TMI Blog1999 (7) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... he Mahapalika to restore back the park in its original position within a period of three months from the date of the judgment and till that was done, to take adequate safety measures and to provide necessary safeguard and protection to the public, users of the park. High Court had noticed that the fact that the park was of historical importance was not denied by the Mahapalika and also the fact that perseverance or maintenance of the park was necessary from the environmental angle and that the only reason advanced by the Mahapalika for construction of the underground commercial complex was to ease the congestion in area. High Court, however, took judicial notice of the conditions prevailing at the Aminabad market. It said it was so crowded that it was bursting from all its seams. Construction of the underground shopping complex in question would only complicate the situation and that the present scheme would further congest the area. It said that the public purpose, which is alleged to be served by construction of the underground commercial complex, seemed totally illusory. Aggrieved by the impugned judgment of the High Court, appellant has come to this Court. Mahapalika also fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn and the Nagar Nigam Lucknow be further directed to oppose the Special Leave Petition filed by M/s. M.I. Builders in the Hon'ble Supreme Court against the Judgment dated 23.8.1994 of Lucknow Bench of Hon'ble High Court of Allahabad. Unanimously decided that the aforesaid resolution be passed and accordingly the action may be taken. The letter revoking the sanctioned building plans is dated April 17, 1997 and is as under:- To M/s M.I. Builders (P) Ltd. Karamat Market, Nishatganj, Lucknow Sir, Vide this office letter No. 223/Sa.Sa.A./95 dtd. 23.1.1995 the building plans for construction of underground shopping and parking complex at Jhandewala Park, Ameenabad were sanctioned. After taking legal advice by the Hon'ble Nagar Pramukh from the standing counsel of the Nagar Nigam and Add. Advocate General the earlier sanctioned building plans has been revoked vide order dated 17.4.97. As such these have no legal sanctity. Please be informed. Yours faithfully, Sd/- S.K. Gupta Mukhya Nagar Adhikari 17.4.97 Copy to: The Vice Chairman, Lucknow Development Authority, for information. Sd/- S.K. Gupta Mukhya Nagar Adhikari There were three writ petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plot shall not exceed 10% of the plot. SLP (C) Nos. 17223-25/94 Exemption from filing official translation is allowed. Leave granted. Tag on with appeals arising from S.L.P. (C) Nos. 16907-09 of 1994 in which interim orders have already been made. It is contended by the appellant that after the aforesaid interim order, it got necessary building plans sanctioned by the Mahapalika and started construction. Respondents, however, filed an application complaining that construction was in violation of the building plans and was also against the provisions of the U.P. Urban Planning and Development Act, 1973 (for short, the 'Development Act'). To ascertain the nature of construction being carried out at that time this Court appointed a Local Commissioner. These applications were then disposed of by passing the following order:- I.A. Nos. 10-12 The Commissioner, Mr. Justice Loomba, a retired Judge of the High Court of Allahabad, has pursuant to this Court's order, submitted his Report dated February 15, 1996. In paragraph 3 of the Report he identifies the points on which the Report was required and then proceeds to indicate the actual physical con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplex and underground parking with the ostensible purpose of decongesting the area. It is not that the encroachers would be removed from the area as the underground shops were not allotted to any one of them. They would nevertheless remain at the places occupied by them. Challenge to the action of Mahapalika in allowing construction was on the grounds: - 1. It was against the public purpose to construct an underground market in the garb of the decongesting area of the encroachers to destroy a park of historical importance and of environmental necessity. It would be in breach of Articles 21, 49, 51-A(g) of the Constitution as the existing park which is the only open space in the busiest commercial area in the heart of the city of Lucknow can be destroyed and the citizens particularly the residents of the area would be deprived of the quality of life to which they are entitled under the law and to maintain ecology of the area. 2. It is in violation of the statutory provisions as contained in the U.P. Nagar Mahapalika Adhiniyam, 1959 (now called Uttar Pradesh Municipal Corporation Adhiniyam, 1959 - by Amending Act 12 of 1994) (for short the Act), U.P. Regulation of Buildings Ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us though Mahapalika earlier supported the builder as noted above and also filed appeals against the impugned judgment but subsequently it reversed its stand, withdrew its appeals and filed an affidavit supporting the impugned judgment of the High Court. The State Government and the LDA also filed their affidavits supporting the judgment of the High Court with full vigour though as seen earlier before the High Court they were just mute spectators. We may also note that in reply to the applications IA Nos. 10 and 11 in this Court the Mahapalika lent its support to the builder. This action of the Mahapalika changing its stand midstream was subjected to severe criticism by the appellant and it was stated that there was estoppel by deed in the case and Mahapalika could not go back on its earlier stand. The impugned judgment has been challenged by the builder on the following grounds: - a) There was no disposal of the property by Mahapalika in favour of the builder and therefore provisions of Section 128 of the Act were inapplicable. Even assuming it was so, provisions of Sections 129 and 132 of the Act stood complied. b) There was no arbitrariness or unreasonableness vitiati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter II provides for constitution of various committees and Chapter III for proceedings of the Mahapalika, Executive Committee, Development Committee and other Committees. In view of the applicability of the Development Act, 1973, the Executive Committee of Mahapalika has ceased to be in operation to that extent. Under Section 91 falling in this Chapter, a list of the business to be transacted at every meeting except an adjourned meeting, shall be sent to each member of the Mahapalika or of other Committees at least ninety-six hours in the case of a meeting of the Corporation before the date fixed for the meeting and seventy two hours in the case of a meeting of any such Committee and no business, except as provided in sub- section (2), shall be brought or transacted at any meeting other than a business of which notice has been given . Sub-section (2) is as under: - (2) Any member of the Corporation or of a Committee referred to in sub- section (1), as the case may be, may send or deliver to the Mukhya Nagar Adhikari notice of any resolution with a copy thereof proposed to be moved by him at any meeting of which notice has been sent under sub-section (1). The notice shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation can only be to the Executive Committee or to the Mukhya Nagar Adhikari and to no other person or authority or Committee. Sections 421, 422 and 423 of the Act were referred to contend that it is only for the Mahapalika itself to establish private markets. These sections fall in Chapter XVI dealing with regulation of markets, slaughter-houses, certain trades and acts, etc. Chapter VI of the Act deals with property and contracts. Under Section 125 falling in this Chapter, Mahapalika has power to acquire, hold and dispose of property or any interest therein whether within or without the limits of the city. Under sub-section (3) of Section 125 any immovable property which may be transferred to the Corporation by the Government shall be held by it, subject to such conditions including resumption by the Government on the occurrence of a specified contingency and shall apply to such purpose as the Government may impose or specify while making the transfer. Section 128 deals with power of the Mahapalika to dispose of the property. As to what are the provisions governing disposal of property these are mentioned in Section 129. Sections 128 and 129, in relevant part, are as under: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the Corporation shall have power to enter into contracts which may be necessary or expedient under or for any purposes of this Act. 132. Certain provisions relating to the execution of the contracts. (1) All contracts referred to in Section 131 including contracts relating to the acquisition and disposal of immovable property or any interest therein made in connection with the affairs of the Corporation under this Act, shall be expressed to be made, for and on behalf of the Corporation, and all such contracts and all assurances of property made in exercise of that power shall be executed, for and on behalf of the Corporation, by the Mukhya Nagar Adhikari or by such other officer of the Corporation as may be authorised in writing by the Mukhya Nagar Adhikari either generally or for any particular case or class of cases. (2) ............ (3) ............ (4) No contract involving an expenditure exceeding five lakh rupees shall be made by Mukhya Nagar Adhikari unless it has been sanctioned by the Corporation. 133. Manner of execution. - (1) Every contract entered into by the Mukhya Nagar Adhikari on behalf of the Corporation shall be entered into in such manner an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities and responsibilities of Municipalities etc. It provides, in relevant part, that the legislature of a State may, by law, endow the Committee or the Municipality such powers and authority with respect to performance of functions and the implementation of schemes as may be entrusted to it including those matters listed in the Twelfth Schedule. If we refer to the Twelfth Schedule, Entries 8, 12 and 17 would be relevant and are as under: - 8. Urban forestry, protection of the environment and promotion of ecological aspects. 12. Provision of urban amenities and facilities such as parks, gardens, play-grounds. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. Keeping this aspect in view, the Act was amended and some of the relevant duties of Mahapalika, which are obligatory as given in Section 114, are as under: 114.Obligatory duties of the Corporation.- It shall be incumbent on the Corporation to make reasonable and adequate provision, by any means or measures which it is lawfully competent to it to use or to take, for each of the following matters, namely: - (viii) guarding from pollution water used for human con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority intends to carry out any development of land it shall inform the Vice Chairman in writing of its intention to do so, giving full particulars thereof, including any plans and documents, at least 30 days before undertaking such development; (b) in the case of a department of any State Government or the Central Government, if the Vice-Chairman has no objection it should inform such department of the same within three weeks from the date of receipt by it under clause (a) of the department's intention, and if the Vice Chairman does not make any objection within the said period the department shall be free to carry out the proposed development; (c) where the Vice Chairman raises any objection to the proposed development on the ground that the development is not in conformity with any Master Plan or zonal development plan prepared or intended to be prepared by it, or on any other ground, such department or the local authority, as the case may be, shall - (i) either make necessary modifications in the proposal for development to meet the objections raised by the Vice- Chairman; or (ii) submit the proposals for development together with the objections raised by the Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to affect the utility of the park. As to how the impugned agreement dated November 4, 1993 came to be executed between the Mahapalika and the builder we now consider the proceedings of the Mahapalika, the Executive Committee and its sub- committee called the High Power Committee. On July 6, 1993 notice was issued for meeting of the Mahapalika for July 12, 1993 with following agenda: 1.Discussions on the accepted proposals passed by the Executive Committee on 27.5.1993, and 27.6.1993. 2. Discussions on the various proposals. 3. Other subjects, subject to the permission of Presiding Officer. There were no details regarding agenda item No. 3, which, it is said, pertained to Palika Bazaar, i.e., the underground shopping complex. On that day following resolution constituting the High Power Committee for disposal of the properties of the Mahapalika was passed under aforesaid agenda item No.3:- The full details, maps, conditions of allotment in respect of Shri Rafi Ahmad Kidwai Nagar Yojna and Rajaji Puram Vistar Yojna may be prepared at the earliest. And for this act a committee may be constituted under the chairmanship of the Nagar Pramukh in which two Honble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sd/- Sd/- B.K. Singh yadav Sushil Dubey Sabhasad Member. Mukhya Nagar Adhikari Member. Sd/- G.C. Goyal Architect Sd/-D.K. Doal, Member Member, UP Nagar Adhikari. Sd/- Akhilesh Dass Sd/- Laxmi Narain Nagar Pramukh Sabhasad, Chairman of the Committee Member. In view of the directions of the High Power Committee the matter was placed before the Executive Committee on October 20, 1993 which passed the following resolution: - Resolution No. (85) As per the decision taken in the meeting dated 12.7.1993 of the Mahapalika, Sub- Committee constituted under the Chairmanship of the Honble Nagar Pramukh was entrusted with the powers of developing, leasing and to transfer the immovable property of the Mahapalika. In exercise of these powers, the Sub- Committee, keeping in view the grave problem of encroachment and parking in Aminabad Submitted the proposal of the Honble Members namely Sh. Kalraj Mishra (President Bhartiya Janta Party U.P.) and Shri Ejaj Rijvi, Ex. Minister for the construction of an Air Conditioned Palika Bazar and parking place in the Jandewala park (Aminabad Park) on the pattern of the Delhi Bazar, with a parking place for about 1000 vehicles through M/s. M.I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scious to keep the city hygienically sound free from all adverse effects but the problem of encroachment is no less than a headache for the Lucknow Nagar Mahapalika which has emerged like a growing nightmare and becoming unmanageable by the Lucknow Nagar Mahapalika owing to its limited and scanty resources and flow of supplementary income. The eagerness of Nagar Mahapalika to maintain proper road, construction of new roads with street lighting and the cleanliness derive during monsoon for removing sand and silt from the nallahs is too often inadequately met by the Local Bodies Department of the Government as the Schedule of New Demands for providing requisite funds are not available timely as well as sufficiently. This is one of the major hindrances in keeping the functioning of the Lucknow Nagar Mahapalika at low ebb. WHEREAS, considering the above points M/s. M.I. Builders Private Limited had prepared a viable and constructive proposal keeping in view the interest of Lucknow Nagar Mahapalika in all respects and, the same was submitted to Lucknow Nagar Mahapalika as it dealt exhaustively the benefits that will be oriented after its implementation to the Lucknow Nagar Mahapalika ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised by party no.1 on the terms and conditions which the party no.2 may deem fit and proper and the copy of the agreement shall be given to party no.1 after its execution and the terms of the deed shall be binding upon both the parties of this deed provided the party no.2 executes only that much of agreement which number of shops are available in Palika Bazar and in any case shall not exceed the same but the rent of the shops shall remain the same as mentioned above. 7. That the construction of PALIKA BAZAR shall start within three months from the date of registration of this agreement and, shall be completed within three years from the date of its start. 8. That party no.2 shall have the right to publicise the project and take advances from the buyers and to give them proper allotment receipts. 9. That party no.1 shall co-operate in all manners in the constructional work activities of party no.2 and shall extend all its co-operation and help as and when needed by party no.2 from time to time. 10. That the party no.1 shall be responsible to help and assist party no.2 in completing the project and party no.1 shall also be exclusively responsible for getting the ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Party No. 2 1. Sd/- Drafted by: Sd/- 2. Sd/- (Arvind Razdan) Advocate. Civil Court, Lucknow Mr. Soli Sorabjee, learned counsel for the builder, submitted that the agreement was not against public interest and could not have been revoked by the Mahapalika. He said the petitioners in the writ petitions did not bring forward any contractor who could say that he was more competent than M.I. Builders to execute the job and at a cost less than that to be incurred by M.I. Builders. He said case of the builder was covered by a judgment of this Court in M/s. Kasturi Lal Lakshmi Reddy and others vs. State of Jammu and Kashmir and another (1980 (4) SCC 1). In this case the State of J K awarded a contract to the second respondent for tapping of 10 to 12 lakhs blazes annually for extraction of resin from the inaccessible chir forests in the State for a period of 10 years. This was in accordance with the policy of the State Government and it was agreed upon that a part of resin so extracted would be delivered to the State for running the State-owned industry and the rest would be retained by the second respondent for establishing and running its own factory in the State. The petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it arbitrarily or capriciously or in an unprincipled manner; it has to be exercised for the public good. Every activity of the government has a public element in it and it must therefore, be informed with reason and guided by public interest. Every action taken by the government must be in public interest; the government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid. The Court said that the State of J K, in view of its policy of industrialization, was interested in the setting up of the factory by the second respondents, particularly since the second respondents had two factories for manufacture of resin, turpentine oil and other derivatives and they possessed large experience in the processing of resin and reprocessing of resin, turpentine oil and other derivatives. The Court considered the nature of the contract and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in Aminabad commercial area. In the affidavit dated October 19, 1995 of Mr. T.K. Doval, Upnagar Adhikari which was filed in answer to IAs 10-12/95, complaining breach of this Court's order dated December 14, 1994, again the earlier stand of Mahapalika was re-affirmed. Mr. Sorabjee criticised the action of the Mahapalika in withdrawing its appeals in this Court on February 6, 1997 on mere mentioning in the Court. He said plan, which had been sanctioned by order dated January 23, 1995, was revoked illegally on April 17, 1997 without any notice to the builder. There is, however, resolution of the Mahapalika dated August 6, 1996 filed by Mr. S.K. Gupta, Mukhya Nagar Adhikari of the Mahapalika opposing the present appeals by the builder. Mahapalika took a summersault and gave a complete go- bye to its earlier stand. That there could be estoppel by pleadings reference was made to a decision of this Court in Union of India vs. M/s Indo-Afghan Agencies Ltd. (1968 (2) SCR 366) approving the earlier decision of the Calcutta High Court in The Ganges Manufacturing Co. vs. Sourujmull and others (1880 ILR Calcutta 669 at 678). Mr. Sorabjee said a party could not change its stand even if it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except in due course of and by authority of law: if a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law -- common or statute -- the Courts will be competent to and indeed would be bound to, protect the rights of the aggrieved citizen. It was also held: - We hold that the claim of the respondents is appropriately founded upon the equity which arises in their favour as a result of the representation made on behalf of the Union of India in the Export Promotion Scheme, and the action taken by the respondents acting upon that representation under the belief that the Government would carry out the representation made by it. On the facts proved in this case, no ground has been suggested before the Court for exempting the Government from the equity arising out of the acts done by the exporters to their prejudice relying upon the representation. Mr. Sorabjee then referred to Section 128 of the Act and to the expression disposal and also to Sections 129(4), 131 and 132 of the Act. According to him there was no disposal of any property and no interest in the land had been transferred by the Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns were raised apprising the project: - a) That the scheme of financing of the project was unconventional and was not one that was, as a matter of policy, open and permissible to a governmental authority. The municipal authority could either have put up the construction itself departmentally or awarded the execution of the whole project to a building contractor. The method of financing and execution of the project are ultra vires the powers of the Municipal authority under the Act. b) That the terms of the agreement with the developer that the latter be at liberty to dispose of the occupancy rights in the commercial complex in such manner and on such terms as it may choose would amount to an impermissible delegation of the statutory functions of the Municipal Council under Section 272 of the Act to the developer. c) That the project, in effect, amounted to and involved the disposal of municipal property by way of a long term lease with rights of sub-letting in favour of the developer violative of Section 92 of the 'Act'. d) That the scheme is arbitrary and unreasonable and is violative of Article 14 of the Constitution. The project is patently one intended to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Lastly, Mr. Sorabjee said that after this Court allowed builder to construct, in upholding the judgment of the High Court, equities would have to be balanced. Of course, it would be different matter if the appeals were to be allowed, he said. Fifty prospective allottees of the shops, who had made payment to M.I. Builders for allotment of shops before High Court granted order of stay, filed an application in this Court seeking permission to intervene in these appeals. We heard Mr. Salve, learned senior counsel, who appeared for them. We record his submissions as under: - 1. It is not in public interest to dismantle the shops if the court ultimately upholds the judgment of the High Court. 2. Advertisement wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld request that the relief be moulded. In Public Law relief can be moulded even where the court found irregularity or illegality to deny relief. That can be done under Article 142 of the Constitution. After all what the High Court has found was that the resolution was not properly considered before passing the same; that requirements of the provisions of Sections 128 and 129 of the Act were not adhered to; and that tenders were not invited in order to favour the builder. 7. It is not the case of the writ petitioners that any extraordinary advantage was conferred on the builder or that funds of the taxpayers have been drained out. If it was a hospital or an industry or a dangerous building it would be imperative that the building be pulled down but here construction is underground made to remove congestion and the only complaint of the petitioners was that it would create more congestion. Therefore, a mere irregularity or even illegality would not result in destroying the construction, particularly, when there is no clear finding of any mala fide by the High Court. It is not that any other builder has been aggrieved by the action of the Mahapalika and had come forward to complai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f statutory contexts, but it is too early to say that it has established itself as a general principle of law in contexts where the enabling Act is silent on the point, though some of the cases on the effect of disregarding statutory time limits point vaguely in this direction. Administrative inconvenience Is administrative inconvenience a proper reason for rebutting the presumption that a decision which violates a statutory provision is unlawful (and therefore that the provision is, in the circumstances not mandatory )? Administrative inconvenience is an accepted criterion in relation to remedies provided by the courts in judicial review. For example, where a series of commercial transactions have been undertaken in reliance upon the impugned decision the court may, in its discretion, fail to quash that decision in view of the administrative chaos that would result from such a remedy. Judicial discretion is employed here to balance fairness to the individual against the general public interest. The task, however, of deciding the force of a statutory provision does not involve judicial discretion. It involves the faithful construction of the objects and purposes of an act of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The New Delhi Municipal Committee [AIR 1962 SC 554]. In this case the question for consideration before this Court was whether the provisions of Section 8 of the Delhi and Ajmer Rent Control Act, 1952 (the Rent Act) applied to the transactions between the appellants and the New Delhi Municipal Committee (the Committee) constituted under the Punjab Municipal Act, 1911. The Committee had constructed a market and allotted the shops and flats by inviting tenders in pursuance to an advertisement. On an application filed under Section 8 of the Rent Act by an allottee, an objection was raised by the Committee that there was no relationship of landlord and tenant between the parties. High Court held that there was no relationship of landlord and tenant between the parties inasmuch as there was no 'letting', there being no properly executed lease. In coming to the conclusion that there was no valid lease between the parties, High Court relied upon the provisions of Section 47 of the Punjab Municipal Act. High Court negatived the contention that the Committee was estopped from questioning the status of the applicants as tenants, having all along admittedly accepted rent from them. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at provisions of Section 47(3) are mandatory and not merely directory. Finally considering the argument that the Committee is estopped by its conduct from challenging the enforceability of the contract this Court said : The answer to the argument is that where a statute makes a specific provision that a body corporate has to act in a particular manner, and in no other, that provision of law being mandatory and not directory, has to be strictly followed. 3. It was the appellant, the builder, who was building the underground shopping complex. It was not undertaking the construction as an agent of the Mahapalika. In this connection reference was made to a decisions of this Court in Akadasi Padhan vs. State of Orissa (1963 (2) Supp. SCR 691 at 722). It was, therefore, mandatory that the building plan be approved by the LDA. In Akadast Padhan vs. State of Orissa (1963 Supp. (2) SCR 691) the State of Orissa acquired a monopoly in the trade of Kendu leaves. Prior to this the petitioner used to carry on extensive trade in the sale of Kendu leaves. He filed a petition under Article 32 of the Constitution complaining restrictions put on his fundamental rights. In the course of dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahapalika, therefore, could only manage the park and could not alienate it or convert it something different from the park. Park was held by the Mahapalika on trust for the citizens of Lucknow. In M.C. Mehta vs. Kamal Nath and others (1997 (1) SCC 388) the case, which is also known as that of 'Span Resorts case', owned by Span Motels Pvt. Ltd., this Court observed, that public trust doctrine, as discussed in the judgment, is a part of the law of land. The Court gave various directions even cancelling the lease granted in favour of the Motel and directing the Motel to pay compensation by way of cost for restitution of the environment and ecology of the area. The judgment was cited to reaffirm the argument for preservation of ecology, which is an important factor in preserving the Jhandewala Park. 6. Section 114 of the Act provides for obligatory duties of the Mahapalika and one such obligatory functions is to maintain public places, parks and to plant trees. This cannot now be done as the park has been dug and construction made underground. By allowing underground construction Mahapalika has deprived itself to its obligatory duties which cannot be permitted. Irrevers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism. Applying these tests, we find it is impossible to hold that the Government of West Bengal did not act with probity in not inviting tenders or in not holding a public auction but negotiating straightway at arms length with the Taj Group of Hotels. This Court also found that on the commercial and financial aspect of the lease even on a prima facie view, there appears to be nothing wrong or objectionable in the 'net sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is unjust, unreasonable and irrational. 11. Builder had already collected ₹ 25,000/- from each of the prospective allottees at the time of registration when it was originally planned to construct 500 shops. There were no building plan in existence. Collecting of this amount by the builder is of no consequence in deciding the present appeals. It is now stated that 263 shops had been constructed though the builder collected earnest money for 500 shops. In spite of the judgment of the High Court the builder did not care to refund the earnest money so collected. Its conduct does not entitle it to any consideration. No proper study was undertaken before the Mahapalika granted its approval for construction of the underground shopping complex. There were no building plans when the agreement was entered into. 12. Narrow consideration that a few crores of rupees have been spent on the construction cannot come into consideration when the construction is in clear violation of the Act, the Development Act and Article 21 of the Constitution. That crores of rupees have been spent is an argument which is advanced in every other case of unauthorised construction. 13. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied localities without proper sanction but since the third respondent had spent a large sum of money it did not quash the impeached resolution of the Municipal Committee. The appellant contended before this Court that the Town Planning Scheme forbade in cinema building at the place asked for and, therefore, the resolution of the Municipal Committee was invalid. This Court observed as under: - An illegal construction of a cinema building materially affects the right to or enjoyment of the property by persons residing in the residential area. The Municipal Authorities owe a duty and obligation under the statute to see that the residential area is not spoilt by unauthorised construction. The scheme is for the benefit of the residents of the locality. The Municipality acts in aid of the schemed. The rights of the residents in the area are invaded by an illegal construction of a cinema building. It has to be remembered that a scheme in a residential area means planned orderliness in accordance with the requirements of the residents. If the scheme is nullified by arbitrary acts in excess and derogation of the powers of the Municipality the courts will quash orders passed by Municipa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Samaj Sabha should be pulled down and it must be brought back to the condition in which it existed prior to allotment. The Municipality is directed to pull down the construction within four weeks from today. They should place the report on the file of the Registry of the action taken in the matter. In Pleasant Stay Hotel and another etc. etc. vs. Palani Hills Conservation Council and others (1995 (6) SCC 127) the question was whether the impugned Government Orders were lawfully and validly made and, if so, whether they could regularise the unauthorized construction. High Court quashed the impugned Government orders and issued certain directions. This Court observed as under and then referred the matter to the High Court for certain clarifications: - In our considered opinion the most eloquent and patent fact that must tilt the scale in this dispute in favour of the Council is that the Hotel has admittedly made a residential construction of seven floors even though their sanctioned plan was only for two floors. That necessarily means that five floors of the building have been constructed illegally and unauthorisedly. It is not surprising therefore that the entire endeavou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, regulations and by-laws are made by the Corporations or development authorities taking in view the larger public interest of the society and it is the bounden duty of the citizens to obey and follow such rules which are made for their own benefits. In Dr. G.N. Khajuria and others vs. Delhi Development Authority and others (1995 (5) SCC 762), appellants were some of the residents of Sarita Vihar colony, developed by the Delhi Development Authority (DDA). It was contended that the DDA permitted a nursery school to be opened in a certain park in complete violation of the provisions of the Delhi Development Act, 1957. After considering the provisions of the Delhi Development Act Master and Zonal Development Plans this Court said that the site at which the school was allowed to be opened was a park. It further held that it was not open to the DDA to carve out any space meant for park for a nursery school. This Court said that the allotment for opening the nursery school was misuse of power and it cancelled the allotment. This Court observed that the construction put up by the allottee, even though permanent, was of no relevance as the same has been done on a plot of land allott ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial leave to appeal to this Court was also dismissed. The question before this Court was whether the appellants, who had purchased the flats without the builder informing them of the illegal construction, should be compensated for the loss suffered by them. High Court in the impugned judgment directed the return of the amount plus the escalation charges. All this was on a suit brought by the appellants. This Court noticed that the escalated price as on the date was around ₹ 1.5 crores per flat. Taking into consideration the totality of the circumstances this Court directed the builder to pay ₹ 60 lacs including the amount paid by the allottees. In an unreported decision of this Court in Ram Awatar Agarwal ors. Vs. The Corporation of Calcutta ors. [C.A. No. 6416 of 1981] decided on August 20, 1996, an unauthorised construction in the city of Calcutta was allowed to be demolished by the Corporation of Calcutta. It was a multistory building. The Court observed as under:- We share the feeling of the Deputy City Architect when he states in paragraph 18 of his affidavit that this is a case in which an unscrupulous builder took advantage of the courts order upto a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition, is it feasible to use the existing structures for parking of vehicles and for putting up other amenities? 11. What are the existing general conditions of the locality and the area around the park? It is not necessary to examine the report of the Local Commissioner in detail except to note that : 1. extent of work carried out is approximately 80% of the civil and structural work, about 30% of the finishing work and 20% of the services support work; 2. it is a First Class permanent construction; 3. cost of construction of the work so far executed is approximately ₹ 3.52 crore and the cost of work still to be done is approximately 2.97 crore; 4. dismantling of the construction so far made and restoration of the park would cost ₹ 98,10,181/- less ₹ 22,19,550/- salvage value; 5. though there is a letter of approval of confirmation having been given, there are no sanctioned drawings (Chief Architect of the Mahapalika said that sanctioned drawings were missing from his files). 6. Lucknow Development Authority (LDA) did not play any role in sanctioning the project except the Layout Plan. (Layout Plan was forwarded to the LDA by the Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be planted and rather while making underground construction many trees have been cut. Now it is more like a terrace park. Qualitatively it may still be a park but it is certainly a park of different nature. By construction of underground shopping complex irreversible changes have been made. It was submitted that the park was acquired by the State Government in the year 1913 and was given to the Mahapalika for its management. This has not been controverted. Under Section 114 of the Act it is the obligatory duty of the Mahapalika to maintain public places, parks and plant trees. By allowing underground construction Mahapalika has deprived itself of its obligatory duties to maintain the park which cannot be permitted. But then one of the obligatory functions of the Mahapalika under Section 114 is also to construct and maintain parking lots. To that extent some area of the park could be used for the purpose of constructing underground parking lot. But that can only be done after proper study has been made of the locality, including density of the population living in the area, the floating population and other certain relevant considerations. This study was never done. Mahapalika is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for the free use of the general public, a court will look with considerable skepticism upon any governmental conduct which is calculated either to reallocate the resource to more restricted uses or to subject public uses to the self-interest of private parties. This public trust doctrine in our country, it would appear, has grown from Article 21 of the Constitution. Thus by allowing construction of underground shopping complex in the park Mahapalika has violated not only Section 114 of the Act but also the public trust doctrine. If we now refer to the provisions of law relating to notice of meetings and business of the Mahapalika and its committees it is apparent that these provisions were not adhered to. There is no authority with the Mahapalika to constitute High Power Committee and to delegate its functions to that High Power Committee. There was no agenda at any time in any of the meetings of the Mahapalika for consideration of the underground shopping complex. There were no proposals, no documents, no plan, no study, no project report or feasibility report on the basis of which Mahapalika could have given a green signal for construction of the underground shopping com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be accommodated on the flats to be constructed on the additional land in Phase-II construction. Respondent No.3 who was one of the original members of the society challenged the decision of the general meeting. One of the contention raised was that decision of the general body which relegated her and other such members to Phase-II was not on the agenda. This Court said a general body can always with the approval of the house in the meeting of its members take up any other matter not covered by the agenda on that account, no illegality could be held. This Court also observed that Section 28 of the Delhi Co-operative Societies Act, 1972 vests final authority in the general body of a cooperative society. It has wide powers including residuary power except those not delegated to any other authority under the Act, the rules and its bye-laws. In other words, its power, if any, is only restricted by the Act, the rules, the bye-laws and any order having force of law. This decision is of no help to the appellant as in the present case we are considering the statutory provisions for holding of the meetings of the Mahapalika and the Executive Committee which have been violated. Agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular manner and in no other, that provision of law being mandatory and not directory has to be strictly followed. This principle will apply both as regards holding of meeting of the Mahapalika and execution of contract on its behalf. This judgment is also authority for the preposition that there is no estoppel against a statute. We may now examine some of the terms of the agreement dated November 4, 1993. There are six recitals to the agreements which cannot be co-related to any discussion in any of the meetings of the Mahapalika, the Executive Committee or the High Power Committee. Under clause (2) of the agreement it is for the builder to make construction at its own cost and then to realise the cost with profit not exceeding more than 10% of the investment in respect of each shop. Nobody knows how much cost the builder is likely to incur and how long it will continue to be in possession of the shopping complex. Full freedom has been given to the builder to lease out the shops as per its own terms and conditions to persons of its choice on behalf of the Mahapalika and Mahapalika shall be bound by these terms and conditions. Builder has also been given the right to sign the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to opposite conclusions on the same set of facts without forfeiting their title to be regarded as reasonable . The following passage from the treatise would be relevant:- This is not therefore the standard of the man on the Clapham omnibus. It is the standard indicated by a true construction of the Act which distinguishes between what the statutory authority may or may not be authorised to do. It distinguishes between proper use and improper abuse of power. It is often expressed by saying that the decision is unlawful if it is one to which no reasonable authority could have come. This is the essence of what is now commonly called 'Wednesbury unreasonableness, after the now famous case in which Lord Greene MR expounded it as follows. It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word unreasonable in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided could have arrived at it (Lord Diplock). It might seem from such language that the deliberate decisions of ministers and other responsible public authorities could almost never be found wanting. But, as may be seen in the following pages, there are abundant instances of legally unreasonable decisions and actions at all levels. This is not because ministers and public authorities take leave of their senses, but because the courts in deciding cases tend to lower the threshold of unreasonableness to fit their more exacting ideas of administrative good behaviour. When we keep in view the principles laid by this Court in its various judgments and which we have noticed above, it has to be held that the agreement dated November 4, 1993 is not a valid one. The agreement defies logic. It is outrageous. It crosses all limits of rationality. Mahapalika has certainly acted in fatuous manner in entering into such an agreement. It is a case where the High Court rightly interfered in exercise of its powers of judicial review keeping in view the principles laid by this Court in Tata Cellular vs. Union of India (1994 (6) SCC 651). Every decision of the authority except the judicial deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds that the sovereign Legislature has not been obeyed and powers have been assumed which the Legislature never conferred upon the executive. It cannot be said that the construction of the underground shopping complex is by the builder as an agent of the Mahapalika. Concept of agency is totally missing in the present case. Rather the deal is from principal to principal. Reference may be made to the decision of this Court in Akadasi Padhans case [1963 Supp.(2) SCR 691] quoted above. When the development is by the builder provisions of Section 14 of the Development Act would apply. There is no sanction of the building plan of the underground shopping complex by the LDA. Construction is, therefore, per se illegal. Even after the interim order of this Court allowing construction, plans were not got sanctioned from the LDA, which would be authority under the Development Act. Sanction of the building plan by the Mahapalika would, therefore, be meaningless. Even then, there were no sanctioned drawings. It has been pointed out that process of sanction appeared to be ad hoc and skeletal. When construction started LDA issued a show cause notice to the Mahapalika but then in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the area. The reason for the construction of underground shopping complex given was that it would remove the congestion in the area. We have report of the Local Commissioner, which says that it would rather lead to more congestion. We think Mr. Dave is right in his submission that a decision to construct underground shopping complex by M.I. Builders had already been taken and that the whole process was gone into to confer undue benefit to M.I. Builders and the bogie of congestion was introduced to justify the action of the Mahapalika. It is wholly illegal and smacks of arbitrariness, unreasonableness and irrationality. We may also note the argument of Mr. Adarsh Goel who said that Jhandewala Park was acquired by the State in the year 1913 and was given to Mahapalika for its management. He said under Section 41 of the Development Act read with Section 5 of the U.P. Regulation of Building Operations Act a Government order was issued on August 18, 1986 by the State Government whereby the use of park for any other use was prohibited. This direction of the State Government was incorporated in the Master Plan for the city of Lucknow and of course violated by allowing construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a bar. The licence, if it was a licence, was to construct the building and hand it over to the respondent company as trust property. There was no licence to create another kind of trust which the appellant has sought to create. It cannot be said therefore that there was an irrevocable license which falls under s. 60(b) of the Act. Even such a license is deemed to be revoked under s. 62(f) of that Act where the licence is granted for a specific purpose and the purpose is attained or abandoned or becomes impracticable. In the present case the purpose for which the license was granted has either been abandoned or has become impracticable because of the action of the appellant. [The Indian Easement Act, 1882: Sections 52, 53, 60(b0 and 62(f) :- 52. Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license. 53. A license may be granted by any one in the circumstances and to the extent in and to which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.I. Builders to earn huge profits. In depriving the citizens of Lucknow of their amenity of an old historical park in the congested area on the spacious plea of decongesting the area Mahapalika and its officers forgot their duty towards the citizens and acted in a most brazen manner. Proposition of construction of underground shopping complex was so lucrative and the land so valuable that Mahapalika itself could have done it by collecting earnest money from the prospective allottees. But then nobody cared to examine this aspect and a plea was also advanced that Mahapalika had no finance to undertake the project. If one refers to the agreement the builder itself devised a self- financing scheme and it had not to spend anything from its own pocket. On mere booking of the shops builder could collect rupees one crore twenty five lakhs and would have collected more money with the progress of the construction at various stages. A public body would not sequester away its property by devising new methods. Thus there are two distinct areas of challenge in the present case - (1) the agreement is fraud on power, prime land has been given for a song by the Mahapalika. The fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest has certainly been given a go bye. There was some undercurrent flowing to award the contract to M.I. Builders. High Court said lest we are taken amiss we wish to make it clear that we do not doubt either the bona fides of the authorities or the competence of the respondents M/s. M.I. Builders to enter into the impugned agreement but we are of the view ... The competence of M/s. M.I. Builders to undertake the project is not doubted when now it is seen that proper construction has been made but before taking decision to award the contract to it nobody knew its credentials. No attempt made whatsoever to consider if there was any other person more competent for the job or if of equal competence could offer better terms. In these circumstances, dictum contained in the case of Kasturi Lal Lakshmi Reddy vs. State of J K [(1980) 4 SCC 1] becomes inapplicable. No advantage can be drawn by the builder from the decision of this Court in G.B. Mahajans case [(1991) 3 SCC 91] as here the whole process of awarding contract to M.I. Builders has been gone through in an unabashed manner and in flagrant violation of law with the sole purpose of conferring benefit on it. All said and done w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apalika and the State Government were favouring the builder. As a matter of fact Mahapalika itself filed appeals against the impugned judgment of the High Court. Perhaps that gave hope to the builder to go ahead with the construction and to take the risk of getting the construction demolished and restoring the park to its original condition at its own cost. The builder did not foresee the change in stand not only of the Mahapalika but also of the State Government. It also, as it would appear, over-rated its capacity to manage with the State Government to change the land use of the park. Builder is not an innocent player in this murky deal when it was able to get the resolutions of the Mahapalika in its favour and the impugned agreement executed. Now, construction of shops will bring in more congestion and with that the area will get more polluted. Any commercial activity now in this unauthorised construction will put additional burden on the locality. Primary concern of the Court is to eliminate the negative impact the underground shopping complex will have on environment conditions in the area and the congestion that will aggravate on account of increased traffic and people visiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court has directed demolition of unauthorised constructions. This does not appear to have any salutary effect in cases of unauthorised construction coming to this Court. While directing demolition of unauthorised construction, court should also direct inquiry as to how the unauthorised construction came about and to bring the offenders to book. It is not enough to direct demolition of unauthorised construction, where there is clear defiance of law. In the present case, but for the observation of the High Court, we would certainly have directed an inquiry to be made as to how the project was conceived and how the agreement dated November 4, 1993 came to be executed. We direct as under : 1. Block 1, 2 and 4 of the underground shopping complex shall be dismantled and demolished and on these places park shall be restored to its original shape. 2. In Block 3 partition walls and if necessary columns in the upper basement shall be removed and this upper basement shall be converted into parking lot. Flooring should be laid at the lower basement level built to be used as parking lot. Ramp shall be constructed adjacent to Block 3 to go to upper and lower basement levels for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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