IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.        OF 2008  (Arising out of SLP(C) No7722 of 2007)

Skyline Contractors Pvt. Ltd. & Anr. .Appellants Vs.

State of U.P. & ors. ...Respondents

J U D G M E N T

ALTAMAS KABIR,J.

1. Leave granted.

2. The appellants herein filed a writ petition

before the Allahabad High Court for quashing

an order dated 21.6.2006 issued  on behalf

of  the  New  Okhla  Industrial  Development

Authority  (hereinafter  referred  to  as

‘NOIDA’)cancelling  the  allotment  of  Plot

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no.A-28 in Sector 62 made in favour of the

appellant.

3. Admittedly,  the  appellant  made  an

application  for allotment of the aforesaid

plot  measuring 8000 square meters pursuant

to an advertisement published on behalf of

the  NOIDA  inviting  such  applications  and

made  an  initial  deposit  of  Rs.13,20,000/-

while  submitting  the  application.  On

17.4.2003 an order of allotment was issued

in  favour  of  the  appellant  whereby  the

petitioner  was  required  to  deposit  25  per

cent of the premium amount in cash or by a

bank draft in favour of NOIDA within 60 days

of such allotment. It was   categorically

stipulated that if the said amount was not

deposited  within  the  time  specified  the

depositor’s earnest money would be forfeited

and no extension of time would be granted

for  deposit  of  the  said  amount  under  any

circumstances.   The  balance  75%  of  the

premium amount was required to be deposited

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by  the  allottee  in  10  equal  half-yearly

instalments along with interest at the rate

of   14%    per   annum   on  outstanding

premium.  Here  also,  it  was  categorically

stipulated that no extension for payment of

instalments  would  be  granted  and  if  the

allottee  failed  to  pay  the  instalments

within  due  dates  the  allotment  would  be

cancelled and the amount equivalent to 25%

of the premium would be forfeited in favour

of the NOIDA. In exceptional circumstances,

however,  the  Chief  Executive  Officer  of

NOIDA  was  vested  with  the  discretion  to

extend the time for making deposits, which

would be subject to payment of interest @

17% per annum compounded every half yearly

on  the  defaulted  amount  for  the  defaulted

period.  

4. As has been noticed by the High Court in its

judgment  impugned  in  this  appeal,  the

appellants did not deposit any amount for a

period of two and a half years after receipt

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of the allotment letter. The Authority wrote

to the appellant on 3.5.2005 requesting the

appellant  to produce receipts of deposits,

if any, made in pursuance of the allotment

letter.  Three  months  after  receiving  the

said  letter  the  appellant  started  making

deposits in September 2005 and on 16.12.2005

wrote to the NOIDA asking for details with

regard to the deposit of stamp duty, etc.

for execution of the lease deed pursuant to

the  allotment  made  in  its  favour.  Despite

the  said  letter,  the  NOIDA  cancelled  the

allotment made in favour of the appellants

by its order dated 21.6.2006 on the ground

that the appellant had failed to make the

deposits as per clause 2(iv) of the Terms

and  Conditions  for  allotment.  As  stated

hereinbefore,  the  writ  petition  was  filed

challenging such cancellation.

5. On  considering  the  submissions  made  on

behalf  of  the  parties  the  High  Court

rejected  the  plea  of  the  appellants  that

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although  the  appellants  had  failed  to

deposit the premium amount in keeping with

the terms and conditions of the allotment,

the  said  amount  subsequently  deposited  by

the appellants had been duly accepted by the

NOIDA  which  had  accordingly  waived  such

terms and conditions and the allotment made

in  the  appellant’s  favour  could  not  have

been cancelled on the ground that the same

had  not  been  deposited  in  time.  The  High

Court  also  rejected  the  other  submission

made on behalf of the appellants that the

NOIDA had acted wrongly in re-allotting the

plot in question to the Respondent No.5 at a

much cheaper rate than was demanded from the

appellants. The High Court held that having

failed to make the deposits within the time

stipulated  in  the  allotment  letter  the

voluntary deposits subsequently made two and

half  years  after  the  issuance  of  the

allotment  letter,  without  the  approval  of

the NOIDA, could not be accepted as valid

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deposit  and  the  appellants  were  not,

therefore,  entitled to any relief. Certain

judgments  of  this  Court  which  have  been

relied upon before us by the appellants had

also been considered by the High Court which

came to the conclusion that the same were

not  applicable  to  the  facts  and

circumstances of the instant case. The High

Court, therefore, held the writ petition to

be completely misconceived and dismissed the

same.

6. The  same  arguments  as  was  advanced  before

the  High  Court  have  also  been  advanced

before  us  with  special  emphasis  on  the

letter dated 15.5.2003 written on behalf of

the appellant to the NOIDA with reference to

the allotment letter of 17.4.2003. Referring

to the said letter, learned counsel for the

appellant  submitted  that  it  had  been

mentioned therein that a modified allotment

letter  would  be  issued  to  the  appellants

along  with  a  statement  of  account  of  the

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balance  amount  payable  on  account  of

typographical  discrepancy  in  the  allotment

letter, but that neither had such modified

letter been given to the appellant nor had

any  statement  of  account  been  issued  as

promised.   It  was  also  sought  to  be

highlighted that in the letter it had been

specifically mentioned that the officials of

NOIDA had refused to accept the payment on

account  of  some  internal  inquiry  and/or

procedural changes being effected by NOIDA.  

7. It  was  urged  that  since  no  reply  was

received  to  the  said  letter  no  further

payments were made in terms of the allotment

letter  till  the  appellants  received  the

letter  written  on  behalf  of  the  NOIDA  on

3.5.2005  asking  the  appellants  to  produce

proof  of  deposit  of  the  allotment  amount

which  was  required  to  be  deposited  by

16.2.03.  It  was  urged  that  once  the  said

letter was received, deposits were made on

6.12.2005  making  up  a  total  sum  of

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Rs.3,80,20,000/-  after  giving  credit  for

deposit  of  the  initial  amount  of

Rs.13,20,000/-.   It  was  reiterated  by

counsel  that having accepted the aforesaid

deposits,  the  NOIDA  was  estopped  from

cancelling the allotment by its order dated

21.6.2006.

8. In support of his submission learned senior

counsel  referred  to  several  decisions  of

this  Court  regarding  the  manner  in  which

public authorities should conduct themselves

while  extending  benefits  to  private

individuals  by  way  of  contracts  and

agreements.

9. Learned  counsel  firstly  referred  to  the

decision  of  this  Court  in  R.K.  Saxena  v.

Delhi  Development  Authority  (AIR  2002  SC

2340)  where  a  similar  set  of  facts  were

under consideration. In the said case, after

making the initial deposit of 25 per cent of

the  auctioned price, the auction purchaser

prayed for extension of time to deposit the

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balance of 75 per cent which was required to

be  paid  within  60  days  from  the  date  of

issuance of the demand letter. In the said

case  also  the  Chairman,  Delhi  Development

Authority,  was  vested  with  discretion  to

extend the time for such payments up to a

maximum  period  of  180  days,  subject  to

payment of interest on the balance amount @

18 per cent per annum.  The demand letter

for payment of the said amount was issued on

3.1.1996  but  only  a  part  thereof  was

deposited  on  19.2.1996  with  a  prayer  for

further  extension  to  make  the  balance

payment. Such prayer was granted and further

time  was  granted  for  the  said  purpose.

Pursuant to said extensions certain amounts

were  deposited  towards  the  balance  75  per

cent,  but  ultimately  when  on  2.9.1996

further extension was sought for there was

no reply to the letter though various sums

deposited  thereafter  were  accepted  by  the

Authority  despite  the  fact  that  such

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deposits  were  made  after  the  stipulated

time. It was also brought to the notice of

the Court that the entire balance amount had

since been paid for the plot in question.

Since,  despite having accepted the delayed

payment the plot was not delivered to the

appellant, legal notices were issued on its

behalf and subsequent thereto the allotment

was  cancelled  and  the  earnest  money  was

forfeited.  The writ petition filed in the

High  Court  against  said  cancellation  of

allotment was dismissed on 29.2.2000 by the

High Court which held that after the expiry

of  the  period  stipulated  in  the  agreement

the  allottee  could  not  have  deposited  the

balance  amount  unilaterally  without  any

demand  being  issued  to  him  after  the

extended dates and no relief could be given

to the allottee. Learned counsel pointed out

that  when  the  said  matter  was  carried  to

this Court, this Court held that the order

of  the  High  Court  could  not  be  sustained

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particularly when both the delayed payments

and  the  interest  amount  thereupon  were

accepted  by  the  respondent-authority.  This

Court  observed  that  the  moment  those

payments  were  accepted  there  was  deemed

extension of time and that it was only one

and half years after the legal notices had

been  sent  to  the  Authority  that  the

allotment  order  was  cancelled.  This  Court

held in the facts of that case that after

accepting  the  delayed  payment  the

respondent-authority  could  not  have

cancelled the allotment.

10. Reliance was also placed on the decision of

this Court in Teri Oat Estates (P) Limited

v. U.T. Chandigarh and another [(2004) 2 SCC

130]  where the concept of disproportionate

action was applied in a similar case where

the  lessee defaulted/delayed in payment of

instalments of premium, interest thereon and

ground  rent  in  terms  of  the  letter  of

allotment but it was found that the same had

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been  occasioned  due  to  a  situation  beyond

the control of the lessee and not on account

of any wilful or dishonest intention on the

part  of  the  lessee.  Keeping  in  mind  the

principles  of  proportionality,  this  Court

not  only  held  that  the  lessee/appellants

therein had not only shown their bona fides

in making payments before the High Court but

they  had  also  shown  their  willingness  to

make  payment  on  the  difference  amount  and

pursuant to the orders passed by this Court

had not only paid the entire amount due, but

had also paid the ground rent upto 1998-99

and  10  per  cent  penalty  on  the  forfeited

amount  of  the  entire  consideration  money.

While  allowing  the  appeals,  this  Court

observed that the land in question for all

intents and purposes had been transferred in

favour of the lessee who was merely required

to pay the balance amount of 75 per cent of

the  consideration  amount  in  instalments.

While  also  deprecating  the  conduct  of  the

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lessees in not making an endeavor to pay the

instalments within a reasonable period, this

Court  in  consonance  with  the  doctrine  of

proportionality  observed  that  after  the

letter  of  allotment  had  been  issued  in

favour of the lessee/appellant it had been

put in possession of the property and had

raised  a  six-storied  building  on  the  said

land. It was also observed that it had paid

a  part  of  the  first  instalment  and  had

during the pendency of the proceeding before

the  High  Court  paid  a  substantial  amount,

together  with  interest  @  12  per  cent  per

annum, as enhanced from time to time. This

Court was, therefore, of the view that the

resumption of the plot by the Estate Officer

was too drastic and such power of resumption

and forfeiture  should be exercised only as

a  last  resort.  Of  course,  it  was  also

indicated that such an observation did not

mean  that  the  power  of  resumption  and

forfeiture  should  never  be  resorted  to  if

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the intention of the allottee was dishonest

or with ill-motive or the payments in terms

of the allotment were made with a dishonest

view or dishonest motive.

11. Learned counsel submitted that having regard

to the aforesaid decision it must also be

held in this case that cancellation of the

allotment  six  months  after  the  entire

balance amount had been deposited could not

be sustained and the High Court had erred in

dismissing  the  writ  petition  filed  by  the

appellant  company  challenging  the

cancellation  of  the  allotment  made  in  its

favour.

12. The learned counsel appearing both for the

State  of  U.P.  and  NOIDA  supported  the

decision  of  the  High  Court  and  submitted

that  since  the  appellant  had  failed  to

deposit any amount, other than the initial

deposit  of Rs.13,20,000/-, within the time

stipulated  in  the  allotment  order  and  had

unilaterally deposited the balance amount 2½

14

years  after  the  allotment  order  was  made

and,  that  too,  after  a  letter  had  been

addressed to the appellant asking for proof

of deposit of the said amounts, it was not

entitled  to any  relief.  It was  urged on

behalf of the NOIDA that the deposits said

to  have  been  made  by  the  appellant  after

receipt of the said letter, had been made

unilaterally  and  had  not  been  accepted  by

the NOIDA.  Accordingly, the appellant could

not  derive  any  benefit  from  the  decisions

cited on its behalf since in all the said

cases,  the  deposits,  though  made  out  of

time, had subsequently been accepted by the

concerned authority.

13. It was also submitted that since third party

interests  had  intervened  and  the  plot  had

since  been  allotted  in  favour  of  the

respondent  NO.5,  the  relief  sought  for  by

the appellant in the writ petition could not

be granted.

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14. Similar submissions were made on behalf of

the  respondent  No.5,  in  whose  favour  the

plot in question had been allotted after the

allotment  in  favour  of  the  appellant  was

cancelled.

15. It was submitted that the reason sought to

be given on behalf of the appellant for non

payment of the premium amount was extremely

dubious and had been rejected by the NOIDA

in  its  discretion.  The  decisions  cited  on

behalf of the appellant could not be applied

to  the  facts  of  this  case,  since  in  the

present case, the deposits subsequently made

by the appellant had not been accepted by

the NOIDA.  It was lastly urged that, in any

event, no relief could be granted in favour

of the appellant, since no prayer had been

made in the writ petition for cancellation

of  the  allotment  made  in  favour  of  the

respondent No.5.

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16. Having  considered  the  submissions  made  on

behalf of the respective parties, we are not

inclined to interfere with the order of the

High Court in the present appeal.

17.  There is no dispute that the appellant did

not  make  any  deposits,  other  than  the

initial deposit of Rs.13,20,000/-, in terms

of the allotment order.  There is also no

dispute that the deposits ultimately made 2½

years  after  the  allotment  order  had  been

passed, had been made unilaterally and only

after a communication was received from the

NOIDA asking for proof of deposits made and,

that too, three months after receipt of such

letter.

18. We  are  inclined  to  accept  the  submissions

made on behalf of the respondents that the

reason given for not making the deposits, as

per  the  allotment  order,  is  not  very

convincing.  We are also inclined to accept

the other submissions made on behalf of the

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respondents  that  since  the  deposits

subsequently made by the appellant had not

been accepted by the NOIDA, the ratio of the

decisions cited on behalf of the appellant

would not apply to the facts of this case,

particularly,  when  third  party  interests

have intervened and a fresh allotment order

had been made in favour of the respondent

No.5 and no prayer has been made in the writ

petition for setting aside such allotment.

19. We, therefore, have no option but to dismiss

the  appeal,  but  without  any  order  as  to

costs.  The  appellant  will  be  entitled  to

withdraw the  deposits made by it in favour

of the respondents towards  the  balance of

the premium amount.

..................J. (A.K. MATHUR)

..................J. (ALTAMAS KABIR)

New Delhi,

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Dated : July 9, 2008

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