M/S. ANGEL BABY PRODUCTS PVT. LTD.versusNEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY

                     [2010] 12 S.C.R. 1073


         M/S. ANGEL BABY PRODUCTS PVT. LTD.                      A
                              v.
  NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY
                          & ORS.
    (Special Leave Petition (Civil) No. 10940 of 2008)
                                                                 B
                     OCTOBER 27, 2010

        [ALTAMAS KABIR AND A.K. PATNAIK, JJ.]

      Lease deed - Execution of - Failure of allottee to
execute lease deed for commercial plot within the stipulated     C
period on account of mis-description. of the plot and change
                 '
in the name of allottee - Imposition of penalty -
Representation for waiver - Extension of time to execute
lease deed - Failure to execute lease deed within the
extended time - Imposition of penalty and interest - Writ        D
petition - Dismissed by High Court - On appeal, held: No
inclination on the part of allottee or petitioner company to
complete formalities for execution of lease deed pursuant to
the change in the name of al/ottee - Thus, on account of
subsequent conduct of petitioner company and allottee, order     E
of High Court and decision of NO/DA relating to imposition
of penalty and interest not interfered with - Direction issued
to calculate penalty and interest as payable.

       'HL' was allotted a commercial plot. He failed to
  execute lease deed for the commercial plot within the          F
  stipulated period of 120 days on account of the mis-
  description of the plot, existence of the municipal drain
  on the portion of the plot, and in view of the change in
. the name of the allottee. The respondent-New Okhla
  Industrial Development Authority imposed penalty for           G·
  failure to get the lease deed executed. On representation
  by 'HL' and another, for waiver of penalty, the Chief
  Executive Officer, NOIDA waived the penalty and granted
  them further two months' time to complete the execution
                            1073                                 H
   1074    SUPREME COURT REPORTS             [2010] 12 S.C.R.

A of the lease deed. Before the expiry of two months, the
  NOIDA authorities wrote a letter to the writ petitioners that
  penalty would be charged with effect from 22nd
  November, 2001. Again a representation for waiver of
  penalty was made and the Board of NOIDA rejected the
B same, calling upon the writ petitions to pay the penalty.
  The writ petitioners-'HL' and another, filed a writ petition
  for quashing the notices issued by the respondent. The
  High Court dismissed the writ petition and vacated the
  interim order. Therefore, the petitioner filed the instant
c Special Leave Petition.
        Dismissing the Special Leave Petition, the Court

       HELD: 1.1 The submissions questioning the order
  passed by the Officer on Special Duty dated 11.04.02, and
D the various notices subsequently issued on the basis
  thereof, demanding payment of penalty despite the order
  of the Chief Executive Officer waiving imposition of such
  penalty for the delay in execution of the lease deed,
  cannot be accepted. [Para 12] [1081-F]
E
       1.2 The materials on record indicate that there had
  been correspondence exchanged between the parties
  with regard to the land allotted and the area thereof on
  account of the existence of the municipal drain either on
F the plot or in its vicinity. 'HL' also made a request for the
  plot allotted in his name to be transferred in the name of
  the petitioner company in which he and his son were
  Directors. Since the same was likely to take some time
  for completion of the formalities, a specific prayer was
  made to waive the penalty due to delay in the execution
G of the lease deed. The CEO, NOIDA, extended the period
  for completion of the formalities relating to the
  constitutional change by a period of two months without
  penalty from 24.03.02. Before the said period could
  expire, the Officer on Special Duty, on a
H misunderstanding of the order passed by the CEO,
    ANGEL BABY PRODUCTS PVT. LTD. v. NEW               1075
          OKHLA INDUST. DEV. AUTH.
NOIDA, indicated by his order dated 11.04.02, that since       A
the Chief Executive Officer had given two months' time
without penalty only for change of constitution, interest
on the outstanding instalments, penal interest .and
penalty, were liable to be recovered from the writ
petitioners. The Officer on Special Duty (G) passed an         B
order on 26.04.02, directing that steps be taken in terms
of his earlier order dated 11.04.02, and indicating that two
months' time given to the writ petitioners was for
completion of formalities for change of the name of the
allottee. Up to the said stage, the case of the petitioner     C
company for waiver of penalty can be accepted [Para 13]
[1081-G-H; 1082-A-D]

     1.3 The subsequent correspondence which followed
between the parties and the failure of the petitioner
company and 'HL' to complete the execution of the lease        D
deed even within the extended time of two months,
indicate that neither 'HL' nor the petitioner company had
any inclination to complete the formalities for execution
of the lease deed pursuant to the change in the name of
the allottee from 'HL' to the petitioner company. [Para 14]    E
[1082-E-F]

      1.4 From the letter dated 1.05.02, written by the
Deputy Manager (C), NOIDA, it is apparent that the
petitioner company and 'HL' were given a great degree
                                                               F
of latitude to complete the transaction. In fact, meetings
of the Committee had been convened on 23.10.02 and
26.11.02, in which 'HL' appeared and made submissions
for waiver of the penalty but on the basis of the record,
the Committee rejected the submissions of 'HL' and he
was subsequently informed of the decision of the               G
Committee which was approved at a meeting of the
Authority convened on 15.02.03, under the Chairmanship
of the Additional Chief Executive Officer, NOIDA. Even if
initially a case might have been made out on behalf of the
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    1076    SUPREME COURT REPORTS                [2010] 12 S.C.R.


A petitioner company that the execution of the lease deed
  could not be completed on account of the mis-
  description of the plot and in view of the prayer for
  change in the name of the allottee, on account of the
  subsequent conduct of the petitioner company and 'HL',
8 the order of the High Court or the decision of the NOIDA
  relating to imposition of penalty and interest is not
  interfered with. However, the interpretation given by the
  Officer on Special Duty to the order passed by the CEO
  on 24.03.02 is also not accepted and, it is directed that in
C calculating the penalty and interest as payable under the
  agreement entered into between the parties, the said
  period of two months from the date of the order dated
  24.03.02, would be excluded. [Para 15) [1082-G-H; 1083-
  A-E]

D       CIVIL APPELLATE JURISDICTION : SLP (Civil) No.
    10940 of 2008.

      From the Judgment & Order dated 9.4.2008 of the High
  Court of Judicature at Allahabad in Civil Misc. Writ Petition No.
E 16819 of 2003.

        Manish K. Bishnoi for the Petitioner.

        Jayant Bhushan, Manish Bishnoi, Amit Bhandari, Sanjeev
    Panigrahi, Ravindra Kumar for the Respondents.
F
        The Judgment of the Court was delivered by

       ALTAMAS KABIR, J. 1. In this Special Leave Petition, the
  Petitioner has challenged the decision of the Allahabad High
  Court dismissing Writ Petition No.16819 of 2003, filed by one
G Hira Lal Gupta and another praying for quashing of the notices
  dated 1.5.2002, 25.7.2002, 6.9.2002 and 22.3.2003 sent by
  the authorities of The New Okhla Industrial Development
  Authority, hereinafter referred to as 'NOIDA', imposing penalty
  against the writ petitioners for failing to get the lease deed for
H commercial plot no.1/1-A, Sector 27, NOIDA, executed within
ANGEL BABY PRODUCTS PVT. LTD. v. NEW OKHLA1077
    INDUST. DEV. AUTH. [ALTAMAS KABIR, J.]

the stipulated period of 120 days from the date of allotment of      A
the plot. The said plot measuring 2970 sq. meters was initially
allotted to the Writ Petitioner No.1, Hira Lal Gupta, at the rate
of Rs.15,552/- per sq. meter. Later on, a revised allotment order
was issued to Shri Gupta reducing the area of the plot from
2970 sq. meters to 2590 sq. meters and the consideration for         B
allotment of the plot was proportionately reduced. Subsequently,
disputes arose in regard to an irrigation drain which existed on
a portion of the said plot, although, the existence thereof was
not indicated in the brochure published by NOIDA. According
to the Writ Petitioners, since the said problem was not attended     c
to, the lease deed could not be submitted for execution within
the prescribed period of 120 days which attracted imposition
of penalty.

     2. On 24th March, 2002, the Petitioners made a
representation to the Chief Executive Officer, NOIDA, for waiver     D
of penalty ori the ground that since the exact area and location
of the plot was different from that specified in the brochure, the
delay in execution of the lease deed could not be attributed to
the Writ Petitioners and, accordingly, penalty could not be
imposed against them. It appears that the Chief Executive            E
Officer, NOIDA, waived the penalty imposed on the Writ
Petitioners and granted them further two months' time to
complete the execution of the lease deed. However, before the
expiry of the said period of two months, the NOIDA authorities
had written to the Wpt Petitioners on 1st May, 2002, indicating      F
that penalty would be charged with effect from 22nd November,
2001. The Writ Petitioners responded to the said letter by
submitting a representation dated 15th May, 2002, praying for
waiving the penalty on account of the drain passing through plot
and also for providing any alternative plot in lieu of the plot      G
already allotted.

    3. The Writ Petitioners were informed on 22nd March,
2003, that the Board of NOIDA had rejected their proposal for
waiver of the penalty and that the same would have to be paid
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    1078    SUPREME COURT REPORTS                (2010] 12 S.C.R.

A   within 30 days, otherwise their allotment would be cancelled.
    At the initial stage when the Writ Petition was filed, the High
    Court had passed an interim order on 18th April, 2003, staying
    the operation of imposition of penalty against the Writ
    Petitioners. Ultimately, after considering the submissions made
s   on behalf of the respective parties, the High Court took note of
    Clause 25 of the Scheme indicating that the plots were to be
    sold on "as is where is" basis, leading to the presumption that
    the Writ Petitioners had knowledge of the existing irrigation
    drain on the plot. The High Court also took note of the power
c   reserved to the NOIDA authorities to vary the area of the plot,
    which the allottee was bound to accept as final. The High Court
    also took into consideration the submissions made on behalf
    of the Board of NOIDA that in its 113th meeting held on 10th
    February, 2003, the Petitioners' representation was finally
    rejected but despite the same they did not deposit the penalty
0
    and insisted upon the waiver of penalty and interest.

       4. Having arrived at the conclusion that the Writ Petitioners
  had knowledge of all the terms and conditions, status, location
  and other details about the plot, which was advertised for
E allotment, the High Court felt that there was no merit in the Writ
  Petition and dismissed the same. The interim order passed in
  the matter was also vacated.

       5. Mr. Jayant Bhushan, learned Senior Advocate, who
F appeared for the Petitioner Company, submitted that having
  auctioned the plot in question without proper specifications and
  contrary to the description in its brochure, it was not within the
  competence of the NOIDA authorities to impose penalty on the
  Petitioner Company for not completing the execution of the
G lease deed within the stipulated period of 120 days from the
  date of allotment. In fact, in the aforesaid background, a
  representation was made by Shri Hira Lal Gupta to the Chief
  Executive Officer, NOIDA, indicating that he wanted to transfer
  the plot in question to the Petitioner Company, wherein he and
  his son are Directors. Since the said formalities were likely to
H
ANGEL BABY PRODUCTS PVT LTD. v. NEW OKHLA1079
    INDUST. DEV. AUTH. [ALTAMAS KABIR, J.]

take some time, a prayer was made to the aforesaid Authority           A
to extend the time for depositing the instalments and for making
the application in Form 37-1. In the same communication, a
further prayer was made to waive the penalty due to the delay
in execution of the lease deed. It is on that basis that Shri Hira
Lal Gupta was granted two months' time, without penalty, for           B
completion of formalities.

      6. The said extension came to be considered by the
Officer on Special Duty (G), who interpreted the same to mean
that the Petitioner Company had been given two months' time
without penalty only for change of constitution, but that the          C
interest on the outstanding instalments, penal interest and
penalty, whatever was outstanding, would have to be recovered,
as it was. On 1st May, 2002, the Deputy Manager (C), NOIDA,
wrote to Shri Hira Lal Gupta in regard to his request for effecting
the change relating to the transfer of the plot to the Petitioner      D
Company. In his said letter, the said Authority requested Shri
Gupta to submit the documents indicated in the said letter in
order to effect the change of constitution in regard to the allottee
of the plot in question. In addition, Shri Gupta was informed that
on his failure to complete execution of the lease deed, a sum          E
of Rs.62, 18,088.00 had become payable by way of late fee for
the period between 22nd November, 2001 to 30th April, 2002.
Furthermore, after the said period, penalty of Rs.38,863.05 per
day would also be payable. The Petitioner was requested to
deposit the penalty amount for completion of Form 37-1 for             F
change of constitution and execution of the lease deed.

     7. As indicated hereinabove, the imposition of penalty is
the bone of contention in this Special Leave Petition.

     8. Mr. Bhushan reiterated the submissions made before             G
the High Court that on 24th March, 2002, when two months'
time had been granted to the Petitioner Company by the Chief
Executive Officer, NOIDA, for completion of the formalities for
change of constitution, the Officer on Special Duty had acted
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    1080     SUPREME COURT REPORTS               [2010] 12 S.C.R.


A illegally by passing an order on 11th April, 2002, which was
  within three weeks from the date of the order of the Chief
  Executive Officer, demanding payment of penal interest and
  penalty. Mr. Bhushan contended that during the extended
  period of two months, the Officer on Special Duty was not
B entitled to demand payment of penalty when, in fact, payment
  of such penalty had been specifically waived by the Chief
  Executive Officer.

         9. On the other hand, learned counsel for the Respondent
    Authority, supported the order of the Officer on Special Duty
C   on the ground that the period for execution of the lease had
    been extended by a period of two months by the Chief
    Executive Officer in view of the prayer made by Shri Hira Lal
    Gupta to transfer the allotment in the name of the Petitioner
    Company, wherein both he and his son were Directors.
D   Learned counsel reiterated the submissions made before the
    High Court that the order of the Chief Executive Officer, NOIDA,
    extending the time for completion of the execution of the lease
    deed would have to be considered in that context only. He urged
    that notwithstanding the time extended for completion of
E   constitutional changes, the liability for payment of penalty did
    not stop on account of the order of the Chief Executive Officer
    which continued to remain operative after the expiry of 120 days
    from the date of allotment and the Petitioner Company was,
    therefore, liable to pay both the penalty charges as also the
F   lease rent at the rate of Rs.38,863.05 per day. Mr. Ravindra
    Kumar specifically referred to the subsequent order of the Chief
    Executive Officer dated 22nd July, 2002, by which he directed
    that the land (2590.86 sq. meters) shown in the brochure be
    given to Shri Hira Lal Gupta and penalty be recovered as per
G   rules. He urged that the effect of the earlier order passed by
    the Chief Executive Officer on 24th March, 2002, stood
    superseded by the subsequent order, whereby penalty was
    directed to be recovered from the Writ Petitioners, according
    to the rules.
H
ANGEL BABY PRODUCTS PVT. LTD. v. NEW OKHLA1081
    INDUST. DEV. AUTH. [ALTAMAS KABIR, J.]

      10. It was also reiterated that since the Petitioner             A
Company had decided to invest a huge sum of money in the
allotted land, it is difficult to accept that the Petitioner Company
or its Directors would not have made enquiries as to the nature
of the land which was being allotted to them. In other words, it
has to be held that the Writ Petitioners were fully aware of the       B
existence of the municipal drain on the land and absence of
knowledge thereof was nothing but a ploy on the part of the
Petitioner Company to avoid its responsibility regarding
payment of penalty for non-compliance of the conditions to
complete execution of the lease deed within 120 days from the          c
date of allotment of the plot. Learned counsel submitted that
the position stood further compounded by the fact that under
Clause 25 of the general terms and conditions spelt out in the
brochure, it was clearly indicated that the allotment of the land
was subject to variations in the area of the plot and that the         D
same would have to be accepted by the allottees on "as is
where is" basis.

    11. Mr. Ravindra Kumar submitted that no case had at all
been made out for interference with the orders passed by the
High Court dismissing the Writ Petition.                               E

     12. For the reasons hereinafter following, we are unable
to accept Mr. Jayant Bhushan's submissions questioning the
order passed by the Officer on Special Duty dated 11th April,
2002, and the various notices subsequently issued on the basis         F
thereof, demanding payment of penalty despite the order of the
Chief Executive Officer waiving imposition of such penalty for
the delay in execution of the lease deed.

      13. The materials on record indicate that there had been
correspondence exchanged between the parties with regard to            G
the land allotted and the area thereof on account of the
existence of the municipal drain either on the plot or in its
vicinity. Shri Hira Lal Gupta had also made a request for the
plot allotted in his name to be transferred in the name of the
Petitioner Company in which he and his son were Directors.             H
    1082    SUPREME COURT REPORTS               [2010] 12 S.C.R.


A Since the same was likely to take some time for completion of
  the formalities, a specific prayer was made to serve the penalty
  due to delay in the execution of the lease deed. In such
  background, the Chief Executive Officer, NOIDA, extended the
  period for completion of the formalities relating to the
s constitutional change by a period of two months without penalty
  from 24th March, 2002. Before the said period could expire,
  the Officer on Special Duty, on a misunderstanding of the order
  passed by the Chief Executive Officer, NOIDA, indicated by his
  order dated 11th April, 2002, that since the Chief Executive
c Officer had given two months' time without penalty only for
  change of constitution, interest on the outstanding instalments,
  penal interest and penalty, were liable to be recovered from the
  Writ Petitioners. To add to the confusion, a further order was
  passed by the Officer on Special Duty (G) on 26th April, 2002,
D directing that steps be taken in terms of his earlier order dated
  11th April, 2002, and indicating that two months' time given to
  the Writ Petitioners was for completion of formalities for change
  of the name of the allottee.

        14. Up to this stage, the case of the Petitioner Company
E for waiver of penalty can be accepted, but the subsequent
  correspondence which followed between the parties and the
  failure of the Petitioner Company and Shri Hira Lal Gupta to
  complete the execution of the lease deed even within the
  extended time of two months, indicate that neither Shri Gupta
F nor the Petitioner Company had any inclination to complete the
  formalities for execution of the lease deed pursuant to the
  change in the name of the allottee from Shri Hira Lal Gupta to
  the Petitioner Company.

G       15. From the materials on record and the subsequent
  correspondence beginning with the letter dated 1st May, 2002,
  written by the Deputy Manager (C), NOIDA, it is apparent that
  the Petitioner Company and Shri Hira Lal Gupta were given a
  great degree of latitude to complete the transaction. In fact,
H meetings of the Committee had been convened on 23rd
ANGEL BAB~ PRODUCTS PVT. LTD. v. NEW OKHLA 1083
    INDUST. DEV. AUTH. [ALTAMAS KABIR, J.]

October, 2002 and 26th November, 2002, in which Shri Hira           A
Lal Gupta appeared and made submissions for waiver of the
penalty but on the basis of the record, the Committee rejected
Shri Gupta's submissions and Shri Gupta was subsequently
informed of the decision of the Committee which was approved
at a meeting of the Authority convened on 15th February, 2003,      B
under the Chairmanship of the Additional Chief Executive
Officer, NOIDA. Even if initially a case may have been made
out on behalf of the Petitioner Company that the execution of
the lease deed could not be completed on account of the mis-
description of the plot and in view of the prayer for change in     c
the name of the allottee, on account of the subsequent conduct
of the Petltioner Company and Shri Gupta, we are not inclined
to interfere with the order of the High Court or the decision of
the NOIDA relating to imposition of penalty and interest.
However, we are also not inclined to accept the interpretation
                                                                    0
given by the Officer on Special Duty to the order passed by the
Chief Executive Officer on 24th March, 2002, and, accordingly,
we direct that in calculating the penalty and interest as payable
under the agreement entered into between the parties, the said
period of two months from the date of the order dated 24th
March, 2002, shall be excluded.                                     E

     16. With the aforesaid modification of the order passed
by the Chief Executive Officer on 22nd July, ~002 and the
subsequent resolution of the NOIDA taken at the meeting
convened on 15th February, 2003, the Special Leave Petition         F
stands dismissed.

       17. There will, however, be no order as to costs.

N.J.                                           SLP dismissed.