R. P. SETHI, J.

(1) "substantial agreement in juristic thought that the great purpose of the rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found" observed Justice Mathew in his article The Welfare State, Rule of Law and Natural Justice.

"it is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual. Every action of the executive Government must, be informed with reasons and should be free from arbitrariness"

declared the Supreme Court in ramana v. I. A. Authority of India AIR 1979 SC 1628 [LQ/SC/1979/277] . The application of the principle and the rule of law makes no difference whether the exercise of power involves affectation of some right or denial of some privilege. The State Government being regulator and dispenser of special services and provider of a large number of benefits, is supposed to act fairly, impartially and in accordance with the provisions of law.

(2) THE Supreme Court in "the Director of Rationing and Distribution v. Corporation of Calcutta, Alr 1960 SC 1355, [LQ/SC/1960/174] held," that in our country the rule of law prevails which has been guaranteed in our Constitution by virtue of the provisions contained in other parts. It was further held that it was inherent in the conception of the rule of law that the State, no less than its citizens and others were bound by the laws of the land. The Courts in this country have to follow the ordinary principles of construction that no one is exempted from operation of a statute unless the statute expressly guaranteed the exemption or the exemption arose by necessary implication. In a country which has a written Constitution and where the pattern of Government is democratic, as we have in our country, the one outstanding feature of it is the supremacy of law in the realm, commonly known as the rule of law. The term "rule of law" in brief connotes the undisputed supremacy of law and envisages a state of things in which every one respects the law and where the law has to be followed by everyone collectively or individually. This supremacy of law is designed to give security to the rights of individuals who are the citizens of a free democratic State. The law has to be followed both by the citizens as well as by the State and when transgressed by any one, whether by the State or the individual would destroy the very fabric of the democratic system.

(3) THE Supreme Court in Mohd. Rashid Ahmed v. State of U. P. , AIR 1979 SC 592 [LQ/SC/1978/401] , relied upon its earlier judgment in A. K. Kraipak v. UOI, AIR 1970 SC 150 [LQ/SC/1969/201] , and it was held (at p. 600 of AIR) :- "in A. K. Kraipak v. UOI, AIR 1970 SC 150 [LQ/SC/1969/201] , there was a reiteration of the principles, albeit in a different form, laid down by this Court in Dr. (Miss) Binapani Dei v. State of Orissa, (1967) 2 SCR 625 [LQ/SC/1967/37] : (AIR 1967 SC 1269 [LQ/SC/1967/37] ) and by the House of Lords in Padfield v. Minister of Agriculture, Fisheries and Food, (1968) AC 997, that the executive should not arbitrarily or capriciously act and that the myth of executive discretion is no longer there. Indeed, in Kraipaks case, it was observed (at p. 154 of AIR 1970) :"the dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. . . . Under our Constitution the rule of law pervades over the anti-field of administration. Every organ of the State under our Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of the rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their function in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi-judicial power.

" This Court pertinently drew attention to the basic concept of natural justice vis-a-vis administrative and quasi-judicial enquiries and stated that any decision, whether executive, administrative or judicial or quasijudicial, is no decision if it cannot be just i. e. an impartial and objective assessment of all the pros and cons of a case, after due hearing of the parties concerned. "

(4) IN the light of the acknowledged position of law as noted hereinabove, we are called upon to determine the constitutionality and legality of the action of the respondents in the matter of allotment of school sites to the respondents in different sectors in Urban Estate, Panchkula. The learned single Judge after holding on facts

"that I have no hesitation in holding that the policy of pick and choose was adopted and those who were the favourites were allotted the sites without the claims of the applicants including the petitioners having been considered. The whole action is, therefore, illegal, arbitrary and capricious"

but while granting the relief he refrained from cancelling the allotments made in favour of the private respondents. He, however, issued appropriate directions to the Haryana Urban Development Authority (for short the HUDA) to be followed in future. The writ petitioners who had failed to get the allotment of the school sites have filed these Letters Patent Appeals Nos. 1319, 1320, 1368, 1369 of 1992 and 52 of 1993 and 213 of 1994 against the judgment of the learned single Judge with the prayer of setting aside the judgment of the learned single Judge and allotment of site/land to the appellants. It is further prayed that the allotments made in favour of private respondents be set aside. It is contended that the learned single Judge after holding that the allotment was made illegally and arbitrarily was not justified in condoning the action of the respondents by permitting the private respondents to retain the possession of the land allotted to them.

(5) ONE of the private respondents namely M/s. Tiny Tot Nursery School, Panchkula, who is respondent No. 11 in LPA No. 1368 of 1992 has also filed cross-objections along with an application under Section 5 of the Limitation Act for condoning the delay. In the cross-objections an attempt has been made to justify the action of the HUDA in making the allotment to private respondents particularly in favour of M/s. Tini Tot Nursery School. It is prayed that the judgment of the learned single Judge be set aside to the extent it has been held that the matter regarding allotment of school sites was considered by the HUDA and its Selection Committee, in a most illegal, arbitrary and capricious manner without adopting any uniform yardstick in weighing the merits and demerits of the applicants and the writ petitioners.

(6) TO appreciate the rival contentions of the parties it is necessary to take note of the facts leading to the filing of the present appeals and the cross-objections.

(7) THE HUDA vide advertisement issued in early 1988 invited applications to be submitted by 30-3-1988 for the allotment of sites of High/primary/nursery Schools in different sectors of Panchkula. The total number of sites which was identified in the annexure was 23. The individuals/institutions were directed to apply to the Estate Officer, Haryana Urban Development Authority, Panchkula on the pro forma with earnest money of Rs. 2,500/- in the shape of demand draft payable in favour of Estate Officer, Haryana Urban Development Authority. The requisite information sought included the name of the institution, constitution whether registered or trust or society, its objects, the names and particulars of the Members of the Governing Body, last audit report, financial position, details of similar institutions set up at other places, requirement of land, purpose for which the land was required, requirement of electricity/water supply, land utilisation plan and recommendation of the concerned Deputy Commissioner etc. It was further pointed out that preference shall be given in the order, namely; firstly to Haryana Education Department, secondly to Central Schools Organisations, thirdly to prominent National/regional level institutions and fourthly to existing schools, with good reputation. In response to the advertisement, the writ petitioners as also the private respondents submitted their applications in the prescribed pro forma before the stipulated date. The record of the official respondents reveals that a total number of 72 applications were received. The appellants did not succeed in getting the sites allotted in their favour and the private respondents were selected for the purposes of allotment. Being aggrieved, the appellants filed Civil Writ Petitions in the Court challenging the action of the respondents on the ground that the allotment was made to the private respondents without any guidelines or criterion prescribed. Some of the institutions/individuals were alleged to have been allotted the sites despite there not being in existence either in Panchkula or near about. The allotments were alleged to have been made to accommodate the private respondents and the petitioners were deprived of their right with mala fide intention. It was alleged that the respondents had decided to teach the appellants a lesson for their allegedly taking courage to the official respondents in the matter of notices issued to them wherein they had submitted that the allotment of sites had been made by throwing to winds all the rules and the conditions, order of preference given in the advertisement. The private respondents were not entitled to allotment on priority basis. It is submitted that the allotments had been made in violation of the Punjab Urban Estate (Sale of Sites) Rules, 1965 (for short the Rules). The majority of the private respondents were alleged to be outsiders whereas the appellants stated to be running schools at Panchkula for the last many years.

(8) IN their reply filed in the Civil Writ Petition, the official respondents have tried to justify their action. The applications of some of the appellants are stated to have not been properly recommended by the Deputy Commissioner. It was claimed that the allotment of school sites had been made on merits after consideration of relevant aspects. A Committee was constituted for the purposes of allotment of the sites. The said Committee is stated to have interviewed all the applicants and allotted school sites on merit basis. The private respondents who were allotted the school sites were considered better by the Interviewing Committee. No fundamental or legal right of the petitioners is stated to have been violated. The writ petitioners had no right for allotment of school sites as they were allegedly running schools in the residential buildings by violating the HUDA Rules and Regulations.

(9) THE private respondents filed separate replies and tried to justify the action of the respondents in allotting school sites to them. They claimed to be enjoying good reputation, having a better academic record in imparting education to the children. So far as respondent Tini Tot Nursery School is concerned, it was submitted that the institution was being run by a partnership firm of which one Ms. Charu Tuli held 40 per cent, share. She was stated to be a post-graduate in English and widow of an Assistant Commissioner of Income-tax. She is stated to have applied for starting a school to permanently settle herself therein in the school. Another partner of the firm is stated to be Ms. Sandhya Dhaka holding 40 per cent, share. She claims to be having teaching experience of preliminary classes for more than six years. She is also stated to be interested in starting the school along with her sister for improving her prospectus in the life. The third partner Shri L. R. Malik had a share to the extent of 20 per cent. He has claimed to be retired Chief Engineer and the other two partners were his daughters. He claimed that he will be looking after the day to day management of the school in an effective manner. All the three partners claimed to have appeared before the Selection Committee constituted by the HUDA on 16-6-1988 and subjected to various questions regarding their educational qualifications and experience. A site measuring 2438 sq. mts. in Sector 9, Panchkula was allotted to Tini Tot Nursery School. On allotment of the site a sum of Rs. 32,510. 40 p. was deposited within 30 days of the allotment. It may not be out of place to mention that during arguments it was conceded that Ms. Charu Tuli had joined the Government service and was presently working as Assistant Advocate-General in the office of Advocate-General, Punjab.

(10) THE respondent-Gyan Deep School have submitted that their institution was recognised school and was enjoying the reputation of being an institution at the regional level. The allotment was claimed to have been in accordance with the terms and conditions mentioned in the advertisement notice. It was stated that having established their school in the year 1969 it stood recognised by the Chandigarh Administration. The buildings were stated to have not been allotted arbitrarily and that no discrimination had been in the allotment of plots.

(11) IN their reply, respondents- Nav Bal Niketan Education Society, Vijay Model School and Manav Mangal Society submitted that the allotments made in their favour was according to law. The institutions run by them were named to be of regional level. Nav Bal Niketan Education Society was stated to have been established in the year 1969 and had a strength of 800 students and 30 teachers. Vijay Model School is stated to have been established in the year 1976 and Manav Mangal Society in the year 1968. All the institutions claimed to have earned name for their service in the field of children education. All the aforesaid institutions were recommended by the concerned Deputy Commissioner and that the allotment was made in their favour on the basis of merit.

(12) LT. Col. Y. P. Mahindru in his reply submitted that he along with other respondents had applied for allotment of site for various categories of schools at Panchkula and all the applications were considered by Selection Committee on the basis of reasonable criterion settled for the purpose of selection. The said respondent had claimed that he was not ineligible for selection as he fulfils all the requisite qualifications. It was only during the interview that a comparative merit was ascertained and on the basis of such merit the allotments were made. The Committee is stated to be consisted of :-

1. Leena Nair, IAS, Administrator, Haryana Urban Development Authority;

2 Smt. Keshmi Anand Arora, IAS, Deputy Commissioner, Ambala;

3 Sh. K. K. Sharma, District Education Officer, Ambala;

4 Sh. R. P. Singh, Senior Town Planner, Panchkula; and

5 Shri V. P. Chauhan, HCS, Estate Officer, Haryana Urban Development Authority, Panchkula. The allotment was made on the basis of the credentials of the applicants for running and managing the educational institutions of the type for which the site was applied for. The respondents claimed to be prominent educationists and having vast experience for supervising the running of Nursery Schools as he had allegedly been looking after the Nursery School at various cantonments in the country on account of his being in the service of the Army. He has claimed to be M. A. , B. Ed. and a Lecturer of English Literature from 1954 to 1960. From 1982 to 1985 he remained as Principal of the Sainik School in Bihar. He had also been a member of the Indian Public School Principals Conference, New Delhi. He retired from the Education Core of the Indian Army w. e. f. 1-12-1989 and in his capacity as a Member of the Education Core, he has been Secretary of the Army School, Chandi Mandir. He has not denied the fact that at the time of filing of the application and allotment he was in the regular service of the Indian Army. He has further stated that his wife is also a prominent educationist having vast experience of teaching in various institutions.

(13) RESPONDENT, Woodland School, had adopted the reply filed on behalf of Tini Tot School. It was, however, submitted that Woodland School was one of the best Schools at Sri Nagar (Kashmir) where he was running a Nursery and Primary School for the last 25 years. After the allotment, the institution is stated to have invested huge amounts to construct the school building after obtaining loans etc.

(14) IN their reply, the respondent Ashok Trehan Educational Trust, Sector 7, Panchkula justified the allotment in their favour and submitted that they fulfil all the conditions required for the allotment which was made in their favour after following due process. After the allotment, they got the building plan approved and raised construction.

(15) RESPONDENT, Ajay Memorial Educational Society, Panchkula, in their reply submitted that their institution was a monument of Memorial in the name of late Mr. Ajay son of Shri R. L. Anand, Secretary of the School Society who was drowned in the swimming pool in Sector 23, Chandigarh on 12-6-1980 while he was studying in Premedical and was a merit scholarship holder. The allotment was made by the Committee in accordance with the law and upon the recommendation of the Deputy Commissioner. The respondent has further submitted that they were running a school with missionary aims and objects for the uplift of down-trodden children for making available education to those who cannot afford to seek admission in other modern schools.

(16) THE respondent, New India Public School Education Society, filed a similar reply and justified the action of the official respondents in allotting the school site in their favour. It is submitted that the writ petition was misconceived and not maintainable.

(17) WE have heard the learned Counsel for the parties at length and perused the relevant record.

(18) BEFORE adjudicating the pleas raised by the appellants, it is necessary to first deal with the maintainability of the cross-objections filed by respondent M/s. Tini Tot School in some of the appeals. Admittedly, all the cross-objections have been filed along with applications under Section 5 of the Limitation Act seeking condonation of delay.

(19) THE scope of Order 41, Rule 22 of the C. P. C. is to allow the respondents in an appeal to support the decree of the lower Court by asserting that the matter decided against him should have been decided in his favour. Strictly speaking, the provisions of Order 41, Rule 22 of the C. P. C. are not applicable in proceedings arising out of the writ jurisdiction.

(20) A Division Bench of the J. and K. High Court in Union of India and others v. Maj. Lalit Kumar, L. P. A. (W) No. 81 of 1992 dealt with the point and held :

"the cross-objections filed by the respondents are not maintainable under the Letters Patent of this Court. Right to file the cross objections is a statutory right conferred upon an aggrieved party under Order 41, Rule 22, C. P. C. The cross-objections are supposed to be filed by a party against any part of the decree passed under the Code of Civil Procedure. Filing of cross-objections being the creation of a statute cannot be extended to the constitutional remedies and the powers exercised under Article 226 of the Constitution of India. No cross-objections are, therefore, maintainable in an appeal filed against any proceedings arising out of a writ petition adjudicated by the Court under Article 226 of the Constitution. We are fortified in our view by a Division Bench judgment of this Court in case of Excise and Taxation Officer v. Caltex India Ltd. , AIR 1962 Jandk 89. Reliance of the respondents on AIR 1975 Madh Pra 115 is misplaced inasmuch as cross-objections in that case were filed in proceedings arising out of a regular suit and decided under the provisions of the Code of Civil Procedure. "

This view is fortified by judgments delivered in Mt. Daroupdi Devi v. SK Dutt, AIR 1957 All 48 [LQ/AllHC/1956/27] ; Sukhanand v. Baikunth Nath, AIR 1962 All 509 [LQ/AllHC/1961/273] and U. O. I. v. Wear well Cycle Co. , AIR 1986 Delhi 5.

(21) IN view of this position of law, the reliance of the learned Counsel for the petitioners on the Chittoor Co-op. Bank Ltd. v. T. Krishnaiah Chetty, AIR 1983 Andh Pra 259 is misplaced.

(22) OTHERWISE also, the cross-objections filed are admittedly barred by time. No ground is made out for condoning the delay. We have, however, allowed the respondents to address arguments in support of the judgment of the learned single Judge.

(23) IT has been conceded before us that the allotments made in response to the advertisement issued in early 1988 were to be regulated and governed under the Haryana Urban Development Authority Act, 1977 and Haryana Development (Disposal of Land and Building) Regulations, 1978 (for short the act and the regulation respectively). The Act was enacted with the object to provide an authority for undertaking urban developments in the State and for matters ancillary thereto. In the statement of objects and reasons published in the Haryana Gazette on 23-3-1977, it was stated :

"it has been felt necessary to constitute a statutory authority in place of department of Urban Estate for ensuring speedy and economic development of urban areas in the State of Haryana. At present, the work of land acquisition and development of urban areas at various places throughout Haryana is being done by the Urban Estates Department. While the planning of the urban areas is done by the Town and Country Planning Department, the land is acquired by the Urban Estate Department and the development of the land so acquired is carried out by various departments and bodies like the Public Health Department, Bandr Department, Electricity Board etc. It has been observed that the involvement of several agencies in the development of urban estates at various places gives rise to problems of co-ordination, with the result that the growth of most of the urban estates become slow and causes unnecessary dissatisfaction among the plot-holders, in particular and the public in general. Further, as the department has to follow the financial rules and regulations of the Government, the arrangement of finances and sacntions of estimates take a long time and the development works have not kept pace with the required physical development of the estates. Being a Government Department, the Urban Estates Department is unable to raise resources from various lending institutions, although, there are various financial institutions in the country willing to finance urban land development programmes which can be made self-financing. In order to overcome all these difficulties and to achieve expeditious development of the estate, it has been felt necessary that an Urban Development Authority should be set up. "

(24) SECTION 15 of the authorises the authority under the to dispose of any land acquired by it or transferred to it by the State Government to such persons, in such manner and subject to such terms and conditions as considered expedient for securing development. The authority under the has been authorised to sell, lease or otherwise transfer whether by auction, allotment or otherwise any land or building belonging to it on such terms and conditions as it may by Regulations provide. Regulation 3 deals with the mode of disposal and provides that the authority may dispose of any land belonging to it in a developed or undeveloped form. The land or building of the authority may be disposed of by way of sale or lease or exchange or by creation of easement rights or privileges. It is reiterated that the land or building may be disposed of by an authority by way of sale or lease either by allotment or by auction which may be by open bid or by inviting tenders. Regulation 4 provides that the tentative price/premium for the disposal of land or building by the Authority shall be such as may be determined by the authority taking into consideration the cost of land, estimated cost of development, cost of buildings and other direct and indirect charges, as may be determined by the Authority from time to time. It is further provided that an extra 10% and 20% of the price/premium shall be payable for preferential and special preferential plots respectively.

(25) REGULATION 5 prescribes the procedure in case of sale or lease of land or building by allotment. The intending purchaser or allottee is required to submit an application to the Estate Officer concerned in the prescribed form annexed with the Regulations as forms a and b. Such application is required to be accompanied by an amount as may be determined by the Authority which, however, shall not be less than 10 per cent. of the price/ premium in the form of demand draft payable to the Estate Officer concerned or any other such place as the Estate Officer may specify. The allotments may be made on first come first serve basis or by draw of lots as may be determined by the Authority and the successful applicant intimated of the allotment by a letter in form c or ci to be sent by registered post. It is further provided that for the purposes of proper planning and development of Urban Estate, the land or building may be reserved for groups or individuals or for persons practising any profession or carrying on any occupation, trade or business or for such other category of persons, Government Departments and Institutions, Charitable Institutions and other Organisations of public welfare, as may be decided by the Authority from time to time.

(26) REGULATION 5 deals with the sale or lease of land or building by auction. The period of lease as contemplated under Regulation is 99 years with effect from the date of allotment or auction as the case may be.

(27) THE Scheme of the and the Regulation envisages the sale or allotment of the land either by open auction or by allotment. It is further contemplated that the allotments are ordinarily required to be made on first come first serve basis. The Authority is, however, to reserve the land for groups or individuals or for persons practising any profession or carrying on any occupation, trade or business or for such other category of persons, Government Departments and Institutions, Charitable Institutions and other Organisations of public welfare as may be decided by the Authority from time to time. A perusal of Annexure P/3 appended with C. W. P. 1303 of 1989 shows that the Authority notified the school sites in different sectors of Urban Estate, Panchkula for allotment on leasehold basis. The applications were required to be submitted by 30-3-1988. Individuals/ institutions were required to apply to the Estate Officer on the pro forma attached herewith along earnest money of Rs. 2,500/in the shape of bank draft payable at Panchkula in favour of the Estate Officer. It may be noticed that the intending allottees were not even required to submit their application forms in the prescribed form annexed with Regulations as a and b. A sum of Rs. 2,500/- was directed to be paid in the shape of bank draft as earnest money. How the amount of Rs. 2,500/- was determined to be paid as earnest money has not either been explained or detailed in the reply filed on behalf of the respondents. Under Sub-Regulation (2) of Regulation 5 it was mandatory that applications for allotment should have been accompanied by such amount as determined by the authority which should not be less than 10 per cent. of the price/premium. Without undertaking or even ascertaining tentative price of the site, the respondent-authority directed the applicants to furnish a sum of Rs. 2,500/- only as earnest money which apparently appears to be against the interest of the authority. It appears that a total number of 72 applications were received by the Authority for the school sites which are shown to have been considered by the Selection Committee. The Selection Committee is stated to be comprising of representatives as per directions of the HUDA and consisted of Deputy Commissioner, Ambala, Smt. Keshmi Anand Arora, Additional Deputy Commissioner, Ambala, Shri K. K. Sharma, District Education Officer, Ambala, Shri R. P. Singh, Senior Town Planner, Panchkula and Shri V. P. Chauhan, Estate Officer, HUDA. The Committee met under the Chairmanship of the Administrator, HUDA on 16 and 17-6-1988 and decided that even the State Government had not specified its requirement, two sites in Sector 15 and 12-A be reserved for Government High Schools. Out of the 3 primary sites advertised, one in Sector 15 as was decided to be retained by HUDA for Government Primary School and some Nursery School Sites in Sectors 2, 4, 8, 12, 16, 19, 15 and 21 were also reserved for the Government. Out of the remaining sites for High Schools, none of the applicants was found fit for recommendation of allotment. It was observed that the management of Bhartiya Vidhya Bhawan approached the Committee for allotment of a High School Site tentatively giving the preference for the site in Sector 12, Panchkula keeping in view the reputation of the institution, its credibility, quality of education and the financial position of the institution, the Committee recommended that, "the condition that no applicant who had not responded to the advertisement should be considered, be relaxed in this very case". The first departure was, therefore, made in favour of respondent Bhartiya Vidhya Bhawan by allotting the site for High School even though the said institution had not applied for it. The Committee is stated to have further allotted two primary school sites one in Sector 11 and the other in Sector 12 to the private institutions. The alleged criterion adopted were the good results, reasonable fee, financial position, present students strength and reputation of the already running institution, notwithstanding that the institution was in Chandigarh or elsewhere. The so-called criterion for allotment of sites was considered to be made in favour of M/s Manav Mangal Society and Nav Bal Niketan Model Middle School. Departing from the criterion adopted for the purposes of making the allotment for Primary School sites, the Committee felt that even if no applicant was running a school but if he/she/society appears to be well versed in the techniques of teaching nursery classes, the applicant be considered for allotment. On that basis recommendations were made for allotment of sites in favour of :- 1. Ajay Memorial Educational Society, Panchkula; 2 Ashok Trehan Memorial Charitable Trust, Chandigarh; 3 Lt. Col. Yoginder Paul Mahindru, Staff Officer, Gde. I. HQ Western Command; 4 Woodland House School, Srinagar; 5 Tiny Tot Nursery School, Chandigarh; 6 Gyandeep Model School, Sector 21-D, Chandigarh; 7 Vijay Model School, Mohali; and 8 New India Public School Education Society, Panchkula. Two or three applicants namely Haryana Model High School, D. A. V. High School despite being good and possessing better financial position were not allotted the sites allegedly on the ground that they were allottees of the HUDA. The allotment made in favour of respondent Lt. Col. Yoginder Paul Mahindru despite the fact that he was still in Army Service. It is worth noting that one of the Members of the Selection Committee namely Shri K. K. Sharma, District Education Officer, Ambala, did not agree with the recommendation of the Committee and pointed out that it is not stated therein that while allotting the school sites for private institutions, the HUDA had not prescribed any terms and conditions, it was genuinely apprehended that they would later on sell these sites to other persons or institutions on high premium. He further recommended that before making any allotment, it was necessary for the HUDA to prescribe the terms and conditions.

(28) THE skeleton record of the respondent-authority produced before us and the pleading of the parties reveal :-

i) that before advertising the school site, the area of such site was neither determined nor notified; ii) that no tentative premium as required under the Regulations was determined before inviting applications; iii) that the applications were not invited in accordance with the procedure prescribed under Regulation 5; iv) that the amount of earnest money was not determined as mandated by Regulation 5 (2); v) that no terms and conditions were specified to be applicable upon allotment; vi) that no criterion was determined before initiating the process of allotment; viii) that the Committee was constituted as per some alleged instructions issued by the Authority which were not brought on record or produced before the Court during the pendency of the writ petitions or Letters Patent Appeals; viii) that the so-called criterion adopted by the Committee was more observed in breach than in compliance; ix) that the criterion adopted was neither reasonable nor proper and did not achieve the object for which the allotments were being made; x) that the allotments are shown to have been made or rejected mainly on the ground of the recommendations of the Deputy Commissioner; xi) that no reason was assigned for resorting to the method of allotment by ignoring the method of allotting by auction; xii) that the interests of the HUDA were admittedly not protected; and xiii) that the school sites have been allotted without specifying the amount to be paid as premium for such sites on allotment.

(29) THE respondent-authorities were required to observe the rule of law and make allotments with an open mind after following the prescribed criterion leaving no doubt for the aggrieved to make a grievance later on that undue benefits were conferred upon some and deprived to others. The administrative powers were required to be exercised in a manner which should not look arbitrary and be fair. The respondents being the regulator, dispenser and provider of benefits in the form of allotments were required to deal with the Government largess in a manner free from suspicion and apparently fair.

(30) A Full Bench of the Kerala High Court in V. Punnen Thomas v. State of Kerala, AIR 1969 Ker 81, held,

"the Government, is not and should not be as free as an individual in selecting the recipients for its largess. Whatever its activity, the Government is still the Government and will be subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal".

(31) SIMILARLY point was made by the Supreme Court in erusian Equipment and Chemicals Ltd. v. State of West Bengal, AIR 1975 SC 266 [LQ/SC/1974/359] , and while elaborating dealt with Ramans case, AIR 1979 SC 1628 [LQ/SC/1979/277] (at p. 1638) (supra) held :"now, it is obvious that the Government which represents the executive authority of the State, may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of judicial persons to carry out its functions. In the early days, when the Government had limited functions, it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge governmental functions, which were of traditional vintage. But as the tasks of the Government mutliplied with the advent of the welfare State, it began to be increasingly felt that the framework of civil service was not sufficient to handle the new tasks which were often of specialised and highly technical character. The inadequacy of the civil service to deal with these new problems came to be realised and it became necessary to forge a new instrumentality or administrative device for handling these new problems. It was in these circumstances and with a view to supply this administrative need that the public corporation came into being as the third arm of the Government. As early as 1819 the Supreme Court of the United States of Mac. Culloch v. Maryland, (1816-19) 4 Wheat 316 held that the Congress has power to charter corporations as incidental to or in aid of governmental functions and, as pointed out by Mathew, J. , in Sukhdev v. Bhagat Ram, (1975) 3 SCR 619 [LQ/SC/1975/80 ;] ">(1975) 3 SCR 619 [LQ/SC/1975/80 ;] [LQ/SC/1975/80 ;] : (AIR 1975 SC 1331 [LQ/SC/1975/80 ;] ">AIR 1975 SC 1331 [LQ/SC/1975/80 ;] [LQ/SC/1975/80 ;] ), such federal corporations would ex-hypothesis be agencies of the Government. In Great Britain too, the policy of public administration through separate corporations was gradually evolved and the conduct of basic industries through giant corporations has now become a permanent feature of public life. So far as India is concerned, the genesis of the emergence of corporations as instrumentalities or agencies of Government is to be found in the Government of India Resolution on Industrial Policy dated 6th April, 1948 where it was stated inter alia that "management of State enterprise will as a rule be through the medium of public corporation under the statutory control of the Central Government who will assume such powers as may be necessary to ensure this".

It was in pursuance of the policy envisaged in this and subsequent resolutions on Industrial Policy that corporations were created by Government for setting up and management of public enterprises and carrying out other public functions. Ordinarily these functions could have been carried out by Government departmentally through its service personnel, but the instrumentality or agency of the corporations was resorted to in these cases having regard to the nature of the task to be performed. The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities. If Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through the instrumentality or agency of corporations should equally be subject to the same limitations. But the question is how to determine whether a corporation is acting as instrumentality or agency of Government. It is a question not entirely free from difficulty. "

(32) IT is true that it is not for the Court to determine whether a particular policy or decision taken for the fulfillment of that policy is fair. The Court is only concerned with the manner in which those decisions are taken. The grounds upon which the administrative decisions are taken is subject to control by judicial review. The Court is entitled to investigate the action of the authority with a view of seeing whether or not the authority had acted fairly and taken into account matters which they ought not to have taken into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. The Supreme Court in Tata Cellular v. Union of India, (1994) 4 JT (SC) 532 : (1994 AIR SCW 3344), held :

"it is open to the Court to review the decision-makers evaluation of the facts. The Court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. "

(33) THE Supreme Court in G. D. Zalani v. Union of India, (1995) 2 JT (SC) 420 : (AIR 1995 SC 1178 [LQ/SC/1995/183] ), observed, "that while selling public property or granting its lease, the normal method is auction or call for tenders so that all the intending purchasers on lease should have equal opportunity of being submitting their bids and tenders. Even there may be exceptional circumstances where adopting of such a course may not be insisted upon". It was further observed that the Government or Authority as the case may be, is required to act fairly in arriving at the best available arrangement in the circumstances.

(34) IN the instant case, the allotments appeared to have been made completely in violations of the provisions of the and the Regulation. It is further established that the action of the respondents was not fair and proper. The allotment appears to have been made under suspicious circumstances and without adopting any criterion. The Chief Administrator, HUDA, who appeared before the learned single Judge on 11-9-1992 (reported in AIR 1993 Punj and Har 71), conceded that there was nothing on the record to show as to what weighed with the Selection Committee in rejecting the applications filed by the writ petitioners and other applicants. On fact, the learned single Judge rightly held (at pp. 74 and 75 of AIR) :

"keeping in view the facts of the present case, I am satisfied that the whole matter regarding the allotment of school sites was considered by HUDA and its Selection Committee in a most arbitrary manner without adopting any uniform yardstick in weighing the merits and demerits of the applicants. A site has been allotted to Ajay Memorial Educational Society, Panchkula and the reasons given in support of the allotment is that it was already running a school in Panchkula with a strength of 150 students and had a bank balance amounting to Rs. 81,000/ -. According to the Selection Committee, this institution enjoyed a good reputation in terms of educational standards and the Deputy Commissioner had recommended the allotment. One of the petitioners is also running a school in Panchkula with about 300 students which stands recognised by the State Government and even though it has a larger bank balance, it has not been allotted a site and amassing reason given in the written statement is that the application had not been recommended by the Deputy Commissioner. As to what were the factors which weighed with the Deputy Commissioner in recommending or refusing to recommend an application are not known. The case of the petitioner for allotment was recommended by the Sub-Divisional Magistrate, Kalka as the Deputy Commissioner was not available and the last date for the submission of applications was expiring when the application was filed. If these were the only factors which weighed with the Selection Committee (as admitted in the additional reply) where is then the justification for not treating the petitioner similarly and allotting a site to it. Again, one Lt. Col. Y. P. Mahindru has been allotted a site who was in the Army Education Service when the allotment was made and had two more years of service to go before his retirement. He did not run any school or institution and his application had not been recommended by the Deputy Commissioner and yet a school site was allotted to him, the startling reason being that he would construct the building during the two years of his service and start running a school soon after his retirement. There could not be anything more arbitrary and perverse than this. It is not necessary to refer to the reasons given in support of the allotment made in favour of all the private respondents, as in my opinion, the whole action of HUDA does not disclose any discernible principle which could be said to have been followed in the matter of allotting the sites. Before this action of HUDA could be upheld, it was necessary for it to disclose some principle or uniform yardstick which it had applied in the matter of selecting candidates for school sites on the basis of which it could be said that the allottees fitted into that yardstick whereas unsuccessful applicants did not. As already stated earlier, no such principle was adopted whereas inconsistencies and arbitrariness are writ large. In these circumstances, I have no hesitation in holding that a policy of pick and choose was adopted and those who were the favourites were allotted the sites without the claims of other applicants including the petitioners having been considered. The whole action is, therefore, illegal, arbitrary and capricious. "

(35) UNDER the circumstances it established that the whole action of the HUDA in making the allotments in favour of private respondents was illegal, unconstitutional, arbitrary and capricious. All the allotments made in favour of private respondents are, therefore, required to be quashed.

(36) EVEN after holding that allotments were the result of pick and choose policy and the whole action was illegal, arbitrary and capricious, the learned single Judge ultimately held,

"in the result, the allotments though illegal and arbitrary are not being quashed in public interest".

We do not agree with the conclusion of the learned single Judge by which the allotments were not quashed presumably in public interest. No public interest was involved in the case. It was only personal, pecuniary and commercial interests of the petitioner which were required to be adjudicated in the writ petitions. The mere fact that some of the respondents had raised construction or that they had employed some teachers or had even admitted students in their institutions was not a ground for permitting their illegalities to be continued or rectified.

(37) A Division Bench of this Court in Thapar Institute of Engineering and Technology, Patiala v. State of Punjab, C. W. P. No. 1745 of 1992 (sic) decided on 2-9-1994 had held that the High Court cannot permit the illegalities to be perpetuated upon the persons who illegally got the benefits. Permitting such a course would amount to deviating the performance of constitutional obligations. All allottees who had succeeded in getting the conferment of benefits in their favour cannot be permitted to argue that as they have already enjoyed the benefits on the basis of the illegalities committed in their favour, no harm should be done to them. The respondent-authority and the private respondents are presumed to be knowing law and aware of the illegalities committed by not having resorted to the provisions of the and the Regulation in conferment of largess in favour of the allottees. It has been conceded before us that during the pendency of the writ petition, interim directions were issued that if any construction is raised by the allottees, the same shall be at their own risk and responsibility and subject to the decision of the writ petition. Could a person or institution getting the concession at his own risk be permitted to urge that such a concession made in his/its favour be regularised even though the initial allotment was made in his/its favour was unconstitutional and illegal. The reply must be emphatically in negative. Accepting such an argument would defeat the interests of justice and depriving the successful litigant in getting the benefit of the orders of the Court passed in their favour. Any clever litigant, as the private respondents are in this case, feeling that their cases were weak but likely to be disposed of after some time, would make such a request and if the lis is decided against them, frustrate the judgments on such pleas. The Courts while exercising writ jurisdiction are not concerned with the consequences which are likely to arise on account of the determination of the rights of the parties. The Courts are also not concerned with the names or faces or reputation of the parties before it. Once the lis has been decided in accordance with the Constitution and the provisions of law, the consequences would normally follow unless compelling, cogent or valid reasons are shown otherwise. The bona fides of the respondents in the instant case have been proved to be not free from doubt from the very beginning. They manipulated the allotments in their favour and raised alleged huge constructions at their own risk and responsibility under the cloak of the Court orders permitting them construction on the conditions which now they do not want to follow. Notwithstanding the fact that the respondents had raised constructions, their allotments cannot be permitted to be continued. We do not agree with the finding of the learned single Judge to this extent and direct that the allotments made in favour of private respondents are quashed.

(38) HOWEVER, keeping in view the interests of students, teachers and some amount spent by the respondents, even though at their own risk and responsibility but showing the magnanimity of law, some arrangements can be made for the protection of the interests of all concerned. The appeals are, therefore accepted by upholding the judgment of the learned single Judge by which it has been held that the whole of the action of the respondents in making allotments was illegal, arbitrary and capricious and modify the same to the extent by which the allotments made in favour of private respondents were not quashed and all the allotments made in favour of private respondents are hereby quashed. The writ petitions filed by the appellants shall be deemed to be disposed of with the following directions.

(a) All the school sites required to be allotted or sold shall be notified afresh strictly in accordance with the provisions of the and the Regulations. All the petitioners, the private respondents and all other a eligible persons shall be permitted to participate in the process of sale or allotment;

(b) preference shall be given for sale or allotment by open auction;

(c) in case, the respondent-authority decides not to resort to the method of open auction, it may invite applications in accordance with the provisions of Regulation 5 and on the prescribed pro forma;

(d) The tentative price/premium of each site shall be pre-determined and proportionate earnest money received along with the applications, if filed;

(e) appropriate reasonable uniform criterion for making the allotments, if so desired, be notified in advance;

(f) Before initiating action for sale or allotment of the school sites, value of the construction/building raised by the private respondents herein shall be got determined by the Committee of experts headed by a Chief Engineer;

(g) The intending allottees would be intimated that if they succeed in getting the school sites allotted in their favour, they will take its possession along with the building staff and the students who offer to remain in their employment institutions;

(h) In case it is decided to transfer the land by open auction it shall specifically be mentioned in the notice that in case the present allottee succeeds in such auction, they shall be given the benefit of 10 per cent. of the bid amount offered by them;

(i) Out of the amount realised by sale or lease on account of the price/premium, the erstwhile allottees shall be paid the amount spent by him / it in raising construction of the building at his own risk and responsibility during the pendency of the writ petition as calculated by Expert Committee along with the amount already paid to the H. U. D. A. such a provision would not be applicable where the allottee exercises his option to remove the construction raised by him/ it at his / its own risk and responsibility;

(j) The process be initiated within two months and completed within four months;

(k) Till the process of fresh allotment is completed, the private respondents shall be permitted to remain in possession of the school sites allotted to them. The appellants are held entitled to the payment of costs which are assessed at Rs. 2,000/ - per appeal. Order accordingly.