JAYKRISHNA INDUSTRIES LTD. THROUGH DIRECTOR  versus STATE OF MAHARASHTRA AND OTHERS
[2017] 11 S.C.R. 104, Supreme Court of India, 2017
Outcome: Dismissed (Dismissed)
Segment: Arguments
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(2017] ll S.C.R. 104 
JAYKRISHNA INDUSTRIES LTD. 
THROUGH DIRECTOR 
v. 
STATE OF MAHARASHTRA AND OTHERS 
(Civil Appeal No. 496 of 2007) 
NOVEMBER 13, 2017 
[RANJAN GOGOI AND NAVIN SINHA, JJ.J 
Au<'lion: 
Public auction - Pmvisional acceptance of bid of appellant -
25% of tender amount deposired by appellant - In the meantime 
respondent approached High Court for permission for submission 
of higher bid than the appella111, without making the appellant party 
therein - High Court granted permission - Bid of respondem 
D provisionally accepted - Provisional acceptance of bid of the 
appellant, was cancelled on 07.05.2005 - Writ petitions by appellant 
challenging acceptance of bid of respondent and rejection of his 
hid - High Court dismissed the petitions - On appeal, held: Claim 
of respondent for settlement of a Govemment property by way of 
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private largesse, without open advertisement is unfounded in law -
Belated challenge to cancellation of bid by the appellant was right(v 
rejected in view of the i111ervening developments (i.e. change in 
pennissible usage of the landji·om commercial to residential)-Since 
the ve1y substatum of the aucrion advertisement has changed, a 
fresh tender is mandatory - Direction to refund the deposited money 
to responde111 without any i11terest and to appellant with 8% interest. 
Evidence Act, 1872: 
s. !14(e) - presumption under - In respect of Government 
communication - Held: there shall be a presumption in law that a
Government communication was properly made and reached the 
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Dismissing the appeals, the Court 
HELD: 1. The claim of the Respondent for settlement of a 
government property by way of a private laq~cs~c, withou1 open 
advertisement, is completely unfounded in the law. Apparently, 
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JAYKRISHNA INDUSTRIES LTD. THR. DIRECTOR v. STATE 
105 
OF MAHARASHTRA AND ORS. 
the negotiations were done by MHADA under political influence 
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as evident from the letter of the Respondent dated 29.11.2004 
read with the letter dated 30.04.2005 of one Member of 
Parliament. The Respondent had not submitted any bid in 
. response to the advertisement. The order of the High Court 
dated 23.12.2004 was passed in absence of the Court being B 
apprised of the provisional acceptance of the Appellant's bid. The 
p_lea that the Respondent was never made aware of the order of 
cancellation dated 22.02.2000 merits no consideration as it was 
also revealed in the counter affidavit of the State of Maharashtra 
dated 11.07.2005 in Writ Petition No. 2112 of 2005. The 
cancellation order was addressed to MHADA and copy marked 
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to the Respondent. There shall be a presumption in law that il 
government communication was properly made and reached the 
addressee, under Section ll4 (e) of the. Evidence Act. It is not 
the case of the Respondent that the order never came to be Issued 
and remained in the file. The Respondent despite awareness D 
never challenged the cancellation and which sets at naught its 
entire claim. Any offer made to the Respondent in teeth of, and 
after the cancellation was therefore redundant. [Para 9)[109-B-
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2. The bid of the Appellant was provisionally accepted. No 
final allotment was made in its favour under the advertisement 
dated 17.11.2004. MHADA was
inhibited from proceeding further 
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in view of the Court order dated 23.12.2004 in favour of the 
Respondent. MHADA in its affidavit dated 24.06.2005, in Writ 
Petition No. 2112 of 2005 preferred by the Appella_nt, had 
disclosed the cancellation of the provisional acceptance by order 
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dated 07.05.2005. There shall likewise be a presumption with 
regard to the issuance and delivery of the same to the Appellant 
and it is not its case that no such order was ever made or issued. 
The belated challenge to the cancellation in Writ Petition No. 
867 of 2010 was therefore rightly rejected by the High Court on 
account of the intervening developments with regard to the 
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change in permissible usage of the land from commercial to 
residential. [Para 10][109-F-H; HO-A] 
3. The change in permissible land usage goes to the mot of 
the matter. If the very substratum of the advertisement bas 
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SUPREME COURT REPORTS 
[2017] 11 S.C.R. 
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changed, a ftesh tender is mandatory. The passage of thirteen 
long years since the advertisement is also an important 
consideration. The Notification dated 03.07.2017 issued under 
DCR Regulation 33(5) inter alia altering the FSI is at the final 
stage awaitiD1g publication. The bid price today for that reason 
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will also cs~alate considerably. The State Government and 
MHADA have denied any fresh negotiated settlement with the 
Appellant. The interim order of this Court dated 04.09.2014 was 
not a ct1rte hilmclw for a mandatory settlement with the Appellant. 
The High Court has noticed that the value of the property now 
would be approximately 75 crores. In the land starved city of 
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Mumbai, the settlement of any Government land, for a housing 
project, bus to be by public auction only, so us to fetch the best 
price in the larger public interest. [Para 11)(110-B-D] 
4. The Respondent has only itself to blame for its woes, 
based on a conduct that cannot be countenanced in law. It is 
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therefore not entitled to any interest on the deposit made by it 
which shall l>e refunded by MHADA within four weeks. The 
A11pellant is found to have been wronged, but must bear part of 
the blame for !aches on its part also. It is therefore held entitled 
to interest @ 8% on the deposit made by it including the earnest 
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money, only till 24.06.2005. (Para 121 [110-E] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 496 of 
2007.
From the Judgment and Order dated 17.10.2005 of the High Court 
ofJudicatw·e at Bombay (Original Side) in Writ Petition No. 2112 of 
2005 with Writ Petition No. 3466 of2004 
WITH 
C.A.Nos.498, 18489and 18492of2017. 
Shekhar Naphade, Sanjay Hegdc, M. L. Varma, Sr. Advs., 
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Kamatdeep Dayal, Mahesh Agarwal, Ms. Parul Shukla, Moojaal Bhatt, 
Himanshu Satija. E. C. Agrawala, Viraj Kadam. Rohit Shctty, 
D. M. Nargolkar. Ms. Bina Gupta, Chirag M. Shroff, Ms. Neha Sangwan, 
V. N. Raghupathy, Mahaling Pandargc, Nishant Katncshwarkar, Advs. 
for the appearing parties. 
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JAYKRISHNA INDUSTRIES LTD .. THR. DIRECTOR v. STATE 
OF MAHARASHTRA AND ORS. 
The Judgment of the Court was delivered by 
NAVIN SINHA, J. l. Leave granted in both Special Leave 
Petitions. 
2. The present batch of appeals, between the same parties, arise 
from a controversy relating to auction settlement by the Mumbai Housing 
and Arca Development Board (hereinafter referred to as "the MHADA"), 
of a plot ofland measuring 10,000 sq. mtrs, located at Powai, in the town 
of Mumbai. The auction notice published on I 7.11.2004, remains 
inconclusive, mired in litigation. The subsequent developments being 
relevant arc also required to be noticed. The contesting parties, Mi 
s.Popcorn Properties Private Limited and Mis. Jaykrishna Industries 
Ltd., shall hereinafter be referred to as the Appellant and Respondent 
for convenience. 
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3. Sri Shckhar Naphadc, learned Senior Counsel for the Appellant 
submitted that it being the highest bidder at Rs.22,22,22,300/-, provisional 
acceptance of the bid was communicated to it on 17.12.2004. As required, 
25% of the tender amount was deposited on 03.01.2005, awaiting D 
communication for deposit of the balance 75% amount. On 03.05.2005, 
the Appellant objected to MHADAillegally negotiating settlement of the 
subject lands with the Respondent. Writ Petition No. 2112 of2005 was 
instituted assailing the action of the official Respondents in provisionally 
accepting the bid of the Respondent for Rs.22,23,22,300/-. The order 
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dated 17.12.2004 was subsequently wrongly cancelled on 07.05.2005, 
and which was also assailed by the Appellant in Writ Petition No. 867 of 
2010. 
4. The Respondent had earlier preferred Writ Petition No. 3466 
of2004 and obtained an orderon 23.12.2004 for submission of a higher 
bid. The Appellant was not a party to the same. The High Court was not 
apprised that the Appellant's bid already stood provisionally accepted. 
Upon being apprised of the correct facts, the order dated 23.12.2004 
was recalled which automatically results in revival of the order of 
acceptance of the appellant's provisional bid. The High Court wrongly 
declined to interfere with the order dated 07.05.2005 ordering a fresh 
tender process for settlement. 
5. Shri Naphade, in the aforesaid facts further submitted that the 
Appellant also had a right in equity for settlement in its favour, especially · 
in view of the interim orderofthis Court dated 04.09.2014 permitting it 
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to make a fresh proposal to the MHADA, arid wlfich has been found 
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acceptable by it. MHADAhad acted inequitably, on political influences, 
to cancel its bid at the behest of the Respondent, who was not even a 
bidder in rcspol[lse to the tender notice. The Appellant has had to suffer 
forno fault ofit, despite being the highest bidder. An alternative submission 
was made that if fresh tenders were to be invited, the right of the first 
refusal must be' given to it for matching the highest offer that may be 
made. The second alternative submissmn was that 25 percent of the plot 
be settled with it. The present case, on its peculiar facts, was a fit case 
where the norrnal rule of settlement by tender could be deviated from 
and settlement could be made by private negotiation. 
6. Mr. Sanjay Hegde, learned Senior Counsel for the Respondent 
submitted that even prior to the advertisement dated 17.11.2004. the 
Respondent had a pre-existing right to settlement as it was already in 
negotiation with MHADA, culminating in orders dated 05.07.1999 and 
05.10.1999 in its favour. This was recognised in Writ Petition No. 3466 
of2004 permitting it to offer a higher bid. On 15.02.2005, the Respondent 
offered to increase its bid by Rs. I 0,00.000/- above that of the Appellant 
and payment was made on 02.05.2005. The challenge by the Appellant 
to the cancellation dated 07 .05.2005 was highly belated. The Appellant 
had no locus in the matter after the cancellation order. The
cancellation 
order having been declined interference, the question of any private 
negotiation docs not arise. A like claim in equity was also raised for an 
oppo1tunity to pay the market price and match the price that may be 
offered by the Appellant. 
7. Learned Counsel for the State of Maharashtra submitted that 
the order dated 05.07.1999 on which the Respondent's claim is founded 
has itself been annulled on 22.02.2000, and which has not been assailed. 
Sri M.L. Verma, learned Senior Counsel appearing on behalf ofMHADA, 
·submitted that the advc1tiscment dated 17 .11.2004 was for construction 
of a hotel according to the theri permissible commercial usage of the 
plot. The subsequent change in permissible usage to residential purpose 
for construction of a housing complex renders the entire controversy 
infructuous. A new advertisement for auction at the best price available 
will have to be made. Considerable time has also passed since the 
advertisement. The OCR Regulation 33(5) under the Development 
Control Regulations for Greater Bombay, 1991 (hereinafter referred to 
as "the Regulations") with regard to increase in FSl has not yet been 
finalized and published. It was specifically denied that any decision had 
been taken to make settlement in favour :if the Appellant.
JAYKJUSHNA INDUSTRIES LTD. THR. DIRECTOR v. STATE 
109 
OF MAHARASHTRA AND ORS. [NAVIN SINHA. J.] 
8. We have considered the submissions.on behalf of the parties, 
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perused the records, including the impugned orders and the 
communications exchanged between the parties. 
9. The claim of the Respondent for settlement of a government 
property bi way of a private largesse, without open advertisement, is 
completely unfounded in the law. Its letter dated 30.06.1999 requesting 
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for a sympathetic consideration for settlement with it, as otherwise the 
property was likely to be occupied by encroachers, is but a travesty of 
the law. Apparently, the negotiations were done by MHADA under 
political influence as evident from the letter of the Respondent dated 
29.11.2004 read with the letter dated 30.04.2005 of one Mr. Mohan 
Rawle, Member of Parliament. The Respondent had not submitted any c 
bid in response to the.ad.vertisement. The order of the High Court dated 
23.12.2004 was passed in absence of the Court being apprised of the 
provisional acceptance of the Appellant's bid. The plea that the 
Respondent was never made aware of the order of cancellation dated 
22.02.2000 merits no consideration as it was also revealed in the counter 
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affidavit of the State of Maharashtra dated l 1.07.2005 in Writ Petition 
No. 2112 of 2005. The cancellation order was addressed to MHADA 
and copy marked to the Respondent. There shall be a presumption in 
law that a government
communication was properly made and reached 
the addressee, under Section 114 (c) of the Indian Evidence Act. It is 
no( the case of the Respondent that the order never came to be issued 
and remained in the file. The Respondent despite awareness never 
challenged the cancellation and which sets at naught its entire claim. 
Any offer made to the Respondent in teeth of, and after the cancellation 
was therefore redundant. 
IO. The bid of the Appellant was provisionally accepted. No final 
allotment was made in its favour under the advertisement dated 
17. I I .2004. MHADA was inhibited from proceeding further in view of 
the Court order dated 23.12.2004 in favour of the Respondent. MHADA 
in its affidavit dated 24.06.2005, in Writ Petition No. 2112 of 2005 
preferred by the Appellant, had disclosed the cancellation of the 
provisional acceptance by order dated 07.05.2005. There shall likewise 
be a presumption with regard to the issuance and delivery of the same lo 
the Appellant and it is not its case that no such order was ever made or 
issued. The belated challenge to the cancellation in Writ Petition No. 
867 of2010 was therefore rightly rejected by the High Com1 on account 
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of the intervening developments with regard to the change in permissible 
usage of the land from commercial to residential. 
11. The change in permissible land usage by Resolution No.6684 
dated 20.10.2014 is a fundamental issue which goes to the root of the 
matter. If the very substratum of the advertisement has changed, a fresh 
tender is mandatory. The passage of thirteen long years since the 
advertisement is also an important consideration. The Notification dated 
03.07.2017 issued under OCR Regulation 33(5) inter alia altering the 
FSI is at the final slage awaiting publication. The bid price today forthat 
reason will also escalate considerably. The State Government and 
MHADAhavc denied any fresh negotiated settlement with the Appellant. 
The interim order of this Court dated 04.09.2014 was not a carte blanche 
for a mandatory settlement with the Appellant. The High Court has noticed 
that the value of the property today would be approximately 75 crores. 
In the land starved city of Mumbai, the settlement of any government 
land, for a housing project, has to be by public auction only, so as to fetch 
the best price in the larger public interest. 
12. The Respondent has only itself to blame for its woes, based 
on a conduct that cannot be countenanced in law. It is therefore not 
entitled to any interest on the deposit made by it which shall be refunded 
by MHADA within four weeks. The Appellant is found
to have been 
wronged, hut must bear part of the blame for !aches on its part also .. It is 
therefore held entitled to intercst@8% on the deposit made by it including 
the earnest money, only till 24.06.2005; to be paid within six weeks. 
13. In the entirety of the matter. all the appeals lack merit and are 
dismiss~-d. 
Kalpuna K. Tripathy 
Appeals dismissed.