REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.      6143              OF 2008 (Arising out of S.L.P. (C) No. 10230 of 2006)

M/S SETHI AUTO SERVICE STATION & ANR.

— APPELLANTS

VERSUS

DELHI  DEVELOPMENT  AUTHORITY  & ORS.

— RESPONDENTS

J U D G M E N T

D.K. JAIN, J.:

Leave granted.   

2. This  appeal  is  directed  against  a  common judgment  and

order rendered by the High Court of Delhi at New Delhi on

6th February, 2006 in Letters Patent Appeals No.2715 and

1

2722  of  2005.   By  the  impugned  order,  the  appeals

preferred by the two appellants herein, under Clause X of

the Letters Patent have been dismissed.  

3.  The appellant firms-M/s Sethi Auto Service Station and

M/s Anand Service Station own two petrol outlets adjacent

to  each  other,  located  at  NH-8,  Mahipalpur,  New  Delhi

since 1994.  The land for the purpose was allotted by the

Airport Authority of India (for short ‘AAI’) whereas the petrol

pumps  were  allotted  by  the  Indian  Oil  Corporation  (for

short ‘IOC’) and Hindustan Petroleum Corporation Limited

(for  short  ‘HPCL’)  to  Sethi  and  Anand  respectively.

According to the appellants, in the year 1999, a proposal

was  formulated  for  construction  of  an eight-lane  express

highway  between  Delhi  and  Gurgaon,  including

construction  of  a  flyover/grid  separator  at  Mahipalpur

crossing,  where  the  two  petrol  pumps  in  question  are

located.   Claiming unviability  in the operation of  the two

petrol pumps on account of construction of the flyover and

relying  on  the  policy  framed  by  the  Delhi  Development

Authority (for short ‘the DDA’) on 14th October, 1999, the

2

two oil companies approached the DDA, respondent No.1 in

this appeal, for “re-sitement” of both the petrol pumps.  It

was claimed that, in the first instance, IOC and HPCL had

corresponded with the original allotment agency, viz. AAI,

for  re-sitement  but  some  time  in  the  year  2000,  AAI

informed  the  Oil  Companies  that  it  did  not  have  any

alternative site for allotment due to non-availability of land.

The  appellants  also  relied  on  the  letter  issued  by  the

National  Highway  Authority  of  India  (for  short  ‘NHAI’)

confirming  that  the  proposed  dual  highway  would  be

developed  along with the existing alignment of  NH-8 and

that  no  access  would  be  provided  to  any retail  outlet  or

private property along the highway.  Supporting the claim of

the  appellants,  the  State  Level  Coordinator  (Oil  Industry)

also wrote a letter to the DDA on 10th May, 2002, inter alia,

pointing  out  that  the  construction  work  on  the  grid

separator had commenced; after its completion, all vehicles

would  cross  over  the  separator  and would  not  have  any

access  to  the  two petrol  pumps  in  question  for  refueling

thereby rendering them economically unviable.

3

4.  The  stand  of  the  appellants  was  that  request  for  re-

sitement  made  by  the  two  Oil  Companies  with  the

recommendation of  the State Level  Coordinator  had been

considered by the DDA; the DDA conducted its own field

survey; the Technical Committee of the DDA on 28th April,

2002 also recommended relocation/re-sitement and on 17th

May,  2002,  a  proposal  for  allotment  of  alternative

sites/plots was referred to and considered by the Screening

Committee  of  the  DDA  at  its  meeting  held  on  21st

November,  2003,  when the  proposal  for  allotment  of  two

alternative sites was approved.  However, when the matter

was finally taken up by the Screening Committee of DDA on

28th November,  2003,  the  proposal  for  relocation  was

disapproved and instead the Commissioner (Planning) was

directed  to  enquire  and  submit  a  report  as  to  why  two

petrol pump sites, earmarked for the appellants, were not

auctioned.   The  recommendation  of  the  Screening

Committee was considered by the Vice Chairman of DDA,

who rejected the proposal  for relocation of  the two petrol

pumps in question.   

4

5.  Aggrieved thereby, the appellants filed writ petitions in

the Delhi High Court.  It was pleaded that the State Level

Coordinator as well as the DDA having recognised that the

two petrol pumps were rendered commercially unviable due

to construction of the grid separator, they had a legitimate

right  to  the  allotment/relocation  of  petrol  pumps  at

alternative  sites,  in terms of the policy of the Ministry of

Petroleum and Natural Gas formulated in the year 1998 as

well as the policy of the DDA of 1999.  It was urged that all

the  requisite  conditions for  such re-allotment/re-sitement

were fulfilled by them and the DDA had also recommended

the allotment in May, 2002; which proposal had also been

cleared  by  the  Technical  Committee  and,  therefore,  the

DDA was bound by the said decisions.  Moreover,  having

acted upon its decisions by earmarking the two sites, the

decision  to  withhold  allotment  and  include  the  two

earmarked plots in the proposed auction was unreasonable,

irrational  and  arbitrary  and  the  mere  fact  that  the  DDA

chose to sit over the recommendations and did not issue

formal orders of allotment could not rob the appellants of

5

their valuable right to such allotment.  In a nutshell, the

case of the appellants was that the decision taken by the

DDA in the year 2002,  in favour of  the appellants,  upon

consideration of all the relevant materials and factors, gave

rise  to substantive  legitimate  expectations  in their  minds

that the allotment for alternative  sites would be made in

favour of the appellants.  Allegations of discrimination were

also levelled  against  the  DDA,  inter alia,  stating that six-

seven  named  petrol  outlets  were  given  alternative  lands

even though they were not operating on the lands allotted

by the DDA.

6.  The stand of the DDA before the High Court was that its

policy  and  guidelines  of  1999  for  re-sitement  of  petrol

outlets and gas godowns had been revised in June, 2003,

superceding all its earlier policies on the subject.  As per

the new policy, re-sitement was permissible only when the

land  of  an  existing  outlet  was  utilized  for  a  planned

proposal/scheme directly  necessitating its  closure;  as per

its policy the DDA has to dispose of land for petrol outlets

through competitive mode of tender or auction and, in any

6

case,  the  new  policy  does  not  contain  any  provision  for

allotment of an alternative site for an existing petrol pump

located  on  private  land  or  land  allotted  by  other  agency

such  as  the  AAI;  that  the  internal  notings  or

communications  with  the  DDA  are  of  no  relevance  and

consequence  till  a  final  decision  was  taken  and

communicated  to  the  concerned  parties.   In  the  present

case  though the proposals  of  other  Government  Agencies

were  considered,  no  final  decision  was  taken  and

communicated by the DDA to the appellants.  As regards

the approval by the Technical Committee or other officials,

the stand of the DDA was that till a final decision was taken

by  the  competent  authority  i.e.  the  Vice  Chairman  and

communicated to the appellants, there was no question of

any vested right accruing in favour of the appellants, merely

on the basis of recommendations of the officials of the DDA.

7.  None of the contentions urged on behalf of the appellants

found  favour  with  the  learned  Single  Judge  of  the  High

Court.  The learned Judge, by a well reasoned order, came

to the conclusion that the  appellants could  not claim an

7

enforceable  right  merely  on  the  basis  of  the  proposal

leading to the recommendation by the Technical Committee

as it did not amount to an order or decision of the DDA,

particularly when its competent authority had rejected the

request of the appellants. The learned Judge also observed

that at best the appellants had a mere expectation of being

considered for re-sitement.  The stand of the DDA that in

view of the fact that a new policy had been formulated in

June, 2003, it was within its right to apply the same was

also found to be in order.  Thus, the learned Judge found

that the DDA had acted fairly and reasonably in rejecting

appellants’  prayer  for  re-sitement.   Accordingly,  both  the

writ petitions were dismissed.

8.  Aggrieved  by  the  said  order,  the  appellants  preferred

Letters Patent Appeals under Clause X of the Letters Patent

as applicable to the High Court of Delhi.  Both the appeals

having been dismissed, the appellants have preferred this

appeal.

8

9.  Mr. Arun Jaitley, learned senior counsel, appearing for the

appellants,  strenuously  urged  that  the  representations  of

the appellants were considered by the DDA in terms of its

policy  dated  14th October,  1999  and  its  Technical

Committee,  headed  by  the  Vice  Chairman  himself,  had

found the appellants to be eligible and on 28th November,

2002  recommended  re-sitement  of  the  two  outlets  and,

therefore, it was not open to the DDA to do a volte-face and

reject  the  representation  of  the  appellants.   It  was

contended that once appellants’ cases were considered by

the DDA under the guidelines in vogue at the relevant time

and  they  were  found  to  be  covered  thereunder,  the

appellants  had  substantive  legitimate  expectation  that

allotments  would  be  made  to  them.   It  was  argued  that

mere delay on the part of the DDA in communicating formal

orders of allotment to the appellants could not defeat their

valuable right on the ground of subsequent change in the

policy  in  June,  2003,  which  could  only  be  applied

prospectively.

9

10. Per  contra,  Mr.  A.  Sharan,  learned  Additional  Solicitor

General,  appearing  for  the  DDA,  submitted  that  mere

notings and proposals in the files of the DDA did not result

in creation of any right in favour of the appellants till a final

decision  was  taken  by  the  Vice  Chairman  as  the

administrative  head  of  the  DDA  and  the  same  was

communicated to the appellants.  It was also urged that in

the absence of a final decision duly communicated to the

appellants, their claims had to be considered on the basis

of the policies framed by the DDA from time to time and the

relevant date for the said purpose would be the date when

the Vice Chairman took the final decision under the policy

in  vogue  at  that  point  of  time.   In  support  of  the

proposition, reliance was placed on a decision of this Court

in P.T. R. Exports (Madras) Pvt. Ltd. & Anr. Vs. Union of

India  & Ors.1  A  reference  was  also  made  to  Howrah

Municipal Corporation & Ors. Vs. Ganges Rope Co. Ltd.

& Ors.2 to contend that in view of the amendment of the

guidelines, which had the statutory flavor, in June, 2003,

1 (1996) 5 SCC 268 2 (2004) 1 SCC 663

10

the so called vested right to be considered under the 1999

guidelines,  if  any,  also  got  nullified  on  account  of  the

amended guidelines.

11. Thus, the first question arising for consideration is whether

the  recommendation  of  the  Technical  Committee  vide

minutes dated 17th May, 2002 for re-sitement of appellants

petrol pumps constitutes an order/decision binding on the

DDA?   

12. It is trite to state that notings in a departmental file do not

have the sanction of law to be an effective order.  A noting

by  an  officer  is  an  expression  of  his  viewpoint  on  the

subject.   It  is no more than an opinion by an officer  for

internal use and consideration of the other officials of the

department and for the benefit of the final decision-making

authority.   Needless  to  add that  internal  notings are  not

meant for outside exposure.  Notings in the file culminate

into an executable order, affecting the rights of the parties,

only when it reaches the final decision-making authority in

11

the  department;  gets  his  approval  and  the  final  order  is

communicated to the person concerned.

13. In  Bachhittar  Singh  Vs.  The  State  of  Punjab3, a

Constitution  Bench  of  this  Court  had  the  occasion  to

consider the effect of an order passed by a Minister on a

file,  which  order  was  not  communicated  to  the  person

concerned.   Referring  to  the  Article  166(1)  of  the

Constitution,  the  Court  held  that  order  of  the  Minister

could  not  amount  to  an  order  by  the  State  Government

unless it was expressed in the name of the  Rajpramukh, as

required by the said Article and was then  communicated

to the party concerned.  The court observed that business

of  State  is  a  complicated  one  and  has  necessarily  to  be

conducted through the agency of a large number of officials

and authorities.  Before an action is taken by the authority

concerned in the name of the Rajpramukh, which formality

is a constitutional necessity, nothing done would amount to

an order creating rights or casting liabilities to third parties.

It is possible, observed the Court, that after expressing one

3 [1962] Supp 3 SCR 713

12

opinion about  a particular matter  at a particular stage a

Minister  or the Council  of  Ministers may express  quite  a

different  opinion  which  may  be  opposed  to  the  earlier

opinion.  In such cases, which of the two opinions can be

regarded as the “order” of the State Government?  It  was

held  that  opinion becomes  a  decision  of  the  Government

only when it is communicated to the person concerned.

14. To  the  like  effect  are  the  observations  of  this  Court  in

Laxminarayan  R.  Bhattad  &  Ors.  Vs.  State  of

Maharashtra & Anr.4,  wherein  it  was  said  that  a  right

created  under  an order  of  a  statutory  authority  must  be

communicated to the person concerned so as to confer an

enforceable right.

15. In view of the above legal position and in the light of the

factual scenario as highlighted in the order of the learned

Single  Judge,  we  find  it  difficult  to  hold  that  the

recommendation  of  the  Technical  Committee  of  the  DDA

fructified  into  an  order  conferring  legal  right  upon  the

appellants.  We may note that during the course of hearing

4 (2003) 5 SCC 413

13

of  the  writ  petitions,  the  learned  Single  Judge  had

summoned the original records wherein the representations

of the appellants were dealt with.  On a perusal thereof, the

learned Judge observed  that the  proposal  for  re-sitement

was  apparently  approved  up  to  the  level  of  the

Commissioner  and  the  matter  was  placed  before  the

Technical Committee, which approved it on 28th November,

2002.   Thereafter, the DDA took further steps on the basis

of  field  inspection  to  earmark  the  two  sites;  the  entire

matter was placed before the Screening Committee and the

Screening  Committee  in  its  decision  some  time  in  2003

noted  that  the  matter  had  to  be  placed  for  disposal  in

accordance with the policy.  Some time in July, 2004 after

the  conclusion  of  certain  inquiries  into  the  complaints

regarding  re-sitement,  the  issue  of  relocation  was  again

taken up and a detailed  note  was made  on 12th August,

2004, recounting the steps taken including the discussion

of  the  Screening  Committee  in  its  meeting  on  21st

November,  2003.   It  is pointed out that the note records

that the proposals for re-sitement were not finally approved.

14

The learned Judge has also observed that the note dated

21st November, 2003 along with the inspection report and

the  proposal  for  re-sitement  was  put  up  before  the

Commissioner (LB) who, on 9th September,  2004 recorded

the following comments:

“However,  the  basic  fact  to  be  noted  is  that these petrol pumps were allotted on the land of  Airport  Authority  of  India  and there  is  no responsibility on the part of the DDA to bear any cost  or to carry out  resitement  for  such sites given by any other land owning agency and  which  are  being  effected  by  a  project which  is  being  done  by  a  third  agency  vis National  Highway  Authority  of  India  with which DDA has no links.  This was discussed with VC and PC last  week  in  the context  of certain other resitement proposal pending for different  areas  in Dwarka and it  was agreed that  the  onus  of  such  petrol  pump sites  on DDA land, does not lie upon DDA particularly in a situation when DDA now has a policy for auction of petrol pump sites.  It was, therefore, decided that irrespective of the impact of the proposed Express Way on these petrol  pump sites, there is no reason for DDA to take the responsibility  of  resitement  of  these  petrol pump sites and the oil  companies concerned may either participate in the auction process or  obtain  private  plots  for  the  purpose  of carrying out their business.”

15

16.Finally, the Vice Chairman concurred with the view of the

Commissioner; proposals for re-sitement were rejected and

consequently decision was taken to put the two plots, on

which the appellants had staked their claims for auction.

17.From the afore-extracted notings of the Commissioner and

the order of the Vice Chairman, it is manifest that although

there  were  several  notings  which  recommended

consideration  of  the  appellants’  case  for  relocation  but

finally  no  official  communication  was  addressed  to  or

received by the appellants accepting their claim. After the

recommendation  of  the  Technical  Committee,  the  entire

matter  was kept  pending;  in the meanwhile  a new policy

was formulated and the matter was considered afresh later

in the year 2004, when the proposal  was rejected by the

Vice Chairman, the final decision making authority in the

hierarchy.  It is, thus, plain that though the proposals had

the recommendations of State Level               Co-ordinator

(oil  industry)  and the Technical  Committee  but these  did

not ultimately fructify into an order or decision of the DDA,

16

conferring  any  legal  rights  upon  the  appellants.   Mere

favourable recommendations at some level of the decision

making process,  in our  view,  are  of  no consequence  and

shall  not  bind  the  DDA.   We  are,  therefore,  in  complete

agreement with the High Court that the notings in the file

did not  confer  any right upon the appellants,  as long as

they remained as such.  We do not find any infirmity in the

approach adopted by the learned Single Judge and affirmed

by the Division Bench, warranting interference.

18. We may, now, consider the plea relating to the legitimate

expectation of the appellants in terms of DDA’s policy dated

14th October, 1999 and the impact of change of the policy,

in June, 2003, thereon.

19. The protection of  legitimate expectations, as pointed out

in De Smith’s Judicial Review (Sixth Edition),         (para

12-001),  is at the root of the constitutional principle of the

rule  of  law,  which  requires  regularity,  predictability,  and

certainty  in  government’s  dealings  with  the  public.   The

doctrine  of  legitimate  expectation  and  its  impact  in  the

17

administrative law has been considered by this Court in a

catena of decisions but for the sake of brevity we do not

propose to refer to all these cases.  Nevertheless, in order to

appreciate the concept, we shall refer to a few decisions.  At

this juncture, we deem it necessary to refer to a decision by

the House of Lords in Council of Civil Service Unions &

Ors.  Vs.  Minister for the Civil Service5, a  locus classicus

on the subject, wherein for the first time an attempt was

made to give a comprehensive definition to the principle of

legitimate  expectation.  Enunciating  the  basic  principles

relating  to  legitimate  expectation,  Lord  Diplock  observed

that for a legitimate expectation to arise, the decision of the

administrative authority must affect such person either (a)

by altering rights or obligations of  that person which are

enforceable  by  or  against  him  in  private  law  or  (b)  by

depriving him of some benefit or advantage which either: (i)

he has in the past been permitted by the decision maker to

enjoy and which he can legitimately expect to be permitted

to  continue  to  do  until  some  rational  ground  for

5 [1984] 3 All ER  935

18

withdrawing it has been communicated to him and he has

been given an opportunity to comment thereon or (ii) he has

received assurance from the decision-maker that they will

not be withdrawn without first giving him an opportunity of

advancing  reasons  for  contending  that  they  should  be

withdrawn.

20. In Attorney General of Hong Kong Vs. Ng Yuen Shiu6, a

leading  case  on  the  subject,  Lord  Fraser  said:  “when  a

public authority has promised to follow a certain procedure,

it is in the interest of good administration that it should act

fairly  and  should  implement  its  promise,  so  long  as  the

implementation does not interfere with its statutory duty”.

21. Explaining  the  nature  and  scope  of  the  doctrine  of

legitimate expectation, in  Food Corporation of India  Vs.

M/s  Kamdhenu  Cattle  Feed  Industries7,  a  three-Judge

Bench of this Court had observed thus:

“The mere reasonable or legitimate expectation of a citizen,  in such a situation, may not by itself be a distinct enforceable right, but failure to  consider  and  give  due  weight  to  it  may render the decision arbitrary, and this is how

6   (1983) 2 All.ER 346 7 (1993) 1 SCC 71

19

the  requirement  of  due  consideration  of  a legitimate  expectation  forms  part  of  the principle  of  non-arbitrariness,  a  necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration  in  a  fair  decision-making process.  Whether  the  expectation  of  the claimant  is  reasonable  or  legitimate  in  the context  is  a  question  of  fact  in  each  case. Whenever  the  question  arises,  it  is  to  be determined  not  according  to  the  claimant’s perception  but  in  larger  public  interest wherein other more important considerations may outweigh what would otherwise have been the  legitimate  expectation  of  the  claimant.  A bona  fide  decision  of  the  public  authority reached  in  this  manner  would  satisfy  the requirement  of  non-arbitrariness  and withstand  judicial  scrutiny.  The  doctrine  of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.”

22. The  concept  of  legitimate  expectation  again  came  up  for

consideration  in  Union of  India & Ors.  Vs.  Hindustan

Development Corporation & Ors.8.  Referring to a large

number  of  foreign  and  Indian  decisions,  including  in

Council of Civil Service Unions  and  Kamdhenu Cattle

Feed  Industries  (supra)  and  elaborately  explaining  the

concept of legitimate expectation, it was observed as under:

“If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is  arbitrary,  discriminatory,  unfair  or  biased,

8 (1993) 3 SCC 499

20

gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14  but  a  claim  based  on  mere  legitimate expectation  without  anything  more  cannot ipso  facto  give  a  right  to  invoke  these principles.  It  can  be  one  of  the  grounds  to consider but the court  must lift  the veil  and see whether the decision is violative of these principles warranting interference. It depends very  much  on  the  facts  and  the  recognised general  principles  of  administrative  law applicable  to  such  facts  and  the  concept  of legitimate  expectation  which  is  the  latest recruit to a long list of concepts fashioned by the  courts  for  the  review  of  administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is “not the key which unlocks the treasury of natural justice and it ought  not  unlock  the  gate  which  shuts  the court out of review on the merits”, particularly when  the  element  of  speculation  and uncertainty is inherent in that very concept.”

23. Taking  note  of  the  observations  of  the  Australian  High

Court  in  Attorney  General  for  New  South  Wales Vs.

Quinn9 that “to strike down the exercise of administrative

power solely on the ground of avoiding the disappointment

of the legitimate expectations of an individual would be to

set the Courts adrift on a featureless sea of pragmatism”,

speaking for the Bench, K. Jayachandra Reddy, J. said that

9   (1990) 64 Aust LJR 327

21

there  are  stronger  reasons  as  to  why  the  legitimate

expectation should not be substantively protected than the

reasons  as  to  why  it  should  be  protected.   The  caution

sounded in the said Australian case that the Courts should

restrain  themselves  and  restrict  such  claims  duly  to  the

legal limitations was also endorsed.

24. Then  again  in  National  Buildings  Construction

Corporation Vs. S. Raghunathan & Ors.10, a three-Judge

Bench of this Court observed as under:

“The  doctrine  of  “legitimate  expectation”  has its genesis  in the field  of  administrative  law. The  Government  and  its  departments,  in administering  the  affairs  of  the  country,  are expected to honour their statements of policy or  intention  and  treat  the  citizens  with  full personal  consideration  without  any  iota  of abuse  of  discretion.  The  policy  statements cannot  be  disregarded  unfairly  or  applied selectively.  Unfairness  in  the  form  of unreasonableness  is  akin  to  violation  of natural justice. It was in this context that the doctrine  of  “legitimate  expectation”  was evolved which has today become a source of substantive as well  as procedural rights. But claims based on “legitimate expectation” have been  held  to  require  reliance  on representations and resulting detriment to the claimant in the same way as claims based on promissory estoppel.”

10 (1998) 7 SCC 66

22

25. This Court in Punjab Communications Ltd. Vs. Union of

India & Ors.11, referring to a large number of authorities

on the question, observed that a change in policy can defeat

a substantive legitimate expectation if it can be justified on

“Wednesbury” reasonableness.  The decision maker has the

choice in the balancing of the pros and cons relevant to the

change in policy.  Therefore, the choice of the policy is for

the decision maker and not for the Court.  The legitimate

substantive  expectation  merely  permits  the  Court  to  find

out if the change in policy which is the cause for defeating

the legitimate expectation is  irrational  or perverse  or one

which no reasonable  person could  have  made.  (Also  see:

Bannari  Amman  Sugars  Ltd. Vs.  Commercial  Tax

Officer & Ors.12)

26. Very  recently  in  Jitendra  Kumar  & Ors. Vs. State  of

Haryana & Anr.13, it has been reiterated that a legitimate

expectation is not the same thing as an anticipation.  It is

distinct and different from a desire and hope.  It is based on

11   (1999) 4 SCC 727 12   (2005) 1 SCC 625 13   (2008) 2 SCC 161

23

a  right.   It  is  grounded  in  the  rule  of  law  as  requiring

regularity, predictability and certainty in the Government’s

dealings  with  the  public  and  the  doctrine  of  legitimate

expectation  operates  both  in  procedural  and  substantive

matters.

27. An examination of the afore-noted few decisions shows that

the  golden  thread running through all  these  decisions  is

that  a  case  for  applicability  of  the  doctrine  of  legitimate

expectation, now accepted in the subjective sense as part of

our legal jurisprudence, arises when an administrative body

by reason of a representation or by past practice or conduct

aroused an expectation which it would be within its powers

to fulfill unless some overriding public interest comes in the

way.   However,  a  person  who  bases  his  claim  on  the

doctrine of legitimate expectation, in the first instance, has

to satisfy that he has relied on the said representation and

the denial of that expectation has worked to his detriment.

The Court could interfere only if the decision taken by the

authority  was  found  to  be  arbitrary,  unreasonable  or  in

gross abuse of power or in violation of principles of natural

24

justice and not taken in public interest. But a claim based

on  mere  legitimate  expectation  without  anything  more

cannot ipso facto give a right to invoke these principles.  It

is well settled that the concept of legitimate expectation has

no role to play where the State action is as a public policy

or in the public interest unless the action taken amounts to

an  abuse  of  power.   The  court  must  not  usurp  the

discretion  of  the  public  authority  which is  empowered  to

take the decisions under law and the court is expected to

apply  an objective  standard which leaves  to  the  deciding

authority the full  range of choice  which the legislature is

presumed  to  have  intended. Even  in  a  case  where  the

decision  is  left  entirely  to  the  discretion  of  the  deciding

authority without any such legal bounds and if the decision

is taken fairly and objectively, the court will not interfere on

the  ground  of  procedural  fairness  to  a  person  whose

interest based on legitimate expectation might be affected.

Therefore, a legitimate expectation can at the most be one

of the grounds which may give rise to judicial  review but

25

the granting of relief is very much limited. [Vide Hindustan

Development Corporation (supra)]  

28.Bearing in mind the aforestated legal position, we may now

advert  to  the  facts  at  hand.   In  the  light  of  the  factual

scenario  noted  above,  the  short  question  arising  for

determination is  whether rejection of appellants claim for

resitement  on the  basis  of  the  revised  policy  of  the  year

2003,  their  substantive  legitimate  expectation  of  being

considered under the old policy of 1999 has been defeated?

29.In order to adjudicate upon the controversy, it would be

necessary to briefly refer to the two policies being pressed

into service by the rival parties.  In the guidelines issued in

1999,  the  relevant  eligibility  criteria  was  in  the  following

terms:

“iv) The resitement sought due to reduction in sale  on  account  of  any  planned scheme/project  may be  entertained  by DDA, provided  it  is  referred  by  an  Oil Company/Ministry  mentioning  that  the  sale level  is below the prescribed limit and petrol pump is not feasible in its existing location.”

26

30. According to the said guidelines, a request for resitement

on  the  ground  of  reduction  in  sales  level  below  the

prescribed limit could be entertained by the DDA provided

the  proposal  was  referred  by  the  oil  company  or  the

Ministry.  The parties are ad-idem that the cases of both the

appellants for relocation were recommended by the two Oil

Companies, viz., IOC and HPCL, on account of expected fall

in sales because of the construction of the flyover and grid

separator.   However,  before  a  final  decision  on  the

representation of the appellants could be taken, the policy

of  the  DDA  underwent  revision  in  the  year  2003.   The

criterion for allotment of land by the DDA for resitement of

existing  petrol  pumps  was  changed.   Under  the  revised

policy, dated 20th June, 2003, a case for resitement could

be  considered  by  the  DDA  only  under  the  following

circumstances:

“A. Resitement:

1)   Resitement  will  be  made  only  when  the existing  petrol  pump/gas  godown  site  is utilized  for  a  planned  project/scheme  which directly  necessitates  the  closing  down of  the petrol pump/gas godown site.  No resitement will  be  made on any other  grounds.   As the

27

petrol  pumps  will  be  disposed  on  annual Licence  fee  basis  rather  than  on  upfront payment,  if  an  allottee  does  not  find  the business  lucrative  due  to  certain  other reasons, he can always chose to surrender the site.

2) In  all  cases  of  resitement,  the  existing rates for the new site will be charged and the possession of the old site will be handed over to DDA.

3) The  alternative  site  will  be  allotted through computerized draw from the available sites.    For holding the draw at least 3 sites must be available  on the date of holding the draw.”

31.It is plain that under the new policy resitement of a petrol

pump etc. is possible only when the existing petrol pump is

utilized  for  a  planned  project/scheme,  which  directly

necessitates the closing down of the petrol pump.  Under

the new policy, resitement on account of fall in sales etc. is

not contemplated.  In fact, resitement on any other ground

is specifically  ruled  out.   It  is  also evident  from the new

policy that in the event of DDA permitting resitement, the

possession of the old site has to be delivered to the DDA,

which presupposes that the old site was also allotted by the

28

DDA.  As noted above, the existing sites on which the two

petrol pumps in question are operating were allotted by the

Airport Authority of India and not by the DDA.

32.Having bestowed our anxious consideration to the facts in

hand,  in  our  judgment,  the  doctrine  of  legitimate

expectation,  as  explained  above,  is  not  attracted  in  the

instant  case.   It  is  manifest  that  even  under  the  1999

policy, on which the entire edifice of appellants substantive

expectation of getting alternative land for resitement is built

does not cast any obligation upon the DDA to relocate the

petrol pumps.  The said policy merely laid down a criterion

for  relocation  and  not  a  mandate  that  under  the  given

circumstances the DDA was obliged to provide land for the

said  purpose.   Therefore,  at  best  the  appellants  had  an

expectation of being considered for resitement.  Their cases

were  duly  considered,  favourable  recommendations  were

also  made  but  by  the  time  the  final  decision-making

authority  considered  the  matter,  the  policy  underwent  a

change and the cases of the appellants did not meet  the

29

new criteria for allotment laid down in the new policy.  We

are  convinced  that  apart  from  the  fact  that  there  is  no

challenge  to  the  new  policy,  which  seems  to  have  been

conceived  in  public  interest  in  the  light  of  the  changed

economic  scenario  and  liberalized  regime  of  permitting

private companies to set up petrol outlets, the decision of

the DDA in declining to allot land for resitement of petrol

pumps, a matter of largesse, cannot be held to be arbitrary

or  unreasonable  warranting  interference.   Moreover,  with

the  change  in  policy,  any  direction  in  favour  of  the

appellants  in  this  regard  would  militate  against  the  new

policy of 2003.  In our opinion, therefore, the principle of

legitimate  expectation  has  no  application  to  the  facts  at

hand.

33.In view of the foregoing discussion, the appeal is devoid of

any merit  and deserves to be dismissed.   It  is  dismissed

accordingly.  However, in the circumstances of the case, the

parties are left to bear their own costs.

30

………………………………………….J.     ( C.K. THAKKER)

                              ..….…………………………………….J.     ( D.K. JAIN)

NEW DELHI, OCTOBER 17, 2008.

31