M/S. RAJURESHWAR ASSOCIATES versus STATE OF MAHARASHTRA AND ORS.

Citation: [2004] SUPP. 2 S.C.R. 915 · Decided: 05-07-2004 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Dismissed
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Judgment (excerpt)

v 
MIS. RAJURESHWAR ASSOCIATES 
v. 
STATE OF MAHARASHTRA AND ORS. 
JULY 5, 2004 
[R.C. LAHOTI, CJ. AND ASHOK BHAN, J.] 
Maharashtra Land Revenue Code, 1966/Maharashtra Government 
Rules of Business; Rules 8, 9, 11 & 12 : 
Government land granted to a co-operative cotton Mill subject to 
A 
B 
c 
certain conditions-Substantive portion of the land taken back by State 
Government on ground of violation of the conditions-Mill went in 
liquidation-Invitation for tenders for selling the entire land including 
property of the Mill-Acceptance of tender submitted by appel/ant/offeree- D 
Execution of the agreement of sale in favorur of offeree by liquidator-
Government 's decision to cancel the agreement as price offered by the 
appellant was less than the market price of the land-Challenge to--
Rejected by High Court directing the liquidator to refund the amount 
deposited with interest thereon-On appeal, Held: State Government 
resumed the land fi"om the Mill-Having regard to the provisions of law, E 
the Mill could not dispose of the land without the permission of the State 
Government-Upset price need to be fixed before offering the land for 
sale-Approval of Council of Ministers required to be obtained in terms 
of the Rules before alienation of the Government property/land-
Requirements under the Rules could not be bye-passed by any individual F 
functionary-Decision by the Minister not to place the matter before the 
Cabinet and to finalise the tender, and consequent sanction vitiated in 
law-State Government empowered to cancel the agreement since price 
offered in the tender was much less-State Government to refund the 
amount to the appellant as deposited by him along with simple interest @ G 
11 % per annum for the relevant period~Directions issued-Constitution 
of India, 1950-Article 166-Maharashtra Land Revenue (Disposal of 
Government Land) Rules, 1971. 
Words and Phrases : 
915 
H 
916 
SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R. 
A 
'Occupancy price' and 'upset price' Meaning of in the context of 
Maharashtra Land Revenue (Disposal of Government Land) Rules 1971. 
Revenue and Forest Department of State Government granted 
land measuring 48 acres 24 gunthas to a Co-operative Cotton Mill on 
B certain conditions. Later, substantial portion of the land was withdrawn 
by the Government since the Mill had violated the terms and conditions 
of ·the grant. The Mill went into liquidation and a liquidator was 
appointed. The liquidator invited tenders to dispose of the entire land 
including the portion of the land in possession of the Government. The 
Government accorded sanction to finalise the sale of the land in favour 
C of the appellant, the highest bidder, subject to fulfilment of certain 
conditions. Liquidator informed the appellant to deposit 25% of the 
bid amount to ~et the sale agreement executed. Though the necessary 
consideration amount was deposited by him yet the agreement of sale 
was not executed in bis favour, as the Government cancelled the 
D agreement on the ground that the price of the land as offered by the 
appellant was less than the market price of the land. Appellant 
challenged it. Rejecting the challenge, High Court directed the State 
to refund the amount deposited by the appellant along with interest@ 
11 % thereon. Hence the present appeal. 
E 
Appellant contended that since the agreement for sale of the land 
in question was executed in his favour by the authority concerned, the 
State Government was estopped from going back from its promise; 
that since the Cabinet had taken the decision not to place the proposal 
F of sale/liquidation of the Mill before them, Cabinet's approval before 
sale of the land was not necessarily required to be obtained; that the 
High Court was not justified in accepting the contention of the 
respondent that the price offered by the appellant was less/inadequate. 
Respondent-State contended that proper decision was not taken 
G by the Minister concerned to sell the land/property in favour of the 
appellant; that proper procedure for sale of the land in question was 
not followed; and that the price of the land as offered was grossly 
inadequate. 
H 
Dismissing the appeal, the Court 
.. 
,. 
. " 
• 
RAJURESHW AR AS SOCIA TES v. ST ATE 
917 
HELD : 1.1. The land belonging to the Revenue and Forest A 
Department of the State Government was handed over to a Mill on 
payment of occupancy price subject to certain conditions including 
that if any of the terms
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