GWALIOR DEVELOPMENT AUTHORITY AND ANOTHERversusBHANU PRATAP SINGH

498                      [2023]REPORTS
               SUPREME COURT    3 S.C.R. 498              [2023] 3 S.C.R.


A       GWALIOR DEVELOPMENT AUTHORITY AND ANOTHER
                                       v.
                          BHANU PRATAP SINGH
                        (Civil Appeal No. 8549 of 2014)
B                               APRIL 19, 2023
             [AJAY RASTOGI AND BELA M. TRIVEDI, JJ.]
             Constitution of India – Article 226 – Registered lease deed –
      Alteration/amendment u/Article 226 – Impermissibility of – Appellants
      invited bids in 1997 for grant of leases of different plots under the
C
      transport city scheme – Respondent’s offer for 27887.50 sq. meters
      @ Rs.725/- per sq. meter was accepted and the aforesaid plot area
      was leased out in his favour for Rs.2,06,67,966/- to be paid in four
      instalments after making the advance payment of Rs.15 lakhs as
      earnest money – Instalments were to be deposited by October 1999 –
D     However, respondent deposited the final instalment in August 2005 –
      After negotiations, lease deed was finally executed in March 2006
      but for the reduced land of 18262.89 sq.meters rather than the
      total land of 27887.50 sq. meters – Respondent filed writ petition
      seeking mandamus against the appellants to execute the lease deed
      for the remaining area of land i.e.9625.50 sq. meters – Allowed –
E
      Correctness of – Held: Parties got the lease deed executed for
      18262.89 sq. meters without demur in March 2006 and the
      transaction which was initiated pursuant to the tender floated by
      the appellant in 1997 stood concluded after execution of the lease
      deed – Thus, after the transaction was concluded and the instrument
F     was registered u/s.17 of the Registration Act, it was not open to be
      altered or amended even by the High Court in exercise of its
      jurisdiction u/Article 226 – Mandamus issued by the High Court to
      execute the lease deed for the remainder of the area is beyond
      jurisdiction and contrary to law – Impugned judgment set aside–
      Registration Act, 1908 – s.17.
G
             Constitution of India – Article 14 – Violation of – Undue
      indulgence granted by appellant-Authority – Held: There is no
      justification as to what was the reason for the Authority to grant
      undue indulgence to the respondent in depositing the instalments
      which ought to have been deposited by 31.10.1999 but were
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                                      498
    GWALIOR DEVELOPMENT AUTHORITY AND ANR. v.                               499
               BHANU PRATAP SINGH

deposited upto 25.08.2005 – In the ordinary course of business,             A
the auction was supposed to be cancelled and the earnest money
deserved to be forfeited – Such exercise of power by the Authority
is a clear abuse of discretion which is not only violative of Art.14,
but also smacks of an undue favour which is always to be avoided
– Whenever there is such a business/commercial transaction, it is
                                                                            B
always to be examined on the commercial principles where equity
has no role to play.
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8549
of 2014.
     From the Judgment and Order dated 21.04.2011 of the High Court         C
of Madhya Pradesh Bench at Gwalior in WP No. 2792 of 2009.
       Sanjay Hegde, Sr. Adv., Rajesh Kandari, Vikrant Singh Bais, Advs.
for the Appellants.
     Varun K. Chopra, Rohin Oza, Mehul Sharma, Dipu Jha, Harsh
Khabar, M/s VKC Law Offices, Advs. for the Respondent.                      D
      The Judgment of the Court was delivered by
      RASTOGI, J.
      1. The instant appeal is directed against the judgment and order
dated 21st April, 2011 passed by the Division Bench of the High Court of    E
Madhya Pradesh, Bench at Gwalior with the following directions:
      i)     The Respondents are directed to execute the lease deed in
             favour of the petitioner of remaining area of the land i.e.
             9625.50 sq. mtr. in accordance with the acceptance of his
             offer of total plot area 27887.50 sq. mtr.                     F
      ii)    The petitioner shall be liable to make payment of interest
             from 17.8.2001 upto 29.3.2006 when the lease deed was
             executed in favour of the petitioner excluding the period of
             27.5.2004 to 29.3.2005.
      iii)   The Respondents are at liberty to calculate the amount of      G
             interest accordingly after verification of the amount which
             has been paid by the petitioner.
      iv)    The order be complied with within a period of three months
             from the date of receipt of the copy of the order.
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500                SUPREME COURT REPORTS                       [2023] 3 S.C.R.


A            2. The facts of the case culled out from the record are that the
      appellants, according to the land disposal rules, issued an advertisement
      and invited bids for grant of leases of different plots under the transport
      city scheme. The respondent was also one of the bidders for MC-2
      (Market Complex-2) plot area 27887.50 sq. meters. The offer of the
      respondent @Rs.725/- per sq. meter being the highest bid was finally
B
      accepted. Consequently, a letter of allotment dated 29th September, 1997
      was issued in favour of the respondent whereby it was informed that the
      bid of the respondent was found to be the highest and it had been decided
      to lease out the plot area of 27887.50 sq. meters in his favour for a
      consideration of Rs.2,06,67,966/- and the auction bidder/respondent was
C     directed to deposit a sum of Rs.1,91,67,966/- upto the period of 31 st
      October, 1999 in addition to the earnest money of Rs.15 lakhs in four
      instalments in the following manner:
            (i)      Rs.51,66,922/- by 31.10.1997 (for 25% amount)
            (ii)     Rs.51,66,922/- by 30.06.1998 (for first instalment)
D
            (iii)    Rs.51,66,922/- by 28.10.1999 (for second instalment)
            (iv)     Rs.36,36,990/- by 31.10.1999 (for third instalment)
            3. The letter of allotment contained a rider that the market complex
      has to be constructed in accordance with the sanctioned plan by the
E     Gwalior Development Authority (hereinafter being referred to as the
      “Authority”) and construction work has to be completed within the period
      of two years with a further stipulation that failure to deposit the
      instalments in terms of the conditions of the bid document, the security
      amount shall be forfeited.
F            4. It is not disputed that the respondent deposited a total sum of
      Rs.2,02,18,437/- from September, 1997 to the last instalment on 25th
      August, 2005. The amount deposited by the respondent on various dates
      be stated as under:
            1        27.9.1997              Rs.    15,00,000.00
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            2        6.11.1997              Rs.     2,00,000.00
            3        31.12.1997             Rs.     3,00,000.00
            4        17.4.1998              Rs.     5,00,000.00
            5        22.1.2003              Rs.    16,00,000.00
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    GWALIOR DEVELOPMENT AUTHORITY AND ANR. v.                                  501
       BHANU PRATAP SINGH [AJAY RASTOGI, J.]

      6      30.1.2003                Rs.     3,00,000.00                      A
      7      30.1.2003                Rs.     2,00,000.00
      8      31.12.2001               Rs.     5,00,000.00
      9      19.12.2003               Rs.     5,00,000.00
      10     12.4.2004                Rs.    10,00,000.00                      B
      11     27.2.2004                Rs.    10,00,000.00
      12     5.1.2004                 Rs.    10,00,000.00
      13     25.8.2005                Rs. 1,16,18,437.00
                                                                               C
             Total                    Rs. 2,02,18,437.00

        5. It reveals from the record that, in the meanwhile, the respondent
requested for revising the layout plan in order to enable to deposit the
requisite amount with the Authority and the layout plans were also revised,
but finally the amended layout plan was accepted by the Authority on           D
17th August, 2001. It is also not disputed that despite the respondent
failed to deposit the instalments in terms of conditions of the bid document
by 31st October, 1999 and the final amount being deposited on 25th August,
2005, no action was taken by the appellants either for cancellation of the
bid or for forfeiture of the amount deposited by the respondent and what
                                                                               E
transpires between the parties is not made available on record but the
fact is that the lease deed was finally executed for 18262.89 sq. meters
on 29th March, 2006 to the extent of principal amount of Rs.1,32,39,356/
- @Rs.725/- per sq. meter plus the component of interest for the said
amount for the delay in deposit of Rs.69,97,087/- total Rs.2,02,18,437/-
and the lease deed was executed by the respondent without any demur.           F
We do not find any justification as to what was the reason for the Authority
to grant such undue indulgence to the respondent in depositing the
instalments which ought to have been deposited by 31 st October, 1999
but were deposited upto 25th August, 2005, be that as it may, it appears
that after some round table negotiations to the extent of principal amount
                                                                               G
it was adjusted against the auction bid and balance to be adjusted towards
interest, the total land which was put to public auction of 27887.50 sq.
meters, was reduced to 18262.89 sq. meters and with the consent of
parties and without any demur, the lease deed was executed on 29th
March, 2006.
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502             SUPREME COURT REPORTS                            [2023] 3 S.C.R.


A            6. After more than a period of three and half years, the writ petition
      came to be filed by the respondent under Article 226 of the Constitution
      seeking a mandamus against the appellants to execute the lease deed
      for the remaining area of 9625.50 sq. meters in addition to the lease
      earlier executed in favour of the respondent and the Division Bench of
      the High Court while accepting the prayer made by the respondent,
B
      directed the appellants to execute the lease deed in favour of the
      respondent for the remaining area of 9625.50 sq. meterswithout any
      consideration with liability on the respondent to make payment of interest
      for the period 17th August, 2001 upto 29th March, 2006, the day when
      the lease deed was executed in favour of the respondent, excluding the
C     period of 27th May, 2004 to 29th March, 2005. As a matter of fact, no
      additional consideration was required to be paid by the respondent except
      the interest for the interregnum period of which reference has been
      made under the impugned judgment and that became the subject matter
      of challenge at the instance of the Authority in the instant appeal.
D            7. Notices were issued by this Court on 4th January, 2012 and
      after hearing the parties, leave was granted on 5th September, 2014.
             8. It reveals from the record that at one point of time, it was
      informed to this Court that there is a possibility of settlement of dispute
      between the parties, which reflects from the order of this Court dated
E     27th August, 2019, but later, it reveals from the order dated 4th May,
      2022, that counsel for the respondent on instructions informed this Court
      that the circle rate fixed by the State Government in reference to the
      subject land in question is not viable and is much higher than the market
      value of the subject property as on that day for commercial use. As no
      settlement was arrived at between the parties, the matter was finally
F     heard and arguments stood concluded on 13th April, 2023.
            9. Learned counsel for the respondent informed this Court that on
        th
      16 March, 2023, although it was not reflected in the order, the respondent
      was called upon as to whether the prevalent circle rate in reference to
      the subject property in question is acceptable, the appellant Authority
G     can be called upon to examine, but we find from the record that there
      was no such order as referred to by the respondent’s learned counsel,
      the fact is that whatever circle rate prevalent at the relevant point of
      time of which we have made a reference, was not considered to be
      viable by the respondent and once this amicable resolution has failed,
H     the matter was being heard on merits.
    GWALIOR DEVELOPMENT AUTHORITY AND ANR. v.                                    503
       BHANU PRATAP SINGH [AJAY RASTOGI, J.]

       10. Shri Sanjay Hegde, Senior Advocate appearing for the                  A
appellants, submits that undue indulgence was granted to the respondent
and the last instalment which was to be made over by the respondent by
31st October, 1999 was finally paid by 25th August, 2005. Although, in
the ordinary course, since the conditions of bid were not complied with
by the respondent (successful bidder), the auction ought to have been
                                                                                 B
cancelled, but the Authority after due deliberations, in the peculiar facts
and circumstances, granted indulgence to the respondent and taking into
consideration the fact that the last instalment was deposited by him on
25th August, 2005, with a break-up of principal amount and the component
of interest thereof, the lease deed was duly executed between the parties
without demur, obviously with the consent of the parties, as they are            C
signatories to the document/instrument for 18262.89 sq. meters which
was executed on 29th March, 2006.
       11. Learned senior counsel further submits that the auction
proceedings which were initiated at the first instance on 13thMarch, 1997,
finally culminated into execution of the lease deed without demur for            D
18262.89 sq. meters on 29th March, 2006 and the transaction has attained
finality. There was no reason or justification for the respondent to open
the transaction which was finally concluded on execution of the lease
deed,with no cause of action subsisting filed a writ petition under Article
226 of the Constitution and that too after three and half years of the
execution of the lease deed on 29th March, 2006.                                 E

       12. Learned counsel submits that the High Court has committed a
serious manifest error in completely overlooking the fact that once the
lease deed was executed without demur on 29th March, 2006 and the
transaction initiated pursuant to a tender floated by the Authority on
13thMarch, 1997finally concluded by execution of the lease deed without          F
demur and that being a pure business/commercial transaction entered
with the open eyes, there was no justification available to invoke the
jurisdiction under Article 226 of the Constitution with a direction to execute
the lease deed for the remaining area of land i.e. 9625.50 sq. meters
without any consideration and that amounts to amendment in the                   G
instrument which was duly registered and an amendment in the instrument
was not permissible in law even under the jurisdiction of the High Court
under Article 226 of the Constitution.
       13. Learned counsel, on instructions, submits that the land available
at the disposal of the Authority is always to be put to commercial use           H
504             SUPREME COURT REPORTS                            [2023] 3 S.C.R.


A     and disposed of in terms of the land disposal rules, but in the peculiar
      facts of the case, the Authority may consider the claim of the respondent
      if they are interested for the remaining area of land i.e. 9625.50 sq.
      meters on the prevalent circle rate if acceptable, only to give a quietus to
      the dispute which is pending for quite a long time, failing which the only
      option left with the Authority is to dispose of the area of land admeasuring
B
      9625.50 sq. meters in accordance with land disposal rules.
             14. Per contra, learned counsel for the respondent, while supporting
      the finding recorded by the High Court, submits that once the tender
      was floated by the appellants for 27887.50 sq. meters and the bid of the
      respondent @Rs.725/- per sq. meter was the highest in September, 1997
C     and accepted by the Authority and the last instalment of 25 th August,
      2005 was accepted, there was no justification available with the appellant
      to segregate and sever the land which was put to auction into two parcels
      and the very execution of the lease deed for 18262.89 sq. meters on 29th
      March, 2006 and keeping away the remainder of the land and not taking
D     any action thereof, has compelled the respondent to invoke the jurisdiction
      of the High Court by filing a petition under Article 226 of the Constitution
      and the appellant being the public Authority and a State within the meaning
      of Article 12 of the Constitution, it is always expected to act fairly even
      in the business/commercial transactions and as there was denial of the
      legitimate right conferred to the respondent and the interests of the
E     appellants have been fully secured by putting the liability on the respondent
      to pay interest for the interregnum period and that is the only equitable
      way in balancing the right and interest of the parties inter se and in the
      circumstances no error was committed by the High Court which calls
      for interference of this Court.
F           15. We have heard counsel for the parties and with their assistance
      perused the material on record.
             16. It is not in dispute that the tender was originally floated by the
      appellants on 13th March, 1997 and the respondent was a successful
      bidder and submitted his offer for 27887.50 sq. meters @ Rs.725/- per
G     sq. meter for a total value of Rs.2,06,67,966/- which was to be paid in
      four instalments and after making the advance payment of Rs.15 lakhs
      as earnest money, the remaining four instalments were to be deposited
      on 31st October, 1997, 30th June, 1998, 28th October, 1999 and the last
      instalment by 31st October, 1999. Admittedly, the respondent deposited
H     the amount in piecemeal and not in terms of the instalments, as agreed,
    GWALIOR DEVELOPMENT AUTHORITY AND ANR. v.                                 505
       BHANU PRATAP SINGH [AJAY RASTOGI, J.]

which was in terms of the conditions of the tender document and the           A
final instalment was deposited in reference to the auction bid by 25th
August, 2005.
       17. In the ordinary course of business, as the respondent has failed
to deposit in terms of the tender document, the last instalment by 31 st
October, 1999, the auction was supposed to be cancelled and the earnest       B
money deserved to be forfeited. We find no reasonable justification in
the present facts and circumstances as to what would be the reason for
undue indulgence being shown to the respondent while extending him
the benefit to deposit the instalment by 25th August, 2005 and we have
our strong reservations and such exercise of power by the Authority, in
                                                                              C
our view, is a clear abuse of discretion which is not only violative of
Article 14 of the Constitution, but also smacks of an undue favour which
is always to be avoided and whenever there is such a business/
commercial transaction, it is always to be examined on the commercial
principles where equity has no role to play. Be that as it may, as much
water has flown in the Ganges, we would not like to stretch it any further.   D
       18. However, the fact is that the parties sitting across the table,
got the lease deed executed for 18262.89 sq. meters without demur on
29th March, 2006 and the transaction stood concluded after execution of
the lease deed, which was initiated pursuant to a tender floated by the
appellant on 13th March, 1997and since the lease deed was to be               E
compulsorily registered under Section 17 of the Registration Act, 1908,
it was nowhere open to be altered or amended even by the High Court
in exercise of its jurisdiction under Article 226 of the Constitution.
       19. The High Court under impugned judgment has although passed
a very lengthy order, but the judgments on which reliance has been placed     F
have no semblance to the facts of the instant case and natural justice
has no role to play in the given facts and circumstances, of which
reference has been made. In our considered view, the judgment passed
by the High Court in issuing a mandamus to execute the lease deed in
favour of the respondent for the remaining area of 9625.50 sq. meters is
                                                                              G
completely beyond jurisdiction and such directions, in our view, being
contrary to law deserve to be set aside.
       20. The submission made by the respondent that the tender floated
by the appellants on 13th March, 1997 was called upon to the bidders to
submit their bid for 27887.50 sq. meters and which could not have been
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506             SUPREME COURT REPORTS                            [2023] 3 S.C.R.


A     segregated, more so after the bid has been finalized @Rs.725/- per sq.
      meter and that alone has been taken care of by the High Court by directing
      to execute the lease deed for the remainder of the land, in our considered
      view, is bereft of merit for the reason that so far as the tender floated by
      the Authority on 13th March, 1997 is concerned, the transaction was
      concluded on execution of the lease deed executed without demur for
B
      18262.89 sq. meters on 29th March, 2006 and after the transaction is
      concluded and the instrument being registered under the law, it was not
      open to either party to question at least in the writ jurisdiction of the High
      Court under Article 226 of the Constitution and the mandamus issued by
      the High Court to execute the lease deed for the remainder of the area
C     without any consideration is completely contrary to the settled principles
      of law and deserves to be set aside.
             21. Learned counsel for the respondent further submits that
      although at one point of time they have not been able to consider the
      remainder of the land in reference to which the High Court has directed
D     for execution of the lease deed viable as per the circle rate fixed by the
      State Government, but later on, they revisited and took a decision to take
      the remainder of the land independently on the circle rate fixed by the
      State Government as it was on 16th March, 2023, but in our considered
      view, once the negotiations have failed and the respondent has shown
      his inability for taking the remainder of the land on the circle rate notified
E     by the State Government not considered to be viable, it is always open
      for the parties to negotiate afresh and settle, if advised, but it may not be
      available to the respondent on the prevalent circle rate notified by the
      government/competent authority.
             22. Before we conclude, we would like to observe that the litigation
F     is pending for sufficiently long time and keeping in view the escalation in
      the value of the property in question based on commercial principles, we
      consider it appropriate to observe that the respondent being originally
      the bidder for the remainder of the land as well, let one opportunity be
      made available to the respondent for the remainder of the area on priority
G     basis on the prevalent circle rate notified by the Government.
              23. It is informed that the remaining area at the relevant time was
      9625.50 sq. meters, but certain developments have taken place and part
      of the land has been used for public purpose and as on today the remaining
      area of the land is less than what is being reflected in the impugned
H     judgment. Taking that into consideration, we make it clear that let the
     GWALIOR DEVELOPMENT AUTHORITY AND ANR. v.                                  507
        BHANU PRATAP SINGH [AJAY RASTOGI, J.]

first opportunity be afforded to the respondent to purchase the remaining       A
area of the land which was a part of the land originally put to auction in
terms of tender floated on 13th March, 1997 for 27887.50 sq. meters and
if it is acceptable to the respondent on the present prevalent circle rate
notified by the Government, the Authority may consider his request on
priority basis and if the respondent fails or does not show his inclination
                                                                                B
or interest on the present prevalent circle rate of the subject land in
question, the appellants are at liberty to put the subject land for disposal
as per their land disposal rules.
      24. The appeal deserves to succeed and is accordingly allowed.
The judgment impugned dated 21st April, 2011 passed by the Division
Bench of the High Court of Madhya Pradesh, Bench at Gwalior is                  C
quashed and set aside with the afore-stated observations.
       25. Pending application(s), if any, shall stand disposed of.

Divya Pandey                                                  Appeal allowed.   D
(Assisted by : Lavam Tyagi and Shevali Monga, LCRAs)




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