IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 7608 OF 2009
Powai Panchsheel Coop Hsg.
Society & Anr. ….Appellant(s)
Maharashtra Housing Area
(MHADA) & Ors. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. This appeal is directed against the final judgment
and order dated 26.03.2008 passed by the High Court
of Bombay in Writ Petition No.2017 of 2003 whereby
the High Court dismissed the Writ Petition filed by the
2. In order to appreciate the issues involved in this
appeal, it is necessary to set out the facts in detail
3. The appellants herein were the writ petitioners
whereas the respondents herein were the respondents
in the writ petition out of which this appeal arises.
4. Respondent no.1 is a statutory authority created
under the Maharashtra Housing & Area Development
Authority Act, 1976 (for short called “MHADA Act”). It
is known as Maharashtra Housing and Area
Development Board (for short “Board”). One of the
objects of the Board is to make housing schemes for
the benefit of different sections of the people and
provide them the houses at reasonable costs. The
Board is, therefore, a State within the meaning of
Article 12 of the Constitution of India.
5. On 26.6.1995, the Board issued an
advertisement for sale of 1924 flats (1673 nondeluxe
and 251 deluxe) at the rate of Rs.2,995/ per square
feet at Powai (Mumbai)called (Powai Project). To
execute and supervise this project, the Board
appointed M/s. Kamath Constructions & Estate
Consultants (as their sole selling/commission agent)
[for short hereinafter called “M/s Kamath
6. For some reasons, only 123 flats could be sold,
out of 1924, by the Board. The Board, therefore, from
1995 to 1999 issued seven advertisements for sale of
remaining flats, pursuant to which 1597 flats (which
included sale of 123 flats) could be sold leaving still
327 flats unsold. The Board, therefore, decided to
reduce the price from Rs.2995/ per sq. feet to
Rs.2200/ per sq. feet for sale of remaining 327 flats
so as to enable it to sell the said unsold flats.
7. It is, with these background facts, the Board
issued 8th advertisement in local newspapers for sale
of remaining unsold flats (which included 251 deluxe
flats with a area of 893 sq. feet in Powai Project) and
also some other flats situated in other location in
Mumbai at the rate of Rs.2200/ per sq. feet on the
terms and conditions set out in the
advertisement/booklet. The Board, however, again
claimed that they did not receive good response.
8. On 10.02.2003, 11.02.2003 and 12.02.2003,
three Cooperative Societies namely (1) Shree Amey
Cooperative Housing Society (2) Shri Guru Krupa Cooperative
Housing Society and (3) Shree Sai Shraddha
Cooperative Housing Society (respondent nos.4, 5 and
6 in Writ Petition No. 2017 of 2003 respectively before
the High Court) (hereinafter referred to as “three
societies”) made their offers in writing for allotment of
500 flats in Powai Project on the terms offered by each
of them in their respective offers.
9. So far as appellant No.1 herein is concerned, it is
also a cooperative housing society and they also
applied on 03.03.2003 (Annexure P6) to M/s Kamath
Constructions and offered to purchase 110 flats of
Powai Project for Rs.17 crores. Appellant No.1 also
simultaneously applied to the Board on 03.03.2003
requesting them to supply all necessary details
regarding the Powai Project to enable them to book the
10. On the same day, M/s. Kamath Construction, on
their part, forwarded the offer of appellant No.1 to the
Board along with three other offers, which they
received from Andhra Bank, Canara Bank and Bank of
11. The Board on 10.05.2003/14.5.2003 held
meetings to consider several matters. Amongst them,
one matter was regarding sale of flats of Powai Project
with which we are concerned here in this appeal and
the offers made by the three societies and the
appellant No.1 for purchase of the flats of Powai
12. The Resolution No.192 which dealt with this
matter reveals that the Board considered only the
offers made by the three societies and eventually
accepted their offers with some modifications. The
Board, however, did not consider the offer of appellant
No.1 at all. The Resolution No.192 accepting the
offers of the three societies reads as under:
“ Annexure P7
Dated: 10/5/03 14.05.03
Subject: In the matter of sale in nature of
lumpsum of unallotted Delux and nonDelux
tenements at Powai.
In the Meeting of the Authority held on
10.05.2003, discussion was held on the Item
Note No. 192/20 of the above subject and the
Authority did not give approval in the form
as it is to the Resolution no. 16/2402 dated
25.02.2003 passed by the Board. Approval
was not granted as proposed by the
Administration in the above Item Note. By
carrying out necessary changes therein, the
Authority has granted approval.
While according approval to the
Resolution, a discussion to this effect has
been taken that if the amount is not paid
within the timelimit, interest at the rate of
14.5 be charged on the arrears of the
amount. A decision was also taken that if
the Chief Promoters of the societies have not
paid the sale price of the tenements within
the period, allotment should be cancelled
and amount of 10% of the sale price be
forfeited. It shows inconsistency therein it
does not become clear as to how and when
allotment shall be cancelled if the interest
has to be charged on the amount of arrears
and as to when 10% of the sale price shall be
forfeited. Hence it is necessary that there
should be clarity in this respect.
As per the notes taken by me in the
meeting of the Authority, a draft is submitted
herewith. However, after confirming the
minutes in connection with the business of
the meeting, an authorized Resolution be
kindly made available so that it would be
convenient for taking further action thereon.
As the implementation of this
Resolution has to be implemented without
waiting for its confirmation, the Resolution
of the Authority be kindly made available
with necessary amendments in the enclosed
draft resolution. Hence this request.
Joint Chief Officer/M.B.
As there is inconsistency with each other
shown in “A” the Resolution is submitted for
correcting the same.
DRAFT RESOLUTION NO. 192 Dt. 10.5.2003
1) Chief Promoters of all these three
Societies should pay the deposit amount at
the rate of Rs. 25,000/ per tenement to the
Board within 90 days from the date of receipt
of the allotment letter. So also a list of
Members of the Society should be submitted
to the Board within 90 days.
2) Amount of 25 per cent of the sale price
of the tenements should be paid within 190
days from the receipt of the allotment letter.
However, 5% amount of 25% be paid within
120 days, 10 per cent amount be deposited
within 150 days and the remaining 10 per
cent amount be paid within 180 days.
3) The payment of the remaining amount
of the saleprice be made by the Chief
promoters of the Society within 270 days
from the receipt of the allotment letter.
4) If the payment is not made within the
above period, interest at the rate of 13.5 per
cent on the amount of arrears be paid.
5) Within a period of 270 days, the Chief
promoters of the Society can effect change in
the list of their Members by paying charges
at the rate of Rs.500/ per member. However,
thereafter in case of change in membership,
amount to the extent of 1 per cent of the sale
price of the tenement shall be deducted from
the deposit amount of the original member
and besides that, transfer fee shall be charged
to a new member to the extent of Rs.5,000/
6) At least allotment of 100 tenements be
allotted to each one of these three societies
so that it would be possible to give them 15
per cent concession on the saleprice.
However, out of the above societies, 10 per
cent concession instead of 15 per cent of the
sale price shall be payable to the society
which will purchase less than 100 tenements.
7) As all the unallotted tenements at
Powai are allotted to the above Societies and
these are stray tenements located in the
buildings where it will be binding on the
members of the above Societies to become
members of the existing cooperative housing
societies registered or being registered in
future in respect of those respective
buildings. Hence unless they submit
affidavits to that effect, they shall not be
eligible for tenements to be allotted to them.
8) If the Chief promoters of the Society do
not pay installments of Saleprice of
tenements as per the above timetable, 10
per cent of the sale price for the tenements
should be forfeited.
9) Repair work of the unallotted
tenements should be taken in hand
10) Whatever allotment letters have been
given to the applicants and 51 deluxe
tenements in B.No.4 to the Bank Baroda,
allotment of tenements be made to them.
Thereafter, sale of tenements be stopped.
Implementation of this Resolution be
implemented without waiting for its
(True translation in English)
Item No. 192/20
Subject: In the matter of sale in the nature of
lumpsum of unallotted deluxe and nondelux
tenements at Powai.
Reference: 1 Letter dated 12.02.2003
from the Chief Promoter, Shri. Saisraddha
Coop. Hsg. Socy (Proposed) addressed in
writing to the Chairman/Mumbai Board.
2. Letter dated 11.02.2003 from the Chief
Promoter, Shri. Gurukripa Coop. Hsg. Socy
(Proposed), addressed in writing to the
3. Letter dated 10.02.2003 from the Chief
Promoter Shri. Ameya Coop. Hsg.
Socy(Proposed), addressed in writing to the
4. Letter dated nil written by Pooja Estate
Consultant & Construction dated nil to the
Vicepresident/Au. to the Chairman/Mumbai
5. Authority Resolution No. 178/5715
13. Appellant No.1, therefore, felt aggrieved and filed writ
petition before the High Court of Bombay out of which this
appeal arises and challenged therein the Board’s decision in
accepting the offers of three societies and not considering
along with them the offer of appellant No.1 in the meetings
held by the Board on 10.05.2003/14.05.2003. The
challenge was founded inter alia on the ground of mala fides
attributed to the officials for extending undue favour to the
three societies in accepting their offers, including the
manner in which their offers were accepted. The challenge
was also founded on legal grounds.
14. The Board and the three Societies contested the writ
petition. In substance, the Board while defending its
resolution dated 10/14.05.2003 inter alia contended that
appellant No.1 never submitted its offer but what it had
actually submitted was one letter dated 03.03.2003
addressed to the Board and M/s. Kamath Constructions,
wherein appellant No.1 made an inquiry to get more details
from the Board about the sale of flats of Powai Project. It
was contended that the Board received appellant No.1’s
letter on 03.03.2003 late as compared to the offers of the
three societies on 10.02.2003/11.02.2003/12.02.2003. It
was, therefore, contended that due to these reasons, the
Board did not entertain appellant No.1’s offer and
considered only the offers made by the three societies. So
far as the allegations of mala fides were concerned, they
were denied by the Board.
15. So far as the three societies are concerned, they
justified the stand taken by the Board and supported their
offers made to the Board for purchase of the flats as being
just, reasonable and proper, calling no interference in the
decision of the Board in their favour on 10/14.05.2003.
16. By impugned order, the High Court dismissed the writ
petition finding no fault in the Board’s decision taken in the
meetings on 10/14.05.2003, which gave rise to filing of this
appeal by way of special leave to appeal in this Court by
unsuccessful writ petitioners.
17. So the short question, which arises for consideration
in this appeal, is whether the decision of the Board in
accepting the offers of the three societies for purchase of
flats (Building No.8) of Powai Project and exclusion of
appellant No.1’s offer in their meetings held on
10/14.05.2003, is justified.
18. In other words, the question arises for consideration in
this appeal is whether the High Court was justified in
upholding the decision of the Board contained in their
Resolution No.192 in relation to sale of flats of Powai Project
(Building No.8) to the three societies without considering
appellant No.1’s offer.
19. Having heard the learned counsel for the parties and
on perusal of the record of the case, we are inclined to allow
the appeal, set aside the impugned order, allow the
appellants’ writ petition, out of which this appeal arises,
and issue writ of certiorari to quash the decision of meetings
dated 10/14.5.2003 and further issue a writ of mandamus
against the respondentsBoard and the three societies to
ensure its compliance as directed hereinbelow in detail.
20. The law on the question as to how and in what manner
the State should deal with its largesse at the time of its
disposal amongst the citizens is now a well settled principle
laid down by this Court in series of decisions beginning
from the case of R.D. Shetty vs. International Airport
Authority (1979) 3SCC 497.
21. A three Judge Bench speaking through Justice
Bhagwati (as His Lordship then was and later became CJI)
in R.D. Shetty ‘s case (supra) approved the observation of
Justice Mathew (as His Lordship then was the Judge of
Kerala High Court and later became a Judge of this Court)
which the learned Judge made in V. Punnan Thomas vs.
State of Kerala (AIR 1969 Ker 81). In Para 12 at page 505
of R.D. Shetty’s case (supra) Justice Bhagwati said in the
“We agree with the observations of
Mathew, J, in V. Punnan Thomas vs State of
The Government, is not and
should not be as free as an individual in
selecting the recipients for its largesse.
Whatever its activity, the Government is still
the Government and will be subject to
restraints, inherein in its position in a
democratic society. A democratic
Government cannot lay down arbitrary and
capricious standards for the choice of
persons with whom alone it will deal.”
22. Since then the Courts have been consistently following
the aforesaid dictum of law, which is later explained by this
Court in several cases whenever the question relating to
disposal of State largesse amongst the citizens arose for
consideration for deciding the rights of the parties qua each
other and the State. It is, however, not necessary to
mention these cases which have reiterated this principle as
it will only burden our order.
23. Keeping in view the aforementioned principle of law,
when we examine the facts of this case, we are of the
considered opinion that the Board was not justified in
considering only the offers made by the three societies
without considering appellant No.1’s offer dated 03.03.2003
on its merit.
24. In our view, the Board was under a legal obligation to
consider also appellant No.1’s offer which appellant No.1
had made to the Board through M/s. Kamath Constructions
vide its letter dated 03.03.2003 for purchase of the flats of
Powai Project along with the other offers made by the three
societies in their meetings held on 10/14.05.2003.
25. This we say for the reasons that firstly, M/s. Kamath
Constructions was the authorized agent appointed by the
Board itself for sale and disposal of the flats of Powai
Project: Secondly, M/s. Kamath Constructions on receipt of
appellant No.1’s offer on 03.03.2003 rightly forwarded it to
the Board on 03.03.2003 for its consideration; Thirdly, the
appellant’s offer dated 3.3.2003 was, therefore, very much
available to the Board for its consideration prior to the
meetings held on 10/14.05.2003. In other words, the date
on which the Board was considering the offers of the three
societies in its meeting on 10/14.05.2003, the offer of
appellant No.1 dated 03.03.2003 was with the Board for its
26. Fourthly, the very fact that M/s Kamath Constructions
entertained appellant No.1’s offer on 03.03.2003 and
forwarded it to the Board was indicative of the fact that offer
to purchase the flats of Powai Project could be made by any
party either to the Board or to M/s. Kamath Constructions
and had to be considered as being a valid offer made to the
27. Fifthly, reading of appellant No.1’s letter dated
03.03.2003 to M/s. Kamath Constructions would clearly
indicate that it was essentially an offer made by appellant
No.1 to the Board for purchase of 110 flats for Rs.17 crores.
In other words, it could not be treated as letter for soliciting
some information from the Board as contended by the
Board for its consideration.
28. In our view, keeping in view these five factors which
were admittedly present in the case, the Board was under a
legal obligation to consider all the four offers (appellant No.1
and the three societies) in their meetings held on
10/14.05.2003 with a view to decide as to which one out of
the four offers was the best one for its acceptance.
29. Indeed, exclusion of appellant No.1’s offer dated
03.03.2003 and keeping appellant no.1 out from the zone of
consideration by the Board in its meetings held on
10/14.05.2003 and only confining the consideration of the
offers made by the three societies vitiates the entire decision
of the Board taken on 10/14.05.2003.
30. In our view, appellant No.1 had a legitimate right and
so the expectation that it would get equal treatment from
the Board like the other three societies because all four were
similarly situated while considering the issue of sale of flats
of Powai Project. Indeed, there was no valid reason for the
Board to exclude appellant No.1’s case/offer from the zone
31. The reason given by the Board for nonconsideration of
appellant No.1’s case/offer namely that appellant No.1’s
letter dated 03.03.2003 was not an offer and, therefore, it
was not considered, had no basis for three reasons.
32. First, the socalled reason ought to have been
deliberated and reduced in writing by the Board in its
Minutes of Meetings held on 10/14.05.2003. It was,
however, not done; Second, the Board had no right to
disclose the reason for the first time in the return in the
High Court. It was not legally permissible; Third, the reason
given for its non consideration also had no basis because
as held above, the appellant No.1’s letter dated 03.03.2003
was in fact an offer to purchase the flats quoting therein the
price for purchase and, therefore, it was capable of being
considered on its merits treating it as an offer to purchase
the flats along with the offers of the three societies in the
meetings held by the Board on 10/14.05.2003.
33. In the light of the foregoing discussion, we are of the
considered view that the decision to sale/dispose of the flats
of Powai Project taken by the Board in its meetings held on
10/14.05.2003 (Resolution No.192) is vitiated as being
unreasonable, arbitrary and violative of principles enshrined
in Article 14 of the Constitution of India. It is not legally
sustainable and has to be, therefore, set aside.
34. Since we have set aside the impugned Resolution on
legal grounds, we need not go into the challenge made by
the appellants against the officials on the ground of mala
fides. It is not necessary.
35. The appeal thus succeeds and is allowed. Impugned
order is set aside. The writ petition filed by the appellants
out of which this appeal arises is allowed.
36. The impugned Resolution No.192 dated
10/14.05.2003 (Annexure P7 of SLP at page 52) of the
respondentBoard insofar as it relates to the decision taken
by the Board for sale/disposal of flats of Powai Project in
favour of the three societies is concerned, the same is
hereby quashed by issuance of writ of certiorari. The Board
is at liberty to proceed in the matter in accordance with law.
[ABHAY MANOHAR SAPRE]
[S. ABDUL NAZEER]
October 12, 2018