http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7  

PETITIONER: NEW INDIA PUBLIC SCHOOL & ORS. ETC

       Vs.

RESPONDENT: HUDA & ORS. ETC

DATE OF JUDGMENT:       15/07/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  JT 1996 (7)   103        1996 SCALE  (5)553

ACT:

HEADNOTE:

JUDGMENT:                             WITH SPECIAL  LEAVE   PETITION  (CIVIL)  NOS.12261-64,  12338-41, 12720-23 AND 13053 OF 1996.                          O R D E R In SLPs except SLP Nos. 12720-23/96      We have  heard the counsel on both sides. These Special Leave Petitions  have been  filed against  the order  of the Division bench  of the Punjab & Haryana High Court in L.P.A. No.1368/92 and batch, dated March 1, 1996. The Haryana Urban Development Authority  (HUDA) had  invited applications  for allotment of  sites to  establish the  high schools, primary schools or  nursery schools  in the  zone earmarked  for the schools in  Panchkula. Pursuant thereto, several applied for allotment of  sites. HUDA  had allotted,  out  of  23  plots available, sites to 1, persons and denied allotment to eight persons. The  non-allotees filed  the writ  petitions in the High Court challenging the validity of the procedure adopted by the  HUDA in  allotting sites  to the schools. Though the learned single  Judge found  fault with  the  allotment,  on finding and  taking into  consideration  that  pending  writ petitions, the  petitioners and  some of the respondents had constructed buildings  and schools  were being  run  at  the allotted plots,  he upheld  their actions  and dismissed the writ petitions  with the  observations mentioned therein. On appeal, the  Division Bench  set  aside  the  order  of  the learned single Judge and while quashing the allotments made, issued directions as enumerated thus:      "a) All  the school  sites required      to be  allotted or  sold  shall  be      notified   afresh    strictly    in      accordance with  the provisions  of      the Act  and the  Regulations.  All      the   petitioners,    the   private      respondents and  all other eligible      persons  shall   be  permitted   to      participate in  the process of sale

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7  

    or allotment;      b) preference  shall be  given  for      sale or allotment by open auction;      c)   In    case,   the   respondent      authority decides  not to resort to      the method  of open auction, it may      invite applications  in  accordance      with the provisions of Regulation 5      and on the prescribed proforma;      d) The  tentative price/premium  of      each site  shall be  pre-determined      and  proportionate   earnest  money      received       alongwith        the      applications, if filed;      e) appropriate  reasonable  uniform      criterion    for     making     the      allotments,  if   so   desired   be      notified in advance;      f)  Before  initiating  action  for      sale or  allotment  of  the  school      sites,      value       of      the      construction/building raised by the      private respondents herein shall be      got determined  by the Committee of      experts Headed by a Chief Engineer;      g) The  intending allotees would be      intimated that  if they  succeed in      getting the  school sites  allotted      in their favour, they will take its      possession alongwith  the  building      staff and the students who offer to      remain           in           their      employment/institutions;      h) Incase it is decided to transfer      the land  by open  auction it shall      specifically be  mentioned  in  the      notice that  in  case  the  present      allottee succeeds  in such  auction      they shall  be given the benefit of      10  percent   of  the   bid  amount      offered by them;      i) Out  of the  amount realised  by      sale or  lease on  account  of  the      price-premium     the     erstwhile      allottees shall  be paid the amount      spent   by    him/it   in   raising      construction of the building at his      own risk  and responsibility during      the pendency  of the writ petition,      as calculated  by Expert  Committee      alongwith the  amount already  paid      to the  HUDA such a provision would      not   be   applicable   where   the      allottee exercises  his  option  to      remove the  construction raised  by      him/it  at  his/its  own  risk  and      responsibility.      j) The  process be initiated within      two  months  and  completed  within      four months;      k)  Till   the  process   of  fresh      allotment is completed, the private      respondents shall  be permitted  to      remain in  possession of the school      sites   allotted   to   them.   The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7  

    appellants are held entitled to the      payment of costs which are assessed      at Rs.2,000/- per appeal."      Shri P.P.  Rao, Shri  Gopal Subramaniam, learned senior counsel appearing for the petitioners and Shri Arun Jaitley, learned senior counsel appearing for the HUDA contended that the HUDA  had laid  the criteria for allotment of the sites; invited  applications,  prescribed  the  pre-conditions  for compliance laid down therein; a Committee was constituted to go into  the credentials  of the applicants; and after close scrutiny of  those applications  the HUDA had allotted these sites  to   the  petitioners  in  total  to  11  applicants. Therefore, the procedure adopted by the HUDA cannot be found fault with. Shri Rao and Gopal Subramaniam further contended that allotment  by auction is not the only criteria provided in Section  15 of  the Haryana  Urban Development  Authority Act,  1977   (for  short,  the  "Act").  The  Haryana  Urban Development (Disposal  of Land  and  Buildings)  Regulations 1978 (for  short, the Regulations) do indicate the provision for allotment by modes other than public auction. Proviso to regulation 5(3)  itself gives  power for allotment to groups or individuals  or  persons  practicing  any  profession  or carrying on  any occupation,  trade or  business or  for any such categories  of  persons  or  government  department  or institution   or    charitable   institutions    or    other organisations for  public welfare  as may  be decided by the authority from  time to  time. Therefore, the Division Bench was not  right in  its conclusion  that allotment  by public auction is the only mode of allotment.      It  is   also  further   contended  that  pending  writ petitions the  petitioners have constructed the buildings at a huge  cost. Compliance  of the  directions of the Division Bench  would  put  them  to  great  disadvantage  and  that, therefore, the  relief should  be suitably  moulded.  Having given consideration  to the respective contentions, we think that the  directions issued  by the  Division bench  broadly cannot be  found fault  with. It  is seen that Section 15 of the Act  gives power  to the  authority for  disposal of the land as under:      "15.  Disposal   of  land   :-  (1)      Subject to  any directions given by      the State Government under this Act      and  to   the  provisions  of  sub-      section  (5),   the  Authority  may      dispose of -      (a) any  land  acquired  by  it  or      transferred  to  it  by  the  State      Government without  undertaking  or      carrying   out    any   development      thereon; or      (b) any such land after undertaking      or carrying out such development as      it thinks  fit, to such persons, in      such manner  and  subject  to  such      terms   and   conditions,   as   it      considers  expedient  for  securing      development.      (2) Nothing  in this  Act shall  be      construed as enabling the Authority      to dispose  of land  by way of gift      but  subject   to  this  condition,      reference  in   this  Act   to  the      disposal of land shall be construed      as  reference   to   the   disposal      thereof in  any manner,  whether by

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7  

    way of  sale, exchange  or lease or      by the  creation of  any  easement,      right to privilege or otherwise.      (3)  Subject   to  the   provisions      hereinbefore     contained,     the      Authority  may,   sell,  lease   or      otherwise   transfer   whether   by      auction, allotment or otherwise any      land or building belonging to it on      such terms  and  conditions  as  it      may, by regulations, provide.      (4) The consideration money for any      transfer  under   sub-section   (1)      shall be  paid to  the Authority in      such manner  as may  be provided by      regulation.      (5)    Notwithstanding     anything      contained in any other law, for the      time being  in force,  any land  or      building or  both, as  the case may      be, shall continue to belong to the      Authority    until    the    entire      consideration money  together  with      interest and  other amount, if any,      due to the Authority, on account of      the sale  of such  land or building      or both is paid.      (6) Until  the conditions  provided      in the  regulations are  fulfilled,      the transferee  shall not  transfer      his rights  in the land or building      except with the previous permission      of  the  Authority,  which  may  be      granted   on    such   terms    and      conditions  as  the  Authority  may      deem fit." Regulation 3 provides the mode of disposal thus:      "Mode of  disposal - Subject to any      direction  issued   by  the   State      Government under the Act and to the      provisions of  sub-section  (5)  of      section 15 of the Act:      (a) the  Authority may  dispose  of      any  land   belonging  to   it   in      developed or an undeveloped form;      (b) any  land or  building  of  the      Authority may  be  disposed  of  by      Authority by  way of  sale or lease      or exchange  or by  the creation of      any easement  right or privilege or      otherwise;      (c) the  Authority may  dispose  of      its land or building by way of sale      or lease  either by allotment or by      auction, which  may be  by open bid      or by inviting tenders.      SALE OR  LEASE OR  LAND/BUILDING BY      ALLOTMENT      4.    Fixation     of     tentative      price/premium -      (1) The tentative price/premium for      the disposal of land or building by      the Authority  shall be such as may      be  determined   by  the  authority      taking into  consideration the cost

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7  

    of   land,    estimated   cost   of      development cost  of buildings  and      other direct  and indirect charges,      as  may   be  determined   by   the      Authority from time to tine.      (2) An  extra 10%  and 20%  of  the      price/premium shall  be payable for      "preferential"     and      Special      preferential" Plots respectively.      5. Procedure  in case  of  sale  or      lease  of   land  or   building  by      allotment -(1)  In the case of sale      or   lease   of   residential   and      industrial  land   or  building  by      allotment the  intending  purchaser      shall make  an application  to  the      Estate  Officer  concerned  in  the      prescribed form  (annexed to  these      regulation) as  given in  forms ’A’      and ’B’ respectively.      (2)  No   application  under   sub-      regulation      (1)  shall   be  valid   unless  it      accompanied by  such amount  as may      be  determined  by  the  Authority,      which shall  not be  less than  ten      per cent  of the  price/premium  in      the form  of a demand draft payable      to the Estate Officer, and drawn on      any scheduled  bank situated at the      local place  of the  Estate Officer      concerned or  any other  such place      as the Estate Officer may specify.      (3)  In  the  case  of  residential      plot/building when  the application      has been  so tendered,  the  Estate      Officer or such other office as may      be empowered, shall subject to such      directions as  may be issued by the      Authority in  this behalf  consider      the applicant  for allotment  of  a      plot  cr   buildings  of  the  size      applied for.  The allotment  may be      on ’first  come first served’ basis      or by  draw  of  lots,  as  may  be      determined by the Authority and the      successful applicant  shall be sent      allotment letter,  in form  ’C’  or      ’CI’ by registered post;           Provided that for the purposes      of proper  planning and development      of  an   urban  estate,   mind   or      building may be reserved for groups      or  individuals   or  for   persons      practicing   any    profession   or      carrying or  any occupation,  trade      or  business   or  for  such  other      category  of   Persons,  Government      Departments    and    institutions,      charitable institutions  and  other      organisations of public welfare, as      may be  decided  by  the  Authority      From time to time."      A reading  thereof, in  particular Section  15 [3] read with Regulation  3 [c]  does indicate that there are several

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7  

modes of  disposal of  the property  acquired  by  HUDA  for public purpose.  One of the modes of transfer of property as indicated in  sub-section (3)  of Section  15 read with sub- regulation (c)  of Regulation 5 is public auction, allotment or otherwise.  When public  authority discharges  its public duty the  word otherwise would be construed to be consistent with public  purpose and clear and unequivocal guidelines or rules are  necessary and  not at  the whim  and fancy of the public authorities  or under  their garb  or cloak  for  any extraneous consideration. It would depend upon the nature of the scheme  and  object  of  public  purpose  sought  to  be achieved. In  all cases  relevant criterion  should be  pre- determined by  specific rules  or regulations  and published for  the  public.  Therefore,  the  public  authorities  are required to  make necessary  specific regulations  or  valid guidelines to exercise their discretionary powers; otherwise the salutary  procedure would  be  by  public  auction.  The Division Bench,  therefore, has  rightly pointed out that in the  absence  of  such  statutory  regulations  exercise  of discretionary power  to allot  sites to private institutions or persons was not correct in law.      The Division  Bench has  doubted the  bona fides in the allotments in  question, as  expressly found in the judgment Since the  learned single  Judge had accepted the averments, but the  Division Bench  was not inclined to accept the same and doubted the bona fides of the actions of the authorities and resultant  allottees,  due  to  absence  of  any  strong material we  cannot lightly brush aside or disagree with the observations made  by the  learned Judges  of  the  Division Bench. Under  those circumstances,  we are incline to uphold the order  of the  Division Bench  subject to  the following further directions:      While accepting  the directions  given by  the Division Bench we  further add that the Committee would, as suggested by the Division Bench, in evaluating the property, determine the market  value of  the sites  allotted prevailing  as  on September 11,  1992 in the light of the directions issued in the light of the direction issued in the judgment, After the determination so  made, an option would be given only to the petitioners,  i.e.,   Ajay  Memorial   School,Ashok   Trehan Memorial Charitable  Trust and  Manav Mangal Society and Lt. Col. Y.P.  Mahindru, for  payment of  the  market  price  in lumpsum. In  the event of their accepting the offer the same shall be  laid before  the first  court of the High Court to obtain tile  approval thereof. The High Court, before giving approval, would  consider the  valuation and  other relevant material. The  HUDA also is directed to frame an appropriate scheme for  allotment of the sites under discretionary power or other  made otherwise  than by  public auction  and  then place the  scheme before  the first  court of the High Court and obtain  approval of  the validity and correctness of the scheme and  would thereafter  proceed with  the disposal  of properties  in   future.  As   far  as   allotment  to   the petitioners,  viz,   Ajay  Memorial   Schools  Ashok  Trehan Memorial Charitable  Trust and  Manav Mangal Society and Lt. Col. Y.P.  Mahindru, in  these special  leave  petitions  is concerned, the  same will be subject to the above directions and in  the event  of their  non-acceptance, the  properties should be  put to  public auction along with other sites and buildings. The plots allotted to the rest of the petitioners other than  those cases  where notices  were issued, will be subject to  the directions issued by the Division Bench. The other unallotted  plots also should be put to public auction as ordered by the Division Bench.      The Special Leave Petitions are accordingly ordered.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7  

SLP Nos 12720-23 of 1996      Issue notice  returnable within four weeks. In addition dasti service  also is  permitted. In  respect of  the  plot covered in  these petitions,  it would  be subject to orders after service of notice.