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Judgment
N. Nagaresh, J.
The petitioners were Board Members of the Lakshadweep Building Development Board. They are aggrieved by the order dated 11.05.2021
ordering winding up of the Board with effect from 31.05.2021.
The petitioners state that with an objective of regulating the use of building materials including coral materials in building operation, for supply of
building materials and for undertaking Housing Projects in the Union Territory of Lakshadweep, the President promulgated Ext.P1 Lakshadweep
Building Development Board Regulations, 1997. The Board has contributed substantially in protection of unique environment of Lakshadweep. Local
people were procuring building materials from the Board. About 204 applications under BPL category and 756 applications under APL category are
pending.
While so, Ext.P4 order has been issued by the 5th respondent ordering winding up of the Board. According to the petitioners, before superseding the
Board, the Administrator is bound to issue a show-cause notice to the Board as mandated by Regulation 25 of Ext.P1 Regulation. Ext.P4 has been
issued violating Regulation 25 and without any authority of law. A Notification should be published in the Lakshadweep Gazette, which has not been
done.
Before supersession, an enquiry is contemplated, which has not been carried out. The 5th respondent has no power to issue Ext.P4. A full report
has to be placed before the Parliament in this regard, which has not been done. The inhabitants of Lakshadweep have no other source of purchase of
building materials. 956 applications for building materials are pending and there is stock of building materials also with the Board. In the circumstances,
the petitioners filed W.P.(C) No.14447/2021 seeking to reinstate the Board in its position.
Pending the writ petition, the Members of the Board passed a resolution on 11.08.2021 to close the Schemes and operations of the Board and to
wind up the Board by taking appropriate follow-up actions in this regard. The petitioners have hence filed W.P.(C) No.20233/2021 challenging the said
resolution dated 11.08.2021, marked as Ext.P8 in the writ petition.
The learned counsel for the petitioners argued that as per Regulation 25(1), if at any time the Administrator is of the opinion that the Board is unable
to perform, or has persistently made default in the performance of duties or has exceeded or abused its powers or has wilfully without sufficient cause
failed to comply with any direction issued by the Administrator, the Administrator may by notification supersede the Board. In this case, no grounds
enumerated in the Regulations exist and no notification as mandated in the Regulations has been published.
The learned counsel for the petitioners further urged that Ext.P4 order is malafide and the order is fait accompli. It is a premeditated order intended
to usurp the powers of the Board. No show-cause notice was issued to the Board or to its Members and no opportunity to explain was given.
Furthermore, Ext.P4 has been issued by the 5th respondent-Secretary. The Administrator is not competent to sub-delegate his powers under the
Regulations to the Secretary. The said legal issue is covered by the judgment in Indian National Congress (I) v. Institute of Social Welfare and
others [(2002) 5 SCC 685].
The respondents resisted the writ petition filing counter affidavit. The learned Standing Counsel for the respondents contended that the LBDB had
been supplying Granite Chips and M.Sand at subsidised rate to all the eligible applicants including APL households. The beneficiaries procure all other
building materials like cement, steel, etc., at their own cost. This leads to a situation in which the applicants are waiting for years for the subsidised
materials from LBDB and thereafter are forced to purchase the other building materials at higher cost. Delay in the supply of building materials has an
adverse impact on cost of construction due to escalation of cost of other building materials.
The system of supplying only Granite Chips and M Sand to eligible applicants is also partial only. Now, there exists Pradhan Mantri Gramin Awas
Yojana (PMGAY), a flagship program of Government of India to provide housing for the rural poor. Later, the Scheme was restructured as PMAY-G
during 2015 with the target of housing for all by 2022. The broad purpose of the scheme is to provide financial assistance to the weakest sections of
the society. Lakshadweep has achieved 100% physical progress from 2016-'17 to 2020-'21 by giving financial assistance to 45 houses under PMAY-
G.
A direction was issued to avoid any administrative difficulty that would arise in the process of winding up, in case administration decided to forgo
the process of procurement of materials as has been in practice. However, no notifications or orders have been issued by the Administration of Union
Territory of Lakshadweep for winding up of the LBDB. Review of functioning of the institutions and bodies under the Administration and taking
appropriate actions to ensure their effective functioning/ closing, is essential for good governance.
I have heard the learned counsel for the petitioners and the learned Standing Counsel for the respondents.
The thrust of the arguments made by the petitioners is on Regulation 25(1) of the Lakshadweep Building Development Board Regulations, 1997.
Regulation 25(1) of the Regulations, 1997 reads as follows:
25.(1) If at any time the Administrator is in the opinion that the Board is unable to perform, or has persistently made default in the performance of the duties imposed
on it by or under this Regulation or has exceeded or abused is powers or has wilfully or without sufficient cause, failed to comply with any direction issued by the
Administrator under Section
 27, the Administrator may, by notification supercede the Board for such period, not exceeding six months, as may be specified in the notification: Provided that the
before issuing notification under this sub section, the Administrator shall give reasonable time to the Board to Show cause why it should not be superseded and
shall consider the explanation and objections, if any, of the Board.
It is amply clear from the language of Regulation 25(1) that it is intended to apply when the Board is superseded for temporary periods, due to failure of or persistent
default of the Board to perform its functions, due to wilful non-compliance of the directions of the Administrator, or when the Board has exceeded or abused its
powers.
In the present case, the Lakshadweep Administration has revised activities of various Departments and other bodies and non-productive and
unviable activities have been identified. The Administration decided to stop such activities and to introduce alternate methods to serve people. The
administration noted that the Board causes huge financial loss to the Government Exchequer by giving untargetted subsidy for the Building materials.
The administration also took into consideration the Pradhan Mantri Awas Yojana (PMAY) which Scheme is already extended to the citizens of
Lakshadweep Islands also.
According to the Vice Chairman and Secretary of the Board, the Grant in Aid given to the Board by the Lakshadweep Administration for the past
years is as follows:
2015-'16 ₹3 Crores
2016-'17 ₹6 Crores
2017-'18 ₹5 Crores
2018-'19 ₹6 Crores
By the Grant in Aid so provided at the rate of approximately ₹6 lakhs per house in Lakshadweep, one hundred houses can be built per year, for
targetted population instead of giving subsidy to untargetted beneficiaries. In the circumstances, it was decided to wind up the Board. Though there
were some objections, the Board by majority decision, passed Ext.P8 resolution to wind up the Board.
Regulation 25(1) of the Lakshadweep Building Development Regulations, 1997 is not intended to apply in the circumstances under which a
decision to wind up was taken. The said Regulation will apply only when a temporary supersession of the Board is contemplated. The facts brought
forth justify winding up of the Board. Above all, the issue falls within the realm of executive policy.
In the circumstances, the writ petitions are without any merit and are therefore dismissed.