Delve into the complexities of a property allotment dispute where the court’s legal analysis played a pivotal role in resolving the contentious issue. The case involved scrutinizing allotment rates, lease deed execution, refund conditions, and more. Stay tuned to unravel the legal intricacies and nuances of this challenging legal battle.
Facts
- NOIDA Board approved the proposal for provision of hotels in reserved commercial area – Zone C 3.
- Decision made to reduce the area for 5 star hotels to 24,000 square metre, 4 star hotels to 12,500 square metre, and 3 star hotels to 7,500 square metre.
- 14 plots were converted into 25 plots with 10 for 5 star hotels, 5 for 4 star hotels, and 10 for 3 star hotels.
- Meetings and decisions made regarding the allotment of hotel plots in NOIDA for the Commonwealth Games.
- Terms and conditions for allotment were finalized for hotel construction before the Commonwealth Games.
- Various plots in different sectors were identified and allotted for different star category hotels.
- Signing of lease deeds, payment of premium, and rent were part of the process.
- Allotment of commercial plots to the appellants (2006-2007 allottees) was found to be valid and legal.
- However, the allotment was made at a fixed rate lower than the market rate the plots could have fetched through tenders or auctions.
- An equitable solution proposed was to allow the lessees to pay the difference in consideration that arose due to the wrong interpretation instead of cancelling the leases.
- The State Government indicated that the commercial plots could have fetched a premium rate of Rs.70,000 per square metre during the relevant time period.
- The High Court of Judicature at Allahabad allowed the writ petitions challenging cancellation orders due to lack of opportunity of hearing, and remanded the matter for a fresh decision.
- Upon challenge by the allottees in this Court, the State Government was permitted to reconsider the matter and subsequently decided to cancel the allotments made by NOIDA.
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Issue
- The High Court’s order setting aside the revisional order of the State Government and the consequential orders of cancellation of allotment of plots by NOIDA Authority is affirmed.
- The revisional orders of the State Government cancelling the allotments of plots to appellants are set aside.
- The appellants are provided with the option to continue their leases by paying the premium at Rs.70000/- per square meter without any location benefit charges.
- The appellants must exercise this option by 30.9.2011.
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Arguments
- Interest rate of 11% per annum suggested in the order was considered to be higher than the prevalent rate and needed to be scaled down.
- Mr. Mukul Rohatgi, Senior Advocate, and Mr. Ravindra Kumar, Advocate were heard in court.
- Mr. Mukul Rohatgi suggested that certain amounts may not be refunded to the contempt petitioners, but a reasonable rate of interest should be awarded to them on the amounts already deposited.
- Petitioners blame authorities for indifferent attitude leading to undeveloped properties and non-payment of premiums.
- NOIDA insists on full premium payment before executing lease, leading to stalemate.
- Interest rate of 11% per annum proposed by one party, while 7% per annum suggested by the Court.
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Analysis
- The affidavit filed by NOIDA presents arguments against the allegations made by the petitioner regarding non-execution of the lease deed and failure to pay instalments.
- The court finds the NOIDA’s claim of the allotment rate at Rs.70,000 per square meter reasonable and logical.
- The Second Option proposed in the Order dated 17.09.2019 aims to be mutually beneficial and consider public interest.
- The interest paid by the petitioner was due to delays in payment, for which the petitioner is accountable.
- The court is urged to consider refunding the petitioner with 11% interest on various refundable heads excluding stamp duty.
- Affidavits provide details of amounts deposited and refundable/non-refundable elements, highlighting the stalemate in the case.
- NOIDA’s stand on stamp duty payment being non-refundable is emphasized.
- Details regarding the surrender clause in case of withdrawal from allotment are cited.
- Comparative figures and bids in commercial property transactions are referred to in support of arguments.
- Issues of non-execution of supplementary lease deeds, lack of development on allotted plots, and implications of NOIDA’s actions are discussed.
- Various options and modalities are considered to address the impasse in the case and balance the interests of both parties.
Decision
- Contempt petitioners-allottees must pay all amounts due by 31.12.2019 with accrued interest to get a supplementary lease deed from NOIDA.
- Option given to petitioners to pay premium towards lease, with different conditions based on price quoted in auction.
- If option not exercised, deemed to have chosen First Option with no interest on the amount paid towards premium.
- Refund of amounts towards lease rent and interest only if re-sale price exceeds Rs.1,05,000 per sq. metre.
- Possession to be handed over by petitioners by specific dates for plots to be sold by NOIDA.
- Opportunity given to save leases by paying difference in premium.
- Revised Second Option detailing sale of allotted plots by NOIDA and refund conditions.
- Petitioners entitled to refund on specific terms based on auction prices and excess amounts above base price.
- State Government to consider stamp duty refund.
- Lease rent payment and refund details clarified.
- Closing remarks on contentions raised and closure of Contempt Petitions.
Case Title: HAMPSHIRE HOTELS AND RESORTS (NOIDA) PVT. LTD. Vs. RITU MAHESHWARI, CEO (2021 INSC 170)
Case Number: CONMT.PET.(C) No.-000413 / 2019
