JAYKRISHNA INDUSTRIES LTD. THROUGH DIRECTORversusSTATE OF MAHARASHTRA AND OTHERS

                            (2017] ll S.C.R. 104



A                     JAYKRISHNA INDUSTRIES LTD.
                          THROUGH DIRECTOR
                                      v.
               STATE OF MAHARASHTRA AND OTHERS

B                       (Civil Appeal No. 496 of 2007)
                           NOVEMBER 13, 2017
              [RANJAN GOGOI AND NAVIN SINHA, JJ.J
          Au<'lion:
c          Public auction - Pmvisional acceptance of bid of appellant -
    25% of tender amount deposired by appellant - In the meantime
    respondent approached High Court for permission for submission
    of higher bid than the appella111, without making the appellant party
    therein - High Court granted permission - Bid of respondem
D   provisionally accepted - Provisional acceptance of bid of the
    appellant, was cancelled on 07.05.2005 - Writ petitions by appellant
    challenging acceptance of bid of respondent and rejection of his
    hid - High Court dismissed the petitions - On appeal, held: Claim
    of respondent for settlement of a Govemment property by way of
    private largesse, without open advertisement is unfounded in law -
E   Belated challenge to cancellation of bid by the appellant was right(v
    rejected in view of the i111ervening developments (i.e. change in
    pennissible usage of the landji·om commercial to residential)-Since
    the ve1y substatum of the aucrion advertisement has changed, a
    fresh tender is mandatory - Direction to refund the deposited money
    to responde111 without any i11terest and to appellant with 8% interest.
F
          Evidence Act, 1872:
         s. !14(e) - presumption under - In respect of Government
    communication - Held: there shall be a presumption in law that a
    Government communication was properly made and reached the
G   addressee.
          Dismissing the appeals, the Court
         HELD: 1. The claim of the Respondent for settlement of a
    government property by way of a private laq~cs~c, withou1 open
    advertisement, is completely unfounded in the law. Apparently,
H
                                   104
 JAYKRISHNA INDUSTRIES LTD. THR. DIRECTOR v. STATE                     105
            OF MAHARASHTRA AND ORS.

  the negotiations were done by MHADA under political influence        A
  as evident from the letter of the Respondent dated 29.11.2004
  read with the letter dated 30.04.2005 of one Member of
  Parliament. The Respondent had not submitted any bid in
. response to the advertisement. The order of the High Court
  dated 23.12.2004 was passed in absence of the Court being            B
  apprised of the provisional acceptance of the Appellant's bid. The
 p_lea that the Respondent was never made aware of the order of
  cancellation dated 22.02.2000 merits no consideration as it was
  also revealed in the counter affidavit of the State of Maharashtra
  dated 11.07.2005 in Writ Petition No. 2112 of 2005. The
  cancellation order was addressed to MHADA and copy marked            C
  to the Respondent. There shall be a presumption in law that il
  government communication was properly made and reached the
  addressee, under Section ll4 (e) of the. Evidence Act. It is not
  the case of the Respondent that the order never came to be Issued
  and remained in the file. The Respondent despite awareness           D
  never challenged the cancellation and which sets at naught its
  entire claim. Any offer made to the Respondent in teeth of, and
  after the cancellation was therefore redundant. [Para 9)[109-B-
E]
      2. The bid of the Appellant was provisionally accepted. No
final allotment was made in its favour under the advertisement         E
dated 17.11.2004. MHADA was inhibited from proceeding further
in view of the Court order dated 23.12.2004 in favour of the
Respondent. MHADA in its affidavit dated 24.06.2005, in Writ
Petition No. 2112 of 2005 preferred by the Appella_nt, had
disclosed the cancellation of the provisional acceptance by order      F
dated 07.05.2005. There shall likewise be a presumption with
regard to the issuance and delivery of the same to the Appellant
and it is not its case that no such order was ever made or issued.
The belated challenge to the cancellation in Writ Petition No.
867 of 2010 was therefore rightly rejected by the High Court on
account of the intervening developments with regard to the             G
change in permissible usage of the land from commercial to
residential. [Para 10][109-F-H; HO-A]
      3. The change in permissible land usage goes to the mot of
 the matter. If the very substratum of the advertisement bas
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106             SUPREME COURT REPORTS                   [2017] 11 S.C.R.



A     changed, a ftesh tender is mandatory. The passage of thirteen
      long years since the advertisement is also an important
      consideration. The Notification dated 03.07.2017 issued under
      DCR Regulation 33(5) inter alia altering the FSI is at the final
      stage awaitiD1g publication. The bid price today for that reason
      will also cs~alate considerably. The State Government and
B
      MHADA have denied any fresh negotiated settlement with the
      Appellant. The interim order of this Court dated 04.09.2014 was
      not a ct1rte hilmclw for a mandatory settlement with the Appellant.
      The High Court has noticed that the value of the property now
      would be approximately 75 crores. In the land starved city of
C     Mumbai, the settlement of any Government land, for a housing
      project, bus to be by public auction only, so us to fetch the best
      price in the larger public interest. [Para 11)(110-B-D]
            4. The Respondent has only itself to blame for its woes,
      based on a conduct that cannot be countenanced in law. It is
D     therefore not entitled to any interest on the deposit made by it
      which shall l>e refunded by MHADA within four weeks. The
      A11pellant is found to have been wronged, but must bear part of
      the blame for !aches on its part also. It is therefore held entitled
      to interest @ 8% on the deposit made by it including the earnest
      money, only till 24.06.2005. (Para 121 [110-E]
E
              CIVIL APPELLATE JURISDICTION: Civil Appeal No. 496 of
      2007.
            From the Judgment and Order dated 17.10.2005 of the High Court
      ofJudicatw·e at Bombay (Original Side) in Writ Petition No. 2112 of
 F    2005 with Writ Petition No. 3466 of2004
                                     WITH
              C.A.Nos.498, 18489and 18492of2017.
             Shekhar Naphade, Sanjay Hegdc, M. L. Varma, Sr. Advs.,
 G    Kamatdeep Dayal, Mahesh Agarwal, Ms. Parul Shukla, Moojaal Bhatt,
      Himanshu Satija. E. C. Agrawala, Viraj Kadam. Rohit Shctty,
      D. M. Nargolkar. Ms. Bina Gupta, Chirag M. Shroff, Ms. Neha Sangwan,
      V. N. Raghupathy, Mahaling Pandargc, Nishant Katncshwarkar, Advs.
      for the appearing parties.

H
 JAYKRISHNA INDUSTRIES LTD .. THR. DIRECTOR v. STATE                           107
            OF MAHARASHTRA AND ORS.

      The Judgment of the Court was delivered by                               A
       NAVIN SINHA, J. l. Leave granted in both Special Leave
Petitions.
       2. The present batch of appeals, between the same parties, arise
from a controversy relating to auction settlement by the Mumbai Housing
and Arca Development Board (hereinafter referred to as "the MHADA"),           B
of a plot ofland measuring 10,000 sq. mtrs, located at Powai, in the town
of Mumbai. The auction notice published on I 7.11.2004, remains
inconclusive, mired in litigation. The subsequent developments being
relevant arc also required to be noticed. The contesting parties, Mi
s.Popcorn Properties Private Limited and Mis. Jaykrishna Industries
Ltd., shall hereinafter be referred to as the Appellant and Respondent
                                                                               c
for convenience.
       3. Sri Shckhar Naphadc, learned Senior Counsel for the Appellant
submitted that it being the highest bidder at Rs.22,22,22,300/-, provisional
acceptance of the bid was communicated to it on 17.12.2004. As required,
25% of the tender amount was deposited on 03.01.2005, awaiting                 D
communication for deposit of the balance 75% amount. On 03.05.2005,
the Appellant objected to MHADAillegally negotiating settlement of the
subject lands with the Respondent. Writ Petition No. 2112 of2005 was
instituted assailing the action of the official Respondents in provisionally
accepting the bid of the Respondent for Rs.22,23,22,300/-. The order           E
dated 17.12.2004 was subsequently wrongly cancelled on 07.05.2005,
and which was also assailed by the Appellant in Writ Petition No. 867 of
2010.
      4. The Respondent had earlier preferred Writ Petition No. 3466
of2004 and obtained an orderon 23.12.2004 for submission of a higher
                                                                        F
bid. The Appellant was not a party to the same. The High Court was not
apprised that the Appellant's bid already stood provisionally accepted.
Upon being apprised of the correct facts, the order dated 23.12.2004
was recalled which automatically results in revival of the order of
acceptance of the appellant's provisional bid. The High Court wrongly
declined to interfere with the order dated 07.05.2005 ordering a fresh G
tender process for settlement.
       5. Shri Naphade, in the aforesaid facts further submitted that the
Appellant also had a right in equity for settlement in its favour, especially ·
in view of the interim orderofthis Court dated 04.09.2014 permitting it
to make a fresh proposal to the MHADA, arid wlfich has been found H
108             SUPREME COURT REPORTS                           [2017] l l S.C.R.


A     acceptable by it. MHADAhad acted inequitably, on political influences,
      to cancel its bid at the behest of the Respondent, who was not even a
      bidder in rcspol[lse to the tender notice. The Appellant has had to suffer
      forno fault ofit, despite being the highest bidder. An alternative submission
      was made that if fresh tenders were to be invited, the right of the first
      refusal must be' given to it for matching the highest offer that may be
B
      made. The second alternative submissmn was that 25 percent of the plot
      be settled with it. The present case, on its peculiar facts, was a fit case
      where the norrnal rule of settlement by tender could be deviated from
      and settlement could be made by private negotiation.
             6. Mr. Sanjay Hegde, learned Senior Counsel for the Respondent
c     submitted that even prior to the advertisement dated 17.11.2004. the
      Respondent had a pre-existing right to settlement as it was already in
      negotiation with MHADA, culminating in orders dated 05.07.1999 and
      05.10.1999 in its favour. This was recognised in Writ Petition No. 3466
      of2004 permitting it to offer a higher bid. On 15.02.2005, the Respondent
D     offered to increase its bid by Rs. I 0,00.000/- above that of the Appellant
      and payment was made on 02.05.2005. The challenge by the Appellant
      to the cancellation dated 07 .05.2005 was highly belated. The Appellant
      had no locus in the matter after the cancellation order. The cancellation
      order having been declined interference, the question of any private
      negotiation docs not arise. A like claim in equity was also raised for an
E     oppo1tunity to pay the market price and match the price that may be
      offered by the Appellant.
          7. Learned Counsel for the State of Maharashtra submitted that
   the order dated 05.07.1999 on which the Respondent's claim is founded
   has itself been annulled on 22.02.2000, and which has not been assailed.
F Sri M.L. Verma, learned Senior Counsel appearing on behalf ofMHADA,
  ·submitted that the advc1tiscment dated 17 .11.2004 was for construction
   of a hotel according to the theri permissible commercial usage of the
   plot. The subsequent change in permissible usage to residential purpose
   for construction of a housing complex renders the entire controversy
   infructuous. A new advertisement for auction at the best price available
G
   will have to be made. Considerable time has also passed since the
   advertisement. The OCR Regulation 33(5) under the Development
   Control Regulations for Greater Bombay, 1991 (hereinafter referred to
   as "the Regulations") with regard to increase in FSl has not yet been
   finalized and published. It was specifically denied that any decision had
H been taken to make settlement in favour :if the Appellant.
 JAYKJUSHNA INDUSTRIES LTD. THR. DIRECTOR v. STATE                           109
    OF MAHARASHTRA AND ORS. [NAVIN SINHA. J.]

     8. We have considered the submissions.on behalf of the parties,         A
perused the records, including the impugned orders and the
communications exchanged between the parties.
       9. The claim of the Respondent for settlement of a government
property bi way of a private largesse, without open advertisement, is
completely unfounded in the law. Its letter dated 30.06.1999 requesting B
for a sympathetic consideration for settlement with it, as otherwise the
property was likely to be occupied by encroachers, is but a travesty of
the law. Apparently, the negotiations were done by MHADA under
political influence as evident from the letter of the Respondent dated
29.11.2004 read with the letter dated 30.04.2005 of one Mr. Mohan
Rawle, Member of Parliament. The Respondent had not submitted any c
bid in response to the.ad.vertisement. The order of the High Court dated
23.12.2004 was passed in absence of the Court being apprised of the
provisional acceptance of the Appellant's bid. The plea that the
Respondent was never made aware of the order of cancellation dated
22.02.2000 merits no consideration as it was also revealed in the counter D
affidavit of the State of Maharashtra dated l 1.07.2005 in Writ Petition
No. 2112 of 2005. The cancellation order was addressed to MHADA
and copy marked to the Respondent. There shall be a presumption in
law that a government communication was properly made and reached
the addressee, under Section 114 (c) of the Indian Evidence Act. It is
no( the case of the Respondent that the order never came to be issued
                                                                          E
and remained in the file. The Respondent despite awareness never
challenged the cancellation and which sets at naught its entire claim.
 Any offer made to the Respondent in teeth of, and after the cancellation
was therefore redundant.
         IO. The bid of the Appellant was provisionally accepted. No final   F
allotment was made in its favour under the advertisement dated
17. I I .2004. MHADA was inhibited from proceeding further in view of
the Court order dated 23.12.2004 in favour of the Respondent. MHADA
in its affidavit dated 24.06.2005, in Writ Petition No. 2112 of 2005
preferred by the Appellant, had disclosed the cancellation of the            G
provisional acceptance by order dated 07.05.2005. There shall likewise
be a presumption with regard to the issuance and delivery of the same lo
the Appellant and it is not its case that no such order was ever made or
issued. The belated challenge to the cancellation in Writ Petition No.
867 of2010 was therefore rightly rejected by the High Com1 on account
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110             SUPREME COURT REPORTS                           [2017] l l S.C.R.



A     of the intervening developments with regard to the change in permissible
      usage of the land from commercial to residential.
             11. The change in permissible land usage by Resolution No.6684
      dated 20.10.2014 is a fundamental issue which goes to the root of the
      matter. If the very substratum of the advertisement has changed, a fresh
B     tender is mandatory. The passage of thirteen long years since the
      advertisement is also an important consideration. The Notification dated
      03.07.2017 issued under OCR Regulation 33(5) inter alia altering the
      FSI is at the final slage awaiting publication. The bid price today forthat
      reason will also escalate considerably. The State Government and
      MHADAhavc denied any fresh negotiated settlement with the Appellant.
c     The interim order of this Court dated 04.09.2014 was not a carte blanche
      for a mandatory settlement with the Appellant. The High Court has noticed
      that the value of the property today would be approximately 75 crores.
      In the land starved city of Mumbai, the settlement of any government
      land, for a housing project, has to be by public auction only, so as to fetch
D     the best price in the larger public interest.
             12. The Respondent has only itself to blame for its woes, based
      on a conduct that cannot be countenanced in law. It is therefore not
      entitled to any interest on the deposit made by it which shall be refunded
      by MHADA within four weeks. The Appellant is found to have been
E     wronged, hut must bear part of the blame for !aches on its part also ..It is
      therefore held entitled to intercst@8% on the deposit made by it including
      the earnest money, only till 24.06.2005; to be paid within six weeks.
             13. In the entirety of the matter. all the appeals lack merit and are
      dismiss~-d.



      Kalpuna K. Tripathy                                          Appeals dismissed.