JUDGMENT

KULDIP SINGH, J. - Special leave granted.

2. This appeal is directed against the judgment of the Bombay High Court dated 9-7-1992 quashing the letter of intent dated 31-8-1988, the order of Collector, Bombay dated 3-9-1988 and the consequent order of allotment of land bearing City Survey No. 211 of Malabar Hill Division to the Angarki Cooperative Housing Society Limited (the Society) - the appellant before us.

3. The Society was allotted land admeasuring 3725 sq. mtrs. (two plots) out of Survey No. 211 of Malabar Hills, Bombay. The land was applied for in June/July 1986 and the letter of intent for allotment was issued to the Society in August 1988. In June 1989, Bal-Kalyani, a trust running a pre-primary school in the plot of land adjoining the plots allotted to the Society, filed writ petition in the Bombay High Court (No. 1754 of 1989), seeking cancellation of the allotment alleging violation of rules and also mala fide in the process of allotment. Another writ petition (No. 2085 of 1989) was filed by Save Bombay Committee on 21-7-1989 challenging the allotment in favour of the Society on several grounds. Both the writ petitions were admitted for hearing in November 1988 and the construction on the plots concerned by the Society was stayed by the High Court. Appeals by the Society, against the stay order granted by a learned Single Judge, were dismissed in February 1990. The special leave petitions against the interim orders were dismissed by this Court in May 1990. A Division Bench of the High Court finally quashed the allotment of land to the Society by the judgment dated 9-7-1992. These appeals by the Society are against the judgment of the Division Bench of the High Court.

4. In order to appreciate various points dealt with by the High Court, we may notice some more facts. V. Ranganathan, Secretary (Relief and Rehabilitation, Revenue and Forest Department), Government of Maharashtra, in his capacity as Chief Promoter of the proposed cooperative housing society of government servants addressed an application dated 25-7-1986 to the Secretary, Revenue and Forest Department, Government of Maharashtra. He simultaneously addressed an application to the Collector, City of Bombay. In the application it was stated as under :

"Whereas members of the proposed Cooperative Housing Society would like plot of land already applied for, in case there is any problem in giving a favourable decision in respect of this land I would like to suggest that in the alternative plot of land admeasuring approximately 3000 sq. mtrs. and forming part of City Survey No. 211 of Malabar Hill Division may be considered for allotment. This plot of land belongs to Government of Maharashtra and is a part of city survey number housing Rocky Hill flats of the Government of Maharashtra. We are asking for a small part of the land in one comer of this City Survey No. 211. A rough location map of the land is enclosed."

The area of land demanded in the application was much more than permissible - keeping in view the proposed number of members of the Society. The Collector addressed a letter dated 5-8-1986 to Ranganathan asking him "to forward the names of additional members accordingly to enable this office to take further action in the matter". The Collector, Bombay addressed letter dated 19-8-1986 to the Secretary, Revenue and Forest Department, Maharashtra wherein it was stated as under :

"On referring to this office records, it is observed that the property CS No. 211 of Malabar Hill Division admeasures 1961.02 sq. mtrs. and is government land. The possession of this land, along with the bungalows existing on it, is with the Executive Engineers PWD Presidency Division since 17-7-1909. It is situated at Banganga Road and known as Rocky Hill Estate. The buildings existing thereon are known as Rocky Hill Flats.

Since the land in question is in the possession of the Executive Engineer, PWD, Presidency Division, feasibility of making it available for the s