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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. Lakshmanan & Altamas Kabir

JUDGMENT: J U D G M E N T (Arising out of S.L.P. (C) No.336/2006) WITH CIVIL  APPEAL NO.   410     OF 2007 (Arising out of S.L.P. (c) No.655/2006) VIJAY ASSOCIATES (WADHWA) DEVELOPERS          ..Appellant Versus PUBLIC CONCERN FOR GOVERNANCE TRUST & ORS.    .Respondents  

ALTAMAS KABIR,J.         Of the four Special Leave Petitions heard together by us,  two have already been disposed of and the remaining two,  namely, SLP (c) Nos.336/06 and 655/06, are being disposed  of by this common judgment.         Leave granted in both the special leave petitions.         Public Concern for Governance is a registered Trust  which filed   a Public Interest Litigation, being No.43/2005,  in the High Court of Judicature at Mumbai, questioning the  manner in which certain residential plots in the Navi Mumbai  Municipal Area had been allotted  by the City and Industrial  Development Corporation (hereinafter referred to as                ’CIDCO’).  CIDCO is an authority constituted by the State of  Maharashtra under the Maharashtra Regional and Town  Planning Act, 1966 (hereinafter referred to as ’the MRTP Act’)  for development of Navi Mumbai and other townships.         The allotments made have been challenged on various  grounds.  The main ground of challenge is that the allotment  and disposal of plot Nos. 24 to 29 (Nerul) was in violation of  the existing regulations regulating such allotment.    According to the writ petitioners, the Regulations provided for  the allotment of plots effected either by public advertisement,  or at a fixed price for co-operative housing societies or on  individual applications.  However, tenders were to be invited  as far as plots which were to be  granted by public  advertisement were concerned. Since genuine co-operative  housing societies are usually unable to compete with  builders in open tender, they were to be granted plots of land  at a fixed concessional rate and the buildings to be  constructed were to be used for residential purposes only.   According to the writ petitioners there is even a difference in  the Floor Space Index, (hereinafter referred to as ’the FSI’).    In the case of purely residential constructions, the permitted  FSI is 1, whereas in the case of constructions  to be used for  both commercial and residential purposes, the FSI is 1.5.         According to the writ petitioners the plots in question  were cornered by builders who set up dummy    societies to  acquire the plots and to raise  constructions thereon, which  would be used both for residential and commercial purposes,

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thereby making large gains for themselves and defrauding  CIDCO.  It is the specific case of the writ petitioners’ that  having acquired the plots for the use of co-operative housing  societies with FSI 1, the builders who are the only  entrepreneurs in the construction project, sought to convert  these plots for commercial use with FSI 1.5, thereby causing  wrongful loss to CIDCO to the extent of Rs.36 crores.         In support of their case, the writ petitioners relied on  two Resolutions adopted by the Board of Directors of CIDCO,  being Nos. 8848 adopted on 23rd October, 2003 and 8886  adopted on   25th November, 2003, respectively.   By the first  Resolution, a deviation   was made from the normal mode of  allotting plots by fixing the rate for plots to be allotted to the  co-operative housing societies (with 1 FSI and purely for  residential purposes).  The said Resolution reads as follows:-          "RESOLUTION NO.8848 RESOLVED THAT the Board do and hereby approve  the Proposal to fix the rate for plots to Co-operative  Housing Societies (with 1 FSI and purely for  residential purpose) without inviting tender in  various developed, developing and new nodes except  Kalamboli in Navi Mumbai at fixed rate as  mentioned in column No.5 of Table No.1 and Table  2 of the Board Agenda Note (subject to the  modification that in respect of society plots situated  on smaller roads of 7 to 11 meters the base price  shall be enhanced  by 30% (instead of 40%) in  respect of Nodes specified  in Table 2).  The rate of  Co-operative housing societies in case of Kalamboli  node, however, would be same as base price, i.e.  Rs.2940/m2".

RESOLVED FURTHER THAT this policy be  implemented only after verifying the genuineness of  the Society.

RESOLVED FURTHER THAT the Vice Chairman &  Managing Director/Chief Economist/Marketing  Manager \026I/Marketing Manager-II/Marketing  Manager \026III be and are hereby authorized to  implement the Resolution.

RESOLVED FURTHER THAT this decision be  implemented without waiting for confirmation of the  Minutes.

TO CHEFCO Date 29.10.2003 Approved by the  Board  vide Resolution NO.8848 Dated 23/10/2003  subject to modifications shown above.  Draft Agenda  Note/Underlying Papers/Files,Etc. are returned  herewith.

Sd/- 29.10.2003 Chief Secretary."   

       By virtue of the aforesaid Resolution, CIDCO decided to  allot plots of land to co-operative housing societies with 1  FSI, purely for residential purposes without inviting tenders,  in various  developed and developing and new  nodes, except  Kalamboli, in Navi Mumbai.  Certain other conditions were  also indicated, which would all be subject to verification of  the genuineness of the society.         Resolution No.8886   approved the proposal contained

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in paragraph two of the Agenda Note subject to certain  amendments relating to change in some of the terminologies  used in the  said Note.   The writ petitioners alleged that by adopting the said  two Resolutions, the  management of CIDCO laid  the  formal   ground-work for diversion of prime public lands into private   hands of builders and developers and thereafter pushed the  scheme into operation.  The writ petitioners went on to  contend that even the scheme contained in the two  Resolutions referred to above had not been published, as was  required under Regulation 3 of the 1995 Regulations which  provides that  : "The Corporation may, subject to availability of  lands, publish a scheme to invite applications  from persons intending to promote and  registered the co-operative housing society in  accordance with and subject to the  Maharashtra Co-operative Societies Act, 1960  and the Rules made thereunder."

     The next ground of attack in the writ petitions is that  Resolution No.8848 provides that the policy indicated therein  should be implemented only after verifying  the genuineness  of the society which  entailed the filing of  an affidavit  showing the  continuous residence of the applicant in  Maharashtra State for a period of 15 years, which was to be   supported by documentary evidence, such as ration cards,  passports, domicile certificates etc., together with a  declaration  that the    member concerned had no other  dwelling unit in Navi Mumbai.  As was pointed  out by the  High Court while considering the writ  applications, the two  Resolutions read together  showed that CIDCO  had decided  to  allot residential plots with  1 FSI at fixed rates to genuine  societies whose members  would have to be verified by an  affidavit supported by documentary evidence and upon the  understanding that their memberships would not be  transferred  for a  specified period.  The writ petitioners   pointed out that the plots involved in these appeals were  initially allotted  to the respondent Nos.5 to 10 in Civil Appeal  arising out of SLP (c) No. 655 of 2006, each being allotted one  plot at a fixed price.  According to the writ petitioners  none  of these societies were genuine housing societies and were  dummy creations of Vijay Associates  (Wadhwa) Developers.   During the hearing of the writ petition, it was shown that the  respondent Nos. 5 to 10 had all applied  by way of almost  identical  applications, each of  which was by way  of  a  "request for allotment".    All the said applications were   addressed to the then Chief Minister of Maharashtra and not  to CIDCO, which being a statutory corporation, had  a   separate legal existence.  It was pointed out that all the said  applications except for one,  contained an endorsement of the  Chief Minister "to put up the applications" and had been  processed with undue haste  on the  recommendation of the  Managing Director of CIDCO. What was sought to be  conveyed by the above is that  all the applications were made pursuant to the two aforesaid   Resolutions adopted by the Board  and the same were  immediately processed and allotments were made in a great  hurry though it would be clear from  all the  applications that  they had been filed by one and the same person or  organization.  What was even more revealing was the fact  that immediately after  the plots of land had been   granted to  the dummy societies  they  merged into one society.  It was

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alleged before the High Court  that not one of  the  493  members  of the dummy societies  had spent  a single paisa,  either for becoming members or  towards acquisition of the   land and constructions costs.    The entire amount of earnest  money, lease rent and construction costs till date, totaling  about Rs.55 crores, was said to have been spent by the  builders alone.  From the materials on record, it was pointed   out that having sub-divided one plot into  six plots  and after  having allotted one plot to each of the six applicant societies,  on or about 13th July, 2004, the said societies made an  application for amalgamation of the said plots on 29th  August, 2004 and CIDCO consented to amalgamate the plots  for development within two days thereafter on 31st August,  2004.           Ultimately, the said six societies were amalgamated to  form Amey Co-operative Housing Society Limited on 17th  January, 2005.  Thereafter, a Memorandum of  Understanding for development was executed by each of  the  six societies with Vijay Associates (Wadhwa) Developers,  being the appellant  in the Civil Appeal arising out of SLP (C)  No.655/2006, on 30th August, 2004, i.e the day after consent  was given by CIDCO for amalgamation.          The writ petitioners alleged that although Amey Co- operative Housing Society Limited submitted the Scheme for  Amalgamation to the Joint Registrar of Co-operative   Societies on 14th September, 2004 and such  merger was  allowed only on 17th January, 2005, the Municipal   Corporation issued a  Commencement Certificate dated 17th  September, 2004 to the amalgamated society requiring  the  applicant to give notice to the  Corporation on completion of  the construction up to the plinth  level and prior to the    taking up of  commencement of further work.         It is alleged that M/s. Vijay Associates commenced  construction on behalf of the societies up to the 4th floor level  without giving such notice, which impelled the Navi Mumbai  Municipal Corporation (NMMC) to issue a stop work notice  on 18th December, 2004.  Of course, on behalf of the societies   it was contended that  the stop work notice had been issued  because the amalgamation of the six societies had not been  effected till then and  that  the same was only a  technical  requirement which was satisfied once the amalgamation was   completed on 17th January , 2005.         The writ petitioners also contended that the use of six  plots as one amalgamated plot before such amalgamation  was allowed, reveals  that the construction work  on all the  six plots was  under the complete control of Vijay  Associates  (Wadhwa) Developers.  It was pointed out that Amey Co- operative Society Limited entered into a Final Development  Agreement with Vijay Associates  (Wadhwa ) Developers on  31st December, 2004 even before amalgamation.  Under the  said  Agreement, Amey Co-operative Housing Society Limited  authorized Vijay Associates (Wadhwa) Developers to develop  the six amalgamated plots and executed an irrevocable   power of attorney in favour of the  nominees of Vijay  Associates (Wadhwa) Developers.  It was also pointed out  that under the Terms of Agreement, it was declared that  certain members of the societies had resigned their  membership and that  Vijay Associates (Wadhwa) Developers  would be entitled to recommend new members in their place  for which permission of CIDCO would have to be obtained by  the respondent No. 6. The agreement  also made provision for  transfer of membership and new members  desiring  to  acquire  a new  flat in the new construction would be  provided  such  flat upon  payment of such consideration as  may be mutually agreed upon.

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       It was the  contention of the writ petitioners that every  single old member was to be eliminated to make     place for  new  members.  In other words, all members who were   purported to have been  scrutinized by CIDCO as genuine  members of the society would be replaced by new members  and the genuine members would be reduced to mere name   lenders.  The writ petitioners contended that  the initial  members of the six  societies were connected with  Vijay  Associates (Wadhwa) Developers in some way or the other  and merely  lent their names to enable the said respondent   to acquire the plots in question by such dubious  means and,  in fact, it would be evident right from the inception that it  was only the proprietor/chairman of the said respondent who  was  in control of the entire plan.         It was contended that most of the proposed members of  the six societies appeared to be  hutment dwellers in the Navi  Mumbai area and  from their occupation  appeared to be   labourers working  in the  markets that have  come up in the  area.          As indicated hereinbefore, what was intended to be  conveyed by the writ petitioners is that the respondent No.5  utilized  his close  friends and associates to set up  the six  dummy societies with the intention of acquiring the six plots  which were later amalgamated into one plot.  By adopting the  aforesaid procedure, Vijay Associates (Wadhwa) Developers   with the help of certain officials of CIDCO obtained control of  the six plots but not for the purpose for which they were  intended.          Having regard to the restrictions on transfer and the  transfers effected by the societies of  all their rights  in favour  of the said respondent,  CIDCO gave a notice to the societies  on  28th February, 2005 terminating their  lease and  resuming the land.  In reply,  it was contended on behalf of  the societies that  since only  an agreement to lease had been  executed in favour of Vijay Associates (Wadhwa) Developers,  the restrictions regarding transfer and assignment did not  apply and  accordingly CIDCO was not entitled  to enforce its  rights under the Agreement  of Lease to terminate the lease  and to evict the societies and to resume the said plots.  It was  pointed out that CIDCO had accepted the stand taken on  behalf of the societies and did not take any further steps  pursuant to its notice dated 28th February, 2005.         In addition, it was contended that although  amalgamated plot No.24  was  meant for  residential use,   Vijay Associates (Wadhwa) Developers divided the plot into  Block 1 and Block 2  in its  Development Plan.  Block 2 is  retained for residential use while Block 1 is proposed to be  developed for commercial use.  The user of the plot both for  residential as well as commercial purposes was in violation of  the Master Plan for the area as genuine co-operative societies  were allotted   plots  only for residential purposes and not for  commercial exploitation as well.         Yet another breach of  the rules for the purpose of  favouring the said respondent  was that although under Rule  3 (1) CIDCO  was required  to publish a  scheme to invite  applications from persons intending to promote  co-operative  housing societies, no such scheme was published and the  plots in question were allotted to the six different co-operative  housing societies merely on their applications made to the  Chief Minister.  It was urged that in the present case, the  entire development is against the letter and spirit of the  CIDCO (Lease of  Land to Co-operative Housing Society)  Regulations, 1995,  which were   framed  for the disposal of   land by CIDCO as the developing  authority under Section  118  of the  Maharashtra Regional and Town Planning Act,

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1966.  It was contended that on account  of the  manipulations  effected in order to favour Vijay Associates  (Wadhwa) Developers, CIDCO   incurred a loss of about  Rs.10,000/-  per sq.mt. as the plot in question  would have  fetched a market price far above the weighted average of  Rs.10,743/- for the said plot.  Reference was made to a  report of a committee set up by the State Government,  popularly known as the Shankaran Committee, which  estimated CIDCO’s losses on account of the aforesaid  transaction of  going  into Rs.35 crores.         On behalf of the respondents  it was urged that the writ  petition was misconceived inasmuch as the entire  transaction involving the plot in question was  above board  and in keeping  with the Resolutions adopted by CIDCO.  It  was argued that all the members of the six different co- operative societies were genuine members and the  societies  were genuine societies of persons  eager to acquire residential  accommodation for themselves.  It was denied that the said  members were mere name-lenders who had been set up by  Vijay Associates (Wadhwa) Developers  only with a view to  acquire the plot in question.  It was also reiterated that no  transfer had, in  fact, been effected in favour of the said  respondent who had been retained in common by all the  members of the  six societies which amalgamated into one   society as a matter of convenience for the purpose of  development of the said plot  on behalf of the members of the   co-operative societies.  Since the said respondent  would be  investing both money and labour in the project, it was agreed  that a certain portion of  the  construction would be made  available to it for its own use.         It was further contended that during the course of  allotment and commencement of construction, some of the  members had chosen to opt out of the scheme which  necessitated the empowerment of the said respondent to  recommend the induction of new members in place of the  outgoing members.         It was also contended that the construction being raised  on the plot in question was in keeping with the sanction  which had been granted by the NMMC  and the stop work  notice  which had been issued by the Corporation was only  on account of the  fact that amalgamation of the six co- operative  societies had not been  completed till then.    Subsequently, the stop work order  was revoked and  construction had progressed up to the 9th floor involving  investment  of large sums of money.         It was also submitted on behalf of the respondents that  since the  writ petitioners had raised an allegation of under  valuation and financial loss to CIDCO, an  independent  valuation could be made to ascertain the loss, if any, on  account of the transaction and to compensate CIDCO to that  extent.   The submissions made on behalf of the respondents did  not find  favour with the High Court which appeared to be  convinced that the respondents had indulged in fraudulent  and illegal activities which could not be accepted by the  Court.  Referring to several judgments of this Court cited  both on behalf of the appellants as well as the respondents,  the High Court arrived at the conclusion that the   allotments  made in favour of the six societies were liable to be  quashed  and there  was no question of  regularizing the same.  The  High Court held that having accepted the writ petitioners’  prayer for quashing  the allotments made in favour of the  respondent Nos. 5 to 10, with a further direction to stop the  construction activities, there was no question of considering  the alternate prayer made for obtaining a fresh valuation and

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compensating CIDCO to the extent of its  losses, if any.    On the basis of its aforesaid conclusion, the High Court   quashed the  allotments made to the six housing societies,  i.e. the respondents Nos. 5 to  10 herein, by  letters of intent  issued by CIDCO dated 26th March, 2004 and 6th May, 2004.   All rights of the persons who had entered into agreements  concerning development of the plots nos. 24 to 29, including  those of the six housing societies, Amey Co-operative  Housing Society Limited  which is the  amalgamated society  and successor  to the six housing societies, and Vijay  Associates (Wadhwa) Developers  would stand extinguished.   The  said respondent along with its agents  and servants   were permanently  injuncted and restrained from entering  upon, remaining in and/or putting up any construction on  the said plots.  In addition to  the above, the entire  construction on the said plots Nos. 24 to 29 was to stand  forfeited and  vested in CIDCO.  CIDCO was permitted to  enter upon the land and take over the entire construction  and appoint its security personnel to guard it.  The Navi  Mumbai Municipal Corporation was directed to examine as to  whether the construction could be regularized and CIDCO  was directed to move  the Municipal Corporation for that  purpose.  A further   direction was given  that if in the  opinion of the Municipal Corporation  the construction could  not be regularized then CIDCO would pull it down and  recover its costs for pulling down the structure as well as the   removal of debris from Vijay Associates (Wadhwa) Developers.   Thereafter, CIDCO would decide whether the plot with  constructions should be allotted to genuine housing societies  or whether the plot and construction  shall be  allotted  to a   builder to be decided by the process of inviting tender.  In the  event, CIDCO decided that the plot should go to genuine  housing societies, it would have to issue an advertisement  accordingly and  on receiving offers based on the  construction cost with appropriate municipal  charges  it  could take necessary decision for allotment.   Several other directions were also given by  the  High  Court  while  making the rule absolute with costs to be paid  by Vijay Associates (Wadhwa) Developers to  the petitioners   assessed at Rs.1 lakh.         It is the aforesaid judgment of the Bombay High Court  which has been assailed in these appeals.  The first of the two appeals has been filed by Amey Co- operative Housing Society  which is the amalgamated society  of the six co-operative societies and  had been made  respondent No.6 in the writ petition.  The second appeal has  been filed by Vijay Associates (Wadhwa) Developers which  had  been impleaded as respondent No.4 in the writ  application.          When the  Special Leave Petition filed  by Amey Co- operative Housing Society Limited (SLP (c) No.336/2206) was  taken up for  consideration on 12th January, 2006, this Court  had directed the continuance of the  interim order granted by  the High Court  till  20th January, 2006.  On the returnable   date the second Special Leave Petition (C) No.655/2006 filed  by Vijay Associates (Wadhwa) Developers, was also taken up   for consideration along with the  earlier special leave petition  filed by Amey Co-operative Housing Society Limited and this  Court directed notice to issue on both the Special Leave  Petitions.  In addition, an interim order was passed whereby  it was directed  that there would be  no construction, no sale  and no creation of third party rights. CIDCO was directed to  take symbolic possession of the entire property and the  interim order passed by the High Court  when the Writ  Petition was disposed of subsequent to the impugned order,

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was directed to continue.         Mr. Fali Nariman, learned senior counsel appearing for  the appellants in the appeal filed by Amey Co-operative  Housing Society Limited, reiterated the submissions which  had been made before the High Court.         In addition to the above, it was also submitted  that the  State Government had directed the then Addl. Chief   Secretary (Planning), Dr. D.K. Shankaran, to conduct a  discreet  inquiry   into the  affairs of CIDCO during  the  tenure of Shri  V.M. Lal, Vice Chairman and Managing  Director,  pertaining  to allotment of plots in Navi Mumbai.   Pursuant to such direction, the Shankaran Committee  submitted  a detailed report on 1st  April, 2005 to the  Government wherein it was opined that the prevailing   market rate in the  prime residential areas of Navi Mumbai at  the relevant time, including the plots in question, was not  less  than Rs.21,000/-  per sq. mt. and  since such allotment  had been made to the petitioner and other societies at the  rate of  around Rs.10,500/-  per  sq. mt., CIDCO    had  suffered a loss of about Rs.35 crores.    It was the  stand of  the  Government  that it was also the  writ petitioner’s  case  in the writ petition that in case of plots where construction  had been completed  or had reached an advanced and   irreversible stage, the CIDCO should recover from the  contractors and developers  and the co-operative societies the  difference between the market value and the price charged to  the applicant society.   This, in fact, was prayer ’C’  in the  writ petition.    Consequently, according to  the State  Government it was  absolutely  essential that an independent  valuation  be done  by an independent valuer to make a   valuation  report of the market price of the plots in question  for the relevant period as this was the only way in which the  real  loss, if any, caused  to and suffered by CIDCO could  be  ascertained and steps could be taken to recover the same  from the concerned parties.         Mr. Nariman urged that having made allegations  against the then Chairman and Managing Director of CIDCO,  the writ petitioners should have made him a party to the  proceedings as the said allegations  could not have been  adjudicated in his absence.  It was urged that not having  made Mr. V.M .Lal a party respondent, the only public  interest that the writ petitioners  could serve by way of public  interest litigation was to ensure that no  financial loss was  caused to CIDCO in the transaction involving allotment of the  said plots in favour of the respondent Nos. 5 to 10. According  to Mr. Nariman instead of welcoming  the suggestion for  appointment of an independent valuer, the writ petitioners  quite surprisingly  opposed  such a suggestion and the same  was duly recorded by the High Court.  Mr. Nariman  submitted that  had the independent valuation been allowed  and if it had resulted  in a valuation which was much higher   than Rs.10,500/- per sq. mt. , it would have supported the  writ petitioners’ case.                  It was pointed out that the plot had been advertised   with best price of Rs.10,000/- per sq. mt. but no  offers had  been were received by CIDCO consequent upon the said  advertisement.  The same plot was subsequently offered  under the Board Resolution No.8848 at the  flat fixed rate of  Rs.10063/-.   As against the above, the respondents societies   paid for the   plots at  the rate of Rs.10,500/-  per sq. mt.         It was submitted that though in the Writ Petition it had  been  alleged that the two aforesaid Resolutions had been  adopted surreptitiously, the same were neither challenged in  the Writ Petition nor cancelled, nor was any  finding arrived

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at by the High Court in that regard.         Referring to  an observation made in the report of the  Shankaran Committee that if the plots in question had been  sold by way of  calling tenders, CIDCO  would have  fetched a  considerably higher price of Rs.21,000/- per sq. mt. or above,  Mr. Nariman submitted that the such observation disregards  the two aforesaid Resolutions of the  Board, and, in any  event, there was no material before the Shankaran  Committee in support of the  presumed higher  valuation of  Rs.21,000/-  per sq. mt..  On the other hand, the only direct   evidence of the market value of the plots before the Division  Bench was the valuation report of  Government Approved  Valuer, A.P. Maniar and Nanavati,   where the value of the  land was assessed at Rs.10,150/- per sq.mt.  as on March  2004.  It was urged that  none of the parties had either   controverted the correctness of the report  nor had  the same  been adverted to by the Division Bench of the  Bombay High  Court.         It was then submitted that except for bald allegations  there was  also nothing on record  to support the allegation  that the six co-operative  societies, which later merged to  form  an amalgamated society, were not genuine co-operative  societies and had  been set up by Vijay Associates (Wadhwa)  Developers  with persons who were mere name-lenders.          Mr. Nariman urged that  the 1995 Regulations   empowered  CIDCO to promote and register co-operative  housing societies in accordance with the provisions of the  Maharashtra  Co-operative Societies Act, 1960.  Regulation 3  of the said Regulations reads as follows:-  

"The Corporation may, subject to the  availability of lands, publish a  scheme to  invite applications  from persons  intending to promote and register the co- operative housing society  in accordance  with and subject to the Maharashtra Co- operative Societies Act, 1960 and the  Rules made thereunder:"   

In any event, CIDCO had all along proceeded on the basis  that there were two methods for allotment of lands, (i) under  the 1995 Regulations in which the  expression  "may"  appears  and (ii) by CIDCO itself passing a  resolution under  Clause 4 of the New Bombay Disposal of Lands Regulations,  1975, which applied  to all lands of the Corporation.  Mr.  Nariman contended that the  said Regulations had  a  statutory flavour having been made under Section 159 (1) (a)  of  the Maharashtra Regional and Town Planning Act, 1966.   In particular reference was made to Clause 4  which deals  with the manner of disposal of lands by CIDCO and reads as  follows:-

"4. Manner of disposal of land. The  Corporation may dispose   plots of  land   by public auction or  tender or by  considering  individual  applicants as the  Corporation may determine from time to  time."

       According to Mr. Nariman, the Corporation decided to  consider the cases of individual applicants in terms of the  Board Resolution Nos. 8848 and 8886  referred to above.  He  also urged that the Regulations  of 1975 and  1995 were  complementary to each other  and their provisions did not

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militate against each other.         Mr. Nariman concluded by urging that the entire  transaction was  above-board  and in keeping with the  existing regulations and there was no intention to cause any  loss to CIDCO.  If, however, the Court is convinced that the  transaction had been undervalued, it would be  appropriate  to obtain a fresh  valuation and to  pass  orders to  compensate CIDCO in the event such under-valuation is at  all  established.  According to Mr. Nariman, the directions  ultimately given by the High Court for cancellation of the  allotments in favour of the respondent Nos. 5 to 10 and  forfeiture of  the constructions already raised were highly  draconian and were liable to be set aside.   It was urged that  the constructions having reached  up to the 9th floor level, the  writ petitioners themselves were not convinced  that such a  direction  could be given and accordingly included prayer ’C’  which provided for adequate compensation to CIDCO for the  alleged loss suffered by it, from which position the writ  petitioners were  now trying to resile.  Mr. Nariman  submitted that the judgment of the High Court disclosed a  very pedantic and unrealistic approach without considering  the ground realities  and the fact that the writ petitioners   had allowed expenses to be incurred and  the constructions  to be raised up to a certain  point before moving the Court.   Mr. Nariman urged that the appellants were ready and  willing to have the plots revalued by a Government Valuer  and to compensate CIDCO  in the event the transactions  were found to be under-valued.         The learned Advocate General of Maharashtra, Mr. Ravi  Kadam, submitted that the State Government was not in  favour of  forfeiture of the  lands and the constructions raised  thereon on account whereof the respondents had already  incurred  expenditure to the tune  of almost Rs.55 crores.   The learned Advocate General urged that while a sum of  Rs.38 crores had been spent on acquisition of  the plots,  a  further sum of Rs.17 crores had been spent on the  construction raised thereupon.  It was contended that the  construction was commenced  after Commencement  Certificate had been obtained from the municipal authorities   and hence the same could not be said to be  illegal.         As to the appointment of the  Shankaran Committee,  the learned Advocate  General submitted that pursuant to  the report  submitted by the Committee, the State  Government directed CIDCO to issue show cause notices for  cancellation in respect  of allotments made to some of the  societies.  In fact, 14 of the  grants were cancelled, while  three cases were regularized.  There were still a few  allotments which  were under scrutiny.  In any event, the   Shankaran Committee report was  treated by the State  Government to be a preliminary report and not conclusive   and as far as the respondent Nos. 5 to 10  herein were  concerned, the allotments were made to them  as per the  rules and regulations and not  in any  clandestine manner as  had been  suggested on behalf of the writ petitioners.         On behalf of  Vijay Associates (Wadhwa) Developers, the   appellants in the appeal arising out of SLP (C) No. 655/2006,  Mr. Mukul Rohatgi contended that the report of the  Shankaran Committee on which  reliance had been placed by  the Court, had not been made available to the parties and  was  not even  made part of the records.  It was submitted  that  consequently no reliance should have been placed on  the said report.         Mr. Rohatgi  next contended that the regulations would  have no  application to the case of the respondent co- operative societies as no scheme, which was one of the

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methods for allotment of plots, had been published by  CIDCO.  On the other hand, CIDCO  acted in terms of its  Board Resolutions which have not been  challenged in the  writ petition.           Mr. Rohatgi submitted that at  all stages CIDCO had  followed the rules and regulations and  it would be unfair to  attribute any bias to its officers involved in the allotment of  plots  in the Navi Mumbai Township Area.  It was pointed out  that since  the Chief Minister was the ex-officio Chairman of  CIDCO, applications for allotment of plots were often made to  him directly  and were thereafter routed to the concerned  officials of  CIDCO.   There was nothing extra-ordinary in the  applications  having been made by the respondent-societies  to the Chief Minister which were then endorsed to the  officials of the Corporation.         Mr. Rohatgi  also urged that  if at all any loss had been  caused to CIDCO on account of under-valuation of the plots,  the reasonable course of action would be to have the plots   re-valued and in case it was found that they had been under- valued, the respondent - co-operative societies could be  directed to compensate  CIDCO to that extent.  The order  passed by the High Court would cause extreme hardship to  the respondents and their members and would discourage  the object for which CIDCO  had been created.         Mr. Rohatgi concluded on the note that in the instant  case no  public interest  was involved  and the instant  litigation had been resorted to possibly to  satisfy a grudge.   He urged that as had been observed by this  Court in   Dattaraj Nathuji Thaware vs. State of Maharashtra, reported  in  (2005) 1 SCC 590, ’public interest litigation’ is a  weapon   which  has to be used  with great care and circumspection  and the Judiciary has to be  extremely  careful to see that  behind the beautiful veil of public interest, an ugly private  malice, vested interest and/or publicity seeking is not  lurking.         The submissions advanced on  behalf of the appellants   in the two appeals  were reiterated by Mr. Altaf Ahmed,  learned senior counsel appearing for CIDCO.  Referring to  various provisions of the Maharashtra Regional Town   Planning Act, 1966, Mr. Ahmed submitted that the  Corporation had filed an  affidavit  before the Bombay High  Court through its  Marketing Manager wherein it had been  stated that CIDCO  is the statutory agency of the State  Government  and since  the State Government  had shown  its readiness to accept the   valuation through an   independent valuer, the CIDCO had  no objection to the  same.   In other  words,  Mr. Ahmed  also supported the  suggestion made on behalf of the respondent that an  independent government  valuer be appointed  to re-value the  plots in question and in case of under-valuation, the  concerned co-operative societies be directed to make good   the loss to CIDCO.         On behalf  of the writ petitioners-respondent No.1 Mr.  Chander Uday Singh, learned senior counsel, forcefully  and  pain stakingly reiterated  the submissions that had been  made at the  time of the hearing of the writ petition before  the High Court.  He emphasized  the manner in which  CIDCO had received applications from the six co-operative  societies, being the respondent Nos.  5 to 10 herein, and also  the manner in which they were processed on a priority  basis  with  the intention  of favouring  Vijay Associates (Wadhwa)  Developers  who would not have otherwise been able to  procure the said plots for development.  Mr. Singh reiterated  the case of the writ petitioners that the said respondent  had   set up dummy co-operative societies   with members who had

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no intention  of acquiring any residential accommodation in  the buildings to be constructed, with the sole intention of   acquiring the  six plots  for commercial exploitation by   replacing all the original members with persons of its choice  on mutual understanding.          Referring to the applications which had been made by  the respondent Nos. 5 to 10, Mr. Singh submitted that it  would be obvious that all the said applications had been  made by one and the same  person and had been processed  with unusual haste.  Even the  Corporation seemed to  appreciate the urgency involved by granting Commencement  Certificate to the appellant, Amey Co                                                                       -operative Housing Society Limited, even before the  six co- operative societies had been  amalgamated.  Mr .Singh urged  that the aforesaid  actions on the part of  CIDCO as well as  the Municipal Authorities are eloquent expressions of  favouritism   shown to M/s. Vijay Associates (Wadhwa)  Developers Limited for  reasons best known to the parties.         Mr. Singh urged that the Bombay High Court  had  pierced the  veil in scrutinizing  the allotment of the six plots  in favour of the respondent co-operative societies,  and had  after a correct assessment of the entire matter, directed  drastic action to  be taken against the perpetrators of the   fraud  in order to prevent a recurrence of such fraudulent  activity in future.              As far as prayer ’C’  of the writ petition is concerned,  Mr. Singh submitted that the same was made in the  alternative, in the event, the construction had reached an  irreversible stage.  In the instant  case, since the main relief  had been granted by the  Bombay High Court, the said   alternative prayer  lost its  significance.   Mr. Singh urged that Mr. V.M. Lal, the then Managing  Director of CIDCO, who had appeared and made submissions  in person in the appeal filed by him, had admitted that it was  not  the intention  of the Board to deny housing rights in  Navi Mumbai to those who did not completely answer the    eligibility criteria, notwithstanding  the fact that the  conditions laid down by the Board had not been followed.   Mr. Singh submitted that however drastic  may be the  consequences of the High Court’s directions, no ground had  been made out for interference with the same and the  appeals were liable to be dismissed.         Considering the enormity  of the expenses which  had  already been incurred in the development of the said six plots  and having further regard to the fact that the construction  had been raised   up to and beyond  the 4th floor   when the  writ petition was moved,  we are of the view that  even  though the High Court was satisfied that  undue  favour had  been shown to the respondent co-operative societies and  M/s. Vijay Associates (Wadhwa) Developers, the directions  given  for forfeiture of the land and the constructions raised  thereupon were unrealistic, particularly when an alternate  prayer had been made for  a fresh valuation of the plots for  the purpose of   compensating  CIDCO  in the event the plots  were  found to have been under-valued.           We  cannot lose   sight of the fact that the writ petition  had been filed by way of  a public interest litigation to remedy  a wrong  that  may have been committed, but not to extract  the proverbial pound of flesh.  There are ample facts to  support the case of the writ petitioners that  undue  advantage had been shown to the concerned co-operative  societies  and in the  bargain to M/s. Vijay  Associates   (Wadhwa) Developers Limited,  but  the writ petitioner Trust   approached the Court with its grievance  when the

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construction  was already under way with the due sanction  of the Municipal  Authorities and huge expenses had already  been incurred.         In our view, the more pragmatic approach of the High  Court  would have been  to take  recourse to the relief prayed  for in prayer ’C’  of the writ petition and to have the plots re- valued  by an independent  government  valuer   and  to  compensate CIDCO in respect of any loss that may have been  caused to it on account of  under-valuation of the said plots.   Apart from the above, the Bombay High Court could have  also imposed suitable penalties to discourage similar  transactions in future instead of taking recourse to such  drastic measures such as   forfeiture along with cancellation  of the allotments.         We, therefore,  allow the appeals  and set aside the      directions  given  by the Bombay High Court in its impugned  judgment.  The State Government is directed to cause a fresh  valuation of all the plots  in question as on the date on which   the allotments were made, with notice to the petitioner and  the respondent-co-operative societies through an  independent  government valuer and in the event the value is  found to be higher than that paid by the  respondent-co- operative societies, the difference in value will be paid by     Amey Co-operative housing Society Limited, the appellant in  Civil Appeal arising   out of SLP (c) No.336/2006 to CIDCO,  within one month of  the demand being made for payment  of   the same.  Till such time as the  difference is not paid, the  order of  injunction passed by this Court on 20th January,  2006, shall continue.   Once such valuation is effected and payment, if any, is  made, the injunction shall stand revoked and the respondent  \026co-operative societies will be entitled to continue with the  construction work.  Needless to say the Navi Mumbai  Municipal Authorities will be entitled to take appropriate  action against the respondents concerned in the event the  construction is found to have violated any of the Building  Rules or the Plan as sanctioned by the Municipality.         The appeals are thus disposed of with costs to the  respondent  No.1 assessed  at Rs.25,000/-.