Full Judgment Text
2023INSC871
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8073 OF 2022
KARNATAKA STATE
ELECTRONICS DEVELOPMENT
CORPORATION LTD. …APPELLANT(S)
VERSUS
KUMAON ENTERTAINMENT
AND HOSPITALITIES PVT. LTD. …RESPONDENT(S)
J U D G M E N T
VIKRAM NATH, J.
1. This appeal is directed against the judgment and
order dated 28.07.2017 passed by the Division
Signature Not Verified
Digitally signed by
SONIA BHASIN
Bench of the High Court of Karnataka in Writ
Date: 2023.10.05
17:19:40 IST
Reason:
Civil Appeal No. 8073 of 2022 Page 1 of 33
Appeal No. 175 of 2017 titled “ Karnataka State
Electronics Development Corporation Ltd. Vs.
Kumaon Entertainment and Hospitalities
Private Limited” , whereby the appeal of the
appellant was dismissed, thereby confirming the
judgment of the learned Single Judge dated
03.09.2015 and 14.11.2016, allowing the Writ
Petition No.1605 of 2015 of the respondent and
dismissing the review petition respectively.
2. The State of Karnataka came up with a policy
decision for the purposes of promoting and
developing industries related to Electronic &
Information Technology within the State. It
established Karnataka State Electronic
1
Development Corporation Ltd. as a Non-Profit
Organisation for the aforesaid purpose across the
State including the Electronic City in Bangalore.
Acquisition of land in large amount was made in
Bangalore city for setting up an area known as
Electronic City.
1
In short known as “appellant”
Civil Appeal No. 8073 of 2022 Page 2 of 33
rd
3. The appellant, vide its 133 Board Resolution came
up with a new selection process for allotment of
land in the Electronic City. Vide allotment letter
dated 25.01.2006, the appellant allotted plot
admeasuring 0.25 acres to the respondent for
development of such land to be used in industry
relating to Information Technology & Electronic
Development Sector (Animation & Multi Media
Services). The tentative price fixed of the allotted
land was Rs. 1 Crore per acre. The respondent was
required to commence the project at the earliest.
4. The allotment was made on lease cum sale basis for
a period of ten years. It was further stipulated that
upon completion of ten years or on completion of
the project, the lease would convert to a sale,
subject to fulfilment of all the terms & conditions of
allotment and payment of price of land in full as
may be finally determined by the appellant. It was
also clearly mentioned in the allotment letter that
the price of land indicated was only tentative (Rs. 1
Civil Appeal No. 8073 of 2022 Page 3 of 33
Crore per acre). The final price of the allotted land
would be communicated later, which would be
dependent upon other factors being finalized in the
meantime. Possession of the land was given to the
respondent on 09.05.2006.
5. A lease cum sale agreement was executed between
the appellant and the respondent on 30.10.2006.
The terms of the lease cum sale agreement would
be dealt in detail at a later stage.
6. The respondent, which was originally a partnership
firm, applied for it being converted into a private
limited company in 2007. The appellant issued no
objection certificate in that regard on 18.05.2007.
st
7. In the 141 Board meeting of the appellant dated
19.07.2007, the Board resolved that the price for
allotment would be as per the guidance value fixed
by the Government, which was Rs. 800/- per sq. ft.
It would work out to Rs. 3.2 Crores per acre. The
Civil Appeal No. 8073 of 2022 Page 4 of 33
said value was duly adopted based upon the
guidance value determined by the Government.
8. On 23.07.2007, the respondent applied to the
appellant for conversion of nature of use from
Information Technology sector to Hospitality sector.
As per the terms of allotment and the lease
agreement, change in nature of use could be
granted, subject to the payment of additional
charges at the prevailing rate. On 24.09.2007,
communication was issued by the appellant
granting permission for the change in the nature of
activity, subject to payment of Rs. 20 lacs per acre.
The respondent thereafter paid an amount of Rs. 5
lacs as the allotted land was only one quarter of an
acre. On 15.10.2007, the respondent also applied
for approval of its plan for construction.
9. On 06.11.2008, an audit objection was raised
stating that the prevailing rate of plot at the time of
change of use was Rs. 3.2 Crores per acre, whereas
permission of change of use was granted at a much
Civil Appeal No. 8073 of 2022 Page 5 of 33
lower rate. The appellant had, therefore, suffered a
loss of Rs. 46.25 lacs. Further, as the rate of Rs. 3.2
Crores per acre was applicable for residential
purposes, but this being used for commercial
purpose, the rate would be higher by 40 per cent
and, therefore, the loss would be additional Rs. 32
lacs.
10. On 31.10.2011, the respondent requested the
appellant for execution of the sale deed. Thereafter
he also gave a show cause notice on 05.06.2012 for
execution of the sale deed. The appellant sent a
reply in response to the notice on 25.07.2012,
calling upon the respondent to pay Rs. 83.25 lacs
for execution of the sale deed in view of the
prevailing rate being Rs. 3.2 Crores per acre for
residential purposes and for commercial use would
be Rs.4.48 Crores being enhanced by 40%.
11. The respondent challenged the reply dated
25.07.2012 by way of Writ Petition No. 10338 of
2013. The said petition was disposed of by order
Civil Appeal No. 8073 of 2022 Page 6 of 33
dated 14.08.2014 with a direction to the
respondent to submit a representation and a
further direction to the appellant to decide the said
representation within two months.
12. The representation submitted by the respondent
was rejected by the appellant. The respondent
thereafter preferred Writ Petition No. 1605 of 2015,
praying for a direction to the appellant to execute
the sale deed in their favour, as according to them,
they had fulfilled all the formalities. Before the High
Court, the respondent also filed a communication
which took place between the appellant and the
audit department, wherein the appellant sent a
response to the audit objection justifying that the
prevailing rate was Rs. 1 Crore per acre and not Rs.
3.2 Crore per acre.
13. The learned Single Judge, vide judgment dated
03.09.2015, relying on the said audit objection and
its response by the appellant, allowed the Writ
Petition No.1605 of 2015. Appropriate directions
Civil Appeal No. 8073 of 2022 Page 7 of 33
were issued to appellant to execute the sale deed.
Subsequent thereto the appellant filed an intra
Court appeal and also filed a review. Further, after
dismissal of review, appellant filed another intra
Court appeal and also filed a review before the
Division Bench. Finally, came the judgement of the
Division Bench dated 28.07.2017. Same is
impugned in this appeal. The fact remains that the
Writ Petition filed by the respondent was allowed by
the Single Judge and the intra court appeal filed by
the appellant was dismissed by the Division Bench.
This gave rise to the filing of the present appeal.
14. We have heard learned counsel for the parties and
perused the material on record.
15. The submissions advanced by learned counsel for
the appellant are summarized as hereunder:
a) The Division Bench committed an error in
dismissing the appeal primarily on the ground
of delay of 459 days, which was not
satisfactorily explained. The Division Bench
Civil Appeal No. 8073 of 2022 Page 8 of 33
failed to take into consideration the time spent
by the appellant in taking recourse to other
legal measures permissible under the law before
a valid forum. The appellant was entitled to
2
benefit of section 5 of the Limitation Act, 1963 .
Reliance has been placed on the judgment of
this Court in the case of Union of India vs.
3
West Coast Paper Mill .
b) The Single Judge and the Division Bench erred
in relying upon the communication or the
correspondence with respect to the objections
raised in the audit report merely because the
appellant was trying to justify the demand of Rs.
5 Lakhs, the said justification being on a wrong
premise, cannot deprive the appellant, which is
a Public Sector Undertaking, from recovering
the valid dues payable by the respondent which
is a commercial entity. The respondent cannot
take undue advantage of the internal
2
The Limitation Act
3
(2004) 3 SCC 458
Civil Appeal No. 8073 of 2022 Page 9 of 33
communication. The same was not supported
by the decision taken in the Board meeting
which alone would be binding on the appellant.
c) It was very clearly mentioned in the agreement
of sale cum lease that the rate of Rs.1 Crore was
tentative rate. It was further stipulated in clear
terms that at the time of final execution of sale
cum lease deed, the prevailing rate would be
charged as would be finalised in due course of
time depending upon other attending charges
which may be liable to be paid by the appellant.
st
Under the decision of the 141 Board meeting,
the prevailing rate in 2007 at the time when
change in nature of use was sought was Rs.3.2
Crores per acre and further addition of 40% was
liable to be paid for the change in nature as the
use was for commercial purposes.
d) The Single Judge and the Division Bench failed
to appreciate that all other entities, list of which
was provided, had been charged at the final rate
st
determined as per the 141 Board resolution. In
Civil Appeal No. 8073 of 2022 Page 10 of 33
case the respondent is allowed to pay at the
tentative rate only, all other similarly placed
entities who have paid at the final rate would
start claiming refund from the appellant
causing immense loss of public revenue.
e) The communication based on ignorance of a
Board decision, demanding only Rs. 5 lakhs
could not be said to be the decision of the
appellant. It was a mistake committed by the
staff apparently because the Board resolution
had been passed about two months earlier. It
may not have come to the knowledge of the staff
dealing with the request made by the
respondent for execution of sale-cum-lease
deed after change of nature of the use.
f) The Single Judge and the Division Bench of the
High Court fell in error in not appreciating that
any loss to the appellant would amount to loss
to the public exchequer. The appellant is a
Public Sector Undertaking working under the
aegis of the State of Karnataka. It is a non-profit
Civil Appeal No. 8073 of 2022 Page 11 of 33
organisation, established for the growth and
promotion of Information Technology and
Electronics sector in the State of Karnataka. It
had been established to help the IT industries
to flourish in the State of Karnataka. Hundred
per cent shares of the appellant company are
held by the State of Karnataka.
g) The impugned order passed by the Division
Bench deserves to be set aside, the appeal
deserves to be allowed and as a result the writ
petition preferred by the respondent is liable to
be dismissed.
16. The submissions advanced by the learned counsel
for the respondent are briefly summarised as
under:
a) The price of land reflected in the Letter of
Allotment could be done only on two counts
namely towards development work or
finalization of court of awards. The respondent
has already paid an additional amount of
Civil Appeal No. 8073 of 2022 Page 12 of 33
Rs.3,75,000/- towards land development cost
for which a separate demand had been raised
as such no further demand could be raised on
the basis of revision of prices. Any change in the
price reflected in the Letter of Allotment ought
to have been done at the earliest in view of the
expressions used “as soon as it may be” in
clause 13 (b) of the Lease cum Sale Agreement
dated 30.10.2006. Reliance has been placed
upon a judgment of this Court in the case of
Karnataka Industrial Development Board
4
Anr. vs. M/s Prakash Dal Mill and Ors. .
b) The respondent has already paid the demand
raised vide letter dated 24.09.2007 for an
amount of Rs.5 Lakhs with respect to the
charges for change in activity. After much delay
further demand of more than Rs.83 Lakhs has
been made based on some audit objection. The
same has rightly been held to be illegal by the
4
(2011) 6 SCC 714
Civil Appeal No. 8073 of 2022 Page 13 of 33
Single Judge as also the Division Bench of the
High Court.
c) The demand raised on the basis of the rates
st
determined in the 141 Board meeting of the
appellant was not applicable to the respondent
inasmuch as the said fixation was for fresh
allotment of stray plots.
d) The appellant had themselves admitted in
response to the audit objections that the
prevailing rate was Rs.1 Crore per acre and not
Rs.3.2 Crores per acre and, therefore, they
cannot keep on changing their stand from time
to time in order to extract more money from the
respondent who has always been compliant to
their previous demands.
e) It was only when the respondent repeatedly
requested the appellant to execute the final
lease cum sale deed and was compelled to issue
a legal notice that an additional demand of
Rs.83 Lakhs was raised vide communication
dated 25.07.2012. The said conduct of the
appellant was wholly unjustified and has been
Civil Appeal No. 8073 of 2022 Page 14 of 33
rightly disapproved by the High Court. The
repeated filing of reviews and appeals by the
appellant also shows their malicious conduct in
somehow or the other stalling the execution of
the lease cum sale deed and to somehow or the
other extract unwarranted amount from the
respondent which was otherwise not payable.
Reliance was placed upon the following four
judgments:
• M. Nagabhushana v. State of
5
Karnataka , paras 12, 13, 18 & 22;
• Dnyandeo Sabaji Naik v. Pradnya
6
Prakash Khadekar – para 14;
7
• Vinod Kapoor v. State of Goa , paras
11to 13;
• Sandhya Educational Society v. Union
8
of India , paras 13, 16 to 18.
5
(2011) 3 SCC 408
6
(2017) 5 SCC 496
7
(2012) 12 SCC 378
8
(2014) 7 SCC 701
Civil Appeal No. 8073 of 2022 Page 15 of 33
f) Benefit of the Limitation Act was not admissible
to the appellant in as much as the entire
exercise and the time spent in filing reviews and
appeals repeatedly was in itself an abuse of
process of law. Reliance was placed upon the
following two judgments:
• Neeraj Jhanji v. Commr. Of Customs &
9
Central Excise , paras 2-3;
• Haryana State Coop L&C Federation
Ltd. v. Unique Coop L&C Coop Society
10
Ltd. , at paras 11-15.
g) The appeal lacks merit and is liable to be
dismissed based on the above submissions.
17. Before proceeding to analyze the arguments
advanced by the learned counsel for the parties, at
the outset, it would be relevant to refer to the terms
of the allotment letter, terms of the agreement
9
(2015) 12 SCC 695
10
(2018) 14 SCC 248
Civil Appeal No. 8073 of 2022 Page 16 of 33
between the parties as also the resolutions passed
from time to time.
a) A copy of letter of intent/allotment dated
25.01.2006 is filed as Annexure – P1. According
to it, the respondent which was earlier known
as “M/s Kumaon Associates & Technology”, at
the time of allotment, was allotted 0.25 acres of
land in Plot No.56 within Survey No.66 of
Doddathougur Village at Electronic City for
setting up of IT related service activities.
b) Paragraph 1 of the said allotment letter
provided that the lease shall be converted into
a sale subject to fulfilment of all terms and
conditions of allotment and payment of price of
land in full as finally fixed, subject to
adjustment of amount already paid towards
premium and rent.
c) Paragraph 2 mentions that the price of land
would be determined by the appellant and
intimated in due course to the respondent. It
was only for the purposes of allotment that the
Civil Appeal No. 8073 of 2022 Page 17 of 33
tentative price of the land was fixed at Rs.1
Crore per acre.
d) Paragraph 9 of the allotment letter provided
that the appellant reserves its rights to increase
the tentative price of land indicated in the said
letter after completion of all development works
and finalization of court awards, if any.
e) Paragraphs 1, 2 and 9 of the allotment letter are
reproduced hereunder:
“1. The allotment of land is on lease cum sale
basis for a period of 10 year. At the end of 10
years or completion of the project for which
land is allotted whichever is early, the lease
shall be converted into a sale subject to
fulfillment of all the terms and conditions of
allotment and payment of price of land in full
as finally fixed subject to adjustment of
amounts paid by you towards premium and
rents. The conversion of lease into a sale shall
also be subject to the utilization of minimum
50% of the extent handed over as determined
by KEONICS on the merits of each case. The
decision of KEONICS in this behalf is final and
binding on you.
2. The price of the land shall be determined by
KEONICS and intimated to the applicant in
due course. However, for the purposes of this
allotment the tentative price of the land per
acre has been fixed at Rs.1 Crore per acre.
……. …….. ……..
Civil Appeal No. 8073 of 2022 Page 18 of 33
9. KEONICS reserves its right to increase the
tentative price of the land indicated in this
letter of intent after completion of all
development works and finalization of Court
Awards, if any.”
f) The Lease cum Sale Agreement (Annexure -P2)
dated 30.10.2006 executed between the parties
also contains similar clauses which are briefly
referred to hereunder.
g) Paragraph 6 of the said agreement states that
the parties have agreed to the price of land
being tentatively fixed at Rs.25 Lakhs. The said
paragraph is reproduced hereunder:
“6. And whereas the LESSOR and the LESSEE
having agreed that the price of the land
tentatively to be Rs. 25,00,000/- (Rupees
Twenty Five Lakhs Only) and the LESSOR
having received Rs.25,00,000/- (Rupees
Twenty Five Lakhs Only) from the Lessee
towards the final consideration, the receipt of
which the LESSOR hereby acknowledges.”
h) Under the terms and conditions of the
agreement, clause (3) lays down several
conditions. Relevant for our purposes are
clauses 3r(i) and (ii). Clause r(i) provides that
Civil Appeal No. 8073 of 2022 Page 19 of 33
lessee (respondent) would not change the
constitution status of its firm/company without
previous written consent of the lessor and
clause r(ii) thereof provides that the lessee
(respondent) would not change the
name/product as mentioned in the application
again without the previous written consent of
the lessor (appellant). For such change the
lessee would have to pay prevailing rate of the
plot. The said two clauses are reproduced
hereunder:
“r(i) The lessee shall not change the
constitution/status of its firm/company
(proprietary or partnership (registered or un-
registered) or private limited company or
unlimited Company) without the previous
written consent of the lessor or any other
officer authorized by the lessor and such
consent shall be granted by the lessor subject
to the condition that the original applicant/
partners/promoters/Directors/shareholders
should continue to hold a minimum 51% of
the interest/shares in the newly constituted
firm/company. And in the event of the lessee’s
death, the person to whom the title shall be
transferred as heir or otherwise shall cause
notice thereof to be given to the lessor within
three months from such death.
Civil Appeal No. 8073 of 2022 Page 20 of 33
ii) The lessee shall not change the
name/product (as mentioned in the
application) without the previous written
consent of the lessor or any officer authorized
by the lessor and such consent shall be
granted by the lessor subject to the condition
that the lessee has to pay prevailing rate of the
plot.”
i) The next relevant clause is clause 13(b) which
provides that the lessor (appellant) would fix the
price as soon as it is convenient and the same
would be communicated to the lessee so that
the sale could be affected. It further records that
the decision of the lessor would be final and
binding on the lessee.
j) Clause 13(c) provides that the allotment would
be for a period of ten years and at the expiry of
the ten years or completion of the project for
which land was allotted whichever is earlier, the
lease would be converted into a sale subject to
fulfillment of the terms and conditions of
allotment and payment of price of land in full as
finally fixed. It further records that the decision
of the lessor in the said behalf would be final
Civil Appeal No. 8073 of 2022 Page 21 of 33
and binding. Clauses 13(b) and 13(c) are
reproduced hereunder:
“13(b). As soon as it may be convenient the
LESSOR shall fix the price of the demised
premises in the allotment letter and at which
it will be sold to the LESSEE and
communicate it to the LESSEE and the
decision of the LESSOR in this regard will be
final and binding on the LESSEE. The
LESSEE should pay the balance of the value
of the property, if any after adjusting the
premium and the total amount of the rent paid
by the LESSEE and earnest money deposit
within one month from the date of receipt of
communication from LESSOR. On the other
hand, if any sum is determined as payable by
the LESSOR to the LESSEE after the
adjustment as aforesaid, such sum shall be
refunded to the LESSEE before the date of
execution of the sale deed.
(c) The allotment of land is on lease cum sale
basis for a period of ten year. At the end of ten
years or completion of the project for which
land is allotted whichever is early, the lease
shall be converted into a sale subject to
fulfillment of all the terms and conditions of
allotment and payment of price of land in full
as finally fixed subject to adjustment of
amounts paid by you towards premium and
rents. The conversion of lease into a sale shall
be subject to the utilization of minimum 50%
of the extent handed over as determined by
LESSOR on merits of each case. The decision
of LESSOR in this behalf is final and binding
on you.”
Civil Appeal No. 8073 of 2022 Page 22 of 33
18. The request of the respondent for change of name
and status was permitted by issuing a No Objection
Certificate on 18.05.2007 from Partnership to
Private Limited Company. The request for change of
activity from IT sector to Hospitality sector was
permitted vide communication dated 24.09.2007
subject to payment of charges for change of activity
i.e.Rs.5 lakhs at that time.
19. The Government Audit Party, while auditing the
records of the appellant, raised an objection at
Audit Enquiry No.27 vide communication dated
06.11.2008 that the appellant was suffering a loss
of at least Rs.78.25 lakhs in as much as the change
in activity from IT related sector to hospitality sector
would amount to a fresh transaction and, therefore,
the rate prevailing at the time of seeking change in
activity should have been applied treating it to be a
fresh transfer. The objection also noted that the
land was originally allotted for promoting
Information Technology and related industry in the
Electronic City but the allottee had completely
Civil Appeal No. 8073 of 2022 Page 23 of 33
changed usage of the said land by wanting to set up
a hotel which fell in the hospitality sector. The
objection of the Audit Party is reproduced
hereunder:
“6. The allotment of land in January 2006 was
influenced by the objective of setting up of IT
related industry. However, in contravention
the Allottee proposed (June/July 2007) to
construct the Hotel. Therefore, the consent
should have been accorded by charging the
prevailing rate of plot (Rs.3.2 Crores per acre)
in terms of clause 3(4)(ii) of the Land cum Sale
Agreement. Failure to do so, that caused loss
to the Company to extent of Rs.46.25 lakhs.
Further, the rate of Rs.3.20 Crore per acre was
applicable to residential purpose and the rate
has to be increased by 40 percent for
commercial purpose. Considering this loss
would further increase by Rs.32 lakhs.”
20. It is true that initially the appellant tried to justify
the demand of change in activity of Rs.5 lakhs
calculated at the rate being Rs.1 Crore per acre but
later on it realized that the audit objection was
correct and, therefore, the appellant was entitled to
demand the revised final rate as determined by the
st
141 Board meeting. It would be relevant to
reproduce the Resolution of Board of Directors
st
passed in its 141 meeting:
Civil Appeal No. 8073 of 2022 Page 24 of 33
“EXTRACT OF THE RESOLUTION PASSED AT
ST
THE 141 MEETING OF THE BOARD OF
DIRECTORS OF M/S. KARNATAKA STATE
ELECTRONICS DEVELOPMENT
CORPORATION LIMITED HELD ON
TH
THURSDAY, THE 19 DAY OF JULY, 2007 AT
03.00 PM AT THE REGISTERED OFFICE,
29/1, RACE COURSE ROAD, BANGALORE –
560 001
ADDITIONAL SUBJECT:
Additional Subject No.2:- Fixation of Land
Cost for stray plots in Electronics City,
Bangalore.
Identification and availability of some stray
sites due to
a) Resurveying and fixation of boundaries to
various allotees,
b) Reclaiming of some plots due to court
decision.
c) Result of lifting of green belt in the present
CDP plan by BDA was noted by the Board.
The Board further noted about the huge
demand for land by the industries to set up
IT Parks and IT related activities in
Electronics City, and fixation of guidance
value by the Government in Electronics
City at Rs.800/- per sq. ft., which works
out to around Rs.3.2 Crores per acre.
The Directors suggested to adopt the
guidance value of Rs.3.2 Crores per acre
fixed by the Government, which will enable
the Corporation to maximize its returns,
Civil Appeal No. 8073 of 2022 Page 25 of 33
hence, to fix, the price of Rs.3.2 Crores per
acre.
Thereafter the Board resolved to approve
for adopting the guidance value of Rs.3.2
Crores fixed by the Government as
allotment rate for the stray and other sites
available in the Electronics city. And
further authorized the Managing Director
for taking necessary actions in this regard.
For KARNATAKA STATE ELECTRONICS
DEVELOPMENT CORPORATION
LIMITED.”
21. There is no denying the fact that the appellant is a
fully owned Undertaking/ Corporation of the State
of Karnataka. Any loss suffered by it would be a loss
to the Public Exchequer. The respondent, on the
other hand, has shifted its purpose of setting up an
IT related industry to a Hospitality sector to set up
a hotel. If the amount for such conversion of usage
is not legally recovered from the respondent, as a
result, loss being suffered by the appellant, would
not be in public interest. It is also not disputed that
all other similarly situate allottees have paid at the
st
rate determined in the 141 Board Meeting of the
appellant.
Civil Appeal No. 8073 of 2022 Page 26 of 33
22. The respondent seems to be getting undue
advantage merely because the clerical staff and the
officer signing the demand notice for conversion
charges applied the tentative rate of Rs. 1 Crore per
acre instead of the prevailing rate of Rs.3.2 Crores
per acre and in addition, additional 40 percent for
use as commercial as the rate of Rs.3.2 Crores per
acre being that for residential purposes. Neither the
clerical staff nor an officer of the appellant would be
competent to override or deviate from the decision
st
of the Board of Directors taken in the 141 Board
st
Meeting. The 141 Board Meeting has taken place
prior to the respondent applying for change of use
and issuing of the demand notice for conversion,
there could be no justification for not adhering to
st
the decision taken in the 141 Board Meeting. A
bona fide mistake could always be corrected.
23. The arguments advanced by the respondent and
strongly relied upon by the learned Single Judge as
also the Division Bench regarding the stand taken
by the appellant in filing its objections to the audit
Civil Appeal No. 8073 of 2022 Page 27 of 33
report regarding the financial loss, also cannot be
of any help to the respondent. The said objections
st
being contrary to the 141 Board Meeting decision,
would again be a mistake at the hands of the
clerical staff and some officers of the appellant
Corporation. The audit objection is based upon
correct appreciation of the decisions taken in the
st
Board Meeting, in particular, 141 Board Meeting
as also based upon the terms and conditions laid
down in the Letter of Allotment and the Lease
Agreement. We have no reason to find any fault with
the audit objections.
24. The relevant clauses of the allotment letter as also
the lease agreement have already been reproduced
in the earlier part of this order. They are very clear
that the rate of Rs.1 Crore per acre was tentative
rate and the final rate was to be determined later
on which would be binding on the lessee i.e. the
respondent. The respondent cannot, in any
manner, go against the terms and conditions given
under the Letter of Allotment as also the Lease
Civil Appeal No. 8073 of 2022 Page 28 of 33
Agreement. Once the respondent is bound by the
terms and conditions, the final rate determined by
st
the Board in its 141 meeting, being the prevailing
rate of the Collector, would be binding on the
respondent.
25. It is true that the appellant had filed repeated
review applications both before the learned Single
Judge as also the Division Bench, which had
resulted into delay in filing the appeal before the
Division Bench. The Division Bench ought not to
have taken into consideration the delay of 459 days
to be without any satisfactory explanation in
dismissing the appeal of the appellant. As a matter
of fact, the Division Bench failed to exercise its
discretion vested under the law in condoning the
delay in order to advance justice parties
inter se
thereby resulting into serious prejudice and
financial loss to the appellant Corporation which is
a public entity. Four judgments relied upon by the
respondent regarding filing of review petitions have
no application on facts to the present case. In the
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case of M.Naghabhushana (supra), the party had
reagitated the issue before the High Court after
having lost upto this Court. The principle of res
judicata was applied. The case of Dnyandeo Sabaji
Naik (supra) was regarding filing of frivolous and
groundless filing of applications/petitions, which is
not the case in hand, as we have already held that
the orders passed by the Single Judge and the
Division Bench are not tenable in law. The case of
Vinod Kapoor (supra) related to filing of a second
S.L.P. after withdrawal of the first without liberty to
file a fresh one. The case of Sandhya Educational
Society (supra) also has no application as it related
to maintainability of the S.L.P. only against the
order passed in the Review by the High Court,
without challenging the main order. The other two
judgments relied upon by the respondent regarding
applicability of Section 14 of the Limitation Act also
are of no assistance as we are not extending any
benefit under Section 14 of the Limitation Act to the
appellant. In our considered view, the delay in filing
the appeal before the Division Bench had been
Civil Appeal No. 8073 of 2022 Page 30 of 33
satisfactorily explained and as such it ought to have
been condoned under Section 5 of the Limitation
Act.
26. Another argument advanced on behalf of the
respondent that the final rate ought to have been
determined at the earliest i.e. soon after the Letter
of Allotment and there being sufficient delay in
determining the final rate, the respondent should
be allowed to get the sale deed executed at the
tentative rate. Reference has been made to the
phrase ‘as soon as it may be’ in Clause 13(b).
Further reliance has been placed upon the
judgment in the case of Prakash Dal Mill (supra)
This argument has no legs to stand prior to the
request for execution of the sale deed, the final rate
st
had already been determined in the 141 Board
Meeting and, therefore, the respondent would be
bound to and abide by the same. The judgment in
the case of Prakash Dal Mill (supra) is of no help to
the respondent. In the said case, for the same land
the final rate was fixed belatedly. In the present
Civil Appeal No. 8073 of 2022 Page 31 of 33
case, the respondent itself had applied for change
of use to hospitality on 23.07.2007 whereas in the
Board meeting of 19.07.2007 the final rates
applicable had been fixed.
27. Another argument advanced was with respect to the
rate of Rs.3.2 Crores per acre being applicable to for
a stray site available in the Electronic City being not
applicable to the respondent is also without any
merit. Once the respondent had made a request for
change of use of the allotted plot from an IT sector
industry to a Hospitality sector, it would amount to
a fresh transaction and, therefore, the rate
st
determined in the 141 Meeting would be fully
applicable.
28. For all the reasons recorded above, we find that the
demand raised by the notice dated 25.07.2012 does
not suffer from any infirmity. The respondent is
liable to pay the demand as per the said notice.
Accordingly, the appeal is allowed. The impugned
Civil Appeal No. 8073 of 2022 Page 32 of 33
judgments passed by the Division Bench and the
Single Judge are set aside and the writ petition filed
by the respondent stands dismissed.
……………………………………J.
(VIKRAM NATH)
……………………………………J.
(AHSANUDDIN AMANULLAH)
NEW DELHI
OCTOBER 5, 2023
Civil Appeal No. 8073 of 2022 Page 33 of 33