Discretionary land allotment requires clear guidelines; otherwise public auction remains the normal mode of disposal.

A public authority empowered to dispose of land by sale, lease or transfer through auction, allotment or other modes may use discretionary allotment only where clear, pre-determined and published guidelines exist and the discretion remains consistent with public purpose; absent such standards, public auction is the normal course. The Supreme Court also accepted the High Court's concern over the bona fides of the allotments and substantially upheld its approach, while moulding relief to protect limited equities arising from constructions already raised and directing the authority to frame a proper scheme for future discretionary disposals.

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Issues: (i) Whether disposal of school sites by the development authority could be made only by public auction or could also be made by allotment or other modes under the governing statute and regulations; (ii) whether the allotments already made and the directions issued by the High Court required interference in view of the alleged absence of valid guidelines and the equities arising from constructions raised during the pendency of the proceedings.

Issue (i): Whether disposal of school sites by the development authority could be made only by public auction or could also be made by allotment or other modes under the governing statute and regulations.

Analysis: The statutory scheme permitted disposal of land by sale, lease or other transfer by auction, allotment or otherwise, subject to regulations and public purpose. The regulations also recognised allotment and auction as alternative modes and contemplated reservation for specified categories. However, the exercise of discretionary power had to be controlled by clear, pre-determined and published guidelines, and in the absence of such regulatory standards the normal and salutary method would be public auction.

Conclusion: Public auction was not the only lawful mode, but discretionary allotment without adequate statutory regulations or guidelines was impermissible.

Issue (ii): Whether the allotments already made and the directions issued by the High Court required interference in view of the alleged absence of valid guidelines and the equities arising from constructions raised during the pendency of the proceedings.

Analysis: The High Court's doubt as to the bona fides of the allotments was not displaced. The appellate court accepted the broad approach of the High Court, but moulded relief by directing valuation at the relevant date, offering certain allottees an option to pay market price, requiring approval of the High Court, and directing the authority to frame an appropriate scheme for future discretionary allotments. These directions balanced legality with equities arising from developments already made on the sites.

Conclusion: The High Court's order was substantially upheld with modifying directions in favour of limited equitable relief.

Final Conclusion: The challenge to the High Court's main approach failed, but the relief was tailored by additional directions protecting limited equities and regulating future disposals through a proper scheme.

Ratio Decidendi: Where a public authority is empowered to dispose of land by auction, allotment or otherwise, discretionary allotment is valid only if supported by clear, pre-determined and published guidelines consistent with public purpose; otherwise auction is the normal course.

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