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Becharbhai V. Patel Vs. State of Gujarat and ors. - Court Judgment

SooperKanoon Citation
SubjectProperty
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Application No. 1121 of 1994
Judge
Reported inAIR1998Guj1
ActsConstitution of India - Articles 14 and 226; Evidence Act, 1872 - Sections 115
AppellantBecharbhai V. Patel
RespondentState of Gujarat and ors.
Appellant Advocate A.J. Patel, Adv.
Respondent Advocate Mukesh Patel, Asst. Govt. Pleader for Respondent Nos. 1 and 2
DispositionPetition dismissed
Cases ReferredAssociation v. Slate of Tamil Nadu
Excerpt:
.....action'.due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the state and its instrumentalities, with this element forming a necessary component of the decision-making process in all state actions. if it is a question of policy, even by way of change of old policy, the courts cannot interfere with a decision'.the court went on to say ;for instance, discretionary grant of licences, permits or the like, carry with it a reasonable expectation, though not a legal right to renewal or non-revocation, but lo summarily disappoint that expectation may be seen as unfair without the expectant person being heard. law is well settled in the matter of public largesses or..........in decision making process of any state action in givencircumstances. in halsbury's law of england legitimate expectation doctrine has been stated to mean where 'a person may have legimitate expectation of being treated in certain way by an administrative authority even though he has no legal right in private law to receive such treatment.'7. professor wade in his 'administrative law' has treated legislative expectation as a part of principles of natural justice the backbone of just and fair administrative action. he has slated 'classic situation in which the principles of natural justice apply is where some legal right, liberty or interest is affected, for instance where a building is demolished or an office-holder is dismissed or a trader's licence is revoked. but good.....
Judgment:
ORDER

R. Balia, J.

1. This petition is filed by one Becharbhai V. Patel for issuing a mandamus to the respondents to allot land to the petitioner on Saputara Hill Station and to treat the petitioner on par with other persons who have been allotted land on Saputara Hill Station on the basis of the Government Resolution of 1970.

2. A few facts in the present petition may be noted. An application was moved by the petitioner, describing himself as organizer of Divya Land Development Corporation for allotment of land to the proposed society named as Preyas Cooperative Housing Society Limited, Saputara, District Dang for the purpose of constructing row houses and bangalows therein. As the name of Corporation suggests, the petitioner is engaged in business of construction of buildings. The application was for an estimated land admeasuring 12000 to 15000 sq. yards without specifying the exact plot of land or exact Measure or class of plot in respect of which allotment was sought. When the allotment application was made Government Resolution of 1970 Annexure-A was in force providing procedure for allotment of plots of various categories. The Collector acknowledging the receipt of application dated 23-12-1982 and required certain information about the existing construction which the Housing Society might be having along with its plan and requested that only thereafter a proper application along with the earnest money may be made. The petitioner in his reply dated 31-1-1983 pointed out four different plots of varying sizes in respect of which he was interested for allotment and by calculating the earnest money on that basis the petitioner filed an application alongwith National Savings Certificates worth Rs. 8000/- dated 13-7-1983 as earnest money payable along with application.

3. Letter dated 13-7-1983 was acknowledged by the Collector vide his letter dated 27-7-1983. However, he enquired that when allotment is sought to be made for Housing Society whether the Housing Society has been registered or not. It appears that notwithstanding the enquiry, matter rested at this stage, inasmuch as the Housing Society in whose favour allotment was sought has not yet come into existence as a person. The proposed society as yet has not been registered. During this period the guidelines for allotment of land dated 10-12-1970 Annexure-A to the petition was replaced by Resolution dated 20-11-1991. The major change in the policy decision for the present purpose which is required to be noticed is that while under the guidelines of 1970 the Competent Authority was to consider the application for allotment individually, and in case of more than one applicant for the same plot of land, he could determine the allotment of such plot by drawing lots or other method provided under the Resolution dated 20-11-1991. Under the new policy the allotment of land was to be made by holding public auction. At that end advertisement to allot the plots of land at Saputara Hill Station by holding public auction was issued vide Resolution dated 12-12-1991. Pursuant to change in policy order was made on 12-12-1991 by the Collector to refund earnest money deposited by the petitioner and ordering his application for allotment of land to be filed. In spite of the aforesaid Resolution and orders the petitioner made representation to the Government through correspondence to allot him land by considering his application under the old policy. The petitioner was communicated by letter dated 21-1-1993 by the Deputy Secretary to the Government of Gujarat, Information and Broadcasting Department that the proposal made by him is not accepted by the Government. Last of the representations to which the petitioner makes a reference was made by him on 18-8-1993 and this petition was presented on 25-1-1994. Nothing has been placed on record except certain communication from the Secretary to the Chief Minister for approaching the appropriate department The petitioner appears to have persisted with approaching no one below Chief Minister.

4: It has been contended by the learned counsel for the petitioner that the petitioner hadmade an application for allotment of land on 24-9-1982 when the land could be allotted under the procedure provided in the Resolution of 1970 and his application has not been decided for such unusual long period for no fault of his, he cannot be deprived of his right to be considered under the Resolution of 1970 and he cannot be subjected to the decision contained in Resolution of 1991 in the matter of allotment of plot at Saputara Hill Station. Making of an application on 24-9-1982 when the Resolution of 1970 was in force gave rise to legitimate expectation in favour of the petitioner that he will be fairly treated under the said Resolution within a reasonable period. No-fulfillment of that legitimate expectation by inaction on the part of the respondents in the matter of allotment of land to the petitioner under the procedure prescribed by Resolution of 1970 amounts to rejection of his application by adopting the procedure which is arbitrary and unreasonable, violating the fundamental guarantees under Article 14 of the Constitution. Reliance was placed in support of the aforesaid submission on a decision of the Hon'ble Supreme Court in the case of Assistant Commissioner of Commercial Taxes v. Dharmendra Trading Co. reported in AIR 1988 SC 1247 and a decision of this Court in Special Civil Application No. 10463 of 1993 decided on 20-10-1994. It has been urged by the learned counsel for the petitioner that the Letters Patent Appeal against the aforesaid decision of this Court has since been dismissed and the S.L.P. before the Supreme Court has also been rejected.

5. Learned A.G.P. for the respondents urged that there is no room for doctrine of legitimate expectancy in the present case where a policy under which allotment is claimed itself has been changed; The change in policy has not been brought about in arbitrary and unreasonable manner. While the earlier allotment was to be considered on application basis, under the new policy allotment of land is to be made by public auction which is in public interest designed to fetch the maximum price of the land by an opportunity to ail who are interested in land to bid openly.

6. The doctrine of legitimate expectancy has been considered by Courts as an ingredient of reasonablemess, fairness and equity as opposed to unreasonableness and arbitrariness in decision making process of any State action in givencircumstances. In Halsbury's Law of England Legitimate Expectation doctrine has been stated to mean where 'a person may have legimitate expectation of being treated in certain way by an administrative authority even though he has no legal right in private law to receive such treatment.'

7. Professor Wade in his 'Administrative Law' has treated legislative expectation as a part of principles of natural justice the backbone of just and fair administrative action. He has slated 'classic situation in which the principles of natural justice apply is where some legal right, liberty or interest is affected, for instance where a building is demolished or an office-holder is dismissed or a trader's licence is revoked. But good administration demands their observance in other situation also, where the citizen may legitimately expect to be treated fairly.'

8. At another place in his book Professor Wade states by reference to various decided cases that :

'these are revealing decisions. They show that the Courts now expect government departments to honour their published statements or else to treat the citizen with the fullest personal consideration, unfairness in the form of unreasonableness here comes close to unfairness in the form of violation of natural justice, and the doctrine of legitimate expectation can operate in both contexts. It is obvious, furthermore, that this principle of substantive, as opposed to procedural, fairness may undermine some of the established rules about estoppel and misleading advice, which tend to operate unfairly.'

9. He quoted from Lord Bridge :

'The Courts have developed a relatively novel doctrine in public law that a duty of consultation may arise from a legitimate expectation of consultation aroused either by a promise or by an established practice of consultation'.

10. The requirement of giving due weightage to the legimitate expectation of a citizen while considering the State or its functionaries in action effecting such expectation as a part of general duty to act fairly in all circmstances has found its approval by a number of decisions of Courts of our land. In Food Corporation of India v. M/s. Kamdhenu Cattle Feed Industries reported in (1993) 1 SCC 71 : (AIR 1993 SC 1601) JusticeJ.S. Verma speaking for the apex Court while considering the scope and ambit of rights under Article 14 in contractual sphere said (at page 1604 (of AIR) :

'There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weightto the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.'

11. In Union of India v. Hindustan Development Corporation reported in (1993) 3 SCC 499 : (1993 AIR SCW 494) the Court said :

'It is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallised right as such is involved.'

12. In Madras City Wine Merchants' Assn v. State of T. N. reported in (1994) 5 SCC 509 : (1990 AIR SCW 3915) the Court said (at page 3339 (of AIR SCW):

'From the above it is clear that legitimate expectation may arise (a) if there is an express promise given b a public authority; or (b) because of the existence of a regular practice which theclaimant can reasonably expect to continue; (c) such an expectation must be reasonable.'

13. However, the right to seek judicial review to invalidate any administrative decision on the anvil of legitimate expectation has inherent limitations. Plea of legitimate expectation cannot be availed to forestall a legislation which may result in belying the legitimate expectation of a citizen on the existing law or where the position is altered by a rule or change in Government policy in public interest. The plea may also not be of any help even in cases where the decision is in the discretion of the deciding authority without legal bounds and when such decision is taken fairly and objectively, the Courts are not to interfere on the ground of procedural fairness of a person whose interest to legitimate expectation may be affected. Following observations of the learned judge in Attorney General for New South Wales v. Quin (1990) 64 Aust LJR 327 are apt :

'To strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the Courts adrift on a featureless sea of pragmatism. Moreover, the notice of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law.'

14. This statement of law has found approval of the Supreme Court in Hindustan Development Corporation's case (supra). The Court while enunciating that due weightage must be given to the legitimate expectation of a citizen while considering any State action, said :

'the protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words where a person's legitimate expectation is not fulfilled by taking a particular decision then the decision maker should justify denial of such expectation by showing some overriding public interest................... Thecase of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The protection is limited to that extent and judicial review can be within those limits........................... The decision taken by theauthority must be found to be arbitrary.unreasonable and not taken in public interest. If it is a question of policy, even by way of change of old policy, the Courts cannot interfere with a decision'.

The Court went on to say ;

'For instance, discretionary grant of licences, permits or the like, carry with it a reasonable expectation, though not a legal right to renewal or non-revocation, but lo summarily disappoint that expectation may be seen as unfair without the expectant person being heard. But there again the Court has to see whether it was done as a policy or in the public interest either by way of Government order, rule or by way of a legislation. If that be so, a decision denying a legitimate expectation based on such grounds does not qualify for interference unless in a given case the decision or action taken amounts to an abuse of power.'

15. The Court in F.C.I. v. Kamdhenu Cattle Feed Industries (supra) clarified '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-arbitratincss and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this mariner and to this extent.'

16. The Court had an occasion to consider the extent and the ambit of the rule of legitimate expectation of a citizen in decision making by the State authority and the limits interference by way of judicial review of such action being challenged on the ground of legitimate expectation. The Court after considering a large number of precedent including decision referred to above came to the conclusion 'if there is a change in policy or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise.'

17. In a situation very much akin to the facts of the present case the apex Court considered the applicability of principle of legitimate expectation in the matter of cancellation of selection processprior to appointment in State of M.P. v. Raghuveer Singh Yadav reported in (1994) 6 SCC 151. The facts of the case were that the Weight and Measures Department of the M.P. Government invited applications for the posts of Inspectors from eligible candidates. The qualification prescribed for eligibility was degree in Art or Commerce or Science or Engineering or Diploma in Engineering. Written examinations were held, results were declared and interview cards were issued to successful candidates. In the meanwhile, the Government amended the rules by M.P. Standard of Weights and Measurement (Enforcement) Rules, 1989 and altered the qualification for eligibility to the said posts to degree in Science with physics or degree in Engineering or Technology or diploma in Engineering, Pursuant to the amended rules, the Government withdrew the notification inviting application for appointment in pursuance of which process of selection has reached the stage of calling for interviews with intention to proceed with the recruitment afresh under the amended rules. The candidates successfully challenged the amended rules before the M.P. Administrative Tribunal on the ground that notification for selection could not have been withdrawn on amendments of rules which were not retrospective nor the rules could be amended so as to belie the legitimate expectation of the candidates who had applied in pursuance of the withdrawal notification under the existing eligibility criterion for being selected for appointment. On appeal the apex Court repelled the contention. Reversing the decision of the M.P. Administrative Tribunal the Court said :

'it is settled law that the State has, got power to prescribe qualifications for recruitment afresh. Here is acase that pursuant to amended Rules. the Government has withdrawn the earlier notification and wants to proceed with the recruitment afresh. It is not a case of any accrued right. The candidates who had appeared for the examination and passed the written examination had only legitimate expectation to be considered of their claims according to the rules then in vogue. The amended Rules have only prospective operation. The Government is entitled to conduct selection in accordance with the changed rules and make, final recruitment. Obviously no candidate acquired any vested right against theState.'

18. If the facts of the present case are to be seen in view of the aforesaid discussion it is apparent that the application by the petitioner was made for allotment of land to a proposed housing society in 1982 when the Resolution of 1970 was in force which permitted for allotment of land for considering individual application instead of having recourse to public auction offering an opportunity to public at large to bid openly for the acquisition of the plot of land. No decision was taken on that application until 1991 because the society for whom allotment was sought, having not been registered did not come into being, In the very first reply to acknowledgement of application and deposit of the earnest money the Collector had made an enquiry about the fact whether the housing society has been registered in accordance with law in order to be considered a person. It is candidly stated by the learned Advocate for the petitioner that until date registration of the said society has not taken place and in law it cannot be said that any housing society, as a juristic person for whose members land in question was to be allotted exists. While the application of the petitioner was thus pending in November 1991 the policy of the State in the relevant field (sic) of the procedure of allotment changed. Instead of considering the individual allotment application as per the procedure prescribed under the 1970 Resolution the Government decided to allot plot by public auction only. Law is well settled in the matter of public largesses or allotment of land, ordinarily the best procedure in public interest is to adopt the procedure of. public auction in order to sec that the State gets highest possible price for the largesse or the property it offers and there is transparency in Slate action minimising the possibility of clandestine dealing with grant of such largesse or allotment ofland etc, by the State authorities. Obviously the policy was changed in larger public interest. Therefore, in considering the legitimacy of decision of competent authority that there was change in policy and the application for allotment has to be considered as per the existing policy and not as per the old policy was in larger public interest, the question of invoking doctrine of legitimate expectancy to impinge the State action merely on that ground would not arise.

19. Decision in Asst. Commissioner ofCommercial Taxes (Asst.), pharwar v. Dharmendra Trading Co.etc. reported in AIR 1988 SC 1247 relied on by the learned counsel for the petitioner deals with altogether different question. It was a case in which under the Karnataka Sales Tax Act, Government has framed a Incentive Scheme, 1969 for new entrepreneurs establishing their industries in the State of Karnataka giving them certain benefits stated under the Scheme. By notification dated 12-l-1977, the Government sought to curtail the quantum of benefit available under 1969 Scheme to the already established industries who had become entitled to such benefit during the operation of the Scheme. A grievance was raised by those who had established their industries in the State of Karnataka between 13-6-1969 but before 12-1-1977 that they having altered their position to their detriment in pursuance of promise contained in the Incentive Scheme, 1969 are entitled to hold the State Government bound by that promise. The plea of the entrepreneurs who had installed their industry within the State of Karnataka prior to the Notification was upheld to the extent they claim entitlement under the Incentive Scheme, 1969, on the promise of which they had altered their position. ,

20. It is now well established that though there is an analogy between the doctrines of legitimate expectation and promissory estoppel, the two are distinct and detrimental reliance upon the representation is not a necessary ingredientof a, legitimate expectation. Reference in this connection may be made to decision of Supreme Court in the case of Madras City Wine Merchants' Association v. Slate of Tamil Nadu reported in (1994) 5 SCC 509 : (1994 AIR SCW 3915>:': Moreover, as I have come to the conclusion above, that no promise at all was held out, to give rise to any legitimate expectation much less a promise inviting a person to alter his position to his detriment to invoke the principle of promissory estoppel against the State in the present circumstances when the procedure for allotment itself is changed and petitioner has not shown any right of allotment of land to himself, the principle whether of promissory estoppel or of legitimate expectancy has no application.

21. Reliance on a decision of this Court in Special Civil Application No. 1045 of 1993, D/-20-10-1994 is of title assistance to the petitioner.That was a case in which 3 applications for allotment of land were made at about same time, one of which in question was for allotment of land whose total value at the time of application as per market value exceeded Rs. 25 lakhs; while other land valued at less than Rs. 25 lakhs. Due to this fortuitous difference in circumstances while the latter two applications came to be decided by different Competent authorities resulting in early disposal, the former was required to be approved by the Government which delayed the matter. While the two plots, which came to be decided earlier by lower athorities were allotted at price ranging from Rs. 450/- to Rs. 475A per sq. mtr. the prevailing market price of the plot, which came to be allotted on a latter date, purely due to fortuitous circumstances of measurement of land by differrent authority, at a price of Rs. 800/- per sq. mtr. was held to result in hostile discrimination in treating the like application of same time for same purpose purely on fortuitous circumstances with whom it fell to be decided. We are not concerned with any such discrimination based on fortuitous circumstance.

22. The learned counsel strongly urged thatordinarily it may be so but in view of the unusualdelay in considering the case of the petitioner forallotment of land in question the arbitrariness inthe State action or inaction is apparent and theCourt's interference should reach to cut at theroot of such arbitrariness by binding them toconsider the petitioner's case undef the 1970Resolution as many other applications forallotment of land under 1970 Resolution havebeen decided by the authorities.

23. Having carefully considered this contention I am unable to accede to it. As noticed above the petitioner is an organizer of Divya Land Development Corporation. Divya Land Development Corporation is not an applicant arid therfore as far as the petitioner in his capacity as organizer of Development Land Development Corporation can not have any legitimate expectation of considering the application made on behalf of and for the benefit of proposed Preyas Co-operative Housing Society Ltd. The application on the face of it is not for allotment of land to any existing person but for securing the allotment for the benefit of a person who is not in existence and which may or may not at all come into existence in future. From the Resolution of1970 also it appears th'al application has to be made by a person and each applicant or his family entitled to be considered for allotment of one plot only. It does not give any special status to a housing society in the matter of allotment. The largest measurement of the plot which ordinarily could be alloted under one application is 2000 sq. yards. The reading of the entire Resolution leaves no room for doubt that it only provides procedure for considering the application for allotment made by various persons. It neither offers any promise nor any invitation to make an application. It simply prescribes the procedural condition. An application for allotment by any applicant could be considered. By merely making an application no person gets any vested right that on making an application and deposit of earnest money and in absence of any other applicant he would get allotment. As a matter of fact, on the facts of the case, it cannot be said that there was any proper application by an existing person for allotment of land before the competent officer which could have been considered by him. In these circumstances this contention of learned counsel that fault of non-consideration squarely lays at the doors of the competent authority is devoid of any substance.

24. On the other hand facts of the case betrays the behind the screen object of the petitioner as a person engaged in construction of buildings to acquire land under old procedure for his own profit by constructing buildings and then directly transferring the property to intending purchasers, who only will be forming the nucleus of housing society to come into existence. As a matter of fact, during the course of arguments it was stated in response to Court querry that direct negotiation for purchase of property has taken place between the petitioner and proposed purchasers individually and not with so called housing society. So called alleged applicants have not at all come forward whose legitimate expectation, if any, (he petitioner is seeking to protect.

25. Lastly it was urged that the petitioner having offered Rs. 8000/- as earnest money in pursuance of demand by the respondent and they having accepted the same it amounts to an assurance to the petitioner of allotment of land in question to the extent permissible, I am unable to read any such assurance from any documents in the present case.

26. It was the petitioner who had made an application. He was required to get the society registered and make appropriate application thereafter with proper earnest money as per rules. He made an application in proper form without getting the society registered and deposit of earnest money in accordance with the requirement of procedure prescribed for considering an application for allotment. Acknowledgement of receipt of application along with earnest money in any circumstnces cannot be considered that on any promise or assurance of the respondents the petitioner has altered his position to his detriment to invoke doctrine of promissory estoppel and hold the respondents bound by the same.

27. Apart from the fact that the Resolution of, 1970 did not contain any such promise nor any such assurance came into existence by any action of the competent authority in exercise of powers under rule, promissory estoppel does not enure beyond the life of Resolution 1970 itself. Once no action was taken under the 1970 Resolution on replacement of new process of allotment of Resolution dated 21-11-1991, it cannot be said that the petitioner could still hold respondents bound to consider his application under a Resolution which is no more in existence.

28. As a result of the aforesaid discussion, I do not find any force in this petition and the same is hereby dismissed. Rule is discharged. Interim order, if any. stands vacated. The petitioner will pay the costs of the petition.


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