Ram Niwas Agarwal & Sons, Sriganganagar v. State of Rajasthan
1996-04-25
P.P.NAOLEKAR
body1996
DigiLaw.ai
Honble Naolekar, J. – Since Common question of law and facts are involved in all these writ petitions, they are being decided by this common order. In all these writ petitions, the policy of Krishi Upaj Mandi Samiti, Sriganganagar (hereinafter referred to as `the Samiti) for allotment of shops constructed by the Samiti, by `rent auction on the instructions of the State, is under challenge. For the purpose of deciding the point in issue, facts and documents are referred from S.B. Civil Writ Petitions No. 2557/95 and 450/96 as the facts are similar in other writ petitions barring minor details, which are not relevant. (2). The State of Rajasthan established Krishi Upaj Mandi Samiti, Sriganganagar, in exercise of the powers conferred u/s 6 of the Rajasthan Agriculture Produce Market Act 1961 (hereinafter referred to as `the Act). The State Govt. vide notification issued u/s 5(1) of the Act declared the boundaries of the principal market yard at Sriganganagar for carrying on business for sale and purchase of agriculture produce. By the notification, every trader or commission agent dealing in agriculture produce has to carry on business in the market yard after obtaining licence under the Act. The petitioners are the licence holders under the Act and are carrying on business in the market established by the Samiti. (3). The Agriculture Produce Market Committee, Sriganganagar, (for short `the Committee hereinafter) constructed 240 shops in the first phase. Out of these 240 shops, 180 shops were of large size and 60 shops were of small size. Large size shops were constructed for the food grain dealers whereas the small size shops were constructed for sundry purposes. As per the petitioners, out of these 60 small shops, 20 were constructed for vegetable dealers while 40 small shops were constructed for the dealers dealing in fertilizer and pecticides. Applications were invited from traders and commission agents trading in foodgrains for allotment of shops. The State Govt. issued guidelines for allotment of shops. In all 300 applications were received by the Samiti and as there were more number of applications than the constructed shops available for allotment, all the shops were allotted to the foodgrain dealers and the foodgrain dealers were given assurance by the Samiti that they would be allotted bigger shops after new construction.
issued guidelines for allotment of shops. In all 300 applications were received by the Samiti and as there were more number of applications than the constructed shops available for allotment, all the shops were allotted to the foodgrain dealers and the foodgrain dealers were given assurance by the Samiti that they would be allotted bigger shops after new construction. (No. document has been produced by the petitioners substantiating this assurance.) After the construction of shops, all the shops were allotted in accordance with the merit list prepared as per the guidelines. After the allotment of the shops to various traders and commission agents, the allotment of some of the shops was cancelled by the Samiti on the ground that some of the allottees did not start their business and some of the allottees did not occupy their shops and some contravened the conditions of allotment. After the cancellation of the allotments, the Samiti invited fresh applications for allotment of the available vacant shops vide notice dated 13.10.86 and in response to the notice, 156 applications were received by the Samiti. A merit list was prepared as per the guidelines and 45 applicants were found eligible for allotment and allotments were made of 11 shops. As the shops were not available, some of the petitioners had been given permission to occupy platform between the shops free of charge. (4). In the year 1992-93 the Samiti again invited applications for newly constructed shops. At that time, the petitioners and other persons, who applied in the year 1987, were asked to only submit the particulars of their dealings. The petitioners consequently submitted the details of their dealings in the market yard and anxiously waiting for allotment of shops from the Samiti and the Secretary of the Samiti but no response was given by the Samiti. Some petitioners submitted applications for allotment of shops in pursuance of invitation. While the petitioners were waiting for allotment of shops by the Committee on the basis of the norms laid down, they came across an advertisement dated 7.7.95 issued by the Samiti notifying that 24 big and 35 small shops will be put to auction on rent basis.
Some petitioners submitted applications for allotment of shops in pursuance of invitation. While the petitioners were waiting for allotment of shops by the Committee on the basis of the norms laid down, they came across an advertisement dated 7.7.95 issued by the Samiti notifying that 24 big and 35 small shops will be put to auction on rent basis. On en- quiry the petitioners came to know that the advertisement had been issued in pursuance of the directions given by the State Govt., and the instructions issued by the Director changing the guidelines issued by respondent No. 2 for allotment of shops in market yard in the year1989 and also in 1993. Under the guidelines of 1988 and 1993, the principal criterion for allotment of shops was preparation of merit list on the basis of the standing of trader/broker i.e. the period the licence held, the market fees paid by the broker/trader and the turn over of the year. (5). It is contended by the counsel for the petitioners that the respondents are estopped from changing the policy as the petitioners have been assured that they will be allotted shops on the basis of guidelines issued in 1988 and 1993. The State Govt. does not have any jurisdiction or authority to issue guidelines to Krishi Upaj Mandi Samiti for allotment of shops constructed by the Samiti. The guidelines are made and directed to be applied by the Deputy Secretary, State of Rajasthan, who has neither any authority to make the guidelines nor his directions are binding on the Samiti. The petitioners are having legitimate expectations arising from the exis- ting policy of allotment of shops on the criteria laid down in the guidelines of 1988 and 1993 and the same cannot be taken away by issuance of fresh policy. (6). It is the case of the petitioners that they had applied and eligible for allotment of shops in accordance with the then existing guidelines and pending their applications the respondents cannot change their policy on the principle of promissory estoppel and further, they are entitled for allotment of shops on the basis of the policy existing when the applications were invited for allotment of shops. It has been held by the Supreme Court in M/s. Motilal Padampat Sugar Mills Co.
It has been held by the Supreme Court in M/s. Motilal Padampat Sugar Mills Co. Ltd. vs. The State of Uttar Pradesh (1) as under:– ``The true principle of promissory estoppel seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to created legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre- existing relationship between the parties or not. (7). In the instant case, the principle of promissory estoppel has no application as the Samiti never promised the petitioners that they shall be allotted shops, simply because the petitioners applied for allotment, that does not mean that they would be entitled for allotment nor anything has been brought to the notice of the Court that on account of the policy, the petitioners have changed their position, which would now affect them adversely if the promise is not fulfilled. This apart, the Govt. cannot be restrained from taking a policy decision and the principle of estoppel has no application nor does it operate at the level of the Govt. Policy. As a result of change in policy, many people may become victim of the same but estoppel cannot be allowed to hinder the formation and implementation of the policy. The public authority cannot be disturbed from doing its public duty. (8). It is then contended that the shops constructed is the property of the Samiti and, therefore, the Govt. has no authority or jurisdiction to issue directions and the guidelines on the basis of which the allotment of shops has to be made. Section 34A of the Act authorises the Govt. to issue general instructions to the board or the market committee for carrying out the purposes of the Act. Section 9 of the Act lays down the functions and duties of a market committee.
Section 34A of the Act authorises the Govt. to issue general instructions to the board or the market committee for carrying out the purposes of the Act. Section 9 of the Act lays down the functions and duties of a market committee. Sub-sections (a) and (b) impose duty on a market committee to manage the market proper, the principal market yard and sub-market yards in the market area for which it is cons- tituted, and control and regulate the running of the market in the interest of agriculturists and traders operating in the market. The allotment of shops to the traders for carrying out the business in a market area and market proper is connected with the management of the market proper, the principal market area and sub-market yard in the market area and is in relation to running of market in the interest of agriculturists and traders, and as such, the instructions issued by the State Govt. are in relation to and connected with carrying out the purpose of the Act. The State Govt. is empowered by virtue of s. 34A of the Act to issue directions for allotment of shops, constructed by the Market Committee. The instructions issued on 24.6.95 for allotment of shops on the basis of rent auction are instructions issued as per the directions by the State Govt. and are binding on the Samiti. The State is legally competent to issue general instructions for carrying out the purpose of the Act. (9). It is argued by the counsel for the petitioners that the instructions dated 24.6.95 issued by the Deputy Secretary, Govt. of Rajasthan, are not binding on the Samiti as they have not been the instructions for and on behalf of the State of Rajasthan as contemplated under Article 166 of the Constitution of India and, therefore, not binding on the Samiti nor the Samiti is required to comply with those instructions. The counsel then referred to the words of s. 34A that the State Govt. may give general instructions to the board or market committee and not by the Deputy Secretary and argued that it is the State Govt. alone, who could give general instructions to be followed, if the section alone stood as it is, then this argument would be unanswerable, but we have the rules of business which specifically allows conferment of powers on Deputy Secretary. (10).
alone, who could give general instructions to be followed, if the section alone stood as it is, then this argument would be unanswerable, but we have the rules of business which specifically allows conferment of powers on Deputy Secretary. (10). Under the Constitution, the Governor is essentially a constitutional head and the administration of State is run by the Council of Ministers. The Constitution has authorised the Governor under Article 166(3) to make rules for the more convenient transaction of business of the Government of State and for the allocation amongst its Ministers, the business of the Government. All matters excepting those in which Governor is required to act in his discretion have to be allocated to one or the other of the Ministers on the advice of the Chief Minister. Apart from allocating business among the Ministers, the Governor can also make rules on the advice of his Council of Minister for more convenient transaction of business. He can, not only allocate the various subjects amongst the Ministers but may go further and designate a particular official to discharge any particular function. The Governor has framed the Rules of Business for Rajasthan in exercise of the powers conferred by Clauses (2) and (3) of Article 166 of the Constitution of India. Rule 12 of the Rules of Business is as under:– ``12. (1) Every order or instrument of the Government shall be signed by a Secretary, a Special Secretary, an Addl. Secretary, a Joint Secretary, a Dy. Secretary, Legal Remembrancer, Jt. Legal Remembrancer, Dy. Legal Remembrancer, Asstt. Legal Draftsman, Asstt. Legal Remembrancer, Head Legal Asstt., Under Secretary or an Asstt. Secretary, Officer on Special Duty, Appointments Department, Registrar Govt. Sectt., Section Officers of the Secretariat, Vikas Adhikaris of Panchayat Samitis or by such other officers as may be specifically empowered in that behalf and such signatures shall be deemed to be the proper authentication of such order or instrument. (2). The ``Head of Department shall appoint Officer-in-Charge for cases in which the value of the subject matter does not exceed Rs. 20,000/- (Rupees twenty thousand only) and which are to be conducted in the Courts other than the High Court and the Supreme Court. The business of Govt. is regulated by Rules of Business made under Article 166 of the Constitution. Rule 12 of the Rules of Business (Govt.
20,000/- (Rupees twenty thousand only) and which are to be conducted in the Courts other than the High Court and the Supreme Court. The business of Govt. is regulated by Rules of Business made under Article 166 of the Constitution. Rule 12 of the Rules of Business (Govt. of Rajasthan) specifically places all Deputy Secretaries on equality for authentication of orders and instruments of the Govt. Thus the Deputy Secretary to State of Rajasthan was competent to issue instructions for and on behalf of the State of Rajasthan. Further, the Deputy Secretary would be undoubtedly competent as an officer duly authorised by virtue of rule 12 of the Rules of Business (Govt. of Rajasthan) and the instructions issued by him shall be the instructions issued by the State of Rajasthan. The instructions dated 24.6.95 are the instructions issued by the State of Rajasthan and not the instructions issued by Deputy Secretary in his personal official capacity. (11). It is the case of the petitioners that as the previous allotments were made on the basis of criteria laid down in 1988 and 1993, the petitioners have a legitimate expectation for allotment of shops on the basis of past practice in the matter of allotment even though they do not have any legal right as provided in law to such treatment and strongly placed reliance on a decision reported in Navjyoti Coo-Group Housing Society etc. vs. Union of India (2) wherein the Supreme Court has held that the expression ``first come first served appearing in Rule 6(vi) of Delhi Development Authority (Disposal of Development Nazul Land) Rules, 1981, relates to the seniority with reference to the date of registration of Group Housing Societies with the Registrar, and, therefore, criterion for allotment of land to group housing societies is to be on the basis of seniority in registration and not on the basis of the date of approval of the final list of members of society as indicated in the memorandum. The past principle which has been followed for allotment on the basis of date of registration and not the date of approval of the list of members gives a legitimate expectation to the petitioners that the policy shall be followed and if the legitimate expectation is proposed to be defeated, a person having a legitimate expectation should be given an opportunity to make representation in the matter.
The decision turns upon peculiar facts of that case. In that case, all along the criterion followed was, giving priority in the matter of allotment of land to the Group Housing Societies with reference to the date of registration of the Society. The Delhi Development Authority itself has understood rule 6 in that manner and that was consistently adopted until the formation of new criteria and, therefore, natural legitimate expectation was, that the same policy shall be consistently followed or if not followed, the person shall be heard before the implementation of the new policy. That is not the case here. It is not the case of consistent long policy, of criteria followed with reference to any rule to raise expectation in any manner. (12). An aggrieved person is entitled to invoke judicial review if he shows that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received an assurance that it would not be withdrawn before he had been given the opportunity of making representation against the withdrawal. As per the respondents, the policy guidelines, which is relied upon, was not the only guidelines as claimed by the petitioners but different guidelines were issued from time to time on 16.6.81, 25.5.85, 31.7.86, 29.6.88, 22.5.89, 22.2.90, 16.6.90, 4.10.90, 24.1.92, 6.3.93 and one more guideline in 1993, 21.1.95, 26.4.95, 1.5.95 and 7.6.95. Thus, the guidelines on which the petitioners based their claim were not persistently similar to raise legitimate expectation thereof nor it can be said that some benefit or advantage in the past had been permitted to be enjoyed, which they could legitima- tely expect to be permitted to continue to be enjoyed by the petitioners. (13). Right to make an application for allotment under a policy which was in existence, cannot be equated with accrual of a right or some benefit or advantage under that policy in State of Tamil Nadu vs. M/s. Hind Stone etc. etc. (3) ruel 8C was introduced by G.O. Ms. No. 1312 Industries dated 2.12.77.
(13). Right to make an application for allotment under a policy which was in existence, cannot be equated with accrual of a right or some benefit or advantage under that policy in State of Tamil Nadu vs. M/s. Hind Stone etc. etc. (3) ruel 8C was introduced by G.O. Ms. No. 1312 Industries dated 2.12.77. By this rule leases for qua- rrying black granite in favour of private persons are banned and leases can only be granted in favour of a Corporation wholly owned by the State Govt. This rule was challenged and along with other contentions, it has been submitted that when the rule was brought into force, applications for grant of lease were pending consideration and they should be dealt with as if rule 8C has not come into force. It is not open for the Govt. to keep the applications for grant of lease pending for a long time and then reject them on the basis of rule 8C notwithstanding that the applications have been moved much prior when the rule was brought into force. The Supreme Court observed as under:– ``While it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application. No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions. In the absence of any vested rights in anyone an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application des- pite the fact that there is a long delay since the making of the application.
In the absence of any vested rights in anyone an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application des- pite the fact that there is a long delay since the making of the application. In the light of the aforesaid decision, it cannot be said that because the petitioners applications were pending consideration for allotment to shops, any vested right has been created in them to get the allotment in accordance with the guidelines issued by the respondents at the time of making the applications and in no case, the policy decision for allotment of shops on rent auction basis can be applied for making allotments. (14). The administrative action of the State is subject to control by judicial re- view under three heads: (i) illegality,where the decision-making authority has been guilty of an error of law e.g. by purporting to exercise a power it does not possess: (ii) irrationality, where the decision-making authority has acted so unreasonably that no reasonable authority would have made the decision: (iii) procedural impropriety, where the decision-making authority has failed in its duty to act fairly. Judi- cial review is permitted in the aforesaid matters against administrative action effected by the State. The respondents have introduced a new policy for allotment of shops on auction on rental basis. It is because of the fact that there are three categories of licence holders working in the Mandi Samiti Yard. The first category belongs to A Class brokers, second category is of traders and the third category is of millers. So far as the brokers under category first are concerned, they have highest and maximum turn over in comparison with the persons belonging to other two categories. Under the old system, the question of turn over was a vital factor to be considered for allotment of shops. Thus, A Class brokers were always in the top in merit, which resulted in accumulation of shops in their hands and the other classes were deprived of allotment because their turn over being less. With a new introduction of allotment by auction, everybody has an equal opportunity of allotment of shop. It was also noticed that the allotment through applications, the Samiti was not fetching the amount of rent in proportion to their investment made by them in construction of shops.
With a new introduction of allotment by auction, everybody has an equal opportunity of allotment of shop. It was also noticed that the allotment through applications, the Samiti was not fetching the amount of rent in proportion to their investment made by them in construction of shops. While fixing the rate of rent, the cost of the land was not included and considered. It was only the cost of construction, which was taken into account and, therefore, the Samities were not getting the adequate rent. The Samities completed their projects for construction of shops with the aid of loan taken from different Banks including N.A.B.A.R.D. and they were required to pay interest @ 15% to 17% p.a. whereas the rent received never exceeded 7% to 9%. This is besides the actual cost of land and other kind of facilities which were never taken into consideration. The other Samities who have adopted and implemented the auction system, have augmented their revenue and started receiving the rent in proportion to the expenses incurred. This mode was adopted on the instructions issued by the Govt. for allotting shops so that proper rent shall be received by the Samities. The adoption of policy, which prevents monopoly in allotted shops in the hands of one category of brokers and receipt of rent which commensurate with the expenses incurred and the facilities provided, could not be said to be irrational. (15). In G.B. Mahajan vs. Jalgaon Municipal Council (4), the Apex Court has approved and quoted the passage from ``The Purpose and Scope of Judicial Review, wherein it is said as under:– ``The Courts are kept out of the lush field of administrative policy, except when policy is inconsistent with the express or implied provisions of a statute which creates the power to which the policy relates or when a decision made in purported exercise of a power is such that a repository of the power, acting reasonably and in good faith, could not have made it. In the latter case, `something overwhelming must appear before the court will intervene. That is, and ought to be, a difficult onus for an applicant to discharge. The Courts are not very good at formulating or evaluating policy.
In the latter case, `something overwhelming must appear before the court will intervene. That is, and ought to be, a difficult onus for an applicant to discharge. The Courts are not very good at formulating or evaluating policy. Sometimes when the Courts have intervened on policy grounds, the courts view of the range of policies open under the statute or of what is unreasonably policy has not won public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. In the world of politics, the courts opinions on policy are naturally less likely to reflect the popular view than the policies of a democratically elected government or of expert administrators... ``The considerations by reference to which the reasonableness of a policy may be determined are rarely judicially manageable..... Thus, the Court will be slow in interfering with the policy decision taken by a Govt. unless it strictly falls within the permissible limits of judicial review. The adoption of the auction policy for allotment of shops on rental basis is a judicious method as it gives an equal opportunity to all the sections of the licence holders, who are interested in carrying out trade in Mandi Samiti. There is no error of law in laying down fresh policy nor it can be said to be unreasonable or suffers with procedural impropriety. (16). Writ petitioners are dismissed with costs of Rs. 750/- each.