STATE OF MIZORAM AND ORS. vs EXCEL VINCOM PVT. LTD. AND ANR.

IN THE HIGH COURT AT CALCUTTA
CIVIL APPEALLATE JURISDICTION

(APPELLATE SIDE)
FMA 772 of 2024

State of Mizoram & Others.
vs.
Excel Vincom Private Limited & Anr.

Before : The Hon’ble Justice Arijit Banerjee

&
The Hon’ble Justice Apurba Sinha Ray

For the Appellant : Mr. Biswajit Deb, Advocate General,
Mizoram,
Mr. Sayan Dev Kumar, Adv.
Ms. Priyakshi Banerjee, Adv.
Mr. Sourav Ghosh, Adv.
Ms. Priyanka Ghosh, Adv.

For the
Respondent


Mr. S.N. Mookherjee, Sr.Adv.,
Mr. Rajarshi Dutta, Adv.

Mr. Shaunak Mukhopadhyay, Adv.
Mr. Shubrajyoti Mukherjee, Adv.
Mr. Neelesh Choudhury, Adv.
Ms. Anuradha Poddar, Adv.


Judgment on
13.11.2026
:
Arijit Banerjee, J. :-
1. This appeal is directed against the judgment and order dated April 2,
2024, whereby a learned Judge of this Court allowed WPA No. 1344 of
2024, being a writ petition filed by the respondents herein. The operative
portion of the said judgment and order reads as follows: -

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“ 99. In such view of the matter, WPA No. 1344 of 2024 is allowed
on contest, thereby setting aside the impugned cancellation of the
tender process in favour of the petitioners by the respondents. As
a consequence, the respondents are directed to immediately
execute a sale deed in terms of the agreement, pursuant to the
said tender, in favour of the petitioners with regard to the subject
land at 24, Ashutosh Chowdhury Avenue, Ballygunge, Kolkata–
700 019, within six weeks from date. The respondents shall also
co-operate in the registration of the same in favour of the
petitioners at the earliest thereafter. ”
Submission made on behalf of the appellants: -
2. A plot of land situated at 24, Ashutosh Chowdhury Avenue, (formerly
old Ballygunge Road), Kolkata- 700 019, was purchased by the Government
of Mizoram in the year 1973. The Government of Mizoram constructed a
guest house on the said land which was the only Mizoram House in Kolkata
till 1998. The entire office of the Government of Mizoram in Kolkata was
functioning from the said property.
3. The erstwhile Government of Mizoram decided to demolish the old
structure on the said land for the purpose of construction of a new Mizoram
House. The old building was demolished in the year 2020. The plan for new
construction was sanctioned by the competent authority in the year 2022.
4. On or about May 26, 2023, the General Administration Department
(in short ‘GAD’), Government of Mizoram floated an ‘e-tender-cum-e-auction’
notice for selling the said land. In the auction process, the respondent no. 1

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herein emerged as the highest bidder. An unregistered agreement for sale
was executed on October 6, 2023, between the Government of Mizoram
represented by the appellant no. 3 herein and the respondent no. 1,
represented by the respondent no. 2.
5. General elections were announced in the State of Mizoram in the
month of October, 2023. The new Government took over charge on
December 8, 2023, i.e., two months after the agreement for sale was
executed by and between the parties.
6. Soon after the sale agreement was executed, the people of Mizoram
came to know of the same and started protesting. There was a deep public
resentment in the entire State of Mizoram. Several NGOs, civil society
members and social organizations raised their protest. Representations were
submitted on December 22, 2023, by Kolkata Mizo Students, an
organization of the students of Mizoram in Kolkata, to the Chief Minister of
Mizoram protesting against the proposed sale of the said property. The
grounds taken were that the said property has a historical and heritage
significance and has served as a refuge to the Mizo students and
professionals residing in Kolkata. A similar representation dated December
27, 2023, was submitted to the Chief Minister of Mizoram on behalf of
another social organization called Calcutta Mizo Welfare Association with a
request for cancelling the proposed sale of the said land in the larger public
interest of the people of Mizoram.
7. The new Government considered the representations and decided to
revisit the issue for ascertaining the propriety of the decision and process
undertaken for putting the land in question on sale. Several anomalies

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surfaced in the decisions making process which were opposed to larger
public interest. Hence, the Government of Mizoram decided to cancel the
entire E-Tender process on January 4, 2024, in exercise of its power under
Clause 3.1.11 of the bid document read with Clauses 5.5 and 6.2 thereof.
The tender process was cancelled in larger public interest and the entire
money paid by the writ petitioners including the earnest money was
refunded.

8. It was submitted that the change of Government was not a reason for
cancellation of the sale process. Keeping in view the sentiments of the
closely knit Mizo Community in Kolkata and in their interest, the new
Government decided to shelve the idea of selling the said land. The erstwhile
Government did not adhere to the rules and law relating to the transfer of
Government land as provided in Rule 309 of GFR, 2017. Moreover, in
principle approval of the Council of Ministers had not been obtained for
selling the said Government land. In this connection, reliance was placed on
the decision of the Hon’ble Supreme Court in the case of MRF Ltd. v.
Manohar Parrikar, reported at (2010) 11 SCC 374 - paragraph 108.
9. It was submitted that the decision taken by the new Government to
cancel the agreement for sale of the said property is far from arbitrary and
was taken in larger public interest. In this connection, reliance was placed
on the decision of the Hon’ble Apex Court in the case of Indore Vikas
Praadhikaran (IDA) and Another v. Shri Humud Jain Samaj Trust and
Another, reported at 2024 SCC OnLine SC 3511 – paragraphs 12 to
14.

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10. It was then submitted that Clause 6.2 of the conditions of e-tender
has stipulated that ownership and possession of the property will be
transferred only after execution of the sale deed. Hence, ownership of the
property has still not been transferred to the respondent no. 1 and the
appellants are well within their rights to cancel the entire tender process.
11. Learned Advocate General for the State of Mizoram then submitted
that there was an alternative remedy available to the writ petitioners in the
form of Clause 14 of the agreement for sale which is an arbitration clause.
Hence, the writ petition should not have been entertained. In this
connection, reliance was placed on the following decisions: -
(i) Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir and
Ors, reported at (2022) 5 SCC 345 - paragraph 10.
(ii) United Bank of India v. Satyawati Tondon and Ors.,
reported at (2010) 8 SCC 110 - paragraphs 44, 45, 46.
(iii) South Indian Bank Ltd. & Ors. v. Naveen Mathew Philip &
Anr., reported at (2023) SCC OnLine SC 435 - paragraphs 11,
13 and 14.
12. It was then submitted that learned Single Judge’s interpretation of the
relevant clauses of the e-tender, renders Clause 3.1.11 of the tender otiose.
Under that clause the tenderer has reserved the right to cancel the entire e-
tender – cum e-auction process at any stage prior to the signing of the sale
deed . In such a case, the amount deposited by the allottee including EMD
would be returned and the tendering authority shall not be liable to pay
compensation or interest for any loss. The conclusion of the learned Single
Judge that the writ petitioners having made necessary payment including

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penalty amount and an agreement for sale having been entered into by and
between the parties, creating an indefeasible right in favour of the writ
petitioners, runs contrary to Clause 3.1.11.
Such a finding of learned Single Judge is contrary to the principle laid
down by the Hon’ble Supreme Court and the High Courts that an agreement
to enter into an agreement does not conclude the contract and is not
enforceable. In this connection, reliance was placed on following decisions: -
(i) Dressar Rand S.A. v. Bindal Agro Chem Ltd., reported at
(2006) 1 SCC 751 - paragraph 39.
(ii) Nikhil Adhesives Limited thro' Dharmeshbhai Dhirajbhai
Pandya v. Kandla Port Trust, reported at 2011 SCC OnLine Guj
897 - paragraph 16 (c).
(iii) Dharma Naika v. Rama Naika, reported at (2008) 14 SCC
517 - paragraph 26.
13. It was further submitted that the learned Judge erred in holding that
the principle of promissory estoppel is attracted in the facts of this case.
Such principle could be applied only if the final sale deed had been executed
in favour of the writ petitioners. In this connection, reliance was placed on
the decision of the Hon’ble Supreme Court in the case of Haryana Urban
Development Authority and Ors v. Orchid Infrastructure Developers (P)
Ltd., reported at (2017) 4 SCC 243 – paragraphs 12 to 16, 28 to 30.
14. It was then argued that even assuming that the doctrine of promissory
estoppel applied in this case, once public interest is accepted as the superior
equity overriding individual equity, the principle would be applicable only in
cases where a period has been indicated for operation of the promise. If

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there is supervening public equity, the Government would be allowed to
change its stand and would have the power to withdraw from the
representation made by it which induced persons to take steps to their
detriment. The Government is competent to retract from a promise made,
even if no manifest public interest is involved, provided that no one is put in
any adverse situation which cannot be rectified. In this connection learned
Advocate General relied on the following decisions:
(i) Shrijee Sales Corporation and Anr v. Union of India,
reported at (1997) 3 SCC 398.
(ii) Pawan Alloys and Casting (P) Ltd. v. U.P. SEB (1997) 7 SCC
251.
(iii) Union of India v. VVF Ltd., reported at (2020) 20 SCC 57 -
paragraphs 21.2, 21.4 and 21.1.
With
SLP (C) 19998 of 2013 and SLP No.CC 1787 of 2014 Barak
Valley Cement vs Union of India -Public Interest vis a vis
promissory estoppel 2011 (3) SCC.
(iv) Sidhbali Steels Ltd and Ors v. State of Uttar Pradesh,
reported at 2011 (3) SCC 193 - paragraphs 32 and 33.
(v) Yamuna Expressway v. Shakuntala Education, reported at
(2022) 20 SCC 698 - paragraphs 56 and 57.
(vi) Sales Tax Officer and Anr v. Shree Durga Oil Mills and
Anr, reported at (1998) 1 SCC 572 - paragraphs 22, 24.

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15. It was submitted that the learned Judge failed to appreciate that in
the guise of a writ petition, the respondents herein were seeking the remedy
of specific performance which could be done only in an appropriate
proceeding filed in a competent Civil Court. In this connection learned
Advocate General relied on the following two decisions:
(i) Municipal Council Gondia v. Divi Works & Supplies, HUF
and Ors, reported at 2022 INSC 244: (2022) SCC OnLine SC

247 – paragraph 8.
(ii) R. Hemalatha v. Kashthuri, reported at (2023) 10 SCC 725
–paragraphs 19, 22 and 23.
16. It was then submitted that learned Single Judge erred in discarding
the pith and substance of the appellants’ defence as regards existence of
serious anomalies in the entire decision-making process which renders the
same void apart from the overwhelming larger public interest involved,
compelling the applicants to cancel the tender.
17. Learned Advocate General referred to Sections 17 (1)(A) and 49 of the
Registration Act, 1908 and Sections 53A and 54 of the Transfer of Property
Act, 1882. I will revert to these provisions later in the judgement, if
necessary.

18. Reference was then made to the decision of the Hon’ble Supreme
Court in R. Hemalatha v. Kashthuri, reported at (2023) 10 SCC 725 in
support of the submission that an agreement for sale which is incomplete,
cannot be enforced.
19. Learned Advocate General then cited Renaissance Distilleries and
Breweries Ltd. v. Government of NCT of Delhi & Ors, reported at 2007

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SCC OnLine Del 1134 in support of his contention that a party who has
participated in a tender process is barred from challenging such process
subsequently.
20. Finally, learned Advocate General submitted that a party to a contract
cannot be allowed to adhere to and abide by some of the terms of the
contract which are advantageous to him and repudiate the other terms of
the contract which might be disadvantageous to him. One cannot approbate
and reprobate at the same time. In this connection reference was made to
New Bihar Biri Leaves Co. and Ors v. State of Bihar and Ors, reported
at (1981) 1 SCC 537, paragraphs 40 and 48 .
Submission made on behalf of the respondents: -
21. Appearing for the respondents/writ petitioners, Mr. S.N Mookherjee,
learned Senior Counsel, drew our attention to various clauses of the tender
document including clauses 4 (Offer Acceptance), 5 (Payment Schedule) and
6 (Execution of Sale Deed). He then referred to an email dated July 20,
2023, sent by the Tendering Authority to the respondents intimating that
the bid of the respondents had been accepted during financial evaluation by
the duly constituted committee.

22. Learned Senior Counsel referred to the building plan dated August 25,
2022, sanctioned in favour of GAD and submitted that till date no step has
been taken by GAD for making any construction on the concerned land
which is lying vacant. GAD never had any real intention of constructing any
building on the said land. Mr. Mukherjee also submitted that official
documents have been disclosed only for the period till January 30, 2023.
For the period between February 1, 2023 and May 2023, no document, note

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sheet, etc. has been produced to show any irregularity in the decision of the
Government of Mizoram to dispose of the subject property. Under Section
114, Illustration (e), of the Indian Evidence Act, the Court may presume that
official acts have been regularly performed. No infirmity in the decision of
the Government of Mizoram to sell the concerned property has been
demonstrated.
23. It was submitted that the correspondence exchanged between the
parties would show that the stage for cancellation of the tender process was
long gone. The only thing that remained was execution of the conveyance.
The decision to cancel the process was obviously prompted by the change of
Government in Mizoram.
24. Mr. Mookherjee, submitted that even if the tendering authority
reserves to itself the power to cancel the tender, if such power is exercised
arbitrarily, the Courts can intervene, as in the present case. If cancellation
of the tender process is bad in law, the Court can strike it down and can
pass consequential orders in favour of the successful tenderer. In this
connection reliance was placed on the decision of the Hon’ble Supreme
Court in Vice Chairman & Managing Director, City and Industrial
Development Corporation of Maharashtra Ltd. & Anr. v. Shishir Realty
Private Limited & Ors., reported at (2021) SCC OnLine SC 1141 –
paragraphs 64-70.
25. In support of his submission that availability of an alternative remedy
by way of arbitration or civil suit, is not an absolute bar to maintainability of
a writ petition, learned Senior Counsel relied on the following decisions: -

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(i) ABL International Ltd. v. Export Credit Guarantee
Corporation. of India Ltd. and Ors., reported at (2004) 3 SCC
553 – paragraphs 8,11,16,22-23,25,52-53.
(ii) State of U.P. v. Sudhir Kumar Singh and Ors, reported at
(2021) 19 SCC 706 – paragraphs 24 to 26.
(iii) Maharashtra Chess Association. v. Union of India and
Ors., reported at (2020) 13 SCC 285 – paragraphs 18-25.
(iv) Unitech Ltd. and Ors v. Telangana State Industrial
Infrastructure Corporation (TSIIC) and Ors, reported at (2021)
16 SCC 35 – paragraphs 39.5 and 39.7.
(v) Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-
Assessing Authority and Ors., reported at (2023) 109 GSTR
402 – paragraph 4.

26. Learned Counsel submitted that the Writ Court undoubtedly has the
power to quash arbitrary cancellation of a binding contract. As a
consequential relief, the Writ Court can direct specific performance of such
contract, as the learned Single Judge has done in the present case. In this
connection learned Counsel referred to the following decisions: -
(i) Gujarat State Financial Corporation. v. Lotus Hotels (P)
Ltd., reported at (1983) 3 SCC 379 – paragraphs 9 to 11.
(ii) ABL International Ltd. v. Export Credit Guarantee
Corporation of India Ltd., Supra – paragraphs 11,23,27.
(iii) Godavari Sugar Mills Ltd. v. State of Maharashtra and
Ors, reported at (2011) 2 SCC 439 – paragraphs 5,6 and 8.
(iv) State of U.P. v. Sudhir Kumar Singh., Supra – paragraphs
21 to 26.
(v) Mihan India Ltd. v. GMR Airports Ltd. & Ors, reported at
2022 SCC OnLine SC 574.

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27. Mr. Mukherjee then submitted that the doctrine of promissory
estoppel applies in cases of Government tenders. He relied on the decisions
in: -
(i) Gujarat State Financial Corporation. v. Lotus Hotels (P)
Ltd., Supra – paragraphs 9 to 11.
(ii) Vice Chairman & Managing Director, City & Industrial
Development Corporation. of Maharashtra Ltd. v. Shishir
Realty (P) Ltd. and Anr, (2022) 16 SCC 527 – paragraphs 64 to
70.

28. Learned Counsel then submitted that actions motivated by raging
revenge are not permissible under the Constitution of India. A different
political party coming into power after an election cannot be permitted to
retract from binding commitments made by the previous dispensation
without compelling reasons. In this connection reliance was placed on Vice
Chairman & Managing Director, City & Industrial Development
Corporation. of Maharashtra Ltd. v. Shishir Realty (P) Ltd., Supra –
paragraphs 61-62.
29. Learned Senior Counsel finally submitted that it has not been
demonstrated that there was any such overwhelming public interest which
compelled the Government of Mizoram to cancel the entire tender process on
the verge of execution of the conveyance after receiving the full consideration
amount and after detailed exchange of correspondence with the respondent
company. The two representations relied upon by learned Advocate General
for the State of Mizoram do not disclose any such public interest as would
justify the Government of Mizoram in cancelling the tender process. Even in
a commercial transaction, the State cannot act arbitrarily.

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Judgment of learned Single Judge:-
30. The learned Judge, while allowing the writ application, observed, inter
alia , as follows: -
(i) By the 2018 amendment to Section 20 of the Specific Relief Act,
1963, the previous wide discretion of courts not to grant decrees of
specific performance on issues of equity, conduct, etc. has been
taken away. The contractual rights of the parties to a contract and
the right to enforce the same have been given an upper-hand by such
amendment. Hence, from such perspective, the element of public
interest has to be extremely strong to upset the contractual rights of
the parties.
(ii) Clause 5.5 of the tender document which speaks about issuance
of letter of intent (LOI) or letter of award (LOA) not conferring right of
ownership, is circumscribed by Clause 5.6 which provides that in
case the successful bidder fails to pay the requisite amount as per
Clause 4.3, the authority may extend the time limit. If the payments
are not made within the extended time, the authority may take
necessary action for cancellation of the allotment and forfeiture of the
amount deposited by the allottee.
(iii) Even if issuance of LOI/LOA did not confer ownership right in
the property, the subsequent acts of receipt of full payment by the
Government, execution of sale agreement and preparation of draft
conveyance, have created an actionable claim and a vested interest
in favour of the writ petitioners regarding the subject property.

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(iv) In the present case, not only did promissory estoppel come into
play, the same has subsequently taken the shape of contractual
rights by the parties entering into an agreement of sale.
(v) The present case does not involve a policy decision but a
commercial transaction. There is no ingredient of any public policy to
deter the completion of the sale transaction.
(vi) Clause 3.1.11 cannot be interpreted to give an absolute right to
the authority to cancel the tender process. Such right cannot be
exercised arbitrarily.
(vii) Even in the field of private contract, the State has to Act in a
fair, transparent and reasonable manner and cannot arbitrarily
cancel contracts. The present right of the writ petitioners is not
merely based on a private contract but on an agreement which flows
from a public tender, floated in the public domain, by the State of
Mizoram.
(viii) The argument of the State of Mizoram that Rule 309 of the GFR
pertaining to transfer of land and buildings of the State was not
followed is baseless. The tender was floated by the General
Administration Department (GAD) of the Government of Mizoram. A
corrigendum /addendum dated May 31, 2023, was signed by the
Commissioner and the Secretary to the Government of Mizoram,
GAD. The Under Secretary and the Deputy Secretary to the
Government of Mizoram, both coming within the fold of GAD, have
made several communications in pursuance of the tender and the
subsequent sale agreement entered into by and between the parties.

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Hence, there is no reason why the said tender or the subsequent acts
of the Government should be vitiated by any irregularity just because
the new regime, after coming to power, raises such issue post facto.
(ix) The State or a Government is an entity in perpetuity. It is not
subjected to the vicissitudes and political or populist motivations,
which sways with every wind of popular opinion. Thus, the mere
populist measures sought to be taken by the new regime cannot be a
valid ground for cancelling the valuable rights that have accrued in
favour of the writ petitioners in terms of a tender floated by the
Government itself, in its previous pre-election Avatar of a different
political dispensation.
(x) Certain purported letters by certain social organizations, which
arrogate to themselves the interests of the entire populace of the
State of Mizoram, have been cited by the respondents. However, the
mere opinion of certain bodies of students or others sections of the
society cannot displace the action taken by an elected government,
which, in the first place, is supposed to represent and reflect the
wishes of the polity which has brought it into power.
(xi) The land, it is evident from the admitted position, is a vacant
and unused land having no immediate utility whatsoever. The
proposed future use of the land does not furnish present public
interest of so strong a level that it has to displace the valuable rights
that have accrued in favour of the petitioners.
(xii) The very grounds which are now being cited to cancel the entire
process were all along available to the State of Mizoram even at the

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time of floating of the tender and the subsequent acts done by the
parties in pursuance thereof. No change of circumstance has been
pleaded or established to indicate that public interest has out-grown
the contractual obligations of the State all on a sudden, compelling
the Government to cancel the sale process.
(xiii) The official act in floating the tender and the subsequent actions
of the Government of Mizoram, have to be presumed to be regularly
performed and the burden of proof to displace such presumption lies
on the respondents. There is no reason why the presumption under
Section 114 (e) of the Evidence Act should not be applied. There is no
rebuttal of the presumption in the present case.
(xiv) On a comprehensive appreciation of the facts of the case, there
can be no justification on the part of the respondents to cancel the
entire tender process seeking shelter under Clause 3.1.11 of the
tender document. The impugned act of cancellation of the e-tender
and the sale process is arbitrary, unreasonable and motivated by
commercial, political and populist interests rather than valid public
interest or inequity.

31. In the light of the above observations, learned Single Judge set aside
the impugned cancellation of the tender process. The respondents were
directed to execute a sale deed in terms of the agreement of sale, in favour of
the writ petitioners with regard to the subject land.
Court’s view
32. The short question that arises for determination is whether or not, in
the facts and circumstances of the case, the appellant State of Mizoram was

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justified in cancelling the entire tender process at the stage when only
formal execution of the conveyance remained to be done. Learned Single
Judge has held against the appellants. We are required to decide whether
there is any such error in the order of the learned Single Judge which would
warrant interference by the Appeal Court.
33. The facts of the case would clearly emerge from the correspondence
exchanged between the parties. We may notice some of the documents
referred to by learned Counsel for the parties: -
(i) Letter of Intent dated August 4, 2023, issued by the Government
of Mizoram, GAD, in favour of the respondent company.
(ii) The Nomination email dated August 7, 2023, sent by the
respondent company to GAD, Government of Mizoram, furnishing
particulars of the nominees in whose names the property would be
transferred.
(iii) Letter dated August 25, 2023, under cover of which, the GAD,
Government of Mizoram forwarded the ‘Sale Agreement format’ to the
respondent company. The respondent company was called upon to
sign the Sale Agreement on non-judicial stamp paper of appropriate

value.
(iv) Letter dated September 9, 2023, addressed by Joint Resident
Commissioner, Government of Mizoram to the respondents calling
upon them to make any suggestion they might have for modification
of the draft Sale Agreement.
(v) Letter dated August 10, 2023, written by the Under Secretary to
the Government of Mizoram, GAD, to the Joint Resident

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Commissioner, Mizoram House, Kolkata requesting the latter to
prepare ‘Deed of Agreement for Sale’ in respect of the subject
property.
(vi) Letter dated August 25, 2023, written by the Deputy Secretary to
the Government of Mizoram, GAD, to the Joint Resident
Commissioner, Government of Mizoram, Kolkata, authorizing the
latter ‘to execute the sale agreement and sale deed on behalf of

Secretary, General Administration Department.’
(vii) Letter dated October 4, 2023, issued by the Under Secretary to
the Government of Mizoram, GAD, addressed to the respondent
company conveying ‘No Objection’ of the Government of Mizoram for
execution of the Sale Deed between the Government of Mizoram and
the respondent company and its nominees in respect of the subject
property.
(viii) Agreement of sale dated October 6, 2023, executed by and
between the Government of Mizoram and the respondent company.
(ix) E-mail dated October 31, 2023, sent by the respondent company
to GAD, Government of Mizoram putting on records that as on that
date, a sum of Rs 18,98,82,000 had been paid by the respondent
company to the Government of Mizoram through RTGS.
(x) E-mail dated October 30, 2023, sent by the respondent company
to GAD, Government of Mizoram, suggesting certain changes in the
draft Sale Deed/Conveyance and Mail dated October 31, 2023, sent
by GAD, Government of Mizoram to the respondent company

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accepting such modifications and asking the respondent company to
proceed.
(xi) Draft Sale Deed. In particular clauses 5.1.7 to 5.1.12 of the Draft
Sale Deed were highlighted. The said clauses read as follows:
“ 5.1.7 Application for Demolition of Existing Structure :
Thereafter, the Vendor, with the intention of constructing a new
B+G+3 building on the Said Property after demolishing the
existing dilapidated structure present thereat, applied before the
Kolkata Municipal Corporation for approval of the said
demolition of the existing structure present on the Said Property
vide an application dated 25th June, 2018.
5.1.8 Approval for Demolition of Existing Structure :
Thereafter, the Executive Engineer of the Kolkata Municipal
Corporation, by its letter dated 16th July, 2018, approved the
demolition of the existing structure on the Said Property as per
Rule 20 of Building Rule 2009.
5.1.9 Sanction of Plan : Simultaneously, the Vendor, by an
application dated 13th April, 2022, applied for sanction of plan
and building permit for construction of the said new B+G+3
building on the said property and obtained the sanction of the
same and building permit on 26th August, 2022. (“ Sanctioned
Plans ”).
5.1.10 Existence of Old Dilapidated Structure : Thereafter, the
Vendor initiated the demolition of the existing structure, but it
was suspended due to some unavoidable circumstances and a

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substantial area of old dilapidated structure is still in existence
on or over the said property.
5.1.11 Presence of Foundation at Said Property : The Vendor,
thereafter, caused to be demolished the existing structure on
the said property partially, however the foundation of the said
old building, together with some other construction including
old outhouses, servants’ quarter, darwans’ room are still in

existence at present.
5.1.12 Inviting Tender to Sell : The Vendor now not being
interested in constructing the said new building on the Said
Property and also with an intention to sell the Said Property for
financial gain together with the benefit of the Sanctioned Plans
invited tender under the e-tender-cum-e-auction notice vide no.-
A.60011/200/2011-GAD (Vol.II) (Tender ID: 2023-SGAD-374-1)
dated 10th July, 2023 (“said e-Auction”). ”
(xii) Letter of Award dated December 1, 2023, issued by Deputy
Secretary, GAD, Government of Mizoram, in favour of the respondent
company. In the last paragraph of the letter, the respondent
company was requested to submit its acceptance of the Letter of
Award in writing within 15 days of receiving it and execute formal
Sale Deed in accordance with the Land Laws of West Bengal.
(xiii) E-mail dated December 7, 2023, sent by the respondent
company to GAD, Government of Mizoram accepting the Letter of
Award and also putting on record that the respondent company had
paid the balance 50% of the accepted bid amount amounting to Rs.

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19,18,00,000 towards the second installment along with penal
interest of 1% per month for the extended time limit of 57 days
amounting to Rs. 35,86,660.
(xiv) E-mail dated December 8, 2023, sent by GAD, Government of
Mizoram to the respondent company stating: ‘you will hear from us
soon on the execution of Sale Deed and matters regarding TDS.’; and
Email dated December 12, 2023, sent by the respondent company to
GAD, Government of Mizoram stating: ‘We are still waiting response
from your end. We request you to expedite the matter.’
(xv) E-mail dated December 14, 2023, sent by the respondent
company to GAD, Government of Mizoram putting on record that the
entire consideration sum of Rs. 38,29,91,994 (after deducting TDS of
Rs. 41,94,666) had been paid through RTGS and requesting to fix an
early date for execution of the Sale Deed.
(xvi) Letter dated December 21, 2023, written by the Deputy
Secretary to the Government of Mizoram, GAD, the respondent
company, the material portion whereof reads as follows: -
th
“ As you are aware, the election to the 9 Legislative Assembly of
Mizoram was recently concluded. As the State Government
machinery had to concentrate on the election process, many
other important issues had to be put on the backburner till the
election process was over. Further, the newly formed
Government have to be apprised of all ongoing projects and
undertakings of the Government before taking further action.

22

Besides, the festive season of Christmas and New Year has
already started in full swing, and this also will slow down the
normal functioning of the Government Offices.
Therefore, the process of sale of the said property will also be
slightly affected by the said circumstances. We hope to be able
to carry forward the process only in the month of January,
2024. You are requested to kindly bear with us in the

meantime. ”
(xvii) The E-mail dated January 2, 2024, sent by the respondent
company to GAD Mizoram stating that delay at the end of GAD in
executing and registering the sale deed was causing financial loss to
the respondent. Request was made to fix a date for execution and
registration of the sale deed as soon as possible. In response, by an
E-mail dated January 3, 2024, GAD acknowledged receipt of the
aforesaid E-mail and stated: - “you will hear from us soon.”
(xviii) Notification dated January 4, 2024, issued by the
Commissioner & Secretary to the Government of Mizoram, GAD, sent
to the respondent company under cover of an E-mail dated January
5, 2024, cancelling the entire tender process. The notification reads
as follows: -
“ The General Administration Department, Government of
Mizoram has invited bids for Sale of land at 24, Ashutosh
Chowdhury Avenue, Kolkata 700019 through e-tender-cum-e-

23

auction vide No. A. 60011/200/2011 - GAD (Vol.II) dt.
26.05.2023.
And even though Ms Excel Vincom Pvt. Ltd., Kolkata has been
declared the Successful Bidder after the e-tender-cum-e-auction
process, and has subsequently deposited 100% of the Bid
Amount along with penal interests for delayed payment; the
General Administration Department, Government of Mizoram
has reconsidered the issue after due consideration of all relevant
factors, and has come to the conclusion that disposal of the said
Government land at this juncture is against the general interest
of the public.
Therefore, the General Administration Department, Government
of Mizoram (referred to as the Authority in the Bid Documents),
in exercise of its inherent power provided under clause 3.1.11
read with clause 5.5 and/clause 6.2 of the Bid Documents,
hereby cancels the bid process in the larger interest of the
general public. The entire amount already paid by the bidder,
including the Earnest Money Deposit, shall be refunded and the
Authority shall not be liable to pay any compensation or interest
for any loss that the bidder may incur due to the cancellation of
the bid process. ”
(xix) Letter dated January 11, 2024, written by the respondent
company to GAD, Mizoram protesting against the cancellation of the

24

tender process and requesting for immediate withdrawal of the
notification dated January 4, 2024.
34. Learned Counsel for the appellants raised a preliminary point of
maintainability of the writ petition. He referred to Clause 14 of the
agreement for sale dated October 6, 2023, which is a dispute resolution
clause. That clause provides that any dispute that may arise between the
parties in relation to the said agreement would, in the first instance, be
attempted to be resolved amicably in accordance with the conciliation
procedure set forth in the said clause. If conciliation fails, the dispute shall
be decided by reference to arbitration of a sole arbitrator to be appointed in
accordance with the provisions of the Arbitration and Conciliation Act, 1996,
and the amendments thereof, which will also govern the proceedings in the
arbitration. The Supreme Court decisions in Phoenix ARC (P) Ltd. v.
Vishwa Bharati Vidya Mandir, Supra, United Bank of India v.
Satyawati Tandon and Ors., Supra and South Indian Bank Ltd. & Ors.
v. Naveen Mathew Philip & Anr., Supra were relied upon for the
proposition that where an alternative remedy is available, the Writ Court
should generally not entertain an application under Article 226 of the
Constitution of India. This proposition of law is very well established.
However, it is also well established that availability of an alternative remedy
is not a complete bar to the High Court entertaining an application for
judicial review. One may refer to the well-known decision in the case of
Whirlpool Corporation. v. Registrar of Trade Marks, reported at (1998)
8 SCC 1 .

25

Further, it may be noted that in the three decisions cited by the
learned Advocate General, statutory alternative remedies were available.
Remedies were prescribed in the concerned statutes. Such is not the case
here. Although there is an arbitration clause in the agreement for sale, the
same did not and could not denude the High Court of its high prerogative
writ jurisdiction. The suggestion of learned Advocate General that the
alternative remedy of civil suit for specific performance of the agreement for
sale is available to the writ petitioners and, therefore, learned Single Judge
should not have entertained the writ petition, also does not impress us. It is
well known that a civil suit is a long drawn legal process which may take
years together to reach its logical conclusion. A suit can hardly be described
as an alternative efficacious remedy. A suit can be filed to enforce any legal
right. In our opinion, in all cases, and particularly where no factual dispute
is involved, remedy by way of suit cannot be considered to be an efficacious
alternative remedy vis-à-vis a writ petition where the same is otherwise
maintainable in law.
35. On the other hand, on the point of alternative remedy, learned
Counsel for the respondents relied on the following decisions:-
(i) ABL International Ltd. v. Export Credit Guarantee
Corporation. of India Ltd., (Supra). In this case at paragraphs 52
and 53 of the judgment, the Hon’ble Supreme Court observed as
follows: -
“ 52. On the basis of the above conclusion of ours, the question
still remains why should we grant the reliefs sought for by the

26

appellants in a writ petition when a suitable efficacious
alternate remedy is available by way of a suit. The answer to
this question, in our opinion, lies squarely in the decision of this
Court in the case of Shrilekha Vidyarthi [(1991) 1 SCC 212 :
1991 SCC (L&S) 742] wherein this Court held: (SCC pp. 235-37,
paras 20-22 & 24)
The requirement of Article 14 should extend even in the
sphere of contractual matters for regulating the conduct of the
State activity. Applicability of Article 14 to all executive actions
of the State being settled and for the same reason its
applicability at the threshold to the making of a contract in
exercise of the executive power being beyond dispute, the State
cannot thereafter cast off its personality and exercise unbridled
power unfettered by the requirements of Article 14 in the sphere
of contractual matters and claim to be governed therein only by
private law principles applicable to private individuals whose
rights flow only from the terms of the contract without anything
more. The personality of the State, requiring regulation of its
conduct in all spheres by requirements of Article 14, does not
undergo such a radical change after the making of a contract
merely because some contractual rights accrue to the other
party in addition. It is not as if the requirements of Article 14
and contractual obligations are alien concepts, which cannot
coexist. The Constitution does not envisage or permit unfairness
or unreasonableness in State actions in any sphere of its activity

27

contrary to the professed ideals in the preamble. Therefore, total
exclusion of Article 14 — non-arbitrariness which is basic to
rule of law — from State actions in the contractual field is not
justified. This is more so when the modern trend is also to
examine the unreasonableness of a term in such contracts
where the bargaining power is unequal so that these are not
negotiated contracts but standard form contracts between

unequals.
Unlike the private parties the State while exercising its
powers and discharging its functions, acts indubitably, as is
expected of it, for public good and in public interest. The impact
of every State action is also on public interest. It is really the
nature of its personality as State which is significant and must
characterize all its actions, in whatever field, and not the nature
of function, contractual or otherwise, which is decisive of the
nature of scrutiny permitted for examining the validity of its act.
The requirement of Article 14 being the duty to act fairly, justly
and reasonably, there is nothing which militates against the
concept of requiring the State always to so act, even in
contractual matters. This factor alone is sufficient to import at
least the minimal requirements of public law obligations and
impress with this character the contracts made by the State or
its instrumentality. It is a different matter that the scope of
judicial review in respect of disputes falling within the domain of
contractual obligations may be more limited and in doubtful

28

cases the parties may be relegated to adjudication of their rights
by resort to remedies provided for adjudication of purely
contractual disputes. However, to the extent, challenge is made
on the ground of violation of Article 14 by alleging that the
impugned act is arbitrary, unfair or unreasonable, the fact that
the dispute also falls within the domain of contractual
obligations would not relieve the State of its obligation to comply
with the basic requirements of Article 14. To this extent, the
obligation is of a public character invariably in every case
irrespective of there being any other right or obligation in
addition thereto. An additional contractual obligation cannot
divest the claimant of the guarantee under Article 14 of non-
arbitrariness at the hands of the State in any of its actions.
53. From the above, it is clear that when an instrumentality of
the State acts contrary to public good and public interest,
unfairly, unjustly and unreasonably, in its contractual,
constitutional or statutory obligations, it really acts contrary to
the constitutional guarantee found in Article 14 of the
Constitution. Thus if we apply the above principle of
applicability of Article 14 to the facts of this case, then we notice
that the first respondent being an instrumentality of the State
and a monopoly body had to be approached by the appellants by
compulsion to cover its export risk. The policy of insurance
covering the risk of the appellants was issued by the first
respondent after seeking all required information and after

29

receiving huge sums of money as premium exceeding Rs 16
lakhs. In fact we have found that the terms of the policy do not
give room to any ambiguity as to the risk covered by the first
respondent. We are also of the considered opinion that the
liability of the first respondent under the policy arose when the
default of the exporter occurred and thereafter when the
Kazakhstan Government failed to fulfil its guarantee. There is no
allegation that the contracts in question were obtained either by
fraud or by misrepresentation. In such factual situation, we are
of the opinion, the facts of this case do not and should not
inhibit the High Court or this Court from granting the relief
sought for by the petitioner. ”
(ii) In Maharashtra Chess Association. v. Union of India, Supra,
it was held that existence of an alternative remedy, whether adequate
or not, does not alter the fundamentally discretionary nature of the
High Court’s writ jurisdiction and therefore, does not create an
absolute legal bar on the exercise of the writ jurisdiction by a High
Court. The decision whether or not to entertain an action in its writ
jurisdiction remains a decision to be taken by the High Court on an
examination of the facts and circumstances of a particular case.
(iii) In Unitech Ltd. v. Telangana State Industrial Infrastructure
Corporation., Supra, the Hon’ble Supreme Court held that while
exercising its jurisdiction under Article 226, the Court is entitled to
enquire into whether the action of the State or its instrumentalities is
arbitrary or unfair and in consequence, in violation of Article 14. The

30

jurisdiction under Article 226 is a valuable constitutional safeguard
against an arbitrary exercise of State power or a misuse of authority.
It is well settled that the jurisdiction under Article 226 cannot be
ousted only on the basis that the dispute pertains to the contractual
arena. This is for the simple reason that the State and its
instrumentalities are not exempt from the duty to act fairly merely
because in their business dealings they have entered into realm of
contract. Similarly, the presence of an arbitration clause does not
oust the jurisdiction under Article 226 in all cases; it needs to be
decided on a case to case basis as to whether recourse to a public
law remedy can justifiably be invoked.
(iv) In Godrej Sara Lee Ltd. v. Excise & Taxation Officer-cum-
Assessing Authority & Ors., Supra, the Hon’ble Supreme Court
observed as follows in paragraph 4 of the judgment: -
“ 4. Before answering the questions, we feel the urge to say a few
words on the exercise of writ powers conferred by article 226 of
the Constitution having come across certain orders passed by
the High Courts holding writ petitions as “not maintainable”
merely because the alternative remedy provided by the relevant
statutes has not been pursued by the parties desirous of
invocation of the writ jurisdiction. The power to issue
prerogative writs under article 226 is plenary in nature. Any
limitation on the exercise of such power must be traceable in
the Constitution itself. Profitable reference in this regard may be
made to Article 329 and ordainments of other similarly worded

31

articles in the Constitution. Article 226 does not, in terms,
impose any limitation or restraint on the exercise of power to
issue writs. While it is true that exercise of writ powers despite
availability of a remedy under the very statute which has been
invoked and has given rise to the action impugned in the writ
petition ought not to be made in a routine manner, yet, the mere
fact that the petitioner before the High Court, in a given case,
has not pursued the alternative remedy available to him/it
cannot mechanically be construed as a ground for its dismissal.
It is axiomatic that the High Courts (bearing in mind the facts of
each particular case) have a discretion whether to entertain a
writ petition or not. One of the self-imposed restrictions on the
exercise of power under article 226 that has evolved through
judicial precedents is that the High Courts should normally not
entertain a writ petition, where an effective and efficacious
alternative remedy is available. At the same time, it must be
remembered that mere availability of an alternative remedy of
appeal or revision, which the party invoking the jurisdiction of
the High Court under article 226 has not pursued, would not
oust the jurisdiction of the High Court and render a writ petition
“not maintainable”. In a long line of decisions, this court has
made it clear that availability of an alternative remedy does not
operate as an absolute bar to the “maintainability” of a writ
petition and that the rule, which requires a party to pursue the
alternative remedy provided by a statute, is a rule of policy,

32

convenience and discretion rather than a rule of law. Though
elementary, it needs to be restated that “entertainability” and
“maintainability” of a writ petition are distinct concepts. The fine
but real distinction between the two ought not to be lost sight of.
The objection as to “maintainability” goes to the root of the
matter and if such objection were found to be of substance, the
courts would be rendered incapable of even receiving the lis for
adjudication. On the other hand, the question of
“entertainability” is entirely within the realm of discretion of the
High Courts, writ remedy being discretionary. A writ petition
despite being maintainable may not be entertained by a High
Court for very many reasons or relief could even be refused to
the petitioner, despite setting up a sound legal point, if grant of
the claimed relief would not further public interest. Hence,
dismissal of a writ petition by a High Court on the ground that
the petitioner has not availed the alternative remedy without,
however, examining whether an exceptional case has been made
out for such entertainment would not be proper. ”

36. We, therefore, see that existence of an alternative remedy does not
affect the High Court’s jurisdiction to issue an appropriate writ under Article
226 of the Constitution of India. It is the discretion of the Court whether or
not to exercise such jurisdiction in a given fact scenario. Of course, the
discretion has to be exercised judiciously. In the present case, the learned
Single Judge has found the impugned act of the appellant to be arbitrary
and illegal. The learned Judge has quashed such act i.e., the impugned

33

letter of cancellation of tender and has issued a mandamus directing the
appellant to complete the sale of the subject property in favour of the
respondent no. 1. We do not find anything wrong with such exercise of
discretion by the learned Judge.
37. The next point urged by the learned Advocate General for the State of
Mizoram is that the writ petitioners should have filed a suit for specific
performance instead of an application under Article 226 of the Constitution
of India. In effect, on a writ petition, the High Court has passed a decree for
specific performance. This is impermissible in support of this submission,
learned Counsel relied on the decision in Municipal Council Gondia v.
Divi Works and Supplies, HUF and Ors., Supra. Reliance was placed on
paragraph 8 of the decision which reads as follows:-
“ At the outset, it is required to be noted that by the impugned
judgment and order the High Court has issued a writ of
mandamus virtually granting the relief of specific performance of
the contract/work order. From the impugned judgment and order
passed by the High Court it appears that the High Court was made
to believe that the original writ petitioners had already
manufactured the goods which are customized and as per the
specifications and the work order. However, it is now found that
there are no manufactured goods readily available which can be
supplied to the appellant - Council. There are disputed questions
of fact such as whether in fact the goods were manufactured as
per the specifications or not. Nothing was on record before the
High Court that goods were in fact and actually manufactured by

34

the original writ petitioner No. 1, as per the specifications and the
requirements of the Council and as per the work order. In absence
of any evidence and material on record and there being disputed
questions of facts the High Court ought not to have passed the
impugned judgment and order directing the Council to continue
the work order and accept the goods from the original writ
petitioner No. 1 and to make the payments as per the work order.
Even otherwise, no writ of mandamus could have been issued
virtually granting the writ for specific performance of the
contract/work order in a writ petition under Article 226 of the
Constitution of India. The original writ petitioners ought to have
been relegated to file a civil suit for appropriate relief of
losses/damages, if any, sustained. ”
38. In our opinion, the aforesaid decision does not advance the appellant’s
case to any extent. In that case there were disputed questions of fact. There
was no material on record in support of the case of the writ petitioner. The
decision does not lay down any proposition of law that even in a fit case, the
Writ Court cannot issue a mandamus directing an authority within the
meaning of Article 12 of the Constitution, to honour its solemn undertaking.
In this connection one may note the observations of the Hon’ble Supreme
Court at paragraphs 9 to 11 of the judgment in Gujarat State Financial
Corporation. v. Lotus Hotels (P) Ltd., Supra, which read as follows:-
“ 9. It was next contended that the dispute between the parties is
in the realm of contract and even if there was a concluded contract
between the parties about grant and acceptance of loan, the failure

35

of the Corporation to carry out its part of the obligation may
amount to breach of contract for which a remedy lies elsewhere
but a writ of mandamus cannot be issued compelling the
Corporation to specifically perform the contract. It is too late in the
day to contend that the instrumentality of the State which would
be “other authority” under Article 12 of the Constitution can
commit breach of a solemn undertaking on which other side has
acted and then contend that the party suffering by the breach of
contract may sue for damages but cannot compel specific
performance of the contract. It was not disputed and in fairness to
Mr Bhatt, it must be said that he did not dispute that the
Corporation which is set up under Section 3 of the State Financial
Corporation Act, 1955 is an instrumentality of the State and would
be “other authority” under Article 12 of the Constitution. By its
letter of offer dated July 24, 1978 and the subsequent agreement
dated February 1, 1979 the appellant entered into a solemn
agreement in performance of its statutory duty to advance the loan
of Rs 30 lakhs to the respondent. Acting on the solemn
undertaking, the respondent proceeded to undertake and execute
the project of setting up a 4-star hotel at Baroda. The agreement to
advance the loan was entered into in performance of the statutory
duty cast on the Corporation by the statute under which it was
created and set up. On its solemn promise evidenced by the
aforementioned two documents, the respondent incurred
expenses, suffered liabilities to set up a hotel. Presumably, if the

36

loan was not forthcoming, the respondent may not have
undertaken such a huge project. Acting on the promise of the
appellant evidenced by documents, the respondent proceeded to
suffer further liabilities to implement and execute the project. In
the back drop of this incontrovertible fact situation, the principle
of promissory estoppel would come into play. In Motilal Padampat
Sugar Mills Co. (P) Ltd. v. State of U.P. [(1979) 2 SCC 409 : 1979
SCC (Tax) 144 : AIR 1979 SC 621 : (1979) 2 SCR 641, 662] this
Court observed as under : [SCC para 8, p. 425 : SCC (Tax) p. 160]
“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.”
10. Thus the principle of promissory estoppel would certainly
estop the Corporation from backing out of its obligation arising
from a solemn promise made by it to the respondent.

37

11. Jit Ram Shiv Kumar v. State of Haryana [(1981) 1 SCC 11 :
AIR 1980 SC 1285 : (1980) 3 SCR 689] which slightly differs from
the view taken by this court in the aforementioned decision at any
rate would not help the appellant because it only lays down that
the principle of promissory estoppel cannot be invoked for
preventing the Government from discharging its functions under
the law. Even then, it was held that when the officer authorised
under a scheme enters into an agreement and makes a
representation and a person acting on that representation puts
himself in a disadvantageous position, the court is entitled to
regulate the officer to act according to the scheme and the
agreement or the representation. The officer cannot arbitrarily on
his mere whim ignore his promise on some undefined and
undisclosed grounds of necessity or change the conditions to the
prejudice of a person which had acted upon such representation
and put himself in a disadvantageous position. On this point, both
the decisions concur and the ratio would govern the decision in
this appeal. The respondent acting upon the solemn promise made
by the appellant incurred huge expenditure and if the appellant is
not held to its promise, the respondent would be put in a very
disadvantageous position and therefore also the principle of
promissory estoppel can be invoked in this case. ”
39. One may also note the decision of the Hon’ble Supreme Court in ABL
International Ltd. v. Export Credit Guarantee Corporation. of India
Ltd., Supra . It was held that firstly, in an appropriate case, a writ petition

38

as against a State or an instrumentality of a State, arising out of a
contractual obligation is maintainable. Secondly, merely because some
disputed questions of fact arise for consideration, the same cannot be a
ground to refuse to entertain a writ petition in all cases as a matter of rule.
Thirdly, a writ petition involving a consequential relief of monetary claim is
also maintainable.
40. In Godavari Sugar Mills Ltd. v. State of Maharashtra,
Supra, one of the questions that fell for determination by the Hon’ble
Supreme Court was whether the writ petition filed before the High Court
was for ‘recovery of money’ and therefore, not maintainable? The Hon’ble
Supreme Court held that the writ petition did not relate to a simple money
claim. It required adjudication in regard to the allegations of arbitrariness
on the part of the State Government and its officers in the exercise of their
statutory functions. Primarily, therefore, the writ petition was of a public law
character and, therefore, maintainable. It was further held that if a right has
been infringed - whether a fundamental right or a statutory right – and the
aggrieved party comes to Court for enforcement of the right, it will not be
giving complete relief if the Court merely declares the existence of such right
or the fact that an existing right has been infringed. The High Court, while
enforcing fundamental or statutory rights, has the power to give
consequential relief by ordering payment of money realised by the
Government without the authority of law.
41. Once the State or an instrumentality of the State is a party to a
contract, it has an obligation in law to act fairly, justly and reasonably,
which is the requirement of Article 14 of the Constitution of India. If the

39

State or its instrumentality acts in contravention of the aforesaid
requirements of Article 14, a Writ Court can issue suitable directions to set
right the impugned arbitrary action. When the State acts contrary to public
good and public interest, unfairly, unjustly or unreasonably, in its
contractual , constitutional or statutory obligations, it really acts contrary to
the constitutional guarantee found in Article 14 of the Constitution of India.
42. In ABL International Ltd. v. Export Credit Guarantee
Corporation. of India Ltd., Supra , the Hon’ble Supreme Court, after
referring to several of its earlier decisions, held that once the State or an
instrumentality of the State is a party to a contract, it has an obligation in
law to act fairly, justly and reasonably which is the requirement of Article 14
of the Constitution of India. If the State or its instrumentality acts in
contravention of the aforesaid requirements of Article 14, a Writ Court can
issue suitable directions to set right the impugned arbitrary action. When
the State acts contrary to public good and public interest, unfairly, unjustly
and unreasonably, in its contractual, constitutional or statutory obligations,
it really acts contrary to the constitutional guarantee found in Article 14 of
the Constitution.

43. In the present case the learned Single Judge has rightly held that the
cancellation of the tender process is arbitrary. As a consequential relief the
learned Judge directed the appellant State to honour its obligation under
the agreement of sale entering into by and between the parties. We see no
infirmity in such order of the learned Judge.
44. It was urged on behalf of the appellants that Rule 309 of GFR, 2017
was not followed by the Government while taking a decision to sell the

40

subject property. Hence, the decision was bad and the entire process should
be nullified.
We are unable to accept such contention. Whether or not the
Government followed its financial rules, is an internal matter for the
Government of Mizoram. A third party dealing with the Government is
entitled to proceed on the basis that official acts of the Government have
been regularly performed. The Court is also entitled to presume that official
acts of the Government have been regularly performed, as is provided in
Section 114, illustration (e) of the Evidence Act, 1872.
45. It does appear to us that this is a case of ‘regime revenge’. The
Government cannot renege on a promise made and acted upon by a citizen
to his detriment, only because there is a change in regime. In this
connection one may refer to the decision of the Hon’ble Supreme Court in
the case of Vice Chairman & Managing Director, City and Industrial
Development Corporation of Maharashtra Ltd. & Anr. v. Shishir Realty
Private Limited & Ors., Supra, and in particular paragraphs 61 and 62 of
the judgment, which read as follows:-
“ 61. In the present case, it was argued by the respondents that
with the change in the executive head in Cidco, enquiry was
initiated against the allotment made in favour of the respondent
M/s Metropolis Hotel during the tenure of the earlier executive
head. Even the inquiry, that was conducted against the
respondent lessees stood vitiated as no proper notice or hearing
was given to them before passing the impugned order.
Additionally, from the above analysis it is clear that the change of

41

usage and the subsequent division was well within the statutory
limitations. Therefore, the earlier undertakings taken by the
appellate authorities cannot be set aside with the change of person
in power, without any rhyme or reason. After all one cannot
change the rules of the game once it has started.
62. From the contradictory submissions asserted before this Court
and the concessions given regarding practice of Cidco to allow
change in land use in other cases, clearly points to a “regime
revenge”. Such conclusion reached herein is further buttressed by
the fact that no inquiry or disciplinary proceedings were initiated
against the earlier Vice-Chairman, whose orders have been
annulled. Such phenomenon is clearly detrimental to the
constitutional values and the rule of law. ”
46. It was also argued that a mere agreement of sale does not create any
proprietary interest in favour of the proposed purchaser. In the present case
the writ petitioners have not acquired any title in respect of the subject
property. Only upon execution of the conveyance the title to the property
would pass to the writ petitioners. Therefore, at any point of time prior to
execution of the conveyance/sale deed and registration thereof, the
appellant was and is entitled to cancel the entire sale process.
We are unable to agree with such contention. It is of course true that
until a registered deed of conveyance is executed in favour of the purchaser,
title to the property which is the subject matter of sale, does not pass from
the vender to the purchaser. However, that does not mean that the vender
can go back on his promise to sell a property, recorded in a duly executed

42

Agreement of Sale, at his own sweet will. That will be a breach of contract on
the part of the vendor entitling the intending purchaser to seek specific
performance of the contract of sale before a Court of law. Otherwise,
contractual/commercial deals will become completely uncertain.
47. It was argued that the appellant State has reserved its right to cancel
the tender process at any point of time prior to the property in question
being conveyed to the successful tenderer by execution of a registered sale
deed. In our opinion, this is putting the appellants’ case too high. It is true
that the relevant clauses in the tender documents reserve the right to the
appellant State to cancel the entire tender process prior to execution of
conveyance; however, such right cannot be exercised arbitrarily or unfairly
or unreasonably, vis-a-vis a citizen. Just as Article 14 of the Constitution of
India enjoins on the Government the duty to act fairly, reasonably and not
arbitrarily vis-a-vis a citizen, in the discharge of the Governmental
duties, even in commercial matters the Government has a duty to act fairly,
reasonably and not arbitrarily. In the present case, we find no valid or
acceptable ground for the Government to cancel the tender process. From
the correspondence exchanged between the concerned Government
department and the writ petitioners, we find that great pains were taken by
the parties to finalise the deal. The entire consideration amount along with
the penalty money was deposited by the writ petitioners which was accepted
and appropriated without any demur, protest or reservation. After detailed
deliberations, the clauses of the agreement for sale were finalised. All
formalities were complied with. Only the conveyance remained to be
executed. We can see from the correspondence exchanged that execution of

43

the sale deed was deferred only in view of the upcoming State elections.
Once the elections resulted in change of the ruling party, the government
performed a complete volta face and cancelled the tender. The purported
reason cited was greater public interest.
48. In our considered opinion, the appellants have not been able to
demonstrate any such public interest or interest of the residents of Mizoram
as would justify the Government of Mizoram acting in breach of its solemn
contractual obligations. There is no doubt that private interest must give
way to public interest. However, such public interest must be overwhelming
and demonstrable.
49. Two letters constitute the fulcrum of the appellant’s case of extreme
public interest warranting cancellation of the entire tender process. The two
letters dated December 22, 2023 and December 27, 2023, are reproduced
herein:-
“ Date: December 22, 2023
To,
The Hon'ble Chief Minister

Government of Mizoram
Office & Bungalow
PPQ8+F3F,
MacDonald Hill,
Zarkawt, Aizawl,
Mizoram 796001

Subject-Prayer for retrieval of Ballygunge Mizoram House
Respected sir,
Greetings on behalf of the Kolkata Mizo Students.
Ballygunge Mizoram House, Kolkata has served as a refuge for the Mizo
students, families, and professionals residing in Kolkata. The premises

44

deeply hold significant sentimental values and emotions for the closed-
knit Mizo Community.
Sadly, it has been learnt that the process of selling off of the entire
premises is in its final stage. However we the Kolkata Mizo Students
believe that selling off of the plot in Ballygunge is against larger public
interest. Moreover, it has a historical and heritage significance within
the periphery of Central Kolkata and it also stands as a foundation of

cultural representation.
We hope you will intervene, settle the issue, and act accordingly so that
these merits of ours remain intact.
Yours sincerely,
(JOSHUA THANGLALROPUIA)
General Secretary,
Kolkata Mizo Students 2023-24
AND
“ Dated, Kolkata the 27 December, 2023
To,

The Hon'ble Chief Minister
Government of Mizoram.

Subject: Prayer to cancel selling of land belonging to Govt of Mizoram at
Ballygunge, Kolkata.
Sir,
Greetings on behalf of Calcutta Mizo Welfare Association. As you
are aware, the process of selling of Land belonging to Government of
Mizoram at Ballygunge, Kolkata is going on and upon inquiring, we
have learned that the process has not reached its final stage. As such,

45

we would like to kindly draw your attention regarding our prayer to
cancel the entire process on behalf of the Mizo community here in
Kolkata.
It may be noted that from the outset of the intent to sell the
land, it greatly saddened the hearts of the Mizo community not only
here in Kolkata but Mizo's as a whole. The connection between the
people and this land goes a long way as it has served as a refuge for
comfort for generation of Mizos travelling across the country, many
things can be said at length regarding the sentimental attachment
this land holds in the hearts of the people. Hence, effort have been
made to persuade the Government not to sell the land in various ways
but to no avail.
With the formation of a new Government, your Government, our
hopes have been greatly renewed. The welfare executive committee,
after closely studying the situation at hand, believes that there is still
a ground for cancellation of the process of selling of Ballygunge land,
as it has not reached its final stage. As your Government strive to
stand for the people, we the people, the Calcutta Mizo Welfare
Association request you to cancel the entire process of selling the land
at all cost. We hope and pray that this request will materialise in your
hand.

Thanking you

(RICHARD LALREMPUIA RALTE COLNEY)
SECRETARY

46

CALCUTTA MIZO WELFARE ASSOCIATION”

50. In our opinion, the said two representations do not demonstrate any
such overwhelming public interest as would be a justification for cancelling
the entire tender process which was on the verge of being carried to its
logical conclusion. We agree with the learned Single Judge that cancellation
of the tender process was an arbitrary act on the part of the appellant.
Execution of the agreement for sale and payment of the entire consideration
money by the writ petitioners, created in their favour, at least in equity, a
right of having the property in question conveyed to them. The appellant
came under a corresponding obligation. The only way the appellant could
wriggle out of such contractual obligation was by establishing overwhelming
public interest. It has failed to do so. Hence, the learned Judge was perfectly
justified in directing the appellant to execute the sale deed in respect of the
subject property in favour of the writ petitioners.
51. It was argued by the learned Advocate General representing the
appellants that the principle of estoppel does not apply to governmental acts
or representations.
52. The law appears to be quite different. In the case of Gujarat State
Financial Corporation. v. Lotus Hotels (P) Ltd., Supra, it was held that
the principle of promissory estoppel would estop an Article 12 authority
from backing out of its obligation arising from a solemn promise made by it
to a citizen. In Vice Chairman & Managing Director, City and Industrial
Development Corporation of Maharashtra Ltd. & Anr. v. Shishir Realty
Private Limited & Ors., Supra , it was held that the principle of promissory
estoppel generally applied to the Government. In that case it was held that it

47

would not be enough for the Government to merely state that public interest
requires that the Government should not be compelled to carry out the
promise. It is imperative that the Government when seeking exoneration
from liability of enforcing contract, must satisfy the Court as to how public
interest overrides the necessity of enforcing the contract. When the
Government seeks to relieve itself from the application of the principle of
promissory estoppel, the Government or a public authority is bound to place
before the Court the material, the circumstances or grounds on which it
seeks to resile from the promise made or obligation undertaken by
insistence of enforcing the promise, to demonstrate how the public interest
would be jeopardized as against the private interest.
53. We may further note that it is not the case of the appellants that the
deal for selling the subject property to the writ petitioners was finalised at
an under value, i.e., at a consideration lower than the current market rate
or that the State exchequer would suffer in any manner if the Government is
directed to honour its obligation under the agreement of sale. Hence, no
prejudice would be caused to the appellant if it is directed to stick to the
bargain that it has struck with the writ petitioners.

54. Before concluding, let us advert to some of the decisions cited on
behalf of the appellants. Learned Advocate General for the State of Mizoram
relied on the observations of Hon’ble Supreme Court at paragraph 108 of the
reported judgment in MRF Ltd. v. Manohar Parrikar, Supra, which read
as follows:-
“ 108. The appellants contended before this Court that another
Division Bench of the High Court in its earlier judgment of 21-1-

48

1999 had held that the Notification dated 1-8-1996 was
clarificatory and that it did not create any extra financial liability
on the State Government requiring approval of the Cabinet in
compliance with the Business Rules before it was brought into
force. In our opinion the said notification cannot be treated as
mere clarificatory. It is a notification issued purportedly in terms of
a government decision. It was a decision finalised at the level of
the Minister of Power alone and was taken in violation of the Rules
of Business framed under Article 166(3) of the Constitution of
India. The decision cannot be called a government decision as
understood under Article 154 of the Constitution, though it may
satisfy the requirements of authentication. Nevertheless, mere
authentication as required under Article 166(2) of the Constitution
did not make it a government decision in law nor would it validate
a decision which is void ab initio. The validity of the notification
will have to be tested with reference to the constitutional
provisions and the Business Rules and not by their form or
substance. Therefore, this contention of the appellants is liable to
be rejected. ”
This decision does not advance the appellants’ case to any extent. It
has not been demonstrated by the appellants as to how the decision of the
Government to sell the subject property was taken in breach of any
Business Rule of the Government. As discussed above, it was a conscious
and well considered decision of the Government. In any event, any alleged
irregularity in the internal affairs of the Government should not adversely

49

affect or defeat the accrued rights of a citizen under a binding contract
entered into by him/it with the Government.
55. Dressar Rand S.A. v. Bindal Agro Chem Ltd., Supra was relied
upon by learned Advocate General. In that case the Hon’ble Supreme Court
held that a letter of intent merely indicates a party’s intention to enter into a
contract with the other party in future. It is not intended to bind either party
ultimately to enter into any contract. In the present case there is a binding
contract. In Nikhil Adhesives Limited v. Kandla Port Trust, Supra , again
what was in issue was a letter of intent. Referring to its earlier decision in
Dressar Rand S.A. v. Bindal Agro Chem Ltd., Supra , the Hon’ble
Supreme Court held that the question whether a letter of intent is merely an
expression of an intention to place an order in future or whether there is a
final acceptance of the offer thereby leading to a contract, is a matter that
has to be decided with reference to the terms of the letter. In Dharma
Naika v. Rama Naika, Supra, what fell for consideration of the Hon’ble
Supreme Court were various provisions of The Karnataka Scheduled
Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands)
Act, 1978 . The Hon’ble Supreme Court held on an interpretation of that
statute that in order to protect the Scheduled Castes and Scheduled Tribes
community, ‘transfer’ has been defined in that Act to include an agreement
for sale under the Act so that even if an agreement for sale is executed by a
Scheduled Caste and Scheduled Tribe and possession is delivered to the
vendee, it would be open to the authority under Section 5 of that Act to take
steps for resumption of the land from the vendee. I do not see the relevance
of this decision in the present factual context of this case.

50

56. Learned Advocate General relied on the decision in Haryana Urban
Development Authority v. Orchid Infrastructure Developers (P) Ltd.,
Supra, in support of his submission that unless there is acceptance of bid
and issuance of allotment letter, no concluded contract comes into
existence. Hence, no suit for declaratory relief or mandatory injunction
would be maintainable at the instance of the highest tenderer. The highest
bidder has no right to have his bid accepted by the tendering authority. No
vested right accrues in his favour until a formal contract is executed
between the parties. The facts of this case are completely different from the
facts of the present case where a binding contract came into existence
between the parties.
57. Learned Counsel referred to the decision in Shrijee Sales
Corporation. v. Union of India, Supra, to argue that the principle of
estoppel cannot be invoked against the Government to compel the
Government to do something which will be against public interest. In the
present case the appellants have failed to demonstrate any public interest
justifying cancellation of the sale agreement.
58. The decision in Union of India v. VVF Ltd., Supra was relied upon in
support of the proposition that generally public interest requires that the
State be held bound by the promise held out by it. However, this does not
preclude the State from withdrawing the benefit prospectively if public
interest so requires. Again, no public interest could be shown by the
appellants in the present case.
59. The decision in Sidhbali Steels Ltd and Ors Vs State of Uttar
Pradesh, Supra, was relied upon to argue that if it can be shown by the

51

Government that having regard to the facts as they have subsequently
transpired, it would be inequitable to hold the Government to the promise
made by it, the Court would not raise an equity in favour of the promisee
and enforce the promise against the Government. Where public interest
warrants, the members of promissory estoppel cannot be invoked. The
Government can change the policy in public interest. The doctrine of
promissory estoppel cannot be invoked for enforcement of a promise made
contrary to law, because none can be compelled to act against the statute.
For the same proposition, reliance was placed on Yamuna Expressway Vs
Shakuntala Education, Supra .
The decision in Sales Tax Officer and Anr v. Shree Durga Oil Mills
and Anr, Supra, was relied upon for the proposition that the determination
of applicability of promissory estoppel against the Government hinges upon
balance of equity for public interest. In case there is a supervening public
equity, the Government would be allowed to change its mind; it would then
be able to withdraw from representation made by it which induced persons
to take certain steps which may have gone adverse to the interest of such
persons on account of such withdrawal. Once public interest is accepted as
the superior equity which can override individual equity, the aforesaid
principle should be applicable even in cases where a period had been
indicated for operation of the promise.
These two cases have no manner of application to the facts of the
present case. We have not found any public interest or public equity that
could prompt the appellant State to cancel the tender process.

52

60. Renaissance Distilleries and Breweries Ltd. v. State (NCT of
Delhi), supra, was relied upon to argue that a participant in a tender
process is precluded from challenging such process subsequently. This
decision has no manner of application to the facts of the present case. The
writ petitioners did not challenge the tender process at all. On the contrary,
they want the tender process to be carried to its logical conclusion.
61. Paragraphs 19, 22 and 23 of the decision of the Hon’ble Supreme
Court in R. Hemalatha v. Kashthuri, Supra, was referred to by learned
Advocate General. In paragraph 19, Section 17 of the Registration Act, 1908,
has been reproduced. In paragraph 22, Section 49 of the Registration Act
has been extracted. In paragraph 23 it has been held that as per the proviso
to Section 49, an unregistered document affecting the immovable property
and required by the Registration Act to be registered may be received as
evidence of a contract in a suit for specific performance under Chapter II of
the Specific Relief Act, or as evidence of any collateral transaction not
required to be effected by registered document. I fail to understand, with
due respect to the learned Advocate General, how this decision helps the
appellant.

62. The decision in Indore Vikas Praadhikaran (IDA) v. Shri Humud
Jain Samaj Trust, Supra, was relied upon by learned Counsel for the
appellants in support of the proposition that firstly, while exercising power
of judicial review, the Court does not sit as an Appellate Court over the
decision of the Government but merely reviews the manner in which the
decision was made; secondly, no vested right is created in favour of the
highest bidder until the bid is accepted by the competent authority in

53

relation to the property in question; and thirdly, the Government could
validly retain power to accept or reject even the highest bid in the interest of
public revenue. In the present case, I have found the decision making
process to be completely arbitrary. A discernible vested right was created in
favour of the writ petitioner company, as discussed above. It is not even the
case of the appellants that cancellation of the tender process including the
resulting agreement of sale was necessary in the interest of public revenue.

63. In view of the aforesaid, in a nutshell, we see that the Mizo
Government took a conscious decision to dispose of the subject property.
From the records disclosed before us, it appears that the property is not in
use. A tender process was initiated. The writ petitioners participated in such
a process and emerged as the highest bidder. They deposited the entire
consideration amount along with the applicable penalty money. Such
payment was received by the appellant without any reservation. There was
copious exchange of correspondence between the parties. An agreement of
sale was executed by and between the parties after the clauses of such
agreement were finalised following detailed deliberations. At this juncture, in
view of the imminent elections, the Government told the writ petitioners that
the execution of conveyance would be deferred till after the election. The
election resulted in a change of Government. The new dispensation, without
even entering into a dialogue with the writ petitioners, unilaterally cancelled
the tender process including the agreement of sale. We find no justification
for such an act on the part of the appellant. The impugned action of the
appellant was unfair, unjust, arbitrary and flagrantly violative of the
guarantee under Article 14 of the Constitution of India. The appellants have

54

not been able to demonstrate any public interest, far less overwhelming
public interest, which could justify cancellation of the tender process. The
decision of the Government to cancel the entire process appears to us to be
a clear case of regime revenge.
64. In view of the aforesaid we see no reason to interfere with the
judgment and order under appeal. Accordingly, the appeal stands
dismissed. There will be no order as to costs. Time for the appellant to carry
out learned Single Judge’s order is extended by 8 (eight) weeks from date.
65. Urgent Photostat certified copies of this judgment and order, if applied
for, be supplied to the parties on compliance of all necessary formalities.

I agree.


(Apurba Sinha Ray, J.) (Arijit Banerjee, J.)