M/S Rose Builteh Registered Partnership Firm Through Its Authorized Partner Shri Mukesh Kumar vs. Indore Development Authority

Held

The Court held that it is an admitted position that demands were raised from time to time and the petitioner fulfilled them. It was also not disputed that possession was handed over upon payment of 50% of the amount. The Court noted the petitioner's willingness to perform the rest of the contract by depositing the two cheques totaling Rs. 20,01,63,897/- and their readiness to deposit the balance amount with reasonable interest. Consequently, the Court set aside the additional demand of Rs. 71,41,89,812/-. The petitioner was directed to pay Rs. 11,00,00,000/- and Rs. 9,01,63,897/-. Furthermore, the petitioner was directed to deposit the outstanding amount of Rs. 20,01,63,897/- along with interest at 6% per annum within two months, after which the respondent/State was to execute the sale/lease deed. The respondents were also directed to remove all obstructions and encroachments. The writ petition was allowed to the extent indicated.

Facts

The petitioner, M/s Rose Builtech Registered Partnership Firm, challenged a demand of Rs. 71,00,74,562/- issued by the Indore Development Authority (IDA) on July 25, 2024, for a commercial plot. The petitioner was the successful bidder in a 2011 tender and was allotted the plot for Rs. 49,43,13,600/-. The allotment letter in 2014 stipulated payment of the balance premium by July 2024, but also imposed a condition for payment of 75% within 3 years in 12 quarterly installments, contrary to tender conditions. The petitioner objected, and the IDA later rescheduled installments to 40 with 10.5% quarterly compounded interest. The IDA claimed the petitioner's file was lost in a fire. The petitioner paid Rs. 14,03,33,303/- for 8 quarterly installments and interest. Possession was handed over on March 31, 2017, but the plot had obstructions. The petitioner proposed a one-time payment, and on May 5, 2017, issued two cheques totaling Rs. 20,01,63,897/-. The IDA did not present these cheques, which were later lost in a fire. The IDA then issued the impugned demand for Rs. 71,41,89,812/-, including premium, lease rent, delayed interest, and GST.

Key Issues

1. Whether the demand of Rs. 71,41,89,812/- raised by the respondent IDA is arbitrary, illegal, and unsustainable, particularly in light of the petitioner having already paid the entire premium and lease rent on May 5, 2017, through two cheques that were not presented by the IDA, and subsequently lost in a fire. 2. Whether the demand is contrary to the principle of Legitimate Expectation, given the commercial tender and acceptance of the petitioner's bid, and the principle of Unjust Enrichment of the public body. 3. Whether the IDA failed in its duty to remove obstructions (electric poles and encroachments) from the plot, rendering the inflated demand unjustified and entitling the petitioner to compensation. Petitioner's Arguments: The petitioner argued that the demand is illegal as the entire payment was made via cheques on May 5, 2017, and the IDA's failure to present them, leading to their loss, should not penalize the petitioner. They contended the demand violates legitimate expectation and amounts to unjust enrichment. The petitioner also argued that the IDA's failure to clear the plot of obstructions makes the demand unjustified and that they are entitled to compensation. Respondents' Arguments: The respondents argued that the demand notice is in accordance with prevailing rules and does not warrant interference. They claimed the petition is baseless and misconceived, stating the allotment was cancelled due to non-payment of installments in 2017. They also asserted that disputed questions of fact are involved, which cannot be adjudicated in a writ petition.