Holding

The corporation is not liable to allot the additional half‑acre; the respondent is estopped from claiming it.

Summary

The Haryana State Industrial Development Corporation Ltd. (HSIDC) offered Inderjeet Sawhney a provisional allotment of one acre of industrial land in 1984, subject to fulfillment of pre‑requisites and a final allotment letter. Sawhney failed to meet those conditions, and the parties later agreed that he would accept two half‑acre plots (total 2000 sq. m) at the old rate, which he unconditionally accepted in March 1989, leading to a final allotment in July 1990. In 1994 Sawhney filed a writ petition seeking the remaining half‑acre based on the original provisional letter. The High Court directed HSIDC to allot the additional half‑acre, but the Supreme Court held that the provisional letter did not confer any legal right and that Sawhney was estopped from claiming more land after accepting the two plots. Consequently, the corporation was not liable to allot the extra half‑acre, and the High Court orders were set aside.

Issues considered

Did the provisional letter of allotment dated 27.12.1984 create a vested right to one acre of land for the respondent?
Was the respondent estopped from claiming the remaining half‑acre after unconditionally accepting the two half‑acre plots?
Is the corporation liable to allot the additional half‑acre at the old rate?
How should provisional and final allotment letters be interpreted under administrative law?

Subjects

industrial land allotmentprovisional allotmentfinal allotmentestoppelgovernment corporationwrit petitionland lease

Judgment

HARYANA STATE INDUSTRIAL DEVELOPMENT A
CORPORATION LTD.
v.
INDERJEET SAWHNEY

JANUARY 18, 1996 B
[J.S. VERMA AND B.N. KIRPAL, JJ.]

llldust1ial Development :

Industrial land-Allotment of Haiyana State lndustJial Development c
Corporation issuing provisional letter of allotment of one acre plot to allottee
mentioning that it would not give any legal 1ight of a/lotme11t unless final letter
of allotment was issued-Allottee not complying with tenns under provisions
of allotment lette1-Later, on a mutual agreement allottee accepti11g half-acre
plot-After taking possession thereof allottee claiming further half acre land D
on old rates under earlier letter of provisional allotment-Held, Corporation
1101 liable lo allot additio11al half acre of la11d to allottee-Al/ottee was
estopped from c/aimi11g further half acre of land 011 old rates-Estoppel.

The respondent applied to the appellant-Corporation for an in-
dustrial plot for setting up a unit to manufacture reinforced concrete E
cement pipes and accessories. On his having deposited 15% of the cost of
)
land he was offered an industrial plot measuring one acre at the tentative
rate of Rs. 120 per sq. metre, and a provisional letter of allotment dated
27.12.1984 was issued requiring him to fulfil certain pre-requisites within
the stipulated period before the final allotment could be made in his F
favour. It was also made clear that the provisional letter of allotment
would not give any legal right of allotment unless the final allotment letter
was issued. The respondent neither complied with the pre-requisites within
the stipulated time, nor did he deposit any further amount with the
Corporation, However, on the basis of a mutual agreement between the
parties a letter dated 5.1.1989 was issued to the respondent offering him a G
half, acre plot at the old rate of Rs. 120 per sq. metre. It was stated in the
letter that request for further space would be considered on submission of
a fresh application on new rates. Later, a formal letter of provisional
allotment of two plots measuring 1000 sq. metres each at the tentative rate
of Rs. 120 per sq. metre was issued to the respondent on 24.2.1989 requir- H
713
(
714 SUPREME COURT REPORTS [1996] 1 S.C.R.

A ing him to complete the pre-requisites. The Corporation reiterated its
stand taken in the letter dated 5.1.1989 regarding allotment of further ./
space. On receipt of letter of acceptance from the respondent, a final letter
of allotment was issued to him on 6.7.1990. The parties signed an agree-
ment and possession of the two plots was handed over to the respondent.

B Later, in 1994 was respondent filed a writ petition before the High
Court seeking a direction to the Corporation to allot him remaining
half-acre of plot on the basis of provisional allotment letter dated •
27 .12.1984. The Corporation contended that the said letter had been
superseded and the res1wndent accepted 2000 sq. metres of land under a
C fresh agreement. The High Court allowed the writ petition. The review
petition filed by the Corporation was dismissed. Aggrieved, the Corpora-
tion filed the present appeals.

Allowing the appeals, this Court

D H£LD : The appellant was not liable to allot an additional half acre
of land to the respondent. The correspondence on record clearly shows
that the respondent was estopped from making the claim for a further area
of half acre after he had accepted the allotment of two plots measuring
2000 sq. metres in total. [720-A, 718-F·G]
E CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2078-79
of 1996.

From the Judgment and Order dated 19.8.95 of the Punjab &
Haryana High Court in R.A. No. 41/95 read \vith judgment/order dated '
F 14.11.94 in C.W.P. No. 5123 of 1994.

Dr. A.M. Singhvi, Sumant Batra for Ashok K. Mahajan for the
Appellant.

Ranbir Yadav for the Respondent.
G
The Judgment of the Court was delivered by

KIRPAL, J. Leave granted.

In this appeal, by special leave, there is challenge to two judgments
H of the Punjab & Haryana High Court, the first being judgment dated
H.S. INDL. DEV. CORPN. LTD. v. I. SAWHNEY [KIRPAL,J.j 715

14.11.1994 whereby the respondent's writ petition was allowed and the A
appellant was directed to allot a plot of land measuring half acre and the
second judgment is dated 9.8.1995 whereby the Review Application filed
by the appellant herein, was dismissed.

The relevant facts are that the appellant is a Government company
B
which is, inter alia, engaged in carrying out activities towards the advance-
•J ment of industrial development in the State of Haryana. Jn the course of
its activities, in 1983 it invite applications for allotment of certain plots of
land to set up industrial units in Gurgaon. The respondent applied for an
industrial plot in Phase-IV, Udyog Vihar, Gurgaon for setting up a unit to
manufacture reinfored concrete cement pipe and assessories. Allotment of C
plot of one acre in favour of the respondent was approved and he was
requested to deposit 15% of the cost of land vide letter dated 27.10.1983.
On the said 15% having been deposited by the respondent, he was offered
an industrial plot No. 359 measuring one acre in Udyog Vihar, Phase-IV,
Gurgaon at the tentative rate of Rs. 120 per sq. metre. A provisional letter D
of allotment dated 27.12.1984 was issued and it was made clear therein that
the respondent was required to fulfil certain pre-requisites connected with
the implementation of the proposed project before the final allotment
could be made in his favour. These pre-requisites were to be completed
within 120 days of the date of allotment. This letter further stipulated that
the provisional letter of allotment will not give any legal right of allotment E
unless the final allotment letter is issued.

It is the case of the appellant that the respondent neither complied
with the formalities, as contemplated by the aforesaid letter dated
27.12.1984, within the time schedule nor deposited any further amount with F
the appellant. According to the appellant. for administrative reasons the
industrial plot No. 359 which had been allotted to the respondent was
changed to two plots measuring half acres each and renumbered as Plot
Nos. 374-375. Another provisional letter of allotment dated 5.11.1986 was
written to the respondent stating therein that it had been decided to offer G
him industrial plot Nos. 374-375 measuring one acre at the tentative rate
of Rs. 120-60 Sq. yard. But, before the allotment was issued in his favour,
he was required to comply with certain pre-requisites enumerated in the
said letter of allotment which were connected with the implementation of
the respondent's proposed project. These pre-requisites included the unit
being registered with the appropriate authority, drawing of the unit ap- H
f
I

716 SUPREME COURT REPORTS [1996] 1 S.C.R.

A proved, building and machinery being sanctioned and list of plant and
machinery to be installed at the unit. The..'e pre-requisite formalities were
required to be completed within 120 days of the said letter dated 5.11.1986
and it was stipulated that if this was not done within the specified time,
then the provisional letter of allotment shall be treated as having been
B withdrawn unless its validity was extended in writing by the Corporation.
It was again mentioned in letter dated 5.11.1986 that the said letter shall
not give the respondent any legal right for allotment unless the final
allotment is issued.

Soon after the despatch of the letter dated 5.11.1986, the appellant
C learnt that the aforesaid plot Nos. 374-375 were not available and had been
wrongly offered to the respondent. The re..,pondent was, accordingly, in-
formed vide letter dated 10.11.1986 that the plot Nos. 374-375 had been
wrongly mentioned in the provisional letter of allotment dated 5.11.1986
and that the respondent's case for allotment of alternative plot of one acre
D had been considered and approved but the plot number would be in-
timated shortly. Thereafter, it seems that discussion took place between the
appellant and the respondent regarding the allotment of one acre plot. The
case of the appellant is that a mutual agreement was arrived at as a result
of which letter dated 5.1.1989 was written by the appellant to the respon-
dent whereby the respondent was offered a half acre plot in Udyog Vihar,
E Phase-IV at the old rate of Rs. 120 per sq. metre. It was further stated in
this letter that with this offer half acre of plot at Rs. 120 per sq. metre "the
present case will be treated as closed thereafter" and request for additional
space would be considered on submission of a fresh application, but the
rate of land will be at the rate prevailing at that time. The ;espondent was
requested to confirm the acceptance of an area of 2000 sq. metres for the
F
proposed'project and this acceptance was required to be given within 15
days of the issue of the said letter. Vide letter dated 14.1.1989 the respon-
dent conveyed his acceptance of half acre plot and observed as follows :

"However, 1 accept 1J2 acre plot as desired by you in the letter
G dated 5.1.1989 mentioned above at the original rates, but reserve
the right to claim further 1/2 acre plot. It may be mentioned that
I have deposited the required money for 1 acre plot."

On the receipt of the aforesaid reply, a formal provisional letter of
H allotment dated 24.2.1989 was issued to the respondent whereby two in-
H.S. INDL. DEV. CORPN. LTD. v. I. SAWHNEY [KIRP AL, J.] 717

dustrial plot Nos. 1 & 2 measuring 1.000 sq. metres each al U dyog Vihar. A
Phase-IV at the tentative rate of Rs. 120 per sq. metre was proposed to be
allotted to the respondent. By this letter, the respondent was again re-
quired to complete the pre-requisites connected with the implementation
of the respondent's project and he was also asked to convey his acceptance
to the conditions within 30 days.
B
In this letter, it was further stated as under :

"Reveiting to your letter of 14th January, 1989 we would like to clmify
here that this offer for I/2 acre size plot has been made in your favour
as per the consent )•ou given to our Managing Director dwing the C
course of discussion on 3rd December and it will not be possible to
give you any" more plot against this application. However, you are
at liberty to apply for plot against our further advertisement on
new rates and on terms and conditions prevalent at that time and
in that event your case will be considered alongwith others on
merits. D

You may please note that since the plot has been offered to
you at the old rate of Rs. 120 per sq. metre, the corporation shall
not be in a position to accede to any of your request for transfer
of plot and that you are required to implement your project within E
one year from the date of issue of allotment letter. In the end, we
remind you to complete the conditions mentioned at (i) to (iii) and
furnish us proof thereof within the stipulated period to enable us
to issue the allotment letter." (emphasis added)

In response to the aforesaid provisional letter of allotment dated F
24.2.1989, the respondent wrote a letter dated 4.3.1989 in which it was
stated as follows :

"Offer of half acre plot Nos. 1 & 2 measuring 1000 sq. metres
each (total 2000 sq. metres) is acceptable. I am in touch with the G
District Industries Centre Divisional Town Planner and Haryana
Financial Corporation. I hope to complete all the formalities very
soon. 11

On the receipt of the aforesaid letter, a final letter of allotment dated
6.7.1990 was issued to the respondent. This was followed by the signing of H
/

f
718 SUPREME COURT REPORTS [1996] 1 S.C.R.

A an agreement between the parties after which the possession of the said
plots was handed over to the respondent on 4.9.1990.

The respondent then filed a Writ Petition No. 5123 of 1994 in the
Punjab and Haryana High Court. Basing his claim on the earlier
provisional allotment letter dated 27.12.1984 the respondent, inter alia,
B prayed that the appellant herein should and ought to deliver the remaining
half acre of plot. The appellant herein contended that the letter dated
27.12.1984 had been superseded and a fresh agreement had been entered
into between the parties after the respondent herein had accepted 2000 sq.
metres of land which had been allotted to him. It was also stated that one
C of the conditions of allotment vide letter dated 6.7.1990 was that the unit
was to be set up within two years from the date of allotment put the
respondent had even failed to utilise the plots of land which had been
handed over to him.

The High Court by its judgment dated 14.11.1994 came to the con-
D clusion that there was no reason shown by any correspondence on record
as to why the area of the plot which was to be allotted to the respondent
vide allotment letter dated 24.12.1984 had been reduced. It did not accept
the contention of the appellant herein that while accepting plot Nos. 1 &
2 measuring 1000 sq. metres each, the respondent had given up his right ·
E for the remaining half acre of land. The High Court, accordingly, directed
the appellant to allot the remaining half acre of plot within a specified
period.

Thereafter, Review Application No. 41 of 1995 was filed by the
appellant herein but the same was dismissed by judgment dated 9.8.1995.
F
From the facts as narrated above, it appears that the High Court
erred in directing that a further plot of half acre should be allotted to the
respondent. The High Court did not appreciate that the correspondence
on record of the case clearly shows that the respondent was estopped from
G making the claim for a further area of half acre after he had accepted the
allotment of plot Nos. 1 & 2 measuring 2000 sq. metres in total. In the
present case even though in the letter dated 27.12.1984 the respondent had
been offered a plot of land measuring one acre yet by subsequent letter
dated 5.1.1989, a revised offer was made whereby he was offered a plot
measuring half acre at the old rate of Rs. 120 per sq. metres as a special
H case. In this letter, it was stated that while making this offer, the case would
H.S. INDL. DEV.CORPN. LTD.1·. I. SAWHNEY[KIRPAL,J.) 719

be considered as closed and the respondent was requested to confirm the A
acceptance of the area of 2000 sq. metres. Vide letter dated 14.1.1989, a
conditional acceptance was conveyed by the respondent whereby he had
stated that he accepted the half acre of plot but he reserve the right to
claim further half acre of plot. To this, the appellant wrote letter dated
24.2.1989 again stating that half acre of land was offered to him and that
B
he was clarified that this offer was made in his favour as per the consent
given by him to the appellant's Managing Director during the course of
discussion on 3.12.1990. It is in response to this letter seeking the aforesaid
clarification that the respondent wrote the letter dated 4.3.1989 wherein he
unconditionally accepted the plot Nos. 1 and 2. It is only thereafter that
the formal allotment letter dated 6.7.1990 was issued to him which was c
followed by a formal agreement and handing over possession of the said
plot Nos. 1 and 2 to the respondent. There can be no manner of doubt that
the appellant had categorically stated that it was unable to offer the
respondent an area larger than half an acre and acceptance of this was
insisted upon and the same was given by the respondent vide letter dated D
4.3.1989. Had this unconditional acceptance not been given, it would
appear, the appellant would not have made the allotment in favour of
respondent.

It is further to be borne in mind that the letter dated 27.12.1984, on
which reliance is placed by the respondent and on the basis of which the E
High Court had given relief, it was stated that the said letter was only a
provisional letter of allotment and it was specifically mentioned therein that
·\
the same shall not give you any legal right for allotment unless a final
allotment letter is issued11 • There was, therefore, no final commitment to
allot one acre of land to the respondent and the High Court clearly F
misconstrued the said provisional letter of allotment to mean as if the
respondent had acquired a vested right to obtain an allotment of one acre
of land.

The respondent was not only estopped from claiming an additional G
half acre of land but even the letter dated 27.12.1984 did "not give the
respondent any legal right to insist upon the allotment of one acre of land
because the only letter of final allotment which was issued in favour of the
respondent, was the one dated 6.7.1990 whereby only half acre of land was
allotted and the said allotment was accepted by the respondent without
demure, till he chose to file the Writ Petition four year thereafter. H
t
I
I
720 SUPREME COURT REPORTS [1996] 1 S.C.R.

A In view of the above, the appellant was not liable to allot .an addi-
tional half acre of land to the respondent to whom plot Nos. 1 & 2 at Udyog
Yihar. Phase-IV, Gurgaon measuring 2000 sq. metres had already been
validly allotted.

For the aforesaid reasons, this appeal is allowed and the judgments
B of the High Court dated 14.11.1994 in C.W.P. No. 5123/1994 and dated
18.8.1995 in Review Petition No. 41 of 1995 are set aside, the result of
which would be that the Writ Petition filed by the respondent before the
High Court would stand dismissed. Parties to bear their own costs.

R.P. Appeals allowed.

•