Shampa Sarkar, J
1. The petitioner is a co-operative society registered under the West Bengal Societies Registration Act, 1961. The petitioner society is known as the Kolkata Fish Suppliers’ Welfare Association. The members of the Kolkata Fish
Suppliers’ Welfare Association (in short the Association) decided to apply for allotment of a plot of land to the West Bengal Housing Infrastructure Development Corporation (in short HIDCO). The application for the first time was made
on January 16, 2009 and thereafter, on September 7, 2009 and the Association prayed for allotment of a plot of land measuring about 3 bighas for construction of a shopping complex for retail and wholesale trade of fish, vegetables, grocery
and poultry. On receipt of the application, the General Manager, HIDCO organized a meeting with the members of the Association and principally agreed to provide a plot of land to the said Association measuring around 1 acre of land in plot
No.CR-6/2, Action Area-I, New Town, Kolkata-700156. Accordingly, on January 1, 2010 by a letter of allotment the said plot was allotted in favour of the Association at the rate of Rs.9,00,000/-per cottah. A total sum of Rs.5,44,50,000/-
towards the cost of the land and an additional sum of Rs.9,63,597/- was paid by the Association towards cost imposed for the delayed payment. In the writ petition however, it has been pleaded that the delay was on the part of HIDCO as it
took some time to fix the price of the land and in issuing the final letter of allotment. Upon receipt of the entire payment including the delayed charge, HIDCO executed and registered a Deed of Sale in favour of the Association on December
8, 2010. Such execution and registration of the deed was made in the office of the Additional District Sub-Registrar, Bidhannagar, Salt Lake City. The Assistant General Manager (Marketing), West Bengal Housing Infrastructure Development
Corporation Limited was the signatory on behalf of HIDCO and two assistant administrative officers of HIDCO were the attesting witnesses on behalf of HIDCO. After the execution and registration of the Deed of Sale, HIDCO handed
over the physical possession of the land being premises No.06-0175 in street No.0175 (erstwhile plot No.6/2), Block No CF, Action Area 1C by issuing a possession letter in favour of the Association. The New Kolkata Development Authority
(NKDA), the concerned local body sanctioned a building plan which was to remain valid for a period of three years. By letters dated February 8, 2013 and August 16, 2013, HIDCO through its General Manager (Commercial)/Marketing,
asked the Association to show cause as to why the proposed construction of the building had not been commissioned. By a letter dated August 26, 2013 the petitioner informed HIDCO that they had already entered into an agreement with a
construction company for piling and other allied works and the construction would commence within a short while. The construction commenced.
2. Suddenly, by a letter dated April 16, 2014, the General Manager (Commercial) by invoking paragraph VIII of the deed of sale, requested the petitioner to pay an additional sum of Rs.2,05,70,000/- towards the sale price at the office of the
Chief Finance Officer of HIDCO by demand draft or pay order, drawn in favour of the respondent company within May 31, 2014. In the said letter, it was stated that audit had pointed out that the land price fixed for the Association was lower
in comparison to other plots allotted for similar commercial use, that is, Rs.12.40 lakhs per cottah. Audit therefore, advised realisation of the differential amount of Rs.2,05,70,000/- from the petitioner. Notice dated April 16, 2014 is quoted
below:-
No.C-366/HIDCO/Admn-1282
                                                                                             Â
Date:-16.04.2014
To,
The President,
Kolkata Fish Suppliers Welfare Association, Kamalaya Centre,
156A, Lenin Sarani
1st Floor, Room No F-77
Sub:- Allotment of land measuring 01(one) acre bearing plot No. CR/6/2, premises No.06-0175 in Sub-CBD of AA-I of New Town, Kolkata
Ref:- This office offer of allotment letter No.M-2807/HIDCO/ADMN-1282/2009 dated 01.01.2010 read with No. M-2565/HIDCO/ADMN-1282/2009 dated 06.08.2010.
Sir,
Land measuring 01 (one) acre bearing plot N.CF/6/2, premises No.06-0175 in Sub-CBD of AA-I of New Town, Kolkata having an area of 01 (one) acre was offered for allotment in your favour at a total consideration of Rs.5,44,50,000/-
(Rupees five crores forty four lakhs fifty thousand) only @ Rs.9.00 lakhs per cottah.
On payment of said consideration money in full, the Deed of Conveyance was executed between WBHIDCO Ltd and Kolkata Fish Suppliers Welfare Association and registered in the office of the A.D.S.R, Bidhanangar, North 24 Parganas
on 09.12.2010 being No.12072 for the year 2010.
Now, during the course of inspection, Audit has pointed out that the land price as fixed was at a lower rate in comparison to other land allotments in such areas for similar commercial use which was at the rate of Rs.12.40 lakhs per cottah.
Audit, therefore, advised for realization of the differencial amount of Rs.2,05,70,000/- Rupees two crore five lakhs seventy thousand) only @ Rs.3.40 lakhs per cottah towards the land price of the said plot of land.
In view of the above observations and recommendation of the Audit for realization of the differencial amount, I am directed to refer to para VIII of the covenants of the PURCHASER of the said differencial amount of land price amounting to
Rs.2,05,70,000/- (Rupees two crores five lakhs seventy thousand) only to the Chief Finance Officer of this Corporation by DD/PO drawn in favour of WBHIDCO Ltd payable within Kolkata by 31.05.2014 at the latest.
Yours faithfully,
General Manager (Commercial)
Date:-16.04.2014
3. The petitioner by a letters dated May 13, 2014 and June 6, 2014 objected to the demand and requested the authority to withdraw the same. The petitioner contended that, as the sale had been concluded almost three and a half years prior to
the issuance of the said notice, the vendor was not entitled to claim any amount in respect of the property as the title had passed on to the petitioner and the contract was concluded. The President of the Association was again requested by
HIDCO by a letter dated November 4, 2015, almost five years after the sale, to pay the differential amount of the consideration. This time, the reason assigned was that the realization was sought to be made on the recommendation of the
Comptroller and Auditor General of India (in short CAG) and in view of the decisions of the Hon’ble Supreme Court in certain cases. The text of the notice dated November 4, 2015 is quoted below:-
No. C-643/HIDCO/ADMIN-1282/2009
To,
Date:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
04.11.15
The President,
Kolkata Fish Suppliers Welfare Association,
Kamalaya Centre,
156A, Lenin Sarani
1st Floor, Room No F-77
Kolkata- 700013
Sub:- Payment of differential land price as pointed out during Audit by the office of the Comptroller & Auditor General (CAG), in respect of 01 acre land bearing plot no. CF-6/2 in Sub-CBD of AA-I of New Town, Kolkata allotted in favou7r
of Kolkata Fish Suppliers Welfare Association.
Ref:- This office letter no. C0366/HIDCO/Admn-1282/2009 dated 15.05.2014 and C-460/HIDCO/Admn-1282/2009 dated 23.05.2014.
Sir,
In inviting a reference to the above, I am directed to say that the differential amount of land price due to its enhancement as per observations and recommendations of Comptroller & Auditor General (CAG) amounting to Rs.2,05,70,000/-
(rupees two crore five lakhs seventy thousand) only has not yet been paid by you inspite of our requests as made by us in our letter under reference.
Your contentions, in this matter have been duly examined by the Govt. of West Bengal in Urban Development Department. On consideration of the facts and circumstances of the instant matter and in the context of the decision of the
Hon’ble Supreme Court of India in the matter it has been decided that fresh demand of the recovery of the said amount of Rs.2,05,7000/- (rupees two crores five lakhs seventy thousand) only be made to you again.
In this connection, reference may be had to the decisions of the Hon’ble Supreme Court of India on 24.09.2014 in a number of Writ petitions including Writ Petition (CRL) No.120 of 2012, Writ Petition (Civil) no. 463 of 2012, Writ Petition
(Civil) no. 515 of 2012, Writ Petition (Civil) no. 283 if 2013.
Accordingly, I am directed to request you to make payment of the differential amount to the tune of Rs.2,05,70,000/- (rupees two crore five lakhs seventy thousand) only by Demand Draft/Pay orders drawn in favour of WBHIDCO Ltd.
payable within Kolkata within 3 (three) months from the date of issue of this letter.
This may please be treated as a fresh demand notice against which the last date of payment shall be 22.01.2016, which may please note.
Yours faithfully,
General Manger (Commercial)
Date: 04.11.15
4. The petitioner by a letter dated November 23, 2015 through its’ learned Advocate, called upon the General Manager (Commercial) HIDCO to rescind, recall and revoke the demand notice. The respondents did not respond to the reply
sent by the petitioners. Hence, the writ petition. In this writ petition, the petitioners have challenged the demand of the additional amount of consideration by HIDCO for sale of the plot of land which had taken place on December 8, 2010.
5. Mr. Sidhartha Mitra, learned Senior Advocate appearing on the behalf of the petitioner, submitted that the deed of sale was executed and registered on December 8, 2010 and the first notice of demand for additional payment towards the
cost of the land was issued on April 16, 2014 which was after a lapse of 3 years. According to the Mr. Mitra, the demand was beyond the period of limitation prescribed under the law. According to him, NKDA issued a sanction plan to the
building proposed to be constructed by the petitioner for retail sale of fish, meat and other poultry products etc. and the building had been partially constructed. During the period between execution and registration of the deed of sale and
issuance of the demand notices, HIDCO had corresponded with the petitioner, asking the petitioner to show cause as to why steps should not be taken against them for not having commenced the construction work. The petitioner answered to
such show cause. This according to Mr. Mitra, estopped the respondent from making any further demand. Such demand according to him, was an afterthought, triggered off by the change in the political establishment. HIDCO, itself had
agreed to transfer by sale the disputed land in favour of the petitioner at a cost of Rs.9 lakh per cottah. Mr. Mitra pointed out to the note sheets and the deeds which have been annexed to HIDCO’s affidavit, to show that the price of lands
which were sold to other buyers at the rate of Rs.12.40 lakhs per cottah, could not be compared with the petitioner, as the allottees in respect of those lands were either 5 star hotels or public limited companies having huge paid up capital
whereas, the petitioner was a co-operative society. Moreover, Mr. Mitra urged, that the rate of Rs.12.40 lakhs per cottah was fixed before the recession. Mr. Mitra further relied on documents annexed to the affidavit-in-opposition by the
respondents, which showed that in the 48th Board Meeting held on November 11, 2009, the matter relating to allotment of plot to the petitioner at the rate of Rs.9 lakh was discussed and the Managing Director was authorized to do all acts in
respect thereof as he deemed fit and proper in the given situation. It was resolved in the said Board meeting, that the rate would be finalized by the Managing Director in consultation with the chairman.
6. Mr. Mitra submitted, that the documents disclosed by HIDCO indicated that even if there were audit queries and observations of CAG, the objections were satisfactorily answered and the matter was closed. Subsequent action of the
respondent HIDCO, in executing the deed of sale in favour of the petitioner after such queries and reply by the Managing Director of HIDCO would prove the same. The deed of sale was executed and registered on December 8, 2010 and
the audit queries were raised between 2008-2010. Thereafter, the land was transferred in favour of the petitioner. According to Mr. Mitra, the petitioner could not be equated with big industrial houses and five star hotels who were allotted
lands at the rate of Rs.12.40 lakhs per cottah. Mr. Mitra submitted, that it could be safely concluded from the subsequent actions of HIDCO, that its Board in its wisdom had re-considered the matter and had left the matter to the wisdom of
the Managing Director of HIDCO. The execution of the deed had taken place on the terms and conditions finalized by the Managing Director as per the resolution of the Board. Once, the title had passed and the possession was handed over,
the law did not permit the seller to make any further demand. According to Mr. Mitra, paragraph VIII of the deed of sale did not allow the respondent to make a further claim on the sale price, three and half years after the conclusion of the
sale. The said paragraph related to imposition of tax and other duties, levies and charges running with the land payable to other competent authorities and the enhancement of price of land which could have been charged under the said
paragraph was in respect of any enhancement in the price of land between the date of allotment and the date of execution of the sale deed. Once the sale deed was executed in terms of the decision of the respondent, at a price of Rs.9 lakh
per cottah, no other claim or demand could be made by the seller. There was complete finality to the contract. It was further stated by Mr. Mitra, that the decisions of the Hon’ble Supreme Court which have been quoted in the last letter of
demand, do not have any application in view of the fact that HIDCO was a government company, incorporated under the Companies Act, 1956 and was in the business of selling plots of land in favour of the prospective buyers. This, according
to Mr. Mitra, did not have any semblance to the kind of allotment or grants made in cases of coal block allotment by the government or the 2G spectra allocation.
7. Mr. Jishnu Choudhury, the learned Advocate appearing on behalf of the respondent submitted that HIDCO being a government company could not be equated with any other public or private limited company and they always had the right to
claim the differential amount of Rs.2,05,70,000/- on the basis of the audit report of the Internal Audit Officer of the Finance (Internal Audit) Department, Government of West Bengal pursuant to the special audit conducted. Mr. Choudhury
further submitted, that HIDCO had a duty to protect public interest as the custodian of the lands, which were held in public interest for betterment of the public and paragraph VIII of the deed of sale permitted HIDCO to make such a claim.
8. Heard the parties. The challenge of the petitioner to the demand notices were on the ground that after the execution of the sale deed, HIDCO had no power to demand payment of the additional amount. HIDCO on the other hand took up
the plea that mere execution of the deed of sale did not absolve the petitioner from complying with the provisions of paragraph VIII thereof. In this case, allotment was made in favour of the petitioner, followed by an agreement for sale and the
transaction was completed by execution and registration of the deed of sale. All rights, title and interest were conveyed absolutely to the petitioner, free from all encumbrances. When the contract was concluded by execution and registration of
the sale deed between the vendor and the vendee in respect of an immovable property, the demand by HIDCO, in effect, amounted to nullifying the title transferred to the vendee by the vendor. The petitioner applied for allotment of a plot.
The respondents made their offer. The petitioner accepted the offer and an allotment was made. The offer and acceptance found expression in the allotment letter. This ultimately resulted in the conclusion of the contract by way of execution
and registration of the sale deed. Once the contract was concluded, any further demand on the ground of inadequacy of the consideration money cannot be enforced having regard to the provisions of the Transfer of Property Act, 1882. The
Indian Contract Act, 1872, the Registration Act, 1908 and the Specific Relief Act, 1963. These laws govern transfer of immovable property from one person to another. The allotment letter and the sale agreement, do not survive once the
contract is concluded on execution of the registered sale deed resulting in alienation of the plot and transfer of title. Upon such transfer, NKDA had sanctioned the building plan submitted by the petitioner and construction had commenced.
Thus, the respondents did not have any right to claim the additional amount. Paragraph VIII of the said deed of sale cannot be invoked as this was not a case of subsequent enhancement in the value of the land proposed to be sold to the
petitioner. On the other hand, records reveal that prior to the registration of the deed of sale, the controversy over the rate at which the petitioner would be allotted the land had been put to rest at the Board meeting.
9. After series of meetings, audit queries, and replies, the Board had decided that the price should be fixed and finalized by the Managing Director. The relevant portion of the resolution dated November 11, 2009 is quoted below:-
“13. Allotment of 1 Acre land to Kolkata Fish Suppliers’Welfare Association for construction of a Building Compled for accommodation of Retail Sale of fish, egg, meat, vegetable, grocery, durable goods etc.
Managing Director informed that a proposal was received from General Secretary, Kolkata Fish Suppliers’ Welfare Association requesting for allotment of a plot in New Town for construction of a Building Complex for retail and
wholesale trade of fish, meat, chicken etc. He also added that activities like Cold Storage Export Promotion Zone and Wholesale â€" Retail and for the purpose the Association shall divide their activities into two parts- (a) business/retail and
(b) wholesale activities. Building will be constructed for business-retail for fish, meat, chicken and other perishable and non-peri8shable goods including groceries etc. and that a portion of the built- up space within the complex would be utilized
for various business use and ancillary supporting facilities with modern technology and sophisticated gadgets will be utilized and for the purpose a Concept Plan was also submitted meant for Retail activities and business activities.
After a brief discussion the following Resolution was passed: - “Resolved that, approval be and is hereby accorded to allo0tment of 1 Acre land in New Town favouring Kolkata Fish Suppliers’ Welfare Association for construction of a
Building Complex accommodating Retail and Wholesale trade of fish, meat, chicken etc. and that activities are divided in two parts â€" (1) business/retail and
(2) wholesale activities as detailed in the Board Note and that the Association will be using modern technology and sophisticated gadget including handling of waste. The land be allotted on freehold basis to the allottee at a price as may be
negotiated and finalized by Managing Director in consultation with Chairman.
It was also Resolved that, Managing Director be and is hereby authorized to do all such other acts and things as he may deem fit and proper in the given situation.â€
10. In the said Board meeting, the Managing Director, had placed a note with regard to the allotment of the plot to the petitioner at the decided price, along with the observation of the financial advisor. The contents of the said note is quoted
below:-
Board Note No.134
Sub:- Allotment of a plot measuring about 1.00 Acre in New Town, Rajarhat to “ Kolkata Fish Suppliers Welfare Association†for building a Complex which would include retail sale of Fish, Meat, Egg, Vegetable, Groceries, Durabloe
goods and Business activities
A proposal was received from General Secretary, Kolkata Fish Suppliers Welfare Association (KFSWA) requesting for allotment of a plot in New Town, Rajarhat to build a Complex for Retail and Wholesale Trade of Fish, Meat and Chicken.
As advised, a meeting was taken by principal Consultant with the representatives of KFSWA for ascertaining their activities in the field of Retail and Wholesale trade of Fish, Meat & Chicken, and also to find out the requirement of land for
such trade.
After detailed discussion, it was pointed out that activities like cold storage, export promotion zone and wholesale- retail fall within industrial zone as per the norms of HIDDCO and land was not immediately available for establishing such
activities within New Town. The Association agreed in principal to divide their activities into two parts â€" (i) Business/Retail and (ii) Wholesale activities. At the 1st phase they agreed to construct a Complex for Business/Retail for Fish,
Meat, Chicken and other perishable and non -perishable goods including Groceries, Vegetables etc. They also expressed that business uses and ancillary supporting facilities. They confirmed that modern technology and sophisticated gadgets
would be utilized by them for handling of the perishable goods including wastes. They were requested to submit a Concept Plan for the same.
Thereafter they have submitted a Concept Plan for the Marker Complex which included only retail activities in Fish, Meat, Chicken etc and business activities like Association Offices, Banks, Budget Hotel, Dormitories etc. In consideration of
their proposal a plot of land measuring 1 acre within Sub-CBD of AA- I was proposed for allotment to the KFSWA. Copy of the plot plan is placed in the file. In consideration of a strategic location FA has recommended a price tag of
Rs.12.40 lakhs per cottah for the said land.
The proposal is placed before the Board for consideration of approval.
Managing Director
11. The financial advisor’s recommendation of Rs.12.04 lakh per cottah for the said land, was before the Board. Despite the said note, the Board had left the entire matter to the Managing Director. The Board meeting took place on
November 11, 2009. The note of the Comptroller and Auditor General’s audit report has been annexed by the respondents to the affidavit-in-opposition which is quoted below:-
“7. Fixation of low price for a developed plot resulting loss of Rs.2.06 crore
Reference is invited to Para no.1 of part-II of the Inspection Report for the year 2008-10 wherein it was stated that in January,2009. WBHIDCO received a proposal from Kolkata Fish Suppliers Welfare Association (KFSWA) for allotment
of a plot in Rajarhat New Town to construct a Shopping Complex for retail and wholesale trade of Fish, Meat and Chicken. In August 2009 a meeting was held with KFSWA where they expressed their intention to establish the complex for
wholesale and retail marketing of fish, meat and chicken which would include activities like retail selling wholesale trading and cold storage, ice plant and export promotion zone within New Town area. They also expressed that market would
include ancillary supporting facilities like banks, dormitories offices of Association etc. As per the norms of HIDCO the activities like cold storage export promotion zone and wholesale retail fall within industrial zone which not readily available
within the New Town KFSWA agreed to divide their activities into two parts-(i) Business/Retail and (ii) Wholesale activities and requested to HIDCO for providing suitable land Board of Directors (BOD) approved the proposal in November
2009. In January 2010, a plot of land measuring 1 (one) acre in Sub-CBD of Action Area A/A1 was offered for a price of Rs. 5,44,50,000 @ Rs.9 lakh/cottah.
A test check of records revealed that the land which was allotted to KFSWA is a very prestigious plot in A/A1 and is developed fully, well connected and considered as excellent initial location vis-Ã -vis Salt Lake/Kolkata. The principal use of
the plot is for commercial purpose.
Audit observed that in its 45th BOD meetings (December 2008) HIDCO decided to adopt a fixed rate of Rs. 12.40 lakh per cottah for allotment of plots for commercial use (like banking, hote/hospitality, corporate office use etc.) of different
allottes. All these plots were allotted in A/A1 and on free hold basis. The rate was recommended based on similar rate charged to Bharati Airtel. But, while the plot of land allotted to KFSWA in such a prime area of New Town, WBHIDCO
had fixed the selling price only Rs.9 lakh/cottah by ignoring the earlier decision and previous preceding which led to a loss of income of Rs. 2.06 crore 160.50 cottah Rs.3.40 lakh (i.e Rs. 12.40 lakh- Rs.9 lakh) to the Company.â€
12. It appears from the said note, that the CAG had raised a query on the basis of the audit report to the effect that although, in the 45th meeting of the Board of Directors it was decided that a fixed rate of Rs. 12.40 lakhs per cottah would be
charged for allotments of plot for commercial use like banking, hotel, hospital, corporate offices etc., the rate recommended for allotment of land to the petitioner was Rs.9 lakhs per cottah, which resulted in a loss of Rs. 2.06 crores. The
Managing Director replied to the query of HIDCO, which had also been annexed by HIDCO in their affidavit, the contents of which are quoted below:-
“7. Fixation of low price for a developed resulting loss for Rs.2.06 crore It has been specified by the Audit that commercial use will include banking hotel/hospital, corporate office.
Retail business in Fish & Chicken etc. should not be treated at par with large scale investment as has been observed by the audit. There are several provisions in Government policy to provide facilities to the cooperative societies as part of the
encouragement of cooperative movement. Moreover, they (the allottee) are supposed to export fish which is directly linked with development of the economy of the state.â€
13. Thus, the competent authority of HIDCO answered to the audit query, by stating that the commercial rate of Rs.12.40 lakhs per cottah was fixed for commercial houses including banks, hotels, hospitals, corporate offices etc. but, the
petitioner being engaged in retail business of fish and chicken was a co-operative society, and with a view to encourage the co-operative movement in India, it had been decided that the petitioner would be allotted the plot of land at a lower
price.
14. Thereafter, the Managing Director fixed the price at Rs.9 lakhs per cottah and the deed was executed and registered. The undisputed fact is that the deed of sale did not contain any stipulation that even after the registration of the deed of
sale, the buyer would be required to pay any enhanced amount which HIDCO might demand by re-opening the issue in future, that is, even after the registration of the sale deed. Moreover, the equally relevant factor here is that, when the
company being a government company made a demand based on certain grounds, its validity must be judged on the reasons so mentioned in the letters and cannot be supplemented by fresh reasons by way of affidavits and arguments before
the Court. Reference is made to the decision of G.V. Commissioner of Police, Bombay vs. G.V. reported in AIR 1952 SC 16. The reasons in this case put forward by HIDCO was that the petitioner was given land at a lower price than
similarly situated buyers in the same locality and once the audit had raised a query and the special audit had directed that action should be taken, HIDCO was within its right to make the demand. A note has been annexed to the affidavit-in-
opposition showing that the Internal Audit Officer, Finance Department, Audit Branch, Government of West Bengal, had revived the objection raised by the CAG way back in 2008-2010 and had directed that action should be taken. Such
objection had been considered by the Board and thereafter the deed of sale was registered. In the said note, the expression ‘action should be taken’ is also inconclusive and vague, inasmuch as, there is no indication whether actions
should be taken by raising a demand on the petitioner or whether action should be taken by calling upon the officers of HIDCO to answer as to how the transaction was completed at a price which was objected to initially by the CAG and the
CAG by a letter dated August 18, 2010 had intimated HIDCO that its explanation was not acceptable. Moreover, records reveal that after the query of the CAG and reply given by the Managing Director justifying the price fixed in respect of
the petitioner, the matter was placed before the Board and the Board had left the matter to the Minister-in-charge and the Managing Director of HIDCO to conclude the transaction. The registration took place after the audit queries were
answered and inspite of the letter of the CGA not accepting the explanation, the matter was placed before the Board. This implies that the audit queries were closed. It is also pertinent to mention here that the petitioners were not at all aware
of all these controversies with regard to the fixation of price. Under such circumstances, I find that the petitioners are not bound to pay the demand raised by the authorities. Reference is made to the decision of Andhra Pradesh Industrial
Infrastructure Corporation Limited and Others vs. S.N.Raj Kumar and another reported in it AIR 2018 SCC 1981.
15. The petitioner is right in contending that after the sale of the property by HIDCO, the petitioner had acquired absolute marketable title to the property and the respondent had no right to insist on the money mentioned in the demand letter.
16. Section 5 of the Transfer and Property Act, 1882 (hereinafter referred to as the Act) defines “transfer†as conveyance of property from one living person to one or more living persons. Sections 8, 10 and 11 thereof attach sanctity and
solemnity to a transfer of immovable property. These provisions read as under:
“8. Operation of transfer.â€"Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the
legal incidents thereof.
Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the
movable parts thereof; and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith; and,
where the property is a debt or other actionable claim, the securities therefore (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer; and, where the
property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.
10. Condition restraining alienation.â€"Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the
condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him:
Provided that property may be transferred to or for the benefit of a women (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same for her beneficial interest therein.
11. Restriction repugnant to interest created.â€"Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a
particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.
Where any such direction has been made in respect of one piece of immovable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which
the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.â€
17. Section 55 of the Act, deals with rights and liabilities of buyer and seller. As per this provision, when the buyer discharges obligations and seller passes/conveys the ownership of the property, the contract is concluded. Thereafter, the
liabilities, obligations and rights, if any, between the buyer and seller would be governed by other provisions of the Contract Act and the Specific Relief Act, on the execution of the sale deed. The seller cannot unilaterally cancel the
conveyance or sale.
18. In this case, once HIDCO executed the deed of sale and registered the same it amounted to final conclusion of the contract and any query by CAG had been closed. That is why, after the said query was raised and answered, the Board
left the entire matter to the discretion of the Managing Director and the deed of sale was executed at the price originally fixed by HIDCO. Now, HIDCO is estopped from raising any further claim towards price of the land sold.
19. In the decision of the Tata Iron & Steel Co. Ltd vs. Union of India and Others reported in (2001) 2 SCC 4,1 the Hon’ble Apex Court enunciated the principle of estoppel by conduct. The relevant portion of the decision is quoted
below:-
“20. Estoppel by conduct in modern times stands elucidated with the decisions of the English Courts in Pickard v. Sears [(1837) 6 Ad & El 469] and its gradual elaboration until placement of its true principles by the Privy Council in the case
of Sarat Chunder Dey v. Gopal Chunder Laha [(1891-92) 19 IA 203 : ILR 20 Cal 296] whereas earlier Lord Esher in the case of Seton. Laing Co. v. Lafone [(1887) 19 QBD 68 : 56 LJQB 415 : 57 LT 547 (CA)] evolved three basic elements
of the doctrine of estoppel to wit:
“Firstly, where a man makes a fraudulent misrepresentation and another man acts upon it to its true detriment: Secondly, another may be where a man makes a false statement negligently though without fraud and another person acts upon
it: And thirdly, there may be circumstances under which, where a misrepresentation is made without fraud and without negligence, there may be an estoppel.â€
Lord Shand, however, was pleased to add one further element to the effect that there may be statements made, which have induced other party to do that from which otherwise he would have abstained and which cannot properly be
characterised as misrepresentation. In this context, reference may be made to the decisions of the High Court of Australia in the case of Craine v. Colonial Mutual Fire Insurance Co. Ltd. [(1920) 28 CLR 305] Dixon, J. in his judgment in
Grundt v. Great Boulder Gold Mines Pty. Ltd. [(1939) 59 CLR 641] stated that:
“In measuring the detriment, or demonstrating its existence, one does not compare the position of the representee, before and after acting upon the representation, upon the assumption that the representation is to be regarded as true, the
question of estoppel does not arise. It is only when the representor wished to disavow the assumption contained in his representation that an estoppel arises, and the question of detriment is considered, accordingly, in the light of the position
which the representee would be in if the representor were allowed to disavow the truth of the representation.â€
(In this context see Spencer Bower and Turner: Estoppel by Representation, 3rd Edn.) Lord Denning also in the case of Central Newbury Car Auctions Ltd. v. Unity Finance Ltd.[(1956) 3 All ER 905] appears to have subscribed to the view
of Lord Dixon, J. pertaining to the test of “detriment†to the effect as to whether it appears unjust or unequitable that the representator should now be allowed to resile from his representation, having regard to what the representee has
done or refrained from doing in reliance on the representation, in short, the party asserting the estoppel must have been induced to act to his detriment. So long as the assumption is adhered to, the party who altered the situation upon the faith of
it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs, the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment (vide
Grundts: High Court of Australia[(1939) 59 CLR 641] ).
21. Phipson on Evidence (14th Edn.) has the following to state as regards estoppels by conduct.
“Estoppels by conduct, or, as they are still sometimes called, estoppels by matter in pais, were anciently acts of notoriety not less solemn and formal than the execution of a deed, such as livery of seisin, entry, acceptance of an estate and
the like, and whether a party had or had not concurred in an act of this sort was deemed a matter which there could be no difficulty in ascertaining, and then the legal consequences followed. (Lyonv. Reed [(1844) 13 M&W 285] M&W at p.
309). The doctrine has, however, in modern times, been extended so as to embrace practically any act or statement by a party which it would be unconscionable to permit him to deny. The rule has been authoritatively stated as follows:
‘Where one by his words or conduct wilfully causes another to believe the existence of a certain state of things and induces him to act on that belief so as to alter his own previous position, the former is concluded from averring against the
latter a different state of things as existing at the same time.’ (Pickard v. Sears [(1837) 6 Ad & El 469] A&E at p. 474). And whatever a man's real intention may be, he is deemed to act wilfully ‘if he so conducts himself that a
reasonable man would take the representation to be true and believe that it was meant that he should act upon it’. (Freeman v. Cooke [(1848) 2 Exch 654 : 18 LJEx 114] : Exch at p. 663)
Where the conduct is negligent or consists wholly of omission, there must be a duty to the person misled (Mercantile Bank v. Central Bank [1938 AC 287 : (1938) 1 All ER 52 : 107 LJPC 25 : 158 LT 269 (PC)] AC at p. 304 and National
Westminster Bank v. Barclays Bank International [1975 QB 654 : (1974) 3 All ER 834 : (1975) 2 WLR 12] ). This principles sits oddly with the rest of the law of estoppel, but it appears to have been reaffirmed, at least by implication, by the
House of Lords comparatively recently (Moorgate Mercantile Co. Ltd. v. Twitchings [1977 AC 890 : (1976) 2 All ER 641 : (1976) 3 WLR 66 (HL)] ). The explanation is no doubt that this aspect of estoppel is properly to be considered a part
of the law relating to negligent representations, rather than estoppel properly so-called. If two people with the same source of information assert the same truth or agree to assert the same falsehood at the same time, neither can be estopped as
against the other from asserting differently at another time (Square v. Square [1935 P 120 : 104 LJP 46 : 153 LT 79] ).â€
20. The same principle was reiterated in the decision of Chandra Prakash Tiwari and Ors. vs. Shakuntala Shukla and Ors. reported in (2002) 6 SCC 127.
21. In the decision of B.L. Sreedhar and Others vs. K.M. Munireddy (dead) and Ors., reported in (2003) 2 SCC 35, 5the Hon’ble Apex Court held that estoppel was a rule of evidence and the general rule was enacted in Section 115 of
the Indian Evidence Act, 1872, which laid down that, when one person had by his declaration, act or omission caused or permitted another person to believe a thing to be true and to act upon that belief, neither he nor his representative shall be
allowed in any suit or proceeding between himself and such person or his representative to deny the truth of that thing. The relevant portion of the said decision is quoted below:-
“15. On the whole, an estoppel seems to be when, in consequences of some previous act or statement to which he is either party or privy, a person is precluded from showing the existence of a particular state of facts. Estoppel is based on
the maxim allegans contraria non est audiendus (a party is not to be heard to allege the contrary) and is that species of presumption juries et de jure (absolute or conclusive or irrebuttable presumption), where the fact presumed is taken to be
true, not as against all the world, but against a particular party, and that only by reason of some act done, it is in truth a kind of argumentum ad hominem.
16. “In our old law books,†said Mr Smith in his notes to Duchess of Kingston case[(1776) 1 East PC 468 : 1 Leach 146 : 168 ER 175] ,
“truth appears to have been frequently shut out by the intervention of an estoppel, where reason and good policy required that it should be admitted…. However, it is in no wise unjust or unreasonable, but, on the contrary, in the highest
degree reasonable and just, that some solemn mode of declaration should be provided by law, for the purpose of enabling men to bind themselves to the good faith and truth of representations on which other persons are to act.â€
“An estoppel is not a cause of action â€" it is a rule of evidence which precludes a person from denying the truth of some statement previously made by himself.†Per Lindley, L.J. in Low v. Bouverie [(1891) 3 Ch 82 : (1891-94) All ER
Rep 348 : 65 LT 533 (CA)] , Ch at p. 101. In the same case, Ch at p. 105. Bowen, L.J. added: “Estoppel is only a rule of evidence, you cannot found an action upon estoppel.†(All ER p. 355 D) Estoppel though a branch of the law of
evidence is also capable of being viewed a substantive rule of law insofar as it helps to create or defeat rights, which would not exist or be taken away but for that doctrine.
Estoppel is a complex legal notion, involving a combination of several essential elements â€" statement to be acted upon, action on the faith of it, resulting in detriment to the actor. Estoppel is often described as a rule of evidence, as indeed it
may be so described. But the whole concept is more correctly viewed as a substantive rule of law…. Estoppel is different from contract both in its nature and consequences. But the relationship between the parties must also be such that the
imputed truth of the statement is a necessary step in the constitution of the cause of action. But the whole case of estoppel fails if the statement is not sufficiently clear and unqualified. (Per Lord Wright in Canada & Dominion Sugar Co. Ltd.
v. Canadian National (West Indies) Steamships Ltd. [(1946) 3 WWR 759 : 1947 AC 46] WWR at p. 764.)
“The essential factors giving rise to an estoppel are, I think â€
(a) A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation was made.
(b) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation was made.
(c) Detriment to such person as a consequence of the act or omission where silence cannot amount to a representation, but, where there is a duty to disclose, deliberate silence may become significant and amount to a representation. The
existence of a duty on the part of a customer of a bank to disclose to the bank his knowledge of such a forgery as the one in question was rightly admitted.†(Per Lord Tomlin, Greenwood v. Martins Bank [1933 AC 51 : 1932 All ER Rep 318
: 101 LJKB 623 : 147 LT 441 (HL)] , All ER p. 321 C-E.) See also Thompson v. Palmer [(1933) 49 CLR 547] , Grundt v. Great Boulder [(1937) 59 CLR 675] and Central Newbury Car Auctions v. Unity Finance [(1957) 1 QB 371 : (1956) 3
All ER 905 : (1956) 3 WLR 1068 (CA)] .\
“ ‘Estoppe’, commeth of a French word ‘estoupe’, from whence the English word stopped, and it is called an estoppel, or conclusion, because a man's owne act or acceptance stoppeth or closeth up his mouth to allege or plead
the truth; and Littleton's case proveth this description†[Co Litt 352a, where it is said estoppel is of three kinds i.e. matter (1) of record, (2) in writing i.e. semble, by deed, (3) in Paiis]. To the same effect is the definition in Termes de la Ley.
(See Stroud's Judicial Dictionary, 4th Edn., p. 943.)â€
22. Reverting to the facts of this case, I am of the view that although there may have been some truth or relevance in the audit query, but by applying the principle of estoppel by conduct as enunciated by judicial pronouncements, I hold that
HIDCO is estopped from raising the demand after having concluded the contract and transferred its right title and interest in the property in favour of the petitioner free from all encumbrances. The vendor does not have any further right over
the property which was sold to the buyer at the market value fixed by the vendor itself. Moreover, there is no allegation that there has been any fraud, omission or deception in the entire transaction.
23. In the decision of State of Tamil Nadu and Others vs. K. Shyam Sunder and Ors., reported in (2011) 8 SCC 737, it has been held that unless it was found that an act done by any authority earlier in existence was either contrary to statutory
provisions or unreasonable, the State should not change its stand merely because another political party had come into power. It has been emphasized that political agenda of an individual or a political party should not be subversive to the rule
of law.
The facts of this case reveal that three and half years after the land was transferred to the petitioner, on the basis of an audit note based on a special audit conducted subsequently, the demand was raised. The note however, did not suggest
such recovery from the buyer. The respondents have failed to produce any records to show the circumstances which led to the special audit with regard to the transfer of the land by way of sale to the petitioner. The subsequent conduct of the
then Managing Director and his sub-ordinates clearly show that the audit query was a closed chapter. The Court enquired from Mr. Chowdhury, as to whether any explanation was called from the officials of HIDCO. No answer was
forthcoming. There is also no allegation of fraud, irregularity or illegality against the petitioner or the officers of HIDCO who were involved with the said transaction.
24. In this case, the decision to raise the demand for money was taken after more than three years from the date of sale. The seller did not have any further interest in the matter. There was no such condition super added in the deed as there
was no provision for claiming the enhanced amount even after completion of the sale.
25. In the decision of Andhra Pradesh Infrastructure Corporation and Anr. vs. S.N. Raj Kumar and Ors., reported in (2018) 6 SCC 41, 0it has been categorically held that once the sale deed was registered, the seller had no enforceable right
to demand more money and as such the demand of HIDCO was not backed by any law.
26. The contentions of Mr. Chowdhury cannot be accepted as this was not a government grant. In the decision of Hajee S.V.M.Mohamed Jamaludden Bros. & Co. (supra) the word ‘grant’ has been explained in paragraphs 14 to 16
which are quoted below:-
“14. It is true that the word “grant†is not defined in the Grants Act but it is quite evident that the word has been used in the Act in its etymological sense and, therefore, it should get its widest import. In Black's Law Dictionary, the
word “grant†is shown to have the meanings (i) to bestow; to confer upon someone other than the person or entity which makes the grant; (ii) to give or present as a right or privilege. (5th Edn., p. 629)
15. The definition of licence in Section 52 of the Indian Easements Act denotes that it is the grant of a right made by the grantor. Section 53 and Section 54 of the said Act also refer unequivocally to the grant of licence. Thus without a
“grant†in the general sense no licence can be created.
16. In Mohsin Ali v. State of M.P. [(1975) 2 SCC 122] this Court said that: (SCC p. 126, para 15)
“In the widest sense ‘grant’ may comprehend everything that is granted or passed from one to another by deed. But commonly, the term is applied to rights created or transferred by the Crown, e.g., grants of pensions, patents,
charters, franchise (see Earl Jowitt's Dictionary of English Law).â€
27. It has been held that all provisions, restrictions, conditions and limitations contained in any such grant would be valid and come into effect according to their tenor. The condition of a grant was thus regulated by the instrument creating it,
notwithstanding the provisions of any law or regulation. In this case, it had been a sale of an immovable property at a market price unilaterally fixed by HIDCO and such a transfer was not covered by the definition of a ‘grant’ as
discussed hereinabove. Sale of an immovable property by HIDCO cannot be termed as a government grant and as such HIDCO did not retain the right to impose any further condition on such a sale after three years from the date the title
passed to the buyer.
28. The demand notice was sought to be justified by the respondents on the basis of the decision of the Hon’ble Apex Court in writ petitions (CRL) No.120 of 2012 with Writ Petition (Civil) No.463 of 2012, Writ Petition (Civil) No.515 of
2012, Writ Petition (Civil) No.283 of 2013. The above writ petitions were decided by the Hon’ble Apex Court in the matter ofM anohar Lal Sharma vs. The Principle Secretary & Ors., reported in (2014) 2 SCC 53.2 In the said matter
before the Hon’ble Apex Court, the allocation of coal blocks for the period 1993 to 2010 was the subject matter of a group of writ petitions filed in the nature of public interest litigation, principally by one Manohar Lal Sharma and the other
by the Common Cause. The allocation of coal blocks made during the above period by the Central Government, according to petitioners therein, were illegal and unconstitutional, inter alia, on the following grounds:
(a) Non-compliance of the mandatory legal procedure under the Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘1957 Act’).
(b) Breach of Section 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act, 1973 (for short, ‘CMN Act’).
(c) Violation of the principle of Trusteeship of natural resources by gifting away precious resources as largesse.
(d) Arbitrariness, lack of transparency, lack of objectivity and non-application of mind;
(e) Allotment tainted with mala fides and corruption and made in favour of ineligible companies.
29. Principally, two prayers had been made in these matters, first, for quashing the entire allocation of coal blocks made to private companies by the Central Government between 1993 and 2012 and second, a court monitored investigation by
the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) or by a Special Investigation Team (SIT), into the entire allocation of coal blocks by the Central Government made between the above period covering all aspects.
30. Ultimately, upon an analysis of the law governing the field, the Hon’ble Apex Court held that allocation of Coal Blocks to private companies made by the Central Government during 1993-2010 were liable to be quashed and set aside.
The reasons assigned by the Hon’ble Apex Court is quoted below:-
“154. To sum up, the entire allocation of coal block as per recommendations made by the Screening Committee from 14.07.1993 in 36 meetings and the allocation through the Government dispensation route suffers from the vice of
arbitrariness and legal flaws. The Screening Committee has never been consistent, it has not been transparent, there is no proper application of mind, it has acted on no material in many cases, relevant factors have seldom been its guiding
factors, there was no transparency and guidelines have seldom guided it. On many occasions, guidelines have been honoured more in their breach. There was no objective criteria, nay, no criteria for evaluation of comparative merits. The
approach had been ad-hoc and casual. There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily. Hence, the allocation of coal blocks
based on the recommendations made in all the 36 meetings of the Screening Committee is illegal.
155. The allocation of coal blocks through Government dispensation route, however laudable the object may be, also is illegal since it is impermissible as per the scheme of the CMN Act. No State Government or public sector undertakings of
the State Governments are eligible for mining coal for commercial use. Since allocation of coal is permissible only to those categories under Section 3(3) and (4), the joint venture arrangement with ineligible firms is also impermissible. Equally,
there is also no question of any consortium / leader / association in allocation. Only an undertaking satisfying the eligibility criteria referred to in Section 3(3) of the CMN Act, viz., which has a unit engaged in the production of iron and steel and
generation of power, washing of coal obtained from mine or production of cement, is entitled to the allocation in addition to Central Government, a Central Government company or a Central Government corporation.
 156. In this context, it is worthwhile to note that the 1957 Act has been amended introducing Section 11-A w.e.f. 13.02.2012. As per the said amendment, the grant of reconnaissance permit or prospecting licence or mining lease in respect
of an area containing coal or lignite can be made only through selection through auction by competitive bidding even among the eligible entities under Section 3(3)(a)(iii), referred to above. However, Government companies, Government
corporations or companies or corporations, which have been awarded power projects on the basis of competitive bids for tariff (including Ultra Mega Power Projects) have been exempted of allocation in favour of them is not meant to be
through the competitive bidding process.
157. As we have already found that the allocations made, both under the Screening Committee route and the Government dispensation route, are arbitrary and illegal, what should be the consequences, is the issue which remains to be tackled.
We are of the view that, to this limited extent, the matter requires further hearing.
158. By way of footnote, it may be clarified and we do, that no challenge was laid before us in respect of blocks where competitive bidding was held for the lowest tariff for power for Ultra Mega Power Projects (UMPPs). As a matter of
fact, Mr. Prashant Bhushan, learned counsel for Common Cause submitted that since allocation for UMPPs is in accord with the opinion given in Natural Resources Allocation Reference20 and the benefit of the coal block is passed on to the
public, the said allocations may not be cancelled. However, he submitted that in some cases the Government has allowed diversion of coal from UMPP to other end uses i.e. for commercial exploitation. Having regard to this, it is directed that
the coal blocks allocated for UMPP would only be used for UMPP and no diversion of coal for commercial exploitation would be permitted.â€
31. The judgment referred to deals with arbitrary, mala fide and illegal allocation of coal blocks for mining of coal which was a natural resource, in favour of private companies in violation of relevant procedure of law and the statute. The
natural resources were distributed by the screening committee so as to grant the alottees the right to obtain coal mining lease. The Apex Court held such allocation to be arbitrary, illegal, contrary to the statutes and the procedure prescribed by
law. Thus, the allocations of coal blocks on the facts of the case were set aside. The facts in this case are distinguishable. HIDCO had sold the land to the petitioner at a rate offered by HIDCO itself. The petitioner did not have any role to
play in fixing the price. Moreover, the records do not reveal that there was any allegation of fraud, corruption, arbitrariness or violation of statutory rules, in the instant sale, unlike the case decided by the Hon’ble Apex Court with regard to
coal block allocation. There is no legal flaw in the sale. Thus, the reference to the said writ petitions as one of the justifiable grounds for the demand as reflected in the notice dated November 4, 2015 is mis-conceived.
32. In Goa Foundation vs. Union of India (UOI) and Ors., reported in (2014) 6 SCC 59, 0the Hon’ble Apex Court held that the State Government as a matter of policy could decide the manner in which mineral resources would be
distributed but, such decision had to be taken in accordance with the provisions of law and in consonance with the provisions of the Constitution. Thus, the decision of the State Government of Goa to grant a lease in a particular manner for a
particular period without following the law was examined by way of judicial review. There is no quarrel with the proposition that the manner in which the State Government decided to grant lease or license of natural resources to a party was
always subject to judicial scrutiny. However, in the instant case, when there is nothing on record to show that there was any fraud, illegality, corruption or statutory violation, the above judgment will not help the respondents. Once the title has
passed, inadequacy in the consideration cannot be a ground for reopening the concluded sale. The law provides for a mechanism for cancellation of registered instruments in cases of fraud etc. under the provisions of the Specific Relief Act.
Thus, the demand notices requiring the petitioners to pay an enhanced amount, three and half years after the sale deed had been registered, is not sustainable in law.
33. The decision of Central for Public Interest Litigation and Ors. vs. Union Of India and Ors., reported in (2012) 3 SCC, 1is distinguishable on facts as the public interest litigation arose out of misallocation of licences of radi Spectrum by the
Ministry of Communications and Information Technology, in January 2008 to provide 2G services. The controversy arose because spectrum was allocated on first-come-first-served basis at the price prevailing in 2001 though, the economic
value of the spectrum in 2007-2008 was enormously more. There were several irregularities in the allocation process. Besides, some of the beneficiaries earned huge profits by getting spectrum at a throw-away price and then selling the same
at a much higher price. The entire process was perceived as a favour shown to some private parties at a cost to the public exchequer. The facts are distinguishable.
34. This court is conscious of the judgment in Govinda Prasad Ladia vs. Wbhidc Limited reported in (2015) 3 cal CLT 142 delivered by another learned Judge of this Court. In the said decision, the threat to cancel allotments as also orders of
cancellation of allotment of plots, made in favour of individuals at New Town Rajarhat, by HIDCO had been upheld on certain grounds. The relevant portions of the decision is quoted below:-
“252. In the light of the factual position that has emerged in course of the present proceedings, none of the allotments made in favour of the petitioners appears to be beyond question or on the basis of any rational exercise of discretion or by
way of any fair procedure. The facts show that the erstwhile chairman of the company vainly perceived that he had unfettered discretion to make allotment of plots to whoever he pleased without assigning any reasons or without reference to
the guidelines. The discretion was exercised in a most capricious, inequitable and feudal manner. There was no basis in the choice of the beneficiaries from among many and the manner of exercise of discretion does not satisfy the tests laid
down by high judicial authorities.
253 ………………..
254. ………………
255. The concluding thought is as to the adverse impact of the lack of probity in public life which leads to a high degree of corruption. Corruption may not necessarily imply the acceptance of illegal gratification: for when there is political
patronage or any form of favouritism or nepotism where the beneficiary of State largesse is chosen not on the character of his application but on other considerations as to his conduct or allegiance, the faith in the system as a whole is shaken
and there is a revulsion to conform to order in society. As much as this decision may be used for political mileage, those in office today must remember that they will be judged on the same basis. As a parting thought, one can do no better than
repeat the words of the Supreme Court in the Jain Hawala case [(1998) 1 SCC 226 (Vineet Narain v. Union of India)] after quoting from Lord Nolan's Report of 1995 on ""Standards in Public Life"":
55. These principles of public life are of general application in every democracy and one is expected to bear them in mind while scrutinising the conduct of every holder of a public office. It is trite that the holders of public offices are entrusted
with certain powers to be exercised in public interest alone and, therefore, the office is held by them in trust for the people. Any deviation from the path of rectitude by any of them amounts to a breach of trust and must be severely dealt with
instead of being pushed under the carpet. If the conduct amounts to an offence, it must be promptly investigated and the offender against whom a prima facie case is made out should be prosecuted expeditiously so that the majesty of law is
upheld and the rule of law vindicated. It is the duty of the judiciary to enforce the rule of law and, therefore, to guard against erosion of the rule of law.
In the said judgment, His Lordship observed as follows:-
“229. The last date for receiving applications for the allotment of residential plots in New Town was September 27, 2006. Again, it would have been expected that the allotments from the chairman's discretionary quota under such head
would be made within reasonable time of the last date for the receipt of applicants. Several of the petitioners pertaining to the residential allotments have referred to a committee that was set up to scrutinise the applications received for the
allotment of residential plots in New Town. Such committee, according to several of the petitioners and the records available with the company, is said to have met on May 24, 2007 to consider the applications and, without assigning any
reasons, the committee found all 835 applications to be in order and worthy of allotment. When the relevant committee considered the applications for residential plots - whatever may have been the quality of such consideration - and it
submitted a report by way of the minutes of the meeting on or about May 24, 2007, the chairman should have acted thereupon within reasonable time of the receipt thereof. In the four calendar years preceding 2011, a total of 25 residential
allotments were approved by the chairman under his discretionary quota: seven in 2007; six in 2008; two in 2009; and, ten in 2010. In the first two months of 2011 the chairman approved the allotment of 219 residential plots in New Town, 60 of
them on February 28, 2011. In the light of the alarming flurry of activities towards the end of 2010 and the crescendo in the first two months of 2011, the company was justified in revisiting the allotments or, at least, reviewing the
circumstances in which the allotments were made. The figures suggested a story and it was perfectly in order for the company to try to discover it.
230. In most cases where the allotments have been cancelled or threatened to be cancelled, the only reason cited or one of the several reasons given by the new management of the company is that the intimation of the approval of the
allotment was made just prior to the assembly elections in the State being announced. The petitioners have attempted to discredit the reason by referring to several judgments and even the opinion of the Election Commission that a process
which had been started long prior to any election being announced would remain unaffected by the model code of conduct. What the petitioners have attempted to gloss over is the fact that the trend of allotment that started towards the end of
2010 ought to have continued in its upward graph even after February 28, 2011 or tapered off in a reasonable manner without the abruptness with which it seems to have been arrested on February 28, 2011. Notwithstanding what the company
may have said in its letters of cancellation, the issue is not as to whether the allotments made immediately prior to the election dates being announced may be regarded as dubious or contrived to beat the deadline; the more appropriate
assessment would be whether the company at the relevant time perceived that no further approval of allotments could be made upon the election dates being declared. It is the inescapable inference that may be drawn from the conduct of the
company in the days leading up to February 28, 2011, that its chairman perceived that further allotment of plots could not be approved or the approval intimated to the allottees after the election dates were declared. There is no dispute that
except for the issuance of a solitary letter of intimation on March 1, 2011, the letters of intimation in all other subject cases, whether under the chairman's discretionary quota or by the board, were issued on or a few days prior to February 28,
2011.
231...........................
232..........................
233..........................
234. The facts as they have unfolded may have justified the cancellation of all or most of the allotments in New Town made under the chairman's discretionary quota, but that may have been too sweeping. In such a scenario an allottee who
had built upon an allotted land would have been treated on the same footing as an allottee who may not have obtained possession of the land or title thereto; and the rationale could have been seriously doubted. Except for a solitary case where
the company has sought to repossess the plot for non-use, the company's decision to cancel the allotments is restricted to such allottees who have neither obtained title nor possession of the plots allotted and, in some cases, who have not even
been made firm offers of allotment by identification of any plot. The facts undeniably demonstrate that the process of allotment of plots in New Town, both by the board and under the chairman's discretionary quota, was unfair, irrational and
otherwise improper. Once such position is established, it cannot be said that merely because the company had informed some of the applicants that their allotments had been approved or even the formal offers of allotment were issued, the
process could not be revisited or reviewed. The company had due authority to cancel any allotment if it reasonably perceived the process to have been improper. Merely because the company has chosen a cut-off date which allows some of
the other unworthy allottees to retain their allotments, it cannot be said that no action could have been taken by the company despite discovering the colossal irregularity in the process. Article 14 of the Constitution does not operate in a
negative sense. Just because another citizen has got away with a wrong does not imply that the next wrong-doer has also to be let off.â€
35. The said judgment does not come to the aid of the respondents in view of the fact that the facts are distinguishable, inasmuch as, in those writ petitions before the His Lordship, either the allotment was cancelled or threatened to be
cancelled whereas, in the instant case, title had already passed three and half years prior to the demand raised by HIDCO. Moreover, those allotments were found to be vitiated by arbitrariness, illegality, corruption and fraud. In this case, such
allegations have not been made by the respondents. HIDCO after discussion and deliberation over the price concluded the contract with the petitioner. The buyer after he had acquired the title free from all encumbrances cannot be asked to
make good the alleged loss caused to the company.
36. In view of the discussions made hereinabove, the demand notices dated April 16, 2014 and November 4, 2015 are quashed and set aside. The petitioner will not be bound to pay the amount on the basis of those notices. The petitioner will
be at liberty to enjoy the property as owners thereof, free from all encumbrances and deal with the same in whatever manner, permitted by law. Neither HIDCO nor any other authority shall prevent the petitioner from enjoying the said
property on the ground of non-payment of the amount demanded on the basis of the notices. The petitioner will be entitled to grant of all other essential services from other authorities in compliance of necessary formalities.
37. This writ petition is allowed. CAN 1300 of 2019 is also disposed of.
38. There will be, however, no order as to costs.
Urgent photostat Certified Copy of this judgment, if applied for, be given to the parties, on priority basis.
(Shampa Sarkar, J.)
