2018 (10) TMI 1647 - SC - Indian Laws

Allotment of Land - residents of Channi Himmat questioned the allotment made in favour of the Academy, on the ground that the piece of land was meant for a playground but the same was allotted to the Academy in violation of the original scheme and plan of the Channi Himmat Housing Colony - Held that - The Division Bench of the High Court was not justified in rejecting the submission of the Academy that the allocation of land was done keeping in mind the plight of the students of the school. One of the reasons assigned by the Division Bench in rejecting this contention was that there was no discussion about the plight of the students in the correspondence between the Appellant-Academy and the Government. However, a mere lack of explicit statements to that effect does not imply that the action was not motivated by welfare considerations, inasmuch as the displacement and uprooting of several hundreds of students from their school was the obvious underlying concern in the representation made by the Appellant and the order passed by the State Government. Imparting basic education is a constitutional obligation on the State as well as societies running educational institutions. Children are the future of our nation. Education is a basic tool for individuals to lead an economically productive life and is one of the most vital elements for the preservation of the democratic system of government. The Constitution of India bestows considerable attention to the field of education. It recognizes the need for regulating the various facets of activity of education and also the need for not only establishing and administering educational institutions but also providing financial support for educational institutions run by private societies. There is no reason to reject the contention of the State Government that the allotment of 4 Kanals of land to the Appellant was in the nature of an exchange, inasmuch as the State Government wanted to evict the Appellant who was running a school at Wakf land situated in the main city area. Such a decision seems to have been taken by the State Government to avoid any unrest in the locality or city. In such circumstances, there is no arbitrariness in the decision taken by the State in allotting 4 Kanals of property. On the other hand, we are of the opinion that the action of the State was fair, reasonable, transparent, unbiased, without favouritism and nepotism. Adequacy of compensation recovered by the State - Held that - The action of the authorities can be assailed to the extent that the allotment of two kanals free of cost was bad in law. It is evident that the consideration paid by the Appellant was only with respect to two kanals and the remaining two kanals of land were allotted for free to the Appellant. It is not in dispute that ₹ 8,00,000/- per kanal was the average auction sale price which was fetched around the time of allotment. Keeping this figure in mind, the State Government fixed the allotment price at ₹ 8,00,000/- per kanal. It is clear that there was no arbitrariness in fixing the price at ₹ 8,00,000/- per kanal. There is a loss to the public exchequer to the extent of ₹ 16,00,000/- for two kanals as on the date of allotment. However, having regard to the fact that the Appellant-Academy has been running on the allotted site since many years, after constructing a new building, the transfer may be saved by giving the transferee an opportunity to make good the shortfall in the consideration. It is appropriate to give the Appellant the opportunity to make good the shortfall in consideration, as the loss to the public exchequer caused by the free allocation cannot be said to have had an everlasting effect or impact on public interest. Moreover, there is no high-handedness on the part of the Appellant in seeking the allotment in its favour, as it acted in a bona fide manner. This would also be in consonance with the principle stated by us in the beginning of the judgment that the public must be adequately compensated for the alienation of natural resources by the State. The Appellant should pay consideration for two kanals of land received gratuitously, at the rate of ₹ 8,00,000/- per kanal, which was the average auction price prevailing at the time of allocation. The Appellant is also liable to pay interest at the rate of 6% per annum from the date of the allotment till the date of payment. The payment should be made within three months from this date - the appeals are allowed.

Summary

Issues Involved:
1. Legality of the allotment of land to the Academy.
2. Adequacy of compensation for the allotted land.
3. Public interest and welfare considerations in the allotment process.
4. Compliance with Article 14 of the Constitution of India.

Detailed Analysis:

1. Legality of the Allotment of Land to the Academy:
The primary issue was whether the land allotment to the Academy was legal and followed due process. Initially, the Academy was situated on Wakf property and was ordered to vacate. The Academy then requested land from the State Government, which was allotted by the J&K Housing Board. The Division Bench of the High Court quashed the allotment, directing a public auction instead. However, the Supreme Court observed that the allotment was made considering the public interest and the urgency to relocate the school. The Court emphasized that the Cabinet's decision was motivated by welfare considerations, particularly the education of hundreds of students, and was not arbitrary.

2. Adequacy of Compensation for the Allotted Land:
The second issue concerned whether the compensation received by the State for the land was adequate. The Supreme Court noted that while the Academy paid for two kanals at ?8,00,000/- per kanal, the remaining two kanals were allotted free of cost. The Court found this allocation without adequate compensation to be problematic, resulting in a loss of ?16,00,000/- to the public exchequer. The Court held that the Academy should compensate for the gratuitous land at the prevailing rate with interest, thus rectifying the shortfall in consideration.

3. Public Interest and Welfare Considerations in the Allotment Process:
The Supreme Court underscored that the allotment was driven by the need to prevent disruption in the education of students. The Court referenced Articles 38 and 39 of the Constitution, which mandate the State to promote welfare, including education. The Court held that the State's action was justified as it aimed to ensure continuity in education and avoid unrest due to the eviction from the Wakf property. The Court found that the decision was in public interest and backed by a welfare purpose, thus not arbitrary.

4. Compliance with Article 14 of the Constitution of India:
The Supreme Court evaluated whether the allotment process adhered to the principles of equality and non-arbitrariness under Article 14. It cited several precedents, including the "2G case," emphasizing that while competitive bidding is generally preferred, exceptions are permissible if backed by a social or welfare purpose. The Court concluded that the allotment to the Academy, though not through an auction, was justified given the welfare objective and urgency. The Court noted that the process was fair, reasonable, and transparent, thereby complying with Article 14.

Conclusion:
The Supreme Court allowed the appeals, setting aside the Division Bench's judgment and restoring the Single Judge's decision with modifications. The Academy was directed to pay for the two kanals of land received gratuitously at ?8,00,000/- per kanal with 6% interest from the date of allotment. The Court's decision balanced the need for public interest and adequate compensation, ensuring compliance with constitutional principles.