# Vijay Kumar v. Zonal Manager (N) Food Corporation of India and others

- **Citation:** (2004) 1 ILRA 110
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2003-08-08
- **Case number:** Civil Misc. Writ Petition No. 42980 of 2000
- **Bench:** M. Katju, R.S. Tripathi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/vijay-kumar-v-zonal-manager-n-food-corporation-of-india-and-others-40235
- **Pages:** 8

## Headnote

Constitution
of
India-Article
226Memorandum of agreement between
Private Society and the Development
authority of grater Noida-whether can be
enforced in writ jurisdiction. Held- Yes

Held- Para 19

In our opinion this writ petition deserves
to be allowed. The respondents cannot
be
allowed
to
resile
from
the
Memorandum
of
Understanding
executed on 22.3.1994, Annexure-2 to
the petition. This Memorandum itself
states that it is an agreement between
Greater Noida and the petitioner society.
In our opinion the Memorandum of
Understanding amounts to a contract
between the parties as there is offer,
acceptance
and
consideration.
As
regards a contract between two private
parties
no
doubt
writ
is
not
the
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1 All] Vijay Kumar V. Zonal Manager (N) Food Corporation of India and others
111
appropriate remedy for its enforcement
but the position is different when one of
the parties is the Government or an
instrumentality of the State. Where one
of the parties to a contract is the
Government or an instrumentality of the
State then Article 14 of the Constitution
will apply.
Case law discussed:

## Text

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9. For the aforesaid reasons, the writ
petition is fails and is dismissed. No order
as to costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 8.8.2003

BEFORE
THE HON'BLE M. KATJU, J.
THE HON'BLE R.S. TRIPATHI, J.

Civil Misc. Writ Petition No. 42980 of 2000

Sachchidanand Sahkari Awas Samiti Ltd.

 ...Petitioner
Versus
Greater Noida Industrial Development
Authority and others
 ...Respondents

Counsel for the Petitioner:
Sri Rajendra Dobhal
Sri Shesh Kumar
Sri Tarun Agarwal
Sri A.K. Gupta
Sri I.N. Singh
Sri K.M. Misra

Counsel for the Respondents:
Sri Shashi Nandan
S.C.

Constitution
of
India-Article
226Memorandum of agreement between
Private Society and the Development
authority of grater Noida-whether can be
enforced in writ jurisdiction. Held- Yes

Held- Para 19

In our opinion this writ petition deserves
to be allowed. The respondents cannot
be
allowed
to
resile
from
the
Memorandum
of
Understanding
executed on 22.3.1994, Annexure-2 to
the petition. This Memorandum itself
states that it is an agreement between
Greater Noida and the petitioner society.
In our opinion the Memorandum of
Understanding amounts to a contract
between the parties as there is offer,
acceptance
and
consideration.
As
regards a contract between two private
parties
no
doubt
writ
is
not
the
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1 All] Vijay Kumar V. Zonal Manager (N) Food Corporation of India and others
111
appropriate remedy for its enforcement
but the position is different when one of
the parties is the Government or an
instrumentality of the State. Where one
of the parties to a contract is the
Government or an instrumentality of the
State then Article 14 of the Constitution
will apply.
Case law discussed:

(Delivered by Hon'ble M. Katju, J.)

1. Heard learned counsel for the
parties.

2. The petitioner is a registered
housing cooperative society registered
under the U.P. Cooperative Societies Act,
1965 having 275 members. Between
27.11.1990 to 17.12.1991 the petitioner
society
purchased
land
in
Village
Suthiana, Jalpura in Pargana and Tehsil
Dadri, District Ghaziabad (now Gautam
Budh Nagar) for residential purposes of
its members from the residents of the said
area, and thereafter the land purchased by
the society was mutated in its name.

3.

On
28.1.1991
the
State
Government under Section 2 (d) read with
Section 3 of the U.P. Industrial Area
Development Act, 1976, has notified the
area mentioned in the schedule to the Act
as Greater Noida. True copy of the
notification is Annexure-I to the petition.
Since the land purchased by the petitioner
was in the Greater Noida area, the
petitioner submitted a layout plan for
approval and necessary permission to
Greater Noida vide its letter dated
27.8.1991 but the said letter was neither
replied nor the lay out plan was approved
by the respondents.

4. In para 6 of the petition it is
alleged
that
thereafter
the
society
approached the respondents regarding its
prayer for permission and approval of lay
out plan submitted by it. The respondents
informed the petitioner that if it gives its
land to the respondents, the respondents
will allot 40% of the total land to the
members of the society after charging Rs.
640 p/sqm. as development charges. The
society agreed to this and thereafter on
22.3.1994
a
Memorandum
of
Understanding was executed between the
petitioner and the respondents vide
Annexure-2 to the petition.

5. It is alleged in para 7 of the
petition that before execution of the
Memorandum
of
Understanding
the
respondents asked the petitioner to fulfill
all the formalities, and the petitioner
fulfilled the same to the entire satisfaction
of the respondents including submission
of documents regarding the land and after
having
been
fully
satisfied,
the
respondents
executed
the
aforesaid
Memorandum of Understanding with the
petitioner society on 22.3.1994.

6. According to the Memorandum of
Understanding, 10% initial development
charges was to be paid by each member of
the society through the society to the
respondents,
and
accordingly
243
members submitted 10% development
charges to the respondents through the
society. The total amount submitted
through
the
society
towards
10%
development charges to the respondents
was Rs.99,55,834/-. After receiving the
same the respondents issued allotment
letters to 157 members of the petitioner
but the other members are yet to be issued
allotment letters. A true copy of the list of
the members of the petitioner society who
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
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have been allotted plots vide letter dated
11.12.1995 is Annexure-3 to the petition.
7. According to the Memorandum of
Understanding, the society handed over
the physical possession of its land to the
representative of the respondents on
25.4.1996. On 27.7.1996 the respondents
issued a show cause notice to the
petitioner stating that the society has not
transferred its land according to the
Memorandum of Understanding and the
petitioner was asked to show cause why
the Memorandum of Understanding be
not treated as cancelled. A true copy of
the notice dated 27.7.1996 is Annexure-4
to the petition. The petitioner sent a reply
dated 16.9.1996 to the said show cause
notice stating that it had performed its
part and was ready to discharge its
obligation and therefore, there is no
question of cancelling the Memorandum
of Understanding. A true copy of the
reply is Annexure-5 to the petition.

8. It is alleged in para 13 of the
petition that the petitioner thereafter
approached the respondents several times
and requested them to hand over the
physical possession of plots allotted to the
members of the petitioner society but the
respondents paid no heed. Suddenly the
impugned
order
daed
12.6.2000
(Annexure 6 to the petition) was passed
stating that the petitioner had been
allotted 18,604 sq.m. residential land out
of the society land 3.06 acres land had
been acquired before creation of Greater
Noida, but the said land is situated on
western side of Hindon river and the said
land is under consideration to be notified
for Noida at government level, and hence
the said land is no longer useful for
Greater Noida. It was also stated in the
impugned order that besides the aforesaid
land, 8.91 acre of the petitioner's land had
been purchased after creation of Greater
Noida and the Board had not given its
permission for exchange of the said land.
It was stated that the members who have
been allotted .06 acres of land, which was
purchased before creation of Greater
Noida, will have to deposit the price of
land fixed by Greater Noida with 18%
interest. The other members may take
their money back along with 6% simple
interest vide Annexure-6 to the petition.

9. After receiving the order dated
12.6.2000
the
petitioner
made
a
representation on 22.6.2000 stating that
the action of the respondents is not only
illegal and unjustified but unworthy of a
reputed authority like Greater Noida. True
copy of the representation is Annexure-7
to the writ petition.

10. It is alleged in para 16 of the
petition that the impugned order dated
12.6.2000 was passed without giving any
show cause notice or opportunity of
hearing to the petitioner. It is alleged in
para 17 that the respondents made an
offer for exchange of land and a
Memorandum of Understanding dated
22.3.1994 has been executed between the
petitioner and the respondents, and the
petitioner
had
completed
all
the
formalities regarding transfer of the land
in favour of the respondents hence the
respondents
cannot
resile
from
its
promise. The petitioner had already
handed over the plots, and after such
allotment the respondent cannot be
permitted to return the amount with 6%
interest. It is alleged that members of the
petitioners are logically entitled to get the
plots allotted to them in Sector 36 of
Greater Noida, but the respondents is
illegally
and
arbitrarily
not
giving
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physical possession to the members of the
petitioner.

11. A counter affidavit has been
filed by the Greater Noida, and we have
perused the same.

12. It is stated in para 3 of the
counter affidavit that the petition is not
maintainable as the petitioner is seeking
to enforce a contractual right. In para 6 it
is stated that on 29.7.1992 a meeting of
the Board of Greater Noida was held and
a decision was taken that only those
cooperative
societies
which
were
registered prior to 28.1.1991 and which
had purchased the land within the notified
area of Greater Noida before that date
would be entitled to allotment of 40% of
the said land. Another resolution was
passed on 20.2.1993 vide Annexure-1. A
decision had been taken to exchange the
plots which had been purchased by the
cooperative housing societies prior to
28.1.1991. Thereafter the resolution dated
15.5.1993 was passed for such exchange
on deposit of development charges at the
rate of Rs. 640/- per square meter vide
Annexure-2.

13. In para 9 of the Counter
Affidavit it is stated that the notice dated
27.7.1996 was rightly issued as transfer of
the land had not been effected by the
society in favour of the respondents. It is
also denied that physical possession of the
land was handed over to the respondents.
Since the petitioner had not executed any
sale deed in favour of the respondents the
question
of
handing
over
physical
possession of any plot to the members of
the society did not arise. In para 12 it is
stated that a policy decision had been
taken that only those plots which have
been purchased by the society prior to
28.1.1991 would be entitled to the benefit
of exchange and such benefit will not be
available for transactions, which took
place after 28.1.1991. As regards the area
of 3.06 acres situated towards west of the
Hindon river, steps have already been
taken for notifying the same for Noida
and
the
matter
is
pending
for
consideration
before
the
State
Government.

14. In para 15 it is stated that a
Memorandum of Understanding is merely
an agreement and there is no concluded
contract between the parties. If the
petitioner is aggrieved by any action it
should approach the Civil Court for
remedy.

15. In para 16 it is stated that only
those societies which have been registered
prior to 28.11.1991 and who have
purchased the land prior to that date
would be entitled to the benefit of
exchange and allotment of plots. Since a
major area had been purchased by the
petitioner subsequent to the aforesaid
date, it cannot claim any right on the basis
of the Memorandum of Understanding. In
para 18 it is stated that since the petitioner
has not transferred the plot in favour of
the respondent no. 1 by execution of a
sale deed, no right whatsoever has
accrued in its favour. Hence the impugned
order is valid.

16. A rejoinder Affidavit has also
been filed.

17. In para 5 it is stated that the
public notice issued by Greater Noida
advertising the exchange scheme only
stated that societies registered prior to
28.1.1991 would be eligible for the same.
The petitioner society, having been
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
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registered prior to 28.1.1991 was thus
fully eligible. A perusal of Annexure-CA
2 clearly shows that some societies were
short listed after perusal of all relevant
documents and the petitioner society was
also short listed for the exchange scheme
after verification and examination of the
registration certificate, the sale deed etc.
Some members were allotted land and the
respondents
have
accepted
10%
development charges from the petitioner
society after verification of the relevant
documents. The respondents had full
knowledge that certain land belonging to
the petitioner society was situated on
western side of Hindon river. It is alleged
that evidently the requirement of land for
purchase by the society prior to 28.1.1991
had been waived by the respondents or
had been withdrawn at the time of public
notice published in 1994 in "Rashtriya
Sahara" or the same was not a necessary
condition for allotment.

18. At any event, the Memorandum
of Understanding dated 22.3.1994 does
not mention that the land should have
been purchased by the society prior to
28.1.1991. In para 9 of the Rejoinder
Affidavit it is stated that there was no
such condition in the Memorandum of
Understanding that the land should have
been purchased prior to 28.1.1991. It is
alleged that the land was surrendered by
the society under the exchange scheme. In
its reply dated 16.9.1996 (Annexure-5 to
the petition) the petitioner has clearly
stated in paragraph 3 and 6 that land was
handed over by the society to Greater
Noida and a certificate in this regard was
issued by the Patwari concerned at the
relevant time. The said land was free from
all encumbrances. In para 6 of the said
letter dated 16.9.1996 it is stated that after
signing
of
Memorandum
of
Understanding dated 22.3.1994 with the
society and physically taking over the said
land Greater Noida has erected its sign
boards on these lands stating that this land
belongs to Greater Noida.

19. In our opinion this writ petition
deserves to be allowed. The respondents
cannot be allowed to resile from the
Memorandum of Understanding executed
on 22.3.1994, Annexure-2 to the petition.
This Memorandum itself states that it is
an agreement between Greater Noida and
the petitioner society. In our opinion the
Memorandum of Understanding amounts
to a contract between the parties as there
is offer, acceptance and consideration. As
regards a contract between two private
parties no doubt writ is not the
appropriate remedy for its enforcement
but the position is different when one of
the parties is the Government or an
instrumentality of the State. Where one of
the parties to a contract is the Government
or an instrumentality of the State then
Article 14 of the Constitution will apply
vide Shrilekha Vidyarthi v. State of U.P.
AIR 1991 SC 537. In Shrilikha Vidyarthi's
case (supra) the Supreme Court observed
(vide para 22) :-

"There is an obvious difference in
the contracts between private parties and
contracts to which the State is a party.
Private parties are concerned only with
their personal interest whereas the State
while
exercising
its
powers
and
discharging its functions, acts indubitably,
as is expected of it, for public good and in
public interest. This factor alone is
sufficient to import at least the minimal
requirements of public law obligations
and impress with this character the
contracts made by the State or its
instrumentality. It is a different matter
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that the scope of judicial review in respect
of disputes falling within the domain of
contractual obligations may be more
limited and in doubtful cases the parties
may be relegated to adjudication of their
rights by resort to remedies provided for
adjudication
of
purely
contractual
disputes.
However,
to
the
extent,
challenge is made on the ground of
violation of Article 14 by alleging that the
impugned act is arbitrary, unfair or
unreasonable, the fact that the dispute also
falls within the domain of contractual
obligations would not relieve the State of
its obligation to comply with the basic
requirements of Article 14. To this extent,
the obligation is of a public character
invariably in every case irrespective of
there being any other right or obligation
in
addition
thereto.
An
additional
contractual obligation cannot direst the
claimant of the guarantee under Article 14
of non-arbitrariness at the hands of the
State in any of its actions."

20. We may now consider what
precisely has been mentioned in the
Memorandum of Understanding dated
22.3.1994 copy of which is Annexure-2
to the petition.

21. Right at the beginning of this
Memorandum of Understanding it is
mentioned that the society owns land
measuring
11.975
acres
in
Village
Suthiana, Pargana and Tehsil Dadri,
District Ghaziabad and it has offered to
exchange its land with the developed plots
of Greater Noida to which Greater Noida
has agreed. Thereafter the terms of the
agreements have been mentioned.

22. The very first paragraph of the
Memorandum states that Greater Noida
shall allot 40% land as residential plots to
the society in various sizes of plots in lieu
of the total land, which is to be transferred
to Greater Noida subject to payment of
development charges. The manner of
payment is then mentioned.

23. Clause 7 of the Memorandum
states that the society shall hand over the
vacant possession of its land detailed in
Annexure-1 free from all encumbrances.
Possession shall be delivered to Greater
Noida before possession of the developed
plots is delivered to the society or its
members, Clause 8 states that during the
period possession of the land remains
with the society and has not been taken
over by Greater Noida, there will be no
financial liability on Greater Noida in
respect of the land of the society. Clause
11 states that the society has to furnish a
list of members, legally enrolled within
30 days to the Greater Noida. It has also
to furnish details regarding various sizes
of plots required for its members.

24. Clause 16 of the memorandum
states that the development of the sector
for allotment of plots to the members of
the society shall be started soon after the
society deposits 10% of the development
charges. The development shall be
completed within 36 months from the date
of such deposit. Clause 17 states that
possession of the developed plots shall be
delivered to the members after execution
of the lease deed. Members shall be asked
to execute lease deed after 3 years from
the signing of the memorandum of
standing. Clause 20 states that the
allotment of plots will be given to the
members on a lease of 90 years and the
lease rent shall be payable in lump sum @
10% of the premium of the plots
calculated @ Rs. 850/- per sqm.
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25. When we compare these terms
and conditions in the Memorandum of
Understanding dated 22.3.1994 with the
stand taken by the respondents in its
Counter
Affidavit,
we
find
several
inconsistencies between the two. There is
nothing
in
the
Memorandum
of
Understanding which states that only
those cooperative societies which were
registered prior to 28.1.1991 or only those
plots which have been purchased by the
society prior to 28.1.1991 will be entitled
to the benefit of the exchange. These are
absolutely new terms which are not
contained
in
the
Memorandum
of
Understanding, and hence we are of the
opinion that they are clearly illegal.
Hence in our opinion the decisions of the
board of Greater Noida on 29.7.1992 and
20.2.1993 (vide Annexure CA-1 to the
Counter Affidavit) are clearly illegal.

26. It was not expected of Greater
Noida, which is a Statutory body and an
instrumentality of the State to resile from
the Memorandum of Understanding dated
22.3.1994 which was a solemn instrument
executed between it and the petitioner.
The petitioner handed over possession of
its land to the Greater Noida and it was
wholly unfair on the part of the Greater
Noida to now go back on its promise. The
petitioner not only transferred possession
of its land but also paid 10% development
charges, and some of its members had
been allotted plots by Greater Noida. This
Memorandum of Understanding has been
actually acted upon, and Greater Noida
cannot now be permitted to resile from it
and back out of its solemn undertaking.
The principles of promissory estoppel,
legitimate expectation, and fair play in
state action are applicable to Greater
Noida.

27. A division Bench judgement of
this Court in Kendriya Karmchari Sehkari
Grih Nirman Samiti Ltd. v. New Okhla
Industrial Development Authority Noida,
Writ Petition No. 39842 of 2001 decided
on 5.8.2003, has dealt with these
principles
in
great
detail
and
has
considered a catena of Supreme Court
decisions in this connection, and hence
we are not referring to the same again.
Hence Greater Noida is bound by these
principles and has to fulfil its solemn
obligations under the Memorandum of
Understanding,
copy
of
which
is
Annexure-2 to the petition.

28. In Ramana S. Shetty vs. I.A.
Authority of India AIR 1979 SC 1628 the
Supreme Court observed (vide para 10) :-

"It is a well settled rule of
administrative law that an executive
authority must be rigorously held to the
standards by which it professes its actions
to be judged and it must scrupulously
observe those standards on pain of
invalidation of an act in violation of them.
This rule was enunciated by Mr. Justice
Frankfurter in Vitarelli v. Seaton (1959)
359 US 535 : 3L ED2D 1012 where the
learned Judge said:

"An executive agency must be
rigorously held to the standards by which
it professes its action to be judged ....
Accordingly,
if
dismissal
from
employment is based on a defined
procedure, even though generous beyond
the requirements that bind such agency,
that procedure must be scrupulously
observed ....... This judicially evolved
rule of administrative law is now firmly
established and, if I may add, rightly so.
He that takes the procedural sword shall
perish with the sword."
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1 All] Sachchidanand Sahkari Awas Samiti V. Greater Noida Industrial Development Authority & others 117

This Court accepted the rule as valid and
applicable in India in A.S. Ahluwalia v.
State of Punjab (1975) 3 SCR 82 : (AIR
1975 SC 98) and in subsequent decision
given in Sukhdev v. Bhagatram, (1975) 3
SCR 619: (AIR 1975 SC 1331), Mathew,
J., quoted the above-referred observations
of Mr. Justice Frankfurter with approval.
It may be noted that this rule, though
supportable also as emanating from
Article 14, does not rest merely on that
Article. It has an independent existence
apart from Article 14. It is a rule of
administrative law which has been
judicially evolved as a check against
exercise of arbitrary power by the
executive authority. If we turn to the
judgment of Mr. Justice Frankfurter and
examine it, we find that he has not sought
to draw support for the rule from the
equality clause of the United States
constitutional but evolved it purely as a
rule of administrative law. Even in
England,
the
recent
trend
in
administrative law is in that direction as is
evident from what is stated at pages 54041 in Prof. Wade's Administrative Law
4th Edition. There is no reason why we
should hesitate to adopt this rule as a part
of
our
continually
expanding
administrative law."

29. As is evident from paragraphs 3
and 6 of the letter dated 16.9.1996 from
the president of the petitioner society to
the General Manager (Estate), Greater
Noida, (Annexure-5 to the writ petition),
the petitioner had handed over possession
of its land to the respondent and a
certificate in this regard was issued by the
Patwari, and Greater Noida has erected
sign boards on the said land stating that
the land belongs to Greater Noida. Hence
we are of the opinion that the petitioner
handed over possession of its land to
Greater Noida.
30. As regards the statement in the
impugned letter dated 12.6.2000 that 3.06
acres land of the petitioner which lay west
of Hindon River was being considered by
the State Government for notifying it for
Noida, there is nothing on the record to
show that the said land was notified for
Noida or there is any such move. It is a
bald averment without any basis, and
hence has to be ignored.

31. For the reasons given above, this
writ petition is allowed. The impugned
order is quashed and a mandamus is
issued to the respondents to give physical
possession over the plots which have been
allotted to some of the members of the
petitioner, and to issue allotment letters to
the rest of the members of the petitioner
as
per
the
Memorandum
of
Understanding.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.9.2003

BEFORE
THE HON'BLE RAKESH TIWARI, J.

Civil Misc. Writ Petition No. 7306 of 2003

Ajay Yadav

...Petitioner
Versus
Cantonment Board & another...Respondents

Counsel for the Petitioner:
Sri M.M. Sahai

Counsel for the Respondents:
Sri Shakti Dhar Dubey

Constitution
of
India,
Article
226Termination of Assistant Teachers-in
Primary
School-run
by
cantonment