R.V.RAVEENDRAN, J. - (1.) THE appellants in these appeals are the lessees of plots allotted by the New Okhla Industrial Development Authority (for short 'the Authority' or 'NOIDA') for construction of 5 star, 4 star and 3 star hotels in Noida, District Gautam Budh Nagar, Uttar Pradesh. THE said Authority was constituted under the provisions of the U.P.Industrial Area Development Act, 1976 ('Act' for short) for development of an Industrial and Urban Township of Noida in Uttar Pradesh, neighbouring Delhi.
(2.) TOURISM was granted the status of an "industry" by the state government during 1997-98, by extending certain concessions and facilities available to industries. However as tourism, in particular hotel industry, had not received the required encouragement, the state government with the intention of attracting capital investment in tourism industry came up with a policy, as per its communication dated 22.5.2006 addressed to the Director General of TOURISM, Uttar Pradesh. Relevant portions of the said policy are extracted below : (1) Land should be earmarked for hotels by the concerned Development Authorities while preparing the Master Plan with the cooperation of the TOURISM Department and such land should be provided for hotels. Where the Master-Plan stands finalized, the said procedure has to be followed in respect of surplus land. In regard to Development Authorities which have not finalised the Master Plan, steps may be taken for reserving land for hotels to the extent possible, near tourist spots/places of tourism with the assistance of the TOURISM Department. Whenever the Master Plans of Authorities are revised, the land should be earmarked for hotels with the assistance of the TOURISM Department. The lands earmarked will be kept reserved for tourism/hotels for five years from the date of publicizing the scheme. If no hotel entrepreneur comes forward in five years, the authority shall be free to alter its land use. (2) If change in land use by the Authority is necessary for giving the earmarked plot to hotel industry, such change in land use shall be done by the Authority in accordance with the rules and the prescribed procedures on a 'case to case' basis by the competent authority. (3) (4) x x x x x (5) Since TOURISM including Hotels, has been given the status of Industry, in regard to hotels also plots shall be earmarked as in the case of industries, and shall be allotted at industrial rates as in the case of industrial plots. This policy shall be implemented in every district of the State. (6) x x x x x (7) They shall be given cent-percent rebate in Sukh Sadhan Tax for five years from the date of starting of new hotels. Other concessions shall be admissible as per industrial policy. (8) The earmarked land for Hotel industry, shall be allotted only to TOURISM entrepreneurs. (10) Land shall be made available to hotel entrepreneurs by all Authorities including the Housing and Industrial Development Departments, at industrial rates. To ensure that hotel entrepreneurs may get the benefit of this provision, all the above Authorities shall ensure the necessary arrangements/amendment in their rules so that it may be possible to make available the land to hotel entrepreneurs on industrial rates. (11) Only in areas where there are Authorities, the estimation of category wise requirement, determination of number of plots and star category wise determination of hotels will be made by the concerned Authorities. In other areas the TOURISM Department shall assist in this exercise. x x x x x (15) After earmarking the land for hotels, applications will have to be invited for allotment to hotel/tourist entrepreneurs on industrial rates. The condition of eligibility for applicant shall be as follows:- x x x (16) Where there is industrial lands, and more than one applicant, the Development Authorities shall allot the industrial land on the basis of suitability of the applicants, in accordance with the current procedure." (emphasis supplied) At the 135th meeting of the Board of Directors/Members of NOIDA (for short 'NOIDA Board') held on 5.6.2006, the said State Policy dated 22.5.2006 to attract more capital investment in tourism/hotel industry was considered. The NOIDA Board resolved to implement the said policy in the areas falling within its jurisdiction and apply the rates applicable to its Industrial area (Phase I) to the plots to be allotted to the hotel industry. The rate referred was the reserve rate of Rs.7400/- per sq.m. applicable to Industrial Area (Phase I) plots, fixed by the NOIDA Board at its meeting held on 20.3.2006. The resolution also mentioned that the implementation of the said policy should ensure construction of sufficient hotels before the Commonwealth Games to be held in Delhi, which were scheduled to commence in October, 2010. Having regard to the importance of the matter, the Principal Secretary, Tourism, the Commissioner, Meerut Circle and the Director of Industries of the U.P. Government, attended the said meeting as special invitees. At a meeting held by the Circle Commissioner, Meerut on 2.7.2006 with officials of NOIDA, he communicated the direction that construction of Hotels should be completed before the commencement of the Commonwealth Games. At the said meeting the following 14 plots were identified as being suitable for allotment as hotels/plots: (a) six plots each measuring 40000 sq.m. for 5 star hotels in Sectors 96, 97 and 98; (b) five plots each measuring 20000 sq.m. for 4 star hotels in Sectors 72, 101, 105, 124 and 135; and (c) three plots for 3 star hotels (measuring 20000, 20000 and 10000 sq.m.) in Sectors 62, 63, and 142. In view of the Government's Policy dated 22.5.2006 and the decisions taken at the meeting chaired by the Commissioner, Meerut Circle on 6.7.2006, the NOIDA Board took the following decisions at its 136th meeting held on 14.7.2006 : (i) It approved the proposal for making provision for hotels in reserved commercial area - Zone C 3 (as hotels had not been permitted in commercial areas C-1 and C-2 of the master plan reserved for wholesale and retail activities and as there was demand for hotels due to Commonwealth Games 2010) and directed inclusion thereof in the approved proposed NOIDA Master Plan 2021 and reference to the State Government for its approval. (ii) It decided to launch the Hotel Plot Allotment Scheme and authorized the CEO to finalise the terms and conditions for allotment, so as to ensure construction of hotels by the allottees before the commencement of the Commonwealth Games. In pursuance of the said decision, NOIDA sent a communication dated 20.7.2006 to the State Government seeking approval of its decision to make a provision for hotels in commercial areas under Zone 3 and inclusion of it in NOIDA Master Plan, 2021.
(3.) THE Secretary, Sports and Youth Affairs, Government of India, held meetings with NOIDA officials on 28.7.2006 and 22.8.2006 in connection with preparations for Commonwealth Games scheduled in October, 2010. At those meetings, the Secretary, Sports and Youth Affairs stressed the Government of India's request for earmarking 25 hotel plots in NOIDA. THErefore it was decided to reduce the area of 5 star hotels to 24000 sq.m. (instead of 40,000 sq.m. earlier proposed), the area of 4 star hotels to 12500 sq.m. (instead of 20000 sq.m.) and the area of 3 star Hotels to 7500 sq.m. (instead of 10000 sq.m.) and thereby convert the 14 plots into 25 plots made up of 10 plots for 5 star hotels, 5 plots for 4 star hotels and 10 plots for 3 star hotels. At the meeting held on 28.8.2006 under the chairmanship of the Circle Commissioner, Meerut, the said decision to increase the number of plots for hotels from 14 to 25 by reducing the plot measurements, in the following manner: (i) Ten plots for 3 star hotels - (area 7500 sq.m. each) Plot Nos. SDC/H1 and SDC/H2 in sector 62, plot Nos.A-155/B and A-155/C in sector 63, plot No. SDC/H 2 in sector 72, plot No.124A/2 in sector 124, plot No.SDC/H-2 in sector 103, plot No.SDC/H-2 in sector 105, SDC/H-2 in sector 135 and plot No.14 in sector 142. (ii) Five plots for 4 star hotels : (area : 12,500 sq.m. each) Plot No.SDC/H-1 in sectors 72, 103, 105 and 135 and plot No.124A/1 in sector 124. (iii) Ten plots for 5 star hotels : (area 24,000 sq.m.) Plot Nos.H-1 to H-10 in sectors 96, 97 and 98. THE proposal for approving the increase in number of plots and reductions in their size was placed before the NOIDA Board at the 137th meeting on 1.9.2006. THE NOIDA Board approved the proposal. THE terms and conditions for allotment drawn by the CEO were also approved with a modification that they should provide for obtaining Hotel Completion Certificate by December 2009 (with authority to CEO to grant extension of time). In pursuance of the said decision, NOIDA published the Hotel Site Allotment Scheme on 17.10.2006, by advertisements in newspapers and by issue of information brochures containing detailed terms and conditions, inviting applications for allotment of plots for 5 star, 4 star and 3 star hotels in NOIDA on 90 years lease basis. Applications were made available between 17.10.2006 and 1.11.2006 (extended till 10.11.2006). We extract below the relevant information from the Brochures. The following eligibility criteria were prescribed : Allotment of hotel sites among the eligible applicants shall be done on the basis of their experience, turnover and net worth. Allotment of hotel site to the eligible applicants shall be made in descending order, of the plot applied for, on the basis of their evaluation. In case same marks are obtained by more than one applicant, then allotment amongst them shall be made on the basis of draw of lots. For each hotel that has a tie up/collaboration with international chain of hotels or in case the applicant company/institution is itself an international chain, then three additional marks shall be awarded for each hotel in the 3/4/5 star and above/equivalent rating category owned/managed by the applicant. "Rate of Allotment, that is premium payable (Clause 13 of the Brochure) a) The current rate of allotment is Rs.7,400/- (Rupees Seven Thousand Four Hundred Only) per square metre. b) Besides, Location benefit charges as stated below shall be charged in addition to above allotment rate at the following rates :- (i) 2.5% of above rate if plot is on 18 mtr. but less than 30 mtr. wide road. (ii) 5% of above rate if plot is on a road having width of 30 mtr. or above. (iii) 2.5% of above rate if plot is facing/abutting green belt or park. (iv) 2.5% of above rate if plot is a corner plot. The maximum location charges would not exceed 10% of the total allotment amount of the plot. c) The land rate stated above is subject to change without giving any notice. The rate prevailing on the date of issue of allotment letter would be applicable." Payment of annual rent : (extracted from clause E in the Brochures) In addition to the amount paid/payable for the allotment of plot, allottee shall have to pay yearly lease rent in the manner given below : a) The lease rent will be 2.5% of the total amount paid for the plot and will be payable annually. b) On expiry of every ten years from the date of execution of the lease deed, lease rent would be enhanced by 50% of the annual rent payable at the time of such enhancement. x x x x x x e) Allottee has the option to pay lease rent equivalent to 11 years of the current lease rent as "One Time Lease Rent" unless the Authority decides to withdraw this facility. On payment of One Time Lease Rent, no further annual lease rent would be required to be paid for the balance lease period. This option may be exercised at any time during the lease period, provided the allottee has paid the earlier lease rent due and lease rent already paid will not be considered in One Time Lease Rent option." Norms of development (extracted from Clause (I) in the Brochures): (a) Ground coverage and floor area ratio is as under : (b) Other norms: i. 5% of the FAR can be used for Commercial space. 10 ii. Basement below the ground floor to the maximum extent of ground coverage shall be allowed and if use for parking and services would not be counted in the FAR. Basement used for parking will be permitted upto the setback line of the plot." "Transfer (Clause J of the Brochures) 1. The allotted plot shall not be transferred before the allotted premises is declared functional by the Authority. In case the allottee wants to transfer the plot after the hotel is declared functional, the allottee will have to seek prior permission from the Authority. Authority may refuse to allow transfer without giving any reason. However, in case the transfer is permitted, transfer charges shall be payable as per policy of the Authority and all terms and conditions of transfer memorandum shall be binding jointly and severally on the transferee and transferor. 2. No change in shareholding pattern of the members in the Consortium shall be permitted till the project is completed and functionality certificate is obtained from the Authority. 3. In no circumstances, the sub-division of plot will be allowed by the Authority. 4. The allottee shall not be allowed to use any land other than allotted premises and shall also ensure to keep the allotted premises, environment neat and clean. Cancellation (Clause (o) of the Brochures) (i) If it is discovered that the allotment of the plot has been obtained by suppression of any fact or misstatement or misrepresentation or fraud the allotment of the plot shall be cancelled and the entire deposited amount shall be forfeited to the Authority. (ii) If there is any breach in the terms of allotment, or if the allottee does not abide the terms and conditions of the building rules or any rules framed by NOIDA, the allotment may be cancelled by the Authority and the possession of the demised premises shall be taken over by the Authority from the allottee. In such an event, allottee will not be entitled for any compensation whatsoever and refund of any amount credited or is in arrears/overdue as Revenue Receipt(s) if any, may be refunded after forfeiting the amount as per rules. However, total forfeited amount would not exceed the total deposits. ;