IMPORTANT POINT
Allotment of State largesse – Rights of State as lessor can only be sold by a public auction or by any other transparent method – Selling plot to its alleged lessee at a nominal price will not be a fair and transparent method at all – It will be arbitrary and violative of Article 14 of Constitution of India.

JUDGMENT :

ABHAY S. OKA, J.

1. Leave granted.

FACTUAL ASPECTS

2. These appeals take an exception to the same judgment of a Division Bench of Allahabad High Court. The dispute is essentially between the City Montessori School (for short, ‘the school’) and one Shri M.M. Batra regarding plot no. 90-A/A- 754, measuring 2238.5 sq. ft. situated at Maha Nagar, Lucknow (for short, ‘the plot’). It is not in dispute that the plot vests in the State Government. By a lease dated 4th January 1961, the Hon’ble Governor of Uttar Pradesh, through Nazul Officer, Lucknow, granted the lease of the plot to one Gursharan Lal Srivastava which was described as a ‘garden lease’ A separate lease was granted on the same day in respect of the building on the plot. By a registered sale deed dated 26th June 1962, Gursharan Lal Srivastava sold his leasehold interest in the plot to Shri M.M. Batra (the alleged lessee). Rajat Batra and Raman Batra are the sons of the alleged lessee. It appears that the plot is a Nazul property. Several Government Orders (G.Os.) have been issued, either providing for the conversion of leasehold lands into freehold or auction thereof.

3. The alleged lessee filed a Civil Suit in the year 1994 in the Civil Court. The suit was filed to protect possession. Later on, by amendment, he sought the benefit of G.O. of 17th February 1996 and 1st December 1998, which permitted the conversion of Nazul properties given on lease into freehold properties. On 13th March 1995, an auction notice was published for the auction of various Nazul lands, including the plot. The school and the sons of the alleged lessee submitted their bids. The school was found to be the highest bidder and therefore, the bid offered by the school was accepted. As provided in the auction notice/tender notice, the tender document had to be purchased by 23rd March 1995 since 24th March 1995 was a holiday, and the auction was fixed for 25th March 1995. It was alleged that the school purchased the tender document on 25th March 1995. The acceptance of the school's bid was cancelled. However, the authorities again called upon the school to deposit the bid amount. Ultimately, on 20th June 1996, the State Government cancelled the bid offered by the school on the ground of the failure to purchase the tender form within the outer limit provided in the tender notice. While cancelling the school's bid, the State Government decided to accept the bid offered by the sons of the alleged lessee.

4. Aggrieved by the action of the rejection of the bid, the school filed a Writ Petition under Article 226 of the Constitution of India before the Allahabad High Court. The impugned judgment is the final judgment in the said Writ Petition. By an interim order dated 18th July 1996, Allahabad High Court directed the status quo to be maintained with respect to the plot. Also, it directed that the Lucknow Development Authority (for short, ‘the authority’) shall not execute the sale deed in favour of the sons of the alleged lessee. The school applied for impleadment in the suit filed by the alleged lessee. The said application was rejected. However, on 3rd February 2011, the school impleaded the alleged lessee as a party to the Writ Petition. The alleged lessee’s suit was dismissed by the Civil Court by judgment dated 24th July 2000. The alleged lessee preferred an appeal against the decree of dismissal of the suit before the High Court. By recording statements of the counsel representing the alleged lessee and the authority, a Division Bench of the High Court, by order dated 6th December 2000, disposed of the appeal by directing the authority to expeditiously consider the application of the alleged lessee for conversion of his leasehold rights into freehold in accordance with law. The High Court also directed that the alleged lessee can be dispossessed only in accordance with the law. However, the High Court did not interfere with the findings recorded by the Trial Court on merits.

5. Based on the appli