IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.2677 of 2008 Date of decision: 12th November, 2009 Babbar Bhan and another … Petitioners Versus State of Haryana and others … Respondents Civil Writ Petition No.3870 of 2008 Surinder Kumar Sharma and others … Petitioners Versus State of Haryana and others … Respondents Civil Writ Petition No.3915 of 2008 Keshav Kumar Bansal … Petitioner Versus State of Haryana and others … Respondents CORAM: HON’BLE MR. JUSTICE T.S. THAKUR HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. Vinod S. Bhardwaj, Advocate for the petitioners. Mr. Randhir Singh, Additional Advocate General, Haryana for the State. Mr. Ashok Aggarwal, Sr. Advocate with Mr. Amit Aggarwal, Advocate. Mr. Ajay Kumar Kansal, Advocate for respondents No.2 to 4. Mr. Aman Pal, Advocate for respondents No. 15 and 25. Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 Mr. Raj Mohan Singh, Advocate for respondents No.5 and 31. Mr. B.R. Gupta, Advocate for respondents No.6 and 34. Mr. Raman Chawla, Advocate for respondent No.9. Mr. Sudhanshu Makkar, Advocate for respondents No.10 and 18. Mr. Dilbagh Singh, Advocate for respondents No.11 and 23. Mr. Arun Sehgal, Advocate for respondent No.16. Ms. Sandeepa Mehta, Advocate for respondent No.19. Mr. D.S. Malik, Advocate for respondents No.20 and 33. Mr. Haripal Verma, Advocate for respondent No.22. Mr. Jitender Nara, Advocate for respondent No.35. Mr. Kamal Sehgal, Advocate for respondents No.17 & 40 to 42. Ms. Nisha Goel, Advocate for Mr. D.S. Bali, Sr. Advocate. Mr. Sanjay Vashisth, Advocate for respondent No.8. Notes: 1. Whether Reporters of local newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? KANWALJIT SINGH AHLUWALIA, J. Three writ petitions filed in this Court, question the allotment of industrial plots in Industrial Estate, Bhiwani to the successful allottees, on the ground that the same are vitiated by nepotism, favouritism and total lack of a fair and transparent procedure that could ensure fairness and objectivity. It is alleged that the successful allottees are relatives/friends and protégé of politicians and bureaucrats. They had, therefore, succeeded in getting the allotment, not on the basis of merit but because authorities allowed them to steal march over the better candidates available. This, according to the petitioners, amounts to 2 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 distribution of largesse, as the recipient of plots were less meritorious and no comparative criteria to evaluate claim of all those, who applied for allotment of plots, has been followed. It is prayed that since the entire allotment stands vitiated, the allotment letters issued be cancelled and an inquiry be ordered. Petitioners’ challenge to the mode of allotment, questioning the procedure followed by the authorities, makes it imperative for us to first notice the broad parameters laid by the Hon’ble Supreme Court regarding distribution of public property to private individuals, so that on the touchstone of the same, we are able to evaluate the allotment of plots made, in the factual backdrop pleaded in these writ petitions. The principle that the government while entering into contracts or distributing public largesse cannot act arbitrarily has been emphasized by the Supreme Court in a number of landmark decisions such as ‘Ramana Dayaram Shetty v. International Airport Authority of India’ (1979) 3 SCC 489 and ‘Kasturi Lal Lakshmi Reddy v. State of J & K’ (1980) 4 SCC 1. After discussing the entire conspectus of law, it was held by the Supreme Court in ‘New Horizons Ltd. v. Union of India’, (1995) 1 SCC 478 that “7. At the outset, we may indicate that in the matter of entering into a contract, the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State, in exercise of its various functions, is governed by the mandate of Article 14 of the Constitution which excludes arbitrariness in State action and requires the State to act fairly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion. Moreover a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter 3 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection. The decisions of this Court, therefore, insist that while dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any person it pleases, but its action must be in conformity with the standards or norms which are not arbitrary, irrational or irrelevant. It is, however, recognised that certain measure of “free play in the joints” is necessary for an administrative body functioning in an administrative sphere.” It has been held in the case of ‘Sachidananda Pandey v. State of W.B.’ (1987) 2 SCC 295 that: “On a consideration of the relevant cases cited at the bar the following propositions may be taken as well established: State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public opinion is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism.” 4 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 Similar observation have been made in the case of ‘Haji T.M. Hassan v. Kerala Financial Corporation’ (1988) 1 SCC 166 wherein it was held that: “The public property owned by the State or by any instrumentality of the State should be generally sold by public auction or by inviting tenders. This Court has been insisting upon that rule, not only to get the highest price for the property but also to ensure fairness in the activities of the State and public authorities. They should undoubtedly act fairly. Their actions should be legitimate. Their dealings should be aboveboard. Their transactions should be without aversion or affection. Nothing should be suggestive of discrimination. Nothing should be done by them which gives an impression of bias, favouritism or nepotism. Ordinarily these factors would be absent if the matter is brought to public auction or sale by tenders.” The perusal of the aforesaid decisions makes it clear that whenever public property is distributed the same has to be ordinarily done by public auction or inviting tenders. The deviance from this rule ipso facto is not illegal but nothing should be done which gives as an appearance of bias or nepotism. As a matter of fact it has been held in the case of ‘Netai Bag v. State of W.B.’, (2000) 8 SCC 262 that: “There cannot be any dispute with the proposition that generally when any State land is intended to be transferred or the State largesse decided to be conferred, resort should be had to public auction or transfer by way of inviting tenders from the people. That would be a sure method of guaranteeing compliance with the mandate of Article 14 of the Constitution. Non-floating of tenders or not holding of public auction would not in all cases be deemed to be the result of the exercise of the executive power in an arbitrary manner. Making an exception to the general rule could be 5 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 justified by the State executive, if challenged in appropriate proceedings.” The principles of law propounded above by the Hon’ble Apex Court can be summed up as under: (a) The State ought to dispose of public property by way of public auction or by inviting tenders as an ordinary rule. But if the State chooses to act otherwise, it has to act fairly and reasonably and action of the State must exclude arbitrariness; (b) In case the State opts to make an exception to the general rule of disposing the property through public auction or by inviting tenders, the procedure followed should be so transparent that it overrules an impression of bias, favourtism or nepotism; (c) In all the cases, where the general rule (sale through public auction or by invitation of tenders) is not adhered to, it must be in consonance with the criterion, which satisfies the expectation that the same is fair and reasonable. (d) The criteria should be pre-determined and published to rule out the allegation of any bias. It is now time to state the facts. Civil Writ Petition No. 2677 of 2008 has been filed by two advocates. They have filed this writ petition purportedly in public interest. Civil Writ Petition No.3870 of 2008 has been filed by Surinder Kumar Sharma, Smt.Sarita Sharma and Ajay Kumar. They have pleaded that they are industrialists in their own right, having requisite experience and 6 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 had applied for the allotment of ½ acre plots by depositing the earnest money, but they could not succeed as respondents No.5 to 30 were well connected and had a say in the corridors of power. Civil Writ Petition No. 3915 of 2008 has been filed by Keshav Kumar Bansal. He is an industrialist, who appears to have applied for allotment of a 2 acre plot. His grievance and prayer for seeking cancellation of allotment of plots to the successful allottees is no different from that of the petitioners in other two writ petitions. For facility of reference, facts are gathered from Civil Writ Petition No. 2677 of 2008, as on all important aspects, i.e., facts and law, submissions made, all the three writ petitions are similar. Haryana Urban Development Authority published a brochure offering freehold industrial plots at Roj-Ka-Meo, Hathin, Bahadurgarh, Hisar and Bhiwani. The booking had to commence from 3rd August, 2007. Since all the three writ petitions have assailed the allotment of plots at Bhiwani only, no reference is required to be made qua other Industrial Estates. As per the chart, which formed part of the brochure, one plot of 2 acre, 22 plots of ½ acre and 4 plots of ¼ acre were to be allotted at the rate of Rs.770/- per square meter. For 2 acre plot Rs.6,31,400/-, for ½ acre plot Rs.1,57,850/- and for ¼ acre plot Rs.78,925/- were to be deposited as earnest money along with the application form. The brochure describes Bhiwani as a fast developing industrial commercial town of Haryana, known for its temples and textiles. Bhiwani, being the district headquarter, is also headquarter of Haryana School Education Board. It is situated at a distance of 125 kms from Delhi and 50 kms from Rohtak and is equipped with all basic infrastructure facilities and public utilities like, General Hospital and a Mini Secretariat. The close proximity of Bhiwani to Delhi had enhanced the value of plots available. 7 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 The procedure for allotment of plots published in the brochure reads as under: “Mere submission of an application would not necessarily entitle an application for allotment. Allotment of plot will be after due assessment of the application/project report & on basis of individual merits/financial capabilities of entrepreneurs. The applications received shall be scrutinized and applicants interviewed by the Allotment Committee, and thereafter, the allotment shall be made in favour of the recommendee with approval of the Competent Authority.” According to the brochure, preference was to be given to the entrepreneurs belonging to the category of ex-servicemen, women, unemployed engineering graduates/ Polytechnic/ ITI trained candidates, oustees of that sector and expansion/ shifting of existing units. Copy of the brochure is attached as Annexure P-2. It is stated in the writ petitions that respondents No.5 to 30 have been allotted plots solely on the ground that they were related to the people in prominence, which included Members of Legislative Assembly and senior Bureaucrats, constituting the ruling clique. Petitioners have enumerated the instances to prove this contention. These can be summed up as under: (a) That the single plot measuring 2 acres was allotted to Kamla Bhardwaj respondent No.4. She was in Government service till the application form was filed. The petitioners have stated that the allottee was the wife of Shiv Shankar Bhardwaj, a sitting Member of Legislative Assembly from Bhiwani constituency. 8 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 (b) Naresh Aggarwal respondent No. 6 was allotted 1 acre plot. Petitioners aver that he had applied for 2 acre plot for allotment to Chinar Multi Feb India Limited. There was no category of 1 acre plot in the brochure. Naresh Aggarwal had also applied for 2 plots of ½ acre each for allotment of the same to a company named Parshotam Dass Naresh Kumar Pvt. Ltd. 1 acre plot was not allotted to this company but to Chinar Multi Feb India Limited. Naresh Aggarwal is stated to be grandson of Ram Bhajan Aggarwal, who is former Home Minister and had also held the portfolio of Tourism Minister in the State of Haryana. 1 acre plot was not available in any category, but, was specially created to accommodate the said respondent by clubbing two plots. Furthermore, it is alleged that Naresh Aggarwal was ineligible for the allotment of plot, as earlier 2 plots allotted to him bearing No. 241 and 242 were resumed for non- payment of the installments. Therefore, from his conduct, authorities could not infer that he was having sound financial credentials. (c) A ½ acre plot was allotted to Dalsher Singh respondent No.13, who is nephew of Dharambir Singh, the Chief Parliamentary Secretary and Member of Legislative Assembly. According to the petitioners, it is perceived in large circles that this was a benami allotment to Dalsher Singh. In fact, the beneficiary was Dharambir Singh. (d) Another ½ acre plot was allotted to Satyender Singh respondent No.20, who is nephew of Sombir Singh, Member of Legislative Assembly from Loharu constituency. 9 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 (e) Respondent No.17 Rani is related to Chhatarpal, Member of Legislative Assembly, as he is first cousin of her husband and it is stated that Rani belongs to a family of political influence, as her brother-in-law is the president of Vaish College, Bhiwani and engaged in active politics. (f) Respondent No.23 Suresh Tanwar is relative of Sandeep Tanwar, Secretary of Haryana Pradesh Congress Party. (g) R.K. Sachdev respondent No.25 is close relative of Rajiv Arora and Smt.Jyoti Arora. According to the petitioners, these husband and wife duo is posted as senior IAS officer in the State of Haryana. The petitioners have laid much emphasis on the assertion that all other successful allottees were allotted plots because their close relations or friends were in position to exercise influence in the corridors of power. Petitioners have made following averments: “3. (viii) That the petitioners have reliable information and strong reasons to believe that allotment that has been made in favour of Kishan Lal Jain – respondent No.29 for ¼ acre has been made because he was the class- fellow to Shri M.L.Tayal, IAS, presently posted as Principal Secretary to Chief Minister, Haryana. Shilpa Gupta (respondent No.30) daughter of Shri Jai Kumar Gupta, who has been allotted ¼ acre plot has been allotted the same for the reason that her father is a friend of Shri T.C. Gupta, IAS, (respondent No.38), who is also coincidently posted as Chief Administrator, Haryana Urban Development Authority, Hisar and was a member of the Allotment Committee. The petitioners have reasons to believe that allotment of plots in favour of Bhim Sain, respondent No.8 and Umed Singh, respondent No.26, have been made at the instance of Ram 10 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 Kishan “Fouji” (respondent No.35) who is a Member Legislative Assembly from Bawani Khera constituency and allotment in favour of Ajay Aggarwal, respondent No.12 is at the instance of Mange Ram Gupta, Minister of Transport and Education, State of Haryana. The petitioners have reasons to believe that various other allotments have been made for considerations other than merit and to persons who are enjoying the confidence of people in power. Resultantly, a scam of allotment of industrial plots is rampantly prevalent in the State of Haryana, which needs to be enquired into as the distribution of plots raises everything except confidence. It is difficult-nay-impossible to believe that the allotment in favour of people who are strikingly close to people in power, were on account of their suitability and eligibility for industrial plots on the strength of their merit.” The grouse of the petitioners is that a number of allotments made in favour of the relatives of politicians or bureaucrats are not co- incidental, but on the facts, it stands proved that the allotment was arbitrary and was not a result of any just criteria adopted. The petitioners state that rules of fairness and transparency have not been followed by the allotment committee. The officials of HUDA have been impleaded as respondents No.2 to 4. They have filed a joint reply, in which it has been submitted that HUDA has framed Estate Management Procedure (EMP-2005) under the industrial policy 2005 pronounced by the State Government. The Committee duly constituted under the Estate Management Procedure – 2005 considered the applications of all those persons who applied and made recommendations in favour of only those applicants, who were able to satisfy the Committee, regarding their financial resources, technical knowledge qua the project and genuineness of their 11 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 claim. It was submitted that Mrs.Kamla Bhardwaj respondent No.5, along with her other three partners, was allotted plot purely on merit and the Committee formulated a view that the applicant Mrs.Kamla Bhardwaj was fully capable to implement the project successfully and within the proposed time period. The allotment of 1 acre plot made to Naresh Aggarwal respondent No. 6 was sought to be justified on the ground that M/s Parshotak Dass Naresh Kumar Pvt. Ltd. is a sister concern of Chinar Multi Fab. India Limited and the Committee had unanimously decided to make allotment of 1 acre plot to Naresh Aggarwal by clubbing two plots of ½ acre size each. In their written statement filed, regarding the allotment made to Dalsher Singh and Satyender Singh, it has been stated as under: “3. (iii) That the applicant Dalsher Singh is a graduate and as per the information supplied is having 10 years of experiences in the field while associating with his family. However, the allotment has been made in favour of Dalsher Singh and after consideration of all the parameters laid in the Estate Management Procedure-2005. (iv) That the applicant Satyender Singh has been allotted a plot. It has been found by the committee that the applicant has enough basic technical knowledge, which was an essential feature for the successful implementation of the project. He was able to give suitable replies to the each and every query of the committee members to their satisfaction. The applicant has also enclosed copy of the Jamabandi for the year 2000-01, which shows property in his name in village Gagarwas. He has also enclosed copy of a sale deed of a plot at Bhiwani and therefore, stated that he can raise requisite resources. It is re-iterated that the experiences of the applicant is one of the preferential criteria but is not the only one. The purpose Industrial Policy-2005, is not only to facilitate the on going business activities but is also meant to 12 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 encourage young and enterprising persons to come ahead and to take part in the development of nation.” Similarly, in respect of other successful applicants, mentioned by the petitioners, the official respondents have taken a definite stand that the allotment of plots were made to the allottees on the ground that the Committee, after holding interview, was satisfied qua their claim and had recommended the allotment. Naresh Aggarwal respondent No.6, Rajiv Garg respondent No.16, Hem Lata respondent No.18, Satyender Singh respondent No.20, Suresh Tanwar respondent No.23, Sombir Singh respondent No.33 and Ram Bhajan Aggarwal respondent No. 34, by filing separate written statements, have categorically stated that the allotment made was on merit and the allegations of malafide have been falsely levelled. Ashok Kumar Aggarwal respondent No. 8 pleaded that he has got vast experience to set up an industry and he has been allotted plot, as the interview committee had approved the project report submitted by him. Bhim Singh Garg respondent No.9 has also claimed that his claim for allotment of the plot was solely based on merit and no help was extended by Ram Kishan ‘Fouji’ respondent No. 35, a sitting member of State Legislative Assembly. Ghansham Dass Gupta respondent No. 10 submitted that the allotment of plot was made after stringent procedure was followed and no favour was extended to him by any person. Ajmer Singh respondent No.11 has submitted that baseless and false allegations have been leveled. He was the deserving candidate for the allotment. 13 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 Ajay Aggarwal respondent No.12, in his counter-affidavit, denied that he was helped by Mange Ram Gupta, Minister for Transport and Education respondent No.43. Kailash Kumar Sharma respondent No.15 disputed the locus-standi of the petitioners to the writ petition No. 2677 of 2008 to file the writ petition in public interest. It was further submitted that he had a 30 years long experience in running industry and had invested his youth, capital as well as much hard-work in establishing and commissioning Steel-Fabrication Unit in the name of M/s Kaushik Industries, situated at Bamunimaidan, Industrial Area, Gauhati (Assam) and due to law and order problem created by extremist outfits such as ULFA, he was compelled to close his Fabrication Unit. Thereafter, he came to his native place at Bhiwani and applied for allotment of the plot. It has been further averred that he had spent Rs.8.00 lakh for the development work at the site of plot. He had paid the fee to the consultant also. It has been urged by him that the allotment was made in the most fair manner. This respondent has pleaded that he has got his firm registered with District Industrial Center, Bhiwani under the title of M/s Sharma Flour Mill and he has also obtained VAT number for his firm, M/s Sharma Flour Mill. Sanjay Kakkar respondent No.19 submitted that he is an entrepreneur manufacturing Polypropylene Multifilament Yarn and Tape since 2001 and therefore, his experience impressed the Committee to make allotment of the plot. Shivani Lachhiramka respondent No.22 also denied the allegations leveled in the writ petition. Bansi Lal respondent No. 24 submitted that on the basis of his individual merit and capabilities, allotment of plot was made, after his project report was evaluated and that he is in the process of setting up a 14 Civil Writ Petitions No. 2677, 3870 & 3915 of 2008 manufacturing unit of Pressure Cookers in the name of M/s Vishal Aluminum Manufacturing Co. at Noida. Shilpa Gupta respondent No. 30 submitted that she has got requisite experience in designing soft toys and therefore, she succeeded to allotment of the