# M/S Sundaram Developers Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2024) 2 ILRA 371
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-05
- **Case number:** Writ C No. 9211 of 2011
- **Bench:** Vivek Chaudhary, Manish Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sundaram-developers-pvt-ltd-v-state-of-u-p-ors-51428
- **Pages:** 15

## Headnote

Civil Law - U.P. Municipal Corporations
Act, 1959 - Section 129 - Land Acquisition
Act, 1894 - Sections 4 & 6 - Cancellation of
Lease Deed - Principles of Natural Justice -
Public Trust Doctrine - Malafide Exercise of
Power - Article 226

The petitioners, M/s Sundaram Developers Pvt.
Lt and M/s Eldeco Housing and Industries,
challenged the cancellation of a lease deed
dated
24.06.1995
executed
by
Lucknow
Municipal
Corporation
in
favor
of
M/s
372 INDIAN LAW REPORTS ALLAHABAD SERIES
Mansarovar Sahkari Awas Samiti Lt (MSAS) for
land in Village Jiamau, Lucknow, vide order
dated 01.06.2013, and sought to restrain
interference with their possession. The lease,
covering Khasra Nos. 209, 220, 221, 222, 224
(4 Bigha, 12 Biswa, 2 Biswansi), was granted to
MSAS for 30 years for group housing, but was
cancelled due to non-submission of a layout
plan, lack of internal/external development, and
transfer of the entire land to private developers
(petitioners) for profit, violating lease terms.
Writ Petition No. 9211 of 2011 sought to
prevent interference in possession, alleging
unauthorized St. action despite the land not
being under acquisition, and obtained a status
quo order. Writ Petitions Nos. 5539 and 5591 of
2013 challenged the lease cancellation. Held:
The Municipal Corporation's resolution (No. 70,
dated 05.01.1995) and lease deed were ultra
vires Section 129 of the 1959 Act, as they
lacked a defined public purpose under Sections
114 or 115, such as a housing scheme, and
were executed without transparent bidding,
rendering them a fraud on the statute. The land
was transferred to petitioners through five
individuals in a surreptitious manner, without
sanctioned maps or development, defeating the
public trust doctrine. The absence of notice to
petitioners was immaterial, as per St. of U.P. Vs
Sudheer Kumar Singh (AIR 2020 SC 5215),
since undisputed facts showed no prejudice, and
only
one
conclusion-illegality
of
the
resolution-was possible. The plea of estoppel
failed, as no development occurred, and the
initial resolution was void ab initio. The Supreme
Court's rulings in Uddar Gagan Properties Lt
Vs Sant Singh ((2016) 11 SCC 378) and NOIDA
Entrepreneurs Assn. Vs NOIDA ((2011) 6 SCC
508) underscored that malafide, hasty actions
bypassing legal procedures are voi The
cancellation was upheld, Writ Petitions Nos.
5539 and 5591 of 2013 were dismissed, and
Writ Petition No. 9211 of 2011 was rendered
infructuous, as the petitioners had no rights
post-cancellation. Interim orders were discharge

Case Law Cited:

## Text

_Characters 0–39,969 of 51,574. This is a partial read: ask again with offset=39969 for what follows._

2 All. M/S Sundaram Developers Pvt. Ltd. Vs. State of U.P. & Ors.
371
been clearly indicated by petitioner. It is
also evident that at the time of resignation,
allotment as per the second counselling had
not been made, which was subsequently
done on 26.11.2022 and has been brought
on record as annexure-7 to writ petition.

12. The opposite parties have not
denied the fact that petitioner has in fact
been allotted a Medical College in her
home state in the second round of
counselling. The reason therefore for
resigning from allotment made in the first
counseling is evident as is the fact that
petitioner has definitely been allotted a
Medical College in the second counselling.

13. In the considered opinion of this
Court, conditions indicated in paragraph
7(a) are therefore substantially complied
with. It is also the opinion of this Court
that provisions of paragraph 7(a) of
Government Order dated 21.10.2022 have
been specifically inserted so as not to
permit unjust enrichment by a College for
retaining fees without imparting studies to
a student.

14. So far as reliance placed by
learned counsel for opposite party no.2
upon second proviso to paragraph 7(a) is
concerned, it is evident that the same will
be inapplicable in the present case since it
pertains to those situation where a student
has not been provided any seat allocation
even in second counselling.

15. In view of discussions made
herein above, it is evident that case of
petitioner is covered under paragraph 7(a)
of Government Order dated 21.10.2022.

16. Therefore, a writ in nature of
Mandamus is issued commanding opposite
party no.2 to refund the permissible amount
as per 7(a) of Government Order dated
21.10.2022 to petitioner within a period of
two weeks from the date of certified copy
of this order is produced before the said
authority.

17. Consequently, the writ petition
succeeds and is allowed. Parties to bear
their own cost.
----------
(2024) 2 ILRA 371
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 05.02.2024
BEFORE

THE HON'BLE VIVEK CHAUDHARY, J.
THE HON'BLE MANISH KUMAR, J.

Writ C No. 9211 of 2011
with
Writ C No. 5539 of 2013
with
Writ C No. 5591 of 2013

M/S Sundaram Developers Pvt. Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sachin Garg, Jaspreet Singh, Sachin Garg

Counsel for the Respondents:
C.S.C., Rajesh Singh Chauhan, Shailendra
Singh Chauhan, Shashi Prakash Singh

Civil Law - U.P. Municipal Corporations
Act, 1959 - Section 129 - Land Acquisition
Act, 1894 - Sections 4 & 6 - Cancellation of
Lease Deed - Principles of Natural Justice -
Public Trust Doctrine - Malafide Exercise of
Power - Article 226

The petitioners, M/s Sundaram Developers Pvt.
Lt and M/s Eldeco Housing and Industries,
challenged the cancellation of a lease deed
dated
24.06.1995
executed
by
Lucknow
Municipal
Corporation
in
favor
of
M/s
372 INDIAN LAW REPORTS ALLAHABAD SERIES
Mansarovar Sahkari Awas Samiti Lt (MSAS) for
land in Village Jiamau, Lucknow, vide order
dated 01.06.2013, and sought to restrain
interference with their possession. The lease,
covering Khasra Nos. 209, 220, 221, 222, 224
(4 Bigha, 12 Biswa, 2 Biswansi), was granted to
MSAS for 30 years for group housing, but was
cancelled due to non-submission of a layout
plan, lack of internal/external development, and
transfer of the entire land to private developers
(petitioners) for profit, violating lease terms.
Writ Petition No. 9211 of 2011 sought to
prevent interference in possession, alleging
unauthorized St. action despite the land not
being under acquisition, and obtained a status
quo order. Writ Petitions Nos. 5539 and 5591 of
2013 challenged the lease cancellation. Held:
The Municipal Corporation's resolution (No. 70,
dated 05.01.1995) and lease deed were ultra
vires Section 129 of the 1959 Act, as they
lacked a defined public purpose under Sections
114 or 115, such as a housing scheme, and
were executed without transparent bidding,
rendering them a fraud on the statute. The land
was transferred to petitioners through five
individuals in a surreptitious manner, without
sanctioned maps or development, defeating the
public trust doctrine. The absence of notice to
petitioners was immaterial, as per St. of U.P. Vs
Sudheer Kumar Singh (AIR 2020 SC 5215),
since undisputed facts showed no prejudice, and
only
one
conclusion-illegality
of
the
resolution-was possible. The plea of estoppel
failed, as no development occurred, and the
initial resolution was void ab initio. The Supreme
Court's rulings in Uddar Gagan Properties Lt
Vs Sant Singh ((2016) 11 SCC 378) and NOIDA
Entrepreneurs Assn. Vs NOIDA ((2011) 6 SCC
508) underscored that malafide, hasty actions
bypassing legal procedures are voi The
cancellation was upheld, Writ Petitions Nos.
5539 and 5591 of 2013 were dismissed, and
Writ Petition No. 9211 of 2011 was rendered
infructuous, as the petitioners had no rights
post-cancellation. Interim orders were discharge

Case Law Cited:

1. St. of U.P. Vs Sudheer Kumar Singh, AIR
2020 SC 5215

2. Uddar Gagan Properties Lt Vs Sant Singh,
(2016) 11 SCC 378
3. NOIDA Entrepreneurs Assn. Vs NOIDA,
(2011) 6 SCC 508

4. M/s Daffodills Pharmaceuticals Lt Vs St. of
U.P., (2020) 18 SCC 550

5. St. of U.P. Vs Sudhir Kumar, (2021) 19 SCC
706

6. St. Bank of India Vs Rajesh Agarwal, (2023) 6
SCC 1

7. Sunil Pannal Banthia Vs City & Industrial
Development Corporation, (2007) 10 SCC 674

8. ITC Lt Vs St. of U.P., (2011) 7 SCC 493

9. L. Sreedhar Vs K.M. Munireddy, (2003) 2 SCC
355

10. Kamaljit Singh Vs Sarabjit Singh, (2014) 16
SCC 472

11. St. of Punjab Vs Gurdial Singh, (1980) 2 SCC
471

12. Greater Noida Industrial Development
Authority Vs Devendra Kumar, (2011) 12 SCC
375

13. St. of Punjab Vs Ramjilal, (1970) 3 SCC 602

14. Express Newspapers (P) Lt Vs U.O.I.,
(1986) 1 SCC 133

15. Jagir Singh Vs Ranbir Singh, (1979) 1 SCC
560

16. Bahadursinh Lakhubhai Gohil Vs Jagdishbhai
M. Kamalia, (2004) 2 SCC 65

17. Zenit Mataplast (P) Lt Vs St. of
Maharashtra, (2009) 10 SCC 388

18. Erusian Equipment & Chemicals Lt Vs St.
of W. , (1975) 1 SCC 70

19. Ramana Dayaram Shetty Vs International
Airport Authority of India, (1979) 3 SCC 489

20. Haji T.M. Hassan Rawther Vs Kerala
Financial Corpn., (1988) 1 SCC 166
2 All. M/S Sundaram Developers Pvt. Ltd. Vs. State of U.P. & Ors.
373
21. Shrilekha Vidyarthi Vs St. of U.P., (1991) 1
SCC 212

22. M.I. Builders (P) Lt Vs Radhey Shyam
Sahu, (1999) 6 SCC 464

23. Commr. of Police Vs Gordhandas Bhanji,
1951 SCC 1088

24. Sirsi Municipality Vs Cecelia Kom Francis
Tellis, (1973) 1 SCC 409

25. Collector (District Magistrate) Vs Raja Ram
Jaiswal, (1985) 3 SCC 1

26. Delhi Admn. Vs Manohar Lal, (2002) 7 SCC
222

27. N. Jayal Vs U.O.I., (2004) 9 SCC 362

(Delivered by Hon'ble Vivek Kumar
Chaudhary, J.
&
Hon'ble Manish Kumar, J.)

1. Heard Sri N.K. Seth, learned Senior
Advocate assisted by Sri Sachin Garg,
learned counsels for petitioner in Writ
Petition No.9211 (M/B) of 2011 &
Writ Petition No.5539 (M/B) of 2013,
Sri Sachin Garg, learned counsel for
petitioner in Writ Petition No.5591
(M/B) of 2013 and Sri Shailendra
Singh Chauhan, learned counsel for
Lucknow Municipal Corporation, Sri
Puneet Chandra, learned counsel for
Lucknow Development Authority and
learned Additional Chief Standing
Counsel for State-respondents. The
arguments were made by Sri N.K.
Seth, learned Senior Advocate assisted
by Sri Sachin Garg, learned counsel
for petitioner in Writ Petition No.5539
(M/B) of 2013. Sri Sachin Garg,
Advocate appearing in connected Writ
Petition No.5591 (M/B) of 2013 has
adopted all the arguments of Writ
Petition 5539 (M/B) of 2013.

2. These three writ petitions being
Writ Petition No.9211 (M/B) of 2011, Writ
petition no. 5539 (M/B) of 2013 and Writ C
No. 5591 (M/B) of 2013 are being heard
and decided together by a common
judgment. Writ Petition No.9211 (M/B) of
2011 filed by Ms. Sundaram Developers
Pvt. Ltd. Lucknow could have been
decided on the very first date itself,
however, an order of status-quo was passed
in the same on 16.09.2011 which continues
till date. By way of Writ Petition No.9211
(M/B) of 2011, petitioner approached this
Court claiming that, though, land in dispute
bearing plot nos. P-9, P-10, P-12, P-13
(Part of Khasra Plot Nos. 209, 220, 221,
223 & 224) situated at Village Jiamau,
Ward Vikrmaditya, Lucknow is not notified
for acquisition but still in the garb of
acquisition respondents are trying to
interfere in possession of petitioner and
thus got an order of status-quo. In the
counter affidavit, respondents accepted that
the land in dispute is not under acquisition
and they have no claim but, still the writ
petition was never disposed of and was got
connected with the other two aforesaid writ
petitions which are on entirely different
causes. Writ Petition No.5539 (M/B) of
2013 and Writ Petition No.5591 (M/B) of
2013 challenge order dated 01.06.2013
passed by respondent no.2 cancelling lease
deed dated 24.06.1995 executed in favour
of M/s Mansarover Sahkari Awas Samiti
Ltd. (M/s MSAS). Further, a mandamus is
sought
directing
respondents
not
to
interfere in their peaceful possession over
the property in dispute. Facts of both Writ
Petition No.5539 (M/B) of 2013 and Writ
Petition No.5591 (M/B) of 2013 are nearly
same and thus, are being heard and decided
together. No stay order was granted in the
aforesaid two writ petitions which had
entirely separate cause of action, however,
in view of status-quo order passed in Writ
374 INDIAN LAW REPORTS ALLAHABAD SERIES
Petition
No.9211
(M/B)
of
2011,
respondents did not take any steps to take
possession of the property in dispute
through-out the last ten years.

3. The order dated 01.06.2013 cancels
the lease deed executed in favour of M/s
Mansarovar Sahkari Awas Samiti Ltd. (M/s
MSAS) on the grounds that as per the terms
of lease internal or external development is
not effected and even the layout plan of the
land is not presented before the Municipal
Corporation, despite specific order of High
Court dated 30.11.2002, which provided for
submission of layout plan within ten days
of handing over of possession; though the
land was to be developed for the members
of cooperative society but neither the list of
members of cooperative society, nor any
intimation of transfer of land to its
members was provided and, in fact, the
entire land was sold for earning profits; and
further details were not provided to the
Municipal
Corporation
which
were
repeatedly asked for by the Municipal
Corporation.

4. Facts of case are that Municipal
Corporation Lucknow in its meeting held
on 05.01.1995 passed a resolution No.70
whereby it provided for execution of a
lease for 30 years of property bearing
Khasra No.209, 220, 221, 222, 224 total
area 4 Bigha, 12 Biswa, 2 Biswansi situated
at Village Jiamau, Pargana and TehsilLucknow at the rate of Rs. 2,50,000/- per
bigha (Total Rs. 11,51,250/-) in favour of
M/s MSAS. After a period of 30 years, the
lease could be renewed for further two term
of 30 years each, with enhancement of 50%
of lease rent. In furtherance of said
resolution, a lease deed was executed on
24.06.1995 by the Mukhya Nagar Adhikari,
Municipal Corporation Lucknow in favour
of M/s MSAS. The lease deed in addition
to the aforesaid terms provided that the
lessee can transfer lease land or any part of
it and for the same, it would not require any
prior permission from the lessor. The lessee
shall
make
internal
and
external
development as per the master plan. It
appears
that
the
land
was
neither
demarcated by Municipal Corporation nor
possession thereof was given to M/s
MSAS, hence, it filed a Writ Petition
No.7060 (M/B) of 2002 before this Court.
The said writ petition was disposed of on
30.11.2002 with the following order:-

Heard the learned counsel for the
petitioner and St Anand Swaroop Rai,
Advocate, who has put in appearance on
behalf of the opposite parties.

The petitioner has alleged that
the lease deed dated 24.6.1995 was
executed by the then Lucknow Nagar
Nigam in favour of the petitioner's society
for the Group Housing. The grievance of
the petitioner is that the opposite parties
have not demarcated the area on the spot in
spite of their repented requests and they
have also not put the society in possession
of the property.

The learned counsel appearing
on behalf of the opposite parties submits
that the petitioner has not submitted the lay
out plan.

We
have
considered
the
arguments of the learned counsel for the
parties and gone through the record. There
is no dispute that lease deed dated
24.6.1995 was executed im favour of the
petitioner's
society
by
the
Lucknow
Municipal Corporation. The petitioner has
approached to the opposite parties for the
demarcation of the area on the spot and for
the physical possession.

Without entering into the merits
of the case, the writ petition is finally
disposed of with a direction to the opposite
2 All. M/S Sundaram Developers Pvt. Ltd. Vs. State of U.P. & Ors.
375
parties to demarcate the area in pursuance
of the lease deed dated 24.6.1995 on the
spot within four weeks from the date a
certified copy of this order is produced and
as soon as the area is demarcated and the
petitioner is put in possession, the
petitioner shall furnish the lay out plan to
the opposite parties within ten days
thereafter.

Dt: 30.11.2002.

Sks

The office is directed to issue a
certified copy of this order to the learned
counsel for the petitioner within two days
on payment of necessary charges.

Dt: 30.11.2002

sks

5. In furtherance thereof, possession
of the land was handed over to the M/s
MSAS. Though the order directed M/s
MSAS to furnish the lay out plan to the
opposite party within ten days thereafter,
however, no such plan was ever handed
over by the M/s MSAS to the Municipal
Corporation.
The
entire
land
was
transferred to the petitioners by M/s MSAS
in the following manner:-

Writ Petition No.5539 (M/B) of 2013
1. Plot
No.9
consisting
of
part of Gata
Nos.220,
221
& 223, area
3100 sq. meter
By sale deed
dated
25.05.2004 M/s
MSAS sold to
Sri Vishwajeet
Singh
s/o
Batukeshwar
Dutt Singh
By
sale
deed
dated 04.06.2004
Sri
Vishwajeet
Singh
sold
to
M/s
Sunderam
Developers Pvt.
Ltd. (Petitioner)
2. Plot
No.10
consisting
of
part of Gata
Nos.220,
221
and 223, area
3000 sq. meter
By sale deed
dated
25.05.2004 M/s
MSAS sold to
Sri
Narendrajeet
Singh
s/o
Batukeshwar
Dutt
By
sale
deed
dated 04.06.2004
Sri Narendrajeet
Singh
sold
to
M/s
Sunderam
Developers Pvt.
Ltd. (Petitioner)
3. Plot
No.12
consisting
of
By sale deed
dated
By
sale
deed
dated 16.06.2008
part of Gata
No.220,
221,
222,
223
&
224, area 394
sq. meter
29.05.2008 M/s
MSAS sold to
Sri
Arjun
Singh s/o Sri
S.P. Singh
Sri Arjun Singh
sold
to
M/s
Sunderam
Developers Pvt.
Ltd. (Petitioner)

4. Plot
No.13
consisting
of
part of Gata
No.220,
221,
222,
223
&
224, area 206
sq. meter
By sale deed
dated
18.06.2009 M/s
MSAS sold to
Sri
Arjun
Singh s/o Sri
S.P. Singh
By
sale
deed
dated 25.06.2009
Sri Arjun Singh
sold
to
M/s
Sunderam
Developers Pvt.
Ltd. (Petitioner)

Writ Petition No.5591 (M/B) of 2013
1.
Plot
No.6
consisting
of part of
Gata
Nos.
206, 207 &
209,
area
3840
sq.
meter
By sale deed
dated
30.04.2002 M/s
MSAS sold to
Sri
Dhruv
Singh s/o Sri
Seeta
Saran
Singh

By sale deed dated
03.08.2004
Sri
Dhruv Singh sold
to
M/s
Eldeco
Housing
and
Industries
(Petitioner)
2.
Plot
No.7
consisting
of part of
Gata
Nos.
206,
207,
208 & 209,
area
2760
sq. meter
By sale deed
dated
03.05.2002 M/s
MSAS sold to
Sri
Arjun
Singh s/o Sri
S.P. Singh
By sale deed dated
03.08.2004
Sri
Arjun Singh sold
to
M/s
Eldeco
Housing
and
Industries
(Petitioner)
3.
Plot
No.8
consisting
of part of
Gata
Nos.
207,
208,
209
and
221,
area
2395
sq.
meter
By sale deed
dated
20.05.2002 M/s
MSAS sold to
Sri Veerendra
Singh s/o Sri
Nepal Singh
By sale deed dated
03.08.2004
Sri
Veerendra
Singh
sold to M/s Eldeco
Housing
and
Industries
(Petitioner)
4.
Plot No.11
consisting
of part of
Gata
Nos.
202,
209
and
221,
area
1574
sq. meter

By sale deed
dated
29.05.2008 M/s
MSAS sold to
Sri Veerendra
Singh s/o Sri
Nepal Singh
By sale deed dated
05.07.2008
Sri
Veerendra
Singh
sold to M/s Eldeco
Housing
and
Industries
(Petitioner)
5.
Plot No.14
consisting
of part of
Gata
Nos.
220,
221,
222,223
and
224,
By sale deed
dated
18.06.2009 M/s
MSAS sold to
Sri Veerendra
Singh s/o Sri
Nepal Singh
By sale deed dated
25.06.2009
Sri
Veerendra
Singh
sold to M/s Eldeco
Housing
and
Industries
(Petitioner)
376 INDIAN LAW REPORTS ALLAHABAD SERIES
area 826 sq.
meter

No sanctioned map is filed by
petitioners and thus it is not clear how said
plot numbers were given. But, it is apparent
that entire lease land stood transferred from
M/s MSAS through only five persons to
petitioners.

6. Meanwhile, State of U.P. on
09.04.2010
and
02.06.2010
issued
notifications under Section 4 and Section 6
of Land Acquisition Act, 1894 for the
surrounding areas. The land in dispute was
not covered by the said notifications. The
award of the said acquisition was also
issued but the land in dispute was not
included in the said award also and thus it
remained
unacquired.
Petitioner,
M/s
Sundaram Developers Pvt. Ltd., claimed
interference was being made by the State
authorities in its possession of the property
in dispute and allegedly a boundary wall of
petitioner was also demolished. M/s
Sundaram Developers Pvt. Ltd. thus, filed a
Writ Petition No.9211 of 2011 and in the
same an order of status-quo was passed on
16.09.2011. No such writ petition was filed
by M/s Eldeco Housing and Industries Pvt.
Ltd. or M/s MSAS. On 28.07.2012
Additional
Municipal
Commissioner,
Municipal Corporation, Lucknow issued a
show cause notice to the M/s MSAS
pointing out violation of conditions of lease
deed dated 24.06.1995 and therefore for
cancellation of lease deed. M/s MSAS
submitted its reply on merits to the
Additional Municipal Commissioner on
14.08.2012. In its reply, amongst other
things, it stated that some of the leased
lands have been transferred to some of its
members, but, neither any details were
provided nor it claimed that notice should
also be given to them. Having considered
the reply of the M/s MSAS, by impugned
order dated 01.06.2013, the lease deed
executed in favour of MSAS was cancelled.
Challenging the said show cause notice and
impugned
order
dated
01.06.2013
cancelling the lease deed, petitioners have
filed other two writ petitions.

7. Sri N.K. Seth, learned Senior
Advocate assisted by Sri Sachin Garg,
learned counsel for petitioners emphatically
submits that there is no notice or
opportunity of hearing given to the
petitioner before passing the impugned
order, even though the property had vested
in the petitioner. It is claimed that it is only
the petitioner who had right to contest the
proceedings. He further submits that there
is a specific clause in the lease deed that
transfer of lease land can be made by the
lessee without any prior permission of the
lessor and in fact such transfer had taken
place. He further submits that Municipal
Corporation could have taken the stand that
the lease deed is not in accordance with law
in the earlier Writ Petition No.7060 (M/B)
of 2002 but it never took any such stand.
His next submission is that there can not be
a unilateral cancellation of lease deed and
in fact the Municipal Corporation somehow
wanted to occupy the said land and since it
could not do so it cancelled the lease deed
and this amounts to malice in law. Learned
counsel for the petitioner further submits
that respondent Municipal Corporation is
estopped from cancelling the lease deed
after such a long delay. He submits that
since the resolution was passed, lease deed
was executed and thereafter it was also
sold, therefore, the same can not be
cancelled at all. To buttress his submissions
reliance is placed by petitioners upon the
following judgments:-

on opportunity of hearing:-
2 All. M/S Sundaram Developers Pvt. Ltd. Vs. State of U.P. & Ors.
377

(i) (2020) 18 SCC 550; 'M/s Daffodills
Pharmaceuticals Ltd. And Others Vs. State
of U.P. and another;

(ii) (2021) 19 SCC 706; Civil Appeal
No.3498 of 2020; 'State of U.P. Vs. Sudhir
Kumar and Others;

(iii) (2023) 6 SCC Page 1; 'State Bank
of India Vs. Rajesh Agarwal and Others';

on
unilateral
cancellation
of
allotment:-

(i) (2007) 10 SCC 674; 'Sunil
Pannal Banthia & Others Vs. City &
Industrial Development Corporation of
Maharashtra Ltd. and Another.

(ii) (2011) 7 SCC 493; ITC Ltd.
Vs. State of U.P. and Others.

on estoppel:-

(i) (2003) 2 SCC 355; B.L.
Sreedhar & Others Vs. K.M. Munireddy
(Dead) & Others

(ii) (2014) 16 SCC 472; Kamaljit
Singh Vs. Sarabjit Singh.

8. On the other hand, Sri Shailendra
Singh
Chauhan,
learned
counsel
for
Lucknow Municipal Corporation strongly
submits that the very purpose of providing
the land to a housing cooperative society
was to provide housing facility to the
residents of the Lucknow Municipal
Corporation. M/s MSAS violated the
conditions of the lease deed and neither got
any map sanctioned from the Lucknow
Development Authority nor got the said
land developed to fulfill the housing needs
of the residents of the city. The land was
parked for availing better prices in future
and in fact the manner in which it was sold
to the petitioners, private developers,
proves the same. Even petitioners, till date,
have not utilized the said land for its
original intended purpose. The land till date
is lying undeveloped, unutilized, as it was
given to M/s MSAS under the order of
High Court dated 30.11.2002. Thus, the
benefits which were to be given to the
residents of Lucknow city in the year 1995
are not provided till now, despite nearly 28
years having passed. He states that amongst
other grounds, since the very purpose of the
lease is violated, thus, there is no illegality
in the impugned order. He further submits
that since a reply on merits was filed by
M/s MSAS the same was duly considered
and
since
the
Lucknow
Municipal
Corporation
was
not
informed
that
petitioners had purchased the property,
there was no occasion to grant any
opportunity of hearing to the petitioners.
Even otherwise, petitioners can not have
any better case than the case set up by M/s
MSAS.

9. Learned Additional Chief Standing
Counsel and Sri Puneet Chandra, learned
counsel
for
respondent
development
authority also adopt the submissions made
by the learned counsel for Municipal
Corporation.

10.

We
have
considered
the
submissions of learned counsels for parties
and
perused the
records
with their
assistance.

11. Admittedly, land in dispute was
owned by the Municipal Corporation. The
Municipal Corporation in its meeting dated
05.01.1995 by resolution no.70, resolved
for execution of a lease deed in exercise of
power under Section 129 of the U.P.
Municipal
Corporation
Act
1959
(hereinafter referred to as 'Act of 1959').
The proposal and resolution reads as
follows:-

"v/;{k dh vuqefr ls xzke&t;keÅ
dh [kljk la[;k& 209] 220] 221] 222 o 224 dh
dqy 04 ch?kk 12 fcLok 02 fcLokalh Hkwfe ftyk
vf/kdkjh y[kuÅ }kjk fu/kkZfjr d`f"kd Hkwfe dh
378 INDIAN LAW REPORTS ALLAHABAD SERIES
nj #0 2]50]000-00 izfr ch?ks dh nj ls vkoaf.Vr
dh tkus okyh mDr Hkwfe dk ewY; #0 11]51]25000 gksrk gSA iV~Vk 30 o"kZ dh vof/k mijkUr
30&30 o"kZ ds nks uohuhdj.k bl izfrcU/k ds
lkFk fd izR;sd uohuhdj.k ds le; yht js.V esa
50 izfr'kr o`f) gks tk;sxh] #0 11]51]250-00
okf"kZd yht js.V esa 50 izfr'kr o`f) gks tk;sxhA
#0 11]51]250-00 okf"kZd yht js.V ij ekuljksoj
lgdkjh vkokl lfefr fy0 y[kuÅ ds i{k esa
fofu;ferhdj.k fd;s tkus dk izLrko eq[; uxj
vf/kdkjh dh laLRkqfr fnukad 03-01-1995 ds rgr
dk;Zdkfj.kh ds le{k fopkjkFkZ izLRkqrA

ladYi la0 1⁄4701⁄2% loZ lEEkfRr ls
mijksDrkuqlkj izLrko Lohd`r gqvk rFkk lnu ds
}kjk izfrfu/kk;u ds rgr /kkjk 129 dh 'kfDr;ksa
dk iz;ksx djrs gq;s lnu ds vf/kdkjksa dk iz;ksx
djrs gq;s vuqeksfnu ,oa Lohd`r fd;k x;kA"

12. On the basis of the said resolution,
a lease deed was executed on 24.06.1995. A
perusal of the minutes of the meeting dated
05.01.1995 filed by respondent Municipal
Corporation through an affidavit dated
04.08.2023 show that the proposal to allot
the land in question was not on the day's
agenda and was brought to agenda by
permission of the President. Resolution No.
70 is silent as to why allotment is being
made in favour of M/s MSAS, instead of
allotting the land to the highest bidder
through an open bidding system. During
arguments, a question arose as to whether
such a resolution can be passed and lease
deed be executed by the Municipal
Corporation. Counsel for the petitioner
states that the Municipal Corporation has
full power to dispose of its property by way
of sale or lease. Reliance for the said
purposes is placed upon Section 129(4) of
the Act of 1959. The same reads as
follows:-

"129. Provisions governing
disposal of property. - With respect to the
disposal of property belonging to the
Corporation the following provisions shall
have effect, namely:

(4) The Municipal Commissioner
may with the sanction of the Corporation
lease, sell, let out on hire or otherwise
convey
any
property,
movable
or
immovable belonging to the Corporation. "

13. No doubt Municipal Corporation
has power to dispose of its property by
executing lease deed but the same has to be
done for the purposes of the Act. There is
no absolute power in the Municipal
Corporation to simply sell or lease its land
beyond the purposes of the Act. The power
of the Municipal Corporation is not
absolute and unrestricted but it has to be
exercised within the four corners of express
legislative consent given by the Act of
1959. Sections 114 and 115 provides
obligatory duties and discretionary duties
of the Municipal Corporation. Municipal
Corporation can work and utilize its
properties, both movable and immovable,
for achieving the said objects only. The
corporation holds the property as a trustee
on behalf of people living within its limits.
It is not the absolute owner of the property
to use or abuse it on its whims. The
resolution and the lease deed are absolutely
silent as to the purpose for which the land
is provided to M/s MSAS. The lease deed
merely states that M/s MSAS does not
require any prior sanction from the
Municipal Corporation for selling or
transferring the entire land or any part
thereof to third parties. Learned counsel for
the petitioner states that from the bare
perusal of the resolution, the lease deed and
from the fact that the land was given to M/s
MSAS, a Sahakari Awas Samiti, it can be
inferred that the land was to be developed
for a residential housing scheme for the
residents
of
Lucknow
Municipal
Corporation. Petitioners in both the writ
2 All. M/S Sundaram Developers Pvt. Ltd. Vs. State of U.P. & Ors.
379
petitions are developers and would use the
land for the same purposes. Learned
counsel for the petitioner was asked if the
said purpose is covered under Section 114
or 115 or any other provisions of the Act of
1959. Reference is made by learned
counsel for petitioner to Clause 33 of
Section 114 of the Act of 1959 which
reads:-

"(xxxiii)
town
planning
and
improvement, including slums clearance
and preparation and execution of housing
scheme and laying out new streets."

14. Counsel for the petitioner states
that it is within the power of Corporation to
prepare and execute housing scheme. Thus,
it can also transfer land for the purpose of a
housing scheme. Other than aforesaid, no
other provision could be placed by the
counsel for petitioner to support his
submissions.

15. The term "preparation and
execution of a housing scheme" only
empower the Corporation to itself prepare
and execute the housing scheme. For the
said purposes, the Municipal Corporation is
first to prepare a housing scheme and
thereafter to take steps for its execution.
Municipal Corporation can not transfer
duties/obligations
casted
upon
it
by
legislation in toto to private players. It
ought to have first framed a housing
scheme, identified if any assistance in its
execution is required from private players
and
only
thereafter,
the
Municipal
Corporation should have taken steps as
permissible in law. In the present case the
decision to allot the Municipal land to M/s
MSAS was not even on agenda in the
meeting of Executive Committee dated
05.01.1995. It was added very hastily in a
very
questionable
manner,
with
the
permission of chairman. The entire land
was leased out without reference to any
housing
scheme
of
the
Municipal
Corporation or even providing as to how
the land is to be developed or utilized and
the time period for such utilization. It is not
clear till date as to how and why M/s
MSAS was chosen for allotment of land.
The
manner
in
which
subsequent
transactions took place also create serious
doubts. The land allotted to M/s MSAS was
artificially carved into different smaller
plots of varying length, some close to about
3100sq.m., without getting any map
sanctioned from any authority. As per the
petitioner, these plots were allotted to
members of the M/s MSAS, however, no
list of members was ever provided. As
noted in the chart above, the alleged five
members of the Society after buying plots
from the society sold the entire land to
petitioner-developers within a short period.
There is not a word about any housing
scheme either in the resolution or in the
lease deed. Even the requirement to have a
sanctioned map and to submit it to the
corporation appeared for the first time in
the order of High Court dated 30.11.2002.
It is admitted that no housing scheme was
ever
prepared
by
the
Municipal
Corporation. In fact the lease deed
specifically states that lessee M/s MSAS
shall
get
the
internal
and
external
development of the land made on its
expense as per the master plan of Lucknow
urban area and as per the rules. In the
judgment dated 30.11.2002 passed in Writ
Petition No.7060 (M/B) of 2002, the High
Court had also directed that as soon as the
area is demarcated and M/s MSAS is put in
possession, M/s MSAS shall furnish the lay
out plan to the Corporation within ten days
thereafter. The aforesaid facts clearly
establish that there was no housing scheme
prepared by the Municipal Corporation and
380 INDIAN LAW REPORTS ALLAHABAD SERIES
even the said duty was outsourced to M/s
MSAS. Thus, from the facts and records of
the case, this Court is unable to agree with
the submission of counsel for petitioner
that the land was given for achieving any
purpose prescribed by Section 114 or 115
of Act of 1959. The claimed purpose
"preparation and execution of housing
scheme" is only an after-thought for the
purposes of the present case developed
during course of arguments. Therefore, the
resolution No. 70 and lease deed dated
24.06.1995 executed by the Municipal
Corporation to M/s MSAS does not fall
within the
duties
of
the
Municipal
Corporation and is, therefore, beyond the
powers of the Municipal Corporation
vested in it by the Act of 1959.

16. Learned counsel for petitioner
places reliance upon the communication
dated 17.02.1997 made by U.P. Awas Evam
Vikas Parishad to the Secretary of M/s
MSAS that it has granted sanction for
group housing/multi-story building on the
property
in
dispute.
The
said
communication is filed as annexure no.6 to
the writ petition. There is no sanctioned
map
filed
along
with
the
said
communication. Even during the long
course of argument no such sanctioned map
was placed by the petitioners before this
Court.
Even
otherwise
the
said
communication dated 17.02.1997 on the
face of it appears to be doubtful as in the
Writ Petition No.7060 (M/B) of 2002 filed
before this Court the stand of M/s MSAS
was that the land is not yet demarcated and
its possession is not given to the petitioners
and, therefore, no layout plan as yet could
be prepared and M/s MSAS would take ten
days time, from date of possession, to
submit proposed layout plan to the
Municipal Corporation. Thus, there is no
question that any map was sanctioned on
17.02.1997 by Awas Evam Vikas Parishad.
Even otherwise, admittedly, the land
always was within the limits of Lucknow
Development Authority. It is the Lucknow
Development Authority which had power
to sanction map for any development of the
said land, either for residential or multistory housing society, and no such
sanctioned map of Lucknow Development
Authority is filed before this Court.
Learned counsel for the petitioner also
could not show the provision of law under
which U.P. Awas Evam Vikas Parishad
could sanction a map with regard to the
land
in
dispute.
In
the
aforesaid
background, the said communication is not
reliable and is also without any authority of
law and can not support the case of
petitioner in any manner.

17. In the aforesaid facts we are to
consider the submission of petitioner on
opportunity of hearing being granted to
them. No doubt normally an opportunity of
hearing ought to be given to a party against
whom an order is being passed, but, the
same is not an absolute right. Suffice would
be to referred to a three judges bench of
Supreme Court in case of 'State of U.P. Vs.
Sudheer Kumar Singh; AIR 2020 SC
5215', where Supreme Court had occasion
to consider the said submission. It referred
to large number of judgments on the issue
and, thereafter, in paragraph-39 of the
judgment laid down the following guiding
principles.

"39. An analysis of the aforesaid
judgments thus reveals:

(1) Natural justice is a flexible
tool in the hands of the judiciary to reach
out in fit cases to remedy injustice. The
breach of the audi alteram partem Rule
cannot by itself, without more, lead to the
conclusion that prejudice is thereby caused.
2 All. M/S Sundaram Developers Pvt. Ltd. Vs. State of U.P. & Ors.
381

(2) Where procedural and/or
substantive provisions of law embody the
principles
of
natural
justice,
their
infraction per se does not lead to invalidity
of the orders passed. Here again, prejudice
must be caused to the litigant, except in the
case of a mandatory provision of law which
is conceived not only in individual interest,
but also in public interest.

(3) No prejudice is caused to the
person complaining of the breach of
natural justice where such person does
not dispute the case against him or it. This
can happen by reason of estoppel,
acquiescence, waiver and by way of nonchallenge or non-denial or admission of
facts, in cases in which the Court finds on
facts that no real prejudice can therefore be
said to have been caused to the person
complaining of the breach of natural
justice.

(4) In cases where facts can be
stated to be admitted or indisputable, and
only one conclusion is possible, the Court
does not pass futile orders of setting aside
or remand when there is, in fact, no
prejudice caused. This conclusion must be
drawn by the Court on an appraisal of the
facts of a case, and not by the authority
who denies natural justice to a person.

(5) The "prejudice" exception
must be more than a mere apprehension or
even a reasonable suspicion of a litigant. It
should exist as a matter of fact, or be based
upon a definite inference of likelihood of
prejudice flowing from the non-observance
of natural justice." (emphasis added)

18. As per the aforesaid principles, the
natural justice is flexible tool in the hands
of judiciary to be applied in fit cases to
remedy injustice. The mere breach of
principle of opportunity of hearing by
itself, without more, can not lead to the
conclusion that prejudice thereby is caused.
A litigant is bound to show the prejudice
caused to it. It further states that no
prejudice
is
caused
to
the
persons
complaining of breach of natural justice
where such persons does not dispute the
facts. This can happen amongst other
reason by way of non-challenge or nondenial or admission of fact. In cases where
facts can be stated to be admitted or
undisputed, and only one conclusion is
possible, the Court does not pass futile
orders of setting aside or remand. This
conclusion must be drawn by the Court on
the appraisal of the facts of the case, and
not by the authority who denies natural
justice to persons. Applying principle 3 & 4
to the facts of the present case, on admitted
facts it is proved that the land is transferred
by the Municipal Corporation to M/s
MSAS for the purposes not covered by the
Act of 1959 and, thus, without authority of
law. Once the same is not in dispute, the
said resolution or lease deed or any deed
thereafter can not stand in the eyes of law.
The resolution no.70 of the Municipal
Corporation is without any authority of law
and in fact is a fraud upon the law. The
Municipal Corporation could not have
passed the said resolution and, therefore, all
consequential acts become illegal. By
giving any opportunity of hearing the said
admitted facts would not change and thus
no prejudice is caused to the petitioners by
not remanding the matter. It is not in
dispute that till date the land is not
developed in any manner whatsoever and it
is lying as it did at the time the resolution
was passed. Petitioners land developer
companies are well aware of law and have
invested in land after due diligence. Court
can fairly assume that its legal team must
have conducted a due diligence of the
property and, thus, they were fully aware of
all facts, including validity of resolution of
Municipal Corporation. The law does not
382 INDIAN LAW REPORTS ALLAHABAD SERIES
permit them to take a stand that after
execution of sale deeds to petitioners, land
would devolve upon them free from all
encumbrances. If the title of earlier owner
is defective consequence would fall upon
petitioners also in accordance with law. The
land which is bound to be utilized for the
public of Lucknow Municipal Corporation
can not be usurped in the aforesaid
unauthorized,
illegal
manner
and
transferred to private developers. It is the
duty of the constitutional Courts to
safeguard the rights of people at large.
Since, there is no dispute on facts and only
one conclusion is possible, there is no
reason to issue a futile writ and remand the
matter back to the Municipal Corporation.
Even otherwise, looking into the conduct of
petitioner as well as of the Municipal
Corporation, this Court does not find it a fit
case to remand it back to the Municipal
Corporation. The lease was cancelled on
01.06.2013. No stay order was passed by
this Court in any of the writ petitions
challenging the same. But, on the basis of
the status-quo order passed in Writ Petition
No.9211 (M/B) of 2011, which was for
restraining respondents from interfering in
possession
of
only
M/s
Sundaram
Developers Pvt. Ltd. as their land is not
acquired, neither petitioners handed over
possession
of
land
to
Municipal
Corporation nor respondents took any steps
for possession of the land. Both of them
very
conveniently
got
Writ
Petition
No.9211 (M/B) of 2011 connected with the
later two writ petitions and permitted
benefit of status-quo order. Writ Petition
No.9211 (M/B) of 2011 was on entirely
different issue and had become futile, once
the lease deed was cancelled and the
cancellation was not stayed by the Court.
Respondents wrongly permitted the earlier
acquisition writ petition to remain pending
and connected to later writ petitions
challenging cancellation of lease deed, only
to give benefit of status-quo order to
petitioners. Thus, in this background also
this Court does not find it in public interest
to remand the matter to such respondents.
So far as the submission with regard to
malice
of
Municipal
Corporation
is
concerned, suffice is to say that no malice
either in law or in facts could be proved by
the
petitioner
against
the
Municipal
Corporation.