Supreme Court Upholds Land Allotment Based on Employment Status at Time of Allotment: S.V. Asgaonkar vs. MMRDA (2018)

Introduction

Date of the Judgment: April 09, 2018

Citation: (2018) INSC 288

Judges: A.K. Sikri, J., Ashok Bhushan, J.

Can a government authority change the terms of land allotment for its employees’ housing society after the initial approval? The Supreme Court of India recently addressed this question in a case involving the Mumbai Metropolitan Region Development Authority (MMRDA). The core issue was whether employees who were part of a housing society were eligible for land allotment even if they were not employed by the MMRDA at the time of the final allotment, but were employed at the time of the initial approval. The Court had to decide whether the eligibility should be based on the initial resolution or the subsequent allotment.

The judgment was delivered by a bench of Justices A.K. Sikri and Ashok Bhushan, with Justice Ashok Bhushan authoring the opinion.

Case Background

The Mumbai Metropolitan Region Development Authority (MMRDA) was established under the Mumbai Metropolitan Region Development Authority Act, 1974. The MMRDA also framed the Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations, 1977, which were amended on April 29, 1997. These regulations empower the Authority to dispose of its land.

The appellants were employees of the MMRDA. On June 7, 1997, the Authority passed a resolution to allot approximately 13,700 sq. mtrs of land at Chitalsar Manpada Village, District Thane, to a proposed cooperative housing society of its employees. This allotment was on a leasehold basis for 80 years, with a premium of Rs. 1400 per sq. mtr. A letter dated November 5, 1998, was sent to the proposed society, outlining the terms of the resolution.

The employees’ cooperative housing society was registered on June 25, 1999, under the Maharashtra Co-operative Societies Act, 1960. The Society then made three requests via letters dated July 23, 1999, November 19, 1999, and December 9, 1999:

• ✓ That the rate of Rs. 1400 per sq. mtr. was for developed plots, and land under roads and open spaces should be free.
• ✓ That instead of paying the premium in one or two installments, the Society should be allowed to pay in yearly installments over 10 to 15 years.
• ✓ That pending a final decision, advance possession of the land should be given by charging a token amount of 2% of the estimated cost.

On July 9, 1999, the Government of Maharashtra issued a resolution regarding the allotment of government land to housing societies, with various terms and conditions. The Authority did not respond favorably to the Society’s requests. The Society then sent a letter on February 26, 2001, requesting that a proposal be put forward for consideration of the Authority for allotment of land on similar terms as the allotment to the MMRDA Class-IV Employees Cooperative Housing Society. A reminder was sent on April 27, 2001. On May 3, 2001, the Authority asked the Society to review the terms of the Government Resolution dated July 9, 1999, and communicate its willingness to proceed.

On September 1, 2003, the Authority resolved to allot the land to the Society as per the terms of the July 9, 1999, Government Resolution, but at a rate of Rs. 2500 per sq. mtr. This modified condition No.(c) of the June 7, 1997, resolution. On December 11, 2003, the Authority informed the Society that the list of eligible members should be submitted, and after verification, the land would be allotted and possession given. The Society submitted the final list of members on June 10, 2004. However, on December 9, 2005, the Authority communicated that only 10,700 sq. mtrs of land would be allotted, and also provided a list of non-eligible members, including the appellants, stating they were “not in service on the date of LOI.”

Timeline:

Course of Proceedings

The appellants, aggrieved by the communication dated December 9, 2005, which deemed them ineligible for land allotment, filed Writ Petition No. 8224 of 2011 in the High Court of Judicature at Bombay. They sought to quash the communication, include their names as eligible members, and strike down condition No. 8 of Annexure-A of the Government Resolution dated July 9, 1999.

The High Court dismissed the writ petition on June 19, 2012. It held that the proposal submitted by the Society on April 27, 2001, was not a continuation of the 1997 allotment letter. The High Court noted that the allotment on September 1, 2003, was based on a fresh proposal and that one of the conditions of the Government Resolution of July 9, 1999, was that only employees in service on the date of allotment would be eligible. Since the appellants were not employed by the MMRDA on that date, they were rightly deemed ineligible.

Legal Framework

The case primarily revolves around the interpretation and application of the following:

• ✓ The Mumbai Metropolitan Region Development Authority Act, 1974, which established the MMRDA.
• ✓ The Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations, 1977, which govern the disposal of land by the MMRDA.
• ✓ The amended Disposal of Land Regulations, 1977, specifically Clause (iA) which was added on April 29, 1997, stating that:
  
  “(iA) If half of the premium shall not be paid within one month or in case of Government within two months, if permitted by the Metropolitan Commissioner, the Agreement concluded with the Authority shall stand determined and the Earnest Money deposited by Intending Lessee along with its tender or offer shall stand forfeited to the Authority without prejudice to the rights and powers of Authority to recover compensation for loss or damage, if any suffered in consequence of such breach of the Intending Lessee to so pay half of the premium to the Authority. Likewise, if the balance premium shall not be paid within twelve months as provided hereto before, the Agreement concluded with the Authority shall stand determined and the Earnest Money paid by him along with its tender or offer together with 25 per cent of the premium shall be forfeited to the Authority without prejudice to the right and powers of the Authority to recover compensation for loss or damage, if any, suffered in consequence of such default of the Intending Lessee.”
• ✓ Government Resolution dated July 9, 1999, issued by the Government of Maharashtra, which provides terms and conditions for allotting government land to cooperative housing societies.
• ✓ Condition No. 8 of Annexure-A of the Government Resolution dated July 9, 1999, which states:
  
  “8. It is a pre requisite that the Government Employee will be in the service on the date on which the indent letter will be issued to the Co-operative Housing Society, and only then such employee will be treated as eligible for membership.”

Arguments

Appellants’ Arguments:

• ✓ The appellants argued that the allotment of land should be considered as having been made on June 7, 1997, based on which the Letter of Intent dated November 5, 1998, was issued.
• ✓ They contended that they were eligible on the date of the resolution (June 7, 1997) and the date of the Letter of Intent (November 5, 1998), as they were in service at those times. They should not be deemed ineligible based on the letter issued on December 11, 2003, which was based on the resolution of September 1, 2003.
• ✓ The appellants submitted that the subsequent resolution of September 1, 2003, was a continuation and modification of the earlier resolution of June 7, 1997. Therefore, eligibility should be determined based on the original resolution date.
• ✓ They argued that as members of the Society and eligible for allotment, they should not lose eligibility simply because a subsequent resolution was passed.
• ✓ The appellants further argued that the High Court’s view that the allotment was based on a fresh proposal by the Society was incorrect. They claimed the allotment was a consequence of the earlier proposal that culminated in the resolution of June 7, 1997.

Respondents’ Arguments:

• ✓ The respondents argued that a fresh allotment was made on September 1, 2003, based on the Government Resolution of July 9, 1999, which was separate from the earlier resolution of June 7, 1997.
• ✓ They contended that since the appellants were not in the service of the Authority on the date when the Letter of Intent was issued (December 11, 2003), they were rightly excluded from the list of eligible members.
• ✓ The respondents supported the High Court’s view that the allotment was made based on a fresh proposal and that the eligibility criteria were correctly applied.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. ✓ Whether the High Court was correct in holding that the allotment dated September 1, 2003, was based on a fresh proposal submitted by the Society, and whether eligibility on June 7, 1997, was not relevant.

Treatment of the Issue by the Court

Authorities

The Court considered the following authorities:

Legal Provisions:

• ✓ Mumbai Metropolitan Region Development Authority Act, 1974: The Act under which the MMRDA was constituted.
• ✓ Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations, 1977: The regulations governing land disposal by the MMRDA.
• ✓ Clause (iA) of the amended Disposal of Land Regulations, 1977: This clause specifies the conditions for payment of premium and consequences of default.
• ✓ Government Resolution dated July 9, 1999: This resolution outlines the terms and conditions for allotting government land to cooperative housing societies.
• ✓ Condition No. 8 of Annexure-A of the Government Resolution dated July 9, 1999: This condition specifies that employees must be in service on the date of the indent letter to be eligible for membership.

Judgment

How each authority was viewed by the Court:

• ✓ The Mumbai Metropolitan Region Development Authority Act, 1974 was cited to establish the legal basis for the MMRDA’s actions.
• ✓ The Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations, 1977 and specifically Clause (iA) of the amended regulations were used to determine that the initial allotment of June 7, 1997, had lapsed due to non-payment of premium by the society.
• ✓ The Government Resolution dated July 9, 1999 was the basis for the fresh allotment made on September 1, 2003.
• ✓ Condition No. 8 of Annexure-A of the Government Resolution dated July 9, 1999 was the key provision that determined the eligibility of the members, requiring them to be in service on the date of the indent letter (December 11, 2003).

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• ✓ Lapse of Initial Allotment: The Court emphasized that the initial allotment of June 7, 1997, had lapsed due to non-compliance with the payment terms as per the Disposal of Land Regulations, 1977.
• ✓ Fresh Proposal: The Court determined that the allotment of September 1, 2003, was based on a fresh proposal by the Society, which was made in response to the Government Resolution of July 9, 1999.
• ✓ Compliance with Government Resolution: The Court stressed that the allotment was subject to the conditions of the Government Resolution of July 9, 1999, which included the requirement that employees be in service on the date of the indent letter (December 11, 2003).
• ✓ Acceptance by the Society: The Court noted that the Society itself had requested a fresh consideration based on the Government Resolution of July 9, 1999, and had also acknowledged that the eligibility of members should be seen as on December 11, 2003.
• ✓ Reduction in Allotment Area: The Court also considered that the area of allotment was reduced from 13,700 sq. mtrs to 10,700 sq. mtrs due to the exclusion of non-eligible members.

Logical Reasoning:

The Court considered the appellants’ arguments that the resolution of September 1, 2003, was a modification of the earlier resolution of June 7, 1997. However, the Court rejected this argument, emphasizing that the initial allotment had lapsed due to non-compliance with the payment terms. The Court also noted that the Society itself had requested a fresh consideration based on the Government Resolution of July 9, 1999, and had acknowledged that the eligibility of members should be seen as on December 11, 2003. The Court found that the fresh allotment was made based on the Government Resolution of July 9, 1999, which had a specific eligibility criteria that the appellants did not meet. The Court also considered the fact that the area of allotment was reduced due to the exclusion of non-eligible members.

The Supreme Court’s decision was based on a straightforward interpretation of the relevant regulations and the specific facts of the case. The Court concluded that the High Court had correctly applied the law and that the appellants were not eligible for the allotment based on the conditions of the fresh allotment.

The Court quoted the following from the judgment:

“The Society itself has given approval vide its communication dated 10.05.2001 to consider the allotment to the Society in its forthcoming meeting on 17.05.2001 on the basis of Government of Maharashtra Resolution dated 09.07.1999.”

“Thus, the Society was conscious of the fact that eligibility of members has to be seen as on 11.12.2003 that is the date on which Letter of Intent was issued in pursuance of allotment.”

“Taking into consideration the aforesaid facts and circumstances, we are of the view that no relief can be granted to the appellants.”

Key Takeaways

• ✓ Eligibility for land allotment in government schemes is determined by the specific terms and conditions of the allotment at the time of the final allotment, not the initial approval.
• ✓ If an initial allotment lapses due to non-compliance with regulations, a subsequent allotment is considered a fresh allotment with its own terms and conditions.
• ✓ Cooperative housing societies must ensure their members meet the eligibility criteria on the date of the final allotment, not just on the date of initial approval.
• ✓ Government resolutions and regulations regarding land allotment must be strictly followed, and any deviation can lead to disqualification.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

There is no specific analysis of any amendment in the judgment.

Development of Law

The ratio decidendi of this case is that when a land allotment lapses due to non-compliance with the terms and conditions, any subsequent allotment is considered a fresh allotment, and the eligibility of the members of the society has to be determined based on the conditions of the fresh allotment. The court clarified that the eligibility of the members must be seen on the date of the letter of intent of the fresh allotment. This case clarifies that a fresh allotment should not be considered a continuation of the previous allotment.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision. The Court ruled that the appellants were not eligible for land allotment because they were not in service on the date of the Letter of Intent for the fresh allotment. The Court emphasized that the initial allotment had lapsed due to non-compliance, and the subsequent allotment was a fresh one, governed by the terms of the Government Resolution of July 9, 1999. This case underscores the importance of adhering to the specific terms and conditions of government land allotment schemes and ensuring that eligibility criteria are met at the time of the final allotment.