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The Vice Chairman did not make any enquiry into those facts including construction of three buildings in the city itself and as such it became still more necessary on him to give atleast a personal hearing to the petitioner. Ratio |
As hearing has not been given to the petition er although there was enough time for the same, the order passed by the ViceChairman violates the principles of natural justice and cannot be sustained. Ratio |
On the contention (b), the High Court held that the ViceChairman had no power to review the earlier order. Ratio |
The High Court was of the view and this is exactly the opposite of Sri Sorabjee 's contention before us that the Vice Chair man could derive power to 194 review only if he had been empowered by Government by a direction under section 41(1) of the Act. Ratio |
The High Court said: "It has not been pleaded by opposite parties that on 9.1.1986 when the new Vice Chairman took over charge or on any date thereafter the state Government issued any direction to him to issue any show cause notice to the petitioners. Ratio |
There is no other provision in the Development Act conferring powers on the Vice Chairman to review the decision in the matter of sanctioning a plan to build. Ratio |
In the absence of any provision in the Act or any direction issued by the State Government, the ViceChairman had no jurisdic tion or authority to reconsider the decision granting sanction to a plan i.e. permit to build after the same was acted upon and con structions were being made only in accordance with it. Ratio |
" As to ground (d), the High Court examined the merits of each of the grounds and, in substance, came to the conclusion that the grounds were either irrelevant or, otherwise, insufficient in law to support the purported cancellation. Ratio |
The High Court held: "The above discussion shows that even though fraud, misrepresentation and concealment of facts etc. Ratio |
on the part of the petitioners having not been made out, yet such conclusions have been arrived at. Ratio |
The matter essentially hinged on the meaning and interpretation of the word 'Building ' and instead of doing it in the right and correct perspectives, suspicion 'and presumptions have been made in arriving at the conclusions so arrived at. Ratio |
Shri Thakur assailed the conclusions reached by the High Court on all the three questions. Ratio |
Learned counsel urged that the order dated 19.4.1986 itself discloses the extent of the opportunities afforded to the Lessees and there could, therefore, be no question of failure of natural justice in this case. ARG |
As to the Vice Chairman 's power to cancel or to revoke a permission earlier granted, Sri Thakur submitted that if the permission had been obtained by the lessees by misrepresentation or fraud or, if after obtaining the permission there had been violation of the terms and conditions of the grant, the statutory authorit... |
Shri Thakur submitted that the 195 grounds in this case related not only to fraud and misrepre sentation practised at the time of securing the permission but also violation of the terms and conditions of the grant itself. ARG |
He further submitted that there was material on record to show that the officers and the authorities of the LDA concerned with the grant of the permission under section 15 had betrayed the trust reposed in them by the statute and were disloyal to the Development Authority and on that ground also the successor Vice Chai... |
Shri Thakur relied upon Sec.21 of General Clauses Act for the exercise of the power to revoke. ARG |
Shri Sorabjee for the Lessees, however, maintained that the Vice Chairman, having regard to the nature of the allegations on which the revocation is purported and which fell in the last category mentioned by Sri Thakur, had no authority in law to cancel the permission. ARG |
He submitted that the view of the High Court as to the irrelevance and insuf ficiency in law of the grounds on which the purported can cellation was based were effect as they were well known administrative law tests of administrative or statutory discretion, and that appeal to Section 21 of the General Clauses Act to s... |
Sri Sorabjee submitted that the ' power to cancel or revoke a licence or permission, even assuming that the Statute enabled such cancellation, was clearly distinguisha ble from a power of refusal of an initial grant and that the exercise of the power of cancellation which prejudically affects vested rights partake pred... |
Sri Sorabjee said that the ViceChairman, even granting that he had power to cancel, acted at the behest of the Government which purported to Act under Section 41(1) issued directives on 12.8.1985 and on 15.10.1985 overriding the discretion of the Vice Chairman. ARG |
To appreciate these contentions in their proper perspective it is necessary to notice the scheme of the Act in relation to the Regulation of Development in the "Devel opment Area" under the Act. Ratio |
The preamble of the Act says: "In the developing areas of the State of Uttar Pradesh the problems of town planning and urban development need to be tackled resolutely. Ratio |
The existing local bodies and other au thorities in spite of their best efforts have not been able 196 to cope with these problems to the desired extent. Ratio |
In order to bring about improvement in this situation, the State Government consid ered it advisable that in such developing areas, Development Authorities patterned on the Delhi Development Authority be estab lished. Ratio |
As the State Government was of the view that the urban development and planning work in the State had already been delayed it was felt necessary to provide for early estab lishment of such Authorities. Ratio |
" Sec. 2(b), (e) and (f) defines "building" "Development" and "Development Area": "2(b) 'building ' includes any struc ture or erection or part of a structure or erection which is intended to be used for residential, industrial, commercial or other purposes whether in actual use or not." "2(e) 'development ', with its ... |
" Section 3 provides: "Declaration of development areas: If in the opinion of the State Government any area within the State requires to be developed according to plan it may, by notification in the Gazette, declare the area to be a develop ment area." Section 14(1) provides: Development of land in the developed area. ... |
After the declaration of any area as development area under Section 3, no develop ment of land shall be undertaken or carried out or continued in that area by any person or body (including a department of Government) unless permission for such development has been obtained in writing from the (Vice Chair man) in accord... |
Section 15(1) provides: "Application for permission Every person or body (other than any department of Government or any local authority) desiring to obtain the permission referred to in Section 14 shah make an application in writing to the (ViceChairman) in such form and containing such particulars in respect of the d... |
Section 15(3) provides that on receipt of an application for permission for development, the Vice Chairman, after making such enquiry as he considers necessary in relation to matters specified in Sec.9(2)(d) or any other matter by order in writing either grant the permission subject to such conditions as he may specify... |
The Vice Chairman, for purposes of Section 15(3) is a distinct statutory authority with statutory powers of his own dis tinct from the "Development Authority" which under section 4(2) is a body corporate having perpetual succession and common seal. Ratio |
Section 15(5) contemplates and enables an appeal to the Chairman against an order made by the Vice Chairman refusing permission. Ratio |
Section 37, inter alia, makes an order of the Vice Chairman made under Sec.15 final. Ratio |
Section 41(3) enables the State Government either on its own motion or on an application made to it in this behalf to call for the records of any case disposed of or order passed by the Authority or the Chairman for purposes of satisfying itself as to its legality or propriety and may pass such orders or issue such dir... |
It is relevant to note that an order made by an Vice Chairman under Sec.15(3) of the Act grant ing permission is not one of the orders revisable by Govern ment under section 41(3). Ratio |
Such an order, under the scheme of the Act, is not also appealable but assumes a finality contemplated by Sec.of the Act provides: "Control by State Government The (Authority, the Chairman or the Vice Chairman) shah carry out such directions as may be issued to it from time to time by the State 198 Government for the e... |
Section 41(1) is not a Super Henry VIII clause for the supply or source of additional provisions and powers not already obtaining under the 'Act '. Ratio |
Sri Sorabjee for the Lessees says that the proceedings for cancellation were initiated at the instance of and compelled by the directives issued by Government under Section 41(1) and that therefore there was a surrender of discretion by the statutory Authority viz., the ViceChair man. Ratio |
Here is a piquant situation. Ratio |
The High Court says that section 41(1) could authorise the Vice Chairman to review the earlier permission but that there being no such direc tive, the Vice Chairman had no power to review. Ratio |
The High Court was in effect, held that the earlier directive dated 15.10.1985 under Sec.41(1) was limited to the cancellation of the lease and for suspension of the building work in the interrugnam as incidental thereto and that the show cause notice dated 9.1.1986 for cancellation of the permission was not pursuant t... |
Thus, the legal position which the High Court assumes as to the scope of Sec.41(1) is precisely what Shri Sorabjee contends against. Ratio |
It appears to us that view of the High Court that in the absence of a directive or authorisation from the Govern ment under Section 41(1), the Vice Chairman, acting as the statutory authority dispensing permissions for development under the Act, cannot revoke or cancel a permission once granted is clearly erroneous. Ra... |
In this case the grant of permission is part of or incidental to the statutory power to regulate orderly development of the "Development Area" under the Act under Regulatory Laws. Ratio |
The power to regulate with the obligations and functions that go with and are incidental to it, are not spent or exhausted with the grant of permission. Ratio |
The power of regulation which stretches beyond the mere grant of permission, takes within its sweep the power, in appropriate cases, to revoke or cancel the permission as incidental or supplemental to the power to grant. Ratio |
Otherwise the planitude of the power to regulate would be whittled down or even frustrated. Ratio |
It is erroneous to equate the powers under sections 14 and 15 of 199 the Act with Judicial power which, in the absence of express provisions, could not enable the review of a judicial order after its exercise on the principle of Functus Officio. Ratio |
In Sardul Singh vs The District Food and Supplies Controller, Patiala and Ors., in writ petition 126/ a statutory order, promulgated under sec 3 of the , contained a provision enabling the cancellation of a 'permit ' under certain circumstances. PRE |
The contention was that section 3 of the parent 'Act ' itself did not delegate to the subordinate legislative authority to make such a provision for cancellation and, therefore, the provision for cancellation in the subordinate legislature was ultra vires. PRE |
There was no provision in the Act expressly conferring the power to make a provision for cancellation of the permit. PRE |
Section 3(2)(d) of the parent Act merely enabled the government to make orders "for Regulating by licences, permits or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity" and Section 3(2)(j) merely enabled Government to make orders for incidental and su... |
The question arose whether provisions for cancellation of the permits envisaged in para 10 of the particular statutory order could be said to be relatable to or justified as a matter incidental or supplementary to Regulation. PRE |
This Court held that the power to cancel was an "incidental and supplementary" matter. PRE |
It was held: "If a trade in an essential commodi ty like coal is to be regulated by licenses or permits, it is obvious that the power to grant licenses or permits must include the power to cancel or suspend such licenses or permits as an "incidental or supplementary matter"; otherwise, the very purpose of section 3 of ... |
Indeed, the submissions of Sri Thakur on the point contemplate the exercise of the power to cancel or revoke the permission in three distinct situations. Ratio |
The first is where the grant is itself vitiated by fraud or misrepresen tation on the part of the grantee at the time of obtaining the grant. Ratio |
To the second situation belong the class of cases where the grantee, after the grant violates the essential terms and conditions subject to which the grant is made. Ratio |
In these two areas, the power to grant must be held to include the power to revoke or cancel the permit, even in the ab sence of any other express statutory provisions in that behalf. Ratio |
There must, of course be the compliance with the requirements of natural justice and the grounds must be such as would justify such drastic action. Ratio |
This cancellation is a preventive step. Ratio |
The 200 one aspect of the remedial measures is set out in Section 27 of the Act. Ratio |
There may be cases of third kind where the grant may be voidable at the instance of the Development Authority or otherwise entitling the Development Authority to initiate appropriate declaratory or other action to get rid of the effect of the permission. Ratio |
It is true that in exercise of powers of revoking or cancelling the permission is akin to and partakes of a quasi judicial complexion and that in exercising of the former power the authority must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and decide the matter cons... |
The authority cannot permit its decision to be influenced by the dictation of others as this would amount to abdication and surrender of its discre tion. Ratio |
It would then not be the Authority 's discretion that is exercised, but someone else 'section If an authority "hands over its discretion to another body it acts ultra vires". Ratio |
Such an interference by a person or body extraneous to the power would plainly be contrary to the nature of the power conferred upon the authority. Ratio |
De Smith sums up the position thus: "The relevant principles formulated by the courts may be broadly summarised as follows. Ratio |
The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. Ratio |
In general, a discretion must be exercised only by the authority to which it is committed. Ratio |
That authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case. Ratio |
In the purported exercise of its discretion it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. Ratio |
It must act in good faith, must have regard to all relevant considerations and must not be swayed by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. Ratio |
Nor where a judgment must be made that certain facts exist can a discretion be validly exercised on the basis of an erroneous assumption about those facts. Ratio |
These several principles can conven iently be grouped in two main categories: failure to exercise a discretion, and excess or abuse of discretionary power. Ratio |
The two classes are not, however, mutually exclusive." Ratio |
But the question is whether the issue of the show cause notice or the subsequent decision to cancel could be said to have been made at the behest or compulsion of Government. Ratio |
Shri Sorabjee refers to paragraphs 17 and 18 of Shri Kamal Pandey 's letter dated 15.10.1985. Ratio |
We are not sure that this is a correct understanding of the position. Ratio |
The High Court did not see any casual connection between the Government 's directive dated 15.10.1985 and the proceedings initiated by the Vice Chairman on 9.1.1986. Ratio |
The High Court was of the view that directive confined itself to the can cellation of the lease and as incidental thereto, required the stoppage of work pending decision whether the lease should be cancelled or not. Ratio |
This infact, was the basis for holding that the Vice Chairman had no power to cancel. Ratio |
Lessees do not rely upon any subsequent directive to the ViceChairman from the Government in the matter of revocation of the permission. Ratio |
The earlier directive dated 12.8.1985 from the Government to the Vice Chairman spent itself out with the then ViceChairman declining to act in accordance with it. Ratio |
There is no material to hold that Sri Govardhan Nair felt himself bound by that directive. Ratio |
Sri Sorabjee 's contention based on an alleged surrender of discretion cannot, therefore, be upheld. Ratio |
It has, therefore, to be held that the finding of the High Court that the Vice Chairman had no competence to initiate proceedings to revoke the permission on the ground that the permission itself had been obtained by misrepresen tation and fraud and on the ground that there were viola tions of the conditions of the gra... |
The contention of the Respondent Lessees that the show cause notice, dated 9.1.1986 and the cancellation order, dated 19.4.1986, are vitiated by a surrender of a discretion on the part of the Vice Chairman cannot also be held to be well founded. Ratio |
Sri Thakur 's contention to the contrary on both these points would require to be accepted. Ratio |
Now in the end, two more findings of the High Court remain to be considered, viz., on the Lessees ' grievance of denial of reasonable opportunity of being heard and the validity and sufficiency of the alleged grounds to sustain the cancellation. Ratio |
We may consider the latter, first: It not unoften happens that what appears to be a judicial review for breach of natural justice is, in reali ty, a review for abuse of discretion. Ratio |
It is true that amongst the many grounds ' put forward in the show cause notice dated 19.1.1986, quite a few overlap each other and 202 are distinguishable from those urged for the cancellation of the lease itself. Ratio |
Some of the grounds might, perhaps, be somewhat premature. Ratio |
Some of them even if true are so trivial that no authority could reasonably be expected to cancel the permission on that basis. Ratio |
For instance the ground that the permission was applied for and granted in the name of one only of the two lessees would be one such. Ratio |
However, Judicial review under Article 226 cannot be converted into an appeal. Ratio |
Judicial review is directed, not against the decision, but is confined to the examination of the decision making process. Ratio |
In Chief Constable of the North Wales Police vs Evans, ; refers to the merits legality distinction in judicial review. Ratio |
Lord Hail sham said: "The purpose "of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised by law to decide for itself a conclusion which is correct in the eyes of the court." Lord Brigh... |
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