B. Prabhakar Rao v. Telangana Rajiv Swagruha Corporation Limited (TRSCL), Rep. by its Vice-Chairman and Managing Director
2026-01-09
NAGESH BHEEMAPAKA
body2026
DigiLaw.ai
ORDER : Nagesh Bheemapaka, J. Challenging the action of the 1 st respondent -Telangana Rajiv Swagruha Corporation Limited (Corporation) in proposing to sell the semi- finished Flats Tower A02 in Sadbhavana Township, Pocharam Municipality as stated in the Broacher dated 10.09.2025 which flats were allotted to petitioners by the 2 nd respondent, this Writ Petition is filed. 2. The undisputed factual matrix of the case is that Respondent-Corporation invited Applications in respect of unfinished towers at Pocharam for completing the work. M/s Mahanandhi Builders (the 2 nd respondent) was allotted A02 Tower at Pocharam vide proceedings Lr.No. 04/TRSCLLEM/Unfinished Towers/2023 dated 07.06.2023. The 2nd respondent paid EMD and also paid part of balance amount, but did not complete the work of construction within the permitted time of four months Hence, they made Application dated 04.10.2024 for extension of time which was extended up to 05.01.2025 by Corporation's letter dated 17.10.2024. 2.1. In terms of the said allotment, the 2nd Respondent advertised that 120 flats are available for sale in A02 Tower. Petitioners purchased Flat Nos. 104, 301, 803, 804, 806, 405, 408, 204, 212, 407, 409, 405, 410, 409, 208, 504, 508, and 805 of unfinished Tower at A02 Pocharam Municipality, Ghatkesar, Medchal-Malkajgiri District in Sadbhavana Township and remitted the amount to respondent-Corporation. Since the 2nd respondent failed to pay the amounts within time, the Corporation passed the order of cancellation in Lr. No. 04/TGRSCLEM/A02 Unfinished Towers/PCHRM/2023, dated 21.01.2025 cancelling the allotment and forfeiting the token advance and first instalment amount of Rs. 3,05,10,000/-. The 2nd respondent approached the Corporation and submitted letter dated 24.03.2025 for issuance of ‘NOC’ for completing the work, however, ‘NOC’ was not given. The Corporation also issued a communication to the 2 nd respondent calling upon to pay Rs. 29.51 Crores. The 2nd respondent submitted a list of 40 members who are ready to purchase the flats, but the ‘NOC’ is not given. The Corporation brought a proposal to sell the semi- finished flats in Tower A02 at Pocharam vide its broacher and Notification dated 10.09.2025. Issuance of ‘NOC’ by respondent- Corporation is a must for Respondent No.2 to obtain loans from the Banks to finish the project. If respondent-Corporation refuses to give ‘NOC’, it will cause irreparable loss and prejudice to the Builder and also to the buyers, who purchased flats through him. 3.
Issuance of ‘NOC’ by respondent- Corporation is a must for Respondent No.2 to obtain loans from the Banks to finish the project. If respondent-Corporation refuses to give ‘NOC’, it will cause irreparable loss and prejudice to the Builder and also to the buyers, who purchased flats through him. 3. The Respondent Corporation filed counter-affidavit mainly contending that Writ Petition is not maintainable since the dispute is a commercial/contractual one. It is stated that Government decided to sell the unfinished towers of the Corporation in 'as is where is' basis and invited bids. As stated above, Respondent No.2 was allotted A02 unfinished tower at Pocharam for completion of the work. They failed to make prompt payments and hence, the allotment was cancelled. Respondent No.2 therefore, filed Writ Petition NO. 28982 of 2025 challenging cancellation with an inordinate delay of Eight Months from the date of cancellation letter dated 21.01.2025; after expiry of statutory waiting period, the same tower was re-notified for sale through a fresh notification dated 10.09.2025; from 22.01.2025 till date, there has been no correspondence between respondent Corporation and the 2 nd respondent. 3.1. It is also stated, allotment letter dated 25.04.2023 itself expressly provides that no ownership rights accrue to the tower allottee, its associates, members of an Association or prospective purchasers until the entire consideration is paid to HMDA/TGRSCL; neither the tower allottee nor any person claiming through or under it is entitled to raise disputes, seek arbitration, or asset rights over the subject property. While Respondent No.1 permitted the tower allottee to identify or mark individual flats to prospective purchasers, it categorically stipulated that registration of any flat - whether in favour of allottee or any buyer, would be affected only after the entire tower cost was paid to TGRSCL/HMDA. Some of the petitioners chose on their own to make part payments either to the allottee or directly into the respondent corporation’s account; such unilateral deposits were never invited by TGRSCL and were expressly made at their own risk and responsibility and cannot be construed as creating any independent contractual or proprietary right in their favour. The primary obligation to pay the full tower consideration rests solely on Respondent No.2 and until that obligation is discharged, no right, title or interest - statutory or contractual - accrues to any third party.
The primary obligation to pay the full tower consideration rests solely on Respondent No.2 and until that obligation is discharged, no right, title or interest - statutory or contractual - accrues to any third party. Petitioners, therefore, cannot rely on their voluntary deposits to claim locus or seek writ relief against the Corporation. 3.2. It is also stated, while Corporation allotted Tower A02 to Respondent No.2, any advertisements issued, promises made, or agreements entered by Respondent No.2 with petitioners were entirely private arrangements for which the Corporation bears no responsibility. The allotment letter expressly made Respondent No.2 solely liable to complete the construction and to discharge the entire tower consideration before any registration of individual flats could occur. Any assurances made by Respondent No.2 do not bind the Corporation in any manner. Petitioner’s reliance on such private transactions cannot create any contractual or statutory obligation against Respondent Corporation whose role was confined to the original allotment and enforcement of its terms. 3.3. Respondent No.1 contends that project / tower remains incomplete as the tower concerned is only at the stage where the slab has been laid and the walls are constructed. Substantial finishing works are still pending and are contractually to be undertaken by Respondent No.2, the original allottee and buyer of the tower. Issuance of NOC directly to individual purchasers of Respondent No.2 would create serious complications and for these reasons, Respondent No.1 was constrained from issuing NOC in a fragmented manner and can do so only in accordance with the original allotment condition. Respondent No.1 issuing NOC in respect of Tower A04 to the original allottee namely The Telangana Public Sector Employees Mutually Aided Cooperative Housing Society is different. However, NOC was issued only to the Society as the original allottee accompanied by specific terms and conditions requiring payment of full tower cost before any registration of flats could take place. Respondent No.2 failed to meet contractual obligations. Petitioners’ comparison with TGPSEMA tower A04 transaction is therefore, misplaced and does not give rise to any claim of unequal treatment or discrimination and claims of preferential treatment under Article 14 cannot be sustained. 3.4.
Respondent No.2 failed to meet contractual obligations. Petitioners’ comparison with TGPSEMA tower A04 transaction is therefore, misplaced and does not give rise to any claim of unequal treatment or discrimination and claims of preferential treatment under Article 14 cannot be sustained. 3.4. This respondent contends that in view of the repeated defaults by Respondent No.2 and cancellation of allotment on 21.01.2025 following the original allotment dated 25.04.2023, Respondent No.1 issued a fresh notification dated 10.09.2025 for auction of tower A02 after expiry of the statutory waiting period; wide publicity has been given to the proposed auction through print and other media and substantial expenditure has already been incurred towards notification and advertisement. If the auction is now restrained or delayed, it would cause irreparable financial loss and serious prejudice to Respondent No.1 and diminish the value of the property. 4. Heard Sri P. Venu Gopal, learned Senior Counsel assisted by Sri Basam Shiva Teja, learned counsel for petitioners, Sri A. Sudarshan Reddy, learned Advocate General for the Respondent Corporation and Sri Vedula Srinivas, learned Senior Counsel assisted by Smt. Vedula Chitra Lekha, learned counsel for Respondent No.2. 5. The core contention of Respondent Corporation is that the lis is a commercial/contractual dispute and hence, no Writ of Mandamus is maintainable. Reliance for this proposition is placed on Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation, (2000) 5 SCC 287 , Michigan Rubber (India) Ltd. us State of Karnataka, (2012) 8 SCC 216 and G.P. Medical Stores NIMS, rep by its Partner S.Mohith v State of Telangana rep. by its Principal Secretary, Medical and Health Department , (2024) SCC OnLine TS 3321 . The principle in these pronouncements is that Government and their undertakings must have a free hand in setting terms of the tender and only if they are arbitrary, discriminatory, mala fide is actuated by bias, would Courts interfere. Otherwise, the Courts, normally, would not interfere in contractual/commercial disputes, 6. Per contra, learned Senior Counsel appearing for Respondent No.2 placed reliance on the judgment of the Hon'ble Supreme Court in Subodh Kumar Songh Rathour v the Chief Executive Officer (Civil Appeal No. 6741 of 2024, dt.09.07.2024) reported in MANU/SC/0585/2024. In this case, petitioner, who was the successful bidder, was given Memorandum of tender for work.
Per contra, learned Senior Counsel appearing for Respondent No.2 placed reliance on the judgment of the Hon'ble Supreme Court in Subodh Kumar Songh Rathour v the Chief Executive Officer (Civil Appeal No. 6741 of 2024, dt.09.07.2024) reported in MANU/SC/0585/2024. In this case, petitioner, who was the successful bidder, was given Memorandum of tender for work. Thereafter, respondent issued a notice to the appellant stating that tender for work of maintenance had been cancelled on account of technical fault in tender. Applying the principle of doctrine of legitimate expectation in public law founded on the principles of fairness and non-arbitrariness in Government dealing with individuals, the Hon'ble Supreme Court allowed the Appeal holding as under: "130. We are of the considered opinion that the litigation at hand is nothing but a classic text book case of an arbitrary exercise of powers by the Respondent in cancelling the tender that was issued in favour of the appellant and that too at the behest of none other than the concerned Minister-In-charge and there by rendering the Notice of Cancellation dt.07.02.2023 illegal." 6.1. This judgment is of no help. The facts in the case on hand are different from the facts of the said case. In the extant case, admittedly, Respondent No.2 failed to make payments as stipulated in the terms of contract, in spite of extension of time, within the stipulated time. Therefore, Respondent Corporation was constrained to cancel the allotment. There is neither arbitrariness nor it was done at the behest of any person. Once the allotment is cancelled, respondent-Corporation would naturally sell the unfinished flats. Further, in the case relied on by Respondent No.2, a judicial review of the act of the respondent (writ of certiorari) was sought for, but not a Mandamus. In the case on hand, a writ of Mandamus is sought. Time and again the Hon'ble Apex Court is sensitizing that the High Courts should not interfere with the disputes of commercial/contractual in nature unless such disputes are the result of arbitrariness/unfairness etcetera on the part of the State or Instrumentalities of the State. Such disputes have to be decided by the Commercial Courts. 7. In contractual agreement, by defaulting in making payments within the time agreed to in the agreement, Respondent No.2 committed breach of contract, as such, respondent-Corporation has acted upon by issuing the impugned order.
Such disputes have to be decided by the Commercial Courts. 7. In contractual agreement, by defaulting in making payments within the time agreed to in the agreement, Respondent No.2 committed breach of contract, as such, respondent-Corporation has acted upon by issuing the impugned order. In this set of facts, what is the right, much less fundamental/statutory right, of petitioners that was infringed for invoking Article 226 of the Constitution is not pleaded or established. It is not even the case of petitioners or that of Respondent No.2 that respondent Corporation has no competency or authority to pass the impugned order. No public interest element is involved for issuance of a writ of Mandamus under Art. 226 of the Constitution even. 8. Further more, as could be seen from the counter of Respondent Corporation, allotment letter dated 25.04.2023 itself expressly provides that no ownership rights accrue to the tower allottee, its associates, members of an Association or prospective purchasers until the entire consideration is paid to HMDA/TGRSCL; neither the tower allottee nor any person claiming through or under it is entitled to raise disputes, seek arbitration, or asset rights over the subject property. While Respondent No.1 permitted the tower allottee to identify or mark individual flats to prospective purchasers, it categorically stipulated that registration of any flat - whether in favour of allottee or any buyer, would be affected only after the entire tower cost was paid to TGRSCL/HMDA. Some of the petitioners chose on their own to make part payments either to the allottee or directly into the respondent corporation’s account; such unilateral deposits were never invited by TGRSCL and were expressly made at their own risk and responsibility and cannot be construed as creating any independent contractual or proprietary right in their favour. 9. Since Respondent No.2 failed to discharge the primary obligation to pay the full tower consideration, no right, title or interest -statutory or contractual - accrues to any third party. Petitioners, therefore, cannot rely on their voluntary deposits to claim locus or seek writ relief against the Corporation. Further, any advertisements issued, promises made, or agreements entered by Respondent No.2 with petitioners were entirely private arrangements for which the Corporation bears no responsibility. The allotment letter expressly made Respondent No.2 solely liable to complete the construction and to discharge the entire tower consideration before any registration of individual flats could occur.
Further, any advertisements issued, promises made, or agreements entered by Respondent No.2 with petitioners were entirely private arrangements for which the Corporation bears no responsibility. The allotment letter expressly made Respondent No.2 solely liable to complete the construction and to discharge the entire tower consideration before any registration of individual flats could occur. Petitioner’s reliance on such private transactions cannot create any contractual or statutory obligation against Respondent Corporation whose role was confined to the original allotment and enforcement of its terms. 10. The other aspect, which has to be seen is issuance of NOC directly to individual purchasers of Respondent No.2 would create serious complications. Respondent No.1 issued NOC in respect of Tower A04 to the original allottee namely The Telangana Public Sector Employees Mutually Aided Cooperative Housing Society. In this case, Respondent No.2 failed to meet contractual obligations, hence, petitioners’ comparison with TGPSEMA tower A04 transaction is therefore, misplaced and does not give rise to any claim of unequal treatment or discrimination and claims of preferential treatment under Article 14 cannot be sustained. 11. Further, consequent upon cancellation of allotment on 21.01.2025, Respondent No.1 issued a fresh notification dated 10.09.2025 for auction of tower A02 after expiry of the statutory waiting period; wide publicity has been given to the proposed auction through print and other media and substantial expenditure has already been incurred towards notification and advertisement. If the auction is now restrained or delayed, it would cause irreparable financial loss and serious prejudice to Respondent No.1 and diminish the value of the property. 12. For the above reasons, the Writ Petition fails and the same is accordingly dismissed. No costs. 13. Consequently, the miscellaneous Applications, if any shall stand closed.