Case: ANANT RAJ LTD. (FORMERLY M/S. ANANT RAJ INDUSTRIES LTD.) Vs. STATE OF HARYANA &amp; ORS

be the mechanism to be followed has also been referred to, but from where it has been originated and about its factual foundation has not been placed on record, despite the directions of this Court at the time of conclusion of submissions made. The extract of the explanation tendered is reproduced hereunder :- A. That in reply to sub para (A), it is submitted that though land applied for licence for setting up of a Group Housing Colony by the present petitioner and respondent no.1 to 3 was different, but as per the Final Development Plan of GMUC-2025 AD published vide notification dated 24.05.2011, the same was falling within the same sector i.e. Sector 63A, Gurugram. The licence was granted to the present petitioner on the basis of first come First Serve basis. However, licence application of respondent no.1 to 3 was rejected by respondent no.5 vide order dated 16.09.2011 mainly on the ground that some land applied for licence was not partitioned and that the land has not been mutated in favour of the applicant. Another ground for rejection was that the same was falling beyond the limits of the Development Plan of Gurugram Manesar Urban Complex-2021 AD. B. That in reply to sub para (B), it is submitted that the interim order dated 21.12.2013 passed by the Honble High Court was only to the extent that the area measuring 13.61875 acres for which respondent no.1 to 3 had applied for grant of licence for setting up of a Group Housing Colony will be reserved till the final conclusion of the legal proceedings. However, the licence of private respondents in CWP No.21942 of 2013 was cancelled by the Honble High Court vide impugned order by observing that the doctrine of first come First Serve basis was not fair and transparent. H. That in reply to the averments made in sub para (H), it is submitted that in the policy dated 19.12.2006, it was specifically mentioned that the area under Group Housing should not exceed 20% of the sector area. Though, it is not specifically stated in the said policy that the applications would be considered on first come First Serve, but the applications were considered on the basis of policy of first come First Serve basis. The seniority of the applicants for grant of licence for Group Housing Colony/Commercial Colony etc. (where there is cap for grant of licence) was fixed from the date of receipt of application. If the date of receipt was the same, then from the receipt number of the same date. Hence, it cannot be said that the time and date when the application for grant of licence was filed was not relevant. However, if the applicant whose application for grant of licence was received earlier, but was not eligible for grant of licence, the application received after the date of the receipt of the earlier application was considered for grant of licence. Hence, the averments made by the petitioner in this sub para cannot be accepted as such. 40. In our considered view, the principle of First Come First Serve basis which has been adopted by the State Respondents in the facts of the instant case is neither held to be rational nor in public interest and is in violation of Article 14 of the Constitution of India. 41. The submission made by counsel for the Appellant that their grant of licence was not the subject matter of challenge in the writ petition before the High Court is of no substance for the reason that firstly they were impleaded as party respondents and the subject issue under consideration was much known to them as to whether the so-called alleged practice of First Come First Serve basis which has been adopted by the State authorities for grant of licence, how far it was rational and is in conformity with the Scheme of the statute and secondly, the High Court after framing substantive question under its order dated 13th August, 2015 afforded opportunity of hearing to the Appellants who have filed their counter-affidavits and thereafter has arrived to a conclusion that the principle of First Come First Serve basis adopted in grant of licences is not a valid consideration, the only consequence available was to cancel such licence which have been granted based on the so-called alleged practice which is unsustainable in law and in our considered view no error was committed in passing the order of cancellation of grant of licence to the Appellants under the judgment impugned. 42. A further submission made by counsel for the Appellant that it is a consistent practice which was followed throughout and almost 248 licences had been granted under the policy in vogue at that time, in our considered view does not hold good for the reason that those who are not party to the proceedings before the High Court obviously no adverse action could have been taken against them pursuant to the view expressed by the High Court in the impugned judgment, at the same time the principle may apply to the present Appellants who are indeed parties to the proceedings and have contested their claim and have been non-suited after a fair opportunity of hearing being afforded, may not be in a position to defend their grant of licence on the principle of First Come First Serve basis which has been held to be unfair and in violation of Article 14 of the Constitution. 43. With regard to the further submission made by the counsel for Respondent nos.7 to 9 about rejection of their application for grant of licence, suffice it to say that once this Court has upheld the view expressed by the High Court regarding the procedure of allotment of licence based on the principle of First Come First Serve basis, as held against the Public Policy, at least Respondent nos.7 to 9 would not be in a position to plead for consideration of their applications for grant of licence under the impugned policy.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]30. The undisputed facts which have emerged from the record are that neither in the public notice dated 1st October, 2010 which came to be published on 4th October, 2010, nor in the Final Development Plan dated 24th May, 2011, nor in policy instructions which came to be circulated by the Respondents at a later stage on 5th July, 2012, regarding receipt and validity of the applications for grant of licence, of which a detailed reference has been made, nowhere prescribes that the method of allotment of licence shall be made on First Come First Serve basis and from where this practice had been borrowed/adopted by the Respondent/State authorities is alien to the Scheme of the 1975 Act or the 1976 Rules framed thereunder, nor any material in support thereof has been placed on record.31. Even at the time of conclusion of submissions, we posed this question to the counsel for the State of Haryana as to from where this principle of First Come First Serve basis for allotment of licence has been borrowed and what is the basis/foundation to hold it as a practice in inviting applications from the prospective applicants on the principle of First Come First Serve basis, but nothing has been placed on record despite opportunity being afforded to substantiate and to support it further, we find that the policy of the State Government for grant of licence and change of land use cases dated 19th December, 2006 which was made effective retrospectively from 7th February, 2005, is also completely silent and there is no material on record that after the policy of 2006 came to be introduced, at any given point of time in the interregnum the process was ever initiated by the Respondent nos.1 and 2 for grant of licence and change of land use before the publication of public notice dated 4th October, 2010.32. This Court can validly proceed on the basis that some impression has been thrown to examine the applications submitted by the interested parties/applicants pursuant to a public notice dated 4th October, 2010 for grant of licence and change of land use on the principle of First Come First Serve basis, but it is neither codified nor on record from where this practice has been developed and adopted by the Respondents in examining the applications for grant of licence. The entire Scheme placed on record is completely silent on the subject issue which came to be examined by the High Court under the impugned judgment.34. The very foundation on which the process was initiated, inviting applications pursuant to the public notice dated 4th October, 2010, on the principle of First Come First Serve basis is completely silent/missing from records and how that becomes an established practice in entertaining applications for grant of allotment of licence under the policy of the State Government dated 19th December, 2006, pursuant to which the public notice came to be published on 4th October, 2010 with a clarification being made of the policy of the Government dated 5th July, 2012 is alien to the records and it was never made known to the public as to the mechanism the Government intended to adopt for grant of licence to the prospective applicants.35. Although this factor cannot be ruled out that those who are interested parties, they were aware of this so-called alleged practice of First Come First Serve adopted in the office of the State Respondent and that was the reason for which even before the public notice dated 1st October, 2010 came to be published on 4th October, 2010, people start running for submitting their applications as if they are participating in the mad race, without being known to the people at large about the policy according to which the applications are invited for grant of licence to the prospective applicants which is a sine qua non for good governance.36. That apart, there is a fundamental flaw in the policy of the State of First Come First Serve basis as it involves an element of pure chance or accident and it indeed has inherent in-built implications and this factor cannot be ruled out as we have gone through the record, any person who has an access to the power corridors will be made available with an information from the Government records and before there could be a public notice accessible to the people at large, the interested person may submit his application, as happened in the instant case, and become entitled to stand first included in queue to have a better claim, at the same time it is the solemn duty of the State to ensure that a non-discriminatory method is adopted, whether it is for distribution or allotment of licence on his own land, or alienation of property and it is imperative and of paramount consideration that every action of the State should always be in public interest.37. In the matter of grant of licence even on its own land to set up a group housing society, the policy of allotment must be fair and transparent and as there is a cap of 20% for group housing society in the sector area and if the demand exceeds more than available density of 20% area reserved for group housing in the sector alike Sector 63A, Gurgaon under the Final Development Plans as published in the instant case, the method of selection has to be such so that all the eligible applicants get a fair opportunity of competition and it is the bounden duty of the State and its instrumentalities of their action to be conformed with Article 14 of the Constitution of which non-arbitrariness is a significant facet. A public authority possesses powers only to use them for public good. This imposes a solemn duty on the State to act impartially and to adopt a procedure of allotment of licence which is fair play in action.38. We find no difficulty in holding that in the first instance there is no such consistent practice as alleged of First Come First Serve basis for allotment of licence available under the entire Scheme placed on record and secondly, from where this principle has been borrowed is alien to the statute and also the policy pursuant to which the process was initiated for allotment of licences to the prospective applicants.39. Curiously, we find that before this Court counter affidavits came to be filed by the Respondent State though its Chief Town Planner, Department of Town and Country Planning, Haryana, Chandigarh coming out with the justification and the procedure which has been followed based on the principle of First Come First Serve basis while granting licence to the Appellants stating inter alia that if there are more than one application of the same day and time, what will be the mechanism to be followed has also been referred to, but from where it has been originated and about its factual foundation has not been placed on record, despite the directions of this Court at the time of conclusion of submissions made.40. In our considered view, the principle of First Come First Serve basis which has been adopted by the State Respondents in the facts of the instant case is neither held to be rational nor in public interest and is in violation of Article 14 of the Constitution of India.41. The submission made by counsel for the Appellant that their grant of licence was not the subject matter of challenge in the writ petition before the High Court is of no substance for the reason that firstly they were impleaded as party respondents and the subject issue under consideration was much known to them as to whether the so-called alleged practice of First Come First Serve basis which has been adopted by the State authorities for grant of licence, how far it was rational and is in conformity with the Scheme of the statute and secondly, the High Court after framing substantive question under its order dated 13th August, 2015 afforded opportunity of hearing to the Appellants who have filed their counter-affidavits and thereafter has arrived to a conclusion that the principle of First Come First Serve basis adopted in grant of licences is not a valid consideration, the only consequence available was to cancel such licence which have been granted based on the so-called alleged practice which is unsustainable in law and in our considered view no error was committed in passing the order of cancellation of grant of licence to the Appellants under the judgment impugned.42. A further submission made by counsel for the Appellant that it is a consistent practice which was followed throughout and almost 248 licences had been granted under the policy in vogue at that time, in our considered view does not hold good for the reason that those who are not party to the proceedings before the High Court obviously no adverse action could have been taken against them pursuant to the view expressed by the High Court in the impugned judgment, at the same time the principle may apply to the present Appellants who are indeed parties to the proceedings and have contested their claim and have been non-suited after a fair opportunity of hearing being afforded, may not be in a position to defend their grant of licence on the principle of First Come First Serve basis which has been held to be unfair and in violation of Article 14 of the Constitution.43. With regard to the further submission made by the counsel for Respondent nos.7 to 9 about rejection of their application for grant of licence, suffice it to say that once this Court has upheld the view expressed by the High Court regarding the procedure of allotment of licence based on the principle of First Come First Serve basis, as held against the Public Policy, at least Respondent nos.7 to 9 would not be in a position to plead for consideration of their applications for grant of licence under the impugned policy.