IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   1089               OF 2008 [Arising out of  SLP (Civil) No. 14074 of 2006]

M.D., H.S.I.D.C. and Ors. …Appellants

Versus

M/s. Hari Om Enterprises and Anr. …Respondents

WITH

CIVIL APPEAL NOs. 4090,4130,4091,4092,4093,4094,4095,4097,4098 OF 2008

[Arising out of  SLP (Civil) Nos. 16541, 16708, 16711, 19833, 19916, 19949, 20235, 17426, 18011 OF 2006]

CIVIL APPEAL NOs.  4099,4101,4100,4102   OF 2008 [Arising out of  SLP (Civil) Nos. 2331, 2343, 2702 and 2891 OF 2007]

J U D G M E N T  S.B. SINHA, J :

Leave granted.

Validity of orders of recession of allotment of industrial plots and

resumption thereof by the appellants herein is in question in this batch of

appeals.

With  a  view  to  appreciate  the  questions  involved  herein,  the

factual  matrix  of  the  matter,  however,  would  be  noticed  from  Civil

Appeal arising out of SLP (C) No. 14074 of 2006.

Appellant  -  Corporation  is  a  public  sector  undertaking.   Its

principal function is allotment of industrial plots belonging to the State

of Haryana.  It was set up as a catalyst for promoting economic growth

and  accelerating  the  pace  of  industrialization.   It  not  only  provides

financial assistance to the industrial  concerns by way of term loans; it

also  develops  infrastructure  for  setting  up  of  industrial  units.   The

Corporation also invests  money in  developing the industrial  estates  at

strategic locations.  In exercise of its functions, it also allots industrial

plots to entrepreneurs for setting up their industries on “no profit no loss”

basis.   The  entrepreneurs,  according  to  the  Corporation,  must  be  the

deserving ones.  For the said purpose, it keeps in mind the principle that

allotment  of  land  should  not  be  made  to  speculators  who  invest  in

property for getting high returns on escalation of price.   

Respondent No. 1 is a partnership firm.  It was previously known

as M/s. Dysa International (Firm).  It applied for allotment of 1000 sq. m.

size plot in IMT, Manesar.  The Allotment Committee of the Corporation

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having found the respondent to be eligible for allotment, allotted plot No.

177 in  Sector  6,  IMT, Manesar  measuring 1012.50 sq.  m. wherefor  a

letter of allotment was issued on 10.01.2001.   

We may notice the relevant clauses thereof.

Note appended to Clause 3 of the said letter of allotment states that

in the event of failure to comply with the terms and conditions by the

Regular  Letter  of  Appointment  (RLA)  holder,  the  allotment  of  an

Industrial  plot/  shed,  within  the  stipulated  period,  the  RLA  shall

automatically lapse and 10% application money deposited towards the

cost of the plot/shed shall be refunded without any interest. However, if

the  allottee  makes  a  request  for  the  surrender  of  the  plot/shed  after

complying with the terms and conditions, then the Principal amount will

be refunded without any interest after making a deduction of 10% of the

cost of the plot/shed.

Clause  4  provides  for  other  Terms  and  Conditions  governing

schedule of payment of the balance 75% of the price of plot/shed.

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Clause  6  provides  for  the  consequences  of  non-payment  of  the

balance  amount  or  non-fulfillment  of  the  terms and conditions  of  the

Letter of Allotment/Agreement. In such an event,  the RLA shall stand

withdrawn   with  the  resumption  of  the  plot/shed  and  refund  of  the

deposit without any interest with 10% deduction.

Clause 8 provides for  the Schedule of  Construction and “Going

into Production”.  It mandates the allottee to commence construction of

building as per the approved building plans within a period of one year

from the date of the offer of possession.  The allottee will be required to

start commercial production within a period of three years from the date

of offer of possession. Extension for commencement of construction can

be  granted  for  6  months  maximum if  circumstances  were  beyond  the

control of the allottee. Similarly, extension of one year can be granted for

commencement of commercial production for reasons beyond its control

and  only  if  10%  of  the  permissible  area  has  been  constructed  and

effective steps taken for completion of project subject to payment of the

extension fee.  

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An allottee  will  be deemed to  have  completed the  project  if  he

constructs  minimum 25%  of  the  permissible  covered  area  and  starts

commercial production within the period specified therein.

Clause  14  provides  for  consequences  of  non-adherence  to  the

schedule of payment and schedule of implementation. In such an event

and on an unsatisfactory reply to the show cause notice, the HSIDC is

empowered to the plot/shed and the principal amount is to be refunded

without  payment  of  interest  and  after  deduction  of  the  10%  of  the

plot/shed.  

Clause 26 provides for the resumption of plots by HSIDC in the

event of non-compliance of the terms and conditions after giving show-

cause  notice  therefor.  The  principal  amount  will  be  refunded  without

payment  of  interest  and  after  deduction  of  the  10%  of  the  plot/shed

without interest. The allottee will be free to remove the structure/debris

within a period of 2 months of resumption order at his own cost.  The

allottee will  not  be entitled to any payment/compensation for building

constructed by it on the resumed plot.

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Clause 27  provides that no restoration of resumed plots shall be

allowed.  

The agreement also provides for an appeal against the order of the

competent  authority  of  the  Corporation  before  the  Commissioner,

Industries, Government of Haryana.   

An  offer  of  physical  possession  was  made  to  the  firm  by  the

Corporation  by  a  letter  dated  20.12.2001  wherein  the  schedule  of

payment in five instalments beginning from 1.07.2002 to 1.07.2004 was

specified.   

It was furthermore stipulated:

“…You are, therefore, requested to deposit the installments  along  with  interest  @  18%  per annum from the date of offer of possession on the due dates otherwise you would be liable to pay penalty equivalent  to  10% of  the amount due and if you fail to pay the penalty within the prescribed period which would be specified by the Estate Manager, the plot would be liable for resumption  after  affording you opportunity of personal hearing before MD/HSIDC.”

It, however, appears that handing over of actual possession took

some time and possession was handed over only on 8.12.2003.  At the

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time of handing over of possession, the area of the land, measurement

thereof as also the boundaries were delineated.   

Indisputably,  Respondent  No.  1  herein  filed  an  application  for

construction  of  the  building  on  19.12.2003.   Indisputably,  again  the

permission for construction of the buildings was to be granted only by

the  Corporation.   The  Corporation  itself  granted  permission  only  on

20.03.2004  whereafter  the  construction  started.   It  was  completed  in

May, 2005.

The Corporation, however, by a letter dated 13.07.2004 asked the

firm as to what steps had been taken by it for constructions of the plot in

question with documentary proof as also need to apply for extension on

the premise that  offer  of  possession  was  issued on 1.01.2002 and the

construction  activity, thus,  was  required  to  be started  within  one  year

therefrom and production of the Unit should have been started from the

date of offer of possession.   

Respondent No. 1 intimated about the change of the constitution of

its firm.  It by a letter dated 30.11.2004 categorically stated:

“We  could  not  start  the  construction  on  the above  mentioned  plot,  due  to  some  financial constraints.  We are pleased to inform you that

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we have been able to arrange sufficient  funds for  the  construction  and  have  already  started the  construction  of  your  factory  at  the  above mentioned plot.  The factory will be operational within  three  months.   Since  we  have  the building  plans  approved  by  your  department and  have  obtained  temporary  connections  for water and electricity, the construction is going on in full swing.

Regarding the balance amount, enclosed please find Demand Draft No. 000433 for Rs. 908461/-  drawn on HDFC Bank.   This  clears our account as mentioned in your letter.  Copy of the approval of the building plan is attached herewith for your reference.”

Despite the same, as no action was taken, a legal notice was issued

by the Respondent No. 1 through its  lawyer dated 1.03.2005 inter alia

drawing its attention to :

(i) Actual physical possession had been handed over on 9.12.2003

and the building plans were approved by the Corporation on or

about 20.03.2004.

(ii) Steps for  construction had been intimated to the Corporation

together with a letter for extension of time.   

(iii) Pursuant  to the show cause notice dated 2.11.2004, a sum of

Rs. 9,08,461/- had been remitted.

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(iv) 25% of the  construction had been completed and despite  the

same the land was said to have been resumed without issuing

any  show  cause  notice  although  the  respondent  had  already

deposited the said sum.

The  Corporation  was  asked  to  withdraw  the  said  notice  of

resumption.

By an order dated 3.03.2005, however, the plot was said to have

been  resumed  inter  alia  on  the  premise  that  Respondent  no.  1  had

violated  Clause  4  of  the  said  Agreement.    A  demand  draft  of  Rs.

9,08,461/- was not accepted and a cheque for a sum of Rs. 6,83,349/-

towards the refundable amount as also the demand draft for the said sum

of Rs. 9,08,461/- were returned.   

Admittedly, an appeal preferred thereagainst has been dismissed.

Respondent No. 1 aggrieved by and dissatisfied therewith filed a

writ  petition  before  the  Punjab and Haryana High Court.   A Division

Bench  of  the  High  Court  by reason  of  the impugned  judgment  while

setting aside the order of resumption as also the order of the appellate

authority dated 27.05.2005, directed:

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“…The plot in question stands restored back to the  petitioner.   The  amount  refunded  by  the Corporation to the petitioner shall be repaid to the Corporation within a period of two weeks from the date a certified copy of this  order is received.  

The respondent – Corporation would be at  liberty  to  inform  the  petitioner  through  a written  communication,  if  there  are  still  any outstanding dues against  the petitioner – firm. On receipt of the aforesaid communication, the petitioner – firm shall  be required to clear  all the  aforesaid  outstanding  dues  also,  within  a further period of two weeks thereof.  It is made clear that if  the payments as  notice above are not  made by the petitioner – firm, the present petition  shall  be  deemed  to  have  been dismissed.”

Mr. A. Saran, the learned Additional Solicitor General appearing

on behalf of the appellants, would submit:

(i) Respondent  No.  1  admittedly  having  violated  the  terms  and

conditions  of  contract,  the  High  Court  acted  illegally  and

without jurisdiction in issuing the impugned directions.   

(ii) The High Court could not have entertained a writ petition in a

matter arising out of a contract qua contract.  It in any event it

could not have condoned the delay in making payments.  

(iii) The High Court could not have re-written the contract.

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(iv) Respondents were not only aware of the terms of contract, they

acted thereupon and as such they are estopped and precluded

from  contending  that  the  date  of  actual  handing  over  of

physical possession would be the relevant date.   

(v) In any event, as before the High Court the appellants in their

counter-affidavit  categorically  denied  and  disputed  the

assertions made in that behalf by the respondents herein, such

disputed question of fact could not have been gone into by the

High Court in exercise of its writ jurisdiction.   

(vi) Taking any view of  the  matter,  the  High Court  should  have

considered  as  to  who was  to  be blamed;  the  allottees  or  the

Corporation and only upon arriving at a finding of fact that the

respondents  were not  handed over actual  physical  possession

despite all attempts made by them to obtain the same, the date

of handing over of actual possession could have been held to be

a relevant one.   

Mr.  Puneet  Bali,  learned  counsel  appearing  on  behalf  of  the

respondent no. 1, on the other hand, would submit:

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(i) Appellant in its list of dates has suppressed the fact that actual

physical possession had been handed over only on 8.12.2003

and  despite  the  fact  that  within  a  period  of  seven  days,  the

‘Firm’ applied for sanction of the building plan, the same had

been issued  only on 20.03.2004, thus, the building having been

completed  within  a  period  of  14  months  and  commercial

production having been started, the terms of the contract had

not been violated.   

(ii) In  any  event  of  the  matter,  the  show  cause  in  respect  of

resumption  of  land  could  be  issued  only  upon  demand  of

penalty and not prior thereto.

(iii) The  action  for  resumption  of  land  and/  or  forfeiture  being

draconian in nature could have been taken recourse to by the

Corporation only as a last resort.

Allotment of industrial plot keeping in view the object and purport

for which the Corporation had been constituted and incorporated must be

held to be a governmental function.  In a case of this nature where the

aim and  object  of  the  Corporation  as  also  the  State  is  to  encourage

industrialization  while  adjusting  equity,  the  purpose  for  which  the

Scheme was made would be a relevant factor.  Only because allotment of

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land has been effected through a letter, the same by itself does not make

such allotment  and/  or  the  provisions  contained  therein  to  be  matters

within  ‘private  law domain’  as  contra-distinguished  from ‘public  law

domain’.   The  State  exercises  deep  and  pervasive  control  over  the

activities of the Corporation.   

The  parties  themselves  agreed  that  despite  the  fact  that  the

Corporation is a juristic person, an appeal against its decision shall lie to

the Financial Commission of the State.  Indisputably, the function of the

appellant is a sovereign function.  It, in any event is a State, within the

meaning of Article 12 of the Constitution of India.  Its action, therefore,

must be fair and reasonable so as to subserve the requirements of Article

14 of the Constitution.   

In the aforementioned backdrop, the issue involved in the matter

must be determined.

The letter of allotment dated 10.01.2001 indisputably sets out the

terms and conditions thereof.  But, the same is not exhaustive.  The terms

and conditions were supplemented by the Corporation itself in its letter

dated 20.12.2001 when offer  of handing over physical possession was

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made, by reason whereof not only a period of two years was provided for

deposit of instalement along with interest at the rate of 18% per annum

but also a provision had been made that in the event of failure to adhere

to  the  schedule  enumerated  therein,  penalty  equivalent  to  10% of  the

amount due would be levied.  It was furthermore laid down that in the

event  of  failure  of  the  ‘firm’  to  pay  the  amount  penalty  within  the

prescribed period, the plot would be liable for resumption.  The terms

and conditions of letter of allotment would clearly show that resumption

of the plot is not automatic.   

The question as to whether the allottee had failed to comply with

the terms and conditions was required to be determined.  The terms of the

contract  would  have  to  be  construed  having  regard  to  the  respective

rights and obligations of the parties to perform their part of contract.  It

provides for issuance of a show cause notice.  It provides for refund of

the principal amount, of course, without any interest.

Resumption of plot, it is trite, would not be automatic.   

Clause 26 provides for an enabling clause.   The decision of the

Corporation is not final.  An appeal lay thereagainst.

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The  jurisdiction  of  a  ‘State’  to  resort  to  the  drastic  power  of

resumption and forfeiture ordinarily should be undertaken as a last resort.

Keeping in view the fact that the Corporation was obligated to comply

with the principles of natural justice and, particularly, in view of the fact

that  was  required  to  determine  the  capacity  as  also  bona  fide  of  an

entrepreneur  to  start  an  industrial  undertaking  on  the  plots,  the

Corporation was required to assign some reasons as to why the plot in

question had to be resumed.  While doing so, it evidently was required to

take into consideration its own conduct.  A party cannot take advantage

of its own wrong.  While a State takes penal action against the allottee,

its  bona fide  would  be one  of  the  relevant  factors  before  an order  of

resumption and forfeiture of the amount deposited is passed.   

The particulars contemplated in the letter of allotment as also the

letter of offer of possession and the procedures laid down therefor were

required to be scrupulously complied with.   The letter  of allotment as

also the letter of offer of possession must be read conjointly.  The very

fact that not only the amount specified therein was required to be paid in

instalments  but  also  with  interest  at  the  rate  of  18% per  annum, was

required to be borne in mind.   Thus, in a case where the allottee had

complied  with  the  terms  of  allotment  in  the  matter  of  payment  of

instalments,  the  same  would  be  a  relevant  factor  for  exercising  the

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enabling  clause  of  resumption  by  a  ‘State’.   Not  only  that,  a  further

opportunity was required to be given to  the allottee even if  there was

some default on its part inasmuch as the appellant itself provides for levy

of penalty.  The power of resumption, thus, must be resorted to only in a

case where despite grant of the opportunities contemplated in terms of

the letter of intent were violated.   

Despite  issuance  of  letter  of  offer  of  physical  possession  dated

20.12.2001, the fact that actual possession had not been handed over for

a period of two years is not in dispute.  The Corporation did not say that

actual possession was not taken by the respondent despite offer having

been made in that behalf.  It, in its anxiety to set a time limit for ensuring

that the commercial production starts at an early date, was expected at

least to send a reminder.  It failed and/ or neglected to do so.  For the

purpose of approval of the building plan, the time taken by it also would

have been a relevant factor for passing an order of resumption.

We  although  do  not  intend  to  lay  down  a  law  that  all  the

aforementioned  period  should  be  excluded  from  computation  for  the

purpose of grant of notice of resumption, but there cannot be any doubt

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whatsoever that while judging the conduct of the parties, the appellant

was obligated to judge its own conduct in the matter.   

A  law  far  less  a  contract  does  not  warrant  compliance  of  the

contractual or statutory obligations where it  is otherwise impossible to

do.   An entrepreneur  may start  raising  constructions  over  a plot  only

when the physical  possession  thereof is  handed over  and/  or  plan  for

construction  of  the  building  is  approved.   A  State  cannot  ignore  the

aforementioned relevant factors.

It  may be  true  that  ordinarily  in  a  matter  of  enforcement  of  a

contract qua contract, a writ court shall not exercise its jurisdiction under

Article 226 of the Constitution of India.  But, it is also trite that where

the action of a State is violative of Article 14 of the Constitution of India

as  being  wholly  unfair  and  unreasonable,  the  writ  court  would  not

hesitate to grant relief in favour of a person, where both law and equity

demands that such relief should be granted.

Appellant being a “State” within the meaning of Article 12 of the

Constitution  of  India,  it  without  a  justification  cannot  make  any

discrimination  when  the  parties  are  similarly  situated.   [See  Mahabir

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Auto Stores and Others Vs. Indian Oil Corporation and Others [(1990) 3

SCC 752, para 12]

Moreover, the act on the part of the respondent must be a reasonable

one.   [See  Bharat  Petroleum Corporation Ltd. Vs.  Maddula Ratnavalli

and Others [(2007) 6 SCC 81, para 16]

This Court in ABL International Ltd. and Another v. Export Credit

Guarantee Corporation of India Ltd. and Others [(2004) 3 SCC 553] laid

down the law in the following terms:

“28.  However,  while  entertaining  an objection  as  to  the  maintainability  of  a  writ petition under Article 226 of the Constitution of India,  the  court  should  bear  in  mind  the  fact that the power to issue prerogative writs under Article  226  of  the  Constitution  is  plenary  in nature  and  is  not  limited  by  any  other provisions of the Constitution. The High Court having  regard  to  the  facts  of  the  case,  has  a discretion to entertain or not to entertain a writ petition.  The  Court  has  imposed  upon  itself certain restrictions in the exercise of this power. (See  Whirlpool  Corpn. v.  Registrar  of  Trade Marks)  And  this  plenary  right  of  the  High Court  to  issue  a  prerogative  writ  will  not normally  be  exercised  by  the  Court  to  the exclusion  of  other  available  remedies  unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional  mandate  of  Article  14  or  for other  valid  and  legitimate  reasons,  for  which

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the  Court  thinks  it  necessary  to  exercise  the said jurisdiction.”

[See  also  Sanjana  M.  Wig v.  Hindustan  Petroleum Corpn.  Ltd.

(2005)  8  SCC 242  and  Noble  Resources  Ltd. v.  State  of  Orissa  and

Another (2006) 10 SCC 236]

In  Kumari  Shrilekha  Vidyarthi  and Others v.  State  of  U.P.  and

Others [(1991) 1 SCC 212], this Court opined that even in contractual

matters the State cannot act arbitrarily, stating:

“31…This  decision  clearly  shows  that  no doubt was entertained about the applicability of Article  14 of the  Constitution  to  an action  of the State or its instrumentality, even where the action was taken under the terms of a contract of tenancy which alone applied by virtue of the exemption  granted  under  the  Rent  Act excluding  the  applicability  of  the  provisions thereof.”

Referring  to  M/s  Dwarkadas  Marfatia  and  Sons v.  Board  of

Trustees of the Port of Bombay [(1989) 3 SCC 293], this Court held:

“24.  The  field  of  letting  and  eviction  of tenants is normally governed by the Rent Act. The Port Trust is statutorily exempted from the operation  of  the  Rent  Act  on  the  basis  of  its public/governmental  character.  The  legislative assumption  or  expectation  as  noted  in  the observations  of  Chagla,  C.J.  in  Rampratap

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Jaidayal  case  cannot  make  such  conduct  a matter  of  contract  pure  and  simple.  These corporations  must  act  in  accordance  with certain  constitutional  conscience  and  whether they have  so  acted,  must  be  discernible  from the  conduct  of  such  corporations.  In  this connection,  reference  may  be  made  on  the observations  of  this  Court  in  Som  Prakash Rekhi  v.  Union  of  India  reiterated  in  M.C. Mehta v. Union of India wherein at p. 148 this Court observed: (SCC p. 480, para 55)

“It  is  dangerous  to  exonerate  corporations from the need to have constitutional conscience ;  and  so,  that  interpretation,  language permitting,  which  makes  governmental agencies,  whatever  their  mien,  amenable  to constitutional  limitations  must  be  adopted  by the court as against the alternative of permitting them to flourish as an imperium in imperio.”

25.  Therefore,  Mr  Chinai  was  right  in contending  that  every  action/activity  of  the Bombay  Port  Trust  which  constituted  “State” within Article 12 of the Constitution, in respect of any right  conferred or privilege granted by any statute is subject to Article 14 and must be reasonable  and  taken  only  upon  lawful  and relevant grounds of public interest.”

When time granted is flexible, the constructions of the term may

not lead to a conclusion that it is imperative in character.  In M/s. Jagdish

Chand Radhey Shyam v. The State of Punjab and Others [(1973) 3 SCC

428],  this  Court  while  interpreting  Sections  8 and 9 of the  Capital  of

Punjab  (Development  and  Regulation)  Act,  1952  in  the  context  of

Article 14 and 19(1) (f) of the Constitution of India, held as under:

20

“13. Section 9 speaks of resumption of the site or building by the Estate Officer and forfeiture of  the  whole  or  part  of  the  money  paid  on account  of  consideration  in  the  case  of  non- payment of consideration money or instalment or breach of any condition of transfer or breach of any rule. 14. Under the ordinary law of the land it is open to the Government to enforce the charge and to recover  the  due  on  consideration  money, instalments  or  any  other  due  from  the transferee.  It  is  also  open  to  the  Government under Section 8 of the Act to proceed against the  transferee  to  realise  the  amount  due  on consideration  money  or  on  instalment  or  any other due as an arrear of land revenue. Section 8  provides  penalty  for  default  in  payment  of money  and  the  recovery  of  the  same  as  an arrear  of  land  revenue.  These  remedies  are deterrent and drastic. 15. Section  9  of  the  1952  Act  empowers  the Government to forfeit the whole or any part of the  money  in  case  of  non-payment  of consideration  money  or  instalments  or  other dues  for  breach  of  covenants.  Under  the ordinary law of the land there is relief against forfeiture for breach of covenant or provisions. Section  9  does  not  offer  any  relief  against forfeiture. This feature that the Government can proceed  either  under  the  ordinary  law  of  the land or under the 1952 Act shows that there is discrimination. There is nothing in the statute to guide the exercise of power by the Government as to when and how one of the methods will be chosen.  16. Section 9 confers power to resume the site. There  is  a  charge  on  the  land for  the  unpaid consideration  money.  This  charge  can  be enforced by instituting a suit in a court of law.

21

The owner will have the opportunity of paying the  money  and  clearing  the  property  of  the charge.  On  the  other  hand  when  the Government  proceeds  under  Section  9  of  the Act,  to  resume  the  land  or  building  the Government proceeds under the Punjab Public Premises  and  Land  (Eviction  and  Rent Recovery) Act, 1959. There is no guidance in the Act, as to when the Government will resort to either of the remedies.”

Although  the  provisions  of  the  aforementioned  Act  are  not

applicable in the instant case, Jagdish Chand (supra) is being referred for

showing that when two remedies to enforce a contract are available, the

power  should  be  exercised  in  reasonable  manner.   So  construed,  a

harsher remedy may not ordinarily be resorted to.

The  learned  Additional  Solicitor  General  places  strong  reliance

upon a decision of this Court in Indu Kakkar v. Haryana State Industrial

Development Corporation Ltd. and Another [(1999) 2 SCC 37].  Therein

the lady had assigned her interest.  One of the questions which arose for

consideration was as to whether such transfer was valid having regard to

the locus standi of the appellant therein.  What was emphasized was that

as a rule the party cannot transfer its liabilities under the contract without

consent  of the other  party.  It  was in the aforementioned context,  this

22

Court  considered the  question  of  locus  standi  of  the  appellant  therein

holding:

“19.  In  fact,  the  question  is  not  whether there is any legal bar for the allottee to make assignment  of  the  plot.  The  real  question  is whether the assignee has a legal right to claim performance of any part from the allottor. The answer of the said question depends upon the terms of allotment. Assignment by an act of the parties  may cause  assignment  of  rights  or  of liabilities under a contract. As a rule, a party to a  contract  cannot  transfer  his  liabilities  under the  contract  without  consent  of  the  other party…”

The  said  decision,  in  our  opinion,  cannot  be  said  to  have  any

application.   

Reliance  has  also  been  placed  on  Orissa  State  Financial

Corporation v. Narsingh Ch. Nayak and Others [(2003) 10 SCC 261] for

the proposition that a writ court would not direct writing off the amount

due or waiver of the interest, stating:

“…The order, to say the least,  was beyond the scope of the writ petition which was being considered by the High Court and beyond the jurisdiction of the Court in a contractual matter. No  doubt,  while  exercising  its  extraordinary jurisdiction  under  Article  226  of  the Constitution the High Court has wide power to pass  appropriate  order  and  issue  proper

23

direction  as  necessary  in  the  facts  and circumstances of the case and in the interest of justice.  But  that  is  not  to  say  that  the  High Court can ignore the scope of the writ petition and  nature  of  the  dispute  and  enter  the  field pertaining  to  contractual  obligations  between the parties and issue such directions annulling the  existing  contract  and  introducing  a  fresh contract in its place.”

The High Court, in our opinion, has not re-written the contract nor

waived the rights and obligations of the parties.   

We  may  notice  that  in  Teri  Oat  Estates  (P)  Ltd. v.  U.T.,

Chandigarh and Others [(2004) 2 SCC 130], a Bench of this court while

interpreting  the  provisions  of  Section  8-A  of  the  Capital  of  Punjab

(Development  and  Regulation)  Act,  1952  opined  that  power  of

resumption and forfeiture should be taken recourse to as  a last  resort.

While holding that each case may have to be viewed on its own facts, the

action  of  the  statutory authority  must  be  judged on the touchstone  of

Article 14 of the Constitution of India.   

This Court applied the doctrine of proportionality having regard to

a large number of decisions operating in the field.  This Court, however,

24

also  put  a  note  of  caution  that  no  order  should  be  passed  only  on

sympathy or sentiment.   

Doctrine  of  proportionality  has  since  been  applied  in  Sandeep

Subhash Parate v.  State of Maharashtra & Ors. [(2006) 8 SCALE 503]

and  Jitendra  Kumar  &  Ors. v.  State  of  Haryana  &  Anr. [2007  (14)

SCALE 125 : (2008) 2 SCC 161].

In  State  of  Bihar  and  Others v.  Kameshwar  Prasad  Singh  and

Another [(2000) 9 SCC 94] whereupon strong reliance has been placed

by Mr. Jaspal Singh to contend that in a given case, this court may not

exercise  its  discretionary  jurisdiction  under  Article  136  of  the

Constitution of India even if the order is found to be illegal.  This court

was concerned with a service matter.  It was held:

“36.  It  is  further  contended  that  as  the respondent  was,  in  the  meantime, appointed/promoted in the IPS cadre and as per requirements  of  the  State  Government  he  has already submitted his resignation from the State service, the acceptance of the appeal and setting aside  the directions  of  the  High  Court  would result  in great hardship to him and amount to unsettling his settled service rights particularly when  his  promotion/appointment  to  the  IPS cadre  has  not  been  challenged  and  is  not  in dispute.  Such  a  plea  by  itself  cannot  be accepted as a ground to dismiss the appeal filed

25

against  an  order  which  we  have  held  to  be illegal  being  contrary  to  law and  the  Service Rules applicable in the case. Once the judgment is  set  aside,  the  consequences  have  to  follow and a person taking advantage or benefit of the wrong  orders  is  to  suffer  for  his  own  faults which  cannot  be  attributed  to  anybody  else. However,  in  appropriate  cases  this  Court  can mould the relief to safeguard the interests of a person wherever required. For doing complete justice  between  the  parties,  appropriate directions can be given to protect the interests of  a  person  who  is  found  to  have  been conferred the benefits  on the  basis  of judicial pronouncements  made  in  his  favour.  As  the appellant  State  has  been found to  be  careless and  negligent  in  defending  its  cases,  we  feel and are inclined to protect the interests of Brij Bihari  Prasad  Singh,  respondent.  We  are convinced that the interests of justice would be served by holding that despite setting aside the judgments  of  the  High Court,  his  interests  be protected  by  not  disturbing  his  promotions made from time to  time. However,  judgments passed in his favour cannot be permitted to be made a  basis  for  conferment  of  similar  rights upon other persons who are shown to have filed writ  petitions  or  representations  which,  if accepted,  are  likely  to  adversely  affect  the interests of more than 150 Inspectors and 400 officers in the rank of Deputy SP. Similarly, if any benefit has been conferred upon any other person  who  has  superannuated,  no  useful purpose  would  be  served  by  directing  his demotion  retrospectively  and  recovery  of  the excess emoluments paid to him.”

26

Indisputably, the court can balance the equities between the parties

but the same does not necessarily mean that in all cases this Court should

refuse  to  exercise  its  discretionary  jurisdiction.   Each  case  must  be

considered on its own merit and no hard and fast rule can be laid down

therefor.

We  would  consider  the  question  about  the  balancing  equities

between the parties in each individual case.

In a case of this nature, this Court in exercise of its jurisdiction

under  Article  142  of  the  Constitution  of  India  may  also  consider

rendition  of  individualized  justice.   [See  Shyam  Nandan  Prasad  and

Others v. State of Bihar and others (1993) 4 SCC 255]

Our  attention  has  been  drawn to  the  fact  that  the  Punjab  High

Court in some of the matters in Jaisy Designs v. MD. HSIDC [decided on

4th July, 2006] had issued similar  directions.   A Bench  of  this  Court,

however, dismissed the special leave petition being SLP (C) No. 12074

of 2006 by an order dated 7.08.2006.

 However, another Bench of this Court in Civil Appeal arising out

of SLP (C) No. 20235 of 2007, presumably, without noticing the said

27

order directed issuance of notice by an order dated 4.12.2006.  Following

the said decision, even other Benches had issued notice in other matters

including Civil Appeal arising out of SLP (C) No. 14074 of 2006.

Reliance has  been placed on  State of Kerala and Others v.  P.T.

Thomas [(2005)  12  SCC 347]  where  this  Court  having  regard  to  the

orders  passed  in  number  of  cases  in  regard  to  payment  of  interest

dismissed the appeals inter alia taking into consideration the said factor.

However, in P.T. Thomas (supra) it was not the sole consideration.  This

Court noticed that payment of interest was not an issue in the main writ

petition and that was the principal reason in dismissing the appeal.

We have  noticed  hereinbefore  that  in  Kameshwar  Prasad  Singh

(supra),  this  court  made a clear  distinction  between an order  which is

illegal and, thus, the order being illegal the benefit thereof would not be

extended to persons similarly situated on the premise that Article 14 is a

positive concept.

In the  instant  case,  the High Court’s  jurisdiction  is  in  question.

The learned counsel for the parties have addressed us at great length on

the individual merit of the matter.

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We, therefore, are of the opinion that on the said ground alone, we

would not refuse to interfere.

In Civil  Appeals  arising out of SLP (C) No. 17426 of 2006, no

opportunity  had been given to  the appellants  to  file  counter  affidavit.

Even the High Court had proceeded on the basis that equity demands that

they should be given some extension  of  time to  perform their  part  of

contract.   It  was submitted that even the doctrine of proportionality is

applicable in these cases in view of the decision of this Court in Teri Oat

Estates (P) Ltd. (supra).  

The conscious decision taken by the appellant that all allotments

should  be regularized  in  the event  the respondents  pay the  difference

between the amount which has already been paid and the rate prevailing

on the date of judgment of the High Court should be made applicable.   

The learned counsel would contend that even for the said purpose,

suitable instalments could be fixed.

CIVIL APPEAL @ SLP (C) No. 19949 of 2006  HSIDC v. Sanjay Bansal

29

Respondents herein are directors of M/s. Shiv Shakti Embroidery

Pvt. Ltd. (Company).  The Company was allotted an industrial plot.  An

additional  facility  was  granted  to  the  industrial  undertakings  for

allotment  of  residential  plots  for  their  directors.   Pursuant  to  and  in

furtherance of  the said policy decision  to  grant  additional  benefit,  the

respondents were allotted residential plot No. 331 in Sector 1, Manesar.

The  terms  and  conditions  provided  for  a  schedule  of  payment,  the

relevant clauses whereof read as under:

“3. The balance amount of Rs. 10,69,200/- of the  tentative  price  of  the  plot  can  be  paid  in lumpsum without interest within 60 days from the date of issue of the allotment letter or in six (6)  half  yearly  installments.   The  first installment will fall due after the expiry (6) six months of the date of issue of this letter.  Each installment would be recoverable together with the interest on the balance price at 15% interest on  the  remaining  amount  the  interest  shall, however,  accrue  from  the  date  of  offer  of possession.

4. You are requested to remit Rs. 1,78,200/- in order to make the 25% price of the said plot within 30 days (upto 17.08.09) from the date of issue of this letter.  The payment shall be made by  the  Bank  Draft  payable  to  the  HSIDC, Panchkula and drawn on any scheduled bank at Panchkula.  In case of failure to deposit the said amount within the above specified period, the allotment  shall  be  cancelled  and  the  10% earnest  money  deposited  alongwith  the application shall stand forfeited to the HSIDC

30

against  which  you  shall  have  no  claim  for damage.

5. The  balance  75%  amount  i.e.  Rs. 8,91,000/- of the above price of the plot can be paid  in  lumpsum  without  interest  within  60 days  from the  date  of  issue  of  the  allotment letter  or in half  yearly installments.   The first installment will fall due after the expiry of six months of the date of issue of this letter.  Each installments  would  be  recoverable  together with interest @ 15% interest per annum on the remaining amount as mentioned in clause No. 21.”

Payments  were  made  in  the  name  of  the  Company  although

allotment  had  been  made  in  the  individual  names of  the  respondents

herein.  The allotment of the said plot was cancelled on the premise that

payment has not been made in terms of Clauses 4 and 5 of the offer of

allotment dated 18.07.2003.  A proceeding for resumption was initiated

and by an order dated 1.06.2004, the said plot was resumed.  Aggrieved

by and dissatisfied therewith, a writ petition was filed.   

The respondents in their rejoinder averred:

“…Upon cancellation of the allotment of plot in question, the said plot was included in the list of plots available for allotment and pursuant to invitation of applications for allotment of plots by way of advertisement in Newspapers, a draw of  lots  was  held  on  1.6.2004,  wherein  215

31

residential  plots including the plot in question were  further  allotted  and  the  plot  in  question stands  allotted  to  Shri  Suresh  Chand  Jain  s/o Shri  Hussan  Lal  Jain,  resident  of  E-12, Bahubali  Enclave,  Near Geetanjli  Apartments, Karkardooma, New Delhi.  Hence, the present petition is liable to be dismissed on account of this score alone.”

However,  the  said  subsequent  allottee  was  not  impleaded  as  a

party.  The High Court allowed the writ petition on the premise that the

respondents had deposited a sum of Rs. 1,78,200/- and in view of Clause

3 of offer of allotment, it was for them to make payment in terms thereof.

In regard to the purported conflict  between Clauses 3 and 4, the High

Court opined:

“If  clause  3  is  in  conflict  with  clause  4,  the petitioners cannot be blamed to have opted for the  concession  available  to  them in  clause  3. At no point of time, the respondent Corporation had ever chosen to  clarify that  the  petitioners were required to make the payment exclusively in terms of clause 4 of the letter of allotment. On  account  of  inconsistency  between  the provisions  of  clauses  3 and 4 of  the  letter  of allotment,  confiscatory  orders  of  cancellation could not have been passed by the Corporation against the petitioners.

At this stage, we may notice that even as per the petitioners  and as per  the schedule  of payment, by way of instalments, the petitioners were  liable  to  make  payment  of  the  entire amount  of  plot  upto  July 2,  2006.   However,

32

they could not make the payment of instalments on account of cancellation order and on account of  the  fact  that  the  present  writ  petition  has been pending in this Court.

We further  notice  that  a  plea  raised  by the petitioners is  that the order  dated October 28,  2004  had  never  been  communicated  to them.   The  petitioners  have  even  maintained that the said order had been ante-dated by the Corporation.  The respondent Corporation has however  maintained  that  the  said  order  was duly  passed,  although  no  details  have  been given as to when the said order had ever been communicated to the petitioners.  We must also take note of the pleas raised by the respondent Corporation  that  in  pursuance  to  an advertisement  on  March  2,  2004,  215 residential  plots  including  plot  No.  331  had been allotted  by way of  draw of lots  held on June 1, 2004.  However, no details of any such allottee  have  been  given  in  the  written statement.  While issuing notice of motion, this Court  had  specifically  directed  that  the  re- allotment of the land allotted to the petitiones would  be  subject  to  the  final  decision  of  the case.”

We agree with the High Court that Clause 3 of the said offer of the

order of allotment dated 18.07.2003, on the one hand, and Clauses 4 and

5, on the other, are irreconcilable.  Payment to be made under Clause 3

cannot be subject to the stipulations contained in Clauses 4 and 5.  They

are independent of each other.  The allottee in terms of Clause 3 had an

option.  Mode of payment in terms of Clause 3, on the one hand, and

33

Clauses 4 and 5, on the other, are distinct and different.  However, the

High Court  was  not  correct  when it  directed  that  re-allotment  of  land

would be subject to the final decision of the case.

Cancellation of plot as also reallotment thereof had been made in

June 2004.  The writ petition was filed in July, 2005.  The subsequent

allottee,  therefore,  was  a  necessary  party  and  in  his  absence  the  writ

petition should have been dismissed as not maintainable.   

This Court in Rashmi Mishra v. M.P. Public Service Commission

and others [(2006) 12 SCC 724] observed:

“16. In Prabodh Verma this Court held: (SCC pp.   273-74, para 28)  “The  first  defect  was  that  of  non-joinder  of necessary parties. The only respondents to the Sangh’s petition were the State of Uttar Pradesh and  its  officers  concerned.  Those  who  were vitally  concerned,  namely,  the  reserve  pool teachers, were not made parties — not even by joining  some  of  them  in  a  representative capacity, considering that their number was too large for all of them to be joined individually as respondents. The matter, therefore, came to be decided in their absence. A High Court ought not to decide a writ petition under Article 226 of  the  Constitution  without  the  persons  who would be vitally affected by its judgment being before it as respondents or at least by some of them  being  before  it  as  respondents  in  a representative  capacity  if  their  number  is  too

34

large, and, therefore, the Allahabad High Court ought  not  to  have  proceeded  to  hear  and dispose  of  the  Sangh’s  writ  petition  without insisting upon the reserve pool  teachers  being made  respondents  to  that  writ  petition,  or  at least some of them being made respondents in a representative capacity, and had the petitioners refused to do so, ought to have dismissed that petition for non-joinder of necessary parties.”  (See also All India SC & ST Employees’ Assn. v.  A. Arthur  Jeen and Indu  Shekhar  Singh v. State of U.P.)”  

By reason of the judgment of the High Court, the right of a third

party has been affected.  He without having been impleaded as a party in

the writ petition cannot suffer an adverse order for which he is no way

responsible.   A  statement  has  been  made  before  us  by  the  learned

Additional  Solicitor  General  that  no  residential  plot  is  available  for

allotment.   He,  however,  submits  that  as  and  when  such  a  plot  is

available, the same would be offered to the respondent.  We may place

on record  the aforementioned submission.   However,  we feel  that  the

respondents  were  not  to  be  blamed  for  not  depositing  the  amount.

Invocation  of  Clause  4  is  clearly  illegal.   We,  therefore,  are  of  the

opinion that the respondent should be suitably compensated on monetary

terms.  We direct the appellants to pay a sum of Rs. 1,00,000/- to the

respondents herein.  We, however, also direct that keeping in view the

statements  made at the Bar, as and when any residential  plot becomes

35

available,  the same should be allotted to the  respondents  on the same

terms.

Civil Appeal arising out of SLP (C) No. 19949 of 2006 is allowed

in part and to the extent mentioned hereinbefore.  

Civil Appeal arising out of  SLP(C) No. 19916 of 2006  H.S.I.D.C. & Anr. v.. Mr. Ved Govil & Anr.

Respondent  applied  for  and  was  allotted  an  industrial  plot  at

Manesar,  Gurgaon  by  the  Appellant  Corporation.    Indisputably,  it

deposited a sum of Rs. 3,96,000/- being 10 per cent of the total cost of

the said plot.  It, however, was not satisfied with the said allotment.  A

prayer was made to change the plot which was accepted by the appellant

Corporation.   He was allotted a plot No. 269 in Sector 7 on or about

9.7.2004.  They were, however, not satisfied with the said allotment and

made another representation for change of plot.  On or about 21.9.2004,

the appellant deposited an amount of Rs. 6,00,000/- towards 15% of the

total price of the plot.   He was, however, required to deposit the said

amount  by  22.7.2004  which  was  extendable  by  another  30  days  on

36

interest  at  11%  per  annum  after  22.7.2004,  but  he  failed  to  do  so.

Appellant took a stand that the letter of allotment elapsed automatically.

The amount of Rs. 3,96,000/-  was directed to be refunded.  The bank

draft sent by the respondent for an amount of Rs. 6,00,000/- was also

returned.   The respondent filed a Writ Petition.

The High Court was of the opinion that although respondent was

required to deposit 15% of the price of plot on or before 22.7.2004, but

by  clause  3  of  the  Letter  of  Allotment,  the  said  amount  could  be

deposited by him within 60 days.   The High Court accepted that there

had been a delay on the part  of the appellant.   The interim order was

passed directing the appellant to re-allot the plot, however the same was

not allotted.   The High Court directed:

“Keeping in  view the facts  and circumstances of the  case,  as  noticed  in  the  above  portion  of  the judgment, we allow the present petition and restore the allotment of plot No. 269, Sector 7, Manesar to the  petitioner  as  per  original  terms of  allotment. Since the petitioner was required to pay the entire amount, even by way of instalments upto January 16,  2007,  therefore,  the  petitioner  is  directed  to make  the  total  payment  of  the  entire  amount towards the cost  of the plot  in question within a period  of  three  months  from the  date  a  certified copy of this order is received.  On receipt of the entire payment,  the actual  physical  possession of the  plot  in  question  shall  be  handed  over  to  the

37

petitioner.   The petitioner shall,  however,  remain bound by all the terms and conditions of the letter of allotment.”

It is a clear case where the respondents have failed to abide by any

of the terms of contract.   It did not deposit even the initial amount in

time, there was no reason for it not to do so.  Even interest payable on the

said  amount  had  not  been  paid.   The  appeal  should,  therefore,  be

allowed.

Civil Appeal arising out of SLP(C) No. 19833 of 2006  H.S.I.D.C. & ORS. v. M/s. Paradise Engineers & Anr.  

A plot admeasuring 1012 sq. meters being plot No. 985, Sector-6,

Manesar was allotted in favour of the respondent.   He requested for a

change of plot.    However, a regular letter of allotment was issued on

23.1.2001.   The final agreement was entered into on or about 20.9.2001.

However, possession was delivered on 31.10.2001.

On the premise that respondent has not complied with the terms

and  conditions  of  the  agreement,  a  notice  was  issued  on  17.4.2003.

Respondent, however, was asked to take physical possession of the land

and also to apply for extension for the purpose of starting construction by

38

the  Estate  Manager  of  the  appellant  Corporation  by  a  letter  dated

24.4.2003.  Pursuant thereto physical possession was said to have been

handed over on 6.5.2003.   Respondent, thereafter applied for grant of

water  connection  on  1.7.2004.    He  submitted  his  building  plan  on

10.7.2004.  Alleging that the ownership is in dispute, the plan was not

sanctioned. The Town Planner of the appellant asked the Senior Manager

of the Corporation to ascertain ownership status before the building plans

could  be  cleared.   From an  internal  communication  dated  21.7.2004,

however,  it  appears  that  building  plans  were  not  processed  on  the

premise that ownership clearance had not come from the Corporation. By

a letter  dated  23.8.2004,  respondent  informed the  concerned  authority

that the request of clearance of ownership status was being pursued with

the authorities of the appellant.  

A show cause notice  for resumption of the  plot,  however,  was

issued  on or  about  21.9.2004  alleging that  construction  work  had not

been started within a period of one and a half year of the handing over of

the possession and some amount was outstanding.

Respondents in their show cause, brought the aforementioned fact

to the notice of the concerned authority of the appelalnt.  It was requested

39

that  the  excess  period  for  starting  construction  may  be  waived  by

imposing some penalty.  An assurance was given to start construction on

clearance of building plan and ownership status.  It was pointed out that

the sum of Rs. 14,30,940/- had already been deposited.

Respondent filed a further reply on 22.12.2004.  No opportunity of

personal hearing was granted. By an order dated 7.3.2005, an order of

resumption was issued.  However, despite the same, letters were written

by  the  appellant  communicating  the  respondent  in  respect  of  certain

errors  in  the  building  plans  as  would  appear  from  the  letters  dated

8.4.2005 and 10.11.2005.  

Building plans were re-submitted by the respondent on 14.12.2005

whereto again some defects were pointed out therein.   In the meantime,

the  appellant  preferred  an  appeal  which  was  dismissed  by  the

Commissioner by an Order dated 16.2.2006.    

A  Writ  Petition  was  filed  which  by  reason  of  the  impugned

judgment has been allowed.

40

In  the  Writ  Petition  inter  alia  a  contention  was  raised  that  the

appellant  had  regularized  the  delay  by  extending  the  period  of

construction  even  for  a  period  of  four  years  in  favour  of  the  parties

named therein which was not denied or disputed.  It claimed parity with

the  decision  of  the  High Court  in  case  of  M/s.  Jassi  Designs  Versus

Managing Director, HSIDC and Others being C.W.P. No. 4530 of 2005.

The SLP preferred thereagainst has been dismissed.

Mr. Prasenjit Keswani, the learned counsel appearing on behalf of

the respondent would submit;

(i) The principles of natural justice have not been complied with as

no opportunity of personal hearing was given to it.   The order

of resumption did not contain any reason, there is  nothing to

show that the points  raised deserved due consideration at the

hands of the concerned authorities.   

(ii) The  respondent  had  been  discriminated  with  insofar  as  the

persons similarly situated had been granted extension even for

a period of four years and thus the respondent was not meted

with equal treatment.   

(iii) Appellants  could  have  cleared  the  building  plan  as  the same

was filed within the stipulated period.

41

(iv) Appellant cannot take benefit of their own wrong.   

(v) All dues with interest have already been paid.

In view of  clause  10  of  the  contract,  the  respondent  being  not

permitted  to  transfer  the  land,  it  was  bound  to  engage  itself  only  in

industrial activity wherefor the allotment was obtained.  

In this case, the respondent has clearly been discriminated against.

Appellant’s action is clearly unfair and unreasonable.  In any event, it has

waived  its  right.   Furthermore,  it  was  a  case  where  the  principles  of

natural justice should have been complied with.

The High Court in, this case, in its impugned judgment has taken

care  to  see that  the  object  for  grant  of  allotment  were fulfilled  being

promotion of industrial growth.  

Applying the principles of law as indicated hereinbefore, we are of

the opinion that no case has been made out for our interference with the

impugned judgment.  This appeal is, therefore, dismissed.

Civil Appeal arising out of SLP(C) No. 20235 of 2006  H.S.I.D.C. & Ors. Vs. Mr. Anand Minda & Anr.

42

Respondent applied for and was allotted an industrial plot vide its

Regular  Letter  of  Allotment  dated  29.8.2001  at  IMT,  Manesar.

Thereafter,  a final Agreement was entered into between the parties  on

24.9.01. On 4.11.01, physical possession was offered to the respondent,

which  was  not  taken.  Allegedly,  no  construction  was  started  by  the

respondent.  

On  16.7.02,  the  appellant  issued  a  show  cause  notice  to  the

respondent for its failure to take possession and set up the industrial unit.

Respondent vide its letter dated 24.2.03 requested the appellant for

handing  over  the  possession.  In  response  thereto,  the  respondent  was

asked to clear the outstanding dues in regard to the second installment.

Subsequently,  the  appellant  by  its  letter  dated  14.5.03,  asked  the

respondent  to attend its  office to take over the possession of the plot.

Despite  being  handed  the  possession  on  17.6.03,  no  construction  was

commenced by the respondent.  On 29.10.03,  a show cause notice was

issued  to  the  respondent  for  failure  to  commence  construction.

Respondent  vide  its  letter  dated  7.11.2003,  requested  for  six  months

extension. Thereafter, on 7.10.2004, a show cause notice was issued to

43

the respondent as to why an order of resumption should not be passed

against  him. On the failure of  the respondent  to satisfy the concerned

authority with regard to the delay in commencement of the construction,

the  plot  was  ordered  to  be  resumed  vide  letter  dated  28.2.05.  The

resumption order was challenged before the Commissioner of Industries,

who, vide its order dated 13.1.2006, dismissed the same.  

Feeling aggrieved by the order, the respondent herein filed a Writ

petition  before  the  High  Court.  The  High  Court  by  its  order  dated

28.7.2006,  allowed  the  said  Writ  Petition  and  quashed  the  order  of

resumption.

Respondent had already appointed an architect for construction of

the building.  It had already started constructions.  The fact that it was the

Department which did not grant any license. The Appellate Committee,

however, did not consider this aspect of the matter at  all  and thus the

appellate orders suffered from total non-application of mind.

This Appeal is, therefore, dismissed.  

44

We may now consider the cases where the High Court passed an

order without assigning sufficient and cogent reasons.  It did not arrive at

a finding of fact that the action on the part of the appellants was unfair

and unjust.  We intend to notice the fact of these matters separately.

Civil Appeal arising out of SLP (C) No. 16541 of 2006  HSIDC v. S.R. Polysteel

Respondent  applied  for  and  was  allotted  an  industrial  plot  in

Industrial Estate IMT, Manesar, by the Appellant Corporation. Allegedly,

a dispute arose as regards handing over of the actual possession of the

said plot. Respondents contend that the entire 1st installment along with

interest was duly paid within the stipulated time except for delay of 22

days. Indisputably, the appellant offered the respondent possession of the

plot and asked to commence construction by its letters dated 19.12.2001,

9.8.2002 and 11.11.2003. Respondents contend that though a request was

made  to  hand  over  possession  by its  letter  dated  2.8.02  however,  the

same was not granted.   

Two show-cause notices dated 1.3.05 and 19.5.05 were issued by

the appellant to the respondent. After giving an opportunity of personal

hearing  to  the  respondent,  the  said  plot  was  resumed  on  7.7.05.

45

Respondent  filed  a  Writ  Petition  before  the  High  Court  which  was

disposed  of  on  8.08.2006  directing  the  allottee  to  appear  before  the

Appellate  Authority.  Thereafter,  the  appellate  authority  dismissed  the

said appeal. Respondent then filed a Writ Petition before the High Court.

The High Court while allowing the petition quashed the resumption order

and directed the respondent to complete the construction of the industrial

building  within  a  period  of  six  months  from the  date  of  offer  of  the

possession of the plot.  

Civil Appeal arising out of SLP (C) No. 16708 of 2006  HSIDC v. M/s. Dulari Exports

Respondent applied for and was allotted an industrial plot vide its

allotment  letter  dated  14.6.2000  at  IMT,  Manesar.  On  14.8.2000,  a

Regular Letter of Allotment was issued to the respondent which inter-alia

required it to commence construction of the building within a period of

one year and commercial production within a period of three years from

the date of offer of possession.  The said clause was also incorporated in

an  Agreement  dated  8.9.00  entered  into  between  the  two  parties.

Indisputably, on 24.12.01, the appellant issued a receipt for acceptance of

three  demand  drafts  to  the  respondent  towards  payment  of  the

installments.  On 8.1.03, a show cause notice was issued by the appellant

46

to the respondent regarding the failure to set up the industrial unit. On

1.1.04, a show cause notice was issued to the Respondent as to why the

said  plot  should  not  be  resumed  in  view  of  non-commencement  of

construction  and  non-payment  of  the  4th and  5th installments.  Being

dissatisfied  by the  reply  so  rendered  by the  respondent,  the  appellant

gave the respondent an opportunity of retaining the plot by allowing him

to convey his acceptance to buy the plot at the current price of Rs. 2200/-

per sq. meter.  

Aggrieved by the order of resumption, the respondent preferred an

appeal before the Commissioner of Industries on 9.2.04.  The said appeal

was  rejected  by  the  Commissioner  on  the  ground  that  the  order  of

resumption was not final. Aggrieved by the two orders, the respondent

filed a Writ Petition in the High Court.

The High Court while dismissing the Writ Petition on the ground

that  an  appeal  was  pending  before  an  appropriate  authority,  however

allowed  the  respondent  to  file  its  objections  against  the  order  of

resumption.   On  26.2.04,  the  respondent  filed  its  objections.  On

23.11.2004,  the  High  Court  dismissed  the  Writ  Petition  directing  the

appellant to consider and dispose off the objections. On 27.6.2005, the

47

objections were dismissed by the appellant on the ground that the said

plot had become liable for resumption. However, before resumption, an

opportunity was given to the respondent to retain the plot at the current

price of Rs. 2200/- per sq. meter. The same having not being accepted by

the  respondent,  the  objections  were  rejected  by the  appellant  and  the

amount was refunded as per the terms of the Agreement. Aggrieved by

the  said  order,  the  respondent  preferred  an  appeal  before  the

Commissioner. On 12.7.05, the appellant issued a letter to the respondent

intimating the withdrawal of the possession of the plot. Aggrieved by the

order and during the pendency of the appeal before the commissioner, the

respondent filed a Writ Petition before the High Court on 18.7.2005. On

8.5.2006,  the  High  Court  without  going  into  the  merits  of  the  case,

allowed the Writ Petition.

48

Civil Appeal arising out of SLP (C) No. 16711 of 2006   HSIDC v. Gopal Chand Kapoor

Respondent applied for and was allotted an industrial plot vide its

Regular  Letter  of  Allotment  dated  26.6.2000  at  IMT,  Manesar.  An

Agreement  containing  the  terms  and  conditions  of  the  allotment  was

executed between the two parties on 12.9.2000. Physical possession of

the plot was taken over on 28.2.2003.   

Civil Appeal arising out of SLP (C) No. 17426 of 2006  HSIDC v. Prateek Industries

Respondent applied for and was allotted an industrial plot vide its

Regular Letter of Allotment dated 22.10.1998 at Growth Centre Investate

Bawal, District Rewari. Physical possession of the plot was offered on

21.5.02. However, the respondent failed to take over the possession.  On

21.4.04,  the  appellant  issued  a  show-cause  notice  to  the  respondent

directing  him to  start  commence  construction  within  a  period  of  two

years and to implement the project on or before 21.5.05. The respondent

intimated the appellant that the construction would start immediately and

requested for a three year extension period. On 17.1.2005, the appellant

issued  a  show-cause  notice  to  the  respondent  for  delay  in  taking  the

physical  possession  of  the  plot  and  for  non-commencement  of

49

construction. Vide its letter dated 31.1.05 the respondent informed the

appellant that due to loss in its business, they were unable to continue

industrial activity and had decided to surrender the plot. It thus requested

for a refund. On 25.2.06, the respondent requested for a personal hearing.

After hearing the respondent in person, the appellant passed an order of

resumption.  Aggrieved  by the  said  order,  the  respondent  filed  a  Writ

Petition  before  the  High  Court.  By its  order  dated  25.8.06,  the  High

Court set aside the Resumption order.

Civil Appeal arising out of SLP (C) No. 18011 of 2006  HSIDC v. G.M. Precision

Respondent applied for and was allotted an industrial plot vide its

Regular Letter of Allotment (RLA) dated 13.3.02 at IMT, Manesar.  On

12.4.02,  a  final  Agreement  was  entered  into  between  the  parties

incorporating  the  terms  and  conditions  of  the  allotment  letter.  On

18.11.2003,  the  respondent  took  physical  possession  of  the  plot.  On

2.11.04, a show-cause notice was issued to the respondent on account of

its failure to commence construction and default in making the payment

of  the  4th and  5th installments.  Due  to  unsatisfactory  reply  of  the

respondent by his letter dated 14.12.04, the appellant resumed the plot by

its order dated 18.2.05. Aggrieved by the said order, the respondent on

50

11.11.1999 filed an appeal before the Financial Commissioner Industries.

The said appeal was dismissed by the commissioner on the basis that it

was devoid of any merit. Feeling aggrieved by the order of resumption

and the order dismissing the appeal, the respondent filed a Writ Petition

before the High Court. By an order dated 7.8.06, the High Court set aside

the order of resumption.

Civil Appeal arising out of SLP (C) No. 2331 of 2007  HSIDC v. Matesh Kumar Katyal

Respondent applied for and was allotted an industrial plot vide its

Regular  Letter  of  Allotment  (RLA)  dated  9.4.01  at  Kundli  Industrial

Estate.   On 11.04.01,  a final  agreement  was  entered  into  between the

parties  incorporating  the  terms and  conditions  of  the  allotment  letter.

Vide  its  letter  dated  3.5.01  the  appellant  offered  the  respondent  the

physical  possession  of  the  plot.  On  24.12.03,  the  appellant  issued  a

show-cause  notice  to  the  respondent  for  failure  to  commence

construction as well as commercial production within the stipulated time.

Respondent  on  grounds  of  illness  of  his  mother  and  other  financial

constraints requested for an extension to commence construction.   Vide

its letter dated 18.1.05 the appellant passed an order of resumption of the

plot  against  the respondent  and refunded his  cheque after  making the

51

necessary deductions.  Aggrieved by the  said order,  the  respondent  on

14.1.05  filed an  appeal  before  the  Financial  Commissioner  Industries.

Vide its letter dated 28.8.06, the appellant informed the respondent that

the commissioner had dismissed his appeal by an order dated 1.8.06 on

the ground that it was devoid of any merit.  Being aggrieved by the order

of resumption and the order dismissing the appeal, the respondent filed a

Writ Petition before the High Court. On 5.12.06, the High Court set aside

the order of resumption.

Civil Appeal arising out of SLP (C) No. 2702 of 2007  HSIDC v. At Home India P. Ltd.

Respondent applied for and was allotted an industrial plot vide its

Regular  Letter  of  Allotment  (RLA)  dated  24.5.04  at  IMT,  Manesar.

Allegedly,  the  petitioner  requested  the  appellant  vide  its  letters  dated

15.6.04 and 05.7.04 to change the site of the plot on the ground that the

area where it was so situated was not developed. Allegedly, on 19.8.04,

the respondent met the appellant for the change of plot who were then

informed that the plot could not be changed. On 22.7.04, the RLA lapsed.

On 23.8.04, the respondent remitted 15% of the cost of the plot. Vide its

letter dated 12.1.05, the appellant cancelled the allotment and refunded

the amount paid by the respondent on the ground that he had failed to

52

comply with clause 3 of the Allotment letter providing for the payment

and thus the RLA had lapsed automatically. On 19.1.05, the respondent

requested  the  appellant  to  reconsider  his  case.  Vide  its  letter  dated

21.3.05 the appellant informed the respondent that his request had been

rejected and refunded the amount so paid. Aggrieved by the said order,

the respondent preferred an appeal before the Commissioner of Industries

which by its order dated 13.1.06, dismissed the appeal. Aggrieved by the

order of the commissioner, on 4.9.06, the respondent filed a Writ Petition

before the High Court. The High Court by its order dated 5.12.06 while

allowing  the  Writ  Petition,  quashed  the  letter  dated  12.1.05  and  the

appellate order on the premise that the respondent had always showed his

eagerness to initiate construction and the delay in making the payment

had  been  on  account  of  a  genuine  belief  by  the  respondent  that  the

request for an alternative plot was pending before the appellant.  

Civil Appeal arising out of SLP (C) No. 2343 of 2007  HSIDC v. RMDK Projects

Respondent applied for and was allotted an industrial plot vide its

Regular  Letter  of  Allotment  (RLA)  dated  23.1.01  at  IMT,  Manesar.

Thereafter,  a  formal  Agreement  was  entered  into  between  the  parties

incorporating  the  terms  and  conditions  of  the  RLA.   Allegedly,  the

53

respondent  made  various  requests  to  the  appellant  for  delivering  the

physical possession of the plot after making necessary developments. On

19.12.01,  the appellant  issued a  letter  thereby offering  the  respondent

physical  possession  of  the  plot.  On  the  other  hand,  on  24.2.03,  the

appellant issued a notice to the respondent to show-cause why the plot

should not be resumed on account of its failure to comply with the terms

and conditions  of  the  allotment  letter.  Subsequently,  two more  show-

cause  notices  dated  13.10.03  and  8.12.03  were  issued.  Allegedly,  an

authorization letter dated 10.2.04 was issued to the respondent for taking

over the physical possession. Allegedly, the respondent by its letter dated

4.2.04 requested the appellant  to hand over the possession of the plot.

Thereafter by its letter dated 15.2.05, the respondent gave an undertaking

to the appellant  to commence construction immediately, if it  delivered

the possession of the plot. On 7.2.05, the appellant issued a notice to the

respondent to show-cause as to why the plot should not be resumed in

light  of  the  default  made.  On  being  unsatisfied  by  the  reply  of  the

respondent  vide  its  letter  dated  15.2.05  to  the  show-cause  notice,  the

appellant  passed an order  of resumption of the plot  on 7.7.05.   Being

aggrieved  by  the  said  order,  the  respondent  on  5.08.05  preferred  an

appeal  before  the  Commissioner  of  Industries.  Vide  its  letter  dated

19.4.06, the appellant informed the respondent that the commissioner had

54

dismissed his appeal by an order dated 13.1.06 on the ground that it was

devoid of any merit.  Being aggrieved by the order of resumption and the

order  dismissing  the  appeal,  on  25.6.06,  the  respondent  filed  a  Writ

Petition  before  the  High Court.  The High Court,  by its  judgment  and

final order dated 27.11.06, set aside the order of resumption.

Civil Appeal arising out of SLP (C) No. 2891 of 2007  HSIDC v. Trikuta

Respondent applied for and was allotted an industrial plot vide its

Regular  Letter  of  Allotment  (RLA) dated 30.6.99  at  Industrial  Estate,

EPIP,  Kundli.  On 18.1.00,  on  a  request  made  by the  respondent,  the

allotment of the said plot was changed due to a change in the constitution

of the respondent’s company. Subsequently, on 20.1.00, a supplementary

agreement was entered into between the parties. As per the terms of the

new Agreement, the respondent was to commence construction within a

period of  six months.  Appellant  issued two show-cause notices to the

respondent  dated  14.8.00  and  26.2.01  for  its  failure  to  commence

construction.  Vide  its  letter  dated  7.11.01,  the  respondent  sought

extension of time to start construction and commercial production.  

Upon  the  new  Industrial  Infrastructure  Development  Policy

coming into force, the appellant extended the time for implementation of

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the project  to three years i.e.  up to 29.6.02. Allegedly, the respondent

made  several  requests  by  its  various  letters  dated  26.2.03,  07.5.03,

18.5.03, 20.6.03 and 29.8.03 for extension of time which was purportedly

rejected or not  considered by the appellant.  On 22.1.03, a show-cause

notice was issued by the appellant  to the respondent to explain why a

resumption order should not be passed for non-erection of the building

within the stipulated time. After being given a personal opportunity of

hearing on 18.6.03, the appellant vide its letter dated 27.8.03 resumed the

plot and requested the respondent to collect the cheque of the amount

deposited by him. Allegedly, the order of resumption was passed against

the respondent without a personal hearing.  Being aggrieved by the said

order,  the  respondent  on  28.9.03  preferred  an  appeal  before  the

Commissioner of Industries. Vide its letter dated 28.8.06, the appellant

informed the respondent that the commissioner had dismissed his appeal

by an order dated 1.8.06 on the ground that it was devoid of any merit.

Being aggrieved by the order of resumption and the order dismissing the

appeal, on 9.10.06, the respondent filed a Writ Petition before the High

Court. The High Court, by its judgment and final order dated 12.12.06,

set aside the order of resumption.

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In all  these cases, it  is  difficult  to uphold the order of the High

Court.  But a general offer was made by the learned Additional Solicitor

General that those who intend to obtain reallotment of plot may do so on

payment of the price as per the current rate as on the date of the order of

the High Court.

Before us, several allottees had categorically made a statement that

they are ready and willing to  pay the prevailing price  as fixed by the

appellant- Corporation.   Keeping in view the facts and circumstances of

this cases, we are of the opinion that in the event, respondents offer the

prevailing price as on the date of judgment of the High Court, the plot, in

question, shall stand re-allotted and should be subject to the same terms

and conditions.  Such reallotment may be made even in cases where we

have found the order of the High Court to be unsustainable.

Respondents shall deposit the amount within six weeks from date.

Appellant shall hand over the possession of the plot, in question, within

four weeks thereafter.  The highest executive of Appellant – Corporation

shall  see  to  it  that  the  order  of  this  Court  is  complied  with.   It  is,

however,  made  clear  that  in  the  event  of  failure  on  the  part  of  the

respondents  concerned  in  making  payment  in  terms  of  this  order,  it

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would  be  open  to  the  appellant  to  take  recourse  to  such  action  as  is

permissible in law.

Subject, of course, to the directions issued in individual cases, the

appeals are disposed of.  In the facts and circumstances of the case, there

shall be no order as to costs.

………………………….J. [S.B. Sinha]

..…………………………J. [V.S. Sirpurkar]

New Delhi; May 16, 2008

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