JUDGMENT By the Court.—Heard learned counsel for the petitioner, Sri Nisheeth Yadav, learned counsel appearing for respondent No. 2 and learned Standing Counsel for the State. 2. Brief facts of the case are as follows: The petitioner’s mother Smt. Kiran Jalan w/o Sri Shyamanand Jalan was allotted plot No. N-68 in Sector Delta of Greater Noida by the Greater Noida Industrial Development Authority/respondent No. 2 vide allotment letter dated 5.12.1994. In this letter, it was stated that the plot would be allotted by December, 1996 but the allotment actually materialized only by August, 1998, copies of the allotment intimation letter dated 5.12.1994 and allotment letter dated 20.8.1998 have been brought on record as Annexure 1 to this writ petition. As per the allotment letter, the execution of lease deed was to start from 1.5.1999, however, lease deed was ultimately executed only on 27.3.2003 and thereafter, a possession certificate was issued to the petitioner on 28.3.2003 and in pursuance thereof actual possession was handed over to the petitioner only on 28.3.2003, a copy of the lease deed has also been brought on record as Annexure 2 to the writ petition. 3. It is necessary at this stage to refer to certain clause of lease deed which was executed on 27.3.2003. Clause 23(b) of the lease deed reads as under : “23 (b) That the Lessee shall have to erect and complete building on the leased land within nine years from the date of allotment or upto December, 2003 whichever is earlier, unless extension is allotted by the lessor in exceptional circumstances and on such conditions as it may impose, (Extension of one year, two year and three year may be granted by the lessor on payment of 4% for 1st year, 6% for IInd year and 8% for IIIrd year, of the total premium of the plot, as an extension charges by the lessee) “ 4. It may be clarified that as per the lease deed the consideration of the premium was Rs. 4,27,500/-, an amount which is mentioned in the lease deed itself. Clause 23(a) and Clause 24 of the lease deed are also quoted herein below : “23(a). That the lessee shall have to erect and complete building on the leased land within three years from the due date of execution of lease deed I.e...... or within five year from the date of allotment i.e........... Clause 23(a) and Clause 24 of the lease deed are also quoted herein below : “23(a). That the lessee shall have to erect and complete building on the leased land within three years from the due date of execution of lease deed I.e...... or within five year from the date of allotment i.e........... whichever the date comes later, unless extension is allowed by the lessor in exceptional circumstances and on such conditions as it may impose. (Extension of one year, two year and three year may be granted by the lessor on payment of 4% for 1st year, 6% for 2nd year and 8% for 3rd year, of total premium of the plot respectively as an extension charges by the lessee). 24. That in case the lessee does not construct building within the time provided for above, this deed of lease will be liable to be determined with the penalties and consequences given in clause-III hereinafter. However, in exceptional circumstances the lessor or any officer authorized by him can allow extension, subject to the fulfillment of such conditions, charges as he may impose for the same.” 5. It has further been contended in the writ petition that as Smt. Kiran Jalan was suffering from cancer as a result of which she died on 17.8.2007 and as per the last will and testament of Smt. Kiran Jalan dated 26.5.2007 the aforesaid plot in question at Greater Noida was assigned to a trust, namely, Kiran Devi Jalan Trust, of which the petitioner was Managing Trustee and Executor with a request to respondent No. 2 for transfer of the plot to the trust and the authority was duly informed by the petitioner for mutation of the plot in the name of the trust. 6. The contention of the learned counsel for the petitioner is that the respondent authority vide letter dated 24.9.2012 has raised a demand of Rs. 37,77,435/- towards delay penalty. A copy of which has been brought on record as Annexure 4 to the writ petition. A further letter was issued by the Manager of the property dated 3.12.2012 by which letter amount was increased to Rs. 42,81,225/- for the period upto 31.3.2013, copy of the said letter has been brought on record as Annexure 5 to the writ petition. 7. A further letter was issued by the Manager of the property dated 3.12.2012 by which letter amount was increased to Rs. 42,81,225/- for the period upto 31.3.2013, copy of the said letter has been brought on record as Annexure 5 to the writ petition. 7. Being aggrieved against the aforesaid two communications/orders 24.9.2012 and 3.12.2012, the petitioner has filed the present writ petition challenging the said demand for delay penalty, as it feels that the delay in construction could not be attributed to the petitioner. 8. In the aforesaid matter an interim order was granted by this Court on 23.4.2013, which reads as under : “Heard learned counsel for the petitioner. Sri Nisheet Yadav, learned counsel appearing for respondent No. 2 prays for and is allowed four weeks time to file counter-affidavit. List thereafter. Learned counsel for the petitioner submits that although the allotment of the plot were made earlier, but admittedly the possession was given in March 2003 and the period of construction having been given as nine years no penalty can be charged before March 2009. He submits that the penalty could be charged on the percentage of the premium and not on the present market rate. The petitioner has made out prima facie case for grant of interim relief. Till the next date of listing the demand of Rs. 47,12,760/- shall remain stayed. However, the petitioner shall deposit the amount of penalty with effect from March 2012 within a period of four weeks from the date the amount is indicated by respondent No. 2." 9. The petitioner has made out prima facie case for grant of interim relief. Till the next date of listing the demand of Rs. 47,12,760/- shall remain stayed. However, the petitioner shall deposit the amount of penalty with effect from March 2012 within a period of four weeks from the date the amount is indicated by respondent No. 2." 9. A counter-affidavit has been filed alongwith stay application on behalf of respondent No. 2 and the main plea taken in the counter-affidavit is to the effect that since the petitioner has not challenged “the clause which compels the petitioner to complete the construction up to December, 2003 or within 9 years from the date of allotment whichever is earlier, therefore, since the execution of the lease deed is in pursuance of the contract between the parties and if any of the parties is effected by any of the clause of the lease deed then the proper remedy is of challenging the same by way of a suit or in a company Court.” A further plea has been taken in paragraph No. 5 of the counter-affidavit which is that the petitioner has got alternative remedy by filing a revision before the State Government under Section 41(3) of U.P. Urban Planning & Development Act, 1973 read with Section 12 of U.P. Industrial Development Act, 1976 as such the writ petition is liable to be dismissed on the ground alone. 10. Learned counsel for the respondents has placed strong reliance upon certain judgment with regard to the jurisdiction of the Court to exercise its power of judicial review in contractual matters and also on the ground of alternative remedy. 11. The submission made by learned counsel for the respondent that the writ petition is not maintainable since it arises out of contractual matter between the parties needs to be considered first. 12. The respondent No. 2 has made an allotment of plot measuring 450 Sq. Mt. in Sector Delta, Greater Noida by letter dated 20.8.1998. A lease deed dated 27.3.2003 was executed between the petitioner and Greater Noida Authority. Clause 23(b) of the lease deed provided a period of 9 years from the date of the allotment or upto December, 2003 whichever is earlier for completion of building. The said clause also contemplates extension of period by the lessor on condition as mentioned therein. A lease deed dated 27.3.2003 was executed between the petitioner and Greater Noida Authority. Clause 23(b) of the lease deed provided a period of 9 years from the date of the allotment or upto December, 2003 whichever is earlier for completion of building. The said clause also contemplates extension of period by the lessor on condition as mentioned therein. The respondent vide its letter dated 24.9.2012 and subsequent letters dated 3.12.2012 and 15.1.2013 has asked the petitioner to deposit the delay penalty for non-completion of building in exercise of power under Clause 23(b) of the lease deed. 13. The submission of Sri Nisheet Yadav, learned counsel for the respondent is that since the action impugned has been taken in pursuance of contract between the parties, the writ petition is not maintainable. Sri Nisheet Yadav in support of his submission has placed reliance on judgements of the Apex Court in Kerala State Electricity Board and another v. Kurien E. Kalathil and others, 2000 (6) SCC 293 ; National Highways Authority of India v. Ganga Enterprises and another, 2003 (7) SCC 410 ; Binny Ltd. and another v. Sadasivan and others with D.S. Veer Ranji v. CIBA Speciality Chemicals (I) Ltd. and others, 2005(6) SCC 657 and Rajashthan State Industrial Development and Investment Corporation and another v. Diamond & Gem Development Corporation Limited and another, 2013(5) SCC 470 . 14. In Kerala State Electricity Board (Supra) case, writ petition was filed by a contractor challenging the termination of contract as well as for a writ of mandamus claiming reimbursement on account of payment of revise minimum wages to the employees. High Court allowed the writ petition against which the Corporation filed a Special Leave Petition in the Supreme Court. The Apex Court held that the contract between the parties was not a statutory contract and the dispute relating to interpretation of terms and conditions of such contract could not be agitated in writ petition under Article 226 of the Constitution of India. Following was laid down in para 10 and 11 : “10. We find that there is a merit in the first contention of Mr. Rawal. Learned Counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract? We find that there is a merit in the first contention of Mr. Rawal. Learned Counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract? If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. 11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a Civil Court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have been relegated to other remedies.” 15. The next judgement relied by the counsel for the respondent is National Highways Authority of India (Supra). In the said case the challenge in the writ petition was about the forfeiture of security deposit of a contractor. The Apex Court held that the dispute relating to contract cannot be agitated under Article 226 of the Constitution of India. Following was laid down in paragraph 6 : “6. The respondent then filed a writ petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz: (a) whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to Section 5 of the Contract Act; and (b) whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered Question (a) and then chose not to answer Question (b). In our view, the answer to Question (b) is clear. It is settled law that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It has been so held in the cases of Kerala SEB v. Kurien E. Kalathil, State of U.P. v. Bridge & Roof Co. (India) Ltd. And Bareilly Development Authority v. Ajai Pal Singh. This is settled law. The dispute in this case was regarding the terms of offer. They were thus contractual disputes in respect of which a writ Court was not the proper forum. Mr. (India) Ltd. And Bareilly Development Authority v. Ajai Pal Singh. This is settled law. The dispute in this case was regarding the terms of offer. They were thus contractual disputes in respect of which a writ Court was not the proper forum. Mr. Dave, however, relied upon the cases of Verigamto Naveen v. Government of A.P. And Harminder Singh Arora v. Union of India. These, however, are cases were the writ Court was enforcing a statutory right or duty. These cases do not lay down that a writ Court can interfere in a mater of contract only. Thus on the ground of maintainability the petition should have been dismissed.” 16. In Binni Limited (Supra) case, the respondents were working as Member of the Management Staff of the appellant company. The staff was terminated which was subject-matter of challenge in the writ petition. The Apex Court held that in the matter of employment of worker by private bodies on the basis of contract entered between them, Courts have been reluctant to exercise the power of judicial review. Following was laid down in paragraph 16, 27 and 29 : “16. The above guidelines and principles applied by English Courts cannot be fully applied to Indian conditions when exercising jurisdiction under Article 226 or 32 of the Constitution. As already stated, the power of the High Courts under Article 226 is very wide and these powers have to be exercised by applying the constitutional provisions and judicial guidelines and violation, if any, of the fundamental rights guaranteed in Part III of the Constitution. In the matter of employment of workers by private bodies on the basis of contracts entered into between them, the Courts had been reluctant to exercise the powers of judicial review and whenever the powers were exercised as against private employers, it was solely done based on public law element involved therein. 27. In the second case also, namely, the Delhi Transport Corporation v. DTC Mazdoor Congress and others, 1991 Supp.(1) SCC 600, the appellant was a public sector undertaking and the main controversy was about the term “other authorities” under Article 12 of the Constitution. Both in Central Inland and DTC cases, the decision of the public sector undertaking was under challenge and the question raised was whether the principles of natural justice and fairness are to be applied. Both in Central Inland and DTC cases, the decision of the public sector undertaking was under challenge and the question raised was whether the principles of natural justice and fairness are to be applied. It was held that this Court has got jurisdiction to consider this question by invoking the principles of judicial review. But it would be noticed that in both the cases, it was a public sector undertaking coming within the purview of “other authorities” under Article 12 of the Constitution. 29. Thus, it can be seen that a writ of mandamus or the remedy under Article 226 is pre-eminently a public law remedy and is not generally available as a remedy against private wrongs. It is used for enforcement of various rights of the public or to compel the public/statutory authorities to discharge their duties and to act within their bounds. It may be used to do justice when there is wrongful exercise of power or a refusal to perform duties. This writ is admirably equipped to serve as a judicial control over administrative actions. This writ could also be issued against any private body or person, specially in view of the words used in Article 226 of the Constitution. However, the scope of mandamus is limited to enforcement of public duty. The scope of mandamus is determined by the nature of the duty to be enforced, rather than the identity of the authority against whom it is sought. If the private body is discharging a public function and the denial of any right is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial, but, nevertheless, there must be the public law element in such action. Sometimes, it is difficult to distinguish between public law and private law remedies. According to Halsbury’s Laws of England 3rd ed. Vol. 30, page-682, “a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform and which perform the duties and carries out its transactions for the benefit of the public and not for private profit.” There cannot be any general definition of public authority or public action. The facts of each case decide the point.” 17. The facts of each case decide the point.” 17. It is useful to note two other judgments of the Apex Court in the above context. In ABL International and another v. Export Credit Guarantee Corporation of India Ltd. and others, 2004 (3) SCC 553 , the issue of maintainability of writ petition for enforcement of contractual obligation of State or its instrumentality came for consideration. The Apex Court in the said case held that on a given set of facts, if State acts in an arbitrary manner and even in a matter of contract, aggrieved party can approach the Court by way of writ petition under 226 of the Constitution of India. Following was laid down in paragraph 10 and 23 : “10. It is clear from the above observations of this Court in the said case though a writ was not issued on the facts of that case, this Court has held that on a given set of facts if a State acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the Court by way of writ under Article 226 of the Constitution and the Court depending on facts of the said case is empowered to grant the relief. This judgment in K.N. Guruswamy v. The State of Mysore and others, was followed subsequently by this Court in the case of The D.F.O, South Kheri and others v. Ram Sanehi Singh, 1971 (3) SCC 864 , wherein this Court held: “By that order he has deprived the respondent of a valuable right. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N. Guruswamy’s case (supra), there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.” 23. In view of the judgment of this Court in K.N. Guruswamy’s case (supra), there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.” 23. It is clear from the above observations of this Court, once State or an instrumentality of State is a party to the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of the State has acted in contravention of the above said requirement of Article 14 then we have no hesitation that a writ Court can issue suitable directions to set right the arbitrary actions of the first respondent. In this context, we may note that though the first respondent is a company registered under the Companies Act, it is wholly owned by the Government of India. The total subscribed share capital of this company is 2,50,000 shares out of which 2,49,998 shares are held by the President of India while one each share is held by the Joint Secretary, Ministry of Commerce and Industry and Officer on Special Duty, Ministry of Commerce and Industry respectively. The objects enumerated in the Memorandum of Association of the first respondent at Para 10 states : “To undertake such functions as may be entrusted to it by Government from time to time, including grant of credits and guarantees in foreign currency for the purpose of facilitating the import of raw materials and semi-finished goods for manufacture or processing goods for export.” Para 11 of the said object reads thus : “To act as agent of the Government, or with the sanction of the Government on its own account, to give the guarantees, undertake such responsibilities and discharge such functions as are considered by the Government as necessary in national interest.” 18. Again in Reliance Energy Ltd. and another v. Maharashtra State Road Development Corpn. Ltd. and others, 2007 (8) SCC 1 . The Apex Court again reiterated that principle of judicial review cannot be denied even in contractual matter but judicial review is initiated to prevent arbitrariness and it must be in exercise of larger public interest. Again in Reliance Energy Ltd. and another v. Maharashtra State Road Development Corpn. Ltd. and others, 2007 (8) SCC 1 . The Apex Court again reiterated that principle of judicial review cannot be denied even in contractual matter but judicial review is initiated to prevent arbitrariness and it must be in exercise of larger public interest. It is useful to quote observation in paragraph 39 which is to the following effect : “39. In Reliance Airport Developers (P) Ltd. v. Airports Authority of India and others, the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of “judicial review” cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms. Those norms may be legal norms or accounting norms. As long as the norms are clear and properly understood by the decision-maker and the bidders and other stakeholders, uncertainty and thereby breach of rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above “certainty” is an important aspect of rule of law. In the case of Reliance Airport Developers (supra), the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks had different stages. Objectivity was thus provided.” 19. In the case of Reliance Airport Developers (supra), the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks had different stages. Objectivity was thus provided.” 19. From the above noted judgments of the Apex Court it is, thus, clear that normally in contractual matters the Court does not entertain the petition leaving the parties to settle their rights in accordance with the ordinary civil law remedies as available. However, when action of the State Government or its instrumentality is found to be arbitrary and unfair, there is no lack of jurisdiction in the High Court to exercise its power of judicial review. Thus, for exercising the power of judicial review, the facts of each case have to be looked into for taking a decision. 20. In the present case learned counsel for the petitioner has contended that by impugned letters, the authority has demanded an exorbitant amount of delay penalty which is nothing but an arbitrary exercise of power. It is submitted that although the delay penalty has been demanded in purported exercise of granting extension in the period for completion of building but the demand is contrary to the conditions as laid down in Clause 23 (b) of the lease deed itself. It is further submitted that for the first time the authority has issued notice dated 24.9.2012 demanding delay penalty with effect from 1.1.2005. It is submitted that normally in all lease deeds the allottees have been granted 9 years period for construction from the date of allotment whereas in the present case possession was handed over only on 27.3.2003 and from that date only 9 years had been completed. Exercise of power by the respondent demanding delay penalty from 1.1.2005 after more than 7 years is nothing but exercise of an arbitrary power and is unfair and unjust. 21. We, thus, have to examine as to whether the demand of delay penalty by the respondent can be said to be arbitrary and unfair. 22. Exercise of power by the respondent demanding delay penalty from 1.1.2005 after more than 7 years is nothing but exercise of an arbitrary power and is unfair and unjust. 21. We, thus, have to examine as to whether the demand of delay penalty by the respondent can be said to be arbitrary and unfair. 22. Clause 23 (b) of the lease deed dated 21.3.2003 provides for terms and conditions for extension in following words : “...unless extension is allowed by the lessor in exceptional circumstances and no such conditions as it may impose (Extension of one year, two year and three year may be granted by the lessor on payment of 4% for 1st year 6% for IInd year, and 8% for IIIrd year of the total premium of the plot, as an extension charges by the lessee). " 23. Extension of 1 year, 2 year and 3 year may be granted by the lessor of payment of 4% for the first year 6% for the second year and 8% for the third year of the “TOTAL PREMIUM OF THE PLOT” as an extension charges. 24. The letter dated 24.9.2012; Annexure 4 to the writ petition is a letter by which delay penalty has been demanded. The said letter contains a chart giving calculation for delay penalty from 1.1.2005 to 30.9.2012. It is useful to extract the details of computation as given in the letter dated 24.9.2012, which is in the following manner : 25. From the above chart, it is clear that different amounts of delay penalty have been arrived by taking the price of plot per square mtr. in different years. For example from 1.1.2005 to 31.12.2007 the value of plot has been arrived @ 950 per sq. mt. and 18% of the amount has been computed as delay penalty. For the period 1.4.2011 to 30.9.2012 value of plot per sq.mt. has been taken as Rs. 18660/- and 6% of the value has been treated as delay penalty. 26. As noted above the premium of the entire plot of 450 sq.mt. as per the allotment letter is Rs. 4,27,500/-. The above chart indicates that in several years the delay penalty has exceeded the premium of the entire plot. For example at Item No. 5, 7, 9 and 10 the delay penalty has been taken for one year of the amount which is more than Rs. 4,27,500/-. 27. as per the allotment letter is Rs. 4,27,500/-. The above chart indicates that in several years the delay penalty has exceeded the premium of the entire plot. For example at Item No. 5, 7, 9 and 10 the delay penalty has been taken for one year of the amount which is more than Rs. 4,27,500/-. 27. As noted above, as per Clause 23 (b) 4%, 6% or 8% has to be taken of the total premium of the plot. Thus, various percentage as delay penalty is to be found out on the basis of total premium of the plot i.e. amount of Rs. 4,27,500/-. The delay penalty for the plot cannot be arrived by taking the current price of the plot. The clause contemplates fixation of delay penalty on the basis of the premium of the plot. The computation made by the authority thus cannot be treated to be in accordance with the clause 23 (b) and is nothing but an arbitrary exercise of power. 28. It is further relevant to note that although delay penalty has been computed from 1.1.2005 but for the first time the said demand was issued on 24.9.2012 i.e. after more than 7 years from the imposition of delay penalty. As noted above, period of construction in various schemes of the Authority have been provided 9 years/7 years from the date of allotment which is apparent from different schemes as mentioned in the lease deed itself. It was necessary for the authority to issue notice immediately after the accrual of liability to pay delay penalty by allottee. Issuing the notice after 7 years from the date of accrual of liability is again an arbitrary and unfair exercise of power by the authority. The allotment was made to the petitioner on 20.8.1998 and possession could be handed over on 27.3.2003. 29. However, in view of the fact that scope of the writ petition is not to examine any challenge to any clause of the agreement by which both the parties are bound, we proceed on the premise that petitioner was to complete his construction as per clause 23 (b), but it was incumbent upon the respondent-authority to demand delay penalty charges from the petitioner within a reasonable period from which date it accrued. The authority has also to blame itself for not taking action in a reasonable time. The authority has also to blame itself for not taking action in a reasonable time. It is also relevant to note that Clause 23 (b) empowers the authority to grant extension on such conditions as it may impose. However, the clause itself indicates the manner of imposition of conditions which is mentioned as payment of particular percentage of the total premium of the plot. Thus while exercising its power of imposing condition the authority is bound by clause 23 (b) and cannot demand any delay penalty dehors to clause 23 (b). The allottee Smt. Kiran Jalan died on 17.8.2007 and before death created a trust in which the plot in question was also included and an application for mutation by the trust was also made. 30. After receiving the notice dated 24.9.2012, the petitioner has submitted an application/representation praying for waving of delay penalty on which no consideration has been shown. We, thus, are of the view that the demand of delay penalty by the respondent vide its letter dated 24.9.2012 and by subsequent letters have to be termed as arbitrary and unfair which deserves to be set aside. The respondent may redetermine the delay penalty after taking into consideration the relevant factors and the facts and circumstances of the present case. 31. In result, the writ petition is allowed in following manner: (i) The letter dated 24.9.2012, 3.12.2012, and 14.3.2013 are quashed. (ii) The respondent No. 2 shall determine the delay penalty afresh chargeable from the petitioner keeping in view the following: (a) The delay penalty for a year shall be fixed on the basis of specified percentage of total premium of the plot i.e. percentage of the amount Rs. 427500/- (b) The effect of issuance of letter dated 24.9.2012 demanding delay penalty w.e.f. 1.1.2005 i.e. after expiry of seven years from the date when period for construction came to an end. (c) The allotment of plot was made on 20.8.1998, lease executed on 27.3.2003 by which nine years time from the date of allotment or December 2003 whichever is earlier, whereas in other scheme/sector nine year/seven year time was allowed from the date of allotment for construction of building. (d) The possession of plot was given only on 28.3.2003. (c) The allotment of plot was made on 20.8.1998, lease executed on 27.3.2003 by which nine years time from the date of allotment or December 2003 whichever is earlier, whereas in other scheme/sector nine year/seven year time was allowed from the date of allotment for construction of building. (d) The possession of plot was given only on 28.3.2003. (iii) The respondent No. 2 shall take the decision as above within a period of two months from the date a certified copy of this order is produced before respondent No. 2 and communicate the same to the petitioner. (iv) In event the petitioner does not deposit the delay penalty as determined by respondent No. 2, it shall be open for respondent No. 2 to take such action as permissible under law. No order as to costs.