Telangana High Court
Campaign For Housing And Tenural Rights ... vs The Government Of Andhra Pradesh, ... on 4 October, 2024
THE HONOURABLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
+ WRIT PETITION No.17623 OF 2007
% Dated 04.10.2024
# Campaign for Housing and Tenural Rights (CHATRI)
a Registered Society having its office H.No.4-6-509,
Esamia Bazar, Koti, Hyderabad, represented by its Secretary,
Sri S.Jeevan Kumar S/o.Late S.V.Rama Krishna and two others
.... Petitioners
VERSUS
$ The Government of Andhra Pradesh,
Represented by its Chief Secretary to Government,
Revenue Department, A.P. Secretariat, Hyderabad
and sixty three others
... Respondents
! Counsel for petitioners : Sri Gandra Mohan Rao
^ Counsel for Respondents : Sri A. Sudarshan Reddy
Advocate General (R.1 and R.2)
Sri V.Narasimha Goud (R.3)
Sri Nitin Prasad (R.6)
Sri Challa Gunaranjan (R.7),
Sri G.V.S.Ganesh (R.8 and R.11)
Sri Koka Satyanarayana Rao (R.9)
Sri I. Ramesh (R.12)
Sri P. Sri Raghu Ram (R.18 and R.20)
< GIST:
> HEAD NOTE:
? CITATIONS:
1. (1979) 3 SCC 489 14. 2024 (4) ALD 606 (TS) (DB)
2. AIR 1980 SC 1992 15. (2009) 7 SCC 561
3. (1996) 5 SCC 510 16. AIR 1967 SC 1427
4. (2011) 5 SCC 29 17. (1991) 1 SCC 212
5. (2012) 10 SCC 1 18. (1995) 5 SCC 482
6. 2023 SCC OnLine SC 5 19. (1996) 6 SCC 530
7. (1987) 2 SCC 295 20. (2012) 3 SCC 1
8. (2003) 8 SCC 567 21. 2024 SCC OnLine SC 1867
9. (2008) 9 SCC 552 22. (1997) 7 SCC 592
10. (2016) 6 SCC 408 23. (2007) 4 SCC 737
11. (2018) 3 SCC 732 24. (2020) 18 SCC 527
12. (2021) 15 SCC 534 25. (2023) 3 SCC 1
13. (2023) 9 SCC 244
THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HON'BLE SRI JUSTICE J. SREENIVAS RAO
WRIT PETITION No.17623 of 2007
ORDER:
(Per the Hon'ble Sri Justice J. Sreenivas Rao)
In this writ petition filed as a public interest litigation,
the petitioner has prayed for the following reliefs:
(1) Action of the respondent Nos.1 to 4 in allotting public
properties to private companies, firms, individuals either
by way of outright sale or lease without calling for tenders
or advertisement as unconstitutional, in violation of
Article 14 and Part VI of the Constitution and without
jurisdiction, ultra vires, void ab initio, arbitrary, illegal
and violative of doctrine of public trust and to direct the
official respondents to review all the allotments made
during the last ten years by way of sale/lease and to
collect market value/rent from the allottees.
(2) To cancel the allotments and to resume the lands in all
cases where the development has not commenced or the
substantial progress has not been made strictly as per the
terms and conditions of the allotment and regulations.
(3) To declare the Regulations 4 to 6 of APIIC Allotment
Regulations, 1998 providing for allotment without tenders
or bids as arbitrary, unreasonable, contrary to the
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provisions of Article 14 and Part IV of the Constitution of
India and unconstitutional.
(4) To direct the official respondents to allot the Government
lands either by way of lease or sale only after inviting
bids/tenders from the eligible applicants by issuing
advertisement in the news papers.
(5) Not to reserve the lands in favour of allottees for future
expansion and to declare the Clause-2 of the letter dt.
28.10.2005 issued by the 2nd respondent to respondent
No.13 fixing the sale price for 50 acres of the land to be
handed over after completion of the First Phase as
arbitrary, illegal, unconstitutional and ultra vires the
provisions of APIIC Allotment regulations and to set aside
the same
2. Heard Sri Gandra Mohan Rao, learned Senior Counsel
appearing for the petitioners, Sri A.Sudarshan Reddy, learned
Advocate General appearing for respondent Nos.1 and 2,
Smt. T.V.Sudha, learned counsel representing
Sri V.Narasimha Goud, learned standing counsel for
respondent No.3, Sri Nitin Prasad, learned counsel for
respondent No.6, Sri Challa Gunaranjan, learned counsel for
respondent No.7, Sri G.V.S.Ganesh, learned counsel for
respondent Nos.8 and 11, Sri Koka Satyanarayana Rao,
learned counsel for respondent No.9, Sri I. Ramesh, learned
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counsel for respondent No.12 and Sri P. Sri Raghu Ram,
learned senior counsel appearing for respondent Nos.18 and
20.
3. The brief facts of the case:
3.1. According to the petitioners, petitioner No.1 is a
voluntary organization registered under the Societies
Registration Act and is engaged in campaigning and
organizing people's struggle for housing rights and working
among the slum dwellers of Hyderabad and Ranga Reddy
Districts for the last several years. The petitioner No.2 is
retired from the service of VST Industries Limited, as Projects
and Engineering Services Manager and is a Member and
Secretary of Forum for Better Hyderabad, an NGO working for
environmental issues to preserve, protect and improve the
environment in order to maintain and improve the living
environment in Hyderabad. The petitioner No.3 served as
Airman in Indian Air Force. After discharging from the
services, he was selected as Inspector in Central Excise
Department and worked in the said Department for nearly 20
years and retired as Superintendent of Central Exercise in the
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year 2000. Since then, he is practicing as an Advocate in the
Courts of Hyderabad, Ranga Reddy and also at High Court of
Andhra Pradesh.
3.2. It is the case of the petitioners that the natural resources
of the community i.e., land, air, water, etc., are required to be
utilized for the benefit of largest number of the people. The
State being custodian of the people and holding the natural
resources of the community is under an obligation to utilize
and apply the natural resources of the State for the common
benefit of the people and to ensure that there is no
concentration of the wealth in the hands of few to the
detriment of common people and it is under an obligation to
ensure that the natural resources of the community are
protected and preserved for the next generations. The State in
disposing or dealing with the public property has to act in
utmost faith and due caution and to apply the same in the
larger public interest.
3.3. It is averred in the writ petition that the official
respondents contrary to the objectives laid down in the
preamble of the Constitution of India and Directive Principles
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of the State Policy and in violation of Article 14 of the
Constitution of India had engaged in allotting large extents of
land in and around Hyderabad City and other parts of the
Andhra Pradesh to various private companies, firms and
organizations at throwaway prices without calling for tenders
or auction.
3.4. Respondent No.2-the Andhra Pradesh Industrial
Infrastructure Corporation (APIIC) is owned and controlled by
respondent No.1. The respondent No.2 was formed for
development of infrastructure to promote industries in the
State and it has framed Regulations known as 'APIIC
Industrial Areas Allotment Regulations, 1998 (hereinafter
called, brevity 'Regulations') for allotment of plots, sheds,
lands, shops, godowns, etc., in industrial areas.
3.5. It is further averred that the respondent No.2 has
confirmed the allotment made to the private companies and
individuals on first come first basis without the knowledge of
the public at large and allotted an extent of Ac.4,156.81 gts. of
land from 2001 to 2006 on nomination basis, without calling
for tenders and auctions. When the petitioners made an
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application under the Right to Information Act, 2005, the
concerned authorities issued letter, wherein it is specifically
stated that the official respondents have allotted the land on
nomination basis without conducting auction.
3.6. It is the further case of the petitioners that the official
respondents allotted vast extent of land during the last five
years to various private companies/firms for various projects
below the market value without calling for applications from
others. The official respondents, who are trustees of the public
property, are acting contrary to the public interest. It is stated
that more than 20% of the population are living below the
poverty line and in need of state-aid for their fulfilment of
basic necessities of life. The Statement Government
alienating/allotting thousands of acres of Government land in
favour of private persons at throw away prices under the guise
of development. It is further stated that the official
respondents, without following their own Regulations, without
any notification and without conducting auction, allotted the
Government valuable lands to the unofficial respondents on
nomination basis and the same is contrary to law especially
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violation of Articles 14, 37, 38, 39, 43 and 46 of the
Constitution of India.
3.7. The Principal Secretary to Government, Revenue
Department, had filed counter affidavit on behalf of
respondent Nos.1 and 2 denying the averments made by the
petitioners inter alia contending that in initial stage, demand
for land in the industrial area was not high, and therefore, the
procedure of sale of land by allotment was adopted. The said
allotments were decided by the Zonal Officers of Andhra
Pradesh Industrial Infrastructure Corporation. The allotment
was being made basing on the requirement of entrepreneurs
i.e., land requirement, nature of projects, etc., to encourage
industrial growth in the State and later Allotment Committees
were constituted comprising of the Joint Collector, District
Industries Centre, as Chairman; Industrial Development
Officer, Andhra Pradesh Industrial Infrastructure Corporation,
as the Convener along with a representative of Andhra
Pradesh State Financial Corporation. The system of auction
was introduced in the year 1997 where the industrial areas
were fully developed and the demand for the land was more
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than the available of land. The procedure adopted by the
respondent No.2 for allotment of land in 1997 is contained in
Circular No.272/DW/1997, dated 19.02.1997.
3.8. It is further stated in the counter affidavit that that it is
universally recognized that industrial growth is essential for
the development of a country and to promote the same,
respondent No.2 was established on 26.09.1973 with the
following, among other, objects:
1) To formulate, promote, finance, aid, assist,
establish, manage and control schemes, projects
or programmes, to provide and develop
infrastructure facilities, including factory sites,
factory sheds, godowns, marking facilities,
warehouses, facilities of communications, power,
water drainage, housing, hospitals and other
medical and health and educational institutions
and other services of any description in order to
promote and assist the rapid and orderly
establishment, growth and development of
industries and commerce in the State of Andhra
Pradesh.
2) To aid, assist, promote and finance industries set
up in the factory sheds constructed or factory
sites developed by the Company, whether owned
or run by Government, statutory body,
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cooperatives, company, firm or individual or
others and to provide them with capita, credit,
means and recourses for the prosecution of their
work and business and to enable them to develop
and improve their management, production and
marketing techniques..
3) To implement schemes of incentives (financial
and otherwise), subsidies and the like formulated
by the Government of Andhra Pradesh,
Government of India or other authorities or
institutions and to administer such schemes of
incentives as may be devised by the company
from time to time in the interest of the
establishment and development of industries and
commerce in the State of Andhra Pradesh.
3.9. Further, the Government embarked on another major
initiative of establishment of the Indian Institute of
Information Technology (IIIT) at Hyderabad. A large number of
training institutions that have sprung up in the State,
particularly in Hyderabad, have seen the emergency of
Hyderabad as a general and major Information Technology (IT)
Training Centre of the country. The State has taken other
initiatives for establishment of a venture capital fund, HITVEL
(Hyderabad Information Technology Venture Enterprises
Limited) and another major initiative of the State Government
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that has implications for the growth of the Information
Technology industry to move towards ushering in an electronic
Government in the State. The primary objective of this effort
is to leverage the power of modern Information and
Communication Technology to provide more convenient,
accessible and transparent Government services to citizens
and at the same time, to improve efficiency in Government.
Keeping in view the intensely cost competitive nature of this
sector globally, the need to have a specific set of incentives
tailored to the requirements of this sector has been considered
by the Government in order to attract the maximum
employment potential of the industry to the State.
3.10. It is further stated that a comprehensive set of guidelines
was prepared covering all aspects relating to grant of
incentives to Information Technology Industries, namely,
eligibility criteria, procedure for processing the applications,
terms and conditions of allotment etc. A Consultative
Committee on Information Technology Industry (CCITI) under
the Chairmanship of the Secretary, Information Technology
and Communications Department was constituted for a single
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window reference for recommending grant of all the
Information Technology incentives, vide G.O.Ms.No.3,
Information Technology and Communications Department,
dated 25.05.2000, and G.O.Ms.No.5, Information Technology
Department, dated 16.06.2000.
3.11. It is further stated that with the growing importance of
Information and Technology, to attract the Information
Technology Industry, for sustained growth in the State,
G.O.Ms.No.114, Finance & Planning Department, dated
25.05.1999, was issued. There was heavy competition for
attracting I.T. Industry from various parts of the country. To
sustain and improve the industrial growth in the State and to
attract I.T. Industries to the State, several steps were taken as
contained in G.O.Ms.No.114, dated 25.05.1999. The I.T. Policy
of the State was revised from time to time. G.O.Ms.No.27,
dated 21.06.2002, formulates the I.T. Policy for 2002-2005.
G.O.Ms.No.11, Information and Communications Department,
dated 21.03.2005, formulates I.T. Policy for 2005-2010.
3.12. It is averred that the allegations that allotment of land to
unofficial respondents was made at throw away prices or
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negligible prices and caused loss of several thousand of crores
to the State exchequer and the allotment is made without any
justifiable public interest; are totally misconceived and
untenable. The allotments were made in the interests of
sustained growth of economy. Whether the land has to be
allotted without conducting auctions or at the market rate or
at concessional rate to attract the establishment of industries
would depend upon the factual situation and ground realities
and there cannot be a uniform policy ignoring the ground
realities. The respondent No.2 provide for allotment of land
without tenders or bids and the power is exercised by a high
ranking body depending on the need for such allotment as per
Regulations 4 to 6 of the Regulations. The market value as
fixed by the Government in respect of Government lands and
in case of lands acquired under the Land Acquisition Act, the
compensation awarded and other costs are included in
evaluating the cost of the land. The development cost incurred
by the respondent No.2 and interest thereon, the
administrative costs, etc., are taken into consideration by the
Price Fixation Committee for fixing the price of the land. The
land or sheds with land are allotted by the respondent No.2 to
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various entrepreneurs for the promotion of industry in
accordance with the objects of Andhra Pradesh Industrial
Infrastructure Corporation to promote industry. The land is
allotted for industrial parks, autonagars, mini-industrial
estates under special component plan of scheduled
caste/scheduled tribe entrepreneurs and other industries.
Where the construction activity is not commenced or
completed in accordance with the terms and conditions of
allotment and sale agreements, appropriate action is taken by
the Andhra Pradesh Industrial Infrastructure Corporation.
Generally, the object of Andhra Pradesh Industrial
Infrastructure Corporation is to promote industry and for that
purpose certain grace period is given to the entrepreneurs
where the construction activity is not completed strictly in
accordance with the terms and conditions. In cases where
Andhra Pradesh Industrial Infrastructure Corporation finds
that there are no bona fides on the part of entrepreneurs, the
allotment of land/sheds with lands are cancelled and the
lands/sheds are resumed. The statement showing the details
of the action taken by the Andhra Pradesh Industrial
Infrastructure Corporation, where the allottees have not
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commenced or completed the project within the stipulated
time in case of Information Technology and hardware sectors,
as the main focus of the writ petition on these sectors, is filed
along with the material papers.
3.13. With respect to the other industries, about 65% of the
units completed the projects and have gone into production
around the time stipulated. For the balance units, where the
projects are under progress, the status of such units is
reviewed periodically. The Andhra Pradesh Industrial
Infrastructure Corporation reviews the progress of such units
in each zone both at the field level and at the head office of the
Andhra Pradesh Industrial Infrastructure Corporation every
month. Where the work has not commenced or there is no
progress, action is taken by the Andhra Pradesh Industrial
Infrastructure Corporation by issuing show-cause notices and
if the allottee continues to default, the allotment is cancelled
and the land/shed is resumed. The action of the official
respondents in dealing with the cases where allottee has not
complied with the terms and conditions of allotment depends
on the ground realities and factual situation. In case of Auto
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Nagars and Wood Complexes (wood based industries) in order
to shift the automobile activity and timber based units existing
in the cities/towns to ease traffic congestion, respondent No.2
developed Auto Nagars/Wood Complexes. The units are being
shifted to Auto Nagar and Wood Complexes in coordination
with the district administration from time to time and the
development of Auto Nagars and Wood Complexes take
substantial gestation period beyond two years provided for in
the terms and conditions of allotment/agreements.
3.14. In case of mini industrial estates developed under the
special component plan for allotment to the entrepreneurs
belonging to Scheduled Castes and Scheduled Tribes, a more
liberal approach is adopted. There could also be delays in
implementation of the projects due to various factors such as
obtaining required statutory licences, getting financial
assistance from Bankers/other Financial Institutions, the
changing Industrial scenario, marketing and viability of
products, etc. The respondent No.2 taking into consideration
the above factors decided the issue of whether to cancel the
allotments or grant extension of time. In case of industries in
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I.T. Sector, they are governed by the terms and conditions of
Memorandum of Understanding entered by the respective
Industries and Government of Andhra Pradesh.
3.15. It is denied that respondent No.2 in the name of
allotment has allotted vast extents of lands in favour of large
private companies at nominal prices and made them super-
rich overnight leading to concentration of economic resources
in the hands of a few. In fact, lands were offered at the
prevailing market prices to all the Information Technology
Companies during 1996-97 to 2001-02 to attract Information
Technology industry in the State. However, the State could not
attract the Information Technology sector in a big way to
establish the same in the State. As such, the Government had
formulated the Information and Communication Technology
(ICT) Policy 2002, vide G.O.Ms.No.27, Information Technology
and Communications Department, dated 27.6.2002, allowing
rebate on land cost linked to employment to attract
Information Technology investments to the State, keeping in
view the competition from neighboring States like, Karnataka,
Maharashtra, Tamil Nadu etc. Government through the above
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Information and Communication Technology Policy has fixed
the land rates for allotment of land to Mega Information
Technology Projects of Hitech City, Madhapur at Rs.50 Lakhs
per acre and development charges at Rs.30 Lakhs per acre. As
per the Information and Communication Technology Policy,
2002, the allotments in Madhapur area were given after short-
listing the applications by Government in CCITI (Consultative
Committee on Information Technology Industry). The main
objective of providing good facilities through Information and
Communication Technology Policy of the Government is to
attract Information Technology investments to the State for
Information Technology industry and to generate employment
to the educated, which has largely been achieved. Major
Information Technology Companies were attracted to Hitech
City, Software Units Layout in Madhapur by the Information
and Communication Technology Policy of the Government and
Information Technology climate was achieved in our State in
spite of competition from other States. With this growth, the
Government could also attract Multi National Corporations,
like Microsoft, CA, Kanbay, UBS, Franklin & Templeton,
WIPRO, Honeywell, Amazon, Virtusa, Sierra Atlantic etc., to
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other places like Manikonda, Nanakramguda, Gopanpalli and
Vattinagulapalli. The lands in Manikonda and Raidurg villages
of Ranga Reddy District were allotted to respondent No.7 and
M/s Divya Sree NSL Infrastructure (P) Limited, respectively,
through competitive bidding process during 2005 to create
Information Technology built up spaces facility and support
services. Now due to the present demand for Information
Technology space in Hyderabad, the lands at Sy.No.83/1 of
Raidurg village are also put to public auction. In view of the
above policies, the Government has successfully attracted
Information Technology industry to the State. The present
criteria for allotment of Government land as prescribed by I.T.
& C. Department, the Government of Andhra Pradesh is given
hereunder:
1. Eligibility conditions for Hyderabad/Ranga Reddy
District. As on the date of application (a) the IT
company shall have been in operation for the last
five financial years; (b) shall have a minimum
existing employee strength of 1000 in IT or 1500
in ITES / BPO activities on its rolls and sustained
for the last two years; (c) shall have a minimum
annual turnover of Rs. 30 crores, from IT / ITES
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activities from their existing operations
continuously for the last two financial years.
2. Eligibility conditions for other locations in the
State:
As on the date of application (a) the IT company
shall have been in operation at least for the last
two financial years; (b) shall have an existing
employee strength of minimum 100 in IT/ITES
activities, on its rolls.
3. The land recommended for allotment shall be
based on creating a fresh direct IT employment of
500 for every one acre allotted within 3 years from
the date of taking over possession of land, failing
which the said allotted land is liable for
cancellation and can be taken back to the extent
to which proportionate employment is not
generated.
3.16. Allotment of land to Information Technology companies
is with a specific condition that the company shall not assign,
transfer or in any manner alienate the plot to any person other
than an Information Technology Industry as specified in the
Information and Communication Technology Policy. It is
denied the allegation made by the petitioners that allotment of
land to the respondents is contrary to the public interest and
caused loss to the State exchequer, arbitrary and tainted with
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mala fides, a colourable exercise of power and violation of
Article 14 of Constitution of India and the principle of public
trust.
4. Submissions of learned counsel for petitioners:
4.1. Learned Senior Counsel submits that the official
respondents have allotted valuable government land to the
unofficial respondents on nomination basis with low price
without conducting public auction and therefore, the same is
gross violation of Articles 14, 37, 38, 39, 43 and 46 of the
Constitution of India. He further submits that respondent
No.2 issued Circular in 1997 mandates for allotment of the
lands in industrial areas, however contrary to the said
Circular allotted the valuable properties to an extent of
4,156.81 acres in favour of the unofficial respondents and
others.
4.2. The learned counsel further submits that respondent
No.2- Andhra Pradesh Industrial Infrastructure Corporation
framed Regulations in 1998. However, the official respondents
without following the mandatory procedure prescribed in the
Regulations allotted the public property to the unofficial
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respondents and others on nomination basis on nominal price
without conducting public auction and caused grave financial
loss to the public. At the time of allotment of the land, the
value of the properties is very high. The official respondents
themselves conducted public auction in Kokapet and the
auction purchaser purchased the land @ Rs.4.5 crores per
acre, whereas the official respondents allotted the land in
favour of the unofficial respondents and others for very low
price.
4.3. He further contends that respondent Nos.9, 30, 31, 32,
33, 35, 41 and 42 do not come within the purview of
Information Technology Companies. In spite of the same,
official respondents have allotted the land in their favour on
nomination basis. He also contends that respondent No.33
submitted letters dated 07.07.2006 and 10.07.2006 for
allotment of 1.00 acre of land at the tail end of Information
Technology Park, Nanakramguda i.e., after the land allotted to
respondent No.23. On 12.07.2006, a note was put up by the
Manager of respondent No.2 for allotment of 1.00 of land
@ Rs.5,000/- per sq. meter + 10% of frontage charges and to
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keep a balance area of 0.50 acres for the development of green
space. The Vice Chairman and Managing Director of the
respondent No.2 directed for allotment of 1.00 acre of land
and further directed to take a decision on the balance area of
0.50 acres after payment received from respondent No.33. On
14.07.2006, respondent No.33 filed application for allotment
of 1.00 acre of land with Earnest Money Deposit (EMD) and
process fee. On the very same day, the Manager of respondent
No.2 forwarded the application. On 20.07.2006, respondent
No.33 wrote a letter expressing their willingness to take the
balance area of 0.50 acres at 25% of the cost at which 1.00
acre was allotted and on the same day, respondent No.2
forwarded the same and on 18.08.2006, the remaining area of
0.50 acres was also allotted to respondent No.33, though the
said land is earmarked for development of green space. He
urges that the official respondents allotted the land on similar
lines to the respondent Nos.9, 31, 32, 34, 35, 39, 41 and 42.
4.4. Learned Senior Counsel vehemently contended that the
Government had issued G.O.Ms.No.114, dated 25.05.1999,
providing incentives for promotion of Information Technology
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Industries and Information Technology Enabled Services in
the State. As per the above said G.O., Government had
granted several benefits and exemptions to Information
Technology industries and also provided incentives, on the
other hand allotted the land to the unofficial respondents and
others on nomination basis. Once the Government providing
incentives for promoting Information Technology industries
and Information Technology Enabled Services, the official
respondents ought not to have allotted the lands on
nomination basis without conducting public auction and the
same is contrary to the Regulations framed by the respondent
No.2 and also contrary to G.O.Ms.No.114 dated 25.05.1999
issued by the Government.
4.5. He has further contended that as per the Regulations,
when two alternative modes i.e., allotment of the lands by way
of auction or by way of nomination are available, the official
respondents ought to have followed the mode by way of
auction only and not by way of nomination basis. If the official
respondents want to allot the land by way of nomination basis,
they have to record specific reasons. As per the Regulations,
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the respondent No.2 has to frame guidelines and in the
absence of such guidelines, the official respondents are not
entitled to allot the lands on nomination basis and the same is
contrary to law and gross violation of Article 14 of the
Constitution of India.
4.6. He points out that the Government acquired the land
from the poor farmers and allotted the same to the private
individuals with low price and the allottees have not complied
the terms and conditions of the allotment and they are not
provided employment. In such circumstances, the official
respondents ought to have taken action against the unofficial
respondents. Though the official respondents initiated
proceedings by issuing show-cause notices in respect of some
of the allottees for non compliance of the conditions, they have
not taken steps to cancel the allotment and not taken physical
possession of the properties.
4.7. He further points out that respondent Nos.9, 31, 32, 33,
34, 37, 39 41 and 42 are not eligible for allotment of the lands.
Though the allotments were made in the year 2006 in favour
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of respondent Nos.9, 10, M/s.Paradigm and respondent No.12,
no construction activity was undertaken by them and they
have completed constructions recently and doing real estate
ventures in the subject property by giving the same for
development to third parties contrary to the allotment
conditions.
4.8. In support of the aforesaid submissions, he has placed
reliance on the decisions of the Supreme Court in Ramana
Dayaram Shetty v. International Airport Authority of India 1,
M/s.Kasturi Lal Lakshmi Reddy, etc. v. the State of J and K
and another 2, New India Public School and others v. HUDA and
others 3, Akhil Bhartiya Upbhokta Congress v. State of Madhya
Pradesh and others 4, Natural Resources Allocation, In re,
Special Reference No. 1 of 20125 and Indian Medicines
Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Co-
operative Society Ltd. and Others 6.
(1979) 3 SCC 489
AIR 1980 SC 1992
(1996) 5 SCC 510
(2011) 5 SCC 29
(2012) 10 SCC 1
2023 SCC OnLine SC 5
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5. Submissions of learned Advocate General for
respondent Nos.1 and 2 :
5.1. Learned Advocate General submitted that respondent
No.1-Government had introduced the scheme of inviting
companies/entrepreneurs for investment and also for
establishment of Information Technology projects for the
welfare of the State, especially for providing employment to the
unemployed youth, by allotting the lands on nomination basis.
He has further submitted that the official respondents have
initiated proceedings under Land Acquisition Act, 1894, for
acquiring the lands for public purpose for allotment in favour
of the companies and passed Awards. Questioning the
acquisition proceedings, the land owners have filed Writ
Petitions before erstwhile High Court of Andhra Pradesh,
Hyderabad, and the same were dismissed.
5.2. He has contended that the State Government is having
power to introduce new policies, schemes in the interest of
public and also having power to withdraw the old policies and
schemes basing on the requirement. Initially the erstwhile
State of Andhra Pradesh and several other States have
::28::
followed the very same procedure inviting companies/
entrepreneurs for investment and also for establishment of
Information Technology projects for the welfare of the State,
especially for providing employment to the unemployed youth
by allotting the lands on nomination basis. He has further
contended that several States allotted the lands to the
entrepreneurs at free of cost, though the State of Andhra
Pradesh allotted the lands by receiving amounts on
nomination basis and the said companies are providing
employment. The petitioners have filed writ petition in the year
2007, whereas the allotment was made in favour of the
unofficial respondents between 1996 to 2006 i.e., after lapse of
long period and the petitioners have not taken any steps in the
writ petition for adjudication expeditiously and kept silent.
During the interregnum period from the date of allotment till
this date, several developments have taken place, now after a
long period of more than 28 years, the petitioners are not
entitled to seek the relief under the garb of public interest,
especially though there is no public interest involved. He has
submitted that the petitioners are not entitled to question the
factum of variation, as no rival companies made ay complaint
::29::
nor filed any writ petitions questioning allotment made in
favour of the unofficial respondents.
5.3. He has submitted that the erstwhile State of Andhra
Pradesh formulated Information Technology policy in the year
1999 and the same was revised from time to time for providing
employment opportunities in the Information Technology
sector by providing incentives to attract the global leaders in
the Information Technology industry, and the said procedure
is followed by majority of the States. He has further submitted
that the companies to whom the lands were allotted have
utilized the allotted land and constructed buildings and
created significant employment opportunities to the public.
He has further submitted that the Government had cancelled
the allotments made in favour of the companies, who have not
utilized the land for agreed purpose. Supporting the aforesaid
submissions, the learned Advocate General has submitted a
tabular statement.
5.4. The learned Advocate General has contended that the
petitioners have not attributed any mala fides and also there
is no discrimination in the allotment of the lands and there is
::30::
no loss to public exchequer. Under Information Technology
policy comprehensive set of guidelines were prepared covering
all aspects for grant of incentives and allotment of land etc.,
the Government constituted CCITE under the Chairmanship
of Secretary, ITC Department for a single window reference for
recommending for grant of incentives to Information
Technology industry. The TSIIC as a nodal agency to the State
Government made allotment of land to the Information
Technology companies basing upon the MOUs and issued
specific directions. The allotment of lands to companies
encouraging industrialization and socio-economic development
in phases for establishing industrial parks was continued even
after filing the writ petition. The State has made several
allotments before and after bifurcation of the State in similar
lines. He also contended that the allotments are part of the
policy decisions and in the interest of public only. Hence, this
Court cannot interfere with soundness and wisdom of a policy.
The petitioners have not attributed any mala fides and raised
any ground of discrimination.
::31::
5.5. In support of his contentions, he has relied on the
decisions of the Supreme Court and the High Court of Andhra
Pradesh in Sachidanand Pandey and another v. State of
West Bengal and others 7, Chairman & MD, BPL Ltd. v. S.P.
Gururaja and others 8, Sooraram Pratap Reddy and others v.
District Collector, Ranga Reddy District and others 9, Centre for
Public Interest Litigation v. Union of India and others 10,
Odisha Industrial Infrastructure Development Corporation
Ltd. v. Pitabasa Mishra and Others 11, State of Tamil Nadu
v. National South Indian River Interlinking Agriculturist
Association 12, Union of India v. Cosmo Films Limited 13
and Sri.T.Harish Rao, v. the Government Of Andhra Pradesh 14.
6. Submissions of learned counsel for respondent Nos.6,
7, 12, 18 and 20:
6.1. Learned counsel for respondent Nos.6, 7, 12, 18 and 20
submits that they are adopting the very same submissions
(1987) 2 SCC 295
(2003) 8 SCC 567
(2008) 9 SCC 552
(2016) 6 SCC 408
(2018) 3 SCC 732
(2021) 15 SCC 534
(2023) 9 SCC 244
2024 (4) ALD 606 (TS) (DB)
::32::
made by the learned Advocate General, except the following
additional submissions which are mentioned as below.
6.2. Sri P. Sri Raghu Ram, learned Senior Counsel appearing
on behalf of respondent Nos.18 and 20 submits that the
petitioners have not questioned the initial allotment made in
favour of the respondent Nos.18 and 20 and also they have
not established or proved the arbitrariness and discrimination.
6.3. Sri I.Ramesh, learned counsel appearing for respondent
No.12 submits that respondent No.12 complied with all the
conditions imposed by the official respondents while allotting
the land in its favour and they completed the construction and
established the company and they have provided employment
to the unemployed youth and the petitioners have not made
any allegations against respondent No.12.
6.4. Sri Nithin Prasad, learned counsel appearing for
respondent No.6, submits that respondent No.6 has complied
with all the terms and conditions mentioned by the official
respondents while allotting the land and respondent No.6
constructed building and established the company within the
::33::
prescribed time and invested huge amount of Rs.900 crores
in the said project and as on today respondent No.6 had
provided employment to 14,000 people and at this stage, if
any adverse orders are passed, respondent No.6 as well as the
employees who are working in the said company would be put
to great irreparable loss and hardship.
6.5. Sri Challa Gunaranjan, learned counsel for respondent
No.7, submits that the official respondents allotted the land
after conducting bid process and in the said process,
respondent No.7 was declared as highest bidder/L-1 and he
paid the entire amount. The official respondents have executed
registered sale deed in favour of respondent No.7 and
construction of the entire project completed long back and the
petitioners have not made any specific allegations against
respondent No.7.
7. Reply submissions of learned Senior counsel for
petitioners:
7.1. Learned Senior Counsel submits that the allotments
made in favour of the unofficial respondents on nomination
basis only, without inviting any applications and without
::34::
conducting any auction. The allotment made in favour of
unofficial respondents is not in the interest of public and huge
valuable lands were allotted to the unofficial respondents
under the guise of industrial and economic development. He
further submitted that official respondents have not disputed
the locus standi of the petitioners. The unofficial respondents
have not complied with the conditions of allotment and not
provided 100% employment and they only provided
employment below 50%. He further submitted that the
judgments relied upon by the learned counsel for the
respondents are not applicable to the facts and circumstances
of the case.
Analysis of the case:
8. We have considered the rival submissions made by the
respective parties and perused the material available on
record. Regulations 4 to 6 of the Regulations are extracted for
the facility of reference:
"4. APPLICATIONS FOR ALLOTMENT
4.1. Applications for allotment of Plot/
Shed/Shop/godown in industrial areas for industrial
::35::
purpose and also for common use facilities for industries
shall be made in the prescribed format in Form 1.
4.2. The application forms can be obtained on payment
of application cost from the Zonal/Sub Zonal and Head
Office of the Corporation. The application will be delivered
free of cost to SC/ST entrepreneurs on production of a
copy of caste certificate issued by the competent
authority.
4.3. Wherever sufficient application forms are not
available, Photostat copy of the prescribed application
form for allotment of plot/shed/godown can be used by
entrepreneurs for filling applications. However at the time
of submission of application, the applications cost shall be
remitted along with other payments.
4.4. Separate application for each industrial unit or for
expansion of the existing industrial unit shall be
submitted.
4.5. The applicant should not leave any blank column in
the application form. If a particular column/item is not
applicable, the applicant shall write "Not applicable"
(N.A.). No blanks shall be left over.
4.6. The application in full shape shall be accompanied
by Earnest Money Deposit as detailed below together with
non-refundable process fee of Rs.250/- per application.
The entrepreneurs who belong to SC or ST category are
exempted from payment of Earnest Money Deposit.
However they must pay the non-refundable process fee.
(a) For Plots upto 1.00 Acre
(b) For Plots beyond 1.00 Acre
::36::
(c) For each Shed
(d) For each Mulgi / small godown
(e) For each shop in Commercial Complex
(f) For each house/flat
(g) In the case of allotment through auction-5% of the
upset price fixed by the Corporation for each
Plot/Shop/godown etc.
4.7. The applicant must also enclose the following
documents to the application:-
(a) Detailed Project Report/profile justifying/ the extent of
the land/shed applied for with break-up, details of
plot/shed already possessed, whether the premises are
required for re-location (Shifting) or expansion purpose
manufacturing process, proposed installed capacity
(quantity and value), power, water requirement etc, for
the project.
(b) Copy of partnership deed, in case of existing
partnership firm. In the case of proposed partnership
firm, it should be stated "promoter of proposed
partnership firm", giving the names and full addresses of
all partners.
(c) A copy of Memorandum and Articles of Association in
case of limited companies and a copy of resolution
authorizing the applicant to apply on behalf of the
company; if the application is made in the capacity of a
promoter of proposed company, same should clearly be
stated as "Promoter of Proposed Private/Public Ltd.
Company" and names and full addresses of all promoters
may be indicated. If application is being made on behalf
of a group of companies and if at the time of making
application, it is known as to which of the companies or a
new private/public company from the group will
::37::
implement the project, the applicant should clearly
mention this in the application form, and also enclose a
list of the companies or individuals with full addresses
who are likely to take part in implementation or
promotion of the new company.
(d) In the case of Co-operative Societies/Societies
registered under the Societies Registration Act similar
details as in the case of limited company may be
furnished.
(e) Wherever applicable the copies of certificates relating to
following items may be enclosed.
(I) SSI Registration Certificate issued by the District
Industries Centre or any other relevant certificate.
(II) Technical Education/Qualification of
entrepreneurs/promoters.
(III) Caste certificate issued by the competent authority in
case of SC/ST Entrepreneurs.
(IV) Discharge Certificate in case of ex-service men.
(V) Self-employment registration in case of self-employed
entrepreneurs.
(VI) No Objection Certificate from A.P. Pollution Control
Board (APPCB).
4.8. The Application duly filled-in along with enclosures
must be delivered in any one of the concerned offices i.e.;
(a) Sub-Zonal Office (AZM/DZM): Or
(b) Zonal Office;
4.9. Acknowledgement for the receipt of the application
and a receipt towards payment of Earnest Money Deposit
and Process fee in the prescribed format in Form 2 must
be issued immediately by the concerned zonal office or the
sub-zonal office.
::38::
4.10. Receipt issued specifying the particular plot/shed or
for which the EMD paid does not constitute any
commitment on the part of the Corporation to allot the
same to such applicant.
5. REGISTRATION & SCRUTINY OF APPLICATIONS
5.1. The Zonal Manager & Assistant Zonal Manager must
get all the applications received in Zonal/Sub-Zonal
Offices entered in the Applications Register maintained in
the prescribed format in form 3 at the Sub-Zonal Office.
5.2. All the applications received and registered in the
Application Registers of the Sub-Zonal office shall be
verified by Zonal Manager/Assistant Zonal Manager as
per the prescribed check memo in form 4 within (3) days
of receipt to find out whether the same are in full shape.
Incomplete applications should be returned to the
applicant along with Earnest Money Deposit immediately
within 3 days of receipt of the same.
5.3. The applications received on the same date shall be
categorized into the following categories and priority for
allotment shall be given in the following order:-
(a) SC applicants: 15% of the vacancies existing as on the
date of consideration of application.
(b) ST applicants: 6% of the vacancies existing as on the
date of consideration of application;
(c) Ex-Servicemen: 5% of the vacancies existing as on the
date of consideration of application:
(d) The allocates who seek for adjoining plot/shed for
expansion of their existing units in the same Industrial
Area involving a minimum 25% expansion in the original
::39::
installed capacity of the unit for the same line of
manufacture.
(e) Women entrepreneurs;
(f) EDP trainees;
(g) Techno crafts having experience in the line of
manufacture who intend to resign from the service in
Government, Public or Private undertakings for the
purpose of setting up of industrial units;
(h) Others
5.4. The above priorities will not apply in the case of the
industrial areas where allotment is through public
auction.
5.5. The Managing Director of the Corporation may issue
guidelines for deciding allotments in case of certain
industrial areas.
6. PROVISIONAL ALLOTMENT
6.1. All the applications received shall be decided and the
provisional order or rejection of application as the case
may be shall be issued within (15) days from the date of
receipt of application in the Zonal/Sub-Zonal Office in full
shape.
6.2. (a) Zonal Manager is competent to make allotment
upto two acre of land in any industrial area under his
jurisdiction.
(b) Zonal Manager cam make allotments in industrial
areas in his jurisdiction beyond two acres of land with the
prior approval of Managing Director.
6.3 (a) On verification as per Check Memo
::40::
If the application is in order and the plot/shed/godown
sought by the applicant is vacant the Zonal Manager shall
make provisional allotment in the prescribed proforma in
form 5 in favour of the applicant.
(b) If the plot/shed/godown sought by the applicant is not
vacant, the Zonal Manager shall return the EMD duly
giving reasons for not considering the application.
(c) Applications from the allocates, their firms, companies
who were having plots/sheds/land in the industrial areas
developed by the Corporation and who are in arrears on
any account like cost of plot/shed, interest, penalties,
property tax, etc. shall be returned by the Zonal
Manager/Assistant Zonal Manager to the applicant along
with the Earnest Money Deposit.
6.4. The provisional allotment letter should indicate the
plot/shed/godown/No, extent, purpose of allotment, and
cost of land/shed/cost development charges.
6.5. Wherever possible a sketch with boundaries of plots
and copy of site plan, items of the infrastructure to be
provided shall also be indicated along with the provisional
allotment letter.
6.6. The allottee shall be liable to pay the entire cost of
the land/shed/shop/godown as indicated in the
provisional allotment with undertakings as prescribed
therein within 90 days of the receipt of the provisional
allotment letter failing which the provisional allotment
shall stand cancelled without any further notice.
6.7. Provisional Allotment letter should be dispatched to
the address of the allottee by registered post with
::41::
acknowledgement due or handed over in person to the
allottee under proper acknowledgement."
9. It is well settled legal proposition that every
action/decision of the State or its agencies in dealing with the
public property must be founded on a fair, discernible and
well defined policy. The scope of judicial review in dealing with
such matters is also well delineated by catena of decisions. In
Sachidanand Pandey and another v. State of West Bengal
and others 15, it was held as under:
"40. ... ... State-owned or public-owned property is not to
be dealt with at the absolute discretion of the executive.
Certain precepts and principles have to be observed. Public
interest is the paramount consideration. One of the methods
of securing the public interest, when it is considered
necessary to dispose of a property, is to sell the property by
public auction or by inviting tenders. Though that is the
ordinary rule, it is not an invariable rule. There may be
situations where there are compelling reasons necessitating
departure from the rule but then the reasons for the
departure must be rational and should not be suggestive of
discrimination. Appearance of public justice is as important
as doing justice. Nothing should be done which gives an
appearance of bias, jobbery or nepotism."
(1987) 2 SCC 295
::42::
10. In Chairman & MD, BPL Ltd v. S.P.Gururaja and
others 16 is a case where dispute arose over the decision of the
High Court to question the validity of a policy decision by the
State regarding the pricing of industrial land allotments. The
appellants argued that the High Court improperly reviewed the
State's policy decision, which had been based on expert
assessments and a High-Level Committee's recommendations.
The High Court had criticized the State for haste and for
offering a lower price per acre than what was received from
another entrepreneur. The Apex Court held that the High
Court erred by intervening in the State's policy decisions,
which were within the expertise of statutory authorities and
based on relevant regulations. The Court emphasized that
judicial review should not extend to policy decisions made by
experts unless there is clear evidence of arbitrariness or
illegality. The principle in the said decision highlighted is that
courts should exercise self-restraint and not interfere with
well-considered policy decisions made by expert bodies, as
long as they are within the bounds of statutory provisions and
do not reflect irrationality or illegality.
(2003) 8 SCC 567
::43::
11. In Sooraram Pratap Reddy and others v. District
Collector, Ranga Reddy District and others 17 , the Hon'ble
Apex Court upheld that the land acquisition made by the
Government of Andhra Pradesh for a construction of
Information Technology Park, despite allegations of misuse of
power and violations of the Land Acquisition Act, 1894. The
appellants argued that the acquisition was unfairly benefitted
private entities rather than serving a genuine public purpose,
but the Court ruled that land acquisition for public purposes,
including projects involving private entities, is permissible as
long as the process follows legal and procedural norms and is
not driven by mala fides. The Supreme Court emphasized that
judicial review in such cases is confined to ensuring legality
and fairness, without examining into the merits of policy
decisions, reaffirming that eminent domain can be lawfully
exercised for infrastructure development in the public interest.
In para 129, the Hon'ble Apex Court held that:
"As already adverted to earlier, the State of Andhra Pradesh in
the background of "World Tourism Organisation Report" and
"Vision 2020 Document" took a policy decision for the
development of the city of Hyderabad. For the said purpose, it
(2008) 9 SCC 552
::44::
decided to establish an integrated project which would make
Hyderabad a major business-cum-leisure tourism
infrastructure centre for the State. The project is both
structurally as well as financially integrated. It is to be
implemented through Andhra Pradesh Infrastructure and
Investment Corporation (APIIC) which has taken all steps to
make Hyderabad a world class business destination".
12. In Vallianur Iyarkkai Padukappu Maiyam vs. Union of
India 18, a three-Judge Bench of the Supreme Court held that
the State is not bound to allot resources such as power, water
and raw-materials through tender and is free to negotiate with
a private entrepreneur. In the aforesaid case, the Government
of Pondicherry entered into an agreement for development of
Pondicherry Port without issuing an advertisement or inviting
tenders. The Supreme Court held that the action of the
Government of Pondicherry was justified. In paragraphs 171
and 172, the Supreme Court has held as under:
"171. In a case like this where the State is allocating
resources such as water, power, raw materials, etc. for the
purpose of encouraging development of the port, this Court
does not think that the State is bound to advertise and tell
the people that it wants development of the port in a
particular manner and invite those interested to come up
(2009) 7 SCC 561
::45::
with proposals for the purpose. The State may choose to do
so if it thinks fit and in a given situation it may turn out to
be advantageous for the State to do so, but if any private
party comes before the State and offers to develop the port,
the State would not be committing breach of any
constitutional obligation if it negotiates with such a party
and agrees to provide resources and other facilities for the
purpose of development of the port.
172. The State is not obliged to tell Respondent 11
"please wait I will first advertise, see whether any other
offers are forthcoming and then after considering all offers,
decide whether I should get the Port developed through you".
It would be most unrealistic to insist on such a procedure,
particularly, in an area like Pondicherry, which on account
of historical, political and other reasons, is not yet
industrially developed and where entrepreneurs have to be
offered attractive terms in order to persuade them to set up
industries. The State must be free in such a case to
negotiate with a private entrepreneur with a view to inducing
him to develop the Port and if the State enters into a
contract with such an entrepreneur for providing resources
and other facilities for developing the Port, the contract
cannot be assailed as invalid because the State has acted
bona fide, reasonably and in public interest."
13. In Akhil Bhartiya Upbhokta Congress v. State of Madhya
Pradesh and others 19, the Supreme Court had an occasion to
examine the validity of the action taken by the Government of
(2011) 5 SCC 29
::46::
Madhya Pradesh to allot 20 acres of land to a Trust on an
application being made by it. The Supreme Court while placing
reliance on its earlier judgments, namely S.G.Jaisinghani vs.
Union of India 20, Ramana Dayaram Shetty (supra), Kasturilal
Lakshmi Reddy (supra), Shrilekha Vidyarthy vs. State of Uttar
Pradesh 21, LIC vs. Consumer Education and Research Centre 22,
New India Public School vs. HUDA 23 and Common Cause (Petrol
Pumps Matter) vs. Union of India 24 held as under:
"What needs to be emphasised is that the State
and/or its agencies/instrumentalities cannot give largesse to
any person according to the sweet will and whims of the
political entities and/or officers of the State. Every
action/decision of the State and/or its agencies/
instrumentalities to give largesse or confer benefit must be
founded on a sound, transparent, discernible and well-
defined policy, which shall be made known to the public by
publication in the Official Gazette and other recognised
modes of publicity and such policy must be
implemented/executed by adopting a non-discriminatory
and non-arbitrary method irrespective of the class or
category of persons proposed to be benefited by the policy.
The distribution of largesse like allotment of land, grant of
quota, permit licence, etc. by the State and its
agencies/instrumentalities should always be done in a fair
AIR 1967 SC 1427
(1991) 1 SCC 212
(1995) 5 SCC 482
(1996) 5 SCC 510
(1996) 6 SCC 530
::47::
and equitable manner and the element of favouritism or
nepotism shall not influence the exercise of discretion, if
any, conferred upon the particular functionary or officer of
the State."
14. In Centre for Public Interest Litigation vs. Union of
India 25, the Supreme Court held that first come first serve
policy was arbitrary while alienating natural resources. It was
further held that though auction is a preferred method of
allocation, it cannot be construed to be a constitutional
requirement.
15. In Natural Resources Allocation, In Re, Special
Reference No.1 of 2012 26, a Presidential Reference was
whether the only permissible method for disposal of all natural
resources across all sectors and in all circumstances is by
conduct of auction, the Supreme Court held as under:
"107. From a scrutiny of the trend of decisions it is
clearly perceivable that the action of the State, whether it
relates to distribution of largesse, grant of contracts or
allotment of land, is to be tested on the touchstone of Article
14 of the Constitution. A law may not be struck down for
being arbitrary without the pointing out of a constitutional
infirmity as McDowell case [(1996) 3 SCC 709] has said.
(2012) 3 SCC 1
(2012) 10 SCC 1
::48::
Therefore, a State action has to be tested for constitutional
infirmities qua Article 14 of the Constitution. The action has
to be fair, reasonable, non-discriminatory, transparent, non-
capricious, unbiased, without favouritism or nepotism, in
pursuit of promotion of healthy competition and equitable
treatment. It should conform to the norms which are
rational, informed with reasons and guided by public
interest, etc. All these principles are inherent in the
fundamental conception of Article 14. This is the mandate of
Article 14 of the Constitution of India.
Xxx xxx xxx
148. In our opinion, auction despite being a more
preferable method of alienation/allotment of natural
resources, cannot be held to be a constitutional requirement
or limitation for alienation of all natural resources and
therefore, every method other than auction cannot be struck
down as ultra vires the constitutional mandate.
149. Regard being had to the aforesaid precepts, we have
opined that auction as a mode cannot be conferred the
status of a constitutional principle. Alienation of natural
resources is a policy decision, and the means adopted for
the same are thus, executive prerogatives. However, when
such a policy decision is not backed by a social or welfare
purpose, and precious and scarce natural resources are
alienated for commercial pursuits of profit maximising
private entrepreneurs, adoption of means other than those
that are competitive and maximise revenue may be arbitrary
and face the wrath of Article 14 of the Constitution. Hence,
rather than prescribing or proscribing a method, we believe,
a judicial scrutiny of methods of disposal of natural
::49::
resources should depend on the facts and circumstances of
each case, in consonance with the principles which we have
culled out above. Failing which, the Court, in exercise of
power of judicial review, shall term the executive action as
arbitrary, unfair, unreasonable and capricious due to its
antimony with Article 14 of the Constitution.
150. In conclusion, our answer to the first set of five
questions is that auctions are not the only permissible
method for disposal of all natural resources across all
sectors and in all circumstances."
16. In Centre for Public Interest Litigation v. Union of
India and others 27, the petitioner challenged the Government
of India's decision to grant a voice telephony license to
Reliance Jio Info Limited for 1658 crores, arguing that the fee
was significantly undervalued compared to an estimated
25,000 crores, and that Reliance Jio was given a preferential
treatment with lower spectrum usage charges (SUC) compared
to other operators. The Supreme Court rejected the challenge
and held that the policy decision to grant the license was
made after thorough deliberation and was based on expert
recommendations from the Telecom Regulatory Authority of
India (TRAI). The principle highlighted in the said decision is
(2016) 6 SCC 408
::50::
that that judicial review Court should not interfere with policy
decisions in exercise of its power unless it is arbitrary, mala
fide, or in violation of statutory provisions. It was further held
that the courts should respect the separation of powers and
not interfere with well-considered administrative decisions
unless they are demonstrably irrational or illegal.
17. In Indian Medicines Pharmaceuticals Corporation
Limited v. Kerala Ayurvedic Cooperative Society Limited
and others 28, in para 23 the Supreme Court held as under:
"23. The following principles emerge from the
discussion above:
(i) Government action must be just, fair and reasonable and
in accordance with the principles of Article 14; and
(ii) While government can deviate from the route of tenders
or public auctions for the grant of contracts, the
deviation must not be discriminatory or arbitrary. The
deviation from the tender route has to be justified and
such a justification must comply with the requirements
of Article 14."
18. In City Montessori School vs. State of Uttar
Pradesh 29, a two-Judge Bench of the Supreme Court referred
2023 SCC OnLine SC 5
2024 SCC OnLine SC 1867
::51::
to with the approval the law laid down in Akhil Bhartiya
Upbhokta Congress v. State of Madhya Pradesh and
others 30, wherein it was held as under:
"65. What needs to be emphasised is that the State
and/or its agencies/instrumentalities cannot give largesse to
any person according to the sweet will and whims of the
political entities and/or officers of the State. Every action/
decision of the State and/or its agencies/instrumentalities
to give largesse or confer benefit must be founded on a
sound, transparent, discernible and well-defined policy,
which shall be made known to the public by publication in
the Official Gazette and other recognised modes of publicity
and such policy must be implemented/executed by adopting
a non-discriminatory and non-arbitrary method irrespective
of the class or category of persons proposed to be benefited
by the policy. The distribution of largesse like allotment of
land, grant of quota, permit licence, etc. by the State and its
agencies/instrumentalities should always be done in a fair
and equitable manner and the element of favouritism or
nepotism shall not influence the exercise of discretion, if
any, conferred upon the particular functionary or officer of
the State.
66. We may add that there cannot be any policy, much
less, a rational policy of allotting land on the basis of
applications made by individuals, bodies, organisations or
institutions dehors an invitation or advertisement by the
State or its agency/instrumentality. By entertaining
applications made by individuals, organisations or
(2011) 5 SCC 29
::52::
institutions for allotment of land or for grant of any other
type of largesse the State cannot exclude other eligible
persons from lodging competing claim. Any allotment of land
or grant of other form of largesse by the State or its
agencies/instrumentalities by treating the exercise as a
private venture is liable to be treated as arbitrary,
discriminatory and an act of favouritism and/or nepotism
violating the soul of the equality clause embodied in
Article 14 of the Constitution.
67. This, however, does not mean that the State can
never allot land to the institutions/organisations engaged in
educational, cultural, social or philanthropic activities or are
rendering service to the society except by way of auction.
Nevertheless, it is necessary to observe that once a piece of
land is earmarked or identified for allotment to
institutions/organisations engaged in any such activity, the
actual exercise of allotment must be done in a manner
consistent with the doctrine of equality. The competent
authority should, as a matter of course, issue an
advertisement incorporating therein the conditions of
eligibility so as to enable all similarly situated eligible
persons, institutions/organisations to participate in the
process of allotment, whether by way of auction or
otherwise. In a given case the Government may allot land at
a fixed price but in that case also allotment must be
preceded by a wholesome exercise consistent with
Article 14 of the Constitution."
19. After having noticed the well settled parameters with
regard to the disposal of the public property, now we may refer
::53::
to the scope of judicial interference in policy matters. In
M.P.Oil Extraction vs. State of M.P. 31, the Supreme Court
held that Court cannot and should not outstep its limit and
tinker with the policy decision of the executive functionary. In
paragraph 41, it was held as under:
"41. After giving our careful consideration to the
facts and circumstances of the case and to the
submissions made by the learned counsel for the parties,
it appears to us that the Industrial Policy of 1979 which
was subsequently revised from time to time cannot be
held to be arbitrary and based on no reason whatsoever
but founded on mere ipse dixit of the State Government of
M.P. The executive authority of the State must be held to
be within its competence to frame a policy for the
administration of the State. Unless the policy framed is
absolutely capricious and, not being informed by any
reason whatsoever, can be clearly held to be arbitrary and
founded on mere ipse dixit of the executive functionaries
thereby offending Article 14 of the Constitution or such
policy offends other constitutional provisions or comes
into conflict with any statutory provision, the Court
cannot and should not outstep its limit and tinker with
the policy decision of the executive functionary of the
State. This Court, in no uncertain terms, has sounded a
note of caution by indicating that policy decision is in the
domain of the executive authority of the State and the
Court should not embark on the unchartered ocean of
(1997) 7 SCC 592
::54::
public policy and should not question the efficacy or
otherwise of such policy so long the same does not offend
any provision of the statute or the Constitution of India.
The supremacy of each of the three organs of the State i.e.
legislature, executive and judiciary in their respective
fields of operation needs to be emphasised. The power of
judicial review of the executive and legislative action must
be kept within the bounds of constitutional scheme so
that there may not be any occasion to entertain
misgivings about the role of judiciary in outstepping its
limit by unwarranted judicial activism being very often
talked of in these days. The democratic set-up to which
the polity is so deeply committed cannot function properly
unless each of the three organs appreciate the need for
mutual respect and supremacy in their respective fields."
20. In Directorate of Film Festivals vs. Gaurav Ashwin
Jain 32, the Supreme Court reiterated the scope of judicial
review in policy matters and held that the Courts cannot
correct or examine the correctness, appropriateness of a policy
and cannot act as an advisor to the executive on matters of
policy. It was further held that the Court cannot interfere with
policy either on the ground that the same is erroneous or on
the ground that a better, fairer or wiser alternative is available.
In para 16 of the aforesaid decision, it was held as under:
(2007) 4 SCC 737
::55::
"16. The scope of judicial review of governmental
policy is now well defined. Courts do not and cannot act
as Appellate Authorities examining the correctness,
suitability and appropriateness of a policy, nor are courts
advisors to the executive on matters of policy which the
executive is entitled to formulate. The scope of judicial
review when examining a policy of the Government is to
check whether it violates the fundamental rights of the
citizens or is opposed to the provisions of the
Constitution, or opposed to any statutory provision or
manifestly arbitrary. Courts cannot interfere with policy
either on the ground that it is erroneous or on the ground
that a better, fairer or wiser alternative is available.
Legality of the policy, and not the wisdom or soundness of
the policy, is the subject of judicial review."
21. In Federation Haj PTOs of India vs. Union of India 33,
it was held that it is not within the realm of the Courts to
examine whether there could have been a better policy and on
that parameters direct the executive to formulate, change,
vary or modify the policy which appears better to the Court. It
was further held that it is well settled that in complex social,
economic and commercial matters, decisions have to be taken
by the Government authorities keeping in view several factors
and policy decisions of the executive are best left to it and a
(2020) 18 SCC 527
::56::
Court cannot be propelled into the unchartered ocean of
government policy. It is equally well settled legal proposition
that the Court cannot sit in judgment over the wisdom of the
policy evolved by the executive. Similar principles were
reiterated with approval by the Supreme Court in Vivek
Narayan Sharma (Demonetisation Case-5J) vs. Union of
India 34.
22. In the backdrop of aforesaid well settled legal principles,
we may refer to the facts of the case in hand. From the
perusal of averments made in the counter affidavit, it is
evident that in order to ensure the industrial growth and for
development of the State, Andhra Pradesh Industrial
Infrastructure Corporation was established on 26.09.1973
with the object to formulate, promote, finance, aid, assist,
establish, manage and control scheme, projects or
programmes, to provide and develop infrastructure facilities in
the State. From the perusal of the counter affidavit, it is
further evident that the State Government had taken an
initiative to leverage the power of modern information and
(2023) 3 SCC 1
::57::
communication technology to provide more convenient,
accessible and transparent Government services to the
citizens. The avowed object of the policy was to attract
maximum employment potential of the industry to the State.
23. A comprehensive set of guidelines was prepared covering
all aspects relating to incentives to the Information Technology
industries, namely eligibility criteria, procedure for processing
the applications, terms and conditions of allotment etc.
A Consultative Committee on Information Technology Industry
was constituted vide G.O.Ms.No.3, dated 25.05.2000 and
G.O.Ms.No.5, dated 16.06.2000 for recommending grant of all
Information Technology incentives. In furtherance of the
aforesaid policies to promote the growth of Information
Technology industries in the State and to make the erstwhile
State of Andhra Pradesh an Information Technology Hub, in
the year 2004-05, the growth rate in Information Technology
sector in the State was 64.5% as against the national average
of 34%. The export turnover of the industry was at Rs.8,270
crores and in the year 2007-08 the growth rate was 41% as
against the national average of 33.88%. From the perusal of
::58::
the counter, it is evident that the growth of Information
Technology in the State from 1997 to till 2007-08 is as follows:
Year Growth in Exports No. of Investments
Employees (Rs.crores)
(cumulative) (cumulative)
No. of Units Exports
(cumulative) (Rs.crores)
Year wise
1999-00 977 1059 25500 1423
2000-01 1206 1917 48700 2025
2001-02 1322 2907 64000 2350
2002-03 1401 3668 71445 2849
2003-04 909 5025 85945 3533
2004-05 1061 8270 126920 4341
2005-06 1234 12521 151789 6101
2006-07 1408 18582 187450 8001
2007-08 1584 26122 239000 10101
24. From the perusal of the counter, it further reveals that in
order to sustain and improve the industrial growth in the
State and to attract the Information Technology industries to
the State, Information Technology Policy of the State was
revised from time to time and the Information Technology
Policy vide G.O.Ms.No.27, dated 21.06.2002, was formulated
for the years 2002-2005 and thereafter, another Information
Technology Policy vide G.O.Ms.No.11, dated 21.03.2005, was
formulated for the years 2005-2010. In pursuance of the
policy framed by the State Government to attract revenue as
::59::
well as to generate employment in the erstwhile State of
Andhra Pradesh, the allotment of land was made without
conducting auctions at the concessional rate to attract the
establishment of industries. Under the policy, the rebate also
was linked to employment to attract Information Technology
investments in the State keeping in view the competition from
the neighbouring States like Karnataka, Maharashtra and
Tamil Nadu etc. The object of providing facilities through
Information and Communication Technology Policy is to
attract investments for the State for Information Technology
industry and to generate employment for the residents of the
State. On account of the Policy decision taken by the State
Government, the State was able to attract major Information
Technology Companies to Hitech City, Software Units Layout
in Madhapur as well as Multi National Companies like
Microsoft, CA, Kanbay, UBS, Franklin & Templeton, WIPRO,
Honeywell, Amazon, Virtusa, Sierra Atlantic etc. The allotment
of land to Information Technology Companies has been made
with a specific condition that the Company shall not assign,
transfer or alienate the land to any other person other than
::60::
the Information Technology industries as specified in the
Information and Communication Technology Policy.
25. The Policy was framed by the State Government with a
view to attract investment in the State, to provide employment
and to generate the revenue for the State. In order to attract
investment in the State and to generate employment as well as
revenue, the land was allotted to the industries who were
interested in setting up their establishments in the State.
There is no allegation of mala fides against the respondents.
The Policy of the State Government cannot be said to be
arbitrary or irrational and the same is also not mala fide.
Therefore, no case for interference with the policy decision of
the State Government to allot the land on concessional rate to
the industries in order to provide employment and to generate
revenue for the State is made out.
26. We may refer to the tabular statement produced by the
learned Advocate General which is extracted below for the
facility of reference:
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::62::
::63::
::64::
::65::
::66::
::67::
27. From perusal of the aforesaid Table, it is evident that
respondent Nos.13 (M/s.Hinduja National Power Corporation
Limited), 43 (M/s.Symbiosys Technologies), 44 (M/s.Color
Chips Entertainment & Media Limited), 45 (M/s.Softsol India
Limited), 46 (M/s.Sankhya Technologies Private Limited), 47
(M/s.Mahathi Software Private Limited) and 48 (M/s.Navayuga
Infotech Private Limited) as well as respondent Nos.50
(M/s.NuNet Technologies Private Limited), 51 (M/s.ACN
PInfotech (India) Private Limited), 52 (M/s.Kenexa
Technologies Private Limited), 53 (M/s.E Centric Solutions
Private Limited), 54 (M/s.IIC Technologies Private Limited) and
55 (M/s.Worldtech Software Solutions Private Limited) and
respondent Nos.57 (M/s.Metaminds Software Solutions
Limited), 58 (M/s.IIC Systems Private Limited), 59 (M/s.3K
Technologies Limited), 60 (M/s.Etisbew Company Private
Limited) and 61 (M/s.Miracle Software Systems (India) Private
Limited) are situated in the State of Andhra Pradesh, which
has come into existence with effect from 02.06.2014.
Therefore, no relief in the writ petition with regard to the
aforesaid respondents can be granted.
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28. The respondent Nos.5 (M/s.Wipro Limited), 6
(M/s.Infosys Technologies Limited), 7 (M/s.Lanco Infratech
Limited) and 8 (M/s.Honey Well Technology Solutions Lab
Limited) are operational and have invested a sum ranging from
Rs.50 crores to Rs.100 crores and have provided employment
to around 3000 to the unemployed youth.
29. The respondent Nos.9 (M/s.Neuland Laboratories
Limited), 10 (M/s.Meghasoft Limited), 11 (M/s.Metro Cash and
Carry India) and 12 (M/s.Indian Hotels and Health Resorts
(IHHR) Hospitality Private Limited) are operational and have
invested a sum of around Rs.30 crores and have provided
employment to around 6000 to the unemployed youth.
30. The respondent Nos.21 (M/s.HCL Info Systems Limited),
22 (M/s.Gitanjali Gems Limited), 23 (M/s.Infotech Enterprises
Limited), 24 (M/s.I Space Software Tech Limited) and 25
(M/s.Computer Associates India Private Limited) are
operational and have invested a sum ranging from Rs.20
crores to around Rs.270 crores and have provided employment
to around 6000 to the unemployed youth.
::69::
31. The respondent Nos.26 (M/s.Canbay Software (India)
Private Limited), 27 (M/s.Virtusa (India) Private Limited), 28
(M/s.Sierra Atlantic Software Services Limited), 29 (M/s.Portal
Player (India) Private Limited) and 30 (M/s.Dakshin
Infrastructure Projects (Private) Limited) are operational and
have invested a sum ranging from Rs.34 crores to around
Rs.284 crores and have provided employment to around 7500
to the unemployed youth.
32. The respondent Nos.31 (M/s.Mack Solutions Inc), 32
(M/s.Bhuviteja Enterprises (India) Private Limited), 33
(M/s.Varun Motors (Private) Limited), 34 (M/s.Franklin
Templeton International Services Limited) and 35 (M/s.RU
Service Center (India) Private Limited) are operational and
have invested a sum ranging from Rs.80 crores to around
Rs.200 crores and have provided employment to around 6500
to the unemployed youth.
33. The respondent Nos.36 (M/s.ICICI Bank,
37 (M/s.West End Capital Management BPO), 38 (M/s.Karvy
Stock Broking Limited), 39 (M/s.Shriram Financial Services
Holdings Limited), 40 (M/s.Bhagyanagar Securities Private
::70::
Limited), 41 (M/s.A.R.Fine Solutions), 42 (M/s.Alif Resources
& Infrastructure Private Limited), 49 (M/s.SoftPro Systems
Limited) and 56 (M/s.Satyam Computer Services Limited) are
operational and have invested huge sum and have provided
employment opportunities to a number of unemployed youth.
34. Now, we may advert to the relief, which the petitioners
may be entitled. In pursuance of the policy of the State
Government to promote the Information Technology industry
in Hyderabad and to provide source of employment to the
residents of the State as well as to generate revenue, the
allotment of lands have been made to various industries
between the period from 05.02.1997 to till 13.07.2006. The
writ petition by way of public interest litigation was filed on
07.08.2007 after a period of one year from the last allotment
made. Admittedly, during the pendency of the writ petition,
private respondents have set up the industries and have
provided employment to thousands of persons. The industries
have acted upon the representation made by the State
Government for allotment of the land at concessional rate.
Acting on such representation, the industries have made huge
::71::
investments and had set up the industries. Therefore, at this
point of time, if a direction is issued to collect the market rate
from the allottees, the same would be in contravention of the
policy framed by the State Government. Therefore, we are not
inclined to grant the aforesaid relief to the petitioners.
35. So far as the issue with regard to the validity of the
Regulations 4 to 6 is concerned, suffice it to say that the same
are in consonance with the policy of the State Government for
allotment of land. The existence of power and exercise thereof
are two different aspects. Therefore, they do not suffer from
any infirmity. Needless to state that while disposing of the
public property, the official respondents are under obligation
to bear in mind well settled principles as well as the mandate
contained in Article 14 of the Constitution of India.
36. We find sufficient force in the submission made on
behalf of the writ petitioners that the State Government
should cancel the allotment made in favour of the industries
who have not commenced the construction and have not
taken any steps to set up the industries. Therefore, the State
Government shall take steps to cancel the allotment of land
::72::
made to the industries which have not taken any steps to set
up the industries, including the allotment made in favour of
respondent Nos.16 (M/s.Indu Techzone Private Limited), 17
(M/s.Brahmani Infratech Private Limited), 18 (M/s.Stargaze
Properties Private Limited), 19 (M/s.Anantha Technologies
Limited) and 20 (M/s.JT Holdings Private Limited) within a
period of four months from today.
37. With the aforesaid directions, the writ petition is
disposed of. No order as to costs.
Miscellaneous petitions, pending if any, shall stand
closed.
_______________________________
ALOK ARADHE, CJ
_______________________________
J. SREENIVAS RAO, J
Date: 04.10.2024
L.R. Copy to be marked.
(b/o)
mar
