Case Note & Summary
This special leave petition arose from a dispute concerning the allotment of school sites by the Haryana Urban Development Authority (HUDA) in Panchkula. HUDA had invited applications for allotment of sites to establish high schools, primary schools or nursery schools in zones earmarked for schools. Out of 23 available plots, HUDA allotted sites to 11 applicants and denied allotment to eight persons. The non-allotees filed writ petitions before the Punjab and Haryana High Court challenging the procedure adopted by HUDA. A learned single judge found fault with the allotments but, observing that pending writ petitions the allottees had constructed buildings and were running schools, upheld the allotments and dismissed the writ petitions. On appeal, a Division Bench of the High Court set aside the single judge's order, quashed the allotments, and issued detailed directions for fresh allotment, including notification afresh, preference for open auction, pre-determination of price, valuation of constructions, and possibility for existing allottees to participate. The allottees and HUDA challenged the Division Bench order before the Supreme Court by special leave petitions. Senior counsel for the appellants contended that HUDA had laid down criteria, constituted a committee to scrutinize credentials, and after due process allotted sites to 11 applicants, so the procedure was valid. They argued that public auction was not the only mode of disposal under Section 15 of the Haryana Urban Development Authority Act, 1977, and that the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978, particularly the proviso to Regulation 5(3), allowed allotment to specific categories such as charitable institutions and public welfare organizations. Appellants also highlighted that they had incurred huge costs in constructing buildings pending litigation and sought moulding of relief. The Supreme Court examined Section 15 of the Act and Regulations 3, 4 and 5. Section 15(3) empowers HUDA to sell, lease or transfer land whether by auction, allotment or otherwise. Regulation 3(c) similarly allows disposal by sale or lease either by allotment or auction. The Court held that when a public authority discharges its public duty, the word 'otherwise' must be construed consistent with public purpose and that clear and unequivocal guidelines or rules are necessary. The discretionary power cannot be exercised at the whim and fancy of public authorities or for extraneous consideration. Relevant criteria should be pre-determined by specific rules or regulations and published. In the absence of such statutory regulations, the salutary procedure would be by public auction. The Court agreed with the Division Bench that allotments made without statutory regulations were not correct in law, and it did not lightly brush aside the Division Bench's doubts about bona fides. Accordingly, the Supreme Court upheld the Division Bench order subject to further directions. It directed that the expert committee determine the market value of the sites as prevailing on September 11, 1992. An option was given only to four named petitioners—Ajay Memorial School, Ashok Trehan Memorial Charitable Trust, Manav Mangal Society and Lt. Col. Y.P. Mahindru—to pay the market price in lump sum. If they accepted, the offer was to be placed before the High Court for approval after considering valuation and relevant material. HUDA was also directed to frame an appropriate scheme for allotment of sites. The Court essentially affirmed the requirement of transparency and predetermined guidelines in disposal of public land while providing limited equitable relief to existing allottees who had made constructions.
Headnote
A) Administrative Law - Disposal of Public Land - Mode of Disposal and Discretionary Power - Haryana Urban Development Authority Act, 1977, Section 15(3) read with Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978, Regulation 3(c) - Section 15(3) provides that HUDA may sell, lease or transfer land whether by auction, allotment or otherwise; Regulation 3(c) similarly permits sale or lease either by allotment or auction; Court construed 'otherwise' to require clear and unequivocal guidelines consistent with public purpose; absent such guidelines, public auction is the salutary procedure; Held that HUDA's discretionary allotment to private institutions without pre-determined criteria was not correct in law and Division Bench order quashing allotments was upheld (Paras 1-7). B) Constitutional Law - Judicial Review of Administrative Action - Requirement of Pre-determined Criteria and Transparency - Haryana Urban Development Authority Act, 1977 and Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 - Public authority cannot exercise discretionary power at whim or fancy or for extraneous consideration; relevant criterion should be pre-determined by specific rules and published; Division Bench correctly doubted bona fides of allotments; Court directed HUDA to frame an appropriate scheme for future allotments to ensure fairness and transparency; Held that in absence of statutory regulations, allotment to private institutions was invalid (Paras 1-7). C) Writ Jurisdiction - Moulding of Relief - Equitable Consideration for Investments Made During Pendency - Constitution of India, Article 136 (Special Leave Petition) - Allottees had constructed buildings during pendency of writ petitions; Court upheld quashing but granted limited relief by directing expert committee to determine market value as on September 11, 1992 and giving option to four named allottees to pay market price in lump sum; High Court to approve valuation; Held that while legality must be maintained, hardship from investments could be mitigated through compensation option (Paras 1-7).
Issue of Consideration
Whether the Division Bench of the Punjab and Haryana High Court was correct in quashing allotments of school sites by HUDA and directing fresh allotment through public auction or other transparent process; whether public auction is the only permissible mode under Section 15(3) of the Haryana Urban Development Authority Act, 1977 and Regulation 3(c) of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978; and whether relief should be moulded in view of constructions made by allottees pending litigation.
Final Decision
The Supreme Court upheld the Division Bench order subject to further directions. It directed that the expert committee determine the market value of the allotted sites as on September 11, 1992. An option was given only to Ajay Memorial School, Ashok Trehan Memorial Charitable Trust, Manav Mangal Society and Lt. Col. Y.P. Mahindru to pay the market price in lump sum; if accepted, the offer was to be placed before the High Court for approval. HUDA was also directed to frame an appropriate scheme for allotment of sites. The Court affirmed the requirement of transparent, pre-determined guidelines for disposal of public land.
Law Points
- Disposal of public land by a public authority must be consistent with public purpose and clear
- pre-determined guidelines
- absence of specific regulations makes public auction the default mode
- discretionary power cannot be exercised arbitrarily or for extraneous considerations
- relevant criteria should be published
- court may mould relief to protect investments made during pendency
