2011 Supreme(SC) 373

2011 (3) Supreme 89
SUPREME COURT OF INDIA
G.S. Singhvi and Asok Kumar Ganguly, JJ.
Akhil Bhartiya Upbhokta Congress — Appellant(s)
versus
State of Madhya Pradesh and others — Respondent(s)
Civil Appeal No. 2965 of 2011
(Arising out of SLP(C) NO. 25509 OF 2009)
Decided on : 6-4-2011

IMPORTANT POINT
Fairness, reasonableness and public interest are paramount for administrative action.

Headnote:(a) Constitution of India – Part IV – Article 39(b) – Directive Principles – Role of the Government is that of as provider of services and benefits to the people. (Para 17)

        (1979) 3 SCC 489 : (1979) 3 SCR 1014: AIR 1979 SC 1628 – Relied upon

        (b) Constitution of India – Article 14 – The very idea of unfettered discretion is totally incompatible with the doctrine of equality enshrined in the Constitution and is an antithesis to the concept of rule of law. (Para 18)

        (1968) A.C. 997; (1971) 2 QB 175; 1977 QB 643; AIR 1967 SC 1427; (1979) 3 SCC 489 : (1979) 3 SCR 1014: AIR 1979 SC 1628; (1975) 1 SCC 70; (1991) 1 SCC 212 – Relied upon

        AIR 1969 Ker. 81 (FB) – Cited with approval

        (c) Administrative Law – Arbitrariness – If an administrative decision fails the test of reasonableness and public interest, it must be struck down.(Para 25)

        (1980) 4 SCC 1: (1980) 3 SCR 1338: AIR 1980 SC 1992; (1996) 6 SCC 530 – Relied upon

        (d) Constitution of India – Article 14 – Article of the Constitution applies not only to governmental policy and action, but also to contractual matters – Anything not satisfying test of reasonableness shall be unconstitutional – A change in policy must be made fairly – It should not give the impression that it was so done arbitrarily or by any ulterior criteria. (Para 28)

        (1979) 3 SCR 1014: AIR 1979 SC 1628; (1980) 4 SCC 1: (1980) 3 SCR 1338: AIR 1980 SC 1992; (1980 (Supp) SCC 559 : AIR 1981 SC 1545; (1995) 5 SCC 482; (1996) 5 SCC 510 – Relied upon

        AIR 1996 (P&H) 229 : (1996) 113 PLR 17 – Referred

        (2001) 3 SCC 635; (2005) 8 SCC 550; (2005) 13 SCC 495; (2009) 6 SCC 171; (1974) 1 SCC 447; (2004) 8 SCC 355 – Impliedly distinguished

        (e) Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 – Section 23A – There cannot be any policy, much less, a rational policy of allotting land on the basis of applications made by individuals, bodies, organizations or institutions de hors an invitation or advertisement by the State or its agency/instrumentality. (Para 32)

        (f) Constitution of India – Article 14 – Once a piece of land is earmarked or identified for allotment to institutions/organisations engaged in educational, cultural, social or philanthropic activities, the actual exercise of allotment must be done in a manner consistent with the doctrine of equality. (Para 33)

        (g) Section 23-A(1)(a) – In view of the modification of the development plan for the purpose of facilitating establishment of an institute by respondent No. 5 and not for any proposed project of the Government of India or the State Government and its enterprises or for any proposed project relating to development of the State or for implementation of the Town Development Scheme the same must be held to be ultra vires Section 23-A(1)(a) – Further, allotment of land almost two years prior to the notification under Section 23-A(1)(a) and there being no nexus of objects of the respondent trust with the purpose of the section makes the exercise an empty formality. (Para 41)

        (h) Constitution of India – Article 226 – Locus standi – A public spirited organization has locus to raise issues of public interest u/Art. 226 – Not only that, even if a person files a writ petition for vindication of his private interest but raises question of public importance involving exercise of power by men in authority then it is the duty of the Court to enquire into the matter. (Para 42)

        (1987) 1 SCC 227 – Relied upon

        (i) Prospective Overruling – Is not applicable to acts of favoritism and nepotism done in violation of Article 14 of the Constitution. (Para 43)

        1988 PLJ 123 – Referred

        (2001) 9 SCC 550 – Distinguished

       Facts of the case:

        (a) Government of Madhya Pradesh decided to allot 20 acres land in Bhopal to late Shri Kushabhau Thakre Memorial Trust /Shri Kushabhau Thakre Training Institute without any advertisement and without inviting other similarly situated organisations/institutions to participate in the process of allotment.

        (b) For this purpose, the Bhopal Development Plan was modified and land use was changed

        (c) The same was challenged by a writ petition on the ground of being contrary to Article 14 of the Constitution and the provisions of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973. The modification of the Bhopal Development Plan and change of land use was also challenged on the ground of being ultra vires the mandate of Section 23A of the Act.

        (d) High Court dismissed the Writ Petition.

       Finding of the Court:

        The entire process of reservation of land and allotment thereof was fraught with grave illegality and was nothing but a blatant act of favoritism.

       Result : Appeal allowed.