Read Judgment: RITU MAHESHWARI v. M/S. PROMOTIONAL CLUB 

Tulip Kanth

New Delhi, May 06, 2022: Noticing that the respondent-Club only had the right to be considered for allotment of the plots in Noida’s old scheme, the Supreme Court has referred to its judgment in Usman Gani Khatri of Bombay v. Cantonment Board and opined that if policies change, then applicants for their benefits have no inherent right to be considered under the old policy. The consideration has to be under the new regime, unless the latter contains an express stipulation to the contrary.

The Larger Bench of Justice Uday Umesh Lalit, Justice S.Ravindra Bhat and Justice Pamidighantam Sri Narasimha was considering two appeals arising out of judgments of the Allahabad High Court. The first appeal impugned an order dismissing the review petition filed against the first impugned judgment dated April 13, 2021 and the second appeal was directed against three orders issued in contempt proceedings initiated by the respondent, against the appellant.

In this case, the appellant (Noida), published a scheme in 2010 (old scheme) for allotment of industrial plots larger than 2000 sq. meters, in Phases II and III of the industrial area in Noida. It was the common case of the parties that the club applied to the Noida Authority for two plots. Apparently, Noida decided to terminate the scheme and sought to refund the amount deposited by the club to it.

The club was aggrieved and approached the Allahabad High Court by filing the writ petition contending that according to its information, Noida received 95 applications of which 65 were rejected and 15 allotments were made. The club urged that it fulfilled all requirements of the scheme and paid processing fee, registration amount, and lodged documents required to be furnished. Therefore, it claimed that its application deserved to be considered.

Resisting the petition, Noida argued that once the scheme was discontinued, the club had no basis to claim allotment. It was also urged that the club was aware of the fact that the scheme could be discontinued at any time, a power which Noida had resorted to, validly. Therefore, it was urged that even if some plots were available, the writ petitioner could not lay claim for allotment of any of them.

During the pendency of writ petition before the High Court, Noida launched another scheme (2013 Scheme) in which the club applied which matured into an allotment of a plot of 4000 sq. mtr. This subsequent allotment of a plot under the later scheme was however, not disclosed to the High Court, before which the complaint of arbitrary non-allotment under the old scheme was pending.

The High Court by its first impugned judgment dated July 31, 2019 directed Noida to consider the petitioners’ two applications under the scheme.The High Court by its second impugned order rejected the Review Petition of Noida and so, the original impugned order and the rejection of the Review Petition were the subject matter of a common appeal arising from one Special Leave Petition.

Later, the club complained of non-compliance with the original judgment and initiated contempt proceedings. In the contempt proceedings, notice was issued and the High Court recorded that the club’s application was deemed eligible and was taken on record.The court also expressed its dissatisfaction and stated that third party rights were being sought to be created to complicate the issue to suit Noida’s purposes. These orders were the subject matter of the civil appeal arising out of another common Special Leave Petition by the Chief Executive Officer of Noida on its behalf.

According to the Bench,once the club accepted the closure of the scheme and did not challenge it, there was no question of its agitating any right or grievance regarding non-consideration of its application. The club did not deny that there were other registrants, similarly circumstanced, who did not secure any allotment. They presumably were treated in the same manner as the club was. In the circumstance, the club could not without establishing any discrimination, merely on the strength of closure of the scheme, allege arbitrariness, added the Top Court.

The Bench affirmed, “It is well established that when a policy decision like the closure or termination of a benefit available to a class of persons, is not challenged, the consequence of such closure (which is the impact on the pendency of those wishing to be considered) cannot ordinarily be subject matter of a grievance. What the club had was a right to be considered for allotment of the plots it applied for, so long as the old scheme subsisted.”

An applicant or registrant of a scheme has no right to insist that they should be provided allotment under a scheme. Much depends on the terms of the scheme, the Bench remarked.

It was clarified that in the absence of any ambiguity-in the law, and the scheme, the writ petitioner club, could not have insisted that after the closure of the old scheme (which went unchallenged by it), nevertheless, it had a right to allotment. It was opined that in holding otherwise and proceeding to direct Noida to consider the club’s applications, the impugned judgment erred in law.

The High Court had directed that the club’s applications should be considered in accordance with law. Noida proceeded to comply with that direction, and reinstate those applications and, furthermore, consider them in accordance with the existing scheme. The High Court, in contempt proceedings, had taken exception to this course of action and this according to the Bench was an entirely unnecessary and unwarranted manner. 

Reaffirming that once the legality of closure of the old scheme was undisputed, there was no manner of right inhering with the club, to insist that its claim for any plot had to be considered, the Apex Court opined that if it ought to have applied under subsequent schemes, and waited like other applicants, then Noida’s interpretation of the High Court’s judgment (to consider) in this context, was quite correct. Neither did Noida, in its announcement while closing the old scheme nor in any condition of the 2013 or later scheme, stipulated that old scheme applicants would be dealt with according to the terms of that (i.e. 2010) scheme which meant that Noida had to consider the club’s applications, in accordance with terms of the prevailing scheme. It did so, and incurred quite unjustifiably-the wrath of the High Court in contempt proceedings, added the Bench.

Asserting that the club could not have claimed that its application had to be dealt with in terms of the old scheme, which had ended in 2012, the Bench made it clear that the direction of the High Court, could only have meant that the applications had to be revived, and dealt with the scheme prevailing as on the date of its consideration, i.e. after July 31,2019. The interpretation placed by the High Court, that there were existing plots, which could have been dealt with under the old scheme was entirely misplaced. In such events, given that the legality of closure of the old scheme attained finality, there was no question of any land or plot being attached or belonging as it were to an old scheme. If any land or plot, or industrial unit were in fact left-over it was always up to the development authority or agency ( Noida) to determine how they were to be dealt with. The  Bench, thus, held that the directions issued in contempt proceeding were erroneous.

Referring to the factual scenario, the Apex Court noted that the club was allotted a plot in 2014 for which it paid substantial amounts. It was noticed by the Bench that while it is true that this fact could not have been disclosed to the High Court, when filing the writ petition (in 2013) but the club had an obligation to disclose it, during the pendency of writ proceedings. This fact was material, given that the jurisdiction invoked is equitable and discretionary. 

Furthermore, whether the grievance was justified and well founded, given that state agencies develop and allot such industrial units at prices which are reasonable, and that an applicant subsequently succeeded in securing a plot, are relevant facts, which a court should be apprised of, opined the Bench.

Taking these aspects into consideration, the Apex Court allowed Noida’s appeals and set aside the impugned judgment and orders of the High Court.

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