Supreme Court of India
M/S. RAJURESHWAR ASSOCIATESversusSTATE OF MAHARASHTRA AND ORS.
- Citation
- 2004 INSC 392
- Decided
- 5 July 2004
- Disposal
- Dismissed
- Bench
- R C LAHOTI
Holding
The State Government did not obtain the requisite sanction under the Rules of Business, so the sale agreement was not binding and could be lawfully cancelled, with the appellant entitled to a refund plus interest.
Summary
The appellant, a partnership firm, paid Rs. 781.33 lacs for the purchase of land and buildings of a cooperative cotton mill that had been partially resumed by the State. The liquidator executed a sale agreement, but the State later cancelled it, claiming the price was far below market value and that the sale lacked proper governmental sanction. The Supreme Court held that the land remained Government property, the mill could not dispose of it without State permission, and the sale required approval by the Council of Ministers under the Maharashtra Rules of Business, which was never obtained. Consequently, the agreement was not binding, the State was entitled to cancel it, and the appellant was to be refunded with interest. The appeal was dismissed.
Issues considered
- Whether the State Government had valid approval under the Maharashtra Rules of Business to sell the resumed land to the appellant.
- Whether the executed sale agreement created an estoppel preventing the State from cancelling the sale.
- Whether the price offered by the appellant was adequate or required the fixing of an upset price before sale.
- Whether the procedural requirements of Rules 8, 9, 11 and 12 of the Maharashtra Government Rules of Business were complied.
- Whether the State could lawfully cancel the agreement and be ordered to refund the amount with interest.
Legislation cited
- Constitution of Indias. Article 166, s. Article 226
- Indian Partnership Act
- Maharashtra Land Revenue Code, 1966
Subjects
government landalienation of government propertyoccupancy priceupset pricerules of businessestoppelliquidationsale cancellationrefund with interest
Judgment
MIS. RAJURESHWAR ASSOCIATES A
v.
STATE OF MAHARASHTRA AND ORS.
JULY 5, 2004
B
[R.C. LAHOTI, CJ. AND ASHOK BHAN, J.]
Maharashtra Land Revenue Code, 1966/Maharashtra Government
Rules of Business; Rules 8, 9, 11 & 12 :
Government land granted to a co-operative cotton Mill subject to
c
certain conditions-Substantive portion of the land taken back by State
Government on ground of violation of the conditions-Mill went in
liquidation-Invitation for tenders for selling the entire land including
property ofthe Mill-Acceptance oftender submitted by appel/ant/offeree- D
Execution of the agreement of sale in favorur of offeree by liquidator-
Government 's decision to cancel the agreement as price offered by the
appellant was less than the market price of the land-Challenge to--
Rejected by High Court directing the liquidator to refund the amount
deposited with interest thereon-On appeal, Held: State Government
resumed the land fi"om the Mill-Having regard to the provisions of law, E
the Mill could not dispose of the land without the permission of the State
Government-Upset price need to be fixed before offering the land for
sale-Approval of Council of Ministers required to be obtained in terms
of the Rules before alienation of the Government property/land-
Requirements under the Rules could not be bye-passed by any individual F
functionary-Decision by the Minister not to place the matter before the
Cabinet and to finalise the tender, and consequent sanction vitiated in
v
law-State Government empowered to cancel the agreement since price
offered in the tender was much less-State Government to refund the
amount to the appellant as deposited by him along with simple interest @ G
11 % per annum for the relevant period~Directions issued-Constitution
of India, 1950-Article 166-Maharashtra Land Revenue (Disposal of
Government Land) Rules, 1971.
Words and Phrases : H
915
916 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A 'Occupancy price' and 'upset price' Meaning of in the context of
Maharashtra Land Revenue (Disposal of Government Land) Rules 1971.
Revenue and Forest Department of State Government granted
land measuring 48 acres 24 gunthas to a Co-operative Cotton Mill on
B certain conditions. Later, substantial portion of the land was withdrawn
by the Government since the Mill had violated the terms and conditions
of ·the grant. The Mill went into liquidation and a liquidator was
appointed. The liquidator invited tenders to dispose of the entire land
including the portion of the land in possession of the Government. The
..
Government accorded sanction to finalise the sale of the land in favour
C of the appellant, the highest bidder, subject to fulfilment of certain
conditions. Liquidator informed the appellant to deposit 25% of the
bid amount to ~et the sale agreement executed. Though the necessary
consideration amount was deposited by him yet the agreement of sale
was not executed in bis favour, as the Government cancelled the
D agreement on the ground that the price of the land as offered by the
appellant was less than the market price of the land. Appellant
challenged it. Rejecting the challenge, High Court directed the State
to refund the amount deposited by the appellant along with interest@
,.
11 % thereon. Hence the present appeal.
E
Appellant contended that since the agreement for sale of the land
in question was executed in his favour by the authority concerned, the
State Government was estopped from going back from its promise;
that since the Cabinet had taken the decision not to place the proposal
F of sale/liquidation of the Mill before them, Cabinet's approval before
sale of the land was not necessarily required to be obtained; that the
High Court was not justified in accepting the contention of the
respondent that the price offered by the appellant was less/inadequate.
Respondent-State contended that proper decision was not taken
G by the Minister concerned to sell the land/property in favour of the
appellant; that proper procedure for sale of the land in question was
not followed; and that the price of the land as offered was grossly
inadequate.
H Dismissing the appeal, the Court
RAJURESHW AR AS SOCIATES v. ST ATE 917
HELD : 1.1. The land belonging to the Revenue and Forest A
Department of the State Government was handed over to a Mill on
payment of occupancy price subject to certain conditions including
that if any of the terms of grant were violated the land could be
resumed. Subsequently, orders of resumption were passed by the
Collector. The legality of the order of resumption of the land is the B
subject matter of challenge in a petition filed separately before the
Court. Hence, the same issue could not be adjudicated in a petition filed
under Article 226 of the Constitution of India as has rightly been held
by the High Court. (932-H; 933-A, D]
. " 1.2. The term 'occupancy price' has been defined in Rule 2(k-i) C
of the Maharashtra Land Revenue (Disposal of Government Lands)
Rules, and it means the price payable as consideration for the grant
of the right to occupy and use the land. (933-A-B]
1.3. The terms of grant were specific and having regard to the D
provisions of the Maharashtra Land Revenue Code, it cannot be held
that the subject land was the exclusive property of the Mill and the
society owning the Mill had the right to dispose it of without the
permission of the State Government. The Collector had resumed the
land in exercise of his statutory powers. Since the land stood resumed, E.,
the Mill had no power to dispose of the land without getting the order
of attachment revoked. (933-E-F-G[
2.1. It is evident that requirement of the relevant Rules of
Maharashtra Government Rules of Business was not complied with at F
the time when decision was taken by the Textile Minister to sell the entire
land/property in favour of the appellant. The matter was required to he
• placed before the Council of Ministers as per Rule 11 of the Rules of
Business, as the alienation of the property exceeded Rs. 5 lacs, since the
State Government's Finance Department had not concurred with the
Textile Department. The Government as per Rules of Business had not G
given any sanction/approval for the sale of land. The communication to
appellant for selling of the land was not a Government decision as is
obvious from the record and the subsequent communications were
issued without verifying the record and ran contrary to the record, thus,
it did not convey a proper sanction. (937-D-E-F-G] H
918 SUPREME COURT REPORTS (2004] SUPP. 2 S.C.R.
A 2.2. It was rightly stated by the Textile Department of the State
Government in their note that the matter be placed before the Cabinet.
The Departments of Revenue and Finance having given their consent
for sale of 5 acres of the land, the matter had to be placed before the
Cabinet. At that stage, the Textile Department insisted on the sale of
B the entire land and the matter was considered afresh. In the revised
proposal made by the Revenue Department, sanction for the sale of
entire land was given subject to fulfilment of four conditions. The idea
was that the upset price of the land must be fixed first and as to
whether it should be sold by auction or tender and how the sale
C proceeds should be shared by the Government and the Mill. But the
basic condition, that the upset price be fixed and thereafter land be
sold, was abundantly made clear. The Finance Department concurred
. .
to these conditions. It would be incorrect to say that the proposal of
the Textile Department was accepted by the Revenue and the Finance
Departments. [937-G-H; 938-A-B-C-DI
D
2.3. The Textile Department later proposed that the tenders
invited earlier be finalized and that there was no need to re-auction
the land. The Revenue Department expressed its disagreement and
reiterated its earlier proposal that the land be disposed of after fixing
E the upset price. The Finance Department concurred with the view of
the Revenue Department. Further, it suggested !hat instead of placing
the matter before the Cabinet, the decision could be taken at the
department level as the Chief Minister had instructed that there was
no need to submit such cases before the Cabinet. However, from the
F record, it was found that there was no such decision taken by the
Cabinet. Even assuming that the Chief Minister had informally so
directed as stated, the requirement under the Rules of Business could
not be bye-passed by any individual functionary. Though the Chief
Secretary sets out the correct approach that action be taken in
accordance with law, the Minister for Textile went by the incorrect
G approach suggested by the D'epartment of Textile. The decision so
taken by the Minister for Textile and the consequent sanction is vitiated
in law. The sanction so granted cannot be termed in law as the grant
of permission by the Government in accordance with the Rules and the
procedure prescribed. Apart from any other requirement, there being
H disagreement between Textile Department on the one hand and the
RAJURESHW AR ASSOCIATES v. STA TE 919
Revenue a!ld Finance Department on the other, the matter had to be A
placed/should have been placed before the Cabinet as per sub·rule (2)
of Rule 11 of the Rules of Business. [938-D-E-F, G-H; 939-D-E-Fj
3.1. In the facts and circumstances of the case, the Chief Minister
was right and justified in directing re-lender when an offer was received B
from another offeree. Such direction was in keeping with the views
expressed by the Department of Revenue and ~inance. The matter was
considered further and the final decision to cancel the agreement was
taken. Since the Government believed that the price offered was an
under valuation of the subject property which is a prime land located C
... within the Corporation area. The Divisional Commissioner vide his
communications brought to the attention of the State Government that
the market value of the property was on higher side. [939-G-H; 940-Al
3.2. When the offer of the appellant was received, no valuation
of the land had been got done. Th Liquidator could not have invited D
tenders for the entire land. The Revenue Department as well as the
Finance Department had not agreed for the sale of the entire land. The
decision is taken by the Textile Department to sell the entire land and
the matter was required to be placed before the Cabinet, and in the
absence of any proper sanction, the Government had the power to E
cancel the same especially when it was of the opinion that the price of
the land as offered by the appellant was under valuation of the
property. The High court was right in coming to the conclusion that
the State Government did not, at any time, give approval for the sale
or disposal of the subject land. Even if the reason that the land was F
required by the Government for setting up a sports complex is ruled
out of consideration, the final decision taken by the Government to
j' ~ cancel the agreement of sale cannot be invalidated in the fact of the
~
' finding that there was no proper approval/sanction of the Government
for th'e sale of the subject land. [940-B-C-D)
G
4. The High Court had taken care to give adequate compensation
to the appellant for any hardship or prejudice occasioned to the
appellant and has ordered the refund of the amount with simple @
11 % p.a. In compliance thereof, the entire amount was refunded to the
appellant. However, this Court vide its earlier order directed the H
920 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A appellant to return the amount to the respondents and the respondents
were directed to keep the amount in the interest bearing account. In
order to iron out any dispute as to the repayment of the amount and
the interest thereon, it is directed that the Government would be liable
to refund the amount to the appellant along with simple interest @
B 11 % per annum for the period during which the amount remained
with them. (940-H; 941-A-B-CI
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8539 of
2002.
c From the Judgment and Order dated 24.4.2002 of the Bombay High .. -
Court at Aurangabad Bench in W.P. No. 5219 of 2001.
R.F. Nariman, Sanjay V. Kharde, Ajit B. Kale and Ms. Chandan
Ramamurthi for the Appellant.
D
Uday Umesh Lalit, Ms. Arpita Singh, Prasenjit Keswani, S.S. Shinde,
Mukesh K. Giri and T. Mahipal for the Respondents.
The Judgment of the Court was delivered by
E
BHAN, J. : This appeal is directed against the final judgment and
order dated 24.2.2002 passed by the High Court of Judicature of Bombay,
Bench at Aurangabad in Writ Petition No. 5219 of2001. By the impugned
order the High Court has dismissed the writ petition filed by the appellant.
F Appellant is an Associate registered under the Indian Partnership Act
for the purpose of carrying on the business of purchase and sale of
agricultural land, to develop the lands and construct buildings by taking
contracts under Government and of private parties. It also deals as
commission agent in real estates.
..
G
Land admeasuring 48 acres 24 gunthas of Survey No. 55 was granted
by the Revenue and Forest Department of the State Government to
Aurangabad Zilla Sahakari Soot Ginni Ltd. ("Mill" for sh01i) on conditions
inter alia that the mill shall not transfer the said land without prior
H permission of the Government and that the land and buildings thereon
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.) 921
would be liable to be resumed in case of breach of any conditions. Some A
of the relevant terms and conditions of the grant were as under :
"(v) That, the Suit Girni shall not transfer its rights in the land
to anybody by sale lease, mortgage etc. without prior
permission of Government. Further, the land shall not be B
transferred by the Sut Girni to a foreigner except a foreigner
domiciled in India, or a foreign firm established or trading
in India, without the consent of Government which will have
full discretion to refuse without assigning any reasons.
(vi) That the land and the Sut Girni buildings to be constructed
c
thereon shall be used for the purpose for which the grant is
made and for no other purpose.
(vii) That the Sut Girni buildings to be constructed shall comply D
with the provisions of Ribbon Development Rules in force.
(viii) That the land and the building thereon shall be liable to be
resumed to Government without payment of compensation
for breach of any of the conditions."
E
In course of time, buildings were erected on 5 acres of land out of
48 acres and 24 gunthas and the mill started conducting its business. Out
of the aforesaid land of 48 acres and 24 gunthas, 3 acres and 12 gunthas
was withdrawn and given over to the Municipal Corporation for widening
of the road .Two acres of land was withdrawn by the District Collector F
and kept under Government account and recovered the non-agricultural
land revenue by sale of the same leaving 43 acres and 12 gunthas with the
mill.
Since the mill had violated the terms and conditions of grant in its G
favour, on 18.12.1997, 38 acres and 12 gunthas of land was attached and
taken in possession by the Government leaving 5 acres of land on which
buildings had been erected. On 22. 7.1998, Co-operaton & Textiles
Department of the State Government proposed to sell 5 acres of land with
buildings thereon. H
922 SUPREME COURT REPORTS (2004] SUPP. 2 S.C.R.
A The total liability had accumulated to around Rs. 14 crores and no
funds were available with the Spinning Mill for clearing the said liabilities,
Liquidator was appointed on th•: Spinning Mill under the Maharashtra Co-
operative Societies Act. Spinning Mill through the Liquidator submitted a
proposal to the Government through the Director of Hand loom, Powerloom
B and Co-operative Textile (hereinafter refeITed to as 'the respondent No. 2')
for allowing the Spinning Mill to dispose of its building, plant, machinery
and land. After obtaining permission from respondent No. 2, the Liquidator
by publication dated 8.10.1998 invited tenders from the bidders for selling
the property of the Spinning Mill situated in Survey No. 55 including the
C land. The Liquidator instead of inviting offers for 5 acres of land on which
the buildings had been constructed, invited offers for sale of entire land
of 43 acres 11 gunthas treating it to be the property of tne mill.
Mis. Rajureshwar Associates - appellants herein, in response to the
D proclamation issued by the Liquidator. submitted the tender quoting the
price of Rs. 781.33 lacs along with demand draft of Rs. 25 lacs as earnest
money. Five others also submitted their tenders. Liquidator forwarded the
offers to the Textile Ministry. The tender submitted by the appellant was
accepted by respondent No. 2 and was forwarded to the Government on
E 29.1.1999 for further action. The Principal Secretary, Co-operative &
Textile Department, called for a meeting on 26.4.2002 to consider the steps
taken for liquidating the Spinning Mill. In the said meeting, the Principal
Secretary instructed that the tenders submitted by the appellants be
accepted and sent the same to the Government for its acceptance with its
recommendations. The State Government by communication dated
F 23.10.2000 infoITned respondent No. 2 that the Government had accorded
sanction for finalising action of sale of the Spinning Mill. It was however
pointed out that before finalising the action of sale, the follcwing aspects
be taken into consideration :
G "The cost of land should be drawn as on the date of accepting the
tender for sale of the mill. The amount which has been deposited
by the mill towards the lease, should be deducted and after
deducting the said the remaining 50 per cent should be taken by
the Textile Mill and the remaining 50 per cent should be deposited
H with the Government (Collector, Augangabad) and the possession
RAJURESHWA~ ASSOCIATES v. STATE [BHAN, J.] 923
of the land alon_g with the building should be taken from the A
Collector."
Further, it was also informed that the tender submitted by the
appellant should be finalised and the said mill along with the land should
be sold to them. B
In view of the aforesaid communication, respondent No. 2 issued
further communication dated 2.11.2000 directing the Liquidator that in
view of the sanction accorded by the Government, the Liquidator should
execute the agreement of sale in favour of the appellant. The Liquidator C
by his communication dated 4.11.2000 informed the appellant that sanction
had been received from the Government for the purpose of final sale of
property of the Spinning Mill and accordingly the appellant should deposit
25% of the bid amount and get the agreement of sale executed. In response
to the said communication, appellant paid Rs. 1,95,33,250 to the Liquidator D
and the Liquidator in turn executed agreement of sale dated 20.11.2000 in
favour of the appellant of the property of the Spinning Mill. The Appellant
further deposited a sum of Rs. 293 lacs with the Liquidator and requested
him to execute the sale deed in its favour. Liquidator vide his letter dated
23.1.2001 acknowledged the receipt of Rs. 4,88,33,250. However, he E
informed the appellant that some legal action was yet to be completed by
the Revenue Department and unless the possession was received from the
Collector, Aurangabad, no action could be taken for handing over the
possession of the Spinning Mill to the appellant.
In view of the decision taken by the Co-operation Department and F
the Revenue and Forest Department to sell the property of the Spinning
Mill, the Desk Officer (Revenue & Forest Department) by communication
dated 24.1.200 I requested the Collector, Aurangabad (respondent No. 4
herein) to get the price of land Survey No. 55 fixed as on 27 .11.1999 from
the Assistant Director, Town Planning and the Liquidator be informed of G
the same. Collector informed the Revenue authorities that the land
admeasuring 32 acres and 12 gunthas was owned by the Government of
which possession was taken by it and, therefore, the same could not be sold
by anyone including the Liquidator. He further stated that he was unable
to accept the request for making valuation of Survey No. 55. In view of H
924 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A the said letter by the Collector, the Liquidator by his letter dated 12.2.2001
informed the appellant that unless the permission is granted by the State
Government, no action cou Id be taken in respect of the execution of the
sale-deed and requested the appellant not to enter into any further
correspondence. The appellant on 23.4.2001 deposited the remaining
B amount of Rs. 1,95,33,250 with the Liquidator and as such the total amount
due towards the consideration was paid by the appellant to the Liquidator.
The appellant thereafter made several representations, oral as well as
written, to the concerned authorities requesting them to execute the sale-
C deed and hand over the possession of the property. 'l'hese representations
are dated 18.5.2001, 7.1.2001 and 12.6.2001. In these representations, it
was pointed out that the appellant had paid the amount to the Liquidator
after borrowing from a Bank on payment of heavy interest on the said
amount. A legal notice was also issued. As no action was taken, the
D appellant filed Writ Petition No. 5219 of 2001 on 12.12.2002 challenging
the inaction of the Government authorities and sought for following
substantial reliefs :
"(a) To direct the Respondent No. 3 to execute the sale deed as
per the agreement dated 18.11.2000 (Exihibit-G), by issuing
E writ of mandamus or any other appropriate writ, order or
directions as the case may be.
(b) To direct the Respondent No. 4 to implement the decision
of the Government dated 23.10.2000 and letter dated
F 24.1.2001 and 12.7.2001, by issuing writ of mandamus or
any other appropriate writ, order or directions by way of
interim relief, in addition to an order of injunction from
.,
creating a third party interest, directions have been sought
to hand over the possession of Survey No. 55 at Garkheda
G as· per agreement dated 18. f 1.2000 and to implement the
letter dated 24.1.2001 against Respondent No. 4."
After filing of the writ petition, the Liquidator in his reply disclosed
that the State Government by its communication dated 26/28th December
H 2001 had taken a decision to cancel the agreement executed in favour of
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 925
the appellant for the reason that the land under sale is situated in the heart A
of city of Aurangabad and the price offered by the appellant was less than
the actu.al price. The appellant thereafter amended its writ petition and
challenged the aforesaid order and consequently, an additional prayer
(C-1) came to be incorporated reading as under :
B
"(C-1) Quash and set aside the decision dated 28.12.2001 and the
communication dated 4. I .2002 issued by the Respondent
No. 2 to the Respondent No. 3 and the communication dated
8.2.2002 issued by .the Respondent No. 3 and for that
purpose issue necessary writs and orders."
c
All the parties to the writ petition filed their replies in which the tenor
of the reply was that due to inadequate price, the agreement of sale
executed in favour of the appellant had been cancelled and that there was
no approval by the Government for the sale of the land or the building of D
the Mill. In the absence of proper sanction, the sale could not be effected
in favour of the appellant.
The High Court rejected the first prayer made in the writ petition by
...
observing :
E
" ...... For execution of the terms of agreement normally a civil
remedy is available to the parties and this Court would be slow
in entertaining a writ petition for execution of the contractual
terms. In the case of Hindustan Petroleum Corporation Ltd. &
Anr. v. Dolly Das, [1999] 4 sec 450, it has been held that a F
remedy under Article 226 in the absence of a statutory right
cannot be availed for enforcement of contractual obligations even
if it is soughM<rbe enforced against the State and we, therefore,
do not find it permissible to entertain this petition for directing
the Respondent No. 3 to execute the sale deed as per the G
agreement dated 18.11.2000."
The High Court then proceeded to consider the remaining two
prayers. The Court directed for the production of the records from the
Collector's Office, Aurangabad as well as from the Revenue and Forest H
926 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A Department and Co-operation of Textile Department of Government of
Maharashtra. The Court also directed the concerned officers who had
communicated the decision of the Government regarding the approval of
the tender and sale of the property in favour of the appellant to file their
affidavits. The said two officers filed their affidavits in which they stated
B that the Government had tak,~n the decision for the sale of the said property.
The High Court after perusal of the summoned record, writ petition. replies
filed by the respondents and affidavits by the two officers, who had
communicated the decision of the Government regarding. the approval of
the tender and sale of the property held :
c "On assessing the entire record placed before us and after
considering the arguments advanced by the respective parties,
we are satisfied that the State Government did not, at any
time, give approval for the sale or disposal of the subject
land, as was claimed by the communication dated 23.10.2000 and
D
the land could not bt! sold to the petitioner without such an
approval. There is no case made out to entertain the petition for
directions or relief as sought for and hence we reject the same
summarily."
E The High Court alsc took note of the fact that the land in question
is situated in the heart of the city of Aurangabad having valuation of more
than Rs. 24-25 crores and, therefore, the price quoted by the appellant and
accepted by the Government was too low. The High Court directed
respondent No. 2 and the Liquidator to refund the amount deposited by
F the appellant with simple interest at the rate of 11% per annum.
This Court also sent for the original record, which was produced.
Relevant extracts of the record along with its translations were handed over
to us during the course of hearing.
G
Mr. R.F. Nari man, learned Senior Counsel appearing for the appellants
forcefully contended that the agreement dated 18.11.2000 was executed in
favour of the appellant after receipt of due permission from the concerned
departments and, therefore, the State Government was estopped from going
H back from its promise of selling the property to the appellant, specially
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 927
when it had already accepted the total amount of consideration of Rs. A
781.33 lacs. The High Court erred in holding that the approval accorded
for the sale of the property in favour of the appellant was not that of the
Government as the same had not been put up and approved by the Cabinet.
According to him, the matter was not required to be taken to the Cabinet
as the Cabinet had taken the decision not to submit the proposal of sale/ B
liquidation of the mills before the Cabinet and the concerned Ministry was
to take a decision on the same. This decision of the Cabinet was conveyed
by the Chief Minister which was noted by the Textile Secretary in one of
communications. The High Court was not justified in accepting the
contention of the respondents that the price offered by the appellant was C
inadequate or that the property was required for Sports Complex when the
Government had already taken a decision for establishing the Sports
Complex at Garware Stadium.
As against this, Mr. Umesh Lalit, learned counsel appearing for the D
respondent contended that the matter was required to be placed before the
Cabinet that there was no proper decision by the Government to sell the
property in favour of the appellant. The procedure followed was not in
accordance with law and the rules of business and the price offered by the
appellant was grossly inadequate.
E
The question to be determined in this appeal as based on facts and
the record. We have perused the record with the help of the learned counsel
for the parties.
It would be necessary to advert to the record and the Government files F
in detail to determine the controversy between the parties. From the record
• we find that on 18.12.1997, the Collector Aurangabad had attached 38
acres 12 gunthas ofland out of 43 acres 12 gunthas as the Mill had violated
terms and conditions of grant in his favour leaving 5 acres ofland on which
buildings had been erected with the mill. On 22. 7.1998, the Co-operation G
and Textile Department of the State Government proposed to sell 5 acres
of land with buildings thereon. In October 1998, the Liquidator instead of
inviting bids for 5 acres of land, invited offers for the sale of the entire
land of 43 acres 11 gunthas. On 4.2.1999, remaining land of 5 acres with
buildings was also taken over by the Colllector Aurangabad. The appellant's H
928 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A offer was forwarded by the Liquidator to the Textile Ministry in January
1999.
On 13/14th of February 1999, a proclamation was issued by the
Collector, Aurangabad that the entire land in question i.e. 43 acres 12
B gunthas belonged to the Government and that nobody should et1ter into any
transaction with respect thereto. In spite of that on 30.6.1999, a note was
prepared by the Textile Department for sale of property of the Mill
indicating that it had received 5 offers. In this note, it was specifically stated
that no valuation of the land was done and that the matter be placed before
C the Cabinet. On 6.7.1999, Revenue Department gave its sanction for sale
of 5 acres of land by public notice by the Collector. This noting with
marking '(A)' was submitted for approval and the noting of the Dy.
Secretary to the Chief Minister stated "Show to Finance Department". In
the note prepared by the Finance Department dated 28.9.1999 to which the
D matter had been referred, it was stated that there was no objection to the
sale of 5 acres of land and buildings.
On 29th December 1999 in a meeting chaired by the Minister of
Textile, it was decided to sell the entire land of the mill. The matter was
then sent back to the Revenue Department, which considered the matter
E afresh. In its note dated 17.1.2000, it disagreed with the Textile Department
and reiterated that the land was not of the Mill but of the Government. It
agreed to the sale of the entire land subject to the conditions that - (a)
upset price of the land of 43 acres 12 gunthas be fixed, (b) notice be
published for public action, ( c) entire amount be deposited with the
F Revenue Department and (d) those who had given their offer earlier, be
allowed to participate in the auction. After discussion with the Principal
Secretary (Revenue), the Revenue D1:partment modified the aforesaid .,
conditions and stated that - (a) upset price of the land of 43 acres 12
gunthas be fixed, (b) thereafter the land be sold by public auction and (c)
G the difference between the upset price and the amount received from
auction would go to the account of the Mill. This proposal was accepted
by the Revenue Minister by putting his signatures on 19.2.2000.
In its further note dated 23.2.2000, the Revenue Department set out the
first part of the revised proposal as approved by the Revenue Minister as
H under:
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 929
"(I) 43 acres 12 gunthas land of the Mill has been kept in the A
Government Account. The cost of this land should be
worked out on the basis of the existing market rate of land
;md_ this cost should fixed as upset price and public auction
should be held. The Government (Revenue Depai1ment) will
have the right on the amount received from the auction B
calculated on the basis of the existing market rate and after
deduction of the cost ofland worked on the basis of existing
market rate from the amount received by auction, then
whatever balance will remain, on that amount the Spinning
Mill have the right on it (This should be returned to the Mill). C
This proposal to sell 5 acres land and. building on it
of District Cotton Producers Co-operative Spinning Mill
kept on Government Account for recovery of Government
dues has already been approved by Finance Department vide D
note dated 28/12/99 - pages 22-23/N. However, certain
changes are made in the proposal, the Finance Department
may be approached to give approval to the revised proposal."
The matter thereafter reached the Finance Department for approval, E
which by its communication dated 22.3 .2000 called for the remarks of
Textile Department and asked that the file be resubmitted with the remarks
of Textile Department. The Textile Department, in turn, in its noting dated
14.4.2000 stated that in accordance with the decision taken in the meeting
chaired by the Textile Minister on 29.12.1999, the tenders were invited and
finalisi;d and there was no need to auction the land again. It, therefore, F
requested the Revenue and Finance Departments to accept the proposal of
the Textile Department. This note of the Textile Department led to further
response from the Revenue Department which in para 4 of the note again
reiterated four points set out earlier. It was stated that if the land is sold
by public auction in the manner suggested, Government may get better G
price. To that extent it disagreed with the view of the Textile Industry. On
26.4.2000, a meeting was held in respect of the mills under liquidation
which was presided over by the Principle Secretary (Textiles). The minutes
recorded that the other of the appellant be accepted and the proposal be
submitted to the Revenue and Forest Department for approval and sanction. H
930 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A Revenue Depattment on 2.5.2000 again reiterated its earlier view. The
Finance Ministry on 17.5.2000 proposed that action be taken in terms of
the portion marked 'A' which is reproduced here :
"Hence the market cost of land of 48 acres 24 gunthas kept under
B Government Account, should be got fixed from Town Planning
and Valuation Department and Public Tenders may be called for
sale of land. In this deal the Government must get the cost at the
existing market rate. In case the tender cost is more than the
market cost of the lar>d, then the balance amount may be given
C to the liquidator of the Spinning Mill to defray the liability of the
mill amounting to Rs. 1412.44 lacs and the accumulated loss of
Rs. 571.00 lacs. Similarly there may not be any objection for this
Department to give concurrence to Sr. Nos. 2, 3 and 4 at 'B' on
page No. 47/N."
D The Finance Secretary while approving the aforesaid note stated "no
objection to the proposal to be submitted to the Cabinet with remarks of
the Finance Department". This was further approved by the Principal
Secretary (Finance) on 18.6.2000. The Principal Secretary (Revenue) on
27.6.2000 stated that action be taken as per remarks of the Principal
E Secretary (Finance). A note was thereafter prepared by the Textile
Department and the notings oftht! Principal Secretary (Finance) who in the
note approved by him had stated to get the price of the land fixed through
Town Planning & Valuation Department and then issue notice for public
tender. It was stated in para l 8 that since the auction of the Mill had come
F to the final stage, it would not be, proper to re-invite the tenders. Para 19
of the Note was to the following effect :
"It is already mentioned earlier that this case may be submitted
to Cabinet for consideration. But when a similar case of sale of
G Nanded Co-operative Spinning Mill, Nanded was submitted
before the Cabinet, the Cabinet has taken the decision that
Department should take action under the rules. However, informally
the Hon'ble Chief Minister has instructed that there is no need to
submit such cases before Cabinet.''
H
... ,_
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 931
The note finally stated that decision be taken - ( 1) As the sale A
process was in the final stage, the land should not be sold by public auction,
(2) no need to call revised tenders, (3) after deducting cost of land
calculated as on the acceptance of tender of the appellant, the balance be
utilized by the Liquidator and (4) tender of the appellant be finalised and
the land be sold to them. B
The aforesaid note was signed by the Principal Secretary (Textiles)
and the matter was then placed before the Chief Secretary. Chief Secretary
however opined that no decision be taken at the Government level and the
decision be taken as per rules. On 9. I 0.2000, after nearly 2Yz months, C
overriding the opinion of the Chief Secretary and the view of the Revenue
and Finance Departments, the Minister of Textiles preferred the view of
the Principal Secretary (Textile) and directed that action be taken as
proposed by the Textile Department. In accordance with the aforesaid
direction, intimation was sent by the Textile department that the Government D
had accorded sanction for finalising the sale in favour of the appellant.
Accordingly on 18.11.2000 an agreement of sale was entered between the
Liquidator and the appellant.
On 14.12.2000, an offer was received from one Mr. Moreshwar Save E
for Rs. 8.99 crores for the same property. The Chief Minister directed the
Department to examine and consider the said offer.
Textile Department thereafter prepared a note which was signed by
the Principal Secretary (Textiles) an~ the Minister of Textiles that the
decision to sell the land and the building in favour of the appellant had F
already been taken at the Government le.vel and if offer of Mr. Save was
accepted, it may create problem. The Chief Minister on consideration of
the entire matter stated :
"Possibility of getting more price. Revised tenders be called. " G
Revenue Department on 24. I .200 I wrote to the Collector to get the
-price of the land valued. On 6.2.2001, the Collector informed respondent
.. No. 2 that the land belonged to the Government and no auction for sale
be taken. The appellant was accordingly informed that without permission H
932 SUPREME COURT REPORTS [2004) SUPP. 2 S.C.R.
A of the Government, no action could be taken.
On 12.7.2001, the Revenue Department dispatched a communication
to the Collector that a decision had been taken at the Government
level by the Textile Department with the consent of the Revenue Department
B to sell the land. The matter was thereafter referred to the Law Department
for its opinion. The Law Department opined that it would be desirable on
the part of the Government not to cancel the agreement of sale.
In the meantime, the Divisional Commissioner, Aurangabad, wrote
C a letter to the Government that the land in question be sold and the same
be given to the Department for developing it as a Sports Complex. This
suggestion of the Divisional Commissioner was later on turned down as
a Sports Complex already existed in the city of Aurangabad.
D Revenue Department after making preliminary estimate, valued the
land at Rs. 24-25 crores. It was of the opinion that the sale of the land for
Rs. 7.81 crores would occasion a. heavy loss. The response of the Textile
Department was also sought. Thereafter the matter was considered in a
meeting held on 27.11.2001, which was attended by the Chief Minister,
Chief Secretary, Secretary to the Chief Minister and other officials. It was
E felt that the amount of Rs. 7.81 crores was too low for the land situated
in the prime area. It was further observed that the land was required for
the Sports Complex. It was, therefore, decided that the amount deposited
by the appellant be returned to him.
F In the aforesaid circumstances, on 26.12.2001, the decision was
communicated to the respondent No. 2 regarding cancellation of the
agreement of sale and refund of the amount deposited by the appellant.
Accordingly the Liquidator, on being informed, sent a communication to
the appellant on 8.2.2002 informing them that the agreement of sale was
G cancelled.
First point to be determined in the case is as to the ownership of the
mill in respect of the subject land. The subject land was transferred to the
mill by the Government. The land belonged to the Revenue and Forest
H Depa11ment of the State Government and the land was handed over to the
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 933
mill on payment of occupancy price subject to certain conditions including A
that if any of the terms of grant were violated the land could be resumed.
The term 'occupancy price' has been defined in Rule 2(k-i) of the
Maharashtra Land Revenue (Disposal of Government Lands) Rules, 1971
and it means the price payable as consideration for the grant of the right
to occupy and use the land. Rule 15 therein deals with the terms and B
conditions of grant. Rule 16 states that any land resumed under sub-rule
(2) of Rule 15 may be disposed of in accordance with the provisions of
Rules in that part. It also states that if the grantee commits breach of any
of the conditions specified in sub-rule (1), the Collector can resume and
take possession of the land granted to him and the grantee shall be liable C
to be evicted from the land.
The orders of resumption of the land were passed by the Collector,
Aurangabad on 18.12.1997 and on 4.2.1999. The legality of the order dated
18.12.1997 is the subject matter of challenge in RCS No. 17 of 1998 and, D
therefore, the same issue could not be adjudicated in a petition filed under
Article 226 of the Constitution oflndia as has rightly been held by the High
Court. On 14.2.1999, a proclamation was issued by the Collector,
Aurangabad that the entire land in question i.e. 43 acres 12 gunthas
belonged to the Government and that nobody should enter into any E
transaction with respect thereto. The terms of grant were specific and
having regard to the provisions of the Maharashtra Land Revenue Code,
1966 it cannot be held that the subject land was the exclusive property of
the mill and the society owning the mill had the right to dispose it of
without the permission of the State Government. Condition No. (v)
specifically provided that the mill should not transfer the right in the land F
to anybody by sale, lease, mortgage, etc. without prior permission of the
Government. The Collector had resumed the land in exercise of his
statutory powers on 18.12.1997. Since the land stood resumed, the mill had
no power to dispose of the land without getting the order of attachment
revoked. This observation is in addition to the view that the subject land G
was a Government property at all times.
The initial proposal made by the Department of Textile on 22. 7.1998
was for sale of only 5 acres of land and the approval granted by the
Revenue Department on 6.7.1999 and by the Finance Department on H
934 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A 28.9.1999 was also for sale of 5 acres. However, the Liquidator on
18.10.1998 invited offers for the sale of the entire land of 43 acres and 12
gunthas. As on the date when the offers were invited, there was not even
a proposal for sale of the entire land, leave alone prior permission of the
Government. Revenue Depai1ment in its note dated 17 .1.2000 had agreed
B to the sale of the ·entire land subject to the condition that the upset price
of the subject land be fixed and a notice be published for public auction
and those who had given their offers earlier be allowed to participate in
the auction. The entire sale amount be deposited with the Revenue
Department and the difference between the upset price and the amount
C received from auction shall go to the mill. It is evident from the reading ,.
of the entire record that the idea was that the upset price of the land must
be fixed first and then the land be ~old. The Finance Depai1ment in its note
dated 17.5.2000 and 13.6.2000 also concurred with the conditions proposed
by the Revenue Department. Thereafter, the Textile Department proposed
D that the tenders invited earlier be finalised and there was no need for re-
auction of the land. The matter was thereafter never put up before the
Cabinet and a decision was conveyed to the Collector that the Government
had agreed for the sale of the entire land in favour of the appellant. At the
time when the offer of the appellant was received, no valuation of the land
E was got done.
Prayer made in the writ pet1t1on is for issuance of a writ for
implementation of the decision dated 23.10.2000 and the letters dated
24.1.200 I and 12.7 .200 I. It would be necessary to examine from the record
whether the decision dated 23.10.2000 in pursuance to which the agreement
F to sale dated 18.11.2000 was exe,~uted was the Government decision. The
Governor of Maharashtra, under the powers conferred by clause (2) and
f
(3) of A11icle 166 of the Constitution, has made the Rules of business which
are called the Maharashtra Government Rules of Business. Rules 8, 9, 11
& 12 of the Rules of Business, which are relevant for our consideration
G read as under :
"8. The Council shall he collectively responsible for all advice
tendered to the Governor whether by an individual Minister
on a matter appertaining his portfolio or as the result of
H discussion at a meeting of the Council or howsoever otherwise.
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 935
9. All cases referred to in the Second Schedule shall be brought A
before the Council -
(i) by the direction of the Governor under clause (c) of Article
167;
B
(ii) by the direction of -
(a) the Chief Minister; or
(b) the Minister-in-Charge of the case with the consent of
the Chief Minister. C
Provided that, no case in regard to which the Finance
Department is required to be consulted under Rule 11 shall, save
in exceptional circumstances under the directions of the Chief
Minister, be discussed by the Council unless the Finance Minister D
has had opportunity for its consideration.
10. xxx xxx xxx
11. (I) No Department shall without previous consultation with E
the Finance Department authorise any order (other than
orders pursuant to any general delegation made by the
Finance Department) which -
(a) either immediately or by their repercussion, will affect F
the finance of the State, or which, in particular -
(i) involve any grant of land or assignment of revenue or
concession, grant lease or licence of mineral or forest
rights or a right to water power to any easement or
privilege in respect of such concession; or G
(ii) in any way involve any relinquishment of revenue;
(a) relate to the number or grading or cadre of post or the
employments or other conditions of service or posts. H
936 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A (2) No proposal which requires the previous consultation
of the Finance Depa11ment under sub-rule (I) but in
which the Finance Department has not concurred, may
be proceeded with unless a decision to that effect has
been taken by the Council.
B
(3) xxx xxx xxx
(4) xxx xxx xxx
c (5) xxx xxx xxx
12. All orders or instruments made or executed by on behalf of
the Government of the State shall be expressed to be made
by or by order of or executed in the name of the Governor."
D In Second Schedule under Rule 9, entries at 15 and 17 read as
under :
"15. Any proposal which affects the finance of the State which
has not the consent of the Finance Minister.
E
17. Proposals involving the alienation either temporary or
permanent by way of sale, grant or lease of Government
property exceeding Rs. 50,000 in value of the abandonment
or reduction of a recurring revenue exceeding that amount
F or the abandonment or reduction of a non-recurring revenue
exceeding rupees Five Lacs except when such alienation
sale, grant or lease of Government property is in accordance
with the rules or with a general scheme already approved by
the Council."
G
The Liquidator had invited tenders for the entire property of the mill,
namely, the plant and machinery, building and the land which was in ·
possession of the Collector, Aurangabad. The building, plant and machinery
and other store items undisputedly are owned by the mill and the same
H could be disposed of by the Liquidator with the prior permission of the ,.,,
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 937
Director (Handloom, Powerloom and Textile Uepa11ment) - respondent A
" No. 2. The land belonged to the Government and in any case the same had
been resumed as the mill had violated the terms of the grant.
Rule 9 provides that all cases referred to in the Second Schedule shall
be brought before the Council of Ministers. Entry 15 in the Second B
Schedule provides that any proposal which affects the finance of the State
which does not have the consent of the Finance Minister has to be placed
before the Cabinet. Similarly, entry 17 provides that proposal involving
alienation either temporary or permanent by way of sale, grant or lease of
Government prope11y exceeding Rs. 50,000 in value of the abandonment C
or reduction of a recurring revenue exceeding. That amount or the
abandonment or revenue exceeding Rs. 5 lacs except when such alienation,
sale, grant or lease of Government property is in accordance with the rules
or with a general scheme already approved by the Council. It is evident
that requirement of these rules was not complied with at the time when D
decision dated 23. l 0.2000 was taken by the Textile Minister to sell the
entire I.and in favour of the appellant. The matter was required to be placed
before the Council of Minister as the alienation of the property exceeded
Rs. 5 lacs as per Rule 11 of the Rules of Business secondly since the
Finance Department had not concurred with the Textile Department the E
matter was required to be placed before the Cabinet in terms of Sub-rule
(2) of Rule 11 of the Rules of Business. The conclusion which flows from
the record is to the effect that the Government had not given sanction/
approval for the sale of subject land when the Cooperative of Textile
Depa11ment approached it for the same. The Government as per Rules of
Business had not given any sanction/approval for the sale of land. The F
communication dated 23.10.2000 is not a Government decision as is
obvious from the record and the subsequent communications dated 24.1.200 I
and 12.7.2001 which were issued without verifying the record and ran
contrary to the record did not convey a proper sanction.
G
In the note dated 30.6.1999 prepared by the Textile Department, it
was rightly stated in para 16 that the matter be placed before the Cabinet.
The Depa11ments of Revenue and Finance having given their consent for
sale of5 acres, the matter had to be placed before the Cabinet. At this stage,
the Textile Depa11ment insisted on the sale of the entire land and the matter H
938 SUPREME COURT REPORTS [2004) SUPP. 2 S.C.R.
A was considered afresh. In the revised proposal made by the Revenue
Department, sanction for the sale of entire land was given subject to four
conditions as is clear from the note dated 17.1.2000 and the approval by
the Revenue Minister on 19.2.2000. !These cunJitions have been spelt out
in the earlier portion of this judgment).
B
The idea was that the upset price of the land must be fixed first and
then the land be sold. Further noting is with regard as to whether it should
be sold by auction or tender and how the sale proceeds should be shared
by the Government and the milll. But the basic condition that the upset price
C be fixed and thereafter land be sold is abundantly clear. The notings of the
Finance Department dated 17.5.2000 and 13.6.2000 also show its "
concurrence to these conditions proposed by the Revenue Department. It
would, therefore, be incorrect to say that the proposal of the Tt>xtile
Department was accepted by the Revenue and the Finance Departments.
D It was only on l 4.4.2000 that the Textile Department proposed that
the tenders invited earlier be finalised and that there was no need to re-
auction the land. The Revenue Depattment expressed its disagreement in
its note dated 20.4.2000 and reiterated its earlier proposal that the land be i
E disposed of after fixing the upset price. The notings of the Finance
Depaitment dated 17.5.2000 and 13.6.2000 shows its concurrence with the
view of the Revenue Department. Apart from any other requirement, there
being disagreement between Textile Departmem on the one hand and the
Revenue and Finance Department on the other, the matter had to be placed/
should have been placed before the Cabinet as per Sub-rule (2) of Rule
F 11 of the Rules of Business
In the face of such dissent, the matter had to go to the Cabinet. In
fact, this was the initial proposal of the Textile Depa1tmer1t on 30.6.1999.
However, in the note dated 15.7.2000 even after stating the views of the
G Revenue and the Finance Depa1tments, in para 17 it was proposed that the
tender submitted by the appellant be finalised and there was no need to
call the revised tenders. Para 19 of the said note suggested that instead of
placing the matter before th1~ Cabinet, the decision should be taken at the
department level as the Hon'ble Chief Minister had instructed that there
H was no need to submit such cases before the Cabinet. Form the record we
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 939
find that there is no decision taken by the Cabinet that such matters need A
not be placed before it. A note is appended by the Principal Secretary
(Textile) while conveying the decision of the Cabinet in the case ofNanded
Spinning Mills Ltd. under liquidation that
I;
""During the cid~cussion,
ii-,
Chief Minister feels that such case could B
not be placed before the Cabinet"
For information.
Sd/-
Dated I 6th June 2000"
c
Reliance on the case of Nanded Mill for coming to the conclusion
that the matter need not be placed before the Cabinet is totally misplaced.
It was not the decision of the Cabinet that such matters should not be placed D
before it. Even assuming that the Chief Minister had informally directed
as is stated in the noting of the Principal Secretary, the requirement under
the Rules ofBusiness could not be bye-passed by any individual functionary.
The note of the Chief Secretary sets out the correct approach that the
action be taken in accordance with law. But the Minister for Textile went E
by the incorrect approach suggested by the Department of Textile. The
decision so taken by the Minister for Textile and the consequent sanction
dated 23. I Q.2000 is vitiated in law. The sanction so granted cannot be
termed in law as the grant of permission by the Government in accordaAce
with the Rules and the Procedure prescribed. F
In the circumstances, when the Chief Minister had an 'occasion to
consider the matter when an offer was received from Mr. Save, he was right
and justified in directing re-tender. Such direction was in keeping with the
views expressed by the Departments of Revenue and Finance. The matter G
was considered further after the noting of the Chief Minister at various
levels including, the legal department and the final decision was taken on
27.11.2001. This decision, it appears from the file is on account of the
Government's belief that the price of Rs. 7,81,33,000 was an under
valuation of the subject property which is a prime land located within the H
940 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.
A Corporation area. The Divisional Commissioner, Aurangabad vide his
communication dated 8.8.2001 as well as 23.10.2001 brought to the
attention of the State Government that the market value of the property was
in the range of Rs. 24 - 25 crores. When the offer of the appellant was
received, no valuation of the land had been got done. The Liquidator could
B not have invited tenders for the entire land as out of 43 acres 12 gunthas,
38 acres 12 gunthas had been attached by the Collector on 18.12.1997 and
taken possession of by the government leaving only' 5 acres of land on
which buildings had been erected. Initial decision was to sell 5 acres of
land along with the building and machinery standing thereon. The Revenue
C department was as the finance department had not agreed for the sale of
the entire land. The decision was taken by the textile department including
its Minister to sell the entire land and the matter was required to be placed
before the Cab>net and in the absence of any proper sanction the government
had the power to cancel the same especially when it was of the opinion
D that the price of Rs. 7,81,33,000 offered by the appellant was under
valuation of the property. The High Court was right in coming to the
conclusion that the State Government did not, at any time, give approval
for the sale or disposal of the subject land as was claimed by communication
dated 23.10.2000.
E It is true that the proposal sent by the Divisional Commissioner to set
up sports complex in the subject land was not accepted by the government
as a sports complex already existed in the city of Aurangabad and the
learned counsel for the appellant has rightly contended that this could not
be a valid reason for cancellation of the agreement to sale made in favour
F of the appellant. Even if the reason that the land was required by the
government for setting up a sports complex is ruled out of consideration,
the final decision taken by the Government to cancel the agreement of sale
dated 27 .11.200 I cannot be invalidated in the fact of our finding that there
was no proper approval/sanction of the Government for the sale of the
G subject land.
The High Court has taken care to give adequate compensation to the
appellant for any hardship or prejudice occasioned to the appellant. The
High Court has ordered the refund of the amount with simple interest @
H 11 % p.a. The appellant had deposited Rs. 781.33 lacs on different dates.
RAJURESHWAR ASSOCIATES v. STATE [BHAN, J.] 941
As per order of the High Court the amount of Rs. 781.33 lacs was refunded A
to the appellant on three different dates. This Court in its order dated
16.12.2002 directed that the draft given by the respondents to the appellant
after the decision of the High Court be returned by the appellant to the
respondents and the respondents were directed to keep the amount in the
interest bearing account. In order to iron out any dispute as to the B
repayment of the amount and the interest thereon it is directed that the
Government would be liable to refund the amount to the appellant along
with simple interest @ 11 % per annum for the period during which the
amount remained with it within a period of four months from the date of
this judgment. C
For the reasons stated above, we do not find any merit in the instant
appeal and dismiss it accordingly. No order as to costs.
S.K.S. Appeal dismissed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "government land"Sign in to search