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TMI Blog2008 (5) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of this order, it would be open to the appellant to take recourse to such action as is permissible in law. - CIVIL APPEAL NO. 1089 OF 2008 - - - Dated:- 16-5-2008 - SINHA, S.B. AND SIRPURKAR,V.S., JJ. JUDGMENT S.B. SINHA, J : Leave granted. 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 setti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. 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. 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 allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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. 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 determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatsoever that while judging the conduct of the parties, the appellant was obligated to judge its own conduct in the matter. 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. 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. 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 Oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney 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. 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 othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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]. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idualized 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. 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stallment would be recoverable together with the interest on the balance price at 15% interest on the remaining amount the interest shall, however, accrue from the date of offer of possession. 4. You are requested to remit Rs. 1,78,200/- in order to make the 25% price of the said plot within 30 days (upto 17.08.09) from the date of issue of this letter. The payment shall be made by the Bank Draft payable to the HSIDC, Panchkula and drawn on any scheduled bank at Panchkula. In case of failure to deposit the said amount within the above specified period, the allotment shall be cancelled and the 10% earnest money deposited alongwith the application shall stand forfeited to the HSIDC against which you shall have no claim for damage. 5. The balance 75% amount i.e. Rs. 8,91,000/- of the above price of the plot can be paid in lumpsum without interest within 60 days from the date of issue of the allotment letter or in half yearly installments. The first installment will fall due after the expiry of six months of the date of issue of this letter. Each installments would be recoverable together with interest @ 15% interest per annum on the remaining amount as mentioned in clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent writ petition has been pending in this Court. We further notice that a plea raised by the petitioners is that the order dated October 28, 2004 had never been communicated to them. The petitioners have even maintained that the said order had been ante-dated by the Corporation. The respondent Corporation has however maintained that the said order was duly passed, although no details have been given as to when the said order had ever been communicated to the petitioners. We must also take note of the pleas raised by the respondent Corporation that in pursuance to an advertisement on March 2, 2004, 215 residential plots including plot No. 331 had been allotted by way of draw of lots held on June 1, 2004. However, no details of any such allottee have been given in the written statement. While issuing notice of motion, this Court had specifically directed that the re- allotment of the land allotted to the petitiones would be subject to the final decision of the case. We agree 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsible. 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 same terms. Civil Appeal arising out of SLP (C) No. 19949 of 2006 is allowed in part and to the extent mentioned hereinbefore. Civil Appeal arising out of SLP(C) No. 19916 of 2006 H.S.I.D.C. Anr. v.. Mr. Ved Govil Anr. Respondent applied for and was allotted an industrial plot at Manesar, Gurgaon by the Appellant Corporation. Indisputably, it deposited a sum of Rs. 3,96,000/- being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st payable on the said amount had not been paid. The appeal should, therefore, be allowed. Civil Appeal arising out of SLP(C) No. 19833 of 2006 H.S.I.D.C. ORS. v. M/s. Paradise Engineers Anr. A plot admeasuring 1012 sq. meters being plot No. 985, Sector-6, Manesar was allotted in favour of the respondent. He requested for a change of plot. However, a regular letter of allotment was issued on 23.1.2001. The final agreement was entered into on or about 20.9.2001. However, possession was delivered on 31.10.2001. On the premise that respondent has not complied with the terms and conditions of the agreement, a notice was issued on 17.4.2003. Respondent, however, was asked to take physical possession of the land and also to apply for extension for the purpose of starting construction by the Estate Manager of the appellant Corporation by a letter dated 24.4.2003. Pursuant thereto physical possession was said to have been handed over on 6.5.2003. Respondent, thereafter applied for grant of water connection on 1.7.2004. He submitted his building plan on 10.7.2004. Alleging that the ownership is in dispute, the plan was not sanctioned. The Town Planner of the appellant asked the Senio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of natural justice have not been complied with as no opportunity of personal hearing was given to it. The order of resumption did not contain any reason, there is nothing to show that the points raised deserved due consideration at the hands of the concerned authorities. (ii) The respondent had been discriminated with insofar as the persons similarly situated had been granted extension even for a period of four years and thus the respondent was not meted with equal treatment. (iii) Appellants could have cleared the building plan as the same was filed within the stipulated period. (iv) Appellant cannot take benefit of their own wrong. (v) All dues with interest have already been paid. In view of clause 10 of the contract, the respondent being not permitted to transfer the land, it was bound to engage itself only in industrial activity wherefor the allotment was obtained. In this case, the respondent has clearly been discriminated against. Appellant's 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 complied with. The High Court in, this case, in its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant any license. The Appellate Committee, however, did not consider this aspect of the matter at all and thus the appellate orders suffered from total non-application of mind. This Appeal is, therefore, dismissed. We may now consider the cases where the High Court passed an order without assigning sufficient and cogent reasons. It did not arrive at a finding of fact that the action on the part of the appellants was unfair and unjust. We intend to notice the fact of these matters separately. Civil Appeal arising out of SLP (C) No. 16541 of 2006 HSIDC v. S.R. Polysteel Respondent applied for and was allotted an industrial plot in Industrial Estate IMT, Manesar, by the Appellant Corporation. Allegedly, a dispute arose as regards handing over of the actual possession of the said plot. Respondents contend that the entire 1st installment along with interest was duly paid within the stipulated time except for delay of 22 days. Indisputably, the appellant offered the respondent possession of the plot and asked to commence construction by its letters dated 19.12.2001, 9.8.2002 and 11.11.2003. Respondents contend that though a request was made to hand over possession by its letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court while dismissing the Writ Petition on the ground that an appeal was pending before an appropriate authority, however allowed the respondent to file its objections against the order of resumption. On 26.2.04, the respondent filed its objections. On 23.11.2004, the High Court dismissed the Writ Petition directing the appellant to consider and dispose off the objections. On 27.6.2005, the objections were dismissed by the appellant on the ground that the said plot had become liable for resumption. However, before resumption, an opportunity was given to the respondent to retain the plot at the current price of Rs. 2200/- per sq. meter. The same having not being accepted by the respondent, the objections were rejected by the appellant and the amount was refunded as per the terms of the Agreement. Aggrieved by the said order, the respondent preferred an appeal before the Commissioner. On 12.7.05, the appellant issued a letter to the respondent intimating the withdrawal of the possession of the plot. Aggrieved by the order and during the pendency of the appeal before the commissioner, the respondent filed a Writ Petition before the High Court on 18.7.2005. On 8.5.2006, the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and default in making the payment of the 4th and 5th installments. Due to unsatisfactory reply of the respondent by his letter dated 14.12.04, the appellant resumed the plot by its order dated 18.2.05. Aggrieved by the said order, the respondent on 11.11.1999 filed an appeal before the Financial Commissioner Industries. The said appeal was dismissed by the commissioner on the basis that it was devoid of any merit. Feeling aggrieved by the order of resumption and the order dismissing the appeal, the respondent filed a Writ Petition before the High Court. By an order dated 7.8.06, the High Court set aside the order of resumption. Civil Appeal arising out of SLP (C) No. 2331 of 2007 HSIDC v. Matesh Kumar Katyal Respondent applied for and was allotted an industrial plot vide its Regular Letter of Allotment (RLA) dated 9.4.01 at Kundli Industrial Estate. On 11.04.01, a final agreement was entered into between the parties incorporating the terms and conditions of the allotment letter. Vide its letter dated 3.5.01 the appellant offered the respondent the physical possession of the plot. On 24.12.03, the appellant issued a show-cause notice to the respondent for failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1.05 and the appellate order on the premise that the respondent had always showed his eagerness to initiate construction and the delay in making the payment had been on account of a genuine belief by the respondent that the request for an alternative plot was pending before the appellant. Civil Appeal arising out of SLP (C) No. 2343 of 2007 HSIDC v. RMDK Projects Respondent applied for and was allotted an industrial plot vide its Regular Letter of Allotment (RLA) dated 23.1.01 at IMT, Manesar. Thereafter, a formal Agreement was entered into between the parties incorporating the terms and conditions of the RLA. Allegedly, the respondent made various requests to the appellant for delivering the physical possession of the plot after making necessary developments. On 19.12.01, the appellant issued a letter thereby offering the respondent physical possession of the plot. On the other hand, on 24.2.03, the appellant issued a notice to the respondent to show-cause why the plot should not be resumed on account of its failure to comply with the terms and conditions of the allotment letter. Subsequently, two more show- cause notices dated 13.10.03 and 8.12.03 were issued. Allegedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03, 20.6.03 and 29.8.03 for extension of time which was purportedly rejected or not considered by the appellant. On 22.1.03, a show-cause notice was issued by the appellant to the respondent to explain why a resumption order should not be passed for non-erection of the building within the stipulated time. After being given a personal opportunity of hearing on 18.6.03, the appellant vide its letter dated 27.8.03 resumed the plot and requested the respondent to collect the cheque of the amount deposited by him. Allegedly, the order of resumption was passed against the respondent without a personal hearing. Being aggrieved by the said order, the respondent on 28.9.03 preferred an appeal before the Commissioner of Industries. Vide its letter dated 28.8.06, the appellant informed the respondent that the commissioner had dismissed his appeal by an order dated 1.8.06 on the ground that it was devoid of any merit. Being aggrieved by the order of resumption and the order dismissing the appeal, on 9.10.06, the respondent filed a Writ Petition before the High Court. The High Court, by its judgment and final order dated 12.12.06, set aside the order of resumption. In all these cases, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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