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IN THE SUPREME COURT OF INDIA Reportable

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.4036-4040 OF 2007

Bhubaneswar Development Authority & Anr. Appellants

Versus

Adikanda Biswal & Ors. Respondents

O R D E R

1.The question that arises for reconsideration in these

Appeals is whether the methodology adopted by Bhubaneswar

Development Authority (hereinafter shall be referred to as

'BDA') in allotment of 45 plots situated within the city

of Bhubaneswar to the citizens of Orissa on “First Come

First Served” basis on out-right purchase, can be said to

be just, proper and legally tenable method.

2.Advertisements were issued by the Appellants on

07.01.2000 in daily local newspapers published in Orissa

namely, 'The Samay', 'The Samvad' and 'The Dharithri',

having wide circulation, for allotment of plots, on the

terms and conditions mentioned in it, which we shall deal

with later.

3.The advertisement shows that 45 plots were available

for allotment on “First Come First Served” basis under the

Scheme framed by BDA, having a plot size of 2400 sq.ft.

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(60' X 40') in Chandrasekharpur residential area at a cost

of Rs.2.40 lakhs only that is at the rate of Rs.100/- per

sq.ft. The advertisement further contemplates that the

persons interested in out-right purchase would get

priority in allotment of plot and they had to submit a

bank draft drawn on Oriental Bank of Commerce, BDA Branch,

Akash Sova Building, Bhubaneswar. It further contemplates

that the Applications could be submitted on plain paper

with the original Challan but general terms and conditions

of allotment of plots, applicable to other schemes would

be applicable to the present Scheme launched by BDA.

4.Pursuant to the aforesaid advertisement, having been

issued in the three daily local newspapers of Orissa as

mentioned hereinabove, on 07.01.2000, 58 applicants

deposited full amount together with application and other

prescribed details on out-right purchase. Three applicants

submitted their applications on 08.01.2000 and one each on

10.01.2000 and 11.1.2000 along with a sum of Rs.2.40 lakhs

each.

5.The 'Prajatantra' newspaper had published a news-item

under the heading 'BDA's Millennium Deceit'. The said

publication indicates that it has criticised the manner

and methodology under which the 45 plots were sought to be

allotted to the applicants. It alleged that it was with an

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intention to benefit the pre-determinated and pre-decided

close persons of BDA's officials. It further suggests that

such an action of the BDA calls for high level inquiry

into the matter.

6.On account of the aforesaid news-item having been

published in the 'Prajatantra' newspaper, a letter was

addressed by the Secretary to the Lokpal of Orissa on

15.01.2000 to the Vice Chairman, Bhubaneswar Development

Authority. He wanted to have a copy of the original

advertisement in respect of the plotted development scheme

mentioned therein. He also wanted a copy of the earlier

advertisement in respect of the core housing scheme at

Jayadev Vihar square for the kind perusal of the Hon'ble

Lokpal. This letter was issued after the initial

discussions were held between the Secretary and Lokpal on

earlier occasion. But nothing happened thereafter for a

long time.

7.On 16.05.2000, Secretary of the Department of Urban

Development, Government of Orissa, gave a proposal to BDA

to cancel the process of allotment of plots. The matter

was placed before the BDA in its 76

th

Authority Meeting

held on 16.05.2000. It was taken up as Item No.23/76.

Various pros and cons of the same were discussed by the

BDA on the said date. Thereafter, a conscious decision was

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taken by the BDA on the same day which reads as under :

“Item No.23/76 : Allotment of left over plots in

Niladri Vihar, Chandrasekharpur.

The Committee decided that under the above

circumstances it is better to cancel the total

process and return the deposited money to all the

applicants with interest @4.5%. Fresh applications be

called for by re-advertising these plots @ Rs.100/-

per sq.ft. The applicants shall deposit EMD & balance

within 15 days of allotment. One month time shall be

given for receipt of application after which on

lottery basis allotment shall made.”

8.This was also published in the newspaper 'The Samad'

on 25.06.2000 so as to bring it to the notice of those

applicants who had deposited their amount between

07.01.2000 till 11.01.2000.

9.Pursuant to the aforesaid Resolution, amounts

received by BDA were returned to the applicants together

with interest accrued thereon. We have been given to

understand that some of them have accepted the amounts

under protest, some of them have not accepted it and some

of them have accepted it without any protest.

10.On account of the cancellation of the total process

of allotment of plots by BDA, it gave rise to filing of

spate of Writ Petitions by the Applicants, who had

applied under the Advertisement issued by BDA, in the High

Court of Orissa.

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11.The said Writ Petitions came up for hearing before

the Division Bench of the High Court. The same were

disposed off by a common order on 31.1.2005. The Division

Bench has allowed the Writ Petitions filed by the

Respondents and directed the BDA to proceed further with

regard to process of allotment of developed plots to those

applicants who may fulfill other criteria as envisaged

under the general conditions fixed by the BDA under its

Scheme. It is against this judgment and order of the

Division Bench of the High Court, BDA is in appeal before

us.

12.We have accordingly heard Mr. R. S. Jena, learned

counsel along with other learned counsel appearing for

Appellants and Mr. P.S. Narasimha, learned senior counsel

and Mr. Arvind Verma, learned senior counsel with other

learned counsel appearing for Respondents at length and

perused the record.

13.Shri R. S. Jena submitted that the High Court under

Article 226 of the Constitution of India was not justified

in interfering with the decision taken by the BDA to call

for fresh applications for allotment of plots on lottery

basis rather than proceeding with the allotment on the

basis of “First Come First Served” basis. Learned counsel

submitted that there were sufficient reasons for taking

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such a decision which cannot be said to be arbitrary,

illegal or vitiated by extraneous reasons. Learned counsel

pointed out that the newspaper Prajatantra was

highlighting the public perception that there was some

foul play and favouritism in the proposed allotment of

plots by way of “First Come First Served” basis. The

Commissioner-cum-Secretary of H & UD Department had also

suggested that the whole process be cancelled and the

housing plots be auctioned. Learned counsel also pointed

out that the Lokpal had also proposed to initiate

proceedings against BDA on the basis of news item appeared

in Prajatantra. Learned counsel submitted that taking

into consideration all those aspects, the authority took a

conscious decision to cancel the process of allotment by

way of “First Come First Served” basis and to follow the

system of allotment of plots by way of lots. Learned

counsel also submitted that there is no indefeasible right

on the applicants to get allotment of plots and that

authority has the right to adopt a system which is

transparent and complaint free. Learned counsel also made

reference to a judgment of this Court in Shrijee Sales

Corporation and Another v. Union of India - (1997) 3 SCC

398 and submitted that the supervening public equity or

public interest would override individual equity and in

such a case a Court sitting under Article 226 of the

Constitution of India is not justified in interfering with

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the decision of the authority, as if, it is sitting in

appeal.

14.Mr. P. S. Narasimha, learned senior counsel,

submitted that the High Court was justified in quashing

the decision taken by the authority in the absence of any

material to show that the decision taken for allotment of

plots following the “First Come First Served” basis was

vitiated by any extraneous or irrelevant considerations.

No material has been produced before the Court to show

that the applicants had come to know about the

advertisement prior to 7.1.2000 or that any of the BDA

officials was involved in not keeping the secrecy of such

advertisement. Learned senior counsel, on the other hand,

submitted that there were sufficient reasons to adopt the

“First Come First Served” basis since the allotment was

for left over plots. Learned senior counsel also

submitted that the “First Come First Served” basis for

allotment of housing plots is not inherently bad and that

BDA itself had adopted such a method in previous schemes.

Learned senior counsel also submitted that the Lokpal had

also not conducted any inquiry in respect of the news

items appeared in the News Daily and, therefore, the

decision of the authority dated 16.5.2000 cancelling the

entire process of allotment was bad in law and the High

Court was justified in setting aside that order. Learned

senior counsel also made reference to a judgment of this

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Court in Omkar Lal Bajaj v Union of India - (2003) 2 SCC

673, in support of his contentions.

15.We are of the view that the process of allotment of

housing plots on “First Come First Served” basis by a

statutory authority has inherent dangerous implications

and unless properly guarded, may lead to favouritism,

partiality, arbitrariness etc. So far as this case is

concerned, the advertisement informing the public that the

housing plots would be allotted on “First Come First

Served” basis appeared in three news papers on 7.1.2000

and on the very same day 58 applicants had deposited the

entire purchase price of Rs.2,40,000/- in the Oriental

Bank of Commerce, BDA, Bhubaneswar and few others on

subsequent days. Later, a News Daily “Prajatantra” on

12.1.2000 published a news item, the relevant portion of

the same reads as follows:

“BDA ’ S MILLENNIUM DECEIT

.....Surprisingly this advertisement has not been

published in other widely circulated newspapers

and on the same 7

th

day after opening of the

office for a while acceptance of application form

was closed. Is this millennium scheme not made

to make available residential plots to pre-

determined and pre-decided close persons of BDA

officials? There is a public demand for a high

level inquiry into this.”

16.The Secretary of the Office of the Lokpal, Orissa,

taking note of the abovementioned news item as directed by

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the Lokpal called for the copy of the advertisement from

the BDA, evidently to examine whether such a course was

adopted to make available the plots to pre-determined and

pre-decided close persons of the officials of BDA.

17.BDA taking note of the various complaints raised by

the public through the newspaper as well as the initiation

of proceedings by the Lokpal, placed the entire matter

before the Authority as Item No.23/76 in the 76

th

Meeting

held on 16.5.2000 in the Conference Hall of BDA,

Bhubaneswar. The Commissioner-cum-Secretary, H & UD

Department, had also suggested that the whole process

should be cancelled and the housing plots be auctioned

Taking into consideration all those aspects, the Committee

on 16.5.2000 passed a resolution to invite fresh

applications, and to follow the process of allotment, by

way of lots. The Division Bench of the High Court,

however, interfered with the decision taken by BDA and

directed BDA to proceed with the advertisement dated

7.1.2000 and to follow the method of “First Come First

Served” basis.

18.We are of the view that the High Court was not

justified in sitting in appeal over the decision taken by

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the statutory authority under Article 226 of the

Constitution of India. It is trite law that the power of

judicial review under Article 226 of the Constitution of

India is not directed against the decision but is confined

to the decision making process. The judicial review is

not an appeal from a decision, but a review of the manner

in which the decision is made and the Court sits in

judgment only on the correctness of the decision making

process and not on the correctness of the decision itself.

The Court confines itself to the question of legality and

is concerned only with, whether the decision making

authority exceeded its power, committed an error of law,

committed a breach of the rules of natural justice,

reached an unreasonable decision or abused its powers.

19.We are of the view that there are sufficient

materials before the statutory authority in cancelling the

allotment of housing plots adopting the process of “First

Come First Served” basis and to go in for allotment by way

of lots. Naturally, at least some of the officials of the

BDA, were aware prior to 7.1.2000 that BDA was intending

to follow the method of “First Come First Served” basis.

Further the advertisement dated 7.1.2000 indicated that

BDA had only nominated one bank i.e. the Oriental Bank of

Commerce, BDA, Bhubaneswar for depositing the money,

evidently, at least some of the bank officials would also

be aware prior to 7.1.2000, that the basis of allotment

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would be “First Come First Served”. Further, the

advertisement was published in three newspapers on

7.1.2000 and the publishers, the staff of those newspapers

would also be aware that the BDA would be following the

“First Come First Served” basis for the allotment of

plots. BDA, therefore had not maintained secrecy which

they were expected to maintain. It is under the above

mentioned circumstances the BDA took a conscious decision

on 16.5.2000 to cancel the earlier advertisement and to go

in for allotment of housing plots by way of lots, which

cannot be said to be arbitrary or illegal warranting

interference by a court sitting under Article 226 of the

Constitution.

20.The method of “First Come First Served” basis, as we

have already indicated, has many inherent defects and if

not properly taken care of, may lead to undesired results.

21.In our considered opinion, there appears to be a

fundamental flaw in adopting the principle of 'first come

first served' inasmuch as it cannot be said to be free of

arbitrariness and does not reflect transparency. It may be

proved beneficial to those, who may be aware of such a

procedure to be followed by B.D.A. in allotment of plots

and may cause loss to those who may genuinely be

interested in having a plot. We cannot put a seal of

approval for such a method as the same is surrounded by

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many extraneous considerations. We have to keep in mind

the larger public interest and institutional integrity

cannot be allowed to be compromised.

22.We are not taking the extreme stand that, in all

situations the method of “First Come First Served” be not

followed, but sufficient safeguards have to be taken.

For instance, the Haryana Urban Development Authority

(HUDA), in the matter of allotment of industrial plots

stated that the allotment of plots would be on ongoing

“First Come First Served” basis with the following rider:

“As per provisions made in the Industrial Policy,

the industrial plots are to be allotted on "first

come first served basis on the analogy that all

applications received within a block of one month

shall be treated at par. However, submission of

application will not entitle an applicant for

allotment of industrial plot. The allotment shall

be made after due assessment of the project

report and the financial viability and usefulness

of the project and other merits of the applicant

as decided by the Committee constituted for the

purpose.”

23.The policy of allotment of plots on “First Come First

Served” basis was, therefore, on the analogy that

applications received within a block of one month shall be

treated at par. This may make the process transparent and

give little chance for favouritism.

24.We are of the view that BDA can adopt several methods

for allotment of plots like, by way of lots, “First Come

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First Served”, auction etc., but the process should be

transparent.

25.We, are, however, of the view that so far as the

instant case is concerned, the decision taken by the

authority to cancel the process of allotment by way of

“First Come First Served” basis cannot be said to be

illegal, arbitrary or vitiated by extraneous reasons

warranting interference under Article 226 of the

Constitution of India.

26.Learned counsel appearing on behalf of BDA submitted

that though they had taken a decision on 16.5.2000 to call

for fresh applications by re-advertising those plots at

the rate of Rs.100 per sqft., they are free to allot the

housing plots at the rate of Rs.1,378 per sq ft., as

assessed by the Cost Assessment Committee considering the

bench mark value furnished by the Sub-Registrar,

Bhubaneswar, by way of lots. We express no opinion on

this aspect and leave it to the authority of BDA to act in

accordance with law.

27.Appeals are allowed and the impugned judgment of the

High Court is set aside but there will be no orders as to

costs.

................J

[Deepak Verma]

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....................J

[K. S. Radhakrishnan)

New Delhi;

February 01, 2012.

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ITEM NO.101 COURT NO.9 SECTION XIA

[Revised]

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

CIVIL APPEAL NO(s). 4036-4040 OF 2007

BHUBANESWAR DEVELOPMENT AUTHORITY & ANR. Appellant (s)

VERSUS

ADIKANDA BISWAL & ORS. Respondent(s)

(With appln(s) for vacating stay and Intervention/Impleadment)

Date: 01/02/2012 These Appeals were called on for hearing today.

CORAM :

HON'BLE MR. JUSTICE DEEPAK VERMA

HON'BLE MR. JUSTICE K.S. RADHAKRISHNAN

For Appellant(s) Mr. Radha Shyam Jena,Adv.

Mr. Siddharth Panda, Adv.

For Respondent(s) Mr. P. S. Narasimha, Sr. Adv.

Mr. Arvind Verma, Sr. Adv.

Mr. S. Ghosh, Adv.

Mr. Vishnu Shankar Jain, Adv.

Mr. Shriram Parakkar, Adv.

Mr. Suresh Tripathy, Adv.

Mr. Merusagar Samantaray, Adv.

Ms. Aditi Mohan, Adv.

Mr. Abhijit Sengupta,Adv.

Ms. Kumud Lata Das ,Adv

Mr. Dipak Kumar Jena ,Adv

Ms. Minakshi Ghosh Jena, Adv.

Mr. Sridhar Nayak, Adv.

Mr. Suvidutt Sundaram, Adv.

Mr. Rajesh Singh, Adv.

UPON hearing counsel the Court made the following

O R D E R

Application for impleadment is allowed.

These Appeals are allowed in terms of the signed

reportable order but there will be no orders as to costs.

(Sanjay Kumar-II)

Court Master

(Veena Khera)

Court Master

[Signed Reportable Order is placed on the file]