A prospective allotment policy cannot retrospectively cancel an existing allotment.

The appellants were allotted approximately six acres of land at Plot No. IND-8/1, Mouza Nonadanga, by the Calcutta Metropolitan Development Authority (subsequently KMDA) for establishing an industrial unit. The allotment was made on a 99-year leasehold basis, and the appellants paid the entire premium of Rs. 8,75,17,360/-.

Physical possession was handed over to the appellants in April 2003 and acknowledged by KMDA.

KMDA subsequently granted extensions for submission of the Detailed Project Report (DPR) and building plan. The appellants submitted the DPR on 21 March 2007 and repeatedly requested execution and registration of the lease deed, asserting that the absence of a registered lease prevented mutation and sanction of the building plan by the Kolkata Municipal Corporation.

KMDA nevertheless cancelled the allotment on 14 December 2007, relying on its Land and Plot Allotment Policy, 2007, which required construction to commence within the prescribed period.

The appellants challenged the cancellation and threatened dispossession in WPA 1429 of 2008. The learned Single Judge dismissed the writ petition on 2 November 2023, leading to the present intra-court appeal.

Whether KMDA could retrospectively apply the Land and Plot Allotment Policy, 2007, which came into force on 21 August 2007, to an allotment made earlier and already acted upon by the parties.

Whether the appellants’ failure to commence construction justified cancellation of the allotment when KMDA had not executed and registered the lease deed and the appellants had submitted the DPR within the extended period.

Whether the learned Single Judge erred in dismissing the writ petition and upholding the cancellation of allotment.

The Court applied the principle that a subsequently introduced policy or condition cannot retrospectively alter the governing terms of an existing allotment; in the Court’s words, “the rules of the game cannot be changed when the game is on”.

It further applied the contractual principle embodied in Section 55 of the Indian Contract Act, 1872, concerning the consequences of failure to perform within the stipulated time, while examining whether time remained contractually decisive in the circumstances of the case.

The Court also applied the principle that administrative and statutory authorities must act consistently with their own representations and cannot penalise an allottee for delay substantially attributable to the authority’s failure to perform its reciprocal obligation.

The Court held that the 2007 Policy was expressly brought into force “henceforth” from 21 August 2007 and was therefore prospective. It could not be used as the basis for cancelling an allotment made in 2002, pursuant to which the appellants had paid the full premium and obtained possession.

The extension granted by KMDA on 13 February 2007 was independent of the later policy and could not be treated as the appellants’ acceptance of subsequently imposed conditions.

On the facts, the appellants had submitted the DPR promptly and had repeatedly sought execution and registration of the lease deed. The Court found that the absence of the registered lease impeded mutation and obtaining the sanctioned building plan, and that the delay was attributable to KMDA rather than to the appellants.

Accordingly, the appellants could not be treated as being in default or as taking advantage of their own wrong.

The learned Single Judge’s reliance on implied conditions arising from the scarcity of land was also rejected because that consideration had neither been pleaded by KMDA nor supported by the record.

The judgment and order dated 2 November 2023 dismissing WPA 1429 of 2008 was set aside, and KMDA’s cancellation letter dated 14 December 2007 was quashed.

KMDA, its officers, agents and subordinates were restrained from dispossessing the appellants from Plot No. IND-8/1, Mouza Nonadanga, or from giving any further effect to the cancellation letter.

There was no order as to costs.