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PETITIONER: MALIK BROTHERS

       Vs.

RESPONDENT: NARENDRA DADHICH & ORS.

DATE OF JUDGMENT:       25/08/1999

BENCH: S.SAGHIR AHMAD, & G.B. PATTANAIK

JUDGMENT:

PATTANAIK, J.

     Leave granted.

     This  appeal  by  grant of special leave  is  directed against the Judgment of the Division Bench of Madhya Pradesh High  Court, Indore Bench.  On a petition being filed  under Article  226 of the Constitution of India by a tax payer  of the Indore Municipality, the High Court entertained the same as  a public interest litigation and by the impugned  order, quashed  an auction held by the Indore Development Authority as  well  as  the highest bid of the appellant in  the  said auction  which  had been accepted by the Indore  Development Authority  and  also an award of a competent  arbitrator  in respect  of  the  dispute  between  the  Indore  Development Authority  and  the  appellant.  Before  embarking  upon  an inquiry  into  the legality of the impugned judgment of  the High  Court,  it is necessary to bear in mind that a  public interest  litigation  is usually entertained by a court  for the  purpose  of redressing public injury, enforcing  public duty,  protecting  social  rights   and  vindicating  public interest.  The real purpose of entertaining such application is  the vindication of the rule of law, effective access  to justice  to  the  economically weaker class  and  meaningful realisation  of the fundamental rights.  The directions  and commands  issued  by the courts of law in a public  interest litigation  are  for the betterment of the society at  large and  not  for benefiting any individual.  But if  the  court finds  that  in  the garb of a  public  interest  litigation actually  an  individual,s interest is sought to be  carried out  or protected, it would be the bounden duty of the court not to entertain such petition as otherwise the very purpose of   innovation  of  public   interest  litigation  will  be frustrated.  It is in fact a litigation in which a person is not  aggrieved personally but brings an action on behalf  of down- trodden mass for the redressal of their grievance.  In the  case of Sachidanand Pandey and Anr.  vs.  State of West Bengal  and  Ors., 1987(2) SCC 295, when the State  of  West Bengal  had allowed the construction of a five star hotel in the  vicinity of a zoological garden and a part of the  land belonging  to  the  zoo  had been leased  out  to  the  said company,  a  petition  had been filed in the  Calcutta  High Court  and  the  High Court having dismissed the  same,  the matter  had  been carried to this court and this court  also had  upheld the decision of the High Court, after coming  to

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the  conclusion  that  it  is impossible to  hold  that  the Government  of  West Bengal did not act with probity in  not inviting  tenders  or  in not holding a public  auction  but negotiating  straightway at arm,s length with the Taj  Group of  Hotels.  In the said Judgment Justice Khalid has added a few  paragraphs  indicating  as  to how  a  public  interest litigation  pose  a threat to courts and public alike.   The learned  Judge had sounded a word of caution that if  courts do  not restrict the free flow of case in the name of public interest litigation, "the traditional litigation will suffer and  the  courts of law, instead of dispensing justice  will have  to  take upon themselves administrative and  executive functions."  It was also stated by the learned Judge- "it is only  when  the  courts are apprised of gross  violation  of fundamental  rights  by  a group or a class action  or  when basic  human rights are invaded or when there are complaints of  such  acts  as shock the judicial  conscience  that  the courts, especially this court, should leave aside procedural shackles and hear such petitions and extend its jurisdiction under  all available provisions for remedying the  hardships and  miseries of the needy, the underdog and the neglected." In  the case of Ramsharan Autyanuprasi and Anr.  vs.   Union of  India and Ors., 1989 Supp.(1) SCC 251 , a writ  petition had  been  filed  in this court under  Article  32  alleging mismanagement  of  a public trust and this court  ultimately held  that the petition does not seek to advance any  public right  and innovation of the jurisdiction of this court as a public  interest  litigation,  in  the  back-ground  of  the allegations  made in the petition and in the context of  the case  was  wholly  unjustified.    This  court  has  further indicated  that the public interest litigation does not mean settling  disputes between individual parties and when there is  no  breach  of  fundamental rights  and  the  matter  is amenable  to  proceedings  under Sections 37 and 38  of  the Rajasthan  Public Trust Act to entertain a petition  styling into  which a public interest litigation is the abuse of the process  of  court.   The  object of  noting  the  aforesaid caution  indicated  in  two Judgments of this  court  is  to emphasise how in the case in hand this has proved to be true and  how  the respondent in the name of a tax payer  of  the municipality  has  protracted a public  interest  litigation which  ultimately has resulted gross injustice to the Indore Development  Authority  and also the appellant and  in  fact really,  interest of public is not at all involved and it is further  to  be noticed that the High Court has been  swayed away  to  entertain a petition and not only has set aside  a public  auction held at large but also quashed an award of a competent  arbitrator in respect of the dispute referred  to him  between the parties and application concerning the said award  is  pending before a competent civil  court,  thereby frustrating the provisions of the Arbitration Act fully.

     The  brief facts leading to the Judgment under  appeal are that the Indore Development Authority issued a notice of holding  of a public auction in respect of a plot of land in Indira  Complex  at Naulakha Road, Indore.  The auction  was scheduled  to  be  held on 15.4.81.  The appellant  was  the highest  bidder  in  the  auction and  the  bid  amount  was Rs.25,10,000/-.    The  said  bid   was  accepted  and   the appropriate  authority called upon the appellant to  deposit the  amount  and  to  produce a  relevant  stamp  paper  for execution   of  the  lease   deed.   The  appellant  however defaulted in making the deposit within the period stipulated in  the  notice.   On account of such  default  the  initial

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premium   which  had  been  deposited   to  the  extent   of Rs.6,27,500/-   was   forfeited.    The  appellant   however challenged  the order of forfeiture and requested the Indore Development  Authority,  to whom Indira Complex  scheme  has been  transferred  in the meantime by the State  Government, for  making  a reference to the arbitrator.  Initially  this request  had been rejected but by letter dated 8.6.90,  Shri K.S.   Bhatnagar, a retired I.A.S.  Officer was appointed as arbitrator.  The arbitrator ultimately passed an award.  The respondent  No.   1  herein, considering the award to  be  a serious public injury, approached the High Court by way of a public interest litigation and by an interim order, the High Court  restrained the Development Authority from  delivering the possession of the land to the appellant but prior to the aforesaid  interim order, the possession had been  delivered on  8.1.91.   It  was  contended  in  the  aforesaid  public interest  litigation  petition  that the value of  the  land would  be  much more than for which the same is going to  be handed  over  pursuant  to the award of the  arbitrator  and parting  with  a valuable piece of land for the small  price would  be  grossly prejudicial to the public interest.   The present appellant as well as the Development Authority filed their  counter affidavits before the High Court,  indicating therein  that there has been no illegality in referring  the dispute to the arbitrator and the said arbitrator considered the matter in several sittings and passed the award which is the  subject matter of an application filed under Section 14 of the Arbitration Act.  It was also indicated by the Indore Development  Authority that the board considered the dispute between  the appellant and the board in several meetings and finally  thought  it appropriate to refer the matter to  the arbitrator and such reference is a bona fide decision of the board  on  the  facts and circumstances of the case  and  it cannot be said that such reference has caused public injury. The  High  Court by the impugned Judgment after  considering the  provisions of Section 21 of the Arbitration Act and the law  on  the subject, came to the conclusion that there  has been  a  gross violation of the aforesaid provision  of  the Arbitration  Act  and it is not known why respondent No.   1 (Indore  Development  Authority)  elected   to  appoint  the arbitrator.   The  High  Court  also  came  to  the  further conclusion  that  the land would not have been  disposed  of even  on  lease  basis through arbitration  and  the  Indore Development   Authority  committed  an   error  of  law  and consequent  public  injury  by revival of a close  issue  by appointment  of  an arbitrator and by its attempt  benefited the  present appellant at the cost of public revenue.   With the  aforesaid  conclusion,  the   High  Court  quashed  the resolution  of  the Indore Development Authority,  referring the  dispute  to the arbitrator as well as the award of  the arbitrator and passed certain consequential directions.  The question that arises for consideration therefore, is whether in  the facts and circumstances of the case, the High  Court was justified in entertaining a writ petition in the garb of a  public  interest  litigation and was  justified  even  in setting  aside the award of a competent arbitrator which was not assailed under the provisions of the Arbitration Act but by  filing  a petition under Article 226 on the ground  that the  very  decision of the Improvement Trust, referring  the matter  to the arbitrator was illegal and has caused  public injury.

     At  the  outset  it  may be stated that  the  land  in question  was  admittedly  put  to public  auction  and  the

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appellant  was the highest bidder and this fact has not been disputed  at  any stage.  The further admitted  position  is that  the appellant had deposited some amount but could  not deposit  the  balance  amount  even though the  bid  of  the appellant  was  accepted by the competent authority and  for non-deposit  of  the  balance  amount,  the  earlier  amount deposited  stood  forfeited which however was challenged  by the  appellant.  It is at that stage the Indore  Development Authority  took into consideration all the relevant  factors and  thought it appropriate to refer all disputes pertaining to  the  land, which was subject matter of the  auction  for arbitration.  Not an iota of material has been placed before us  to  indicate that the said decision of  the  Improvement Trust  was  either for extraneous consideration or  had  not been  taken bona fide.  In course of hearing of this appeal, not an iota of material was produced before us by respondent No.   1 at whose instance the High Court had entertained the public  interest litigation petition to indicate that  there was  any  infirmity in the auction that was held on  15.4.81 and  that  the highest bid obtained was not genuine and  the price  obtained  thereon  is  grossly low.   Though  a  bald assertion had been made by respondent No.  1 that the normal price  of  the  land would be much higher than  the  highest auction  price  which  the  appellant  had  offered  but  no substantive material had been produced in the High Court and nothing  has been brought to the notice of this court  also. In  this view of the matter we fail to understand as to  how the  High Court could come to the conclusion that there  has been  gross  public  injury by referring the matter  to  the arbitrator  and  the Improvement Trust has acted beyond  its jurisdiction by referring the dispute pertaining to the land in  question  to the arbitrator.  In our considered  opinion the  very  act of entertaining the application as  a  public interest  litigation at the behest of respondent No.  1, who has  absolutely no interest in the transaction was  improper and  the  High  Court  had  in  fact  not  adverted  to  the parameters  for entertaining a petition as a public interest litigation.   It may not be out of place to mention at  this stage  that  two  other auctions, similarly  held  were  not assailed  but it is the auction where the appellant was  the highest  bidder  was only assailed for the reasons known  to respondent  No.   1.  When the appellant had challenged  the legality  of  the action of the competent authority  in  the matter  of  forfeiture  of the deposit made,  the  competent authority thought it appropriate to refer the entire dispute pertaining  to  the land in question for arbitration and  we see no infirmity with that decision nor that decision can be said  to  have been taken on some extraneous  consideration. We  also fail to appreciate the conclusion of the High Court on Section 21 of the Arbitration Act inasmuch as there is no bar  for  parties  to  a dispute to refer  the  dispute  for arbitration  instead of litigating in common law courts.  In our  view, Section 21 of the Arbitration Act does not  debar the   parties  to  refer  a   dispute  between  them  to  an arbitrator,  particularly  when  the  litigation  in  normal course  has become not only expensive but also continues for years  together.   If  any informal forum is chosen  by  the parties for expeditious decision of their disputes, it would not  be safe for a court of law to come to a conclusion that such   decision   has   been   taken  for   any   extraneous consideration  without  any  supporting  materials  in  that regard.   In  the  case in hand, the High  Court  of  Madhya Pradesh  committed  serious  error of law  by  invoking  its discretionary   jurisdiction  under  Article   226  of   the Constitution  of India at the behest of a person who has  no

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interest  in the litigation in question and in quashing  the decision  of  the Indore Development Authority of  referring the  dispute  to the arbitrator as well as the award of  the competent   arbitrator,  by  entering   into  an  arena   of conjecture  and by assuming that the price of land must have gone  up  without having before them any materials  in  that respect.   We have no hesitation, therefore to set aside the impugned  Judgment  of the High Court and we accordingly  do so.   Necessarily,  therefore,  the award of  the  competent arbitrator  remains operative and the rights of the  parties flowing  therefrom have to be worked out in accordance  with law.   The present appeal is allowed.  The impugned Judgment of  the  Madhya  Pradesh High Court in  Indore  Bench  dated 11.10.96  passed in Miscellaneous Petition No.  113 of  1991 is  set  aside and the sai d miscellaneous  petition  stands dismissed.   The  respondent No.  1 shall bear the  cost  of this  appeal  and  the  hearing   fee  is  assessed  as  Rs. 20,000/-.