Karnataka High Court
K.S. Prakash vs Bangalore Development Authority on 20 September, 1990
Equivalent citations: ILR1990KAR3599, 1990(3)KARLJ245
ORDER Balakrishna, J.
1. The Writ Petition is for declaration that the allotment of site made by the Bangalore Development Authority (the B.D.A.) in favour of M/s Seethalakshmi Hall Flour Mills Limited, Bangalore, consisting of marginal land adjoining site No. 17/B of Industrial Suburb, II Stage, Rajajinagar, Bangalore, as null and void ab initio and also vitiated by mala fides and further for quashing of endorsement dated 13-2-1987 vide Annexure-Q. The petitioner has also sought for a Mandamus to the B.D.A. directing the B.D.A. to put the petitioner in possession of the marginal land aforementioned in accordance with the communication of allotment dated 18-7-1967.
2. The father of the petitioner since deceased by name K. Srinivasalu was allotted an industrial site bearing No. 17/B situate in Industrial Suburb, II Stage, Rajajinagar, Bangalore, measuring 252+243 236+300 ________ x _______ 2 2 by the erstwhile City Improvement Trust Board, Bangalore, on 16-9-1962. Possession was taken on 23-2-1963 and subsequently the marginal land adjacent to the site allotted also came to be allotted in favour of K. Srinivasalu in accordance with the Resolution of the erstwhile C.I.T.B. passed in subject No. 202 dated 7-7-1967 at the rate of Rs. 8-50 per square yard for a total amount of Rs. 1,06,240/-. The marginal land in two bits measured 256+116 X 550 and 160 X 60+0
------ ----
2 2and allotment was communicated to K. Srinivasalu on 13-7-1967. A sum of Rs. 20,000/- was paid by the allottee by cheque dated 24-7-1967 to the C.I.T.B. towards the value of the marginal land allotted. This payment was acknowledged by the C.I.T.B. by letter dated 31-10-1967/3-11-1967. The allottee requested for extension of time for payment of the balance amount since he could not pay the entire amount forthwith on account of his financial position at that time. Extension of time was sought on 11-5-1970 and time was granted for 90 days for payment of the balance amount since he could not pay the entire amount forthwith on account of his financial position at that time. Extension of time was sought on 11-5-1970 and ti me was granted for 90 days for payment of the balance under intimation issued on 13-5-1971. But on 26-12-1970, K. Srinivasalu passed away leaving behind a large family and also huge commitments. After the death of the allottee, the eldest son who is the petitioner applied to the C.I.T.B. on 22-9-1973 for transfer of the marginal land to his name agreeing to pay the balance sital value which was due to the C.I.T.B. The C.I.T.B. by its letter dated 22-9-1973 called upon the petitioner to produce the Death Certificate of the petitioner's father, joint affidavit and an indemnity bond of the other heirs for taking further action. On 10-10-1973, the petitioner furnished the Death Certificate and on 20-12-1973 submitted the joint affidavit and the indemnity bond as required by the C.I.T.B. By letter dated 22-4-1974, the C.I.T.B. informed the petitioner that a balance amount of Rs. 81,151/- was due towards the value of the marginal land-allotted to the petitioner's father and asked for payment of the same together with interest of 9% per annum before 30-4-1974. The petitioner requested for time for payment, till 30-5-1974. On 15-5-1974, he paid Rs. 90,000/- to the C.I.T.B. and he was asked to pay the balance of Rs. 38,744/- before 5-6-1974 and, on the petitioner seeking time for payment, was granted time till 8-7-1974. On that date, the petitioner paid Rs. 35,000/- by cheque and for payment of the balance amount again requested for time. Thereafter, the petitioner paid the entire balance amount due in full settlement of the arrears and intimated the same to respondent-1 by letter dated 16-8-1974 and also requested for condonation of delay in payment. The C.I.T.B. condoned the delay and accepted the amount with interest on belated payments. Thus, on 16-8-1974, the petitioner had cleared all the arrears of the amount payable towards the value of the marginal land together with interest on the belated payments. The petitioner expected that he would be granted Possession Certificate and that the khatha would be transferred to his name. But till 1976, no action was taken oy the C.I.T.B. after having collected the total sum of Rs. 1,48,744/- as the full value of the marginal site with interest.
3. The petitioner made hectic efforts by personally meeting the officials of the C.I.T.B. requesting for possession of the marginal land. But there was no response. Out of sheer desperation and frustration, the petitioner wrote to the authority on 8-3-1976 asking them to at least refund the amount. The letter was referred by the C.I.T.B. for legal opinion to its Law Officer who gave an opinion on 2-9-1976 that refund cannot be granted since there was no provision for claim of refund. On 12-7-1977, the petitioner personally met the Chairman of the B.D.A. B.T. Somanna (respondent-3) and stated his difficulties. Respondent-3 after due consideration of the full payment made by the petitioner of the arrears with interest and also in view of the non-refundability of the amount received by the C.I.T.B. (succeeded by the B.D.A) issued instruction to the officials to grant Possession Certificate to the petitioner and the instruction was noted in the order-sheet of the concerned file. Thus, there was no refund of the amount paid for the marginal land but there was an instruction by the Chairman to the concerned officials for grant of Possession Certificate to the petitioner. In other words, the request for refund was rejected in sum and substance, according to the petitioner.
4. Inspite of the instruction given by respondent No. 3, no action was taken by the concerned authorities to put the petitioner in possession of the marginal land and, therefore, the petitioner was compelled to issue a legal notice to the 3.D.A. on 21-1-1981 demanding possession of the marginal land. This was followed up by several personal visits of the petitioner to the office of respondent-1 personally submitting the representations seeking possession of the land. According to the petitioner, representations were submitted by him personally to the B.D.A. between 1982 and 1986 on 27-8-1982, 24-6-1983, 3-12-1983, 26-8-1984, 20-2-1905, 17-10-1985 and 3-4-1988 copies of which are Annexures 'G' to 'N'. It is stated that every time the petitioner personally met the Chairman and other officials of the B.D.A., they used to assure that necessary action would be taken in the matter. But since the assurances were not kept up, the petitioner again issued a legal notice dated 29-1-1987 to the B.D.A. a copy of which is Annexure-P demanding possession. It is stated that, for the first time, a letter was issued by the B.D.A. dated 13-2-1987 that the marginal land earlier allotted to the petitioner has already been allotted and Possession Certificate issued to respondent-2 on 25-7-1983 and, therefore, the land is not available to the petitioner. Thereafter, the petitioner personally visited the office of respondent-1 and came to know certain facts which, according to the petitioner, were shocking. It is alleged by the petitioner that by taking undue advantage of the letter dated 8-3-1976 for refund of the amount that had been paid, the letter being on the file of the B.D.A., respondent-3 just before 2 or 3 days prior to his resignation to the post of Chairman of the B.D.A., with the connivance of the subordinate officials of the B.D.A. including the erstwhile Secretary, contrived to have a note put up by the then Secretary on 18-1-1980 approved the note through the Secretary on 18-1-1980 accepting the request for surrender of marginal land from the petitioner and approving the allotment of the same to respondent-2, at the same time issuing an endorsement to respondent-2 on 19-1-1980 intimating the allotment in its favour. It is also alleged that the said endorsement dated 19-1-1980 was actually received by one Ramaprabhu, the Manager of respondent-2 in person in the office of the B.D.A. on the very same day i.e., 19-1-1980. The allegation is that there was a conspiracy and collusion to deprive the petitioner of the marginal land by questionable means in order to benefit respondent-2 for collateral consideration. On 20-1-1980, respondent-3 resigned from the post of Chairman of the B.D.A. which Is one or two days subsequent to the allotment of the marginal land to respondent-2 under the authority of respondent-3. According to the petitioner, all this happened by fraudulent means without regard for law and fair administrative procedure. It seems the petitioner was not aware of this allotment to respondent-2 until he was officially intimated of the same by the B.D.A. on 13-2-1987 vide Annexure-Q. Thereafter the petitioner by letter dated 16-2-1987 requested for a copy of the allotment order made in favour of respondent-2, but no copy was furnished to the petitioner and, therefore, the petitioner has sought exemption from production of the same. In para-5 of the Writ Petition, the petitioner has imputed corruption to respondent-3 and has sought to substantiate the same by narrating what had transpired in respect of sale of a portion of the land in site No. 17/B in 1971. It is alleged that illegal gratification was demanded by respondent-3 to the tune of Rs. 30,000/- to drop the show cause notice which had been issued to both respondent-2 and the petitioner threatening cancellation of allotment of site No. 17/B. It appears that the petitioner declined to pay illegal gratification. But ultimately the proposed action was dropped by respondent-3 by allegedly accepting considerable amount of bribe from respon-dent-2. It is further alleged that after this transaction, respondents-2 and 3 were in hand in gloves in depriving the petitioner of the marginal land adjacent to site No. 17/B and in allotting the same to respondent No. 2.
5. A detailed statement of objections has been filed on behalf of respondent-2. The main points arising out of the statement of objections are that the petitioner has no legal right or any ground to justify allotment of marginal land to him in preference to respondent-2 particularly in view of the fact that respondent-2 has an industry located in site No. 17-8 whereas the petitioner does not have any interest in site No.17-B and does not run any industry therein. It appears that the father of the petitioner felt that site No. 17-B would not be adequate to meet the needs of the industry run in the name and style of Seethalakshmi Hall Flour Mills and, therefore, applied to the C.I.T.B. for allotment of adjacent land in question in 1967 and that he was allotted the marginal land on 7-7-1967 and the same was intimated to him. Later on the Firm was converted into a limited company called Seethalakshmi Hall Flour Mills (Private) Limited in the month of May 1970 and K. Srinivasalu was incharge of the management of the Company. It is stated that the Flour Mill and its assets became the property of the limited Company on 1-5-1970 and on 26-12-1970 K. Srinivasalu passed away.
Consequent to the death of the petitioner's father, the members of his family including the petitioner transferred all their share holding including that of K. Srinivasalu to the persons who are presently in management of the Company and who acquired the same for value. It is stated that this happened in October 1971 and that the family of late K. Srinivasalu ceased to be in management of the company as well as the Flour Mills since then. It is stated that subsequent to the death of K. Srinivasalu, the petitioner made efforts to have the marginal land allotted to himself and paid the original allotment price, in instalments. It is alleged that the petitioner ran into rough weather in the matter of securing possession of the site because the site was not intended to be given independently of the industry for the benefit of which the site had been allotted, according to respondent-2. It was after realising this that the petitioner applied on 8-3-1976 for refund of the money paid by him in 1967 and it is also alleged that there was a partition of assets among the heirs of K. Srinivasalu and that this marginal land was not treated as a partible asset as would be apparent from the partition effected vide the decree passed in partition suit number O.S.2459 of 1982. It is stated that, on the strength of the case of respondent-2 that it was already running an industry in site No. 17-B and that the marginal land was necessary for the purpose of industry that the B.D.A. conceded the request of respondent-2 by calling upon respondent-2 to pay the allotment price and the same was paid on 21-1-1980 and that respondent-2 was put in possession of the marginal land and further a lease-cum-sale agreement was executed in favour of respondent-2 by the B.D.A. on 22-5-1983, Thus, it is said that respondent-2 has been put in possession of the land in question. It is also stated that by making a necessary application under Section 20 of the Urban Land (Ceiling and Regulation) Act, respondent-2 obtained exemption from the State Government on the holding of respondent-2 on 24-4-1983. It is further stated that in the marginal land, two bore wells have been sunk and the area has been enclosed by a compound and also that an effluent treatment plant is shortly to be taken up by respondent-2 in the said land to meet the requirements of the Karnataka Board for Prevention and Control of Pollution and that respondent-2 also has a S.S.I. certificate for setting up a cattle feed plant ia the marginal land.
6. Respondent-2 has stated that the Writ Petition is highly belated and deserves to be dismissed for delay and laches.
7. Respondent-2 has denied payment of illegal gratification to respondent-3 and the other allegations made thereunder. The allegation of conspiracy, collusion and fraud has been categorically denied. All the allegations which have been made detrimental to the interest and rights of respondent-2 have been specifically denied. It is stated that the allotment made to respondents is neither null and void nor vitiated by mala fides and ulterior motive. Respondent-2 has produced Annexures-1 to 6 in support of the statement of objections.
8. On behalf of respondent-3, statement of objection has been filed denying the allegations of acceptance of illegal gratification by respondent-3, fraud, mala fides and abuse of power. It is stated that there is absolutely no basis for the defamatory insinuations made against respondent-3. It is also stated that respondent-3 is not a necessary or a proper party since no relief is sought against respondent-3. All the allegations made against respondent-3 have been specifically denied and it is stated that respondent-3 while he was in office discharged his duties in good faith and to the best of his ability and that he has exercised his authority in accordance with the provisions of the B.D.A. Act and the Rules.
9. Sri L.G. Havanur, learned Counsel, appearing for the petitioner contended that the petitioner is vested with a legal right to be put in possession of the marginal land by respondent-1 under a statutory and legal obligation since the petitioner has paid and respondent-1 has received the total sum of Rs. 1,48,744/-by the end of August, 1974 towards the full value of the marginal land in question together with interest paid on belated payments.
10. The second contention is that respondent-3 as the Chairman of the B.D.A. had no power or jurisdiction to accept the alleged surrender offered under Annexure-F dated 8-3-1976 for refund of the amount paid since this offer of the petitioner had been despised and repudiated by the B.D.A. after obtaining the legal opinion of the Law Officer of the B.D.A. dated 2-9-1976. It is contended that respondent-3 revealed during the discussions with the petitioner in person in the chambers of respondent-3 on 12-7-1977 that the legal opinion and decision of the Board not to accept the request for refund had been decided upon and that necessary instructions had been issued by respondent-3 to the subordinate officials asking them to put the petitioner in possession of the marginal land and, therefore, the letter under Annexure-F having been rejected earlier was not operative and could not be acted upon subsequently after a lapse of four years with the ulterior motive of handing over the site to respondent-2 at his instance. Elaborating the argument, it was contended that on the date when the impugned order was passed by respondent-3 on 13/19-1-1980, the offer for surrender of the site and the request for refund was no longer in existence and, therefore, the alleged acceptance of surrender is not only mala fide, but also fraudulent aimed at favouring respondent-2 by accepting illegal gratification from respondent-2. It is pointed out that respondent-3 appears to have taken the application from respondent-2 by ante dating it as 2-11-1979. It is contended that the power to consider and accept surrender of site is vested only in the Board constituted under the B.D.A. Act and the Chairman has no power to do so. Similarly, it is contended that the allotment can be made in favour of respondent-2 only by the Board and not by the Chairman of the B.D.A. and, therefore, the allotment of marginal land to respondent-2 is ultra vires the B.D.A. Act and the Rules.
11. It is next contended that having regard to the circumstances in which hastily the application of respondent-2 was taken by respondent-3 in person and an allotment order passed in favour of respondent-2 in post haste with delivery of the allotment order on the same day in person to respondent-2, substantiate the imputation of fraud in the entire transaction. Objection has been taken to the conduct of respondents-1 and 3 on the failure to inform the fact of allotment of the marginal site to respondent-2 prior to the date of knowledge of the petitioner who came to know of it by his own efforts. Emphasis is laid on the fact that for the first time respondent-1 refused to put the petitioner in possession of the marginal land by issuing a letter under Annexure-Q dated 13-2-1987.
12. The learned Counsel for the petitioner laid emphasis on the fact that respondent-3 ceased to be a Chairman on 7-1-1980 when the party in power came down and the succeeding Chief Minister demanded resignation of all Chairmen of various bodies including respondent-3 on 12-1-1980 and that, therefore, respondent-3 being in office at the pleasure of the Government, ceased to hold office forthwith and he had no power to function as the Chairman of the B.D.A. since he had become functus officio. It is, therefore, submitted that whatever action was taken by respondent-3 subsequent to his becoming functus officio is totally void ab initio and that respondent-3 had acted mala fide without power. My attention was also drawn to the fact that there was no counter by the B.D.A. even though serious allegations had been levelled against both the 1st and 3rd respondents. It was further contended that the execution of lease-cum-sale agreement by the Secretary, B.D.A. on behalf of the B.D.A. in favour of respondent-2 is in violation of Section. 10(6) read with Section 10(3) of the B.D.A. Act. Lastly it was contended that there was a gross violation of the rules of natural justice inasmuch as no notice was given to the petitioner before cancellation of the existing allotment.
13. The question for consideration is whether, in the facts and circumstances of the case, the allotment made in favour of respondent-2 deserves to be quashed and whether respondent-1 should be directed to put the petitioner in possession of the land in question.
14. Sri R.S. Hegde, the learned Standing Counsel for the B.D.A. made available all the original records relating to the controversy. While considering the rival contentions of the parties to this Writ Petition, it would be appropriate and relevant to refer to some of the notes, minutes and instructions found in the original records made by the Chairman and other officials of the B.D.A.
15. It is seen from the records that site No. 178 being an industrial site was allotted to one K. Srinivasalu since deceased, and the father of the petitioner, on 16-9-1962. Possession Certificate was issued and possession was taken by him on 23-2-1963. In accordance with the resolution passed by the erstwhile C.I.T.B. in Resolution No. 202, the marginal land adjacent to site No. 17B was allotted to K. Srinivasalu at the rate of Rs. 8.50 per square yard, the total value being Rs. 1,06,240/-. The land was allotted in two bits measuring 256'+116' X 550 and 160' X 60+0
-------- ----
2 2The letter of allotment was issued on 18-7-1967 and on 24-7-1967 the C.I.T.B. acknowledged receipt of Rs. 20,000/- from the allottee. K. Srinivasalu demised on 26-12-1970 and the petitioner who is the eldest son of the deceased addressed a letter to the C.I.T.B. requesting for transfer of the site (the marginal land) to his name seeking permission to pay the balance amount. A letter was received from the C.I.T.B, by the petitioner calling upon him to produce the Death Certificate, a joint affidavit and indemnity bond from the legal representatives for taking necessary action and the Death Certificate was produced by the petitioner on 10-10-1973 and he also furnished the joint affidavit and indemnity bond on 20-12-1973. Later on the C.I.T.B. asked the petitioner by its letter dated 22-4-1974 to pay a sum of Rs. 81,151/- together with interest at the rate of 9% per annum on or before 30-4-1974. Thereupon the petitioner requested for time and paid a sum of Rs. 90,000/- on 16-5-1974. The C.I.T.8. demanded payment of the balance amount of Rs. 38,744/- on or before 5-6-1974. Extension of time was sought by the petitioner and time was granted for payment till 8-7-1974 on which date the petitioner paid a sum of Rs. 35,000/- requesting for further extension of time to pay the balance and thereafter on 16-8-1974 the petitioner paid the balance and thus the full amount of Rs. 1,48,744/- was paid with interest on belated payments. It is interesting to note that no action was taken by the C.I.T.B. to put the petitioner in possession of the site till February 1976 even though the petitioner had paid the full value of the site.
16. On 8-3-1976 the petitioner addressed to letter under Annexure-F to the B.D.A. which succeeded the C.I.T.B. requesting for refund of the amount for the reasons stated in the said letter. On 2-9-1976 the aforesaid letter of the petitioner was referred by the B.D.A. to its Law Officer who gave his opinion that refund cannot be claimed by the petitioner and that surrender cannot be accepted since there is no provision in the Rules of Allotment of 1972. At this stage it appears that the Chairman B.T. Somanna respondent-3 herein told the petitioner when he met the Chairman personally that refund cannot be granted in the light of the legal opinion and he asked the petitioner to give another letter withdrawing Annexure-F. On 3-7-1977, the petitioner gave a letter withdrawing his earlier letter under Annexure-F acting on the advice of the Chairman. Again on 12-7-1977 the petitioner personally met the Chairman in his chamber and discussed the matter whereupon the Chairman issued instructions to the Executive Engineer of the B.D.A. to issue the Possession Certificate to the petitioner. It is seen from the concerned file that the Executive Engineer has recorded the instructions issued by the Chairman. However, no Possession Certificate was issued to the petitioner.
17. There was another development earlier in the year 1971. On 6-12-1971, a portion of the site including flour mills was sold to respondent-2 by the petitioner and other legal representatives. On 29-6-1979, the Chairman of the B.D.A. issued a show cause notice to the petitioner and respondent-2 proposing to resume site No. 178 along with the buildings thereon for alleged violation of the conditions of the allotment agreement to which a reply was issued by the petitioner on 1-9-1979 and respondent-2 also sent his reply.
18. The Chairman passed an order on 20-11-1979 approving the bifurcation of the entire plot i.e., site No. 17B and the marginal land and for grant of sale deeds to the respective parties after transmitting the file to the Town Planning Member. It is seen from the, file of the B.D.A. that a note was put up by the Secretary of the B.D.A. on 13-1-1980 that the entire amount had been paid by the petitioner for the marginal land in question and only Possession Certificate remained to be issued. A letter of the petitioner requesting for surrender of the marginal land, as could be seen from the records of the B.D.A. was not accepted by the Board. On 16-1-1980, in implementation of the resolution of the Board in subject No. 654 bifurcating both the sites in accordance with the order of the Chairman passed on 20-11-1979 and for issue of sale deeds to the petitioner and respondent-2 was passed. On 18-1-1980, a note was put up by the Secretary at the instance of respondent-3 that the petitioner had requested for surrender of the marginal land and that his request may be approved and the marginal land i n question be allotted to respondent-2 after accepting the surrender. The Secretary put up the note for orders of the Chairman and the Chairman, in turn, wrote on the file on 18-1-1980 as follows:-
"The above noting is approved."
On the very next day i.e. on 19-1-1980 a letter was issued to respondent-2 allotting the marginal land i.e. the land in question and this letter was received by one Rama Prabhu on behalf of respondent-2 on 19-1-1980 personally in the office of the B.D.A. On 20-1-1980 the Chairman B.T. Somanna resigned from office and that happened on a Sunday. On 21-1-1980, respondent-2 paid the amount in consideration of the allotment and on the same day a new Chairman was appointed.
19. These events have factual basis and hardly admit any controversy. From the facts stated above and out of the sequence of events, it is to be seen that the petitioner made fall payment of a sum of Rs. 1,48,744/- together with interest on belated payments by clearing all the arrears on 16-8-1974. The fact that the said amount was received by the C.I.T.B. stands confirmed. However, the C.I.T.B. did not take necessary steps to put the petitioner in possession of the site till February 1976 inspite of having received the full value of the site. Perhaps out of frustration and an unduly long wait, the petitioner gave a letter on 3-3-1976 under Annexure-F for refund of the entire amount. After the Law Officer of the B.D.A, gave his opinion that refund is impermissible, it is evident that the Chairman of the B.D.A. advised the petitioner to withdraw his letter seeking refund and instead to give another letter for grant of Possession Certificate. Acting on the assurance of the Chairman of the B.D.A. the petitioner gave another letter withdrawing Annexure-F and at the same time, the Chairman of the B.D.A. on 12-7-1977 instructed the Executive Engineer, B.D.A., to issue Possession Certificate to the petitioner and the Executive Engineer recorded the instructions of the Chairman on file. However, it was not acted upon and no Possession Certificate was issued to the petitioner though instruction was issued by the Chairman on 12-7-1977 for issue of Possession Certificate to the petitioner. The B.D.A. went on dragging its feet in the matter. Suddenly emerged a new development. On 13-1-1980 when a note was put up by the Secretary, B.D.A., drawing his attention to the fact that the petitioner had paid the entire amount for the marginal land in question and only Possession Certificate remained to be issued and that the letter of the petitioner requesting for surrender of marginal land had not been accepted by the C.I.T.B. when the petitioner had made an application offering surrender of the land and seeking refund of the amount as far back as 8-3-1976 since possession was not given to him. This note resulted in a Board resolution in subject No. 654 approving bifurcation of both the sites in accordance with the order of the Chairman because the Chairman on 20-11-1979 had passed an order approving, bifurcation of the entire plot i.e. site No. 17B and the marginal land and directed that sale deeds be granted to the respective parties. It is on the basis of this order that the Secretary, B.D.A., put up a note on 13-1-1980 bringing to the notice of the Chairman that the letter of the petitioner seeking refund of the amount and offering surrender of the marginal land was not accepted by the Board and that the entire amount in respect of the marginal land had been paid by the petitioner and what remained was only grant of Possession Certificate to him. On 16-1-1980 Resolution in subject No. 654 as pointed out earlier approving bifurcation of both the sites in accordance with the order of the Chairman passed on 20-11-1979 and for issue of sale deeds to the petitioner and respondent-2 respectively came into existence. Since the Chairman of the B.D.A. himself had advised the petitioner to withdraw his letter seeking refund of the money and surrender of the land on 8-3-1976, the Chairman of the B.D.A. had acted consistent with his own advice after the petitioner withdrew the letter by directing though 3 years later that the marginal land should be put in possession of the petitioner which was also approved by a Board resolution in subject No. 654. In these circumstances, the reasonable expectation was that the B.D.A. would honour its commitment and fulfil the promise held out by the Chairman not only by his own order, but also by the Board resolution in subject No. 654, in the matter of issue of Possession Certificate to the petitioner. However, that was not to be. All of a sudden on 13-1-1980, the Secretary's note surfaced at the instance of respondent-3 to the effect that the petitioner had requested for surrender of the marginal land and that his request may be approved and further the marginal land instead be allotted to respondent-2 after accepting surrender from the petitioner. On the very same day (18-1-1980) the Chairman passed an order approving the note put up by the Secretary and an order was issued on 19-1-1980 in favour of respondent-2, in post haste, diverting the marginal land in question to respondent-2 from the petitioner and on the very next day the Chairman resigned office. This turn about of the Chairman on a note put up by the Secretary, B.D.A., at the instance of respondent-2, on the face of it, appears to be not only unjustified but also unethical. The conduct of the Chairman cannot be described as either reasonable or fair. The very Chairman who persuaded the petitioner to withdraw the surrender as far back as 2-9-1976 and passed an order directing the Executive Engineer to put the petitioner in possession of the marginal land after the petitioner withdrew the letter of surrender, changed his mind by beating a retreat without any lawful justification and accorded approval on 18-1-1980 reversing the whole process by being instrumental in the allotment of the land in question to respondent-2 in haste and for reasons best known to him on 19-1-1980 just 8 day before he tendered his resignation to the post of the Chairman. The conduct of the Chairman in this regard cannot but be reprehensible and the facts speak for themselves. What transpired at the stage and what prompted the Chairman to pass an order which, in my opinion, rests in the realm of speculation and it is not necessary for me to delve into the mind of the Chairman as I am reminded of the famous dictum that the intention of a man cannot be judged because devil himself does not know what is in the mind of man. There can be no doubt about the fact that the circumstances in which the reversal took place is fishy to say the least. It is also seen that on 21-1-1980 when B.T. Somanna resigned from office, his successor was appointed. There is no satisfactory explanation as to why the matter should not have been left to the discretion of the succeeding Chairman in preference to a questionable act of preemption. Fair administrative procedure was thrown to the winds. Norms which should guide the action of a public authority discharging public duties were abandoned. Power was misused and the petitioner became the victim. Looking into these facts and circumstances, it is impossible to reconcile the legitimacy of the order passed by the B.D.A. allotting the site to respondent-2 instead of granting Possession Certificate to the petitioner who had done all that could have been done reasonably and in accordance with the legal requirements for grant of Possession Certificate.
20. The question of acceptance of a dead letter vide Annexure-F could not have arisen for consideration at all because that letter was withdrawn by the petitioner on 3-7-1977 by addressing another letter to the Chairman seeking grant of Possession Certificate. Annexure-F which is the letter that was given by the petitioner on 8-3-1976 had died its natural death particularly after it was withdrawn by the petitioner and in its place a fresh letter was given to the Chairman asking for possession and more particularly after the Chairman gave instructions on 12-7-1977 to the Executive Engineer to issue the Possession Certificate to the petitioner. In this regard, I cannot disbelieve the instructions noted by the Executive Engineer in the relevant file as issued by the Chairman. Instructions were issued by the Chairman on 12-7-1977 and they found place in the records on 13-7-1977 as recorded by the Executive Engineer himself. The necessary, natural and proper consequence should have been the grant of Possession Certificate to the petitioner. But for reasons best known to the Chairman and the Executive Engineer, the order for grant of Possession Certificate did not see the light of the day. Between 12-7-1977 and 18-1-1980, a considerable time elapsed. During this period, another event took place which cannot be lost sight of. A portion of the site including the flour mills existing on site No. 178 was sold to respondent-2 by the petitioner and other legal representatives to which exception was taken by the Chairman who issued a show cause notice on 29-6-1979 both to the petitioner and respondent-2 threatening to resume site No. 178 along with the building on the ground that the conditions of allotment agreement had been violated and, on receipt of a reply dated 1-9-1979 by the petitioner and respondent-2, the Chairman being satisfied with the explanation offered, passed an order on 20-11-1979 approving the bifurcation of the entire plot i.e., site No. 173 and the marginal land and directed issue of sale deeds to the petitioner and to respondent-2 respectively, after having transmitted the file to the Town Planning Member. On 13-1-1980, even though a note was put up by the Secretary that the petitioner had paid the entire amount in respect of the marginal land and only Possession Certificate remained to be issued and he drew the attention of the Chairman that the letter of surrender had been rejected by the Board already, and notwithstanding the Board's resolution in subject No. 654 approving the order passed by the Chairman dated 20-11-1979, there is no reason why the Chairman did not stick to his earlier direction dated 12-7-1977 when he had directed the Executive Engineer to issue a Possession Certificate to the petitioner. Consistency In the conduct of the Chairman is conspicuously non-existent and too glaring to be ignored. How the same Secretary put up a different note on 18-1-1980 within a matter of five days contrary to the earlier note dated 13-1-1980, is also open to question. Whereas on 13-1-1980 the Secretary indicated indirectly the right of the petitioner to be put in possession, on 18-1-1980 the very Secretary virtually coaxed the Chairman to accept the surrender of land when the letter of surrender was no longer in existence consequent to its withdrawal on 3-7-1977, and for approval of allotment of the marginal land to respondent-2 is shocking indeed and even more shocking is the conduct of the Chairman in approving the note of the Secretary put up on 18-1-1980 and ordering allotment in favour of respondent-2 on the very next day before tendering his resignation to the post of Chairman a day later, on a Sunday.
21. We are concerned with the legality of the denial of Possession Certificate to the petitioner apart from the legality and fairness of allotment of the very same land to respondent-2. I have no doubt in my mind that the conduct of the Chairman in the facts and circumstances of the case permits any scope for the assumption, is beyond reproach.
22. Apart from the unilateral action taken by the Chairman during the dying minutes of his office, the question arises as to why a reasonable opportunity of hearing was not afforded to the petitioner before a decision was taken to reverse the earlier order and to make a fresh allotment in favour of respondent-2. The principles of natural justice enter the scene here. Fairplay requires that the petitioner who would suffer civil consequences of revocation of the earlier order of allotment and a decision for making a fresh allotment to respondent-2 should have been permitted to make his representation to substantiate his case for grant of Possession Certificate in the context of the earlier decision taken in the matter by the B.D.A. Denial of this opportunity amounts to a flagrant violation of the Rule of Law and is further accentuated by the failure of a public authority in the performance of its statutory functions. There is no room for arbitrariness in a matter of this nature where substantive rights of the parties are involved. 1 am of the opinion that denial of Possession Certificate to the petitioner is illegal and irrational and the allotment of the marginal land in question to respondent-2 is illegal, arbitrary and capricious.
23. The principle of promissory estoppel is attracted to the facts of this case. Having accepted the withdrawal of the letter of surrender, having received the monetary consideration together with penal interest for delayed payment from the petitioner for the allotment of the land, having issued a direction for issue of Possession Certificate to the petitioner, it is not open to the B.D.A. to go behind its own decision irrespective of the question whether the petitioner has or has not suffered any detriment in the process by denial of Possession Certificate, and by allotment of the land in question to respondent-2. I am of the opinion that the principle of promissory estoppel comes to the aid of the petitioner. It is significant that before a fresh allotment was made in favour of respondent-2, there was no order of cancellation of the allotment earlier made. The petitioner is justified in entertaining a legitimate expectation that the B.D.A. would honour its commitment and assurance and grant Possession Certificate to the petitioner.
24. The contentions to the contrary advanced on behalf of the respondents do not stand to reason. It is unnecessary to go into the other contentions urged by the respondents questioning the right of the petitioner to Possession Certificate on the ground that the original allotment order was passed in favour of K. Srinivasalu and that the firm underwent a constitutional change subsequent to partition in the family ultimately resulting in the formation of a Company and transfer of interest to the Company. These are matters which are best left out of consideration for the purpose of determining the specific points in issue in this Writ Petition. In my opinion, the contentions raised on behalf of the respondents deserve to be relegated to the back-ground since they are not relevant to the points in issue.
25. Another point which requires consideration is the validity of the execution of an agreement by the Secretary of the B.D.A. on behalf of the B.D.A. in favour of respondent-2. According to Section 10(6) of the Bangalore Development Authority Act, 1973 "a contract not made or executed as provided in this Section and the Rules made thereunder shall be null and void and shall not be binding on the Authority." According to Section 10(3) of the Act, it is mandatory that every contract or agreement on behalf of the Authority other than a contract or agreement referred to in Sub-section (1) of Section 10 shall be in writing and shall be signed by the Commissioner and sealed with the common seal of the Authority.
26. In the instant case, the agreement has been executed by the Secretary for B.D.A. and not by the Commissioner. I am of the opinion that there is a violation of statutory mandate contained in Sub-section (3) of Section 10 of the Act and, therefore, the agreement executed by the Secretary for B.D.A. in favour of respondent-2 is vitiated as provided under Sub-section (6) of Section 10 of the Act.
27. Another relevant point for consideration is whether the impugned order of allotment in favour of respondent-2 is sustainable without a resolution of the Board and particularly in view of the existence of an earlier resolution of the Board passed on 16-1-1980 in subject No. 654 approving the order of the Chairman for issue of sale deed in favour of the petitioner after bifurcation of the entire plot consisting of site No. 17B and the marginal land. This Board's resolution remains undisturbed. Since this resolution has not been rescinded by any subsequent Board resolution before the impugned order of allotment was passed, I am of the opinion that the impugned order of allotment is without the authority of law and is ultra-vires.
28. I am not impressed by the argument that the Writ Petition suffers from laches and delay. I am inclined to hold that the circumstances in which the impugned order of allotment came into existence give strong indications of fraud played on the petitioner and, therefore, any laches in approaching the Court as a result of fraud cannot be a valid consideration for dismissing the Writ Petition. Further, it was submitted by the learned Counsel appearing for the petitioner that the petitioner was unaware of what he calls as shady transaction between respondents-2 and 3 and he was constantly pressing for grant of Possession Certificate to which he was entitled after tendering the full amount, by virtue of his right to possession assured under the Rules of Allotment of 1972 besides the statutory support derived from Sections 55 and 108 of the Transfer of Property Act. The petitioner's letter dated 21-1-1981 demanding possession of the site was referred to the Law Officer of the B.D.A. for his opinion and the Law Officer gave his opinion on 23-6-1982 wherein he had stated that it was not necessary to reply to the letter of the petitioner and that the petitioner was wilfully kept in the dark and it was for the first time a reply was sent by the B.D.A. to the petitioner by letter dated 13-2-1987 and the Writ Petition came to be filed on 3-3-1987. These facts prompt me to accept the contention of the petitioner that it is neither fair nor reasonable to dismiss the Writ Petition on ground of laches and delay.
29. Statement of objection has been filed by respondent-3 denying all the allegations made by the petitioner against him. Notwithstanding the denial made by respondent-3, guided by reasons based on established facts and circumstances, I am of the opinion that respondent-3 has not acted in conformity with either principles of fairness and reasonableness or of fair administrative procedure and that there has been abuse of power on his part. There is no material to take any other view in the facts and circumstances of the case particularly since I have examined the original files and records produced before me by the learned Counsel appearing for the B.D.A. I am not inclined to hold that respondent-3 has acted bona fide.
30. In "ROBERTS v. GWYRFAI DISTRICT COUNCIL" (1899) 2 Ch 608, 614-615, Lindley M.R. said:-
"I know of no duty of the Court which it is more important to observe and no power of the Court which it is more important to enforce than its power of keeping public bodies within their rights. The moment public bodies exceed their rights, they do so to the injury and oppression of private individuals, and those persons are entitled to be protected from injury arising from such operations of public bodies."
The recent trend is that public bodies ought to tread a fine line. Care has to be taken by them on the one hand not to treat themselves as bound by policy guide-lines, on the other, they must not readily break away from such guidelines. They are under an overriding obligation to wield powers in public interest. But an important element in determining where the public interest lies is the fact that undertakings or assurances should, in general be honoured.
Thus the Courts have adopted principles which enable them to balance considerations of fairness with broader aspects of the public interest. B.D.A. in the circumstances of this case, comes within the sway of the above principles as a public authority entrusted with functions to perform for the benefit of the public.
31. For the reasons stated above, the Writ Petition is allowed. The allotment of the marginal land in question in favour of respondent-2 is hereby declared null and void and the impugned endorsement under Annexure-Q is quashed. The Bangalore Development Authority (Respondent-1) is directed to put the petitioner in possession of the marginal land in question i.e., adjacent site No. 17/B, Industrial Suburb, II Stage, Rajajinagar (Tumkur Road), Bangalore, within a time limit of forty-five days from the date of receipt of a copy of this order. Respondent Nos. 1 and 3 shall pay Rs. 2,000/- each to the petitioner as costs of this Writ Petition.