TMI Blog2018 (10) TMI 1647X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government. Imparting basic education is a constitutional obligation on the State as well as societies running educational institutions. Children are the future of our nation. Education is a basic tool for individuals to lead an economically productive life and is one of the most vital elements for the preservation of the democratic system of government. The Constitution of India bestows considerable attention to the field of education. It recognizes the need for regulating the various facets of activity of education and also the need for not only establishing and administering educational institutions but also providing financial support for educational institutions run by private societies. There is no reason to reject the contention of the State Government that the allotment of 4 Kanals of land to the Appellant was in the nature of an exchange, inasmuch as the State Government wanted to evict the Appellant who was running a school at Wakf land situated in the main city area. Such a decision seems to have been taken by the State Government to avoid any unrest in the locality or city. In such circumstances, there is no arbitrariness in the decision taken by the State in al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. For the Appellant : Vikas Singh, Sr. Adv., Bimal Roy Jad and Shreya Handoo, Advs. For theRespondents : M. Shoeb Alam, Ujjwal Singh and Mojahid Karim Khan, Advs. JUDGMENT Mohan M. Shantanagoudar, J. 1. The judgment of the Division Bench of the High Court of Jammu and Kashmir at Jammu in L.P.A. (OW) No. 38/2008 and L.P.A. (OW) No. 39/2008 dated 01.04.2009 is the subject matter of these appeals. 2. The brief facts leading to these appeals are that the Appellant-J.S. Luthra Academy (hereinafter referred to as the 'Academy'), an educational institution, initially was situated on a Wakf property in Jammu. Vide order dated 27.12.1995 of the authority constituted under the J K Wakf Act, 1978, the said educational institution was ordered to be evicted from the Wakf property. Against the said order, the Academy approached the Jammu Kashmir Special Tribunal, and an interim order of stay on eviction was granted by the tribunal on 09.01.1996. During the interregnum, the Academy made representations to the State Government requesting for allotment of a piece of land at any place mentioned in the representations for shifting and running the school. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el. Both the writ petitions were clubbed, heard and decided together by the learned Single Judge of the High Court and were dismissed. However, the Division Bench by the impugned judgment set aside the order of the Single Judge and allowed the writ petitions and consequently quashed the allotment made in favour of the Academy with the following observations: The board is directed to hold public auction of the land for the purpose of leasing the same out on the same terms and conditions it had leased it to the private Respondent, except that the premium thereof shall be fixed at the highest price to be obtained at such auction to be held by inviting people interested in setting up of a secondary school on the plot of land in question by publishing at least two advertisements in newspapers widely circulated in Jammu and also published therefrom. The Board is directed to fix the minimum bid price at ₹ 16.00 lacs plus the cost of construction ascertained in the manner as above. In the event the bid to be had at the public auction does not exceed the minimum reserved bid price, the Board shall execute a fresh lease in favour of the private Respondent upon obtaining payment of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, who was running a school on the Wakf land in the main city area. The object was twofold, firstly, to ensure continuity of the school/public purpose, and secondly, to expeditiously evict the Appellant from the wakf land and consequently, free such land from prolonged litigation. He further submitted that neither was there any violation of any policy for allotment of land to educational institutions in the State of Jammu and Kashmir at the relevant time, nor was there any loss caused to the State qua the 2 Kanals of land (out of total 4 Kanals of land) that was allotted to the Appellant. Under such facts and circumstances of the case, he argued that the judgment of this Court in the case of Institute of Law Chandigarh v. Neeraj Sharma, (2015) 1 SCC 720 wherein the allotment of land to an educational institution without inviting competitive bidding was cancelled is distinguishable on two counts: a) At para 32 of the judgment, the Development authority was found not to have adhered to the applicable policy, i.e. the allotment of land to Educational Institutions (Schools), etc. on lease hold basis in Chandigarh Scheme, 1996 for allotment of land. b) At Para 17 of the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources Allocation, In Re, Special Reference No. 1 of 2012, (2012) 10 SCC 1. In para 149 thereof, the Court observed as follows: 149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of the Constitution. This decision emphasised that the ultimate goal to be served was that of the public good, and all methods of distribution of natural resources that ultimately served the public good would be valid, as reflected in the following observations: 120. ...There is no constitutional imperative in the matter of economic policies--Article 14 does not predefine any economic policy as a constitutional mandate. Even the mandate of Article 39(b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), wherein this Court observed at para 110: It is not the domain of the Court to evaluate the advantages of competitive bidding vis-`-vis other methods of distribution/disposal of natural resources. However, if the allocation of subject coal blocks is inconsistent with Article 14 of the Constitution and the procedure that has been followed in such allocation is found to be unfair, unreasonable, discriminatory, non-transparent, capricious or suffers from favouritism or nepotism and violative of the mandate of Article 14 of the Constitution, the consequences of such unconstitutional or illegal allocation must follow. In Ajar Enterprises (P) Ltd. v. Satyanarayan Somani, (2018) 12 SCC 756, this Court affirmed the above principles in the following terms: 49. ...Where a public authority exercises an executive prerogative, it must nonetheless act in a manner which would subserve public interest and facilitate the distribution of scarce natural resources in a manner that would achieve public good. Where a public authority implements a policy, which is backed by a constitutionally recognised social purpose intended to achieve the welfare of the community, the considerations w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood as per Article 39(b), and must not be violative of Article 14. This does not necessarily entail auction of the resource; however, allocation of natural resources to private persons for commercial exploitation solely for private benefit, with no social or welfare purpose, attracts higher judicial scrutiny and may be held to be violative of Article 14 if done by non-competitive and non-revenue maximizing means. Keeping in mind the aforementioned principles formulated by this Court in the aforementioned judgments, we have considered the entire material on record. It must be determined as to whether the allocation made in favour of the Academy fell foul of the above principles. In the instant case, the allocation has evidently been done to a private educational institution by non-revenue maximizing means. Assuming that the Academy is engaged in commercial activities while engaging in its main activity of imparting education to students, two questions remain to be seen: first, whether there was any social or welfare purpose underlying the allocation, i.e., if the furtherance of the public good was the ultimate goal of the allocation so as to justify the non-auctioning of the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a germane objective being served through the execution of the action, by examining the surrounding facts and circumstances in which the executive action was effected. Though the Appellant is a private educational institution, it cannot be said that the action of the government was not backed by a welfare purpose merely because it is not stated in so many words in the correspondence between the Academy and the State Government that the alternative land sought for allotment was to protect the interests of children studying at the school. This is because the same is clearly discernible from the facts and circumstances of the case. It has been stated that the Appellant was evicted from the wakf land not because of any wilful default or unauthorized use, but because the wakf required the land for its own use. In such circumstances, having no other alternative, the Appellant approached the government for allotment of suitable land for running the school. It seems that the State Government also preferred to peacefully settle the issue of getting the school vacated from the wakf property, at an early date, without disturbing the education of the students and peace in the locality. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evict the Appellant who was running a school at Wakf land situated in the main city area. Such a decision seems to have been taken by the State Government to avoid any unrest in the locality or city. In such circumstances, we do not find any arbitrariness in the decision taken by the State in allotting 4 Kanals of property. On the other hand, we are of the opinion that the action of the State was fair, reasonable, transparent, unbiased, without favouritism and nepotism. 11. We now turn to the second question, regarding the adequacy of compensation recovered by the State. In this respect, we note the following observations made by Khehar J. in his concurring opinion in Natural Resources Allocation, In Re (supra): 200. I would, therefore, conclude by stating that no part of the natural resource can be dissipated as a matter of largesse, charity, donation or endowment, for private exploitation. Each bit of natural resource expended must bring back a reciprocal consideration. The consideration may be in the nature of earning revenue or may be to best subserve the common good . It may well be the amalgam of the two. There cannot be a dissipation of material resources free of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... schools are being run on totally commercial lines. Huge amounts are being charged by way of donations and fees. The question is whether there is any justification for allotting land at throw-away prices to such institutions. The allotment of land belonging to the people at practically no price is meant for serving the public interest, i.e., spread of education or other charitable purposes; it is not meant to enable the allottees to make money or profiteer with the aid of public property. We are sure that the Government would take necessary measures in this behalf in the light of the observations contained herein. The aforementioned observations suggest that while in the case of a non profit-oriented educational institution serving the public interest, public property can be allotted to it at a concessional price or for free by imposing stringent conditions for the use of the land, it is questionable whether the same can be done for profit-oriented institutions. 13. Thus, in our considered opinion, there is a loss to the public exchequer to the extent of ₹ 16,00,000/- for two kanals as on the date of allotment. However, having regard to the fact that the Appellant-Academ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer with appropriate interest. If some other relief can be granted on grounds of equity without harming public interest and public exchequer, grant of such equitable relief should also be considered. 14. On an examination of the facts and circumstances of the case in the light of the above observations, it is evident that it is appropriate to give the Appellant the opportunity to make good the shortfall in consideration, as the loss to the public exchequer caused by the free allocation cannot be said to have had an everlasting effect or impact on public interest. Moreover, we do not find any high-handedness on the part of the Appellant in seeking the allotment in its favour, as it acted in a bona fide manner. This would also be in consonance with the principle stated by us in the beginning of the judgment that the public must be adequately compensated for the alienation of natural resources by the State. 15. Therefore, the Appellant should pay consideration for two kanals of land received gratuitously, at the rate of ₹ 8,00,000/- per kanal, which was the average auction price prevailing at the time of allocation. The Appellant is also liable to pay interest at ..... 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