REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.496 OF 2007
JAYKRISHNA INDUSTRIES LTD.
THROUGH DIRECTOR .......APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
WITH
CIVIL APPEAL No. 498 of 2007
POPCORN PROPERTIES PRIVATE LTD.
THROUGH DIRECTOR AND ANOTHER ........APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
CIVIL APPEAL No. 18489 of 2017
(arising out of SLP (C) No.33322 OF 2011)
POPCORN PROPERTIES PRIVATE LTD.
AND ANOTHER ........APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
CIVIL APPEAL No.18492 of 2017
(arising out of SLP (C) No.30293 OF 2017)
JAYKRISHNA INDUSTRIES LTD. ........APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
1
JUDGMENT
NAVIN SINHA, J.
Leave granted in both Special Leave Petitions.
2. The present batch of appeals, between the same parties,
arise from a controversy relating to auction settlement by the
Mumbai Housing and Area Development Board (hereinafter
referred to as “the MHADA”), of a plot of land measuring
10,000 sq. mtrs, located at Powai, in the town of Mumbai.
The auction notice published on 17.11.2004, remains
inconclusive, mired in litigation. The subsequent
developments being relevant are also required to be noticed.
The contesting parties, M/s.Popcorn Properties Private Limited
and M/s. Jaykrishna Industries Ltd., shall hereinafter be
referred to as the Appellant and Respondent for convenience.
3. Sri Shekhar Naphade, learned Senior Counsel for the
Appellant submitted that it being the highest bidder at
Rs.22,22,22,300/-, provisional acceptance of the bid was
communicated to it on 17.12.2004. As required, 25% of the
tender amount was deposited on 03.01.2005, awaiting
2
communication for deposit of the balance 75% amount. On
03.05.2005, the Appellant objected to MHADA illegally
negotiating settlement of the subject lands with the
Respondent. Writ Petition No. 2112 of 2005 was instituted
assailing the action of the official Respondents in provisionally
accepting the bid of the Respondent for Rs.22,23,22,300/-.
The order dated 17.12.2004 was subsequently wrongly
cancelled on 07.05.2005, and which was also assailed by the
Appellant in Writ Petition No. 867 of 2010.
4. The Respondent had earlier preferred Writ Petition No.
3466 of 2004 and obtained an order on 23.12.2004 for
submission of a higher bid. The Appellant was not a party to
the same. The High Court was not apprised that the
Appellant’s bid already stood provisionally accepted. Upon
being apprised of the correct facts, the order dated 23.12.2004
was recalled which automatically results in revival of the order
of acceptance of the appellant’s provisional bid. The High
Court wrongly declined to interfere with the order dated
07.05.2005 ordering a fresh tender process for settlement.
3
5. Shri Naphade, in the aforesaid facts further submitted
that the Appellant also had a right in equity for settlement in
its favour, especially in view of the interim order of this Court
dated 04.09.2014 permitting it to make a fresh proposal to the
MHADA, and which has been found acceptable by it. MHADA
had acted inequitably, on political influences, to cancel its bid
at the behest of the Respondent, who was not even a bidder in
response to the tender notice. The Appellant has had to suffer
for no fault of it, despite being the highest bidder. An
alternative submission was made that if fresh tenders were to
be invited, the right of the first refusal must be given to it for
matching the highest offer that may be made. The second
alternative submission was that 25 percent of the plot be
settled with it. The present case, on its peculiar facts, was a
fit case where the normal rule of settlement by tender could be
deviated from and settlement could be made by private
negotiation.
6. Mr. Sanjay Hegde, learned Senior Counsel for the
Respondent submitted that even prior to the advertisement
dated 17.11.2004, the Respondent had a pre-existing right to
4
settlement as it was already in negotiation with MHADA,
culminating in orders dated 05.07.1999 and 05.10.1999 in its
favour. This was recognised in Writ Petition No. 3466 of 2004
permitting it to offer a higher bid. On 15.02.2005, the
Respondent offered to increase its bid by Rs.10,00,000/-
above that of the Appellant and payment was made on
02.05.2005. The challenge by the Appellant to the
cancellation dated 07.05.2005 was highly belated. The
Appellant had no locus in the matter after the cancellation
order. The cancellation order having been declined
interference, the question of any private negotiation does not
arise. A like claim in equity was also raised for an opportunity
to pay the market price and match the price that may be
offered by the Appellant.
7. Learned Counsel for the State of Maharashtra submitted
that the order dated 05.07.1999 on which the Respondent’s
claim is founded has itself been annulled on 22.02.2000, and
which has not been assailed. Sri M.L. Verma, learned Senior
Counsel appearing on behalf of MHADA, submitted that the
advertisement dated 17.11.2004 was for construction of a
5
hotel according to the then permissible commercial usage of
the plot. The subsequent change in permissible usage to
residential purpose for construction of a housing complex
renders the entire controversy infructuous. A new
advertisement for auction at the best price available will have
to be made. Considerable time has also passed since the
advertisement. The DCR Regulation 33(5) under the
Development Control Regulations for Greater Bombay, 1991
(hereinafter referred to as “the Regulations”) with regard to
increase in FSI has not yet been finalized and published. It
was specifically denied that any decision had been taken to
make settlement in favour of the Appellant.
8. We have considered the submissions on behalf of the
parties, perused the records, including the impugned orders
and the communications exchanged between the parties.
9. The claim of the Respondent for settlement of a
government property by way of a private largesse, without
open advertisement, is completely unfounded in the law. Its
letter dated 30.06.1999 requesting for a sympathetic
consideration for settlement with it, as otherwise the property
6
was likely to be occupied by encroachers, is but a travesty of
the law. Apparently, the negotiations were done by MHADA
under political influence as evident from the letter of the
Respondent dated 29.11.2004 read with the letter dated
30.04.2005 of one Mr. Mohan Rawle, Member of Parliament.
The Respondent had not submitted any bid in response to the
advertisement. The order of the High Court dated 23.12.2004
was passed in absence of the Court being apprised of the
provisional acceptance of the Appellant’s bid. The plea that the
Respondent was never made aware of the order of cancellation
dated 22.02.2000 merits no consideration as it was also
revealed in the counter affidavit of the State of Maharashtra
dated 11.07.2005 in Writ Petition No. 2112 of 2005. The
cancellation order was addressed to MHADA and copy marked
to the Respondent. There shall be a presumption in law that
a government communication was properly made and reached
the addressee, under Section 114 (e) of the Indian Evidence
Act. It is not the case of the Respondent that the order never
came to be issued and remained in the file. The Respondent
despite awareness never challenged the cancellation and
7
which sets at naught its entire claim. Any offer made to the
Respondent in teeth of, and after the cancellation was
therefore redundant.
10. The bid of the Appellant was provisionally accepted. No
final allotment was made in its favour under the advertisement
dated 17.11.2004. MHADA was inhibited from proceeding
further in view of the Court order dated 23.12.2004 in favour
of the Respondent. MHADA in its affidavit dated 24.06.2005,
in Writ Petition No. 2112 of 2005 preferred by the Appellant,
had disclosed the cancellation of the provisional acceptance by
order dated 07.05.2005. There shall likewise be a
presumption with regard to the issuance and delivery of the
same to the Appellant and it is not its case that no such order
was ever made or issued. The belated challenge to the
cancellation in Writ Petition No. 867 of 2010 was therefore
rightly rejected by the High Court on account of the
intervening developments with regard to the change in
permissible usage of the land from commercial to residential.
8
11. The change in permissible land usage by Resolution
No.6684 dated 20.10.2014 is a fundamental issue which goes
to the root of the matter. If the very substratum of the
advertisement has changed, a fresh tender is mandatory. The
passage of thirteen long years since the advertisement is also
an important consideration. The Notification dated
03.07.2017 issued under DCR Regulation 33(5) inter alia
altering the FSI is at the final stage awaiting publication. The
bid price today for that reason will also escalate considerably.
The State Government and MHADA have denied any fresh
negotiated settlement with the Appellant. The interim order of
this Court dated 04.09.2014 was not a carte blanche for a
mandatory settlement with the Appellant. The High Court has
noticed that the value of the property today would be
approximately 75 crores. In the land starved city of Mumbai,
the settlement of any government land, for a housing project,
has to be by public auction only, so as to fetch the best price
in the larger public interest.
9
12. The Respondent has only itself to blame for its woes,
based on a conduct that cannot be countenanced in law. It is
therefore not entitled to any interest on the deposit made by it
which shall be refunded by MHADA within four weeks. The
Appellant is found to have been wronged, but must bear part
of the blame for laches on its part also. It is therefore held
entitled to interest @ 8% on the deposit made by it including
the earnest money, only till 24.06.2005, to be paid within six
weeks.
13. In the entirety of the matter, all the appeals lack merit
and are dismissed.
………………………………….J.
(Ranjan Gogoi)
……….………………………..J.
(Navin Sinha)
New Delhi,
November 13, 2017.
10
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.496 OF 2007
JAYKRISHNA INDUSTRIES LTD.
THROUGH DIRECTOR .......APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
WITH
CIVIL APPEAL No. 498 of 2007
POPCORN PROPERTIES PRIVATE LTD.
THROUGH DIRECTOR AND ANOTHER ........APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
CIVIL APPEAL No. 18489 of 2017
(arising out of SLP (C) No.33322 OF 2011)
POPCORN PROPERTIES PRIVATE LTD.
AND ANOTHER ........APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
CIVIL APPEAL No.18492 of 2017
(arising out of SLP (C) No.30293 OF 2017)
JAYKRISHNA INDUSTRIES LTD. ........APPELLANT(s)
VERSUS
STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)
1
JUDGMENT
NAVIN SINHA, J.
Leave granted in both Special Leave Petitions.
2. The present batch of appeals, between the same parties,
arise from a controversy relating to auction settlement by the
Mumbai Housing and Area Development Board (hereinafter
referred to as “the MHADA”), of a plot of land measuring
10,000 sq. mtrs, located at Powai, in the town of Mumbai.
The auction notice published on 17.11.2004, remains
inconclusive, mired in litigation. The subsequent
developments being relevant are also required to be noticed.
The contesting parties, M/s.Popcorn Properties Private Limited
and M/s. Jaykrishna Industries Ltd., shall hereinafter be
referred to as the Appellant and Respondent for convenience.
3. Sri Shekhar Naphade, learned Senior Counsel for the
Appellant submitted that it being the highest bidder at
Rs.22,22,22,300/-, provisional acceptance of the bid was
communicated to it on 17.12.2004. As required, 25% of the
tender amount was deposited on 03.01.2005, awaiting
2
communication for deposit of the balance 75% amount. On
03.05.2005, the Appellant objected to MHADA illegally
negotiating settlement of the subject lands with the
Respondent. Writ Petition No. 2112 of 2005 was instituted
assailing the action of the official Respondents in provisionally
accepting the bid of the Respondent for Rs.22,23,22,300/-.
The order dated 17.12.2004 was subsequently wrongly
cancelled on 07.05.2005, and which was also assailed by the
Appellant in Writ Petition No. 867 of 2010.
4. The Respondent had earlier preferred Writ Petition No.
3466 of 2004 and obtained an order on 23.12.2004 for
submission of a higher bid. The Appellant was not a party to
the same. The High Court was not apprised that the
Appellant’s bid already stood provisionally accepted. Upon
being apprised of the correct facts, the order dated 23.12.2004
was recalled which automatically results in revival of the order
of acceptance of the appellant’s provisional bid. The High
Court wrongly declined to interfere with the order dated
07.05.2005 ordering a fresh tender process for settlement.
3
5. Shri Naphade, in the aforesaid facts further submitted
that the Appellant also had a right in equity for settlement in
its favour, especially in view of the interim order of this Court
dated 04.09.2014 permitting it to make a fresh proposal to the
MHADA, and which has been found acceptable by it. MHADA
had acted inequitably, on political influences, to cancel its bid
at the behest of the Respondent, who was not even a bidder in
response to the tender notice. The Appellant has had to suffer
for no fault of it, despite being the highest bidder. An
alternative submission was made that if fresh tenders were to
be invited, the right of the first refusal must be given to it for
matching the highest offer that may be made. The second
alternative submission was that 25 percent of the plot be
settled with it. The present case, on its peculiar facts, was a
fit case where the normal rule of settlement by tender could be
deviated from and settlement could be made by private
negotiation.
6. Mr. Sanjay Hegde, learned Senior Counsel for the
Respondent submitted that even prior to the advertisement
dated 17.11.2004, the Respondent had a pre-existing right to
4
settlement as it was already in negotiation with MHADA,
culminating in orders dated 05.07.1999 and 05.10.1999 in its
favour. This was recognised in Writ Petition No. 3466 of 2004
permitting it to offer a higher bid. On 15.02.2005, the
Respondent offered to increase its bid by Rs.10,00,000/-
above that of the Appellant and payment was made on
02.05.2005. The challenge by the Appellant to the
cancellation dated 07.05.2005 was highly belated. The
Appellant had no locus in the matter after the cancellation
order. The cancellation order having been declined
interference, the question of any private negotiation does not
arise. A like claim in equity was also raised for an opportunity
to pay the market price and match the price that may be
offered by the Appellant.
7. Learned Counsel for the State of Maharashtra submitted
that the order dated 05.07.1999 on which the Respondent’s
claim is founded has itself been annulled on 22.02.2000, and
which has not been assailed. Sri M.L. Verma, learned Senior
Counsel appearing on behalf of MHADA, submitted that the
advertisement dated 17.11.2004 was for construction of a
5
hotel according to the then permissible commercial usage of
the plot. The subsequent change in permissible usage to
residential purpose for construction of a housing complex
renders the entire controversy infructuous. A new
advertisement for auction at the best price available will have
to be made. Considerable time has also passed since the
advertisement. The DCR Regulation 33(5) under the
Development Control Regulations for Greater Bombay, 1991
(hereinafter referred to as “the Regulations”) with regard to
increase in FSI has not yet been finalized and published. It
was specifically denied that any decision had been taken to
make settlement in favour of the Appellant.
8. We have considered the submissions on behalf of the
parties, perused the records, including the impugned orders
and the communications exchanged between the parties.
9. The claim of the Respondent for settlement of a
government property by way of a private largesse, without
open advertisement, is completely unfounded in the law. Its
letter dated 30.06.1999 requesting for a sympathetic
consideration for settlement with it, as otherwise the property
6
was likely to be occupied by encroachers, is but a travesty of
the law. Apparently, the negotiations were done by MHADA
under political influence as evident from the letter of the
Respondent dated 29.11.2004 read with the letter dated
30.04.2005 of one Mr. Mohan Rawle, Member of Parliament.
The Respondent had not submitted any bid in response to the
advertisement. The order of the High Court dated 23.12.2004
was passed in absence of the Court being apprised of the
provisional acceptance of the Appellant’s bid. The plea that the
Respondent was never made aware of the order of cancellation
dated 22.02.2000 merits no consideration as it was also
revealed in the counter affidavit of the State of Maharashtra
dated 11.07.2005 in Writ Petition No. 2112 of 2005. The
cancellation order was addressed to MHADA and copy marked
to the Respondent. There shall be a presumption in law that
a government communication was properly made and reached
the addressee, under Section 114 (e) of the Indian Evidence
Act. It is not the case of the Respondent that the order never
came to be issued and remained in the file. The Respondent
despite awareness never challenged the cancellation and
7
which sets at naught its entire claim. Any offer made to the
Respondent in teeth of, and after the cancellation was
therefore redundant.
10. The bid of the Appellant was provisionally accepted. No
final allotment was made in its favour under the advertisement
dated 17.11.2004. MHADA was inhibited from proceeding
further in view of the Court order dated 23.12.2004 in favour
of the Respondent. MHADA in its affidavit dated 24.06.2005,
in Writ Petition No. 2112 of 2005 preferred by the Appellant,
had disclosed the cancellation of the provisional acceptance by
order dated 07.05.2005. There shall likewise be a
presumption with regard to the issuance and delivery of the
same to the Appellant and it is not its case that no such order
was ever made or issued. The belated challenge to the
cancellation in Writ Petition No. 867 of 2010 was therefore
rightly rejected by the High Court on account of the
intervening developments with regard to the change in
permissible usage of the land from commercial to residential.
8
11. The change in permissible land usage by Resolution
No.6684 dated 20.10.2014 is a fundamental issue which goes
to the root of the matter. If the very substratum of the
advertisement has changed, a fresh tender is mandatory. The
passage of thirteen long years since the advertisement is also
an important consideration. The Notification dated
03.07.2017 issued under DCR Regulation 33(5) inter alia
altering the FSI is at the final stage awaiting publication. The
bid price today for that reason will also escalate considerably.
The State Government and MHADA have denied any fresh
negotiated settlement with the Appellant. The interim order of
this Court dated 04.09.2014 was not a carte blanche for a
mandatory settlement with the Appellant. The High Court has
noticed that the value of the property today would be
approximately 75 crores. In the land starved city of Mumbai,
the settlement of any government land, for a housing project,
has to be by public auction only, so as to fetch the best price
in the larger public interest.
9
12. The Respondent has only itself to blame for its woes,
based on a conduct that cannot be countenanced in law. It is
therefore not entitled to any interest on the deposit made by it
which shall be refunded by MHADA within four weeks. The
Appellant is found to have been wronged, but must bear part
of the blame for laches on its part also. It is therefore held
entitled to interest @ 8% on the deposit made by it including
the earnest money, only till 24.06.2005, to be paid within six
weeks.
13. In the entirety of the matter, all the appeals lack merit
and are dismissed.
………………………………….J.
(Ranjan Gogoi)
……….………………………..J.
(Navin Sinha)
New Delhi,
November 13, 2017.
10
