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PETITIONER: ANGARKI CO-OPERATIVE HOUSING SOCIETY LTD.

       Vs.

RESPONDENT: STATE OF MAHARASHTRA & ORS.

DATE OF JUDGMENT:       31/12/1996

BENCH: KULDIP SINGH, S. SAGHIR AHMAD

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Kuldip Singh, j.      Special leave granted.      This appeal  is directed  against the  judgment of  the Bombay High  Court dated July 9, 1992 quashing the letter of intent date  August 31, 1988, the order of Collector, Bombay dated  September   3,  1988  and  the  consequent  order  of allotment of  land bearing  city survey  No. 211  of Malabar Hill division  to the  Angarki Cooperative  Housing  Society Limited (the Society)- the appellant before us.      The society  was allotted  land  admeasuring  3725  sq. mtrs. (Two  Plots) out  of survey  No. 211 of Malabar Hills, Bombay. The  land was applied for in June/July, 1986 and the letter of  intent for allotment was issued to the society in August, 1988.  In June  1989, Bal-Kalyani, a trust running a pre-primary school  in the  plot of land adjoining the plots allotted to  the society, filed writ petition in Bombay High Court (No.  1754/89), seeking  cancellation of the allotment alleging violation  of rules  and  also  mala  fide  in  the process of  allotment. Another  writ petition  (No. 2085/89) was  filed  by  Save  Bombay  Committee  on  July  21,  1989 challenging the  allotment  in  favour  of  the  society  on several grounds.  Both the  writ petitions were admitted for hearing in  November, 1988  and the construction on the plot concerned by the society , against the stay order granted by a learned  Single Judge,  were dismissed  in February, 1990. The special  leave petitions against the interim orders were dismissed by  this Court  in May,  1990. A Division Bench of the High  Court finally quashed the allotment of land to the society by  the judgment dated July 9, 1992. These appeal by the Society  are against  the judgment of the Division Bench of the High Court.      In order to appreciate various points dealt with by the High Court,  we may  notice some more facts. V. Ranganathan, Secretary (Relief  and Rehabilitation,  Revenue  and  Forest Department), Govt.  of Maharashtra, in his capacity as Chief Promoter of  the proposed  co-operative housing  society  of Government servants  addressed and  application dated.  July 25, 1986  to the  secretary, Revenue  and forest Department, Government. of  Maharashtra. He  simultaneously addressed an

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application  to   the  Collector  city  of  Bombay.  In  the application it was sated as under:-      "Whereas Members  of  the  proposed      co-operative Housing  Society would      like plot  of land  already applied      for, in  case there  is any problem      in giving  a favourable decision in      respect of  this land it would like      to suggest  that in the alternative      plot of  land  admeasuring  approx.      3000 sq.  mtrs. and forming part of      City survey No. 211 of Malabar Hill      Division  may   be  considered  for      allotment.  This   plot   of   land      belongs    to     Government     of      Maharashtra and  is a  part of City      Survey number  housing  Rocky  Hill      flats   of    the   Government   of      Maharashtra. We  are asking  for  a      small  part  of  the  land  in  one      corner of  this city  Survey Number      211. A  rough location  map of  the      land is enclosed."      The area  of land  demanded in the application was much more than  permissible - keeping in view the proposed number of members  of the society. The Collector addressed a letter dated. August 5, 1986 to Ranganathan asking him " to forward the names  of additional  members accordingly to enable this office  to   take  further  action  in  the  matter."    The Collector, Bombay addressed letter dated. August 19, 1986 to the Secretary,  Revenue and  Forest department,  Maharashtra wherein it was stated as under:-      "On  referring   to   this   office      records, it  is observed  that  the      property  C.S.No.  211  of  Malabar      Hill Division  admeasures  19261.02      sq. mtrs.  and is  Government land.      The procession  of this land, along      with the  bungalows existing on it,      is with the Executive Engineers PWD      Presidency      Division      since      17.7.1909.  It   is   situated   at      Banganga Road  and known  as  Rocky      Hill Estate. The buildings existing      thereon  ar  known  as  Rocky  Hill      Flats."      "Since and  the land in question is      in the  possession of the Executive      Engineer, PWD, Presidency Division,      feasibility of  making it available      for the  said society  is not known      to this  office,.  This  office  is      also  not   aware  of  the  present      position   regarding    F.S.I.   in      balance. Hence,  before considering      the request  of the  society, it is      necessary to  refer the  matter  to      the concerned departments for their      remarks. On  receipt of  Government      orders, the  matter will be further      dealt with."      The Collector addressed a letter dated. August 21, 1986 to Ranganathan seeking the following information:-      "You are requested to send two more      copies of  the  site  plan  of  the

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    above  land   showing  thereon  the      exact  portion   demanded  by  your      society in  red boundary  lines  to      enable this  office to  inform  the      Government  the  area  demanded  by      your society."      Joint Secretary  in the  Ministry of  Revenue &  Forest Department (where  Ranganathan was  Secretary)  Addressed  a letter dated. December 3, 1986 to Collector of Bombay asking him to supply the following information:-      "Secretary  (Revenue)   desires  to      have a  complete list  of the areas      of Government  and in  Malabar Hill      area  showing  the  land  which  is      under buildings  and  vacant  land.      The said list should be accompanied      by a  plan showing  the location of      each plot  and  the  areas  etc.  I      shall  be  grateful  if  you  would      please forward  the  list  and  the      plan  as   desired   by   secretary      Revenue immediately.      It is  obvious   form the  correspondence quoted  above that by  the letter  dated. July 25, 1986 Ranganathan sought allotment of  3000/- sq. mtrs. from C.S.No. 211 Malabar Hill division. the area asked for was larger than permissible and as such  the collector  advised Ranganathan  to increase the number of  member to  entitled  to  the  allotment  of  area admeasuring 3000/-  sq. mtrs. Ordinarily, and application of this type  may not  have even been entertained but since the applicant was  Secretary, Department  of Revenue,  Govt.  of Maharashtra, it  was keenly  processed.  The  correspondence further shows  that there  was no  plot in  existence in the said area,  even the land was not available because the same was in possession of the Public Works department (PWD) which under the rules of Business vested in the Government for the purposes of The state.      Under Secretary,  Urban Development  Department by  the letter dated  October 10,  1986 suggested that PWD  be asked as to how much area from C.S.No. 211 could be spared. A note dated October  20, 1986  on the file by the Under Secretary, shows that  the total area comprising C.S.. 211 Malabar Hill was proposed  to be used for the construction of residential quarter or  Class I  Officers and Ministers and further that the said  area could  not be  conveniently sub-divided.  The note thus clearly indicated that the area was not available. The matter  should  have  ordinarily  come  to  an  end  but Ranganathan persisted  and by  the letter  dated December 3, 1986 a complete list of Government land in Malabar Hill area was asked  for. Deputy  Secretary, Revenue  by the  note dt. July 3, 1987 suggested that pwd be asked to furnish plan for use of  the said  land in the next few years keeping in view the  availability   of  funds   with  the   government   for construction. The  record further  shows that on October 27, 1987 the  Secretary, PWD  finally agreed  to release part of the area to facilitate the allotment of the said area to the proposed society  of Ranganathan.  It was done on the ground that the funds were not, immediately, available to construct the Government  accommodation. The  matter remained in limbo for some  time and  finally on  July 18,  1988 the  file was submitted to  the Chief  Minister Through  minister of State (Revenue) and  minister,  Revenue.  The  Minister  of  State approved the  allotment on  July 30,  1988. The approval was given by the Minister concerned and by the Chief minister on August 31,  1988. Letter  of intent  was issued  on the same

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day.  The   Finance  Department   gave  its  concurrence  on September 28, 1988. The Government Resolution allotting land to the  society was  passed on  September 30, 1988. The plot was demarcated  and possession handed over to the society on October 3,  1988. Later  on, the  application of the society for change  of user to make part commercial user was granted on October 16. 1989.      The facts clearly show that there was no lay-out of the area. There is nothing on the record to show that a plot for allotment was  available. In  fact a plot was created out of government land  as a  special  case  and  allotted  to  the society. There  can be  no doubt that but for the status and the position  Ranganathan was  holding, it  could  not  have happened.  Ranganathan   was  personally  interested  i  the allotment of  plot for the society of which he was promoter. Ranganathan himself  was a  secretary in  the Department  of Revenue. The  Collector and  all  other  officers  were  his colleagues/subordinates. we  have no  hesitation in  holding that there  was patent  clash in  the interest and duties of Ranganathan.      It was  in the  above background  that the allotment of plot to the society was challenged before the Division Bench of the  High Court  on the  following grounds: (1) the  plot was not an isolated plot available for disposal/allotment in terms of Clause 11 of the Govt. Resolution dt. may 12, 1983: (2) the  prior consultation  with the  Finance Department as required under  Rule 11 (1) of the Rules of Business was not obtained: (3) the allotment was vitiated by mala fides; and (4) the allotment was bad for non-application of mind.      The first contention is primarily based on Clause 11 of the Govt. Resolution dated May 12, 1983. The said resolution is supplemental  to Rule  27 of the Land Disposal Rules. The said rule,  inter-alia, permits grant of building plots to a co-operative housing society. Clause 11 the resolution is as under:-      "The members  of public who come to      know  about   the  availability  of      Government land  for disposal apply      for  the   same   and   only   such      applications  are   considered  and      processed  and   in   the   result,      limited number  of persons who come      to know  about availability of land      from   Societies    and    approach      Government get  the benefit.  while      many deserving case are left out of      want of  knowledge  on  their  part      Government is,  therefore,  pleased      to direct that, except there one or      tow plot are available for disposal      in isolation,  in all  other cases,      particularly,   where   as   layout      prepared  in  accordance  with  the      local development control rules and      more  plots  become  available  for      disposal,  the   Collectors  should      issue press note in the local news-      papers  informing  the  members  of      public regarding  the  availability      of   such    plots    and    invite      applications  for   their  disposal      within period  to be  stipulated  i      such press  notes so  that  persons      interested can  form Societies  and

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    apply for grant of land within such      stipulated period.  The application      received  accordingly   should   be      scrutinised and  proposal should be      submitted  for   approval  of   the      Competent Authority."      The High  Court, on examination of the record including official files, came to the following conclusion:      " We  are clear in out mind that as      regards the  plot in  question,  no      case of  an isolated  plot could be      made  out   by   any   stretch   of      imagination.  We  may  also  stress      that it is not enough that there is      an isolated  plot; there must be an      isolated   plot    available    for      disposal."      The High Court finally rejected the first contention on the following reasoning:-      "We  have   been  searching  for  a      finding or a nothing about the plot      being   an    isolated   plot.   No      official,   high    or   low,   has      suggested or  stated that  the plot      is an  isolated plot,  NO  minister      has  applied   the  mind   to   the      question whether  the  plot  is  an      isolated one  or whether  there was      an  isolated   plot  available  for      disposal  and   as  a   consequence      thereof the  mandatory  requirement      of publicity  under the  Government      Resolution,  could   be   dispensed      with.      All indications  in the notings and      the files would counter a view that      it is  an isolated  plot. the views      expressed  by  the  PWD  Secretary,      would clearly  rule  out  that  the      area in  question   is an  isolated      plot.      A  necessity   for   an   extensive      demolition of  an  existing  school      and residential  quarters  for  six      employees, would  blast the case of      an isolated plot, as assumed in the      files. It  would be  the height  of      perversity to  carve out  an  area,      partly by  demolition operation  of      existing building  for facilitating      the road  and then to term it as an      isolated plot.  The fact  that  the      demolition  is   in  respect  of  a      school for  young children  and the      residential   quarters    of    six      employees, would  not  in  any  way      alter   the    factual   or   legal      position, it would indicate how the      weaker sections are displaced and a      noble   purpose    (education    of      children) is  thwarted  to  benefit      the top  bureaucrats. The materials      in our  mind, would  not justify  a      finding about  the  area  being  an      isolated plot.  If that is so, then

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    the  exercise   for  an   allotment      without   publication    would   be      totally without  jurisdiction.  The      resultant order  would  be  grossly      illegal     and      invalid.     A      Constitutional   court    is   then      obliged the  declare its  character      of illegality  and  invalidity.  we      have no  hesitation in  making  the      above declaration  and quashing the      impugned Government  Resolution  on      this ground itself."      We have  heard  learned  counsel  for  the  parties  at length. Mr.  Kapil Sibal, learned counsel for the petitioner has vehemently  contended that  Clause 11  of the Resolution (Quoted above)  does not  talk of  "one or  tow plots  .. in isolation" but the Clause can only be read to mean "disposal in isolation  .... of  one or  tow Plots".  According to the learned counsel the plot may not be in isolation but what is permitted under  the  Resolution is the disposal of the plot in isolation.  In other  words the  contention is that it is not the  situation of the plot but the procedure of disposal of the  plot which can be in isolation of the operative part of Clause 11 of the Resolution. We are of the view that even if the  contention of Mr. Sibal is accepted the reasoning of the High  Court Would still be fully applicable in the facts of the  present case.  No authority  from Collector  to  the Chief Minister  ever applied  his mind to the requirement of Clause 11  of the  resolution. It was nobody’s case that the plot was  isolated or isolated procedure was to be followed. All the concerned Authorities/officers were acting under the influence of  Ranganathan and  nobody was  even conscious of Clause  11   of  the   Resolution  of  any  other  statutory provision. After  giving out thoughtful consideration to the contentions raised  by learned  counsel for the  parties, we are of  the view  that  the  High  Court  was  justified  in reaching the  finding that there has been a patent violation of the  provisions of Clause 11 of the resolution. Only when there is  an isolated  plot, the  question of  following any isolated procedure  in disposing of the plot would arise. In the present   case,  their was neither and isolated plot not any isolated  procedure was  followed.  what  was  done  was wholly arbitrary  and as such cannot be sustained. we see no ground to  interfere with  the finding  of the  High  Court, quoted  above,  on  the  first  point.  We  agree  with  the reasoning and conclusion reached therein.      So far  the second  contention is  concerned  the  High Court rejected  the same on the following reasoning:-      "Under  rule  11  (2),  a  proposal      which   requires    the    previous      consultation   with   the   finance      department  in   sub-rule  (i)  but      where the  Finance  Department  has      not concurred,  cannot be proceeded      with  unless  a  decision  to  that      effect  has   been  taken   by  the      Council  for   ministers.  In   the      present case,  no such  decision to      proceed with  the proposal has been      taken  by   the  Council.  We  must      emphasis that what is prohibited is      the  every   ’proceeding  with  the      proposal.’ The  exercise undertaken      in  the   Department  of   PWD  and      revenue Department,  are proceeding

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    which  do   not  have   the   prior      concurrence    of    the    Finance      Department nor  the  permission  of      the  Counsel   of  Ministers.   The      proceedings were started illegally,      continued illegally  and ultimately      culminated in an illegal order."      We  agree   with  the,   above  quoted,  reasoning  and conclusions reached by the High Court and uphold the same.      We also  agree with  the High Court  that the action of the State  Government in  alloting the plot to the society , in the facts and circumstances of this case, was arbitrary.      An arbitrary action may not always be Male fide. We are of the  view that  in the  facts and  circumstances of  this case, it  would not  be appropriate  to return  a finding of male fide  on the  part of any individual. we, therefore, to not wish to go into the question of male fide.      We dismiss  the appeals  with costs.  We  quantify  the costs as  Rs. 25,000/- to be paid by the State Government to the School.