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PETITIONER: STATE OF U.P. & ORS.

       Vs.

RESPONDENT: MAHARAJA DHARMANDER PRASAD SINGH ETC.

DATE OF JUDGMENT17/01/1989

BENCH: VENKATACHALLIAH, M.N. (J) BENCH: VENKATACHALLIAH, M.N. (J) MISRA RANGNATH

CITATION:  1989 AIR  997            1989 SCR  (1) 176  1989 SCC  (2) 505        JT 1989 (1)   118  1989 SCALE  (1)106

ACT:     Uttar Pradesh Urban Planning and Development Act,  1973: Ss 14, 15, 37 & 41: Lucknow Development Authority-Permission for      development      of      land      by       private party--Cancellation/revocation of-Validity of.     Constitution  of  India,  Article  226:  Forfeiture  and cancellation  of  lease--Whether  can be  agitated  in  writ proceedings--Judicial review-Scope and nature of.       Transfer  of  Property  Act,  1882:  Ss.  108,  111  & 114A--Lessee-Nature of possession after expiry/forfeiture of lease-Forcible dispossession prohibited.

HEADNOTE:     Section 3 of the Uttar Pradesh Urban Planning and Devel- opment Act, 1973 provides for declaration of an area to be a ’development area’ by gazette notification. Section 14(1) of the  Act interdicts development of land in such an  area  by any person or body unless permission has been obtained  from the  Vice-Chairman  of the  Development  Authority.  Section 15(1)  requires every person or body desirous  of  obtaining permission to make an application in the manner  prescribed. Section 15(3) empowers the Vice-Chairman, after making  such an  enquiry as he considers necessary, either to  grant  the permission subject to such conditions as he may specify,  or refuse the permission. Section 15(5) provides for an  appeal to  the Chairman against an order made by the  Vice-Chairman refusing permission. Section 37 inter alia makes an order of the  Vice-Chairman  made under s. 15  final.  Section  41(1) makes  it  incumbent on the Authority (the Chairman  or  the Vice-Chairman) to carry out such directions as may be issued to  it  from time to time by the State  Government  for  the efficient administration of the Act. Section 41 (3)  confers revisional powers on the State Government.     The respondent-lessees applied to the appellant-Develop- ment  Authority under s. 15(1) of the Act for permission  to put  up  a multistoreyed building on the demised  plot.  The Vice-Chairman of the Authority sanctioned the permission  by his order dated January 31, 177 1985. However, on July 24, 1985 the State Government  issued directions purporting to be under s. 41(1) of the Act inter-

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dicting the progress of construction on ground of  violation of  the conditions of the lease. The High Court allowed  the writ  petition preferred by the respondents and quashed  the said directions.     Thereafter,  on  August 12, 1985  the  State  Government brought to the notice of the Vice-Chairman serious illegali- ties in the building sanction and indicated that the same he reviewed and revoked, to which he did not agree. Finally, by its  communication dated October 15, 1985 addressed  to  the Chairman of the Authority the State Government directed  him to  initiate immediate proceedings against  the  respondents for  making  misrepresentations, fraudulent  statements  and concealing material facts in obtaining building  permission. To  that  letter  was annexed a notice for  service  on  the lessees and the builder associated with construction to show cause for cancellation of the lease and demolition of  unau- thorised  construction. The respondents filed  their  objec- tions against the proposed cancellation, but the  Government by  its order dated November 19, 1985 found the  explanation unacceptable  and  proceeded to terminate  the  lease.  This order  was  challenged by the respondent-lessees in  a  writ petition before the High Court.     Subsequently,  the Vice-Chairman of the Authority  in  a separate  action issued notice dated January 9, 1986 to  the respondents to show cause why the building permission grant- ed on January 31, 1985 should not be cancelled.  Respondents objected to the proposed action but the Authority found  the objections  unacceptable  and proceeded by its  order  dated April  19,  1986 to cancel the permission. The  two  lessees challenged  this cancellation in writ petitions  before  the High Court.     The High Court found that the proceedings initiated  and the action taken by the Government and the Vice-Chairman  of the Authority in the matter, respectively, of forfeiture  of the  lease and the cancellation of the permission  to  build were both infirm in law and required to he quashed. It  took the  view that a reasonable opportunity of being  heard  had been denied to the lessee-respondents, and that the  grounds for  forfeiture of the lease were irrelevant  and  illusory; that  there was no provision in the Development Act  confer- ring  powers on the ViceChairman to review the  decision  in the matter of sanctioning a plan to build after the same was acted upon and constructions were being made only in accord- ance  with it; that s. 41(1) of the Act could authorise  the Vice-Chairman  to  review the earlier  permission  but  that there being no such directive from the Government the  Vice- Chairman acting as a 178 statutory  authority  had no power to revoke or  cancel  the permission  once granted, and that there was no casual  con- nection between the Government’s directive dated October IS, 1985,  which had confined itself to the cancellation of  the lease, and the proceedings initiated by the Vice-Chairman on January  9, 1986. It further found that as personal  hearing has  not been given to the petitioners the order  passed  by the Vice-Chairman violates the principles of natural justice and that the grounds alleged were not sufficient to  sustain the cancellation of the permission.     In  the appeals by special leave preferred by the  State Government  in  the matter of forfeiture of  lease,  it  was contended  for the appellants that the High Court fell  into an  error in allowing a matter, which should  properly  have been  the subject matter of a civil suit, to be agitated  in proceedings  under  Article  226 of  the  Constitution.  The submission was that the question whether there were breaches

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of  covenants on the part of the lessees involved  the  con- struction  of  the terms of the lease  deed  which  required evidence  on  the  matter and such a dispute  could  not  be resolved  on  mere  affidavits, and  that  the  relationship between  the  parties  being one of lessor  and  lessee  the dispute  between them pertained to a private law  situation. It was also submitted that no hearing could be  contemplated in the context for forfeiture of a lease of this nature. For the  respondents it was contended that the State, even as  a lessor,  could  not act arbitrarily either in the  grant  or premature  termination of the leases of public property  and disputes  arising in such context cannot always be  reckoned as  private  law  situations, and that at  all  events,  the threatened exercise of extra-judicial re-entry by the State, being violative both of the limitations of the powers of the State as lessor under the law of landlord and tenant and  or its  actions  as State, was a matter which  required  to  be mandated against.     In  the  appeals  by special leave  by  the  Development Authority  in  the matter or cancellation of  permission  to build,  it was contended for it that the order  dated  April 19,  1986 itself disclosed the extent or  opportunities  af- forded  to  the lessees and there could,  therefore,  be  no question  of failure or natural justice, that if  permission had  been  obtained by the lessees by  misrepresentation  or fraud  or, if after obtaining the permission there had  been violation  of the terms and conditions or the grant,  as  in the  instant  case,  the statutory  authority  granting  the permission  has itself the inherent and incidental and  sup- plemental  powers  to  revoke the permission,  and  that  no express grant of power in this behalf was necessary. For the respondents  it was contended that the proceedings for  can- cellation of the permission having been initiated at 179 the  instance of and compelled by the directions  issued  by the  Government purporting to act under s. 41(1) of the  Act there was a surrender of statutory discretion on the part of the  Vice-Chairman thereby vitiating the decision; that  the Vice-Chairman had no authority in law to cancel the  permis- sion,  that the power to cancel or revoke a licence or  per- mission,  even assuming_ that the statute enables such  can- cellation,  was  clearly distinguishable from the  power  of refusal  of an initial grant and that the exercise of  power of  cancellation which prejudicially affects  vested  fights partakes  predominantly  of quasi-judicial  complexion;  and that  as  there was denial of a  reasonable  opportunity  of being  heard the order passed by the Vice-Chairman  violates the principles of natural justice. Allowing appeals by the State,     HELD:  1. The question whether the purported  forfeiture and  cancellation of the lease were valid or not should  not have  been  allowed by the High Court to he  agitated  under Article 226 of the Constitution since it involved resolution of disputes on questions of fact as well. [191C]     Express  Newspapers v. Union of India, [1985]  Suppl.  3 SCR 382, referred to.     2.  A  lessor, with the best of title, has no  right  to resume  possession extra-judicially by use of force, from  a lessee, even after the expiry or earlier termination of  the lease by forfeiture or otherwise. The use of the  expression ’re-entry’  in the lease-deed does not authorise  extrajudi- cial methods to resume possession. Under law the  possession of  a lessee, even after the expiry or its earlier  termina- tion  is judicial possession and forcible  dispossession  is prohibited. He cannot, therefore, be dispossessed  otherwise

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than in due course of law. [191F-G]     In  the  instant case, the fact that the lessor  is  the State does not place it in any higher or better position. On the contrary, it is under an additional inhibition  stemming from  the  requirement that all actions  of  Government  and governmental authorities should have a ’legal pedigree’. The State  Government  is, accordingly, prohibited  from  taking possession otherwise than in accordance with law. [192C] Bishandas v. State of Punjab, [1962] 2 SCR 69, referred to. The  question of the legality and validity of the  purported cancella- 180 tion  of  the lease and the defence of the lessees  is  left open to be urged in appropriate legal proceedings,  whenever and  wherever  Government  proceeds to  initiate  action  in accordance with law for resumption of possession. [192D-E] Partly allowing the appeals by the Development Authority,     HELD: 1.1 The Vice-Chairman, for purposes of s. 15(3) of the  Act  is a distinct statutory authority  with  statutory powers of his own distinct from Development Authority, which under  s. 4(2) is a body corporate having perpetual  succes- sion and common seal. [197C-D]     1.2  An  order  made by him under s. 15(3)  of  the  Act granting  permission is not one of the orders  revisable  by Government  under s. 41(3). Such an order, under the  scheme of  the Act, is not also appealable but assumes  a  finality contemplated by s. 37. [197F-G]     1.3  The power of control of the State Government  under s.  41(1) consistent with the scheme of the Act,  cannot  be construed as a source of power to authorise any authority or functionary under the Act to do or carry out something which that  authority or functionary is not, otherwise,  competent to do or carrying under the Act. The section is not a  Super Henry  VIII  clause for the supply or source  of  additional provisions  and powers not already obtaining under the  Act. [198A-B]     2.1 The view of the High Court that in the absence of  a directive  or  authorisation from the  Government  under  s. 41(1),  the ViceChairman, acting as the statutory  authority dispensing permissions for development under the Act, cannot revoke or cancel a permission once granted is clearly  erro- neous. [198F]     2.2 The grant of permission is part of or incidental  to the  statutory power to regulate orderly development of  the ’development area’ under the Act under regulatory laws.  The power to regulate with the obligations and functions that go with  and  are incidental to it, are not pent  or  exhausted with the grant of permission. The power of regulation  which stretches beyond the mere grant of permission, takes  within its  sweep  the power, in appropriate cases,  to  revoke  or cancel  the permission as incidental or supplemental to  the power  to  grant. Otherwise, the planitude of the  power  to regulate would be whittled own or even frustrated. [198F-H] 2.3  The power to grant, where the grant is itself  vitiated by fraud 181 or misrepresentation on the part of the grantee at the  time of  obtaining  the grant, or where the  grantee,  after  the grant violates the essential terms and conditions subject to which grant is made, must therefore, be held to include  the power to revoke or cancel the permit, even in the absence of any  other express statutory provisions in that behalf.  The grounds  must,  of  course, be such as  would  justify  such drastic  action.  This cancellation is  a  preventive  step. There  may,  however, be cases of the third kind  where  the

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grant  may  be voidable at the instance of  the  Development Authority  or otherwise entitling the Development  Authority to  initiate appropriate declaratory or other action to  get rid of the effect of the permission. [199G -H; 200A-B]     2.4  It is erroneous to equate the powers under  ss.  14 and 15 of the Act with judicial power which, in the  absence of  express  provisions, could not enable the  review  of  a judicial order after its exercise on the principle of  func- tus officio. [198H; 199A]     Sardul Singh v. The District Food and Supplies  Control- ler,  Patiala  and O rs., W.P. No. 126 of  1962  decided  on December 19, 1962 referred to.     3.  The power of revocation or cancellation of the  per- mission is akin to and partakes of a quasi-judicial complex- ion.  In  exercising the power the authority must  bring  to bear  an unbiased mind, consider impartially the  objections raised by the aggrieved party and decide the matter consist- ent  with the principles of natural justice.  The  authority cannot permit its decision to be influenced by the direction of  others as this would amount to abdication and  surrender of  its  discretion. It would then not  be  the  authority’s discretion  that  is exercised, but someone  else’s.  If  an authority hands over its discretion to another body it  acts ultra vires. Such an interference by a person or body extra- neous  to the power would plainly be contrary to the  nature of the power. conferred upon the authority. [200B-D]     Judicial  Review  of Administrative Action  by  S.A.  de Smith referred to.     In the instant case, however, there was no such  surren- der  of discretion by the Authority. The directive from  the Government  dated August 12, 1985 had spent itself out  with the  then the Vice-Chairman declining to act  in  accordance with  it.  The  directive dated October  15,  1985  confined itself only to the cancellation of the lease and as inciden- tal thereto, required the stoppage of work pending  decision whether the lease should be cancelled or not. [201B-D] 182     4.1  It  not unoften happens that what appears to  be  a judicial review for breach of natural justice is, in  reali- ty, a review for abuse of discretion. [201H]     4.2 Judicial review under Article 226 cannot be convert- ed into an appeal. Judicial review is directed, not  against the  decision,  but is confined to the  examination  of  the decision-making process. [202B]     4.3 When the issue raised in judicial review is  whether a decision is vitiated by taking into account irrelevant, or neglecting  to take into account of relevant, factors or  is so  manifestly  unreasonable that no  reasonable  authority, entrusted  with the power in question could reasonably  have made  such a decision, the judicial review of  the  decision making  process includes examination as a matter of law,  of the  relevance of the factors. In the instant case,  it  is, however,  not necessary to go into the marits and  relevance of the grounds. [202F-H]     Chief  Constable  of the North Wales  Police  v.  Evans, [1982] 1 WLR 1155 referred to.     5.  There  has been a denial of natural justice  in  the proceedings  culminating in the order of  cancellation.  The show  cause  notice  itself is an  impalpable  congeries  of suspicions  and fears, of relevant or irrelevant matter  and has  included  some trivia. On a matter of  such  importance where the stakes are heavy for the lesses who claim to  have made large investments on the project and where a number  of grounds require the determination of factual matters of some complexity, the statutory authority should, in the facts  of

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the  case, have afforded a personal hearing to the  lessees. Both  the  show cause notice dated January 9, 1986  and  the subsequent order dated April 19, 1986 cannot, therefore,  be sustained. [203B-D]     It  is left open to the statutory authority,  should  it consider  it necessary, to issue a fresh show  cause  notice setting  out  the precise grounds, and afford  a  reasonable opportunity,  including an opportunity of  personal  hearing and of adducing evidence wherever necessary to the  respond- ent-lessees.  In view of this liberty, reserved to  the  au- thority,  the  finding  recorded by the High  Court  on  the merits of the grounds is set aside. [203D-E]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos.  165166 of 1989. From the Judgment and Order dated 8.12.1986 of the Allahabad 183 High Court in W.P. Nos. 6819 of 1985 and 367 of 1986. Civil Appeal Nos. 167 to 171 of 1989.     From  the  Judgment  and Order dated  8.12.1986  of  the Allahabad  High Court in W.P. Nos. 3463, 367 of 1986,  5521, 5699 and 6819 of 1985.     Yogeshwar Prasad, D.D. Thakur, Soli J. Sorabjee and S.N. Kacker,  Mrs. Shobha Dikshit, C.P. Lal, Umesh Chandra,  Kri- shan Chandra, R.K. Mehta, R.C. Verma, Dr. Roxma Swamy, Dilip Tandon,  Harish N. Salve, Rajiv Shakdher for  the  appearing parties. The Judgment of the Court was delivered by     VENKATACHALIAH, J. Special Leave Petitions (Civil)  4761 and  4762 of 1985 are by the State of Uttar Pradesh and  its officers  and  SLPs 13298 and 11498 of 1987 by  the  Lucknow Development  Authority,  (LDA for short)  a  statutory  body constituted  under  Sec.  4(1) of the  Uttar  Pradesh  Urban Planning  &  Development Act, 1973 (Act for short)  and  its Authorities. Seeking special leave to appeal from the common judgment  dated 8.12-1986 of the High Court  of  Judicature, Allahabad,  in Writ Petition Nos. 68 19 of 1985 and  367  of 1986  which  were heard and decided along with  three  other writ-petitions i.e. WP 5521 & 5699 of 1985 and 3463 of 1986.     Special  leave petitions 11515 of 1987 and SLP 11499  of 1987 are by the LDA and its Authorities directed against the said  common judgment dated 8.12.1986 in so far as  it  per- tains  respectively to W.P. 5699 of 1985 and 5521  of  1985. Special  leave petition 11220 of 1987 is by the LDA and  its Authorities  seeking leave to appeal from the Order in  W.P. 3463 of 1986.     2.  The Writ-petitions before the High Court  were  pre- ferred  by  the Respondent Lessees Sri D.P.  Singh  and  his mother Smt. Raj Lakshmi Devi, the heirs of Maharaja  Patesh- wari Prasad Singh in respect of Nazool land in Plot No.  10, Ashok Marg, Hasratganj, Lucknow, under deed dated  7.10.1961 commencing   from  15.11.1961  and  stated  to   expire   on 31.3.1991.  The  proceedings arose out of two  matters.  The first  pertained  to  the  legality  of  the  Notice   dated 19.11.1985 issued by the State Government in cancelling  the lease. The cancella- 184 tion  was challenged in two writ-petitions filed  separately by Sri D.P. Singh and Smt. Raj Lakshmi Devi in W.P. 6819  of 1985 and WP 367 of 1986 respectively. The High Court by  its common  order  dated 8.12.1986 allowing the said  two  writ- petitions  quashed the said cancellation. In SLPs  4761  and

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4762 of 1987 and in SLPs 13298 and 11498 of 1987 the Lucknow Development Authority have assailed this part of the  common order.     The  second  area of the controversy arises out  of  the order dated 19.4.1986 of the Vice-Chairman, Lucknow Develop- ment Authority, (LDA for short) cancelling the earlier order dated 31.1.1985 granting permission under Sec. 15 of the Act in  favour of the Respondent Lessees to develop  the  lease- hold property by effecting thereon a multi-storeyed building called  "Balarampur  Towers" comprising of flats  etc.  This cancellation was challenged by the two Lessees in the  joint writ-petition  No 3463 of 1986. The High Court allowed  this WritPetition  also and has quashed the impugned order  dated 19.4.1986  by which the permission to build earlier  granted was sought to be revoked. In SLP 11220 of 1987 the LDA seeks leave to appeal against this part of the order.     WPs 5699 of 1985 and 5521 of 1985 from which the LDA has preferred  SLP 11515 of 1987 and SLP 11499 of  1987  respec- tively do not relate to or bear upon the substantial  points of  controversy between the parties. They relate to  certain incidental  matters. Accordingly SLPs 11515 of 1987 and  SLP 11499  of  1987 would be governed by the order made  in  the main SLPs.     3.  Special  leave is granted in all the  petitions.  We have  heard Sri D.D. Thakur, learned Senior Counsel for  the LDA  and  its  authorities; Sri  Yogeshwar  Prasad,  learned senior counsel for the State of Uttar Pradesh and its  offi- cers and Sri Soli J. Sorabjee for the respondentLessees.     The  subject  matter  of the lease is stated  to  be  an extent  of about 9885 Sq. Metres of Nazool land,  which  was comprised  in the lease in favour of a certain Mr.  Edwards, granted  in  the year 1901 for a period of 30 years  in  the first-instance,  with  provision for renewal  for  two  more terms  of 30 years each. On 6.11.1936, there was  the  first renewal for 30 years effective from 1.4.1931 in favour of  a certain  Sri Syed Ali Zahir, a transferee from Mr.  Edwards. Sri Syed Ali Zaheer assigned his interest under the lease in favour of Maharaja Pateshwari Prasad Singh of Balrampur.  On 7.10.1961, there was a second renewal in 185 favour of the present respondents, as the heirs of the  said Maharaja Sri Pateshwari Prasad Singh.     4.  On 11.8.1981, Respondent-lessees,  in  collaboration with M/s Ambar Builders (P) Limited applied to the LDA under Sec.  15(1)  of the Act for permission to put  up  a  multi- storeyed  building on the demised property.  The  permission was  refused  on the ground, inter alia, that  the  proposed construction would bring about a change in the user  permit- ted under the lease. The lessees preferred an appeal  before the  Appellate  Authority who dismissed  their  appeal.  The RevisionPetition filed by the lessees before the  Government under  Sec.  41(1)  of the Act was partly  allowed  and  the Government  by  its  order dated  15.10.1984,  remitted  the matter  to  the appropriate authority under the  Act  for  a fresh  consideration. On 31.3.1984, during the  pendency  of the revision-petition respondents submitted a modified plan, styling  the  construction as  consisting  of  "residential- flats".  After  remand, the Nazool Officer is said  to  have given his "No objection Certificate" dated 2.12.1984 for the grant  of  permission. The power of attorney holder  of  re- spondents,  a certain Sri Pawan Kumar Aggarwai, filed  an  . affidavit dated 28.12.1984 before the appropriate  authority of  the  LDA in regard to their being  no  impediment  under Urban  Ceiling  Laws  and the manner in  which  the  Lessees propose to comply with any order that may eventually be made

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in  that behalf. Finally on 23.1.1985, the Vice-Chairman  of LDA sanctioned the permission. This was formally communicat- ed  to  the Respondents on 31.1.1985. The lessees  were  re- quired to, and did, deposit Rs. 53,440 with the LDA  towards what  was called ’Malba’ charges. This marked one  stage  of the proceedings.     5. The next stage of the matter opened on 24.7.1985 with the  issue  of directions from Government purporting  to  be under sec. 41(1) of the Act interdicting the progress of the construction as, in the view of the Government, the  lessees had  violated the conditions of the lease; that  the  matter would  require  further  examination and  that  any  further construction  in the meanwhile would create avoidable  hard- ship to themselves. In W.P. 3732 of 1985  Respondent-Lessees challenged this direction of the Government before the  High Court,  which allowed the petition and quashed those  direc- tions.     Thereafter, on 12.8.1985, the Government brought to  the notice of the then Vice-Chairman of the LDA what,  according to Government, were serious illegalities in the sanction  of the  permission dated 31.1.1985 and indicated to  the  Vice- Chairman that sanction earlier 186 granted  on  31.1.1985 be reviewed and  revoked.  The  Vice- Chairman,  however,  did  not appear to share  the  view  of Government either as to the existence of any legal  infirmi- ties  in the grant of permission or as to  the  availability and the justifiability of review of the permission suggested by  Government. The disinclination of the  Vice-Chairman  in this  behalf  was communicated to the Government  by  letter dated  12.9.1985. This marked yet another stage of the  pro- ceedings.     6.  The State Government, apparently, was in no mood  to relent.   By  communication  No.   5062-37-37-3-1985   dated 15.10.1985 Shri Kamal Pandey, the then Secretary to  Govern- ment of Uttar Pradesh, wrote to the Chairman, LDA  recapitu- lating  therein  the previous proceedings in the  matter  of grant of permission for the "BalrampurTowers" on the  lease- land  and  enumerating what, according to  Government,  were serious infirmities in, and illegalities resulting from, the permission and as to how the construction violated the terms and conditions of the lease and directed the Chairman,  LDA, to  initiate immediate proceedings as directed in  the  said communication.  To  that letter was  annexed,  a  show-cause notice which the Chairman was asked to serve on the  Lessees and  the  Builders associated with the construction.  It  is necessary to excerpt some portion of that communication.               "It  has come to the notice of the Govt.  that               in obtaining the said permission the following               illegalities, irregularities, material misrep-               resentation,  fraudulent statements,  conceal-               ments  of material facts etc. appear  to  have               been committed."     Referring  to  the  various  alleged  illegalities,  and breaches  of covenants and of violations of law  which,  ac- cording  to Government, vitiated the grant of permission  to build  and also render the lease liable to  forfeiture.  The communication proceeded to direct the Chairman.                        "Therefore,  the Governor is  pleased               to direct you to serve the enclosed show cause               notice in the Maharani, Sri Singh and Builders               and obtain their explanation within three days               of  the  service of the notice, give  them  an               opportunity  of heating on the fourth day  and               submit your comments on the explanation  along

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             with your recommendations in the light of  the               above mentioned circumstances along with  your               report fixing the responsibility on the  Vice-               Chairman of the Lucknow Development  Authority               and               187               Officers/Officials  of the Nazul and  building               section latest by 28th October, 1985."     The  relevant portions of the show cause notice  annexed to the said letter and intended to be, and was later, served on the respondents-Lessees said:               "Therefore,  in compliance with  the  instruc-               tions  of the Govt. Maharani Raj Laxmi  Kumari               Devi  Sahiba  and  Sri Singh  and  M/s  Arebar               Builders  (P) Ltd. are hereby given  the  show               cause notice and an opportunity of hearing and               they are required to explain within three days               of  the receipt of this notice as to  why  the               Nazul  lease  granted in their favour  be  not               cancelled and the unauthorised construction be               not demolished for breach of the lease  condi-               tions and violation of the provisions of Urban               Land and Ceiling Act and for making fraudulent               statement and misrepresentation in respect  of               the  land  use in Lucknow Master Plan  and  on               account  of  continuing constructions  on  the               basis  of fraudulently obtained building  per-               mission."                         "If  the desired explanation is  not               received  within three days of the service  of               this  notice  by the undersigned, it  will  be               presumed  that  they have nothing  to  say  in               their  defence and thereafter action for  can-               cellation  of nazul lease and building  permit               and the removal of the unauthorised  construc-               tions will be taken along with their  prosecu-               tion for fraudulent statement and misrepresen-               tation as contained in the affidavit."     8. The respondents filed their objections and  represen- tations  against the proposed cancellation. But  Government, by  its order No. 5496/37-3/85 dated 19.11.1985,  found  the explanation  unacceptable to it and proceeded  to  terminate the  lease. The operative part of the  "notice"  terminating the lease reads:                         "Now  therefore  on account  of  the               aforesaid  breach of the lease conditions  the               Governor  of  U.P. does hereby  terminate  the               lease.  You are required to hand over  posses-               sion of the land and building standing thereon               to  Collector, Lucknow, within 30 days of  the               receipt  of this notice otherwise  action  for               eviction  will  be taken against you  at  your               cost." 188     This  order  was, as stated earlier, challenged  by  the respondentlessees  in  WP No. 3463 of 1986 before  the  High Court.     9.  So  far  as the permission for  development  of  the property  earlier granted on 31.1.1985 was concerned,  sepa- rate  action was taken by the Vice-Chairman of the  LDA  who issued the notice dated 9.1.1986 to the respondents  requir- ing  them  to show-cause why the permission  should  not  be cancelled. Respondents objected to the proposed action;  but the  Vice  Chairman found the  objections  unacceptable  and proceeded,  by his order No. 363/VC/RBO/86 dated  19.4.1986,

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to cancel the permission. The  operative  portion of the said  order  dated  19.4.1985 reads:                         "From the above it is clear that the               above irregularities, material mis-representa-               tion  and fradulent statements have been  made               along  with  the building map-plan  and  other               documents  submitted by Sri D.P. Singh and  he               has deliberately concealed material facts  and               mislead the Authority. Therefore, the  permis-               sion  dated 31.1.1985 granted to him is  being               cancelled."     The two Lessees challenged this cancellation before  the High  Court in two separate writ petitions filed by each  of them in WP 68 19 of 1985 and WP 367 of 1986 respectively.     10.  The High Court was persuaded to the view  that  the proceedings initiated and the action taken by the Government and the Vice-Chairman of the LDA in the matter,  respective- ly,  of forfeiture of the lease and the cancellation of  the permission to build were both infirm in law and required, to be quashed. Accordingly, writ petitions 6819 of 1985 and  WP 367  of 1986 were allowed and the order dated 19.11.1985  of the Government purporting to cancel the lease was quashed.     Likewise,  WP 3463 of 1986 filed jointly by the  Lessees was allowed and the show cause notice dated 9.1.1986 as well as the order dated 19.4.1986 of the Vice-Chairman cancelling the permission were quashed.     11.  We may first take up the appeals of the State  Gov- ernment and of the LDA assailing the order of the High Court quashing the cancellation of the lease. Sri Yogeshwar Prasad for the appellants 189 submitted that the High Court fell into an error in allowing a matter, which should properly have been the subject-matter of a civil-suit, to be agitated in proceedings under Article 226 of the Constitution. Learned counsel submitted that  the relationship  between the parties was one of the Lessor  and Lessee;  the dispute between them pertained to the  question whether  there  were  breaches and  non-performance  of  the covenants and conditions of the lease justifying the forfei- ture  of the lease, and that these matters, pertained  to  a private law situation and were not appropriately matters for enforcement of public law remedies. Learned Counsel  further submitted  that the question whether there were breaches  of covenants  on the part of the lessee involved the  construc- tion of the terms of the lease-deed and required evidence on the matter. Disputes of this nature, learned counsel submit- ted, could not be resolved on mere affidavits. Thirdly,  Sri Yogeshwar Prasad submitted that on the merits of the conten- tions,  the High Court should have noticed that even on  the facts admitted, there were clear violations of the covenants and conditions of the lease. Learned counsel also  submitted that the view of the High Court that a reasonable opportuni- ty  of  being heard had been denied to the  respondents  was erroneous  and  that,  at all events, no  hearing  could  be contemplated  in  the context for forfeiture of a  lease  of this nature.     Sri  Sorabjee  for the respondents  contended  that  the State, even as a lessor, could not act arbitrarily either in the  grant or premature termination of the leases of  public property and disputes arising in such contexts cannot always be  reckoned  as  private law situations and  that,  at  all events,  the threatened exercise of extra-judicial  re-entry by the State, being violative both of the limitations of the powers of the State as lessor under the law of landlord  and

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tenant  and of its actions as State, is a matter  which  re- quires to be mandated against.     12. The show-cause notice preceding the cancellation  of the  lease and the decision dated 19.11.1985 to  cancel  the lease,  refer  to and rely upon 10 grounds. Grounds 1  to  7 pertain to what the Government consider to be violations and breaches  of  the terms and conditions of  the  lease.  They pertain  to  an alleged change of user,  to  subletting  and sub-division  of  the leasehold property.  The  grounds.also refer to the alleged non disclosure of the terms and  condi- tions  of the Memorandum dated 7.7.1984 between the  Lessees on the one hand and Messrs Amar Builders Private Limited  on the  other.  The grounds for forfeiture also  refer  to  the likelihood of fraud being practised on the prospective  pur- chasers  of  the fiats as to the nature and  extent  of  the lessees’ subsisting interest under the lease and the limita- tions thereon. 190     We do not propose to go into the merits of these grounds and  their sufficiency in law to support the purported  for- feiture as, in our view, this exercise, having regard to the disputed questions of fact that are required to be gone into in that behalf, are extraneous to proceedings under  Article 226 of the Constitution.     13.  In regard to the merits of the grounds for  forfei- ture of the lease, the High Court after an elaborate discus- sion of the relevance and tenability of each of the grounds, the learned judge held:                         "From the comments made by me on the               above nine grounds it would be seen that  some               of  the grounds are irrelevant or illusory  or               based on irrelevant material or on  non-exist-               ent facts and some require serious  considera-               tion  which  has not been given. It  has  also               been seen that while under the lease-deed  the               right of re-entry could be exercised only  for               a breach of the term of the lease in presenti,               the  lease has been cancelled for a breach  in               future.  In  this view of the matter  the  im-               pugned order of the State Government cannot be               sustained."     Shri Yogeshwar Prasad says that this exercise Was extra- neous  to  a proceeding under Article 226  as  the  question whether the construction with 39 flats would be one unit  or multiplicity  of units; whether if third party  rights  were created  by  the transfer, or use, of the flat,  that  would amount to sub-letting or assignment; or would, in any  other way,  violate the terms and conditions of the lease and  the like, would not be matters that admit of being satisfactori- ly  resolved on mere affidavits. Learned  counsel  submitted that even according to the learned judges there were serious questions to be examined.     14.  On a consideration of the matter, we think, in  the facts and circumstances of this case, the High Court  should have  abstained  from  the examination of  the  legality  or correctness  of  the purported cancellation’  of  the  lease which  involved resolution of disputes on questions of  fact as  well. In Express News Papers v. Union of  India,  [1985] Supp.  3 SCR 382 Venkataramiah, J. in a  somewhat  analogous situation observed:                         "The  rest of the  questions  relate               truly  to  the  civil rights  of  the  parties               flowing  from the lease deed. Those  questions               cannot  be  effectively disposed  of  in  this               petition under Article 32 of the Constitution.

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             The  questions arising out of the lease,  such               as,  whether  there  has been  breach  of  the               convenants               191               under  the  lease, whether the  lease  can  be               forfeited,  whether relief against  forfeiture               can  be granted etc. are foreign to the  scope               of Article 32 of the Constitution. They cannot               be  decided  just  on  affidavits.  These  are               matters  which  should be tried in  a  regular               civil proceeding. One should remember that the               property belongs to the Union of India and the               rights  in it cannot be bartered away  in  ac-               cordance with the sweet will of an Officer  or               a  Minister or a Lt. Governor but they  should               be  dealt with in accordance with law. At  the               same time a person who has acquired rights  in               such property cannot also be deprived of  them               except  in accordance with law. The stakes  in               this  case are very high for both the  parties               and neither of them can take law into his  own               hands."     Accordingly,  we  hold  that the  question  whether  the purported  forfeiture  and cancellation of  the  lease  were valid or not should not have been allowed to be agitated  in proceedings under Article 226.     15.  Sri  Sorabjee  submitted that  great  hardship  and injustice  would  be occasioned to the  respondents  if  the State  Government,  on the  self-assumed  and  self-assessed validity  of  its own action of cancellation of  the  lease, attempts  at  and succeeds in, a  resumption  of  possession extra-judicially by physical force. Sri Sorabjee referred to the notice dated 19.11.1985 in which the Government, accord- ing  to  Sri Sorabjee, had left no-one in doubt  as  to  its intentions  of resorting to an extra-judicial resumption  of possession. Sri Sorabjee referred to paras 3.10 and 4 of the order dated 19.11.1985.     A lessor, with the best of title, has no right to resume possession extra-judicially by use of force, from a  lessee, even after the expiry or earlier termination of the lease by forfeiture  or  otherwise. The use of  the  expression  ’re- entry’  in the lease-deed does not  authorise  extrajudicial methods to resume possession. Under law, the possession of a lessee, even after the expiry or its earlier termination  is juridical posSessiOn and forcible dispossession is prohibit- ed;  a lessee cannot be dispossessed otherwise than  in  due course of law. In the present case, the fact that the lessor is  the  State  does not place it in any  higher  or  better position. On the contrary, it is under an additional inhibi- tion  stemming  from  the requirement that  all  actions  of Government and Governmental authorities should have a ’legal pedigree’. In Bishandas v. State of Punjab, [1962] 2 SCR  69 this Court said:                         "We   must,  therefore,  repel   the               argument  based  on the  contention  that  the               petitioners were trespassers and               192               could  be removed by an executive  order.  The               argument  is  not  only  specious  but  highly               dangerous  by reason of its  implications  and               impact on law and order."                        "Before  we part with this  case,  we               feel  it  our duty to say that  the  executive               action taken in this case by the State and its               officers is destructive of the basic principle

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             of the rule of law."     Therefore,  there is no question in the present case  of the  Government  thinking  of  appropriating  to  itself  an extra-judicial right of re-entry. Possession can be  resumed by  Government  only in a manner known to or  recognised  by law.  It cannot resume possession otherwise than in  accord- ance  with law. Government is, accordingly, prohibited  from taking possession otherwise than in due course of law.     In the result, the appeals of the State of Utter Pradesh (SLPs 4761 and 4762 of 1987) and of the LDA (SLPs 13298  and 11498  of 1987) directed against the common  Judgment  dated 8.12.1985 in so far as it pertains to WP 6819 of 1985 and WP 357 of 1986 are allowed and the said two writ petitions  are dismissed, leaving the question of the legality and validity of  the purported cancellation of the lease and the  defence of  the lessees open to be urged in appropriate  legal  pro- ceedings,  whenever  and  wherever  Government  proceeds  to initiate  action  in accordance with law for  resumption  of possession  on  the  basis of the  alleged  cancellation  or forfeiture of the lease. Any developmental work that may  be made  by the lessees or at their instance would, of  course, be  at their own risk and shall be subject to the result  of such proceedings.     17. We may now turn to the controversy of the  cancella- tion or revocation dated 19.4.1986 of the permission earlier granted under section 15 of the "Act", which was the subject matter  of  writ  petition No. 3463 of 1986.  The  order  of revocation  was passed by the successor Vice-Chairman,  Shri Govindan  Nair, IAS. The earlier permission was  granted  by the then Vice-Chairman, Shri Babu Ram.     A show cause notice dated 9.1.1986 preceding the cancel- lation  was  issued  by Vice-Chairman,  Shri  Govindan  Nair himself.  The order dated 19.4.1986 revoking the  permission was challenged before the High Court on four grounds,  viz., (a)  that the lessees had had no reasonable  opportunity  of showing  cause  against the action proposed  in  the  notice dated.  9.1.1986 and that an opportunity of an oral  hearing had 193 been  denied; (b) that the Vice-Chairman, under  the  provi- sions  of  the  Act had no authority or power  to  revoke  a permission  once granted; (c) that, at all events, the  les- sees having incurred enormous expenditure on the development work, and having, on the strength of the permission  granted earlier  on 31.1.1985, altered their position  substantially to  their disadvantage, the Vice-Chairman was estopped  from revoking  the permission on principles of promissory  estop- pel;  and (d) that the grounds on which cancellation  rested were  themselves irrelevant and insufficient in law to  sup- port  the cancellation. The High Court accepted  grounds  at (a),  (b) and (d). It did not find it necessary to  go  into ground (c) in regard to which the High Court observed:                         "The petitioners also contended that               the  ViceChairman of Lucknow  Development  Au-               thority  was  estopped  from  cancelling   the               sanction  to build, more so when it was  acted               upon  .......................  In the  instant               case  this  question  need not  be  gone  into               detail  inasmuch  as  sanction  to  build  was               sought  to be cancelled on the ground of  sup-               pression of material facts, fraud and  misrep-               resentation etc."     In  regard  to the Lessees’, grievance at (a)  supra  of denial of natural justice, the High Court said:               "He  even  did  not give  any  opportunity  of

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             hearing to the petitioner on the said question               and passed an order some 2 1/2 months thereaf-               ter without even touching the objection of the               petitioner regarding the competence and juris-               diction  of the Vice-Chairman. Some new  facts               which found place in para 3 of the show  cause               notice  also  found place in  the  order.  The               Vice-Chairman  did not make any  enquiry  into               those  facts including construction  of  three               buildings  in the city itself and as  such  it               became  still  more necessary on him  to  give               atleast a personal hearing to the  petitioner.               As hearing has not been given to the petition-               er  although  there was enough  time  for  the               same,  the  order passed by  the  ViceChairman               violates the principles of natural justice and               cannot be sustained.     On  the  contention (b), the High Court  held  that  the ViceChairman  had no power to review the earlier order.  The High Court was of the view--and this is exactly the opposite of Sri Sorabjee’s contention before us--that the Vice-Chair- man could derive power to 194 review  only  if he had been empowered by  Government  by  a direction  under  section 41(1) of the Act. The  High  Court said:                        "It has not been pleaded by  opposite               parties  that on 9.1.1986 when the  new  Vice-               Chairman  took  over  charge or  on  any  date               thereafter  the  state Government  issued  any               direction  to  him  to issue  any  show  cause               notice  to the petitioners. There is no  other               provision  in the Development  Act  conferring               powers  on  the Vice-Chairman  to  review  the               decision  in the matter of sanctioning a  plan               to  build. In the absence of any provision  in               the  Act or any direction issued by the  State               Government, the ViceChairman had no  jurisdic-               tion  or authority to reconsider the  decision               granting  sanction  to a plan i.e.  permit  to               build  after the same was acted upon and  con-               structions were being made only in  accordance               with it."     As to ground (d), the High Court examined the merits  of each  of the grounds and, in substance, came to the  conclu- sion that the grounds were either irrelevant or,  otherwise, insufficient  in law to support the purported  cancellation. The High Court held:               "The  above discussion shows that even  though               fraud,  misrepresentation and  concealment  of               facts  etc.  on the part  of  the  petitioners               having not been made out, yet such conclusions               have  been arrived at. The matter  essentially               hinged  on the meaning and  interpretation  of               the word ’Building’ and instead of doing it in               the right and correct perspectives,  suspicion               ’and  presumptions have been made in  arriving               at the conclusions so arrived at."     19. Shri Thakur assailed the conclusions reached by  the High Court on all the three questions. Learned counsel urged that  the order dated 19.4.1986 itself discloses the  extent of  the  opportunities  afforded to the  Lessees  and  there could,  therefore,  be no question of  failure  of  natural. justice  in this case. As to the Vice-Chairman’s  power  to cancel or to revoke a permission earlier granted, Sri Thakur

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submitted  that if the permission had been obtained  by  the lessees by misrepresentation or fraud or, if after obtaining the  permission  there had been violation of the  terms  and conditions  of the grant, the statutory  authority  granting the  permission has itself the inherent and  incidental  and supplemental  powers to revoke the permission, and  that  no express  grant of power in this behalf was  necessary.  Shri Thakur submitted that the 195 grounds in this case related not only to fraud and misrepre- sentation  practised at the time of securing the  permission but also violation of the terms and conditions of the  grant itself.  He  further submitted that there  was  material  on record to show that the officers and the authorities of  the LDA concerned with the grant of the permission under section 15 had betrayed the trust reposed in them by the statute and were  disloyal  to  the Development Authority  and  on  that ground  also  the successor Vice-Chairman could  revoke  and rescind  the  sanction  so vitiated by  fraud.  Shri  Thakur relied upon Sec. 21 of General Clauses Act for the  exercise of the power to revoke.      20. Shri Sorabjee for the Lessees, however,  maintained that  the Vice-Chairman, having regard to the nature of  the allegations  on which the revocation is purported and  which fell  in the last category mentioned by Sri Thakur,  had  no authority in law to cancel the permission. He submitted that the view of the High Court as to the irrelevance and  insuf- ficiency  in law of the grounds on which the purported  can- cellation  was  based were effect as they  were  well  known administrative  law  tests of  administrative  or  statutory discretion,  and  that appeal to Section 21 of  the  General Clauses  Act to sustain the review was wholly inapposite  in this case. Sri Sorabjee submitted that the’ power to  cancel or.  revoke a licence or permission, even assuming that  the Statute enabled such cancellation, was clearly distinguisha- ble from a power of refusal of an initial grant and that the exercise  of  the power of cancellation  which  prejudically affects  vested rights partake predominently of  quasi-judi- cial  complexion and where, as here, such power is  resorted to at the behest of some-body extraneous to the power, there would  be an abdication and surrender of the statutory  dis- cretion  vitiating the decision. Sri Sorabjee said that  the ViceChairman,  even  granting that he had power  to  cancel, acted at the behest of the Government which purported to Act under  Section 41(1) issued directives on 12.8.1985  and  on 15.10.1985 overriding the discretion of the Vice-Chairman.       21.  To appreciate these contentions in  their  proper perspective it is necessary to notice the scheme of the  Act in relation to the Regulation of Development in the  "Devel- opment Area" under the Act. The preamble of the Act says:               "In the developing areas of the State of Uttar               Pradesh  the  problems of  town  planning  and               urban development need to be tackled resolute-               ly.  The existing local bodies and  other  au-               thorities in spite of their best efforts  have               not been able               196               to  cope  with these problems to  the  desired               extent. In order to bring about improvement in               this  situation, the State Government  consid-               ered  it  advisable that  in  such  developing               areas,  Development Authorities  patterned  on               the  Delhi  Development  Authority  be  estab-               lished.  As  the State Government was  of  the               view  that the urban development and  planning

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             work in the State had already been delayed  it               was felt necessary to provide for early estab-               lishment of such Authorities."     Sec. 2(b), (e) and (f) defines "building"  "Development" and "Development Area":                        "2(b) ’building’ includes any  struc-               ture  or  erection or part of a  structure  or               erection  which  is intended to  be  used  for               residential,  industrial, commercial or  other               purposes whether in actual use or not."                        "2(e)  ’development’, with its  gram-               matical variations, means the carrying out  of               building, engineering, mining or other  opera-               tions in, on over or under land, or the making               of  any  material change in  any  building  or               land, and includes re-development."                        "2(f)  ’development area’  means  any               area  declared  to be development  area  under               Section 3."               Section 3 provides:                        "Declaration of development areas: If               in  the  opinion of the State  Government  any               area within the State requires to be developed               according  to plan it may, by notification  in               the Gazette, declare the area to be a develop-               ment area."               Section 14(1) provides:                        Development of land in the  developed               area.--After  the declaration of any  area  as               development area under Section 3, no  develop-               ment  of land shall be undertaken  or  carried               out or continued in that area by any person or               body  (including a department  of  Government)               unless  permission  for such  development  has               been obtained in writing from the (Vice-Chair-               man) in accordance with the provisions of this               Act."               197               Section 15(1) provides:                        "Application  for   permission--Every               person  or body (other than any department  of               Government or any local authority) desiring to               obtain  the permission referred to in  Section               14 shah make an application in writing to  the               (ViceChairman)  in  such form  and  containing               such particulars in respect of the development               to  which  the application relates as  may  be               prescribed by (bye laws)."     Section 15(3) provides that on receipt of an application for  permission  for development, the  Vice-Chairman,  after making such enquiry as he considers necessary in relation to matters  specified  in Sec. 9(2)(d) or any other  matter  by order in writing either grant the permission subject to such conditions  as he may specify or refuse the permission.  The Vice-Chairman,  for purposes of Section 15(3) is a  distinct statutory  authority with statutory powers of his  own  dis- tinct  from the "Development Authority" which under  section 4(2)  is  a body corporate having perpetual  succession  and common seal.     Section 15(5) contemplates and enables an appeal to  the Chairman against an order made by the Vice-Chairman refusing permission.     Section  37,  inter alia, makes an order  of  the  Vice- Chairman made under Sec. 15 final.     22. Section 41(3) enables the State Government either on

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its  own  motion  or on an application made to  it  in  this behalf  to call for the records of any case disposed  of  or order  passed by the Authority or the Chairman for  purposes of satisfying itself as to its legality or propriety and may pass such orders or issue such directions in relation there- to as it may think fit. It is relevant to note that an order made by an Vice-Chairman under Sec. 15(3) of the Act  grant- ing permission is not one of the orders revisable by Govern- ment under section 41(3). Such an order, under the scheme of the  Act,  is  not also appealable but  assumes  a  finality contemplated by Sec. 37. 23. Sec. 41(1) of the Act provides:                         "Control  by  State  Government--The               (Authority, the Chairman or the Vice-Chairman)               shah  carry  out  such directions  as  may  be               issued to it from time to time by the State               198               Government for the efficient administration of               this Act."     This  power of the State Government consistent with  the scheme of the Act, cannot be construed as a source of  power to  authorise any authority or functionary under the Act  to do or carry out something which that authority or  function- ary is not, otherwise, competent to do or carryout under the Act. Section 41(1) is not a Super Henry VIII clause for  the supply  or  source of additional provisions and  powers  not already obtaining under the ’Act’.     Sri  Sorabjee for the Lessees says that the  proceedings for  cancellation  were  initiated at the  instance  of  and compelled  by  the  directives issued  by  Government  under Section  41(1) and that therefore there was a  surrender  of discretion  by the statutory Authority viz., the  ViceChair- man.  Here is a piquant situation. The High Court says  that section  41(1) could authorise the Vice-Chairman  to  review the  earlier permission but that there being no such  direc- tive,  the  Vice-Chairman had no power to review.  The  High Court  was in effect, held that the earlier directive  dated 15.10.1985 under Sec. 41(1) was limited to the  cancellation of the lease and for suspension of the building work in  the interrugnam  as incidental thereto and that the  show  cause notice dated 9.1.1986 for cancellation of the permission was not  pursuant to any directive under Sec. 41(1).  Thus,  the legal position which the High Court assumes as to the  scope of  Sec.  41(1)  is precisely what  Shri  Sorabjee  contends against.     22. It appears to us that view of the High Court that in the absence of a directive or authorisation from the Govern- ment  under Section 41(1), the Vice-Chairman, acting as  the statutory  authority dispensing permissions for  development under  the  Act, cannot revoke or cancel a  permission  once granted  is  clearly erroneous. In this case  the  grant  of permission  is part of or incidental to the statutory  power to  regulate orderly development of the  "Development  Area" under  the Act under Regulatory Laws. The power to  regulate with  the  obligations and functions that go  with  and  are incidental to it, are not spent or exhausted with the  grant of  permission.  The  power of  regulation  which  stretches beyond the mere grant of permission, takes within its  sweep the  power,  in appropriate cases, to revoke or  cancel  the permission  as  incidental or supplemental to the  power  to grant.  Otherwise  the planitude of the  power  to  regulate would be whittled down or even frustrated. It  is erroneous to equate the powers under sections 14  and 15 of 199

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the Act with Judicial power which, in the absence of express provisions, could not enable the review of a judicial  order after  its exercise on the principle of Functus-Officio.  In Sardul  Singh v. The District Food and Supplies  Controller, Patiala and Ors., in writ petition 126/ 1962 DD 19.12.1962 a statutory  order, promulgated under sec 3 of  the  Essential Commodities  Act, 1955, contained a provision  enabling  the cancellation of a ’permit’ under certain circumstances.  The contention was that section 3 of the parent ’Act’ itself did not  delegate  to the subordinate legislative  authority  to make  such a provision for cancellation and, therefore,  the provision  for cancellation in the  subordinate  legislature was ultra vires. There was no provision in the Act expressly conferring the power to make a provision for cancellation of the permit. Section 3(2)(d) of the parent Act merely enabled the  government to make orders "for Regulating by  licences, permits or otherwise, the storage, transport,  distribution, disposal,  acquisition, use or consumption of any  essential commodity" and Section 3(2)(j) merely enabled Government  to make orders for incidental and supplementary matters (empha- sis  supplied).  The question arose whether  provisions  for cancellation  of  the permits envisaged in para  10  of  the particular statutory order could be said to be relatable  to or  justified  as a matter incidental  or  supplementary  to Regulation. This Court held that the power to cancel was  an "incidental and supplementary" matter. It was held:                         "If a trade in an essential commodi-               ty like coal is to be regulated by licenses or               permits, it is obvious that the power to grant               licenses or permits must include the power  to               cancel or suspend such licenses or permits  as               an   "incidental  or  supplementary   matter";               otherwise, the very purpose of S. 3 of the Act               would be frustrated."      23. Indeed, the submissions of Sri Thakur on the  point contemplate  the exercise of the power to cancel  or  revoke the  permission in three distinct situations. The  first  is where the grant is itself vitiated by fraud or  misrepresen- tation  on the part of the grantee at the time of  obtaining the grant. To the second situation belong the class of cases where  the grantee, after the grant violates  the  essential terms and conditions subject to which the grant is made.  In these two areas, the power to grant must be held to  include the  power to revoke or cancel the permit, even in  the  ab- sence  of  any other express statutory  provisions  in  that behalf.  There  must, of course be the compliance  with  the requirements of natural justice and the grounds must be such as would justify such drastic action. This cancellation is a preventive step. The 200 one aspect of the remedial measures is set-out in Section 27 of the Act. There may be cases of third kind where the grant may be voidable at the instance of the Development Authority or otherwise entitling the Development Authority to initiate appropriate  declaratory or other action to get rid  of  the effect of the permission.     It  is  true that in exercise of powers of  revoking  or cancelling  the  permission  is akin to and  partakes  of  a quasi-judicial  complexion  and that in  exercising  of  the former  power the authority must bring to bear  an  unbiased mind,  consider  impartially the objections  raised  by  the aggrieved  party and decide the matter consistent  with  the principles  of natural justice. The authority cannot  permit its decision to be influenced by the dictation of others  as this would amount to abdication and surrender of its discre-

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tion.  It would then not be the Authority’s discretion  that is  exercised,  but someone else’s. If an  authority  "hands over  its discretion to another body it acts  ultra  vires". Such  an interference by a person or body extraneous to  the power  would plainly be contrary to the nature of the  power conferred upon the authority. De Smith sums up the  position thus:                        "The  relevant principles  formulated               by  the  courts may be broadly  summarised  as               follows.  The authority in which a  discretion               is  vested can be compelled to  exercise  that               discretion,  but  not to exercise  it  in  any               particular  manner. In general,  a  discretion               must  be  exercised only by the  authority  to               which  it  is committed. That  authority  must               genuinely address itself to the matter  before               it:  it  must not act under the  dictation  of               another body or disable itself from exercising               a  discretion in each individual case. In  the               purported  exercise of its discretion it  must               not  do what it has been forbidden to do,  nor               must it do what it has not been authorised  to               do.  It  must  act in good  faith,  must  have               regard to all relevant considerations and must               not  be swayed by  irrelevant  considerations,               must not seek to promote purposes alien to the               letter  or  to the spirit of  the  legislation               that  gives it power to act, and must not  act               arbitrarily  or  capriciously.  Nor  where   a               judgment must be made that certain facts exist               can  a discretion be validly exercised on  the               basis  of an erroneous assumption about  those               facts.  These several principles  can  conven-               iently  be  grouped in  two  main  categories:               failure  to exercise a discretion, and  excess               or  abuse  of  discretionary  power.  The  two               classes are not, however, mutually exclusive." 201     25.  But the question is whether the issue of  the  show cause  notice or the subsequent decision to cancel could  be said  to have been made at the behest or compulsion of  Gov- ernment.  Shri  Sorabjee refers to paragraphs 17 and  18  of Shri Kamal Pandey’s letter dated 15.10.1985. We are not sure that  this is a correct understanding of the  position.  The High  Court  did not see any casual connection  between  the Government’s directive dated 15.10.1985 and the  proceedings initiated  by the Vice-Chairman on 9.1.1986. The High  Court was  of the view that directive confined itself to the  can- cellation  of the lease and as incidental thereto,  required the  stoppage  of work pending decision  whether  the  lease should  be cancelled or not. This infact, was the basis  for holding  that  the  Vice-Chairman had no  power  to  cancel. Lessees  do  not rely upon any subsequent directive  to  the ViceChairman from the Government in the matter of revocation of  the  permission. The earlier directive  dated  12.8.1985 from  the Government to the Vice-Chairman spent  itself  out with  the then ViceChairman declining to act  in  accordance with  it.  There is no material to hold that  Sri  Govardhan Nair  felt himself bound by that directive.  Sri  Sorabjee’s contention  based  on  an alleged  surrender  of  discretion cannot, therefore, be upheld.     26.  It has, therefore, to be held that the  finding  of the  High Court that the Vice-Chairman had no competence  to initiate proceedings to revoke the permission on the  ground that the permission itself had been obtained by misrepresen-

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tation  and fraud and on the ground that there  were  viola- tions  of  the conditions of the grant, appear to us  to  be unsupportable. The contention of the Respondent-Lessees that the  show cause notice, dated 9.1.1986 and the  cancellation order,  dated  19.4.1986, are vitiated by a surrender  of  a discretion  on the part of the Vice-Chairman cannot also  be held  to  be well-founded. Sri Thakur’s  contention  to  the contrary on both these points would require to be accepted.     27. Now in the end, two more findings of the High  Court remain to be considered, viz., on the Lessees’ grievance  of denial  of  reasonable opportunity of being  heard  and  the validity  and sufficiency of the alleged grounds to  sustain the cancellation. We may consider the latter, first:     28.  It  not unoften happens that what appears to  be  a judicial review for breach of natural justice is, in  reali- ty,  a  review  for abuse of discretion.  It  is  true  that amongst  the  many grounds’ put forward in  the  show  cause notice dated 19.1.1986, quite a few overlap each other and 202 are distinguishable from those urged for the cancellation of the  lease  itself. Some of the grounds might,  perhaps,  be somewhat premature. Some of them even if true are so trivial that no authority could reasonably be expected to cancel the permission  on that basis. For instance the ground that  the permission  was applied for and granted in the name  of  one only of the two lessees would be one such.     However,  Judicial  review under Article 226  cannot  be converted  into an appeal. Judicial review is directed,  not against the decision, but is confined to the examination  of the decision making-process. In Chief Constable of the North Wales  Police  v.  Evans, [1982] 1 WLR 1155  refers  to  the merits-legality  distinction in judicial review. Lord  Hail- sham said:               "The purpose "of judicial review is to  ensure               that  the individual receives fair  treatment,               and  not to ensure that the  authority,  after               according fair treatment, reaches on a  matter               which  it is authorised by law to  decide  for               itself  a conclusion which is correct  in  the               eyes of the court." Lord Brightman observed:               "  .....  Judicial review, as the words imply,               is not an appeal from a decision, but a review               of  the  manner  in  which  the  decision  was               made  .....  " And held that it would be an error to think:               "  .....  that the court sits in judgment  not               only on the correctness of the decision-making               process  but  also on the correctness  of  the               decision itself."     When  the issue raised in judicial review is  whether  a decision  is vitiated by taking into account irrelevant,  or neglecting  to take into account of relevant, factors or  is so  manifestly  unreasonable that no  reasonable  authority, entrusted  with the power in question could reasonably  have made  such a decision, the judicial review of  the  decision making process includes examination, as a matter of law,  of the  relevance of the factors. In the present case,  it  is, however,  not necessary to go into the merits and  relevance of the grounds having regard to the view we propose to  take on the point on natural justice. It would, however, be appropriate for the statutory authori- ty, if 203 it  proposes  to  initiate action afresh,  to  classify  the

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grounds pointing out which grounds, in its opinion,  support the allegation of fraud or misre-presentation and which,  in its  view constitute subsequent violations of the terms  and conditions of the grant. The grounds must be specific so  as to  afford the Lessees an effective opportunity  of  showing cause.     29. On the point of denial of natural justice, we  agree with  conclusion of the High Court, though not for the  same reasons,  that there has been such a denial in the  proceed- ings  culminating  in the order of  cancellation.  The  show cause  notice itself an impalpable congeries  of  suspicions and fears, of relevant or irrelevant matter and has included some trivia. On a matter of such importance where the stakes are  heavy  for  the Lessees who claim to  have  made  large investments  on  the project and where a number  of  grounds require  the determination of factual matters of  some  com- plexity,  the  statutory authority should, in the  facts  of this case, have afforded a personal heating to the  lessees. We,  therefore, agree with the conclusion of the High  Court that  both  the  show cause notice dated  9-1.1986  and  the subsequent  order  dated  19.4-1986  would  require  to   be quashed, however, leaving it open to the statutory  authori- ty,  should it consider it necessary, to issue a fresh  show cause  notice setting out the precise grounds, and afford  a reasonable opportunity including an opportunity of  personal heating  and of adducing evidence wherever necessary to  the Respondent-Lessees- In view of this liberty, reserved to the authority, it is necessary to setaside the findings recorded by  the High Court on the merits of the grounds. The  appeal of  the  Lucknow Development Authority arising  out  of  SLP 11220  of 1987 is partly allowed and the order of  the  High Court in WP 3463l 1986 modified accordingly. Appeals arising out  of  SLPs  11515 of 1987 and 11499 of 1987  of  the  LDA directed against the common judgment of the High Court in so far  as  it relates to WP 5699 of 1985 and WP 5521  of  1985 also  disposed of in the light of the order is made  in  the appeals  arising  out of SLPs 4761, 4762, 13298,  11498  and 11220 of 1987.      30. In the circumstances, we leave the parties to  bear and pay their own costs. P.S.S.                          Appeals allowed partly. 204