Case: M/S. Dhampur Sugar (Kashipur) Ltd Vs. State Of Uttaranchal

the good governance of the State, the Court helps the good governance by constantly reminding Government and its officers that they should act within the four corners of the statute and not contravene any of the conditions laid down as a limitation upon, their undoubtedly wide powers. Therefore, even from a practical point of view, even from the point of view of the good governance of the State, we think that the High Court should not be reluctant to issue its prerogative writ whenever it finds that the sovereign Legislature has not been obeyed and powers have been assumed which the Legislature never conferred upon the executive”. (emphasis supplied) MALA FIDE EXERCISE OF POWER 66. The appellant also contended that the impugned action of granting licence to respondent No. 4 by respondent Nos. 1 to 3 is mala fide. It was submitted that in spite of acute shortage of sugarcane in the State of Uttranchal, the policy was changed by the Government in order to grant benefit to respondent No. 4, not only at the cost of interest of the appellant but also by ignoring larger public interest and industrial growth and development. In this connection, the attention of the Court was also invited to a letter, dated August 04, 2003 written by the cane & Sugar Commissioner to the Secretary, Cane Development & Sugar Industry, Uttranchal wherein he had stated that there was no necessity to make any change in the Licensing Policy for 2003-04. The counsel submitted that surprisingly, within a short span of about two months, the same Commissioner agreed to change in policy by inserting a proviso to para ka with the sole objective to favour respondent No. 4. It was pursuant to modified policy that respondent No. 4 got the licence. Therefore, the action deserves to be set aside on the ground of mala fide exercise of power. 67. Now, it is well-settled and needs no authority for holding that every power must be exercised bona fide and in good faith. Before more than hundred years, Lord Lindley said in General Assembly of Free Church of Scotland v. Overtaum, 1904 AC 515 : 20 TLR 370; “I take it to be clear that there is a condition implied in this as well as in other instruments which create power, namely, that the powers shall be used bona fide for the purpose for which they are conferred”. In other words, every action of a public authority must be based on utmost good faith, genuine satisfaction and ought to be supported by reason and rationale. It is, therefore, not only the power but the duty of the Court to ensure that all authorities exercise their powers properly, lawfully and in good faith. If powers are exercised with oblique motive, bad faith or for extraneous or irrelevant considerations, there is no exercise of power known to law and the action cannot be termed as action in accordance with law. 68. But as already discussed earlier, a Court of Law is not expected to propel into “the unchartered ocean” of Government Policies. Once it is held that the Government has power to frame and reframe, change and rechange, adjust and readjust policy, the said action cannot be declared illegal, arbitrary or ultra vires the provisions of the Constitution only on the ground that the earlier policy had been given up, changed or not adhered to. It also cannot be attacked on the plea that the earlier policy was better and suited to the prevailing situation. 69. Allegations of mala fide are serious in nature and they essentially raise a question of fact. It is, therefore, necessary for the person making such allegations to supply full particulars in the petition. If sufficient averments and requisite materials are not on record, the court would not make fishing or roving inquiry. Mere assertion, vague averment or bald statement is not enough to hold the action to be mala fide. It must be demonstrated by facts. Moreover, the burden of proving mala fide is on the person levelling such allegations and the burden is very heavy [vide E.P. Royappa v. State of Tamil Nadu, (1974) 4 SCC 4 : (1974) 2 SCR 348 ]. The charge of mala fide is more easily made than made out. As stated by Krishna Iyer, J. in Gulam Mustafa v. State of Maharashtra, (1976) 1 SCC 800 : AIR 1977 SC 448 ], it is the last refuge of a losing litigant [see also Ajit Kumar v. Indian Oil Corporation, (2005) 7 SCC 764 ]. In the case on hand, except alleging that the policy was altered by the Government, to extend the benefit to respondent No. 4, no material whatsoever has been placed on record by the appellant. We are, therefore, unable to uphold the contention of the learned counsel that the impugned action is mala fide or malicious. 70. The High Court, in our opinion, was right in observing that the change of policy was not limited to the case of respondent No. 4 but it was uniformly applied to one and all. To us, therefore, it cannot be contended that the High Court committed an error in arriving at the said conclusion which requires interference under Article 136 of the Constitution. We, therefore, see no substance in this argument as well. 71. Keeping in view statutory provisions, the policy decision taken by the respondent-authorities and interest of all parties including existing sugar factories, a decision has been taken by the respondent Nos. 1 to 3 granting licence in favour of respondent No.4. The said decision was confirmed by the State in exercise of appellate power and the High Court was not convinced that the decision was illegal, arbitrary or otherwise unreasonable. We are unable to persuade ourselves to hold that all the decisions suffer from any error of law or of jurisdiction and they should be set aside. We, therefore, express our inability to grant relief to the appellant.72. For the foregoing reasons, we

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]Keeping in view statutory provisions, the policy decision taken by the respondent-authorities and interest of all parties including existing sugar factories, a decision has been taken by the respondent Nos. 1 to 3 granting licence in favour of respondent No.4. The said decision was confirmed by the State in exercise of appellate power and the High Court was not convinced that the decision was illegal, arbitrary or otherwise unreasonable. We are unable to persuade ourselves to hold that all the decisions suffer from any error of law or of jurisdiction and they should be set aside. We, therefore, express our inability to grant relief to the appellant.