S.R. Rajappa And Ors. vs State Of Karnataka And Anr.
2002 Latest Caselaw 1956 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. The petitioners are seeking a writ of mandamus against the respondents for performing their obligations stated to be contained int eh note dated 26.7.1997, notice dated 7.7.98 and for directions to transfer the flats in favor of the petitioners located at Nasirpur which are in their occupation.

2. The petitioners state that the issue of non-availability of residential accommodation was taken up and was recorded in the proceedings of the Government of Karnataka on 15.9.92 when it was decided that in view of this problem certain incentives to the staff at Karnataka Bhawan should be granted. A monthly HRA of Rs. 1,000/- was given till they were provided with official accommodation. The respondents proposed to purchase 25 quarters for the employees of the Karnataka Bhawan and a note was circulated dated 26.7.97 for the employees to communicate their preference for occupying these quarters located at Bindapur, Dwarka Extension. The second paragraph of the note provided as under:-

"In case the employees feel that it would be worthwhile to purchase and own these quarters, the individual preference may be given for the same. The following officers are hereby directed to circulate this note among their staff and submit information in the following format before 1.8.97. Decision will be taken on first cum first serve basis along with the seniority and criteria prescribed in the Quarters allotment rules."

3. The resident commissioner of the Karnataka Bhawan thereafter wrote to the Chief Secretary on 17.11.97 regarding the purchase of DDA flats for the staff. It was stated that a request had been made to the DDA to consider allotment of some houses at Nasirpur but the same was not accepted by the DDA. However, the proposal to allot 25 houses at Bindapur was accepted. It was also stated that members of Karnataka Bhawan Employees' Association had represented that they may be allowed to purchase these houses @ Rs. 2.5 lacs by sanctioning the HPA as per eligibility. A request was made to consider sanctioning of the said sum as a special case under the condition that the advance would be paid in certain equal Installments.

4. There was some resentment over the allotment of quarters and on 1.7.98 a notice was put up by the Resident Commissioner stating that all the applications would be scrutinised and recommendations for allotment would be made giving weightage on the basis of seniority and performance of the essential services for the Bhawan. Simultaneously another notice was also issued stating that Government of Karnataka had approved grant for the purchase of 25 DDA flats and that the persons who had applied for purchase of the DDA flats may indicate whether they would like to have the flats allotted to them at rent free basis instead of down right purchase since the cost of DDA flat was Rs. 2.5 lacs whereas loan eligibility of the officials was Rs. 1 lac. The employees gave their options. The forms filled in were for flats at Nasirpur at Dwarka extension and an office memorandum was issued on 5.2.99 making the allotment of the staff quarters. On 19.2.1999 a representation was made by Karnataka Bhawan Employees' Association requesting for allotment of the flats on ownership basis. On 15.3.1999 the employees allotted flats were informed that the flats were ready for possession and thereafter the employees shifted to the allotted quarters. This was followed up by certain representations by the employees about hire-purchase basis at Nasirpur.

5. On 27.2.2001 a circular was issued by the Resident Commissioner to all the employees allotted the quarters in the following terms:

"With reference to the above, this is to inform all the KB staff who are residing at Nasirpur quarters that the Commissioner Housing DDA, New Delhi informed that the DDA has been allotting houses as a special case to State Government and Public Sector Undertakings as a bulk allotment as per their terms and conditions. The DDA houses are to be allotted to the Government and Public Sector undertakings and not to the individual occupant's. He further informed that DDA does not come into picture for allotment of houses of individuals."

6. The aforesaid quarters which were allotted being expandable houses allotted to public undertakings, it was proposed that additional accommodation would be constructed on the first floor of the quarters. The petitioners were apprehensive that the same would cause problem in the transfer of ownership of the quarters and thereafter filed the present writ petition.

7. In the counter affidavit filed by the respondents it is stated that the quarters have been provided on a license basis and that considerable amounts have been spent for improving the facilities in the quarters after taking over possession from DDA. These allotments are on seniority basis and on allotment of the quarters special HRA was not payable. It is further stated that the notes of the Resident Commissioner were based on his opinion and there was no commitment given by the Government of Karnataka at any stage to allot the quarters to the employees. It is further stated that the petitioners are relying on the correspondence exchanged between the Resident Commissioner and the Government of Karnataka and the petitioners are not privy to the said communications when proposals were submitted to the Government of Karnataka by the Resident Commissioner on the request of the employees for allotment of the flats on ownership basis. It is further stated that the representation made by the employees' association earlier was only a grievance in respect of the allotment made. These allotments have been made in accordance with the Rules of Allotment of Quarters (Dwelling Units) at Karnataka Bhawan. The full consideration has been paid by the respondents and thus flats cannot be sold since the employees who will work the Karnataka Bhawan from time to time will occupy these quarters. The flats in question are property of Karnataka Government and thus are official quarters to be provided to the employees working at the Bhawan. It is thus stated that once the services are transferred the employees have to vacate the quarters and the same can be allotted to the employees who would come in replacement.

8. In the counter affidavit a reference is also made to allotment made in the expandable housing scheme where the Government of Karnataka can build additional accommodation and action has been initiated for construction of the premises to accomdoate more employees. It is further stated that there cannot be any disparity between different employees of Bhawan which would arise if any of these quarters are sold to the petitioners.

9. At the commencement of the hearing of the writ petition the learned counsel for the respondent further stated that a letter dated 21.1.2002 has been received from 8 petitioners stating that they were not willing to prosecute the petition. It is thus stated that in any case the petition would not survive for consideration on behalf of these 8 petitioners. These are petitioners No.4, 7 to 10, 14, 19 and 20. A copy of this letter has been received on behalf of learned counsel for the petitioners on 21.1.2002 itself.

10. Learned senior counsel for the petitioner contends that the office circular and letters issued constituted an assurance and a promise to the petitioners for allotment of the flats and the principles of promissory estoppel would come into play. The respondents cannot be permitted to resile from their assurance held out to the petitioners.

11. Learned counsel for the petitioner referred to the Full Bench judgment of this court in Smt. SheeLawanti and Anr. v. DDA and Anr. . In the said judgment while dealing with the issue of allotment of flats on hire purchase basis as contained in a clause of 1982 Scheme where the allottees had registered, it was found that the respondents cannot insist for lumpsum payment for all allottees when admittedly provision has been made for 50% allotment on hire purchase basis. It was thus observed that the members of the petitioners association have acted to heir detriment on the basis of the original scheme of 1982 and the DDA cannot take an unilateral action without notice abandoning the scheme originally announced. Learned counsel for the petitioner referred to the judgment of the Supreme Court in Century Spinning and Manufacturing Company Ltd. and Anr. v. The Ulhasnagar Municipal Council and Anr. where the question of liability of public bodies to act on representations made to the public were discussed. The question to be considered was whether the arrangement entered into by the Municipality not to levy octroi duty for a period of time from the date of its imposition would amount to a solemn arrangement and assurance from which the Municipality cannot resile. The Supreme Court observed as under:-

10. There is undoubtedly a clear distinction between a representation of an existing fact and a representation that something will be done in future. The former may if it amounts to a representation as to some fact alleged at the time to be actually in existence, raise an estoppel, if another person alters his position relying upon that representation. A representation that something will be done in the future may be result in a contract if another person to whom it is addressed acts upon it. A representation that something will be done in future is not a representation that it is true when made. But between a representation of a fact which is untrue and a representation of a promise-express or implied- to do something in future, there is no clear antithesis. A representation that something will be done in future may involve an existing intention to act in future in the manner represented. If the representation is acted upon by another person it may, unless t the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law, if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereafter, but the law is not powerless to raise appropriate cases an equity against him to compel performance of the obligation arising out of his representation.

11. Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contract by a person who acts upon the promise; when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may be enforced against it is appropriate cases in equity. In Union of India and Ors. v. Indo-Afgan Agencies Ltd. this Court held that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice, relying upon the representations as to its future conduct made by the Government. This court held that the following observations made by Denning J., in Robertson v. Minister of Pensions (1949) 1 KB 227 applied in India:

"The Crown cannot escape by saying that estoppels do not bind the crown for that doctrine has long been exploded. Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action."

We are in this case not concerned to deal with the question whether Denning L.J., was right in extending the rule to a different class of cases as in Falmouth Boat Construction Co. Ltd. v.Howell (1950) 1 All ER 5387 where he observed at p. 542

"Whether Government officers in their dealings with a subject take on themselves to assume authority in a matter with which the subject is concerned, he is entitled to rely on their having the authority which they assume. He does not know, and cannot be expected to know, the limits of their authority, and he ought not to suffer if they executed it."

It may be sufficient to observed that in appeal from the judgment (Howell v. Falmouth Boat Construction Co. Ltd.)(supra) Lord Simonds observed after referring to the observations of Denning, L.J:

"The illegality of an act is the same whether the action has been misled by an assumption of authority on the part of a Government officer however high or law in the hierarchy. The question is whether the character of an act done in force of a statutory prohibition is affected by the fact that it had been induced by a misleading assumption of authority. In my opinion the answer is clearly : No."

12. If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice."

12. Learned counsel for the petitioner also referred to the judgment of the Supreme Court in H.C. Venkataswamy and Ors. v. Bangalore Development Authority and Ors. . The controversy related to the acquisition of the land by the authority for purpose of a development scheme which gave rise to certain disputes and settlement was reached incorporated in a resolution of the authority. This resolution was subsequently stayed by the State Government and the Supreme Court held that the resolution did substantial justice and it would not be fair to go back from the decision.

13. Learned counsel lastly referred to the judgment of State of H.P. and Ors v. Ganesh Wood Products and Ors. on the issue of promissory estoppel holding that the principle of promissory estoppel was not a rigid rule and the alteration of the position of a promiseon the basis of the representation made by the promisor should be such as to satisfy the court that holding the promisor to his reputation would be necessary to do justice between the parties.

14. Learned counsel for the respondents, on the other had, contends that there is no dispute about the principles of promissory estoppel but no promise has been held out to the petitioners. It was only a request made by the Employees Association which resulted in certain communication between the Resident Commissioner and the State Government. The Resident Commissioner only called for certain options. A decision was finally taken not to allot the quarters on an ownership basis and there is a valid rationale for the same since these flats have been acquired with the money of the State, are to be used by the employees working in the Karnataka Bhawan, on transfer would surrender it and would thus be occupied by the replaced employee, improvements have been carried out in the flats and further construction is proposed to increase the number of units as the allotment by the DDA is under the expandable scheme. Learned counsel for the respondent also referred to the Article 166 of the Construction of India to contend that the Resident Commissioner in any case did not have any authority to make any such allotment on ownership basis and the State Government never held out any promise to sell the flats.

15. I have considered submissions advanced by learned counsel for the parties.

16. There could be no dispute about the principles of promissory estoppel. However, in my considered view, the petitioner have failed to make out even the initial case where any promise can be stated to have been held out much less alteration of the position by the promisee, being the petitioners, to the detriment of these petitioners. There was a proposal for acquiring flats to emulate the working conditions of the employees of the Karntakata Bhawan. Discussions took place with the DDA on this aspect and the allotment was made to the State Government of units on expandable basis. No allotment was made either to the petitions nor for the petitioners. The units were further improved upon by the State Government by expending its own money and the employees working at the Bhawan were granted the facility of residence on license basis. In my considered view the whole purpose of the acquisition of these flats would get defeated if the employees allotted these flats were permitted to be granted ownership rights. This would imply that these employees would continue to occupy the flats irrespective of the fact whether they were or were not employees at Karnataka Bhawan. This was not the purpose for which these flats were acquired. Once an employee ceased to work with the Bhawan he is to vacate the quarter and the employee who would come in replacement would be considered for allotment of the quarter. The proceedings of the Government of Karnataka dated 15.9.92 referred to by the learned senior counsel for the petitioner itself states that HRA is to be paid "till they are provided with the official accommodation". It was never envisaged that the employees would be given a flat on ownership basis. If the employees are desirous of purchasing the flats it is always open for them to approach the open market or register themselves with the DDA.

17. The employees' association wanted that these flats should be transferred on an ownership basis and some discussion did take place on this account and communications were exchanged by the Resident Commissioner with the State Government. However, the State Government at no stage held out any assurance for allotment of the flats. The mere issuance of a note inviting options by the Resident Commissioner would not create any rights in favor of the petitioners as the decision was yet to be taken whether such an allotment on ownership basis should actually be made to the allottees. It is also relevant to note that the allotment was also made for occupation and never on ownership basis. It appears that when the respondents proposed to construct additional accommodation the petitioner did not want the same to be constructed and at that stage approached the court.

18. In view of the aforesaid position though there can be no doubt about the principles of promissory estoppel as espoused in the various judgments referred to by the learned senior counsel for the petitioner they would have no application in the facts and circumstances of the case. The Full Bench judgment in Sheelawanti's case (supra) was one where the scheme under which the allottees registration provided for 50% of the flats to be allotted on hire purchase basis. It was thus held that DDA cannot resile from the assurance and make all allotments on cash down basis. In State of H.P., and Ors. v. Ganesh Wood's case (supra) the Supreme Court has observed that there cannot be a rigid rule of promissory estoppel and the court has to consider whether it is a fit case where the promisor can be permitted to go back on the assurance. In the present case even if such promise has been held out it could not be said to be a promise which could have been enforced for the reason that it would defeat the very purpose of allotment of the flats and discriminate between the employees of the Karnataka Bhawan. In any case no promise was at all held out. The emphasis placed by the learned senior counsel for petitioner on Century Spinning and Manufacturing Co. Ltd.'s case (supra) is also misplaced since there was no assurance that something would be done in future. Further it provided that if a representation was made it has to be acted upon. The petitioners have not shown as to in what manner they acted on any alleged assurance of the respondents or in what manner any detriment as been caused to the petitioners.

19. I am of the considered view that no writ can be issued in favor of the petitioners to specifically perform what the petitions claim to be an agreement or assurance held out by any competent authority to the petitioners. The State Government never gave any assurance to the petitions that they would be allotted any quarters on an ownership basis conveying any final decision in this behalf.

20. The petition is devoid of any merit and is dismissed leaving the parties to bear their own costs.