Holding

The writ petition is maintainable; CIDCO’s cancellation is void, and the High Court’s dismissal was erroneous.

Summary

Popcorn Entertainment applied to CIDCO for a plot to build a multiplex; CIDCO allotted the plot, the appellant paid the full price and a lease agreement and commencement certificate were issued. CIDCO later cancelled the allotment, invoking Section 23 of the Indian Contract Act (public policy) and the lack of a tender. The appellant filed a writ petition under Article 226, which the High Court dismissed on the ground that an alternative civil remedy was available. The Supreme Court held that the writ petition was maintainable because CIDCO’s action was without jurisdiction, violated natural justice, and infringed the appellant’s right to equality under Article 14. Consequently, the Court set aside CIDCO’s cancellation order, remitted the matter to the High Court for fresh disposal, and directed a time‑bound hearing.

Issues considered

The writ petition under Article 226 is maintainable despite the existence of an alternative civil remedy.
Whether CIDCO’s cancellation of the allotment is void under Section 23 of the Indian Contract Act as being opposed to public policy.
Whether the principles of natural justice were violated in the cancellation process.
Whether the cancellation infringes the appellant’s fundamental right to equality under Article 14.
Whether CIDCO had jurisdiction to rescind a concluded lease agreement without a tender.

Legislation cited

Subjects

writ petitionArticle 226contractual disputealternative remedypublic policySection 23natural justiceArticle 14land allotmentCIDCOmultiplextender

Judgment

-1' MIS. POPCORN ENTERTAINMENT AND ANR.
' A
v.
CITY INDUSTRIAL DEVELOPMENT CORPN. AND ANR.

FEBRUARY 23, 2007

[DR. AR. LAKSHMANAN AND ALTAMAS KABIR, JJ.] B

y
Constitution of India, 1950: Article 226

Writ petition-Maintainability of-Alternative remedy-Contractual
matters-Allotment of plot-Cancellation of-Plot for construction of a c
multiplex was allotted lo a developer after considering the facts that there
were no multiplexes in that area and the earlier effort to advertise for such
plots had met with no response-Developer paid the entire price demanded
by the Corporation-Agreement of lease was entered into-Commencement
certificate lo start construction on the plot was issued to the developer-
D
Subsequently, the allotment was cancelled on the grounds that the allotment
~
was void in view of S. 23 of the Contract Act as being opposed to public
policy and that the allotment was without issuance of tender-Agreement of
lease was cancelled and the possession of the plot was sought to he resumed.:_
Writ petition dismissed by the High Court on the ground of availrl'ility of
alternative remedy-Correctness of-Held: In the instant case, 3 of the 4 E
grounds on which writ petitions can he entertained in contractual matters
were made out and hence it was completely wrong on the part of the High
Court to dismiss the writ petition-Hence, writ petition was clearly
maintainable and the High Court has committed an error in relegating the
appellant to the civil court-Matter remitted to High Court for disposal
afresh on merits.
F

The appellant made an application for allotment of a plot for construction
of a multiplex. The first respondent-Corporation approved the allotment in
favour of the appellant considering the facts that there were no multiplexes
in that area and the earlier effort of the first respondent to advertise for such G
plots had met with no response. The first respondent issued allotment letter
I. in favour of the appellant and asked the appellant to pay the balance price of
the plot. The appellant also paid further sums as demanded by the first
respondent from time to time. The appellant entered into an agreement of

17 H
18 SUPREME COURT REPORTS (2007] 3 S.C.R.

A lease with the first respondent. The first respondent issued a commencement
certificate to the appellant to start construction on the plot. Subsequently, the
first respondent issued a letter cancelling the allotment on the grounds that
the allotment was void in view of Section 23 of the Contract Act, 1872 as being
opposed to public policy and that the allotment was without issuance of tender.
B The first respondent also issued a letter by which the agreement of lease was
cancelled and the possession of the plot was sought to be resumed.

Being aggrieved the appellant filed a writ petition before the High Court
against the cancellation of the allotment. The High Court dismissed the writ
petition on the ground of availability of an alternative remedy. Hence the
C appeal
Disposing of the appeal, the Court

HELD: I. The High Court has committed a grave mistake by relegating
the appellant to the alternative remedy when clearly in terms of the law laid
D down by this Court, this was a fit case in which the High Court should have
exercised its jurisdiction in order to consider and grant relief to the respective
parties. In the instant case, 3 of the 4 grounds on which writ petitions can be
entertained in contractual matters were made out and hence it was completely
wrong on the part of the High Court to dismiss the writ petition. In the instant
case, 3 grounds, as referred to in Whirlpool Corporation, have been made
E out and accordingly the writ petition was clearly maintainable and the High
Court has committed an error in relegating the appellant to the civil court.
(Para 44] (33-F, G, HJ

Whirlpool Corporation v. Registrar of Trademarks, (1998] 8 SCC 1,
relied on.
F
Smt. Gunwant Kaur v. Municipal Committee, (1969] 3 SCC 769, Century
Spinning & Manufacturing Company Ltd v. The Ulhasnagar Municipal
Council, (1970] 1 SCC 614, Harbanslal Sahnia v. Indian Oil Corporation
Ltd, (2003] 2 SCC 107, Corporation of the City of Bangalore v. Bangalore
G Stock Exchange, (2003] 10 SCC 212, ABL International ltd. v. Export Credit
Guarantee Corporation of India Ltd., (2004] 3 SCC 553, Sanjana M. Wig
(Ms.) v. Hindustan Petroleum Corporation Ltd., (2005( 8 SCC 242, Amey
Cooperative Housing Society Ltd. v. Public Concern/or Governance Trust,
(2007) 2 SCALE 405, Mohinder Singh Gill v. C.E.C., [1978( l SCC 405, Union
of India v. D.G. Nambudiri, (1991( 3 SCC 38, Pavanendra Narayan Verma v.
H Sanjay Gandhi PG! Medical Science, (2002] 1 SCC 520, Chandra Singh v.
POPCORN ENTERTAINMENT'· CITY INDUSTRIAL DEVELOPMENT CORPN. J9

-1 State of Rajasthan, (20031 6 SCC 545, Hazi Mas/an v. Kera/a Financial A
Corporation, (19881 1 SCC 166, Printers (Mysore) ltd. v. M.A. Rasheed,
(2004( 4 SCC 460, Chairman & MD BPL Ltd. v. SP. Gururaja, (200318 SCC
567, Kera/a State Electricity Board v. Kurien E. Kelathil, AIR (2000) SC 2573,
National Highways Authority of India v. Ganga Enterprises, (20031 7 SCC
410 and Rajureshwar Associates v. State of Maharashtra, (200416 sec 362, B
referred to.

2. While developing a new township the objective of the planning
Y authorities is not to earn money but to provide for systematic and all-round
development of the area so that the purpose of setting up the township is
achieved by more and more people wanting to live in the area in view of the C
various amenities being provided in the area. Considering this objective in
mind, the allotment made in favour of the appellants cannot be faulted with
and this Court will accordingly set aside the orders of City Industrial
Development Corporation (CIDCO) seeking to resile from a concluded
contract in favour of the appellants. (Para 451 [34-C-DI
D
3. It is also pertinent to mention that CIDCO in the show cause notice
has taken the ground of non-issuance of tender as the only basis for
cancelling the allotment and CIDCO in the final order has also confined itself
to the non-issuance of tender as the ground for cancellation but in the reply
to the writ petition, CIDCO is seeking to add further grounds to justify the E
order of cancellation, which is clearly not permissible in terms of the law
laid down by this Court in several of its decisions. (Para 461 (34-E)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 940 of2007.

From the Judgment and Final Order dated 30.6.2006 of the High Court
of Judicature at Bombay in Writ Petition No. 9467 of2005. F
WITH

C.A. No. 941 of2007.

Vikas Singh, A.S.G., Amritam Narayan, Yunus Malik, Shiva Lakshmi, G
Prashant Chaudhary for the Appellants.

Altaf Ahmad, Varun Thakur, Sanjay Dubey, A.S. Bhasme for the
Respondents.

H
20 SUPREME COURT REPORTS (2007] 3 S.C.R.

A The Judgment of the Court was delivered by

DR. AR. LAKSHMANAN, J. SLP (C) No. 11085 of2006.

1. Leave granted.

B 2. The above appeal was filed against the final judgment and order
dated 30.06.2006 passed by the High Court of Judicature at Bombay in W.P.No.
9467 of 2005 whereby the High Court has rejected the writ petition filed by
the appellants by holding that the appellants have an equally efficacious
remedy of filing a civil suit and thus the writ jurisdiction cannot be invoked.

C 3. BACKGROUND FACTS:

4. The appellant made an application for allotment of a plot on 18.05.2004
for construction of a multiplex at Kharghar railway station. The first respondent,
The City Industrial Development Corporation (in short, "CIDCO") asked the
appellants to pay an EMD of Rs. 20 lacs being 10% of the tentative price of
D the plot in order to consider the application of the appellant. The appellant
deposited the said amount of EMD immediately. CIDCO, vide its Board
Resolution dated 03.06.2004, approved the allotment in favour of the appellant
considering the fact that there were no multiplex in the area and the earlier
effort ofCIDCO to advertise for such plots had met with no response. CIDCO
E issued allotment letter in favour of the appellant asking the appellant to pay
Rs.1,80,00,000/- lacs being the balance price of the plot. The appellant made
two separate payments of Rs. 90 lacs each towards the balance price of the
plot on 16.08.2004 and 19.08.2004. The appellant paid a sum ofRs.20,00,600/
- being the other charges demanded by the respondent. The appellant was
asked to pay a further sum of Rs.65,096/- which the appellant paid immediately.
F CIDCO unilaterally decided to ask the appellants to pay a further sum of Rs.20
lacs by enhancing the rate at which the plot was to be allotted to the appellant
from Rs.2500/- per sq. metre as demanded in the allotment letter to Rs.2,750/
- per sq. metre because the plot of the appellant was on a 24 metre road. The
appellant on 17.11.2004 paid a further payment of Rs.20 lacs along with
G Rs.2,96,078/- plus Rs.4,957/- being the additional cost and the other charges.
On 14.01.2005, the appellant paid a further sum of Rs.19,828/- being the sum
demanded by the respondent. The appellant on 17.01.2005 entered into an
agreement to lease with the respondent for the allotment of the plot. On
28.02.2005, CIDCO being the Development Authority of the area issued
commencement certificate to the appellant permitting the appellant to start
H construction. On 14.07.2005, the appellant received a show cause notice
POPCORN ENTERTAINMENT'· CITY INDUSTRIAL DEVELOPMENT CORPN. [LAKSHMANAN. J.] 2J

seeking to cancel the allotment in favour of the appellant on the ground that A
the allotment was void in view of Section 23 of the Contract Act as being
opposed to public policy. The main ground in the show cause notice was that
the allotment was without issuance of tender and was opposed to public
policy. On 27 .07 .2005, the appellant submitted a detailed reply to the show
cause notice. On 16.12.2005, CIDCO issued an order canceling the agreement B
to lease and sought to resume the possession of the plot. According to the
appellant only the appellant was singled out for cancellation whereas hundreds
of allotments made without issuance of tender were allowed to remain which
is also a matter of record. In these facts, on 28.12.2005, the appellant
approached the High Court by way of writ petition against the said cancellation
order dated 16.12.2005. The writ petition was numbered as 9467 of2005 on C
02.01.2006 and the High Court granted stay of the order dated 16.12.2005 and
fixed the matter for further hearing on 04.01.2006. The appellant, vide reference
dated 08.03.2006 of CIDCO, under the Right to Information Act, 2005 has
asked them to supply information regarding the allotments made by Social
Service Department without any advertisement i.e. by considering individual
applications. D
5. On 16.03.2006, the appellants filed their rejoinder before the High
Court pointing out further information sought under the Right to Information
Act which clearly proved that the allotment in favour of the appellant was
completely in order and was made in terms of the Land Pricing and Land
Disposal Policy and also that there was no loss caused to CIDCO in the said E
allotments. The appellant sought another information from the CIDCO
Authorities regarding methodology for allotment of plots for service industries,
warehousing, multiplexes, etc. Again on 04.04.2006, the appellant had sought
for further information in respect of 15 cases similar to the case of the
appellants regarding whether disposal was by tender or without tender, whether F
) the pricing policy was adopted or not etc. Further information was sought on
13 .04.2006 regarding allotment of social facility plots during April, 2003 to
March, 2005. CIDCO, vide their letter dated 13.04.2006, has informed the
appellant that during April, 2003 to March, 2005, 27 plots were allotted for the
opening of schools, 9 plots were allotted for opening of colleges, 5 plots were
allotted to charitable and religious institutions, 9 plots were allotted to cultural G
organizations, 2 plots was allotted for sports and 13 plots were allotted for
social welfare. In all 65 plots were allotted under the category of social facility.
CIDCO has also confirmed that all the allotments had been made without
issuance of tender and that all the abovementioned allotments have been
made as per Land Pricing and Land Disposal Policy of CIDCO i.e. the same H
22 SUPREME COURT REPORTS [2007) 3 S.C.R.

. A as was done in the case of the appellant. None of these allotments have been
cancelled by CIDCO till date. In this view of the matter, it is clear that the
entire basis for seeking to cancel the appellant's plots is illegal and the same
cannot stand the test of judicial scrutiny.

6. On 20.04.2006, the appellant filed an additional affidavit before the
B High Court pointing out certain more information sought by the appellant. On
17.05.2006, the matter was listed before the High Court and was adjourned for
4 weeks to examine the judgment passed by the High Court in the case of
Raja Bahadur Mills. The matter was again listed on 30.06.2006 for hearing. The
matter was heard and dismissed and the Court indicated that the detailed
C judgment would be pronounced later. At that stage, counsel for the appellants
made a specific prayer to grant interim protection to the appellant for a period
of 4 weeks to enable the appellant to approach this Court, the said prayer was
orally granted by the High Court. However, on 06.07.2006, the High Court,
while issuing a copy of the order on 06.07.2006, dismissed the writ petition
of the appellant on the ground of availability of alternative remedy. The High
D Court rejected the prayer for interim protection to the appellant despite having
granted it orally.

7. Aggrieved by the said order, the appellants filed this appeal by way
of specia'. leave petition before this Court.

8. This Court on 24.07 .2006 issued notice returnable within 6 weeks and
E
also passed the following interim order:

"The petitioners had the benefit of stay of dispossession. There will
be stay of dispossession pending further orders. But the petitioners
will be restrained from putting up any construction until further orders."

F 9. SLP (C) NO. 11087 OF 2006

l 0. Leave granted.

11. The above appeal was filed against the final judgment and order
dated 30.06.2006 passed by the High Court of Judicature at Bombay in W.P.No.
G 9468 of 2005 whereby the High Court rejected the writ petition on the ground
that the writ jurisdiction cannot be invoked when an equally efficacious
remedy of filing a civil suit is available.

I2. BACKGROUND FACTS:

H 13. The appellant made an application on 22.02.2004 requesting for
POPCORN ENTERTAINMENT, . CITY INDUSTRIAL DEVELOPMENT CORPN [LAKSHMANAN. J] 23

_, allotment of plot reserved for multiplex. On 8.6.2004, the appellants made a A
request for allotment of the plot in Airoli for setting up multiplex-cum-
auditorium-cum-entertainment centre. CIDCO, in response to the said
application, requested the appellant to submit a detailed project defining all
built up activities. The appellant submitted the detailed project report. CIDCO,
by their letter of intent, requested the appellant to pay an EMO of Rs.
20,77,000 within 15 days from the receipt of the letter to enable the Board to
B
consider the allotment in favour of the appellant. The appellant accordingly
made the EMO on 29.06.2004. On 29.07.2004, CIDCO approved the allotment
y of plot No.2, Sector 11, Airoli in favour of the appellant as the Board had not
got any response for similar plots in public tender. The total lease premium
in respect of the plot was Rs.2,07,70,000/- and the appellants were directed c
to pay the balance amount of Rs.J,86,93,000/- by 14.09.2004. The allotment
was made in terms of the New Bombay Land Disposal Rules, 1975 and also
"y
in terms of the Land Pricing and Disposal Policy of CIDCO under which the
land could be allotted to any person by considering his individual application
at the reserved price fixed by CIDCO. On 16.08.2004 and 13.09.20~4, the
appellants paid Rs.1,86,93,000/- as demanded. On 15.10.2004, CIDCO after D
inspection of the plot issued a corrigendum asking the appellants to pay a
.., further sum of Rs.53,236/- being the additional amount due to the marginal
increase in the demarcation of the plot. The appellant paid the balance amount
ofRs.53,236/- thus making a total payment ofRs.2,08,22,420/- being the full
and final payment in respect of allotment in favour of the appellant as E
demanded by CIDCO. An agreement to lease was entered into with CIDCO
in respect of the plot allotted to the appellant. CIDCO, on 01.08.2005, issued
a show cause notice to the appellants regarding the plot at Airoli seeking to
cancel the agreement to lease executed in favour of the appellants. The
appellant made a detailed reply to the show cause notice. The appellant also
sought information from CIDCO under the Right to Information Act on F
). 21.12.2005/03.04.2006/04.04.2006/13 .04.2006/20.04.2006 regarding allotment to
various parties and the details thereon. The appellant, on 28.10.2005,
approached the High Court against the cancellation order dated 18.12.2005.
The writ petition was listed for hearing on 02.01.2006 and the High Court
granted stay of the operation of the order dated 18.12.2005. Parties were asked G
to file their reply and rejoinder etc. in the writ petition. The matter was listed
on 17.05.2006 for hearing and was adjourned by 4 weeks and again listed
before the High Court on 30.06.3006 for hearing and the matter was heard and
dismissed and the Court indicated that the detailed judgment would be
pronounced later. However, on 06.07.2006, the High Court dismissed the writ
petition of the appellant on the ground of availability of alternative remedy H
24 SUPREME COURT REPORTS [2007) 3 S.C.R.

A and rejected the prayer for interim protection to the appellant despite having
granted it orally. Aggrieved by the said order, the appellants preferred this
appeal by way of special leave petition in this Court.
14. This Court on 24.07.2006 ordered stay of dis-possession pending
further orders. In this Court, the appellant in addition to the special leave
B petition also filed additional affidavit and the counter affidavit filed by
respondent No. I before the High Court of Bombay as annexure-Pl 7.
15. A counter affidavit in reply on behalf of respondent No.I CIDCO
was also filed in the special leave petition specifically stating that in the
present case the allotment was cancelled having regard to Section 23 of the
C Indian Contract Act as the subject allotment was illegal and that as regards
the merits of rival contentions, a detailed affidavit was filed before the High
Court and for tlie sake of brevity a copy of the same was annexed as
Annexure-RI. The appellant also filed a rejoinder to the counter affidavit filed
on behalf of respondent No. I.
D 16. We heard the arguments of Mr. Vikas Singh, learned senior counsel
for the appellant and Mr. Altaf Ahmed, learned senior counsel for the
contesting respondent. We have carefully perused the entire pleadings, .
documents and annexures filed along with the special leave petitions.
17. Mr. Vikas Singh, learned senior counsel took us through the various
E pleadings and also other relevant records. Mr. Vikas Singh made the following
submissions:
1. Maintainability of the writ petition:

18. As regards non-maintainability of the writ petition, the appellant
F relied upon the following decisions of this Court wherein this Court has held
that the writ petitions can be held to be maintainable under certain
I
circumstances:
i. Smt. Gunwant Kaur & Ors. v. Municipal Committee Bhatinda
& Ors., [1969] 3 sec 769.

G ii. Century Spinning & Manufacturing Company Ltd & Anr. v. The
Ulhasnagar Municipal Council & Anr., [1970] I SCC 582.

iii. Dr. Bal Krishna Agarwal v. State of U.P. & Ors., [1995] I SCC
614
iv. Whirlpool Corporation v. Registrar of Trademarks, Mumbai &
H
POPCORN ENTERTAINMENT•·. CITY INDUSTRIAL DEVELOPMENT CORPN [LAKSHMANAN. J] 25

Ors., [ 1998] 8 SCC I. A
v. Harbanslal Sahnia & Anr. v. Indian Oil Ltd. & Ors., [2003] 2
sec 101.
vi. Corporation of the City of Bangalore v. Bangalore Stock
Exchange, [2003] 10 sec 212.
B
vii. ABL International Ltd. & Anr. v. Export Credit Guarantee
Corporation of India Ltd & Ors., [2004] 3 SCC 553.

viii. Sanjana M. Wig (Ms.) v. Hindustan Petroleum Corporation Ltd.,
[2005] 8 sec 242.

19. He invited our attention to the Whirlpool Corporation case (supra) C
wherein this Court has held that there are three clear-cut circumstances
wherein a writ petition would be maintainable even in a contractual matter.

Firstly, if the action of the respondent is illegal and without jurisdiction,

Secondly, if the principles of natural justice have been violated and D

Thirdly, if the appellants' fundamental rights have been violated.

20. According to the learned senior counsel, all the three principles as
laid down in the case of Whirlpool Corporation have been made out in the
instant case because the action of CIDCO is wholly without jurisdiction as E
it is seeking to resile from a concluded contract contrary to the express terms
of the contract. Secondly, CIDCO, has violated the principles of natural justice
as an order affecting the right of the appellant has been passed without
giving an opportunity of hearing to the appellant and thirdly, the appellants'
fundamental rights as guaranteed under Article 14 of the Constitution of India F
have been violated because similar allotments made without calling for tenders
are not sought to be cancelled and the appellant is being singled out by
)
CIDCO while seeking to cancel the allotment in favour of the appellant.

2 I. According to the appellant similar allotments as well as the allotment
of the appellant are valid allotments as the same have been made in exercise G
of the statutory powers of CIDCO under the New Bombay Land Disposal
Regulation, 1975 in terms of the Land Pricing and Land Disposal Policy and
!
hence all allotments being valid, there is no justification for CIDCO to cancel
the allotment of the appellant while not disturbing the other allotments made
in favour of the other parties.
H
26 SUPREME COURT REPORTS (2007] 3 S.C.R.

A 22. Learned senior counsel invited our attention to the details of other
allotments made without calling for tender which are available at pages 177
and 187 of the SLP paper book in SLP No. 11085 of2006. Thus it is submitted
that the High Court committed grave error in rejecting the petition filed by the
appellant as not maintainable.

B 23. Learned senior counsel made certain submissions in regard to the
show cause notice where according to him, there is mention of a report
submitted by one Dr. D.K. Shankaran, the then Additional Chief Secretary of
the Government of Maharashtra. It is submitted that the said report was made
behind the back of the appellant and without his knowledge and that the said
C report is an ex-parte report and no benefit can be taken of the same by CIDCO
as the report is based upon conjectures and surmises and there is no scientific
basis of the findings in the report. He would also further submit that the
CIDCO in the final termination order dated 16.12.2005 did not rightly make a
mention of Sankaran Report because the same could not have been relied
upon as having been made without any legal sanctity.
D
24. He invited our attention to the recent pronouncement of this Court
in the case of Amey Cooperative Housing Society Ltd. v. Public Concern for
Governance Trust, (2007) 2 SCALE 405. In that case, the Advocate General
of Maharashtra submitted regarding the status of the Shankaran Committee
report that it was treated by the State Government to be a preliminary report
E only and not conclusive and that in the final cancellation order the only
ground made was that the allotment had been made without calling for
tenders and without resorting to the process of competitive bidding.

25. Much argument was also advanced in regard to the allegations
F which have been made out in the counter affidavit before the High Court and
in this Court. It is submitted that they were not made party in the show cause
notice and were also not a part of the final order of cancellation which is
impugned by the appellant in these proceedings. Mr. Vikas Singh further
invited our attention to a Constitution Bench judgment of this Court in
Mohinder Singh Gill v. C.E.C, New Delhi, reported in (1978] I SCC 405
G wherein this Court held in para 8 that where an order is passed on certain
grounds, its validity must be judged by the reasons so mentioned and cannot
be supplemented by fresh reasons in the shape of affidavit or otherwise. It
is also argued that the said Constitution Bench judgment of this Court has
been followed in Union of India & Ors. v. E.G. Nambudiri, [1991] 3 SCC 38,
H State Govt. Houseless Harijan Employees' v. State of Karnataka & Ors.,
POPCORN ENTERTAINMENT"· CITY INDUSTRIAL DEVELOPMENT CORPN. [LAKSHMANAN. J] 27
[2001] I SCC 610, Pavunendra Narayan Verma v. Sanjay Gandhi PG! Medical A
-;
Sciences & Anr., [2002] I SCC 520 and in Chandra Singh & Ors. v. State of
Rajasthan & Anr., [2003] 6 SCC 545. Thus, the learned senior submitted that
the CIDCO is trying to go beyond the terms of the show cause notice/final
order of cancellation when admittedly CIDCO has affirmed other similar
allotment and permitted them to continue construction inspite of the allotment
being made to the other parties without inviting tenders.
.i3

26. Learned senior counsel further submitted that the allotment made by
CIDCO are governed by New Bombay Disposal of Lands Regulations, 1975.
y Chapter 4 of the said Regulations provide for mode of disposal of the land.
Regulation 4 of Chapter 4 provides as under:
c
"Manner of disposal of land:- The Corporation may dispose plots of
land by public auction or tender or by considering individual
applications as the Corporation may determine from time to time."

27. As per the Land Pricing and Land Disposal Policy of CIDCO, CIDCO
has been authorized to dispose of various types of land as per the method
D
of disposal prescribed under column 3 of the said policy. The method of
disposal has been prescribed broadly in the following manner:

I. By Public Advertisement & at fixed rate
2. By tender E
3. on request at fixed rate

28. The Land Pricing and Land Disposal Policy has in all 12 sub-
headings like no. I is residential, no.2 is commercial and no.12 is public utility.
In the said policy, making allotment for multiplexes/auditorium/theatre complex
F
to be developed in the private sector is in clause 12 of the Chapter relating
to allotment for public utility. CIDCO in their affidavit have made wrong
statement on oath that the allotment is commercial because clearly under the
Land Pricing and Land Disposal Policy such allotment is not commercial but
is allotment for public utility. CIDCO to that extent has committed perjury and
are liable as such for the same. G

, L
29. Thus, from a conjoint reading of the Regulation and the Land Pricing
and Land Disposal Policy ofCIDCO, it is clear that the allotment of land could
be done by considering individual application i.e. without inviting tenders.
From the Land Pricing and Land Disposal Policy it is also clear that disposal
H

l
28 SUPREME COURT REPORTS [2007] 3 S. C.R.

A of land under different category are to be considered differently. In the case
of allotment of land for auditorium/multiplex, theatre complex to be developed
'-
in the private sector, it is prescribed that the land is to be allotted at reserved
price and the method of disposal is on request at fixed rate failing which by
competitive bidding thus, in the instant case there is no infirmity in the
allotment because the same has been made on request at fixed rate at the
B reserved price. Such allotment is clearly permitted under Regulation and
prescribed as the manner of allotment under the Land Pricing and Land
Disposal Policy of CIDCO. Even CIDCO in their affidavit filed in the case of
Sanjay Damodar Surve v. State ofMaharastra, being PIL No. 140/2004 as well
as in the case of K.Raheja, (PIL No.45879/2003, 7637/2004) have stated on
c oath this very stand that they have the right to make allotment by considering
individual applications in terms of the power vested on them under Regulation
4 of the New Bombay Disposal of Lands Regulations, 1975 and it is not
understood why CIDCO is seeking to take a different stand in this matter by
sing! ing out the appellant.

D 30. Mr. Vikas Singh further submitted that the reference to a judgment
of this court in Hazi Mastan v. Kera/a Financial Corporation, reported in
[1988) I SCC 166 is misconceived because in the said case there were no
statutory regulations providing for the manner of disposal of land and secondly
even in that case the Court had approved the disposal of land by considering
individual application as being justified in the facts and circumstances of that
E
case. Therefore, learned senior counsel submitted that the reference to the
said judgment can be of no help to CIDCO to justify the cancellation order.

31. Learned senior counsel further contended that this Court in the case
of Corporation of the City of Bangalore v. Bangalore Stock Exchange,
F reported in (2003] I0 SCC 212 has held that even in the case wherein
cancellation of a lease was for a public purpose i.e. for a park and playground
by a resolution of the corporation of the city of Bangalore, the same was set ;
aside as there were no such rights reserved to the corporation to cancel the
lease under the lease agreement. The appellant in the reply to show cause
notice has also referred to judgments in Printers (Mysore) Ltd. v. M.A.
G Rasheed & Ors., (2004] 4 SCC 460 and Chairman & MD.BPL. ltd v. S.P.
Gururaja & Ors., (2003] 8 SCC 567 wherein also the allotment had been
challenged on the ground that the same had been made without inviting
tenders and the High Court had cancelled the allotment and this Court while
reversing the order has held that ifthe Regulations of the Corporation empower
H the corporation to make allotment without inviting tenders then such allotment
POPCORN ENTERTAINMENT'· CITY INDUSTRIAL DEVELOPMENT CORPN [LAKSHMANAN. J J 29

was clearly valid and no challenge to the same would be entertained on the A
ground that other persons could have been interested in applying for the
allotment and that they had not been given opportunity to apply for the same.
Clearly in terms of the two judgments referred to above, it could not be said
that allotment made without issuance of tenders per se can be said to be bad
or being opposed to public policy.
B
32. Learned senior counsel for the appellants further submitted that the
impugned order violates the fundamental rights as guaranteed under Article
14 of the Constitution because in the similar allotments wherein also Dr. D.K.
'.t Shankaran had reported that the same had been done without inviting tenders
and CIDCO has suffered huge losses running into crores, CIDCO has taken c
no steps to cancel those allotments and in fact construction on the said plots
are continuing without any objection from CIDCO.

33. Learned counsel for the appellant submitted that the appellant is
clearly entitled to the same treatment i.e. of being allowed to take the advantage
of allotment in his favour which according to the appellant is in accordance D
with the Regulations as well as Land Pricing and Land Disposal Policy as
done in the case of others and that the hostile discrimination of singling out
of the appe-llant in the matter clearly violates the fundamental rights of the
appellant.

34. In fact, learned counsel invited our attention to the similar allotments E
referred to by Dr. D.K.Shankaran where also huge losses have been reported
by Dr. D.K. Shankaran and which allotments are being permitted to continue
as under:-

I. Mis K. Raheja whose allotment is in the commercial category and
where Shankaran had reported Rs. 50 crores loss, F

~
2 Mis Shakti Commercial Premises where the allotment is for the
4
multiplex and the loss reported by Dr. D.K. Shankaran is Rs. 35
crores,
3. Mis Mohan Entertainment where the allotment was also for the G
multiplex and the loss reported is Rs.23 crores and,
4. Mis Gurudev Industrial Premises Co-operative where the allotment
l is for service industry/ warehousing and the loss reported is
Rs.63.55 crores, are some of such allotments which have been
allowed to continue and no steps for cancellation of those H
30 SUPREME COURT REPORTS [2007] 3 S.C.R.

A allotments are being done by CIDCO as is being done in the
instant case of the appellants. Furthermore, CIDCO is taking no ,...
action for cancellation of other allotments made by CIDCO without
inviting tenders.

35. It is submitted that the impugned order cannot be sustained also on
B the ground that there is gross violation of the principles of natural justice in
the order. The first violation· of natural justice took place when Dr. D.K.
Shankaran started his enquiry. Dr. Shankaran conducted the enquiry without
notice to the appellant and without hearing the appellant. The appellant while
submitting their reply to the show cause notice specifically sought for an <
opportunity of hearing, the same was also not granted to the appellant before
c passing of the final order and on this ground also the impugned order is liable
to be set aside. The appellant was not even given the- copy of Dr. D.K.
Shankaran report for effective reply of show cause notice.

36. The impugned order is also liable to be quashed as the same is
wholly without jurisdiction. Once a concluded contract has been entered into
D
betwee~1 the parties, the parties cannot be permitted to resile from the same
contrary to the express terms of the concluded contract. It has been held in
the case of Corporation of the City of Bangalore's case (supra) to the effect
that CIDCO has no such right to revoke the concluded agreement and hence
any action taken by CIDCO contrary to the express terms of the agreement
E is wholly without jurisdiction. CIDCO cannot take recourse of Section 23 of
the Contract Act alleging that the agreement is opposed to public policy
because clearly such right is reserved only to the Courts and it is submitted
that authorities themselves cannot take recourse to the said section in order
to annul a concluded agreement.

F 37. As regards the allegations made against Shri V.M. Lal, the then MD,
CIDCO questioning the allotment in the counter affidavit, it is submitted that
firstly the entire basis of such allegation does not survive because this Court (
has already expunged all the remarks against Shri V.M. Lal in regard to similar ~

allotment made without issuance of tender during his tenure and the Anti
G Corruption Bureau of the State of Maharashtra as well as the State of
Maharashtra in disciplinary proceedings initiated against Shri V.M. Lal as ge
has also been given clean chit with regard to all allotments made by CIDCO
during his tenure as CMD of the Board. It is also further contended that it
was wrongly suggested by CIDCO that the appellant was not eligible for such
allotment because the only criteria of eligibility in such allotment by CIDCO
H is the submission of the EMO and no other criteria is being taken into
POPCORN ENTERTAINMENT' CITY INDUSTRIAL DEVELOPMENT CORPN. [LAKSHMANAN, J] JJ
consideration before making such allotments. The appellant had also submitted A
.... the project report and upon being asked by CIDCO regarding the financial
capabilities and expertise of the appellant, the appellant had on 26.05 .2004,
which was received by CIDCO office on 27.05.2004, submitted a clarificatory
letter stating about their experience in the field of construction industry for
several years. The appellant had also expressed their willingness to approach B
technical experts from Multiplex industry to provide the area ofNavi Mumbai
with excellent entertainment facility. In the said letter they had also stated
about their financial standing and had attached a letter from the bank regarding
their financial capability and that the Bank also gave a letter dated 27.05.2004
certifying the financial standing of the appellant.

38. At the time of hearing, it was suggested by learned senior counsel
c
for the respondent that the allotment was made without any justification and
that there was a huge demand for such plot, it is submitted by learned counsel
for the appellant that the appellant has sought information from CIDCO under
the Right to Information Act as to whether there was no application pending
with them for allotment of the said plot prior in time to the application of the D
appellant. CIDCO in reply has clearly stated that there was no application
prior to the application to the appellant. Even the allotment in favour of the
appellant was a reasoned allotment taking into consideration the lack of
entertainment facilities in the area and the said issue was also discussed in
the board meeting before the allotment and these facts are clear from the E
information provided to the appellant under the Right to Information Act. Our
attention was also drawn to the noting in the file while considering the case
of the appellant and before making the allotment that

i. "There is no cinema/multiplex facility available today for the
residents of CBD Belapur, Kharghar and Kalamboli residents. F
ii. From accessibility and land use compatibility point of view, plot
)
no. I, Sector 2, Kharghar admeasuring about 8000 sq. mtrs is an
ideal location for multiplex.
iii. This building will be visible from highway and will add to the
image of the city. G
1v. Adjoining plot no. I of sector I attached to railway station
admeasuring 5600 m2 (not demanded yet) is earmarked for city
mall."

39. It is also brought to our notice that in the Board's deliberation it was H
32 SUPREME COURT REPORTS (2007] 3 S.C.R.

A noted by the then Chairman Shri Javed Khan that promoting a Multiplex near
railway station shall be adding value to the development of that node and was
needed in view of shortage of entertainment facility in Navi Mumbai.

40. As regards the suggestion of irregularity in the allotment in favour
of the appellant is concerned it is submitted that the Principal Secretary,
B Urban Development, Government of Maharashtra was present in the Board
meeting in which decision was taken to allot the subject plot in favour of the
appellant and the subsequent CMD also in his letter dated 09.03.2005 had
justified the allotment by saying that there was no comparable data to fault
the allotment on the ground that CIDCO has suffered losses in the same. It
C is also pertinent to point out that Dr. Shankaran was also a member of the
Board of Directors of CIDCO in the year 1992-93 and during the said period
CIDCO Board approved the allotment in favour of a society without issuing
tender in which society Dr. Shankaran also owned a flat. Concluding his
elaborate and lengthy submissions, Mr. Vikas Singh submitted that the allotment
in favour of the appellant cannot be faulted because the grounds made out
D in the show cause notice/final order of cancellation are clearly not sustainable
in law and the cancellation order needs to be quashed. It is further submitted
that the allotment in favour of the appellant is completely legal and correct
and the same has been made after duly complying with the Land Disposal and
Land Pricing Policy and new Bombay Land Disposal Regulations, 1975. He
E would therefore submit that the impugned order dated 16.12.2005 and show
cause notice dated 14.07.2005 be quashed and the respondents are directed
to permit the appellant to go ahead with the construction of multiplex in terms
of the lease agreement executed between the appellant and the CIDCO and
also in terms of the commencement certificate issued by CIDCO in favour of
the appellant.
F
41. Same argument was advanced by learned senior counsel in the other
civil appeal arising out of SLP (C) No. 11087 of 2006 filed by M/s Platinum .;
Entertainment & Anr.

42. Mr. Altaf Ahmed, learned senior counsel appearing for the contesting
G first respondent submitted that the High Court in passing the impugned order
rejecting the writ petition filed by the appellant herein has done so principally
on the consideration that the appellants had not availed of the available
alternative efficacious remedy and as such could not invoke writ jurisdiction
of the High Court to decide contractual matters on whatever ground. He
H would further submit that on this premises the High Court declined to exercise
POPCORN ENIERTAINMENT 1·. CIT\' INDUSTRIAL DEVELOPMENT CORPN. [LAKSHMANAN. J.J 33
jurisdiction under Article 226 of the Constitution sought to be invoked by the A
-.
appellant herein. Mr. Altaf Ahmed further submitted that this Court in its
decision in Kera/a State Electricity Boad & anr. v. Kurien E. Kelathil &
Ors.. reported in AIR (2000) SC 2573 has categorically held that merely because
a Corporation/Electricity Board can be termed as a limb or instrumentality of
the Government and hence State within the meaning of Article 12 of the
B
Constitution of India nonetheless in the matter of contract jurisdiction under
article 226 of the Constitution of India cannot be invoked and that this view
is also affirmed in decisions in National Highways Authority of India v.
·y Ganga Enterprises & anr.. reported in [2003) 7 SCC 410 and Rajureshwar
Associates v. State of Maharashtra & Ors., [2004) 6 SCC 362.
c
43. Mr. Altaf Ahmed further submitted that in the present case the
allotment was cancelled having regard to Section 23 of the Indian Contract
Act as the subject allotment was illegal and that as regards the merits of rival
contentions a detailed affidavit was filed before the High Court denying the
contents of the special leave petition and its accompaniments and list of dates
D
which are inconsistent with and contrary to what is stated hereinabove and
as if the same has been expressly traversed and denied. He would, therefore,
submit that the appeal is devoid of merits and hence deserves to be dismissed
·I
at the threshold in the interest of justice and prayed accordingly. It was
further submitted that in case this Court were to remit the matter back to the
High Court for fresh disposal, the same writ petition be restored to its original E
No. along with the pleadings which were already complete with a direction
to the High Court to decide the same in a time-bound manner preferably
within a short period.

44. We have given our careful consideration to the rival submissions
F
made by the respective counsel appearing on either side. In our opinion, the
High Court has committed a grave mistake by relegating the appellant to the
)
alternative remedy when clearly in terms of the law laid down by this Court,
this was a fit case in which the High Court should have exercised its jurisdiction
in order to consider and grant relief to the respective parties. In our opinion,
in the instant case, 3 of the 4 grounds on which writ petitions can be G
entertained in contractual matter were made out and hence it was completely
wrong by the High Court to dismiss the writ petitions. In the instant case,
I. 3 grounds as referred to in Whirlpool Corpn. (supra) has been made out and
accordingly the writ petition was clearly maintainable and the High Court has
committed an error in relegating the appellant to the civil court. H
34 SUPREME COURT REPORTS [2007) 3 S.C.R.

A 45. It is also pertinent to notice when the allotment was made in favour
....
of the appellant there was no entertainment facility available in the area and
CIDCO in its endeavour to do proper planned development of the area was
obliged to provide for entertainment for the residents. CIDCO in fact had put
an advertisement for tender for various other plots for the said purpose and
B upon getting no response to the advertisement, CIDCO approved the allotment
in favour of the appellant on first come first serve basis. It is not the case
of CIDCO or by any other private party that any other application was made
prior in time to the application made by the appellants for the same plot and
hence the allotment in favour of the appellant cannot be faulted in any
manner. It has been held by several decisions of this Court that while developing
C a new township the objective of the planning authorities is not to earn money
but to provide for systematic and all-round development of the area so that
the purpose of setting up the township is achieved by more and more people
wanting to live in the area in view of the various amenities being provided
in the area. Considering this objective in mind, we are of the view that the
D allotment made in favour of the appellants cannot be faulted with and this
Court will accordingly set aside the orders of CIDCO seeking to resile from
a concluded contract in favour of the appellants.

46. It is also pertinent to mention that CIDCO in the show cause notice
has taken the ground of non-issuance of tender as the only basis for cancelling
E the allotment and CIDCO in the final order has also confined itself to the non-
issuance of tender as the ground for cancellation but in the reply to the writ
petition, CIDCO is seeking to add further grounds to justify the order of
cancellation, which is clearly not permissible in terms of the law laid down by
this Court in several of its decisions.
F
47. Learned counsel for the appellant submitted that since all the
pleadings, records, annexures filed before the High Court and also of this
Court is available before this Comt, this Court may dispose of the same on
merits without remitting the matter to the High Court for fresh disposal as
suggested by learned senior counsel for respondent No. I. It is true that all
G the records, documents, annexures are available before us. At the same time,
the High Court had no occasion to consider all these rival submissions and
to render a categorical finding on all the issues. The High Court has disposed
of the writ petition only on the ground of availability of alternative remedy. J

TI1e High Court has not recorded its finding on the merits of the rival claim.
H Since elaborate arguments were advanced by learned senior counsel for the
appellant and countered by learned senior counsel for the respondent, we
POPCORN ENTERTAINMENT,., CITY INDUSTRIAL DEVELOPMENT CORPN. [LAKSHMANAN, J] 35

extracted the entire argument in extenso in order to enable the High Court to A
consider all the above submissions made by both the parties on merits and
dispose of the same within a period of 6 weeks from the date of receipt of
this judgment. As already noticed the request for allotment of construction
of multiplex was made on 18.05.2004 and the allotment was made by the
Board's Resolution dated 03.06.2004. It is also a matter of record that both the
appellants in the civil appeals have deposited several crores of rupees as and B
when directed by respondent No. I. It is also pertinent to notice that
commencement certificate to the appellants pe1mitting them to start the
construction was also made on 28.02.2005. However, the show cause notice
was issued in July, 2005 and the allotment was cancelled subsequently which
was challenged in the writ petition in the year 2006. c
48. Since the matter is pending for a very long time before the High
Court and also of this Court, we feel just and proper to request the High Court
to restore both the writ petitions No. 946712005 and 9468/2005 to its original
No. along with the pleadings which were already complete and request the
High Court to decide the same in a time bound manner preferably and on D
priority basis within 6 weeks from the date of receipt of this judgment. We
make it clear that we have only extracted and reproduced the extensive
arguments advanced by learned senior counsel appearing on either side
which, in our opinion, would facilitate the High Court to decide the matter
afresh on merits. While admitting the special leave petition, this Court on E
24.07.2006 granted stay of dispossession pending further orders and also
restrained the appellants from putting up any construction until further orders.
The said order will be in force till the disposal of the writ petitions by the High
Court. The Hon'ble Chief Justice of the High Court is requested to place the
matter before a Division Bench for disposal of the same afresh on merits
within 6 weeks. from the date of the receipt of this judgment. This direction F
for early disposal is issued in the peculiar facts and circumstances of the case
and in public interest.

Accordingly, the appeal is disposed of. No costs.

V.S.S. Appeal disposed of.