# Kci Ltd. Formely M/S Khemba Containers v. State of U.P.& Ors

- **Citation:** (2025) 12 ILRA 973
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-12-18
- **Case number:** Writ - C No. 22383 of 2025
- **Bench:** Ajit Kumar, Mrs. Swarupama Chaturvedi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/kci-ltd-formely-m-s-khemba-containers-v-state-of-u-p-ors-52950
- **Pages:** 10

## Text

12 All. M/S Kci Ltd. Formerly M/S Khemba Containers Vs. State of U.P. & Ors.
973
(2025) 12 ILRA 973
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.12.2025

BEFORE

THE HON'BLE AJIT KUMAR, J.
THE HON'BLE MRS. SWARUPAMA
CHATURVEDI, J.

Writ - C No. 22383 of 2025

M/S
Kci
Ltd.
Formely
M/S
Khemba
Containers ...Petitioner
Versus
State of U.P.& Ors. ...Respondents

ISSUE FOR CONSIDERATION
(i) Whether the respondent Authority could
retrospectively enhance the lease rent, in
absence of execution of a supplementary lease
deed, as expressly contemplated under the
lease deed, and justify such enhancement by
relying upon subsequent Board Resolutions,
including the 135th Board Resolution dated
15.06.2024, which was admittedly prospective in
nature;
(ii) Whether the petitioner, having commenced
production within the stipulated period and
remained a continuously functional industrial
unit, was entitled to early production incentive
rebate and waiver of penal/compound interest
in terms of the applicable scheme and office
order dated 05.12.2013; and
(iii)
Whether
the
revisional
order
dated
27.07.2023 passed by the State Government
under Section 41(3) of the U.P. Urban Planning
and Development Act, 1973, having attained
finality, was binding upon the respondent
Authority and required to be implemented in its
letter and spirit, and whether the impugned
order and consequential demands constituted
an impermissible attempt to circumvent or
nullify the said revisional order.

HEADNOTE
Constitution of India - Art. 226 - U.P. Urban
Planning and Development Act, 1973 - S. 41(3)
- U.P. Industrial Development Act, 1976 - Lease
deed dated 26.02.2002 - Enhancement of lease
rent - Condition of execution of supplementary
lease
deed
-
Retrospective
enhancement
without supplementary deed - Validity -
Subsequent Board Resolutions - Prospective
operation - Whether can override concluded
contract - Early production incentive rebate -
Waiver of penal/compound interest - Office
order
dated
05.12.2013
-
Inordinate
administrative delay - Legitimate expectation -
Promissory estoppel - Binding nature of
revisional order - Administrative discipline -
Colourable exercise of power - Attempt to
nullify
revisional
order
-
Correctness
of
impugned demand orders and consequential
notices.
HELD:
Writ petition was filed challenging the order
dated
12.12.2024
raising
a
demand
of
₹5,28,85,639/- by retrospectively enhancing the
lease rent and levying penal/compound interest,
and rejecting the petitioner's claim for early
production incentive and waiver of interest.
Clause I of the lease deed, contemplates
enhancement of lease rent after every ten
years,
conditioned
upon
execution
of
a
supplementary lease deed. Admittedly, no such
supplementary lease deed was ever executed
between the parties. In the absence of
fulfilment of the contractual pre-condition,
unilateral enhancement of lease rent by the
respondent Authority, that too with retrospective
effect, was contrary to the express terms of the
lease and could not be sustained in law.
Contention of the Authority that execution of a
supplementary lease deed was merely a
consequential or ministerial act was not
accepted, as contractual stipulations governing
financial liabilities are required to be strictly
construed
and
scrupulously
adhered
to,
particularly by a statutory authority. Reliance
placed
by
the
respondent
Authority
on
subsequent Board Resolutions, including the
135th Board Resolution dated 15.06.2024, to
justify such enhancement was held to be
unacceptable,
the
said
resolution
being
prospective in nature. A Board Resolution,
howsoever authoritative, could not override or
rewrite the terms of a concluded contract, nor
could it be employed to retrospectively impose
financial burdens upon an allottee.
It was further held that the petitioner had
commenced
production
within
the
time
prescribed under the lease deed and had
remained
continuously
operational.
The
974 INDIAN LAW REPORTS ALLAHABAD SERIES
application for early production incentive rebate
made in March 2003 remained undecided for
over two decades, and such inordinate delay on
the part of the Authority could not operate to
the prejudice of the petitioner. The benefit, once
accrued, could not be denied by subsequently
introducing conditions not contemplated under
the lease deed or the promotional scheme.
Petitioner having deposited the principal lease
rent dues along with advance lease rent in
accordance with the office order became
entitled to waiver of penal/compound interest,
and the subsequent levy of penal/compound
interest despite compliance with the conditions
of the waiver scheme was arbitrary and
unsustainable.
The revisional order dated 27.07.2023, passed
by the State Government under Section 41(3) of
the U.P. Urban Planning and Development
Act,
1973, granted
full
relief
to
the
petitioner
and
directed
the
second
respondent to recalculate the dues payable
by the petitioner. Revisional order dated
27.07.2023 having attained finality, was
binding upon the respondent Authority and
required to be implemented. The respondent
Authority could not question the correctness
of the revisional order by passing a fresh
order on the same issues, nor could it rely
upon subsequent Board Resolutions to dilute
or
nullify
the
effect
of
the
revisional
directions. Once the revisional authority
exercised its statutory jurisdiction and granted
relief, the respondent Authority was functus
officio
insofar
as
those
issues
were
concerned.
The
impugned
order
dated
12.12.2024
constituted
an
impermissible
attempt to circumvent and nullify the binding
revisional order and amounted to a colourable
exercise of power, reflecting non-adherence to
the principles of administrative discipline and
rule of law.[Paras 17, 19-26] (E-5)

CASE LAW CITED
Motilal Padampat Sugar Mills Co. Ltd. v. State of
U.P., (1979) 2 SCC 409;
State of Punjab v. Nestle India Ltd., (2004) 6
SCC 465;
Tata
Chemicals
Ltd.
v.
Commissioner
of
Customs, (2015) 11 SCC 628;
Union of India v. Kamlakshi Finance Corporation
Ltd., 1992 Supp (1) SCC 648.
List of Acts
Constitution of India;
U.P. Urban Planning and Development Act,
1973;
U.P. Industrial Development Act, 1976.

List of Keyword
Supplementary
lease
deed;
Retrospective
enhancement; Board Resolution; Prospective
operation; Concluded contract; Early production
incentive;
Waiver
of
interest;
Legitimate
expectation;
Promissory
estoppel;
Binding
revisional order; Functus officio; Administrative
discipline; Colourable exercise of power.

CASE ARISING FROM
Challenge to the order dated 12.12.2024
passed by the Greater Noida Industrial
Development Authority raising demand of
Rs. 5,28,85,639/-, consequential notice
dated
23.12.2024,
and
order
dated
15.05.2025 rejecting the petitioner's claim
for early production incentive.

Appearances for Parties
Advs For Petitioner: Tarun Agarwal, Sr. Adv.;
Prashant Mishra
Advs For Respondents: Anjali Upadhyaya;
C.S.C.; Shivam Yadav

(Delivered by Hon'ble Mrs. Swarupama
Charurvedi, J.)

1. Heard Sri Tarun Agarwal, learned
Senior Advocate assisted by Sri Prashant
Mishra, learned counsel for the petitioner,
Sri Shivam Yadav, learned counsel for the
respondents no. 2 to 4 and Sri Devesh
Vikram, learned Additional Chief Standing
Counsel for the State respondents.

2. By means of this petition filed
under Article 226 of the Constitution,
petitioner has prayed for quashing of the
order
dated
12.12.2024
passed
by
respondent no. 3 raising a demand of Rs.
5,28,85,639/- and order dated 15.05.2025
whereby the petitioner?s request for grant
of early production incentive has been
12 All. M/S Kci Ltd. Formerly M/S Khemba Containers Vs. State of U.P. & Ors.
975
rejected as well as the consequential final
notice before cancellation of allotment
dated 23.12.2024. Further it is prayed that a
direction be issued to the respondents to
recalculate the lease rent dues according to
the directions contained in the revisional
order dated 27.07.2023 as well as grant the
petitioner the benefit of early production
incentive rebate of Rs. 9.02 lacs as applied
on 27.03.2003. Also a direction to
respondents
be
issued
to
grant
the
petitioner the benefit of waiver of past
interest in accordance with the office order
dated 05.12.2013.

3. Brief facts of the case are that
the petitioner is a company engaged in the
manufacture of corrugated boxes, which
got allotted Industrial Plot No. 11-B,
Udyog Vihar, Greater Noida, by final
allotment
letter
dated
09.02.2001.
Thereafter, a lease deed was executed on
26.02.2002 for a period of ninety years,
providing for an annual lease rent of Rs.
2,96,907/- for the first ten years. The lease
deed
specifically
stipulated
that
any
enhancement of rent could be effected only
every ten years and strictly through
execution of a supplementary lease deed.

4.
The
petitioner
commenced
construction strictly in accordance with
Clause 16 of the lease deed. After obtaining
due approval of the building plan from the
Lessor, the Lessee was required to
commence construction on the demised
premises within six months from the date
of possession and to make the industrial
unit operational within a period of thirtysix months, or within such extended time as
may be permitted by the Lessor. The
petitioner duly complied with the said
stipulations,
commenced
construction
within the prescribed period, made the unit
operational on 11.11.2002, and has since
continuously maintained its operations,
while duly fulfilling all statutory and
contractual obligations.

5.
Learned
counsel
for
the
petitioner submits that the petitioner was
fulfilling all conditions to receive the early
production benefit under the promotional
scheme, and, therefore, applied for early
production incentive rebate of Rs. 9.02
lakhs in March 2003, being fully eligible
under the applicable scheme. However, the
Authority neither decided the application
nor raised objections for over two decades
and then got rejected by the means of
impugned order dated 12.12.2024.

6. Learned counsel further submits
that the rebate amount was almost equal to
the three years of lease rent about which
the petitioner could not get response from
the respondents. Due to oversight and lack
of regular follow up by employees of the
petitioner and failure of authority to update
records, lease rent for certain years got
delayed, which was later regularized by
depositing all principal amounts along with
advance lease rent to avail waiver of
interest as per the Authority?s office order
dated
05.12.2013.
Despite
this,
the
Authority retrospectively enhanced the
annual lease rent without executing a
supplementary lease deed and raised
exorbitant
demands
along
with
penal/compound interest.

7. Aggrieved by this, the petitioner
filed writ petition being Writ C No. 11459
of 2021, before this court seeking quashing
of letter dated 1st February, 2021, by which
the respondents have raised a demand of
the amount outstanding against dues
payable by the petitioner in connection
with allotment of plot no.11B, Udyog
Vihar, Ecotech-II, Greater Noida. The
976 INDIAN LAW REPORTS ALLAHABAD SERIES
petitioner alleged that he was entitled to
benefits which ought to have been adjusted
against the demand raised. He has also
questioned the levy of interest at the rate of
20% as being violative of Section 13 of the
Act of 1976 as also being un-conscionable
and void under Section 23 of the Contract
Act, 1872. After hearing both parties, the
petition was disposed of by order of this
court dated 02.08.2021, while directing the
Chief Executive Officer, Greater Noida
Industrial Development Authority, Greater
Noida, Gautam Budh Nagar to take a
decision on the representation of the
petitioner dated 8th February, 2021 against
the demand raised from the petitioner,
preferably, within a period of six weeks
with the further direction that till a decision
is taken on the representation of the
petitioner as directed above, the allotment
of the petitioner shall not be cancelled. In
compliance of this order, the order dated
26.02.2023
was
passed
by
authority
rejecting all claims of the petitioner.

8. The petitioner challenged the
order dated 26.02.2023 in revision petition
number 4433/appeal 40/23 under Sec 41(3)
of Uttar Pradesh Urban Planning and
Development Act 1973 read with Sec 12 of
Uttar Pradesh Industrial Development Act
1976 and after both parties, the State
Government, in revision order dated
27.07.2023,
granted
full
relief
to
petitioner by holding that the petitioner is
entitled to relief sought. However, instead
of complying the order, the Authority
passed a fresh impugned order dated
12.12.2024 raising a demand of Rs.5.28
crores, relying upon a subsequent Board
Resolution dated 15.06.2024, which is
prospective
in
nature.
Consequential
notices
threatening
cancellation
of
allotment and refusal to issue mortgage
NOC were also issued, compelling the
petitioner to deposit large sum of amount
under protest.

9. That the petitioner again
approached this Court while filing writ
petition
with
prayer
to
direct
the
respondent authority to comply with the
Order No. 4433/Appeal 40/23 dated
27.7.2023 passed by the respondent no. 1
and recalculate the dues (if any) payable
by the petitioner. It was observed that the
counsel for the petitioner submitted there
that the first respondent has already
decided claim of the petitioner Company
under Section 41(3) of the Act, 1973 read
with Section 12 of the Act, 1976 and
directed
the
second
respondent
to
recalculate the dues payable by the
petitioner vide order dated 27.7.2023 but
till date the said order has not been
complied by the second respondent. Such
situation compelled the petitioner to
approach
this
Court.
After
hearing
counsel of all parties, this court in its
order dated 22.05.2024, observed that
with the consent of the parties, the writ
petition is disposed of with the direction
to the second respondent to take a final
call in the matter in the light of the order
dated 27.7.2023 passed by the first
respondent, as expeditiously as possible
and preferably within six weeks.

10. Learned Senior Counsel for the
petitioner submits that in pursuance of the
directions issued by this court, respondent
no.3 has passed the impugned order dated
12.12.2024. He further submits that the
Authority has passed the impugned order
against law and acted in clear violation of
binding order and directions in the revision
order dated 27.07.2023, which attained
finality and directions were required to be
implemented under Section 41 of the U.P.
Urban Planning and Development Act,
12 All. M/S Kci Ltd. Formerly M/S Khemba Containers Vs. State of U.P. & Ors.
977
1973. Learned senior counsel further
submits that 135th Board Resolution dated
15.06.2024 is expressly prospective and
cannot be applied retrospectively to the
petitioner?s case. Hence, the petitioner is
entitled to early production incentive rebate
of Rs. 9.02 lakhs, which was neither
rejected nor adjudicated for over 22 years,
and cannot now be denied by importing
new conditions.

11. He further submits that the
petitioner fulfilled conditions for waiver of
past interest under the office order dated
05.12.2013 by depositing advance lease
rent and therefore denial of such benefit is
arbitrary. The demand towards functional
certificate and levy of penal/compound
interest, are not justified in law. Learned
counsel
contends
that
the
impugned
demand and other notices are arbitrary,
disproportionate,
and
against
the
established principles of law.

12. Per contra, Learned counsel for
the Greater Noida Industrial Development
Authority (in short ?GNIDA?) submits that
under Clause 1 of the original lease deed
dated 26.02.2002, enhancement of lease
rent after every 10 years (subject to a cap of
50% of the then prevailing lease rent) is a
clear and mandatory stipulation. Execution
of a supplementary lease deed was
contemplated only as a consequential act
following the demand and determination of
enhanced lease rent. Since the petitioner
contested the enhancement and delayed
payment of lease rent for nearly 13 years
without
interest
or
penal/compound
interest, the supplementary lease deed
could not be executed. Subsequently, to
remove ambiguity and streamline the
process, GNIDA in its 135th Board
Meeting held on 15.06.2024 consciously
abolished the requirement of executing a
supplementary lease deed for enhancement
of lease rent, a decision reiterated through
office order dated 31.07.2024.

13. It is further submitted that the
observations
made
by
the
State
Government in its order dated 27.07.2023,
particularly in paragraph 4, proceeded on
an incorrect interpretation of the lease deed.
The Board of GNIDA, exercising its
statutory
and
contractual
authority,
considered the matter in its 134th, 135th,
and 138th Board Meetings and resolved
that enhancement of lease rent at 1.50%
after every 10 years is consistent with the
lease deed and uniformly applicable to
other industrial units. The Board decisions,
taken with participation of State nominees,
validly justify the enhancement and negate
the petitioner?s claim that absence of a
supplementary
lease
deed
bars
such
enhancement.

14. Lastly, the petitioner?s claims
for early production incentive and waiver
of interest are untenable. The petitioner
admittedly failed to obtain a functional
certificate and defaulted in timely payment
of lease rent, paying only the principal
amount after a delay of 13 years without
interest
or
penal/compound
interest,
contrary to the lease deed. Such defaults
dis-entitle
the
petitioner
from
any
incentive, rebate, or equitable relief.
Accordingly, the impugned demands and
decisions of GNIDA are legal, reasonable,
and in consonance with the lease deed and
Board resolutions.

15. In rejoinder argument, counsel
for the petitioner rebutted the submissions
made by the learned counsel for the
respondents and further submits that the
lease
deed
governing
parties
clearly
mandates that any enhancement of rent can
978 INDIAN LAW REPORTS ALLAHABAD SERIES
be effected only through execution of a
supplementary lease deed and admittedly,
no such supplementary lease deed was ever
executed, rendering any unilateral and
retrospective enhancement of rent by the
respondent
authority,
illegal
and
unsustainable. He also reiterate that the
revisional order dated 27.07.2023 passed
by the State Government under Section
41(1) of the U.P. Urban Planning and
Development Act, 1973 is binding upon the
respondent
authority,
having
attained
finality and subsequent board resolutions
and impugned orders passed by the
respondents, which seek to nullify or
bypass the said revisional order, are void
ab initio, and cannot justify retrospective
enhancement of rent or deviation from
contractual and statutory obligations.

16.
Learned
counsel
for
the
petitioner also submits that the entity has
been a functional industrial unit since year
2002 and is entitled to the benefits of the
early production incentive scheme because
the lease deed does not prescribe issuance
of a functional certificate as a condition
precedent for availing any such benefits,
and denial thereof on technical grounds is
totally arbitrary and illegal. He further
submits that the petitioner deposited
advance rent in accordance with the office
order dated 05.12.2013, which provides for
waiver of penal/compound interest, and
therefore no interest can now be levied.
Any excess amount paid pursuant to the
illegal enhancement of rent is liable to be
adjusted. Hence, the impugned order
deserves to be quashed.

17. Upon thoughtful consideration
of the rival submissions and perusal of the
material on record, the principal questions
that arise for consideration are, whether the
respondent Authority could enhance the
lease rent retrospectively in the absence of
execution of a supplementary lease deed
dated
26.02.2002,
and
whether
such
enhancement could be justified by relying
upon
subsequent
Board
Resolutions,
including the 135th Board Resolution dated
15.06.2024,
which
is
admittedly
prospective
in
nature.
Other
related
questions that arise are whether the
petitioner, having commenced production
within the stipulated period and remained a
continuously functional industrial unit, is
entitled to early production incentive rebate
and waiver of penal/compound interest in
terms of the applicable scheme. We also
consider it necessary to examine that
whether
the
revisional
order
dated
27.07.2023
passed
by
the
State
Government under Section 41(3) of the
U.P. Urban Planning and Development
Act, 1973, having attained finality, was
binding upon the respondent Authority and
mandatorily required to be implemented in
its letter and spirit, and whether the
impugned order dated 12.12.2024 and
consequential
demands
constitute
an
impermissible attempt to circumvent or
nullify the said revisional order.

18. We first proceed to examine
whether the respondent Authority was
legally justified in enhancing the lease rent
retrospectively
in
the
absence
of
execution of a supplementary lease deed
as expressly contemplated under the lease
deed dated 26.02.2002. It is a matter of
fact that the lease deed constitutes a
binding contract between the parties. The
counsel for the petitioner heavily relied
upon conditions agreed in the lease deed
to contend that it is not permissible to
increase lease rent for ten years as per
condition of the lease deed. For ready
reference relevant lines of clause I of the
lease deed are reproduced below:
12 All. M/S Kci Ltd. Formerly M/S Khemba Containers Vs. State of U.P. & Ors.
979
 "..and which said plot is more
clearly delineated and shown in the
attached plan there in marked in red
(hereinafter referred to as "the demised
premises") with their appurtenances to the
Lessee to the term of 90 years commencing
from the date of execution of this lease
deed except and always reserving to the
Lessor full rights and title to all mines and
minerals in and under the demised
premises or any part there of, Yielding and
paying therefor yearly lease rent in
advance during the said term unto the
lessor on the 26th day of Feb in each year
at the rate of 2.5% of the total premium
during the first ten years. The lessee shall
pay lease rent unto the lessor at its office or
as otherwise directed lease rent in advance
on yearly basis. The lease rent would be
Rs.2,96,907.00/- (Rs. Two lakhs ninety six
thousands
nine
hundred
seven
only
annually for the first 10 years changeable
from the date of execution of the lease deed
and would be payable within 10 days from
the date of execution of the lease deed,
without waiting for any demand notice or
reminder therefor. The lease rent may be
enhanced after every 10 years from the
date of execution of the. lease, deed by an
amount not exceeding 50% of the annual
lease rent payable at the time of such
enhancement
and
in
such
case
a
supplementary deed will be executed by
both the parties. In case of default in
payment of lease rent interest @ 20% per
annum compounded every half yearly
would be chargeable for the delayed
period. When lease rent will be revised a
supplementary deed will be executed."

19. From bare reading it appears
that
the
lease
deed
contemplates
enhancement of lease rent after every ten
years and such enhancement is expressly
conditioned
upon
execution
of
a
supplementary lease deed. In the facts of
the
case,
admittedly,
no
such
supplementary
lease
deed
was
ever
executed between the parties. In the
absence of fulfillment of this contractual
pre-condition, the unilateral enhancement
of lease rent by the respondent Authority,
that too with retrospective effect, is clearly
contrary to the express terms of the lease
and cannot be sustained in law. The
contention of the Authority that execution
of a supplementary lease deed was merely a
consequential or ministerial act cannot be
accepted,
as
contractual
stipulations
governing financial liabilities must be
strictly construed and scrupulously adhered
to, particularly by a statutory authority.

20. When the petitioner invested to
build the unit, made it functional having the
promise in existence as per lease deed, the
legitimate expectation is to get the outcome
as could be foreseen in terms of a specified
amount of rent and the rebate, denying that
cannot be justified in the eyes of law. The
Supreme Court, in Motilal Padampat
Sugar Mills Co. Ltd. v. State of U.P.,
(1979) 2 SCC 409 has held that:

 "19. When we turn to the Indian
law on the subject it is heartening to find
that in India not only has the doctrine of
promissory estoppel been adopted in its
fullness but it has been recognized as
affording a cause of action to the person to
whom
the
promise
is
made.
The
requirement of consideration has not been
allowed to stand in the way of enforcement
of
such
promise.
The
doctrine
of
promissory estoppel has also been applied
against the Government and the defence
based on executive necessity has been
categorically negatived. It is remarkable
that as far back as 1880, long before the
doctrine of promissory estoppel was
980 INDIAN LAW REPORTS ALLAHABAD SERIES
formulated by Denning, J., in England, a
Division Bench of two English Judges in
the Calcutta High Court applied the
doctrine of promissory estoppel and
recognised a cause of action founded upon
it in the Ganges Manufacturing Co. v.
Sourujmull [(1880) ILR 5 Cal 669 : 5 CLR
533] . The doctrine of promissory estoppel
was also applied against the Government
in a case subsequently decided by the
Bombay
High
Court
in
Municipal
Corporation of Bombay v. Secretary of
State [(1905) ILR 29 Bom 580 : 7 Bom LR
27]."

 While
referring
various
judgements mentioned in the paragraph, the
Supreme Court has further held that:

 "24. This Court finally, after
referring to the decision in the Ganges
Manufacturing
Co.
v.
Sourujmull,
Municipal Corporation of the City of
Bombay v. Secretary of State for India and
Collector
of
Bombay
v.
Municipal
Corporation of the City of Bombay summed
up the position as follows:

 "Under our jurisprudence the
Government is not exempt from liability to
carry out the representation made by it as
to its future conduct and it cannot on some
undefined and undisclosed ground of
necessity or expediency fail to carry out the
promise solemnly made by it, nor claim to
be the Judge of its own obligation to the
citizen on an ex parte appraisement of the
circumstances in which the obligation has
arisen.?"

 The law may, therefore, now be
taken to be settled as a result of this
decision, that where the Government makes
a promise knowing or intending that it
would be acted on by the promisee and, in
fact, the promisee, acting in reliance on it,
alters his position, the Government would
be held bound by the promise and the
promise would be enforceable against the
Government
at
the
instance
of
the
promisee, notwithstanding that there is no
consideration for the promise and the
promise is not recorded in the form of a
formal contract as required by Article 299
of the Constitution. It is elementary that in
a republic governed by the rule of law, no
one, howsoever high or low, is above the
law. Everyone is subject to the law as fully
and completely as any other and the
Government is no exception. It is indeed
the pride of constitutional democracy and
rule of law that the Government stands on
the same footing as a private individual so
far as the obligation of the law is
concerned : the former is equally bound as
the latter. It is indeed difficult to see on
what
principle
can
a
Government,
committed to the rule of law, claim
immunity from the doctrine of promissory
estoppel."

21. To deny the petitioner from his
legitimate benefits, the reliance placed by
the respondent Authority on subsequent
Board Resolutions, including the 135th
Board Resolution dated 15.06.2024, to
justify
such
enhancement
cannot
be
acceptable.
The
said
resolution
is
admittedly prospective in nature and cannot
be applied retrospectively to alter rights
and
obligations
that
had
already
crystallized under the lease deed. A Board
Resolution,
howsoever
authoritative,
cannot override or rewrite the terms of a
concluded contract, nor can it be employed
to retrospectively impose financial burdens
upon an allottee. Acceptance of such a
proposition would amount to permitting
unilateral alteration of contractual terms by
an authority, which is impermissible in law.
12 All. M/S Kci Ltd. Formerly M/S Khemba Containers Vs. State of U.P. & Ors.
981
22. The next issue that arises for
consideration is whether the petitioner,
having commenced production within the
stipulated
period
and
remained
a
continuously functional industrial unit, is
entitled to early production incentive rebate
and waiver of penal/compound interest in
terms of the applicable scheme and office
order dated 05.12.2013. In this regard the
law is settled by the Apex Court in number
of judgements, which makes it clear that
benefits once accrued under a policy or
scheme
cannot
be
denied
due
to
administrative inaction or delay. In State of
Punjab v. Nestle India Ltd. (2004) 6 SCC
465, the Supreme Court held that legitimate
expectations arising from a policy decision
cannot be frustrated by arbitrary State
action. Similarly, it was held in Tata
Chemicals Ltd. v. Commissioner of
Customs (2015) 11 SCC 628, that the levy
of interest or penal charges contrary to the
terms of the governing scheme or express
waiver orders is impermissible.

23. After analysing facts of the
case and perusal of records, it is clearly
established that the petitioner commenced
production within the time prescribed under
the lease deed and has kept it operational.
The petitioner applied for early production
incentive rebate in March 2003, which
remained undecided for over two decades.
Such inordinate delay on the part of the
Authority cannot operate to the prejudice of
the petitioner. The benefit, once accrued,
could not be denied by subsequently
introducing conditions not contemplated
under the lease deed or the promotional
scheme. Similarly, the petitioner having
deposited the principal lease rent dues
along
with
advance
lease
rent
in
accordance with the office order dated
05.12.2013, became entitled to waiver of
penal/compound interest. The subsequent
levy of penal/compound interest despite
compliance with the conditions of the
waiver
scheme
is
arbitrary
and
unsustainable.

24. After thoughtful consideration,
we find merit in the submission of the
learned counsel of the petitioner that the
revisional order dated 27.07.2023 passed
by the State Government under Section
41(3) of the U.P. Urban Planning and
Development Act, 1973, having attained
finality, was binding upon the respondent
Authority and required to be implemented.

25.
In
Union
of
India
v.
Kamlakshi Finance Corporation Ltd.,
1992 Supp (1) SCC 648, the Supreme
Court has analysed similar issue and has
held that orders passed by higher statutory
authorities are binding on subordinate
authorities and must be implemented in
letter and spirit, and that any attempt to
bypass or dilute such orders strikes at the
very
foundation
of
administrative
discipline. A subordinate authority cannot
sit in appeal over a binding order under the
guise
of
fresh
decision-making.
Supreme Court observed in Paragraph 7
that:

 "7..The High Court has, in our
view, rightly criticised this conduct of the
Assistant Collectors and the harassment to
the assessee caused by the failure of these
officers to give effect to the orders of
authorities higher to them in the appellate
hierarchy. It cannot be too vehemently
emphasised that it is of utmost importance
that, in disposing of the quasi-judicial
issues before them, revenue officers are
bound by the decisions of the appellate
authorities. The order of the Appellate
Collector is binding on the Assistant
Collectors working within his jurisdiction
982 INDIAN LAW REPORTS ALLAHABAD SERIES
and the order of the Tribunal is binding
upon the Assistant Collectors and the
Appellate Collectors who function under
the jurisdiction of the Tribunal. The
principles of judicial discipline require that
the
orders
of
the
higher
appellate
authorities should be followed unreservedly
by the subordinate authorities. The mere
fact that the order of the appellate
authority is not ?acceptable? to the
department " in itself an objectionable
phrase ? and is the subject-matter of an
appeal can furnish no ground for not
following it unless its operation has been
suspended by a competent court. If this
healthy rule is not followed, the result will
only be undue harassment to assessees and
chaos in administration of tax laws."

26. Applying above principle in facts
of this case, we are of the view that the
respondent
Authority
could
not
have
questioned the correctness of the revisional
order by passing a fresh order on the same
issues, nor could it have relied upon
subsequent Board Resolutions to dilute or
nullify the effect of the revisional directions.
Once the revisional authority exercised its
statutory jurisdiction and granted relief to the
petitioner, the respondent Authority was
functus officio insofar as those issues were
concerned. The impugned order dated
12.12.2024, passed in purported compliance
of
earlier
judicial
directions,
in
fact
constitutes an impermissible attempt to
circumvent and nullify the binding revisional
order dated 27.07.2023. Raising fresh
demands on grounds already considered and
rejected in revision order, amounts to
colourable exercise of power and reflects
non-adherence
to
the
principles
of
administrative discipline and rule of law.

27. In view of the foregoing
discussion
and
conclusions
recorded
hereinabove, the impugned orders dated
12.12.2024, 23.12.2024, and 15.05.2025
are hereby quashed. The respondent
Authority is directed to implement the
revisional order dated 27.07.2023 strictly in
its letter and spirit and to recalculate the
dues, if any, payable by the petitioner in
accordance therewith and subject to the
observations made in this judgment. The
respondent Authority is further directed to
extend to the petitioner the benefit of early
production incentive rebate as well as
waiver of penal/compound interest in terms
of the applicable scheme and office order
dated 05.12.2013. Any excess amount
deposited by the petitioner pursuant to the
impugned demands shall be adjusted or
refunded, as the case may be, within a
period of eight weeks from the date of
receipt of a certified copy of this judgment.
The writ petition is allowed in the aforesaid
terms. There shall be no order as to costs.
----------
(2025) 12 ILRA 982
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.12.2025

BEFORE

THE HON'BLE PRAKASH PADIA, J.

Writ - C No. 26271 of 2025

Vision Town Planners Pvt. Ltd. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Issue for Consideration
The matter involves a legal challenge against
Noida Development Authority regarding the
demand for Change in Constitution (CIC)
Charges and the refusal to grant a zero period
due to the authority's failure to provide a
separate possession certificate after the subdivision of a commercial plot.

Headnotes