Holding

A designation of land under Section 12(2)(o) made without the State Government first forming an opinion, based on material, that substantial modifications to the draft development plan are necessary, is ultra vires and void.

Summary

The appellants' land, originally earmarked for residential use in a draft development plan prepared by the Surat Urban Development Authority, was later reserved for South Gujarat University. After the university failed to acquire the land, the State Government re‑reserved the land for the same educational purpose, a reservation that the Supreme Court had previously struck down. The State Government then issued preliminary and final notifications in 2004 designating the land for "educational use" under Section 12(2)(o) of the Gujarat Town Planning and Urban Development Act, 1976. The appellants challenged these notifications, arguing that the State had not satisfied the condition precedent of forming an opinion, based on material, that substantial modifications to the draft development plan were necessary, as required by the proviso to Section 17(1)(a)(ii). The Supreme Court held that the power to make substantial modifications is conditional on such an opinion, which must be grounded in material facts; none existed in this case. Consequently, the notifications were declared ultra vires and void, allowing the appellants to use the land for residential purposes. The appeal was allowed.

Issues considered

The State Government's power under Section 17(1)(a)(ii) proviso of the Gujarat Town Planning and Urban Development Act, 1976 to make substantial modifications without forming the requisite opinion.
Whether the preliminary and final notifications designating the land for educational use are ultra vires.
Whether the absence of material and a formed opinion renders the State's action invalid.
Whether a public‑interest justification, unaccompanied by material, suffices for exercising the power.

Legislation cited

Gujarat Town Planning and Urban Development Act, 1976s. 12(2)(o), s. 13, s. 16, s. 17(1)(a)(ii), s. 20, s. 21

Subjects

Town planningDevelopment planLand reservationStatutory powerUltra viresPublic interestDiscretionOpinion formationProperty rightsGujarat Act

Judgment

[2008] 4 S.C.R. 1051

).., BHIKHUBHAI VITHLABHAI PATEL & ORS. A
'(
v.
STATE OF GUJARAT & ANR.
(Civil Appeal No. 2000 of 2008)
MARCH 14, 2008
B
[S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.]
>-
Gujarat town Planning and Urban Development Act, 1976
1'
- s. 17 (1) (a) (ii) proviso ands. 12 (2) (o) - ReseNation of
land by Development Authority for residential purpose - State c
Government reseNing the same for South Gujarat University
- Failure to acquire the land - Re-reseNation thereof for the
same purpose - Struck down by Supreme Court - State
Government modifying the re-reseNation and designating the
land for educational use - Propriety of - Held: State
D
Government has wide powers in the matter of the draft
~ r development plan - However, substantial modification therein
is permissible only when it is after forming an opinion therfor
on the basis of the material sent along with the draft plan -
The order of the State Government designating the land for
educational use having been passed without formation of E
honest opinion, is ultra vires and void -Such designation
cannot be said to be in public interest as the same is not
suggested by the records and has been explained
subsequently - Public orders made in exercise of statutory
,....,,
'
authority, cannot be construed in the light of subsequent F
explanations - When the formation of opinion is challenged,
it is open to court to decide the arbitrariness of such opinion -
The land to be utilized for residential purposes - Judicial
Review.
G
The respondent-Authority included the land of the
appellant in the residential zone. State Government
reserved it for the purpose of 'South Gujarat University'.
The Authority for whose benefit the land was acquired
1051 H
1052 SUPREME COURT REPORTS [2008] 4 S.C.R.

A failed to acquire the land leading to re-reservation of the
land for the very same purpose which was ultimately
struck down by Supreme Court. Thereafter State
Government in exercise of its power conferred u/s 17 (1)
(ii) (2) of Gujarat Town Planning and Urban Development
B Act, 1976 modified the re-reservation by designating the
land for educational use u/s 12 (2) (o) of the Act vide
preliminary Notification. Final Notification was issued
giving effect to that. The preliminary as well as final
Notifications were challenged by the appellant by way of
C writ petition. High Court allowed the writ petition. LPA was
filed thereagainst. Division Bench of High Court dismissed
the cross objections preferred by the appellants. Hence
the present appeal.
Allowing the appeal, the Court
D HELD: 1.1 Indeed a very wide power is conferred
upon the State Government in the matter of sanctioning
of the draft development plan.The power conferred by
Section 17(1 )(a) (ii) read with proviso is a conditional
power. It is not an absolute power to be exercised ·in the
E discretion of the State Government. The condition is
formation of opinion - subjective, no doubt - that it had
become necessary to make substantial modifications in
the draft development plan. This opinion may be formed
on the basis of material sent along with the draft
F development plan or on the basis of relevant information
that may be available with the State Government. The
existence of relevant material is a pre-condition to the
formation of opinion. [Paras 19 and 23] [1065-D; 1066-G;
1067-A]
G 1.2 Opi~ion to be formed by the State Government
cannot be on imaginary grounds, wishful thinking,
however, laudable that may be. Such a course is
impermissible in law. The formation of the opinion, though
subjective, must be based on the material disclosing that
H a necessity had arisen to make substantial modifications
\. BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF
GUJARAT &.ANR.
1053

in the draft development plan. [Para 24] [1067-D, E] A
1.3 The expression: "so considered necessary" as .
occur ring in proviso to s. 17 (1) (a) (ii) is of crucial
importance. The term "consider" means to think over; it
connotes that there should be active applicat!on of the
mind. In other words the term "consider" postulates B
consideration of all the relevant aspects of the matter. A
plain reading of the relevant provision suggests that the
State Government may publish the modifications only
after consideration that such modifications have become
necessary. The formation of the opinion by the State C
Government should reflect intense' application of mind
with reference to the material available on record that it
had become necessary to propose substantial
modifications to the draft development plan. [Paras 25
and 26] [1067-F, G; 1068-8] D
1.4 In the instant case there was no material before
the State Government for its consideration that it had
become necessary to make substantial modifications to
the draft development plan. The record does not reveal
that there has been any consideration by the State E
Government that necessity had arisen to make substantial
modifications to the draft development plan. There has
been no formation of the opinion by the State Government
which is a condition precedent for exercising the power
under the proviso to Section 17 (1) (a) (ii) of the Act. F
[Para 28] [1068-G; 1069-A, 8]
1.5 The expression "is of opinion", that substantial
modifications in the draft development plan and
regulations, "are necessary", does not confer any
unlimited discretion on the Government. The discretion, G
if any, conferred upon the State Government to make
substantial modifications in the draft development plan
is not unfettered. There is nothing like absolute or
unfettered discretion and at any rate in the case of
statutory powers. [Para 32] [1072-C, D] H
1054 SUPREME COURT REPORTS [2008] 4 S.C.R.

A 1.6 In the affidavit in reply filed on behalf of the State
Government in the High Court, it was averred what
weighed with the State Government to exercise its power
under Section 17 (1) (a) (ii) of the Act was public interest
at large. Public interest parameter is undoubtedly a valid
B consideration that could have been taken into account
by the State Government. But this aspect of the matter is
stated for the first time in the affidavit in reply and is not
born out by the record. There is nothing on record
suggesting as to what public interest parameter weighed
C with the State Government. Public orders publicly made,
in exercise of a statutory authority, cannot be construed
in the light of explanations subsequently given by the
decision making authority. Public orders made by
authorities are meant to have public effect and must be
construed objectively with reference to the language
0
used in the order itself. [Paras 34 and 35] [1073-G;
1074-8, C, F, G]
1.7 On consideration of the facts and the material
available on record, it is established that the State
E Government took the action proposing to make
substantial modifications to the plan without forming any
opinion, which is a condition precedent for the use of
power under proviso to Section 17 (1) (a) (ii). The power,
to restrict the use of land by the owners thereof, is a
F drastic power. The designation or reservation of the land
and its use results in severe abridgment of the right to
property. Statutory provisions enabling the State or its
authorities to impose restrictions on the right to use one's
own land are required to be construed strictly. The
G legislature has, prescribed certain conditions to prevent
the abuse of power and to ensure just exercise of power.
Section 17 and more particularly the proviso to Section
17 (1) (a) (ii) prescribes some of the conditions precedent
for the exercise of power. The order proposing to make
substantial modifications, in breach of any one of those
H
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1055
,A"
GUJARAT & ANR.

conditions, will undoubtedly be void. On a successful A
'(
> showing the order proposing substantial modifications
and designating the land of the appellants for educational
use under Section 12 (2) (o) of the Act has been made
without the State Government applying its mind to the
aspect of necessity or without forming an honest opinion 8
on that aspect, it will be ultravires and void. The appellants
will utilize the land for residential purposes. [Paras 37
)
and 40] [1075-8-F; 1076-B]
" J. Jayalalitha vs. U.0.1 AIR 1999 SC 1912; Barium
Chemicals Ltd. vs. Company Law Board AIR 1967 SC 295; c
The Income-tax Officer, Calcutta and Ors. vs. Lakhmani Mewal
Das AIR 1976 sec 1753 - relied on.
Commissioner of Police vs. Gordhandas Bhanji AIR
1942 SC 16; Mohinder Singh Gill and Anr. vs. The Chief
D
Election Commissioner, New Delhi AIR 1978 SC 851 -
referred to.
}r
Advanced Law Lexicon, by P Ramanatha Aiyar 3rd
Edition, 2005; Administrative law by Prof. Sir William Wade
(Ninth Edn.) - referred to. E
2. The Court is entitled to examine whether there has
been any material available with the State Government
and the reasons recorded, if any, in the formation of
opinion and whether they have any rational connection
with or relevant bearing on the formation of the opinion. F
( ~..,..
The Court is entitled particularly, in the event, when the
formation of the opinion is challenged to determine
whether the formation of opinion is arbitrary, capricious
or whimsical. [Para 33] [1073-E, F]
G
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 2000
of 2008
From the final Judgment and Order dated 10-15.11.2006
-' & 14.2.2007 of the High Court of Gujarat atAhmedabad in Letters
Paten? Appeal No. 1453 of 2005 & Misc. Civil Application-for H
1056 SUPREME COURT REPORTS [2008] 4 S.C.R.

Review No. 3165 of 2006 respectively
' -.

A
Ashok H. Desai, S.H. Sanjanwala, T.R. Andhyarujina and
-\
..
Dushyant Dave, Shamik Sanjanwala, R.S. Sanjanwala,
Meenakshi Arora, Dilip Kanojiya and Harsh Parekh for the
Appellants.
B
R.P. Bhat, Sumita Hazarika, Pinky Behera, Hemantika
'
Wahi, Prashant G. Desai, S.C. Patel, Tejas Patel and
Subhashish Bhowmick for the Respondents. A

The Judgment of the Court was delivered by "'
c
B. SUDERSHAN REDDY, J. 1. Leave granted.
2. This appeal by special leave is directed against the
common judgment and order dated 10-15th November, 2006 of
the Gujarat High Court at Ahmedabad in LPA No. 1453 of 2005
D and Miscellaneous Civil application - for Review No. 3165 of
2006 dated 14th February, 2007; whereby the High Court
dismissed the cross-objections filed by the appellants in LPA 1 -{
No.·1453 of 2005. Essentially grievance in this appeal pertains
to the dismissal of cross objections preferred by the appellants.
E 3. The Gujarat Town Planning and Urban DevelopmentAct,
1976 (for short 'the said Act') came into force with effect from
February 1st,· 1978. The State Government in exercise of its
power conferred under the provisions of the Act constituted Surat
Urban Development Authority (SUDA) which prepared a draft
F development plan whereby the lands belonging to the appellants
were proposed for designating the use of the lands for residential ~j
purposes. The State Government having considered the draft
development plan submitted by SUDA sanctioned the plan in
the modified form on January 31, 1986 whereby the appellants'
G lands in question were reserved for "education complex of South
Gujarat University". The fin81 development plan was accordingly
brought into force with effect from March 31, 1986. Neither the
Area Development Authority nor the Authority for whose purpose
land has been designated in the final Development Plan initiated
H any steps to acquire the lands of the appellants. The appellants
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1057
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]

having waited for a period of 1O years from the date of coming A
into force of the final development plan got served a notice on
the Authority concerned requiring it to acquire the land within
six months from the date of the service of such notice. However,.
no steps were taken by any of the authorities proposing to
acquire the lands. Instead SUDA in purported exercise of its B
power under Section 21 of the Act sought to revise the
). development plan by reserving the lands in question once again
for education complex of South Gujarat University.
4.-The appellants challenged re-reservation of the lands
for South Gujarat University on various grounds which ultimately C
culminated in the judgment of this court in Bhavnagar
University vs. Palitana Sugar Mill (P) Ltd. and others 1 .
This court in clear and categorical terms laid down that Section
21 .of the Act may impose statutory obligations on the part of the
State and the appropriate authority to revise the development D
plan but under the grab of exercising the power to revise the
development plan "the substantial right conferred upon the owner
of the land or the person interested therein" cannot be taken
away. It is observed :
"Para 38. Section 21 does not envisage that despite the E
fact that in terms of sub-section (2) of section 20, the
designation of land shall lapse, the same, only because a
. draft revised plan is made, would automatically give rise
to revival thereof. Section 20 does not manifest a
'~ legislative intent to curtail or take away the right acquired F
by a landowner under Section 22 of getting the land
defreezed ... ...... "
5. The revised development plan submitted by SUDA was
awaiting the sanction of the State Government. The State G
Government in exercise of powers conferred by the proviso to
sub-clause (ii) of clause (a) of Section 17(1) of the Act proposed
modifications in the draft revised development plan submitted

1
(2003)2 sec 111 H
\
1058 SUPREME COURT REPORTS [2008] 4 S.C.R.

A by SUDA and proposed to designate the land under Section
12(2)(0) for "educational use". The appellants challenged the
action on the part of State Government in issuing notification
dated July 22, 2004 on various grounds. During the pendency
of the Writ Petition the State Government came out with final
s notification dated September 28, 2004 designating the land in
question for educational use under Section 12(2)(0) of the Act.
The appellants sought the leave of the court to challenge the
said notification also. The final notification was set aside on the
ground that there was no material before the Government on
c the basis of which the decision to designate the lands for
educational purposes could have been arrived at. The matter
was remitted for fresh consideration in the light of the
observations and the directions issued by the High Court.
6. We have heard Shri Ashok H. Desai and Shri T.R.
D Andhyarujina, learned senior counsel appearing for the
appellants, Shri R. P. Bhatt, learned senior counsel for the State
Government and Shri Prashant G. Desai, learned counsel for
1-
SUDA. The contention of the learned counsel for the appellants
was that on a true interpretation of the provisions of the said Act
E it was n.ot open to the Government to designate the land in
question as education zone and secondly assuming that there
is such a power, the exercise of the said power by the
preliminary Notification dated 22nd July, 2004 and final
Notification dated 28th September, 2004 is not legal and bona
F fide particularly in the light of the fact that the earlier reservation
for a ·similar though not identical purpose, namely, education
complex of South Gujarat University was struck down by the
Supreme Court in Bhavnagar University (supra).
7. The submission on behalf of the State Government was
G that the preliminary notification issued by the Government with
a proposal to use the land for educational purpose under section
12(2)(0) of the Act is in conformity with the powers and the
objects sought to be served. The power of the State Government
under Section 17(1 )(a) is very wide. It is entitled either to sanction
H the draft development plan as submitted by the Authority or return
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1059
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]

j the draft development plan for modification or make substantial A
'1
modifications in the draft development plan by itself after inviting
suggestions and objections. The Notification dated 22nd July,
2004 merely invited suggestions and objections on the proposed
use of the land for educational purposes. It was further submitted
that under Section 12(2)(0) of the Act the State Government can B
make proposals for public or other purposes which have not
been mentioned in sub-clause (a) to (n) of Section 12(2).
~
Therefore the State Government can propose reservations for
)>'
public purpose or can make designation of land for any purposes
not mentioned in sub-clause (a) to (n). It was submitted that the c
provisions of Section 17(2), 20(1) and 20(2) are not applicable
in the appellants' case since these provisions relate to the lands
kept for reservation for the purpose of Area Development
authority or any other Authority for whose purpose the land is
reserved. This is not a case of reservation affecting the rights of
D
the appellants in any manner who are still entitled to develop
.. f the land in accordance with the earmarked use/proposals.
8. Learned counsel for Surat Urban Development Authority
while adopting the. submissions made by the counsel for the
State Government contended that the State Government and E
Urban Development Authority has power to create separate
zone under section 12(2)(0) of the Act.

9. We shall deal with the second contention, namely,
whether the exercise of power by the State Government is legal
and bona fide? This issue is required to be considered in the F
I 'ry
background of the relevant facts which are evident from the
record.

10. The Urban Development Authority designated the
present lands as part of the residential zone in the development
G
plan and submitted the same on 30 1h April, 1981 for sanction to
the State Government. The State Government by issuing
notification under the proviso to sub-clause (ii) of clause (a) of
-\ sub-section (1) of Section 17 deleted the same from residential
zone and the lands were sought to be reserved for education
H
1060 SUPREME COURT REPORTS [2008] 4 S.C.R.

A complex of "South Gujarat University". The said plan was ....
~
sanctioned under Section 17 of the Act on 3rd March, 1986. The
appellants after expiry of period of 10 years gave notice under
sub-section (1) of Section 20 calling upon the authority to acquire
the land. Nothing happened in the matter.
B 11. In the meanwhile, SUDA prepared and published the
draft revised development plan in respect of the lands under .;

Section 13 of the Act once again reserving the land for education ).

complex of South Gujarat University. Notice regarding
publication of the draft revised development plan calling "
c suggestions on the proposed draft revised development plan
was published in the Gazette on 29.2.1996. This was done in
purported exercise of the power under Section 21 of the Act
·whereunder the development authority is under statutory
obligation to revise the development plan at least once in 10
D years from the date on which the final development plan comes
into force.
12. The appellants filed writ petitions in the High Court of
Gujarat challenging the action re-reserving the land in the draft
1'
...
revised development plan for the same purpose namely
E education complex of South Gujarat University. The lis ultimately
culminated in the judgment of this Court in Bhavnagar University
(supra). This court held that:
(i) Section 21 of the Act does not and cannot mean that
F substantial right conferred upon the owner of the land or
the person interested therein shall be taken away. It is not ~
and cannot be the intention of the legislature that what is
given by one hand should be taken away by the other.
(ii) It is further held that the statutory interdict of use and
G enjoyment of the property must be strictly construed. It is
well settled that when a statutory authority is required to
do a thing in a particular manner, the same must be done
in that manner or not at all. The State and other authorities )._

while acting under the said Act are only creature of statute.
H They must act within the four corners thereof.
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1061
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]

..,J (iii) It is further held that inspite of statutory lapse of A
designation of the land, the State is not denuded of its
power of eminent domain under the general law, namely,
the Land Acquisition Act in the event an exigency arises
therefore.
13. The State Government unmindful of and undaunted by B
the judgment of this court proposed to modify the draft revised
J
development plan already submitted by the authority in purported
t exercise of the power conferred by the proviso to sub-clause
(ii) of clause (a) of sub-section (1) of Section 17 of the Act by
designating the land for educational use under Section 12(2)(0) c
of the Act. The Government having considered the objections
issued final notification dated 28 1h September, 2004 confirming
modifications proposed in the preliminary notification.
14. The appellants filed a writ petition in the High Court of
D
Gujarat challenging the preliminary notification as well as the
~
' final notification on various grounds.
15. The High Court upon perusal of the records found that
there is absolutely no material on record except the noting of
the Minister concerned suggesting change of use of the land to E
education zone. The. suggestion of the Chief Town Planner to
place the entire area in residential zone has been ignored. The
Area Development Authority in the first instance has suggested
that the land in question be placed in residential zone. In the
., note prepared and placed before the Minister concerned on 23 F
April, 2004 it was suggested that the land should no more be
reserved for the purpose of South Gujarat University and should
be placed in appropriate zone. The note further suggested that
after releasing the lands from reservation, the same should be
placed under residential zone. On 21.7.2004 the Minister
G
concerned passed the order which reads as under:
" .. Reservation may be cancelled as suggested. However,
-J.._ (for the lands which are being de-reserved) educational
zone in terms of Section 12(2)(0) of the Gujarat Town
Planning and Urban Development Act be provided and H
1062 SUPREME COURT REPORTS [2008] 4 S.C.R.
~
f
'
A notice be issued accordingly.. " '4 .... /.
16. It was pursuant to this direction, the preliminary ~
notification dated 22nd July, 2004 came to be issued by the
Government calling for objections and suggestions against the
proposed substantial modifications of the development plan.
B '
j
Point for consideration : .;

,l
17. Whether the action of the State Government in issuing
~
preliminary notification and the final notification designating the
said lands for educational use is valid? Whether the action is
c ultra vires?
I
I
18. Before we address ourselves to the questions for their I

determination it would be appropriate to notice Sections 17 and
21 which are as under:
D 11
Section 17 (1) (a) : On receipt of the draft development )-

plan under Section 16, the State Government may, by 1 f.
i
notification, -
(i) sanction the draft development plan and the regulation
so received , within the prescribed period, for the
-E whole of the area covered by the plan or separately
\-
'
:
for any part thereof, either without modification, or
~
subject to such modification, as it may consider
proper; or

F (ii) return the draft development plan and the regulations
~
to the area development authority or, as the case
may be, to the authorized officer, for modifying the
plan and the regulations in such manner as it may
direct:
G Provided that, where the State Government is of opinion
that substantial modifications in the draft development plan
and regulations are necessary, the State Government may,
instead of returning them to the area development authority, )-
as the case may be, the authorised officer under this sub-
H clause, publish the modifications so considered necessary ~
• BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]
1063

in the Official Gazette alongwith a notice in the prescribed A
~- manner inviting suggestions or objections from any person
with respect to the proposed modifications within a per'iod
of two months from the date of publication of such notice;
or
(iii) refuse to accord sanction to the draft development 8
plan and the regulations and direct the area
development authority or the authorized officer to
f
prepare a fresh development plan under the
provisions of this Act.
c
(b) Where a development plan and regulations are returned
to an area development authority, or, as the case may be, .
the authorized officer under sub-clause (ii) of clause (a),
the area development authority, or, as the case may be,
the authorized officer, shall carry out the modifications
D
therein as directed by the State Government and then
., submit them as so modified to the State Government for
sanction; and the State Government shall thereupon
sanction them after satisfying itself that the modification
suggested have been duly carried out therein.
E
(c) Where the State Government has published the
modification considered necessary in a draft development
plan as required under the proviso to sub-clause (ii) of
clause (a), the State Government shall, before according
sanction to the draft development plan and the regulations, F
take into consideration the suggestions or objections that
'-·--r may have been received thereto, and thereafter accord
sanction to the drafts development plan and the regulations
in such modified form as it may consider fit.
(d) The sanction accorded under a [clause (a), clause (b)] G
or clause (c) shall be notified by the State Government in
the Official Gazette and the draft development plan together

.._~
a These words, brackets and letters were substituted for the word,
brackets and letter "clause (b)" by Guj.2of1999, s.7(1 ). H
1064 SUPREME COURT REPORTS [2008) 4 S.C.R.

A with the regulaUons so sanctioned shall be called the final
development plan. ··~

(e) The final development plan shall come into force on
such date as the State Government may specify in the
notification issued under clause (d):
B
Provided that the date so specified shall not be earlier
than one month from the date .of publication of such
notification. ~

(2) Where the draft development .plan submitted by an
c area development authority, as the case may be, the
authorized officer contains any proposals for the
reservation of any land for a purpose specified in clause
(b) or J3 [clause (n) or clause (o)] of sub-sectiori (2) of section
12 and such land does not vest in the area development
D authority, the State Government shall not include the said
reservation in the development plan, unless it is satisfied ·~
r
that such authority would acquire the land, whether by -.
agreement or compulsory acquisition, within ten years from
the date on which the final development plan comes into
E force.
(3) A final development plan which has come into force
; ·,
shall, subject to the provisions of this Act, be binding on _,
the area development authority concerned and on all other
authorities situated in the area of the development plan. \,-
F
'
(4) After the final development plan comes into force, the
~~
area development authority concerned may execute any
work for developing, re-developing or improving any area
within the area covered by the plan in accordance with the
G proposals contained in the development plan.
Section 21. Atleast once in ten years from the date on
which a final development plan comes into force, the area

J3 These words, brackets and letters were substituted for the word, brackets ~
H and letter "clause (n)" by Guj. 2 of 1999, s. 7(2).
I
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1065
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]

development authority shall revise the development plan A
. t-
<

after carrying out, if necessary, a fresh survey and the
provisions of sections 9 to 20, shall, so far as may be,
apply to such revision."
19. A plain reading of Section 17 suggests that on receipt
of draft development plan the stcite Government may sanction B
the draft development plan, for the whole of the area covered by
the plan or separately for any part thereof; return the draft
;, development plan for modifying the plan in such a manner as
may direct; but in cases where the State Government is of
opinion that the substantial modifications in the draft c
development plan are necessary, it may, instead of returning
them to the authority or the authorised officer, publish the
modifications so considered necessary along with the notice in
the prescribed manner inviting suggestions or objections with
respect to the proposed modifications. It may even refuse to D
accord sanction to the draft development plan and direct to
'(
prepare a fresh development plan under the provisions of the
Act. Indeed a very wide power is conferred upon the State
Government in the matter of sanctioning of the draft development
plan. In the instant case we are concerned with the action of the E
State Government in making substantial modifications in the
revised draft development plan. Section 21 of the Act mandates
that the same procedure as provided for preparation and
sanction of draft development plan including the one under
section 17 would be applicable even in respect of revision of F
development plan.

20. The State Government is entitled to publish the
modifications provided it is of opinion that substantial
modifications in the draft development plan are necessary. The
expression "is of opinion" that substantial modifications in the G
draft development plan are necessary is of crucial importance.
Is there any material available on record which enabled the State
Government to form its opinion that substantial modifications in
---~
the draft development plan were necessary? The State
Government's jurisdiction to make substantial modifications in H
...:.,

1066 SUPREME COURT REPORTS [2008] 4 S.C.R.

A the draft development plan is inter-twined with the formation of
its opinion that such substantial modifications are necessary in -1_
the draft development plan. The State Government without
forming any such opinion cannot publish the modifications
considered necessary along with notice inviting suggestions or
B objections. We have already noticed that as on the day when
the Minister concerned took the decision proposing to designate
the land for educational use the material available on record
were: ,..
(a) the opinion of the Chief Town Planner;
c
(b) Note dated 23rd April, 2004 prepared on the basis of
the record providing the entire background of the previous
litigation together with the suggestion that the land should
no more be reserved for the purpose of South Gujarat
University and after releasing the lands from reservation,
D
the same should be placed under the residential zone,
21. It is true the State Government is not bound by such
opinion and entitled to take its own decision in the matter
provided there is material available on record to form opinion
E that substantial modifications in the draft development plan were
necessary. Formation of opinion is a condition precedent f~r
setting the law in motion proposing substantial modifications in
the draft development plan.
22. Any opinion of the Government to be formed is not
F subject to objective test. The language leaves no room for the
relevance of a judicial examination as to the sufficiency of the
grounds on which the Government acted in forming its opinion.
But there must be material based on which alone the State
Government could form its opinion that it has become necessary
G to make substantial modification in the draft development plan.
23. The power conferred by Section 17(1 )(a) (ii) read with
proviso is a conditional power. It is not an absolute power to be
exercised in the discretion of the State Government. The
H condition is formation of opinion - subjective, no doubt - that it
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1067
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]

had become necessary to make substantial modifications in A
the draft development plan. This opinion may be formed on the
basis of material sent along with the draft development plan or
on the basis of relevant information that may be available with
the State Government. The existence of relevant material is a
pre-condition to the formation of opinion. The use of word "may" s
indicates not only a discretion but an obligation to consider that
a necessity has arisen to make substantial modifications in the
draft development plan. It also involves an obligation to consider
which are of the several steps specified in sub-clauses (i), (ii)
and (iii) should be taken. \ ~ c
24. Proviso opens with the words "where the State
Government is of opinion that substantial modifications in the
draft development plan and regulations are necessary ........ "
These words are indicative of the satisfaction being subjective
one but there must exist circumstances stated in the proviso D
which are conditions precedent for the formation of the opinion.
Opinion to be formed by the State Government cannot be on
imaginary grounds, wishful thinking, however, laudable that may
be. Such a course is impermissible in law. The formation of the
opinion, though subjective, must be based on the material E
disclosing that a necessity had arisen to make substantial
modifications in the draft development plan.
25. The formation of the opinion by the State Government
.-, is with reference to the necessity that-may have had arisen to
make substantial modifications in the draft development plan. F
The expression: "so considered necessary" is again of crucial
importance. The term "consider'' means to think over; it connotes
that there should be active application of the niind. In other words
the term "consider" postulates consideration of all the relevant
aspects of the matter. A plain reading of the relevant provision G
suggests that the State Government may publish the
~ modifications only after consideration that such modifications
have become necessary. The word "necessary" means
indispensable, requisite; indispensably requisite, useful,
incidental or conducive; essential; unavoidable; impossible to H
1068 SUPREME COURT REPORTS [2008) 4 S.C.R.
_, .,.
A be otherwise; not to be avoided; inevitable. The word
"necessary" must be construed in the connection in which it is .
used. (See-Advanced Law Lexicon, 3rd Edition, 2005; P.
Ramanatha Aiyar)
•
26. The formation of the opinion by the State Government
B should reflect intense application of mind with reference to the
.).
material available on record that it had become necessary to
propose substantial modifications to the draft development plan.
27. In J. Jayalalitha Vs. U.0.1 2 this Court while construing
c the expression "as may be necessary" employed in Section 3
(1) of the Prevention of Corruption Act, 1988 which conferred
the discretion upon the State Government to appoint as many
Special Judges as may be necessary for such area or areas or
for such case or group of cases to try the offences punishable
under the Act, observed:
D ~r

"The legislature had to leave .it to the discretion of the
Government as it would be in a better position to know the
requirement. Further, the discretion conferred upon the
Government is not absolute. It is in "The nature of a statutory
E obligation or duty. It is the requirement which would
necessitate exercise of power by the Government. When
a necessity would arise and of what type being uncertain
the legislature could not have laid down any other guideline
except the guidance of "necessity". It is really for that reason
~
F that the legislature while conferring discretion upon the
Government has provided that the Government shall
appoint as many Special Judges as may be necessary.
The words "as may be necessary" in our opinion is the
guideline according to which the Government has to
exercise its discretion to achieve the object of speedy
G
trial. The term "necessary" means what is indispensable,
needful or essential." }--

28. In the case in hand, was there any material before the

2 AIR 1999SC 1912
H
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1069
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]
,_
..;
State Government for its consideration that it had become A
necessary to make substantial modifications to the draft
development plan? The emphatic answer is, none. The record
does not reveal that there has been any consideration by the
State Government that necessity had arisen to make substantial
modifications to the draft development plan. We are of the view B
that there has been no formation of the opinion by the State
' i
Government which is a condition precedent for exercising the
~
power under the proviso to Section 17 (1) (a) (ii) of the Act.

29. In Barium Chemicals Ltd. Vs. Company Law
Board 3 this Court pointed out, on consideration of several c
English and Indian authorities that the expressions "is satisfied",
is of the opinion" and "has reason to believe" are indicative of
subjective satisfaction, though it is true that the nature of the
power has to be determined on a totality of consideration of all
the relevant provisions. This Court while construing Section 237 D
of the Companies Act, 1956 held:
"64. The object of s. 237 is to safeguard the interests of
those dealing with a company by providing for an
investigation where the management is so conducted as
to jeopardize those interests or where a company is floated E
for a fraudulent or an unlawful object. Clause (a) does not
create any difficulty as investigation is instituted either at
the wishes of the company itself expressed through a
--1
special resolution or through an order of the court where
a judicial process intervenes. Clause (b), on the other F
hand, leaves directing an investigation to the subjective
opinion of the government or the Board. Since the
legislature enacted s. 637 (i) (a) it knew that government
would entrust to the Board its power under s. 237 (b).
Could the legislature have left without any restraints or G
limitations the entire power of ordering an investigation to
------\ the subjective decision of the Government or the Board ?
There is no doubt that the formation of opinion by the

3
AIR 1967 SC 295 H
1070 SUPREME COURT REPORTS [2008] 4 S.C.R.

A Central Government is a purely subjective process. There
can also be no doubt that since the legislature has provided
for the opinion of the government and not of the court such
an opinion is not subject to a challenge on the ground of
propriety, reasonableness or sufficiency. But the Authority
B is required to arrive at such an opinion from circumstances
suggesting what is set out in sub-clauses (i},. (ii) or (iii). If ·-
·.-----
these circumstances were not to exist, can the government
still say that in its opinion they exist or can the Government
say the same thing where the circumstances relevant to
c the clause do not exist ? The legislature no doubt has
used the expression "circumstances suggesting". But that·
expression means that the circumstances need not be
such as would conclusively establish an intent to defraud
or a fraudulent or illegal purpose. The proof of such an
intent or purpose is still to be adduced through an
0
investigation. But the expression "circumstances
suggesting" cannot support the construction that even the·
existence of circumstances is a matter of subjective
opinion. That expression points outthat there must exist
.E . circumstances from which the Authority forms an opinion
that they are suggestive of the crucial matters set out in
the thre·e sub'."clauses. It is hard to contemplate that the
legislature could have left to the subjective process both
th_e formation of opinion and also the existence of
Circumstances on which it is to be founded. It is also not
reasonable to say that the clause permitted the Authority
to say that it has formed the opinion on circumstances
which in its opinion exist and which in its opinion suggest
ari intent to defraud or a fraudulent or unlawful purpose. It
is equally unreasonable to think that the legislature could
G have abandoned even the small safeguard of requiring
the opinion to.be founded on existent circumstances which
suggest the things for which an investigation can be
· ordered and left the opinion and even the existence of
circumstances from which it is to be formed to a subjective
H process. These analysis finds &upp.ort in Gower's Modern
·..t" ,..~ ~·-
llf.\J' . .
BHIKHUBHAI VITHLABHAI PATEL & ORS; v. STATE OF 1071
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]
.., ~
Company Law (2nd Ed.) p. 547 where the learned author, A
while dealing with s. 165(b) of the English Act observes
·that "the Board of Trade will· always exercise its
discretionary power in the light of specified grounds for an
appointment on their own motion" and that "they may be
. trusted not to appoint unless the circumstances warrant it B
but they will· test the need on the basis of public and
A
commercial. morality." There must. therefore exist
~
circumstances which in the opin.ion of the Authority suggest
what has been set out in sub-clauses (i), (ii) or (iii). If it is
shown that the circumstances do not exist or that they are c
such that it is impossible for any· one· to form an opinion
. therefrom suggestive of the aforesaid things, the opinion
is challengeable on the ground of non-application of mind
or perversity or on the ground that it was formed on
coUateral grounds and was beyond the scope of the statute.
0
1
30. This Court.while expressly referring to the expressions
such as "reason .to believe", "in the opinion of' observed:
"Therefore, the words, "reason to believe" or ''in the opinion of'
do not always lead to the construction that the process of
entertaining "reason to believe" or ''the opinion" is an altogether E
subjective to process not lending itself even to a limited scrutiny ·
by the court that such "a reason to believe" or "opinion" was not
formed on relevant facts or within the limits or as Lord Radcliffe.
and Lord Reid called the restraints ofthe statute. as an alternative
.--, safeguard to rules of natural justice where the function is
F
administrative".

31. In the Income-tax Officer, Calcutta & Ors. Vs.
Lakhmani .Mewal Das4 this court construed the expressions
"reason to believe" employed in Section 147.of the Income-tax
Act, 1961 and observed: the reasons for the formation of the G
belief must have a rational connection with or relevant bearing
-4 on the formation of the belief. Rational connection postulates
that there must be a direct nexus or live link between the material
4
·AIR (1976) sec 11s3
H
1072 SUPREME COURT REPORTS [2008] 4 S.C.R.

A coming to the notice of the Income-tax Officer and the formation -\ """
of his belief that there has been escapement of the income of
the assessee from assessment in the particular year because
of his failure to disclose fully or truly all material facts. It is not
any or every material, howsoever vague and indefinite or distant
B which would warrant the formation of the belief relating to
escapement of the income of the assessee from assessment.
>
The reason for the formation of the belief must be held in good
faith and should not be a mere pretence. "'
32. We are of the view that the construction placed on the
c expression "reason to believe" will equally be applicable to the
expression "is of opinion" employed in the proviso to Section
17 (1) (a) (ii) of the Act. The expression "is. of opinion", that
substantial modifications in the draft development plan and
regulations, "are necessary", in our considered opinion, does
D not confer any unlimited discretion on the Government. The
r
discretion, if any, conferred upon the State Government to make
substantial modifications in the draft development plan is not
unfettered. There is nothing like absolute or unfettered discretion
and at any rate in the. case of statutory powers. The basic
E principles in this regard are clearly expressed and explained
by Pro(. Sir William Wade in Administrative law (Ninth Edn.) in
the chapter entitled 'abuse of discretion'· and under the general
heading 'the principle of reasonableness' which read as under:·
"The common theme of all the authorities so far mentioned
F ....-..
is that the notion of absolute or unfettered discretion is )

rejected. Statutory power conferred for public purposes is
. conferred as it were upon trust, not absolutely - that is to
say, it can validly be used only in the rightand proper way
which Parliament when conferring it is presumed to have
G intended. Although the Crown's lawyers have argued in'
numerous cases that unrestricted. permissive language
confers unfettered discretion, the truth is that, in a system
based on the rule of law, unfettered governmental
discretion is a contradiction in terms. The real question is
H whether the discretion is wide or narrow, and where the
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1073
GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]
_.,. >--
legal line is to be- drawn. For this purpose everything A
depends upon the true intent and meaning of the
empowering Act.
The powers of public authorities are therefore essentially
different from those of private persons. A man making his
will may, subject to any rights of his dependents, dispose B
..I of his property just as he may wish. He may act out of
). malice or a spirit of revenge, but in law this does not affect
his exercise of his power. In the same way a private person
has an absolute power to allow whom he likes to use his
land, to release a debtor, or, where the law permits, to c
evict a tenant, regardless of his motives. This is unfettered
discretion. But a public authority may do none of these
things it acts reasonably and in good faith and upon lawful
and relevant grounds of public interest. The whole
conception of unfettered discretion is inappropriate to a D
public authority, which possesses powers solely in order
that it may use them for the public good ... There is nothing
paradoxical in the imposition of such legal limits. It would
indeed be paradoxical if they were not imposed."
33. The Court is entitled to examine whether there has been E
any material available with the State Government and the
reasons recorded, if any, in the formation of opinion and whether
they have any rational connection with or relevant bearing on
•
-1 the formation of the opinion. The Court is entitled particularly, in
the event, when the formation of the opinion is challenged to F
determine whether the formation of opinion is arbitrary,
capricious or whimsical. It is always open to the court to examine
the question whether reasons for formation of opinion have
rational connection or relevant bearing to the formation of such
opinion and are not extraneous to the purposes of the statute. G
34. In the affidavit in reply filed on behalf of the State
-~
Government in the High Court, it was averred what weighed
with the State Government to exercise its power under Section
17 (1) (a) (ii) of the Act was public interest at large. The State
H
1074 SUPREME COURT REPORTS [2008] 4 S.C.R.

A government thought it fit to c;lassify the lands in question for
educational use so that there is a specific pocket of educational
institutional area in the fast developing city of Surat where its
population in. the last decade, has almost doubled. If such
educational institutional pockets in the adjoining land, where
· B there already exists the complex of South Gujarat University,
are not ensured in the development plan of the city like Surat, ).

then, in that case, land would not be available in future. This
would resultantly make people to travel long distance from the
city area for educational purpose. Public interest parameter is
·C undoubtedly a valid consideration that could have been taken
into ace.cunt by the State Government. But this aspect of the
matter is stated for the first time in the affidavit in reply and is
not born out by the record. There is nothing on record suggesting
as .to what public interest parameter weighed with the State
D Government. The question is: was there any material available
"f
on record in support of what has been pleaded in the reply
affidavit?
. 35. Be that as it may, the impugned preliminary notification
itself does riot reflect formation of any opinion by the State
E Government that it had become necessary to make substantial
modifications in the draft development plan and, for that reason,
in~tead of returning in the plan, decided to publish the
modifications so considered necessary in the Official Gazette
along with the notice inviting suggestions or objections with
F respect to the proposed modifications. It is very well settled,
public orders publicly made, in exercise of a statutory authority,
cannot be construed in the light of explanations subsequently
given by the decision .making authority. Public orders made by
authorities are meant to have public effect and must be
G construed objectively with reference .to the language used in
the order itself. (See - Gordhandas Bhanji 5 and Mohinder
Singh Gill & Anr. Vs. The Chief Election Commissioner,
New Delhi 6 ).
5 AIR 1952 SC 16
6
H AIR 1978 SC 851
BHIKHUBHAI VITHLABHAI PATEL & ORS. v. STATE OF 1075 \

GUJARAT & ANR. [B. SUDERSHAN REDDY, J.]

36. Neither the preliminary notification itself nor the records A
.. ~ disclose the formation of any opinion by the State Government
much less any consideration that any necessity as such had
arisen to make substantral modifications in the draft
development plan.
37. On consideration of the facts and the material available B
on record, it is established that the State Government took the
action proposing to make substantial modifications to the plan
)..
without forming of any opinion, which is a condition precedent
J
for the use of power under proviso to Section 17(1 )(a)(ii). The
power, to restrict the use of land by the owners thereof, is a c
drastic power. The designation or reservation of the land and
its use results in severe abridgment of the right to property.
Statutory provisions enabling the State or its authorities to
impose restrictions on the right to use one's own land are
required to be construed strictly. The legislature has, it seems ·o
to us, prescribed certain conditions to prevent the abuse of
power and to ensure just exercise of power. Section 17 and
more particularly the proviso to Section 17 (1) (a) (ii) prescribes
some of the conditions precedent for the exercise of power.
The order proposing to make substantial modifications, in E
breach of any one of those conditions, will undoubtedly be void.
On a successful showing the order proposing substantial
modifications and designating the land of the appellants for
educational use under Section 12 (2) (o) of the Act has been
made without the State Government applying its mind to the F
aspect of necessity or without forming an llonest opinion on that
-~.
aspect, it will, we have no doubt, be void.
38. For the view we have taken to strike down both the
notifications and declare them ultra vires it is unnecessary to
go into various other contentions urged before us. G
39. The appellants are deprived of their right to use .the
land for residential purposes for over a period of more .than a
-..lo
quarter century. The Authority included the land in the residential
zone but the State Government reserved the land for the
H
1076 . SUPREME COURT REPORTS [2008] 4 S.C.R.

A purposes of South Gujarat University but the authority for whose ~
benefit it was required failed to acquire the land leading to re- ~

reservation of the land for the very same purpose which was
ultimately struck down by this Court in Bhavnagar U~iversity
(supra).
B 40. The present move of the State Government to
desig·nate the land for the educational use under Section 12 (2)
(o} of the Act is declared ultra vires and void and this shall put ).

an end to the controversy enabling the appellants to utilize the
land for residential purposes. The authorities including the State
c Government shall accordingly do the needful, without creating
any further hurdle in the matter.
~ 1. The appeal is, accordingly, allowed with costs.

K.K.T. . Appeal allowed .
.D
y