Case: CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LIMITED Vs. LAMBDA THERAPEUTIC RESEARCH LIMITED

The said order was passed in the writ petition instituted by the respondents No.1 and 2 herein claiming to be aggrieved by the letter dated 20.04.2016, (signed on 01.07.2016) issued by the appellant herein to the respondent No.3 herein requiring them to pay the sum of Rs.14,05,60,587/- (Rupees Fourteen Crores, Five Lakhs, Sixty Thousand, Five Hundred and Eighty Seven) towards additional lease premium up to 30.03.2007 so as to process the request of respondent No.3 for grant of No dues Certificate in their favour which in turn was required to secure Occupation Certificate in respect of the building, from respondent No.4. The High Court having considered the matter has quashed the demand made through the impugned letter dated 20.04.2016/01.07.2016 and has directed the appellant herein to issue No dues Certificate. The High Court has further directed the respondent No.4 herein to process the application for Occupation Certificate. The appellant is therefore, aggrieved by the order impugned herein3. The brief facts leading to the present situation is that the appellant herein allotted plot bearing No.7, Sector 15, CIDCO, Belapur, Navi Mumbai, measuring 3176.25 sq.mtrs to M/s Mehak Developers Pvt. Ltd., the respondent No.3 herein in terms of the New Bombay Disposal of Land Regulations, 1975. The said allotment was governed by the terms and conditions contained in the Agreement of Lease dated 04.08.1995. The construction was required to be completed by the respondent No.3 as per the time frame agreed including the extended time period. Not putting up the construction within the time frame agreed was to attract payment of additional lease premium retrospectively from 06.08.2001 as per the agreed terms. The fact that the respondent No.3 completed construction of A Wing of the building known as Arneja Chambers II within the initially extended period i.e. 31.12.2005 is not in dispute.

Court's reasoning:
In that regard, the fact remains that as per time extended for completion of the construction, the same was to be completed on or before 31.12.2008. Though the respondents No.1 and 2 herein who were the writ petitioners before the High Court and respondent No.3 herein have sought to contend that the construction was complete in all respects prior to 31.12.2008 and, therefore, they are entitled to seek for issue of No dues Certificate so as to secure the occupancy certificate without levy of the additional lease premium, the case of the appellant herein is that the construction as required had not been completed except for creation of certain documents in the nature of completion certificate dated 24.12.20088. Having adverted to the said contention we find that essentially it is no doubt true that there is no privity of contract between the appellant and the respondents No.1 and 2 herein if looked at in technical terms. However, what cannot be lost sight is that the construction in question is put up by the respondent No.3 on a plot allotted by the appellant and such building constructed has been purchased by the respondents No.1 and 2 under registered Sale Deed dated 16.06.2011 for a valuable sale consideration. In that circumstance the respondents No.1 and 2 are desirous of occupying the building. Though the right in that regard in a normal circumstance is to be exercised and the specific performance for possession with Occupation Certificate is to be enforced against the respondent No.3 who is their vendor, the respondent No.4 which is the statutory authority for issuing the Occupation Certificate was also arrayed as a respondent. The respondents No.1 and 2 while seeking appropriate directions against the respondent No.4, having noticed that the impugned communication would come in their way of securing Occupation Certificate have chosen to assail the same13. In the present circumstance from what has been narrated above it is noticed that there is lacuna in the manner in which the appellant has also dealt with the matter. However, neither the High Court nor this Court while exercising the limited jurisdiction of judicial review can enter into the factual aspects to determine whether the construction in fact had been completed prior to 31.12.2018 before a decision is taken on that aspect by the appellant, based on the available records and spot verification if need be. This is more so when that aspect of the matter is disputed by the appellant herein. The respondents no doubt have relied on the completion certificate dated 24.12.2008, which as already taken note has been addressed to the respondent No.4 and the copy of the same has been furnished to the appellant while making a request for issue of the No dues Certificate. Essentially when the plot was allotted on certain conditions and the same stipulated completion of the construction in a time frame to avoid liability and when the statutory provisions required the No dues Certificate from the appellant so as to seek occupancy certificate from the respondent No.4 the primary procedure is for the respondent No.3 to submit necessary documents to the appellant to establish that the construction is put up within the time frame stipulated and to indicate that they are not liable to pay any additional lease premium. In the instant case we do not find that such procedure has been complied with. Even if the requirement was not complied and if the appellant was entitled to levy the additional lease premium the same was required to be done by adopting an appropriate procedure. Hence to that extent the observations of the High Court that the Principle of Natural Justice has not been complied by the appellant is justified. However, such lapse in procedure was not sufficient to nullify the demand in absolute terms. The High Court, in our view, shall have issued direction to the appellant Corporation to follow appropriate procedure in that regard and pass a reasoned order14. Further, we take note that the demand made in the impugned communication is for the period till 30.03.2007 though it is contended by the appellant that the construction has not been completed as on 31.12.2008 nor would the communication indicate as to when according to them the construction was completed. That apart though certain details were indicated with regard to the construction in the reminder letter dated 24.05.2013, in response to which the impugned communication is issued, there is no reference to the details therein. Hence, despite the manner in which the impugned communication dated 20.04.2016/01.07.2016 issued not being sustainable and the quashing of the same as made by the High Court is justified, the appropriate course that ought to have been followed by the High Court is to remit the matter to the appellant herein by directing them to provide opportunity to the respondent No.3 to file necessary documents in support of the completion certificate dated 24.12.2008 issued by the Architect so as to enable the appellant to make a factual determination and to arrive at an appropriate conclusion afresh by taking into consideration all aspects of the matter. Hence in that view it would be appropriate for us to order accordingly15. Notwithstanding the said conclusion what cannot be overlooked is also the fact that the respondents No.1 and 2 who had made a sizeable investment to purchase the property are the ones who would be ultimately affected and when a discretionary jurisdiction is being exercised by this Court the equities are also required to be worked out and balanced so as to protect the interest of all parties before the Court in the meanwhile. Hence pending such reconsideration an avenue is to be created for the respondent No.4 to issue the occupancy certificate so as to enable the respondents No.1 and 2 to occupy and at the same time the interest of the appellant is also required to be secured9. Further the covenant contained in the Sale Deed dated 16.06.2011 between respondents No. 1 and 3 in para 6 (G) creates an inter-se liability on mutual understanding with regard to the costs incurred for securing No dues Certificate from appellantTherefore, if the said aspect of the matter is kept in view the respondents No.1 and 2, to the limited extent can be considered as aggrieved persons for examination of their contention to the limited extent. The contentions to indicate that the construction was completed before 31.12.2008 and that respondent No.3 is therefore not liable to pay the amount indicated in the impugned communication cannot however be accepted at the instance of respondents No.1 and 2 since the fact of completion of construction within the time frame is to be established by respondent No. 3 alone. Hence the further examination herein is to be made keeping in view this aspect as well.