Reportable

IN THE SUPREME COURT OF  INDIA CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. 150 OF 1997

NOIDA Entrepreneurs Association             …..Petitioner   Versus

NOIDA & Ors.             …..Respondents  

J U D G M E N T    

Dr. B.S. CHAUHAN,  J.

1. The  Legislature  of  Uttar  Pradesh  enacted  the  U.P.  

Industrial  Area  Development  Act,  1976,  (hereinafter  referred  to  as  

‘Act 1976’) for the purpose of proper planning and development of  

industrial and residential units and to acquire and develop the land for  

the  same.   The  New  Okhla  Industrial  Development  Authority  

(hereinafter referred to as  the ‘Authority’), has been constituted under  

the said Act, 1976. The object of the Act had been that genuine and  

deserving  entrepreneurs  may  be  provided  industrial  and  residential  

plots and other necessary amenities and facilities.  Thus, in order to  

carry out the aforesaid object, a new township came into existence.  

All  the  activities  in  the  Authority   had  to  be  regulated  in  strict  

adherence to all the statutory provisions contained in relevant Acts,

Rules and Regulations framed for this purpose.  However, from the  

very inception of the township, there has always been a public hue  

and  cry  that  officials  responsible  for  managing  the  Authority  are  

guilty of manipulation,  nepotism and corruption.   Wild and serious  

allegations of a very high magnitude had been leveled against some of  

the officials carrying out the responsibilities of implementing the Act  

and other statutory provisions.

2. The instant writ petition was originally filed seeking a large  

number of reliefs including the allotment of industrial and residential  

plots  to  the  members  of  the  petitioner-Association  and  a  large  

number  of  officials  who  had  acted  as  Chief  Executive  Officers  

(hereinafter  referred  to  as  ‘CEO’)  of  the  Authority  had  been  

impleaded therein as respondents.  However, considering the fact that  

relief  for  personal  benefits  of  the  members  had  been  sought  and  

alternative  means  for  seeking  the  redressal  of   grievances  in  that  

respect were available, the petitioner made a request to the Court that  

its  petition  may be  treated  as  a  public  interest  litigation  (in  short  

‘PIL’) for a limited purpose.  This Court vide order dated 21.4.1997  

treated the matter as PIL and issued show cause notice only to the  

extent of the following reliefs:

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“(1)  Issue  writ  of  mandamus  and/or  any  appropriate writ and direct the CBI to investigate  into all the land allotments and conversion of lands  made by the NOIDA  during the past 10 years.

(2)   Issue an appropriate writ and directions and  frame  guidelines  for  allotment  of  lands  by  the  NOIDA.”

3. Dr.  Rajeev  Dhavan,  learned  senior  counsel  who  had  been  

appearing for the petitioner in the matter was requested by this Court  

vide order dated 29.8.1997 to act as Amicus Curiae.           

        The matter was heard several times by this Court and after  

scrutinising of a very large number of documents, the Court was of  

the  opinion  that  the  allegations  made  in  the  petition  required  

investigation.  Thus, vide order dated 15.12.1997, this Court issued  

notice to the State of U.P. to indicate its consent to an investigation  

being  made  by  the  Central  Bureau  of  Investigation  (hereinafter  

referred  to  as  CBI),  in  view  of  the  very  serious  nature  of  the  

allegations.  The State  of  U.P.  had also received similar complaints  

and thus, it  constituted a Commission of Inquiry headed by Justice  

Murtaza Hussain, a former Judge of Allahabad High Court to enquire  

about the same.  The Commission completed its task and submitted its  

report. The said report was also placed before this Court in the first  

week of January 1998. As the report indicated, prima facie view of the  

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Commission,  that  Mrs.  Neera  Yadav,  IAS,  respondent  no.7  had  

committed serious irregularities and illegalities, a copy of the report of  

the Commission was also directed to be given to her  and this Court  

vide order dated 6.1.1998 asked the State of U.P. as to whether this  

report had been accepted by the State Government and, if so, what  

was  the  likely  follow  up  measure  pursuant  thereto.   The  State  

Government  submitted  a  reply  in  response  to  the  said  show cause  

pointing  out  that  the  State  Government  proposed  to  initiate  

disciplinary proceedings against her.  

4. In  view  of  the  material  on  record,  this  Court  expressed  

tentative opinion that it would  be more appropriate that the matter is  

investigated  by  the  CBI  and  if  such  investigation  discloses  the  

commission  of  criminal  offence(s),  the  persons  found  responsible  

should be prosecuted in a criminal court.  However, considering the  

fact that allegations of a very high magnitude and gravity had been  

made against a large number of officials, this Court wanted the CBI to  

investigate first the cases against Mrs. Neera Yadav, IAS, respondent  

no.7, as is evident from the proceedings dated 20.1.1998, which reads  

as under:  

“For the time being, we are directing the CBI to  conduct  an  investigation  in  respect  of  the  

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irregularities  in  the  matter  of  allotments  and  conversions of the plots………..

Shri G.L. Sanghi, the learned senior counsel  appearing  for  respondent  no.7  states  that  though  the respondent no.7 does not admit that  she has  committed  any  irregularity  in  the  matter  of  allotment  or  conversion  of  plots  in  NOIDA  but  according  to  respondent  no.7  there  are  other  persons  who  might  have  committed  such  irregularity  and  she  seeks  leave  to  file  an  affidavit  in  this  regard.   She  may  file  an  affidavit  giving  particulars  of  such  irregular  allotments and in the event of such affidavit being  filed  further  directions  in  that  regard  will  be  given.”          (Emphasis added)

This  Court  by  the  same  order  also  issued  certain  directions  with  

regard to irregular allotments and conversion of plots which had been  

found to have been made in the report  of  Justice Murtaza Hussain  

Commission.   

5. In view of the above referred to order, Mrs. Neera Yadav, IAS,  

respondent  no.7  filed  her  affidavit  with  regard  to  irregularities  

committed  by other  officers,  namely,  Shri  P.K. Mishra,  respondent  

no.5;  Shri  Bijendra  Sahay,  respondent  no.8;  Shri  Ravi  Mathur,  

respondent no.4; and one Shri S.C. Tripathi.  The affidavit filed by  

Mrs. Neera Yadav, IAS, respondent no.7 was considered by this Court  

on  24.2.1998  and  took  note  of  the  fact  that  in  respect  of  the  

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same/similar  allegations  made  against  Shri  Bijendra  Sahay,  

respondent  no.8,  the  State  Government   had  already  accepted  his  

explanation.  So far as the allegations made against Shri Ravi Mathur,  

IAS,  and Shri P.K. Mishra, respondent nos. 4 and 5 respectively and  

one Shri S.C. Tripathi are concerned, the State Government vide order  

dated 18.7.1997 had referred the same to the Chairman of  the Board  

of Revenue for inquiry and the same was pending.   

6. In  the  meanwhile,  Shri  Mahinder  Singh  Yadav,  husband  of  

Mrs. Neera Yadav, IAS, respondent no.7 and one Shri Bali Ram, Ex.  

Member  of  Parliament  also  filed  complaints  against  the  aforesaid  

officials  in  1996-1997,  which  were  also  referred  to  the  Chairman,  

Board of Revenue for inquiry.   

7. One Shri  Naresh Pratap Singh also filed a  complaint  against  

some officers including Shri Ravi Mathur, IAS, respondent no.4 on  

27.6.1997 before the Lok-Ayukta of U.P.  However, the Lok-Ayukta  

vide  letter  dated  21.4.1998 to  the  State  Government  expressed  his  

inability  to  conduct  an  enquiry  against  Shri  Ravi  Mathur,  IAS,  

respondent no.4 and suggested that the matter be referred to the CBI.   

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8. This  Court  vide  order  dated  11.1.2005  constituted  a  

Commission  headed  by   Justice  K.T.  Thomas  to  examine  a  large  

number of issues, including as to why disciplinary proceedings had  

been dropped  by the State of U.P. against several officials who had  

been  impleaded  as  respondents  in  this  case.  The  Commission  

submitted  the  report  dated  24.12.2005,   and  after  considering  the  

same, this Court  vide order dated 8.12.2008 closed the proceedings  

against Shri Bijendra Sahay, respondent no.8.  One Shri S.C. Tripathi  

also stood exonerated in earlier proceedings.

In  view  of  the  order  passed  by  this  Court,  the  CBI  

conducted  the  enquiry  against  Mrs.  Neera  Yadav,  IAS,  respondent  

no.7 and filed a charge sheet against her.  She was put on trial and  

proceeded with in accordance with law.  

9. Thus, in view of the aforesaid factual matrix, this Court has to  

examine  as  to  whether  any  action  is  warranted  against  Shri  Ravi  

Mathur, IAS, respondent no.4 and if so, whether it is permissible to  

initiate the disciplinary proceedings against him as he reached the age  

of  superannuation  and  has  retired  and  the  alleged  misconduct  had  

been committed by him in 1993-94, and as to whether the misconduct  

is of such a grave nature that it warrants the criminal prosecution and  

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if  so,  what should be the agency which may be entrusted with the  

investigation and prosecution.

10. Shri  K.T.S.  Tulsi,  learned  senior  counsel  appearing  for  

respondent no.7 submitted that on similar allegations, this Court had  

directed CBI to  initiate  criminal  proceedings  against  his  client  and  

criminal  prosecution  has  been  launched  and  ended  in  logical  

conclusion,  thus,  there  could  be  no  justification  not  to  initiate  the  

similar proceedings against Shri Ravi Mathur, IAS, respondent no.4.  

Not initiating the proceedings on the similar or more grave charges  

would  amount  to  treating  the  said  respondent  no.7  with  hostile  

discrimination.  The  disciplinary  proceedings  cannot  be  initiated  

against  him  in  view  of  delay  and  latches  as  the  statutory  rules  

applicable do not permit such a course at such a belated stage.  The  

criminal  prosecution  can  easily  be  launched.  The  matter  requires  

investigation as to whether the said respondent no.4 had committed an  

offence under the provisions of Prevention of Corruption Act, 1988  

(hereinafter called the Act 1988).

11. Dr.  Rajeev  Dhavan,  learned  senior  counsel/Amicus  Curiae  

would submit  that  the  gravity  of  allegations  made against  the  said  

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respondent no.4 is of such a high magnitude that it warrants the same  

treatment as given to Mrs. Neera Yadav, IAS, respondent no.7.  Dr.  

Dhavan has taken us through all the proceedings including the reports  

of the Chairman, Board of Revenue and K.T. Thomas Commission  

and submitted that it is a fit case directing the CBI to conduct enquiry  

against the respondent no.4. However, Dr. Rajeev Dhavan has raised  

serious objection in respect of intervention of the respondent no. 7 and  

opportunity of hearing accorded to Shri K.T.S. Tulsi, learned senior  

counsel on her behalf  that in a case of this nature the respondent no.7  

had no locus standi and right to raise any grievance whatsoever.

12. Shri  Rakesh  Dwivedi,  learned  senior  counsel  appearing  for  

respondent no.4, has vehemently opposed the initiation of disciplinary  

proceedings or criminal prosecution on the ground that the  Authority  

did not suffer any financial loss. There is nothing on record to show  

that the said respondent indulged in corruption, thus, the provisions of  

the Act 1988 were attracted.  The said respondent had acted in good  

faith.   The disciplinary  proceedings cannot be initiated,  being time  

barred.  All the allegations had been made against the said respondent  

no.4 at the behest of respondent no.7, thus, suffers from mala fide and  

bias.  The said respondent had paid the transfer charges only once to  

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the  tune  of  Rs.1.80  lacs.  The  second conversion  had  subsequently  

been cancelled by the respondent no.7 herself. Due to  pendency of  

this case, the said respondent could not get the physical possession of  

any of the plots.  The change of user of the land in Sector 32 was  

made in good faith.  More so, such a change was cancelled and the  

green area was restored by the respondent no.7 herself.  The contract  

given by the respondent no.4 to certain contractors had been at the  

rate on which they had been working earlier.  Thus, the Authority did  

not suffer any loss whatsoever.

13. Before we proceed with the case on merits, we would like to  

make it clear that Mrs. Neera Yadav, IAS, respondent no.7, had been  

given an opportunity by this Court vide order dated 20.1.1998  to file  

her affidavit disclosing the delinquency committed by other officers.  

In pursuance of the said order, she submitted her affidavit.  Therefore,  

it is not possible for us at such a belated stage to deny her the right of  

hearing and ignore the submissions made by her counsel, Shri K.T.S.  

Tulsi. (vide: V.S. Achuthanandan v. R. Balakrishna Pillai & Ors.,  

(2011) 3 SCC 317).      

14. We  have  considered  the  rival  submissions  made  by  learned  

counsel for the parties and perused the record.

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15. The services of Shri Ravi Mathur, IAS, respondent no.4  

stood   governed  by  All  India  Services  (Death-cum-Retirement  

Benefits) Rules, 1958.  Rule 6(b), thereof, provides that in case the  

delinquent had already retired, the proceedings shall not be instituted  

against him without the sanction of the Central Government and shall  

be in respect of an event which took place  not more than four years  

before the institution of such proceedings.  Thus, it is evident that law  

does not  permit  holding disciplinary proceedings  against  Shri  Ravi  

Mathur,  IAS,  respondent  no.4  at  this  belated  stage  and  this  view  

stands fortified by the judgments of this Court in B.J. Shelat v. State  

of Gujarat & Ors., AIR 1978 SC 1109; State Bank of India v. A.N.  

Gupta & Ors., (1997) 8 SCC 60;  State of U.P. & Ors. v. Harihar  

Bholenath, (2006) 13 SCC 460; UCO Bank & Anr. v. Rajinder Lal  

Capoor, AIR 2007 SC 2129; Ramesh Chandra Sharma v. Punjab  

National Bank & Anr., (2007) 9 SCC 15; and UCO Bank & Anr. v.  

Rajinder Lal Capoor, AIR 2008 SC 1831.           

16 So far as the initiation of criminal proceedings is concerned it is  

governed  by  the  provisions  of  Code  of  Criminal  Procedure,  1973  

(hereinafter  referred  to  as  Cr.P.C.).  Section  468  thereof  puts  an  

embargo on the court to take cognizance of an offence after expiry of  

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limitation  provided  therein.   However,  there  is  no  limitation  

prescribed  for  an  offence  punishable  with  more  than  3  years  

imprisonment.   Section  469  declares  as  to  when  the  period  of  

limitation  would  start.   Sections  470-471  provide  for  exclusion  of  

period of limitation in certain cases.  Section 473 enables the court to  

condone the delay provided the court is satisfied with the explanation  

furnished by the prosecution or where the interest of justice demands  

extension of  the period of limitation.   

         This Court in  Japani Sahoo v. Chandra Sekhar Mohanty,  

AIR 2007 SC 2762, dealt with the issue and observed as under:

“14. The general rule of criminal justice is that a  crime never dies. The principle is reflected in the  well-known  maxim  nullum  tempus  aut  locus  occurrit regi (lapse of time is no bar to Crown in  proceeding against offenders)……. It is settled law  that a criminal  offence is  considered as a wrong  against the State and the Society even though it has  been committed  against  an individual.  Normally,  in serious offences, prosecution is launched by the  State and a Court of Law has no power to throw  away prosecution solely on the  ground of  delay.  Mere delay in approaching a Court of Law would  not  by  itself  afford  a  ground  for  dismissing  the  case though it may be a relevant circumstance in  reaching a final verdict.”

17. The aforesaid judgment was followed by this Court in  Sajjan  

Kumar v. Central Bureau of Investigation, (2010) 9 SCC 368.

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18. Thus, it is evident that question of delay in launching criminal  

prosecution may be a circumstance to be taken into consideration in  

arriving  at  a  final  decision,  but  it  cannot  itself  be  a  ground  for  

dismissing the complaint.  More so, the issue of limitation has to be  

examined in the light of the gravity of the charge.  

19. Thus, we have to examine as to whether the said respondent  

could  be  tried  for  commission  of  an  offence,  if  any,  under  the  

provisions of the Act, 1988.

Section 13 thereof, reads:

“Criminal misconduct by a public servant.- (1)  A public servant is said to commit the offence of  criminal misconduct,-

(b) ………

(c) if  he  dishonestly  or  fraudulently  misappropriates  or  otherwise  converts  for  his own use any property entrusted to him  or under his control as a public servant or  allows any other person to do so; or

(d) if he, -

(i) by  corrupt  or  illegal  means,  obtains  for  himself or for any other person any valuable  thing or pecuniary advantage; or

(ii) by  abusing  his  position  as  a  public  servant,  obtains  for  himself  or  for  any  

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other  person  any  valuable  thing  or  pecuniary advantage; or

(iii) while  holding  office  as  a  public  servant,  obtains for any person any valuable thing  or  pecuniary  advantage  without  any  public interest.”         (Emphasis added)   

20. Shri  Ravi  Mathur,  IAS,  respondent  no.4  had been the  CEO,  

NOIDA from July 1993 to 9.1.1994 and the CEO, Greater NOIDA  

from  10.1.1994  to  26.1.1995.   Altogether,  there  had  been  14  

allegations against him which the Chairman, Board of Revenue had  

examined. The findings recorded by the Chairman, Board of Revenue  

were also placed before Justice K.T. Thomas Commission.  However,  

at the time of arguments, Dr. Rajeev Dhavan, learned Amicus Curiae  

has  submitted  that  there  are  three  major  allegations  in  respect  of  

which this  Court  must  direct  the CBI enquiry.   He has drawn our  

attention to the findings recorded by the Chairman, Board of Revenue  

on allegation nos. (iv), (ix) and (xiii) which are as under :

Allegation No. (iv) :  

Shri Ravi Mathur allotted contracts worth Rs.10 crores  to  different  contractors  on  selection  basis  without  inviting  tenders.  

Findings:  

(i) The award of the contract to M/s. Anil Kumar & Co.,  was  approved  by  the  CEO.   The  argument  that  the  usual  

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process  was  not  followed  on  account  of  urgency  is  not  acceptable. (para 1.4.3.2)

(ii) The award of the contract to M/s. Techno Construction  Co. was a pre-detemined decision. No satisfactory explanation  why this company only was selected. (para 1.4.3.3.)

(iii) The notes in the file for the award of the contract to M/s.  Anil Kumar & Co. in Sector Gamma were tailor made and the  urgency projected cannot be accepted. (para 1.4.3.4)

(iv) There was no urgency warranting the award of contract  to Mr. J.K. Jain, which was approved by the CEO also. (para  1.4.3.5)

(v) The proposal to award work to M/s. Fair Deal Engineers  was faulty and the urgency clause was not well defined.  The  note was approved by the CEO. (para 1.4.3.6)

(vi) The argument of urgency advanced is not acceptable in  some cases (para 1.4.4).  At least in one case there was not  even a necessity to award the work. (para 1.4.4)

(vii) No  cogent  regions  were  given  in  the  note  file  for  selecting a particular contractor. Some of the notes appear to  be  tailor  made.  The  works  were  got  done  by  the  Manager/Senior  Manager  through  hand  picked  contractors  without  inviting  tenders  and  without  following  financial  norms. (para 1.4.4.)

Allegation No. (ix):

Shri  Ravi Mathur caused financial  loss to NOIDA by  not paying conversion charges with respect to the plot allotted  to him.  He initially asked for conversion from Sector 35 to  Sector 27 but since he did not deposit the required amount the  offer of conversion was withdrawn.  Subsequently he applied  for conversion from Sector 35 to Sector 44.     Findings:

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The only conversion which took place was from Sector  35 to Sector 44 for which conversion charges were deposited.  It is a matter under the exclusive competence  of the Authority  and its Chief Executive as to whether it was to be treated as  two conversions or one conversion only.  It appears that it was  a subtle and fine way to help a fellow officer.  In any event  Smt.  Neera  Yadav  had approved  the  second  application  on  26.10.1994.  The file regarding the allotment and conversion  of plot of Shri Ravi Mathur is not traceable in NOIDA but that  is for the Authority to take appropriate action. (para 1.9.5)

Allegation No. (xiii):

A 13 hectare City Park situated near Sectors 24, 33 and  35 in NOIDA was destroyed and a new residential Sector 32 in  violation of the Master Plan was carved out comprising of 200  plots.  

Findings:  

(i) The  procedure  as  prescribed  in  the  1991  Regulations  was not followed while making the change of land use. (para  1.13.7)

(ii) The decision of land use change was based on logic but  the proposal should have been put up before the Board.  The  then  Chief  Architect  Planner  did  not  point  out  this  legal  requirement  and  failed  in  his  primary  duty  in  advising  the  ACEO and CCEO. (para 1.13.7)

(iii) There was no urgency for the development work in this  sector.   The  development  work  was  started  and  awarded  without following the tender procedure in flagrant violation of  established  procedure  for  which  the  then  Chief  Project  Engineer and the then General Manager (F) are responsible.  (para 1.13.7)

(iv) The Board has taken its duties casually and there was no  serious effort to check, analyse and advise. (para 1.13.7)    

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21. So far as these allegations are concerned, it is evident from the  

record  that M/s Anil Kumar & Co.  had been allotted originally the  

work on the basis of tender for Rs. 2.75 crores in Sector ‘Gamma’ in  

Greater NOIDA, in connection with the construction of water drains.  

However,  they  had  been  awarded  additional  work  by  Shri  Ravi  

Mathur, IAS, respondent no. 4, worth Rs.3.75 crores on a “deviation  

basis”. In fact, awarding such work cannot be termed as an ‘addition’  

or ‘additional work’ because the work is worth Rs.1 crore more than  

the amount of original contract. In such a fact-situation, even if there  

had been no financial loss to the Greater NOIDA, indisputably, the  

additional work for such a huge amount had been awarded without  

following the procedure prescribed in law. More so, there is nothing  

on record to show as to whether the said contractor M/s Anil Kumar  

& Co. was eligible to carry out  the contract worth Rs.6.50 crores.  

Awarding the contract under the garb of so-called extension, amounts  

to doing something  indirectly  which may not  be permissible  to  do  

directly. Admittedly, such a course of action is not permissible in law.  

22. It is a settled proposition of law that whatever is prohibited by  

law  to  be  done,  cannot  legally  be  affected  by  an  indirect  and  

circuitous contrivance on the principle of “quando aliquid prohibetur,   

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prohibetur  at  omne  per  quod  devenitur  ad  illud”,  which  means”  

“whenever a thing is prohibited, it is prohibited whether done directly  

or indirectly”. (See: Swantraj & Ors. v. State of Maharashtra, AIR  

1974  SC 517;  Commissioner  of  Central  Excise,  Pondicherry  v.  

ACER India Ltd., (2004) 8 SCC 173; and Sant Lal Gupta & Ors. v.  

Modern  Co-operative  Group  Housing  Society  Ltd.  &  Ors.,  JT  

(2010) 11 SC 273).   

23. In  Jagir Singh v. Ranbir Singh & Anr., AIR 1979 SC 381,  

this Court has observed that an authority cannot be permitted to evade  

a  law by “shift  or  contrivance.”  While  deciding the  said  case,  the  

Court placed reliance on the judgment in Fox v.  Bishop of Chester,  

(1824) 2 B &C 635, wherein it has been observed as under:–

   “To carry out effectually the object of a statute, it   must be construed as to defeat all attempts to do, or  avoid doing in an indirect or circuitous manner that   which it has prohibited or enjoined.”

24. The second work had been allotted to M/s Techno Construction  

Co.  worth  Rs.1.00 crore without  inviting fresh tenders  etc.,  on the  

ground  that  earlier  a  contract  for  execution  of  similar  work  i.e.  

construction of road had been awarded to it. In view of the fact that  

there was no urgency, such a contract should not have been awarded.  

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Undoubtedly,  the respondent no.4  is guilty of proceeding in haste  

and that amounts to arbitrariness.   

25. While dealing with the issue of haste, this Court in  the case of  

Bahadursinh  Lakhubhai  Gohil  v.  Jagdishbhai  M.  Kamalia  &  

Ors., (2004) 2 SCC 65, referred to the case of  Dr. S.P. Kapoor v.  

State of Himachal Pradesh & Ors.,  AIR 1981 SC 2181 and held  

that:

  “…..when a thing is done in a post-haste manner,   mala fide would be presumed.”

26. In Zenit Mataplast Private Limited v. State of Maharashtra  

& Ors., (2009) 10 SCC 388, this Court  held :

  “Anything done in undue haste can also be termed   as arbitrary and cannot be condoned in law”.  

27. Thus, in case an authority proceeds in undue haste, the Court  

may draw an adverse inference from such conduct.  It further creates  

a doubt that if there was no sufficient reason of urgency, what was the  

occasion for the respondent no.4 to proceed in such haste and why  

fresh tenders  had not been invited.  

28. It  is  evident  from  the  record  that  the  respondent  no.4  had  

originally  been  allotted  plot  no.118,  Sector-35  measuring  360  sq.  

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meters  which  was  converted  to  plot  no.G-25,  Sector-27  measuring  

392 sq. meters.  However, as the respondent no.4 did not deposit the  

required charges the said order of conversion stood withdrawn.   By  

subsequent conversion, respondent no.4 got plot no.A-15 in Sector-44.  

Thus, two conversions had been made on  different dates.  However,  

he paid the transfer charges only once to the tune of Rs.1.80 lacs.  It is  

alleged that by first conversion, the respondent no.4 not only got the  

plot  in  a  better  location,  but  also  a  plot  of  bigger  size.  Second  

allotment was further, as alleged, in a far better geographical position.  

29. There is no provision under the Act 1976 or Regulation 1991  

for  conversion.   It  is  rather  governed  by  Office  Order  No.4070/  

NOIDA/DCEO/92 dated 3.7.1992.  The relevant part thereof basically  

provides that conversion was permissible only in case of residential  

plots.  Relevant part thereof reads as under:

“3. In case of residential plots, only cancelled and  surrendered  properties  shall  be  offered  for  conversion………

The details of availability of properties shall  be available in the office of Dy. Chief Executive  Officer.

xx xx xx

xx xx xx

6.  All expenses pertaining to conversion such as  conversion  charges,  locational  benefit  charges,  

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stamp duty, registration charges etc. shall be borne  by the allottee.

xx xx xx

8.  Conversion shall not be allowed more than once  to any allottee.

xx xx xx

11.  Chairman-cum-Chief  Executive Officer  may  relax  the  above  guidelines  in  exceptional  circumstances.”   

30. The aforesaid Office Order dated 3.7.1992 stood modified vide  

order  dated  27.9.1993  (when  the  respondent  no.4  was  the  CEO,  

NOIDA)  to  the  effect  that  a  large  number  of  vacant  plots  were  

available in old developed sectors.  The same may be included in the  

plots availability list.

31. That the list of available plots had been expanded during the  

period when the respondent no.4 was CEO, NOIDA  and unallotted  

plots of various sectors including Sector 27 were also included in that  

list in which the respondent no.4 himself got the first conversion.  It is  

a matter of investigation as to whether the Order dated 3.7.1992 was  

modified vide Order dated 27.9.1993 with ulterior purpose.

 32. Section 12 of the Act  1976 makes the provisions of Chapter  

VII and Sections 30, 32, 40 to 47, 49, 50, 51, 53 and 58  of the U.P.  

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Urban Planning and Development Act 1973  (hereinafter referred to as  

the ‘Act 1973’) mutatis mutandis   applicable to the Act 1976. Section  

17 of the Act 1976 declares that the Act 1976 would have an over-

riding effect over the provisions of  the Act 1973. Section 18 confers  

the  power  on  the  State  Government  to  make  rules  by  issuing  a  

Notification for carrying out the purposes of the Act 1976. Section 19  

of the Act 1976 provides for the framing of regulations by the NOIDA  

in respect of holding of meetings; defining the powers and duties of  

the CEO; and management of properties of the Authority etc.  In view  

thereof, the New Okhla Industrial Development Area (Preparation and  

Finalisation  of  Plan)  Regulations  1991  (hereinafter  called  as  

‘Regulations 1991’)  had been framed with the prior approval of the  

State Government as required under Section 19 of the Act 1976 and,  

therefore,  have statutory  force.  By virtue  of  the provisions of  sub-

section 2(b) of Section 6 of the Act 1976, it is a statutory requirement  

that in the plan to be prepared by the NOIDA,  it  must necessarily  

provide as to for what particular purpose any area/site is to be used,  

namely,  industrial,  commercial  or  residential.  The  Authority  is  

competent  under  sub-section  2(c)  of  Section  6,  to  regulate  the  

construction etc.  having regard to the nature for which the site has  

been earmarked. Section 8 of  the Act 1976 restrains  the use of any  

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site for the purpose other than for which it is earmarked in the Master  

Plan.  Section  9  prohibits  the  use  of  any  area  or  erection  of  any  

building in contravention of Regulations 1991. Section 14 of the Act  

1976 clearly provides for cancellation of allotment and resumption/re-

entry, where the allotment had been made in contravention of the rules  

and regulations.   In case the Authority wants to change the user of the  

land, condition precedent remains to amend the Master Plan.  

33. There is nothing on record to show that any amendment had  

ever been made either in the Master Plan or in the Regulations 1991  

before  the  change  of  user  of  land,  when  a  13  hectare  City  Park  

situated  near  Sectors  24,  33  and  35  was  abolished  and  a  new  

residential Sector 32 was carved out comprising 200 plots. Even if the  

said change made by Shri Ravi Mathur, IAS, respondent no.4  stood  

nullified, subsequently by Smt. Neera Yadav, respondent no.7,  it does  

not exonerate him from committing an illegality.   It  is  a  matter  of  

investigation as to what was the motive for which such a change had  

been made by Shri Ravi Mathur, IAS, respondent no.4, unauthorisedly  

and  illegally.  Admittedly  he  was  not  competent  to  do  so  without  

seeking the amendments as mentioned hereinabove.     

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34. The State or the public authority which holds the property for  

the public or which has been assigned the duty of grant of largesse  

etc., acts as a trustee and, therefore, has to act fairly and reasonably.  

Every holder of a public office by virtue of which he acts on behalf of  

the State  or  public  body is  ultimately  accountable to the people  in  

whom the sovereignty vests. As such, all powers so vested in him are  

meant  to  be  exercised  for  public  good  and  promoting  the  public  

interest.  Every holder of a public  office is a trustee.   State  actions  

required to be non-arbitrary and justified on the touchstone of Article  

14 of the Constitution. Action of the State or its instrumentality must  

be in conformity with some principle which meets the test of reason  

and  relevance. Functioning  of  a  “democratic  form of  Government  

demands  equality  and absence of  arbitrariness  and discrimination”.  

The rule of law prohibits arbitrary action and commands the authority  

concerned to act in accordance with law. Every action of the State or  

its  instrumentalities  should neither  be suggestive  of  discrimination,  

nor  even  apparently  give  an  impression  of  bias,  favouritism  and  

nepotism. If a decision is taken without any principle or without any  

rule,  it  is  unpredictable  and  such  a  decision  is  antithesis  to  the  

decision taken in accordance with the rule of law. The Public Trust  

Doctrine is a part of the law of the land. The doctrine has grown from  

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Article 21 of the Constitution. In essence, the action/order of the State  

or State instrumentality would stand vitiated if it lacks bona fides, as it  

would only be a case of colourable exercise of power. The Rule of  

Law is the foundation of a democratic society.  (Vide: M/s. Erusian  

Equipment & Chemicals Ltd. v.  State of West Bengal & Anr.,  

AIR 1975 SC 266;  Ramana Dayaram Shetty v. The International  

Airport Authority of India & Ors., AIR 1979 SC 1628; Haji T.M.  

Hassan Rawther v. Kerala Financial Corporation,  AIR 1988 SC  

157; Kumari Shrilekha Vidyarthi etc. etc. v. State of U.P. & Ors.,  

AIR 1991 SC 537; and M.I. Builders Pvt. Ltd. v.  Radhey Shyam  

Sahu & Ors., AIR 1999 SC 2468).

35. Power  vested  by  the  State  in  a  Public  Authority  should  be  

viewed as a trust coupled with duty to be exercised in larger public  

and social interest. Power is to be exercised strictly adhering to the  

statutory provisions and fact-situation of a case. “Public Authorities  

cannot  play  fast  and  loose  with  the  powers  vested  in  them”.  A  

decision  taken  in  arbitrary  manner  contradicts  the  principle  of  

legitimate  expectation.  An Authority  is  under  a  legal  obligation  to  

exercise  the  power  reasonably  and  in  good  faith  to  effectuate  the  

purpose for which power stood conferred. In this context, “in good  

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faith” means “for legitimate reasons”. It must be exercised  bona fide  

for the purpose and for none other. (Vide:  Commissioner of Police,  

Bombay  v.  Gordhandas  Bhanji,  AIR  1952  SC  16; Sirsi  

Municipality v. Ceceila Kom Francis Tellis, AIR 1973 SC 855; The  

State of Punjab & Anr. v. Gurdial Singh & Ors.,  AIR 1980 SC  

319; The Collector (Distt. Magistrate) Allahabad & Anr. v. Raja  

Ram Jaiswal, AIR 1985 SC 1622; Delhi Administration (Now NCT  

of Delhi)  v. Manohar Lal,  (2002) 7 SCC 222; and  N.D. Jayal &  

Anr. v. Union of India & Ors., AIR 2004 SC 867).   

36. In view of the above,  we are of  the  considered opinion that  

these allegations being of a very serious nature and as alleged, the  

respondent no.4 had passed orders in colourable exercise  of  power  

favouring himself and certain contractors, require investigation. Thus,  

in view of the above, we direct the CBI to have preliminary enquiry  

and  in  case  the  allegations  are  found  having  some  substance  

warranting further proceeding with criminal prosecution, may proceed  

in accordance with law.    

It may be pertinent to mention that any observation made  

herein against respondent no.4 would be treated necessary to decide  

the present controversy. The CBI shall investigate the matter without  

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being influenced by any observation made  in this judgment.   

The writ petition stands disposed of accordingly.  

Before parting with the case, we would like to express  

our gratitude and record appreciation to Dr. Rajeev Dhavan, learned  

senior counsel for rendering commendable assistance to the Court as  

Amicus Curiae.

           …………………………J. (G.S. SINGHVI)

………………………..J. (Dr. B.S. CHAUHAN)

New Delhi, May 9,  2011

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. 529 OF 1998

Naresh Pratap Singh ..Petitioner  

Versus

   State of U.P.   ..Respondent

                                            J U D G M E N T

Dr. B.S. CHAUHAN, J.

In view of our judgment delivered today in Writ Petition  

(C)  No.  150  of  1997  (NOIDA  Entrepreneurs  Association  v.  

NOIDA & Ors.), no separate order is required in this writ petition  

which is accordingly disposed of.   

……………………..J. (G.S. SINGHVI)

…………………….J.                                                            (Dr. B.S. CHAUHAN)

New Delhi, May 9, 2011

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