2019 (2) TMI 1451 - HC - Companies Law

Allotment of land to the petitioner cancelled by Indore Development Authority - plot, which was allotted to the respondent was a commercial plot and the Indore Development Authority also allotted various plots to various newspapers irrespective of their circulation again without adhering to tender process on concessional rates - HELD THAT - After termination of allotment to other newspapers, no fresh allotment has been done till date nor any regularization has taken place. No lease deed has been executed in respect of any newspaper, whose allotment was terminated. The respondent before this Court has not be able to point out from any document to establish that any regularization has taken place in respect of other newspapers nor has been able to point out nor able to bring on record any lease deed, which has been executed in favour of any newspaper, whose allotment was terminated The State Government has framed Rules for allotment of land and now there is a prescribed procedure for allotting the land belonging to public body like Indore Development Authority. It is not a case where the land is being allotted to the respondent and the decision has been taken for social good, public good or common good like allotment of affordable houses to members of Scheduled Caste and Schedule Tribe or implementation of housing scheme for Below Poverty Line families. If allotment of land and execution of sale deed in favour of respondent is not for social good, public good or common good, it cannot be dissipated in favour of private entrepreneur virtually free of cost or for consideration not commensurate with its worth without attracting Article 14 and 39(b) of the Constitution of India. No allotment can be done in the manner and method it has been directed by the learned Single Judge in the present case. The land in question is situated in commercial area. Undisputedly, it is not a part of Press Complex and the plots in the Press Complex cannot be compared with the plots which are situated in commercial area and is valued at about ₹ 200 Crores. The State Government has framed Rules for allotment of land and the Indore Development Authority does not have any choice except to follow the Rules framed on the subject. In the present case, the respondent wants the land belonging to Indore Development Authority for almost negligible consideration that too dehors the statutory provision governing the field on the ground that in similar circumstances land has been allotted to various other newspapers. It has been stated at bar by the learned Advocate General that after the judgment was delivered by the Division Bench in the first round of litigation, leases have not been renewed in respect of other newspapers and no final order has passed by the Indore Development Authority, otherwise also no relief can be claimed on the ground of negative equality. This Court would like to clarify one more thing that the land for which the petitioner is staking his claim is not a land in the area which is marked for Press Complex, on the contrary the piece of land is situated in a commercial area surrounded by commercial buildings and therefore, the petitioner can never said to be an identically placed person claiming the land, which is situated in identical place, where the land was allotted to other newspaper groups. Resultantly, the impugned judgment dated 14/11/2013 passed by the learned Single Judge in Writ Petition No.2801/2012 is quashed. The Indore Development Authority shall be free to dispose of the land in question in accordance with law, keeping in view the statutory provisions as contained under the Rules of 2018. With the aforesaid, writ appeal stands allowed.

Issues Involved:
1. Legality of the land allotment by Indore Development Authority (IDA) to a private company without tender.
2. Validity of concessional rates for land allotment to newspapers.
3. Judicial review of IDA's decision to cancel the allotment.
4. Applicability of rules and regulations governing land allotment.
5. Issuance of a writ of mandamus by the High Court directing IDA to allot land at historical rates.

Detailed Analysis:

1. Legality of the Land Allotment by IDA Without Tender:
The initial allotment of plot No. A-7, Scheme No. 54, PU-4, Commercial, to the respondent (a private company) was done without issuing any tender notice, which is against the standard procedure for public land disposal. The court scrutinized this action under the principles of fairness and transparency, emphasizing that public authorities must adhere to established rules and procedures to prevent arbitrary decisions.

2. Validity of Concessional Rates for Land Allotment to Newspapers:
The court examined the allotment of plots to various newspapers at concessional rates. It was held that such allotments were void ab initio as they violated Rule 19 and 20 of the Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano Tatha Anya Sanrachnaon Ka Vyayan Niyam, 1975, which only allows concessional rates for charitable purposes. Newspapers do not qualify as charitable institutions, and thus, the allotments were deemed illegal.

3. Judicial Review of IDA's Decision to Cancel the Allotment:
The respondent's allotment was canceled following a public interest litigation (PIL) that challenged the legality of such allotments. The Division Bench upheld the cancellation, stating that the allotments were made in violation of established rules. The court emphasized that any re-allotment must comply with Rule 5 and Rule 6 of the 1975 Rules, and no concessional rates should be applied.

4. Applicability of Rules and Regulations Governing Land Allotment:
The court highlighted that the IDA must follow the Madhya Pradesh Vikas Pradhikarano Ki Sampatiyon Ka Prabandhan Tatha Vyayan Niyam, 2018 (Rules of 2018) for any land allotment. These rules mandate a transparent process involving public auctions or tenders to ensure fair competition and prevent arbitrary decisions.

5. Issuance of a Writ of Mandamus by the High Court Directing IDA to Allot Land at Historical Rates:
The Single Judge's order directing IDA to allot the plot to the respondent at the 1992 rates was set aside. The court ruled that such an order was beyond jurisdiction, as it compelled IDA to act contrary to the statutory provisions. The court reiterated that mandamus cannot be issued to enforce a duty that is not legally mandated or to compel a public authority to act against the law.

Conclusion:
The court concluded that the allotments made without following the prescribed procedures were illegal. It emphasized the need for transparency and adherence to statutory rules in the disposal of public land. The IDA was directed to dispose of the land in question in accordance with the Rules of 2018, ensuring a fair and competitive process. The judgment underscores the principle that public authorities must act within the bounds of the law, and any deviation from established procedures must be scrutinized to prevent arbitrary and unfair decisions.

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