Case: G.B. Mahajan &amp; Others Vs. Jalgaon Municipal Council &amp; Others

it might almost be described as being done in bad faith, and in fact, all these things run into one another." 44. Referring to the doctrine, Prof. Wade says: "This has become the most frequently cited passage (though most commonly cited only by its nickname) in administrative law. It explains how `unreasonableness, in its classic formulation, covers a multitude of sins. These various errors commonly result from paying too much attention to the mere words of the Act and too little to its general scheme and purpose, and from the fallacy that unrestricted language naturally confers unfettered discretion. Unreasonableness has thus become a generalised rubric covering not only sheer absurdity or caprice, but merging into illegitimate motives and purposes, a wide category of errors commonly described as `irrelevant considerations, and mistakes and misunderstandings which can be classed as self-misdirection, or addressing oneself to the wrong question....." The point to note is that a thing is not unreasonable in the legal sense merely because the Court thinks it is unwise. Some observations of Lord Scarman in Nottinghamshire County Council v. Secretary of State for Environment, 1986 A.C. 240 at 247, might usefully be recalled: "But I cannot accept that it is constitutionally appropriate, save in very exceptional circumstances, for the courts to intervene on the ground of "unreasonableness" to quash guidance framed by the Secretary of State and by necessary implication approved by the House of Commons, the guidance being concerned with the limits of public expenditure by local authorities and the incidence of the tax burden as between taxpayers and ratepayers. Unless and until a statute provides otherwise, or it is established that the Secretary of State has abused his power, these are matters of political judgment for him and for the House of Commons. They are not for the judges or your Lordships House in its judicial capacity." "For myself, I refuse in this case to examine the detail of the guidance or its consequences. My reasons are these. Such an examination by a Court would be justified only if a prima facie case were to be shown for holding that the Secretary of State had acted in bad faith, or for an improper motive, or that the consequences of his guidance were so absurd that he must have taken leave of his senses........." 45. When Lord Denning MR stated in the Court of Appeal that "Not only must (the probationer-Counsellor) be given a fair hearing, but the decision itself must be fair and reasonable" (emphasis supplied). The House of Lords thought that the statement of the learned Master of the Rolls if allowed to pass into law would wrongly transform the remedy of judicial review, as the statement would imply that the Court can itself sit, as in appeal, on judgment of the reasonableness of the decision instead of on the correctness of the decision making process. "The purpose of judicial Review", it was stated " ......is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the Court." 46. While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference. 47. In regard to the allegation that the Project Scheme was tailored to suit respondent 6 alone or that the project as put to tender did not admit of tenders on fixed comparable parameters, we find no merit. Sri K.K. Singhvi submitted that the tender papers were prepared by reputed Architects and the precise points on which comparative quotations were invited were specifically incorporated in the tender-papers. The point again is that no other tenderer expressed any grievance. The tenders were such that the tenderer could identify the terms which form the basis of comparative evaluation. The charge of arbitrariness cannot be upheld. Tests to be applied in a given case may be influenced by the extent to which a decision is supported by a democratic unanimity which evidences the decision granted, of course, the power. 48. Sri K.K. Jain stated that the scheme enables respondent 6 to resort to certain well-known financial malpractices for tax evasion now known to be rampant when properties change hands. Sri Jain said that the Court ought to take judicial notice of so rampant and pervasive an evil and in anything that tends to promote such unhealthy economic trends. While it is true that large scale tax evasion and evils of unaccounted money bedevils the nations economic discipline and that with the increasing erosion of morality in public life and the serious personal degradations for unjust gains one sees all-round, the situation is, indeed, serious. But we fail to see what the Court can do in a case like this. The present argument proceeds on two assumptions. The first is that respondent No.6 has, in fact, indulged in such practices in the matter of disposal of occupancy rights. This is a mere allegation which is emphatically repudiated by respondent No.6. The second is that the accommodation in this commercial complex is such good competitive selling proposition that there is great demand and limited supply enabling respondent 6 to exploit the situation. This again is a matter of mere allegation. To condemn the Municipal authoritys decision, otherwise valid, on the ground alone that the developer is likely to resort to transactions of unaccounted money would, as a judicial remedy, be plainly unthinkable. 49. Contention (d) requires to be and is also held against appellants.

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

Explanation:
0[ds]14. There might be some force in what Sri Jain says if the observations which Sri Jain takes exception to are alone taken into account. The High Court was possibly wrong in its view as to the effect of this Courts earlier orders. But what appears clear is that the High Court also went into the merits of the matter. Therefore the grievance that the High Court abdicated its jurisdiction on an erroneous interpretation of this Courts earlier order may not be correct. However, in order that there be no dissatisfaction on the question that the matter did not receive adequate consideration in the High Court, we asked the appellants to present their case on the merits also so that any need for a remit of the matter to the High Court at this late stage was obviated. Parties placed their case fully before usRe Contention (a)This contention of the appellants, as a legal contentions is not somewhat vague and does not admit of clear-cut legal contours. As we apprehend the contention, it pertains to the legality or propriety of a policy-option22. On a consideration of the matter, it appears to us that the argument that a project envisaging a self-financing scheme, by reason alone of the particular policy behind it, is beyond the powers of the local authority is somewhat too broadly stated to be acceptable. A project, otherwise legal, does not become any the less permissible by reason alone that the local authority, instead of executing the project itself, had entered into an agreement with a developer for its financing and execution. The criticism of the project `unconventional does not add to or advance the legal contention any further.The question is not whether it is un-conventional by the standard of the extant practices, but whether there was something in the law rendering it. There is, no doubt, a degree of public accountability in all governmental enterprises. But, the present question is one of the extent and scope of judicial review over such matters. With the expansion of the States presence in the field of trade and commerce and of the range of economic and commercial enterprises of Government and its instrumentalities there is an increasing dimension to Governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost over-runs in projects, balancing of costs against time-scales, quality-control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable prerogative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrators right to trial and error, as long as both trial and error are bona fide and within the limits of authorityappears to us that in the context of expanding exigencies of urban planning it will be difficult for the Court to say that a particular policy option was better than another. The contention that the project is ultra virus of the powers of the Municipal Council does not appeal to us27. We hold that contention (a) does not justify quashing of the impugned Resolution of the Municipal CouncilRe : Contentions (b) and (c)is reasonably possible to fit in the basic conception of this project into what can be held to be comprised in the power under section 272(1), there is no reason why the provision to stifle be interpreted unduly restricitively to exclude such enterprise32. On a consideration of the matter it appears to us that the appellants have not been able to establish that the essential elements of the transaction are such that section 92 of the Act is violated. It would, indeed, be unduly restrictive of the statutory powers of the local authority if a provision enabling the establishment of markets and disposal of occupancy-rights therein are hedged in by restrictions not found in the statute. The point to note is that the developer to the extent he is authorized to induct occupiers in respect of the area earmarked for him merely exercises, with the consent of the Municipal Council, a power to substitute an occupier in his own place. This is not impermissible when it is with the express consent of the Municipal Council34. On a consideration of the matter we find no substance in contentions (b) and (c) eitherRe : Contention (d)While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference47. In regard to the allegation that the Project Scheme was tailored to suit respondent 6 alone or that the project as put to tender did not admit of tenders on fixed comparable parameters, we find no merit.Sri K.K. Singhvi submitted that the tender papers were prepared by reputed Architects and the precise points on which comparative quotations were invited were specifically incorporated in the tender-papers.The point again is that no other tenderer expressed any grievance. The tenders were such that the tenderer could identify the terms which form the basis of comparative evaluation. The charge of arbitrariness cannot be upheld. Tests to be applied in a given case may be influenced by the extent to which a decision is supported by a democratic unanimity which evidences the decision granted, of course, the powerWhile it is true that large scale tax evasion and evils of unaccounted money bedevils the nations economic discipline and that with the increasing erosion of morality in public life and the serious personal degradations for unjust gains one sees all-round, the situation is, indeed, serious. But we fail to see what the Court can do in a case like this. The present argument proceeds on two assumptions. The first is that respondent No.6 has, in fact, indulged in such practices in the matter of disposal of occupancy rights. This is a mere allegation which is emphatically repudiated by respondent No.6. The second is that the accommodation in this commercial complex is such good competitive selling proposition that there is great demand and limited supply enabling respondent 6 to exploit the situation. This again is a matter of mere allegation. To condemn the Municipal authoritys decision, otherwise valid, on the ground alone that the developer is likely to resort to transactions of unaccounted money would, as a judicial remedy, be plainly unthinkable49. Contention (d) requires to be and is also held against appellants.