Aims Sanya Developers Pvt. Ltd. Thru Auth. Sign. Petitioner v. State Of U.P. & Another S

1. In this petition, the following reliefs have been claimed:—

“i) issue a writ of certiorari or a writ, order or direction in the nature of certiorari quashing the letters dated 19.5.2011, 31.5.2011 and 25.7.2011 issued by the respondent no. 2 illegally forfeiting the amount of Rs. 29.60 crores deposited by the petitioner.

ii) issue a writ of mandamus or a writ, order or direction in the nature of mandamus commanding the respondent no. 2 to refund the said amount of Rs. 29.60 crores to the petitioner along with interest @ 18% p.a from the date of payment to the date of refund;

iii) issue a suitable writ, order or direction declaring that Clause-L of the Scheme-2009-10 (Commercial Builders Plot-I) issued by the respondent no. 2, is null and void;

iv) issue such other and further order or direction as this Hon'ble Court may deem fit and proper in the circumstances of the case.

v) award cost of the writ petition to the petitioner.”

2. The facts of the case in brief are that the petitioner is a company incorporated and registered under the provisions of Companies Act, 1956. It traces its origin to a consortium originally formed by M/s. Sanya Developers Pvt. Ltd, M/s. Aims Promoters Pvt. Ltd. and M/s. ABA Builders Ltd. All the companies incorporated and registered under the Companies Act, 1956 for the purpose of participating in the tender process for allotment of commercial plots issued by New Okhla Industrial Development Authority (in short, the NOIDA). The NOIDA had proceeded to float a Scheme 2009-10 (Commercial Builders Plot-I) in the year 2010 inviting sealed “Technical Qualification Bids” and “Financial Bids” for various commercial builder plots in NOIDA, UP on “as is where is basis”.

3. The petitioner company had proceeded to submit its bid for allotment of Plot No. C-171, Sector-15, NOIDA area 25,300 sq. mtrs. The reserve price for the said plot was kept at Rs. 1,17,010/- per square meters and total premium of the plot in question was Rs. 2960353000/-. As per scheme the earnest money of Rs. 10 crores was required to be deposited alongwith bid. The petitioner was qualified in the technical bid and thereafter it was also found to be the highest bidder in the financial bid. On 26.3.2010 the NOIDA had proceeded to allot the plot in question in favour of the petitioner for a total consideration of Rs. 296,035,3000/- and in terms of the allotment letter dated 26.3.2010, the petitioner had proceeded to deposit the earnest money of Rs. 10 crores alongwith its bid. The balance allotment money payable after adjustment of earnest money amounting Rs. 19,60,35300/- was required to be deposited within 60 days of issuance of the allotment letter. The petitioner deposited the remaining allotment money of Rs. 19,60,35,300/- on 24.5.2010

4. Thereafter the petitioner company and the origin constituents of the said consortium entered into a consortium agreement dated 4.12.2010 with M/s. D.S Hotels and Resorts (India) Ltd, a company incorporated and registered under the Companies Act, 1956 whereby the said D.S Hotels and Resorts (India) Pvt. Ltd. inter alia purchased equity shares in the petitioner company. The said consortium agreement has been brought on record. The said consortium vide its letter dated 28.2.2011 inter alia acknowledged the approval accorded by the NOIDA for the induction of M/s. D.S Hotels and Resorts Ltd. as a member of the said consortium. The NOIDA was further requested for a check list and details of other action required to be taken for execution of the lease deed in favour of the petitioner.

5. On 20.5.2011 the petitioner received a letter dated 19.5.2011 from NOIDA making reference to a letter dated 13.5.2011 allegedly written by the petitioner requesting to surrender the plot in question by which the NOIDA had proceeded to inform the petitioner that Clause-L(2) of the tender condition deals with surrender and the petitioner had surrendered the plot after expiry of 30 days from the date of allotment and therefore, necessary action was being taken for forfeiture of the amount deposited by the petitioner with NOIDA. After receiving the said letter the petitioner had immediately proceeded to send a letter dated 23.5.2011 stating that it had proceeded to deposit a huge amount of Rs. 29.60 crores and was remained ready and willing to deposit the balance amount as on that date so that the lease could be executed it its favour. There was no question of surrendering the said plot. The petitioner had proceeded to invest huge money for the development of the plot and had also proceeded to inform to the NOIDA that for the development of the said plot, the petitioner had already appointed a world renowned leasing advisory company as adviser and exclusive leasing agent so that the entire commercial plot could be developed. At no point of time, the said alleged letter dated 13.5.2010 was sent by any authorized signatory of the company. Thereafter various letters were sent by the petitioner company reiterating its request to revoke the surrender orders in respect of the plot in question.

6. Again the NOIDA had initiated process of re-auctioning the plot in question and issued the tender namely Scheme 2011-12 (Commercial Builders Plot-I) on 22.9.2011 inviting technical and financial bids for the said plot with same terms and conditions contained in the earlier tender except that the reserve price of the plot was increased from Rs. 1,17,010/- per sq. mtrs (total Rs. 296,03,53,000/-) to Rs. 1,51,000/- per sq. mtrs. (total Rs. 3,82,03,00,000/-). The petitioner submitted its bid and the bid of the petitioner was again found to be the highest. Accordingly, the petitioner was issued a letter of allotment of the said plot on 29.11.2011 for a total sale consideration of Rs. 382,03,00,000/-. The petitioner made payment in terms of the allotment and thereafter a lease deed has been executed in favour of the petitioner on 25.2.2012

7. Learned counsel for the petitioner has vehemently contended that the respondent no. 2 intentionally and deliberately increased the reserve price as it was aware that the petitioner was genuinely interested for development of the said plot in question and for the said purpose it had also entered into a binding agreement with various 3rd party. The petitioner has already invested huge money for the said plot and had entered into binding agreements with third party, and as such, the petitioner company was facing imminent possibility of failing to honour its obligations under the said agreements. In these circumstances, the petitioner had no other option but to participate in the fresh tender process and as such, without prejudice to their rights and contentions, it had again participated in the tender and submitted its bid. In the subsequent bid, the petitioner was found to be the highest bidder for the property in question. Consequently, the respondent no. 2 had proceeded to issue letter of allotment of the said plot on 29.11.2011 for a total sale consideration of Rs. 382,03,00,000/-. The petitioner has made payment in terms of the allotment letter and thereafter a lease deed was executed in favour of the petitioner on 25.2.2012

8. Learned counsel for the petitioner further submits that from very beginning the petitioner was genuine player of the field and had rightly proceeded to participate in the first auction and had deposited the requisite amount of Rs. 29.60 crores and being as the highest bidder the allotment letter was issued. The petitioner has disputed the factual aspect that at no point of time the petitioner had proceeded to move any application for surrender of the plot in question and as such, there was no occasion for forfeiture of the amount in question. The NOIDA is illegally and arbitrarily withholding the payment of Rs. 29.60 crores deposited the petitioner pursuant to the first allotment and this Court should come for rescue and reprieve of the petitioner and a direction may be issued for return of the said amount in question.

9. Per contra, Shri. Shivam Yadav, learned counsel appearing for the NOIDA has vehemently opposed the writ petition on the ground that the petitioner failed to comply with the terms and conditions of the first allotment letter. Thereafter the purported letter dated 13.5.2010 was presented by an authorized signatory of the petitioner and the NOIDA had proceeded to accept the same as per the terms and conditions of the allotment. Since the petitioner had surrendered the plot in question and the same was brought for allotment under the Scheme 2011-12 (Commercial Builders Plot-I). The increase in reserve price was not intentional or deliberate but natural course. The petitioner again participated in the re-auctioning of the plot in question and accepted the terms and conditions. The bid of the petitioner was found to be the highest and the letter of allotment of the said plot was issued on 29.11.2011 Once the petitioner has agreed with the new terms and conditions of the re-auctioning of the plot, the previous terms and conditions of surrendered plot automatically ceased. Since the amount of Rs. 29.60 crores paid by the petitioner against the previous allotment was forfeited as per terms and conditions of the allotment, there was no question of its refund to the petitioner and there was no reason to consider the said request of the petitioner.

10. It has been submitted on behalf of the NOIDA that the petitioner applied for surrender of the plot in question and therefore as per terms of the allotment, the request for surrender was accepted and the amount deposited by the petitioner was forfeited as per terms of the allotment. Once the plot had become available for re-allotment, the same was again auctioned under the new Scheme. There was no need to give any consideration to the request made by the petitioner after surrendering the plot in question. Clause-L of the Scheme document provided for forfeiture of the amount deposited by the petitioner and the said action was strictly in consonance with the scheme in question. The petitioner is also disputing the letter dated 13.5.2011, which cannot be answered by this Court under Article 226 of Constitution of India and as such, the writ petition is liable to be dismissed.

11. We have considered the rival submissions made by the learned Counsel for the parties and have perused the record.

12. The tender/scheme documents contained detailed terms and conditions of the allotment of the plots. Para (1) of Clause-C (Eligibility) of the said tender/scheme provided that any proprietor or partnership firm, private or public limited company or a consortium of any of the above, can submit tender and the firms and the companies should be registered in India. As per para (1) of Clause-F (Acceptance of Tender) of the tender/scheme, technical qualification bids for the tenders were to be submitted by the prospective bidders by 22.3.2010 Clause-G (Payment) of the tender/scheme document provided that the successful bidder would be issued an allotment letter and the allottee would have to deposit a sum equivalent to 10% of the tendered amount after adjusting the earnest money within 60 days from the date of issuance of the allotment letter. It also provided that in case of failure to deposit the said amount within time, the allotment would stand cancelled and the entire earnest money deposited shall be forfeited in favour of NOIDA. Clause G(4) of the tender provided that there would be a moratorium of 24 months from the date of allotment and only the interest @ 11% per annum compounded half yearly accrued during the moratorium period shall be payable in half yearly instalments. Para (8) of Clause-G proceeds to make a mention that in case of default, the allotment offer will be considered as cancelled without any further notice and the amount equivalent to earnest money shall be forfeited. No interest will be paid on such amounts. However, this is subject to Clause ‘H’ of the said document. Clause-H deals with extension of time. Relevant Clauses G & L of the tender/scheme are reproduced hereinafter:—

“G. PAYMENT

1. All payment should be made through a demand draft/pay order drawn in favour of” NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY” and payable at any scheduled bank located in New Delhi/Noida. The applicant/allottee should clearly indicate his name and details of plots applied for/allotted on the reverse of the demand draft/pay order.

2. Successful tenderer shall be issued allotment letter by registered post. The allottee will have to deposit 10% of the tendered amount, after adjustment of earnest money, through bank draft drawn in favour of” NOIDA” payable at NOIDA/New Delhi/Delhi within 60 days from the date of issue of allotment letter, through prescribed challan available in the banks mentioned in the allotment letter and submit the copy of the deposited challan(s) in Commercial Department of NOIDA. In case of failure to deposit this amount within time, the allotment will stand cancelled and the entire earnest money deposited shall be forfeited in favour of NOIDA.

3. The allotee shall also deposit due stamp duty (Stamp duty calculation should also be got verified from the concerned Sub-Registrar, Gautam Budh Nagar by the allotee himself/themselves) for lease deed in treasury of District Gautam Budh Nagar and should produce a certificate to that effect in Commercial Department Noida within 60 days from the issue of allotment letter.

4. There shall be a moratorium of 24 months from the date of allotment and only the interest @ 11% per annum compounded half yearly, accrued during the moratorium period, shall be payable in half-yearly instalments. After expiry of the moratorium period, the balance 90% premium of the plot along with interest will be paid in 16 half yearly instalments along with interest.

5. In case of default in depositing the instalments or any payment, interest @ 14% compounded half-yearly shall be leviable for defaulted period on the defaulted amount.

6. Premium referred to in this document means total amount payable to the Authority for the allotted plot.

7. All payments should be remitted by due date. In case the due date is a bank holiday then the allottee should ensure remittance on the previous working day.

8. In case of default, the allotment offer will be considered as cancelled without any further notice and the amount equivalent to earnest money shall be forfeited. No interest will be paid on such amounts. However, this is subject to Clause ‘H’ of this document.

9. The payment made by the allottee will first be adjusted towards the interest due, if any, and thereafter the balance will be adjusted towards the lease rent payable and the premium due.

10. Lease rent shall be paid in accordance with Clause-M of this document.

11. In case of allotment of additional land, the payment of the premium of the additional land shall be made in lump sum within 30 days from the date of communication of the said additional land as per prevailing policy of NOIDA”.

L. SURRENDER

1. The allottee can surrender the plot within 30 days from the date of allotment. In such case, earnest money deposited will be forfeited in total and the balance, if any, deposited against the premium of plot, will be refunded without interest.

2. In case the plot is surrendered after 30 days from the date of allotment, the total deposited amount or 30% of total premium, whichever is less, will be forfeited and the remaining amount will be refunded without interest. However, the amount deposited towards lease rent, interest extension charges etc. shall not be refunded.

NOTE: The date of surrender in the above case shall be the date on which the application for surrender is received at NOIDA's office. No subsequent claim on the basis of any postal certificate etc. will be entertained.”

13. We have proceeded to examine the record in question and find that the facts are not disputed between the parties. In terms of the allotment letter, the earnest money of Rs. 10 crores was deposited by the petitioner alongwith tender form and remaining 10% of allotment money of Rs. 29,60,35,300/- had to be deposited toward the balance allotment money after adjusting the earnest money deposited alongwith tender form. This much is admitted situation that as per schedule, which was appended alongwith the allotment letter dated 26.3.2010, the petitioner had not deposited the instalments on due dates. It is relevant to indicate that due date of moratorium interest for 1st half year was 26.9.2010 with interest @ 11% Rs. 14,65,37,473.50 and in the same manner, the due dates of moratorium interest for 2nd, 3, and 4th half yearly were also categorically given and the first instalment towards the cost of the plot in question had to commence w.e.f 26.9.2012 As per record it is not disputed that the petitioner had proceeded to deposit the moratorium interest for 1, 2nd, 3 and 4 half yearly and the first instalment towards the cost of the plot in question which had to commence w.e.f 26.9.2012

14. For deciding the present controversy in question it would be appropriate to re-produce the relevant portion of the allotment letter dated 26.3.2010, which reads as under:—

“With reference to your bid/tender dated 22 March, 2010, we are pleased to inform you that your tender has been accepted by the competent authority & Plot No. C-171 Sector-15 is being allotted to you as per details given below:—

Property typeCommercial Builder Plot1Allotment modeSealed Bid/Tender2Plot No./SectorC-171, Sector-153Area of Plot25300 sqm.4Tender/bid price Per Sqm.Rs. 1,17,010.005Total Premium of plotRs. 2,96,03,53,000.006Earnest Money deposited alongwith tender formRs. 10,00,00,000.007Allotment Money-10%Rs. 29,60,35,300.008Balance allotment money payable after adjustment of earnest money deposited as per sl. No. 7 aboveRs. 19,60,35,300.009Payment modeInstalment basis10Balance 90% premium payable in 16 equal half yearly instalments alongwith interestRs. 2,66,43,17,700.0011One year lease rent @ 1/- per sqm. From 1 to 3 yearRs. 25,300.0012One year lease rent @ 1% of total premium (from 4 to 10 year) - thereafter the same may be increased as per terms of schemeRs. 2,96,03,530.0013Legal documentation chargesRs. 50/-14Stamp duty @ 5% as applicable as on date (the same may be got verified from Sub Registrar, Sector-33, NOIDA)Rs. 16,43,00,000.00

You are requested to deposit allotment money Rs. 196035300 through challans available in Vijay Bank, Sector VI, Noida or Union Bank of India, Sector 62 Noida or HDFC Bank, Sector-18 Noida within 60 days from the date of issue of this letter i.e by 24 May, 2010, failing which action as per terms and conditions of the brochure shall be taken. Detailed calculation sheet is being enclosed. The other terms and conditions of allotment shall remain the same as specified in the brochure of the scheme and shall be binding on the allottee.

You are also required to submit the stamp paper within 60 days from the date of allotment, take action to execute the leaws deed & take over possession within 120 days from the date of issue of this letter i.e by 23 July, 2010, failing which action shall be taken as per terms and conditions.”

15. The details regarding each instalment and due date are also extracted as under:—

“Detail of each installment & due date

Installment no.Due datePrincipal amountInterest @ 11%TotalMoratorium interest for 1 half yearly26/09/10146537473.5146537473.5Moratorium interest for 2 half yearly26/03/11146537473.5146537473.5Moratorium interest for 3 half yearly26/09/11146537473.5146537473.5Moratorium interest for 4 half yearly26/03/12146537473.5146537473.5126/09/12166519856.25146537473.5313057329.75226/03/13166519856.25137378881.4303898373.65326/09/13166519856.25128220289.31294740145.56426/03/14166519856.25119061697.21285581553.46526/09/14166519856.25109903165.12276422961.37626/03/15166519856.25100744513.03267264369.28726/09/15166519856.2591585920.93258105777.18826/03/16166519856.2582427328.84248947185.09926/09/16166519856.2573268736.752397885931026/03/17166519856.2564110144.65230630000.91126/09/17166519856.2554951552.56221471408.811226/03/18166519856.2545792960.46212312816.711326/09/18166519856.2536634368.37203154224.621426/03/19166519856.2527475776.28193995632.531526/09/19166519856.2518317184.18184837040.431626/03/20166519856.259158592.09175678448.34

16. What we find from the record in question is that the NOIDA on the basis of purported letter dated 13.5.2011 had proceeded to cancel the allotment of the plot in question and forfeited the amount. The said action is also justified under the background that admittedly the petitioner had proceeded to deposit only meagre amount of 10% of the allotment money and as per the allotment letter dated 26.3.2010 it was incumbent upon the petitioner to deposit the remaining 90% premium payable in 16 equal half yearly instalments alongwith interest and moratorium interest for 1 half yearly @ 11% amounting to Rs. 146537473.5 was due on 26.9.2010; 2 moratorium interest half yearly of equal amount was payable on 26.3.2011; 3 moratorium interest half yearly of the same amount was payable on 26.9.2011 and 4 moratorium interest half yearly of equal amount was also payable on 26.3.2012 and thereafter the first instalment was due on 26.9.2012 total amounting Rs. 313057329.75

17. This much is admitted situation that in pursuance of the aforesaid allotment letter the petitioner had not proceeded to deposit the aforesaid amount on time and in such eventuality there was provision for forfeiture. In this background on account of certain binding agreement with various 3 party, conscious decision was taken by the petitioner and the petitioner had proceeded to claim its stake in the second bid and being as highest bidder the petitioner was successful in second bid and consequently entered into an agreement with the NOIDA. Thereafter, the possession had also been handed over to them way back and the present writ petition had been filed after much delay in the year 2014 asking for refund of the allotment money which was paid by the petitioner in pursuance of the first allotment. Once this is the factual situation that admittedly except deposit of 10% allotment money the petitioner at no point of time was inclined to deposit the requisite amount in terms of the allotment, then the submission, that the petitioner company had never proceeded to submit the application dated 13.5.2011 for surrender of the plot, would not be of any help to the petitioner under the present facts and circumstances.

18. In Prasun Roy v. Calcutta Metropolitan Development Authority, (1987) 4 SCC 217 : AIR 1988 SC 205, the Hon'ble Apex Court held that the principle is that a party shall not be allowed to blow hot and cold simultaneously. Long participation and acquiescence in the proceeding preclude such a party from the contending that the proceedings were without jurisdiction. Paragraphs 6, 7 and 8 of the said judgment are quoted hereinunder:—

“6. Mr. Kacker submitted that this principle could be invoked only in a situation where the challenge is made only after the making of an award, and not before. We are unable to accept this differentiation. The principle is that a party shall not be allowed to blow hot and cold simultaneously. Long participation and acquiescence in the proceedings preclude such a party from contending that the proceedings were without jurisdiction.

7. Russel on Arbitration, 18 Edition page 105 explains the position as follows:

“If the parties to the reference either agree beforehand to the method of appointment, or afterwards acquiesce in the appointment made, with full knowledge of all the circumstances, they will be precluded from objecting to such appointment as invalidating subsequent proceedings. Attending and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquiescence.”

19. The Judicial Committee in decision in Chowdhury Murtaza Hossein v. Mussumat Bibi Bechunnissa (1876) 3 Ind App 209 observed at p. 220:

“On the whole, therefore, their Lordships think that the appellant, having a clear knowledge of the circumstances on which he might have founded an objection to the arbitrators proceedings to make their awards, did submit to the arbitration going on; that he allowed the arbitrators to deal with the case as it stood before them, taking his chance of the decision being more or less favourable to himself; and that is too late for him, after the award has been made, and on the application to file the award, to insist on this objection to the filing of the award.”

20. Relying on the aforesaid observations this Court in N. Chellappan v. Secy, Kerala State Electricity Board, (1975) 1 SCC 289 : (AIR 1975 SC 230) acted upon the principle that acquiescence defeated the right of the applicant at a latter stage. In that case the facts were similar. It was held by conduct there was acquiescence. Even in a case where initial order was not passed by consent of the parties a party by participation and acquiescence can preclude future challenges.”

21. In the case of Durga Charan Rautray v. State of Orissa, (2012) 12 SCC 513, in paragraph 16 the Hon'ble Apex Court held that once the disputes raised by appellant were referred for arbitration and the rival parties submitted to the arbitration proceedings without any objection, it is no longer open to either of them to contend that arbitral proceedings were not maintainable.

22. In Construction India v. The Secretary, Works Department, Government of Orissa, (1998) 2 SCC 89, the Hon'ble Apex Court held that a conscious acquiescence on the part of the respondents in the continued jurisdiction of the arbitrator, it is no longer open to them to challenge the same on the ground of jurisdiction. In this case also (as in the case in hand) the appointment of arbitrator was by name and he continued even after he was no longer Chairman of Orissa Arbitration Tribunal. The decision of the Hon'ble Apex Court in Prasun Roy v. Calcutta Metropolitan Development Authority, AIR 1988 SC 205 : (1987) 4 SCC 217 is also cited with approval in paragraph 13 of this decision. Paragraph 6 of the said judgment is quoted hereinunder:—

“6. The order of appointment clearly shows that the appointment of Shri. G.S Patnaik, Chairman of the Orissa Arbitration Tribunal, is of a named arbitrator. The order of appointment does not qualify this appointment either by prescribing that he can act as an arbitrator so long as he continues as Chairman of the Orissa Arbitration Tribunal; nor is there any implication to this effect in the Sub-Court's order. The reference to arbitration is also not to the Orissa Arbitration Tribunal. This would require three members constituting the Tribunal to sit together. Therefore, it is difficult to hold that the arbitrator who was named was to act as an arbitrator only so long as he held the office of the Chairman of the Orissa Arbitration Tribunal. The parties may choose an arbitrator for various reasons. They may rely on his expertise or his special skills at the time when they choose the arbitrator. According to the respondents they agreed to the name because there were departmental instructions to refer disputes to the arbitration of any member of the Orissa Arbitration Tribunal. But when the arbitrator is named, unless there is a clear intention spelt out in the agreement of reference to indicate that he would continue to be an arbitrator only so long as he holds a particular office, a mere reference to the office held by the arbitrator will not disqualify him from being an arbitrator after he ceases to hold that office. The arbitrator, therefore, had jurisdiction to give the awards.”

23. Once such is the factual situation that the petitioner is raising question of fact regarding the genuineness of the letter dated 13.5.2011 for surrender of the plot in question and the respondents are submitting that as per terms of the first allotment, the request for surrender was accepted and the amount deposited by the petitioner was forfeited and the same plot in question was again brought for allotment in which the petitioner participated and agreed with the new terms and conditions of the re-auctioning of the plot, then there was no question of refund of the amount in question. Such disputed fact cannot be raised in the writ jurisdiction under Article 226 of Constitution of India.

24. The writ petition sans merit and is accordingly dismissed.