Government resolutions mandating land allotment via auction cannot be applied retrospectively to defeat prior in-principle approvals.

In brief

The question

1. Whether the Revenue and Disaster Management Department Notification dated 13.03.2018, mandating auctions, applies retrospectively to an allotment process initiated in 2010

The court held

The Court allowed the writ petition and quashed the impugned order dated 09.08.2019. It held that IDCO must honor the 2010 allotment letter.

It also directed

The Court directed IDCO to execute the conveyance deed within three months of the Petitioner offering the prevailing market value (as of the date of judgment) to protect the public exchequer, subject to the payment of requisite duties and charges

01Facts

The Petitioner sought land for a hotel project. In 2010, the Orissa Industrial Infrastructural Development Corporation (IDCO) granted "in-principle" approval for Plot No. B/12/A in Mouza-Patia

p. 3

This approval was cancelled in 2013

p. 4

In a previous litigation (W.P.(C) No. 9006 of 2014), the High Court directed the Petitioner to file a representation, noting IDCO's submission that they had no objection to the allotment if the Petitioner paid the prevailing market rate

p. 5

The Petitioner filed the representation in 2019, agreeing to the market rate

p. 6

However, IDCO rejected it via an order dated 09.08.2019, citing an intervening 2018 Government Notification requiring land allotment via auction and a pending National Green Tribunal (NGT) case

p. 7

The Petitioner challenged this rejection as arbitrary and a violation of promissory estoppel

pp. 7-8

02Issues

i.1. Whether the Revenue and Disaster Management Department Notification dated 13.03.2018, mandating auctions, applies retrospectively to an allotment process initiated in 2010

p. 14 / para. 12

ii.2. Whether the doctrine of promissory estoppel and legitimate expectation precludes IDCO from resiling from its commitment to allot land upon payment of market value

p. 18 / para. 16

iii.3. Whether the pendency of NGT proceedings or Environmental issues constituted a valid legal bar to the allotment

pp. 13 / para. 10-A

03Law Applied

The court applied the maxim lex prospicit non respicit (law looks forward, not backward), affirming that legislation/notifications are presumed prospective unless expressed otherwise, as held in CIT v. Vatika Township (P) Ltd.

p. 15

Assistant Excise Commissioner v. Esthappan Cherian

p. 16

The court further applied the doctrine of Promissory Estoppel, which binds the Government to a clear promise when a party has altered their position based on that promise, as reiterated in Monnet Ispat Energy Ltd. v. Union of India

pp. 21-23

The court also noted the principle that administrative actions must not be arbitrary under Article 14, particularly when similarly situated entities are treated differently

p. 8

Provisions in the judgment · 1 · Linked ones open on LawLens

Right to Information Act, 2005 Section 22

04Reasoning

The Court found the 2019 rejection order legally flawed. First, it held that the 2018 Notification mandating auctions was prospective and could not be applied to a 2010 allotment process where the delay was "solely attributable to the opposite parties"

p. 14, 20

Second, regarding the NGT hurdle, the Court analyzed the NGT judgment dated 25.03.2022 and found there was no embargo on land allotment, only a direction for IDCO to conduct compensatory afforestation

p. 13, 20

Third, the Court determined that IDCO was bound by Promissory Estoppel because they had explicitly stated in the 2014 proceedings that they would allot the land if market rates were paid

p. 19, 21

Given the Petitioner’s readiness to pay and the evidence that adjacent plots were allotted to others for hotels, the Court deemed the refusal arbitrary and a violation of the Petitioner's legitimate expectations

p. 21, 24