Madhya Pradesh High Court
Chief Executive Officer Indore ... vs Managing Director Sansar Publication ... on 21 February, 2019
Equivalent citations: AIRONLINE 2019 MP 197
Author: Virender Singh
Bench: Virender Singh
Writ Appeal No.1142/2013
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HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE
Division Bench : HON'BLE MR. JUSTICE S. C. SHARMA AND
HON'BLE MR. JUSTICE VIRENDER SINGH
Writ Appeal No.1142/2013
Indore Development Authority & Anr.
Versus
Sansar Publication Pvt. Ltd.
Shri Purushaindra Kaurav, learned Senior Counsel (former
Advocate General) and Shri Ravindra Singh Chhabra,
learned Additional Advocate General for the appellants.
Shri A. K. Sethi, learned Senior Counsel with Shri Rishabh
Sethi, learned counsel for the respondent.
O R D E R
(Delivered on this 21st day of February, 2019) Per : S. C. Sharma, J.
The present writ appeal has been filed under Section 2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyayapeeth Ko Appeal) Adhiniyam, 2005 being aggrieved by order dated 14/11/2013 passed by learned Single Judge in Writ Petition No.2801/2012 (Sansar Publication Pvt. Ltd. Vs. Indore Development Authority & Another).
02- The facts of the case reveal that the sole respondent before this Court Sansar Publication Private Limited, a Company registered under the Companies Act, 1956, came-up before this Court with a prayer for quashment of order dated 14/03/2012 Writ Appeal No.1142/2013 -2- passed by Indore Development Authority by which the allotment of land to the petitioner in respect of plot No.A-7, Scheme No.54, PU-
4, Commercial was cancelled.
03- The undisputed facts further reveal that without issuing any tender notice, a plot was allotted to the sole respondent Sansar Publication Private Limited on 30/04/1992 and possession was also given to Sansar Publication Private Limited on 01/05/1992. A lease deed was executed on 14/02/1997 for a period of 30 years. The plot, which was allotted to the respondent was a commercial plot and the Indore Development Authority also allotted various plots to various newspapers irrespective of their circulation again without adhering to tender process on concessional rates.
04- The allotment of plot to various newspapers in the Press Complex and the allotment of plot, which was done in favour of respondent No.1 i.e. Plot No.7, Scheme No.54, PU-4, Commercial was a subject matter of scrutiny before this Court in a Public Interest Litigation filed by one Vijay Kumar Tiwari i.e. Writ Petition No.3518/1992. In the writ petition, which was preferred by way of Public Interest Litigation, the order dated 17/12/1991 issued by State Government, Department of Housing and Environment was the subject matter of challenge by which plots were allotted to respondent No.1 and other newspapers on concessional rates.
Writ Appeal No.1142/2013 -3-05- The Division Bench of this Court has allowed the Writ Petition No.3518/1992 on 09/12/2005 and has quashed the allotments in favour of all newspapers as well as in respect of respondent before this Court and all the consequential actions were set aside. The Division Bench of this Court, while setting aside the allotment has certainly observed that Indore Development Authority shall be free to allot the land keeping in view the Rule 5 and Rule 6 of the Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano Tatha Anya Sanrachnaon Ka Vyayan Niyam, 1975 (hereinafter referred to as "Rules of 1975"), however, it was made clear by the Division Bench that if the plots are again allotted to the same parties or to other individual in terms of the aforesaid Rules, they will not be entitled for allotment on concessional rates.
06- The respondent pursuant to the judgment delivered by the Division Bench of this Court wrote a letter on 08/02/2006 for inviting the respondent for negotiation in the matter of allotment of plot and again requested on 16/10/2006 for allotment of plot afresh.
07- The respondent thereafter, preferred a writ petition i.e. Writ Petition No.1372/2008 before this Court and the Division Bench of this Court while deciding the petition preferred by respondent has directed the Indore Development Authority to Writ Appeal No.1142/2013 -4- consider the matter afresh and an observation was also made that in the case of Chogelal Yadav, it has been held that newspapers also serves educational purpose and after observing the same the petition was disposed of by directing the Indore Development Authority to treat the applications filed by the newspapers as fresh applications and to consider the matter afresh for grant of allotment in favour of the applicants.
08- The respondent again submitted a representation on 25/02/2008 for allotment of land and also submitted a reminder on 13/05/2008. The Indore Development Authority in respect of other newspapers, wherein the plots were in existence in Scheme No.54, Press Complex issued letter dated 25/07/2008, directing them to pay the amount as per the commercial rates keeping in view the Collector guidelines. No such letter was issued to the petitioner and the petitioner thereafter, preferred a writ petition i.e. Writ Petition No.5068/2008 and this Court by an order dated 12/09/2008 has directed the Indore Development Authority to decide the petitioner's representation and also directed that in case the petitioner is not found entitled for any relief, a speaking order should be passed in the matter.
09- The petitioner, thereafter, submitted a detailed representation on 19/09/2008 requesting for allotment of plot and Writ Appeal No.1142/2013 -5- finally preferred a writ petition i.e. Writ Petition No.6597/2009 seeking allotment of plot and an interim order was passed on 10/09/2009 directing the Indore Development Authority to grant similar relief to the petitioner, which has been extended to other newspapers. Thereafter, again on 16/09/2009, learned Single Judge again directed the Indore Development Authority to comply the earlier order passed in the matter and finally on 30/10/2009 a detailed and exhaustive order was passed by the learned Single Judge to grant the same relief, which has been extended to other newspapers and the learned Single Judge also observed that the matter shall be treated as part-heard.
10- Against the interim order passed by the learned Single Judge, the Division Bench of this Court on 16/01/2012 passed an order in Writ Appeal No.401/2009 directing the Indore Development Authority to consider the case of allotment of plot to Sansar Publication Private Limited and to take a reasoned decision in the matter. Thereafter, a review petition i.e. Review Petition No.81/2012 was preferred in the matter by Sansar Publication Private Limited and finally an order was passed by Indore Development Authority on 14/03/2012, by which the request of the petitioner to allot the plot has been rejected.
11- Against the order dated 14/03/2012 a writ petition i.e. Writ Appeal No.1142/2013 -6- Writ Petition No.2801/2012 was preferred and the learned Single Judge on 14/11/2013 has allowed the writ petition and has directed the Indore Development Authority to accept the difference of money in respect of commercial rate and the rate on which the plot was allotted to the petitioner as applicable in the relevant year when the plot was initially allotted, meaning thereby, the rate applicable in the year 1992. The judgment was delivered by the learned Single Judge in the year 2013 directing the Indore Development Authority to allot a plot and to accept commercial rates of the year 1992.
12- The Indore Development Authority has filed the present writ appeal before this Court in the matter. Shri A. K. Sethi, learned Senior Counsel appearing on behalf of respondent has vehemently argued before this Court that in respect of other newspapers to whom plots have been allotted in Scheme No.54, the Indore Development Authority has regularized all the allotments by accepting the difference between commercial rate and concessional rate. They are in possession and therefore, a similar treatment has rightly been extended by the learned Single Judge to the respondent Sansar Publication Private Limited and no case for interference is made out in the matter.
13- Heard learned counsel for the parties at length and perused the record. The undisputed facts reveal that as on date, Writ Appeal No.1142/2013 -7- there is no allotment in existence in favour of respondent Choutha Sansar. Undisputed facts also reveal that not a single rupee deposited by the respondent, at the of initial allotment, is with the Indore Development Authority. Undisputed facts also reveal that Indore Development Authority is in possession of the plot in question. The undisputed facts also reveal that plots, which were allotted to other newspapers are in a different scheme, which was meant for Press Complex, whereas the petitioner is claiming a plot bearing No.A-7 is under another scheme of Indore Development Authority i.e. Scheme No.54, PU-4 and the plot is purely a commercial plot.
14- The allotment of plots to various newspapers irrespective of their circulation on the basis of order issued by the State Government Department of Housing and Environment, dated 17/12/1991 was subjected to judicial scrutiny before this Court in a writ petition preferred by way of Public Interest Litigation by one Vijay Kumar Tiwari in Writ Petition No.3518/1992 (Vijay Kumar Tiawri Vs. State of M. P. and Others). The Division Bench of this Court on 09/12/2005 in the aforesaid writ petition in paragraphs No.7 to 19 has held as under:-
"7. It may be mentioned that the petition was filed on 8-10-92 and interim order of stay was passed on 3-11-92. Thereafter, petition lingered on and respondents sought time for filing return. Ultimately on 14-3-05 this Court has observed as under :-Writ Appeal No.1142/2013 -8-
"Surprisingly, though the matter is pending since more than 13 years, and in spite of the serious allegations, neither the State, nor the Indore Development Authority have filed their return. However, on the request of their Counsel, the State and the Indore Development Authority are finally granted three weeks time to file return."
8. After the period of 13 years on 14-3-05 orders were passed and return has been filed by the State Govt.
9. Counsel for respondent No. 4 submitted that the lands have been allotted to them on the orders of the State Govt. and there is no irregularity in the said allotment.
10. The question involved in the case is whether State Govt. or its Officers on their own can issue directions for sale of land of the authority on a concessional rate in violation of the rules and procedure for transfer of land, whether running of the newspaper can be said to be a charitable purpose.
11. Section 58 of the act of the Adhiniyam is clear and specific. Section 58 is reproduced below :--
"Subject to such rules as may be made by the State Government in this behalf, the Town and Country Development Authority shall, by regulation, determine the procedure for the disposal of developed lands, houses, buildings and other structures."
12. On perusal of the aforesaid provision it is clear that transfer of the lands, buildings and other development works shall be subject to rules as made by the State Govt. Therefore, Town and Country Development Authority has to act in a reasonable and open manner in its dealing with the citizens. It can transfer the lands strictly in terms of the rules. Under Section 56 of the Adhiniyam the lands vests with the Authority, therefore, the transfer of land either by sale or by lease should be strictly in terms of the rules framed by the State Govt. or the regulations of the Authority. Rules of 1975 specifies the person entitled for getting the land on concessional terms which is provided under Rules 19 and 20. Rule 20 of the Rules is reproduced below :-
"Ordinarily, no lease or sale of land on concessional terms shall be allowed, for the purposes of other than charitable purposes such as for hospital, educational institutions and orphanages."
13. Under the Rule, ordinarily, no lease or sale of land on concessional rates shall be allowed, for the purposes other than charitable purposes. Thus, Legislature intended the land on concessional rate can be given to any public institution or body registered for the charitable purposes. Except the bodies Writ Appeal No.1142/2013 -9- mentioned in the Rule 20 no other body or press is entitled for the lease on concessional rate. Newspapers does not fall within the definition of charitable purpose. Charitable purpose has been considered in the case of Municipal Corporation of Delhi vs. Children Book Trust reported in AIR 1992 SC 1456 and it is held that an institution imparting education in school can not be regarded as a charitable object. An element of public benefit or philanthropy has to be present. Today, education has acquired a wider meaning. If education is imparted with a profit motive, to hold, in such a case, as charitable purpose, will not be correct. Thus charitable purpose should not be given to the body which is used for a profit motive. Thus newspapers do not fall within the definition as Institution for charitable purpose.
14. Therefore, transfer of land of the Authority on the orders of the State Govt. at concessional rate by any authority to the newspaper or any other institution which is not a charitable institution is void ab-initio and contrary to provisions of Section 57 and Rules made thereunder. State has to act strictly within the four corners of the law. It can not distribute lands causing loss to the authority. Therefore, disposal of the lands pursuant to the letter of a Secretary or Govt. is objectionable for more than one reason. Fair play is expected from the State Govt. and they must act in accordance with the law. It is contended by the respondents that newspaper plays a very important role in the Society, therefore, they are entitled for concession. This bald statement has no force. The act of the Govt. in distributing largess amounts to influencing the press. In a democracy, strong and independent press is requirement of the Society. However, by distributing largess to press in order to gain favour is against the settled norms of democracy. State Govt. can not act in violation of the Adhiniyam and Rule made thereunder.
15. In a similar situation the Apex Court in the case of Ram and Shyam Company v. State of Haryana and Others reported in AIR 1985 SC 1147 has observed in Para 18 of its judgment as under:-
"The position that emerges is this. Undoubtedly Rule 28 permits contract for winning mineral to be granted by the Government by auction or tender. It is true that auction was held. It is equally true that according to the State Government, the highest bid did not represent the market price of the concession. It is open to the State to dispose of the contract by tender. Even here the expression 'tender' does not mean a private secret deal between the Chief Minister and the offerer. Tender in the context in which the expression is used in Rule 28, means 'tenders to be invited from intending contractors'. If it was intended by the use of the expression 'tender' in Rule 28 that Writ Appeal No.1142/2013
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contract can be disposed of by private negotiations with select individual, its validity will be open to serious question. The language ordinarily used in such rules is by public auction or private negotiations. The meaning of the expression 'private negotiations' must take its colour and prescribe its content by the words which precede them. And at any rate disposal of the State property in public interest must be by such method as would grant an opportunity to the public at large to participate in it, the State reserving to itself the right to dispose it of as best subserve the public weal. Viewed from this angle, the disposal of the contract pursuant to the letter by the fourth respondent to the Chief Minister is objectionable for more than one reason. The writer has indulged into allegations, the truth of which was not verified or asserted. The highest bidder whose bid was rejected on the ground that the bid did not represent the market price, was not given an opportunity to raise his own bid when privately a higher offer was received. If the allegations made in the letter influence the decision of the Chief Minister, fair-play in action demands that the appellant should have been given an opportunity to counter and correct the same. Application of the minimum principles of natural justice in such a situation must be read in the statute and held to be obligatory. When it is said that even in administrative action, the authority must act fairly, it ordinarily mean in accordance with the principles of natural justice variously described as fair play in action. That having not been done, the grant in favour of the fourth respondent must be quashed."
16. Therefore, as held in the case of Ram and Shyam (supra), it is not permissible to grant lease on concessional rate to Press and any decision, circular or cabinet decision of the State Government which is violative of the statutory rules will have no force of law being against the provisions of the Rules. In the circumstances, entire action of the Authorities of the State of Madhya Pradesh in directing allotment of lands of the Town and Country Development Authority in the State of Madhya Pradesh on concessional rates to the newspapers is de hors of the Rules. Said directions are contrary to law and the notifications deserves to be quashed. Allotment of lands on concessional rates by the State Authorities against the Rules framed causing loss to the Development Authority deserve to be quashed. Orders of the Authorities of the State Government and the Cabinet decision granting lands on concessional rates is nullity and are quashed as without jurisdiction. In consequence, leases granted on concessional rates in pursuance of the letters Writ Appeal No.1142/2013
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of the Authority Annexures P/9, R-3/13, R-3/14, R-3/19 for allotment to respondent No. 4 is quashed. Minutes of the Sub- Committee dated 4-10-1991 Annexure R-l filed with the return of the State Government is also quashed being violative of Rules 19,20 and 21 of the Rules. However, respondent No. 4 will be at liberty to negotiate with the Development Authority in terms of the order dated 24-9-1992 passed by the Indore Bench of the High Court in Writ Petition No. 1873/91 (Shri Kranti Kumar Shukla v. State of M.P. and Anr.). All the leases granted on concessional rates against Rules 19 and 20 are void and are quashed:
17. It is further directed that the lands of the Development Authority shall be transferred strictly in terms of the Rule 5 of the Rules which provides that the lands shall be transferred as under:-
(a) By direct negotiations with the party; or
(b) By public auction; or
(c) By inviting tenders; or
(d) Under concessional terms.
18. Lands in the present case shall be transferred in the light of the directions of the Division Bench of the Indore High Court in the case of Shri Kranti Kumar Shukla (supra) or by public auction or by inviting tenders. If the Authorities decide to dispose of the lands by negotiations, then negotiations shall be strictly in terms of the Rule 6 of the Rules and not otherwise. Development Authority will be at liberty to transfer the lands in terms of Rule 6 of the Rules. Parties who had been allotted the lands will also be entitled for transfer of lands in terms of the Rules and not on concessional rates.
19. Petition succeeds and is allowed. In the circumstances of the case, there shall be no order as to costs."
The Division Bench of this Court has set aside all the allotments and all the leases granted on concessional rates, holding that they were executed in violation of Rule 19 and 20 of the Rules of 1975. The Division Bench has also held that the land belonging to Indore Development Authority shall be transferred strictly in terms of Rule 5 of the Rules of 1975 and by no stretch of imagination, the land can be allotted on concessional rates.
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15- The undisputed facts also reveal that initial leases, which were executed in respect of other newspapers, are also not in existence at present and no fresh lease deed has been executed till date in respect of other newspapers also. Learned counsel appearing for Indore Development Authority has categorically stated before this Court that till date after the judgment was delivered by the Division Bench in the case of Vijay Kumar Tiwari, not a single lease deed has been executed, meaning thereby, the issue in respect of other newspapers has not been crystallized yet.
16- The another important aspect of the case is that the other newspapers, who have been allotted plots, some of them have either constructed a building and some of them are carrying out various other activities, however, in the case of petitioner its an open plot under the possession of Indore Development Authority.
17- After the judgment was delivered by this Court in the case of Vijay Kumar Tiwari, the respondent kept on representing before the authorities for allotment of plot and a writ petition was preferred by the petitioner for allotment of plot and other newspapers have also preferred various writ petition and by a consolidated order dated 19/02/2008 passed in bunch of cases (the petition filed by the petitioner was Writ Petition No.1372/2008), the Division Bench has directed the Indore Development Authority to Writ Appeal No.1142/2013
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treat the applications of the petitioners as fresh applications and to take a decision on the merits of each case, in accordance with law.
Paragraphs No.7 to 15 of the aforesaid judgment reads as under:-
"7. The controversy before the Division Bench in Misc. Petition No. 1197/89, decided on 30-4-98 was whether Newspapers impart education by publishing various political and economical news, which is available even to ordinary persons. It was held that the newspapers not only impart education by publishing information, for the benefit of public at large, but also increase awareness, which is very important for creating public opinion, and for keeping the people vigilant. It was also observed in Paragraph 5 of the decision that the newspapers do impart education to the people at large and create awareness. Education imparted by newspapers may not be taken as academic education, but can definitely be accepted to be an institution which imparts knowledge and education to the public at large. It is, however, not disputed that this decision was not brought to the notice of the subsequent Division Bench in Vijay Kumar Tiwari (supra), and the learned Judges proceeding on their own interpretation of Rules 19 and 20, came to the conclusion that the allotment amounted to distribution of largess.
8. Before adverting to the other facts and the provisions of law, we think it apt to reproduce Rules 19 and 20 of the said Rules for a proper understanding of the controversy. The said Rules read as follows:
Rule 19. The Authority may with the previous approval of the State Government lease out on concessional terms any Authority land to any public institution or body registered under any law for the time being in force.
fu;e 19- izkf/kdkjh] jkT; ljdkj ds iwoZ vuqeksnu ls] fdlh izkf/kdkjh Hkwfe dks rRle; izo`Rr fdlh fof/k ds v/khu jftLVªhd`r fdlh lkoZtfud laLFkk ;k fudk; dks fj;k;rh fuca/kuks ij iV~Vs ij ns ldsxk A Rule 20. Ordinarily, no lease or sale of land on concessional terms shall be allowed for the purposes of other than charitable purposes such as for hospital, educational institutions and orphanages. fu;e 20- lk/kkj.kr;k Hkwfe dk fj;k;rh fucU/kuksa ij dksbZ iV~Vk ;k fodz; iwoZ iz;kstuks tSls vLirky 'kS{kf.kd laLFkkvks rFkk vukFkky;ks ls fHkUu iz;kstuksa ds fy, Writ Appeal No.1142/2013
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vuqKku ugh fd;k tk;sxk A
9. Rule 20 has not been happily worded and it appears that "of" between "purposes" and "other" is redundant for interpreting the said Rule. The Hindi version, however, gives the correct picture. However, the exercise of interpretation has become superfluous as the said Rule has already been taken into consideration by the Supreme Court in K.K. Bhalla v. State of M.P. and Others (A.I.R. 2006 SC 898). In Paragraph 36 of the judgment, Their Lordships have referred to the Rules and stated that approval of the State Government is required for transfer of the land on concessional terms and no lease on concessional terms shall be allowed for purposes other than charitable purposes such as hospital, educational institutions and orphanages. Thus, earlier judgment of this Bench to the effect that newspapers are for educational purposes within the expression contained in Rule 20, is fortified by the judgment of Supreme Court in K.K. Bhalla (supra).
10. The learned Counsel for the petitioners have submitted that notwithstanding that the judgment in Vijay Kumar Tiwari's case (supra) and in the case of K.K. Bhalla (supra) did not save concessional allotment in favour of the newspapers, in the wake of the fact that the newspapers have spent substantial amount for making construction decades ago, termination shall cause unavoidable hardship to them. In Vijay Kumar Tiwari's case (supra), it was stated that the private respondents will be at liberty to negotiate with the Development Authority in terms of the order dated 24-9-92, passed by the Indore Bench of the High Court in Kranti Kumar Shukla v. State of M.P. and Anr.
W.P. No. 1873/91.
11. We may now advert to the judgment of the Supreme Court in K.K. Bhalla's case (supra). In the said judgment, the land was earmarked for commercial purposes in the master plan but it was allotted for industrial use for printing newspapers, thus, it was not a case where the land ear marked for charitable purposes, had been allotted to a newspaper as is the case in hand. Despite having come to the conclusion that the allotment suffered from a basic flaw and illegality, the Supreme Court in the said report in Paragraph 75 expressed opinion that the interest of justice would be subserved if the question as regards allotment of land is left open to the Development Authority (in that case Jabalpur Development Authority), and it was directed that the Authority may consider the matter afresh for grant of such allotment in favour of the Private respondent (newspapers) treating the applications filed by them either before it or before the State Government, as fresh applications.
12. We, therefore, do not perceive any ground to differ from what has been directed by Their Lordships in K.K. Bhalla Writ Appeal No.1142/2013
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(supra). For convenience, we reproduce Paragraph 75 of the report hereunder:-
"For the reasons aforementioned, the impugned judgments of the High Court cannot be sustained, but, having regard to the facts and circumstances of this case, we are of the opinion that the interest of justice would be subserved if the question as regards allotment of land is left to the Jabalpur Development Authority. The Authority may consider the matter afresh for grant of such allotment in favour of the Private respondents herein treating the applications filed by them either before it or before the State Government as fresh applications. Such applications must be processed strictly in terms of the provisions of the 1973 Act and the Rules framed thereunder as also keeping in view the Master Plan. Such a decision should be taken by the Competent Authority of the JDA at an early date preferably within a period of two months from the date of receipt of the copy of this order. The JDA shall return the amount deposited by the Private respondents, if any, within four weeks from date."
13. From the narration of the facts above, it is luculent that insofar as charitable purpose was concerned, Chogelal Yadav's case, clearly concluded the issue by holding that newspapers also served an educational purpose and were, therefore, entitled to be considered for allotment in accordance with Rules. This position became further manifest in the judgment of K.K. Bhalla (supra), wherein Their Lordships held that no lease on concessional terms shall be allowed for purposes other than charitable purposes such as hospital, educational institutions and orphanages. It appears that this judgment was not brought to the notice of the learned Judges in Vijay Kumar Tiwari (supra). It was also not brought to the notice of the Court that the designated use of the land in the Development Plan was "Educational".
14. Under these circumstances, we are of the view that the course suggested by the Supreme Court in K.K. Bhalla (supra), and by this Court in Vijay Kumar Tiwari's case (supra), for treating the applications as fresh applications and decision thereon, on the merits of each case should be adopted in the present case also. We make it clear, that Development Authority shall proceed to decide the application consistent with the law laid down as hereinabove referred to.
15. The petition W.P. No. 4806/2007, Jeevan Singh v. State of M.P. and Ors. is accordingly, dismissed and the other petitions are disposed of with the direction to Indore Development Authority to treat the applications filed by these Writ Appeal No.1142/2013
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newspapers as fresh applications and consider the matter afresh for grant of such allotment in favour of the applicants consistent with the provisions of law as referred to above. The Indore Development Authority shall endeavour to decide these cases as expeditiously as possible, preferably within a period of four months. There shall be no order as to costs."
The Division Bench in the second round of litigation, where the petitions were filed by the newspaper owners, have observed that newspapers should be treated as an institution imparting education and allotment can be done as they are serving charitable purposes keeping in view the Chogelal Yadav's case.
18- Undisputedly, the plot was not again allotted to the petitioner and the petitioner again preferred a writ petition i.e. Writ Petition No.5068/2008 and the learned Single Judge on 12/09/2008 has directed the Indore Development Authority to take a decision within a period of two months by taking into account the subsequent Division Bench's judgment dated 19/02/2008 (Annex.-
P/9). Order dated 12/09/2008 passed by the learned Single Judge reads as under:-
"The petitioner-Company has approached this Court with a grievance that although petitioner-Company was one of the petitioners, in a bunch of writ petitions, which were disposed of by the Division Bench of this Court on February 2, 2008, Annexure P-9, and whereas through a resolution no.137 passed on May 27, 2008, Indore Development Authority has regularized the allotment of the remaining petitions, but the requisite relief has not been granted to the petitioner and as such, there is clear case of discrimination vis-a-vis, the petitioner-Company.
Although a show cause notice was issued to the respondent, but no reply has been filed so far.
Since the primary grievance raised by the petitioner is Writ Appeal No.1142/2013
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with regard to the non-implementation of the directions used by Division Bench of this Court in the case of the petitioner and although it has been claimed that the said relief has been granted in the case of other writ petitioners, it would be appropriate to require the Indore Development Authority to examine the case of the petitioner, in the light of the Division Bench Judgment and take appropriate decision thereafter, within a period of two months from the date the authorized representative of the petitioner-Company appears before the Competent Authority of Indore Development Authority. If for any reason whatsoever, the relief to the petitioner is not made available, then a detailed and speaking order shall be communicated to the petitioner.
The petitioner through its leader counsel is directed to appear before the Competent Authority of Indore Development Authority on September 19, 2008.
The Competent Authority of the Indore Development Authority shall afford an opportunity of hearing to the authorized representative of the petitioner-Company before passing a final order."
19- The petitioner as well as Indore Development Authority sought various legal opinions in the matter and names of senior advocates find place in paragraph No.14 of the impugned judgment and all of them have advised for re-allotment of plot to the petitioner on the terms on which the plots were being re-allotted to the other owners of the newspapers.
20- At this stage, it is necessary to mention that letters were certainly issued by Indore Development Authority for re-
allotment to other newspapers but no final decision has been taken till date and no fresh lease has been executed till date by the Indore Development Authority. The petitioner, thereafter, again preferred a writ petition and the learned Single Judge vide order Writ Appeal No.1142/2013
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dated 10/09/2009 passed in Writ Petition No.6597/2009 again directed the Indore Development Authority to grant requisite relief to respondent Company in accordance with law.
21- The learned Single Judge, thereafter, passed a detailed and exhaustive order dated 30/10/2009 and the Indore Development Authority was directed to file compliance report. The order passed by the learned Single Judge was subjected to judicial scrutiny in Writ appeal and Division Bench by an order dated 16/01/2012 has directed the Indore Development Authority to take a final decision in the matter. The order dated 16/01/2012 passed in Writ Appeal No.401/2009 reads as under:-
"We have heard learned counsel for both sides, and this order is being passed with the consent of learned counsel for the both sides.
In supercession of the impugned order of the learned Single Judge, it is directed that in respect of the respondent, the appellants will take a reasoned decision independently and uninfluenced by any observation made in any of the earlier orders passed by this Court. The proposed decision will consider as to whether, like other cases, the respondent should also be allotted the plot on the basis that the respondent is also agreeable to pay the market value as in other cases. This reasoned decision will be taken by the appellants within two months from today. The decision will be communicated forthwith to the respondent. If the decision is in favour of the respondent, the respondent will have two weeks time from the date of receipt of the decision to deposit the entire sale consideration and also to supply the requisite stamp papers for execution of the lease deed, and the appellants will execute the requisite lease deed within a month from the date on which the deposited is intimated and the stamp papers are supplied, to the appellants by the respondent.
If the decision is against the respondent, the same may be challenged by way of a fresh writ petition.Writ Appeal No.1142/2013
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This appeal is disposed of finally with the aforesaid directions."
22- The Indore Development Authority has finally passed an order dated 14/03/20112. The learned Single Judge has quashed the aforesaid order and has directed the Indore Development Authority to allot a plot to respondent by taking into account the rates applicable in the year 1992. The learned Single Judge has totally ignored the vital aspect of the case that the plot in question, which was earlier allotted to the respondent, is not a part of land of the scheme meant for Press Complex. Its a land located in commercial locality i.e. in Scheme No.54, PU-4, Commercial.
Thus, the location of two sites is altogether different. The learned Single Judge has observed that both the plots are on A. B. Road and has issued a writ of mandamus to the Indore Development Authority for allotment of plot.
23- The apex Court in the case of M/s. Chingleput Bottlers Vs. M/s. Majestic Bottling Co. reported in AIR 1984 SC 1030 has dealt with writ of mandamus and certiorari as well as jurisdiction of High Court. Until and unless there is a legal duty imposed upon Indore Development Authority to allot a plot, a writ of mandamus cannot be issued in the manner and method it has been done. No mandamus can be issued where the duty sought to be enforced is of discretionary nature nor a mandamus can be issued Writ Appeal No.1142/2013
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to compel the performance by such public body or authority of an act contrary to law. Paragraphs No.12, 13, 17 and 22 of the aforesaid judgment reads as under:-
"12. The first issue, as already indicated, raises a question of prime importance and of some difficulty. It would therefore be convenient, in the first instance, to deal with the appeal preferred by the State Government. It is urged that the High Court had no jurisdiction to issue a writ of mandamus ordaining the Commissioner to grant a licence to Messrs Chingleput Bottlers under Rule 7 of the Rules without the prior approval of the State Government. It is said that although a writ of mandamus may be a necessary adjunct to a writ of certiorari the proper course for the High Court to have adopted was, if it was satisfied that the impugned order of the Commissioner was liable to be quashed insofar as he rejected the application made by Messrs Majestic Bottling Company on the ground that there was an error apparent on the face of the record, to have issued a writ of mandamus Commissioner to redetermine the question as to the grant of such privilege. Reliance is placed on de Smith's Judicial Review of Administrative Action, 4th edn. at pp.341 and 544. The contention must, in our opinion prevail.
13. In order that a writ of mandamus may issue to compel the Commissioner to grant the licence, it must be shown that under the Act and the Rules framed thereunder there was a legal duty imposed on the Commissioner to issue a licence under Rule 7 of the Rules without the prior approval of the State Government and that Messrs Majestic Bottling Company had a corresponding legal right for its enforcement. No mandamus will lie where the duty sought to be enforced is of a discretionary nature nor will a mandamus issue to compel the performance by such public body or authority of an act contrary to law. The Commissioner of Prohibition & Excise was under no legal duty to grant a licence to Messrs Majestic Bottling Company till he received the prior approval of the State Government under Rule
7. Even assuming that the Commissioner recommended the grant of a licence, to them under Rule 7, the State Government were under no compulsion to grant such prior approval. The grant or refusal of such licence was entirely in the discretion of the State Government. The High Court had no jurisdiction to issue a writ of Mandamus to the Commissioner to grant a licence to Messrs Majestic Bottling Company contrary to the provisions of Rule 7 of the Rules.
17. We should not be understood as laying down an inflexible rule that the High Courts cannot, under any circumstances, regulate or control the manner of grant of a Writ Appeal No.1142/2013
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liquor licence by the issue of a writ of mandamus. It would all depend upon the facts and circumstances as to whether the High Court should issue a writ of mandamus or not. The grant of a liquor licence is a matter of privilege. In the very nature of things, the grant of refusal of licence is in the discretion of the State Government. Normally, where the statute vests a discretionary power upon an administrative authority, the Court would not interfere with the exercise of such discretion unless it is made with oblique motives or extraneous purposes or upon extraneous considerations. The present case does not fall within the rule laid down in K. N. Guruswamy v. The State of Mysore & or and P. Bhooma Reddy v. State of Mysore & ors. The decisions in Guruswamy's and Bhooma Reddy's cases are both in consonance with the well- settled principle that the High Court can always issue a writ of mandamus under Art. 226 of the Constitution against a public authority to compel the performance of a public duty where such authority acts in violation of the law.
22. Nor can we subscribe to the contention that the Commissioner had to act under the directions and control of the State Government under sub-section (2) of section 25A of the act while exercising his powers delegated under sub-section (1) of section 17C read with section 25A (1) in the matter or grant of a liquor licence under Rule 7 of the Rules. It would not justify the High Court to issue a writ of mandamus to the Commissioner to grant a licence to Messrs Majestic Bottling Company under Rule 7 of the Rules without the prior approval of the State Government. Obviously, the State Government and the Commissioner cannot act de hors the scheme of the Act and the Rules framed thereunder. Further, the contention that the State Government had already made up their mind against the grant of such privilege to Messrs Majestic Bottling Company and that there was no occasion for the High Court to send back the case to the Commissioner as it would have amounted to the State Government being asked to sit in appeal over the judgment of the High Court, cannot be accepted. We regret to say, the High Court has tried to circumvent the whole procedure by issuing a writ of mandamus directing the Commissioner to grant a licence under Rule 7 without the prior approval of the State Government. As already stated, the grant of a licence under Rule 7 of the Rules is a privilege. There are no charges of mala fides on the part of the State Government. There is no suggestion that the State Government had already made up their mind. This is also not a case where the rules of necessity require recourse to a writ of mandamus to command the issue of a licence without conforming to the procedure prescribed under Rule 7."
In the present case, allotment of land is done as per the Writ Appeal No.1142/2013
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Rules in existence. The Indore Development Authority being a public body has to take action strictly in consonance with the statutory provisions. This Court cannot direct the Indore Development Authority nor this Court can compel the Indore Development Authority to act contrary to law. In the considered opinion of this Court, the learned Single Judge had no jurisdiction to issue a writ of mandamus to the Indore Development Authority to allot a commercial plot to respondent by taking into account the rates applicable in the year 1992.
24- The apex Court in the case of Prabodh Verma and Others Vs. State of Uttar Pradesh and Others reported in AIR 1985 SC 167 has dealt with writ of mandamus and has also dealt with various prerogative writs. Paragraphs No.34 to 38 of the aforesaid judgment reads as under:-
"34. The different functions of the prerogative writs of prohibition, certiorari and mandamus have been thus described in Halsbury's Laws of England, Fourth Edition, Volume I, in para 80:
"Historically, prohibition was a writ whereby the royal courts of common law prohibited other courts from entertaining matters falling within the jurisdiction of the common law courts; certiorari was issued to bring the record of an inferior court into the King's Bench for review or to remove indictments for trial in that court, mandamus was directed to inferior courts and tribunals, and to public officers and bodies, to order the performance of a public duty, All three were called prerogative writs... During the seventeenth century certiorari evolved as a general remedy to quash the proceedings of inferior tribunals and was used largely to supervise justices of the peace in the performance Writ Appeal No.1142/2013
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of their criminal and administrative functions under various statutes. In 1700 (in R.v. Glamorganshire Inhabitants(1) and Groennevt v. Burwell(2) it was held that the Court of King's Bench would examine the proceedings of all jurisdictions erected by Act of Parliament, and that, if under pretence of such an Act they proceeded to arrogate jurisdiction to themselves greater than the Act warranted, the court would send a certiorari to them to have their proceedings returned to the court, so that the court might restrain them from exceeding that jurisdiction. If bodies exercising such jurisdiction did not perform their duty, the King's Bench would grant a mandamus.
Prohibition would issue if anything remained to prohibit. The ambit of certiorari and prohibition was not limited to the supervision of functions that would ordinarily be regarded as strictly judicial, and in the nineteenth century the writs came to be used to control the exercise of certain administrative functions by local and central government authorities which did not necessarily act under judicial forms."
35. By the Administration of Justice (Miscellaneous provisions) Act, 1938 (I and 2 Geo. 6 c.63) a more expeditious procedure was introduced under which instead of writs, orders of mandamus prohibition and certiorari are to be issued and the writ of quo warranto was abolished and its place an injunction is to issue against the usurper to the office in question restraining him from acting in that office and, if the case so requires, declaring that office to be vacant. These were, however, procedural changes only. By order 53 of the Rules of the Supreme Court, 1965, substituted for the old order 53 by Rules of Supreme Court (Amendment No.3), 1977 (S.1. 1977 No.1955), far reaching changes, not merely in the form but in the substance of procedural law, were introduced whereby reliefs by way of mandamus, prohibition, certiorari, declaration and injunction have been joined together under the general head of `judicial review' for which an application can be made for any or all of these reliefs in the alternative or in addition to other reliefs arising out of the same matter and the court is also conferred the power to award damages. An application, however, cannot be made without leave of the court and unless the court "considers that the applicant has a sufficient interest in the matter to which the application relates". The expression `sufficient interest' has enabled the court in England to enlarge the rule of locus standi by giving to that expression a liberal interpretation.
36. In India, prior to the Constitution, the power to issue prerogative writs was vested only in three High Courts, that is, the High Courts established by Letters Patent issued by Queen Writ Appeal No.1142/2013
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Victoria under authority given by the Indian High Courts Act, 1861 (24 & 25 Vict c, 104) for the establishment of the High Courts of Judicature at Fort William in Bengal and at Madras and at Bombay for these three presidencies, namely, the High Courts of Calcutta, Madras and Bombay. Hence this Act is generally called the Charter Act and the High Courts established there under the Chartered High Courts. These High Courts were the successors so far as their original jurisdictions were concerned of the Supreme Courts which were established in these three Presidency- towns and inherited from those courts the powers of the Courts of King's Bench which included the power to issue prerogative writs, Apart from these three High Courts none of the other High Courts in India possessed this power. The position was changed when the Constitution of India came into force. Article 225 continues the jurisdiction of existing High Courts. Article 226, however, confers upon every High Court the power to issue to any person or authority, including in proper cases, any Government, within the territories in relation to which it exercises jurisdiction, "directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari or any of them, for the enforcement of the rights conferred by Part III or for any other purpose". It may be mentioned that under Article 32 of the Constitution, the same power as has been conferred upon the High Courts is conferred upon this Court without any restriction as to territorial jurisdiction but, unlike the High Court, restricted only to the enforcement of any of the rights conferred by Part III of the Constitution, namely, the Fundamental Rights. Referring to Article 226, this Court in Dwarka nath, Hindu Undivided Family vs. Income Tax officer, Special Circle. Kanpur (1865) 3 SCR 536, 540-41 : (AUR 1966 SC 81 at Pp. 84 & 85) said:
"This article is couched in comprehensive phraseology and it ex-facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be exercised. It can issue writs in the nature of prerogative writs as understood in England but the scope of those writs also is widened by the use of the expression `nature', for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them, That apart High Courts can also issue directions, orders or writs other than the prerogative writs. It enables the high Courts to mould the reliefs to meet the peculiar and complicated requirements of this country. Any attempt to equate the scope of the power of the High Court under Writ Appeal No.1142/2013
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Article 226 of the Constitution with that of the English Courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of government in to a vast country like India functioning under a federal structure, such a construction defeats the purpose of the article itself. To say this is not to say that the High Courts can function arbitrarily under this article. Some limitations are implicit in the article and others may be evolved to direct the article through the defined channels."
(Emphasis supplied)
37. The fact that the High Courts and a fortiori this Court have power to mould the reliefs to meet the requirements of each case does not mean that the draftsman of a writ petition should not apply his mind to the proper relief which should be asked for and throw the entire burden of it upon the Court. An Advocate owes a duty to his client as well as to the Court a duty to his client to give of his best to the case which he has undertaken to conduct for his client and a duty to assist the Court to the utmost of his skill and ability in the proper and satisfactory administration of justice. In our system of administration of justice the courts have a right to receive assistance from the Bar and it is the duty of the advocate who drafts a writ petition or any other pleading to ask for appropriate reliefs. The true nature of a writ of certiorari has been pointed out this by Court In several decisions. We need refer to only one of them, namely, Udi Narain Singh Malpaharia v. Additional Member, Board of Revenue, Bihar (1963) Suppl 1 SCR 676, 682 : (AIR 1963 SC 786 at p.788). In that case Subba Rao. J., as he then was, speaking for the court, said:
"Certiorari lies to remove for the purpose of quashing the proceedings of inferior courts of record or other persons or bodies exercising judicial or quasi judicial functions. It is not necessary for the purpose of this appeal to notice the distinction between a writ of certiorari and a writ in the nature of certiorari: in either case the High Court directs an inferior tribunal or authority to transmit to itself the record of proceedings pending there in for scrutiny and, if necessary, for quashing the same."
38. A writ in the nature of certiorari is thus a wholly inappropriate relief to ask for when the constitutional validity of a legislative measure is challenged and it is surprising to find that in spite of repeated pronouncements of this Court as to the true nature of this writ it should have been asked for in the Sangh's petition. As pointed out in Dwarkanath's case, under Article 226 the High Courts have the power to issue directions, orders and Writ Appeal No.1142/2013
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writs, including prerogative writs, This power includes the giving of declarations as also consequential reliefs including relief by way of injunction. The proper relief for the petitioners in the Sangh's petition to have asked was a declaration that U.P. Ordinance No, 22 of 1978 was unconstitutional and void and, if a consequential relief was thought necessary, a writ of mandamus or writ in the nature of mandamus or a direction, order or injunction restraining the State and its officers from enforcing or giving effect to the provisions of that ordinance. The High Court granted the proper relief by declaring that Ordinance to be void but it should have, before proceeding to hear the writ petition, insisted that the petitioners should set their house in order by amending the petition and praying for proper reliefs. The High Court was too indulgent in this matter. After all, it was not a petition from a Prisoner languishing in jail or from a bonded labourer or a party in person or by a public spirited citizen seeking to bring a gross injustice to the notice of the court Here, the High Court had before it as the main petitioner a union which had taken collective action to enforce its demands and had defied the Government by flouting its orders and an ordinance promulgated by the Governor, namely, U.P. Ordinance No. 25 of 1977 and had by reason of its collective might ultimately made the Government come to terms with it. The petitioners were represented by well known Counsel, one of them practising in this Court. It is true that neither this Court should dismiss a writ petition on a mere technicality or just because a proper relief is not asked for; but from this it does not follow that it should condone every kind of laxity. We would not have dwelt upon this aspect of the case but for the fact that we find that laxity in drafting all types of pleadings is becoming the rule and a well-drafted pleading, an exception. An ill-drafted pleading is an offspring of the union of carelessness with imprecise thinking and its brothers are slipshod preparation of the case and rambling and irrelevant arguments leading to waste of time which the courts can ill afford by reason of their overcrowded dockets."
Keeping in view the aforesaid, it is true that a High Court can issue a writ of mandamus, however, as enshrined in the Constitution of India, at the same, it has to be established before commanding the public authority that there is a legally enforceable right in favour of a person and the public authority or public functionary is denying legally enforceable right to such person.
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25- In apex Court in the case of M/s. Shenoy and Company, Bangalore and Others Vs. Commercial Tax Officers, Circle-II, Bagalore and Others reported in AIR 1985 SC 621 in paragraph No.19 has held as under:-
"19. A writ or an order in the nature of mandamus has always been understood to mean a command issuing from the Court, competent to do the same, to a public servant amongst others, to perform a duty attaching to the office, failure to perform which leads to the initiation of action. In this case, the petitioners- appellants assert that the mandamus in their case was issued by the High Court commanding the authority to desist or forbear from enforcing the provisions of an Act which was not validly enacted. In other words, a writ of mandamus was predicated upon the view that the High Court took that the 1979 Act was constitutionally invalid. Consequently the court directed the authorities under the said Act to forbear from enforcing the provisions of the Act qua the petitioners. The Act was subsequently declared constitutionally valid by this Court. The Act, therefore, was under an eclipse, for a short duration; but with the declaration of the law by this Court, the temporary shadow cast on it by the mandamus disappeared and the Act revived with its full figure, the constitutional invalidity held by the High Court having been removed by the Judgment of this Court. If the law so declared invalid is held constitutionally valid, effective and binding by the Supreme Court, the mandamus for bearing the authorities from enforcing its provisions would become ineffective and the authorities cannot be compelled to perform a negative duty. The declaration of the law is binding on everyone and it is therefore, futile to contend that the mandamus would survive in favour of those parties against whom appeals were not filed."
In the aforesaid case, the apex Court has reiterated that the authorities cannot be compelled to perform a negative duty.
In the present case, in fact the authorities are being compelled to perform a negative duty by directing allotment of commercial plot situated in different locality that too by charging the rates applicable in the year 1992 in the year 2019, dehors the allotment rules.
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26- Article 226 of the Constitution of India deal with powers of High Court to issue certain writs. The power of judicial review is implicit in a written constitution and unless expressly excluded by a provision of the Constitution, this powers is available in respect of exercise of powers under any provisions of the Constitution. Article 226 empowers the High Courts to issue writ, order or direction in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari. The writ of mandamus literally means a command.
Mandamus is a command issued to direct any person, corporation, inferior Court or Government, requiring him or them to do some particular thing specified which appertains to his or their office and is in the nature of public duty.
27- It is a settled preposition of law that in order to obtain a writ or order in the nature of mandamus, a person has to satisfy the following conditions:-
(a) The petitioner has to establish that he is having legally enforceable right as held by the Hon'ble Supreme Court in the case of Union of India Vs. E. Merck (India) reported in (1998) 9 SCC 412, and the other party against whom the mandamus is sought is having a legal duty to perform.
(b) The duty or the right, which is being enforced by issuing a mandamus should be a duty imposed by the Constitution, a statute, common law or by rules or Writ Appeal No.1142/2013
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orders having the force of law.
Thus, in short for issuing a mandamus there has to be a legally enforceable right under the statute and the public authority is under an obligation to follow the statute and to perform.
28- The mandamus cannot be issued to direct the Indore Development Authority to perform a duty or to do something, which is not provided under the statute. The statute governing the field known as Madhya Pradesh Vikas Pradhikarano Ki Sampatiyon Ka Prabandhan Tatha Vyayan Niyam, 2018 (hereinafter referred as "Rules of 2018") does not provide for allotment without following prescribed procedure under the Rules of 2018. The earlier Rules of 1975 also provided a prescribed procedure.
29- The learned Single Judge could not have, in the peculiar facts and circumstances of the case, issued a writ or mandamus directing the Indore Development Authority and compelling the Indore Development Authority to allot a plot to the petitioner, contrary to the statutory provisions as contained under the Rules of 1975. As on date, the Rules of 2018 are in vogue and therefore, by no stretch of imagination the Rules can be given a complete go-bye.
30- In the considered opinion of this Court, the learned Single Judge has erred in law and facts in allowing the writ petition Writ Appeal No.1142/2013
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preferred by the respondent. There cannot be an allotment dehors to the statutory allotment rules. In the present case, no fresh lease deed, after the judgment was delivered by the Division Bench, has been executed in case of other newspapers. The issue is yet to be finalized and therefore, the petitioner cannot claim parity with other newspapers.
31- The petitioner again cannot claim parity with other newspapers as the plot of the petitioner is not situated in the newspaper complex, on the contrary it is a commercial plot situated in different locality and it is a prime piece of valuable land having value of more than Rs.250 Crores as informed by the Indore Development Authority.
32- Learned counsel Shri Purushaindra Kaurav, who has earlier appeared in the matter has argued before this Court the plot worth about Rs.200 to 250 Crores, cannot be given for few lakhs of rupees as prayed by the petitioner by charging the rate, which were applicable in the year 1992. By taking into account the arguments canvassed by learned counsel Shri Purushaindra Kaurav (the earlier Advocate General), who has earlier argued the matter at length, this Court is of the opinion that State cannot be subjected to a loss of more than Rs.200 Crores. Ultimately its public money and its poor tax payers' money. The Indore Development Authority is Writ Appeal No.1142/2013
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certainly free to allot the land in accordance with law keeping in view the Rules framed on the subject known as Madhya Pradesh Vikas Pradhikarano Ki Sampatiyon Ka Prabandhan Tatha Vyayan Niyam, 2018. The Rules framed by the State Government for allotment of plot provides a procedure for allotment. Rule 5, 6 and 7 of the aforesaid Rule reads as under:-
"5. Disposal of properties.-
(1) The Authority Property shall be disposed by :-
(a) inviting bids in sealed cover/online; or
(b) by draw of lottery at predetermined price;
Provided that the State Government may, by order, prescribe any other mode along with the manner, if required, for disposing any property in a particular case or category of cases.
(2) The Authority may execute projects on Build Operate Transfer (BOT), Build Own Operate Transfer (BOOT), Build Lease Transfer (BLT), Build Transfer Lease (BTL) and such other modes as considered necessary involving the Authority property with prior permission of the Government;
Provided that in all such projects the private partner shall be selected through a transparent process.
6. Disposal of properties by inviting bids.- The following procedure shall be adopted where the property has to be disposed through the process of inviting bids in sealed cover/online-
(i) The details of the property proposed to be disposed shall be prepared in Form-A. The CEO shall ensure that the information so prepared is correct and in order;
(ii) The information so prepared in Form-A shall be placed before the Board and sanction be obtained to dispose the property;
(iii) The notice inviting bids shall be published in Form-B in two newspapers having wide circulation in the area in which the property is located. The same shall be hosted on the website of the Authority. A copy of such web page duly certified by the CEO shall be kept in the record as a Writ Appeal No.1142/2013
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proof of having hosted the notice on the website;
(iv) The conditions of the bid which shall ordinarily be mentioned in the bid document shall be such as mentioned in Form-C;
(v) The offers received through the bids shall be opened in the manner prescribed in the relevant bid document and the rates received shall be presented to the Competent Authority, if it is satisfied that there was sufficient competition or sufficient efforts were made to obtain the best bid, may approve the highest bid if it exceeds the reserve price; even if single bid is received.
(vi) In case the bids so received are less than the reserved price or in case no bid is received, fresh bids may be invited for the second and if necessary for the third time;
(vii) If after the third time the bid continues to be less than the reserve price or no bid is received, the CEO shall prepare a report in Form-D and submit it to the Board of the Authority. The Board of the Authority may reduce the reserve price upto seventy five percent of the reserve price fixed in the first three rounds and invite fresh bids. The CEO shall ensure that a period of at least three months has elapsed between the first invitation of bids and the invitation at reduced reserve price;
If the price of the bids received is found to be less than the revised price or in case no bid is received, then in such condition new bids can be called for the second and if require for the third time as well. If the bids called for the third time are also found to be less than the revised price or no bid is received then the CEO will upload the information of all such properties on the website of the related Authority and the disposal of all such properties shall be done as per the revised price during the same financial year, on the basis of the offers received till first Monday of every month of that financial year.
Provided that the State Government may in special circumstances if so proposed by the Authority, reduce the reserve price to such extent as deemed necessary and may also relax both conditions regarding minimum number of attempts and the expiry of a period of three months before such reduction in reserve price is made;
(viii) The reserve price of the property under this rule shall be calculated as under:-
(a) In case of land/plot:-
(i) Reserved value of residential property = [area of
land/plot in sq. mt.] X [the rate of developed plot Writ Appeal No.1142/2013
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(Rs. per sq. mt.) on the date of notification of invitations for proposals according to price guide principle (Collector Guideline) in the same residential area] Under these rules, for the purpose of calculating, if it is found that the property which is to be disposed is situated in the area for which the Collector Guidelines Rate have not been issued, then in such situation, the rate (in sq. mt.) of developed plot according to the price guiding principle (Collector Guideline) of the nearest residential developed area (whose FAR should not be less than 1), will be valid.
(ii) Reserved value of commercial plot = [area of land/plot in sq. mt.] X [the rate of developed plot (Rs. per sq. mt.) on the date of notification of invitations for proposals according to price guide principle (Collector Guideline) in the same commercial area].
Under these rules, for the purpose of calculation, if it is found that the property which is to be disposed is situated in the area for which the Collector Guidelines Rate have not bee issued, then in such situation, for calculation of Reserve value, the reserve value calculated in clause section (i) will be multiplied by factor 1.5.
(iii) Where the property is being disposed for public or semi-public purpose, for calculation of Reserve value, the reserve value calculated in clause (i) will be multiplied by factor 0.6.
The reserve value of the plots specified under Madhya Pradesh I.T., I.T.E.S. And E.S.D.M. Investment Promotion Policy-2016 under public and semi public use, shall also be calculated as above.
(iv) Where the purpose is mixed type, for calculation of Reserve value, the reserve value calculated in clause (i) will be multiplied by factor. 1.20.
But the State Government, may modify the reserve price, as it thinks fit, in special case or in category of special cases on the proposal by the Authority in a particular category.
Tip: The work Mixed purpose shall mean such purpose as would be a combination of two or more of the following (1) residential (2) commercial (3) any other;
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(b) In case of building In the case of standalone building, reserve value will be calculated according to standard PWD norms, cost o the building as calculated in sub clause (a) hereinabove and the value of the cost of the building, appurtenant land or proportionate and/plot will be added in case of an apartment.
(ix) The property to be disposed under this rule may be transferred in bhumiswami rights or on lease as may be determined by the Authority at the time of inviting the bids. The lease shall be eligible for conversion into freehold if the property was held by the Authority under bhumiswami right.
The property allotted under this rule or the prior rules on lease shall be converted to freehold on payment of the following fees :-
1. For residential, Public & semi-public and industrial purpose 1 percent and for commercial purpose 1.5 percent of the market value, assessed as per Collector Guideline.
2. Lease rent for the balance period up to the next date of lease renewal but limited to the period of 10 years.
The conversion deed shall be executed only after receiving the above fees.
The Chief Executive officer shall convert into freehold after obtaining NOC from Nazul Officer if the Authority has allotted the land received by Government/ Nazul land on lease to the allottee.
The CEO of the Authorities will be the competent authority for this purpose.
In the schemes of the Authority, where the land use of the earlier leased property has been changed due to revision in the development plans, in such a situation, the land use will be valid according to the development plan from the date of the application of conversion of lease holder rights to free hold rights. But if on the date of application the land use is revised according to the revised development plan and if the land use of the land applied for upgrade has been upgraded then to save the Authority from facing any revenue loss, the conversion charge/fee will be charged as per advanced land use.
7. Disposal of properties on concessional rates for specific purposes by inviting bids.-
(1) The Authority may allot on lease any property on Writ Appeal No.1142/2013
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concessional rates to organizations registered under applicable law for:
(a) establishing institute for physically and/or mentally challenged,
(b) Orphanages,
(c) hostels for women,
(d) old age homes,
(e) developing sports facility
(f) auditorium and for any purpose which State Government may so notify by an order.
Note: For the removal of doubt it is clarified that no individual shall be eligible for allotment of any property under the rule.
(2) The following procedure shall be adopted where the property has to be disposed of on concessional rates through the process of inviting bids in sealed cover/online:-
(i) The CEO shall prepare the information about the property proposed to be disposed on concessional rate in Form-E and place it before the Board for approval;
(ii) The concessional reserve price in such cases shall be calculated as under:-
(a) In case of land/plot Reserved value of residential property = [area of land/plot in sq. mt.] X [the rate of developed plot (Rs. per sq. mt.) on the date of notification of invitations for proposals according to price guide principle (Collector Guideline) in the same residential area] X [0.40] Under these rules, for the purpose of calculating, if it is found that the property which is to be disposed, is situated in the area, for which the Collector Guidelines Rate haven not been issued, then in such situation, the rate (in sq. mt.) of developed plot according to the price guiding principle (Collector Guideline) of the nearest residential area (whose FAR should not be less than 1), will be valid. In case of any doubt regarding the applicability of the rate, the decision of the CEO will be final after Writ Appeal No.1142/2013
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calling a report from the District office, Nagar Tatha Gram Nivesh.
OR The actual cost of acquisition and development of the land for disposal/Plot, whichever is higher, but the State Government will be able to modify the reserve price, as it thinks fit, in special case or in category of special cases on the proposed by this Authority in a particular category.
(b) In case of building The cost of the building calculated according to standard PWD norm plus the cost, as calculated in sub-clause (a) hereinabove, of the appurtenant land in case of standalone building or the proportional land in case of apartment;
(iii) Notice inviting bids shall be issued in Form-F. The notice shall be published in two newspapers having wide circulation in the area in which the property is located. The same shall be hosted on the website of the Authority. A cop of such web page duly certified by the CEO shall be kept in the record as a proof of the notice having been hosted on the website. The conditions of the notice inviting bids shall ordinarily be such as mentioned in Form-G;
(iv) Such organizations as are registered under the relevant statute and have been in active operation for three years immediately preceding the date of application for such lease shall be eligible for the participating in the bid. Where a doubt arises whether the organisation is in active operation for three years, the audited accounts shall be scrutinized to determine the question. The CEO shall pass a speaking order to settle the doubt and thereafter his decision shall be final;
(v) The offers received through the bids shall be opened in the manner prescribed in the relevant bid document and the rates received shall be presented to the Competent Authority as mentioned in rule 28 for decision. The Competent Authority, if it is satisfied that there was sufficient competition or sufficient efforts were made to obtain the best bid, may approve the highest bid if Writ Appeal No.1142/2013
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it exceeds the reserved price, even if single bid is received.
(vi) In case the bid received is less than the reserve price or no bid is received the bids may be invited for the second and if necessary third time;
(vii) If after the third time such bid continues to be less than the reserve price or no bid is received, the CEO shall prepare a report in Form-H and submit it to the Chairman. The Chairman may reduce the reserve price upto 75 percent of the reserve price fixed earlier and invite fresh bids. The CEO shall ensure that a period of at least three months has elapsed between the first invitation of bids and the invitation at reduced reserve price;
If the price of the bids received is found to be less than the revised price or in case no bid is received, then in such condition new bids can be called for the second and if require for the third time as well. If the bids called for the third time are also found to be less than the revised price or no bid is received then the CEO will upload the information of all such properties on the website of the related Development Authority and the disposal of all such properties shall be done as per the revised price on the first come first serve basis.
Provided that the State Government may in special circumstances, if so proposed by the Authority, reduce the reserve price to such extent as deemed necessary and also relax both conditions regarding minimum number of attempts and the elapse of a period of three months before such reduction in reserve price is made;
(viii) The property under this rule shall be leased to the successful bidder and such property held in lease shall not be eligible for conversion into free hold;
(ix) Bid which is accepted by the Development Authority, if the bidder wants to withdraw the bid or he is unable to deposit the amount mentioned by him in his bid document within the prescribed period as per the terms and conditions of the bid or the information/facts/data/documents provided by the bidder in his bid with respect of his eligibility is found to be false, the Development Authority will be free to cancel such bid and to forfeit the earnest bid money as deposited by the bidder.
(x) Every lease of property on concessional terms Writ Appeal No.1142/2013
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shall be granted subject to the conditions that if the property leased is not utilized within a period of 3 years for the purpose for which it was given, the Authority may cancel the lease, forfeit the amounts deposited and resume possession thereof. Where the property is land/plot, the utilization of property shall mean that the lease holder constructs at least 10% of the permissible built up area on the leased land/plot;
(xi) The property allotted on concessional rates shall not be put to any use other than the purpose for which it was allotted. Such property shall not be transferred by the lessee to any other entity without obtaining approval from the State Government."
In light of the aforesaid, the Indore Development Authority shall certainly be free to allot the land to the respondent or to any other person, however, as per the rates applicable at the time the NIT is issued or at the time the process of allotment is undertaken, shall be applicable in respect of the plot in question.
The Indore Development Authority is also required to follow the prescribed procedure as laid down under the Rules of 2018.
33- When the matter was being argued, specific queries were raised by this Court to the learned counsel appearing for Indore Development Authority Shri Ravindra Singh Chhabra, learned Additional Advocate General and he was directed to verify from the record and to inform this Court the answers to the queries raised by this Court. The queries raised by this Court and the answers given are as under:-
Writ Appeal No.1142/2013- 39 -
Sr.
No.
Query Answer
01. Whether, till date any allotment has been made No
in favour of any Newspapers, whose allotment was terminated in light of order dated 09/12/2005 passed by this Hon'ble Court in W.P.No.3518/1992 (Vijay Kumar Tiwari Vs. State of M.P. & Ors.).
02. Whether, till date any Regularization has taken No place in favour of any Newspapers, whose allotment was terminated in light of order dated 09/12/2005 passed by this Hon'ble Court in W.P.No.3518/1992 (Vijay Kumar Tiwari Vs. State of M.P. & Ors.).
03. Whether, till date any lease deed has been No executed in favour of any Newspapers, whose allotment was terminated in light of order dated 09/12/2005 passed by this Hon'ble Court in W.P.No.3518/1992 (Vijay Kumar Tiwari Vs. State of M.P. & Ors.).
Thus, in light of the aforesaid, it is evident that after termination of allotment to other newspapers, no fresh allotment has been done till date nor any regularization has taken place. No lease deed has been executed in respect of any newspaper, whose allotment was terminated in light of order dated 09/12/2005 passed by this Court in Writ Petition No.3518/1992 (Vijay Kumar Tiwari Vs. State of M. P. and Others).
34- The respondent before this Court has not be able to point out from any document to establish that any regularization has taken place in respect of other newspapers nor has been able to point out nor able to bring on record any lease deed, which has been executed in favour of any newspaper, whose allotment was Writ Appeal No.1142/2013
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terminated in light of order dated 09/12/2005 passed by this Court in Writ Petition No.3518/1992 (Vijay Kumar Tiwari Vs. State of M. P. and Others).
35- In the present case, the land in question belongs to Indore Development Authority and as argued by learned Advocate General Shri Purushaindra Kaurav the value of the land is approximately Rs.200 Crores and no auction of any kind has taken place in the matter and the petitioner wants the land to be allotted to him and a lease deed to be executed for peanuts.
36- The State Government has framed Rules for allotment of land and now there is a prescribed procedure for allotting the land belonging to public body like Indore Development Authority. It is not a case where the land is being allotted to the respondent and the decision has been taken for social good, public good or common good like allotment of affordable houses to members of Scheduled Caste and Schedule Tribe or implementation of housing scheme for Below Poverty Line families.
37- In the considered opinion of this Court, if allotment of land and execution of sale deed in favour of respondent is not for social good, public good or common good, it cannot be dissipated in favour of private entrepreneur virtually free of cost or for consideration not commensurate with its worth without attracting Writ Appeal No.1142/2013
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Article 14 and 39(b) of the Constitution of India.
38- The aforesaid view has been taken by the apex Court in the case of Goa Foundation Vs. Sesa Sterlite Limited and Others reported in (2018) 4 SCC 218. The apex Court in the aforesaid case was dealing with renewal of mining leases and keeping in view the judgment delivered in the case of Goa Foundation : (2014) 6 SCC 590, the apex Court has held that State of Goa should grant fresh mining leases instead of granting a second renewal. The second renewal was held to be illegal and was set aside. The apex Court in the aforesaid case in paragraphs No.61 to 80.5 has held as under:-
"61. As mentioned in the Grant of Mining Leases Policy there were several options available to the State of Goa. It took the view that all its options were foreclosed post the decision of the High Court and it was obliged to grant a second renewal of the mining leases. We have already held that this was not so and that the decision to grant a second renewal of the mining leases was erroneous and fresh leases were required to be granted in accordance with the decision in Goa Foundation [(2014) 6 SCC 590]. In view of our conclusion, the discussion on whether the State of Goa should have auctioned the mining leases through a process of competitive bidding is now rendered academic. However, since detailed submissions were made by learned counsel on both sides, including by the learned Additional Solicitor General, we propose to express our views on the subject.
62. The discussion on the question of auction being the only method of allocation or disposal of natural resources arose due to the view expressed by this Court in Centre for Public Interest Litigation v. Union of India [(2012) 3 SCC 1]. In that decision (hereafter referred to as CPIL - although this case is generally referred to as the 2G scam case) the Court dealt with the question of following a non-discriminatory policy for alienation of natural resources. While doing so it was observed that an auction is "perhaps the best method for discharging this Writ Appeal No.1142/2013
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burden" and concluded by holding that "while (2012) 3 SCC 1 transferring or alienating the natural resources, the State is duty- bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process." This led to the belief that the view of this Court was that natural resources should be alienated or disposed of only by auction and by no other method. The Court held in paragraphs 95 and 96 of the Report as follows: (Centre for Public Interest case [(2012) 3 SCC 1]) "95. This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum, etc. it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest.
96. In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty- bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process." [Emphasis supplied]
63. In Manohar Lal Sharma v. Principal Secretary [(2014) 9 SCC 516] a Bench of three judges of this Court paraphrased the above passages and observed that the view expressed in CPIL [Centre for Public Interest Litigation vs. Union of India, (2012) 3 SCC 1] necessitated a reference by the President of India to this Court under Articel143(1) of the Constitution being Special Reference No. 1 - Natural Resources Allocation, In re.
Special Reference No.1 of 2012. (2012) 10 SCC 1.
64. What was the Advisory Opinion given by this Court in Natural Resources Allocation? Among the questions referred for opinion were the following: (SCC p. 41, para 1) Writ Appeal No.1142/2013
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Question 1. Whether the only permissible method for disposal of all natural resources across all sectors and in all circumstances is by the conduct of auctions?
Question 2. Whether a broad proposition of law that only the route of auctions can be resorted to for disposal of natural resources does not run contrary to several judgments of the Supreme Court including those of the larger Benches?
65. In the Reference, it was submitted before the Constitution Bench that paragraphs 94 to 96 in CPIL laid down the ratio vis-à-vis disposal of natural resources. It was argued that "these paragraphs lay down, as a proposition of law, that all natural resources across all sectors, and in all circumstances are to be disposed of by way of public auction, and on the other [hand], it was urged that the observations therein were made only qua spectrum."
66. The submissions made by learned counsel were then discussed and thereafter this Court recorded its conclusions between paragraphs 82 and 84 of Natural Resources Allocation. In paragraph 84, it was held: (2012) 10 SCC 1 "84. Thus, having come to the conclusion that 2G case [Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1] does not deal with modes of allocation for natural resources, other than spectrum, we shall now proceed to answer the first question of the Reference pertaining to other natural resources, as the question subsumes the essence of the entire reference, particularly the set of first five questions."
[Emphasis supplied].
67. Thereafter, while answering the first question in the Reference, the Court considered the issue from various perspectives. It first dealt with the issue in the context of Article 14 and Article 14 39(b) of the Constitution and concluded in paragraph 120 of the Report that the disposal of natural resources for revenue maximization through auctions is not a constitutional mandate. It was held: (Natural Resources Allocation Case, (2012) 10 SCC 1, SCC p.88) "120. Therefore, in conclusion, the submission that the mandate of Article 14 is that any disposal of a natural resource for commercial use must be for revenue maximisation, and thus by auction, is based neither on law nor on logic. There is no constitutional imperative in the matter of economic policies--Article 14 does not predefine any economic policy as a constitutional mandate. Even the mandate of Article 39(b) imposes no restrictions on the means adopted Writ Appeal No.1142/2013
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to subserve the public good and uses the broad term "distribution", suggesting that the methodology of distribution is not fixed. Economic logic establishes that alienation/allocation of natural resources to the highest bidder may not necessarily be the only way to subserve the common good, and at times, may run counter to public good. Hence, it needs little emphasis that disposal of all natural resources through auctions is clearly not a constitutional mandate."
[Emphasis supplied].
68. The issue was then considered from the standpoint of legitimate deviations from an auction. After adverting to several decisions of this Court Centre for Public Interest Litigation v. Union of India (CPIL case or 2G scam case) where auctions were not the favoured method of allocation of natural resources, it was held between paragraphs 129 and 131 of the Report as follows: (Natural Resources Allocation Case, (2012) 10 SCC 1, SCC p.92) "129. Hence, it is manifest that there is no constitutional mandate in favour of auction under Article
14. The Government has repeatedly deviated from the course of auction and this Court has repeatedly upheld such actions. The judiciary tests such deviations on the limited scope of arbitrariness and fairness under Article 14 and its role is limited to that extent. Essentially, whenever the object of policy is anything but revenue maximisation, the executive is seen to adopt methods other than auction.
130. A fortiori, besides legal logic, mandatory auction may be contrary to economic logic as well. Different resources may require different treatment. Very often, exploration and exploitation contracts are bundled together due to the requirement of heavy capital in the discovery of natural resources. A concern would risk undertaking such exploration and incur heavy costs only if it was assured utilisation of the resource discovered: a prudent business venture would not like to incur the high costs involved in exploration activities and then compete for that resource in an open auction. The logic is similar to that applied in patents. Firms are given incentives to invest in research and development with the promise of exclusive access to the market for the sale of that invention. Such an approach is economically and legally sound and sometimes necessary to spur research and development. Similarly, bundling exploration and exploitation contracts may be necessary to spur growth in a specific industry.
Writ Appeal No.1142/2013- 45 -
131. Similar deviation from auction cannot be ruled out when the object of a State policy is to promote domestic development of an industry, like in Kasturi Lal case, (2012) 10 SCC 1, discussed above. However, these examples are purely illustrative in order to demonstrate that auction cannot be the sole criterion for alienation of all natural resources."
[Emphasis supplied]
69. Finally, the issue was considered from the point of view of the potential of abuse in allocation of natural resources other than through auction and in this context it was held in paragraph 135 of the Report: (Natural Resources Allocation Case, (2012) 10 SCC 1, SCC pp.93-94) "135. Therefore, a potential for abuse cannot be the basis for striking down a method as ultra vires the Constitution. It is the actual abuse itself that must be brought before the court for being tested on the anvil of constitutional provisions. In fact, it may be said that even auction has a potential of abuse, like any other method of allocation, but that cannot be the basis of declaring it as an unconstitutional methodology either. These drawbacks include cartelisation, the "winner's curse" (the phenomenon by which a bidder bids a higher, unrealistic and unexecutable price just to surpass the competition; or where a bidder, in case of multiple auctions, bids for all the resources and ends up winning licences for exploitation of more resources than he can pragmatically execute), etc. However, all the same, auction cannot be called ultra vires for the said reasons and continues to be an attractive and preferred means of disposal of natural resources especially when revenue maximisation is a priority. Therefore, neither auction, nor any other method of disposal can be held ultra vires the Constitution, merely because of a potential abuse."
[Emphasis supplied].
70. The conclusion arrived at by the Constitution Bench was then recorded between paragraphs 148 and 150 of the Report in the following words: (Natural Resources Allocation Case, (2012) 10 SCC 1, SCC pp.98-99) "148. In our opinion, auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra vires the constitutional mandate.
Writ Appeal No.1142/2013- 46 -
149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of the Constitution. Hence, rather than prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable and capricious due to its antimony with Article 14 of the Constitution.
150. In conclusion, our answer to the first set of five questions is that auctions are not the only permissible method for disposal of all natural resources across all sectors and in all circumstances."
[Emphasis supplied]
71. It is therefore more than explicit that there is no constitutional requirement (let alone a mandate) for allocation of natural resources through the auction method (other than spectrum) but at the same time the auction process should not be given a go-bye without any justification - the decision to give a go-bye is judicially reviewable though the scope of judicial review might be rather restricted. The melting pot of allocation of a natural resource, a social or welfare purpose and adherence to the requirements of Articles 14 and 39(b) of the Constitution in matters of policy was a great leap forward fashioned by the Constitution Bench. Consequently, while there is no mandate, constitutional or otherwise, that natural resource allocation must be only by auction, it is certainly "a more preferable method". There are exceptions, such as when the natural resource allocation is for a "social or welfare purpose". On the other hand if the natural resource allocation is "for commercial pursuits of profit maximising private entrepreneurs" de hors any social or welfare purpose, then judicial review would be permissible and Article 14 of the Constitution would be attracted and if the executive action is found to be arbitrary, it would be struck down. Therefore, when it comes to natural resource allocation, Writ Appeal No.1142/2013
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the executive has a somewhat limited elbow room.
72. In his concurring opinion, Justice Khehar took the view (in paragraph 186 of the Report) that: (Natural Resources Allocation Case, (2012) 10 SCC 1, SCC p.137) "186. ...when natural resources are made available by the State to private persons for commercial exploitation exclusively for their individual gains, the State's endeavour must be towards maximisation of revenue returns." [Emphasis supplied] The learned judge concluded his opinion by agreeing that an auction is one of the price recovery mechanisms, but not the only one for allocation of natural resources. "That should not be understood to mean that it can never be a valid method for disposal of natural resources." It was further held that natural resources cannot be alienated by way of largesse - there must be a reciprocal consideration either in the form of earning revenue or sub-serving the common good or both. The learned judge had this to say: (Natural Resources Allocation Case, (2012) 10 SCC 1, SCC pp.143-44) "199. The policy of allocation of natural resources for public good can be defined by the legislature, as has been discussed in the foregoing paragraphs. Likewise, policy for allocation of natural resources may also be determined by the executive. The parameters for determining the legality and constitutionality of the two are exactly the same. In the aforesaid view of the matter, there can be no doubt about the conclusion recorded in the main opinion that auction which is just one of the several price recovery mechanisms, cannot be held to be the only constitutionally recognised method for alienation of natural resources. That should not be understood to mean that it can never be a valid method for disposal of natural resources (refer to paras 186 to 188 of my instant opinion).
200. I would, therefore, conclude by stating that no part of the natural resource can be dissipated as a matter of largesse, charity, donation or endowment, for private exploitation. Each bit of natural resource expended must bring back a reciprocal consideration. The consideration may be in the nature of earning revenue or may be to "best subserve the common good". It may well be the amalgam of the two. There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth. One set of citizens cannot prosper at the cost of another set of citizens, for that would not be fair or reasonable."
[Emphasis supplied] Writ Appeal No.1142/2013
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73. This issue was considered in Goa Foundation as well. The Court adverted to Natural Resources Allocation in paragraph 81 of the Report and pithily expressed its view that the manner of granting a mining lease is a policy decision of the State Government, but the decision can be examined by way of judicial review. It was held: (Goa Foundation Case, (2014) 6 SCC 590, SCC p. 634) "81. We are of the considered opinion that it is for the State Government to decide as a matter of policy in what manner the leases of these mineral resources would be granted, but this decision has to be taken in accordance with the provisions of the MMDR Act and the Rules made thereunder and in consonance with the constitutional provisions and the decision taken by the State of Goa to grant a mining lease in a particular manner or to a particular party can be examined by way of judicial review by the Court." [Emphasis supplied] It was then declared in paragraph 87.5 of the Report that: (SCC p.637) "87.5. It is for the State Government to decide as a matter of policy in what manner mining leases are to be granted in future but the constitutionality or legality of the decision of the State Government can be examined by the Court in exercise of its power of judicial review." [Emphasis supplied]
74. Similarly, in Manohar Lal Sharma (2014) 9 SCC 516, this Court adverted to the issue and noted the following in paragraph 98 of the Report: (SCC p. 563) "98. The Constitution Bench [Natural Resources Allocation] clarified that the statement of law in 2G case [CPIL] that while transferring or alienating the natural resources, the State is duty-bound to adopt the method of auction was confined to the specific case of spectrum and not for dispensation of all natural resources. The Constitution Bench said that findings of this Court in 2G case were limited to the case of spectrum and not beyond that and that it did not deal with the modes of allocation for natural resources other than spectrum."
75. The Court in Manohar Lal Sharma [(2014) 9 SCC 516] also referred to the views expressed by Justice Khehar and held, in paragraph 104 of the Report:
"104. In light of the above legal position, the argument that auction is the best way to select private parties as per Article 39(b) does not merit Writ Appeal No.1142/2013
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acceptance."
76. This Court then exercised its power of judicial review and considered the merits of the explanation given by the Central Government for not adopting the competitive bidding route for the allocation of coal blocks. The various submissions made, the various hurdles faced (including objections of the State Governments) as well as the impracticality of opening up the allocation of coal blocks to competitive bidding were considered and then it was held (after opening the window of Article 14 of the Constitution) in paragraph 110 of the Report:
(Manohar Lal Sharma v. Union of India, (2014) 9 SCC 516) "110. The above facts show that it took almost 8 years in putting in place allocation of captive coal blocks through competitive bidding. During this period, many coal blocks were allocated giving rise to present controversy, which was avoidable because competitive bidding would have brought in transparency, objectivity and very importantly given a level playing field to all applicants of coal and lowered the difference between the market price of coal and the cost of coal for the allottee by way of premium which would have accrued to the Government. Be that as it may, once it is laid down by the Constitution Bench of this Court in Natural Resources Allocation that the Court cannot conduct a comparative study of various methods of distribution of natural resources and cannot mandate one method to be followed in all facts and circumstances, then if the grave situation of shortage of power prevailing at that time necessitated private participation and the Government felt that it would have been impractical and unrealistic to allocate coal blocks through auction and later on in 2004 or so there was serious opposition by many State Governments to bidding system, and the Government did not pursue competitive bidding/public auction route, then in our view, the administrative decision of the Government not to pursue competitive bidding cannot be said to be so arbitrary or unreasonable warranting judicial interference. It is not the domain of the Court to evaluate the advantages of competitive bidding vis-à-
vis other methods of distribution/disposal of natural resources. However, if the allocation of subject coal blocks is inconsistent with Article 14 of the Constitution and the procedure that has been followed in such allocation is found to be unfair, unreasonable, discriminatory, non-transparent, capricious or suffers from favouritism or nepotism and violative of the mandate of Article 14 of the Writ Appeal No.1142/2013
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Constitution, the consequences of such unconstitutional or illegal allocation must follow."
[Emphasis supplied]
77. More recently in M/s. Ajar Enterprises Private Limited v. Satyanarayan Somani22 this Court once again examined the issue of distribution of natural resources and held: (SCC p.785, para 49) "49. Undoubtedly, disposal of natural resources by auction is not a mandatory principle for, as the Constitution Bench held,23 individual statutes may provide for modalities of transfer by alternate modes which subserve public interest. ..... The choice of methods is not left to the unbridled discretion of a public authority. Where a public authority exercises an executive prerogative, it must nonetheless act in a manner which would subserve public interest and facilitate the distribution of scarce natural resources in a manner that would achieve public good. Where a public authority implements a policy, which is backed by a constitutionally recognised social purpose intended to achieve the welfare of the community, the considerations which would govern would be different from those when it alienates natural resources for commercial exploitation. When a public body is actuated by a constitutional purpose embodied in the Directive Principles, the considerations which weigh with it in determining the mode of alienation should be such as would achieve the underlying object. In certain cases, the dominant consideration is not to maximize revenues but to achieve social good such as when the alienation is to provide affordable housing to members of the Scheduled Castes or Tribes or to implement housing schemes for Below the Poverty Line (BPL) families. In other cases where natural resources are alienated for commercial exploitation, a public authority cannot 2017 (10) SCALE 346 Natural Resource Allocation allow them to be dissipated at its unbridled discretion at the cost of public interest." [Emphasis supplied ]
78. Till fairly recently, policy matters particularly of economic policy were hands-off as far as the courts were concerned.24 But the recent decisions of this Court, including by the Constitution Bench in its advisory jurisdiction, have partially modified this theory and kept open the window to judicially review such a policy if it does not serve the common good as understood in Article 39(b) of the Constitution, if it violates Article 14 of the Constitution and alienates natural resources for Writ Appeal No.1142/2013
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maximizing profits of private entrepreneurs while sidelining Article 39(b) of the Constitution. "The legislature and the executive are answerable to the Constitution and it is there where the judiciary, the guardian of the Constitution, must find the contours to the powers of disposal of natural resources, especially Article 14 and Article 39(b) of the Constitution, Natural Resources Allocation, In re, Special Reference No.1 of 2012, (2012) 10 SCC 1, para 95]."
79. Notwithstanding this, a Court must exercise restraint and not set aside Government policy only because it disagrees with it or because a better policy could be framed or simply because it has the power to set aside the policy. Policies framed by the State, after due consideration, must be BALCO Employees' Union (Regd) v. Union of India, (2002) 2 SCC 333 at paragraphs 46 and 47 Paragraph 95 of the Natural Resource Allocation decision respected and given enough elbow room and flexibility for implementation. Of course, there would be occasions when the implementation of a policy has teething problems or some lacuna is discovered at a slightly later stage, but that does not mean that policy itself is defective. Therefore, Courts must be very cautious and circumspect in diluting or setting aside a policy and must do so only if it is constitutionally unavoidable, otherwise good governance could be a casualty.
80. The conclusions that could be drawn from all these decisions are:
80.1. It is not obligatory, constitutionally or otherwise, that a natural resource (other than spectrum) must be disposed of or alienated or allocated only through an auction or through competitive bidding;
80.2. Where the distribution, allocation, alienation or disposal of a natural resource is to a private party for a commercial pursuit of maximizing profits, then an auction is a more preferable method of such allotment;
80.3. A decision to not auction a natural resource is liable to challenge and subject to restricted and limited judicial review under Article 14 of the Constitution;
80.4. A decision to not auction a natural resource and sacrifice maximization of revenues might be justifiable if the decision is taken, inter alia, for the social good or the public good or the common good;
80.5. Unless the alienation or disposal of a natural resource is for the common good or a social or welfare purpose, it cannot be dissipated in favour of a private entrepreneur virtually free of cost or for a consideration not commensurate with its worth without attracting Article 14 and Article 39(b) of the Constitution."Writ Appeal No.1142/2013
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Keeping in view the law laid down by the apex Court in the aforesaid case, in the considered opinion of this Court a plot worth Rs.200 Crores cannot be allotted to respondent as directed by the learned Single Judge and no mandamus can be issued as done by the learned Single Judge for execution of lease deed in favour of the petitioner therein that too after receiving few lakhs from the respondent therein.
39- The apex Court in the case of Bharti Airtel Limited Vs. Union of India reported in (2015) 12 SCC 1 has relied upon the law laid down by the apex Court in the case of Natural Resources Allocation, In re, Special Reference No.1 of 2012 reported in 2012 (10) SCC 1. It was an appeal by Bharti Airtel Limited under Section 18 of the Telephone Regulatory Authority of India (TRAI) Act, 1997. Paragraphs No.75 and 76 of the aforesaid judgment reads as under:-
"75. Reliance is placed on the observations made in the Natural Resources Allocation, In reference No.1 of 2012, (2012) 10 SCC 1, in paragraphs 82 and 146 in support of the submissions of the licensees that auction is not the only method of disposal of natural resources. In our opinion, the licensees' reliance on these paragraphs is wholly misconceived. These two paragraphs, instead of supporting the case of the licensees, are destructive of their contention: (SCC pp. 72 & 98) "82. Further, the final conclusions summarized in paragraph 102 of the judgment (SCC) in 2G case make no mention about auction being the only permissible and intra vires method for disposal of natural resources; the findings are limited to the case of spectrum. In case the Court had actually Writ Appeal No.1142/2013
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enunciated, as a proposition of law, that auction is the only permissible method or mode for alienation/allotment of natural resources, the same would have found a mention in the summary at the end of the judgment.
146. To summarize in the context of the present Reference, it needs to be emphasized that this Court cannot conduct a comparative study of the various methods of distribution of natural resources and suggest the most efficacious mode, if there is one universal efficacious method in the first place. It respects the mandate and wisdom of the executive for such matters. The methodology pertaining to disposal of natural resources is clearly an economic policy. It entails intricate economic choices and the Court lacks the necessary expertise to make them. As has been repeatedly said, it cannot, and shall not, be the endeavour of this Court to evaluate the efficacy of auction vis-à-vis other methods of disposal of natural resources. The Court cannot mandate one method to be followed in all facts and circumstances. Therefore, auction, an economic choice of disposal of natural resources, is not a constitutional mandate. We may, however, hasten to add that the Court can test the legality and constitutionality of these methods. When questioned, the Courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are 135 Page 136 ultra vires and intra vires the provisions of the Constitution. Nevertheless, it cannot and will not compare which policy is fairer than the other, but, if a policy or law is patently unfair to the extent that it falls foul of the fairness requirement of Article 14 of the Constitution, the Court would not hesitate in striking it down."
(emphasis supplied)
76. In para 82, of Natural Resources Allocation, In reference No.1 of 2012, (2012) 10 SCC 1, this Court was categoric that the findings of 2G case were limited to the case of spectrum. Similarly, in para 146, this Court observed that this Court "respects the mandate and wisdom of the executive" in the matter of choosing the most suitable method of distribution of natural resources. This Court noted that this is clearly a matter of an economic policy entailing an intricate economic choice and the Court lacks necessary expertise to make such choice. In the light of the observation in para 82 that at least in the matter of disposal of spectrum, auction is the only "permissible and intra vires method for disposal". Therefore, the submission of the Writ Appeal No.1142/2013
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licensees is required to be rejected."
40- In the case of Manohar Lal Sharma Vs. Principal Secretary and Others reported in (2014) 9 SCC 516, the apex Court in paragraphs No.98 to 104 and 110 has held as under:-
"98. The Constitution Bench (Natural Resources Allocation, In re, Special Reference No.1 of 2012, (2012) 10 SCC 1), clarified that the statement of law in 2G case (Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1) that while transferring or alienating the natural resources, the State is duty bound to adopt the method of auction was confined to the specific case of spectrum and not for dispensation of all natural resources. The Constitution Bench said that findings of this Court in 2G case (Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1) were limited to the case of spectrum and not beyond that and that it did not deal with the modes of allocation for natural resources other than spectrum.
99. The Constitution Bench (Natural Resources Allocation, In re, Special Reference No.1 of 2012, (2012) 10 SCC 1) while dealing with the aspect of disposal of natural resources other than auction, divided the consideration of this aspect under two heads, viz., "Legitimate deviations from auction" and "Potential of abuse". Under the head "Legitimate deviations from auction" the Court considered the earlier decisions of this Court in Kasturi Lal Lakshmi Reddy v. State of J&K, (1980) 4 SCC 1, Sachidanand Pandey v. State of W.B. (1987) 2 SCC 295, Haji T.M. Hassan Rawther v. Kerala Financial Corp. (1988) 1 SCC 166, M.P.Oil Extraction v. State of M. P. (1997) 7 SCC 592, Netai Bag v. State of W.B. (2000) 8 SCC 262 and Villianur Iyarkkai Padukappu Maiyam v. Union of India (2009) 7 SCC 561, which we have briefly noted above, and it was held that there is no constitutional mandate in favour of auction under Article 14. In the main judgment (Natural Resources Allocation, In re, Special Reference No.1 of 2012, (2012) 10 SCC 1), the Constitution Bench stated as under:
(SCC p.92, paras 129-31) "129. Hence, it is manifest that there is no constitutional mandate in favour of auction under Article 14. The Government has repeatedly deviated from the course of auction and this Court has repeatedly upheld such actions. The judiciary tests such deviations on the limited scope of arbitrariness and fairness under Article 14 and its role is limited to that extent. Essentially whenever the object of policy is anything but revenue maximization, the Executive Writ Appeal No.1142/2013
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is seen to adopt methods other than auction.
130. A fortiori, besides legal logic, mandatory auction may be contrary to economic logic as well.
Different resources may require different treatment. Very often, exploration and exploitation contracts are bundled together due to the requirement of heavy capital in the discovery of natural resources. A concern would risk undertaking such exploration and incur heavy costs only if it was assured utilization of the resource discovered; a prudent business venture, would not like to incur the high costs involved in exploration activities and then compete for that resource in an open auction. The logic is similar to that applied in patents. Firms are given incentives to invest in research and development with the promise of exclusive access to the market for the sale of that invention. Such an approach is economically and legally sound and sometimes necessary to spur research and development. Similarly, bundling exploration and exploitation contracts may be necessary to spur growth in a specific industry.
131. Similar deviation from auction cannot be ruled out when the object of a State policy is to promote domestic development of an industry, like in Kasturi Lal's case, discussed above. However, these examples are purely illustrative in order to demonstrate that auction cannot be the sole criteria for alienation of all natural resources."
100. While dealing with the argument that even if the method of auction was not a mandate under Article 14, it must be the only permissible method due to the susceptibility of other methods to abuse, the Court under the head "Potential of abuse" held that a potential for abuse cannot be the basis for striking down the method as ultra vires the Constitution. The Court noted two decisions of this Court in R.K. Garg v. Union of India, (1981) 4 SCC 675 and D.K. Trivedi & Sons v. State of Gujarat, 1986 Supp SCC 20 and held that neither auction nor any other method of disposal can be held ultra vires the Constitution merely because of a potential abuse. The Constitution Bench stated as under: (Natural Resources Allocation, In re, Special Reference No.1 of 2012, (2012) 10 SCC 1), SCC pp.93-94 para 135) "135. Therefore, a potential for abuse cannot be the basis for striking down a method as ultra vires the Constitution. It is the actual abuse itself that must be brought before the Court for being tested on the anvil of constitutional provisions. In fact, it may be said that even auction has a potential of abuse, like Writ Appeal No.1142/2013
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any other method of allocation, but that cannot be the basis of declaring it as an unconstitutional methodology either. These drawbacks include cartelization, "winners curse" (the phenomenon by which a bidder bids a higher, unrealistic and unexecutable price just to surpass the competition; or where a bidder, in case of multiple auctions, bids for all the resources and ends up winning licenses for exploitation of more resources than he can pragmatically execute), etc. However, all the same, auction cannot be called ultra vires for the said reasons and continues to be an attractive and preferred means of disposal of natural resources especially when revenue maximization is a priority. Therefore, neither auction, nor any other method of disposal can be held ultra vires the Constitution, merely because of a potential abuse."
101. In Natural Resources Allocation Reference the Constitution Bench, in the main judgment, thus, concluded that auction despite being a more preferable method of alienation / allotment of natural resources cannot be held to be constitutional requirement or limitation for alienation of all natural resources and, therefore, every method other than auction cannot be struck down as ultra vires the constitutional mandate. The Court also opined that auction as a mode cannot be conferred the status of a constitutional principle. While holding so, the Court held that alienation of natural resources is a policy decision and the means adopted for the same are, thus, executive prerogatives. The Court summarized the legal position as under:
"146. To summarise in the context of the present Reference, it needs to be emphasised that this Court cannot conduct a comparative study of the various methods of distribution of natural resources and suggest the most efficacious mode, if there is one universal efficacious method in the first place. It respects the mandate and wisdom of the executive for such matters. The methodology pertaining to disposal of natural resources is clearly an economic policy. It entails intricate economic choices and the Court lacks the necessary expertise to make them. As has been repeatedly said, it cannot, and shall not, be the endeavour of this Court to evaluate the efficacy of auction vis-à-vis other methods of disposal of natural resources. The Court cannot mandate one method to be followed in all facts and circumstances. Therefore, auction, an economic choice of disposal of natural resources, is not a constitutional mandate. We may, however, hasten to add that the Court can Writ Appeal No.1142/2013
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test the legality and constitutionality of these methods. When questioned, the courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are ultra vires and intra vires the provisions of the Constitution. Nevertheless, it cannot and will not compare which policy is fairer than the other, but, if a policy or law is patently unfair to the extent that it falls foul of the fairness requirement of Article 14 of the Constitution, the Court would not hesitate in striking it down.
147. Finally, market price, in economics, is an index of the value that a market prescribes to a good. However, this valuation is a function of several dynamic variables: it is a science and not a law. Auction is just one of the several price discovery mechanisms. Since multiple variables are involved in such valuations, auction or any other form of competitive bidding, cannot constitute even an economic mandate, much less a constitutional mandate.
148. In our opinion, auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra vires the constitutional mandate.
149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of the Constitution. Hence, rather than prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable Writ Appeal No.1142/2013
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and capricious due to its antimony with Article 14 of the Constitution."
102. J.S. Khehar, J., while concurring with the main opinion has stated that auction is certainly not a constitutional mandate in the manner expressed, but it can be applied in some situations to maximise revenue returns, to satisfy legal and constitutional requirements. In his view, if the State arrives at a conclusion, in a given situation, that maximum revenue would be earned by auction of the particular natural resource, then that alone would be the process which it would have to adopt. In the penultimate para of his opinion, J.S. Khehar, J., observed:
(Natural Resources Allocation, In re, Special Reference No.1 of 2012, (2012) 10 SCC 1), SCC pp.143-44, para 199) "199. .........there can be no doubt about the conclusion recorded in the "main opinion" that auction which is just one of the several price recovery mechanisms, cannot be held to be the only constitutionally recognised method for alienation of natural resources. That should not be understood to mean, that it can never be a valid method for disposal of natural resources..............".
103. In Natural Resources Allocation Reference, the Constitution Bench said that reading auction as a constitutional mandate would be impermissible because such an approach may distort another constitutional principle embodied in Article 39(b). In the main judgment, with reference to Article 39(b), the Court stated as follows: (SCC pp.85-88, paras 113, 115-16 & 119-20) "113...The disposal of natural resources is a facet of the use and distribution of such resources. Article 39(b) mandates that the ownership and control of natural resources should be so distributed so as to best subserve the common good. Article 37 provides that the provisions of Part IV shall not be enforceable by [pic]any court, but the principles laid down therein are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. Therefore, this Article, in a sense, is a restriction on "distribution" built into the Constitution. But the restriction is imposed on the object and not the means. The overarching and underlying principle governing "distribution" is furtherance of common good. But for the achievement of that objective, the Constitution uses the generic word "distribution". Distribution has broad contours and cannot be limited to meaning only one method i.e. auction. It envisages all such methods available for distribution/allocation of natural Writ Appeal No.1142/2013
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resources which ultimately subserve the "common good".
*** *** ***
115. It can thus, be seen from the aforequoted paragraphs that the term "distribute" undoubtedly, has wide amplitude and encompasses all manners and methods of distribution, which would include classes, industries, regions, private and public sections, etc. Having regard to the basic nature of Article 39(b), a narrower concept of equality under Article 14 than that discussed above, may frustrate the broader concept of distribution, as conceived in Article 39(b). There cannot, therefore, be a cavil that "common good" and "larger public interests" have to be regarded as constitutional reality deserving actualisation.
116. The learned counsel for CPIL argued that revenue maximisation during the sale or alienation of a natural resource for commercial exploitation is the only way of achieving public good since the revenue collected can be channelised to welfare policies and controlling the burgeoning deficit. According to the learned counsel, since the best way to maximise revenue is through the route of auction, it becomes a constitutional principle even under Article 39(b). However, we are not persuaded to hold so. Auctions may be [pic]the best way of maximising revenue but revenue maximisation may not always be the best way to subserve public good. "Common good" is the sole guiding factor under Article 39(b) for distribution of natural resources. It is the touchstone of testing whether any policy subserves the "common good"
and if it does, irrespective of the means adopted, it is clearly in accordance with the principle enshrined in Article 39(b) *** *** ***
119. The norm of "common good" has to be understood and appreciated in a holistic manner. It is obvious that the manner in which the common good is best subserved is not a matter that can be measured by any constitutional yardstick--it would depend on the economic and political philosophy of the Government. Revenue maximisation is not the only way in which the common good can be subserved. Where revenue maximisation is the object of a policy, being considered qua that resource at that point of time to be the best way to subserve the Writ Appeal No.1142/2013
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common good, auction would be one of the preferable methods, though not the only method. Where revenue maximisation is not the object of a policy of distribution, the question of [pic]auction would not arise. Revenue considerations may assume secondary consideration to developmental considerations.
120. Therefore, in conclusion, the submission that the mandate of Article 14 is that any disposal of a natural resource for commercial use must be for revenue maximisation, and thus by auction, is based neither on law nor on logic. There is no constitutional imperative in the matter of economic policies-- Article 14 does not predefine any economic policy as a constitutional mandate. Even the mandate of Article 39(b) imposes no restrictions on the means adopted to subserve the public good and uses the broad term "distribution", suggesting that the methodology of distribution is not fixed. Economic logic establishes that alienation/allocation of natural resources to the highest bidder may not necessarily be the only way to subserve the common good, and at times, may run counter to public good. Hence, it needs little emphasis that disposal of all natural resources through auctions is clearly not a constitutional mandate."
104. In light of the above legal position, the argument that auction is a best way to select private parties as per Article 39(b) does not merit acceptance. The emphasis on the word "best" in Article 39(b) by the learned senior counsel for the intervener does not deserve further discussion in light of the legal position exposited by the Constitution Bench in Natural Resources Allocation Reference with reference to Article 39(b). We are fortified in our view by a recent decision of this Court (three Judge Bench) in Goa Foundation v. Union of India (2014) 6 SCC 590, wherein following Natural Resources Allocation Reference, it was stated: (Goa Foundation Case, SCC p.634, para 81) "81. ...it is for the State Government to decide as a matter of policy in what manner the leases of these mineral resources would be granted, but this decision has to be taken in accordance with the provisions of the MMDR Act and the Rules made thereunder and in consonance with the constitutional provisions...".
110. The above facts show that it took almost 8 years in putting in place allocation of captive coal blocks through competitive bidding. During this period, many coal blocks were Writ Appeal No.1142/2013
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allocated giving rise to present controversy, which was avoidable because competitive bidding would have brought in transparency, objectivity and very importantly given a level playing field to all applicants of coal and lowered the difference between the market price of coal and the cost of coal for the allottee by way of premium which would have accrued to the Government. Be that as it may, once it is laid down by the Constitution Bench of this Court in Natural Resources Allocation Reference20 that the Court cannot conduct a comparative study of various methods of distribution of natural resources and cannot mandate one method to be followed in all facts and circumstances, then if the grave situation of shortage of power prevailing at that time necessitated private participation and the Government felt that it would have been impractical and unrealistic to allocate coal blocks through auction and later on in 2004 or so there was serious opposition by many State Governments to bidding system, and the Government did not pursue competitive bidding/public auction route, then in our view, the administrative decision of the Government not to pursue competitive bidding cannot be said to be so arbitrary or unreasonable warranting judicial interference. It is not the domain of the Court to evaluate the advantages of competitive bidding vis-à-vis other methods of distribution / disposal of natural resources. However, if the allocation of subject coal blocks is inconsistent with Article 14 of the Constitution and the procedure that has been followed in such allocation is found to be unfair, unreasonable, discriminatory, non-transparent, capricious or suffers from favoritism or nepotism and violative of the mandate of Article 14 of the Constitution, the consequences of such unconstitutional or illegal allocation must follow."
In light of the aforesaid, no allotment can be done in the manner and method it has been directed by the learned Single Judge in the present case. The land in question is situated in commercial area. Undisputedly, it is not a part of Press Complex and the plots in the Press Complex cannot be compared with the plots which are situated in commercial area and is valued at about Rs.200 Crores. The State Government has framed Rules for allotment of land and the Indore Development Authority does not Writ Appeal No.1142/2013
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have any choice except to follow the Rules framed on the subject.
41- In the case of Centre for Public Interest Litigation and Others Vs. Union of India and Others reported in (2012) 3 SCC 1. The apex Court in paragraphs No.74 to 76, 85 and 89 has held as under:-
"74. At the outset, we consider it proper to observe that even though there is no universally accepted definition of natural resources, they are generally understood as elements having intrinsic utility to mankind. They may be renewable or non- renewable. They are thought of as the individual elements of the natural environment that provide economic and social services to human society and are considered valuable in their relatively unmodified, natural form. A natural resource's value rests in the amount of the material available and the demand for it. The latter is determined by its usefulness to production. Natural resources belong to the people but the State legally owns them on behalf of its people and from that point of view natural resources are considered as national assets, more so because the State benefits immensely from their value.
75. The State is empowered to distribute natural resources. However, as they constitute public property/national asset, while distributing natural resources the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest. Like any other State action, constitutionalism must be reflected at every stage of the distribution of natural resources. In Article 39(b) of the Constitution it has been provided that the ownership and control of the material resources of the community should be so distributed so as to best subserve the common good, but no comprehensive legislation has been enacted to generally define natural resources and a framework for their protection. Of course, environment laws enacted by Parliament and State Legislatures deal with specific natural resources i.e forest, air, water, coastal zones, etc. 76 (Ed.:Para 76 corrected vide Official Corrigendum No.F.3/Ed.B.J./9/2012 dated 6-2-2012). The ownership regime relating to natural resources can also be ascertained from international conventions and customary international law, common law and national constitutions. In international law, it rests upon the concept of sovereignty and seeks to respect the principle of permanent sovereignty (of peoples and nations) over Writ Appeal No.1142/2013
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(their) natural resources as asserted in the 17th Session of the United Nations General Assembly and then affirmed as a customary international norm by the International Court of Justice in the case of Democratic Republic of Congo v.
Uganda (Ed.: Armed Activities on the Territory of the Congo (Democratic Repuboic of the Congo v. Uganda), ICJ Reports 2005, p. 168). Common law recognises States as having the authority to protect natural resources insofar as the resources are within the interests of the general public. The State is deemed to have a proprietary interest in natural resources and must act as guardian and trustee in relation to the same. Constitutions across the world focus on establishing natural resources as owned by, and for the benefit of, the country. In most instances where constitutions specifically address ownership of natural resources, the sovereign State, or, as it is more commonly expressed, "the People", is designated as the owner of the natural resources.
85. As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide the State in determining the actual mechanism for distribution of natural resources. In this regard, the doctrine of equality has two aspects: first, it regulates the rights and obligations of the State vis-à-vis its people and demands that the people be granted equitable access to natural resources and/or its products and that they are adequately compensated for the transfer of the resource to the private domain; and second, it regulates the rights and obligations of the State vis-à-vis private parties seeking to acquire/use the resource and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties.
89. In conclusion, we hold that the State is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the doctrine of equality and larger public good."
42- The Hon'ble Supreme Court has taken care of various judgments delivered on subject from time to time and in the considered opinion of this Court in case of allotment of land a fair and transparent procedure has to be adopted. The writ of mandamus cannot be issued in the manner and method it has been Writ Appeal No.1142/2013
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done by the learned Single Judge directing the Indore Development Authority to execute the lease deed in favour of the petitioner. The impugned judgment delivered by the learned Single Judge deserves to be set aside and is accordingly set aside.
43- The Hon'ble Supreme Court in a recent judgment dated 30/10/2018 delivered in Civil Appeal No.7184-7185 of 2013 (J. S. Luthra Academy & Another Vs. State of Jammu and Kashmir & Others) has dealt with a issue of allotment of public land / government land without following the process of auction.
44- In the aforesaid case, the land was allotted to J. S. Luthra Academy (an Educational Institution) and the allotment was challenged before the Jammu and Kashmir High Court and the Division Bench of the Jammu and Kashmir High Court has set aside the allotment of land, which was done in favour of J. S. Luthra Academy (an Educational Institution). The Hon'ble Supreme Court in the aforesaid case has dealt with all the leading cases in respect of allocation of natural resources / allotment of government land / allotment of land belonging to public bodies and in paragraph No.6 of the aforesaid judgment the Hon'ble Supreme Court has held as under:-
"6. This Court in a series of cases including Centre for Public Interest Litigation v. Union of India, 2012 3 SCC 1 (popularly known as the "2G case"), in Natural Resources Allocation, In Re. Special Reference No. of 1/2012, (2012) 10 Writ Appeal No.1142/2013
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SCC 1, Manohar Lal Sharma v. Principal Secy., (2014) 9 SCC 516, Bharti Airtel Limited v. Union Of India, (2015) 12 SCC 1, and Goa Foundation v. Sesa Sterlite Ltd., (2018) 4 SCC 218 has formulated the guidelines for allocation of natural resources by the State. In Bharti Airtel Ltd. v. Union of India, (2015) 12 SCC 1, this Court summed up the principles governing the allocation of natural resources by the State laid down in Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1 ("the 2G case") as follows:
"41. The licensor/Union of India does not have the freedom to act whimsically. As pointed out by this Court in 2G Case [Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1] in the aboveextracted paragraph, the authority of the Union is fettered by two constitutional limitations: firstly, that any decision of the State to grant access to natural resources, which belong to the people, must ensure that the people are adequately compensated and, secondly, the process by which such access is granted must be just, non-arbitrary and transparent, vis-à-vis private parties seeking such access." (emphasis supplied) Referring to the observations in the 2G case, the Court also highlighted that the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest, and that it must always adopt a rational method for disposal of public property, and ensure that a nondiscriminatory method is adopted for distribution and alienation, which would necessarily result in national/public interest.
The principles governing the distribution of natural resources by the State were also discussed in the decision of the constitutional bench of this Court in Natural Resources Allocation, In Re, Special Reference No. 1 of 2012, (2012) 10 SCC 1. In para 149 thereof, the Court observed as follows:
"149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of Writ Appeal No.1142/2013
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the Constitution."
This decision emphasised that the ultimate goal to be served was that of the public good, and all methods of distribution of natural resources that ultimately served the public good would be valid, as reflected in the following observations:
"120. ...There is no constitutional imperative in the matter of economic policies--Article 14 does not predefine any economic policy as a constitutional mandate. Even the mandate of Article 39(b) imposes no restrictions on the means adopted to subserve the public good and uses the broad term "distribution", suggesting that the methodology of distribution is not fixed. Economic logic establishes that alienation/allocation of natural resources to the highest bidder may not necessarily be the only way to subserve the common good, and at times, may run counter to public good. Hence, it needs little emphasis that disposal of all natural resources through auctions is clearly not a constitutional mandate."
It would be useful to note at this juncture that in this decision, the Court assessed the position of law developed through a catena of decisions, including Netai Bag & Ors. v. State of W.B. & Ors., (2000) 8 SCC 262, 5 M&T Consultants v. S.Y. Nawab, (2003) 8 SCC 100, and Villianur Iyarkkai Padukappu Maiyam v. Union of India, (2009) 7 SCC 561, wherein it has been held that non-floating of tenders or holding of auction by itself is not sufficient to hold that the exercise of power was arbitrary. It would be useful to reproduce the following observations from Netai Bag (supra), which were also relied upon by the Court in Natural Resources Allocation, In Re (supra) to highlight that the ultimate test is only that of fairness of the decision-making process and compliance with Article 14 of the Constitution:
"19. ... There cannot be any dispute with the proposition that generally when any State land is intended to be transferred or the State largesse decided to be conferred, resort should be had to public auction or transfer by way of inviting tenders from the people. That would be a sure method of guaranteeing compliance with the mandate of Article 14 of the Constitution. Non-floating of tenders or not holding of public auction would not in all cases be deemed to be the result of the exercise of the executive power in an arbitrary manner. Making an exception to the general rule could be justified by the State executive, if challenged in appropriate proceedings. The constitutional courts cannot be expected to presume the alleged irregularities, Writ Appeal No.1142/2013
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illegalities or unconstitutionality nor can the courts substitute their opinion for the bona fide opinion of the State executive. The courts are not concerned with the ultimate decision but only with the fairness of the decision making process."
The above principles were also reiterated in Manohar Lal Sharma (supra), wherein this Court observed at para 110:
"It is not the domain of the Court to evaluate the advantages of competitive bidding vis-à-vis other methods of distribution/disposal of natural resources. However, if the allocation of subject coal blocks is inconsistent with Article 14 of the Constitution and the procedure that has been followed in such allocation is found to be unfair, unreasonable, discriminatory, nontransparent, capricious or suffers from favouritism or nepotism and violative of the mandate of Article 14 of the Constitution, the consequences of such unconstitutional or illegal allocation must follow."
In Ajar Enterprises (P) Ltd. v. Satyanarayan Somani, (2018) 12 SCC 756, this Court affirmed the above principles in the following terms:
"49. ...Where a public authority exercises an executive prerogative, it must nonetheless act in a manner which would subserve public interest and facilitate the distribution of scarce natural resources in a manner that would achieve public good. Where a public authority implements a policy, which is backed by a constitutionally recognised social purpose intended to achieve the welfare of the community, the considerations which would govern would be different from those when it alienates natural resources for commercial exploitation. When a public body is actuated by a constitutional purpose embodied in the Directive Principles, the considerations which weigh with it in determining the mode of alienation should be such as would achieve the underlying object."
The position of law developed through these decisions was summed up in the following manner by this Court in Goa Foundation v. Sesa Sterlite Ltd., (2018) 4 SCC 218, after adverting to the various decisions referred to above:
"80.1. It is not obligatory, constitutionally or otherwise, that a natural resource (other than spectrum) must be disposed of or alienated or allocated only through an auction or through competitive bidding; 80.2. Where the distribution, allocation, alienation or disposal of a natural resource is to a private party for Writ Appeal No.1142/2013
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a commercial pursuit of maximising profits, then an auction is a more preferable method of such allotment;
80.3. A decision to not auction a natural resource is liable to challenge and subject to restricted and limited judicial review under Article 14 of the Constitution;
80.4. A decision to not auction a natural resource and sacrifice maximisation of revenues might be justifiable if the decision is taken, inter alia, for the social good or the public good or the common good; 80.5. Unless the alienation or disposal of a natural resource is for the common good or a social or welfare purpose, it cannot be dissipated in favour of a private entrepreneur virtually free of cost or for a consideration not commensurate with its worth without attracting Article 14 and Article 39(b) of the Constitution." (emphasis supplied) From the above decisions, the following principles may be culled out:
(i) Generally, when any land is intended to be transferred by the state, or any state largesse is to be conferred, resort should be had to public auction or transfer by way of inviting tenders from the people. The state must ensure that it receives adequate compensation for the allotted resource. However, non-floating of tender or nonconducting of public auction would not be deemed in all cases to be an arbitrary exercise of executive power.
The ultimate decision of the executive must be the result of a fair decision-making process.
(ii) The allocation must be guided by the consideration of the common good as per Article 39(b), and must not be violative of Article 14. This does not necessarily entail auction of the resource; however, allocation of natural resources to private persons for commercial exploitation solely for private benefit, with no social or welfare purpose, attracts higher judicial scrutiny and may be held to be violative of Article 14 if done by noncompetitive and non-revenue maximizing means.
Keeping in mind the aforementioned principles formulated by this Court in the aforementioned judgments, we have considered the entire material on record. It must be determined as to whether the allocation made in favour of the Academy fell foul of the above principles. In the instant case, the allocation has evidently been done to a private educational institution by non-revenue maximizing means. Assuming that the Academy is Writ Appeal No.1142/2013
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engaged in commercial activities while engaging in its main activity of imparting education to students, two questions remain to be seen: first, whether there was any social or welfare purpose underlying the allocation, i.e., if the furtherance of the public good was the ultimate goal of the allocation so as to justify the non-auctioning of the land, and second, if the allocation is bad for lack of adequate compensation."
The Hon'ble Supreme Court after taking in to account the principle summarized above has upheld the allotment, however, at the same time has directed the allottee to pay Rs.8,00,000/- per kanal in respect of land received gratuitously, which was the average auction price prevailing at the time of allocation, meaning thereby, nothing was given free even to the Educational Institution.
45- In the present case, the respondent wants the land belonging to Indore Development Authority for almost negligible consideration that too dehors the statutory provision governing the field on the ground that in similar circumstances land has been allotted to various other newspapers. It has been stated at bar by the learned Advocate General that after the judgment was delivered by the Division Bench in the first round of litigation, leases have not been renewed in respect of other newspapers and no final order has passed by the Indore Development Authority, otherwise also no relief can be claimed on the ground of negative equality.
46- This Court would like to clarify one more thing that the land for which the petitioner is staking his claim is not a land in the area which is marked for Press Complex, on the contrary the piece Writ Appeal No.1142/2013
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of land is situated in a commercial area surrounded by commercial buildings and therefore, the petitioner can never said to be an identically placed person claiming the land, which is situated in identical place, where the land was allotted to other newspaper groups.
47- Resultantly, the impugned judgment dated 14/11/2013 passed by the learned Single Judge in Writ Petition No.2801/2012 is quashed. The Indore Development Authority shall be free to dispose of the land in question in accordance with law, keeping in view the statutory provisions as contained under the Rules of 2018.
With the aforesaid, writ appeal stands allowed.
Certified copy as per rules.
No order as to costs.
(S. C. SHARMA) (VIRENDER SINGH)
JUDGE JUDGE
Tej
Digitally signed by
Tej Prakash Vyas
Date: 2019.02.21
13:06:53 +05'30'