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2014 (9) TMI 1164 - SUPREME COURTCancellation of plot of land to M/s. Platinum Square for establishment of country club - Agreement of Lease was repudiated and rescinded - non-issuance of tender before making allotment - Section 23 of the Contract Act - whether the allotments of valuable land by CIDCO to one person in different capacity for the purposes mentioned, that too by entertaining private applications, are arbitrary, illegal and fraudulent and against the public policy as contemplated under Section 23 of the Indian Contract Act? Held that:- Although allotment of plot for the purposes mentioned was either at a fixed price or by competitive bidding, but no procedure was adopted by the appellant for allotment of these plots either by tender or by competitive bidding. It has also come on record that as against these plots allotted to the respondents, no other application was either invited or received from interested persons. Obviously, when the tender was not advertised or any notice inviting applications were made then there was no occasion for any person to apply for allotment of these plots - no transparency has been maintained by the appellant-CIDCO in making these allotments of Government land. It is well settled that whenever the Government dealt with the public establishment in entering into a contract or issuance of licence, the Government could not act arbitrarily on its sweet will but must act in accordance with law and the action of the Government should not give the smack of arbitrariness. The High Court instead of looking into the matter, completely ignored the same on the ground that in the show cause notice none of the grounds were made basis of the order of cancellation of allotment. The High Court while exercising power of judicial review is supposed to have gone into the question as to how the three plots were allotted in favour of one group of persons. The High Court has lost sight of the admitted fact that by entertaining private applications of the same person three different valuable plots have been allotted in different names. The High Court fell in error in holding that the allotment of plots of land to the same person but in the names of trust is also justified. The action of cancellation of allotment of plots, as tried to be justified by CIDCO, would show that the High Court failed to appreciate such cogent reasons in deciding the matter while exercising the power of judicial review. It is more evident and clear that arbitrariness had a role to play in the matter while allotting the three plots in favour of one group of persons which certainly would come within the meaning of arbitrariness on the part of CIDCO and against the public policy. Such an action on the part of CIDCO, is nothing but a favouritism based on nepotism and was irrational and unreasonable and functioning in a discriminatory manner. The CIDCO was justified in cancelling all the allotments made in favour of the respondents - appeal allowed.
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