1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. OF 2008
(Arising out of SLP(C) No7722 of 2007)
Skyline Contractors Pvt. Ltd. & Anr. .Appellants
Vs.
State of U.P. & ors. ...Respondents
J U D G M E N T
ALTAMAS KABIR,J.
1. Leave granted.
2. The appellants herein filed a writ petition
before the Allahabad High Court for quashing
an order dated 21.6.2006 issued on behalf
of the New Okhla Industrial Development
Authority (hereinafter referred to as
`NOIDA’)cancelling the allotment of Plot
2
no.A-28 in Sector 62 made in favour of the
appellant.
3. Admittedly, the appellant made an
application for allotment of the aforesaid
plot measuring 8000 square meters pursuant
to an advertisement published on behalf of
the NOIDA inviting such applications and
made an initial deposit of Rs.13,20,000/-
while submitting the application. On
17.4.2003 an order of allotment was issued
in favour of the appellant whereby the
petitioner was required to deposit 25 per
cent of the premium amount in cash or by a
bank draft in favour of NOIDA within 60 days
of such allotment. It was categorically
stipulated that if the said amount was not
deposited within the time specified the
depositor’s earnest money would be forfeited
and no extension of time would be granted
for deposit of the said amount under any
circumstances. The balance 75% of the
premium amount was required to be deposited
3
by the allottee in 10 equal half-yearly
instalments along with interest at the rate
of 14% per annum on outstanding
premium. Here also, it was categorically
stipulated that no extension for payment of
instalments would be granted and if the
allottee failed to pay the instalments
within due dates the allotment would be
cancelled and the amount equivalent to 25%
of the premium would be forfeited in favour
of the NOIDA. In exceptional circumstances,
however, the Chief Executive Officer of
NOIDA was vested with the discretion to
extend the time for making deposits, which
would be subject to payment of interest @
17% per annum compounded every half yearly
on the defaulted amount for the defaulted
period.
4. As has been noticed by the High Court in its
judgment impugned in this appeal, the
appellants did not deposit any amount for a
period of two and a half years after receipt
4
of the allotment letter. The Authority wrote
to the appellant on 3.5.2005 requesting the
appellant to produce receipts of deposits,
if any, made in pursuance of the allotment
letter. Three months after receiving the
said letter the appellant started making
deposits in September 2005 and on 16.12.2005
wrote to the NOIDA asking for details with
regard to the deposit of stamp duty, etc.
for execution of the lease deed pursuant to
the allotment made in its favour. Despite
the said letter, the NOIDA cancelled the
allotment made in favour of the appellants
by its order dated 21.6.2006 on the ground
that the appellant had failed to make the
deposits as per clause 2(iv) of the Terms
and Conditions for allotment. As stated
hereinbefore, the writ petition was filed
challenging such cancellation.
5. On considering the submissions made on
behalf of the parties the High Court
rejected the plea of the appellants that
5
although the appellants had failed to
deposit the premium amount in keeping with
the terms and conditions of the allotment,
the said amount subsequently deposited by
the appellants had been duly accepted by the
NOIDA which had accordingly waived such
terms and conditions and the allotment made
in the appellant’s favour could not have
been cancelled on the ground that the same
had not been deposited in time. The High
Court also rejected the other submission
made on behalf of the appellants that the
NOIDA had acted wrongly in re-allotting the
plot in question to the Respondent No.5 at a
much cheaper rate than was demanded from the
appellants. The High Court held that having
failed to make the deposits within the time
stipulated in the allotment letter the
voluntary deposits subsequently made two and
half years after the issuance of the
allotment letter, without the approval of
the NOIDA, could not be accepted as valid
6
deposit and the appellants were not,
therefore, entitled to any relief. Certain
judgments of this Court which have been
relied upon before us by the appellants had
also been considered by the High Court which
came to the conclusion that the same were
not applicable to the facts and
circumstances of the instant case. The High
Court, therefore, held the writ petition to
be completely misconceived and dismissed the
same.
6. The same arguments as was advanced before
the High Court have also been advanced
before us with special emphasis on the
letter dated 15.5.2003 written on behalf of
the appellant to the NOIDA with reference to
the allotment letter of 17.4.2003. Referring
to the said letter, learned counsel for the
appellant submitted that it had been
mentioned therein that a modified allotment
letter would be issued to the appellants
along with a statement of account of the
7
balance amount payable on account of
typographical discrepancy in the allotment
letter, but that neither had such modified
letter been given to the appellant nor had
any statement of account been issued as
promised. It was also sought to be
highlighted that in the letter it had been
specifically mentioned that the officials of
NOIDA had refused to accept the payment on
account of some internal inquiry and/or
procedural changes being effected by NOIDA.
7. It was urged that since no reply was
received to the said letter no further
payments were made in terms of the allotment
letter till the appellants received the
letter written on behalf of the NOIDA on
3.5.2005 asking the appellants to produce
proof of deposit of the allotment amount
which was required to be deposited by
16.2.03. It was urged that once the said
letter was received, deposits were made on
6.12.2005 making up a total sum of
8
Rs.3,80,20,000/- after giving credit for
deposit of the initial amount of
Rs.13,20,000/-. It was reiterated by
counsel that having accepted the aforesaid
deposits, the NOIDA was estopped from
cancelling the allotment by its order dated
21.6.2006.
8. In support of his submission learned senior
counsel referred to several decisions of
this Court regarding the manner in which
public authorities should conduct themselves
while extending benefits to private
individuals by way of contracts and
agreements.
9. Learned counsel firstly referred to the
decision of this Court in R.K. Saxena v.
Delhi Development Authority (AIR 2002 SC
2340) where a similar set of facts were
under consideration. In the said case, after
making the initial deposit of 25 per cent of
the auctioned price, the auction purchaser
prayed for extension of time to deposit the
9
balance of 75 per cent which was required to
be paid within 60 days from the date of
issuance of the demand letter. In the said
case also the Chairman, Delhi Development
Authority, was vested with discretion to
extend the time for such payments up to a
maximum period of 180 days, subject to
payment of interest on the balance amount @
18 per cent per annum. The demand letter
for payment of the said amount was issued on
3.1.1996 but only a part thereof was
deposited on 19.2.1996 with a prayer for
further extension to make the balance
payment. Such prayer was granted and further
time was granted for the said purpose.
Pursuant to said extensions certain amounts
were deposited towards the balance 75 per
cent, but ultimately when on 2.9.1996
further extension was sought for there was
no reply to the letter though various sums
deposited thereafter were accepted by the
Authority despite the fact that such
10
deposits were made after the stipulated
time. It was also brought to the notice of
the Court that the entire balance amount had
since been paid for the plot in question.
Since, despite having accepted the delayed
payment the plot was not delivered to the
appellant, legal notices were issued on its
behalf and subsequent thereto the allotment
was cancelled and the earnest money was
forfeited. The writ petition filed in the
High Court against said cancellation of
allotment was dismissed on 29.2.2000 by the
High Court which held that after the expiry
of the period stipulated in the agreement
the allottee could not have deposited the
balance amount unilaterally without any
demand being issued to him after the
extended dates and no relief could be given
to the allottee. Learned counsel pointed out
that when the said matter was carried to
this Court, this Court held that the order
of the High Court could not be sustained
11
particularly when both the delayed payments
and the interest amount thereupon were
accepted by the respondent-authority. This
Court observed that the moment those
payments were accepted there was deemed
extension of time and that it was only one
and half years after the legal notices had
been sent to the Authority that the
allotment order was cancelled. This Court
held in the facts of that case that after
accepting the delayed payment the
respondent-authority could not have
cancelled the allotment.
10. Reliance was also placed on the decision of
this Court in Teri Oat Estates (P) Limited
v. U.T. Chandigarh and another [(2004) 2 SCC
130] where the concept of disproportionate
action was applied in a similar case where
the lessee defaulted/delayed in payment of
instalments of premium, interest thereon and
ground rent in terms of the letter of
allotment but it was found that the same had
12
been occasioned due to a situation beyond
the control of the lessee and not on account
of any wilful or dishonest intention on the
part of the lessee. Keeping in mind the
principles of proportionality, this Court
not only held that the lessee/appellants
therein had not only shown their bona fides
in making payments before the High Court but
they had also shown their willingness to
make payment on the difference amount and
pursuant to the orders passed by this Court
had not only paid the entire amount due, but
had also paid the ground rent upto 1998-99
and 10 per cent penalty on the forfeited
amount of the entire consideration money.
While allowing the appeals, this Court
observed that the land in question for all
intents and purposes had been transferred in
favour of the lessee who was merely required
to pay the balance amount of 75 per cent of
the consideration amount in instalments.
While also deprecating the conduct of the
13
lessees in not making an endeavor to pay the
instalments within a reasonable period, this
Court in consonance with the doctrine of
proportionality observed that after the
letter of allotment had been issued in
favour of the lessee/appellant it had been
put in possession of the property and had
raised a six-storied building on the said
land. It was also observed that it had paid
a part of the first instalment and had
during the pendency of the proceeding before
the High Court paid a substantial amount,
together with interest @ 12 per cent per
annum, as enhanced from time to time. This
Court was, therefore, of the view that the
resumption of the plot by the Estate Officer
was too drastic and such power of resumption
and forfeiture should be exercised only as
a last resort. Of course, it was also
indicated that such an observation did not
mean that the power of resumption and
forfeiture should never be resorted to if
14
the intention of the allottee was dishonest
or with ill-motive or the payments in terms
of the allotment were made with a dishonest
view or dishonest motive.
11. Learned counsel submitted that having regard
to the aforesaid decision it must also be
held in this case that cancellation of the
allotment six months after the entire
balance amount had been deposited could not
be sustained and the High Court had erred in
dismissing the writ petition filed by the
appellant company challenging the
cancellation of the allotment made in its
favour.
12. The learned counsel appearing both for the
State of U.P. and NOIDA supported the
decision of the High Court and submitted
that since the appellant had failed to
deposit any amount, other than the initial
deposit of Rs.13,20,000/-, within the time
stipulated in the allotment order and had
unilaterally deposited the balance amount 2=
15
years after the allotment order was made
and, that too, after a letter had been
addressed to the appellant asking for proof
of deposit of the said amounts, it was not
entitled to any relief. It was urged on
behalf of the NOIDA that the deposits said
to have been made by the appellant after
receipt of the said letter, had been made
unilaterally and had not been accepted by
the NOIDA. Accordingly, the appellant could
not derive any benefit from the decisions
cited on its behalf since in all the said
cases, the deposits, though made out of
time, had subsequently been accepted by the
concerned authority.
13. It was also submitted that since third party
interests had intervened and the plot had
since been allotted in favour of the
respondent NO.5, the relief sought for by
the appellant in the writ petition could not
be granted.
16
14. Similar submissions were made on behalf of
the respondent No.5, in whose favour the
plot in question had been allotted after the
allotment in favour of the appellant was
cancelled.
15. It was submitted that the reason sought to
be given on behalf of the appellant for non
payment of the premium amount was extremely
dubious and had been rejected by the NOIDA
in its discretion. The decisions cited on
behalf of the appellant could not be applied
to the facts of this case, since in the
present case, the deposits subsequently made
by the appellant had not been accepted by
the NOIDA. It was lastly urged that, in any
event, no relief could be granted in favour
of the appellant, since no prayer had been
made in the writ petition for cancellation
of the allotment made in favour of the
respondent No.5.
17
16. Having considered the submissions made on
behalf of the respective parties, we are not
inclined to interfere with the order of the
High Court in the present appeal.
17. There is no dispute that the appellant did
not make any deposits, other than the
initial deposit of Rs.13,20,000/-, in terms
of the allotment order. There is also no
dispute that the deposits ultimately made 2=
years after the allotment order had been
passed, had been made unilaterally and only
after a communication was received from the
NOIDA asking for proof of deposits made and,
that too, three months after receipt of such
letter.
18. We are inclined to accept the submissions
made on behalf of the respondents that the
reason given for not making the deposits, as
per the allotment order, is not very
convincing. We are also inclined to accept
the other submissions made on behalf of the
18
respondents that since the deposits
subsequently made by the appellant had not
been accepted by the NOIDA, the ratio of the
decisions cited on behalf of the appellant
would not apply to the facts of this case,
particularly, when third party interests
have intervened and a fresh allotment order
had been made in favour of the respondent
No.5 and no prayer has been made in the writ
petition for setting aside such allotment.
19. We, therefore, have no option but to dismiss
the appeal, but without any order as to
costs. The appellant will be entitled to
withdraw the deposits made by it in favour
of the respondents towards the balance of
the premium amount.
………………J.
(A.K. MATHUR)
………………J.
(ALTAMAS KABIR)
New Delhi,
19
Dated : July 9, 2008