Developer Cannot Be Blamed For Delay | Allahabad HC Slams Noida Authority For Keeping Construction Permission Pending | Cancellation Quashed And Correction Deed Directed
Isabella Mariam
The High Court of Judicature at Allahabad Single Bench of Justice Prakash Padia held that the cancellation of allotment and forfeiture of premium by the development authority was unjustified due to the authority's own lapses in handing over possession and executing a corrected lease deed. The Court quashed both the allotment cancellation order and the related forfeiture of payment, issuing a direction for execution of a correction/surrender deed and an extension for the construction period. The judgment concluded that the development authority had acted contrary to the record and failed in its obligations, which directly impacted the petitioner’s ability to fulfil its contractual duties. As a result, the petitioner could not be held liable for consequences arising from these failures.
The petitioner company was part of a consortium to which the development authority allotted group housing Plot No. GH-03, Sector-10, Greater Noida, measuring 64,000 square meters, through an allotment letter dated 7 August 2014. Subsequently, on 13 November 2014, a separate allotment of Plot No. GH-3B, Sector-10, Greater Noida, measuring 22,000 square meters, was made to the petitioner. This was followed by a lease deed executed on 9 April 2015 between the petitioner and the Greater Noida Industrial Development Authority, under which the total premium was calculated as Rs. 53.24 crores, with Rs. 10.64 crores paid initially before lease execution.
The petitioner argued that although possession was claimed to have been given in accordance with the site plan annexed with the lease deed, in reality, physical possession was not handed over. Repeated requests for possession were made by the petitioner, including before the Revisional Authority, where a possession certificate was produced over WhatsApp for the first time. This certificate, dated 9 July 2015, contained a different site plan than the one annexed with the lease deed and was not signed by the allottee.
In paragraphs 53 to 56 of the writ petition, it was stated that the altered site plan in the possession letter was never communicated. The development authority did not specifically deny this in its counter affidavit, merely stating that details were provided elsewhere. The authority also failed to produce any document verifying the service of the possession certificate. Additionally, the possession memo presented during the revision proceedings lacked the required signature of the petitioner.
The petitioner maintained that the development authority had unilaterally altered the site plan without executing a correction/supplementary deed. This omission directly impacted the petitioner’s premium liability, which should have been recalculated based on the modified plan. It was further pointed out that in a similar case involving M/s Shirja Real Estate Solutions Pvt. Ltd., a supplementary deed was executed in 2018, yet no such deed was executed in the petitioner’s case. No counter affidavit was filed to dispute this specific claim.
The second ground for the cancellation of allotment was the alleged failure to construct the building within the stipulated time. The petitioner submitted that it had filed a building plan on 10 June 2015 and, after addressing objections, resubmitted the corrected plan on 18 March 2016, depositing Rs. 38,01,318 as processing fee. However, the plan was neither approved nor rejected by the development authority. The petitioner asserted that due to this inaction, construction could not begin, nor could flats be floated in the market for financing.
The authority had raised objections via a letter dated 4 May 2016, but the petitioner argued that this letter was never served. Despite specific denials in the writ petition and reiteration in the rejoinder affidavit, the respondents failed to submit any material evidence proving service of this objection letter. The counter affidavit also did not clarify how the objection was communicated.
The petitioner contended that the lack of a correction deed, failure to provide possession as per the altered site plan, and non-communication of objections to the building plan meant there was no occasion to remove those objections or initiate construction. Consequently, the grounds cited by the authority for cancellation and forfeiture were not valid.
The respondents argued that the petitioner had defaulted in premium payments and failed to initiate construction within the required time frame. They maintained that possession had been given and that objections to the building plan were communicated via the 4 May 2016 letter. They further stated that the terms of the lease deed justified the cancellation and forfeiture.
The petitioner rebutted these claims, stating that there was no proof of the 4 May 2016 letter being served and reiterating that the possession certificate did not contain any signatures. The difference in site plans was also again stated.
The petitioner relied on the authority’s conduct in a comparable matter involving a member of the same group company where the authority had executed a correction deed but failed to do the same in this instance. This distinction, according to the petitioner, amounted to arbitrary and discriminatory treatment.
The Court recorded that "actual layout plan prepared by Building Development annexed with the letter dated 9.7.2015 was admittedly provided to the petitioner at the time of hearing of the revision, is different to the site plan annexed along with the lease." It noted that "the possession letter did not contain the signature of person taking over the possession i.e. allottee. Thus, it is established that the possession of changed site plan was not handed over to the petitioner."
The Court further stated, "no correction/supplementary deed has been executed by the development authority in accordance with the amended/corrected layout plan dated 9.7.2015." It also stated that, "the respondent-development authority has failed to communicate the change in layout plan to the petitioner and delivered the actual physical possession as per the changed layout plan."
Referring to the treatment of M/s Shirja Real Estate Solutions Pvt. Ltd., the Court recorded, "in similar circumstances, the correction deed has been executed by the development authority in favour of M/s Shirja Real Estate Solutions Pvt. Ltd., another member of the same consortium."
The Court observed, "the alleged possession was given on 24.4.2015, i.e. after execution of the lease deed" and "the said letter is only a paper work and no actual physical possession was handed over to the petitioner." It also examined the new site plan and stated, "From perusal of the same, it is clear that the aforesaid site plan is a different site plan... neither the possession was taken over by the allottee nor the same has been handed over by the respondent no.2 to the allottee."
In evaluating the issue of construction, the Court held, "The only dispute is with regard to service of letter dated 4.5.2016... the letter dated 4.5.2016 has not been served upon the petitioner." The Court stated, "No evidence of service of aforesaid letter has been brought on record." It noted that "the petitioner could not float the construction plan and could not collect the funds from the market to be paid to the development authority."
The judgment referred to the Supreme Court decision in Municipal Committee Katra & others Vs. Ashwani Kumar, AIR 2024 SC 2855, stating, "It is beyond cavil of doubt that no one can be permitted to take undue and unfair advantage of his own wrong to gain favourable interpretation of law."
The Court recorded, "the failure has been on part of the development authority for which the petitioner cannot be penalized."
The Court quashed the order dated 17 April 2023 passed by the Additional Chief Secretary, Industrial Development Department, Government of Uttar Pradesh, Lucknow and the order dated 5 June 2017 passed by the Chief Executive Officer, Greater Noida Industrial Development Authority, which cancelled the petitioner’s allotment.
The Court issued a mandamus directing the respondent no.2 to execute the necessary correction/surrender deed to amend the original lease deed dated 9 April 2015, as per the site plan annexed with the letter dated 9 July 2015.
A further mandamus was issued to respondent no.2 to extend the period for construction as per the correction/surrender deed.
Advocates Representing the Parties:
For the Petitioners: Sri Sudhanshu Kumar and Sri Swapnil Kumar, Advocates
For the Respondents: Smt. Anjali Upadhya, Chief Standing Counsel; Sri Shivam Yadav, Advocate
Case Title: M/S Kinetic Buildtech Pvt. Ltd. v. State of U.P. and Another
Neutral Citation: 2025: AHC:96738
Case Number: WRIT - C No. - 16306 of 2023
Bench: Justice Prakash Padia
