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Madhya Pradesh High Court · body

2000 DIGILAW 484 (MP)

Suresh Seth v. State of M. P.

2000-05-08

N.K.JAIN

body2000
ORDER 1. Petitioner, an Ex- M.L.A., is aggrieved by the State Government's Order dated 16.11.1994 (Annexure P/3) whereby the interest-subsidy granted to the members of IXth Vidhan Sabha under an earlier Order dated 6.2.1992 (Annexure P/1) was, on dissolution of that Vidhan Sabha on 15.12.1992, discontinued with effect from such dissolution in respect of only those members who did not get re-elected for the Xth Vidhan Sabha which came into existence in December, 1993. 2. The M.P. State Co-operative Bank Ltd., Bhopal, which is the Apex Bank in the Co-operative field in the State, with the previous approval of the Registrar of Co-operative Societies, M.P. Bhopal, framed a Scheme (vide Annexure R/1) for grant of mid-term loan for Rs. 1.5 lacs each to the member of IXth Vidhan Sabha for purchase of Jeep or Car so as to make it convenient for the members to work effectively in their constituencies. Under this scheme the loan was to be distributed through the various District Co-operative Banks in the State. The money for the Scheme was to be provided by the Apex Bank to the distributing subsidiary Banks on interest at the rate of 13 per cent per annum. The distributing Banks were allowed to charge interest from the loanees at the rate of is per cent per annum with quarterly rests. The loan, with interest was to be re-paid in five years in monthly instalments. The amount of instalments was to be deducted every month from the salary/pension of the loanee member by the Vidhan Sabha Secretariat and paid to the lender Bank. The approval to the Scheme was accorded by the Registrar on 12.4.1991. The Scheme did not as such provide for grant of any subsidiary but merely made a reference that the loanee members shall be entitled to the benefit of such subsidy as and when the same is announced by the State Government. The State Legislature had also adapted the Scheme on 5.1.1992. 3. The Department of Parliamentary affairs, vide order dated 6.2.1992 (Annexure P/1) took decision to grant interest-subsidy to the extent of 10 per cent towards the interest payable on the loan taken under the aforesaid Scheme by the members of IXth Vidhan Sabha. The State Legislature had also adapted the Scheme on 5.1.1992. 3. The Department of Parliamentary affairs, vide order dated 6.2.1992 (Annexure P/1) took decision to grant interest-subsidy to the extent of 10 per cent towards the interest payable on the loan taken under the aforesaid Scheme by the members of IXth Vidhan Sabha. The order was made effective from 1.4.1990 and it contained the following terms (I reproduce) : 1- fo/kk;dksa }kjk fy, x, _.k ij cSad izpfyr nj ds vuqlkj C;kt ys ldsaxsA 2- fo/kk;dksa }kjk fy, x, ewy/ku ij tks C;kt dh jkf"k cSad dks ns; gksxh mlls 10 izfr"kr rd dh jkf"k "kklu }kjk vuqnku ds :i esa nh tkosxh rFkk 10 izfr"kr ls vf/kd dh jkf"k fo/kk;d }kjk cSad dks ns; gksxhA ;fn C;kt dh jkf"k 10 izfr"kr ls de gksxh rks "kklu dsoy ruh gh jkf"k C;kt ds :i esa nsxk tks 10 izfr"kr ls de gksxhA 3- 10 izfr"kr ls Åij dh C;kt dh jkf"k rFkk ewy/ku nsus dk mÙkjnkf;Ro lacaf/kr fo/kk;d dk gksxkA 4- lacaf/kr cSad _.k nsus ds laca/k esa fu;ekuqlkj lHkh vkSipkfjdrk,a iwjh djsaxsA 5- ;fn fdlh eghus esa cSad }kjk fu/kkZfjr fdLr fo/kk;d }kjk ugha nh tkrh rks mlds dkj.k tks C;kt dh jkf"k ns; gksrh gS og "kklu }kjk ns; ugha gksrh vkSj u gh ewy/ku dh okilh dk dksbZ mÙkjnkf;Ro "kklu dk gksxkA 6- fo/kk;d bl dk;Z ds fy, tks _.k izkIr djsaxs mlesa "kklu }kjk C;kt ds laca/k esa vuqnku fn;s tkus dh lqfo/kk dsoy ,d ckj izkIr djus dh ik=rk jgsxhA 4. The petitioner who was a member of IXth Vidhan Sabha also on 6.1.1992 took vehicle loan of Rs. 1.5 lacs under the scheme from Indore Premier Co-operative Bank Ltd., Indore (respondent No.3). Everything seemed to have gone well until on 15.12.1992 when IXth Vidhan Sabha was dissolved by the President of India and the State was brought under the President Rule. The Xth Vidhan Sabha came to be constituted in December, 1993, i.e. with a gap of one year. Everything seemed to have gone well until on 15.12.1992 when IXth Vidhan Sabha was dissolved by the President of India and the State was brought under the President Rule. The Xth Vidhan Sabha came to be constituted in December, 1993, i.e. with a gap of one year. The new Government on 16.11.1994 issued the Impugned Order (Annexure P/3) discontinuing interest-subsidy on the said loans in respect of those loanee members of the IXth Vidhan Sabha who did not get elected for Xth Vidhan Sabha/ However, the benefit of the interest - subsidy was continued to be extended to such Members of IXth Vidhan Sabha, who got re-elected to Xth Vidhan Sabha under the same terms and conditions as contained in the Government's order dated 6.2.1992 (Annexure P/1). Further clarification (vide Annexure P/7) was issued on 8.12.1994 that such re-elected members would be entitled to the benefit of the subsidy even during the intervening period from December 1992 to December. 1993 when there was no Vidhan Sabha in existence and the State was under the Central Rule. The petitioner unsuccessfully pleaded with the Government as also the lender Bank for continuation of interest-subsidy even after 15.12.1992. His representations in this behalf as also the reference made by him under Section 64 of the M.P. Co-operative Societies Act were rejected by the concerning Authorities and he was made to pay the entire balance amount with interest. 5 The petitioner has approached this Court under Article 226 of the Constitution calling in question the validity of the State Government's Order dated 16.11.1994 (Annexure P/3). It is contended that neither the Scheme nor the Government's order dated 6.2.1992 provided for discontinuation of the interest-subsidy on any ground whatsoever muchless on the ground of dissolution of the Vidhan Sabha. The petitioner was therefore entitled to the said subsidy for the entire term of the loan in accordance with the order dated 6.2 1992 which could not be rescinded or modified unilaterally to the disadvantage of the petitioner The Order dated 16.11.1994, it is further contended is arbitrary and violative of petitioner's fundamental right guaranteed by Article 14 of the Constitution. The petitioner thus seeks quashment of the order (Annexure P/3) and direction to the respondents for payment of balance amount of interest-subsidy which fell due after 15.12.1992. The petitioner thus seeks quashment of the order (Annexure P/3) and direction to the respondents for payment of balance amount of interest-subsidy which fell due after 15.12.1992. He also prays for adequate compensation for the losses and harassment suffered by him on account of illegal action/inaction of the Government and the lender Bank. 6. Respondent No. 1 -- The State of Madhya Pradesh -- alone has filed return in oppugnation of the petition. A statement was, however made on 25.7.1997 on behalf of other respondents that they adapt the reply filed by the State. The respondents have defended the impugned order (Annexure P/3) and it is submitted that the State Government was well within the executive power to withdraw the subsidy and no grievance can be made in law by the petitioner on that count. The Order (Annexure P/1) was an executive order and cannot be therefore, enforced by taking recourse to Article 226 of the Constitution. It was, further contended that the loans in question were granted to the members of IXth Vidhan Sabha to facilitate their functioning as M.L.As in their respective constituencies and since the petitioner ceased to be an M.L.A. on and after 15.12.1994 he was not entitled to the benefit accorded to him on account of his being M.L.A. The Order (Annexure P/3), it is asserted, does not suffer from any bias or discrimination. 7. The petitioner himself addressed the Court. I have also heard Shri Prakash Verma, learned Government Advocate for respondents. 8. At the very outset it may be pointed out that the Order dated 6.2.1992 (Annexure P/1) as also the Order dated 16.11.94 (Annexure P/3) are purely administrative m nature not even quasi-legislative or quasi-Judicial. While in modem times the tendency is towards an ever increasing expansion of legislation and the bulk of administrative powers of the Executive is derived from the statutes there is still a vast field where the Executive exercises its power unfettered or unregulated by any statute. While in modem times the tendency is towards an ever increasing expansion of legislation and the bulk of administrative powers of the Executive is derived from the statutes there is still a vast field where the Executive exercises its power unfettered or unregulated by any statute. The powers of the State executives are no doubt co-extensive with the legislative powers of the State legislature (see: Article 154 of the Constitution), bat this does not mean that in order to enable the Executive to function in respect of any matter there must be a law of the legislature in existence relating to that subject matter or that the powers of the Executive are limited to the carrying out of those laws only. In the instant case also the two Orders (Annexures P/1 and P/3) are the outcome of this Executive exercise of the State Government not regulated by any statute. 9. Generally speaking a purely administrative order is not subjected to judicial review. Such an order can also be changed by the Authority who made it without any formality and it cannot ordinarily be enforced through a Court of law. To this general rule however exceptions have been admitted by the Courts and an aggrieved party may have his remedies if his constitutional rights are affected by the enforcement of such administrative order against him. Thus the constitutional remedy under Article 32 or 226 may be available if his fundamental right (e.g. Article 14) has been affected by the administrative order instruction or guideline. Such an order or action can also be impugned on the grounds that it is arbitrary unreasonable or malafide or that it involves breach of "promissory estoppel" (see: R.R. Verma AIR 1990 SC 1461 and Kasturi AIR 1990 SC 1992). This principle would apply even in the matter of the Government giving or distributing largess. As observed in Kasturi (supra)" it cannot choose to deal with any person it pleases in its absolute and unfettered discretion". 10. In the instant case I notice with regret that the Order dated 16.11.94 (Annexure P/3) was arbitrary and violative of the petitioner's fundamental right of equality guaranteed by Article 14. It also involved breach of "promissory estoppel". 11. As observed in Kasturi (supra)" it cannot choose to deal with any person it pleases in its absolute and unfettered discretion". 10. In the instant case I notice with regret that the Order dated 16.11.94 (Annexure P/3) was arbitrary and violative of the petitioner's fundamental right of equality guaranteed by Article 14. It also involved breach of "promissory estoppel". 11. Turning to the facts of the present case it is noted that the Executive while making the order dated 16.11.94, clearly adapted a discriminatory attitude towards those members of IXth Vidhan Sabha who either did not contest election or get elected to Xth Vidhan Sabha by discontinuing the interest-subsidy to these members while allowing the said benefit to those members of IXth Vidhan Sabha who were re-elected to Xth Vidhan Sabha. The learned Government Advocate was at pains to explain that the discrimination was reasonable inasmuch as the subsidy was accorded to facilitate the functioning of the M.LAs in their respective constituencies and since the petitioner and the likes ceased to be M.L.As the Government was justified in discontinuing the subsidy to them. I am not impressed by this fallacious argument. It is significant to note that the benefit of the subsidy to those re-elected members was extended even for the period (from December, 1992 to December, 1993), during which there was no Vidhan Sabha and the members were not required to discharge any function as such. Although both these Orders (Annexures P/1 and P/3) were made as a part of distribution of largess at the cost of public exchequer, nevertheless, the Government in the matter could not act arbitrarily at its sweet will. The Order (Annexure P/3) was clearly arbitrary and discriminatory in nature. It was violative of petitioner's fundamental right of equality guaranteed by Article 14. 12. The Order (Annexure P/3) also involves breach of "promissory estoppel". The "promissory estoppel" is a rule of equity. The Order (Annexure P/3) was clearly arbitrary and discriminatory in nature. It was violative of petitioner's fundamental right of equality guaranteed by Article 14. 12. The Order (Annexure P/3) also involves breach of "promissory estoppel". The "promissory estoppel" is a rule of equity. It does not really belong to the law of contract or evidence, but it is a doctrine evolved by equity in order to prevent injustice where a promise is made by a person knowing that it would be acted on by the person to whom it is made and in fact it is so acted on and it is inequitable to allow the person making the promise to go back upon it Principle is made more luculent by the Supreme Court in M.P. Sugar Mills ( AIR 1979 SC 621 ) in following terms: "Doctrine of promissory estoppel has been variously called promissory estoppel" requisite estoppel quasi estoppel and new estoppel. It is a principle evolved by equity to avoid injustice and though commonly named promissory estoppel it is neither in the realm of contract nor in the realm of estoppel. 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 create 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. The doctrine of promissory estoppel need not be inhibited by the same limitation as estoppel in the strict sense of the term. It is equitable principle evolved by the Courts for doing justice and there is no reason why it should be given only a limited application by way of defence. There is no reason in logic or principle why promissory estoppel should also not be available as a cause of action if necessary to satisfy the equity. It is equitable principle evolved by the Courts for doing justice and there is no reason why it should be given only a limited application by way of defence. There is no reason in logic or principle why promissory estoppel should also not be available as a cause of action if necessary to satisfy the equity. It is not necessary in order to attract the applicability of the doctrine of promissory estoppel that the promise, acting in reliance on the promise should suffer any detriment. What is necessary is only that the promise should have altered his position m reliance on the promise". 13. The Courts in India have applied the doctrine of promissory estoppel against Government and public bodies even in absence of a formal contract in terms of Article 229 of the Constitution. So, if the Government or some other public body makes a representation or a promise and an individual acts upon such promise and alters his position the Government or the public body must make good that promise and shall not be allowed to fall back upon the formal defect in the contract. They cannot be also allowed to take shelter of their executive prerogative to change or rescind their earlier order or policy (see. Indo-Afghan Agency AIR 1968 SC 718 ). Promises ought to be made for performance. Law cannot stay petrified when these are broken to shake people and shatter hopes to the point of collapse. 14. In the instant case, although the loan was taken by the petitioner on 6.1.1992 i.e., about 2 months prior to the making of the Order dated 1.4.92, but it was clearly taken pursuant to the Scheme (Annexure R/1) to which approval was accorded by the State Government on 12.4.91 and a declaration in that behalf was also made by the State Government in Vidhan Sabha on 5.1.1992. In this Scheme (Annx. R/1) a clear indication of Government's intention to grant interest-subsidy, was given. It is significant to note that the Order (Annexure P/1) though made on 1.4.92, was given retrospective effect w.e.f. 1.4.90. In this Scheme (Annx. R/1) a clear indication of Government's intention to grant interest-subsidy, was given. It is significant to note that the Order (Annexure P/1) though made on 1.4.92, was given retrospective effect w.e.f. 1.4.90. So, the every loan including the one taken by the petitioner pursuant to the said Scheme on or after 1.4.1990 was squarely covered by the Order dated 1.4.92 and the State Government was estopped from changing their position merely because IXth Vidhan Sabha was dissolved (for no fault of its members) or the new Government with different political complexion had come into power. I am afraid the change of stand was for some extreneous considerations not warranted by the merits of the matter. 15. There is nothing in the scheme (Annexure R/1) or the order (Annexure P/1) which would disentitle the petitioner to the benefit of the interest-subsidy merely because he ceased to be M.L.A. on account of the dissolution of the legislative assembly for which certainly the petitioner or as a matter of that any other member of the house was not responsible. Shri Verma learned Government Advocate has however laid great emphasis on clause (vii) of the scheme (Annexure R/1) which inter-alia provided that in case of death of the loanee-member or his otherwise ceasing to be member of the house, the entire amount of loan then due would become payable in lump sum. According to the learned counsel this clause disentitled the petitioner to the benefit of the subsidy the moment he ceased to be member of the legislative assembly. I am not impressed by the argument. Firstly this clause does not deal with the grant or discontinuation of the interest-subsidy which was granted under an independent Order (Annexure P/1) of the State Government. Even otherwise all that was provided by this clause is that in certain circumstances the entire balance amount of loan would be payable in lump sum with interest. Firstly this clause does not deal with the grant or discontinuation of the interest-subsidy which was granted under an independent Order (Annexure P/1) of the State Government. Even otherwise all that was provided by this clause is that in certain circumstances the entire balance amount of loan would be payable in lump sum with interest. It could not and did not provide for the discontinuation of the interest-subsidy in the aforesaid contingency The Order (Annexure P/1) granting subsidy contained no such condition which would disentitle a member loanee to the interest-subsidy on account of his ceasing to be a member of house, particularly in the event of its dissolution which was obviously not foreseen either by the State Government or by the Apex Bank while promulgating the scheme (Annexure R/1) or passing the Order (Annexure P/1). The Order (Annexure P/3) could not have been passed by taking recourse to any of the terms contained in Scheme (Annexure R/1) or the order (Annexure P/1). The impugned order, as already pointed out is vitiated being violative of petitioner's fundamental right and the equitable doctrine of promissory estoppel. The petitioner is entitled to the remaining amount of interest-subsidy which was discontinued to him after 15/12/1992. 16. The petitioner has also claimed interest on the said balance amount of interest-subsidy by way of compensation. I am however afraid no such interest or compensation can be allowed on interest-subsidy which was in the form of largess. 17. In the result this petition succeeds to the extent indicated above. The Order (Annexure P/3) so far as it disentitles the petitioner and the other members of IXth Vidhan Sabha to the benefit of subsidy after 1512.1992, is quashed Respondent No.1 -- The State Government is directed to pay to the petitioner the balance amount of subsidy which would have been paid to him but for the order (Annexure P/3). The respondent No.1 shall also pay to the petitioner Rs. 500/- (Rs. Five hundred only) towards cost of this petition. The security amount if any paid by the petitioner be refunded to him after verification.