K.K. BHALLA v. STATE OF M.P. AND ORS

Citation: [2006] 1 S.C.R. 342

Court: Supreme Court of India

Bench: S.B. SINHA, P.P. NAOLEKAR

Case summary

K.K. BHALLA v. STATE OF M.P. AND ORS.pdf

Judgment text

K. K. BHALLA v. STATE OF M. P. AND ORS. JANUARY 13, 2006 [S. B. SINHA AND P. P. NAOLEKAR, JJ. ] 'I Town Planning: Madhya Pradesh Nagar Tatha Gram Nivesh Adhinzvam. 1973: lands, buildings and other developmental works·-Power ofdisposal- Writ petitions, in the nature ofpublic interest litigations. were. filed questioning allotment oflands in favour of a Newspaper industry and YMCA-lands in question came within the Master Plan made in terms of the 1973 Act-The lands in question were situated in the commercial area carved out ofthe said Master Plan-Validity of-Held: The power of disposal of lands, buildings and other developmental works indisputably vests in the JOA·- The State and the JOA being creatures of the statute were bound to act within the fourcorners thereof-So far as the allotment ofland is concerned.

the purposefor which the same is a/lolled would be wholly irrelevant if it contravenes the mandatory provisions of the statute or the statutory rule· Disposal of the authority land is within the domain ofthe JOA, subject on(l' to the previous approval ofthe State Government-State has no power to interfere 11-ith the day to day functioning ofthe JOA-Hence allolment set aside-JOA direc/ed lo consider allotmenl ofland to privale persons in lerms ofthe provisions of the 1973 Ac/ and the Rules framed thereunder as also keeping in view 1he Mas/er Plan-Madhya Pradesh Nagar Tatha Gram Nivesh Vikasil Bhoomiyo, Griho, Bhavanothalha Anya Sanrachnaon Ka Vyayan N(1•am. 1975 Rr. 3, 4, 5 19 and 20. Writ petitions, in the nature of pubic interest litigation, were filed by the appellant before the High Court questioning allotment of lands in favour of a Newspaper industry and YMCA, private respondents respectively by the respondent-State. The lands in question indisputably ..

came within the Master Plan made in terms of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 in relation to the town of Jabalpur brought about by the Jabalpur Development Authority (JDA), a statutory K. K. BHALLA v. STATE OF M. P. 343 authority constituted thereunder. The lands in question were situated in the commercial area carved out of the said Master Plan. Before the High Court the appellant contended that a proposal was made for the construction of an auditorium and a cinema hall by the authority and that the allotments made in favour of the private respondents were in contravention of the Master Plan drawn in terms of the provisions of the 1973 Act. The High Court dismissed the writ petitions holding that the grants " in favour of the private respondents were made for public purposes which the State was empowered to do so in terms of the Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavanothatha Anya Sanrachnaon Ka Vyayan Niyam, 1975.

Hence the appeal. Allowing the appeal, the Court HELD: I. The State in terms of the provisions of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 and the Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavanothatha Anya Sanrachnaon Ka Vyayan Niyam, 1975 is a statutory authority. Its jurisdiction to oversee functions of the authorities of the Board as also power to issue directions are circumscribed by the provisions contained in Sections 72 and 73 of the 1973 Act. (355-F-GI 2. Concededly, the lands in question were either acquired lands or nazul lands.

It also stands admitted that in terms of the provisions of Section 71(2) of the Madhya Pradesh Town Improvements Trust Act, 1960 ~ even the nazul lands stand admittedly vested in the authority and having regard to the provisions contained in Section 87(l)(c)(iii) all assets and liabilities of the Town Improvement Trust shall belong to and be deemed to be the assets and liabilities of the Town and Country Development Authority established in place of such Town Improvement Trust. [355"F-G[ 3. The power of disposal of lands, buildings and other developmental works indisputably vests in the Town and Country Development Authority i. e. the Jabalpur Development Authority (JOA). It has not been informed ~ as to whether any regulation has been framed by the authority for regulating the procedure for disposal of developed lands, houses, buildings and other structures. However, the lands in question are developed lands. The right to dispose of such lands, therefore, vests in the J DA.

Such a right being subject to the rules made by the State, the provisions thereof may be closely examined. (356-A-B( 4. The right to transfer land on concessional terms, thus, is subject to two limitations, viz. , (i) approval of the State is required therefor; and (ii) no lease on concessional terms shall be allowed for purposes other than charitable purposes such as hospital, educational institutions and orphanages; which implies that in a given situation a lease may be granted on concessional terms to any other institution but therefor sufficient and '( cogent reasons must be assigned. (356-E-F( 5. JOA, therefore, only had requisite authority to initiate the proceedings for grant of lease of land on concessional terms wherefor only the previous approval of the State was required to be taken. The State, except for grant of previous approval to the proposal of the JOA and ultimate grant of lease of its land on concessional terms, has no other role to play.

Disposal of the authority land is, thus, within the domain of the JOA, subject only to the previous approval of the State Government. (356-F-G( 6. The State and the JOA being creatures of the statute were bound to act within the four-corners thereof. Procedures for disposal of land having been laid down in the rules, power in that behalf was required to be exercised strictly in conformity therewith and de' hors the same. (356-H; 357-A-BI 7. It is not in dispute that the land within the Scheme was reserved for auditorium and cinema hall (for public and semi-public purposes) at city level. Purported policy by the State was adopted on 10. 8. 1995 only. p Pursuant to or in furtherance of the said policy decision, a decision was taken to allot the land on 14. 10. 1995. It is only on 21. 11. 1995 the State allotted the land in question in favour of the private respondent stating that the land is a Government land. (357-D-E( 8.

It is also accepted that the land was allotted for the purpose of establishing a printing press and publication of a newspaper. It is also curious to note that despite the allotment, the quantum of premium and annual rent was not fixed. (358-C-D( • 9. I. So far as allotment of land in favour of YMCA is concerned the Revenue Department had also issued a circular dated 31. 5. 1996. fl (360-A-BI ( K. K. BHALLA v. STATE OF M. P. 345 j 9. 2. The said circular also could not have been issued in terms of ,/ the 1973 Act. Even otherwise, not more than 5,000 Sq. ft. of land could have been allotted thereunder. The impugned order, thus, ex facie suffers from total non-application of mind on the part of the authorities of the JDA and the State. The State, moreover, has acted beyond its authority. 1360-E-FI to. The State itself opined that the land in question is 'Authority Land'. It, therefore, could not do what is within the domain of the JDA. -\ 1360-FI 11.

The purpose for which allotments were made may be wellmeaning, but the allotments being contrary to the provisions of the Act and the Rules were void and of no effect being illegal. 1360-F-G I 12. So far as the allotment ofland is concerned, the purpose for which the same is allotted would be wholly irrelevant if it contravenes the mandatory provisions of the statute or the statutory Rule. 1360-G-HI Oil and Natural Gas Commission v. Association of Natural Gas Consuming Industries ofGujarat, 119901 Supp. SCC 397, referred to. 13. If any preference is to be given to any public utility service, a policy decision therefor was required to be adopted by the JDA if permissible under the statute and not otherwise. Even the State may not have a role to play in the matter under the Act. General policy decision adopted by the State in the absence of a provision of the statute cannot ipso facto be held to be applicable to JDA. 1361-E-FI ~ Bennett Coleman & Co. v.

Union ofIndia, 119721 2 SCC 788, Indian Express Newspapers (Bombay Private ltd) v. Union ofIndia, 11985) 1 SCC 64 I and Bangalore Development Authority v. R. Hanumaiah, (2005) 8 SCALE 80, relied on. Hindustan Petroleum Corpn. ltd v. Darius Shapur, Chennai, (2005) 7 SCALE 386, Commissioner ofPolice v. Gordhandas Bhanji, AIR (1952) SC 16 and Bahadursinh lakhubhai Gohil v. Jagdishbhai M. Kamalia 120041 2 sec 65, cited. 14. Both the State and the JDA have been assigned specific functions ; under the statue. The JDA was constituted for a specific purpose. It could not take action contrary to the scheme framed by it nor take any action which could defeat such purpose. The State could not have interfered with the day to day functioning ofa statutory authority.

Section 72 of the 1973 Act authorizes the State to exercise superintendence and control over the acts and proceedings of the officers appointed under Section 3 and the authorities constituted under the Act but thereby the State cannot usurp the jurisdiction of the Board itself. The Act does not contemplate any independent function by the State except as specifically provided therein. (362-E-G( 15. The Development Plan was prepared in terms of the 1973 Act and the Rules framed thereunder. h has not been shown that change of user is permissible under the Act or the Rules. In the absence of such a provision and/or without following the statutory requirements therefor, if any, the State in exercise of its executive power could not have directed that the lands meant for use for commercial purposes may be used for industrial purposes. [362-G-H; 363-A-B[ Friends Colony Development Cammi/lee v. Stale of Orissa, [2004[ 8 sec 733, relied on. 16.

Furthermore, in terms of Section 73 of the 1973 Act, the power of the State Government to issue direction to the officers appended under Section 3 and the authorities constituted under the Act is confined only to matters of policy and not any other. Such matters of policy yet again must be in relation to discharge of duties by the officers of the authority and not in derogation thereof. [363-F-G[ 17. The State has no power to issue any general direction. The State has furthermore no power to interfere with the day to day functioning of the JDA. Any such direction by the State to the officers must be in discharge of their duties in terms of the provisions of the Act and not otherwise. [363-G-HI 18. The purported policy decision adopted by the State as regards allotment of land to the newspaper industries or other societies was not a decision taken by the appropriate Ministry.

If a direction was to be issued by the State to the JDA, it was necessary to be done on proper application of mind by the cabinet, the concerned Minister or by an authority that is empowered in that behalf in terms of the Rules of the Executive Business framed under Article 166 of the Constitution of India. Such a direction "' could not have been issued at the instance of the Chief Minister or at the instance of any other officer alone unless it is shown that they had such authority in terms of the Rules of the Executive Business of the State. It {. K. K. BHALLA v. STATE OF M. P. 347 has not been shown that the Chief Minister was the appropriate authority to take a decision in this behalf. The purported policy decision is in respect of the lands belonging to the State and not those belonging to the JOA. The said policy decision applies to the entire State of Madhya Pradesh.

It is not appreciable in relation to such lands which come within the purview of any Scheme framed under the Act. It was issued by the Revenue Department under Revenue Book Circular Four-I. Evidently therefor no decision has been taken by the State in terms of the provisions of the 1960 Act or the 1973 Act. The concerned Ministry was the Ministry of Housing and Environment. The jurisdiction of the State while exercising the power to issue direction in this behalf is extremely limited. 1364-A-EI Rakesh Ranjan Verma v. State ofBihar, 119921 Supp. 2 SCC 342, UP. State Electricity Board v. Ram Autar, 119961 8 SCC 506 and Bangalore Development Authority v. R. Hanumaiah, (2005) 8 SCALE 80, relied on. 19. The private respondents complained of discrimination on the ground that persons similarly situated have been allotted land at concessional rate but therefor no factual foundation had been laid.

When an allotment is illegal, Article 14 which carries with it a positive concept would have no application. 1364-F-GI Jallandhar Improvement Trust v. Sampuran Singh. Il 9991 3 SCC 494 and State ofBihar v. Kameshwar Prasad Singh, 120001 9 SCC 94, relied on. 20. Malice may either be on fact or in law. Passing of an order for unauthorized purpose constitutes malice in law. 1365-B-CI Punjab State Electricity Board Ltd. v. Zora Singh, 120051 6 SCC 776 and U. O. J. the Govt. of Pondicherry v. Ramakrishna, JT (2005) 9 SC 422, relied on. 21. Furthermore, when the State has framed Rules and adopted a procedure for disposal of the land, both the State and the JOA were bound thereby. They could not have taken any action contrary thereto or inconsistent therewith. 1365-C-DI 22. Both the State and the JOA had evidently been acting under some misconception. The Board was of the opinion that in relation to nazul land, the State is the final authority to allot land as the power of sanction lies ...

,, within its domain. The State did not have any such power. The State, even in terms of Rule 3 of the 1975 Rules, has a limited role to play. (365-D-EI 23. It is well-settled that if an illegality is brought to the notice of the Court, it can, in certain situations, exercise its power of judicial review . suo moto. (366-C-D( Sham Lal v. Atme Nand Jain Sabha, (1987( I SCC 222, Chairman & MD. BPL ltd. v. S. P. -, power to plan development of city and to regulate the building activity therein flows from the police power ofthe State. The exercise of such governmental power is justified on account of it being reasonably necessary for the public health, safety, morals or general welfare and ecological considerations; though an unnecessary or unreasonable intermeddling with the private ownership of the property may not be justified.

" ) ':/' Furthermore, in terms of Section 73 of the 1973 Act, the power of the State Government to issue direction to the officers appended under Section 3 and the authorities constituted under the Act is confined only to matters of policy and not any other. Such matters of policy yet again must be in relation to discharge of duties by the officers of the authority and not in. derogation thereof. The State has no power to issue any general direction. The State has ~ furthermore no power to interfere with the day to day functioning of the JOA. Any such dire~tion by the State to the officers must be in discharge of -1, their duties in terms of the provisions of the Act and not otherwise. The direction of the Chief Minister being de'hors the provisions of the Act is void ' l and of no effect. The purported policy decision adopted by the State as regards allotment \. of land to the newspaper industries or other societies was not a decision taken by the appropriate Ministry.

If a direction was to be issued by the State to the JOA, it was necessary to be done on proper application of mind by the cabinet, the concerned Minister or by an authority who is empowered in that behalf in terms of the Rules of the Executive Business framed under Article 166 of the Constitution of India. Such a direction could not have been issued at the instance of the Chief Minister or at the instance of any other officer alone unless it is shown that they had such authority in terms of the Rules of the Executive Business of the State. We have not been shown that the T Chief Minister was the appropriate authority to take a decision in this behalf. We have noticed hereinbefore that the purported policy decision is in respect of the lands belonging to the State and not those belonging to the J. D. A. The said policy decision applies to the entire State of Madhya Pradesh. It is not appreciable in relation to such lands which come within the purview of any Scheme framed under the Act.

It was issued by the Revenue Department under Revenue Book Circular Four- I. Evidently therefor not decision has been taken by the State in terms of the provisions of the 1960 Act or the 1973 Act. The concerned Ministry was Ministry of Housing and Environment. The jurisdiction of the State while exercising the power to issue direction in this behalf is extremely limited as has been noticed by this Court in Rakesh Ranjan Verma and Ors. v. State ofBihar and Ors.. [19921 Supp 2 SCC 343 at 348, U. P. State Electricity Board v. Ram Autar and Anr.. [1996) 8 SCC 506, Bangalore Development Alllhority (supra), para 55 and State of U. P. v. Neeraj Awasthi (2005) 10 SCALE 286). The Private Respondents herein complain of discrimination on the ' r ground that persons similarly situated have been allotted land at a concessional rate but therefore no factual foundation had been laid. When allotment is illegal, Article 14 which carries with it a positive concept would have no application.

[See Jalandhar Improvement Trust v. Sampuran Singh, [1999) 3 SCC 494, para 13 and State ofBihar and Ors. v. Kameshwar Prasad Singh and Anr. , [2000] 9 SCC 94, para 30] In the case of YMCA also, allotment has been directed to be made by the State. It may be that ultimately allotment was made by the JOA. But if the State had no role to play in the matter, even advice given by it would be ) ultra vires. The State, as noticed hereinbefore, could not implement its purported + ' policy decision as regard. allotment of land on concessional rates. Such direction or even a policy decision in this behalf is ultra vires being contrary to the statutory rules framed by it. An action by way of policy decision or otherwise at the hands of a statutory authority must be in consonance with the statutory rules and no de'hors the same. It is difficult to accept the submission of Mr. Chaudari that the orders impugned in the writ petition were not vitiated as the same was not arbitrary or malafide.

Malice may either be on fact or in law. Passing of an order for .. ~ unauthorized purpose constitutes malice in law. [See Punjab State Electricity Board Ltd. v. Zora Singh and Ors. , [2005] 6 SCC 776 and U. 0. 1. the Govt. of Pondicherry and Anr. v. V. Ramakrishna and Ors. , JT (2005) 9 SC 422]. Furthermore, when the State has framed rules and adopted a procedure for disposal of the land. both the State and the JOA were bound thereby. They couId not have taken any action contrary thereto or inconsistent therewith. Both the State and the JOA had evidently been acting under some misconception. The Board was of the opinion that in relation to nazul land, the State is the final authority to allot land as the power of sanction lies within its domain. We have noticed hereinbefore that the State did not have any such power. The State. even in terms of Rule 3 of 1975 Rules has limited role to play. However, there are certain subsequent events which should be taken note of.

Whereas the impugned order in the civil appeal arising out of SLP (C) No. 12442 of 2003 was passed on 21. 8. 2002, the SLP was filed on 7. 5. 2003. During pendency of the matter, the JOA had issued a circular on 4. 6. 2003 to the Private Respondent herein asking him to deposit a sum of Rs. 26 lakhs. The said amount is said to have been deposited on 7. 6. 2003 whereupon a deed of lease has also been executed. It is stated that the Municipal Corporation granted permission for construction of the building on or about 30. 7. 2004 subject to the conditions mentioned therein. A notice was issued on 11. 7. 2003 by this Court. It is stated that the Private Respondent has sent invoices for machines worth Rs. 2 crores for which a sum of Rs. I0 lakhs have been paid by way of advance. -I Submission of Mr. Tankha, in the aforementioned situation, is that the equities between the parties should be adjusted. We have noticed hereinbefore that on 11. 7. 2003 notice was issued in the matter.

The counsel for Respondent was present on the said date. An order of status quo was present on the said date. The Respondent, therefore, had notice about the pendency of the special leave petition. It might have applied for and granted the permission for construction of building but we find no reason as to how without constructing any building, orders for delivery of machines should have been issued. It is not the case of the Private Rtspondent that they had started construction pursuart to or in furtherance of the permission granted in this behalf by Municipal Corporation of Jabalpur. The Appellant has brought to the notice of the High Court that a malady has been prevailing in the department ofthe State of Madhya Pradesh and the JDA.

It may be true that the Appellant did not file any application questioning similar allotments but it is well-settled if an illegality is brought to the notice of the court, it can in certain situations exercise its power of judicial review suo mow (See Sham Lal (dead) by lrs. v. Atme Nand Jain Sabha (Regd), Dal Bazar. [1987] I SCC 222, Chairman and MD. BPL ltd v. S. P. Gururaja and Ors. , VS [2003] 8 SCC 567 and Guruvayoor Devaswom Managing 0 Committee and Anr. v. C. K. Rajan and Ors. , [2003) 7 SCC 546). It is also well-settled that the equality clause contained in Article 14 of the Constitution of India cannot be invoked for perpetrating an illegality. For the reasons aforementioned, the impugned judgments of the High Court cannot be sustained, but, having regard to the facts and circumstances of this case, we are of the opinion that the interest of justice would be subserved if the question as regards allotment of land is left to the Jabalpur Development Authority.

The Authority may consider the matter afresh for grant of such allotment in favour of the Private Respondents herein treating the applications filed by them either before it or before the State Government as fresh applications. Such applications must be processed strictly in terms of the provisions of the 1973 Act and the Rules framed thereunder as also keeping in view the Master Plan. Such a decision should be taken by the Competent Authority of the JDA at an early date preferably within a period of two months from the date of receipt of the copy of this order. The JDA shall return the amount deposited by the Private Respondents, if any, within four weeks from date. These appeals are allowed to the aforementione~ extent but in the facts and circumstances of this case there shall be no order as to costs. V. S. Appeal allowed.