IN THE HIGH COURT AT CALCUTTA

CONSTITUTIONAL WRIT JURISDICTION

APPELLATE SIDE

PRESENT:

THE HON’BLE JUSTICE BIVAS PATTANAYAK

W.P.A. No.15313 of 2008

M/s. Manaksia Ltd.

versus

The State of West Bengal & Ors.

For the Petitioner : Mr. Chayan Gupta, Advocate

Mr. Saaqib Siddiqui, Advocate

For the State : Mr. Amitabra Roy, Advocate

Mr. Nilotpal Chatterjee, Advocate

Mr. Amritalal Chatterjee, Advocate

For the Respondent Nos. 2 & 3 : Mr. Salil Kumar Maiti, Advocate

Ms. Dolon Samanta, Advocate

Heard on : 02.04.2024, 26.11.2024, 10.12.2024,

06.01.2025, 13.03.2025, 23.04.2025,

13.05.2025, 29.10.2025

Judgment on : 27.07.2026

Bivas Pattanayak, J. :-

1. By the present writ petition, the petitioner seeks for setting aside

and/or cancellation of order under Memo no. 2652/HDA/VII-E-142/2001

dated 5

th

February, 2008 (Annexure P13 to the writ petition) and order

under Memo No. 1371/HDA/VII -E-142/2001 dated 4

th

July, 2008

(Annexure P14 to the writ petition) both issued by respondent no.3, Chief

Executive Officer, Haldia Development Authority (in short, „HDA‟) and

direction upon respondent authorities to allow the petitioner-company to

deposit the balance land premium of Rs.96,25,000/- at the rate of Rs.5.50

2

lac per acre for settlement of 35 acres of land in favour of the petitioner-

company on lease.

2. The petitioner’s case in nutshell is as follows:

(i) The petitioner is a Public Limited Company duly incorporated and

registered under the Companies Act, 1956.

(ii) In pursuance of the letter dated 7

th

September, 2001 of the petitioner-

company, the Chief Executive Officer, HDA, respondent no.3 on 11

th

September, 2001 offered allotment of 50 acres of land comprised

within J.L no. 122, Mouza-Bhuniaraychak, Police Station-Sutahata

(presently Durgachak), District- Purba Medinipur (hereinafter referred

to as „the subject land‟) in favour of the petitioner-company for setting

up an Aluminum and Steel based industry, on lease basis in

consideration of land premium @ 5.50 lacs per acre, on certain terms

and conditions as per memo no. 1393/HDA/VII-E-142/01 dated 11

th

September 2001.

(iii) By letter dated 13

th

September, 2001, the petitioner-company

acknowledged the offer and requested respondent no. 3 to re-consider

and reduce the land premium rate in appreciation of the fact that

huge fund would be required for filling up and development of 50

acres of land. Although respondent no.3 did not cause any reply to

the aforesaid letter of the petitioner-company, however, the said

prayer was duly considered in 71

st

Board meeting of HDA held on 4

th

October, 2001, wherein it was resolved as follows “board resolved in

view of the fact that construction of infrastructure such as approach

3

road, water supply and availability of power line upto the factory gate

involves huge cost, it is not possible to reduce the land premium rate”.

(iv) Admittedly, the land premium of 50 acres of land was fixed and

accepted at the rate of Rs.5.5 lacs per acre. The petitioner-company

on 28

th

December, 2001 sent two demand drafts totalling to Rs. 10

lacs in favour of the respondent no.3 as a token booking amount for

the scheduled land and also requested (a) to handover the possession

of plot of land, (b) to construct the approach road and (c) to provide

electricity connection and water supply.

(v) By its letter under Memo no. 2479/HDA/VII-E-142/2001 dated 14

th

January, 2002, the HDA informed the petitioner-company that

permission was accorded for soil testing and survey work of the

petitioner-company’s project but formal possession of the land would

be given after full and final payment of land premium. Virtually the

petitioner-company got the physical possession of 50 acres of vacant

land from the date of acceptance of the offer of its allotment.

(vi) The Chief Executive Officer, respondent no.3 sent a revised site plan

of 50 acres of land to the petitioner-company for setting up an

aluminum and steel-based industry along with a forwarding letter

under Memo no. 2831/HDA/VII -E-142/2001 dated 23

rd

February,

2002, wherein the receipt of Rs. 10 lacs towards the advance of land

premium were acknowledged and the terms and conditions of the

allotment of land vide Memo no. 1393/HDA/VII -E-142/2001 dated

11

th September, 2001 would remain the same was confirmed. The

revised site plan is nothing but alteration of shape of the plan.

4

(vii) By a forwarding letter dated 26

th

March, 2002, the petitioner-company

deposited Rs.1,27,50,000/- by a cheque in favour of respondent no.3

on account of land premium in additional to earlier payment of

Rs.10,00,000/-. As such the petitioner-company deposited 50% of the

land premium for 50 acres of land at the accepted rate of Rs.5.50 lacs

per acre. By the aforesaid letter, the petitioner-company once again

requested the respondent no.3 to provide water supply and electricity

connection at the site of the petitioner-company.

(viii) The petitioner-company further applied before respondent no.3 by its

letter dated 3

rd

July, 2002 and 4

th

July, 2002 for allotment of 15 acres

of land for establishment of an Export Oriented Unit (EOU). In reply,

respondent no.3 informed the petitioner-company on 9

th

July, 2002

that 15 acres of land being part of 50 acres of land was allotment to

the petitioner-company for the purpose of establishment of an Export

Oriented Unit. On full and final payment of land premium 15 acres of

land at the rate of Rs.5.50 lacs per acre, a registered lease deed was

executed by and between the parties on 13

th

July, 2004 for settlement

of 15 acres of land. The petitioner -company developed and

constructed infrastructure on 15 acres of land and started

commencement of commercial production at its Export Oriented Unit.

A huge amount has also been invested by the petitioner-company for

development of infrastructure on remaining 35 acres of land for

setting up an aluminum and steel-based industry which was never

objected by the concerned respondent at any point of time.

5

(ix) By its resolution adopted in 73

rd

Board Meeting and 75

th

Board

Meeting, it was resolved that the HDA would provide electricity

connection at the doorstep of the petitioner’s site and meetings were

held between the respondent and the Chairman of the petitioner-

company to finalise the modalities for commencement of 132KB sub -

station for bulk power supply to the petitioner-company and to that

effect, resolution was also adopted in 77

th

Board Meeting. In 79

th

Board Meeting, it was resolved to approach West Bengal State

Electricity Board proposing to share the cost of high-tension line at

the rate of 25% by HDA and 75% by the West Bengal State Electricity

Board respectively.

(x) The Chief Executive Officer, respondent no.3 requested the petitioner-

company to deposit balance land premium amounting to

Rs.96,25,000/- (at the rate of Rs.5.50 lacs per acre). The petitioner

could not deposit the aforesaid amount due to its financial

stringencies, which was intimated to respondent no.3 vide letter dated

2

nd

February, 2006 contending that the petitioner-company incurred

a substantial investment on plant and equipment for the project as

well as towards installation of power line and construction of sub-

station. The petitioner-company was able to deposit the balance land

premium of Rs. 96,25,000/- for 35 acres of land at the rate of Rs.5.50

lacs per acre by way of a cheque to respondent no.3 on 21

st

January,

2008.

(xi) The Chief Executive Officer, respondent no.3 asked the petitioner-

company by letter under Memo no. 2652/HDA/VII -E-142/2001 dated

6

5

th

February, 2008 to pay full land premium for 35 acres of land at

the present enhanced rate of Rs.15 lacs per acre totaling to

Rs.4,28,75,000/- on the ground of alleged failure on the part of the

petitioner-company to deposit 50% of the land premium for 35 acres

at the rate of Rs.5.50 lacs per acre i.e. Rs.96,25,000/- within time.

(xii) The petitioner-company by its letter dated 6

th

June, 2008 informed

respondent no.3 that the balance payment could not be made due to

inordinate delay in commissioning of the project.

(xiii) By its letter under Memo No. 1371/HDA/VII -E-142/2001 dated 4

th

July, 2008, the Chief Executive Officer, respondent no.3 asked the

petitioner-company to deposit the land premium amounting to

Rs.4,28,75,000/- within 15 days from the date of issue of the said

letter failing which HDA will evict the petitioner-company from the

land measuring 35 acres occupied by the petitioner-company.

(xiv) In the aforementioned allotment memo, there are no express

conditions that the land premium rate may be enhanced for deferred

payment of the balance 50% of the land premium by the petitioner -

company or the petitioner-company can be evicted from the schedule

land either for deferred payment of 50% of the land premium @ 5.50

lacs per acre or for non-payment of the land premium at an enhanced

rate without any due process of law.

(xv) Being aggrieved by and dissatisfied with the impugned letters dated

5

th

February, 2008 and 4

th

July, 2008, the petitioner has preferred

the present writ petition seeking for quashing of the said letters.

7

3. The writ petition has been keenly contested by the respondent no.3,

Chief Executive Officer, HDA denying, inter alia, the case of the petitioner

and contending as follows.

(i) The HDA is the owner of the scheduled land comprised within Mouza

– Bhunia Raychak and other adjoining lands which was acquisitioned

for the purpose of establishing industries.

(ii) By letter dated 7

th

September, 2001, Mr. B. K. Agarwal, Chairman and

Managing Director, Hindustan Seals Limited requested for purchasing

a plot of land measuring 50 acres within the Industrial Zone at Haldia

on the bank of River Bhagirathi to set up an aluminum and steel -

based industry. The HDA upon receipt of the said request by Memo

No. 1393/HDA/VII-E-142/2001 dated 11

th

September, 2001 offered

to lease out land measuring about 50 acres only for a period of 90

years for setting up of aluminum and steel -based industry with

certain agreed terms and conditions. The acceptance of the offer

should be done after complying the terms and conditions within a

specific period of two months from date of issue of that offer letter i.e.

by 10

th

November, 2001.

(iii) As per clause 3 and 4 of the offer letter, two months time was fixed for

acceptance within which period the company had to deposit 50% of

the land premium at the rate Rs. 5.50 lacs per acre. The 50% of the

land premium was paid by the petitioner-company by way of several

installments starting from 28

th

December, 2001 to 30

th

December,

2003, which is long after the stipulated period of two months.

Therefore, such acceptance of the offer after the specified period

8

amounts to breach of the mandatory terms and accordingly, the

proposal made by the offer became unenforceable and the same

cannot be extended as time was the essence of the offer.

(iv) The petitioner-company has failed to act strictly in terms of the offer

in not depositing the 50% of the land premium within the specified

period without any plausible reason and as such, the petitioner -

company cannot pray for any relief un der the offer dated 11

th

September, 2001.

(v) The petitioner-company itself changed the mode of requirement by

proposing the set of industries in different norms contrary to their

prayer dated 7

th

September, 2001. The subsequent split of the total

allotted land in the name of different industries are in clear violation

of the offer made on 11

th

September, 2001. The petitioner has come

up seeking permission to make payment of balance 50% of the land

premium at the rate of Rs.5.50 lacs per acre as per original offer after

lapse of more than 7 years, which is not at all sustainable in the eye

of law.

(vi) The question whether the offer dated 11

th

September, 2001 continues

beyond the specific period of two months or any counter offer is

created in lieu of original offer can only be decided by a competent

civil court and not by invoking writ jurisdiction under Article 226 of

the Constitution of India since disputed questions of facts are

involved in the present writ petition.

(vii) The original offer was made for the purpose of establishment of

industry in the Industrial Zone. However, it is evident from record

9

that the said company as per its whims and caprice erected

residential complex over the said offered land within the periphery of

35 acres of land. Such deviation from the original offer amounts to

breach of the said offer.

(viii) Despite several communications by the Haldia Development

Authority, the petitioner-company deliberately avoided to make any

payment of balance premium and on the contrary, made construction

over the said land without taking necessary permission from the

competent authority i.e. Haldia Municipality. The entire construction

is illegal and unauthorized made in violation of Municipal Rules and

is liable to be demolished. On receipt of letter dated 27

th

January,

2006, the petitioner-company has made attempt to pay the balance

premium, after lapse of 7 years from the original offer in order to cover

up the wrongful acts. The petitioner-company committed to make

payment of balance amount from April, 2006 but did not make any

payment by deliberately violating its own commitment.

(ix) The present market rate in respect of Industrial Zone is much more

than Rs. 5.50 lacs per acre. The adjoining companies namely (i) M/s.

Modern India Con-cast Ltd., (ii) M/s. Rahit Ferro Tech Pvt. Ltd., (iii)

M/s. Mortex Pvt. Ltd. and (iv) M/s. Dhunsheri Poly carbonate Ltd. were

offered land at rate of Rs. 15 lacs per acre and they have all accepted

the same as per their required area. The claim of the Haldia

Development Authority for present rate of Rs. 15 lacs per acre is thus

absolutely reasonable and the petitioner is bound to pay the balance

premium of land of Rs.4,28,75,000/- forthwith.

10

(x) The petitioner-company has repeatedly harped about the so -called

commitment by the Haldia Develo pment Authority but has not

forwarded any iota of ground which might prove its claim. The

petitioner-company, on being requested by the WBSEB to deposit

Rs.30,000/- for bulk power supply at 33 KV, duly deposited the same

on 18

th

July, 2002. Such fact clearly shows that there was no

commitment or promise by the Haldia Development Authority to

supply power to doorstep of the petitioner-company. In spite of no

commitment by Haldia Development Authority to the petitioner,

however, just to facilitate industrial growth and to provide

infrastructure, the Haldia Development Authority allotted 7.5 acres of

land absolutely free of cost to the WBSEB (at present WBSEDCL)

adjacent to the petitioner-company in order to provide power to the

Industrial Zone, which has acted upon the decision of the Board. The

petitioner-company got the power on August, 2006, which has been

accepted by them in their letter dated 6

th

June, 2008, however, they

did not take any initiative to make the balance payment even though

they committed to make payment from April, 2006 vide letter dated

2

nd

February, 2006. Hence, the intention of the petitioner-company

was not noble and they took lame excuses for not making payment

which remained due to HDA.

(xi) For the betterment of establishment, the HDA took lenient view for

recovery of balance land premium from the petitioner-company upto

27

th January, 2006 and vide letter under Memo no. 3123/HAD/VII-E-

142 dated 27

th

January, 2006, granted further 7 days’ time to make

11

such payment. The petitioner-company has not submitted any iota of

document showing that it is ready and willing to pay the balance

premium amount as per offer letter or counter offer letter. In spite the

petitioner-company has taken resort to so -called commitment for

development of infrastructure by the Haldia Development Authority

such as water, power and approach road etc. to its door step. The

Haldia Development Authority admittedly on or before August, 2006

fulfilled all its obligations, however, the petitioner -company

deliberately did not take any initiative to make balance payment, even

though they committed to make payment from April, 2006.

(xii) The petitioner-company is estopped from claiming any legitimate

expectation after a lapse of more than 6 years from the stipulated

period of 2 months. The petitioner-company has deliberately and

willfully violated terms of the offer letter in not making payment of the

balance land premium and is unwilling to perform its part of the offer

letter.

(xiii) On aforesaid ground, respondents -Haldia Development Auth ority

sought for dismissal of the writ petition.

4. The petitioner filed affidavit-in-reply denying the averments in the

affidavit-in-opposition and contending that Haldia Development Authority

in its letter under Memo No. 3123/HDA/VII -E-142/2001 dated 27

th

January, 2006 requested the petitioner-company to deposit the balance

land premium of Rs.96,25,000/- within 7 days from the date of issue of

the letter, otherwise the offer letter may be treated as cancelled. Thus, the

expression „the offer letter may be treated as cancelled‟ does not amount to

12

cancellation of the offer letter automatically. As such the offer letter dated

11

th

September, 2001 still remains in force. In reply to the letter dated 27

th

January, 2006, the petitioner expressed its inability to deposit the balance

amount land premium. Ultimately on 18

th

January, 2008 the petitioner-

company tendered the balance land premium of Rs.96,25,000/ - but the

same was not accepted by the office of respondent no.3 -HDA. As the

petitioner-company has been allowed to construct the industry on 50 acres

of land, the question of forfeiture by the concerned respondents does not

arise at all. Further no lease agreement has yet been executed between the

parties in respect of allotment of 50 acres of land nor possession of the

land has been formally delivered to the petitioner-company but respondent

no.3 has been realizing the lease rent in respect of leasehold property from

the petitioner-company.

5. The respondent no.3, on the contrary, has filed supplementary

affidavit-in-opposition stating that the notice of payment of lease rent is

nothing but a token rent as per the offer letter dated 11

th

September, 2001

and it does not confer any special right to the petitioner-company to claim

to the effect that the said offer letter is still binding upon the parties and is

enforceable in the eye of law. A tenancy is only created as and when lease

agreement is executed, registered and possession is delivered. Mere

demand of token rent as made on 7

th

March, 2007 is not a rent at all and

may be treated as user’s fee and/or licence fee.

6. Mr. Abhrotosh Majumdar, learned Senior Advocate appearing for the

petitioner submitted that Chief Executive Officer of HDA being respondent

No.3 offered allotment of 50 acres of land at the subject plot in favour of

13

the petitioner for setting up aluminium and steel -based industry on

certain terms and conditions @ Rs.5.50 lacs per acre by dint of memo

dated 11

th

September, 2001 and a token rent @ Rs.0.25% of the total land

premium per acre which would be enhanced @ 5% annually. The petitioner

acknowledged the said offer, however, by letter dated 13

th

September, 2001

requested the authority concerned to reconsider the rate of premium. The

petitioner pointed out that the subject-land is a very low land an d

substantial amount of funds would be spent for its development. In 71

st

Board meeting held on 4

th

October, 2001, the HDA considered the prayer

made by the petitioner for reduction of rate of premium. However, it was

resolved that in view of the fact that constructional infrastructure such as

approach road, water supply and availability of power line up to the factory

gate would involve huge costs, it would not be possible to reduce the land

premium rate. Hence the counter offer made by the petitioner was rejected.

On a conjoint reading of the offer letter dated 11

th

September, 2001, and

71

st

Board resolution dated 4

th

October, 2001, it would be apparent that

the land premium rate in the offer letter was inclusive of the cost of

construction of infrastructure such as approach road, water supply and

availability of power line up to the factory gate. The petitioner accepted the

offer and made payment of Rs 1,68,75,000/- i.e. 61.36% of the total land

premium of Rs.2,75,00,000/-@ of Rs. 5.5 lacs per acre for 50 acres.

Further, on perusal of the minutes of 73

rd

Board meeting dated 11

th

April,

2002, 75

th

Board meeting dated 23

rd

August, 2002, 77

th

Board meeting

dated 27

th December, 2002 and 79

th Board meeting dated 8

th July, 2003, it

would be apparent that HDA was not able to provide the infrastructure for

14

enhancement of commercial production to the industrial unit of the

petitioner. Hence, it is not gainsaid by the respondent authorities namely

HDA that the rate of land premium i.e. Rs. 5.50 lacs per acre as provided

in the offer letter dated 11

th

September 2001, was not inclusive of the cost

of infrastructure development. As such the offer letter made by the

respondent authorities for allotment of the subject land was coupled with

their unequivocal commitment to provide necessary infrastructure for

industrial development.

Needles to say that the petitioner made payment of 1.27 crores towards

50% of the total land premium payable for 50 acres of land. Thereafter, a

decision was taken to split up the lands into 15 acres and 35 acres and

lease deed was executed for 15 acres of land in favour of the petitioner for

a land premium @ Rs. 5.50 lacs per acre. The petitioner made a further

payment of Rs. 41.25 lacs on 30

th

December 2003, and subsequently had

made payment of the balance amount of Rs.96.25 lacs in accordance with

the directions passed by this Hon’ble Court vide order dated 18

th

July,

2008. The respondent authorities continue to charge rent in respect of 15

acres of land till now taking the base of Rs.5.50 lacs per acre as land

premium.

Once the respondent authorities had accepted the rent for the entire 50

acres of land taking the base of Rs. 5.50 per acre, it is not open to the

respondent authorities to enhance the land premium unilaterally. There

has been an abject failure on the part of respondent authority to provide

necessary infrastructure of the industrial units of the petitioner as

committed by the respondent authorities in the 71

st

Board resolution dated

15

4

th

October, 2001. Therefore, the respondent authorities could not have

arbitrarily enhanced the land premium @ Rs. 15 lacs per acre.

The HDA being an instrumentality of the State, is therefore, an ‘authority‟

within the meaning of Article 12 of the Constitution of India and is

amenable to writ jurisdiction of the court. The consequence which follows

is that in all its action, it must be governed by Article 14 of the

Constitution and cannot act with arbitrariness and capriciousness. It is

settled principle of law that the State and its instrumentalities have to be

just, fair and reasonable in all their activities including those in the field of

contracts. The State and its authorities playing the role of the landlord or

tenant cannot be heard or seen causing displeasure or discomfort of Article

14 of the Constitution. In support of his contention, he relied on the

decision of the Hon’ble Supreme Court passed in Jamshed Hormusji

Wadia versus Board of Trustees, Port of Mumbai and Another

1

.

In the present case the HDA has accepted 50% of land premium for 50

acres of land. The petitioner had been regularly paying rent to HDA for 50

acres of land which has been accepted by the HDA Authorities till 31

st

March, 2007 without any demur. Despite such payment been made by the

petitioner, the HDA failed to provide necessary infrastructure, the cost of

which were included in the rate of land premium of Rs. 5.5 lacs per acres.

Hence it is not open to HDA to issue the impugned memo dated 5

th

February, 2008, enhancing the land premium to Rs. 15 lacs per acre and

memo dated 4

th

July, 2008 resorting to coercive actions of threatening the

petitioner of consequences like eviction. Furthermore, since the petitioner

1

(2004) 3 SCC 214

16

had deposited the entire land premium upon deposit of the balance

amount in terms of order of this Court which has not been challenged by

the HDA authorities, hence the impugned notices are liable to be quashed

and HDA be directed to execute lease deed in respect of the remaining 35

acres of land for a land premium @ Rs. 5.50 lacs per acre with effect from

13

th

July, 2004, that is the date on which deed of lease for 15 acres was

executed and registered.

Moreover, once the writ petition had been entertained and is pending for

merely for last 17 years and an interim order is still subsisting, it is not

open to the respondent authorities at this belated stage to contend that the

writ petition is not maintainable and the petitioner should be relegated to

the civil court. The respondent authorities did not challenge the order

dated 18

th

July, 2008 wherein the petitioner was directed to deposit the

balance amount and as a matter of fact the respondent authorities have

also accepted the payment. It is no more res integra that when the court

has already entertained the writ petition and issued an interim order,

affidavits have been filed and the matter have been heard at length, the

court in such circumstances would not be justified in rejecting the writ

petition on the ground of availability of alternative remedy. In support of

his contention, he relied on the following decisions.

(i) L. Hirday Narain versus Income-Tax Officer, Bareilly

2

;

(ii) State of H.P. and Others versus Gujarat Ambuja Cement Ltd.

and Another

3

;

2

1970(2) SCC 355

3

(2005) 6 SCC 499

17

(iii) Naffar Chandra Jute Mills Ltd. versus Assistant Collector of

C. Ex.

4

;

(iv) Raja Mookherjee and Others versus Wealth-Tax Officer and

Others

5

.

In light of his aforesaid submissions, he prayed for setting aside and/or

cancellation of order under Memo no. 2652/HDA/VII -E-142/2001 dated

5

th

February, 2008 (Annexure P13) and order under Memo No.

1371/HDA/VII-E-142/2001 dated 4

th

July, 2008 (Annexure P14) both

issued by the Chief Executive Officer, HDA, respondent no.3 and direction

upon respondent authorities to allow the petitioner-company to deposit the

balance land premium in terms of the letter dated 11

th

September, 2001.

7. Mr. Kallol Kumar Basu, learned advocate appearing for respondent

nos. 2 & 3- Haldia Development Authority submitted that by letter dated

11

th

September, 2001 the authority had proposed to hand over 50 acres of

land @ Rs.5.50 lakh per acre provided that the petitioner deposited such

land premium within a period of two months from date of issuance of the

said letter (Annexure P1, page-37). Such letter can be viewed as

constituting a proposal within the meaning of Section 2(a) of the Indian

Contract Act, 1872 (hereinafter referred to as „Act of 1872‟). Only if an

assent had been provided by the petitioner- company in respect of the said

proposal, a promise would have been formed and deposition of land

premium at the rate mentioned in the said letter would have constituted

the consideration for such promise within the meaning of Section 2(d) of

4

1993 (66) E.L.T. 574 (Cal.)

5

204 ITR 276

18

the Act of 1872. However, it reveals that the said proposal was not

accepted unconditionally as required under Section 7 of the Act of 1872 for

a proposal to transform into a promise. As such, the earlier proposal of the

respondent authorities never materialized into a promise and, therefore, no

contract was formed.

The acknowledgement of receipt of Rs.10,00,000/- on 21

st

February, 2002

by the authority formed a part of a revised offer whereunder the terms

governing the allotment of land remained unchanged but the site plan of

the said land was altered. In other words, a revised offer similar to the

initial offer dated 11

th

September, 2001 was made by the authority which

meant that the balance land premium ought to have been deposited within

the period of two months from date of receipt of the revised order. In view

thereof, the deposit of a sum of Rs.1,27,50,000/- on 23

rd

March, 2002

(Annexure P-7, page-45) could well be considered to form a part of the land

premium payable at the applicable rate, as the same was deposited within

two months from the date of issuance of the revised offer letter. Thereafter,

the petitioner did not make any further payment and as such , the said

revised offer did not materialize into promise and/or culminate into a

contract. Upon offer made on behalf of the petitioner on 3

rd

July, 2002 and

4

th

July, 2002 for transfer of 15 acres of land, the same was accepted and

upon full and final payment of the requisite land premium, the said 15

acres of land was allotted to the petitioner-company, as would be evident

from the possession certificate dated 25

th

June, 2004 referred to in

paragraph no. 17 of the affidavit-in-opposition.

19

By letter dated 27

th

January, 2006 (Annexure P-10, page-59) the said

authority had demanded payment of the balance land premium in respect

of remaining 35 acres of land out of 50 acres initially offered in September,

2001. This was, by all means, a fresh offer to allow the petitioner -

company to gain possession over the remaining 35 acres but the same was

turned down by the p etitioner-company through its letter dated 2

nd

February, 2006 (Annexure P11, page-60 and 61). As such, the said offer

letter dated 27

th

January, 2006 also did not materialize into a promise.

Although much has been contended by the petitioner -company of the

authority’s alleged commitment to ensure supply of electricity and water to

the factory premises set up by the petitioner-company but such purported

commitment did not find any mention in the original terms of proposal

dated 11

th

September, 2001, revised proposal dated 21

st

February, 2002

and/ or letter dated 27

th

January, 2006. Further much reliance has been

placed upon the 73

rd

and 75

th

Board resolutions (Annexure P-9, page 47 to

51) of the authority by the petitioner-company to bolster their claim that it

was due to the delay caused by the said authority in not holding up their

end of bargain and in failing to ensure supply of water and electricity to

the doorstep of the factory. The aspect of delay could have been relevant

only if it could have been shown that the initial offer dated 11

th

September,

2001 was subsisting and the provision of electricity/water supply formed a

part of the reciprocal promises in respect of such offer. Assuming but not

admitting that the initial offer was subsisting, the provisioning of the

electricity had been completed in the month of August, 2006 as has been

admitted by the petitioner-company in its letter dated 2

nd

February, 2006

20

(Page 58 of the affidavit-in-opposition), however, non-payment of land

premium by the petitioner-company for more than one year from August ,

2006, contrary to their own representation that balance will be paid on

and from April, 2006, remains unexplained. Moreover, th e Board

resolution does not amount to communication with or to the petitioner to

the effect of acceptance of continuance of any promise. Additionally,

commercial difficulty, inconvenience or hardship in performance of the

conditions in a proposal can provide no justification in not complying with

the same specially when the petitioner-company claims subsistence of the

original proposal dated 11

th

September, 2001. To buttress his contention,

he relied on the decision of Hon’ble Supreme Court passed in Joshi

Technologies International Inc. versus Union of India and Others

6

.

The petitioner has also based its argument in relation to interpretation of

the terms of the initial offer letter dated 11

th

September, 2001. Effectively,

the writ petitioner has invited this Hon’ble Court to adjudicate questions

which squarely fall within the realm of private contractual law. In this

regard it is submitted that negotiations and/or communications

exchanged between the said authority and the petitioner-company do not

give any indication of a concluded contract having a statutory character.

Merely because the HDA constituted under Section 17 of the West Bengal

Town and Country (Planning and Development) Act, 1979 is one of the

parties to a purported contract, does not give rise to sufficient cause for

maintaining a writ petition before this Hon’ble Court under Article 226 of

the Constitution of India. Moreover, disputes regarding the true meaning,

6

(2015) 7 SCC 728

21

purport and/or interpretation of covenants in the private contractual

realm, must be placed beyond the writ jurisdiction and fall within the

domain of a civil court. In support of his contention, he relied on the

decision of Hon’ble Supreme Court passed in Kerala S.E.B versus Kurien

E. Kalathil

7

. Thus, the disputes raised in the writ petition cannot be

adjudicated in the writ jurisdiction and same ought to be not

maintainable, especially when no public law element is involved. Reliance

is also placed on the decision of a Co-ordinate Bench of this court passed

in Haldiram Ltd. versus The State of West Bengal & Ors

8

.

Further, the initial offer expired on 11

th

November, 2001 and as such the

writ petition seeking relief is hopelessly delayed and displays abject laches

on the part of the petitioner-company. When extraordinary jurisdiction is

sought to be invoked, the petitioner has to approach the Court within a

reasonable period. If it is found that there is delay and laches, in such

event the Court ought to dismiss the writ petition on such ground only. In

support of his contention, he relied on the decision of Hon’ble Supreme

Court passed in Tridip Kumar Dingal and Others versus State of West

Bengal and Others

9

.

Moreover, the petitioner-company tried to make out a case that due to

failure of the part of the said authority in arranging for electricity and

water supply, the production activities were delayed and as such no

revenue could be generated so as to remit land premium within time.

However, the petitioner-company deliberately suppressed their own letter

7

(2000) 6 SCC 293

8

(2009)1 CAL LT 158 (HC)

9

(2009) 1 SCC 768

22

dated 6

th

June, 2008 wherefrom it would be revealed that requirement of

electricity and water had been met since August, 2006 but the petitioner-

company failed to remit a single farthing for more than one and half years.

Thus, the petitioner has not approached this Hon’ble Court with unclean

hands and as such the writ petition is liable to be dismissed on the ground

of suppression of fact.

Furthermore, the petitioner’s claim of possession having been handed over

by the said authority without full and final payment in the absence of any

possession certificate is incorrect and such claim is essentially a distorted

fact. Therefore, any relief granted would be based on distorted facts and

would amount to abuse of process of law. To buttress contention, he relied

on the decision of Hon’ble Supreme Court passed in K.D. Sharma versus

Steel Authority of India Limited and Others

10

.

Further it has been argued on behalf of the petitioner-company that once

a writ is admitted, it would not be proper to dismiss the same on the

ground of availability of alternative remedy relying on L. Hirday Narain

(supra), Gujarat Ambuja Cement Ltd. (supra), Naffar Chandra Jute Mills

(supra), Raja Mookherjee (supra). However, relying on the decision of

Hon’ble Supreme Court in State of State of Uttar Pradesh and Another

verus Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti

and Other

11

, he submitted that the Hon’ble Court observed that it cannot

be laid down as a proposition of law that once the petition is admitted, it

could never be dismissed on the ground of alternative remedy.

10

(2008) 12 SCC 481

11

(2008) 12 SCC 675

23

Further in case of Jamshed Hormusji Wadia (supra) relied upon by the

petitioner-company, the Hon’ble Court held that the State and its

instrumentalities have the liberty of revising the rate of rents so as to

compensate themselves against loss caused by inflationary tendencies. The

said authority by hiking the land premium rate was accounting for

inflationary tendencies. Moreover, in the cited decision there was an

existing lease agreement which was sought to be renewed whereas in the

instant case, no concluded contract had been reached in respect of the

balance 35 acres of land and as such it is not applicable.

In light of his aforesaid submissions, he sought for dismissal of the writ

petition.

8. Mr. Amitabra Roy, learned advocate for the State respondents leaves

the matter to the discretion of the court since the answering respondent is

HDA.

9. Upon hearing the learned advocates for the respective parties,

following issues falls for consideration.

(i) Whether the present writ petition is maintainable?

(ii) Whether the order/letter dated 5

th

February, 2008 (Annexure P-

13) and order/letter dated 4

th

July, 2008 (Annexure P14) both

issued by the Chief Executive Officer, Haldia Development

Authority, respondent no.3 are arbitrary and unsustainable?

Issue no.(i): Whether the present writ petition is maintainable?

10. The maintainability of the writ petition is challenged precisely on

three-fold grounds. Firstly, merely because HDA constituted under Section

17 of the West Bengal Town and Country (Planning and Developm ent) Act,

24

1979 is one of the parties to a purported contract does not give rise to

sufficient cause for maintaining a writ petition before this Hon’ble Court

under Article 226 of the Constitution of India. Secondly, as the initial offer

expired on 11

th

November, 2001 and as such the writ petition seeking relief

is hopelessly delayed and displays abject laches on the part of the

petitioner-company. Thirdly, the disputes regarding the true meaning,

purport and/or interpretation of covenants in the private con tractual

realm, must be placed beyond the writ jurisdiction and fall within the

domain of a civil court, which is an alternative remedy available to the

petitioner.

10.1. There cannot be any quarrel that in pursuance of the letter dated 7

th

September, 2001 of the petitioner-company, the Chief Executive Officer,

Haldia Development Authority, respondent no.3 on 11

th

September, 2001

offered allotment of 50 acres of subject land in favour of the petitioner-

company for setting up an Aluminum and Steel based industry, on lease

basis in consideration of land premium @ 5.50 lacs per acre, on certain

terms and conditions as per memo no. 1393/ HDA/VII-E-142/01 dated

11

th

September, 2001. The petitioner-company paid a part of land

premium and sought direction upon respondent authorities to allow the

petitioner-company to deposit the balance land premium of

Rs.96,25,000/- @ Rs.5.50 lac per acre for settlement of 35 acres of land in

favour of the petitioner-company on lease. By letter under Memo no.

2652/HDA/VII-E-142/2001 dated 5

th

February, 2008 (Annexure P-13) the

said Authority claimed the land premium @ Rs.15 lac per acre.

Indisputably, there is no concluded contract in respect of the subject land

25

measuring 35 acres. Thus, the challenge in the present writ petition is

against the enhanced rate of land premium claimed by the HDA and not

against terms of any concluded contract. Undeniably, HDA has been

constituted under Section 17 of the West Bengal Town and Country

(Planning and Development) Act, 1979 and thus is a Statutory Authority.

10.2. In order to dilate the aforesaid aspect further, it would be profitable

to consider the observation of Hon’ble Supreme Court in following

decisions.

10.3. In Federal Bank Ltd. versus Sagar Thomas and Others

12

, in

paragraph no.18 held as follows.

“18. From the decisions referred to above, the position that emerges is that

a writ petition under Article 226 of the Constitution of India may be

maintainable against (i) the State (Government); (ii) an authority; (iii) a

statutory body; (iv) an instrumentality or agency of the State; (v) a

company which is financed and owned by the State; (vi) a private body

run substantially on State funding; (vii) a private body discharging public

duty or positive obligation of public nature and (viii) a person or a body

under liability to discharge any function under any statute, to compel it to

perform such a statutory function.”

10.4. Further in Andi Mukta Sadguru Shree Muktajee Vandas Swami

Suvarna Jayanti Mahotsav Smarak Trust and others versus V.R.

Rudani and others

13

the Hon’ble Supreme Court in Paragraph 20 of the

Report held as follows:

“20. The term 'authority' used in Article 226, in the context, must receive a

liberal meaning unlike the term in Article 12. Article 12 is relevant only for

the purpose of enforcement of fundamental rights under Article 32. Article

226 confers power on the High Courts to issue writs for enforcement of the

fundamental rights as well as non-fundamental rights. The words 'any

person or authority' used in Article 226 are, therefore, not to be confined

only to statutory authorities and instrumentalities of the State. They may

cover any other person or body performing public duty. The form of the

body concerned is not very much relevant. What is relevant is the nature

of the duty imposed on the body. The duty must be judged in the light of

positive obligation owed by the person or authority to the affected party.

12

(2003) 10 SCC 733

13

(1989) 2 S.C.C. 691

26

No matter by what means the duty is imposed, if a positive obligation

exists mandamus cannot be denied.”

This principle establishes that the scope of Article 226 extends beyond

entities that qualify as "State" under Article 12.

10.5. In Bareilly Development Authority v ersus Ajay Pal Singh

14

the

Hon’ble Supreme Court after considering a catena of judgments observed

that where the contract entered into between the State and the persons

aggrieved is non-statutory and purely contractual and the rights are

governed only by the terms of the contract, no writ or order can be issued

under Article 226 of the Constitution of India so as to compel the

authorities to remedy a breach of contract pure and simple.

10.6. However, in Indore Development Authority versus Smt. Sadhna

Agarwal and others

15

the Supreme Court affirmed and approved the view

taken by the Apex Court in Bareilly Development Authority (supra), but it

further provided that the High Court, while exercising its extraordinary

jurisdiction under Article 226 of the Constitution, may satisfy itself on the

materials on record that the State has not acted in arbitrary or erratic

manner.

10.7. Bearing in mind the aforesaid principle since the challenge in the

present writ petition is against the enhanced rate of land premium claimed

by the Authority, which is a decision of the authority and not against any

terms concluded contract, hence writ petitions are maintainable against

orders passed by statutory authorities in exercise of their statutory

functions. The legality, validity and maintainability of the order/decision of

14

AIR 1989 SC 1076

15

(1995) 3 SCC 1

27

statutory authority can always be made subject matter of judicial review,

albeit, within the well-recognized limitations applicable to the process of

judicial review.

10.8. Although much have been argued on behalf of Authority relying on

Kurien E. Kalathil (supra) and Haldiram Ltd (supra) that the writ petitioner

has invited this Hon’ble Court to adjudicate questions which squarely fall

within the realm of private contractual law and must be vouched before

the civil court, however, as it is found that admittedly there is no

concluded contract between the petitioner-company and HDA, hence such

proposition does not apply to the facts of this case. Since the present case

is not concerning adjudication of any contractual obligation but a

challenge to the claim of enhanced rate of land premium, hence the aspect

of availability of alternative remedy cannot stand in the way of the writ

petitioner to press its prayer under writ jurisdiction. Although it is settled

position of law that it cannot be laid down as a proposition of law that once

the petition is admitted, it could never be dismissed on the ground of

alternative remedy as observed by Hon’ble Supreme Court in Uttar Pradesh

Rajya Khanij Vikas Nigam Sangharsh Samiti (supra), however, the said

proposition is not relevant to the facts and circumstances of this case.

10.9. With regard to the second ground of challenge to the maintainability

of the writ petition of delay and laches it would be appropriate to analyze

the chronology of events which stands undisputed, in order to examine

such ground. The initial offer was made on 11

th September, 2001, however,

subsequent thereto letter of communication was made on 13

th September,

2001 by the petitioner-company acknowledging the offer and requesting

28

respondent no. 3 to re-consider and reduce the land premium rate in

appreciation of the fact that huge fund would be required for filling up and

development of 50 acres of land which was considered in the 71

st

Board

Meeting of HDA held on 4

th

October, 2001 and rejected. The petitioner-

company on 28

th

December, 2001 sent two demand drafts totalling to Rs.

10 lacs in favour of the respondent no.3 as a token booking amount for the

scheduled land. Indisputably a revised offer was made whereunder the

terms governing the allotment of land remained unchanged but the site

plan of the said land was altered as per letter of HDA dated 23

rd

February,

2002. On 26

th

March, 2002, the petitioner -company deposited

Rs.1,27,50,000/-. Respondent no.3 informed the petitioner-company on

9

th

July, 2002 that 15 acres of land being part of 50 acres of land was

allotted to the petitioner-company for the purpose of establishment of an

Export Oriented Unit and a registered lease deed was executed by and

between the parties on 13

th

July, 2004. On 27

th

January, 2006 HDA

demanded payment of the balance land premium in respect of remaining

35 acres of land out of 50 acres initially offered in September, 2001. The

petitioner-company informed to respondent no.3 vide letter dated 2

nd

February, 2006 of its inability to make payment. By letter under Memo no.

2652/HDA/VII-E-142/2001 dated 5

th

February, 2008 (Annexure P13) the

said Authority claimed the land premium @ Rs.15 lac per acre. The

petitioner-company by its letter dated 6

th

June, 2008 informed respondent

no.3 that the remaining balance payment could not be made due to

inordinate delay in commissioning of the project. By its letter under Memo

No. 1371/HDA/VII-E-142/2001 dated 4

th

July, 2008, the Chief Executive

29

Officer, respondent no.3 asked the petitioner-company to deposit the land

premium amounting to Rs.4,28,75,000/ - within 15 days from the date of

issue of the said letter failing which Haldia Development Authority will

evict the petitioner-company from the land measuring 35 acres occupied

by the petitioner-company. The writ petition has been filed thereafter on

16

th

July, 2008. Thus, although the initial offer was made on 11

th

September, 2001 yet considering the entire conspectus of the cause of

action it appears that the grievance of the petitioner arose upon issuance

of letter dated 5

th

February, 2008 and 4

th

July, 2008 by the Authority

concerned. Therefore, it cannot be said that there is delay in filing of the

writ petition. Hence, the argument advanced on behalf of the said

Authority relying on the decision of Hon’ble Supreme Court in Tridip

Kumar Dingal (supra) that the writ petition is liable to be dismissed on the

ground of delay alone cannot be accepted in the backdrop of the facts

noted hereinabove.

10.10. So far as the third ground of thrust to maintainability of the writ

petition pertaining to availability of alternative remedy is concerned, it has

been vociferously argued on behalf of the said Authority that effectively, the

writ petitioner has invited this Hon’ble Court to adjudicate questions

which squarely fall within the realm of private contractual law. Disputes

regarding the true meaning, purport and/or interpretation of covenants in

the private contractual realm, must be placed beyond the writ jurisdiction

and fall within the domain of a civil court. Reliance has been placed on the

decision of Hon’ble Supreme Court Kurien E. Kalathil (supra) and thus, the

disputes raised in the writ petition cannot be adjudicated in the writ

30

jurisdiction and same ought to be not maintainable, especially no public

law element is involved.

The rule of exclusion of writ jurisdiction by availability of alternative

remedy is a rule of discretion and not one of compulsion. In spite of

availability of alternative remedy, the High Court may still exercise its writ

jurisdiction in at least three contingencies: (i) where the writ petition seeks

enforcement of any of the fundamental rights; (ii) where there is failure of

principles of natural justice; (iii) where the orders or proceedings are

wholly without jurisdiction or the vires of the Act is challenged. (See

Harbanslal Sahania versus Indian Oil Corporation Limited

16

).

Bearing in mind the aforesaid proposition, let me revert back to the facts of

the case. It has already been found that the challenge in the present writ

petition is against the enhanced rate of land premium claimed by the

Authority, which is a decision of the authority and not against terms of

any concluded contract, hence writ petition is maintainable against orders

passed by statutory authorities in exercise of their statutory functions.

Therefore, the argument on behalf of the authority that disputes regarding

the true meaning, purport and/or interpretation of covenants in the

private contractual realm, must be placed beyond the writ jurisdiction and

fall within the domain of a civil court, is misconceived and plea of

availability of alternative remedy in civil court being a bar in maintaining a

writ petition is unacceptable.

10.11. In light of the above discussion, this Court is of the opinion that the

present writ petition is very much maintainable.

16

(2003) 2 SCC 107

31

Issue no.(ii): Whether the order/letter dated 5

th February, 2008 (Annexure P-

13) and order/letter dated 4

th July, 2008 (Annexure P14) both issued by the

Chief Executive Officer, Haldia Development Authority, respondent no.3 is

arbitrary and unsustainable?

11. The principle dispute revolves around an offer letter of the said

Authority dated 11

th

September, 2001. For better analysis and

appreciation of the instant issue, it would be profitable to reproduce the

relevant offer letter as hereunder:

“Office of the

Chief Executive Officer

Haldia Development Authority

P.O. Durgachak, Haldia, Midnapore

West Bengal – 721 602

Memo No. 1393/HDA/VII -E-142/01 Dated the 11

th

September, 2001.

From : Chief Executive Officer

Haldia Development Authority

To : M/S Hindustan Seals Limited,

8/1, Lalbazar Street, Bikaner Building (3rd Floor),

Kolkata – 700001

Sub: Offer of land measuring 50.0 acres for setting up of

an aluminum and steel based industry.

Ref: Your letter no. NIL dated 07.09.2001.

Sir,

With reference to the above, we are pleased to provisionally offer you

50.0 acres of land at mouza Bhuniaraychak (122), P.S. Sutahata Dist.

Midnapore. As regards the allotment of land the following terms may

please be noted:

1. The land will be given on 90 (ninety) years lease basis and is

renewable also.

2. The land premium rate is Rs.5.50 lakhs (Rs.five lakhs fifty thousand)

only per acre and token rent @ Rs.0.25% of the total land premium per

year will have to be paid, which will be enhanced @ Rs.5% annually,

subject to the approval of the Board of Haldia Development Authority.

3. This offer letter is valid for 2 (two) months from the date of issue of this

letter.

4. You have to deposit 50% of the land premium as an acceptance of this

offer letter.

5. The possession of land will be delivered after completion of the full

land final payment of land premium.

6. Payment have to be made in favour of Chief Executive Officer, Haldia

Development Authority by Demand Draft/Bankers Cheque payable at

Haldia only.

7. In case you fail to establish your project within the stipulated time and

as per terms and conditions of agreement and if you pray for refund of

the advance premium, the subject shall be decided by the Board of

HDA which shall be final and binding on all concerned.

32

8. Final terms and conditions will be settled during execution of lease

deed.

Thanking you,

Yours faithfully

Chief Executive Officer

Haldia Development Authority ”

11.1. Upon bare reading of the aforesaid offer letter, it manifests that the

subject land was proposed to be given for lease of 90 years, which is

renewable. The land premium was fixed @ Rs.5.50 lac per acre with a

token rent @ 0.25% of the total land premium per year which was to be

enhanced @ 5% annually subject to approval of the said Authority. The

offer letter was made valid for two months from date of its issuance i.e. 11

th

September, 2001. Further the petitioner-company had to deposit 50% of

the land premium as an acceptance of the offer letter and the possession of

the land was to be delivered after completion of the full and final payment

of the land premium. T hus, the total land premium was fixed at

Rs.2,75,00,000/-. On 13

th

September 2001 the petitioner-company sent a

letter to the said Authority acknowledging the offer and agreed to the terms

and conditions stipulated therein and requested respondent no. 3, Chief

Executive Officer to re-consider and reduce the land premium rate in

appreciation of the fact that huge fund would be required for filling up and

development of 50 acres of land. The prayer for reduction of land premium

made in the aforesaid letter by the petitioner-company was discussed and

duly considered in the 71

st

Board Meeting of Haldia Development Authority

held on 4

th

October, 2001 wherein it was resolved as follows “board

resolved in view of the fact that construction of infrastructure such as

approach road, water supply and availability of power line upto the factory

33

gate involves huge cost, it is not possible to reduce the land premium rate”.

Subsequent thereto, by letter dated 28

th

December, 2001, the petitioner-

company sent two demand drafts totalling to Rs. 10 lacs in favour of the

respondent no.3 as a token booking amount for the scheduled land and

also requested to handover the possession of plot of land by 31

st

December, 2001 so that the company may proceed with soil testing, land

filling and construction activity. Thus, since after the prayer for reduction

of land premium of the petitioner-company was turned down by the said

Authority, the petitioner-company tendered the token booking amount

requesting for handing over of the subject land, it can well be construed

that the petitioner-company accepted the land premium fixed by HDA.

There was no dispute raised thereafter with regard to the land premium

fixed in respect of the subject land.

11.2. Indisputably a revised offer was made whereunde r the terms

governing the allotment of land remained unchanged but the site plan of

the said land was altered as informed by the said Authority vide letter

under Memo no. 2831 dated 21

st

February, 2002 and the Authority in its

said letter also acknowledged the receipt of Rs. 10,00,000/-. Thereafter, on

26

th

March, 2002, the petitioner-company deposited Rs.1,27,50,000/- by a

cheque in favour of respondent no.3 on account of land premium in

addition to earlier payment of Rs.10,00,000/-. As per the offer letter the

same was made valid for a period of two months meaning thereby that the

validity was for two months from the date of revision of the plan on 21

st

February 2002. Though 50% of the land premium was paid but remaining

was not paid within the period of validity of two months. Although the

34

petitioner-company has raised the issue that the said Authority did not

provide supply of electricity and water to the factory premises set up by the

petitioner-company and resulted in delayed execution of their project but

needless to mention that the payment of land premium was never subject

to providing such infrastructure as is evident from the original terms of

proposal dated 11

th

September 2001. The revised proposal dated 21

st

February 2002 also did not contain any change in the terms and

conditions which subjected the payment of balance amount of land

premium to providing of infrastructure. By letter dated 9

th

July, 2002, 15

acres out of 50 acres offered land was allotted to the petitioner-company

for establishing Export Oriented Unit. Though on 18

th

April, 2003 a letter

of communication was made by petitioner-company to the said Authority

for arranging for power supply at the site of the petitioner-company yet

since 9

th

July, 2002 the petitioner-company did not take any endeavour to

make payment of remaining amount of the land premium for almost more

than three years. Ultimately the said Authority on 27

th

January 2006

issued a letter of reminder for depositing the remaining land premium of

Rs. 96,25,000/- within seven days otherwise the offer letter shall be

treated as cancelled. Though the petitioner-company acknowledged that

the balance land premium of Rs.96,25,000/ - is due at their end but

addressed their inability to make payment as commissioning of the project

was inordinately delayed as per schedule for the reasons of lack of power

and water supply. Such payment was not made even after a lapse of

almost two years of issuance of reminder by HDA. The amount was

tendered only on 18

th

January, 2008. It is pertinent to reiterate that there

35

is no alteration/change in the original terms and conditions in the

meantime subjecting payment of remaining balance amount of the land

premium to providing power and water supply. Thus, it is found from the

original offer letter, revised offer letter and from subsequent events as

above, that neither of those clause contains any terms that the payment of

land premium was subject to providing infrastructure to the petitioner-

company namely power and water supply by HDA. In the aforesaid

conspectus, it is seen that no plausible reason is coming up from the side

of the petitioner-company in not tendering the remaining amount of land

premium within the validity period of the offer letter or within the period

stipulated in the letter of reminder. Despite the balance land premium

remaining unpaid for long, the petitioner-company was given opportunity

to pay the balance land premium within a stipulated period of seven days

but it has failed to make payment in response to the said letter. Hence,

there cannot be any manner of doubt that despite getting opportunity to

make payment, the petitioner-company did not do so without any rhyme or

reason. Once the petitioner-company acknowledged and accepted the offer

it was incumbent upon it to honour such offer and proceed in accordance

with the terms and conditions of the offer letter which clearly stipulated

that the offer letter would be valid for two months. Such payment therefore

has to be made with the period of validity of the offer letter. Although upon

non-compliance of the terms of the offer letter by not paying the balance

amount within the schedule time period the offer letter deemed to have

stood invalidated, yet a last opportunity was given to the petitioner-

company to make payment vide letter dated 27

th

January, 2006, or else

36

the offer letter would be treated as cancelled, which has also not been

complied with. In reply, the petitioner-company vide its order dated 2

nd

February, 2006 disclosed its inability to make payment of balance land

premium and committed to pay the same from April, 2006. However, no

endeavour was taken to make good such commitment. There cannot be

any dispute that by its own letter dated 6

th

June 2008 at page 59 of the

affidavit-in-opposition of respondent no.3 dated 5

th

September, 2008, the

petitioner-company has admitted that the power supply was made

available from August, 2006. There is iota of materials showing that as a

bonafide action the petitioner-company tendered the balance amount soon

thereafter. It appears that on the plea of non-availability of power and

water supply the petitioner-company did not make payment which is

unacceptable, since the payment under the offer letter was not conditioned

upon availability of power and water supply. Furthermore, while accepting

the offer made in the said letter the petitioner-company had the prior

knowledge of the condition of the land and the infrastructure available

thereat and as such plea of non-availability of power and water supply

cannot be a ground to delay full and final payment under the offer letter.

This court finds substance in submission of Mr. Basu, learned advocate for

the said Authority relying on Joshi Technologies International Inc.(supra)

that commercial difficulty, inconvenience or hardship in performance of

the conditions in a proposal can provide no justification in not complying

with the same specially when the petitioner-company claims subsistence of

the original proposal dated 11

th September 2001.

37

11.3. Moreover, from paragraph no.23 of affidavit-in-opposition, it appears

that the rate of land premium of Rs.15 lacs per acre has been accepted by

other companies namely (i) M/s. Modern India Con-cast Ltd., (ii) M/s. Rohit

Ferro Tech Ltd., (iii) M/s. Mortex Alloys Pvt. Ltd. and (iv) M/s. Dhunsheri

Polycarbonate Ltd.

11.4. In Jamshed Hormusji Wadia (supra) , the Hon’ble Supreme Court

observed as follows.

“18. In our opinion, in the field of contracts the State and its

instrumentalities ought to so design their activities as would ensure fair

competition and non-discrimination. They can augment their resources but

the object should be to serve the public cause and to do public good by

resorting to fair and reasonable methods. The State and its

instrumentalities, as the landlords, have the liberty of revising the rates of

rent so as to compensate themselves against loss caused by inflationary

tendencies. They can — and rather must — also save themselves from

negative balances caused by the cost of maintenance, payment of taxes

and costs of administration. The State, as t he landlord, need not

necessarily be a benevolent and good charitable Samaritan. The felt need

for expanding or stimulating its own activities or other activities in the

public interest having once arisen, the State need not hold its hands from

seeking eviction of its lessees. However, the State cannot be seen to be

indulging in rack-renting, profiteering and indulging in whimsical or

unreasonable evictions or bargains.”

11.5. Bearing in mind the aforesaid observation, since it is found that

other companies have also accepted the rate of land premium of Rs.15 lacs

per acre, therefore, the enhanced rate at Rs.15 lacs per acre as made by

the authority towards counter offer to the petitioner-company cannot said

to be lacking in rationality or is discriminatory.

11.6. In the aforesaid backdrop, letter under Memo no. 2652/HDA/VII-E-

142/2001 dated 5

th

February, 2008 (Annexure P-13) asking the petitioner-

company to deposit land premium at an enhanced rate of Rs. 15 lacs per

acre amounting to Rs. 4,28,75,000/- within a specified period and letter

under Memo No. 1371/HDA/VII -E-142/2001 dated 4

th

July, 2008

(Annexure P14) for eviction of the petitioner-company from the subject

38

land, both issued by the Chief Executive Officer, Haldia Development

Authority, respondent no.3 is not arbitrary since several opportunity was

given to the petitioner-company to make payment of the balance amount

at the earlier rate of land premium offered which has not been complied

and availed of by the petitioner-company without any credible and

acceptable reason. Further the petitioner-company has also not lived upto

its commitment to make payment of balance land premium.

12. It has been strenuously argued on behalf of the petitioner-company

relying on Jamshedji Hormusji Wadia (supra) that the State and its

instrumentalities have to be just, fair and reasonable in all their activities

including those in the field of contracts. The State and its authorities

playing the role of the landlord or tenant cannot be heard or seem causing

displeasure or discomfort of Article 14 of the Constitution. However, in the

light of above discussion as it has already been found that there is no

arbitrariness in the action of Chief Executive Officer, Haldia Development

Authority, respondent no.3 in issuing the letters under challenge, such

observation in the above decision cannot come in the aid of the petitioner-

company.

13. It has been categorically contended in the writ petition that the

petitioner-company virtually got physical possession of the 50 acres of

vacant land from the date of acceptance of the offer of its allotment. Mr.

Basu, learned advocate for said Authority relying on K.D Sharma (supra)

argued that petitioner’s claim of possession having been handed over by

the said authority without full and final payment in the absence of any

possession certificate is incorrect and such claim is sincerely distorted fact

39

and therefore, any relief granted would be based on distorted facts. Be that

as it may, from the letter under challenge dated 4

th

July,2008 it is found

that the said Authority requested the petitioner-company to deposit land

premium amounting to Rs.4,28,75,000/- within fifteen days from the date

of issuance of the letter otherwise HDA will evict the petitioner-company

from HDA’s land. Such contention in the impugned letter clearly indicates

that the Authority accepts the fact that the petitioner-company is in

possession of the subject land though admittedly no possession letter has

been issued in the favour of the petitioner-company. Hence, the argument

that statement made in the writ petition that the petitioner-company is in

possession of the subject land is distorted fact does not stand to reason

and at the same time the ratio of the aforesaid decision does not apply to

the facts of the case. It is, however, pertinent to note from the above fact

that the petitioner-company continued in possession of the subject land

from the date of acceptance of the offer letter without making payment of

the balance land premium which in the opinion of this court is illegal. It is

settled proposition that a person who seeks equity must do equity.

14. It has been vociferously argued on behalf of the said Authority that

the petitioner-company deliberately suppressed their own letter dated 6

th

June, 2008 wherefrom it would reveal that requirement of electricity and

water had been met since August 2006 and thus has not approached this

Hon’ble Court with unclean hands and as such the writ petition is liable to

be dismissed on the ground of suppression of fact. In this context it is

relevant to note that the petitioner-company in paragraph 14(a) has

disclosed the existence of the aforesaid letter and craved leave to produce

40

the same at the time of hearing and as such there is no such material

suppression and therefore the argument advanced in t his regard by the

learned advocate for the said Authority falls short of merit.

15. It has been vociferously contended on behalf of HDA that with the

expiry of the stipulated period the offer stood extinguished but such

contention cannot be sustained for the simple reason that HDA accepted

rent for the subject land in respect of the offer letter and has also asked for

payment of balance amount by its letter of reminder dated 27

th

January,

2006 within certain period or else the offer should be treated as cancelled

which presupposes existence of the offer on the date of issuance of such

letter of reminder.

16. In view of the above discussion the impugned letter dated 5

th

February, 2008 (Annexure P-13) and 4

th

July, 2008 (Annexure P14) of

Chief Executive Officer, Haldia Development Authority, respondent no.3

are held to be not arbitrary and thus does not call for interference.

17. Admittedly, in compliance to order dated 18

th

July, 2008 of Co-

ordinate Bench of this court, petitioner-company deposited the balance

amount of Rs.96,25,000/- as per offer letter dated 11

th

September, 2001.

18. Accordingly, petitioner-company is directed to deposit the remaining

amount of t he enhanced land premium of Rs. 3,32,50,000/-

(Rs.4,28,75,000/- less Rs.96,25,000/-) in favour of Haldia Development

Authority within a period of six weeks from date of this order. Failing

compliance as above, the Haldia Development Authority shall be at liberty

to take steps for eviction of the petitioner-company from the subject land

to the extent of 35 acres in accordance with law. In the event of eviction of

41

the petitioner-company from the land-in-question, the said Authority shall

refund the amount of land premium received by it from the petitioner -

company over and above the value of 15 acres of land of Rs.82,50,000/-,

together with interest @ 7% per annum from the respective dates of

payment of the amount till the date of actual refund.

19. With the aforesaid direction, the writ petition being WPA 15313 of

2008 stands disposed of.

20. Interim order, if any, stand vacated.

21. All connected applications, if any, stand disposed of.

22. Urgent photostat certified copy of the order, if applied for, be given to

the parties upon compliance of all necessary legal formalities.

(Bivas Pattanayak, J.)