Supreme Court of India
NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY & ANR.versusARVIND SONEKAR
- Citation
- 2008 INSC 480
- Decided
- 10 April 2008
- Disposal
- Case Allowed
- Bench
- TARUN CHATTERJEE
Holding
The Court held that the 1993 offer was not an allotment letter nor a concluded contract, the doctrine of legitimate expectation does not apply, and the MRTP Commission’s order directing a refund was erroneous.
Summary
The New Okhla Industrial Development Authority (the Noida authorities) appealed against an order of the MRTP Commission directing it to refund the excess amount paid by Arvind Sonekar for a plot allotment. The respondent had earlier received a 1993 offer letter stating a rate of Rs.2750 per sq.mtr, which was not accepted, and later a 1996 allotment letter at Rs.3600 per sq.mtr, which he accepted and paid 20% of the consideration, executing a lease deed. He claimed the 1993 offer formed a concluded contract, invoking the doctrine of legitimate expectation and alleging discrimination and restrictive trade practices. The Supreme Court held that the 1993 letter was merely a proposal, not an allotment letter, and no contract was concluded; the doctrine of legitimate expectation was inapplicable, and there was no discrimination. Consequently, the MRTP Commission’s order to refund the excess amount was set aside.
Issues considered
- The 1993 offer letter constitutes an allotment letter and a concluded contract obligating the authorities to honor the Rs.2750 per sq.mtr rate.
- Whether the doctrine of legitimate expectation applies to the respondent’s claim.
- Whether the Noida authorities’ charging of the prevailing market rate amounts to a restrictive or unfair trade practice under the MRTP Act.
- Whether there was discrimination in the allotment of plots.
- Whether the MRTP Commission erred in directing a refund of the excess amount.
Legislation cited
- Monopolies and Restrictive Trade Practices Acts. 10(a)(i)(1), s. 13, s. 2(o)(ii), s. 36A
Subjects
Monopolies and Restrictive Trade Practices Actrestrictive trade practiceunfair trade practicelegitimate expectationcontract formationallotmentdiscriminationlease deedpublic policyrefundrate of land
Judgment
[2008] 6 S.C.R. 241
~
NEW OKHLA INDUSTRIAL DEVELOPMENT A
AUTHORITY & ANR.
v
ARVIND SONEKAR
(Civil Appeal No. 5514 of 2001)
APRIL 10, 2008 B
[TARUN CHATIERJEE & HARJIT SINGH BEDI, JJ.]
Monopolies and Restrictive Trade Practices Act - ss. 10
(a)(i)(1), 36A and 13 - Scheme of allotment of plot by Naida c
Authorities - Allotment letter to applicant in 1993 - Allotment
@ Rs. 36001- per sq. mtr. - Deposit of 20% allotment money
at the said rate - Petition by applicant alleging restrictive trade
practices and unfair trade practices and seeking benefit of old
rate-Rs. 27501- per sq. mtr. - Upheld by MRTP Commission
D
directing the Authorities to refund the excess amount charged
.l
- Sustainability of - Held: Not sustainable since contract was
concluded by execution of lease deed wherein rate was
Rs. 36001- per sq. mtr. - In the affidavit by applicant also same
rate was given - Applicant was not discriminated - Doctrine of
legitimate expectation was also not applicable - Earlier offer E
letter of 1993 to the applicant for allotment of plot@ Rs. 27501
- per sq. mtr. could not be treated as a concluded contract,
thus it was not an allotment letter.
In 1993, the appellant-Neida Authorities invited F
• 't applications for allotment of plot to Nursing Homes and
Hospitals. Under the Scheme, it was mentioned that the
rate would be as prevailing at the time of allotment. The
rate was Rs. 2750/- per sq. mtr. The respondent submitted
the application with the registration amount of Rs.
G
1,00,000/-. On 21.12.1993, the appellant issued letter to the
respondent asking him to pay certain amount but he did
not deposit the amount. On scrutiny, the proposed site
for allotment was not cleared. The appellant refunded the
241 H
242 SUPREME COURT REPORTS (2008) 6 S.C.R.
A registration amount and the respondent accepted the
same. In 1996, the appellant issued a fresh allotment letter
and the allotment rate was Rs. 3600/- per sq. mtr.
Respondent deposited 20% of allotment money, @
Rs. 3600/- per sq. mtr. Thereafter, the respondent filed
B affidavit before the Authorities stating that he accepted
the terms and conditions of the offer letter as also the rate
at which allotment was to be made. In the Lease Deed
executed in favour of respondent also along with the terms
and conditions of allotment, the rate of land was @
C Rs. 3600/- per sq. mtr. Respondent filed petition under ss.
10 (a)(i)(1 ), 36 A and 13 of MRTP Act before the MRTP
Commission alleging that the action of the appellant was
restrictive trade practices and also unfair trade practices.
He also sought benefit of old rate Rs. 2750/- per sq. mtr as
extended in case of other applicant. MRTP Commission
0
allowed the petition directing the Naida Authorities to
•.
refund the excess amount paid by the respondent which
was the difference of money between Rs. 3600/- per sq.
mtr. and Rs. 2750/- per sq. mtr., to him. Hence the present
appeal.
E
Allowing the appeal, the court
HELD: 1.1 The order of the MRTP Commission
cannot be sustained. It was clearly in error in granting relief
to the respondent. The impugned order of the MRTP
F Commission is set aside and the petition filed before the
MRTP Commission by the respondent is rejected. [Para
11] [252-A, B]
1.2 The respondent having accepted the refunded
G money without raising any objection could not turn
around and say that the offer letter of 1993 was an
allotment letter and therefore, it was a concluded contract ,.
between the parties. Perusal of the said letter would not
show that it was an allotment letter. By this letter, a plot of
land was only·offered to the respondent and there is
H
NEW OKHLA INDUS. DEVELOPMENT AUTHORITY & 243
ANR. v. ARVIND SONEKAR
nothing on record to show that the said offer letter had A
culminated into an allotment letter. Therefore, it is difficult
to conceive that the earlier offer letter@ Rs. 2750/- per sq.
mtr. had culminated into a concluded contract and the
lease deed ought to have been executed @ Rs. 2750/- per
)
sq.intr. as that was the offer of the Noida authorities in the B
year 1993. That apart, after accepting the rate of the land
at Rs. 3600/- per sq. mtr. and executing the lease deed at
the accepted rate and after having already paid in terms
of the offer letter, it was not open to the respondent to
allege that in view of the earlier concluded contract, he c
was liable to pay@ Rs.2750/- per sq. mtr. in respect of the .
plot in question and therefore, the Noida authorities were
liable to refund the excess amount paid by him. In the
scheme itself, one of the conditions was that the rate .
would be charged at the prevailing market price on the
0
date of allotment of the plot in question which, in this
case was done only in the month of April, 1996 and not
in the month of December, 1993. It would be clear that
the offer letter of 1993 for allotment of a plot made by the
Noida authorities could not be treated as a concluded
contract and thus, it was not at all an allotment letter. E
[Para 6] [249-B-H]
1.3 The question of acceptance of the proposal of
allotment did not arise because the entire money which
was deposited with the Noida authorities in the year 1993 F
was admittedly, refunded by them and the same was also
encashed by the respondent without raising any
objection. The allotment that was made in the year 1996
was @ _Rs.3600/- per sq.mtr. was accepted by the
respondent on deposit of the money. Since the contract G
was concluded by execution of the lease deed from which
it appears that the rate was to be given as per the market
.value of the plot on the date of allotment, it was not open
to the respondent to approach the MRTP Commission and
say that the allotment must be made at the old rate, i.e. @ H
244 SUPREME COURT REPORTS [2008] 6 S.C.R.
A Rs.2750/- per sq.mtr. and not @ Rs.3600/- per sq. mtr.
Therefore, the order of the MRTP Commission cannot be
accepted c>n this count. [Para 7] [250-A-D]
1.4 It cannot be said that the respondent was
discriminated against because DB was allotted a plot of
B 500 sq. mtr. in 1997 @ Rs.2750/- per sq. mtr. which rate
was also offered by the Noida authorities to the res pun dent
in the year 1993. In the year 1997, DB was given a bigger
plot of 800 sq.mtr. in place of the old plot of 500 sq. mtr. at
the same rate of Rs.2750/- per sq.mtr. but it is also an
C admitted position that for the excess area of 300 sq. mtrs.,
the market rate on the date of allotment was charged from
him i.e. Rs. 3600/- per sq. mtr. That apart, the fact of
discrimination to the respondent in respect of allotment
of plot for the Nursing Home was not even raised in
D evidence by the respondent. [Para 8] [250-D, E, F]
1.5 The respondent had filed an affidavit clearly
accepting the amount shown as the price of the plot in
question and he had also given an undertaking to abide
by the terms and conditions of the allotment letter.
E Therefore, it is not open to the respondent to claim the
rate prevailing in the year 1993. [Para 9] [251-C, DJ
1.6 In the facts and circumstances of the case, the
doctrine of legitimate expectation cannot be applicable.
F The plot was allotted by the Authorities to implement the
public policy laid down for the allotment of sites for starting
nursing homes and clinics. The only question is that to
implement such policy, what should be the rate at which
the allotment of the plot should be made. Thus, the Noida
G authorities did not act either unjustly or in an unfair
manner by charging the rate of Rs. 3600/- per sq. mtrs.
[Para 1O] [251-F, G; 252-A]
Chief Administrator PUOA & Anr vs Shabnam Virk (Mrs)·
(2006) 4 sec 74 - referred to.
H
\
NEW OKHLA !NOUS. DEVELOPMENT AUTHORITY & 245
ANR. v. ARVIND SONEKAR [TARUN CHATTERJEE, J.]
'( CIVILAPPELLATE JURISDICTION: Civil Appeal No. 5514 A
of 2001.
From the Judgment and final Order dated 27.3.200.1
passed by the Monopolies and Restrictive Trade Practices
Commission, New Delhi in Restrictive Trade Practices Enquiry
No. 82/1997.
B
Rabindra Kumar for the Appellants.
L.K. Pandey for the Respondent.
The Judgment of the Court was delivered by c
TARUN CHATTERJEE, J. 1. This appeal by way of
special leave is filed against an order dated 27th of March, 2001
passed by the Monopolies and Restrictive Trade Practices
Commission (in short 'the MRTP Commission') in Restrictive
Trade Practices Enquiry No.82/97 by which the MRTP D
Commission has directed the appellants (hereinafter referred
to as 'the Noida Authorities') to refund to the respondent the
excess amount charged from him for allotment of a plot within 6
months from the date of the order passed by the MRTP
Commission. Feeling aggrieved, the Noida Authorites have E
come up by way of a special leave petition, which on grant of
leave was heard in the presence of the learned counsel for the
parties.
2. In 1993, applications for registration for allotment of plots
to institutions including Nursing Homes and Hospitals were F
invited by a general scheme by the Noida Authorities. In the
scheme itself, it was specifically mentioned that the rate shall
be the one as prevailing at the time of allotment. The
registration money to be deposited along with the application
in case of a Nursing Home was Rs.1,00,000/-. Pursuant to such G
advertisement for allotment of plots by the Noida authorities,
the respondent submitted an application for allotment along with
the registration money. By a letter dated 21st of December, 1993 .
issued by the Noida authorities to the respondent, the respondent
was required to deposit certain amount within seven days so H
246 SUPREME COURT REPORTS (2008] 6 S.C.R.
A that steps could be taken to make the allotment. However, the
respondent made no payment pursuant to the letter dated 21st
of December, 1993. The Town Planning Department of the
· Naida authorities, while scrutinizing the proposed site did not
clear the same and accordingly, by a letter dated 13th of January,
B 1995, the entire amount deposited as registration money with
the Naida authorities was refunded. It is an admitted position
that the refund was accepted by the respondent by encashing
the account payee cheque without any reservation.
3. On 20th of April, 1996, on the basis of a request made
C by the respondent in his letter dated 29th of January, 1996, a
fresh allotment letter was issued and in this allotment letter, it
was specifically made clear that the allotment rate would be
Rs.3600/- per sq. mtr. From this letter, it would also be clear
that the allotment money was required to be deposited within
D sixty days and the balance 80% in sixteen equal half yearly
installments together.with interest. The respondent by his letter
dated 5th of June, 1996 deposited 20% of the allotment money
of Rs.3,51,800/- by a pay order. This deposit confirmed that the
rate of allotment was Rs.3500/- per sq. mtr., i.e. the rate offered
E by the Naida authoritie.s stood accepted. On 15th of August,
1995, the respondent submitted an affidavit before the Naida
authorities stating, inter alia, as under:
(i) That the allotment of Nursing Home Plot No.243, Block
A, Sector 31 has been made in favour of the respondent
F for Rs.18,09,000/- only. Out of the said amount, 20% had
been deposited and the respondent had to deposit the
balance 80% in sixteen half yearly installments.
(ii) Omitted (because not required in this case).
G (iii) That the respondent had read and understood all the
terms and conditions of allotment and the respondent shall
comply with the terms and conditions of allotment.
A plain reading of this undertaking filed by way of an affidavit
H before the Naida authorities would indicate that the respondent
NEW OKHLA INDUS. DEVELOPMENT AUTHORITY & 247
ANR. v. ARVIND SONEKAR [TARUN CHATTERJEE, J.]
...,. had accepted the terms and conditions of the offer letter, A
including the condition regarding the rate at which the allotment
was to be made.
4. After the affidavit was filed by the respondent, on 17th of
August, 1996, a lease deed was executed by the Noida
authorities in favour of the respondent. This lease deed also B
) contained the terms and conditions of allotment, more particularly
the rate of the land, i.e. Rs.3600/- per sq. mtr. After executing
the lease deed, accepting the rate of the land at Rs.3600/- per
sq. mtr. and depositing the consideration money at the aforesaid
rate with the Noida authorities, a petition was filed before the c
MRTP Commission by the respondent against the Noida
authorities under Sections 1O(a)(i)(1 ), 36A and 13 of the MRTP
Act praying for instituting an enquiry and thereafter passing the
cease and desist order and demanding the excess amount paid
by him. In the said petition, the respondent had also alleged D
that he was discriminated inasmuch as one Dr. Bhardwaj who
was allotted a bigger plot in 1997 was charged the rate that
prevailed in the year 1993. Therefore, the respondent had
prayed that the benefit of the old rate i.e. Rs.2750/- per sq.mtr.
should be extended to the respondent also as it was done in E
the case of Dr. Bhardwaj.
5. An affidavit of evidence was filed by the Noida
authorities in which it was brought on record that as per the
terms of the scheme, the rate applicable was the one prevailing
at the time of issuance of the allotment. In the affidavit of F
t evidence, it was alleged by the Noida authorities that the letter
dated 21st of December, 1993 was only a proposal for allotment
and that the said letter could not be treated as an allotment letter.
It was further alleged that it was only in April 1996 that the
allotment was first made by them. Accordingly, they alleged that G
the question of applying the old rate i.e. the rate of the year
1993 could not arise at all. The MRTP Commission by the
impugned order held that the action of the Noida authorities
directing the respondent to pay at the rate prevailing in the year
1996 was discriminatory for the simple reason that different rates H
248 SUPREME COURT REPORTS [2008] 6 S.C.R.
A were charged from the applicants who were similarly placed .,
and deserved similar treatment. Therefore, it was held that this
action of the Noida authorities was a "restrictive trade practice"
within the meaning of Section 2(o)(ii) of the MRTP Act. It was
further held by the MRTP Commission that the offer of the No id a
B authorities to allot a plot in the year 1993 became a concluded
contract between the Noida authorities and the respondent as
the respondent had accepted the offer of the Noida Authorities
and in pursuance thereof, an amount of Rs. 1,00,000/- was
deposited with them within the time specified in the offer letter.
C Accordingly, it was held that the same, being a concluded
contract, could not be terminated unilaterally and without the
consent of the other party to the contract. It was further held by
the MRTP Commission in the impugned order that in the facts
and circumstances of the case, the doctrine of legitimate
expectation should be brought into force because the respondent
0
had legitimate expectation from the Noida authorities to
implement the public policy laid down for the allotment of sites •
for nursing homes and clinic fairly and justly and accordingly,
the action of the Noida authorites had fallen within the meaning
of i§unfair trade practices(· as provided in Section 36A of the
E MRTP Act. Accordingly, the Noida authorities were directed by
the MRTP Commission to refund the excess amount paid by
the respondent, that is to say the difference of money between .
Rs. 3600/- per sq.mtr. and Rs. 2750/- per sq.mtr., to him. It is
this order of the MRTP Commission, which is under challenge
F before us.
6. Having heard the learned counsel for the parties and
after examining the impugned order of the MRTP Commission
and other materials on record, we are unable to sustain the
G impugned order of the MRTP Commission for the reasons
stated hereinafter. It is true that in the year 1993, a letter was
issued by the Noida authorities, offering a plot of land for starting
a nursing home, to the respondent in respect of which the
consideration money was fixed at Rs. 2750/- per sq.mtr. It is an
admitted position that this offer of the Noida authorities was not
H
NEW OKHLA INDUS. DEVELOPMENT AUTHORITY & 249
ANR. v. ARVIND SONEKAR [TARUN CHATIERJEE, J.]
accepted by the respondent as we find from the record that the A
amount under the offer letter was not deposited by the
respondent. On the other hand, the Neida authorities also could
not allot the plot offered in the said letter of 1993 and the amount
of Rs. 1,00,000/-, which was deposited by the respondent with
them was refunded by account payee cheque and the same B
was duly encashed by the respondent without raising any
~
objection. Therefore, the respondent, having .accepted the
refunded money without raising any objection could not turn
around and say that the offer letter of 1993 was an allotment
letter and therefore, it was a concluded contract between the c
parties. Furthermore, a perusal of the said letter would not show
that it was an allotment letter. In our view, by this letter, a plot of
land was only offered to the respondent and there is nothing on
record to show that the said offer letter had culminated into an
allotment letter. Therefore, in view of the discussions made D
herein above, it is difficult to conceive that the earlier offer letter
_I @ Rs. 2750/- per sq. mtr. had culminated into a concluded
contract and the lease deed ought to have been executed @
Rs. 2750/- per sq.mtr. as that was the offer of the Neida
authorites in the year 1993. That apart, after accepting the rate E
of the land at Rs. 3600/- per sq. mtr. and executing the lease
• deed at the accepted rate and after having already paid in terms
of the offer letter, it is not open to the respondent now to allege
that in view of the earlier concluded contract, he was liable to
pay @ Rs.2750/- per sq. mtr. in respect of the plot in question
F
and therefore, the Neida authorities were liable to refund the
'fl
excess amount paid by him. It will not be out of place to mention
here that in the scheme itself, one of the conditions was that the
rate would be charged at the prevailing market price on the date
of allotment of the plot in question which, in this case was done
G
only in the month of April, 1996 and not in the month of
December, 1993. In view of the foregoing reasons, it would be
clear that the offer letter of 1993 for allotment of a plot made by
the Neida authorites could not be treated as a concluded contract
and therefore, it was not at all an allotment letter.
H
250 SUPREME COURT REPORTS [2008] 6 S.C.R.
A '1. We are also of the view that the question of acceptance
of the proposal of allotment did not arise because the entire
money which was deposited with the Naida authorities in the
year 1993 was admittedly, as noted herein earlier, refunded by
them and the same was also encashed by the respondent
B without raising any objection. Secondly, the allotment that was
made in the year 1996 was@ Rs.3600/- per sq.mtr. which was
accepted by the respondent on deposit of the money. In our
view, since the contract was concluded by execution of the lease
deed from which it appears that the rate was to be given as per
c the market value of the plot on the date of allotment, it was not
open to the respondent to approach the MRTP Commission
and say that the allotment must be made at the old rate, i.e. @
Rs.2750/- per sq.mtr. and not@ Rs.3600/- per sq. mtr. We are,
therefore, unable to accept the impugned order of the MRTP
D Commission on this count.
8. A further submission was made by the learned counsel
for the respondent that the respondent was discriminated against
because one Dr. Bhardwaj was allotted a plot of 500 sq. mtr. in
1997 @ Rs.2750/- per sq. mtr. which rate was also offered by
E the Noida authorities to the respondent in the year 1993. In our
view, this submission of the respondent cannot also be accepted.
In the year 1997, Dr. Bhardwaj was given a bigger plot of 800
sq.mtr. in place of the old plot of 500 sq. mtr. at the same rate of
Rs.2750/- sq.mtr. but it is also an admitted position that for the
F excess area of 300 sq. mtrs., the market rate on the date of
allotment was charged from him i.e. Rs. 3600/- per sq. mtr. was
charged for the excess area of 300 sq. mtrs. That apart, it
appears from the record that the fact of discrimination to the
respondent in respect of allotment of plot for the Nursing Home
G was not even raised in evidence by the respondent. Such being
the position and in view of the concluded contract after execution
of the lease deed, it must be held that the respondent had agreed
to pay at the rate prevailing on the date of offering the plot in
question i.e.@ Rs. 3600/- per sq.mtr. and in fact the respondent
had even deposited the amount@ Rs.3600/- per sq.mtr.
H
NEW OKHLA !NOUS. DEVELOPMENT AUTHORITY & 251
ANR. v. ARVIND SONEKAR [TARUN CHATTERJEE, J.]
9. In Chief Administrator, Puda & Anr. Vs. Shabnam A
Virk (Mrs.) [(2006) 4 SCC 74], this court had taken into
consideration an affidavit filed by the respondent and observed
at Paragraph 14 as follows:-
"It is to be noted that the respondent herself had accepted
in the undertaking that she accepted the allotment of the B
; house and undertook to abide by all the terms and
c;onditions of the allotment letter. It is not in dispute that
in the allotment letter the figure as demanded has been ·
reflected. That being so, the respondent was liable to
pay the amount as stipulated in the ailotment letter." c
(Emphasis supplied).
In so far as the present case is concerned, as noted herein
earlier, there is no dispute that the respondent had in fact filed
an affidavit clearly accepting the amount shown as the price of D
the plot in question and he had also given an undertaking to
) abide by the terms and conditions of the allotment letter. It is,
therefore, not open to the respondent to claim the rate prevailing
in the year 1993.
10. Before parting with this judgment, we may deal with E
the doctrine of legitimate expectation as was the ground taken
by the MRTP Commission to allow the petition of the
respondent. According to the respondent, this doctrine comes
into play because the respondent had legitimately expected the
Noida authorities to implement the public policy laid down for F
the allotment of sites for Nursing Homes and Clinics fairly and
justly. In our view, the doctrine of legitimate expectation, in the
facts and circumstances oft.he present case, cannot at all be
applicable. It is not in dispute that the plot has been allotted by
the Noida authorities to implement the public policy laid down G
for the allotment of sites for starting nursing homes and clinics.
The only question is that to implement such policy, what should
be the rate at which the allotment of the plot should be made. In
view of the discussions made herein above, we do not feel that
thej.Joida authorities acted either unjustly or in an unfair manner H
252 SUPREME COURT REPORTS [2008) 6 S.C.R.
A by charging the rate of Rs. 3600/- per sq. mtrs. Therefore, we ..
do not find any ground on which we can hold that this doctrine is
at all applicable to the facts of this case.
11. For the reasons aforesaid, we are unable to sustain
the order of the MRTP Commission, which was clearly in error
B in granting relief to the respondent. Accordingly, the impugned
order of the MRTP Commission is set aside and the petition ,
filed before the MRTP Commission by the respondent stands
rejected. The appeal is thus allowed. There 1.yill be no order as
to costs.
c
N.J. Appeal allowed.
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