The Calcutta High Court has dismissed an appeal by the Mizoram government against an order directing it to complete the sale of a Kolkata property to Excel Vincom Private Limited for approximately ₹38.3 crore. The court held that the government could not withdraw from an agreement after accepting the full sale consideration and acting upon the arrangement, merely because a new political regime had taken charge.
A Division Bench of Justices Arijit Banerjee and Apurba Sinha Ray described the cancellation as a case of “regime revenge”, observing that a change of government could not be used to renege on a commitment made to a citizen who had acted upon it to his detriment.
“It does appear to us that this is a case of ‘regime revenge’. The Government cannot renege on a promise made and acted upon by a citizen to his detriment, only because there is a change in regime,” the Bench said.
In its November 13 judgment in State of Mizoram and Others v. Excel Vincom Private Limited and Another, the court upheld the earlier order directing the state government to execute the sale deed. It extended the deadline for completing the transaction to eight weeks.
How the property sale agreement was reached
The dispute concerns a plot at 24, Ashutosh Chowdhury Avenue in Kolkata, which the Mizoram government purchased in 1973. The property housed a government guesthouse and offices and had served as Mizoram House in the city.
In May 2023, the state government initiated an e-tender-cum-e-auction process to sell the property. Excel Vincom emerged as the highest bidder on July 19, and its bid was accepted the following day. A letter of intent was issued to the company on August 4, followed by an agreement for sale on October 6.
A draft sale deed was prepared, and the company was asked to proceed with the formalities on October 31. The government subsequently issued a letter of award on December 1. Excel Vincom paid the entire sale consideration, along with penal interest for delayed payment of an instalment, on December 7.
The government also acknowledged receipt of the payment and indicated that the company would be informed about the execution of the sale deed and related tax formalities.
However, the Mizoram Assembly elections brought a new government to power in December 2023. The change in political leadership affected the progress of the transaction, and the new administration eventually cancelled the tender process through a notification issued on January 4, 2024.
Mizo organisations objected to the sale
The cancellation followed representations from the Kolkata Mizo Students and the Calcutta Mizo Welfare Association, which raised concerns about the property's historical and heritage significance.
The organisations highlighted its importance as a place that had provided shelter and support to Mizo students and professionals living in Kolkata. The proposed sale had also triggered considerable opposition among sections of the Mizo population.
Mizoram Advocate General Biswajit Deb told the High Court that the decision was not prompted by a change of political regime but by the sentiments of the close-knit Mizo community in Kolkata. He argued that the government had acted in the larger public interest and had refunded the entire amount paid by Excel Vincom.
Deb further contended that ownership could be transferred only after the sale deed was fully executed and registered. Since that stage had not been reached, he argued, the government retained the right to cancel the tender.
Senior Advocate SN Mookherjee, appearing for Excel Vincom, disputed this position. He submitted that correspondence between the company and the government demonstrated that the transaction had progressed beyond the stage at which the tender could be cancelled. According to him, the only remaining step was execution of the sale deed, and the process was abruptly halted after the change in government.
Court finds cancellation arbitrary and unjustified
The Division Bench noted that the Mizoram government had received the entire sale consideration and had also accepted penal interest for the delayed payment of an instalment. It observed that the agreement had been finalised after considerable deliberation between the parties.
The court also took note of communications indicating that the government had assured the company that steps to finalise the sale deed would be taken after the 2023 Assembly elections. However, following the formation of the new government, the sale was cancelled unilaterally, without even entering into a dialogue with Excel Vincom.
The Bench found that the state had failed to establish any public interest, let alone an overriding public interest, that could justify scrapping the transaction after the company had fulfilled its payment obligations.
“The appellants (Mizoram Government) have not been able to demonstrate any public interest, far less overwhelming public interest, which could justify cancellation of the tender process. The decision of the Government to cancel the entire process appears to us to be a clear case of regime revenge,” the court observed.
It held that the cancellation was unjust, arbitrary and violative of Article 14 of the Constitution, which guarantees equality before the law and equal protection of the laws.
The Bench further emphasised that a government, once it becomes a party to a contract, is legally obliged to act fairly, justly and reasonably. A change in political leadership cannot, by itself, provide grounds for disregarding commitments made by the state.
Earlier order directing sale deed upheld
The appeal was filed by the Mizoram government against an April 2, 2024 order passed by a single-judge Bench of the Calcutta High Court. The single judge had set aside the cancellation of the tender and directed the state to execute the sale deed in favour of Excel Vincom within six weeks.
The Division Bench found no valid basis for interfering with that decision and dismissed the government's appeal. It directed the Mizoram government to complete the sale deed within eight weeks.
The appeal was heard in FMA 772 of 2024. The court made no order as to costs.
Advocate General Biswajit Deb, along with advocates Sayan Dev Kumar, Priyakshi Banerjee, Sourav Ghosh and Priyanka Ghosh, appeared for the Mizoram government. Senior Advocate SN Mookherjee represented Excel Vincom, assisted by advocates Rajarshi Dutta, Shaunak Mukhopadhyay, Shubrajyoti Mukherjee, Neelesh Choudhury and Anuradha Poddar.