In Brief
A state-run electronics corporation allotted land to a company for IT development at a tentative rate of Rs. 1 Crore per acre. The company later sought to change the use from IT to hospitality (hotel). The corporation, citing a 2007 Board resolution setting the prevailing rate at Rs. 3.2 Crores per acre for commercial use, demanded additional payment of Rs. 83.25 lakhs. The High Court dismissed the corporation's demand. The Supreme Court reversed this, holding that the lease agreement and allotment letter clearly stated the initial rate was tentative and subject to final determination. Change of use constituted a fresh transaction attracting the prevailing rate. The Court upheld the corporation's demand as lawful, as any loss would diminish public funds.
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