Case: M/S Sethi Auto Service Station  Vs. Delhi Development Authority

M/s Sethi Auto Service Station and M/s Anand Service Station own two petrol outlets adjacent to each other, located at NH-8, Mahipalpur, New Delhi since 1994. The land for the purpose was allotted by the Airport Authority of India (for short ‘AAI) whereas the petrol pumps were allotted by the Indian Oil Corporation (for short ‘IOC) and Hindustan Petroleum Corporation Limited (for short ‘HPCL) to Sethi and Anand respectively. According to the appellants, in the year 1999, a proposal was formulated for construction of an eight-lane express highway between Delhi and Gurgaon, including construction of a flyover/grid separator at Mahipalpur crossing, where the two petrol pumps in question are located. Claiming unviability in the operation of the two petrol pumps on account of construction of the flyover and relying on the policy framed by the Delhi Development Authority (for short ‘the DDA) on 14th October, 1999, the two oil companies approached the DDA, respondent No.1 in this appeal, for "re-sitement" of both the petrol pumps. It was claimed that, in the first instance, IOC and HPCL had corresponded with the original allotment agency, viz. AAI, for re-sitement but some time in the year 2000, AAI informed the Oil Companies that it did not have any alternative site for allotment due to non-availability of land. The appellants also relied on the letter issued by the National Highway Authority of India (for short ‘NHAI) confirming that the proposed dual highway would be developed along with the existing alignment of NH-8 and that no access would be provided to any retail outlet or private property along the highway. Supporting the claim of the appellants, the State Level Coordinator (Oil Industry) also wrote a letter to the DDA on 10th May, 2002, inter alia, pointing out that the construction work on the grid separator had commenced; after its completion, all vehicles would cross over the separator and would not have any access to the two petrol pumps in question for refueling thereby rendering them economically unviable.4. The stand of the appellants was that request for re-sitement made by the two Oil Companies with the recommendation of the State Level Coordinator had been considered by the DDA; the DDA conducted its own field survey; the Technical Committee of the DDA on 28th April, 2002 also recommended relocation/re-sitement and on 17th May, 2002, a proposal for allotment of alternative sites/plots was referred to and considered by the Screening Committee of the DDA at its meeting held on 21st November, 2003, when the proposal for allotment of two alternative sites was approved. However, when the matter was finally taken up by the Screening Committee of DDA on 28th November, 2003, the proposal for relocation was disapproved and instead the Commissioner (Planning) was directed to enquire and submit a report as to why two petrol pump sites, earmarked for the appellants, were not auctioned. The recommendation of the Screening Committee was considered by the Vice Chairman of DDA, who rejected the proposal for relocation of the two petrol pumps in question.5. Aggrieved thereby, the appellants filed writ petitions in the Delhi High Court. It was pleaded that the State Level Coordinator as well as the DDA having recognised that the two petrol pumps were rendered commercially unviable due to construction of the grid separator, they had a legitimate right to the allotment/relocation of petrol pumps at alternative sites, in terms of the policy of the Ministry of Petroleum and Natural Gas formulated in the year 1998 as well as the policy of the DDA of 1999. It was urged that all the requisite conditions for such re-allotment/re-sitement were fulfilled by them and the DDA had also recommended the allotment in May, 2002; which proposal had also been cleared by the Technical Committee and, therefore, the DDA was bound by the said decisions. Moreover, having acted upon its decisions by earmarking the two sites, the decision to withhold allotment and include the two earmarked plots in the proposed auction was unreasonable, irrational and arbitrary and the mere fact that the DDA chose to sit over the recommendations and did not issue formal orders of allotment could not rob the appellants of their valuable right to such allotment. In a nutshell, the case of the appellants was that the decision taken by the DDA in the year 2002, in favour of the appellants, upon consideration of all the relevant materials and factors, gave rise to substantive legitimate expectations in their minds that the allotment for alternative sites would be made in favour of the appellants. Allegations of discrimination were also levelled against the DDA, inter alia, stating that six-seven named petrol outlets were given alternative lands even though they were not operating on the lands allotted by the DDA.6. The stand of the DDA before the High Court was that its policy and guidelines of 1999 for re-sitement of petrol outlets and gas godowns had been revised in June, 2003, superceding all its earlier policies on the subject. As per the new policy, re-sitement was permissible only when the land of an existing outlet was utilized for a planned proposal/scheme directly necessitating its closure; as per its policy the DDA has to dispose of land for petrol outlets through competitive mode of tender or auction and, in any case, the new policy does not contain any provision for allotment of an alternative site for an existing petrol pump located on private land or land allotted by other agency such as the AAI; that the internal notings or communications with the DDA are of no relevance and consequence till a final decision was taken and communicated to the concerned parties. In the present case though the proposals of other Government Agencies were considered, no final decision was taken and communicated by the DDA to the appellants. As regards the approval by the Technical Committee or other officials, the stand of the DDA was that till a final decision was taken by the competent authority i.e. the Vice Chairman and communicated to the appellants, there was no question of any vested right accruing in favour of the appellants, merely on the basis of recommendations of the officials of the DDA.7. None of the contentions urged on behalf of the appellants found favour with the learned Single Judge of the High Court. The learned Judge, by a well reasoned order, came to the conclusion that the appellants could not claim an enforceable right merely on the basis of the proposal leading to the recommendation by the Technical Committee as it did not amount to an order or decision of the DDA, particularly when its competent authority had rejected the request of the appellants. The learned Judge also observed that at best the appellants had a mere expectation of being considered for re-sitement. The stand of the DDA that in view of the fact that a new policy had been formulated in June, 2003, it was within its right to apply the same was also found to be in order. Thus, the learned Judge found that the DDA had acted fairly and reasonably in rejecting appellants prayer for re-sitement. Accordingly, both the writ petitions were dismissed.8. Aggrieved by the said order, the appellants preferred Letters Patent Appeals under Clause X of the Letters Patent as applicable to the High Court of Delhi. Both the appeals having been dismissed, the appellants have preferred this appeal.

Court's reasoning:
Having bestowed our anxious consideration to the facts in hand, in our judgment, the doctrine of legitimate expectation, as explained above, is not attracted in the instant case. It is manifest that even under the 1999 policy, on which the entire edifice of appellants substantive expectation of getting alternative land for resitement is built does not cast any obligation upon the DDA to relocate the petrol pumps. The said policy merely laid down a criterion for relocation and not a mandate that under the given circumstances the DDA was obliged to provide land for the said purpose. Therefore, at best the appellants had an expectation of being considered for resitement. Their cases were duly considered, favourable recommendations were also made but by the time the final decision-making authority considered the matter, the policy underwent a change and the cases of the appellants did not meet the new criteria for allotment laid down in the new policy. We are convinced that apart from the fact that there is no challenge to the new policy, which seems to have been conceived in public interest in the light of the changed economic scenario and liberalized regime of permitting private companies to set up petrol outlets, the decision of the DDA in declining to allot land for resitement of petrol pumps, a matter of largesse, cannot be held to be arbitrary or unreasonable warranting interference. Moreover, with the change in policy, any direction in favour of the appellants in this regard would militate against the new policy of 2003. In our opinion, therefore, the principle of legitimate expectation has no application to the facts at hand.