Andhra HC (Pre-Telangana)
Kolli Sai Pratheeka And Others vs Unit Trust Of India And Others on 16 April, 2001
Equivalent citations: 2001(3)ALD297, 2001(3)ALT146
Author: B. Sudershan Reddy
Bench: B. Sudershan Reddy
ORDER
1. This batch of writ petitions may be disposed of by a common order since common questions of law and fact arise for consideration.
2. The petitioners seek a writ of mandamus declaring the action of the respondents in terminating the Rajlakshmi Unit Scheme-1992 as illegal, arbitrary and violative of principles of natural justice. The petitioners pray for a consequential direction directing the respondents to continue the scheme.
3. The Unit Trust of India (UTI) launched a scheme known as 'Raj Lakshmi Unit Scheme, 1992 (RUS-1992)' (for short 'the Scheme') as an exclusive scheme for the benefit of women. The scheme itself is proclaimed to be a tribute by the UTI to women. The Scheme is meant for all those who care for her future, when she would enter the most critical phase of her life, around the age of 21 and encounters challenges of marriage, entry and adjustment in a new household, motherhood and economic independence. This Scheme is intended to meet the critical financial needs of the woman during the critical phase of her life. Indeed, a very laudable object.
4. The Scheme provides for an investment that will grow 21 times in 20 years. An investment of Rs.1,000/- invested in the name of a female child upto and including the age of one year will become Rs.21,000/- after 20 years and Rs.5,000/-will become over one lakh. Depending upon the age of the child for whom the investment is made, the maturity value will vary from a minimum of Rs.11,000/- to Rs.21,000/- as shown below.
Entry Age (in years) Minimum amount Lock in period (in years) Maturity amount payable after completion of lock in period Upto & including 1 Rs.1,000/-
20Rs. 21.000/-
Above 1 to 2 Rs.1,000/-
19Rs. 18,000/-
Above 2 to 3 Rs.1,000/-
18Rs. 15,000/-
Above 3 to 4 Rs.1,000/-
17Rs. 13.000/-
Above 4 to 5 Rs.1,000/-
16Rs. 11,000/-
5. The Scheme further declares that the maturity value will be given only to the beneficiary. Till then nobody can touch it. It is supposed to be an irrevocable gift. The maturity period will be calculated from the date of acceptance of the application. In addition to the above, the Trust may, periodically declare bonus which shall be payable on maturity. Consequently the ultimate return could be still higher. This is the broad scheme.
6. The gravamen of the complaint in this batch of writ petitions relates to the decision taken by the UTI to terminate the scheme with effect from 1st October, 2000. The decision to terminate the very scheme is challenged in this batch of writ petitions by the petitioners, who have invested in the Scheme for the benefit of their minor daughters.
7. It is broadly the case of the petitioners that the termination of the scheme is without jurisdiction and ultra vires the scheme framed under Section 21 of the Unit Trust of India Act, 1963 (for short 'the Act'). It is also contended that there is no provision in the scheme to cancel the investment. The unilateral termination of the Scheme without any prior notice to the investors is violative of principles of natural justice. It is also contended that the Scheme, if at all, could have been terminated only after obtaining the prior permission from the Central Government. Intimation of proposal to terminate the Scheme to the Government of Rajasthan is of no consequence. These are the grounds, broadly, on which the termination of the Scheme is challenged in this batch of writ petitions.
8. A detailed counter-affidavit has been filed by the UTI opposing the claim of the petitioners. The counter-affidavit inter alia provides the details and circumstances under which the UTI was constrained to take decision to terminate the Scheme before completing its full term.
9. It is stated in clear terms that the decision to terminate the Scheme has been taken by the Board, which is the highest decision making body, consciously taking into account the prevailing volatile market conditions in equity and debt market and to safeguard the over all interests of the beneficiaries of the scheme. It is a bona fide decision. The termination of the Scheme is and will ensure to the benefit of the beneficiaries of the Scheme.
10. According to the UTI, the Scheme has been terminated not to deny or avoid the future return to a minor child, but to ensure that there is no erosion of the capital of the Scheme to the detriment of the minor child. It is explained that any further continuation of the Scheme might, in the ultimate analysis, have resulted in grave consequences detrimental to the holders of the units.
11. It is the case of the UTI that it is a pragmatic decision taken in the best interest of the unit holders. The Scheme was launched with the objective to invest in debt and equity when the return on debt investment was anticipated at 18% to 20% per annum and return on equity was expected at 15% to 20% per annum. In the said prevailing scenario, at the relevant time when the Scheme was launched, the UTI thought that a return of 16.16% to 16.75% on this Scheme would be a feasible return and was a foreseeable possibility. It is brought to the notice of the Court that on account of steps taken towards the globalisation of the economy and in particular in the direction of opening up the economic and financial sectors led to a sharp decline in domestic interest rates. As a result of such transitory phase in an ever changing economy coupled with a consistent drop in the interest rates, it has become impossible to sustain the potential returns envisaged in 1992 as indicated in the Scheme.
12. The core submission of the UTI as revealed in the counter-affidavit would be worth noticing in its own language:
"When the Scheme was launched in 1992, AAA rated or equivalent papers who offering returns at about 18% p.a. Rates offered by other than AAA instruments were even better. These instruments had tenure of average 5-7 years, which had been maturing during the last few years. Subsequently, due to complete deregulation of interest rates regime as a part of irreversible process of economic and financial sector reforms, the return offered by AAA papers have come down to a maximum of 12.25% p.a. It is, therefore, no longer possible to redeploy the redemption proceeds of earlier investments in debt papers matching the required rate of net return of 16.16% to 16.75% p.a. implicitly offered under the Scheme. Further, many companies have reduced their reliance on domestic borrowings as a means of funding as many of them have been able to fund their requirements through equity/ ADR/GDR/ECB issues."
13. It is also stated that besides, the influx of foreign direct investment (FDI) directly into infrastructure projects is bound to affect this market. It is explained that the transition to a global economy, and in particular in the direction of convertibility of the capital account are bound to create greater volatility till the system settles down. It is under those circumstances, it was considered advisable, prudent and in the interest of unit holders to discontinue this Scheme before any irreversible erosion in the capita! of the Scheme took place.
14. It is contended that if the respondent No.1-UTl is compelled to continue the Scheme any longer, then the return in future may be substantially lower. The continuation would not be in the larger interest of the beneficiaries.
Scheme of the Act:
15. The UTI is a Statutory Corporation constituted and established under the Unit Trust of India Act, 1963. The Corporation itself is established with a view to encouraging saving and investment and participation in the income, profits and gains accruing to the Corporation from the acquisition, holding, management and disposal of securities. Section 2(n) of the Act defines 'Unit'. 'Unit' means a unit issued under a unit scheme. Section 2(r) defines 'unit scheme'. 'Unit Scheme' means a scheme made under Section 21. The general superintendence, direction and management of the affairs and business of the Trust shall vest in a Board of trustees. The Board in discharge of its functions under the Act is mandated to act on business principles regard being had to the interest of the unit holders. The Board of trustees consists of experts in their respective fields and drawn from premier financial institutions. The Chairman is appointed by the Central Government in consultation with the Development Bank (Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964). The following is the composition of the Board of trustees:
10. The Board of trustees shall consist of the following, namely:-
(a) the Chairman to be appointed by the Central Government in consultation with the Development Bank;
(aa) one trustee to be nominated by the Reserve Bank;
(b) four trustees to be nominated by the Development Bank of whom not less than three shall be persons having special knowledge of, or experience in commerce, industry, banking, finance or investment;
(c) one trustee to be nominated by the Life Insurance Corporation;
(d) one trustee to be nominated by the State Bank;
(e) two trustees to be elected in the prescribed manner by the contributing institutions referred to in clause (d) of sub-section (2) of Section 4; and
(f) an executive trustee to be appointed by the Development Bank.
16. The Board makes, from time to time, various schemes for issuing units and for investment by the public. The Schemes are made under Section 21(1) of the Act. The corpus of the scheme in turn is invested in debts, equities and/or other securities as per investment objectives of the respective schemes. Rajlakshmi Unit Scheme - 1992 is also one such scheme made by the first respondent under Section 21(1) of the Act.
17. It is required to notice that a Scheme made has to be a self-contained scheme. Sub-section (3) of Section 22 declares that the capital in respect of a unit scheme shall be held separately from capital in respect of any other unit. The first respondent is barred for applying and utilising the money received on one scheme for the purpose of another.
18. The first question that falls for consideration is whether there is any power for the first respondent to take a decision to terminate the Scheme before the completion of originally intended period?
19. The Scheme itself provides for premature termination, as is evident from clause (xxvii) of the Scheme:
"The scheme may if circumstances so prevail not being in the interest of the Unit holders or the Trust be terminated with sufficient notice to the Government. All unit holders who have participated in the scheme shall be paid the value of the units standing to their credit at the final repurchase fixed for the purpose. Besides receiving the final repurchase price so determined, no further benefit of any kind either by way of increase in the repurchase value or by way of dividend for any subsequent period shall accrue."
20. The Scheme itself is obviously framed by the Board in exercise of its power under sub-section (1) of Section 21, about which there is no dispute. Subsection (3) of Section 21 enables the Board to, from time to time, add to or otherwise amend any Scheme made under subsection (1). It is, therefore, clear that clause (xxvii) enabling the premature termination is incorporated in the Scheme and the power in this regard is traceable to sub-section (3) of Section 21 of the Act. The action, therefore, cannot be held to be without jurisdiction.
21. The period of the scheme was between 16 to 20 years. By the impugned action what has been done by the Board is to reduce the period of scheme and close the scheme on 30-9-2000. There is no dispute whatsoever that the beneficiaries are offered amount due to them on the basis of the same return of about 16.16% to 16.75% per annum as provided for in the scheme itself while paying the redemption proceeds. By the impugned decision, the period has been no doubt drastically curtailed to about 8 to 9 years. In my considered opinion, the impugned action on the part of the first respondent is nothing but amending the Scheme by reducing the period.
22. Perhaps having realised the difficulty, the petitioners filed an application to amend the prayer in the writ petition seeking declaration to strike down the clause (xxvii) of the Scheme and Section 21 of the Unit Trust of India Act, 1963. It is contended that clause (xxvii) of the Scheme enables premature termination of the Scheme on the ground as "not being in the interest of the unit holders" and also on the ground "not being in the interest of the Trust" and any termination of the Scheme in the interest of the Trust would be contrary to the purpose of the Act itself. It is further contended that Section 21(3) of the Act does not provide any guidelines for adding or otherwise amending the Scheme made under sub-section (1) of Section 21. Sri S. Ramachandra Rao, learned senior Counsel appearing on behalf of the petitioners contends that Section 21 (3) of the Act confers arbitrary and un-canalised power upon the Board from time to time to add to or otherwise amend any Scheme. Therefore, Section 21(3) of the Act is liable to be struck down by duly declaring the same as an arbitrary provision. According to the learned senior Counsel, the provision is violative of Article 14 of the Constitution of India.
23. As rightly contended by Sri Harish Salve, learned Solicitor-General of India, a statutory provision does not become arbitrary by merely characterising the same as an arbitrary one.
24. It is well settled that a law made by the Parliament can be struck down by the Courts only on two grounds; viz., (1) lack of legislative competence and (2) violation of any of the Fundamental Rights guaranteed in Part III of the Constitution or of any other constitutional provision. No enactment can be struck down by just saying that it is arbitrary or unreasonable. No enactment can be struck down on the ground that the Court thinks it unjustified. "It is one thing to say that a restriction imposed upon a Fundamental Right can be struck down if it is disproportionate, excessive or unreasonable and quite another thing to say that the Court can strike down enactment if it thinks it unreasonable, unnecessary or unwarranted". (See: State of AP. v. Mc.Dowell & Co., ).
25. It cannot be said that Section 21(3) of the Act confers any un-canalised and unguided discretionary power upon the Board from time to time to add to or otherwise amend the Scheme made under sub-section (1) of Section 21 of the Act. It is well settled that every discretionary power is not necessarily a discriminatory, particularly when the legislative policy is clear from the statute. Section 9 of the Act mandates that the Board shall, in discharging its function under this Act, act on business principles regard being had to the interest of the unit holders. The Board is bound to bear the legislative mandate in mind in formulating the Schemes and/or making amendments or additions to any Scheme. The legislative policy, as to how the Board is required to exercise and discharge its functions, is clearly laid down and delineated in Section 9 of the Act itself. In the circumstances, it cannot be said that sub-
section (3) of Section 21 confers any uncontrolled discretionary power upon the Board to add or amend, from time to time, to the scheme already made under Section 21 of the Act. The very scheme itself is framed for the purpose of providing facilities for participation in the income, profits and gains, arising out of the acquisition, holding, management or disposal of securities by the Trust. The legislative policy for making the schemes and additions or amendments to the schemes is clearly evident from the provisions of the Act itself.
26. It is well settled that the discretionary power is not necessarily a discriminatory power and abuse of power is not to be easily assumed particularly where the discretion is confined not to a petty official but to an expert body (See: Jyoti Sarup v. Board of Revenue, ).
27. It is true, total absence of guidelines cannot be defended on, the ground that the discretion is vested in high authorities. The prophetic words of Sawant, J., in Delhi Transport Corporation v. DTC Mazdoor Congress, 1991 Supp (1) SCC 600, may aptly be recalled in this context:
"There is need to minimise the scope of the arbitrary use of power in all walks of life. It is inadvisable to depend on the good sense of the individuals, however high-placed they may be. It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness does not go with the posts, however high they may be. There is only a complacent presumption that those who occupy high posts have a high sense of responsibility.
The presumption is neither legal nor rational. History does not support it and reality does not warrant it. In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect, of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law". (Emphasis is of mine)
28. But in the instant case, we have already noticed the guidelines and legislative policy incorporated in the Act itself, which are required to be borne in mind by the Board both in making the Scheme or altering it. The Act does not leave the entire discretion to the Board to add or amend, from time to time, according to its own whims and fancies. The Board's power is structured and guided by the provisions of the Act itself, to which a reference had already been made. Whimsical and fanciful decisions of 'authorities' are liable to be struck down by the constitutional Courts. Possibility of abuse of power and discretion itself is no ground to strike down a provision of Law. Abuse of power and discretion is liable to be struck down. The clause (xxvii) does not suffer from any legal infirmity. It does not run counter to the scheme and object of the Act as alleged. At any rate, the said clause enables termination of the Scheme if circumstances so prevail not being in the interest of the Unit holders or the Trust. It is required to notice that the interest of the unit holders and the Trust is not at variance. Making provision for termination of the Scheme if circumstances so prevail not being in the interest of the Trust would in no manner defeat the purpose of the Scheme or the Act as contended.
29. In my considered opinion, neither the clause (xxvii) of the Scheme, which enables the Board to terminate the Scheme prematurely, nor the Section 21(3) of the Act suffer from any constitutional vice. The contention is accordingly rejected.
30. The next question required to-be considered is whether the impugned decision suffers from any legal infirmity. Whether it is a bona fide one? Whether the relevant factors have been taken into consideration by the Board before taking the impugned decision?
31. We have already in ex tenso referred to the reasons and the relevant factors that were taken into consideration by the first respondent to reduce the period of Scheme. It is the case of the UTI that the decision to terminate the scheme was taken consciously keeping in mind the best interest of the investors, viz., minor female children. It was considered advisable, prudent and in the interest of unit holders to discontinue this Scheme before any irreversible erosion in the capital of the Scheme took place. The Board in its wisdom thought that the influx of foreign direct investment directly into infrastructure projects is bound to affect this market. In its vision, the Board thought that the cost of capital is bound to come down as more and more capital is invested in the country. The Board after taking various factors into consideration came to the conclusion, for a scheme like the one on hand; to rely heavily on equity, might have its own inherent risk. The Board noticed that when the scheme in question was launched in 1992, AAA rated or equivalent papers were offering returns at about 18% p.a. Rates offered by other than AAA instruments were even better. These instruments had tenure of average 5-7 years, which had been maturing during the last few years. But due to complete deregulation of interest rates regime as a part of irreversible process of economic and financial sector reforms, the return offered by AAA papers have come down to a maximum of 12.25% p.a. In the circumstances, the Board came to the conclusion that it is no longer possible to redeploy the redemption proceeds of earlier investments in debt papers matching the required rate of net return of 16.16% to 16.75% per annum implicitly offered to the beneficiaries under the Schemed
32. There is no other material placed before the Court disputing the claim put forth by the first respondent. Therefore, there is nothing on record not to accept the explanation of the first respondent that if the period of scheme is allowed to run to its full extent as conceived originally it may end up in loss to the beneficiaries.
Parameters of Judicial Review:
33. On what basis and parameters this Court in exercise of its judicial review jurisdiction can substitute its opinion for that of the expert body?
34. The decision taken by the Board of the first respondent with regard to the Scheme is applicable to all the investors. It is in the nature of policy decision appropriately taken and perceived to be in the best interest of the investors. Such policy decisions depend upon number of circumstances and some of which we have already noticed. It is neither desirable nor advisable for the Courts to direct the State or its instrumentalities, as the case may be, to adopt a particular policy, which the Court thinks fit and proper. "The Court cannot be propelled into the unchartered ocean of Government policy". (See: Bennett Coleman v. Union of India, ). Formulation of such policy decisions will depend upon an over all assessment and if a policy decision is taken on a reasonable basis, it is not for the Courts to interfere with the policy itself. It is a different thing altogether that the Courts may in appropriate cases "interfere if the policy decision is patently arbitrary, discriminatory or mala fide. "The Courts do not possess the expertise and are consequently incompetent to pass judgment on the appropriateness or the adequacy of a particular policy".
35. Having regard to the magnitude, complexity and technical nature of the enquiry involved in the matter and keeping in view the far reaching implications of continuing the Scheme, as was originally conceived for which the petitioners have prayed, I must confess that the judicial review proceeding of the nature initiated is not an appropriate one for determination of such matters. In what manner, the Scheme should be formulated and implemented, bearing in mind the fundamental object of the statute, viz., encouraging savings and investment and participation in the income, profits and gains and the best interest of the unit holders, is a matter for decision exclusively within the province of the Board. Such complex fiscal decision may not ordinarily attract the power of judicial review.
36. The State and its instrumentalities are entitled to make pragmatic adjustments, which may be required in the particular circumstances.
37. It may be apposite to recall the classic statement of law made by the Supreme Court of the United States in Metropolis Theatre Co. v. State of Chicago, 57 Ed 730, that "the problem of government are practical ones and may justify, if they do not require", rough accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not discernible; the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void".
38. As observed by Brandeis, J., in New State Ice Co. v. Liebmann, 285 US 262, 280 (1932), the remedy sought by the petitioners "might bring evils worse than the present disease. The obstacles to success seem insuperable. The economic and social sciences are largely uncharted seas. We have been none too successful in the modest essays in economic control already entered upon. The new proposal involves a vast extension of the area of control. Merely to acquire the knowledge essential as a basis for the exercise of this multitude of judgments would be a formidable task; and each of the thousands of these judgments would call for some measure "of prophecy. Even more serious are the obstacles to success inherent in the demands which execution of the project would make upon human intelligence and upon the character of men. Man is weak and his judgment is at best fallible...... There must be power in the States and the Nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs..... To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation".
39. In Tata Cellular v. Union of India, (1994) 6 SCC 651, the Supreme Court after reviewing its earlier decisions declared and reiterated the principles of judicial review. It is held by the Court that "the judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision making process itself. It is thus different from an appeal. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Apart from the fact that the Court is hardly equipped to do so, it would not be desirable either. It is not the function of a Judge to act as a super board, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator". (Emphasis is of mine).
However, a reference is made by the learned senior Counsel relied on a decision of Life Insurance Corporation India v. Consumer Education & Research Centre, , in support of his submission that the respondent Corporation being an instrumentality of the State is required to act in a fair, just and equitable manner. Any decision of the Corporation which is not fair, just and equitable is susceptible to be judicially reviewed by this Court, is the submission made by the learned senior Counsel. There is absolutely no dispute whatsoever about the proposition urged by the learned senior Counsel. Sri Harish Salve, learned Solicitor-General did not raise any objection as to the maintainability of the writ petitions. On the other hand, the learned Solicitor-General conceded that the issue is a justiciable one since the scheme framed by the Corporation has a statutory flavour. The Supreme Court in LIC of India (supra) observed that "in the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined in a manner that is fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. Duty to act fairly is part of fair procedure envisaged under Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest".
40. We have already noticed the factors that were taken into consideration by the Board in reaching the impugned decision. No extraneous factors have been taken into consideration. Only relevant and germane factors were taken into consideration.
41. The decision in Air India Ltd v. Cochin International Airport Ltd., , in no manner supports the case of the petitioners.
Contentions relating to procedural impropriety:
42. It is also contended that the impugned decision is violative of principles of natural justice. The impugned decision is in the nature of policy decision. Lakhs of investors are stated to have invested in the Scheme. It is neither possible nor necessary to issue notice to more than 12 lakh investors. In the counter-affidavit, it is stated that more than six lakh investors have already requested the Corporation for redemption/conversion. In my considered opinion, each one of the investors is not entitled for any individual notice before premature termination of the scheme. The principles of natural justice have no application in such a situation. The Scheme itself contains a termination clause. There is no provision in the Scheme for issuing any prior notice before termination of the Scheme by the first respondent-Corporation. At any rate, nothing is stated in the affidavit filed in support of the writ petition as to what probable objections the petitioners could have raised had a notice been issued to them. No material, which ought to have been taken into consideration by the respondent Corporation if any available with the petitioners, is placed before the Court.
43. In the circumstances, I find it difficult to accede to the submissions made by the learned Senior Counsel appearing on behalf of the petitioners.
44. It is contended that the Scheme containing a clause enabling the premature termination was published on 17-4-1993 after the petitioners made their investment and they are not bound by the said clause. The plea put forth by the petitioners in this regard is self-destructive. Admittedly, the investments are made by the petitioners after the scheme is framed by the respondent-Corporation. In the application form itself, it is stated that the units will be issued subject to the provisions of the Raj Lakshmi Unit Scheme. In the counter-affidavit filed by the respondents, it is explained that it was the standard practice followed by the Corporation during 1992-93 that the detailed provisions of the Scheme were available at respondent No.1's office to all concerned. The application form only highlighted the board returns and some other features of the scheme. It is difficult to accept that the petitioners invested their amounts without knowing anything about the Scheme itself. The unit holders as well as UTI are bound by all the clauses incorporated in the Scheme. It is nobody's case that particular clause enabling the premature termination was not there in the Scheme. It is not as if the said 'offending' clause has been notified after the unit holders made their investments in the scheme. The clause is an integral part of the Scheme itself. The whole of the Scheme has been notified in the Gazette after the investments were made by the interested persons.
45. The Scheme made under Section 21(1) of the Act and every amendment made thereof under subsection (3) is required to be notified in the official gazette. It is nobody's case that the investments are made after notification of the scheme in the official gazette. The investments were made pursuant to the scheme made and announced by the respondent Corporation before its notification. In the circumstances, it cannot be said that the scheme itself came into operation after its publication in the official gazette.
46. It is contended that the termination of the Scheme, if any, in the circumstances can be made only with sufficient notice to the Central Government. It is contended that the Unit Trust of India Act, 1963 is a Central Act enacted by the Parliament and in the context the Government means the Central Government. There is no statutory provision requiring any such notice to the Central Government. Clause (xxvii) of the Scheme speaks about the sufficient notice to the 'Government'. The Government is defined under the Scheme itself and for the purpose of the said scheme; the 'Government' is the Government of Rajasthan, which has invested in the said Scheme. Therefore, there is no requirement to issue any notice to the Central Government. The contention is accordingly rejected.
Promissory Estoppels
47. The learned senior Counsel also contended that the respondents are estopped from terminating the Scheme midway. We have already noticed as to what circumstances and factors led the Board to take the impugned decision, Obviously, such a decision has been taken for the reasons, which were beyond the control of the respondent Corporation. It was necessitated on account of radical transformation of market conditions on the advent of globalisation process in the last 7 or 8 years. The investors were duly put on notice that all securities and investments carry market risk. This has been made clear in clause (ix) of the application form itself.
48. The Kerala High Court in OP No.27838 of 2000, dated 16-2-2001 speaking through the Chief Justice Mrs. K.K. Usha while dealing with the validity of the very impugned decision of the Corporation observed:
"We do not find any merit in the contention that the 3rd respondent is estopped from taking a decision to terminate the scheme midway. The circumstances under which the 3rd respondent was compelled to take such a decision have been already explained in detail. The decision was necessitated due to the fluctuation in the market conditions during the last about seven years. The schemes formulated by the 3rd respondent are securities based schemes and like all security investments, these schemes also carry market risks. This has been made clear as mentioned earlier in Clause 9 of the application form itself. Under these circumstances, those who had infested in Rajalakshmi Unit Scheme 1992 are expectecd to foresee a situation whereby a prudent management of the funds of the respective scheme, it will not be possible to achieve the initial goal of return at the rate of 16.16% to 16.75% if the scheme has to be continued for its full term. In view of the provisions contained in Section 22(2) of the Act, each scheme is self-contained and it is not possible to apply the money received for one scheme for the purpose of another. Therefore, the scheme had to be terminated. Under these circumstances, it cannot be contended that the investors were taken unaware by the impugned decision".
49. At any rate, there is no foundation i in any of the petitions to invoke the ctrine of promissory estoppel. The Supreme Court in Kasinka Trading v. Union of India, , observed:
"It has been settled by this Court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority "to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the Court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation".
50. In the instant case, nothing is stated in the affidavit filed by the petitioners as to how the doctrine of promissory estoppel would be applicable to the facts on hand. We have already noticed the facts and circumstances of the case, under which the impugned decision has been taken. In fact, there is no assurance or promise as such by the respondent Corporation that the Scheme would be continued under all and any circumstances. On the other hand, the units were issued subject to the Scheme itself. The Scheme itself contains a clause enabling the Board to amend the scheme and terminate if circumstances so prevail not being in the interest of the Unit holders or the Trust. The contention lacks merit. The same is accordingly rejected.
51. It is noteworthy that the Scheme stood terminated on 30-9-2000 itself. It is stated that about more than 6 lakh investors have already accepted the redemption or expressed their choice for conversion to other schemes made by the first respondent Corporation.
52. This Court, in my considered opinion, in exercise of its jurisdiction under Article 226 of the Constitution of India cannot compel the respondent Corporation to continue the scheme. Any such mandamus from this Court may amount to compelling the respondent Corporation to perform an impossible act. Such a course is not permissible in law. It had already been noticed that each scheme made by the first respondent Corporation is self-contained and the Court cannot compel the first respondent to apply the money received by it for one scheme for the purpose of another. Any such direction from this Court would amount to compelling the respondent Corporation to act contrary to mandatory provisions contained in Section 22(2) of the Act. A writ of mandamus does not lie directing the State or its instrumentalities to act contrary to law.
53. It is required to notice that the High Courts of Bombay, Kerala, Patna and Punjab and Haryana took a uniform view and accordingly upheld the very impugned decision. I do not find any reason or justification to take a different view other than the one taken by various High Courts in the country.
54. For all the aforesaid reasons, I do not find any merit in these writ petitions.
55. The writ petitions are accordingly dismissed. Each party to bear their own costs.