Contempt – Allotment of hotel sites by New Okhla Industrial Development Authority (NOIDA) to various allottees to cater to the demand for hotels around Commonwealth Games, 2010 – Allotments eventually cancelled – Challenged by allottees – Writ petitions allowed, cancellation order set aside – High Court remanded the matter for taking fresh decision – Order of remand challenged by the allottees by filing Special Leave Petitions – By interim order, the State Government was permitted to give hearing to the concerned allottees and pass a reasoned order – State Government decided to cancel the allotments made by NOIDA – Challenged in pending SLPs– By judgment dtd. 05.07.11, Supreme Court inter alia found that the lease given to the allottees were legal and valid; allottees were given option to continue their respective leases by paying higher premium or to withdraw if unwilling to continue – Petitioners herein exercised the option to continue their respective leases by paying the premium– Contempt petitions filed alleging that despite such deposits no supplementary deed was executed – Held: Plots were meant for five-star and three-star hotels which were to come up well-in-time to cater to the demand for hotels around Commonwealth Games, 2010 – It has been more than 10 years since the Games got over but no development on these plots has occurred – Present status is nothing but a stalemate in which valuable assets of a public authority are locked completely – Two options were suggested vide order of this Court dtd.05.09.19 to resolve the disputes between the parties – Petitioners are willing to exercise the second option contemplating sale of the plots after resumption by NOIDA, and payment to them from and out of the sale proceeds – Modalities suggested by the second option could yield results favourable to both sides, and at the same time would take care of public interest as well – Second Option given in the Order dated 05.09.2019 modified – U.P. Urban Planning and Development Act, 1973.
Disposing of the Contempt Petitions, the Court HELD : 1.1 Two options were suggested in the Order dated 05.09.2019. those options were:“All the contempt petitioners-allottees shall pay up all the amounts that are due alongwith the accrued interest on or before 31.12.2019, whereafter, NOIDA shall execute a supplementary lease deed in favour of the contempt petitioners-allottees.
OR
The plots in question which were allotted to the contempt petitioners-allottees be resumed by NOIDA and put up for fresh auction, and from and out of the proceeds the money deposited by each of the contempt petitioners-allottees be returned by the NOIDA along with interest @ 11% p.a.” [Para 9][253-H; 254-A-C]
1.2 The facts set out in paragraphs of the Judgment dated 05.07.2011 indicate that the plots in the instant case were meant for five-star and three-star hotels which were to come up well-intime to cater to the demand for hotels around Commonwealth Games, 2010. It has been more than 10 years since the Games got over but no development on these plots has occurred. The tussle is going on between the Petitioners on one side who submit that because of indifferent and recalcitrant attitude on part of the authorities, they could not enter into any arrangement for financial accommodation, and as such, no development could be undertaken; while on the other hand, the submission on part of NOIDA is that unless the payment of premium in entirety was made, no lease could be executed. Each side is blaming the other and the resultant effect is that the properties are lying undeveloped, no payment of premium is forthcoming and the public interest is not getting subserved. It was in this background that the Second Option was suggested so that the Petitioners are allowed to withdraw themselves from the arrangement and, at the same time, the interest of NOIDA is also well secured. Submissions were advanced on the basis of what weighed with this Court when the Judgment dated 05.07.2011 was passed, where this Court had given the facility of withdrawal from the arrangement to such of the allottees who were unwilling to continue. In that case, the concerned allottees were allowed to withdraw all the amounts including the stamp duty and registration charges along with interest @ 18% per annum. This aspect of the matter has been pressed into service on behalf of the Petitioners to submit that they were willing to forego the amounts indicated at Sl. Nos. 1, 5 and 6 of the illustrative chart quoted in the Order dated 17.09.2019 and as such the offer on part of NOIDA to refund the deposited amounts, after deducting 30% of the premium amount without payment of any interest, would not be fair, if the current prices of the lands in the area were to be taken into account. It was also submitted that the fault actually lies with NOIDA in not permitting the Petitioners to enter into financial accommodation, and thus no development could take place. These submissions are undoubtedly refuted by the learned counsel for NOIDA. The present status is nothing but a stalemate in which valuable assets of a public authority are locked completely. The public interest is neither getting subserved, nor is NOIDA getting instalments towards premium on time. This Court asked the learned counsel for NOIDA if any proceedings for resumption of land were undertaken, to which the response was in the negative. In this situation, the modalities suggested by the Second Option could yield results which would be favourable to both sides, and at the same time would take care of public interest as well. However, considering the price index which is available through the bid as described in the communication dated 21.10.2019, and keeping the interest of NOIDA in forefront, the modalities stated hereafter, will take care of public interest and competing claims of both sides. Before coming to the modalities, certain aspects need to be clarified including what amounts the Petitioners would be entitled to:-
A] From the illustrative chart, which was quoted in the Order dated 17.09.2019, the claims with regard to amounts mentioned against Sl. Nos.1, 5 and 6 were given up by the Petitioners.
B] As regards stamp duty, the stand of NOIDA is that the money was not paid to NOIDA but was paid to the State Government, and, therefore, NOIDA cannot be made to refund the amount towards stamp duty. Since the State Government is not party to the present matter, no direction in that behalf can be issued, and the matter shall have to be left to the State Government to consider whether there could be refund of stamp duty either in full, or in part.
C] Rest of the amounts comprise of two types of payments: a) towards instalments of premium; and b) towards payment of lease rent. [Paras 17-19][259-B-H; 260-A-F]
1.3 As regards lease rent, it is evident from the chart in the Order dated 17.09.2019 that an amount of Rs.44,84,000/- was paid by the Petitioner by way of lease rent on 06.03.2007 and one-time lease rent amounting to Rs.5,37,24,000/- was paid on 11.05.2007. One-time lease rent constitutes payment for the entirety of the period of lease covered by the document. Therefore, that component of the amount which represents the remainder period after the plot is sold in terms of this Order, ought not to be charged by NOIDA from the Petitioners. If the plot is re-sold, the new allottee, in any case, will be paying in respect of such remainder period under a fresh lease executed in his favour. The Petitioners shall, therefore, be entitled to refund of that component of amount of one-time lease rent which proportionately represents the remainder period after the plots in question are sold in terms of this Order. They shall not, however, be entitled to any interest on such component. The amount of interest on refund of the amounts paid towards premium that the Petitioners would be entitled to was subject matter of discussion on the earlier occasion. By order dated 17.09.2019 it was found that the appropriate rate of interest could be 7% per annum. The Petitioners would, therefore, be entitled to 7% annual interest on the amounts deposited by them towards premium from time to time. These amounts payable towards interest shall be calculated upto 30.04.2021 and shall stand frozen as on that date. [Paras 20, 21][260-G-H; 261-A-D]
1.4 In the light of the aforesaid discussion, the revised Second Option shall be as under:A) The concerned plots allotted to the Petitioners be sold by NOIDA by inviting E-bids or by auction after advertising the same as was done in the Scheme No.2019-20 (Commercial Builder Plot-I)
B) If the price quoted in such E-bid for each of the concerned plots is more than one and a half times of the price at which the arrangement with the Petitioners was arrived at; that is to say, more than Rs.1,05,000 per sq. metre, the Petitioners be returned the amounts deposited towards premium in each case. However, in case there is shortfall as against the rate of Rs.1,05,000/- per sq. metre, the shortfall shall be made good by the Petitioners and to that extent the amount payable to the Petitioners towards refund of amount paid towards premium shall stand reduced.
C) Insofar as refund of amounts towards remainder part of the lease rent and the component of interest payable to each of the Petitioners are concerned, said amounts shall be made over only if the price received by NOIDA in fresh sale of said plots in terms of this Order is in excess of Rs.1,05,000/- per sq. metre and only to the extent of excess beyond Rs.1,05,000/- per sq. metre. D) The Petitioners shall, thus, first be made over the component representing the amount paid by them towards premium in the manner as stated above. It is only if the rate fetched in such re-sale is greater than Rs.1,05,000/- per sq. metre that the Petitioners shall be paid amounts towards the remainder part of the lease rent and component of interest payable, as stated hereinabove; subject always to the requirement that these amounts are paid from the amounts representing the excess above the base price of Rs.1,05,000/- per sq. metre; which will ensure that NOIDA will always get a base rate of Rs.1,05,000/per sq. metre for the concerned plot in such re-sale. If the excess amount beyond Rs.1,05,000/- per sq. metre is not sufficient to absorb the amounts payable to the Petitioners towards component of lease rent and the interest; their entitlement shall stand reduced to that extent. It is also made clear that if the difference between the base price of Rs.1,05,000/- per sq. metre and the price fetched in the re-sale is greater than what would be payable towards component of lease rent and interest, NOIDA alone shall be entitled to such excess amount.
E] By way of illustration:(a) If the price quoted in E-bid or auction for a plot of 20,000 sq. metre is at the rate of Rs.1,00,000/- per sq. metre, the shortfall will be Rs.5,000/- x 20,000/- (extent of plot) = Rs.10 Crores. Thus, Rs.10 Crores shall be deducted from the deposited amount towards premium and the balance shall be refunded. Since the price quoted in E – bid or auction is less than Rs.1,05,000/- per sq. metre, nothing shall be payable towards remainder part of the lease rent and the component of interest.
(b) If the price quoted in E – bid or auction is at the rate of Rs.1,20,000/- per sq. metre, the amount to be received by NOIDA beyond the level of Rs.1,05,000/- per sq. metre for the same plot shall be Rs.15,000/- x 20,000/- (extent of plot) = Rs.30 Crores. As the price quoted is more than Rs.1,05,000/- per sq. metre:(i)
The entire amount deposited towards premium shall be refunded by NOIDA; and
(ii)
So much of the amount representing remainder part of the lease rent and component of interest which can be assorbed from and out of Rs.30 Crores shall be refunded but not beyond Rs.30 Crores.
(iii)
Thus, if the amount representing remainder part of the lease rent and the component of interest is greater than Rs.30 Crores, the entitlement shall be only upto Rs.30 Crores and not in excess thereof. However, if such amount payable towards these two heads is less than Rs.30 Crores, the amount shall be paid in full and the balance shall be retained by NOIDA.
(F) In the process, NOIDA will always get minimum of Rs.1,05,000/- per sq. metre in such re-sale.
G] After the concerned plots are sold in auction and appropriate documents are executed in favour of the new allottees, the concerned Petitioners shall be entitled to apply to the State Government for refund of amounts paid by them towards Stamp Duty. Such applications shall be considered by the State Government in accordance with the extant policy and in accordance with law.
The modality devised above will ensure that as against the promised rate of Rs.70,000 per sq. metre, which premium is also in arrears in the present cases, NOIDA shall get much more than that towards price of land and will also stand to gain considerably. Accordingly, in the process, not only will the public interest stand subserved, but the projects which have run into stalemate, will also come out of difficulties. The Second Option given in the Order dated 05.09.2019 shall stand modified to the aforesaid extent. Further directions issued. [Paras 22-24][261-D-H; 262-A-H; 263-A-H]
ITC Ltd. v. State of Uttar Pradesh and Ors.(2011) 7 SCC 493 : [2011] 7 SCR 66 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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