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Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil      Appeal      No.     6105     OF     2012   (Arising out of SLP No. 16416 OF 2011)

Mangal Amusement Park (P) Ltd. & Anr. ...   Appellants

Versus

State of Madhya Pradesh & Others ...         Respondents

J  U  D  G  E  M  E  N  T

H.L. Gokhale J.

Leave granted.

2. This appeal by special leave seeks to challenge the judgment  

and order dated 19.5.2011 rendered by a Division Bench of the Madhya  

Pradesh High Court dismissing the Writ Petition bearing No.5698/2008  

filed by the appellants herein.  The said petition sought to challenge the  

change of land-use from ‘commercial’  to a ‘regional park’  of a parcel of  

land which had been allotted to the appellants in the town planning  

scheme of Indore, and also the decision of the State Government that the  

concerned land be utilized only after inviting fresh tenders.

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3. The first appellant herein is a Company registered under the  

provisions of the Companies Act, 1956, and the second appellant is its  

Managing Director.  The respondent No.1 to this appeal is the State of  

Madhya Pradesh through its Principal Secretary, Department of Housing  

and Environment, Bhopal, whereas the respondent No.2 is the Director of  

Town and Country Planning of Madhya Pradesh.  The third respondent to  

this appeal is Indore Development Authority (“IDA” for short) through its  

Chairman, whereas the fourth respondent is the same Authority through  

its Chief Executive Officer.  Shri Ranjit Kumar, learned senior counsel has  

appeared for the appellants.  Shri Vikas Singh, learned senior counsel has  

appeared for the first two respondents, and Ms. Vibha Datta-Makhija,  

learned counsel has appeared for respondent no.3 and 4.

Facts leading to this appeal:-

4.   During November 1991 to February 1992, IDA floated tenders through  

advertisements for setting up of an amusement park on a parcel of land  

owned by it situated in village Bhamori-Dubey.  The concerned land  

admeasured about seven acres  comprising of survey nos. 91 part, 92/1,  

93/1, 93/2, 94/1, 94/2, 95/1, 95/2, 96/1, 96/2, 152, 155 part, 157, 159,  

160, 162, 163, 164 part, 165 part and 166 part and was situated within  

Scheme No.54.  There is no dispute that under the then subsisting  

Development Plan the designated land-use of these survey nos. was  

‘commercial’.  It is the case of the appellants that though they applied in  

pursuance to the advertisement, and though the appellants were the  

most eligible, IDA arbitrarily delayed the acceptance of their tender.  This  

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led the appellants to file an earlier writ petition in the High Court of  

Madhya Pradesh bearing M.P. No.313/1992 which was allowed by the High  

Court.  Consequently, the appellants were allotted this parcel of land for  

the establishment of a Children’s amusement park.   

5. Accordingly, IDA granted a license to the appellants, the  

terms and conditions of which were as follows:-

“ LICENSE (FOR AMUSEMENT CENTRE)

Dated 6.5.1994

This license is granted to Shri Ramesh Mangal son of  Shri Manikchand Mangal age 48 years, resident of  8/2, New Palasia, Indore, Managing Director, M/s  Mangal Amusement Park Pvt. Ltd., Indore, by the  Indore Development Authority Indore (M.P.).  Terms  and conditions of this license shall be as follows:-

TERMS     AND     CONDITIONS:-   

The land measuring 7 acres is given to M/s Mangal  Amusement Park Pvt. Ltd. (hereinafter called the  ‘Licensee vide letter No.4179 dated 4.4.1994 on  license by the Indore Development Authority initially  for a period of 15 years.  The licensee will have to  develop inside infrastructure such as path-ways,  roads, boundary walls, land installation of rides and  games etc. at his own cost as approved by the  Authority.  Construction of Food & Beverage’s  Centres, Kiosks, Shops, Administrative building, toilet  shall also be permissible as per requirement.

2. The period of license shall commence from the  date of activation of the park or 18 months from the  date of giving possession, whichever is earlier.

3. The period of completion of the project shall be  24 months (inclusive of Monsoon season) from the  date of handing over the possession of the said land.  Failing which, the license may be terminated,  forfeiting the Earnest Money and other payments, if  any, by the Authority.

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4. The advance license fee shall be payable  annually before first of June.  In case, the licensee  fails to pay the fee on or before the due date, an  interest at the rate of 18% per annum shall be  charged for period defaulted.  The interest shall be  calculated on the license fee itself for full calendar  month.

5. In addition to the license fee, an amount equal  to 25% of the entry fee will be charged by the I.D.A.  and has to be paid by the licensee by 10th of next  month.

6. Earnest Money of Rs.1,00,000/- has been kept  with I.D.A. and no interest shall be given on the  amount of Earnest Money.  This amount shall be  adjusted towards license fee 1,81,000.00 (Rs. One  Lac eighty thousand only) per year on commission of  the project.

7. The Authority or an officer authorized in this  behalf shall have the power to examine the accounts  of collection of entry fee, as and when deemed fit.  The Authority may further regulate the mode of  collection of entry fee.  The duty of collection of  entry fee will rest on the licensee himself.

8. The license may be renewed for further period  of 15 years by enhancing the license fee, maximum  by 40% and thereafter at such a percentage as may  be decided by the Authority.

9. Bank Guarantee of Rs.5,00,000/- (Rs. Five lacs  only) given by the licensee shall be redeemed after  three complete years from the date of activation of  the amusement park.

10. The rides, games etc. should be bought from  the suppliers manufacturing these in India  indigenously.

11. At least one roller coaster, one ferries wheel  and bay train, one set of merry cups, one Columbus  and one telecombat must be erected with other  rides.

12. The complete amusement centre shall be  operated and managed by the licensee himself at his  own cost and responsibilities.

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13. In the event of any increase or decrease in the  area on physical measurement, the license fee shall  be subject to the increase or decrease  proportionately.

14. In the event of violation of any of the terms  and conditions mentioned hereinabove, on the part  of the licensee, the decision of the Chairman, Indore  Development Authority shall be final.

15. Land for which licnese is granted is marked in  green colour in………. plan.

SIGNATURE OF  LICENSEE”  

6. It is the case of the appellants that they submitted the plans,  

maps and drawings for necessary construction, and thereafter started  

using the concerned parcel of land as amusement park.

7. It so transpired that sometime in December 1999, respondent  

nos.1 and 2 i.e. the State and the Town Planning Dept. initiated the  

process of modification of the Development Plan.  In that process it was  

proposed to change the user of this parcel of land from ‘commercial’  to  

‘regional park’ (i.e. a green area).  The Chairman of IDA however, wrote in  

that context to the respondent nos.1 and 2 on 7.12.1999 that such a  

change was not desirable, since the use of the concerned land was  

already secured for a specified purpose in the master plan. The State  

Govt. however proceeded to issue a notification on 9.3.2001 under  

Section 23-A (2) of Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam,  

1973 (M.P. Act for short) proposing the change of the land-use from  

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‘commercial’  to ‘regional park’, and inviting objections thereto.  The  

appellants did raise objections against the proposed modification which  

were heard by the Principal Secretary to the Govt. of Madhya Pradesh on  

23.8.2001.

8. It is the case of the appellants that they wanted to put up a  

banquet hall and an amusement club on this parcel of land, and therefore  

sought the requisite permission from IDA.  IDA in fact passed a resolution  

bearing No. 133 on 8.5.2003 recommending grant of such permission  

though subject to the conditions mentioned therein.  The Chief Executive  

Officer of IDA accordingly wrote to the Principal Secretary of the Madhya  

Pradesh Govt. on 27.5.2003 for grant of this permission, and consequently  

for the increase in the license fee.  The State Govt. however wrote back  

on 23.9.2003 declining the request, and asking IDA to invite the tenders  

afresh for the re-allotment of the plot (the appellants however contend  

that there is a contrary note on the files of the respondents dated  

29.9.2003 recommending the proposed use).  That apart, ultimately the  

Madhya Pradesh Govt. issued the notification approving the change in the  

land-use from ‘commercial’  to a ‘regional park’ on 19.11.2003.  It is this  

letter dated 23.9.2003 and notification dated 19.11.2003 which were  

challenged by the appellants by filing Writ Petition No.5698/2008 in the  

High Court of Madhya Pradesh.   

9. This letter dated 23.9.2003 reads as follows:-

“ M.P. Government Housing and Environment Department

Ministry

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Letter No.H-3-107/3/32 Bhopal Date  23.09.2003

To, The Chief Executive Officer Indore Development Authority Indore, M.P.

Sub: Regarding grant of permission to Mangal  Amusement Park Pvt. Ltd. for the construction  of Amusement Club, Banquet Hall on the land  allotted under plan No.54 of the Indore  Development Authority.

Ref: Your letter No.6314 dated 23.05.03.  

Please take reference of the letter referred above, by  which Authority had sought permission from Govt.  for proposal on land allotted by Authority on lease  1994.

2. It has been established from the documents  made available by the Authority that  proceedings by the Authority have not been in  accordance with the rules and there has been  lack of transparency.  Therefore, it is not  possible to give permission on this proposal of  Authority.

3. It is directed to Authority that it utilize the land  in question only after issuing fresh notification  inviting tenders.

        Sd/-      Illegible    23.09.03

     (C.C. Padiyar)             Under  

Secretary           M.P. Govt.

      Housing and Environmental  Department”

10. The notification dated 19.11.2003 reads as follows:-

“HOUSING     &     ENVIRONMENT     DEPARTMENT   

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Vallabh Bhawan, Bhopal.

Bhopal dated 19th November, 2003.

No.F-3-47-0000-32 –  The State Government  vide its Notification No.F-3-47-2000-32 dated  9th March, 2001 issued under Section 23(A) (2)  of the Madhya Pradesh Urban and Rural Act,  1973 (Act No.23/1973) had proposed certain  modifications in public interests.  Thereafter  notices to the above effect were also published  in 2 leading newspapers on 15th ad 16th March,  2001.  Through said notice, Objections were  invited from the aggrieved persons and  ultimately 4 objections were received jointly  and individually.  Thereafter objectors of the  said objections were heard on 3.8.2001 and  23.8.2001 and their objections were  considered and were finally rejected.  Thereafter Department sought an opinion from  the Municipal Corporation of Indore on the  proposed modification and the Municipal  Corporation has granted its No Objection vide  letter dated 1st June, 2001.

(2) In the premises aforesaid, State Government  hereby confirms modification of the following lands  of Village Bhamori Dubey, Indore, as described in  Schedule ‘A’ hereunder, according to user  prescribed in the Indore Development scheme, 1991.  It is further informed that this modification will be  an integrated part of the Approved Indore  Development Scheme, 1991 as well as Draft  Development Scheme, 2011.

SCHEDULE   ‘  A  ’   

Land use modification of 18.222 Hectares and  17.931 Hectares situated in Village Bhamori  Dubey under Indore Development Scheme,  1991-

Sr.  No.

Survey  No.

Area (In  Hect).

Land user  prescribed  in the  Indore  Developme

Change  land use

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nt Scheme (1) (2) (3) (4) (5) 1. 257 &  

259 9.134 Regional  

Park Commerci al

2. 258 part

260

0.113

1.000

- “ -

- “ -

“

“ 3. 261 1.295 - “ - “ 4. 262 1.474 - “ - “ 5. 264 0.522 - “ - “ 6. 265 2.429 - “ - “ 7. 265 part 2.255 - “ - “

18.222 8. 91 part 0.713 Regional  

Park Commerci

al 9. 92/1 0.429 - “ - “ 10. 92/2 0.425 - “ - “ 11. 93/1 1.060 - “ - “ 12. 93/2 1.064 - “ - “ 13. 94/1 0.235 - “ - “ 14. 94/2 0.235 - “ - “ 15. 95/1 0.219 - “ - “ 16. 95/2 0.223 - “ - “ 17. 96/1 0.117 - “ - “ 18. 96/2 0.117 - “ - “ 19. 152 0.174 - “ - “ 20. 155 part 0.267 - “ - “ 21. 157 0.186 - “ - “ 22. 159 0.344 - “ - “ 23. 160 0.360 - “ - “ 24. 161 0.170 - “ - “ 25. 162 8.259 Commercia

l Regional  

Park 26. 163 1.967 - “ - “ 27. 164 part 0.607 - “ - “ 28. 165 part 0.534 - “ - “ 29. 166 part 0.226 - “ - “

17.931

In the name of and by Order of Governor

Shivanand Dubey, Deputy Secretary”

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11. The appellants point out that thereafter also the stand of IDA  

was different from that of the concerned department as reflected in the  

Notesheet of IDA dated 3.2.2005.  Yet, ultimately it accepted the view-

point of the State Govt., and issued a show cause notice to the appellants  

on 8.1.2007 alleging various breaches of the terms and conditions of  

allotment.  In para 7 and 8 thereof, it was alleged as follows:-

“7. You have not taken action to establish  Children’s Amusement Park on the land allotted  violating conditions of license.  Half of the land is still  undeveloped, vacant and without any use given after  12 years of allotment.

8. Application for the construction of  Amusement Club, Banquet Hall on the land allotted,  given by you establishes that you do not want to run  activities relating to Children’s Amusement Park on  the land allotted.”

The appellants were, therefore, asked to show cause as to  

why the license of land allotted to them should not be cancelled.

12. It is the further case of the appellants that although this show  

cause notice was issued on 8.1.2007, the Chairman of IDA once again  

wrote to the Govt. on 29.11.2007 asking it to retain the land-use of this  

particular parcel of land as commercial.  The State Govt. however  

proceeded to bring the modification into force with effect from 1.1.2008.  

It is at this stage that the above writ petition No. 5698 of 2008 was filed  

with the following prayers:-  

(a) to strike down Section 23-A of Madhya Pradesh Nagar Tatha  

Gram Nivesh Adhiniyam 1973 (which prayer was however not pressed),  

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(b) to quash the notification dated 19.11.2003, and  

(c) to quash Govt.’s letter dated 23.9.2003 (which prayer was  

added later on).

13. Contentions of the rival parties

The principle submission of the appellants was three-fold:-

(a) the document of allotment of the concerned parcel of land to  

the appellants was a document of lease and not simply a license, and that  

the appellants were entitled to the renewal thereof,

(b) the appellants had made good investment onto the concerned  

parcel of land, and they had their legitimate expectations.  Consequently,  

the respondents were bound by the doctrine of promissory estoppel to  

renew the allotment,  

And   

(c) the decision to change the land-use was a malafide one for  

the benefit of another party which had its parcel of land in the vicinity,  

where the land-use was changed from the previous one which was  

‘regional park’, to ‘commercial’.  The change of use of land of the parcel  

allotted to the appellants was effected to set off the resultant reduction in  

green area, and to justify the change of land-use of the parcel of land  

allotted to the other party.

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14. The petition was opposed by respondent nos. 1 and 2 on the  

one hand, and by respondents no.3 and 4 by filing their replies.  They  

contended principally as follows:-

(a) the concerned document of allotment was clearly a document  

of license, and not that of lease.  In any case, by that time the period of  

license having expired after the lapse of 15 years, the appellants did not  

have any case for renewal particularly when they had not put to use half  

of the land for the purpose for which it was allotted, and when in fact they  

wanted to use it for another purpose by putting up a banquet hall therein.

(b) Inasmuch as, the document of allotment was a license which  

was valid only for 15 years, there was no question of the appellants  

having a legitimate expectation for a renewal beyond 15 years.  The  

respondents had not promised any such renewal to the appellants to  

enable them to avail of the doctrine of promissory estoppel.

(c) The modification in the development plan was effected after  

considering all relevant factors and not for obliging anybody.  No material  

in support of their allegation had been produced by the appellants.  The  

change was effected after following the due process of law, viz. inviting  

suggestions and objections, and hearing the concerned parties.  The  

change cannot be faulted on that count either.

15. The petition was heard by a Division Bench of the Madhya  

Pradesh High Court which dismissed the same by its judgment and order  

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dated 19.5.2011, after hearing the counsel for all the parties.  This  

judgment is under challenge in the present appeal.

16. Consideration of the rival submissions

The principle question to be considered is as to whether the  

document of allotment of land dated 6.5.1994 was in any way a lease or a  

license.  As far as a lease is concerned, Section 105 of the Transfer of  

Property Act, 1882, defines it as follows:-

“105. Lease defined.- A lease of immoveable  property is a transfer of a right to enjoy such property, made  for a certain time, express or implied, or in perpetuity, in  consideration of a price paid or promised, or of money, a  share of crops, service or any other thing of value, to be  rendered periodically or on specified occasions to the  transferor by the transferee, who accepts the transfer on such  terms.

Lessor, lessee, premium and rent defined. –  The transferor is called the lessor, the transferee is called the  lessee, the price is called the premium, and the money,  share, service or other thing to be so rendered is called the  rent.”

As far as a license is concerned, the same is defined under Section 52 of  

the Indian Easements Act, 1882, as follows:-

“52. “License”  defined. - Where one person  grants to another, or to a definite number of other persons, a  right to do, in or upon the immovable property of the grantor,  something which would, in the absence of such right, be  unlawful, and such right does not amount to an easement or  an interest in the property, the right is called a license.”

From these two definitions it is clear that a lease is not a mere  

contract but envisages and transfers an interest in the demised property  

creating a right in favour of the lessee in rem.  As against that a license  

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only makes an action lawful which without it would be unlawful, but does  

not transfer any interest in favour of the licensee in respect of the  

property.

17. The issue concerning the distinction between lease and  

license came up for consideration before this court in Associated Hotels  

of India vs. R.N. Kapoor reported in AIR 1959 SC 1262.  In para 27 of  

his judgment, Subba Rao,J.  (as he then was) observed therein as follows  

with respect to lease:-

27. There is a marked distinction between a lease and  a license. Section 105 of the Transfer of Property Act defines a  lease of immovable property as a transfer of a right to enjoy  such property made for a certain time in consideration for a  price paid or promised. Under Section 108 of the said Act, the  lessee is entitled to be put in possession of the property. A  lease is therefore a transfer of an interest in land. The interest  transferred is called the leasehold interest. The lessor parts  with his right to enjoy the property during the term of the  lease, and it follows from it that the lessee gets that right to  the exclusion of the lessor…..”

Thereafter, the learned Judge referred to the definition of license, then  

observed as follows:-

“Under the aforesaid section, if a document gives only a  right to use the property in a particular way or under certain  terms while it remains in possession and control of the owner  thereof, it will be a license. The legal possession, therefore,  continues to be with the owner of the property, but the licensee  is permitted to make use of the premises for a particular  purpose. But for the permission, his occupation would be  unlawful. It does not create in his favour any estate or interest  in the property. There is, therefore, clear distinction between  

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the two concepts. The dividing line is clear though sometimes it  becomes very thin or even blurred.”

18. Subba Rao, J., thereafter referred to the judgments of Court of  

Appeal in Errington V. Errington, 1952-1 All ER 149, and Cobb V. Lane,  

1952-1 All ER 1199, and then observed as follows:-

“The following propositions may, therefore, be taken as  well-established : (1) To ascertain whether a document creates  a license or lease, the substance of the document must be  preferred to the form; (2) the real test is the intention of the  parties - whether they intended to create a lease or a license;  (3) if the document creates an interest in the property, it is a  lease; but, if it only permits another to make use of the  property, of which the legal possession continues with the  owner, it is a license; and (4) if under the document a party  gets exclusive possession of the property, prima facie, he is  considered to be a tenant; but circumstances may be  established which negative the intention to create a lease.”

These propositions have been quoted with approval subsequently  

by a bench of three Judges in Konchanda Ramamurty Subudhi (dead)  

V. Gopinath Naik and Ors. reported in AIR 1968 SC 919, and in Capt.  

B.V. D’Souza V. Antonio Fausto Fernandes reported in AIR 1989 SC  

1816.  

19. (i) Having seen this legal position, we may now examine the  

submissions of the rival parties.  It was submitted by Shri Ranjit Kumar,  

learned senior counsel that, it has to be noted that though the document  

of allotment states that the license is granted initially for a period of 15  

years, clause 8 thereof adds that it may be renewed for a further period of  

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15 years by enhancing the license fee maximum by 40%, and thereafter  

at such a percentage as may be decided by the authority.  This indicated  

the permission to the allottee to remain on the concerned parcel of land  

for a period of 30 years and more, and should therefore be construed as  

creating an interest in the parcel of land.  Therefore, in his submission the  

document of allotment created a lease, and renewal thereof was a matter  

of formality, and the IDA was bound to renew the document. He referred  

to the judgment of this Court in Sudhir Kumar & Ors. vs. Baldev  

Krishna Thapar & Ors. reported in 1969 (3) SCC 611 to submit that a  

lessor cannot withhold his consent for renewal unreasonably.

(ii)  Shri Vikas Singh, learned senior counsel appearing for IDA and Ms.  

Vibha Datta-Makhija, learned counsel for the State Govt. submitted on the  

other hand that the possession of the allottee was merely a permissive  

one, and that it was not exclusive to warrant an inference of creation of  

an interest.  In their view, the document of allotment when read in the  

entirety makes it very clear that it was a license and not a lease.

20. In the instant case, if we peruse the document of allotment,  

the following facts are noticed:-

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(i)         The first clause does provide that the land is given on license  

initially for a period of 15 years, and clause 8 does lay down that the  

license may be renewed for a further period of 15 years by enhancing the  

license fee maximum by 40%, and thereafter at such a percentage as  

may be decided by the Authority.  We must, however, as well note the  

other provisions in the document of allotment and their effect.

(ii) In the instant case, the document of allotment is called a ‘license’,  

and the allottee is called a ‘licensee’.  In the very first clause, it is stated  

that the concerned parcel of land is given on license, and clause 4 refers  

to the amount payable by the licensee as the license fee which is to be  

paid annually before the first of June.

(iii) Clause 11 of the document requires the licensee to provide the  

specified games and rides in the amusement park.  Not only that but  

clause 10 further requires that the rides, games etc. should be bought  

from the suppliers manufacturing them in India indigenously.

(iv) Clause 7 authorises IDA to regulate the mode of collection of entry  

fee, and clause 5 provides that the amount equal to 25% of the entry fee  

will be charged by the IDA in addition to the license fee.  Clause 7 further  

provides that the Authority (i.e IDA) or the officer authorised by the  

Authority will have the power to examine the accounts of collection of  

entry fee, as and when deemed fit.  

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21. It must also be noted that the concerned document has to be  

read as a whole, and when we see the above clauses together, it becomes  

clear that IDA retained complete control over the concerned parcel of  

land.  The manner in which the facilities in the amusement park were to  

be enjoyed was completely controlled by the IDA.  The IDA decided as to  

what games and rides were to be provided.  It also laid down as to from  

which suppliers these games and rides were to be purchased.  IDA further  

regulated the mode of collection of entry fee, and had the right to  

examine the accounts of collection thereof as and when it deemed fit.  

Over and above, Clause 14 of the document specifically provided that in  

the event of violation of any of these terms and conditions on the part of  

the licensee, the decision of the Chairman of IDA will be final, indicating  

the right of IDA to terminate the license in the event of such a  

contingency.  Obviously when all these clauses are seen together, it  

becomes clear that there was no exclusive possession handed over to the  

appellants.  Thus, the document of allotment merely granted a permission  

to use the concerned parcel of land in a particular manner, and without  

creating any interest therein.  Hence, if we apply the tests which have  

been laid down by this court way back in the year 1959 (and followed  

subsequently) the document will have to read as granting a license, and  

not a lease.   

22. The appellants had challenged the legality of the letter/order  

dated 23.9.2003 issued by the State Government to the IDA.  That  

letter/order while declining the proposal of IDA to permit the amusement  

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club and Banquet Hall proposed by the appellant, directed the IDA to  

utilize the land in question after issuing fresh notification inviting tenders.  

It was submitted that the IDA was in fact, favourably inclined to consider  

the proposal of the appellants, and the said letter/order indicated mala  

fides on the part of the State Govt.  It was further submitted that IDA was  

a body corporate under Section 39 of the M.P. Act, and though section 73  

empowers the State Government to give directions in matters of policy,  

this power cannot be exercised to give the directions of the kind  

contained in the letter dated 23.9.2003.  In this connection it was  

contended that assuming that the letter may not be found to be vitiated  

by reason of malice on fact, but still it can be held to be invalid if the  

same had been issued for unauthorized purpose as it would amount to  

malice in law. Reliance was placed in this behalf on the proposition in  

paragraph 40 of the judgment of this Court in Punjab State Electricity  

Board Ltd. Vs. Zora singh and Ors. Reported in 2005 (6) SCC 776.  

23.  In our view, the appellants have tried to make much ado  

about the stand which the IDA took on earlier occasions in favour of the  

appellants.  One has to recognise that where different authorities are  

dealing with a particular subject, it is quite possible that on some  

occasions, they may take a stand different from each other, though  

ultimately it is the decision of the competent authority which matters, and  

it cannot be tainted with mala fides merely on that count.  The following  

observations of this Court in para 35 of Jasbir Singh Chhabra & Ors. vs.  

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State of Punjab reported in 2010 (4) SCC 192 are instructive in this  

behalf:-

“35. It must always be remembered that in a democratic  polity like ours, the functions of the Government are carried out  by different individuals at different levels. The issues and policy  matters which are required to be decided by the Government are  dealt with by several functionaries some of whom may record  notings on the files favouring a particular person or group of  persons. Someone may suggest a particular line of action, which  may not be conducive to public interest and others may suggest  adoption of a different mode in larger public interest. However,  the final decision is required to be taken by the designated  authority keeping in view the larger public interest. The notings  recorded in the files cannot be made basis for recording a finding  that the ultimate decision taken by the Government is tainted by  malafides or is influenced by extraneous considerations……”

24. The High Court has held in para 23 of the impugned judgment  

that in any case admittedly the license had come to an end by efflux of  

time in the month of the June 2010, and therefore the validity and legality  

of the letter/order dated 23.9.2003 had become academic, and it was no  

longer necessary to examine that issue.  We cannot find fault with the  

High Court on that account, since quashing of this letter cannot in any  

way lead to the renewal of the license which had already expired.  

Besides, the respondents had valid reasons not to renew the license as  

indicated in the show cause notice dated 8.1.2007.  The construction of  

Amusement Club or a Banquet Hall could certainly not be a part of a  

Children’s Amusement Park.  The parcel of land was allotted for setting up  

of a children’s park with games and rides as indicated in the document of  

license.  Additionally, what was permitted were the food and beverages  

centers, kiosks, shops, administrative building and toilets, which would be  

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in furtherance of this objective. The Banquet Hall and an amusement club  

which would be used by adults would not fit in the purpose of Children’s  

Amusement Park.  As stated in clause 8 of the show cause notice, it  

clearly indicated that the appellants did not want to run the activity  

related to the Children’s amusement park on the land allotted.   

25. (i) It was submitted on behalf of the appellants that they had  

made good investment in the concerned parcel of land with legitimate  

expectations, and, therefore, the respondents were estopped from  

discontinuing their allotment on the basis of the doctrine of promissory  

estoppel.  This submission was disputed by Shri Vikas Singh, learned  

senior counsel appearing for IDA.  He ,firstly, pointed out that more than  

half of the land remained un-utilised even 12 years after the allotment,  

and, in fact, the park was not functioning for quite sometime.  The games  

and rides which were placed on this parcel of land were in the nature of  

fixtures, and not permanent additions as such, and could be removed  

therefrom when the appellants were required to vacate.   

(ii) Having noted these submissions we are of the view that since the  

document of allotment was a license and not one creating any interest,  

the provision of renewal contained therein cannot be read as laying down  

a mandatory requirement.  Besides, as stated above, clause 14 of the  

document of license clearly stated that in the event of violation of any of  

the terms and conditions on the part of the licensee, the decision of the  

Chairman of IDA was final.  Para 7 of the show cause notice in fact stated  

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that the necessary action to establish the Children’s Amusement Park had  

not been taken since half of the land had remained undeveloped, and it  

amounted to violating the conditions of license.  The doctrine of  

promissory estoppel can certainly not be permitted to be invoked on such  

a background.

26.(i) The appellants had made one more prayer namely to quash  

and set aside the notification dated 19.11.2003.  Section 23-A of the M.P.  

Act permits the modification of the provisions in the development plan by  

following the due procedure of law as laid down therein.  In the instant  

case, a notification had been issued earlier on 9.3.2001 inviting the  

objections to the proposed modification.  The appellants were heard with  

respect to these objections, and thereafter the notification dated  

19.11.2003 had been issued approving the proposed modification.  It was  

contended on behalf of the appellants that the modification was a  

motivated one.  The appellants submitted that under the modification, a  

parcel of land in nearby vicinity which was earlier reserved for a green  

area, was now being permitted for a commercial use, whereas the user of  

the land which was marked for the Children’s Amusement Park, was being  

changed to a regional park.  This was with a view to accommodate the  

constructions which had come up on the other parcel of land in the  

vicinity.   

(ii) In this connection we must note that the appellants had not joined  

any of those parties for whose benefit this change had been allegedly  

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made.  As held in Girias Investment (P) Ltd. vs. State of Karnataka  

& Ors. reported in 2008 (7) SCC 53, in the absence of factual basis, the  

court is precluded from going into the plea of malafides.  As far as the  

land meant for the Children’s amusement park is concerned, the same  

was hardly put to the full use.  In as much as this entire parcel of land of  

about 7 acres was not utilized, and since it was an open parcel of land,  

there was nothing wrong in the State Government deciding to retain it as  

an open parcel of land, and to change the land-use thereof from  

commercial to a regional park.  The notification cannot be faulted on that  

count either.

27. In the circumstances, we do not find any error in the  

impugned judgment of the High Court. The appeal is therefore dismissed.  

Parties will bear their own costs.

     ………….. ……………………..J.           ( Surinder Singh Nijjar )

                ……………………… …………..J.  

        ( H.L. Gokhale  )

New Delhi  Dated: 28th August, 2012

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