Holding

A State corporation’s power to resume or forfeit industrial plots must be exercised only as a last resort, with due compliance with natural justice, proper notice and reasons, and cannot be arbitrary or violative of Article 14.

Summary

The Haryana State Industrial Development Corporation (HSIDC) allotted industrial plots to various applicants under letters of allotment containing detailed payment and construction schedules. Several allottees failed to comply with the terms, leading HSIDC to issue show‑cause notices and, in many cases, to resume the plots. The allottees challenged the resumptions before the High Court, which set aside the orders and restored the plots; HSIDC appealed. The Supreme Court held that a State corporation’s power to resume or forfeit plots is a sovereign function that must be exercised only as a last resort, in accordance with natural justice, with proper notice, reasons, and without arbitrariness, lest it violate Article 14. The Court also clarified that writ courts may intervene under Article 226 when the State’s action is wholly unfair or unreasonable, even in contractual matters. Accordingly, the Court set aside the High Court’s orders of resumption, directed compensation of Rs 1,00,000 to the respondents, and ordered that any future re‑allotment be on the same terms when plots become available. The appeals were disposed of, with some allowed in part and others dismissed.

Issues considered

The validity of HSIDC’s power to resume or forfeit industrial plots without complying with principles of natural justice and Article 14.
Whether writ jurisdiction under Article 226 can be exercised in matters of contract enforcement against a State corporation.
The effect of conflicting clauses in the allotment letters (e.g., Clause 3 vs. Clauses 4 and 5) on the corporation’s right to cancel and resume plots.
The requirement for the corporation to assign reasons and consider its own conduct before exercising resumption powers.
The entitlement of allottee‑respondents to compensation and re‑allotment of plots after unlawful resumption.

Legislation cited

Constitution of Indias. Article 12, s. Article 14, s. Article 142, s. Article 226

Subjects

industrial plot allotmentresumption of landforfeiturenatural justiceArticle 14Article 226State corporationcontractual obligationsequityproportionality

Judgment

(2008] 9 S.C.R. 821

~ _...
M.D., H.S.l.D.C. AND ORS. A
v
M/S. HARi OM ENTERPRISES AND ANR.
(Civil Appeal No. 4089 of 2008)

MAY 16, 2008
B
[S.B. SINHA AND V.S. SIRPURKAR, JJ.]

Industrial development:
Power of the Corporation allotting industrial plots to re-
sort to resumption of plot or forfeiture - Held: Ordinarily such c
power should be exercised only as a last resort - Keeping in
view fact that the Corporation is under obligation to comply
with the principles of natural justice, Corporation is required to
assign reasons as to why plot had to be resumed - While do-
ing so it evidently is required to take into consideration its own
D
conduct - Construction over a plot can commence only when
... physical possession is handed over or plan for construction
of the building is approved - The Corporation cannot ignore
these relevant factors - However, if allottees fail to abide by
the terms of the contract, the Corporation could resort to re-
sumption with due notice. E

Constitution of India, 1950:
Article 226 - Jurisdiction of writ court - Held: Ordinarily

-- ... J. in matter of enforcement of contract, writ court shall not exer-
cise its jurisdiction under Article 226 - But where action of State F
is violative of Article 14 and is wholly unfair and unreason-
able, writ court would not hesitate to grant relief in favour of
person where both law and equity demand that such relief
should be granted - Each case must be considered on its
own merit - Equity G
.. Civil Appeal arising out of SLP (C) No.14074 of 2006 .
~

The appellant-Corporation has been set up as a cata-

821 H
822 SUPREME COURT REPORTS [2008] 9 S.C.R.

A lyst for promoting economic growth and accelerating the
pace of industrialization and its principal function is allot-
ment of industrial plots. Respondent no.1 applied for
allotment of 1000 sq.m. It was issued letter of allotment
on 10.1.2001. The possession was handed over only on
B 8.12.2003. Respondent no.1 filed an application for con-
struction of the building which was to be granted only by _...
the Corporation. The Corporation granted permission
only on 20.3.2004 whereafter construction started and it
was completed in May, 2005. The Corporation sent notice
c to respondent no.1 for resumption of plot on the premise
that offer of possession was issued on 1.01.2002 and the
construction activity, thus, was required to be started
within one year therefrom and production of the Unit
should have been started from the date of offer of pos-
D session.
On 3.3.2005, the plot was resumed on the premise
that respondent had violated the terms of agreement.
Appeal preferred thereagainst was dismissed. Respon-
dent filed writ petition before High Court which was al-
E lowed and the plot was restored back to respondent.
Hence the present appeal by Corporation.
Civil Appeal@ SLP (C) No.19949 of 2006
Respondents are directors of the company which
F was allotted an industrial plot. Corporation provided an
additional facility for allotment of residential plots for their
directors. Payments were made in the name of the Com-
pany although allotment had been made in the individual
names of the respondents. The allotment of the said plot
G was cancelled on the premise that payment has not been
made in terms of Clauses 4 and 5 of the offer of allotment
dated 18.07.2003. A proceeding for resumption was initi-
ated and by an order dated 1.06.2004, the said plot was
resumed. Aggrieved respondents filed writ petition. Upon
cancellation of allotment of plots in question, these plots
H
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 823
ENTERPRISES AND ANR.
~ ~
were further allotted. However, the said subsequent allot- A
tee were not impleaded as party. The High Court allowed
the writ petition on the premise that the respondents had
deposited a sum of Rs. 1,78,200/- and in view of Clause 3
of offer of allotment, it was for them to make payment in
terms thereof. Hence the appeal. B
Civil appeal arising out of SLP(C) No.19916 of 2006
Respondent applied for and was allotted an indus-
trial plot by the Appellant Corporation. Indisputably, it de-
posited a sum of Rs. 3,96,000/- being 10 per cent of the c
total cost of the said plot. It, however, was not satisfied
with the said allotment. A prayer was made to change the
plot which was accepted by the appellant Corporation.
He was allotted an alternate plot. They were, however, not
satisfied with the said allotment and made another repre-
D
'~ -t sentation for change of plot. On or about 21.9.2004, the
respondent deposited an amount of Rs. 6,00,000/- towards
15% of the total price of the plot. He was, however, re-
quired to deposit the said amount by 22.7.2004 which was
extendable by another 30 days on interest at 11% per
annum after 22.7.2004, but he failed to do so. Appellant E
took a stand that the letter of allotment elapsed automati-
cally. The amount of Rs. 3,96,000/- was directed to be re-
funded. The bank draft sent by the respondent for an
-.....
\

amount of Rs. 6,00,000/- was also returned. The respon-
-"'
dent filed a Writ Petition which was allowed. Hence the F
appeal.
Civil appeal arising out of SLP(C) no.19833 of 2006
Respondent was issued a letter of allotment in re-
spect of a plot. On the premise that respondent has not G
,,.. complied with the terms and conditions of the agreement,
)
a notice was issued on 17.4.2003. Respondent, however,
was asked to take physical possession of the land and
also to apply for extension for the purpose of starting con-
struction by the Estate Manager of the appellant Corpo- H
824 SUPREME COURT REPORTS [2008] 9 S.C.R.

~ ~
A ration by a letter dated 24.4.2003. Pursuant thereto physi-
cal possession was handed over on 6.5.2003. Respon-
dent, thereafter applied for grant of water connection on
1.7.2004. He submitted his building plan on 10.7.2004. Al-
leging that the ownership is in dispute, the plan was not
B sanctioned. The Town Planner of the appellant asked the
Corporation to ascertain ownership status before the
building plans could be cleared. From an internal com-
munication dated 21.7.2004, however, it appears that
building plans were not processed on the premise that
c ownership clearance had not come from the Corporation.
By a letter dated 23.8.2004, respondent informed the con-
cerned authority that the request of clearance of owner-
ship status was being pursued with the authorities of the
appellant.
D A show cause notice for resumption of the plot, how-
ever, was issued on 21.9.2004 alleging that construction ..,.. "'
work had not been started within a period of one and a
half year of the handing over of the possession and some
amount was outstanding. Respondents requested that the
E excess period for starting construction may be waived
by imposing some penalty. An assurance was given to
start construction on clearance of building plan and own-
ership status. A sum of Rs. 14,30,940/- had already been
deposited. Respondent filed a further reply on 22.12.2004.
F No opportunity of personal hearing was granted. By an
. ~

order dated 7.3.2005, an order of resumption was issued.
However, despite the same, letters were written by the ap-
pellant communicating the respondent in respect of cer-
tain errors in the building plans as would appear from the
letters dated 8.4.2005and10.11.2005. Building plans were
G
re-submitted by the respondent on 14.12.2005 whereto
again some defects were pointed out therein. In the mean- ....
~
time, the appellant preferred an appeal which was dis-
missed. A Writ Petition was filed which was allowed.

H Civil appeal arising out of SLP (C) No.20235 of 2006.
'===
I
j
M.D., H.S.1.D.C. AND ORS. v. M/S. HARi OM 825
ENTERPRISES AND ANR.
- ..... Respondent applied for and was allotted an indus- A
trial plot on 29.8.2001. Thereafter, a final Agreement was
entered into between the parties on 24.9.01. On 4.11.01,
physical possession was offered to the respondent, which
was not taken. Allegedly, no construction was started by
the respondent. B
..A. On 16.7.02, the appellant issued a show cause no-
tice to the respondent for its failure to take possession
and set up the industrial unit.
Respondent by its letter dated 24.2.03 requested the c
appellant for handing over the possession. In response
thereto, the respondent was asked to clear the outstand-
ing dues in regard to the second installment. Subse-
quently, the appellant by its letter dated 14.5.03, asked the
respondent to attend its office to take over the posses-
D
-. '"Y' sion of the plot. Despite being handed the possession on
17.6.03, no construction was commenced by the respon-
dent. On 29.10.03, a show cause notice was issued to the
respondent for failure to commence construction. Re-
spondent by its letter dated 7.11.2003, requested for six
months extension. Thereafter, on 7.10.2004, a show cause E
notice was issued to the respondent as to why an order
of resumption should not be passed against him. On the
failure of the respondent to satisfy ttie concerned author-
--.,.. ity with regard to the delay in commencement of the con-
.j.
struction, the plot was ordered to be resumed vide letter F
-1' dated 28.2.05. An appeal filed against the resumption or-
der was dismissed. Respondent filed writ petition which
was allowed. Hence the present appeal.
Civil appeal arising out of SLP (C) No.16541, 16708,
G
16711, 17426, 18011of2006,2331, 2702, 2343, 2891 of2007.
;.
)
In these cases, the High Court set aside the resump-
tion orders. Hence these appeals.
Disposing of the appeals, the Court
H
826 SUPREME COURT REPORTS [2008] 9 S.C.R.

A HELD: + -

Civil Appeal arising out of SLP (C) No.1407 4 of 2006.
1.1 Allotment of industrial plot keeping in view the
object and purport for which the Corporation had been
B constituted and incorporated must be held to be a gov-
ernmental function. In a case of this nature where the aim
and object of the Corporation as also the State is to en-
courage industrialization while adjusting equity, the pur-
pose for which the Sc:ieme was made would be a relevant
c factor. Only because allotment of land has been effected
through a letter, the same by itself does not make such
allotment and/ or th~ provisions contained therein to be
matters within 'private law domain' as contra-distin-
guished from 'public law domain'. The State exercises
deep and pervasive control over the activities of the Cor-
D
poration. The parties themselves agreed that despite the
fact that the Corporation is a juristic person, an appeal ~
"
againc;t its decision shall lie to the Financial Commission
of the State. Indisputably, the function of the appellant is
a sovereign function. It, in any event is a State, within the
E meaning of Article 12 of the Constitution of India. Its ac-
tion, therefore, must be fair and reasonable so as to
subserve the requirements of Article 14 of the Constitu-
tion. [Paras 17,18] [840-B-F]
.,..._
F 1.2. The letter of allotment dated 10.01.2001 indisput- ....
ably sets out the terms and conditions thereof. But, the
same is not exhaustive. The terms and conditions were
supplemented by the Corporation itself in its letter dated
20.12.2001 when offer of handing over physical posses-
sion was made, by reason whereof not only a period of
G
two years was provided for deposit of instalment along
with interest@ 18% per annum but also a provision had ...
been made that in the event of failure to adhere to the 1
schedule enumerated therein, penalty equivalent to 10%
of the amount due would be levied. It was furthermore
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 827
ENTERPRISES AND ANR

- ~ laid down that in the event of failure of the 'firm' to pay the A
amount penalty within the prescribed period, the plot
would be liable for resumption. The terms and conditions
of letter of allotment would clearly show that resumption
of the plot is not automatic. The question as to whether the
allottee had failed to comply with the terms and conditions B
was required to be determined. The terms of the contract
would have to be construed having regard to the respec-
"' tive rights and obligations of the parties to perform their part
of contract. It provides for issuance of a show cause notice.
It provides for refund of the principal amount, of course, with- c
out any interest. [Paras 19-20] [840-F,G, 841-A,B,C]
1.3. The jurisdiction of a 'State' to resort to the dras-
tic power of resumption and forfeiture ordinarily should
be undertaken as a last resort. Keeping in view the fact
that the Corporation was obligated to comply with the D
... -y
principles of natural justice and, particularly, in view of
the fact that it was required to determine the capacity as
also bona fide of an entrepreneur to start an industrial
undertaking on the plots, the Corporation was required
to assign some reasons as to why the plot in question E
had to be resumed. While doing so, it evidently was re-
quired to take into consideration its own conduct. A party
cannot take advantage of its own wrong. While a State
takes penal action against the allottee, its bona fide would
_;. be one of the relevant factors before an order of resump- F
tion and forfeiture of the amount deposited is passed. The
particulars contemplated in the letter of allotment as also
the letter of offer of possession and the procedures laid
down therefor were required to be scrupulously complied
with. The letter of allotment as also the letter of offer of
G
possession must be read conjointly. The very fact that
;
not only the amount specified therein was required to be
• paid in instalments but also with interest at the rate of 18%
per annum, was required to be borne in mind. Thus, in a
case where the allottee had complied with the terms of
H
828 SUPREME COURT REPORTS [2008] 9 S.C.R.

A allotment in the matter of payment of instalments, the +. -
same would be a relevant factor for exercising the en-
abling clause of resumption by a 'State'. Not only that, a
further opportunity was required to be given to the allot-
tee even if there was some .default on its part inasmuch
B as the appellant itself provides for levy of penalty. The
power of resumptio~ thus, must be resorted to only in a )>
case where despite grant of the opportunities contem-
plated in terms of the letter of intent were violated. [Paras
23,24] [841-E-H, 842-A-C]
c 1.4. Despite issuance of letter of offer of physical pos-
session dated 20.1 ~.2001, the fact that actual possession
had not been handed over for a period of two years is not
in dispute. The Corporation did not say that actual pos-
session was not taken by the respondent despite offer
D having been made in that behalf. It, in its anxiety to set a
time limit for ensuring that the commercial production y ...
starts at an early date, was expected at least to send a
reminder. It failed and/ or neglected to do so. For the pur-
pose of approval of the building plan, the time taken by it
E also would have been a relevant factor for passing an or-
der of resumption. While judging the conduct of the par-
ties, the appellant was obligated to judge its own conduct
in the matter. [Paras 25, 26] [842-D-G]
1.5. A law far less a contract does not warrant com- ,..
F pliance of the contractual or statutory obligations where
it is otherwise impossible to do. An entrepreneur may start
raising constructions over a plot only when the physical
possession thereof is handed over and/ or plan for con-
struction of the building is approved. A State cannot ig-
G nore these relevant factors. It may be true that ordinarily
in a matter of enforcement of a contract qua contract, a ....
writ court shall not exercise its jurisdiction under Article ~
226 of the Constitution of India. But, it is also trite that
where the action of a State is violative of Article 14 of the
H Constitution of India as being wholly unfair and unrea-
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 829
ENTERPRISES AND ANR.

- .+ sonable, the writ court would not hesitate to grant relief A
in favour of a person, where both law and equity demands
that such relief should be granted. Appellant being a
"State" within the meaning of Article 12 of the Constitu-
tion of India, it without a justification cannot make any dis-
crimination when the parties are similarly situated. More- B
over, the act on the part of the respondent must be a rea-
sonable one. When two remedies to enforce a contract
are available, the power should be exercised in reason-
able manner. So construed, a harsher remedy may not
ordinarily be resorted to. [Paras 27,28,29,30,35] [842-G, c
843-A,8,C,D, 846-G]
Mahabir Auto Stores and Ors. v. Indian Oil Corporation
and Ors. (1990) 3 SCC 752; Bharat Petroleum Corporation
Ltd. v. Maddula Ratnavalli and Ors. (2007) 6 SCC 81; ABL
International Ltd. and Anr. v. Export Credit Guarantee Corpo- D
~
ration of India Ltd. and Ors. (2004) 3 SCC 553; Sanjana M.
'f
Wig v. Hindustan Petroleum Corpn. Ltd. (2005) 8 SCC 242;
Noble Resources Ltd. v. State of Orissa and Anr. (2006) 10
SCC 236; Kumari Shrilekha Vidyarthi and Ors. v. State of UP
and Ors. (1991) 1 SCC 212; M/s Dwarkadas Marfatia and Sons E
v. Board of Trustees of the Port of Bombay (1989) 3 SCC
293; Mis. Jagdish Chand Radhey Shyam v. The State of
__,..- Punjab and Ors. (1973) 3 sec 428 - relied on.
lndu Kakkar v. Haryana State Industrial Development Cor-
A
poration Ltd. and Anr. (1999) 2 SCC 37 - held inapplicable. F

Orissa State Financial Corporation v. Narsingh Ch.
Na yak and Ors. (2003) 10 SCC 261; Teri Oat Estates (P) Ltd.
v. U. T, Chandigarh and Ors. (2004) 2 SCC 130; Sandeep
Subhash Parate v. State of Maharashtra & Ors. (2006) 8
G
SCALE 503; Jitendra Kumar & Ors. v. State of Haryana &
,,. Anr. (2007) 14 SCALE 125; State of Bihar and Ors. v.
~ Kameshwar Prasad Singh and Anr. (2000) 9 SCC 94 -r e -
ferred to.
1.6. Indisputably, the court can balance the equities H

:·~
830 SUPREME COURT REPORTS [2008] 9 S.C.R. -'

A between the parties but the same does not necessarily ..... -
mean that in all cases this Court should refuse to exer-
cise its discretionary jurisdiction. Each case must be con-
sidered on its own merit and no hard and fast rule can be
laid down therefor. In a case of this nature, this Court in ;;
B exercise of its jurisdiction under Article 142 of the Consti-
tution of India may also consider rendition of individual-
;,..
ized justice. [Paras 43, 45] [850-A-C]
Shyam Nandan Prasad and Ors. v. State of Bihar and
Ors. (1993) 4 SCC 255 - relied on.
c
State of Kera/a and Ors. v. PT Thomas (2005) 12 SCC
347 - referred to
Civil Appeal @ SLP (C) No.19949 of 2006
2. The High Court was right in holding that Clause 3
D
of the order of allotment dated 18.07 .2003, on the one
y 4..
hand, and Clauses 4 and 5, on the other, are irreconcil-
able. Payment to be made under Clause 3 cannot be sub-
ject to the stipulations contained in Clauses 4 and 5. They
are independent of each other. The allottee in terms of
E Clause 3 had an option. Mode of payment in terms of
Clause 3, on the one hand, and Clauses 4 and 5, on the
other, are distinct and different. However, the High Court
was not correct when it directed that re-allotment of land
-
would be subject to the final decision of the case. Can-
.....
F cellation of plot as also reallotment thereof had been made
in June 2004. The writ petition was filed in July, 2005. The
subsequent allottee, therefore, was a necessary party and
in his absence the writ petition should have been dis-
missed as not maintainable. By reason of the judgment
G of the High Court, the right of a third party has been af-
fected. He without having been impleaded as a party in ....
the writ petition cannot suffer an adverse order for which "1
he is no way responsible. However, the respondents were
not to be blamed for not depositing the amount. lnvoca-
H tion of Clause 4 is clearly illegal. Therefore, the respon-
M.D., H.S.l.D.C. AND ORS. v. M/S. HAR! OM 831
ENTERPRISES AND ANR.

~ ...;.. dent should be suitably compensated on monetary terms. A
The appellant is directed to pay a sum of Rs. 1,00,000/- to the
respondents. However, keeping in view the statements made
at the Bar, as and when any residential plot becomes avail-
able, the same should be allotted to the respondents on the
same terms. [Paras 58, 59, 61] [854-E-H, 855-F-H, 856-A,B] B

. Rash mi Mishra v. M. P Public Service Commission and
Ors. (2006) 12 SCC 724 - referred to .
....-
Civil appeal arising out of SLP(C) No.19916 of 2006
3. it is a clear case where the respondents have failed c
to abide by any of the terms of contract. It did not deposit
even the initial amount in time, there was no reason for it
not to do so. Even interest payable on the said amount
had not been paid. [Para 65] [857-E] .
D
Civil appeal arising out of SLP(C) no.19833 of 2006
.... -...,
4. In this case, the respondent has clearly been dis-
criminated against. Appellant's action is clearly unfair and
unreasonable. In any event, it has waived its right. Fur-
thermore, it was a case where the principles of natural E
justice should have been complied with. The High Court
has taken care to see that the object for grant of allotment
~
were fulfilled being promotion of industrial growth. Ap-
plying the principles of law, no case has been made out
for interference with the impugned judgment. [Paras 74- F
J.
76] [860-8,C,D]
Civil appeal arising out of SLP (C) No.20235 of 2006,
5. Respondent had already appointed an architect
for construction of the building. It had already started con- G
structions. The fact is that it was the Department which
.... .. did not grant any license. The Appellate Committee, how-
ever, did not consider this aspect of the matter at all and
thus the appellate orders suffered from total non-applica-
tion of mind. [Para 81] [861-D,E]
H
832 SUPREME COURT REPORTS [2008] 9 S.C.R

A Civil appeal arising out of SLP (C) No.16541, 16708, ..... .._
16711,17426,18011 of2006,2331,2702,2343,2891 of2007
6. The High Court passed an order without assign-
ing sufficient and cogent reasons. It did not arrive at a
finding of fact that the action on the part of the appellants
B was unfair and unjust. The order of High Court cannot be
upheld. But a general offer was made by the Additional )..
Solicitor General that those who intend to obtain reallot-
ment of plot may do so on payment of the price as per the
current rate as on the date of the order of the High Court.
c Several allottees had categorically made a statement that
they are ready and willing to pay the prevailing price as
fixed by the appellant- Corporation. Keeping in view the
facts and circumstances of these cases, in the event, re-
spondents offer the prevailing price as on the date of judg-
D ment of the High Court, the plot, in question, shall stand
re-allotted and should be subject to the same terms and ...,. ._
conditions. [Paras 83, 97, 98] [861-F, 869-B,C,D]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4089
of 2008
E
From the Judgment and final Order dated 28/4/2006 of
the High Court of Punjab and Haryana at Chandigarh in C.W.P.
No. 8106/2005
.......
WITH
F .lo
C.A. Nos. 4090, 4130, 4091, 4092, 4093, 4094, 4095,
4097, 4098, 4099, 4100, 4101 and 4102 of 2008
A. Sharan, A.S.G., P.S. Patwalia, Jaspal Singh, Balwant
Singh Malik, Rajiv Dhawan, Ravindra Bana, Pinky Anand, D.N.
G Goburdhan, Rajesh Ranjan, Shuruti Kakkar, Pawan S. Bindra,
Kavita Wadia, Vipin Gogia, Jaspreet Gogia, Jyoti Mendiratta,
Puneet Bali, Prabhjit Jauhar, Hittan Nehra, S.S. Jauhar, Ajay -1
Jain, Jinendra Jain, Garima Ailawadhi, Ravi Shankar Garg,
Abha R. Sharma, Aruna Singh, Kamlendra Misra, Anjali Sharma,
H J.S. Narana, Santosh Singh, Sharda Hooda, Rekesh Mudgal.

'
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 833
j ENTERPRISES AND ANR. [S.B. SINHA, J]
'
. + Ravindra Kumar Pandey, Satya Mitra, Shish Pal Laler, A
Subromonium Prasad, Veruna Bhandari Gugnani, Rameshwar
Prasad Goyal, Prasenjit Keswani, S.K. Sharma, Ajay Verma,
Gaurav Agrawal, Praveen Agrawal, Gaurav Puri, Arun Kumar
Beriwal, Gaurav Bhatia, Samir Ali Khan, Abhishck Chaudhary,
Ajay Kumar Srivastav, Sushma Manchanda and Madhu B
Moolchandani for the Apperaing Parties.
The Judgment of the Court was delivered by
S.8. SINHA, J : 1. Leave granted.
2. Validity of orders of resumption of allotment of industrial c
plots and resumption thereof by the appellants herein is in ques-
tion in this batch of appeals.
3. With a view to appreciate the questions involved herein,
the factual matrix of the matter, however, would be noticed from
D
- 'I
Civil Appeal arising out of SLP (C) No. 14074 of 2006.
Appellant - Corporation is a public sector undertaking. Its
principal function is allotment of industrial plots belonging to the
State of Haryana. It was set up as a catalyst for promoting eco-
nomic growth and accelerating the pC;lce of industrialization. It E
not only provides financial assistance to the industrial concerns

~' by way of term loans; it also develops infrastructure for setting
up of industrial units. The Corporation also invests money in
developing the industrial estates at strategic locations. In exer-
J...
cise of its functions, it also allots industrial plots to entrepre- F
neurs for setting up their industries on "no profit no loss" basis.
The entrepreneurs, according to the Corporation, must be the
deserving ones. For the said purpose, it keeps in mind the prin-
ciple that allotment of land should not be made to speculators
who invest in property for getting high returns on escalation of
G
price.
_,
~
Respondent No. 1 is a partnership firm. It was previously
known as M/s. Dysa International (Firm). It applied for allotment
of 1000 sq. m. size plot in IMT, Manesar. The Allotment Com-
H
834 SUPREME COURT REPORTS (2008) 9 S.C.R.
;
~

~ ...
A mittee of the Corporation having found the respondent to be
eligible for allotment, allotted plot No. 177 in Sector 6, IMT,
Manesar measuring 1012.50 sq. m. wherefor a letter of allot-
ment was issued on 10.01.2001.

4. We may notice the relevant clauses thereof.
B
Note appended to Clause 3 of the said letter of allotment
states that in the event of failure to comply with the terms and
conditions by the Regular Letter of Appointment (RLA) holder,
the allotment of an Industrial ploU shed, within the stipulated
c period, the RLA shall automatically lapse and 10% application
money deposited towards the cost of the ploUshed shall be re-
funded without any interest. However, if the allottee makes a
request for the surrender of the ploUshed after complying with
the terms and conditions, then the Principal amount will be re-
funded without any interest after making a deduction of 10% of
D
the cost of the plot/shed. y ....
Clause 4 provides for other Terms and Conditions gov-
erning schedule of payment of the balance 75% of the price of
plot/shed.
E Clause 6 provides for the consequences of non-payment
of the balance amount or non-fulfillment of the terms and con di-
tions of the Letter of AllotmenUAgreement. In such an event, the
r
RLA shall stand withdrawn with the resumption of the plot/shed
and refund of the deposit without any interest with 10% deduc- A
F tion.
Clause 8 provides for the Schedule of Construction and
"Going into Production". It mandates the allottee to commence
construction of building as per the approved building plans within
a period of one year from the date of the offer of possession.
G
The allottee will be required to start commercial production within
.....
a period of three years from the date of offer of possession. -i
Extension for commencement of construction can be granted
for 6 months maximum if circumstances were beyond the con-
trol of the allottee. Similarly, extension of one year can be granted
H
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 835
ENTERPRISES AND ANR. [S.B. SINHA, J]

~
,+
for commencement of commercial production for reasons be- A
yond its control and only if 10% of the permissible area has
been constructed and effective steps taken for completion of
project subject to payment of the extension fee.
An allottee will be deemed to have completed the project
if he constructs minimum 25% of the permissible covered area B
and starts commercial production within the period specified
therein.
-- Clause 14 provides for consequences of non-adherence
to the schedule of payment and schedule of implementation. In c
such an event and on an unsatisfactory reply to the show cause
notice, the HSIDC is empowered to the plot/shed and the prin-
cipal amount is to be refunded without payment of interest and
after deduction of the 10% of the plot/shed.
Clause 26 provides for the resumption of plots by HSIDC D
in the event of non-compliance of the terms and conditions after
- y
giving show-cause notice therefor. The principal amount will be
refunded without payment of interest and after deduction of the
10% of the plot/shed without interest. The allottee will be free to
remove the structure/debris within a period of 2 months of re- E
sumption order at his own cost. The allottee will not be entitled
to any payment/compensation for building constructed by it on
......- the resumed plot.
Clause 27 provides that no restoration of resumed plots
A shall be allowed. F
5. The agreement also provides for an appeal against the
order of the competent authority of the Corporation before the
Commissioner, Industries, Goveirnment of Haryana.
6. An offer of physical possession was made to the firm by G
the Corporation by a letter dated 20.12.2001 wherein the sched-
- ~
ule of payment in five instalments beginning from 1.07.2002 to
1.07.2004 was specified.
It was furthermore stipulated:
H
836 SUPREME COURT REPORTS [2008] 9 S.C.R

A " ... You are, therefore, requested to deposit the installments • ~

along with interest @ 18% per annum from the date of
offer of possession on the due dates otherwise you would
be liable to pay penalty equivalent to 10% of the amount
due and if you fail to pay the penalty within the prescribed
B period which would be specified by the Estate Manager,
the plot would be liable for resumption after affording you
opportunity of personal hearing before MD/HSIDC."

7. It, however, appears that handing over of actual pos-
session took some time and possession was handed over only
--
c on 8.12.2003. At the time of handing over of possession, the
area of the land, measurement thereof as also the boundaries
were delineated.

8. Indisputably, Respondent No. 1 herein filed an applica-
tion for construction of the building on 19.12.2003. Indisputably,
D
again the permission for construction of the buildings was to be
'(
granted only by the Corporation. The Corporation itself granted
~

permission only on 20.03.2004 whereafter the construction
started. It was completed in May, 2005.

E 9. The Corporation, however, by a letter dated 13.07.2004
asked the firm as to what steps had been taken by it for con- ·
structions of the plot in question with documentary proof as also ___,,
need to apply for extension on the premise that offer of posses-
sion was issued on 1.01.2002 and the construction activity, thus,
F was required to be started within one year therefrom and pro- A
duction of the Unit should have been started from the date of
offer of possession.
10. Respondent No. 1 intimated about the change of the
constitution of its firm. It by a letter dated 30.11.2004 categori-
G cally stated:
"We could not start the construction on the above mentioned
~
...
plot, due to some financial constraints. We are pleased to
inform you that we have been able to arrange sufficient
funds for the construction and have already started the
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 837
ENTERPRISES AND ANR. [S.B. SINHA, J]
, ..+ construction of your factory at the above mentioned plot. A
The factory will be operational within three months. Since
we have the building plans approved by your department
and have obtained temporary connections for water and
electricity, the construction is going on in full swing.
Regarding the balance amount, enclosed please find B
_J, Demand Draft No. 000433 for Rs. 908461/- drawn on
HDFC Bank. This clears our account as mentioned in
your letter. Copy of the approval of the building plan is
attached herewith for your reference."
c
11. Despite the same, as no action was taken, a legal no-
tice was issued by the Respondent No. 1 through its lawyer dated
1.03.2005 inter alia drawing its attention to :

(i) Actual physical possession had been handed over
on 9.12.2003 and the building plans were approved D
.... "( by the Corporation on or about 20.03.2004 .
(ii) Steps for construction had been intimated to the
Corporation together with a letter for extension of
time.
E
(iii) Pursuant to the show cause notice dated 2.11.2004,
a sum of Rs. 9,08,461/- had been remitted.
(iv) 25% of the construction had been completed and
despite the same the land was said to have been
resumed without issuing any show cause notice F
although the respondent had already deposited the
said sum.
12. The Corporation was asked to withdraw the said no-
tice of resumption. G
13. By an order dated 3.03.2005, however, the plot was
/>- said to have been resumed inter alia on the premise that Re-
spondent no. 1 had violated Clause 4 of the said Agreement. A
demand draft of Rs. 9,08,461 /-was not accepted and a cheque
for a sum of Rs. 6,83,349/- towards the refundable amount as H
838 SUPREME COURT REPORTS [2008] 9 S.C.R

A also the demand draft for the said sum of Rs. 9,08,461/- were
returned.

14. Admittedly, an appeal preferred thereagainst has been
dismissed.

B Respondent No. 1 aggrieved by and dissatisfied there-
with filed a writ petition before the Punjab and Haryana High
)..
Court. A Division Bench of the High Ccurt by reason of the im-
pugned judgment while setting aside the order of resumption
as also the order of the appellate authority dated 27.05.2005,
c directed:

''. .. The plot in question stands restored back to the
petitioner. The amount refunded by the Corporation to the
petitioner shall be repaid to the Corporation within a period
of two weeks from the date a certified copy of this order
D is received.
The respondent- Corporation would be at liberty to inform
.,.. .
the petitioner through a written communication, if there
are still any outstanding dues against the petitioner- firm.
On receipt of the aforesaid communication, the petitioner
E - firm shall be required to clear all the aforesaid
outstanding dues also, within a further period of two weeks
thereof. It is made clear that if the payments as notice
above are not made by the petitioner - firm, the present
petition shall be deemed to have been dismissed."
F
15. Mr. A. Saran, the learned Additional Solicitor General
appearing on behalf of the appellants, would submit:
(i) Respondent No. 1 admittedly having violated the
terms and conditions of contract, the High Court acted
G illegally and without jurisdiction in issuing the
impugned directions.
~
(ii) The High Court could not have entertained a writ
petition in a matter arising out of a contract qua
contract. It in any event it could not have condoned
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 839
ENTERPRISES AND ANR. [S.B. SINHA, J]
~
..+-
the delay in making payments. A

(iii) The High Court could not have re-written the contract.

(iv) Respondents were not only aware of the terms of
contract, they acted thereupon and as such they are
estopped and precluded from contending that the B
date of actual handing over of physical possession
would be the relevant date.

(v) In any event, as before the High Court the appellants
in their counter-affidavit categorically denied and
disputed the assertions made in that behalf by the c
respondents herein, such disputed question of fact
could not have been gone into by the High Court in
exercise of its writ jurisdiction.

(vi) Taking any view of the matter, the High Court should
D
..+ have considered as to who was to be blamed; the
'1
allottees or the Corporation and only upon arriving at
a finding of fact that the respondents were not handed
over actual physical possession despite all attempts
made by them to obtain the same, the date of
E
handing over of actual possession could have been
held to be a relevant one.

16. Mr. Puneet Bali, learned counsel appearing on behalf
of the respondent no. 1, on the other hand, would submit:

(i) Appellant in its list of dates has suppressed the fact F
f that actual physical possession had been handed
over only on 8.12.2003 and despite the fact that within
a period of seven days, the 'Firm' applied for sanction
of the building plan, the same had been issued only
on 20.03.2004, thus, the building having been G
completed within a period of 14 months and
" commercial production having been started, the
terms of the contract had not been violated.

(ii) In any event of the matter, the show cause in respect
H
840 SUPREME COURT REPORTS [2008] 9 S.C.R.

A of resumption of land could be issued only upon
demand of penalty and not prior thereto.

(iii) The action for resumption of land and/ or forfeiture
being draconian in nature could have been taken
recourse to by the Corporation only as a last resort.
B
17. Allotment of industrial plot keeping in view the object
and purport for which the Corporation had been constituted and
incorporated must be held to be a governmental function. In a
case of this nature where the aim and object of the Corporation
c as also the State is to encourage industrialization while adjust-
ing equity, the purpose for which the Scheme was made would
be a relevant factor. Only because allotment of land has been
effected through a letter, the same by itself does not make such
allotment and/ or the provisions contained therein to be matters
within 'private law domain' as contra-distinguished from 'public
0
law domain'. The State exercises deep and pervasive control
y ..
over the activities of the Corporation.
18. The parties themselves agreed that despite the fact
that the Corporation is a juristic person, an appeal against its
E decision shall lie to the Financial Commission of the State. In-
disputably, the function of the appellant is a sovereign function.
It, in any event is a State, within the meaning of Article 12 of the
Constitution of India. Its action, therefore, must be fair and rea-
sonable so as to subserve the requirements of Article 14 of the
F Constitution.
19. In the aforementioned backdrop, the issue involved in '
the matter must be determined.
The letter of allotment dated 10.01.2001 indisputably sets
G out the terms and conditions thereof. But, the same is not ex-
haustive. The terms and conditions were suppl~mented by the
Corporation itself in its letter dated 20.12.2001 when offer of
handing over physical possession was made, by reason
whereof not only a period of two years was provided for deposit
H of instalement along with interest at the rate of 18% per annum
MD, H.S.l.D.C. AND ORS. v. MIS. HARi OM 841
ENTERPRISES AND ANR. [S.B. SINHA, J]
.. ..+- but also a provision had been made that in the event of failure A
to adhere to the schedule enumerated therein, penalty equiva-
lent to 10% of the amount due would be levied. It was further-
more laid down that in the event of failure of the 'firm' to pay the
amount penalty within the prescribed period, the plot would be
liable for resumption. The terms and conditions of letter of allot- B
ment would clearly show that resumption of the plot is not auto-
-..\ matic.
r

20. The question as to whether the allottee had failed to
comply with the terms and conditions was required to be deter-
mined. The terms of the contract would have to be construed c
having regard to the respective rights and obligations of the
parties to perform their part of contract. It provides for issuance
of a show cause notice. It provides for refund of the principal
amount, of course, without any interest.
D
21. Resumption of plot, it is trite, would not be automatic.
1
22. Clause 26 provides for an enabling clause. The deci-
sion of the Corporation is not final. An appeal lay thereagainst.
23. The jurisdiction of a 'State' to resort to the drastic power
of resumption and forfeiture ordinarily should be undertaken as E
a last resort. Keeping in view the fact that the Corporation was
obligated to comply with the principles of natural justice and,
particularly, in view of the fact that was required to determine
the capacity as also bona fide of an entrepreneur to start an
industrial undertaking on the plots, the Corporation was required F
)..

to assign some reasons as to why the plot in question had to be
resumed. While doing so, it evidently was required to take into
consideration its own conduct. A party cannot take advcintage
of its own wrong. While a State takes penal action against the
allottee, its bona fide would be one of the relevant factors be- G
fore an order of resumption and forfeiture of the amount depos-
; ited is passed.
24. The particulars contemplated in the letter of allotment
as also the letter of offer of possession and the procedures laid
H
842 SUPREME COURT REPORTS [2008] 9 S.C.R.

A down therefor were required to be scrupulously complied with. ..... -
The letter of allotment as also the letter of offer of possession
must be read conjointly. The very fact that not only the amount
specified therein was required to be paid in instalments but also
with interest at the rate of 18% per annum, was required to be
B borne in mind. Thus, in a case where the allottee had complied
with the terms of allotment in the matter of payment of
instalments, the same would be a relevant factor for exercising ~

the enabling clause of resumption by a 'State'. Not only that, a
further opportunity was required to be given to the allottee even
c if there was some default on its part inasmuch as the appellant
itself provides for levy of penalty. The power of resumption, thus,
must be resorted to only in a case where despite grant of the
opportunities contemplated in terms of the letter of intent were
violated.
D 25. Despite issuance of letter of offer of physical posses-
sion dated 20.12.2001, the fact that actual possession had not
been handed over for a period of two years is not in dispute.
..
The Corporation did not say that actual possession was not
taken by the respondent despite offer having been made in that
E behalf. It, in its anxiety to set a time limit for ensuring that the
commercial production starts at an early date, was expected at
least to send a reminder. It failed and/ or neglected to do so.
For the purpose of approval of the building plan, the time taken
by it also would have been a relevant factor for passing an or-
F der of resumption. .._

26. We although do not intend to lay down a law that all the
aforementioned period should be exciuded from computation ..
for the purpose of grant of notice of resumption, but there can-
not be any doubt whatsoever that while judging the conduct of
G the parties, the appellant was obligated to judge its own con-
duct in the matter.
....
.
27. A law far less a contract does not warrant compliance
of the contractual or statutory obligations where it is otherwise
impossible to do. An entrepreneur may start raising construe-
H
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 843
ENTERPRISES AND ANR. [S.B. SINHA, J]

~ tions over a plot only when tbe physical possessioh thereof is A
handed over and/ or plan for construction of the building is ap-
proved. A State cannot ignore the aforementioned relevant fac-
tors.

28. It may be true that ordinarily in a matter of enforcement
of a yontract qua contract, a writ couri shall not exercise its ju- B

..4 risdiction under Article 226 of the Constitution of India. But, it is
also trite that where the action of a State is violative of Article 14
of the Constitution of India as being wholly unfair and unreason-
able, the writ court would not hesitate to grant relief in favour of
a person, where both law and equity demands that such relief c
should be granted.

29. Appellant being a "State" within the meaning of Article
12 of the Constitution of India, it without a justification cannot
make any discrimination when the parties are similarly situated.
D
[See Mahabir Auto Stores and Others Vs. Indian Oil Corpora-
'
..., tion and Others [(1990) 3 SCC 752, para 12]
30. Moreover, the act on the part of the respondent must
be a reasonable one. [See Bharat Petroleum Corporation Ltd.
Vs. Maddula Ratnavalli and Others [(2007) 6 SCC 81, para E
16]

31. This Court in ABL International Ltd. and Another v.
Export Credit Guarantee Corporation of India Ltd. and Others
[(2004) 3 sec 553] laid down the law in the following terms:
~ F
"28. However, while entertaining an objection as to the
maintainability of a writ petition under Article 226 of the
(
Constitution of India, the court should bear in mind the fact
that the power to issue prerogative writs under Article 226
of the Constitution is plenary in nature and is not limited by
G
any other provisions of the Constitution. The High Court
having regard to the facts of the case, has a discretion to
...... ,. entertain or not to entertain a writ petition. The Court has
imposed upon itself ceiain restrictions in the exercise of
this power. (See Whirlpool Corpn. v. Registrar of Trade
H
844 SUPREME COURT REPORTS [2008] 9 S.C.R

A Marks) And this plenary right of the High Court to issue a
prerogative writ will not normally be exercised by the Court
to the exclusion of other available remedies unless such
action of the State or its instrumentality is arbitrary and
unreasonable so as to violate the constitutional mandate
B of Article 14 or for other valid and legitimate reasons, for
which the Court thinks it necessary to exercise the said
jurisdiction."

[See also Sanjana M. Wig v. Hindustan Petroleum
Corpn. Ltd. (2005) 8 SCC 242 and Noble Resources Ltd. v.
C State of Orissa and Another (2006) 10 SCC 236]
32. In Kumari Stiri/ekha Vidyarthi and Others v State of
UP and Others [(1991) 1 SCC 212], this Court opined that
even in contractual matters the State cannot act arbitrarily, stat-
D ing:
"31 ... This decision clearly shows that no doubt was .,. .
entertained about the applicability of Article 14 of the
Constitution to an action of the State or its instrumentality,
even where the action was taken under the terms of a
E contract of tenancy which alone applied by virtue of the
exemption granted under the Rent Act excluding the
applicability of the provisions thereof."

33. Referring to Mis Dwarkadas Marfatia and Sons v.
Board of Trustees of the Port of Bombay [(1989) 3 SCC 293],
F this Court held: --
"24. The field of letting and eviction of tenants is normally
governed by the Rent Act. The Port Trust is statutorily
exempted from the operation of the Rent Act on the basis
of its public/governmental character. The legislative
G
assumption or expectation as noted in the observations
of Chagla, C.J. in Rampratap Jaidayal case cannot make
such conduct a matter of contract pure and simple. These
corporations must act in accordance with certain
constitutional conscience and whether they have so acted.
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 845
ENTERPRISES AND ANR. [S.B. SINHA, J]

+ must be discernible from the conduct of such corporations. A
In this connection, reference may be made on the
observations of this Court in Som Prakash Rekhi v. Union
of India reiterated in M.C. Mehta v. Union of India wherein
at p. 148 this Court observed: (SCC p. 480, para 55)

"It is dangerous to exonerate corporations from the need B
to have constitutional conscience ; and so, that
....
interpretation, language permitting, which makes
governmental agencies, whatever their mien, amenable
to constitutional limitations must be adopted by the court
as against the alternative of permitting them to flourish as c
an imperium in imperio."

25. Therefore, Mr Chinai was right in contending that every
action/activity of the Bombay Port Trust which constituted
"State" within Article 12 of the Constitution, in respect of
D
any right conferred or privilege granted by any statute is
' -. subject to Article 14 and must be reasonable and taken
only upon lawful and relevant grounds of public interest."
34. When time granted is flexible, the constructions of the
term may not lead to a conclusion that it is imperative in charac- E
ter. In M/s. Jagdish Chand Radhey Shyam v. The State of
Punjab and Others [(1973) 3 SCC 428], this Court while inter-
preting Sections 8 and 9 of the Capital of Punjab (Develop-

- ;...
ment and Regulation) Act, 1952 in the context of Article 14 and
19(1) (f) of the Constitution of India, held as under:
"13. Section 9 speaks of resumption of the site or building
F

by the Estate Officer and forfeiture of the whole or part of
the money paid on account of consideration in the case of
non-payment of consideration money or instalment or
breach of any condition of transfer or breach of any rule. G

,... 14. Under the ordinary law of the land it is open to the
~ Government to enforce the charge and to recover the due
on consideration money, instalments or any other due from
the transferee. It is also open to the Government und!J{
H
.,:
846 SUPREME COURT REPORTS [2008] 9 S.C.R.

A Section 8 of the Act to proceed against the transferee to ~
realise the amount due on consideration money or on
instalment or any other due as an arrear of land revenue.
Section 8 provides penalty for default in payment of money
and the recovery of the same as an arrear of land revenue.
B These remedies are deterrent and drastic.
15. Section 9 of the 1952 Act empowers the Government
>..
to forfeit the whole or any part of the money in case of non-
payment of consideration money or instalments or other
dues for breach of covenants. Under the ordinary law of
c the land there is relief against forfeiture for breach of
covenant or provisions. Section 9 does not offer any relief
against forfeiture. This feature that the Government can
proceed either under the ordinary law of the land or under
the 1952 Act shows that there is discrimination. There is
{J nothing in the statute to guide the exercise of power by the
Government as to when and how one of the methods will
be chosen.
16. SectinP 9 confers power to resume the site. There is
a charge on the land for the unpaid consideration money.
E ·r his charge can be enforced by instituting a suit in a court
of law. The owner will have the opportunity of paying the
money and clearing the property of the charge. On the
other hand when the Government proceeds under Section
r
9 of the Act, to resume the land or building the Government
proceeds under the Pun1ab Public Premises and Land ~
..
(Eviction and Rent Recovery) Act, 1959. There is no
guidance in the Act, as to when the Government will resort
to either of the remedies."

·~
\.;)
35. Although the provisions of the aforementioned Act are
not 2pplicahle i"'I the ir.stant case, Jagdish Chand (supra) is
bPing rpferred fnr showing t~·at when two remedies to enforce a ...... '
sc~ntrar.t are available, tt .c power should be exercised in rea- ...
sonable manner. So construed, a harsher remedy may not ordi-
narily be resorted to.
H
.r
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 847
ENTERPRISES AND ANR. [S.B. SINHA, J]

, ~ 36. The learned Additional Solicitor General places strong A
reliance upon a decision of this Court in lndu Kakkarv. Haryana
State Industrial Development Corporation Ltd. and Another
[(1999) 2 SCC 37]. Therein the lady had assigned her interest.
One of the questions which arose for consideration was as to
whether such transfer was valid having regard to the locus standi 8
of the appellant therein. What was emphasized was that as a
rule the party cannot transfer its liabilities under the contract
without consent of the other party. It was in the aforementioned
context, this Court considered the question of locus standi of
the appellant therein holding:
c
"19. In fact, the question is not whether there is any legal
bar for the allottee to make assignment of the plot. The
real question is whether the assignee has a legal right to
claim performance of any part from the allottor. The answer
of the said question depends upon the terms of allotment. D
Assignment by an act of the parties may cause assignment
~
of rights or of liabilities under a contract. As a rule, a party
to a contract cannot transfer his liabilities under the contract
without consent of the other party ... "
The said decision, in our opinion, cannot be said to have E
any application.

37. Reliance has also been placed on Orissa State Fi-
nancial Corporation v. Narsingh Ch. Nayak and Others [(2003)
.., 10 SCC 261] for the proposition that a writ court would not di-
... F
rect writing off the amount due or waiver of the interest, stating:
"... The order, to say the least, was beyond the scope of
the writ petition which was being considered by the High
Court and beyond the jurisdiction of the Court in a
contractual matter. No doubt, while exercising its G
extraordinary jurisdiction under Article 226 of the
,. Constitution the High Court has wide power to pass
appropriate order and issue proper direction as necessary
in the facts and circumstances of the case and in the
interest of justice. But that is not to say that the High Court H
848 SUPREME COURT REPORTS [2008] 9 S. C.R.

A can ignore the scope of the writ petition and nature of the ~ ....
dispute and enter the field pertaining to contractual
obligations between the parties and issue such directions
annulling the existing contract and introducing a fresh
contract in its place."
B 38. The High Court, in our opinion, has not re-written the
contract nor waived the rights and obligations of the parties.

39. We may notice that in Teri Oat Estates (P) Ltd. v. U. T,
Chandigarh and Others [(2004) 2 SCC 130), a Bench of this
c court while interpreting the provisions of Section 8-A of the Ca pi-
ta! of Punjab (Development and Regulation) Act, 1952 opined
that power of resumption and forfeiture should be taken recourse
to as a last resort. While holding that each case may have to be
viewed on its own facts, the action of the statutory authority must
be judged on the touchstone of Article 14 of the Constitution of
D
India.
Y'
40. This Court applied the doctrine of proportionality hav-
ing regard to a large number of decisions operating in the field.
This Court, however, also put a note of caution that no order
E should be passed only on sympathy or sentiment.

41. Doctrine of proportionality has since been applied in
Sandeep Subhash Parate v. State of Maharashtra & Ors.
[(2006) 8 SCALE 503) and Jitendra Kumar & Ors. v. State of
Haryana & Anr [2007 (14) SCALE 125 : (2008) 2 SCC 161).
F ....
42. In State of Bihar and Others v. Kameshwar Prasad
Singh and Another [(2000) 9 sec 94] whereupon strong reli-
ance has been placed by Mr. Jaspal Singh to contend that in a
given case, this court may not exercise its discretionary juris-
diction under Article 136 of the Constitution of India even if the
G
order is found to be illegal. This court was concerned with a
service matter. It was held: ..-
...
"36. It is further contended that as the respondent was, in
the meantime, appointed/promoted in the IPS cadre and
H as per requirements of the State Government he has
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 849
ENTERPRISES AND ANR. [S.B. SINHA, J]
, ~ already submitted his resignation from the State service, A
the acceptance of the appeal and setting aside the
directions of the High Court would result in great hardship
to him and amount to unsettling his settled service rights
particularly when his promotion/appointment to the IPS
cadre has not been challenged and is not in dispute. Such B
a plea by itself cannot be accepted as a ground to dismiss
the appeal filed against an order which we have held to be
illegal being contrary to law and the Service Rules
applicable in the case. Once the judgment is set aside,
the consequences have to follow and a person taking c
advantage or benefit of the wrong orders is to suffer for
his own faults which cannot be attributed to anybody else.
However, in appropriate cases this Court can mould the
relief to safeguard the interests of a person wherever
required. For doing complete justice between the parties,
D

-,
;
appropriate directions can be given to protect the interests
of a person who is found to have been conferred the
benefits on the basis of judicial pronouncements made in
his favour. As the appellant State has been found to be
careless and negligent in defending its cases, we feel
and are inclined to protect the interests of Brij Bihari E
Prasad Singh, respondent. We are convinced that the
interests of justice would be served by holding that despite
setting aside the judgments of the High Court, his interests
be protected by not disturbing his promotions made from
),._
time to time. However, judgments passed in his favour F
cannot be permitted to be made a basis for conferment of
similar rights upon other persons who are shown to have
filed writ petitions or representations which, if accepted,
are likely to adversely affect the interests of more than
150 Inspectors and 400 officers in the rank of Deputy SP. G
Similarly, if any benefit has been conferred upon any other
_,
,. person who has superannuated, no useful purpose would
be served by directing his demotion retrospectively and
. recovery of the excess emoluments paid to him."
H
850 SUPREME COURT REPORTS [2008] 9 S.C.R.

A 43. Indisputably, the court can balance the equities be- +- .
tween the parties but the same does not necessarily mean that
in all cases this Court should refuse to exercise its discretion-
ary jurisdiction. Each case must be considered on its own merit
and no hard and fast rule can be laid down therefor.
B 44. We would consider the question about the balancing
equities between the parties in each individual case.
45. In a case of this nature, this Court in exercise of its
jurisdiction under Article 142 of the Constitution of India may
c also consider rendition of individualized justice. [See Shyam
Nandan Prasad and Others v. State of Bihar and others (1993)
4 sec 255]
46. Our attention has been drawn to the fact that the Punjab
High Court in some of the matters in Jaisy Designs v. MD.
D HSIDC [decided on 4th July, 2006] had issued similar direc-

.-
tions. A Bench of this Court, however, dismissed the special r
leave petition being SLP (C) No. 12074 of 2006 by an order
dated 7.08.2006.
47. However, another Bench of this Court in Civil Appeal
E arising out of SLP (C) No. 20235 of 2007, presumably, without
noticing the said order directed issuance of notice by an order
dated 4.12.2006. Following the said decision, even other
Benches had issued notice in other matters including Civil Ap-
peal arising out of SLP (C) No. 14074 of 2006.
F ....
48. Reliance has been placed on State of Kera/a and 0th-
ers v. PT Thomas [(2005) 12 SCC 347] where this Court hav-
ing regard to the orders passed in number of cases in regard to
payment of interest dismissed the appeals inter alia taking into
consideration the said factor. However, in PT Thomas (supra)
G
it was not the sole consideration. This Court noticed that pay-
ment of interest was not an issue in the main writ petition and
~
that was the principal reason in dismissing the appeal.
49. We have noticed hereinbefore that in Kameshwar
H Prasad Singh (supra), this court made a clear distinction be-
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 851
ENTERPRISES AND ANR. [S.B. SINHA, J]

~
tween an order which is illegal and, thus, the order being illegai A
the benefit thereof would not be extended to persons similarly
situated on the premise that Article 14 is a positive concept.
50. In the instant case, the High Court's jurisdiction is in
question. The learned counsel for the parties have addressed
us at great length on the individual merit of the matter. B

51: We, therefore, are of the opinion that on the said ground
alone, we would not refuse to interfere.
52. In Civil Appeals arising out of SLP (C) No. 17426 of
2006, no opportunity had been given to the appellants to file c
counter affidavit. Even the High Court had proceeded on the
basis that equity demands that they should be given some ex-
tension of time to perform their part of contract. It was submit-
ted that even the doctrine of proportionality is applicable in these
cases in view of the decision of this Court in Teri Oat Estates D
(P) Ltd. (supra).
53. The conscious decision taken by the appellant that all
allotments should be regularized in the event the respondents
pay the difference between the amount which has already been
paid and theI rate prevailing on the . date of judgment of the High E
.
Court should be made applicable.
54. The learned counsel would contend that even for the
said purpose, suitable instalments could be fixed.
...._
CIVIL APPEAL@ SLP (C) No. 19949 of 2006 F

HSIDC v. Sanjay Bansal
55. Respondents herein are directors of M/s. Shiv Shakti
Embroidery Pvt. Ltd. (Company). The Company was allotted
an industrial plot. An additional facility was granted to the ind us- G
trial undertakings for allotment of residential plots for their di-
rectors. Pursuant to and in furtherance of the said policy deci-
• sion to grant additional benefit, the respondents were allotted
residential plot No. 331 in Sector 1, Manesar. The terms and
conditions provided for a schedule of payment, the relevant H
852 SUPREME COURT REPORTS [2008] 9 S. C.R.

A clauses whereof read as under: ... .
"3. The balance amount of Rs. 10,69,200/- of the tentative
price of the plot can be paid in lumpsum without interest
within 60 days from the date of issue of the allotment letter
or in six (6) half yearly installments. The first installment will
B fall due after the expiry (6) six months of the date of issue
of this letter. Each installment would be recoverable
together with the interest on the balance price at 15%
interest on the remaining amount the interest shall,
however, accrue from the date of offer of possession.
c
4. You are requested to remit Rs. 1, 78,200/- in order to
make the 25% price of the said plot within 30 days (upto
17 .08.09) from the date of issue of this letter. The payment
shall be made by the Bank Draft payable to the HSIDC,
Panchkula and drawn on any scheduled bank at Panchkula.
D
In case of failure to deposit the said amount within the
above specified period, the allotment shall be cancelled
and the 10% earnest money deposited along with the
application shall stand forfeited to the HSIDC against which
you shall have no claim for damage.
E
5. The balance 75% amount i.e. Rs. 8,91,000/- of the
above price of the plot can be paid in lumpsum without
interest within 60 days from the date of issue of the allotment
letter or in half yearly installments. The first installment will
F fall due after the expiry of six months of the date of issue
of this letter. Each installments would be recoverable "'
together with interest@ 15% interest per annum on the
remaining amount as mentioned in clause No. 21."
56. Payments were made in the name of the Company
G although allotment had been made in the individual names of
the respondents herein. The allotment of the said plot was can-
celled on the premise that payment has not been made in terms ..
of Clauses 4 and 5 of the offer of allotment dated 18.07.2003. A
proceeding for resumption was initiated and by an order dated
H 1.06.2004, the said plot was resumed. Aggrieved by and dis-
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 853
ENTERPRISES AND ANR [S.S. SINHA, J]

~ satisfied therewith, a writ petition was filed. A
The respondents in their rejoinder averred:

" ... Upon cancellation of the allotment of plot in question,
the said plot was included in the list of plots available for
allotment and pursuant to invitation of applications for B
allotment of plots by way of advertisement in Newspapers,
a draw of lots was held on 1.6.2004, wherein 215 residential
plots including the plot in question were further allotted
and the plot in question stands allotted to Shri Suresh
Chand Jain s/o Shri Hussan Lal Jain, resident of E-12, c
Bahubali Enclave, Near Geetanjli Apartments,
Karkardooma, New Delhi. Hence, the present petition is
liable to be dismissed on account of this score alone."

57. However, the said subsequent allottee was not im-
pleaded as a party. The High Court allowed the writ petition on D
i the premise that the respondents had deposited a sum of Rs.
1,78,200/- and in view of Clause 3 of offer of allotment, it was
for them to make payment in terms thereof. In regard to the pur-
ported conflict between Clauses 3 and 4, the High Court opined:
"If clause 3 is in conflict with clause 4, the petitioners cannot E
be blamed to have opted for the concession available to
them in clause 3. At no point of time, the respondent
Corporation had ever chosen to clarify that the petitioners
were required to make the payment exclusively in terms of
clause 4 of the letter of allotment. On account of F
inconsistency between the provisions of clauses 3 and 4
of the letter of allotment, confiscatory orders of cancellation
could not have been passed by the Corporation against
the petitioners.
G
At this stage, we may notice that even as per the petitioners
and as per the schedule of payment, by way of instalments,
the petitioners were liable to make payment of the entire
amount of plot upto July 2, 2006. However, they could not
make the payment of instalments on account of cancellation H
854 SUPREME COURT REPORTS [2008] 9 S.C.R.

A order and on account of the fact that the present writ
petition has been pending in this Court.

We further notice that a plea raised by the petitioners is
that the order dated October 28, 2004 had never been
communicated to them. The petitioners have even
B maintained that the said order had been ante-dated by
the Corporation. The respondent Corporation has however
maintained that the said order was duly passed, although
no details have been given as to when the said order had
ever been communicated to the petitioners. We must also
c take note of the pleas raised by the respondent
Corporation that in pursuance to an advertisement on
March 2, 2004, 215 residential plots including plot No.
331 had been allotted by way of draw of lots held on June
1, 2004. However, no details of any such allottee have
D been given in the written statement. While issuing notice
of motion, this Court had specifically directed that the re-
allotment of the land allotted to the petitiones would be
subject to the final decision of the case."

58. We agree with the High Court that Clause 3 of the said
E offer of the order of allotment dated 18.07 .2003, on the one
hand, and Clauses 4 and 5, on the other, are irreconcilable.
Payment to be made under Clause 3 cannot be subject to the
stipulations contained in Clauses 4 and 5. They are indepen-
dent of each other. The allottee in terms of Clause 3 had an
F option. Mode of payment in terms of Clause 3, on the one hand,
and Clauses 4 and 5, on the other, are distinct and different.
However, the High Court was not correct when it directed that
re-allotment of land would be subject to the final decision of the
case.
G
59. Cancellation of plot as also reallotment thereof had
been made in June 2004. The writ petition was filed in July,
2005. The subsequent allottee, therefore, was a necessary party
and in his absence the writ petition should have been dismissed
as not maintainable.
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 855
ENTERPRISES AND ANR. [S.B. SINHA, J]

60. This Court in Rashmi Mishra v. M.P Public Service A
+
Commission and others [(2006) 12 SCC 724] observed:
"16. In Prabodh Verma this Court held: (SCC pp. 273-
74, para 28)

"The first defect was that of non-joinder of necessary B
parties. The only respondents to the Sangh's petition were
the State of Uttar Pradesh and its officers concerned. Those
who were vitally concerned, namely, the reserve pool
teachers, were not made parties - not even by joining
some of them in a representative capacity, considering c
that their number was too large for all of them to be joined
individually as respondents. The matter, therefore, came
to be decided in their absence. A High Court ought not to
decide a writ petition under Article 226 of the Constitution
without the persons who would be vitally affected by its
D
judgment being before it as respondents or at least by
some of them being before it as respondents in a
representative capacity if their number is too large, and,
therefore, the Allahabad High Court ought not to have
proceeded to hear and dispose of the Sangh's writ petition
without insisting upon the reserve pool teachers being E
made respondents to that writ petition, or at least some of
them being made respondents in a representative
capacity, and had the petitioners refused to do so, ought
to have dismissed that petition for non-joinder of
necessary parties." F
(See also All India SC & ST Employees' Assn. v. A. Arthur
Jeen and lndu Shekhar Singh v. State of U.P.)"
61. By reason of the judgment of the High Court, the right
of a third party has been affected. He without having been im- G
pleaded as a party in the writ petition cannot suffer an adverse
order for which he is no way responsible. A statement has been
+-
made before us by the learned Additional Solicitor General that
no residential plot is available for allotment. He, however, sub-
mits that as and when such a plot is available, the same would H
856 SUPREME COURT REPORTS (2008) 9 S.C.R.

A be offered to the respondent. We may place on record the afore- +
mentioned submission. However, we feel that the respondents
were not to be blamed for not depositing the amount. lnvoca-
tion of Clause 4 is clearly illegal. We, therefore, are of the opin-
ion that the respondent should be suitably compensated on
8 monetary terms. We direct the appellants to pay a sum of Rs.
1,00,000/- to the respondents herein. We, however, also direct
that keeping in view the statements made at the Bar, as and
when any residential plot becomes available, the same should
be allotted to the respondents on the same terms.
c 62. Civil Appeal arising out of SLP (C) No. 19949 of 2006
is allowed in part and to the extent mentioned hereinbefore.

Civil Appeal arising out of SLP(C) No. 19916 of 2006

H.S.l.D.C. &Anr. v.. Mr. Ved Govil &Anr.
D
63. Respondent applied for and was allotted an industrial
plot at Manesar, Gurgaon by the Appellant Corporation. lndis-
putably, it deposited a sum of Rs. 3,96,000/- being 10 per cent
of the total cost of the said plot. It, however, was not satisfied
with the said allotment. A prayer was made to change the plot
E which was accepted by the appellant Corporation. He was al-
lotted a plot No. 269 in Sector 7 on or about 9.7.2004. They
were, however, not satisfied with the said allotment and made
another representation for change of plot. On or about
21.9.2004, the appellant deposited an amount of Rs. 6,00,000/
F - towards 15% of the total price of the plot. He was, however, .-4
required to deposit the said amount by 22.7.2004 which was
extend able by another 30 days on interest at 11 % per annum
after 22.7.2004, but he failed to do so. Appellant took a stand
that the letter of allotment elapsed automatically. The amount of
G Rs. 3,96,000/-was directed to be refunded. The bank draft sent
by the respondent for an amount of Rs. 6,00,000/- was also
returned. The respondent filed a Writ Petition. +
64. The High Court was of the opinion that although re-
spondent was required to deposit 15% of the price of plot on or
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 857
ENTERPRISES AND ANR [S.B. SINHA, J]

....... before 22. 7.2004, but by clause 3 of the Letter of Allotment, the A
said amount could be deposited by him within 60 days. The
High Court accepted that there had been a delay on the part of
the appellant. The interim order was passed directing the ap-
pellant to re-allot the plot, however the same was not allotted.
The High Court directed: B
"Keeping in view the facts and circumstances of the case,
as noticed in the above portion of the judgment, we allow
the present petition and restore the allotment of plot No.
269, Sector 7, Manesar to the petitioner as per original
terms of allotment. Since the petitioner was required to c
pay the entire amount, even by way of instalments upto
January 16, 2007, therefore, the petitioner is directed to
make the total payment of the entire amount towards the
cost of the plot in question within a period of three months
from the date a certified copy of this order is received. On D
receipt of the entire payment, the actual physical
~
possession of the plot in question shall be handed over to
the petitioner. The petitioner shall, however, remain bound
by all the terms and conditions of the letter of allotment."

65. It is a clear case where the respondents have failed to E
abide by any of the terms of contract. It did not deposit even the
initial amount in time, there was no reason for it not to do so.
Even interest payable on the said amount had not been paid.
The appeal should, therefore, be allowed.
F
Civil Appeal arising out of SLP(C) No. 19833 of 2006

H.S.l.D.C. & ORS. v. M/s. Paradise Engineers & Anr.
66. A plot admeasuring 1012 sq. meters being plot No.
985, Sector-6, Manesar was allotted in favour of the respon-
G
dent. He requested for a change of plot. However, a regular
letter of allotment was issued on 23. 1.2001. The final agree-
t"
ment was entered into on or about 20.9.2001. However, pos-
session was delivered on 31. 10.2001.

67. On the premise that respondent has not complied witb H
858 SUPREME COURT REPORTS [2008] 9 S.C.R.

A the terms and conditions of the agreement, a notice was is- ~

sued on 17.4.2003. Respondent, however, was asked to take
physical possession of the land and also to apply for extension
for the purpose of starting construction by the Estate Manager
of the appellant Corporation by a letter dated 24.4.2003. Pur-
B suant thereto physical possession was said to have been
handed over on 6.5.2003. Respondent, thereafter applied for
grant of water connection on 1. 7.2004. He submitted his build- ...
ing plan on 10.7.2004. Alleging that the ownership is in dispute,
the plan was not sanctioned. The Town Planner of the appellant
c asked the Senior Manager of the Corporation to ascertain own-
ership status before the building plans could be cleared. From
an internal communication dated 21.7.2004, however, it ap-
pears that building plans were not processed on the premise
that ownership clearance had not come from the Corporation.
By a letter dated 23.8.2004, respondent informed the concerned
D
authority that the request of clearance of ownership status was
~
being pursued with the authorities of the appellant.

68. A show cause notice for resumption of the plot, how-
ever, was issued on or about 21.9.2004 alleging that construe-
E tion work had not been started within a period of one and a half
year of the handing over of the possession and some amount
was outstanding.
69. Respondents in their show cause, brought the afore-
mentioned fact to the notice of the concerned authority of the
F ....
appelalnt. It was requested that the excess period for starting
construction may be waived by imposing some penalty. An as-
surance was given to start construction on clearance of build-
ing plan and ownership status. It was pointed out that the sum of
Rs. 14,30,940/- had already been deposited.
G
70. Respondent filed a further reply on 22.12.2004. No
opportunity of personal hearing was granted. By an order dated
-t
7.3.2005, an order of 1esumption was issued. Howeve.r, despite
the same, letters were written by the appellant communicating
the respondent in respect of certain errors in the building plans
H
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 859
ENTERPRISES AND ANR. [S.B. SINHA, J)

_.._ as would appear from the letters dated 8.4.2005 and A
10.11.2005.
71. Building plans were re-submitted by the respondent
on 14.12.2005 whereto again some defects were pointed out
therein. In the meantime, the appellant preferred an appeal which
was dismissed by the Commissioner by an Order dated B

..... 16.2.2006 .
72. A Writ Petition was filed which by reason of the im-
pugned judgment has been allowed.

In the Writ Petition inter alia a contention was raised that c
the appellant had regularized the delay by extending the period
of construction even for a period of four years in favour of the
parties named therein which was not denied or disputed. It
claimed parity with the decision of the High Court in case of M/
s. Jassi Designs Versus Managing Director, HSIDC and 0th- D
ers being C.W.P. No. 4530 of 2005. The SLP preferred there-
~
against has been dismissed.
73. Mr. Prasenjit Keswani, the learned counsel appearing
on behalf of the respondent would submit;
E
(i) The principles of natural justice have not been
complied with as no opportunity of personal hearing
was given to it. The order of resumption did not
contain any reason, there is nothing to show that the
+. points raised deserved due consideration at the F
hands of the concerned authorities.
(ii) The respondent had been discriminated with insofar
as the persons similarly situated had been granted
extension even for a period of four years and thus
the respondent was not meted with equal"treatment. G
{iii) Appellants could have cleared the building plan as
r the same was filed within the stipulated period.
(iv) Appellant cannot take benefit of their own wrong.
H
860 SUPREME COURT REPORTS [2008] 9 S.C.R.

A (v) All dues with interest have already been paid.
74. In view of clause 10 of the contract, the respondent
being not permitted to transfer the land, it was bound to engage
itself only in industrial activity wherefor the allotment was ob-
tained.
8
In this case, the respondent has clearly been discriminated
against. Appellant's action is clearly unfair and unreasonable. ~
In any event, it has waived its right Furthermore, it was a case
where the principles of natural justice should have been com-
e plied with.
75. The High Co;Jrt in, this case, in its impugned judgment
has taken care to see that the object for grant of allotment were
fulfilled being promotion of industrial growth.
76. Applying the principles of law as indicated hereinbe-
0
fore, we are of the opinion that no case has been made out for
our interference with the impugned judgment. This appeal is, ~
therefore, dismissed.
Civil Appeal arising out of SLP(C) No. 20235 of 2006
E H.S.l.D.C. & Ors. Vs. Mr. Anand Minda & Anr.
77. Respondent applied for and was allotted an industrial
plot vide its Regular Letter of Allotment dated 29.8.2001 at !MT,
Manesar. Thereafter, a final Agreement was entered into be-
F tween the parties on 24.9.01. On 4.11.01, physical possession
was offered to the respondent, which was not taken. Allegedly,
no construction was started ~y the respondent.
78. On 16.7.02, the appellant issued a show cause notice
to the respondent for its failure to take possession and set up
G the industrial unit
79. Respondent vide its letter dated 24.2.03 requested
the appellant for handing over the possession. In response -t
thereto, the respondent was asked to clear the outstanding dues
H in regard to the second installment. Subsequently, the appellant
(

M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 861
ENTERPRISES AND ANR. [S.B. SINHA, J]

by its letter dated 14.5.03, asked the respondent to attend its A
office to take over the possession of the plot. Despite being
handed the possession on 17.6.03, no construction was com-
menced by the respondent. On 29.10.03, a show cause notice
was issued to the respondent for failure to commence construe- ·
tion. Respondent vide its letter dated 7.11.2003, requested for B
six months extension. Thereafter, on 7.10.2004, a show cause
notice was issued to the respondent as to why an order of re-
sumption should not be passed against him. On the failure of
the respondent to satisfy the concerned authority with regard to
the delay in commencement of the construction, the plot was c
ordered to be resumed vide letter dated 28.2.05. The resump-
tion order was challenged before the Commissioner of Indus-
tries, who, vide its order dated 13.1.2006, dismissed the same.

80. Feeling aggrieved by the order, the respondent herein
filed a Writ petition before the High Court. The High Court by its D
order dated 28.7.2006, allowed. the said Writ Petition and
quashed the order of resumption.
81. Respondent had already appointed an architect for
construction of the building. It had already started constructions. E
The fact that it was the Department which did not grant any li-
cense. The Appellate Committee, however, did not consider this
aspect of the matter at all and thus the appellate orders suf-
fered from total non-application of mind.

82. This Appeal is, therefore, dismissed. F
83. We may now consider the cases where the High Court
passed an order without assigning sufficient and cogent rea-
sons. It did not arrive at a finding of fact that the action on the
part of the appellants was unfair and unjust. We intend to notice
the fact of these matters separately. G
Civil Appeal arising out of SLP (C) No. 16541 of 2006
HSIDC v. S.R. Polysteel

84. Respondent applied for and was allotted an industrial H:
,
862 SUPREME COURT REPORTS [2008) 9 S.C.R.

A plot in Industrial Estate IMT, Manesar, by the Appellant Corpo-
ration. Allegedly, a dispute arose as regards handing over of
the actual possession of the said plot. Respondents contend
that the entire 1'' installment along with interest was duly paid
within the stipulated time except for delay of 22 days. lndisput-
B ably, the appellant offered the respondent possession of the
plot and asked to commence construction by its letters dated
19.12.2001, 9.8.2002 and 11.11.2003. Respondents contend
that thoug~ a request was made to hand over possession by its
letter dated 2.8.02 however, the same was not granted.
C 85. Two show-cause notices dated 1.3.05 and 19.5.05
were issued by the appellant to the respondent. After giving an
opportunity of personal hearing to the respondent, the said plot
was resumed on 7. 7 .05. Respondent filed a Writ Petition be-
fore the High Court which was disposed of on 8.08.2006 di-
D reeling the allottee to appear before the Appellate Authority.
Thereafter, the appellate authority dismissed the said appeal.
Respondent then filed a Writ Petition before the High Court.
The High Court while allowing the petition quashed the resump-
tion order and directed the respondent to complete the con-
E struction of the industrial building within a period of six months
from the date of offer of the possession of the plot.
Civil Appeal arising out of SLP (C) No. 16708 of 2006
HSIDC v. M/~. Dulari Exports
F 86. Respondent applied for and was allotted an industrial
plot vide its allotment letter dated 14.6.2000 at IMT, Manesar.
On 14.8.2000, a Regular Letter of Allotment was issued to the
respondent which inter-alia required it to commence construc-
tion of the building within a period of one year and commercial
G produC:tion within a period of three years from the date of offer
of possession. The said clause was also incorporated in an
Agreement dat~d 8.9.00 entered into between the two parties ..
Indisputably, on 24.12.01, the appellant issued a receipt for ac-
ceptance of three demand drafts to the respondent towards pay-
H men! of the installments. On 8.1.03, a show cause notice was
r
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 863
ENTERPRISES AND ANR. [S.S. SINHA, J]

issued by the appellant to the respondent regarding the failure A
to set up the industrial unit. On 1.1.04, a show cause notice was
issued to the Respondent as to why the said plot should not be
resumed in view of non-commencement of construction and non-
payment of the 4th and 5th installments. Being dissatisfied by
the reply so rendered by the respondent, the appellant gave the B
respondent an opportunity of retaining the plot by allowing him
to convey his acceptance to buy the plot at the current price of
Rs. 2200/- per sq. meter.

87. Aggrieved by the order of resumption, the respondent
preferred an appeal before the Commissioner of Industries on c
9.2.04. The said appeal was rejected by the Commissioner on
the ground that the order of resumption was not final. Aggrieved
by the two orders, the respondent filed a Writ Petition in the
High Court.
D
...(
88. The High Court while dismissing the Writ Petition on
the ground that an appeal was pending before an appropriate
. authority, however allowed the respondent to file its objections
against the order of resumption. On 26.2.04, the respondent
filed its objections. On 23.11.2004, the High Court dismissed
the Writ Petition directing the appellant to consider and dis- E
pose off the objections. On 27.6.2005, the objections were dis-
missed by the appellant on the ground that the said plot had
become liable for resumption. However, before resumption, an
opportunity was given to the respondent to retain the plot at the
current price of Rs. 2200/- per sq. meter. The same having not F
being accepted by the respondent. the objections were rejected
by the appellant and the amount was refunded as per the terms
of the Agreement. Aggrieved by the said order, the respondent
preferred an appeal before the Commissioner. On 12.7.05, the
appellant issued a letter to the respondent intimating the with- G
drawal of the possession of the plot. Aggrieved by the order
and during the pendency of the appeal before the commissioner,
the respondent filed a Writ Petition before the High Court on
18. 7.2005. On 8.5.2006, the High Court without going into the
merits of the case, allowed the Writ Petition. H
864 SUPREME COURT REPORTS [2008] 9 S.C.R.

A Civil Appeal arising out of SLP (C) No. 16711 of 2006
HSIDC v. Gopal Chand Kapoor

89. Respondent applied for and was allotted an industrial
plot vide its Regular Letter of Allotment dated 26.6.2000 at IMT,
B Manesar. An Agreement containing the terms and conditions of
the allotment was executed between the two parties on
12.9.2000. Physical possession of the plot was taken over on
28.2.2003.

Civil Appeal arising out of SLP (C) No. 17426 of 2006
c
HSIDC v. Prateek Industries

90. Respondent applied for and was allotted an industrial
plot vide its Regular Letter of Allotment dated 22.10.1998 at
Growth Centre lnvestate Bawal, District Rewari. Physical pos-
D session of the plot was offered on 21.5.02. However, the respon-
dent failed to take over the possession. On 21.4.04, the appel-
lant issued a show-cause' notice to the respondent directing him
to start commence construction within a period of two years and
to implement the project on or before 21.5.05. The respondent
E intimated the appellant that the construction would start immedi-
ately and requested for a three year extension period. On
17.1.2005, the appellant issued a show-cause notice to the re-
spondent for delay in taking the physical possession of the plot
---
and for non-commencement of construction. Vide its letter dated
F 31.1.05 the respondent informed the appellant that due to loss in
its business, they were unable to continue industrial activity and
had decided to surrender the plot. It thus requested for a refund.
On 25.2.06, the respondent requested for a personal hearing.
After hearing the respondent in person, the appellant passed an
G order of resumption. Aggrieved by the said order, the respon-
dent filed a Writ Petition before the High Court. By its order dated
25.8.06, the High Court set aside the Resumption order.

Civil Appeal arising out of SLP (C) No. 18011 of 2006

HSIDC v. G.M. Precision
H
M.D., H.S.l.D.C. AND ORS. v. MIS. HARi OM 865
ENTERPRISES AND ANR. [S.B. SINHA, J]

~ 91. Respondent applied for and was allotted an industrial A
plot vide its Regular Letter of Allotment (RLA) dated 13.3.02 at
IMT, Manesar. On 12.4.02, a final Agreement was entered into
between the parties incorporating the terms and conditions of
the allotment letter. On 18.11.2003, the respondent took physi-
cal possession of the plot. On 2.11.04, a show-cause notice B
was issued to the respondent on account of its failure to com-
mence construction and default in making the payment of the
4th and 5th installments. Due to unsatisfactory reply of the re-
spondent by his letter dated 14.12.04, the appellant resumed
the plot by its order dated 18.2.05. Aggrieved by the said order, c
the respondent on 11.11.1999 filed an appeal before the Fi-
nancial Commissioner Industries. The said appeal was dis-
missed by the commissioner on the basis that it was devoid of
any merit. Feeling aggrieved by the order of resumption and
the order dismissing the appeal, the respondent filed a Writ
D
Petition before the High Court. By an order dated 7.8.06, the
High Court set aside the order of resumption.
Civil Appeal arising out of SLP (C) No. 2331 of 2007
HSIDC v. Matesh Kumar Katya!

--
E
92. Respondent applied for and was allotted an industrial
..
~·
plot vide its Regular Letter of Allotment (RLA) dated 9.4.01 at
Kundli Industrial Estate. On 11.04.01, a final agreement was
entered into between the parties incorporating the terms and
conditions of the allotment letter. Vide its letter dated 3.5.01 the F
appellant offered the respondent the physical possession of the
plot. On 24.12.03, the appellant issued a show-cause notice to
the respondent for failure to commence construction as well as
commercial production within the stipulated time. Respondent
on grounds of illness of his mother and other financial constraints
G
requested for an extension to commence construction. Vide its
letter dated 18.1.05 the appellant passed an order of resump-
.,. tion of the plot against the respondent and refunded his cheque
after making the necessary deductions. Aggrieved by the said
order, the respondent on 14.1.05 filed an appeal before the Fi-
H
866 SUPREME COURT REPORTS [2008] 9 S.C.R.

A nancial Commissioner Industries. Vide its letter dated 28.8.06, ....
the appellant informed the respondent that the commissioner
had dismissed his appeal by an order dated 1.8.06 on the
ground that it was devoid of any merit. Being aggrieved by the
order of resumption and the order dismissing the appeal, the
B respondent filed a Writ Petition before the High Court. On
5.12.06, the High Court set aside the order of resumption.

Civil Appeal arising out of SLP (C) No. 2702 of 2007

HSIDC v. At Home India P. Ltd.
c 93. Respondent applied for and was allotted an industrial
plot vide its Regular Letter of Allotment (RLA) dated 24.5.04 at
IMT, Manesar. Allegedly, the petitioner requested the appellant
vide its letters dated 15.6.04 and 05.7.04 to change the site of
the plot on the ground that the area where it was so situated
D was not developed. Allegedly, on 19.8.04, the respondent met
the appellant for the change of plot who were then informed that
the plot could not be changed. On 22.7.04, the RLA lapsed. On
23.8.04, the respondent remitted 15% of the cost of the plot.
Vide its letter dated 12.1.05, the appellant cancelled the allot-
E ment and refunded the amount paid by the respondent on the
ground that he had failed to comply with clause 3 of the Allot-
ment letter providing for the payment and thus the RLA had
lapsed automatically. On 19.1.05, the respondent requested the
-
appellant to reconsider his case. Vide its letter dated 21.3.05
F the appellant informed the respondent that his request had been
rejected and refunded the amount so paid. Aggrieved by the
said order, the respondent preferred an appeal before the Com-
missioner of Industries which by its order dated 13.1.06, dis-
missed the appeal. Aggrieved by the order of the commissioner,
on 4.9.06, the respondent filed a Writ Petition before the High
G
Court. The High Court by its order dated 5.12.06 while allowing
the Writ Petition, quashed the letter dated 12.1.05 and the ap-
~
pellate order on the premise that the respondent had always
showed his eagerness to initiate construction and the delay in
making the payment had been on account of a genuine belief
H
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 867
ENTERPRISES AND ANR. [S.B. SINHA, J]
~ by the respondent that the request for an alternative plot was A
='
pending before the appellant
Civil Appeal arising out of SLP (C) No. 2343 of 2007
HSIDC v. RMDK Projects
94. Respondent applied for and was allotted an industrial B
plot vide its Regular Letter of Allotment (RLA) dated 23.1.01 at
IMT, Manesar. Thereafter, a formal Agreement was entered into
between the parties incorporating the terms and conditions of
the RLA. Allegedly, the respondent made various requests to
the appellant for delivering the physical possession of the plot c
after making necessary developments. On 19.12.01, the ap-
pellant issued a letter thereby offering the respondent physical
possession of the plot. On the other hand, on 24.2.03, the ap-
pellant issued a notice to the respondent to show-cause why
the plot should not be resumed on account of its failure to com- D
ply with the terms and conditions of the allotment letter. Subse-
quently, two more show-cause notices dated 13.10.03 and
8.12.03 were issued. Allegedly, an authorization letter dated
10.2.04 was issued to the respondent for taking over the physi-
cal possession. Allegedly, the respondent by its letter dated E
4.2.04 requested the appellant to hand over the possession of
the plot. Thereafter by its letter dated 15.2.05, the respondent
I gave an undertaking to the appellant to commence construe-
tion immediately, if it delivered the possession of the plot. On
+. 7.2.05, the appellant issued a notice to the respondent to show- F
cause as to why the plot should not be resumed in light of the
default made. On being unsatisfied by the reply of the respon-
dent vide its letter dated 15.2.05 to the show-cause notice, the
appellant passed an order of resumption of the plot on 7.7.05.
Being aggrieved by the said order, the respondent on 5.08.05
G
preferred an appeal before the Commissioner of Industries. Vide
its letter dated 19.4.06, the appellant informed the respondent
that the commissioner had dismissed his appeal by an order
dated 13.1.06 on the ground that it was devoid of any merit.
Being aggrieved by the order of resumption and the order dis-
H
868 · SUPREME COURT REPORTS [2008] 9 S. C.R.

A missing the appeal, on 25.6.06, the rel?pondent filed a Writ
Petition before the High Court. The High Court, by its judgment
and final order dated 27 .11.06, set aside the order of resump-
tion.

Civil Appeal arising out of SLP (C) No. 2891 of 2007
B
HSIDC v. Trikuta

95. Respondent applied for and was allotted an industrial
plot vide its Regular Letter of Allotment (RLA) dated 30.6.99 at
Industrial Estate, EPIP, Kundli. On 18.1.00, on a request made
C by the respondent, the allotment of the said plot was changed
due to a change in the constitution of the respondent's com-
pany. Subsequently, on 20.1.00, a supplementary agreement
was entered into between the parties. As per the terms of the
new Agreement, the respondent was to commence construc-
D tion within a period of six months. Appellant issued two show-
cause notices to the respondent dated 14.8.00 and 26.2.01 for
its failure to commence construction. Vide its letter dated
7 .11.01, the respondent sought extension of time to start con-
struction and commercial production.
E
96. Upon the new Industrial Infrastructure Development
Policy coming into force, the appellant extended the time for
implementation of the project to three years i.e. up to 29.6.02.
Allegedly, the respondent made several requests by its various
letters dated 26.2.03, 07.5.03, 18.5.03, 20.6.03 and 29.8.03
F for extension of time which was purportedly rejected or not con-
sidered by the appellant. On 22.1.03, a show-cause notice was
issued by the appellant to the respondent to explain why a re-
sumption order should not be passed for non-erection of the
building within the stipulated time. After being given a personal
G opportunity of hearing on 18.6.03, the appellant vide its letter
dated 27.8.03 resumed the plot and requested the respondent
to collect the cheque of the amount deposited by him. Allegedly,
the order of resumption was passed against the respondent
without a personal hearing. Being aggrieved by the said order,
H the respondent on 28.9.03 preferred an appeal before the Com-
M.D., H.S.l.D.C. AND ORS. v. M/S. HARi OM 869
ENTERPRISES AND ANR. [S.B. SINHA, J]

~ missioner of Industries. Vide its letter dated 28.8.06, the appel- A
lant informed the respondent that the commissioner had dis-
· missed his appeal by an order dated 1.8.06 on the ground that
it was devoid of any merit. Being aggrieved by the order of re-
sumption and the order dismissing the appeal, on 9.10.06, the
respondent filed a Writ Petition before the High Court. The High B
Court, by its judgment and final order dated 12.12.06, set aside
~
the order of resumption.
97. In all these cases, it is difficult to uphold the order of
the High Court. But a general offer was made by the learned
Additional Solicitor General that those who intend to obtain re- c
allotment of plot may do so on payment of the price as per the
current rate as on the date of the order of the High Court.
98. Before us, several allottees had categorically made a
statement that they are ready and willing to pay the prevailing
D
price as fixed by the appellant- Corporation. Keeping in view the
,,., facts and circumstances of this cases, we are of the opinion that
in the event, respondents offer the prevailing price as on the date
of judgment of the High Court, the plot, in question, shall stand re-
allotted and should be subject to the same terms and conditions.
Such reallotment may be made even in cases where we have E
found the order of the High Court to be unsustainable.
99. Respondents shall deposit the amount within six weeks
from date. Appellant shall hand over the possession of the plot, in
~ question, within four weeks thereafter. The highest executive of F
Appellant - Corporation shall see to it that the order of this Court
is complied with. It is, however, made clear that in the event of
failure on the part of the respondents concerned in making pay-
men! in terms of this order, it would be open to the appellant to.
take recourse to such action as is permissible in law.
G
100. Subject, of course, to the directions issued in indi-
~ vidual cases, the appeals are disposed of. In the facts and cir-
cumstances of the case, there shall be no order as to costs.
D.G. Appeals disposed of
H