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C.A. No. 2143 of 2007                                                           1

REPORTABLE   

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2143 OF 2007

INSTITUTE OF LAW & ORS.               ….APPELLANTS          

Vs. NEERAJ SHARMA & ORS.                    …RESPONDENTS

J U D G M E N T

V. GOPALA GOWDA, J.

This appeal is directed against the two separate  

impugned orders dated 14.2.2005 passed in Civil Writ  

Petition No. 6916 of 2004 by both the members of the  

Division Bench of the High Court of Punjab & Haryana  

at Chandigarh and against the order dated 26.04.2006  

passed in Civil Misc. No. 5016 of 2005 and Civil Misc.

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No. 6173 of 2005. The brief facts of the case are  

stated hereunder:-

2. The  appellant-Institute  of  law  was  allotted  the  

land  measuring  28,376.23  sq.  yards  (5.75  acres)  in  

Sector 38-A in the Union Territory of Chandigarh at  

the  rate  of  Rs.900/-  per  sq.  yard  by  the  

administration of Union Territory of Chandigarh.  The  

rate was fixed by the Chandigarh Administration vide  

its Notification No. 31/1/100-UTFI (4-2002/1823) dated  

7.3.2002  issued  under  the  Punjab  Development  

Regulation  Act,  1952  fixing  the  land  rates  for  

allotment  to  educational  institutions  in  the  Union  

Territory  of  Chandigarh.  The  allotment  of  land  was  

made  in favour of appellant-Institute for 99 years on  

lease hold basis with the condition that the initial  

lease period will be 33 years and renewable for two  

like periods only if the lessee continues to fulfil  

all conditions of allotment.

3. The respondent No.1, Neeraj Sharma, filed a Writ  

Petition  No.6916  of  2004  before  the  High  Court  of

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Punjab  and  Haryana  at  Chandigarh  questioning  the  

legality  and  validity  of  the  allotment  of  land  

involved in this case urging various grounds.

4. On  14.2.2005,  the  Division  Bench  of  the  High  

Court,  consisting  of  the  then  Chief  Justice  and  a  

puisne Judge, by two separate but concurring orders  

disposed  of  the  writ  petition  cancelling   the  

allotment of land and directing the Union Territory of  

Chandigarh to take necessary corrective steps in the  

matter  in  consonance  with  the  constitutional  

philosophy of Article 14 of the Constitution of India  

and further directed the Union Territory of Chandigarh  

to take policy decision for allotment of educational  

institutional sites in favour of eligible persons so  

as to ensure that the allotments are made objectively  

and  in  a  transparent  manner.  After  delivering  the  

separate concurring orders, however, the puisne Judge,  

on the post judgment script, specified  that there was  

no agreement on certain paragraph Nos. 10, 12, 13, 14  

and 15 of the order passed by the then Chief Justice.

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5. Aggrieved by the orders, the appellants filed the  

applications being Civil Misc. No. 5016 of 2005 and  

Civil Misc. No. 6173 of 2005 under Rule 31 of Chapter  

4(F)  of  the  High  Court  Rules  and  Orders  read  with  

Clause  26  of  the  Letters  Patent,  urging  that  the  

matter be referred to another Bench or the full Bench  

for adjudication on the points of difference.

6. The  learned  nominated  Judge  of  the  High  Court  

disposed of the Civil Misc. Application Nos. 5016 of  

2005 and Civil Misc. No. 6173 of 2005 vide order dated  

26.4.2006,  holding  that  there  was  no  point  of  

difference between the Judges of the Division Bench on  

the question of maintainability of the writ petition  

and the  locus standi of the writ petitioner. It was  

held by him that although different reasons have been  

recorded by the members of the Division Bench, the  

conclusion  recorded  by  them  on  the  issue  of  

maintainability of the writ petition was the same. It  

was further held that both the  orders reveal a common  

object i.e. the cancellation of the allotment of land

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made in favour of the appellant-Institute. The learned  

Judge has further clarified that a process of auction  

by  necessary  implication  requires  invitation  to  all  

eligible prospective allottees through public notice  

which will be in conformity with the constitutional  

philosophy  under  Article  14  of  the  Constitution  of  

India. Having clarified in the aforesaid terms, the  

learned Judge dismissed both the applications.

7. The correctness of both the separate  orders dated  

14.02.2005  delivered  by  the  Division  Bench  and  the  

order dated 26.4.2006 of the learned nominated Judge  

hearing Civil Misc. Nos. 5016 and 6173 of 2005 are  

under  challenge  in  this  appeal  filed   by  the  

appellant-Institute,  raising  certain  substantial  

questions of law.  

8. It was contended by Mr. Nidhesh Gupta, the learned  

senior  counsel  for  the  appellant-Institute  that  the  

learned nominated Judge has erred in not appreciating  

the separate orders passed by the two learned Judges  

of  the  Division  Bench  of  the  High  Court,  who  have

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given  separate  and  distinct  orders,  which  are  

absolutely  conflicting  in  nature  and  had  no  

commonality at all. The learned Judge has failed to  

appreciate that even the ‘post judgment script’, one  

of  the  learned  judge  has  clearly  spelt  out  the  

differences of opinion between the two learned Judges  

and on this basis alone the matter ought to have been  

referred to a larger bench.

9. It was further contended that the High Court ought  

to have noticed that the land involved in this appeal  

had  been  allotted  to  the  appellant-Institute  after  

proper  scrutiny  and  on  the  published  and  notified  

rates of the land with a condition for specific uti-

lization of the land on lease hold basis and that none  

of the town planning was affected by the allotment of  

land in question in favour of the appellant-Institute  

since the area of land in question is situated in the  

institutional area where educational institutions are  

functioning.

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10. It was further contended that the High Court has  

gravely erred in not dismissing the writ petition on  

the basis of lack of  locus standi of the writ peti-

tioner who has filed the writ petition for personal  

interest for the reason that a residential site was  

not allotted to him by the Administration of Union  

Territory of Chandigarh.

11. The High Court has further erred in holding that  

the appellants are influential persons, therefore, the  

land was allotted to them, although no basis whatso-

ever has been shown in the impugned judgments.

12. The High Court has erred in not appreciating that  

the allotment of land in favour of the appellant-In-

stitute was made as per regular procedure adopted and  

being followed by Administration of Union Territory of  

Chandigarh for the last more than 50 years and there  

was no deviation whatsoever from the said procedure in  

allotting the land in favour of the appellant-Insti-

tute which is also non-profitable institute.

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13. It  is  further  contended  that  the  land  is  not  

auctioned by the Chandigarh Administration but it has  

allotted it to qualified persons/institutions on the  

basis of the social and economic needs of the city and  

society.  Further,  the  allotment  of  land  for  the  

purposes of establishing educational institutions has  

restrictions  on  the  transfer  as  well  as  usage  and  

therefore, it is different from the general land rates  

(viz. commercial and residential) which have no such  

restrictions and are freely marketable.

14. It is submitted that the land was allotted with  

certain conditions, (a) on leasehold basis initially  

for  33  years  (b)  non  transferable  directly  or  

indirectly and (c) usage was only for law institute.  

The  appellant-Institute  deposited  25%  of  the  lease  

amount  with  the  administration  of  Union  Territory  

where upon the letter of allotment dated 22.01.2004 in  respect of the land in question was issued in favour  

of the appellant-Institute.

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15. It  is  further  submitted  by  the  learned  senior  

counsel  that  the  writ  petition  dubbed  as  a  Public  

Interest Litigation filed by the respondent No. 1 is  

frivolous,  malicious  and  illegal  as  it  does  not  

disclose the source of information.

16. On the other hand, it is contended by the learned  

counsel on behalf of the first respondent that the  

respondent is a dedicated social worker having deep  

concern for the laws of land.

17. It is further contented that the appellants have  

managed to get the allotment of land which is contrary  

to the policy of the Union Territory of Chandigarh,  

the laws laid down by this Court in relation to the  

management of public property and is in the teeth of  

Article 14 of the Constitution of India.

18. The  respondents  have  further  contended  that  the  

said allotted land’s market value is worth more than  

Rs.50/- crores but, was granted by way of lease to the  

appellant-Institute  for  an  amount  of  Rs.2.55  crores

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only, which amounts to conferring largesse upon them  

which is not permissible in law and has caused huge  

loss to the public exchequer.  

19. It has been further contended that according to  

the rules for allotment of land in favour of schools  

and  other  educational  institutions,  no  land  can  be  

allotted to any institute without an advertisement and  

inviting applications from the eligible persons.

20. On  the  basis  of  the  aforesaid  rival  legal  

contentions urged on behalf of both the parties, the  

following points would arise for our consideration:

(i) Whether the writ petition filed in the  public interest is maintainable or not and  whether the writ petitioner has locus standi  to file the writ petition?

(ii) Whether  the  separate  but  concurring  orders passed by the Division Bench of the  High  Court  which  were  concurred  by  the  nominated third Judge are legal and valid or  whether  the  same  requires  interference  by  this Court?

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(iii) Whether  the  allotment  order  of  land  made in favour of the appellant-Institute is  in  violation  of  Article  14  of  the  Constitution  of  India  along  with  the  applicability of the “Allotment of land to  Educational Institutions (Schools),Rules etc.  on a Lease-hold basis in Chandigarh Scheme,  1996”?

(iv) What Order?

Answer to Point No.1

21.  We will first consider and answer the question of  

maintainability of the Writ Petition and locus standi  

of the writ petitioner, the respondent No. 1 herein  

who has filed the writ petition.  

22.  The  property  in  question  belongs  to  the  Union  

Territory  of  Chandigarh  Administration.  Under  our  

constitutional philosophy, it is a public property and  

therefore,  belongs  to  the  people.  Hence,  the  Union  

Territory of Chandigarh Administration is the trustee  

of the land whose duty is to see that the property is

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allotted in favour of eligible persons by following  

the  procedure  laid  down  by  the  Chandigarh  

Administration, and the same should not be allowed to  

be squandered or sold away by it at a throw away price  

as it has been done in the instant case as pointed out  

by its Audit Department itself that there is a clear  

loss of about Rs.139 crores to the public exchequer.

23. It has also come to our notice that the settlement  

of the land in question in favour of the appellant-

Institute was done within a few days without following  

the mandatory procedure for the allotment of land. We  

do not doubt the intention of the appellants to set up  

the law institute, however, their private interest is  

pitted against the public interest. The loss to the  

public exchequer could have been easily avoided had  

the land in question been settled by way of public  

auction inviting applications from eligible persons.

24. Further,  as  stated  in  the  writ  petition,  the  

petitioner is a resident of State of Punjab and is  

also an Income Tax Payee. It has neither been shown

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nor  proved  by  the  appellants  that  he  is  a  (i)  

meddlesome interloper (ii) that he is acting under  

malafide intention or (iii) that he has been set up by  

someone  for  settling  his  personal  scores  with  

Chandigarh  Administration  or  the  allottee.  Dealing  

with  the  question  of  locus  standi of  the  writ  

petitioner,  we  would  like  to  refer  to  certain  

decisions of this Court to hold that the writ petition  

filed by the first respondent is a public interest  

litigation to protect public interest. In the case of  

Fertilizer Corporation Kamgar Union (Regd.) Sindri &  

Ors.   v. Union of India & Ors.1, the constitutional  Bench of this Court has held as under:-

“29-30. ……Where does the citizen stand,  in the context of the democracy of judi- cial  remedies,  absent  an  ombudsman?  In  the face of (rare, yet real) misuse of  administrative  power  to  play  ducks  and  drakes with the public exchequer, espe- cially where developmental expansion nec- essarily  involves  astronomical  expendi- ture and concomitant corruption, do pub- lic bodies enjoy immunity from challenge  save through the post-mortem of parlia- mentary organs. What is the role of  the  judicial  process,  read  in  the  light  of  

1 AIR 1981 SC 344,  (1981) 1 SCC 568

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the dynamics of legal control and corpo- rate autonomy?

   XXX      XXX   XXX                  47. ……Nevertheless, the broad parameters  of fairness in administration, bona fides  in action, and the fundamental rules of  reasonable management of public business,  if breached, will become justiciable.

48. If a citizen is no more than a way- farer or officious intervener without any  interest or concern beyond what belongs  to any one of the 660 million people of  this country, the door of the court will  not be ajar for him. But, if he belongs  to an organisation which has special in- terest in the subject-matter, if he has  some concern deeper than that of a busy- body, he cannot be told off at the gates,  although whether the issue raised by him  is  justiciable  may  still  remain  to  be  considered. I, therefore, take the view  that the present petition would clearly  have been permissible under Article 226.”  

                               (emphasis supplied)

Similarly, in the case of  S.P. Gupta  v. Union of  

India and Anr.2, this Court has categorically laid down  the law in relation to locus standi  as under :-

“  18……whenever there is a public wrong or    public injury caused by an act or omis- sion of the State or a public authority  

2 (1981) Supp SCC 87

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which is contrary to the Constitution or  the law, any member of the public acting  bona fide and having sufficient interest  can maintain an action for redressal of  such public wrong or public injury. The  strict  rule  of  standing  which  insists  that  only  a  person  who  has  suffered  a  specific legal injury can maintain an ac- tion for judicial redress is relaxed and  a  broad  rule  is  evolved  which  gives  standing to any member of the public who  is not a mere busy body or a meddlesome  interloper but who has sufficient inter- est in the proceeding. There can be no  doubt  that  the  risk  of  legal  action  against the State or a public authority  by any citizen will induce the State or  such public authority to act with greater  responsibility and care thereby improving  the administration of justice……It is also  necessary to point out that if no one can  have standing to maintain an action for  judicial redress in respect of a public  wrong or public injury, not only will the  cause of legality suffer but the people  not having any judicial remedy to redress  such public wrong or public injury may  turn to the street and in that process,  the  rule  of  law  will  be  seriously  im- paired….

19. There is also another reason why the  Rule of locus standi needs to be liber- alised. Today we find that law is being  increasingly used as a device of organ- ised  social  action  for  the  purpose  of  bringing about socio-economic change. The  task  of  national  reconstruction  upon  which we are engaged has brought about  enormous increase in developmental activ-

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ities and law is being utilised for the  purpose of development, social and eco- nomic. It is creating more and more a new  category  of  rights  in  favour  of  large  sections  of  people  and  imposing  a  new  category of duties on the State and the  public officials with a view to reaching  social justice to the common man…….  In  other words, the duty is one which is not  correlative to any individual rights. Now  if breach of such public duty were al- lowed to go unredressed because there is  no one who has received a specific legal  injury or who was entitled to participate  in the proceedings pertaining to the de- cision relating to such public duty, the  failure to perform such public duty would  go unchecked and it would promote disre- spect for the rule of law. It would also  open the door for corruption and ineffi- ciency because there would be no check on  exercise of public power except what may  be provided by the political machinery,  which at best would be able to exercise  only  a  limited  control  and  at  worst,  might become a participant in misuse or  abuse of power. It would also make the  new social collective rights and inter- ests created for the benefit of the de- prived sections of the community meaning- less and ineffectual.

20. ………If public duties are to be en- forced and social collective “diffused”  rights and interests are to be protected,  we  have  to  utilise  the  initiative  and  zeal of public-minded persons and organi- sations  by  allowing  them  to  move  the  court and act for a general or group in- terest, even though, they may not be di-

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rectly injured in their own rights. It is  for this reason that in public interest  litigation  —  litigation  undertaken  for  the purpose of redressing public injury,  enforcing public duty, protecting social,  collective, “diffused” rights and inter- ests or vindicating public interest, any  citizen who is acting bona fide and who  has  sufficient  interest  has  to  be  ac- corded standing.  What is sufficient in- terest to give standing to a member of  the public would have to be determined by  the court in each individual case. It is  not possible for the court to lay down  any  hard  and  fast  rule  or  any  strait- jacket formula for the purpose of defin- ing or delimiting “sufficient interest”.  It has necessarily to be left to the dis- cretion of the court………  

 XXX XXX   XXX          23. We would, therefore, hold that any  member  of  the  public  having  sufficient  interest can maintain an action for judi- cial  redress  for  public  injury  arising  from breach of public duty or from viola- tion of some provision of the Constitu- tion or the law and seek enforcement of  such public duty and observance of such  constitutional or legal provision……”

(Emphasis supplied)

Further, in the case of  Dattaraj Nathuji Thaware  v.  

State  of  Maharashtra  &  Ors.3,  this  Court  held  that  

Public Interest Litigation is a weapon which has to be  3( 2005)   1  SCC 590

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used with great care and circumspection.  It has to be  

used as an effective weapon in the armoury of law for  

delivering  social  justice  to  citizens.  The  aim  of  

Public  Interest  Litigation  should  be  to  redress  

genuine public wrong or public injury.  

25.  It is clear to us that the respondent No. 1-the  

writ petitioner has filed a bonafide writ petition and  

he  has  the  necessary  locus.  There  is  an  apparent  

favour shown by the Union Territory of Chandigarh in  

favour of the appellant-Institute which is a profit  

making company and it has not shown to this Court that  

the allotment of land in its favour is in accordance  

with law. Hence, we are of the view that there is a  

strong  reason  to  hold  that  the  writ  petition  is  

maintainable in public interest. We completely agree  

with the views taken by the High Court, wherein it has  

rightly  held  that  the  writ  petition  is  a  Public  

Interest  Litigation  and  not  a  Private  Interest  

Litigation. The writ petition in question is the first  

petition filed by the first respondent and his first

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endeavor  to  knock  the  doors  of  the  constitutional  

court to protect the public interest by issuing a writ  

of certiorary.

26.  The appellants have miserably failed to show the  

malafide intention on the part of the respondent No. 1  

in filing writ petition and we agree with the view of  

the then Chief Justice in his order who has held that  

he is a public spirited person. The cause ventilated  

by  him  is  definitely  worth  consideration  and  the  

record of the AAO (Audit) submitted to the Chandigarh  

Administration  proves  the  allegations  made  by  him.  

Further  it  is  observed  that  His  Excellency,  the  

Governor  of  Punjab-cum-Administrator,  Chandigarh  has  

rightly come to the conclusion in his decision that  

the impugned allotment of land in favour of the first  

appellant-Institute requires taking up of corrective  

steps. The Administration of the Union Territory of  

Chandigarh  has  conferred  largesse  on  the  appellant-

Institute  by  allotting  land  in  its  favour  for  

inadequate consideration without following procedure.

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Therefore, we hold that the writ petition filed by the  

first respondent is maintainable as the allotment of  

the  land  in  question  made  in  favour  of  the  first  

appellant-Institute is arbitrary, illegal and the same  

is in violation of Article 14 of the Constitution.

Answer to Point Nos. 2, 3 and 4

27. We  have  carefully  considered  and  examined  the  

question of the legality of the allotment order of the  

land made in favour of the appellant-Institute. It is  

submitted  on behalf of the first respondent that the  

allotment of public land at throw away price or at no  

price to the private educational institutions with an  

avowed object to serve the public interest is contrary  

to the theory of “charitable education” that serve the  

pious  cause  of  literacy.  The  aforementioned  legal  

issue was visualized by this Court and has lucidly  

laid down the law in the case of Union of India & Anr.  

v. Jain Sabha, New Delhi& Anr.4 wherein the plea of  charitable intentions or philanthropic goal behind the  

4(1997)  1  SCC 164

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establishment of private educational institution was  

not accepted by this Court, holding that :-

 “11……we think it appropriate to observe  that it is high time the Government re- views the entire policy relating to al- lotment  of  land  to  schools  and  other  charitable institutions. Where the public  property is being given to such institu- tions practically free, stringent condi- tions have to be attached with respect to  the user of the land and the manner in  which schools or other institutions es- tablished  thereon  shall  function.  The  conditions  imposed  should  be  consistent  with  public  interest  and  should  always  stipulate  that  in  case  of  violation  of  any of those conditions, the land shall  be  resumed  by  the  Government.  Not  only  such conditions should be stipulated but  constant monitoring should be done to en- sure that those conditions are being ob- served in practice. While we cannot say  anything about the particular school run  by the respondent, it is common knowledge  that some of the schools are being run on  totally  commercial  lines.  Huge  amounts  are being charged by way of donations and  fees.  The  question  is  whether  there  is  any justification for allotting land at  throw-away  prices  to  such  institutions.  The  allotment  of  land  belonging  to  the  people at practically no price is meant  for  serving  the  public  interest,  i.e.,  spread of education or other charitable  purposes; it is not meant to enable the  allottees to make money or profiteer with  the aid of public property. We are sure  that the Government would take necessary

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measures in this behalf in the light of  the observations contained herein.”

28. Further, in another case, this Court set aside the  

allotments  of  land  made  by  the  allotment  committee  

even though most of the allottees had constructed the  

buildings,  because,  the  allotment  Committee  had  not  

followed  any  rational  or  reasonable  criteria  for  

inviting the applications for the allotment of land  

through an open advertisement.  Reliance is placed on  

the decision of this Court in New India Public School  

& Ors. v. HUDA and Ors.5, which states as under:-

“4………Therefore,  the  public  authorities  are required to make necessary specific  regulations or valid guidelines to exer- cise their discretionary powers; other- wise, the salutary procedure would be by  public  auction.  The  Division  Bench,  therefore, has rightly pointed out that  in the absence of such statutory regula- tions exercise of discretionary power to  allot  sites  to  private  institutions  or  persons was not correct in law.”

29. Further, we have to refer to the case of  Akhil  

Bhartiya Upbhokta Congress  v.  State of M.P. & Ors.6,  

5 (1996)  5 SCC 510 6 (2011)  5 SCC 29

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wherein this Court has succinctly laid down the law  after considering catena of cases of this Court with  

regard to allotment of public property as under :  

“50. 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  the  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 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 the rule of law.

  XXX        XXX          XXX

54. In Breen v. Amalgamated Engg. Union,  Lord Denning MR said: (QB p. 190, B-C)

‘…  The  discretion  of  a  statutory  body is never unfettered. It is a  discretion which is to be exercised  according  to  law.  That  means  at

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least this: the statutory body must  be  guided  by  relevant  considerations  and  not  by  irrelevant.  If  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.’

55. In  Laker Airways Ltd. v.  Deptt. of  Trade 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: (QB p. 705, F-G)

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

56. This Court has long ago discarded the  theory of unfettered discretion. In  S.G.  Jaisinghani v. Union of India, Ramaswami,  J.  emphasised  that  absence  of  arbitrary  power  is  the  foundation  of  a  system  governed by rule of law and observed: (AIR  p. 1434, para 14)

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‘14.  In  this  context  it  is  important  to  emphasise  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……..’  

  XXX        XXX          XXX

59. In Kasturi Lal Lakshmi Reddy v. State  of J&K, Bhagwati J. speaking for the Court  observed: (SCC pp. 13-14, para 14)

‘14.  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……….’

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61. 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:  (Common Cause case, SCC p. 554, para 24)

‘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….’

62. In  Shrilekha  Vidyarthi v.  State  of  U.P. 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:  (SCC  pp. 236, 239-40)

‘29. It can no longer be doubted  at this point of time that Article  14  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

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of  reasonableness,  it  would  be  unconstitutional…….”

 In the light of the above mentioned cases, we have to  

record our finding that the discretionary power con-

ferred upon the public authorities to carry out the  

necessary Regulations for allotting land for the pur-

pose of constructing a public educational institution  

should not be misused.

30. We  further  hold  that  the  fundamental  right  to  

establish and run an educational institution in terms  

of Article 19 (1)(g) of the Constitution is subject to  

reasonable  restrictions  under  Article  19(6)  of  the  

Constitution of India. Therefore, the State is within  

its  competence  to  prohibit  “commercialization  of  

education”.  

31. In  Modern  School v. Union  of  India  and  Others7  

(supra), this Court has held thus :-

“72. So far as allotment of land by the  Delhi  Development  Authority  is  con- cerned, suffice it to point out that the  same has no bearing on the enforcement  

7 (2004) 5 SCC 583

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of the provisions of the Act and the  Rules framed thereunder but indisputably  the institutions are bound by the terms  and  conditions  of  allotment.  In  the  event such terms and conditions of al- lotment have been violated by the allot- tees, the appropriate statutory authori- ties would be at liberty to take appro- priate step as is permissible in law.”

32. We,  therefore,  disregard  the  plea  of  charitable  

intention  or  philanthropic  goal  behind  the  

establishment of the appellant educational institution  

as the establishment of the same does not serve any  

public interest and we cannot allow the allottee to  

make money or profiteer with the aid of the public  

property.

33.   Further,  on  a  careful  evaluation  of  the  

statutory object behind clause 18 of the “Allotment of  

Land to Educational Institutions (Schools)Rules Etc.  

on Lease Hold basis in Chandigarh Scheme, 1996” no  

systematic  exercise  has  been  undertaken  by  the  

Administration of Chandigarh to identify the needs of  

different kinds of professional institutions required  

to be established in Chandigarh. We thus concur with

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the reasoning of the High Court in the impugned orders  

that the Screening Committee comprising of senior and  

responsible  functionaries  allotted  the  institutional  

sites in favour of the allottee without following any  

objective criteria and policy. The Screening Committee  

acted in a manner which is contrary to the principles  

laid down by this Court in the judgments cited above  

in allotting the land in question in favour of the  

first appellant. We, therefore, conclude that the High  

Court has rightly held that the policy followed by the  

Chandigarh Administration where the allotment of land  

was done in favour of the appellant-Institute without  

giving  any  public  notice  and  in  the  absence  of  a  

transparent policy based upon objective criteria and  

without  even  examining  the  fact  that  the  Union  

Territory  of  Chandigarh  is  already  under  extreme  

pressure of over population and even in the case of  

allotment  of  school  sites  by  making  no  attempt  to  

enforce  clause  18  of  the  Scheme,  1996,  thereby  

confining  the  said  provision  merely  to  the  statute  

book,  is  arbitrary,  unreasonable  and  unjust  and  is

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opposed  to  the  provisions  of  Article  14  of  the  

Constitution of India.

34.   We now come to the opinion expressed by the then  

Chief justice in his order which was concurred by the  

nominated Judge hearing the Civil Misc. Applications  

that although different reasons have been recorded by  

the members of the Division Bench in their order who  

have disposed of CWP No.6916 of 2004, the conclusion  

arrived at by them was the same. Therefore, the order  

passed by the then Chief Justice cannot be said to  

have rendered a different opinion so as to attract the  

applicability of Rule 31 of Chapter 4, para F, of the  

High Court Rules and Orders, read with clause 26 of  

the Letters Patent.

35.  A  perusal  of  the  directions  contained  in  the  

orders of the High Court reveals a common effect, i.e.  

the allotment of the institutional plot made in favour  

of the appellant-Institute stands cancelled as it did  

not conform to the constitutional philosophy enshrined  

in Article 14 of the Constitution of India. This was

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also conceded by the learned nominated Judge of the  

High Court hearing the Civil Misc. No.5016 of 2005 and  

Civil Misc. No. 6173 of 2005. Thus, there appears to  be  absolutely  no  point  of  difference  or  divergence  

between  the  then  Chief  justice  and  the  companion  

puisne  Judge,  who  have  issued  directions  to  the  

Administration of the Union Territory of Chandigarh.  

It has rightly been pointed out by the nominated Judge  

that there may apparently seem to be a difference in  

the thought process and also the relative rigour of  

the expressions used by both the learned Judges, yet,  

it has not been possible to conclude that there was  

any  divergence  in  the  directions  recorded  in  their  

separate views.

36.   We thus hold that the impugned order passed by  

the learned puisne Judge, which was concurred by the  

then Chief Justice by his separate order and the order  

of the third nominated Judge holding that there is no  

difference of opinion in the orders of the Division

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Bench  are  legal  and  valid  and  do  not  require  any  

interference by this Court.

37.   It  is  needless  to  state  that  certain  

observations made in the impugned orders against some  

of  the  appellants  and  the  respondents  are  totally  

unwarranted and the same are expunged.  

38.   In view of the foregoing reasons, we do not find  

any reason to interfere with the impugned orders in  

exercise of this Court’s appellate jurisdiction. The  

appeal  is  accordingly  dismissed.  The  order  dated  

16.04.2007 granting stay shall stand vacated.

  ………………………………………………………………………J.                    [SUDHANSU JYOTI MUKHOPADHAYA]

………………………………………………………………………J.                           [V. GOPALA GOWDA] New Delhi, September 19, 2014