2010 (3) TMI 1076 - SC - Indian Laws

Whether the appellants in these appeals except the appeal arising out of SLP(C) No. 14133/2006 are entitled to allotment of residential plots in Phases VIII-A and VIII-B Mohali Punjab developed by the Punjab Small Industries and Export Corporation Ltd. ? Whether the State Government s refusal to sanction change of land use from industrial to residential is vitiated by arbitrariness and malafides are the questions which arise for determination in these appeals filed against orders dated 23.9.2005 and 28.7.2006 passed by the Division Bench of the Punjab and Haryana High Court? Whether no promise much less an enforceable promise was made by the Corporation to the prospective applicants that by making an application pursuant to the advertisement and on being declared successful in the draw of lots they will get residential plots?

Issues Involved:
1. Entitlement to allotment of residential plots in Phases VIII-A and VIII-B, Mohali.
2. Validity of the State Government's refusal to sanction change of land use from industrial to residential.
3. Application of the doctrines of promissory estoppel and legitimate expectation.
4. Power of the State Government to issue directives to the Corporation under Article 90 of the Memorandum of Association.
5. Scope of judicial review of the policy decision of the State Government.

Issue-wise Detailed Analysis:

1. Entitlement to Allotment of Residential Plots:
The appellants argued that they were entitled to allotment of residential plots in Mohali based on the Corporation's advertisement and subsequent draw of lots. The Supreme Court held that no enforceable promise was made by the Corporation to the applicants. The application form clearly stated that acceptance of the application and earnest money did not obligate the Corporation to allot plots. The decision of the Plan Approval Committee to approve the layouts of residential pockets was subject to approval of change of land use, which was not obtained. Therefore, the appellants were not entitled to allotment of residential plots.

2. Validity of the State Government's Refusal to Sanction Change of Land Use:
The State Government's refusal to sanction the change of land use from industrial to residential was challenged as arbitrary and mala fide. The Supreme Court found that the refusal was consistent with the policy of industrialization and public interest. The land was acquired for industrial purposes, and the proposal to earmark 20-30% for Industrial Housing did not imply a change of land use. The decision to refuse change of land use was within the State Government's power under the Punjab Regional and Town Planning and Development Act, 1995.

3. Application of the Doctrines of Promissory Estoppel and Legitimate Expectation:
The appellants invoked the doctrines of promissory estoppel and legitimate expectation, arguing that the Corporation's actions created a legitimate expectation of allotment. The Supreme Court held that the doctrines were not applicable because the Corporation had made it clear that there was no obligation to allot plots. The advertisement and subsequent actions were provisional and subject to approval of change of land use, which was not granted. Therefore, the appellants could not claim legitimate expectation or promissory estoppel.

4. Power of the State Government to Issue Directives under Article 90:
The State Government's power to issue directives to the Corporation under Article 90 of the Memorandum of Association was upheld. The Supreme Court noted that the State Government, as the owner of the land, was entitled to take policy decisions, including the refusal to sanction change of land use. The directives issued by the State Government were binding on the Corporation and were in line with the policy of promoting industrialization.

5. Scope of Judicial Review of Policy Decisions:
The Supreme Court emphasized the limited scope of judicial review of policy decisions. The Court should not readily accept allegations of mala fides against the State and its functionaries without tangible evidence. The decision to refuse change of land use was based on public interest and policy considerations, and there was no evidence of extraneous considerations or mala fides. The Court upheld the State Government's decision as rational and in public interest.

Conclusion:
The appeals were dismissed, and the Supreme Court upheld the State Government's decision not to sanction the change of land use from industrial to residential. The doctrines of promissory estoppel and legitimate expectation were not applicable, and the appellants were not entitled to allotment of residential plots. The policy decision was found to be rational, in public interest, and within the State Government's power.

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