Holding

Notings in a departmental file are not orders, and the doctrine of legitimate expectation does not apply where a changed policy, made in public interest, lawfully defeats the appellants' claim, rendering the DDA's decision non‑arbitrary and non‑unreasonable.

Summary

The appellants, owners of two petrol pumps at Mahipalpur, claimed that the Delhi Development Authority (DDA) had a duty to relocate their outlets after a flyover project made the sites commercially unviable. The DDA’s Technical Committee and later the Screening Committee had initially recommended resettlement, but the Vice‑Chairman later rejected the proposal and the DDA adopted a new 2003 policy that allowed relocation only when the existing site was required for a planned scheme, not for loss of sales. The appellants argued that the earlier notings and the 1999 policy created a legitimate expectation of resettlement. The Supreme Court held that internal notings are not enforceable orders and do not confer rights, and that a change in policy in the public interest defeats any substantive legitimate expectation. Consequently, the DDA’s decision to refuse resettlement was not arbitrary or unreasonable. The appeal was dismissed.

Issues considered

Whether notings or recommendations in a departmental file constitute an enforceable order or legal right.
Whether the appellants had a substantive legitimate expectation of resettlement under the 1999 DDA policy.
Whether the DDA’s rejection of the resettlement request, based on the revised 2003 policy, is arbitrary, unreasonable or an abuse of power.
Whether the doctrine of legitimate expectation applies when a public authority changes policy in the public interest.

Legislation cited

Constitution of Indias. Article 14, s. Article 166(1), s. Article 21

Subjects

administrative lawexecutive ordernotingslegitimate expectationpolicy changeDelhi Development Authorityresettlementarbitrarinessjudicial review

Judgment

[2008] 14 S.C.R. 598

A MIS. SETHI AUTO SERVICE STATION AND ANR.
v.
DELHI DEVELOPMENT AUTHORITY AND ORS.
(Civil Apeal No. 6143 of 2008)
OCTOBER 17, 2008
B
[C.K. THAKKER AND D.K. JAIN, JJ.]

Administrative law:
Executive order - Notings in a departmental file - Na-
e ture of - Held: Notings do not have the sanction of law to be
an effective order - It is only an expression of viewpoint of an
officer for internal use of the decision making authority - It
culminates into an executable order only when it reaches and
gets approval of the final decision-making authority and is
D communicated to the person concerned - On facts, although
there were several notings recommending consideration of
appellants' case for relocation of their petrol pumps but finally
no official communication was addressed to or received by
them - Notings in the file did not confer any right upon the
E appellants. ·
Doctrine of legitimate expectation - Applicability of -
Held: Mere favourable recommendations at some level of de-
cision making process would be of no consequence - The
concept of legitimate expectation has no application where
F State action is in the public interest unless action taken
amounts to abuse of power - Person who bases his claim on
the doctrine of legitimate expectation, has to satisfy that he
relied on some representation by State and denial of that ex-
pectation worked to his detriment - On facts, principle of le-
G gitimate expectation not applicable - Decision of ODA in de-
clining request of appellants, for resitement of petrol pumps
due to construction of flyover, was not arbitrary or unreason-
able.

H 598
MIS. SETHI AUTO S. STATION & ANR. v. DELHI 599
DEVELOPMENT AUTH. & ORS.
~--~ The writ petitioners-appellants owned petrol outlets A
adjacent to each other, located at NH-8, Mahipalpur, New
Delhi since 1994. The land for the said purpose was allot-
ted by the Airport Authority of India (AAI). The petrol pumps
were allotted by the two oil companies, IOC and HPCL to
the appellants. B
\·
In the year 1999, a proposal was formulated for con-
·t ' struction of an Eight-lane Express Highway between
Delhi and Gurgaon, including construction of flyover/grid
separator at Mahipalpur crossing, where the two petrol
pumps in question were located. c
The two oil companies approached DOA for
resitement of the petrol pumps on account of economic
unviability pointing out that after the completion of con-
struction of grid separator, all vehicles would cross over
D
the separator and would not have access to the two petrol
>- pumps in question. The State Level Coordinator (Oil In-
dustry) also wrote to the DOA supporting the claim of ap-
pellants.
The Technical Committee of DOA on 28.4.2002 rec- E
om mended relocation/resitement and on 17 .5.2002, a pro-
posal for allotment of alterative sites was referred to and
considered by the Screening Committee of DOA at its
meeting held on 21.11.2003, when the proposal for allot-
ment of two alternative sites was approved. However, F
,._.\.
~ when the matter was finally taken up by the Screening
Committee of DOA on 28.11.2003, the proposal for reloca-
tion was disapproved and instead the Commissioner
(Planning) was directed to enquire and submit a report
as to why the two petrol pump sites, earmarked for the
G
appellants, were not auctioned. The recommendation of
~-
the Screening Committee was considered by the Vice
Chairman of DOA, who rejected the proposal for reloca-
tion of the two petrol pumps in question .
.
The appellants filed writ petitions before the High H
600 SUPREME COURT REPORTS [2008] 14 S.C.R.

A Court wherein it was held that the appellants could not
claim an enforceable right merely on the basis of the pro-
posal leading to the recommendation by the Technical
Committee as it did not amoun.t to an order or decision of
the DOA, particularly when its competent authority re-
8 jected the request of the appellants. It also observed that
at best the appellants had a mere expectation of being
considered for re-sitement and that the ODA had acted
fairly and reasonably in rejecting appellants' prayer for
re-sitement. Accordingly, both the writ petitions were dis-
c missed. Hence the instant appeal.
Dismissing the appeal, the Court
HELD: 1.1. It is trite to state that notings in a depart-
mental file do not have the sanction of law to be an effec-
D tive order. A noting by an officer is an expression of his
viewpoint on the subject. It is no more than an opinion by
an officer, for internal use and consideration of the other
officials of the department and for the benefit of the final
decision-making authority. The internal notings are not
meant for outside exposure. Notings in the file culminate
E into an executable order, affecting the rights of the par'."
ties, only when it reaches the final decision-making au-
thority in the department; gets his approval and the final
order is communicated to the person concerned. [Para
12] [609-H; 610-A-B]
F
PT R. Exports (Madras) Pvt. Ltd. & Anr. v. Union of India L
-~
_..._
. '
& Ors. (1996) 5 SCC 268; Howrah Municipal Corporation &
·Ors. v. Ganges Rope Co. Ltd. & Ors. (2004) 1 SCC 663;
Bachhittar Singh v. The State of Punjab (1962) Supp 3 SCR
v
G 713; Laxminarayan R. Bhattad & Ors. State of Maharashtra
& Anr. (2003) 5 SCC 413 - referred to.
1.2. The recommendation of the Technical Commit-
tee of the DOA did not fructify into an order conferring
legal right upon the appellants. The note records that the
H proposals for re-sitement were not finally approved. The -.
M/S. SETHI AUTO S. STATION & ANR. v. DELHI 601
DEVELOPMENT AUTH. & ORS.

- -1 High Court observed that the note dated 21.11.2003 along A
with the inspection report and the proposal for re-sitement
was put up before the Commissioner (LB) who, on
9.9.2004 recorded that these petrol pumps were allotted
on the land of Airport Authority of India and there was no
responsibility on the part of the DOA to bear any cost or 8
to carry out resitement for such sites given by any other
-} land owning agency and which were being effected by a
(
project' which is being done by a third agency, the Na-
).-
tional Highway Authority of India, with which DOA has no
links and therefore, irrespective of the impact of the pro- c
posed Express Way on these petrol pump sites, there was
no reason for DOA to take the responsibility of resitement
of these petrol pump sites and the oil companies con-
cerned may either participate in the auction process or
obtain private plots for the purpose of carrying out their
D
business. Thus, it is manifest that although there were
I' several notings, which recommended consideration of
the appellants' case for relocation but finally no official
communication was addressed to or received by the ap-
pellants accepting their claim. After the recommendation
of the Technical Committee, the entire matter was kept E
pending; in the meanwhile a new policy was formulated
and the matter was considered afresh later in the year
2004, when the proposal was rejected by the Vice Chair-
man, the final decision making authority in the hierarchy.
[Paras 15, 17] [611-A-E-F-G-H; 612-8-C-E-F] F
..,# ~

De Smith's Judicial Review Sixth Edition - referred to.
2.1. Mere favourable recommendations at some level
of the decision making process are of no consequence
and shall not bind the DOA. A case for applicability of the G
doctrine of legitimate expectation, arises when an admin-
·-'f istrative body by reason of a representation or by past
practice or conduct aroused an expectation which it
would be within its powers to fulfill unless some overrid-
ing public interest comes in the way. However, a person H
602 SUPREME COURT REPORTS [2008] 14 S.C.R.

A who bases his claim on the doctrine of legitimate expec- -(~--
tation, in the first instance, has to satisfy that he has re-
lied on the said representation and the denial of that ex-
pectation has worked to his detriment. The Court could
interfere only if the decision taken by the authority was
B found to be arbitrary, unreasonable or in gross abuse of
power or in violation of principles of natural justice and
not taken in public interest. But a claim based on mere
legitimate expectation without anything more cannot ipso
facto give a right to invoke these principles. [Paras 17, 27]
C [612-G; 617-C-E]
2.2. It is well settled that the concept oflegitimate ex-
pectation has no role to play where the State action is as
a public policy or in the public interest unless the action
taken amounts to an abuse of power. The court must not
D usurp the discretion of the public authority which is em-
powered to take the decisions under law and the court is
expected to apply an objective standard which leaves to
the deciding authority the full range of choice which the
legislature is presumed to have intended. Even in a case
E where the decision is left entirely to the discretion of the
deciding authority without any such legal bounds and if
the decision is taken fairly and objectively, the court will
not interfere on the ground of procedural fairness to a
person whose interest based on legitimate expectation
F might be affected. Therefore, a legitimate expectation can
at the most be one of the grounds which may give rise to
judicial review but the granting of relief is very much lim-
ited. [Para 27] [617-C to H; 618-A]
Food Corporation of India v. Mis Kamdhenu Cattle Feed
G Industries (1993) 1 SCC 71; Union of India & Ors. v. Hindustan
Development Corporation & Ors. (1993) 3 SCC 499; National
Buildings Construction Corporation v. S. Raghunathan & Ors.
(1998) 7 SCC 66; Punjab Communications Ltd. v. Union of
India & Ors. (1999) 4 SCC 727; Bannari Amman Sugars Ltd.
H v. Commercial Tax Officer & Ors. (2005) 1 SCC 625; Jitendra
M/S. SETHI AUTO S. STATION & ANR. v. DELHI 603
DEVELOPMENT AUTH . & ORS.

Kumar & Ors. v. State of Haryana & Anr. (2008) 2 SCC 161 - A
referred to.
Council of Civil Service Unions and Ors. v. Minister for
the Civil Service (1984) 3 All ER 935; Attorney General of
Hong Kong v. Ng Yuen Shiu (1983) 2 All ER 346; Attorney
General for New South Wales v. Quinn (1990) 64 Aust LJR B
327 - referred to.
3.1. According to the 1999 guidelines, a request for
resitement on the ground of reduction in sales level be-
low the prescribed limit could be entertained by the ODA c
provided the proposal was referred by the oil company
or the Ministry. The parties are ad-idem that the cases of
both the appellants for relocation were recommended by
the two Oil Companies, viz., IOC and HPCL, on account
of expected fall in sales because of the construction of
0
the flyover and grid separator. However, before a final
decision on the representation of the appellants could be
taken, the policy of the DOA underwent revision in the year
. 2003. The criterion for allotment of land by the ODA for
resitement of existing petrol pumps was changed. Under
the new policy resitement of a petrol pump etc. was pos- E
sible only when the existing petrol pump was utilized for
a planned project/scheme, which directly necessitated the
closing down of the petrol pump. Under the new policy,
resitement on account of fall in sales etc. was not con-
templated. In fact, resitement on any other ground was F
specifically ruled out. It is also evident from the new policy
that in the event of DOA permitting resitement, the pos-
session of the old site has to be delivered to the ODA,
which presupposes that the old site was also allotted by
the ODA. [Paras 30, 31] [618-F-G- 619-E-F] G
3.2. Apart from the fact that there was no challenge
to the new policy, which seemed to be conceived in pub-
lic interest in the light of the changed economic scenario
and liberalized regime of permitting private companies to · H
604 SUPREME COURT REPORTS [2008] 14 S.C.R.

A set up petrol outlets, the decision of the DOA in declining
to allot land for resitement of petrol pumps, a matter of
largesse, cannot be held to be arbitrary or unreasonable
warranting interference. Moreover, with the change in
policy, any direction in favour of the appellants in this re-
B gard would militate against the new policy of 2003. There-
fore, the principle of legitimate expectation has no appli-
cation to the facts at hand. [Para 32] [620-C-D-E] ·
CASE LAW REFERENCE
(1996). 5 sec 268 referred to Para 10
c .

(2004) 1 sec 663 referred to Para 10
(1962) Supp 3 SCR 713 referred to Para 13
(2003) 5 sec 413 referred to Para 14
_· o -· · (1984) 3 .All ER 935 referred to Para 19
(1983) 2 All ER 346 referred to Para 20
(1993) 1 sec 11 referred to Para 21
(1993) 3 sec 499 referred to Para 22
E . (1990) 64 Aust LJR 327 referred to Para 23
(1998) 1 sec 66 referred to Para 24
(1999) 4 sec 121 referred to Para 25
(2005) 1 sec 625 referred to Para 25
F (2008) 2 sec 1s1 referred to Para 26
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 6143
of 2008
From the final Judgment and Order dated 6.2 .2006 of the
·.. · G
High Court of Delhi at New Delhi in Letters Patent Appeal Nos.
·2715 & 2722 of 2005 ·
Arun Jaitely, R.S. Suri and Mohd. Wasay Khan for the Ap-
• p~llants .
H A. Sharan, ASG. , Vishnu B. Saharya (for Mis. Sharya &
I M/S. SETHI AUTO S. STATION & ANR. v. DELHI 605
/

DEVELOPMENT AUTH. & ORS.

Co.), H.K. Puri, S.K. Puri, V.M. Chaudhary, Priya Puri, Parijat A
Sinha, Reshmi Rea Sinha, S.C. Ghosh and Snehasish
Mukherjee for the Respondents.
The Judgment of the Court was delivered by
D.K. JAIN, J.: 1. Leave granted. B
2. This appeal is directed against a common judgment
and order rendered by the High Court of Delhi at New Delhi on
6th February, 2006 in Letters Patent Appeals No.2715 and 2722
of 2005. By the impugned order, the appeals preferred by the
two appellants herein, under Clause X of the Letters Patent have C
been dismissed.
3. The appellant firms-Mis Sethi Auto Service Station and
Mis Anand Service Station own two petrol outlets adjacent to
each other, located at NH-8, Mahipalpur, New Delhi since 1994.
0
The land for the purpose was allotted by the Airport Authority of
India (for short 'AAI') whereas the petrol pumps were allotted by
the Indian Oil Corporation (for short 'IOC') and Hindustan Pe-
troleum Corporation Limited (for short 'HPCL') to Sethi and
Anand respectively. According to the appellants, in the year E
1999, a proposal was formulated for construction of an eight-
lane express highway between Delhi and Gurgaon, including
construction of a flyover/grid separator at Mahipalpur crossing,
where the two petrol pumps in question are located. Claiming
unviability in the operation of the two petrol pumps on account
of construction of the flyover and relying on the policy framed by F
the Delhi Development Authority (for short 'the DOA') on 14th
October, 1999, the two oil companies approached the ODA,
respondent No.1 in this appeal, for "re-sitement" of both the petrol
pumps. It was claimed that, in the first instance, IOC and HPCL
had corresponded with the original allotment agency, viz. AA/, G
for re-sitement but some time in the year 2000, AAI informed
the Oil Companies that it did not have any alternative site for
allotment due to non-availability of land. The appellants also
relied on the letter issued by the National Highway Authority of
India (for short 'NHAI') confirming that the proposed dual high- H
606 SUPREME COURT REPORTS [2008) 14 S.C.R:

A. way would be developed along with the existing alignment of
NH-8 and that no access would be provided to any retail outlet
or private property along the highway. Supporting the claim of
the appellants, the State LE.~vel Coordinator (Oil Industry) also
wrote a letter to the ODA on 1Oth May, 2002, inter alia, pointing
B out that the construction work on the !~rid separator had com-
menced; after its completion, all vehictes would cross over the
separator and would not have any access to the two petrol
pumps in question for refueling thereby rendering them eco-
nomically unviable.
C 4. The stand of the appellants was that request for re-
sitement made by the two Oil Companies with the recommen-
dation of the State Level Coordinator had been considered by
the DOA; the DOA conducted its own field survey; the Technical
Committee of the DOA on 28th April; 2002 also recommended
D relocation/re-sitement and on 17th May, 2002, a proposal for
allotment of alternative sites/plots was referred to and consid-
ered by the Screening Committee of the DOA at its meeting
held on 21st November, 2003, when the proposal for allotment
of two alternative sites was approved. However, when the mat-
E ter was finally taken up by the Screening Committee of ODA on
28th November, 2003, the proposal for relocation was disap-
proved and instead the Commissioner (Planning) was directed
to enquire and submit a report as to why two petrol pump sites,
earmarked for the appellants, were not auctioned. The recom-
F mendation of the Screening Committee was considered by the
Vice Chairman of ODA, who rejected the proposal for reloca-
tion of the two petrol pumps in question.
5. Aggrieved thereby, the appellants filed writ petitions in
the Delhi High Court. It was pleaded that the State Level Coor-
G dinator as well as the DOA having recognised that the two petrol
pumps were rendered commercially unviable due to construc-
tion of the grid separator, they had a legitimate right to the allot-
ment/relocation of petrol pumps at alternative sites, in terms of
the policy of the Ministry of Petroleum and Natural Gas formu-
H lated in the year 1998 as well as the policy of the ODA of 1999.
MIS. SETHI AUTO S. STATION & ANR. v. DELHI 607
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]

~ It was urged that all the requisite conditions for such re-allot- A
ment/re-sitement were fulfilled by them and the DOA had also
recommended the allotment in May, 2002; which proposal had
also been cleared by the Technical Committee and, therefore,
the ODA was bound by the said decisions. Moreover, having
acted upon its decisions by earmarking the two sites, the deci- 8
sion to withhold allotment and include the two earmarked plots
in the proposed auction was unreasonable, irrational and arbi-·
7 trary and the mere fact that the DOA chose to sit over the rec-
4'
ommendations and did not issue formal orders of allotment
could not rob the appellants of their valuable right to such allot- c
ment. In a nutshell, the case of the appellants was that the deci-
sion taken by the DOA in the year 2002, in favour of the appel-
lants, upon consideration of all the relevant materials and fac-
tors, gave rise to substantive legitimate expectations in their
minds that the allotment for alternative sites would be made in
D
favour of the appellants. Allegations of discrimination were also
levelled against the DOA, inter a/ia, stating that six-seven named
~
petrol outlets were given alternative lands even though they were
not operating on the lands allotted by the DOA.
6. The stand of the DOA before the High Court was that its E
policy and guidelines of 1999 for re-sitement of petrol outlets
and gas godowns had been revised in June, 2003, superced-
ing all its earlier policies on the subject. As per the new policy,
re-sitement was permissible only when the land of an existing
outlet was utilized for a planned proposal/scheme directly ne- F
, ,..J cessitating its closure; as per its policy the DOA has to dispose
"i
of land for petrol outlets through competitive mode of tender or
auction and, in any case, the new policy does not contain any
provision for allotment of an alternative site for an existing petrol
pump located on private land or land allotted by other agency ·
G
such as the AAI; that the internal notings or communications
with the DOA are of no relevance and consequence till a final
-
'-J
decision was taken and communicated to the concerned par-
ties. In the present case though the proposals of other Govern-
ment Agencies were considered, no final decision was taken
H
608 SUPREME COURT REPORTS [2008] 14 S.C.R.

A and communicated by the ODA to the appellants. As regards (-
the approval by the Technical Committee or other officials, the
stand of the DOA was that till a final decision was taken by the
competent authority i.e. the Vice Chairman and communicated
to the appellants, there was no question of any vested right ac-
B cruing in favour of the appellants, merely on the basis of recom-
mendations of the officials of the DOA.
7. None of the contentions urged on behalf of the appel- t-
lants found favour with the learned Single Judge of the High
Court. The learned Judge, by a well reasoned order, came to '"
c the conclusion that the appellants could not claim an enforce-
able right merely on the basis of the proposal leading to the
recommendation by the Technical Committee as it did not
amount to an order or decision of the ODA, particularly when its
competent authority had rejected the request of the appellants.
D The learned Judge also observed that at best the appellants
had a mere expectation of being considered for re-sitement.
The stand of the DOA that in view of the fact that a new policy
had been formulated in June, 2003, it was within its right to ap-
ply the same was also found to be in order. Thus, the learned
E Judge found that the ODA had acted fairly and reasonably in
rejecting appellants' prayer for re-sitement. Accordingly, both
the writ petitions were dismissed.
8. Aggrieved by the said order, the appellants preferred
Letters Patent Appeals under Clause X of the Letters Patent as
F applicable to the High Court of Delhi. Both the appeals having r . }.__ -
been dismissed, the appellants have preferred this appeal. .
9. Mr. Arun Jaitley, learned senior counsel, appearing for
the appellants, strenuously urged that the representations of the
appellants were considered by the DOA in terms of its policy
G
dated 14th October, 1999 and its Technical Committee, headed
by the Vice.Chairman himself, had found the appellants to be
v
eligible and on 281h November, 2002 recommended re-sitement
of the two outlets and, therefore, it was not open to the DOA to
do a volte-face and reject the representation of the appellants.
H
MIS. SETHI AUTO S. STATION & ANR. v. DELHI 609
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]
-) It was contended that once appellants' cases were considered A
by the DDA under the guidelines in vogue at the relevant time
and they were found to be covered thereunder, the appellants
had substantive legitimate expectation that allotments would be
. made to them. It was argued that mere delay on the part of the
DOA in communicating formal orders of allotment to the appel- B
lants could not defeat their valuable right on the ground of sub-
-i sequent change in the policy in June, 2003, which could only be
{

applied prospectively.
_.,..
10. Per contra, Mr. A. Sharan, learned Additional Solicitor
General, appearing for the DOA, submitted that mere notings c
and proposals in the files of the ODA did not result in creation of
any right in favour of the appellants till a final decision was taken
by the Vice Chairman as the administrative head of the ODA
and the same was communicated to the appellants. It was also
urged that in the absence of a final decision duly communicated D
to the appellants, their claims had to be considered on the ba-
sis of the policies framed by the ODA from time to time and the
relevant date for the said purpose would be the date when the
Vice Chairman took the final decision under the policy in vogue
at that point of time. In support of the proposition, reliance was E
placed on a decision of this Court in PT R. Exports (Madras)
Pvt. Ltd. &Anr. Vs. Union of India & Ors. 1 A reference was also
made to Howrah Municipal Corporation & Ors. Vs. Ganges
Rope Co. Ltd. & Ors. 2 to contend that in view of the amend-
ment of the guidelines, which had the statutory flavor, in June, F
...,..l
~l 2003, the so called vested right to be considered under the 1999
guidelines, if any, also got nullified on account of the amended
-
guidelines.

11. Thus, the first question arising for consideration is
whether the recommendation of the Technical Committee vide G
. minutes dated 17th May, 2002 for re-sitement of appellants petrol
~'-,/
pumps constitutes an order/decision binding on the ODA?

12. It is trite to state that notings in a departmental file do
not have the sanction of law to be an effective order. A noting by
H
610 SUPREME COURT REPORTS [2008] 14 S.C.R.

A an officer is an expression of his viewpoint on the subject. It is (-
no more than an opinion by an officer for internal use and con-
sideration of the other officials of the department and for the
benefit of the final decision-making authority. Needless to add
that internal notings are not meant for outside exposure. Notings
B in the file culminate into an executable order, affecting the rights
of the parties, only when it reaches the final decision-making
authority in the department; gets his approval and the final or-
der is communicated to the person concerned.
13. In Bachhittar Singh Vs. The State of Punjab 3 , a Con-
e stitution Bench of this Court had the occasion to consider the
effect of an order passed by a Minister on a file, which order
was not communicated to the person concerned. Referring to
the Article 166(1) of the Constitution, the Court held that order
of the Minister could not amount to an order by the State Gov-
D ernment unless it was expressed in the name of the Rajpramukh,
as required by the said Article and was then communicated to
the party concerned. The court observed that business of State
is a complicated one and has necessarily to be conducted
through the agency of a large number of officials and authori-
E ties. Before an action is taken by the authority concerned in the
name of the Rajpramukh, which formality is a constitutional ne-
cessity, nothing done would amount to an order creating rights
or casting liabilities to third parties. It is possible, observed the
Court, that after expressing one opinion about a particular mat-
F ter at a particular stage a Minister or the Council of Ministers
may express quite a different opinion which may be opposed
to the earlier opinion. In such cases, which of the two opinions
can be regarded as the "order" of the State Government? It was
held that opinion becomes a decision of the Government only
G when it is communicated to the person concerned.
14. To the like effect are the observations of this Court in ."
~axminarayan R. Bhattad & Ors. Vs. State of Maharashtra &
Anr. 4 , wherein it was said that a right created under an order of
a statutory authority must be communicated to the person con-
H cerned so as to confer an enforceable right.
M/S. SETHI AUTOS. STATION & ANR. v. DELHI 611
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]
/ -~; 15. In view of the above legal position and in the light of A
the factual scenario as highlighted in the order of the learned
Single Judge, we find it difficult to hold that the recommenda-
tion of the Technical Committee of the DOA fructified into an
order conferring legal right upon the appellants. We may note
that during the course of hearing of the writ petitions, the learned B
Single Judge had summoned the original records wherein the
( representations of the appellants were dealt with. On a perusal
thereof, the learned Judge observed that the proposal for re-
- sitement was apparently approved up to the level of the Com-
missioner and the matter was placed before the Technical Com- c
mittee, which approved it on 28th November, 2002. Thereafter,
the ODA took further steps on the basis of field inspection to
..u
earmark the two sites; the entire matter was placed before the
Screening Committee and the Screening Committee in its de-
cision some time in 2003 noted that the matter had to be placed
D
for disposal in accordance with the policy. Some time in July,
2004 after the conclusion of certain inquiries. into the complaints
regarding re-sitement, the issue of relocation was again taken
up and a detailed note was made on 12th August, 2004, re-
counting the steps taken including the discussion of the Screen-
ing Committee in its meeting on 21st November, 2003. It is E
pointed out that the note records that the proposals for re-
sitement were not finally approved. The learned Judge has also
observed that the note dated 21st November, 2003 along with
the inspection report and the proposal for re-sitement was put
- --. up before the Commissioner (LB) who, on gth September, 2004 F
recorded the following comments:
"However, the basic fact to be noted is that these petrol
pumps were allotted on the land of Airport Authority of
India and there is no responsibility on the part of the ODA
to bear any cost or to carry out resitement for such sites
G
' '-1- given by any other land owning agency and which are
being effected by a project which is being done by a third
agency vis National Highway Authority of India with which
DOA has no links. This was discussed with VC and PC
H
)
\
612 SUPREME COURT REPORTS [2008] 14 S.C.R. )<--

A last week in the context of certa.in other resitement I-- --
proposal pending for pifferent areas in Dwarka and it was
agreed that the onu$ of such petrol pump sites on DOA
land, does not lie 4.Pon DOA particularly in a situation
when DOA now_.,has' a policy for auction of petrol pump
B sites. It was, therefore, decided that irrespective of the
impact of the proposed Express Way on these petrol pump
sites, there is no reason for ODA to take the responsibility b-
of resitement of these petrol pump sites and the oil
companies concerned may either participate in the auction ....
......,.

c process or obtain private plots for the purpose of carrying
out their business."
>
16. Finally, the Vice Chairman concurred with the view of 4
the Commissione(; proposals for re-sitement were rejected and
consequently decision was taken to put the two plots, on which
D the appellants had staked their claims for auction.
17. From the afore-extracted notings of the Commissioner y

and the order of the Vice Chairman, it is manifest that although
there were several notings which recommended consideration
of the appellants' case for relocatio.n but finally no official com-
E munication was addressed to or received by the appellants
accepting their claim. After the recommendation of the Techni-
cal Committee, the entire matter was kept pending; in the mean-
while a new policy was formulated and the matter was consid-
ered afresh later in the year 2004, when the proposal was re-
F jected by the Vice Chairman, the final decision making author-
~
ity in the hierarchy. It is, thus, plain that though the proposals
had the recommendations of State Level Co-ordinator (oil in-
dustry) and the Technical Committee but these did not ultimately
fructify into an order or decision of the DOA, conferring any le-
G gal rights upon the appellants. Mere favourable recommenda-
tions at some level of the decision making process, in our view,
are of no consequence and shall not bind the DOA. We are, v
therefore, in complete agreement with the High Court that the
notings in the file did not confer any right upon the appellants,
,,.
H as long as they remained as such. We do not find any infirmity

~~-
M/S. SETHI AUTOS. STATION & ANR. v. DELHI 613
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]

-) in the approach adopted by the learned Single Judge and af- A
firmed by the Division Bench, warranting interference.
18. We may, now, consider the plea relating to the legiti-
mate expectation of the appellants in terms of DDA's policy
dated ·14th October, 1999 and the impact of change of the policy,
in June, 2003, thereon. B
19. The protection of legitimate expectations, as pointed
out in De Smith's Judicial Review (Sixth Edition), (para 12-
001), is at the root of the constitutional principle of the rule of
law, which requires regularity, predictability, and certainty in c
government's dealings with the public. The doctrine of legiti-
mate expectation and its impact in the administrative law has
been considered by this Court in a catena of decisions but for
the sake of brevity we do not propose to refer to all these cases.
Nevertheless, in order to appreciate the concept, we shall refer
0
to a few decisions. At this juncture, we deem it necessary to
refer to ·a decision by the House of Lords in Council of Civil
Service Unions & Ors. Vs. Minister for the Civil Service 5 , a
locus classicus on the subject, wherein for the first time an at-
tempt was made to give a comprehensive definition to the prin-
ciple of legitimate expectation. Enunciating the basic principles E
relating to legitimate expectation, Lord Diplock observed that
for a legitimate expectation to arise, the decision of the admin-
istrative authority must affect such person either (a) by altering
rights or obligations of that person which are enforceable by or
against him in private law or (b) by depriving him of some ben- F
efit or advantage which either: (i) he has in the past been per-
mitted by the decision maker to enjoy and which he can legiti-
mately expect to be permitted to continue to do until some ra-
tional ground for withdrawing it has been communicated to him
and he has been given an opportunity to comment thereon or G
(ii) he has received assurance from the decision-maker that
they will not be withdrawn without first giving him an opportunity
of advancing reasons for contending that they should be with-
drawn. ,.
H
614 SUPREME COURT REPORTS [2008] 14 S.C.R.

A 20. In Attorney General of Hong Kong Vs. Ng Yuen Shiu 6 , (-
a leading case on the subject, Lord Fraser said: "when a public
authority has promised to follow a certain procedure, it is in the
interest of good administration that it should act fairly and should
implement its promise, so long as-the implementation does not
B ·interfere with its statutory duty".
21. Explaining the nature and scope of the doctrine of le-
gitimate expectation, in Food Corporation of India Vs. Mis
Kamdhenu Cattle Feed lndustries7 , a three-Judge Bench of
this Court had observed thus:
c
"The mere reasonable or legitimate expectation of a citizen,
in such a situation, may not by itself be a distinct
enforceable right, but failure to consider and give due
weight to it may render the decision arbitrary, and this is
how the requirement of due consideration of a legitimate
D
expectation forms part of the principle of non-arbitrariness,
a necessary concomitant of the rule of law. Every legitimate :r'
expectation is a relevant factor requiring due consideration
in a fair decision-making process. Whether the expectation
of the claimant is reasonable or legitimate in the context
E is a question of fact in each case. Whenever the question
arises, it. is to be determined not according .to the
claimant's perception but in larger public interest wherein
other more important considerations may outweigh .what
would otherwise have been the legitimate expectation of
F the claimant. A bona fide decision of the public authority
reached in this manner would satisfy the requirement of ~
non-arbitrariness and withstand judicial scrutiny. The
doctrine of legitimate expectation gets assimilated in the
rule of law and operates in our legal system in this manner
G and to this extent."
22. The concept of legitimate expectation again came up
for consideration in Union of India & Ors. Vs. Hindustan De- v
velopment Corporation & Ors. 8 . Referring to a large number of
foreign and Indian decisions, including in Council of Civil Ser-,
H
M/S. SETHI AUTO S. STATION & ANR. v. DELHI 615
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]
-) vice Unions and Kamdhenu Cattle Feed Industries (supra) A
and elaborately explaining the concept of legitimate expecta-
tion, it was observed as under:
"If a denial of legitimate expectation in a given case
amounts to denial of right guaranteed or is arbitrary,
discriminatory, unfair or biased, gross abuse of power or B
violation of principles of natural justice, the same can be
questioned on the well-known grounds attracting Article
14 but a claim based on mere legitimate expectation
without anything more cannot ipso facto give a right to
invoke these principles. It can be one of the grounds to c
consider but the court must lift the veil and see whether the
decision is violative of these principles warranting
interference. It depends very much on the facts and the
recognised general principles of administrative law
applicable to such facts and the concept of legitimate D
expectation which is the latest recruit to a long list of
concepts fashioned by the courts for the review of
administrative action, must be restricted to the general
legal limitations applicable and binding the manner of the
future exercise of administrative power in a particular case. E
It follows that the concept of legitimate expectation is "not
the key which unlocks the treasury of natural justice and it
ought not unlock the gate which shuts the court out of
review on the merits", particularly when the element of

... __.,,
speculation and uncertainty is inherent in that very
concept."
F

23. Taking note of the observations of the Australian High
Court in Attorney General for New South Wales Vs. Quinn 9
that "to strike down the exercise of administrative power solely
on the ground of avoiding the disappointment of the legitimate G
expectations of an individual would be to set the Courts adrift
' ..... on a featureless sea of pragmatism", speaking for the Bench,
K. Jayachandra Reddy, J. said that there are stronger reasons
as to why the legitimate expectation should not be substantively
protected than the reasons as to why it should be protected. H
616 SUPREME COURT REPORTS [2008] 14 S.C.R.

A- The caution sounded in the said Australian case that the Courts (~
should restrain themselves· and restrict such claims duly to the
legal limitations was also endorsed.
24. Then again in National Buildings Construction Cor-
poration Vs. S. Raghunathan & Ors. 10 , a three-Judge Bench
B of this Court observed as under:
"The doctrine of "legitimate expectation" has its genesis ~
in the field of administrative law. The Government and its
departments, in administering the affairs of the country,
c are expected to honour their statements of policy or
intention and treat the citizens with full personal
considerati<:>n without any iota of abuse of discretion. The
policy statements cannot be disregarded unfairly or
appli.ed selectively. Unfairness in the form of
unreasonableness is akin to violation of natural justice. It
D
was in this context that the doctrine of "legitimate
expectation" was evolved which has today become a
source of substantive as well as procedural rights. But
claims based on "legitimate expectation" have been held
to require reliance on representations and resulting
E detriment to the claimant in the same way as claims based
on promissory estoppel."
25. This Court in Punjab Communications Ltd. Vs. Union
of India & Ors. 11 , referring to a large number of authorities on
F the question, observed that a change in policy can defeat a sub-
stantive legitimate expectation if it can be justified on ~ ~
"Wednesbury" reasonableness. The decision maker has the
choice in the balancing of the pros and cons relevant to the
change in policy. Therefore, the choice of the policy is for the
G decision maker and not for the Court. The legitimate substan-
tive expectation merely permits the Court to find out if the change
in policy which is the cause for defeating the legitimate expec- y
tation is irrational or perverse or one which no reasonable per-
son could have made. (Also see: Bannari Amman Sugars Ltd.
Vs. Commercial Tax Officer & Ors. 12 )
H
MIS. SETHI AUTO S. STATION & ANR. v. DELHI 617
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]
-1 I
26. Very recently in Jitendra Kumar & Ors. Vs. State of A
Haryana & Anr. 13 , it has been reiterated that a legitimate ex-
pectation is not the same thing as an anticipation. It is dis-
tinct and different from a desire and hope. It is based on a right.
It is grounded in the rule of law as requiring regularity, predict-
ability and certainty in the Government's dealings with the pub- B
lie and the doctrine of legitimate expectation operates both in
procedural and substantive matters.
~
27. An examination of the afore-noted few decisions shows
~
that the golden thread running through all these decisions is that
a case for applicability of the doctrine of legitimate expecta- c
tion, now accepted in the subjective sense as part of our legal
jurisprudence, arises when an administrative body by reason
of a representation or by past practice or conduct aroused an
expectation which it would be within its powers to fulfill unless
some overriding public interest comes in the way. However, a D
person who bases his claim on the doctrine of legitimate ex-
1 pectation, in the first instance, has to satisfy that he has relied
on the said representation and the denial of that expectation
has worked to his detriment. The Court could interfere only if
the decision taken by the authority was found to be arbitrary, E
unreasonable or in gross abuse of power or in violation of prin-
ciples of natural justice and not taken in public interest. But a
claim based on mere legitimate expectation without anything
more cannot ipso facto give a right to invoke these principles. It
is well settled that the concept of legitimate expectation has no F
~~ role to play where the State action is as a public policy or in the
public interest unless the action taken amounts to an abuse of
power. The court must not usurp the discretion of the public au-
thority which is empowered to take the decisions under law and
the court is expected to apply an objective standard which leaves
G
to the deciding authority the full range of choice which the leg is-
~'--<
lature is presumed to have intended. Even in a case where the
decision is left entirely to the discretion of the deciding authority
without any such legal bounds and if the decision is taken fairly
and objectively, the court will not interfere on the ground of pro-
H
618 SUPREME COURT REPORTS [2008] 14 S.C.R.

A cedural fairness to a person whose interest based on legiti- (--
mate expectation might be affected. Therefore, a legitimate
"'
expectation can at the most be one of the grounds which may
give rise to judicial review but the granting of relief i~ very much
limited. [Vide Hindustan Development Corporation (supra)]
B 28. Bearing in mind the aforestated legal position, we may
now advert to the facts at hand. In the light of the factual see-
,,~
nario noted above, the short question arising for determination
is whether rejection of appellants claim· for resitement on the
basis of the revised policy of the year 2003, their substantive ·-
Jillll
c legitimate expectation of being considered under the old policy
of 1999 has been defeated?
29. In order to adjudicate upon the controversy, it would be
necessary to briefly refer to the two policies being pressed into
service by the rival parties. In the guidelines issued in 1999, the
D
relevant eligibility criteria was in the following terms:
"iv) The resitement sought due to reduction in sale on account 'r
of any planned scheme/project may be entertained by DOA,
provided it is referred by an Oil Company/Ministry mentioning
E that the sale level is below the prescribed limit and petrol -t-
pump is not feasible in its existing location."
30. According to the said guidelines, a request for
resitement on the ground of reduction in sales level below the
prescribed limit could be entertained by the DOA provided the
\
F proposal was referred by the oil company or the Ministry. The
parties are ad-idem that the cases of both the appellants for ~ ....
relocation were recommended by the two Oil Companies, viz.,
IOC and HPCL, on account of expected fall in sales because of
the construction of the flyover and grid separator. However, be-
G fore a final decision on the representation of the appellants could
be taken, the policy of the DOA underwent revision in the year
2003. The criterion for allotment of land by the DOA for resitement 'r'-
of existing petrol pumps was changed. Under the revised policy,
dated 2Q1h June, 2003, a case for resitement could be consid-
H · ered by the ODA only under the following circumstances:
M/S. SETHI AUTOS. STATION & ANR v. DELHI 619
·~
DEVELOPMENT AUTH. & ORS. [D.K. JAIN, J.:]

"A. Resitement: A
--~
1) Resitement will be made only when the existing petrol
pump/gas godown site is utilized for a planned
project/scheme which directly necessitates the
closing down of the petrol pump/gas godown site.
No resitement will be made on any other grounds. 8
As the petrol pumps will be disposed on annual
-1 Licence fee basis rather than on upfront payment, if
an allottee does not find the business lucrative due
.-::{ to certain other reasons, he can always chose to
surrender the site. c
2) In all cases of resitement, the existing rates for the
new site will be charged and the possession of the
old site will be handed over to DOA.
3) The alternative site will be allotted through D
computerized draw from the available sites. For
' •..
'"'( holding the draw at least 3 sites must be available
~
on the date of holding the draw."
~

31. It is plain that under the new policy resitement of a petrol
E
pump etc. is possible only when the existing petrol pump is uti-
lized for a planned project/scheme, which directly necessitates
11111
the closing down of the petrol pump. Under the new policy,
resitement on account of fall in sales etc. is not contemplated.
In fact, resitement on any other ground is specifically ruled out. It

../' . is also evident from the new policy that in the event of DOA F
permitting resitement, the possession of the old site has to be
delivered to the ODA, which presupposes that the old site was
also allotted by the ODA. As noted above, the existing .sites on
which the two petrol pumps in question are operating were al-
lotted by the Airport Authority of India and not by the ODA. G

"
32. Having bestowed our anxious consideration to the facts
( ~ in hand, in our judgment, the doctrine of legitimate expectation,
as explained above, is not attracted in the instant case. It is
manifest that even under the 1999 policy, on which the entire
H
.-

620 SUPREME COURT REPORTS [~ 008] 14 S.C.R.

A edifice of appellants substantive expectation of getting alterna-
tive land for resitement is built does not cast any obligation upon
the ODA to relocate the petrol pumps. The said !JOlicy merely
laid down a criterion for relocation and not a mandate that un-
der the given circumstances the DOA was obliged to provide
B land for the said purpose. Therefore, at best the appellants had
an expectation of being considered for resitement. Their cases
were duly considered, favourable recommendations were also
made but by the time the final decision-making authority con-
sidered the matter, the policy underwent a change and the cases ,·
C of the appellants did not meet the new criteria for allotment laid
down in the new policy. We are convinced that apart from the
fact that there is no challenge to the new policy, which seems to
have been conceived in public interest in the light of the changed
economic scenario and liberalized regime of permitting private
companies to set up petrol outlets, the decision of the ODA in
0
declining to allot land for resitement of petrol pumps, a matter
of largesse, cannot be held fo be arbitrary or unreasonable
warranting interference. Moreover, with the change in policy, any
direction in favour of the appellants in this regard would militate
against the new policy of 2003. In our opinion, therefore, the
E principle of legitimate expectation has no application to the facts
at hand.
33. In view of the foregoing discussion, the appeal is de-
void of any merit and deserves to be dismissed. It is dismissed
F accordingly. However, in the circumstances of the case, the
parties are left to bear their own costs.
D.G. Appeal dismissed.

·'\