M/S Kamla Aditya Construction vs State Of Jharkhand & Ors

IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No. 4513 of 2011 ­­­­­­­­­ Excel Venture Construction Co. (P) Ltd., through one of its Director, Sanjeet ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi and Others ... ... Respondents

with W.P.(C) No.4443 of 2011

Niraj Kumar Bhattacharya ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No.4444 of 2011 ­­­­­­­ Kunal Anand ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4618 of 2011

Modi Projects Limited, through one of its Directors Navin Modi ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department,Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4660 of 2011 ­­­­­­­ Modi Projects Limited, through one of its Directors Navin Modi ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department,Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4682 of 2011 2

Modi Projects Limited, through one of its Directors Navin Modi ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4683 of 2011

Excel Venture Construction Co. (P) Ltd. through one of its Director, Sanjeet ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4720 of 2011

Excel Venture Construction Co. (P) Ltd. through one of its Director, Sanjeet ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4736 of 2011

Nav Nirman Builders, through its Managing Partner Dharamvir Bhadoria ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 4766 of 2011

Simplex Infrastructures Limited, through its Senior Executive, Shri Radha Krishna Bagri ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 5074 of 2011 3

Nav Nirman Builders through its Managing Partner Dharamvir Bhadoria ... ... Petitioner Versus The State of Jharkhand through the Secretary, Housing Department, Govt. of Jharkhand, Ranchi & Others. ... ... Respondents

with W.P.(C) No. 5516 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents

with W.P.(C) No. 5517 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents

with W.P.(C) No. 5543 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents

with W.P.(C) No. 5544 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents 4

with W.P.(C) No. 5787 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents

with W.P.(C) No. 5789 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents with W.P.(C) No. 5790 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents with W.P.(C) No. 5791 of 2011

M/s Kamla Aditya Construction Pvt. Limited represented through its authorized representative Sri Ram Narayan Singh ... ... Petitioner Versus The State of Jharkhand through its Chief Secretary, Ranchi & Others ... ... Respondents ­­­­­­­­­­­­ For the Petitioners : M/s. Rajiv Ranjan, Shresth Gautam, Shrey Mishra & Piyush Chitresh, Advocates (In W.P.(C) nos.4513, 4443, 4444, 4618, 4660, 4682, 4683 & 4720 of 2011) : M/s Delip Jerath, Rajesh Lala Advocates (In W.P.(C) no.4736 of 2011) : Mr. Indrajit Sinha, Adv.(In W.P.(C)no.4766 of 2011) : M/s A. K. Mehta, Rajesh Lala, Advocates (In W.P.(C) no.5074 of 2011) 5

: Mr. A.K. Sahani, Adv. (In W.P.(C) nos.5516, 5517, 5543, 5544, 5787, 5789, 5790 & 5791 of 2011)

For the Respondent­State: Mr. Ajit Kumar, AAG Mr. Kumar Sundaram, J.C. to AAG For the Respondent­JSHB: Mr. Sachin Kumar, Advocate ­­­­­­­­

C.A. V. on: 14.11.2014 Pronounced on: 21 /11/2014

In all the writ petitions, the order contained in letter

dated 03.08.2011 has been impugned. In some writ petitions, order

dated 28.07.2011 has been challenged whereas, in most of the writ

petitions order dated 12.12.2012 has also been assailed.

The necessary facts, in detail, have been stated in

W.P.(C) No. 4513 of 2011.

FACTS:

M/S EXCEL VENTURE CONSTRUCTION COMPANY PVT. LTD.

W.P. (C) No. 4513 of 2011

2. The petitioner­ M/s. Excel Venture Construction Company

Pvt. Ltd. is a company incorporated under the Companies Act, 1956.

In connection with the preparation for the National Games­ 2007, a

meeting was held on 24.09.2004 in presence of the then Chief

Minister­Housing Minister, Development Commissioner, Finance

Secretary, Housing Secretary, Managing Director of Jharkhand State

Housing Board and others. In the said meeting, a decision was taken

to develop the vacant land of the Housing Board through developers 6

and that the construction shall be completed before the start of the

National Games­ 2007, so as to provide accommodation to the sports

persons. On 05.10.2005, a meeting was again held in presence of the

then Chief Minister­ Housing Minister for evaluation of the work of

the Housing Board. In the said meeting the Development

Commissioner, Finance Secretary, Housing Secretary, Managing

Director of the Jharkhand State Housing Board and others were

present. In the said meeting a decision was taken to develop the

vacant land of the Housing Board and construct multi­storied

buildings/commercial complexes through Joint Venture. The Minutes

of Meeting dated 05.10.2005 was sent to the Housing Board vide

letter dated 27.12.2005.

3. Pursuant to Notice dated 12.11.2005 inviting Expressions

of Interest for development of residential and commercial complexes

over vacant plots of the Housing Board through Joint Venture, 24

companies submitted their bid, out of which, 15 companies were

finally selected for financial bid. The petitioner submitted financial

bid for six plots and finally its offer for three plots that is, plot nos. 2,

8 and 9 at Harmu, Ranchi was accepted. An agreement with respect

to Plot no. 9 was entered with the Housing Board on 18.07.2007 in

which, 34.54 percent of the residential area (HIG and MIG) was the

Housing Board's allocation. A power of attorney was also executed

by the Housing Board in favour of the petitioner and possession was 7

handed over to the petitioner. The petitioner engaged an architect

namely, M/s. Axis, Ranchi and the petitioner started the project with

the projected investment of around Rs. 1400 lacs besides, actual

building construction expenses. The Housing Board issued Memo

dated 29.03.2008 directing the allottees of the plots at Harmu,

Ranchi to stop construction. The petitioner filed writ petitions being,

W.P.(C) No. 2173 of 2008, W.P.(C) No. 2179 of 2008 and

W.P.(C) No. 1812 of 2008 and vide order dated 08.05.2008, the

petitioner and others were directed to approach the Chairman,

Housing Board. Subsequently, vide order dated 18.12.2008, the

Chairman, Housing Board quashed order dated 29.03.2008. In the

meantime, map for the proposed construction was sanctioned in the

name of the Housing Board. The project was almost complete and

out of three Blocks, construction in Block­ A and Block­ A/1 is

complete in all respects and possession has been handed over to

allottees. The construction in Block­ B is also almost complete. A

total of 114 flats have been constructed out of which, 74 flats have

come in builder's allocation. The petitioner has issued advertisement

and more than 80% of its share has already been alloted to buyers.

On 29/30.07.2011, it was reported in the newspapers that the Joint

Ventures entered by the Housing Board with private builders have

been cancelled. Vide letter dated 03.08.2011, the petitioner has been

communicated that Agreement dated 18.07.2007 has been cancelled 8

and it was directed to handover the possession of the plots to the

Housing Board.

4. Aggrieved by order contained in letters dated 03.08.2011

and 28.07.2011, the present writ petition was filed seeking a

declaration that the action of the respondents is illegal, arbitrary and

wholly without jurisdiction, in as much as, Section 24(3)(b) and

Section 27 of the Jharkhand State Housing Board Act, 2000 are not

applicable in the facts of the present case. A further prayer has been

made seeking quashing of the order contained in Memo dated

12.12.2012

whereby, approval for post­facto approval has been

declined.

W.P. (C) No. 4683 of 2011

5. An agreement with respect to Plot no. 2 was entered with

the Housing Board on 18.07.2007 in which, 43.20% of the

commercial area (MIG) was the Housing Board's allocation. A power

of attorney was also executed by the Housing Board in favour of the

petitioner and possession was handed over to the petitioner. The

petitioner engaged an architect namely, M/s. Axis, Ranchi and the

petitioner started the project with the projected investment of around

Rs. 260 lacs besides, actual building construction expenses. The

Housing Board issued Memo dated 29.03.2008 directing the allottees

of the plots at Harmu, Ranchi to stop construction.

6. The commercial complexes consist of shops, multiplex, 9

super­market, food court, apparel anchor store. RRDA approved the

map and plan in the name of the Housing Board vide letter dated

24.12.2010 and the foundation work has started for the project.

Many third party rights have already been created. In view of the

encroachment over the land, the petitioner wrote several letters to

the Housing Board for removal of the encroachment. The petitioner

was directed to start the construction however, it could not

commence the construction.

7. Vide letter dated 03.08.2011, the petitioner has been

communicated that Agreement dated 18.07.2007 has been cancelled

and it was directed to handover the possession of the plot to the

Housing Board. Aggrieved by order contained in letters dated

03.08.2011 and 28.07.2011, the present writ petition was filed

seeking a declaration that the action of the respondents is illegal,

arbitrary and wholly without jurisdiction, in as much as, Section

24(3)(b) and Section 27 of the Jharkhand State Housing Board Act,

2000 are not applicable in the facts of the present case. A further

prayer seeking quashing of the order contained in Memo dated

12.12.2012 whereby, approval for post­facto approval has been

declined, has also been made.

W.P. (C) No. 4720 of 2011

8. An agreement with respect to Plot no. 8 was entered with

the Housing Board on 30.08.2007 in which, 40.86% of the 10

commercial area was the Housing Board's allocation.

9. Vide letter dated 03.08.2011, the petitioner has been

communicated that Agreement dated 30.08.2007 has been cancelled

and it was directed to handover the possession of the plot to the

Housing Board. Aggrieved by order contained in letters dated

03.08.2011 and 28.07.2011, the present writ petition was filed

seeking a declaration that the action of the respondents is illegal,

arbitrary and wholly without jurisdiction, in as much as, Section

24(3)(b) and Section 27 of the Jharkhand State Housing Board Act,

2000 are not applicable in the facts of the present case. A further

prayer has been made seeking quashing of the order contained in

Memo dated 12.12.2012 whereby, approval for post­facto approval

has been declined.

M/s. MODI PROJECTS LTD.

W.P. (C) No. 4618 of 2011

10. The petitioner­ M/s. Modi Projects Ltd. is a company

incorporated under the Companies Act, 1956. The National Housing

and Habitat Policy, 1998 noticed that there will be a huge shortage of

housing in the country and investment of about 1.51 lac crores would

be required for which forging strong partnership between the private,

public and cooperative sectors is required. The National Housing and

Habitat Policy, 2007 replaced the 1998 policy with the objective to

provide affordable housing to all. Considering the National Housing 11

and Habitat Policy, 2007, the Government of Jharkhand gave

direction to the Housing Board for construction of multi­storied

apartment over vacant land of the Housing Board for providing mass

shelter for public­ private partnership.

11. Pursuant to Notice dated 12.11.2005 inviting Expressions

of Interest for development of residential and commercial complexes

over vacant plots of the Housing Board through Joint Venture, 24

companies submitted their bid, out of which, 15 companies were

finally selected for financial bid. The petitioner submitted financial

bid for six plots and finally its offer for three plots was accepted. Vide

letter dated 14.03.2007, the petitioner was informed that its bid for

Plot No.3 at Harmu, Ranchi was found highest and accordingly, an

agreement with respect to Plot No. 3 was signed on 14.11.2007 in

which, the Housing Board's allocation was 36.31% in residential and

41.25% in commercial construction. The petitioner engaged

architects namely, M/s. Sanjay Puri Architect Pvt. Ltd., Mumbai and

M/s. Axis, Ranchi for preparing drawings for Plot No. 3 at Harmu and

submitted the same to the Board on 13.02.2008. The petitioner

started the project with the projected investment of around

Rs. 200 lacs besides, actual building construction expenses. However,

in view of the encroachment of the land, the Housing Board decided

not to approve the drawing. In view of the disruptions created by

vested interest, the petitioner faced serious problem while erecting 12

the boundary wall. Vide letter dated 18.03.2009 Secretary, Housing

Board requested the Deputy Commissioner, in view of the

disturbances being created in the land, to provide security to the

petitioner. The Housing Board issued Memo dated 29.03.2008

directing the allottees of the plots at Harmu, Ranchi to stop

construction. The petitioner filed writ petitions which were disposed

of vide order dated 08.05.2008. The petitioner and others were

directed to approach the Chairman, Housing Board and vide order

dated 18.12.2008, the Chairman, Housing Board quashed order

dated 29.03.2008.

12. The petitioner received letter dated 25.11.2010 issued by

the Executive Engineer, Housing Board directing the petitioner to

stop the construction work however, the reason for the same was not

disclosed to the petitioner. After several representations, the

Executive Engineer issued letter dated 30.11.2010 which referred to

a letter of the Deputy Chief Minister­cum­Minister­in­charge, Urban

Development Department. The note dated 23.11.2010 of the Deputy

Chief Minister to the Secretary, Housing Board refers to the news

item dated 23.11.2010 published in Prabhat Khabar, a daily

newspaper with headlines "Dharmik sthal bechne ka virodh". The

petitioner issued legal notice dated 09.03.2011 to the Housing Board.

13. Vide letter dated 03.08.2011, the petitioner has been

communicated that Agreement dated 14.11.2007 has been cancelled 13

and it was directed to handover the possession of the plot to the

Housing Board. Aggrieved by order contained in letters dated

03.08.2011 and 28.07.2011, the writ petition was filed seeking a

declaration that the action of the respondents is illegal, arbitrary and

wholly without jurisdiction, in as much as, Section 24(3)(b) and

Section 27 of the Jharkhand State Housing Board Act, 2000 are not

applicable in the facts of the present case. A further prayer has been

made seeking quashing of the order contained in Memo dated

12.12.2012 whereby, approval for post­facto approval has been

declined.

W.P. (C) No. 4660 of 2011

14. The petitioner's bid for Plot no. 7 at Harmu, Ranchi was

accepted on 14.03.2007 and accordingly an agreement with respect

to Plot no. 7 was entered with the Housing Board on 18.07.2007 in

which, 41.01% of the residential area was the Housing Board's

allocation. A power of attorney was also executed by the Housing

Board in favour of the petitioner and possession was handed over to

the petitioner. The petitioner engaged architects namely, M/s. Sanjay

Puri Architect Pvt. Ltd. and M/s. Axis, Ranchi and it started the

project with the projected investment of around Rs. 250 lacs besides,

actual building construction expenses. RRDA sanctioned the map

and plan which was submitted vide letter dated 10.05.2010 to the

Housing Board. Vide letter dated 03.08.2011, the petitioner has been 14

communicated that Agreement dated 18.07.2007 has been cancelled

and it was directed to handover the possession of the plot to the

Housing Board. Aggrieved by order contained in letters dated

03.08.2011 and 28.07.2011, the present writ petition was filed

seeking a declaration that the action of the respondents is illegal,

arbitrary and wholly without jurisdiction, in as much as, Section

24(3)(b) and Section 27 of the Jharkhand State Housing Board Act,

2000 are not applicable in the facts of the present case. A further

prayer has been made seeking quashing of the order contained in

Memo dated 12.12.2012 whereby, approval for post­facto approval

has been declined.

W.P. (C) No. 4682 of 2011

15. The petitioner's bid for Plot no. 10 at Harmu, Ranchi was

accepted on 27.04.2007 and accordingly an agreement with respect

to Plot no. 10 was entered with the Housing Board on 18.07.2007 in

which, 30% of the residential area was the Housing Board's

allocation. A power of attorney was also executed by the Housing

Board in favour of the petitioner and possession was handed over to

the petitioner. The petitioner engaged an architect namely,

M/s. GRIDS, Ranchi and the drawing was prepared and submitted

before the Housing Board vide letter dated 26.07.2011 however, the

same has not been approved till date. The petitioner started the

project with the projected investment of around Rs. 150 lacs besides, 15

actual building construction expenses. Vide letter dated 18.03.2009

Secretary, Housing Board requested the Deputy Commissioner, in

view of the disturbances being created in the land, to provide security

to the petitioner. Vide letter dated 03.08.2011, the petitioner has

been communicated that Agreement dated 18.07.2007 has been

cancelled and it was directed to handover the possession of the plot

to the Housing Board. Aggrieved by order contained in letters dated

03.08.2011 and 28.07.2011, the present writ petition was filed

seeking a declaration that the action of the respondents is illegal,

arbitrary and wholly without jurisdiction, in as much as, Section

24(3)(b) and Section 27 of the Jharkhand State Housing Board Act,

2000 are not applicable in the facts of the present case. A further

prayer has been made seeking quashing of the order contained in

Memo dated 12.12.2012 whereby, approval for post­facto approval

has been declined.

KAMLA ADITIYA CONSTRUCTION PRIVATE LIMITED

W.P.(C) No. 5516 of 2011

16. The petitioner is a registered partnership firm which

promoted the company namely, Kamla Aditiya Construction Private

Limited which is duly incorporated under the Companies Act, 1956.

Pursuant to advertisement in various newspapers issued on

12.11.2005 inviting Expression of Interest in seal cover for

developing residential and commercial complexes on vacant plots of 16

different seizes at Ranchi, Jamshedpur, Dhanbad, Bokaro, Hazaribag

and Daltonganj. The petitioner submitted its Expression of Interest

for allotment of plot no. 5 at Harmu Housing Colony, Ranchi and vide

letter date 22.03.2007, the petitioner was informed that its financial

bid which was opened on 29.06.2006, has been found highest. A

development agreement was executed on 05.12.2007 and it is stated

in the agreement that the possession of the plot ad­measuring area of

0.3756 acres free from all encumbrances, was handed over. However,

vide order dated 29.03.2008 construction at the plot situated at

Harmu, Ranchi was ordered to be stopped. Some of the allottees

moved the High Court in W.P.(C) No. 2173 of 2008, W.P.(C) No. 2179

of 2008 and W.P.(C) 1812 of 2008 challenging order dated

29.03.2008. Vide order dated 08.05.2008, the petitioners were

granted liberty to approach the Chairman. After hearing both sides,

the Chairman, Housing Board cancelled order dated 29.03.2008.

17. Thereafter on 07.08.2009, the petitioner submitted the

proposed map/drawing for construction of vegetables and marketing

complexes on plot no. 5 at Harmu, Ranchi. The Housing Board issued

show­cause notice dated 24.12.2010 directing the petitioner to

show­cause as to why and under that circumstances the construction

work was not started. The petitioner vide letter dated 27.01.2011

informed the Housing Board that the plot in question was under

encroachment. The respondent­Housing Board vide letter dated 17

07.03.2011 requested the Deputy Commissioner, Ranchi to depute

Magistrate with sufficient police force for removing the

encroachment. However, the encroachment was not removed and

therefore, the petitioner again requested the Housing Board vide

letter dated 12.07.2011 to hand over physical possession of the land.

18. Before the possession was handed over to the

petitioner­company, the Secretary, Housing Department, Government

of Jharkhand vide letter dated 28.07.2011 directed the Managing

Director, Housing Board to take steps for cancellation of development

agreement executed with the petitioner and other developers.

Consequently, vide letter dated 03.08.2011 the Housing Board

cancelled the agreement dated 05.12.2007. Aggrieved, the petitioner

has filed the present writ petition challenging the order dated

28.07.2011 and 03.08.2011.

W.P.(C) No. 5517 of 2011

19. The petitioner submitted its Expression of Interest for

allotment of plot no. 1 at Bariyatu, Ranchi and vide letter date

13.11.2007, the petitioner was informed that its financial bid which

was opened on 29.06.2006, has been found highest. A development

agreement was executed on 05.12.2007 and it is stated in the

agreement that the possession of the plot ad­measuring area of 0.412

acres free from all encumbrances, was handed over.

20. Vide letter dated 28.04.2009, the petitioner requested the 18

Housing Board to take action for removing the encroachment and

though, the encroachment was not removed, in the meantime, the

Housing Board directed the petitioner vide letter dated 28.08.2009 to

submit the map/drawing. Vide letter dated 23.12.2009, the petitioner

again requested the Housing Board to get the actual measurement of

the plot so as, to enable the petitioner to submit map/drawing.

However, on 24.12.2010 a show­cause notice was issued to the

petitioner directing the petitioner to show­cause as to why and under

what circumstances the construction work on the plot in question was

not started. The petitioner submitted its reply on 27.01.2011 and

only on 11.03.2011, the Housing Board directed the petitioner to

contact the Executive Engineer for demarcation of the land and

possession of the same. The Secretary, Housing Department,

Government of Jharkhand vide letter dated 28.07.2011 directed the

Managing Director, Housing Board to take steps for cancellation of

development agreement executed with the petitioner and other

developers. Consequently, vide letter dated 03.08.2011 the Housing

Board cancelled the agreement dated 05.12.2007. Aggrieved, the

petitioner has filed the present writ petition challenging the order

dated 28.07.2011 and 03.08.2011.

W.P.(C) No. 5543 of 2011

21. The petitioner submitted its Expression of Interest for

allotment of plot no. 4 at Harmu Housing Colony, Ranchi. Vide letter 19

date 22.03.2007, the petitioner was informed that its financial bid

which was opened on 29.06.2006, has been found highest. A

development agreement was executed on 05.12.2007 and it is stated

in the agreement that the possession of the plot ad­measuring area of

1.015 acres free from all encumbrances, was handed over.

22. The petitioner requested the Housing Board to take action

for removing the encroachment and though, the encroachment was

not removed on 24.12.2010, a show­cause notice was issued to the

petitioner directing the petitioner to show­cause as to why and under

what circumstances the construction work on the plot in question was

not started. The petitioner submitted its reply on 27.01.2011. The

respondent­Housing Board vide letter dated 07.03.2011 requested

the Deputy Commissioner, Ranchi to depute a Magistrate with

sufficient police force for removing the encroachment. However, the

encroachment was not removed and therefore, the petitioner again

requested the Housing Board vide letter dated 12.07.2011 to hand

over physical possession of the land. Before the possession was

handed over to the petitioner­company, the Secretary, Housing

Department, Government of Jharkhand vide letter dated 28.07.2011

directed the Managing Director, Housing Board to take steps for

cancellation of development agreement executed with the petitioner

and other developers. Consequently, vide letter dated 03.08.2011 the

Housing Board cancelled the agreement dated 05.12.2007. 20

Aggrieved, the petitioner has filed the present writ petition

challenging the order dated 28.07.2011 and 03.08.2011.

W.P.(C) No. 5544 of 2011

23. The petitioner submitted its Expression of Interest for

allotment of plot no. 17 at Harmu Housing Colony, Ranchi. Vide

letter date 04.12.2007, the petitioner was informed that in view of

decision of Board taken on 08.11.2007 and vide office order dated

28.11.2007 respondent Board decided to allot plot No. 17 in Harmu

Housing Colony, Ranchi to the petitioner for development under Joint

Venture. A development agreement was executed on 05.12.2007 and

it is stated in the agreement that the possession of the plot

ad­measuring area of 0.217 acres free from all encumbrances, was

handed over.

24. The petitioner requested the Housing Board to take action

for removing the encroachment and though, the encroachment was

not removed on 24.12.2010, a show­cause notice was issued to the

petitioner directing the petitioner to show­cause as to why and under

what circumstances the construction work on the plot in question was

not started. The petitioner submitted its reply on 27.01.2011 and the

petitioner submitted the map/drawing for approval of Board and

RRDA on 02.02.2011.

25. Before the possession was handed over to the

petitioner­company, the Secretary, Housing Department, Government 21

of Jharkhand vide letter dated 28.07.2011 directed the Managing

Director, Housing Board to take steps for cancellation of development

agreement executed with the petitioner and other developers.

Consequently, vide letter dated 03.08.2011 the Housing Board

cancelled the agreement dated 05.12.2007. Aggrieved, the petitioner

has filed the present writ petition challenging the order dated

28.07.2011 and 03.08.2011.

W.P.(C) No. 5787 of 2011

26. The petitioner submitted its Expression of Interest for

allotment of plot no. 9 at Hirapur, Dhanbad. Vide letter date

05.06.2007, the petitioner was informed that its financial bid which

was opened on 29.06.2006, has been found highest. A development

agreement was executed on 30.07.2007 and it is stated in the

agreement that the possession of the plot ad­measuring area of

0.711 acres free from all encumbrances, was handed over.

27. The petitioner made several requests to the

respondent­Board for removing the encroachment and handing over

the possession. The Executive Engineer, Housing Board requested the

Deputy Collection, Dhanbad on 08.09.2007 to deputy Magistrate and

provide sufficient policy force for removing encroachment. The

Housing Board issued show­cause notice dated 24.12.2010 directing

the petitioner to show­cause as to why and under that circumstances

the construction work was not started. The petitioner vide letter 22

dated 27.01.2011 informed the Housing Board that the plot in

question was under encroachment.

28. The Executive Engineer, Housing Board informed the

petitioner that the Special Leave Petition being S.L.P.(C) No. 23216 of

2009 has been allowed in favour of the Housing Board and

accordingly, the petitioner was directed to submit the map of the

proposed construction. The petitioner informed the Housing Board

that since the land in question is under illegal occupation of other

persons without measurement of the plot, map cannot be prepared.

29. The Secretary, Housing Department, Government of

Jharkhand vide letter dated 28.07.2011 directed the Managing

Director, Housing Board to take steps for cancellation of development

agreement executed with the petitioner and other developers.

Consequently, vide letter dated 03.08.2011 the Housing Board

cancelled the agreement dated 05.12.2007. Aggrieved, the petitioner

has filed the present writ petition challenging the order dated

28.07.2011 and 03.08.2011.

W.P.(C) No. 5789 of 2011

30. The petitioner submitted its Expression of Interest for

allotment of plot no. 5 at Hirapur, Dhanbad. Vide letter date

05.06.2007, the petitioner was informed that its financial bid which

was opened on 29.06.2009, has been found highest. A development

agreement was executed on 30.07.2007 and it is stated in the 23

agreement that the possession of the plot ad­measuring area of 0.157

acres free from all encumbrances, was handed over.

31. The Housing Board issued show­cause notice dated

24.12.2010 directing the petitioner to show­cause as to why and

under that circumstances the construction work was not started. The

petitioner vide letter dated 27.01.2011 informed the Housing Board

that the plot in question was under encroachment. The

respondent­Housing Board vide letter dated 31.03.2011 requested

the Deputy Commissioner, Ranchi to depute a Magistrate with

sufficient police force for removing the encroachment. However, the

encroachment was not removed and therefore, the petitioner again

requested the Housing Board vide letter dated 24.06.2011 to hand

over physical possession of the land. Since the possession of the land

in question was not given, the petitioner made several representation

including letter dated 25.03.2010 for removing the encroachment

and handing over the possession. The petitioner vide letter dated

24.06.2011 again informed the Housing Board that the plot no. 5 at

Hirapur, Dhanbad is still under encroachment and therefore, the

encroachment should be immediately removed and the possession of

the land should be handed over to the petitioner immediately.

32. Before the possession was handed over to the

petitioner­company, the Secretary, Housing Department, Government

of Jharkhand vide letter dated 28.07.2011 directed the Managing 24

Director, Housing Board to take steps for cancellation of development

agreement executed with the petitioner and other developers.

Consequently, vide letter dated 03.08.2011 the Housing Board

cancelled the agreement dated 05.12.2007. Aggrieved, the petitioner

has filed the present writ petition challenging the order dated

28.07.2011 and 03.08.2011.

W.P.(C) No. 5790 of 2011

33. The petitioner submitted its Expression of Interest for

allotment of plot no. 2A at Adityapur, Jamshedpur. The petitioner

was informed that its financial bid which was opened on 29.06.2006,

has been found highest. A development agreement was executed on

07.03.2011 and it is stated in the agreement that the possession of

the plot ad­measuring area of 0.574 acres free from all

encumbrances, was handed over.

34. The petitioner submitted the proposed map/drawing on

25.06.2011 before the Board which was forwarded to Adityapur

Industrial Area Development Authority for approval on 23.07.2011.

35. The Secretary, Housing Department, Government of

Jharkhand vide letter dated 28.07.2011 directed the Managing

Director, Housing Board to take steps for cancellation of development

agreement executed with the petitioner and other developers.

Consequently, vide letter dated 03.08.2011 the Housing Board

cancelled the agreement dated 05.12.2007. Aggrieved, the petitioner 25

has filed the present writ petition challenging order dated 28.07.2011

and 03.08.2011.

W.P.(C) No. 5791 of 2011

36. The petitioner was informed that its financial bid which

was opened on 29.06.2006, has been found highest. A development

agreement was executed on 30.07.2007 and it is stated in the

agreement that the possession of the plot ad­measuring area of 0.223

acres free from all encumbrances, was handed over.

37. The petitioner on 25.03.2010 requested the

respondent­Housing Board to remove encroachment from the land.

However, the Housing Board issued show­cause notice dated

24.12.2010 directing the petitioner to show­cause as to why and

under that circumstances the construction work was not started. The

petitioner vide letter dated 27.01.2011 informed the Housing Board

that the plot in question was under encroachment.

38. Before the possession was handed over to the

petitioner­company, the Secretary, Housing Department, Government

of Jharkhand vide letter dated 28.07.2011 directed the Managing

Director, Housing Board to take steps for cancellation of development

agreement executed with the petitioner and other developers.

Consequently, vide letter dated 03.08.2011 the Housing Board

cancelled the agreement dated 05.12.2007. Aggrieved, the petitioner

has filed the present writ petition challenging the order dated 26

28.07.2011 and 03.08.2011.

NAV NIRMAN BUILDERS

W.P. (C) No. 4736 of 2011

39. Challenging orders dated 28.07.2011 and 03.08.2011, the

petitioner has approached this Court. A further prayer for declaring

the action of the respondent­ State and the respondent­Board as

grossly illegal, arbitrary and wholly without jurisdiction, as the

provisions of Section 24(3)(b) and Section 27 of the Jharkhand State

Housing Board Act, 2000 are not attracted in the present case, has

also been made. By filing an amendment application which was

allowed, the petitioner has impugned, order contained in letter dated

19.10.2012 and order dated 12.12.2012 also.

40. The National Housing and Habitat Policy, 1998 noticed

that there will be a huge shortage of housing in the country and

investment of about 1.51 lac crores would be required, for which

forging strong partnership between the private, public and

cooperative sectors, is required. The National Housing and Habitat

Policy, 2007 replaced the 1998 policy with the objective to provide

affordable housing to all. Considering the National Housing and

Habitat Policy, 2007, the Government of Jharkhand gave direction to

the Housing Board for construction of multi­storied apartment over

vacant land of the Housing Board for providing mass shelter for

public­ private partnership.

27

41. On 05.10.2005, a meeting was again held in presence of

the then Chief Minister­ Housing Minister for evaluation of the work

of the Housing Board. In the said meeting also the Development

Commissioner, Finance Secretary, Housing Secretary, Managing

Director of the Jharkhand State Housing Board and others were

present. In the said meeting a decision was taken to develop the

vacant land of the Housing Board and construct multi­storied

buildings/commercial complexes through Joint Venture. The Minutes

of Meeting dated 05.10.2005 was sent to the Housing Board vide

letter dated 27.12.2005.

42. After the decision taken in the meeting dated 05.10.2005,

an advertisement was issued inviting Expressions of Interest for

construction of residential complex over 13 acres of vacant land at

Adityapur, Jamshedpur and finally, the finance bid of the

petitioner­Firm for construction over Plot No.3, at Adityapur was

accepted by the Housing Board. An agreement dated 11.07.2007

was entered into by the Housing Board with the petitioner­ Firm for

construction of multi­storied residential complex at Plot no.3, at

Adityapur, Jamshedpur in which, 32% share was allocated to the

Housing Board. The petitioner has completed the project by making

huge investment of fund and possession of the flats has been given to

the buyers. A power of attorney was also executed on 11.08.2007,

in favour of the petitioner. The plan and map was sanctioned by 28

AIADA on 19.12.2007, in the name of Jharkhand Housing Board. On

the verbal instruction of the then Chief Minister namely, Shri Madhu

Koda, the Housing Board issued letter dated 29.03.2008 directing the

petitioner to stop construction work. The petitioner has already

constructed 170 flats in five blocks over Plot No. 3, Adityapur and the

petitioner's share of 68% has been sold by the petitioner. The

petitioner has incurred about 18 crores in completion of the project.

NAV NIRMAN BUILDERS

W.P. (C) No. 5074 of 2011

43. An agreement dated 11.07.2007 was entered into by the

Housing Board with the petitioner­ Firm for construction of

multi­storied residential complex at Plot no.1 at Adityapur,

Jamshedpur admeasuring 0.433 acres in which 35.25% share was

allocated the Housing Board. The petitioner deposited a sum of

Rs. 30 Lacs with the Jharkhand State Housing Board, for conversion

from residential to commercial. When the petitioner started

construction work after the approval of the sanctioned plan by

AIADA, a part of the land was claimed by a private individual, who

raised serious objections and therefore, the matter was reported to

the Housing Board vide letter dated 30.05.2011. However, the

Housing Board did not take any step for resolving the issue.

44. A power of attorney was also executed on 11.08.2007 in

favour of the petitioner. The plan and map was sanctioned by AIADA 29

on 19.12.2007 in the name of Jharkhand Housing Board.

45. Challenging orders dated 28.07.2011 and 03.08.2011, the

petitioner has approached this Court. A further prayer for declaring

the action of the respondent­ State and the respondent­Board as

grossly illegal, arbitrary and wholly without jurisdiction, as the

provisions of Section 24(3)(b) and Section 27 of the Jharkhand State

Housing Board Act, 2000 are not attracted in the present case, has

also been made. By filing an amendment application which was

allowed, the petitioner has impugned, order contained in letter dated

19.10.2012 and order dated 12.12.2012 also.

SIMPLEX INFRASTRUCTURES LIMITED

W.P. (C) No. 4766 of 2011

46. The petitioner has approached this Court challenging

orders dated 03.08.2011 and 08.08.2011.

47. An agreement dated 04.07.2007 was entered into by the

Housing Board with the petitioner­ Company for construction of

residential­cum­commercial complex of Plot no.11 at Harmu, Ranchi

in which, 35% share was allocated to the Housing Board.

48. After the decision taken in the meeting dated 05.10.2005,

an advertisement was issued inviting Expressions of Interest from

reputed private companies, central and state public sector

undertakings. On 22.03.2007, Managing Director of the Board

informed the petitioner that it has been selected for construction of 30

residential/commercial complex at Plot No. 11 at Harmu, Ranchi.

An agreement dated 04.07.2007 was executed by the Housing Board

and thereafter, a power of attorney was also executed on 24.09.2007

in favour of the petitioner. On 03.12.2007 the petitioner with the aid

and assistance of architects and consultants prepared conceptual

plans, building and structural layouts and the same were submitted

to Board. On 10.01.2008 the plans were approved by Board and

forwarded the same to the Vice­Chairman, RRDA with a copy to the

petitioner. On 29.03.2008 the Board directed stoppage of work

under the oral directions given by the then Hon'ble Chief Minister.

49. Challenging orders dated 28.07.2011 and 03.08.2011, the

petitioner has approached this Court. A further prayer for declaring

the action of the respondent­ State and the respondent­Board as

grossly illegal, arbitrary and wholly without jurisdiction, as the

provisions of Section 24(3)(b) and Section 27 of the Jharkhand State

Housing Board Act, 2000 are not attracted in the present case, has

also been made. By filing an amendment application which was

allowed, the petitioner has impugned, order contained in letter dated

19.10.2012 and order dated 12.12.2012 also.

W.P. (C) No. 4443 of 2011

50. Claiming payment of a sum of Rs. 24 lacs (approx.) to

M/s. Excel Ventures Construction Pvt. Ltd. in lieu of Flat No. A­401

on Plot No. 9 at Harmu, Ranchi, the petitioner namely, Neeraj Kumar 31

Bhattacharya has filed this writ petition. It is stated that the

petitioner occupied the said flat vide Occupation Letter dated

26.07.2011. The flat has been constructed strictly as per the norms

and the sanction plan. The government cannot issue a blanket order

for the demolition of the building. Substantial civil rights have

accrued in favour of the petitioner and the order passed by the State

Government without affording an opportunity of hearing to the

petitioner, is violative of principles of natural justice. For the

procedural lapse, if any, the petitioner cannot be punished. An

agreement for sale has been executed on 01.07.2009 between the

petitioners and M/s. Excel Venture Construction Pvt. Ltd.

W.P. (C) No. 4444 of 2011

51. Claiming payment of a sum of Rs. 24 lacs (approx.) to

M/s. Excel Ventures Construction Pvt. Ltd. in lieu of Flat No. A­703

on Plot No. 9 at Harmu, Ranchi, the petitioner namely, Kunal Anand

has filed this writ petition. It is stated that the petitioner occupied

the said flat vide Occupation Letter dated 24.07.2011. The flat has

been constructed strictly as per the norms and the sanction plan.

Substantial civil rights have accrued in favour of the petitioner and

the order passed by the State Government without affording an

opportunity of hearing to the petitioner, is violative of principles of

natural justice. For the procedural lapse, if any, the petitioner cannot

be punished. An agreement for sale has been executed on 32

26.08.2009 between the petitioners and M/s. Excel Venture

Construction Pvt. Ltd.

COUNTER­AFFIDAVIT:

52. The respondent­State of Jharkhand has filed a

counter­affidavit stating that the provisions under Sections 24 and 27

of the Jharkhand State Housing Board Act, 2000 were not followed

by the Jharkhand State Housing Board while floating tenders and

allotting vacant land for joint venture. It is true that the Board has

not incurred any expenditure but, the provisions of Section 24 (3) (b)

is very clear. It provides that "Administrative Approval" for schemes

involving expenditure exceeding Rs. 200 lakhs shall not be accorded

without prior approval of the State Government. The control of the

Government as envisaged under the Act includes restraint, check etc.

by the Government and if prior approval of the State Government

was not taken by the Board for executing schemes and entering into

development agreement, the entire exercise would be contrary to the

provisions of the Act. No change in the land use as indicated in the

plan is permissible without prior permission of the Government. The

Jharkhand State Housing Board has been established with an object

to provide house to the needy persons. The Board undertakes work

on "no profit no loss". The Board is not justified to enter into joint

venture with the private builders with a motive to earn profit. The

entire exercise was against the spirit of the Jharkhand State Housing 33

Board Act, 2000. The development agreement entered into between

the Board and the private builders is in gross violation of Regulation

9, 10(ii), 21, 23 and 25 of the Jharkhand State Housing Board

(Management and Disposal of Housing Estate) Regulation, 2004

which provides the manner in which the allotment has to be made by

the Board. The development agreement in the present case gives

unqualified right to the builders to allot the units to any person of

their choice and the choice of person/persons selected by the builder

for sale of unit falling in the builder allocation shall be binding on the

Housing Board and thus, the Housing Board cannot even enforce the

reservation policy including the allotment for handicapped persons.

The development agreement for constructing plots/flats and

commercial complex are against the public policy and also against the

provisions of the Act and the Rules made thereunder and therefore,

void ab­initio. The resolution, order and agreement of the housing

Board were passed/executed in excess of the power conferred in law.

A vigilance enquiry has been instituted for examining the

irregularities committed by the Jharkhand State Housing Board. The

purpose for which the land was acquired was to construct the

houses/flats for middle and lower income group housing scheme. The

Government has therefore, not given its consent for implementation

of the joint venture scheme and it has issued direction to the Housing

Board vide letter dated 28.07.2011 for taking steps for cancellation of 34

the Joint Venture scheme. The plea that the Housing Board does not

have to make any investment is mis­conceived and mis­leading

because, the vacant plots belonging to the Housing Board are

valuable property. No right under the Power of Attorney has accrued

in favour of the allottees as the Power of Attorney executed by the

Housing Board has not been registered. The builders have no

authority to allot the flats without joining the Housing Board. It has

been denied that the construction is already complete. The

Government is competent to issue necessary direction to the Housing

Board and the Board is bound by the direction of the Government

issued from time to time. It is denied that any third party right has

been created in accordance with law. The principles of natural justice

is not required to be followed in purely contractual dispute. The

parties to the agreement are at liberty to cancel the agreement. The

agreement entered into between the allottees and the Board has not

been approved by the Government. The question of loss and damage

cannot be raised in a writ proceeding.

53. Though, in its counter­affidavit, the Housing Board has

tried to justify its action, it is contended that the writ petitions are

liable to be dismissed.

SUBMISSIONS :

54. Mr. Rajiv Ranjan, the learned counsel appearing for the

petitioners submitted that, the reason for cancellation disclosed in the 35

impugned letters are apparently unsustainable. There is no violation

of Sections 24 (3) (b) and 27 of the Bihar State Housing Board Act,

1982 (as adopted by the State of Jharkhand). The decision for

cancellation has been taken without even affording an opportunity of

hearing and without issuing show­cause notice to the petitioners. The

order of cancellation of allotment of land for construction of

residential/commercial projects would follow serious civil

consequences and therefore, an opportunity of hearing was required

to be given to the allottees. Under the Jharkhand State Housing

Board Act, 2000, the Government has no power to interfere with the

day to day functioning of the Housing Board. The Government has no

power to order cancellation. Pursuant to the decision taken on

05.10.2005 in the meeting of the Minister­in­charge, the Housing

Board adopted a Resolution for allotment and development of vacant

land through Joint Venture in its 17th Meeting dated 27.02.2007 and

four years thereafter, a decision has been taken to terminate the

agreement which is not justified. A concluded contract cannot be

terminated in the manner it has been ordered for cancellation. The

decision taken in meeting held on 05.10.2005 was the decision of the

Government, pursuant to which, advertisement was issued and bids

were invited. The highest bidders were awarded the contract. The

entire tender process was conducted in a fair and transparent

manner. Several years after the right of the parties concretized, the 36

State Government took a different stand and ordered cancellation of

the agreement.

55. Mr. Anoop Kumar Mehta, the learned counsel appearing

for the petitioner in W.P.(C) No. 5074 of 2011 submitted that the

State Government took a policy decision in line with the National

Housing Policy and there is no illegality in the action of the Housing

Board in entering a Joint Venture with the private parties for

construction of residential/commercial complexes. If the grant is

open and transparent and it fulfills all the legal requirements, the

scope of judicial review is minimal. The Constitution of India enjoins

upon a public authority/statutory authority to act fairly and

reasonably. The action which is unfair and unreasonable cannot be

sustained. The State is bound by its promise held out to the allottees.

Acting upon the solemn promise made by the State and the Housing

Board, the allottees altered their position and now, the State cannot

be permitted to retract/recall its own decision.

56. Mr. Indrajit Sinha, the learned counsel appearing for the

petitioner in W.P.(C) No. 4766 of 2011 contended that no public

revenue was involved in the decision taken by the Housing Board and

therefore, the matter was not required to be placed before the

Cabinet. Referring to decision in "G.B.Mahajan and others vs. Jalgaon

Municipal Council and Others", reported in (1991) 3 SCC 91, it is

submitted that the Joint Venture entered into between Jharkhand 37

State Housing Board and the private builders for construction of

residential/commercial complex in which the Housing Board has not

infused any money, is perfectly valid and legal. The impugned order

of cancellation travels beyond the show­cause notice issued to the

petitioner.

57. Mr. A.K. Sahani, the learned counsel appearing for the

petitioner­M/s Kamla Aditya Construction Pvt. Limited adopted the

submission of other counsels for the petitioners. Mr. Delip Jerath, the

learned counsel appearing for the petitioner­Nav Nirman Builders

[W.P.(C) No. 4736 of 2011] submitted that the petitioner has not

provided flats rather, it has provided "Home" to the homeless. They

have also reiterated the stand taken by the other writ petitioners.

58. Per contra, Mr. Ajit Kumar, the learned Additional

Advocate­General submitted that the proceeding dated 05.10.2005

does not reflect the decision of the Government. No policy was

framed by the Government or by the Housing Board and modalities

were never decided. The allotment of lands to the petitioners is

contrary to the object of the Jharkhand State Housing Board Act and

thus, the allotments were illegal. No right is conferred upon the

petitioners on the basis of the illegal allotments. As a matter of fact,

the process of allotment itself has been found neither transparent nor

fair. The constructions made on the illegal allotments cannot be

regularised and the occupants/purchasers of the illegally constructed 38

flats also cannot claim any right in law or equity. Since the allotment

itself has been found illegal, the principle of promissory estopple is

not applicable. The power of the State Government is well defined in

the Housing Board Act itself and the State Government has power to

cancel the allotments. The petitioners were issued notices and they

were aware of the proceeding pending against them and therefore,

the petitioners cannot raise a plea of violation of rules of natural

justice.

59. Mr. Sachin Kumar, the learned counsel appearing for the

Jharkhand State Housing Board, finding himself in a difficult

situation, fairly submitted that though the Housing Board is bound to

sail along the State of Jharkhand, it is the specific stand of the

Housing Board that it acted in the matter pursuant to the decision

taken in the meeting held on 05.10.2005 and subsequently, the Board

in its 17th Meeting adopted a resolution for construction of residential

houses/commercial complexes through Joint Venture. It is submitted

that simply because the Board functions on "no profit no loss basis",

it does not mean that the Board cannot earn profit. The recent trend

all over the country is to construct houses in Joint Venture. The

procedure adopted by the Housing Board was fair and transparent. In

the present Batch of cases, there are two categories of allottees. One

category is of the allottees who were issued show­cause notices prior

to the order of cancellation and the other category of allottees are 39

those whose allotments have been cancelled pursuant to direction of

the State Government. In the first category of cases, sufficient

opportunity was granted to the allottees and therefore, they cannot

complain of violation of rules of natural justice. It is further

submitted that the requirement under Article 166 of the Constitution

is not applicable in case of the Board. The Housing Board is under a

duty to provide a host of facilities to people. Section 29 of the

Jharkhand State Housing Board Act, 2000 enjoins upon the Housing

Board to provide streets, back lane, bridges, culverts and causeways,

the drainage, water supply and lighting of the streets included in the

scheme. It also provides for the provision of open parks, playing

fields and open spaces for the benefit of any area comprised in the

scheme or any adjoining area and the enlargement of existing parks,

playing fields, open spaces and approaches. The land in question was

acquired in the year, 1964 and subsequently, it was transferred to the

Board and thus, the title vests in the Housing Board. It is however,

submitted that the present writ petitions are liable to be dismissed.

The petitioners have based their case on the development agreements

but, the present proceeding is not a proceeding in a suit for specific

performance and thus, the writ petition is not the remedy.

60. In reply, Mr. Rajiv Ranjan has submitted that the State

Government had knowledge of the Joint Venture executed by the

Housing Board and this is not a case in which the alleged irregularity 40

has been detected subsequently. In so far as, the share of the builders

is concerned, the regulation of the Housing Board would not apply.

In the Development Agreement, there is no restriction on the Housing

Board in following its own regulations in so far as, the allocation of

the Housing Board in the joint venture is concerned. The builders

have invested huge amounts for construction of the buildings and

they cannot be compelled to sale the flats/commercial spaces at a

lower rate. There is no cancellation Clause in the agreement and

therefore, the Housing Board cannot cancel the agreement executed

with the allottees. The builders faced obstructions at every stage and

with great difficulties some of the projects could be completed. Time

was not the essence of the contract. Even if the resolution of the

Housing Board is not approved in its meeting, the State Government

has no power to order cancellation of the development agreement.

The vigilance enquiry cannot decide the rights of the parties. The

letter of cancellation contains grounds other than the ground taken

by the Housing Board in its show­cause notices to some of the

allottees.

DISCUSSION :

61. The facts emerging from the pleadings in the writ

petitions can be summerised thus ;

62. On 05.10.2005, a meeting was held at the residence of

the then Chief Minister in which, the Housing Secretary, the Finance 41

Secretary, the Managing Director of the Jharkhand State Housing

Board and other senior officials of the Government were present. A

decision was taken to launch a scheme for construction of

multi­storied buildings on the vacant land of the Housing Board. It

was also decided that in future, the multi­storied residential flats and

commercial complexes would be constructed through Joint Venture.

The proceeding of the meeting dated 05.10.2005 was communicated

to the Managing Director, the Jharkhand State Housing Board vide

letter dated 27.12.2005. Expressions of interest were invited through

advertisement issued on 12.11.2005 and 27.11.2005 and the last

date for submission of bids was 12.12.2005. The technical bid was

opened and bidders, who qualified, were identified. They were asked

to submit their finance bids alongwith plan and, the highest bidders

were directed to execute development agreement, which was entered

into between the petitioners and the Jharkhand State Housing Board

on different dates. A power of attorney was also executed by the

Jharkhand State Housing Board in favour of the allottees. Only few

months thereafter, vide letter dated 29.03.2008, the Secretary,

Jharkhand State Housing Board communicated M/s. Excel Venture

Construction Pvt. Ltd., M/s. Modi Construction Project Ltd., M/s.

Symfox Infrastructure Ltd. and M/s. Kamla Construction Company

that the Managing Director, Jharkhand State Housing Board has

ordered immediate stoppage of construction of multi­storied 42

buildings through Joint Venture. A Writ Petition being, W.P.(C).

No. 2173 of 2008 and batch cases filed in the High Court, which were

disposed of vide order dated 19.05.2008 permitting the petitioners to

approach the Chairman, Jharkhand State Housing Board for

settlement of dispute in terms of Article­ X, Clause­ 10.01 of the

Agreement. The Chairman of the Housing Board after hearing both

the parties, quashed order no. 667 dated 29.03.2008. The order

dated 01.09.2008 of the Chairman was communicated to the

petitioners vide Memo dated 19.12.2008. In several cases, the

Housing Board issued show­cause notices to the allottees for not

commencing the construction work within the stipulated period. In

few cases at the request of the allottees, the Housing Board had

written letter to the Deputy Commissioner for removing the

encroachments so that the construction work can proceed. About

four years after the development agreement was executed by the

Housing Board, the Secretary, Housing Department communicated

the Managing Director, Jharkhand State Housing Board that the

development agreements were executed in contravention of Section

24(3)(b) and 27(1), (2) & (3) of the Jharkhand State Housing Board

Act, 2000 and therefore, the State Government has taken a decision

not to accord sanction to the decision of the Housing Board. A

direction was issued for taking steps for cancellation of the

development agreements.

43

63. Challenging communications dated 28.07.2011 and

03.08.2011, batch of writ petitions were filed in the High Court and

vide order dated 08.08.2011, an order of "status quo" was passed by

the High Court. Thereafter, other writ petitions were filed and vide

order dated 24.08.2011, the interim order dated 08.08.2011 was

extended to all the writ petitions. It was directed that the allottees

would not make further constructions and no further allotment in

favour of any party shall be made by the builders. In the proceeding

before the High Court, the Housing Board submitted that it would

move proposal before the State Government seeking post­facto

approval. A proposal dated 19.10.2012 seeking post­facto approval

of the decision for construction of multi­storied residential/

commercial complexes through Joint Venture, was prepared by the

Housing Board and vide letter dated 19.10.2012, the said proposal

was forwarded to the Government for its sanction however, on

12.12.2012, the proposal of the Housing Board seeking post­facto

approval was turned down by the Secretary, Housing Department,

Government of Jharkhand. The necessary details in all the writ

petitions are detailed below:

Case no. Residential/ Stage of Construction Investment Shares of parties Commercial 4513 of Plot No. 9­ Harmu, Out of Three Block A & 1400 lacs 34.54% for Housing 2011 Ranchi A1 are complete and in Board (Area­ 1.357 Acres) B only finishing is due.

80% flat has been 65.46% to the (Residential) allotted. petitioner. 4683 of Plot No. 2­ Harmu, Plan approved by RRDA 260 lacs 56.80% for the 2011 Ranchi & Excavation of petitioner (Area­ 2.46 Acres) foundation complete 44

Commercial 43.20% for Housing Board 4720 of Plot No. 8­Harmu, Building plan submitted 59.14% for the 2011 Ranchi for approval before petitioner (Area­ 2.687 Acres) RRDA Commercial 40.86% for the Housing Board 618 of Plot No. 3­ Harmu, Boundary wall erected, 200 lacs 36.31% (in 2011 Ranchi survey done, map residential) & 41.25% (Area­ 5.415 Acres ) submitted to H.B., (in commercial) for RRDA for approval Housing Board 50% Commercial & 50% Residential 63.69% (in residential) & 58.75% (in commercial) for petitioner 4660 of Plot No. 7­ Harmu, Survey done, plan 250 lacs 58.99% for the 2011 Ranchi submitted to H.B. on petitioner (Area­1.693 Acres ) 11.12.2007 & approved Commercial by RRDA & other 41.01% for the statutory bodies Housing Board 4682 of Plot No. 10­Harmu, Survey done, , plan 150 lacs 70% for the petitioner 2011 Ranchi submitted to H.B on Area­2.6437 Acres 26.07.2011 30% for the Housing Residential & Send to Board RRDA for approval 5516 of Plot No. 5, Harmu, On 07.08.2009 Earnest money­ 2,04,920/­ 64% for the petitioner 2011 Ranchi Map/drawing of the Expenditure­ 1,63,869/­ (Area - 0.3756 proposed construction Cost of survey­ 50,000/­ 36% for the Housing Acres) of the plot has been Total investment­ Board Commercial submited. 4,18,789/­

5517 of Plot No. 1,Bariyatu, No progress Earnest money­ 3,96,215/­ 65% for the petitioner 2011 Ranchi Expenditure­ 1,79,750/­ (Area - 0.412 Acres) Cost of survey­ 55,000/­ 35% for the Housing Commercial Total investment­ Board 6,30,965/­ 5543 of Plot No. 4, Harmu, Earnest money­ 5,25,280/­ 65% for the petitioner 2011 Ranchi Expenditure­ 4,42,830/­ (Area - 1.015 Acres) Cost of survey­ 80,000/­ 35% for the Housing Commercial Total investment­ Board 10,48,110/­ 5544 of Plot No. 17, Harmu, On 02.02.2011, Earnest money­ 1,18,265/­ 70% for the petitioner 2011 Ranchi petitioner submitted Expenditure­ 94,674/­ (Area - 0.217 Acres) map/drawing to Cost of survey­ 30,000/­ 30% for the Housing Residential Housing Board for Total investment­ Board approval of the RRDA. 2,42,939/­ 5787 of Plot No. 9, Hirapur, No progress Earnest money­ 3,87,350/­ 70% for the petitioner 2011 Dhanbad Expenditure­ 2,69,103/­ (Area - 0.711 Acre) Cost of survey­ 75,000/­ 30% for the Housing Commercial Total investment­ Board 7,31,453/­ 5789 of Plot No. 5, Hirapur, No progress Earnest money­ 98,438/­ 75% for the petitioner 2011 Dhanbad Expenditure­ 54,798/­ (Area - 0.157 Acres) Cost of survey­ 20,000/­ 25% for the Housing Residential Total investment­ Board 1,73,236/­ 5790 of Plot No. 2A, Submitted for approval Earnest money­ 70% for the petitioner 2011 Adityapur, of map/drawing before 5,08,488/­ 45

Jamshedpur AIADA on 23.07.2011. Expenditure­ 2,00,344/­ 30% for the Housing (Area - 0.574 Acres) Cost of survey­ 55,000/­ Board Residential Total investment­ 7,63,832/­ 5791 of Plot No. 6, Hirapur, Earnest money­ 1,21,500/­ 75% for the petitioner 2011 Dhanbad Expenditure­ 77,834/­ (Area - 0.223 Acres) Cost of survey­ 25,000/­ 25% for the Housing Residential Total investment­ Board 2,24,334/­ 4736 of Plot No. 3­ Adityapur, (I) 19.12.2007­ plan & 18 crores on account of 68% (in residential) 2011 Jamshedpur maps sanctioned by survey, preparation of & 67% (in (Area - 1.614 Acres) AIADA drawing & development of commercial) for the

(ii) A total of 170 flats Plot. petitioner Residential & have been constructed Commercial in 5 blocks over plot no. 32% (in residential) 3, i.e. A1, A2, A3, B1 & & 33% (in B2 commercial) for the

(iii) petitioner's share Housing Board 68% sold and Possession delivered 4766 of Plot No. 11­ (i) 03.12.2007­ Plan No progress 65% in residential 2011 Harmu, Ranchi summitted to ­cum­ commercial for Area­ 1.405 Acres H.B. the petitioner

(ii) 10.01.2008­ Plan forwarded to RRDA 35% in residential residential ­cum­ (iii) 03.08.2010­ RRDA ­cum­ commercial for commercial sanctioned the Plan the Housing Board

(iv) Boundary work Started & Commenced excavation for the foundation work 5074 of Plot No. 1­ Mouza­ 03.07.2010 ­ Plan 30 Lacs deposited with 64.75% in residential 2011 Dindli, Adityapur, approved by AIADA Housing Board ­cum­commercial for Jamshedpur (Ann.­10) the petitioner Area­ 0.433 Acres & Excavation of foundation has been 35.25% in residential residential ­cum­ completed ­cum­commercial for commercial the Housing Board

W.P.(C) No. 4443 of 2011 - Petitioner purchased flat no. A 401 from M/s Excel Venture Construction Pvt. Ltd. by paying consideration amount of Rs. 24 lacs.

W.P.(C) No. 4444 of 2011 - Petitioner purchased flat no. A 703 from M/s Excel Venture Construction Pvt. Ltd. by paying consideration amount of Rs. 24 lacs.

Article 166 of the Constitution of India:

64. Much argument has been advanced on the interpretation

of the proceeding dated 05.10.2005. The petitioners have contended

that the decision taken in the meeting held on 05.10.2005 was a

policy decision taken by the Minister­in charge, Housing, in 46

consultation with other higher officials of the Government including,

the Finance Secretary and the Housing Secretary, pursuant to which

the Jharkhand State Housing Board invited tenders and finally the

successful bidders were allotted vacant plots for construction of

multi­storied residential/commercial complexes. It is further

contended that the Minister­in­charge, Housing was competent to

take such decision because no revenue expenditure by the Housing

Board is involved in the Joint Venture.

65. Per contra, Mr. Ajit Kumar, learned Additional

Advocate­General submitted that meeting held on 05.10.2005 was

merely a review meeting in which an idea was floated for

construction of multi­storied residential/commercial complexes

through Joint Venture. In the meeting held on 05.10.2005, neither

the modalities were discussed nor any scheme was framed rather, a

decision was taken that the Housing Board would frame a scheme.

The decision taken in the meeting held on 05.10.2005, the

proceeding of which was forwarded to the Managing Director,

Jharkhand State Housing Board on 27.12.2005, cannot be said to be

a policy decision of the Government of Jharkhand. Referring to Rules

X, XII and XV of the Rules of Executive Business, 1979, the learned

Additional Advocate­General has submitted that the decision taken in

the meeting dated 05.10.2005 would fall under Item Nos. 13, 16 and

19 of the 3rd Schedule and therefore, a government decision was sine 47

qua non before issuing advertisements inviting bids for Joint Venture.

66. A perusal of the proceeding of meeting held on

05.10.2005 indicates that a decision was taken for construction of

multi­storied residential/commercial complexes on vacant plots of

the Housing Board through Joint Venture however, it also unerringly

indicates that a decision was taken to frame a scheme. Though, no

exception can be taken to the decision taken on 05.10.2005 and no

one has challenged the bonafide of the decision taken by the

Minister­in charge, Housing, the issue is whether any scheme was

framed or not and whether the public at large were made aware of

the intention of the Housing Board by giving wide publicity of the

alleged proposed scheme. It is clear that the Housing Board was

required to frame a scheme for construction of multi­storied

residential buildings on vacant plots and the Housing Board was also

required to ensure wide publication of the scheme through

advertisements. Mr. Rajiv Ranjan, the learned counsel for the

petitioners has contended that the Chief Minister­cum­Minister­in­

charge, Housing was competent to take a policy decision and since

there was no financial implication, the matter was not required to be

placed before the Cabinet for a decision of the Government. The

learned counsel has relied on a decision in "Bangalore Development

Authority and Others" vs. R. Hanumaiah and Others" (2005) 12 SCC

508 to contend that the State Government ordinarily cannot interfere 48

in the day to day functioning of a statutory authority. I find that the

Hon'ble Supreme Court has held in the said case that the State can

exercise its power where a policy matter is involved and the

Bangalore Development Authority which has been constituted for

specific purpose, cannot take a decision which would defeat such

purpose. The direction of the Chief Minister in the said case has been

held, not confirming to the provision of Article 166 of the

Constitution. In "Jaipur Development Authority and Others vs. Vijay

Kumar Data and Another" (2011) 12 SCC 94, the recommendation of

the Committee of Ministers has not been treated as the decision of

the State Government culminating in issuance of a policy circular.

The Hon'ble Supreme Court has observed that, the letter merely

speaks of the discussion made by the Committee and the decision by

it. By no stretch of imagination, the same can be treated as the policy

decision of the Government within the manner of Article 166 of the

Constitution. I am of the opinion that the discussion held on

05.10.2005 was not a policy decision and the Housing Board was

required to frame a scheme and to seek approval of the government,

before inviting tenders.

67. The petitioners have relied on Section 109 of the

Jharkhand State Housing Board Act, 2000 to contend that the

decision taken in the meeting held on 05.10.2005 was a direction

under Section 109. Though, I have held that the decision taken on 49

05.10.2005 was not a decision of the Government as contemplated

under Article 166 of the Constitution, even if it is assumed that it was

a direction by the Government to the Board to develop the vacant

land through Joint Venture, it is an admitted fact that no term and

condition was approved by the Board in its 17 th meeting and the

Board's allocation in the Joint Ventures was decided by the Housing

Board, arbitrarily. The Housing Board acted in the matter, in a

manner unknown to its own rules and procedure.

Scheme of the Jharkhand State Housing Board Act, 2000:

68. The learned counsel for the petitioners submitted that

letter dated 12.12.2012 indicates that the State Government declined

to accord sanction on the ground that the development agreements

were executed in contravention of Sections 24(3)(b) and Section 27

of the Jharkhand State Housing Board, 2000 however, Section

24(3)(b) is attracted only when the scheme involves expenditure

exceeding Rs. 2 crores whereas, in the Joint Venture the Housing

Board has not infused any fund and thus, the decision of the Housing

Board cannot be held contrary to Section 24(3)(b). The learned

counsel has further submitted that Section 27(2) specifically provides

that the Government may entrust to the Housing Board the framing

and execution of any Housing scheme whether provided by the Act or

not. It is a matter of record that pursuant to decision taken in the

meeting dated 05.10.2005, the Housing Board issued advertisement 50

and selected highest bidders in a fair and transparent manner. Even

the Board in its 15th and 17th meeting approved the proposal for

constructing multi­storied residential buildings through Joint Venture

and thus, the Housing Board acted in consonance with the provision

under Section 27(2) and not contrary to the said provision.

69. The learned Additional Advocate­General has submitted

that the Jharkhand State Housing Board being a statutory body is

under a duty to act in accordance with law and follow its own

regulations. The narration of events which followed the decision

taken in meeting held on 05.10.2005 indicates that the Housing

Board acted with some oblique motive, in a haste. The first

advertisement was issued on 12.11.2005 and the last date of

submission of bids was 12.12.2005 whereas, the proceeding of

meeting held on 05.10.2005 was forwarded to the Managing

Director, Housing Board on 27.12.2005 and thus, by the time, letter

dated 27.12.2005 was communicated to the Managing Director of

Housing Board, one part of the transaction was over. Referring to

Section 53A of the Transfer of Property Act and Section 17 of the

Registration Act, the learned Additional Advocate­General has

submitted that after 2001, all agreements whereby an immovable

property is transferred, is required to be registered compulsorily

however, the development agreements executed between the

allottees and the Jharkhand State Housing Board are unregistered, 51

which indicates the hasty action of the Board. Mr. Ajit Kumar, the

learned A.A.G. has referred to decision in "Srinivasa Cooperative

House Building Society Ltd. vs. Madam Gurumurthy Sastry and Others"

reported in (1994) 4 SCC 675 to make a distinction between "a

private company" and "Government company". The learned AAG

relied on decision in "Esha Ekta Apartments Coop. Housing Society Ltd.

vs. Municipal Corpn. Of Mumbai" (2013) 5 SCC 357, wherein the

Hon'ble Supreme Court has observed thus,

56. "...............We would like to reiterate that no authority administering municipal laws and other similar laws can encourage violation of the sanctioned plan. The courts are also expected to refrain from exercising equitable jurisdiction for regularisation of illegal and unauthorised constructions else it would encourage violators of the planning laws and destroy the very idea and concept of planned development of urban as well as rural areas."

70. Section 2 (13) of the Jharkhand State Housing Board Act,

2000 defines "housing or improvement scheme" to mean a scheme

framed under this Act and includes, any one of the types of schemes

referred to in Section 28. Section 3 provides that it would be the

duty of the Housing Board to carry out the provisions of the Act,

subject to the restrictions, conditions and limitations contained

therein.

71. Section 23 confers supervisory jurisdiction upon the

Government. It provides that the Government may stay or set­aside 52

any resolution of the Board or any order of the Managing Director or

of the Board, if the Government is of the opinion that the resolution

or order of the Housing Board or the Managing Director is in excess

of the power conferred by law or is not in consonance with the public

interest. Thus, it is apparent that Section 23 clothes the State

Government with the power to nullify any resolution or order of the

Housing Board or the Managing Director. The power conferred upon

the State Government can be exercised in public interest and thus, if

the Government finds that any order or resolution of the Housing

Board is not in consonance with the Public interest, the Government

in exercise of power under Section 23 would cancel such

order/resolution.

72. Section 24 empowers the Board to enter into contracts for

carrying out any of the purposes of the Act. Section 24 (3) puts

limitation on the power of the Board and provides that approval for

any scheme involving expenditure of Rs. 200 Lacs cannot be granted

without prior approval of the State Government. The Board's power

in granting administrative approval for schemes is restricted to the

schemes involving expenditure less than Rs. 200 Lacs. Section

24(3)(b) thus, pre­supposes existence of a scheme involving

expenditure over Rs. 200 Lacs.

73. It has been contended on behalf of the Housing Board

that after the land acquired by the Government was transferred to the 53

Housing Board, the Housing Board became absolute owner of the

land and it was free to take a decision with respect to

utilisation/disposal of the land so vested in the Housing Board. The

petitioners have contended that under the agreement, it has been

specifically provided that the Housing Board is not required to infuse

any fund and thus, the approval of the State Government was not

required. I am unable to accept the contention raised by the

petitioners and the Housing Board. Though no material has been

placed on record in support of the contention that the land vested

absolutely in the Housing Board, even if it is assumed that after the

transfer the land vested in the Housing Board, the Housing Board is

under a duty to utilise the land for carrying out any of the purposes

of the Act and not otherwise. Technically, the Housing Board is not

required to invest money in the Joint Venture, however, it cannot be

denied that the land itself is a valuable consideration and if sold, it is

capable of fetching price. I find no substance in the contention that

provision of Section 24(3)(b) is not attracted in the present case.

74. Section 26 provides that every contract by the Managing

Director shall be entered into in such manner and form as may be

prescribed and the contract not executed in terms of the provisions of

the Act and the Rules made thereunder, shall not be binding on the

Housing Board. A perusal of the development agreement reveals

startling facts. Under the contract, the allottees have been given 54

absolute right of ownership. There is no provision for cancellation of

contract/development agreement in case of breach of the terms of

the agreement. Besides this, a Power of Attorney has also been

executed in favour of the allottees. Apparently, glaring irregularity

has been committed in formulation of the development agreement

and execution of the same.

75. Section 27 provides powers and duties of the Board to

undertake the Housing Improvement Schemes. Section 27 (1) puts a

limitation on the power of the Housing Board. The powers and

duties of the Housing Board to undertake Housing Improvement

Schemes and their expenditure have been made subject to the

provisions of the Act and also the control of the Government. Thus,

the expenditure incurred and the work undertaken by the Housing

Board are always subject to the control of the Government.

76. Section 27 (2) provides that the Government would fix

the terms and conditions and entrust to the Board the framing and

execution of any Housing or Improvement Scheme whether provided

under the Act or not. The framing of a scheme by the Housing Board

is thus, subject to the condition that the Government entrusts the

responsibility of framing of a scheme on the Housing Board and the

scheme would be framed by the Housing Board on terms and

conditions determined by the State Government.

77. I find that Sl. No.9 in the proceeding of the 15 th meeting 55

of the Board does not refer to Joint Venture and the proceeding of the

17th Meeting held on 27.02.2007 indicates that in the supplementary

agenda, the proposal for Joint Venture was approved and thus, it is

apparent that the Board itself has accorded post­facto approval when

everything was already done. On physical verification, as a matter of

fact, several infirmities were detected in the process of finalization of

the bids. The financial bids were not received in sealed cover and

those were not accompanied by the original documents. In the

proceeding for finalizing the financial bid, one of the important

members namely, the Chief Engineer has not put his signature. The

allotments were made arbitrarily, is evident from the fact that,

Housing Board's allocation differs in each allotment. No intelligible

criteria was fixed by the Housing Board. The development agreement

provides the lease period of 99 years which in my view could not

have been done by the Housing Board as the said stipulation clearly

converts the period of lease into a perpetual lease. I do not find any

specific order of the Government directing the Housing Board to

frame a scheme. The terms and conditions of the Joint Venture were

not determined by the State Government. I have perused the original

file produced by the Housing Board and I do not find even a

reference of a proposal containing the terms and conditions for the

scheme or any communication to the Government in this regard.

Approval of even the Minister­in­charge, Housing was also not taken 56

by the Housing Board. The decision taken in meeting held on

05.10.2005 was definitely not a government decision.

PRINCIPLES OF NATURAL JUSTICE:

78. In so far as, the plea of violation of rules of natural justice

is concerned, I am of the opinion that in the aforesaid facts, no

hearing was required to have been given to the allottees. The legality

of allotment by the Housing Board was the issue before the

government and as seen above, the allotments were definitely illegal.

If on a technical plea of violation of the rules of natural justice the

decision of the government is interfered with, it would perpetuate

illegality. In "Raj Kumar Soni and Another vs. State of U.P. And

Another" (2007) 10 SCC 635, in a case where the allotment was held

illegal, the Hon'ble Supreme Court observed that, "even if there was

any technical violation of the rules of Natural Justice, this is not a fit

case for interference as such interference would result incarceration

of illegal, nay void order".

79. In "Gadde Venkateswara Rao vs. Government of Andhra

Pradesh and Others" reported in AIR 1966 SC 828 it has been held

thus,

17. ".............If the High Court had quashed the said order, it would have restored an illegal order­it would have given the Health Centre to a village contrary to the valid resolutions passed by the Panchayat Samithi......"

80. In "M. C. Mehta vs. Union of India and Others" reported in 57

(1999) 6 SCC 237, the Hon'ble Supreme Court has observed thus,

17. ".............. The Court can under Article 32 or Article 226 refuse to exercise its discretion of striking down the order if such striking down will result in restoration of another order passed earlier in favour of the petitioner and against the opposite party, in violation of the principles of natural justice or is otherwise not in accordance with law."

PROMISSORY ESTOPPEL :

81. The nature, scope and extent of the doctrine of

promissory estoppel came up for consideration before the Hon'ble

Supreme Court time and again. The doctrine of promissory estoppel

was evolved in equity, in order to prevent injustice. It is by now

settled that the doctrine of promissory estoppel can be applied

against the government also, where the interest of justice, morality

and fairness clearly directed such a course. However, the promissory

estoppel cannot be invoked to compel the government or even a

private party to do an act prohibited by law. In "M/s. Motilal

Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh and Ors.",

reported in (1979) 2 SCC 409, while examining the plea that, if on a

categorical assurance of the State Government that the industry

would be exempted from payment of sales tax, Motilal Padampat

Sugar Mills established a hydrogenic plant for manufacturing of

vanaspati, whether the State Government was bound to honour the

assurance and exempt the industry from sales tax for a period of

three years, the Hon'ble Supreme Court observed as under: 58

8."....................The true principle of promissory estoppel, therefore, seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre­ existing relationship between the parties or not."

82. In "Kasinka Trading and Anr. vs. Union of India and Anr.",

reported in (1995) 1 SCC 274, it has been held that, "the doctrine of

promissory estoppel cannot be invoked in the abstract and the

Courts are bound to consider all aspects including the result sought

to be achieved and the public good at large." In "Amrit Banaspati Co.

Ltd. and Anr. vs. State of Punjab and Anr.", reported in (1992) 2 SCC

411, it has been held that unless the representation made by an

official on behalf of the government is established to be beyond the

scope of authority, it should be held binding on the government. The

Hon'ble Supreme Court has held thus:

10. "But promissory estoppel being an extension of principle of equity, the basic purpose of which is to promote justice founded on fairness and relieve a promisee of any injustice perpetrated due to promisor's going back on its promise, is incapable of being enforced in a court of law if the promise which 59

furnishes the cause of action or the agreement, express or implied, giving rise to binding contract is statutorily prohibited or is against public policy.....................Was such promise contrary to law and against public policy?

Could it be enforced in a court of law?......................... Taxes like sales tax are paid even by a poor man irrespective of his savings with a sense of participation in growth of national economy and development of the State. Its utilization by way of refund not to the payer but to a private person, a manufacturer, as an inducement to set up its unit in the State would be breach of trust of the people amounting to deception under law."

83. In the present case, the government was definitely not

bound by the action of the Housing Board. The decision of the

Housing Board to invite applications for construction of residential/

commercial complexes through Joint Venture was not a decision

taken in public interest. The decision taken in the meeting dated

05.10.2005 was not a licence to the Housing Board to flout all canons

of rule of law. I further find that the proceeding of the meeting dated

05.10.2005 specifically refers to a direction to the Housing Board to

prepare a scheme and to publicise the scheme through newspapers.

In the garb of the alleged "direction" given by the Minister­in charge

on 05.10.2005, the Housing Board has adopted a course which

cannot be sanctioned in law. The fallacy in the contention raised on

behalf of the petitioners lies in the fact that the government never

held out any promise to the allottees. The government never

publicised any intention to sanction construction of residential 60

flats/commercial complex by the Housing Board through Joint

Venture and therefore, the government cannot be compelled to

accord sanction to the illegal actions of the Housing Board.

84. In "Monnet Ispat and Energy Limited vs. Union of India and

Ors.", reported in (2012) 11 SCC 1, the Hon'ble Supreme Court has

held thus:

182.5. "In no case, the doctrine of promissory estoppel can be pressed into aid to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. No promise can be enforced which is statutorily prohibited or is against public policy."

85. To summarize, the decision of the Housing Board to make

allotment of vacant land to private developers was illegal and

arbitrary. The said decision was contrary to the object for which the

Housing Board has been constituted and the decision was taken in

breach of provisions of Section 24 (3) (b) and Section 27 of the

Jharkhand State Housing Board Act, 2000. There was neither any

plan, nor any study conducted by the Housing Board. There was also

no proposal or a feasibility report prepared by the Housing Board.

The Housing board did not frame a scheme or sought approval for

allotment to private builders from the Government. The criteria by

which the share of the Housing Board has been fixed, is completely

arbitrary. The process of allotment to private builders was not fair 61

and transparent. The decision taken in the meeting held on

05.10.2005 was not a policy decision of the Government. The

allottees cannot claim estoppel against the Government and the

principle of Promissory Estoppel is not applicable in their case as the

Government had never made any promise to the allottees. The

vigilance enquiry was an eye wash, instituted only to overcome the

latches on the part of the Government authorities.

86. In "Rajasthan Housing Board and Anr. vs. G.S. Investments and

Anr." reported in (2007) 1 SCC 477, a case in which price fetched for

the plots was much below the market rate and consequently, the

State Government disapproved the auction, it was found that the

decision of the Government was taken in larger public interest. It was

further held that, even if, some defect was found in the ultimate

decision resulting in cancellation of the auction the matter did not

require interference of the Court. The Hon'ble Supreme Court has

held thus:

"The sale of plots by the Rajasthan Housing Board by means of an auction is essentially a commercial transaction. Even if some defect was found in the ultimate decision resulting in cancellation of the auction, the court should exercise its discretionary power under Article 226 of the Constitution with great care and caution and should exercise it only in furtherance of public interest. The court should always keep the larger public interest in mind in order to decide whether it should interfere with the decision of the authority.................." 62

87. In "M.I. Builders Private Limited vs. Radhey Shyam Sahu

and Ors." (1999) 6 SCC 464, when it was found that there was no

proposal, no document, no plan, no study, no project report or

feasibility report, on the basis of which Mahapalika could have given

permission for construction of shopping complex, the Hon'ble

Supreme Court held that, Mahapalika had violated Section 114 of

Uttar Pradesh Municipal Corporation Adhiniyam, 1959 and thus,

decision of Mahapalika to permit a private builder to construct under

ground shopping complex was illegal, arbitrary and unconstitutional.

88. In "Padma vs. Hiralal Motilal Desarda and others" (2002)

7 SCC 564, though SIDCO was set­up to carry out its activity on "no

profit no loss basis" however, SIDCO resorted to bulk sale of surplus

land with a view to make substantial profits. The Hon'ble Supreme

Court held that "the decision for bulk land sale could not be said to

have been taken in public interest".

89. Several decisions were cited by the counsel for the

petitioners. I have gone through those judgments and I find that in

none of cases relied upon by the petitioners, the Hon'ble Supreme

Court has upheld the illegal allotments to the builders. Much reliance

has been placed on the decision in "ITC Ltd. v. State of U.P." reported

in (2011) 7 SCC 493. I am of the opinion that the facts in the present

case are entirely different from the facts in ITC case. Any benefit of

the decision in ITC case, if at all can be extended, it can only be 63

extended for the purpose of taking a decision whether the allotment

of the plots on which the residential buildings have been constructed,

can be granted post­facto approval by the government or not.

90. Though, it is permissible in law to cancel the entire

allotment, apparently the Government has not applied its mind on

the effect of cancellation in cases where the constructions are

complete. In many cases transaction with the buyers is complete and

they have taken possession of the flats. No fault can be attributed to

them. Thus, those cases should have been segregated. In "Benny T.D.

and Ors. vs. Registrar of Cooperative Societies and Anr." reported in

(1998) 5 SCC 269, in view of the findings of the Capital Public

Enquiry Commission that there has been tampering of marks in

respect of several candidates, the decision was taken to cancel the

entire selection. The Hon'ble Supreme Court held that same could

not be done as the same would tantamount to gross violation of

principle of natural justice. In "Omkar Lal Bajaj & Ors. vs. Union of

India & Anr.", reported in (2003) 2 SCC 673, the Hon'ble Supreme

Court observed as under :

45. "The solution by resorting to cancellation of all was worse than the problem. Cure was worse than the disease. Equal treatment to unequals is nothing but inequality. To put both the categories -- tainted and the rest -- on a par is wholly unjustified, arbitrary, unconstitutional being violative of Article 14 of the Constitution. ....................."

64

91. In "Amey Coop. Housing Society Ltd. vs. Public Concern for

Governance Trust and Ors." (2007) 4 SCC 635, in a public interest

litigation, the High Court found that undue favour has been shown to

the cooperative societies and therefore, the High Court took recourse

to drastic measure such as, forfeiture along with cancellation of

allotment. The Hon'ble Supreme Court observed that a more

pragmatic approach should have been taken by the High Court and it

would have taken recourse to have the plots revalued by an

independent Government valuer and to compensate SIDCO, in

respect of any loss that might have been caused to it on account of

under valuation of the said plot and, necessary order should have

been passed. The State Government was directed to cause fresh

valuation through an independent Government valuer and difference

in value was to be paid by the society to SIDCO.

92. In "Bangalore City Cooperative Housing Society Ltd. vs.

State of Karnataka and Ors." reported in (2012) 3 SCC 727, no

housing scheme was framed by Bangalore City Cooperative Housing

Society Limited nor it was shown that it had framed a housing

scheme which was approved by the State Government. The High

Court held acquisition of land not in public purpose. Keeping in view

the fact that some of the members may have build their houses on the

site allotted to them, the Hon'ble Supreme Court gave liberty to the

appellant society to negotiate with the respondents for purchase of 65

their land at the prevailing market price.

93. In view of the fact that in W.P.(C) No. 4513 of 2011 and

W.P.(C) No. 4736 of 2011, the construction of residential building is

almost complete and the builders have sold most of the flats, though

the findings recorded in the fore­going paragraphs are equally

applicable in all the cases, a pragmatic view needs to be taken by the

Court, in so far as, W.P.(C) No. 4513 of 2011 and W.P.(C) No. 4736 of

2011, W.P.(C) No. 4443 of 2011 and W.P.(C) No. 4444 of 2011 are

concerned. It is nobody's case that the construction on the above two

plots was in violation of the Building Bye­laws. At least, the flat

owners/buyers are not responsible for the decision taken by the

Housing Board. In view of the aforesaid discussions all the writ

petitions except, W.P.(C) No. 4513 of 2011, W.P.(C) No. 4736 of 2011,

W.P.(C) No. 4443 of 2011 and W.P.(C) No. 4444 of 2011 are,

dismissed. However, in the peculiar facts and circumstances of the

case, W.P.(C) No. 4513 of 2011 and W.P.(C) No. 4736 of 2011, W.P.(C)

No. 4443 of 2011 and W.P.(C) No. 4444 of 2011 are disposed of with

the following directions;

(i) The respondent­State of Jharkhand is directed to constitute a

Committee consisting of the Chief Secretary, the Finance Secretary

and the Secretary, Department of Housing. The Committee would

examine the possibility of granting post­facto approval for the

allotment of Plot No. 9, Harmu, Ranchi and Plot No. 3, Adityapur, 66

Jamshedpur.

(ii) The allottees of the above two plots would furnish documents

establishing construction of the residential buildings, as claimed by

them in the present proceeding.

(iii) The Committee would examine the genuineness of the claim that

most of the flats have been sold by the builders.

(iv) The Committee would also ascertain whether the builders

continued construction inspite of the restraint order of the Housing

Board/State/Court.

(v) In case of doubt, the Committee would summon the

representative of the builders and may direct them to produce

evidence.

(vi) If the Committee decides that it would be in the public interest to

approve the allotments in W.P.(C) No. 4513 of 2011 and W.P.(C) No.

4736 of 2011, the Committee would recommend appropriate terms

including, payment of market rate, penal charges and any other

charges for which the builders may be liable to pay.

(vii) The current market rate of the above two plots would be

ascertained by two Government valuers.

(viii) The Committee would take a decision within four months.

(ix) The recommendation of the Committee would be placed before

the Government and it is expected that the Government would accord

due weightage to the recommendation of the Committee. 67

94. All the Interlocutory Applications are dismissed. Interim

orders are vacated.

(Shree Chandrashekhar, J.)

Jharkhand High Court, Ranchi Dated: 21 /11/2014 Tanuj/R.K./Amit/.A.F.R.

Later on: The original file of the Housing Board is returned to

Mr. Sachin Kumar, Advocate appearing on behalf of the Housing

Board.

(Shree Chandrashekhar, J.)

Manish