ORDER [ENTITY], J.
1. In this petition, under [SECTION] of the [ACT], this Court is required to examine the action of a statutory body, i.e., the Rajasthan Housing Board, Jaipur (for short 'the Board') in the matter of allotment/disposal of houses under 'Parijat' scheme. In order to appreciate the controversy, it is necessary to have the conspectus of the facts involved.
2. The petitioner had applied for allotment a house in Sawaimadhopur town in the category 'Middle Income Group-B', as back as, in the year 1981 and his seniority was fixed at No. 3 by the Board. He deposited Rs. 12,000/- in two instalments as earnest money. Before he could be allotted a house, he was transferred to Jaipur. He, therefore, applied to the Board on 22-12-1988 for transfer of his registration from Sawaimadhopur to Jaipur. The Chief Estate Manager of the Board vide his letter dated 14-3-1989 informed the petitioner that his registration could be changed for Jaipur under 'Parijat' scheme. The petitioner agreed for the change and submitted an application in a prescribed manner and also deposited a sum of Rs. 300/-. Subsequently, he was informed by the Chief Estate Manager vide his letter dated 24-1-1990 that his request for transfer of registration from Sawaimadhopur to Jaipur ([ENTITY]) has been accepted. Subsequently, a certificate was issued to the petitioner by the Estate Manager of the Board on 24-11-1990 (Annexure 13) to the effect that a house of MIG, Type I, in [ENTITY] was reserved for him in 'Parijat' scheme. It was stated therein that possession of the house shall be given on payment of disposal price amounting to Rs. 1,77,787/- approximately, which included Rs. 14,600 / - already deposited. It was also made clear in the certificate that the land of the house shall be free from all encumbrances and the next floor could be built by the allottee and not by the Board. Then, by another letter of the same date (Annexure 14) the petitioner was intimated about the registration of a house of Type I, in category 'B' under 'Parijat' scheme at [ENTITY] and he was directed to deposit the amount on the dates mentioned in the letter. 25% of the estimated cost was reckoned at Rs. 45,787/-. After deducting Rs. 14,600/- deposited by the petitioner, he was asked to deposit the price of the house in four instalments as under:
I Instalment 31,787/- on 30-12-1990 II Instalment 44,000/- on 28-02-1991 III Instalment 44,000/- on 30-05-1991 IV Instalment 44,000/- on 30-07-1991
3. There is no dispute that in pursuance to the above, the petitioner deposited all the instalments in time, much prior to 31-3-1992 when a lottery for allotment of houses was drawn. The draw was made on 31-3-1992 but the name of the petitioner was not included in it, though one Smt. [ENTITY], who was at S.No. 103 in the seniority list, was included in the draw. It is noteworthy that the seniority of the petitioner was at S. No. 102. Then, Smt. [ENTITY] was allotted House No. 61/39, in Sector No. 6, at Mansarovar on a cost of Rs. 1,78,000/- as assessed by the Board. The petitioner came to know of this fact when Houses No. 86/181 was proposed for his allotment on 20-3-1993 at a cost of Rs. 3,24,825/-. The petitioner immediately requested the Board to make allotment of a house in Sector No. 6 at the same cost as was charged from Smt. [ENTITY]. The request of the petitioner was not accepted and an allotment letter was issued by the Board on 24-4-1993, whereby House No. 86/181 was allotted to him under 'Parijat' scheme, and the cost of the house was assessed at Rs. 3,24,825/- to be deposited in a period of three months of the issue of the letter along with all other necessary documents, failing which the allotment was to stand cancelled, without any notice. The petitioner therefore, while challenging the action of the respondent-Board has prayed to allot him House No. 61/31 in Sector No. 6 at Mansarovar, after cancelling the allotment made in favour of Smt. [ENTITY], on the same cost as it was allotted to her or in the alternative, to allot him another house at the same cost of Rs. 1,78,000/- or to reduce the cost of the House No. 86/181 to the tune of Rs. 1,77,787/- deposited by him.
4. In the return the respondent-Board did not dispute the factual position and the only plea taken by it is that the name of the petitioner could not be included in the lottery drawn on 31-3-1992, as he did not submit the copies of challans through which he had deposited the instalments. According to the Board, the petitioner was under duty bound to submit the copies oi challans, tor being included in the draw for the allotment of houses. Otherwise, the plea of the Board is that though the petitioner had deposited all the instalments in time and was eligible to get allotment of the house at the price charged from other allottees, but he was denied the same at that time as he failed to submit copies of the challans to tne Board. The Board also contended that House No. 86/181 was allotted to the petitioner at the cost prevalent at that time and that no house in Sector No. 6 was available for allotment.
5. Before I advert to the submissions made by the learned counsel for the parties, some facts about 'Parijat' scheme may be given. It is a self financing scheme and it was available to the applicants who were already registered with the Board. The scheme was introduced as the Board was financely unable to construct houses under Middle Income Group and High Income Group. As per the figures made available in a booklet issued by the Board 16,777,21881 and 5620 persons were registered under MIG-A, M1G-B and HIG, respectively on March 31, 1987. The Board required 371 crores of rupees for constructing houses for them, while it could hardly procure 25 crores of rupees in a year for constructing houses of MIG and HIG categories. Three types of houses, Parijat I, Parijat II, and Parijat III were undertaken to be constructed under the scheme as per the map and the estimated cost detailed out in the booklet. The cost of a house requried to be fixed after every three months and was to be deposited in four instalments. The first instalment was to be deposited in a month, the second instalment within six months, the third instalment within 12 months and the fourth instalment within 18 months of the issuance of the registration letter. If any instalment towards the cost remained to be paid, the same could be deposited within a month from the date of issuance of allotment/ possession letter. The possession of the house was to be delivered by the Board within two years and if it failed to handover possession of a house within two years then 6% interest was payable to the registered applicant. The Board undertook to allot a house at the cost estimated at the time of registration, but in case the cost exceeded then the Board was entitled to recover 16% interest from an appherent of HIG category and 15% interest from an applicant of MIG category on the excess amount to the cost estimated and charged from the applicant. Thus, the 'Parijat' scheme was a self financing scheme, where the applicants make the fund available to the Board for constructing the houses and the houses are constructed from their money on the land earmarked at the time of registration. The scheme is a time bound programme. On the one hand, a registered applicant is required to deposit the entire estimated cost of the house in four instalments as per schedule, if the Board, on the other hand, undertakes to allot/deliver a constructed house in two years for registration under the scheme.
6. It was contended on behalf of the petitioner that the Rajasthan Housing Board is a statutory public body and it is an instrumentality or agency of Government engaged in the matter of high public interest and is performing public functions, as such, it was 'State' within [SECTION] of the [ACT]. It was urged that every action of the Board, whether it be in the field of contract or any other field, was subject to [SECTION] of the [ACT] and must be reasonable and taken only upon lawful and relevant grounds of public interest. In that light it was asserted that the action of the Board in depriving the petitioner to get allotment/possession of a house in time was arbitrary and discriminatory and not in accordance with the policy, which the Board was enjoined to follow. It was also contended by Mr. [ENTITY], learned counsel for the petitioner, that the Board is not like a private individual who can pick and choose the person of his liking. A public corporation when it enters into contract or it is administering largess, it cannot, without adequate reason, exclude any person from dealing with it or take away largess arbitrarily.
7. There is no dispute that the Rajasthan Housing Board is a creation of Statute. It is also no more in dispute that it is an instrumentality or agency of Government and it performs public functions. The Board has been constituted under the [ACT] with lofty public function i.e. to provide for measures to be taken to deal with and satisfy the need of house accommodation in the State of Rajasthan. [SECTION] empowers the Board to make bye-laws which may be necessary or expedient for the purpose to carry out its duties and functions under the Act. A bye-law may provide that a contravention thereof shall be an offence. It may also provide for any matter covered by a bye-law made under the [ACT] on publication of such bye-law and bye-law made under [SECTION] of the [ACT] shall cease to nave effect in respect of the matter covered by the bye-law made under this Section, in the area where such bye-law shall apply. [SECTION] of the Act provides penalty for contravention of any bye-law made under [SECTION] which includes imprisonment for a term which may extend to six months. The Board constists of a Chairman, appointed by the State Government, and of the following other members, viz.
(a) Financial Commissioner, Government of Rajasthan, ex-officio member;
(b) Secretary to Government, Town Planning Department, ex-officio member;
(c) Chief Town Planner and Architectural Adviser, ex-officio member;
(d) Housing Commissioner of the Board, ex-officio member;
(e) Six non-official members to be appointed by the Government of whom one shall belong to the Scheduled Castes or Scheduled Tribes.
The remuneration to the Chairman and the members is fixed by the Government. Leave of absence for the Chairman is granted by the Government. The conditions of service of officers and servants of the Board are determined by Regulations. The Board undertakes housing scheme from time to time as provided under [SECTION] of the Act. Such Housing Schemes are published in the official gazette and are executed by the Board. The Board is also empowered to turn, divert or close the public street or a part thereof. The Board has other duties also as enumerated in [SECTION]. The State Government may make grant to the Board of a sum equivalent to the admin-isterative expenses of the Board every year. Under [SECTION], the Board may, from time to time, with the previous sanction of the State Government, make regulations for the following purposes amongst others, namely;
(a) for the management and use of building constructed under the Housing Scheme, and
(b) the principle to be followed in allotment of tenants and premises.
Thus, it is clear that the Board is statutory authority on whom powers are conferred by law. It has authority to make bye-laws, the disobedience of which would be punishable as a criminal offence. It gets financial assistance by the State. The Board is constituted by the Government and the Government has control on its management and policies. The functions carried out by the Board are public functions, which are closely related to governmental functions. Mr. [ENTITY], therefore, is right in contending that every action/activity of the Board is subject to [SECTION] of the [ACT] and must be reasonable and taken only upon lawful and relevant grounds of public interest. When there is arbitrariness in State action [SECTION] springs in and judicial review strikes such an action down. Its every action mut be subject to rule of law and must be informed by reason, (See [PRECEDENT]; [PRECEDENT]; [ENTITY] v. International Air Port Authority of India; (1979) 3 SCC 489 : (AIR 1979 SC 1628); [PRECEDENT]; [PRECEDENT]:
8. In [ENTITY]'s case (supra) it was observed:
"Now, it is obvious that the Government which represents the executive authority of the State, may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of juridical persons two carry out its functions. In the early days, when the Government had limited functions, it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge governmental functions, which were of traditional vintage. But as the tasks of the Government multiplied with the advent of the welfare State, it began to be increasingly felt that the framework of civil service was not sufficient to handle the new tasks which were often of specialised and highly technical character. The inadequecy of the civil service to deal with these new problems came to be realised and it became necessary to forge a new instrumentality or administrative device for handling these new problems. It was in these circumstances and with a view to supplying this administrative need that the public corporation came into being as the third arm of the Government."
It was also held in the above judgment that where corporations were created by- Government for setting up and management of public enterprises and carrying out other public functions, the Corporation are acting as instrumentality or agency of the Government and would subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of law, there would be distinct and legal entities. It was observed:
"If Government acting through its officers, has subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through the instrumentality or agency of corporations should equally be subject to the same limitations".
9. In [PRECEDENT], it was held that if the functions of the corporation are of public importance and closely related to governmental functions it would be relevant factor in classifying the corporation as an instrumentality or agency of Government.
10. In [PRECEDENT], the learned Cheif Justice pointed out that:
"A person who has been dealing with the Government in the matter of sale and purchase of the materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality."
It was further observed:
"Where the State is dealing with the individuals for transaction of sale and purchase of goods, the two important factors are that an individual is entitled to draw that the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice."
11. Reference may be made to the obervations of the Supreme Court in [PRECEDENT] reiterated in [PRECEDENT].
"It is dangerous to exonerte corporations from the need to have constitutional conscience: and so, that interpretation, langauge permitting, which makes governmental agencies, whatever their mien amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperiod."
In [PRECEDENT], after elaborate discussion of the case law it was observed as under:
"We are unable to accept the submissions. Being a public body even in respect of its dealing with its tenant, it must not act in public interest, and an infraction of that duty is amenable to examination either in civil suit or in writ jurisdiction."
12. In the background of the law settled by the Apex Court of the country, it is now undisputed that this Court can have a judicial review on every action/ activity of the Board. If the action of the Board is found to be unreasonable, arbitrary or against public interest, it can be struck out by this court in writ jurisdiction under [SECTION] of the [ACT].
13. The facts in the present case are not much in dispute. A house was reserved for the petitioner by the Board at [ENTITY] under 'Parijat' scheme in the year 1989 and his seniority was fixed at No. 102. He was required to deposit the price of the house in four instalments. The last instalment was to be paid by July, 30, 1991. There is no dispute that the petitioner had deposited all the four instalments of the estimated disposal price of the house. There is also no dispute that he was eligible to get a house in the lottery drawn on March 31, 1992 and in the said lottery Smt. [ENTITY], who was at S. No. 103, was included and allotted a house. In case, had the petitioners name been included in the said lottery, he would have got a house at the cost of Rs. 1,78,200/- being the disposal price of the house charged from Smt. [ENTITY]. The ground for non-inclusion of his name in the lottery, as stated by the respondent Board, is neither legitimate nor convincing. Learned counsel for the Board could not point out any rule, regulation or circular of the Board casting a legal duty on the petitioner to intimate the Board about the payment of instalments. The instalments of the price were deposited by the petitioner in the Bank on the direction of the Board and the Bank had received the amount as agent of the Board. Further, it was the duty of the Board to have obtained full and complete information from the Bank about the payment of instalments by the petitioner and other applicants. Similarly, the Bank may have the duty to furnish upto date information to Board, but in no case the petitioner had any duty to furnish any information or submit copies of challans unless he was asked for the same. It was expected from a public authority like the Board, who is dealing with thousands of applicants to have a separate and upto date account of each individual applicant. In any case, if the information was not complete with the Board, it could have sought the same from the petitioner. Under Parijat Scheme the Board was duty bound to construct houses and deliver the same to the applicants in a stipulated period of two years. If the officers of the Board were negligent in maintaining proper accounts of each individual, nobody else should suffer on account of their lapses. I have no hesitation to express that the stand taken by the Board for not providing a house to the petitioner is not valid and legitimate. Can the Board be allowed to take a stand that a house could not be allotted to the petitioner though he was legally entitled to get, because it failed to maintain proper account? Was it not the duty of the Board to obtain full and uplo date information from the Bank about the payment of instalments by the applicants so that it could act fairly and reasonably? Was it not the duty of the Board to have sought information from the petitioner in case his account was not properly maintained by it? Judged from any angle, I can safely hold that the action of the respondent Board in the matter of allotment of house to the petitioner was arbitrary and unreasonable. The Board and its officers failed to perform their public duties to act reasonably and fairly. I, therefore, hold that the petitioner was entitled to get allotment/possession of house as per scheme when the draw was made on 31-3-1992. His name was wrongly excluded by the Board in the draw held on 31-3-1992. He is, therefore, entitled to put in the same position with proper compensation.
14. Now, the next important question is what relief should be granted to the petitioner in the facts and circumstances of the case. The petitioner has prayed for the allotment of House No. 61/31 in Sector No. 6 in Man-sarovar Scheme which was allotted to Smt. [ENTITY] or in the alternative another house a( the same cost as it was charged from Smt. [ENTITY]. The petitioner's prayer for the allotment of House No. 61/31 cannot be accepted on the simple ground that Smt. [ENTITY] was not made a party in the writ petition. Otherwise also, Smt. [ENTITY] was entitled to get a house in Parijat Scheme as houses in that scheme were constructed by the Board from the funds made available by the registered applicants. Therefore, it is just and proper that a direction be given to the respondent Board to allot house No. 86/181 or any other house of the same or similar pattern as House No. 61/31 at the same cost as it was charged from Smt. [ENTITY]. The petitioner cannot be charged increased cost of Rs. 3,24,825/- as estimated by the Board for House No. 86/181 for the fault/lapses on the part of its officers. Further, the petitioner is also entitled to getcompensation by way of interest on the amount which was deposited by him from the date he was deprived to get the house. In the booklet issued by the Board in relation to self-financing Parijat Scheme, it has been provided that if the Board fails to deliver possession of the house within two years from the date of registration it will pay 6% interest to the applicant for the excess period of two years taken by it in delivering possession of the house. On the contrary, if the cost price of the house exceeds the estimated price then the Board is entitled to charge 16% interest on the excess amount from HIG applicants and 15% interest per annum from MIG applicants. 6% interest is to be given by the Board if the delay was in the normal course in construction of houses. Here delay in providing a house to the petitioner is due to the lapses/negligence on the part of the officers of the Board. There is no reason as to why the petitioner should be compensated adequately by way of interest at the rate which is normally charged by the Bank or in any case which could be charged by the Board from the applicants. In my considered opinion, award of 15% interest to the petitioner by way of compensation on the total amount deposited by him from 1 -4-1992 till the house is delivered to him as per direction of this court would be just and proper.
The net result of the above discussions is that the writ petition succeeds and it is hereby allowed. The respondents are directed to allot House No. 86/181 or any other house of the same or similar pattern to that of House No. 61/31 in Sector No. 6 Mansarovar Scheme to the petitioner at the same cost which was charged from Smt. [ENTITY] i.e. Rs, 1,78,200/-. The respondent Board shall also pay 15% interest to the petitioner on the whole amount deposited by him from 1 -4-1992 tilt the house is allotted and possession is delivered to him. The respondent shall also pay Rs. 2,000/- as costs to the petitioner.
However, it is made clear that the Chairman of the Board shall be free to hold an inquiry in the entire matter and if any officer/employee is held responsible for deliberate negligence/lapses, he shall take disciplinary action against him, including the realisation of amount of loss suffered by the Board in the matter.