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APHC010053952024

IN THE HIGH COURT OF ANDHRA

PRADESH :: AMARAVATI

(Special Original Jurisdiction)

TUESDAY ,THE TWENTY SEVENTH DAY

OF FEBRUARY

TWO THOUSAN D AND TWENTY FOUR

[

3463

]

PRESENT

THE HONOURABLE SRI JUSTICE G.NARENDAR

THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY

WRIT APPEAL Nos:107, 108, 109, 110, 111 and 112 OF 2024

W.A.No.107 of 2024

Between:

STATE OF ANDHRA PRADESH AND OTHERS ...APPELLANT(S)

AND

Kodepati Karuna ...RESPONDENT(S)

Counsel for the Appellant(s):SRI.Ponnavolu Sudhakar

Reddy, ADDL ADVOCATE GENERAL (AP)

Counsel for the Respondents: Sri B.Adinarayana Rao,

Learned Senior Counsel, Sri Sai Sanjay Suraneni, and Sri

Karumanchi Indraneel Babu

The Court made the following:

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COMMON JUDGMENT :- (per Hon’ble Sri Justice G.Narendar)

1) Heard Sri. Ponnarolu Sudhakar Reddy, learned

Additional Advocate General, on behalf of the Appellants in all

the appeals & Sri.B. Adinarayana Rao, learned Sen ior

Advocate, assisted by Sri. Sai Sanjay Suraneni, in the lead

appeal & Sri.Karumanchi Indraneel Babu, learned Advocate,

appearing for the Respondents in the connected appeals.

2) The Appellants are the State, represented by the

Department of Municipal Admi nistration and Urban

Development, the A.P. Capital Region Development Authority,

the Special Deputy Collector and Competent Authority, and

the Commissioner, who is the author of the impugned notice.

3) The Appellants are before this Court being agitated by

the Interim Order, dated 25.01.2024, passed by the learned

Single Judge, which reads thus:

“In view of the same, re allotment plots

proposed shall go on in respect of others. The

authority shall adhere to the procedure as per

Rule 11(3) of the Rules. The authority shall not

cancel the plots, already allotted to the

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petitioners in the above writ petitions till a

decision is rendered by this Court.”

4) It is the case of the Appellants that the Petitioners, who

are land losers, who have been allotted re-constituted plots

outside the land pooling scheme area, contrary to the terms of

the Scheme and the Act. That the land losers are entitled for

allotment of re-constituted plots, only within the area covered

by the land-pooled under the scheme and are not entitled for

any allotment outside the same much less in the LA area or

out of the lands acquired separately under the Land

Acquisition act.

5) The learned Additional Advocate General has placed

reliance on several provisions of law as well as several

covenants of the agreement executed between the land losers

and the State.

6) Per contra, the learned Senior Advocate appearing on

behalf of the Respondents, that is, some of the Petitioners,

asserts that the power of cancellation or revocation of

agreement is not absolute and that the power is contingent on

the existence of certain pre-conditions.

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7) We have gone through the material papers and the

pleadings. Admittedly, the fact is that the Petitioners are land

losers, which lands form part of the Capital City Area. The

land losers under the Scheme of the Act are entitled for

compensation in terms of the Scheme of the Act. This is the

undisputed position.

8) The crux of the disputed in the instant batch of writ

petitions is;

“Whether the allotments of re-constituted plots can also

be outside the „scheme area‟ or only within the „scheme

area‟; or

“Whether the land losers are entitled to allotment of re-

constituted plots, from out of the lands, which are the

subject matter of acquisition under the Land

Acquisition Act”;

„Whether the allotments can be unilaterally revoked /

cancelled”;

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The determination of the above issues requires factual

aspects to be appreciated. That apart, the rights of the

parties, vis-a-vis the terms of the contract executed amongst

themselves has also to be gone into if the Writ Petitions are to

be considered and disposed of on merits, which in our

opinion is impermissible in proceedings under instituted

invoking the provisions of Article 226 of the Constitution of

India. That apart the determination of the issues noted supra

would also call upon the Writ Court to indulge in an

interpretational exercise of the covenants of the contract

executed between the parties. The fact remains that both

parties have willingly executed the contract. The cancellation

being that of allotments made by the Authority, whether the

point of competence of the Authority to act so, can be gone

into at this stage, is a moot point?. We do not propose to go

into the same and leave it open in view of order to follow.

9) A bare reading of the notice would indicate that the

decision to cancel has been taken by the authority without

affording an opportunity to the interested/aggrieved persons.

It cannot be denied that the action of the authority would

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certainly result in civil consequences. In that, an allotment

assuming it is provisional, also creates a limited or transitory

interest in respect of immovable property allotted to them,

more so when the allotment is a quid -pro-quo for

relinquishing a certain fundamental right, that is, right over

immovable property. That being the case, the authority was

required to put them on notice, invite objections, hear them

and, thereafter, ought to have passed a considered &

speaking order. The authority having failed in complying with

these basic principle of law of audi alteram partem, we are of

the opinion that the present dispute could be resolved by

directing the parties to comply with the due process of law.

10) The law in this regard is no more res integra. The law

with regard to applicability of the principles of natural justice

and mandating the compliance with the principles of audi

alteram partem has evolved decades ago. One of the earliest

and authoritative pronouncements by the Hon‟ble Apex Court

is in the case of State of Orissa v. Dr.(Miss) Binapani Dei

1.

A useful reference can be made to the observations in

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AIR 1967 SC 1269

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paragraphs 10 and 12 of the said ruling, which read as

under:

“10. The State has undoubtedly authority to

compulsorily retire a public servant who is

superannuated. But when th at person disputes the

claim he must be informed of the case of the State and

the evidence in support thereof and he must have a

fair opportunity of meeting that case before a decision

adverse to him is taken.

12. It is true that some preliminary enquiry was

made by Dr S. Mitra. But the report, of that enquiry

officer was never disclosed to the first respondent.

Thereafter the first respondent was required to show

cause why April 16, 1907 should not be accepted as

the date of birth and without recording any evidence

the order was passed. We think that such an enquiry

and decision were contrary to the basic concept of

justice and cannot have any value. It is true that the

order is administrative in character, but even an

administrative order which involves ci vil

consequences, as already stated, must be made

consistently with the rules of natural justice after

informing the first respondent of the case of the State,

the evidence in support thereof and after giving an

opportunity to the first respondent of being heard and

meeting or explaining the evidence. No such steps

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were admittedly taken, the High Court was, in our

judgment, right in setting aside the order of the State.”

11) The latest ruling in this line of jurisprudence is the

ruling rendered in the case of State Bank of India v. Rajesh

Agarwal

2. The telling observations of the Bench in

paragraphs 36, 40, 41, 42, 44, 45 and 46 not only lays bare

the distinction and merit of the principle but also reflects the

imprimatur of the Hon‟ble Apex Court to the in-violability of

the principle. The above elucidation and exposition of the law

on the principle leaves no doubt in the mind of this Court as

to how this round of litigation must end. The afore-stated

paragraphs are extracted herein below for the sake of

convenience.

“36. We need to bear in mind that the principles of

natural justice are not mere legal formalities. They

constitute substantive obligations that need to be

followed by decision -making and adjudicating

authorities. The principles of natural justice act as a

guarantee against arbitrary action, both in terms of

procedure and substance, by judicial, quasi-judicial,

and administrative authorities. Two fundamental

principles of natural justice are entrenched in Indian

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(2023) 6 SCC 1

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jurisprudence : (i) nemo judex in causa sua, which

means that no person should be a Judge in their own

cause; and (ii) audi alteram partem, which means that

a person affected by administrative, judicial or quasi-

judicial action must be heard before a decision is

taken. The courts generally favour interpretation of a

statutory provision consistent with the principles of

natural justice because it is presumed that the

statutory authorities do not intend to contravene

fundamental rights. Application of the said principles

depends on the facts and circumstances of the case,

express language and basic scheme of the statute

under which the administrative power is exercised, the

nature and purpose for which the power is conferred,

and the final effect of the exercise of that power. [Union

of India v. J.N. Sinha, (1970) 2 SCC 458]

40. The process of forming an informed opinion under

the Master Directions on Frauds is administrative in

nature. This has also been acceded to by RBI and

lender banks in their written submissions. It is now a

settled principle of law that the rule of audi alteram

partem applies to administrative actions, apart from

judicial and quasi-judicial functions. [A.K. Kraipak v.

Union of India, (1969) 2 SCC 262; St. Anthony's College

v. Rev. Fr. Paul Petta, 1988 Supp SCC 676 : 1989 SCC

(L&S) 44; Uma Nath Pandey v. State of U.P., (2009) 12

SCC 40 : (2010) 1 SCC (Cri) 501.] It is also a settled

position in administrative law that it is mandatory to

provide for an opportunity of being heard when an

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administrative action results in civil consequences to a

person or entity.

41. In State of Orissa v. Binapani Dei [State of Orissa v.

Binapani Dei, AIR 1967 SC 1269] , a two-Judge Bench

of this Court held that every authority which has the

power to take punitive or damaging action has a duty

to give a reasonable opportunity to be heard. This

Court further held that an administrative action which

involves civil consequences must be made consistent

with the rules of natural justice : (AIR p. 1271, para 9)

“9. … The rule that a party to whose prejudice an

order is intended to be passed is entitled to a

hearing applies alike to judicial tribunals and

bodies of persons invested with authority to

adjudicate upon matters involving civil

consequences. It is one of the fundamental rules

of our constitutional set-up that every citizen is

protected against exercise of arbitrary authority

by the State or its officers. Duty to act judicially

would therefore arise from the very nature of the

function intended to be performed : it need not be

shown to be super-added. If there is power to

decide and determine to the prejudice of a person,

duty to act judicially is implicit in the exercise of

such power. If the essentials of justice be ignored

and an order to the prejudice of a person is made,

the order is a nullity. That is a basic concept of

the rule of law and importance thereof transcends

the significance of a decision in any particular

case.”

42. In Maneka Gandhi v. Union of India [Maneka

Gandhi v. Union of India, (1978) 1 SCC 248] , a seven-

Judge Bench of this Court held that any person

prejudicially affected by a decision of the authority

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entailing civil consequences must be given an

opportunity of being heard. This has been reiterated in

a catena of decisions of this Court.

44. In Mohinder Singh Gill v. Chief Election Commr.

[Mohinder Singh Gill v. Chief Election Commr., (1978) 1

SCC 405] , a Constitution Bench of this Court held

that “civil consequences” cover infraction of not merely

property or personal rights but of civil liberties,

material deprivations, and non-pecuniary damages. In

that case, the Court held that denial of a democratic

right to cast a vote inflicts civil consequences. In D.K.

Yadav v. J.M.A. Industries Ltd. [D.K. Yadav v. J.M.A.

Industries Ltd., (1993) 3 SCC 259 : 1993 SCC (L&S)

723] , a three-Judge Bench of this Court observed that

“everything that affects a citizen in his civil life inflicts

a civil consequence”.

45. In Canara Bank v. V.K. Awasthy [Canara Bank v.

V.K. Awasthy, (2005) 6 SCC 321 : 2005 SCC (L&S)

833] , a two-Judge Bench of this Court succinctly

summarised the history, scope, and application of the

principles of natural justice to administrative actions

involving civil consequences in the following terms :

(SCC pp. 331-32, para 14)

“14. Concept of natural justice has undergone a

great deal of change in recent years. Rules of

natural justice are not rules embodied always

expressly in a statute or in rules framed

thereunder. They may be implied from the nature

of the duty to be performed under a statute. What

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particular rule of natural justice should be

implied and what its context should be in a given

case must depend to a great extent on the fact

and circumstances of that case, the framework of

the statute under which the enquiry is held. The

old distinction between a judicial act and an

administrative act has withered away. Even an

administrative order which involves civil

consequences must be consistent with the rules of

natural justice. The expression “civil

consequences” encompasses infraction of not

merely property or personal rights but of civil

liberties, material deprivations and non-pecuniary

damages. In its wide umbrella comes everything

that affects a citizen in his civil life.”

(emphasis supplied)

46. There is a consistent pattern of judicial thought

that civil consequences entail infractions not merely of

property or personal rights, but also of civil liberties,

material deprivations, and non-pecuniary damages.

Every order or proceeding which involves civil

consequences or adversely affects a citizen should be

in accordance with the principles of natural justice.”

12) On being queried, the Appellants have consented to take

the process further by complying with due process of law and

by strictly adhering to the principles of natural justice. Per

contra, the learned Counsels for the Respondents have stated

that the impugned proceedings i.e., decision of the authority

to cancel the agreement be set-aside and the authority be

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directed to start the process afresh in compliance with the

mandate of principles of natural justice.

13) In that view of the matter, we are of the considered

opinion that the Writ Appeals could be disposed of by placing

the submissions of the learned Counsels on record.

14) Accordingly, the Writ Appeals are disposed of by

quashing the impugned notice bearing Rc .

No.47/2023/LANDS, dated 23.01.2024. The quashing of

notice shall not be a prohibition for the authority to

recommence the process. In the event the Authority desires

to re-commence the process; it,

i). shall issue notices to all the individuals to show

cause against the action proposed to be taken;

ii). the authority shall grant 15 days time to the

individuals to submit their objections/statements;

iii). the authority shall thereafter fix a date of hearing,

which shall be after the lapse of at-least three [03] weeks

from the date of submission of objections/statements .

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The same shall be communicated to the parties by way of

written intimation;

iv). the authority shall thereafter hear the parties

conclude the hearing by a speaking order; and

v). No order as to costs.

15) It is made clear that, it is open for the Petitioners to

raise all legally permissible objections. It is further clarified

that the above order shall not be construed as a

pronouncement on the merits of the case or the grounds

canvassed by the parties.

16) The time schedule would commence one week from the

date of receipt of this Common Judgment .

17) In view of the above consensus in drawing this

Judgment, the Writ Petitions also stands disposed of in the

above terms.

18) As a sequel, miscellaneous petitions, if any, pending

shall stand closed.

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_________________

G.NARENDAR , J

_____________________

NYAPATHY VIJAY , J

Date: 27.02.2024

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THE HON’BLE SRI JUSTICE G.NARENDAR

AND

THE HON’BLE SRI JUSTICE NYAPATHY VIJAY

W.A. No. 107 of 2024

W.A. No. 108 of 2024

W.A. No. 109 of 2024

W.A. No. 110 of 2024

W.A. No. 111 of 2024

AND

W.A. No. 112 of 2024

(Common Judgment of the Division Bench delivered by

the Hon‟ble Sri Justice G.Narendar)

Date: 27.02.2024

Sm.