# M/S Lotus Green Constructions Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2025) 2 ILRA 255
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-02-24
- **Case number:** Writ C No. 15604 of 2021
- **Bench:** Mahesh Chandra Tripathi, Prashant Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-lotus-green-constructions-pvt-ltd-v-state-of-u-p-ors-53119
- **Pages:** 58

## Headnote

A. Corporate Law - Lifting the Corporate
Veil - Can Holding company be held liable
for the acts and omissions of its subsidiary
? - Liability of the original allottee with
regard to its subsidiaries - It is a settled
legal position that a subsidiary is a
separate legal entity and is different from
its holding/parent company. However, the
holding companies and its subsidiary
cannot take a shelter under the legal
position that they are two distinct legal
entities when, the company is the creature
of the group, formed in an attempt to
avoid recognition by the eye of law,
merely to mask the real entities and to
cover the business which is actually being
carried out by the same set of people.
Then the Court can always lift the
corporate veil, and hold the holding
company liable for the acts and omissions
of
its
subsidiary.
A
Consortium
Member/Original
Allottee
(parent
company) can be held responsible for the
wrong done by its subsidiary companies,
especially when the same is done, as a
part of a sham transaction, just to avoid
the liability of the parent company. In the
instant case as a part of the greater
256 INDIAN LAW REPORTS ALLAHABAD SERIES
design all the liability/ responsibility was
transferred
to
a
100%
subsidiary
company which was never completed and
all the profit / cream of the project was
subdivided into smaller companies and
was, sold off at a very high premium. The
entire façade of subsidiary companies
were created only to defraud the other
stake holders. Hence, it will be not wrong
to fasten the liabilities of the subsidiary
companies onto the parent company.
(Para 123, 124)

B. Civil Law - Constitution of India,1950 -
Article 226 - Commercial Contract - Issue:
Whether
commercial
contracts,
which
stem from a Government Policy decision
of Noida and the State Government, are
insulated from judicial review? The issue
is no longer res integra, and there is no
absolute bar, even in matters concerning
contracts, on the maintainability of writ
petitions. When contractual power is
exercised for public purposes, the State
and
its
instrumentalities
bear
the
responsibility
to
act
fairly,
without
arbitrariness
or
caprice.
In
such
situations,
courts
are
justified
in
intervening through judicial review to
determine whether the State has adhered
to the principles embodied in Article 14 of
the Constitution of India, which mandates
fairness and non-arbitrariness in State
actions. The involvement of a public
authority
necessitates
cognizance
to
ensure that the scheme or agreement
upholds constitutional principles. In such
scenarios, it becomes the solemn duty of
the
judiciary,
entrusted
under
the
Constitution as an independent arbiter, to
intervene and protect the interests of the
public at large. If a governmental action
disproportionately favours a private entity
at the expense of public welfare, it is
liable to be struck down as invalid. Under
Article 226(1), the High Courts have the
po

## Text

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2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
255
above, both the Act, 2002 as well
as the Reserve Bank of India Act are
legislations made in exercise of authority
vested in the Parliament under Entry 44 and
Entry 38, respectively, of List-I of the
Seventh Schedule of the Constitution of
India.

60. The circular of the Reserve
Bank of India having statutory force and in
view of the deep and pervasive control of
the Reserve Bank of India on cooperative
banks, given the provisions of the B.R. Act,
even if the circular incidently trenches on
the provisions of the Act, 2002, (in the
present case the registration of the
amendments to the by-laws), the same is
permissible
keeping
in
view
the
observations of the Supreme Court in the
case of Pandurang Ganpati Chaugule
(supra).

61. Under the circumstances, it is
open for the petitioner-bank to move for
registration of the amendments to its bylaws as Uni-State Cooperative Bank after
due prior approval (No Objection) of the
Reserve Bank of India in terms of its
circular/s
in
force.
As
regards
any
investments/deposits
made
with
the
petitioner-bank by any member of the
petitioner-bank belonging to any State
other than Uttar Pradesh, the same shall be
dealt with by the petitioner-bank strictly in
accordance with the directions of the
Reserve Bank of India. The Reserve Bank
of India is directed to take such steps and
pass such directions as it deems fit with all
expedition.

62.
Subject
to
the
above
observations,
this
writ
petition
is
dismissed.
----------
(2025) 2 ILRA 255
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.02.2025
BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE PRASHANT KUMAR, J.

Writ C No. 15604 of 2021
With other connected cases

M/S Lotus Green Constructions Pvt. Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Prateek Sinha, Rahul Sahai

Counsel for the Respondents:
C.S.C., Kaushalendra Nath Singh

A. Corporate Law - Lifting the Corporate
Veil - Can Holding company be held liable
for the acts and omissions of its subsidiary
? - Liability of the original allottee with
regard to its subsidiaries - It is a settled
legal position that a subsidiary is a
separate legal entity and is different from
its holding/parent company. However, the
holding companies and its subsidiary
cannot take a shelter under the legal
position that they are two distinct legal
entities when, the company is the creature
of the group, formed in an attempt to
avoid recognition by the eye of law,
merely to mask the real entities and to
cover the business which is actually being
carried out by the same set of people.
Then the Court can always lift the
corporate veil, and hold the holding
company liable for the acts and omissions
of
its
subsidiary.
A
Consortium
Member/Original
Allottee
(parent
company) can be held responsible for the
wrong done by its subsidiary companies,
especially when the same is done, as a
part of a sham transaction, just to avoid
the liability of the parent company. In the
instant case as a part of the greater
256 INDIAN LAW REPORTS ALLAHABAD SERIES
design all the liability/ responsibility was
transferred
to
a
100%
subsidiary
company which was never completed and
all the profit / cream of the project was
subdivided into smaller companies and
was, sold off at a very high premium. The
entire façade of subsidiary companies
were created only to defraud the other
stake holders. Hence, it will be not wrong
to fasten the liabilities of the subsidiary
companies onto the parent company.
(Para 123, 124)

B. Civil Law - Constitution of India,1950 -
Article 226 - Commercial Contract - Issue:
Whether
commercial
contracts,
which
stem from a Government Policy decision
of Noida and the State Government, are
insulated from judicial review? The issue
is no longer res integra, and there is no
absolute bar, even in matters concerning
contracts, on the maintainability of writ
petitions. When contractual power is
exercised for public purposes, the State
and
its
instrumentalities
bear
the
responsibility
to
act
fairly,
without
arbitrariness
or
caprice.
In
such
situations,
courts
are
justified
in
intervening through judicial review to
determine whether the State has adhered
to the principles embodied in Article 14 of
the Constitution of India, which mandates
fairness and non-arbitrariness in State
actions. The involvement of a public
authority
necessitates
cognizance
to
ensure that the scheme or agreement
upholds constitutional principles. In such
scenarios, it becomes the solemn duty of
the
judiciary,
entrusted
under
the
Constitution as an independent arbiter, to
intervene and protect the interests of the
public at large. If a governmental action
disproportionately favours a private entity
at the expense of public welfare, it is
liable to be struck down as invalid. Under
Article 226(1), the High Courts have the
power to issue such directions, orders, or
writs not only for the enforcement of
fundamental rights but also for "any other
purpose". High Court can take suo motu
cognizance of issues not raised in writ
petitions if the issues are such as affect
society, particularly in the realm of public
administration, even though they were
not raised in the writ petitions. (Para 138,
139, 140, 146)

C. Civil Law - Constitution of India,1950 -
Article 226 - Withdrawal of writ petition -
Petitioners have the right to withdraw
their writ petition filed under Article 226
of the Indian Constitution. This right is
recognized to uphold the autonomy of the
petitioners in legal proceedings. While the
petitioners can request withdrawal, the
court has the discretion to allow or reject
such
withdrawal
depending
on
the
circumstances. If the withdrawal is sought
after the court has taken significant steps
in the case, the court may consider the
implications before granting permission.
Withdrawal is subject to the court's
discretion, especially where justice or
public interest may be affected. In the
instant case, the Court deprecated the
conduct of the petitioners. Petitioners had
played
fraud
in
the
allotment
and
development
of
the
Sports
City.
Emboldened
by
their
success
in
defrauding the Noida Authority, banks,
and
homebuyers,
they
attempted
to
mislead the Court as well. Only after the
judgment was reserved, they tried to
withdraw the writ petition to avoid an
adverse
ruling.
If
the
petitioners
genuinely
intended
to
withdraw
the
petitions, they could have done so earlier.
Court dismissed the writ petitions but did
not grant any liberty to the petitioners to
re-agitate the matter. (Para 134, 135,
136, 159, 160, 162)

D. Civil Law - Constitution of India,1950 -
Article 226 - CBI Inquiry - High Court has
the power under Article 226 to order an
investigation by the CBI. However, the
exercise of this power to transfer such
investigation must be for rare and
exceptional cases. When the accused are
very senior officers of the State, the
investigation by the State investigating
agency may not be satisfactorily held. To
ensure justice and instill confidence in the
minds of the victims as well as the public,
investigation in such cases should be
handed over to another independent
2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
257
investigating agency. In the instant case,
the Court found a dirty nexus between
builders and officials of the Noida Authority,
wherein benefits after benefits were doled
out to builders, completely contrary to the
Scheme, MOA, and implementation of the
Sports City Scheme. Although the CAG
unearthed the scam in 2021, the Noida
Authority or the State Government till date,
not lodged a single FIR against any of the
officials involved. No effort was made to
retrieve the losses, indicating that the
builder lobby is influential and deeply
entrenched in the government system.
Efforts were made to shield the corrupt
officers and builders who had amassed huge
amounts of money by defrauding the State
Government and the Noida Authority. In
view of the possible involvement of highranking officials and also considering that
the total outstanding dues exceeded ₹7,000
crores and that misconduct of the NOIDA
Authority officials was writ large, those
officials having acted contrary to the Sports
City Scheme to extend undue benefits to the
petitioners and other similarly situated
builders/developers, the Court directed the
C.B.I. to lodge a complaint against all the
conniving officials of the Noida Authority
and the allottees/builders involved in the
allotment, development, sanction of the
Sports City Project or any other related
matters. CBI inquiry was directed. (Para
148, 149, 157, 158)

Dismissed. (E-5)

List of Cases cited:
1. Salomon Vs Salomon & Co. Ltd (1897) AC 22
2. Adams Vs Cape Industries Plc (1990) Ch 433
3. Gilford Motor Co Vs Horne [1933] Ch 935. In
Jones Vs Lipman [1962] 1 WLR 832
4. Smith, Stone & Knight Ltd Vs Birmingham
Corp . [1939] 4 All ER 116
5. DHN Food Distributors Ltd Vs London
Borough of Tower Hamlets [1976] 1 WLR 852
6. New South Wales case of Pioneer Concrete
Services Vs Yelnah Pty Ltd
7. St. of U.P. Vs Renusagar Power Co. and Ors.
1988 (4) SCC 59
8. Life Insurance Corp. of India Vs Escorts Ltd.
& ors. (1985) Suppl. 3 SCR 909
9. Vodafone International Holdings BV Vs U.O.I.
& anr. (2012) 6 SCC 613
10. Small Industries Development Bank of
Indian Vs Creation Investments Equitas
Holdings LLC (in OA 1137 of 2019 decided
on 6.10.2020)
11. Joshi Technologies International Inc. Vs
U.O.I. 2015 (7) SCC 728
13.
Noida Toll Bridge Company Ltd
Vs
Federation
of
Noida
Residents
Welfare
Association & Ors 2024 INSC 1027
14. Silpi Constructions Contractors Vs U.O.I.
2020 (16) SCC 489
15. Kasturi Lal Lakshmi Reddy. Vs State of
Jammu & Kashmir 1980 (4) SCC 1
16. Centre for Public Interest Litigation Vs U.O.I.
2012 (3) SCC 1
17. M.C. Mehta Vs U.O.I. AIR 1987 SC 965
18. Disha Vs St. of Guj. (2011) 13 SCC 337
19. St. of W.B. Vs Committee for Protection of
Democratic Rights, West Bengal 2010 SCC
OnLine SC 297
20. Minor Irrigation & Rural Engg. Services, U.P.
Vs Sahngoo Ram (2002) 5 SCC 521
21. K.V. Rajendran Vs Superintendent of Police,
CBCID (2013) 12 SCC 480
22. Sakiri Vasu Vs St. of U.P. (2008) 2 SCC 409
258 INDIAN LAW REPORTS ALLAHABAD SERIES
23. Rubabbuddin Sheikh Vs St. of Guj. (2010) 2
SCC 200
(Delivered by Hon'ble Mahesh Chandra
Tripathi, J.
&
Hon'ble Prashant Kumar, J.)

TABLE OF CONTENTS
S.No. Heading
Page nos.
1
Facts of the case
3-7
2
Present Sports City Scheme 02 in
Sector 150
7-17
3
CAG Report
17-19
4
Board meeting of the NOIDA
Authority
19-21
5
Prayers made in the leading writ
petition
21-24
6
Prayers made in the connected writ
petitions
24-33
7
Arguments on behalf of petitioners 33-37
8
Arguments
on
behalf
of
respondents
37-44
9
Change in shareholdings of various
companies
44-45
10
Further
arguments
of
the
petitioners
45
11
Analysis by the Court
45-46

A. Deviations
46-47

(I) Formation of the Scheme
47-48

(II) Approval of Bid
48

(III) Failure on behalf of NOIDA
Authority
48-51

B. Illegal sale
51-52

C. Outstanding dues of the Sports
cities
52-55

D. Illegal benefits to the allottees
56-61

E. Need for lifting of corporate veil 61-62

F.
Liabilities
of
the
original
allottees
with
regard
to
its
subsidiaries
62-66

G. Conduct of the petitioners
67-70

H. Withdrawal of the writ petitions 70
12
Scope of judicial intervention
70-73
13
Enquiry against the delinquent
officers and other conspirators by
C.B.I.
73-77
14
Conclusion
77-79

1. All the aforesaid writ petitions have
been clubbed and heard together as they
involve similar issue, and hence, they are
being decided by this common judgement
and order.

2. Heard Sri Shashi Nandan, learned
Senior Advocate and Sri Anoop Trivedi,
learned Senior Advocate assisted by Sri
Prateek Sinha, learned counsel for the
petitioners, Sri M.C. Chaturvedi, learned
Additional Advocate General assisted by
Sri Devesh Vikram, learned Additional
Chief Standing Counsel and Sri Mohan
Srivastava, learned Standing Counsel for
the State-respondent nos.1 and 3 and Sri
Manish Goyal, learned Senior Counsel
assisted by Sri Kaushalendra Nath Singh
and Ms. Anjali Gokhlani, learned counsel
for respondent no. 2-Noida Authority.

FACTS OF THE CASE

3. Board of New Okhla Industrial
Development Authority1 took a decision on
16.8.2004 to develop sports facilities of
international standards in NOIDA. In the
next meeting held on 25.6.2007 the Board
came to a conclusion that since there are no
sports facilities available in NOIDA, hence
2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
259
an area of 311.60 hectares was marked for
development of the sports city. In the next
Board meeting held on 8.4.2008, it was
resolved,
keeping
the
upcoming
Commonwealth Games-2010 in mind, that
the land use of Sector 76,78,79,101, 102,
104
and
107
be
changed
for
the
development of the sports city. However,
the area earmarked to develop sports city
was
increased
to
346
hectares.
Accordingly, Grand Thorton was appointed
to formulate the scheme and to lay down
conditions for the allotment of the land. In
the next Board meetings held on 18.9.2008
(154th Board Meeting), the amended
Master-plan
2031
of
NOIDA
was
considered, and for the first time, the
details, as to what is expected in the sports
city, were mentioned. Clause 5.9.3 of the
Master plan laid down the details for the
development of the sports city, which is
extracted below:-

"Development of a Sports City
was proposed in the Central - Eastern part
of Noida along the DSC Road. The
proposed site is well linked by the proposed
Master Plan roads connecting Expressway.
National Highway-24, Greater Noida and
other parts of the city. Noida Sports City
envisions itself to be one of its kind in the
Country, with a clear and defined focus on
an integrated sports theme, its form
providing a strong and such clearly
identifiable image to Noida, where sports
events catalyze other activities such as
tourism, community meetings, exhibitions,
conventions and festival. In order that the
vision remains relevant, the sports and
other related recreational and institutional
facilities were proposed in the Sports City.
Large size project of Sports-City could not
be implemented. Therefore, the authority
decided to have more than one projects of
sports city of lesser sizes at different
locations of the town. These Sports City
projects would have about 50-100 hectares,
or more land. The Sports City is basically a
part of recreational land use and therefore
its
development
is
proposed
in
the
recreational Green Area and a separate
provision for permissible ground coverage
and F.A.R. is proposed in the Building
Regulations of Noida. Any project of
Sports-City may have the provision of
following Sports and related facilities,
residential, commercial and other facilities
as per the specific requirement decided by
the authority for a particular project or
scheme:-

i. A golf course, golf club house
and driving range, integrated with the
residential and commercial areas and a
cricket stadium with covered grandstand,
provisions
of
electronic
scoreboards,
television
video
screens,
competition
lighting, meeting rooms, media facilities
etc. A multi-purpose playing field for
athletics and football with practice nets,
and competition lighting, synthetic turf laid
hockey field, Indoor stadia for badminton
and table tennis courts, weightlifting,
boxing, gymnastics, karate etc., Indoor
central court tennis centre, and Indoor
swimming centre with pools-competition,
warm-up and diving pool and other related
facilities. Indoor and outdoor Stadium and
playground may be added further as per
the requirements.

ii. Sports City may include a
Sports Academy serving as a 'centre of
sports
excellence'
with
world
class
facilities and support services for a range
of
sports
including
Cricket,
Tennis,
Swimming, Athletics, & Golf etc. Practice
areas could be incorporated within the
sports
grounds
and
facilities
for
competition and training. The academy
may also include office accommodation,
260 INDIAN LAW REPORTS ALLAHABAD SERIES
laboratories, lecture theatres and specialist
facilities. The Sports City may have sports
medicine/health facility centre to provide
cutting edge sports science and sports
medicine support. These should includeclinical services, sport sciences, nutrition,
athlete and career education, applied
research centre with the provisions of
laboratories, officers and workshops. There
shall be other facilities like Integrated
Sports-hostels, dormitories and serviced
apartments and other residential facilities
within the walking distance to all venues
Sports club, business and leisure facilities,
meeting rooms and office accommodation
shall be provided within the sports venues.

iii. A network of roads shall be
planned as a functional hierarchy to service the
Sports City. Other facilities could include space
for transport, entry and exit gates, passenger
lounges, bridges and underpasses as required.
Car parking facilities shall be suitably planned
throughout the city. There shall be an IT
Centre/Administration/Media block, and a
major retail hub providing shopping facilities
for the City. Residential and Commercial
facilities should also be developed within the
Sports-City area.

The Sports-city projects shall be
developed as an Integrated Mini-Township
with all modern and world class sports and
other related facilities. Minimum 70% of the
total area would be utilized for sports activities.
Institutional and other facilities, open spaces
and other recreational activities. Noida
Authority will determine the land use pattern,
permissible activities, planning norms and
other regulations as required time to time for
the development of the Sports-city projects."

4. For the development of the sports
city, the brochure was finalised on
04.11.2008 and the procedure for the
change of land use was initiated. The
scheme seems to have been launched but
could not be finalised. Thereafter, in
September 2010, the area of the sports city
was changed from 311 hectares to 150
hectares, Grand Thorton was asked to give
a
fresh
detailed
project
report
and
thereafter, the reserved price was fixed as
Rs.12,500/-per sq. meter. From 2010-11 to
2015-16, four sports city projects were
launched on a total area of 798 acres, in
which three golf courses, one cricket
stadium, and other sports facilities of
international standard were planned.

5. Thereafter, the Master Plan 2031 of
Noida
Authority
was
modified.
The
modification was as follows:-

"1. Noida Sports City envisions
itself to be one of its kind in the Country,
with a clear and defined focus on an
integrated sports theme, its form providing
a strong and clearly identifiable image to
NOIDA; where sports events catalyze other
activities such as tourism, community
meetings, exhibitions, conventions and
festivals. In order that the vision remains
relevant, the sports and other related
recreational and institutional facilities
were proposed in the Sport City.

2. Large size project of Sportscity could not be implemented. Therefore,
the Authority decided to have more than
one projects of sports city of lesser sizes at
different locations of the town. These Sport
City projects would have about 50-100
hectares, or more land.

3. The Sports City is basically a
part of Recreational land use and therefore
its
development
is
proposed
in
the
Recreational Green Area and a separate
provision for permissible ground coverage
and F.A.R. is proposed in the Building
Regulations of Noida. Any project of
2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
261
Sports-city may have the provision of
Sports and related facilities, residential,
commercial and other facilities as per the
specific
requirement
decided
by
the
Authority for a particular project or
scheme.

Any project of sports city may
have the following sports and related
facilities:-

1. A golf course, golf club house
and driving range, integrated with the
residential and commercial areas and a
cricket stadium with covered grandstand,
provisions
of
electronic
scoreboards,
television
video
screens,
competition
lighting, meeting rooms, media facilities
etc. A multi-purpose playing field for
athletics and football with practice nets,
and competition lighting, synthetic turf laid
hockey field, Indoor stadium for badminton
and table tennis courts, weightlifting,
boxing, gymnastics, karate etc., Indoor
central court tennis centre, and Indoor
swimming centre with pools-competition,
warm-up and diving pool and other related
facilities. Indoor and outdoor Stadium and
playground may be added further as per
the requirements.

2. Sports City may include a
Sports Academy serving as a 'centre of
sports
excellence'
with
world
class
facilities and support services for a range
of
sports
including
Cricket,
Tennis,
Swimming, Athletics, & Golf etc. Practice
areas could be incorporated with the sports
grounds and facilities for competition and
training. The academy may also include
office accommodation, laboratories, lecture
theatres and specialist facilities. The Sportcity may have sports medicine/health
facility centre to provide cutting edge
sports science and sports medicine support.
These should include clinical centre with
the provisions of laboratories, offices and
workshops. There shall be other facilities
like Integrated Sports-hostels, dormitories
and
services
apartments
and
other
residential facilities within the walking
distance to all venues. Sports club, business
and leisure facilities, meeting rooms and
office accommodation shall be provided
within the sports venues.

3. A network of roads shall be
planned as a functional hierarchy to
service the Sports city. Other facilities
could include space for transport, entry
and exit gates, passenger lounges bridges
and under passes as required. Car parking
facilities
shall
be
suitably
planned
throughout the city. There shall be an IT
Centre/Administration/Media block, and a
major retail hub providing shopping
facilities for the City. Residential and
Commercial facilities should also be
developed within the Sport-City area.

The Sport-city projects shall be
developed as an Integrated Mini-Township
with all modern and world class sports and
other related facilities. Minimum 70% of
the total area would be utilized for sports
activities, Institutional and other facilities,
open
spaces
and
other
recreational
activities. Noida Authority will determine
the land use pattern, permissible activities,
planning norms and other regulations as
required time to time for the development
of the Sport-city project."

PRESENT
SPORTS
CITY
SCHEME 02 IN SECTOR 150

6. NOIDA, sometimes in the year
2014, floated a scheme known as "Sports
City" which was to be developed in Sector
150 of NOIDA. The scheme was launched
on 07.6.2014 and was to close on
26.06.2014. As per the Scheme, a Sports
City was to be developed on a land parcel
of 12,00,000 square meters in Sector 150
262 INDIAN LAW REPORTS ALLAHABAD SERIES
Noida. The reserve price for the scheme
was set at Rs.18,865/- per square metre.

7. The developer was supposed to create
sports facilities over 70% of the entire land
allotted to them, which was not marketable, and
to set off this expense the developer was
allowed to construct group housing on 29.5%
and 0.5% commercial on the total land with
FAR of 2.0 on the total land area. The scheme
clearly stated that the population density in this
Sports City would be 1650 per hectare. The
open/green area of the recreational component
(i.e. sports activities such as Golf course,
stadium etc. and open spaces) was to be
considered as other open green areas for the
entire land.

8. The relevant part of the Brochure is
as follows:-

"Eligibility Criteria

"8. In case the tenderers have
formed a consortium:-

(a) Members of consortium will
have to specify one Lead Member who alone
shall be authorized to correspond with the
NOIDA. Lead member should be the single
largest shareholder having at least 30% share
in the consortium. The shareholding of the
lead member in the consortium shall remain
at
least
30%
till
the
temporary
occupancy/completion certificate of at least
one phase of the project is obtained from the
Noida. Each member of the consortium with
equity stake of at least 05% will be considered
as the 'relevant member'. The Lead Member
of the consortium must necessarily be a
Firm/Company registered in India with the
appropriate statutory Authority.

(b) The lead member and the
relevant members should jointly qualify the
minimum
requirement
of
net
worth,
solvency, turnover and experience. In case
the tenderer is a consortium, then the
qualifications of the holding company(ies)
of the lead member and the relevant
members or their subsidiary companies
shall
also
be
considered
as
the
qualifications of the tenderer.

(c) In case of Consortium, the
members shall submit a Memorandum of
Agreement (MOA) conveying their intent
to jointly apply for the scheme(s), and in
case the plot is allotted to them, the MOA
shall
clearly
define
the
role
and
responsibility of each member in the
consortium, particularly with regard to
arranging debt and equity for the project
and its implementation. MOA should be
submitted
in
original
duty
registered/notarized
with
appropriate
authority.

(d) The members shall submit a
registered/notarized
Memorandum
of
Agreement (MOA) conveying their intent to
jointly apply for the scheme, and in case
the plot is allotted to them, to form Special
Purpose Company(ies), hereinafter called
SPCs that will subsequently carry out all
its responsibilities as the allottee. The
registered MOA must specify the equity
shareholding of each member of the
Consortium in the proposed SPCs. The
SPCs
must
mecessarily
be
Firm(s)/Company(ies) registered in India
with the appropriate statutory Authority.
The allottee and in the case of consortium,
the lead member and/or the relevant
member and/or SPC(s) incorporated by
them, put together, will have to construct
on their own a minimum of 30% of the
total permissible FAR on allotted area. In
case of a consortium, the responsibility of
construction of this 30% of the total
2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
263
permissible FAR shall be clearly specified
in the MOA submitted by the consortium
alongwith bid document. The allottee and
the members of the consortium shall have
the option to sub lease a maximum of 70%
of land allotted to them as per the
arrangements specified by them in the
MOA.

(e) Execution of more than one
lease deeds can be made by sub dividing
the plot in favour of the lead member
and/or the relevant member(s) and/or
Special Purpose Company(ies) (SPCs)
formed by them, which should be firm(s) or
incorporated company(ies) registered in
India. However, the area of each of such
sub-divided plot proposed for execution of
lease deed, as described above, should not
be less than 8,000 sq. mtrs. and the said
sub-division should be in accordance with
the planning norms of the NOIDA.

10. However, the lessee/Sublessee(s) will be allowed to transfer upto
100% of its shareholding, subject to the
condition that the "Lead Member" (on the
date of submission of the tender) shall
continue to hold at least 30% of the
shareholding in the SPC till the temporary
occupancy/completion certificate at least
one phase of the project is obtained from
the NOIDA. In compliance with the Govt.
Order
No.
5007/11-5-2010500(50)/10
DATED 11 th October, 2010, issued by the
Department
of
Tax
&
Registration,
Government of Uttar Pradesh, the change
in the name of shareholders does not
amount to transfer of the property of the
Company. The Change in Constitution
Deed regarding change in the shareholders
as a result of transfer of share in the
Companies is not mandatory to be
registered
under
Section
17
of
the
Registration Act, 1908. In addition to this,
no stamp duty of leviable on this CIC deed
under Clause 23 of Schedule 1b of the
Stamp Act, 1899. No transfer charges shall
be leviable on the transfer of shares in the
Companies and no prior approval of the
NOIDA shall be required for transferring
the shares.
MODE OF PAYMENT AND
PAYMENT PLAN

1. The successful bidder shall be
issued an allotment letter for the acquired
area and reservation letter for the balance
unacquired area. Allotment letter(s) of the
area(s) contiguous to the already acquired
and allotted land shall be issued as and
when the balance land (in full or parts) is
acquired and available for handing over
possession to the successful bidder.

7. In case of default in depositing
the installments or any payment, interest
@ 14% compounded half yearly shall be
leviable for defaulted period on the
defaulted amount.

POSSESSION

Possession of allotted land will
be handed over to the Lessee after
execution and registration of lease deed.

IMPLEMENTATION
&
COMPLETION OF PROJECT
IMPLE MENTATION

1. The Lessee shall be required to
complete the construction of minimum
15% of the permissible area earmarked
for sports, institutional and other facilities
within a period of 3 years from the date of
execution of Lease Deed and shall
264 INDIAN LAW REPORTS ALLAHABAD SERIES
complete the project in phases within 5
years. However, the residential and
commercial
development/construction
may be completed in phases within 7
years. Further more, the lessee has to
develop
residential
and
commercial
component in the project in proportion to
area earmarked for recreational uses.
However,
extension
in
exceptional
circumstances can be granted by NOIDA,
on
payment
of
extension
charges
applicable as per prevailing policy at the
time of granting such extension. Delays due
to encroachment, force majure, legal
issues like stay orders etc. shall be
considered for extension.

2. The construction on the land
shall have to be done as per the prescribed
under these Terms and Conditions and the
building regulations and directions of the
NOIDA.

COMPLETION

1. The 'Completion Certificate'
will be issued by the NOIDA on the
completion of the project or part thereof in
phases and on the submission of the
necessary
documents
required
for
certifying the completion of the project or
part thereof.

INDEMNITY

The lessee shall be wholly and
solely responsible for the implementation of
the Project and also ensuring the quality of
development/constructions,
subsequent
operations and maintenance of the facilities
and services, till such time as the alternate
agency for such work is identified and
legally appointed by the lessee after prior
written approval of NOIDA. The lessee
shall
execute
an
Indemnity
bond
Indemnifying the NOIDA against all
disputes arising out of:

a) The non-completion of the
project.

b) The quality of development,
construction, operations and maintenance.

c) Any legal dispute arising out of
allotment, lease and/or sub-lease to the
final purchaser(s).

GENERAL
TERMS
AND
CONDITIONS* Composite Floor Area
Ratio (FAR) of 2.0(subject to approval of
state government) on the total gross area of
the allotted land will be permissible, which
is fungible/transferable in different land
use components as prescribed.

*
The
obligations
of
the
developer with respect to the development
of sports, institutional and other facilities
are prescribed in Annexure 2 of this
document.

Subject to provision of Master
Plan and regulation of NOIDA:

The lessee shall be entitled to
sub-lease the sports, other facilities and
institutional activity, with prior approval of
NOIDA/Lessor.

* Commercial and residential
area can be sub-leased without any
approvals on tripartite agreement basis.

* The transfer of whole plot and
sub-lease of built up space shall be
governed by the transfer policy prevailing
at the time of such transfer or sub-lease of
built up space.

*
Without
obtaining
the
completion certificate the lessee shall have
the right to sub-divide the allotted plot into
suitable smaller plot as per the planning
norms of the NOIDA only for the area
available for residential and commercial
use and to transfer the same to the
interested parties, if any, with the prior
approval of the NOIDA on payment of
2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
265
transfer charges at the rate prevailing on
the date of transfer. However, the area of
each of such sub-divided plot should not be
less than 8,000 sq. mtrs.

*After the written approval of the
Lessor/NOIDA Authority, the lessee can
implement/develop the project through its
multiple subsidiary companies in which
the allottee/lessee company shall have
minimum 90% equity share holdings (such
subsidiaries are exempted from stamp duty
for transaction between parent company
and
subsidiary
company
under
the
provisions of Indian Stamp Act as per the
State Government notification).

* For the first transfer of
land/built-up area through sub-lease no
additional charges or transfer charges
shall be payable by lessee to NOIDA or any
Authority.

* Sub lease of land/built-up area
shall be allowed on the basis of approved
layout and building plans by NOIDA.

OTHER CLAUSES

1. The Authority/Lessor reserves the
right to make such additions/alterations or
modifications in the terms and conditions of
allotment/lease deed/sub lease deed from time
to time, as may be considered just and
expedient.

2. In case of any clarification or
interpretation regarding these terms and
conditions, the decision of the NOIDA shall be
final and binding.

7. The NOIDA will monitor the
implementation of the project. Applicants who
do not have a firm commitment to implement
the project within the time limits prescribed are
advised not to avail the allotment.

11. All arrears due to the
Lessor/Lessee(s) would be recoverable as
arrears of land revenue.

12. The NOIDA in larger public
interest may take back the possession of
the
land/building
by
paying
a
reasonable(s) compensation. The decision
in this regard shall be final and binding on
the lessee/sub-lessee(s).
(Emphasis supplied)

9.
The
respondent
no.2-NOIDA
invited applications for allotment of Sports
City on Plot No.SC-02 in Sector-150,
NOIDA. As per the brochure, a Consortium
was also allowed to participate. In terms of
the Brochure a Consortium of M/s Lotus
Green
Constructions
Pvt
Ltd
was
constituted as a lead member along with
following six companies who applied for
allotment of this plot on 23.06.2014:-

(i) M/s Three C Infrastructure
Pvt. Ltd.

(ii) M/s Three C Infra Square Pvt.
Ltd.

(iii) M/s Three C Buildcon Pvt.
Ltd.

(iv) M/s Elate Realtor Pvt. Ltd.

(v) M/s Three C Crest Promoters
Pvt. Ltd. &

(vi) M/s Allure Developers Pvt.
Ltd.

10. The lead member M/s Lotus Green
Constructions Pvt Ltd. was a subsidiary
company of M/s Three C Universal
Developers Pvt. Ltd. The application was
made on the qualification of M/s Three C
Infrastructure Pvt. Ltd., which was also one
of its group company. Surprisingly, Sports
City 01/78-79 was also allotted to the same
group of companies on the basis of the
qualification of the same company i.e. M/s
Three C Infrastructure Pvt Ltd.

11. The tenders were evaluated and
after finding the bid of the Consortium
most compliant (at a rate of Rs 19,400/- per
266 INDIAN LAW REPORTS ALLAHABAD SERIES
sqm), the project was allotted to the
Consortium and allotment letter was issued
on various dates, as and when the
possession of the land could be handed
over to the allotee.

12. In the name of Lead Member of
the Consortium namely, M/s Lotus Green
Constructions
Pvt.
Ltd.
(petitioner
company) for Plot No.SC-02, Sector-150,
NOIDA. The total premium for the plot in
the year 2014 was Rs.2,328,00,00,000/-
(Rupees 2,328 crores). The allotment-cumreservation letter was issued to the lead
member on 10.9.2014, asking the allottee to
pay 20% of the premium, and the balance
80 % was to be paid in 16 half yearly
instalments (starting from 10.3.2015 and
ending on 10.9.2022).

13. After payment of the upfront 20%
of the premium, a formal letter was issued
on 07.10.2014 and thereafter, Noida
Authority executed various lease deeds and
allotted a total area of 11,98,370.92 sq
meters of land. The details of which are as
follows:-

"The details of lease deeds executed
is as follows:-

S.No.
Party Name and
Address
Area
(Sqm)
Date
of
Execution of
Lease Deed
1.
M/s Lotus Greens
Constructions
Pvt.
Ltd.-SC-01/A,
Sector-150, Noida
6,40,000.00
19.12.2014

2.
M/s
Allure
Developers
Pvt.
Ltd.-
SC-02/C,Sector-150,
Noida
60,000.00
19.12.2014
3.
M/s Elate Realtors
Pvt.
Ltd.-SC-02/B,
1,00,000.00
19.12.2014
Sector-150, Noida
4.
M/s Crest Promoters
Private Limited, SC02/F,
Sector-150,
Noida
58,064.71
07.04.2015
5.
M/s Crest Promoters
Private Limited, SC02/G,
Sector-150,
Noida
60,000.54
07.04.2015
6.
M/s
Three
C
Buildcon
Private
Limited,
SC-02/E,
Sector-150, Noida
32,519.22
07.04.2015
7.
M/s Three C Infra
Square
Private
Limited, SC 02/D,
Sector-150, Noida
40186.45
07.04.2015
8.
M/s Lotus Greens
Constructions
Pvt.
Ltd.
SC-01/A,
Sector-150, Noida
7,600.00
11.05.2015
9.
M/s Lotus Greens
Constructions
Pvt.
Ltd.-SC-01/H and I,
Sector-150, Noida
72,000.00
20.11.2015
10.
M/s Lotus Greens
Constructions
Pvt.
Ltd.-SC-01/J and J,
Sector-150, Noida
72,000.00
20.11.2015
11.
Area not registered
yet
56,000.00
Not
Applicable

Total Area
11,98,370.92

14. On 01.3.2016, NOIDA allotted
1,53,790 sqm of extra land to the
petitioners.

15. It is claimed by the petitioners
that the possession of contiguous land
has not been given to them till date.
Khasra Nos. 86, 471, 94, 95, 109, 110,
171, 172, 181, 182, 187, 192, 200, 201,
208, 209, 211, 212, 218, 219, 234, 233
in Village Momnathal fall under the
Chak Marg, Drain, Govt. Land and
Main Drain, which were still not
acquired by Noida Authority spreading
2 All. M/S Lotus Green Constructions Pvt. Ltd. Vs. State of U.P. & Ors.
267
in between the 10,07,000.00 sqm land
parcel.

16. On 6.9.2017 Noida issued a
letter to the allottee for payment of
additional compensation for the farmers
whose land has been acquired.

17. Inspite of rescheduling of the
time frame the allottee failed to meet
the first Mile stone. So a notice was
issued by the Noida on 4.2.2020 but
nothing happened.

18. The petitioner company claims
that there were some problem in actual
physical possession of the entire land,
hence, the petitioner applied for benefit
of zero period for an area 8,07,600 sqm
from the date of execution of lease deed
till 30.06.2015. The petitioner again
moved an application dated 18.12.2015/
28.12.2015 seeking benefit of zero
period for an area 10,07,600 sqm.
Noida Authority on 12.09.2016 granted
benefit of zero period for an area
measuring 9,94,218 sqm. In this letter,
it was mentioned that benefit of zero
period will not be extended further. The
petitioner company availed the benefit
of this letter dated 12.09.2016 and did
not challenge the same.

19. The lead member of the
Consortium filed a consolidated map
for the development of the sports city
project, which was approved.

20. On the request of the allottees
(members of the consortium) their
allotted
land
was
subdivided
into
various companies, which they claimed,
were 100% subsidiary of the allottee
companies.

21.
Subsequently,
the
allottee
subsidiary Companies further made
request to the Noida authority to further
subdivide their plots in the name of
companies,
which
were
100%
subsidiaries of the allottee companies.
By this sub-division, the original seven
companies by now had become 24
companies.

22. The possession of 8,07,600
sqm. of land was handed over on
26.12.2014.