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TMI Blog2025 (4) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... s been structured according to the following table of contents: - Sl. No. TABLE OF CONTENTS Page No. 1. INTRODUCTION 3 onwards (i) Case of the petitioner 5-13 (ii) Case of YEA 13-15 (iii) Events taking place during pendency of writ petitions 15-16 (iv) Spot inspection 16-18 (v) Proceedings under IBC 18-19 (vi) Parties heard 19 2. ISSUES 20-21 3. CONTENTIONS - PETITIONER'S COUNSEL 21-31 4. CONTENTIONS - YEA's COUNSEL 31-56 ANALYSIS 56 onwards 5. ISSUE NO. 1 Writ Petitions' Maintainability 56-65 6. ISSUE NO. 2 Whether terms of allotment survive after execution of lease ISSUE NO. 3. Whether cancellation of allotment results in cancellation of lease 65 onwards (A) Salient features of allotment, lease and SDZ Policy 65-90 (B) How the parties understood the contract 90-94 (C) Independent statutory power under Section 14 of the Act, 1976 94-108 (D) Findings 108 7. ISSUE NO. 4 Effect of petitioner's earlier Writ Petition No. 47262/2017 on the present petition. 108-109 8. ISSUE NO. 5 Whether action of cancellation of entire allotment - Hit by Doctrine of Proportionality. ISSUE NO. 6 Whether non-payment of dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner has been cancelled. Further, a mandamus has been sought restraining the respondents from interfering with the peaceful possession of the petitioner over the land in question and from taking any other coercive action pursuant to the order impugned; further direction to respondent no. 2 to provide requisite amenities such as water, sewer and drainage and to take all other requisite steps for effective implementation of the Escrow Agreement dated 24.09.2018. The writ petition was amended and further prayers were added to quash the resolution dated 28.6.2021 (Annexure No. 37-B) passed by the Board of YEA in its 70th Board Meeting in so far as YEA sought to levy restoration charges upon the petitioner and limited the proposed re-schedulement and re-computation of the dues to the year 2023. Another relief claimed is for quashing the consequential letter dated 05.07.2021 (Annexure No. 37-C) whereby the decision taken by the Board in its 70th Meeting along with other decisions was communicated to the petitioner. A prayer commanding YEA to re- schedule and re-compute the balance dues and to decide the representation dated 02.03.2021 has also been made. CASE OF THE PETITIONER (JAL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. All the allotment letters, being similar in nature, contained a payment schedule, the area of the land allotted and installments fixed for payment of the premium . 7. In between the same period of time, subsequent to the six allotment letters and payment of 20% advance allotment money by the petitioner, 32 lease deeds were executed by which approximately 965.7390 hectares of land was leased. All the lease deeds contained detailed terms and conditions under which right in the land was transferred to the petitioner, specifying the mode of recovery of any amounts payable by the petitioner, as arrears of land revenue. Various clauses contained in the allotment letters which were contemplated to be a part of the lease deeds, were expressly incorporated therein without adopting the allotment letters as a whole. Lease deeds do not contain any clause which may enable the respondents to cancel/ terminate the lease deeds. According to the terms and conditions contained in the lease deeds, YEA was to extend full cooperation and render such assistance to the petitioner as might be necessary, such as obtaining requisite permits, sanctions, approvals, clearances etc for achievement of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd he assured the petitioner that on payment of Rs. 300 Three hundred) crores, the matter would be taken up with Board for considering reduction of the rate of interest and re-schedulement of the balance amount. After discussion between the parties, the petitioner requested ICICI bank to release Rs. 300 (Three hundred) crores from the Escrow Account on 31.07.2017 and deposited the said amount through Bank Draft No. 551184 issued by ICICI bank. According to the petitioner, the sum so deposited amounts to more than 50% of the amount overdue that was further more than the required 15% amount contemplated under the Re- schedulement Scheme. YEA, instead of approving the petitioner's application under the Re-schedulement Schement, as per the petitioner, threatened it to cancel the allotment which led the petitioner to file Writ-C No. 47262 of 2017 seeking quashing of the letter dated 04.08.2017 with a writ of mandamus commanding the YEA to forthwith issue a re-schedulement demand letter specified in the scheme. The said writ petition was connected with the leading petition by order dated 02.08.2017. YEA, vide letter dated 16.02.2018, directed the petitioner to deposit Rs. 170.78 cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that even after payment of land dues to the extent of 87%, the building drawings were not approved by YEA resulting into Real Estate Projects becoming unviable and causing huge losses to the petitioner. However, despite such repeated requests, YEA did not take bonafide action and even threatened the petitioner, inter alia, with cancellation/ termination of the lease deeds. 13. The petitioner presented a cheque of rupees 10 (ten) crores towards the overdue installments and promised to deposit the balance amount by 15.02.2019 and submitted letters requesting YEA to grant further extension of time to deposit the balance amount of first installment, reduction in rate of interest and sought rectification in respect of additional penal interest. YEA, vide its letter dated 04.06.2019, informed the petitioner that in 65th Board Meeting, it had been decided that change in payment mechanism to Escrow Account might be considered only after the petitioner would make the default good in pursuance of re-schedulement letter dated 28.05.2018. It directed the petitioner to deposit rupees ninety eight crores for execution of proposed Escrow Agreement for the balance amount. The petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% of the total area for core activities, but failed to do so. 16. The dispute is contractual, arising from allotment letters and lease deeds, making a writ petition under Article 226 inappropriate. The Supreme Court has consistently ruled that judicial review in contractual matters is limited and should not be done unless arbitrariness or violation of fundamental rights is involved. The cancellation was effected as per Clause 4.2 of the allotment letters, and the petitioner has not disputed its payment defaults. 17. The lease deed is not a standalone document; it is directly linked to the allotment letters. Since the allotment letter was canceled, the lease deed also ceases to exist. 18. Despite multiple opportunities for restructuring payments, the petitioner failed to adhere to the new schedules. The Authority granted multiple extensions but still did not receive timely payments. The Escrow Agreement of 24.09.2019 was meant to facilitate payments, yet the petitioner deposited only Rs.47.09 lakh, while the due amount was significantly higher. 19. A survey conducted in year 2024 found that the petitioner developed only 5.46% of the required 40% covered area. Several essential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rores + Rs. 5 crores + Rs. 52,50,26,551/- + Rs. 100 crores (Total Rs. 207,50,26,551/-). 24. The Board of YEA, considered the proposal of the petitioner company for restructuring and vide letter dated 05.07.2021, demanded a lump sum payment of Rs. 425.10 crores towards "restoration charges" as a pre-condition. The petitioner challenged the aforesaid demand of YEA by filing Writ-C No. 17785 of 2021 which was dismissed as withdrawn with liberty to the petitioner to seek amendment in the present writ petition. Accordingly, amendment was sought and was allowed. SPOT INSPECTION DURING COURSE OF HEARING: 25. During the course of hearing, the Court, vide order dated 09.05.2024, directed for survey of the site by YEA in presence of representative of the petitioner. Site survey was, accordingly, conducted on different dates. The inspection report and photographs of the site have been filed. 26. Whereas the emphasis of the respondent-Authority has throughout been to the effect that the petitioner failed to carry out construction activity as per the stipulations contained in the allotment letters, the stand of the petitioner has been that in the core and non- core areas of the subject land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The same were dismissed by the Supreme Court by order dated 10.1.2025. We are informed that at present, the resolution professional is functioning and so far there is no approved resolution plan. PARTIES HEARD : 28. We have heard Mr. Jayant Bhushan, learned Senior Advocate, assisted by advocates Mr. Vishal Gupta, Mr. Rohan Gupta, Mr. Amartya Bhushan, Mr. Aditya Marwah, Mr. Anoop Rawat, Mr. Sagar Dhawan, Mr. Ahkam Khan, Ms. Shikha Gupta, Ms. Kirti Gupta, Mr. Pranay Kumar, Mr. Jatin Kumar Mishra for the petitioner (JAL), Mr. Bhuvan Madan, Resolution professional (in person), Mr. Manish Goyal, learned Senior Advocate, assisted by Mr. Praveen Kumar, Mr. Syed Imran Ibrahim and Mr. Pranav Tanwar for respondent no. 2 (YEA), Mr. Amit Saxena, learned Senior Advocate, Mr. Rahul Agarwal, Advocate, Ms. Upasana Agarwal, Advocate and Ms. Aishwarya Gupta, Advocate on behalf of lenders/financial creditors, mortagees and sub-lessees and Mr. Anoop Trivedi, learned Senior Advocate assisted by Mr. Abhinav Gaur, Advocate for the homebuyers. ISSUES: 29. The submissions made by learned counsel for the parties range from issues pertaining to maintainability of the writ petition; challenge to the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itting its claim with the resolution professional of the company? D. Whether YEA's claims are protected under IBC in view of fact that a claim under Section 13 and Section 13A of the UP Industrial Area Development Act, 1976 would make YEA a secured creditor and at par with entitlement of secured financial creditors under Section 30(2)(b) read with Section 53 of the IBC? 31. We proceed to note the submissions of learned counsel for the parties in relation to the main issues and if the cancellation order is held to be illegal, we will also deal in detail the submissions made by them on the ancillary issues. CONTENTIONS RAISED ON BEHALF OF THE PETITIONER ISSUE NO. 1: 32. It is contented by Shri Jayant Bhushan, learned senior counsel for the petitioner, that although the counsel for the respondent argued that the Writ Petition is not maintainable, in the counter affidavit filed by YEA, no such objection has been taken. The only objection taken is that the scope of judicial review while dealing with the policy decision is narrow. In fact, the respondent admits that an executive order is not beyond the scope of judicial review, but only states that the scope of challenge to pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed had been executed. Still further, some of the clauses in the allotment letter were completely removed, or removed and replaced by different clauses in the lease deed. One such example is Clause 4.2 in the allotment letter which is the cancellation clause. Such a clause is conspicuously absent in the lease deed and instead there is Clause 38 which provides for recovery of amounts due as arrears of land revenue. Again, if both allotment letter and lease deed were simultaneously in existence, there would be complete confusion as to which clause will prevail. Further, there would be no reason why some clauses in the allotment letter were deleted from the lease deed. 34. The respondent's submission that because the allotment letter is annexed to the lease deed, therefore, it becomes part of the lease deed, is erroneous. The allotment letter has been annexed only to show the chronology of events since it is referred to in clause 2 of the recitals of the lease deed and also because certain clauses of the allotment letter are incorporated by reference in the lease deed. It is submitted that after the lease deed has been executed, the allotment letter ceases to be effective for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith liberty to approach the Court for other prayers relating to sanctioning of plans, etc., in case the present Writ Petition is allowed. ISSUE NO. 5: 37. The lease deeds gave the petitioner the unfettered right to create third party rights including the power to sub-lease without permission of the Lessor i.e. the respondent No. 2 (Clause 5 of the Lease Deed), the permission to mortgage in favour of banks/financial institutions/lenders (Clause 14 of the Lease Deed), etc. It also gives the power to develop the land (Clause 4 of the Lease Deed), and, in fact, the petitioner has spent a large amount of money in excess of Rs. 2,500 crores in developing the whole SDZ land including construction of the Formula One Racetrack (Buddha International Circuit). Moreover, around the date of cancellation order, the petitioner had paid an amount of Rs 2294.49 crores (including interest) against allotment amount of Rs 1659.25 crores towards land premium and Rs. 195.73 crores (including interest) towards lease rent against Rs 264.42 crores (including interest). Hence, most of the payments had already been made and outstanding land premium was only to the tune of Rs. 547.77 crores including intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was equal to the amount of dues payable to YEA. It was, therefore, incumbent on the respondent to choose the least restrictive measure to achieve fulfilment of its outstanding dues. This would have envisaged attachment of only that portion of the property and sale thereafter which would have been sufficient to recover the outstanding dues. In the present case, that would have meant less than 10% of the allotted land. The default in the present case was clearly not willful or dishonest and at various stages, the default ranged between 9% to 25% (total amount payable) when the cancellation was made. In fact, on the date when the cancellation was made, according to the petitioner, of the total amounts due as on that date, 91% had already been paid by the petitioner and there was a default only of 9%. ISSUE NO. 6 & 7: 41. It was never YEA's case in its Counter Affidavit that the cancellation had been made on account of defaults in development/construction. A perusal of paras 97-99 of the Counter Affidavit of YEA would make it clear that the cancellation was on account of default in payments and the alleged non-providing of performance security of Rs. 100 crores and not on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Vs. Thakur Bharat Singh: (1697) 2 SCR 454; (xiv) Kranti Associates Pvt. Ltd. & another Vs. Masood Ahmed Khan & others: (2010) 9 SCC 496; and (xv) Ahmad Ullah Vs. Union of India & others: 2019 SCC Online All 5904. CONTENTIONS RAISED ON BEHALF OF YEA (RESPONDENT NO. 2): 44. Sri Manish Goyal, learned Senior Counsel, appearing for the respondent no. 2-YEA, submits that the present Writ Petition is not maintainable. The dispute raised is purely contractual, and the petitioner is seeking reliefs arising out of the terms of contracts (Allotment Letters and Lease Deeds), the interpretation and enforcement of the provisions therein. The Supreme Court has consistently held that the scope of judicial review under Article 226 is limited in contractual disputes. Contractual actions cannot be questioned on the grounds of equity, equality and proportionality if it can be shown that the action of the Authority was in terms of the contract, such as the present case, wherein the Authority terminated the petitioner's allotment and the lease deeds under Clause 4.2 of the Allotment Letters. In commercial transactions, the rights and obligations of the parties are determined by the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Lease Deeds on the petitioner's defaults. The petitioner defaulted, which it does not dispute. Further, the petitioner failed to develop the SDZ Project including housing projects and maintain the Performance Bank Guarantee. Thus, there were valid grounds for cancellation and the Authority, in valid exercise of its contractual rights, terminated the Allotment and the Lease Deeds. 47. The primary submission is that the doctrine of proportionality has no application in the present case. YEA was compelled to pass the Cancellation Order in view of the petitioner's persistent and consistent defaults, failure to develop the SDZ Project including the housing projects, harm to the homebuyers, and loss to the public interest. The Authority had, from time to time, taken least restrictive measures against the petitioner. Despite such measures and opportunities, the petitioner continued to default on its financial and development obligations. The Authority, in public interest and as a last resort, passed the Cancellation Order. The Cancellation Order had a proper purpose and rational connection with the aim it sought to achieve. The primary objective of the Cancellation Order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner challenged the said decision before this Hon'ble Court in the connected Writ Petition No. 47262 of 2017 raising a specific ground that the Authority's said decision cannot override the terms and conditions of the Allotment Letter, Reservation Letter and the Lease Deeds and the Authority has no right under the Lease Deeds to take back lands belonging to the petitioner. The petitioner has also disputed the taking back of the proportionate land by letter dated 03 November 2017. In this backdrop and under these circumstances, the Re-Schedulement Plan of the dues was agreed in the 62nd Board Meeting of the Authority and communicated to the petitioner on 28th May 2018. However, the petitioner even failed to make payment of the first and second instalment of the Re- Schedulement letter. It is clear that after having challenged the decision of taking back of the proportionate land in the connected Writ Petition No. 47262/2017, the petitioner is making contrary submissions in the present Writ Petition. 51. The Authority also places reliance on the judgments where the Hon'ble Supreme Court held that parties cannot 'blow hot and cold' since it is a pure abuse of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s allotment and lease deeds subject to payment of restoration charges at the rate of 10% of the prevailing rates of the allotted project ("Restoration Charges"). The Authority informed the petitioner about the said decision of the Board and, accordingly, directed the petitioner to deposit Restoration Charges for enabling the Authority to take further steps for restoring the allotment. The petitioner filed a writ petition bearing no. 17785 of 2021 challenging the levy of restoration charges. The said writ was "dismissed as withdrawn" by the High Court on 17.08.2021, and the petitioner was granted liberty to amend the present Writ Petition for the relief against restoration charges. 53. The petitioner has failed to demonstrate any public law element or arbitrariness in the Authority's decision to cancel the allotment. The petitioner's contention that the Cancellation Order only terminated the Allotment Letters and it does not have the consequent effect of cancelling the Lease is fallacious and has no basis in the facts or in the law. The Allotment Letters continued to subsist along with the Lease Deeds. The Allotment Letters were issued as the principal agreement and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner that the defaulted amount can be recovered only as arrears of land revenue in terms of Clause 38 of the Lease Deeds and hence, to such an extent Clause 4.2 of the Allotment Letters stood eclipsed is flawed understanding of the composite transaction. The aforesaid clause in the Lease Deeds does not supersede the Allotment Letters in as much as at no stage the Allotment Letters were superseded by the execution of the Lease Deeds. The said clause was in addition to the already existing Clause 4.2 of the Allotment Letters. Clause 4.2 of the Allotment Letters explicitly grants the Authority a contractual right to cancel both the allotment and the lease deeds in response to defaults committed by the petitioner. Consequently, it is submitted that the Authority acted within its rights when it terminated the petitioner's allotment (including Lease Deeds) due to the petitioner's admitted defaults. 56. Reliance has been placed upon the following authorities :- (i) Commissioner of Rural Development and others Vs. A.S. Jagannathan: (1999) 2 SCC 313; (ii) Super Poly Fabriks Limited Vs. Commissioner of Central Excise, Punjab: (2008) 11 SCC 398; (iii) Orissa Power Transmiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a persistent and consistent defaulter. The petitioner has admitted its defaults and that it failed to pay its outstanding dues arising out from the allotment and lease deeds executed for the SDZ Project. Despite the grant of various extensions for payment by the Authority, the petitioner failed to adhere to agree upon payment schedule. The petitioner's repeated requests for re-scheduling of payments were accepted by the Authority on multiple occasions, yet the petitioner continued to breach its payment obligations under the allotment letters, lease deeds, and the re-scheduled payment plan. As elaborated below, various accommodations were granted to the petitioner at its requests (least restrictive measures), however, the petitioner failed to pay its dues. The petitioner also failed to undertake the development of the SDZ Project, including the housing projects. The petitioner's violation of its development obligations resulted in regular complaints from the homebuyers, who suffered due to the petitioner's failure and misappropriation of funds. The petitioner's misconduct frustrated the very purpose of the allotment and the lease deeds, causing irreparable harm to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he housing project are collected in the escrow account and appropriated towards payment of outstanding dues from the petitioner. The petitioner once again failed to honour its commitment and until 28 February 2020, mere Rs. 47.09 lakh (approx.) was deposited in the escrow account. In these circumstances, huge outstanding had accumulated, and the petitioner was entirely responsible therefor. The Authority, vide a letter to the Punjab and Sindh Bank, invoked the Bank Guarantee and adjusted the amount recovered towards the outstanding dues. The petitioner requested the Authority to execute the escrow agreement. The Authority sent a default notice to the petitioner and directed it to pay the amount due under the re- scheduled payment plan. For the purpose of escrow agreement, the petitioner submitted the details of amount received and receivables from the real estate schemes. The petitioner stated that it has received Rs. 1900.78 Crores out of Rs. 2433.41 Crores from the home buyers of 10 housing projects. The Authority approved the opening for the Escrow Account subject to the conditions mentioned therein. The Escrow Agreement was signed among the petitioner, the Authority and the ICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember 2011 to 22 August 2012) were issued by the Authority to the petitioner specifying the defects in the application for part completion of the Main Grandstand in core area and the lapse of the same in terms of the Building Regulations but to no avail. On 13 December 2018, the Authority sent a final notice to the petitioner for its failure to comply with the Building Regulations and proceed in terms thereof. In view of the above ie, the petitioner's persistent and consistent defaults, failure to undertake development of the SDZ Project including housing projects, grievances of the homebuyers and continued non-compliance with the terms of the allotment and lease deeds, the Authority was left with no choice but to issue the Cancellation Order in the end as the last resort. 61. In 2024, the Authority conducted a survey of the SDZ land allotted to the petitioner. Based on the said survey, the Authority prepared a survey report ("Survey Report") verifying the extent of development work undertaken by the petitioner. The Survey Report demonstrates that the development obligations have not been met by the petitioner at all. The development on site is far short of milestones that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elop the allotted land for various purposes, including residential and group housing projects. However, the petitioner failed to complete even a single housing project. The Cancellation Order was essential in public interest as the petitioner failed to develop the residential and group housing projects, and the homebuyers were suffering due to long delays caused by the petitioner. Further, the petitioner has been admitted into insolvency and its constant poor financial condition is a matter of record. As such, letting the petitioner continue with the SDZ Project would only further prejudice the homebuyers, the Authority and the public at large. The homebuyers of the petitioner were aggrieved by the delaying tactics and the inactions of the petitioner. The Cancellation Order notes the plight of the homebuyers and their complaints to the Authority against the petitioner for the inordinate delay in completion of the housing and residential work. The petitioner's non-development of the housing and residential work, therefore, weighed in as one of the primary grounds for the passing of the Cancellation Order. In an attempt to mislead this Court, the petitioner has included the devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd letter dated 15.12.2014. The Authority challenged the High Court's decision setting aside the demand of additional compensation including the demand letters before the Hon'ble Supreme Court. The Supreme Court has set aside this Court's judgment and upheld the demand of additional compensation including the demand letters ("Shakuntla-I"). The Supreme Court held that the demand for additional compensation is in larger public interest. The petitioner filed a miscellaneous application before the Supreme Court seeking modification of the judgment in Shakuntala-1. The petitioner inter alia raised the grounds that the Authority is imposing interest on delayed payment of additional compensation, and it is recovering additional compensation qua the LMC land (resumed land). The Supreme Court dismissed the petitioner's Modification Application. The petitioner, thereafter, filed a review petition against Shakuntla-I. The Supreme Court dismissed the review petition as well. Independent statutory power of cancellation under Section 14 of the 1976 Act: 65. Without prejudice to the above, the Authority submits that it has an independent statutory right of cancellation under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons already entered by homebuyers with the petitioner. Given the appreciation in the value of land, the project will not only be viable, but it will also be economically lucrative to prospective bidders. Such rehabilitation will ensure that the homeowners in the group housing projects receive their housing units as expeditiously as possible. Alternatively, the other option for the Authority is to undertake the development of the housing projects by itself, complete the construction of the housing units and deliver the same to the homebuyers/ allottees. The Cancellation Order ensures that the allotment of any sub-lease would not be cancelled so long as the dues are regularly and timely paid to the Authority, thus ensuring continuation of sub-leases. The sub-lessees interests under the sub- lease are thus fully protected and they will be able to enjoy the same without any disruption so long as they continue to comply with the obligations under the sub-lease and also those under the relevant lease with the Authority under which the sub-lease has been granted, so far as they are applicable to them. It is also pertinent to note that after passing of the Cancellation Order, the sub-lesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and obtained. The petitioner also made payments pursuant to levy of additional penal interest. The petitioner is not entitled to now turn around and dispute the conditions for extension. In terms of the Allotment, the Authority had the power to cancel the petitioner's allotments and the lease deed due to its defaults. Due to the petitioner's persistent defaults, it had fallen under the category of a 'defaulter' and the Authority could have cancelled the petitioner's allotments and lease deeds. However, the Authority took a reasonable and least restrictive measure by levying an additional 1% penal interest and granted extension of payment to the petitioner. However, despite such reasonable extension, the petitioner failed to make complete payment under the Extension Letters as well. The Authority submits that the additional interest was levied for a proper purpose, rationally connected to the object to be achieved, necessary to fulfil the intended objective, and proportionate in balancing the interests of both parties. ANALYSIS OF RIVAL CONTENTIONS AND FINDINGS Issue No. 1: Whether Writ-C No. 6049 of 2020, against cancellation of allotment, is maintainable? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have to be filed. However, if the right already exists and is being infringed, a writ petition would lie. 70. The Supreme Court, in ABL International v. Export Credit Guarantee Corporation (2004) 3 SCC 553, held as under: "The requirement of Article 14 should extend even in the sphere of contractual matters for regulating the conduct of the State activity. Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, the State cannot thereafter cast off its personality and exercise unbridled power unfettered by the requirement of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The personality of the State, requiring regulation of its conduct in all spheres by requirement of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al contractual obligation cannot divest the claimant of the guarantee under Article 14 of non- arbitrariness at the hands of the State in any of its actions. x x x From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution. 71. In M.P. Power Management Company Ltd, Jabalpur vs SKY Power Southeast Solar India Private Ltd and others, (2023) 2 SCC 703, the Supreme Court extensively dealt with maintainability of a Writ petition arising out of contractual obligations between a private entity and an instrumentality of State and held as under :- .............The reach of Article 14 enables a Writ Court to deal with arbitrary State action even after a contract is entered into by the State. A wide variety of circumstances can generate causes of action for invoking Article 14. The Court's approach in dealing with the same, would be guided by, undoubtedly, the overwhelming need to obviate arbitrary State action, in cases where the Writ re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the State, a civil action in the appropriate Forum is, undoubtedly, maintainable. But this is not the end of the matter. Having regard to the position of the State and its duty to act fairly and to eschew arbitrariness in all its actions, resort to the constitutional remedy on the cause of action, that the action is arbitrary, is permissible. However, it must be made clear that every case involving breach of contract by the State, cannot be dressed up and disguised as a case of arbitrary State action. While the concept of an arbitrary action or inaction cannot be cribbed or confined to any immutable mantra, and must be laid bare, with reference to the facts of each case, it cannot be a mere allegation of breach of contract that would suffice. What must be involved in the case must be action/inaction, which must be palpably unreasonable or absolutely irrational and bereft of any principle. An action, which is completely malafide, can hardly be described as a fair action and may, depending on the facts, amount to arbitrary action. The question must be posed and answered by the Court and all we intend to lay down is that there is a discretion available to the Court to grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilicate avoidance of obligation voluntarily incurred. 70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business. 70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. 70.7. Writ can be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes." (emphasis supplied) 73. It has thus, been held that the issues arising out of contract should not be normally examined by the Court as the party has remedy of seeking relief by way of damages unless the action under challenge has public law character attached to it. Once, on the facts of a particular case, it is found that nature of activity or controversy involves public law elements, then the matter can be examined under Article 226 of the Constitution of India. 74. Rajasthan State Industrial Development (supra) cited by learned Senior Counsel for YEA laid down that generally the Court should not exercise its writ jurisdiction to enforce a contractual obligation. The writ can be granted if there was already an existing legal right and which is being infringed. The writ petition would not lie for establishment of a legal right, as the remedy in such a situation, would be a suit for specific performance. 75. Jagdish Mandal and Uflex Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 2 5. Clause 6.1 + 8.12 5. Clause 4 6. Clause 8.4 6. Part of Clause 8 7. Clause 8.5 7. Clause 10(i) and (iii) 8. Clause 8.10 8. Clause 9 9. Clause 8.3 9. Clause 6 10. Clause 9.1 10. Clause 14 Clauses which have been incorporated by reference: Particulars. Clauses Letter. in Allotment Clauses in Lease Deed Clauses in the Allotment Letter which are included in the Lease Deed by reference and incorporation. 1. Clause 3.1, 3.6- 3.8 1. Clause 3 2. Clause 3.9 2. Clause 15 3. Clause 10 3. Clause 10(ii) 4. Clause 11 4. Clause 16 Clauses which have been modified or replaced: Particulars. Clauses in Allotment Letter. Clauses in Lease Deed Clauses in the Allotment Letter that were removed and/ or replaced in the Lease Deed 1. Clause 2 1. Removed 2. Clause 3.4 2. Removed 3. Clause 4.2 3. Removed + Clause 38 added 4. Clause 5.1 4. Removed 5. Clause 8.1 5. Removed 6. Clause 8.2 6. Removed Clauses which have been substantially changed: Particulars. Clauses in Allotment Letter. Clauses in Lease Deed Clauses in the allotment letter that were substantially changed in the lease deed. 1. Clause 5.3 1. Clause 23(iv) 2. Clause 8.9 2. Clause 8 3. Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for development of SDZ with SPORTS as Core Activity, and 2. The Lessor, allotted to the Lessee SDZ Sector No. 25 with SPORTS as Core Activity for development of the SDZ vide letter No. YEA-32/2009 dated 20.03.2009 (the Allotment Letter attached hereto of SCHEDULE-I) on the terms and conditions contained in the said Allotment Letter which interalia, include allotment of approx. 646.7530 Hectares land in Villages- Salarpur, Munjkheda, Falehpur Atta, Gunpura, Jaganpur, Afjalpur, Dankaur and Aurangpur in Tehsil Sadar, District Gautam Budh Nagar (U.P.) for a period of 90 years on lease at premium al Rs. 241.86 per sq.m. excluding External Development charges plus lease rent @ 2.5% per annum of premium. 3. The Lessor in part discharge of its obligations under the said Allotment Letter, hereby agrees to provide on lease and the Lessee hereby agrees to take on lease, 175.3639 hectares of land in Village Gunpura, Tehsil Sadar, Distt. Gautam Budh Nagar (U.P.) (Hereinafter referred to as the Demised Land) for development of SDZ, more particularly detailed in SCHEDULE- II attached hereto, on terms and conditions contained in these presents. I. NOW THEREFORE THIS LEASE DEED WITNESSETH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35% B. Other Activities i) Commercial not more than 20% ii) Institutional and amenities not less than 5% iii) Roads, open and other circulation areas not less than 25% iv) Residential including group housing and plotted Development area not less than 15% Subject to the above provisions, the Lessee shall have exclusive right to determine the purpose for which the Demised Land will be used and also the allocation of area of such Demised Land for different uses. The Lessee shall also be free to decide whether the portion of Demised Land decided by the Lessee to be sub-leased/given on leave and licence basis should be in the form of plots or constructed properties. No permission of the Lessor shall be required either for the use of the Demised Land or for sub-leasing/ multiple sub-leasing/giving on leave and license basis. The Lessee shall be entitled to modify the Demised Land or part thereof as per the layout plan(s) approved by the relevant authorities. In case land for development of SDZ is allotted to the Lessee in parts, the Lessee shall be entitled to amalgamate/merge the said parts of the allotted land at one location. (5) The Lessee shall have unfettered r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment of Yamuna Expressway Industrial Development Authority (earlier known as Taj Expressway Industrial Development Authority) and Zoning Regulations & Building Regulations of Yamuna Expressway Industrial Development Authority as applicable from time to time. (9) The height of buildings will be governed by the regulations/standards of relevant Airport Authority, as applicable. (10) The Lessee shall carry out the entire development in the allotted area adhering to :- (i) Standards and specifications laid down in the building and other regulations of the Lessor/relevant Indian Standards/National Code etc. (ii) Master Plans and Rules & Regulations of the Lessor and other relevant authorities. (iii) Government policies and relevant Codes of BIS/IS relating to disaster management in land use planning and construction work. (11) a. the annual lease rent may be enhanced on expiry of every 30 years by an amount not exceeding 50% of the lease rent last fixed. b. The Allottee shall have an option to pay a lump-sum amount equivalent to 11 times of the annual lease rent i.e. 27.5% of total Premium before execution of lease deed, as ONE TIME LEASE RENT. Note: If the Allotte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) That the Lessee/sub-lessee(s) hereby covenants to pay all rates, taxes, charges and taxes already levied or to be levied in future by the Lessor or any local or other authority/Central or State Govt. The Lessee/sub-lessee(s) shall have to take independent connection in his name at his cost for water supply/drainage/sewerage on payment of required charges to local authority for construction purpose and later on for regular drinking water supply etc. The Lessee/sub-lessee(s) shall, it required by the Lessee, also have to take in his own name and at his own cost temporary electric/power connection for construction purposes and later on for regular supply on payment of required charges to the authority as may be responsible for giving such electric/power connection. (22) The Lessee covenants and warrants that: i) The Lessee shall follow all laws and bye-laws, rules, building regulation and direction of Lessor and the local municipal or other authority now existing or hereinafter to exist so far as the same relate to the immovable property and so far as they affect the health, safety and convenience of other inhabitant of the place. ii) The Lessee shall bear legal expenses of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d properly, the Chief Executive Office or any officer authorized by Chief Executive Officer of the Lessor will have the power to get the maintenance done through the authority and recover the amount so spent from the Lessee/sub- lessee(s). The Lessee/sub-lessee(s) will be individually liable for payment of the maintenance amount related to its property. No objection on the amount spent on maintenance of the building by the Lessor shall be entertained and the decision of the Lessor shall be final. (25) The Lessor shall have full rights and title to all mines and minerals, cools, gold washing, earth oils and quarries in and under the Demised Land of any part thereof and to do all acts and things, which may be reasonably necessary or expedient for the purpose of searching removing and enjoying the same, without affecting the Lessee's/sub-lessee(s) right to peaceful possession and enjoyment. (26) The Lessor has the right to receive the lease rent annually in advance without having to issue any demand notice therefore. (27) Any building constructed on any portion of Demised Land (except for Core Activity) may be sub-let, by the Lessee/sub-lessee(s) subject to the terms and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be constructed over the Demised Land except at places specified for the purpose by the Authority. (34) All powers exercised by the Lessor under this Lease Deed may be exercised by the Chief Executive Officer of the Lessor, who may also authorize any of its other officers to exercise all or any of the power exercisable by it under his Lease Deed. A copy of such authorization shall be handed over by the Lessor to the Lessee immediately upon such authorization. (35) Any relaxation or indulgence granted by the Lessor to the Lessee under this Deed shall not in any way prejudice the legal rights of the Lessor. (36) The Lessor and the Lessee hereby agree that all notices hereunder to any Party hereto shall be delivered personally or sent by registered or registered mail with acknowledgement due or facsimile to such Party at the address set forth below or such other address as may hereafter be designated in writing by such Party to the other Party. Notices delivered personally shall be deemed to have been received on the date of receipt, notices sent by registered mail shall be deemed to have been received on the tenth day following mailing, and notices sent by facsimile shall be dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed, Clause 4.2 of the allotment letter which conferred right in favour of YEA to cancel lease in case of default in payment of the premium or the installments would still survive. The said question assumes importance in view of the fact that there was no similar provision in the lease deed. Interlinked with it is the question as to whether cancellation of the allotment would result in forfeiture of the lease and the rights conferred thereunder in favour of the petitioner or not. The contention of learned Senior Counsel appearing for the petitioner is that after the lease deed has been executed, the allotment letter ceases to be effective for the land parcels for which lease deeds have been executed since it has been superseded by the lease deed which is the essential contract between the parties. On the other hand, submission of learned Senior Counsel for the YEA is that the allotment letters and the lease deed were executed for a common purpose and they subsist together. It is submitted that every contract is to be considered with reference to its object and all of its terms and accordingly, the whole context must be considered to discern the true intent of the parties [Bihar Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y deal with the substance of things, which in such a case is the whole transaction, and not with unrealities such as the hypothetical operation of one of the deeds by itself without the others." 83. In Infrastructure Leasing & Financial Services Ltd. v. HDFC Bank Ltd. (supra), the ratio in Manks v. Whiteley (supra), has been applied by the Hon'ble Supreme Court in interpreting a Master Facility Agreement' executed between the respondent-Bank and the appellant for providing financial assistance to the appellant and an 'Assignment Agreement' executed between them. The Hon'ble Supreme Court held that "where the transaction is not the subject of one document, but several, which refer to each other, or a reading of all, describe the entire contract, then, it is open to the court to consider all of them together." 84. The above principles of interpretation have been laid down as noted above in respect of multiple documents arising out of a single transaction. These multiple documents were contemporaneously executed. Nonetheless, the principles of interpretation laid down in these judgements in relation to multiple documents arising out of a single transaction is of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiff has admitted the shelter of the Arbitration Clause provided in Concession Agreement. Therefore, the contention on behalf of the plaintiff that on execution of the Master Lease Agreement, Concession Agreement does not exist and/or has come to an end cannot be accepted." (emphasis supplied) 85. Indisputably, the land was allotted to the petitioner in pursuance of and to effectuate the objectives of SDZ Policy of the State. The contentions, therefore, cannot be answered, only on basis of stipulations in the Allotment Letters and the lease deed, divorced from the context and objects of the SDZ Policy and multiple documents executed between the parties, in furtherance of the same, from time to time. We, therefore, proceed to examine in same detail the SDZ Policy and the stipulations in the allocation letter, the reservation letter and the allotment letters. The question of prime importance as noted is whether after execution of 32 lease deeds for different parcels of land in pursuance of 6 allotment letters, the allotment letters stood superseded altogether and what would be the effect of cancelling allotments only and not the leases. 86. The Special Development Zone P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -lease of core area, prior permission of TEA was required. Multiple sub-leases were permissible for separate small parcels of land. Multiple tenancies and sub-leases were also permissible. In due course the allottee could obtain free hold right on fulfilment of prescribed conditions. The allottee would present a detailed project report laying down the outlines of the project, land use, essential services, management, implementation and maintenance details etc. The entire development after handing over of possession to the allottee would be under supervision and control of TEA and its Rules and Regulations, as prescribed, from time to time, would be applicable. 87. On 11.06.2008, the petitioner was informed that pursuant to its application dated 19 March 2008 received in the office of TEA on 24.03.2008, registered at Serial No. 3, one SDZ with an area approximately 1000 hectare has been allocated to it for development of 'SPORTS' as core activity. Allotment letter specifying the terms and conditions for allotment of SDZ was to be issued in due course. On 28.08.2008, a reservation letter was issued by YEA in favour of the petitioner reserving 1000 hectare of land in Sector N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial circumstances, power to extend time in depositing the above amount was conferred upon the Chief Executive Officer of YEA upon payment of such charges as are determined by YEA. The balance 80% of the provisional premium was payable in 20 half yearly installments along with interest on reducing balance and prevailing SBI PLR. The provisional premium was liable to be revised from time to time. Rs.725/- per square meter fixed as external development cost was provisional and subject to final computation of the development cost. Clause 5.2 conferred power upon YEA to cancel allotment of land and lease deeds executed in pursuance thereof without any liability on YEA if the default persists even after three notices to the allottee to rectify the defects. Clause 5.2 is reproduced below for convenience of reference : "5.2 In case of default, the YEA shall issue notice to the Allottee giving a maximum of 30 days time to rectify the default. Not more than three such notices shall be issued and if the default persists, even after expiry of the said notices, YEA may cancel the Allotment of land and lease deeds executed thereof without any liability on YEA." 89. The provisions relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall be adjusted towards the installment or any other amount due. 4.4 SBI PLR, whereever mentioned in this letter, shall be taken as applicable on the due date of payment." 91. The allottee was required to execute lease deed and take physical possession within ninety days from the date of issue of the allotment letter. The date of execution of lease deed was to be treated as the date of handing over of actual possession of the land. Clause 7 laid down the mechanism for preparation of DPR by the allottee which is as follows: "7. Detailed Project Report: 7.1 The Allottee shall prepare and submit a detailed project report (DPR) of the Project to the YEA within a period of 6 months from the date of issue of this allotment letter which may be suitably extended by YEA if circumstances so desire. The report shall comprise details of the proposed Core Activity, land use, implementation schedule and financial arrangements etc. 7.2 However, since the land has to be transferred to the Allottee in parts, therefore, a concept plan for the complete site shall be submitted and detailed plan for the part land being handed over to the Allottee shall be submitted within six months fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctares land in Village- Salarpur, Munjkheda, Fatehur Atta, Gunpura, Jaganpur, Afjalpur, Dankaur and Aurangpur in Tehsil Sadar, District Gautam Budh Nagar (U.P.) for a period of 90 years on lease at premium of Rs. 941.86 per sq.m. excluding External Development charges plus lease rent @ 2.5% per annum of premium. 3. The Lessor in part discharge of its obligations under the said Allotment Letter, hereby agrees to provide on lease and the Lessee hereby agrees to take on lease, 175.3639 hectares of land in Village Gunpura, Tehsil Sadar, Distt. Gautam Budh Nagar (U.P.) (Hereinafter referred to as the Demised Land) for development of SDZ, more particularly detailed in SCHEDULE-II attached hereto, on terms and conditions contained in these presents." 97. The details of demised land are mentioned in Schedule-II and the payment of premium was to be made in accordance with the provision contained in this behalf in the Allotment Letter dated 20.03.2009. Clause-3 which relates to the manner in which premium was to be paid is as follows: "(3) During the term of the lease, the Lessee shall pay to the Lessor lease rent @ 2.5% of premium per annum in advance (the "Rent Amount") commencing fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract: 100. The essential feature of any binding contract is the meeting of minds i.e., consensus ad idem. How the parties acted pursuant to the contract is a significant indicia to their common understanding of the contract. It thus constitutes an important tool in interpretation of the terms of the contract. The Supreme Court in Transmission Corporation of Andhra Pradesh Limited Vs. GMR Vemagiri Power General Ltd.: (2018) 3 SCC 716, held that the real intendment of the parties to a contract has to be gathered from the manner in which the parties understood the same and for that purpose the correspondence exchanged between them could be taken into consideration. The relevant portion of the judgement is extracted below:- "25. In the facts and circumstances of the present case, there can be no manner of doubt that the parties by their conduct and dealings right up to the institution of proceedings by the respondent before the Commission were clear in their understanding that RLNG was not to be included within the term "Natural Gas" under the PPA. The observations in Gedela Satchidananda Murthy [Gedela Satchidananda Murthy v. Commr., Deptt. of Endowments, (2007) 5 SCC 677] are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted by the authority at the request of petitioner is as follows:- S. No. Date of the Petitioner's request Date of grant of extension 1. 18 February 2014 21 February 2014 @ Pg. 21, the Authority's reply to the Petitioner's 6th Supp. Affidavit 2. 07 August 2014 13 August 2014 @ Pg. 22, the Authority's reply to the Petitioner's 6th Supp. Affidavit 3. 01 December 2014 29 December 2014 @ Pg. 23, the Authority's reply to the Petitioner's 6th Supp. Affidavit 103. Again there was similar provision for payment of additional interest on defaulted amount vide Clause 4.1 in the allotment letters. To wit - "In case of default, the YEA shall issue notice to the Allottee giving a maximum of 30 days time to rectify the default. Not more than three such notices shall be issued and if the default persists, even after expiry of the said notices, YEA may cancel the Allotment of land and lease deeds executed thereof without any liability on YEA." 104. The petitioner applied for re-schedulement of overdue amounts and installments falling due till terminal date vide letters dated 08.03.2018 and 12.04.2018. Therein, the petitioner itself relied on various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -enter; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; [or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event]; and in [any of these cases] the lessor or his transferee [gives notice in writing to the lessee of] his intention to determine the lease; (h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other." 107. Clause (g) inter alia invests the lessor with power of forfeiture in case of breach of an express condition which provides that, on breach thereof, the lessor may re-enter. The right of forfeiture is to be exercised by giving notice in writing to the lessee of his intention to determine the lease. 108. In the instant case, both the allotment letters and lease deeds were executed by YEA in favour of the petitioner in exercise of powers conferred by Section 7 of the U.P. Industrial Area Development Act, 1976 (the Act, 1976), which is as follows: - "7. Power to the Authority in respect of transfer of land. - The Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut where the grant of lease is governed by a statute or statutory regulations, and if such statute expressly reserves the power of cancellation or revocation to the lessor, it will be permissible for an authority, as the lessor, to cancel a duly executed and registered lease deed, even if possession has been delivered, on the specific grounds of cancellation provided in the statute. 31. Noida Authority is an authority constituted for the development of an industrial and urban township (also known as Noida) in Uttar Pradesh under the provisions of the Act. Section 7 empowers the Authority to sell, lease or otherwise transfer whether by auction, allotment or otherwise, any land or building belonging to it in the industrial development area, on such terms and conditions as it may think fit to impose, on such terms and conditions and subject to any rules that may be made. 32. Section 14 provides for forfeiture for breach of conditions of transfer. The said section empowers the Chief Executive Officer of the Authority to resume a site or building which had been transferred by the Authority and forfeit the whole or part of the money paid in regard to such transfer, in the following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tency. Hence, even assuming that any provision of the Transfer of Property Act was violated that would still not help the plaintiff- respondent as in our opinion the action of NOIDA was clearly in accordance with section 14 of the U.P. Industrial Area Development Act, 1976, which Act is a special law for NOIDA area and will prevail over the provisions of the Transfer of Property Act." (emphasis supplied) 113. The power under Section 14 of the Act, 1976 is not confined to transfer by lease only. It also applies to transfer by other modes contemplated under Section 7 of the Act, 1976, i.e., sale, auction, allotment or otherwise. Therefore, the legislation has not provided any specific procedure for exercise of the power of resumption of the site or building (except implicit requirement of compliance of the principles of natural justice) unlike Section 111(g) of the Transfer of Property Act, 1882. All that is required is that the order should reveal that the building site is being resumed for breach of any express condition of the lease/transfer. 114. The impugned order, not once, but at several places, mentions about breach of conditions of the lease, and the consequent action to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer conferred upon the Authority by Section 14 of the Act, 1976. 116. A.P. Industrial Infrastructure Corporation Limited (supra), on which great emphasis has been placed by learned Senior Counsel for the petitioner, is clearly distinguishable. Therein, the appellant-Corporation allotted industrial plots for construction of transport office and godown to the respondents. Clause 17 of the Allotment Orders provided that within two years from the date of 'final allotment and taking possession of the land/plot/shed, the project is not implemented, the allotment will be cancelled'. The allotment was followed by the sale agreements during which period, the appellant-Corporation received full sale consideration for the plot and, thereafter, executed sale deeds in favour of the respondents and wherein there was no such stipulation. Almost six years after execution of the sale deeds, the appellant-Corporation issued show101 cause notices seeking explanation with regard to alleged failure on part of the respondents in utilizing the land for the purpose of godowns. On 20.01.2006, the appellant-Corporation itself approved building plans and in pursuance whereof the respondents commence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition was repelled. The prominent distinguishable feature is that, in the said case, there was conferment of absolute ownership in favour of the respondents with execution of the sale deeds in their favour after accepting the full sale consideration and there was no condition 'super added' in the sale deeds that construction would be completed in two years. In substance, it was held that the appellant had no right to cancel the sale, as the allotment orders would not survive. Thus, the Supreme Court noted in the judgement that :- "15. We do not find any merit in any of the aforesaid arguments. In the first instance, it needs to be emphasised that there is no such condition of completion of construction within a period of two years in the sale deed. Such a condition was only in the allotment letter. However, after the said allotment, the appellant Corporation not only received entire consideration but executed the sale deeds as well. In the sale deeds no such condition was stipulated. Therefore, the High Court is right in holding that after the sale of the property by the appellant Corporation to the respondents, whereby the respondents acquired absolute marketable tit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g under him: Provided that property may be transferred to or for the benefit of a women (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same for her beneficial interest therein. 11. Restriction repugnant to interest created .- Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. Where any such direction has been made in respect of one piece of immovable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof." 17. Section 55 of the Act deals with rights and liabilities of buyer and seller. As per this provision, when the buyer discharges obligations and seller passes/conveys the ownership of the property, the contract is conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was repelled, according to us, rightly because the deed of conveyance had not created any absolute interest in favour of the allottee in respect of the plot conveyed. For a transferee to deal with interest in the property transferred "as if there were no such direction" regarding the particular manner of enjoyment of the property, the instrument of transfer should evidence that an absolute interest in favour of the transferee has been created. This is clearly discernible from Section 11 of the TP Act. The section rests on a principle that any condition which is repugnant to the interest created is void and when property is transferred absolutely, it must be done with all its legal incidents. That apart, Section 31 of the TP Act is enough to meet the aforesaid contention. The section provides that- 'on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen.' Illustration (b) to the section makes the position clear, and it reads: '(b) A transfers a farm to B, provided that, if B shall not go to En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable. Moreover, it was a case based on sole interpretation of the terms of contract. In the instant case, as already discussed, the respondent-Corporation, even independent of Clause 4.2 of the Allotment letter, continued to have power to cancel the lease in view of Clause 38 of the lease deed which saved all rights conferred on YEA under any law for the time being in force including Section 14 of the Act, 1976. The statutory power under Section 14 to resume the site was not whittled down in any manner. The judgment in A.P. Industrial Infrastructure Corporation Limited (supra), is distinguishable and would be of no help to the petitioner. (D) Findings: 119. Issue nos. 2 and 3 are answered by holding that the allotment letters existed for limited purposes alongwith the lease deeds and, irrespective of Clause 4.2 of the Allotment letters, the YEA had the power to resume the site by virtue of Section 14 of UPIAD Act, independent of, and read with Clause 38 of the lease deeds. The impugned order, thus, has the effect of cancelling the lease deeds. Issue No.4: Whether the petitioner's earlier Writ C- 47262/2017 challenging the decision taken by the respondent in its meeting da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire lease was inappropriate, unreasonable and violative of Article 14 of the Constitution and YEA should have taken least restrictive measures to recover its dues. Thus, it could have exercised power under Clause 38 of the lease which permitted YEA to recover its dues as arrears of land revenue. It would have subserved the ultimate purpose of recovering public money, while at the same time, causing minimal harm to JAL, the homebuyer and the financial institutions. 124. Elaborating the submission, it was urged that the lease deeds gave the petitioner the unfettered right to create third party rights including the power to sub-lease without permission of the Lessor i.e. the respondent No. 2; the permission to mortgage in favour of banks/financial institutions/lenders, etc.; it also gave the power to develop the land and the petitioner has spent a large amount of money in excess of Rs. 2,500 crores in developing the whole SDZ land including construction of the Formula One Racetrack (Buddha International Circuit); moreover, around the date of cancellation order, the petitioner had paid an amount of Rs. 2294.49 crores (including interest) against allotment amount of Rs. 1659.25 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Meeting dated 04.09.2017. The same was also informed to the petitioner. The petitioner challenged the said decision before this Hon'ble Court in the connected Writ Petition No. 47262 of 2017 raising a specific ground that the Authority's said decision cannot override the terms and conditions of the Allotment Letter, Reservation Letter and the Lease Deeds and the Authority has no right under the Lease Deeds to take back lands belonging to the petitioner. The petitioner has also disputed the taking back of the proportionate land by letter dated 03.11.2017. In this backdrop and under these circumstances, the Re-Schedulement Plan of the dues was agreed in the 62nd Board Meeting of the Authority and communicated to the petitioner on 28.05.2018. However, the petitioner, even failed to make payment of the first and second installments of the Re-Schedulement letter. It is clear that after having challenged the decision of taking back of the proportionate land in the connected Writ Petition No. 47262/2017, the petitioner is making contrary submissions in the present Writ Petition. (A) PROPORTIONALITY: (i) Precedents: 126. In Teri Oats Estates (P) Ltd., on which much emphasis has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of values of the judges participating in the decision should play an important part, and limit to their interference with legislative judgment in such cases can only be dictated by their sense of responsibility and self- restraint and the sobering reflection that the Constitution is meant not only for people of their way of thinking but for all, and that the majority of the elected representatives of the people have, in authorizing the imposition of the restrictions, considered them to be reasonable." 48. The principle started gaining momentum in other countries and it was applied and developed in England as noticed by Lord Diplock in R. v. Secy. of State for the Home Deptt., ex p Brind. This Court in Tata Cellular v. Union of India while opining in concurrence with the judgment of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service that the extent of judicial review should ordinarily be limited to illegality, irrationality and procedural impropriety, observed that they are only the broad grounds but did not rule out addition of further grounds in the course of time and also noticed "Brind". 49. Ever since 1952, the principle of proportional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or infringement of rights or interests and a manifest imbalance of relevant considerations." (emphasis supplied) 128. In Modern Dental College and Research Centre and Others v. State of M.P. and Others, (2016) 7 SCC 353, the Constitution Bench of Supreme Court applied the doctrine of proportionality to ascertain the reasonableness of the restrictions imposed by legislation. The relevant portion, is extracted - "63. In this direction, the next question that arises is as to what criteria is to be adopted for a proper balance between the two facets viz. the rights and limitations imposed upon it by a statute. Here comes the concept of "proportionality", which is a proper criterion. To put it pithily, when a law limits a constitutional right, such a limitation is constitutional if it is proportional. The law imposing restrictions will be treated as proportional if it is meant to achieve a proper purpose, and if the measures taken to achieve such a purpose are rationally connected to the purpose, and such measures are necessary. This essence of doctrine of proportionality is beautifully captured by Dickson, C.J. of Canada in R. v. Oakes, in the following words (at p. 138): "To est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be arbitrary or of an excessive nature beyond what is required in the interests of public. Further, in order to be reasonable, the restriction must have a reasonable relation to the object which the legislation seeks to achieve, and must not go in excess of that object (see P.P. Enterprises v. Union of India). At the same time, reasonableness of a restriction has to be determined in an objective manner and from the standpoint of the interests of the general public and not from the point of view of the persons upon whom the restrictions are imposed or upon abstract considerations (see Mohd. Hanif Quareshi v. State of Bihar). In M.R.F. Ltd. v. State of Kerala, this Court held that in examining the reasonableness of a statutory provision one has to keep in mind the following factors: (1) The directive principles of State policy. (2) Restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. (3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will vary from case to case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-the petitioner sought an extension for clearing its dues. In accordance with Clause 3.6 of the Allotment Letter, the Authority granted three extensions on February 21, 2014, August 13, 2014, and December 29, 2014, as a least restrictive measure. Despite this, the petitioner failed to make timely payments. (c) Rescheduling of Dues: As of March 31, 2018, the petitioner had an outstanding balance of approximately INR 718 crores. Citing financial constraints, the petitioner requested a rescheduling of payments through letters dated August 22, 2017, March 8, 2018, and April 12, 2018. In response, the Authority agreed to a revised payment plan through a letter issued on May 28, 2018. (d) Repeated Defaults Despite Rescheduling: Even after agreeing to a rescheduled plan, the petitioner failed to make payments for the first two installments for over one and a half years. Specifically, payments for the first installment (approximately Rs. 125 crores) and the third installment (approximately Rs. 100 crores) were not made. In response, the Authority issued six additional Default Notices on October 16, 2018, December 3, 2018, December 13, 2018, August 19, 2019, October 31, 2019, and Dece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 366;रा प्रस्ताव पर विचारोपरान्त निम्न निर्णय लिये गये :- प्रस्ताव-1 जो कि विदेश बैंक के पक्ष में बन्धक - अनुमति से सम्बन्धित है को संचालक मण्डल द्वारा अस्वीकार कर दिया गया। प्रस्ताव-2 प्रस्ताव पर चर्चा के दौरान स ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46;ेक्ष समानुपातिक भूमि प्राधिकरण द्वारा जे०पी० से वापिस ली जाये। यह भी सुनिश्चित कर लिया जाये कि वापिस ली जाने वाली भूमि जे०पी० द्वारा किसी को सब-लीज, आवंटित अथवा जे०पी० द्वारा आवंटित किसी योजना का भाग न हो ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... नहीं किया जाता तो समस्त धनराशि के विपरीत समानुपातिक भूमि वापिस ले ली जाए तथा उक्त संस्तुति के साथ प्रस्ताव शासन को इस अनुरोध के साथ प्रेषित किया जाये कि शासन उक्त भूमि के निस्तारण हेतु भूमि को विक्रय कर आवæ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed by twenty more default notices upto August, 2015. 135. As per the terms of agreement between the parties apart from the amount specified towards premium and lease rent, which was payable in twenty half yearly instalments, the petitioner was also liable to pay the cost of land acquisition. It is not in dispute that consequently the petitioner was also liable to pay additional compensation, which constituted a component of the land acquisition cost. The demand in this regard was raised by YEA by letter dated 15.12.2014 for a sum of Rs. 759,19,02,236.54 and the petitioner was permitted to deposit the same in four half yearly instalments. 136. The petitioner in its affidavit dated 12.10.2023 (6th Supplementary Affidavit) disputed the amounts being claimed by YEA towards balance loan premium, lease rent, additional compensation and in paragraph-13 disclosed the amount due according to it as sum of Rs. 10,67,78,65,669. Paragraph-13 is extracted below: "13. That in view of the above submissions it is clear that the petitioner is only liable to pay a total of Rs. 10,67,78,65,669/- under the following heads: (a) Balance Land Premium as on 12.02.2020 i.e. the date of cancellation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on accounts which were classified either partly or wholly non-performing from amongst the top 500 exposures in the banking system as on 31 March 2017. As a first step, the IAC recommended all such non-performing asset accounts with fund and non-fund based outstandings exceeding Rs 5,000 crores. JIL was one of the twelve accounts in respect of which directions have been issued to banks for initiating insolvency resolution. Subsequently, the IAC recommended that in respect of those accounts where 60% or more had been classified as NPAs as on 30 June 2017, banks may be directed to implement a viable resolution plan within six months failing which the accounts may be directed for a reference under the IBC by 31 December 2017. The petitioner company was one such entity. No viable resolution plan could be found as a result of which it is also required to be referred for CIRP. The judgment also takes note of the fact that JAL was classified under the SMA - II category (demands overdue for more than 60 days) by banks as early as on 3 October 2014 and as an NPA since 31 March 2015. Further observation in the said judgment is that "The facts which have emerged before the Court from the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that most of the flats/plots were allotted by the petitioner from year 2011 onward and at the time of allotment, substantial amount of money was taken from the allottees as per terms of allotment. The petitioner undertook to deliver possession within 18 to 24 months from the date of allotment. Thus, the possession was to be given around the year 2014-15. However, even after lapse of ten years, the petitioner company had failed to complete the projects. Most of the projects have not even started of and the others are partially complete with only skeleton structure in place. The details of the projects of the petitioner company registered with Real Estate Regulatory Authority (RERA ) along with status of construction prevailing at the relevant time has been given in paragraph 10 which is as follows: Status of Projects Name of Project Project Type RERA Registration No. Original Launce Date RERA Registration Date RERA Completion Date Current Status Jaypee Greens Bougainvilleas, SDZ, YEW Large Residential Plots UPRER APRJ54 36 30-08- 2012 29-07- 2017 31-12- 2014 No Infrastructure present on this plotted development, no proper roads, no water supply, no sewage connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce then. Construction site is covered from all around but when looking inside one can see that whole site is submerged in water for a floor or two in depth and can be seen as if underground water has come out on site. Jaypee Greens Sportsville, SDZ, YEW Independent Houses UPRER APRJ5424 15-01-2015 29-07-2017 30-06-2020 No Infrastructure present on this plotted development, no proper roads, only kaccha road is built with few electric poles with no light, no water supply, no sewage connections, no parks, club or any other amenities available. Jaypee Greens Villa Expanza Country Homes-II, SDZ, Independent Houses UPRER APRJ5415 05-10-2013 29-07-2017 31-03-2020 No Infrastructure present on this plotted development, no proper roads, only kaccha road is built with few electric poles with no light, no water supply, no sewage connections, no parks, club or any other amenities available. Jaypee Greens Villa Expanza Greencrest Homes, SDZ, YEW Independent Houses UPRER APRJ5048 14-09-2013 29-07-2017 30-06-2020 No Infrastructure present on this plotted development, no proper roads, only kaccha road is built with few electric poles with no light, no water supply, no sewage c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplaints from the home buyers against the petitioner for its failure to develop the housing projects. Therefore, the YEA, while cancelling the allotment has also considered the grievance of the home buyers and cancellation order is also intended to protect the interest of the home buyers. 148. We have already noted the facts stated in the impugned cancellation order and it makes a specific reference to the default committed by the petitioner in failing to develop the SDZ project and fulfilling its obligations towards homebuyers. It also specifically mentions about various complaints received from the homebuyers and a meeting convened by the Authority between the representatives of the petitioner-Company and the Homebuyers Association. It also mentions about assurance given by the representative of the petitioner-Company to redress all the grievances of the homebuyers and take steps for completion and delivery of possession to them but that the petitioner-Company failed to abide by its commitment. 149. A close reading of the cancellation order reveals that the basic ground for cancellation was default on part of the petitioner- Company in failing to pay the dues of the Developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile deciding what action was to be taken in the facts of the instant case should be given sufficient leeway to decide what specific measure would be in larger public interest. For the said purpose, it was competent to, and had rightly, considered different aspects regarding non-development, interest of homebuyers and sub-lessees. Tests to decide proportionality: 152. In Subramanian Swamy Vs. Union of India, Ministry of Law & others, 2016(7) SCC 221, the Supreme Court has held that the test for ascertaining reasonableness in the context of the doctrine of proportionality has to be examined in an objective manner from the standpoint of the interest of general public and not from the point of view of the person upon whom the restrictions are imposed or abstract consideration. The relevant part of the judgement wherein these observations have been made is extracted below :- "When a law limits a constitutional right which many laws do, such limitation is constitutional if it is proportional. The law imposing restriction is proportional if it is meant to achieve a proper purpose, and if the measures taken to achieve such a purpose are rationally connected to the purpose, and such me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncel the allotment. 156. Teri Oats was passed in peculiar facts and circumstances of that case. The judgement itself notes that the question as to whether the extreme power of resumption and forfeiture has rightly been applied or not will be dependent upon the factual matrix obtaining in each case. Each case may, therefore, have to be viewed separately and no hard and fast rule can be laid down therefor. In the present case, the Cancellation Order has not been found to be arbitrary but a necessary response to the petitioner's material breaches, which have been well- documented through a series of notices and opportunities granted to the petitioner to comply. 157. Further, the judgment in Teri Oats has been distinguished and not relied upon by the Hon'ble Supreme Court in HUDA v. Des Raj Chawla, (2018) 16 SCC 30 (paragraph 7) which is extracted for ease of reference: "7. The learned counsel appearing on behalf of the respondents has placed reliance on the decision of this Court in Teri Oat Estates (P) Ltd. v. State (UT of Chandigarh) in which it has been laid down that the power of resumption and forfeiture of money deposited by the lessee in case of default in making du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the allotment and lease deeds, the Authority was justified in cancelling the entire allotment in public interest and as a last resort keeping in view of the purpose for which SDZ project had been set into motion. (vi) Attempts made towards amicable settlement but failed: 160. During pendency of the proceedings before this Court a proposal was submitted by the petitioner - company for revival of the project and to liquidate its liabilities towards the Authority as well as homebuyers/allottees. Several attempts were made by the Court to get the dispute resolved amicably. Initially, the Authority, pursuant to resolution dated 02.06.2021 at its 70th Board Meeting, agreed to restore the allotment subject to payment of 10% towards restoration charges. However, the petitioner did not agree to the same. It challenged the same by amendment, but at the time of hearing, no submission was made regarding the validity of the charges except that in case the cancellation is quashed, there would be no question of paying restoration charges. Vide order dated 29.09.2022, this Court again required the petitioner to disclose how it intends to revive the projects and liquidate all its liabilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 506 crores and odd being claimed towards interest on additional compensation, Sri Bhushan has urged, that demand has yet not crystalised. In fact, it has no legal basis. In absence of any liability incurred in law and in absence of any computation shown to exist, that demand may be stayed in entirety, during the pendency of writ petition. 12. As to the mode and method to deposit Rs. 2715 crores, as noted above, 150 acres of land in the Core Area has been proposed to be sold. As to the time period, after much deliberation held over the last more than three hearings, it has emerged, not less than one year time would be required to make good that deposit. Here, it may be noted, at one stage petitioner had also proposed that it may give up about 100 acres of land in the Core Area to YEIDA against the demand of Rs. 2115 crores (approximately). However, that proposal was stoutly rejected by YEIDA." (vii) Insolvency established: 161. It is not in dispute that after the impugned cancellation order was passed, the petitioner, due to its defaults, was admitted to insolvency proceedings before NCLT. The Tribunal, by order dated 03.06.2024 (Annexure no.1 to the petitioner's 8th supplem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the petitioner shall deliver a certified copy of this order to the Interim Resolution Professional forthwith. The Registry is also directed to send a certified copy of this order to the Interim Resolution Professional at his e- mail address forthwith. 105. I.A. No. 263 of 2024 is disposed off and IA No. 406 of 2023 is dismissed as infructuous accordingly. 106. List the matter on 08.07.2024 for filing of the progress report/further proceeding." 162. The petitioner challenged the order dated 03.06.2024 before the NCLAT vide Company Appeal (AT) (Insolvency) No. 1158-1162 of 2024. NCLAT dismissed the appeal by judgment dated 06.12.2024, Annexure no. 2 to Civil Misc. Application No. 77 of 2024 filed on behalf of the respondent no. 2 that was taken on record by this Court's order dated 03.01.2025 that reads as under :- "1. Application placed before us as per roster. 2. Ms. Gunjan Jadwani, appearing on behalf of the Resolution Professional, states that she does not intend to make any submission, as the order of NCLAT sought to be brought on record, is a matter of record. 3. Consequently, the application be kept on record." 163. Various Civil Appeals bearing Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not deposit remaining Rs. 50 crores by 25.03.2020 but deposited only Rs. 5 crores on 16.03.2020. Recording these facts and the undertaking give by the petitioner, this Court passed an order dated 08.02.2021 directing the petitioner to deposit Rs. 52,50,26,551/- with an observation that after such deposit, in case the petitioner moves an application for re-structuring and re- computing the dues payable by it, the same shall be considered by the respondent authority in accordance with law. The said amount was deposited. Thereafter, by order dated 29.09.2022, the petitioner was directed to deposit a sum of Rs. 100 crores. This amount was deposited by the petitioner and an affidavit dated 02.11.2022 was filed to that effect. Accordingly, the petitioner has deposited Rs. 50 crores + Rs. 5 crores + Rs. 52,50,26,551/- + Rs. 100 crores (Total Rs. 207,50,26,551/-). 169. Although, Shri Manish Goyal submits that, in the facts of the case, the amount deposited by the petitioner is liable to be forfeited by YEA, we are not inclined to accept the said submission of Sri Goyal. The reason lies in the specific language incorporated in Section 14 of the Act of 1976, which is again quoted as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning all the aspects relating to the action of the Authority. While we find no error as regards exercise of power of resumption of the site or building, we are satisfied that the second power vested in the Authority, i.e. to forfeit either whole or any part of the money deposited by the petitioner, has not been exercised by YEA. Therefore, we are of the view that the order impugned does not result in either express or implied forfeiture of the amount deposited by the petitioner so far. As a corollary to the same, the Authority shall be obliged to refund to JAL the money received by it till the time lease was cancelled, except to the extent permitted vide paragraph 187(D). 171. As insolvency of YEA has been admitted and proceedings as per IBC are pending before NCLT, therefore, we are of the opinion that the entire money paid by the petitioner to YEA should be placed at the disposal of NCLT for being dealt with as per provisions of Insolvency and Bankruptcy Code, 2016 as the order passed by NCLT admitting the petitioner to insolvency process, has already been upheld by NCLAT and, then, by the Supreme Court. The amount shall be dealt with as per the directions of Resolution Professi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree from the legal encumbrance, the following options are available for rehabilitation of the entire project including the incomplete group housing project undertaken by the Petitioner (not sub-lessees, whose rights remain protected under the Cancellation Order). 13. One option is to re-auction the whole land including the group housing projects inter alia with the following conditions: i. the bidder shall pay the outstanding dues of the Respondent Authority as on the date of submission of the bid; and, ii. the bidder shall be required to complete the incomplete housing projects of the homebuyers on priority basis and deliver the units booked/allotted to them expeditiously on the same terms and conditions already entered by homebuyers with the Petitioner. 14. Given the appreciation in the value of land, the project will not only be viable, but it will also be economically lucrative to prospective bidders. Such rehabilitation will ensure that the homeowners in the group housing projects receive their housing units as expeditiously as possible, and the project is developed anew. 15. Alternatively, the other option for the Respondent Authority is to undertake the development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebuyers also participated. Thereafter, the Vice President of JPSCWS sent an e-mail (dated 25.8.2024), reflecting the sentiments of the homebuyers and on that basis submissions have been made. 175. Undoubtedly, the homebuyers are one of the major stakeholders in the present dispute. In fact, the main ground which impelled YEA to resort to the extreme step of resumption of the leased land is inordinate delay on part of JAL in abiding by the timelines prescribed for completing the constructions, resulting in immense difficulties to the homebuyers. Further, as noted, YEA has also filed affidavit reiterating its commitment to safeguard the interest of the homebuyers and the steps it would take in this respect. It is therefore necessary to issue directions to ensure that YEA fulfills its commitment and interest of the allottees/homebuyers is protected. 176. The first concern, as noted above, is regarding timely completion of the housing projects. As per pleadings in Writ - C No. 21532 of 2021, JAL was under obligation to deliver the flats/plots to the allottees within 18 - 24 months from the date of allotment. It was around the year 2014 - 2015. Almost five years has elapsed since then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebuyers. The homebuyers will be at liberty to raise grievance regarding the same before him and it shall be decided within four weeks from the date the dispute in writing is received. While taking decision, the Nodal Officer shall have regard to the terms of allotment/agreement and other relevant factors and the documents/records maintained in this regard by JAL or those filed by the allottee. 176(f). For timely execution and completion of the housing projects, YEA shall at all times make available necessary funds irrespective of the sum collected by it from the allottees. This direction is being issued keeping in mind the own stand of YEA that the value of land has appreciated several times and the housing projects would be economically lucrative and viable. 176(g). Any claim of homebuyers against JAL coming within the purview of pending insolvency proceedings before NCLT, including recovery of any sum from JAL in pursuance of any order or direction against JAL will remain protected. 176(h). Any right or remedy available to the homebuyers under the Real Estate (Regulation and Development) Act, 2016 and the Consumer Protection Act, 2019, or under any other law, shall also remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long as the dues are regularly and timely paid to the Respondent Authority, thus ensuring continuation of sub-leases. 8. The sub-lessees' interests under the sub-lease are thus fully protected and they will be able to enjoy the same without any disruption so long as they continue to comply with the obligations under the sub-lease and also those under the relevant lease with the Respondent Authority under which the sub-lease has been granted, so far as they are applicable to them. This is evident from the correspondence with the sub-lessees. By way of illustration, the correspondence with one such sub-lessee is annexed herewith as Annexure 1. 9. After passing of the Cancellation Order, the sub-lessees have been making payments directly to the Authority, and their sub-leases have not been cancelled." 177(a). Protection of the rights of sub-lessees of JAL is possible only when YEA recognises them as its lessees. For said purpose, YEA shall have to enter into lease agreement with the sub-lessees. Undoubtedly, the terms and conditions should be the same, as between JAL and the sub-lessees subject to right of YEA to recover its dues. As a necessary corollary to the above exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter as "Consortium of Lenders"), which were allowed vide different orders. 179(a). It may be noted that Axis Bank and Standard Chartered Bank have also filed impleadment applications on behalf of their respective consortiums and have also been impleaded in the Writ Petition. 179(b). It has been submitted on behalf of the Consortium of Lenders/Financial Institutions that in order to arrange funds for the purpose of, inter alia, meeting the cost of development and operation of the sports infrastructure project of JAL and payment of other liabilities owed by JAL, JAL approached multiple lenders, including ICICI Bank and the Consortium of Lenders, which extended multiple credit facilities to JAL. The credit facilities were secured inter alia: (a) in case of ICICI Bank as the sole lender, by an exclusive mortgage/charge over a part of the leasehold property to the extent of 25 acres, in favour of IDBI Trusteeship Services Limited (acting as Security Trustee to ICICI Bank), vide a deed of mortgage dated July 07, 2014. The land parcels admeasuring 23.5 acres were subsequently released by the security trustee (IDBI Trusteeship Services Limited) in favour of JAL vide a deed of re-conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to carry out construction work on the lands sub-leased under the Sub- Lease Deeds, by obtaining the map approvals for the same. While ICICI Bank has made detailed representations in reply to the YEIDA Letters, narrating the challenges in undertaking the construction/ obtaining map approvals, till date ICICI Bank has not received any response/acknowledgement to the response to YEA Letters. 179(g). It is contended that YEA, while it has made submissions on record to protect the interest of sub-lessees, in complete contravention to the same, it has also issued letters threatening to cancel the rights of financial institutions under the Sub-Lease Deeds. Therefore it is submitted that YEA should not be permitted to act in such high- handed manner. 179(h). On the other hand, Shri Manish Goyal, learned Senior Counsel for YEA submitted that JAL being the principal debtor is liable for the loans given by the financial institutions to it. The financial institutions had and will continue to have right to recourse against JAL, the principal debtor, and financial institutions will be entitled to recover their outstanding loans from it. Moreover, JAL besides the leasehold interest in the lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in the lease deeds of the said land in time and in case project financing from bank/financial institutions in the said land contains the cost of land then period payments to the authority shall be made before entering into the mortgage deed and or utilizing this mortgage permission, otherwise authority shall be free to take actions considering as a defaulter in payment as stipulated in the lease deed to recover such amounts." 182. The main crux of the argument of learned counsel appearing on behalf of the Financial Institutions and Consortium of Lenders is that the lease, if cancelled, would result in great prejudice to the Financial Institutions. Learned counsel do not dispute that the security interest of the Financial Institutions in the land would come to end by operation of law consequent upon resumption of the site. The same is also admitted in paragraph 32 of the writ petition filed by Suraksha Asset Reconstruction Co. Ltd. (Writ-C No. 8909 of 2021). Thus, the remedy of the Financial Institutions would be against the principal borrower as provided by Section 68 of the Transfer of Property Act, 1882. Further, in view of insolvency proceedings before NCLT, we refrain fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of sub-leases in favour of the financial institutions :- (a) Sub-leases in favour of the financial institutions will stand protected in terms of the impugned order. (b) YEA in order to give effect to its commitment that sub-leases would not get affected, would give option to the financial institutions to obtain lease on same terms and conditions, as between the financial institutions and YEA in their own favour or in favour of their assignee, subject to its right of recovery of dues. (c) The documentation work shall be completed within four weeks from the date, request is made in this behalf by the Financial Institutions for which the outer limit would be twelve weeks from the date of the passing of the instant order. (d) YEA would be entitled to retain sum realized from JAL till the passing of the cancellation order on pro-rata basis. Further Directions: 186. The following amounts shall, within six weeks, be returned by YEA to JAL by transferring the same to the account of RP appointed by NCLT. (1) Any amount deposited by JAL in pursuance of orders passed in the present litigation along with the prevailing interest (SBI PLR) from the date of deposit till the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin four weeks, appoint a Nodal Officer, who should be a gazetted officer (or equivalent) to decide any issue regarding remaining amount payable by homebuyers. The homebuyers will be at liberty to raise grievance regarding the same before him and it shall be decided within four weeks from the date the dispute in writing is received. While taking decision, the Nodal Officer shall have regard to the terms of allotment/agreement and other relevant factors and the documents/records maintained in this regard by JAL or those filed by the allottee. (f) For timely execution and completion of the housing projects, YEA shall at all times make available necessary funds irrespective of the sum collected by it from the allottees. This direction is being issued keeping in mind the own stand of YEA that the value of land has appreciated several times and the housing projects would be economically lucrative and viable. (g) Any claim of homebuyers against JAL coming within the purview of pending insolvency proceedings before NCLT, including recovery of any sum from JAL in pursuance of any order or direction against JAL will remain protected. (h) Any right or remedy available to the homebuyer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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