Full Judgment Text
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PETITIONER:
PARADISE PRINTERS AND ORS. A
Vs.
RESPONDENT:
UNION TERRITORY OF CHANDIGARH AND ORS.
DATE OF JUDGMENT04/12/1987
BENCH:
SHETTY, K.J. (J)
BENCH:
SHETTY, K.J. (J)
RAY, B.C. (J)
CITATION:
1988 AIR 354 1988 SCR (2) 157
1988 SCC (1) 440 JT 1987 (4) 553
1987 SCALE (2)1235
ACT:
Reversion of policy of allotment of industrial sites
for establishment of printing presses, under the Chandigarh
(Development and Regulation) Act. 1952, and the Chandigarh
Lease Hold of Sites and Building Rules, 1973, challenged.
HEADNOTE:
%
The Chandigarh administration wanted the printing
presses, scattered all over Chandigarh in the residential
premises or small shops, to be located in an industrial
area. For that purpose, the administration earmarked forty
three sites in the industrial area Phase-lI, and invited
applications for allotment of the sites. Several persons
submitted the applications with deposits of earnest money of
Rs.1,000 in each. That was ten per cent of the premium
payable for each site. The appellants in the C.A. No. 97 of
1981, who were among the said applicants, were called upon
to deposit 25 per cent of the premium calculated at the rate
of Rs.15 per square yard. The appellants complied with that
demand. The authorities decided to draw lots as the
applicants were more than the number of the sites available.
In October 1977, lots were drawn and the appellants won. But
the authorities did not issue the letters of allotments. The
authorities had a second thought about the scheme of the
allotment of the sites. They wanted to accommodate as many
applicants as possible, which, however, could not be done in
the industrial area phase II. The authorities also came to
hold the view that for setting up the printing industry,
larger sites as earmarked earlier would not be necessary and
smaller sites would meet the requirements. Consequently, the
sites proposed in the industrial phase II were given up and
a lay-out of smaller sites in the industrial area phase I
was prepared, wherein about 131 sites were reserved for
allotment to the printing press owners.
The appellants as also the other applicants were
intimated by letters that the said sites would be allotted
at the rate of Rs.35 per square yard, and that the allotment
would be made by draw of lots on October 3, 1979. The
appellants did not participate in the proceedings. They
moved the High Court by a writ petition, challenging the
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revised policy of the allotment of the smaller sites on the
ground inter alia that they had a right to take possession
of bigger plots in respect which lots were earlier drawn in
their favour. The High Court did not give substantial relief
to the appellants, holding that there was nothing illegal in
the said revised policy since the appellants did not acquire
right to get bigger sites in the phase II, it directed that
the appellants would be liable to pay at the rate of Rs.15
and not Rs.35 per square yard. The appellants appealed to
this Court by special leave against the decision of the High
Court (C.A 97 of 1981). The respondents the Chandigarh
Administration-also moved this Court by special leave (C.A.
No. 98 of 1981) against the direction of the High Court as
to the reduced premium to be recovered from the appellants.
Dismissing both the appeals, the Court,
^
HELD: There was no substance in the appeal by the
respondents. If the applicants had been allotted sites as
per the original plan and as per the first draw in 1977,
they would have been liable to pay at the rate of Rs.15 per
square yard. In fact, the other enterpreneurs who were
allotted sites in the industrial area phase II paid premium
only at the rate of Rs.15 per square yard. Why then should
there be a higher rate payable by the appellants? They had
not asked for the sites in the industrial area phase I.
Secondly, the applicants were not responsible for the delay
in the allotment of sites. Thirdly, there was no evidence
that the Chandigarh Administration had to incur more
expenditure in forming the new sites in the phase I. The
High Court was right in directing the authorities to recover
only at the rate of Rs.15 per square yard. [161H; 162A-C]
In the case of the appeal by the appellants/owners of
the printing presses, admittedly, at the relevant stage,
there was no intimation of the allotment of the sites to the
appellants. There was no official communication to them, as
required under sub-rule (3) of Rule 8 of the Chandigarh
Lease Hold Sites and Building Rules, 1973. Such an
intimation alone could confer the right on the appellants to
obtain possession of the sites. In the absence of any such
communication, the appellants could not be held to have the
right to get the sites. [163F-G]
Emphasis was laid on the word "shall" used in sub-rule
(3) of Rule 8, which provides that when 10 per cent of the
premium has been tendered, the Estate officer shall, subject
to such directions as may be issued by the Chief
Administrator in that behalf, allot a site of the size
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applied for. There is not much force in this contention.
Generally, the use of the word "shall" prima facie indicates
that the particular provision is imperative, but that is not
so always. The meaning to be given to a word depends upon
the context in which it is used. The right of every
applicant under sub-rule (3) of Rule 8 is only a right to
have his application considered. The acceptance of the
application does not create a right for allotment of a site.
The word "shall" used in the sub-rule must be considered as
not mandatory. The . imperative meaning would defeat the
purpose of the rule. [163H; 164A-B, F]
It is not known under what provision the authorities
asked the appellants to pay 25 per cent of the premium
payable in respect of the sites even before allotment. There
was no specific assurance or representation made by the
authorities, promising to allot the sites applied for. Even
if there was any such assurance, the Court did not think
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that it would give rise to the doctrine of promissory
estoppel in the case. The authorities cannot give assurance
contrary to the statutory rules. They are bound by the rule
of procedure and cannot make any representation or promise
to allot particular sites to the applicants. Even if they
make such a promise or assurance, the doctrine of promissory
estoppel cannot be invoked to compel them to carry out the
promise or assurance which is contrary to law. [166B-D]
If there were enough plots to accommodate all the
applicants in the industrial area Phase II, it would not be
proper for the authorities to revise the policy and allot
smaller sites in phase I. But no material was placed before
the Court to come to the conclusion that there were enough
industrial plots to accommodate, possibly, all the
applicants. The authorities formed another lay-out in phase
I for want of plots in phase II. The action of the
authorities was bona fide and there was no reason to doubt
it. [166F-G]
The revised policy of the Chandigarh Administration did
not suffer from any act of arbitrariness either in
classifying the appellants as a separate group or in
considering them for allotment of smaller sites in phase I.
All the persons, who had applied for industrial sites for
establishing printing presses were grouped together. They
were considered together. They could not be accommodated in
phase II for want of enough sites. So, another lay-out was
formed in phase I. The grievance of the appellants about the
revised policy of the Chandigarh Administration to allot
smaller sites to them, being discriminatory, was not
justified. [168H; t69A-C]
160
Delhi Cloth & General Mills Ltd. v. Union of India,
Civil Appeal No. 223 of 1974, disposed of by this Court on
October 8, 1987 and Shri Ram Krishna Dalmia v. Shri Justice
S.R. Tendolkar and Ors,. [1959] SC R 279, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 97 & 98
of 1981.
From the Judgment and order dated 25.4.1980 of the
Punjab and Haryana High Court in C.W. No. 2512 of 1979.
V.M. Tarkunde and N.S. Das Behl for the Appellants.
Kapil Sibal, P. Gaur and Jitendra Sharma for the
Respondents.
The Judgment of the Court was delivered by
JAGANNATHA SHETTY, J. These appeals by special leave
are directed against the judgment dated April 25, 1980 of
the High Court of Punjab & Haryana in civil writ no. 3512 of
1979.
The revised policy of allotment of industrial sites for
the establishment of printing presses in Chandigarh has been
called into question in the aforesaid writ petition. The
printing presses are now scattered all over Chandigarh. They
are situated either in residential premises or in small
shops in different localities. The Chandigarh administration
wanted them to be located in an industrial area. For that
purpose, they earmarked forty three sites in the industrial
area phase-II. The sites are comparatively of bigger
dimensions. In 1975, the authorities invited applications
for allotment of those sites. Several persons submitted
applications. The appellants in Appeal No. 97 of 1981 were
some of them. They applied with deposit of earnest money of
Rs.1000 each. That would be ten per cent of the premium
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payable for the site. All the applications were processed
for final allotment. In the meantime, it is said that the
appellants were called upon to deposit 25 per cent of the
premium calculated at the rate of Rs. 15 per square yard.
The appellants appear to have complied with that demand
also. Since there were more applicants than the sites
available, the authorities decided to draw the lots. In
October 1977, the lots were drawn and the lady luck smiled
at the appellants. But the authorities did not issue letters
of allotment. The reason was obvious. The authorities had a
second look at the scheme of allotment of sites for printing
industries. The authorities wanted to
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accommodate as many applicants as possible. But they could
not accommodate all those applicants for want of adequate
number of sites in the industrial area phase II. The
authorities were also of the view that for setting up the
printing industry, larger sites such as those earmarked
earlier, would not be necessary and smaller sites would meet
the requirements. Consequently, the sites proposed in the
industrial area phase II were given up and a lay out of
smaller sites in the industrial area phase I was formed.
There about 131 of sites were reserved for allotment to
printing press owners.
The appellants and other like applicant were intimated
by letters that the said sites would be allotted at the rate
of RS.35 per square yard. They were also informed that the
allotment would be made by draw of lots on October 3, 1979.
The appellants however, did not participate in the
proceedings. They moved the High Court with a petition under
Art. 226 of the Constitution challenging the revised policy
for allotment of smaller sites. It was contended inter alia
that they had a right to take possession of bigger plots in
respect of which the lots were earlier drawn in their
favour. The High Court issued rule Nisi in the petition, but
allowed the authorities to draw the lots as proposed. The
High Court also permitted the appellants to deposit the
premium demanded without prejudice to their rights in the
writ petition.
That is all at the preliminary hearing of the writ
petition. In the final hearing the High Court did not give
substantial relief to the appellants. The High Court was of
the view that there was nothing illegal in the revised
policy adopted by the Chandigarh administration since the
appellants did not acquire right to get bigger sites in the
industrial area phase II. The High Court however, felt that
the appellants would be liable to pay only at the rate of .
Rs. 15 per square yard and not Rs.35 per square yard.
Accordingly a direction was issued to the authorities.
It is against this judgment that the present appeals
have been preferred. Civil appeal No. 97/81 is by the
printing press owners. Civil Appeal No. 98/81 is by the
Chandigarh administration. The Chandigarh administration is
aggrieved by the direction issued by the High Court as to
the premium to be recovered from the allottees.
We may first dispose of the appeal preferred by the
Chandigarh administration. We do not find any substance in
this appeal. If the applicants had been allotted sites as
per the original proposal and as
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per the first draw in 1977, they would have been liable to
pay only at the rate of Rs. 15 per square yard. In fact, the
other entrepreneurs who were allotted sites from industrial
area phase II paid the premium only at the rate of Rs. 15
per square yard. Why then there should be a higher rate
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payable by these persons. They did not ask for sites in the
Industrial area phase I. Their applications for sites in the
industrial area phase II were not rejected. The same
applications appear to have been considered for sites in the
industrial area phase I. Secondly, the applicants were not
responsible for the delay in the allotment of sites. The
delay was entirely due to the change of policy adopted by
the Chandigarh administration. Thirdly, there is no evidence
that the Chandigarh administration had to incur more
expenditure for forming new sites in phase I. It is,
therefore, not proper that these applicants should be asked
to pay the premium at a higher rate. The High Court, in our
opinion, was justified in directing the authorities to
recover only at rate of Rs. 15 per square yard.
Before considering the contentions urged in the appeal
of printing press owners, we may briefly refer to the
relevant provisions of the enactment bearing on the
contentions. The disposal of building sites in Chandigarh
has been regulated by the Capital of Punjab (Development and
Regulation) Act, 1952 which may be termed as "The Act". The
Chandigarh Lease Hold of Sites and Building Rules, 1973 are
the relevant rules which may be referred to as "The Rules".
Section 3 of the Act provides power to the authorities to
sell, lease or otherwise transfer any land or building
belonging to the Government. They could be disposed of by
auction, allotment or otherwise. Rule 4 provides that
Chandigarh Administration may demise sites and building on
lease for 99 years. The procedure for allotment has been
prescribed under rule 8. Rule 8 so far as it is material
provides:
"Rule 8. Lease by allotment-Procedure for-
(1)In case of allotment of site or building
the intending lessee shall make an application to
the Estate officer in Form ’A’.
(2)No application under sub-rule (l) shall be
valid unless it is accompanied by 10 per cent of
the premium as earnest money in the prescribed
form of payment.
(3)When 10 per cent of the premium has been
so tendered the Estate officer, shall, subject to
such directions
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as may be issued by the Chief Administrator in
this behalf, allot a site of the size applied for
or a building or which particulars are given in
the application and shall intimate, by registered
post the number, sector, approximate area, premium
and the rent of the site or building allotted to
the applicant.
(4)The applicant shall, unless he refuses to
accept the allotment within 30 days of the date of
the receipt of the allotment order, deposit within
that period and in the prescribed mode of payment,
further 15 per cent of the premium. The remaining
75 per cent of the premium shall be paid as
provided in Rule 12."
The scheme provided under these Rules for allotment of
sites is like this: Sub-rule (1) of Rule 8 provides for
making an application to the Estate officer for allotment of
site. The application shall be accompanied with 10 per cent
of the premium as earnest money. That amount must be
tendered to the Estate officer. The allotment of a site
shall be intimated to the applicant by registered letter
giving the particulars of number, sector, approximate area,
premium and the rent of the site or building allotted to the
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applicant. It would be open to the applicant to accept the
allotment or not. If he accepts the allotment he must
deposit 15 per cent of the premium and the remaining 75 per
cent of the premium shall be paid as provided under Rule.
12.
Relying on these provisions, it was urged that the
appellants had a right to obtain transfer of sites in
respect of which the lots were first drawn in their favour.
We are unable to accept this contention. Admittedly, at that
stage, there was no intimation of allotment of sites to the
appellants. There was no official communication to them as
required under sub-rule (3) of Rule 8. Such intimation alone
confers right on the appellants to obtain possession of the
sites. The intimation must be sent by a registered letter
giving particulars of the sites allotted and the premium
payable in respect thereof. In the absence of any such
communication, the appellants cannot be held to have the
right to get transfer of sites in their favour.
The next step in the argument was that the Estate
officer ought to have allotted the sites upon the receipt of
applications of the appellants. The reliance was placed and
emphasis was put on the word "shall" used in sub-rule (3) of
Rule 8. Sub-rule (3) of Rule 8 provides
164
that when 10 per cent of the premium has been tendered, the
Estate officer shall, subject to such directions as may be
issued by the Chief Administrator in that behalf, allot a
site of the size applied for. We do not think that there is
much force in this contention also. Generally the use of the
word "shall" prima facie indicates that the particular
provision is imperative. But that is not always so. The
meaning to be given to a word depends upon the context in
which it is used. The word takes the colour depending upon
the context. We must ask what does the word mean in its
context? We must examine why the Rule making authority has
chosen that word. After examining the purpose and scope of
the rule, we must give such meaning as to render the rule
workable in a fair manner. We must give that meaning which
would promote the purpose and object of the rule. When there
is a choice of meanings, there is a presumption that one
which produces an unjust or inconvenient result was not
intended. Let us now take a brief look at Rule 8. If sub-
rule (3) of Rule 8 is construed as mandatory, then every
person who applies for a site with earnest money must be
allotted a site. That means the administration must receive
only equal number of applications as there are sites
available for allotment. That would be impracticable. The
administration cannot restrict the number of applications to
be received when the public are notified. Secondly, the
sites are required to be disposed by auction or allotment.
If it is by allotment, it should be after considering all
applications. The sites cannot be allotted by private
arrangement. All the applications received must be
considered and if there are more applications than the
available sites, some reasonable procedure should be adopted
for consideration and elimination. In our opinion, the right
of every applicant under sub-rule (3) of Rule 8 is only the
right to have his application considered. The acceptance of
application does not create a right for allotment of a site.
The word "shall" used in sub-rule (3) must, therefore, be
considered as not mandatory. The imperative meaning would
defeat the purpose of the rule.
It was next urged that the Chandigarh administration
was estopped from revising the policy of allotment after
taking several steps for allotment of sites. The steps taken
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like demanding 25 per cent of the premium payable and
drawing the lots would lead to an assurance that they would
be allotted bigger plots. It was stated that the appellants
upon the assurance of getting bigger plots had placed orders
for heavy machinaries for their printing presses. These
averments were also made in the writ petition before the
High Court. The High Court rejected the plea of estoppel on
the ground that there was no evidence
165
of heavy investment on machinaries. Mr. V.M. Tarkunde,
learned counsel for the appellants urged that there is no
need to produce any such evidence to invoke the doctrine of
equitable estoppel. The counsel is right in this aspect. The
party invoking the doctrine of estoppel need not prove any
detriment as such. It may be sufficient if he has relied
upon the assurance made to him. This court in the Delhi
Cloth & General Mills Ltd. v. Union of India, (Civil Appeal
No. 223 of 1974 disposed of on October 8, 1987) to which one
of us was a member, said:
"It is true, that in the formative period, it
was generally said that the doctrine of promissory
estoppel cannot be invoked by the promisee unless
he has suffered ’detriment’ or ’prejudice’. It was
often said simply, that the party asserting the
estoppel must have been induced to act to his
detriment. But this has now been explained in so
many decisions all over. All that is now required
is that the party asserting the estoppel must have
acted upon the assurance given to him must have
relied upon the representation made to him. It
means, the party has changed or altered the
position by relying on the assurance or the
representation. The alteration of position by the
party is the only indispensable requirement of the
doctrine. It is not necessary to prove further any
damage, detriment or prejudice to the party
asserting the estoppel. The Court, however, would
compel the opposite party to adhere to the
representation acted upon or abstained from
acting. The entire doctrine proceeds on the
promise that it is reliance based and nothing
more."
And said:
"The concept of detriment as we now
understand is whether it appears unjust,
unreasonable or inequitable that the promisor
should be allowed to resile from his assurance or
representation having regard to what the promisee
has done or refrained from doing in reliance on
the assurance or representation."
It was further said:
"It is however, quite fundamental that the
doctrine of promissory estoppel, cannot be used to
compel the
166
public bodies or the Government to carry out the
rep resentation or promise which is contrary to
law or which is outside their authority of power."
In the first place, we do not know under what
provision the authorities asked the appellants to pay 25 per
cent of the premium payable in respect of the sites even
before allotment. Apparently that procedure appears to be
irregular with no statutory sanction. Secondly, we do not
find any specific assurance or representation made by the
authorities promising to allot the sites applied for.
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Thirdly, even if there was any such assurance, we do not
think that it would give rise to the doctrine of promissory
estoppel in the instance case. The authorities cannot give
assurance contrary to the statutory rules. The sites are
required to be disposed of by auction, allotment or sale as
per the procedure prescribed. The authorities who are bound
by the rules of procedure cannot make any representation or
promise to allot particular sites to the applicants. Even if
they make such promise or assurance, the doctrine of
promissory estoppel cannot be invoked to compel them to
carry out the promise or assurance which is contrary to law.
The next contention urged for the appellants related to
the revised policy adopted by the Chandigarh administration
for allotment of smaller sites. It was said that the sites
in phase II ought to have been allotted when there were
enough to go round the appellants. It was also said that the
other entrepreneurs who had filed applications along with
the appellants had been allotted sites in phase II and there
was no good reason to exclude the appellants for being
considered for smaller sites in phase I. The procedure
followed by the authorities has been assailed as arbitrary
and contrary to Art. 14 of the Constitution. Of course, if
there were enough plots to accommodate all the applicants in
the industrial area phase II, it would not be proper for the
authorities to revise the policy and allot smaller sites in
phase I. But no material has been placed before us to come
to the conclusion that there were enough industrial plots to
accommodate as far as possible all those applicants. It
appears from the record that the authorities for want of
plots in phase II formed another lay out in phrase I. The
action of the authorities appears to be bona fide and we
have no reason to doubt it.
This takes us to the question whether the revised
policy adopted by the Chandigarh administration to allot
smaller sites to these appellants was discriminatory and
violative of Art. 14 of the
167
Constitution. The true meaning and scope of Art. 14 has been
stated and restated in a string of decisions of this Court.
It is now well established that Art. 14 forbids class
legislation, but does not forbid reasonable classification
for the purpose of legislation. In order, however, to pass
the test of permissible classification two conditions must
be fulfilled, namely, (i) that the classification must be
founded on an intelligible differentia which distinguishes
persons or things that are grouped together from others left
out of the group; and (ii) that the differentia must have a
rational relation to the object sought to be achieved by the
statute in question. The classification may be founded on
different basis, namely, geographical or according to
objects or occupations or the like. What is necessary is
that there must be a nexus between the basis of
classification and the object of the Act under
consideration. S.R. Oas, C.J. speaking for this Court in
Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar &
others, [1959] SCR 279 has formulated the various aspects of
Art. 14 and out of them, we may refer to the following
proposition:
(a) Art. 14 condemns discrimination not only by
substantive law but by a law of procedure,
(b) Art. 14 forbids class legislation but does not
forbid classification,
(c) In permissible classification, mathematical nicety
and perfect equality are not required,
(d) The classification may be founded on different
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basis, namely, geographical or according to objects or
occupations or the like,
(e) If a law deals equally with members of a well
defined class, it is not obnoxious and it is not open
to the charge of denial of equal protection on the
ground that it has no application to other persons, and
(f) Even a single individual may form a class by
himself on account of some special circumstances or
reason applicable to him and not applicable to others.
This Court speaking through Chandrachud, CJ. in Re
The Special Courts Bill, 1978(19792 SCR 476)
reformulated in detail the propositions on Art. 14. The
following are relevant for the
168
present case and may be extracted:
(i) The constitutional command to the State to
afford equal protection of its law sets a goal not
attainable by the invention and application of a
precise formula. Therefore, classification need not be
constituted by an exact or scientific exclusion or
inclusion of persons or things. The Courts should not
insist on delusive exactness or apply doctrinaire tests
for determining the validity of classification in any
given case. Classification is justified if it is not
palpably arbitrary.
(ii) The law can make and set apart the classes
according to the needs and exigencies of the society
and as suggested by experience. It can recognise even a
degree of evil, but the classification should never be
arbitrary, artificial or evasive.
(iii) The classification must not be arbitrary but
must be rational, that is to say, it must not only be
based on some qualities or characteristics which are to
be found in all the persons grouped together and not in
others who are left out but those qualities or
characteristics must have a reasonable relation to the
object of the legislation.
There is yet another facet of Art. 14. This Court
speaking through Bhagwati, J. in E.P. Royappa v. State of
Tamil Nadu, [1974] 2 SCR 348-AIR 1974 SC 555) and in Maneka
Gandhi case (AIR 1978 SC 597) held that the basic principle
which informs both Arts. 14 and 16 is equality and
inhibition against discrimination. Equality and
arbitrariness are sworn enemies, one belongs to the rule of
law in a republic while the other to the whim and caprise of
an absolute monarch. Where an act is arbitrary, it is
implicit in it that it is unequal both according to
political logic and constitutional law and is, therefore,
violative of Art. 14. Articles 14 and 16 strike at
arbitrariness in State action and ensure fairness and
equality of treatment. This, in our opinion, is more
fundamental. Article 14 unlike other articles in Part III of
the Constitution, is an injunction against the State that it
shall not discriminate person to person unless the action is
supported by well-known principles.
There is thus no doubt or dispute about the principles.
The question is only the application of the principles to a
given case. In the present case, however, we do not find
that the revised policy of the Chandigarh administration
suffers from any act of arbitrariness
169
either in classifying the appellants as a separate group or
in considering them for allotment of smaller sites in phase
I. The appellants formed a separate class. All the persons
who have applied for industrial sites for establishing
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printing presses were grouped together. They were considered
together. They could not have been accommodated in phase II
for want of enough sites. So another lay out was formed in
phase I. We are told that most of the applicants have now
been allotted sites and they have since taken possession.
The appellants were also allotted sites in phase I. We are,
therefore. Of the opinion that the grievance of the
appellants about discrimination is not justified on the
facts and circumstances of the case.
In the result, both the appeals fail and are dismissed,
but we make no order as to costs.
S.L. Appeals dismissed.
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