Delhi High Court
Wing Commander M.P. Sethi (Retd.) ... vs Union Of India & Anr. on 12 July, 2010
Author: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: May 31, 2010
Decision on: July 12, 2010
WRIT PETITION (CIVIL) 9478/2007 & CM APPL 17858/07
WING COMMANDER M.P. SETHI (RETD.) & ORS .... Petitioners
Through: Mr. Rakesh Tikku with
Mr. Prakash Gautam, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
WRIT PETITION (CIVIL) 9525/2007 & CM APPL 17931/07
EX. N.K. KRISHAN KUMAR & ORS .... Petitioners
Through: Col. K. Digambar Singh, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
WRIT PETITION (CIVIL) 9546/2007 & CM APPL 17954/07
CHANDRO DEVI .... Petitioner
Through: Col. K. Digambar Singh, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
WRIT PETITION (CIVIL) 9568/2007 & CM APPL 17981/07
EX. HONY. CAPT BALBIR SINGH KADIAN .... Petitioner
Through: Col. K. Digambar Singh, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
WRIT PETITION (CIVIL) 6447/2008 & CM APPL 12315/08
JAGDISH PRASAD .... Petitioner
Through: Col. K. Digambar Singh, Advocate
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
6447/08, 6494/08, 6761/08, 7366/09 & 14034/09 Page 1 of 35
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
WRIT PETITION (CIVIL) 6494/2008 & CM APPL 12381/08
VIJENDER SINGH .... Petitioner
Through: Col. K. Digambar Singh, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
WRIT PETITION (CIVIL) 6761/2008 & CM APPL 13005/08
EX. HONY. SUB MAJ RAM PAL & ANR .... Petitioners
Through: Mr. Rakesh Tikku with Mr. Prakash
Gautam, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Maneesha Dhir with Ms. Preeti
Dalal and Mr. K.P.S. Kohli, Advocate
WRIT PETITION (CIVIL) 7366/2009 & CM APPL 3210/09
DEVAYANTI .... Petitioner
Through: Col. K. Digambar Singh, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
And
WRIT PETITION (CIVIL) 14034/2009 & CM APPL 16083/09
EX. SEP VIRENDER SINGH .... Petitioner
Through: Col. K. Digambar Singh, Advocate
versus
UNION OF INDIA & ANR .... Respondents
Through: Ms. Jyoti Singh, Advocate
CORAM: JUSTICE S. MURALIDHAR
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
6447/08, 6494/08, 6761/08, 7366/09 & 14034/09 Page 2 of 35
1. Whether Reporters of local papers may be
allowed to see the judgment? No
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes
in Digest?
JUDGEMENT
1. The non-renewal of the licences in respect of the shops located in the
shopping complex under the control of the Ministry of Defence, Union of
India (Respondent No. 1) in favour of the Petitioners pursuant to a policy
decision made effective from 30th April 2007, is the subject matter of the
challenge in this batch of writ petitions.
Background facts
2. The Petitioners belong to categories of ex-servicemen (and their family
members) who died either in war and/or while being in service and/or
having suffered battle casualties and/or discharge from the armed forces
and/or those armed personnel who retire after rendering full service. The
case of the Petitioners is that among various measures adopted by the
Directorate General of Resettlement („DGR‟) was the allocation of the
shops in the areas manned and managed by the Station Commander in
various localities in Delhi such as S.P. Marg, Delhi Cantt., Arjun Vihar,
Dhaula Kuan, Shankar Vihar etc.
3. It is stated that with a view to streamline the allotments made of the
above shops in the shopping complexes, the Respondents have been issuing
guidelines from time to time known as Standing Operating Procedure
(„SOP‟). In terms of Clause 6 of the SOP issued on 10th August 2001, as
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
and when any of the shops fall vacant, the Station Commander at Station
Headquarters was expected to give wide publicity through the DGR in local
newspapers. The allotment of shops was to be done on yearly basis. Clause
11 of the SOP dated 10th August 2001 provided for priorities in the
allotment of shops. Various parameters have been laid down for allotment.
On meeting such parameters a person was given a licence for a period of 11
months subject to renewal. Clause 17 of the SOP dated 10 th August 2001
reads as under:
"17. Renewal of licence deed: Renewal of licence deed
will be done on the recommendation of residential
associations, which will be obtained three months in
advance from the date of expiry of licence deed by DDA
& QMG, Station. HQ Delhi Cantt. If the
recommendations are in favour of allottee, then the
Station Commander may renew the licence deed for the
subsequent year. However, the licence deed may be
terminated at any time by the Station Commander at his
discretion."
4. According to the Petitioners, till the policy of 13th April 2007 which is
challenged in this petition was announced, as a matter of practice, the
licences were being renewed from time to time. Many of the Petitioners
have been occupying the shops in their possession for over nine years. In
fact, the Petitioners including Wing Commander M.P. Sethi and two others
in Arjun Vihar have been in occupation of their respective shops for over 21
years. It is stated that in terms of Clause 17 of the SOP only where the
Residents‟ Association did not favour any particular allottee of a shop, was
the renewal withheld. In terms of Clause 28 of the SOP a defaulting allottee
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
has to be referred to the Estate Officer for the purposes of initiation of
eviction proceedings under the Public Premises (Eviction and Unauthorized
Occupants) Act, 1971 („PP Act‟).
5. It is stated that 1982 onwards many of the Petitioners were allotted their
respective shops and licence deeds were also executed. The licence deeds
were last extended in the year 2000 and were to expire in the latter part of
2007. It is stated that the Petitioners had legitimate expectation that the
licence deeds may indeed be renewed. However, on 13th April 2007 the new
policy effective from 30th April 2007 was issued.
6. Clause 18 of the new policy reads as under:
"18. Renewal of licence deed: Renewal of licence deed
will be done on the recommendation of residential
associations, which will be obtained three months in
advance from the date of expiry of licence deed by AQMG,
Station Head Quarter, Delhi Cantt. If the recommendations
are in favour of allottee, then the Station Commander may
renew the licence deed for the subsequent year. However,
the licence deed may be terminated at any time by the
Station Commander at his discretion. No extension beyond
five years will be given under any circumstance. The same
person can apply after a gap of minimum three years of
clear break (not running in any Army Colony of NCR)."
7. In terms of the above Clause 18, the right to get the licences renewed
immediately on the expiry of five years has been withdrawn. The allottees
are expected to apply again after a minimum break of three years. In terms
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
of the revised policy, the Respondents issued letters to the Petitioners
declining renewal of licences. The copies of letters requiring the Petitioners
to vacate the shops under their occupation have been enclosed with the
petition.
8. Petitioner Nos. 1, 2 and 4 to 9 [Wing Commander M.P. Sethi (Retd.), Ex.
JWO A.S. Chadha, Ex. GNR Narender Dev, Ex. Naik Unni Krishnan-TP,
Ex. Sepoy Dharam Chand, Smt. Chandro Devi, Ex. Subedar R.K. Pawar,
Smt. Vimla Devi] in W.P. (C) 9478 of 2007; Petitioner Nos. 1, 2, 5, 9, 12,
14, 15 and 17 [Ex. N.K. Krishan Kumar, Lt. (Retd.) Colonel Rameshwar,
Mrs. Veena Muldiyar, Smt. Narangi Devi, Ex. Sigmn Ishwar Singh, Hony.
Capt. (Retd.) Dhanraj Sharma, Mrs. Shakuntla Devi and Smt. Lilawati] in
W.P. (C) 9525 of 2007; Smt. Chandro Devi, wife of late N.K. Hoshiyar
Singh, the Petitioner in W.P. (C) 9546 of 2007; Ex. Hony. Capt. Balbir
Singh, the Petitioner in W.P. (C) 9568 of 2007 were served vacation notices
dated 23rd November 2007 requiring the said Petitioners to vacate the shops
in their possession within one month. However, the Court is informed by
the Respondents that Chandro Devi, Petitioner No. 7 in W.P. (C) 9478 of
2007 has already vacated the shop in her possession.
9. Shobhawati Devi, the wife of Ex. Hony Captain Satpal Yadav, Petitioner
No. 11 in W.P. (C) 9478 of 2007 made a representation to the Respondents
requesting them to transfer the licence to the shop allotted to her deceased
husband to her. On 3rd October 2007, the Respondents in reply to this
representation dated 17th August 2007 stated that there was no policy to
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
transfer the allotted shop from the original allottee to the spouse in case of
the former‟s death. The licence for the shop allotted to her deceased
husband had already expired on 19th August 2007. However, on
compassionate grounds she was allowed to continue till 31 st December
2007. This stand was reiterated by the Respondents by a communication
dated 13th November 2007 in reply to the Petitioner‟s representation dated
17th November 2007.
10. Shri Magan Lal, Petitioner No. 10 in W.P. (C) 9478 of 2007 whose
licence expired on 27th October 2007 and Shri Havman Singh, Petitioner
No. 18 in W.P. (C) 9525 of 2007 whose licence expired on 25 th November
2007 received vacation notices dated 27th November 2007 requiring them to
vacate the shops in their respective possession within one month. Shri M.P.
Singh, Petitioner No. 3 in W.P. (C) 9478 of 2007 received a similar notice
on 28th November 2007 after his licence expired on 27th November 2007.
The licence of Shri Jagdish Prasad, the Petitioner in W.P. (Civil) 6447 of
2008 expired on 14th August 2007. He was served a vacation notice by the
Respondents on 21st May 2008 asking him to vacate the shop in his
possession by 25th June 2008. Similarly, the licence of Shri Virender Singh,
the Petitioner in W.P. (C) 6494 of 2008 expired on 19 th January 2008. He
was served a vacation notice dated 3rd May 2008 asking him to vacate the
shop in his possession by 25th June 2008. However, the Respondents
informed the Court that the Petitioner in W.P. (C) 6494 of 2008 has already
vacated the shop. The licence of Shri Rampal, Petitioner No. 1 in W.P. (C)
6761 of 2008 expired on 20th April 2008 and of Shri Kameshwar Prasad
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
Singh, Petitioner No. 2 in W.P. (C) 6761 of 2008 on 28th February 2008.
They were served vacation notices on 8th May and 24th April 2008,
respectively, requiring them to vacate the shops in their possession by 16 th
September 2008. Smt. Devyanti Devi, the Petitioner in W.P. (C) 7366 of
2008 was issued a vacation notice on 15th January 2009 when her licence
had expired on 6th July 2008. She was required to vacate the shop by 2 nd
February 2009.
11. The licence of Shri Virender Singh, the Petitioner in W.P. (C) 14034 of
2009 expired on 31st January 2007. However, by a letter dated 21st
December 2006 the Respondents had cancelled his licence under para 15 of
the licence deed due to subletting of the shop. By a letter dated 30th
November 2007 he was asked to vacate the shop within 30 days.
Consequently, the Respondents served an eviction notice dated 18th August
2008 on the Petitioner.
12. Lt. Col. (Retd.) B.M. Kapoor, Petitioner No. 4 in W.P. (C) 9525 of 2007
was served a vacation notice on 19th December 2007 while his licence had
expired on 7th July 2007. Similarly, Lt. Col. (Retd.) D.K. Debnath,
Petitioner No. 1 in W.P. (C) 9525 of 2007 was served a vacation notice
dated 14th August 2007 when his licence expired on 24th March 2008.
Petitioner Nos. 3, 6, 7, 11, 13 and 16 in W.P. (C) 9525 of 2007 have also
been served with similar vacation notices, which are impugned, after expiry
of their licences.
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
The Petitioners' case
13. It is submitted by the Petitioners that the very purpose of DGR
allocating shops in favour of the Petitioners was to enable them to have
some reasonable means of subsistence. It is stated that continued allotment
was a rule and non-renewal an exception. Continued allotment
automatically followed if there were no negative reports from the residents‟
associations. It is stated that primarily the Petitioners are selling grocery
items, eatables, vegetables, limited items of electrical goods etc. in their
shops. These are made available to the residents of the localities where
defence shopping complexes are located, at reasonable rates. The basic idea
is to make available things of day-to-day use to the residents of these areas
near their door steps. The very purpose of allocating these shops to various
allottees was to enable the servicemen and their family members to earn a
decent living.
14. It is stated that the new policy made effective from 30th April 2007
gives a complete go-by to this philosophy. It introduced a break in the
continuity of their rehabilitation process with the Respondents pressurising
the Petitioners to vacate the shops.
15. At the initial date of hearing i.e. on 20th December 2007, this Court
passed the following order:
"Issue notice. Ms. Jyoti Singh, Advocate accepts notice
on behalf of Respondents. Counter affidavit shall be filed
within two weeks. Rejoinder, if any, may be filed within
two weeks thereafter.
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
List on 8th February 2008.
CM APPL 17850/2007 (stay)
I have considered the materials on record. The applicants‟
grievance is that they were allotted the premises by the
Respondents as a measure of rehabilitation, on account of
their being ex-serviceman or being war widows. It is
contended that sudden change of policy has gravely and
irreparably affected them. Learned counsel for the
Petitioners relied upon the documents. They suggest that
Respondents took a conscious decision that the allotment
in case of rehabilitation was understood as not to the
subject of later cancellation.
However, learned counsel for the Respondents has
disputed the applicability of the documents. According to
her, the letter pertained to allotment of premises in
Regimental Areas. It is not disputed that the allotment of
these spaces were given as a measure of rehabilitation to
the Petitioners. The objective of the new Scheme, it is
emphasized, is to ensure availability of these premises to
as many beneficiaries as possible, having regard to the
limited resources available with the force. It is contended
that a large number of applications were filed and are
pending consideration.
While the discretion of public authority to allot the
premises within its possession, control and ownership and
the parameters for such treatment can never be denied yet
the question here appears to be one of balancing
competitive disadvantages, as it were. The debate here is
whether having allotted the premises, as a measure of
rehabilitation, the Respondents can, after some time
reverse that process and insist that such allottees who
admittedly were eligible for the benefit should return the
premises and wait for three more years to claim allotment
for the same and other such spaces. I am of the opinion
that while the Respondents‟ power to frame a policy
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
cannot be questioned yet the considerations which the
authority has to keep in this regard, i.e. the level of
prosperity or income attained by the allottees who were
given premises earlier, the sufficiency of such income to
make them tide order the difficult situation and other
objective factors can certainly be gone into under Article
226 of the Constitution.
In view of the above, the Respondents are hereby
restrained from taking any steps to dispossess the
Petitioner during the pendency of this writ petition."
Case of the Respondents
16. In the counter affidavit filed in W. P. (C) 9546 of 2007, which is more
or less similar to the counter affidavit filed in other petitions, the
Respondents have categorically stated that "the dominant purpose of these
shopping complex/centres is the welfare of the servicemen and their
families residing in the vicinity thereof and NOT resettlement of a war
widow, a widow, battle casualty and ex-servicemen which is only ancillary
rather than allot shop to outsiders. It may be further re-emphasised that the
shops in the shopping complexes/shopping centres are allotted on
contractual basis on the normal rental basis and no promise has been held
out to the allottees that their licence will be necessarily renewed/extended
in perpetuity."
17. The rationale for changing the policy as set out in the SOP dated 10th
August 2001 is attributed to the requests made by a large number of war
widows, widows, battle casualties and ex-servicemen approaching the
Respondents for allotment of shops in shopping complexes/shopping
centres. It is stated that in a period of five months, 47 such applications
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
were received but none of them could be entertained since the existing
allottees were continuing since inception and the number of shops available
was limited. The reasons for the change in the policy as introduced in the
SOP dated 13th April 2007 are stated to be the following:
(a) assisting those families registered in the waiting list for allotment
of shops.
(b) illegal sub-letting of shops by the existing allottees whose
licences have been kept renewed for a long duration.
(c) the fact that there is no increase in the number of shopping
complexes even while the demand for allotment keeps increasing.
(d) since the allotment of shops is a welfare measure, it is necessary
to rotate the allocation so that a larger number of ex-servicemen are
benefitted.
18. The Respondents claim that the changed policy was made known to all
licencees including the Petitioners in June 2007. In the additional affidavit
filed on 22nd February 2010, the Respondents have drawn a distinction
between unit shops (Regimental Shops) and shops in shopping
centres/complexes which are located in the "main married complex".
Enclosed with the affidavit is a copy of the „Scales of Accommodation
1983 („SOA 1983‟). Regimental shops are authorized by para 3.41 of the
SOA 1983 and provide for trades such as tailor, boot maker (EBR), cycle
repair and grocer (unit baniya and wet canteen). These unit shops "are
meant purely for troops and their families as a welfare activity and are
located in unit lines wherein civilian population has limited or no access."
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
19. The additional affidavit proceeds to state that shops in shopping
centres/complexes as described in para 3.42.1 of SOA 1983 and are located
at military stations "where no civil shopping complex exists within a
reasonable distance from the main married complex. The trades can be
selected out of categories like aerated water, barber, book and stationary,
car and scooter repair, cloth, chemist and druggist, dry cleaner, cycle, gas,
furniture, restaurant, milk dairy, bakery, vegetable and fruits and other
trades which meet the requirements of the troops and their families." It is
stated that these shops have a clientele of the dependent civilian population
also.
20. The Respondents point out that there are two sub-categories of shops in
shopping complexes/centres. One category is covered by para 3.42.1 of
SOA 1983 which are created on defence lands from government funds. The
other category is shops created on defence lands using non public funds. On
14th September 2008, the Ministry of Defence („MoD‟) Government of
India, brought out „Guidelines for running shopping centres/complexes and
unit shops‟. Para 8(b) of the guidelines states that the Defence Shopping
Centres/Complexes (Maintenance and Administration) Rules, 2006 („DSC
Rules 2006‟) framed by the MoD and issued on 13 th June 2006 would be
applicable to both categories of shopping complexes, i.e., those created with
government funds and those with non public funds.
21. The DSC Rules, 2006 make it clear that they do not apply to
Regimental shops created exclusively for military personnel and their
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
families. Rule 2(c) defines a shopping complex to mean "a composite area
comprising shops established on A-1 or analogous defence land under the
management of the Army/Navy/Air Force but would not include
Regimental shops created exclusively for military personnel and their
families." Under Rule 3(a) the existing allottees were allowed to continue
till the expiry of their licence period and such of those in unauthorized
occupation of the shops, i.e., where the period of licence has expired, would
be given six months time to vacate in terms of Rule 3(c) failing which the
Estate Officer would initiate action to evict them in accordance with law.
22. Under Rule 7 no transfer was permissible except in case of demise of
the allottee, in which case it would be transferred to the dependent/legal
heir for the residual period of the licence. Under Rule 12, 60% of the shops
in each shopping complex were to be reserved in the order of priority as
under:
(i) war widows/widows of defence personnel killed while on duty.
(ii) disabled soldier
(iii) ex-servicemen
(iv) spouses/widows of ex-servicemen.
The remaining 40% were to be allotted to the following:
(i) Government agencies including public sector undertakings and
(ii) civilians whose spouse or dependent family member do not own
any shops in the complex/military station/cantonment.
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
Any unallotted shops in the 60% quota were to be considered for being
given to the civilian category.
23. Under Rule 13, allotment was to be given under licence for a period of
three years. Further allotment was to be made "strictly under the Rules
framed herein." Under Rule 18, on termination of the licence, if the shops
were not vacated, action was to be initiated under the PP Act. Under Rule
25(a) any matter not covered by the DSC 2006 would be decided by the
MoD in consultation with the Director General of the Defence Estates and
the Headquarters of the Army/Navy/Air Force.
24. A further additional affidavit was filed on 27th April 2010 clarifying
that the shops in Army Hospital, Raj Rifle Centre, Base Hospital, Pallavi
Shopping Complex, Taurus CSD Canteen, Army Headquarters and Parade
Ground are Regimental shops to be administered by their respective
commandants. These were different from Station shopping complexes
where the shops allotted to the Petitioners were located. Statistics of the
applications received for allotment of shops and the actual allotments made
from 2005 till date have been set out to show that only 10% of the
applicants have been allotted due to unavailability of shops. The last
affidavit was filed in response to new facts stated in the Rejoinder by the
Petitioners on 30th March 2009 listing out some of the shops occupied by
civilians.
25. The Petitioners also filed an additional rejoinder affidavit on 12th May
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
2010 giving details of shops run by civilians in Delhi Cantonment.
Photographs of some of these shops were also enclosed. The basic
contention of the Petitioners is that if there is a shortage of shops for
allotment for those in the waiting list, then these civilians should be asked
to vacate.
Submissions of counsel
26. This Court has heard the submissions of Mr. Rakesh Tikku, Col. K.
Digambar Singh and Mr. Sanjay Rathi, learned counsel for the Petitioners
and Ms. Jyoti Singh, learned counsel for the Respondents.
27. The central plank of the submissions on behalf of the Petitioners is
based on the doctrine of legitimate expectation. It is submitted that the
aforementioned notices sent by the Respondents requiring the Petitioners to
vacate the shops in question are arbitrary and unreasonable. The refusal by
the Respondents to renew the Petitioners‟ licences is stated to be arbitrary
and violative of Article 14 of the Constitution when tested on the
touchstone of the doctrine of legitimate expectations.
28. There is both a procedural and substantive component to the right
asserted. The procedure followed here is that each of the Petitioners has
been given thirty days‟ advance notice to vacate and hand over vacant
possession of the premises. This is exactly what the terms of the licence
stipulate. However, it is contended that the Petitioners were not aware when
such licence was issued that there would be no renewal after five years and
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
therefore such requirement can only apply to those whose licences were
issued for the first time after the new policy dated 13th April 2007 came into
force i.e. 30th April 2007. In other words a conditionality, of non-renewal
after five years, cannot be applied retrospectively to the Petitioners. The
procedure followed by the Respondents is attacked for its unfairness. It is
submitted by the Petitioners that had they known in advance that such a
five-year rule would be applied then they could have made alternative
arrangements which according to them requires some time.
29. The doctrine of legitimate expectation is invoked as regards the
substantive content of the policy. It is contended that, notwithstanding these
were licences for a year at a time, as a matter of practice the licences were
being renewed year after year by following the pre-amended policy as
expressed in Clause 17 of the SOP dated 10 th August 2001. In other words,
there was a legitimate expectation even this time around that their licences
would be renewed. The frustration of this legitimate expectation is said to
attract Article 14.
30. Independent of the ground based on legitimate expectation, it is
submitted that the policy to restrict the initial licence period to five years,
after the licence has already been renewed in terms of the existing policy
i.e. the SOP dated 10th August 2001, is arbitrary since it runs contrary to the
very object of providing rehabilitation to the ex-servicemen and their
relatives who, having set up shops, cannot be expected to suddenly wind up
their business and move on. Given the restrictions as to the price at which
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
they can sell their commodities, and the advanced age at which some are,
they cannot be expected to find alternative means of livelihood. They
cannot be reasonably expected to have made substantial profits in the short
period that would help them to sustain themselves after losing their shops.
Also, alternative commercial space in the same area, or any other area,
would be unaffordable. They would be back to being reduced to penury
which will defeat the object of their being extended a welfare measure for
sustenance. A commercial shop has to be run on borrowings and it takes
some time to even break even. It cannot be abruptly stopped at the end of
five years just about when it is possible to make some profits. Being made
to wait for three years thereafter before re-applying, only compounds the
uncertainty and is based on a non-understanding of how the retail trade in
goods works. It is submitted that the period of five years, which has been
arbitrarily fixed, does not subserve the purpose and object of the welfare
measure and therefore is also irrational. Forcing the Petitioners to make
way for other ex-servicemen who may be waiting in the queue, and then
granting them shops for a maximum period of five years, does not help
either group of ex-servicemen. It is submitted that there is no supervening
public interest that justifies such a drastic change in the policy. The answer
to the demand for allotment of such shops was perhaps to construct more
shops or decrease the existing quota of 40% for civilians instead of
curtailing the licence period of the shops given to the ex-servicemen.
31. The other limb of this argument is that there cannot be a discrimination
between „regimental‟ shops and shops in a commercial shopping complex
as both are after all as a measure of welfare and are on defence land.
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
32. Appearing for the Respondents Ms. Jyoti Singh, learned counsel first
submits that the cause of action in the present petition admittedly arises out
of and seeks the continuation of a contractual agreement and therefore a
writ petition under Article 226 of the Constitution seeking such relief is not
maintainable. Secondly, it is submitted that the Petitioners have an
efficacious remedy under the PP Act. Thirdly, it is submitted that the
Petitioners have not come with clean hands and are trying to mislead the
Court that they have been allotted "regimental shops" as against shops in a
shopping complex. It is pointed out that policy for allotment makes a clear
distinction between „regimental shops‟ and shops in a „shopping complex‟.
While the former may be said to be allotted by way of rehabilitation, the
shops in a shopping complex are for the families residing in the vicinity
where there are no shops at a reasonable distance.
33. Ms. Singh emphasized that the shops in question were given under
licence deeds for terms of 11 months renewable at the discretion of the
Station Commander. It is submitted that there is a growing demand from
the very same categories of ex-servicemen and their family members, who
have become eligible later for the allotment of shops on licence basis. It is
claimed that there is a waiting list of such prospective allottees. Given that
the number of shops are limited, and in order to ensure equal treatment, the
policy of 30th April 2007 has been devised. It is pointed out that there are
other ex-servicemen equally deserving in the queue and cannot possibly be
accommodated unless the current occupiers are asked to vacate. It is denied
that the non-refusal to renew the licences is either arbitrary or mala fide as
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
alleged. It is further denied that any specific unequivocal promise was made
or assurance given to any of the allottees that the shops would be allotted
for life or in perpetuity.
34. Statistics giving details of allotment of shops in the shopping complexes
have been produced by the Respondents which show that against 87
applications received in the year 2005 only 4 shops were allotted; against
37 applications received in the year 2009, 3 shops were allotted, and 26
applications have already been received for 2010, while there has been no
allotment since there is no vacancy.
35. With this background of facts, this Court is called upon to examine
whether the policy decision announced by the Respondents effective 30th
April 2007 is arbitrary or unreasonable and whether the non-renewal of the
licences in favour of the Petitioners is arbitrary or unreasonable.
Preliminary objections as to maintainability
36. The scope of the jurisdiction of this Court under Article 226 of the
Constitution to review a policy decision is limited. The Court normally does
not interfere in the matters of policy except where it directly impacts on
fundamental rights. The right being asserted here is essentially the right to
be treated fairly and reasonably. To that extent the judicial review of the
impugned actions of the Respondents is indeed permissible. Also, the scope
of the proceedings under the PP Act is limited to showing why the
continued occupation of the shops is not unauthorized and why the occupier
should not be asked to pay penal rates during such period of unauthorized
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
occupation. A challenge cannot be raised in proceedings under the PP Act
to the validity of any policy change or to the impugned orders on the
ground that they are arbitrary and violate Article 14. In other words the
remedy under the PP Act is neither an efficacious nor an alternative remedy
to the present petitions. The preliminary objections of the Respondents as to
maintainability of these petitions are accordingly overruled.
Legitimate expectation
37. Turning to the merits, the first issue to be considered is whether the
impugned actions are rendered arbitrary in that they frustrate the legitimate
expectations, both procedural and substantive, of the Petitioners thus
rendering them arbitrary and unreasonable under Article 14? Our Supreme
Court has developed the doctrine of legitimate expectation largely on the
basis of the decisions of the courts in England. In Council of Civil Service
Unions v. Minister for Civil Service 1984 All ER 935, it was contended by
the Unions that an employee had a legitimate expectation that the Minister
would follow the existing practice of consulting the Unions before their
membership could be withdrawn. It was explained that the procedural part
of the expectation was that the appropriate procedure, including an
opportunity of being heard would be followed, before the benefit or the
advantage was withdrawn. The substantive part was that a representation
was made that the benefit of a substantive nature would either be granted or
continued and not substantially varied. It could be a representation to the
individual or generally to a class of persons. The Australian High Court in
Attorney General for New South Wales v. Quin 1990 (64) Aust LJR 327
apprehended that "to strike down the exercise of administrative power
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
solely on the ground of avoiding the disappointment of legitimate
expectations of an individual would be to set the courts adrift on a
featureless sea of pragmatism. Moreover the notion of a legitimate
expectation (falling short of a legal right) is too nebulous to form a basis for
invalidating the exercise of a power when its exercise otherwise accords
with law." The House of Lords in Re Findlay 1984 (3) All ER 801 HL
rejected the argument that there was any substantive legitimate expectation
that the policy relating to parole for certain category of prisoners could not
be changed and required prior consultation. It was held that "the most that a
convicted prisoner can legitimately expect is that his case be examined
individually in the light of whatever policy the Secretary of State sees fit to
adopt provided always that the adopted policy is a lawful exercise of the
discretion conferred upon him by the statute. Any other view would entail
the conclusion that the unfettered discretion conferred by statute upon the
minister can in some cases be restricted so as to hamper, or even to prevent
changes of policy."
38. The above was the stage of development of the law when in Navjyoti
Co-operative Group Housing Society v. Union of India (1992) 4 SCC 477
the Supreme Court adopted the principle to grant relief to the Petitioners in
that case. The facts were that the existing list of co-operative societies for
allotment of land was altered under a changed policy by reckoning the
seniority with reference to the date of approval of the final list by the
Registrar. The Supreme Court accepted the argument that affected societies
had a legitimate expectation that the past consistent practice would be
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
followed particularly since the Respondents failed to show any overriding
public interest.
39. In Food Corporation of India v. Kamadhenu Cattle Feed Industries
(1993) 1 SCC 71 the action of the appellant in refusing to accept the
Respondent‟s highest tender for purchase of stocks of damaged food grains
was challenged. It was submitted that there could not be any subsequent
negotiation to improve upon the highest bid and that the person offering the
highest tender had a legitimate expectation that the bid would be accepted.
Negativing the plea of the Respondent it was held that,
"8. The mere reasonable or legitimate expectation of a citizen,
in such a situation, may not by itself be a distinct enforceable
right, but failure to consider and give due weight to it may
render the decision arbitrary, and this is how the requirement of
due consideration of a legitimate expectation forms part of the
principle of non-arbitrariness, a necessary concomitant of the
rule of law. Every legitimate expectation is a relevant factor
requiring due consideration in a fair decision making process.
Whether the expectation of the claimant is reasonable or
legitimate in the context is a question of fact in each case.
Whenever the question arises, it is to be determined not
according to the claimant's perception but in larger public
interest wherein other more important considerations may
outweigh what would otherwise have been the legitimate
expectation of the claimant. A bona fide decision of the public
authority reached in this manner would satisfy the requirement
of non-arbitrariness and withstand judicial scrutiny. The
doctrine of legitimate expectation gets assimilated in the rule of
law and operates in our legal system in this manner and to this
extent."
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
40. The doctrine was further developed in Union of India v. Hindustan
Development Corporation (1993) 3 SCC 499 where it was explained in
para 28 that:
"The legitimacy of an expectation can be inferred only if it is
founded on the sanction of law or custom or an established
procedure followed in regular and natural sequence. Again it is
distinguishable from a genuine expectation. Such expectation
should be justifiably legitimate and protectable. Every such
legitimate expectation does not by itself fructify into a right and
therefore it does not amount to a right in the conventional
sense."
It was further explained in para 33:
"The doctrine does not give scope to claim relief straightaway
from the administrative authorities as no crystalised right as
such is involved. The protection of such legitimate expectation
does not require the fulfillment of the expectation where an
overriding public interest requires otherwise. In other words
where a person's legitimate expectation is not fulfilled by taking
a particular decision then decision-maker should justify the
denial of such expectation by showing some overrating public
interest. Therefore even if substantive protection of such
expectation is contemplated that does not grant an absolute right
to a particular person. It simply ensures the circumstances in
which that expectation may be denied or restricted. A case of
legitimate expectation would arise when a body by
representation or by past practice aroused expectation which it
would be within its powers to fulfill. The protection is limited to
that extent and a judicial review can be within those limits."
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
41. After emphasising that the burden was on the person who bases his
claim on the doctrine of legitimate expectation to satisfy that there has been
a representation or a past practice that has given rise to such expectation, it
must be shown that the decision of the authority was "arbitrary,
unreasonable and not taken in public interest". It was observed: "If it is a
question of policy, even by way of change of old policy, the courts cannot
interfere with the decision". Even if the court was satisfied that a case of
legitimate expectation was made out, it can grant relief only where the
failure to give an opportunity of hearing prior to such decision has resulted
in failure of justice.
42. In Madras City Wine Merchants' Association v. State of T.N. (1994) 5
SCC 509 the licence holders invoked past practice to claim a legitimate
expectation of renewal of bar licences under the Tamil Nadu Prohibition
Act, 1937 read with the Tamil Nadu (Vending in Bar) Rules 1992. Before
the bar licencees could apply for renewal, a policy decision was taken not to
renew their licences. It was held that even under the earlier policy, a licence
under the Bar Rules was only for a period of one year and renewal was
based on payment of 15% more than the "privilege amount at which the
sale of the privilege was confirmed the previous year". Renewal for the
third year was on payment of 10% more than the privilege amount. It was
held that "if there is a change in policy or in public interest the position is
altered by a rule or legislation, no question of legitimate expectation would
arise." It was observed that the expectation that the licence would be
renewed at best was at best "a hope".
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
43. The law regarding legitimate expectation was discussed in great detail
thereafter in Punjab Communications v. Union of India (1999) 4 SCC
727. The facts were that the Asian Development Bank (`ADB‟) agreed to
lend to the Government of India US $113 million for providing digital
wireless telecom facility to 36,000 identified villages in Eastern U.P. The
appellant and another company were short-listed after examination of the
offers of several Indian and foreign companies. However, a high level
committee thereafter disqualified the appellant to enable the calling of fresh
tenders on the basis of the analog system. The Union of India took a policy
decision not to avail the ADB loan. The previous tenders were accordingly
cancelled. The appellant invoked legitimate expectation of a substantive
nature to urge that that even if the government was funding the project on
its own, the policy could not be changed and the original tender notification
could not be abandoned. Negativing these arguments, it was held that:
"change in policy can defeat a substantive legitimate expectation
if it can be justified on Wednesbury reasonableness (Associated
Provincial Pictures Houses Ltd. v. Wednesbury Corp [1948] 1
KB 223 CA). We have noticed that in Hindustan Development
Corporation case, also it was laid down that the decision maker
has the choice in the balancing of the pros and cons relevant to
the change in policy. It is, therefore, clear that the choice of the
policy is for the decision-maker and not for the Court, The
legitimate substantive expectation merely permits the Court to
find out if the change in policy, which is the cause for defeating
the legitimate expectation is irrational or perverse or one which
no reasonable person could have made".
44. The above law has been reiterated in a large number of cases in
different contexts. The most recent judgment being Jasbir Singh Chhabra
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
v. State of Punjab 2010 (2) SCALE 754, where the plea of legitimate
expectation of being allotted residential plots only on the basis of past
practice of the Punjab Small Industries and Export Corporation Ltd. was
negatived by the Supreme Court.
45. To complete this narration, it must be noticed that the English courts
continue to redraw the contours of the doctrine. Laws LJ in R (on the
application of Bhatt Murphy (a firm) v. Independent Assessor [2008]
EWCA Civ 755 pointed out the difficulties in drawing the line between
substantive legitimate expectation and ordinary judicial review of a new
policy. He explained that while the latter might require application of the
traditional Wednesbury standard of review, substantive legitimate
expectation would require a more involved consideration. He observed:
"It seems to me, however, that on the face of it the existence of a
promise or practice of present and future substantive policy
serves as a somewhat fragile boundary by which to set limits to
substantive legitimate expectations. Once set in place, every
policy of a public authority, not subject to a stated terminal date
or terminating event, may no doubt be expected to continue in
effect until rational grounds for its cessation arise. A promise of
its continuance, if it points to no particular date or future
event to mark the end of the policy, represents little more
than this ordinary expectation. And nothing is added by
referring to a practice of the policy in operation over time."
(emphasis supplied)
Laws LJ proceeded to observe:
"Authority shows that where a substantive expectation is to run
the promise or practice which is its genesis is not merely a
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
reflection of the ordinary fact (as I have put it) that a policy with
no terminal date or terminating event will continue in effect until
rational grounds for its cessation arise. Rather it must
constitute a specific undertaking, directed at a particular
individual or group, by which the relevant policy's
continuance is assured." (emphasis supplied)
46. The upshot of the above discussion, particularly in the realm of policy
making, is that the burden is on the Petitioners who claim legitimate
expectation to show that there was a specific representation made that their
licences would be renewed for an indefinite period notwithstanding Clause
17 of the earlier policy as this was the standard practice; that there was a
legitimate expectation that the change in the policy restricting the maximum
period to five years would be only after giving them an opportunity of being
heard; that the changed policy has frustrated the substantive legitimate
expectation thus rendering the decision not to renew the licences arbitrary
and unreasonable.
47. This Court finds that the Petitioners have not been able to, in the first
place, show that there is any specific representation either to any of them or
to all of them generally that their licences would stand automatically
renewed year after year by the Respondents. The mere fact that as a matter
of practice the licences were renewed does not constitute the specific
representation by the Respondents to each of them that indeed their licences
would be renewed. The renewal, it must be recalled, was only for a year at a
time and was in accordance with the prevailing policy and Clause 17. In
other words, the only „representation‟ or „assurance‟ to each of them was
that at the most the licence would be renewed for one more year at the
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
discretion of the Respondent. No challenge was laid to Clause 17 of the
SOP date 10th August 2001 which left it to the discretion of the
Respondents to renew the licence at the end of a year. The reasons for the
change in the policy as explained by the Respondents appear to this Court
to constitute sufficient justification for such change. The scope of judicial
review of such policy change is indeed limited. Unless it is shown to be not
informed by any reasonable criterion or not being in public interest, the
Court cannot and should not interfere. Given the fact that the number of
shopping complexes is unlikely to increase, and the waiting list of
applicants is a growing one, the concern of the Respondents that those ex-
servicemen waiting in the expectation of allotment of a shop should also be
accounted for, cannot be said to be an unreasonable one. Both groups of ex-
servicemen, i.e, the present allottees and those awaiting allotment are from
the same „catchment‟. The demand for shops far exceeds the supply. There
has to be a balancing of these two sets of „expectations‟. If the Respondents
take a call and decide to change the policy so that the chances of those in
the queue waiting for allotment of shops improves, the Court cannot be
expected to judicially review such policy. As explained in Madras City
Wine Merchants', no question of legitimate expectation would arise if
there is a change in policy or the position is altered by a rule or legislation.
48. The Petitioners have not questioned the DSC Rules 2006 or the
Guidelines issued in September 2008. It appears that each of these
Petitioners has been a beneficiary of renewal of licence several times over.
Each of them has been granted renewal for more than three years which is
the maximum period of licence envisaged under Rule 13 of the DSC Rules.
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
It has been made clear in Clause 8 of the September 2008 Guidelines that
the DSC Rules would apply to the shopping complexes covered by 3.42.1
of SOA 1983. Consequently, even procedurally, none of the Petitioner can
harbour a legitimate expectation of being consulted before a change in the
policy.
49. For the aforementioned reasons, this Court negatives the plea that the
impugned changed policy as announced by the SOP dated 13 th April 2007
frustrates any legitimate expectation, either substantive or procedural, of the
Petitioners and is therefore rendered arbitrary or unreasonable.
Impugned orders neither discriminatory nor arbitrary
50. The SOA 1983, the DSC Rules 2006 and the Guidelines date 4 th
September 2008 leave no manner of doubt that Regimental shops (unit
shops) are distinct and different than shops in shopping complexes and both
sets of shops are not governed by the same conditions. The plea of the
Petitioners that there is any discrimination on this score does not merit
acceptance. The classification of such shops into two distinct categories
appears to be based on rational criteria subserving different objects.
Regimental shops are essentially for providing daily needs of troops.
Shopping complexes serve the civilian population as well. The fact that the
DSC Rules 2006 provide a 40% quota for civilians in shopping complexes
(Rule 12), which Rule has not been challenged, is a pointer to the fact that
the shops in shopping complexes are not meant exclusively for ex-
servicemen. The 60% quota for the ex-servicemen is indeed a welfare
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
measure and therefore, there cannot be any vested right of being allotted
such shops. The fact that civilians have been allotted some of the shops is
therefore consistent with the above provision in the DSC Rules 2006. The
contention of the Petitioners that any shortage in the shops available for
allotment to ex-servicemen can be made up by asking the civilians to vacate
the shops allotted to them is therefore misconceived.
51. This Court is unable to find the decision of the Respondents to restrict
the licence period in respect of shops in shopping complexes to five years
with the opportunity of again applying after a break of three years to be
either discriminatory or arbitrary. Also, any prejudice that may be caused to
the Petitioners in whose cases the licences were renewed prior to the change
in the policy has been neutralized by the fact that they have continued in
possession for nearly three years thereafter (amounting to more than two
renewals) under the interim orders of this Court. As regards those
Petitioners seeking transfer of the existing licence in their capacity as
widows of ex-servicemen, they would be governed by Rule 7 of the DSC
Rules 2006 and in any event, they too have continued to be in the premises
far beyond the period of licence under the interim orders of this Court.
52. Before concluding this portion of the judgment, this Court would like to
observe that there are at present at least five documents that govern the
licence granted to the allottee of a shop in a shopping complex. First we
have the SOA 1983, para 3.42.1 of which describes what a shopping
complex is. Then there is the licence deed itself which sets out some of the
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
applicable terms and conditions. Then there are the DSC Rules 2006. There
appears to be some inconsistency between the Rules and the conditions of
the licence. Then we have the „Guidelines‟ of 4th September 2008, Clause 8
of which in fact states that the DSC rules 2006 will apply to shopping
complexes covered by para 3.42.1 of the SOA 1983. Lastly, the SOPs
which are issued from time to time. In fact it is the SOP dated 13 th April
2007 that has given rise to these set of petitions. For the purposes of grant
and renewal of licences there is some inconsistency in these five documents
which require to be reconciled by the Respondents. Although the Petitioners
have themselves not raised any objection on this score, this Court finds that
any inconsistency between the DSC rules 2006 and the SOP is not to the
advantage of any of the Petitioners here as each of them has already
overstayed their respective periods of licence by many years. Nevertheless,
it is imperative for the Respondents to reconcile these different documents
and bring out a uniform set of Rules.
Extension of time to vacate the shops
53. The further aspect to be considered is of the hardship faced by these
Petitioners by relatively sudden change of policy. Considering that many of
the Petitioners have been getting their licences renewed for the past several
years, the announcement made in June 2007 of a policy made effective 30 th
April 2007, stating that there would be no renewal beyond five years must
have indeed come as an unpleasant surprise. The nature of retail trade is
such that most shop keepers have to buy stock on credit and are under
constant pressure as to liquidity. Unless sufficient time is given for vacating
the shops, it will undoubtedly cause severe prejudice. It is understandable
that finding alternative commercial space to run a shop may neither be easy
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
nor affordable in the cases of the Petitioners before the Court. However,
given the number of years they have enjoyed the benefit, the need to give
the others in the queue a similar opportunity would outweigh such hardship.
Having said that, with a change in policy having been made after nearly six
years, a time period of thirty days to vacate the premises cannot be said to
be a reasonable one.
54. Under Rule 3(a) of the DSC Rules 2006, the existing allottees were
allowed to continue till the expiry of their licence period and such of those
in unauthorized occupation of the shops, i.e., where the period of licence
has expired, would be given six months time to vacate in terms of Rule 3(c)
failing which the Estate Officer would initiate action to evict them in
accordance with law. The minimum time to vacate the shops in question
having been set out in Rule 3(a) itself ought to be six months and therefore
the impugned notices giving the Petitioners‟ thirty days‟ time for the
purpose were contrary to the above provision in the DSC Rules 2006.
However, as a result of the interim orders the Petitioners have continued
well beyond the six months‟ period.
55. In the peculiar facts and circumstances of the case, as far as the
Petitioners before the Court are concerned, this Court is of the view that a
further period of six months must be given to each of them to vacate the
shops under their occupation. This would not include such of those
Petitioners which have vacated the shops during the pendency of the present
case.
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
56. It is accordingly directed that each of these Petitioners, except those
who have already vacated the shops allotted to them, shall be given six
months‟ time to vacate the shops in their respective occupation. In other
words, they should hand over the shops on or before 15 th January 2011.
This would be further subject to each of them filing an affidavit before this
Court undertaking that: (i) they will hand over vacant and peaceful
possession of the shop(s) in their occupation on or before 15th January 2011,
(ii) that they will promptly pay the licence fee as and when it falls due, (iii)
and further they will not sublet the premises or induct any other person or
entity into the shop(s) in their occupation. It is made clear that this
undertaking should be filed within ten days from today, i.e., on or before
21st July 2010, failing which it would be open to the Respondents to
forthwith initiate proceedings under the PP Act for eviction of the
Petitioners. Where such proceedings have already been initiated and such of
those Petitioners file the above undertaking within the time granted by the
Court, the PP Act proceedings would remain stayed till 15th January 2011 or
upon the Petitioners violating any of the terms of the undertaking. It is
needless to say that where the Petitioners after giving the undertaking to
this Court, violate any of the terms of the undertaking, they will be liable to
be proceeded with forthwith both for contempt of court and proceedings
under the PP Act.
57. It is made clear that the directions issued by the Court granting time to
the Petitioners to vacate the shops under their occupation is limited only to
the Petitioners before the Court who have not vacated the premises and is
not to be treated as a precedent for any other allottee. The allotments made
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
of shops in shopping complexes hereafter would strictly be in accordance
with the DSC Rules 2006 and the other relevant instruments which have
been referred to earlier, as amended from time to time.
58. For all the above mentioned reasons and subject to the directions issued,
the writ petitions are dismissed. The interim orders stand vacated and the
pending applications stand disposed of.
S. MURALIDHAR, J
JULY 12, 2010
rk
WP (C) Nos. 9478/07, 9525/07, 9546/07, 9568/07,
