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CASE NO.:

Appeal (civil) 408 of 2007

PETITIONER:

AMEY CO-OP.HOUSING SOCIETY LTD. ..Appellant

RESPONDENT:

PUBLIC CONCERN FOR GOVERNANCE TRUST & ORS. ..Respondents

DATE OF JUDGMENT: 01/02/2007

BENCH:

Dr.AR. Lakshmanan & Altamas Kabir

JUDGMENT:

J U D G M E N T

(Arising out of S.L.P. (C) No.336/2006)

WITH

CIVIL APPEAL NO. 410 OF 2007

(Arising out of S.L.P. (c) No.655/2006)

VIJAY ASSOCIATES (WADHWA) DEVELOPERS ..Appellant

Versus

PUBLIC CONCERN FOR GOVERNANCE TRUST & ORS. .Respondents

ALTAMAS KABIR,J.

Of the four Special Leave Petitions heard together by us,

two have already been disposed of and the remaining two,

namely, SLP (c) Nos.336/06 and 655/06, are being disposed

of by this common judgment.

Leave granted in both the special leave petitions.

Public Concern for Governance is a registered Trust

which filed a Public Interest Litigation, being No.43/2005,

in the High Court of Judicature at Mumbai, questioning the

manner in which certain residential plots in the Navi Mumbai

Municipal Area had been allotted by the City and Industrial

Development Corporation (hereinafter referred to as

'CIDCO'). CIDCO is an authority constituted by the State of

Maharashtra under the Maharashtra Regional and Town

Planning Act, 1966 (hereinafter referred to as 'the MRTP Act')

for development of Navi Mumbai and other townships.

The allotments made have been challenged on various

grounds. The main ground of challenge is that the allotment

and disposal of plot Nos. 24 to 29 (Nerul) was in violation of

the existing regulations regulating such allotment.

According to the writ petitioners, the Regulations provided for

the allotment of plots effected either by public advertisement,

or at a fixed price for co-operative housing societies or on

individual applications. However, tenders were to be invited

as far as plots which were to be granted by public

advertisement were concerned. Since genuine co-operative

housing societies are usually unable to compete with

builders in open tender, they were to be granted plots of land

at a fixed concessional rate and the buildings to be

constructed were to be used for residential purposes only.

According to the writ petitioners there is even a difference in

the Floor Space Index, (hereinafter referred to as 'the FSI').

In the case of purely residential constructions, the permitted

FSI is 1, whereas in the case of constructions to be used for

both commercial and residential purposes, the FSI is 1.5.

According to the writ petitioners the plots in question

were cornered by builders who set up dummy societies to

acquire the plots and to raise constructions thereon, which

would be used both for residential and commercial purposes,

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thereby making large gains for themselves and defrauding

CIDCO. It is the specific case of the writ petitioners' that

having acquired the plots for the use of co-operative housing

societies with FSI 1, the builders who are the only

entrepreneurs in the construction project, sought to convert

these plots for commercial use with FSI 1.5, thereby causing

wrongful loss to CIDCO to the extent of Rs.36 crores.

In support of their case, the writ petitioners relied on

two Resolutions adopted by the Board of Directors of CIDCO,

being Nos. 8848 adopted on 23rd October, 2003 and 8886

adopted on 25th November, 2003, respectively. By the first

Resolution, a deviation was made from the normal mode of

allotting plots by fixing the rate for plots to be allotted to the

co-operative housing societies (with 1 FSI and purely for

residential purposes). The said Resolution reads as follows:-

"RESOLUTION NO.8848

RESOLVED THAT the Board do and hereby approve

the Proposal to fix the rate for plots to Co-operative

Housing Societies (with 1 FSI and purely for

residential purpose) without inviting tender in

various developed, developing and new nodes except

Kalamboli in Navi Mumbai at fixed rate as

mentioned in column No.5 of Table No.1 and Table

2 of the Board Agenda Note (subject to the

modification that in respect of society plots situated

on smaller roads of 7 to 11 meters the base price

shall be enhanced by 30% (instead of 40%) in

respect of Nodes specified in Table 2). The rate of

Co-operative housing societies in case of Kalamboli

node, however, would be same as base price, i.e.

Rs.2940/m2".

RESOLVED FURTHER THAT this policy be

implemented only after verifying the genuineness of

the Society.

RESOLVED FURTHER THAT the Vice Chairman &

Managing Director/Chief Economist/Marketing

Manager \026I/Marketing Manager-II/Marketing

Manager \026III be and are hereby authorized to

implement the Resolution.

RESOLVED FURTHER THAT this decision be

implemented without waiting for confirmation of the

Minutes.

TO CHEFCO Date 29.10.2003 Approved by the

Board vide Resolution NO.8848 Dated 23/10/2003

subject to modifications shown above. Draft Agenda

Note/Underlying Papers/Files,Etc. are returned

herewith.

Sd/- 29.10.2003

Chief Secretary."

By virtue of the aforesaid Resolution, CIDCO decided to

allot plots of land to co-operative housing societies with 1

FSI, purely for residential purposes without inviting tenders,

in various developed and developing and new nodes, except

Kalamboli, in Navi Mumbai. Certain other conditions were

also indicated, which would all be subject to verification of

the genuineness of the society.

Resolution No.8886 approved the proposal contained

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in paragraph two of the Agenda Note subject to certain

amendments relating to change in some of the terminologies

used in the said Note.

The writ petitioners alleged that by adopting the said

two Resolutions, the management of CIDCO laid the formal

ground-work for diversion of prime public lands into private

hands of builders and developers and thereafter pushed the

scheme into operation. The writ petitioners went on to

contend that even the scheme contained in the two

Resolutions referred to above had not been published, as was

required under Regulation 3 of the 1995 Regulations which

provides that :

"The Corporation may, subject to availability of

lands, publish a scheme to invite applications

from persons intending to promote and

registered the co-operative housing society in

accordance with and subject to the

Maharashtra Co-operative Societies Act, 1960

and the Rules made thereunder."

The next ground of attack in the writ petitions is that

Resolution No.8848 provides that the policy indicated therein

should be implemented only after verifying the genuineness

of the society which entailed the filing of an affidavit

showing the continuous residence of the applicant in

Maharashtra State for a period of 15 years, which was to be

supported by documentary evidence, such as ration cards,

passports, domicile certificates etc., together with a

declaration that the member concerned had no other

dwelling unit in Navi Mumbai. As was pointed out by the

High Court while considering the writ applications, the two

Resolutions read together showed that CIDCO had decided

to allot residential plots with 1 FSI at fixed rates to genuine

societies whose members would have to be verified by an

affidavit supported by documentary evidence and upon the

understanding that their memberships would not be

transferred for a specified period. The writ petitioners

pointed out that the plots involved in these appeals were

initially allotted to the respondent Nos.5 to 10 in Civil Appeal

arising out of SLP (c) No. 655 of 2006, each being allotted one

plot at a fixed price. According to the writ petitioners none

of these societies were genuine housing societies and were

dummy creations of Vijay Associates (Wadhwa) Developers.

During the hearing of the writ petition, it was shown that the

respondent Nos. 5 to 10 had all applied by way of almost

identical applications, each of which was by way of a

"request for allotment". All the said applications were

addressed to the then Chief Minister of Maharashtra and not

to CIDCO, which being a statutory corporation, had a

separate legal existence. It was pointed out that all the said

applications except for one, contained an endorsement of the

Chief Minister "to put up the applications" and had been

processed with undue haste on the recommendation of the

Managing Director of CIDCO.

What was sought to be conveyed by the above is that

all the applications were made pursuant to the two aforesaid

Resolutions adopted by the Board and the same were

immediately processed and allotments were made in a great

hurry though it would be clear from all the applications that

they had been filed by one and the same person or

organization. What was even more revealing was the fact

that immediately after the plots of land had been granted to

the dummy societies they merged into one society. It was

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alleged before the High Court that not one of the 493

members of the dummy societies had spent a single paisa,

either for becoming members or towards acquisition of the

land and constructions costs. The entire amount of earnest

money, lease rent and construction costs till date, totaling

about Rs.55 crores, was said to have been spent by the

builders alone. From the materials on record, it was pointed

out that having sub-divided one plot into six plots and after

having allotted one plot to each of the six applicant societies,

on or about 13th July, 2004, the said societies made an

application for amalgamation of the said plots on 29th

August, 2004 and CIDCO consented to amalgamate the plots

for development within two days thereafter on 31st August,

2004.

Ultimately, the said six societies were amalgamated to

form Amey Co-operative Housing Society Limited on 17th

January, 2005. Thereafter, a Memorandum of

Understanding for development was executed by each of the

six societies with Vijay Associates (Wadhwa) Developers,

being the appellant in the Civil Appeal arising out of SLP (C)

No.655/2006, on 30th August, 2004, i.e the day after consent

was given by CIDCO for amalgamation.

The writ petitioners alleged that although Amey Co-

operative Housing Society Limited submitted the Scheme for

Amalgamation to the Joint Registrar of Co-operative

Societies on 14th September, 2004 and such merger was

allowed only on 17th January, 2005, the Municipal

Corporation issued a Commencement Certificate dated 17th

September, 2004 to the amalgamated society requiring the

applicant to give notice to the Corporation on completion of

the construction up to the plinth level and prior to the

taking up of commencement of further work.

It is alleged that M/s. Vijay Associates commenced

construction on behalf of the societies up to the 4th floor level

without giving such notice, which impelled the Navi Mumbai

Municipal Corporation (NMMC) to issue a stop work notice

on 18th December, 2004. Of course, on behalf of the societies

it was contended that the stop work notice had been issued

because the amalgamation of the six societies had not been

effected till then and that the same was only a technical

requirement which was satisfied once the amalgamation was

completed on 17th January , 2005.

The writ petitioners also contended that the use of six

plots as one amalgamated plot before such amalgamation

was allowed, reveals that the construction work on all the

six plots was under the complete control of Vijay Associates

(Wadhwa) Developers. It was pointed out that Amey Co-

operative Society Limited entered into a Final Development

Agreement with Vijay Associates (Wadhwa ) Developers on

31st December, 2004 even before amalgamation. Under the

said Agreement, Amey Co-operative Housing Society Limited

authorized Vijay Associates (Wadhwa) Developers to develop

the six amalgamated plots and executed an irrevocable

power of attorney in favour of the nominees of Vijay

Associates (Wadhwa) Developers. It was also pointed out

that under the Terms of Agreement, it was declared that

certain members of the societies had resigned their

membership and that Vijay Associates (Wadhwa) Developers

would be entitled to recommend new members in their place

for which permission of CIDCO would have to be obtained by

the respondent No. 6. The agreement also made provision for

transfer of membership and new members desiring to

acquire a new flat in the new construction would be

provided such flat upon payment of such consideration as

may be mutually agreed upon.

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It was the contention of the writ petitioners that every

single old member was to be eliminated to make place for

new members. In other words, all members who were

purported to have been scrutinized by CIDCO as genuine

members of the society would be replaced by new members

and the genuine members would be reduced to mere name

lenders. The writ petitioners contended that the initial

members of the six societies were connected with Vijay

Associates (Wadhwa) Developers in some way or the other

and merely lent their names to enable the said respondent

to acquire the plots in question by such dubious means and,

in fact, it would be evident right from the inception that it

was only the proprietor/chairman of the said respondent who

was in control of the entire plan.

It was contended that most of the proposed members of

the six societies appeared to be hutment dwellers in the Navi

Mumbai area and from their occupation appeared to be

labourers working in the markets that have come up in the

area.

As indicated hereinbefore, what was intended to be

conveyed by the writ petitioners is that the respondent No.5

utilized his close friends and associates to set up the six

dummy societies with the intention of acquiring the six plots

which were later amalgamated into one plot. By adopting the

aforesaid procedure, Vijay Associates (Wadhwa) Developers

with the help of certain officials of CIDCO obtained control of

the six plots but not for the purpose for which they were

intended.

Having regard to the restrictions on transfer and the

transfers effected by the societies of all their rights in favour

of the said respondent, CIDCO gave a notice to the societies

on 28th February, 2005 terminating their lease and

resuming the land. In reply, it was contended on behalf of

the societies that since only an agreement to lease had been

executed in favour of Vijay Associates (Wadhwa) Developers,

the restrictions regarding transfer and assignment did not

apply and accordingly CIDCO was not entitled to enforce its

rights under the Agreement of Lease to terminate the lease

and to evict the societies and to resume the said plots. It was

pointed out that CIDCO had accepted the stand taken on

behalf of the societies and did not take any further steps

pursuant to its notice dated 28th February, 2005.

In addition, it was contended that although

amalgamated plot No.24 was meant for residential use,

Vijay Associates (Wadhwa) Developers divided the plot into

Block 1 and Block 2 in its Development Plan. Block 2 is

retained for residential use while Block 1 is proposed to be

developed for commercial use. The user of the plot both for

residential as well as commercial purposes was in violation of

the Master Plan for the area as genuine co-operative societies

were allotted plots only for residential purposes and not for

commercial exploitation as well.

Yet another breach of the rules for the purpose of

favouring the said respondent was that although under Rule

3 (1) CIDCO was required to publish a scheme to invite

applications from persons intending to promote co-operative

housing societies, no such scheme was published and the

plots in question were allotted to the six different co-operative

housing societies merely on their applications made to the

Chief Minister. It was urged that in the present case, the

entire development is against the letter and spirit of the

CIDCO (Lease of Land to Co-operative Housing Society)

Regulations, 1995, which were framed for the disposal of

land by CIDCO as the developing authority under Section

118 of the Maharashtra Regional and Town Planning Act,

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1966. It was contended that on account of the

manipulations effected in order to favour Vijay Associates

(Wadhwa) Developers, CIDCO incurred a loss of about

Rs.10,000/- per sq.mt. as the plot in question would have

fetched a market price far above the weighted average of

Rs.10,743/- for the said plot. Reference was made to a

report of a committee set up by the State Government,

popularly known as the Shankaran Committee, which

estimated CIDCO's losses on account of the aforesaid

transaction of going into Rs.35 crores.

On behalf of the respondents it was urged that the writ

petition was misconceived inasmuch as the entire

transaction involving the plot in question was above board

and in keeping with the Resolutions adopted by CIDCO. It

was argued that all the members of the six different co-

operative societies were genuine members and the societies

were genuine societies of persons eager to acquire residential

accommodation for themselves. It was denied that the said

members were mere name-lenders who had been set up by

Vijay Associates (Wadhwa) Developers only with a view to

acquire the plot in question. It was also reiterated that no

transfer had, in fact, been effected in favour of the said

respondent who had been retained in common by all the

members of the six societies which amalgamated into one

society as a matter of convenience for the purpose of

development of the said plot on behalf of the members of the

co-operative societies. Since the said respondent would be

investing both money and labour in the project, it was agreed

that a certain portion of the construction would be made

available to it for its own use.

It was further contended that during the course of

allotment and commencement of construction, some of the

members had chosen to opt out of the scheme which

necessitated the empowerment of the said respondent to

recommend the induction of new members in place of the

outgoing members.

It was also contended that the construction being raised

on the plot in question was in keeping with the sanction

which had been granted by the NMMC and the stop work

notice which had been issued by the Corporation was only

on account of the fact that amalgamation of the six co-

operative societies had not been completed till then.

Subsequently, the stop work order was revoked and

construction had progressed up to the 9th floor involving

investment of large sums of money.

It was also submitted on behalf of the respondents that

since the writ petitioners had raised an allegation of under

valuation and financial loss to CIDCO, an independent

valuation could be made to ascertain the loss, if any, on

account of the transaction and to compensate CIDCO to that

extent.

The submissions made on behalf of the respondents did

not find favour with the High Court which appeared to be

convinced that the respondents had indulged in fraudulent

and illegal activities which could not be accepted by the

Court. Referring to several judgments of this Court cited

both on behalf of the appellants as well as the respondents,

the High Court arrived at the conclusion that the allotments

made in favour of the six societies were liable to be quashed

and there was no question of regularizing the same. The

High Court held that having accepted the writ petitioners'

prayer for quashing the allotments made in favour of the

respondent Nos. 5 to 10, with a further direction to stop the

construction activities, there was no question of considering

the alternate prayer made for obtaining a fresh valuation and

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compensating CIDCO to the extent of its losses, if any.

On the basis of its aforesaid conclusion, the High Court

quashed the allotments made to the six housing societies,

i.e. the respondents Nos. 5 to 10 herein, by letters of intent

issued by CIDCO dated 26th March, 2004 and 6th May, 2004.

All rights of the persons who had entered into agreements

concerning development of the plots nos. 24 to 29, including

those of the six housing societies, Amey Co-operative

Housing Society Limited which is the amalgamated society

and successor to the six housing societies, and Vijay

Associates (Wadhwa) Developers would stand extinguished.

The said respondent along with its agents and servants

were permanently injuncted and restrained from entering

upon, remaining in and/or putting up any construction on

the said plots. In addition to the above, the entire

construction on the said plots Nos. 24 to 29 was to stand

forfeited and vested in CIDCO. CIDCO was permitted to

enter upon the land and take over the entire construction

and appoint its security personnel to guard it. The Navi

Mumbai Municipal Corporation was directed to examine as to

whether the construction could be regularized and CIDCO

was directed to move the Municipal Corporation for that

purpose. A further direction was given that if in the

opinion of the Municipal Corporation the construction could

not be regularized then CIDCO would pull it down and

recover its costs for pulling down the structure as well as the

removal of debris from Vijay Associates (Wadhwa) Developers.

Thereafter, CIDCO would decide whether the plot with

constructions should be allotted to genuine housing societies

or whether the plot and construction shall be allotted to a

builder to be decided by the process of inviting tender. In the

event, CIDCO decided that the plot should go to genuine

housing societies, it would have to issue an advertisement

accordingly and on receiving offers based on the

construction cost with appropriate municipal charges it

could take necessary decision for allotment.

Several other directions were also given by the High

Court while making the rule absolute with costs to be paid

by Vijay Associates (Wadhwa) Developers to the petitioners

assessed at Rs.1 lakh.

It is the aforesaid judgment of the Bombay High Court

which has been assailed in these appeals.

The first of the two appeals has been filed by Amey Co-

operative Housing Society which is the amalgamated society

of the six co-operative societies and had been made

respondent No.6 in the writ petition. The second appeal has

been filed by Vijay Associates (Wadhwa) Developers which

had been impleaded as respondent No.4 in the writ

application.

When the Special Leave Petition filed by Amey Co-

operative Housing Society Limited (SLP (c) No.336/2206) was

taken up for consideration on 12th January, 2006, this Court

had directed the continuance of the interim order granted by

the High Court till 20th January, 2006. On the returnable

date the second Special Leave Petition (C) No.655/2006 filed

by Vijay Associates (Wadhwa) Developers, was also taken up

for consideration along with the earlier special leave petition

filed by Amey Co-operative Housing Society Limited and this

Court directed notice to issue on both the Special Leave

Petitions. In addition, an interim order was passed whereby

it was directed that there would be no construction, no sale

and no creation of third party rights. CIDCO was directed to

take symbolic possession of the entire property and the

interim order passed by the High Court when the Writ

Petition was disposed of subsequent to the impugned order,

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was directed to continue.

Mr. Fali Nariman, learned senior counsel appearing for

the appellants in the appeal filed by Amey Co-operative

Housing Society Limited, reiterated the submissions which

had been made before the High Court.

In addition to the above, it was also submitted that the

State Government had directed the then Addl. Chief

Secretary (Planning), Dr. D.K. Shankaran, to conduct a

discreet inquiry into the affairs of CIDCO during the

tenure of Shri V.M. Lal, Vice Chairman and Managing

Director, pertaining to allotment of plots in Navi Mumbai.

Pursuant to such direction, the Shankaran Committee

submitted a detailed report on 1st April, 2005 to the

Government wherein it was opined that the prevailing

market rate in the prime residential areas of Navi Mumbai at

the relevant time, including the plots in question, was not

less than Rs.21,000/- per sq. mt. and since such allotment

had been made to the petitioner and other societies at the

rate of around Rs.10,500/- per sq. mt., CIDCO had

suffered a loss of about Rs.35 crores. It was the stand of

the Government that it was also the writ petitioner's case

in the writ petition that in case of plots where construction

had been completed or had reached an advanced and

irreversible stage, the CIDCO should recover from the

contractors and developers and the co-operative societies the

difference between the market value and the price charged to

the applicant society. This, in fact, was prayer 'C' in the

writ petition. Consequently, according to the State

Government it was absolutely essential that an independent

valuation be done by an independent valuer to make a

valuation report of the market price of the plots in question

for the relevant period as this was the only way in which the

real loss, if any, caused to and suffered by CIDCO could be

ascertained and steps could be taken to recover the same

from the concerned parties.

Mr. Nariman urged that having made allegations

against the then Chairman and Managing Director of CIDCO,

the writ petitioners should have made him a party to the

proceedings as the said allegations could not have been

adjudicated in his absence. It was urged that not having

made Mr. V.M .Lal a party respondent, the only public

interest that the writ petitioners could serve by way of public

interest litigation was to ensure that no financial loss was

caused to CIDCO in the transaction involving allotment of the

said plots in favour of the respondent Nos. 5 to 10. According

to Mr. Nariman instead of welcoming the suggestion for

appointment of an independent valuer, the writ petitioners

quite surprisingly opposed such a suggestion and the same

was duly recorded by the High Court. Mr. Nariman

submitted that had the independent valuation been allowed

and if it had resulted in a valuation which was much higher

than Rs.10,500/- per sq. mt. , it would have supported the

writ petitioners' case.

It was pointed out that the plot had been advertised

with best price of Rs.10,000/- per sq. mt. but no offers had

been were received by CIDCO consequent upon the said

advertisement. The same plot was subsequently offered

under the Board Resolution No.8848 at the flat fixed rate of

Rs.10063/-. As against the above, the respondents societies

paid for the plots at the rate of Rs.10,500/- per sq. mt.

It was submitted that though in the Writ Petition it had

been alleged that the two aforesaid Resolutions had been

adopted surreptitiously, the same were neither challenged in

the Writ Petition nor cancelled, nor was any finding arrived

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at by the High Court in that regard.

Referring to an observation made in the report of the

Shankaran Committee that if the plots in question had been

sold by way of calling tenders, CIDCO would have fetched a

considerably higher price of Rs.21,000/- per sq. mt. or above,

Mr. Nariman submitted that the such observation disregards

the two aforesaid Resolutions of the Board, and, in any

event, there was no material before the Shankaran

Committee in support of the presumed higher valuation of

Rs.21,000/- per sq. mt.. On the other hand, the only direct

evidence of the market value of the plots before the Division

Bench was the valuation report of Government Approved

Valuer, A.P. Maniar and Nanavati, where the value of the

land was assessed at Rs.10,150/- per sq.mt. as on March

2004. It was urged that none of the parties had either

controverted the correctness of the report nor had the same

been adverted to by the Division Bench of the Bombay High

Court.

It was then submitted that except for bald allegations

there was also nothing on record to support the allegation

that the six co-operative societies, which later merged to

form an amalgamated society, were not genuine co-operative

societies and had been set up by Vijay Associates (Wadhwa)

Developers with persons who were mere name-lenders.

Mr. Nariman urged that the 1995 Regulations

empowered CIDCO to promote and register co-operative

housing societies in accordance with the provisions of the

Maharashtra Co-operative Societies Act, 1960. Regulation 3

of the said Regulations reads as follows:-

"The Corporation may, subject to the

availability of lands, publish a scheme to

invite applications from persons

intending to promote and register the co-

operative housing society in accordance

with and subject to the Maharashtra Co-

operative Societies Act, 1960 and the

Rules made thereunder:"

In any event, CIDCO had all along proceeded on the basis

that there were two methods for allotment of lands, (i) under

the 1995 Regulations in which the expression "may"

appears and (ii) by CIDCO itself passing a resolution under

Clause 4 of the New Bombay Disposal of Lands Regulations,

1975, which applied to all lands of the Corporation. Mr.

Nariman contended that the said Regulations had a

statutory flavour having been made under Section 159 (1) (a)

of the Maharashtra Regional and Town Planning Act, 1966.

In particular reference was made to Clause 4 which deals

with the manner of disposal of lands by CIDCO and reads as

follows:-

"4. Manner of disposal of land. The

Corporation may dispose plots of land

by public auction or tender or by

considering individual applicants as the

Corporation may determine from time to

time."

According to Mr. Nariman, the Corporation decided to

consider the cases of individual applicants in terms of the

Board Resolution Nos. 8848 and 8886 referred to above. He

also urged that the Regulations of 1975 and 1995 were

complementary to each other and their provisions did not

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militate against each other.

Mr. Nariman concluded by urging that the entire

transaction was above-board and in keeping with the

existing regulations and there was no intention to cause any

loss to CIDCO. If, however, the Court is convinced that the

transaction had been undervalued, it would be appropriate

to obtain a fresh valuation and to pass orders to

compensate CIDCO in the event such under-valuation is at

all established. According to Mr. Nariman, the directions

ultimately given by the High Court for cancellation of the

allotments in favour of the respondent Nos. 5 to 10 and

forfeiture of the constructions already raised were highly

draconian and were liable to be set aside. It was urged that

the constructions having reached up to the 9th floor level, the

writ petitioners themselves were not convinced that such a

direction could be given and accordingly included prayer 'C'

which provided for adequate compensation to CIDCO for the

alleged loss suffered by it, from which position the writ

petitioners were now trying to resile. Mr. Nariman

submitted that the judgment of the High Court disclosed a

very pedantic and unrealistic approach without considering

the ground realities and the fact that the writ petitioners

had allowed expenses to be incurred and the constructions

to be raised up to a certain point before moving the Court.

Mr. Nariman urged that the appellants were ready and

willing to have the plots revalued by a Government Valuer

and to compensate CIDCO in the event the transactions

were found to be under-valued.

The learned Advocate General of Maharashtra, Mr. Ravi

Kadam, submitted that the State Government was not in

favour of forfeiture of the lands and the constructions raised

thereon on account whereof the respondents had already

incurred expenditure to the tune of almost Rs.55 crores.

The learned Advocate General urged that while a sum of

Rs.38 crores had been spent on acquisition of the plots, a

further sum of Rs.17 crores had been spent on the

construction raised thereupon. It was contended that the

construction was commenced after Commencement

Certificate had been obtained from the municipal authorities

and hence the same could not be said to be illegal.

As to the appointment of the Shankaran Committee,

the learned Advocate General submitted that pursuant to

the report submitted by the Committee, the State

Government directed CIDCO to issue show cause notices for

cancellation in respect of allotments made to some of the

societies. In fact, 14 of the grants were cancelled, while

three cases were regularized. There were still a few

allotments which were under scrutiny. In any event, the

Shankaran Committee report was treated by the State

Government to be a preliminary report and not conclusive

and as far as the respondent Nos. 5 to 10 herein were

concerned, the allotments were made to them as per the

rules and regulations and not in any clandestine manner as

had been suggested on behalf of the writ petitioners.

On behalf of Vijay Associates (Wadhwa) Developers, the

appellants in the appeal arising out of SLP (C) No. 655/2006,

Mr. Mukul Rohatgi contended that the report of the

Shankaran Committee on which reliance had been placed by

the Court, had not been made available to the parties and

was not even made part of the records. It was submitted

that consequently no reliance should have been placed on

the said report.

Mr. Rohatgi next contended that the regulations would

have no application to the case of the respondent co-

operative societies as no scheme, which was one of the

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methods for allotment of plots, had been published by

CIDCO. On the other hand, CIDCO acted in terms of its

Board Resolutions which have not been challenged in the

writ petition.

Mr. Rohatgi submitted that at all stages CIDCO had

followed the rules and regulations and it would be unfair to

attribute any bias to its officers involved in the allotment of

plots in the Navi Mumbai Township Area. It was pointed out

that since the Chief Minister was the ex-officio Chairman of

CIDCO, applications for allotment of plots were often made to

him directly and were thereafter routed to the concerned

officials of CIDCO. There was nothing extra-ordinary in the

applications having been made by the respondent-societies

to the Chief Minister which were then endorsed to the

officials of the Corporation.

Mr. Rohatgi also urged that if at all any loss had been

caused to CIDCO on account of under-valuation of the plots,

the reasonable course of action would be to have the plots

re-valued and in case it was found that they had been under-

valued, the respondent - co-operative societies could be

directed to compensate CIDCO to that extent. The order

passed by the High Court would cause extreme hardship to

the respondents and their members and would discourage

the object for which CIDCO had been created.

Mr. Rohatgi concluded on the note that in the instant

case no public interest was involved and the instant

litigation had been resorted to possibly to satisfy a grudge.

He urged that as had been observed by this Court in

Dattaraj Nathuji Thaware vs. State of Maharashtra, reported

in (2005) 1 SCC 590, 'public interest litigation' is a weapon

which has to be used with great care and circumspection

and the Judiciary has to be extremely careful to see that

behind the beautiful veil of public interest, an ugly private

malice, vested interest and/or publicity seeking is not

lurking.

The submissions advanced on behalf of the appellants

in the two appeals were reiterated by Mr. Altaf Ahmed,

learned senior counsel appearing for CIDCO. Referring to

various provisions of the Maharashtra Regional Town

Planning Act, 1966, Mr. Ahmed submitted that the

Corporation had filed an affidavit before the Bombay High

Court through its Marketing Manager wherein it had been

stated that CIDCO is the statutory agency of the State

Government and since the State Government had shown

its readiness to accept the valuation through an

independent valuer, the CIDCO had no objection to the

same. In other words, Mr. Ahmed also supported the

suggestion made on behalf of the respondent that an

independent government valuer be appointed to re-value the

plots in question and in case of under-valuation, the

concerned co-operative societies be directed to make good

the loss to CIDCO.

On behalf of the writ petitioners-respondent No.1 Mr.

Chander Uday Singh, learned senior counsel, forcefully and

pain stakingly reiterated the submissions that had been

made at the time of the hearing of the writ petition before

the High Court. He emphasized the manner in which

CIDCO had received applications from the six co-operative

societies, being the respondent Nos. 5 to 10 herein, and also

the manner in which they were processed on a priority basis

with the intention of favouring Vijay Associates (Wadhwa)

Developers who would not have otherwise been able to

procure the said plots for development. Mr. Singh reiterated

the case of the writ petitioners that the said respondent had

set up dummy co-operative societies with members who had

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no intention of acquiring any residential accommodation in

the buildings to be constructed, with the sole intention of

acquiring the six plots for commercial exploitation by

replacing all the original members with persons of its choice

on mutual understanding.

Referring to the applications which had been made by

the respondent Nos. 5 to 10, Mr. Singh submitted that it

would be obvious that all the said applications had been

made by one and the same person and had been processed

with unusual haste. Even the Corporation seemed to

appreciate the urgency involved by granting Commencement

Certificate to the appellant, Amey Co

-operative Housing Society Limited, even before the six co-

operative societies had been amalgamated. Mr .Singh urged

that the aforesaid actions on the part of CIDCO as well as

the Municipal Authorities are eloquent expressions of

favouritism shown to M/s. Vijay Associates (Wadhwa)

Developers Limited for reasons best known to the parties.

Mr. Singh urged that the Bombay High Court had

pierced the veil in scrutinizing the allotment of the six plots

in favour of the respondent co-operative societies, and had

after a correct assessment of the entire matter, directed

drastic action to be taken against the perpetrators of the

fraud in order to prevent a recurrence of such fraudulent

activity in future.

As far as prayer 'C' of the writ petition is concerned,

Mr. Singh submitted that the same was made in the

alternative, in the event, the construction had reached an

irreversible stage. In the instant case, since the main relief

had been granted by the Bombay High Court, the said

alternative prayer lost its significance.

Mr. Singh urged that Mr. V.M. Lal, the then Managing

Director of CIDCO, who had appeared and made submissions

in person in the appeal filed by him, had admitted that it was

not the intention of the Board to deny housing rights in

Navi Mumbai to those who did not completely answer the

eligibility criteria, notwithstanding the fact that the

conditions laid down by the Board had not been followed.

Mr. Singh submitted that however drastic may be the

consequences of the High Court's directions, no ground had

been made out for interference with the same and the

appeals were liable to be dismissed.

Considering the enormity of the expenses which had

already been incurred in the development of the said six plots

and having further regard to the fact that the construction

had been raised up to and beyond the 4th floor when the

writ petition was moved, we are of the view that even

though the High Court was satisfied that undue favour had

been shown to the respondent co-operative societies and

M/s. Vijay Associates (Wadhwa) Developers, the directions

given for forfeiture of the land and the constructions raised

thereupon were unrealistic, particularly when an alternate

prayer had been made for a fresh valuation of the plots for

the purpose of compensating CIDCO in the event the plots

were found to have been under-valued.

We cannot lose sight of the fact that the writ petition

had been filed by way of a public interest litigation to remedy

a wrong that may have been committed, but not to extract

the proverbial pound of flesh. There are ample facts to

support the case of the writ petitioners that undue

advantage had been shown to the concerned co-operative

societies and in the bargain to M/s. Vijay Associates

(Wadhwa) Developers Limited, but the writ petitioner Trust

approached the Court with its grievance when the

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construction was already under way with the due sanction

of the Municipal Authorities and huge expenses had already

been incurred.

In our view, the more pragmatic approach of the High

Court would have been to take recourse to the relief prayed

for in prayer 'C' of the writ petition and to have the plots re-

valued by an independent government valuer and to

compensate CIDCO in respect of any loss that may have been

caused to it on account of under-valuation of the said plots.

Apart from the above, the Bombay High Court could have

also imposed suitable penalties to discourage similar

transactions in future instead of taking recourse to such

drastic measures such as forfeiture along with cancellation

of the allotments.

We, therefore, allow the appeals and set aside the

directions given by the Bombay High Court in its impugned

judgment. The State Government is directed to cause a fresh

valuation of all the plots in question as on the date on which

the allotments were made, with notice to the petitioner and

the respondent-co-operative societies through an

independent government valuer and in the event the value is

found to be higher than that paid by the respondent-co-

operative societies, the difference in value will be paid by

Amey Co-operative housing Society Limited, the appellant in

Civil Appeal arising out of SLP (c) No.336/2006 to CIDCO,

within one month of the demand being made for payment of

the same. Till such time as the difference is not paid, the

order of injunction passed by this Court on 20th January,

2006, shall continue.

Once such valuation is effected and payment, if any, is

made, the injunction shall stand revoked and the respondent

\026co-operative societies will be entitled to continue with the

construction work. Needless to say the Navi Mumbai

Municipal Authorities will be entitled to take appropriate

action against the respondents concerned in the event the

construction is found to have violated any of the Building

Rules or the Plan as sanctioned by the Municipality.

The appeals are thus disposed of with costs to the

respondent No.1 assessed at Rs.25,000/-.