PETITIONER:
G.D.A.
Vs.
RESPONDENT:
DELHI AUTO & GENERAL FINANCE PVT. LTD.
DATE OF JUDGMENT31/03/1994
BENCH:
VERMA, JAGDISH SARAN (J)
BENCH:
VERMA, JAGDISH SARAN (J)
SAHAI, R.M. (J)
CITATION:
1994 AIR 2263 1994 SCC (4) 42
JT 1994 (3) 275 1994 SCALE (2)357
ACT:
HEADNOTE:
JUDGMENT:
The Judgment of the Court was delivered by
VERMA, J.- These appeals are disposed of by this common jud-
ment since the points for decision are common. Writ
petition No. 16382 of 1992 Delhi Auto & General Finance
Pvt. Ltd. v. State of U.P. filed in the Allahabad High
Court was allowed by the judgment dated 22-12-1992 and for
the same reasons Writ Petition No. 25461 of 1992 Maha Maya
General Finance Co. Ltd. v. State of U. P. was allowed by
the High Court by its judgment dated 21-5-1993. Civil
Appeal Nos. 4384 and 4385 of 1993 are separate appeals by
special leave by the two respondents in the Writ Petition
No. 16382 of 1992 while similar Civil Appeal No. 634 of 1994
is by one of the respondents in Writ Petition No. 25461 of
1992. The material facts may now be briefly stated.
2. The master plan (Annexure 1) was prepared under Section
8 of the Uttar Pradesh Urban Planning and Development Act,
1973 (hereinafter referred as ‘U.P. Act’) for development of
the area shown therein on
45
1-6-1986 for the period up to 2001 A.D. In this master plan
certain lands in Villages Makanpur, Mohiuddinpur Kanauni,
Chhajarasi and Lalpur were set apart and shown for use for
‘recreational’ purposes. This area indicated for
recreational use in the master plan included certain lands
of two private colonisers, namely, Delhi Auto & General
Finance Pvt. Ltd. (hereinafter referred as ‘Delhi
Auto’) and Maha Maya General Finance Co. Ltd.(hereinafter
referred as ‘Maha Maya’). Maha Maya as well as Delhi Auto
applied to the Ghaziabad Development Authority constituted
under the U.P. Act, for permission to develop and
construct on their lands according to their lay-out plan, in
accordance with Section 15 of the U.P. Act. The plan
submitted by Maha Maya was granted conditional permission on
22-6-1991/11-7-1991. The application of Delhi Auto being
found to be defective was returned for correction and was
then presented again after removal of the defects on 20-7-
1991. It appears that by a notification dated 22-4-1991 the
Government of Uttar Pradesh had amended the land use of the
area indicated originally in the master plan for
‘recreational’ use and converted it to ‘residential’ use. On
3-7-1991 the National Capital Region Planning Board
constituted under the National Capital Region Planning Board
Act, 1985 declined to approve the change of land use of that
area from ,recreational’ to ‘residential’ made by the State
Government, on the ground that it was not in
conformity with the policy decision of the State Government.
Accordingly the Government of Uttar Pradesh reviewed it
earlier decision and by order dated 24-9-1991 directed the
Ghaziabad Development Authority not to sanction the lay-out
plan of any person or any coloniser in respect of that area
which was originally meant for recreational use. This action
was taken to effectuate the purpose of the National Capital
Region plan in the larger public interest for the planned
development of that area. The State Government ultimately
restored the original position indicated in the master plan
of use of that area for recreational purposes. On 23-4-1992
Delhi Auto was refused the permission it had sought under
Section 15 of the U.P. Act. The same was the effect of the
communication to Maha Maya which amounted to revocation of
the earlier permission. On facts, the only difference
between Delhi Auto and Maha Maya is that in the case
of Maha Maya a conditional permission had been granted by
the Ghaziabad Development Authority prior to restoration of
the land use to the original ‘recreational’ purpose,
while in the case of Delhi Auto the pending application
was rejected after restoration of the original position.
3. As earlier stated, the writ petitions filed in the
Allahabad High Court by Delhi Auto and Maha Maya challenging
the refusal of permission sought by them under Section 15
of the U.P. Act have been allowed. The reasons given
by the High Court for deciding in favour of the two private
colonisers are the following :
1. By virtue of bye-law 7.2 of the Ghaziabad Development
Authority it would be deemed that the plan of the writ
petitioners stood sanctioned on 22-11-1991. Notwithstanding
the fact that the bye-laws have not been approved by the
State Government, this consequence follows since the
46
Ghaziabad Development Authority has been following the bye-
laws in practice. There is deemed approval of the bye-laws
by the State Government under Section 57 of the U.P. Act;
2. After conversion of the land use of the area, including
the land of the writ petitioners, from ‘recreational’ as
shown in the master plan to ,residential’, the writ
petitioners had a legitimate expectation that they can
construct a housing colony according to their plans.
Accordingly amendment of the master plan under Section 13 of
the U.P. Act to restore the original land use, in the
absence of any scheme to meet strong public necessity, is
arbitrary and illegal.
3. The Ghaziabad Development Authority has merely followed
the order of the State Government dated 24-9-1991 which has
changed the land use from ‘recreational’ to ‘residential’
and back again to ‘recreational’ within a short period.
4. Sanction of the lay-out plan of Maha Maya while
refusing the permission to Delhi Auto is discriminatory.
However, in view of the revocation of permission given to
Maha Maya this ground does not survive.
4. On behalf of appellants the learned counsel appearing
for the State of Uttar Pradesh and the Ghaziabad Development
Authority have assailed the High Court’s judgment on several
grounds. The arguments advanced to support the High Court’s
judgment, as finally crystallised in the submissions of Shri
Soli J. Sorabjee appearing for Delhi Auto may be summarised,
thus :
1. The change of land use from ‘recreational’ to
‘residential’ was not prohibited in the master plan; and it
was also proper and reasonable in the facts and
circumstances of the case.
2. ‘Indirapuram’ housing project covered at least 1626
acres which includes the lands of Delhi Auto and Maha Maya
and not merely 1288 acres excluding the lands of these two
private colonisers.
3. There was violation of Article 14 of the Constitution
inasmuch as there is no rational basis for distinguishing
between the lands of Ghaziabad Development Authority and
those not of Ghaziabad Development Authority belonging to
private colonisers. It is urged that the object of housing
is equally met by the Ghaziabad Development Authority as
well as private colonisers and, therefore, the private
colonisers also should be permitted to build houses in that
area.
4. There are planning commitments made by the private
colonisers and expenses incurred for that purpose which have
to be taken in conjunction with de facto operation of bye-
laws in the practice followed.Thus fair treatment to Delhi
Auto and Maha Maya required grant of permission and sanction
of their lay-out plans on that basis.
5. Shri C.S. Vaidyanathan learned counsel for Maha Maya
also advanced the same arguments and submitted further that
the right of Maha Maya was greater in view of the permission
accorded to it earlier under Section 15 of
47
the U.P. Act before the directions given by the State
Government not to grant such permission. Learned counsel
submitted that the planning commitment made by Maha Maya was
much more in view of the investments made by it because of
the permission accorded to it. He also submitted that the
reason for change of land use back to ’recreational’ from
,residential’ was never disclosed and no notice or hearing
was given to Maha Maya which had already been granted
permission. He also submitted that private colonisers alone
being excluded while Ghaziabad Development Authority was
permitted to construct in a part of that area, the action
was discriminatory.
6. We may first dispose of the point relating to deemed
approval of the bye-laws by the State Government under
Section 57 of the Act and the deemed sanction of the plans
of respondents under bye-law 7.2 as held by the High Court.
Learned counsel for the respondents rightly made no serious
attempt to support this untenable view. Section 57 of the
U.P. Act provides for the making of bye-laws and says that
“the authority may, with previous approval of the State
Government, make bye-laws…… It is obvious that the
provision empowers the authority to make bye-laws only with
the previous approval of the State Government. This being
so, there can be no question of any deemed previous approval
of the bye-laws. Merely because the authority chooses to
follow certain procedure in the absence of any bye-laws
which happens to correspond with the draft bye-laws awaiting
approval of the State Government, the draft bye-laws do not
become those framed under Section 57 of the Act with the
express approval. The basic premise on which the High Court
proceeded to assume the existence of any bye-laws, is
clearly non-existent. The further question of a deemed
sanction under bye-law 7.2 which has not come into operation
does not, therefore, arise. It is unnecessary to discuss
this point any further. Suffice it to say that the view
taken by the High Court on the basis of bye-laws and
particularly bye-law 7.2, is wholly untenable.
7. The next ground of legitimate expectation, on which the
High Court’s conclusion is based, is equally tenuous. That
view results from a misreading of the decision of this Court
in Food Corpn. of India v. Kamdhenu Cattle Feed Industries’.
It was clearly indicated in that decision that non-
consideration of legitimate expectation of a person
adversely affected by a decision may invalidate the decision
on the ground of arbitrariness even though the legitimate
expectation of that person is not an enforceable right to
provide the foundation for challenge of the decision on that
basis alone. In other words, the plea of legitimate
expectation relates to procedural fairness in decision-
making and forms a part of the rule of non-arbitrariness;
and it is not meant to confer an independent right
enforceable by itself. That apart, the manner in which
legitimate expectation has been relied on by the High Court
in the present case, is difficult to appreciate. The High
Court on this aspect has stated as under
1 (1993) 1 SCC 71
48
“After the notification of the State
Government dated 22-4-1991 converting the use
of petitioners’ land from recreational to
residential the petitioners had a legitimate
expectation that they can construct the colony
and submitted plans. They have invested
substantial amounts and people have made
investments. They acted on the assurance of
the State Government and have altered their
position. This legitimate expectation of the
petitioners has to be balanced with the
general public interest. In the instant case
it is admitted that the authority has not made
any plans or scheme for the use of this vast
land for recreational purpose and no proposals
to this effect had been sent to the State.
The State has not disclosed the reasons for
which the user of the land is again being
changed. In the absence of any scheme to meet
strong public necessity, the present exercise
of power under Section 13 of the Act is
arbitrary and illegal.”
8. It is difficult to appreciate how the change of land
use of the area in the master plan from ‘recreational’ to
‘residential’ could give rise to a legitimate expectation in
a private coloniser owning land in that area that he could
construct a housing colony therein simply because he had
submitted some plan for approval, when grant of the
permission under Section 15 of the U.P. Act is not automatic
and the statute permitted amendment of the master plan by
change of the land use even thereafter. The mere fact that
the area was shown originally as meant for ‘recreational’
use, shows that reversion to the original land use is
equally permitted by the statute. No legitimate expectation
of the kind claimed by these private colonisers could arise
on these facts and in a situation like this clearly
contemplated by the statute itself.
9. It is for this reason that learned counsel for the
respondents modified their argument to contend that the
planning commitments and incurring of expenses together with
the de facto operation in practice of the bye-laws for grant
of the permission gave rise to the legitimate expectation
that their layout plans would be sanctioned. In the case of
Maha Maya it was urged by Shri Vaidyanathan that the
planning commitments were much more on account of permission
being granted earlier under Section 15 of the U.P. Act. The
/question, therefore, is whether even this modified argument
merits acceptance. In our opinion, it does not.
10. As earlier indicated, the decision in Food Corpn. of
India v. Kamdhenu Cattle Feed Industries’ clearly says that
legitimate expectation does not form an enforceable right to
provide an independent ground of challenge. The modified
stand taken by the learned counsel for respondents on this
aspect is equally met by this proposition. In substance the
contention of learned counsel for the respondents is that
the planning commitments and the investments made by the two
private colonisers confer on them or at least on Maha Maya
the indefeasible right to grant of the permission and
sanction of their lay-out plan which cannot be defeated by
exercise of the power of amendment of the master plan under
Section 13 of the U.P. Act. The fallacy
49
in this contention is that it upgrades the so-called
legitimate expectation, assuming it to be so in the present
case, to a legally enforceable right which a legitimate
expectation is not, it being merely a part of the rule of
nonarbitrariness to ensure procedural fairness of the
decision. It is clear that the requirements of public
interest can outweigh the legitimate expectation of private
persons and the decision of a public body on that basis is
not assailable. This contention of learned counsel for the
respondents fails.
11. Before dealing with the remaining submissions, it would
be appropriate to refer to certain provisions of the Uttar
Pradesh Urban Planning and Development Act, 1973 and the
National Capital Region Planning Board Act, 1985 (referred
hereafter as “NCR Act”).
12. The U.P. Act is made to provide for the development of
certain areas of Uttar Pradesh according to plan and for
matters ancillary thereto. In the developing areas of the
State of Uttar Pradesh the problems of town planning and
urban development need to be tackled resolutely, the
existing local bodies and other authorities being unable to
cope with the problems to the desired extent. In order to
improve the situation, the State Government considered it
advisable that in such developing areas, development
authorities on the pattern of Delhi Development Authority be
established.
13. Section 3 of the U.P. Act provides for declaration of
development areas for this purpose. Section 4 provides for
constitution of a development authority for any development
area declared under Section 3 of the Act. The Ghaziabad
Development Authority is one such authority and the lands in
question in the present case are within the development area
declared under Section 3 of the Act. Chapter III contains
Sections 8 to 12 relating to preparation, approval and
commencement of master plan and zonal development plan.
Chapter IV contains Section 13 which relates to amendment of
the master plan and the zonal development plan. Chapter V
relates to development of lands. Therein, Section 14
provides that after the declaration of any area as
development area under Section 3, no development of land
shall be undertaken or carried out or continued in that area
by any person or body unless permission for such development
has been obtained in writing in accordance with the
provisions of the Act. It also provides that no development
shall be undertaken or carried out or continued in that area
unless the same is also in accordance with such plans.
Section 15 deals with the application for permission
referred to in Section 14. It contemplates making of the
requisite enquiry before making an order refusing or
granting such permission. Section 16 prohibits use of any
land or building in contravention of the plans. Chapter VI
relates to acquisition and disposal of land required for the
purpose of development. The remaining provisions relate to
ancillary matters. Section 56 empowers the development
authority to make regulations with the previous approval of
the State Government for the administration of the affairs
of the authority. Section 57 empowers the authority to make
bye-laws with the previous approval of the State Government
for carrying out the purposes of the said Act.
50
14. It is by virtue of the provisions of the U.P. Act that
the two private colonisers, Delhi Auto and Maha Maya, in the
present case applied for permission of the authority under
the Act for the development of their lands and making
construction therein. Those lands were within the area set
apart originally in the master plan for ‘recreational’ use,
to which it reverted finally on amendment in accordance with
Section 13 of the Act.
15. Some provisions of the National Capital Region Planning
Board Act, 1985 (hereinafter referred as “NCR Act”) may now
be referred. The enactment is “to provide for the
constitution of a Planning Board for the preparation of a
plan for the development of the National Capital Region and
for coordinating and monitoring the implementation of such
plan and for evolving harmonized policies for the control of
land uses and development of infrastructure in the National
Capital Region so as to avoid any haphazard development of
that region and for matters connected therewith or
incidental thereto”. Section 2 contains the definitions.
Clause (J) therein defines “Regional Plan” to mean the plan
prepared under this Act for the development of the National
Capital Region and for the control of land uses etc. Clause
(m) defines “Sub-Regional Plan” to mean a plan prepared for
a sub-region. Section 3 provides for constitution by the
Central Government of the National Capital Region Planning
Board, in the manner provided therein. Section 7 specifies
the functions of the Board which include preparation of the
Regional Plan and to arrange for the preparation of Sub-
Regional Plans and Project Plans by each of the
participating States. Section 10 indicates the contents of
the Regional Plan which include the manner in which the land
in National Capital Region shall be used and the policy in
relation to land use and the allocation of the land for
different uses. Section 14 deals with modification of the
Regional Plan and Section 15 provides for review and
revision of the Regional Plan. Section 17 requires each
participating State to prepare a Sub-Regional Plan for the
sub-region within that State. It has also to indicate the’
specified elements including the reservation of areas for
specific land uses. Section 19 requires that before
publishing any SubRegional Plan, each participating State
shall refer such plan to the Board to enable the Board to
ensure that such plan is in conformity with the Regional
Plan. Section 20 lays down the obligation of each
participating State for the implementation of the Sub-
Regional Plan, as finalised. Section 27 provides for the
overriding effect of this Act notwithstanding anything
inconsistent therewith contained in any other law,
instrument, decree or order etc. Section 28 empowers the
Central Government to give directions to the Board for the
efficient administration of the Act, which the Board is
bound to carry out. Section 29 expressly provides that on
coming into operation of the finally published Regional
Plan, no development shall be made in the region which is
inconsistent with the Regional Plan as finally published.
Thus the overriding effect of the Act by virtue of Section
27 and total prohibition of any activity of development in
violation of the finally published Regional Plan provided in
Section 29 of the Act is sufficient to indicate that any
claim
52
Urban Development, Government of India there is a denial of
violation of NCR plan in the U.P. Sub-Region. To the letter
is annexed a note in the form of clarification and
justification. Reliance is placed on this document and
particularly on the portion at pp. 234 to 236 of the paper
book. The document says that in master plan for the
Ghaziabad Development Area, an area of about 2880 acres was
reserved for recreational activities and this was
incorporated as such in the NCR plan. Then it says “a land
use of a part of this area (1288 acres) has been changed to
residential use by U.P. Government Gazette Notification
dated 22-4-1991.” … “Out of the total area of 2880 acres
proposed in Ghaziabad master plan only 1288 acres are being
now developed as residential. While rest around 1500 acres
are still under recreational land use………. of this 1288
acres an area of about 328 acres is still undeveloped and
125 acres is under village abadi. Hence only about 835
acres is actually being developed for residential use and
1920 acres is available for recreational use.” In between
these extracts are given the details of planned regional
recreational facilities, in which at SI. No. 1 is
‘Indirapuram’ against which the area shown as 1592 acres.
Deducting 1592 from the total area of 2880 acres, the
remaining area left is only 1288 acres which is indicated
throughout as the area of which the change of land use to I
residential’ was made by the State Government. Reading this
document as a whole there is no inconsistency therein and
the area consistently shown as altered to ‘residential’ use
by the State Government is only 1288 acres and not 1626
acres. Admittedly, the lands of Delhi Auto and Maha Maya
are not within this area of 1288 acres. This being so, it
is unnecessary to discuss at length the permission for
alteration of land use of the smaller area given by the
Board under the NCR Act which does not include the
respondents’ lands.
19. However, reading all the related documents together, it
would appear that the NCR Planning Board finally permitted
conversion of land use from I recreational’ to ‘residential’
at ‘Indirapuram’ of an area lesser than even 1288 acres
confining it only to that part which was shown in Government
of U.P.’s letter dated 10-3-1992 and its enclosure (p. 231-
236 of paper book) as already utilised for ‘residential’
use. This area was mentioned as 835 acres only by saying
(at p. 236) ‘only about 835 acres is actually being
developed for residential use and 1920 acres is available
for recreational use’. The NCR planning Board, on 3-6-1992
approved the Sub-Regional Plan for U.P. SubRegion (p. II 8
of the paper book) clearly stating as under :
“2. The land use changes made vide Government
of Uttar Pradesh Gazette Notification dated
22-4-1991 in respect of Indirapuram at
Ghaziabad from ‘recreational’ to ‘residential’
use may be confined only to those parts where
planning commitments have already been made.
3. Any further major land use change in
Ghaziabad may not be effected without
consultation with NCR Planning Board.”
Learned counsel for the respondents relied on the expression
‘planning commitments’ in the above extract to support their
modified argument of legitimate expectation, rejected by us
earlier. We may add that the
53
expression in the above extract has to be read with the
particulars given in Government of U.P.’s letter dated 10-3-
1992 wherein (at p. 236) that area is reduced clearly from
1288 acres to 835 acres only. Admittedly, the respondents’
lands are not even within 1288 acres. It is clear that the
NCR Planning Board did not at any time permit the change of
land use of lands belonging to Delhi Auto and Maha Maya from
‘recreational’ to ‘residential’. In such a situation there
is no foundation for their claim for the permission sought
under Section 15 of the U.P. Act for development of their
lands and making any construction therein.
20. The argument of discrimination between the development
authority constituted under the U.P. Act and a private
coloniser does not arise for serious consideration on the
above view. It is the approval of the Board under the NCR
Act of conversion of land use to ‘residential’ of a smaller
area and not the larger area including the respondents’
lands which results in this consequence. Unless the
approval of the Board can be successfully assailed, this
point does not merit any serious consideration. This point
was neither urged before the High Court nor relied on for
allowing the writ petitions. Even before us there is no
direct challenge to the same. Moreover, assailing the
approval of conversion of land use of a part of that area by
the Board under the NCR Act would not benefit the
respondents by giving them the same approval. We do not
find any merit in the challenge made on behalf of the
respondents on the basis of Article 14 of the Constitution.
21. For the aforesaid reasons these appeals are allowed
with costs. The impugned judgments of the High Court are
set aside resulting in the dismissal of the two writ
petitions, namely, Writ Petition No. 16382 of 1992 Delhi
Auto & General Finance Pvt. Ltd. v. State of U.P. and Writ
Petition No. 25461 of 1992 Maha Maya General Finance Co.
Ltd. v. State of U.P. The appellants are to get the costs
from Respondent 1. Costs fixed at Rs 10,000 in each appeal.
55