2008 (10) TMI 659 - SC - Indian Laws

Appeal Dismissed: No Binding Order for Petrol Pump Resitement; New Policy Upheld as Fair and Reasonable.

Sethi Auto Service Station and Anr. Versus Delhi Development Authority and Ors.

The SC dismissed the appeal, determining that the Technical Committee's recommendation for resitement of the appellants' petrol pumps was not a binding ... Prayer for Re-allotment/re-sitement of the two petrol pumps - due to construction of the grid separator - not have any access for refueling - economically unviable - legitimate expectation - recommendation of the Technical Committee binding on the DDA? - Whether rejection of appellants claim for resitement on the basis of the revised policy of the year 2003, their substantive legitimate expectation of being considered under the old policy of 1999 has been defeated? - The stand of the DDA before the High Court was that its policy and guidelines of 1999 for re-sitement of petrol outlets and gas godowns had been revised in June, 2003, superceding all its earlier policies on the subject. As per the new policy, re-sitement was permissible only when the land of an existing outlet was utilized for a planned proposal/scheme directly necessitating its closure - DDA rejected appellants' prayer - High Court having dismissed both the appeals. HELD THAT:- We find it difficult to hold that the recommendation of the Technical Committee of the DDA fructified into an order conferring legal right upon the appellants. From the notings of the Commissioner and the order of the Vice Chairman, it is manifest that although there were several notings which recommended consideration of the appellants' case for relocation but finally no official communication was addressed to or received by the appellants accepting their claim. Thus, It is clear that though the proposals had the recommendations of State Level Co-ordinator (oil industry) and the Technical Committee but these did not ultimately fructify into an order or decision of the DDA, conferring any legal rights upon the appellants. This Court in Punjab Communications Ltd. vs. Union of India and Ors.[1999 (5) TMI 605 - SUPREME COURT], referring to a large number of authorities on the question, observed that a change in policy can defeat a substantive legitimate expectation if it can be justified on 'Wednesbury' reasonableness. The decision maker has the choice in the balancing of the pros and cons relevant to the change in policy. Therefore, the choice of the policy is for the decision maker and not for the Court. The legitimate substantive expectation merely permits the Court to find out if the change in policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. Bannari Amman Sugars Ltd. vs. Commercial Tax Officer and Ors.[2004 (11) TMI 320 - SUPREME COURT]. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. It is manifest that even under the 1999 policy, on which the entire edifice of appellants substantive expectation of getting alternative land for resitement is built does not cast any obligation upon the DDA to relocate the petrol pumps. The said policy merely laid down a criterion for relocation and not a mandate that under the given circumstances the DDA was obliged to provide land for the said purpose. Therefore, at best the appellants had an expectation of being considered for resitement. Their cases were duly considered, favourable recommendations were also made but by the time the final decision-making authority considered the matter, the policy underwent a change and the cases of the appellants did not meet the new criteria for allotment laid down in the new policy. We are convinced that apart from the fact that there is no challenge to the new policy, which seems to have been conceived in public interest in the light of the changed economic scenario and liberalized regime of permitting private companies to set up petrol outlets, the decision of the DDA in declining to allot land for resitement of petrol pumps, a matter of largesse, cannot be held to be arbitrary or unreasonable warranting interference. Moreover, with the change in policy, any direction in favour of the appellants in this regard would militate against the new policy of 2003. In our opinion, therefore, the principle of legitimate expectation has no application to the facts at hand. Therefore, the appeal is devoid of any merit and deserves to be dismissed. It is dismissed accordingly. Issues Involved:1. Whether the recommendation of the Technical Committee for re-sitement of appellants' petrol pumps constitutes an order/decision binding on the DDARs.2. Whether the appellants had a legitimate expectation of being resited under the DDA's 1999 policy, and the impact of the change in policy in 2003 on this expectationRs.Issue-wise Detailed Analysis:1. Binding Nature of Technical Committee's Recommendation:The Supreme Court examined whether the recommendation of the Technical Committee for re-sitement of the appellants' petrol pumps constituted a binding order on the DDA. The Court emphasized that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is merely an expression of his viewpoint and is not an executable order affecting the rights of the parties until it reaches the final decision-making authority, gets approval, and is communicated to the concerned party. The Court referenced the Constitution Bench decision in *Bachhittar Singh vs. The State of Punjab*, which held that an order by a Minister does not amount to an order by the State Government unless it is communicated to the party concerned. The Court concluded that the recommendation of the Technical Committee did not fructify into an order conferring legal rights upon the appellants, as it was never communicated as a final decision by the competent authority.2. Legitimate Expectation and Policy Change:The Court then addressed whether the appellants had a legitimate expectation of being resited under the 1999 policy and the effect of the 2003 policy change. The doctrine of legitimate expectation requires that an administrative body, through representation or past practice, creates an expectation in the mind of a person which it would be within its powers to fulfill unless some overriding public interest comes in the way. The Court noted that the 1999 policy allowed for resitement due to reduced sales on account of planned projects, provided the proposal was referred by an oil company or the Ministry. However, before a final decision on the appellants' representation could be taken, the DDA revised its policy in 2003. The new policy stipulated that resitement would only be made when the existing petrol pump site was utilized for a planned project directly necessitating its closure, and did not contemplate resitement on account of reduced sales.The Court found that the appellants' cases were considered and favorable recommendations were made, but no final decision was communicated before the policy change. The new policy, which was not challenged, was deemed to have been conceived in public interest. The Court held that the principle of legitimate expectation did not apply as the 1999 policy did not cast an obligation on the DDA to relocate the petrol pumps, and the appellants' expectation was merely to be considered for resitement. The decision of the DDA to apply the new policy and decline resitement was found to be neither arbitrary nor unreasonable.Conclusion:The Supreme Court dismissed the appeal, holding that the recommendation of the Technical Committee did not constitute a binding order, and the appellants did not have a substantive legitimate expectation under the 1999 policy that could override the new policy of 2003. The decision of the DDA was upheld as being fair and in accordance with the revised policy.