INSTITUTE OF LAW vs. NEERAJ SHARMA .

C.A. No. 2143 of 2007 1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2143 OF 2007 INSTITUTE OF LAW & ORS. ….APPELLANTS Vs. NEERAJ SHARMA & ORS. …RESPONDENTS J U D G M E N T V. GOPALA GOWDA, J. JUDGMENT This appeal is directed against the two separate impugned orders dated 14.2.2005 passed in Civil Writ Petition No. 6916 of 2004 by both the members of the Division Bench of the High Court of Punjab & Haryana at Chandigarh and against the order dated 26.04.2006 passed in Civil Misc. No. 5016 of 2005 and Civil Misc. Page 1 C.A. No. 2143 of 2007 2 No. 6173 of 2005. The brief facts of the case are stated hereunder:-

Sector 38-A in the Union Territory of Chandigarh at the rate of Rs.900/- per sq. yard by the administration of Union Territory of Chandigarh. The rate was fixed by the Chandigarh Administration vide its Notification No. 31/1/100-UTFI (4-2002/1823) dated 7.3.2002 issued under the Punjab Development Regulation Act, 1952 fixing the land rates for allotment to educational institutions in the Union Territory of Chandigarh. The allotment of land was JUDGMENT made in favour of appellant-Institute for 99 years on lease hold basis with the condition that the initial lease period will be 33 years and renewable for two like periods only if the lessee continues to fulfil all conditions of allotment. 3. The respondent No.1, Neeraj Sharma, filed a Writ Petition No.6916 of 2004 before the High Court of Page 2 C.A. No. 2143 of 2007 3 Punjab and Haryana at Chandigarh questioning the legality and validity of the allotment of land involved in this case urging various grounds.

Court, consisting of the then Chief Justice and a puisne Judge, by two separate but concurring orders disposed of the writ petition cancelling the allotment of land and directing the Union Territory of Chandigarh to take necessary corrective steps in the matter in consonance with the constitutional philosophy of Article 14 of the Constitution of India and further directed the Union Territory of Chandigarh to take policy decision for allotment of educational JUDGMENT institutional sites in favour of eligible persons so as to ensure that the allotments are made objectively and in a transparent manner. After delivering the separate concurring orders, however, the puisne Judge, on the post judgment script, specified that there was no agreement on certain paragraph Nos. 10, 12, 13, 14 and 15 of the order passed by the then Chief Justice. Page 3 C.A. No. 2143 of 2007 4 5. Aggrieved by the orders, the appellants filed the applications being Civil Misc. No. 5016 of 2005 and

Clause 26 of the Letters Patent, urging that the matter be referred to another Bench or the full Bench for adjudication on the points of difference. 6. The learned nominated Judge of the High Court disposed of the Civil Misc. Application Nos. 5016 of 2005 and Civil Misc. No. 6173 of 2005 vide order dated 26.4.2006, holding that there was no point of difference between the Judges of the Division Bench on the question of maintainability of the writ petition JUDGMENT and the locus standi of the writ petitioner. It was held by him that although different reasons have been recorded by the members of the Division Bench, the conclusion recorded by them on the issue of maintainability of the writ petition was the same. It was further held that both the orders reveal a common object i.e. the cancellation of the allotment of land Page 4 C.A. No. 2143 of 2007 5 made in favour of the appellant-Institute. The learned Judge has further clarified that a process of auction by necessary implication requires invitation to all

philosophy under Article 14 of the Constitution of India. Having clarified in the aforesaid terms, the learned Judge dismissed both the applications. 7. The correctness of both the separate orders dated 14.02.2005 delivered by the Division Bench and the order dated 26.4.2006 of the learned nominated Judge hearing Civil Misc. Nos. 5016 and 6173 of 2005 are under challenge in this appeal filed by the JUDGMENT appellant-Institute, raising certain substantial questions of law. 8. It was contended by Mr. Nidhesh Gupta, the learned senior counsel for the appellant-Institute that the learned nominated Judge has erred in not appreciating the separate orders passed by the two learned Judges of the Division Bench of the High Court, who have Page 5 C.A. No. 2143 of 2007 6 given separate and distinct orders, which are absolutely conflicting in nature and had no commonality at all. The learned Judge has failed to

differences of opinion between the two learned Judges and on this basis alone the matter ought to have been referred to a larger bench. 9. It was further contended that the High Court ought to have noticed that the land involved in this appeal had been allotted to the appellant-Institute after proper scrutiny and on the published and notified rates of the land with a condition for specific uti- JUDGMENT lization of the land on lease hold basis and that none of the town planning was affected by the allotment of land in question in favour of the appellant-Institute since the area of land in question is situated in the institutional area where educational institutions are functioning. Page 6 C.A. No. 2143 of 2007 7 10. It was further contended that the High Court has gravely erred in not dismissing the writ petition on the basis of lack of locus standi of the writ peti-

not allotted to him by the Administration of Union Territory of Chandigarh. 11. The High Court has further erred in holding that the appellants are influential persons, therefore, the land was allotted to them, although no basis whatso- ever has been shown in the impugned judgments. 12. The High Court has erred in not appreciating that the allotment of land in favour of the appellant-In- JUDGMENT stitute was made as per regular procedure adopted and being followed by Administration of Union Territory of Chandigarh for the last more than 50 years and there was no deviation whatsoever from the said procedure in allotting the land in favour of the appellant-Insti- tute which is also non-profitable institute. Page 7 C.A. No. 2143 of 2007 8 13. It is further contended that the land is not auctioned by the Chandigarh Administration but it has

society. Further, the allotment of land for the purposes of establishing educational institutions has restrictions on the transfer as well as usage and therefore, it is different from the general land rates ( viz. commercial and residential) which have no such restrictions and are freely marketable. 14. It is submitted that the land was allotted with certain conditions, (a) on leasehold basis initially for 33 years (b) non transferable directly or JUDGMENT indirectly and (c) usage was only for law institute. The appellant-Institute deposited 25% of the lease amount with the administration of Union Territory where upon the letter of allotment dated 22.01.2004 in respect of the land in question was issued in favour of the appellant-Institute. Page 8 C.A. No. 2143 of 2007 9 15. It is further submitted by the learned senior counsel that the writ petition dubbed as a Public Interest Litigation filed by the respondent No. 1 is

16. On the other hand, it is contended by the learned counsel on behalf of the first respondent that the respondent is a dedicated social worker having deep concern for the laws of land. 17. It is further contented that the appellants have managed to get the allotment of land which is contrary to the policy of the Union Territory of Chandigarh, the laws laid down by this Court in relation to the JUDGMENT management of public property and is in the teeth of Article 14 of the Constitution of India. 18. The respondents have further contended that the said allotted land’s market value is worth more than Rs.50/- crores but, was granted by way of lease to the appellant-Institute for an amount of Rs.2.55 crores Page 9 C.A. No. 2143 of 2007 10 only, which amounts to conferring largesse upon them which is not permissible in law and has caused huge loss to the public exchequer.

the rules for allotment of land in favour of schools and other educational institutions, no land can be allotted to any institute without an advertisement and inviting applications from the eligible persons. 20. On the basis of the aforesaid rival legal contentions urged on behalf of both the parties, the following points would arise for our consideration: (i) Whether the writ petition filed in the JUDGMENT public interest is maintainable or not and whether the writ petitioner has locus standi to file the writ petition? (ii) Whether the separate but concurring orders passed by the Division Bench of the High Court which were concurred by the nominated third Judge are legal and valid or whether the same requires interference by this Court? Page 10 C.A. No. 2143 of 2007 11 (iii) Whether the allotment order of land made in favour of the appellant-Institute is in violation of Article 14 of the

Educational Institutions (Schools),Rules etc. on a Lease-hold basis in Chandigarh Scheme, 1996”? (iv) What Order? Answer to Point No.1 21. We will first consider and answer the question of maintainability of the Writ Petition and locus standi of the writ petitioner, the respondent No. 1 herein JUDGMENT who has filed the writ petition. 22. The property in question belongs to the Union Territory of Chandigarh Administration. Under our constitutional philosophy, it is a public property and therefore, belongs to the people. Hence, the Union Territory of Chandigarh Administration is the trustee of the land whose duty is to see that the property is Page 11 C.A. No. 2143 of 2007 12 allotted in favour of eligible persons by following the procedure laid down by the Chandigarh Administration, and the same should not be allowed to

by its Audit Department itself that there is a clear loss of about Rs.139 crores to the public exchequer. 23. It has also come to our notice that the settlement of the land in question in favour of the appellant- Institute was done within a few days without following the mandatory procedure for the allotment of land. We do not doubt the intention of the appellants to set up the law institute, however, their private interest is JUDGMENT pitted against the public interest. The loss to the public exchequer could have been easily avoided had the land in question been settled by way of public auction inviting applications from eligible persons. 24. Further, as stated in the writ petition, the petitioner is a resident of State of Punjab and is also an Income Tax Payee. It has neither been shown Page 12 C.A. No. 2143 of 2007 13 nor proved by the appellants that he is a (i) meddlesome interloper (ii) that he is acting under malafide intention or (iii) that he has been set up by

with the question of locus standi of the writ petitioner, we would like to refer to certain decisions of this Court to hold that the writ petition filed by the first respondent is a public interest litigation to protect public interest. In the case of Fertilizer Corporation Kamgar Union (Regd.) Sindri & 1 Ors. v. Union of India & Ors. , the constitutional Bench of this Court has held as under:- “29-30. ……Where does the citizen stand, in the context of the democracy of judi- cial remedies, absent an ombudsman? In the face of (rare, yet real) misuse of administrative power to play ducks and drakes with the public exchequer, espe- cially where developmental expansion nec- essarily involves astronomical expendi- ture and concomitant corruption, do pub- lic bodies enjoy immunity from challenge save through the post-mortem of parlia- mentary organs. What is the role of JUDGMENT the judicial process, read in the light of 1 AIR 1981 SC 344, (1981) 1 SCC 568 Page 13 C.A. No. 2143 of 2007 14 the dynamics of legal control and corpo- rate autonomy?

48. If a citizen is no more than a way- farer or officious intervener without any interest or concern beyond what belongs to any one of the 660 million people of this country, the door of the court will not be ajar for him. But, if he belongs to an organisation which has special in- terest in the subject-matter, if he has some concern deeper than that of a busy- body, he cannot be told off at the gates, although whether the issue raised by him is justiciable may still remain to be considered. I, therefore, take the view that the present petition would clearly have been permissible under Article 226.” JUDGMENT ( emphasis supplied) Similarly, in the case of S.P. Gupta v. Union of 2 India and Anr. , this Court has categorically laid down the law in relation to locus standi as under :- “ 18……whenever there is a public wrong or public injury caused by an act or omis- sion of the State or a public authority 2 (1981) Supp SCC 87 Page 14 C.A. No. 2143 of 2007 15 which is contrary to the Constitution or the law, any member of the public acting bona fide and having sufficient interest can maintain an action for redressal of such public wrong or public injury. The strict rule of standing which insists that only a person who has suffered a specific legal injury can maintain an ac- tion for judicial redress is relaxed and a broad rule is evolved which gives standing to any member of the public who is not a mere busy body or a meddlesome interloper but who has sufficient inter- est in the proceeding. There can be no doubt that the risk of legal action against the State or a public authority by any citizen will induce the State or such public authority to act with greater responsibility and care thereby improving the administration of justice……It is also necessary to point out that if no one can have standing to maintain an action for judicial redress in respect of a public wrong or public injury, not only will the cause of legality suffer but the people not having any judicial remedy to redress such public wrong or public injury may turn to the street and in that process, the rule of law will be seriously im- paired…. JUDGMENT 19. There is also another reason why the Rule of locus standi needs to be liber- alised. Today we find that law is being increasingly used as a device of organ- ised social action for the purpose of bringing about socio-economic change. The task of national reconstruction upon which we are engaged has brought about enormous increase in developmental activ- Page 15 C.A. No. 2143 of 2007 16

JUDGMENT 20. ………If public duties are to be en- forced and social collective “diffused” rights and interests are to be protected, we have to utilise the initiative and zeal of public-minded persons and organi- sations by allowing them to move the court and act for a general or group in- terest, even though, they may not be di- Page 16 C.A. No. 2143 of 2007 17

XXX XXX XXX 23. We would, therefore, hold that any member of the public having sufficient interest can maintain an action for judi- cial redress for public injury arising from breach of public duty or from viola- tion of some provision of the Constitu- tion or the law and seek enforcement of such public duty and observance of such constitutional or legal provision……” JUDGMENT (Emphasis supplied) Further, in the case of Dattaraj Nathuji Thaware v. 3 State of Maharashtra & Ors. , this Court held that Public Interest Litigation is a weapon which has to be 3 ( 2005) 1 SCC 590 Page 17 C.A. No. 2143 of 2007 18 used with great care and circumspection. It has to be used as an effective weapon in the armoury of law for delivering social justice to citizens. The aim of

25. It is clear to us that the respondent No. 1-the writ petitioner has filed a bonafide writ petition and he has the necessary locus. There is an apparent favour shown by the Union Territory of Chandigarh in favour of the appellant-Institute which is a profit making company and it has not shown to this Court that the allotment of land in its favour is in accordance with law. Hence, we are of the view that there is a JUDGMENT strong reason to hold that the writ petition is maintainable in public interest. We completely agree with the views taken by the High Court, wherein it has rightly held that the writ petition is a Public Interest Litigation and not a Private Interest Litigation. The writ petition in question is the first petition filed by the first respondent and his first Page 18 C.A. No. 2143 of 2007 19 endeavor to knock the doors of the constitutional court to protect the public interest by issuing a writ of certiorary.

malafide intention on the part of the respondent No. 1 in filing writ petition and we agree with the view of the then Chief Justice in his order who has held that he is a public spirited person. The cause ventilated by him is definitely worth consideration and the record of the AAO (Audit) submitted to the Chandigarh Administration proves the allegations made by him. Further it is observed that His Excellency, the Governor of Punjab-cum-Administrator, Chandigarh has JUDGMENT rightly come to the conclusion in his decision that the impugned allotment of land in favour of the first appellant-Institute requires taking up of corrective steps. The Administration of the Union Territory of Chandigarh has conferred largesse on the appellant- Institute by allotting land in its favour for inadequate consideration without following procedure. Page 19 C.A. No. 2143 of 2007 20 Therefore, we hold that the writ petition filed by the first respondent is maintainable as the allotment of the land in question made in favour of the first

Answer to Point Nos. 2, 3 and 4 27. We have carefully considered and examined the question of the legality of the allotment order of the land made in favour of the appellant-Institute. It is submitted on behalf of the first respondent that the allotment of public land at throw away price or at no price to the private educational institutions with an JUDGMENT avowed object to serve the public interest is contrary to the theory of “charitable education” that serve the pious cause of literacy. The aforementioned legal issue was visualized by this Court and has lucidly laid down the law in the case of Union of India & Anr. 4 v. Jain Sabha, New Delhi& Anr. wherein the plea of charitable intentions or philanthropic goal behind the 4 (1997) 1 SCC 164 Page 20 C.A. No. 2143 of 2007 21 establishment of private educational institution was not accepted by this Court, holding that :-

JUDGMENT Page 21 C.A. No. 2143 of 2007 22 measures in this behalf in the light of the observations contained herein.” 28. Further, in another case, this Court set aside the

buildings, because, the allotment Committee had not followed any rational or reasonable criteria for inviting the applications for the allotment of land through an open advertisement. Reliance is placed on the decision of this Court in New India Public School 5 & Ors. v. HUDA and Ors. , which states as under:- “4………Therefore, the public authorities are required to make necessary specific regulations or valid guidelines to exer- cise their discretionary powers; other- wise, the salutary procedure would be by public auction. The Division Bench, therefore, has rightly pointed out that in the absence of such statutory regula- tions exercise of discretionary power to allot sites to private institutions or persons was not correct in law.” JUDGMENT 29. Further, we have to refer to the case of Akhil 6 Bhartiya Upbhokta Congress v. State of M.P. & Ors. , 5 (1996) 5 SCC 510 6 (2011) 5 SCC 29 Page 22 C.A. No. 2143 of 2007 23 wherein this Court has succinctly laid down the law after considering catena of cases of this Court with regard to allotment of public property as under :

providing different kinds of services and benefits to the people always has an element of discretion, which is required to be used in larger public interest and for public good……In our constitutional structure, no functionary of the State or public authority has an absolute or unfettered discretion. The very idea of unfettered discretion is totally incompatible with the doctrine of equality enshrined in the Constitution and is an antithesis to the concept of the rule of law. JUDGMENT XXX XXX XXX 54. In Breen v. Amalgamated Engg. Union , Lord Denning MR said: (QB p. 190, B-C) ‘… The discretion of a statutory body is never unfettered. It is a discretion which is to be exercised according to law. That means at Page 23 C.A. No. 2143 of 2007 24

55. In Laker Airways Ltd. v. Deptt. of Trade Lord Denning discussed prerogative of the Minister to give directions to Civil Aviation Authorities overruling the specific provisions in the statute in the time of war and said: (QB p. 705, F-G) ‘Seeing that the prerogative is a discretionary power to be exercised for the public good, it follows that its exercise can be examined by the courts just as any other discretionary power which is vested in the executive.’ JUDGMENT 56. This Court has long ago discarded the theory of unfettered discretion. In S.G. Jaisinghani v. Union of India , Ramaswami, J. emphasised that absence of arbitrary power is the foundation of a system governed by rule of law and observed: (AIR p. 1434, para 14) Page 24 C.A. No. 2143 of 2007 25

XXX XXX XXX JUDGMENT 59. In Kasturi Lal Lakshmi Reddy v. State of J&K , Bhagwati J. speaking for the Court observed: (SCC pp. 13-14, para 14) ‘14 . Where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be struck down as invalid……….’ Page 25 C.A. No. 2143 of 2007 26 61. The Court also referred to the reasons recorded in the orders passed by the Minister for award of dealership of petrol pumps and gas agencies and observed: ( Common Cause case , SCC p. 554, para 24) ‘24. … While Article 14 permits a reasonable classification having a rational nexus to the objective sought to be achieved, it does not permit the power to pick and choose arbitrarily out of several persons falling in the same category. A transparent and objective criteria/procedure has to be evolved so that the choice among the members belonging to the same class or category is based on reason, fair play and non-arbitrariness. It is essential to lay down as a matter of policy as to how preferences would be assigned between two persons falling in the same category….’ 62. In Shrilekha Vidyarthi v. State of U.P. the Court unequivocally rejected the argument based on the theory of absolute discretion of the administrative authorities and immunity of their action from judicial review and observed: (SCC pp. 236, 239-40) JUDGMENT ‘29 . It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test Page 26 C.A. No. 2143 of 2007 27 of reasonableness, it would be unconstitutional…….” In the light of the above mentioned cases, we have to

necessary Regulations for allotting land for the pur- pose of constructing a public educational institution should not be misused. 30. We further hold that the fundamental right to establish and run an educational institution in terms of Article 19 (1)(g) of the Constitution is subject to reasonable restrictions under Article 19(6) of the Constitution of India. Therefore, the State is within its competence to prohibit “commercialization of JUDGMENT education”. 7 31. In Modern School v. Union of India and Others (supra), this Court has held thus :- “72. So far as allotment of land by the Delhi Development Authority is con- cerned, suffice it to point out that the same has no bearing on the enforcement 7 (2004) 5 SCC 583 Page 27 C.A. No. 2143 of 2007 28

32. We, therefore, disregard the plea of charitable intention or philanthropic goal behind the establishment of the appellant educational institution as the establishment of the same does not serve any public interest and we cannot allow the allottee to make money or profiteer with the aid of the public property. 33. Further, on a careful evaluation of the JUDGMENT statutory object behind clause 18 of the “Allotment of Land to Educational Institutions (Schools)Rules Etc. on Lease Hold basis in Chandigarh Scheme, 1996” no systematic exercise has been undertaken by the Administration of Chandigarh to identify the needs of different kinds of professional institutions required to be established in Chandigarh. We thus concur with Page 28 C.A. No. 2143 of 2007 29 the reasoning of the High Court in the impugned orders that the Screening Committee comprising of senior and responsible functionaries allotted the institutional

acted in a manner which is contrary to the principles laid down by this Court in the judgments cited above in allotting the land in question in favour of the first appellant. We, therefore, conclude that the High Court has rightly held that the policy followed by the Chandigarh Administration where the allotment of land was done in favour of the appellant-Institute without giving any public notice and in the absence of a transparent policy based upon objective criteria and JUDGMENT without even examining the fact that the Union Territory of Chandigarh is already under extreme pressure of over population and even in the case of allotment of school sites by making no attempt to enforce clause 18 of the Scheme, 1996, thereby confining the said provision merely to the statute book, is arbitrary, unreasonable and unjust and is Page 29 C.A. No. 2143 of 2007 30 opposed to the provisions of Article 14 of the Constitution of India.

nominated Judge hearing the Civil Misc. Applications that although different reasons have been recorded by the members of the Division Bench in their order who have disposed of CWP No.6916 of 2004, the conclusion arrived at by them was the same. Therefore, the order passed by the then Chief Justice cannot be said to have rendered a different opinion so as to attract the applicability of Rule 31 of Chapter 4, para F, of the High Court Rules and Orders, read with clause 26 of JUDGMENT the Letters Patent. 35. A perusal of the directions contained in the orders of the High Court reveals a common effect, i.e. the allotment of the institutional plot made in favour of the appellant-Institute stands cancelled as it did not conform to the constitutional philosophy enshrined in Article 14 of the Constitution of India. This was Page 30 C.A. No. 2143 of 2007 31 also conceded by the learned nominated Judge of the High Court hearing the Civil Misc. No.5016 of 2005 and Civil Misc. No. 6173 of 2005 . Thus, there appears to

puisne Judge, who have issued directions to the Administration of the Union Territory of Chandigarh. It has rightly been pointed out by the nominated Judge that there may apparently seem to be a difference in the thought process and also the relative rigour of the expressions used by both the learned Judges, yet, it has not been possible to conclude that there was any divergence in the directions recorded in their separate views. JUDGMENT 36. We thus hold that the impugned order passed by the learned puisne Judge, which was concurred by the then Chief Justice by his separate order and the order of the third nominated Judge holding that there is no difference of opinion in the orders of the Division Page 31 C.A. No. 2143 of 2007 32 Bench are legal and valid and do not require any interference by this Court. 37. It is needless to state that certain

unwarranted and the same are expunged. 38. In view of the foregoing reasons, we do not find any reason to interfere with the impugned orders in exercise of this Court’s appellate jurisdiction. The appeal is accordingly dismissed. The order dated 16.04.2007 granting stay shall stand vacated. ………………………………………………………………………J. [SUDHANSU JYOTI MUKHOPADHAYA] JUDGMENT ………………………………………………………………………J. [V. GOPALA GOWDA] New Delhi, September 19, 2014 Page 32