Fishermen Cooperative Society, Raidurg vs Dist. Collector, R.R. Dist., Hyderabad and others

This writ petition has been filed seeking a declaration that the proceedings of the second respondent in Reference No.784/C/99 dated 12-4-1999 as illegal and arbitrary and set aside the same, and further to direct the respondent to grant lease to the petitioner-Society for exploring fish in Durgam Cheruvu-hereinafter referred to as ''tank'', at Raidurg Village in Ranga Reddy District for the fishing year 1998-99.

Petitioner is a Fishermen Cooperative Society registered under A.P. Cooperative Societies Act, the members of which are involved in fishing activities only, and the disputed ''tank'' has been in the area of operation of the petitioner-Society along with other tanks for fishing activity since more than two decades. The leasehold rights for exploiting the fish in the ''tank'' have been given to the petitioner-Society including the fishing year 1997-98. The fishing year starts from July 1, and ends with June 30. Since normally the orders of lease were being given in the month of October, the petitioner-Society made a request in the month of October, 1998 for grant of leasehold rights for the fishing year 1998-99, to which the petitioner-Society was informed through the proceedings dated 14-12-1998 that there were instructions from the second respondent not to grant lease till further instructions. The petitioner-Society made a representation on 11-3-1999 in this regard.

Earlier the petitioner-Society filed Writ Petition No.543I of 1999 before this Court which was disposed of by an order dated 17-3-1999 directing the second respondent to consider the representation of the petitioner-Society dated 11-3-1999 and decide the same within a period of 10 days. In compliance to the said order, the second respondent passed the impugned order dated 12-4-1999 in Reference No.784/C/99 staling that as per the instructions of the first respondent it was not feasible to grant lease inasmuch as the ''tank'' in question was handed over to the Tourism Department. Therefore, the petitioner-Society submits that the impugned proceedings of the second respondent is contrary to the doctrine of legitimate expectation, apart from being violative of the Fundamental Rights guaranteed under Articles 14 and 21 of the Constitution of India and also in violation of the principles of natural justice.

On the other hand, the respondents including A.P. Travel & Tourism Development Corporation Ltd., Hyderabad who seeks impleadment in the writ petition as the fourth respondent in WP MP No.13996 of 1999, filed counter-affidavits. The contentions in all the counter-affidavits are identical and the substance of the said counter-affidavits are identical and the substance of the said counter-affidavits is that during the State Tourism Promotion Board Meeting held on 24-6-1998, a decision was taken to develop and improve the ''lank'' and other tanks with HUDA as a Coordinating Agency and the Tourism Department will be going ahead with pedal boating as well as jetty in the ''tank'' and HUDA would be undertaking a plan for beautification in and around the ''tank'' and the proposal of leasing out the ''tank'' was deferred for the reason that it was decided not to lease out the tank for fishing purpose in a meeting dated 24-6-1998 under the Chairmanship of the Chief Secretary to the Government; that A.P. Tourism Development Corporation has already introduced boating activity and adventure tourism in the ''tank'' with effect from 10-6-1998 and ancillary steps like fencing the full tank level area were being taken up and constructions were coming up. Further, the lease in favour of the petitioner-Society was up to June 30 only; that the said ''tank'' is popularly known as Secret Lake'', situated in Raidurg Village, adjoining Jubilee Hills. It was further stated that ''the tank adjoining Jubilee Hills is totally surrounded with beautiful rock formation all around. These rock formations have declared as "Heritage Rocks" HUDA, since the surroundings have beautiful ambience and pictures que scene. Approach road was already laid and oilier infra-structure facilities had already been provided for promotion of tourism and more than 200 families are coming daily to enjoy the beautiful ambience and unpolluted water. As the area has been developed as a eco-environmental place. It was high-lighted that because of the operations of boats, there is always danger of fishing nets getting entangled with the fans of the boats and thereby there is every possibility of life, danger and by virtue of fishing activity the whole environment will get spoiled because of the regular traffic of lorries and auto-rickshaws. It was further contended that since the lease had already expired by 30-6-1998, the petitioner-Society had not right to claim grant of lease as a matter of right. It is also denied that the averment that fish saplings were put in the tank after 30-6-1998. The important assertion in these counter-affidavits is that the ''tank'' area was declared as "Heritage Rocks" - vide G.O. Ms. No. 102, Municipal Administration, dated 23-3-1998. It is further contended that in consultation with M/s. EDAW Ltd., United Kingdom, Tourism Master Plan has been prepared and the balancing rocks at the ''tank'' are identified as very unique and as on the date pedal boats and adventure activities like rope rappling, trekking, camping of rock climbing were being conducted at the ''tank''. It is stated that already an amount of Rs. 17.00 lakhs was invested. It is specifically averred that the petitioner-Society has not put fish seeds in the water and that if there are fish in the ''tank'', they are grown naturally and not by any human effort. It is further stated that pursuant to the orders of the High Court in Writ Petition No.5431 of 1999, the application of the petitioner-Society dated 11-3-1999 was considered and through proceedings in Reference No.784/C/99 dated 3-4-5999, the petitioner was informed that the ''tank'' was transferred to the Department of Tourism, and it was desirable to lease out the ''tank'' to the Society.

In view of the above contentions, the point that arises for consideration is whether the principle of legitimate expectation, particularly when there is change in the policy of the Government is available to the petitioner-Society, and whether any principles of natural justice are violated or not ?

The facts basing on the submissions reveals that the petitioner-Society has been the lessee of the ''tank'' since several years and the lease was being granted every year by renewal. Of course, no material is placed about the method of renewal. All of a sudden from the fishing year 1998-99, commencing from first July, ending with 30th June, the practice of renewal of lease had been dispensed with. In such a situation, the petitioner-Society would naturally expect that the lease would be renewed, but the Government and its instrumentalities came forward with some reasons. In this context, it is necessary to refer to the judgment of the Supreme Court in Food Corporation of India Vs. M/s. Kamdhenu Cattle Feed Industries, . In that case the Food Corporation of India invited tenders for sale of stocks of damaged food grains in accordance with the terms and conditions contained in the tender notice. The respondent therein was a participant in the tender and his was the highest bid. The Food Corporation of India having not been satisfied about the adequacy of the amount offered in the highest tenders, invited all the tenderers to participate in the negotiations, during which another highest offer had emerged and thereby the Corporation was enriched with an excess amount of Rs.20.00 lakhs. The said action of the Corporation as impugned before the High Court, where the contention of the contesting tenderer was upheld and when the matter came up for consideration before the Supreme Court, the contention of the Corporation was upheld. The following observations can be usefully extracted hereunder:

"In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly, and to adopt a procedure which is ''fair play in action''. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expeclations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminale discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review."

"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."

In the aforesaid judgment a reference was also made to the observation made in the decision reported in Shanti Vijay & Co. v. Princess Fatima Fouzia, AIR 1980 SC 17, which is as follows :

"the Court should interfere where discretionary power is not exercised reasonably and in good faith."

In Madras City Wine Merchants'' Association and Another Vs. State of T.N. and Another, , the Government of Tamil Nadu issued liquor licences for the year 1989-90 providing for renewal of licences for two successive years on the licensee offering to pay the prescribed highest percentage on the privilege amount. Later, the Government issued G.O. Ms. No.90 to the effect that fresh actions may be conducted for all the liquor vending shops whose licence period expires on or before 31-5-1992, and while restricting the period of licence to 31-5-1992 by refunding the proportionate portion of privilege amount. This course was adopted in order to facilitate the Government to evolve fresh scheme of up set price for auctioning of the liquor retain vending shops in the State. Dealing with the said case, their Lordships held that the grievance of the Wine Merchants'' could be at best a ''hope'' and there was no room for any expectation, depending upon the prevailing circumstances in that case. Another important factor which was taken note of by their Lordships in the said case was that long before the bar licensee could apply for renewal, the policy decision has been taken not to renew.

In this context a glance at the facts of the case on hand reveals that G.O. Ms. No.102, Municipal Administration, was issued on 23-3-1998 declaring the surroundings of the ''tank'' as "Heritage Rocks". Therefore, it is clear that the Government had changed its policy even as on 23-3-1998 i.e., well before the completion of the lease period i.e., 30-6-1998.

In Union of India and others Vs. Hindustan Development Corpn. and others, , which decision has been referred by their Lordships in Madras City Wine Merchants'' Association case (supra), it has been held that "If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, 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 expectation without anything more cannot ipso facto give a right to invoke these principles."

From the above it is clear that legitimate expectation may arise (a) if there is an express promise given by a public authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue; (c) such an expectation must be reasonable. However, if there is a change in policy or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise."

Further in Punjab Communications Ltd. Vs. Union of India and Others, , the Supreme Court has discussed various other judgments which include the judgments referred to above. The said judgment is almost a text on the principle of legitimate expectation. It is relevant to extract the following passages :

"37. the above survey of cases shows that the doctrine of legitimate expectation in the substantive sense has been accepted as part of our law and that the decision maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way. The judgment in Raghunathan''s case requires that reliance must have been placed on the said representation and the representee must have thereby suffered detriment."

..... "The result is that change in policy can defeat a substantive legitimate expectation if it can be justified on Wednesbury reasonableness. We have noticed that in Union of India and others Vs. Hindustan Development Corpn. and others, , also it was laid down that the decision maker has the choice in the balancing of the pros and cons relevant to the change in policy. It is, therefore, clear that 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 been made."

..... "42. .....

the protection for substantive legitimate expectation was based on Wednesbury unreasonableness. In sum, this means that the judgment whether public interest overrides the substantive legitimate expectation of individuals will be for the decision-maker who has made the change in the policy and the Courts will intervene in that decision only if they are satisfied that the decision is irrational or perverse.

.....

Now, regarding the point under consideration viz., "Whether the principle of legitimate expectation, particularly when there is change in the policy of the Government is available to the petitioner-Society, and whether any principles of natural justice are violated or not?" , it is necessary to review the contentions made by both the parties. It is contended by the learned Counsel for the petitioner-Society that the petitioner was being granted lease for the past several years i.e., upto 1997-98. Fishing year, admittedly, ends by 30-6-1998. The petitioner made a request for renewal of the lease only in the month of October, 1998, for which the petitioner was informed through the proceedings dated 14-12-1998 that there were instructions from the second respondent not to grant lease till further instructions, upon which the petitioner made a representation only on 11-3-1999 i.e., after about three months. The fact that a decision was already taken regarding change of use by converting the surrounds of the ''tank'' into a Tourism spot-vide G.O. Ms. No.1902, Municipal Administration dated 23-3-1998, indicates that a decision had already been taken even before the completion of the lease period for the year 1997-98. No doubt, the petitioner-Society may not in all probability have the knowledge about the G.O., and the change in the policy of the Government, but the circumstances show that the leasing authority has not only maintained silence about the renewal of the lease, but also went ahead with making further changes in the surroundings by substantially changing the environment around the ''tank'' and also providing necessary infrastructure consequent upon conversion of the tank area. The specific averment made by the first respondent in his counter-affidavit was that A.P. Tourism has already introduced boating activity and adventure tourism in the tank from 10-6-1998. That itself shows that there were clear indication from the Government and the authority concerned that the tank may not be leased out when there was visible progress in the activity undertaken by the Tourism Department as well as other Governmental functionaries. Admittedly, the petitioner-Society made an application seeking renewal of lease only in the month of October, 1998 upon which the petitioner-Society was informed that there were instructions from the second respondent not to grant any lease. Thereafter the petitioner-Society made a representation dated 11-3-1999 renewing its request. When there was change in the policy of the Government, though not expressly made, it is too much for the petitioner-Society to expect that the lease would be granted in its favour. It is further contention of the petitioner that seedlings were already put in the ''tank'' even in the monih of June, 1998. The said contention is not supported by any material and on the other hand, in the counter-affidavits filed by the respondents, (he said plea was categorically denied and it was stated further that if any fish was found in the ''tank'' as on that day, the same was grown naturally.

The petitioner-Society placed reliance on G.O. Ms. No.776 Food & Agriculture (Fish-11) Department, dated 31-12-1990. A perusal of the said G.O., shows that it is a comprehensive policy of the Government with regard to various inland water source and the method and guidelines for issuing leases. A perusal of the said G.O., further shows that the Government is the absolute authority with regard to indemnifying lakes for fishing and if so priority-wise to whom such leasehold rights can be assigned. The petitioner relies on Clause (c) under the heading ''Procedure to be followed'', viz., the Collector of the District shall be the authority for fixing the rentals and he shall take into consideration the productivity of the water sources in consultation with the Fisheries Department. The confirmation of the rentals shall be by the authorities as indicated thereunder. The learned Counsel for the petitioner by reading this clause contends that the role of the Collector is limited to the extent of fixing the rentals and nothing else. In my view a complete reading of the G.O., gives an altogether different meaning and purpose and as already stated above the said G.O., is comprehensive in nature and the scope of if it not that narrow as sought to be argued by the learned Counsel.

In view of the above facts and also in view of the observations and the findings given by their Lordships of the Apex Court on different occasions as narrated above, the only question that has to be decided is whether the Government has acted in a bona fide manner in not granting the fishing rights to the petitioner or that the action is arbitrary. In view of the facts and circumstances which have been elaborately put forth by the respondents in their counter-affidavits, it cannot be said that the Government has acted either in arbitrary manner nor any right of the petitioner is denied. The G.O. Ms. No.776 relied upon by the petitioner shows that all rights are vested with the Government only. No doubt there is scope for the petitioner to expect renewal of leasehold rights by virtue of the practice that has been adopted by the Government for the past several years, but that itself is not sufficient to invoke the principle of legitimate expectation unless and until it is substantiated that the action of the Government is unreasonable, not bona fide and is arbitrary. On the other hand the averments made in the counter-affidavits reveal that the denial of renewal of leasehold rights to the petitioner is on the ground of a larger public interest viz., developing that area as a Tourist spot in view of unique, novel and ancient surroundings around the ''tank'' which is identified as "Heritage Rocks" and all related activities were already set in motion much prior to the request put in by the petitioner before the Government seeking renewal of lease. The fact that considerable amounts have already been spent by various organisations, including the Government, cannot be ignored. The learned Counsel for the petitioner further contends that Tourism activity and fishing activity can simultaneously be operated, for which the respondents have categorically and sufficiently explained about various hazards that are involved if both the activities are simultaneously allowed to be operated.

Therefore, assuming that there is scope for the petitioner to expect that the lease would be renewed, the same cannot be termed as reasonable expectation in view of change in the policy of the Government for a reasonable and fair cause which cannot be subjected to any sort of criticism, and hence the petitioner cannot invoke the principle of legitimate expectation and plead that the action of the respondents as arbitrary.

The learned Counsel for the petitioner relied on the judgment reported in State of Kerala v. Joseph Antony, AIR 1974 SC 721, and the observations made therein at para 16 by their Lordships, with regard to the fundamental right of the citizen under Article 19(1)(g) of the Constitution to carry on their occupation, trade or business. The facts and circumstances when compared to the set of facts in the case on hand are totally different, and therefore, the observations of their Lordships in that case are not at all helpful to the petitioner in this writ petition.

In view of the above discussion and in the light of the judgments of the Apex Court, I find that the principle of reasonable expectation is not available to the petitioner in view of the change of policy of the Government which in my view is absolutely reasonable.

The writ petition, therefore, fails and is accordingly dismissed.