Limited judicial review of state policy supports additional compensation where public interest and relevant material justify the decision.

A State policy requiring additional compensation from allottees was upheld as a lawful response to stalled development, farmer agitation and the need to resolve uncertainty affecting the project. The Court stated that judicial review of policy is limited: interference is warranted only if the decision is unconstitutional, contrary to statute, mala fide or manifestly arbitrary. Where the policy is supported by relevant material, consultations and public interest, courts do not substitute their own view for economic or administrative judgment. Private contractual arrangements and prior lease-related positions could not prevail over a later public-interest policy.

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Issues: Whether the State Government's policy decision to levy additional compensation on allottees and the YEIDA Board resolution implementing it were liable to be struck down as arbitrary, unreasonable or contrary to law, and whether the High Court was justified in treating the earlier decision in Gajraj as inapplicable.

Analysis: The policy was framed after farmers' agitation stalled development, reports from the administration, deliberations by a High-Level Committee, and consultations with farmers, allottees and YEIDA. The decision to adopt a 64.7% additional compensation model was linked to the legal position emerging from the earlier land acquisition litigation, and was conditioned on withdrawal of pending challenges so as to resolve the uncertainty affecting the project. The Court reiterated that a policy decision is open to judicial review only on limited grounds such as unconstitutionality, statutory breach, mala fides or manifest arbitrariness, and that courts do not sit in appeal over economic or administrative policy when it is based on relevant considerations and public interest. The plea based on concluded lease arrangements and private rights could not override a later policy justified by larger public interest, and the allottees' prior conduct in seeking resolution of the stalemate also weighed against them.

Conclusion: The policy decision and the Board resolution were valid, the High Court's contrary view was unsustainable, and the challenge to the additional demand failed.

Ratio Decidendi: A policy decision of the State, taken on relevant material and in larger public interest, will not be interfered with in judicial review unless it is unconstitutional, statutory, mala fide, or manifestly arbitrary, and such public-interest policy may override private contractual arrangements.

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