Laxmi Narain Mehrotra v. Nagar Mahapalika, Allahahad
1988-05-11
AMARENDRA NATH VARMA, BRAJA NATH MISRA
body1988
DigiLaw.ai
JUDGMENT Amarendra Nath Varma, J. - By means of this petition the petitioners have assailed the validity of the orders passed by the Allahabad Development Authority ('ADA' for short) whereby while allotting 18 shops in favour of the petitioners in the Marketing Complex recently constructed by the ADA near Chowk Ghantaghar (Clock Tower), the applicants have been required to deposit 40% of the amount of premium fixed by the ADA for an outright sale and the balance in six quarterly instalments. The contention is that the ADA was bound to allot these shops to the petitioners upon the same terms and conditions which had been agreed to between the petitioners and the Nagar Mahapalika, Allahabad in the year 1976-77, namely, on the basis of premium-cum-rent and not an outright sale. 2. The contention cannot, as we will presently demonstrate, be sustained. Before, however, we deal with the contention, a look at the background in which the question arises will be useful. 3. The essential facts may be summarised thus. In the year 1975-76, the Nagar Mahapalika, Allahabad conceived a project for the construction of a Marketing Complex near Chowk Ghantaghar (Clock Tower) to be named after Sri Jawaharlal Nehru. Applications were invited for allotment of those shops on the basis of maximum premium offered by the prospective allottees and rent to be fixed by the Nagar Mahapalika. Under the project 94 shops were to be constructed. The scheme, for reasons which are unclear, attracted tenders for only 32 shops. The applicants having deposited the registration fee of Rs. 10,000/-, formal agreements were in due course executed between the allottees (whose tenders happened to be the highest) and the Nagar Mahapalika between 1976-77 upon their depositing the premia. The Scheme was, however, not destined to be translated into reality. It proved abortive and made no headway. By 1980 all that could be achieved was the foundation. The allottees grew restive. Eight allottees took back their premia and walked out of it. The rest started clamouring for the refund of the amounts deposited by them or for the payment of interest. The unrest led to a note submitted by the Accounts Officer of the Nagar Mahapalika on 29-10-80 to the Administrator stating that the allottees were persisting in their demand for the refund of the premia deposited by them or payment of interest thereon.
The unrest led to a note submitted by the Accounts Officer of the Nagar Mahapalika on 29-10-80 to the Administrator stating that the allottees were persisting in their demand for the refund of the premia deposited by them or payment of interest thereon. The note further stated that they were asking that out of Rs. 10,000/- deposited by them towards registration amount Rs. 5,000/- might be withheld by the Nagar Mahapalika for securing their interests in any future scheme while the rest of the amount of premium be refunded to them. The note further went on that the Nagar Mahapalika had already spent Rs. 7 lacs over the foundation work itself as against Rs. 5.61,843/- deposited by the allottees. The Accounts Officer then stated, if you agree with this proposal applications may accordingly be called from each allottee and final action may be taken to that end. At the bottom of this note the Administrator appended his signature. 4. Nothing further appears to have been done by the Nagar Mahapalika thereafter until the ADA constituted under U.P. Urban Planning and Development Act stepped in about the year 1984. A resolution No. 417 was passed by the ADA on 16-1 1-84 according administrative sanction to a scheme for construction of a similar shopping centre at the same site at which the Nagar Mahapalika had planned and authorising the Vice- Chairman to arrange for loans from the various financial institutions. One may regard this as a formal step for the transfer of the scheme originally conceived by the Nagar Mahapalika to the ADA. The scheme conceived by the ADA was, however, much more ambitious involving a massive financial outlay of Rs. 275.91 Lacs. The plan was drawn up in consultation of the Chief Town Planner of the Lucknow Development Authority and after a thorough inspection of the site by the Vice-Chairman and other officials of the ADA. After the A.D.A. formally decided to construct the shopping complex itself, the erstwhile allottees approached it and pressed their claims for allotment of shops in the new Scheme which was in contemplation of the A.D.A. This led to resolution No 476 dated 15-3-86 passed by the A.D.A. stating that the matter for reservation of shops in favour of those registered with the Nagar Mahapalika be placed before the A.D.A. at its next meeting which was held on 23-4-86.
On this date the A.D.A. passed another resolution (No. 491) stating that the policy with regard to allotment of shops in favour of those who had got themselves registered with the Nagar Mahapalika be left to be determined by the Chairman of the A.D.A. Thereafter on7-1-87 the Vice-Chairman of A.D.A. put up a note for the consideration of the Chairman. This note has considerable relevance. We are accordingly extracting here the transliteration of a portion which is material to issues raised before us. It reads : "The construction work of a four-stroreyed shopping complex is being undertaken by the A.D.A. at Chowk Ghantaghar. It is proposed to allot shops in this shopping complex on the basis of the offer of the highest premium through public auction. The Development Authority has authorised the Chairman to determine the policy with regard to allotment of 18 shops in respect of which the Nagar Mahapalika had entered into agreements. It is suggested that the premium of such shops be fixed at the same amount which has been fetched at the auction of the other shops. According to the understanding reached with the Nagar Mahapalika by those allottees provision was made only for reservation in the matter of allotment of the shops and not for the amount of the premium." 5. The Chairman of the A.D.A. accepted this suggestion of the Vice-Chairman on 14- 1-87 by appending his signature below the note. 6. It is not disputed that in regard to the shops other than the 18 shops in question, the Scheme envisaged allotment by outright Sale at open auction. The policy so adopted was put into action. Shops other than the 18 shops reserved for the petitioners were put to public auction. The auction was confined to those who had got themselves registered after depositing Rs. 20,000/- and more which was the registration-fee fixed by the A.D.A. Consistently with the resolutions of the A. D.A. on the basis of the amounts fetched at the public auction for the sale of the remaining shops the premium of each of those 18 shops was fixed by A.D.A. The persons registered with the Nagar Mahapalika for these 18 shops were asked to deposit 40'%, of the premia so fixed within 30 days, and the balance in six quarterly instalments. A problem, however, arose as to how these 18 shops were to be distributed amongst the applicants.
A problem, however, arose as to how these 18 shops were to be distributed amongst the applicants. The A.D.A. thought that the best way would be to draw lots for that purpose. The petitioners, however, decided otherwise. They held a meeting at which they decided to resolve this controversy among themselves by mutual understanding. Their decision was intimated by means of a letter submitted in that behalf to the A.D.A. They gave the details of the shop numbers and the petitioners to whom the same might be allotted by the A.D.A. The A.D.A. accepted their decision and issued the allotment orders on 18-4-87 in favour of the petitioners. These are the orders which are the subject of challenge in the petition. 7. The entire submissions of Sri R. C. Srivastava, learned counsel for the petitioners, were founded on the written agreements entered into between the petitioners and the Nagar Mahapalika. Briefly, his contention was that the A.D.A. was bound under law to allot these shops on the same terms and on the same basis as was agreed to between the petitioners and the Nagar Mahapalika. The A.D.A. was equally bound by the promise held out by the Nagar Mahapalika in the year 1980. 8. Sri Sudhir Chandra, learned counsel for the Development Authority, on the other hand, countered these submissions and urged on the facts established on the record, even the Nagar Mahapalika could not be compelled to allot the shops in the new Shopping Complex on the premia originally accepted by the Nagar Mahapalika in 1976-77. Less so the A.D.A. As the agreements executed in 1976-77 have been subject of considerable debate at the Bar, we propose to reproduce the transliteration of the relevant clauses of the same. The agreement was a bilateral document executed on behalf of the Nagar Mahapalika by the Nagar Abhiyanta. The terms of each of these agreements were identical. Clauses (5) and (6) around which most of the arguments were centred read thus : "If on account of some special circumstances the second party (the Nagar Mahapalika) is unable to complete the constructions, the first party (the allottee) shall be entitled to claim refund of the amount of premium deposited by him without being liable for payment of any interest thereon.
If in future for some reason the present scheme is given up and it is decided to have a new scheme then in that event the first party shall be entitled to claim priority in the allotment of shops under the new scheme in accordance with the Mahapalika's rules and bye-laws and conditions imposed by it, provided only if the premium deposited by the first party continues to remain in deposit.' 9. Sri Sudhir Chandra, learned counsel for the Development Authority, vehemently contended that in view of clause (6) which are explicit and unambiguous even the Nagar Mahapalika, muchless the Development Authority, could not be compelled to allot the shops on the original premia settled in 1976-77. The petitioners had admittedly withdrawn the amount of premium deposited by them except for Rs. 5,000/- which was 50% of the registration fee charged by the Nagar Mahapalika. 10. The learned counsel is clearly right there. It is more than amply established on the record that the Scheme had got bogged down at the very threshold, having proved totally abortive by 1980. It could not make any progress beyond the foundation even by 1980. It is apparent from the note of the Accounts Officer dated 29-10-80 that there were little or no prospects of the Nagar Mahapalika resuming the work in any foreseeable future. It is for this reason that the petitioners had started clamouring for the refund of their premia. Under the agreement they had a clear option either to allow their premium to remain in deposit so as to be able to press their claims against the Nagar Mahapalika in any future scheme which it might have undertaken or to withdraw the amount. The petitioners chose to exercise their right under Clause (5) and took back the amount of premium deposited by them. On the withdrawal of premia by them they forfeited their right of reservation in any future scheme. The maximum that the petitioners could extract out of the Nagar Mahapalika in the year 1980 in consequence of their leaving 50% of the registration-fee in deposit with the Nagar Mahapalika was a kind of very vague and inchoate promise of reservation or priority in the matter of allotment of shops in the new scheme if and when the same was undertaken by the Nagar Mahapalika. The promise went no further.
The promise went no further. At any rate, nothing further has been established on the record. On the contrary the evidence on record including the resolutions passed by the Development Authority overwhelmingly support the latter's claim that there was no concertised understanding which may have crystallised into a right enforceable at law existing at the time of take over of the scheme by the A. D.A. between the Nagar Mahapalika and the petitioners so as to bind either the Nagar Mahapalika or the Development Authority. The Scheme framed by the Nagar Mahapalika, as mentioned above, was abandoned or frustrated. The very substratum of the agreement executed by the Nagar Mahapalika had disappeared with the abandonment of the scheme by the Nagar Mahapalika and by the petitioners' own act in not electing to allow their premium to remain in deposit. 11. The upshot of the foregoing discussion, therefore, is that the petitioners have miserably failed to establish that they had any right to claim allotment on the same basis and upon the same terms as had been agreed to between the Nagar Mahapalika and them in 1976-77. The first submission of Sri R. C. Srivastava that the Development Authority as successors of the Nagar Mahapalika, were bound to allot the shops on the basis of premium and rent upon the same terms as had been settled earlier in 1976. Therefore, cannot be sustained and must be rejected. 12. Sri R. C. Srivastava invite our attention to, the notice issued by the Development Authority inviting applications for the allotment of the shops (vide Annexure 9 to the petition) which was headed Golden opportunity for obtaining shops on the basis of maximum premium and rent in the main commercial area of Chowk Ghantaghar' and submitted that the A.D.A. itself was committed to abide by the policy of allotment of these 18 shops on the basis of premium- cum-rent. It could not, therefore, apply the policy of outright sale in the case of the petitioners. 13. We are unable to agree.
It could not, therefore, apply the policy of outright sale in the case of the petitioners. 13. We are unable to agree. A perusal of the various resolutions passed by the A.D.A. from time to time referred to hereinabove leaves no manner of doubt that in so far as the allotment of 18 shops in regard to which agreements had been entered into between the allottees and the Nagar Mahapalika was concerned, the A.D.A. had at no time agreed to allot these shops on the basis of premium- cum-rent. Indeed note 1 appended to the bottom of this very notice furnishes a complete answer to this submission. It states in no uncertain terms that the conditions for allotment of these 18 shops shall be settled at the next meeting of the A.D.A. What the decision was in regard to these 18 shops has already been extensively commented upon by us and it is unnecessary to repeat the same. To recapitulate, the Development Authority had decided firstly to treat the deposit of Rs. 5,000/- made by the applicants for these 18 shops with the Nagar Mahapalika as a valid compliance for registration with the A.D.A. for allotment of shops. Secondly, that these 18 shops shall not be put to public auction, i.e., they shall be reserved for those who had allowed to leave Rs. 5,000/- with the Nagar Mahapalika and, lastly, that the premium for these 18 shops shall be the highest bid offered for the corresponding shops fetched at the public auction to be conducted by the Development Authority. This was the entire commitment made or concession shown by the Development Authority in view of the historical background of these shops. The concession or commitment went no further. The Vice-Chairman was, in our opinion, clearly right in the comment made by him in his note dated 1-7-87 that the understanding reached with the Nagar Mahapalika was in regard only to reservation and not as to the terms and conditions upon which it shall be settled. Even under Clause (6) of the agreement the reservation contemplated under the new scheme if and when undertaken by the Nagar Mahapalika was expressly made subject to the terms and conditions which might come to be imposed by the Nagar Mahapalika.
Even under Clause (6) of the agreement the reservation contemplated under the new scheme if and when undertaken by the Nagar Mahapalika was expressly made subject to the terms and conditions which might come to be imposed by the Nagar Mahapalika. We, therefore, reject the first and the main contention of the learned counsel for the petitioners that either the Nagar Mahapalika or the Development Authority had bound itself down to the commitment that these shops to be constructed by the Development Authority shall be settled upon the same terms and conditions which had originally been settled under the agreements referred to hereinabove. 14. In this connection we may notice another submission of Sri R. C. Srivastava. It was urged that the Development Authority had stepped into the shoes of the Nagar Mahapalika vis-a-vis the scheme and consequently it was bound to honour the terms and conditions by which the Nagar Mahapalika itself was bound in view of Clause (b) of sub-section (6) of S. 59 of the U. P. Urban Planning and Development Act. We regret our inability to accept the contention. The Development Authority could under this provision be bound down, if at all, only to such terms and conditions which were enforceable against the Nagar Mahapalika itself, assuming this provision is attracted to the present situation. We have already reached the conclusion that even the Nagar Mahapalika could not be compelled to settle the shops with the petitioners on the basis of premium-cum-rent. 15. That takes us to the second contention advanced by Sri R. C. Srivastava. The argument was that once the mode of settlement of these shops, namely, premium and rent had been agreed to between the petitioners and the Nagar Mahapalika, the same could not be unilaterally altered without affording any opportunity to the petitioners. 16. We cannot agree. We have already found that the substratum of the agreement originally executed by the petitioners and the Nagar Mahapalika fixing the premium had disappeared before 1980. The building plan itself had been abandoned by the Nagar Mahapalika. Taking cognizance of this situation, the petitioners elected to withdraw the entire amount of premium deposited by them leaving only 50% of the registration-fee with the Nagar Mahapalika. The Nagar Mahapalika had made it plain to the applicants that it had no intention of continuing with the project for a variety of reasons.
Taking cognizance of this situation, the petitioners elected to withdraw the entire amount of premium deposited by them leaving only 50% of the registration-fee with the Nagar Mahapalika. The Nagar Mahapalika had made it plain to the applicants that it had no intention of continuing with the project for a variety of reasons. Further, even under the original agreement in the event of the scheme undertaken by the Nagar Mahapalika being deferred or given up for some reason all that the first party could claim against the Nagar Mahapalika was a right of preference in the allotment of a shop in the new scheme upon such terms as might be laid down in a fresh agreement. It will, therefore, be seen that the stipulation as regards the settlement of the shops on the basis of premium-cum-rent itself had ceased to be operative. In view of these facts there was no question of the petitioners being afforded any opportunity before the Development Authority laying down the terms and conditions for these shops. 17. The next contention was that the Development Authority has arbitrarily fixed the premium for these 18 shops. The contention cannot be accepted. The yardstick adopted by the Development Authority was the amount which had been fetched at the auction of identical shops in the same building. There is thus a rational basis for fixing the premium for these shops. For the petitioners, however, reliance was placed on paragraphs 45 and 46 of the rejoinder affidavit to demonstrate that compared to the rate fixed by the A.D.A. for allotment of shops in the Civil Lines area of the city, the premium fixed for the disputed shops is exhorbitant. Apart from the fact that this plea has been raised only in the rejoinder affidavit and, therefore, the Development Authority has had no occasion to meet the same, the petitioners have totally failed to furnish sufficient material to enable us to pronounce on the validity of the charge of arbitrariness or discrimination. The relevant particulars as regards the costs involved in the construction of the two buildings have not been furnished by the petitioners.
The relevant particulars as regards the costs involved in the construction of the two buildings have not been furnished by the petitioners. At any rate, we find that compared to the admitted and significant escalation of costs of material and other expenses invoked since 1976-77 the premium fixed by the Development Authority in the year 1987 for these shops can, by no stretch of imagination, be characterised as either arbitrary or exhorbitant. The decision cited by the learned counsel in support of this contention, namely, AIR 1985 Delhi 417, P. N. Varma v. Union of India, is of no assistance as it turned on its own facts. The situation arising in the present case is entirely different. So are the issues involved. The action of the Delhi Development Authority in refixing the rates on different criteria was struck down on the ground of the doctrine of promissory estoppel and arbitrariness. The Delhi Development Authority had revised the estimates contrary to the terms of the original contract. No such situation exists in the present case. 18. That takes us finally to the submission based on estoppel in support of which learned counsel placed strong reliance on the decision reported in 1986 UPLB and EC 565 , Purshottam Das Tandon v. State of U. P.. Relying on the various Government orders issued from time to time and the deposits made by the petitioners of that case towards the premium fixed under those Government orders in pursuance of the promises made by the Government implicit therein, the Bench issued a mandamus directing the State Government to renew the leases which had expired. The principles enunciated in this decision admit of no doubt. The question is one of application of that principle to the facts of that case. The Bench concluded that the State Government was bound by the doctrine of promissory estoppel to do what it had clearly promised to do under its orders pursuant to which the petitioners had made deposits. In the present case, however, the petitioners have miserably failed to establish the plea of promissory estoppel. We have extensively commented on the various decisions taken by the Nagar Mahapalika as well as by the Development Authority none of which can sustain the plea of estoppel. It is unnecessary to dilate on this point further.
In the present case, however, the petitioners have miserably failed to establish the plea of promissory estoppel. We have extensively commented on the various decisions taken by the Nagar Mahapalika as well as by the Development Authority none of which can sustain the plea of estoppel. It is unnecessary to dilate on this point further. So far as the Development Authority is concerned, it has proceeded strictly in accordance with the assurances it has held out in regard to the 18 shops from time to time. It has from the very beginning been taking the position that it will honour the commitment made by the Nagar Mahapalika insofar as the reservation of these shops was concerned. It did not expose the petitioners to the hazards o f a public auction. Be that as it may, at no time had the Development Authority held out to the petitioners that it shall settle the shops on the same terms as had been agreed to between the petitioners and the Nagar Mahapalika. And it must be borne in mind that relief is being claimed by the petitioners against the Development Authority and not the Nagar Mahapalika. Thus in either view there is no substance whatever in the plea of estoppel. The above discussion disposes of all the submissions urged in support of the petition. 19. In the result, the petition fails and is dismissed with costs. The interim orders are hereby discharged.