Rahul Pant and Another vs State and Others

J.P. Singh, J.

OWP No. 855/2007 & CMP No. 1243/2007

OWP No. 507/2008 & CMP No. 786/2008

OWP No. 850/2007 & CMP No. 1238/2007

OWP No. 851/2007 & CMP No. 1239/2007

OWP No. 852/2007 & CMP No. 1240/2007

OWP No. 853/2007 & CMP No. 1241/2007

OWP No. 854/2007 & CMP No. 1242/2007

OWP No. 856/2007 & CMP No. 1244/2007

OWP No. 857/2007 & CMP No. 1245/2007

OWP No. 858/2007 & CMP No. 1246/2007

OWP No. 859/2007 & CMP No. 1247/2007

OWP No. 860/2007 & CMP No. 1248/2007

OWP No. 861/2007 & CMP No. 1249/2007

OWP No. 862/2007 & CMP No. 1250/2007

OWP No. 863/2007 & CMP No. 1251/2007

OWP No. 866/2007 & CMP No. 1254/2007

OWP No. 868/2007 & CMP No. 1256/2007

OWP No. 869/2007 & CMP No. 1257/2007

OWP No. 870/2007 & CMP No. 1258/2007

OWP No. 884/2007 & CMP No. 1280/2007

OWP No. 890/2007 & CMP No. 1291/2007

OWP No. 896/2007 & CMP No. 1299/2007

OWP No. 902/2007 & CMP No. 1306/2007

OWP No. 904/2007 & CMP No. 1308/2007

OWP No. 905/2007 & CMP No. 1309/2007

OWP No. 934/2007 & CMP No. 1355/2007

Allotments for 31 Shops/Halls situated at Bahu Plaza Complex, Jammu, made by the Jammu Development Authority were found to have been

made without following the procedure of Open Auction. The Jammu and Kashmir Government, in exercise of power, u/s 37 of the Jammu and

Kashmir Development Act, 1970, hereinafter to be referred as bGovernment Order No. 1126-GAD of 1997 dated 22.09.2007 to the Jammu

Development Authority to cancel the allotments and take appropriate steps for restoration of the property.

The Government Order aforementioned has been questioned in all these writ petitions which, taken up for joint consideration, are being

disposed of by this judgment.

Justifying the allotments of the Shops/Halls made in their favour, the petitioners have, inter alia, pleaded that the Government Order impugned in

the writ petitions, cancelling their allotments, was illegal and unwarranted, in that, it had been issued without complying with the statutory

requirement of issuing notice to them, in terms of the Proviso to Section 37 of the Act, before issuing directions which affect their rights, And that

the State Government had initiated action directing cancellation of the allotments, on the basis of truncated information which the Vice Chairman of,

the Jammu Development Authority, hereinafter to be referred as btaken by the Board of Directors of the Authority in its 65th meeting providing for

its earlier Board Resolution for making the allotment of Shops/Halls on First Come First Served, basis, to remain operational until all the

Shops/Halls were allotted, had not been brought to the notice of the Government by the Vice Chairman of the Authority.

According to the petitioners, the Government had cancelled the allotments to avoid embarrassment to the Chief Minister whose brother had

been allotted space at Bahu Plaza Complex Jammu, in violation of the decision of the Authority to follow the First Come First Served, rule.

The State Government has justified the impugned Government Order saying that the Board Resolution of the Authority adopted in its 65th

meeting was unwarranted, in that, it had been taken without holding any deliberations on the subject, and the fact situation, that the area had been

fully developed and the Authority would get better price for the Shops and Spaces at Bahu Plaza Complex, Jammu had not been taken into

consideration. The 65th meeting of the Board of Directors, where the post facto approval of the Board had been obtained, is stated to have been a

result of the non-application of mind by the Authority. It is further stated by the State-respondents that the Authority had not given publicity to its

policy of First Come First Served, in the matter of allotment of Shops/Spaces available at Bahu Plaza Complex so as to provide opportunity to all

those who were interested in availing the opportunity, the allotments were, therefore, illegal and improper.

The specific plea raised by the petitioners in their writ petitions that the Government had not heard them before issuing directions u/s 37 of the

Act, has not been adverted to by the State-respondents and all that has been said in this respect is that the Government had issued the impugned

order after due application of mind and in terms of the provisions of Section 37 of the Act, which, according to them, would not prejudice the

petitioners because they can project their grievance, if any, while responding to the show cause notice which has been issued by the Jammu

Development Authority to them pursuant to the Government Order in question.

I have considered the submissions of learned Counsel for the petitioners, the counsel for the Authority and learned Additional Advocate General

appearing for the State- respondents.

The first issue that falls for consideration in these petitions is as to whether the Government was obliged to hear the petitioners before issuing

directions for cancellation of their allotments?

According to the petitioners, the Government was required to hear them before issuance of the order impugned in the writ petitions as mandated

by the Proviso appearing in Section 37 of the Act.

The State Counsel, on the other hand, contends that the State Government was not required to hear the petitioners before passing the

impugned order, in that, opportunity of hearing contemplated by the Proviso would apply only when the Government passes an order prejudicial to

any person, and not in a case where only directions were issued to the Authority to pass requisite orders under the Development Act. Learned

Counsel submitted that as the Authority, in terms of the order impugned in the writ petition, had yet to pass final orders pursuant to the notices

issued to the allottees requiring them to Show Cause as to why their allotments be not cancelled, the petitioners plea that action of the State

Government in issuing directions to the Authority was violative of the principles of natural justice, was untenable, in that, issuance of notice by the

Authority to the petitioners, would satisfy the principles aforementioned.

In order to deal with the rival contentions of the parties, regard needs to be had to the provisions of Section 37 of Act, which for facility of

reference is reproduced hereunder:

(1) The Authority shall carry out such direction as may be issued to it from time to time by the Government for the efficient administration of this

Act.

(2) If in, or in connection with, the exercise of its powers and discharge of its functions by the Authority under this Act, any difference or dispute

arises between the Authority and the Government, the decision of the Government on such differences or dispute shall be final.

(3) The Government may, at any time, either on its own motion or on application made to it in this behalf, call for the records of any case disposed

of or order passed by the Authority for the purpose of satisfying itself as to the legality or propriety of any order passed or direction issued and

may pass such order or issue such direction in relation thereto as it may think fit.

Provided that the Government shall not pass an order prejudicial to any person without affording such person a reasonable opportunity of being

heard.b Plain reading of Section 37 of the Act demonstrates vesting of plenary power in the Government to call for the records of any case

disposed of, or order passed by the Authority, for the purpose of satisfying itself as to the legality or propriety of any order passed or direction

issued by the Authority and passing such order or direction as it may deem fit.

The orders passed and the directions so issued by the Government u/s 37 of the Act, are required to be carried out by the Authority in terms

of Section 37(1) of the Act.

The Proviso appended to Section 37 of the Act casts statutory obligation on the Government not to pass any order prejudicial to any person

without affording such person a reasonable opportunity of being heard.

I do not see any merit in the State Counselbsubmission that the rider aforementioned provided in the Proviso would not be applicable when the

State Government, intends only to issue directions to the Authority, and that the rider would have application only when a final order had to be

passed by the Government itself. This is so because the expression bpersonbinclude passing of directions too by the State Government, which may

be prejudicial to the person against whom such directions had been issued. The expression bany order prejudicial to any personbmay not admit of

any restrictive or literal meaning which the learned State Counsel wants the Court to ascribe to the expression bits fold, the bGovernment for

compliance by the Authority.

In order to understand the true meaning and import of the expression bof the legislature to include directions issued by it u/s 37 of the Act too,

in it, becomes explicit, on a bare reading of the provisions of Section 37(3) of the Act, in terms whereof after examining the legality or propriety of

any order passed or direction issued by the Authority, the State Government may either pass the order itself, or issue such directions in relation to

the act(s) of the Authority, as it may think fit.

Passing of orders or issuance of directions by the State Government in respect of the orders/directions issued by the Authority is contemplated

only after the Government examines the legality or propriety of the Authorityband in such view of the matter, no distinction can be contemplated in

the two expressions aforementioned appearing in Section 37(3) of the Act. Directions issued by the Government u/s 37 of the Act, if prejudicial to

the person against whom these are so issued, would certainly require issuance of prior notice to him before issuance of such directions so as to

carry out the mandate of the principle underlying the maxim audi alteram partem, which the legislature in its wisdom has adopted by enacting

Proviso to Section 37 of the Act.

Keeping the intention of the legislature in view, in this regard, the only logical interpretation which emerges from the reading of the Section as a

whole, would be that the Proviso contemplates affording of reasonable opportunity of being heard to the person who is prejudicially affected by

any order or directions issued by the State Government in exercise of powers u/s 37 of the Act.

The first contention raised by the learned State Counsel that the State Government was not required to hear the petitioners before passing the

Government order in question, therefore, fails and is, accordingly, rejected.

An ancillary issue which may require consideration before answering the main issue, is as to whether or not the directions issued by the State

Government are prejudicial to the petitioners and in this view of the matter, were they required to be heard before issuance of the Government

order?

The State Counsel, when asked to respond as to whether or not the directions issued were prejudicial to the petitioners, admitted these to be

prejudicial, and rightly so because perusal of the fifth and the penultimate paragraph of the impugned Government order leaves no manner of doubt

that the Government had, after coming to the conclusion that the allotments had been made without following the procedure of Open Auction, on

the basis of the report of the Vice Chairman of the Authority, taken a decision that the allotments being illegal and improper were required to be

cancelled. This decision of the Government certainly causes prejudice to the petitioners who had not been heard by it before taking the decision.

The Government order impugned in the petitions, even otherwise, leaves nothing with the Authority, except to pass resultant order for

cancellation of the allotments and initiation of steps for restoration of the allotted property.

The order passed by the State Government, therefore, visits the petitioners with serious civil consequences affecting the rights they had

acquired in the allotted properties after paying money therefor.

The State Government was, therefore, required to comply with the requirements of the Proviso in providing reasonable opportunity of hearing

to the petitioners before passing the impugned Government order which prejudicially affects the rights of the petitioners in the allotted

Shops/Space.

Even otherwise, before taking the decision which visits the petitioners with civil consequences regarding their rights in the allotted properties,

the State Government was required to comply with the principles of natural justice in hearing them before contemplating cancellation of their

allotments.

Another aspect which needs to be noticed is that the State Government does not appear to have been apprised by the Vice Chairman of the

Authority about the decision which Board of the Jammu Development Authority had taken in its 65th meeting, as its records, produced for the

examination of the Court during the course of hearing of the petitions, so demonstrate.

It further comes out from the records that the State Government had taken its decision directing cancellation of the allotments, without noticing

the resolution which the Board of the Authority had passed in its 65th meeting.

The stand taken by the State Government, in its response to the writ petitions, that the Authority had not given publicity to its policy decision of

serving persons on First Come First Served, basis for allotment of the premises available at Bahu Plaza Complex, Jammu and the allotments being

bad on that account, and no opportunity of hearing was required to be afforded to the petitioners, is thus not tenable, in that, neither the

Government Order indicates the State Government to have issued the order on the basis of the Authority having not given publicity to its decision

of making allotments on First Come First Served, basis, nor do the records of the State Government indicate this stand of the State Government

reflected in its pleadings. The State Government had taken the decision to cancel the petitionersballotments, only on the basis of the report of the

Vice Chairman of the Authority, as it so appears from reading of the impugned order and the records of the State Government.

The issue raised is thus answered by holding that the Government was under a statutory obligation to hear the petitioners before issuing the

impugned order directing the Jammu Development Authority to cancel the allotments of their Shops/Halls.

Thus found to have been issued in violation of the mandatory provisions of the Proviso appended to Section 37 of the Act, the Government

Order impugned in these petitions, is liable to be quashed, additionally, because it is arbitrary and in violation of the principles of natural justice,

offending Article 14 of the Constitution of India.

The rest of the issues canvassed by learned Counsel for the petitioners at the Bar that the impugned order of the State Government was even

otherwise unjustified, on merits, may not require consideration for the disposal of these petitions, which are being allowed on the sole ground that

the Government have erred in issuing the impugned Government order without providing reasonable opportunity of hearing to the petitioners in

terms of the Proviso appended to Section 37 of the Act.

For all what has been said above, these petitions, therefore, succeed and are accordingly allowed, quashing Government Order No. 1126-

GAD of 2007 dated 22.09.2007.

The State Government is, however, left free to examine the issue as to the impropriety or illegality of the allotments of the Shops/Halls at Bahu

Plaza Complex, Jammu made by the Jammu Development Authority and pass appropriate orders/directions in this behalf as warranted under law,

after affording reasonable opportunity of hearing to those who may be prejudicially affected by the order which the Government may consider

passing in this behalf.

A copy of this judgment shall be placed on each file.