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 19th January 1988 and 11th May, 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 22nd October 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 extention 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 22nd October, 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 21st October, 1983 as stipulated under the said agreement. It is the Petitioners case that the Petitioners and other such builders were granted extention of 16 months i. e. till 21st February, 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 extention on 23rd August 1985. By letter dated 14th October, 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 22nd October, 1985 to 21st February, 1986. Again on 11th June 1986, the Petitioners sought further extention as the construction could not be completed by 21st February, 1986. The second extention was thus granted by the Respondents for a period upto 20th February, 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 4th February 1987 alongwith 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 Architects completion certificate dated 10th December 1987. With reference to the said certificate, the Respondents by its letter dated 19th January 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 extention. The Respondents also informed the Petitioners that their case would be processed further only after the grant of extention of time limit. The Petitioners by their Architects letter dated 8th February 1988 informed the Additional Town Planning Officer of the Respondents that in their application dated 4th February 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 extention of time limit as insisted by the Respondents. On 8th March 1988, the Petitioners were informed by the Respondents that the Petitioners application for waiver could not be considered and they were directed to comply with the Respondents said letter dated 19th January 1988 (impugned letter) and that they were also informed that the Petitioners case for occupancy would be processed only after the compliance of the said letter. The Petitioners were further informed by letter dated 11th May 1988 (impugned letter) that while granting extention of 4th and 5th years, the Petitioners had paid additional lease premium at the rate of 15% only; that it was necessary to recover it at the rate of 60% as per revised rules and that therefore, balance amount of Rs. 4,97,500\- was required to be paid by the Petitioners in the first instance; that since the date of full completion was beyond the extended period, further extention of the 6th year was required to be granted for which the Petitioners were required to pay additional premium at the rate of 40% i. e. Rs. 4,44,000/ -. Thus, the Petitioners were called upon to pay the aggregate amount of Rs. 9,43,500/- and the Petitioners were informed that their case for occupancy would be processed only after grant of extention. This was followed by a detailed letter by the Petitioners dated 23rd May 1988 disputing the said demand. Further correspondence took place between the parties and it appears that the total amount of Rs. 9,43,000/ -. was paid under protest. By the present petition as set out at the outset in effect the Petitioners are challenging the recovery of the amount of Rs. 9,43,000/ -.

(3.) IN order to appreciate the contentions raised by the parties before us, it would be advantageous to reproduce certain relevant clauses of the agreement for lease dated 22nd October 1981:-