* HIGH COURT OF DELHI AT NEW DELHI + LPA No.168-169-2006 & Other connected Appeals WP(C) No.2040/2007, WP(C) No.4882/2007, WP(C) No.4940/2007 % Date of Decision: 18 th March, 2008 1. LPA 168/2006 GOVERNMENT OF NCT OF DELHI TROUGH COMMISSIONER OF INDUSTRIES …….APPELLANT Versus BHUSHAN KUMAR & ANOTHER ……RESPONDENTS 2. LPA 141/2006 DSIDC & ANOTHER …….APPELLANTS Versus SANDEEP SETHI ……RESPONDENT 3. LPA 143/2006 DSIDC & ANOTHER …….APPELLANTS Versus NARESH KOHLI ……RESPONDENT 4. LPA 145/2006 DSIDC & ANOTHER …….APPELLANTS Versus ASHOKA INDUSTRIES ……RESPONDENT (LPA 168/2006 & connected matters) Page 1 of 37 5. LPA 147/2006 DSIDC & ANOTHER …….APPELLANTS Versus RAJENDRA KUMAR GOENKA ……RESPONDENT 6. LPA 149/2006 DSIDC & ANOTHER …….APPELLANTS Versus M/S. PRAMOD KUMAR ……RESPONDENT 7. LPA 151/2006 DSIDC & ANOTHER …….APPELLANTS Versus DIAMOND RUBBER UDYOG ……RESPONDENT 8. LPA 153/2006 DSIDC & ANOTHER …….APPELLANTS Versus MOHD. IRSHAD ……RESPONDENT 9. LPA 155/2006 DSIDC & ANOTHER …….APPELLANTS Versus JAIN GRINDING WORKS ……RESPONDENT (LPA 168/2006 & connected matters) Page 2 of 37 10. LPA 159/2006 DSIDC & ANOTHER …….APPELLANTS Versus RAM BILAS ……RESPONDENT 11. LPA 163/2006 DSIDC & ANOTHER …….APPELLANTS Versus GHAI MINING TOOLS CO. P.LTD ……RESPONDENT 12. LPA 166/2006 DSIDC & ANOTHER …….APPELLANTS Versus BHARAT INDUSTRIES ……RESPONDENT 13. LPA 170/2006 DSIDC & ANOTHER …….APPELLANTS Versus PREM KUMAR MALIK ……RESPONDENT 14. LPA 172/2006 DSIDC & ANOTHER …….APPELLANTS Versus HEMANT KUMAR ……RESPONDENT (LPA 168/2006 & connected matters) Page 3 of 37 15. LPA 174/2006 DSIDC & ANOTHER …….APPELLANTS Versus DEEP AUTO COLOURING WORKS ……RESPONDENT 16. LPA 176/2006 DSIDC & ANOTHER …….APPELLANTS Versus GARG INDUSTRIES ……RESPONDENT 17. LPA 178/2006 DSIDC & ANOTHER …….APPELLANTS Versus SACHDEVA PLASTICS ……RESPONDENT 18. LPA 180/2006 DSIDC & ANOTHER …….APPELLANTS Versus BHIKAR LAL PANCHAL ……RESPONDENT 19. LPA 182/2006 DSIDC & ANOTHER …….APPELLANTS Versus SKYLARK ENGINEEERING WORKS ……RESPONDENT (LPA 168/2006 & connected matters) Page 4 of 37 20. LPA 184/2006 DSIDC & ANOTHER …….APPELLANTS Versus S.D. ENGINEERING WORKS ……RESPONDENT 21. LPA 186/2006 DSIDC & ANOTHER …….APPELLANTS Versus P.L. BAJAJ ……RESPONDENT 22. LPA 1050/2006 DSIDC & ANOTHER …….APPELLANTS Versus SUBHASH KHURANA ……RESPONDENT 23. LPA 1119/2006 DSIDC & ANOTHER …….APPELLANTS Versus VIJAY PRINTERS ……RESPONDENT 24. LPA 161/2006 DSIDC & ANOTHER …….APPELLANTS Versus PVC COMPOUND & FOOTWEAR MANUFACTURERS ASSOCIATION …RESPONDENT (LPA 168/2006 & connected matters) Page 5 of 37 25. LPA 348/2006 DSIIDC & ANOTHER …….APPELLANTS Versus NIKHIL GROVER ……RESPONDENT 26. WP(C) 2040/2007 PREM CHAND BANSAL …….PETITIONER Versus GOVT. OF NCT OF DELHI & ORS ……RESPONDENTS 27. WP(C) 4882/2007 PRRAVEEN KUMAR GARG …….PETITIONER Versus GOVT. OF NCT OF DELHI & ORS ……RESPONDENTS 28. WP(C) 4940/2007 SALIM AHMED …….PETITIONER Versus GOVT. OF NCT OF DELHI & ORS ……RESPONDENTS Counsel for the parties:Ms.Anusuya Salwan with Ms.Monika Sharma, Advocates for DSIDC Ms.Meenakshi Singh, Advocate for the Director of Industries Mr.Rajat Aneja, Advocate for the respondent in LPA 170/2006 (LPA 168/2006 & connected matters) Page 6 of 37 Mr.R.K.Tyagi, Advocate for the respondent in LPA 147/2006 Mr.K.K.Aggarwal, Advocate for the respondent in LPA 186/2006 Mr.M.P.Sharma, Advocate for the respondent in LPA 149/2006 Mr.Lalit Bhardwaj, Advocate for the respondent in LPA 163/2006 Mr.Jeevan Prakash, Advocate for the respondent in LPA 155, 176/2006 Mr.Sanjay Rastogi, Advocate for the respondent in LPA 178/2006 Mr.Punit Budhiraja, Advocate for the respondent in LPA 172/2006, 178/2006 Mr.Sunil Goel with Mr.Sushil Bhartiya, Advocates for the respondent in LPA 161/2006 & for the petitioner in WP(C) Nos.2040/07, 4882/07, 4940/07 Mr.Rajiv Chhibber with Ms.Suruchi Dawar for the respondent No.3 in WP(C) 4940/07 Mr.Amandeep Joshi, Advocate for respondent No.1 in WP(C)2040/07 Mr.P.Chakraborty, Advocate for the respondent in LPA 168/06, 174/06, 186/06 Mr.Praveen Jain, Advocate for the respondent in LPA 141/2006 Mr.Arya Girdhar, Advocate for the respondent in LPA 143/2006 Mr.V.K.Kalra, Advocate for the respondent in LPA 172/2006, 178/2006 Mr.S.C. Gupta, Advocate for the respondent in LPA 1119/2006 Ms.Rachna Gautam for Ms.Sujata Kashyap, Advocate for GNCTD in WP(C) No.488/2007, WP(C) 4940/2007 Mr.Jayant Tripathi, Advocate for the respondent in LPA 159/2006 (LPA 168/2006 & connected matters) Page 7 of 37 CORAM: HON’BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether reporters of local papers be allowed to see the judgment ?yes 2. To be referred to the Reporter or not ?yes 3. Whether the judgment should be reported in the Digest ?yes DR. MUKUNDAKAM SHARMA, CJ 1.Since the issues raised in all these appeals are similar, we propose to dispose of the same by this common judgment and order. 2.Three writ petitions having similar issues, filed before the learned Single Judge, were referred to us for consideration and disposal along with the present appeals. Accordingly these three writ petitions are also disposed of by this judgment and order. 3.Judgment and order dated 8th December, 2005 passed by the learned Single Judge, whereby the writ petitions filed by the respondents herein were allowed, is under challenge in these appeals. As LPA No.168-69/2006 has been taken as the lead case, facts of the said appeal are taken as illustrative. 4.Pursuant to the directions issued by the Supreme Court in a Public Interest Litigation being WP(C) No.4677/85 (PIL) titled M.C. (LPA 168/2006 & connected matters) Page 8 of 37 Mehta v. Union of India for shifting of industries from non- conforming areas, in 1996, the Department of Industries, Government of NCT of Delhi, the appellant herein, invited applications from industrial units situated in non-conforming areas for allotment of industrial plots for relocating their industrial units, in terms of a scheme formulated by it. On 26th December, 1996 vide application No.195 the respondent applied for a plot measuring 400 sq.mtrs. under the said Scheme and deposited 10% of the total cost of the 400 sq.mtrs plot @ Rs.3,000/- per sq. mtr. Vide letter No.DSIDC/RL CELL/i/98 dated 3rd April, 1998 DSIDC communicated to the respondent that he has been found provisionally eligible for allotment of an industrial plot measuring 250 sq.mtrs under the re-location scheme and was asked to pay 30% of the cost of the plot within sixty days from the date of issue/receipt of the said letter. Relevant clauses of the said letter read as under: “(2) Based on preliminary scrutiny, your unit has been found to be provisionally eligible for allotment of an alternative industrial plot measuring 250 sq.mtrs.” (4) This is provisional eligibility letter will not confer upon any right or claim seniority for allotment of industrial plot. Actual allotment will (LPA 168/2006 & connected matters) Page 9 of 37 be in accordance with the policies/guidelines framed by the Government governing priority of relocation depending upon availability of developed land, nature of industry to be relocated etc.” Accordingly the respondent deposited Rs.94,500/-. 5.Thereafter, vide letter No.DSIDC/RLF/195/PLOT dated 10th October, 2000 DSIDC declared the respondent allottee of industrial plot No.281, measuring 250 sq.mtrs, in Sector-I, Pocket-N in Bawana Industrial Area and directed the respondent to deposit 50% of the total revised estimate cost of the plot which was revised to Rs.4,200/- per sq.mtr.. The same was deposited by the respondent. Vide letter dated 25th September, 2001 DSIDC directed the respondent to deposit the balance 50% of the cost of the plot and to collect possession letter after completing requisite legal formalities. Subsequently, on 19th December, 2001 DSIDC informed the respondent that the aforesaid plot measuring 250 sq.mtrs was ready for possession. Thereafter, when DSIDC did not hand over the possession, the respondent approached this Court by filing a writ petition. 6.In reply, DSIDC stated that the possession of the plot could not be handed over to the respondent herein as on scrutiny of (LPA 168/2006 & connected matters) Page 10 of 37 respondent’s file and application it was found that the area occupied by the unit of the respondent was 100 sq.yards only while he had applied for 400 sq.mtrs under the re-location scheme. It was stated that the Government of Delhi on the basis of the Cabinet decision/policy directed the DSIDC to review the cases on the basis of the criterion that the size of the plots recommended should not exceed double the area presently occupied by the unit, (rounded to the nearest size of the plot being offered and subject to minimum of 100 sq.mtrs), therefore the respondent was not eligible for 250 sq.mtrs plot but only for a plot measuring 150 sq.mtrs. It was also stated that before DSIDC could intimate the respondent that his present allotment has been cancelled in terms of the Cabinet decision and he is only entitled to a plot measuring 150 Sq.mtrs., he approached the High Court by filing the writ petition. The stand of the DSIDC before the learned Single Judge was that the Government of NCT of Delhi had altered the policy at their end and the respondents herein could not have objected to the revised terms of allotment and as sufficient land was not available to allot to all the applicants downsizing of the plots has taken place. It was also contended (LPA 168/2006 & connected matters) Page 11 of 37 that since the relocation scheme was a policy, it did not attain immutability or irrevocability and a policy of this genre could always be modified if public interest so dictated. 7.The main argument of the respondents herein was that the allotment of plots having been made on receipt of full payment in respect of the said plots by DSIDC, a concluded contract had come into existence which would remain impervious to any so-called change in policy. The learned Single Judge after hearing arguments, allowed the writ petitions filed by the respondents herein. It was held by the learned Single Judge that the distinguishing feature of the present cases is the coming into effect of a concluded contract and that the DSIDC had recorded in their letters that firm allotment of plots had taken place. The learned Single Judge agreed with the argument of the respondents herein that the only tentative characteristic of the transaction was the price and not allotment of the plot or its dimensions, and held that no inchoate or tentative aspect of the contract existed at the time when DSIDC attempted to cancel the respective allotments. The learned Single Judge directed the DSIDC to hand over possession of the plots allotted earlier to the respondents herein (LPA 168/2006 & connected matters) Page 12 of 37 within fifteen days from the date of the judgment. 8.Aggrieved by the said judgment, the appellants filed the present appeals, on which we have heard the learned counsel appearing for the parties. 9.The learned counsel appearing for the DSIDC contended before us that the learned Single Judge erred in holding that a concluded contract has come into being subsequent to the dispatch of letters of allotment. It was contended that in the present case the question of concluded contract would not arise as the scheme under which the petitioners were held entitled to allotment was a beneficial scheme and no allottee could take benefit of a wrong committed by getting more than his entitlement. It is also submitted that the scheme under which the allottees were given allotment letters could not have been lost sight of and in case where the State largesse is being granted no one could avail benefit of more than what was his entitlement and therefore it was not a case of pure and simple contract between the government and the allottee but a case where, under a beneficial scheme, the parties were being granted plots of land for purpose of their relocation. (LPA 168/2006 & connected matters) Page 13 of 37 10.It was the contention of the learned counsel appearing for the respondents that as the offer of allotment was accepted by the respondents and full payment in terms thereof was made, the contract was concluded and neither the Government of NCT of Delhi nor the DSIDC could refuse to perform their part of the contract and wriggle out of the same. It was further contended that though they are not denying that a policy can be changed in exercise of administrative/executive power but it cannot have retrospective effect to adversely affect the vested right of a party under a concluded contract. 11.We have perused the issues and contention raised by both the parties and now we proceed to consider them accordingly. 12.After issuance of the advertisement inviting application for allotment of industrial plots under relocation scheme, in March 1998 implementation of the relocation scheme was entrusted to the DSIDC. The Commissioner of Industries, Government of NCT of Delhi, sent a list of 8831 industrial units and advised DSIDC to issue provisional eligibility letters. Accordingly, the DSIDC issued provisional allotment letter in March/April 1998 whereby the provisional allotment was made on the basis of norms of eligibility. (LPA 168/2006 & connected matters) Page 14 of 37 One of such norms relevant for adjudication of the present case is reproduced below for reference: “ (10) As regards the entitlement of land of individual eligible units the following decision has been taken by the Cabinet. (a) no cuts in respect of units requiring upto 100 sq.mtrs of land. (b) 25% cut in the case of plot size measuring from 101 to 200 sq.mtrs subject to minimum size of plot being retained at 100 sq.mtrs. (c ) 30% cut with regard to plots measuring from 201 to 300 sq.mtrs. and (d) 30% cut with regard to plots measuring from 301 to 400 sq.mtrs.” 13.In the Note for Council of Ministers date 4/7th June, 1998 it was, inter alia, stated that after preliminary scrutiny, final scrutiny of applications has been done at the level of Joint Directors of industries/Dy.Directors of Industries. At Clause 5(vii) it was mentioned that possession of only 1080 acres of land out of the original 1300 acres of land identified for acquisition has been taken as the remaining land is under heavy built-up structures. Additional land is required to be identified within the notified urban extension, availability of which is very limited. It is further stated that keeping in view the limited availability of land within the (LPA 168/2006 & connected matters) Page 15 of 37 notified urban extension, it is felt that applicants requiring plots measuring more than 400 sq.mtrs should either be asked to shift out from Delhi to the National Capital Region and the earnest money deposited by them be returned along with promised interest @7% or else they should undertake in writing to accept a plot of size measuring 250 sq.mtrs and effect necessary change in industrial activity. Further, under the paragraph ‘clarifications on various points which came up during scrutiny of applications were sought from the ‘land and flat allotment committee” at clause (c ) it is stated as under: “During scrutiny, it has been observed that some of the applicants are at present functioning from much less area as compared to the area applied. It was decided that the size of the plot recommended in such cases should not exceed more than double (rounded to the nearest lower size of plot being offered and subject to minimum of 100 sq.mtrs) the area presently being used for industrial purposes. However, no such restriction shall be imposed in respect of applicants who have applied for industrial flats. Since no such condition had been imposed by the Cabinet while deciding the eligibility criteria, it was decided that this decision may be got ratified by the Cabinet.” 14.Subsequently, Commissioner of Industries issued a public notice dated 14th July, 1999 wherein it was stated that in response to the advertisement 51,851 applications were received and all the said (LPA 168/2006 & connected matters) Page 16 of 37 applications have been scrutinized to determine the eligibility of individual applicants on the basis of guidelines approved by Government of Delhi. It was also stated in the said public notice that the basic criteria in determining eligibility was documentary proof of establishment of the unit before 19th April, 1996, which was the date of the order of the Supreme Court. It was also stated that where documentary proof was not available on file, proprietors of units were called for personal hearing by the Scrutiny Officers. In the said public notice it was inter alia stated that the units which have applied for industrial plots measuring more than 400 sq.mtrs will be offered a plot measuring maximum of 250 sq.mtrs. Condition or term that size of the plot shall not exceed more than double of the existing area presently being used was not mentioned. 15.By letter dated 20th July, 1999 the Department of Industries, Government of NCT of Delhi, addressed to the Managing Director, DSIDC, referring to the Cabinet Meeting held on 7th June, 1999 and 3rd meeting of the High Powered Project Implementation Committee in respect of relocation scheme, it was further informed that the size of the plot recommended should not (LPA 168/2006 & connected matters) Page 17 of 37 exceed double the area presently occupied by the unit. The said clause is as under: “(v) The size of the plots recommended should not exceed double the area presently occupied by the unit. However, no such distinction is imposed in case of flats”. 16.In the additional affidavit filed on behalf of the DSIDC in the writ petition, it was stated that in terms of the directions of the Supreme Court dated 12th September, 2000, draw of lot was held on 3rd October, 2000. It was also stated that out of 18355 allottees who had been allotted plots in pursuance of the the said draw and subsequent draw of lots, it was found that in 521 cases the area allotted was more than the actual entitlement as per the decision taken by the Cabinet. Accordingly, the said allottees were issued letters of cancellation of the plots and names and applications of 387 units who had paid 100% cost of the plots were put in the fresh draw of lots held on 6th June, 2003. After downsizing the area of plot, the excess payment had been refunded to most of the allottees. It was also stated that downsizing of the plots was done so as to implement the policy on a uniform basis and there is nothing arbitrary or illegal in the same. 17.In the rejoinder to the reply filed by the DSIDC in the writ (LPA 168/2006 & connected matters) Page 18 of 37 petition, the petitioners alleged that they have been discriminated vis-a-vis those persons to whom possession of the plots were given prior to taking of the impugned action inasmuch as their allotments were not cancelled. The argument was that though the petitioners had also deposited the entire cost of the plots, but since plots were not handed over to them, their allotments were cancelled for effecting the downsizing. It was also contended that nothing prevented the DSIDC from informing the petitioners in the year 1998/1999 itself that a decision was taken not to allot plot size of more than double of the area presently occupied by a unit. The DSIDC kept collecting the money from the respondents till December, 2002. 18.One of the points which was also raised by the respondent was that though on 10th October, 2000 he was informed that he has been allotted a plot bearing No.281, Sector-I, Pocket-N Bawana Industrial Complex which was three side open corner plot but subsequently he was informed that his plot is in Pocket-O instead of Pocket-N, the former being only a two side open plot. As the said issue was not pressed before the learned Single Judge and also before us, we are not commenting on the merits of the same. (LPA 168/2006 & connected matters) Page 19 of 37 19.The initial allotment letter dated 3rd April, 1998 did not confer any vested right on the respondent to claim allotment of a plot measuring 250 sq.mtrs as it specifically stated that the respondent was only provisionally eligible for the said allotment, but by subsequent final allotment by letter dated 10th October, 2000, specifically stating the size and number of the plot, the provisional status came to an end. 20.The respondents have contended that after issuance of final allotment letter and on receipt of full payment thereof a concluded contract came into existence which would remain impervious to any so called change in the policy as a policy cannot be given retrospective effect. From the aforesaid it is clear that before the issue of final allotment letter dated 10th December, 2000 the allotment of the plot was only provisional and no right to claim the plot measuring 250 sq.mtrs accrued to the respondents. The Cabinet decision/policy on which the appellant is placing reliance was in the knowledge of the appellant much before the final allotment was made as the same was communicated to DSIDC on 20th July, 1999. Thus the question of retrospective effect of the Cabinet decision/policy does not arise in the present case as the (LPA 168/2006 & connected matters) Page 20 of 37 final allotment was made much after the Cabinet decision/policy came into effect. 21.Coming to the contentions raised by the appellant-DSIDC, we find that they have alleged that the downsizing has been done keeping in mind the fact that there is scarcity of land and the said action, therefore, is in public interest. It is worth mentioning that all the the said allotments were made specifically mentioning the area and property number allotted to the applicant. The said contention raised by the appellant-DSIDC will not hold good in the light of the fact that if the allotment is made specifically mentioning the area and property number, it can be prima facie inferred that before earmarking the land, the DSIDC would have on paper divided the total available land among all the eligible applicants, as per their respective entitlement, whether in excess or otherwise. Also the factor that there was shortage of land was considered in the year 1998 itself when instead of 400 sq.mtrs for which the respondent had applied he was informed that a plot measuring maximum 250 sq.mtrs can be allotted to the respondent or to the other applicants and the said factor is also evident in the public notice dated 14th July, 1999. It has also been (LPA 168/2006 & connected matters) Page 21 of 37 brought to the notice of this Court by the respondents that DSIDC has advertised for auction of commercial plots at Bawana Industrial Complex. One such advertisement produced in the Court highlights that approximately 20000 industrial plots are available for auction which would take place on 30th December, 2006. Thus, the contention of the respondent that the said allotments were cancelled only because there was shortage of land and therefore it was in public interest to downsize the allotments is unacceptable in the light of the aforementioned advertisement. 22.Another contention of the DSIDC was that the cancellation was in consonance with the Cabinet decision/policy. It is pertinent to note that the said Cabinet decision/policy was in existence at the time when the final allotments to the respondent and other applicants were made and it was the DSIDC itself who has totally undermined the Cabinet decision/policy and made allotments contrary to the Cabinet decision/policy which is binding on it. The said act of the DSIDC shows gross negligence on the part of the DSIDC in making allotments of the said plots. The Cabinet decision/policy was of the year 1999, allotment was made in 2000 but the mistake could only be detected in the year 2003 (LPA 168/2006 & connected matters) Page 22 of 37 after receiving full payment for the said plot and communicating that the said plot is ready to be handed over to the allottee. It may also be noted that the DSIDC have themselves stated that before allotment each and every application was scrutinised and only after the said scrutiny if the applicant was found eligible only then the allotment was made. The same is evident from the Note for Council of Ministers date 4/7th June, 1998 wherein it was, inter alia, stated that after preliminary scrutiny, final scrutiny of applications has been done at the level of Joint Directors of industries/Dy.Directors of Industries. We fail to understand that how come in as many as 521 cases even after such checks the