Mandakini Senapati (Dead) After Her, Somanath Senapati Vs. State of Orissa and ors. - Court Judgment

A. K. Patnaik, J.

1. This writ petition was originally filed by late Mandakini Senapati. She died during the pendency of the writ petition and in her place, her husband-Somanath Senapati has been substituted as the petitioner.

2. The facts briefly are that the State of Orissa by a policy decision in the year 1980-81 declared hotel as an 'Industry'. Late Mandakini Senapati applied in the year 1985 for allotment of a land in Bhubaneswar town for setting up a hotel named 'Hotel Ashirbad'. The aforesaid hotel project was provisionally registered with the General Manager, District Industries Centre (for short, 'the D.I.C.') on 11.12.1985. The D.I.C. recommended the aforesaid hotel project to the Director of Industries, Orissa by letter dated 18.1.1986. The proposal, however, was dropped at the level of the Director of Industries as there was a ban imposed by the Government on hotel projects. After the ban was lifted, the proposal was recommended by the Director of Industries, Orissa by letter dated 31.5.1993 to the Government in the Industries Department. The Government in the Industries Department then recommended the proposal to the G.A. Department by letter dated 15.7.1994 for consideration relating to the allotment of land in Bhubaneswar town for the hotel project. No land, however, was allotted. Late Mandakini Senapati moved this Court in a writ petition O.J.C. No. 12604 of 1996 and by order dated 13.12.1996, the writ petition was disposed of with the direction to the authorities to take appropriate action in the matter and to place the proposal before the Industrial Plot Allotment Committee for its consideration. The Industrial Plot Allotment Committee in its meeting held on 20.6.1997 decided to ask Smt. Mandakini Senapati to submit the source of her funds along with recommendations of the D.I.C. and the Orissa State Financial Corporation and the decision was communicated to her by the G.A. Department letter dated 30.8.1997. Late Mandakini Senapati intimated on 10.9.1997 that the Urban Co-operative Bank, Bhubaneswar has agreed to finance the project. By that time, the Industrial Plot Allotment Committee was abolished by Government resolution dated 4.8.1997 and instead, the work of allotment of land was assigned to the Site Selection Committee constituted by the G. A. Department. The Site Selection Committee in its meeting held on 25.9.1997 recommended for allotment of plot No. N/5-533, area 60' x 90' equal to Ac. 0.124 decimals in mouza Nayapalli for the hotel project and the allotment order dated 4.12.1997 was issued in favour of late Mandakini Senapati asking her to deposit Rs. 2,48,000/- towards premium at the rate of Rs. 20,00,000/- per acre fixed by the Government order dated 10.4.1992. Late Mandakini Senapati then requested the authorities to revise the rate of premium to the rate prevailing in the year 1985 on the ground that she had applied for land in the year 1985 and that allotment of land was delayed due to no fault of her. She also made a request to allow her to make payment of the premium in instalments as such instalments had been allowed to others. Since the rate of premium was not revised by the Government nor was she allowed to pay the premium in instalments, she filed the present writ petition for directing the opp. parties to charge premium for the land at the rate prevailing in the year 1985 and to allow payment of the premium in instalments as allowed to others. After her death, her husband, Somanath Senapati, has been substituted as the petitioner and a prayer has also been made to direct modification of the order of allotment in favour of Somanath Senapati.

3. Mr. K.K. Jena, learned counsel for the petitioner produced before the Court the White Paper on Land Allotment at New Capital (1979 to 1989) published by the G.A. Department, Government of Orissa to show that the rate of premium for industrial purposes in the year 1987 was Rs. 5,00,000/- per acre. He argued that since in the present case the application for allotment of land had been made as far back as in the year 1985 and for no fault of her, the allotment was delayed and was made only in the year 1997, this is a fit case in which appropriate direction should be issued to the authorities to charge premium at the rate of Rs. 5,00,000/-per acre that was prevailing in the year 1987 instead of premium at the rate of Rs. 20,00,000/- per acre which was prevailing in the year 1997. He submitted that soon-after late Mandakini Senapati submitted an application in the year 1985 for allotment of land she had a legitimate expectation for allotment of land at the rate of premium applicable in the year 1985 and for this reason, she should be charged premium at the rate that was applicable in the year 1985 or in the year 1987 and not at the rate applicable in the year 1997. He cited the decision of the Supreme Court in Union of India and Ors. v. Hindustan Development Corporation and Ors., 1993(3) SCC 499 in which the Supreme Court has discussed at length the law relating to legitimate expectation. He further submitted that in any case, the allotment order should now be made in favour of the petitioner-Somanath Senapati after death of his wife Mandakini Senapati and the petitioner should be allowed to deposit the premium in instalments as has been allowed in the case of others. In this context, he referred to the orders dated 28.8.1998 and 23.3.1998 annexed to the writ petition as Annexures-8/B and 87C respectively by which M/s. Swami Resorts Private Limited and M/s. Mayfair Hotels and Resorts Pvt. Limited have been allowed to pay the premium in eight half yearly instalments. According to Mr. Jena, if similar instalments are not allowed to the petitioner, it will amount to discrimination against the petitioner and the right to equality of the petitioner under Article 14 of the Constitution would stand violated.

4. Mr. M.K. Mohanty, learned Additional Government Advocate, on the other hand, relying on the counter affidavit fifed on behalf of the opp. parties 2 and 5 and the correspondence annexed to the writ petition submitted that although late Mandakini Senapati applied for allotment of land for hotel project in the year 1985, due to ban imposed on the hotel project by the Government, the said application could not be processed until 1993 and only after the ban was lifted, the said application was processed and late Mandakini Senapati was finally allotted the land at a premium of Rs. 20,00,000/- per acre fixed by the Government order dated 10.4.1992. Regarding the request for paying the premium in instalments Mr. Mohanty submitted that the said request to pay the amount on instalment basis was considered and rejected by the authorities.

5. The first question to be decided in this writ petition is whether the Court can direct the authorities to revise the premium for allotment of land to late Mandakini Senapati from Rs. 20,00,000/- per acre as fixed in the allotment order of the Government to Rs. 5,00,000/- per acre that was prevalent as on 1.1.1987 on the principle of legitimate expectation. In Union of India and Ors. v. Hindustan Development Corporation and Ors. (supra) cited by Mr. Jena, the Supreme Court after considering the English and the Indian authorities on the principle of legitimate expectation held :

'33. On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that 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 straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfillment of the expectation where ah overriding public interest requires otherwise. In other words where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Therefore even if substantive protection of such expectation is contemplated that does not grant and absolute right to a particular person. It simply ensures the circumstances in which that expectation may be denied or restricted. A case 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 a judicial review can be within those limits. But as discussed above a person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. In considering the same several factors which give rise to such legitimate expectation must be present. The decision taken by the authority 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. In a given case whether there are such facts and circumstances giving rise to a legitimate expectation, it would primarily be a question of fact. If these tests are satisfied and if the court is satisfied that a case of legitimate expectation, it would primarily be a question of fact. If these tests are satisfied and if the court is satisfied that a case of legitimate expectation is made out then the next question would be whether failure to give an opportunity of hearing before the decision affecting such legitimate expectation is taken, has resulted in failure of justice and whether on that ground the decision should be quashed. If that be so then what should be the relief is again a matter which depends on several factors'.

In the aforesaid decision, the Supreme Court has, thus, held that a case 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 and the protection is limited to that extent and a judicial review can be within those limits. The petitioner has not shown that by representation or by past practice the Government has been fixing premium for allotment of land at the rates applicable at the time of application for allotment of land. On the other hand, opp. parties 2 and 5 have stated in paragraph-12 of the counter affidavit filed on 10.2.1999 that the premium is always assessed and charged to an allottee basing on the rate prevailing on the date of issue of order of allotment. In the absence of any such representation or past practice followed by the Government for fixing the premium for allotment of land at the rate applicable at the time of application for allotment of land, no legitimate expectation can possibly arise in law that the applicant would be charged premium at the rate applicable at the time of application for allotment of land.

6. Further, in the aforesaid decision in the case of Union of India and Ors. v. Hindustan Development Corporation and Ors. (supra), the Supreme Court has also held that in considering the claim on the doctrine of legitimate expectation several factors which give rise to such legitimate expectation must be present and the decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest. In the facts of the present case, it appears that late Mandakini Senapati applied for allotment of land in the year 1985 and the case of late Mandakini Senapati for hotel protect was recommended to the Director of Industries, Orissa by the D.I.C. but due to imposition of a ban by the Government on hotel projects, the proposal was dropped at the level of Director of Industries, Orissa and was revived in the year 1993 only after the ban was lifted. This will be clear from the copy of the letter dated 29.7.1997 of the Project Manager, D.I.C., Bhubaneswar annexed to the writ petition as Annexure-3 which is extracted herein below :

'DISTRICT INDUSTRIES CENTRE : BHUBANESWAR.

PIN-751 010 No. 4259/DICB.

Bhubaneswar, dated 29th July, 1997.

To

The Joint Secretary to Govt. & Ex-Officio Director of Estates, Govt. of Orissa, G. A. Department, Bhubaneswar.

Sub : Approval of Project proposal of Hotel Ashirbad submitted by Mandakini Senapati EB-32, Stage-V, Laxmisagar.

Sir,

With reference to your letter No. 7360 dt. 5.7.97 on the subject cited above, I am to say that the case of M/s. Hotel Ashirbad was recommended to Director of Industries, Orissa, vide this office letter No. 563, dt. 18.1.86. But due to impose of ban by Govt. to Hotel, Garrage, Nurshing Home, Press, etc. the proposal was dropped at Directorate level. The proposal was recommended by Director of Industries, Orissa vide his letter No. 10468 dt. 31.5.93 to Govt. after the ban lifted with instruction to this office for sending a fresh scheme and layout plan, etc. directly to Govt. for considering the proposal. Accordingly, this office sent the above documents to Govt. vide this office letter No. 5540, dt. 23.8.93 The Govt. in Industries Department have also recommended the proposal to G. A. Deptt. vide his letter No. 16262 dt. 15.7.94 for consideration.

However, all above correspondences are enclosed for your kind reference and taking further action.

Encl: As above. Yours faithfully, sd/-Project Manager, DIC, Bhubaneswar.Memo No. 4260 dt. 29.7.97

Copy forwarded to the Under Secretary to Govt. Industries Department, Govt. of Orissa, Bhubaneswar for kind information and necessary action.

Sd/-

Project Manager,

DIC, Bhubaneswar.

Memo No. 4261/Dt. 29.7.97

Copy to Director of Industries, Orissa, Cuttack for kind information and necessary action.

Sd/-

Project Manager,

DIC, Bhubaneswar

Thus, on account of policy decision of the Government, hotel projects were banned for some period on account of which the application of late Mandakini Senapati for hotel project and for allotment of land could not be processed and it was processed only in the year 1993. Obviously, late Mandakini Senapati could not be allotted any land for hotel project during this ban period and for this reason, late Mandakini Senapati or the present petitioner-Somanath Senapati cannot claim allotment of land at the rate of Rs. 5,00,000/- per acre fixed as on 1.1.1987. The rate of premium of Rs. 20,00,000/- per acre was fixed by the Government order No. 6247-GA dated 10.4.1992 as stated in paragraph-7 of the counter affidavit filed by the opp. parties 2 and 5 on 10.2.1999 and this was the rate which prevailed at the time when ban on hotel projects was lifted and this is the rate at which allotment has been made in favour of late Mandakini Senapati by the allotment order dated 4.12.1997. On these facts, it is difficult to hold that the rate of premium fixed in the impugned allotment order was arbitrary, unreasonable and not in the public interest. We are, therefore, not inclined to direct the opp. parties to revise the premium for allotment of land in favour of late Mandakini Senapati or the present petitioner from Rs. 20,00,000/- per acre to Rs. 5,00,000/- per acre.

7. The next question to be decided is whether the authorities should have allowed late Mandakini Senapati or the petitioner to pay the premium in instalments. It is clear from the Government orders dated 28.8.1998 and 23.3.1998 in Annexures-87B and 87C issued by the General Administration Department of the Government of Orissa that M/s. Swami Resorts Private Limited and M/s. Mayfair Hotels and Resorts Pvt. Limited have been allowed to pay premium in eight half yearly instalments. Although this fact of allowing the said two parties to pay the premium in instalments has been stated in paragraph-14 of the writ petition, the opp. parties 2 and 5 in their counter affidavit have not stated any reason as to why the said two parties have been allowed instalments but late Mandakini Senapati has not been allowed instalments. In our considered opinion, refusal on the part of the authorities to allow late Mandakini Senapati to pay the premium in instalments amounts to discrimination against her and violative of her rights under Article 14 of the Constitution.

8. Since late Mandakini Senapati has in the meanwhile died and Somanath Senapati is the Proprietor of the proposed hotel project as per the provisional D.I.C. Registration Certificate issued by the D.I.C., Bhubaneswar on 16.5.2001, copy of which has been annexed to the writ petition as Annexure-87A, the allotment order has to be modified and issued in the name of Somanath Senapati.

9. For the aforesaid reasons, while refusing to direct the opp. parties to charge the premium for allotment of land at the rate prevailing in the year 1985, we direct that the allotment order be modified and issued in favour of the present petitioner - Somanath Senapati and we further direct that the present petitioner-Somanath Senapati be allowed to pay Rs. 2,48,000/- as fixed in the said allotment order in eight half yearly instalments. Fresh order will be issued by the Government of Orissa in G. A. Department pursuant to the aforesaid direction of this Court within a period of three months from the date of receipt of a certified copy of this judgment by the Secretary, G. A. Department, Government of Orissa from the petitioner.

10. The writ petition is allowed to the extent indicated above. Considering the facts and circumstances of the case, parties shall bear their own costs.