ITC LTD. versus STATE OF UTTAR PRADESH & ORS.

Citation: [2011] 7 S.C.R. 66 · Decided: 05-07-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Disposed off

Cited by 7 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2011] 7 S.C.R. 66 
ITC LTD. 
V. 
STATE OF UTTAR PRADESH & ORS. 
(Civil Appeal No. 4561 of 2008) 
JULY 5, 2011 
[R. V. RAVEENDRAN AND 
B. SUDERSHAN REDDY, JJ.] 
Uttar Pradesh Urban Planning and Development Act, 
c 1973: 
s.41(3) rlw ss.12 and 14 -Allotment of commercial plots 
in commercial area for construction of 5 star, 4 star and 3 star 
hotels on 90 years lease - Plots allotted at industrial rates -
D Later on, allotments cancelled as the same were made 
without following the procedure of auction, and the allotment 
on fixed industrial rates caused loss to government 
exchequer - HELD: Under private law, a lease governed 
exclusively by the provisions of Transfer of Property Act could 
E be cancelled only by filing a civil suit for its cancellation or 
for a declaration that it is illegal, null and void and for the 
consequential relief of delivery back of possession - Where 
the grant of lease is governed by a statute or statutory 
regulations, and if such statute expressly reserves the power 
of cancellation or revocation to the lessor, it will be 
F permissible for an Authority, as the lessor, to cancel a duly 
executed and registered lease deed, even if possession has 
been delivered, on the specific grounds of cancellation 
provided in the statute - In the instant case, NO/DA is a 
statutory authority and it has not alleged or made out any 
G default in payment or breach of conditions of the lease or 
breach of rules and regulations - Nor is it the case of NO/DA 
that any of the allottees is guilty_ of any suppression or 
misstatement of fact, misrepresentation or fraud - Therefore, 
the allotment of commercial plots by NO/DA to the allottees 
H 
66 
ITC LTD. v. STATE OF UTIAR PRADESH & ORS. 
67 
for setting up hotels is valid -There is no violation of the 
A 
regulations or policies of NO/DA in allotting commercial plots 
for hotels -
Therefore, cancellation of allotment is 
unsustainable. 
ss. 41(3) - Allotment of plots - Cancellation of- HELD: 
8 
When valuable rights had vested in the a/lottees, by reason 
of the allotments and grant of leases, such rights could not 
be interfered with or adversely affected, without a hearing to 
the affected parties - Natural justice - Opportunity of hearing. 
Administrative Law: 
c 
Allotment of commercial plots for hotels - Cancellation 
order - Judicial review of - HELD: In the instant case, the · 
allotments of plots for hotel projects were challenged in writ 
petitions and in compliance with the direction of the High 
D 
Court, the state government had a relook at the matter and 
found some irregularities in allotment - The decision of the 
state government in revision, is not based on any different 
policy, but based on its finding that the existing regulations 
and policies of NO/DA were violated - The policy of the state 
E 
government cannot override the NO/DA Regulations - If any 
policy is made, intending to give different meaning to the words 
'commercial use' and 'industrial use', that can be given effect 
only if the regulations are suitably amended -
The fact that 
the tourism or hotels have been given the status of 'industry' 
F 
will not convert them into industries, for the purpose of 
allotment of plots, nor will the use of land by such tourism or 
hotel industry, will be an industrial use - Allotment of plots 
for hotels in a commercial area is wholly in consonance with 
the NO/DA Regulations and Master plan which earmarks 
areas for specific land uses like industrial, residential, 
G 
commercial, institutiona·I, public, semi-public, etc - Therefore, 
the allotment of plots situated in commercial areas earmarked 
for commercial use, to hotels did not violate any provisions 
of the Act or the NO/DA Regulations - NO/DA (Preparation 
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SUPREME COURT REPORTS 
[2011] 7 S.C.R. 
A and Finalisation of Plan) 1991 Regulations, 1991 - Policy 
dated 22.5.2006 of Government of Uttar Pradesh - Uttar 
Pradesh Urban Planning and Development Act, 1973. 
Public law - Breach of statutory provisions or procedural 
8 
irregularities - Allotment of plots for hotels on 90 years lease 
- Cancellation of - Remedial action - Explained. 
TOURISM: 
Running a hotel/boarding house/restaurant - HELD: Is 
c a commercial activity - By no stretch of imagination, use of 
a plot for a hotel can be considered as use of such land for 
an industrial purpose - It was not necessary for NO/DA to 
change the land use of plots_ to be allotted to hotels, from 
commercial to industri

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