REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.496 OF 2007

JAYKRISHNA INDUSTRIES LTD. THROUGH DIRECTOR .......APPELLANT(s)

VERSUS

STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)

WITH

CIVIL APPEAL No. 498 of 2007

POPCORN PROPERTIES PRIVATE LTD.  THROUGH DIRECTOR AND ANOTHER ........APPELLANT(s)

VERSUS

STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)

CIVIL APPEAL No. 18489 of 2017 (arising out of SLP (C) No.33322 OF 2011)

POPCORN PROPERTIES PRIVATE LTD.  AND ANOTHER   ........APPELLANT(s)

VERSUS

STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)

CIVIL APPEAL No.18492 of 2017 (arising out of SLP (C) No.30293 OF 2017)

JAYKRISHNA INDUSTRIES LTD. ........APPELLANT(s)

VERSUS

STATE OF MAHARASHTRA AND OTHERS.....RESPONDENT(s)

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JUDGMENT

NAVIN SINHA, J.

Leave granted in both Special Leave Petitions.  

2. The present batch of appeals, between the same parties,

arise from a controversy relating to auction settlement by the

Mumbai  Housing  and  Area  Development  Board  (hereinafter

referred  to  as  “the  MHADA”),  of  a  plot  of  land  measuring

10,000 sq.  mtrs,  located at  Powai,  in the  town of  Mumbai.

The  auction  notice  published  on  17.11.2004,  remains

inconclusive,  mired  in  litigation.  The  subsequent

developments being relevant are also required to be noticed.

The contesting parties, M/s.Popcorn Properties Private Limited

and  M/s.  Jaykrishna  Industries  Ltd.,  shall  hereinafter  be

referred to as the Appellant and Respondent for convenience.    

3. Sri  Shekhar  Naphade,  learned  Senior  Counsel  for  the

Appellant  submitted  that  it  being  the  highest  bidder  at

Rs.22,22,22,300/-,  provisional  acceptance  of  the  bid  was

communicated to it on 17.12.2004.  As required, 25% of the

tender  amount  was  deposited  on  03.01.2005,  awaiting

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communication for deposit of the balance 75% amount.  On

03.05.2005,  the  Appellant  objected  to  MHADA  illegally

negotiating  settlement  of  the  subject  lands  with  the

Respondent.   Writ  Petition No.  2112 of  2005 was instituted

assailing the action of the official Respondents in provisionally

accepting  the  bid  of  the  Respondent  for  Rs.22,23,22,300/-.

The  order  dated  17.12.2004  was  subsequently  wrongly

cancelled on 07.05.2005, and which was also assailed by the

Appellant in Writ Petition No. 867 of 2010.  

4. The Respondent had earlier  preferred Writ  Petition No.

3466  of  2004  and  obtained  an  order  on  23.12.2004  for

submission of a higher bid.   The Appellant was not a party to

the  same.   The  High  Court  was  not  apprised  that  the

Appellant’s  bid  already  stood  provisionally  accepted.   Upon

being apprised of the correct facts, the order dated 23.12.2004

was recalled which automatically results in revival of the order

of  acceptance  of  the  appellant’s  provisional  bid.   The  High

Court  wrongly  declined  to  interfere  with  the  order  dated

07.05.2005 ordering a fresh tender process for settlement.

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5. Shri  Naphade,  in the aforesaid facts further submitted

that the Appellant also had a right in equity for settlement in

its favour, especially in view of the interim order of this Court

dated 04.09.2014 permitting it to make a fresh proposal to the

MHADA, and which has been found acceptable by it.  MHADA

had acted inequitably, on political influences, to cancel its bid

at the behest of the Respondent, who was not even a bidder in

response to the tender notice.  The Appellant has had to suffer

for  no  fault  of  it,  despite  being  the  highest  bidder.   An

alternative submission was made that if fresh tenders were to

be invited, the right of the first refusal must be given to it for

matching the  highest offer  that  may be made.   The second

alternative  submission  was  that  25  percent  of  the  plot  be

settled with it.  The present case, on its peculiar facts, was a

fit case where the normal rule of settlement by tender could be

deviated  from  and  settlement  could  be  made  by  private

negotiation.

6. Mr.   Sanjay  Hegde,  learned  Senior  Counsel  for  the

Respondent  submitted  that  even prior  to  the  advertisement

dated 17.11.2004, the Respondent had a pre-existing right to

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settlement  as  it  was  already  in  negotiation  with  MHADA,

culminating in orders dated 05.07.1999 and 05.10.1999 in its

favour.  This was recognised in Writ Petition No. 3466 of 2004

permitting  it  to  offer  a  higher  bid.   On  15.02.2005,  the

Respondent  offered  to  increase  its  bid  by  Rs.10,00,000/-

above  that  of  the  Appellant  and  payment  was  made  on

02.05.2005.   The  challenge  by  the  Appellant  to  the

cancellation  dated  07.05.2005  was  highly  belated.   The

Appellant  had no locus in the  matter  after  the  cancellation

order.   The  cancellation  order  having  been  declined

interference, the question of any private negotiation does not

arise.  A like claim in equity was also raised for an opportunity

to  pay  the  market  price  and  match  the  price  that  may  be

offered by the Appellant.

7. Learned Counsel for the State of Maharashtra submitted

that the order dated 05.07.1999 on which the Respondent’s

claim is founded has itself been annulled on 22.02.2000, and

which has not been assailed.  Sri M.L. Verma, learned Senior

Counsel appearing on behalf of MHADA, submitted that the

advertisement  dated  17.11.2004  was  for  construction  of  a

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hotel according to the then permissible commercial usage of

the  plot.   The  subsequent  change  in  permissible  usage  to

residential  purpose  for  construction  of  a  housing  complex

renders  the  entire  controversy  infructuous.   A  new

advertisement for auction at the best price available will have

to  be  made.   Considerable  time  has  also  passed  since  the

advertisement.  The  DCR  Regulation  33(5)  under  the

Development Control  Regulations for  Greater Bombay,  1991

(hereinafter  referred  to  as  “the  Regulations”)  with  regard  to

increase in FSI has not yet been finalized and published.  It

was specifically denied that any decision had been taken to

make settlement in favour of the Appellant.  

8. We  have  considered  the  submissions  on  behalf  of  the

parties, perused the records, including the impugned orders

and the communications exchanged between the parties.

9. The  claim  of  the  Respondent  for  settlement  of  a

government  property  by  way  of  a  private  largesse,  without

open advertisement, is completely unfounded in the law.  Its

letter  dated  30.06.1999  requesting  for  a  sympathetic

consideration for settlement with it, as otherwise the property

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was likely to be occupied by encroachers, is but a travesty of

the law.  Apparently, the negotiations were done by MHADA

under  political  influence  as  evident  from  the  letter  of  the

Respondent  dated  29.11.2004  read  with  the  letter  dated

30.04.2005 of one Mr. Mohan Rawle, Member of Parliament.

The Respondent had not submitted any bid in response to the

advertisement.  The order of the High Court dated 23.12.2004

was  passed  in  absence  of  the  Court  being  apprised  of  the

provisional acceptance of the Appellant’s bid. The plea that the

Respondent was never made aware of the order of cancellation

dated  22.02.2000  merits  no  consideration  as  it  was  also

revealed in the counter affidavit of the State of Maharashtra

dated  11.07.2005  in  Writ  Petition  No.  2112  of  2005.   The

cancellation order was addressed to MHADA and copy marked

to the Respondent.   There shall be a presumption in law that

a government communication was properly made and reached

the addressee, under Section 114 (e) of the Indian Evidence

Act.  It is not the case of the Respondent that the order never

came to be issued and remained in the file.  The Respondent

despite  awareness  never  challenged  the  cancellation  and

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which sets at naught its entire claim.  Any offer made to the

Respondent  in  teeth  of,  and  after  the  cancellation  was

therefore redundant.   

10. The bid of the Appellant was provisionally accepted.  No

final allotment was made in its favour under the advertisement

dated  17.11.2004.   MHADA  was  inhibited  from  proceeding

further in view of the Court order dated 23.12.2004 in favour

of the Respondent.  MHADA in its affidavit dated 24.06.2005,

in Writ Petition No. 2112 of 2005 preferred by the Appellant,

had disclosed the cancellation of the provisional acceptance by

order  dated  07.05.2005.   There  shall  likewise  be  a

presumption with regard to the issuance and delivery of the

same to the Appellant and it is not its case that no such order

was  ever  made  or  issued.   The  belated  challenge  to  the

cancellation in Writ  Petition No.  867 of  2010 was therefore

rightly  rejected  by  the  High  Court  on  account  of  the

intervening  developments  with  regard  to  the  change  in

permissible usage of the land from commercial to residential.  

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11. The  change  in  permissible  land  usage  by  Resolution

No.6684 dated 20.10.2014 is a fundamental issue which goes

to  the  root  of  the  matter.    If  the  very  substratum of  the

advertisement has changed, a fresh tender is mandatory.  The

passage of thirteen long years since the advertisement is also

an  important  consideration.   The  Notification  dated

03.07.2017  issued  under  DCR  Regulation  33(5)  inter  alia

altering the FSI is at the final stage awaiting publication.  The

bid price today for that reason will also escalate considerably.

The  State  Government  and  MHADA have  denied  any  fresh

negotiated settlement with the Appellant.  The interim order of

this  Court dated 04.09.2014 was not  a carte  blanche for  a

mandatory settlement with the Appellant.  The High Court has

noticed  that  the  value  of  the  property  today  would  be

approximately 75 crores.  In the land starved city of Mumbai,

the settlement of any government land, for a housing project,

has to be by public auction only, so as to fetch the best price

in the larger public interest.   

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12. The  Respondent  has  only  itself  to  blame  for  its  woes,

based on a conduct that cannot be countenanced in law.  It is

therefore not entitled to any interest on the deposit made by it

which shall be refunded by MHADA within four weeks.  The

Appellant is found to have been wronged, but must bear part

of the blame for laches on its part also.  It is therefore held

entitled to interest @ 8% on the deposit made by it including

the earnest money, only till 24.06.2005, to be paid within six

weeks.  

13.  In the entirety of the matter, all the appeals lack merit

and are dismissed.  

………………………………….J.  (Ranjan Gogoi)   

……….………………………..J.    (Navin Sinha)   

New Delhi, November 13, 2017.

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