JUDGMENT M. Katju, J.
1. Heard learned counsel for the parties.
2. The petitioner is a registered housing co-operative society registered under the U.P. Cooperative Societies Act, 1965 having 275 members. Between 27.11.1990 to 17.12.1991 the petitioner society purchased land in village Suthiana, Jalpura in pargana and tehsil Dadri, district Ghaziabad (now Gautam Budh Nagar) for residential purposes of its members from the residents of the said area, and thereafter the land purchased by the society was mutated in its name.
3. On 28.1.1991 the State Government under Section 2 (d) read with Section 3 of the U.P. Industrial Area Development Act, 1976, has notified the area mentioned in the Schedule to the Act as Greater Noida. True copy of the notification is Annexure-1 to the petition. Since the land purchased by the petitioner was in the Greater NOIDA area, the petitioner submitted a layout plan for approval of necessary permission to Greater NOIDA vide its letter dated 27.8.1991 but the said letter was neither replied nor the layout plan was approved by the respondents.
4. In para 6 of the petition it is alleged that thereafter the society approached the respondents regarding its prayer for permission and approval of layout plan submitted by it. The respondents informed the petitioner that if it gives its land to the respondents, the respondents will allot 40% of the total land to the members of the society after charging Rs. 640 p/sqm. as development charges. The society agreed to this and thereafter on 22.3.1994 a Memorandum of Understanding was executed between the petitioner and the respondents vide Annexure-2 to the petition.
5. It is alleged in para 7 of the petition that before execution of the Memorandum of understanding the respondents asked the petitioner to fulfil all the formalities, and the petitioner fulfilled the same to the entire satisfaction of the respondents including submission of documents regarding the land and after having been fully satisfied, the respondents executed the aforesaid Memorandum of Understanding with the petitioner society on 22.3.1994.
6. According to the Memorandum of Understanding 10% initial development charges was to be paid by each member of the society through the society to the respondents, and accordingly 243 members submitted 10% development charges to the respondents through the society. The total amount submitted through the society towards 10% development charges to the respondents was Rs. 99,55,834. After receiving the same the respondents issued allotment letters to 157 members of the petitioner but the other members are yet to be issued allotment letters. A true copy of the list of the members of the petitioner society who have been allotted plots vide letter dated 11.12.1995 is Annexure-3 to the petition.
7. According to the Memorandum of Understanding, the society handed over the physical possession of its land to the representative of the respondents on 25.4.1996. On 27.7.1996 the respondents issued a show cause notice to the petitioner stating that the society has not transferred its land according to the Memorandum of Understanding and the petitioner was asked to show cause why the Memorandum of Understanding be not treated as cancelled. A true copy of the notice dated 27.7.1996 is Annexure-4 to the petition. The petitioner sent a reply dated 16.9.1996 to the said show cause notice stating that it had performed its part and was ready to discharge its obligation and, therefore, there is no question of cancelling the Memorandum of Understanding. A true copy of the reply is Annexure-5 to the petition.
8. It is alleged in para 13 of the petition that the petitioner thereafter approached the respondents several times and requested them to hand over the physical possession of plots allotted to the members of the petitioner society but the respondents paid no heed. Suddenly the impugned order dated 12.6.2000 (Annexure-6 to the petition) was passed stating that the petitioner had been allotted 18,604 sq.m. residential land. Out of the society's land 3.06 acres land had been acquired before creation of Greater NOIDA, but the said land is situated on western side of Hindon river and the said land is under consideration to be notified for NOIDA at Government level, and hence the said land is no longer useful for Greater NOIDA. It was also stated in the impugned order that besides the aforesaid land, 8.91 acres of the petitioner's land had been purchased after creation of Greater NOIDA and the Board had not given its permission for exchange of the said land. It was stated that the members who have been allotted 3.06 acres of land, which was purchased before creation of Greater NOIDA, will have to deposit the price of land fixed by Greater NOIDA with 18% interest. The other members may take their money back along with 6% simple interest vide Annexure-6 to the petition.
9. After receiving the order dated 12.6.2000 the petitioner made a representation on 22.6.2000 stating that the action of the respondents is not only illegal and unjustified but unworthy of a reputed authority like Greater NOIDA. True copy of the representation is Annexure-7 to the writ petition.
10. It is alleged in para 16 of the petition that the impugned order dated 12.6.2000 was passed without giving any show cause notice or opportunity of hearing to the petitioner. It is alleged in para 17 that the respondents made an offer for exchange of land and a Memorandum of Understanding dated 22.3.1994 has been executed between the petitioner and the respondents, and the petitioner had completed all the formalities regarding transfer of the land in favour of the respondents. Hence the respondents cannot resile from its promise. The petitioner had already handed over the plot and after such allotment the respondent cannot be permitted to return the amount with 6% interest. It is alleged that members of the petitioner are legally entitled to get the plots allotted to them in Sector 36 of Greater NOIDA, but the respondents is illegally and arbitrarily not giving physical possession to the members of the petitioner.
11. A counter-affidavit has been filed by the Greater NOIDA, and we have perused the same.
12. It is stated in para 3 of the counter-affidavit that the petition is not maintainable as the petitioner is seeking to enforce a contractual right. In para 6 it is stated that on 29.7,1992 a meeting of the Board of Greater NOIDA was held and a decision was taken that only those cooperative societies which were registered prior to 28.1.1991 and which had purchased the land within the notified area of Greater NOIDA before that date would be entitled to allotment of 40% of the said land. Another resolution was passed on 20.2.1993 vide Annexure-1. A decision had been taken to exchange the plots which had been purchased by the cooperative housing societies prior to 28.1.1991. Thereafter the resolution dated 15.5.1993 was passed for such exchange on deposit of development charges at the rate of Rs. 640 per square metre vide Annexure-2.
13. In para 9 of the counter-affidavit it is stated that the notice dated 27.7.1996 was rightly issued as transfer of the land had not been effected by the society in favour of the respondents. It is also denied that physical possession of the land was handed over to the respondents. Since the petitioner had not executed any sale deed in favour of the respondents the question of handing over physical possession of any plot to the members of the society did not arise. In para 12 it is stated that a policy decision had been taken that only those plots which have been purchased by the society prior to 28.1.1991 would be entitled to the benefit of exchange and such benefit will not be available for transactions, which took place after 28.1.1991. As regards the area of 3.06 acres situated towards west of the Hindon river, steps have already been taken for notifying the same for NOIDA and the matter is pending for consideration before the State Government.
14. In para 15 it is stated that a Memorandum of Understanding is merely an agreement and there is no concluded contract between the parties. If the petitioner is aggrieved by any action it should approach the civil court for remedy.
15. In para 16 it is stated that only those societies which have been registered prior to 28.1.1991 and who have purchased the land prior to that date would be entitled to the benefit of exchange and allotment of plots. Since a major area had been purchased by the petitioner subsequent to the aforesaid date, it cannot claim any right on the basis of the Memorandum of Understanding. In para 18 it is stated that since the petitioner has not transferred the plot in favour of the respondent No. 1 by execution of a sale deed, no right whatsoever has accrued in its favour. Hence the impugned order is valid.
16. A rejoinder-affidavit has also been filed.
17. In para 5 it is stated that the public notice issued by Greater NOIDA advertising the exchange scheme only stated that societies registered prior to 28.1.1991 would be eligible for the same. The petitioner society, having been registered prior to 28.1.1991 was thus fully eligible. A perusal of Annexure-CA. 2 clearly shows that some societies were short listed after perusal of all relevant documents and the petitioner society was also short listed for the exchange scheme after verification and examination of the registration certificate, the sale deeds, etc. Some members were allotted land and the respondents have accepted 10% development charges from the petitioner society after verification of the relevant documents. The respondents had full knowledge that certain land belonging to the petitioner society was situated on western side of Hindon river. It is alleged that evidently the requirement of land for purchase by the society prior to 28.1.1991 had been waived by the respondents or had been withdrawn at the time of public notice published in 1994 in 'Rashtriya Sahara' or the same was not a necessary criterion for allotment.
18. At any event, the Memorandum of Understanding dated 22.3.1994 does not mention that the land should have been purchased by the society prior to 28.1.1991. In para 9 of the rejoinder-affidavit it is stated that there was no such condition in the Memorandum of Understanding that the land should have been purchased prior to 28.1.1991. It is alleged that the land was surrendered by the society under the exchange scheme. In its reply dated 16.9.1996 (Annexure-5 to the petition), the petitioner has clearly stated in paragraphs 3 and 6 that land was handed over by the society to Greater NOIDA and a certificate in this regard was issued by the Patwari concerned at the relevant time. The said land was free from all encumbrances. In para 6 of the said letter dated 16.9.1996 it is stated that after signing of Memorandum of Understanding dated 22.3.1994 with the society and physically taking over the said land Greater NOIDA has erected its signboard on these lands stating that this land belongs to Greater NOIDA.
19. In our opinion, this writ petition deserves to be allowed. The respondents cannot be allowed to resile from the Memorandum of Understanding executed on 22.3.1994. Annexure-2 to the petition. This Memorandum itself states that It is an agreement between Greater NOIDA and the petitioner society. In our opinion, the Memorandum of Understanding amounts to a contract between the parties as there is offer, acceptance and consideration. As regards a contract between two private parties, no doubt writ is not the appropriate remedy for its enforcement, but the position is different when one of the parties is the Government or an instrumentality of the State. Where one of the parties to a contract is the Government or an instrumentality of the State, then Article 14 of the Constitution will apply vide Shrilekha Vidyarthi v. State of U.P., AIR 1991 SC 537. In Shrilekha Vidyarthi's case (supra), the Supreme Court observed (vide para 22) :
"There is an obvious difference in the contacts between private parties and contracts to which the State is a party. Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligation 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. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional 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."
20. We may now consider what precisely has been mentioned in the Memorandum of Understanding dated 22.3.1994 copy of which is Annexure-2 to the petition.
21. Right at the beginning of this Memorandum of Understanding, it is mentioned that the society owns land measuring 11.975 acres in village Suthiana, Pargana and Tehsil Dadar, district Ghaziabad and it has offered to exchange its land with the developed plots of Greater NOIDA to which Greater NOIDA has agreed. Thereafter the terms of the agreement have been mentioned.
22. The very first paragraph of the Memorandum states that Grater NOIDA shall allot 40% land as residential plots to the society in various sizes of plots in lieu of the total land, which is to be transferred to Greater NOIDA subject to payment of development charges. The manner of payment is then mentioned.
23. Clause 7 of the Memorandum states that the society shall hand over the vacant possession of its land detailed in Annexure-1 free from all encumbrances. Possession shall be delivered to Greater NOIDA before possession of the developed plots is delivered to the society or its members. Clause 8 states that during the period possession of the land remains with the society and has not been taken over by Greater NOIDA, there will be no financial liability on Greater NOIDA in respect of the land of the society. Clause 11 states that the society has to furnish a list of members, legally enrolled within 30 days to the Greater NOIDA. It has also to furnish details regarding various sizes of plots required for its members.
24. Clause 16 of the Memorandum states that the development of the sector for allotment of plots to the members of the society shall be started soon after the society deposits 10% of the development charges. The development shall be completed within 36 months from the date of such deposit. Clause 17 states that possession of the developed plot shall be delivered to the members after execution of the lease deed. Members shall be asked to execute lease deed after 3 years from the signing of the Memorandum of understanding. Clause 20 states that the allotment of plots will be given to the members on a lease of 90 years and the lease rent shall be payable in lump sum @ 10% of the premium of the plots calculated @ Rs. 850 per sq m.
25. When we compare these terms and conditions in the Memorandum of Understanding dated 22.3.1994 with the stand taken by the respondents in its counter-affidavit, we find several inconsistencies between the two. There is nothing in the Memorandum of Understanding which states that only those co-operative societies which were registered prior to 28.1.1991 or only those plots which have been purchased by the society prior to 28.1.1991 will be entitled to the benefit of the exchange. These are absolutely new terms which are not contained in the Memorandum of Understanding, and hence, we are of the opinion that they are clearly illegal. Hence, in our opinion, the decisions of the Board of Greater NOIDA on 29.7.1992 and 20.2.1993 vide Annexure-C.A. 1 to the counter-affidavit are clearly illegal.
26. It was not expected of Greater NOIDA, which is statutory body and an instrumentality of the State, to resile from the Memorandum of Understanding dated 22.3.1994 which was a solemn instrument executed between it and the petitioner. The petitioner handed over possession of its land to the Greater NOIDA and it was wholly unfair on the part of the Greater NOIDA to now go back on its promise. The petitioner not only transferred possession of its land but also paid 10% development charges, and some of its members had been allotted plots by Greater NOIDA. This Memorandum of Understanding has been actually acted upon, and Greater NOIDA cannot now be permitted to resile from it and back out of its solemn undertaking. The principles of promissory estoppel, legitimate expectation, and fair play in State action are applicable to Greater NOIDA.
27. A Division Bench judgment of this Court in Kendriya Karmchari Sehkari Grih Nirman Samiti Ltd. v. New Okhla Industrial Development Authority (NOIDA), Writ Petition No. 39842 of 2001, decided on 5.8.2003, has dealt with these principles in great detail and has considered a catena of Supreme Court decisions in this connection, and hence, we are not referring to the same again. Hence, Greater NOIDA is bound by these principles and has to fulfil its solemn obligations under the Memorandum of Understanding, copy of which is Annexure-2 to the petition.
28. In Ramana S. Shetty v. I.A. Authority of India. AIR 1979 SC 1628, the Supreme Court observed (vide para 10) :
"It is a well-settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurter in Vitarelli v. Seaton, 1959 (359) US 535 : 3 L ED (2d) 1012, wherein the learned Judge said :
"An executive agency must be rigorously held to the standard by which it professes its action to be judged................ Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed...... This, judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword."
This Court accepted the rule as valid and applicable in India in A. S. Ahluwalia v. State of Punjab, (1975) 3 SCR 82 : AIR 1975 SC 984 and in subsequent decision given in Sukhdev v. Bhagatram, (1975) 3 SCR 619 : AIR 1975 SC 1331. Mathew, J., quoted the above referred observations of Mr. Justice Frankfurter with approval, it may be noted that this rule, though supportable also as emanating from Article 14, does not rest merely on that Article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. If we turn to the judgment of Mr. Justic Frankfurter and examine it, we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution but evolved it purely as a rule of administrative law. Even in England, the recent trend in administrative law is in that direction as is evident from what is stated as pages 540-41 in Prof. Wade's Administrative Law 4th Edition. There is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law."
29. As is evident from paragraphs 3 and 6 of the letter dated 16.9.1996 from the President of the petitioner society to the General Manager (Estate), Greater NOIDA, (Annexure-5 to the writ petition), the petitioner had handed over possession of its land to the respondent and a certificate in this regard was issued by the Patwari, and Greater NOIDA has erected sign boards on the said land stating that the land belongs to Greater NOIDA. Hence, we arc of the opinion that the petitioner handed over possession of its land to Greater NOIDA.
30. As regards the statement in the impugned letter dated 12.6.2000 that 3.06 acres land of the petitioner which lay west of Hindon river was being considered by the State Government for notifying it for NOIDA, there is nothing on the record to show that the said land was notified for NOIDA or there is any such move. It is a bald averment without any basis, and hence has to be ignored.
31. For the reasons given above, this writ petition is allowed. The impugned order is quashed and a mandamus is issued to the respondents to give physical possession over the plots which have been allotted to some of the members of the petitioner, and to issue allotment letters to the rest of the members of the petitioner as per the Memorandum of Understanding dated 22.3.1994.