JAYANT VEGOILS AND CHEMICALS P LIMITED Vs. CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LIMITED

JUDGEMENT

(1.) BY the present petition under Article 226 of the Constitution of India, the Petitioners are challenging the validity and legality of the action on the part of the respondents in demanding and recovering a sum of rs. 9,42,000/- from the Petitioners. The petitioners have further prayed for a suitable order directing the Respondents to withdraw and/or cancel their letters dated 19/01/1988 and 1 1/05/1988 impugned in the petition and to refund the amount of Rs. 9,42,000/- with interest. Briefly stated the facts giving rise to the present petition are as follows:

(2.) BY an application dated 17th January, 1981, the Petitioner No. 1 requested the respondents to grant a lease to them of a plot of land in Sector 17 in Vashi, New Bombay, admeasuring about 1,850 sq. mtrs. The Respondents is a Government Company, incorporated under the provisions of the Companies act and have been designated as the New Town development Authority of the new town of new bombay under the provisions of Maharashtra regional and Town Planning Act, 1966. Pursuant to the Petitioners said application, an agreement to lease was executed between the parties on 2 2/10/1981. Under the said agreement, the petitioners were required to commence the construction work within six months and to complete the same within a period of two years from the date of the agreement. Clause 6 thereof provided for extension of time inter alia on the condition that the same would be done as per provisions of New Bombay Disposal of Lands regulations, 1975 (the said Regulations for short ). The Petitioners were put in possession of the said plot on 22/10/1981. It is the petitioners case that they commenced construction work within the stipulated period, however, for various reasons entirely beyond their control and difficulties faced by them, the same could not be completed within two years i. e. by 2 1/10/1983 as stipulated under the said agreement. It is the Petitioners case that the Petitioners and other such builders were granted extensions of 16 months i. e. till 2 1/02/1985 but no premium was charged as according to the petitioners, the Managing Director of the respondents realised that non-completion of the construction work was due to the failure of the respondents to supply proper infrastructure. Even during the extended time, the construction could not be completed and therefore, the Petitioners accordingly applied for first extension on 2 3/08/1985. By letter dated 14/10/1985 addressed by the Respondents, the Petitioners were asked to pay 5% of the premium amounting to Rs. 55,500/- in terms of clause 6 of the agreement to lease. The said amount was paid by the Petitioners and time for completion was extended from 2 2/10/1985 to 21/02/1986. Again on 1 1/06/1986, the Petitioners sought further extension as the construction could not be completed by 2 1/02/1986. The second extension was thus granted by the Respondents for a period upto 20/02/1987 subject to the petitioners paying an additional premium of Rs. 1,11,000/- i. e. 10% of the lease premium. This amount was also paid by the Petitioners. It is the petitioners case in the petition that by the end of January, 1987, the construction work was completed and that all structural work was done in accordance with the licence and plans approved by the Respondents, however, the work relating to lift and fire fighting equipment was required to be done. The Petitioners applied for part occupation certificate for ground floor. This application was dated 4/02/1987 along with which necessary certificate dated 30th january, 1987 of Petitioners Architect was also sent to the Respondents. The Petitioners completed the remaining work and obtained their Architect s completion certificate dated 10/12/1987. With reference to the said certificate, the respondents by its letter dated 19/01/1988 informed the Petitioners that the work had not been completed within the extended time i. e. 20th february, 1987 and asked the Petitioner to apply for extension. The Respondents also informed the petitioners that their case would be processed further only after the grant of extension of time limit. The Petitioners by their Architect s letter dated 8/02/1988 informed the Additional town Planning Officer of the Respondents that in their application dated 4/02/1987 they have specifically mentioned that the infrastructure and the entire work of the upper floors of the building was also completed except lift and installation of fire fighting equipment and that there was no question of applying for extension of time limit as insisted by the respondents.