Hyderabad HC directs Telangana government to pay Rs 660.55crore to Unitech

Therefore, the respondents are bound to make restitution of the amounts claimed by petitioners with interest, the judge noted.
Hyderabad High Court
Hyderabad High Court

HYDERABAD: In a relief to Unitech Limited, a New Delhi-based real estate investment company, the Hyderabad High Court on Thursday directed the Telangana government and its state industrial infrastructure corporation (TSIIC) to pay `660.55 crore dues, including interest component, to the company within four weeks. 

The court made it clear to the State government and TSIIC that they were entitled to recover the amount from Andhra Pradesh State and APIIC during the division of assets of the corporation under Section 53 or 47 of the AP Reorganisation Act, 2014. The Court also imposed costs of `10,000 on TSIIC to be paid to the company.

Justice MS Ramachandra Rao was allowing the petition filed by Unitech company seeking refund of its amount of `165 crore along with interest, paid in the year 2008 to the then composite State of Andhra Pradesh towards development of an integrated township project on 350 acres of land at Saroornagar mandal in Rangareddy district. As for the case details, Unitech company was declared as the successful bidder in the auction conducted by the HMDA. A development agreement was executed between the APIIC and the company in August 2008. 

Later, litigation arose over the title of the subject land and the State government lost the case in the Court. Even after losing the rights over the land the government had so far not refunded the amount paid by the company. Aggrieved with the same, Unitech approached the High Court with a plea for refund of its `165 crore along with interest at SBI prime lending rate from the date of deposit till the date of payment. While matters stood thus, the united state of AP was bifurcated into AP and Telangana on June 2, 2014. Petitioner’s counsel contended that once it was declared that there was no title in favour of the government and TSIIC, there would be an automatic discharge in favour of the company of `165 crore with interest.
On the other hand, the government counsel contended that as per the terms of the advertisement, no interest was payable if title was not conveyed.

After hearing both sides, Justice Ramachandra Rao said that retention of the amounts paid by the petitioner company by the respondent authorities was against the fundamental principles of justice, equity and good conscience and clearly amounts to unjust enrichment of the respondents particularly when such a retention was arbitrary and also violates Article 14 and 300-A of the Constitution of India. Therefore, the respondents are bound to make restitution of the amounts claimed by petitioners with interest, the judge noted.

Relying upon the Supreme Court judgment in Saraswathi Sugar Mills vs Haryana State Board, the judge held that petitioners’ claim for refund of money paid by them under the Development Agreement was maintainable. While allowing the petition, the judge held that the amount of `660.55 crore (`165 crore plus `495.55 crore interest) was due and payable to the petitioners by respondents (TS government and TSIIC), within next four weeks.

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