{"id":13755,"date":"2007-02-01T00:00:00","date_gmt":"2007-01-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/amey-co-op-housing-society-ltd-vs-public-concern-for-governance-on-1-february-2007"},"modified":"2015-09-06T14:56:06","modified_gmt":"2015-09-06T09:26:06","slug":"amey-co-op-housing-society-ltd-vs-public-concern-for-governance-on-1-february-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/amey-co-op-housing-society-ltd-vs-public-concern-for-governance-on-1-february-2007","title":{"rendered":"Amey Co-Op.Housing Society Ltd. … vs Public Concern For Governance … on 1 February, 2007"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Amey Co-Op.Housing Society Ltd. … vs Public Concern For Governance … on 1 February, 2007<\/div>\n
Author: A Kabir<\/div>\n
Bench: Dr.Ar. Lakshmanan, Altamas Kabir<\/div>\n
           CASE NO.:\nAppeal (civil)  408 of 2007\n\nPETITIONER:\nAMEY CO-OP.HOUSING SOCIETY LTD.\t\t     ..Appellant\n\nRESPONDENT:\nPUBLIC CONCERN FOR GOVERNANCE TRUST & ORS.     ..Respondents\n\nDATE OF JUDGMENT: 01\/02\/2007\n\nBENCH:\nDr.AR. Lakshmanan & Altamas Kabir\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\n(Arising out of S.L.P. (C) No.336\/2006)
\nWITH
\nCIVIL  APPEAL NO.   410     OF 2007
\n(Arising out of S.L.P. (c) No.655\/2006)
\nVIJAY ASSOCIATES (WADHWA) DEVELOPERS          ..Appellant
\nVersus
\nPUBLIC CONCERN FOR GOVERNANCE TRUST & ORS.    .Respondents <\/p>\n
ALTAMAS KABIR,J.\n<\/p>\n
\tOf the four Special Leave Petitions heard together by us,
\ntwo have already been disposed of and the remaining two,
\nnamely, SLP (c) Nos.336\/06 and 655\/06, are being disposed
\nof by this common judgment.\n<\/p>\n
\tLeave granted in both the special leave petitions.
\n\tPublic Concern for Governance is a registered Trust
\nwhich filed   a Public Interest Litigation, being No.43\/2005,
\nin the High Court of Judicature at Mumbai, questioning the
\nmanner in which certain residential plots in the Navi Mumbai
\nMunicipal Area had been allotted  by the City and Industrial
\nDevelopment Corporation (hereinafter referred to as
\n‘CIDCO’).  CIDCO is an authority constituted by the State of
\nMaharashtra under the Maharashtra Regional and Town
\nPlanning Act, 1966 (hereinafter referred to as ‘the MRTP Act’)
\nfor development of Navi Mumbai and other townships.
\n\tThe allotments made have been challenged on various
\ngrounds.  The main ground of challenge is that the allotment
\nand disposal of plot Nos. 24 to 29 (Nerul) was in violation of
\nthe existing regulations regulating such allotment.
\nAccording to the writ petitioners, the Regulations provided for
\nthe allotment of plots effected either by public advertisement,
\nor at a fixed price for co-operative housing societies or on
\nindividual applications.  However, tenders were to be invited
\nas far as plots which were to be  granted by public
\nadvertisement were concerned. Since genuine co-operative
\nhousing societies are usually unable to compete with
\nbuilders in open tender, they were to be granted plots of land
\nat a fixed concessional rate and the buildings to be
\nconstructed were to be used for residential purposes only.
\nAccording to the writ petitioners there is even a difference in
\nthe Floor Space Index, (hereinafter referred to as ‘the FSI’).
\nIn the case of purely residential constructions, the permitted
\nFSI is 1, whereas in the case of constructions  to be used for
\nboth commercial and residential purposes, the FSI is 1.5.
\n\tAccording to the writ petitioners the plots in question
\nwere cornered by builders who set up dummy    societies to
\nacquire the plots and to raise  constructions thereon, which
\nwould be used both for residential and commercial purposes,
\nthereby making large gains for themselves and defrauding
\nCIDCO.  It is the specific case of the writ petitioners’ that
\nhaving acquired the plots for the use of co-operative housing
\nsocieties with FSI 1, the builders who are the only
\nentrepreneurs in the construction project, sought to convert
\nthese plots for commercial use with FSI 1.5, thereby causing
\nwrongful loss to CIDCO to the extent of Rs.36 crores.
\n\tIn support of their case, the writ petitioners relied on
\ntwo Resolutions adopted by the Board of Directors of CIDCO,
\nbeing Nos. 8848 adopted on 23rd October, 2003 and 8886
\nadopted on   25th November, 2003, respectively.   By the first
\nResolution, a deviation   was made from the normal mode of
\nallotting plots by fixing the rate for plots to be allotted to the
\nco-operative housing societies (with 1 FSI and purely for
\nresidential purposes).  The said Resolution reads as follows:-\n<\/p>\n
“RESOLUTION NO.8848
\nRESOLVED THAT the Board do and hereby approve
\nthe Proposal to fix the rate for plots to Co-operative
\nHousing Societies (with 1 FSI and purely for
\nresidential purpose) without inviting tender in
\nvarious developed, developing and new nodes except
\nKalamboli in Navi Mumbai at fixed rate as
\nmentioned in column No.5 of Table No.1 and Table
\n2 of the Board Agenda Note (subject to the
\nmodification that in respect of society plots situated
\non smaller roads of 7 to 11 meters the base price
\nshall be enhanced  by 30% (instead of 40%) in
\nrespect of Nodes specified  in Table 2).  The rate of
\nCo-operative housing societies in case of Kalamboli
\nnode, however, would be same as base price, i.e.
\nRs.2940\/m2”.\n<\/p>\n
RESOLVED FURTHER THAT this policy be
\nimplemented only after verifying the genuineness of
\nthe Society.\n<\/p>\n
RESOLVED FURTHER THAT the Vice Chairman &
\nManaging Director\/Chief Economist\/Marketing
\nManager I\/Marketing Manager-II\/Marketing
\nManager III be and are hereby authorized to
\nimplement the Resolution.\n<\/p>\n
RESOLVED FURTHER THAT this decision be
\nimplemented without waiting for confirmation of the
\nMinutes.\n<\/p>\n
TO CHEFCO Date 29.10.2003 Approved by the
\nBoard  vide Resolution NO.8848 Dated 23\/10\/2003
\nsubject to modifications shown above.  Draft Agenda
\nNote\/Underlying Papers\/Files,Etc. are returned
\nherewith.\n<\/p>\n
Sd\/- 29.10.2003
\nChief Secretary.”\n<\/p>\n
\tBy virtue of the aforesaid Resolution, CIDCO decided to
\nallot plots of land to co-operative housing societies with 1
\nFSI, purely for residential purposes without inviting tenders,
\nin various  developed and developing and new  nodes, except
\nKalamboli, in Navi Mumbai.  Certain other conditions were
\nalso indicated, which would all be subject to verification of
\nthe genuineness of the society.\n<\/p>\n
\tResolution No.8886   approved the proposal contained
\nin paragraph two of the Agenda Note subject to certain
\namendments relating to change in some of the terminologies
\nused in the  said Note.\n<\/p>\n
The writ petitioners alleged that by adopting the said
\ntwo Resolutions, the  management of CIDCO laid  the  formal
\nground-work for diversion of prime public lands into private
\nhands of builders and developers and thereafter pushed the
\nscheme into operation.  The writ petitioners went on to
\ncontend that even the scheme contained in the two
\nResolutions referred to above had not been published, as was
\nrequired under Regulation 3 of the 1995 Regulations which
\nprovides that  :\n<\/p>\n
“The Corporation may, subject to availability of
\nlands, publish a scheme to invite applications
\nfrom persons intending to promote and
\nregistered the co-operative housing society in
\naccordance with and subject to the
\nMaharashtra Co-operative Societies Act, 1960
\nand the Rules made thereunder.”\n<\/p>\n
The next ground of attack in the writ petitions is that
\nResolution No.8848 provides that the policy indicated therein
\nshould be implemented only after verifying  the genuineness
\nof the society which  entailed the filing of  an affidavit
\nshowing the  continuous residence of the applicant in
\nMaharashtra State for a period of 15 years, which was to be
\nsupported by documentary evidence, such as ration cards,
\npassports, domicile certificates etc., together with a
\ndeclaration  that the    member concerned had no other
\ndwelling unit in Navi Mumbai.  As was pointed  out by the
\nHigh Court while considering the writ  applications, the two
\nResolutions read together  showed that CIDCO  had decided
\nto  allot residential plots with  1 FSI at fixed rates to genuine
\nsocieties whose members  would have to be verified by an
\naffidavit supported by documentary evidence and upon the
\nunderstanding that their memberships would not be
\ntransferred  for a  specified period.  The writ petitioners
\npointed out that the plots involved in these appeals were
\ninitially allotted  to the respondent Nos.5 to 10 in Civil Appeal
\narising out of SLP (c) No. 655 of 2006, each being allotted one
\nplot at a fixed price.  According to the writ petitioners  none
\nof these societies were genuine housing societies and were
\ndummy creations of Vijay Associates  (Wadhwa) Developers.
\nDuring the hearing of the writ petition, it was shown that the
\nrespondent Nos. 5 to 10 had all applied  by way of almost
\nidentical  applications, each of  which was by way  of  a
\n“request for allotment”.    All the said applications were
\naddressed to the then Chief Minister of Maharashtra and not
\nto CIDCO, which being a statutory corporation, had  a
\nseparate legal existence.  It was pointed out that all the said
\napplications except for one,  contained an endorsement of the
\nChief Minister “to put up the applications” and had been
\nprocessed with undue haste  on the  recommendation of the
\nManaging Director of CIDCO.\n<\/p>\n
What was sought to be  conveyed by the above is that
\nall the applications were made pursuant to the two aforesaid
\nResolutions adopted by the Board  and the same were
\nimmediately processed and allotments were made in a great
\nhurry though it would be clear from  all the  applications that
\nthey had been filed by one and the same person or
\norganization.  What was even more revealing was the fact
\nthat immediately after  the plots of land had been   granted to
\nthe dummy societies  they  merged into one society.  It was
\nalleged before the High Court  that not one of  the  493
\nmembers  of the dummy societies  had spent  a single paisa,
\neither for becoming members or  towards acquisition of the
\nland and constructions costs.    The entire amount of earnest
\nmoney, lease rent and construction costs till date, totaling
\nabout Rs.55 crores, was said to have been spent by the
\nbuilders alone.  From the materials on record, it was pointed
\nout that having sub-divided one plot into  six plots  and after
\nhaving allotted one plot to each of the six applicant societies,
\non or about 13th July, 2004, the said societies made an
\napplication for amalgamation of the said plots on 29th
\nAugust, 2004 and CIDCO consented to amalgamate the plots
\nfor development within two days thereafter on 31st August,
\n2004.\n<\/p>\n
\tUltimately, the said six societies were amalgamated to
\nform Amey Co-operative Housing Society Limited on 17th
\nJanuary, 2005.  Thereafter, a Memorandum of
\nUnderstanding for development was executed by each of  the
\nsix societies with Vijay Associates (Wadhwa) Developers,
\nbeing the appellant  in the Civil Appeal arising out of SLP (C)
\nNo.655\/2006, on 30th August, 2004, i.e the day after consent
\nwas given by CIDCO for amalgamation.\n<\/p>\n
\tThe writ petitioners alleged that although Amey Co-
\noperative Housing Society Limited submitted the Scheme for
\nAmalgamation to the Joint Registrar of Co-operative
\nSocieties on 14th September, 2004 and such  merger was
\nallowed only on 17th January, 2005, the Municipal
\nCorporation issued a  Commencement Certificate dated 17th
\nSeptember, 2004 to the amalgamated society requiring  the
\napplicant to give notice to the  Corporation on completion of
\nthe construction up to the plinth  level and prior to the
\ntaking up of  commencement of further work.
\n\tIt is alleged that M\/s. Vijay Associates commenced
\nconstruction on behalf of the societies up to the 4th floor level
\nwithout giving such notice, which impelled the Navi Mumbai
\nMunicipal Corporation (NMMC) to issue a stop work notice
\non 18th December, 2004.  Of course, on behalf of the societies
\nit was contended that  the stop work notice had been issued
\nbecause the amalgamation of the six societies had not been
\neffected till then and  that  the same was only a  technical
\nrequirement which was satisfied once the amalgamation was
\ncompleted on 17th January , 2005.\n<\/p>\n
\tThe writ petitioners also contended that the use of six
\nplots as one amalgamated plot before such amalgamation
\nwas allowed, reveals  that the construction work  on all the
\nsix plots was  under the complete control of Vijay  Associates
\n(Wadhwa) Developers.  It was pointed out that Amey Co-
\noperative Society Limited entered into a Final Development
\nAgreement with Vijay Associates  (Wadhwa ) Developers on
\n31st December, 2004 even before amalgamation.  Under the
\nsaid  Agreement, Amey Co-operative Housing Society Limited
\nauthorized Vijay Associates (Wadhwa) Developers to develop
\nthe six amalgamated plots and executed an irrevocable
\npower of attorney in favour of the  nominees of Vijay
\nAssociates (Wadhwa) Developers.  It was also pointed out
\nthat under the Terms of Agreement, it was declared that
\ncertain members of the societies had resigned their
\nmembership and that  Vijay Associates (Wadhwa) Developers
\nwould be entitled to recommend new members in their place
\nfor which permission of CIDCO would have to be obtained by
\nthe respondent No. 6. The agreement  also made provision for
\ntransfer of membership and new members  desiring  to
\nacquire  a new  flat in the new construction would be
\nprovided  such  flat upon  payment of such consideration as
\nmay be mutually agreed upon.\n<\/p>\n
\tIt was the  contention of the writ petitioners that every
\nsingle old member was to be eliminated to make     place for
\nnew  members.  In other words, all members who were
\npurported to have been  scrutinized by CIDCO as genuine
\nmembers of the society would be replaced by new members
\nand the genuine members would be reduced to mere name
\nlenders.  The writ petitioners contended that  the initial
\nmembers of the six  societies were connected with  Vijay
\nAssociates (Wadhwa) Developers in some way or the other
\nand merely  lent their names to enable the said respondent
\nto acquire the plots in question by such dubious  means and,
\nin fact, it would be evident right from the inception that it
\nwas only the proprietor\/chairman of the said respondent who
\nwas  in control of the entire plan.\n<\/p>\n
\tIt was contended that most of the proposed members of
\nthe six societies appeared to be  hutment dwellers in the Navi
\nMumbai area and  from their occupation  appeared to be
\nlabourers working  in the  markets that have  come up in the
\narea.\n<\/p>\n
\tAs indicated hereinbefore, what was intended to be
\nconveyed by the writ petitioners is that the respondent No.5
\nutilized  his close  friends and associates to set up  the six
\ndummy societies with the intention of acquiring the six plots
\nwhich were later amalgamated into one plot.  By adopting the
\naforesaid procedure, Vijay Associates (Wadhwa) Developers
\nwith the help of certain officials of CIDCO obtained control of
\nthe six plots but not for the purpose for which they were
\nintended.\n<\/p>\n
\tHaving regard to the restrictions on transfer and the
\ntransfers effected by the societies of  all their rights  in favour
\nof the said respondent,  CIDCO gave a notice to the societies
\non  28th February, 2005 terminating their  lease and
\nresuming the land.  In reply,  it was contended on behalf of
\nthe societies that  since only  an agreement to lease had been
\nexecuted in favour of Vijay Associates (Wadhwa) Developers,
\nthe restrictions regarding transfer and assignment did not
\napply and  accordingly CIDCO was not entitled  to enforce its
\nrights under the Agreement  of Lease to terminate the lease
\nand to evict the societies and to resume the said plots.  It was
\npointed out that CIDCO had accepted the stand taken on
\nbehalf of the societies and did not take any further steps
\npursuant to its notice dated 28th February, 2005.
\n\tIn addition, it was contended that although
\namalgamated plot No.24  was  meant for  residential use,
\nVijay Associates (Wadhwa) Developers divided the plot into
\nBlock 1 and Block 2  in its  Development Plan.  Block 2 is
\nretained for residential use while Block 1 is proposed to be
\ndeveloped for commercial use.  The user of the plot both for
\nresidential as well as commercial purposes was in violation of
\nthe Master Plan for the area as genuine co-operative societies
\nwere allotted   plots  only for residential purposes and not for
\ncommercial exploitation as well.\n<\/p>\n
\tYet another breach of  the rules for the purpose of
\nfavouring the said respondent  was that although under Rule
\n3 (1) CIDCO  was required  to publish a  scheme to invite
\napplications from persons intending to promote  co-operative
\nhousing societies, no such scheme was published and the
\nplots in question were allotted to the six different co-operative
\nhousing societies merely on their applications made to the
\nChief Minister.  It was urged that in the present case, the
\nentire development is against the letter and spirit of the
\nCIDCO (Lease of  Land to Co-operative Housing Society)
\nRegulations, 1995,  which were   framed  for the disposal of
\nland by CIDCO as the developing  authority under Section
\n118  of the  Maharashtra Regional and Town Planning Act,
\n1966.  It was contended that on account  of the
\nmanipulations  effected in order to favour Vijay Associates
\n(Wadhwa) Developers, CIDCO   incurred a loss of about
\nRs.10,000\/-  per sq.mt. as the plot in question  would have
\nfetched a market price far above the weighted average of
\nRs.10,743\/- for the said plot.  Reference was made to a
\nreport of a committee set up by the State Government,
\npopularly known as the Shankaran Committee, which
\nestimated CIDCO’s losses on account of the aforesaid
\ntransaction of  going  into Rs.35 crores.\n<\/p>\n
\tOn behalf of the respondents  it was urged that the writ
\npetition was misconceived inasmuch as the entire
\ntransaction involving the plot in question was  above board
\nand in keeping  with the Resolutions adopted by CIDCO.  It
\nwas argued that all the members of the six different co-
\noperative societies were genuine members and the  societies
\nwere genuine societies of persons  eager to acquire residential
\naccommodation for themselves.  It was denied that the said
\nmembers were mere name-lenders who had been set up by
\nVijay Associates (Wadhwa) Developers  only with a view to
\nacquire the plot in question.  It was also reiterated that no
\ntransfer had, in  fact, been effected in favour of the said
\nrespondent who had been retained in common by all the
\nmembers of the  six societies which amalgamated into one
\nsociety as a matter of convenience for the purpose of
\ndevelopment of the said plot  on behalf of the members of the
\nco-operative societies.  Since the said respondent  would be
\ninvesting both money and labour in the project, it was agreed
\nthat a certain portion of  the  construction would be made
\navailable to it for its own use.\n<\/p>\n
\tIt was further contended that during the course of
\nallotment and commencement of construction, some of the
\nmembers had chosen to opt out of the scheme which
\nnecessitated the empowerment of the said respondent to
\nrecommend the induction of new members in place of the
\noutgoing members.\n<\/p>\n
\tIt was also contended that the construction being raised
\non the plot in question was in keeping with the sanction
\nwhich had been granted by the NMMC  and the stop work
\nnotice  which had been issued by the Corporation was only
\non account of the  fact that amalgamation of the six co-
\noperative  societies had not been  completed till then.
\nSubsequently, the stop work order  was revoked and
\nconstruction had progressed up to the 9th floor involving
\ninvestment  of large sums of money.\n<\/p>\n
\tIt was also submitted on behalf of the respondents that
\nsince the  writ petitioners had raised an allegation of under
\nvaluation and financial loss to CIDCO, an  independent
\nvaluation could be made to ascertain the loss, if any, on
\naccount of the transaction and to compensate CIDCO to that
\nextent.\n<\/p>\n
The submissions made on behalf of the respondents did
\nnot find  favour with the High Court which appeared to be
\nconvinced that the respondents had indulged in fraudulent
\nand illegal activities which could not be accepted by the
\nCourt.  Referring to several judgments of this Court cited
\nboth on behalf of the appellants as well as the respondents,
\nthe High Court arrived at the conclusion that the   allotments
\nmade in favour of the six societies were liable to be  quashed
\nand there  was no question of  regularizing the same.  The
\nHigh Court held that having accepted the writ petitioners’
\nprayer for quashing  the allotments made in favour of the
\nrespondent Nos. 5 to 10, with a further direction to stop the
\nconstruction activities, there was no question of considering
\nthe alternate prayer made for obtaining a fresh valuation and
\ncompensating CIDCO to the extent of its  losses, if any.
\nOn the basis of its aforesaid conclusion, the High Court
\nquashed the  allotments made to the six housing societies,
\ni.e. the respondents Nos. 5 to  10 herein, by  letters of intent
\nissued by CIDCO dated 26th March, 2004 and 6th May, 2004.
\nAll rights of the persons who had entered into agreements
\nconcerning development of the plots nos. 24 to 29, including
\nthose of the six housing societies, Amey Co-operative
\nHousing Society Limited  which is the  amalgamated society
\nand successor  to the six housing societies, and Vijay
\nAssociates (Wadhwa) Developers  would stand extinguished.
\nThe  said respondent along with its agents  and servants
\nwere permanently  injuncted and restrained from entering
\nupon, remaining in and\/or putting up any construction on
\nthe said plots.  In addition to  the above, the entire
\nconstruction on the said plots Nos. 24 to 29 was to stand
\nforfeited and  vested in CIDCO.  CIDCO was permitted to
\nenter upon the land and take over the entire construction
\nand appoint its security personnel to guard it.  The Navi
\nMumbai Municipal Corporation was directed to examine as to
\nwhether the construction could be regularized and CIDCO
\nwas directed to move  the Municipal Corporation for that
\npurpose.  A further   direction was given  that if in the
\nopinion of the Municipal Corporation  the construction could
\nnot be regularized then CIDCO would pull it down and
\nrecover its costs for pulling down the structure as well as the
\nremoval of debris from Vijay Associates (Wadhwa) Developers.
\nThereafter, CIDCO would decide whether the plot with
\nconstructions should be allotted to genuine housing societies
\nor whether the plot and construction  shall be  allotted  to a
\nbuilder to be decided by the process of inviting tender.  In the
\nevent, CIDCO decided that the plot should go to genuine
\nhousing societies, it would have to issue an advertisement
\naccordingly and  on receiving offers based on the
\nconstruction cost with appropriate municipal  charges  it
\ncould take necessary decision for allotment.
\nSeveral other directions were also given by  the  High
\nCourt  while  making the rule absolute with costs to be paid
\nby Vijay Associates (Wadhwa) Developers to  the petitioners
\nassessed at Rs.1 lakh.\n<\/p>\n
\tIt is the aforesaid judgment of the Bombay High Court
\nwhich has been assailed in these appeals.\n<\/p>\n
The first of the two appeals has been filed by Amey Co-
\noperative Housing Society  which is the amalgamated society
\nof the six co-operative societies and  had been made
\nrespondent No.6 in the writ petition.  The second appeal has
\nbeen filed by Vijay Associates (Wadhwa) Developers which
\nhad  been impleaded as respondent No.4 in the writ
\napplication.\n<\/p>\n
\t When the  Special Leave Petition filed  by Amey Co-
\noperative Housing Society Limited (SLP (c) No.336\/2206) was
\ntaken up for  consideration on 12th January, 2006, this Court
\nhad directed the continuance of the  interim order granted by
\nthe High Court  till  20th January, 2006.  On the returnable
\ndate the second Special Leave Petition (C) No.655\/2006 filed
\nby Vijay Associates (Wadhwa) Developers, was also taken up
\nfor consideration along with the  earlier special leave petition
\nfiled by Amey Co-operative Housing Society Limited and this
\nCourt directed notice to issue on both the Special Leave
\nPetitions.  In addition, an interim order was passed whereby
\nit was directed  that there would be  no construction, no sale
\nand no creation of third party rights. CIDCO was directed to
\ntake symbolic possession of the entire property and the
\ninterim order passed by the High Court  when the Writ
\nPetition was disposed of subsequent to the impugned order,
\nwas directed to continue.\n<\/p>\n
\tMr. Fali Nariman, learned senior counsel appearing for
\nthe appellants in the appeal filed by Amey Co-operative
\nHousing Society Limited, reiterated the submissions which
\nhad been made before the High Court.\n<\/p>\n
\tIn addition to the above, it was also submitted  that the
\nState Government had directed the then Addl. Chief
\nSecretary (Planning), Dr. D.K. Shankaran, to conduct a
\ndiscreet  inquiry   into the  affairs of CIDCO during  the
\ntenure of Shri  V.M. Lal, Vice Chairman and Managing
\nDirector,  pertaining  to allotment of plots in Navi Mumbai.
\nPursuant to such direction, the Shankaran Committee
\nsubmitted  a detailed report on 1st  April, 2005 to the
\nGovernment wherein it was opined that the prevailing
\nmarket rate in the  prime residential areas of Navi Mumbai at
\nthe relevant time, including the plots in question, was not
\nless  than Rs.21,000\/-  per sq. mt. and  since such allotment
\nhad been made to the petitioner and other societies at the
\nrate of  around Rs.10,500\/-  per  sq. mt., CIDCO    had
\nsuffered a loss of about Rs.35 crores.    It was the  stand of
\nthe  Government  that it was also the  writ petitioner’s  case
\nin the writ petition that in case of plots where construction
\nhad been completed  or had reached an advanced and
\nirreversible stage, the CIDCO should recover from the
\ncontractors and developers  and the co-operative societies the
\ndifference between the market value and the price charged to
\nthe applicant society.   This, in fact, was prayer ‘C’  in the
\nwrit petition.    Consequently, according to  the State
\nGovernment it was  absolutely  essential that an independent
\nvaluation  be done  by an independent valuer to make a
\nvaluation  report of the market price of the plots in question
\nfor the relevant period as this was the only way in which the
\nreal  loss, if any, caused  to and suffered by CIDCO could  be
\nascertained and steps could be taken to recover the same
\nfrom the concerned parties.\n<\/p>\n
\tMr. Nariman urged that having made allegations
\nagainst the then Chairman and Managing Director of CIDCO,
\nthe writ petitioners should have made him a party to the
\nproceedings as the said allegations  could not have been
\nadjudicated in his absence.  It was urged that not having
\nmade Mr. V.M .Lal a party respondent, the only public
\ninterest that the writ petitioners  could serve by way of public
\ninterest litigation was to ensure that no  financial loss was
\ncaused to CIDCO in the transaction involving allotment of the
\nsaid plots in favour of the respondent Nos. 5 to 10. According
\nto Mr. Nariman instead of welcoming  the suggestion for
\nappointment of an independent valuer, the writ petitioners
\nquite surprisingly  opposed  such a suggestion and the same
\nwas duly recorded by the High Court.  Mr. Nariman
\nsubmitted that  had the independent valuation been allowed
\nand if it had resulted  in a valuation which was much higher
\nthan Rs.10,500\/- per sq. mt. , it would have supported the
\nwrit petitioners’ case.\n<\/p>\n
\tIt was pointed out that the plot had been advertised
\nwith best price of Rs.10,000\/- per sq. mt. but no  offers had
\nbeen were received by CIDCO consequent upon the said
\nadvertisement.  The same plot was subsequently offered
\nunder the Board Resolution No.8848 at the  flat fixed rate of
\nRs.10063\/-.   As against the above, the respondents societies
\npaid for the   plots at  the rate of Rs.10,500\/-  per sq. mt.
\n\tIt was submitted that though in the Writ Petition it had
\nbeen  alleged that the two aforesaid Resolutions had been
\nadopted surreptitiously, the same were neither challenged in
\nthe Writ Petition nor cancelled, nor was any  finding arrived
\nat by the High Court in that regard.\n<\/p>\n
\tReferring to  an observation made in the report of the
\nShankaran Committee that if the plots in question had been
\nsold by way of  calling tenders, CIDCO  would have  fetched a
\nconsiderably higher price of Rs.21,000\/- per sq. mt. or above,
\nMr. Nariman submitted that the such observation disregards
\nthe two aforesaid Resolutions of the  Board, and, in any
\nevent, there was no material before the Shankaran
\nCommittee in support of the  presumed higher  valuation of
\nRs.21,000\/-  per sq. mt..  On the other hand, the only direct
\nevidence of the market value of the plots before the Division
\nBench was the valuation report of  Government Approved
\nValuer, A.P. Maniar and Nanavati,   where the value of the
\nland was assessed at Rs.10,150\/- per sq.mt.  as on March
\n2004.  It was urged that  none of the parties had either
\ncontroverted the correctness of the report  nor had  the same
\nbeen adverted to by the Division Bench of the  Bombay High
\nCourt.\n<\/p>\n
\tIt was then submitted that except for bald allegations
\nthere was  also nothing on record  to support the allegation
\nthat the six co-operative  societies, which later merged to
\nform  an amalgamated society, were not genuine co-operative
\nsocieties and had  been set up by Vijay Associates (Wadhwa)
\nDevelopers  with persons who were mere name-lenders.
\n\tMr. Nariman urged that  the 1995 Regulations
\nempowered  CIDCO to promote and register co-operative
\nhousing societies in accordance with the provisions of the
\nMaharashtra  Co-operative Societies Act, 1960.  Regulation 3
\nof the said Regulations reads as follows:-\n<\/p>\n
“The Corporation may, subject to the
\navailability of lands, publish a  scheme to
\ninvite applications  from persons
\nintending to promote and register the co-\n<\/p>\n
operative housing society  in accordance
\nwith and subject to the Maharashtra Co-\n<\/p>\n
operative Societies Act, 1960 and the
\nRules made thereunder:”\n<\/p>\n
In any event, CIDCO had all along proceeded on the basis
\nthat there were two methods for allotment of lands, (i) under
\nthe 1995 Regulations in which the  expression  “may”
\nappears  and (ii) by CIDCO itself passing a  resolution under
\nClause 4 of the New Bombay Disposal of Lands Regulations,
\n1975, which applied  to all lands of the Corporation.  Mr.
\nNariman contended that the  said Regulations had  a
\nstatutory flavour having been made under Section 159 (1) (a)
\nof  the Maharashtra Regional and Town Planning Act, 1966.
\nIn particular reference was made to Clause 4  which deals
\nwith the manner of disposal of lands by CIDCO and reads as
\nfollows:-\n<\/p>\n
“4. Manner of disposal of land. The
\nCorporation may dispose   plots of  land
\nby public auction or  tender or by
\nconsidering  individual  applicants as the
\nCorporation may determine from time to
\ntime.”\n<\/p>\n
\tAccording to Mr. Nariman, the Corporation decided to
\nconsider the cases of individual applicants in terms of the
\nBoard Resolution Nos. 8848 and 8886  referred to above.  He
\nalso urged that the Regulations  of 1975 and  1995 were
\ncomplementary to each other  and their provisions did not
\nmilitate against each other.\n<\/p>\n
\tMr. Nariman concluded by urging that the entire
\ntransaction was  above-board  and in keeping with the
\nexisting regulations and there was no intention to cause any
\nloss to CIDCO.  If, however, the Court is convinced that the
\ntransaction had been undervalued, it would be  appropriate
\nto obtain a fresh  valuation and to  pass  orders to
\ncompensate CIDCO in the event such under-valuation is at
\nall  established.  According to Mr. Nariman, the directions
\nultimately given by the High Court for cancellation of the
\nallotments in favour of the respondent Nos. 5 to 10 and
\nforfeiture of  the constructions already raised were highly
\ndraconian and were liable to be set aside.   It was urged that
\nthe constructions having reached  up to the 9th floor level, the
\nwrit petitioners themselves were not convinced  that such a
\ndirection  could be given and accordingly included prayer ‘C’
\nwhich provided for adequate compensation to CIDCO for the
\nalleged loss suffered by it, from which position the writ
\npetitioners were  now trying to resile.  Mr. Nariman
\nsubmitted that the judgment of the High Court disclosed a
\nvery pedantic and unrealistic approach without considering
\nthe ground realities  and the fact that the writ petitioners
\nhad allowed expenses to be incurred and  the constructions
\nto be raised up to a certain  point before moving the Court.
\nMr. Nariman urged that the appellants were ready and
\nwilling to have the plots revalued by a Government Valuer
\nand to compensate CIDCO  in the event the transactions
\nwere found to be under-valued.\n<\/p>\n
\tThe learned Advocate General of Maharashtra, Mr. Ravi
\nKadam, submitted that the State Government was not in
\nfavour of  forfeiture of the  lands and the constructions raised
\nthereon on account whereof the respondents had already
\nincurred  expenditure to the tune  of almost Rs.55 crores.
\nThe learned Advocate General urged that while a sum of
\nRs.38 crores had been spent on acquisition of  the plots,  a
\nfurther sum of Rs.17 crores had been spent on the
\nconstruction raised thereupon.  It was contended that the
\nconstruction was commenced  after Commencement
\nCertificate had been obtained from the municipal authorities
\nand hence the same could not be said to be  illegal.
\n\tAs to the appointment of the  Shankaran Committee,
\nthe learned Advocate  General submitted that pursuant to
\nthe report  submitted by the Committee, the State
\nGovernment directed CIDCO to issue show cause notices for
\ncancellation in respect  of allotments made to some of the
\nsocieties.  In fact, 14 of the  grants were cancelled, while
\nthree cases were regularized.  There were still a few
\nallotments which  were under scrutiny.  In any event, the
\nShankaran Committee report was  treated by the State
\nGovernment to be a preliminary report and not conclusive
\nand as far as the respondent Nos. 5 to 10  herein were
\nconcerned, the allotments were made to them  as per the
\nrules and regulations and not  in any  clandestine manner as
\nhad been  suggested on behalf of the writ petitioners.
\n\tOn behalf of  Vijay Associates (Wadhwa) Developers, the
\nappellants in the appeal arising out of SLP (C) No. 655\/2006,
\nMr. Mukul Rohatgi contended that the report of the
\nShankaran Committee on which  reliance had been placed by
\nthe Court, had not been made available to the parties and
\nwas  not even  made part of the records.  It was submitted
\nthat  consequently no reliance should have been placed on
\nthe said report.\n<\/p>\n
\tMr. Rohatgi  next contended that the regulations would
\nhave no  application to the case of the respondent co-
\noperative societies as no scheme, which was one of the
\nmethods for allotment of plots, had been published by
\nCIDCO.  On the other hand, CIDCO  acted in terms of its
\nBoard Resolutions which have not been  challenged in the
\nwrit petition.\n<\/p>\n
\tMr. Rohatgi submitted that at  all stages CIDCO had
\nfollowed the rules and regulations and  it would be unfair to
\nattribute any bias to its officers involved in the allotment of
\nplots  in the Navi Mumbai Township Area.  It was pointed out
\nthat since  the Chief Minister was the ex-officio Chairman of
\nCIDCO, applications for allotment of plots were often made to
\nhim directly  and were thereafter routed to the concerned
\nofficials of  CIDCO.   There was nothing extra-ordinary in the
\napplications  having been made by the respondent-societies
\nto the Chief Minister which were then endorsed to the
\nofficials of the Corporation.\n<\/p>\n
\tMr. Rohatgi  also urged that  if at all any loss had been
\ncaused to CIDCO on account of under-valuation of the plots,
\nthe reasonable course of action would be to have the plots
\nre-valued and in case it was found that they had been under-
\nvalued, the respondent – co-operative societies could be
\ndirected to compensate  CIDCO to that extent.  The order
\npassed by the High Court would cause extreme hardship to
\nthe respondents and their members and would discourage
\nthe object for which CIDCO  had been created.
\n\tMr. Rohatgi concluded on the note that in the instant
\ncase no  public interest  was involved  and the instant
\nlitigation had been resorted to possibly to  satisfy a grudge.
\nHe urged that as had been observed by this  Court in
\nDattaraj Nathuji Thaware vs. State of Maharashtra,<\/a> reported
\nin  (2005) 1 SCC 590, ‘public interest litigation’ is a  weapon
\nwhich  has to be used  with great care and circumspection
\nand the Judiciary has to be  extremely  careful to see that
\nbehind the beautiful veil of public interest, an ugly private
\nmalice, vested interest and\/or publicity seeking is not
\nlurking.\n<\/p>\n
\tThe submissions advanced on  behalf of the appellants
\nin the two appeals  were reiterated by Mr. Altaf Ahmed,
\nlearned senior counsel appearing for CIDCO.  Referring to
\nvarious provisions of the Maharashtra Regional Town
\nPlanning Act, 1966, Mr. Ahmed submitted that the
\nCorporation had filed an  affidavit  before the Bombay High
\nCourt through its  Marketing Manager wherein it had been
\nstated that CIDCO  is the statutory agency of the State
\nGovernment  and since  the State Government  had shown
\nits readiness to accept the   valuation through an
\nindependent valuer, the CIDCO had  no objection to the
\nsame.   In other  words,  Mr. Ahmed  also supported the
\nsuggestion made on behalf of the respondent that an
\nindependent government  valuer be appointed  to re-value the
\nplots in question and in case of under-valuation, the
\nconcerned co-operative societies be directed to make good
\nthe loss to CIDCO.\n<\/p>\n
      \tOn behalf  of the writ petitioners-respondent No.1 Mr.
\nChander Uday Singh, learned senior counsel, forcefully  and
\npain stakingly reiterated  the submissions that had been
\nmade at the  time of the hearing of the writ petition before
\nthe High Court.  He emphasized  the manner in which
\nCIDCO had received applications from the six co-operative
\nsocieties, being the respondent Nos.  5 to 10 herein, and also
\nthe manner in which they were processed on a priority  basis
\nwith  the intention  of favouring  Vijay Associates (Wadhwa)
\nDevelopers  who would not have otherwise been able to
\nprocure the said plots for development.  Mr. Singh reiterated
\nthe case of the writ petitioners that the said respondent  had
\nset up dummy co-operative societies   with members who had
\nno intention  of acquiring any residential accommodation in
\nthe buildings to be constructed, with the sole intention of
\nacquiring the  six plots  for commercial exploitation by
\nreplacing all the original members with persons of its choice
\non mutual understanding.\n<\/p>\n
\tReferring to the applications which had been made by
\nthe respondent Nos. 5 to 10, Mr. Singh submitted that it
\nwould be obvious that all the said applications had been
\nmade by one and the same  person and had been processed
\nwith unusual haste.  Even the  Corporation seemed to
\nappreciate the urgency involved by granting Commencement
\nCertificate to the appellant, Amey Co\n<\/p>\n
-operative Housing Society Limited, even before the  six co-
\noperative societies had been  amalgamated.  Mr .Singh urged
\nthat the aforesaid  actions on the part of  CIDCO as well as
\nthe Municipal Authorities are eloquent expressions of
\nfavouritism   shown to M\/s. Vijay Associates (Wadhwa)
\nDevelopers Limited for  reasons best known to the parties.
\n\tMr. Singh urged that the Bombay High Court  had
\npierced the  veil in scrutinizing  the allotment of the six plots
\nin favour of the respondent co-operative societies,  and had
\nafter a correct assessment of the entire matter, directed
\ndrastic action to  be taken against the perpetrators of the
\nfraud  in order to prevent a recurrence of such fraudulent
\nactivity in future.\n<\/p>\n
\tAs far as prayer ‘C’  of the writ petition is concerned,
\nMr. Singh submitted that the same was made in the
\nalternative, in the event, the construction had reached an
\nirreversible stage.  In the instant  case, since the main relief
\nhad been granted by the  Bombay High Court, the said
\nalternative prayer  lost its  significance.
\nMr. Singh urged that Mr. V.M. Lal, the then Managing
\nDirector of CIDCO, who had appeared and made submissions
\nin person in the appeal filed by him, had admitted that it was
\nnot  the intention  of the Board to deny housing rights in
\nNavi Mumbai to those who did not completely answer the
\neligibility criteria, notwithstanding  the fact that the
\nconditions laid down by the Board had not been followed.
\nMr. Singh submitted that however drastic  may be the
\nconsequences of the High Court’s directions, no ground had
\nbeen made out for interference with the same and the
\nappeals were liable to be dismissed.\n<\/p>\n
\tConsidering the enormity  of the expenses which  had
\nalready been incurred in the development of the said six plots
\nand having further regard to the fact that the construction
\nhad been raised   up to and beyond  the 4th floor   when the
\nwrit petition was moved,  we are of the view that  even
\nthough the High Court was satisfied that  undue  favour had
\nbeen shown to the respondent co-operative societies and
\nM\/s. Vijay Associates (Wadhwa) Developers, the directions
\ngiven  for forfeiture of the land and the constructions raised
\nthereupon were unrealistic, particularly when an alternate
\nprayer had been made for  a fresh valuation of the plots for
\nthe purpose of   compensating  CIDCO  in the event the plots
\nwere  found to have been under-valued.\n<\/p>\n
\tWe  cannot lose   sight of the fact that the writ petition
\nhad been filed by way of  a public interest litigation to remedy
\na wrong  that  may have been committed, but not to extract
\nthe proverbial pound of flesh.  There are ample facts to
\nsupport the case of the writ petitioners that  undue
\nadvantage had been shown to the concerned co-operative
\nsocieties  and in the  bargain to M\/s. Vijay  Associates
\n(Wadhwa) Developers Limited,  but  the writ petitioner Trust
\napproached the Court with its grievance  when the
\nconstruction  was already under way with the due sanction
\nof the Municipal  Authorities and huge expenses had already
\nbeen incurred.\n<\/p>\n
\tIn our view, the more pragmatic approach of the High
\nCourt  would have been  to take  recourse to the relief prayed
\nfor in prayer ‘C’  of the writ petition and to have the plots re-
\nvalued  by an independent  government  valuer   and  to
\ncompensate CIDCO in respect of any loss that may have been
\ncaused to it on account of  under-valuation of the said plots.
\nApart from the above, the Bombay High Court could have
\nalso imposed suitable penalties to discourage similar
\ntransactions in future instead of taking recourse to such
\ndrastic measures such as   forfeiture along with cancellation
\nof the allotments.\n<\/p>\n
\tWe, therefore,  allow the appeals  and set aside the
\ndirections  given  by the Bombay High Court in its impugned
\njudgment.  The State Government is directed to cause a fresh
\nvaluation of all the plots  in question as on the date on which
\nthe allotments were made, with notice to the petitioner and
\nthe respondent-co-operative societies through an
\nindependent  government valuer and in the event the value is
\nfound to be higher than that paid by the  respondent-co-
\noperative societies, the difference in value will be paid by
\nAmey Co-operative housing Society Limited, the appellant in
\nCivil Appeal arising   out of SLP (c) No.336\/2006 to CIDCO,
\nwithin one month of  the demand being made for payment  of
\nthe same.  Till such time as the  difference is not paid, the
\norder of  injunction passed by this Court on 20th January,
\n2006, shall continue.\n<\/p>\n
Once such valuation is effected and payment, if any, is
\nmade, the injunction shall stand revoked and the respondent
\nco-operative societies will be entitled to continue with the
\nconstruction work.  Needless to say the Navi Mumbai
\nMunicipal Authorities will be entitled to take appropriate
\naction against the respondents concerned in the event the
\nconstruction is found to have violated any of the Building
\nRules or the Plan as sanctioned by the Municipality.
\n\tThe appeals are thus disposed of with costs to the
\nrespondent  No.1 assessed  at Rs.25,000\/-.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Amey Co-Op.Housing Society Ltd. … vs Public Concern For Governance … on 1 February, 2007 Author: A Kabir Bench: Dr.Ar. Lakshmanan, Altamas Kabir CASE NO.: Appeal (civil) 408 of 2007 PETITIONER: AMEY CO-OP.HOUSING SOCIETY LTD. ..Appellant RESPONDENT: PUBLIC CONCERN FOR GOVERNANCE TRUST & ORS. ..Respondents DATE OF JUDGMENT: 01\/02\/2007 BENCH: Dr.AR. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-13755","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nAmey Co-Op.Housing Society Ltd. ... vs Public Concern For Governance ... on 1 February, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/amey-co-op-housing-society-ltd-vs-public-concern-for-governance-on-1-february-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Amey Co-Op.Housing Society Ltd. ... vs Public Concern For Governance ... on 1 February, 2007 - 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