Holding

The Supreme Court held that UPSIDC acted lawfully within its contractual and statutory powers, KNMT was in default and not entitled to claim frustration, and the cancellation of the allotment was valid and procedurally sound.

Summary

The Kamla Nehru Memorial Trust (KNMT) was allotted 125 acres of industrial land by the Uttar Pradesh State Industrial Development Corporation (UPSIDC) in 2003 on condition of scheduled payments and execution of a lease deed. KNMT repeatedly delayed payments, sought waivers, and failed to furnish required documents, while UPSIDC issued several notices and eventually cancelled the allotment in 2007. KNMT contended that UPSIDC frustrated the contract by not demarcating the land, not delivering possession, and by not issuing three legal notices as required by the Manual, seeking restoration of the allotment. The Supreme Court examined the factual record, the terms of the allotment letter, and the procedural requirements of the Manual, finding that UPSIDC had demarcated the land, that possession could only be given after lease registration, and that the notices issued satisfied the legal notice requirement. Consequently, the Court held that KNMT was in default, that UPSIDC acted within its contractual and administrative powers, and that the cancellation of the allotment was lawful and procedurally valid. The Court upheld the cancellation, annulled a subsequent allotment to another party, and issued directions for transparent future allocations.

Issues considered

Whether UPSIDC is responsible for frustrating the performance of the allotment contract
Whether the cancellation of the allotment of the Subject Land was procedurally defective and legally untenable

Headnote

Issue for Consideration The central issue concerns the legality of the cancellation of allotment by Uttar Pradesh State Industrial Development Corporation (UPSIDC). Whether UPSIDC is responsible for frustrating the performance of the the cancellation of allotment of the subject land was procedurally defective and legally untenable. Headnotes† Allotment of Land – Cancellation of allotment – Legality of – Appellant-KNMT was allotted subject land by UPSIDC – The allotment letter required KNMT to

Subjects

Allotment of landCancellation of allotmentEncroached by third partiesAutomatic cancellation of allotmentDefaulted in paying ‘earnest money’Physical possession of landDemarcation and handing over possessionRemoval of alleged encroachmentsRescheduling the paymentExecution of lease deedManual for Marketing and Management of Industrial AreasAllotment made on ‘as it is where it is’ basisNon-demarcation of subject landFrustration of contractContractual powers of stateAdherence to procedural safeguardsAdministrative autonomyAllottees’ rights through procedural fairnessLegal noticeUnambiguous communication along with legal consequencesImpending legal obligationAppropriate legal actionMislead or suppress material informationUnwarranted concessionsStandards of administrative proprietyConstitutional mandate under Article 21Doctrine of public trustSystemic deficiencies in the allocation process

Judgment

[2025] 5 S.C.R. 673 : 2025 INSC 791

Kamla Nehru Memorial Trust & Anr.
v.
U.P. State Industrial Development Corporation
Limited & Ors.
(Civil Appeal No(s). 7273-7274 of 2025)
30 May 2025
[Surya Kant* and Nongmeikapam Kotiswar Singh, JJ.]

Issue for Consideration
The central issue concerns the legality of the cancellation
of allotment by Uttar Pradesh State Industrial Development
Corporation (UPSIDC). Whether UPSIDC is responsible for
frustrating the performance of the allotment contract; whether
the cancellation of allotment of the subject land was procedurally
defective and legally untenable.

Headnotes†
Allotment of Land – Cancellation of allotment – Legality
of – Appellant-KNMT was allotted subject land by UPSIDC –
The allotment letter required KNMT to make payments in
a scheduled manner – KNMT failed to make payment in a
schedule manner – UPSIDC cancelled the allotment of land –
The High Court by the impugned order upheld the cancellation
of the allotment of subject land – Before the Supreme Court,
the appellant-KNMT raised plea that UPSIDC was responsible
for frustration of contract and it was also alleged that the
cancellation of allotment of the subject land was procedurally
defective and legally untenable:
Held: On examination of all the contentions raised by KNMT
reveals that none of the alleged acts—non-demarcation, removal
of encroachment, or non-delivery of possession—constitute
conduct that would frustrate the performance of the allotment
terms – On the contrary, the record demonstrates that UPSIDC
acted in accordance with prescribed procedures and as per the
terms of allotment – In contrast, KNMT failed to fulfil its obligations,
particularly regarding the timely submission of documents required
for executing the lease deed – Since KNMT failed to furnish the
necessary documents in a timely manner, it is itself to blame for the

* Author
674 [2025] 5 S.C.R.

Supreme Court Reports

non-delivery of possession – As far as cancellation of allotment by
UPSIDC is concerned, the dues for the subject land, allotted in 2003,
remained unpaid despite multiple communications spanning several
years – KNMT not only failed to make timely payments but also
sought unwarranted concessions, including waiver of interest and
rescheduling of dues – This persistent non-compliance establishes
KNMT as a chronic defaulter, while the continued attempts to seek
waiver evince a deliberate strategy to avoid payment obligations –
UPSIDC’s action in treating KNMT as a defaulter was, therefore,
both justified and necessary to preserve the integrity of the allotment
process – In light of detailed examination of the contentions raised
by the parties, the comprehensive analysis of the factual and
legal matrix and the resultant conclusions, the cancellation of the
allotment by UPSIDC is upheld. [Paras 16, 17, 25, 35]

Legal Notice – Meaning and essential elements:
Held: Expression ‘legal notice’ connotes an unambiguous
communication along with legal consequences to a noticee who
is alleged to be in default – Illustratively essential elements would
include: a) It should contain a clear and concise set of facts which
convey the information leading to the relevant circumstances – This
element is also fulfilled when reference is made to any earlier
communications issued between the concerned parties; b) It should
convey the intimation of any impending legal obligation or breach
committed by any party; c) It should convey the intention of the
party issuing the communication to hold the other party liable to
appropriate legal action or charge; and d) The communication in
toto must be unambiguous and should not mislead or suppress
material information – If issued under a Statute, it must comply
with the relevant requirements prescribed therein as well. [Para 23]

Administrative Law – Contractual powers of the State – Land
Revocation – Judicial intervention:
Held: While it is well-settled that land allotment authorities such
as UPSIDC possess the inherent right to cancel allotments upon
violation of stipulated conditions, this Court has consistently
emphasized that judicial intervention in matters concerning
land revocation should be circumscribed to ensure adherence
to procedural safeguards – This paradigm underscores the
administrative autonomy vested in such authorities while
safeguarding allottees’ rights through procedural fairness. [Para 20]
[2025] 5 S.C.R. 675

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

Doctrines – Invoking Public Trust doctrine in the allocation
of resources:
Held: The Doctrine emanates from the ancient principle that
certain resources (seashores, rivers and forests) are so intrinsically
important to the public that they cannot be subjected to unrestricted
private control – Rooted in Roman law and incorporated into
English common law, this Doctrine recognizes that the Sovereign
holds specific resources as a trustee for present and future
generations – In the Indian context, the Doctrine has evolved to
encompass public resources meant for collective benefit, reflecting
the constitutional mandate u/Art. 21 – When a substantial tract of
industrial land is allocated without a comprehensive evaluation, it
raises critical questions about adherence to these principles – In the
instant case, the allocation of 125 acres of industrial land to KNMT
without a competitive process fundamentally violated the Doctrine,
which demands proper procedure and substantive accountability
in public resource allocation – UPSIDC ought to have considered
verifiable evidence of economic benefits, employment generation
potential, environmental sustainability, and alignment with regional
development objectives to demonstrate that the decision serves the
collective benefit – The failure to adopt transparent mechanisms
not only deprived the public exchequer of potential revenue—as
evidenced by the substantial appreciation in the value of such a
large tract of land—but also created a system where privileged
access supersedes equal opportunity – This betrays the fiduciary
relationship between the State and its citizens – The prolonged
litigation initiated by KNMT has spanned over fifteen years,
unnecessarily burdening the judicial system and impeding the
efficient functioning of public authorities – Such protracted disputes
highlight the need for more stringent initial evaluation processes
to prevent chronic defaults. [Paras 27, 30, 31, 32, 33]

Allotment of Land – Transparent allocation of public resources –
Public interest – Directions issued by Supreme Court:
Held: i) The State Government and UPSIDC directed to ensure
that any such allotment in the future be made in a transparent,
non-discriminatory and fair manner by ensuring that such allotment
process fetches maximum revenue and also achieves the larger
public interest like industrial development priorities, environmental
sustainability, and regional economic objectives; and ii) The Subject
Land shall also be allotted strictly in accordance with the procedure
as illustrated in direction (i) above. [Para 38]
676 [2025] 5 S.C.R.

Supreme Court Reports

Case Law Cited
Dilip Singh and Ors v. State of Haryana and Ors. [2018] 12 SCR
608 : (2019) 11 SCC 422; M.C. Mehta v. Kamal Nath [1996] Supp.
10 SCR 12 : (1997) 1 SCC 388; Natural Resources Allocation
In re [2012] 9 SCR 311 : (2012) 10 SCC 1; Centre for Public
Interest Litigation v. Union of India [2012] 3 SCR 147 : (2012) 3
SCC 1 – referred to.

List of Keywords
Allotment of land; Cancellation of allotment; Encroached by third
parties; Automatic cancellation of allotment; Defaulted in paying
‘earnest money’; Physical possession of land; Demarcation and
handing over possession; Removal of alleged encroachments;
Rescheduling the payment; Execution of lease deed; Manual for
Marketing and Management of Industrial Areas; Allotment made
on ‘as it is where it is’ basis’; Non-demarcation of subject land;
Frustration of contract; Contractual powers of state; Adherence
to procedural safeguards; Administrative autonomy; Allottees’
rights through procedural fairness; legal notice; Unambiguous
communication along with legal consequences; Impending legal
obligation; Appropriate legal action; Mislead or suppress material
information; Unwarranted concessions; Standards of administrative
propriety; Constitutional mandate under Article 21; Doctrine of public
trust; Systemic deficiencies in the allocation process.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 7273-7274
of 2025
From the Judgment and Order dated 29.05.2017 of the High Court
of Judicature at Allahabad, Lucknow Bench in WPMB No. 349 of
2007 in MB No. 11055 of 2013

Appearances for Parties
Advs. for the Appellants:
Maninder Singh, Mahabir Singh, Sr. Advs., Sunil Kumar Jain,
Ramraj, Shaantanu Jain, Ms. Rashika Swarup.
Advs. for the Respondents:
K.K. Venugopal, A.N.S. Nadkarni, Sr. Advs., Ms. Ruchira Gupta,
Salvador Santosh Rebello, Ms. Pooja Tripathi, Gautam Sharma,
Ms. Kritika, Amit Kumar, Abhishek Verma, Ms. Manisha Gupta, Ms.
Arzu Paul, Ms. Deepti Arya, Ms. Himanshi Nagpal, Ms. Pooja Gill.
[2025] 5 S.C.R. 677

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

Judgment / Order of the Supreme Court

Judgment

Surya Kant, J.

Leave Granted.
2. These appeals have been preferred by the Kamla Nehru Memorial
Trust (KNMT) against the final common judgment and order dated
29.05.2017 passed by the High Court of Allahabad at Lucknow Bench
(Impugned Order), whereby it upheld the cancellation of allotment of
land admeasuring 125 acres situated in the Utelwa Industrial Area,
Jagdishpur, District Sultanpur, Uttar Pradesh (Subject Land) by the
Uttar Pradesh State Industrial Development Corporation (UPSIDC).
3. The crux of the dispute pending before us relates to the legality
of the decision of cancellation of allotment of the Subject Land by
UPSIDC. However, it would be apropos to discuss the factual matrix
before delving into the analysis pertaining to the alleged procedural
irregularities in the cancellation of allotment of the Subject Land.

A. Facts
4. In this vein, the sequence of events has been briefly adduced as
follows:
4.1. KNMT is stated to be a charitable trust incorporated in the year
1975. It resolved in March, 2003 to purchase land for the purpose
of floriculture. Accordingly, on 10.07.2003, KNMT submitted an
application and deposited earnest money amounting to INR
62,600/- for allotment of the Subject Land for the aforesaid
purpose.
4.2. UPSIDC, in an uncharacteristically swift manner, accepted
the application of KNMT and allotted the Subject Land vide
allotment letter dated 18.09.2003 (Allotment Letter). The
allotment was made conditional upon compliance with certain
terms, the relevant provisions of which are reproduced below:
“xxx xxx xxx
3.You shall deposit at this office an amount of
Rs. 12,02,187.50. (Earnest Money of Rs. 62,500.00
678 [2025] 5 S.C.R.

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has been adjusted) towards reservation money
in respect of the above plot latest by 18-10-2003.
This amount (together with Earnest money) is
approximately equal to 10 percent of the total premium
of the plot at the provisional rate of Rs. 25.00 per
sq. mtr. and locational charges @ Rs. Nil per sq.
mtr. for first five acres and is subject to adjustment
according to actual measurement of the plot. If the
above amount falls short of the amount equal to 10
percentage of the total premium according to actual
measurement, the balance will be deposited by you
within seven days of the receipt of demand from us.
If the payments are not made as stipulated above
this allotment will stand automatically cancelled/and
the whole amount of the Earnest Money deposited
by you will stand forfeited to this corporation, even if
the area of the plot either exceeds or is less than the
area of 20% or less of the area applied for. However,
if the area of the land allotted either exceeds the area
applied for or falls short of the applied for by an area
more than 20% of it, the Earnest Money will not be
forfeited if this allotment is not accepted, provided
intimation is sent to us in this respect by the date
stipulated above.
Note: - the premium herein is provisional and is liable
to be enhanced in accordance with the provisions of
Licence Agreement/Lease Deed.
xxx xxx xxx
5.The remaining 90% of the provisional premium
shall have to be paid by you in 8 equal half yearly
installments each of which will be due for payment
on 1st day of January and 1st day of July each year.
The first installments of each payment will fall due for
payment on 01.01.2006. The second and subsequent
installments of the premium will fall due on 1st day
of July and 1st day of January each year.
An interest at 15.00% per annum shall be charged
on the outstanding (balance) premium with effect
[2025] 5 S.C.R. 679

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

from the date of allotment and will be payable along
with installments of premium as stipulated in clause
3 above subject to a rebate of 3.00% per annum
and payment on or before the prescribed date and
if there are no arrears of dues. The amount of the
balance premium and the interest due on it from time
to time shall remain first charge on the land and the
building and machinery erected thereon till it is (they
are) paid in full.
Note: - the premium mentioned herein is provisional
and is liable to be enhanced in accordance with the
provisions of licence agreement/Lease Deed.
xxx xxx xxx
9. The plot has been allotted on as it is where it is
basis and leveling etc, if any, is to be undertaken
by you at expenses. You will pay to the U.P. State
Industrial Development Corporation Ltd. Within 30
days from the date of the demands made by this
corporation from time to time such recurring fee in
the nature of service and/or maintenance charges
as determined by this corporation. In case of default
you will be liable to pay interest @15.00% p.a. on
the amount due.
xxx xxx xxx
13. You will have to take over possession of the land
executing the lease deed within 30 days from the date
of inviting you to do so or within 3 months from the
date of this letter whichever is earlier.”
[Sic]

4.3. After allotment, KNMT inspected the Subject Land and
asserted that it was encroached upon by third parties, seeking
demarcation by the relevant State Authorities. Simultaneously,
KNMT defaulted in paying the ‘reservation money’ by the
prescribed date of 18.10.2003. Responding to this default,
UPSIDC, vide communication dated 04.11.2003, granted an
extension until 17.11.2003 for payment along with interest,
680 [2025] 5 S.C.R.

Supreme Court Reports

while clearly stipulating that non-compliance would result in
automatic cancellation of the allotment.
4.4. KNMT deposited the reserve amount through two demand
drafts dated 17.11.2003 and requested that UPSIDC not levy
any interest until physical possession of the Subject Land
was granted to it. UPSIDC, vide letter dated 11.12.2003,
categorically rejected the aforesaid request by stating that the
same was violative of its policy. Thereafter, UPSIDC afforded
KNMT a three-day window to provide its unconditional consent
to preserve the validity of the allotment.
4.5. Subsequently, KNMT, admittedly, vide letter dated 15.12.2003,
responded to UPSIDC’s communication, confirming payment
of the interest amount while simultaneously expressing
discontent regarding the levy of such interest and requested
UPSIDC to reconsider its decision. Ultimately, after multiple
correspondences, this issue was finally resolved vide letter
dated 07.01.2004, whereby KNMT accepted the conditions of
the Allotment Letter. Appellant No. 2 (official of KNMT) thereafter
explicitly agreed to the original terms and conditions, including
to deposit the reservation amount along with requisite interest,
for completion of allotment of the Subject Land. Concurrently,
it bears emphasis that KNMT wrote several letters seeking
demarcation and handing over of possession of the Subject
Land after the removal of alleged encroachments. However, no
action was allegedly taken in respect of these communications.
4.6. Soon thereafter, vide letter dated 21.02.2004, UPSIDC apprised
KNMT of a policy change, whereby KNMT was directed
to execute the lease deed prior to delivery of possession.
Accordingly, KNMT was required to furnish the necessary
documents and make requisite payments for the execution of
the lease deed within 15 days, failing which UPSIDC cautioned
that it would proceed with cancellation of allotment of the
Subject Land.
4.7. Notably, the Allotment Letter required KNMT to make payments
in a scheduled manner. KNMT nonetheless failed to pay the
instalments and requested rescheduling of the same vide
letter dated 11.03.2005. UPSIDC, in response, assured them
of consideration of their request and, in the interim, directed
[2025] 5 S.C.R. 681

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

them to pay the lease rent and also to provide the necessary
documents for the execution of the lease deed.
4.8. UPSIDC, on 01.07.2005, approved the request for rescheduling
the payment and directed KNMT to pay the total amount of
INR 1,44,27,313/- in ten instalments over a period of 5 years
along with 15% interest starting from the date of issuance of
the aforesaid letter, which reads as follows:
“Please refer your undated letter on the above subject
by which you requested to reschedule the total amount
of your plot and sought permission to pay the first
installment in July 2005. In this connection, you are
informed that according to your request, the approval
of the headquarter has been issued to reschedule the
total amount of Rs.1,44,27,313=10 paise to be paid
in 10 six monthly installments including 15°/o interest
and the first installments of 10% amounting to Rs.
14,42,731=35 paise is payable by 01.07.2005. The
balance 90 % amount is to be paid in six monthly
(a) further installments including the interest. You are
therefore requested to please arrange to deposit the
first installment of the amount of Rs. 14,42,731=35
paise as early as possible.”
[Sic]

4.9. However, KNMT failed to adhere to the aforesaid schedule as
well and, having defaulted in payment, UPSIDC issued a notice
dated 14.12.2005, thereby mandating it to deposit a sum of INR
39,76,404.85/- (inclusive of interest and the previous pending
amount). KNMT, conversely, continued to request UPSIDC to
handover possession and to reconsider the decision to levy
interest.
4.10. Following the continued non-compliance, UPSIDC issued a
final notice dated 13.11.2006, calling upon KNMT to deposit
an amount of INR 68,49,869.20/- as well as to submit the
necessary documents for execution of the lease deed. The
notice stipulated a deadline of 10 days, failing which the
allotment of the plot would be cancelled as per the terms of
the Allotment Letter. The relevant portion of the notice is as
follows:
682 [2025] 5 S.C.R.

Supreme Court Reports

“…. Now last and final notice is hereby given to you
to please submit an amount of Rs. 68,49,869.20
accrued upto 30.6.2006 and submit the desired
documents within TEN DAYS from the date of this
letter failing which allotment of plot shall be cancelled
as per Clause No. 15(a) & (b) of allotment letter
dated 18.9.03 and the money deposited by you shall
stand forfeited.”
4.11. In response, KNMT, without making the payment, vide letter
dated 04.12.2006, repeated its earlier request to hand over
the possession of the land after demarcation and sought
removal of the encroachment. UPSIDC replied on 13.12.2006,
stating that possession of the land could only be handed over
after execution of the sale deed. The letter also underscored
KNMT’s failure to deposit the requisite documents for execution
of the lease deed or any amount except the reserve amount
since 2003. In this light, UPSIDC finally declined KNMT’s
representation. The letter dated 13.12.2006 elucidated that:
“In this regard, it is informed you that the above said
land was allotted to you in September, 2003 thereafter
you have deposited only 10% amount of allotment.
Later on in the year, 2005 the re-schedulement was
made on your request, but despite that no payment
has been made by you till today, only writing for
marking. As per the rules of the Corporation, the
possession of the land can be given after due payment
and execution of lease deed. Neither you have made
payment nor have submitted the requisite documents
of lease deed. You have only taking time by way of
unnecessary correspondence.
You had been requested to get execute the lease deed
after making due payment so that the possession
can be given to you. But, the aforesaid actions, you
by not making the payment of dues and execution
of lease deed, you want to evade the matter by
making unnecessary correspondences. Hence, the
representation submitted by you is declined.”
[Sic]
[2025] 5 S.C.R. 683

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

4.12. Feeling aggrieved, KNMT assailed the letter dated 13.12.2006
before the High Court through Writ Petition No. 349/2007 (MB)
(First Writ). Meanwhile, the allotment of the Subject Land
was cancelled vide the order dated 15.01.2007, which was
also challenged by KNMT by amending the First Writ Petition.
4.13. The High Court, vide interim order dated 13.02.2007, restrained
UPSIDC from making any fresh allotment of the Subject Land.
4.14. Ultimately, the High Court disposed of the First Writ vide order
dated 27.05.2009 with a direction to restore the allotment
in favour of KNMT, subject to certain conditions, including
completion of all formalities in accordance with the Allotment
Letter and revalidation of demand drafts.
4.15. Aggrieved, UPSIDC challenged the order dated 27.05.2009
before this Court vide SLP (C) No. 14680/2009, wherein the
matter was remitted back to the High Court with the following
observations:
“It is apparent from the impugned order that the
respondents challenged the cancellation order dated
January 15, 2007 by filing a petition for amendment
in the writ petition. Admittedly, the Court, without
discussing the validity of the order dated January 15,
2007, decided the matter in favour of the respondents
and directed to restore the allotment and revalidate
the demand drafts of ‘91,27,139.65 and to execute
the lease deed in favour of the respondents.
Learned counsel for the parties accept that the High
Court ought to have given reasons regarding validity
of the order of cancellation dated January 15, 2007
before passing the impugned order.
In the circumstances, we are of the view that the
case should be remitted to the Division Bench of the
High Court for its decision on merits.
We, accordingly, allow this appeal, set aside the
impugned judgment and order dated May 27, 2009,
and remit the case to the Division Bench of the High
Court for its decision on merits expeditiously.”
684 [2025] 5 S.C.R.

Supreme Court Reports

4.16. It is pertinent to note that, in the interregnum, UPSIDC
allotted the Subject Land to M/s Jagdishpur Paper Mills Ltd
i.e. Respondent No.3, which was challenged by KNMT before
the High Court through another Writ Petition bearing Misc.
Bench No. 11055/2013 (Second Writ). The High Court therein
directed the parties to maintain status quo with regard to the
Subject Land. UPSIDC challenged the said interim order dated
27.11.2013 by means of SLP (C) No. 7952/2014 wherein vide
order dated 07.04.2017, this Court directed the High Court to
expeditiously adjudicate both the Writ Petitions filed by KNMT.
4.17. Consequently, the High Court heard the matter and, vide the
Impugned Order, upheld the cancellation of the allotment of
Subject Land. In doing so, the High Court held that:
i) KNMT failed to follow the stipulations of the allotment as
it did not adhere to the payment schedule;
ii) The explanation for delayed payment provided by KNMT,
though reasonable, failed to form part of the terms and
conditions of allotment. In other words, strict adherence
to the payment schedule was necessary; and
iii) UPSIDC rightly cancelled the allotment of Subject Land
by complying with the terms of The Manual for Marketing
and Management of Industrial Areas (Manual), specifically
citing Clause 3.04 (vii), which postulates that:
“(vii) If an allottee has not paid the dues despite
three consecutive legal notices, the Regional
Manager shall be required either to cancel the
allotment or send his recommendation for issue
of Recovery Certificate.”
4.18. It is in this factual backdrop that the aggrieved KNMT is before
this Court. It must further be noted that, during the pendency
of the instant appeals, this Court, vide order dated 17.11.2017,
stayed the operation of the Impugned Order.

B. Contentions of the parties
5. We have heard Learned Senior Counsels for the parties at a
considerable length and meticulously perused the documents
submitted on record.
[2025] 5 S.C.R. 685

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

6. Mr. Maninder Singh, Learned Senior Counsel appearing on behalf
of KNMT made the following contentions:
a. The High Court erred in its conclusion that KNMT failed to make
payment of the allotment price as per the schedule. On the
contrary, UPSIDC failed to transfer the physical possession of the
Subject Land and merely continued to demand the outstanding
amount without fulfilling its reciprocal contractual obligations.
KNMT wrote several letters requesting to deliver possession.
However, UPSIDC continued to make excuses and used the
outstanding dues as a cloak for not handing over possession of
the Subject Land to KNMT. In other words, UPSIDC allegedly
frustrated the contract.
b. UPSIDC’s refusal to demarcate the Subject Land contravenes
the provisions contained in the Allotment Letter. It was thus
emphasized that UPSIDC was not in a position to handover the
physical possession as the farmers were still holding the Subject
Land and continued to cultivate it for agricultural purposes.
c. Pursuant to the High Court’s directions dated 27.05.2009,
KNMT duly deposited the due amount with UPSIDC, which has
remained unutilized for more than ten years. Evidently, KNMT
duly abided by both the terms of the Allotment Letter as well
as the directions given by the High Court.
d. The High Court erroneously interpreted Clause 3.04 (vii) of the
Manual, which stipulates that UPSIDC must give three legal
notices to defaulters. In the instant case, UPSIDC sent only
one such notice dated 13.11.2006. UPSIDC, therefore, failed
to abide by the conditions prescribed in the Manual, and the
cancellation order suffers from procedural infirmities. In other
words, the cancellation of allotment is procedurally flawed and
legally untenable, as it disregarded both the mandatory notices
as contemplated under the Manual as well as the fundamental
principle of reciprocal contractual obligations, where possession
and demarcation ought to have preceded demands for full
payment.
7. Per contra, Mr. K.K. Venugopal and Mr. Atmaram N.S. Nadkarni,
Learned Senior Counsels, represented UPSIDC and canvassed the
following submissions:
686 [2025] 5 S.C.R.

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a. UPSIDC provided ample opportunities for KNMT to make
payment as per the terms and conditions of the allotment.
However, KNMT chose to delay payment for more than six years
from the date of allotment on false, misleading and specious
grounds. Moreover, KNMT could not honour its commitment even
after UPSIDC, taking a lenient view, rescheduled the payment
terms. Furthermore, despite the High Court’s directions dated
12.03.2007, KNMT paid only the outstanding principal amount
without any interest or additional fees for restoration.
b. The procedure outlined in Clause 3.04 of the Manual
was duly adhered to by UPSIDC through notices dated
14.12.2004, 1.07.2005, 14.12.2005, and 13.11.2006. Strangely,
notwithstanding the rejection of its request for waiving of interest,
KNMT repeatedly implored UPSIDC to reconsider the same
rather than making payment towards the allotment price.
c. The allegations regarding the non-demarcation and encroachment
on the Subject Land are false and vexatious. The Allotment Letter
issued to KNMT itself contained the site plan along with precise
measurements and the area of land in the plot. Furthermore, to
the satisfaction of KNMT, UPSIDC had demarcated the Subject
Land on 03.03.2005, which was duly acknowledged by KNMT
in its letter dated 11.03.2005.
d. UPSIDC had charged the interest in consonance with the terms
of the Allotment Letter accepted by KNMT. In this regard, a
pointed reference was made to Clauses 3 and 5 of the Allotment
Letter, whereunder the method of computation of interest on
the outstanding balance was duly provided.
e. Lastly, KNMT itself has admitted the non-payment of dues before
this Court. Further, the current market value of the Subject Land
is valued in the range of more than a hundred crores. In these
circumstances, the instant appeal is wholly without merit and
ought to be dismissed.

C. Issues
8. Having considered the rival contentions advanced by the parties, it is
evident that the central issue concerns the legality of the cancellation
of allotment by UPSIDC. Given the nature of the dispute and the
[2025] 5 S.C.R. 687

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

competing interpretations regarding procedural compliance, we find
it appropriate to examine the following issues:
i) Whether UPSIDC is responsible for frustrating the performance
of the allotment contract?
ii) Whether the cancellation of allotment of the Subject Land was
procedurally defective and legally untenable?

D. Analysis

D.1 Issue No.1: Whether UPSIDC is responsible for frustrating
the performance of the allotment contract.
9. Although the issue in these Appeals revolves around the cancellation
of allotment by UPSIDC, we deem it necessary first to address the
KNMT’s plea pertaining to the alleged frustration of the contract. To
clarify, these contentions concern the purported non-demarcation,
alleged encroachment, and non-delivery of possession of the
Subject Land by UPSIDC. For our analysis, we must collocate these
instances against the factual matrix as well as the terms of allotment
to conclusively ascertain the plausibility of frustration of the contract.
10. Firstly, on a careful scrutiny of the record, we find that though
KNMT addressed multiple communications to UPSIDC alleging
non-demarcation of the Subject Land, such communications were,
however, ex-facie an afterthought. We say so for the reason that
the site plan appended with the Allotment Letter has described
precise measurements and all other relevant details pertaining to
the Subject Land. That apart, the allotment was made on an ‘as it
is where it is’ basis.
11. In any case, UPSIDC demarcated the Subject Land on 03.03.2005
to the satisfaction of KNMT, and the latter also acknowledged such
factum vide letter dated 11.03.2005, which reads as under:
“It is to inform that the demarcation of the said land has
been made on 03.03.2005 by the department, which I
agree. Please inform the value of the stamp papers required
for the execution of the registry of the said land, so that
I may get the lease deed of the said land executed, so
that further work may be proceeded.”
688 [2025] 5 S.C.R.

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12. There is thus no merit in the contention that KNMT suffered any
prejudice due to the purported non-demarcation of the Subject Land.
13. Secondly, in so far as the encroachment at the site is concerned,
the affidavits filed by UPSIDC enumerate details of the 276 Khasra
numbers constituting the Subject Land. UPSIDC has further clarified
that possession of the said land was duly taken after completing the
acquisition process, which included payment of compensation to the
landowners. These averments are duly supported with documentary
proof. We, therefore, find that the allegation of encroachment is thus
devoid of any merit.
14. Lastly, we must consider whether UPSIDC erred in not handing over
possession of the Subject Land despite several requests made by
KNMT. In this regard, Clause 2.15 of the Manual, which deals with
the delivery of possession of plots, proves instructive. It provides that:
“2.15. POSSESSION OF PLOTS
(i) The date of Possession of Plots shall be fixed by the
Regional Manager after registration of Lease Deed itself.
(ii) That date so fixed shall be intimated to the lessor
alongwith the second copy of the lease deed and the
concerned Junior Engineer for necessary action on their
part through a letter.
(iii) Effort shall be made to hand over possession within
15 days of the registration of the lease deed as far as
practicable.
(iv) If the lessee fails to take possession even after issuance
of two letters, legal notice of the same may be issued and
action may be taken accordingly.”
15. It may be seen that UPSIDC was obligated to hand over possession
only after registering the lease deed, which was a mandatory condition.
The Clause categorically stipulates that the Regional Manager shall
fix the date of possession only ‘after registration of Lease Deed
itself’, thereby creating a sequential condition wherein registration
must precede possession.
16. That being so, it becomes pellucid that the insistence of UPSIDC to
furnish requisite documents for registration of the lease deed was
both legitimate and in conformity with the prescribed procedure.
[2025] 5 S.C.R. 689

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

Since KNMT failed to furnish the necessary documents in a timely
manner, it is itself to blame for the non-delivery of possession.
17. Our examination of all three contentions raised by KNMT reveals that
none of the alleged acts—non-demarcation, removal of encroachment,
or non-delivery of possession—constitute conduct that would frustrate
the performance of the allotment terms. On the contrary, the record
demonstrates that UPSIDC acted in accordance with prescribed
procedures and as per the terms of allotment. In contrast, KNMT failed
to fulfil its obligations, particularly regarding the timely submission of
documents required for executing the lease deed. The foundation
upon which KNMT forges its argument of frustration thus crumbles.

D.2 Issue No.2: Whether the cancellation of allotment of the
Subject Land was procedurally defective and legally untenable.
18. Adverting to the alleged illegality in the cancellation of allotment by
UPSIDC, KNMT relies on Clause 3.04 of the Manual, which prescribes
the procedure to address defaults by allottees. The relevant Clause
in this regard is reproduced in totality below for ease of analysis:
“3.04 ACTION AGAINST DEFAULTERS
In case payment is not received by 31st January/31st July
legal notice shall be issued to the defaulting allottees/
licences/lessees in the following manner.
(i) The Regional Manager shall ensure that the legal notice
in all the defaulting cases are issued by 10th February
and 10th August.
(ii) A separate file shall be opened in every Regional Office
in which the Dealing Assistant and concerned officer shall
give a certificate that notice to all defaulting allottees
have been issued. This certificate shall be verified by the
Regional Manager.
(iii) The legal notice shall be sent by Registered Post with
A/D and appropriate entry in the Legal Notice Register
shall be made. The legal notice shall be issued in terms
of the allotment letter/licence agreement/lease deed and
the period by which the payment is required shall also be
strictly in accordance with the terms of allotment letter/
licence agreement/lease deed.
690 [2025] 5 S.C.R.

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(iv) After the expiry of the period of legal notice and
confirmation of its service it shall be the responsibility of
the Dealing Assistant to process the file within 15 days. The
same shall then be put up before the Regional Manager
for his orders and instruction for cancellation or otherwise.
(v) If the Regional Manager decides not to cancel the
allotment of plot and the next due date of payment of
instalment of premium/interest has fallen, then another
legal notice shall be issued in the manner specified above.
(vi) After the expiry of the legal notice, if no payment is
received it shall be the responsibility of the concerned
officer to put up the file to the Regional Manager and obtain
his orders about cancellation of allotment or issuance of
Recovery Certificate or otherwise.
(vii) If an allottee has not paid the dues despite three
consecutive legal notices, the Regional Manager shall
be required either to cancel the allotment or send his
recommendation for issue of Recovery Certificate.
However, if Regional Manager feels that further time
should be accorded, he shall do so with the approval of
Head Office only.
(viii) List of defaulters for amount exceeding Rs.20,000/-
may be published in newspaper in the month of February/
September at least once in a year, after obtaining approval
of Head Office.”
[Emphasis Supplied]

19. A bare perusal of the above-reproduced provision reveals a well-
defined procedure prescribed to address defaults by allottees. During
arguments, KNMT placed considerable emphasis on sub-clause
(vii), contending that UPSIDC had failed to issue the stipulated three
consecutive legal notices. KNMT nevertheless conceded that the
notice dated 13.11.2006 could be considered a ‘legal notice’ within
the meaning of the aforesaid Clause. Per contra, UPSIDC maintains
that the previous correspondence dated 14.12.2004, 01.07.2005,
and 14.12.2005 also substantially satisfied the ingredients of a ‘legal
notice’ as contemplated under the Manual.
[2025] 5 S.C.R. 691

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

20. It seems to us that this issue ought to be examined through the prism
of administrative law principles vis-à-vis the contractual powers of the
State. While it is well-settled that land allotment authorities such as
UPSIDC possess the inherent right to cancel allotments upon violation
of stipulated conditions, this Court has consistently emphasized that
judicial intervention in matters concerning land revocation should be
circumscribed to ensure adherence to procedural safeguards.1 This
paradigm underscores the administrative autonomy vested in such
authorities while safeguarding allottees’ rights through procedural
fairness.
21. As already elucidated, KNMT relies upon Clause 3.04 (vii) of the
Manual to assert that non-issuance of the requisite legal notices
by UPSIDC resulted in procedural illegality. In this light, it becomes
incumbent upon us to ascertain whether the correspondence issued
by UPSIDC satisfies the threshold requirement of ‘three consecutive
legal notices’ as mandated under the said provision and, consequently,
whether the cancellation of allotment was procedurally sound. To
resolve this issue, we must determine the essential characteristics
that embody a ‘legal notice’ within the contemplation of the Manual.
22. It may be recapitulated that the notice dated 13.11.2006 has been
understood as a ‘legal notice’ by both sides. Upon comparative
analysis of the communications, particularly those dated 14.12.2004
and 14.12.2005, we find that these bear substantial similarity with
the notice dated 13.11.2006. It is beyond our comprehension as to
what prejudice has really been caused to KNMT merely because
these notices are not captioned as legal notices.
23. It further appears to us that the expression ‘legal notice’ connotes
an unambiguous communication along with legal consequences to
a noticee who is alleged to be in default. Illustratively, the essential
elements of a legal notice would include:
a. It should contain a clear and concise set of facts which convey
the information leading to the relevant circumstances. This
element is also fulfilled when reference is made to any earlier
communications issued between the concerned parties;
b. It should convey the intimation of any impending legal obligation
or breach committed by any party;

1 Dilip Singh and Ors v. State of Haryana and Ors., (2019) 11 SCC 422, paragraph 22.
692 [2025] 5 S.C.R.

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c. It should convey the intention of the party issuing the
communication to hold the other party liable to appropriate
legal action or charge; and
d. The communication in toto must be unambiguous and should
not mislead or suppress material information. If issued under a
Statute, it must comply with the relevant requirements prescribed
therein as well.
24. If the communications dated 14.12.2004, 14.12.2005, and 13.11.2006
are juxtaposed to the abovementioned ingredients, we have no
reason to doubt that these constitute valid ‘legal notices’ and thus,
UPSIDC has duly complied with the process envisaged under Clause
3.04(vii) of the Manual.
25. We may hasten to add at this stage that the dues for the Subject Land,
allotted in 2003, remained unpaid despite multiple communications
spanning several years. KNMT not only failed to make timely payments
but also sought unwarranted concessions, including waiver of interest
and rescheduling of dues. This persistent non-compliance establishes
KNMT as a chronic defaulter, while the continued attempts to seek
waiver evince a deliberate strategy to avoid payment obligations.
UPSIDC’s action in treating KNMT as a defaulter was, therefore,
both justified and necessary to preserve the integrity of the allotment
process. Allowing such deliberate defaults to persist unchecked
would undermine the entire framework of land allocation and set a
detrimental precedent.
26. For the reasons stated, we are satisfied that the cancellation of
allotment by UPSIDC is fully justified and in accordance with law.

E. Invoking The Public Trust Doctrine in The Allocation of
Resources.
27. The prolonged litigation initiated by KNMT has spanned over fifteen
years, unnecessarily burdening the judicial system and impeding the
efficient functioning of public authorities. Such protracted disputes
highlight the need for more stringent initial evaluation processes to
prevent chronic defaults.
28. While we have upheld the cancellation due to KNMT’s default, the
circumstances reveal systemic concerns in the original allocation
process. UPSIDC allotted the Subject Land to KNMT within merely
[2025] 5 S.C.R. 693

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

two months of application, raising questions about the thoroughness
of the evaluation. Furthermore, during the pendency of this dispute,
UPSIDC demonstrated remarkable alacrity in considering alternative
allotments to M/s. Jagdishpur Paper Mills Ltd.
29. We, therefore, consider it necessary to examine whether UPSIDC’s
procedure for industrial land allotment meets standards of
administrative propriety, particularly in light of the Public Trust Doctrine
(Doctrine) mandating that public resources be managed with due
diligence, fairness, and in conformity with public interest.
30. The Doctrine emanates from the ancient principle that certain
resources (seashores, rivers and forests) are so intrinsically important
to the public that they cannot be subjected to unrestricted private
control. Rooted in Roman law and incorporated into English common
law, this Doctrine recognizes that the Sovereign holds specific
resources as a trustee for present and future generations.2
31. In the Indian context, the Doctrine has evolved to encompass public
resources meant for collective benefit, reflecting the constitutional
mandate under Article 21. As held in Natural Resources Allocation
In re, while the Doctrine does not impose an absolute prohibition
on transferring public trust property, it subjects such alienation to
stringent judicial review to ensure legitimate public purpose and
adequate safeguards.3
32. When a substantial tract of industrial land is allocated without a
comprehensive evaluation, it raises critical questions about adherence
to these principles. The Doctrine requires that allocation decisions be
preceded by a thorough assessment of public benefits, beneficiary
credentials, and safeguards ensuring continued compliance with
stated purposes.
33. The allocation of 125 acres of industrial land to KNMT without a
competitive process fundamentally violated the Doctrine, which
demands proper procedure and substantive accountability in public
resource allocation.4 UPSIDC ought to have considered verifiable
evidence of economic benefits, employment generation potential,

2 M.C. Mehta v. Kamal Nath, (1997) 1 SCC 388, para 24-25.
3 (2012) 10 SCC 1.
4 Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1, para 94-96.
694 [2025] 5 S.C.R.

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environmental sustainability, and alignment with regional development
objectives to demonstrate that the decision serves the collective
benefit. The failure to adopt transparent mechanisms not only
deprived the public exchequer of potential revenue—as evidenced
by the substantial appreciation in the value of such a large tract of
land—but also created a system where privileged access supersedes
equal opportunity. This betrays the fiduciary relationship between
the State and its citizens.
34. Having upheld the cancellation due to KNMT’s chronic default,
we observe that the hasty allotment followed by years of litigation
exemplifies systemic deficiencies in the allocation process. This
necessitates comprehensive directions to ensure that future
allocations uphold principles of transparency and accountability,
thereby preventing prolonged disputes while ensuring that public
resources genuinely promote industrial development and economic
growth.

F. Conclusion and Directions
35. In light of our detailed examination of the contentions raised by the
parties, the comprehensive analysis of the factual and legal matrix
and the resultant conclusions, we uphold the cancellation of the
allotment by UPSIDC.
36. The actual allotment or any offer thereof made by UPSIDC in
favour of M/s Jagdishpur Paper Mills Ltd (Respondent No.3) for the
Subject Land is also declared to be illegal, contrary to public policy
and is consequently annulled. However, if any earnest money or
any payment has been received from the said prospective allottee,
the same is directed to be refunded along with interest at the rate
granted by the Nationalized Banks.
37. The appeals are accordingly dismissed with no order as to costs.
38. However, considering the broader implications for the transparent
allocation of public resources and the need to strengthen administrative
accountability in industrial land distribution, we deem it appropriate
to issue the following directions:
i) The State Government of Uttar Pradesh and UPSIDC are
directed to ensure that any such allotment in the future be made
in a transparent, non-discriminatory and fair manner by ensuring
[2025] 5 S.C.R. 695

Kamla Nehru Memorial Trust & Anr. v.
U.P. State Industrial Development Corporation Limited & Ors.

that such allotment process fetches maximum revenue and also
achieves the larger public interest like industrial development
priorities, environmental sustainability, and regional economic
objectives; and
ii) The Subject Land shall also be allotted strictly in accordance
with the procedure as illustrated in direction (i) above.
39. Ordered accordingly. Pending applications, if any, also stand disposed
of in the above terms.

Result of the case: Appeals dismissed.

†
Headnotes prepared by: Ankit Gyan