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2015 (11) TMI 1718 - SC - Indian LawsMortgage decree challenged - Held that:- In the present case, the mortgage done by the ABP itself is bad in law. We are of the clear view that this expectation is not valid at all in the eye of law. Moreover, this Court in number of decisions has held clearly that doctrine of legitimate expectation cannot be invoked by someone who has no dealing or transaction or negotiations with an authority or by someone who has a recognized legal relationship with the authority. Therefore, as the Bank is not having any recognized legal relationship with the State in view of the fact that the mortgage by the ABP in favour of the Bank itself is bad in law, there is no question of invoking doctrine of legitimate expectation in the present case as it applies to a regular, consistent predictable and certain conduct, process or activity of the decision-making authority. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid, cannot be a legitimate expectation. The doctrine of legitimate expectation ordinarily would not have any application when the legislature has enacted a statute. The legitimate expectation should be legitimate, reasonable and valid. For the application of doctrine of legitimate expectation, any representation or promise should be made by an authority. A person unconnected with the authority, who had no previous dealing and who has not entered into any transaction or negotiations with the authority cannot invoke the doctrine of legitimate expectation. A person, who bases his claim on the doctrine of legitimate expectation has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment. The High Court after having recorded a finding that the Bank being the nominee of the mortgagee has a right to make an application for conversion of Nazul land into a freehold land, without appreciating the fact that the Bank has not having any subsistence interest in the leasehold property obtained a mortgage decree behind the back of the State being the paramount title holder applied the doctrine of legitimate expectation. In the instant case, admittedly, the State never recognized the Appellant Bank as a mortgagee. Further the State was not aware about the alleged mortgage said to have been created by the lessee ABP Company by deposit of Lease document. Moreover, the State never represented or promised either to the lessee or to the Bank to give any benefit under the lease. In such circumstances, we are of the definite opinion that the High Court has committed grave error in applying the doctrine of legitimate expectation in favour of the bank.
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