Case: M/S. Mutha Associates  Vs. State Of Maharashtra

Pune Municipal Corporation which is also the Planning Authority under the MRTP Act published a notification on 13th May, 1976 declaring its intention to revise the development plan for the Pune city and inviting suggestions and objections to the proposed revision. The Draft Revised Development Plan inter alia covered site No.M-145 comprising Survey No.559/2B admeasuring 1 hectare 20 acres (approximately) which was under the orders of Director, Town Planning shown as reserved for the extension of the APMC market yard. The Draft Development Plan published in the Official Gazette on 7th October, 1982 in terms of Section 26 of the MRTP Act clearly reflected the reservation aforementioned3. The Revised Development Plan was eventually sanctioned by the State Government in which the parcel of the land aforementioned owned by late Pralhad Lokram Dodeja and his brother late Bansidhar Dodeja, appellants in Civil Appeal No.2854 of 2002 continued to be shown as reserved for APMC with the only change that instead of extension of the APMC market yard the designated purpose shown was Bamboo Trade and Flea Market. The sanctioned Revised Development Plan further declared APMC to be the appropriate authority for acquisition and development of the said parcel of land. What is important is that although the Planning Authority had declared its intention to prepare a Revised Development Plan as early as in May 1976 and invited objections and suggestions from the public and although the Revised Draft Plan was published under Section 26 of the Act in the Official Gazette on 7th October, 1982, no objections were filed to the same by the land owners aforementioned at any point of time. It is in that backdrop that the appellant-Mutha Associates, for the first time, came on the scene on 8th March, 1984 when they acquired what was described as development rights over the disputed parcel of land upon payment of the earnest money of Rs.50,000/- only4. Pursuant to the sanction granted by the State Government under Section 31 of the MRTP Act, the Commissioner of Pune Division issued a declaration on 13th November, 1987 under Section 126 (2) of the MRTP Act read with Section 6 of the Land Acquisition declaring that the parcel of land aforementioned was needed for the public purpose of extension of market yard. This notification was published in the Official Gazette on 3rd December, 1987. The Special Land Acquisition Officer appointed for the purpose in due course issued notices to the owners as also to the appellant-Mutha Associates on 15th October, 1988, 31st December, 1988, 11th April, 1989 and 21st April, 1989. No objections were filed either by the owners or by Mutha Associates-their agent/Builder despite the said notices. Instead they moved two applications before the Chief Minister of the State of Maharashtra one on 11th September, 1989 and the other on 13th October, 1989 praying for deletion of the land under acquisition from reservation. The Special Land Acquisition Officer, however, went ahead with the acquisition proceedings and made an award on 9th November, 1989, pursuant whereto the respondent-APMC deposited a sum of Rs.26,29,872/- towards the cost of acquisition on 16th October, 1990. The request of the appellants for deletion of the land from acquisition proceedings was finally rejected by the Government on 5th November, 1990 thereby clearing the decks for completing the acquisition proceedings5. The Land Acquisition Officer accordingly issued a notice under Section 12(2) of the Land Acquisition Act for taking over the possession of the land which was received by the land owners on 24th November, 1990. The possession was scheduled to be taken over on 26th November, 1990 at which stage the land owners filed Regular Civil Suit No.2194 of 1990 before the Civil Judge, Senior Division, Pune against the State of Maharashtra and the Land Acquisition Officer challenging the award made by the Collector. In the suit the Civil Judge, Pune passed an interlocutory order directing the parties to maintain status quo which order was challenged by the defendants before the High Court in a Civil Revision that was allowed with a direction to the trial Court to decide the application for interim relief without reference to the application for appointment of a Local Commissioner made by the owners. The Civil Judge accordingly heard and dismissed the application of the owners for interim relief, aggrieved whereof the landowners filed an appeal before the High Court6. It was during the pendency of the said appeal that the owners and Mutha Associates filed Writ Petition No.670 of 1996 challenging the acquisition proceedings. The writ petition was entertained by the High Court on an assurance given by the appellants that the appeal filed by them against the refusal of the interim order and so also Original Suit No.2194 of 1990 shall be withdrawn by them7. While Writ Petition No.670 of 1996 was pending disposal, the State Government passed an order dated 20th May, 1998 whereby the Government purported to invoke their power under Section 48 of the Land Acquisition Act to direct withdrawal of the acquisition proceedings qua the land in question. Aggrieved by the said order, the APMC filed Writ Petition No.3620 of 1998 challenging the withdrawal on several grounds including the ground that the APMC was not given a hearing before the acquisition proceedings were withdrawn and that the withdrawal order was at any rate arbitrary and malafide hence unsustainable. Writ Petition No.3874 of 1998 was also filed by a few agriculturists who apprehended that the APMC may withdraw writ petition No.3620 of 1998 and, thereby, allow the withdrawal of acquisition to attain finality8. The High Court has, as mentioned earlier, heard and disposed of all the three writ petitions together. It has while doing so dismissed Writ Petition No.3620 of 1998 and upheld the acquisition proceedings not only on the ground that the challenge to the said proceedings was highly belated but also on the ground that there was no merit in the grounds of challenge. The High court held that the reservation for Bamboo Trade and Flea Market was in no way different from extension of the market yard - the purpose for which acquisition proceedings had been started and that both the purposes were public purposes apart from the authority designated for acquiring the land in dispute being one and the same. The High Court also relied upon a specific assertion made by the APMC that the land in question shall be used for Bamboo Trade and Flea Market only. In particular, High Court referred to Para 3 of the writ petition in which the petitioners had themselves stated as under:the petitioners thus state that the additional land was sought for by the respondent No.3 to extend the market yard to enable them to accommodate the activities of bambaoo trade which was incorporated in entries 5 and 6 under the heading No.XV forest products in the Schedule to the said Act9. The High Court repelled the contention that the provisions of Section 37 of the Act were applicable to the case at hand and distinguished the decisions that were relied upon by the writ petitioners-appellants in support of that contention and dismissed Writ Petition No.670 of 199610. In Writ Petitions No.3620 of 1998 and 3874 of 1998 the High Court found that the withdrawal of the acquisition proceedings was not valid not only because the withdrawal notification was not published in the Official Gazette but also because the APMC-the beneficiary of the acquisition proceedings had not been given an opportunity of being heard by the Minister concerned before directing withdrawal of the said proceedings. The High Court went a step further and held that Shri Rane, the then Minister, not only acted in violation of the principles of natural justice but made one sided observations during the proceedings and used the Collectors report at the back of APMC and finally passed an order ignoring the legal provisions and the pendency of an earlier writ petition from which one could infer that the Minister had acted under the influence of Shri Mutha and directed withdrawal of the acquisition proceedings for his benefit11. The High Court also noted the fact that in Writ Petition No.3874 of 1998, there was a clear assertion that because of the influence of Shri Mutha the Minister-Shri Rane had moved to supersede the APMC in July, 1998 within two months of the date of withdrawal order dated 20th May, 1998. This supersession was according to the writ-petitioners aimed at ensuring that the challenge to the order of withdrawal was withdrawn by the officer who took over the reins of the APMC by withdrawing Writ Petition No.3620 of 1998. The High Court also found the supersession of APMC to be a strong circumstance that could not be brushed aside no matter Shri Rane had chosen to deny the allegations made against him. The High Court eventually concluded:This clearly showed his malafides. In the circumstances, we cannot but hold that the order passed by Shri Naryan Rane, the then Revenue Minister is in gross violation of principles of natural justice, is a perverse order, without any supporting material, and is actuated by malafides and is nothing short of misuse of powers to favour the land developers. By looking to the totality of the material on record that is the conclusion which is inescapable.

Reasoning:
The High Court was, in our opinion, perfectly justified in holding that the order passed by the Minister lacked objectivity and was hasty without due and proper consideration of the relevant circumstances and the material on record. There is, in our view, no infirmity in the said findings nor was any serious attempt made before us by learned counsel for the appellants to demonstrate that the Minister had indeed acted in a fair objective and dispassionate manner while directing the withdrawal of the acquisition proceedings on the twin grounds that have been scrutinised by the High Court and rightly found to be untenable. We are satisfied that the order passed by the Minister directing withdrawal of the acquisition proceedings was bad not only because it was arbitrary, lacked objectivity and ignored the material on record but also because the said order was passed without offering to the APMC a fair and reasonable opportunity of being heard in the matter. That the order was not notified was only an additional reason that rendered the order legally unsupportable which the High Court rightly quashedThe charge of malafides levelled against the appellant-Mr. Rane, the then Minister was not supported by any particulars. The writ petition filed by APMC did not provide specific particulars or details of how the decision taken by minister was influenced by Mutha Associates or by any other person for that matter. The averments made in the writ petition in that regard appeared to be general and inferential in nature. Such allegations were, in our opinion, insufficient to hold the charge of malice in fact levelled against the minister proved46. It is true that the High Court has enumerated certain stark irregularities in the decision making process or the use of material obtained on behalf of the back of the beneficiary of the acquisition as also the denial of fair opportunity to the beneficiary to present its case before the minister yet those irregularities do not inevitably lead to the conclusion that the minister had acted malafide. Failure to abide by the principles of natural justice are consideration of material not disclose to a party or non-application of mind, to the material available on record may vitiate the decision taken by the authority concerned and may even constitute malice in law but the action may still remain bonafide and in good faith. It is trite that every action taken by a public authority even found untenable cannot be dubbed as malafide simply because it has fallen short of the legal standards and requirements for an action may continue to be bonafide and in good faith no matter the public authority passing the order has committed mistakes or irregularities in procedures or even breached the minimal requirements of the principles of natural justice. The High Court has attributed to the Minister appellant in Civil Appeals No.2856-2857 of 2002, malafides simply because the order passed by him was found to be untenable in law. Such an inference was not in our view justified, no matter the circumstances enumerated by the High Court may have given rise to a strong suspicion that the minister acted out of extraneous considerations. Suspicion, however, strong cannot be proof of the charge of malafide. It is only on clear proof of high degree that the court could strike down an action on the ground of malafide which standard of proof was not, in our opinion, satisfied in the instant case. To the extent the High Court held the action of the minister to be malafide, the impugned order would require correction and Civil Appeals No.2856 and 2857 of 2002 allowed.