2013 INSC 0610
Khela Banerjee
v.
City Montessori School
(Supreme Court Of India)
HON'BLE MR. JUSTICE G.S. SINGHVI HON'BLE MR. JUSTICE SUDHANSU JYOTI
MUKHOPADHAYA
Review Petition (Civil) No. 2381-2382 Of 2012 In Civil Appeal No. 10180-10181 Of 2011 |
10-07-2013

1. These petitions have been filed for review of judgment dated 2.7.2012 passed in Civil
Appeal Nos. 10181 and 10180 of 2011 arising out of SLP(C) Nos. 13585 and 22369 of 2011.

2. For deciding the review petitions we may briefly notice the relevant facts.

2.1 Plot No. 92A Mahanagar, Faizabad Road, Lucknow was leased out by the Nazul Officer
to Shri Moni Mohan Banerjee in 1958 for a period of 30 years. After about 3 years, the Nazul
Officer granted lease of the adjoining plot bearing No.92A/C to Shri Banerjee for a period of
7 years for garden purposes.

2.2 In 1992, the State Government decided to convert leasehold nazul lands into freehold and
directed that the same be disposed of by auction or by inviting tenders.

2.3 On 24.11.1994, Lucknow Development Authority (LDA) invited bids for disposal of
plots including plot No.92A/C. The review petitioner gave bid for 4 plots including plot
No.92A/C, which were accepted by the competent authority. The review petitioner deposited
25% of the bid money, but did not pay the balance price in terms of stipulations contained in
the tender notice. Instead, the Manager of the review petitioner represented for permission to
pay the balance amount in six-monthly installments. LDA did not accept his request by
observing that such facility is not available in respect of open nazul land and garden leases.
Thereupon, the Manager of the review petitioner approached the Principal Secretary to the
Governor and succeeded in persuading him to send letter dated 3.4.1995 to the State
Government to instruct LDA to hand over possession of plots and accept the balance amount
in easy installments. LDA did not accede to the request made on behalf of the review
petitioner and cancelled the bids given by it.

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2.4 The Manager of the review petitioner then approached the Governor, who passed order
dated 17.12.1995 and directed that possession of the plots be handed over to the management
and the balance amount be accepted in ten six-monthly installments.

2.5 In compliance of the order passed by the Governor, the Vice-Chairman of LDA and the
Manager of the review petitioner executed agreement dated 12.1.1996, paragraphs 2, 3 and 4
of which read as under:

"2. Whereas the payment of the installments as indicated above will be paid by the Second
Party compulsorily by the prescribed time limit, failing which or in case of failure to deposit
two consecutive installments, this Deed of Agreement will become void and the First Party
shall be free to exercise its discretionary power to forfeit 1/4th of the total deposit and refund
the remaining amount and the First Party, if desired so, shall be free to enter the land in
question and shall have right to sell it in favour of any third party;

3. Whereas 25% of the total tender amount has been paid by the Second Party and for rest of
the 75% amount an agreement has been reached at between the parties. Possession of the land
in question is being delivered by way of the instant Agreement. Therefore, according to the
prevailing Greater Scheme (Mahayojana) of 2001, if the Second Party produces building
map, it will be considered for approval, holding thereby that the possession of the land is with
the Second Party, that the Nazul Land in question or building constructed on it can be
transferred only when the entire tender/auction amount and the total expenditure payable by
that time are cleared to the First Party. Sale Deed in respect of the Nazul Land will be
executed on the stamp paper by paying required stamp fees. Stamp fee and other expenses
will be borne by the Second Party;

4. Whereas the Second Party shall deposit the remaining aforementioned tender amount in 10
half yearly installments under relevant accounts titled "0075 legal general services-105 Sale
of Land & Property-03 lump-sum amount on converting Nazul land into freehold property"
by the prescribed date by treasury challan/ bank draft in main branch of the State Bank at
Lucknow."

2.6 Although the Manager of the review petitioner took possession of the plots, he did not
pay the balance price and entered into unnecessary correspondence with the functionaries of
LDA on the issues of demarcation of land and fixation of installments. This was an
unwarranted attempt to create evidence to show that functionaries of LDA were to blame for
the delay in payment of the balance price.

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2.7 After 13 years of execution of the agreement, the review petitioner filed Writ Petition
No.8514/2009 for issue of a direction to the respondents to accept the total amount of sale
consideration along with interest and for quashing all proceedings relating to conferment of
freehold rights on Smt. Khela Banerjee and her husband who were legal heirs of Shri Moni
Mohan Banerjee and who had also filed separate writ petition for regularization of plot in
their favour.

2.8 The Division Bench of the High Court rejected the review petitioner's prayer for issue of
a mandamus for enforcement of agreement dated 12.1.1996 by assigning the following
reasons:

"Though we accept and hold in terms of the legal submissions, as above, urged by Shri Shanti
Bhushan, Learned Senior Counsel, yet looking to the factual background of this case, we are
of the considered view that the impugned agreement entered into between the petitioner and
the official respondents on 12.01.1996 would not be enforceable in law after the lapse of a
period of 13 years only on the strength of depositing an amount of Rs.7,40,700/-, said to be
the one-fourth of the total consideration amount. It appears that the petitioner engaged itself
only in correspondence with the official respondents and in litigation, in stead of paying the
rest of the principal amount, leaving aside the interest amount, which could have been
determined later by the Authority concerned. Even no efforts were made to seek direction
from the Courts to accept the deposit of principal amount before the filing of this writ
petition. It also appears that the initial agreement was cancelled on 14.06.1995 for default in
depositing the rest, say, 3/4th of the consideration amount which had been demanded vide the
letters dated 21.02.1995 and 08.03.1995. However, taking a considerate view, on a written
request made by the petitioner school, the payment schedule was rearranged vide the
agreement dated 12.01.1996 but again no amount was deposited towards the payment of any
of the instalments. Thus, the petitioner school was not ready and willing to perform its
obligation under the agreement and in Law."

2.9 Notwithstanding the above conclusion, the High Court granted relief to the review
petitioner by relying upon the Right to Education Act, 2009 and directed the official
respondents to hand over possession of plot No.92A/C and execute the sale deed on payment
of market price at the current rate. This is evinced from the following portions of the order
passed by the High Court:

"Needless to say that this Court is not only the court of law but also a Court of equity and,
therefore, its decision must subserve the cause of justice and in an appropriate case it may
grant such relief to which the writ petitioner would be entitled to in law as well in equity.
Equity is not anti-law but a moral dimension of law. Rather it is a grace and conscience of
living law, and thus, a Court's discretion is to be exercised with circumspection within the
precincts of justice, equity and good conscience while keeping in view the given facts and
circumstances of the case.

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Thus, taking into consideration the facts that the Parliament has passed the Right to
Education Act, that the petitioner deposited 25% (Rs. 7,40,700/-) of the consideration amount
way back in 1995, and that he is ready to pay the present market price of the plot whereas no
such offer has come from private respondent nos. 4 and 5 during the course of hearing, we
think it expedient in the interest of justice to direct the settlement of property in question in
favour of the petitioner school upon making payment of cost price at the current market rate
prevailing in the locality.

In the premises set out hereinabove, we partly allow the writ petition with direction to official
respondents to hand over the possession of the plot in question and execute the sale deed after
completing necessary procedural formalities on payment of market price at current rate
prevailing in the locality where the plot is situated within a period of two months from the
date of receiving a copy of this order. In case, the petitioner fails to pay the market price at
current rate to be determined by the authority concerned, the official respondents would be at
liberty to invite fresh tender for the auction of the same at a price not less than the prevailing
market price so that the public exchequer is not made to suffer in any manner and the
property is able to fetch the maximum price."

2.10 The review petitioner challenged the order of the High Court in SLP(C) No.22369/2011,
which was converted in Civil Appeal No.10180/2011 and was disposed of on 2.7.2012 along
with Civil Appeal No.10181/2011 arising out of SLP(C) No.13585/2011 titled Smt. Khela
Banerjee and another v. City Montessori School and others. This Court also held that the
High Court was not entitled to invoke the Right to Education Act, 2009 for directing LDA to
allow the review petitioner to retain plot No. 92A/C. For the sake of reference, paragraphs 8
and 9 of judgment dated 2.7.2012 are reproduced below:

"8. It is significant to note that agreement dated 12.1.1996 contained an unequivocal
stipulation that if respondent No.1 fails to pay the installments of balance price within the
prescribed time limit then the agreement would become void and LDA will be free to sell the
plot to any other person.

Admittedly, respondent No.1 did not pay the instalments of balance price. Therefore, the
agreement stood automatically terminated and LDA became entitled to dispose of the plot by
adopting an appropriate mechanism consistent with the doctrine of equality enshrined in
Article 14 of the Constitution. It is rather intriguing as to why the functionaries of LDA
remained silent for more than 13 years and did not repossess the plot in question. This was
perhaps due to the pressure brought by the Manager of respondent No.1 from different
quarters, administrative as well as political.

9. The next question which requires consideration is whether the High Court could invoke the
provisions of the 2009 Act and direct LDA to hand over possession of plot No.92A/C to

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respondent No.1 and execute the sale deed on payment of market price at the current rate. In
the writ petition filed on behalf of respondent No.1 it was not claimed that in view of the
provisions contained in the 2009 Act, LDA is bound to allot plot No. 92A/C or allow
respondent No.1 to retain the plot for which its bid had been accepted by the competent
authority. Therefore, neither the appellants nor the official respondents had the opportunity to
controvert such claim and show that the provisions of the 2009 Act do not provide for
allotment/sale of land to the educational institutions. The High Court has made a passing
reference to the 2009 Act and granted relief to the respondent No.1 only on the ground that it
had already deposited 25% of the bid amount way back in 1995 and respondent Nos.4 and 5
had not made an offer to take the plot by paying the current market price. We have carefully
gone through the provisions of the 2009 Act and find that they do not even remotely deal
with the issue of allotment of land to the educational institutions. Therefore, the Division
Bench of the High Court was not at all justified in ordering transfer of the plot to respondent
No.1 and that too by ignoring its own finding that the said respondent was a ranked defaulter
and the writ petition was filed after a time gap of 13 years without any tangible explanation."

2.11 The appeal filed by Smt. Khela Banerjee and another was also dismissed by this Court.

3. Shri Shanti Bhushan, learned senior counsel appearing for the review petitioner invited our
attention to paragraph 7 of judgment dated 2.7.2012 and submitted that the observations
made by this Court that the review petitioner did not challenge the cancellation of bids by
availing appropriate legal remedy and that the Governor had passed order for restoration of
plot in favour of the review petitioner in violation of the Rules of Business are factually
incorrect. Learned senior counsel referred to letter dated 5.7.1995 sent by the Manager of the
review petitioner to Commissioner, Lucknow Division and order of the same date passed by
the latter to show that soon after cancellation of the bid, the review petitioner did represent its
cause before the higher authority and the action taken by the Vice Chairman of LDA to
cancel the bid was suspended by the Commissioner. Shri Shanti Bhushan also referred to
communication dated 18.7.1995 sent by Commissioner, Lucknow Division to the Chairman,
LDA and argued that this Court committed an error by non-suiting the review petitioner on
the ground that it had not availed legal remedy against the cancellation of bid. Learned senior
counsel also referred to the Presidential Proclamation issued under Article 356 of the
Constitution and submitted that with the imposition of President's Rule, the Governor
acquired all the powers exercisable by the State Government and, therefore, the order passed
by him for restoration of the plot cannot be characterized as arbitrary or illegal. In the end,
Shri Shanti Bhushan relied upon paragraph 67 of this Court's judgment in Akhil Bhartiya
Upbhokta Congress v. State of Madhya Pradesh and others (2011) 5 SCC 29 and submitted
that the Court may direct the State Government and the LDA to allow participation only of
the educational institutions in the auction to be held in view of the directions contained in
judgment dated 2.7.2012.

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4. Learned counsel for the State and LDA submitted that once the plot has been converted
into freehold and the same is required to be disposed of by auction, the eligibility to
participate in the auction cannot be confined to the educational institutions.

5. We have considered the respective arguments/submissions and carefully perused the
record. Though, this may appear to be a repetition of the facts mentioned in the judgment of
which review has been sought, we consider it necessary to mention that after depositing 25%
of the bid money, the review petitioner did not pay the balance amount within the stipulated
period despite the notices issued by LDA. The request made by the Manager of the review
petitioner for permission to pay the balance price in six monthly instalments was specifically
rejected by the Competent Authority and the bid was cancelled vide letter dated 14.6.1995.
The Manager of the review petitioner convinced the Governor of the State to pass order dated
17.12.1995 for restoration of possession and acceptance of balance price in ten six-monthly
installments with interest. As a sequel to that order, agreement dated 12.1.1996 was executed
between LDA and the review petitioner. Even then the review petitioner did not pay the
balance price in accordance with the agreement. Therefore, in terms of paragraph 2 of
agreement dated 12.1.1996, the same automatically became nullity.

6. While approving the view taken by the High Court that a mandamus cannot be issued for
enforcing agreement dated 12.1.1996, this Court did observe that the review petitioner had
not challenged the cancellation of bids by filing appropriate legal remedy and its Manager
succeeded in persuading the Governor of the State to pass an unusual order of handing over
possession of the plots and acceptance of the balance amount in six monthly installments.
The first portion of this observation cannot be considered as erroneous simply because the
Manager of the review petitioner had made representation to the Divisional Commissioner
and obtained stay order. The pleadings of the civil appeals, the review petitions and the
documents filed by the parties do not show that the review petitioner had challenged the
decision contained in letter dated 14.6.1995 by filing a suit or a writ petition. Therefore, this
Court rightly observed that the petitioner did not challenge the cancellation of bids by
availing appropriate legal remedy and the mere fact that some representation was made to the
Divisional Commissioner is not sufficient for accepting the review petitioner's assertion that
this Court committed an error by making the said observation. However, the second
observation about the competence of the Governor to pass order has to be treated as incorrect
because with the imposition of President's Rule, the Governor became entitled to exercise all
the powers of the State Government under the Rules of Business.

7. Notwithstanding the above-mentioned error, which crept in judgment dated 2.7.2012
because copy of the proclamation issued by the President under Article 356 of the
Constitution was not brought to the notice of the Court, we do not find any valid ground to
entertain the prayer for review of judgment dated 2.7.2012. In paragraph 8 this Court
unequivocally held that the agreement stood automatically terminated on account of the
review petitioner's failure to pay the installments of balance price in terms of agreement dated

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12.1.1996 and as a consequence thereof LDA became entitled to dispose of the plot by
adopting an appropriate mechanism consistent with Article 14 of the Constitution.

8. The last submission made by the learned senior counsel cannot be accepted for the simple
reason that the plot had already been converted into freehold and there is no justification for
directing LDA to invite bids only from the educational institutions. What has been observed
in paragraph 67 of the judgment in Akhil Bhartiya Upbhokta Congress v. State of Madhya
Pradesh (supra) is that the State can allot land to the institutions/organizations engaged in
educational, cultural, social or philanthropic activities otherwise than by way of auction but
the mechanism for disposal of the plot has to be consistent with the doctrine of equality
enshrined in Article 14. Those observations cannot be pressed into service for enabling the
review petitioner to steal a march over others who may participate in the auction and give
higher bids.

9. In the result, we hold that judgment dated 2.7.2012 does not suffer from any error apparent
which may justify its review. Consequently, the review petitions are dismissed.

10. As a sequel to dismissal of the review petitions, all pending applications are disposed of.

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