RITU MAHESHWARI VS M/S. PROMOTIONAL CLUB CASE

RITU MAHESHWARI VS M/S. PROMOTIONAL CLUB CASE


Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


REPORTABLE
 IN THE SUPREME COURT OF INDIA
 CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO(S). 3616 - 3618 OF 2022
RITU MAHESHWARI ...APPELLANT(S)
VERSUS
M/S. PROMOTIONAL CLUB ...RESPONDENT(S)
WITH
 CIVIL APPEAL NO(S). 3619 - 3620 OF 2022
J U D G M E N T
S. RAVINDRA BHAT, J.
1. Special leave granted, in both petitions. With consent of counsel for parties,
the appeals were heard finally. The two appeals arise out of judgments of the
Allahabad High Court. The first is dated 31.07.20191
; the same appeal impugns an
order dismissing the review petition filed against the first impugned judgment,
dated 13.04.2021. The second appeal is directed against three orders (dated
12.02.2020, 24.08.2020 and 28.08.2020) issued in contempt proceedings2
, initiated
by the respondent, against the appellant.
2. The brief facts of the case are that the appellant (hereafter referred to as
“Noida”), published a scheme in 2010 (hereafter “the old scheme”) for allotment
of industrial plots larger than 2000 sq. meters, in Phases II and III of the industrial
area in Noida. The scheme was advertised. Application forms for registration of
1
In Writ-C No.-56046 of 2013
2 Contempt Application (Civil) No. 8214 of 2019
2
the available plots were available with a designated bank upon payment of ₹5,000/.
The indicative price for plots measuring up to 4000sq. mtr. in Phase II was ₹ 5550/-
per sq. mtr. and in Phase III for ₹ 5750/- per sq mtr. Under the terms of the scheme
as spelt out by the brochure, apart from individuals, partnership firms were also
eligible to apply for allotment. The applicants were to submit a processing fee of
₹20,000/- and registration money of ₹ 8 lakhs for Phase II plots and ₹ 10 lakhs for
Phase III plots. Apart from these conditions, applicants had to furnish a project
report, background detail of promoters, audited accounts and balance sheets and
other relevant details. Allotment was to be made (per clause 2 (h) (i)) on the basis
of interviews of registered applicants, by a screening committee, about the details
of the project. The scheme was expressly open ended; therefore, under clause 2(i)
in Appendix 1 to the scheme Noida could close it any time.
3. It is the common case of the parties that the club applied to the Noida
Authority for two plots. Apparently, Noida decided to terminate the scheme, based
upon its assessment of the feasibility of the scheme, in its meeting on 05.07.2012.
This decision was published and made known to all concerned including the club
through the public domain on 12.07.2012. Thereafter, Noida sought to refund the
amount deposited by the club to it.
4. The club was aggrieved and approached the Allahabad High Court by filing
the writ petition
3
contending that according to its information, Noida received 95
applications of which 65 were rejected and 15 allotments were made. The club
urged that it fulfilled all requirements of the scheme and paid processing fee,
registration amount, had lodged documents required to be furnished. Therefore, it
claimed that its application deserved to be considered. It also contended that the
club was an export house and operating from rented premises, sorely in need of a
large facility and was unable to afford commercial rental spaces. It was urged that
the Noida disregarded the terms and conditions of its scheme for allotment in that
the non-consideration in respect of the plots under the scheme so far as the
3 Writ-C No.-56046 of 2013
3
petitioner club was concerned was utterly arbitrary. The club claimed several
directions including direction to cancel allotments already made and a mandatory
direction to consider the petitioner club’s application for allotment.
5. Noida had resisted the petition, arguing that once the scheme was
discontinued, the club had no basis to claim allotment. It was also urged that the
club was aware of the fact that the scheme could be discontinued at any time, a
power which Noida had resorted to, validly. Therefore, it was urged that even if
some plots were available, the writ petitioner could not lay claim for allotment of
any of them.
6. During the pendency of writ petition before the High Court, Noida, launched
another scheme (Scheme Code : NOIDA/IP/2013-14/OES/01 – hereafter called
“the 2013 Scheme”) the club applied under this scheme as well on 9th November,
2013. This matured into an allotment on 17.07.2014- when Noida allotted a plot
of 4000 sq. mtr, (tentatively sized plot) @ Rs. 8060/- per sq. mtr. The total premium
claimed by Noida was ₹ 3,46,58,000/-. The club had, by 01.12.2016 deposited ₹
1,91,83,700/- towards this allotment; it sought by letter dated 04.09.2016 of change
in the allotment to M/s. Maria Exim Pvt. Ltd. This request was followed up with
the affidavit dated 27.12.2016. This subsequent allotment of a plot under the later
scheme was however, not disclosed to the High Court, before which the complaint
of arbitrary non-allotment under the old scheme was pending.
7. The High Court by its first impugned judgment4 was of the opinion that
Noida’s failure to call the club’s representative for interview, was not supported by
any reason and that its candidature was never considered for allotment. In support
of this conclusion the High Court reasoned that candidature or the applications
which were registered and were complete in all manner could not have been
ignored. In view of this reasoning, the Noida was directed to consider the
petitioner’s two applications under the scheme by permitting the club to re-deposit
the registration amount of ₹ 8 lakhs each in respect of its two applications with
4Dated 31.07.2019 in Writ-C No. 56046 of 2013
4
Noida within a period of one month and on deposit of such registration amount, the
two applications (Application Nos. 284 and 285) were to revive. Noida was
directed to consider those applications in accordance with law for the purposes of
allotment of the un-allotted remaining plots in Phase – II and III. The High Court
held in its judgment that Noida did not dispute that some plots remained unallotted
in the scheme. According to the High Court, there were total of 12 such plots.
8. Noida first filed an application for clarification contending that no plots were
available under the old scheme and that 27 plots were available under the old
scheme, under which 15 were initially allotted. Later all plots were allotted by the
end of 2014 under the 2013 scheme. That application (Civil Misc.
Modification/Clarification Application No. 17/ 2020) was dismissed on
01.10.2020. Noida therefore preferred a review proceeding. The High Court by
its second impugned order dated 13.04.2021 rejected the Review Petition. The
original impugned order dated 31.07.2019 and the rejection of the Review Petition
by judgment and order dated 13.04.2021 are the subject matter of a common appeal
arising from one Special Leave Petition.5
9. The club complained of non-compliance with the original judgment and
initiated contempt proceedings. In the contempt proceedings, notice was issued
and on 12.02.2020 the High Court recorded that the club’s application was deemed
eligible and was taken on record. By order dated 12.02.2020 the High Court
clarified that in case the main judgment was not complied in the letter and spirit the
“opposite party” i.e. the Chief Executive Officer of Noida was to be present in
Court. Accordingly, on the next date when the said official was present (i.e. on
24.08.2020) the Court noted that the writ petitioner was supplied a list of plots for
exercising his option regarding two plots pursuant to the two applications filed by
the petitioner and which were covered by the new scheme issued in January, 2020.
Furthermore, the Court recorded that the new plots were allotted only in accordance
with the new scheme and that two other applicants had been allotted those plots.
5 C. A. No. 3619-3620 of 2022
5
The court therefore expressed its dissatisfaction and stated that third party rights
was being sought to be created to complicate the issue to suit Noida’s purposes.
These two orders i.e. 12.02.2020 and 24.08.2020 as well as the subsequent order
dated 28.08.2020 (which had partly corrected the earlier order of 24.08.2020) are
the subject matter of the civil appeal arising out of another common Special Leave
Petition,6 by the Chief Executive Officer of Noida on its behalf.
Contentions of parties
10. It is urged by Mr. K.V. Vishwanathan, learned senior counsel, that the
impugned judgment dated 31.07.2019 was passed on the basis of a wrong factual
statement by one Shri N.K. Singh, an Officer on Special Duty(OSD) of NOIDA in
his affidavit dated 10.03.2019 to the effect that eight plots remained unallotted in
the earlier scheme, which statement has caused grave prejudice to NOIDA. It is
contended that this officer not only made misleading statements on affidavit, but
also facilitated the transfer of the plot, allotted to the club, to another entity.
Learned senior counsel for Noida contended that these acts were unauthorized. It
was urged that Noida, had before the High Court specifically stated that a showcause notice dated 12.06.2020 was issued against the concerned employee i.e. OSD
Shri N.K. Singh for making the incorrect statement in his affidavit & recommended
disciplinary action against the concerned employee to the Government of Uttar
Pradesh. Counsel urged that the High Court erred in observing that it is evident that
the affidavit filed in support of the review application lacked necessary pleadings
in respect of the exercise of due diligence by NOIDA. It was further urged that
Noida had specifically stated that of 15 allotments were made, by the time the
impugned judgment was delivered, there were in fact no plots under the old
scheme. Counsel submitted that whenever a scheme is discontinued, the land
available with Noida is never kept aside but is utilized in other, newer schemes.
Therefore, there were in fact no unallotted plots; they had been utilized in
subsequent schemes. It is submitted that NOIDA keeps on carving new plots and
6SLP (C) No. 12866-68 of 2020
6
subsequently allots them under different schemes. It had furnished the list of new
plots available and not the plots which were available initially and all the 27 plots
were allotted by 2014 in different schemes.
11. It was argued that the club did not challenge the closure of the 2009-2010
scheme. It rather claimed that Noida acted arbitrarily in not calling its
representative for interview, and possible allotment. In fact all registrants were
aware that Noida could, in terms of the said scheme, terminate it and refund the
amounts received, for any reason. That option was in fact exercised. Counsel
highlighted that the scheme was in force barely for two years and very few people
were interviewed and granted plots. Since the writ petitioner could not lay claim
for a plot, but only a right to be considered, in an extant scheme, the first impugned
judgment is erroneous as it proceeds to hold that the club had some right to
allotment of a plot.
12. It was urged that the operative direction of the High Court, was only to
reinstate the club’s applications, and consider them for allotment in accordance
with law. Since the cancellation of the old scheme or its closure was not adversely
commented, the only manner in which the directions could reasonably be complied
with, was to consider the applications under the subsequent- extant scheme. In the
scheme – framed in 2020, no applicant can expect allotment on the basis of
interview. Allotment of plots is based on the result of draw of lots. The club was
considered, but was unsuccessful in the draw of lots. Therefore, the High Court
went wrong in holding that the club was entitled to be considered in accordance
with the old scheme which was not in existence.
13. Learned senior counsel argued that the club was disentitled to discretionary
relief under Article 226 of the Constitution, because it did not disclose the full and
true facts. It was contended that the club was allotted a 4000 square meter plot, in
2014, for which it made part payments as well. However, this fact was suppressed
from the High Court. Counsel contended that Noida, at the time of conducting its
due diligence, recently discovered this fact. Furthermore, it was submitted that this
7
suppression was intentional, and appears to have been facilitated by the said Mr.
N.K. Singh.
14. Mr. Salman Khurshid, learned senior counsel for the club, urged that the
impugned judgment as well as the judgment of the High Court in review should not
be disturbed. It was submitted that NOIDA gave no reason for the closure of the
scheme; its affidavit before the High Court did not provide any reason why the
club’s application was overlooked or why its representative was not called for
interview like in the case of other applicants. This was arbitrary conduct which
called for an adverse order. To this extent, the High Court’s order is
unexceptionable.
15. It was urged on behalf of the club that the charge of the pressing information,
is unwarranted. Learned counsel urged that Noida did not point to any rule or
guideline which required the club to disclose that it had applied under any other
scheme before, it applied and was allotted a plot in the scheme framed in 2013-14.
In the circumstances, the question of denying relief to it under Article 226 did not
arise. It was further argued that the impugned judgment dated 31.07.2019, had to
be and was understood by the High Court in contempt proceedings, to mean that
the club’s application had to be processed in accordance with the scheme as it
existed, in 2009-10 when in fact an application had been made and entertained. In
other words, the club’s application had to be treated and considered in accordance
with the old scheme. This meant naturally that its representative had been called
for interview and the application evaluated accordingly. Instead, the Noida chose
to unilaterally treat the application as one under the extant policy of 2020. In terms
of the latter, allotment is to be made not on the basis of interview but on the basis
of the draw of lots. Mr. Khurshid submitted that this was not the intent or tenor of
the impugned judgment. In the circumstances, the contempt proceedings drawn for
willful non-compliance were maintainable and the directions issued by the High
Court, completely justified.
8
Analysis and Conclusions
16. The terms of the old scheme were noticed in an earlier part of the judgment.
Other terms included stipulated that rates indicated were subject to change by
Noida [clause 2 (d)]; the area of the plot could be varied [clause 2 (e)]. Clause 2 (i)
read as follows:
“This scheme is an open-ended scheme. However, NOIDA reserves the right to
close the scheme at any point of time without any notice and without assigning any
reasons.”
17. The club’s grievance was that its application was not considered – its
representatives were not interviewed. Noida pointed out that it closed or terminated
the scheme. In the writ proceeding, the club did not challenge the closure of the
scheme; rather its case was that Noida’s omission to consider its application for
allotment was arbitrary. Once the club accepted the closure of the scheme and did
not challenge it, there was no question of its agitating any right or grievance
regarding non-consideration of its application. The club does not deny that there
were other registrants, similarly circumstanced, who did not secure any allotment.
They presumably were treated in the same manner as the club was. In the
circumstance, the club could not without establishing any discrimination, merely
on the strength of closure of the scheme, allege arbitrariness. It is well established
that when a policy decision like the closure or termination of a benefit available to
a class of persons, is not challenged, the consequence of such closure (which is the
impact on the pendency of those wishing to be considered) cannot ordinarily be
subject matter of a grievance. What the club had was a right to be considered for
allotment of the plots its applied for, so long as the old scheme subsisted.
18. In the opinion of this court, an applicant or registrant of a scheme has no
right to insist that they should be provided allotment under a scheme. Much
depends on the terms of the scheme. In Delhi Development Authority vs.
9
Pushpendra Kumar Jain7
this court had enunciated the applicable principle as
follows:
"8. Now coming to the other ground, we are unable to find any legal basis for
holding that the respondent obtained a vested right to allotment on the drawl of
lots. Since D.D.A. is a public authority and because the number of applicants are
always more than the number of flats available, the system of drawing of lots is
being resorted to with a view to identify the allottee. It is only a mode, a method, a
process to identify the allottee, i.e., it is a process of selection. It is not allotment by
itself. Mere identification or selection of the allottee does not clothe the person
selected with a legal right to allotment at the price prevailing on the date of drawl
of lots. The scheme evolved by the appellant does not say so either expressly or by
necessary implication. On the contrary, Clause (14) thereof says that "the estimated
prices mentioned in the brochure are illustrative and are subject to
revision/modification depending upon the exigencies of lay out, cost of construction
etc."
In The Bihar State Housing Board & Ors. v Radha Ballabh Health Care and
Research Institute (P) Ltd8
this court again reiterated the same position:
“…the Respondent does not get any right of allotment of a plot merely because it
has applied for allotment earlier. The response to an advertisement does not lead
to any obligation on the Appellant to allot any plot. Admittedly, there was no
allotment in pursuance of the offer submitted by the Respondent. Mere fact that the
Respondent had applied for allotment of a plot does not confer any legal or
equitable right to seek allotment of any plot.”
19. In the absence of any ambiguity- in the law, and the scheme, the writ
petitioner club, in this court’s opinion could not have insisted that after the closure
of the old scheme (which went unchallenged by it), nevertheless, it had a right to
allotment. In holding otherwise, and proceeding to direct Noida to consider the
club’s applications the impugned judgment erred in law.
20. The High Court had directed that the club’s applications should be
considered “in accordance with law”. Noida proceeded to comply with that
direction, and reinstate those applications- and, furthermore, consider them in
accordance with the existing scheme. The High Court, in contempt proceedings,
7
1994 (Supp3) SCR 770
8
2019 (10) SCC483
10
has taken exception to this course of action- in this court’s opinion, in an entirely
unnecessary and unwarranted manner. As held earlier, once the legality of closure
of the old scheme was undisputed, there was no manner of right inhering with the
club, to insist that its claim for any plot had to be considered. If at all, it ought to
have applied under subsequent schemes, and waited like other applicants (of that
scheme), Noida’s interpretation of the High Court’s judgment (to consider) in this
context, was quite correct. Neither did Noida, in its announcement while closing
the old scheme nor in any condition of the 2013 or later scheme, stipulate that old
scheme applicants would be dealt with according to the terms of that (i.e. 2010)
scheme. This meant that Noida had to consider the club’s applications, in
accordance with terms of the prevailing scheme. It did so, and incurred – quite
unjustifiably- the wrath of the High Court in contempt proceedings. There is
authority for the proposition that when regulations or schemes, or policies change,
applicants for their benefits have no inherent right to be considered under the old
policy; rather the consideration has to be under the new regime, unless the latter
contains an express stipulation to the contrary.
21. In Usman Gani Khatri of Bombay v Cantonment Board9
this court affirmed
the decision of the High Court, which held that old rules could not be applied, and
that new rules were applicable, for considering applications for sanction of
buildings. It was held that
"In any case, the High Court is right in taking the view that the building plan can
only be sanctioned according to the building regulations prevailing at the time of
sanctioning of such building plans. At present the statutory bye-laws published on
30.4.1988 are in force and the fresh building plans to be submitted by the
petitioners, if any, shall now be governed by these bye-laws and not by any other
bye-laws or schemes which are no longer in force now.
If we consider a reverse case where building regulations are amended more
favourably to the builders before sanctioning of building plans already submitted,
the builders would certainly claim and get advantage of the regulations amended
to their benefit."
9 1992 (3) SCR 1
11
Likewise, in Howrah Municipal Corpn. & Ors. v Ganges Rope Co. Ltd. & Ors10
. a
similar question arose for consideration. The municipal corporation was required
to decide an application for sanction, in a time bound manner, by the court. The
applicable rules changed. The corporation decided the application in the light of
the amended rules. This court, negativing the applicant’s contention that it had a
right to be considered under the old rules, held as follows:
“20. The provisions of the Act, therefore, contemplate an express sanction to be
granted by the Corporation before any person can be allowed to construct or erect
a building. Thus, in ordinary course, merely by submission of application for
sanction for construction, no vested right is created in favour of any party by
statutory operation of the provisions.
------ ------
In our considered opinion, by the order of the Court dated 23.12.1993
observing that the petitioner is 'not prevented from applying' for further sanction
of additional floors above fourth floor and the 'expectation' expressed in the
subsequent order of the Court dated 24.6.1994, from the Corporation to decide the
pending application for sanction within four weeks, no vested right in favour of the
respondent - company can be said to have been created to obtain sanction on the
unamended rules, as they existed on the date of their second application.”
In the light of the above position in law, it is clear that the club could not have
claimed that its application had to be dealt with in terms of the old scheme, which
had ended in 2012. The direction of the High Court, could only have meant that the
applications had to be revived, and dealt with the scheme prevailing as on the date
of its consideration, i.e. after 31.07.2019. The interpretation placed by the High
Court, that there were existing plots, which could have been dealt with under the
old scheme is entirely misplaced. In such events, given that the legality of closure
of the old scheme attained finality, there was no question of any land or plot being
attached or belonging as it were to an old scheme. If any land or plot, or industrial
unit were in fact “left-over” it was always up to the development authority or
agency (here Noida) to determine how they are to be dealt with. The directions
issued in contempt proceedings, which are subject matter of another appeal, are
accordingly held erroneous.
10[2003] Supp (6) SCR1212
12
22. As noticed earlier, the club was allotted a plot, in 2014; it paid substantial
amounts. The area of that plot is 4000 square metres. Now, while it is true that this
fact could not have been disclosed to the High Court, when filing the writ petition
(in 2013), the club, in this court’s opinion, had an obligation to disclose it, during
the pendency of writ proceedings. This fact was material, given that the jurisdiction
invoked is equitable and discretionary. Furthermore, whether the grievance was
justified and well founded, given that state agencies develop and allot such
industrial units at prices which are reasonable, and that an applicant subsequently
succeeded in securing a plot, are relevant facts, which a court should be appraised
of. The failure by the club, to do so, in this court’s opinion, disentitled it to any
relief.
23. For the foregoing reasons, Noida’s appeals are allowed; the impugned
judgment and orders of the High Court are hereby set aside. There shall be no order
on costs.
….………………………………………….……
 [UDAY UMESH LALIT, J.]
 .………...………………………………………
 [S. RAVINDRA BHAT, J.]
 …….……….……………………………………
 [PAMIDIGHANTAM SRI NARASIMHA, J.]
New Delhi
May 05, 2022. 

Comments

Popular posts from this blog

100 Questions on Indian Constitution for UPSC 2020 Pre Exam

संविधान की प्रमुख विशेषताओं का उल्लेख | Characteristics of the Constitution of India

भारतीय संविधान से संबंधित 100 महत्वपूर्ण प्रश्न उतर