# M/S Omaxe Ltd v. L.D.A. & Anr

- **Citation:** (2022) 8 ILRA 117
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-08-17
- **Case number:** Writ C No. 5217 of 2022
- **Bench:** Devendra Kumar Upadhyaya, Rajnish Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-omaxe-ltd-v-l-d-a-anr-48723
- **Pages:** 10

## Headnote

A. Civil Law-U.P. Urban and Planning
Development Act, 1973-Sections 4 & 56
-
Lucknow
Development
Authority(Powers and Duties of the
Secretary and Chief Accounts Officer)
Regulations,
1983-Regulation
2(8)-
Agreement-Show cause notice to cancel
concessional
agreement-the
concessional agreement was entered
into between the parties in relation to
developing the township which will be
covered
within
the
meaning
of
developmental activities undertaken by
LDA-Secretary does have power and he
is possessed with necessary authority to
issue show cause notice in relation to
developmental activities as he exercises
not only general administration and
supervision but overall control over
developmental activities as well.(Para
12)

The petition is dismissed. (E-6)

List of Cases cited:

## Text

8 All. M/S Omaxe Ltd. Vs. L.D.A. & Anr.
117
Dwivedi shall inform the respondents about
this order. The petitioner shall also be at
liberty to inform the respondents by moving
an application in that regard.

The petition is adjourned to
02.08.2022.

The parties shall inform the fate
of the order passed today to this Court on
the next date.

3. It is informed at the bar that in
compliance of the said order, the petitioner
has been granted admission.

4. In view of the statement as given at
the bar, nothing further survives in the
matter.

5. The petition stands disposed off in
view of the order passed by this Court as
extracted above.
----------
(2022) 8 ILRA 117
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 17.08.2022

BEFORE

THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
THE HON'BLE RAJNISH KUMAR, J.

Writ C No. 5217 of 2022

M/S Omaxe Ltd. ...Petitioner
Versus
L.D.A. & Anr. ...Respondents

Counsel for the Petitioner:
Lalta Prasad Misra, Prafulla Tiwari, Vineet
Kumar Singh Bisen

Counsel for the Respondents:
Ratnesh Chandra

A. Civil Law-U.P. Urban and Planning
Development Act, 1973-Sections 4 & 56
-
Lucknow
Development
Authority(Powers and Duties of the
Secretary and Chief Accounts Officer)
Regulations,
1983-Regulation
2(8)-
Agreement-Show cause notice to cancel
concessional
agreement-the
concessional agreement was entered
into between the parties in relation to
developing the township which will be
covered
within
the
meaning
of
developmental activities undertaken by
LDA-Secretary does have power and he
is possessed with necessary authority to
issue show cause notice in relation to
developmental activities as he exercises
not only general administration and
supervision but overall control over
developmental activities as well.(Para
12)

The petition is dismissed. (E-6)

List of Cases cited:
1. Dy Commr, Central Excise & anr. Vs Sushil &
Co. (2016) 13 SCC 223

2. U.O.I. & anr. Vs Vicco Laboratories (2007) 13
SCC 270

3. Siemens Ltd. Vs St. of Mah. & ors. (2006) 12
SCC 33

4. U.O.I. & anr. Vs Kunisetty Satyanarayana
(2006) 12 SCC 28 and

5. St. of U.P. & anr. Vs Anil Kumar Ramesh
Chandra Glass Works & anr. (2005) 11 SCC 451

6. Manmohan Nanda Vs United India Assr. Co.
Ltd & anr. (2022) 4 SCC 272

7. Wellington Asso. Ltd. Vs Kirti Mehta (2000) 4
SCC 272

8. AFCONS Infra. Ltd. Vs Nagpur Metro Rail
Corp. Ltd. (2016) 16 SCC 818

(Delivered by Hon'ble Devendra Kumar
Upadhyaya, J.
&
Hon'ble Rajnish Kumar, J.)
118 INDIAN LAW REPORTS ALLAHABAD SERIES

1. Arguments in this writ petition
were
concluded
on
08.08.2022
and
judgment was reserved to be pronounced
by us on 10.08.2022. On 10.08.2022 before
the judgment could be pronounced, a
mention was made by the learned counsel
for the petitioner in the morning session of
the Court that the matter may be re-heard
and accordingly an application for further
hearing was moved.

2. On the said prayer made on behalf
of the petitioner, further arguments were
heard on 10.08.2022, on which date the
following order was passed:

"This matter was heard on
08.08.2022 and judgment was reserved.

Judgment has been readied,
however, before its pronouncement, in the
first half of the day, learned counsel for
the petitioner has made a request for rehearing by moving an application.

Accordingly, we have heard the
learned counsel for the petitioner today
again, however, he remains inconclusive.

List/put
up
tomorrow
i.e.11.08.2022.

The
draft
judgment
dated
10.08.2022 which was to be pronounced
today, shall be kept on record.

Interim
protection
granted
earlier shall continue to operate till
tomorrow."

3. The matter was again heard on
11.08.2022. On both these dates i.e.
10.08.2022
and
11.08.2022,
learned
counsel for the petitioner as also the
learned counsel representing LDA made
their submissions. The judgment was
reserved to be pronounced on 17.08.2022.

4.

On
10.08.2022,
when
an
application for rehearing of the writ
petition was made by the learned counsel
for the petitioner, we not only heard the
learned counsel representing the respective
parties but also provided that the matter to
be listed on 11.08.2022 and further directed
that the draft judgment dated 10.08.2022
shall be kept on record. The draft judgment,
which
was
to
be
pronounced
on
10.08.2022, shall form part of this
judgment and the same is extracted herein
below:

"1.
By
filing
this
petition,
jurisdiction of this Court has been invoked
under Article 226 of the Constitution of
India assailing the validity of a show
cause notice dated 25.07.2022, issued by
the Secretary of Lucknow Development
Authority (hereinafter referred to as
"LDA") whereby the petitioner has been
required to submit its explanation as to
why the Concession Agreement entered
into between the parties may not be
cancelled and further as to why the
Performance
Security
may
not
be
forfeited.

2. Heard Dr. L. P. Misra and
Shri Prafulla Tiwari, learned counsel for
the petitioner and Shri Ratnesh Chandra,
learned
counsel
representing
the
respondents.

3. Opposing the maintainability
of the writ petition, it has been submitted
by Shri Ratnesh Chandra, learned counsel
representing the respondents that petition
has been filed challenging only a show
cause notice and since the petitioner has
ample opportunity to submits its reply to
the said show cause notice and further
that since no final decision in the matter
has been taken, as such the petition at this
premature stage may not be entertained. It
has also been argued that the show cause
notice, which is under challenge herein,
has been issued pursuant to a contract
8 All. M/S Omaxe Ltd. Vs. L.D.A. & Anr.
119
entered into between the parties, as such
in a contractual matter interference of this
Court in exercise of its jurisdiction under
Article 226 of the Constitution of India is
not warranted.

4. Learned counsel for the
petitioner, however, has submitted that it is
not that jurisdiction of this Court under
Article 226 of the Constitution of India
where a show cause notice challenged is
absolutely barred and that under certain
circumstances
writ
petition
can
be
entertained. It has been stated that if the
show cause notice is without jurisdiction
or has been issued with premeditation or if
only legal issue is to be decided, the writ
petition can be entertained. In this regard,
he has placed reliance on the judgments
of Hon'ble Supreme Court in the case of
(i) Deputy Commissioner, Central Excise
and another vs. Sushil and Company,
reported in (2016) 13 SCC 223, (ii) Union
of
India
and
another
vs.
Vicco
Laboratories, reported in (2007) 13 SCC
270, (iii) Siemens Ltd. vs. State of
Maharashtra and others, reported in
(2006) 12 SCC 33, (iv) Union of India and
another vs. Kunisetty Satyanarayana,
reported in (2006) 12 SCC 28 and (v) State
of U.P. and another vs. Anil Kumar
Ramesh
Chandra
Glass Works
and
another, reported in (2005) 11 SCC 451.

5. On behalf of the petitioner, it
has thus been urged that since the
impugned show cause notice has been
issued in mala fide exercise of power and is
laced with premeditated mind to cancel the
agreement, instant writ petition ought to be
entertained. Shri Misra, learned counsel
representing the petitioner has further
argued that while issuing the impugned
show cause notice various clauses of
Request
for
Proposal
(RFP)
and
Instructions to Bidders have wrongly been
interpreted and accordingly such a show
cause notice having been issued with
premeditation deserves to be quashed.

6. Before considering the rival
submissions made by the learned counsel
representing the respective parties, certain
facts need to be noted by the Court for
appropriate adjudication of the issues raised
before us.

7. A decision was taken by LDA to
develop "Mohan Road Avasiya Yojna,
Lucknow"
through
Public
Private
Partnership (PPP) Mode and accordingly
notice of Invitation for Selection of
Developer for Development, Marketing and
Sale of Integrated Real Estate was published
along with RFP which included instructions
for Bidders. Pursuant to the said notice, the
petitioner which is a limited company
incorporated under the Companies Act,
1956 and is engaged in construction and
infrastructure development related business,
submitted its bid. The technical bids of the
participating bidders were opened on
15.02.2019 and financial bid was opened on
28.02.2019. As per RFP, Letter of Award
(LOA) was to be issued within ten days of
opening of the financial bid and

8. The petitioner having been
declared to be successful bidder was issued
LOA on 29.12.2021 whereby the petitioner
was required to present the stamp papers
etc. so that Concession Agreement may be
executed within 20 days. On 06.01.2022 the
Concession
Agreement
was
executed
between LDA and the petitioner. Thereafter
in the month of March, 2022 the petitioner
submitted a Detailed Project Report and lay
out of the first phase of the Project to LDA.
Possession of land of two villages where
Project is to be executed has also been
handed over to the petitioner on 22.04.2022.

9. Now the impugned show
cause notice has been issued requiring the
petitioner to show cause as to why the
Concession
Agreement
may
not
be
120 INDIAN LAW REPORTS ALLAHABAD SERIES
cancelled and the Performance Security
money may be forfeited.

10. The reason for issuing the
impugned show cause notice which is
reflected from a perusal of the same is
that, according to LDA the petitioner had
participated in the bid as a single entity
and as per the RFP, it was required to
form Special Purpose Vehicle (SPV) to be
incorporated under the Indian Companies
Act, 2013 to execute the Concession
Agreement and implement the Project and
that the petitioner did not form the SPV
and executed the Concession Agreement
itself which is in violation of the
conditions of RFP and as such in terms of
the provisions contained in clause 2.12.4
of RFP the Concession Agreement is
liable to be terminated and LDA shall be
entitled
to
forfeit
the
Performance
Security.

11. Certain clauses of RFP,
which are relevant for adjudication of the
issues raised in this writ petition, are
extracted herein below:

"Clause 2.2.1.1. The Bidder for
qualification and selection may be a single
entity or a group of entities together with
their Associates
(the
"Consortium"),
coming together to implement the Project.
However, no Bidder applying individually
or as a Member of a Consortium, as the
case may be, can be Member of another
Bidder Consortium. The term Biddere
used herein would apply to both a single
entity and a Consortium."

Clause 2.2.1.2. The Bidder may
only be a private entity (required to be a
company
incorporated
under
the
Companies
Act,
1956/2013
or
a
consortium
of
companies
which
undertakes
to
incorporate
a
SPV),
government-owned
entity
incorporated
under the Indian Companies Act, 2013 or
similar entity under applicable laws of
foreign countries or any combination of
them with a formal intent to enter into an
agreement or under an existing agreement
to form a Consortium. A consortium shall
be eligible for consideration subject to the
conditions set out in Clause 2.5.5. below.

Clause 2.5.5. Where the Bidder
is a single entity, it may be required to
form an appropriate special Purpose
vehicle, incorporated under the Indian
Companies act, 2013 (the "SPV"), to
execute the Concession Agreement and
implement the Project. In case the Bidder
is a Consortium, it shall, in addition to
forming
an
SPV,
comply
with
the
following additional requirements:

.............................................................

"Clause 2.12.4. In case it is
found during the evaluation or at any time
before
signing
of
the
Concession
Agreement or after its execution and
during the period of subsistence thereof,
including the Development Rights thereby
grated by the Authority, that one or more
of the qualification conditions have not
been met by the Bidder, or the Bidder has
made material misrepresentation or has
given any materially incorrect or false
information,
the
Bidder
shall
be
disqualified forthwith if not yet appointed
as the Developer either by issue of the
LOA or entering into of the Concession
Agreement, and if the Selected Bidder has
already been issued the LOA or has
entered into the Concession Agreement, as
the case may be, the same shall,
notwithstanding anything to the contrary
contained therein or in this RFP, be liable
to be terminated, by a communication in
writing by the authority to the Selected
Bidder or the Developer, as the case may
be without the Authority being liable in
any manner whatsoever to the Selected
Bidder or. In such an event, the Authority
8 All. M/S Omaxe Ltd. Vs. L.D.A. & Anr.
121
shall be entitled to forfeit and appropriate
the Bid security or Performance Security,
as the case may be, as Damages, without
prejudice to any other right or remedy that
may be available to the Authority under
the
Bidding
Documents
and/or
the
Concession Agreement, or otherwise."

12. Clauses 'D', 'E' and 'F' of
the
recital
part
of
the
Concession
Agreement are also relevant, which are
quoted hereunder:-

D.
The
Selected
Bidder/Consortium has since promoted and
incorporated the Developer as a limited
liability company under the Companies Act
2013 and has requested the Authority to
accept the Developer as the entity which
shall undertake and perform the obligations
and exercise the rights of the selected
Bidder/Consortium
under
the
LOA,
including the obligation to enter into this
Agreement pursuant to the LOA for
undertaking the Project.

E. By its letter dated 25 Nov 2021,
the Developer has also joined in the said
request of the Selected Bidder/consortium to
the Authority to accept it as the entity which
shall undertake and perform the obligations
and exercise the rights of the Selected
Bidder/Consortium including the obligation
to enter into this Agreement pursuant to the
LOA.
The
Developer
has
further
represented to the effect that it has been
promoted
by
the
Selected
Bidder/Consortium for the purposes hereof.

F. The Authority has accepted the
said request of the Developer and has
accordingly agreed to enter into this
Agreement
with
the
Developer
for
implementation of the Project, subject to
and on the terms and conditions set forth
hereinafter.

13.
Definition
of
'Selected
Bidder' and 'Developer' as occurring in
the Concession Agreement are also quoted
hereunder:

"Selected Bidder" shall have the
meaning ascribed to it in Recital C;

"Developer"
shall
have
the
meaning attributed thereto in the array of
Parties.

14. Laying emphasis on clause
2.2.1.1 of RFP, it has been argued by the
learned counsel for the petitioner that for
qualification and selection in the bid
process, a bidder may be a single entity or
a group of entities together with their
Associates
(the
"Consortium").
Our
attention has also been drawn to clause
2.2.1.2 of RFP by the learned counsel for
the petitioner by submitting that a private
entity which was required to be a company
incorporated under the Companies Act or
a
consortium
of
companies
which
undertakes to incorporate a SPV, could be
bidders.

15. Much emphasis has been laid
by the learned counsel for the petitioner on
clause 2.5.5 of RFP and according to him
where bidder is a single entity, it was not
mandatory for such a single entity bidder to
form SPV, however, where the bidder is a
consortium it was mandatory to form SPV to
execute Concession Agreement. It has been
urged by the learned counsel for the
petitioner that in clause 2.5.5 the occurrence
of the words "may" and "shall" and the
placement of these words are relevant to be
noticed and accordingly if the natural
meaning of these words are given at the
place where these words occur in the said
clause, what comes out is that in case of
single entity bidder formation of SPV was
not mandatory. However, in case the bidder
was a consortium, then on account of the
placement of the word "shall" in clause
2.5.5 it was mandatory to form SPV for
executing Concession Agreement.
122 INDIAN LAW REPORTS ALLAHABAD SERIES

16. Apart from laying emphasis
on the provisions contained in clause 2.5.5
of RFP, it has also been contended on
behalf of the petitioner that at every stage
of the tender process and even after
acceptance of bid and issuance of LOA,
the petitioner and authorities of LDA have
been interacting with each other and
before signing the Concession Agreement
if in the opinion of LDA, SPV was needed
to be formed even in case of single entity
bidder, the petitioner could have been
instructed by the LDA and the petitioner
would have formed the SPV to execute the
Concession
Agreement
in
place
of
executing
the
Concession Agreement
itself. In this view, submission is that the
entire action on the part of the LDA which
has precipitated in issuing the impugned
show cause notice is not only premeditated
but is mala fide as well.

17. It has been argued by the
learned counsel for the petitioner on the
strength of a judgment of Hon'ble
Supreme Court in the case of Manmohan
Nanda
vs.
United
India
Assurance
Company Limited and another, reported
in (2022) 4 SCC 272 that if any
prescription in an instrument is open to
two interpretations or meaning, the
interpretation against the person issuing
document on proforma is to be taken into
account. On behalf of the petitioner, the
judgment of Hon'ble Apex Court in the
case of Wellington Associates Ltd. vs. Kirit
Mehta, reported in (2000) 4 SCC 272 has
also been relied upon to submit that where
a document uses "may" and "shall" to
cover different situations, these words are
to be accorded their natural meaning.

18. Per contra Shri Ratnesh
Chandra, learned counsel representing
the
respondents
has
emphatically
submitted
that
the
writ
petition
is
premature and is not maintainable not
only because it only challenges a show
cause notice but also because it has arisen
out of
contractual
relationship, not
involving any public law element and as
such interference by this Court under
Article 226 of the Constitution of India
has to be very limited. It has further been
argued
by
the
learned
counsel
representing the LDA that in terms of the
provisions contained in clause 2.5.5 of
RFP it was mandatory, both for the single
bidder as also for consortium to form
Special Purpose Vehicle to execute the
Concession Agreement. He has also stated
that as per the law laid down by Hon'ble
Supreme Court in the case of AFCONS
Infrastructure Limited vs. Nagpur Metro
Rail Corporation Limited and another,
reported in (2016) 16 SCC 818, it is the
employer of the Project having authored
the tender document who is the best
person to understand and appreciate its
requirements and interpret its document.
In
this
view,
submission
is
that
interpretation being sought to be given to
clause 2.5.5 by the learned counsel for the
petitioner is not tenable.

19. We have already noticed the
rival submissions made by the learned
counsel representing the respective parties
and have also extracted the relevant
provisions of RFP. Apart from the
aforequoted provisions of RFP, clauses D,
E and F of the recital part of the
Concession Agreement also need to be
noticed and taken note of. Clause D of the
Concession Agreement recites that "the
Selected Bidders/Consortium has since
promoted and incorporated the Developer
as a limited liability company under the
Companies Act and has requested the
Authority (LDA) to accept the Developer
as the entity which shall perform the
obligations
of
the
selected
Bidder/Consortium under the LOA.........".
8 All. M/S Omaxe Ltd. Vs. L.D.A. & Anr.
123
Clause E recites that "by letter dated 25
Nov 2021, the Developer has also joined
the Authority (LDA) in the request of the
Selected Bidder/Consortium to accept it
(Developer) as the entity which shall
undertake and perform the obligations
and exercise rights of the Selected
Bidder". Clause F recites that "the
Authority has accepted the request of the
Developer and has accordingly agreed to
enter into this agreement (Concession
Agreement)
with
the
Developer
for
implementation of the Project.

It is also to be noticed that
"Selected Bidder" and "Developer" are
two separate entities in terms of the
definitions of these two terms available in
the Concession Agreement.

20. Clause 2.12.4 of RFP permits
(i) disqualification of bidder before the
bidder is appointed as Developer either by
issuing
LOA
or
by
entering
into
Concession
Agreement,
and
(ii)
termination of Concession Agreement if
the Selected Bidder has been issued LOA
or has entered into the Concession
Agreement. The grounds for disqualifying
as bidder and terminating Concession
Agreement
are
misrepresentation
or
furnishing any materially incorrect or
false
information.
Another
ground
available for disqualifying the bidder is a
situation where one or more qualification
conditions have not been met by the
bidder.

21. In the instant case, what
appears from the submissions made on
behalf of the respective parties and on
perusal of the records available before us is
that the petitioner had participated in the bid
process as a single entity and admittedly it
had not formed the Special Purpose Vehicle.
Whether it was mandatory for a single entity
bidder, as per the provisions of RFP to form
SPV, is an issue which emerges in this case.
Another issue is as to why recitals in
clauses, D, E and F of the Concession
Agreement have been made which suggest
that the bidder has since promoted and
incorporated the Developer though no
incorporation of SPV in this case has been
made by the bidder (petitioner).

22. The aforesaid issues though
arise in the matter, however, there is no
decision as yet on these issues and the LDA
has issued a show cause notice only on a
prima facie opinion requiring the petitioner
to submit its explanation. We find it
appropriate to observe that the relationship
between the petitioner and LDA in this case
is primarily contractual. If the impugned
notice has been issued by the Secretary of
Lucknow
Development
Authority
on
noticing alleged flaws and non-fulfillment
of conditions of RFP to the petitioner for
submitting its reply and stating its case, we
do not find any illegality in such a notice. It
is not that the impugned notice does not
disclose the grounds on the basis of which
the LDA proposes to proceed against the
petitioner. From the material available on
record including the contents of notice, at
this stage we are unable to agree with the
submissions of the learned counsel for the
petitioner that the notice is premeditated or
has been issued with malice.

23. We may also observe that
merely because the impugned show cause
notice recites certain facts including the
perception of LDA about the interpretation
of certain clauses of RFP and Concession
Agreement, it cannot be said that the entire
issue has been pre-judged by LDA and
notice is premeditated for the reason that the
contents of the notice are based only on
prima facie opinion.

24. The petitioner will have the
amplest opportunity to put forth its case
and make its submission in reply to the
show cause notice and accordingly we do
124 INDIAN LAW REPORTS ALLAHABAD SERIES
not find it appropriate to interfere in this
petition for the reason that, in our
considered opinion, no interference is
warranted. The writ petition is, thus,
dismissed.

25. However, we provide fifteen
days further time from today to the
petitioner to submit its reply to the
impugned show cause notice. It will be
open to the petitioner to take all the pleas
which may be available to it under law
and to enclose all the documents on which
it intends to rely. We specifically direct
that once reply to the impugned show
cause notice is furnished by the petitioner,
appropriate authority of the Lucknow
Development
Authority
shall
provide
opportunity of personal hearing to the
authorized representative of the petitioner
before taking final decision in the matter.

26. There will be no order as to
costs."

5. Most of the further submissions
made by the learned counsel for the parties
on
10.08.2022
and
11.08.2022
was
reiteration of the arguments made earlier
which have already been considered in the
aforementioned draft judgment and the
same, as observed above, forms part of this
judgment.

6. Dr. L. P. Misra, learned counsel
representing the petitioner has submitted
that the impugned show cause notice has
been issued by the Secretary of Lucknow
Development
Authority
whereas
the
contract was entered into between the
petitioner and the "Authority" created
under section 4 of Uttar Pradesh Urban and
Planning
Development
Act,
1973
(hereinafter referred to as "the Act, 1973")
and as such the impugned notice is without
jurisdiction. It has further been argued that
the impugned show cause notice has
travelled beyond the contract. Shri Misra
has reiterated that in terms of various
clauses of RFP, there could be two separate
entities, which were entitled to participate
in the bid process, namely, (i) individual
entity and (ii) consortium and that the
provisions of RFP for issuing the impugned
show cause notice relate to consortium and
not to an individual entity. Shri Misra also
reiterated the arguments raised earlier that
the impugned show cause notice can
always be challenged by filing the writ
petition if it is without jurisdiction or has
been issued arbitrarily or is based on nonexistent and baseless allegations. All other
arguments raised on behalf of the petitioner
have already been dealt with in our draft
judgment dated 10.08.2022 which forms
part of this judgment except the ground
taken by the petitioner that the impugned
show cause notice is without jurisdiction.

7.

It
has
been
stated
that
"Development
Authority"
is
a
body
corporate in terms of the provisions
contained in section 4 of the Act,1973
which comprises of various officials,
including a Chairman and Vice-Chairman
to be appointed by the State Government
and accordingly the notice ought to have
been issued by the said body corporate or
by its approval. It is, thus, stated that it is
not the "Development Authority" which has
issued the show cause notice; rather the
Secretary
of
Lucknow
Development
Authority, who has issued the notice, which
renders it to be without jurisdiction.

8. The aforesaid submission advanced
by the learned counsel for the petitioner is
not tenable for the reason that authority of
the
Secretary,
Lucknow
Development
Authority to issue the show cause notice is
traceable to the provisions contained in
Regulation 2 (8) of "The Lucknow
8 All. M/S Omaxe Ltd. Vs. L.D.A. & Anr.
125
Development Authority (Powers and
Duties of the Secretary and Chief
Accounts Officer) Regulations, 1983".
The said Regulations are statutory in nature
having been framed by the LDA in terms of
the power vested in it under section 56 read
with section 5 of the Act, 1973. Section 5 is
quoted hereunder:-

"5. Staff of the Authority:-(1)
The State Government may appoint two
suitable
persons
respectively
as
the
Secretary and the Chief Accounts Officer
of the Authority who shall exercise such
powers and perform such duties as may be
prescribed by regulations or delegated to
them by the Authority or its ViceChairman.

(2) Subject to such control and
restrictions as may be determined by
general or special order of the State
Government, the Authority may appoint
such number of other officer and
employees as may be necessary for the
efficient performance of its functions and
may determine their designations and
grades.

(3) The Secretary, the Chief
Accounts Officer and other Officers and
employees of the Authority shall be
entitled to receive from the funds of the
Authority such salaries and allowances
and shall be governed by such other
conditions
of
service
as
may
be
determined by regulations made in that
behalf."

9. From a perusal of the aforequoted
section 5 of the Act, 1973, it is clear that
the Secretary of the Development Authority
is to be appointed by the State Government
who shall exercise such powers and
perform such duties as may be, (i)
prescribed by Regulations, or (ii) delegated
to him by the Authority or its ViceChairman. Section 56 of the Act, 1973
vests power in an Authority to make
regulations for administration of affairs of
the Authority which includes regulations
regarding the powers and duties of the
Secretary and Chief Accounts Officer of the
Authority. Relevant portion of section 56 of
the Act, 1973 is quoted hereunder:

"56.Power to make regulations.-
(1) An Authority may, with the previous
approval of the State Government, make
regulations not inconsistent with this Act
and the rule made there under for the
administration of the affairs of the
Authority.

(2) In particular, and without
prejudice
to
the
generality
of
the
foregoing power, such regulations may
provide for all or any of the following
matters, namely-

(a) .................................

(b) the powers and duties of the
Secretary and Chief Accounts Officer of
the Authority;

(c) .....................

(d).....................

(e) .....................

(f).......................

(g) ......................

(h) ......................

(i) .......................

(3)..........................."

10. Regulation 2(8) of the Regulations
1983 is quoted hereunder:-

"2.
The
Secretary
of
the
Authority shall, subject to the provisions
of
the Act
and
the
rules
framed
thereunder, exercise the powers and
perform the duties prescribed hereunder.

(1)...........................................

(2)...........................................

(3)...........................................
126 INDIAN LAW REPORTS ALLAHABAD SERIES

(4) ..........................................

(5)...........................................

(6)...........................................

(7)...........................................

(8) Subject to the decision of the
Authority, the Chairman and the ViceChairman,
general
administration,
supervision and overall control over the
administrative
and
developmental
activities and personnel administration of
the Authority;"

11. Accordingly, Regulation 2(8) of
the aforequoted Regulations, which as
observed above, are statutory in nature
provides
that
the
Secretary
of
"Development Authority" shall exercise
powers and perform duties in relation to
general administration, supervision and
overall control over the administrative and
developmental activities.

12. The Concession Agreement in the
instant case was entered into between the
parties in relation to developing the
township which, in our considered opinion,
will be covered within the meaning of
developmental activities undertaken by the
LDA and as such the Secretary does have
the power and he is possessed with
necessary authority to issue the show cause
notice
in
relation
to
developmental
activities as he exercises not only general
administration and supervision but overall
control over the developmental activities
as well. This exercise of power, however, is
subject only to decision of the Authority or
that of the Chairman and the ViceChairman. In view of the provisions
contained in Regulation 2(8) of the
Regulations, 1983, we do not have any
ambiguity in our mind that the impugned
show cause notice cannot be termed to be
without jurisdiction.

13. For the reasons aforesaid and also
for the reasons indicated in the draft
judgment dated 10.08.2022 which is part of
this judgment as well, we are not inclined
to interfere in this writ petition which is
hereby dismissed.

14. However, we provide fifteen days
further time to the petitioner to submit its
reply to the impugned show cause notice
and make it open to the petitioner to take
all the pleas which may be available to it
under law and to furnish all such
documents on which it intends to rely.

15. It is further directed that once
reply is received within the time being
stipulated herein, the appropriate authority
of Lucknow Development Authority shall
provide opportunity of personal hearing to
the
authorized
representative
of
the
petitioner before taking final decision in the
matter.

16. Parties to bear their own costs.
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(2022) 8 ILRA 126
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 16.08.2022

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE RAJAN ROY, J.
THE HON'BLE VIVEK CHAUDHARY, J.

Writ C No. 8870 of 2020

Prayas Buildcon Pvt. Ltd. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Mr. Ravi Gupta, Senior Advocate, Mr. Palash
Banerjee, Mr. Aviral Raj Singh