Holding

The Court held that sections 8(2) and 8(3) are not applicable and that the licence may be re‑validated on fulfillment of the conditions prescribed in Rule 11, including payment of the bank guarantee with interest and reservation of 15% of houses for weaker sections.

Summary

B.P. Jain & Associates, owners of 24.25 acres in Faridabad, applied for a licence to develop a group housing colony under the Haryana Development and Regulation of Urban Areas Act, 1975. The application was conditioned on compliance with Rule 11, including execution of an agreement on stamp paper and furnishing a bank guarantee of Rs 109.30 lacs. Although two extensions were granted, the petitioner failed to provide the guarantee and the Director of Town and Country Planning refused the licence. The petitioner approached the Governor, who suggested that the licence could be re‑validated if the petitioner paid interest on the guarantee amount; the petitioner accepted. A writ petition under Article 32 sought a mandamus directing re‑validation of the licence. The respondents argued that the petitioner had not exhausted alternative remedies and that the matter could not be entertained under Article 32. The Supreme Court held that sections 8(2) and 8(3) of the Act were inapplicable as no licence had been granted, and that the licence could be re‑validated subject to compliance with Rule 11, execution of the agreement, furnishing a bank guarantee of Rs 2.20 crore (including interest), and reserving 15% of houses for weaker sections. The writ petition was allowed with these conditions.

Issues considered

Whether sections 8(2) and 8(3) of the Haryana Development and Regulation of Urban Areas Act, 1975 apply when no licence has been granted.
Whether the petitioner is entitled to a mandamus for re‑validation of the licence despite alleged non‑compliance with Rule 11.
Whether the principle of promissory estoppel or the doctrine of arbitrariness applies to the respondent's refusal.
Whether the petitioner has exhausted the alternative remedies of appeal and review under sections 19 and 20 of the Act.
Whether the writ petition is maintainable under Article 32 of the Constitution.

Legislation cited

Haryana Development and Regulation of Urban Areas Act, 1975s. 19, s. 20, s. 8(2), s. 8(3)

Subjects

group housinglicence revalidationpromissory estoppeladministrative lawweaker sectionsbank guaranteeArticle 32writ petitionarbitrariness

Judgment

A B. P. JAIN AND ASSOCIATES
v.
STATE OF HARYANA AND ANOTHER

[K. N. SINGH, CJ., R.M.SAHAI AND S. MOHAN, JJ.]

B DECEMBER 12, 1991

Haryana Development and Regulation of Urban Areas Act, 1975-
Section 8 (2) & (3)-Applicability of.

Town Planning-Group housing or housing colony-Object.
c
Haryana Development and Regulation of Urban Areas Rules, 197~
Rule 11-Applicationfor licence for group housing scheme--'DirectiOn to fulfil
the conditions for 'grant of licence-Refusal on the ground of nonfulfilment
of condition~epresentation agreeing to fulfil the requirements-Rejected by
authority-Governor's direction to revalidation of the order of authority-
D Held, revalidation of licence/permission on fulfilment of the conditions.

The petitioner-firm, which was carrying on construction activities
owned 24.25 acres of vacant land.

Or121.7.1983, under the provisions of the Haryana Development and
E · Regulation of Urban Areas Act, 1975 and the Haryana Development and
Regulation of Urban Areas Rules, 1976, the petitioner-firm applied for the
grant of licence for group housing scheme. The firm was noticed to fulfil
the conditions laid down in Rule 11 of the Rules within a period of 30 days.

F The agreement was required to be executed on non-judicial stamp
paper of Rs. 3. The petitioner was a1so called upon to execute a bank
guarantee for Rs. 109.30 lacs. On petitioner's request for furnishing the
ban~ guarantee, time was extended by four weeks on two occasions.

While returning the estimates for development and. service plans for
G 24.45 acres the second responden.t directed the petit. ner to submit the
estimate only for 21.15 acres to which the petitioner replied that the
external development charges which were demanded to be reduced in view
of the reduction in the area.

The request of the petitioner was not acceded and the petitioner was
H called upon to execute an agreement under bank guarantee as already
asked for.
392
B. P. JAIN v. STATE 393

After some lapse of time the petitioner explained the circumstances A
under which he could not arrange for the bank guarantee of Rs. 109.30
lacs earlier and also stated that it was willing to abide by all the directions
and conditions, pre.scribed by the second respondent.

The second respondent refused petitioner's request for grant of a
licence since it had failed to fulfil the conditions laid down under rule 11 B
within the stipulated/extended period.

The petitioner filed a memorandum to the Governor.

The Governor made a suggestion that the licence granted in Feb.
1984 could be revalidated if the petitioner was ready and willing to pay . C
interest on bank rate on the amount of Rs.109.30 lacs, which the petitioner
agreed. The Governor directed to submit a report and to calculate the
total amoun~. With the change of the Government, the directions of the
Governor were not implemented.

The petitioner filed this writ petition contending that having given D
an assurance it was not open to the respondent to withdraw that assurance
and in such a case the principle of promissory estoppel would apply; that
as the petitioner was willing to comply with the directions as given by the ,
Governor, to refuse to accord licence would amount to acting in an
arbitrary· and unreasonable manner; that the respondent could not be
allowed to frustrate the setting up of the' Group Housing Colony as it was E
provided to help the weaker sections.

The respondents submitted that the petitioner did not exhaust the al-
ternative remedy of appeal and review provided under sections 19 and 20.
of the Act; that the writ petition suffered from delay and laches, as the
F
order was passed on 25.9.89, the petition not to be considered at this
belated stage; that there was nojustitication for approaching this Court
directly under Article 32 of the Constitution, as the petitioner could havt;
approached the High Court under Article 226 of the Constitution.

Allowing the writ petition, this Court, G
HELD: 1. Sections 8(2) & 8(3) are not applicabie to the pre~ent case,
as no licence had been granted to the petitioner. [397 F]

2. The basic need· of every citizen of this country is to have a
reasonable accommodation to life. The house-building activities is to be H
394 SUPREME COURT REPORTS [1991] SUPP. 3 S. C.R.

A encouraged. The Court need not underscore the magnitude of the problem
and the urgent need to provide solution, excepting to subscribe to the
judicial pronouncement in AIR 1987 SC 2117 and AIR 1990 SC 630.
[400 A]

3. As the object is to provide a housing colony and help the weaker
B sections of the society, it cannot be turned away by contending that the
houses or flats, if constructed would be beyond the reach of the weaker
sections. Equally, the contentions are fallacious that the petitioner is a big
industrialist and it is not expected that after investing crores of rupees in
the scheme, it will provide cheaper houses to the poorer people even
beyond the cost price. [400G-401A]
c
4. Revalidation of the licence/permission granted by respondent
No.2 for an area to the extent of 21.12 acres to be done on fulfilment of the
following conditions: that the petitioner shall comply with all the condi-
tions stipulated in Rule 11 of the Haryana Development of Rural and
Urban Areas Rules, 1976; that he shall execute the agreement in Form LC-
D IV(A) as prescribed under Rule 11 of Haryana Development and Regula-
tions of Urban Area Rules, 1976 within 6 weeks; that initially a bank
.guarantee shall be furnished to the satisfaction of the second respondent
for a sum of Rs. 2.20 crores within 6 weeks which includes interest on Rs.
109.30 lacs from 1984 and that 15% of the constructed house shaJJ be
reserved only for the weaker sections. [401 B-E]
E
)
Prabhakaran Nair etc.etc. v. State ofTamilNadu and Others, AIR 1987
SC 2117; Mis. Shanlistar Builders v.1:'arayan Khimalal To-tame and Others,
AIR 1990 SC 630, followed.·
CIVIL APPELLATE JURI~DICTION: Writ Petition(Civil) No. 981 of
F 1991.
(Under Article 32 ofthe Constitution of India).
Gobinda Mukhoty, R;C.Kaushik and-D.K.Garg for the Petitioners. ,•

KC.Bajaj and LS.Goyal for the Respondents..
G
The Judgment of the Court was delivered by
MOHAN, J. The petitioner is a firm carrying on .business as builders,
colonizers and contractors. The petitioner is the owner of 24.45 acres of vacant
. land situated in village Lakkarpur, near Surajkund, District Faridabad, Haryana
State. Being engaged in construction activities it made an application under the
H
B. P. JAIN v. STATE [MOHAN, J.] 395

provisions of llaryana Development and Regulation of Utban Areas Act of A
1975(hereinafter referred to as the Act) read with Rules 1976 for the grant of'
Licence for group housing scheme. This application was submitted by the
petitioner on 21st July, 1983 without necessary documents. After several
representations the Director of Town and Country Planning Department
Haryana, Chandigarh replied that it was proposed to grant licence to the ..
petitioner for setting· up of Group Housing Colony at Village Lakkarpur, B
District Faridabad. The petitioner was called upon to fulfil the conditions laid
down in Rule 11 of the Haryana Development and Regulation of Urban Rules
.1976 within a period of 30 days from the date of service of that notice . Th~
agreement was required to be executed on non-judicial stamp paper of Rs 3:

The petitioner was also called upon to execute a bank guarantee for R~. c
109.30 lacs as required under Rule 11(1) of the said rules. On a request made
by the petitioner for extension of time for furnishing the bank guarantee, time
was extended (vide letter dated 5.4.84) by four weeks. A further extension was
prayed by the petitioner that was also granted on 5-7-84 granting a further
extension by four weeks.
D
\
On 19-10-84, while returning the estimates for development and servi~e
\ plans, the second respondent (Director of Town and Country Planning, Har-
yana, Chandigarh) for 24.45 acres, the petitioner was directed to submit the
estimate only for 21.15 acres. On receipt of this letter, the petitioner wrote on
14.11.84 that the external development charges which were demanded by the
second respondent might be reduced in view of the. reduction in the area. Tl}is E
. request of the petitioner was not acceded to by the Director. The petitioner w.as
called upoQ to execute an agreement under bank guarantee as already asked for.

After some lapse of time, on 12-12-87, the petitioner explained the
circumstances under which he could not arrange for the bank guarantee of Rs.
109.30 lacs earlier. The bankers was willing to provide a bank guarantee for Rs.
F .
109.30 lacs within 30 days of his intimating them to do so. It was also stated
that he was willing to abide by all the directions and conditions, which had byen
prescribed by the second respondent. Again, on 26-9-88, 11-10-88, 2-1-89 and .
7-1-89, the request was rejected for the revival of the sanction and agreeing
to comply with the rules and conditions. On 25.9.89, the petitioner was G
informed that it is a request for grant of a licence which was refused since it
had failed to fulfil the conditions laid dow.n under rule 11 within the stipulated/
extended period.
. .

Upon receipt of this letter, the petitioner filed a memorandum to the
Governor of Haryana on 4-5-91 since the State of Haryana was under H
396 SUPREME COURT REPORTS [1991] SUpP. 3 S. C.R.

A President's Rule. ·It appears from the affidavit that the Governor made a
suggestion that the licence granted in Feb. 1984 could be revalidated if the
petitioner was ready and willing to pay interest on bank rate on the amount of
Rs. 109.30 lacs which was demanded as a security by the Directot of Town and
Country Planning, Haryana, Chandigarh w.e.f. 1984. Thereupon, the petitioner
consented to such a course. The affidavit further avers that the Governor while
B recording the statement of the petitioner directed to submit a report and to
calculate the total amount

With the change of the Government, these directions of the Governor
. were not implemented. Hence, in this present petition, the petitioner prays for
an order in the nature of Mandamus to direct the State of Haryana to revalidate
C the licence/permission granted by the Director by his letter dated 'Nil' Memo
No. 1823-5 DP-84 permitting the petitioner to construct the multi-storeyed
houses and flats in accordance with law by accepting security/bank guarantee
to the tune of Rs 109 .30 lacs as demanded by the respondent under rule 11 (a).

A further prayer is for permission, approval or sanction to enable the
D petitioner to construct the multi-storeyed houses in pursuance of the licence
granted by the second respondent in the year 1984.

In support of the petition, the grounds are as under:

(a) since the petitioner is the owner. of the land and permission has
E been granted subject to compliance with rule 11, on furnishing
bank guarantee of Rs .. 109.30 lacs by grant of extension of time for
compliance with those conditions no prejudice whatsoever is
caused to the respondent.

(b) Having given an assurance it is not open to the respondent to
F
withdraw that assurance and in such a case the principle of
promissory estoppel will apply.· In any event, the petitioner was
willing to comply with the directions as given by the Governor.
Under those circumstances, to refuse to accord licence would
amount to acting in an arbitrary and unreasonable manner, more
G so, when the second respondent is exercising powers under sec-
tions 8(2) & (3) of the Act Certainly, the respondent could not be
allowed to frustrate the setting up of the Group Housing Colony~

The counter affidavit has been filed on behalf of the respondents in which
the preliminary objection is taken that the petitioner has not exhausted the
H alternative remedy of appeal and review provided u..der section 19 and 20 of
B. P. JAIN 11. STATE [MOHAN, J.) 397

the AcL Disputed question of facts sought to be raised cannot be adjudicated A 1

upon in a writ petition under Article 32 of the Constitution. The writ petition ,
also suffers from delay and laches as the impugned order was passed on
25-9-89 the petition cannot be considered at this belat~ stage. ·
'. There is no justification for approaching this court directly under Article
32 of the Constitution. The petitioner could well approach the High Court B
under Article 226 of the Constitution. Ori the merits it is submitted that there
is no violation of fundainental rights so as to enable the petitioner to-approach
this court.

Tue petitioner's scheme was to construct multi-storeyed building but it
is made out that his scheme is ·to accommodate/give shelter to the weaker c
sections of the society: The flats, if constructed, ean only be purchased by high/
middle-class group of people as the site where the petitioner wanted to build
up Jjis colony falls in a well-devaloped area. Hence, it would be beyond the
reach of the weaker sections of the society to purchase these multi-storeyed,
flats.
D
When the petitioner was called upon to execute the necessary agreements
and furnish bank guarantee, it did not do so. Therefore, the blame lies only at
the door of the petitioner. When repeated extensions were granted in order that ~·

the provisional decision to grant licence could be finally ordered. the petitioner·
did not do so. It is denied that the petitioner ever submitted a letter on 4-5-91
to the Governor of Haryana. In any event, it could be considered an appeal E
under section 19 of the Act.

Section 8(2) & (3) are not applicable to the present case, as no licence ·
had been gninted to the petitioner.
F
~
Learned counsel for the petitioner submitted before us that the only
condition on which the provi_sional decision to grant licence could not be
finalised was because of the non-execution of agreement by the petitioner as
-..: well as non-furnishing of bank guarantee by way of security for a sum of R~
--j:
109.30 lacs. As of today, the petitioner
.
is willing to comply
.
with all the'
conditions set out under rule and will deposit such amount as is required. As G
a matter of fact, on the basis of the suggestion of the Governor, inclusive of
interest from 1984 it has come to 2.20 crores, which the petitioner is willing ·

-· to deposit Since, essentially, the housing scheme is intended to benefit the
weaker sections, 15% of the houses will be reserved for weaker sections only.

Subject to these conditions, if licence is granted, no prejudice is caused· H
398 SUPREME COURT REPORTS [1991] SUPP. 3 S. C.R.

A to the respondent. The respondent cannot be allowed to act arbitrarily and
unreasonably, merely because at the time when the petitioner was called upon·
to furnish bank guarantee, it was in difficult circumstances.

The learned counsel for the respondents would reiterate the averments in
the counter affidavit and would urge upon us that the petitioner had not
B exhausted the alternative remedy. Nothing prevented it from approaching the
High Court since there is no violation of any fundamental right tinder articles
14, 19 or 21 of the Constitutions.

When the petitioner itself failed to carry out the conditions of executing
the agreement and furnishing bank guarantee, it cannot go after so many years
C tum round and say that it is now willing regardless of passage of time. There
is no arbitrariness or unreasonableness in the act of the respondent in not
granting further extensions, espeeially so, when two extensions w~re granted.

We will now proceed to consider the above submissions~ It is not -
disputed before us that there is acute housing problem in the State. In fact the
D respondent in the counter admits and states as follows:

"It is not disputed that in some areas there is a housing problem but
that is general problem". ·

About the necessity for promoting a national housing policy to overcome
E the acute shortage of housing in our country, this Court has occaiion to
consider in Prabhakaran Nair etc. etc. v. State o/Tami/ Nadu and others, AIR
1987 SC 2117. In para 38, it was stated as under:

"It is common knowledge that there is acute shortage of housing,
various factors have led to this problem. The laws relating to
F letting and of landlord and .tenant in different States have from
different States'. angles tried to grapple the problem. Yet in view
of the magnhude of the problem, the problem has become insol-
--
. ~ ; -uble and the litigations abound and the people suffer. More houses
' ' -- must, therefore, be built, more acc:ommodation and more spaces
'/
G made available for the people to live in .......Men with money
should be given proper and meaningful incentives as in some
European countries to build .houses, tax holidays for new houses
can be encouraged. The tenants should also be given protection and
security and certain amount of reasonableness in the rent. Escala-
tion of prices in the urban properties, land, materials and houses
H
B. P. JAIN v. STATE [MOHAN, J.] 399

must be rationally checked. This country very vitally and very A
urgently reqliires a National Housing Policy if we want to prevent
a major breakdown of law and order and gradual disillusionment
of people. After all shelter is one of our fundamental rights. New
national housing policy must attract new buildings, encourage new·
buildings, make available new spaces, rationalise the rent structure
and rationalise the rent provision~ and bring certain amount of . B
uniformity though having scope for sufficient flexibility among the
States to adjust such legislation according to itc; needs".

Again, in Mis. Shanlistar Builders v. Narayan Khimalal Totame and
others, AIR 1990 SC 630, dealing with the case, it was observed as under :

"Basic needs of man have traditionally been accepted to be three-
food, clothing and shelter. The right to life is guaranteed in any
Civilized society. That would take within its sweep the right to
.food, the right to clothing, the right to decent environment and a
reasonable accommodation to live in. The difference between the
.need of an animal and a human being for shelter has to be kept in D:
view. For the animal it is the bare protection of the body; for a
human being it has to be a suitable accommodation which would
allow him to grow in every aspect-physical, mental and intellec-
tual. The constitution aims at ensuring fuller development ofevery
child. That would be possible only if the child is in a proper home.
It is not necessary that ever citizen must be ensured of living in a E
well-built comfortable house but a reasonable home particularly
for people in India can even be mud-built thatched house or a mud-
built fireproof accommodation.

With the increase of population and the shift of the rural masses to
F
urban areas over the decades the ratio of poor people without
houses in the urban areas has rapidly increased. This is a feature
which has become more perceptible after independence. Apart
from the fact that people in search of work move to urban
agglomerations, availability of amenities and living conveniences
also attract people to move from, rural areas to cities. Industriali- G
sation is equally responsible for concentration of population around
industries. These are features which are mainly responsible for
increase in the homeless urban population. Millions of people
today, live on the pavements of different cities of India and a
greater number live animru like existence in Jhuggis".
H

I •
A
400 SUPREME COURT REPORTS [1991] SUPP. 3 S. C.R.

Thus, it would be clear that both the decisions clearly emphasis the basic
need of every citizen of this country to have a reasonable accommodation to
[
life. They also emphasize the need to encourage house building activities. We
need not underscore the magnitude of the problem and the urgent need to ·
provide solution excepting to subscribe to the above judicial pronouncementS.
r
B Here, the petitioner desires to build houses on his own land. It cannot be ~·

denied and it is not denied before us that on his application dt 21.7.83, the
· Director of Town and Country Planning, Haryana, Chandigarh categorically
stated, "it is now proposed to grant licence to you for setting up Group Housing
Colony at village Lakkarpur, District Faridabad". ·

C Of course, this proposal was subject to the following conditions:

(i) fulfilment of the conditions laid down in Rule 11,.

(ii) executing of bank guarantee of Rs. 109.30 lacs as required under
Rule J l(a); and
D
(iii) to give an undertaking to the effect that the petitioner shall pay the
proposed developmental charges to be deterinined by the Director.

No doubt he could not comply with these cond.itions inspite of two
extensions one on 5-4-84 and the other on 5-7-84 for four weeks respectively.
E However, on 12-12-87; the petitioner did make it clear that he was willing to
abide by all the conditions. There is nojustification for the respondent to keep
silent inspite of repeated requests made in several communications by the
petitioner. It was only on 25-9-89, the petitioner was informed that his requests
for revalidation could not be considered as he had failed to fulfil the stipulated
conditions. But the matter did not rest there, as the petitioner did approach the
F
Governor. It was suggested that licence ~ould be re-validated should the

l
petitioner be (l) willing and ready to pay interest at bank rate on Rs. 109.30
lacs, with effect from 1984. Though the respondent denies the submission of ·
this letter dated 4-5-91 to the Governor, we cannot agree with the respondent
as if the document is introduced for the purpose of this case. Even otherwise,
G as rightly contended by the petitioner what is the prejudice caused to the
respondent so long as the petitioner is willing to comply with each and every
condition? As stated by the learned counsel, after all, the object is to provide
a housing colony and help the weaker sections of the society. It cannot be
turned away by contending that the houses or flats, if constructed, would be
beyond the reach of the weaker sections. Equally, the contentions are fallacious
H that the petitioner is a big ind.ustrialist and it is not expected that after investing
B. P.JAIN v. STATE [MOHAN, J.] 401

crores of rupees in the scheme, it will provide cheaper houses to the poorer A
people even beyond the cost price. These arguments proceeded on hypothetical
lines. Hence, we reject them. We are firmly of the view that having regard to
the undertaking given by the petitioner's Counsel as stated above, it is a case
in which the petitioner is entitled to succeed. Accordingly, we allow this Writ
Petition, subject to the following conditions:
B
(i) The petitioner shall comply with all the conditions stipulated in
Rule 11 of the Haryana Development of Rural and Urban Areas
Act, 1976. -

(ii) He shall execute the agreement in From LC-IV(A) as prescribed
under Rule 11 of Haryana Development and Regulations of Urban C
Act, 1976 within 6 weeks from today.

(iii) Initially a bank guarantee shall be furnished to the satisfaction of
the second respondent for a sum of Rs. 2.20 crores within 6 weeks
which includes interest on Rs. 109.30 lacs from 1984.
D
(iv) 15% of the constructed house shall be reserved only for the weaker
sections.

As to who constitute the weaker sections will be decided by the Director
of Backward Classes or the Director, Social Services, Govt. of Haryana.
E
On fulfilment of the above conditions there shall be a re-validation of the
licence/permission granted by the respondent No. 2 in his letter dated 'nil' vide
Memo No. 1823-SDP-84. -

We make it clear that this permission is required to be granted only for F
an area to the extent of 21.15 acres.

There will be no order as to costs.

V.P.R. Writ petition allowed.

'
1