Case BriefsHigh Courts

Delhi High Court: Expressing that a state of indecision could not have given rise to a legitimate expectation, Yashwant Varma, J., held that, while the petitioners undisputedly were illustrious and pre-eminent exponents in their respective fields of the classical arts, the Court was not shown any material which may justify the continued retention of public premises in Delhi or that they would be unable to propagate the classical arts in any other State or city of the nation.

Background

The three petitions assail proceedings initiated by the respondents under Section 3B of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

Petitions had challenged the show cause notices pursuant to which proceedings under Section 3B of the Act were commenced. The petitioners brought on record the final orders in terms of which, eviction came to be framed against them. On 4th February, 2022 the Court passed interim orders restraining the eviction of the petitioners.

It was stated that the petitioners were artists of repute and masters in their own right in varied fields of the Indian Classical Arts. In recognition of their standing of eminence and the invaluable contribution made by them for the propagation and preservation of classical art forms, they were allotted the premises in question under a discretionary quota by the respondents.

Even after the initial term of allotment expired decades ago, petitioners continued to remain in occupation of the premises.

Further, it was admitted that although no formal orders pertaining to the retention of the said premises were made by the respondents, petitioners were permitted to retain the same. Petitioners had occupied the premises pursuant to the allotments, except for petitioner 6 who was not the original allottee and had continued to occupy the premises which were licensed in favour of his illustrious father late Ustad Sabri Khan.

Challenge

The petitioners had challenged the initiation of action by the respondents by contending that the premises had been licensed to them in terms of the policies as existing and considering the invaluable contribution made by them in the perpetuation of classical Indian art forms.

Central Government Standing Counsel, Mr Digpaul submitted that the Court must necessarily bear in mind the undisputed fact that all the petitioners have remained in the occupation of the premises for more than three decades having been inducted in possession, Further, it added that the continued occupation of the premises for periods ranging from 10 to 30 years and that too under a discretionary quota cannot possibly be countenanced or be viewed as conferring a right on the petitioner to occupy the premises in posterity.

Further, it contended that, the discretionary quota in respect of eminent artists stands restricted to 40 units. According to learned counsel, the continued retention of these units by the petitioners here also impedes the right of other artists and clearly restricts the right of the respondents to consider making fresh allotments in favour of deserving artistes.

Petitioners did not even pay the license fee which was due and they even failed to establish that they would fall within the ambit of the 2008 O.M.

Analysis and Discussion

“…the Court also deems it apposite to observe that its judgment rendered on this batch is neither liable to be viewed nor construed as the Court even momentarily doubting the eminence of the petitioners or refusing to acknowledge the invaluable contribution made by each of them for the preservation of classical art forms. They have undisputedly been indelibly connected with the preservation of our ancient culture and heritage itself. Their achievements have led to them being conferred with some of the highest civilian honours by a grateful nation.”

Legitimate Expectation

It was noted that the petitioner’s counsel with great passion and vehemence commended for accepting the submission that the legitimate expectation of the petitioners had been clearly violated by the respondents who failed to act fairly.

Keeping in mind the stature and eminence of the petitioners, it was incumbent upon the respondents to ensure that they were treated fairly and not unceremoniously asked to vacate the premises at the height of the raging pandemic.

This Court noted that the Supreme Court decisions have over a period of time held that a legitimate expectation in public law is founded on the expectation of public authorities being liable to act fairly and reasonably.

In the present matter, the allotment in a favor of the petitioners was made under a discretionary quota vesting in the respondents. That discretionary quota was itself subject to the directions issued by the Supreme Court in a public interest litigation. If one were to advert to the relevant provisions as they stood enshrined in the 1985 O.M., it becomes important to note that the same did not envisage an allotment continuing eternally. In fact, and to the contrary, Clause 2(g) thereof in unambiguous terms provided that the allotment would be for three years whereafter each allotment would fall for review. When the respondents proceeded to introduce the 2008 O.M., here again, it was clearly provided that the allotment would be for a maximum period of three years subject to a further extension being accorded in deserving cases for another equivalent term. It further stipulated that no further extensions would be considered.

The 2008 policy further postulated that only in those cases where the artists demonstrate the pursuit of his/her work during the entire period of allotment and a failure to obtain alternative accommodation would the period of maximum retention be relaxed based on the recommendation of the Selection Committee.

One of the memorandums issued by the respondents envisaged or were liable to be interpreted as conferring a right to continue in the public premises infinitely.

This Court failed to discern a legitimate expectation of the petitioners which may have been violated by the respondents.

Further, the Bench added that it failed to countenance any right arising in favour of the petitioners by virtue of the inaction on the part of the respondents. An expectation that the respondents would continue to remain passive or unassertive cannot be recognized as legitimate.

“…permissive occupation of the premises may have been of some relevance provided it was conceded to be based upon an affirmative decision taken in favour of the petitioners.”

Bench referred to the Supreme Court decision in Kerala State Beverages (M&M) Corpn. Ltd. v. P. Suresh, (2019) 9 SCC 710, wherein the notion of “substantive legitimate expectation” was explained.

High Court held that no right stood conferred upon the petitioners to occupy public premises indefinitely, the continued occupation of the premises was during the period when the respondents were engaged in undertaking comprehensive review and revision of the policy itself.

Validity of the Policy

Whether the change of policy can be said to be tainted by manifest arbitrariness?

In Court’s opinion, the decision taken by the Court was fair and objective.

As was noted by the Court in the preliminary parts of this decision, undisputedly, all the petitioners fell foul of the age criteria.

Further, it was added that, while the petitioners may be artists of eminence, in order to be recognized as being eligible to be granted the benefit under the discretionary quota, it was incumbent upon them to establish that their stay in Delhi was essential for the propagation of the classical arts and their individual disciplines. Petitioners abjectly failed to establish the said.

While the petitioners undisputedly are illustrious and pre-eminent exponents in their respective fields of the classical arts, the Court has not been shown any material which may justify the continued retention of public premises in Delhi or that they would be unable to propagate the classical arts in any other State or city of the nation.

The petitioners were served with individual notices terminating their existing allotments and it was only thereafter, that proceedings, as envisaged under Section 3B of the Act, were commenced.

It was also noted by the Court that, the petitioners remained in arrears of license fee commencing from 1987 and the amounts were in lakhs.

With regard to allotment which was never made to petitioner 6, the Court noted that he continued to occupy the public premises based on an allotment which was originally made in favour of his late and illustrious father. Hence, he had no right to occupy premises which were originally allotted to his father except for the period provided to heirs of deceased artistes.

Operative Directions

Lastly, the Court concluded stating that in order to enable all the petitioners to make alternative arrangements and be able to exit the premises with dignity, an extension of a two month grace period to hand over the vacant possession was given. [Bharati Shivaji v. Union of India, 2022 SCC OnLine Del 622, decided on 25-2-2022]


Advocates before the Court:

For the Petitioners: Mr. Prashanto Chandra Sen, Sr. Adv. with Mr. Aman Raj Gandhi, Mr. Parthasarathy Bose and Ms. Ridhima Sharma, Advs.

For the Respondents: Mr. Ajay Digpaul, CGSC with Mr. Kamal R. Digpaul, Advs. for UOI.

Case BriefsSupreme Court

Supreme Court: The bench of Ajay Rastogi and Abhay S. Oka, JJ has held that an amendment having retrospective operation which has the effect of taking away the benefit already available to the employee under the existing rule indeed would divest the employee from his vested or accrued rights and that being so, it would be held to be violative of the rights guaranteed under Articles 14 and 16 of the Constitution.

Factual Background

A Bank pension scheme was introduced by Punjab State Cooperative Agricultural Development Bank Limited, Chandigarh from 1st April 1989 and options were called from the employees and those who had given their option became member of the pension scheme and accordingly pension was continuously paid to them without fail and only in the year 2010, when the Bank failed in discharging its obligations, respondent employees approached the Punjab and Haryana High Court by filing the writ petitions. The Bank later on withdrawn the scheme of pension by deleting clause 15(ii) by an amendment dated 11th  March, 2014 which was introduced with effect from 1st April, 1989.

Analysis

Considering the facts of the case, the Court noticed that the employees who availed the benefit of pension under the scheme, indeed their rights stood vested and accrued to them and any amendment to the contrary, which has been made with retrospective operation to take away the right accrued to the retired employee under the existing rule certainly is not only violative of Article 14 but also of Article 21 of the Constitution.

Explaining the distinction between the legitimate expectation and a vested/accrued right in favour of the employees, the Court observed that the rule which classifies such employee for promotional, seniority, age of retirement purposes undoubtedly operates on those who entered service before framing of the rules but it operates in futuro. In a sense, it governs the future right of seniority, promotion or age of retirement of those who are already in service.

The Court also explained by way of the following example,

“If a person while entering into service, has a legitimate expectation that as per the then existing scheme of rules, he may be considered for promotion after certain years of qualifying service or with the age of retirement which is being prescribed under the scheme of rules but at a later stage, if there is any amendment made either in the scheme of promotion or the age of superannuation, it may alter other conditions of service such scheme of rules operates in futuro.  But at the same time, if the employee who had already been promoted or fixed in a particular pay scale, if that is being taken away by the impugned scheme of rules retrospectively, that certainly will take away the vested/accrued right of the incumbent which may not be permissible and may be violative of Article 14 and 16 of the Constitution.”

The Court also rejected the submission about the financial distress of the appellant Bank to justify the impugned amendment to say that it may not be possible to continue the grant of pension any more and observed that the rule making authority was presumed to know repercussions of the particular piece of subordinate legislation.

“Once the Bank took a conscious decision after taking permission from the Government of Punjab and Registrar, Co-operative, introduced the pension scheme with effect from 1st  April 1989, it can be presumed that the competent authority was aware of the resources from where the funds are to be created for making payments to its retirees and merely because at a later point of time, it was unable to hold financial resources at its command to its retirees, would not be justified to withdraw the scheme retrospectively detrimental to the interests of the employees who not only  became member of the  scheme but received their pension regularly at least upto the year 2010 until the dispute arose between the parties and entered into litigation.”

The Court held that the non-availability of financial resources would not be a defence available to the appellant Bank in taking away the vested rights accrued to the employees that too when it is for their socio-economic security. It is an assurance that in their old age, their periodical payment towards pension shall remain assured.

“The pension which is being paid to them is not a bounty and it is for the appellant to divert the resources from where the funds can be made available to fulfil the rights of the employees in protecting the vested rights accrued in their favour.”

[Punjab State Cooperative Agricultural Development Bank Ltd v. Registrar, Cooperative Societies, 2022 SCC OnLine SC 28, decided on 11.01.2022]


*Judgment by: Justice Ajay Rastogi


Counsels

For petitioners: Senior Advocates Gurminder Singh and K.V.Viswanathan, AORs Niharika Ahluwalia and Shalini Kaul

For respondent: Senior Advocate P.S. Patwalia and AOR Siddharth

Case BriefsSupreme Court

Supreme Court: In a case where a Project Proponent had adhered to the applicable legal framework for Environmental Clearance (EC) during the concerned period but has been left in the lurch due to changes in the EC regimes, the bench of R. Subhash Reddy and Hrishikesh Roy*, JJ has held that such Project Proponent cannot be pushed to a precipice and be made to fall. The Court said that,

“A Project Proponent is not expected to anticipate the changes in Environmental Clearance (EC) regimes, especially as a result of judicial interventions, and keep revisiting the sanctioned clearances by the competent authority or even raze down validly constructed structures. Neither can it be expected to knock the doors of an authority, not empowered at the relevant time, to process its applications. Such a scenario would render the process akin to a Sisyphean task, eternally inconclusive and never ending.”

Factual Background

The Project Proponent in the present case, had initially commenced construction on 14.5.2013 with a sanction plan of 15040.05 sq. mtrs., which, being lesser than the threshold limit of 20,000 sq. mtrs, did not require a prior EC. Thereafter, for the proposed expansion of the project, for total constructed area of 49,012 sq. mtrs., the Project Proponent approached the concerned authority on 7.11.2016 for issuance of “Proposed Development Certificate”, which is a prerequisite to apply for EC, and the said certificate was granted on 28.11.2016 for the purpose of obtaining the EC from the SEIAA. But at that stage, by virtue of the MoEFCC notification dated 9.12.2016, the concerned local authority was designated as the sanctioning authority for projects between 20,000 sq. mtrs. and 50,000 sq. mtrs. and accordingly under the changed regime the Project Proponent applied to Pimpri Chinchwad Municipal Corporation (PCMC) on 10.7.2017 and was sanctioned EC by the competent local authority, on 28.11.2017.

A Pune Resident challenged the construction and alleged that the Project Proponent had made construction without obtaining any EC. In this proceeding the NGT constituted a three Member Committee comprising the SEIAA – Maharashtra, the State PCB and the Municipal Commissioner, Pune. The Committee, after spot verification, in its Report dated 18.8.2020 noted that construction of total built up area of 22930.17 sq. mtrs. is already completed for Building Nos. A,E,B,D and the Club House.

The project of the appellant comprises six buildings of which three were constructed in full, and the super structure of the fourth building is completed and only the internal works remains to be done. In the fourth building, 40 out of the 64 apartments have already been sold.

The NGT observed that because of the invalidation of certain clauses in the 2016 notification, the EC obtained from the PCMC is unacceptable and accordingly rendered a finding that the Project Proponent had failed to obtain the valid EC. However, the NGT held that the construction already raised by the Project Proponent on the basis of EC issued by the PCMC as per the notification dated 9.12.2016should be protected.

Analysis

Holding that the Project Proponent was therefore, complying with the regime set out by the amended notification, the Court explained that when the Project Proponent initially wanted to apply for the EC it had obtained the requisite layout sanction for applying to the SEIAA. As such, it was operating well within the applicable procedure, prior to the amendment. After grant of such sanction, while the construction was underway, the amendment came about on 9.12.2016 whereby, the local authority such as the Municipal Corporation was made the competent authority to grant EC. In the changed circumstances, the Project Proponent necessarily had to apply to the PCMC as during the interregnum before the NGT’s judgment on 8.12.2017, SEIAA was not the competent authority to consider application for EC. The Project Proponent had obtained the EC from the competent authority of the relevant time i.e. the PCMC.

The Court also took note of the fact that the Committee constituted by the NGT to report on the building project did not underscore any major deviation but instead found that the Project Proponent had made substantial compliance by obtaining the EC from the competent local authority. Moreover, neither before the NGT or this Court, it was ever contended that appraisal done by the PCMC’s Environmental Cell was defective or any different from one done by SEIAA. Both processes are also similarly structured. The Court, hence, found that this may be the reason why the NGT in the impugned judgment itself protected the already made construction. However, the Project Proponent was restrained from making any further construction without obtaining clearance from the statutory EC and adhering to the environmental norms.

The Court, hence, held that the NGT rightly protected the already erected buildings.

“As the expert body exclusively occupying the environmental field, the NGT has assessed the factual circumstances to consciously lean towards protecting the already constructed structures. Nothing more need be added on this aspect.”

Applying the Doctrine of Legitimate Expectation, the Court explained that the Project Proponent can legitimately expect a certain degree of stability in the manner in which environmental regime is set and how the applications are processed. The actions of the authorities are expected to adhere to the prevalent norms only, without the element of uncertainty for the executed project.

“In the present matter the appellant has acted on the EC and made substantial investments. They cannot be pushed to a precipice and be made to fall. Doing so would be inequitable particularly when, the appellant has scrupulously adhered to the applicable legal framework during the concerned period. Moreover, third-party interests have also cropped up in the interregnum.”

The Court, hence, directed that the four constructed buildings are resultantly to be treated to be under a valid EC with all legal consequences. It was, however, made clear that if the Project Proponent wishes to construct the remaining buildings, they must secure fresh clearance from the competent authority, as per the currently applicable framework.

[Sai Baba Sales Pvt. Ltd. v. Union of India, 2021 SCC OnLine SC 1133, decided on 26.11.2021]


Counsels

For appellant: Senior Advocate Huzefa Ahmadi

For Original Applicant before NGT: Advocate Lonkar Nitin

For Ministry of Environment & Forest: Additional Solicitor General of India Aishwarya Bhati

For Government of Maharashtra: Advocate Rahul Chitnis

For the State Pollution Control Board: Advocate Mukesh Verma


*Judgment by: Justice Hrishikesh Roy

Know Thy Judge | Justice Hrishikesh Roy

Case BriefsHigh Courts

Madras High Court: V. Bhavani Subbaroyan, J., while addressing a very significant issue with respect to a divorce being sought, expressed that:

“…concept of marriage in the present generation has been taken very lightly and even for trivial issues, divorce is filed, and marriage is broken.”

Wife filed the present petition against the petition filed by the Husband before the Family Court. The husband’s petition was filed on the ground that the wife was suffering from Polycystic Ovarian Syndrome (PCOS) and was not fit for cohabitation or to give birth to a child.

Husband also filed an interlocutory application seeking for an amendment to include the provision of law from 12(1)(a) and 12(1)(a) and (c). The said petition seeking for amendment was pending before the Family Court for decision.

Petitioners Counsel, S.P. Arthi submitted that PCOS disorder is an endocrine system disorder that affects the capacity of reproduction in women, and which is totally distinct and different from claiming to be impotence.

As per the contention of counsel for the petitioner, the said claim made by the husband was absolutely incorrect and the said usage of terminology of impotency against the wife could not be sustained and on the said ground striking off the petition was sought.

Analysis, Law and Decision

Bench noted the categorical allegation placed by the husband with regard to the issue of PCOS in the wife due to which the husband sought a divorce.

High Court expressed that:

The term ‘PSOS’ by itself cannot be termed as ‘impotency’. Impotency is different and unable to give birth to a child is different, owing to various physical and mental reasons.

 On careful consideration of the contentions placed on record, it was clear that the husband did not plead the wife’s inability to give birth to a child as ‘Impotency’, but he sought annulment of marriage on the reason that there was no cohabitation and wife could not bear a child. He also submitted that the wife did not cooperate for cohabitation owing to her medical condition, as she was almost 25 days on her menstrual cycle.

Marriage being a bondage between men and women as husband and wife, it not only limits to a biological needs and desires, but also as a companion in life caring forward to the next generation through their children.

Elaborating more in respect to the present set of facts and circumstances, Bench added that Family Courts have increased in numbers to cater to the demand of intolerant couple, who are unmindful of the institution of marriage, break the relationship on unimaginable trivial reasons.

As per the pleadings placed, nowhere the husband used the word connoting impotency towards his wife. He mainly approached with the complaint that the wife could not bear a child for two reasons:

  • No Cohabitation
  • Suffering from ‘PCOS’ due to which wife suffers from improper menstrual cycle.

Legitimate Expectation?

Bench expressed that it is the husband’s legitimate expectation to live with his wife and have cohabitation and bear children and if the same is not achieved owing to some physical or mental problems, it is quite logical that either of the parties will approach the Court for seeking a divorce.

Except for some case wherein the couple are understanding and come forward with the life issue-less or even go for adoption, however, the same has to be proved by the person claiming that his or her partner is incapacitated to give or bear the child.

Petitioner/Wife could not show the husbands averments to be illusive.

Hence, High Court did not find any grounds seeking for the intervention of this Court under Article 227 of the Constitution of India with regard to striking off the petition.[ Annapoorani v. S. Ritesh,  2021 SCC OnLine Mad 1079, decided on 16-03-2021]

Case BriefsForeign Courts

Supreme Court of the Democratic Socialist Republic of Sri Lanka: A Full Judge Bench of Sisira. J. de Abrew, Murdu Fernando and Gamini Amarasekara, JJ., allowed a petition which was filed by the petitioner alleging that her Fundamental Rights guaranteed by Articles 12(1), 12(2), and 14(1)(g) of the Constitution had been violated by the Respondents.

The Petitioner who passed had the GCE (Ordinary Level) with five distinctions in the year 2000 and the GCE (Advanced Level) with two credit passes and one simple pass in the year 2003, was appointed as Management Assistant in the Department of Irrigation on contract basis with effect from 21-5-2008, thereafter her services were extended till 31-12-2014. Thereafter, the Petitioner was appointed to the post of clerk with effect from 24-10-2014 and stated that she had fulfilled the requirements stated in the said Circular. After the Petitioner assumed duties as a clerk, she was paid salaries from January 2015 to August 2015 on the salary scale stated in the said letter of appointment. However, the Petitioner’s appointment to the post of clerk was cancelled with effect from 17-11-2014 which was the date of the letter of appointment.

The Senior State Counsel (SSC), Mr. Rajiv Goonatilake contended that the Petitioner was not entitled to be appointed to the post of clerk since the said Circular had authorized to appoint Management Assistants to the permanent cadre only if they (Management Assistants) were drawing the salary scale of MN1 and in the current case Petitioner was not on the salary scale of MN1 but on the salary scale of MN2. According to the contention of the SSC, if the Petitioner was drawing a salary of Rs.13,120/-, she was entitled to be appointed to the permanent cadre. It was alleged that it is an accepted principle in law that no man is permitted to take advantage of his own mistake. This view was supported by the observation made by His Lordship Justice Sansoni in the case of Kanapathipillai v. Meerasaibo, 58 NLR page41 at page 43 wherein His Lordship had observed thus “no man is allowed to take advantage of his wrong.” The Court observed that in the present case, the Petitioner’s appointment to the post of clerk (permanent cadre) was cancelled on the basis of an alleged mistake committed by the Director-General of Irrigation who had acted on behalf of the Government.

The letter of appointment stated that this post was permanent and pensionable. Her salary was Rs.13,120/-. The Government paid her salary (Rs.13,120/-) on the basis that she had been appointed to the post of clerk for eight months and remitted Rs.870/- monthly to the W&OP. This was established by her salary slips marked as P10(i) to P10(viii). The Petitioner gave up her post of Management Assistant on contract basis when she was appointed to the new post. Presently, the Petitioner had lost her earlier post of Management Assistant and her new post of clerk.

The Court relied on certain judicial decisions considering the question of whether the Petitioner had a legitimate expectation of continuing in the permanent cadre of the Government Service. In the case of Dayaratne v. Minister of Health, (1999) 1 SLR 393 this court held that,

            “On the facts of the case, the petitioners had a legitimate expectation that they would, upon satisfying prescribed conditions, be provided with a course of training for the examination leading to the award of the certificate of competency as Assistant Medical Practitioners. The decision effecting a change of policy which destroyed the expectation of the petitioners did not depend upon considerations of public interest. In deciding upon the conflicting interests of Graduate Medical Officers and Assistant Medical Practitioners, the 1st, 2nd and 3rd respondents (the Minister, his Secretary and the Deputy Director General Administration, respectively) considered the views of the GMOA and yielded to their pressure. Neither the views of the Assistant Medical Practitioners nor those of the petitioners were sought. Hence, rights of the petitioners guaranteed by Article 12 (1) of the Constitution were violated.”

Other cases relied on by the Court were Sirimal v. Board of Directors of the Co-operative Wholesale Establishment, (2003) 2 SLR 23; Surangani Marapana v. Bank of Ceylon, (1997) 3 SLR 156 and Pinnawala v. Sri Lanka Insurance Corporation, (1997) 3 SLR 85.

The Court finally considering all the matters above held that Petitioner had a legitimate expectation to continue in the permanent cadre of Government Service until the date of her retirement.

The Court while allowing the petition held that Petitioner’s fundamental rights guaranteed by Article 12(1) and 14(1)(g) of the Constitution had been violated by the Director General of Irrigation who acted on behalf of the Government and further held that Petitioner was entitled to be in the permanent cadre of Government Service on conditions stipulated in her letter of appointment directing the respondent to pay her back wages and other remunerations from the date that she was stopped from reporting for duty along with compensation decided by the Court.[D.B.D Rajapakshe “Prashakthi” Ratmalwala v. Y. Abdul Majeed, SC. FR Application No. 418 of 2015, decided on 12-02-2021]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsSupreme Court

[NOTE: This Report highlights the important observations made by Justice Sanjiv Khanna in his dissenting opinion in the Central Vista Project case. Justice AM Khanwilkar has written the majority opinion, for himself and Justice Dinesh Maheshwari, in the 2:1 judgment that gave a go ahead to the Centra Vista Project.]

Supreme Court: The 3-judge bench of AM Khanwilkar*, Dinesh Maheshwari and Sanjiv Khanna**, JJ has, by a 2:1 verdict, has given a go ahead to the Central Vista Project. As per the Government, the Project, which plans to build a New Parliament building, is necessary for the creation of a larger working space for efficient functioning of the Parliament and for integrated administrative block for Ministries/Departments presently spread out at different locations including on rental basis.

Sanjiv Khanna, J said that he had reservations with the opinion expressed by A.M. Khanwilkar, J. on the aspects of public participation on interpretation of the statutory provisions, failure to take prior approval of the Heritage Conservation Committee and the order passed by the Expert Appraisal Committee.

Here are the key takeaways from Justice Sanjiv Khanna’s dissenting opinion

  • To ignore their salutary mandate as to the manner and nature of consultation in the participatory exercise, would be defeat the benefic objective of exercise of deliberation. Public participation to be fruitful and constructive is not to be a mechanical exercise or formality, it must comply with the least and basic requirements.

“Thus, mere uploading of the gazette notification giving the present and the proposed land use with plot numbers was not sufficient compliance, but rather an exercise violating the express as well as implied stipulations, that is, necessity and requirement to make adequate and intelligible disclosure.”

  • Intelligible and adequate disclosure was critical given the nature of the proposals which would affect the iconic and historical Central Vista. The citizenry clearly had the right to know intelligible details explaining the proposal to participate and express themselves, give suggestions and submit objections. The proposed changes, unlike policy decisions, would be largely irreversible. Physical construction or demolition once done, cannot be undone or corrected for future by repeal, amendment or modification as in case of most policies or even enactments. They have far more permanent consequences.

“It was therefore necessary for the DDA to inform and put in public domain the redevelopment plan, layouts, etc. with justification and explanatory memorandum relating to the need and necessity, with studies and reports. Of particular importance is whether by the changes, the access of the common people to the green and other areas in the Central Vista would be curtailed/restricted and the visual and integrity impact, and proposed change in use of the iconic and heritage buildings.”

  • Right to make objections and suggestions in the true sense, would include right to intelligible and adequate information regarding the proposal. Formative and constructive participation forms the very fulcrum of the legislative scheme prescribed by the Development Act and the Development Rules. Every effort must be made to effectuate and actualise the participatory rights to the maximum extent, rather than read them down as mere irregularity or dilute them as unnecessary or not mandated.
  • Deliberative democracy accentuates the right of participation in deliberation, in decision-making, and in contestation of public decision-making.
  • Adjudication by courts, structured by the legal principles of procedural fairness and deferential power of judicial review, is not a substitute for public participation before and at the decision-making stage. In a republican or representative democracy, citizens delegate the responsibility to make and execute laws to the elected government, which takes decisions on their behalf. This is unavoidable and necessary as deliberation and decision-making is more efficient in smaller groups.
  • Delegation of the power to legislate and govern to elected representatives is not meant to deny the citizenry’s right to know and be informed. Democracy, by the people, is not a right to periodical referendum; or exercise of the right to vote, and thereby choose elected representatives, express satisfaction, disappointment, approve or disapprove projected policies. Citizens’ right to know and the government’s duty to inform are embedded in democratic form of governance as well as the fundamental right to freedom of speech and expression.
  • When information is withheld/denied suspicion and doubt gain ground and the fringe and vested interest groups take advantage. This may result in social volatility. This is not to say that consultation should be open ended and indefinite, or the government must release all information, as disclosure of certain information may violate the right to privacy of individuals, cause breach of national security, impinge on confidentiality etc. Information may be abridged or even denied for larger public interest. This implies that there should be good grounds and justification to withhold information.

“Boundaries of what constitutes legitimate with holding can at times be debatable; but in the present case, there is no contestation between transparency and the right to know on the one hand, and the concerns of privacy, confidentiality and national security on the other. Further, the Development Act and Development Rules demand and require openness and transparency, and embody without exception the right to know which is implicit in the right to participate and duty to consult.”

  • While the Respondents have claimed that modifications to the Master Plan of Delhi would not result in change in character of the plan, a reading of the notice inviting tenders published by the Central Public Works Department inviting design and planning firms for the “Development / Redevelopment of Parliament Building, Common Central Secretariat and Central Vista at New Delhi” indicates that the proposed project does envisage extensive change to the landscape.

“The impact of the changes envisaged are not minor and what is envisaged is complete redevelopment of the entire Central Vista, with site development infrastructure, landscape design, engineering design and services, mobility plan etc. The expenditure to be incurred and demolition and constructions as proposed indicate the expansive and sweeping modifications/changes purposed.”

  • It would be hypothetical and incongruous to accept that L&DO had applied its mind to the objections and suggestions even before the public hearing, and therefore, the court should assume that the Central Government had considered the objections and suggestions. The letter written by the L&DO dated 6th February 2020 with reference to the background note does not reflect consideration of the objections and suggestions but inter alia states that by an earlier letter dated 4th December 2019, agenda for change of land use of eight blocks has been forwarded for placing before the technical committee of the Authority and a background note was being enclosed. Authority was requested to take necessary action accordingly. This is not a letter or communication showing consideration of the suggestions and objections.

“Final decision must be conscientiously and objectively taken by the competent authority post the hearing.”

  • The Central Government has not placed on record even a single document or minutes to show that the objections and suggestions were considered by the Central Government, albeit they place reliance on the gazette notification 20th March, 2020 which does not specifically talk about considerations of objections and suggestions but states ‘whereas the Central Government have after carefully considering all aspects of the matter, have decided to modify the Master Plan for Delhi 2021/Zonal Development Plan for Zone D and Zone C’.
  • There is violation of the Section 45 as public notice of hearing fixed on 6th and 7th of February 2020 was issued by way of public notice dated 3rd February, 2020 published on 5 th February, 2020. SMS and email were issued at the last moment. Lack of reasonable time, therefore, prevented the persons who had filed objections and given suggestions to present and appear orally state their point of view.
  • A meeting of the Committee on 23rd April 2020 through video conferencing, with the agenda “Proposed New Parliament Building at Plot No.118, New Delhi”, was held, and ‘No Objection’ was granted.
  • Pertinently, the mandate of the Committee is to engage architects and town planners to advise the government on development of the Central Vista and the Secretarial Complex. However, four independent representatives, namely, (i) President of Indian Institute of Architects; (ii) representative of Indian Institute of Architects (Northern Chapter); (iii) President of Institute of Town Planners, India; and (iv) representative of Institute of Town Planners, India, were absent and did not participate. Even the Chief Architect of the NDMC was not present. Therefore, only the representatives of the Government, the Director Delhi Division, MoHUA and Joint Secretary (Admn.) of Ministry of Environment and Forests were present.
  • Given the nature and magnitude of the entire re-development project and having given due notice to the language, as well as object and purpose behind the re-development project, undoubtedly prior approvals and permissions from the Heritage Conservation Committee were/are required and necessary.

“Where power is given to do a certain thing in a certain way, then the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden. When the statute prescribes a particular act must be done by following a particular procedure, the act must be done in that manner or not at all.”

However, Heritage Conservation Committee was never moved to secure approval/permission. No approval/permission has been taken.

  • Paragraph 1.3 states that redevelopment, engineering operations, or even additions/alterations etc. require prior permission of Heritage Conservation Committee. However for demolition, major repairs and alterations/additions to listed buildings or building precincts procedure of inviting objections and suggestions from the public shall be followed. Heritage Conservation Committee would consider the suggestions and objections. Decision of the Heritage Conservation Committee is final and binding.
  • Failure to record reasons can amount to denial of justice, as the reasons are a live link between the mind of the decision maker to the controversy in question and decision or conclusion arrived at. Therefore, requirement of a speaking order is judicially recognised as an imperative.

Directions

A) The Central Government/Authority would put on public domain on the web, intelligible and adequate information along with drawings, layout plans, with explanatory memorandum etc. within a period of 7 days.

B) Public Advertisement on the website of the Authority and the Central Government along with appropriate publication in the print media would be made within 7 days.

C) Anyone desirous of filing suggestions/objections may do so within 4 weeks from the date of publication. Objections/ suggestions can be sent by email or to the postal address which would be indicated/mentioned in the public notice.

D) The public notice would also notify the date, time and place when public hearing, which would be given by the Heritage Conservation Committee to the persons desirous of appearing before the said Committee. No adjournment or request for postponement would be entertained. However, the Heritage Conservation Committee may if required fix additional date for hearing.

E) Objections/suggestions received by the Authority along with the records of BoEH and other records would be sent to the Heritage Conservation Committee. These objections etc. would also be taken into consideration while deciding the question of approval/permission.

F) Heritage Conservation Committee would decide all contentions in accordance with the Unified Building Bye Laws and the Master Plan of Delhi.

G) Heritage Conservation Committee would be at liberty to also undertaken the public participation exercise if it feels appropriate and necessary in terms of paragraph 1.3 or other paragraphs of the Unified Building Bye Laws for consultation, hearing etc. It would also examine the dispute regarding the boundaries of the Central Vista Precincts at Rajpath.

H) The report of the Heritage Conservation Committee would be then along with the records sent to the Central Government, which would then pass an order in accordance with law and in terms of Section 11A of the Development Act and applicable Development Rules, read with the Unified Building Bye-laws.

I) Heritage Conservation Committee would also simultaneously examine the issue of grant of prior permission/approval in respect of building/permit of new parliament on Plot No. 118. However, its final decision or outcome will be communicated to the local body viz., NDMC, after and only if, the modifications in the master plan were notified.

J) Heritage Conservation Committee would pass a speaking order setting out reasons for the conclusions.

Further, the order of the EAC dated 22nd April,2020 and the environment clearance by the Ministry of Environment and Forest dated 17th June,2020 was set aside, and EAC has been requested to decide the question on environment clearance within a period of 30 days from the date copy of this order received, without awaiting the decision on the question of change/modification of land use. Speaking and reasoned order would be passed.

[Rajiv Suri v. Delhi Development Authority,  2021 SCC OnLine SC 7, decided on 05.01.2020]


*Justice AM Khanwilkar has penned the majority opinion. Read more about him here

** Justice Sanjiv Khanna has penned the dissenting opinion. 

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Here’s why the Supreme Court gave a go-ahead to Central Vista Project in a 2:1 verdict [Read majority opinion]

Case BriefsSupreme Court

[NOTE: This Report highlights the important observations made by Justice AM Khaniwlkar while writing the majority opinion in the Central Vista Project case, for himself and Justice Dinesh Maheshwari. Justice Sanjiv Khanna has given the dissenting opinion in the case]

Supreme Court: The 3-judge bench of AM Khanwilkar*, Dinesh Maheshwari and Sanjiv Khanna**, JJ has, by a 2:1 verdict, has given a go ahead to the Central Vista Project. As per the Government, the Project, which plans to build a New Parliament building, is necessary for the creation of a larger working space for efficient functioning of the Parliament and for integrated administrative block for Ministries/Departments presently spread out at different locations including on rental basis.

“We are compelled to wonder if we, in the absence of a legal mandate, can dictate the government to desist from spending money on one project and instead use it for something else, or if we can ask the government to run their offices only from areas decided by this Court, or if we can question the wisdom of the government in focusing on a particular direction of development. We are equally compelled to wonder if we can jump to put a full stop on execution of policy matters in the first instance without a demonstration of irreparable loss or urgent necessity, or if we can guide the government on moral or ethical matters without any legal basis. In light of the settled law, we should be loath to venture into these areas.”

Here are the key highlights from the majority opinion: 

DENIAL OF NATURAL JUSTICE

The petitioners have not been able to demonstrate any case of denial of natural justice. For, the prescribed procedure, both by statute and convention, seems to have substantially been followed. In fact, in circumstances when challenge is raised to a project of immense national importance which is not limited to any particular city or state or intended to give benefit to any private individual, impediments cannot be induced by reading in requirements which are not mandated by law.

“The principle of “Rule of Law” requires rule in accordance with the law as it is, and not in accordance with an individual’s subjective understanding of law. Substantial justice is the core of any such inquiry and it is in this direction that processes are to be understood and adjudicated upon. The Court needs to be conscious of all aspects in a non-adversarial public interest litigation where public interest is the sole premise of enquiry.”

QUASI-LEGISLATIVE FUNCTION

It is no doubt true that the classification of legislative or administrative functions can no more be done like a pigeon-holes classification. It was because of this reason that the phrases “quasi-legislative” and “quasi-administrative” have made inroads in the modern administrative law. In fact, in practical parlance, even quasi-legislative functions are treated as falling under the wider ambit of administrative functions.

In the present case, what is being modified is the master/zonal plan already in existence. True that is not an action that creates new zones or new parameters. However, the underlying nature of activity being performed here is of town planning and change in land use of one or couple of plots in a given zone. It is a modification which will provide direction to all future development of the subject plots.

“… there is a distinction between modifying the use of land in a given zone and demarcating fresh boundaries for various zones of land. The change of usage of Government land is of a general nature. It is certainly not a purely routine administrative work. That means that the function of change in land use has a quasi-legislative hue to it.”

EFFECT OF SOME MEMBERS NOT JOINING THE MEETING

The notice of meeting was communicated to all the members on 16.4.2020 and they were asked to make the requisite arrangements in advance. Furthermore, the members who lacked in technical know-how to interact virtually were given the option of necessary assistance for the purpose of meeting. In such a scenario, it is inconceivable to say that the members were deliberately kept out of the meeting.

“If they failed to join the meeting for reasons best known to them, the outcome of the meeting cannot be assailed by alleging motives. Further, the minutes of meeting were mailed to all the members on 30.4.2020 and even then, no word of discord or dissatisfaction was received from any of these members. It must follow that their absence cannot be equated to an irregularity, much less an illegality. The Committee was not expected to sit over the proposal merely because some members were unwilling to join virtually despite all arrangements being in place. Indisputably, none of the absent members is before us in this case and we have no occasion whatsoever to consider them as being aggrieved in any manner, for no grievance at their instance has come on record.”

NON-APPLICATION OF MIND

When petitioners allege illegality on a ground such as absence of reasons in a pure administrative process, they must bear the burden to demonstrate the requirement of reasons in the first place. It is not as if reasons are mandatory in all decisions.”

In cases when the statute itself provides for an express requirement of a reasoned order, it is understandable that absence of reasons would be a violation of a legal requirement and thus, illegal. However, in cases when there is no express requirement of reasons, the ulterior effect of absence of reasons on the final decision cannot be sealed in a straightjacketed manner. Such cases need to be examined from a broad perspective in the light of overall circumstances.

In cases where individual rights are affected by the decision, an opportunity of being heard and application of mind couched in the form of reasons form part of the jurisprudential doctrine. Such cases need to be distinguished from cases which do not impinge upon individual rights and involve ordinary administrative processes. For, similar standards cannot be deployed to decide both these cases.

“What we are dealing with is the opinion of an advisory (administrative) body which is appointed by the same Government which calls for its advice and not to adjudicate upon rights of individuals. Even if we assume that the no objection by an advisory body would have the effect of affecting the objectivity of the final decision, the fact remains that it does not take the final decision. It is meant to invoke its expertise in light of the subject proposal placed before it and advise the Government as regards the feasibility of the proposed development in connection with the existing central vista region. The final decision would be that of the competent authority of the concerned department.”

Not being a statutory body, an advisory body’s opinion has no finality attached to it nor could be appealed against to superior forum.

“Undeniably, in the process of decision-making, the Government may choose to consult as many bodies and agencies as it desires and opinion of every such advisory body cannot be assailed by supplying fictional standards without keeping in view the nature of body and context of advice.”

The DUAC was sitting in an advisory capacity so as to advise the Government on aesthetics of a development/re-development project. It is not meant to analyse any other aspect of the project. In that, it is expected to apply its mind to those aspects of the project which may have a bearing on aesthetics. The Minutes succinctly reveal that complete information relating to designs was placed before the DUAC and it applied itself on an array of factors including parking, plantation of trees, traffic, appearance of facade, ventilation, landscape, building equipment etc. so far as the same are relevant for its enquiry, to fulfil its advisory duties.

“…the allegation of arbitrariness is easy to raise in a theoretical discourse, but hard to establish in a Court of law where unsubstantiated considerations have no place.”

LEGITIMATE EXPECTATION

Legitimate expectations may arise in cases when the decision-making body deviates from a set standard, thereby impinging upon the rights of those who are subjected to the decision.

“In the present case, had the project proponent entirely skipped the step of consultation with CVC, enforcing such consultation by operation of legitimate expectation may have come into play.”

ENVIRONMENTAL CLEARANCE

Once an expert committee has duly applied its mind to an application for EC, any challenge to its decision has to be based on concrete material which reveals total absence of mind. Absent that material, due deference must be shown to the decisions of experts.

“The facts of the case do not reveal any deliberate concealment of fact/information from the EAC or supply of any misinformation.”

TIMELINE OF THE PROJECT

Once the project proponent frames a conscious timeline of completion of various projects which broadly fall under the umbrella of a common vision for the region, the same cannot be disturbed on the notion that the whole vision should go through the regulatory compliances at once. That would defeat the whole purpose of advance planning of a development activity. Planning involves in-depth consideration of a wide range of concerns including regulatory requirements. The decision to attribute different timelines and purposes to different projects is a domain of planning and the Court cannot readily attribute the label of mala fides to such informed decision until and unless there is a clear attempt to evade the requirements of law.

SELECTION/APPOINTMENT OF CONSULTANT

In this case, the process of tender was used to select the consultant wherein uniform conditions were prescribed for all the participants who were eligible and free to participate in the process. Upon submission of bids, their applications were analysed on pre-determined set of objective parameters which were duly notified to all the participants beforehand. The petitioners have not shown that the conditions of tender were deliberately crafted in a manner to make them suitable for a particular participant. Nor, have they shown that the conditions were violative of any mandatory requirement.

Hence,

“Just because the Government has followed a particular method of selection/appointment of the Consultant for the stated project and another one would have been a better option cannot be the basis to quash the appointment already made after following a fair procedure consequent to inviting tenders from eligible persons similarly placed.”

PUBLIC TRUST DOCTRINE

“For proving a violation of public trust, it falls upon the petitioners to establish that public resources are being squandered and used or planned to be used in a manner which cannot be termed as beneficial public use. As for the respondents, it falls upon them to establish that the proposed use of public resources is aligned in the direction of beneficial use and in public interest.”

In the present case, the respondents have elaborately demonstrated the imminent need for the project. Also, the change in land use does not result into any deprivation of recreational spaces. On the contrary, the changes would result into optimisation and greater access to open spaces including entail in assets creation.

AVAILABILITY OF INFORMATION IN PUBLIC DOMAIN

Evidently, all relevant documents from the stage of expression of need for the project by Speaker of Lok Sabha to appointment of consultant, issuance of public notice, conduct of public hearing, final notification for change in land use and minutes of meetings of CVC, DUAC and EAC were placed in public domain. The petitioners have not pointed out a single document which formed a part of the process and was not placed in public domain.

“Be that as it may, it is also relevant to note that mere absence of information does not vitiate an administrative process, that too in toto.”

The real effect of absence of information in public domain has to be tested on the anvil of actual prejudice on public’s ability to participate in the decision-making process, wherever provided for. It must result into a denial of legally enforceable right. In the present case, none of the persons who participated in raising objections to change in land use or those who sent representations to DUAC and EAC have come forward to contend that they could not access information, thereby rendering them incapable of participating in the process or in raising informed objections.

CONCLUSION

(i) There is no infirmity in the grant of:

(a) “No Objection” by the Central Vista Committee (CVC);

(b) “Approval” by the Delhi Urban Art Commission (DUAC) as per the DUAC Act, 1973; and

(c) “Prior approval” by the Heritage Conservation Committee (HCC) under clause 1.12 of the Building Byelaws for Delhi, 2016.

(ii) the exercise of power by the Central Government under Section 11A (2) of the DDA Act, 1957 is just and proper.

(iii) The recommendation of Environmental Clearance (EC) by Expert Appraisal Committee (EAC) and grant thereof by MoEF is just, proper and in accordance with law including the 2006 Notification.

(iv) The project proponent may set up smog tower(s) of adequate capacity, as being integral part of the new Parliament building project; and additionally, use smog guns at the construction site throughout the construction phase is in progress on the site.

(v) MoEF to consider issuing similar general directions regarding installation of adequate capacity of smog tower(s) as integral part in all future major development projects whilst granting development permissions, particularly in cities with bad track record of air quality – be it relating to Government buildings, townships or other private projects of similar scale and magnitude, including to use smog guns during the construction activity of the Project is in progress.

(vi) The stage of prior permission under clause 1.3 of the Building Bye Laws of the Heritage Conservation Committee (HCC), is the stage of actual development/redevelopment etc. work is to commence and not the incipient stage of planning and formalisation of the Project. Accordingly, the DDA shall obtain aforementioned prior permission of the designated Authority before actually starting any development/redevelopment work on the stated plots/structures/precincts governed by the heritage laws including on plot No. 118, if already not obtained.

(vii) The selection/appointment of Consultant, in light of the limited examination warranted in this case, is held to be just and proper.

[Rajiv SUri v. Delhi Development Authority,  2021 SCC OnLine SC 7, decided on 05.01.2020]


*Justice AM Khanwilkar has penned the majority opinion 

Know Thy Judge| Justice AM Khanwilkar


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‘Citizens have the right to know and participate in deliberation and decision making’; Justice Khanna dissents in 2:1 verdict clearing the Central Vista Project

Case BriefsSupreme Court

Supreme Court: In the case where the Jharkhand Government had failed to give effect to the Industrial Policy and subsequent Notification that promised 50% rebate to Industrial Units on electricity duty, the Dr. DY Chandrachud* and Indu Malhotra, JJ took the opportunity to explain the evolution and application of the doctrines of Promissory Estoppel and Legitimate Expectations over the years.

Here is a summary of the discussion by the Court:

Origin and evolution of Doctrine of Promissory Estoppel

Under English Law, judicial decisions have in the past postulated that the doctrine of promissory estoppel cannot be used as a ‘sword’, to give rise to a cause of action for the enforcement of a promise lacking any consideration. Its use in those decisions has been limited as a ‘shield’, where the promisor is estopped from claiming enforcement of its strict legal rights, when a representation by words or conduct has been made to suspend such rights.

However, in the absence of a definitive pronouncement by the House of Lords holding that promissory estoppel can be a cause of action, a difficulty was expressed in stating with certainty that English Law has evolved from the traditional approach of treating promissory estoppel as a ‘shield’ instead of a ‘sword’. By contrast, the law in the United States and Australia is less restrictive in this regard.

India adopted a more expansive statement of the doctrine in order to remedy the injustice being done to a party who has relied on a promise.

In Motilal Padampat Sagar Mills Co. Ltd. v State of UP, (1979) 2 SCC 409, the Supreme Court viewed promissory estoppel as a principle in equity, which was not hampered by the doctrine of consideration as was the case under English Law. The judgment that was penned by Justice P N Bhagwati stated:

“… having regard to the general opprobrium to which the doctrine of consideration has been subjected by eminent jurists, we need not be unduly anxious to project this doctrine against assault or erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice…We do not see any valid reason why promissory estoppel should not be allowed to found a cause of action where, in order to satisfy the equity, it is necessary to do so.”

Doctrine of Legitimate Expectations vis-à-vis Promissory Estoppel

Under English Law, the doctrine of promissory estoppel has developed parallel to the doctrine of legitimate expectations. The doctrine of legitimate expectation initially developed in the context of public law as an analogy to the doctrine of promissory estoppel found in private law. However, since then, English Law has distinguished between the doctrines of promissory estoppel and legitimate expectation as distinct remedies under private law and public law, respectively.

The doctrine of legitimate expectations is founded on the principles of fairness in government dealings. It comes into play if a public body leads an individual to believe that they will be a recipient of a substantive benefit.”

Another difference between the doctrines of promissory estoppel and legitimate expectation under English Law is that the latter can constitute a cause of action. The scope of the doctrine of legitimate expectation is wider than promissory estoppel because it not only takes into consideration a promise made by a public body but also official practice, as well.

Under the doctrine of promissory estoppel, there may be a requirement to show a detriment suffered by a party due to the reliance placed on the promise. Although typically it is sufficient to show that the promisee has altered its position by placing reliance on the promise, the fact that no prejudice has been caused to the promisee may be relevant to hold that it would not be “inequitable” for the promisor to go back on their promise. However, no such requirement is present under the doctrine of legitimate expectation.

Further, while the basis of the doctrine of promissory estoppel in private law is a promise made between two parties, the basis of the doctrine of legitimate expectation in public law is premised on the principles of fairness and non-arbitrariness surrounding the conduct of public authorities.

“This is not to suggest that the doctrine of promissory estoppel has no application in circumstances when a State entity has entered into a private contract with another private party. Rather, in English law, it is inapplicable in circumstances when the State has made representation to a private party, in furtherance of its public functions.”

Indian Law and the doctrine of legitimate expectations

Under Indian Law, there is often a conflation between the doctrines of promissory estoppel and legitimate expectations. While this doctrinal confusion has the unfortunate consequence of making the law unclear, citizens have been the victims. Representations by public authorities need to be held to scrupulous standards, since citizens continue to live their lives based on the trust they repose in the State. In the commercial world also, certainty and consistency are essential to planning the affairs of business.

“When public authorities fail to adhere to their representations without providing an adequate reason to the citizens for this failure, it violates the trust reposed by citizens in the State. The generation of a business-friendly climate for investment and trade is conditioned by the faith which can be reposed in government to fulfil the expectations which it generates.”

In National Buildings Construction Corporation vs S. Raghunathan, (1998) 7 SCC 66, a three Judge bench, speaking through Justice S. Saghir Ahmad, held that:

“The doctrine of “legitimate expectation” has its genesis in the field of administrative law. The Government and its departments, in administering the affairs of the country, are expected to honour their statements of policy or intention and treat the citizens with full personal consideration without any iota of abuse of discretion. The policy statements cannot be disregarded unfairly or applied selectively. Unfairness in the form of unreasonableness is akin to violation of natural justice. It was in this context that the doctrine of “legitimate expectation” was evolved which has today become a source of substantive as well as procedural rights. But claims based on “legitimate expectation” have been held to require reliance on representations and resulting detriment to the claimant in the same way as claims based on promissory estoppel.”

However, it is important to note that this observation was made by this Court while discussing the ambit of the doctrine of legitimate expectation under English Law, as it stood then. Since then and since the judgment in National Buildings Construction Corporation, the English Law in relation to the doctrine of legitimate expectation has evolved. More specifically, it has actively tried to separate the two doctrines and to situate the doctrine of legitimate expectations on a broader footing.

In a concurring opinion in Monnet Ispat and Energy Ltd. vs Union of India, (2012) 11 SCC 1, Justice H L Gokhale highlighted the different considerations that underlie the doctrines of promissory estoppel and legitimate expectation. He said:

“… for the application of the doctrine of promissory estoppel, there has to be a promise, based on which the promise has acted to its prejudice. In contrast, while applying the doctrine of legitimate expectation, the primary considerations are reasonableness and fairness of the State action.”

In Union of India vs Lt. Col. P.K. Choudhary, (2016) 4 SCC 236, speaking through Chief Justice T S Thakur, the Court discussed the decision in Monnet Ispat and held:

“… the doctrine of legitimate expectation cannot be claimed as a right in itself, but can be used only when the denial of a legitimate expectation leads to the violation of Article 14 of the Constitution.”

Conclusion

Hence, in an attempt to provide a cogent basis for the doctrine of legitimate expectation, which is not merely grounded on analogy with the doctrine of promissory estoppel, the Court, in the present case, concluded:

“… the doctrine of legitimate expectation cannot be claimed as a right in itself, but can be used only when the denial of a legitimate expectation leads to the violation of Article 14 of the Constitution. the doctrine of substantive legitimate expectation is one of the ways in which the guarantee of non-arbitrariness enshrined under Article 14 finds concrete expression.”

[State of Jharkhand v. Brahmputra Metallics Ltd.,  2020 SCC OnLine SC 968, decided on 01.12.2020]


*Justice Dr. DY Chandrachud has penned this judgment. Read more about him here

Counsels heard:

For the State of Jharkhand: Additional Advocate General Tapesh Kumar Singh, appearing for the State of Jharkhand

For Respondent: Advocate Devashish Bharuka

Also read: ‘Administrative lethargy of State will discourage entrepreneurship’; SC calls out Jharkhand Govt for not giving 50% electricity rebate to Industrial Units as promised

Case BriefsSupreme Court

Supreme Court: In a case where an Industrial Unit was seeking a rebate or deduction of 50 per cent of the amount assessed towards electricity duty from Financial Years 2011 to 2014 on the basis of Industrial Policy 2012 notified by the State of Jharkhand and a statutory notification dated 8 January 2015 issued under Section 9 of the Bihar Electricity Duty Act 1948, the bench of Dr. DY Chandrachud* and Indu Malhotra, JJ directed came down heavily upon Jharkhand Government’s administrative lethargy and held that the company (respondent)  was entitled to an exemption from electricity duty for FY 2012-13 and 2013-14.

However, considering the terms of Clause 35.7(b) of the Industrial Policy 2012 which provided that entitlement ensues from the financial year following the commencement of production, the Court held that since the respondent had commenced production on 17 August 2011, it was not entitled to a rebate/deduction for FY 2011-12.

“If the object of formulating the industrial policy is to encourage investment, employment and growth, the administrative lethargy of the State apparatus is clearly a factor which will discourage entrepreneurship.”

Terms of the impugned Industrial Policy

The policy document contemplated the grant of a rebate/deduction from the payment of electricity duty not only to new units but to existing units as well who had or would set up captive power plants. The State held out inter alia a solemn representation in terms of Clauses 32.10 and 35.7(b) of the entitlement of the exemption for a period of five years from the date of production. Besides this, it also contemplated in Clause 38(b) that a follow-up exemption notification would be issued within one month. That period of one month stretched on interminably with the result that the purpose and object of granting the exemption would virtually stand defeated. The net result was that when belatedly, the State government issued a notification under Section 9 of Bihar Act 1948 on 8 January 2015, it was prospective. As a consequence, by the time that the exemption notification was issued, a large part of the term for which the exemption was to operate in terms of the Industrial Policy 2012 had come to an end. The State government was evidently inclined to grant the exemption.

“This is not a case where due to an overarching requirement of public interest, the State government decided to override the representation which was contained in the Industrial Policy 2012. To the contrary, it sought to implement the representation albeit in fits and starts. Firstly, there was a delay of three years in the issuance of the notification. Secondly, by making the notification prospective, it deprived units such as the respondent of the full benefit of the exemption which was originally envisaged in terms of the Industrial Policy 2012.”

The Court, hence, noticed that not only did the State in the present case hold out a solemn representation, the representation was founded on its stated desire to encourage industrialization in the State.

The policy document spelt out:

(i) The nature of the incentives;

(ii) The period during which the incentives would be available; and

(iii) The time limit within which follow-up action would be taken by the State government through its departments for implementing the Industrial Policy 2012.

Legitimate Expectation

The State having held out a solemn representation in the above terms, it would be manifestly unfair and arbitrary to deprive industrial units within the State of their legitimate entitlement. The State government did as a matter of fact, issue a statutory notification under Section 9 but by doing so prospectively with effect from 8 January 2015 it negated the nature of the representation which was held out in the Industrial Policy 2012. Absolutely no justification bearing on reasons of policy or public interest has been offered before the High Court or before this Court for the delay in issuing a notification.

“It is one thing for the State to assert that the writ petitioner had no vested right but quite another for the State to assert that it is not duty bound to disclose its reasons for not giving effect to the exemption notification within the period that was envisaged in the Industrial Policy 2012.”

Noticing that both the accountability of the State and the solemn obligation which it undertook in terms of the policy document militate against accepting such a notion of state power, the Court said,

“The state must discard the colonial notion that it is a sovereign handing out doles at its will. Its policies give rise to legitimate expectations that the state will act according to what it puts forth in the public realm. In all its actions, the State is bound to act fairly, in a transparent manner. This is an elementary requirement of the guarantee against arbitrary state action which Article 14 of the Constitution adopts. A deprivation of the entitlement of private citizens and private business must be proportional to a requirement grounded in public interest.”

Conclusion

The Court, hence, held that the State had made a representation to the respondent and similarly situated industrial units under the Industrial Policy 2012 and this representation gave rise to a legitimate expectation on their behalf, that they would be offered a 50 per cent rebate/deduction in electricity duty for the next five years. However, due to the failure to issue a notification within the stipulated time and by the grant of the exemption only prospectively, the expectation and trust in the State stood violated.

“Since the State has offered no justification for the delay in issuance of the notification, or provided reasons for it being in public interest, we hold that such a course of action by the State is arbitrary and is violative of Article 14.”

[State of Jharkhand v. Brahmputra Metallics Ltd., 2020 SCC OnLine SC 968, decided on 01.12.2020]


*Justice Dr. DY Chandrachud has penned this judgment. Read more about him here

Counsels heard:

For the State of Jharkhand: Additional Advocate General Tapesh Kumar Singh, appearing for the State of Jharkhand

For Respondent: Advocate Devashish Bharuka

Case BriefsSupreme Court

Supreme Court:

“The legitimate expectation is not a wish or a desire or a hope, therefore, it cannot be claimed or demanded as a right.”

The Bench of Dr DY Chandrachud and Hemant Gupta, JJ said this in the appeal against Patna High Court’s order in which the State of Bihar was directed to provide financial assistance for payment of the arrears as well as current pension to the employees of the Anugraha Narayan Sinha Institute of Social Studies, Patna.

The provision in question was Section 8(1) Anugraha Narayan Sinha Institute of Social Studies Act, 1964 which provides that the State Government is to contribute a sum of rupees two lacs in each financial year or such other sums for research or education work, publication, buildings and for proper maintenance and development of the Institute. It was argued before the Court that the State Government had been releasing Grant-in-aid including amount towards pension since the Board has passed the resolution in the year 1985. Hence, the contribution towards the amount of pension has created legitimate expectation of the employees of the Institute that they are entitled to pension at par with the employees of Patna University. Thus, the employees have legitimate expectations of receipt of pension from the State Government. Therefore, the order passed by the Division Bench of the High Court does not call for any interference.

The Court, however, disagreed with the said stand and explained the provision by stating:

“Sub-Section (1) of Section 8 of the Act mandates the State Government to contribute a sum of rupees two lacs in each financial year for the maintenance of the Institute, whereas, sub-Section (2) empowers the State Government to contribute from time to time, such additional sums as it may deem fit for special items of research or education work, publication, buildings and for proper maintenance and development of the Institute. Such payment for the special projects, is in discretion of the State Government in view of the object for which the grant is to be disbursed, but sub-Section (2) does not include disbursement of the amount of pension as the contribution is for limited purpose which is not recurring in nature.”

The Bench said that the resolution of the Board of the Institute to implement a retirement benefit scheme from its own resources will not bind the State Government to pay the amount of pension to the employees of the Institute. The employees of such Institute cannot be treated at par with the employees of the State Government nor the State can be burdened with the responsibility to pay pension to the employees of the Institute.

Stating that the payment of pension in the past will not confer an enforceable right in favour of the Institute or its employees, the Court held that the order of the High Court was not legally sustainable.

[State of Bihar v. Dr. Sachindra Narayan, 2019 SCC OnLine SC 108, decided on 30.01.2019]