JUDGMENT
Vikramajit Sen, J.
Page 2547
1. In this batch of petitions an assault has been launched on the decision of the Respondents to cancel the allotment of plots to the Petitioners after having received from them full payment of the sale consideration. Although the matter was heard on several dates, only Respondent No. 2, Delhi State Industrial Development Corporation (DSIDC), has resisted the Petitions. The basis of Page 2548 the defense of the DSIDC is that a change of Policy at the end of Respondents other than them had taken place and, therefore, the Petitioners are not entitled to object to the revised Terms of Allotment. It is noteworthy that these assertions have not been stated by the Government of NCT (Respondent No. 1) who had allegedly altered the Policy.
2. I had occasion to consider the annals of this dispute in Super Electricals v. Delhi State Industrial Development Corporation Ltd., 2005 VIII AD (Delhi) 54. The events leading to the shifting of non-conforming industries shall not be reiterated with a view to avoid prolixity. Owing entirely to the initiative of the Hon’ble Supreme Court and its intervention in the deplorable and further deteriorating state of the environment in several residential areas of the metropolis, polluting industries carrying out non-conforming activities were ordered to close down. The immediate effect, easily perceptible, was a marked improvement in the quality of air in public interest. Since pleadings have been completed in CW No. 4039/2003, this Writ Petition has been treated as the lead case. The Petitioners had applied for plots of varying sizes, not in excess of 400 square meters, in ratio to the area of land used for carrying on non-conforming manufacturing activities. Some of the Petitioners had challenged the actual area allotted to them on the ground that it does not correctly correspond to the area that was being used by it at the time of the closure Orders. That challenge has not been argued before me as the argument of the Petitioners is that a concluded contract had come into existence which would remain impervious to any so-called change in Policy.
3. In compliance with the directions of the Supreme Court applications were invited in Circa 1986. In March 1998 the DSIDC informed the Petitioner that its application “has been found to be in order/deficient in some respects” and for this reason information/documents were called for. In addition thereto the Petitioner was called upon to deposit an amount of Rs. 69,750/- which was equivalent “to 30% of the estimated cost of the plot after adjusting the earnest money with interest accrued @ 7% w.e.f. 01.01.97 already deposited”. Petitioner was warned that if this deposit was not made within 60 days interest at the rate of 18 per cent would be charged on the delayed payment. Counsel for the parties have emphasised the 4th paragraph of this letter which is reproduced for this reason:
4. This provisional eligibility letter will not confer upon you any right to claim seniority for allotment of industrial plot. Actual allotment will be in accordance with the policies/guidelines framed by the Government governing priority of relocation depending upon availability of developed land, nature of industry to be relocated etc.
This far, merely legitimate expectations with all their attendant limitations and qualifications had come into existence.
4. Thereafter, by letter dated 2.6.1998 the Petitioner was informed that as a special case, time to make the payment had been extended by another 30 days, i.e., 30.06.1998 and thereafter liability to pay interest at the rate of 18 per cent would arise. These communications were addressed by the Relocation Division of DSIDC. In October 2000 the Petitioner was informed that based on draw of lots held on 3rd October, 2000 it had been found Page 2549 successful for allotment of an alternative industrial plot measuring 150 square meters in Sector V, Pocket-H, having plot No. 101 at Bawana Industrial Complex. The Petitioner was further notified that the “tentative cost of the plot is Rs. 4,200 sq. m. which is subject to change depending upon the actual cost of development of the industrial plot and directions issued by the Govt. of Delhi in this regard”. In February, 2002 allottees such as the Petitioner, were advised that the plots in question were ready for possession in all respects, and that the balance 50 per cent cost of the plot should be paid by 20th March, 2002; that in the event of non-payment of the cost of the plot and non-completion of legal formalities the allotment would be liable for cancellation.
5. It is not in dispute that the total sale consideration has been received by DSIDC. In most cases, since the Petitioners are fledgling entrepreneurs, payments were possible only after obtaining loans primarily from the Delhi Financial Corporation (DFC). It was in these circumstances that the DSIDC addressed letters to the allottees in May 2003 leading to the filing of these batch of Petitions. One such letter is reproduced below:
Subject: Eligibility for allotment of Indl. Plot after scrutiny of the cases received by DSIDC under Relocation Scheme in 1st, 2nd and 3rd Lot during the year 1998 and 1999.
Dear Sir(s),
Please refer to your Application No. 7835 submitted to the Office of the Commissioner of Industries during the year 1996 for allotment of Industrial plot under the Relocation Scheme of Industries.
You have been provisionally found eligible for allotment of Industrial plot measuring 150 sq. mtrs. intimation of which was communicated to you vide Provisional Eligibility Letter No. DSIDC/RL-Cell/1/98 dated 28.3.98 and subsequently the firm allotment of plot No. 97/H/I measuring 150 Sq. mts. was made to you at Narela/ Badli/ Patparganj/ Jhilmil/Bawana Industrial Complex.
In this connection, it may be mentioned that your case being one among 8831/809/628 cases received by DSIDC from the Office of the Commissioner of Industries during the year 1998/1999 under Lot No. 1st/2nd/3rd respectively without any scrutiny for conveying the eligibility of the Indl. Plot. Subsequently, the Govt. of Delhi on the basis of the Cabinet decision directed DSIDC to review all such cases on the basis of the criterion that the entitlement of the size of the plot to a particular unit should not exceed the double of the area presently occupied by the unit with minimum allotment restricted to 100 sq. mtrs. and rounding of the double area so worked out should be done to the lower side.
Therefore, keeping in view of the above provisions and the particulars entered in para-4 (III) (C) at page No. 2 of the aforesaid Application form, the area occupied by our unit is 66 sq. feet/sq. Yard/sq. mtr. which entitled you for the allotment of plot measuring 100 sq. mtrs. only instead of the plot measuring 150 sq. mts. already allotted to you as stated above.
Hence, the allotment of plot No. 97/H/I measuring 150 sq. mtr. at Narela/Badli/Patparganj/Jhilmil/Bawana already made to you stands cancelled Page 2550 ab initio and an industrial plot measuring 100 sq. mtr. shall be allotted to you on priority in the next draw of lots.
You are requested to surrender all documents related to the firm allotment of plot No. 97/H/I to this office immediately.
It is indeed remarkable and worthy of note that the letter acknowledges ‘firm allotment of plot of the subject plot’. Expansive and extensive argument on the circumstances which allegedly compelled the DSIDC to give effect to a change in Policy have been addressed by learned counsel for DSIDC. The conduct of the DSIDC, however, does not inspire any confidence. In Super Electricals its effort was to reverse its earlier decision vis-a-vis relocation of some industries. These attempts of the DSIDC to repudiate its contractual obligations had been struck down. In the present batch of petitions the attempt is to downsize the plots, inter alia, on the ground that there was not sufficient land at its disposal to make allotment to every applicant. It has been contended by learned counsel for the Respondent that 27055 applicants were found eligible; that out of 1300 acres earmarked for acquisition only 1080 were acquired; that 18355 parties had been favored with an allotment in a hurried manner without due scrutiny since only three weeks had been permitted by the Supreme Court for this purpose; that the Draw took place on 3.10.2000 and Letters of Allotment were issued on 10.10.2000. On behalf of the Petitioners it has been emphasised that in the letters issued in October, 2000 and September, 2001 the allotment was not stated to be provisional. One should not lose sight of the fact that the raison d’etre for the acquisition of large tracts of land was the rehabilitation of persons such as the Petitioners who have litigated against the DSIDC in these writ petitions. The argument considered in Super Electricals has also been reiterated by the Petitioners, which is to the effect that the Cabinet of Ministers of the GNCTD did not possess powers to change a Scheme conceived and confirmed by the Supreme Court of India.
6. The gravamen of the case formulated on behalf of the DSIDC is that the entire transaction was the product of the Relocation Scheme devised by the Supreme Court. Since it was only a Policy, it did not attain immutability or irrevocability and a Policy of this genre could always be modified if public interest so dictated. It has further been contended that these allotments did not attract the doctrine of promissory estoppel. It is also argued that while judicially reviewing the ‘impugned Order’ I should only consider the legality of the decision making process and not the legality of the Order per se and that the impugned decision does not suffer from Wednesbury unreasonableness.
7. Reliance also has been placed by Ms. Salwan, learned counsel for the Respondent, on these observations made in State of NCT of Delhi v. Sanjeev, :
17. The court will be slow to interfere in such matters relating to administrative functions unless decision is tainted by any vulnerability enumerated above; like illegality, irrationality and procedural impropriety. Page 2551 Whether action falls within any of the categories has to be established. Mere assertion in that regard would not be sufficient.
18. The famous case commonly known as “the wednesbury case” is treated as the landmark so far as laying down various basic principles relating to judicial review of administrative or statutory direction.
19. Before summarizing the substance of the principles laid down therein we shall refer to the passage from the judgment of Lord Greene in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (KB at p.229: All ER pp. 682 H-683 A). It reads as follows:
….It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology under in relation to exercise of statutory discretions often use the word ‘unreasonable’ in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting ‘unreasonably’. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority. …. In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another.
Lord Greene also observed (KB p. 230: All ER p. 683 F-G)
“….it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body can come to. It is not what the court considers unreasonable. … The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another”.
Therefore, to arrive at a decision on “reasonableness” the court has to find out if the administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four concerns of the law, and not one which no sensible person could have reasonably arrived at, having regard to the above principles, and must have been a bona fide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the court to substitute its view.
20. The principles of judicial review of administrative action were further summarised in 1985 by Lord Diplock in CCSU case as illegality, procedural impropriety and irrationality. He said more grounds could in future become available, including the doctrine of proportionality which was a principle followed by certain other members of the European Economic Community. Lord Diplock observed in that case as follows: (All ER p. 950h-j.)
Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The Page 2552 first ground I would call ‘illegality’, the second ‘irrationality’ and the third ‘procedural impropriety’. That is not to say that further development on a case-by-case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of ‘proportionality’ which is recognised in the administrative law of several of our fellow members of the European Economic Community.
Lord Diplock explained “irrationality” as follows: (All ER p. 951 a-b)
By ‘irrationality’ I mean what can by now be succinctly referred to as ‘Wednesbury unreasonableness’. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.
8. Mrs. Salwan has rightly sought to explain the doctrine of promissory estoppel within the parameters set down by the Apex Court in Kasinka Trading v. Union of India, , as is evident from this extract:
12. It has been settled by this court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority “to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the government or of the public authority to make”. There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity; so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the government of the public authority to its promise, assurance or representation.
13. The ambit, scope and amplitude of the doctrine of promissory estoppel has been evolved in this country over the last quarter of a century through successive decisions of this Court starting with Union of India v. Indo-Afghan Agencies Ltd. Reference in this connection may be made with advantage to Century Spg. & Mfg. Co. Ltd. v. Ulhasnagar Municipal Council; Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. ; Jit Ram Shiv Kumar v. State of Haryana; Union of India v. Godfrey Philips India Ltd.; Page 2553 Indian Express Newspapers (Bom) (P) Ltd. v. Union of India; Pournami Oil Mills v. State of Kerala; Shri Bakul Oil Industries v. State of Gujarat; Asstt. CCT v. Dharmendra Trading Co.; Amrit Banspati Co. Ltd. v. State of Punjab and Union of India v. Hindustan Development Corporation. In Godfrey Philips India Ltd. this Court opined: (SCC p. 388 para 13)
We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires; if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favor of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority. The doctrine of promissory estoppel would be displaced in such a case, because on the facts, equity would not require that the Government or public authority should be held bound by the promise or representation made by it.
9. Learned counsel for the Respondent has also drawn attention to the following passage in Food Corporation of India v. Kamdhenu Cattle Feed Industries, :
8. 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 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.
Similar views have also been expressed in P.T.R. Exports (Madras) Pvt. Ltd. v. Union of India, , as is evident from the following paragraph:
5. It would, therefore, be clear that grant of license depends upon the policy prevailing as on the date of the grant of the license. The court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that Page 2554 change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. It would be open to the government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject to their satisfying the conditions required in the scheme. The High Court,therefore, was right in its conclusion that the government is not barred by the promises or legitimate expectations from evolving new policy in the impugned notification.
10. In Bangalore Development Authority v. R. Hanumaiha, 2005 AIR SCW 4881 it has been observed that the doctrine of promissory estoppel is an evolution of equity to counter and prevent injustice, and therefore it must yield when equity so requires. I do not find any event which would persuade me to make the allotments yield to equitable considerations since none exist.
11. These decisions are, however, of no avail to the Respondents in the present batch of writ petitions. The distinguishing feature of the present cases is the coming into effect of a concluding contract. It is worthy of reiteration that the Respondents had themselves recorded in their letters that firm allotment of plots had taken place. There is substance in the argument of learned counsel for the Petitioners that the only tentative characteristic of this transaction was the price and not allotment of the plot or its dimensions. So far as the price of the plot is concerned Ms. Salwan had conceded that no escalation had been demanded by the Respondents, therefore, no inchoate or tentative aspect of the contract existed at the time when the Respondents attempted to cancel the respective allotments.
12. One further aspect of the case is to be dealt with. In almost all the cases the Petitioners had obtained loans from the Delhi Financial Corporation, through whom payments were thereafter routed. DFC is conspicuous by its absence on every date on which these Petitions were extensively argued. After the cancellation of the firm allotment of plots DSIDC has in some instances returned the money directly to the Delhi Financial Corporation. This transaction inter se these two parties, without the consent or knowledge or approval of the Petitioners cannot be binding on the Petitioners. It cannot, therefore, be accepted that the Petitioners have acquiesced or consented to the termination of their contracts. In case some amounts are still in the coffers of the Delhi Financial Corporation they should be transferred to the DSIDC forthwith.
13. In these circumstances the writ petitions are allowed. By way of interim Orders status quo had been ordered in respect of the plots allotted to the Petitioners. Possession of these plots be handed over to the Petitioners within fifteen days from today. Parties to bear their respective costs.