Friday, 3 June 2016

Leading Judgment on procedure to be followed by lower court after case is remanded to it

Binding Nature of Remand Order :
83. It is fairly stated that power of jurisdiction
of the Court lower in hierarchy after remand, depends on
specifications of the remand order. Whether the order of
remand lays down any limits of enquiry to be made by the
Court lower in hierarchy that Court has no jurisdiction
to entertain any question which falls outside those
limits. In other words, where the Court passes
restricted order of remand it is not open to any of the
parties or any Court to enlarge the scope of the remand
order, that too, by a side window. If such course is
permitted, it would be a destructive of all judicial
discipline and will strike at the root of the efficacy
and binding nature of an order of a superior Court on the
parties to a dispute and the necessity of a sub-ordinate
Court to faithfully implement an order of the superior
Court.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9467 OF 2005
 Popcorn Entertainment Corporation,

V/s.
The City Industrial Development
 Corporation, 
CORAM : V.C.DAGA and
 MRS.MRIDULA BHATKAR, JJ.

DATE OF JUDGMENT : 1st September 2009.
Citation:2009(6) ALLMR133

The first and second petitioners M/s.Popcorn
Entertainment in W.P.No.9467/2008 ( M/s.Popcorn for
short) and M/s.Platinum Entertainment in W.P.No.9468/2008
( M/s.Platinum for short) were allotted plot of lands by

respondent No.1 The City and Industrial Development
Corporation ( CIDCO for short) for erecting
entertainment complex in Navi Mumbai. Whereas third
petitioner - M/s.Platinum Square Trust in W.P.No.
3423/2006 ( Platinum Square for short) was allotted plot
of land for establishment of country club. The said
allotments were cancelled by CIDCO. The petitioners have
challenged the said orders of cancellation through these
petitions filed under Article 226 of the Constitution of
India.
2. The facts giving rise to these petitions are
almost similar. The questions of law raised are
identical. Rival submissions made are common to all
petitions. Common written submissions are circulated by
the parties. However, the petitions filed by
M/s.Popcorn and M/s.Platinum Entertainment are the
subject matter of remand order passed by the Hon ble
Supreme Court, whereas third petition, filed by
M/s.Platinum Square is coming up for consideration before
this Court for the first time along with other two
remanded petitions since the facts and issues involved
are common. It has become necessary to state the facts
separately in each petition for the sake of clarity and
to demonstrate common thread running between them
requiring identical judicial approach. But, before we do
so, we may point out the facts common to all in relation
to the source of power of allotment of land by CIDCO and
reasons for cancellation of allotments made in favour of
the petitioners.

Facts Common to All :
3. The respondent No.1 CIDCO has been nominated
as new town planning authority for the new town of New
Bombay. The respondent No.2 is the Managing Director of
respondent No.1. Respondent No.3 is the State of
Maharashtra, who is having ultimate authority and power
to control and regulate the activities of planning and
development under the Maharashtra Regional and Town
Planning Act, 1966 ( MRTP Act for short)
4. In exercise of powers conferred by sub-clause
(a) of clause (1) of section 159 of the MRTP Act, the
CIDCO being new town development authority for the area
comprised in the site of New Bombay under sub-section
(3A) of section 113 of the said Act, has with the
previous approval of the State Government published in
the Maharashtra Government Gazette Part IV0C on 26th July,
1979 the New Bombay Disposal of Lands Regulations, 1975
( the Regulations for short).
5. The aforesaid regulations, inter alia, provide
for the demarcation of plots vested in the Government by
CIDCO into disposable plots having regard to their size
and use. The said regulations also make provision for
conditions of lease, mode of disposal and for grant of
land for religious, educational, charitable and public
purposes. For the present purpose, regulation 4 of
Chapter IV which provides for mode of disposal is
material. We may quote the same.
4. Manner of disposal of land: The
Corporation may dispose of plots of land
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by public auction or tender or by
considering individual applications as the
Corporation may determine from time to
time.
6. Suffice it to say that in exercise of the above
powers the plot of lands were allotted to the
petitioners by CIDCO and after receipt of full
consideration, CIDCO executed agreements of lease in
favour of two petitioners, viz. M/s.Popcorn and
M/s.Platinum. Though the entire consideration was paid
by the third petitioner- M/s.Platinum Square to CIDCO,
the possession of the plot was to be handed over to it
only after its registration as society and/or charitable
trust as the case may be.
7. The State Government subsequent to the confirmed
allotments appointed the Additional Chief Secretary,
Government of Maharashtra Dr.D.K.Shankaran to go into the
question of validity of the allotments of plots during
the tenure of the Managing Director of CIDCO, one
Mr.V.M.Lal. Dr.D.K.Shankaran, after conducting discrete
enquiry, submitted his reported on 31st March, 2005. The
State Government vide its letter dated 15th April, 2005
forwarded this report to the CIDCO with direction to
implement the recommendations made by Dr.D.K.Shankaran
in his report ( Shankaran Report for short).
8. The show cause notices were issued by the CIDCO
on the basis of the above report to the petitioners
without making any allegations of fraud,
misrepresentation or undue influence on the part of the
petitioners in the matter of allotment of plots. The
substance of the notices is that the allotments were made
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without inviting public tenders and the concluded
agreements were void on the thrust of section 23 of the
Contract Act, 1872 being opposed to the public policy.
9. The aforesaid show cause notices were replied by
the petitioners by their separate replies requesting
therein to supply copy of the Shankaran Report contending
that in absence of report it was not possible for them to
effectively reply the show cause notices. The
petitioners also alleged breach of principles of natural
justice and raised other legal and factual contentions
reiterating their specific request for supply of copy of
the Shankaran Report which had been heavily relied upon
by the CIDCO in its show cause notices.
10. It appears that the CIDCO without furnishing
copy of the Shankaran Report passed impugned orders
cancelling allotment of plots mentioning therein that
the Board of Directors of CIDCO had found themselves in
substantial concurrence with the findings recorded by
Dr.D.K.Shankaran in its enquiry. The impugned orders
further mention that the agreements signed by the CIDCO
were void ab initio under section 23 of the Contract Act
as the tenders were not invited and that the allotments
were made in violation of Article 14 of the Constitution
of India. The petitioners were called upon to remain
present on the site to hand over peaceful possession of
the subject plots. It also provided that on the
surrender of the plot, CIDCO would repay the amount of
consideration to the petitioners received by it on
account of premium without interest.
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11. Being aggrieved by the aforesaid orders, the
petitioners have filed these three separate petitions
detailed hereinbelow.
12. Two petitions out of three, i.e. the petitions
filed by M/s.Popcorn and M/s.Platinum Entertainment came
up for hearing before the learned Division Bench
presided over by Shri V.G.Palshikar, J. (as he then was).
The petitions were heard and dismissed by an order dated
30th June, 2006 relegating the petitioners to have an
alternate efficacious remedy by way of civil suit.
13. Being aggrieved by the aforesaid order, both
petitioners approached the Hon ble Supreme Court by way
of S.L.P. The Apex Court, on 24th July, 2006, issued
notices returnable within six weeks and stayed
dispossession of the subject petitioners with further
direction directing them not to put up any construction
until further orders. Later on the leave to appeal was
granted. After hearing the parties to the appeal, the
Apex Court vide its judgment and order dated 29th
February, 2007 was pleased to hold that the writ
petitions were maintainable and that an error was
committed by this Court in relegating the petitioners to
the civil Court. The matters were remanded to this Court
for decision on merits. The Apex Court while remanding
the matters expressed its opinion on the rival
contentions raised by the parties, the details of which
are referred in the latter part of the judgment so as to
maintain proper sequence. That is how, all these matters
were placed before us for final hearing.

The Factual Matrix :
14 The factual matrix giving rise to each petition
is sketched hereinbelow:
W.P.No.9467/2008 :
15. The petitioner made an application on 22.2.2004
requesting for allotment of plot reserved for multiplex.
On 8.6.2004, the petitioner made a request for allotment
of the plot in Airoli for setting up multiplex-cumauditorium-cum-entertainment
centre. CIDCO, in response
to the said application, requested the petitioner to
submit a project defining their future built-up
activities. The petitioner submitted detailed project
report. CIDCO, by their letter of intent, requested the
petitioner to pay an EMD of Rs.20,77,000/- within 15 days
from the receipt of the letter to enable the Board to
consider the allotment in favour of the petitioner. The
petitioner accordingly made EMD on 29.6.2004. On
29.7.2004, CIDCO approved the allotment of Plot No.2,
Sector 11, Airoli in favour of the petitioner as the
Board had not got any response for similar plots in
public tender. The total lease premium in respect of the
plot was Rs.2,07,70,000/- and the petitioner was directed
to pay the balance amount of Rs.1,86,93,000/- by
14.9.2004. The allotment was made in terms of the New
Bombay Land Disposal Regulations, 1975 and also in terms
of the Land Pricing and Disposal Policy of CIDCO under
which the land could be allotted to any person by
considering individual application at the reserved price
fixed by CIDCO. On 16.8.2004 and 13.9.2004, the

petitioner paid Rs.1,86,93,000/- as demanded. On
15.10.2004, CIDCO after inspection of the plot issued a
corrigendum asking the petitioner to pay a further sum of
Rs.53,236/- being the additional amount due to the
marginal increase in the demarcation of the plot. The
petitioner paid the balance amount of Rs.53,236/-,
thus, making a total payment of Rs.2,08,22,420/- being
the full and final payment in respect of allotment in
favour of the petitioner as demanded by CIDCO. An
agreement to lease was entered into with CIDCO in respect
of the plot allotted to the petitioner.
16. CIDCO, on 1.8.2005, issued a show cause notice to
the petitioner regarding the plot at Airoli seeking to
cancel the agreement to lease executed in favour of the
petitioner. The petitioner submitted reply to the show
cause notice. The petitioner also sought information
from CIDCO under the Right to Information Act on
21.12.2005 / 3.4.2006 / 4.4.2006 / 13.4.2006 / 20.4.2006
regarding allotment to various parties and the details
thereon.
17. The petitioner on 28.10.2005, approached this
Court against the cancellation order dated 18.12.2005 by
way of present petition. The petition was listed for
hearing on 2.1.2006 and this Court granted stay to the
operation of the order dated 18.12.2005. Parties were
asked to file their reply and rejoinder etc. in the
petition. The matter was listed on 17.5.2006 for hearing
and thereafter it was heard and dismissed in limine by an
order dated 30th June, 2006 detailed hereinafter.

18. The petitioner made an application for allotment
of plot on 18.5.2004 for construction of a multiplex at
Kharghar Railway Station. The first respondent, the City
Industrial Development Corporation (in short CIDCO )
asked the petitioner to pay an EMD of Rs.20 lakh being
10% of the tentative price of the plot in order to
consider the application of the petitioner. The
petitioner deposited the said amount of EMD immediately.
CIDCO, vide its Board resolution dated 3.6.2004, approved
the allotment in favour of the petitioner considering the
fact that there was no multiplex in the area and the
earlier effort of CIDCO to advertise for such plots had
met with no response. CIDCO issued allotment later in
favour of the petitioner asking the petitioner to pay Rs.
1,80,00,000/- being the balance price of the plot. The
appellant made two separate payments of Rs.90 lakh each
towards the balance price of the plot on 16.8.2004 and
19.8.2004. The petitioner paid a sum of Rs.20,00,600/-
being the other charges demanded by the respondent. The
petitioner was asked to pay a further sum of Rs.65,096/-,
which the petitioner paid immediately. CIDCO
unilaterally decided to ask the petitioner to pay a
further sum of Rs.20 lakh by enhancing the rate at which
the plot was to be allotted to the petitioner from Rs.
2500 per square meter as demanded in the allotment letter
to Rs.2750 per square meter because the plot of the
petitioner was on a 24 meter road. The petitioner on
17.11.2004 paid a further payment of Rs.20 lakh along
with Rs.2,96,078/- plus Rs.4957/- being the additional
cost and the other charges. On 14.1.2005, the petitioner
paid a further sum of Rs.19,828/- being the sum demanded

by the respondent. The petitioner on 17.1.2005 entered
into an agreement to lease with the respondent for the
allotment of the plot. On 28.2.2005, CIDCO being the
development authority of the area issued commencement
certificate to the petitioner permitting the petitioner
to start construction.
19. On 14.7.2005, the petitioner received a show
cause notice seeking to cancel the allotment in favour of
the petitioner on the ground that the allotment was void
in view of Section 23 of the Contract Act as being
opposed to public policy. The main ground in the show
cause notice was that the allotment was without issuance
of tender and was opposed to public policy. On
27.7.2005, the petitioner submitted reply to the show
cause notice. On 16.12.2005, CIDCO issued an order
cancelling the agreement to lease and sought to resume
the possession of the plot.
20. With the above facts, the petitioner approached
this Court on 28th December, 2005 with the present
petition against the impugned order of cancellation dated
16.12.2005 and this Court granted stay to the order dated
16.12.2005 and adjourned the matter for further hearing
on 4.1.2006.
21. The petitioner, vide reference dated 8.3.2006 of
CIDCO, under the Right to Information Act, 2005, has
asked them to supply information regarding the allotments
made by the Social Service Department without any
advertisement i.e. by considering individual
applications. On 16.3.2006, the petitioner filed
rejoinder before this Court pointing out further

information sought under the Right to Information Act, so
as to demonstrate that the allotment in favour of the
petitioner was completely in order and was made in terms
of the Land Pricing and Land Disposal Policy and also
that there was no loss caused to CIDCO in the said
allotments.
22. The petitioner sought another information from
the CIDCO authorities regarding methodology for allotment
of plots for service industries, warehousing,
multiplexes, etc. Again on 4.4.2006, the petitioner had
sought for further information in respect of 15 cases
similar to the case of the petitioner regarding whether
disposal was by tender or without tender, whether the
pricing policy was adopted or not, etc. Further
information was sought on 13.4.2006 regarding allotment
of social facility plots during April 2003 to March 2005.
CIDCO, vide its letter dated 13.4.2006, has informed the
petitioner that during April 2003 to March 2005, 27 plots
were allotted for the opening of schools, 9 plots were
allotted for opening of colleges, 5 plots were allotted
to charitable and religious institutions, 9 plots were
allotted to cultural organizations, 2 plots were allotted
for sports and 13 plots were allotted for social welfare.
23. In all, 65 plots were allotted under the category
of social facility. CIDCO has also confirmed that all the
allotments had been made without issuance of tender and
that all the above mentioned allotments had been made as
per Land Pricing and Land Disposal Policy of CIDCO i.e.
the same as was done in the case of petitioner. None of
these allotments have been cancelled by CIDCO till date.
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24. On the above backdrop, the petitioner is
contending that the entire basis for seeking to cancel
the petitioner s plots is illegal and the same cannot
stand to the test of judicial scrutiny.
W.P.No.3423/2006 :
25. The petitioner made an application on 4th
December, 2003 through its Managing Director requesting
for allotment of plot of land admeasuring 80,000 sq.mtr.
at Kharghar hill for establishment of country club. The
first respondent CIDCO having a plot of land earmarked
for similar purpose, considered the request of the
petitioner and called upon the petitioner to pay Rs.39.52
lakh on or before 20th April, 2004 before 20th April, 2004
constituting 10% of the value of the plot as EMD so as to
enable the CIDCO to place the proposal of the petitioner
before the Board of Directors. CIDCO further requested
the petitioner to submit registration certificate either
under the Trust Act or the Society Registration Act
before allotment/ possession of the land so that the case
of the petitioner could be considered for allotment at
subsidized rate in terms of the policy; otherwise
commercial rates were to attract for such allotment.
The petitioner in terms of the letter of CIDCO deposited
a sum of Rs.39.52 lakh with them.
26. The petitioner got its trust deed registered on
14th May, 2004; wherein six Trustees were appointed.
Amongst others, objectives of the Trust are to establish
and support, maintain and run sports club, gymnasium,
health club, amusement park, yoga centre, water sports
etc. and to carry out activities relating thereto. One
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of the trustees of the Platinum Square Trust vide his
letter dated 18th May, 2004 addressed to the Assistant
Charity Commissioner, Thane gave his no objection for the
Platinum Square Trust to use his address as registered
address of the Trust.
27. The petitioner was alloted 50,350 sq.mtr. Of
land by CIDCO for a total sale consideration of Rs.
3,43,70,800/-. Out of the said amount of consideration,
the petitioner had already deposited Rs.39.52 lakh as
such the petitioner was directed to deposit Rs.
1,52,09,400/- in two installments i.e. on 30th July, 2004
and 29th August, 2004 being the balance lease premium
payable in respect of the subject plot. In the allotment
letter, it was specifically mentioned that payment of
lease premium in a stipulated period is an essence of
concluded contract. It was further provided in the
allotment letter that extension of time could be granted
which would be up to 3 months for payment of the first
installment and up to 16 months for the payment of the
second installment. It was provided therein that up to 3
months the petitioner would be charged 13% interest and
beyond 3 months the petitioner would be charged 16%
interest for the extended period of time.
28. The petitioner, on 15th September 2004, paid the
first installment of Rs.1,52,09,400/- within the extended
time permitted under the allotment i.e. within 2 months
from the due date and within 3 months from the date of
allotment of the plot. The petitioner, on 3rd May, 2005,
wrote letter to the CIDCO for extension of time for
making payment of second installment up to December,
2005. Clearly in terms of the allotment letter, the
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petitioner could ask extension of second installment up
to 29th December, 2005.
29. The petitioner Trust was registered under the
Bombay Public Trust Act, 1950 on 19th April, 2005. The
petitioner submitted documents to CIDCO on 25th May, 2005
evidencing registration of the Trust.
30. The petitioner, on 20th July, 2005, received show
cause notice seeking to cancel the allotment made in
favour of the petitioner on the basis of Shankaran
Report.
31. The petitioner, on 3rd August, 2005, submitted
its detailed reply to the show cause notice challenging
the cancellation of allotment of plot, reiterating that
the allotment was in accordance with law as such it could
not be cancelled.
32. The petitioner, on 29th December, 2005, wrote
letter to the Marketing Manager of CIDCO requesting him
to accept payment of second installment being the last
date up to which the extension could be granted under the
allotment. However, CIDCO refused to accept the payment.
The petitioner on the same date wrote another letter
recording the fact that CIDCO has refused to accept the
second installment and that the petitioner would not be
liable to pay any further interest from the said date and
that the allotment could not be canceled on the ground
that the payment has not been made by the petitioner.
The petitioner also informed the respondent that they
would be responsible for any damages, liabilities arisen
out of nonacceptance of payment.
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33. The petitioner was served with the order dated
28th April, 2005 canceling allotment of plot made in
favour of the petitioner.
34. Being aggrieved by the aforesaid order of
cancellation, the petitioner approached this Court on 11th
May, 2006 by way of present petition filed under Article
226 of the Constitution of India. This Court by an order
dated 17th May, 2006 stayed the impugned action and,
thereafter, on 22nd March, 2007 admitted petition for
final hearing.
Rival Submissions Common to All :
35. Heard learned counsel appearing for the
respective parties. Rival submissions advanced by them
are sketched hereinbelow:
36. The gravamen of the submissions of the learned
senior counsel for the petitioners is that the allotment
made in favour of the petitioners was cancelled by CIDCO
by issuing show cause notices wherein CIDCO had referred
to Shankaran report in relation to the petitioners
alleging that in the allotment in favour of the
petitioners, CIDCO had suffered losses and in the same
show cause notices, according to the petitioners, the
only ground seeking to cancel the allotment was nonissuance
of tender before making allotment in favour of
the petitioner and the same being void under section 23
of the Contract Act was opposed to the public policy.
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37. It was urged that in the case of Popcorn
Entertainment and Platinum Entertainment when the Writ
Petition was initially filed in this Court the same was
dismissed by this Court relegating the petitioner to seek
alternative remedy by filing a civil suit, which was
challenged by the petitioners before the Hon'ble Supreme
Court and the Hon'ble Supreme Court by a detailed
judgment reported in 2007 (9) SCC 593 allowed the Civil
Appeal filed by the Petitioner. According to the
petitioners, the Hon'ble Supreme Court noted extensively
the arguments canvassed before the Court and while
remanding the matter specifically held that the arguments
advanced should be taken into consideration by the High
Court before deciding the instant writ petition. The
Hon'ble Supreme Court in para 48, however was pleased to
set aside the order of CIDCO seeking to resile from a
concluded contract in favour of the appellants. The
Hon'ble Supreme Court in para 49 was further pleased to
record as under :
49. It is also pertinent to mention that
CIDCO in the show-cause notice has taken the
ground of non-issuance of tender as the only
basis for cancelling the allotment and CIDCO in
the final order has also confined itself to the
non-issuance of tender as the ground for
cancellation but in the reply to the writ
petition, CIDCO is seeking to add further
grounds to justify the order of cancellation,
which is clearly not permissible in terms of the
law laid down by this Court in several of its
decisions.
38. According to the learned senior counsel, in terms
of the clear observations of the Hon'ble Supreme Court in
paras- 48 and 49, it is not open to CIDCO to argue
anything further or to enlarge the scope of the writ
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petition by trying to argue any other ground other than
the non-issuance of tender as the basis for cancellation
of the allotment.
39. According to the learned senior counsel, the
superior court, normally, while remanding the matter
mentions that the lower court be not, in any manner,
influenced by the observations made in the remand order.
That is how, in the instant cases, the Supreme Court has
in paragraph 50 & 51, specifically mentioned that the
High Court should consider all the submissions made
before the Hon'ble Supreme Court while deciding the
matter afresh on merit.
40. Learned senior counsel addressed us on merits on
the four aspects of the matter categorized hereinbelow:
I. Whether CIDCO is justified in canceling the
allotment as being opposed to public policy under Section
23 of the Contract Act on the only ground that tender had
not been issued prior to making allotment in favour of
the petitioner?
a. It is urged that the New Bombay Land Disposal
Rules are the specific rules governing the disposal of
land to be done by CIDCO. Rule 4 of the said rules which
is quoted in opening part of this judgment clearly
provides that CIDCO has the authority to dispose plots of
land by public auction or tender or by considering
individual application as the corporation may determine
from time to time.
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b. It is further urged that the CIDCO has been
relying upon the aforesaid rule in this court to justify
the allotments made in favour of commercial complexes,
societies as well as sports complexes saying that such
allotment made without issuance of tender were justified
as being within the power vested in CIDCO under Rule 4 of
the NBDL rules. The affidavits filed by CIDCO in respect
of allotment above are in the following cases:
(i) Sunil Patil (P.I.L. No. 45879 of 2003)
K. Raheja Corporation
(ii) Shakti Commercial Premises Society
(W.P. No. 3970 of 2005)
(iii) Sanjay Damodar Surve Vs. D.Y. Patil
Sports Academy (PIL No.140/2004)
(iv) Public Concern for Government Trust
(W.P.No.43 of 2005)
Amey Co-Operative Housing Society
Limited.
Amongst the four writ petitions mentioned above,
three were cases where Shankaran had made adverse
comments stating that CIDCO has suffered huge losses in
the said allotment as the same had been done without
inviting tenders. The loss in each of the cases was as
under.
 Name Loss Amount
Shakti Commercial Rs.35.00 crore
Amey Co-Operative Rs.40.00 crore
K.Raheja Rs.49.75 crore
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According to the petitioner, all the above
allotments have been regularized by CIDCO and no action
whatsoever has been taken to cancel the above allotments.
c. Learned senior counsel for the petitioners urged
that in view of the fact that the rules provide for three
methods of disposal i.e. by tender, by public auction or
by considering individual applications, CIDCO vide
various board resolutions have specifically provided the
exact method of disposal for various types of plots.
CIDCO accordingly has framed the Land Pricing and Land
Disposal Policy as approved by various board resolutions
wherein various categories of plots are mentioned like
for instance residential use, commercial use, use for
public utility etc. In the case of commercial plots
where FSI 1.5 is permitted the land price rate determined
under the policy is 450% of the reserve price and the
method of disposal is by tender and in the alternative at
fixed rate. Similarly, for allotment of multiplexes the
rate specified under the policy is at reserve price and
the method of disposal is upon request at fixed rate or
by competitive bidding. The two different methods of
disposal between a commercial allotment and the allotment
for multiplex is significant because in the case of
commercial allotment, by tender is the first method of
disposal prescribed and at fixed rate is the alternative
method of disposal prescribed whereas in the case of
allotment for multiplex/auditorium on request at fixed
rate is the first method and by competitive bidding is
the alternative method of allotment.
d. Learned senior counsel further urged that
similarly, in the case of allotment for
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stadium/recreation activity/amusement park/golf course
i.e. Allotment in the case of Platinum Square Trust the
land price of open area/running track is specified to be
10% of the reserve price and of area used for
construction is to be at 50% of the reserve price and the
method of disposal is only upon request at fixed rate
from the registered trust/registered under the Public
Trust Act/SRA. In view of the above, it is urged that
the allotments in favour of the petitioners were clearly
in conformity with the rules and also in conformity with
the Land Pricing and Land Disposal Policy framed by CIDCO
for allotment of various types of land in the Navi Mumbai
area.
e. It was further submitted that the Supreme Court
in the case of Chairman & MD, BPL v. S.P. Gururaja,
2003 (8) SCC 567; Printers (Mysore) Ltd. v. M.A.
Rasheed & Ors., 2004 (4) SCC 460 has clearly held that a
development authority while allotting land can do so
without calling for tender or without inviting offers
from the general public if the statutory regulations
regarding disposal of land by public authority permit the
authority to do so. In other words, if the authority
under the statutory regulations for disposal of land has
the right to consider individual applications for making
the allotment, then the same cannot be faulted on the
ground that no tender has been called for before making
the said allotment. Reliance is placed on the Supreme
Court judgment in the case of Kasturi Lal Lakshmi Reddy
v. State of J & K reported in 1980 (4) SCC 1; wherein the
Hon'ble Supreme Court has held that the State while
considering a proposal is not required to ask the
proposer to wait for an advertisement and apply against
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the same instead of considering the proposal directly in
the larger interest of the State.
f. It was also pointed out during the course of
arguments that a similar case like that of the petitioner
was the case of Sunil Pannalal Banthia, whose allotment
had also been cancelled on the only ground that the same
had been made without inviting tenders. In that case
also a Division Bench of this Court had dismissed the
writ petition by relegating the petitioner to the
alternative remedy of filing a civil suit against which
order the petitioner in that case had preferred a special
leave petition which was tagged along with the cases of
first two petitioners as ground for cancellation in both
the cases were identical. While referring to the
judgment in the case of Sunil Pannalal Banthia, reported
in 2007 (10) SCC 674 paras- 3,4,5,6,9,11,12,14,17,
20,21, and 22; wherein the Supreme Court has held that
once an allotment had been made in favour of a party,
CIDCO has no right thereafter to cancel the allotment on
the ground that no tenders had been invited. The Supreme
Court also held that the CIDCO had power to make
allotment without calling for tender under rule 4 of the
NBDL Rules and thus also it could not be said that the
allotment in favour of Sunil Pannalal Banthia was in any
manner contrary to the rules for making such allotment.
According to the learned senior counsel, the subject
judgment also deals on indoor management very
specifically. It was also sought to be pointed out that
the allotment in favour of Sunil Pannalal Banthia was a
commercial allotment where the method of disposal was
different under the policy formulated by CIDCO i.e. where
tender was the first option and on request was the second
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option still the Hon'ble Supreme Court quashed the
decision of CIDCO in seeking to resile from the allotment
in favour of the petitioner therein.
According to the petitioners, the counsel for the
CIDCO had opposed the matter before the Supreme Court and
had sought remand of the matter on the ground that the
case of Banthia was identical to the case of the first
two petitioners herein; where the Supreme Court had
already remanded the matter to the High Court, but the
said ground was rejected by the Supreme Court while
allowing the Special Leave Petition. It is, thus, the
case of the petitioner before this Court that once CIDCO
had taken a specific stand before the Supreme Court that
the case of the petitioner is identical to the case of
Banthia it is not open to CIDCO to argue before this
Court to the contrary.
g. It was further urged that the allotment in favour
of the petitioner had been made by following the
procedure prescribed for the same and that the allotment
had been made by the Board of Directors of CIDCO by
considering all objections raised during deliberations
and in fact in the board note it was mentioned in the
case of Popcorn Entertainment as well as of Platinum
Entertainment that no useful purpose would be served in
inviting tenders as in the recent past there was no
response to global and national tenders for a multiplex
in the developed Vashi node as against Airoli and
Kharghar which were much less developed than Vashi.
h. It was also pointed out at the time of
hearing that a public utility plot has never been put to
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tender by CIDCO till date and the information in that
regard had been provided to the petitioners under the
Right to Information Act, for the period April 2003 to
March 2005 (during which period the allotments had been
made in favour of the petitioners). The learned senior
counsel while referring to the chart provided by CIDCO to
the petitioners under Right to Information Act,
specifically, relied on the specific mention that the
allotment to all the 56 allottees have been made without
inviting tenders as per Land Pricing and Land Disposal
Policy and the price charged is as per the policy as
approved vide board resolution mentioned in respect of
each of the allotment. These allotments were done in the
period of Mr.V.M.Lal as MD of CIDCO but this was not
scrutinized by Dr.D.K.Shankaran at all and even though
these allotments were made without tender not forming
part of the enquiry report.
i. It was also pointed out by the learned senior
counsel to this Court during the course of hearing that
no prior applicant had ever shown interest in respect of
the plot allotted to the petitioners and the said
information was also provided to the petitioners under
the Right to Information Act, in respect of M/s.Popcorn
and M/s.Platinum respectively. We may place it on record
that the material sought to be referred to and relied
upon by the learned senior counsel for the petitioners is
available on record.
j. It was also pointed out to us that on remand,
writ petition No.2275/1993 (S.K.Agarwal & Ors. Vs. CIDCO
& Ors) was listed along with the writ petitions filed by
the present petitioners wherein the cancellation had been
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done on the ground that no tender had been invited prior
to the making of the allotment and that the allotment was
in breach of section 23 of the Contract Act as such it
was opposed to public policy. The said writ petition
was also allowed by a Division Bench of this Court
comprising of Hon'ble Chief Justice and Justice Ranjana
Desai vide its order dated 2nd May, 2008, the copy of
which was also made available to us. In the said writ
petition a point was raised that the Banthia judgment
would not apply to that case because in Banthia's case
substantial construction had been done after the
allotment and on that basis the cases were
distinguishable, the learned Division Bench vide paras-
29,31,32 & 36 rejected the said argument and held that
in law the same will not make any difference while
setting aside the order of the CIDCO seeking to resile
from the concluded contract. According to the learned
senior counsel, in the petitioners' case also CIDCO is
trying to argue & add the same distinguishing feature as
one of the grounds for not following the judgment in the
case of Sunil Pannalal Banthia. In this submission, this
court need to follow the judgment of the learned Division
Bench delivered in the case of S.K.Agarwal (supra)
k. It was urged that the allotment in favour of
Popcorn and Platinum Entertainment were cancelled on
16.12.2005 and 18.12.2005 respectively whereas Mr. Ashok
Sinha, the Managing Director of CIDCO in reply to the
Accountant General of Maharashtra to an audit para on 21st
April, 2006 (which is produced at pages 42 and 46 of
compilation-1), has clearly justified the allotment both
on the ground that no tender were invited and also on the
ground that price was correctly charged from the
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petitioners and that the loss alleged by Shankaran was
without any basis. According to the petitioners,
Mr.Ashok Sinha, while justifying the allotment, clearly
distinguished a public utility allotment for multiplexes
and a commercial allotment saying that the profitability
in both the allotments being substantially different the
prices for these two allotments were not comparable in
any manner. The said justification, according to the
learned counsel, was done by Mr.Sinha without even
noticing the fact that public utility allotment for
multiplex was only with 1 FSI whereas a commercial
allotment was with 1.5 FSI because such fact is the
further distinguishing feature between a commercial
allotment and the allotment made for public utility
(multiplex). Shri. Sinha has further confirmed in his
letter to the Accountant General that the allotment has
been done strictly in terms of the Land Pricing and Land
Disposal Policy which has been framed under the New
Bombay Disposal of Land Regulations, 1975 which in turn
had been published in the Government Gazette on the
approval of the State Government.
l. It was further argued before this Court
that cancellation under Section 23 of the Contract Act is
not a power available to the executive as the Contract
Act, specifically, confers the said power upon the
courts. A judgment of the Hon'ble Supreme Court on the
subject reported in 2005 (12) SCC 77 was relied upon and
paras- 36, 37, 41, 42, 50 and 63 thereof were pressed
into service to contend that the said power is only
available to the Court and on the concept of separation
of power, the said power is not exercisable by the
executive unilaterally without reference to the Court.
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II. Whether CIDCO has suffered any loss in making the
allotment in favour of the petitioner?
a. It was specifically contended that the said
ground is not available to CIDCO in the case of Popcorn
Entertainment and Platinum Entertainment in view of the
specific observation of Hon'ble Supreme Court in
paragraph 49 of its judgment quoted hereinabove. It is
also not available in the case of Platinum Square Trust
to the CIDCO because in the cancellation order there is
no whisper of the Shankaran report and CIDCO has accepted
the same while making the cancellation and hence the
question of considering any loss does not arise at all in
any of the three writ petitions.
b. Without prejudice to the above contentions made
regarding the fact that the question of loss cannot be
gone into by the High Court, the petitioners have also
urged that, in fact, there was no loss caused to CIDCO in
making the allotments to the petitioners.
c. The petitioners have again reiterated that all
the public utility allotments by CIDCO have been made not
only without inviting tenders but also strictly at the
rates specified under the Land Pricing And Land Disposal
Policy and the method of disposal also under the same
policy is by considering individual application at the
reserve price, there is no question of any loss to CIDCO
in making the allotment.
d. Learned senior counsel for the petitioners
relying upon para-48 of the judgment of the Hon ble
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Supreme Court in the case of M/s.Popcorn and M/s.Platinum
urged that it is not open to CIDCO to contend that there
has been any loss caused to CIDCO while CIDCO is trying
to provide entertainment facility in an area which is
completely devoid of the same.
e. Learned senior counsel also urged that as
regards the allotment in case of M/s.Popcorn and
M/s.Platinum, the reserve price of CIDCO was Rs.2,000/-
and Rs.1,800/- respectively, and in the case of Mohan
Entertainment where the reserve price was Rs.3,220/-, the
allotment had been made at 25% above the reserve price
which should be Rs.4,025/- rounded off to Rs.4,000/- and
in the case of Popcorn Entertainment upon adding the 25%
the reserve price became Rs. 2,500/- the allotment was to
be made at Rs.2,500/- as done in Mohan Entertainment
however a further amount of Rs.250/- was added being 10%
of the effective sale price on the basis of the road
width available to such allottee. Similarly in the case
of Platinum Entertainment the reserve price was Rs.
1,800/-, 25% thereof was Rs. 450/- and further 35% was
added with the road width making the allotment price to
be made at Rs. 3037.50 which was rounded off to Rs.
3,100/- per sq.mtrs, which rounding off was on the higher
side as against rounding off in the case of Mohan
Entertainment which was on the lower side. Thus, in the
case of Platinum Entertainment the price worked out was
Rs.3,037.50 rounding off at Rs. 3100/- whereas in the
case of Mohan Entertainment was Rs.4,025/- which was
rounded off to Rs.4,000/-.
f. Learned senior counsel for the petitioners urged
that as regards the so called losses referred to by
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Dr.D.K.Shankaran, the petitioners came to know the basis
thereof after the remand order by the Hon'ble Supreme
Court when another party had asked for the said
information under the Right to Information Act and the
petitioners obtained the same from the said party. The
basis for calculating the loss as computed by
Dr.Shankaran is by comparing the allotment in favour of
the petitioners, which is a public utility having 1 FSI,
with the highest price obtained anywhere in the node in
respect of a commercial allotment having 1.5 FSI.
Similar calculation of loss had been done in the case of
Mohan Entertainment and, according to the Shankaran
Report, the highest price for commercial plot in Vashi
had gone at Rs.21,831/- as against Rs.18,490/- in Airoli
and Rs.14,475/- in Kharghar. The loss reported by
Shankaran Report, accordingly, on that basis was Rs.23
crore in the Mohan Entertainment, Rs.10 crore in the
Platinum Entertainment, Rs.9.5 crore in the case of
Popcorn Entertainment. Thus, according to the
petitioners, the computation of loss is without basis as
two unequals have been compared and the entire reasoning
for calculating the loss cannot stand to the test of
judicial scrutiny.
g. Moreover as regards the Shankaran report it was
specially pointed out that the said report had been
prepared ex-parte i.e. Without issuing notice to the
petitioners and along with the show cause notices issued
to the petitioner also the said report was not furnished
in spite of reliance having been placed on the same in
the show cause notices and the petitioners had
specifically, asked for the said report in their reply to
the show cause notices and the same was not provided to
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the petitioners before passing the impugned cancellation
orders. In this view of the matter, it is urged that the
Shankaran report could not, in any manner, be utilized
for any purpose whatsoever in order to find fault with
the allotment made in favour of the petitioners.
h. It was also sought to be urged that when the
learned Division Bench of this High Court while hearing a
public interest litigation questioning the allotment in
favour of Amey Co-operative had passed some strictures
against the State Government, the State of Maharashtra
had filed the Special Leave Petition in the Supreme Court
seeking to expunge those strictures and in Supreme Court
a specific stand had been taken by the learned Advocate
General of the State of Maharashtra saying that the
Shankaran Report was only a preliminary report meaning
thereby that no action could have been taken on the basis
of the same. The statement of the learned Advocate
General was pointed out to us by referring to paragraph
44 of the judgment of the Hon ble Supreme Court in the
case of Amey Coop. Housing Society Ltd. v. Public Concern
for Governance Trust, (2007) 4 SCC 635.
i. It is also canvassed that the allotment in favour
of M/s.Platinum Square had been compared by Dr.Shankaran
to an allotment in favour of BARC to contend that CIDCO
has suffered losses to the extent of 11 crore. Once
again, according to the petitioners, Dr.Shankaran has
committed a grave mistake by comparing the allotment of
the petitioners, in which allotment, the petitioner
effectively gets 0.4 FSI as against the allotment in
favour of the BARC which gets 1 FSI for the entire plot.
There was no comparable data or allotment available to
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CIDCO or Dr.D.K.Shankaran for Country Club at Kharghar
Hill Plateau.
j. As regards the loss is concerned, it is also
submitted that the petitioners had applied to the CIDCO
under the Right to Information Act to find out as to
whether the allotment had been made as per the policy
prevalent and also at the price prescribed by CIDCO.
CIDCO, in reply to the query of the petitioner, has
categorically mentioned that the allotment was strictly
in terms of the Land Pricing and Land Disposal Policy and
at the price prescribed under the same hence no loss was
caused to CIDCO. The said answers are produced on record.
It was also pointed out to us that Dr.Shankaran had
reported loss in number of allotments pointed out by the
petitioners (data receive under RTIA from CIDCO itself)
varying from massive 63.55 crore, 49.75 crore, 22.60
crore etc. It was sought to be canvassed that in none of
the cases any recovery of loss have been made by CIDCO
and none of the allotments apart from the petitioners
have been cancelled, and that almost all the allotments
have been regularized. According to the petitioners,
they are the only one who are singled out. Hence the
impugned action of the CIDCO is bad in law.
III. Whether the allotment in favour of the petitioner
is in any manner arbitrary or unjustified?
It is not necessary to reproduce submissions made
on this count in view of the earlier submissions already
sketched; wherein reliance was placed on the assertion of
the CIDCO in reply to the RTI query wherein CIDCO has
replied that the allotment was made strictly as per the
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Land Pricing and Land Disposal Policy there is no
question of alleging that the allotment were in any
manner arbitrary or unjustified. According to the
petitioners, all the files of allotments had been moved
from all concerned departments like Marketing, planning,
Economics, MD and, Ultimately, Board of Directors, who
had finally approved the allotment considering need of
Entertainment facility in Navi Mumbai after due
discussions on all possible aspects. Hence the question
of arbitrary allotment is imaginary is the submission of
the petitioners.
General Submissions of the Petitioners :
41. The learned counsel for the petitioners also
relied upon the allotment in the case of Mohan
Entertainment claiming it to be similar allotment;
wherein loss of 23 crore had been reported by CIDCO and
which has been approved and regularized by CIDCO
contending that CIDCO is trying to justify the said
allotment by contending that the same had been done after
testing the market. According to the petitioners, the
said stand of CIDCO is misleading because the plot had
been put to tender in the year 1998-99; wherein the plot
did not receive any offer even at the reserve price
whereas the allotment in Mohan Entertainment was done in
2003 i.e. after four years of putting the same on tender
and this time at 25% above the reserve price meaning
thereby that between these four years demand in that area
i.e. Vashi area which is a developed Node of Navi Mumbai
has definitely increased. According to the petitioners,
in their case, the allotments were done in Airoli and
Kharghar in the year 2004 and that the said areas were
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similar to Vashi in the year 1998-99 and hence the
justification both in the case of Popcorn Entertainment
and Platinum Entertainment was that if no tenders have
been received in the developed node Vashi, no fruitful
purpose would have been served in going through the
tender route before making the allotment in favour of the
petitioners.
42. Learned senior counsel for the petitioners urged
that the CIDCO in the joint affidavit has mentioned that
the allotment in favour of the petitioners has been done
on concessional rate whereas, according to the
petitioners, the allotments have been done at the rate
prescribed by Land Pricing and Land Disposal Policy as
was done in Mohan Entertainment and hence, in the
submission of the petitioners, reference to the
concessional rates is clearly motivated and made only to
harm the case of the petitioners.
43. It is also the case of the petitioner that even
if the land is required for public utility, the
development authority has no right to resile from a
concluded contract in order to provide for the same as
has been held by the Hon ble Supreme Court in the case of
Corporation of the City of Bangalore Vs. Bangalore Stock
Exchange reported in 2003(10) SCC 212. In that case the
land in lease deed was sought to be converted into park
and the development authority wanted to cancel the lease
on that basis. The Supreme Court clearly held that if
the lease deed does not permit the said ground for
cancellation, the development authority has no right to
cancel the said allotment.
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44. In the instant case it was also pointed out by
the petitioners that under the agreement entered into
between the parties and CIDCO, no right to cancel the
allotment was available to the CIDCO on the ground
mentioned in the cancellation order. The malafide of
CIDCO in the case of the petitioners was further
established when in the case of Platinum Square Trust on
21st March 2006 itself CIDCO informed the petitioner under
the Right to Information Act that the allotment in favour
of the petitioner has been cancelled whereas the decision
of the board to cancel the same was taken on 3rd April
2006 (the relevant pages of the information supplied to
the petitioners are at pages 201 of the writ petition)
whereas from a perusal of the cancellation order at page
226 of the writ petition paper book as such, according
to the petitioners, it is clear that the board had
decided to cancel the same only on 3rd April, 2006.
45. In the submission of the petitioners, in case of
Platinum Square Trust the allotment letter itself
provided that the second installment could be paid on a
later date on payment of interest. The petitioner
availed the said offer vide petitioners letter dated 3rd
May, 2005 and in terms of the said offer the payment had
to be made by the end of December 2005. The petitioner
accordingly tendered the payment on 29th December, 2005
(available in the writ petition at pages 147-149) and
CIDCO refused to accept the same and when the same was
not accepted by CIDCO, the petitioner by letter of the
same date clearly wrote to CIDCO contending that no
interest thereafter was payable by the petitioner on the
said payment.
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46. In conclusion, learned senior counsel appearing
for the petitioners in all these petitions prayed for
setting aside and quashing the order of cancellation
passed by the CIDCO and prayed for reliefs in terms of
prayer made in the petition.
SUBMISSIONS OF CIDCO :
47. Mr.Hegde, learned counsel appearing for the CIDCO
in reply submitted that the petitioners contention that
the show cause notice mentions only the omission to
invite tender as the basis for issuance of the said show
cause notice is contrary to record. In his submission,
the show cause notices were issued on the grounds
mentioned in para 12 and 13 thereof, specimen of which
was referred to at page-65 of the W.P.No.9468/2005
reproduced hereinbelow:
12. The then Additional Chief Secretary
has observed in his findings with reference
to the land so allotted to you that this
allotment is made in an Arbitrary manner
without calling tenders which is peruse
illegal & void. Further, the then
Additional Chief Secretary reported that
the Corporation suffered financial loss of
Rs.938.00 lacs and recommended that the
financial loss caused to Corporation needs
to be recovered by cancellation of
allotments made in an arbitrary and illegal
manner or alternatively, if cancellation of
allotment is not possible due to various
reasons, the Government should direct CIDCO
to recover difference of price as per the
prevailing market rate to make good the
loss.
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13. The State Government has by its
letter No.CID-3304/PR/189/UD-10 dated 15th
April, 2005 copy annexed hereto informed
the Corporation of the findings and
recommendations of the then Additional
Chief Secretary and directed the
Corporation to proceed with the
implementation of such recommendations.
48. According to Mr.Hegde, Dr.D.K.Shankaran had
observed in the findings that the allotments to the
Petitioners were made in an arbitrary manner which were
per se illegal and void. Further it was mentioned that
the Corporation had suffered a financial loss of Rs.
1,031.13 lakh. The Respondent submits that in their
reply dated 31st January, 2006, it has been mentioned that
as per Shankaran Report it was necessary to allot the
plots by inviting tenders and testing the market. Had it
been so done, these plots would have fetched at least 5
times greater value than the actual value received. It
was also mentioned therein that Shri Nilesh Gala, who is
the proprietor of M/s. Platinum Entertainment, has used
the same modus operandi for obtaining allotment of plots
for country club at Kharghar and another multiplex plot
in Kharghar and that this is a case of favoritism, CIDCO
was found to have suffered a loss of Rs.10 crore in this
case.
49. It is further submitted that in the Shankaran
Report referred to in the show cause notice three grounds
were stated, viz. favoritism, non-issuance of tender and
loss caused to the Corporation. It is, thus, submitted
that the show cause notice was issued on all the three
grounds. It is further urged that the order of
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cancellation of the allotment specifically states that
the Board of Directors of the Corporation found itself in
substantial concurrence with the findings recorded by the
Dr.D.K.Shankaran. Thus, the order of cancellation of the
allotment is on all the three grounds mentioned above.
50. It is sought to be urged by Mr.Hegde that the
application was made by the petitioners to the Chief
Minister and the same was considered by the Board of
CIDCO. The agenda note and the resolution reveal that
there was no discussion about individual merit of the
allottee and only the need for a multiplex was sought to
be justified in the discussion. However, individual
merit of the allottee was not discussed which, according
to Mr.Hegde, is a pointer to show that the allotments
were made in arbitrary manner. That there was no reason
given for dispensing with the tender process and choosing
the petitioners for all the three plots of land.
51. Mr.Hegde urged that Chapter V of New Bombay
Land Disposal Rules, 1975 provides for allotment of land
for religious, education, charitable etc. purposes.
Though the allotment of plots of lands for construction
of multiplex are treated as allotment for public utility
purposes yet, in substance, qua allottees it is allotment
for commercial purposes.
52. In the submission of Mr.Hegde, the allotments
which are made for the purposes of social, educational,
charitable etc. do not entail any profit to the allottee,
however, multiplex is for commercial exploitation which
ensures profit to the allottees. In his submission,
the manner of disposal of lands enumerated in the said
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policy by and large suggest that most of the allotments
have to be made by inviting tenders or bids. It is, thus,
submitted that the allotment for plots at item 12A to 12H
referred to by the petitioners was on request at fixed
rate since they were not meant for any commercial
exploitation.
53. Mr.Hegde urged that allotment for plot for
multiplex falls under Item 12 (i) of the policy document
and it is to be allotted on request at fixed rate/by
competitive bid. CIDCO has, in the past, allotted a plot
for multiplex to Mohan Entertainment on application after
having failed to receive any response to the tender
floated on 2 occasions. This implies that CIDCO had
resorted to inviting tenders before considering
individual application. Reliance is placed on affidavit
of Shri D.L.N.Murty filed on behalf of CIDCO dated 6th
March, 2009 to point out that in the past 4 plots were
allotted for construction of Cinema Theater by inviting
tenders. It is further urged that the plot situated at
Belapur in sector 1 A was initially for Cinema cum
shopping complex. However, Mahtma Gandhi Mission was
allotted adjoining plot for construction of hospital and
they took objection with the concerned authorities as
such, the allottee Pratibha Builders were not able to
obtain necessary licence for running Cinema and
therefore user was changed from Cinema cum Shopping
Complex to commercial use with shops on the ground floor
and offices at upper floor. It is, thus, submitted that
the allotments made in favour of the petitioners were
illegal and there was no compelling reason for deviating
from such practice. Reliance is placed on the judgment
in the case of Haji T.M.Hasam, (1988) I SCC page 166
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to urge that nothing should be done by the state which
created an impression of favoritism and that, ordinarily,
these factors would be absent if the plots are sold by
public auction or by tenders. It was also urged by
Mr.Hegde that there may be situations necessitating
departures from the rule, but then deviation must be
justified by compulsion and not by compromise. According
to Mr.Hegde, in the instant cases no reasons have been
given for dispensing with the practice of inviting
tenders, particularly, which it is seen that 3 plots were
allotted to one individual. He urged that it is duty of
the court to exercise their power in case any illegality
is noticed in the allotment. Reliance is placed on the
judgment of the Supreme of Court Kasturilal Laxmi Reddy s
case reported in (1980) 4 SCC page 1.
54. Mr.Hegde while replying to the charge of certain
allotment made by the CIDCO without inviting tenders,
submitted that the allotments made are to the
institutions for construction of schools / colleges and
in some cases for religious, social welfare and cultural
and sports activities. In his submission, allotments
made to M/s Mohan Entertainment Pvt. Ltd, and D.Y.Patil
Sports Academy are not comparable as explained in the
affidavit filed on behalf of CIDCO.
55. It is submitted that the plots were mostly sold
by auction or by inviting bids. Reliance was placed on
the Resolution No.8714 dated 30th April, 2003. By the
said Resolution it was resolved that large size,
residential and commercial plots were to be sold by
auction. According to Mr.Hegde, the present plots are
also allotted for commercial purpose as the profit factor
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is the prime motive for seeking allotment of plot for
multiplex. The Corporation has filed additional Affidavit
of Mr. Murty dated 6.3.2009 in which Exhibit A refers to
the plots which have been sold for commercial use and
residential use during the period from 2004 onwards and
which are in the vicinity of the petition plots. In the
said Affidavit reasons for selling two plots by
application viz. Plot No.11/2/27 and plot No.20/1/ have
been explained. One of the plots was allotted to Well
Wishers which was also subject matter of enquiry by
Dr.Shankaran. The petitioners plots are also mentioned
in the said list.
56. Mr.Hegde urged that the allotments enquired into
by Dr.Shankarran were during the tenure of Mr.V.M.Lal
who was Managing Director of CIDCO and the details of the
cases which were dealt with by the CIDCO on the basis of
the said report are also enumerated. In the submission
of Mr.Hegde, the charge of the petitioners that they were
singled out for treatment is falsified by the fact that
about 14 allotments were cancelled by CIDCO. Mr.Hegde
also relied upon the affidavit filed along with the
minutes of the meeting in which the plots were allotted
to show that in the meeting held on 3rd June, 2004
allotments were made to M/s.Platinum Square for setting
up country club and in the said meeting allotments were
also made to M/s.Popcorn. The persons who were present in
the meeting are shown. It was sought to be pointed out
that in the meeting one Mr.Mhatre had opposed the
allotment which objection was brush aside saying it is a
political objection.
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57. Mr.Hegde sought to canvass that the multiplex
policy which came into existence in the year 2002,
certain tax benefits were granted to the Multiplexes as
such while making allotment this benefit ought to have
been taken into account. While fixing land price
considering huge demand of multiplex due to concessions
granted by the Government. It is further submitted that
even assuming that some other allotments were made by
CIDCO, which may not meet with judicial approval cannot
and could not be a ground for not cancelling the
allotment made to the Petitioners. It is, thus,
submitted that if the allotment made to the Petitioners
are arbitrary and has caused loss to the CIDCO then same
cannot be saved merely because some other allotments may
have been made by CIDCO which are not proper. In support
of this submission, reliance is placed on the Judgment in
the case of Coromandel Fertilisers Ltd. v. Union of
India, AIR 1984 SC 1772 (para-12).
58. Mr.Hegde while referring to the letter written by
the Managing Director of CIDCO Mr.Sinha, in response to
the Audit objection, sought to submit that the CIDCO has
filed an Affidavit and have annexed thereto the official
order of the Comptroller of Auditor General, wherein it
has been clearly mentioned that the reasons given by
CIDCO are not acceptable and that there is loss caused
to the Corporation by virtue of said allotment made to
the Petitioners. It is also sought to be pointed out
that Dr.Shankaran has considered the allotment made by
CIDCO during the relevant period and has worked out
weighted average of the price fetched for allotments made
in the vicinity and has fixed the average which is
Rs.18,490/- p.s.m. in respect of the plot at Airoli and
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Rs.14,475/- for the plots at Kharghar. It is, thus
submitted that if a plot with FSI 1.5 fetches a price in
the range of Rs.14,000/- p.s.m. then at least a plot with
one FSI will fetch upto Rs.8,000/- to 10,000/-. The
allotment made to the Petitioner at reduced price of Rs.
2,500/- and Rs.3,100/- are on the lower side and has
resulted in loss to the CIDCO. In the case of Platinum
Square the comparison is made with the offer made by
CIDCO to BARC, i.e. offer rate Rs.2,800/-p.s.m. is
taken as the basis for comparison. Even assuming that
the price of Rs.2,800/- p.s.m. amount was not acceptable
to BARC, yet there is no reason given as to why the rates
were reduced in the case of Platinum Square, which has
lead to a loss of nearly 11 crore.
59. Mr.Hegde sought to criticize the action of the
Board of Directors of CIDCO saying that in the very first
meeting Board cleared the subject proposals without
considering the individual merits. In the meeting hardly
any official members were present when the allotments
were made to the Petitioners. Mr.Hegde sought to
distinguish judgments sought cited at the bar on behalf
of the petitioners. He submits that reliance on the
judgment of Sunil P. Bantia (supra) is misplaced.
According to him, Dr.Shankaran had recommended that the
subject plot should be cancelled unless it is an
irreversible position like constructions have been
undertaken and in that event loss was directed to be
recovered. The Apex Court noted that there were
constructions on the plot. In the circumstances, the
cancellation order was held to be not sustainable.
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60. Mr.Hegde also sought to justify the action of the
CIDCO on the basis of Section 154 and 118 of the M.R.T.P.
Act contending that the purpose of constituting CIDCO is
to develop a town by making allotment and therefore the
purpose of the Act, inter alia, is to develop the area
by allotment of plots by CIDCO. In case the allotments
are allowed to be made in arbitrary manner and, if such
allotments are sustained, then it amounts deviation from
the purpose of the Act and hence directions can be issued
by the State Government under Section 154 for efficient
implementation of the Act and same are binding on CIDCO
and hence cancellation can be justified on this count.
61. Mr.Hegde urged that section 23 of the Contract
Act also envisages cancellation on account of the
allotment / agreement, if it is opposed to public
policy. It is urged that allotment of aforesaid plots
was made in an arbitrary, illegal manner and this Court
can sustain the cancellation being opposed to public
policy. According to him, the Supreme Court has ruled
that it is bounden duty of the court to act when
illegality is brought to the notice of the Court. The
allotment made without inviting tenders leads to the
presumption of nepotism, bias etc. and it can only be
justified by citing compelling reasons. In the present
case no reasons were mentioned, individual merits were
not considered and allotments were made surreptitiously
to one person which smacks of arbitrariness. Hence it is
prayed that the allotments be held opposed to public
policy.
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62. Mr.Hegde urged that the petitioners are asking
for writ for quashing the allotment order passed by
statutory authority which is not maintainable as Writ of
certiorari cannot be issued to quash an order passed by a
statutory body. Only a Writ of mandamus can be issued.
However, even if the Mandamus is to be issued it may not
be issued in the instant case as the result of allowing
the Petition will amount to review an allotment which is
bad and illegal. Reliance is placed on judgment of the
Supreme Court in the case Municipal Corporation for
Greater Bombay v. Advance Builders, AIR 1972 SC 793 to
support the legal proposition that the writ of mandamus
is not a writ of right but as a rule is matter for
discretion of the court. It is, thus, submitted that
even assuming that the action of CIDCO is irregular for
not following the procedural rules, yet the action was
taken to correct the illegality and hence the Writ of
Mandamus should not be issued.
63. Mr.Hegde while dealing with the charge of not
giving copy of the Shankaran Report submits that the
issue has become infructuous and insignificant as the
petitioners have produced details of the report and have
argued the matter on that basis. No prejudice is
suffered by the petitioners due to non-supply of the said
report. He also urged that it is possible for the CIDCO
even at this stage to withdraw the notice and issue
fresh notice after giving a copy of the Shankaran Report,
however, it shall be a futile exercise as the petitioners
have already argued the petition by referring to the
report and this Court has to consider as to whether any
purpose shall be served by directing the CIDCO to
undertake such an exercise. It is also urged that even
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after referring to the said report the petitioners could
not justify the allotment in their favour, hence it is
submitted that cancellation orders need be sustained.
64. It is submitted that in the case of M/s.Platinum
Square the matter was not carried to the Supreme Court
and hence this Court can consider whether Writ will be
maintainable or otherwise. According to the submissions
made, the petitioner is, basically, praying for specific
performance of the Agreement by asking for a lease deed
to be executed which does not lie within the domain of
Writ jurisdiction. In this case, petitioner was not
even registered as charitable trust when they applied for
a plot and yet their application was considered under
Chapter V of Land Disposal Regulation of CIDCO, which
requires that only public charitable trust should be
allotted the plots for sports and other allied
activities.
65. Mr.Hegde canvassed that while remanding the
matter back to this Court, the Hon'ble Supreme Court has
only formed a prima facie view of the matter and has
categorically mentioned that the matter is remanded for
consideration on merits and the same are also mentioned
in para 20 of the Judgment of Supreme Court in Sunil
Banthia s case. It is, thus, submitted that this Court
can consider the matter on merits without being
constrained by any direction of the Supreme Court.
66. In nutshell, it is submitted that the CIDCO has
cancelled the allotments due to the arbitrary manner in
which the plots were allotted and the loss caused to
CIDCO. The basis for computing the loss was the report
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of Dr. Shankaran, which has referred several allotments
in the vicinity and the offer made to BARC. It is,
thus, submitted that this Court cannot, in the writ
jurisdiction, decide the price prevailing in the area at
the time of allotment and hence the Writ be dismissed on
account of the disputed question of facts. It is, thus,
prayed that the petition be rejected.
67. The learned counsel appearing for the State
adopted the submissions made by Mr.Hegde, hence, they
need no reproduction.
REJOINDER TO THE REPLY OF CIDCO AND
THE STATE OF MAHARASHTRA :
68. Mr.Singh, Senior Counsel for the petitioners in
reply urged that a specific request was made to supply
Shankaran report in the reply to the Show cause notice
submitted by the petitioner. In fact the petitioner had
specifically mentioned in the reply that the same was an
interim reply and that the final reply could be given
only after the entire Shankaran report was given to the
petitioner along with the methodology used by Shankaran
to allege losses. That it is also admitted fact that the
cancellation order was passed without supplying the copy
of the Shankaran report to the petitioner.
69. It is urged that in all the three writ petitions
a specific ground had been taken by the petitioners that
the cancellation order is vitiated being in violation of
principles of natural justice for having been passed
without giving a copy of the Shankaran report along with
all Annexures to the petitioners.
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70. It is also canvassed that the Shankaran report
having been prepared behind the back of the petitioners,
i.e. without any notice to them and a copy of the same
having not been supplied to them, the same could not be
used for any purpose against the petitioners. The
submission thus made is, legally if Shankaran report is
to be ignored, while considering the case of the
petitioners then the allegation of loss caused to CIDCO
automatically disappears and there is no question of
alleging that CIDCO has suffered any loss in making the
allotment in favour of the petitioners.
71. It is submitted that in the initial reply filed
to the writ petition, CIDCO had taken a stand that in
view of the Multiplex Policy, 2000 incentives were given
for setting up of multiplexes because of which the demand
for multiplex had arisen. In response to the same it was
submitted that if the policy of 2000 was the reason for a
huge demand, surely CIDCO was not justified in making the
allotment in favour of Mohan Entertainment in 2003 on the
ground that the plot had been put to tender twice in the
year 1998 and 1999, i.e. prior to the issuance of the
policy. It was also pointed out that the policy did not
evoke any response in Navi Mumbai as no party came during
that time for allotment of land. It was also pointed out
to the Hon ble Court that both Mohan Entertainment and
the petitioner applied for allotment of land for setting
up of multiplexes after the policy had already expired on
16.8.2002.
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72. It was further submitted that in the statement of
objects and reasons for issuance of the Multiplex policy
ordinance, Dr. D.K. Shankaran himself being the author of
the same, had noticed the slump in the entertainment
industry and the fact that incentives were necessary to
encourage parties to set up multiplexes being highly
capital intensive. Dr. Shankaran, while preparing his exparte
report has completely lost sight of the same
statement of reasons by erroneously comparing the
allotment of multiplexes having 1 FSI with commercial
allotments having 1.5 FSI.
73. It was sought to be canvassed in reply that in
the case of Gurudev Industrial Premises Society, CIDCO
while regularizing the said allotment, wherein Shankaran
had reported 63.55 crore loss, CIDCO justified the same
by noticing that the initial allotment in favour of
Gurudev Industrial Premises Society was with 0.5 FSI as
against the comparison by Shankaran with 1.5 FSI. CIDCO
also while regularizing the said allotment took
cognizance of a valuation report got prepared by Gurudev
Industrial Premises Society itself to justify the
allotment at the rate at which it had been done. It is
thus surprising that the same allottee had got
enhancement of F.S.I. from 0.5 to 1.5 to 3.0.
74. It was also urged that in a Public Interest
Litigation challenging the allotment in favour of K.
Raheja, wherein also Shankaran had reported 49.75 crore
loss, CIDCO justified the said commercial allotment
without issuance of tender as being within the right of
CIDCO under the NBDLR, 1975 and under the other powers
vested with CIDCO. Accordingly to petitioners, the
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rightful stand taken by CIDCO on affidavit in case of K.
Raheja is contradictory to stand taken in Petitioner s
case to mislead the court & harm Petitioners case.
75. It was also submitted that four cases of cinema
hall allotments made by CIDCO through the tendering
process relate to the years 1976, 1981, 1988 & 2000. Upto
the year 1988 there was no concept of multiplex in this
country and the allotments were for cinema halls as a
commercial allotment. The photographs of all the sites
were placed before the court along with the affidavit
filed on 18.3.2009. It was also pointed out that in
Belapur, no cinema hall was constructed and the entire
building is a commercial complex with FSI 1.5. In Panvel,
Shubham Cinema Cum Commercial Complex is also a
Commercial Complex with 450 seater cinema with FSI 1.5
In Kopar Khairane, the tender papers inviting tenders for
the same were already in the writ petition paper book at
page 46 of the rejoinder in writ petition no. 9468 of
2005, wherein it is clearly mentioned that the tenders
are being called for allotment of multiplex with
concerned complex wherein the tenderer had the to develop
30% of the area commercially and wherein the only
eligibility was the earnest money to be submitted along
with the tender. From the tender papers it was clear
that the tenderer s status in the business of multiplex
was not even a requirement for eligibility. Since 2000
the Cinema Cum Commercial Complex is yet not ready for
its functioning. All this lead to acute shortage of
cinema theaters/ multiplexes/ entertainment centres in
the areas of Navi Mumbai. It is also an indicator of
less profitability of the cinema/multiplex/entertainment
centre business.
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76. It was also sought to be canvassed that
in spite of the status of the tenderer not being relevant
for making allotment of land for multiplex, in the case
of the petitioner, CIDCO had asked for the petitioner s
bank statement to prove his financial capability and the
petitioner had also submitted a project report of a
competent party having experience in the business of
setting up multiplex/cinema hall. The same was
considered by CIDCO before making the allotment in favour
of the petitioner. Also project report for Country Club
was thoroughly scrutinized by planning department of
CIDCO & allotment area was curtailed to 50,000 sq.mtrs
from 80,000 sq.mtrs. Remarks of all concern departments
in all three allotments have been placed on record.
77. The allotment at Koper Khairane, with right to
commercial exploitation was pressed into service while
giving rejoinder to contend that in the case of the
petitioner in Platinum Entertainment the petitioner was
allotted land for multiplex-cum-auditorium-cumentertainment
centre with no right for commercial
exploitation and in the case of Popcorn Entertainment
petitioner had been given the right to construct
multiplex along with entertainment centre.
78. It was also urged that in the allotments made by
CIDCO on request there was no concept of market price
because allotments have to be made at the reserved price
or as fraction/multiple of the same. The petitioner has
downloaded from the website of CIDCO a note on reserve
price which clearly brings out the methodology for
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calculating the same. Accordingly if allotment is made
at the reserve price in terms of the policy, there is no
question of any loss caused to CIDCO, especially when the
allotment is made out at a higher price than the reserve
price.
79. It was also sought to be pointed out that the
photographs available from pages 7-20 in the additional
affidavit filed on 18.3.2009 that the allotment in favour
of the petitioner at Airoli and Kharghar are away from
habitation and any construction activity, whereas
allotment in the case of Mohan Entertainment and others
are in highly developed areas, having a lot of
construction activity around. Thus, also CIDCO was
justified in making the allotment in favour of the
petitioner at the reserve price, keeping the larger
interest of the development of area in mind.
80. It was also canvassed that Platinum Square Trust
initially did not want the country club in the name of
the Trust and it was only at the instance of CIDCO, that
Platinum Square Trust agreed to form the Trust in order
to meet the objection of making the allotment as per the
policy. In this regard it is further submitted that the
policy is famed by the Board of Directors and the
allotment is also made by the same board of directions
which has the power to change the policy and hence if the
board of directors made a conditional allotment, no fault
could be found with the same. In terms of the Board
Resolution however, possession of the plot was not to be
handed over to the petitioner, till the registration of
the trust. In the case of allotment of land for petrol
pump, the policy required that the same could be made
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only in favour of oil companies. CIDCO board has relaxed
the policy by regularizing the allotment in favour of
individual contrary to the policy in case of (1) Vivek B.
Shinde (2) Raj Enterprises. In any case, this ground is
not available to CIDCO, as the same was neither in the
show cause notice nor in the cancellation order.
81. Lastly, it is submitted that the entire argument
of CIDCO regarding loss etc. is not available to them as
they cannot travel beyond the show cause
notice/cancellation order/observations of the Hon ble
Supreme Court in para 49 of the judgment in the case of
Popcorn Entertainment reported in 29007 (9) SCC 593.
82. It is urged by Mr.Singh that in the case of
Platinum Entertainment and Popcorn Entertainment this
Court should grant interest on the entire deposit made by
the petitioners being full value of the price of the
plots as the petitioners were unable to start
construction due to illegal and malafide actions of the
respondents and in the case of Platinum Square Trust this
court should grant interest for the first installment
deposited by the petitioner from the date of deposit till
the date of judgment and further that the second
installment shall become payable without any interest
within four weeks from the date of judgment and the time
for making the construction on all the 3 plots be granted
from the date of judgment as if the original allotment
was made on the said date.

Binding Nature of Remand Order :
83. It is fairly stated that power of jurisdiction
of the Court lower in hierarchy after remand, depends on
specifications of the remand order. Whether the order of
remand lays down any limits of enquiry to be made by the
Court lower in hierarchy that Court has no jurisdiction
to entertain any question which falls outside those
limits. In other words, where the Court passes
restricted order of remand it is not open to any of the
parties or any Court to enlarge the scope of the remand
order, that too, by a side window. If such course is
permitted, it would be a destructive of all judicial
discipline and will strike at the root of the efficacy
and binding nature of an order of a superior Court on the
parties to a dispute and the necessity of a sub-ordinate
Court to faithfully implement an order of the superior
Court.
84. Having said so, it is necessary to find the
contours of scope of judicial review of this Court after
remand. It can only be determined on the basis of the
directions of the Apex Court contained in para-41 of the
judgment, which reads as under:
It is also pertinent to mention
that CIDCO in the show-cause notice has
taken a ground of non-issuance of tender as
the only basis for cancelling the allotment
and CIDCO in the final order has also
confined itself to the non-issuance of
tender as the ground for cancellation but
in the reply to the writ petition, CIDCO is
seeking to add further grounds to justify

the order of cancellation, which is clearly
not permissible in terms of the law laid
down by this Court in several of its
decisions.
The aforesaid observation of the Apex Court contained in
the remand order binds us and prevents us from
considering any other ground other than the ground for
cancellation taken in the show cause notice and
reiterated in the final order.
Grounds beyond the scope of Show Cause notices:
85. On the above backdrop, we are constrained to
observe that the respondents tried to justify their
action of cancellation of allotment of plots and order
thereof on the grounds which were neither raised in the
show-cause notices nor made foundation of their final
orders. Thus, the additional grounds falling beyond the
scope of show cause notices sought to be pressed into
service to sustain their action are summarized
hereinbelow:-
1. Mr.Nilesh Gala, the Proprietor of
M/s.Platinum Entertainment has used some modusoperandi
for obtaining allotment of plots meant
for country club and another plot for multiplex
in Kharghar.
2. An application was made by the
petitioners to the Hon ble Chief Minister and the
same was considered favourably by the Board of
CIDCO.

3. The undue haste is shown in allotment of
plots resulting in illegal and arbitrary
allotment with malafide intention to cause
wrongful gain to the individual person. It is a
case of favoritism supported by the report of
Dr.D.K.Shankaran Report.
4. The agenda note and the resolutions
demonstrate no discussion about the individual
merit of the allottees except need for
multiplexes sought to be justified during the
course of discussion without indicating any
reason for choosing group of petitioners for
allotment of plots.
5. Absence of official members in the Board
Meeting wherein the decisions of allotment of
plots to the petitioner were taken.
6. The allotment of plot of land are
factually for commercial purposes in the garb of
construction of multiplexes and country club with
a view to inure profit to the allottees.
7. The multiplex policy whereby certain tax
benefits were granted with effect from Year 2002
were ignored while making the allotment of plots
to the petitioner overlooking the demand for
multiplexes due to concessions granted by the
Government.

8. No reasons are to be found to justify
allotment of three plots in favour of one group
of persons.
9. Refusal on the part of Comptroller of
Auditor General to accept the reasons given by
CIDCO justifying absence of law suffered by CIDCO
by virtue of the subject allotments of plots to
the petitioners.
10. Dr.D.K.Sankaran s report is the basis for
calculation of loss suffered by CIDCO.
11. Justification of the powers of the State
Government directing cancellation of allotment of
plots on the basis of Sections 118 and 154 of the
M.R.T.P.Act.
12. Surreptitious arbitrary allotment made
without inviting tenders leads to the presumption
of nepotism and bias etc.
13. The petitioner M/s.Platinum Entertainment
were not registered as a charitable trust yet
their application for allotment was considered by
CIDCO favourably.
14. Failure on the part of the petitioner to
produce any valuation report to justify at which
rate the allotment was made by the CIDCO.

86. The aforesaid grounds, in our considered opinion,
travel beyond the scope of the show cause notices issued
in these cases and that none of the aforesaid grounds was
made basis of the order of cancellation of allotment of
plots which were allotted to the petitioners.
Grounds available for Judicial Review :
87. Having said so, what remains for consideration
are the grounds on which the show causes notices were
built and the foundation on which the action of
cancellation of plots is based. They are as under:
A. Allotment of plots is arbitrary and
contrary to the established Rules, Regulations
and Conventions causing substantial loss to
CIDCO since no tenders were invited, hence per
se illegal and void.
B. Allotment of plots is ab initio void on
the thrust of section 23 of the Contract Act,
1872.
88. The aforesaid very two grounds were also pressed
into service during the course of hearing by the CIDCO to
sustain the order of cancellation of plots. Similarly,
very same two grounds were also canvassed by the
petitioners before the Hon ble Supreme Court in appeal in
support of their action.
89. On being asked, the petitioners have produced
copy of the S.L.P./ civil appeal on record of this Court

vide their affidavit dated 4th August, 2009. The perusal
of S.L.P./ civil appeal, unequivocally, demonstrates that
the aforesaid two grounds were raised in appeal memo in
paras- 29 to 31 and 40 to 43. They were specifically
canvassed by the petitioners and countered by the
respondents before the Apex Court in appeal and on the
top of it, the findings were also invited thereon which
is clear from paras- 32 and 39 of the judgment of the
Supreme Court reproduced herein below at the cost of
repetition for immediate reference
32. Thus, from a conjoint reading of the
Regulation and the Land Pricing and Land
Disposal Policy of CIDCO, it is clear that the
allotment of land could be done by considering
individual application i.e. without inviting
tenders. From the Land Pricing and Land
Disposal Policy it is also clear that disposal
of land under different category are to be
considered differently. In the case of
allotment of land for auditorium/multiplex,
theater complex to be developed in the private
sector, it is prescribed that the land is to be
allotted at reserved price and the method of
disposal is on request at fixed rate failing
which by competitive bidding thus, in the
instant case there is no infirmity in the
allotment because the same has been made on
request at fixed rate at the reserved price.
Such allotment is clearly permitted under
Regulation and prescribed as the manner of
allotment under the Land Pricing and Land
Disposal Policy of CIDCO. Even CIDCO in their
affidavit filed in the case of Sanjay Damodar
Surve vs. State of Maharashtra, being PIL No.
140/2004 as well as in the case of K.Raheja,
(PIL No.45879/2003, 7637/2004) have stated on
oath this very stand that they have the right
to make allotment by considering individual
applications in terms of the power vested on
them under Regulation 4 of the New Bombay
Disposal of Lands Regulations, 1975 and it is
not understood why CIDCO is seeking to take a

different stand in this matter by singling out
the appellant.
39. The impugned order is also liable to be
quashed as the same is wholly without
jurisdiction. Once a concluded contract has
been entered into between the parties, the
parties cannot be permitted to resile from the
same contrary to the express terms of the
concluded contract. It has been held in the
case of Corporation of the City of
Bangalore's case (supra) to the effect that
CIDCO has no such right to revoke the concluded
agreement and hence any action taken by CIDCO
contrary to the express terms of the agreement
is wholly without jurisdiction. CIDCO cannot
take recourse of Section 23 of the Contract
Act alleging that the agreement is opposed to
public policy because clearly such right is
reserved only to the Courts and it is submitted
that authorities themselves cannot take
recourse to the said section in order to annul
a concluded agreement.
90. On the above observations, the learned senior
counsel for the petitioners has laid great stress in the
submissions to contend that they are in the nature of
obiter dicta binding on this Court. He submits that the
aforesaid two grounds were debated in the Hon ble Supreme
Court and the Court has considered and expressed its
opinion, which this Court cannot ignore.
Binding Effects of Obiter Dictum :
91. There are numerous judgments of the Supreme
Court on both sides of watershed those prescribing that
even the obiter dicta of the Supreme Court is binding on
other courts and those proscribing the enforcement of
obiter dicta (see Raval and Co. v. K.G.Rama Chandran,

AIR 1974 SC 818, ADM, Jabalpur v. Shivkant Shukla, AIR
1976 SC 1207, Sreenivasa General Traders v. State of AP,
AIR 1983 SC 1246, Amar Nath Om Prakash v. State of
Punjab, AIR 1985 SC 218, ONGC v. Western Co. of North
America, AIR 1987 SC 674, MCD v. Gurnam Kaur, AIR 1989
SC 38, Sanjay Dutt v. State through CBI, Bombay,
(1994) 5 SCC 402, Director of Settlements, AP v.
M.R.Appa Rao, AIR 2002 SC 1598, Nathi Devi v. Radha
Devi Gupta, (2005) 2 SCC 271, State of Haryana v.
Ranbir, AIR 2006 Sc 1796 and Oriental Insurance Co. Ltd.
v. Meena Varial, (2007) 5 SCC 428).
92. Generally, even an obiter dictum is expected to
be obeyed and followed. Some times well considered
obiter dicta of the Supreme Court is taken as precedent,
but every passing expression of a judge cannot be treated
as an authority [see Saiyada Mossarat v. Hindusthan
Steel Ltd., Bhilai Steel Plant, (1989) 1 SCC 272].
93. Although, under the traditional doctrine of
precedent, an obiter dictum has no binding force, it may
nevertheless be held entitled to have great weight.
General observations which are in th penumbral regions of
the ratio have great weight when the point has been
argued and deliberated on by the judges though not
strictly required in the case. With the gradual
erosion of the distinction between ratio and obiter the
practice has gained ground for treating even the obiter
dicta of the Supreme Court binding on the High Court.
94. The Supreme Court while holding that obiter had
only persuasive value observed in Srinivasa General
Traders v. State of A.P., (1983) 4 SCC 354:AIR 1983 SC

1246 that every judgment must be read as applicable to
the particular facts proved, or assumed to be proved,
since the generality of the expressions which may be
found there are not intended to be expositions of the
whole law but governed or qualified by the particular
facts of the case in which such expressions are to be
found. In Prethipal Singh Bedi v. Union of India,
(1982) 3 SCC 140:AIR 1982 SC 1413, the Supreme Court held
that observations made on questions not specifically
arising for decision, but discussed are entitled to
respect by succeeding bench of the Supreme Court, though
observations are obiter.
95. The Calcutta High Court also had similarly ruled
that even the obiter dicta of the Supreme Court are
binding (see Aswini Kumar Roy v. Kshitish Chandra Sen
Gupta, AIR 1971 Cal 252). In fact, the Calcutta High
Court has even asserted that so long as the Supreme Court
decision holds the filed it will not be open to the High
Court to go against it on the footing that a particular
aspect was not considered in the judgment. The Gujarat
High Court also held that the obiter dicta of the Supreme
Court are in the same category as ratio decidendi for the
purposes of Article 141. The M.P. High Court has also
taken the view that the obiter dicta of the Supreme Court
are binding on all the courts (see Narbada Prasada v.
Awadesh Narain, AIR 1973 MP 179). The Kerala High Court
has held in State of Kerala v. Parameshwaran Pillai,
1974 Ker LT 617, that judicial propriety demands that
even the obiter dictum of the Supreme Court should be
accepted as binding.

96. Be that at it may, the Andhra Pradesh High in
Bhagavati saran v. State of U.P., AIR 1961 SC 931 has
moved to the other end of the spectrum by saying that a
decision of the Supreme Court cannot be disregarded on
the ground that no ratio decidendi is discernible. Thus,
many of the High Courts are inclined to bring obiter
dicta of the Supreme Court within the purview of Article
141. The Punjab High Court has also held that the obiter
of the Supreme Court is binding if it lays down a point
of law. It is fair summary to say that judicial dicta
overwhelmingly support the binding nature of obiter dicta
in the context of Article 141. The Supreme Court in
Kausalya Devi Bogra v. Land Acquisition Officer, (1984)
2 SCC 324: AIR 1984 SC 892, has pointed out that the
judicial decorum and discipline require that the
directions of the Supreme Court should be taken as
binding on subordinate courts. In case of Narinder Singh
v. Surjit Singh, (1984) 2 SCC 402: AIR 1984 SC 1359, the
Supreme Court has observed that when the decision of the
Supreme Court in certain respect as was not to the
liking of the judge of the High Court when his own
decision was set aside by the Supreme Court and such a
decision becomes the law of the land and it is the duty
of everyone including the High Court to obey the order
and not try to avoid it.
97. As already stated hereinabove, so far as
categorical and unequivocal observations made by the Apex
Court revolving around the issues relating to nonobservation
of rule and regulations causing substantial
loss to the CIDCO since no tenders were invited and

interpretation of section 23 of the Contract Act are
concerned, they operate as obiter binding on us as such
we have to fall in line with the view expressed by the
Apex Court.
On Re­valuation :
98. Having said so, at this stage, we may also
mention that the necessity of remanding the matters visa-vis
first two petitions in hand is concerned, the
Supreme Court has explained the same in the case of Sunil
Pannalal Banthia v. CIDCO, (2007) 10 SCC 674 on which
heavy reliance was placed by the petitioners. When Sunil
Banthia s case was being argued before the Supreme Court,
learned counsel for the CIDCO appearing before the
Supreme Court had made a submission that the matter be
remitted back to the High Court for fresh determination
since the case involves identical facts and issues as
were involved in Platinum Entertainment and while
rejecting this submission the observations made by the
Apex Court in para- 20 of the judgment suggest that the
necessity of revaluation of the subject plots was in the
mind of the Apex Court. We, accordingly, desired to
consider the question of revaluation. While considering
this aspect of the matter, we noticed that no evidence
in this behalf was available on record as such both
parties were asked whether they desire to bring
additional evidence on record. Parties to the petition
showed their reluctance. Even our suggestion of making
the reference to the arbitrator for revaluation did not
find favour with either of the parties. CIDCO went to
the extent of contending that, this Court cannot in writ
jurisdiction decide price prevailing in the area at the

time of allotment. Consequently, for want of evidence,
we found it difficult to undertake exercise of
revaluation.
Relevant Case­law :
99. The case of Sunil Banthia (supra), was decided
on merits, the facts of which are similar to the cases in
hand. The factual matrix in that case reveal that the
CIDCO had issued a letter of allotment of a commercial
plot measuring 1453.75 sq. mtrs. on lease in Plot No.1 in
Section 9, Panvel, Navi Mumbai for a period of 60 years
for a premium of Rs.2,12,24,750/- in favour of Mrs. Meera
Balkrishna Dhumale and Mrs. Neeta Hemant Patankar
jointly. The original allottees applied for transfer of
the said plot to the appellants- Banthias. Upon
accepting the transfer charges of Rs.2 lacs, CIDCO issued
a corrigendum to the original allotment letter dated
5/2/2004 and executed a deed of lease in favour of the
appellants on receipt of full lease premium. CIDCO also
executed a deed of confirmation in favour of the
appellants and issued the development permission and
commencement certificate in terms of section 45 of the
MRTP Act. On the basis of the above, the appellants
commenced the construction work and proceeded upto first
floor and also completed the construction of the
underground water tank. On 19/7/2005, CIDCO issued a show
cause notice to the appellants to show cause why the
agreement to lease should not be terminated as being void
under section 23 of the Contract Act. The appellants
replied to the show cause notice. Despite the same, on
29/3/2006, CIDCO passed an order terminating the

agreement of lease and demanded return of possession of
the allotted plot.
100. Sunil Banthia filed a writ petition in this
court against CIDCO challenging the show cause notice
dated 19/7/2005 and the order dated 29/3/2006 terminating
the agreement of lease. This court dismissed the writ
petition on the ground that alternative remedy was
available to the petitioners. A special leave petition
was filed in the Supreme Court challenging the order of
this Court.
101. Upon consideration of rival contentions, the
Supreme Court observed that the legal position is quite
obvious that having acted and held out the assurances to
the appellants, which caused the appellants to alter
their position to their prejudice, it was not open to
CIDCO to take a unilateral decision to cancel the
allotment on the ground that it had acted without
jurisdiction and/or in excess of jurisdiction and in
violation of its rules and regulations. The Supreme
Court further observed that the argument advanced on
behalf of CIDCO even as regards its decision to cancel
the allotment, it being in violation of section 23 of
the Contract Act is unacceptable having regard to
Regulation 4 of the said Regulations which empowered
CIDCO to dispose of plots of land even on the basis of
individual applications. The argument that the decision
to cancel the allotment was taken because the allotment
was opposed to public policy was rejected by the Supreme
Court by observing that in fact the stand taken by CIDCO
is opposed to public policy since CIDCO was not entitled
to take unilateral decision to cancel the allotment after

the appellants had acted on the basis thereof and had
expended large sums of money towards the construction
which had progressed to some extent. The Supreme Court
observed that the said Regulations allowed CIDCO to
entertain individual applications for allotment. The
Supreme Court rejected the argument that the allotment
was contrary to public policy on a fresh consideration
made by the Board of Directors of CIDCO upon considering
the recommendations made by Dr. D.K. Shankaran, the then
Additional Secretary (Planning) of the State of
Maharashtra. The Supreme Court observed that Dr.Shankaran
had been appointed by the State Government in January,
2005 to conduct a discreet inquiry into the allotments of
certain plots of land made by CIDCO during the tenure of
Mr.V.M.Lal, the then Vice Chairman and Managing Director
allegedly in contravention of the established rules,
regulations and conventions. The Supreme Court observed
that Shankaran Report was not sufficient to cancel the
allotment which had been made in accordance with the said
Regulations and the Banthia's had made payment as
directed by CIDCO which, in fact, was higher than the
price recommended by Shankaran Committee. The Supreme
Court, in the circumstances, set aside the impugned order
of this court and quashed the show cause notice and order
cancelling the allotment issued by CIDCO.
102. Learned counsel for the petitioners also placed
heavy reliance on the Learned Division Bench judgment of
this Court presided over by the Hon ble the Chief Justice
delivered in W.P.No.2275/1993 (S.K.Agarwal and others v.
CIDCO and others) on 2nd May, 2008; wherein the plots
alloted to the petitioners for constructing 25 bungalows
by CIDCO were cancelled. By letter dated 19th October,

1988 petitioners were informed that the management of
CIDCO had cancelled allotment of plots in their favour
and, therefore, the petitioners are no more licensees in
respect of those plots. Consequent upon the cancellation
of allotment, the development permission under section 45
of the M.R.T.P. Act was also denied to the petitioners.
103. Being aggrieved by the said action of CIDCO, the
petitioners had filed writ petition in this Court. The
said petition was finally decided by the learned Division
Bench of this Court vide its order dated 25th February
1993, whereby and whereunder the order of cancellation of
allotment was set aside and hearing was directed since
the action was found to be in breach of the principles of
natural justice. The CIDCO served upon the petitioners
fresh show notices dated 3rd May, 1993 calling upon them
to say why the letters of allotment in respect of the
said bungalow plots should not declared as void under
section 23 of the Contract Act. The said show cause
notice contained following three grounds:
(a) that the allotment of the subject
plots was done without inviting public
tenders.
(b) that the rate of premium charged by
the respondent at Rs.150/- per sq.mtr. was
lower than the market rate.
(c) the petitioners being in a
transferable service such allotment of
residential plots is incorrect.

The petitioners replied to the said show cause notices.
The petitioners advocate was accorded personal hearing.
By an order dated 22nd September, 1993, CIDCO, inter
alia; declared the allotment of bungalow plots as void
and of no effect.
104. The aforesaid action of the CIDCO was again
challenged in W.P.No.2275/1993 by 22 petitioners. The
said petition was decided on merits and the learned
Division Bench of this Court was pleased to quash and set
aside the order of the CIDCO cancelling the plots
allotted to the petitioners therein relying upon the case
of Sunil Banthia (supra) since the facts involved in the
subject petition were identical. The Division Bench while
setting aside the action of the CIDCO held as under:
30. ... ... ... The
allotment orders issued in favour of the
petitioners have been cancelled on the ground
that they are illegal having regard to section
23 of the Indian Contract Act. We have already
noted that this argument has been rejected in
Banthia's case (supra) by the Supreme Court on
the ground that Regulation 4 of the said
Regulations empowers CIDCO to dispose of plots
of land even on the basis of individual
applications. These observations of the
Supreme Court clearly cover the present case
also.
31. But there is one distinguishing factor
on which CIDCO has laid stress. In Banthia' s
case (supra) considerable construction was
made on the allotted plots and, therefore, the
Supreme Court observed that having acted and
held out assurances to the appellants, which
caused the appellants to alter their position
to their prejudice, it was not open to CIDCO to
take a unilateral decision to cancel the

allotment on the ground that it had acted
without jurisdiction. On behalf of CIDCO, it is
argued that since the petitioners have not made
any construction on the said lands, it cannot
be said that they have altered their position
to their prejudice on account of assurances
held out by CIDCO.
32. We are unable to accept this submission.
Though it is true that the petitioners have not
made any construction on the said lands, it is
their case that they have expended large sums
on preparation of building plans by engaging
architects. Moreover, the entire lease premium
is paid by them in the year 1986 and the money
is lying with CIDCO since then. In such a
situation, it is not possible to say that there
is no prejudice caused to the petitioners.
Therefore, in our opinion, judgment in
Banthia's case (supra) is squarely applicable
to the present case. The impugned order
cancelling allotment orders will have to be,
therefore, set aside.
105. The issues sought to be raised in the present
petition are squarely covered by the judgment of the Apex
Court in the case of Sunil Banthia (supra) as well as
that of Division Bench judgment of this court in the case
of S.K.Agarwal (supra) as such these petitions for the
reasons stated therein are liable to be allowed.
106. It is, no doubt, true that the CIDCO is
justified in contending that remand order operates only
in respect of first two petitioners, namely, M/s.Popcorn
Entertainment and M/s.Platinum Entertainment. So far as
third petitioner i.e. M/s. Platinum Square Trust is
concerned, it is not under the umbrella of remand order.
However, the facts being identical in all these three
cases, the judicial consideration has to be identical.

No two different yardsticks as sought to be suggested by
learned counsel appearing for the CIDCO can be applied.
107. At this juncture, we cannot resist ourselves
from observing that CIDCO has resorted to half-hearted
action for the reasons best known to it. CIDCO even
failed to supply the copy of Shankaran Report on the
basis of which they claim to have taken action. The
supply of some extracts of the Shankaran Report, that
too, during the course of hearing before this Court can
hardly be said to be in compliance with the principles of
natural justice. Even on this count CIDCO has committed
serious lapse.
108. At one stage of the hearing, the learned counsel
appearing for the CIDCO through his oral as well as
written submission tried to suggest that it would be
possible for the CIDCO to withdraw subject show cause
notices and issue fresh show cause notices after giving
copy of the Shankaran s Report. But on second thought,
the officials of CIDCO felt it would be a futile
exercise. As a mater of fact, the officials of CIDCO
expected certain directions from this Court so as to
undertake fresh exercise of issuing proper show cause
notices. However, we do not think, we would be justified
in opining in this count. It is for the CIDCO to take
informed decision.
Conclusion :
109. Taking overall view of the matter, petitions are
liable to be allowed. Impugned action of the respondent-

CIDCO is unsustainable and liable to be quashed and set
aside. In the result, impugned orders of the CIDCO
dated 16th December, 2005 and 28th April, 2006 are quashed
and set aside. All the petitions are allowed. Rule in
Writ Petition Nos.9467/2005 and 9468/2005 is made
absolute in terms of prayer clause (a) and rule in Writ
Petition No.3423/2006 is made absolute in terms of prayer
clauses (a) and (b). No order as to costs.
 (MRIDULA BHATKAR, J.)           (V.C.DAGA, J.)

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