Karnataka High Court
Union Of India vs M/S. Property And Finance Private Ltd. on 9 August, 1995
Equivalent citations: AIR1996KANT264, ILR1995KAR2401, 1995(5)KARLJ247, AIR 1996 KARNATAKA 264, (1995) ILR (KANT) 2401
ORDER M.L. Pendse, C.J.
1. M/s. Property and Finance Private Limited is a company incorporated under the Indian Companies Act and initially had its registered office at Calcutta. The Company owned immoveable property known as M/s. Palace Hotel situated at Karachi in Pakistan. After the hostilities between India and Pakistan commenced in the year 1965, the Government of Pakistan directed by an Ordinance that alt properties of Indian nationals and Indian Companies shall vest in the Custodian of Enemy Properties. As a result of the Ordinance, the Companies were divested of the properties. The Government of India also issued an Ordinance in exercise of the powers conferred under sub-rule (1) of Rule 133 (v) of the Defence of India Rules, 1962 providing that all immoveable properties in India belonging to Pakistani Nationals shall vest in the Custodian of Enemy Property in India.
2. As the Indian Nationals and the Companies registered in India lost their properties situate in Pakistan and suffered losses, demand was made to the Central Government for grant of some relief. The Government of India, Ministry of Foreign Trade, published Resolution dated March 15, 1971 providing for certain relief. The Resolution sets out that claims were filed before Custodian of Enemy Property for the losses suffered due to Ordinance issued by Government of Pakistan after Indo-Pakistan conflict. The Government of India decided that an ad hoc interim relief in the form of ex-gratia grants from the Consolidated Fund of India at the rate of 25% of the value of the verified claims may be made to all Indian Nationals and Indian Companies against the bond to be executed by the recipients. The Resolution further sets out that such ex-gratia amounts should not exceed rupees twenty-five lakhs, but in any case such amount exceeds rupees twenty-five lakhs, then the same may be decided on the merits of each case. The payments to be made under the scheme were to be adjusted when the properties are restored by Government of Pakistan in terms of the Tashkent Agreement. Prior to the date of the Resolution, the Government of India and Pakistan through the Prime Ministers had entered into an agreement known as 'Tashkent Agreement' for resolving the disputes arising out of Indo-Pak war. The record indicates that the properties vested in the Government of Pakistan and with the Government of India were in the ratio of four to one and that is probably the reason why the Government of India decided to give ex-gratia grants at the rate of 25% of the value of the properties forfeited by Government of Pakistan.
3. In pursuance of the Notification by Government of India on March 15, 1971, the respondent-Company lodged claim before the Custodian of Enemy Property, Bombay, demanding a sum of Rs. 2,60,21,208/-. The Company claimed that market value of the properties forfeited by Pakistan Government should be determined and 25% of the said market value should be paid as per the Resolution. The Custodian of Enemy Property adjudicated the claim by order dated May 1, 1973 and held that respondent-company is entitled to the sum of Rupees 3,15,463.82 ps. The Custodian, did not accept the claim that the Company was entitled to 25% of the market value of the property, as of year 1965 and held that as per the Government decision the ex-gratia payment should be 25% of the book value of the property. The Custodian had adopted the principle of determination of book value of the properties in respect of the claims lodged by the Companies and which were more than 700. The Company accepted the amount of Rs. 3,15,463.82 ps., under protest to the claim that the amount should have been determined with reference to the market value. The Company received the amount after executing the requisite Indemnity Bond in favour of the Government of India. The indemnity bond inter alia provided that if and when a settlement is reached between the two Governments in respect of the assets and properties belonging to the nationals of a country, then the amount paid will be adjusted. The Company also gave an undertaking not to negotiate either directly or indirectly with the Government of Pakistan for restoration of the properties or payment of compensation. The Company agreed and declared that the decision of the Government of India and/or the Custodian of Enemy Property for India in all matters relating to the correctness of the Company's claim is valid and binding on the Company.
4. After receipt of the amount determined by the Custodian of Enemy Property, the Company made representations to Government of India on May 8, 1973 demanding that the ex-gratia payment should be 25% of the market value of the property and the payment made taking into consideration the book value of the property, was not proper. The record indicates that some other representations from individuals and companies were also received and the Inter-Ministerial Committee was constituted to examine those representations. The meeting of the Inter-Ministerial Committee was held on October 4, 1973 and it was attended by the officers of the Ministry of Finance, Department of Economic Affairs, Department of Banking, Ministry of Commerce and Custodian of Enemy Property. The Chairman of the meeting while opening discussion specifically referred to the case of Palace Hotel owned by the respondent-Company and Oberoi Hotels in Rawalpindi, Murree, Peshawar and Lahore. The Chairman suggested that the cost of the land on which the Palace Hotel of respondent-Company stood, had appreciated many times and therefore the case of the respondent-Company should be viewed in the context of the ruling prices in 1965 and not on the basis of the book value of the property. The Inter-Ministerial Committee decided to set up a panel to examine the cases where representations were made. The Panel was to consist of three officials and the Custodian of Enemy Property was to preside over the panel and the two other officers were to be nominated by the State Government concerned, with a request to nominate one Judicial Officer and a Land Records Officer. The Committee decided that once the panel makes a recommendation, then normally the Government should not question the panel's judgment.
In pursuance of the Inter-Ministerial Committee setting up panel, the respondent-Company lodged a fresh claim asserting that the market value of the property was Rs. 2,60,21,208/- in the year 1965 when the hostilities broke out and the properties were forfeited. The Panel by order dated July 22, f 974 came to the conclusion that the market value of Palace Hotel was Rs. 1,31,05,700/-and consequently ex-gratia payment as per the Resolution dated March 15, 1971 payable to the respondent-Company was Rupees 32,76,425/-. The Panel recommended to the Central Government that after deduction of the amount already paid by Custodian of Enemy Property the balance of Rupees 29,60,961.20 ps. should be paid to the respondent-Company.
5. The recommendation of the Panel set up by Inter-ministerial Committee was forwarded to the Finance Department and the Finance Department rejected the recommendation. The Finance Ministry felt that the claim of the respondent-Company was duly verified by the Custodian of Enemy Property on the basis of balance-sheet and the case need not have been placed before the panel at all. The Finance Ministry also felt that as the Company had leased out the property only discounted value as in the balance-sheet ought to have been considered. The Finance Ministry made it clear that ex-gratia scheme was not framed to pay compensation with reference to market value but only as some relief to the owners whose properties were forfeited by Pakistan Government.
The Company possibly not being aware of the rejection of the recommendation by the Finance Department of the Central Government lodged claim on September 11 and September 23, 1975 before the Central Government. The claim made by the Company was turned down on February 22, 1979 but, even before that date, another demand was made on February 7, 1978 and the second demand was also turned down. The third demand made on March 16, 1979 was also turned down by the Central Government on March 28, 1979. Several more demands made on July 16, 1982, March 9, 1983, August 16, 1984 and September 3, 1984 were also rejected by communication dated January 11, 1985 and February 21, 1985. Not being satisfied with all these rejections, one more demand was made on December I, 1986 and that was also turned down by the Central Government on January 12, 1987.
6. The respondent-Company in the meanwhile had shifted its registered office from Calcutta to Bangalore, and on April 16, 1987 filed writ petition under Art. 226 of Constitution, against the Central Government represented by the Ministry of Commerce, for a writ of mandamus directing the Central Government to pay a sum of Rs. 29,60,961.20 ps. together with interest at the rate of 18% per annum. The respondent-Company claimed that the rejection by the Central Government of the claim made by the Company, was vitiated by breach of policy declared by the Resolution dated March 15, 1971. The Company claimed that a doctrine of promissory estoppel is applicable to the facts of the case and it is not open for the Central Government to refuse to make payment as per the recommendation of the Panel set up in pursuance of Inter-Ministerial Meeting. The Company also claimed that the Central Government is guilty of discriminating the claim made by the Bristol Hotel on the one hand and the Company on the other in as much as the recommendation of the panel in respect of Bristol Hotel was honoured while that of the Company was turned down.
The writ petition was resisted by the appellant-Government of India by pointing out that this Court has no jurisdiction to entertain the petition as the Company had registered office at Calcutta when the claims were made and rejected by the Government on more than one occasion and that the shifting of the registered office of the Company to Bangalore will not confer any jurisdiction in this Court. The appellant also pointed out that initially the Custodian of Enemy Property had adjudicated the claim in May, 1973 at Bombay and no cause of action had taken place in the jurisdiction of this Court. The Central Government also pointed out that the petition suffers from serious laches as the claims of the Company were rejected right from the year 1979 onwards on numerous occasions and the petition is filed in April, 1987 and no explanation whatsoever had come forth for this exorbitant delay. The Central Government claim that the complaint about the breach of policy set out under the Resolution dated March 15, 1971 is a figment of imagination.
The Central Government pointed out that ex-gratia payment in pursuance of the resolution was made to 709 companies by determining the book value of the assets forfeited by Pakistan Government. The ex-gratia payment of 25% was of the book value of the properties and the claim of the Company that it should be on the basis of the market value was wholly unsustainable. The Central Government denied that the doctrine of promissory estoppel comes into play on the facts and circumstances of the case and asserted that the Company has not altered position in pursuance of the scheme floated by the Central Government on March 15, 1971. As regards the challenge to the breach of Art. 14 of the Constitution, it was pointed out that the claim in respect of Bristol Hotel was made by an individual, who had a half share in the properly held by Bristol Hotel and while determining the claim made by individuals, the Central Government had taken into consideration the market value as opposed to the claim made by the Company where book value of the property was ascertained.
7. The learned single Judge, by the impugned judgment dated December 5, 1990 allowed the writ petition and directed the Central Government to pay a sum of Rupees 29,60,961.20p. to the Company within a period of three months from the date of receipt of the judgment. The learned single Judge held that this Court has jurisdiction to entertain the petition as the letter communicating rejection on January 12, 1987 was addressed to the Company after the registered office of the Company was shifted to Bangalore. The learned Judge also held that the petitioner does not suffer from laches as the Company was making representations from time to time from the year 1975 onwards and even though all the representations were turned down, the Central Government had informed the Company from time to time that representations were under consideration. According to the learned Judge, as the Company was informed that each of the representation was under consideration, it was not incumbent upon the Company to file the petition in the year 1979 when the first demand was turned down.
On merits, the learned Judge held that though the validity of framing of policy by the Central Government cannot be decided in writ jurisdiction, it is always open to the Court to examine the policy making process and test it on the scale of human value as to whether justice has been done to the Company. According to the learned Judge, if the interests of the victim i.e., the Company, weighed against the countervailing public interest, then the writ Court is entitled to grant relief to the Company. It was further held that a panel of 3. members was set up in pursuance of the Inter-Ministerial Committee deliberation and the recommendation of the panel that compensation should be paid to the Company in the sum of Rs. 32,76,425/- could not have been rejected by the Central Government. The learned Judge further held that determination of ex-gratia payment by the Custodian of Enemy Property by order of adjudication dated May 1, 1973 was made on the basis of the book value of the property forfeited and that was not a correct measure to determine the amount payable to the Company. The learned Judge held that the book value gathered from the balance-sheet of the Company does not reflect true value of the property and it was incumbent upon the Government to make ex-gratia payment in pursuance of the resolution dated March 6, 1971 by taking into account the market value of the property as prevailing in the year 1965. The learned Judge held that by the resolution dated March 15, 1971, the Central Government gave a firm assurance to all the owners of the properties which were forfeited by Pakistan Government and the Central Government is estopped from refusing to make payment of 25% of the value and which could be only market value of the property. A doctrine of promissory estoppel, held the learned Judge, clearly conies into picture and the Central Government is bound to discharge the liability. It was further held that the action of the Central Government in not paying compensation amount as recommended by the Panel, is violative of Art. 14 of the Constitution as the Central Government discriminated the claim between the Bristol Hotel on the one hand and the claim of the company on the other inasmuch as the recommendation of the panel in respect of Bristol Hotel was honoured while that of the Company was turned down. The learned Judge also held that though the company had not so pleaded, the principle of legitimate expectation could be emerged to grant relief to the company. The legitimate expectation, according to the learned Judge, was determination of the amount payable on the basis of the market value of the property forefeited and not on the basis of the book value of the property. On the strength of these findings, the learned Judge proceeded to direct the Central Government to pay a sum of Rs.29,60,961.20 p. to the Company. The learned Judge declined payment along with interest by observing that there is no valid ground made out by the company. This order of the learned single Judge is under challenge in this appeal.
8. Mr. Shailendra Kumar, learned counsel appearing on behalf of the Central Government submitted that the impugned decision suffers from serious infirmities and exercise of writ jurisdiction was uncalled for. It was contended that the petition suffered from serious laches and should have been dismissed on the ground of delay. It was further submitted that the respondent-Company had no enforceable right based on Government Resolution providing for ex-gratia payment. The learned counsel submitted that the learned Judge could not have examined the correctness of the policy decision taken by the Central Government and directed that compensation as payable under the provisions of the Land, Acquisition Act on the basis of market value should have been paid. It was further submitted that the learned Judge was in error in holding that the doctrine of Promissory Estoppel is attracted to the facts and circumstances of the case. The reference to the principle -- legitimate expectation -- says, the learned counsel, has no application whatsoever and the trial Court could not have passed a money decree in exercise of writ jurisdiction. We find considerable merit in the submissions urged by the learned counsel.
Mr. K.G. Raghavan, learned counsel appearing on behalf of the company, on the other hand submitted that the Company had an enforceable right arising out of promise made by the Central Government by Resolution dated March 15, 1971. The learned counsel urged that the panel was set up in pursuance of the decision taken by the Inter-Ministerial meeting and the decision of the panel was only to implement the policy decision to make payment of 25% of the value of the properties and consequently it was not open for the Central Government to turn down the recommendation of the panel. Mr. Raghavan also submitted that finding of the learned trial Judge that the action of the Central Government is violative of Art. 14 of the Constitution is not required to be disturbed. The learned counsel did not dispute that there was delay in approaching the Court but submitted that on the facts and circumstances of the case, the delay is not fatal. It is not possible to accede to the submission urged on behalf of the respondents' counsel.
9. The contention urged on behalf of the appellant that the trial Judge should not have entertained the writ petition on the ground of laches, requires acceptance. The facts set out hereinabove clearly demonstrates that on May 1, 1973, the Custodian of Enemy Property passed an order of adjudication that the Company is entitled to ex-gratia payment of Rs. 3,15,463.82 p. The Company received the payment and thereafter started making representation demanding additional amount, within seven days of receipt of the amount. The panel set up by the Inter-Ministerial meeting recommended to the Central Government to pay the compensation of Rs.32,76,425/- on July 22, 1974. The Company immediately moved the Central Government and the request was turned down by the Central Government as the Finance Ministry declined to accept the recommendation. As mentioned herein-above, at least 9 representations were made between 1975 and 1986, and each representation was turned down by the Central Government. The last representation was turned down in January, 1987 and thereafter the petition was filed on April 16, 1987. The facts enumerated leaves no manner of doubt that the Company approached writ Court after considerable delay. Indeed Mr. Ragha-van on behalf of the Company did not dispute that the approach to the writ Court was after considerable laches. The petition does not refer to the cause for the delay nor explains why the delay should be condoned for grant of relief. Mr. Raghavan submitted that though the delay is not explained, the learned single Judge was entitled to ignore the delay and grant relief if the Company has suffered loss for no fault. It was also claimed that there is no rule that relief should not be granted on the ground of delay. The claim made by the Company was a pure money claim and the claim arose not out of an enforceable right but out of decision taken by the Central Government to give some relief to the people whose properties were forfeited by foreign Government. The Company knew very well from the year 1975 that the panel recommendation for additional payment is not acceptable to the Central Government and except making repeated representations, the Company did not think it wise to approach the Court. It is obvious that the petition suffered from serious laches and the Court should not have issued writ granting money decree in such situation. Mr. Raghavan realising the infirmity on this count made a submission that in answer to one representation, the Minister of Commerce by letter had informed that the matter is being examined. It was claimed that the letter made Company wait before approaching Court. The reliance on the letter of the Minister, copy of which is produced at Annexure-H to the petition, is misconceived.
The letter was addressed by the Minister to the Chairman of the Estimate Committee and who had sent a letter to the Minister on December 25, 1985 recommending the case of the company. It is different to appreciate how this letter found its way in the hands of the Company. The Minister seems To have written letter to the Chairman of the Estimate Committee out of politeness because long prior to 1986 at least eight representations of the Company were turned down by the Ministry. We are unable to accept the submission that letter of the Minister is enough to condone the delay. In our judgment, the learned single Judge was in error in entertaining the petition in spite of such unexplained and exorbitant delay.
Even though Mr. Shailendra Kumar did not agitate that the learned single Judge was in error in entertaining the petition by holding that this Court has jurisdiction, we must express our reservation on that aspect. We are not examining the issue of jurisdiction in greater depth, as the counsel for the appellant did not raise the contention but submitted that the claim in the petition should be disposed of on merits.
10. The entire claim in the petition is based on the panel decision dated July 22, 1974, and the Company claims an enforceable right from the decision of the panel. The perusal of paragraph 14 of the petition makes it clear that the Company desires the writ Court to pass money decree on the strength of the adjudication made by the panel. In our judgment, the claim is entirely misconceived and the action of the Central Government in rejecting the recommendation of the panel cannot be faulted with. The resolution dated March 15, 1971 sets out that an ad hoc interim relief in the form of ex-gratia grants from the Consolidated Fund of India at the rate of 25% of the verified claim will be made to Indian Companies whose properties were forfeited by Pakistan Government.
Mr. Raghavan very rightly conceded that the claim that enforceable right to demand 25% of the market value of the property cannot be spelt out from the resolution. The resolution prescribes that 25% of the value of the verified claims will be paid. The resolution nowhere sets out how the claim will be verified, but the return indicates that a decision was taken to pay 25% of the book value gathered from the balance-sheet of Indian Companies. The resolution sets out that the adjudication will be done by the Custodian of Enemy property for India, Bombay, and return filed on behalf of the respondents makes it clear that such ex-gratia payment on the basis of book value was made to 709 companies. The claim on behalf of the Central Government in this respect was not seriously disputed, but the learned trial Judge by passed this contention by observing that record in that respect was not produced. It is always open for the Central Government after taking a policy decision to determine the method of assessing the value of the property and that exercise was left to the custodian of Enemy Properties. The Custodian examined the claim of the respondent-Company and it is not in dispute that by order dated May 1, 1973, the claim on the basis of the book value of the property was granted. We are unable to appreciate how the company could have claimed and the learned Judge could have accepted that the Central Government is bound to determine the claim by taking into consideration the market value of the property. The company could not have made such a claim on the basis of any enforceable right and much less a writ of mandamus could be issued to the Central Government.
11. Mr. Raghavan submitted that the resolution dated March 15, 1971 did not refer to ascertaining the value by reference to the book value and therefore it was always open to the Company to claim that 25% of the market value should be paid. We are unable to accept this contention because the Central Government by policy decision, had decided that in regard to the claim made by the Indian Companies, the value will be ascertained by referring to the book value of the property. It Was not open for the learned trial Judge to hold that the balance-sheets of the Company do not reflect the true value and it was incumbent upon the Central Government to make ad hoc ex-gratia payment by taking into consideration the market value. It was not open for the trial Judge to decide how the policy should be implemented and enforced by the Central Government. It is not for the Courts to determine what is right and wrong in case of formation of policy and implementation of the same and unless implementation is in violation of any fundamental rights, it is not permissible to grant relief in the writ jurisdiction. In our judgment, the trial Judge was in error in holding that the value of property should be determined with reference to the market value and not the book value.
12. The learned trial Judge placed strong reliance upon the fact that the Inter-Ministerial meeting held on October 4, 1973 decided to set up a panel consisting of three members and chaired by the Custodian of Enemy property. The trial Judge extensively quoted from the minutes of the meeting and it reflects that the Chairman was agitating in the meeting that the compensation payable to the owners of Palace Hotel in Karachi and the Oberoi Hotels in Rawalpindi, Murree, Peshawar and Lahore, had to be viewed in the context of the ruling prices in 1965 and not on the basis of the book value. The Inter-Ministerial meeting which was convened to examine various representations received by the Central Government, decided to set up a panel and the record indicates that the panel considered only two claims i.e., the claim of the respondent-Company and the Oberoi Hotels. The minutes of the Inter-Ministerial Meeting cteraly recites that the Government should be requested to normally accept the recommendati6ns of the Committee. It is obvious that neither the Inter-Ministerial Meeting nor the Panel ever felt that their recommendations are binding on the Central Government.
The learned trial Judge proceed to issue writ of mandamus directing payment on the basis of the decision of the Panel and which, according to trial Judge, was binding on the Central Government and it was not open for the Ministry of Finance to reject the same. The assumption of the learned Judge on this ground is fallacious and overlooks system of Government and the Rules of business framed for discharging the work of the Government. The panel set up by the Inter-Ministerial meeting could only make recommendations and it was for the Finance Ministry to accept the same Or otherwise. As mentioned above, the Finance Ministry turned down the recommendation and in our judgment, for valid reasons. It is impossible to imagine how the respondent-Company can base an enforceable right from the recommendation of the Panel and which was rejected by the Central Government. The trial Judge overlooked that the resolution made on March 15, 1971 provides that the ex-gratia amount will be paid from the Consolidated Funds of India. The payment from the Consolidated Funds of India is not part of the budgetary provision and creates a charge in favour of the grantees. It is difficult to imagine how the panel set up by the Inter-Ministerial meeting consisting of Secretaries to Government, can take a decision for payment of huge ex-gratia amount and bind the Central Government to make payments out of the Consolidated Funds of India.
13. Mr. Raghavan, on behalf of the Company, submitted that the Inter-Ministerial Meeting and the Panel was merely implementing the policy determined by the Central Government by a resolution. In support of the submission that every decision need not be taken by the Ministry but can be decided by the Secretary, reliance was placed on paragraph 12 of the decision of the Supreme Court (A. Sanjeevi v. State of Madras). The Constitution has authorised the President of India under sub-Art. (iii) of Art. 77 to make rules for the more convenient transaction of the business of the Government and for allocation amongst Ministeries. It is undoubtedly true that most of the decisions are taken by the Secretaries and the Minister is not expected to burden himself with day-today administration. The primary duty of the Minister is to make policies of Government and the Secretary takes the decision as the delegate of the Minister. Mr. Raghavan had to concede that the rules of business nowhere permits the Inter-Ministerial Meeting or the Panel set up by such meeting, to adjudicate the claim and bind the Central Government to make payment out of the Consolidated Funds of India. Indeed, even the Inter-Ministerial Meeting and Panel set up by such Meeting did not feel that decision can be taken to bind the Central Government and that is why the recommendation of the Panel was forwarded to the Central Government for approval. The Central Government turned it down and consequently, it has shown that the claim that the decision of the panel is not open to rejection by the Central Government is not correct. In our judgment, the decision of the Panel had a serious consequence because the decision culls out a separate class of two companies only in centra-distinction with 709 companies which were paid the ex-gratia payment with reference to the book value. The Central Government was perfectly justified in turning down the determination of the Panel for the benefit of the respondent-Company.
14. Mr. Raghavan submitted that the Central Government was bound to honour the adjudication of the Panel on the doctrine of promissory estoppel. We are unable to appreciate how the doctrine of promissory estoppel comes into play on the facts and circumstances of the case. The Government of India had not given any promise on the basis of which the respondent-Company altered its position. The Government of India had only assured ex-gratia grant at the rate of 25% of the value of the properties forfeited. The assurance was that by determination of the value by the Custodian of Enemy Property the payment will be made and assurance was fulfilled by payment of the sum of Rupees 3,15,463.82 p., Mr. Raghavan submitted that it is not necessary for application of doctrine of promissory estoppel that the promisee must suffer any detriment or alter its position by reliance on the promise. The submission is not correct. In decision (M.P. Sugar Mills v. State of Uttar Pradesh), Mr. Justice Bhagwati, as he then was, while speaking for the Bench, observed :
"It is not necessary, in order to attract the applicability of the doctrine of promissory estoppel, that a promisee acting in reliance of the promise should suffer any detriment, what is necessary is only that a promisser should have altered his position in reliance on the promise."
Mr. Raghavan realising that to attract the applicability of the doctrine of promissory estoppel, it is necessary for the respondent-Company to establish that the Company altered position referred to the terms of the indemnity bond furnished by the Company at the time of receipt of the amount determined by the Custodian of Enemy Property. Mr. Raghavan submitted that the indemnity bond indicates that Company had undertaken not to negotiate directly or indirectly with the Government of Pakistan for the restoration of the properties forfeited or for payment of compensation. The learned Counsel urged that the bond also recites that the Custodian of the Enemy Property had agreed to pay ex gratia payment after preliminary verification, It was urged that the verification done by the Custodian of Enemy Property was preliminary and not final and as the Company had given undertaking not to negotiate with the Pakistan Government for restoration of properties, that should be considered as the act on the part of the company to alter its position. In our judgment, the submission is devoid of any merit. Though the bond refers to the expression 'preliminary verification', Mr. Raghavan could not dispute that nothing further was left to be done by the Custodian of Enemy property after passing the order dated May 1, 1973 determining the ex gratia amount of Rs. 3,15,463-82 p. Mere use of the expression 'preliminary verification' does not lead to the conclusion that the Custodian of Enemy Property was required to undertake any further exercise. The contention that the Company altered its position by undertaking not to negotiate with the Pakistan Government is also of no merit. The Government of India made ex gratia payment on clear undertaking that in case the properties were restored by the Pakistan Government, the said amount will be paid back by the company. We are unable to appreciate how by executing the Indemnity Bond while receiving the ex gratia payment the Company had altered its position on the strength of the promise made by the Central Government. In our judgment, in the first instance, there was no promise whatsoever and in any event, the doctrine of promissory estoppel is not attracted as the Company had not altered its position. The finding of the learned Judge on this aspect is not sustainable.
15. Mr. Raghavan then submitted that the order of the learned single Judge is not required to be disturbed because the action of the Central Government was violative of fundamental right guaranteed under Art. 14 of the Constitution. It was submitted that Panel set up by the Inter-Ministerial Meeting had considered the claim of the respondent-Company and also the claim made in respect of a property known as 'Bristol Hotel'. The learned Counsel submitted that whatever was recommended by the Panel in respect of the property of 'Bristol Hotel' was honoured by the Central Government and consequently, it was not permissible to turn down the recommendation in respect of the property of the respondent-Company. The counter filed on behalf of the respondent sets out that the claim in respect of the property of 'Bristol Hotel' was not on behalf of the Indian Company, but on behalf of the individual i.e., Smt. Parpati N. Jhadani. The counter sets out that Smt. Parpati N. Jhadani had half share in the property of 'Bristol Hotel' while the other half was held by a company. The returns further sets out that the Government of India decided to determine the ex gratia amount payable in respect of the properties of the Company by reference to the book value while in respect of individual it was with reference to the market value. Mr. Shailendra Kumar submitted that the respondent-Company cannot equate its claim with that of the individual co-owner of 'Bristol Hotel' property. We find considerable merit in the submission urged on behalf of the appellant and in our judgment, the trial Judge was in error in holding that the action of the Central Government was violative of Art. 14 of the Constitution. It hardly requires to be stated that if a certain principle is applied in respect of 709 companies, then complaint cannot be made that the Government had applied different principle in respect of the claims made by the individual. It is always open for the Central Government while taking a policy decision to determine the basis on which the value of the property will be determined. Several aspects dealing with financial implications are required to be taken into account by policy makers and different basis for determination of ex gratia payment to individuals on one hand and companies on other, cannot be faulted. Even assuming that the action of the Central Government in making payment to the individual owner of the 'Bristol Hotel', on the basis of market value was not proper, still that will not give right to the respondent-Company to claim that same principle should be applied in respect of the respondent-Company. One wrong cannot entitle any one to claim that Court shall issue a writ of mandamus to the Government to commit the same error. In our Judgment, application of Art. 14 of the Constitution, to sustain the claim of the respondent-company is totally erroneous. In our Judgment, the trial Judge was in error in granting the relief sought by the Company by holding that on merits, the Company was entitled to the amount demanded.
16. As mentioned hereinabove. the learned Judge proceeded to sustain the relief claimed by the Company also with reference to the doctrine of legitimate expectation. Mr. Raghavan very frankly stated that the Company had not pleaded any such doctrine in the petition. Mr. Raghavan also did not support the judgment on the basis of the principle of legitimate expectation. We do not share various observations made by the learned Judge in the impugned judgment in respect of the applicability of the principle of legitimate expectation. A reference may be usefully made to the decision of the Supreme Court (Union of India v. Hindustan Development Corporation). The Supreme Court held that the denial of claim on the basis of the legitimate expectation does not by itself confer an absolute right to claim relief. It was further observed that grant of relief should be limited only to a case of denial of claim, nor denial of any right and when the decision is unreasonable, not in public interest and inconsistent with the principles of natural justice. In our Judgment, none of these considerations are applicable to the facts and circumstances of the present case and the learned trial Judge was in error in invoking this principle, which was even not pleaded by respondent-Company. In our judgment, the impugned Judgment cannot be sustained and is required to be set aside.
17. Accordingly, appeal is allowed and the impugned judgment dated Dec. 5, 1990 delivered by the learned single Judge in Writ Petition No. 7717 of 1987 is set aside and the petition stands dismissed.
The respondent-Company shall pay the costs of the appellant throughout.
18. Appeal allowed.