Statutory allotment rights arise only on formal intimation, while revised site-allotment policy and pricing changes were upheld as valid.

Under the Chandigarh statutory allotment scheme, an applicant acquired no enforceable right merely because lots were drawn in his favour; allotment arose only on the prescribed statutory intimation by the Estate Officer. Rule 8(3) was construed as directory, giving applicants a right to consideration of their applications rather than a mandatory right to allotment on payment of earnest money. Promissory estoppel could not prevent the administration from revising the allotment policy or changing the premium and site size, because no clear statutory promise was shown and estoppel cannot compel action beyond the governing rules. The revised policy for smaller sites in Phase I was upheld as bona fide and non-discriminatory under Article 14.

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Issues: (i) Whether an applicant for allotment of a site acquires an enforceable right to the site merely because lots were drawn in his favour without the statutory intimation of allotment; (ii) Whether Rule 8(3) of the Chandigarh Lease Hold of Sites and Building Rules, 1973 is mandatory so as to compel allotment upon payment of earnest money; (iii) Whether the Chandigarh administration was estopped from revising the allotment policy and changing the premium and site size; and (iv) Whether the revised policy of allotment of smaller sites in Phase I was arbitrary or discriminatory under Article 14 of the Constitution of India.

Issue (i): Whether an applicant for allotment of a site acquires an enforceable right to the site merely because lots were drawn in his favour without the statutory intimation of allotment.

Analysis: The governing scheme under Section 3 of the Capital of Punjab (Development and Regulation) Act, 1952 and Rule 8 of the Chandigarh Lease Hold of Sites and Building Rules, 1973 contemplated allotment only through the prescribed statutory process. Under Rule 8(3), the Estate Officer was required to intimate the allotment by registered post, specifying the particulars of the site and the premium payable. Mere selection in a draw of lots, without such statutory communication, did not amount to an allotment or create a vested right to possession.

Conclusion: No enforceable right arose in favour of the applicants merely because their names were drawn in the lots.

Issue (ii): Whether Rule 8(3) of the Chandigarh Lease Hold of Sites and Building Rules, 1973 is mandatory so as to compel allotment upon payment of earnest money.

Analysis: The word "shall" in Rule 8(3) was read in context and not in isolation. The rule had to be construed in a workable manner consistent with the statutory scheme, which contemplated consideration of all applications and a reasonable method of selection where applications exceeded available sites. A mandatory construction would make the allotment process impracticable and defeat the object of regulated disposal of sites. The rule therefore conferred only a right to have the application considered.

Conclusion: Rule 8(3) was held to be directory and not mandatory; the applicants had only a right to consideration of their applications.

Issue (iii): Whether the Chandigarh administration was estopped from revising the allotment policy and changing the premium and site size.

Analysis: Promissory estoppel could not be invoked to compel a public authority to act contrary to statutory rules or beyond its powers. The record did not establish any clear statutory assurance to allot the original larger sites, and the pre-allotment demand for a higher deposit did not create a legally enforceable promise. Since the administration could not lawfully bind itself to an allotment inconsistent with the governing rules, no estoppel arose against the revised policy.

Conclusion: The plea of promissory estoppel failed.

Issue (iv): Whether the revised policy of allotment of smaller sites in Phase I was arbitrary or discriminatory under Article 14 of the Constitution of India.

Analysis: The classification of the applicants as a separate group for consideration under the revised layout was supported by the shortage of sites in Phase II and the formation of a new layout in Phase I. The action was found to be bona fide and to bear a rational relation to the object of accommodating applicants through the available sites. Applying the settled principles of reasonable classification and non-arbitrariness, the policy did not amount to hostile discrimination.

Conclusion: The revised allotment policy was not violative of Article 14.

Final Conclusion: The applicants were not entitled to insist on allotment of the originally drawn larger plots, the revised policy was valid, and the premium at the lower rate was rightly maintained; both appeals were accordingly rejected on merits.

Ratio Decidendi: Under the statutory allotment scheme, a right to obtain a site arises only on formal statutory intimation of allotment, a permissive allotment provision may be read as directory where a mandatory reading would defeat the scheme, and no promissory estoppel can operate against a public authority acting within the limits of the governing rules.

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