Research › Search › Judgment

Bombay High Court · body

2014 DIGILAW 1336 (BOM)

G. D. C. Buildcon Pvt Ltd. v. City and Industrial Development Corporation of Maharashtra Ltd.

2014-06-25

A.S.CHANDURKAR, A.S.OKA

body2014
ORAL JUDGMENT PER : A.S. CHANDURKAR, J. 1) The issue that arises for consideration in this writ petition is whether a writ could be issued to a party to an agreement directing it not to insist upon a stipulation contained in such agreement? 2) Considering the limited nature of challenge, by order dated 14th February, 2014 the parties were put to notice that the writ petition could be disposed of at the stage of admission. Hence, with the consent of the learned counsel for the parties we have heard them at length. Rule, Rule made returnable forthwith and heard finally with the consent of the parties. 3) On 22nd February, 2008 one Abdul Kadar Abdul Mulla along with others who were the owners of the land in question that was acquired entered into an agreement with the City and Industrial Development Corporation of Maharashtra Limited (“CIDCO” for short). By said agreement the original owners of the land were permitted to use 1249.61 square meters land for constructing buildings to be used for residential purpose. As per aforesaid agreement the lessees unconditionally agreed to pay additional lease premium to CIDCO in the event of any enhancement of compensation in proceeding under the Land Acquisition Act, 1894. It was also stipulated that on failure to make such additional payment, the agreement of lease could be terminated. Thereafter, on 30th April, 2008 the lessees entered into a tripartite agreement with CIDCO and M/s Sky Developers whereby the rights and interests of the lessees were transferred in favour of M/s Sky Developers in terms of the original agreement dated 22nd February, 2008. Subsequently, on 15th December, 2009 there was another tripartite agreement between CIDCO, M/s Sky Developers and the Petitioner. Under said Agreement the rights and interests of M/s Sky Developers were transferred in the name of the petitioner. The rights and liabilities as contained in the original lease deed dated 22nd February, 2008 were kept intact. The petitioner thereafter took steps for development of the property in question. On 15th February, 2010 a commencement certificate was issued to the petitioner under section 45 of the Maharashtra Regional Town Planning Act (hereinafter referred to as “the said Act”). On 29th July, 2013 the petitioner requested the Estate Officer of CIDCO to issue “MAVEJA” (enhanced compensation) NOC. A similar request was reiterated on 12th September, 2013. On 15th February, 2010 a commencement certificate was issued to the petitioner under section 45 of the Maharashtra Regional Town Planning Act (hereinafter referred to as “the said Act”). On 29th July, 2013 the petitioner requested the Estate Officer of CIDCO to issue “MAVEJA” (enhanced compensation) NOC. A similar request was reiterated on 12th September, 2013. The petitioner was informed by the Additional Town Planning Officer, CIDCO on 3rd September, 2013 that the occupancy certificate was being refused to the petitioner under section 45 (1) (iii) of the said Act for various reasons. One of the reason assigned was that the MAVEJA NOC was not submitted. This action on the part of the CIDCO in refusing to grant occupancy certificate on failure to submit MAVEJA NOC has been subjected to challenge in the present writ petition. 4) Shri A.V. Anturkar, learned Senior Counsel along with Shri Tanaji Mhatugade for the petitioner submitted that the respondent No.1 was not justified in refusing to grant occupancy certificate under Section 45 (1) (iii) of the said Act for non-submission of MAVEJA NOC. It was submitted that the petitioner's predecessor had been granted lease to develop the aforesaid property in terms of the Government Resolution dated 6th March, 1990. The aforesaid Government Resolution did not prescribe any condition whereby the property in question could not be developed unless enhanced compensation awarded in proceedings under the Land Acquisition Act, 1894 was paid to CIDCO. It was further urged that CIDCO as a Planning Authority could not rely upon the agreement entered into with the original allottee so as to compel the petitioner to deposit the additional compensation. Such insistence on the part of the CIDCO was, therefore, contrary to the provisions of the said Act as well as the Development Control Rules as there were no provisions made there under imposing liability on the developer seeking occupancy certificate to pay enhanced compensation. It was further urged that the proceedings in relation to enhancement of compensation had not yet attained finality and proceedings in that regard were pending in this Court. The learned Senior Counsel, therefore, urged that an appropriate writ should be issued and the insistence on the part of the CIDCO to submit MAVEJA NOC should be quashed. It was further urged that the proceedings in relation to enhancement of compensation had not yet attained finality and proceedings in that regard were pending in this Court. The learned Senior Counsel, therefore, urged that an appropriate writ should be issued and the insistence on the part of the CIDCO to submit MAVEJA NOC should be quashed. 5) Per contra, Shri A.M. Kulkarni, Advocate appearing for the Respondent opposed the writ petition and submitted that the nature of relief as sought by the petitioner could not be granted under Article 226 of the Constitution of India. It was submitted that the amount of 4 / 12 enhanced compensation was sought on the basis of the original allotment letter dated 26th October, 2007 wherein a specific condition for payment of such enhanced compensation was incorporated. This liability of the original allottee was further incorporated in the subsequent agreement entered into by CIDCO on 22nd February, 2008, 30th April, 2008 and 15th December, 2009, the last agreement being the one entered into with the petitioner. It was further submitted that CIDCO was a Government company and was, therefore, obliged to ensure recovery of enhanced compensation. Therefore, aforesaid stipulation was specifically incorporated in the various agreements. The learned Counsel submitted that in terms of the order passed in reference proceedings under Section 18 of the Land Acquisition Act, 1894, CIDCO had already deposited the amount of enhanced compensation in Court. It was, thus, urged that the petitioner was seeking to wriggle out its contractual liability of paying enhanced compensation by invoking the writ jurisdiction of this Court and the same was not permissible in law. 6) It is not in dispute that the original owners of the land that was acquired for the New Bombay Project became eligible for grant of development rights in view of the scheme of the State Government as per GR dated 6th March, 1990. As per the said scheme 12.5% land was made available for development to the original land owners on certain terms and conditions by CIDCO. Similar such allotment of 12.5% land was made in favour of Abdul Kadar Mulla and other coowners on 26th October, 2007. In said basic allotment letter, it was stipulated that enhanced compensation that would be determined in the land acquisition proceedings would be payable to CIDCO. Similar such allotment of 12.5% land was made in favour of Abdul Kadar Mulla and other coowners on 26th October, 2007. In said basic allotment letter, it was stipulated that enhanced compensation that would be determined in the land acquisition proceedings would be payable to CIDCO. These terms and conditions were accepted by the original owners and pursuant thereto the land in question was leased by CIDCO on 22nd February, 2008. In said lease deed there was a specific condition that the lessees had unconditionally agreed to pay additional lease premium that would be increased in case of enhanced compensation in the land acquisition proceedings. The subsequent tripartite agreement were entered into with the same rights and liabilities that had been incorporated in the original lease agreement. Thus, it is clear that the petitioner was claiming the right to develop the property under the tripartite agreement dated 15th December, 2009 and had agreed to the rights, obligations and liabilities that had been referred in the initial lease agreement. There is no dispute whatsoever that the petitioner was claiming the right to develop the aforesaid property in terms of the original order of allotment dated 26th October, 2007 and the lease deed dated 22nd February, 2008. It is in the light of this admitted position that the entitlement of the petitioner to seek non-implementation of condition No.10 in relation to payment of enhanced compensation is required to be considered. 7) The law in this regard is fairly well settled. In Har Shankar Vs. Deputy Excise and Tax Commissioner and others (1975) 1 SCC 737 certain liquor contractors and hoteliers who had successfully bid at the auctions for retail sale of country liquor and foreign liquor were given licences by the Excise Department. The terms and conditions governing the auctions had been made known to bidders who had thereafter voluntarily participated in the auctions. Subsequently, some of the licencees who were unable to meet their obligations under the terms of the auctions filed a writ petition challenging the validity of the auctions and terms thereof. The writ petitions filed by the licencees were dismissed by the High Court. Subsequently, some of the licencees who were unable to meet their obligations under the terms of the auctions filed a writ petition challenging the validity of the auctions and terms thereof. The writ petitions filed by the licencees were dismissed by the High Court. The Constitution Bench of the Supreme Court of India while considering a preliminary objection to the maintainability of the writ petitions observed in paragraph 16 as under: “Those interested in running the country liquor vends offered their bids voluntarily in the auctions held for granting licences for the sale; of country liquor. The terms and conditions of auctions were announced before the auctions were held and the bidders participated in the auctions without a demur and with full knowledge of the commitments which the bids involved. The announcement of conditions governing the auctions were in the nature of an invitation to an offer to those who were interested in the sale of country liquor. The bids given in the auctions were offers made by prospective vendors to the Government. The Government's acceptance of those bids was the acceptance of willing offers made to it. On such acceptance, the contract between the bidders and the Government became concluded and a binding agreement came into existence between them. The successful bidders were then granted licences evidencing the terms of contract between them and the Government, under which they became entitled to, sell liquor. The licensees exploited the respective licences for a portion of the period of their currency, presumably in expectation of a profit. Commercial considerations may have revealed an error of judgment in the initial assessment of profitability of the adventure but that is a normal incident of the trading transactions. Those who contract with open eyes must accept the burdens of the contract along with its benefits. The powers of the Financial Commissioner to grant liquor licensees by auction and to collect licence fees through the medium of auctions cannot by writ petitions be, questioned by those who, had their venture succeeded, would have relied upon those very powers to found a legal claim. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract could ever have a binding force.” Similarly, in New Bihar Bidi Leaves Company Vs State of Bihar (1981) 1 SCC 537 the Supreme Court in paragraph 48 observed as under : “48. It is a fundamental principle of general application that if a person of his own accord, accepts a contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide by some of the terms of the contract which proved advantageous to him and repudiate the other terms of the same contract which might be disadvantageous to him. The maxim is qui approbat non reprobat, (one who approbates cannot reprobate). This principle, though originally borrowed from Scots Law, is now firmly embodied in English Common Law. According to it, a party to an instrument or transaction cannot take advantage of one part of a document or transaction and reject the rest. That is to say, no party can accept and reject the same instrument or transaction (Per Scrutton L.J. Verschures Creameries Ltd. v. Hull & Netherlands Steamship Co.; See Douglas Menzies v. Umphelby; See also Stroud's Judicial Dictionary, Vol. I, page 169, 3rd Edn.).” 8) From the above, it is clear that the petitioner having accepted the rights and liabilities that were flowing from the order of allotment dated 26th October, 2007 and the subsequent lease deed dated 22nd February, 2008 cannot now be permitted to resile from the same and be heard to contend that it was not liable to pay the amount of enhanced compensation. Having accepted the rights and liabilities under the aforesaid transactions voluntarily and with open eyes the petitioner cannot now turn around and contend that it was not liable to pay enhanced compensation. Permitting the petitioner to do so would amount to permitting the petitioner to wriggle out of its obligations under aforesaid agreement after having accepted the same. Granting a writ as prayed for by the petitioner would have effect of directing CIDCO not to insist upon payment of enhanced compensation despite the fact that such payment was agreed to by the petitioner. Moreover, CIDCO has already deposited the amount of enhanced compensation in Court. Granting a writ as prayed for by the petitioner would have effect of directing CIDCO not to insist upon payment of enhanced compensation despite the fact that such payment was agreed to by the petitioner. Moreover, CIDCO has already deposited the amount of enhanced compensation in Court. It is, therefore, clear that such a writ at the instance of the petitioner in the present writ petition cannot be issued. 9) In so far as the submission of the learned Senior Counsel for the petitioner that non payment of enhanced compensation could not have been a ground to refuse occupancy certificate under section 45 (1) (iii) of the said Act is concerned, the same is not required to be gone into in the facts of the present case especially when the petitioner had unconditionally agreed to pay to CIDCO the amount of enhanced compensation. CIDCO being the Planning Authority and it being liable to satisfy claims with regard to payment of enhanced compensation had agreed to permit the development of the property in question subject to the developer accepting the liability of payment of enhanced compensation. The same was agreed upon by the parties and on failure of the petitioner to deposit enhanced compensation it is obvious that CIDCO was justified in terms of agreement with the petitioner to refuse to grant occupancy certificate on account of failure to deposit the enhanced compensation. The payment of enhanced compensation being a matter of agreement between the petitioner on one hand and the CIDCO on the other, it is not necessary to examine as to whether CIDCO could have refused to grant occupancy certificate under section 45 (1) (iii) of the said Act on account of failure to deposit the enhanced compensation. Moreover, the agreement itself is not under challenge. Suffice it to say that the writ as prayed for in the present writ petition cannot be granted in the aforesaid circumstances. 10) In view of the aforesaid discussion, we find that there is no merit whatsoever in the writ petition. The same is, therefore, dismissed with no order as to costs. 11) Rule stands discharged accordingly.