IMPORTANT POINTS
1. The doctrine of estoppel and legitimate expectation cannot be applied against public authorities when their mistaken advice or representation is found to be in breach of a statute and therefore, against public interest.
2. The rules of fairness by which every public authority is bound, requires them to compensate loss occasioned to private parties or citizens who were misled in acting on mistaken or negligent advice of the public authority.

Headnote:Capital of Punjab (Development and Regulation) Act, 1952-Chandigarh Lease Hold of Sites and Building Rules, 1973-Allotment of industrial plots of different sizes in development scheme framed by Union Territory, Chandigarh-3735 applications received-339 successful applicants were directed to deposit 25 of total cost-57 parties were given possession of their plots in developed industrial areas-Remaining 254 allottees of year 1989 could not be given possession of plots as land covered by reserved forest-However, Administration of Union Territory, Chandigarh continued to accept yearly instalments fixed for payment-Writ petitions seeking delivery of possession-New Industrial policy to accommodate these allottees-Option given to allottees for accepting reduced size of plot by 25 of plot allotted to each of them-Policy challenged by those who did not consent for reduced size-Whether on execution of lease deeds, a vested right in law in plots allotted has been created in favour of allottees-(No)-Whether the parties who have suffered would have any remedy of redressal for the loss they suffered-(Yes).
       Held : We have examined the scheme and provisions of the Act and the Rules. They do not seem to contemplate creation of any vested right where any other state or central legislation bars use of a particular land for industrial development. The Chandigarh Administration, in these cases, had prepared a scheme, carved out plots, auctioned them and received part or full payment of the price. In implementing its development scheme, it ignored the notification issued reserving a major portion of the land covered by the scheme as forest . It is in this circumstance that the Administration is showing its inability to honour the commitment made by offering the plots, acceptance of price and giving delivery of possession. When a scheme of development of land and the allotments made thereunder are found to be in contravention of any law and contrary to general public interest, no claim based on so called vested right can be countenanced. Similar is the position with regard to 900 metres restriction imposed under the Aircrafts Act. No citizen can be allowed to claim any vested right which would result in violation of a statutory provision of law or Constitution. The claim, therefore, based on alleged vested right, has to be outright rejected. (Para 19)
       In public law in certain situations, relief to the parties aggrieved by action or promises of public authorities can be granted on the doctrine of legitimate expectation but when grant of such relief is likely to harm larger public interest, the doctrine cannot be allowed to be pressed into service. We may usefully call in aid Legal Maxim : Salus populi est suprema lex : regard for the public welfare is the highest law. This principle is based on the implied agreement of every member of society that his own individual welfare shall in cases of necessity yield to that of community. His property, liberty and life shall under certain circumstances be placed in jeopardy or even sacrificed for the public good . On the same principle and to protect larger public interest, the Chandigarh Administration can be relieved of fulfilling legitimate expectation arising from its allotment of plots on the ground that their development schemes under consideration have been found to be in contravention of Forest Act and Aircrafts Act. Another legal maxim which can be invoked to their aid is : Lex non cogit ad impossibilla : the law does not compel a man to do that which he cannot possibly perform . The allottees of the plots are, no doubt, faced with an uncertain situation with loss already caused to them due to negligence and mistake on the part of the Planning Authorities of the Chandigarh Administration. In preparing the development scheme, the existing notification reserving major part of land as forest under the Indian Forest Act and restriction on construction in periphery of 900 metres from the Air-force base under the Aircrafts Act were overlooked. As we have held above, on a representation that the land is available for allotment of industrial plots, the allottees staked their money and plans for setting up their industries. The representations made to them by the Planning Authorities have turned out to be misleading as a substantial part of the land could not have been included in the development scheme. The allottees paid price for the plots and incurred expenses in preparing their industrial projects. We have held above that the doctrine of legitimate expectation and estoppel cannot be applied against the Administration to compel it to allot the original plots because that would be permitting violation of Statutes intended to conserve forest and restrictions imposed in the interests of general public and security of Nation under Aircrafts Act. Doctrine of estoppel cannot, therefore, be allowed to be urged against the Administration. This Court cannot direct the Administration to commit breach of statutory provisions and thus harm general public interests. (Paras 22 to 24)
       Surely, the doctrine of estoppel cannot be applied against public authorities when their mistaken advice or representation is found to be in breach of a Statute and therefore, against general public interest. The question, however, is whether the parties or individuals, who had suffered because of the mistake and negligence on the part of the statutory public authorities, would have any remedy of redressal for the loss they have suffered. The rules of fairness by which every public authority is bound, requires them to compensate loss occasioned to private parties or citizens who were misled in acting on such mistaken or negligent advice of the public Authority. There are no allegations and material in these cases to come to a conclusion that the action of the authorities was mala fide. It may be held to be careless or negligent. (Para 25)
       As a result of detailed discussion aforesaid, the appeals and connected matters are disposed of by partly maintaining the directions contained in the impugned order of the High Court but with the modifications, substitution and addition of directions as mentioned below:-
        1. The prayer of the appellants/petitioners for directing the authorities of Chandigarh Administration to hand over possession of the plots allotted on the basis of draw held in November, 1982 is rejected.
        2. The total available plots of different sizes as mentioned in Annexure-A to the affidavit of the Administration of UTC, shall be allotted by draw of lots separately or jointly as per the procedure evolved by the Administration to 23 consentees found eligible in accordance with the new environmental norms and to 13 allottees of one kanal plot. It is for the Administration of UTC to work out the manner in which draw of lots will be held between 23 consentees and 13 allottees of one kanal plot for the available number of plots of different sizes as contained in Annexure-A to the affidavit. It is made clear that the Administration of UTC will have liberty keeping in view the industrial projects submitted by the consentees and other restrictions if they make it necessary to suitably alter the sizes of plots of accommodate the identified 23 consentees. It is clarified that allotment of plots from the area of the scheme which falls within restricted 900 metres zone from the air-base under Aircrafts Act, would be granted by the Administration with a condition that if in future, any such restriction is reimposed, the allotments may be cancelled and there would be no liability on the Administration of UTC to pay any damage or compensation to the parties due to non-utilisation of plots or its cancellation. If the allotments of plots in the restricted zone are cancelled due to restriction aforesaid, the price paid for the plots shall be refunded to the parties concerned without any liability of interest on the price which remained as deposit with the Administration.
        3. The consentees and allottees of one kanal plot, who even though found eligible for allotment, because of limited number of plots (as mentioned in annexure-A), do not get accommodation in the available plots, they be considered on the same price paid by them for alternative plots in the new industrial area phase-III i.e. Mouli Jagran. It is made clear that the requirement of the Act and the Rules and the new environmental norms as existing on the date of fresh allotment of plots in the industrial area phase-III would be made applicable to such consentees and allottees of one kanal plot.
        4. The non-consentees shall be granted by the Administration of UTC, option by asking them to submit their willingness in writing within a period of one month from the date of this order for considering allotment to each of them a suitable plot in the new industrial zone Phase III at Mouli Jagran. It is left to the Administration of UTC to evolve a fair and just method of allotment by draw of lots in accordance with the Act and the Rules. It is made clear that the allotment of plots in the new industrial area III i.e. Mouli Jagran would be at the price prevailing on the date of fresh allotments. The price with interest already paid by the non-consentees for their original plots, if so far not refunded to them, shall be adjusted towards the total price payable for the new sites. It is also made clear that in accordance with existing industrial policy and the environmental norms, the allottees will have to submit their project reports for considering viability of their proposed industries by the Administration.
        In the event, the non-consentees are unwilling to take plots in the new industrial zone phase III or their project reports are ultimately found to be not approvable, the price deposited by them for the original plots would be refunded to them with interest at the rate of 12 per annum from the date of initial deposit.
        5. The reliefs in the nature of directions made in favour of consentees and non-consentees and allottees of one kanal plot are restricted only to such of them who were parties before the High Court. All claims of remaining consentees or non-consentees or allottees of one kanal plot, who were not parties in the cases before the High Court, stand rejected.
        6. Notification dated 28.4.2000 containing new Industrial Policy would not be made applicable to the allottees of plots in phase-I & II who are successful in fresh draw of lots to be held under the above directions. (Para 41)

JUDGMENT

Dharmadhikari, J.-These appeals and special leave petitions are preferred against the common judgment dated 30.8.2001 passed by the Division Bench of High Court of Punjab & Haryana whereby a batch of writ petitions preferred by the applicants for allotment of industrial plots in the development scheme framed by the Union Territory, Chandigarh [shortly referred to as UTC] has been disposed of with certain directions. Different classes of allottees of industrial plots and UTC all feel aggrieved by the judgment of the High Court and are before this Court.

2. The full factual background leading to the dispute inter se between the applicants for industrial plots and UTC is required to be set out:-

With a view to re-enact and modify the law in relation to the development and regulation of the new capital of Punjab at Chandigarh, Legislation by name Capital of Punjab [Development and Regulation] Act, 1952 [shortly referred to as the Act] was passed in the year 1952 vesting the State Government with legal authority to regulate the sale of building sites. In exercise of powers under the Act, rules for allotment of sites for building have been framed known as the Chandigarh Lease Hold of Sites and Building Rules, 1973 [hereinafter referred to as the Rules], which among others provide that the Administration of UTC, may demise sites for industries and buildings by allotment or auction.

3. In accordance with the provisions of the Act and Rules mentioned above, the Administration of UTC issued an advertisement No. 1/81 on 14.4.1981 inviting applications from interested entrepreneurs seeking allotment of the industrial plots of different sizes ranging from 10 marlas to 4 kanals. Pursuant to the said advertisement, 3735 applications were received from different parties. The Screening Committee of the Administration of UTC on 16.7.1982 short-listed 339 parties for allotment of industrial plots of different sizes after studying their project reports and conducting interviews. The 339 successful applicants, selected for allotment of plots of different sizes, were directed to deposit 25 of the total cost of the plots. On 30.11.1982, for allotting specific plots, a draw of lots was held among 339 successful allottees. As a result of the draw of lots, 57 parties were given possession of their plots in developed industrial areas i.e. Phase-I and Phase-II. Twenty one parties took refund of their money. Seven allottees were given option for change of their plots. Remaining 254 allottees could not be given possession of the plots, allotted to them, as there were objections from the State Authorities to the industrial development of the land it being covered by the notification, issued in the year 1961, declaring area of the land as reserved forest. The Administration of UTC could not deliver the possession of that land which was covered in the reserved forest, to 254 allottees of the year 1989 but it continued to accept the yearly installments fixed for payment from the selected allottees.

4. Certain allottees filed writ petitions in the year 1987 in the High Court seeking directions to the Administration of UTC to deliver possession of the industrial plots allotted to them in accordance with the short-listing done by the Screening Committee and consequent draw of lots.

5. On 29.11.1990, the Director of Industries, Government of India, intimated to the allottees that the Administration of UTC was not in a position to deliver possession of the industrial plots allotted to them as the land was found to be a part of reserved forest. The Administration proposed to allot one kanal land to each allottee irrespective of the size of plot originally allotted.

6. On 10.12.1990, the Administration of UTC then framed a new industrial policy to accommodate 250 allottees of 1982 who could be given possession of the industrial plots because of the land being reserved for forest. To meet aforesaid difficult situation, the Administration decided to reduce the size

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2004 Supreme(SC) 472

Cases Referred (5)