Case: POWARI PANCHSHEEL CO-OP.HNG.STY Vs. MAHARASHTRA HOUSING AREA DEVELOPMENT AUTHORITY (MHADA))

then was the Judge of Kerala High Court and later became a Judge of this Court) which the learned Judge made in V. Punnan Thomas vs. State of Kerala (AIR 1969 Ker 81). In Para 12 at page 505 of R.D. Shetty?s case (supra) Justice Bhagwati said in the following words:-?We agree with the observations of Mathew, J, in V. Punnan Thomas vs State of Kerala that: The Government, is not and should not be as free as an individual in selecting the recipients for its largesse. Whatever its activity, the Government is still the Government and will be subject to restraints, inherein in its position in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal.? 22. Since then the Courts have been consistently following the aforesaid dictum of law, which is later explained by this Court in several cases whenever the question relating to disposal of State largesse amongst the citizens arose for consideration for deciding the rights of the parties qua each other and the State. It is, however, not necessary to mention these cases which have reiterated this principle as it will only burden our order. 23. Keeping in view the aforementioned principle of law, when we examine the facts of this case, we are of the considered opinion that the Board was not justified in considering only the offers made by the three societies without considering appellant No.1?s offer dated 03.03.2003 on its merit. 24. In our view, the Board was under a legal obligation to consider also appellant No.1?s offer which appellant No.1 had made to the Board through M/s. Kamath Constructions vide its letter dated 03.03.2003 for purchase of the flats of Powai Project along with the other offers made by the three societies in their meetings held on 10/14.05.2003. 25. This we say for the reasons that firstly, M/s. Kamath Constructions was the authorized agent appointed by the Board itself for sale and disposal of the flats of Powai Project: Secondly, M/s. Kamath Constructions on receipt of appellant No.1?s offer on 03.03.2003 rightly forwarded it to the Board on 03.03.2003 for its consideration; Thirdly, the appellants offer dated 3.3.2003 was, therefore, very much available to the Board for its consideration prior to the meetings held on 10/14.05.2003. In other words, the date on which the Board was considering the offers of the three societies in its meeting on 10/14.05.2003, the offer of appellant No.1 dated 03.03.2003 was with the Board for its consideration. 26. Fourthly, the very fact that M/s Kamath Constructions entertained appellant No.1?s offer on 03.03.2003 and forwarded it to the Board was indicative of the fact that offer to purchase the flats of Powai Project could be made by any party either to the Board or to M/s. Kamath Constructions and had to be considered as being a valid offer made to the Board only. 27. Fifthly, reading of appellant No.1?s letter dated 03.03.2003 to M/s. Kamath Constructions would clearly indicate that it was essentially an offer made by appellant No.1 to the Board for purchase of 110 flats for Rs.17 crores. In other words, it could not be treated as letter for soliciting some information from the Board as contended by the Board for its consideration. 28. In our view, keeping in view these five factors which were admittedly present in the case, the Board was under a legal obligation to consider all the four offers (appellant No.1 and the three societies) in their meetings held on 10/14.05.2003 with a view to decide as to which one out of the four offers was the best one for its acceptance. 29. Indeed, exclusion of appellant No.1?s offer dated 03.03.2003 and keeping appellant no.1 out from the zone of consideration by the Board in its meetings held on 10/14.05.2003 and only confining the consideration of the offers made by the three societies vitiates the entire decision of the Board taken on 10/14.05.2003. 30. In our view, appellant No.1 had a legitimate right and so the expectation that it would get equal treatment from the Board like the other three societies because all four were similarly situated while considering the issue of sale of flats of Powai Project. Indeed, there was no valid reason for the Board to exclude appellant No.1?s case/offer from the zone of consideration. 31. The reason given by the Board for non-consideration of appellant No.1?s case/offer namely that appellant No.1?s letter dated 03.03.2003 was not an offer and, therefore, it was not considered, had no basis for three reasons. 32. First, the so-called reason ought to have been deliberated and reduced in writing by the Board in its Minutes of Meetings held on 10/14.05.2003. It was, however, not done; Second, the Board had no right to disclose the reason for the first time in the return in the High Court. It was not legally permissible; Third, the reason given for its non- consideration also had no basis because as held above, the appellant No.1?s letter dated 03.03.2003 was in fact an offer to purchase the flats quoting therein the price for purchase and, therefore, it was capable of being considered on its merits treating it as an offer to purchase the flats along with the offers of the three societies in the meetings held by the Board on 10/14.05.2003. 33. In the light of the foregoing discussion, we are of the considered view that the decision to sale/dispose of the flats of Powai Project taken by the Board in its meetings held on 10/14.05.2003 (Resolution No.192) is vitiated as being unreasonable, arbitrary and violative of principles enshrined in Article 14 of the Constitution of India. It is not legally sustainable and has to be, therefore, set aside. 34. Since we have set aside the impugned Resolution on legal grounds, we need not go into the challenge made by the appellants against the officials on the ground of mala fides. It is not necessary.

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

Explanation:
1[ds]19. Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeal, set aside the impugned order, allow the appellants? writ petition, out of which this appeal arises, and issue writ of certiorari to quash the decision of meetings dated 10/14.5.2003 and further issue a writ of mandamus against the respondents-Board and the three societies to ensure its compliance as directed hereinbelow in detail.Since then the Courts have been consistently following the aforesaid dictum of law, which is later explained by this Court in several cases whenever the question relating to disposal of State largesse amongst the citizens arose for consideration for deciding the rights of the parties qua each other and the State. It is, however, not necessary to mention these cases which have reiterated this principle as it will only burden our order.Keeping in view the aforementioned principle of law, when we examine the facts of this case, we are of the considered opinion that the Board was not justified in considering only the offers made by the three societies without considering appellant No.1?s offer dated 03.03.2003 on its merit.In our view, the Board was under a legal obligation to consider also appellant No.1?s offer which appellant No.1 had made to the Board through M/s. Kamath Constructions vide its letter dated 03.03.2003 for purchase of the flats of Powai Project along with the other offers made by the three societies in their meetings held on 10/14.05.2003.This we say for the reasons that firstly, M/s. Kamath Constructions was the authorized agent appointed by the Board itself for sale and disposal of the flats of Powai Project: Secondly, M/s. Kamath Constructions on receipt of appellant No.1?s offer on 03.03.2003 rightly forwarded it to the Board on 03.03.2003 for its consideration; Thirdly, the appellants offer dated 3.3.2003 was, therefore, very much available to the Board for its consideration prior to the meetings held on 10/14.05.2003. In other words, the date on which the Board was considering the offers of the three societies in its meeting on 10/14.05.2003, the offer of appellant No.1 dated 03.03.2003 was with the Board for its consideration.26. Fourthly, the very fact that M/s Kamath Constructions entertained appellant No.1?s offer on 03.03.2003 and forwarded it to the Board was indicative of the fact that offer to purchase the flats of Powai Project could be made by any party either to the Board or to M/s. Kamath Constructions and had to be considered as being a valid offer made to the Board only.Fifthly, reading of appellant No.1?s letter dated 03.03.2003 to M/s. Kamath Constructions would clearly indicate that it was essentially an offer made by appellant No.1 to the Board for purchase of 110 flats for Rs.17 crores. In other words, it could not be treated as letter for soliciting some information from the Board as contended by the Board for its consideration.In our view, keeping in view these five factors which were admittedly present in the case, the Board was under a legal obligation to consider all the four offers (appellant No.1 and the three societies) in their meetings held on 10/14.05.2003 with a view to decide as to which one out of the four offers was the best one for its acceptance.Indeed, exclusion of appellant No.1?s offer dated 03.03.2003 and keeping appellant no.1 out from the zone of consideration by the Board in its meetings held on 10/14.05.2003 and only confining the consideration of the offers made by the three societies vitiates the entire decision of the Board taken on 10/14.05.2003.In our view, appellant No.1 had a legitimate right and so the expectation that it would get equal treatment from the Board like the other three societies because all four were similarly situated while considering the issue of sale of flats of Powai Project. Indeed, there was no valid reason for the Board to exclude appellant No.1?s case/offer from the zone of consideration.The reason given by the Board for non-consideration of appellant No.1?s case/offer namely that appellant No.1?s letter dated 03.03.2003 was not an offer and, therefore, it was not considered, had no basis for three reasons.First, the so-called reason ought to have been deliberated and reduced in writing by the Board in its Minutes of Meetings held on 10/14.05.2003. It was, however, not done; Second, the Board had no right to disclose the reason for the first time in the return in the High Court. It was not legally permissible; Third, the reason given for its non- consideration also had no basis because as held above, the appellant No.1?s letter dated 03.03.2003 was in fact an offer to purchase the flats quoting therein the price for purchase and, therefore, it was capable of being considered on its merits treating it as an offer to purchase the flats along with the offers of the three societies in the meetings held by the Board on 10/14.05.2003.In the light of the foregoing discussion, we are of the considered view that the decision to sale/dispose of the flats of Powai Project taken by the Board in its meetings held on 10/14.05.2003 (Resolution No.192) is vitiated as being unreasonable, arbitrary and violative of principles enshrined in Article 14 of the Constitution of India. It is not legally sustainable and has to be, therefore, set aside.Since we have set aside the impugned Resolution on legal grounds, we need not go into the challenge made by the appellants against the officials on the ground of mala fides. It is not necessary.