ORDER
Shacheendra Dwivedi, J.
1. The petitioner has approached this Court complaining of being arbitrarily and illegally deprived of the allotment of house No. 10 in the town of Morena covered under the Hire-purchase Scheme, for middle-income-group of respondent No. 2, M. P. Housing Board (for short the Board), published in the year 1979, on first-come-first-served basis. The Board aims at providing residential facilities to needy and desirous persons no-profit-no-loss basis.
2. Keeping in view the acute housing problem in the State, M. P. Housing Board has been constituted by the State and it has undertaken the work of construction of dwelling units for people belonging to different income groups. In the year 1979, respondent No. 2, invited applications from persons desirous of taking constructed houses under the scheme requiring individuals to deposit Rs. 3000/- for the registration. In case of Government employees, such requirement as to deposit was reduced to 50% and as such they were required to deposit Rs. 1500/- only.
3. The petitioner being State employee deposited Rs. 1500/- on 24-8-1979, vide Annexure P-2. In the year 1984, the petitioner received the allotment order (Annexure P-3), informing him that house No. 17 has been allotted to him under the Scheme. The petitioner thereon moved the Board that some persons who were not covered under the Scheme, nor so registered have been allotted house Nos. 1 to 4 under special quota. There is no provision of special quota and such quota was neither notified nor was available. It was further submitted by the petitioner to the Board that M.I.G. house No. 10 had not been allotted to anyone and was available for allotment. As such, the petitioner vide Annexure P-4, dated 20-11-1984, requested the Board to allot him house No. 10. But the Board by its letter dated 12-12-1984, Annexure P-5, refused to allot the house No. 10 to the petitioner stating that house No. 10 stood already allotted under President's special quota while house Nos. 7, 8 and 9 were available for allotment only on payment of full price in advance.
4. On the above statement made by the Board, the petitioner got misled. Having applied in the year 1979, the petitioner did not get a house of his choice till 1986, although his name was at serial No. 1 in the priority list. So when subsequently another scheme, known as 'HUDCO Scheme', was published by the Board for Morena in the year 1986, the petitioner applied under that scheme too obviously compelled by the circumstances. He deposited in all an amount of Rs. 22,600/- in instalment on different dates with the Board.
5. Thereafter, it came to be known to the petitioner that in fact house No. 10 had not been allotted to anyone till then and further that steps were being taken to allot the same to one of the individuals of the Board's favour. Therefore petitioner filed this petition and also prayed for the grant of ad interim writ which was allowed on 24-5-1990.
6. In this petition, now the petitioner submits that the action of the Board, refusing to allot house No. 10 to him on false pretext, is illegal, discriminatory and arbitrary. The petitioner has challenged the bona fides of the action. The petitioner claims allotment of house No. 10, now being placed at serial No. 1 of the priority list and the house being available for allotment, by invoking jurisdiction of this Court under Articles 226/227 of the Constitution of India.
7. When in November 1984, the petitioner by Annexure P-4 sought allotment of house No. 10 from the Board, claiming allotment on priority basis, stating that the house was vacant and available as was not allotted to any one, at that time it was very specifically stated by the Board vide Annexure P-5 that :
^^mijksDr fo'k; esa vkidks lwfpr fd;k tkldrk gS fd vkius fnukad 30&11&84 dks i= fn;k Fkk fd vki Hkou ekad 10,e- vkbZ- th-] eqjSuk esa fufeZr dks ysus dh bPNk O;Dr dh gSA Hkou ekad 10v/;{kh; va'k ls vkoaVu fd;k tk pqdk gSA pwafd Hkou ekad 7] 8] 9 esa iw.kZ ewY;ij vkoaVu gsrq lqjf{kr gSA ;fn iw.kZ ewY; ij Hkou pkgrs gSa rks vkidks fd;k tkldrk gSA vki 15 fnol ds vanj :i;s 1]24]906@& :i;k tek djsa vU;Fkk vki Hkouekad 17 dh vko';d jde tek djsaA le;kof/k esa jde tek u djkus dh fLFkfr esaHkou ekad 17 dk Hkh vkoaVu vkns'k fujLr dj fn;k tkosxk foyEc ds fy;s vki Lo;amkjnk;h gksxs**A
The same was the stand taken by the Board in reply to petitioner's application for ad interim writ :
'When the petitioner registered for allotment of house No. 10, the respondent intimated on 12-12-1984, vide Annexure P-5 that house No. 10 belongs to Chairman quota and has already been allotted'.
But thereafter the Board, contrary to its earlier statement, has taken a different stand in para 1 of the return :
'The petitioner in reply was informed that house No. 10 could not be allotted. In fact house No. 10 has been earmarked for residence of Assistant Engineer, M. P. Housing Board, whoever is posted at Morena.'
The above plea is in clear contradiction with the earlier version of the Board. The petitioner has been alleging since the very beginning that the intention of the Board was not clear and clean in this regard. The Board's attempt at allotting the house to someone favourite was mala fide, arbitrary and illegal, unbecoming of a public body which is expected to behave fairly and would consequently deprive the petitioner of his legal right to allotment of house in question.
8. An authority constituted by law, like the M. P. Housing Board is 'State' within the meaning of Article 12 of the Constitution and is duty bound to act in accordance with the rules and regulations framed or adopted by it. If its action smacks of arbitrariness, discrimination and mala fides, it is open to challenge and subject to judicial review by this Court under Article 226 of the Constitution of India.
9. The contention of the respondent that the subsequent act of the petitioner in applying for a house under HUDCO scheme of the Board and his depositing some money under the above stated circumstances would operate as estoppel against him; the petitioner would be deemed to have... waived his claim in seeking the allotment of house No. 10.
10. The petitioner's action which was in consequence of the misleading statement made by the Board in Annexure P-5 cannot play to his detriment and cannot be taken to operate as estoppel against him. The falsehood of the statement made by the Board is exposed by its own return. It is enough to lead to an inference of mala fides in not allotting the house No. 10 to the petitioner. The duty is implicit on the State to act impartially, honestly, reasonably and fairly while dealing with citizens. Respondent No. 2, the Board, having felt difficulty in justifying its earlier stand, as there is no 'Chairman's quota' changed the version in the return. Nothing has been brought on record to show that the house No. 10 was earmarked for the staff of the Board. We are of the opinion that this is a false plea belatedly taken by the Board to defeat the petitioner's just claim.
11. In Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, AIR 1989 SC 1642 their Lordships have observed that the State, the local bodies and public authorities which are 'State' within the meaning of Article 12 in their dealings must act in public interest and an infraction of that duty is amenable to judicial review. Their Lordships have held :
'Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Article 14.'
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'If a governmental policy or action even contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.'
12. We find merit in the grievance raised by the petitioner. We are also of the view that there is no sense, reason or justification in withholding the allotment of the said house to the petitioner by respondent No. 2 whem the house was available, the petitioner had exercised the choice and there was no other impediment and no other claimant in the way of the petitioner, we see no reason to hold why he should not have been allotted the house of his choice.
13. The petition stands allowed. We direct respondent No. 2 to allot the said house No. 10 to the petitioner on the terms and conditions in force in the year 1984 when the petitioner became justly entitled to allotment of this house. No order as to costs. Compliance within two months from today.