IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4678 OF 2008 (Arising out of S.L.P. (C) No.14795 of 2006)

Raja Shri Shivrai Pratishthan     ...Appellant(s)

Versus

State of Maharashtra and Ors.     ...Respondent(s)

W I T H

Civil Appeal No.4679 of 2008  (Arising out of S.L.P. (C) No.16804 of 2006)

O  R  D  E  R

Heard learned counsel appearing on behalf of the parties.

Leave granted.

These appeals are directed against order of the Division Bench of Bombay

High  Court  which  dismissed  the  writ  petitions  filed  by  the  appellants,  Raja  Shri

Shivrai  Pratishthan,  Pune  and  Siddhai  Mahila  Mandal,  Kolhapur,  questioning

government resolution dated April 20, 2002 whereby names of the appellants were

excluded from the list of institutions selected for running Vruddhashrams on non-

grant-aid basis.

The appellants are non-government organizations.  In furtherance of the

policy  decision  taken  by  the  Government  of  Maharashtra  to  establish  homes  for

senior  citizens  under  the  Matoshree   Vruddhashram   Scheme  (for  short  ‘the

Scheme’), the

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appellants established old age homes at Pune and Kolhapur respectively. In 1995, the

State  Government  framed  rules  for  providing  grant-in-aid  to  recognized

Vruddhashrams.  The same were circulated vide Resolution  dated 17th November,

1995. The Vruddhashrams established by the appellants were among the institutions

selected for grant-in-aid.  After six years, the State Government reviewed its decision

and  issued  Resolution  dated  3rd December,  2001  for  conducting  Vruddhashrams

through private voluntary institutions on permanent non-grant-aid basis.  Para 2 of

the resolution envisaged the issue of an advertisement by Director, Social Welfare for

inviting  proposals  for  conducting  Vruddhashrams  on  non-grant-aid  basis  with  a

stipulation  that  all  recognized  Vruddhashrams  will  be  entitled  to  apply  and  the

institutions whose work was to be found satisfactory and who agreed to be abide by

the  terms and  conditions  enumerated  in  the  government  resolution  will  be  given

preference.

In  response  to  the  advertisement  issued  by  Director,  Social  Welfare,

Maharashtra,  the  appellants  submitted  applications  along  with  the  required

information  and  documents.   Likewise,  the  private  respondents  submitted

applications for being selected for running Vruddhashrams.  Vide Resolution dated

20th April,  2002,  the  government  notified  the  listing  of  institutions  selected  for

conducting Vruddhashrams on non-grant-aid basis.  The names of the appellants did

not figure in that list.  Instead, the private respondents were shown as the institutions

selected for running Vruddhashrams at Pune and Kolhapur respectively.

The appellants challenged resolution dated 20th April, 2002 by contending

that their non-selection for running Vruddhashrams on non-grant-aid basis is wholly

arbitrary, capricious  and  violative of Article 14 of the Constitution.

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Another plea taken by the appellants was that before rejecting their applications, the

concerned authorities did not afford them opportunity of hearing and, therefore, the

impugned action is liable to be declared as vitiated due to violation of rules of natural

justice.   

In the counter affidavit filed in Writ Petition No.3091 of 2002, Shri N.N.

Bhadikar,  Deputy  Secretary  to  the  Government,  Social  Welfare  Department,

Government of Maharashtra, stated that at the time of inspection of Vruddhashrams

by the Director of Social Welfare on 21.11.2000, it was revealed that a number of

Vruddhashrams were not running as per the norms laid down by the Government

and in the light of his report, it was decided to implement the Scheme through non-

government organizations on permanent non-grant-aid basis.  However, he did not

controvert the assertion made in the writ petition that the Vruddhashram established

by  the  appellant,  Raja  Shri  Shivraya  Pratishthan,  Pune  was  being  conducted

satisfactorily and that there was no deficiency which could justify denial of the benefit

of  para  2  of  resolution  dated  3rd December,  2001.   In  the  writ  petition  filed  by

appellant, Siddhai Mahila Mandal, Kolhapur, neither any counter affidavit was filed

nor  any  material  was  placed  before  the  High  Court  to  show that  there  was  any

deficiency in the running of Vruddhashrams.   

By the impugned order, the High Court dismissed the writ  petitions by

observing that the allotment of Vruddhashrams on grant-in-aid basis did not create

any vested right in favour of the appellants and that the appellants cannot complain

against the revised policy decision or claim that they should have been heard before

rejection of their applications.

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Shri V.A. Bobde, learned senior counsel appearing for Raja Shri Shivrai

Pratishthan  extensively  referred  to  the  pleadings  of  the  special  leave  petitions,

documents filed by the parties to show that Vruddhashram established by his client is

being conducted satisfactorily and that there has been no complaint from any inmates

about  any  deficiency  of  service.   He  also  also  referred  to  the  inspection  reports

prepared by the departmental authorities to show that the Vruddhashram is being

conducted as per norms and satisfactorily.  He pointed out that despite non exclusion

of  the  appellant’s  name  in  the  list  of  the  institutions  selected  for  conducting

Vruddhashrams  on  non-grant-aid  basis,  his  client  has  been  running  the

Vruddhashram at  Pune  to  the  full  satisfaction  of  the  inmates.   Both  the  learned

counsel argued that in the absence of any adversity in the running of Vruddhashrams

by  their  clients,  the  government’s  decision  not  to  select  them  for  conducting

Vruddhashrams on non-grant-aid basis should be declared arbitrary and violative of

the doctrine of equality.

Shri  V.N.  Raghupathy,  counsel  appearing  for  the  Government  of

Maharashtra could not draw our attention to any document or other evidence from

which it can be inferred that the appellants have been conducting Vruddhashrams in

violation of the norms laid down by the government or that their performance was/is

unsatisfactory.  Learned counsel also could not show as to why the appellants were

not given benefit  of para 2 of  resolution dated 3rd December, 2001.  He, however,

reiterated that non selection of the appellants for conducting Vruddhashrams on non-

grant-aid  basis  was  as  per  the  policy  decision  taken  by  the  government  and  the

institutions which were found suitable were selected by the competent authority.

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We  have  considered  the  respective  submissions  and  scrutinized  the

records.  Since the respondents have failed to produce any tangible evidence to prima

facie  establish  that  conducting  of  Vruddhashrams  by  the  appellants  was

unsatisfactory and that there was some valid reason for denying them the benefit of

preference clause embodied in resolution dated 3rd December, 2001, it must be held

that  their  non  selection  is  wholly  arbitrary  and  violative  of  Article  14  of  the

Constitution.   It  is  true  that  one  time  selection  of  the  appellants  for  conducting

Vruddhashrams under the Scheme on grant-in-aid basis  did not create any vested

right  in  their  favour  but  there  can  be  no  gainsaying  that  in  terms of  the  policy

decision taken by the government, they were entitled to preferential treatment in the

matter of selection for conducting Vruddhashrams on non-grant-aid basis. Once the

government  laid  down  the  policy  for  selection,  the  same  was  binding  on  all  its

functionaries  including  the  Director,  Social  Welfare  and  the  applications  of  the

appellants could not have been indirectly rejected without any rhyme or reason.   

So far as the case of Siddhai Mahila Mandal, Kolhapur, is concerned, there

is no report by any officer indicating that the functioning of this institution was not

satisfactory.  Even in the counter affidavit  filed before this Court, it  has not been

stated that the work of appellant was unsatisfactory.  In this view of matter it is not

possible for us to accept the justifications for overlooking the claim of the appellant

and  it  must  be  held  that  non  selection  of  the  appellant  is  arbitrary  and  wholly

unjustified.

Ordinarily, we would have remitted the matter to the State  Government

for  re-considering  the  matter afresh in

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accordance with law but, in our view, the facts of the case are so telling that it would

not be advisable to remit the matter to the State Government.  Rather it is a fit case in

which direction deserves to be given to the State Government to include the names of

the appellants in the list of institutions selected for conducting Vruddhashrams on

non-grant-aid basis.      

Accordingly, the appeals are allowed, the impugned order is set aside. The

writ petitions filed by the appellants are allowed and the State of Maharashtra is

directed to include the names of the appellants in the list of institutions selected by

Government order dated 20th April, 2002, by making amendment therein.  This order

must be carried out within one month from today.

......................J.       [B.N. AGRAWAL]

......................J.       [G.S. SINGHVI]

New Delhi, July 28, 2008.