2009 (9) TMI 1024 - SC - Indian Laws

Disputed Land - Claim for preferential right for allotment of the part of the vacant land for expansion of its factory - preferential right of the unit holder for having allotment of neighbouring land for the purpose of factory expansion - Right of equality guaranteed under Article 14 of the Constitution stood violated - Whether the High Court was justified in not granting the interim relief in favour of the appellant? - Government of Maharashtra had issued a Circular regarding fixation of rate of industrial area in which allotment of plot has to be made by inviting tenders. It also provides that where there are more than one application for allotment, the plot may be disposed of by adopting the tender process. The application of the appellant had been made prior to the application made by respondent No.4. The respondent No.4 instead of making application to the Corporation started negotiations with the Government directly for allotment of land merely by writing a letter in June, 2005 and on 10th June, 2005 an understanding was arrived in between the Government of Maharashtra and respondent No.4 of commissioning of the Project at Nasik. User of land in Open Space No.9 was converted from Open Space to Industrial Area vide order/resolution dated 10th February, 2006 and it was re-numbered as Plot No.126. Appellant has submitted that the application of the appellant has been rejected without assigning any reason whatsoever and probably the reason may be that on the date of passing the order the land was merely a designated vacant land and not meant for industrial purpose - appellant had been asking the respondent no.2 to grant the lease of plot nos.F-16 and F-17, which had earlier not been the part of the Open Space No.9, on the basis of being contiguous and adjacent to the appellant's existing factory HELD THAT - Every action of the State or its instrumentalities should not only be fair, legitimate and above-board but should be without any affection or aversion. It should neither be suggestive of discrimination nor even apparently give an impression of bias, favouritism and nepotism. The decision should be made by the application of known principle and rules and in general such decision should be predictable and the citizen should know where he is, but 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 S.G. Jaisinghani Vs. Union of India ors. 1967 (2) TMI 30 - SUPREME COURT , Haji T.M. Hassan Rawther Vs. Kerala Financial Corporation, 1987 (11) TMI 372 - SUPREME COURT . In a case like this, when the applicant approaches the Court complaining against the Statutory Authority alleging arbitrariness, bias or favouritism, the court, being custodian of law, must examine the averments made in the application to form a tentative opinion as to whether there is any substance in those allegations. Such a course is also required to be followed while deciding the application for interim relief. Whether interim injunction should be granted by the Court ? - Interim order is passed on the basis of prima facie findings, which are tentative. Such order is passed as a temporary arrangement to preserve the status quo till the matter is decided finally, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing. The object of the interlocutory injunction is, to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. (vide Anand Prasad Agarwalla v. State of Assam vs. Tarkeshwar Prasad Ors. 2001 (5) TMI 937 - SUPREME COURT and Barak Upatyaka D.U. Karmachari Sanstha 2009 (3) TMI 992 - SUPREME COURT . Grant of temporary injunction, is governed by three basic principles, i.e. prima facie case; balance of convenience; and irreparable injury, which are required to be considered in a proper perspective in the facts and circumstances of a particular case. But it may not be appropriate for any court to hold a mini trial at the stage of grant of temporary injunction (Vide S.M. Dyechem Ltd. Vs. M/s. Cadbury (India) Ltd. 2000 (5) TMI 1060 - SUPREME COURT , and Anand Prasad Agarwalla (supra). Anything done in undue haste can also be termed as arbitrary and cannot be condoned in law. Bahadursinh Lakhubhai Gohil Vs. Jagdishbhai M. Kamalia Ors. 2003 (12) TMI 648 - SUPREME COURT . Thus, the law on the issue emerges to the effect that interim injunction should be granted by the Court after considering all the pros and cons of the case in a given set of facts involved therein on the risk and responsibility of the party or, in case he looses the case, he cannot take any advantage of the same. The order can be passed on settled principles taking into account the three basic grounds i.e. prima facie case, balance of convenience and irreparable loss. The delay in approaching the Court is of course a good ground for refusal of interim relief, but in exceptional circumstances, where the case of a party is based on fundamental rights guaranteed under the Constitution and there is an apprehension that suit property may be developed in a manner that it acquires irretrievable situation, the Court may grant relief even at a belated stage provided the court is satisfied that the applicant has not been negligent in pursuing the case. In the light of the settled legal propositions and admittedly the whole case of the appellant is based on violation of Article 14 of the Constitution as according to the appellant it has been a case of violation of equality clause enshrined in Article 14, the facts mentioned hereinabove clearly establish that the Corporation and the Government proceeded in haste while considering the application of respondent No.4 which tantamount to arbitrariness, thus violative of the mandate of Article 14 of the Constitution. Application of the appellant was required to be disposed of by a speaking and reasoned order. Admittedly, no reason was assigned for rejecting the same. There is nothing on record to show as on what date and under what circumstances, Plot nos.F-16 and F-17 stood decarved and became part of the Open Space No.9. The respondents could not furnish any explanation as in what manner and under what circumstances, the Bharat Sanchar Nigam Ltd. has been made allotment of land from plot no.F-16, (a part of Open Space No.9), without change of user of the land. The respondent no.4 had not initially asked for 17 acres of land which has been allotted to it. There is nothing on record to show as to why the land could not be disposed of by auction. All these circumstances provide for basis to form a tentative opinion that State and its instrumentalities have acted affectionately in the case of respondent no.4. Undoubtedly, there has been a delay on the part of the appellant in approaching the court but we cannot be oblivious of the fact that the appellant had been approaching the authorities time and again for allotment of the land. Admittedly, the entire land had not been developed by the respondent no.4 till this Court entertained the Special Leave Petition and directed the parties to maintain status quo with regard to the land measuring 2 acres adjacent to the appellant's plot no.F-15 vide order dated 21.7.2008. Therefore, it is not only the appellant who is to be blamed for the delay. The land had been allotted to the respondent no.4 in undue haste and no development could take place therein for more than two years of taking the possession of the land. In such a fact-situation the submission made on behalf of the respondents that interim stay cannot be granted at a belated stage in preposterous. Therefore, the appeal deserves to be allowed and is hereby allowed. The interim order passed by this Court on 21.7.2008 shall continue in operation till the writ petition is decided by the High Court. The Hon'ble High Court is requested to dispose of the writ petition expeditiously. Needless to say that any observation made herein either on facts or on law shall not adversely effect the case of either of the parties, for the reason that the only question before this Court has been as to whether the appellant deserves to be granted interim protection till his writ petition is decided by the High Court.

Summary

Issues Involved:
1. Rejection of the appellant's application for land allotment.
2. Alleged discriminatory allotment of land to respondents 4 and 5.
3. Compliance with statutory provisions and regulations.
4. Violation of Article 14 of the Constitution.
5. Justification for interim relief.

Detailed Analysis:

1. Rejection of the appellant's application for land allotment:
The appellant, a private limited company, applied for the allotment of 8000 sq. yards of adjacent vacant land on 30.11.2005. The Maharashtra Industrial Development Corporation (Corporation) rejected this application on 19.12.2005 without assigning any reason. The appellant contended that the rejection was arbitrary, especially since a part of Plot No. F-17 had been allotted to BSNL in 2004 without changing the land user.

2. Alleged discriminatory allotment of land to respondents 4 and 5:
Respondent No. 4, a major industrial company, sought land for a joint venture project with Renault. The Government of Maharashtra promised to provide land, and the Corporation changed the land user from open space to industrial area to facilitate this. The land measuring 17 acres was allotted to respondent No. 4 on 27.3.2006, and possession was handed over immediately. The appellant argued that this was done in undue haste, showing favoritism towards a big industrial house, violating Article 14 of the Constitution.

3. Compliance with statutory provisions and regulations:
The allotment of land is governed by the Maharashtra Industrial Development Act, 1961, and the Maharashtra Industrial Development Corporation (Disposal of Land) Regulations, 1975. Regulation 4 provides for disposal of land by public auction or individual applications, and Regulation 10 mandates that the Land Committee consider applications and pass appropriate orders. The appellant claimed that the Corporation did not follow these regulations and that the land should have been disposed of by auction.

4. Violation of Article 14 of the Constitution:
The appellant alleged that the rejection of its application and the allotment to respondent No. 4 violated the right to equality guaranteed under Article 14. The appellant's application was made before respondent No. 4's, yet the latter's application was processed quickly and favorably. The Supreme Court noted that the Corporation and the Government acted in undue haste, which amounted to arbitrariness and violated Article 14.

5. Justification for interim relief:
The High Court rejected the appellant's application for interim relief, leading to this appeal. The Supreme Court emphasized that interim relief is granted based on prima facie findings to preserve the status quo and prevent the matter from becoming infructuous. The Court considered the principles of prima facie case, balance of convenience, and irreparable injury. Given the undue haste in the allotment to respondent No. 4 and the appellant's ongoing efforts to secure the land, the Supreme Court found that the appellant deserved interim protection.

Conclusion:
The appeal was allowed, and the interim order passed by the Supreme Court on 21.7.2008 was to continue until the High Court decided the writ petition. The High Court was requested to expedite the hearing. The Supreme Court's observations on facts or law were not to adversely affect either party's case. The appeal was disposed of with no costs.