Madhvi Jain and Others vs Govt. of NCT of Delhi and Others

S. Ravindra Bhat, J.—Rule. Ms. Ansuya Salwan waives notice of rule. With consent of counsel, these petitions were heard finally for disposal. All these Writ Petitions involve common question of fact; the writ petitioners seek directions to the respondents to execute documents in their favour (in the case of W.P. No. 12688/2006 and W.P. No. 324/ 2007, in favour of the members of their Association), converting lease hold industrial plots allotted in the Bawana industrial Area into free hold properties. Similar reliefs directing that instead of lease deeds, the respondent should execute conveyance deeds have been sought for.

Briefly the facts of the case are that pursuant to the directions of the Supreme Court on 31.7.1996, several thousand industrial units were ordered to be shut down as they were located in non-conforming areas (i.e. functioning in areas not designated for industrial units, according to the Delhi Master Plan). The petitioners and members of the petitioners'' association claim to have been engaged in carrying on small industrial activities in such non-conforming zones. They were perforce required to close down their units. As part of the Supreme Court''s directions, the respondents, particularly the Commissioner of Industries and the Govt. of NCT of Delhi were ordered to prepare or formulate a suitable scheme for the relocation of such industrial units.

The petitioners advert to an affidavit filed on 18.12.1996 before the Supreme Court in W.P. No. 4677/95 - MC. Mehta vs. Union of India where the agencies had referred to constitution of a committee headed by the Principal Secretary-cum-Industrial Commissioner to review the price at which land was to be offered to the relocating industries. The Court was told that the land would be developed, sold or allotted on "no, profit no loss" basis.

It is common ground between the parties that applications were filed with the respondents for allotment of industrial plots, in December, 1996. Those applications contained several particulars including income, existing location, nature of industry ect- of the applicant-owners of the relocating units, These requests for allotment were processed and the several individuals including the petitioners were informed about their success in the process. Allotment letters were issued to them.

Initially there were some controversy as to the cost; the cost indicated was Rs. 3000/- per square meter. The respondent agencies later notified an escalated cost of Rs. 4200/- per square meter, which was challenged in writ proceedings before this Court. The Court turned down the challenge and upheld the enhancement of cost. The allotment letters, inter alia, indicated the time frame within which payment had to be deposited, interest applicable for delayed payments etc. It also stated as follows:-

The allottee shall not sublet transfer/mortgage/assign otherwise part with the possession of all or any part of the said plot without the previous consent in writing of the Govt. of Delhi or any other person authorized in this behalf to cancel the allotment of the industrial plot. Provided further in the event of such permission being given by the Govt. of Delhi or any other person authorized in this behalf, the competent authority may impose such terms and conditions as it thinks fit and it shall be obligatory on the part of the allottee to comply with the same.

The petitioners contend that after payment of the entire amounts demanded (which included the enhanced cost) at the stage of handing over possession, the respondents required them to execute lease deeds in standard printed format. At that stage, they approached this Court contending as they do that DSIDC and the Commissioner of Industries are bound of offer industrial plots on free hold basis and execute a proper conveyance. It is contended by learned counsel for the petitioners Mr. Pravin Jain, and Ms. Neeru Vaid that the respondents are duty bound to adhere to the representation conveyed by them that the conveyance of free hold property would be in favour of the petitioners. The petitioner''s contentions in this regard are that at no stage the respondents indicated that the property would be lease hold. They support his submission with the circumstance that the entire cost of the land, including development charges had been recovered from the petitioners, Counsel contended that these also included the enhanced cost of acquisition which was recovered from the allottees. In these circumstances, the respondents could not have turned around at the stage of execution of the documents and taken an untenable position, that only lease hold rights would be conveyed.

The petitioners contend that the character of the land is nazul land; placed at the disposal of the respondent agency. Therefore, they cannot treat the petitioners differently from others who are also beneficiaries of nazul lands, converted into freehold. The latter category, it is contended, have benefitted from the schemes of conversion. Ms. Vaid, learned counsel supports her argument by reference to a conversion policy issued by the L&DO as well as the fact that in other areas such as Okhla Industrial Development Area, industrial plots of similar character were converted into free hold. It was submitted since objectives of both schemes are similar which is industrial development in Delhi, there cannot be two different approaches towards the terms of allotment, as that would inevitably have resulted in discrimination and violation of Article 14 of Constitution of India.

The petitioners further contend that the lease hold formats furnished to them only cover the period of 30 years after which respondents are closed with unbridled power to either extend or refuse extension, the position which hardly conducive to public authority. In this regard, it is submitted that the security afforded through free hold property can hardly be compared with lease hold property with the tenure of 30 years at the end of which, the lessee would be subject to the whims of the authorities concerned. It was further submitted that if at the end of the period, the authority just put harsh or onerous conditions, the petitioners would hardly have any choice. It was, therefore, submitted that denial of the benefit of conveyance of the property into free hold is arbitrary.

It was lastly argued that since the respondents never that the properties would be lease hold, the petitioners had a legitimate expectation that it would be free hold. In the circumstances, the counsel urged that the Court should direct the respondents to execute valid and proper conveyance deed and have them registered in accordance with the objective of the scheme, which was to fully and appropriately relocated all the petitioners, most of whom carrying on petty industrial units.

The respondents, in their returns contend that land was acquired for the specific purpose of development of industrial estates and creation of plots, under orders of the Supreme Court which had directed shutting down of industrial units that were functioning from "non-conforming" areas. Thus the scheme for allotment was a measure of rehabilitation. The Respondents point out that neither in the application nor in the allotment letters did they ever hold out any representation that the property would be conveyed on free hold basis. They further rely upon an advertisement issued on 26.11.1997 where the Government of NCT of Delhi had clearly stated that allotment would be on lease hold basis.

The Commissioner of Industries in its counter affidavit further refutes the allegation that the lease deeds are for tenure of 30 years. It was submitted on his behalf that the lease deeds is for the tenure of 99 years and that ground rent at the rate indicated in the proposed documents would be applicable for a period of 30 years, after which renewal would be on fresh terms. During the hearing, learned counsel for the respondents also pointed out the recital in the deeds which mention that the demise is in "perpetuity".

It was submitted that there can be no question of discrimination or arbitrariness, since the respondent developed the land acquired for the purpose of industrial use, as part of a relocation plan and the allotment cost of lands were on no profit no loss basis; consistent with its thinking, the agencies were of the opinion that lease hold rights alone could be conferred in the circumstances of the case.

The above discussion reveals that the parties are agreed on the essential facts, about displacement or shutting down of a large number of industrial units, functioning from non-conforming areas; the orders of the Supreme Court to relocate such industries, by developing alternative infrastructure, in the form of industrial estates, eligibility of various applicants, who are before the court, their having been allotted the plots, at a cost of Rs. 4200/- per square metres. Most of these applicant petitioners were carrying on small industrial activities. The bone of contention is whether the DSIDC and the Commissioner of Industries are duty bound to convey the plots on "free hold" basis. These agencies deny any duty or liability on that score.

The petitioners have produced copies of application forms and allotment letters. No doubt, these letters do not contain anything stating that the plots would be given on lease hold basis. Significantly, these documents also do not hold out any representation that the plots would be conveyed on freehold basis. The respondents have relied on an advertisement, published in the newspaper, in November, 1997, which clearly stated that these plots would be granted on lease hold basis. Of course, the advertisement was issued after these petitioners had applied for the plots. But the petitioner''s cannot, in the opinion of this court, distance themselves from this aspect, because the advertisement also talked of the same scheme, concerning relocation of industries, and plots in the same industrial areas.

An argument made on behalf of the petitioners was that of legitimate expectation; that they were led to believe that the lands would be allotted on freehold basis, which the court should take into consideration, and give appropriate relief. The respondents'' contention is that the petitioners do not possess a vested right to insist what should be the terms of allotment. It has been remarked, by decisions of the Supreme Court, that the doctrine of legitimate expectation is but a facet of non-arbitrariness. That doctrine (of legitimate expectation) has limited application. As remarked in Union of India and others Vs. Hindustan Development Corpn. and others, it [legitimate expectation is" not the key which unlocks the treasury of natural justice and it ought not to unlock the gates that shuts the court out of review on the merits." In P.T.R. Exports (Madras) Pvt. Ltd. and others Vs. Union of India and others, it was held that:

The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The Court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic polity, it is a settled law that the court gives a large leeway to the executive and the legislature. Granting licences for import or export is by executive or legislative policy. Government would take diverse factors for formulating the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger interest of the economy of the country.

This court, is therefore of the opinion that the petitioners cannot found their claim for grant of freehold rights, on the basis of any legitimate expectation, in the facts of this case.

The argument about the lands being nazul lands, and therefore subject to a particular regime, under the Delhi Development Act, 1957, is also, in the considered view of this court, untenable. "Nazul lands" have been defined as lands owned or vested in the Union (of India). The question of applicability of the Delhi Development Act, would arise, only when nazul lands are "placed at the disposal" of the Delhi Development Authority ("DDA"), in terms of Section 22 of that Act. Here, there is nothing to show that the lands-acquired by the Government of NCT of Delhi, in exercise of powers under the Land are nazul lands, they continue to vest in the Government which acquired it; they were handed over to the respondent agencies for development, management, and allotment to eligible applicants.

The contours of judicial review under Article 226 of the Constitution of India are well established. The court cannot, while exercising its powers, don the mantle of an executive decision maker, and decide on policy choices; sans established mala fides, adoption of unfair procedure or discrimination, the court cannot intervene because, in its determination, a different policy would be beneficial to those involved. The Supreme Court in its recent judgment, reported as Jitendra Kumar and Others Vs. State of Haryana and Another, held that:

What would be the need of the State and how an administration shall be run is within the exclusive domain of the State. The power of judicial review in such matter is very limited. The superior judiciary ordinarily would not interfere in a matter involving policy decision. We do not mean to say that the policy decision of the State is beyond the realm of judicial review. However, power of judicial review can be exercised only on the basis of known legal principles. [ Cellular Operators Association of India and Others Vs. Union of India (UOI) and Others, , Bombay Dyeing and Mfg. Co. Ltd. Vs. Bombay Environmental Action Group and Others, and Sarbananda Sonowal Vs. Union of India (UOI), ].

It would also be worth recalling that the Supreme Court, in Tata Cellular Vs. Union of India, . re-stated the law in the realm of public contracts and policies that impact upon commercial or economic matters, after reviewing its previous position on the scope of judicial review. The relevant portion of the judgment, outlining the powers and duties of the State or its agencies, it reproduced below:

(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.

If the court keeps in mind the limitations on judicial review, it would be immediately apparent that what the petitioners are really asking in these proceedings is a direction in the nature of mandamus, to the state agencies, to adopt a particular policy, in preference to the one in existence.

Though a faint argument about discrimination was made, none of the petitioners were in a position to substantiate it with any degree of specificity, in regard to the locale where freehold rights were granted, the beneficiaries and the terms. That such schemes have been adopted by other agencies, in the city of Delhi, in the opinion of the court, does not compel the respondent agencies to offer the plots on free hold basis. The respondents, while developing these plots, had to keep in perspective, the essential objective of industrial development, as well as relocation; the mode of offering leasehold rights was a choice taken consciously. That these agencies preferred this mode to another, which in the opinion of the petitioners, grants more enduring benefit to them, is no reason for this court to conclude it to be arbitrary, or based on irrelevant considerations; it is certainly not mala fide. The respondents have allotted these plots to the petitioners on perpetual lease hold basis; it is only the ground rent which is subject to revision after 30 years. There are of course certain restrictions in the lease conditions; yet, those cannot be looked into by this court; there is no challenge to them, on any credible ground.

For the above reasons, this court holds that the respondents'' action in granting leasehold rights for the industrial plots, allotted to the petitioners, is not illegal, arbitrary, or unjustified, warranting intervention under Article 226 of the Constitution of India. The petitioners have to fail. However, since the court had directed that no action should be taken toward cancellation of the leases during these proceedings, the respondents are directed to not take any precipitate action and instead, extend the time to enable the petitioners to complete formalities for execution of the lease deeds, till the end of two months from today. The petitioners are enabled to execute the documents within that period. The writ petitions are dismissed, subject to the directions in the preceding paragraph. No costs.