1996 (7) TMI 589 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the procedure adopted by HUDA in allotting school sites.
2. Legality of the Division Bench's directions for re-allotment of school sites.
3. Discretionary power of HUDA in allotment versus public auction.

Detailed Analysis:

1. Validity of the Procedure Adopted by HUDA in Allotting School Sites:
The Haryana Urban Development Authority (HUDA) had invited applications for allotment of sites for high schools, primary schools, or nursery schools in Panchkula. Out of 23 available plots, HUDA allotted sites to 11 applicants and denied allotment to eight others. The non-allottees challenged the validity of the procedure adopted by HUDA in the High Court, which led to the learned single Judge initially finding fault with the allotment process. However, considering that buildings had already been constructed and schools were operational, the single Judge upheld the actions and dismissed the writ petitions. On appeal, the Division Bench quashed the allotments and issued specific directions for fresh allotment.

2. Legality of the Division Bench's Directions for Re-Allotment of School Sites:
The Division Bench issued several directions for re-allotment, including:
- Notification of all school sites afresh in accordance with the Act and Regulations.
- Preference for sale or allotment by open auction.
- Invitation of applications in accordance with Regulation 5 if not opting for auction.
- Pre-determination of the tentative price/premium of each site.
- Establishment of a uniform criterion for allotment.
- Evaluation of the construction value by a Committee of experts.
- Intimation to intending allottees about possession terms.
- Provision for a 10% bid amount benefit for current allottees in case of auction success.
- Payment of construction costs to erstwhile allottees from the sale proceeds.
- Completion of the re-allotment process within four months.
- Allowing private respondents to remain in possession until fresh allotment is completed.

The Supreme Court broadly upheld these directions, emphasizing the necessity of clear and unequivocal guidelines or rules for the disposal of public property, consistent with public purpose.

3. Discretionary Power of HUDA in Allotment versus Public Auction:
The petitioners contended that the procedure adopted by HUDA was valid, arguing that Section 15 of the Haryana Urban Development Authority Act, 1977, and the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978, provided for allotment by modes other than public auction. They asserted that the Division Bench erred in concluding that allotment by public auction was the only valid mode. However, the Supreme Court noted that while Section 15(3) and Regulation 3(c) allowed for various modes of disposal, including allotment, the exercise of such discretionary power required specific regulations or valid guidelines to avoid arbitrariness. The Division Bench's insistence on public auction in the absence of such regulations was deemed correct in law.

The Supreme Court further directed that:
- The Committee should determine the market value of the sites as of September 11, 1992.
- An option should be given to specific petitioners to pay the market price in lump sum, subject to High Court approval.
- HUDA should frame an appropriate scheme for allotment under discretionary power and obtain High Court approval before proceeding with future disposals.
- The allotment to specific petitioners would be subject to these directions, and non-acceptance would result in public auction of the properties.

Conclusion:
The Supreme Court upheld the Division Bench's directions with additional instructions, emphasizing the need for clear regulations and guidelines for the disposal of public property to ensure transparency and prevent arbitrariness. The Special Leave Petitions were accordingly ordered, with specific directions for the re-allotment process and the framing of an appropriate scheme by HUDA.