Sunday, 7 September 2014

Whether surrender of land by land owner to govt at time of sanctioning of layout whether valid?


 We have noted that even otherwise, a surrender of private land for public purpose and/or acquisition of portion of land for public purpose is not an unknown phenomenon. In M.C. Mehta v. Union of India and Ors. : (1996)4SCC351 , the Supreme Court has issued direction that land which would become available on account of shifting and relocation of hazardous industries from the city of Delhi shall be used in the manner as provided for in the said judgment, thereby the land owner was declared to develop a portion of the said land after surrendering and deducting to the Delhi Development Authority, a portion of the land for development of green belts and other places. The land which was required to be surrendered was upto 68%. The Apex Court rejecting the case of landowners for compensation in lieu of surrender of portion of land declined the said compensation on the ground that the FSI permitted to be used on the land retained by the owner was 1.5% of the permissible FSI and hence the same was a consideration for surrendering the land. (M.C. Mehta v. Union of India and Ors. MANU/SC/0870/2000 : (2000)5SCC525 ). The Apex Court in Bombay Dyeing & Manufacturing Company Limited v. Bombay Environmental Action Group and Ors. MANU/SC/1197/2006 : AIR2006SC1489 has upheld the Clauses of the Development Control Rules, 1958 applicable to Bombay which provide for surrender of the land if the landholder seeks to develop the remaining land for other purposes as provided under the Rules. The decision as relied in Vrajlal Jinabhai Patel, since deceased through his L.Rs. Smt. Jagrati Vrajlal Patel and Anr. v. State of Maharashtra and Ors. MANU/MH/0948/2002 : 2003(3) Mh.L.J. 215 to submit that an ownership in open space under the layout could be vested or transferred to the Municipal Council is not applicable on facts and circumstances as referred above. This is not a case also where there is any question of blocking and encroachment upon the open space and plot or area of the locality. The respondents State and/or NIT are bound to stick to the development plan and scheme as announced. The Apex Court in Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Limited and Ors. MANU/SC/7706/2007 : AIR2007SC2458 while dealing with the aspect of Town Planning and Articles 300A, 14 & 17 of the Constitution of India has also observed:
...The courts must make an endeavour to strike a balance between the public interest on the one hand and protection of a constitutional right to hold property, on the other. For the aforementioned purpose, an endeavour should be made to find out as to whether the statute takes care of public interest in the matter vis-a-vis the private interest, on the one hand, and the effect of lapse and/or positive inaction on the part of the State and other planning authorities, on the other.


IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH, NAGPUR.


WRIT PETITION NO. 934 OF 1994.


Friends Cooperative Housing Society

Limited, 
V

 The Nagpur Improvement Trust, through

its Chairman,

CORAM: ANOOP V. MOHTA & C.L. PANGARKAR, JJ.


AUGUST 29, 2008.

Citation: 2008(5)ALLMR815, 2008(110)BOMLR3204

The petitioners have challenged the action of allotment of their
land by Nagpur Improvement Trust (for short “NIT”), a public body, to
The
the public institutions and public trust being public utility plots.

points and submissions are common, interlinked and, therefore, this

common judgment.
In Writ Petition No. 934/94, as averred, the petitioner is a
2.
cooperative housing society, which has developed various layouts and
other projects successfully.
The petitioner society has purchased land
admeasuring about 13.45 acres comprised in Khasra Nos. 130/1, 3, 4 and
5 of Mouza Parsodi (Bhamti) in Malik Makbuza rights.
The land is
covered by the Bhamti Parsodi scheme of NIT.
3.
The petitioner society applied to NIT for developing the said
land and also gave an undertaking to agree to have the layout of the land
as per plans, suggestions and directions of NIT.
Pursuant to the

undertaking given by the petitioner society, NIT approved the layout of

Accordingly, an
the entire land admeasuring about 13.45 acres.
agreement came to be executed between the NIT and the petitioner
society on 27.5.1977. The sanctioned layout map is a part and parcel of
the agreement.
The development work of the said land was almost completed
4.
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by the year 1981 and some of the members of the society have
constructed their residential houses on the plots allotted to them. On
8.2.1982, the society requested NIT to release entire 40,000 sq. ft. of
The petitioner society promptly
public utility land in their favour.
submitted all the information required by the Nagpur Improvement Trust
vide its communication dated 22.3.1983. On 27.11.1985, the petitioner
society sent a communication along with a cheque for Rs.30,000/- as no
demand came to be raised by NIT and sought release of said 20,000 sq.
ft. of public utility land offered by NIT vide its communication dated
24.12.1981.
NIT did not take any steps whatsoever thereafter and
suddenly on 29.7.1987, after about 2 years, informed that in terms of
clause 9 of the agreement, the society has to transfer free of cost the
public utility land reserved for primary school and, therefore, the society
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should within 7 days hand over the said land to NIT and the petitioner
society should make a separate application for the said public utility land
being allotted to it. With the said communication, the cheque of the
petitioner society for an amount of Rs.30,000/- came to be returned by
the NIT.
NIT issued an advertisement inviting applications from various
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registered charitable public institutions and registered trusts on or before
28.6.1991 for allotting the said land for period of 30 years on lease.
Thereafter various representations and applications were made to NIT,
however, it was rejected by a communication dated 24.8.1993, which is
also a subject matter of this petition.
In Writ Petition No. 967/92, the petitioner-Society has
6.
challenged the action of respondent no.1 and sought further declaration
that they cannot transfer or allot open space as shown by letters
“A,B,C,D,A” in Annexure-3 by bifurcating the same to an institution for
institutional purpose.
In the year 1969, the petitioner-society purchased
land bearing khsara no.87 patwari halka no.44 of Mouza Bhamti Parsodi
in Nagpur vide registered sale deeds dated 16/10/1968, 12/12/1968,
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26/3/1969 and 3/4/1969 for valuable consideration. It is submitted that
the said lands previously belonged to Padole family from whom the
petitioner-Society purchased the same as stated above. The petitioner
applied to the NIT for necessary sanction of lay out and the said lay out
was sanctioned on executing various documents including an agreement
in question. All the development work in the lay out has been done by
NIT and the cost on such development work has been paid by the
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petitioner-society in full.
7.
As per condition no.9 in the agreement and condition no.4 of
the Memorandum, the open spaces have to be transferred to the
respondent-Trust. Areas covered by sewer, water pipe line, open spaces
for public utility purposes have to be transferred to the respondents.
However, it is submitted that the same has not been transferred. The
tittle of the said open spaces remains with the petitioner.
8.
The petitioner was surprised to see an advertisement published
by the respondent NIT in various local dailies of Nagpur, whereby they
wanted to transfer the land shown by letters A,B,C,D “A” in Annexure 3 to
various private institutions. The open spaces by letters A,B.C,D “A” has
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been bifurcated in three different portions and sought to be allotted to
various private institutions The said land is reserved for public utility
plan.
purpose and not for institutional purposes as per the sanctioned layout
The respondent NIT wanted to transfer the said open space
reserved for public utility purpose to the three institutions.
That, the petitioner thus submits that the action of the NIT in
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advertising and intending to transfer on allotment of this public utility
land without there being any title, is void. The agreement clause nos.8
and 9 are void as no law permits transfer of public utility space open
space i.e. Public utility space to the NIT free of cost. There is no provision
under the Nagpur Improvement Trust Act nor there is any law by which
the open space in the lay out or public utility land can be transferred like
this and therefore, the entire action of advertising and bifurcating this
land in to plots for its allotment is clearly void and illegal and the same is
liable to be set aside.
10.
In Writ Petition No. 1179/93 the petitioner-Society has
challenged the action of respondent no.1 and further declaration that they
cannot transfer or allot open space as shown by letters A,B,C,D, and D in
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Annexure-2 by bifurcating the same to an institution for institutional
purpose. The petitioner-society purchased the land bearing Khasra No.78
to 82 of Mouza Bhamti Taluka District Nagpur and sale deeds were
executed on 10/4/1969 for valuable consideration, of the said land from
Padole Family. The petitioner applied to the Trust for sanction of lay out
and in order to get sanction, the petitioner was required to execute
various documents. That, accordingly the layout plan was sanctioned.
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That, an agreement in question was drawn between the Nagpur
In the sanctioned lay out
Improvement Trust and the petitioner-society.
plan various open space were left in the lay out for public convenience
and specific land shown by letters A,B,C,D and D in Annexure 2 were kept
for public utility purpose. All the development work in the lay out is
being done by respondent-Trust and the cost of such development were
As per one of the condition in
paid by the petitioner-society in full.
agreement, the open space has to be transferred to the respondent-Trust,
the area covered by sewer, water pipe line etc., has to be transferred to
the Nagpur Municipal Corporation. The petitioner society is in possession
of the land. The title is not yet transferred.
11.
The petitioner submits that the land being reserved for primary
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school, the petitioner society applied to NIT for allotment for starting a
The petitioner submits that in terms of the advertisement,
school.
respondent No.2 – Halba Mahasangh through its Executive Member Shri
Asai, Civil Lines, Nagpur applied and they have been allotted the said
public utility land.
The petitioner has challenged the said action on the part of
12.
This Honourable court by
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respondent-Trust by filing present petition.
order dated 30.4.1993 passed order of status quo restraining the
respondents from alienating this land and further restraining from making
new construction over the said public utility land and also disturbing the
possession of the petitioner over the said land. However, this Honourable
Court on 14th June, 1993 passed the following order -
“It is restricted to the submission of Respondent no.2 is making
the construction at its own risk and in the event the petition succeeds the
Respondent no.2 shall not claim any compensation”.
We accept as undertaking by the Respondent no..2. Interim
relief is refused,
Ad-interim order earlier made shall stand vacated.
Rejection of interim relief is subject to the undertaking depending upon
final result is subject to the undertaking depending upon final result in
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the petition. Shri Parsodkar for petitioner says that open land and public
utility land left by the petitioner is in excess of the land. If that be so, it is
to the petitioner to get their land modified so as to utilize the excess land
for the purpose of making additional plots Order accordingly”
That in view of the above order, Halba Maha Sangh has constructed
It is, therefore, submitted that the clause and the entire action
13.
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Community Hall. The same has been in use since then.
of advertising and bifurcating this land in to plots are void and illegal and
be set aside.
14.
In Writ Petition No. 3085/98, the petitioner has challenged the
action of respondent based upon the agreement dated 27/1/1970
executed between the petitioner and the respondent NIT. The petitioner
Society was registered under Maharashtra Cooperative Societies Act vide
registration No.246. On 23/2/1968, the petitioner-society purchased land
area 6.81 Hects. Kh.No.15 and 17 of mouza Khamla from one Shri
Vithoba Nigote.
On 21/3/1969 the sub-Divisional Officer, Nagpur
granted permission for change of user of the land from Agriculture to non-
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agricultural purpose.
Respondent no.1 has sanctioned the layout vide
As per norm, some portion of the land is
agreement dated 27/1/1970.
It
reserved for public utility purpose like primary school or civic center.
is agreed between the petitioner and respondent no.1 that 10% of the
area of total plots shall be kept reserved and transferred in favour of
respondent no.1 and 2 free of cost for primary school, public institution
In pursuance to this agreement, some land is
and public utility purpose.
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kept reserved for primary school in the layout of the petitioner-society.
The petitioner has requested respondent no.1 to release the said land in
its favour to construct and/or to have primary school or such other
educational institution. In may 1997, the office bearers of the petitioner
society found some work of levelling of ground and digging of well in the
portion kept reserved for public utility purpose i.e. primary school. On
enquiry, the office bearers of the petitioner society came to know that the
said work had started by respondent no.3 - association. On 19/5/1997,
the petitioner protested this allotment of land to respondent no.3. On
16/6/1997, respondent no.1 confirmed allotment of land in favour of
respondent no.3. The work of levelling was stopped for some period but
later on it was recommenced. Hence, this petition.
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15.
In Writ Petition No. 1784/92, the petitioner is a Society
registered under the Societies Registration Act. Basically it consists of the
residents of Laxmi Nagar locality. By this petition, the challenge is to an
advertisement dated 18.01.1992 proposing allotment of plot no. 301/1 to
5 issued by respondent-NIT. By an agreement subsequently, as it was
released/allotted in favour of respondent no. 2-Society. The challenge
was raised accordingly. The challenge is same in the present petition also
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on similar lines with other petitions against NIT with regard to the
unauthorised allotment/distribution of plots not owned by NIT; there is
no question of automatic transfer agreement and as such the action is null
and void and it is beyond the scope and power of NIT. The whole action
need to be quashed and set aside as NIT grabbed the land free of cost. By
order dated 25.08.1992, this Court has granted order of status quo. The
status quo order has been continuing till this date. Respondent no. 1/NIT
by their written submission resisted the case on all counts on similar lines
along with other petitions and accordingly heard also.
16.
In Writ Petition No. 1034/95, the petitioners have challenged
the validity of action of respondent no. 2 NIT of allotting open space from
Khasra no. 65, Mouja Ajni in favour of respondent no. 3. Respondent no.
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2 admittedly entered into an agreement with respondent no. 3 for
sanction of the layout on 21.02.1985 and pursuance to the agreement, the
petitioner agreed to transfer the open space in favour of respondent no 2.
The said land accordingly allotted to respondent no.3. By order dated
07.04.1995, this Court has granted order of status quo as the respondents
commenced construction on the land/plot. The status quo is in force. As
the challenge revolves around the identical agreement, therefore, the
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petitioners have challenged the same; being without jurisdiction Authority
and contrary to the Act and; therefore, the whole action is null and void.
The respondents, by their reply resisted the same.
17.
In Writ Petition No. 1512/2000, the petitioner has challenged
the action of respondent based upon the agreement dated 9/7/1979
executed between the petitioner and the respondent NIT. The petitioner
Society is a Housing Society registered under the Maharashtra
Cooperative Societies Act. The Society has developed various layouts and
flat schemes for its members.
In one of its layout at Deendayal Nagar,
Nagpur, the Society intended to use its public utility land for construction
of hostel of working women or for adult education activity and
accordingly asked for necessary permission from respondents. However,
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respondent vide notification dated 31/3/2000 and corrigendum dated
7/4/2000 is seeking to acquire the said public utility land in the layout of
the petitioner society for allotment to some other trusts/societies for
being used for public utility, denying the claim of the petitioner. The
petitioner has also challenged excess reservation sought to be made for
public utility purpose in the land of the Society. Hence, this petition.
The common submissions are raised along with the other petitions based
In Writ Petition No. 1136/93 the petitioner has challenged the
18.
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upon the similar clauses and agreements in question.
action of respondent based upon the agreement dated 11/3/1970 in
question, executed between the petitioner and respondent NIT.
The
petitioner Society was formed and registered under Maharashtra
Cooperative Societies Act vide registration No. NGP/HSG/202.
object of the Society is to provide houses/Flats to its Members.
The
On
17/9/1966, in furtherance of the object of the Society, the Society
purchased land in S.No.90/3
admeasuring 11.84 acres in village Ajni,
P.H.No.9 from Shri S.S.Mahajan of Nagpur. On 20/9/1962, the vendor
Shri S.S. Mahajan had already obtained permission from S.D.O., Nagpur
for converting this land for non-agricultural use. On 16/1/1969 the land
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in question came within the purview of Ajni Street Scheme of Respondent
No.1 and sanctioned by State Government. On 11/3/1970, an Agreement
was executed between the petitioner society and the N.I.T. for sanction of
layout as the land came under the control of Respondent no.1 because of
sanctioned Street Scheme. Thereafter layout was sanctioned.
On
13/2/1993, respondent no.1 issued a notice asking the petitioner Society
to demolish the structure constructed on public utility plot marked A in
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Site Plan, which was constructed for library. Similar notice was being
issued on 15/12/1990 also which was replied by petitioner society on
27/12/1990. In March, 1993,
NIT demolished the structure marked 'A'
in the site plan. Hence this petition, challenging the action of respondent
no.1 of selling/leasing out the plot to respondent no.2, on similar
grounds.
19.
In Writ Petition No. 2322/92, the petitioner has challenged
the action of respondent based upon the agreement dated 20/8/1973 in
question executed between the petitioner and respondent NIT. As per
petitioner, on 19/10/1954, the petitioner and Mr. Patil purchased an
agricultural field by a registered sale deed from its original owner. On
2/1/1964, the said field diverted to non-agricultural use by the
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permission of the S.D.O. Nagpur.
On 20/8/1973, the agreement was
On
executed between the petitioner Shri Patil and respondent no.2.
23/2/1984, respondent no.2 published an advertisement in news paper
'Lokmat” invited the offers from the public for allotting the said public
utility land. On 16/3/1985, the petitioner wrote a letter to Executive
Officer, NIT Nagpur regarding the advertisement.
On 4/10/1992,
handover the possession. The petitioner replied to the letter dated
4/10/1992. ig
respondent no.2 and 3 again issued a letter to petitioner asking to
On 4/9/1992, respondent no.4 has informed the circle
Engineer - II that it is holding possession of the public utility and open
land. Hence, this petition on identical grounds with other writ petitions.
20.
In Writ Petition No. 822/99, the petitioner Cooperative
Housing Society has challenged the action of respondent no.1 NIT of
allotting a plot in favour of respondent No. 2 pursuance to an agreement
dated 27/01/1970 between petitioner and NIT.
Cooperative
Housing
Society
registered
The petitioner is the
under
the
Maharashtra
Cooperative Societies Act, 1960 having its registration No. 1265, working
since last 38 years. The petitioner had developed four lay outs in Nagpur
City. All these layouts are approved and sanctioned by the NIT.
The
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petitioner had purchased agricultural land vide Sale Deed dated
The land is
14/06/1968 having Khasra No. 130 of Mouza Parsodi.
the layout.
admeasuring 10 acres. Respondent No.1 had sanctioned and developed
The copy of the sanctioned plan is at Annexure 'B'.
sanctioning the plan,
While
respondent No.1 left open place reserved for
Primary School, and an open area. Respondent No. 1 also entered into
an agreement in question of development with petitioner on 27/01/1970.
14/06/1968.
the
Sale Deed dated
All of a sudden without responding to the earlier
the open
land owned
by the petitioner allotted to
correspondence
absolute owner by virtue of
Society, being
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Since last 29 years, the open land is in possession of the petitioner
respondent No. 2 without the consent of the petitioner. The petitioner,
therefore, immediately sent a letter on 14/12/1998 and legal notice
through counsel on 20/12/1998, but there is no reply from respondent
No.1. The main challenge of the petitioner revolve around Clause 10 of
the Agreement and action arising out of the same claiming it to be illegal,
arbitrary, malafide and bad in law, void ab-initio and further it is contrary
to the guidelines of the Government of Maharashtra dated 10.06.1996.
21.
In Writ Petition No. 1070/2000, petitioner-Cooperative Housing
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Society has challenged the decision and action of NIT of taking action
pursuance to agreement dated 10.03.1970 between petitioner and NIT
claiming allotment of the plot to the exclusion of other Education Society.
The petitioner adopted all the grounds and arguments made in Writ
Petition No. 934 of 1994 Friends Cooperative Housing Society
In Writ Petition No. 5145/07, the petitioner has challenged the
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22.
Nagpur Improvement Trust and 3 Others.
Vs.
action of respondent no.2 NIT in refusing to allot the public utility land
belonging to the petitioner society to the society itself and instead
allotting it to respondent no.4 society. On 23.8.1965 the petitioner society
had purchased land admeasuring 9.38 acres of Khasra No.22 of Mouza
Khamla from its original owner by a
sale-deed.
On 30.3.1966 the
diversion of the said land to non-agricultural use was permitted by Sub-
Divisional Officer, Nagpur.
23.
The layout plan for development of the land was sanctioned by
Respondent no.2 and an agreement was entered into between the
petitioner society and NIT.
As per the agreement the petitioner has
reserved 10% of the total land admeasuring about 14941.60 sq. ft. for

public utility purpose and transferred the same to NIT free of cost. On
18.6.1982 the petitioner had applied for re-allotment of the land and on
making such application NIT had vide its communication dated 18.6.1982
demanded an amount of Rs.22,413/- @ Rs.1.50 per sq. ft. from the
petitioner and the said amount was deposited by the petitioner.
On
15.11.1990 the NIT published an advertisement for allotment of the
Public Utility Land and out of the total public utility land a portion of land
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was allotted to one Nagarjun Medical Trust. On 14.6.1996 the petitioner
had preferred a Writ Petition No. 539/1994 challenging the said
allotment. However, this Court vide order dated 14.6.1996 refused to
On 15.3.1999 & 30.1.2000 the NIT published an
entertain the petition.
advertisement in the newspaper for allotment of remaining portion of
public utility land.
On 19.4.2000 the petitioner society made an
application for allotment of the remaining portion of public utility land.
On 19.4.2005 the petitioner issued a legal notice to the respondents for
allotment of the remaining portion of land to the petitioner society. The
petitioner made number of representations to the respondents regarding
allotment of the land. However, the respondent NIT did not consider the
request of the petitioner and allotted the said land to some other society.
The petitioner therefore, made an application to NIT on 17.7.2007 under

the Right to Information Act.
N.I.T. vide its letter dated 8.8.2007
informed that the remaining portion of land admeasuring about 961.58
The
sq. mtrs. Has been allotted to one Sneh Mahila Vikas Sanstha.
petitioner has, therefore, challenged this action of the respondent Trust by
way of this petition.
Respondent No.2 NIT resisted the petition by its reply dated
24.

12.12.2007. Respondent no.4 has also opposed the petition on various
In view of this, principally following interlinked points arise for
25.
grounds. The parties have filed their Written Submissions also.
consideration :-
a) Whether the clause contained in the agreement entered into between
the various petitioners and NIT by which the petitioners have
voluntarily agreed to surrender a portion of their land from the layout
to NIT free of cost for being used for public purpose is unenforceable,
void being unconscionable, grossly unequal in bargaining power and
opposed to public policy ?
.....No.
b) Whether anything including the decision reported in AIR 1995 SC 470
(Pt. Chaitram's case) precludes NIT from receiving and allotting the
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land voluntarily surrendered by the petitioners without paying any
monetary compensation and valid transfer of the land in view of the
case ? ......No.
binding agreements/undertakings in the facts and circumstances of the
c) Is the alleged clause and contract void and, therefore, needs any
declaration to that effect ? .....No.
....No.
d) Is the contract void for want of consideration/registration ?
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e) Whether the principles of law of limitation, delay, laches, waiver and
...Yes.
other equitable principles apply to the present Writ Petitions ?
f) Is NIT legally entitled to allot/lease out the said land to public
institutions or public trusts by following the process of law ? ......Yes.
g) Whether the petitioners have first or exclusive right to allotment of the
land in question ?
26.
.......No.
The common reasons :-
Writ Petition No. 5145/07 is not maintainable in view of the
decision in Writ Petition No. 539/94 which was between the same
parties.
While dismissing the earlier Writ Petition, this Court has
observed as under :-
“(A) As per initial agreement with the Nagpur
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Improvement Trust on 5.2.1971 vide Clause 9, it was
specifically agreed by the petitioners society to hand over the
free of cost.
public utility plot in favour of the Nagpur Improvement Trust
The validity of the said clause has not been
challenged at the relevant time. (Emphasis supplied),
(B) Sometime in 1982, the petitioner applied for re-
allotment of the said plot and offered certain price. However,
This was also not
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the same was not finally materialized.
challenged.”
It is clear that the earlier Writ Petition was dismissed on the ground of
delay and laches. There was no challenge to the validity of Clause 9 of
the agreement between the petitioner and NIT in question, at the
relevant time. The said judgment has attained finality and, therefore,
The contention now raised and reagitated in the
binds the parties.
present petition is impermissible.
(Gorie Gouri Naidu (Minor) and
another .vs. Thandrothu Bodemma & others : (1997) 2 SCC 552).
The Writ Petition is liable to be rejected also for the reasons given below.
27.
All the points are interlinked and interconnected, therefore
following common reasons :-
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The clause in the agreement is not unenforceable, void,
unconscionable, unequal and opposed to public policy :-
The relevant clause 8/9/10 of the respective agreement (for
short “the clause”), identical in all the agreements, is reproduced as
under:-
“(9) The party no.2 shall reserve in the layout the
percent of the total land or more as may be required, and
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transfer the same to the party no.1 free of cost, and duly
developed, for public utility purpose and for such other
purpose the party no.1 may determine, and such lands
according to its rules and regulations.”
The above quite similar clause is under challenge in all the writ petitions.
28.
The relevant Sections 23 & 25 of the Contract Act read as
under:-
“Section 23 : What consideration and objects are
lawful, and what not :- The consideration or object of an
agreement is lawful, unless ----
it is forbidden by law; or
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is of such a nature that, if permitted, it would
defeat the provisions of any law; or is fraudulent; or
involves or implies, injury to the person or
property of another; or
the Court regards it as immoral, or opposed to
public policy.
In each of these cases, the consideration or object of an
Every agreement of
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agreement is said to be unlawful.
which the object or consideration is unlawful is void.”
“Section 25. Agreement without consideration, void,
unless it is in writing and registered or is a promise to
compensate for something done or is a promise to pay a
debt barred by limitation law – An agreement made
without consideration is void, unless--
1)it is expressed in writing and registered under the law
for the time being in force for the registration of
documents and is made on account of natural love and
affection between parties standing in a near relation to
each other; or unless,
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32
2) it is a promise to compensate, wholly or in part, a
person who has already voluntarily done something for
the promisor, or something which the promisor was
legally compellable to do or unless,
3)it is a promise, made in writing and signed by the person to
be charged therewith, or by his agent generally or specially
authorised in that behalf, to pay wholly or in part a debt of
ig
which the creditor might have enforced payment but for the
law for the limitation of suits.
In any of these cases, such an agreement is a contact.
Explanation 1.-- Nothing in this section shall affect the
validity, as between the donor and donee, of any gift
actually made,
Explanation 2.-- An agreement to which the consent of the
promisor is freely given is not void merely because the
consideration is inadequate; but the inadequacy of the
consideration may be taken into account by the Court in
determining the question whether the consent of the
promisor was freely given.”
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33
29.
The Clause 16 of the agreement (in Writ Petition No. 934/94):-
“16. It is hereby agreed between the parties hereto
that in the event of breach on the part of party no.2 of any of
themes expressed herein or his failure to comply with any of
the terms expressed herein mentioned the party no.1 will not
grant permission for constructing the buildings or any plot(s)
ig
in this layout or in any part thereof.”
The material Sections and Scheme of the Nagpur Improvement
30.
Trust Act (the “NIT Act”) are :-
“Section 58 : Power to purchase or lease land by
agreement:
The Trust may enter into an agreement with any person for the
acquisition, by purchase, lease or exchange by the Trust from such
person, of any land within the area comprised in a sanctioned scheme.”
“Section
68
:
Abandonment
of
acquisition
in
consideration of special payment :
1)Wherever in any area comprised in any improvement scheme
under this Act the State Government has sanctioned the
acquisition of land which is subsequently discovered to be
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34
unnecessary for the execution of the scheme, the owner of
the land, or any person having an interest therein may make
an application to the Trust (requesting that the acquisition of
the land not required for the purposes of the scheme should
be abandoned on his executing an agreement to observe
conditions specified by the Trust in respect of the
development of the property and to pay a charge to be
ig
calculated in accordance with sub-section (2) of section 69 of
the Act.
2) The Trust shall admit every such application if it --
a) reaches it before the time fixed by the Deputy
Commissioner under section 9 of the Land Acquisition Act,
1894, for making claims in reference to the land, and
b) is made by any person who has an interest in the land or
holds a lease thereof, with an unexpired period of seven
years,
3) On the admission by the Trust of any such application, it
shall forthwith inform the Deputy Commissioner, and the
Deputy Commissioner shall thereupon stay for a period of
three months all further proceedings for the acquisition of the
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35
land, and the Trust shall proceed to fix the conditions on
which the acquisition of the land may be abandoned.
4)When an agreement has been executed in pursuance of sub-
section (1) in respect of any land the proceedings for the
acquisition of the land shall be deemed to be abandoned,
5)The provisions contained in sections 70, 71, 72, 73 and 74
relating to the assessment, interest, recovery and payment of
ig
betterment charge and civil suits shall apply mutatis mutandis
to the assessment, interest, recovery and payment of
abandonment charge and civil suits in respect thereof.”
“S. 45. Notification of sanction of improvement scheme
and other regarding vesting of property in Trust :-
1) Whenever the State Government sanctions an improvement
scheme, it --
a) shall announce the fact by notification and, except in the
case of a deferred street scheme, development scheme,
or future expansion or improvement scheme, the Trust
shall forthwith proceed to execute the same,
b) may order that any street, square, park, open space or

other land, or any part thereof, which is the property of
the Government and managed by the Central
Government or the State Government shall, subject to
such conditions as it may impose, vest in the trust for
the
purpose of the scheme.
2) The publication of a notification under sub-section (1) in
respect of any scheme shall be conclusive evidence that the
31.
ig
scheme has been duly framed and sanctioned.”
NIT is created by the State Government for the improvement
Nagpur through
its
various improvement schemes.
of the city of
Section 26 of the NIT Act empowers the Trust to frame various schemes.
Section 39 provides that such schemes framed by the NIT are required
to be published by notification. Section 39 is equivalent to Section 4
of the Land Acquisition Act.
The provisions of Sections 40, 41, 42,
43 & 44 further clarify that the improvement schemes are sanctioned by
the Government by notification issued under Section 45 of the NIT Act
which is equivalent to Section 6 of the Land Acquisition Act.
The
alteration/improvement to the scheme is permissible under Section 46
of the NIT Act. NIT, therefore, has jurisdiction over the areas/lands

which fall within the sanctioned improvement schemes being part and
parcel of notification under Section 6 which is equivalent to Section 45
of the NIT Act. Having once sanctioned the scheme by Government, the
NIT need to implement the said scheme as per the mandate of Section
45 of the NIT Act. NIT thereafter can proceed to implement the scheme
by acquiring the entire land and further can use the said land for the
purpose of scheme. The Trust is further entitled to utilise/dispose of the
ig
remaining land as per its Land Disposal Rules (for short “the NIT
Rules”). Section 76 of the NIT Act permits NIT to dispose of the land.
Section 76 reads as under :-
“76. Power to dispose of land :- Subject to Rules made by
the State Government under this Act, the Trust may retain or
may let on hire, lease, sale, exchange or otherwise dispose of
any land vested in or acquired by it under this Act.”
It is clear that Section 58 of NIT Act empowers/authorises the Trust to
enter into an agreement with any person for the acquisition, by
purchase, lease or exchange by the Trust from such person of land
within the area comprised in a sanctioned scheme.
32.
In totality, the Act provides and permits NIT to enter into an

agreement with any person.
The petitioner society and/or individual
person have accordingly knowing fully the scheme of NIT and purpose
and object of the same voluntarily without any influence and/or
misrepresentation of any kind by NIT, approached NIT and voluntarily
entered into the commercial transaction/agreement in question.
The
application was moved/filed for sanction of the private layout. The said
private layout was sanctioned and the petitioner society/person in view
ig
of the agreed terms acted upon and enjoyed all the benefits including
selling of the plots to its respective members.
The said plot
owners/members individually applied for obtaining sanction knowing
The subsequent
fully the terms and conditions of those clauses.
purchasers/members also understood the said clauses and obtained the
individual sanctions. The respective members/individual members have
further utilised the said plots/layouts and constructed the buildings/flats
and enjoyed all the benefits in view of the said agreement and sanction of
the private layout by NIT.
33.
There is nothing on record to justify their challenge now to the
said agreements and basically the Clause. The petitioners are admittedly
not challenging the whole agreement. The petitioners have admittedly

acted upon and have been enjoying the benefits pursuant to the said
34.
agreement till this date.
We have noted that there is no specific pleading as to how the
contract or the clause in the contract is void at the instance of the
petitioners, who entered into such commercial contract with full
knowledge of those clauses/conditions and factually acted upon the same
ig
till the date. Therefore, in the absence of pleading, material and proof,
such plea is unacceptable. (State of Kerala & another .vs. M.A. Mathai
(2007) 10 SCC 195) and Union of India .vs. Surjit Singh Atwal
(1979) 1 SCC 520.
35.
The present contract, unless set aside or declared to be void by
the Court, is binding especially to the parties who voluntarily entered into
such contracts acted upon and enjoyed all the benefits.
Sultan Sadik
.vs. Sanjay Raj Subba and others (2004) 2 SCC 377, Velamuri
Venkata Sivaprasad (Dead), By Lrs. .vs. Kothuri Venkateswarlu,
(Dead) By Lrs. and others
(2000) 2 SCC 139, Tayyabbhai,
Mohammedbhai Bagasarwalla and another 1997(2) Mh.L.J. 1.
36.
Such terms and conditions, therefore, in no way can be said to

be unconscionable and void terms in contract as submitted based upon
Central Inland Water Transport Corporation Limited .vs. Brojonath
Ganguly reported in (1986) 3 SCC 156 & LIC of India and another
.vs. Consumer Education and Research Centre and others reported in
(1995) 5 SCC 482. This can never be said to be an unconscionable
bargain as noted, the terms and conditions have been settled over the
years which are formed by consent with the persons having commercial
ig
interest and accordingly, it has been widely adopted and utilised by
people at large. The terms and conditions, therefore, cannot be said to be
unfair and unreasonable, especially when the parties bargaining powers
and authority throughout was not one sided and/or unequal.
37.
There is no substance in argument that there was gross
inequality of bargaining power. In view of above, reliance as placed on
Premsingh and others .vs. Birbal and others (2006) 5 SCC 353,
Yamunabai Anatrao Adhav .vs. Anantrao Shivraj Adhav (1988) 1 SCC
530 that there is no need of a decree to set aside such document as
Clause 9/8 is void ab initio, especially when the agreement as well as
clause in question are clear and there is no ambiguity at any point of
time.
The nature of transaction in the background read with the

surrounding and attending circumstances and especially when the
document/agreement in question is a commercial document, in no way
said to be unclear or with any infirmity or ambiguity (State Bank of
India and another .vs. Mulla Sahakari Sakhar Karkhana Limited
(2006) 6 SCC 293, Sappani Mohammad Mohideen .vs. R.V.
Sethusubramania Pillai (1974) 1 SCC 615.
The terms and conditions in questions are binding between the
parties. (Bihar State Electricity Board, Patna and others .vs. M/s.
38.
Green Rubber Industries and others : AIR 1990 SC 699).
They have
already acted upon those terms and conditions. Therefore, the entire
agreement need to be respected in totality.
There is no question of
reading and/or severing any unequal clause in isolation or in parts. The
party to an agreement cannot be allowed to approbate and reprobate as
expressed by the Supreme Court in the case of Harshad Kumar
Natwarlal Dalal and others (1981) 1 SCC 538.
Paragraph 48 is
reproduced below :-
“48.
It is a fundamental principle of general application that
if a person of his own accord, accepts a contract on certain
terms and works out the contract, he cannot be allowed to

adhere to and abide by some of the terms of the contract which
proved advantageous to him and repudiate the other terms of
the same contract which might be disadvantageous to him.
The maxim is qui approbat non reprobat (one who approbates
cannot reprobate). This principle, though originally borrowed
from Scots Law, is now firmly embodied in English Common
Law. According to it, a party to an instrument or transaction
ig
cannot take advantage of one part of a document or transaction
and reject the rest. That is to say, no party can accept and
reject the same instrument or transaction (Per Scrutton, L.J.,
Verschures Creameries Ltd. v. Hull & Netherlands Steamship
Co.; see Douglas Menzies v. Umphelby; see also Stroud's
Judicial Dictionary, Vol. I, page 169, 3rd Edn.).
The Apex Court has further reiterated the principle of approbate and
reprobate and dismissed the matter on that count also. (Kashmir Singh
.vs. Union of India and other; (2008) 7 SCC 259).
39.
In the case of Prem Singh and others .vs. Birbal and others
(2006) 5 SCC 353, the Supreme Court has held that with respect to
both void, as well as voidable transactions, the action has to be brought
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43
within the period of limitation. We cannot overlook the fact that in the
present case, the petitioner has invoked Article 226 & 227 of the
Constitution of India and raised these challenges after more than 11
years. Therefore, the facet of the period of limitation though not strictly
applicable to writ jurisdiction, still in cases like this the principle of filing
of suit for cancellation of such transaction as governed by Article 59 even
if any just cannot be overlooked. The relevant Articles of Limitation Act
ig
are Article 58 (any declaration) or Article 59 (for cancellation or setting
Therefore, in all
aside of instrument) or Article 113 (residuary clause).
these cases, limitation would not be more than 3 years. The petitions,
therefore, suffer from grave delay which is not explained at all. State of
Madhya Pradesh and another .vs. Bhailal Bhai and others AIR 1964
SC 1006.
40.
The Apex Court in State of Madhya Pradesh (supra) has
observed in paragraph no.21 as under :-
“21.The learned Judges appear to have failed to notice that the
delay in these petitions was more than the delay in the petition
made in Bhailal Bhai's case, 1960 M.P.C. 304 out of which Civil
Appeal No. 362 of 62 has arisen. On behalf of the respondents-

petitioners in these appeals (C.A. Nos. 861 to 867 of 1962) Mr.
Andley has argued that the delay in these cases even is not
such as would justify refusal of the order for refund. We argued
that assuming that the remedy of recovery by action in a civil
court stood barred on the date these applications were made
that would be no reason to refuse relief under Art. 226 of the
Constitution. Learned Counsel is right in his submission that
ig
the provisions of the Limitation Act do not as such apply to the
granting of relief under Art. 226. It appears to us however that
the maximum period fixed by the legislature as the time within
which the relief by a suit in a civil court must be brought may
ordinarily be taken to be a reasonable standard by which delay
in seeking remedy under Art. 226 can be measured. This Court
may consider the delay unreasonable even if it is less than the
period of limitation prescribed for a civil action for the remedy
but where the delay is more than this period, it will almost
always be proper for the Court to hold that it is unreasonable.
The period of limitation prescribed for recovery of money paid
by mistake under the Limitation Act is three years from the date
when the mistake is known. If the mistake was known in these
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45
cases on or shortly after January 17, 1956 the delay in making
these applications should be considered unreasonable. If, on
the other hand, as Mr. Andley seems to argue, that the mistake
discovered much later this would be a controversial fact which
cannot conveniently be decided in writ proceedings. In either
view of the matter, we are of opinion that the orders for refund
made by the High Court in these seven cases cannot be
41.
ig
sustained.”
The Apex Court in Union of India .vs. Surjit Singh Atwal
reported in (1979) 1 SCC 520 refused to allow plea of illegality of the
agreement after 13 years even in a civil suit. In the present facts and
circumstances, there is no case at all to allow to raise such pleas restricted
only to the Clause of the agreement after more than 13 to 20 years.
It is
not correct submission that no limitation would be applicable in the event
the transaction/agreement is void (Prem Singh (supra).
In the present
case, the challenge is raised by invoking the writ jurisdiction only to the
Clause of the binding agreement.
It is not the case like a decree being
void or nullity at the inception as a whole.
The Apex Court has further
clarified in Eastern Coalfields Limited .vs. Dugal Kumar; 2008 (10)
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46
SCALE 449 that the delay or laches on the part of the petitioner can be
Inordinate delay, in the
granted in favour of such petitioner or not.
considered at the time of final hearing also whether relief should be
present case, is also an additional factor to refuse to exercise discretion in
favour of the petitioner.
When the parties entered into agreement, they were fully
42.
ig
aware of the nature of transaction, conditions and respective obligations.
There was no objection raised at any point of time while entering into
such agreement and even thereafter when petitioners and such other
persons who based upon the said agreement got the benefit out of the
same. We cannot read the clauses in isolation. We have to read the
whole agreement in question. It is very clear even from the provisions of
the Contract Act that the consideration of any such agreement was
permissible and not unlawful and/or not prohibited by law and was not
to defeat the provisions of any law or is fraudulent and/or is immoral or
opposed to public policy.
43.
The submissions, that such contract and especially the Clause
is void, in view of provisions contained under Section 23/25 of the
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47
Indian Contract Act being opposed to public policy; violative of
fundamental rights of the petitioner; violative of the right of property of
petitioner/society; because of unequal bargain power; being forbidden by
law and further in view of Section 25 of the Contract Act, as the
agreement to transfer is without consideration and the same was not
We have noted that there are no averments of undue influence
ig
44.
registered, have no force.
and/or misrepresentation or any sort of coercion or threat at the time of
entering into the agreement in question by the petitioner with NIT.
There is no justification whatsoever on record as to why they have not
questioned and or challenged the said clause at an earlier stage.
There is substance in the argument of respondents/allottees
45.
that the doctrine/principle of waiver also applies in cases like this. The
petitioners and such other persons took conscious decision to enter into
such agreement and bind themselves to the terms and conditions.
Therefore, whatever rights even if any they have voluntarily waived and
abandoned as there was nothing wrong at the relevant time and even
otherwise to enter into such agreement as it was within permissible limits
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48
The doctrine/principle of waiver, while referring to an earlier
46.
of both the parties.
judgment reported in 1959 Supp 2 SCR 217 (Waman Shriniwas Keni
versus Ratilal Bhagwandas & Company) has been defined by the Hon'ble
Apex Court in Paragraph No.5 in the case of Diwan Singh .versus.
Champat Singh & Ors., reported in 1969 (3) SCC 445 as below :
ig
“waiver is the abandonment of a right which normally
everybody is at liberty to waive. A waiver is nothing else it amounts to
release. It signifies nothing more than an intention not to insist upon the
right.”
47.
The Apex Court in the case of Satyanarayan versus Yelloji Rao,
AIR 1965 Supreme Court, 1405 has explained the said principle in
Paragraph No.11, as below :-
“We have used the expression waiver in its legally accepted
sense, namely,
“waiver is contractual, and may constitute a cause of action: it
is an agreement to release or not to assert a right.”
48.
The principle of waiver is based on the maxim of law “quilibet
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49
potest renunciare juir pro se introducto” which means, “an individual may
renounce a law made for his special benefit”. (Reference : 1994 (4) SCC
49.
422.
The Apex Court in Sikkim Subba Associates vs. State of
Sikkim reported in (2001) 5 SCC 629 further elaborated and reiterated
the meaning of “waiver” and “consideration” in reference to an
ig
agreement with the State in following words by observing that “he who
“Waiver
seeks equity must do equity” :-
involves
a
conscious,
voluntary
and
intentional relinquishment or abandonment of a known,
existing legal right, advantage, benefit, claim or privilege,
which except for such a waiver, the party would have enjoyed.
The agreement between the parties in this case is such that its
fulfilment depends upon the mutual performance of reciprocal
promises constituting the consideration for one another and
the reciprocity envisaged and engrafted is such that one party
who fails to perform his own reciprocal promise cannot assert
a claim for performance of the other party and go to the
extent of claiming even damages for non-performance by the
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50
other party.”
In the present case, we have no doubt that there are reciprocal
followed by the parties.
promises/obligations which are required to be performed and/or
Admittedly, the agreement is not one sided.
The petitioners have voluntarily entered into contract and already acted
upon and now avoiding to perform their part of the obligations by
challenging the Clause of the agreement without any basic pleading and
ig
prayer. The submission, therefore, that there was no consideration paid
or received by the person like the petitioner has no force. The reciprocal
obligation, in the facts and circumstances of the case, itself falls within
the ambit of the term “consideration” as per the Contract Act. Knowing
fully the terms and conditions both the parties have abandoned and
waived their various rights and acted upon the said agreement
voluntarily; firstly, by surrendering the portion of the land to the Trust
voluntarily for public purpose.
NIT has released the property from
acquisition which was admittedly notified pursuant to Sections 31, 37 &
46 of the NIT Act. There is no dispute that as per Section 45 of the NIT
Act, once the land/scheme is notified which is conclusively of duly
formed and sanctioned scheme, NIT pursuant to this policy and
agreement permitted the person like the petitioner to develop the layouts
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51
and further permitted to be sub-divided into plots. In totality, the object
of releasing the property from acquisition and then getting the same
portion of land from the land owner. The Trust has been utilising and
allotting the said portion of surrendered land for charitable and public
purpose. There is nothing to show that the sanctioned scheme and/or
lands and layouts are contrary to the development plan. In view of this,
there is no force in contention that the agreement and/or clause is void
ig
for want of consideration and it is beyond or opposed to public policy.
50.
In Babulal Verma .vs. Surat Municipal Corporation reported
in 2008 (3) SCALE 206 : In Halsbury's Law of England, Volume 16(2) 4th
Edition, para 907, it is stated :-
“The expression 'waiver' may, in law, bear different
The primary meaning has been said to be the
meanings.
abandonment of a right in such a way that the other party is
entitled to plead the abandonment by way of confession and
avoidance if the right is thereafter asserted, and is either
express or implied from conduct. It may arise from a party
making an election, for example whether or not to exercise a
contractual right... Waiver may also be by virtue of equitable
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52
or promissory estoppel; unlike waiver arising from an election,
no question arises of any particular knowledge on the part of
the person making the representation, and the estoppel may be
suspensory only.... Where the waiver is not express, it may be
implied
from conduct which is inconsistent with the
continuance of the right, without the need for writing or for
consideration moving from, or detriment to, the party who
ig
benefits by the waiver, but mere acts of indulgence will not
amount to waiver, nor may a party benefit from the waiver
unless he has altered his position in reliance on it.”
In the present case, as we have noted both the parties have altered their
position. The petitioners have already got the benefit out of the same.
This is a case of express waiver. The legal principle emerging from these
decisions is also stated in Craies on Statute Law (6th Edn.) at page 369 as
follows :-
“As a general rule, the conditions imposed by statutes
which authorise legal proceedings are treated as being
indispensable to giving the court jurisdiction.
But if it
appears that the statutory conditions were inserted by the
legislature simply for the security or benefit of the parties to
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53
the action themselves, and that no public interests are
not be considered as
involved, such conditions will
affecting the jurisdiction of the court.”
indispensable, and either party may waive them without
Applying the above principles to the present case, it must be
held that the benefit of notice provided under the Act and Rules being for
the benefit of the Appellant in which no public interests are involved, he
ig
has waived the same.”
In the present case also, the petitioners waived the rights based upon the
voluntarily agreed terms and conditions of the contract. There is nothing
illegal and/or against the public policy if a party agreed to particular
terms by abandoning or waiving his rights and accordingly got the
benefits also.
51.
A similar conclusion was reached in the case of Krishna
Bahadur v. Purna Theatre [(2004) 8 SCC 229], and the principle has been
stated far more precisely, in the following words :
“9. The principle of waiver although is akin to the principle of
estoppel; the difference between the two, however, is that
whereas estoppel is not a case of action; it is a rule of
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54
evidence; waiver is contractual and may constitute a cause of
action; it is an agreement between the parties and a party
fully knowing of its rights has agreed not to assert a right for
a consideration.
10. A right can be waived by the party for whose benefit
certain requirements or conditions had been provided for by a
statute subject to the condition that no public interest is
ig
involved therein. Whenever waiver is pleaded it is for the
party pleading the same to show that an agreement waiving
the right in consideration of some compromise came into
being. Statutory right, however, may also be waived by his
conduct.”
[See also Bank of India v. O.P. Swarnakar (2003) 2 SCC
721].
52.
In totality, therefore, the petitioners through their conduct have
waived their rights.
The conduct operates against them with respect to
ascertaining a right over a portion of the land in question.
53.
In this background, it is worth to mention the observations
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55
given by the Apex Court in Babulal (supra) to answer all the basic
contentions as raised in the present matter.
“27. We are, however, not unmindful of the fact that
a statute of town planning ex facie is not a statute for
acquisition of a property. An owner of a plot is asked to part
therewith only for providing for better facilities of which he
would also be a beneficiary. Every step taken by the State
ig
does not involve application of the doctrine of eminent
domain.
In this case, the appellant did not oppose the draft
It accepted that the State had a right to do so.
scheme.
Existence of a public purpose and increase in the valuation of
the property was admitted.
There exists a distinction in the
action of the planning authority as regards vesting of a
property in it and one so as to enable it to create a third party
interest vis-a-vis for the purpose of re-allotment thereof. In
the former case, the vesting of the land may be held to be an
act of acquisition, whereas in the latter, it would be
distribution of certain benefits having regard to the purpose
sought to be achieved by a statute involving town planning.
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56
It was on that legal principle, this Court in State of Gujarat v.
Shantilal Mangaldas & others [1969 (3) SCR 341], opined
that when a development is made, the owner of the property
gets much more than what would have he got, if the same
remained undeveloped in the process as by reason thereof he
gets the benefit of living in a developed town having good
town planning.”
ig
(emphasis added).
54.
In Ranganayakamma and another v. K.S. Prakash (D) by
L.Rs. and others (JT 2008 (8) SC 510) in reference to Sections 23 & 25
of the Contract Act, 1872 the Apex Court has elaborated the aspect of
“consideration” including nominal and inadequate consideration as
under:-
“49. Mr. Chandrasekhar, however, has drawn our attention to
Anson's Law of Contract, page 154, wherein the law is stated to be as
under :-
“.....Some additional factor is required to bring a case within one
of the exceptions; for example, the existence of a relationship in which
one party is able to take an unfair advantage of the other. In the absence
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57
of some such factor, the general rule applies that the courts will enforce a
promise so long as some value for it has been given.”
As regards, nominal and inadequate consideration, the learned Author
states :
“Nominal consideration' and 'nominal sum' appear...... as terms of
art, to refer to a sum as consideration which can be mentioned as
consideration but is not necessarily paid.......”
ig
“50. The same principle might have been applied in the Indian
Contract Act, “Consideration” has been defined in Section 2(d) of the
Indian Contract Act, which reads as under :-
“(d) When, at the desire of the promisor, the promisee or any
other person has done or abstained from doing, or does or abstains from
doing, or promises to do or to abstain from doing, something, such act or
abstinence or promise is called a consideration for the promise.”
“51. Consideration even in the Indian context would mean a
reasonable equivalent or other valuable benefit passed on by the promisor
to the promisee or by the transferor to the transferee. Love and affection
is also a consideration within the meaning of Sections 122 and 123 of the
Transfer of Property Act.”
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58
55.
In Writ Petition No. 3208/89 Pragati Housing Society .vs.
Nagpur Improvement Trust, a Division Bench of this Court by order
dated 7.2.1990 after considering the similar rival contentions observed as
under :
“Having obtained sanction on that basis it is impermissible
for the petitioners to go behind the same. There is nothing
illegal in the agreement. The property vests by surrender in
Under the circumstances, no question of
development.
ig
the Trust for the limited purpose of having a planned
paying compensation by the Trust can arise.
Provisions
relating to acquisition and payment of compensation
(Section 56 of the Nagpur Improvement Trust Act) are not
attracted in such surrenders.”
In Writ Petition No. 539/94, another Division Bench of this
Court by order dated 14.6.1996 considering the similar agreements and
challenge rejected the Writ Petition by observing as under :-
“(A) As per the initial agreement with the Nagpur
Improvement Trust on 5.2.1971 vide Clause 9, it was
specifically agreed by the petitioner society to hand over the
public utility plots in favour of the Nagpur Improvement
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59
Trust free of costs. The validity of the said clause has not
been challenged at the relevant time.”
It is worth to mention that this Court in Writ Petition No.
2978/98 while considering the similar agreement under the Maharashtra
Municipalality Act, 1965 whereby the person like the petitioners agreed
to hand over 10% of the land free of cost to respondent no.1, the
Amravati Municipal Corporation and State Corporation to retain
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possession for public purpose, it was specifically provided that the
petitioner shall have no right or ownership on the said land. Another
agreement was entered between the parties. The said plot was thereafter
allotted to other society like the petitioners and leased out for 30 years on
nominal rent. The petitioner thereafter based upon Pandit Chetram case
raised quite similar points. A Division Bench based upon the agreements
rejected the similar contentions in that petition also on the ground of
estoppel. The Civil Appeal Nos. 3389/2000 and 3390/2000 Ganesh
Sahakari .vs. Amravati Municipal Corporation against the said
judgment were also dismissed by the Supreme Court by order dated
3.8.2005.
56.
We have noted that even otherwise, a surrender of private land
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60
for public purpose and/or acquisition of portion of land for public
purpose is not an unknown phenomenon. In M.C. Mehta .vs. Union of
India & others (1996) 4 SCC 351, the Supreme Court has issued
direction that land which would become available on account of shifting
and relocation of hazardous industries from the city of Delhi shall be used
in the manner as provided for in the said judgment, thereby the land
owner was declared to develop a portion of the said land after
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surrendering and deducting to the Delhi Development Authority, a
portion of the land for development of green belts and other places. The
land which was required to be surrendered was upto 68%.
The Apex
Court rejecting the case of landowners for compensation in lieu of
surrender of portion of land declined the said compensation on the
ground that the FSI permitted to be used on the land retained by the
owner was 1.5% of the permissible FSI and hence the same was a
consideration for surrendering the land.
(M.C. Mehta .vs. Union of
India & others 2000 (5) SCC 525). The Apex Court in Bombay Dyeing
& Manufacturing Company Limited .vs. Bombay Environmental
Action Group and others (2006) 3 SCC 434 has upheld the Clauses of
the Development Control Rules, 1958 applicable to Bombay which
provide for surrender of the land if the landholder seeks to develop the
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61
remaining land for other purposes as provided under the Rules.
The
decision as relied in Vrajlal Jinabhai Patel, since deceased through his
L.Rs. Smt. Jagrati Vrajlal Patel and another .vs. State of Maharashtra
and others 2003(3) Mh.L.J. 215 to submit that an ownership in open
space under the layout could be vested or transferred to the Municipal
Council is not applicable on facts and circumstances as referred above.
This is not a case also where there is any question of blocking and
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encroachment upon the open space and plot or area of the locality. The
respondents State and/or NIT are bound to stick to the development plan
and scheme as announced. The Apex Court in Chairman, Indore Vikas
Pradhikaran .vs. Pure Industrial Coke & Chemicals Limited and
others (2007) 8 SCC 705 while dealing with the aspect of Town
Planning and Articles 300-A, 14 & 17 of the Constitution of India has also
observed :
“...........The courts must make an endeavour to strike a
balance between the public interest on the one hand and
protection of a constitutional right to hold property, on the
other. For the aforementioned purpose, an endeavour should
be made to find out as to whether the statute takes care of
public interest in the matter vis-a-vis the private interest, on
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62
the one hand, and the effect of lapse and/or positive inaction
on the part of the State and other planning authorities, on the
other.”
NIT or such other local authority need to consider the purpose, scheme,
development plan and the circular issued from time to time by striking a
balance of public and private interest. The petitioners are bound by the
agreement and undertaking as given. In fact, both the parties are bound
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by the agreements. In totality the permissible action of respondent NIT
is within the frame of law and the record. There is no substance in these
petitions.
57.
Furthermore, factually, the Clause of the agreement is not
void and illegal for want of consideration. After considering the whole
scheme of the NIT Act and especially Sections 29 to 70 & 121 read with
the agreement entered into by the parties shows that the said agreement
creates reciprocal rights/obligations with following major objects as
rightly
contended
by
the
learned
Counsel
appearing
for
respondents/allottees.
(a) Abandonment of the land from acquisition of NIT,
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63
(b)Permission to develop the said land and sanction of a scheme of a
layout therein,
(c) Entrustment of the job of supervision of such development on NIT,
(d) Transfer of the public utility land, reserved in the said layout, to the
NIT,
(e) immediate and reciprocal permission to develop the land by making a
layout in the said land and permission to sell plots therein, i.e.
58.
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permission for commercial exploitation of the land,
Thus, seeking abandonment of the land from acquisition
proceedings is a major and huge benefit which the petitioner society
gained from the agreement.
One more benefit which the petitioner derived from this
59.
agreement is immediate and reciprocal sanction for development of the
land (scheme of layout) and permission for its commercial exploitation,
thus averting further loss of time, money and energy, in obtaining such a
permission and sanction, presuming that there would be no acquisition.
60.
The consideration for the voluntary surrender as recorded
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64
above is also that the land which was under acquisition by NIT for the
The land has been
used for developing the layout by the petitioners.
street scheme has been released from acquisition and permitted to be
permitted to be sub-divided into plots. The object of surrendering the
land to NIT voluntarily by the petitioners and such other persons in this
background is definitely charitable and for public purpose. Apart from
They have constructed various buildings/flats on the
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agreement.
this, the petitioners have got all benefits and advantages under the
The land which they have
developed plots after forming layouts.
surrendered, therefore, cannot be said to be free of consideration. In this
background, the said surrender cannot be said to be immoral or opposed
to public policy.
The whole basic object of respondents is also to
distribute or allot such surrendered portion of land for public utility, i.e.
It is not the case of the petitioner that they need to
for public purpose.
surrender all developed plots or layouts. It is only portion which they
surrendered after getting all the benefits as agreed.
61.
the
The submission of petitioners, as noted above, revolves around
the
common
Clause
of
the
respective
agreements,
being
unreasonable, irrational, illegal and void ab initio as it is without

consideration and registration. There is no force as already noted above
even in this submission, especially when the said Clause has been agreed
voluntarily.
The
quantum
of
to be incorporated by the petitioner society on its free consent and
consideration
and/or
nature
of
consideration cannot be permitted to be agitated now in the Writ
Petitions. It is the mutual understanding based upon the total terms and
conditions of the said agreement. There is no question of any registration
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in this background of the matter. NIT as per scheme wants to reallot or
lease out for public purpose, these public utility plots. The submission
that theory of waiver of right to receive compensation for the said land
In this background, the
still results in void agreement is not correct.
Apex Court decision as relied, in Waman Shriniwas Kini .vs. Ratilal
Bhagwandas & Co. 1959 Supp. (2) SCC 217 = AIR 1959 SC 689 is of
The law and principle of Sections 23 & 25 is not in
no assistance.
dispute. The agitation is the applicability of those principles to the facts
and circumstances of the present case. There is nothing to justify that the
plea of waiver cannot be raised in the present case. There is nothing
opposed to public policy in the present case. It is not the case that the
whole agreement is against the public policy, but only the clause which is
said to be void.
The clause as referred above is interconnected and
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66
provides intermixed obligations and conditions, voluntarily entered into
62.
by the parties.
In Pandit Chet Ram (supra), there was no occasion in that
case to consider the agreement like present one whereby the parties
themselves already acted upon and enjoyed the benefits.
The
consideration so got by the petitioners in lieu of so-called compensation is
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already elaborated and especially when they themselves agreed for the
same, that itself distinguishes the facts and circumstances of the present
case with that of Pandit Chet Ram.
There was no such voluntary agreement involved in the said
matter. The said challenge is raised only by a very few people of the
society. Most of them have enjoyed the benefits of the the NIT scheme.
NIT pursuant to their scheme instead of acquiring the land sanctioned
permitted the petitioners to enjoy the position and utilised the same for
their individual members' benefit by keeping their power and authority to
allot the already declared public utility plots to the educational
institutions and/or public Trusts by following the due procedure of law of
advertisement. Such facts were not in the background of Pandit Chetram
case. Supreme Court has dealt with sub-section (3) of Section 313 of
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67
Delhi Municipal Corporation Act.
Even the case of Pandit Chetram
(supra) was considered and the challenge was negatived long back by
accepting the case of respondents in identically placed facts and
circumstances of the case.
63.
The same is the case in Yogendra Pal (supra). The facts and
circumstances of the said Supreme Court case are also different and
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distinguishable in view of the reasoning given in view of above paras.
Such agreements cannot be said to be violative of fundamental rights of
persons like the petitioners and/or opposed to public policy. It is not in
breach of any rights as guaranteed under Article 31 and Article 300-A as
submitted by the petitioners.
The Apex Court's decisions in Central
Inland Water Transport Corporation Ltd. .vs. Brojonath Ganguly
and LIC of India and another .vs. Consumer
(1986) 3 SCC 156
Education and Research Centre and others (1995) 5 SCC 482 are,
therefore, also of no assistance to the petitioner.
principle as laid down is in no dispute.
that
case
and
distinguishable.
present
case
makes
The doctrine and
The facts and circumstances of
the
position
distinct
and
In Yogendrapal (supra), there was challenge to the
provisions of the Punjab Municipal Act. There is no challenge in the
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68
present case at any point of time to the provisions as well as to the
scheme as announced by the respondent NIT at relevant time and till this
date. The petitioners have in fact agreed voluntarily and enjoyed the
benefits and after so many years restricting their challenge only to the
Clause of the agreement whereby they are refusing to perform their part
of reciprocal obligations which were basic terms and conditions of the
consent contract as respondent NIT has already acted upon the said
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conditions and sanctioned the plot and further layouts upon which
respective members and/or even third persons have constructed the
building. As noted, the land could have been acquired by NIT but for the
policy and the agreement it was permitted to retain with the petitioners
on condition of leaving the portion in question for reallotment for the
educational or other institutions.
64.
The aspect of resolution passed by the petitioners (in W.P. No.
937/93) and others whereby they agreed/resolved to surrender public
utility plot pursuant to the said agreement just cannot be overlooked
while considering the challenges as raised by the petitioners in the
present petition.
The petitioners cannot blow hot and cold like this,
especially after such long time and in the petitions like this merely
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69
because respondent NIT is also a 'State' falling within the meaning of
65.
Article 12 of the Constitution of India.
There is force in the submission raised by the respondents that
they are estopped from challenging the agreement.
The doctrine of
estoppel of acquiescence in challenging the only clause 9/8 of the
2008(4) SCC 85,
has rejected such
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State of Kerala & others :
agreement is squarely applicable. The Apex Court in P.S. Gopinath .vs.
itself.
petitions/action of person like the petitioner based upon this doctrine
66.
There is no dispute that as per the scheme after sanctioning the
layout though entire expenses for the development were borne out by the
petitioner society or such other person and NIT in return after due
advertisement allowed the said public utility plot in the public interest to
registered Trust and educational institutions, cannot be said to be beyond
the scope and power of NIT Act.
67.
The submission that there is nothing mentioned in the
agreement about any kind of consideration and it is mentioned
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70
specifically that the land shall be transferred free of cost and, therefore,
to reagitate the issue about the interpretation in view of so-called
unambiguous terms is clearly impermissible, especially at the instance of
parties who admittedly understood and agreed upon the same and in fact
acted after enjoying the benefits now reagitating all these questions based
upon the facts and evidence in the present Writ Petition is unjust and it is
in breach of their terms and conditions and obligations. No equity lies in
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favour of such persons. The challenge to the contractual obligations,
especially when other side is a 'State' though permissible, in a given case,
but in the present case, in view of above, it is totally frivolous and
impermissible.
68.
Admittedly, the agreement was entered into between the
society and NIT and not between the individual members/plot owners.
Merely because there are no Sections referred in the agreement, that
itself cannot be reason that there was no consideration paid and/or the
terms and conditions are vague, unclear, unequal and gives unbriddled
and arbitrary powers to NIT to utilise/use and allot the said utility plots,
as per the layout for the other public purposes pursuant to the scheme.
69.
The submission that the Clause is severable from the whole
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71
agreement is incorrect.
Clause 16 read with Clause 9 and whole
agreement only makes the contract valid and binding to the parties,
especially when all the parties pursuant to the same agreed and acted
upon uninterruptedly knowing fully the provisions of law, the power of
NIT and their respective obligations. As noted, Clause 9 of agreement is
not severable from the rest of the clauses. All are inter-connected and
interlinked and, therefore, the persons like petitioners have enjoyed all
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the benefits out of the same. The challenge after more than 10 to 15
years to the said Clause by relying on doctrine of 'blue pencil' or severance
is totally impermissible.
(Beed District Central Cooperative Bank
Limited .vs. State of Maharashtra and others reported in (2006) 8
SCC 514) & Shin Satallite Public Company Limited .vs. Jain Studios
Limited reported in (2006) 2 SCC 628 are totally not applicable in the
facts and circumstances of the present case. The whole agreement is not
challenged and having enjoyed the benefits because at that time the
petitioners and such other persons thought it to be valid now cannot
invoke the doctrine of severability to the terms by ignoring the terms and
the whole agreement. The submission that this Clause/actions are no
actions in the eyes of law and do not create any right or obligation in the
parties and, therefore, severable is not correct and impermissible. We are
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72
of the view that there is no ambiguity in the clause of the agreement. All
clauses are clear. The background, the intention of the parties at the
relevant time and surrounding circumstances apart from the conduct of
the parties is sufficient to reject this contention.
Reliance on State of
India and another .vs. Mulla Sahakari Sakhar Karkhana Limited
(2006) 6 SCC 293 and Sappani Mohammad Mohideen .vs. R.V.
Sethusubramania Pillai (1974) 1 SCC 615 are of no assistance because
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of distinguishable facts and circumstances.
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73
70.
The petitioner even now has gone to the extent of saying after
enjoying the whole fruit of the said agreement that the society has no
title in the said P.U. Plots and the plot holders have undivided shares
and, therefore, the resolution passed by the society was also without any
authority and is of no consequence to surrender the said land by the
society as it would be without authority. This itself shows the whole
conduct of the petitioner and its members. It is difficult to accept such
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pleas as agitated in the present matter at the instance of such petitioners.
Therefore, the self-destructive submissions against the doctrine of waiver,
estoppel, constructive res judicata, approbation and reprobation without
any pleading and material on record, go against the petitioners and/or
such other person in all respects.
71.
In this background, the advertisement and the allotment so
made in favour of respondents/allottees cannot be said to be irregular
and/or without authority. The respondent NIT needs to take steps in
accordance with the law to allot the plots after advertisement as per their
declared scheme and only to the eligible persons for the public utility as
announced.
The petitioners have no first or exclusive right as claimed.
The person in breach of such agreement is not entitled for any equitable
relief.
The action of respondents, therefore, is legal and within the
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74
authority to advertise and allot the plots in favour of allottee respondents
72.
or such other public Trusts or such institutions.
NIT, right from its inception, has disposed of the public utility
land in the layouts of NIT from time to time. It is further submitted that
near about 99.9% of the allottees have accepted and acted upon the
The petitioners themselves had filed an
ig
adhering to the Rules.
agreement and accordingly, NIT has allotted the lands to the allottees
application for allotment of the public utility lands to them and as they
are not qualified as per the Land Disposal Rules, they have approached
this Court in seeking the declaration that the lands should be allotted to
them. The petitioners have not challenged any clause or any rule of the
Rules.
It is submitted that the allotment is being made strictly in
consonance to the Rules.
NIT after giving an advertisement, invites
applications from the charitable or educational institutions as per the
terms and conditions of the advertisement.
Those applications are
scrutinized and the Board of the Nagpur Improvement Trust recommends
the allotment to be made in favour of the prospective allottees. The said
recommendations have been got approved from the Government in view
of Rule 20 of the Rules and on approval of the Government, the said
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75
allotment has been made. Therefore, there cannot be any fault, which
can be found out with the allotment being made in favour of the
allottees, who have applied in consonance to the advertisement and
fulfilled the terms and conditions of the agreement. NIT has allotted the
public utility land to following institutions; which are : Maharashtra
Rashtrabhasha Sabha, Nagpur, Hostel for Women, South Indian
Society,
Deaf
and
Dumb's
School,
Indian
Medical
Educational
ig
Association, Institutions like Nagrik Sahakari Rugnalaya, Kusumtai
Wankhede Hall, Shri Guru Raghvendra Swami Bhajan Mandal, Maharana
Pratap Smuruti Mandir Sanstha, Matru Sewa Sangh, Shashkiya
Chitrakala Mahavidyalaya, Chaitanya International Hospital, L.A.D.
College, Vidarbha Bridge Association, Kalakunj, Yogabhayasi Mandal,
Rani Laxmibai Jhansichi Smarak Samiti, Bhagwad Pad Sabha, Bhratru
Mandal, Yogabhasi Mandal, Karnatak Sangh, Ved Dharma Shastra
Papipalan Sabha, Satchikitsa Prasarak Mandal, Mahila Sewa Samaj,
Nagendra Digambar Jain Samaj, Khaire Kumbhi Samaj, Sewadal
Education Society, Shri Sant Tukaram Gyan Mandir, Nagpur Houses of
Mary Immanulate, Bhartiya Bhasha Dnyan Mandir, Dr. Hedgewar Smarak
Samiti, Sant Gulab Baba Sewa Ashram, Gayatri Parivar Trust,
Keshaonagar Sanskrutik Mandir, Stree Shikshan Prasarak Mandal,
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76
Printers Guild, Manav Uttam Sewa Samiti, Eastern Sports Club, Punjab
Sewa Samaj, Shri Radhakrishna Charitable Trust, Shioprasad Poddar
Charitable Trust, Shri Charottar Patidar Samaj, Mathadi Hamal and Area
Transport Works Union, Nagpur General Works Union, Parampujya
Parmatma Ek Sewak Mandal, Steel and Hardware Chamber of
Commerce, Nag Vidarbha Chamber of Commerce, Lohana Mahajan
Samaj, Hariyana Nagrik Sangh, Vidarbha Dal Miller Association, Sugar
ig
Vachanalaya, Mrugwa Swami Vyayam Shala, Nagpur Gujarathi Kewalani
Mandal, Indian Red Cross Society, Gurunanak Sindhi Hindi Vidya Samiti,
Shri Chokhamela Samaj Girl's High School, Sikh Education Society,
Bhartiya Boudha Mahasabha, Nagpur Bidi Majdoor Sangh, Gondwana
Vikas Mandal, Bharat Sewak Samaj/Cancer Relief Society, Nagpur Nagar
Akhada Sanghtan Samiti, Employees State Insurance Corporation, Indian
Cancer Relief Society, Bhartiya Boudhajan Mahasabha. It is not the case
in the facts and circumstances of the case that the respondent NIT by this
policy and scheme has unjustly enriched itself. The whole action is in the
interest of public at large.
73.
The reliance on Supreme Court judgments; that alternative
remedy is no bar (Assistant Collector of Central Excise .vs. Jaison
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77
Hosiery Industries (1979) 4 SCC 22, Popcorn Entertainment and
another .vs. SIDCO and another 2007(9) SCC 593 and Whirlpool
Corporation .vs. Registrar of Trademarks, Mumbai and others (1998)
8 SCC 1) and; Writ Petition in the sphere of contracts though needed
detailed investigation, High Court may exercise jurisdiction under Article
226; Hindustan Petroleum Corporation Ltd. and another .vs. Dolly
Das (1994) 4 SCC 450 and Himmatlal .vs. State of M.P. AIR 1954 SC
ig
403 would also not assist the petitioner to support his case for the relief
The additional vague challenge is about the validity of Rule 20
74.
as claimed in the facts and circumstances of the case itself.
of the Land Disposal Rules of NIT. Considering the scheme and purpose
of NIT Act and in view of the above reasons given, there is no substance in
For the
this challenge also. The same is within the framework of law.
above reasons, the G.R. dated 10.6.1996 as relied in Writ Petition No.
1353/99 is also of no assistance to the petitioners which only provides
further instruction how to deal with the situations based upon the prior
agreements as in some cases the persons like the petitioners have not
handed over the possession physically and obtained interim orders of
protections from various Courts and in the result, there are status-quo in
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78
For the above reason also, the points as raised and submitted
75.
operation in many cases.
by the petitioners have no force and accordingly rejected.
The
respondent NIT is free to allot the land by following due procedure of law
for public purpose as announced.
There is no arbitrariness or any
Therefore, taking all into consideration, the points (a), (b), (c),
76.
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illegality in doing so.
(d), (g) are answered in the negative and the points (e) & (f) in positive.
In view of the above reasons, all the Writ Petition Nos. 934/94,
77.
967/92, 1179/93, 3085/93, 1784/92, 1034/95, 1512/2000, 1136/93,
2322/92, 822/99, 1070/2000 & 5145/07 are dismissed. Interim order so
granted also stands vacated. No order as to costs.
78.
At this stage, learned Counsel appearing for the petitioners seek
stay of present judgment basically for the reason that till this date the writ
petitions are pending and the undertakings and interim orders so granted
have been in force since more than 15 years.
In the circumstances,
therefore, the effect and operation of the judgment is stayed for eight
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79
weeks.
JUDGE.
JUDGE.
ig
J.
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