SUNIL PANNALAL BANTHIA AND ORS. versus CITY AND INDUSTRIAL DEVELOPMENT CORPN. OF MAHARASHTRA LTD. AND ANR.

Citation: [2007] 3 S.C.R. 798 · Decided: 08-03-2007 · Supreme Court of India · Bench: AR. LAKSHMANAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
SUNIL PANNALAL BANTHIA AND ORS. 
v. 
I . 
CITY AND INDUSTRIAL DEVELOPMENT CORPN. OF 
MAHARASHTRA LTD. AND ANR. 
MARCH 8, 2007 
B 
[DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.] 
Urban Development-Allotment of plots-Cancellation of, by 
c 
Corporation on ground of violation by itself of its own Regulations-Challenge 
to-Held: Corporation was not justified in cancelling the allotment 
unilaterally on the ground that it acted without jurisdiction and in violation 
of its Rules and Regulations and was void as being opposed to public 
policy-Corporation accepted transfer fees from original allottees and full 
· premium lease from the transferees and issued sanction certificate-Transferees 
D acted and altered their position to their prejudice on basis of such assurance-
Thus, order of cancellation of allotment set aside-Contract Act, 1872-
Section 23. 
Respondent-Corporation issued a letter of allotment of plot on lease in 
favour of M and N. Original allottees applied for transfer of the said plot to 
E the appellants. Corporation accepted the transfer charges and full premium 
lease and executed Lease Deed and Confirmation Deed in favour of the 
appellants and issued the Development Permission and Commencement 
Certificate. Appellants then commenced the construction work. Thereafter, 
Corporation issued Notice to the appellants to terminate the lease agreement 
F 
being void under Section 23 of the Contract Act. Corporation cancelled the 
allotment in favour of the appellants. Appellants filed writ petition challenging 
the act.ion of the respondent and demanded possession of the allotted plot. 
(._ 
Respondent contended that the allotment had been made by not calling for 
tenders and such action on its part was void as being opposed to public policy. 
High Court dismissed the writ petition on the ground of alternative remedy 
G available. Hence the present appeal. 
Allowing the appeal, the Court 
~ 
HELD: 1. In the instant appeal, the concern is only with the question of 
• 
law as to whether the respondent-Corporation had acted in excess of its 
H 
798 
SUNIL PANNALAL B.\NTHIA ,- CITY A~D INDUSTRIAL DE\.ELOPMENT ('QRPN OF MAH.\RASlffRA LTD. 
799 
jurisdiction and authority in cancelling the allotment made to the appellants A 
..-
t 
on a unilateral consideration that the allotment had been made in contravention 
of its rules and regulations and was thereby opposed to public policy and was 
illegal and void in terms of section 23 of the Contract Act, 1872. No decision 
is required to be taken in the matter on facts, which could have merited an 
order of remand. The submission that the facts of this appeal are different 
from those which have been earlier remitted to the High Court for re-
consideration on merits and also for making a re-valuation are accepted. 
(Para 21( [806-A-CI 
2. On the legal question, it is quite obvious that having acted and held 
B 
out assurances to the appellants which caused the appellants to alter their C 
position to their prejudice, it was not open to CIDCO to take a unilateral 
decision to cancel the allotment on the ground that it had acted without 
jurisdiction and/or in excess of jurisdiction and in violation of its rules and 
regulations. Even on that score, the argument of CIDCO is unacceptable having 
regard to Regulation 4 of the New Bombay Disposal of Land Regulations, 1975 
which empowered CIDCO to dispose of plots of land even on the basis of D 
individual applications. (Para 22) (806-C-EI 
3. The stand taken by CIDCO that allotment being opposed to public 
policy, is opposed to public policy since CIDCO was not entitled to taRe a 
unilateral decision to cancel the allotment after the appellants had acted on 
the basis thereof and had expended large sums of money towards the 
construction which has progressed to some extent. The Regulations allowed 
CIDCO to entertain individual applications for allotment Merely by indicating 
that the law declared by this Court was universally binding under Article 141 
E 
of the Constitution, it could not contend that such allotment was contrary to 
public policy on a fresh consideration made by the Board of Directors of the F 
Corporation upon considering the recommendations made by the then Addi. 
Secretary. That consideration, was not suflkient in the instant case to cancel 
the allotment which had been made in accordance with the Regulations and 
the appellants had made payments as directed by the Corporation, which, in 
fact, was higher

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