Himachal Pradesh High Court
Jagdish Chand Memorial Trust vs State Of H.P on 13 December, 2017
Author: Sandeep Sharma
Bench: Sanjay Karol, Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH
SHIMLA
CWP No.475 of 2017
Judgment Reserved on: 29.11.2017
.
Date of decision: 13.12.2017
Jagdish Chand Memorial Trust ....Petitioner
Versus
State of H.P. ....Respondent
Coram
The Hon'ble Mr.Justice Sanjay Karol, Acting Chief Justice.
The Hon'ble Mr.Justice Sandeep Sharma, Judge.
Whether approved for reporting ?1 Yes.
For the Petitioner: Mr.M.L. Sharma, Advocate.
For the Respondent -State: Mr.Shrawan Dogra, Advocate
General with Mr.Anup Rattan,
Mr.Romesh Verma, Additional
Advocate Generals and Mr.Kush
Sharma, Deputy Advocate
General.
Per Sandeep Sharma,J.
In the petition at hand, we are obliged to adjudicate, "Whether 'No Objection Certificate' issued by Department of Ayurveda, Government of Himachal Pradesh, after having obtained necessary permission from Minister-in-charge of Ayurveda Department could be withdrawn subsequently by the Department on the pretext that Hon'ble Chief Minister, Himachal Pradesh has desired to place the matter before Cabinet?"
1Whether the reporters of Local Papers may be allowed to see the judgement? Yes.::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 2
2. Before exploring answer to aforesaid moot question involved in the present case, certain undisputed facts, which may be necessary for having bird's eye view, are that the petitioner-
.
Trust (hereinafter referred to as `Trust'), which came to in existence on 13th December, 2012 (Annexure P-2) with the objective to start and establish Medical Research, Hospital, Nursing Institutes, Diagnostic Centres, Educational Institutions and Rural Development Activities, started its Ayurvedic Hospital in the name and style of 'Himachal Ayurvedic Hospital' at Nalagarh with a capacity of 50 beds in the year 2014. Since Trust decided to start Ayurvedic Medical College and Hospital at Nalagarh with a capacity of 60 seats of Bachelor of Ayurvedic Medicine and Surgery (hereinafter referred to as 'BAMS') Course, it, after having obtained necessary 'No Objection Certificate' (for short 'NOC') and permission from the authorities concerned, preferred an application to the State Government for grant of NOC. Though, there is no application placed on record, whereby formal proposal was made by the Trust to the Government of Himachal Pradesh, but perusal of communication dated 6th February, 2015 (Annexure P-8), issued from the office of Commissioner Industries, Himachal Pradesh to the Additional Chief Secretary (Health) and Principal Secretary (Ayurveda) to the Government of Himachal Pradesh, suggests that Dr.Bhupesh Gupta, Trustee of the petitioner-Trust met Hon'ble the Chief Minister, Himachal Pradesh in the first phase of Investment meet held in Mumbai on 5th November, 2014 and proposed to set up an Ayurvedic College & Hospital in Baddi-
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 3Barotiwala-Nalagarh area (for short `BBN area'). Since the subject matter was related to Department of Ayurveda, Commissioner Industries, vide communication, referred hereinabove, requested .
the Department to process the case/proposal initiated by the above named Trustee as per the provisions and Rules of the Department. It also emerge from aforesaid communication that Project Proposal received in this regard from the Trust was forwarded to the Department of Health to the Government of Himachal Pradesh. Further perusal of communication dated 20th March, 2015, issued by Joint Director Ayurveda, Himachal Pradesh, (Annexure P-9) suggests that Department of Ayurveda, taking note of proposal made by the Trust, advised it to apply on the prescribed format i.e. Form No.1, disclosing therein all details for want of 'NOC' from the State Government as prescribed by the Central Council of Indian Medicine, Government of India (for short 'CCIM'). Department of Ayurveda also directed the Trust to furnish detailed project report so that the project site is inspected by the Departmental Committee. Perusal of communications dated 28th April, 2015 and 7th May, 2015( Annexures P-10 & P-11) made available on record suggests that site was inspected by the Committee constituted by the Department of Ayurveda on 16th May, 2015, whereafter, vide communication dated 20th February, 2017, issued by the Principal Secretary (Ayurveda) to the Government of Himachal Pradesh to the Chairman of the Trust, 'No Objection Certificate/Letter of Intent' (for short 'NOC/LOI') was granted in favour of Trust for establishment of Himachal Ayurvedic ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 4 Medical College & Hospital Nalagarh, Himachal Pradesh to start 60 seats of BAMS course, in Private Sector subject to certain terms and conditions as contained in Annexure P-12. As per condition .
No.7 contained in letter dated 20th February, 2017, respondent-
State reserved liberty to itself to withdraw NOC, if the Society fails to fulfill the norms of CCIM as well as terms and conditions contained in the LOI.
3. Subsequent to grant of aforesaid NOC/LOI by State Government of Himachal Pradesh, Trust also obtained consent of affiliation from r Himachal Pradesh University, who, vide communication dated 2nd March, 2017 (Annexure P-13), agreed in principle to affiliate the proposed Himachal Ayurvedic Medical College and Hospital with admission capacity of 60 seats to be established at Nalagarh, Himachal Pradesh for starting BAMS course subject to grant of permission by Government of India, Ministry of Health and Family Welfare, New Delhi. Vide Communication dated 5th March, 2017 (Annexure P-14) Trust sent a communication to Ministry of Ayurvedic, Yoga and Naturopathy, Unani, Siddha and Homeopathy (for short 'AYUSH'), Government of India, New Delhi, seeking therein permission to start first batch classes at the premises of the hospital being run by the Society until the new building remains under construction. Similarly, Trust also deposited an amount of Rs.3.50 lacs by way of Demand Draft with the CCIM, New Delhi on account of registration charges.
On 3rd March, 2017 (Annexure P-16), The Baghat Urban Co-op.
Bank Ltd. also sanctioned loan to the tune of Rs.Five Crores in ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 5 favour of the Trust for starting/promoting Ayurvedic Medical Education and Treatment Methodology through Himachal Ayurvedic Medical College and Hospital Nalagarh District Solan, .
H.P.
4. Thereafter, Department of Ayurveda, Government of Himachal Pradesh, vide communication dated 14th March, 2017, addressed to the Chairman of the Trust, (Annexure P-17), informed that NOC/LOI and extension for validity period of NOC/LOI respectively granted in favour of the Trust for establishment of Himachal Ayurvedic Medical College & Hospital, Nalagarh, to start 60 seats of BAMS course, in Private Sector vide this Department's letters of even number dated 20th February, 2017 and 3rd March, 2017 are hereby withdrawn.
5. In the aforesaid background, Trust being aggrieved and dis-satisfied with the aforesaid action has approached this Court by way of instant petition filed under Article 226 of the Constitution of India praying therein following main relief amongst other:-
"1. To issue of a writ of certiorari quashing impugned order dated 14.03.2017 annexure P-17 being arbitrary, void and illegal or for any other appropriate writ, order or direction in the facts and circumstances of the case."
6. Shri M.L. Sharma, learned counsel appearing for the Trust, vehemently contended that decision, as contained in communication dated 14th March, 2017 (Annexure P-17), whereby NOC/LOI issued in favour of the Trust came to be withdrawn, is ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 6 not sustainable in the eye of law and as such same deserves to be quashed and set aside. While inviting the attention of this Court to various communications, which otherwise have been taken note .
by this Court while discussing the facts enumerated hereinabove, Mr.Sharma strenuously argued that indefeasible right had accrued in favour of Trust with the issuance of communication dated 20th February, 2017, whereby necessary NOC and LOI was issued in favour of Trust, to set up the Ayurvedic Medical College & Hospital at Nalagarh, and as such there was no authority vested in the Department to withdraw the same that too without assigning any reason. Mr.Sharma further contended that bare perusal of communication dated 14th March, 2017, whereby NOC/LOI came to be withdrawn, nowhere disclosed reasons, if any, for withdrawal of NOC, which was granted in favour of Trust after completion of all necessary codal formalities. Mr.Sharma also contended that after initial acceptance of proposal submitted by the Trust, the Trust procured loan to the tune of Rs.five crores and also obtained necessary permissions from the concerned Department to enable the Department of Ayurveda to accord necessary sanction in favour of Trust for setting up Ayurvedic Medial College. Learned counsel, while terming impugned order Annexure P-17 to be totally non-speaking, un-reasoned, forcefully contended that the action of the respondents in withdrawing NOC unilaterally smacks of extraneous consideration and, as such, same needs to be rectified in accordance with law. While refuting the contention of the respondent-Department as put forth in its reply, Mr.Sharma ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 7 further contended that Minister-in-charge of Ayurvedic Department was fully competent to accord sanction/NOC in favour of petitioner-Trust and as such right accrued in favour of Trust .
can't/could not be defeated on the pretext of Rules of Business of the Government of Himachal Pradesh (for short 'Rules of Business') framed by the General Administration Department for guidance of various departments working under the respondent-State.
Mr.Sharma contended that since no reasoning is/was given in the impugned order dated 14th March, 2017 (Annexure P-17), explanation rendered on the part of Department that Hon'ble the Chief Minister desired that such matter be placed before Council of Ministers cannot be accepted because it is well settled law that an order has to be judged by the reasoning and same cannot be allowed to be supplemented by way of explanation/reasoning, if any, rendered in the shape of affidavit.
7. While placing reliance upon the judgment of Hon'ble Apex Court in Hindustan Petroleum Corpn.Ltd. vs. Darius Shapur Chenai and Others, (2005)7 SCC 627, Mr.Sharma contended that orders are not like wine becoming better as they grow old and as such bad orders cannot become valid by reasons assigned subsequent to issuance of such orders. Learned counsel further contended that there is nothing on record from where it can be inferred that the Chief Minister or Governor ever desired under Rule 14 of the Rules of Business to place the matter before the Council of Ministers. Mr.Sharma, while inviting the attention of this Court to para-9(v) of reply filed on behalf of the respondent-
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 8Department, contended that Minister-in-charge is/was competent authority to grant such approval and as such procedural irregularity, if any, committed by Department before issuing .
LOI/NOC cannot have any bearing on the right conferred/accrued in favour of the petitioner-Trust with the issuance of LOI/NOC.
8. Lastly, Mr.Sharma, contended that otherwise also there is nothing to substantiate desire, if any, of Chief Minister and as such, half hearted attempt to justify the palpably illegal order on the part of respondent-department is not tenable and the same deserves to be rejected out rightly.
r Mr.Sharma further contended that otherwise also action of respondent inasmuch as withdrawal of NOC/LOI is hit by doctrine of promissory estoppel and legitimate expectation. While praying for setting aside aforesaid impugned order dated 14th March, 2017 (Annexure P-
17), Mr.Sharma also placed reliance upon the following judgments of Hon'ble Apex Court in support of his aforesaid contentions:-
"1. MRF Ltd.Kottayam vs. Asstt.Commissioner (Assessment) Sales Tax and Others, (2006)8 SCC 702.
2. M/s.Motilal Padampat Sugar Mills Co.Ltd. vs. The State of Uttar Pradesh and others, AIR 1979 SC 621.
3. Hindustan Petroleum Corpn. Ltd. vs. Darius Shapur Chenai and Others, (2005)7 SCC 627.
4. State of Kerala and Others vs. K.G. Madhavan Pillai and Others, (1988)4 SCC 669."
9. Mr.Shrawan Dogra, learned Advocate General, while refuting the aforesaid submissions having been made by learned ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 9 counsel representing the petitioner-Trust as well as averments contained in the writ petition, vehemently contended that respondent-State is/was well within its right to rectify its mistake, .
whereby NOC/LOI came to be issued in favour of respondent erroneously by department after having obtained permission from Minister-in-charge, whereas permission in the case at hand could only be accorded by Council of Ministers headed by Hon'ble the Chief Minister, who was seized of the matter.
10. Learned Advocate General further contended that though matter was already pending before Cabinet with regard to proposal given by Trust for setting up Ayurvedic Medical College and in this regard certain queries were raised by Hon'ble the Chief Minister, but even otherwise, as per Rule 14 of Rules of Business, any matter can be ordered to be brought before the Council by a special direction of the Chief Minister or the Governor under Article 167(c). He further contended that in the case at hand Hon'ble the Chief Minister, taking note of the matter/proposal, desired that such matter should be placed before the Cabinet and accordingly NOC issued in favour of the Trust came to be withdrawn and as such, there is no illegality, if any, in the action of respondent-Department, who inadvertently had issued NOC in favour of the Trust without having obtained necessary permission from the Council of Minister. While referring to Rule 14 of Rules of Business, learned Advocate General contended that all cases referred to in "Schedule" attached to such Rules can be ordered to be brought before the Council of Ministers in accordance with the ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 10 provisions of the Rules ibid subject to the orders of Chief Minister under Rule 16, whereby Chief Minister may direct any case referred to in the "Schedule" to be either circulated to the .
Ministers for opinion or to be discussed at the Meeting of Council.
While refuting the arguments advanced on behalf of petitioner-
Trust that vested right accrued with the Trust with the issuance of NOC, learned Advocate General contended that since Ayurvedic College was proposed to be opened on the request of Trust, it being a policy decision, having State-wide application, required to be decided by Chief Minister or Council of Ministers.
11. Lastly, Mr.Dogra, learned Advocate General, contended that respondent-department, after having noticed irregularity committed by it, rather pointed out by the office of Chief Minister, rightly withdrew NOC granted in favour of the Trust. While praying for dismissal of the petition at hand preferred on behalf of the Trust, learned Advocate General also contended that scope of judicial review, as far as this Court is concerned, is very limited qua policy decision, if any, taken by the respondent-State having State-wide effect. In support of aforesaid contention, he placed reliance upon the following judgments of Hon'ble Apex Court:-
"1. Shri Ram Dayal Yadav vs. State of Himachal Pradesh and Others, 1975(2) S.L.R. 360.::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 11
2. M/s.Rajureshwar Associates vs. State of Maharashtra and Others, AIR 2004 SC 3770.
3. Indian Charge Chrome Ltd. and Another vs. Union of India and Others, (2006)12 SCC 331.
.
4. M/s.Jit Ram Shiv Kumar and Others vs. The State of Haryana and another, AIR 1980 SC 1285.
5. State of B ihar and others vs. Project Uchcha Vidya, Sikshk Sasngh and others, (2006)2 SCC 545.
12. We have heard learned counsel for the parties and gone through the record of the case carefully.
13. Before adverting to the factual matrix of the case vis-à-
vis rival submissions/pleadings adduced on record by the respective parties, it may be noticed that this Court, taking note of serious doubt raised/expressed by learned counsel with regard to stand put forth by respondent in its affidavit with regard to desire of Hon'ble the Chief Minister to place the matter before him, this Court requested learned Advocate General to make available record pertaining to the proposal made by Trust for setting up Medical College and thereafter decision, if any, taken by Hon'ble the Chief Minister/Cabinet. During arguments, learned Advocate General made available aforesaid record, perusal whereof clearly suggests that matter relating to issuance of NOC/LOI in favour of Trust for setting up Ayurvedic Medical College and Hospital at Nalagarh came to be placed before the Council of Ministers in its meeting held on 21st July, 2016, but the same was withdrawn after discussion.
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 1214. Subsequently, the matter was again proposed to be placed before the Council of Ministers in its meeting, wherein brief note relating to scope of Ayurveda Education in the .
State/Country/Foreign Country received from Prof.Y.K. Sharma, Principal, Rajiv Gandhi Government Post Graduate Ayurvedic College, Paprola was also enclosed. On 29th September, 2016 Hon'ble Ayurveda Minister, State of Himachal Pradesh, while drawing attention to the notings vide N/59 to N/63 requested the Hon'ble Chief Minister for placing the matter before the Cabinet.
Record reveals that on 22nd November, 2016, Hon'ble the Chief Minister, acceding to the request of Ayurveda Minister, directed the matter to be placed before the Cabinet. On 25th November, 2016 vide note (N/67) again Ayurveda Minister requested the Hon'ble Chief Minister to place the matter before the Cabinet in the public interest. In the aforesaid noting Hon'ble Ayurveda Minister specifically requested the Hon'ble Chief Minister to consider the proposal in the Cabinet meeting on 28th November, 2016.
However, noting (N/68) on the file reveals that Hon'ble the Chief Minister called for following informations:-
"- Total number of colleges in Govt. and Private sector in the State,
- Total graduates passing out from these colleges,
- How many of these Doctors who passed have been absorbed in the Govt. sector so far?
- What is the position of batch-wise postings?
- Do we have figures of employment given to Doctors in Govt. as well as in private sector?::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 13
- What would be impact of allowing NOC to private sector?"
15. Pursuant to aforesaid queries raised by Hon'ble the .
Chief Minister, Department of Ayurveda furnished information/detailed comments as finds mentioned in notings (N/71 & N/72). However, perusal of notings (N/73 & N/74) suggests that Hon'ble Ayurveda Minister directed the Department to place the matter before Hon'ble the Chief Minister for prior approval before placing the same in Council of Ministers.
16. On 19th December, 2016, Hon'ble the Chief Minister gave approval for placing the same before Council of Ministers.
Subsequently, Hon'ble Ayurveda Minister again on 21st December, 2016 requested the Hon'ble Chief Minister to take decision in the matter, but interestingly noting (N/75) suggests that the file with regard to aforesaid proposal initiated by Trust for setting up Ayurveda Medical College was withdrawn by respondent on Ist February, 2017, as has been noted by Private Secretary to the Hon'ble Chief Minister. On Ist February, 2017, Hon'ble Ayurveda Minister, Himachal Pradesh, directed Principal Secretary (Ayurveda) to re-examine the matter and put up the same for approval of Council of Ministers in its meeting, if required.
Perusal of notings (N/78 & N/79) suggest that the matter was re-
examined and it was noted that as per Rules of Business of the Government proposals involving any important change or policy or practice having State-wide application are required to be placed before the Council of Ministers and the same practice is being ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 14 followed by the Health Department for issuance of NOC in respect of all private health institutions. Perusal of note (N/80) further suggests that it was brought to the notice of Hon'ble Ayurveda .
Minister that as per CCIM, NOC from the concerned State is essential for the opening of new Ayurvedic Medical College and as such, matter requires approval of Council of Ministers. However, fact remains that Hon'ble Minister desired that Rules of Business may be placed before him. Subsequently, vide order dated 18th February, 2017, Hon'ble Ayurveda Minister recorded on the file as under:- r "N-88:- I have gone through the file. As per Rules of Business placed below matter regarding issuance of NOC is not to be placed before the Council of Ministers as it is within the competence of the Administrative Department.
Being private institute no financial application is involved and on the other hand the students of Himachal Pradesh who have to go to other States to get education will get facilities in the State itself besides providing employment and infrastructure.
Issuance of NOC of the State is just for submitting the matter to CCIM and it is incumbent on the institute to complete the formalities and obtain approval of CCIM.
In view of above, NOC be granted as recommended by the Director of Ayurveda."
17. Subsequent to aforesaid permission granted by Hon'ble Ayurveda Minister, NOC/LOI came to be issued in favour of petitioner-Trust vide communication dated 20th February, 2017.
18. Note as available at N/105 suggests that subsequently Hon'ble the Chief Minister discussed the matter with the Hon'ble Ayurveda Minister, who thereafter desired/directed that matter ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 15 relating to issuance of NOC/LOI requires discussion of Cabinet.
Pursuant to aforesaid discussion, letter dated 14th March, 2017 withdrawing NOC came to be issued by the Department of .
Ayurveda after having obtained approval from Ayurveda Minister, as is evident from the record. Hon'ble the Chief Minister in his note on 16th March, 2017 has observed as under:-
"Once the Cabinet is seized of the case, it is against the Rule of Business to deal the case by Ayurveda Department. It needs to be kept in view in future."
19. Having perused the record made available to this Court, one thing is clear that proposal at the first instance for issuance of NOC in favour of the "Trust" for setting up Ayurveda Medical College was intended to be placed before the Cabinet and in this regard necessary approval of Chief Minister was sought. It also emerge from the record that Hon'ble the Chief Minister, taking note of proposal routed through Hon'ble Ayurveda Minister sought certain information, as has been taken note above, matter was again placed before Hon'ble the Chief Minister, who gave his approval that the matter be placed before the Cabinet. Rather record reveals that on 21st December, 2016 Hon'ble Ayurveda Minister again requested Hon'ble the Chief Minister to take decision in the matter, but interestingly on 1st February, 2017 Ayurvedas Department withdrew the file from the office of Chief Minister, whereafter Hon'ble Ayurveda Minister directed Principal Secretary(Ayurveda) to re-examine the matter and put up the same for approval of Council of Ministers in its meeting, if required.
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 16Though it was brought to the notice of Hon'ble Minister that as per Rules of Business approval of Cabinet is required for issuance of NOC/LOI in favour of the petitioner-Trust, but despite that .
Hon'ble Ayurveda Minister gave his approval vide order dated 28th February, 2017 for issuance of NOC/LOI in favour of Trust, on the basis of which formal letter dated 20th February, 2017 came to be issued in favour of the Trust.
20. Whether Chief Minister is/was well within its rights to desire/direct authorities to place matter before Cabinet in terms of Rule 14 of Rules of Business, is a question which shall be dealt with by the Court lateron, but it is not understood that once matter was pending before Cabinet, as is evident from the record, where was the occasion for Ayurveda Department to withdraw the file from the office of the Chief Minister and thereafter accord permission to grant NOC/LOI in favour of Trust. Apart from above, Hon'ble the Chief Minister, after having gone through the answer given to his queries, had agreed to place the matter before Cabinet, as is evident from the record, but there is nothing on record from where it can be inferred that the Chief Minister, who was seized of the matter, rather who had approved the matter to be placed before the Cabinet, ever authorized the Ayurveda Minister to deal with the matter and thereafter issue NOC as prayed for by the Trust. It clearly emerge from the perusal of the record that Hon'ble Ayurveda Minister was quite keen to have NOC issued in favour of Trust and in this regard he repeatedly requested the Chief Minister to place the matter before the ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 17 Cabinet, but definitely there is nothing on record which prompted Ayurveda Department to withdraw file from the office of Chief Minister, rather noting given by Hon'ble the Chief Minister on 16th .
March, 2017 clearly suggests that once Cabinet was seized of the matter, Ayurveda Department had no authority to deal with the same. Hence, this Court, after having taken note of unnecessary hurry shown by Ayurveda Department, has no hesitation to conclude that decision with regard to grant of NOC/LOI taken by Ayurveda Department in favour of Trust was taken in hush-hush manner without taking necessary approval of the Council of Ministers or Chief Minister and as such same being ex-facie illegal rightly came to be withdrawn subsequently after the intervention of Hon'ble the Chief Minister.
21. Rules 14 and 16 of the Rules of Business of the Government of Himachal Pradesh state as under:-
"14. Subject to the orders of the Chief Minister under Rule 16, all cases referred to in the Schedule shall be brought before the Council in accordance with the provisions of these Rules. Cases shall also be brought before the Council by a special direction of the Chief Minister, or the Governor under Article 167(c).
Provided that no case in regard to which the Finance Department is required to be consulted under these Rules, shall, save in an emergency or exceptional circumstances and under the specific directions of the Chief Minister, be discussed by the Council unless the Finance Department has had an opportunity for considering it.
16(1) The Chief Minister may direct that any case referred to in the Schedule may, instead of being brought up for discussion at a Meeting of the Council, be circulated to the Minister for opinion and if all the Ministers are unanimous and the Chief Minister thinks that a discussion at a ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 18 Meeting of the Council is unnecessary, the case shall be decided without such discussion. If the Ministers are not unanimous or if the Chief Minister thinks that a discussion at a meeting is necessary, the case shall be discussed at a .
Meeting of the Council.
(2) If it is decided to circulate any case, the department to which the case belongs shall prepare a Memorandum setting out in brief the facts of the case, the points for decision and the recommendations of the Minister-in-charge and forward copies thereof to the Secretary to the Council who shall arrange to circulate the same among the Ministers and simultaneously send a copy to the Governor. "
22. Perusal of Rules 14 and 16 of the Rules of Business, which are reproduced hereinabove, clearly suggest that all cases referred to in the "Schedule" are required to be brought before the Council of Ministers in accordance with the provisions of these Rules. Subject to the order of the Chief Minister under Rule 16, who is empowered to direct that any case referred to in the "Schedule" may instead of being brought up for further discussion in the Meeting of Council can be circulated to the Ministers for opinion and if all the Ministers are unanimous and the Chief Minister thinks that a discussion at a Meeting of the Council is unnecessary, the case can be decided without such discussion, but, if the Ministers are not unanimous or if the Chief Minister thinks that the discussion in the meeting is necessary, the case needs to be discussed at the Meeting of Council of Ministers.
23. Rule-14 clearly suggests that subject to the orders of the Chief Minister all cases referred to in the Schedule needs to be placed before Council in accordance with the provisions of these Rules, rather cases can also be brought before the Council by a ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 19 special direction of the Chief Minister, or the Governor under Article 167(c) of the Constitution. At this stage it may also be profitable to take note of the following "Rules 14, 15, and 16", as .
referred to in "Schedule", attached to Rules of Business of the Government of Himachal Pradesh:-
"Schedule (Rules 14, 15 and 16)
1. Proposals to summon the House of Legislature of the State
2. Proposal for the making or proposal involving amendment, other than routine amendment of rules regulating the recruitment and the conditions of service of-
(a) persons appointed to the Secretariat staff of the assembly under Article 187(3);
(b) officers and servants of the High Court under Article 229, provisions to clauses (1) and (2);
(c) Persons appointed to the Public Service and posts (excepting Class-II, III & IV post(s) in connection with the Affairs of State Provided that minor amendments int eh service rules of Class-I posts like-change of Pay Scales, nomenclature of posts, number of post and age limit for direct recruitment pursuant to the notifications/instructions of the Department of Personnel shall be made by the concerned Administrative Department with the approval of the Minister-in-charge;
Provided further that the cases of class-II posts involving difference of opinion with the Himachal Pradesh Public Service Commission and where there is departure from common rules shall be brought to the Council of Ministers.
3. The annual financial statements to be laid before Legislature and demands for supplementary , additional or excess grants.
4. Proposals for the making or amending of Rules under Article 234.
5. Proposals for the issue of a notification under Article 237.
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 206. Any proposal involving action for the dismissal, removal or suspension of the Member of the Public Service Commission.
.
7. Proposals for making or amending regulations under Article 313 or under the proviso to clause (3) of Article
320.
8. Report of the Public Service Commission on the working under Article 323(2) and any action proposed to be taken with reference thereto.
9. Proposals for legislation including the issue of Ordinance under Article 213 of the Constitution.
10. Proposals for the imposition of a new tax, or any change in the method of assessment or the pitch of any existing tax, or land revenue, or irrigation rates, or for the raising of loans on the security of revenue of the State or for giving of a guarantee to the Government of the State.
11. Any proposal which affects the finance of the State which has not the consent of Finance Department.
12. Any proposal for re-appropriation to which the consent of the Finance Department is required and has been withheld.
13. Proposal involving the alienation either temporary or permanent or of sale, grant or lease of Government property exceeding Rs.50,000/- in value or the abandonment of reduction of revenue exceeding that amount except when such alienation, sale, grant or lease of Government property or abandonment or reduction of revenue is in accordance with the Rules or with a general scheme already approved by the Council.
14. The annual audit review of the finances of the State and the report of the Public Accounts Committee.
15. Proposals for the creation, upgradation and abolition of all posts;
Provided that the Administrative Department shall be competent to abolish the posts in consultation with the Finance Department. The Finance Department shall facilitate maintenance of records of abolition of posts in various Departments and working out likely financial impact for budgetary purposes.
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 2116. Reports of the Committees of inquiry appointed in pursuance of a resolution passed by the State Legislature.
17. Proposal involving any important change or policy or practice having State-wide application.
.
18. Cases required by the Governor or the Chief Minister to be brought before the Council.
19. Proposals for action inconsistent with the recommendation of the Public Service Commission.
20. Proposals to vary or reverse a decision previously taken by the Cabinet.
21. Proposals which adversely affect the operation of the policy laid down by the Government of India."
24. Item No.17 of "Schedule" clearly suggests that proposals involving any important change or policy or practice having State-wide application can be ordered to be placed before Council by the Chief Minister or Governor in terms of Rules 14 and 16 of the Rules of Business. Bare perusal of aforesaid Rules read with Items/cases referred in the Schedule, clearly suggest that Chief Minister is well empowered to direct/desire certain matters as referred in the Schedule to be placed either before him or Council of Ministers. Admittedly, whether question of opening new College in a State can be termed to be a proposal involving any important change or policy or practice having State-wide application is another question which requires consideration at this stage.
25. After having perused record of proposal submitted by the petitioner-Trust, which subsequently came to be considered by Hon'ble Ayurveda Minister and Hon'ble Chief Minister, we are ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 22 persuaded to agree with the contention of learned Advocate General that opening of a new college that too professional college is definitely a policy decision is to be taken by the respondent-
.
State. Record, which has been discussed/examined in detail hereinabove, clearly reveals that Hon'ble the Chief Minister, after having perused recommendation made by Hon'ble Ayurveda Minister, specifically sought certain information, which, in our mind, is/was quite relevant for determining need, if any, for opening new Ayurvedic College in the State of Himachal Pradesh, wherein admittedly two Ayurvedic Colleges run by the State are/were in existence. As per information submitted by Ayurvedic Department, no sufficient posts are available for Ayurvedic Graduates in the Government Sector and they have either been employed with the CHS/PHC level and providing their services on contract in the State as Medical Officers AYUSH. Though, we are not to judge whether, on the basis of information supplied by the Ayurvedic Department in response to queries raised by Hon'ble the Chief Minister, Government should have given permission for opening of Ayurvedic College or not, but definitely after having perused queries, which have taken note above, raised by Hon'ble the Chief Minister, this Court is convinced and satisfied that the matter, being policy matter, required to be placed either before the Chief Minister or in the Cabinet, who would have either got it approved unanimously by circulation or through placing the proposal before Cabinet as prescribed under Rules 14, 15 and 16 of Rules of Business. Otherwise also, initial proposal mooted by ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 23 Department itself suggests that the matter being policy matter was intended to be placed before Cabinet with the approval of Hon'ble the Chief Minister, who, after having perused information .
supplied to him pursuant to his queries, approved for placing the matter before Cabinet and as such this Court is unable to agree with the contention of Shri M.L. Sharma, learned counsel representing the petitioner-Trust, that matter being of great public importance was not required to be placed before Cabinet and mere approval of Ayurvedic Minister was sufficient for grant of NOC/LOI. As has been taken note hereinabove that Hon'ble Ayurvedic Minister, after having interacted with Hon'ble the Chief Minister, approved letter of withdrawal of NOC and this Court sees no illegality and infirmity in the decision of the Department to rectify its own mistake.
26. In this regard reliance is placed upon judgment of this Court in Shri Ram Dayal Yadav vs. State of Himachal Pradesh and Others, 1975(2) S.L.R. 360, wherein this Hon'ble Court has held:-
"12 Rule 58 of the Rules of Business mentions the class of cases which shall be submitted to the Chief Minister before the issue of orders. Clause
(v) of this rule mention one of such classes of cases; as the proposals for the prosecution, dismissal, removal or compulsory retirement of any Gazetted Officer. Therefore, from this it would follow that the cases of compulsory retirement of Gazetted Officers have got to be submitted to the Chief Minister before orders in such cases are passed. In the instant case it is stated by the Advocate General that the case was not submitted to the Chief Minster and, therefore, there was admittedly a breach of rule 58 (v) of the Rules of Business.::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 24
13. Next the opinion has to be formed, as is the intention of F.R. 56 (j), by the appropriate authority. In the case in hand under the Rules of Business the appropriate authority is the Chief Minister. Now we have to see whether any .
opinion was formed and by whom and what was the material.
14. The department has placed on record the personal file No. 1- 209/69-PWD of Shri Yadav.
This file starts with a note of the dealing Assistant, dated 13.4.71 and no record preceding this has been made available to the Court. It shows that the matter initiated at the instance of the Chief Engineer and the note was put up by the dealing Assistant. Thereafter there are office notings which ultimately culminated in the constitution of a Departmental Promotion Committee, consisting of Shri U.N. Sharma, Secretary (PWD) as Chairman, Shri H.C. Malhotra Chief Engineer (II) and Shri R.C. Singh, Chief Engineer (I) as members and it appears from para 3 of the proceedings of the meeting of the D.P.C. held on 14.6.1971 that the committee considered the cases of three persons including the petitioner for assessing their suitability for retention in service beyond the age of 55 years . The relevant portion of para 3 of the minutes read as under:-
"Shri Jagdish Chander Sharma and Shri Kartar Singh should be retained in service beyond the age of 55 years as provided in FR 56 (a). Shri R.C. Yadav whose record has been consistently unsatisfactory should be given three months' notice in August, 1971, in order to retire him from service at the age of 55 years."
The minutes reveal that the committee examined the confidential records of these three Assistant Engineers pertaining to the period of three years immediately preceding the attainment of age of 55 years and thereafter the committee made the aforementioned recommendations, resulting in the issue of the impugned order, Annexure PK. The submission made by the petitioner, therefore, is not acceptable that there was no material on the basis of which the opinion was formed. The question is whether the opinion was formed by the Departmental Promotion Committee or by the appropriate authority. Note No. 12, dated 14.6.71 shows that the minutes of the D.P.C were put up before the Finance Minister, who, it appears was also incharge of ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 25 the P.W.D. for his approval, and his note No. 13 is to the following effect:-
" Secy P.W.D. may kindly discuss.
Sd/-Karam Singh .
3-7-71"
And then note No. 14 runs like-
"Discussed with the F.M. Notice may be issued now.
Sd/-
Secretary 15-9-71"
It is thereafter on the 15th September 1971 that the notification, Annexure PK, was issued.
15. Consequently, it follows that the case was not put up before the Chief Minister, who for purposes of a case of compulsory retirement was the appropriate authority under the Rules of Business and the matter was disposed of at the end of the Finance Minister, who also did not form any opinion. What to talk of the material, the case was not at all sent to the Chief Minister. Therefore, for breach of rule 58 (V) of the Rules of Business this order is without jurisdiction and is liable to be struck down on this very ground.
16. The opinion in the present case was formed by the Departmental Promotion Committee, which cannot be said to be a delegate of the appropriate authority. The Chief Minister as the appropriate authority had to apply his mind and then to pass necessary orders, as contemplated under rule 58 (v) of the Rules of Business.
17. In the light of above, I, therefore, hold that the order has been passed in violation of rule 58 (v) of the rules of Business, which enjoined that the case should have gone to the Chief Minister as it related to the case of compulsory retirement of a Gazetted Officer, that not having been done, the order is bad. In view of this I think it is not necessary for me to go into the other matters whether the order cast a stigma or the order is mala fie or that it is discriminatory."
27. In this regard reliance is placed upon M/s.Rajureshwar Associates vs. State of Maharashtra and ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 26 Others, AIR 2004 SC 3770, wherein the Hon'ble Apex Court held as under:-
"36. The orders of resumption of the land were .
passed by the Collector, Aurangabad on 18.12.1997 and on 4.2.1999. The legality of the order dated 18.12.1997 is the subject matter of challenge in RCS No. 17 of 1998 and, therefore, the same issue could not be adjudicated in a petition filed under Article 226 of the Constitution of India as has rightly been held by the High Court. On 14.2.1999, a proclamation was issued by the Collector, Aurangabad that the entire land in question i.e. 43 acres 12 gunthas belonged to the Government and that nobody should enter into any transaction with respect thereto. The terms of grant were specific and having regard to the provisions of the Maharashtra Land Revenue Code, 1966 it cannot be held that the subject land was the exclusive property of the mill and the society owning the mill had the right to dispose it of without the permission of the State Government. Condition No. (v) specifically provided that the mill should not transfer the right in the land to anybody by sale, lease, mortgage, etc. without prior permission of the Government, The Collector had resumed the land in exercise of his statutory powers on 18.12.1997. Since the land stood resumed, the mill had no power to dispose of the land without getting the order of attachment revoked. This observation is in addition to the view that the subject land was a Government property at all times.
41. Rule 9 provides that all cases referred to in the Second Schedule shall be brought before the Council of Ministers. Entry 15 in the Second Schedule provides that any proposal which affects the finance of the State which does not have the consent of the Finance Minister has to be placed before the Cabinet. Similarly, entry 17 provides that proposal involving alienation either temporary or permanent by way of sale, grant or lease of Government property exceeding Rs. 50.000 in value of the abandonment or reduction of a recurring revenue exceeding. That amount or the abandonment or revenue exceeding Rs.5 lacs except when such alienation. sale, grant or lease of Government property is in accordance with the rules or with a general scheme already approved by the Council. It is evident that requirement of these rules was not complied with at the time when ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 27 decision dated 23.10.2000 was taken by the Textile Minister to sell the entire land in favour of the appellant. The matter was required to be placed before the Council of Minister as the alienation of the property exceeded Rs. 5 lacs as .
per Rule 11 of the Rules of Business secondly since the Finance Department had not concurred with the Textile Department the matter was required to be placed before the Cabinet in terms of Sub-rule (2) of Rule 11 of the Rules of Business. The conclusion which flows from the record is to the effect that the Government had not given sanction approval for the sale of subject land when the Cooperative of Textile Department approached it for the same. The Government as per Rules of Business had not given any sanction/approval for the sale of land.
The communication dated 23.10.2000 is not a Government decision as is obvious from the record and the subsequent communications dated 24.1.2001 and 12.7.2001 which were issued without verifying the record and ran contrary to the record did not convey a proper sanction.
48. In the circumstances, when the Chief Minister had an occasion to consider the matter when an offer was received from Mr. Save, he was right and justified in directing re-tender, Such direction was in keeping with the views expressed by the Departments of Revenue and Finance. The matter was considered further after the noting of the Chief Minister at various levels including, the legal department and the final decision was taken on 27.11.2001. This decision, it appears from the file is on account of the Government's belief that the price of Rs. 7,81,33,000 was an under valuation of the subject property which is a prime land located within the Corporation area. The Divisional Commissioner, Aurangabad vide his communication dated 8.8.2001 as well as 23.10.2001 brought to the attention of the State Government that the market value of the property was in the range of Rs. 24 - 25 crores. When the offer of the appellant was received, no valuation of the land had been got done. The Liquidator could not have invited tenders for the entire land as out of 43 acres 12 gunthas, 38 acres 12 gunthas had been attached by the Collector on 18.12.1997 and taken possession of by the government leaving only 5 acres of land on which buildings had been erected. Initial decision was to sell 5 acres of land along with the building and machinery standing thereon. The Revenue department was as the finance ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 28 department had not agreed for the sale of the entire land. The decision was taken by the textile department including its Minister to sell the entire land and the matter was required to be placed before the Cabinet and in the absence .
of any proper sanction the government had the power to cancel the same especially when it was of the opinion that the price of Rs. 7,81,33,000 offered by the appellant was under valuation of the property. The High Court was right in coming to the conclusion that the State Government did not, at any time, give approval for the sale or disposal of the subject land as was claimed by communication dated 23.10.2000.
49. It is true that the proposal sent by the Divisional Commissioner to set up sports complex in the subject land was not accepted by the government as a sports complex already existed in the city of Aurangabad and the learned counsel for the appellant has rightly contended that this could not be a valid reason for cancellation of the agreement to sale made in favour of the appellant. Even if the reason that the land was required by the government for setting up a sports complex is ruled out of consideration. the final decision taken by the Government to cancel the agreement of sale dated 27.11.2001 cannot be invalidated in the fact of our Finding that there was no proper approval/sanction of the Government for the sale of the subject land."
28. In Indian Charge Chrome Ltd. and Another vs. Union of India and Others, (2006)12 SCC 331, the Hon'ble Apex Court has held as under:-
"31. When the State Government made the recommendation for grant of a lease to Nava Bharat, the infirmities in that recommendation were pointed out by the Central Government, in its letter dated 27.6.2001. The violation of Rule 59 was also pointed out. Instead of placing the letter before the Chief Minister or the Cabinet and obtaining directions thereon, the Steel and Mines Department on its own chose to send a letter dated 30.6.2001 purporting to conform to the requirements. When the matter reached the Chief Minister and the Cabinet, the decision taken was to withdraw the earlier request for grant of approval of lease to Nava Bharat. On ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 29 the materials, it is clear that the letter dated 30.6.2001 sent by the Secretary of the Steel and Mines Department was not one consistent with the Rules of Business framed under Article 166 of the Constitution of India. The letter also lost .
its efficacy in view of the decision taken by the Cabinet to withdraw the recommendation itself.
The position that emerges is that there was no valid recommendation by the State Government for the grant of a lease to Nava Bharat and there was hence no valid approval of the Central Government. Non-compliance with Rule 59 of the Rules also vitiated the proposal to lease to Nava Bharat.
32. In view of our conclusion that the State Government was entitled to seek the approval of the Central Government in respect of the balance extent of 436.295 hectares, in which was included the proposed Nava Bharat grant, for exploitation by OMC and since, we are satisfied that the grant to Nava Bharat cannot be sustained, the proposed grant or grant to it has to be set aside. We do so. If it is a question of reconsideration of the applications of various entities for grant of leases in respect of 436.295 hectares, it would be a case where the claim of Nava Bharat would also have to be considered along with the claim of others in the light of the directions earlier issued by this Court. This contingency may arise only if the Central Government does not grant approval to the request of the State Government under Section 17A(2) of the Act. To that extent, we allow the appeals of I.C.C.L."
29. In MRF Limited vs. Manohar Parrikar and Others, (2010)11 SCC 374, the Hon'ble Apex Court held:-
"89. At this stage, we find it necessary to refer to some of the Constitutional provisions to deal with the issue raised by the appellants. Under Article 154 of the Constitution of India, the Governor is vested with the Executive Power of the State and he shall exercise them either directly or through Officers subordinate to him in accordance with the provisions of the Constitution. The Governor is advised by the Council of Ministers with the Chief Minister at its head in exercise of his functions except those specifically stated in discharge of his functions as the head of the State. The Council of Minister ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 30 is collectively responsible to the Legislative Assembly of the State. The Rules of business framed under Article 166(3) of the Constitution are for convenient transaction of the business of the Government and for allocation of the .
business among the Ministers. Article 166(2) of the Constitution requires the decision of the State Government to be authenticated as per the Rules framed thereunder. Any decision taken by the State Government therefore, reflects the collective responsibility of the Council of Ministers and their participation in such decision making process. The Chief Minister as the Head of the Council of Ministers is answerable not only to the Legislature but also to the Governor of the State. The Governor of the State as the Head of the State acts with the aid and advice of the Council of Ministers headed by the Chief Minister. The Rules framed under Article 166 (3) of the Constitution are in aid to fulfill the Constitutional Mandate embodied in Chapter II of Part VI of the Constitution.
Therefore, the decision of the State Government must meet the requirement of these Rules also."
30. Another argument raised on behalf of the petitioner-
Trust that after issuance of NOC/LOI, indefeasible right accrued in favour of Trust, is also devoid of any merit because, as has been held above, grant of NOC/LOI is/was in complete violation of Rules occupying the field, rather same was issued by the authority concerned dehors the Rules governing the filed. Moreover, NOC/LOI came to be issued on 20th February, 2017, whereafter, permission was granted to set up 60 bedded hospital to the Trust and as such action/expenditure, if any, taken/incurred by Trust, prior to issuance of NOC/LOI, cannot be a ground to claim right, if any, accrued in favour of the Trust. Action, if any, taken prior to issuance of letter dated 20th February, 2017 is/was unilateral, initiated at the behest of petitioner-Trust in anticipation of grant of NOC. Though, in the case at hand, proposal initiated by Trust ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 31 came to be accepted, but, had the authorities rejected the aforesaid proposal, could the Trust take aforesaid plea that since it has purchased land and invested money and as such right has .
accrued in its favour, answer is in negative because admittedly decision, if any, qua the proposal was to be taken by the Department in the light of Rules occupying the filed. Otherwise also, there is nothing on record, save and except certain documents, suggestive of the fact that pursuant to grant of NOC/LOI, the petitioner procured/obtained loan from the Bank for setting up infrastructure, but admittedly there is nothing on record that amount, if any, out of loan amount was spent by Trust for creating infrastructure in the light of NOC/LOI issued by the Ayurvedic Department. Money, if any, spent in anticipation for purchase of land, prior to issuance of LOI/NOC, can definitely be not taken into consideration while considering plea of indefeasible right, if any, accrued in favour of the petitioner and as such same needs to be rejected.
31. So far as plea of promissory estoppel is concerned, there is no material on record that State, at any point of time, held any promise to Trust to give NOC/LOI for setting up Trust, rather proposal, if any, came to be initiated at the behest of Trust, who, after having completed codal formalities, as pointed out by the Department, submitted its approval. Since proposal submitted by Trust was not processed in accordance with law, as has been discussed in detail hereinabove, NOC/LOI issued in violation of Rules came to be withdrawn. There is no document/material ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 32 adduced on record by Trust, suggestive of the fact that it took decision to set up Ayurvedic Medical College in the State of Himachal Pradesh on the request of State of Himachal Pradesh, .
rather record reveals that representative of Trust at his own met Chief Minister and proposed to open the college and there is no assurance, if any, either of the Department or of the Chief Minister to give him NOC/LOI and as such case proposed/initiated by Trust came to be dealt with in accordance with the Rules governing the field.
32. In this regard reliance is placed upon M/s.Jit Ram Shiv Kumar and Others vs. The State of Haryana and another, AIR 1980 SC 1285, wherein the Hon'ble Apex Court has held as under:.
"12. A Bench of four judges of this Court in a decision Excise Commissioner. U. P. Allahabad v. Ram Kumar, AIR 1976 SC 2237 after examining the case law on the subject observed that "it is now well-settled by a catena of decisions that there can be no question of estoppel against the Government in exercise of its legislative, sovereign or executive powers." The earlier decisions of this Court in M. Ramanathan Pillai v. State of Kerala, AIR 1973 SC 2641 and State of Kerala and Anr. v. The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd., AIR 1973 SC 2734, were followed. It may, therefore, be stated that the view of this Court has been that the principle of estoppel is not available against the Government in exercise of legislative, sovereign or executive power.
39. The scope of the plea of doctrine of promissory estoppel against the Government may be summed up as follows :-
(1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State.::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 33
(2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law.
(3) When the officer of the Government acts outside the scope of his authority, the plea of promissory .
estoppel is not available. The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers.
(4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme and the agreement or representation.
The Officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position.
(5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interest of the State.
50. On a consideration of the decisions of this Court it is clear that there can be no promissory estoppel against the exercise of legislative power of the State. So also the doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
The Government would not be bound by the act of its officers and agents who act beyond the scope of their authority and a person dealing with the agent of the Government must be held to have notice of the limitations of his authority. The Court can enforce compliance by a public authority of the obligation laid on him if he arbitrarily or on his mere whim ignores the promises made by him on behalf of the Government. It would be open to the authority to plead and prove that there were special considerations which necessitated his not being able to comply with his obligations in public interest."
::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 3433. The Hon'ble Apex Court in State of Bihar and others vs. Project Uchcha Vidya, Sikshk Sangh and others, (2006)2 SCC 545, has held:-
.
"77. We do not find any merit in the contention raised by the learned counsel appearing on behalf of the Respondents that the principle of equitable estoppel would apply against the State of Bihar. It is now well known, the rule of estoppel has no application where contention as regard constitutional provision or a statute is raised. The right of the State to raise a question as regard its actions being invalid under the constitutional scheme of India is now well recognized. If by reason of a constitutional provision, its action cannot be supported or the State intends to withdraw or modify a policy decision, no exception thereto can be taken. It is, however, one thing to say that such an action is required to be judged having regard to the fundamental rights of a citizen but it is another thing to say that by applying the rule of estoppel, the State would not permitted to raise the said question at all. So far as the impugned circular dated 18.02.1989 is concerned, the State has, in our opinion, a right to support the validity thereof in terms of the constitutional framework."
34. Shri M.L. Sharma, while placing reliance upon judgment passed by Hon'ble Apex Court in M/s.Motilal Padampat Sugar Mills Co. Ltd., vs. The State of Uttar Pradesh and Others, AIR 1979 SC 621, contended that principle of promissory estoppel and legitimate expectation would apply against State and in favour of the petitioner-Trust. But this Court, after having carefully perused aforesaid judgment, is not persuaded to agree with learned counsel representing the petitioner as the same has no application in the present case.
35. Hon'ble Apex Court in the aforesaid case has categorically held that the doctrine of promissory estoppel cannot ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 35 be applied in teeth of an obligation or liability imposed by law.
Hon'ble Court has further held that promissory estoppel cannot be invoked to compel the Government or even a private party to do an .
act prohibited by law and there can also be no promissory estoppel against the exercise of legislative power. The Legislature can never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. Most importantly, in the aforesaid judgment, Hon'ble Apex Court has held that where the Government owes a duty to the public to act in a particular manner, and here obviously duty means a course of conduct enjoined by law, the doctrine of promissory estoppel cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
36. In the case at hand, as has been discussed above in detail, decision with regard to opening of new College being a policy decision, ought to have been taken by the Chief Minister or Cabinet in terms of Rule 17 of Rules of Business and such decision taken by the Department, while granting NOC in favour of petitioner-Trust in violation of Rules and bye-passing the Cabinet, which was only competent authority to grant NOC, cannot be held to be valid and as such doctrine of promissory estoppel is not applicable in the present case.
37. The Hon'ble Apex Court in M/s.Motilal Padampat Sugar Mills Co. Ltd.'s case supra has held as under:-
"24. "... ...But even where there is no such over-riding public interest, it may still be competent to the ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 36 Government to resile from the promise "on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position" provided of course it is possible for the promisee to restore .
status quo ante. If however, the promisee cannot resume his position, the promise would become final and irrevocable."
27. "... ...Where the Government owes a duty to the public to act in a particular manner, and here obviously duty means a course of conduct enjoined by law, the doctrine of promissory estoppel cannot be invoked for preventing the Government from acting in discharge of its duty under the law. The doctrine of promissory estoppel cannot be applied in teeth of an obligation or liability imposed by law."
28. "... ...It may also be noted that promissory estoppel cannot be invoked to compel the Government or even a private party to do an act prohibited by law. There can also be no promissory estoppel against the exercise of legislative power. The Legislature can never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel."
38. As far as judgment passed by Hon'ble Apex Court in MRF Ltd.Kottayam vs.Asstt.Commissioner (Assessment) Sales Tax and Others, (2006)8 SCC 702, is concerned, the same is also not applicable to the present case. In the above captioned case, statutory notification amended the earlier exemption notification issued by State of Kerala, as a consequent of which rights already accrued in favour of appellant i.e. MRF were adversely affected. Appellant in the aforesaid case made huge investment in the State of Kerala under a promise held to it that it would be granted exemption from payment of sales tax for a period of seven years, but, during the period of exemption State Government issued another notification excluding form of ::: Downloaded on - 14/12/2017 23:05:06 :::HCHP 37 compound rubber from the definition of "Manufacture" for the purpose of original exemption notification. Hon'ble High Court of Kerala held that since notification was a statutory one no plea of .
estoppel would lie against it, but Hon'ble Apex Court, while setting aside the judgment passed by High Court of Kerala, held that the principle underlying legitimate expectation is based on Article 14 of the Constitution of India and as such any action taken by the State which goes against the rule of fairness is liable to be struck down. Hon'ble Apex Court further held that the State Government did not have the power to make retrospective amendment to the statutory notification issued by it affecting the rights already accrued to the appellant therein under the said notification.
39. But, in the case at hand facts are altogether different, as has been discussed in detail hereinabove. It may be noticed that in the present case, no promise, if any, was ever made by the respondent-State to the petitioner-Trust, rather proposal to open Ayurvedic Medical College came from the petitioner-Trust that too not in response of advertisement, if any, published by the respondent-State. Petitioner-Trust, who itself was interested in opening College, made a proposal to the respondent-Department, who bye-passing Chief Minister/Cabinet issued NOC/LOI and as such aforesaid law cited by the learned counsel appearing for the petitioner is not applicable to the present case.
40. As far as arguments advanced by Mr.Sharma that impugned order Annexure P-17, whereby NOC came to be withdrawn, deserves to be quashed being passed in violation of ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 38 principle of natural justice, deserves outright rejection for the reasons that when decision of Ayurvedic Department to grant NOC/LOI is/was ex-facie, illegal and in violation of Rules of .
Business, there is/was no requirement, as such, for issuance of notice, if any, to the petitioner-Trust by the Department for withdrawing the same.
41. Hon'ble Apex Court in Chairman, Board of Mining Examination and Chief Inspector of Mines and Anr. v.
Ramjee, AIR 1977 SC 965, has observed as under:-
"13. ... ...Natural justice is not unruly horse, no lurking land line, nor a judicial cure all. If fairness is shown by the decision/maker to the man proceeded against, the form, features and fundamentals of such essential process properly being conditioned by facts and circumstances of each situations, no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. We can neither be finical nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt- that is the conscience of the matter."
42. Hon'ble Apex Court has reiterated time and again that the doctrine of natural justice cannot be imprisoned within the strait-jacket of rigid formula and its application would depend upon the scheme and policy of the statute and relevant circumstances involved in a particular case. (See: Union of India v. P.K. Roy and Ors., AIR 1968 SC 850; and Kumaon Mandal Vikas Nigam Ltd. v. Girja Shankar Pant and Ors., (2001) 1 SCC 182).
::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 3943. In S.L. Kapoor v. Jagmohan and Others, AIR 1981 SC 136, the Supreme Court has observed that where on admitted or undisputed facts only one conclusion is possible and under the .
law only one penalty is permissible, the Court may not issue the writ to compel the observance of the principles of natural justice as it would amount to issuing a futile writ.
Similarly, in State of U.P. v. O.P Gupta, AIR 1970 SC 679, the Supreme Court has observed, that the Courts have to see whether non-observance of any of the principles enshrined in statutory rules or principles of natural justice have resulted in deflecting the course of justice. Thus, it can be held that even if in a given case, there has been some deviation from the principles of natural justice but which has not resulted in grave injustice or has not prejudiced the cause of the delinquent, the Court is not bound to interfere. This Court does not function as a Court of Appeal over the administrative decision taken by the Authority, rather it has limited power of judicial review. This Court can review only to correct the error of law or fundamental procedural requirements which lead to manifest injustice or Court can interfere with the impugned order if the same has been passed in flagrant violation of the principles of natural justice. (See: Rae Bareli Kshetriya Gramin Bank v. Bhola Nath Singh and Others., AIR 1997 SC 1908).
44. In K.L. Tripathi v. State Bank of India, AIR 1984 SC 273, Hon'ble Apex Court observed as under:-
::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 40"31. ... ...It is not possible to lay down rigid rules, as to when the principles of natural justice are to apply, nor as to their scope and extent. ... ... ... There must also have been some real prejudice to the complainant; there is no such thing as a .
merely technical infringement of natural justice. The requirement of natural justice must depend on the facts and circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is, acting, the subject matter to be dealt with, and so on so forth."
45. Hon'ble Apex Court in R.S. Dass vs. Union of India, AIR 1987 SC 593, has held as under:-
"25. ... ...Rules of natural justice are not rigid rules, they are flexible and their application depends upon the setting and the background of statutory provision, nature of the right, which may be affected and the consequences which may entail, its application depends upon the facts and circumstances of each case."
46. Hon'ble Apex Court in A.K. Kraipak vs. Union of India, AIR 1970 SC 150, has held:-
"20. ... ...The rules of natural justice are not embodied rules. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the inquiry is held and the constitution of the tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision in the facts of that case."
47. Hon'ble Apex Court in Suresh Koshi vs. University of Kerala, AIR 1969 SC 198, has held as under:-
::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 41"7. The rules of natural justice are not embodied rules the question whether the requirements of natural justice have been met by the procedure adopted in a given case must depend to a great extent to the facts and circumstances of the case .
in point, the constitution of the Tribunal and the rules under which in functions."
48. Situation in which 'audi alteram partem' rule may be excluded has been observed in Union of India v. Tulsiram Patel, AIR 1985 SC 1416. Principles of natural justice can be modified but in exceptional cases they can even be excluded. There are well defined exceptions to the nemo judex in causa sua rule as also to the audi alteram partem rule. The nemo judex in causa sua rule is subject to the doctrine of necessity and yields to it as pointed out by the Hon'ble Apex Court in J. Mohapatra & Co. and Another v. State of Orissa and Another, (1985) 1 SCR 322. So far as the audi alteram partem rule is concerned, it is well established that where a right to a prior notice and an opportunity to be heard before an order is passed would obstruct the taking of prompt action, such a right can be excluded where the nature of action to be taken, its object and purpose and the scheme of the relevant statutory provisions warrant its exclusion; nor can the audi alteram partem rule be invoked if importing it would have the effect of paralysing the administrative process or where the need for promptitude or the urgency of taking action so demands, as pointed out in Maneka Gandhi's case.
49. Similarly, Hon'ble Apex Court in Gadde Venkateswara Rao vs. Government of Andhra Pradesh, AIR ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 42 1966 SC 828, has held that writ will not be issued if the effect of issuing a writ would be to sustain or restore an illegal order.
50. It is quite apparent from the aforesaid exposition of .
law laid down by Hon'ble Apex Court in various pronouncements that there is no strait-jacket of rigid formula for the application of principle of natural justice, rather it would depend upon the facts and circumstances of each case. It is also ample clear from aforesaid law laid down by Hon'ble Apex Court that where on admitted or undisputed fact, only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue the writ to compel the observance of the principles of natural justice as it would amount to issuing a futile writ.
51. In the case at hand, as is clearly emerge from the record, no NOC/LOI could be issued by Ayurveda Department bye-passing Hon'ble the Chief Minister/Cabinet and as such order passed by Department after having obtained permission of Ayurveda Minister is/was ex-facie illegal and there was no compulsion at all for the department to issue notice to the petitioner-Trust, seeking therein its response to action proposed to be taken by the department, Department of Ayurveda realizing its mistake withdrew the NOC/LOI admittedly issued in violation of Rules of Business and as such there was no occasion for the department to issue show cause notice.
52. In State of Kerala and Others vs. K.G. Madhavan Pillai and Others, (1988)4 SCC 669, relied upon by the learned counsel for the petitioner-Trust, State Government published a ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 43 final list of areas in a Gazette where new unaided recognised high schools/upper primary schools/lower primary schools were to be opened or existing unaided lower primary schools/upper primary .
schools were to be upgraded in the year 1986-87, the respondent educational agencies submitted their applications for grant of sanction to open new unaided recognised schools or for upgrading the schools already run by them. By notification dated 4-2-1987, the State of Kerala issued an order granting sanction to the respondents to open new unaided schools or to upgrade their existing schools subject to the conditions set out therein.
But, subsequently, the Government with another order directed the earlier order to be kept in abeyance. The respondents challenged the order of the Government by means of petitions under Article 226 of the Constitution. During the pendency of the writ petitions, the general elections were held in Kerala State and a new ministry came to assume office. The government under the new ministry passed an order dated 19-5-87 cancelling in toto the order dated 4.2.1987 granting sanction to the respondents to open new schools or to upgrade the existing schools. This led to the respondents amending the writ petitions suitably so as to direct their challenge to the validity of the cancellation order passed on 19.5.1987. The respondents failed before the Single Judge but in the appeal the Division Bench of Kerala High Court granted them limited reliefs. Being aggrieved with the relief granted by Division Bench, State of Kerala approached Hon'ble Apex Court. Hon'ble Apex Court passed following direction:
::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 44"30. In the light of our reasoning and conclusions, our answers for the three questions formulated by us are as under:
(1) Though the sanction granted to the
.
respondents under Ex. P-4 would not by
itself entitle them to open new schools or upgrade the existing schools, it did confer on them a right to seek the continuance of the statutory procedural stream in order to have their applications considered under Rule 9 and dealt with under Rule 11. (2) It was not open to the Government, either under the Act or Rules or under Section 20 of the Kerala General Clauses Act to cancel in toto the approval granted to the respondents under Rule 2A(5), for opening new schools or upgrading existing schools in the selected areas on the basis of a revised policy.
(3) The impugned order under Ex.P-7, irrespective of the question whether the Government had the requisite power of cancellation or not, is vitiated by reason of non-observance of the principles of natural justice and the vice of extraneous factors."
53. Mr.M.L. Sharma, learned counsel appearing for the petitioner, while placing reliance upon aforesaid judgments contended that with the grant/issuance of NOC/LOI in favour of the petitioner-Trust, right accrued in its favour to establish Ayurveda Medical College and as such it was not open to Government to withdraw the same on the ground that NOC was not granted by the competent authority i.e. Chief Minister/Cabinet. Mr.Sharma further contended that though Government had no power to withdraw the NOC/LOI, but otherwise also no order could be issued without observance of principle of natural justice.
::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 4554. Aforesaid argument having been made by Mr.Sharma is not sustainable in the facts and circumstances of the case, wherein admittedly no right can be said to have accrued in favour .
of the petitioner-Trust in the light of grant of NOC/LOI by the department of Ayurveda, who was not competent to grant NOC, as has been discussed hereinabove. In the aforesaid judgment, Hon'ble Apex Court has held that though the sanction granted to respondents in terms of notification issued by the State of Kerala in 1986-87 would not by itself entitle them to open new schools or upgrade the existing schools, it did confer on them a right to seek the continuance of the statutory procedural stream in order to have their applications considered under Rule 9 and dealt with them under Rule 11.
55. Facts of the present case are totally different from the facts of the aforesaid case decided by Hon'ble Apex Court. In the case before Hon'ble Apex Court, there was no allegation that State Government issued notification in violation of set procedure or Rules of Business and as such Hon'ble Apex Court held that it was not open for the State to cancel in toto the approval granted to the respondent for opening new school or existing school in the selected areas on the basis of revised policy. But, in the case at hand, NOC/LOI came to be issued in favour of petitioner-Trust dehors the Rules of Business and as such subsequently same was rightly withdrawn by the Department of Ayurveda.
56. Reliance is also placed upon Dharampal Satyapal Limited vs. Deputy Commissioner of Central Excise, Gauhati ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 46 and Others, (2015)8 SCC 519, wherein the Hon'ble Apex Court has held:-
.
"38. But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the Courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straight-jacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances. For example, the Courts have held that it would be sufficient to allow a person to make a representation and oral hearing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only full-fledged oral hearing but even cross-examination of witnesses is treated as necessary concomitant of the principles of natural justice. Likewise, in service matters relating to major punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post-decisional hearing is held to be permissible. Further, the Courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on.
39. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasizing that the principles of natural justice cannot be applied in straight-jacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason - perhaps because the evidence against the individual is thought to be utterly compelling - it is felt that a fair hearing 'would ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 47 make no difference' - meaning that a hearing would not change the ultimate conclusion reached by the decision-maker - then no legal duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in .
Malloch v. Aberdeen Corporation (WLR p,1595: All ER p.1294) "...A breach of procedure...cannot give (rise to) a remedy in the courts, unless behind it there is something of substance which has been lost by the failure. The court dos not act in vain."
Relying on these comments, Brandon L.J. opined in Cinnamond v. British Airports Authority (1980)2 ALL ER 368 (CA) that (WLR p.593 : All ER p.377) "...no one can complain of not being given an opportunity to make representations if such an opportunity would have availed him nothing'.
In such situations, fair procedures appear to serve no purpose since 'right' result can be secured without according such treatment to the individual."
57. In State of Haryana and Others vs. Northern Indian Glass Industries Limited, (2015)15 SCC 588, the Hon'ble Apex Court has been held as under:-
"23. The prayer in the writ petition was for the issuance of a writ of Certiorari quashing the Resumption Notice dated 6.1.2005 issued by the Appellant State. In the impugned Judgment the Division Bench has opined that the principles of natural justice applied irrespective of the nature of the cause or the gravity thereof and are not mere platitudes. In our analysis of the exposition of law contained hereinabove, we think that this unjustly sets far too broad and wide a parameter to the perceptions of natural justice. Quite to the contrary, Courts should be "pragmatic rather than pedantic, realistic rather than doctrinaire, functional rather than formal and practical rather than precedential".
We cannot lose perspective of the fact that protracted litigation had already taken place between the parties as a consequence of which the legal position of all affected parties had already become well-known. It seems to us that in the writ petition, the challenge was ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 48 predicated on the perceived failure to adhere to the audi alterem partem rule and not to the correctness of the decision to resume possession of the land. In any event, we harbour no manner of doubt that the circumstances of the case .
warrant the issuance of the Resumption Notice of the land by the Appellant State. We also note that the 'Resumption Notice' has been issued to the Respondent alone which, because of its actions, has forfeited whatsoever rights it may have enjoyed over the land in question. In fact the Respondent may be liable to make over to the Appellant State all the profit that it has illegally and unjustifiably reaped in its misutilization of the lands acquired for it for the purpose of setting up an industrial unit for manufacture of sheet glass with the accompanying projection of providing employment to almost a thousand workmen.
How this Resumption Notice will be implemented against third parties is a matter on which we would think it prudent not to make any observations. The Appellant State may not treat the observations made by us above pertaining to third parties who have purchased land from the Respondent as conclusively circumscribing any relief to them and/or rendering it unnecessary to give any hearing to them. The Appellant State will avowedly have to proceed in accordance with law, especially since it has not maintained a watchful eye on the manner in which the land was dealt with by the Respondent."
58. Leaving everything aside, this Court, after having taken note of its own findings and observation made in the earlier part of judgment, is convinced and satisfied that question relating to opening or setting up a Ayurvedic Medical College, being a policy matter, needs to be dealt with either by Chief Minister or Council of Ministers, as envisaged under Rules 14, 15 and 16 of the Rules of Business, and as such, now question arise whether this Court has power of judicial review to ascertain the correctness and genuineness of decision taken at the level of Hon'ble Chief Minister. Though we have no doubt in our mind that scope of ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 49 interference is very limited as far as policy decision taken by the Government/State is concerned, but, however, this Court deems it proper to take note of law laid down by Hon'ble Apex Court in .
Maharashtra State Board of Secondary and Higher Secondary Education and Another vs. Paritosh Bhupeshkumar Sheth and Others and Alpana V.Mehta vs. Maharashtra State Board of Secondary Education and Another, (1984)4 SCC 27, wherein the Hon'ble Supreme Court held:
"16. In our opinion, the aforesaid approach made by the High Court is wholly incorrect and fallacious. The Court cannot sit in judgment over the wisdom of the policy evolved by the Legislature and the subordinate regulation- making body. It may be a wise policy which will fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or regulation will not render it ultra vires and the Court cannot strike it down on the ground that, in its opinion, it is not a wise or prudent policy, but is even a foolish one, and that it will not really serve to effectuate the purposes of the Act. The Legislature and its delegate are the sole repositories of the power to decide what policy should be pursued in relation to matters covered by the Act and there is no scope for interference by the Court unless the particular provision impugned before it can be said to suffer from any legal infirmity, in the sense of its being wholly beyond the scope of the regulation- making power or its being inconsistent with any of the provisions of the parent enactment or in violation of any of the limitations imposed by the Constitution. None of these vitiating factors are shown to exist in the present case and hence there was no scope at all for the High Court to invalidate the provision contained in clause (3) of Regulation 104 as ultra vires on the grounds of its being in excess of the regulation-making power conferred on the Board. Equally untenable, in our opinion, is the next and last ground by the High Court for striking down clause (3) of Regulation 104 as unreasonable, ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 50 namely, that it is in the nature of a bye-law and is ultra vires on the ground of its being an unreasonable provision. It is clear from the scheme of the Act and more particularly, Sections 18, 19 and 34 that the Legislature has .
laid down in broad terms its policy to provide for the establishment of a State Board and Divisional Boards to regulate matters pertaining to secondary and higher secondary education in the State and it has authorised the State Government in the first instance and subsequently the Board to enunciate the details for carrying into effect the purposes of the Act by framing regulations. It is a common legislative practice that the Legislature may choose to lay down only the general policy and leave to its delegate to make detailed provisions for carrying into effect the said policy and effectuate the purposes of the Statute by framing rules/regulations which are in the nature of subordinate legislation. Section 3(39) of the Bombay General Clauses Act, 1904, which defines the expression 'rule' states: Rule shall mean a rule made in exercise of the power under any enactment and shall include any regulation made under a rule or under any enactment." It is important to notice that a distinct power of making bye-laws has been conferred by the Act on the State Board under Section 38. The Legislature has thus maintained in the Statute in question a clear distinction between 'bye-laws' and 'regulations'. The bye-laws to be framed under Section 38 are to relate only to procedural matters concerning the holding of meetings of State Board, Divisional Boards and the Committee, the quorum required, etc. More important matters affecting the rights of parties and laying down the manner in which the provisions of the Act are to be carried into effect have been reserved to be provided for by regulations made under Section 36. The Legislature, while enacting Sections 36 and 38, must be assumed to have been fully aware of the niceties of the legal position governing the distinction between rules/regulations properly so called and bye-laws. When the statute contains a clear indication that the distinct regulation- making power conferred under Section 36 was not intended as a power merely to frame bye- laws, it is not open to the Court to ignore the same and treat the regulations made under Section 36 as mere bye-laws in order to bring them within the scope of justiciability by applying the test of reasonableness.::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 51
21. The legal position is now well-established that even a bye-law cannot be struck down by the Court on the ground of unreasonableness merely because the Court thinks that it goes further than "is necessary" or that it does not .
incorporate certain provisions which, in the opinion of the court, would have been fair and wholesome. The Court cannot say that a bye-law is unreasonable merely because the judges do not approve of it. Unless it can be said that a bye law is manifestly unjust, capricious, inequitable, or partial in its operation, it cannot be invalidated by the Court on the ground of unreasonableness. The responsible representative body entrusted with the power to make by laws must ordinarily be presumed to know what is necessary, reasonable, just and fair. In this connection we may usefully extract the following off-quoted observations of Lord Russell of Killowen in Kruse v. Johnson, (1898) 2 QB 91, 98, 99 (quoted in Trustees of the Port of Madras v. Adminchand Pyarelal, (1976)! SCR 721, 733) (SCC p.178, para 23):
(1) "When the Court is called upon to consider the byelaws of public representative bodies clothed with the ample authority which I have described, accompanied by the checks and safeguards which I have mentioned, I think the consideration of such bye-laws ought to be approached from a different standpoint.
They ought to be supported if possible.
They ought to be, as has been said, 'benevolently interpreted' and credit ought to be given to those who have to administer them that they will be reasonably administered."
"The learned Chief Justice said further that there may be cases in which it would be the duty of the court to condemn by-laws made under such authority as these were made (by a county council) as invalid because unreasonable. But unreasonable in what sense? If for instance, they were found to be partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men, the court might well say, 'Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires.' But it is in this and this sense only, as I conceive, that the question of reasonableness or unreasonableness can properly be regarded. A bye-law is not unreasonable merely because particular judges may think that it goes further than is prudent or necessary or convenient or because it is not ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 52 accompanied by an exception which some judges may think ought to be there'.
" We may also refer with advantage to the well-known decision of the Privy Council in Slattery v. Naylor, (1988) 13 AC 446, where .
it has been laid down that when considering whether a bye-law is reasonable or not, the Court would need a strong case to be made against it and would decline to determine whether it would have been wiser or more prudent to make the bye-law less absolute or will it hold the bye-law to be unreasonable because considerations which the court would itself have regarded in framing such a bye-law have been over looked or reflected by its framers. The principles laid down as aforesaid in Kruse v. Johnson, (1898) 2 QB 91, 98, 99 and Stattery v. Naylor, (1988) 13 AC 446 have been cited with approval and applied by this Court in Trustees of the Port of Madras v. Aminchand Pyarelal & Ors.,(1976) 1 SCR 721, 733."
59. In Parisons Agrotech Private Limited and Another vs. Union of India and Others, (2015)9 SCC 657, the Hon'ble Supreme Court held:
"14. No doubt, the writ court has adequate power of judicial review in respect of such decisions.
However, once it is found that there is sufficient material for taking a particular policy decision, bringing it within the four corners of Article 14 of the Constitution, power of judicial review would not extend to determine the correctness of such a policy decision or to indulge into the exercise of finding out whether there could be more appropriate or better alternatives. Once we find that parameters of Article 14 are satisfied; there was due application of mind in arriving at the decision which is backed by cogent material; the decision is not arbitrary or irrational and; it is taken in public interest, the Court has to respect such a decision of the Executive as the policy making is the domain of the Executive and the decision in question has passed the test of the judicial review.
15. In Union of India v. Dinesh Engg. Corpn., (2001)8 SCC 491, this Court delineated the aforesaid principle of judicial review in the following manner: (SCC pp.498-99, para 12) ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 53 "12. There is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to the policy matter, this Court will not ordinarily interfere since these policy matters are taken .
based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the material on record. ..... Any decision be it a simple administrative decision or policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution."
16. The power of the Court under writ jurisdiction has been discussed in Asif Hameed. v. State of J&K, 1989 Supp.(2) SCC 364: 1 SCEC 358 in paras 17 and 19, which read as under: (SCC pp. 373-74) "17. Before adverting to the controversy directly involved in these appeals we may have a fresh look on the inter se functioning of the three organs of democracy under our Constitution. Although the doctrine of separation of powers has not been recognised under the Constitution in its absolute rigidity but the Constitution makers have meticulously defined the functions of various organs of the State. Legislature, executive and judiciary have to function within their own spheres demarcated under the Constitution. No organ can usurp the functions assigned to another. The Constitution trusts to the judgment of these organs to function and exercise their discretion by strictly following the procedure prescribed therein. The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and executive, the two facets of people's will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits. It is the sentinel of democracy. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 54 executive. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed .
discipline of judicial restraint.
* * *
19. When a State action is challenged, the function of the court is to examine the action in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions assigned under the Constitution and if not, the court must strike down the action. While doing so the court must remain within its self-
imposed limits. The court sits in judgment on the action of a coordinate branch of the government. While exercising power of judicial review of administrative action, the court is not an appellate authority. The Constitution does not permit the court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers."
17. The aforesaid doctrine of separation of power and limited scope of judicial review in policy matters is reiterated in State of Orissa v. Gopinath Dash, (2005) 13 SCC 495 : (SCC p.497, paras 5-7) "5. While exercising the power of judicial review of administrative action, the Court is not the Appellate Authority and the Constitution does not permit the Court to direct or advise the executive in the matter of policy or to sermonise qua any matter which under the Constitution lies within the sphere of the legislature or the executive, provided these authorities do not transgress their constitutional limits or statutory power. (See Asif Hameed v. State of J&K; 1989 Supp (2) SCC 364 and Shri Sitaram Sugar Co. Ltd. v.
Union of India; (1990) 3 SCC 223). The scope of judicial enquiry is confined to the question whether the decision taken by the Government is against any statutory provisions or it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution. Thus, the position is that even if the decision taken by the Government does not appear to be agreeable to the Court, it cannot interfere.
6. The correctness of the reasons which prompted the Government in decision-making ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 55 taking one course of action instead of another is not a matter of concern in judicial review and the Court is not the appropriate forum for such investigation.
7. The policy decision must be left to the .
Government as it alone can adopt which policy should be adopted after considering all the points from different angles. In the matter of policy decisions or exercise of discretion by the Government so long as the infringement of fundamental right is not shown the courts will have no occasion to interfere and the Court will not and should not substitute its own judgment for the judgment of the executive in such matters. In assessing the propriety of a decision of the Government the Court cannot interfere even if a second view is possible from that of the Government."
60. The Hon'ble Apex Court in Census Commissioner and Others vs. R.Krishnamurthy, (2015)2 SCC 796, has held:
"23. The centripodal question that emanates for consideration is whether the High Court could have issued such a mandamus commanding the appellant to carry out a census in a particular manner.
24. The High Court has tried to inject the concept of social justice to fructify its direction. It is evincible that the said direction has been issued without any deliberation and being oblivious of the principle that the courts on very rare occasion, in exercise of powers of judicial review, would interfere with a policy decision.
25. Interference with the policy decision and issue of a mandamus to frame a policy in a particular manner are absolutely different. The Act has conferred power on the Central Government to issue Notification regarding the manner in which the census has to be carried out and the Central Government has issued Notifications, and the competent authority has issued directions. It is not within the domain of the Court to legislate. The courts do interpret the law and in such interpretation certain creative process is involved. The courts have the jurisdiction to declare the law as unconstitutional. That too, where it is called for. The court may also fill up the gaps in certain spheres applying the doctrine of constitutional silence or abeyance. But, the courts are not to plunge into policy making by adding something ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 56 to the policy by way of issuing a writ of mandamus. There the judicial restraint is called for remembering what we have stated in the beginning. The courts are required to understand the policy decisions framed by the .
Executive. If a policy decision or a Notification is arbitrary, it may invite the frown of Article 14 of the Constitution. But when the Notification was not under assail and the same is in consonance with the Act, it is really unfathomable how the High Court could issue directions as to the manner in which a census would be carried out by adding certain aspects. It is, in fact, issuance of a direction for framing a policy in a specific manner.
26. In this context, we may refer to a three-Judge Bench decision in Suresh Seth V. Commr., Indore Municipal Corporation, (2005)13 SCC 287, wherein a prayer was made before this Court to issue directions for appropriate amendment in the M.P. Municipal Corporation Act, 1956 so that a person may be debarred from simultaneously holding two elected offices, namely, that of a Member of the Legislative Assembly and also of a Mayor of a Municipal Corporation. Repelling the said submission, the Court held: (SCC pp.288-89, para 5) "In our opinion, this is a matter of policy for the elected representatives of people to decide and no direction in this regard can be issued by the Court. That apart this Court cannot issue any direction to the legislature to make any particular kind of enactment. Under our constitutional scheme Parliament and Legislative Assemblies exercise sovereign power to enact laws and no outside power or authority can issue a direction to enact a particular piece of legislation. In Supreme Court Employees' Welfare Assn. v. Union of India, (1989)4 SCC 187 (SCC para 51) it has been held that no court can direct a legislature to enact a particular law. Similarly, when an executive authority exercises a legislative power by way of a subordinate legislation pursuant to the delegated authority of a legislature, such executive authority cannot be asked to enact a law which it has been empowered to do under the delegated legislative authority. This view has been reiterated in state of J & K v A.R. Zakki,1992 Supp(1) SCC 548. In A.K. Roy v. Union of India, (1982)1 SCC 271it was held that no mandamus can be issued to enforce an Act which has been passed by the legislature."::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 57
61. Reliance is placed upon the judgment of the Hon'ble Supreme Court in State of Kerala and Another vs. B.Six Holiday Resorts Private Limited and Others, (2010)5 SCC 186, .
wherein it has been held:
"22. Where the rules require grant of a licence subject to fulfillment of certain eligibility criteria either to safeguard public interest or to maintain efficiency in administration, it follows that the application for licence would require consideration and examination as to whether the eligibility conditions have been fulfilled or whether grant of further licences is in public interest. Where the applicant for licence does not have a vested interest for grant of licence and where grant of licence depends on various factors or eligibility criteria and public interest, the consideration should be with reference to the law applicable on the date when the authority considers applications for grant of licences and not with reference to the date of application.
27. It is true that in Kuldeep Singh case, (2006)5 SCC 702, there were no statutory rules and what was considered was with reference to a policy. But the ratio of the decision is that where licence sought related to the business of liquor, as the State has exclusive privilege and its citizens had no fundamental right to carry on business in liquor, there was no vested right in any applicant to claim a FL-3 licence and all applications should be considered with reference to the law prevailing as on the date of consideration and not with reference to the date of application. Whether the issue relates to amendment to Rules or change in policy, there will be no difference in principle. Further the legal position is no different even where the matter is governed by statutory rules, is evident from the decisions in Hind Stone, (1981)2 SCC 205 and Howrah Municipal Corporation, (2004)1 SCC 663.
28. Having regard to the fact that the State has exclusive privilege of manufacture and sale of liquor, and no citizen has a fundamental right to carry on trade or business in liquor, the applicant did not have a vested right to get a licence. Where there is no vested right, the application for licence requires verification, inspection and processing. In such circumstances it has to be held that the consideration of application of FL-3 licence should be only with reference to the rules/law ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 58 prevailing or in force on the date of consideration of the application by the excise authorities, with reference to the law and not as on the date of application. Consequently the direction by the High Court that the application .
for licence should be considered with reference to the Rules as they existed on the date of application cannot be sustained. Re: Question (ii)
29. The applicants for licence submitted that Rule 13(3) contemplates FL-3 licences being granted on fulfillment of the conditions stipulated therein; and the newly added proviso, by barring grant of new licence had the effect of nullifying the main provision itself. It was contended that the proviso to Rule 13(3) added by way of amendment on 20.2.2002 was null and void as it went beyond the main provision in Rule 13(3) and nullified the main provision contained in Rule 13(3).
30. Rule 13(3) provides for grant of licences to sell foreign liquor in Hotels (Restaurants). It contemplates the Excise Commissioner issuing licences under the orders of the State Government in the interest of promotion of tourism in the State, to hotels and restaurants conforming to standards specified therein. It also provides for the renewal of such licences. The substitution of the last proviso to Rule 13(3) by the notification dated 20.2.2002 provided that no new licences under the said Rule shall be issued. The proviso does not nullify the licences already granted. Nor does it interfere with renewal of the existing licences. It only prohibits grant of further licences. The issue of such licences was to promote tourism in the State. The promotion of tourism should be balanced with the general public interest. If on account of the fact that sufficient licences had already been granted or in public interest, the State takes a policy decision not to grant further licences, it cannot be said to defeat the Rules. It merely gives effect to the policy of the State not to grant fresh licences until further orders. This is evident from the explanatory note to the amendment dated 20.2.2002. The introduction of the proviso enabled the State to assess the situation and reframe the excise policy.
31. It was submitted on behalf of the State Government that Rule 13(3) was again amended with effect from 1.4.2002 to implement a new policy. By the said amendment, the minimum ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 59 eligibility for licence was increased from Two- star categorization to Three-Star categorization and the ban on issue of fresh licences was removed by deleting the proviso which was inserted by the amendment dated 20.2.2002. It .
was contended that the amendments merely implemented the policies of the government from time to time. There is considerable force in the contention of the State. If the State on a periodical re-assessment of policy changed the policy, it may amend the Rules by adding, modifying or omitting any rule, to give effect to the policy. If the policy is not open to challenge, the amendments to implement the policy are also not open to challenge. When the amendment was made on 20.2.2002, the object of the newly added proviso was to stop the grant of fresh licences until a policy was finalized.
32. A proviso may either qualify or except certain provisions from the main provision; or it can change the very concept of the intendment of the main provision by incorporating certain mandatory conditions to be fulfilled; or it can temporarily suspend the operation of the main provision. Ultimately the proviso has to be construed upon its terms. Merely because it suspends or stops further operation of the main provision, the proviso does not become invalid.
The challenge to the validity of the proviso is therefore rejected.
33. In view of the above, the appeals filed by the State are allowed in part and the appeals filed by the applicants for licences are dismissed, subject to the following clarifications:
(i) If any licences have been granted or regularized in the case of any of the applicants during the pendency of this litigation, on the basis of any further amendments to the Rules, the same will not be affected by this decision;
(ii) If any licence has been granted in pursuance of any interim order, the licence shall continue till the expiry of the current excise year for which the licence has been granted.
(iii) This decision will not come in the way of any fresh application being made in accordance with law or consideration thereof by the State Government."::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 60
62. Reliance is also placed upon Arun Kumar Agrawal vs. Union of India and Others, (2013)7 SCC 1, wherein the Hon'ble Apex Court held:
.
"42. Matters relating to economic issues, have always an element of trial and error, so long as a trial and error are bona fide and with best intentions, such decisions cannot be questioned as arbitrary, capricious or illegal. This Court in State of M.P. and others v. Nandlal Jaiswal and others (1986) 4 SCC 566 referring to the Judgment of Frankfurter J. in Morey vs. Dond 354 US 457 held that (Nandlal Jaiswal case, SCC p.605, para 34) "34. .....we must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call "trial and error method" and, therefore, its validity cannot be tested on any rigid "a priori" considerations or on the application of any straight jacket formula."
43. In Metropolis Theatre Co. v. State of Chicago 57 L Ed 730 the Supreme Court of the United States held as follows:
".....The problem of government are practical ones and may justify, if they do not require, rough accommodation, illogical, if 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....."
44. In LIC v. Escorts Ltd. and others (1986) 1 SCC 264 this Court held that (SCC p.344, para 102) "102. .....The Court will not debate academic matters or concern itself with intricacies or trade and commerce."
The Court held that (SCC p.344, para 102) "102. ....When the State or its instrumentalities of the State ventures into corporate world and purchases the shares of a company, it assumes to itself the ordinary role of shareholder, and dons the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reasons when it seeks to change the management ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 61 by a resolution of the company, like any other shareholder."
63. As far as accrual of vested rights and contention with .
regard to legitimate expectation, put forth by the petitioners, is concerned, the reliance is placed on Kuldeep Singh vs. Govt.of NCT of Delhi, (2006)5 SCC 702, wherein the Hon'ble Apex Court held:
"14. Mr. Gopal Subramanaium, learned Additional Solicitor General appearing on behalf of the Respondent, on the other hand, submitted:
(i) The Appellants do not have any fundamental right to trade in liquor.
(ii) The State having adopted a policy decision, this Court should not exercise its power of judicial review interfering therewith. In any event, no case that the policy decision suffers from any illegality, irrationality or procedural impropriety having been made out nor any malice having been attributed in regard to the policy decision, this Court should not interfere with the judgment of the High Court.
(iii) The parties in whose favour licenses have been granted were necessary parties to the writ petitions and in their absence the writ petitions could not have been entertained.
25. It is, however, difficult for us to accept the contention of the learned Senior Counsel, Mr. Soli J. Sorabjee that the doctrine of 'legitimate expectation' is attracted in the instant case. Indisputably, the said doctrine is a source of procedural or substantive right. (See R. v. North and East Devon Health Authority, ex parte Coughlan 2001 Q.B. 213) But, however, the relevance of application of the said doctrine is as to whether the expectation was legitimate. Such legitimate expectation was also required to be determined keeping in view the larger public interest. Claimants' perceptions would not be relevant therefor. The State actions indisputably must be fair and reasonable. Non - arbitrariness on its part is a significant facet in the field of good governance. The discretion conferred upon the State yet again cannot be exercised whimsically or ::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 62 capriciously. But where a change in the policy decision is valid in law, any action taken pursuant thereto or in furtherance thereof, cannot be invalidated.
.
33. The question again came up for consideration in Howrah Municipal Corpn. and Others v.
Ganges Rope Co. Ltd. and Others [(2004) 1 SCC 663] wherein this Court categorically held: (SCC p.680 para 37) "The context in which the respondent Company claims a vested right for sanction and which has been accepted by the Division Bench of the High Court, is not a right in relation to "ownership or possession of any property" for which the expression "vest" is generally used.
What we can understand from the claim of a "vested right" set up by the respondent Company is that on the basis of the Building Rules, as applicable to their case on the date of making an application for sanction and the fixed period allotted by the Court for its consideration, it had a "legitimate" or "settled expectation" to obtain the sanction. In our considered opinion, such "settled expectation", if any, did not create any vested right to obtain sanction. True it is, that the respondent Company which can have no control over the manner of processing of application for sanction by the Corporation cannot be blamed for delay but during pendency of its application for sanction, if the State Government, in exercise of its rule-making power, amended the Building Rules and imposed restrictions on the heights of buildings on G.T. Road and other wards, such "settled expectation" has been rendered impossible of fulfillment due to change in law. The claim based on the alleged "vested right"
or "settled expectation" cannot be set up against statutory provisions which were brought into force by the State Government by amending the Building Rules and not by the Corporation against whom such "vested right"
or "settled expectation" is being sought to be enforced. The "vested right" or "settled expectation" has been nullified not only by the Corporation but also by the State by amending the Building Rules. Besides this, such a "settled expectation" or the so-called "vested right" cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon."
::: Downloaded on - 14/12/2017 23:05:07 :::HCHP 6364. Reliance is also placed upon the judgments of Hon'ble Apex Court in Centre For Public Interest Litigation vs. Union of India and Others, (2016)6 SCC 408, Census Commissioenr .
and Othrs vs. R.Krishnamurthy, (2015)2 SCC 796 and State of Himachal Pradesh and Others vs. Himachal Pradesh Nizi Vyavsayik Prishikshan Kendra Sangh, (2011)6 SCC 597.
65. In view of the detailed discussion made hereinabove as well as law laid down by the Hon'ble Apex Court, we are unable to accept the contentions advanced on behalf of the petitioners that the decision of the respondents-State in withdrawing the NOC/LOI is bad in law. Exposition of law as discussed above has left no room/scope for this Court to deliberate upon the issue at hand.
66. Consequently, in view of detailed discussion made hereinabove, this Court sees no reason to interfere with the decision taken by the Government inasmuch as withdrawing the NOC/LOI issued in favour of the petitioner-Trust and as such, present petition dismissed being devoid of any merit.
67. Interim direction, if any, is vacated. All miscellaneous applications are disposed of.
(Sanjay Karol)
Acting Chief Justice
December 13, 2017 (Sandeep Sharma)
(aks) Judge
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