TMI Blog2010 (3) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of SLP(C) No.2786 of 2006], Civil Appeal No. 2230 of 2010 [Arising out of SLP(C) No.3874 of 2006], Civil Appeal No. 2231 of 2010 [Arising out of SLP(C) No.4761 of 2006], Civil Appeal No.2232 of 2010 [Arising out of SLP(C) No.14133 of 2006], Civil Appeal No. 2233 of 2010 [Arising out of SLP(C) No.15967 of 2006], Civil Appeal No. 2234 of 2010 [Arising out of SLP(C) No.13609 of 2007] 1. Leave granted. 2. Whether the appellants in these appeals except the appeal arising out of SLP(C) No. 14133/2006 are entitled to allotment of residential plots in Phases VIII-A and VIII-B, Mohali, Punjab developed by the Punjab Small Industries and Export Corporation Ltd. (for short, `the Corporation') and whether the State Government's refusal to sanction change of land use from industrial to residential is vitiated by arbitrariness and malafides are the questions which arise for determination in these appeals filed against orders dated 23.9.2005 and 28.7.2006 passed by the Division Bench of the Punjab and Haryana High Court. 3. The Corporation is a government company within the meaning of Section 617 of the Companies Act, 1956. It was created for developing infrastructure necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees employed in the units under production and set up in respective area. The reservation for different categories for allotment of residential plots will be followed as under: a) Scheduled caste 10% b) Backward Class 5% c) Ex-Service men/war widows 5% d) Non resident Indian 5% If the number of eligible application are less than those of available plots under the specified reserve category(s). The unallotted plots, thereof, will be transferred for allotment under General Category. 5. Thereafter, the Corporation advertised 138 freehold plots in focal point, Mohali and allotted the same to those who were declared successful in the draw held on 8.10.2002. 6. Some of the industrial entrepreneurs to whom large plots were allotted in focal point, Mohali could not fully utilize the same and surrendered the surplus land. In Phase VIII-B, the demand for industrial plots was less than what was anticipated by the Corporation. The issue relating to dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ockets, total percentage of residential area in Phase-VIII B comes to about 17% which is well within percentage approved by the Govt. 3. About 43 acres land surrendered by M/s. Ranbaxy in Phase-VIII A, Mohali. It was explained by the STP, PSIEC that plots of 2 categories i.e. one kanal and 16 marla have been planned in this pocket. Besides this, a small commercial area to cater to the needs of the residential population as well as Indl. Area on V-4 road and a site measuring 3.75 acres has also been planned for School. It was observed by the Committee that the service lane along 100 ft. sector road dividing Sector 75 (VIII-A) and Sector 76 may be provided and plots of one kanal categories may be opened on the service land. Secondly, site for School may not be provided as PUDA has made ample provision of School sites in the adjoining sectors developed by PUDA. Instead plots of one kanal size may be planned in this pocket. Lay out plan was approved after making suitable modifications as proposed above. It was pointed out by Sh. Rajinder Sharma, STP o/o Chief Town Planner, Punjab that as per Punjab Regional and Town Planning and Development Act 1995, permission for change of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l plots. There may not be any concession in price for sick units. However, payment schedule may be relaxed in case of sick units. It was recommended that Industrial Policy may be got amended by the Department at appropriate level to incorporate above provisions in the Policy. (ii) Availability of Industrial land in Mohali Position indicated in the background note was perused. It was felt that in view of limited availability of land with PSIEC, the available land should be utilized for setting up of industrial units/industrial parks which can generate more revenue and employment for the State instead of housing activity which will neither generate employment nor revenue for the State exchequer. The financial needs of PSIEC can be met by allotting the land for industrial parks/Multiplex complexes which will generate greater revenue in view of higher allotment price for such land as indicated at (i) above. It was, therefore, recommended that no allotment may be made by PSIEC for housing purposes. (emphasis supplied) The Allotment Committee then considered regular agenda items and took the following decisions: Item No. 21.1 Confirmation of Minutes of 20th meeting of Allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land into residential use in Mohali, by Punjab Small Industries Export Corporation has been considered by the Government. It has been decided that in the overall interest of the State, it would not be desirable to change the land use from industrial to residential. The Corporation should, therefore, immediately withdraw the scheme for allotment of residential plots and refund the application money of the applicants so that there are no legal complications. Sd/- 9. About two months prior to consideration of the issue relating to disposal of surplus land by Plan Approval Committee of the Corporation, an advertisement was issued, which was published in `The Tribune' dated 20.10.2003 inviting applications for 280 residential plots in Phases VIII-A and VIII-B, focal point, Mohali under the Industrial Housing Scheme. In the application form issued by the Corporation, the following stipulation was incorporated: The acceptance of application form and earnest money does not place the corporation under any obligation to allot you a plot. 10. About 3500 persons including those who filed writ petitions before the High Court applied for allotment of residential plots in Moh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Memo dated 5.8.2004. The writ petitioners invoked the doctrines of promissory estoppel and legitimate expectation and pleaded that on being declared successful in the draw of lots, they have acquired a right to be allotted plots in focal point, Mohali and the Corporation is bound to fulfill the promise made by issuing advertisement dated 20.10.2003. They pleaded that the State Government does not have the power to direct the Corporation to abandon the policy of allotting residential plots in the industrial focal points and the decision contained in Memo dated 5.8.2004 is vitiated due to malafides because the same was designed to favour some individuals who wanted to utilize the land for commercial purpose by building multiplex complexes. They further pleaded that the Corporation's failure to issue allotment letters has resulted in discrimination and violation of their fundamental right to equality guaranteed under Article 14 of the Constitution. In the written statements filed on behalf of the State Government and the Corporation, it was pleaded that the decision contained in Memo dated 5.8.2004 was in consonance with policy of the State Government to promote industrialization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of this Court? 13. The Division Bench of the High Court first considered whether the writ petitioners were entitled to invoke the doctrines of legitimate expectation and promissory estoppel, referred to the judgments of this Court in Food Corporation of India v. M/s. Kamdhenu Cattle Feed Industries (1993) 1 SCC 71, Union of India v. Hindustan Development Corporation and others (1993) 1 SCC 499, National Building Construction Corporation v. S. Raghunathan (1998) 7 SCC 66, Pawan Alloys and Casting Private Limited v. U.P. State Electricity Board and others (1997) 7 SCC 251, Kasinka Trading and another v. Union of India and another (1995) 1 SCC 274 and held that even though the State Government and the Corporation, which is an instrumentality of the State, are expected to act fairly and reasonably in their dealing with the members of public, mere inviting of applications and draw of lots by the Corporation did not create a right in favour of the writ petitioners and they cannot invoke the doctrines of legitimate expectation and promissory estoppel for compelling the Corporation to allot plots to them in Phases VIII-A and VIII-B, focal point, Mohali because in the format of applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing for the writ petitioners-appellants extensively referred to the pleadings of the parties and documents produced by them and argued that the High Court committed an error by declining to invoke the doctrine of legitimate expectation despite the fact that the policy decision contained in Memo dated 26.12.2001 for earmarking 20-30% area for Industrial Housing was acted upon more than once by carving out residential plots in different focal points and allotting the same to the successful applicants. Learned counsel relied upon the ratio of judgments in Food Corporation of India v. M/s. Kamdhenu Cattle Feed Industries (supra) and Union of India v. Hindustan Development Corporation and others (supra) and argued that refusal of the State Government to approve utilization of some portions of land in focal point, Mohali for carving out residential pockets was wholly arbitrary and the Division Bench was not at all justified in declining relief to the writ petitioners only on the ground that at the time of submitting applications, they knew that the Corporation will not be obliged to allot plots to the successful applicants and that draw of lots was held with a clear indication t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be approved by the competent authority constituted under the 1995 Act and the State Government rightly declined to approve change of land use from industrial to residential because the same would have seriously undermined the object of industrialization of different parts of the State. Learned counsel assailed the quashing of the decision contained in Memo dated 5.8.2004 by arguing that the Division Bench committed serious error in declaring that the said decision is vitiated due to malafides merely because the Allotment Committee had considered the possibility of utilizing land in Phases VIII-A and VIII-B, Mohali for commercial purposes including construction of multiplexes. Learned counsel laid considerable emphasis on the fact that the State Government had not accepted the recommendations made by the Plan Approval Committee of the Corporation or the Allotment Committee and submitted that this, by itself, was indicative of the fact that ultimate decision of the Government was not influenced by any extraneous consideration. Learned counsel lastly argued that the Corporation cannot, on its own, allot land in any focal point for a purpose other than industrial and, in any case, la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the focal point or growth centre will help in accelerating industrialization of the area. This is the reason why the phrase `Industrial Housing' was used in contrast to the term `residential' in Memo dated 26.10.2001. This is also the reason why Plan Approval Committee of the Corporation had, while approving layouts of residential pockets in Phases VIII-A and VIII-B had made it subject to approval of change of land use under the 1995 Act. In its meeting held on 5.2.2004, the Allotment Committee did recommend amendments in Industrial Policy 2003 to facilitate development of industrial parks/estates/agro-parks/I.T. parks and multiplex complexes, but unequivocally opposed the idea of allotment of land for housing purposes. The issue was then considered by the State Government and an unequivocal decision was taken not to allow change of land use from industrial to residential. The record produced before the High Court and the documents produced before this Court do not show that the State Government had sanctioned change of land use in Phases VIII-A and VIII-B, Mohali from industrial to commercial and allowed setting up of multiplex complexes within the focal points or growth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing dubious inferences of malafides or bad faith on the basis of vague and bald allegations or inchoate pleadings. In such cases, wisdom would demand that the Court should insist upon furnishing of some tangible evidence by the petitioner in support of his/her allegations. It must always be remembered that in a democratic polity like ours, the functions of the Government are carried out by different individuals at different levels. The issues and policy matters which are required to be decided by the Government are dealt with by several functionaries some of whom may record notings on the files favouring a particular person or group of persons. Someone may suggest a particular line of action, which may not be conducive to public interest and others may suggest adoption of a different mode in larger public interest. However, the final decision is required to be taken by the designated authority keeping in view the larger public interest. The notings recorded in the files cannot be made basis for recording a finding that the ultimate decision taken by the Government is tainted by malafides or is influenced by extraneous considerations. The Court is duty bound to carefully take note o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State, and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken a similar exercise and allotted 138 freehold plots in focal point, Mohali by inviting applications and holding draw of lots. 23. We are in complete agreement with the Division Bench of the High Court that no promise much less an enforceable promise was made by the Corporation to the prospective applicants that by making an application pursuant to the advertisement and on being declared successful in the draw of lots, they will get residential plots. Rather, being conscious of the fact that in terms of the approval accorded by the State Government vide Memo dated 26.12.2001, it could utilize 20-30% area of the focal point only for Industrial Housing, the Corporation had made it clear to the prospective applicants that there is no certainty of their getting residential plots in Phases VIII-A and VIII-B, Mohali. The decision taken by Plan Approval Committee of the Corporation to approve the layouts of residential pockets in Phases VIII-A and VIII-B, Mohali was not final. The same was subject to sanction of change of land use in accordance with the provisions of the 1995 Act. The Allotment Committee made a clear recommendation against utilization of surplus land for housing pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 25. A contrary view was expressed by another two-Judge Bench in Jit Ram v. State of Haryana (1981) 1 SCC 11, but the law laid down in Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. (supra) was reiterated in Union of India v. Godfrey Philips India Ltd. (1985) 4 SCC 369, which was decided by a three-Judge Bench. Bhagwati, C.J. with whom the other two members of the Bench agreed on the exposition of law relating to the doctrine of promissory estoppel, observed: Of course we must make it clear, and that is also laid down in Motilal Sugar Mills case that there can be no promissory estoppel against the Legislature in the exercise of its legislative functions nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition. It is equally true that promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or, power of the officer of the Government or of the public authority to make. We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield when the equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities cannot be absolved of their liability to provide adequate monetary compensation to the parties who are adversely affected by their erroneous decisions and actions. But in these cases, any directions to the public authorities to pay monetary compensation or damages would also indirectly harm general public interest. The public authorities are entrusted with public fund raised from public money. The funds are in trust with them for utilisation in public interest and strictly for the purposes of the statute under which they are created with specific statutory duties imposed on them. In such a situation when a party or citizen has relied, to his detriment, on an erroneous representation made by public authorities and suffered loss and where the doctrine of estoppel will not be invoked to his aid, directing administrative redressal would be a more appropriate remedy than payment of monetary compensation for the loss caused by non-delivery of the possession of the plots and consequent delay caused in setting up industries by the allottees. 27. The plea of the writ petitioners that they had legitimate expectation of being allotted residential plots in Phases VIII-A and V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant's perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent. 30. In Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and not taken in public interest. But a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. 32. The plea of discrimination raised by the appellants is being mentioned only to be rejected because no similarity has been pointed out between their cases and the cases of those who had applied for allotment of plots in focal point, Patiala and Phase VIII (Jeevan Nagar), Ludhiana except that a common draw was held in furtherance of advertisement dated 23.3.2004. In any case, in view of our interpretation of the policy decision contained in Memo dated 26.12.2001, the allotment made in two other focal points, cannot enure to the appellants' advantage and a mandamus cannot be issued in their favour because that would result in compelling the competent authority to sanction change of land use from industrial to residential in contravention of the policy decision taken by the State Government. 33. In the result, the appeals arising out SLP(C) Nos.1969/2006, 2786/2006, 3874/2006, 4761/2006, 15967/2006 and 13609/2007 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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