# GANGA RETREAT AND TOWERS LTD. AND ANR v. STATE OF RAJASTHAN AND ORS - **Citation:** [2003] Supp. 6 S.C.R. 1134 - **Court:** Supreme Court of India - **Decided:** 2003-12-19 - **Bench:** R.C. Lahoti, Ashok Bhan - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ganga-retreat-and-towers-ltd-and-anr-v-state-of-rajasthan-and-ors-19522 - **Pages:** 38 ## Headnote Urban Land Ceiling and Regulation Act, 1976-Sections 6(1) read with section 15 and sections 20 and 38-Contract Act, 1872-Sections 18, 19, 21, 22 and 56-Public auction-Property described as ji-ee hold, C ceiling free and vacant with Floor Area Ratio (FAR) as 2.00-Company declared successful bidder, however payment delayed as per schedulePayment along with interest on delayed payment and also registration charges and stamp duty paid-Execution of sale deed and possession delivered to Company-Application for sanction of building plans for construction-Meanwhile, FAR reduced to 1. 75 owing to change- in D Bye laws-Building plans approved with FAR 1. 75-State issued notice to Company for holding land in excess of ceiling limits-Grant of exemption subject to condition that property would not be alienated without prior permission of the Government-Company fully knowing that FAR approved as 1. 75 and property not ceiling free commencing construction E activities and also re-submitting plans for approval of FAR as 2. 00-Writ Petition seeking declaratory reliefs that there was frustration or impossibility of performance of contract; and that FAR 1. 75 not applicable-Also claimed refund of registration charges, stamp duty and cost of construction incurred with interest--On appeal Held: Company having known about the F reduction of FAR from 2. 00 to 1. 7 5 and that the land was not ceiling free affirmed the contract by getting their plans approved with FAR 1. 75 and started construction activities as such they cannot annul and avoid a concluded contract and flX liability on the Government-There was no frustration or impossibility of performance of contract-When the ComG pany applied for approval of building plans, law in force at that time would apply--Doctrine of promissory estoppel is not available when any action is desired to be taken in contravention of the provisions of law-Jaipur Development Authority Act, 1982-Section 90-Rajasthan Municipalities Act, 1954-Section 298-Administrative Law. H Constitution of India, 1950-Articles 226 and 136-Petition 1134 GANGA RETREAT AND TOWERS LTD. v. STATE 1135 "· involving disputed questions of fact in relation to completed contract of A sale of land-Maintainability of-Held: Such petitions cannot be adequately adjudicated upon in exercise of writ jurisdiction-Filing of suit would be efficacious remedy-However, Supreme Court decided the dispute on merits on account of lapse of time. Respondent-State carried out public auction of a property describing it as free-hold, ceiling free, vacant property with Floor Area Ratio (FAR) as 2.00 provided by 1989 Bye-laws. Appellant-Company was declared successful bidder. Appellants delayed the payment as per B the schedule and later made the payment along with interest for delayed payment and also paid registration charges and stamp duty. C Thereafter, sale deed was executed and it was repeated that FAR would be 2.00. Appellants were then delivered possession. Thereafter, appellants applied for sanction of plans for constructing the property as per FAR 2.00 and deposited under protest the map approval charges demanded. Meanwhile, Municipal Corporation revised its bye~laws D and by 1996 Regulation FAR was reduced to 1.75. Municipal Corporation approved the plans as per FAR 1.75 and immediately appellants commenced construction activities with the belief that the remaining FAR would be approved. Competent Authority issued· notice to the appellants under section 38 of Urban Land Ceiling and Regulation Act, E 1976 alleging that the appellants were holding land in excess of the ceiling limits and had not filed the return. Appellants submitted that as the property had been sold ceiling free there was no need tt; file return and as such applied for exemption. Appellant was granted exemption from ceiling subject to the conditions that para-meters of F Municipal Corporation regarding construction would be applicable and that the property would not be alienated without pr ## Text _Characters 0–39,988 of 90,717. This is a partial read: ask again with offset=39988 for what follows._ A GANGA RETREAT AND TOWERS LTD. AND ANR. B v. STATE OF RAJASTHAN AND ORS. DECEMBER 19, 2003 [R.C. LAHOTI AND ASHOK BHAN, JJ.] Urban Land Ceiling and Regulation Act, 1976-Sections 6(1) read with section 15 and sections 20 and 38-Contract Act, 1872-Sections 18, 19, 21, 22 and 56-Public auction-Property described as ji-ee hold, C ceiling free and vacant with Floor Area Ratio (FAR) as 2.00-Company declared successful bidder, however payment delayed as per schedulePayment along with interest on delayed payment and also registration charges and stamp duty paid-Execution of sale deed and possession delivered to Company-Application for sanction of building plans for construction-Meanwhile, FAR reduced to 1. 75 owing to change- in D Bye laws-Building plans approved with FAR 1. 75-State issued notice to Company for holding land in excess of ceiling limits-Grant of exemption subject to condition that property would not be alienated without prior permission of the Government-Company fully knowing that FAR approved as 1. 75 and property not ceiling free commencing construction E activities and also re-submitting plans for approval of FAR as 2. 00-Writ Petition seeking declaratory reliefs that there was frustration or impossibility of performance of contract; and that FAR 1. 75 not applicable-Also claimed refund of registration charges, stamp duty and cost of construction incurred with interest--On appeal Held: Company having known about the F reduction of FAR from 2. 00 to 1. 7 5 and that the land was not ceiling free affirmed the contract by getting their plans approved with FAR 1. 75 and started construction activities as such they cannot annul and avoid a concluded contract and flX liability on the Government-There was no frustration or impossibility of performance of contract-When the ComG pany applied for approval of building plans, law in force at that time would apply--Doctrine of promissory estoppel is not available when any action is desired to be taken in contravention of the provisions of law-Jaipur Development Authority Act, 1982-Section 90-Rajasthan Municipalities Act, 1954-Section 298-Administrative Law. H Constitution of India, 1950-Articles 226 and 136-Petition 1134 GANGA RETREAT AND TOWERS LTD. v. STATE 1135 "· involving disputed questions of fact in relation to completed contract of A sale of land-Maintainability of-Held: Such petitions cannot be adequately adjudicated upon in exercise of writ jurisdiction-Filing of suit would be efficacious remedy-However, Supreme Court decided the dispute on merits on account of lapse of time. Respondent-State carried out public auction of a property describing it as free-hold, ceiling free, vacant property with Floor Area Ratio (FAR) as 2.00 provided by 1989 Bye-laws. Appellant-Company was declared successful bidder. Appellants delayed the payment as per B the schedule and later made the payment along with interest for delayed payment and also paid registration charges and stamp duty. C Thereafter, sale deed was executed and it was repeated that FAR would be 2.00. Appellants were then delivered possession. Thereafter, appellants applied for sanction of plans for constructing the property as per FAR 2.00 and deposited under protest the map approval charges demanded. Meanwhile, Municipal Corporation revised its bye~laws D and by 1996 Regulation FAR was reduced to 1.75. Municipal Corporation approved the plans as per FAR 1.75 and immediately appellants commenced construction activities with the belief that the remaining FAR would be approved. Competent Authority issued· notice to the appellants under section 38 of Urban Land Ceiling and Regulation Act, E 1976 alleging that the appellants were holding land in excess of the ceiling limits and had not filed the return. Appellants submitted that as the property had been sold ceiling free there was no need tt; file return and as such applied for exemption. Appellant was granted exemption from ceiling subject to the conditions that para-meters of F Municipal Corporation regarding construction would be applicable and that the property would not be alienated without prior permission of the State Government. Appellants re-submitted the plans for approval of FAR as 2.00 or to refund the proportionate amount consequent upon the reduction in FAR. Aggrieved appellants then filed writ petition seeking reliefs that declaration be passed to the effect that the contract of sale of property has become impossible <'f performance as the FAR 2.00 as mentioned G in the sale-deed is reduced to FAR 1.75; that the Regulations of 1996 were not applicable; and that the stamp duty and registration charges H 1136 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A be refunded. Respondents raised .preliminary objections that the declaratory reliefs claimed could not be granted in the writ jurisdiction. Single Judge rejected the preliminary objections and held that the auction sale and sale deed were null and void and the contract was frustrated and as such all consequent actions taken by either of the B parties were invalidated and appellants were entitled to be restituted to the original position as it existed prior to the auction and execution of sale deed and respondents were directed to refund all the payments received by appellants. Division Bench held that it was a completed contract involving highly disputed questions of fact which could not be C adjudicated upon by High Court in exercise of its writ jurisdiction and set aside the order of Single Judge leaving it open to the appellants to seek their remedy in the Civil Court. Hence the present appeals. Appellants contended that there is no absolute bar to the maintainability of the writ petition under Article 226 in contractual D matters; that the appellants purchased the property on. a representa-. tion made by the respondents that the FAR was 2.00 and that the property was free hold and ceiling free; that the appellants were ,persuaded to make high bid on this representation that the land was , ceiling free amounted to misrepresentation under section 18 of the E Contract Act and the contract became voidable at the option of the a°'ppellants under Section 19; that the contract was frustrated and incapable of being performed in terms of Section 56; that the appellants have invested huge sums of money after borrowing from the Bank at high rates of interest without any return for the last so many years; that in the conveyance deed FAR was again mentioned as 2;0 and at F the stage there was clear misrepresentation; that the right to avoid contract or rescind the contract can be waived but there is no principle of law which requires the exercise of the right of repudiation of the contract to be done immediately on coming to know about the misrepresentation or breach of contract; that it was open to the G aggrieved party to persuade the defaulting party to rectify the situation and to wait till the defaulting party refuses to rectify its default before exercising its right of repudiation of the contract; that a contract or other transaction foduced or tainted by fraud is not void, but only voidable at the opinion of the parties defrauded, unless it is avoided, H the transaction is valid; that because of the very strict condition GANGA RETREAT AND TOWERS LTD. v. STATE 1137 contained in the terms of auction, appellants inspite of having knocked A the doors of the court had to start with the construction otherwise they ran the risk of their right to the property being forfeited; that the condition imposed by the exemption order that the plot would not be transferred without prior approval of the State Government were contrary to the representation contained in the auction notice that the B properfy was freehold; that the appellants could avoid the transaction at any time; that the State Government has the complete control over the Development Authority and could direct it to adhere to FAR 2.0 as against FAR 1.75 provided under the 1996 Regulations; and that Government had the power to cancel or modify the Bye-laws framed by the Board and failure to do SO· reflects that the Government did not intend to stick to the representation made by it in the auction notice or sale deed. c Respondents contended that contractual disputes can be raised in proceedings under Article 226 is misconceived; that the points involved D in the writ petition are highly disputed questions of fact which cannot be decided without taking evidence and therefore, the order of the Division Bench was right; that the date on which auction went in favour of appellants there was no misrepresentation since the FAR on that date was 2.0; that the FAR was changed by virtue of change in E \aw, which could not have been envisaged at the time the contract was entered into; that the contract was frustrated and incapable of being performed is misconceived as Section 56 does not apply to the ;ases of completed transfer; that the delay in the execution of the conveyance deed was pre-dominantly on account of causes attributable to the appellants; that the appellants executed and accepted the conveyance F even after the reduction of the FAR voluntarily and having raised construction clearly declared their intention to proceed with the contract; that having declared their intention to proceed with the contract the appellanl:s were bound by their affirmation; that the appellants having failed to rescind the contract immediately on coming G to know of the breach or misrepresentation by the Government, it could not exercise their right of rescinding the contract or avoiding it; that the stand of the State has always been that it is not going to enforce any of the conditions stated in the exemption order and as on today also the staPd is the same which is admitted by appellants. H 1138 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A Dismissing the appeals, the Court HELD : 1.1. The petition involving disputed questions of fact in relation to a completed contract of sale of land cannot be adequately adjudicated upon in exercise of writ jurisdiction, but, despite holding .the same in the exercise ofpowe~ under Article 136 of the Constitution, B appeal cannot be dismissed on this account at this stage because that is likely to result in the miscarriage of justice on account of lapse of time which may now result in the foreclosure of all other remedies which could be availed of by the appellants in the ordinary course. At the present stage the alternative remedy of filing the suit would not be C efficacious. Keeping in view the peculiar facts and the fact that it will not be a sound exercise of judicial discretion to relegate the petitioners to take recourse to the remedy of civil suit belatedly at the present stage, the dispute is examined on merits. (1152-E-G; 1153-E-F) D Kera/a State Electricity Board & Anr. v. Kurien E. Kalathil & Ors., [2000] 6 sec 293, referred to. 2.1. Every contract including one by auction is subject to provisions of law. Whenever any action is taken in performance. of a contract, it must conform to the law in force at the tlme when action E is taken. In the instant case, when the appellants applied for approval of building plans it is the law in force at that time which would be applicable. Doctrine of promissory estoppel is not available when any action is desired to be taken in contravention of the provisions of law. The terms and conditions of the sale as announced were in accordance F with law and no guarantee was given nor could have been given ·that the law would not change, or that the terms and conditions would be enforceable even in violation of law which may be in force. FAR was a matter of law and was fixed either by the Development Authority or the Municipal Corporation in exercise of its statutory powers. When the contract was entered into, FAR approved was 2.00 and its G subsequent reduction in 1996 to 1.75 would not invalidate contract or be treated as a breach of the contract. (1164-C-E] 2.2. Appellants are not entitled to any relief in the realm of the law of contracts. In spite of having acquired knowledge of the true facts H assuming that there was any mistake or misrepresentation to begin GANGA RETREAT AND TOWERS LTD. v. ST A TE 1139 with and having learnt that the title which was sought to be conferred A on them by the respondents was not such full title as they had contemplated it to be, they proceeded to have the sale deed executed and registered in their favour, seeking extensions of time and paying interest for the period of delay in payment. The contract stood accomplished into a demise and the transaction ended. It is writ l~rge B that the appellants had elected to stand by the contract by digging the land, sinking the basement and raising about 9 floors above, investing crores of rupees. They have by their own conduct rendered the position irreversible and restitution impractical. No authority or law is shown based whereon the appellants may annul and avoid a concluded contract and fix liability on respondents for the cost of their construe- C tion which may have voluntarily chosen to raise in spite of being aware of all the relevant facts and circumstances. As such frustration of contract or impossibility of performance of the contract is not made out. (1169-B-D] 2.3. As per the terms and condition of the auction notice failure D to deposit the amount as stipulated could result in forfeiture of the amount already deposited by the successful bidder and result in cancellation of the bid. Appellants did not deposit the amount as per the schedule of payment. The delay in the execution of the conveyance E was principally attributable to the appellants. Had the appellants made the payments as per schedule of the payment given in the auction notice and submitted the requisite stamp duty the conveyance deed would have been executed prior to the amendment in law. Further, the appellants despite having the knowledge of the reduction of FAR F requested the respondent to execute the conveyance deed as such the plea of misrepresentation or mistake on account of change of FAR is not made out on the admitted facts. (1156·:-A-B; 1156-D-G] · 2.4. The appellant's pleadings of misrepresentation and mistake in the alternative, in the facts and circumstances of the case are mutually G destructive. Under section 21 a contract is not voidable because it was caused by a mistake as to any law in force in India. Appellants cannot rely on the pleading of mistake on their part or misrepresentation on the part of the respondents as to the applicability of Urban Ceiling Law and FAR as provided by .the bye-laws, both being the laws in force in India. H 1140 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A The vitiating effect of alleged mistake shall stand obliterated no sooner it is found that the appellants have, in spite of the so-called mistake being discovered, yet, chosen to stand by the contract, ratifying the same by their conduct and went ahead to exercise the rights which accrued to them under the same contract which they are pleading to be vitiated by B the mistake. [1159-G-H; 1160-A-BI 2.5. The submission that in the conveyance deed the FAR was again mentioned as 2.0 and at that stage there was a clear misrepresentation by respondent cannot be accepted. Assuming that there was some misrepresentation the appellants had a couple of remedies, i.e., C to either rescind the contract or seek restitution or to affirm the contract without prejudice to their right to seek damages by way of restriction for the loss caused by the misrepresentation. Appellants affirmed the contract which is clear from the fact that they immediately commenced construction on the land even though the building D plans were on FAR 1.75. Affirmation of the contract and proceeding with the construction clearly indicates that the appellants did not rescind the contract nor reserved their right to seek restitution by award of damages or seek restitution. [1156-G-H; 1157-A-D] E 2.6. At the time of initiating the legal proceedings in the Court, it was open to the appellants to either affirm the contract without prejudice to their right seeking damages by way of restitution for loss caused by alleged misrepresentation or to rescind the contract by getting the declaration that the contract was not binding on the F appellants. Appellants elected the first option. Had they rescinded the contract and prayed for declaration that the contract was not binding on them, then, on its being so declared, terms of the auction notice would not have bound the appellants in any way and the Court while granting the relief could have moulded the relief according to facts and situation prevalent. Appellants cannot be permitted to sit on the fence G in indecision and take a chance. By putting up the construction the appellants have encumbered the property and the respondent cannot be fastened with the liability to pay for the construction put up byappellants with full knowledge of true facts. (1157-G-H; 1158-A-C) H 2.7. The Urban Land Ceiling and Regulation Act, 1976 itself has GANGA RETREAT AND TOWERS LTD. v. STATE 1141 been repealed by the Notification of 7.10.1999. With the repeal of the A Ceiling Act, all proceedings under the Ceiling Act have abated. [1163-A-B] Pandit Madan Swaroop Shrotiya Public Charitable Trust v. State of UP. & Others, [2000) 6 SCC 325, referred to. B 2.8. The process for obtaining exemption from land ceiling did not in a~y manner affect the appellants as their plans were sanctioned even before the question was raised as to the application of the Ceiling Act to the prop.erty. Also the State Government has stated that it is not going to enforce the conditions imposed under the exemption C order. Immediately upon the sanction of building plans the process of construction began which clearly implies that the appellants had never intention of transferring the land as plots and therefore the condition inhibiting the transfer of plots was irrelevant so far as the appellants are concerned. Thus, the conditions imposed in the exemption order D were not an impediment in any manner. [1162-G; 1163-D-E] Sikkim Subba Associates v. State of Sikkim, (2001) 5 SCC 629; Mis Motilal Padampat Sugar Mills Co. Ltd. v. State of UP. & Others, (1979) 2 SCC 409 and Ningawwa v. Byrappa & Ors., (1968) 2 SCR 797, distinguished. H V. Rajan v. C.N Gopal and Ors., AIR (1975) SC 261, relied on. E Satyabrata Ghose v. Mugneeram Bangur and Co. and Anr., [1954) SCR 310; Mis. Alopi Parshad and Sons Ltd. v. Union of India, [1960) 2 SCR 793 and Raja Dhruv Dev Chand v. Harmohinder Singh & Anr., F [1968) 3 SCR 339, referred to. Indian Contract and Specific Relief Acts by Pollock and Mui/a Eleventh Edition, Volume I, pp. 269-270 and Chitty on Contracts Volume I, Twenty-Eighth Edition 1999 para 25-003, referred to. G 3. The power conferred by Section 90 of the Jaipur Development Authority Act, 1982 cannot be exercised by the Government to give directions to increase FAR in one individual or particular case. Policy and guidelines can be issued for general application or for a class of persons or area or based on some such other criteria as may withstand H 1142 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A the test of Article 14 of the Consti.tution. As such the appellants cannot claim a right to get exemption from the prevalent law nor heard to say that since the Government had the power to give direction, its failure to exercise the power of issuing direction, it has perpetuated the breach of contract. [1170-B-CJ B 4. Under section 298 of the Rajasthan Municipalities Act, 1959 general power is given to the Government that in case the Government feels that the bye-laws framed or the orders issued are not reasonable or are detrimental to the public interest or there is any other good ground available, then, it can repeal the bye-laws wholly or in part or C modify any rule or bye-law made by the Board after inviting objections. The power could not have bP.en exercised to suit the needs of an individual case. [1170-G-H; 1171-A-B] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5188 of D 2001. E From the Judgment and Order dated 9 . .5.2001 of the Rajasthan High Court in D.B.C.S.A. (W) No. 895 of 1999. WITH C.A. Nos. 5189 and 5190 of 2001. Shanti Bhushan, Dr. Abhishek M. Singhvi, M.R. Calla, Harish N. Salve, Sunil Kumar Jain, S. Borthakur, Kamal Gupta, S.M. Mehta, Adv. F General for State, Ms. Sandhya Goswami, J.B. Singh, Ms. Meenakshi Sakhardande, Ms. Aparajita Singh, Pradeep Agarwal, Dr. P.C. Jain, A.P. Dhamija, L.P. Singh, Punit Jain, Sushil Kumar Jain, Manish Singhvi and Ashok K. Mahajan for the appearing ·parties. G The Judgment of the Court was delivered by BHAN~ J. : Aggrieved by the judgment and order of the Division Bench of Rajasthan at Jaipur in setting side the order of the Single Judge, thereby, dismissing the writ petition filed by the appellants, the present appeals have been filed. All the three appeals have been filed by the same H set of appellants and against the same judgment. As three separate appeals GANGA RETREAT AND TOWERS LTD. v. STATE [BHAN, J.] l 143 were filed by the respondents before the Division Bench against the order A of the Single Judge the appellants have filed three separate appeals. They are taken up for disposal by a common order. The State of Rajasthan (hereinafter referred to as "the Respondent No. l ") decided to dispose of by public auction two prime properties B situated in the heart of Jaipur City. One of the properties was known as Dr. Helligs Bungalow, near Khasa Kothi State Hotel, M.I. Road, Jaipur and the other was a plot of land situated near Khasa Kothi known as the site of Food Craft Institute building on M.I. Road, Jaipur. In the present case we are concerned with the first property only. Respondent No. I issued advertisement for auction of Dr. Helligs Bungalow, which was scheduled C to be held, according to the auction notification on 21.12.1994. In the advertisement the property was described as free hold, ceiling free, vacant, crest j·ewel property known as Dr. Helligs Bungalow (10,400 sq. yards). The permitted use of the property was shown as hotel/commercial comp\ex/hote\ cum-commercial complex. The terms and conditions for the D auction were also provided in the advertisement. Condition Nos. 7, 8, 9, l 0, 12 and .13 relate to the controversies involved in this litigation and are reproduced hereunder: "7. Land measuring 1,400 sq. mtr. •hall be auctioned with the E condition that the successful bidder shall have to surrender a strip of land measuring 6.2 sq. mtr. for the road widening/parking of commercial vehicle free of charges. He will be given the benefit in terms of FAR, which is calculated on the basis of original plot size. 8. Other parameters of this plot size have been approved by JDA and are given as under: Coverage F.A.R. No of floors Maximum permissible Height 62.5% F.A.R. 2.0 B+G+4 16.76 Mtrs. F G H 1144 A B c D SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. Parking provision Set backs Front towards Front towards Rear IPCU per 200 sq. mtr. of built up area 15 mtrs. Station Front to'.vards roads. 15 mtrs. Circuit House 7.5 mtr. At