TaxTMI 
TaxTMI 
2025 (4) TMI 1385
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.... For ease of discussion, the judgment has been structured according to the following table of contents: - Sl. No. TABLE OF CONTENTS Page No. 1. INTRODUCTION 3 onwards (i) Case of the petitioner 5-13 (ii) Case of YEA 13-15 (iii) Events taking place during pendency of writ petitions 15-16 (iv) Spot inspection 16-18 (v) Proceedings under IBC 18-19 (vi) Parties heard 19 2. ISSUES 20-21 3. CONTENTIONS - PETITIONER'S COUNSEL 21-31 4. CONTENTIONS - YEA's COUNSEL 31-56 ANALYSIS 56 onwards 5. ISSUE NO. 1 Writ Petitions' Maintainability 56-65 6. ISSUE NO. 2 Whether terms of allotment survive after execution of lease ISSUE NO. 3. Whether cancellation of allotment results in cancellation of lease 65 onwards (A) Salient features of allotment, lease and SDZ Policy 65-90 (B) How the parties understood the contract 90-94 (C) Independent statutory power under Section 14 of the Act, 1976 94-108 (D) Findings 108 7. ISSUE NO. 4 Effect of petitioner's earlier Writ Petition No. 47262/2017 on the present petition. 108-109 8. ....
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....cause title was amended pursuant to the order dated 26.07.2024. 4. The prayer made in the writ petition is to quash the order dated 12.02.2020 passed by respondent no. 2 (YEA) whereby the allotment of land made by the said respondent in favour of the petitioner has been cancelled. Further, a mandamus has been sought restraining the respondents from interfering with the peaceful possession of the petitioner over the land in question and from taking any other coercive action pursuant to the order impugned; further direction to respondent no. 2 to provide requisite amenities such as water, sewer and drainage and to take all other requisite steps for effective implementation of the Escrow Agreement dated 24.09.2018. The writ petition was amended and further prayers were added to quash the resolution dated 28.6.2021 (Annexure No. 37-B) passed by the Board of YEA in its 70th Board Meeting in so far as YEA sought to levy restoration charges upon the petitioner and limited the proposed re-schedulement and re-computation of the dues to the year 2023. Another relief claimed is for quashing the consequential letter dated 05.07.2021 (Annexure No. 37-C) whereby the decision taken by the Boar....
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....t letters dated 24.02.2009, 20.03.2009, 10.08.2009, 27.01.2010, 23.06.2010 and 07.12.2010 to the petitioner and the land measuring 1085.3327 hectares, inclusive of 98.9862 hectares for village development and abadi extension, and 14.6673 hectares was allotted to it. All the allotment letters, being similar in nature, contained a payment schedule, the area of the land allotted and installments fixed for payment of the premium . 7. In between the same period of time, subsequent to the six allotment letters and payment of 20% advance allotment money by the petitioner, 32 lease deeds were executed by which approximately 965.7390 hectares of land was leased. All the lease deeds contained detailed terms and conditions under which right in the land was transferred to the petitioner, specifying the mode of recovery of any amounts payable by the petitioner, as arrears of land revenue. Various clauses contained in the allotment letters which were contemplated to be a part of the lease deeds, were expressly incorporated therein without adopting the allotment letters as a whole. Lease deeds do not contain any clause which may enable the respondents to cancel/ terminate the lease deeds. Acco....
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....EA. The balance was to be deposited in installments fixed through the Re-schedulement Demand Letter. 10. The petitioner applied for re-schedulement scheme vide letter dated 24.07.2017 and the matter was discussed with the Chief Executive Officer of YEA on 24.07.2017 and he assured the petitioner that on payment of Rs. 300 Three hundred) crores, the matter would be taken up with Board for considering reduction of the rate of interest and re-schedulement of the balance amount. After discussion between the parties, the petitioner requested ICICI bank to release Rs. 300 (Three hundred) crores from the Escrow Account on 31.07.2017 and deposited the said amount through Bank Draft No. 551184 issued by ICICI bank. According to the petitioner, the sum so deposited amounts to more than 50% of the amount overdue that was further more than the required 15% amount contemplated under the Re- schedulement Scheme. YEA, instead of approving the petitioner's application under the Re-schedulement Schement, as per the petitioner, threatened it to cancel the allotment which led the petitioner to file Writ-C No. 47262 of 2017 seeking quashing of the letter dated 04.08.2017 with a writ of mandamus....
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....stallments, which were due on 30.09.2018 and 30.03.2019 to 31.12.2018 and 20.06.2019 respectively. YEA, however, continued to hammer upon making deposit of the balance amount and repeated requests made by the petitioner went in vain. Due to subdued economic environment and the fact that even after payment of land dues to the extent of 87%, the building drawings were not approved by YEA resulting into Real Estate Projects becoming unviable and causing huge losses to the petitioner. However, despite such repeated requests, YEA did not take bonafide action and even threatened the petitioner, inter alia, with cancellation/ termination of the lease deeds. 13. The petitioner presented a cheque of rupees 10 (ten) crores towards the overdue installments and promised to deposit the balance amount by 15.02.2019 and submitted letters requesting YEA to grant further extension of time to deposit the balance amount of first installment, reduction in rate of interest and sought rectification in respect of additional penal interest. YEA, vide its letter dated 04.06.2019, informed the petitioner that in 65th Board Meeting, it had been decided that change in payment mechanism to Escrow Account mi....
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.... cancellation order followed due process and was in accordance with contractual clauses governing non- payment. Clause 5.2 of the allotment letter allowed three default notices, beyond which the Authority had the right to terminate the lease. The petitioner was required to develop 35% of the total area for core activities, but failed to do so. 16. The dispute is contractual, arising from allotment letters and lease deeds, making a writ petition under Article 226 inappropriate. The Supreme Court has consistently ruled that judicial review in contractual matters is limited and should not be done unless arbitrariness or violation of fundamental rights is involved. The cancellation was effected as per Clause 4.2 of the allotment letters, and the petitioner has not disputed its payment defaults. 17. The lease deed is not a standalone document; it is directly linked to the allotment letters. Since the allotment letter was canceled, the lease deed also ceases to exist. 18. Despite multiple opportunities for restructuring payments, the petitioner failed to adhere to the new schedules. The Authority granted multiple extensions but still did not receive timely payments. The Escrow A....
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....e petitioner makes compliance of the order. Thereafter, by order dated 29.09.2022, the petitioner was directed to deposit a sum of Rs. 100 crores. This amount was deposited by the petitioner and an affidavit dated 02.11.2022 was filed to that effect. Accordingly, the petitioner has deposited Rs. 50 crores + Rs. 5 crores + Rs. 52,50,26,551/- + Rs. 100 crores (Total Rs. 207,50,26,551/-). 24. The Board of YEA, considered the proposal of the petitioner company for restructuring and vide letter dated 05.07.2021, demanded a lump sum payment of Rs. 425.10 crores towards "restoration charges" as a pre-condition. The petitioner challenged the aforesaid demand of YEA by filing Writ-C No. 17785 of 2021 which was dismissed as withdrawn with liberty to the petitioner to seek amendment in the present writ petition. Accordingly, amendment was sought and was allowed. SPOT INSPECTION DURING COURSE OF HEARING: 25. During the course of hearing, the Court, vide order dated 09.05.2024, directed for survey of the site by YEA in presence of representative of the petitioner. Site survey was, accordingly, conducted on different dates. The inspection report and photographs of the site have been fil....
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....ptcy Code, 2016 : 27. By order of NCLT dated 3.6.2024, the application of ICICI Bank filed in the year 2018 under Section 7 of the Insolvency and Bankruptcy Code was admitted by NCLT. The petitioner challenged the order dated 3.6.2024 before NCLAT vide Company Appeal (80) (Insolvency) No. 1185 - 1162 of 2024. The NCLAT dismissed the appeal by judgment dated 6.12.2024. Thereafter, Civil Appeals bearing number 98 - 102 of 2025 and 2011 - 2012 of 2025, along with various intervention applications, were filed before the Supreme Court assailing the aforesaid orders. The same were dismissed by the Supreme Court by order dated 10.1.2025. We are informed that at present, the resolution professional is functioning and so far there is no approved resolution plan. PARTIES HEARD : 28. We have heard Mr. Jayant Bhushan, learned Senior Advocate, assisted by advocates Mr. Vishal Gupta, Mr. Rohan Gupta, Mr. Amartya Bhushan, Mr. Aditya Marwah, Mr. Anoop Rawat, Mr. Sagar Dhawan, Mr. Ahkam Khan, Ms. Shikha Gupta, Ms. Kirti Gupta, Mr. Pranay Kumar, Mr. Jatin Kumar Mishra for the petitioner (JAL), Mr. Bhuvan Madan, Resolution professional (in person), Mr. Manish Goyal, learned Senior Advocate, ....
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.... follows: - A. Whether the fact that the company is in Corporate Insolvency Resolution Process (CIRP) should deprive the company of relief even if it is found that the cancellation was illegal where the Insolvency and Bankruptcy Code (IBC) specifically envisages continuation of the operations of the company as a going concern? B. What could be the broad principles to be applied in determining the legality/ appropriateness of YEA's demands i.e. as regards its dues? C. Whether the purported dues of YEA are now required to be resolved as per the provisions of the IBC in light of the statutory provisions of IBC and YEA submitting its claim with the resolution professional of the company? D. Whether YEA's claims are protected under IBC in view of fact that a claim under Section 13 and Section 13A of the UP Industrial Area Development Act, 1976 would make YEA a secured creditor and at par with entitlement of secured financial creditors under Section 30(2)(b) read with Section 53 of the IBC? 31. We proceed to note the submissions of learned counsel for the parties in relation to the main issues and if the cancellation order is held to be ille....
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....pretation given by the respondent is correct, namely, that the allotment letter and lease deed were to be read together and that all the clauses of the allotment letter still hold good even after execution of the lease deed, there was no purpose in repeating the clauses of the allotment letter in the lease deed. Further, several clauses in the allotment letter were substantially changed in the lease deed. This again points to the fact that the terms of the allotment letter were no longer in operation after the execution of the lease deed. If this were not so, there would be a complete confusion as to which of the two different clauses would be applicable after the lease deed had been executed. Still further, some of the clauses in the allotment letter were completely removed, or removed and replaced by different clauses in the lease deed. One such example is Clause 4.2 in the allotment letter which is the cancellation clause. Such a clause is conspicuously absent in the lease deed and instead there is Clause 38 which provides for recovery of amounts due as arrears of land revenue. Again, if both allotment letter and lease deed were simultaneously in existence, there would be comple....
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....e deed which is a subsequent, totally independent and separate document which has already superseded the allotment letter. ISSUE NO. 4: 36. The challenge in the earlier Writ Petition was essentially based on the ground that there was no occasion even to proportionately cancel the land in view of the fact that the default in payment was due to various actions of YEA itself such as not approving building plans, etc. However, by way of the impugned cancellation order, YEA has arbitrarily cancelled the entire allotment of land. The earlier Writ Petition is infructuous insofar as the challenge to the proportionate cancellation is concerned and the petitioner shall withdraw it with liberty to approach the Court for other prayers relating to sanctioning of plans, etc., in case the present Writ Petition is allowed. ISSUE NO. 5: 37. The lease deeds gave the petitioner the unfettered right to create third party rights including the power to sub-lease without permission of the Lessor i.e. the respondent No. 2 (Clause 5 of the Lease Deed), the permission to mortgage in favour of banks/financial institutions/lenders (Clause 14 of the Lease Deed), etc. It also gives the power to deve....
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....he Supreme Court in Andhra Pradesh Industrial Infrastructure Corporation (supra). 40. The cancellation not only affects the petitioner but various third parties such as home buyers and lenders (banks). Prior permission for mortgage was given by the respondent as per Clause 14 of the Lease Deed. The cancellation, apart from being contrary to the Lease Deed, would also affect the banks and is totally arbitrary and disproportionate. YEA could have recovered its arrears by resorting to Clause 38 of the Lease Deed, under which they could have sold assets of the petitioner sufficient to recover their dues. Thus, a small portion of the lease land could have been cancelled, the value of which was equal to the amount of dues payable to YEA. It was, therefore, incumbent on the respondent to choose the least restrictive measure to achieve fulfilment of its outstanding dues. This would have envisaged attachment of only that portion of the property and sale thereafter which would have been sufficient to recover the outstanding dues. In the present case, that would have meant less than 10% of the allotted land. The default in the present case was clearly not willful or dishonest and at variou....
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....SCC 303; (v) State of Rajasthan and another Vs. Ferro Concrete Construction Private Ltd .: (2009) 12 SCC 1; (vi) H.R. Basavaraj Vs. Canara Bank: (2010) 12 SCC 458; (vii) Ahmedabad Urban Development Authority Vs. Sharadkumar Jayantikumar Pasawalla & others: (1992) 3 SCC 285; (viii) Consumer Online Foundation & others Vs. Union of India & others: (2011) 5 SCC 360; (ix) Style (Dress Land) Vs. Union Territory, Chandigarh: (1999) 7 SCC 89; (x) Indian Explosives Ltd. and others Vs Coal India Limited and others: (2019) 16 SCC 258; (xi) Virtual Soft Systems Ltd. Vs. Commissioner of Income Tax, Delhi: (2007) 9 SCC 490; (xii) State of Jharkhand & others Vs. Ambay Cements & another: (2005) 1 SCC 368; (xiii) State of M.P. Vs. Thakur Bharat Singh: (1697) 2 SCR 454; (xiv) Kranti Associates Pvt. Ltd. & another Vs. Masood Ahmed Khan & others: (2010) 9 SCC 496; and (xv) Ahmad Ullah Vs. Union of India & others: 2019 SCC Online All 5904. CONTENTIONS RAISED ON BEHALF OF YEA (RESPONDENT NO. 2): 44. Sri Manish Goyal, learned Senior Counsel, appearing for the respondent no. 2-YEA, submits that the pre....
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....: (2002) 1 SCC 216, the Hon'ble Supreme Court held that disputed questions of facts cannot be determined in the exercise of writ jurisdiction. Re: Concept of Proportionality 46. At the outset, the Authority submits that the 'proportionality', in all its facets, has no application in the present case, which arises from a commercial and contractual relationship between the petitioner and the Authority. Contractual actions cannot be questioned on the grounds of equity and proportionality if it can be shown that the action of the Authority was in terms of the contract, such as the present case, wherein the Authority terminated the petitioner's Allotments and the Lease Deeds in accordance with Clause 4.2 of the Allotment Letters. The Authority had the power of cancellation of the Allotment and the Lease Deeds on the petitioner's defaults. The petitioner defaulted, which it does not dispute. Further, the petitioner failed to develop the SDZ Project including housing projects and maintain the Performance Bank Guarantee. Thus, there were valid grounds for cancellation and the Authority, in valid exercise of its contractual rights, terminated the Allotment and the ....
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.... all the outstanding dues towards some of the Lease Deeds stood paid and YEA could have terminated only the balance lease deeds." 50. The petitioner has admitted that it has defaulted in complying with the terms of the contracts. The petitioner has also not disputed the liability to pay. The only argument by the petitioner is that the respondent ought not to have chosen to cancel the entire allotment but ought to have taken back only the proportional land. The petitioner has raised the said argument in order to further its nefarious designs and enjoy the use of the beneficial land without having to pay for the same. The petitioner is trying to blow hot and cold. The Authority took a decision of taking back of proportionate land in its 61st Board Meeting dated 04 September 2017. The same was also informed to the petitioner. The petitioner challenged the said decision before this Hon'ble Court in the connected Writ Petition No. 47262 of 2017 raising a specific ground that the Authority's said decision cannot override the terms and conditions of the Allotment Letter, Reservation Letter and the Lease Deeds and the Authority has no right under the Lease Deeds to take back lan....
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.... petitioner's default arises from contractual obligations under the Allotment Letters and Lease Deeds, and there is no arbitrariness that warrants interference by this Hon'ble Court under Article 226. The Authority acted within its rights under the contract and followed due process in issuing the Cancellation Order. It is contended by the petitioner that when substantial developments have already taken place, respondents could not have cancelled the entire allotment and, default is in respect to some part of amount, but entire allotment has been cancelled, which is arbitrary and only proportional cancellation in respect of land in question at the best could have been made. Submission of Shri Goyal in this regard is that the Board of the Authority, at its 70th Board Meeting, passed a resolution (70/39), to restore the petitioner's allotment and lease deeds subject to payment of restoration charges at the rate of 10% of the prevailing rates of the allotted project ("Restoration Charges"). The Authority informed the petitioner about the said decision of the Board and, accordingly, directed the petitioner to deposit Restoration Charges for enabling the Authority to take fur....
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.... surrounding facts and circumstances, including correspondence exchanged, to arrive at the real intendment of the parties, and not what one of the parties may contend subsequently to have been the intendment or to say as included afterwards" 55. The Allotment Letters and Lease Deeds were intended to coexist and govern the parties' obligations together. The Lease Deeds explicitly refer to the Allotment Letters, which were annexed as integral schedules and were not superseded. The petitioner's own conduct further confirms this understanding, as it continued to rely on the Allotment Letters for key terms like payment schedules and extensions even after the Lease Deeds were executed. Thus, the petitioner's claim that the Lease Deeds supersede the Allotment Letters is factually incorrect and legally untenable. The argument of the petitioner that the defaulted amount can be recovered only as arrears of land revenue in terms of Clause 38 of the Lease Deeds and hence, to such an extent Clause 4.2 of the Allotment Letters stood eclipsed is flawed understanding of the composite transaction. The aforesaid clause in the Lease Deeds does not supersede the Allotment Letters in as ....
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....ing reliance upon judgment in MTNL (supra), it was contended that a composite transaction would refer to a transaction which is interlinked in nature; or, where the performance of the agreement may not be feasible without the aid, execution and performance of the supplementary or the ancillary agreement, for achieving the common objects, and collectively having a bearing on the dispute. It was contended that in case of a composite transaction involving multiple agreements, it would be incumbent for the courts to assess whether the agreements are consequential or in the nature of follow up to the principal agreement. 58. Submission is that the Authority, in exercise of its contractual rights and statutory power, was compelled to cancel the allotment and the lease deeds due to the petitioner's consistent and persistent breach of the terms of the allotment letters and the lease deeds. It is not in dispute that the petitioner is a persistent and consistent defaulter. The petitioner has admitted its defaults and that it failed to pay its outstanding dues arising out from the allotment and lease deeds executed for the SDZ Project. Despite the grant of various extensions for paymen....
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.... for payment even under the Re-schedulement vide letters dated 19 September 2018 and 27 October 2018. The Authority granted extension till 31 December 2018 for depositing the first instalment of the re-scheduled payment plan. On 31 December 2018, the petitioner deposited only Rs. 10 Crore (against the first re-scheduled instalment amount of approximately Rs. 108 Crore) and requested further extension until 15 February 2019. Performance Bank Guarantee was invoked to meet the defaults. On 31 October 2019, the Authority directed the petitioner to restore the performance bank guarantee since the earlier one had been adjusted towards the outstanding. However, the petitioner failed to do so. Escrow Arrangement: 59. In order to facilitate the payment of the outstanding dues from the petitioner, the parties entered into an Escrow Agreement on 24 September 2019. The escrow arrangement was a mechanism for ensuring that the proceeds from the housing project are collected in the escrow account and appropriated towards payment of outstanding dues from the petitioner. The petitioner once again failed to honour its commitment and until 28 February 2020, mere Rs. 47.09 lakh (approx.) was dep....
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....f the building bye laws and the requirements under the allotment letters and the lease deeds. The Authority's survey report concludes that the petitioner has only managed to develop 5.46% of "permissible covered area" in the core area (19.2 Hec.), falling significantly short of its obligation to develop 40% of the "permissible covered area" in the core area (148 Hec.). On 20 October 2011, the petitioner applied for part completion of 148 Hec. of the core area. Also, on 15 October 2011, the petitioner had applied for completion of main grandstand in the core area. Six notices (from 08 December 2011 to 12 July 2018) were issued by the Authority to the petitioner specifying the defects in the application for part completion of the core area and the lapse of the same in terms of the Building Regulations. However, the petitioner failed to rectify the defects or file a fresh application for the part completion of the core area in the SDZ Project. Three separate notices (from 07 December 2011 to 22 August 2012) were issued by the Authority to the petitioner specifying the defects in the application for part completion of the Main Grandstand in core area and the lapse of the same in te....
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...., therefore, weighed in as one of the primary factors for the passing of the cancellation order. Non-development of the SDZ Project and failure to obtain necessary approvals (in terms of the Allotment Letters/Lease Deeds and the Building Regulations) constitutes a material breach of the Allotment Letters/Lease Deeds and a valid ground for the Cancellation Order. Nevertheless, the Authority had the independent statutory power of cancellation under Section 14, which provides for termination "in case of breach of any condition of such transfer or breach of any rules or regulations made under this Act". As demonstrated above, the petitioner's actions breached Clauses 6.1, 8.1, 8.11, 10.1, and 15.1 of the Allotment Letters and the Building Regulations. Thus, the Authority was within its rights to terminate the Allotment Letters and Lease Deeds. Grievance of the homebuyers: 63. In terms of the SDZ Policy, the Allotment Letters and the Lease Deeds, the petitioner was required to develop the allotted land for various purposes, including residential and group housing projects. However, the petitioner failed to complete even a single housing project. The Cancellation Order was esse....
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.... dated 28 March 2017 and finally demand letter dated 17.08.2017 all being acts that are in consequence of the order dated 29th August 2014 passed by the Under Secretary, Government of Uttar Pradesh, to the extent to which demand has been raised for the payment of 64.7% additional compensation as no litigation incentive. This Court passed an interim order staying the demand of additional compensation. The petitioner filed another writ petition No. 47262 of 2017 inter alia challenging the Authority's board decision (in 61st meeting) regarding proportionate taking back of the land. The petitioner's 1st Writ Petition was connected with batch of other matters challenging the demand of additional compensation. The writ petition filed by M/s Shakuntla Educational and Welfare Society (Writ-C No. 28968 of 2018) was the lead petition in this batch. This Court allowed the petitioner's 1st Writ Petition and quashed the Authority's demand for additional compensation including the demand letter dated 15.12.2014. The Authority challenged the High Court's decision setting aside the demand of additional compensation including the demand letters before the Hon'ble Supreme Cou....
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....davit dated 26 July 2024, it is willing and ready to safeguard the interest of the third parties created in the land allotted to the petitioner, specifically concerning the homebuyers and sub- lessees of the petitioner. It is submitted that if the Cancellation Order is upheld and the lands allotted to the petitioner become free from the legal encumbrance, the following options are available for rehabilitation of the entire project including the incomplete group housing project undertaken by the petitioner (not sub-lessees, whose rights remain protected under the Cancellation Order). One option is to re-auction the whole land including the group housing projects inter alia with the conditions that the bidder shall pay the outstanding dues of the Authority as on the date of submission of the bid, and, the bidder shall be required to complete the incomplete housing projects of the homebuyers on priority basis and deliver the units booked/ allotted to them expeditiously on the same terms and conditions already entered by homebuyers with the petitioner. Given the appreciation in the value of land, the project will not only be viable, but it will also be economically lucrative to prospec....
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....the Reservation Letter, in case of default in the payment of any dues to the Authority, the Allottees would be required to pay penal interest @ prevailing SBI PLR+3% p.a. on defaulted amount compounded half yearly, for the defaulted period. Similarly, in terms of the Allotment Letters in case of any default by the petitioner in payment of any dues, the petitioner would be required to pay additional interest @ prevailing SBI PLR + 3% p.a. on defaulted amount, compounded half yearly for the defaulted period. Clause 3.6 of the Allotment Letters allows for extension in time for depositing the amount by Chief Executive Officer ("CEO") of the Authority in special circumstances for a maximum period of 30 days subject to payment of additional interest @ prevalent SBI PLR+3% p.a. for the extended period. The Authority submits that the imposition of additional penal interest was a reasonable condition for re-scheduling/ extension of the payment under the payment schedule, which the petitioner had itself sought and obtained. The petitioner also made payments pursuant to levy of additional penal interest. The petitioner is not entitled to now turn around and dispute the conditions for extensio....
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....ex Limited Vs. government of Tamil Nadu and others: (2022) 1 SCC 165 (v) State of Bihar Vs. Jain Plastics and Chemicals Ltd .: (2002) 1 SCC 210 and (vi) ABL International v. Export Credit Guarantee Corporation: (2004) 3 SCC 553. 69. On the other hand, learned Senior Counsel for the petitioner submitted that the YEA, in its counter affidavit did not raise any issue regarding maintainability but the only objection taken is that the scope of judicial review when dealing with the policy decision is narrow. It was submitted that judgement of the Supreme Court in Rajasthan State Industrial Development (supra), relied on by the respondent, laid down that generally the court should not exercise its writ jurisdiction to enforce the contractual obligation. The writ can be granted if there was already an existing legal right of the applicant which is being infringed. However, the writ does not create or establish a legal right. In other words, a writ cannot lie in a situation where a suit for specific performance would have to be filed. However, if the right already exists and is being infringed, a writ petition would lie. 70. The Supreme Court, in ABL International v. Export Credit Gua....
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....actual matters. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non- arbitrariness at the hands of the State in any of its actions. x x x ....
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....e at findings, which involve untying knots, which are presented by disputed questions of facts. Undoubtedly, in view of ABL Limited (supra), if resolving the dispute, in a case of repudiation of a contract, involves only appreciating the true scope of documentary material in the light of pleadings, the Court may still grant relief to an applicant. We must enter a caveat. The Courts are today reeling under the weight of a docket explosion, which is truly alarming. If a case involves a large body of documents and the Court is called upon to enter upon findings of facts and involves merely the construction of the document, it may not be an unsound discretion to relegate the party to the alternate remedy. This is not to deprive the Court of its constitutional power as laid down in ABL (supra). It all depends upon the facts of each case as to whether, having regard to the scope of the dispute to be resolved, whether the Court will still entertain the petition. ......In a case the State is a party to the contract and a breach of a contract is alleged against the State, a civil action in the appropriate Forum is, undoubtedly, maintainable. But this is not the end of the matter. H....
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....ntractual obligations are normally not to be entertained except in exceptional circumstances. 70. Further, the legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under: 70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness. 70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discriminations. 70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under A....
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....nd the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary. 70.10. Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness. 70.11. The scope of judicial review in respect of disputes falling wit....
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.... Whether the terms of the allotment letter, except those, specifically referred to and incorporated by reference in the lease dead, survive after the execution of the lease deed vis-a-vis the land parcels which are leased under the lease deeds? And Whether the impugned cancellation of the allotment letter by letter dated 12.02.2020 has the consequent effect of cancelling the lease deed, in the absence of specific cancellation of the lease deed? 78. As these issues are inter-connected, they are being addressed simultaneously. (A) Salient Features of Allotment, Lease and SDZ Policy: 79. A comparison of the terms of the lease deed with the allotment letter reveals that several clauses in the two documents are similar or more or less identical; some clauses have been modified; some clauses have been incorporated by reference and some have been substantially changed. Clauses which are similar: Particulars. Clauses in Allotment Letter. Clauses in Lease Deed 1. Clauses that are nearly identical in both, the allotment letter and the lease deed. 1. Clause 3.2, 3.5, 3.9 1. Clause 3 2. Clause 3.10 2. Clause 11(a) 3. Clause 3.11 3.....
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....e lease deeds, executed on 25.09.2009, in pursuance of allotment letter dated 20.03.2009 is reproduced below: "LEASE DEED This Deed of Lease is made on this 25th day of Sept 2009 Between Yamuna Expressway Industrial Development Authority (YEA) (Name changed from Taj Expressway Industrial Development Authority vide GoUP Notification No. 1165/77-4-08-65 N/08 Lucknow dated 11th July 2008), a statutory body constituted under the U.P. Industrial Area Development Act, 1976 and having its principal office at A-1, First Floor Commercial Complex, Sector-Beta-II, Greater Noida, District Gautam Budh Nagar, Uttar Pradesh (India) (hereinafter referred to as "Lessor" which expression shall, unless repugnant to the context mean and include its administrators, successors and assigns) of One Part. And M/s JPSK Sports Pvt. Ltd. a company incorporated under the Companies Act, 1956, having its Registered Office at Sector-128, Noida 201304, District Gautam Budh Nagar (U.P.). (hereinafter referred to as the "Lessee", which expression shall, unless repugnant to the context mean and include its successors and assigns) of Second Part. WHEREAS ....
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.... Lessee for the term of 90 (ninety) years (the "Term") commencing from the date of possession of Demised Land. (3) During the term of the lease, the Lessee shall pay to the Lessor, lease rent @ 2.5% of premium per annum in advance (the "Rent Amount") commencing from the month of Sept. 2009. The Lessee has paid to the Lessor Rs. 1,21,83,01,561.00 (Rupees one hundred twenty one crores eighty three lacs one thousand five hundred sixty one only) towards 20% of premium amount in Lessor's Current Account No. 30767210435 IFSC Code SBIN0004324 with Bank of India, Lagerstromia Shopping Complex, Greater Noida (U.P.), through RTGS, for 646.7530 Hectares land which includes 175.3639 Hectares of the Demised Land details of which are set out in the SCHEDULE-II hereto, the receipt whereof the Lessor doth hereby acknowledges. The balance 80% of the Premium shall be paid in 20 half yearly installments alongwith interest on reducing balance @ prevailing SBI PLR. The first half yearly installment mentioned above shall fall due after 180 days from the date of issue of Allotment Letter, in accordance with the provisions of Allotment letter dated 20.03.2009. (4) The Lessee shall pl....
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....ent Amount along with the Lessee. The quantum of Rent Amount payable to the Lessor shall remain unaffected by any such sub lease(s)/leave and license(s). It is hereby further clarified that the total Rent Amount payable by the Lessee and various sub- Lessees/transferees shall be to the maximum extent of @ 2.5% of the premium of land being leased per year (various sub-Lessees/transferees paying pro rata rent for the portion of land held by them). Each sub-lease and/or transfer shall after the execution thereof be notified by the transferor or the sub-Lessor/sub-Lessee to Lessor and till such time, it is so notified, the transferor/sub-Lessor shall remain jointly and severally liable along with the transferee/sub-Lessee for payment of lease rent to Lessor. However, for sub-lease of Core Activity land, prior permission of Lessor shall be required. (6) For the first transfer of land through sub-lease, no additional charges or transfer premium shall be payable by the Lessee to the Lessor or any authority. However, for subsequent transfers, additional payment shall be made to the Lessor at the rates specified by the Lessor. (7) Multiple renting shall be admissible to th....
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....mised Land without detriment to the Lessor or public interest. (14) The Allottee can mortgage the land in favour of banks/financial institutions/lenders for arranging funds for implementation of project, on such terms as may be mutually agreed between lessee, Lessor and Lendors. (15) Lessor shall carryout external development of the area of SDZs as expeditiously as possible. External Development Charges shall be payable by the Lessee in accordance with the provision of Allotment Letter dated 20.03.2009. Internal development of the area of SDZ shall be carried out by the Lessee. (16) Lessor shall identify and implement village development scheme and Abadi Extension in the area of SDZ in accordance with the terms of Allotment letter dated 20.03.2009. (17) The Lessor shall endeavor to help the Lessee in obtaining applicable permits, sanctions, approvals, clearances, etc. for effective enjoyment of the Demised Land. (18) Maintenance of External Development works for the SDZ shall be carried out by the Lessor and maintenance of works within the SDZ shall be corned out by the Lessee respectively at their own cost. (19) Upon written re....
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....the Lessee, upon payment of the rent and performance of the covenants herein contained, shall peaceably and quietly hold, possess and enjoy the Demised Land during the full term of this lease without any interruption, disturbance, claims or demands whatsoever by the Lessor or by any person/s claiming for and on behalf of the Lessor as per the covenants and provisions of this Lease Deed. (ii) The Lessor shall grant, transfer, convey and assure, from time to time, all its reversionary rights, title and interests in respect of such part of the Demised Land as may be required by the Lessee/sub- lessee for land use as per applicable Master Plan and other regulations of the local authorities. (iii) The Lessor hereby covenants that the Lessee/sub-lessee(s) shall enjoy quiet possession of the Demised Land without disturbance by it or its successor in interest or any person claiming title paramount thereto in any manner. (iv) The Lessor warrants that the Demised Land is free from all encumbrances, claims disputes, encroachments, occupations, litigations, injunctions, mortgages, charges, pledges, lien, hypothecation, security interest, assignment, privilege, or pri....
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....essee shall indemnify the Lessor against all actions, suits, claims, demands and proceedings and any loss or damage or cost or expense that may be suffered by the Lessor on account of anything done or omitted to be done by the Lessee in connection with the development of the SDZ. (30) The Lessor shall indemnify, defend and hold harmless to the Lessee against any and all proceedings, actions, 3rd party claims for loss, damages and expenses of whatever kind and nature arising out of defect in title and/or the rights of the Lessor in the land transferred to the Lessee. (31) That the Lessee shall keep the Lessor indemnified against any claims for damages which may be caused to any property belonging to the Lessor/ others in consequence of the execution of the works and also against claims for damages arising from the actions of the Lessee or his workmen or representatives which :- a. Injures or destroys any building or part thereof or other structure contiguous or adjacent to the Demised Land. b. Keeps the foundation, tunnels or other pits on the Demised Land open or exposed to weather causing any injury to contiguous or adjacent building. c....
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....s Pvt. Ltd. Sector-128, Noida 201304, Distt. Gautam Budh Nagar Uttar Pradesh Attention: Shri Sameer Gaur (MD & CEO) Telephone No .: 0120-4609000, Fax No .: 0120-4609025 All notices, orders and other documents required under the terms of the Lease or under U.P. Industrial Area Development Act 1976 (U.P. Act No. 6 of 1976) or any rules or regulations made thereunder shall be deemed to be duly served as provided under section 43 of the U.P. Urban Planning and Development Act 1973 as re-enacted and modified by the U.P. President's Act (re-enactment with modification) Act 74 (U.P. Act No. 30 of 1974). (37) This Lease Deed shall be subject to the jurisdiction of District Court at Gautam Budh Nagar or the High Court of Judicature of Allahabad. (38) All arrears payable to Lessor shall be recoverable as arrears of land revenue without prejudice to its other rights under any other law for the time being in force, subject however to the terms of this Deed. (39) The stamp duty chargeable in respect of instruments of transfer of land for the SDZ, by Lessor to Lessee has been waived vide Govt. of Uttar Pradesh Notification No. KN. 5-3279/....
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..... Canara Bank: (2020) 12 SCC 767 and Cox & Kings Ltd. v. SAP India (P) Ltd .: (2024) 4 SCC 1. It is further submitted that lease deeds were executed in furtherance of the allotment letters and the SDZ policy and since this serves a common purpose, their terms coexist without any inconsistency. The real intent of the parties is to be gathered from the manner in which they understood the contract and which reveals that the petitioner even after execution of lease deed continued to take recourse to various stipulations in the allotment letters to seek benefits in terms of the same and which were also granted to the petitioner. This further reveals that the parties also understood the contract in the manner that the allotment letters and lease deeds would subsist together. The petitioner cannot be permitted to blow hot and cold and contend that the allotment letters stood completely superseded having taken benefits of the stipulations in the allotment letter even after execution of lease deeds. 82. In Manks vs. Whiteley, the Chancery Division laid down the law relating to interpretation of a transaction contained in multiple documents as follows: "......where several deeds ....
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....t of encouraging private sector participation in various infrastructure projects in favour of the petitioner, a joint venture company. Thereunder, the petitioner was given task of development of Infocity near Gandhinagar. The said concession agreement contemplated execution of lease in favour of the petitioner. In pursuance thereof, a Lease Agreement dated 26.02.2001 was executed. Question arose, as to whether dispute between the parties, could be referred to arbitration, as there was such a clause in the Concession Agreement but not in the Lease Agreement executed in pursuance of the Concession Agreement. In the said backdrop, having regard to the entire scheme and its object and the correspondence exchanged between the parties, it is held as follows: "17. As stated above, the Master Lease Agreement was entered into between the defendant and the plaintiff and 116 acres of the land came to be leased to the plaintiff as per Concession Agreement. Therefore, it can be said that the Master Lease Agreement is in furtherance of Concession Agreement and the parties were to act as provided in Concession Agreement as well as in Master Lease Agreement. Therefore, it can be said that....
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....ort 'YEA') vide notification dated 11.07.2008 was identified as nodal agency to implement the SDZ Project in the development area falling under its jurisdiction. Every SDZ would have one main activity as 'core activity' apart from other activities. The core activity could be industrial information technology, bio-technology, institutional sports, recreation or service industry. In order to ensure accelerated high quality development, the allotment of land was divided under two heads: (a) less than 1000 ft. and (b) 1000 ft. or more. The area falling in category (b) was categorized as SDZ. The core activity in any SDZ would cover at least 35% of the total area. The other permissible activities were commercial not exceeding 20%; institutional and services not exceeding at least to the extent of 25%; road and other open areas not less than 25% and housing not less than 15%. Under the policy, applications were to be invited from the public through advertisement in newspapers and electronic media. The eligibility of the applicants which inter alia includes their financial capacity, experience etc. was specified. The selection was to be made by a Committee constituted by t....
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....tion letter is as follows: "1.1 The reservation of the above land is being made in your favour in anticipation of YEA taking possession of land for which acquisition proceedings are already in progress. The Allotment Letter/(s) for the said land in full or parts, shall be issued in due course of time." 88. The petitioner was required to furnish performance security of Rupees one hundred crores in favour of YEA within sixty days of receipt of Letter of Allotment. The performance security was to be maintained till core activity becomes functional. YEA reserved right in its favour to recover from the performance security any outstanding amount required to be paid by the allottee to YEA in accordance with the terms of allotment, if such amount is not paid within thirty days of service of notice by YEA upon the allottee. The allottee was to replenish the performance security to its full extent. The consideration for allotted land as per Clause 3.2 was classified into two categories, one provisional premium and second final premium. The provisional premium would mean the premium to be fixed in the allotment letter. The final premium would mean the premium which may finally be....
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....deed. In special circumstances, the said period could be extended. The provisions of U.P. Industrial Area Development Act, 1976 and regulations framed thereunder were made applicable. 90. On 24.02.2009, YEA issued a letter of allotment of first lot of land admeasuring 311.2641 hectares in villages Mathurapur, Mustafabad, Atta Guzaran, Bela Kalan, Aurangpur, Tehsil Sadar, District Gautam Buddh Nagar, as a part of 1000 hectare of land, on terms and conditions laid down in 'Annexure-l' appended thereto. The terms and conditions were almost identical as contained in reservation letter except for specifying the premium of allotted land as Rs.941.59/- per square meter excluding external development charges estimated at Rs.574/- per square meter excluding any levy for metro in future. The allottee was required to deposit 20% of the external development cost within ninety days from issue of allotment letter and balance 80% of external development cost in twenty half yearly installments along with the interest on reducing balance at SBI PLR as per the schedule fixed for payment of the premium. Clause 4 of the Allotment letter provided for the consequences of default in payment as....
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....period for completion of 40% of the permissible covered area of core activity was ten years from the date of execution of lease deed. The Chief Executive Officer was given power to grant reasonable extensions in this regard. Clause 10.1 is as follows: "10.1 The Allottee shall be required to complete minimum 40% of the permissible covered area of Core Activity within a period of 10 years from the date of execution of last Lease Deed for the land falling in the Core Activity area of SDZ land. However, in special circumstances Chief Executive Officer or any other officer authorized in this behalf, may grant reasonable extension for completion of the project." 94. In all, six allotment letters with similar provisions were issued, the details of which are as follows: S. Letter No. &Date Area (Ha) Allotted 1. YEA Letter No. YEA/48/2009 dated 24.02.2009 311.2641 2. YEA Letter No. YEA/82/2009 dated 20.03.2009 646.7530 3. YEA Letter No. YEA/206/2009 dated 10.08.2009 58.4182 4. YEA Letter No. YEA/393/2010 dated 27.01.2010 20.2960 5. YEA Letter No. YEA/459/2009 dated 23.06.2010 20.5098 6. YEA Letter No. YEA/497/2009 dated....
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....Bank of India, Lagerstromia Shopping Complex, Greater Noida (U.P.) through RTGS for 646.7530 Hectares land which includes 175.3639 Hectares of the Demised Land details of which are set out in the SCHEDULE-II hereto, the receipt whereof the Lessor doth hereby acknowledges. The balance 80% of the Premium shall be paid in 20 half years installments along with interest on reducing balance @ prevailing SBI PLR. The first half yearly installment mentioned above shall fall due after 180 days from the date of issue of Allotment Letter, in accordance with the provisions of Allotment letter dated 20.03.2009." 98. The proportion in which development of various activities over the demised land was to be done, remained the same, as was in the reservation and allotment letters. Thus, minimum of not less than 35% of the total area of SDZ was to be developed for core activity i.e. sports, including roads and open spaces. The lease further provided that subject to land use percentages specified, the lessee shall have exclusive right to determine the purpose for which the demised land will be used and also the allocation of area of demised land for different uses. The allottee had to determine th....
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....k Ltd. [Amalgamated Investment & Property Co. Ltd. v. Texas Commerce International Bank Ltd., 1982 QB 84: (1981) 3 WLR 565 (CA)], QB at p. 121: "... If parties to a contract, by their course of dealing, put a particular interpretation on the terms of it- on the faith of which each of them- to the knowledge of the other- acts and conducts their mutual affairs- they are bound by that interpretation just as much as if they had written it down as being a variation of the contract. There is no need to inquire whether their particular interpretation is correct or not- or whether they were mistaken or not- or whether they had in mind the original terms or not. Suffice it that they have, by their course of dealing, put their own interpretation on their contract, and cannot be allowed to go back on it.""" (emphasis supplied) 101. Again in McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181, the Supreme Court held that: "112. It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement, is wit....
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....titioner, relying on the allotment letters, represented to the Chief Executive Officer, YEA vide letters dated 04.07.2018, 20.09.2018, 03.12.2018, 13.12.2018 and 31.12.2018 that it should be charged only 3% as penalty over and above SBI PLR as stipulated under Clause 4.1 of the allotment letters. It tried to impress upon YEA that it had charged additional penal interest ranging between 1 to 3% over and above 3% stipulated under Clause 4.1 of the allotment letters and therefore, it should recalculate the amount payable by the petitioner under re-schedulement plan. 105. Repeatedly, the petitioner had taken recourse to allotment letters, for seeking various benefits, even after execution of lease deeds. It reveals that there was common understanding that the allotment letters would subsist along with the lease deed for limited purposes, in respect of which there was no contradictory provision in the lease deed and which could co-exist. The execution of lease deeds resulted in de jure conferment of lease hold rights in favour of the petitioner company, but not complete annihilation of the allotment letter. (C) Independent Statutory Power of cancellation and resumption: 106. Se....
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....hority in the industrial development area on such terms and conditions as it may, subject to any rules that may be made under this Act, think fit to impose." 109. Section 14 of the Act, 1976 provides for forfeiture for breach of conditions of transfer and reads thus: - "14. Forfeiture for breach of conditions of transfer. - (1) In the case of non-payment of consideration money or any instalment thereof on account of the transfer by the Authority of any site or building or in case of any breach of any condition of such transfer or breach of any rules or regulations made under this Act, the Chief Executive Officer may resume the site or building so transferred and may further forfeit the whole or any part of the money if any paid in respect thereof. (2) Where the Chief Executive Officer orders resumption of any site or building under sub-section (1) the Collector may, on his requisition, cause possession thereof to be delivered to him and may for that purpose use or cause to be used such force as may be necessary." 110. The lease deed specifically provided that the right of recovery of dues as arrears of land revenue was without prejudice to the right of the A....
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....ny instalment thereof due by the lessee on account of the transfer of any site or building by the Authority; or (b) breach of any condition of such transfer or breach of any rules or regulations made under the Act by the lessee. 33. Sub-section (2) provides that where the Chief Executive Officer of the Authority resumes any site or building under sub-section (1) of Section 14, on his requisition, the Collector may cause the possession thereof to be taken from the transferee by use of such force as may be necessary and deliver the same to the Authority. This makes it clear that if a lessee commits default in paying either the premium or the lease rent or other dues, or commits breach of any term of the lease deed or breach of any rules or regulations under the Act, the Chief Executive Officer of Noida Authority can resume the leased plot or building in the manner provided in the statute, without filing a civil suit. The Authority to resume implies and includes the Authority to unilaterally cancel the lease. 36. Therefore, Noida Authority has the authority, having been empowered by the statute, to cancel the lease and resume possession, without recourse to a civil c....
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....wing recitals in the impugned order: - "(a) The Authority in its 64th Board Meeting dated 27.11.2018 at Item No. 64/09, turned down the request of the petitioner made vide letter dated 30.10.2018 and decided that in case the arrears were not paid by 31.12.2018, action be taken against the petitioner for cancellation/recovery. (second paragraph of internal page 5 of the impugned order) (b) The petitioner having defaulted in complying with the conditions of allotment and lease deed by not paying arrears by 31.12.2018, permitted by the decision taken in the 64th Board Meeting, the lease deed and allotments are liable to be cancelled with immediate effect. (Clause 1 at internal page no. 7 of the impugned order) (c) Even after re-schedulement of loan, there was default in payment of second and third installments and replenishment of bank guarantee and even after issuance of defaulter notice Rs. 225,46,22,814/- was not paid and consequently, proceedings for cancellation of allotment/lease deed are being held. (para 1 of internal page no. 7 of the impugned order) (d) The petitioner has not paid heed to the grievance of the homebuyers, leading to great r....
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....ed construction. The respondent-Corporation replied to the show-cause notices stating that the facilities of roads, water and electricity were provided only in the year 2006 when show-cause notice was issued. On 28.03.2006, the appellant-Corporation cancelled the allotments on the ground that the respondents had failed to establish industrial/business units within the time specified in the allotment letters. The respondents questioned the cancellation of the allotments inter alia on the ground that after execution of sale deeds, the appellant-Corporation was not left with any power to cancel the allotments and the sale-deeds did not contain any such stipulation. The High Court allowed the writ petitions filed by the respondents and quashed the order of cancellation of allotments inter alia on the ground that ordinarily after execution of sale deeds a concluded contract came into existence. The allotment conditions and covenants of agreement of sale did not survive. The findings of the High Court have been noted in Para 11 of the judgement, thus- "11. It was further held that the appellant Corporation offered industrial plots and the respondents/entrepreneurs gave counter-o....
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....te marketable title to the property, the appellant Corporation had no right to insist on the conditions mentioned in the allotment letter, which cease to have any effect after the execution of the sale deed." (emphasis supplied) 116(ii). It is noteworthy that the Supreme Court while coming to the said conclusion relied on various provisions of the Transfer of Property Act, which related to absolute transfer of interest in the property i.e., by sale and not in case of limited transfer of interest like lease. This is evident from the discussions in paragraph nos. 16 and 17 of the judgement, which are extracted below for ready reference: "16. Section 5 of 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 .- 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. ....
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....r 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." 116(iii). The said aspect becomes more clear from the discussion made in paragraph no. 18 wherein the Supreme Court distinguished its earlier judgement in Indu Kakkar vs. Haryana SIDC Limited, 1999 (2) SCC 37 solely on the ground that in the said case there was a specific condition in the agreement. Accordingly, Clause 7 of the agreement stipulating that the industrial unit was to be set-up within a specified period failing which the Corporation shall have right to resume the plot was held to be valid and enforceable by placing reliance on Section 31 of the Transfer of Property Act. The submission based on Section 11 of the Transfer of Property Act that any such restriction would be repugnant to interest created was repelled, holding that it applied solely to cases of transfer of 'absolute interest....
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....n (b) to the section makes the position clear, and it reads: '(b) A transfers a farm to B, provided that, if B shall not go to England within three years after the date of the transfer, his interest in the farm shall cease. B does not go to England within the term prescribed. His interest in the farm ceases.' 17. All that Section 32 of the Transfer of Property Act provides is that 'in order that a condition that an interest shall cease to exist may be valid, it is necessary, that the event to which it relates be one which could legally constitute the condition of the creation of an interest'. If the condition is invalid, it cannot be set up as a condition precedent for crystallisation of the interest created. The condition that the industrial unit shall be established within a specified period failing which the interest shall cease, is a valid condition. Clause 7 of the Agreement between the parties is, therefore, valid and is binding on the parties thereto." 19. This legal position is not disputed. However, in the instant case, there was no such stipulation in the agreement to sell or the sale deed. It was in the allotment letter. On the ....
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.... cancelling the lease deeds. Issue No.4: Whether the petitioner's earlier Writ C- 47262/2017 challenging the decision taken by the respondent in its meeting dated 04.09.2017 for cancelling proportionate land would disentitle the petitioner from challenging present cancellation on the ground of proportionality? 120. From perusal of the record, we find that the challenge in the earlier Writ Petition No. 47262 of 2017 was essentially based on the ground that there was no occasion even to proportionately cancel the land in view of the fact that the default in payment was due to various actions of the respondents themselves such as not approving building plans, etc. 121. During its pendency, the allotment of entire land was cancelled, which is under challenge in fresh writ petition. Sri Jayant Bhushan, learned Senior Counsel for the petitioner, stated that in view of subsequent development, the challenge to proportionate cancellation has been rendered infructuous. He submitted that in case challenge to the entire cancellation succeeds, the petitioner will avail appropriate remedy for other reliefs. We are also of the view that the previous writ petition has lost its signifi....
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....nal Circuit); moreover, around the date of cancellation order, the petitioner had paid an amount of Rs. 2294.49 crores (including interest) against allotment amount of Rs. 1659.25 crores towards land premium and Rs. 195.73 crores (including interest) towards lease rent against Rs. 264.42 crores (including interest); the default in the present case was clearly not wilful or dishonest and at various stages, the default ranged between 9% to 25% (total amount payable) when the cancellation was made; on the date when the cancellation was made, the cancellation of the entire allotment at that stage was, therefore, totally disproportionate. It was suggested that present value of the land is much higher than the dues of YEA. The dues of YEA, in case of recovery as arrears of land revenue, could have been satisfied by sale of only some part of the land or other assets of JAL and cancellation of entire allotment of 1000 hectares was per se illegal and arbitrary. It was urged that petitioner has already shown its bona fide by depositing more than Rs. 200 crores towards principal amount in pursuance of the interim orders of this Court dated 25.02.2020, 08.02.2021 & 29.09.2022. Considering the ....
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....62/2017, the petitioner is making contrary submissions in the present Writ Petition. (A) PROPORTIONALITY: (i) Precedents: 126. In Teri Oats Estates (P) Ltd., on which much emphasis has been placed by Learned Senior Counsel for the petitioner, the Supreme Court explaining the doctrine observed that it is a test of reasonableness to adjudge the validity of any legislative or administrative action. It ensures that government actions are fair, just and not excessive. It requires that any action taken by the State or any administrative authority must be proportionate to the objective it seeks to achieve. Where several choices are available, the least restrictive measure should be taken. The origination of the doctrine in the 19th Century and the guiding principles for its application has been laid down in paras 40 to 53 of the judgement, the relevant parts of which are extracted for ease of reference: "45. The said doctrine originated as far back as in the 19th century in Russia and was later adopted by Germany, France and other European countries as has been noticed by this Court in Om Kumar v. Union of India. 46. By proportionality, it is meant that the ques....
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....rrationality and procedural impropriety, observed that they are only the broad grounds but did not rule out addition of further grounds in the course of time and also noticed "Brind". 49. Ever since 1952, the principle of proportionality has been applied vigorously to legislative and administrative action in India. While dealing with the validity of legislation infringing fundamental freedoms enumerated in Article 19(1) of the Constitution of India, this Court had occasion to consider whether the restrictions imposed by legislation were disproportionate to the situation and were not the least restrictive of the choices. In cases where such legislation is made and the restrictions are reasonable; yet, if the statute concerned permitted administrative authorities to exercise power or discretion while imposing restrictions in individual situations, question frequently arises whether a wrong choice is made by the administrator for imposing the restriction or whether the administrator has not properly balanced the fundamental right and the need for the restriction or whether he has imposed the least of the restrictions or the reasonable quantum of restrictions etc. In such case....
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....easures taken to achieve such a purpose are rationally connected to the purpose, and such measures are necessary. This essence of doctrine of proportionality is beautifully captured by Dickson, C.J. of Canada in R. v. Oakes, in the following words (at p. 138): "To establish that a limit is reasonable and demonstrably justified in a free and democratic society, two central criteria must be satisfied. First, the objective, which the measures, responsible for a limit on a Charter right or freedom are designed to serve, must be "of" sufficient importance to warrant overriding a constitutional protected right or freedom ... Second ... the party invoking Section 1 must show that the means chosen are reasonable and demonstrably justified. This involves "a form of proportionality test ... " Although the nature of the proportionality test will vary depending on the circumstances, in each case courts will be required to balance the interests of society with those of individuals and groups. There are, in my view, three important components of a proportionality test. First, the measures adopted must be ... rationally connected to the objective. Second, the means ... should impair "as ....
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....n excessive nature so as to go beyond the requirement of the interest of the general public. (3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances. (4) A just balance has to be struck between the restrictions imposed and the social control envisaged by Article 19(6). (5) Prevailing social values as also social needs which are intended to be satisfied by the restrictions. (6) There must be a direct and proximate nexus or reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions, and the object of the Act, then a strong presumption in favour of the constitutionality of the Act will naturally arise." (ii) Key Principles of Proportionality : 129. The following principles, therefore, emerge: (a) The administrative action must have a lawful objecti....
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....st two installments for over one and a half years. Specifically, payments for the first installment (approximately Rs. 125 crores) and the third installment (approximately Rs. 100 crores) were not made. In response, the Authority issued six additional Default Notices on October 16, 2018, December 3, 2018, December 13, 2018, August 19, 2019, October 31, 2019, and December 9, 2019. Instead of paying the overdue amounts, the petitioner continued seeking further extensions under the rescheduled plan. (e) Final Extension and Non-Compliance: As another least restrictive measure, the Authority granted an extension until December 31, 2018, for the petitioner to deposit the first installment under the revised plan. However, by the deadline, the petitioner deposited only Rs. 10 crores, far below the expected first installment amount of approximately Rs. 108 crores. The petitioner, then, requested another extension until February 15, 2019. (f) Invocation of Performance Bank Guarantee to Cover Defaults: On June 18, 2019, the petitioner requested the Authority to encash a performance bank guarantee worth Rs. 100 crores to settle outstanding dues. Subsequently, on July 2, 2019, the A....
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....4; द्वारा अस्वीकार कर दिया गया। प्रस्ताव-2 प्रस्ताव पर चर्चा के दौरान संचालक मण्डल द्वारा मैं, जेपीएसआई को सैक्टर-25 में आवंटित एस.डी.जेड. योजना के अंतर्गत दिनांक 31.08.2017 तक कुल बकाया धनराशि का संज्ञान लिया गया। तद्&....
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....किसी को सब-लीज, आवंटित अथवा जे०पी० द्वारा आवंटित किसी योजना का भाग न हो। भविष्य में भी जब-2 जे०पी० द्वारा समय पर किश्तों का भुगतान न किया जाये तो डिफाल्टिड धनराशि के सापेक्ष समानुपातिक भूमि समय-2 पर जे०पी० से....
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....#2381;रेषित किया जाये कि शासन उक्त भूमि के निस्तारण हेतु भूमि को विक्रय कर आवंटियों को धनराशि वापिस कराने के सम्बन्ध में समुचित व्यवस्था करा दे।" 132. The petitioner challenged the said decision before this Court through Writ Petition No. 47262 of 2017 raising a specific ground that the Authority's said decision cannot override the terms and conditions of the Allotment Letter, Reservation Letter and the Lease Deeds and the Authority has no right under the Lease Deeds to take back lands belonging to the petitio....
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....claimed by YEA towards balance loan premium, lease rent, additional compensation and in paragraph-13 disclosed the amount due according to it as sum of Rs. 10,67,78,65,669. Paragraph-13 is extracted below: "13. That in view of the above submissions it is clear that the petitioner is only liable to pay a total of Rs. 10,67,78,65,669/- under the following heads: (a) Balance Land Premium as on 12.02.2020 i.e. the date of cancellation order - Rs. 547,77,22,591/-), (b) Lease Rent up to 12.02.2020 i.e. the date cancellation order- 68,68,93,823/- (c) Additional Compensation 451,40,40,275/ -. " 137. In paragraphs 14 & 15 of the same affidavit, the petitioner has stated as follows: "14. The Petitioner is willing and ready to pay to YEIDA and undertakes to pay the balance amount of Rs. 1067,78,65,669/- as under :- i) 75% within 6 months from the date of final order of Hon'ble High Court. ii) Balance 25% within 9 months from the date of final order of Hon'ble High Court 15. That the Petitioner also submits that it will undertake the construction of the housing projects launched by it and shall complete the same....
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.... may be directed for a reference under the IBC by 31 December 2017. The petitioner company was one such entity. No viable resolution plan could be found as a result of which it is also required to be referred for CIRP. The judgment also takes note of the fact that JAL was classified under the SMA - II category (demands overdue for more than 60 days) by banks as early as on 3 October 2014 and as an NPA since 31 March 2015. Further observation in the said judgment is that "The facts which have emerged before the Court from the application filed by the RBI clearly indicate the financial distress of JAL and JIL...................Accordingly, we accede to the request made on behalf of the RBI to allow it to follow the recommendations of the IAC to initiate a CIRP against JAL under the IBC". 141. According to the petitioner, it has paid a total sum of Rs. 2294.48 Crores under various heads to the respondent-Authority, and had invested Rs. 2500 Crores in carrying out development of core and non core areas, thus, it had spent Rs. 4794.48 Crores. The petitioner, in the written note supplied to the Court, admitted that it had so far sold 2500 residential plots between 2011-2016. The petit....
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.... Estate Regulatory Authority (RERA ) along with status of construction prevailing at the relevant time has been given in paragraph 10 which is as follows: Status of Projects Name of Project Project Type RERA Registration No. Original Launce Date RERA Registration Date RERA Completion Date Current Status Jaypee Greens Bougainvilleas, SDZ, YEW Large Residential Plots UPRER APRJ54 36 30-08- 2012 29-07- 2017 31-12- 2014 No Infrastructure present on this plotted development, no proper roads, no water supply, no sewage connection, no parks, club or any other amenities available. Jaypee Greens Country Homes-I, SDZ, YEW Residential Plots UPRER APRJ5440 2010 16-01- 29-07- 2017 30-11- 2011 No Infrastructure present on this plotted development, no proper roads, only kaccha road is built with few electric poles with no light, no water supply, no sewage connections, no parks, club or any other amenities available. Jaypee Greens Country Homes-II, SDZ, YEW Residential Plots UPRER APRJ5443 08-05- 2012 29-07- 2017 30-11- 2014 No Infrastructure present on this plotted development, no proper roads, only kaccha road....
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....ions, no parks, club or any other amenities available. Jaypee Greens Villa Expanza Country Homes-II, SDZ, Independent Houses UPRER APRJ5415 05-10-2013 29-07-2017 31-03-2020 No Infrastructure present on this plotted development, no proper roads, only kaccha road is built with few electric poles with no light, no water supply, no sewage connections, no parks, club or any other amenities available. Jaypee Greens Villa Expanza Greencrest Homes, SDZ, YEW Independent Houses UPRER APRJ5048 14-09-2013 29-07-2017 30-06-2020 No Infrastructure present on this plotted development, no proper roads, only kaccha road is built with few electric poles with no light, no water supply, no sewage connections, no parks, club or any other amenities available. 145. It is also asserted that in ten residential projects, out of total receivable of Rs. 2433.41 Crores, the petitioner company had recovered around Rs. 1900 Crores which comes to 80% of the dues and only Rs. 532.64 Crores was left to be paid at the time of handing over possession. The said petition also makes a specific reference to the observations made by the Supreme Court in Chitra Sharma regarding f....
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....lop the SDZ project and fulfilling its obligations towards homebuyers. It also specifically mentions about various complaints received from the homebuyers and a meeting convened by the Authority between the representatives of the petitioner-Company and the Homebuyers Association. It also mentions about assurance given by the representative of the petitioner-Company to redress all the grievances of the homebuyers and take steps for completion and delivery of possession to them but that the petitioner-Company failed to abide by its commitment. 149. A close reading of the cancellation order reveals that the basic ground for cancellation was default on part of the petitioner- Company in failing to pay the dues of the Development Authority. Even, last show-cause notice dated 09.12.2019 was for alleged non- payment of the dues of the Authority and not on account of non- development and, therefore, we agree with the submission of learned Senior Counsel for the petitioner that non-development could not be a ground for cancellation. At the same time, we are not inclined to accept the submission that the reference to certain non-development in the cancellation letter is only on account of....
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.... the Supreme Court has held that the test for ascertaining reasonableness in the context of the doctrine of proportionality has to be examined in an objective manner from the standpoint of the interest of general public and not from the point of view of the person upon whom the restrictions are imposed or abstract consideration. The relevant part of the judgement wherein these observations have been made is extracted below :- "When a law limits a constitutional right which many laws do, such limitation is constitutional if it is proportional. The law imposing restriction is proportional if it is meant to achieve a proper purpose, and if the measures taken to achieve such a purpose are rationally connected to the purpose, and such measures are necessary. Such limitations should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. Reasonableness is judged with reference to the objective which the legislation seeks to achieve, and must not be in excess of that objective. Further, the reasonableness is examined in an objective manner from the standpoint of the interest of the general public and not from the point of view of the pers....
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....cellation Order has not been found to be arbitrary but a necessary response to the petitioner's material breaches, which have been well- documented through a series of notices and opportunities granted to the petitioner to comply. 157. Further, the judgment in Teri Oats has been distinguished and not relied upon by the Hon'ble Supreme Court in HUDA v. Des Raj Chawla, (2018) 16 SCC 30 (paragraph 7) which is extracted for ease of reference: "7. The learned counsel appearing on behalf of the respondents has placed reliance on the decision of this Court in Teri Oat Estates (P) Ltd. v. State (UT of Chandigarh) in which it has been laid down that the power of resumption and forfeiture of money deposited by the lessee in case of default in making due payment should be exercised sparingly. However, we find that the said case is totally on different factual matrix. Whereas the plot was to be transferred, there was delay in making payment. As such, the case referred to, has no application to the instant case. Though, power to resumed allotment was not to be on trivial breach buy on material breach, we find that the case at hand was the one in which blatant misuse was ther....
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....e project and to liquidate its liabilities towards the Authority as well as homebuyers/allottees. Several attempts were made by the Court to get the dispute resolved amicably. Initially, the Authority, pursuant to resolution dated 02.06.2021 at its 70th Board Meeting, agreed to restore the allotment subject to payment of 10% towards restoration charges. However, the petitioner did not agree to the same. It challenged the same by amendment, but at the time of hearing, no submission was made regarding the validity of the charges except that in case the cancellation is quashed, there would be no question of paying restoration charges. Vide order dated 29.09.2022, this Court again required the petitioner to disclose how it intends to revive the projects and liquidate all its liabilities towards Authority as well as homebuyers. In pursuance thereof, a revised composite settlement proposal was submitted by the petitioner. It was considered by the Board of the Authority at its 75th meeting dated 02 December, 2022 and again the parties failed to resolve the matter amicably. The aforesaid facts are recorded in the order dated 13.07.2023 passed on the application filed by the petitioner to a....
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....d method to deposit Rs. 2715 crores, as noted above, 150 acres of land in the Core Area has been proposed to be sold. As to the time period, after much deliberation held over the last more than three hearings, it has emerged, not less than one year time would be required to make good that deposit. Here, it may be noted, at one stage petitioner had also proposed that it may give up about 100 acres of land in the Core Area to YEIDA against the demand of Rs. 2115 crores (approximately). However, that proposal was stoutly rejected by YEIDA." (vii) Insolvency established: 161. It is not in dispute that after the impugned cancellation order was passed, the petitioner, due to its defaults, was admitted to insolvency proceedings before NCLT. The Tribunal, by order dated 03.06.2024 (Annexure no.1 to the petitioner's 8th supplementary affidavit), disposed of the proceedings. The operative portion of the order of NCLT reads as under :- "102. As a necessary consequence of the moratorium in terms of Section 14, the following prohibitions are imposed, which must be followed by all and sundry: (a) the institution of suits or continuation of pending suits or proceedings....
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....of 2024 is disposed off and IA No. 406 of 2023 is dismissed as infructuous accordingly. 106. List the matter on 08.07.2024 for filing of the progress report/further proceeding." 162. The petitioner challenged the order dated 03.06.2024 before the NCLAT vide Company Appeal (AT) (Insolvency) No. 1158-1162 of 2024. NCLAT dismissed the appeal by judgment dated 06.12.2024, Annexure no. 2 to Civil Misc. Application No. 77 of 2024 filed on behalf of the respondent no. 2 that was taken on record by this Court's order dated 03.01.2025 that reads as under :- "1. Application placed before us as per roster. 2. Ms. Gunjan Jadwani, appearing on behalf of the Resolution Professional, states that she does not intend to make any submission, as the order of NCLAT sought to be brought on record, is a matter of record. 3. Consequently, the application be kept on record." 163. Various Civil Appeals bearing Nos. 98-102 of 2025 and 211-212 of 2025 along with various intervention applications were filed before the Apex Court assailing the aforesaid orders. The same were dismissed by the Supreme Court by order dated 10.01.2025, which reads as under :- "ORDER....
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.... the petitioner to deposit Rs. 52,50,26,551/- with an observation that after such deposit, in case the petitioner moves an application for re-structuring and re- computing the dues payable by it, the same shall be considered by the respondent authority in accordance with law. The said amount was deposited. Thereafter, by order dated 29.09.2022, the petitioner was directed to deposit a sum of Rs. 100 crores. This amount was deposited by the petitioner and an affidavit dated 02.11.2022 was filed to that effect. Accordingly, the petitioner has deposited Rs. 50 crores + Rs. 5 crores + Rs. 52,50,26,551/- + Rs. 100 crores (Total Rs. 207,50,26,551/-). 169. Although, Shri Manish Goyal submits that, in the facts of the case, the amount deposited by the petitioner is liable to be forfeited by YEA, we are not inclined to accept the said submission of Sri Goyal. The reason lies in the specific language incorporated in Section 14 of the Act of 1976, which is again quoted as under :- "14. Forfeiture for breach of conditions of transfer.- (1) In the case of non-payment of consideration money or any instalment thereof on account of the transfer by the Authority or any site or building ....
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.... Authority, i.e. to forfeit either whole or any part of the money deposited by the petitioner, has not been exercised by YEA. Therefore, we are of the view that the order impugned does not result in either express or implied forfeiture of the amount deposited by the petitioner so far. As a corollary to the same, the Authority shall be obliged to refund to JAL the money received by it till the time lease was cancelled, except to the extent permitted vide paragraph 187(D). 171. As insolvency of YEA has been admitted and proceedings as per IBC are pending before NCLT, therefore, we are of the opinion that the entire money paid by the petitioner to YEA should be placed at the disposal of NCLT for being dealt with as per provisions of Insolvency and Bankruptcy Code, 2016 as the order passed by NCLT admitting the petitioner to insolvency process, has already been upheld by NCLAT and, then, by the Supreme Court. The amount shall be dealt with as per the directions of Resolution Professional (RP). This is being done so as to take care of the interest of the financial institutions also as the public money is involved in facilitating funds to the petitioner. Though it is urged on behalf o....
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....titioner (not sub-lessees, whose rights remain protected under the Cancellation Order). 13. One option is to re-auction the whole land including the group housing projects inter alia with the following conditions: i. the bidder shall pay the outstanding dues of the Respondent Authority as on the date of submission of the bid; and, ii. the bidder shall be required to complete the incomplete housing projects of the homebuyers on priority basis and deliver the units booked/allotted to them expeditiously on the same terms and conditions already entered by homebuyers with the Petitioner. 14. Given the appreciation in the value of land, the project will not only be viable, but it will also be economically lucrative to prospective bidders. Such rehabilitation will ensure that the homeowners in the group housing projects receive their housing units as expeditiously as possible, and the project is developed anew. 15. Alternatively, the other option for the Respondent Authority is to undertake the development of the housing projects by itself, complete the construction of the housing units and deliver the same to the homebuyers/allottees." 173.....
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....mebuyers and on that basis submissions have been made. 175. Undoubtedly, the homebuyers are one of the major stakeholders in the present dispute. In fact, the main ground which impelled YEA to resort to the extreme step of resumption of the leased land is inordinate delay on part of JAL in abiding by the timelines prescribed for completing the constructions, resulting in immense difficulties to the homebuyers. Further, as noted, YEA has also filed affidavit reiterating its commitment to safeguard the interest of the homebuyers and the steps it would take in this respect. It is therefore necessary to issue directions to ensure that YEA fulfills its commitment and interest of the allottees/homebuyers is protected. 176. The first concern, as noted above, is regarding timely completion of the housing projects. As per pleadings in Writ - C No. 21532 of 2021, JAL was under obligation to deliver the flats/plots to the allottees within 18 - 24 months from the date of allotment. It was around the year 2014 - 2015. Almost five years has elapsed since then. Undoubtedly, a time schedule has to be framed for completion of the housing projects. Accordingly, the following directions are iss....
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.... within four weeks from the date the dispute in writing is received. While taking decision, the Nodal Officer shall have regard to the terms of allotment/agreement and other relevant factors and the documents/records maintained in this regard by JAL or those filed by the allottee. 176(f). For timely execution and completion of the housing projects, YEA shall at all times make available necessary funds irrespective of the sum collected by it from the allottees. This direction is being issued keeping in mind the own stand of YEA that the value of land has appreciated several times and the housing projects would be economically lucrative and viable. 176(g). Any claim of homebuyers against JAL coming within the purview of pending insolvency proceedings before NCLT, including recovery of any sum from JAL in pursuance of any order or direction against JAL will remain protected. 176(h). Any right or remedy available to the homebuyers under the Real Estate (Regulation and Development) Act, 2016 and the Consumer Protection Act, 2019, or under any other law, shall also remain protected. 176(i). In Chitra Sharma (supra) it has been noted in paragraph 44 of the judgment that only 8....
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....ng continuation of sub-leases. 8. The sub-lessees' interests under the sub-lease are thus fully protected and they will be able to enjoy the same without any disruption so long as they continue to comply with the obligations under the sub-lease and also those under the relevant lease with the Respondent Authority under which the sub-lease has been granted, so far as they are applicable to them. This is evident from the correspondence with the sub-lessees. By way of illustration, the correspondence with one such sub-lessee is annexed herewith as Annexure 1. 9. After passing of the Cancellation Order, the sub-lessees have been making payments directly to the Authority, and their sub-leases have not been cancelled." 177(a). Protection of the rights of sub-lessees of JAL is possible only when YEA recognises them as its lessees. For said purpose, YEA shall have to enter into lease agreement with the sub-lessees. Undoubtedly, the terms and conditions should be the same, as between JAL and the sub-lessees subject to right of YEA to recover its dues. As a necessary corollary to the above exercise, YEA would be entitled to retain proportionate sum realised from the ....
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....erent orders. 179(a). It may be noted that Axis Bank and Standard Chartered Bank have also filed impleadment applications on behalf of their respective consortiums and have also been impleaded in the Writ Petition. 179(b). It has been submitted on behalf of the Consortium of Lenders/Financial Institutions that in order to arrange funds for the purpose of, inter alia, meeting the cost of development and operation of the sports infrastructure project of JAL and payment of other liabilities owed by JAL, JAL approached multiple lenders, including ICICI Bank and the Consortium of Lenders, which extended multiple credit facilities to JAL. The credit facilities were secured inter alia: (a) in case of ICICI Bank as the sole lender, by an exclusive mortgage/charge over a part of the leasehold property to the extent of 25 acres, in favour of IDBI Trusteeship Services Limited (acting as Security Trustee to ICICI Bank), vide a deed of mortgage dated July 07, 2014. The land parcels admeasuring 23.5 acres were subsequently released by the security trustee (IDBI Trusteeship Services Limited) in favour of JAL vide a deed of re-conveyance dated June 30, 2017. Thus, at present, land a....
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....the lands sub-leased under the Sub- Lease Deeds, by obtaining the map approvals for the same. While ICICI Bank has made detailed representations in reply to the YEIDA Letters, narrating the challenges in undertaking the construction/ obtaining map approvals, till date ICICI Bank has not received any response/acknowledgement to the response to YEA Letters. 179(g). It is contended that YEA, while it has made submissions on record to protect the interest of sub-lessees, in complete contravention to the same, it has also issued letters threatening to cancel the rights of financial institutions under the Sub-Lease Deeds. Therefore it is submitted that YEA should not be permitted to act in such high- handed manner. 179(h). On the other hand, Shri Manish Goyal, learned Senior Counsel for YEA submitted that JAL being the principal debtor is liable for the loans given by the financial institutions to it. The financial institutions had and will continue to have right to recourse against JAL, the principal debtor, and financial institutions will be entitled to recover their outstanding loans from it. Moreover, JAL besides the leasehold interest in the land, which is the subject matter o....
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....e lease deeds of the said land in time and in case project financing from bank/financial institutions in the said land contains the cost of land then period payments to the authority shall be made before entering into the mortgage deed and or utilizing this mortgage permission, otherwise authority shall be free to take actions considering as a defaulter in payment as stipulated in the lease deed to recover such amounts." 182. The main crux of the argument of learned counsel appearing on behalf of the Financial Institutions and Consortium of Lenders is that the lease, if cancelled, would result in great prejudice to the Financial Institutions. Learned counsel do not dispute that the security interest of the Financial Institutions in the land would come to end by operation of law consequent upon resumption of the site. The same is also admitted in paragraph 32 of the writ petition filed by Suraksha Asset Reconstruction Co. Ltd. (Writ-C No. 8909 of 2021). Thus, the remedy of the Financial Institutions would be against the principal borrower as provided by Section 68 of the Transfer of Property Act, 1882. Further, in view of insolvency proceedings before NCLT, we refrain from making....
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....ect of sub-leases in favour of the financial institutions :- (a) Sub-leases in favour of the financial institutions will stand protected in terms of the impugned order. (b) YEA in order to give effect to its commitment that sub-leases would not get affected, would give option to the financial institutions to obtain lease on same terms and conditions, as between the financial institutions and YEA in their own favour or in favour of their assignee, subject to its right of recovery of dues. (c) The documentation work shall be completed within four weeks from the date, request is made in this behalf by the Financial Institutions for which the outer limit would be twelve weeks from the date of the passing of the instant order. (d) YEA would be entitled to retain sum realized from JAL till the passing of the cancellation order on pro-rata basis. Further Directions: 186. The following amounts shall, within six weeks, be returned by YEA to JAL by transferring the same to the account of RP appointed by NCLT. (1) Any amount deposited by JAL in pursuance of orders passed in the present litigation along with the prevailing interest (SBI PLR) f....
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...., they would not be charged any interest or penalty or any other amount for the said period. (e) YEA will, within four weeks, appoint a Nodal Officer, who should be a gazetted officer (or equivalent) to decide any issue regarding remaining amount payable by homebuyers. The homebuyers will be at liberty to raise grievance regarding the same before him and it shall be decided within four weeks from the date the dispute in writing is received. While taking decision, the Nodal Officer shall have regard to the terms of allotment/agreement and other relevant factors and the documents/records maintained in this regard by JAL or those filed by the allottee. (f) For timely execution and completion of the housing projects, YEA shall at all times make available necessary funds irrespective of the sum collected by it from the allottees. This direction is being issued keeping in mind the own stand of YEA that the value of land has appreciated several times and the housing projects would be economically lucrative and viable. (g) Any claim of homebuyers against JAL coming within the purview of pending insolvency proceedings before NCLT, including recovery of any sum fro....