Modern Service Station, Hyd. vs Government of Andhra Pradesh and Another

These two writ petitions challenge G.O. Ms. Nos.32 and 33 both dated 9-4-1996 by which approval was given to the A.P. Housing Board to sell 238.33 square yards of land at M J. Road, Hyderabad to M/s. Modern Service Station and 189.33 square yards of land at M.J. Road, Hyderabad to Sri B. Dayanand each at the rate of Rs.10,000/- per square yard or at the market value of the land whichever is higher.

The background of this case is that the City Improvement Board and the Housing Board had given certain open land in various places at Hyderabad and Secunderabad during the years 1952 to 1988 on lease basis. The rent being little, the Housing Board enhanced the same. Thelease-holders filed WP No.1101 of 1986 and the High Court held on 19-12-1988 that the Board has no power to enhance the rent. In order to resolve this issue, the Board decided to sell the lands at market value and a Sub-Committee was appointed to inspect the land and submit a report to the Board. The Sub-Committee inspected the land and submitted a report which was considered by the Board at its meeting held on 1st and 2nd September, 1993. Taking into account the basic market value of the land given as a guidance for registration of the documents at the relevant time, the market value was taken at Rs.6,250/- per square yard in case of M/s. Modem Service Station and Rs.6,150/- per square yard in case of Sri B. Dayanand. The Board offered this rate to the petitioners by letters dated 27-7-1994 to Modern Service Station and 25-7-1994 to Sri B. Dayanand stating that the rate offered is valid for one month subject to revision by the Board or Government. The petitioners accepted this offer.

Section 45 of the A.P. Housing Board Act enables the Board to dispose of any land subject to any rules made by the Government. Rule 29 of the A.P. Housing Board Rules provides that the Board may sell any land only by public auction. The proviso to the said rule states that the Board may dispense with the above procedure in regard to the sale with the concurrence of the Government. Therefore, the Board made proposals to the Government by letters dated 24-1-1995 in case of B. Dayanand and 21-10-1994 in the case of Modern Service Station seeking concurrence of the Government for dispensing with the procedure for public auction and sale of the property at the rates offered by the Board. By the impugned G.Os., the Government gave the approval on condition that the property should be sold at Rs.10,000/- per square yard or at the market value whichever is higher. It may be noted that in the meanwhile, in April, 1995, the basic value for the purpose of registration of documents has been revised and this is one aspect which went into the decision-making process.

The learned Counsel for the petitioners submitted that though the Government may have power to refix the value proposed by the Board, such refixation cannot be arbitrary and must only refer to the market value on the date when the offer was made and accepted by the petitioners. He submitted that the subsequent events which took place cannot be relied upon merely because a file was kept pending for a long time. The learned Counsel pointed out that in respect of another person, who was in the same situation, a proposal was made by the Board for selling the land to the lessee on 18-7-1994 and the Government gave the approval on 19-8-1994 for the value fixed by the Board itself without any enhancement. He submitted that it is, therefore, an apparent discrimination against the petitioners who are in the same group of persons in respect of whom a decision was taken to sell the land.

The learned Counsel for the Housing Board submitted that the offer which was made was subject to revision by the Government and, therefore, when the offer is only for transfer of the property at the market value, the enhancement in the value by efflux of time must also accrue to the Board. He submitted that there cannot be any discrimination where the decision was taken at different points of time depending upon the facts of each case. The learned Counsel for the Government relying upon the decision of die Supreme Court in Mithilesh Kumar and Another Vs. Prem Behari Khare, , submitted that even ''the principle that an act of Court cannot prejudice a litigant'' had not been applied in case of delay in disposal of the appeal by die Supreme Court and consequently, such a principle cannot be applied to a case of routine administrative delay. She pointed out that these cases were considered by the Government separately and there is no particular reason for the lapse of time and the events which took place during the period when the file was pending for consideration cannot be ignored. The learned Counsel for the respondents submitted that the main factor was that die Government should be able to get the maximum value of the asset which has been transferred and hence, the decision to charge Rs. 10,000/- or the market value whichever is higher was correct and should be upheld.

The petitioners cannot question the power of the Government to fix the market value for the sale of the property. The principle is that highest value should be secured and in order to effectuate this principle, the rule provides that the property should normally be sold by public auction. The proviso to the rule enables the Government to approve the sale by private negotiations without following the principle of public auction where the holding of a public auction is either inconvenient or impossible. In the present case, due to the fact that the purchasers are long-standing lessees who had constructed buildings on open land, which alone was the subject of the lease, sale by public auction of such property would be practically unjust. It is in this background that a decision was taken to dispense with the public auction and to sell the property to the lessees at the market value. The market value had been estimated by the Board at the end of 1994 and had been accepted by the Government in case of another person who was in the same category. However, in the case of the petitioners, since the decision-making process for approving the procedure has taken some time, there is an additional factor by way of a subsequent event, namely, revision of the basic market value for the purpose of registration of documents. The fact that the market value has escalated in the meanwhile, has prompted the Government to assume that the enhanced value must be collected while approving the procedure for private transfer.

It is this decision which is questioned on two grounds : firstly on the ground that the market value cannot be varied with reference to the date of transfer and secondly on the ground that the petitioners cannot be discriminated when the market value fixed has been accepted in the case of another person. I am of the opinion that it is really the first ground that is basic to the issue. The real question is what is the value for which the property is to be transferred on the relevant date of the transfer. As I note from the correspondence, the Board has made a particular offer on a particular date which has been accepted by the petitioners and that should be the date which has to be taken as the date for fixing the price for the land which is transferred. No doubt, the offer states that it is subject to the revision by the Government, but such revision will relate to the determination of the value as on that date. Though the Government has the power to revise, that power can be exercised only with reference to that date; Otherwise, we will have a situation where the market value will be with reference to the different dates on which approval was given by the Government and as has happened in this case, if there is a long delay in processing of the file, the escalation of the prices will have an adverse affect on the purchaser for no fault of his. Though the principle that an act of Court cannot affect the parties has not been applied by the Supreme Court in the case of an appeal, I am of the opinion that the principle will equally apply to the administrative delays where a decision has to be taken with reference to a particular date and the delay in the decision-making process cannot be allowed to adversely affect the party. It would follow that the event mat happened subsequently namely escalation in the market value or the revision of the basic value for the purpose of registration of documents, have no relevance because the decision to sell has been taken already and if we were to take such factors into account, there will always be a tendency to increase the price by postponing the decision for ever. This is the arbitrariness which is inherent in that process. Such arbitrariness also leads to discrimination because in one case, the market value suggested by the Board has been accepted, whereas it has been revised in the case of the petitioners. Conceding the power of the Government to revise the market value, but confining it to the date on which the Board agreed to sell the property, all that can be said is that if the value of Rs.6,150/- per square yard or Rs.6,250/- per square yard as taken by the Board as in 1994 is found to be inadequate, it could be revised to reflect the correct market value as in 1994. But, it is not the case of the respondents that there is any inadequate estimation as on that date. It is also not the case of the respondents that this case is not a fit case for by-passing the public auction procedure and selling the property privately. In the circumstances, the Government having given concurrence to the transfer of the property to the petitioners, such concurrence has to be totally in accordance with the recommendation of the Board. I, therefore, deem it fit to modify the impugned G.Os. and direct that the concurrence of the Government for the transfer of the property will be as proposed by the Board at Rs.6,250/-per square yard in case of M/s. Modem Service Station and Rs.6,150/- per square yard in case of Sri B. Dayanand. The learned Counsel for the petitioners points out that the petitioners have already deposited the amounts as originally demanded by the Board. The transactions shall be completed on that basis within two months from the date of receipt of this order. The writ petitions are allowed. No costs.