Present:
(Hon. Mr. Justice Amitava Lala & Hon. Mr. Justice Ashok Srivastava) Appearance:
For the Petitioner : Mr. U.K. Shandilya, & Mr. Santosh Kumar Tripathi.
For the Respondents : Mr. Ramendra Pratap Singh, Mr. Vidhu Prakash Pandey, & Mr. Ramanand Pandey, Standing Counsel.
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Amitava Lala, J.-- By means of this writ petition, the petitioner has challenged the impugned order/letter dated 15th September, 2010 issued by the respondent no. 1- Greater Noida Industrial Development Authority (hereinafter in short called as the ''authority') imposing penalty (late fees) upon the petitioner to a tune of Rs.8,40,25,980/- for not getting the lease-deed executed by 22nd October, 2008 and also 2% additional late fees in case of further delay after 21st October, 2010, as well as cancellation notice dated 17th March, 2011 issued by the authority. The petitioner further seeks direction upon the authority to register the lease-deed of the petitioner.
Briefly stated facts giving rise to the present writ petition, according to the petitioner, are that the Greater Noida Industrial Development Authority constituted under Section 3 of the Uttar Pradesh Industrial Area Development Act, 1976 (hereinafter in short called as the ''Act') comes within the definition of the ''State' as per Article 12 of the Constitution of India. In July, 2007 the authority invited sealed offers for allotment of commercial plots on ninety years' lease basis under Commercial Plot Scheme, CPS-02/07, pursuant to which the petitioner participated in the tender process. On 23rd November, 2007 the authority accepted the petitioner's letter of offer and reserved Plot No. SLC-8/G in Sector Delta-II, Greater Noida and called upon the petitioner to deposit a sum of Rs.3,79,45,520/-, as reservation-cum-acceptance money being 10% of total premium plus Rs.2,00,00,000/- already deposited, within thirty days, which the petitioner deposited on 20th December, 2007. The authority issued allotment letter dated 04th March, 2008 to the petitioner informing that a plot measuring 18,632 square meters has been allotted to it and demanded a further sum of Rs.11,58,91,040/-, being 20% of the total premium, within three months from the date of such letter i.e. 04th March, 2008. By such allotment letter the authority also informed the liability of the petitioner to pay the balance amount in instalments in accordance with the schedule mentioned in the letter. On 04th June, 2008 petitioner deposited such amount of Rs.11,58,91,040/- and requested the authority to release the lease plan and check list, so that the petitioner may take steps to get the lease-deed registered. Inviting attention to such letter of the petitioner, on 24th June, 2008 Commercial Manager of the authority wrote to General Manager (Planning) of the authority that lease plan has not been received in the Property Section and requested for making the said lease plan available expeditiously. Petitioner again by its letter dated 14th July, 2008 requested the authority to issue lease plan and check list to enable it to get the lease-deed executed, with reference to which Commercial Manager of the authority on 24th July, 2008 again wrote to the General Manager (Planning) requesting for issuance of lease plan. Ultimately, in August, 2008 petitioner received the lease plan. On 10th September, 2008 the authority intimated the petitioner that area of the plot had got reduced from 18632 square meters to 18012 square meters and accordingly, the payment plan has been altered. Thereafter, by letter dated 22nd September, 2008 the authority again informed the petitioner that since area of the allotted plot has been reduced, now the total cost of the plot will be Rs.56,01,73,200/- and further called upon the petitioner to get the lease deed executed/registered within thirty days from the date of such letter i.e. 22nd September, 2008. However, the petitioner was unable to make the payment of instalments on account of severe financial crunch arose as a sequel to the global recession. On 17th November, 2008 the authority issued a notice to the petitioner to show cause as to why allotment be not cancelled for not getting the lease deed registered within thirty days of letter dated 22nd September, 2008. To such notice, the petitioner gave its reply on 24th November, 2008 pointing out the delay on the part of the authority in giving lease plan and requesting for extension of time upto December, 2008 to get the lease deed registered. Subsequently, to combat the situation arose out of global recession, on 06th January, 2009 the Government of Uttar Pradesh framed a policy decision, whereby the Government sought to mitigate the burden of Real Estate Sector, which had been severely hit by global recession, and made certain concessions to those Real Estate Developers, who had defaulted in payment of instalments on account of recession. Pursuant to such policy, the authority by its office-order dated 12th February, 2009 laid down a detailed procedure to implement the said policy. Thereafter, the petitioner by its letter dated 09th March, 2009 sought from the authority a revised schedule of payment consistent with the said policy. Again on 21st March, 2009, petitioner requested the authority for rescheduling of premium instalments and lease rental instalments, issuance of ''No Dues Certificate' and draft of lease deed. On 14th May, 2009 the petitioner formally applied in the prescribed format for rescheduling of the instalments as per new policy and the procedure laid down therein. The Government of Uttar Pradesh amended the aforesaid policy on 25th October, 2009 and provided inter-alia for a moratorium of two years towards payment of balance instalments. In the light of such amendment of policy, the petitioner by means of its letter dated 03rd December, 2009 requested the authority for rescheduling of instalments and the moratorium of two years, and the authority vide its letter dated 17th May, 2010 allowed rescheduled instalments to the petitioner. On 09th July, 2010 the petitioner asked the authority to send a copy of the lease deed, so that lease may be got registered. Again on 28th July, 2010 the petitioner wrote to the authority asking information with regard to total outstanding payments due along with the check list to enable it to get the lease deed registered. However, the authority by the impugned letter/order dated 15th September, 2010 imposed the penalty (late fee) to a tune of Rs.8,40,25,980/- upon the petitioner for not getting the lease deed registered by 22nd October, 2008 i.e. within one month from the date of issue of check list (22nd September, 2008) and directed the petitioner to get the lease deed registered by 21st October, 2010 upon depositing such amount and also directed that in case of further default in registration thereof, the petitioner will be liable to pay an additional penalty (late fees) @ 2% per month on the total premium.
After filing of the writ petition, on 24th March, 2011 the petitioner was served with a cancellation notice dated 17th March, 2011 issued by the authority, which has also been challenged in this writ petition by way of amendment of the writ petition.
In the aforesaid factual background, the petitioner has challenged the order impugned by saying that initially delay was on the part of the authority in providing the draft lease deed and check list to the petitioner, whereas subsequently the petitioner was unable to pay the instalments and to get the ''No Dues Certificate', which is a pre-requisite for getting the lease deed registered. In further, when by virtue of policy of the State Government dated 06th January, 2009, as amended on 25th September, 2010, the terms and conditions of the original contract was changed by granting two years' moratorium on payment of instalments and rescheduling the payment of instalments, there was novation of contract and, therefore, no action could have been taken under the earlier contract. Moreover, neither the contract stipulates a penal charge at all for the delay in execution of lease deed nor does the Act stipulates any such charge, therefore, the action of the authority in levying the penal charge is ultra vires the Act, without jurisdiction, arbitrary and violative of Article 14 of the Constitution of India. To this extent, placing reliance on Section 7 of the Act, which deals with the power to the authority in respect of transfer of land, the petitioner submitted that no rule or regulation has been framed so far to regulate the said exercise of power by the authority. Hence, the parties are bound by the terms of the contract entered into between them as per the terms and conditions laid down in the notice inviting offers, but none of the conditions of notice stipulates imposition of penalty or late fee or 2% surcharge. That apart, the cancellation notice is also without jurisdiction on account of the fact that the condition relied upon therein does not appear anywhere in the brochure.
By filing counter affidavit the authority has contended before this Court that brochure of the scheme provides that commercial plot will be given on "as is where is basis". Clause-G of the brochure provides for variation in the area upto 10% either way, when Clause-W(2) reserves the right of the authority to make such additions/alterations or modifications in the terms and conditions of allotment from time to time as it may consider just or/and expedient. Allotment letter was issued in favour of the petitioner on 04th March, 2008 fixing the instalments of the amount and also by stating that the terms and conditions of the scheme will be binding on the allottee. Schedule of payment of instalments was also clearly mentioned in the allotment letter, according to which first instalment of the petitioner was due on 03rd December, 2008. However, after preparation of lease plan an area of 620 square meters was found less, hence the instalment amount of the petitioner was also adjusted. As the lease plan was not ready, finally the petitioner was informed by letter dated 22nd September, 2008 to get the lease deed executed within thirty days and it is when the petitioner has not got the lease deed executed within such period, a notice was given to the petitioner on 17th November, 2008. Thereafter, by letter dated 17th May, 2010 the authority has rescheduled the instalments of the petitioner. Further, maximum three months' time can always be extended after due payment of charges for extension of time. Moreover, as per the terms and conditions of the brochure, the authority can demand interest on the amount, in payment of which the delay has been caused by the petitioner for not getting the lease deed executed. Section 7 of the Act empowers the authority to lease out the land on the terms and conditions as the authority thinks fit. The petitioner has violated the terms and conditions of the brochure particularly Clauses-E and N, therefore, show cause notice dated 17th November, 2008 was issued to it. The petitioner by its letters dated 24th November, 2008 and 28th November, 2008 had requested the authority that since there is recession in the economy, time may be extended to get the lease deed executed upto month of December, 2008, but in December, 2008 also the petitioner could not get the lease deed executed. However, as per the brochure, for the delay and extension of time the petitioner was required to deposit 1% of the total premium. The authority has taken humanitarian view and rescheduled the instalments. The petitioner has not got the lease deed executed and instead of getting the lease deed executed, it has been writing letters to the authority. Therefore, the authority has rightly passed the order dated 15th September, 2010 against the petitioner and charged the penalty as per the terms and conditions of the brochure. The office order clearly provides that penalty should be charged for not getting the lease deed executed. This office order is not under challenge in the writ petition. As per the terms and conditions of the brochure, the authority can amend the terms and conditions of the contract. The petitioner did not got the lease deed executed within thirty days from 22nd October, 2008 nor has deposited the amount for extension of time. There is no violation of Article 14 of the Constitution. The order impugned is just, proper and in accordance with law. When the petitioner has accepted the offer, now it is for the petitioner to accept the offer as a whole or reject as a whole but the same can not be accepted or rejected in parts. At present, since the petitioner has not got the lease deed executed, it is in the category of cancellation of allotment letter. According to the authority, since the writ petition raises highly disputed question of fact and arises out of the contractual matters, the writ petition is not maintainable and is liable to be dismissed.
Mr. Ramendra Pratap Singh, learned Counsel appearing for the authority, has submitted before this Court that as per the policy, the authority charges late fee from the persons who did not get the lease deed executed. This policy has been made keeping in mind that the persons, who have been allotted plots, should be serious ones and develop the plots within specific time, as the authority is new one and it has to start the development work of the area from the works scratch. The authority is trying to develop the area, so that it can compete any of the international city of the world. Hence, these drastic measures are taken like charging of late fee for not getting the lease deed executed within time. The petitioner is guilty for not getting execution of lease deed in view of the judgement reported in 2010 (12) SCC 701 (M/s. Angel Baby Products Pvt. Ltd. Vs. New Okhla Industrial Development Authority and others). Relying upon 1999 (1) AWC 122 [Maharia Re-Surfacing and Constructions (P) Ltd. and another Vs. Greater Noida Industrial Development Authority and another] he submitted that petitioner should accept the offer as a whole or reject the same as a whole but not in parts. Placing reliance on 2008 (8) SCC 172 (Pimpri Chinchwad Municipal Corporation and others Vs. Gayatri Construction Company and another) Mr. Singh said that this writ petition is not maintainable as it relates to contractual matters. Mr. Singh further submitted that since the petitioner has an alternative remedy to approach the State Government under Section 12 of the Act read with Section 41 (3) of the Uttar Pradesh Urban Planning and Development Act, 1973 (hereinafter in short called as the ''Act, 1973'), the writ petition is not maintainable. In support of this contention, he has relied upon the judgements of the Supreme Court reported in 2008 (12) SCC 675 (State of Uttar Pradesh and another Vs. Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti and others), 2007 (2) SCC 216 (Secy., U.P. High School & Intermediate Education, Allahabad and another Vs. H.K. Lal) and Division Bench judgement of this Court dated 20th April, 2011 delivered in Civil Misc. Writ Petition No. 12164 of 2011 (Mrs. Vandana Gupta Vs. State of U.P. and another).
Learned Counsel appearing for the petitioner has contended that alternative remedy is no bar for the writ Court to entertain the writ petition in view of the judgements reported in AIR 1969 SC 556 (M/s. Baburam Prakash Chandra Maheshwari Vs. Antarim Zila Parishad now Zila Parishad, Muzaffarnagar), AIR 1971 SC 870 (Coffee Board, Bangalore Vs. Joint Commercial Tax Officer, Madras and another), AIR 1975 SC 2135 (Isha Beevi and others Vs. Tax Recovery Officer and others), AIR 1985 SC 1147 (Ram and Shyam Company Vs. State of Haryana and others), 2001 (10) SCC 740 (State of Tripura Vs. Manoranjan Chakraborty and others), 2005 (6) SCC 499 (State of H.P. And others Vs. Gujarat Ambuja Cement Ltd. and another), 2006 (2) SCALE 90 (L.K. Verma Vs. H.M.T. Ltd. & anr.), 2009 (13) SCALE 599 (Satwati Deswal Vs. State of Haryana & ors.), 2009 (14) SCC 338 [Godrej Sara Lee Limited Vs. Assistant Commissioner (AA) and another], and AIR 2010 SC 2971 (State of Maharashtra Vs. Farook Mohammed Kasim Mapkar & ors.). It has been further contended on behalf of the petitioner that such type of act, as in the present case, on the part of the governmental authorities is amenable to writ jurisdiction following the principle laid down in the judgement reported in 1998 (8) SCC 1 (Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others), wherein it has been held that alternative remedy is no bar at least in three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is violation of principles of natural justice; or (iii) where the orders of the proceedings are wholly without jurisdiction or the vires of an Act is challenged.
We have to make our position clear in connection with contractual obligations between the petitioner and the authority. Two well-celebrated judgements of the Supreme Court as reported in 1990 (3) SCC 752 : AIR 1990 SC 1031 (Mahabir Auto Stores and others Vs. Indian Oil Corporation and others) and 1994 (6) SCC 651 (Tata Cellular Vs. Union of India) are showing the pathway in this respect. In Mahabir Auto Stores (supra) it has been held by the Supreme Court that the State acts in its executive power under Article 298 of the Constitution in entering or not entering in contracts with individual parties. Article 14 of the Constitution would be applicable to those exercise of power. Therefore, the action of State organ can be checked under Article 14. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. Rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens. Even though the right of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair ply, natural justice, equality and non-discrimination. In Tata Cellular (supra) it has been held by a three Judges' Bench of the Supreme Court that the principle of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. The duty of the Court is thus to confine itself to the question of legality. Its concern should be:
(I) Whether a decision-making authority exceeded its powers?
(II) committed an error of law, (III) committed a breach of the rules of natural justice, (IV) reached a decision which no reasonable tribunal would have reached, or, (V) abused its powers.
Shortly, the grounds upon which an administrative action is subject to control by the judicial review can be classified in three categories: illegality, irrationality and procedural impropriety. Therefore, if we look into the facts of this case with the guidance of aforesaid two judgements of the Supreme Court, we shall be able to see that the facts of this case can not be ignored by the Court without due consideration of the cause.
We have to see the relevant provisions of the Act and the brochure to resolve the issue. We find from the Act that Sections 13 and 15 thereof deal with imposition of penalty. Section 13 speaks about imposition of penalty in case of default on the part of transferee in payment of any consideration money or instalment thereof or any other amount due on account of the transfer of any site or building by the authority. Section 15 deals with violation of erection of building etc. as per Section 8 of the Act, which has no manner of application in this case, therefore, there is no necessity of discussing the same. So far as terms and conditions for allotment of commercial plot under the brochure are concerned, Clause W-6 thereof provides that the registration/ allotment/ lessee will be governed by the provisions of the Act and by the rules and/or regulations made or directions issued under this Act. Clause-N of the brochure provides that in the event of failure to enter into the legal documentation and take possession, the allottee shall be liable to pay administrative charges at the rates prescribed from time to time subject to maximum extension of three months from the stipulated due date of execution of legal documents. Clause A-4 of the brochure speaks that the lease deed can be executed within one month after depositing the allotment money, whereas Clause-E(i) of the brochure says that the lease deed will have to be executed within one month from the deposit of allotment money.
In the present case, admittedly there is no dispute with regard to initial deposit of Rs.3,79,45,520/- as reservation-cum-acceptance money and thereafter allotment money of Rs.11,58,91,040/-, but no lease deed was executed in favour of the petitioner for the reason that preparation of lease plan was not made available and after making it, an area of 620 square meters was found less and accordingly, the instalment amount was directed to be adjusted. The petitioner wanted to take further time for deposit of cost of the plot of Rs.56,01,73,200/- in the rescheduled scheme on account of severe financial crunch as a sequel to the global recession, which was considered by the authority, but surprisingly at the time of execution of lease deed, the authority issued a letter to the petitioner imposing late fee charges to a tune of Rs.8,40,25,980/-. If we go by Section 13 of the Act, we shall be able to find that in case of default on the part of the transferee, the arrear amount will be recovered with further sum by way of penalty. So far as terms and conditions of the agreement are concerned, it appears that in the event of failure to enter into legal documentation and to take possession, allottee shall be liable to pay administrative charges. However, from the impugned order/letter we find that a sum of Rs. 8,40,25,980/-, which is subject matter of dispute herein, has been claimed as late fee charges. According to us, unlike other laws, the fiscal laws are very much specific in making a claim from a person because any recovery against the law will be treated to be unjust enrichment on the part of the State or the State authority. Section 7 of the Act says that the authority may sell, lease or otherwise transfer whether by auction, allotment or otherwise any land or building belonging to the authority in the industrial development area on such terms and conditions as it may, subject to any rules that may be made under this Act, think fit to impose. The specific ground of the petitioner is that there is no rule for recovery of the same. So far as intention of the petitioner is concerned, it can be safely construed that it is not merely a prospective purchaser or lessee of the land but has already invested approximately Rs. 15 crores of sum in 2007-08 without getting anything out of it. Against this background, whether the penalty/ administrative charges/ late fees will be recoverable or dispensable, is required to be determined by the State itself being the financial guardian and, as such, when by virtue of Section 12 of the Act the powers of the State Government in determining the cause as under Section 41 of the Act, 1973, as amended upto date, shall mutatis mutandis apply, it is required to be determined by such authority under such section of the Act. To show the scope and ambit of the Act in this respect, Section 41 of the Act, 1973 is quoted hereunder:
"41. Control by State Government.--(1) The Authority, the Chairman or the Vice-Chairman shall carry out such directions as may be issued to it from time to time by the State Government for the efficient administration of this Act.
(2) If in, or in connection with, the exercise of its powers and discharge of its functions by the Authority, the Chairman or the Vice Chairman under this Act any dispute arises between the Authority, the Chairman or the Vice-Chairman and the State Government the decision of the State Government on such dispute shall be final.
(3) The State Government may, at any time, either on its own motion or on application made to it in this behalf, call for the records of any case disposed of or order passed by the Authority or the Chairman for the purpose of satisfying itself as to the legality or property of any order passed or direction issued and may pass such order or issue such direction in relation thereto as it may think fit:
Provided that the State Government shall not pass an order prejudicial to any person without affording such person a reasonable opportunity of being heard.
(4) Every order of the State Government made in exercise of the powers conferred by this Act shall be final and shall not be called in question in any court."
Hence, in disposing of the writ petition, we direct the petitioner to make an appropriate application before the State Government under Section 41(3) of the Act, 1973 within a period of fifteen days from the date of obtaining certified copy of the order and if it is done, the State Government upon giving fullest opportunity of hearing will pass an appropriate order in this respect within a period of three months thereafter. However, till the date of communication of the decision to be taken by the State Government, as aforesaid, no effect or further effect in respect of imposition of penalty/ administrative charges/ late fees will be given.
Accordingly, the writ petition is disposed of, however, without any order as to costs.
(Justice Amitava Lala) I agree.
(Justice Ashok Srivastava) Dated: 06th September, 2011.
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Hon'ble Amitava Lala, J.
Hon'ble Ashok Srivastava, J.
Under the authority of the Hon'ble Chief Justice additional cause list has been printed for the purpose of delivery of judgement and the same has been delivered at 2.00 P.M. in the Court upon notice to the parties.
The writ petition is disposed of, however, without any order as to costs.
Dt./- 06.09.2011.
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For judgement and order, see order of the date passed on the separate sheets (thirteen pages).
Dt./-06.09.2011.
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