REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2965   OF 2011 (Arising out of SLP(C) NO. 25509 OF 2009)

Akhil Bhartiya Upbhokta Congress      …Appellant(s)  

Versus

State of Madhya Pradesh and others    …Respondent(s)

J UD G M E N T

G.S. Singhvi,  J.

1. Leave granted.

2. Whether the decision of the Government of Madhya Pradesh to allot  

20 acres land comprised in Khasra Nos. 82/1 and 83 of village Bawadiya  

Kalan,  Tehsil  Huzur,  District  Bhopal  to  late  Shri  Kushabhau  Thakre  

Memorial Trust (for short, “the Memorial Trust”)/Shri Kushabhau Thakre  

Training  Institute  (respondent  No.  5)   without  any  advertisement  and  

without  inviting  other  similarly  situated  organisations/institutions  to  

participate  in  the  process  of  allotment  is  contrary  to  Article  14  of  the

Constitution and the provisions of the Madhya Pradesh Nagar Tatha Gram  

Nivesh Adhiniyam, 1973 (for short, “the Act”) and whether modification of  

the  Bhopal  Development  Plan  and change of  land  use  is  ultra  vires  the  

mandate  of  Section  23A  of  the  Act  are  the  questions  which  arise  for  

consideration in this appeal filed against the order of the Madhya Pradesh  

High Court dismissing the Writ Petition filed by the appellant.   

3. That facts necessary for deciding the aforementioned questions have  

been culled out from the pleadings of the parties and the records produced  

by the learned counsel for the State. The same are enumerated below:

(i)  On  18.6.2004,  Shri  Kailash  Joshi  made  a  written  request  to  the  

Principal  Secretary,  Housing  Department,  Government  of  Madhya  

Pradesh (for short, “the Principal Secretary, Housing”) by describing  

himself as a Convenor of the Memorial  Trust for reservation of 30  

acres  land  comprised  in  Khasra  Nos.83,  85/1  and  85/2  of  village  

Bawadiya  Kalan,  in  favour  of  the  Memorial  Trust  to  enable  it  to  

establish an All India Training Institute in the memory of late Shri  

Kushabhau  Thakre.

(ii)  Although,  letter  dated  18.6.2004  was  addressed  to  the  Principal  

Secretary, the same was actually handed over to Shri Babu Lal Gaur,  

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the  then Minister,  Housing and Environment,  Madhya Pradesh.  He  

forwarded the same to the Principal Secretary for immediate action.  

The latter directed that steps be taken for placing the matter before the  

reservation  committee.   Simultaneously,  letters  were  issued  to  

Commissioner-cum-Director,  Town  and  Country  Planning,  Bhopal  

(respondent No.3) and Collector, Bhopal (respondent No. 4) to send  

their respective reports.   

(iii)   Respondent No.3 submitted report dated 8.7.2004 indicating therein  

that  as  per  Bhopal  Development  Plan,  land  comprised  in  Khasra  

Nos.83 and 85/1 was reserved for residential and plantation purposes  

and Khasra No.85/2 was non government land.  After going through  

the same, the Principal Secretary, Housing opined that land cannot be  

reserved for  the Memorial  Trust.   However,  Shri  Rajendra  Shukla,  

State Minister, Housing and Environment recorded a note that he had  

requested the Coordinator of the trust to send a revised proposal to the  

Government and directed that the new proposal be put up before him.

(iv)   In his report dated 26.7.2004, respondent No. 4 mentioned that land  

measuring  11.96  acres  comprised  in  Khasra  No.86  and  land  

measuring 22.06 acres comprised in Khasra No.85/1 (total area 34.02  

acres) was Nazool land and the same was recorded in the name of the  

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State Government and Khasra No.85/2 belonged to Bhoomidar.  He  

also mentioned that  the  land in  question is  covered by the  Capital  

Project but there are no trees, religious structure or electricity lines,  

though  a  road  was  proposed  by  the  Town  and  Country  Planning  

Department.

(v)  While  the  process  initiated  for  reservation  of  land  was  at  a  

preliminary stage, Shri Kailash Joshi submitted an application dated  

31.7.2004  to  the  Registrar,  Public  Trust,  Bhopal  (for  short,  ‘the  

Registrar’) under the Madhya Pradesh Public Trusts Act,  1951 (for  

short  ‘the  1951  Act’)  for  registration  of  a  trust  in  the  name  of  

respondent  No.  5  by  describing  himself  and  S/Shri  M.  Venkaiah  

Naidu,  Lal  Krishna  Advani,  Balwant  P.  Apte  and Sanjay  Joshi  as  

Trustees.  In the application, Shri M. Venkaiah Naidu was shown as  

the first President of the trust and Shri Kailash Joshi as its Secretary  

and Managing Trustee.   

(vi)   After complying with the procedure prescribed under the 1951 Act,  

the Registrar passed order dated 6.10.2004 for registration of the trust.  

The certificate of registration was issued on 24.12.2004.

(vii) In the meanwhile, Shri Kailash Joshi sent letter dated 11.8.2004 to the  

Principal  Secretary,  Housing  by  describing  himself  as  Managing  

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Trustee  of  respondent  No.5  and  submitted  fresh  proposal  for  

reservation of 30 acres land out of Khasra Nos.82/1 and 83 of village  

Bawadiya Kalan in favour of respondent No.5.

(viii) By letter dated 20.9.2004, respondent No. 3 informed the Secretary,  

Housing  and  Environment Department (respondent No.2) that 4665  

acres land of villages Bawadiya Kalan and Salaiya had already been  

notified  in  Madhya  Pradesh  Gazette  dated  2.5.2003  for   town  

development  scheme  at  Misrod.   He   also  indicated  that  land  in  

Khasra Nos.82 and 83 is included in the Scheme and notice to this  

effect had already been published under Section 50 of the 1973 Act.  

(ix)   After some time, respondent No.3 sent letter dated 3.9.2004 to the  

Principal  Secretary,  Housing  and  pointed  out  that  in  the  Bhopal  

Development  Plan,  2005,  land  comprised  in  Khasra  No.82  of  

Bawadiya  Kalan  village  is  earmarked  for  public  and  semi-public  

(health) purpose and land comprised in Khasra No.83 is earmarked for  

residential  purpose.   He also indicated that out of the total  area of  

Khasra No.83 i.e. 11.96 acres, 24 metre wide road is proposed and 33  

metres land adjacent to the bank of Kaliasot river is included in the  

green belt and out of 6 acres land for residential purpose, 2 acres had  

been reserved for office of the  Madhya Pradesh Sanskrit Board and  

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thus,  only 4 acres  land was available.  He sent  another  letter  dated  

21.9.2004 to the Principal Secretary, Housing mentioning therein that  

use of land comprised in  Khasra No. 82/1 of village Bawadiya Kalan  

is  shown  as  “health  under  public  and  semi-public”  in  the  Bhopal  

Development  Plan  2005  and  use  of  the  land  comprised  in  Khasra  

No.83  is  shown as  residential  and  if  land  is  to  be  allotted  to  the  

Memorial  Trust,  then  the  earlier  land  use  will  be  required  to  be  

cancelled.   

(x)  However,  without  effecting  change  of  land  use  by  following  the  

procedure  prescribed  under  the  Act,  the  State  Government  issued  

order dated 25.9.2004 and reserved 30 acres land comprised in Khasra  

Nos.  82/1  and  83  of  village  Bawadiya  Kalan  in  favour  of  the  

Memorial  Trust  in anticipation of  approval  by the  land reservation  

committee, which was duly granted.

(xi)  As a sequel to the reservation of land, Deputy Secretary, Revenue  

Department vide his letter dated 30.9.2004 directed respondent No.4  

to immediately send proposal to respondent No.3 for allotment of land  

to the Memorial Trust.

(xii) In view of the directive issued by the State Government, Tehsildar,  

Capital Project (Nazul), Bhopal, on being instructed to do so, issued  

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advertisement  dated  4.10.2004  and  invited  objections  against  the  

proposed  allotment  of  30  acres  land  to  the  Memorial  Trust  from  

Khasra Nos.82/1 and 83 of village Bawadiya Kalan. The same was  

published in “Dainik Pradesh Times”.  However just after two days,  

respondent No.4 vide his letter dated 8.10.2004  submitted proposal  

for allotment of 30 acres land to the Memorial Trust.  In paragraph 6  

of  his  letter,  respondent  No.4  clearly  indicated  that  the  land  falls  

within the limits of Bhopal Municipal Corporation and, as such, in  

terms of Chapter IV-1 of the Madhya Pradesh Revenue Book Circular  

(for short, “the RBC”) , the same should not be allotted at a price less  

than  the  minimum price.   He also  indicated that  price  of  the  land  

would be Rs.7,84,8000/-, of which 10 per cent should be deposited as  

a condition for allotment.   After 2½ months, respondent No. 4 sent  

letter  dated  23.12.2004  to  the  Additional  Secretary,  Revenue  

Department  and  informed  him  that  the  Memorial  Trust  has  not  

deposited 10 per cent of the premium.   

(xiii) On coming to know the aforesaid communications, Shri Kailash Joshi  

sent letters dated 19.2.20005 and 20.3.2005 to respondent No. 4 and  

Secretary,  Revenue  Department  respectively  and  assured  that  the  

premium will be deposited immediately after the allotment of land.  

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(xiv) After about 8 months of the submission of proposal for allotment of  

30 acres land to the Memorial  Trust,  Shri  Kailash Joshi  sent letter  

dated  16.5.2005  to  respondent  No.  4  mentioning  therein  that  the  

institute would require only 20 acres land. Thereupon, Nazul Officer,  

Capital  Project,  Bhopal  sent  letter  dated 24.6.2005 to  Shri  Kailash  

Joshi  and informed him that the premium of 20 acres land would be  

Rs.5,22,72,000/- and 10 per cent thereof i.e. Rs.52,27,200/- should be  

deposited as earnest money.  However, the needful was not done and  

only Rs. 25,00,000/- were deposited on behalf of respondent No. 5.   

(xv) For  next  about  seven  months,  the  matter  remained  under  

correspondence  between  different  departments  of  the  State  

Government.  During the interregnum, Shri Babu Lal Gaur became  

Chief Minister of the State.  On 24.10.2005, he directed that matter  

relating to allotment of land to respondent No.5 be put up in the next  

meeting of the Cabinet scheduled to be held on 26.10.2005.  On the  

same day, Secretary, Revenue Department submitted a detailed note  

and suggested  that  keeping in  view the limited  resources  available  

with  the  State  Government,  land  should  be  auctioned  so  that  the  

administration may garner maximum revenue. His suggestion was not  

accepted by the Council of Ministers, which decided to allot 20 acres  

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land in the name of the Memorial Trust at the rate of Rs.40 lakhs per  

hectare.  The decision of the State Government was communicated to  

respondent No. 4 vide order dated 27.1.2006.

(xvi) As a sequel to the allotment of land, Nazul Officer, Capital Project  

vide  his  letter  dated  29.2.2006  called  upon  Shri  Kailash  Joshi  

(Secretary of respondent No. 5) to deposit Rs. 55,94,000/-.  However,  

instead of depositing the amount Shri Kailash Joshi addressed letter  

dated  31.3.2006 to  the  Revenue Minister  with  the  request  that  the  

premium may be waived because the Institute was being established  

in public interest and will be training the elected representatives and  

undertaking research on important issues and it will have no source of  

income. The political set up of the State Government readily obliged  

him inasmuch as the issue was considered in the meeting of Council  

of Ministers held on 9.5.2006 and it was decided that the amount of  

Rs. 25,00,000/- may be treated as the total premium and land be given  

to the Memorial  Trust  by charging annual  lease rent  of Re.1 only.  

This decision was communicated to respondent No. 4 vide letter dated  

19.6.2006.

(xvii) Subsequently,  on  a  representation  made  by  Shri  Kailash  Joshi,  

orders/communications  dated  25.9.2004,  27.1.2006  and  19.6.2006  

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were amended and the name of respondent No. 5 was inserted in place  

of the Memorial  Trust.   Thereafter, lease agreement dated 6.1.2007  

was  executed  between  the  State  Government  and  Secretary  of  

respondent No.5 in respect of 20 acres land  for a period ending on  

05.12.2037 at a premium of Rs. 25,00,000/- and  an yearly rent of  

Re.1.

(xviii) Since the use of land comprised in Khasra Nos. 82/1 and 83 of village  

Bawadiya Kala was shown in the Bhopal Development Plan as public  

and semi-public (health) and the same could not have been utilized for  

the  purpose  of  respondent  No.  5,  the  State  Government  issued  

notification  dated  6.6.2008  under  Section  23-A(1)(a)  of  the  Act  

proposing  change of land use in respect of 19.75 acres land of Khasra  

No.82/1(part) of Village Bawadiya Kalan from public and semi-public  

(health) to public and semi public and invited objections/suggestions.  

The  notification  was  published  in  the  Official  Gazette  and  two  

newspapers, namely, “Dainik Bhaskar” and “Sandhya Prakash” dated  

9th and 10th June, 2008.  Five persons representing Bawadiya Uthaan  

Samiti, “Sangwari” - Society for the Resource Companion, Koshish  

Society, Neeraj Housing Society, Satpura Vigyan Sabha and Swadesh  

Developers and Colonizers filed their objections against the proposed  

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change  of  land  use.   They  were  given  opportunity  of  hearing  by  

Deputy Secretary, Housing and Environment Department, who opined  

that  the  objections  were  untenable.   Her  recommendation  was  

approved by the Secretary, Housing and Environment Department and  

the concerned Minister.  Thereafter, final notification dated 5.9.2008  

was issued under Section 23-A(2) of the Act.         

4. The appellant, who is engaged in public welfare activities in general  

and consumers welfare in particular and claims to have received awards for  

good and meritorious  performance  including  Swami Vivekananda  Award  

challenged  the  allotment  of  land  to  respondent  No.5  in  Writ  Petition  

No.10617  of  2007,  on  the  grounds  of  violation  of  Article  14  of  the  

Constitution  and arbitrary  exercise  of  power.  The  Division Bench of  the  

High Court summarily dismissed the Writ Petition by observing that land  

belongs to the Government and it is for the Government to decide whom the  

same should be allotted as per its policy and no case of violation of any legal  

or constitutional right has been made out by the petitioner.

5.         In  response  to  the  notice  issued  by  this  Court,  counter  dated  

23.3.2010 was filed on behalf of respondent Nos.1 to 4 with an affidavit of  

Shri  Kishore  Kanyal,  Nazul  Officer/SDO,  T.T.  Nagar,  Bhopal.  After  the  

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arguments were heard on 3.1.2011, additional affidavit dated 10.1.2011 was  

filed by Shri Umashankar Bhargav, Nazul Officer, Bhopal giving the details  

of  various  proceedings  which culminated  in  the  allotment  of  land  to  the  

Memorial Trust, subsequent change in the name of the allottee and change of  

land use under Section 23-A.  Along with his affidavit,  Shri Umashankar  

Bhargav  enclosed  list  showing  allotment  of  land  to  various  institutions,  

organizations and individuals and copy of order dated 28.10.2009 passed by  

the Division Bench of the High Court in Writ Petition No.4088 of 2009.  In  

paragraph 13 of his affidavit, the deponent made a categorical statement that  

neither the petitioner nor any member of the public submitted any objection  

against the proposed change of land use.  

On  13.1.2011,  the  Court  directed  the  State  Government  to  file  an  

affidavit to show as to how many allotments have been made at an yearly  

rent  of  Re.  1/-.  Thereupon,  Shri  Anil  Srivastava,  Principal  Secretary,  

Revenue  Department,  Government  of  Madhya  Pradesh  filed  an  affidavit  

along  with  list  of  69  institutions  and   organizations  to  whom land  was  

allotted at an annual rent of Re. 1 only without charging  any premium.   

 After  the  arguments  were  concluded,  another  affidavit  of  Shri  

Umashankar  Bhargav  was  filed  on  18.1.2011.  He  tendered  apology  for  

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making a wrong statement in paragraph 13 of affidavit dated 10.1.2011 and  

filed copies of the following documents:

i) Application dated 18.09.2007 made by Shri Kailash Joshi for erection of  

building in Khasra No. 82/1, Bawadiya Kalan;

ii)  Letter  dated  04.02.2008  sent  by  respondent  No.3  to  the  Principal  

Secretary, Housing, proposing change of land use of Khasra No.82/1 (part)  

from public and semi public (health) and road to public and semi public and  

road;

iii) Paper publications dated 09.06.2008 and 10.06.2008;

iv) Notice dated 04.08.2008 issued to the objectors;

v)  Note-sheets  dated  01.09.2009  and  02.09.2009  of  the  Housing  and  

Environment Department;

vi)  Letter  dated  13.09.2006  sent  by  respondent  No.4  to  the  Principal  

Secretary, Housing, letter dated 06.10.2006 issued by the State Government  

for amending memo dated 25.09.2004 and  letter dated 02.11.2006 sent  by  

the State Government to respondent No.4 for amendment of orders dated  

27.01.2006 and 19.06.2006.

Learned counsel for the appellants also placed on record xerox copy  

of the cover page of Writ Petition No. 933 of 2005 filed by the appellant by  

way of public interest litigation challenging the allotment of land, which was  

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reserved  for  park,  lawn,  parking  and  open  spaces  by  Madhya  Pradesh  

Housing Board to Punjabi Samaj, Bhopal as also copy of the interim order  

passed by the High Court whereby the allottee was restrained from raising  

further construction.  

Arguments:

6. Shri  Raju  Ramchandran,  learned  senior  counsel  for  the  appellant,  

criticized the impugned order  and argued that  the High Court  committed  

serious error by summarily dismissing the writ petition without examining  

and  adjudicating  the  important  questions  of  law  relating  to  violation  of  

Article 14 of the Constitution and the provisions of the Act and the Rules.  

Learned senior counsel submitted that the exercise undertaken by the State  

Government for reservation of land and allotment of a portion thereof to  

respondent  No.5  without  any  advertisement  and  without  adopting  a  

procedure consistent with the doctrine of equality enshrined in Article 14 of  

the Constitution and waiver of a substantial portion of the premium are acts  

of  gross  favoritism  and,  therefore,  the  allotment  in  question  should  be  

declared as  nullity.   Shri  Ramchandran then argued that  the notifications  

issued  by  the  State  Government  for  change  of  land  use  are  liable  to  be  

quashed because the same are ultra vires  the provisions of Section 23A(1)  

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and (2) of the Act.   Learned senior counsel referred to notification dated  

06.06.2008  to  show  that  the  same  did  not  contemplate  modification  of  

Bhopal Development Plan for any proposed project of the Government of  

India or the State Government and its enterprise or for any  proposed project  

relevant to development of the State or for implementing a scheme framed  

by the Town and Country Development Authority (for short ‘the Authority’)  

and argued  that  the  development  plan cannot  be  modified  under  Section  

23A(1)   for  the  benefit  of  a  private  individual,  or  group  of  persons  or  

organization or institution.  Learned senior counsel submitted that the notice  

issued under Section 23A(2) was incomplete inasmuch as the draft modified  

plan was not published so as to enable the members of public to effectively  

oppose the proposed modification of the development plan.  In the end, Shri  

Ramchandran argued that the decision of the State Government to indirectly  

reserve the land in favour of Respondent No.5 with retrospective effect is  

liable to be quashed because as on the date of reservation the said respondent  

had not been registered as a trust.    

7. Shri Ravi Shanker Prasad, learned senior counsel appearing for the  

State of Madhya Pradesh and other official respondents, challenged the locus  

standi of the appellant on the premise that the averments contained in the  

writ petition were vague to the core and the High Court rightly refused to  

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entertain  the  same  as  a  petition  filed  in  public  interest.  Learned  senior  

counsel  then  referred  to  the  provisions  of  the  Act,  the  Madhya  Pradesh  

Government Rules of  Business,   the RBC and argued that  the impugned  

allotment cannot be termed as arbitrary or vitiated due to violation of Article  

14 because the State Government has a long standing policy of allotting land  

to  social,  cultural,  religious,  educational  and  other  similar  

organizations/institutions  without  issuing  advertisement  or  inviting  

applications  from the  public.  In  support  of  this  argument,  learned  senior  

counsel  referred  to  the  list  of  the  allottees  annexed  with  affidavit  dated  

10.1.2011 of Shri Umashankar Bhargav. Learned senior counsel relied upon  

the  judgments  of  this  Court  in  Ugar  Sugar  Works  Ltd.  v.  Delhi  

Administration (2001) 3 SCC 635, State of U.P. v. Chaudhary Ram Beer  

Singh (2005) 8 SCC 550, State of Orissa v. Gopinath Dash (2005) 13 SCC  

495 and Meerut Development Authority v. Association of Management  

Studies (2009) 6 SCC 171 and argued that the Court cannot exercise the  

power  of  judicial  review  to  nullify  the  policy  framed  by  the  State  

Government to allot Nazul land without advertisement.   Shri Ravi Shanker  

Prasad  referred  to  paragraph  26  of  the  RBC  and  argued  that  the  State  

Government  is  possessed  with  the  power  to  make  allotment  without  

charging premium or waive the same.  Learned senior counsel then relied  

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upon a passage from Chapter IV of the Law of Trusts and Charities by Atul  

M Setalvad, judgments of this Court in  State of Uttar Pradesh v. Bansi  

Dhar  (1974)  1  SCC  447  and  Canbank  Financial  Services  Ltd.  v.  

Custodian (2004) 8 SCC 355 and argued that intention to create a trust was  

sufficient for making an application for reservation and allotment of land in  

favour of  respondent  No.5.   He submitted  that  while  making request  for  

reservation of land in favour of the Memorial Trust, Shir Kailash Joshi had  

made it clear that the same will be used for establishing a training institute in  

the name of late Shri Khushabhau Thakre and this was a clear indication to  

the State Government that a trust will be created for managing the institute.   

8. Shri Ranjit Kumar, learned senior counsel appearing for respondent  

No.5,  submitted  that  this  Court  should  not  interfere  with  the  impugned  

allotment because at every stage of the proceedings i.e. reservation of land,  

formation of  trust  and change  of  land  use,  objections  were  invited  from  

public but at no stage the appellant had filed any objection.  The learned  

counsel  extensively  referred  to  the  RBC,  the  provisions  of  the  Act  and  

Madhya  Pradesh  Nagar  Tatha  Gram  Nivesh  Viksit  Bhoomiyo,  Griho,  

Bhavano Tatha Anya Sanrachanao Ka Vyayan Niyam, 1975 (for short ‘the  

Rules’) and argued that the allotment of land to respondent No.5 and change  

of land use are not vitiated due to violation of any constitutional or legal  

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principle warranting interference by the Court.   Shri  Ranjit  Kumar relied  

upon   Sections  3,5  and  6  of  the  Indian  Trusts  Act,  1882  and  Sections  

2,4,5,6,8,11,32 and 33 of the 1951 Act and argued that intention to create  

trust  was sufficient  to enable Shri  Kailash Joshi to make applications for  

reservation and allotment of land in the name of the institute and, in any  

case, the appellant cannot take advantage of non-registration of the trust up  

to 6.10.2004 because on the date of actual allotment i.e. 27.01.2006 the trust  

stood registered.  Learned senior counsel also emphasized that once the trust  

was  registered,  the  factum of  registration  will  relate  back to  the  date  of  

application i.e. 31.07.2004, which was prior to the reservation of land by the  

State Government.  In the end, Shri Ranjit Kumar submitted that the Court  

may  not  nullify  the  impugned allotment  at  the  instance  of  the  appellant  

because it did not question hundreds of similar allotments made in favour of  

other organizations/institutions.  Learned senior counsel also relied upon the  

judgment of this Court in  Harsh Dhingra v.  State of Haryana (2001) 9  

SCC 550 and argued that the impugned allotment may not be quashed and  

the law which may be laid down by this Court should govern the allotments,  

which may be made in future.

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9. We  have  considered  the  respective  submissions.  For  deciding  the  

questions  arising  in  the  appeal,  it  will  be  useful  to  notice  the  relevant  

provisions of the Act, the Rules and the RBC.   

10. The  Act  was  enacted  to  make  provisions  for  planning  and  

development and use of land; to make better provisions for the preparation  

of  development  plans  and zoning plans  with  a  view to  ensure that  town  

planning  schemes  are  made  in  a  proper  manner  and they  are  effectively  

executed.  The Act also provides for constitution of Town and Development  

Authority  for  proper  implementation  of  Town and Country  Development  

Plan and for the development and administration of special areas through  

Special  Area Development Authority and also to make provisions for the  

compulsory acquisition of land required for the purpose of the development  

plans and for achieving the objects of the Act.   Chapter  IV  of  the  Act  

(Sections  13  to  19)  contains  provisions  relating  to  planning  areas  and  

development  plans.  Under  Section  13(1),  the  State  Government  is  

empowered to  constitute  planning  areas  for  the  purposes  of  the  Act  and  

define limits thereof.  In terms of Section 13 (2), the State Government can  

alter the limits of the planning area, amalgamate two or more planning areas,  

divide any planning area into two or more planning areas and also declare  

that whole or part of the area constituting the planning area shall cease to be  

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so.  Section 14 casts a duty on the Director of Town and Country Planning to  

prepare an existing land use map, a development plan and do other activities  

specified  in  clauses  (d)  and (e)  of  that  section.   Section 15 contains  the  

procedure for preparation of existing land use map.  Section 16 lays down  

that  after  publication  of  the  existing  land  use  map  under  Section  15  no  

person shall change the use of any land or carry out any development of land  

for  any  purpose  other  than  those  indicated  in  the  existing  land  use  map  

without prior permission of the Director.   It also lays down that no local  

authority or any officer or other authority shall grant permission for change  

in use of land in violation of the existing land use map.   Section 17 (as  

amended by M.P. Act No. 8 of 1996) lays down that a development plan  

shall take into account any draft five-year and Annual Development plan of  

the  district  prepared  under  the  Madhya  Pradesh  Zila  Yojana  Samiti  

Adhiniyam, 1995 in respect of the planning area and shall broadly indicate  

the land use proposed in the planning area; allocate broadly areas or zones of  

land,  keeping  in  view the  regulations  of  natural  hazard  prone  areas,  for  

residential,  industrial,  commercial  or  agricultural  purposes;  open  spaces,  

parks and gardens, green-belts, zoological gardens and playgrounds; public  

institutions  and  offices  and  such  special  purposes  as  the  Director  may  

consider proper.    Other factors  enumerated in clauses (c) to (j)  are also  

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required to be taken into consideration while preparing a development plan.  

Section 17-A(1) mandates  the constitution of a  Committee  consisting of  

various  persons  specified  in  clauses  (a)  to  (i)  thereof.   The  role  of  the  

Committee is to hear the objections received after publication of the draft  

development plan under Section 18 and suggest modifications or alterations,  

if any.  Section 18 provides for publication of the draft development plan for  

inviting  objections  and  suggestions  from  public.   The  objections  and  

suggestions, if any, received are required to be placed before the  Committee  

constituted under Section 17-A(1) which shall, after giving opportunity of  

hearing  to  the  affected  persons,  suggest  appropriate  modifications  in  the  

draft development plan.  After receiving the report of the  Committee, the  

Director  is  required  to  submit  the  development  plan  for  approval  of  the  

Government.  Section 19 provides for approval of the development plan with  

or without modifications by the State Government.  In a given case the State  

Government  can  return  the  development  plan  with  a  direction  that  fresh  

development plan be prepared.  Where the State Government approves the  

development plan with modification, a notice is required to be published in  

the  Gazette  inviting  objections  and   suggestions  in  respect  of  such  

modification  and  final  plan  is  to  be  published  after  considering  the  

objections  and  suggestions,  if  any,  received  and  giving  opportunity  of  

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hearing to those desirous of  being heard.   In terms of sub-section (5)  of  

Section  19  the  development  plan  comes  into  operation  from the  date  of  

publication of the notice in the Gazette.  Chapter V deals with zoning plan.  

Section  20  lays  down  that  the  local  authority  may,  on  its  own  motion,  

prepare a zoning plan after publication of the development plan.  If the State  

Government sends a requisition for that purpose then also the local authority  

is required to prepare a zoning plan.  Section 21 specifies the matters which  

are  to  be incorporated  in  the  zoning plan.   By virtue  of  Section 22,  the  

provisions of Sections 18 and 19 have been made applicable for the purpose  

of preparation, publication, approval and operation of zoning plan.  Section  

23(1) empowers the Director to undertake a review and evaluation of the  

development plan either on his own motion or in terms of the directions  

given by the State Government.  Likewise,  under Section 23(4) the local  

authority can undertake review and evaluation of the zoning plan on its own  

motion  or  as  per  the  direction  of  the  State  Government  or  the  Director.  

Section 23-A was inserted in the Act by M.P. Act 22 of  1992 and was  

substituted by M.P. Act 22 of 2005.  In terms of Section 24(1), the overall  

control  of  development  and  use  of  land  in  the  State  vests  in  the  State  

Government.  Section 24(2) lays down that subject to the control of the State  

Government under sub-section (1) and the rules made under the Act,  the  

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overall control of development and use of land in the planning area shall vest  

in  the  Director  from  the  date  appointed  by  the  State  Government  by  

notification. Sub-section (3) empowers the State Government to make rules  

to regulate control of development and use of land in planning area.  Section  

25(1) lays down that after coming into force of the development plan, the  

use and development of land shall be in accordance with the development  

plan.   Section  26  lays  down  that  after  coming  into  operation  of  the  

development plan, no person shall change the use of any land or carry out  

any development without written permission of the Director.  Proviso to this  

section contains some exceptions in which works can be carried out without  

prior permission of the Director.  Chapter VII (Sections 38 to 63A) provides  

for  establishment  of  Town  and  Country  Development  Authority  and  its  

status  as  a  body   corporate,  constitution  of  the  Authority,  tenure  and  

remuneration etc. of Chairman and Vice Chairman, appointment of Chief  

Executive Officer and other officers and servants.  Section 49 specifies the  

factors which may be included in a town development scheme.  Section 50  

regulates preparation of a town development scheme and publication thereof  

in the Gazette etc.  Section 58 empowers the authority to make regulation for  

disposal of developed lands, houses, buildings and other structures.  This is  

subject to the rules which may be made by the State Government in this  

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behalf.  Section 85, which finds place in Chapter XI, confers power upon the  

State Government to make rules for carrying out the purposes of the Acts.  

For the sake of reference, Sections 14(a), (b), 15, 17(a), (b), 23-A, 25(1), 26  

and 58 of the Act are reproduced below:

“14.    Director to prepare development plans.  —Subject to  the provisions of this Act and the rules made thereunder, the  Director shall, —

(a)     prepare an existing land use map;

(b)     prepare a development plan;

15. Existing land use maps -  (1) The  Director  shall  carry  out  the  survey  and  prepare  an  existing land use map indicating the natural hazard prone areas]  and,  forthwith  publish  the  same  in  such  manner  as  may  be  prescribed together with public notice of the preparation of the  map and of place or places where the copies may be inspected,  inviting objections and suggestions in writing from any person,  with  respect  thereto  within  thirty  days  from  the  date  of  publication of such notice. (2)After  the  expiry  of  the  period  specified  in  the  notice  published  under  sub-section  (1),  the  Director  may,  after  allowing a reasonable  opportunity of  being heard to all  such  persons  who  have  filed  the  objections  or  suggestions,  make  such modifications therein as may be considered desirable.

(3)As soon as may be after the map is adopted with or without  modifications the Director shall publish a public notice of the  adoption of the map and the place or places where the copies of  the same may be inspected. (4)A copy of the notice shall also be published in the Gazette  and it shall be conclusive evidence of the fact that the map has  been duly prepared and adopted.

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17.  Contents  of  development  plan.—  A  development  plan  shall  take  into  account  any  draft  five-year  and  Annual  Development plan of the district  prepared under the Madhya  Pradesh Zila Yojana Samiti Adhiniyam, 1995 (No. 19 of 1995)  in which the planning area is situated and shall,  

(a) indicate  broadly the land use proposed in the planning  area;

(b) allocate broadly areas or zones of land, keeping in view  the regulations for natural hazard prone areas, for–  

(i) residential,  industrial,  commercial  or  agricultural,  purpose;

(ii) open spaces, parks and gardens, green-belts,  zoological  gardens and playgrounds;

(iii) public institutions and offices; (iv) such special purposes as the Director may deem fit;

23-A. Modification of Development Plan or zoning Plan by  State Government in certain circumstances. –  

(1)(a) The State Government may, on its own motion or on the  request of a Town and Country Development Authority, make  modification in the development plan or the zoning plan for any  proposed  project  of  the  Government  of  India  or  the  State  Government  and  its  enterprises  or  for  any  proposed  project  related  to  development  of  the  State  or  for  implementing  a  scheme of a Town and Country Development Authority and the  modification so made in the development plan or zoning plan  shall  be  an  integral  part  of  the  revised  development  plan  or  zoning plan.

(b) The State Government may, on an application from any  person  or  an  association  of  persons  for  modification  of  development plan or zoning plan for the purpose of undertaking  an  activity  or  scheme  which  is  considered  by  the  State  Government or the Director,  on the advice of the Committee  constituted  by  the  State  Government  for  this  purpose,  to  be  beneficial  to  the  society,  make  such  modification  in  the  

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development plan or zoning plan as may be deemed necessary  in the circumstances of the case and the modification so made  in the development plan or zoning plan shall be an integral part  of the revised development plan or zoning plan.

(2) The State Government shall publish the draft of modified  plan  together  with  a  notice  of  the  preparation  of  the  draft  modified plan and the place or places where the copies may be  inspected,  continuously  for  two  days  in  such  two  daily  newspapers which are in the approved list of Government for  advertisement purpose having circulation in the area to which it  relates  and a  copy thereof  shall  be  affixed in  a  conspicuous  place  in  the  office  of  the  Collector,  inviting  objections  and  suggestions  in  writing  from any  person  with  respect  thereto  within fifteen days from the date of publication of such notice.

After  considering all  the objections  and suggestions as  may be received within the period specified in the notice and  shall, after giving reasonable opportunity to all persons affected  thereby of being heard, the State Government shall confirm the  modified plan.

(3) The provisions of Sections 18, 19 and 22 shall not apply  for modification made by the State Government.”

25.  Conformity  with  development  plan.  –(1)  After  the  coming  into  force  of  the  development  plan,  the  use  and  development  of  land  shall  conform to  the  provisions  of  the  development plan: [Provided that the [Director] may, as its discretion, permit the  continued use of land for the purpose for which it was being  used  at  the  time  of  the  coming  into  operation  of  the  development plan:] Provided further than such permission shall not be granted for a  period  exceeding  seven  years  from the  date  of  coming  into  operation of the development plan.  

26.  Prohibition of  development without  permission.-  After  the coming into operation of the development plan, no person  

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shall change the use of any land or carry out any development  of land without the permission in writing of the Director. Provided that no such permission shall be necessary,- (a)for  carrying  out  works  for  the  maintenance,  repair  or  alteration of any building which does not materially alter the  external appearance of the building; (b)for carrying out of work for the improvement or maintenance  of  a  highway,  road  or  public  street  by  the  Union  or  State  Government or an authority established under this Act or by a  local  authority  having  jurisdiction,  provided  that  such  maintenance  or  improvement  does  not  change  the  road  alignment contrary to the provisions of the development plan; (c)for  the  purpose  of  inspecting,  repairing  or  renewing  any  drains,  sewers,  mains,  pipes,  cables,  telephone  or  other  apparatus  including the  breaking open of  any street  or  other  land for that purpose; (d)  for  the  excavation  or  soil-shaping   in  the  interest  of  agriculture; (e) for restoration of land to its normal use where land has been  used  temporarily for any other purposes; (f) for use, for any purpose incidental to the use of building for  human habitation, or any other building or land attached to such  building; (g) for the construction of a road intended to give access to land  solely for agricultural purposes: [Provided further that in a planning area to which rules made  under sub-section (3) of Section 24 are made applicable, such  permission may be given by such authority as may be provided  in the said rules.]

58.  Disposal  of  land,  buildings  and  other  development  works.- Subject to such rules as may be  made by the State  Government in this behalf, the Town and Country Development  Authority shall, by regulation, determine the procedure for the  disposal  of  developed  lands,  houses,  buildings  and  other  structures.”

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11. In exercise of the powers conferred upon it under Section 58 read with  

Section 85, the State Government framed the Rules.    Rule 3 declares that  

no  Government  land  vested  in  or  managed  by  the  Authority  shall  be  

transferred  except  with  the  general  or  special  sanction  of  the  State  

Government.  Rule 4 lays down that all other land i.e. “the Authority Land”  

shall be transferred in accordance with the following rules. Rule 5 prescribes  

four modes of transfer of the Authority land.  These are:

(a)By direct negotiations with the party; or (b)By public auction; or (c)By inviting tenders; or (d)Under Concessional terms.”

Rules 5-A to 27 enumerate the steps required to be taken for transfer  

of land by different modes.  Rule 28 lays down that transfer of the Authority  

land under Rule 27 shall be made on such terms and conditions as may be  

fixed by the Authority. Rules 29 to 48 provide for matters ancillary to the  

transfer of the Authority land i.e. execution of lease, payment of rent by the  

transferee etc.  

 12. What is significant to be noted is that there is no provision in the Act  

or  the  Rules  for  disposal  and/or  transfer  of  land  in  respect  of  which  a  

regional plan or development plan or zonal plan has been prepared.  The  

only provision which has nexus with the Government land is contained in  

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Rule 3 which, as mentioned above,  imposes a bar against  the transfer  of  

Government land vested in or managed by the Authority except   with the  

general or special sanction of the State Government.  

13. We  may  now notice  the  relevant  provisions  of  the  RBC some of  

which have been relied upon by the learned senior counsel appearing for the  

respondents  to  justify  the  reservation and allotment  of  land in  favour of  

respondent  No.  5.  Part  IV  of  the  RBC deals  with  the  management  and  

regulation of Nazul land falling within the limits of municipal corporations,  

municipal councils and notified areas; and transfer thereof by lease, sale etc.  

Paragraph 12 of this part lays down that Nazul land can be disposed of by  

way of permanent lease, temporary lease, on Bedawa karar, annual licence  

and also by transfer to the State Administration and department of any other  

State  Government  or  Government  of  India  or  by  vesting  in  any  local  

authority.   In  terms  of  paragraph  13(1),  permanent  lease  can  be  granted  

either  by  auction  or  without  auction.   Paragraph  13(2)  enumerates  the  

contingencies  in  which  permanent  lease  cannot  be  granted  by  auction.  

These include when the land in question is used for religious, educational,  

co-operative,  public  or  social  purposes.   Paragraph  14  provides  for  

reservation  of  the  plots  which  are  sold  with  the  approval  of  the  State  

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Government  on  the  conditions  separately  decided  for  each  such  plot.  

Paragraph 17 specifies the authorities who are competent to pass orders in  

respect  of Nazul  land.  Under this  paragraph,  the power to grant  lease of  

Nazul  land  for  educational  institutions,  playgrounds,  hospitals  and  other  

public purposes on concessional rate as also the  power to grant lease of  

Nazul land for 30 years or less with a right of renewal vests with the State  

Government,  if  the  mode  of  disposal  is  otherwise  than  auction.  The  

residuary power also vests with the State Government.  Paragraph 18 lays  

down that a petition can be submitted to the higher authority against any  

order  which  may  be  passed  by  an  officer  subordinate  to  the  State  

Government.  Paragraph 19 lays down that every application for permanent  

lease of Nazul land should be made to the District Collector along with the  

relevant  documents,  maps  etc.   Under  paragraph  20,  the  Collector  is  

empowered to reject the application by recording reasons.  If the application  

is  not rejected then the Collector has to adopt the procedure specified in  

clauses (a), (b), (c), (d), (e) and (f) of this paragraph.  If the plot of land is to  

be sold by auction then the same is required to be advertised or publicized  

by a recognized method.  Paragraph 21 prescribes the mode of auction of  

lease rights.  Any persons, desirous of participating in the auction is required  

to deposit  10 per cent of the premium.  Once the bid is approved by the  

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competent authority, the bidder has to deposit the balance amount within 30  

days.  This  paragraph  also  provides  for  forfeiture  of  the  premium  and  

recovery  of  the  amount  from the  defaulter.   Paragraph  23  specifies  the  

minimum premium for different categories of plots.  Paragraph 24 lays down  

the procedure to be followed for disposal of plot without auction.  If any plot  

is proposed to be transferred at a concessional premium then the approval of  

the State Government is sine qua non.  In case, the Collector is satisfied that  

the plot of land should be given without auction then the allottee is required  

to pay premium equivalent to average market price determined on the basis  

of  the  sale  instances  of  last  five  years.   In  terms  of  paragraph  25,  the  

Collector  is  required  to  submit  report  to  the  Commissioner  or  to  the  

Government  through  the  Commissioner  after  scrutiny  of  the  matter  at  

different stages.  Paragraph 26 lays down that when Nazul land is allotted to  

non-government  organisations  or  persons  on  favourable  terms  then  the  

conditions  specified  therein  should  be  scrupulously  observed  and  there  

should be rigorous scrutiny of the proposal.  Under this paragraph, land can  

be  allotted  to  educational,  cultural  and  philanthropic  

institutions/organisations  or  Cooperative  Societies,  Housing  Board  and  

Special  Area  Authority  constituted  by  the  State  Government.   However,  

unregistered societies and private trusts are not eligible for allotment of land.  

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This paragraph also contemplates allotment of land for religious purposes or  

to Jain Temple, Mosque, Church, Gurdwara etc.  provided that there is  no  

similar  place  within  two  kilometers  of  the  site  proposed  to  be  allotted.  

Clause 1(a) and (b) of this paragraph prescribes the premium required to be  

paid by different types of bodies and institutions.  Clause 3 prescribes the  

condition relating to construction of the building and Clause 5 provides for  

resumption  of  land  in  certain  eventualities.  By  Circular  

No.6/16/91/Sat/SA/2B,  the  Government  prescribed  the  revised  rates  for  

allotment of Nazul land to caste and non-caste based social, religious and  

philanthropic organizations, the organizations engaged in welfare of women,  

educational  and  cultural  organizations,  public  hospitals,  co-operative  

societies,  agriculture  market  committee,  municipal  corporation  etc.   By  

Circular  No.  F.6-173/96/Sat/SA/2B/Nazul  dated  31.5.1996,  the  State  

Government prescribed the premium and rent to be charged for allotment of  

land  to  caste  based  and  social  institutions.   By  Circular  No.  F  No.  6-

140/07/SAT/Nazul dated 31.8.2007, the State Government decided to allot  

land without charging any premium at an annual rent of Re. 1/- for housing  

schemes meant for slum dwellers.

14. We shall now consider whether the State Government could allot 20  

acres  of  land  to  respondent  No.5  without  issuing  an  advertisement  or  

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adopting a procedure consistent with the doctrine of equality so as to enable  

other  similar  organizations/institutions  to  participate  in  the  process  of  

allotment.  

15. The concept of ‘State’ has changed in recent years.  In all democratic  

dispensations the State has assumed the role of a regulator and provider of  

different kinds of services and benefits  to the people like jobs, contracts,  

licences, plots of land, mineral  rights and social security benefits.   In his  

work “The Modern State” MacIver (1964 Paperback Edition) advocated that  

the State should be viewed mainly as a service corporation.  He highlighted  

difference in perception about the theory of State in the following words:

“To  some  people  State  is  essentially  a  class-structure,  “an  organization of one class dominating over the other classes”;  others regard it  as an organisation that  transcends all  classes  and stands for the whole community. They regard it as a power- system. Some view it entirely as a legal structure, either in the  old Austinian sense which made it a relationship of governors  and governed, or, in the language of modern jurisprudence, as a  community  “organised  for  action  under  legal  rules”.  Some  regard it as no more than a mutual insurance society, others as  the very texture of all our life. Some class the State as a great  “corporation” and others consider it as indistinguishable from  society itself.”

16. When  the  Constitution  was  adopted,  people  of  India  resolved  to  

constitute  India  into  a  Sovereign  Democratic  Republic.   The  words  

‘Socialist’  and  ‘Secular’  were  added  by  the  Constitution  (Forty-second  

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Amendment) Act, 1976 and also to secure to all its citizens Justice - social,  

economic  and  political,  Liberty  of  thought,  expression,  belief,  faith  and  

worship; Equality of status and/or opportunity and to promote among them  

all  Fraternity  assuring  the  dignity  of  the  individual  and  the  unity  and  

integrity of the Nation.  The expression ‘unity of the Nation’ was also added  

by  the  Constitution  (Forty-second  Amendment)  Act,  1976.  The  idea  of  

welfare State is ingrained in the Preamble of the Constitution.  Part III of the  

Constitution enumerates fundamental rights, many of which are akin to the  

basic rights of every human being. This part also contains various positive  

and negative mandates which are necessary for ensuring protection of the  

Fundamental Rights and making them real and meaningful.  Part IV contains  

‘Directive  Principles  of  State  Policy’  which  are  fundamental  in  the  

governance  of  the  country  and it  is  the  duty of  the  State  to  apply these  

principles in making laws.  Article 39 specifies certain principles of policy  

which are required to be followed by the State.  Clause (b) thereof provides  

that the State shall, in particular, direct its policy towards securing that the  

ownership and control of the material  resources of the community are so  

distributed  as  best   to  sub-serve  the  common  good.   Parliament  and  

Legislatures of the States have enacted several laws and the governments  

have,  from time to time, framed policies so that  the  national  wealth and  

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natural resources are equitably distributed among all sections of people so  

that have-nots of the society can aspire to compete with haves.  

17. The role of the Government as provider of services and benefits to the  

people was noticed in  R.D. Shetty v. International Airport Authority of  

India (1979) 3 SCC 489 in the following words:

“Today the Government in a welfare State, is the regulator and  dispenser of special services and provider of a large number of  benefits,  including  jobs,  contracts,  licences,  quotas,  mineral  rights,  etc.  The  Government  pours  forth  wealth,  money,  benefits, services, contracts, quotas and licences. The valuables  dispensed by Government take many forms, but they all share  one  characteristic.  They  are  steadily  taking  the  place  of  traditional forms of wealth. These valuables which derive from  relationships to Government are of many kinds. They comprise  social security benefits, cash grants for political sufferers and  the  whole  scheme  of  State  and  local  welfare.  Then  again,  thousands of people are employed in the State and the Central  Governments and local authorities. Licences are required before  one  can  engage  in  many  kinds  of  businesses  or  work.  The  power of giving licences means power to withhold them and  this  gives  control  to  the  Government  or  to  the  agents  of  Government on the lives of many people. Many individuals and  many  more  businesses  enjoy  largesse  in  the  form  of  Government  contracts.  These  contracts  often  resemble  subsidies. It is virtually impossible to lose money on them and  many  enterprises  are  set  up  primarily  to  do  business  with  Government. Government owns and controls hundreds of acres  of public land valuable for mining and other purposes. These  resources  are  available  for  utilisation  by  private  corporations  and  individuals  by  way  of  lease  or  licence.  All  these  mean  growth  in  the  Government  largesse  and  with  the  increasing  magnitude  and range of  governmental  functions as  we move  closer to a welfare State, more and more of our wealth consists  of these new forms. Some of these forms of wealth may be in  

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the nature of legal rights but the large majority of them are in  the nature of privileges……….”  

18. For  achieving  the  goals  of  Justice  and  Equality  set  out  in  the  

Preamble,  the  State  and  its  agencies/instrumentalities  have  to  function  

through political entities and officers/officials at different levels.  The laws  

enacted by Parliament and State Legislatures bestow upon them powers for  

effective implementation of the laws enacted for creation of an egalitarian  

society. The exercise of power by political entities and officers/officials for  

providing different kinds of services and benefits to the people always has  

an  element  of  discretion,  which  is  required  to  be  used  in  larger  public  

interest and for public good.  In principle, no exception can be taken to the  

use  of  discretion  by  the  political  functionaries  and  officers  of  the  State  

and/or its agencies/instrumentalities provided that this is done in a rational  

and judicious manner without  any discrimination against  anyone.   In our  

constitutional structure, no functionary of the State or public authority has an  

absolute or unfettered discretion. The very idea of unfettered discretion is  

totally  incompatible  with  the  doctrine  of  equality  enshrined  in  the  

Constitution and is an antithesis to the concept of rule of law.

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19. In his work ‘Administrative Law’ (6th) Edition, Prof. H.W.R. Wade,  

highlighted distinction between powers of public  authorities  and those of  

private persons in the following words:

"... The common theme of all the authorities so far mentioned is  that the notion of absolute or unfettered discretion is rejected.  Statutory power conferred for public purposes is conferred as it  were upon trust, no absolutely - that is to say, it can validly be  used only in the right and proper way which Parliament when  conferring  it  is  presumed  to  have  intended.  Although  the  Crown's  lawyers  have  argued  in  numerous  cases  that  unrestricted permissive language confers unfettered discretion,  the truth is that, in a system based on the rule of law, unfettered  governmental discretion is a contradiction in terms."

Prof. Wade went on to say:

"......  The  whole  conception  of  unfettered  discretion  is  inappropriate  to  a  public  authority,  which  possesses  powers  solely in order that it may use them for the public good.

There  is  nothing paradoxical  in  the  imposition  of  such legal  limits. It would indeed be paradoxical if they were not imposed.  Nor is this principle an oddity of British or American law; it is  equally prominent in French law. Nor is it a special restriction  which  fetters  only  local  authorities:  it  applies  no  less  to  ministers  of  the  Crown.  Nor  is  it  confined  to  the  sphere  of  administration:  it  operates  wherever  discretion  is  given  for  some  public  purpose,  for  example  where  a  judge  has  a  discretion to order jury trial. It is only where powers are given  for  the  personal  benefit  of  the  person  empowered  that  the  discretion is absolute. Plainly this can have no application in  public law.

For the same reasons there should in principle be no such thing  as unreviewable administrative discretion, which should be just  as much a contradiction in terms as unfettered discretion. The  

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question which has to be asked is what is the scope of judicial  review, and in a few special cases the scope for the review of  discretionary decisions may be minimal.  It remains axiomatic  that all discretion is capable of abuse, and that legal limits to  every power are to be found somewhere."  

(emphasis supplied)

20. Padfield v. Minister of Agriculture, Fishery and Food (1968) A.C.  

997, is an important decision in the area of administrative law. In that case  

the Minister had refused to appoint a committee to investigate the complaint  

made by the members  of the  Milk Marketing Board that  majority  of the  

Board had fixed milk prices in a way that was unduly unfavourable to the  

complainants.  The  Minister's  decision  was founded on the  reason  that  it  

would be politically embarrassing for him if he decided not to implement the  

committee's decision. While rejecting the theory of absolute discretion, Lord  

Reid observed:

"Parliament  must  have  conferred  the  discretion  with  the  intention  that  it  should  be  used  to  promote  the  policy  and  objects of the Act; the policy and objects of the Act must be  determined by construing the Act as a whole and construction is  always a matter of law for the court. In a matter of this kind it is  not possible to draw a hard and fast line, but if the Minister, by  reason  of  his  having  misconstrued  the  Act  or  for  any  other  reasons, so uses his discretion as to thwart or run counter to the  policy  and  objects  of  the  Act,  then  our  law  would  be  very  defective  if  persons  aggrieved  were  not  entitled  to  the  protection of the court."

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21. In Breen v.  Amalgamated Engineering Union (1971)  2  QB 175,  

Lord Denning MR said:

“The discretion of a statutory body is never unfettered. It is a  discretion  which  is  to  be  exercised  according  to  law.  That  means  at  least  this:  the  statutory  body  must  be  guided  by  relevant considerations and not by irrelevantly. It its decision is  influenced by extraneous considerations which it ought not to  have  taken  into  account,  then  the  decision  cannot  stand.  No  matter  that  the statutory body may have acted in good faith;  nevertheless the decision will be set aside. That is established  by  Padfield  v.  Minister  of  Agriculture,  Fisheries  and  Food  which is a landmark in modern administrative law."

22. In Laker Airways Ltd. v. Department of Trade 1977 QB 643, Lord  

Denning discussed prerogative of the Minister  to give directions  to Civil  

Aviation Authorities overruling the specific provisions in the statute in the  

time of war and said:

"Seeing that prerogative is a discretion power to be exercised  for the public good, it follows that its exercise can be examined  by  the  Courts  just  as  in  other  discretionary  power  which  is  vested in the executive."

23. This Court has long ago discarded the theory of unfettered discretion.  

In S.G. Jaisinghani v. Union of India  AIR 1967 SC 1427, Ramaswami, J.  

emphasised that absence of arbitrary power is the foundation of a system  

governed by rule of law and observed:

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"In this context it is important to emphasize that the absence of  arbitrary  power is  the  first  essential  of  the  rule  of  law upon  which our whole  constitutional  system is  based.  In a  system  governed  by  rule  of  law,  discretion,  when  conferred  upon  executive authorities, must be confined within clearly defined  limits.  The  rule  of  law  from this  point  of  view  means  that  decisions  should  be  made  by  the  application  of  known  principles and rules and, in general, such decisions should be  predictable  and  the  citizen  should  know  where  he  is.  If  a  decision is taken without any principle or without any rule it is  unpredictable and such a decision is the antithesis of a decision  taken in accordance with the rule of law. (See Dicey-"Law of  the  Constitution"  -  Tenth  Edn.,  Introduction  ex.).  'Law  has  reached its finest moments', stated Douglas, J. in United States  v. Underlick (1951 342 US 98:96 Law Ed 113), "when it has  freed  man  from  the  unlimited  discretion  of  some  ruler.....  Where discretion is absolute, man has always suffered'. It is in  this  sense  that  the  rule  of  law  maybe  said  to  be  the  sworn  enemy of  caprice.  Discretion,  as  Lord Mansfield  stated  it  in  classic  terms  in  the  case  of  John  Wilkes  (1770  98  ER  327),'means  sound  discretion  guided  by  law.  It  must  be  governed by rule, not humour it  must not be arbitrary, vague  and fanciful"

24. In Ramana Dayaram Shetty v. International Airport Authority of  

India (supra), Bhagwati, J. referred to an article by Prof. Reich  “The New  

Property” which was published  in 73 Yale Law Journal. In the article, the  

learned author said, “that the Government action be based on standard that  

are  not  arbitrary  or  unauthorized.”   The  learned  Judge  then  quoted  with  

approval the following observations made by Mathew, J. (as he then was) in  

V. Punnen Thomas v. State of Kerala AIR 1969 Ker. 81 (Full Bench):

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"The  Government  is  not  and  should  not  be  as  free  as  an  individual in selecting recipients for its largesses. Whatever its  activities, the Government is still the Government and will be  subject to the restraints inherent in its position in a democratic  society. A democratic Government cannot lay down arbitrary  and capricious standards for the choice of persons with whom  alone it will deal."

Bhagwati, J. also noticed some of the observations made by Ray, C.J.  

in  Eursian  Equipments  and  Chemicals  Ltd.  v.  State  of  West  Bengal  

(1975) 1 SCC 70 who  emphasized that when the Government is trading  

with  public  the  democratic  form  of  Government  demands  equality  and  

absence of arbitrariness and discrimination in such transactions and held:

“……….This  proposition  would  hold  good  in  all  cases  of  dealing by the Government with the public, where the interest  sought to be protected is a privilege. It must, therefore, be taken  to be the law that where the Government is dealing with the  public, whether by way of giving jobs or entering into contracts  or issuing quotas or licences or granting other forms of largesse,  the Government cannot act arbitrarily at its sweet will and, like  a  private  individual,  deal  with  any  person  it  pleases,  but  its  action must be in conformity with standard or norms which is  not arbitrary, irrational or irrelevant. The power or discretion of  the  Government  in  the  matter  of  grant  of  largesse  including  award of jobs, contracts, quotas, licences, etc. must be confined  and  structured  by  rational,  relevant  and  non-discriminatory  standard  or  norm  and  if  the  Government  departs  from such  standard or norm in any particular case or cases, the action of  the Government would be liable to be struck down, unless it  can be shown by the Government that the departure was not  arbitrary, but was based on some valid principle which in itself  was not irrational, unreasonable or discriminatory.”

        (emphasis supplied)

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25. In  Kasturi Lal Lakshmi  Reddy v. State of J And K (1980) 4 SCC  

1, Bhagwati J. speaking for the Court observed:

“Where  any  governmental  action  fails  to  satisfy  the  test  of  reasonableness and public interest discussed above and is found  to be wanting in the quality of reasonableness or lacking in the  element of public interest, it would be liable to be struck down  as  invalid.  It  must  follow as  a  necessary corollary  from this  proposition that the Government cannot act in a manner which  would benefit a private party at the cost of the State; such an  action  would  be  both  unreasonable  and  contrary  to  public  interest. The Government, therefore, cannot, for example, give  a contract or sell or lease out its property for a consideration  less than the highest that can be obtained for it, unless of course  there are other considerations which render it reasonable and in  public interest to do so. Such considerations may be that some  directive principle is sought to be advanced or implemented or  that  the contract  or  the property is  given not with a view to  earning revenue but for the purpose of carrying  out a welfare  scheme for the benefit of a particular group or section of people  deserving  it  or  that  the  person  who  has  offered  a  higher  consideration is not otherwise fit to be given the contract or the  property.  We  have  referred  to  these  considerations  only  illustratively,  for  there  may  be  an  infinite  variety  of  considerations which may have to be taken into account by the  Government  in  formulating  its  policies  and  it  is  on  a  total  evaluation of various considerations which have weighed with  the  Government  in  taking  a  particular  action,  that  the  court  would have to decide whether the action of the Government is  reasonable and in public interest. But one basic principle which  must  guide  the  court  in  arriving  at  its  determination  on  this  question  is  that  there  is  always  a  presumption  that  the  governmental action is reasonable and in public interest and it  is for the party challenging its validity to show that it is wanting  in reasonableness or is not informed with public interest. This  burden  is  a  heavy  one  and  it  has  to  be  discharged  to  the  

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satisfaction of the court by proper and adequate material. The  court  cannot  lightly  assume  that  the  action  taken  by  the  Government is unreasonable or without public interest because,  as  we  said  above,  there  are  a  large  number  of  policy  considerations  which  must  necessarily  weigh  with  the  Government in taking action and therefore the court would not  strike  down  governmental  action  as  invalid  on  this  ground,  unless it is clearly satisfied that the action is unreasonable or  not in public interest.  But where it is so satisfied, it would be  the  plainest  duty  of  the  court  under  the  Constitution  to  invalidate  the  governmental  action.  This  is  one  of  the  most  important  functions  of  the  court  and  also  one  of  the  most  essential for preservation of the rule of law. It is imperative in a  democracy  governed  by  the  rule  of  law  that  governmental  action must be kept within the limits of the law and if there is  any transgression, the court must be ready to condemn it. It is a  matter of historical experience that there is a tendency in every  Government to assume more and more powers and since it is  not  an  uncommon  phenomenon  in  some  countries  that  the  legislative check is getting diluted, it is left to the court as the  only  other  reviewing  authority  under  the  Constitution  to  be  increasingly vigilant to ensure observance with the rule of law  and in this task, the court must not flinch or falter. It may be  pointed  out  that  this  ground  of  invalidity,  namely,  that  the  governmental action is unreasonable or lacking in the quality of  public  interest,  is  different  from that  of mala  fides though it  may, in a given case, furnish evidence of mala fides.”

  (emphasis supplied)

26. In Common Cause, A Registered Society v. Union of India (1996)  

6 SCC 530 the two Judge Bench  considered the legality of discretionary  

powers exercised by the then Minister of State for Petroleum and Natural  

Gas   in the matter of allotment of petrol pumps and gas agencies.  While  

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declaring  that  allotments  made  by  the  Minister  were  wholly  arbitrary,  

nepotistic and motivated by extraneous considerations the Court said:  

“The Government today — in a welfare State — provides large  number of benefits to the citizens. It distributes wealth in the  form of allotment of plots, houses, petrol pumps, gas agencies,  mineral leases, contracts, quotas and licences etc. Government  distributes largesses in various forms. A Minister  who is the  executive  head of  the department  concerned distributes  these  benefits  and  largesses.  He  is  elected  by  the  people  and  is  elevated to a position where he holds a trust on behalf of the  people. He has to deal with the people’s property in a fair and  just manner. He cannot commit breach of the trust reposed in  him by the people.”

27. The Court also referred to the reasons recorded in the orders passed by  

the Minister for award of dealership of petrol pumps and gas agencies and  

observed:  

“24………..While Article 14 permits a reasonable classification  having a rational nexus to the objective sought to be achieved,  it does not permit the power to pick and choose arbitrarily out  of several persons falling in the same category. A transparent  and objective criteria/procedure has to be evolved so that the  choice  among  the  members  belonging  to  the  same  class  or  category is based on reason, fair play and non-arbitrariness. It is  essential  to  lay  down  as  a  matter  of  policy  as  to  how  preferences would be assigned between two persons falling in  the  same  category.  If  there  are  two  eminent  sportsmen  in  distress and only one petrol pump is available, there should be  clear,  transparent  and  objective  criteria/procedure  to  indicate  who out of the two is to be preferred. Lack of transparency in  the system promotes nepotism and arbitrariness. It is absolutely  essential that the entire system should be transparent right from  

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the  stage  of  calling  for  the  applications  up  to  the  stage  of  passing the orders of allotment.”

28. In Shrilekha Vidyarthi v. State of U.P. (1991) 1 SCC 212, the Court  

unequivocally  rejected  the  argument  based  on  the  theory  of  absolute  

discretion of the administrative authorities and immunity of their action from  

judicial review and observed:

".... We have no doubt that the Constitution does not envisage  or permit unfairness or unreasonableness in State actions in any  sphere  of  its  activity  contrary  to  the  professed  ideals  in  the  Preamble. In our opinion, it would be alien to the Constitutional  Scheme to accept  the argument of exclusion of Article 14 in  contractual  matters.  The  scope  and  permissible  grounds  of  judicial  review in  such matters  and the  relief  which may be  available are different matters but that does not justify the view  of its total exclusion. This is more so when the modern trend is  also  to  examine  the  unreasonableness  of  a  term  in  such  contracts where the bargaining power is unequal so that these  are  not  negotiated  contracts  but  standard  form  contracts  between unequals………………………..  

Even assuming that it is necessary to import the concept  of presence of some public element in a State action to attract  Article 14 and permit judicial review, we have no hesitation in  saying that the ultimate impact of all actions of the State or a  public body being undoubtedly on public interest, the requisite  public  element for this  purpose is  present  also in contractual  matters.  We,  therefore,  find  it  difficult  and  unrealistic  to  exclude  the  State  actions  in  contractual  matters,  after  the  contract has been made, from the purview of judicial review to  test its validity on the anvil of Article 14.

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It  can  no  longer  be doubted  at  this  point  of  time that  Article of the Constitution of India applies also to matters of  governmental  policy  and  if  the  policy  or  any  action  of  the  Government, even in contractual matters, fails to satisfy the test  of reasonableness, it  would be unconstitutional.  (See Ramana  Dayaram Shetty v. The International Airport Authority of India  [(1979)  3  SCR  1014:  AIR  1979  SC 1628]  and  Kasturi  Lal  Lakshmi Reddy v. State of Jammu and Kashmir [(1980) 3 SCR  1338: AIR 1980 SC 1992], In Col. A.S. Sangwan v. Union of  India [(1980 (Supp) SCC 559 : AIR 1981 SC 1545], while the  discretion  to  change  the  policy  in  exercise  of  the  executive  power, when not trammelledly the statute or rule, was held to  be wide, it was emphasised as imperative and implicit in Article  14 of the Constitution that a change in policy must be made  fairly and should not give the impression that it was so done  arbitrarily or by any ulterior criteria. The wide sweep of Article  14 and the requirement of every State action qualifying for its  validity on this touch-stone, irrespective of the field of activity  of the State, has long been settled. Later decisions of this Court  have  reinforced the  foundation of  this  tenet  and it  would be  sufficient to refer only to two recent decisions of this Court for  this purpose."

29. Similarly, in  L.I.C. of India v. Consumer Education & Research  

Centre (1995) 5 SCC 482, the Court negatived the argument that exercise of  

executive  power  of  the  State  was  immune  from  judicial  review  and  

observed:  

".... Every action of the public authority or the person acting in  public interest or its acts give rise to public element, should be  guided by public interest. It is the exercise of the public power  or  action  hedged  with  public  element  becomes  open  to  challenge.  If  it  is  shown  that  the  exercise  of  the  power  is  arbitrary, unjust and unfair it should be no answer for the State,  

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its instrumentality, public authority or person whose acts have  the insignia of public element to say that their actions are in the  field of private law and they are free to prescribe any conditions  or limitations in their actions as private citizens, similicitor, do  in the field of private law. Its actions must be based on some  rational  and  relevant  principles.  It  must  not  be  guided  by  traditional or irrelevant considerations.............

This Court has rejected the contention of an instrumentality or  the State that its action is in the private law field and would be  immune  from satisfying  the  tests  laid  under  Article  14.  The  dichotomy  between  public  law  and  private  law  rights  and  remedies, though may not be obliterated by any straight jacket  formula,  it  would  depend  upon  the  factual  matrix.  The  adjudication  of  the  dispute  arising  out  of  a  contract  would,  therefore, depend upon facts and circumstances in a given case.  The  distinction  between  public  law  remedy  and  private  law  filed cannot be demarcated with precision. Each case will  be  examined on its facts and circumstances to find out the nature  of  the  activity,  scope  and  nature  of  the  controversy.  The  distinction between public law and private law remedy has now  become too thin and practicably obliterated.......

In  the  sphere  of  contractual  relations  the  State,  its  instrumentality,  public  authorities  or  those  whose  acts  bear  insignia of public element, action to public duty or obligation  are enjoined to act in a manner i.e. fair, just and equitable, after  taking  objectively  all  the  relevant  options  into  consideration  and in a  manner  that  is  reasonable,  relevant  and germane to  effectuate  the  purpose for  public  good and in  general  public  interest and it must not take any irrelevant or irrational factors  into consideration or arbitrary in its decision. Duty to act fairly  is part  of fair procedure envisaged under Articles 14 and 21.  Every activity of the public authority or those under public duty  or obligation must be informed by reason and guided by the  public interest."

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30. In New India Public School v. HUDA (1996) 5 SCC 510, this Court  

approved the judgment of the Division Bench of the Punjab and Haryana  

High Court in Seven Seas Educational Society  v. HUDA AIR 1996 (P&H)  

229  :  (1996)  113  PLR  17,  whereby  allotment  of  land  in  favour  of  the  

appellants was quashed and observed:

"....  A reading  thereof,  in  particular  Section  15(3)  read  with  Regulation 3(c) does indicate that there are several modes of  disposal of the property acquired by HUDA for public purpose.  One of the modes of transfer of property as indicated in Sub- section  (3)  of  Section  15  read  with  sub-regulation  (c)  of  Regulation 5 is public auction, allotment or otherwise. When  public authority discharges its public duty the word "otherwise"  would be construed to be consistent with the public purpose and  clear and unequivocal guidelines or rules are necessary and not  at the whim and fancy of the public authorities or under their  garb or cloak for any extraneous consideration. It would depend  upon the nature  of  the  scheme and object  of  public  purpose  sought to be achieved. In all cases relevant criterion should be  pre-determined by specific rules or regulations and published  for the public. Therefore, the public authorities are required to  make  necessary  specific  regulations  or  valid  guidelines  to  exercise  their  discretionary  powers,  otherwise,  the  salutory  procedure  would  be  by  public  auction.  The  Division  Bench,  therefore,  has rightly pointed out that in the absence of such  statutory  regulations  exercise  of  discretionary  power  to  allot  sites to private institutions or persons was not correct in law."

31. What  needs  to  be  emphasized  is  that  the  State  and/or  its  

agencies/instrumentalities cannot give  largesse to any person according to  

the sweet will and whims of the political entities and/or officers of the State.  

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Every  action/decision  of  the  State  and/or  its  agencies/instrumentalities  to  

give largesse or  confer benefit  must  be founded on a  sound, transparent,  

discernible  and  well  defined  policy,  which  shall  be  made  known  to  the  

public by publication in the Official Gazette and other recognized modes of  

publicity and such policy must be implemented/executed by adopting a non-

discriminatory and non-arbitrary method irrespective of the class or category  

of  persons  proposed  to  be  benefitted  by  the  policy.  The  distribution  of  

largesse like allotment of land, grant of quota,  permit  licence etc.  by the  

State and its agencies/instrumentalities should always be done in a fair and  

equitable  manner  and  the  element  of  favoritism  or  nepotism  shall  not  

influence the exercise  of  discretion,  if  any,  conferred upon the particular  

functionary or officer of the State.   

32. We may add that there cannot be any policy, much less, a rational  

policy of allotting land on the basis of applications  made by individuals,  

bodies, organizations or institutions de hors an invitation or advertisement  

by  the  State  or  its  agency/instrumentality.   By  entertaining  applications  

made by individuals, organisations or institutions for allotment of land or for  

grant of any other type of largesse the State cannot exclude other eligible  

persons from lodging competing claim.  Any allotment of land or grant of  

other  form  of  largesse  by  the  State  or  its  agencies/instrumentalities  by  

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treating the exercise as a private venture is liable to be treated as arbitrary,  

discriminatory and an act of favoritism and/or nepotism violating the soul of  

the equality clause embodied in Article 14 of the Constitution.  

33. This, however, does not mean that the State can never allot land to the  

institutions/organisations  engaged  in  educational,  cultural,  social  or  

philanthropic activities or are rendering service to the Society except by way  

of auction.  Nevertheless,  it is necessary to observe that once a piece of land  

is earmarked or identified for allotment to institutions/organisations engaged  

in  any such  activity,  the  actual  exercise  of  allotment  must  be  done in  a  

manner consistent with the doctrine of equality.  The competent authority  

should, as a matter of course, issue an advertisement incorporating therein  

the  conditions  of  eligibility  so  as  to  enable  all  similar  situated  eligible  

persons, institutions/organisations to participate in the process of allotment,  

whether by way of auction or otherwise.  In a given case the Government  

may  allot  land  at  a  fixed  price  but  in  that  case  also  allotment  must  be  

preceded  by  a  wholesome  exercise  consistent  with  Article  14  of  the  

Constitution.

34. The allotment of land by the State or its agencies/instrumentalities to a  

body/organization/institution  which  carry  the  tag  of  caste,  community  or  

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religion is not only contrary to the idea of Secular Democratic Republic but  

is  also  fraught  with  grave  danger  of  dividing  the  society  on  caste  or  

communal  lines.  The  allotment  of  land  to  such  

bodies/organisations/institutions  on  political  considerations  or  by  way  of  

favoritism and/or nepotism or with a view to nurture the vote bank for future  

is constitutionally impermissible.   

35. We  may  now  revert  to  the  facts  of  this  case.   Admittedly,  the  

application for reservation of land was made by Shri Kailash Joshi, in his  

capacity as convener of Memorial Trust.  The respondents have not placed  

on  record  any  document  to  show  that  on  the  date  of  application,  the  

Memorial  Trust  was  registered  as  a  public  trust.   During  the  course  of  

hearing also no such document was produced before the Court.  It is also not  

in dispute that respondent No. 5 was registered as a public trust  only on  

6.10.2004  i.e.  after  the  order  for  reservation  of  land  in  favour  of  the  

Memorial Trust was passed.  The allotment was also initially made in the  

name of trust, but, later on, the name of respondent No. 5 was substituted in  

place of the Memorial Trust.  The exercise for reservation of 30 acres land  

and allotment of  20 acres  was not  preceded by any advertisement  in the  

newspaper  or  by  any  other  recognized  mode  of  publicity  inviting  

applications  from  organizations/institutions  like  the  Memorial  Trust  or  

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respondent  No.5  for  allotment  of  land  and  everything  was  done  by  the  

political and non-political functionaries of the State as if they were under a  

legal obligation to allot land to the Memorial Trust and/or respondent No.5.  

The advertisements issued by the State functionaries were only for inviting  

objections  against  the  proposed  reservation  and/or  allotment  of  land  in  

favour of  the  Memorial  Trust  and not  for participation in  the process  of  

allotment.  Therefore, it is not possible to accept the argument of Shri Ranjit  

Kumar that land was allotted to respondent No.5 after following a procedure  

consistent with Article 14 of the Constitution.   

36. Although,  the objectives of respondent No. 5 are laudable and the  

institute proposed to be established by it is likely to benefit  an important  

segment of the society but the fact remains that all its trustees are members  

of a particular party and the entire exercise for the reservation and allotment  

of land and waiver of major portion of the premium was undertaken because  

political functionaries of the State wanted to favour respondent No. 5 and the  

officers of the State at different levels were forced to toe the line of their  

political masters.    

37. At  the  cost  of  repetition,  we consider  it  necessary to  reiterate  that  

there  is  no  provision  in  the  Act  or  the  Rules  and  even  in  the  RBC for  

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allotment  of  land  without  issuing  advertisement  and/or  without  inviting  

applications from eligible persons to participate in the process of allotment.  

If there would have been such a provision in the Act or the Rules or the RBC  

the same could have been successfully challenged on the ground of violation  

of Article 14 of the Constitution.   

38. The  argument  of  Shri  Ravi  Shanker  Prasad  that  the  impugned  

allotment may not  be annulled because the State has a definite policy of  

allotting  land  to  religious,  social,  educational  and  philanthropic  bodies,  

organisations/institutions without any advertisement or inviting applications  

and without even charging premium is being mentioned only to be rejected.  

From the lists annexed with the affidavits of Shri Uma Shankar Bhargav and  

Shri Anil Srivastava it does appear that the State and its functionaries have  

allotted  various parcels  of  land to  different  institutions  and organizations  

between 1982 to 2008.  Large number of these allotments have been made to  

the  departments/establishments  of  the  Central  Government/State  

Governments and their  agencies/instrumentalities.   Some plots  have been  

allotted to the hospitals and charitable institutions. Some have been allotted  

to  different  political  parties,  but  quite  a  few  have  been  allotted  to  the  

caste/community  based bodies.  Allotments have also been made without  

charging premium and at an annual rent of Re. 1/- only.   

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39. In our view, these allotments cannot lead to an inference that the State  

Government has framed a well-defined and rational policy for allotment of  

land.   The  RBC also  does  not  contain  any  policy  for  allotment  of  land  

without  issuing  any  advertisement  and  without  following  a  procedure  in  

which all similarly situated persons can stake their claim for allotment. Part  

IV  of  the  RBC  contains  the  definition  of  Nazul  land  and  provides  for  

allotment  of  land  at  market  price  or  concessional  price.  The  authorities  

competent to allot land for different purposes have also been identified and  

provisions have been made for scrutiny of applications at different levels.  

However, these provisions have been misinterpreted by the functionaries of  

the  State  for  several  years  as  if  the  same  empowered  the  concerned  

authorities to allot Nazul land without following any discernible criteria and  

in  complete  disregard  to  their  obligation  to  act  in  accordance  with  the  

constitutional norms.  Unfortunately, the Division Bench of the High Court  

overlooked  that  the  entire  process  of  reservation  of  land  and  allotment  

thereof was fraught with grave illegality and was nothing but a blatant act of  

favoritism on the part of functionaries of the State and summarily dismissed  

the writ petition.  

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40. The next question which needs consideration is whether notifications  

dated 6.6.2008 and 5.9.2008 by which the Bhopal Development Plan was  

modified  are  ultra  vires the  provisions  of  Section 23-A of  the  Act.    A  

reading of the provisions contained in Chapter-IV of the Act makes it clear  

that  a  development  plan  shall  take  into  account  the  draft-five  year  and  

annual development plan of the district, if any, prepared under the Madhya  

Pradesh Zila Yogana Samiti Adhiniyam and broadly indicate the land use  

proposed  in  the  planning  area,  allocation  of  areas  or  zones  of  land  for  

residential,  industrial,  commercial  or  agricultural  purpose;  open  spaces,  

parks and gardens, green-belts, zoological gardens and playgrounds; public  

institutions and offices and  other special purposes as the Director may deem  

it fit.  The development plan shall also lay down the pattern of National and  

State Highways connecting the planning area with the rest of the region, ring  

roads, arterial roads and the major roads within the planning area etc.   The  

development  plan  prepared  under  Chapter  IV  is  the  foundation  of  

development of the particular area for a specified number of years.  No one  

can use land falling within the area for which the development plan has been  

prepared for a purpose other than for which it is earmarked. Section 23-A  

was inserted in 1992 and amended in 2005 with a view to empower the State  

Government  to  modify  the  development  plan  or  zoning  plan.   However,  

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keeping in view the basic objective of planned development of the areas to  

which the Act is applicable, the Legislature designedly did not give blanket  

power to the State Government to modify the development plan. The power  

of  modification  of  development  plan can be exercised  only for  specified  

purposes.   In terms of Section 23-A(1)(a),   the development plan can be  

modified by the State Government either suo motu or at the request of  the  

Authority for any proposed project of the Government of India or the State  

Government  and  its  enterprises  or  for  any  proposed  project  relating  to  

development of the State or for implementing a scheme of the Authority.  

Under clause (b), the State Government can entertain an application from  

any person or association of persons for modification of development plan  

for the purpose of undertaking any activity or scheme which is considered  

by the State Government or the Director,  on the advice of the committee  

constituted for this purpose, to be beneficial to the society.  This is subject to  

the condition that the modification so made shall be an integral part of the  

revised  development  plan.   Section  23-A(2)  provides  for  issue  of  public  

notice  inviting  objections  against  the  proposed  modification  of  the  plan.  

Such  notice  is  required  to  be  published  along  with  the  modified  plan  

continuously for two days in two daily newspapers which are on the list of  

the Government and which have circulation in the area.  A copy of the notice  

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is  also required to be affixed in a conspicuous place in the office of the  

Collector.  After considering the objections and suggestions, if any received,  

and giving reasonable opportunity of hearing to the affected persons,  the  

State Government can confirm the modification.  

41. It is not in dispute that in the Bhopal Development plan, the use of  

land  which  was reserved  and  allotted  to  respondent  No.5  was  shown as  

public and semi public (health).  The State Government modified the plan by  

invoking  Section  23-A(1)(a)  of  the  Act  for  the  purpose  of  facilitating  

establishment of an institute by respondent No. 5 and not for  any proposed  

project  of  the  Government  of  India  or  the  State  Government  and  its  

enterprises or for any proposed project relating to development of the State  

or for implementation of the Town Development Scheme.  As a matter of  

fact, the exercise undertaken for the change of land use, which resulted in  

modification of the development plan was an empty formality because land  

had been allotted to respondent No.5 almost two years prior to the issue of  

notification under Section 23–A (1)(a) and the objects for which respondent  

No.5 was registered as a trust have no nexus with the purpose for which  

modification  of  development  plan  can  be  effected  under  that  section.  

Therefore, there is no escape from the conclusion that modification of the  

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development plan was ultra vires the provisions of Section 23–A(1)(a) of the  

Act.  

42. The   challenge to the  locus standi of the appellant merits rejection  

because  it  has  not  been  disputed  that  the  appellant  is  a  public  spirited  

organization and has challenged other similar allotment made in favour of  

Punjabi Samaj, Bhopal,  That apart, as held in Shivajirao Nilangekar Patil  

v. Mahesh Madhav Gosavi (1987) 1 SCC 227  even if  a person files a writ  

petition for vindication of his private interest but raises question of public  

importance involving exercise of power by men in authority then it is the  

duty of the Court to enquire into the matter.

43. The argument of Shri Ranjit Kumar that the doctrine of prospective  

over  ruling  should  be  invoked  and  the  allotment  made  in  favour  of  

respondent  No.5  may  not  be  quashed  sounds  attractive  but  cannot  be  

accepted because we have found that the impugned allotment is the result of  

an exercise undertaken in gross violation of Article 14 of the Constitution  

and is an act of favoritism and nepotism.  The judgment in Harish Dhingra  

v. State of Haryana (supra) on which reliance was placed by Shri Ranjit  

Kumar is clearly distinguishable.  In that case the Court had noted that plots  

had been allotted by the Chief Minister out of his discretionary quota in the  

backdrop of an earlier judgment of the Division Bench of the High Court in  

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S.R. Dass v. State of Haryana (1988 PLJ 123)  and several allottees had  

altered their position.

44. In view of the above discussion, we do not consider it necessary to  

deal with the argument of Shri Ravi Shanker Prasad and Shri Ranjit Kumar  

that the land could have been allotted to the Memorial Trust even though it  

has not been registered as a trust under the 1951 Act or the Indian Trusts  

Act.

45. In  the  result,  the  appeal  is  allowed.   The  impugned  order  of  the  

Division Bench of the High Court is set aside and the writ petition filed by  

the appellant is allowed.  The allotment of 20 acres land to respondent No.5  

is declared illegal and quashed.  Notifications dated 6.6.2008 and 5.9.2008  

issued by the State Government under Section 23-A(1)(a) and (2) are also  

quashed.  Commissioner, Town and Country Planning, Bhopal is directed to  

take possession of the land and use the same strictly in accordance with the  

Bhopal Development Plan.  The State Government is directed to refund the  

amount deposited by respondent No.5 within a period of 15 days from today.

      ……………………….…J. [G.S. Singhvi]

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                       …………………………..J.

[Asok Kumar Ganguly] New Delhi April 06, 2011.

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