for transfer of the said plot to the appellants herein. Upon accepting the transfer charges of Rs.2 lacs, CIDCO issued a corrigendum to the original allotment letter dated 5th February, 2004 and executed a Deed of Lease in favour of the appellants on receipt of the full lease premium of Rs. 2,12,24,750/-. CIDCO also executed a Deed of Confirmation in favour of the appellants and issued the Development Permission and Commencement Certificate in terms of Section 45 of the Maharashtra Regional Town Planning Act, 1966 ( for short 'the MRTP Act').

On the basis of the above, the appellants commenced the construction work and proceeded up to the 1st floor and also completed the construction of the underground water tank. However, on 19th July, 2005, CIDCO issued a Show Cause Notice to the appellants to show cause why the agreement to lease should not be terminated as being void under Section 23 of the Contract Act. The appellants duly replied to the show cause notice through their learned advocate, but despite the above, on 29th March, 2006, CIDCO passed an order terminating the Agreement of Lease and demanded return of possession of the allotted plot with a threat of forcible resumption unless the demand was complied with.

The appellants filed a writ petition against CIDCO challenging the show cause notice dated 19th July, 2005, and the order dated 29th March, 2006, terminating the Agreement of Lease and demanding possession of the allotted plot on 13th April, 2006. The matter was hotly contested before the Bombay High Court and all the aforesaid facts were brought to its notice. On behalf of the respondents, it was sought to be highlighted that the allotment had been made by it in contravention of the provisions of Section 23 of the Contract Act by not calling for tenders and such action on its part was void as being opposed to public policy.

On behalf of the appellants, it was sought to be urged by Mr. J.P. Cama, learned senior advocate, that two similar matters, being Civil Appeal No. 408/07 (Amey Co-operative Housing Societies Limited vs. Public Concern for Governance Trust & Ors) and Civil Appeal No.410/07 filed by M/s. Vijay Associates (Wadhwa) Developers, had been considered in detail by this Court and the said appeals had been disposed of on 1st February, 2007 by a judgment in which most of the points raised in the instant appeal had also been raised and decided. Mr. Cama submitted that on the issues as already decided, nothing further was needed to be added, but there was a basic difference between the reliefs sought for in the said appeals and the instant appeal. Mr. Cama pointed out that the said two appeals had arisen out of two writ petitions filed by way of Public Interest Litigation and one of the grievances of the writ petitioners was that the properties which had been allotted had been undervalued, thereby causing huge loss to CIDCO. Besides asking for cancellation of the allotments, the writ petitioners had made an alternate prayer for the appointment of an independent valuer to revalue the plots allotted and in the event the valuation was found to be higher, for a direction upon the allottees to pay the balance to CIDCO on account of the fact that the construction work had reached an irreversible stage.

Although, we were at one stage inclined to remit the matter to the High Court since the writ petition had not been considered on merits and had been dismissed on the existence of an alternate remedy by way of suit, after considering the submissions made on behalf of the respective parties, we have decided otherwise. We are inclined to accept Mr. Cama's submission that the facts of this appeal are different from those which have been earlier remitted to the High Court for re-consideration on merits and also for making a re-valuation. In the present appeal, we are only concerned with the question of law as to whether CIDCO had acted in excess of its jurisdiction and authority in cancelling the allotment made to the appellants on a unilaterally consideration that the allotment had been made in contravention of its rules and regulations and was thereby opposed to public policy and was illegal and void in terms of Section 23 of the Contract Act, 1872. No decision is required to be taken in the matter on facts, which could have merited an order of remand.

For the reasons aforesaid, we allow the appeal, set aside the order of the High Court impugned in this appeal and quash the order dated 29th March, 2006 passed by CIDCO as also the Show Cause Notice dated 19th July, 2005 on the basis of which the aforesaid order of cancellation of allotment was made.

There will, however, be no order as to costs.