HARYANA STATE INDUSTRIAL DEV. CORPN. v. SHAKUNTLA & ORS

Citation: [2009] 15 S.C.R. 413

Court: Supreme Court of India

Bench: TARUN CHATTERJEE, V.S. SIRPURKAR

Case summary

HARYANA STATE INDUSTRIAL DEV. CORPN. v. SHAKUNTLA & ORS.pdf

Judgment text

[2009] 15 (ADDL. ) S. C. R. 413 HARYANA STATE INDUSTRIAL DEV. CORPN. ,,. ' v. SHAKUNTLA & ORS. (Civil Appeal No. 7020 OF 2009, Etc. ) OCTOBER 22, 2009 [TARUN CHATTERJEE AND V. S. SIRPURKAR, JJ. ] • Land Acquisition - Release from acquisition - High " Powered Committee recommending release of certain land while denying release in respect of other land on same parameters - Writ Petition - High Court holding the recommendation discriminatory - Directing release of land of writ petitioner on the conditions that land-owner maintains the green belt and pays development charges to Industrial 'to! ~ Development Corporation - On appeal, held: The act of High Powered Committee in denying release of one land and allowing that of the other was discriminatory- Implementation of development plan is within the discretion of executive authority - But when guidelines have been laid down for such task, it is a matter of policy - Discretion to change a policy in exercis.

e of executive power must be efercised fairly - Where a particular mode is prescribed for domg an act and there is . no impediment in adopting the procedure, the deviation from ~ the procedure without disclosing any discernible principles shall be labeled as arbit(ary - However, condition of maintaining green belt, is not correct - The condition modified to the effect that the Corporation would maintain the green belt - Constitution of India, 1950 - Article 14, 1894 - s. 4. Lands were acquired for the purpose of development of a corporate complex for industrial institutional, ~ commercial and recreational purposes. Respondent + No. 1, being one of the owners of the acquired land sought for release from acquisition. On the petition of respondent No. 1, High Court directed High Powered Committee to consider whether ~ .... the lands in question could be released from acquisition. The Committee recommended acquisition of the land of respondent No.

1 on the basis of parameters of evaluation formulated for it. However, it recommended release of the land of another owner '0', on the same parameters. Respondent No. 1 filed writ petition questioning the reco~mendation of the Committee. High Court held that • :. _ the release of land of '0' from acquisition was wrong and also amounted to discrimination against respondent No. 1. High Court directed release of the land of respondent No. 1 on the condition that they would maintain the green belt as desired by the Department which was essentially required to, lay . infrastructure and that they would also pay extern'al and internal development to Haryana State Industrial Development Corporation (HSIDC) as and when assessed and demanded. Hence, the present appeals. Disposing of the appeals, the Court HELD: 1. The land belonging to the respondent was rightly recommended for acquisition.

The release of the land of '0' would not frustrate the whole object of acquisition for expansion of the industrial estate since the 1 undertaking of 'O' to release land as desired by the HSIDC amounts to fulfillment of the lands needed by the HSIDC in that area. However, the manner in which it was released and the grounds that were relied on for its release are fought with defects that raise doubts regarding the impartiality and sincerity of the authority. [Paras 8 and 9) [421-C-D; 422-8-C] t· ... 2. It is not possible for the court to sit in appeal over the exe. r-eise of such satisfaction by the authority vested with the task of implementing the development plan. The SHAKUNTLA & ORS. task of such authority is no doubt to ensure the smooth •t execution of the development plans and since they have a firsthand knowledge of the ground realities, they are surely at a better position than any one else to decide as to which land is to be acquired and which is to be released.

But when there has been a guideline laid down for the same task and it has been approved and notified, the issue becomes a matter of policy which the authority has to follow with a reasonable amount of uniformity. In • .. the given facts of the case, the respondents have alleged discrimination thereby attracting Article 14 of the Constitution of India. [Para 9-10] [422-F-H; 423-A-B] Union of India vs. International Trading Co. (2003) 5 SCC 437, relied on. 3. The discretion to change a policy in exercise of the .. .. - executive power, must be exercised fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. A question whether the impugned action is arbitrary or not, is to be ultimately answered on the facts and circumstances of the given case. Where a " particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in a different manner which does not disclose any . ,..

discernible principle which is reasonable itself shall be labelled as arbitrary. [Para 10] [424-C-E] 4. In the given facts of the case, the action of the Committee in releasing the lands of 'O' would not be I • - ... lo ""' , . "J ~ ... o'"'. ° ' "t, " ' ' "' ... ,l. ' • j the road network, will be adJusteEI~ as t. ~ese are . ' t -~f . . ' '. ~ l - - ~ ~ . -·~ - . ...... . ' ' ,... ; ' J· ! ' . · subject to the condition that'the'Town and Country : Planning Departhieiit has n6rtiled prosecfution· case in the Court of Law forftie \(iolations, and'shall give ,,. an undertaking to the. Gommitte~ that they will apply · ·L ' ·- '. ,,. 1 ' "J •t- I.... , •l ': -~· 1 • I•I~lr , ~ ~ ' '. 11 ~ ~ to the,Director, Town and Country. Planning for _,,, t .. , · 1,.. · •' , • 1 ''-. '' _. : . }- • • . I ~i~. ; , compounding the offe~c~s, ~na. sr~ll pay all the charges/ fees to the Government as per policy of :. . ':. the Department qf;Town and Qount(y P~lanning ··' ·J Haryana>- •' · · 1: j':. , i.

1,; • ·. ~ ' ·~ -... ··~ ',. -~ . •- '. •,! l·~/'~ •. ';,"·-r;'~-· Ill. To ensure continuity of the Industrial Estate, land under acquisition, which is essential for integrated . ""' planning, shall not be released. These guidelines and parameters for evaluation of the + merits of each case were approved by the Government of Haryana and Punjab and were subsequently notified through the newspaper 'The Tribune' and were also made available in the wet;>site of HSIDC. 't • 8. The land belonging to the respondent had houses and shops built prior to the notification issued under Section 4 of 'C the Act. However this does not amount to fulfilment of the conditions necessary for release of the land under the criteria laid down in the abovementioned parameters and as such, this particular land was rightly recommended for acquisition. On theother hand, the land belonging to Mis Orient Craft was .. _ .. recommended for release by the High Powered Committee on grounds which.

were beyond the scope of the criteria applied under the parameters approved by the Government. Moreover, as rightly pointed out by the High Court, the observation of the Committee regarding a seasonal nullah passing through. the lands of Mis Orient Craft are contrary to the actual facts. Consideration of this observation in releasing the land of. Mis Orient Craft betrays an element of either partiality or insincerity ~ 1' on the part of the Committee. Though, no construction was raised on the land of Mis Orient Craft, the State of Haryana sought an affidavit from the General Manager of Mis Orient Craft before releasing their land. In the affidavit filed by the Senior General Manager of Mis Orient Craft, it was averred that they would leave the land as desired by the HSIDC which is essentially required to lay the infrastructure. Moreover, it was averred that they would also pay the proportionate external and internal developmental charges to the HSIDC.

Consequent to ·~ • the submission of this affidavit, the Director of Industry & Commerce, Haryana, released the land belonging to Mis Orient Craft. This procedure of release of the land notified for acquisition clearly does not conform to the guidelines that were formulated and approved at the first place. l' ... 9. It appears that the release of the land of Mis Orient Craft would not frustrate the whole object of acquisition for expansion of the industrial estate since the undertaking of M/s Orient Craft to release land as desired by the HSIDC amounts to fulfilment of the lands needed by the HSIDC in that area. However, the manner "in which it was released and the grounds that were relied on for its release are fraught with defects that raise + ~ doubts regarding the impartiality and sincerity of the ,authority.

The appellant corporation has sought to justify the decision of the High Powered Committee to release that particular land by referring to a judgment of this Court in the case of Anand Buttons v. State of Haryana and others [(2005) 9 SCC 164] wherein this court observed: ( "... reasoning of the High Court cannot be faulted for the "' simple reason that the authority, who has to carry out the planned development of the industrial estate, is in the best position to judge as to which land can be exempted from the acquisition without jeopardizing the development scheme. It is not possible for the court to sit in appeal over the exercise of such satisfaction by the authority vested with the task of implementing the development plan.

" ~ 7" Thus the validity of the decision of the concerned authority wasupheld on the ground that it has to carry out the planned development of the industrial estate and so it is in the best position to judge as to whichland can be exempted from acquisition without jeopardising the development scheme. As such, it was rightly held by this court in Anand Buttons's Case (supra) that it is not possible for the court to sit in appeal over the exercise of such satisfaction by the authority vested with the task of implementing the development plan. ". • 10. The task of such authority is no doubt to ensure the smooth execution of the development plans and since t. hey have firsthand knowledge of the ground realities, they are surely at a better position than anyone else to decide as to which land >-1 is to be acquired and which is to be released.

But when there has been a guideline laid down for the same task and it has been approved and notified, the issue becomes a matter of policy which the authority has to follow with a reasonable amount of uniformity. In the given facts of the case, the respondents have alleged discrimination thereby attracting Article 14 of the Constitution of India. As held in the case of Union of India v. International Trading Co. [(2003) 5 SCC 437), .. i Article 14 applies to matters of government policy and such policy or action would be unconstitutional if it fails to satisfy the· test of reasonableness. This Court observed : "... It is law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any ... action of the Government, even in contractual matters, fails ,> ~ to satisfy the test of reasonableness, it would be unconstitutional.

While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily on by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone " ;' irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the state, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of .. .. arbitrariness is more easily visualized than precisely defined.

A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious ( test to apply in such cases is to see whether there is any ........ discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in different manner which does not 8 disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. " t- ~ The discretion to change a policy in exercise of the executive power, which appears to be the case in the present matter, must be exercised fairly and should not give the impression that it was so done arbitrarily or by any ulterior .. criteria.

It has been observed by this court, as noted herein above, that a question whether the impugned action is arbitrary ;. ~or not, is to be ultimately answered on the facts and circumstan,9es of the given case. It was rightly held that where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in a different manner which does not disclose any discernible prinqiple which is reasonable itself shall be labelled as arbitrary. 11. Thus in the given facts of the case, the action of the ~ ~ Committee in releasing the lands of Mis Orient Craft would not be arbitrary in so far as it has deviated from the procedure laid down in the form of guidelines approved for the same purpose, provided a principle discerned from the deviation is within the bounds of the reasonableness test.

From a perusal of the facts of the case, it is clear that the release of the land of Mis Orient Craft may be said to be based on the logic that as the undertaking of Mis Orient Craft to release their land as desired by the department had fulfilled the lands needed by the HSIDC, ;- .. so the deviation in releasing the same has a justifiable reason. So, we may safely say that such deviation from the procedural guidelines is not unjustified in the present situation. This leads us to the question as to why such a reasonable principle was not applied in the case of the lands of the respondent, though the same were contiguous and adjoining the lands of Mis Orient Craft and thereby releasing the land of the respondent also. 12. As the deviation from the guidelines in releasing the 8 land of M/s Orient Craft has been found to be not wrongful, there is no question of committing two wrongs by applying the same yardstick to release the lands of the respondents.

As such, we do not find anything wrong in the decision of the High Court to release the lands of the respondents from acquisition. 13. Thus, let us now consider the question raised by the respondents regarding the validity of the conditions laid down by the High Court for release of their lands. As noted herein earlier, the High Court had laid down the following conditions for the release from acquisition of the lands of the respondents i. That they will maintain the green belt as desired by the Department which is essentially required to lay the infrastructure. ii. That they would pay the proportionate internal and external charges to the HSIDC as and when it is ~ required by the authorities. It is obvious that these conditions laid down are very similar to the undertaking of Mis Orient Craft which was filed in the form of an affidavit as mentioned earlier. At the risk of repetition, we would like to mention the two conditions mentioned in the undertaking of Mis Orient Craft viz.

:- i. That they would leave the land as desired by the department which is essentially required to lay the infrastructure. · ii. That they would also pay the proportionate external and internal development charges to the HSIDC as and when assessed and demanded. 'I-·~ Thus, the intention of the High Court is clearly to bring parity in the status of the lands of the respondents vis-a-vis that of M/s Orient Craft. This is justifiable since the same principle has been applied that is discernible from the act of release from acquisition of the land of M/sOrient Craft, as has already been observed. 14. However, the respondents have argued against the . t, ·r . validity of the condition to maintain a green belt on thei_r land up to 50 meters on two grounds. First, they relied on a judgment of this Court in the case of Raju S. Jethmalani v. State of Maharastra [(2005) 11 SCC 222] wherein it was held that the burden to make available green area cannot be put on the citizens.

Secondly, it was argued that the condition of maintaining 50 meters green belt is not supported by any law ... in force, and also that even under Section 3 of the Punjab ~ Scheduled Roads & Controlled Areas (Restriction of Unregulated Development) Act,· 1963, there is no condition of maintaining green belt: 15. Before taking up the first point, we would like to clarify one thing about the second point. It is true that Section 3 of the Punjab Scheduled Roads & Controlled Areas (Restriction of Unregulated Development) Act, 1963 does not explicitly require t the maintenance of 50 meters green belt. However, ori. e must take into consideration the fact that the Corporation had been appointed as a nodal agency by the State Government for rapid industrialisation ofthe State and so it had to carry out the planned development of the industrial estates. The needs of ...

industrialisation and economic development are so dynamic that it is not possible to limit these needs by certain legislative provision. These needs will change according to the growing ~ ... economic demands. In the present case in hand, the need for rapid industrialization of the State was recognised by the State Government and accordingly notifications were issued by it under Sections 4 and 6 of the Act, which was clearly done - > .. according to the applicable rules and procedures. Moreover, there is no law in force that categorically limits the area to which a green belt may be extended, and this means that it is a need based decision on the part of the authority though it has to be within reasonable bounds.

So the mere fact that Section 3 of the Punjab Scheduled Roads & Controlled Areas (Restriction of Unregulated Development) Act, 1963 does not explicitly require the maintenance of 50 meters green belt, cannot be • i allowed to frustrate the attempt to meet the ever increasing economic needs of rapid industrialisation. In this regard, we may once again look back to the judgment in Anand Button's case (supra) and conclude that since the nodal agency is in the best position to decide how much is needed for the maintenance of 50 meters green belt, there is nothing wrong in requiring the same in the given case. 16. As far as the judgment in the case of Raju S. Jethmalani (supra) is concerned, we need to see whether the facts in that case are similar to the facts in the present case. In Raju S. Jethmalani, this court held that no burden can be placed on private citizens to provide suitable area in· the locality for using the same as garden or park. This Court observed : "...

We fail to understand how can the burden be placed on . ,. the appellants that they should provide suitable area in the present locality for using the same as garden or park. Rather, the burden should have been placed on the Municipal Corporation or the State Government instead of putting it on the appellants that they must provide some space for garden and park. This direction, in our opinion, appears to be wholly misconceived and we set aside the impugned order of the Division Bench... " ~ In view of the above, therefore, the burden should have been placed on the Municipal Corporation or the State Government and not on the individuals. This appears to render the judgment of the High Court in the present case fallacious as far as the conditions imposing maintenance of a green belt '! '- .. on the respondents is concerned. However in the present case, the purpose is very different from that in Raju S. Jethmalani's case and also the applicable Acts are different.

So the need is to check whether the two situations are in pari materia or not. We have to take into account the observations of this Court in Raju S. Jethmalani's case (supra) that a development plan can be prepared of a land comprising of a private person but that plan cannot be implemented till the land belonging to the private \- "' person is acquired by the Planning Authority. Accordingly in Raju S. Jethmalani's case (supra), the decision of the High Court to impose burden on private individuals to provide suitable area for park was found to be faulty because of the fact that the Municipal Corporation had failed to acquire the land for the said purpose even though it was planned so initially. It is beyond any doubt that in the present case, the HSIDC is < ready to acquire the land of the private persons i. e. the respondents, and so we fail to relate the situation in Raju S. Jethmalani with that of the present case.

Moreover, we cannot frustrate the overall purpose of the Act by relying on a judgment that relates to a matter under the Maharashtra Regional and Town Planning Act, 1966. Thus, we need not be bound by the decision in Raju S. Jethmalani's case (supra) as far as the burdening of a private person to provide land for public utility 't is concerned. However, so far as the question of maintaining a green belt imposed by the High Court in the impugned order is concerned, we are not in a position to agree with such directions of the High Court. 17. Leaving the land for the HSIDC to develop a green belt is different from that of requiring the private person to maintain the green belt since that will be an unnecessary burden on that person.

Since we have sought to rely on the ayerment made ·~ by M/s Orient Craft in order to bring parity between the status "' of the lands of the respondents and Mis Orient Craft, we believe that the same criteria should be applied in releasing these lands from acquisition. The most important issue is that the process of development and industrialisation as planned and approved by the legislature should not meet a dead end because of small stretch of land. As such, the land of the respondents shall be released from acquisition as was the case with M/s Orient Craft, but the same shall be done on same grounds as was applied for the land of Mis Orient Craft. Accordingly, affirming the judgment of the High Court, we only modify the conditions for fulfilment on the part of the respondents so that their land is released from acquisition. These are:- i.

They will release the land which is needed by the HSIDC for maintaining the green belt, undisturbed and such land shall be not more than the 50 meters prescribed for the Green Belt. ii. They will pay. the proportionate external and internal charges to the HSIDC as and when it is required by the authorities. ; 18. Apart from the modifications that we have made in the conditions imposed by the High Court in the impugned judgment as mentioned above, we do not find any merit in these appeals. 19. For the reasons aforesaid, the appeals are disposed of with the aforesaid modification of the impugned judgment of . the High Court. There will be no order as to the costs. K. K. T. Appeals disposed of. -( '. ~ (J '·