Holding

The respondent’s acceptance of the 1990 allotment letter and part payment binds it, rendering the Lala Amarnath precedent inapplicable and precluding any right to a reduced rate for the additional land.

Summary

The Union of India appealed against a Delhi High Court order that reduced the consideration payable by Jain Sabha for an additional 0.787 acres of land allotted for a school. The government had originally allotted 1.363 acres in 1967 at Rs 5,000 per acre, and later, in 1990, offered 2.15 acres with the original portion at the same rate and the excess at Rs 38 lakhs per acre, which the Sabha accepted and partially paid. After learning of the Delhi High Court’s decision in Delhi Development Authority v. Lala Amarnath, the Sabha sought to revise the rate for the excess land to Rs 8 lakhs per acre and filed a writ petition; the High Court granted it. The Supreme Court held that the Lala Amarnath judgment was inapplicable, that the Sabha’s acceptance of the 1990 allotment letter and part payment bound it, and that it could not claim a lower rate as a matter of right. Consequently, the High Court’s order was set aside and the appeal was disposed of, with a direction that the parties may seek a sympathetic reconsideration.

Issues considered

The applicability of the Delhi Development Authority v. Lala Amarnath decision to the present land‑allotment dispute.
Whether the respondent can rescind its acceptance of the allotment terms and demand a reduced consideration for the additional land.
The maintainability of the writ petition challenging the government’s price determination.
Whether any statutory authority exists for the government to allot land to schools and charitable institutions.

Legislation cited

Delhi School Education Act, 1973

Subjects

land allotmentcharitable institutionconsideration ratecontract acceptancewrit petitionpublic policygovernment landschoolno profit no lossprice revision

Judgment

UNION OF INDIA AND ANR. A
v.
JAIN SABHA, NEW DELHI AND ANR.

NOVEMBER 21, 1996

B
[B.P. JEEVAN REDDY AND K. VENKATASWAMI, JJ.]

Allotment of land-Schools and Charitable Institutions-Allotme11t of
land by Govemme11t/Land and Development Office,-J.363 acres of land @
Rs. 5, 000 per acre i11 favour of charitable i11Stitutio11-Amou11t of co11sideratio11
paid-But possession could not be delivered for various reasons-No steps c
taken by institution thereafter to enforce its claim-About 20 years later alter-
nate land of 2.15 acres proposed to be allotted at uniform rate of Rs. 8 lakhs
per acr~Subsequently, formal letter of allotment issued stipulating a rate of
Rs. 5,000 per acre for 1.363 acres (Original offer) and Rs. 38 lakhs per acre
for excess land of 0. 787 acre--/nstitution accepted the offer and deposited Rs. D
JO /akhs towards part consideratio11-Subsequently, on basis of High Court's
decision in Lala Amamath's case institution filed writ petition before High
Court claiming that rate charged for additional land should be Rs. 8 /a/dis
per acre-Held : Institution had no right to allotment-Once rate offered by
Government was accepted and part co11Sideration made, institution could not
resile from its position and claim lower rate-Lala Amamath 's case inap- E
p/icab/e-l11Stitution could only request Government for sympathetic con-
sideration of its cas~ovemment should review entire policy relating to
allotment of land to schools and charitable institutions.

The respondent-Sabha wao allotted 1.363 acres of land by the appel- F
lant for running a school. The respondent paid the amount of considera-
tion iu the same year of allotment. However, possession could not be
delivered for various reasons and no steps were taken by the respondent
thereafter to enforce its claim. About 20 years later an alternate plot of
land of 2.15 acres was proposed to be allotted at au uniform rate of Rs. 8
Iakhs per acre. However, 4 years later a formal letter of allotment was G
issued stipulating a rate of Rs. S,000 per acre for 1.363 acres (which was
the original offer) and Rs. 38 lakhs per acre for the excess laud of 0.787
acre. The respondent accepted the offer and deposited Rs. 10 Iakhs
towards part consideration and also requested for further time to deposit
the balance amount. H
1
2 SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R.

A However, the respondent resiled from this position pursuant to a
decision of the High Court in Lala Amarnath's case. Taking advantage of
this decision the respondent filed a writ petition in the High Court claim-
ing that the rate charged from the additional land should be @ Rs. 8 lakbs
per acre only and not @ Rs. 38 lakbs per acre. The High Court allowed
the petition. Being aggrieved the appellant preferred the present appeal.
B
Disposing of the appeal, this Court

HELD : 1. The judgment of the High Court in Lala Amarnath's case
was in no way relevant to the facts of this case. Therefore, the reversal of ,,
C its stand by the respondent- Sabha was neither justified as a fact nor
justified in law. Even assuming that the saidjudgment was relevant in some
manner, the Sabha could not request for revision of price but could not
claim such revision as a matter of right, in view of its acceptance of the
terms of letter of allotment. The Sabha had no right to allotment. It was not
brought to the notice of this Court that allotment of land to a school by the
D Government of India or by the Land and Development Officer was governed
by any statute or statutory powers. It is not - and it cannot be - the case of
the Sabha that its acceptance by making part payment was vitiated by the
later judgment of the High Court between third parties and that it was not
•
bound by the said acceptance. Ifit takes that stand, the resnlt would be that
E the very offer contained in the letter of allotment would lapse; there would
be no allotment at all in favour of the Sabha. This is the factual position.
As regards the legal aspect, it appears highly doubtful whether the writ
petition itself was maintainable but it is not necessary to pursne this line
of enquiry for the reason that no such objection seems to have been raised
before or considered by the High Court. The judgment of the High Court
•
F does not refer to any such objection nor does it deal with it. The proper
course in all the circumstances of the case is to leave it open to the respon-
dents to approach the appellants with the request for a sympathetic con-
sideration of its case. [8-C-H; 9-A-B]

G Delhi Development Authority v. LalaArnarnath, 42 (1993) D.L.T. 651,
held inapplicable.

2. It is high time the government reviews the entire policy relating to
allotment of land to schools and other charitable institutions. Where the
pnblic property is being given to such institutions practically free, strin-
H gent conditions have to be attached with respect to the nser of the land
U.0.1. v. JAIN SABHA [B.P. JEEVA)'I REDDY, J.] 3

and the manner in which schools or other institntions established thereon A
shall function. The conditions imposed should be consistent with public
interest and shonld always stipulate that in case of violation of any of those
conditions, the land shall be resumed by the government. Not only such
conditions should be stipulated but constant monitoring should be done
to ensure that those conditions are being observed in practice. While
B
nothing could be said about the particular school rnn by the respondent,
it is common knowledge that some of the schools are being run on totally
commercial lines. Huge amounts are being charged by way of donations
and fees. The question is whether there is any justification for allotting
land at throw-away prices to such institutions. The allotment of land
belonging to the people at practically no price is meant for serving the c
public interest, i.e., spread of education or other charitable purposes; it is
not meant to enable the allottees to make money or profiteer with the aid
of public property. [9-G-H; 10-A-C]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14729 of
1996. l)

From the Judgn;ient and Order dated 29.11.91 of the Delhi High
.,. Court in C.W. No. 3605 of 1990.

Aron Sharma, V.K. Verma for the Appellants.
E
Dr. A.M. Singhvi, Manish Kumar, Rakesh K. Sharma, Anish Dayal
for the Respondents.

~The Judgment of the Court was delivered by

B.P. JEEVAN REDDY, J. Leave granted. F

This appeal is preferred by the Union of India through the Secretary,
. Ministry of Urban Development and the Land and Development Officer,
Ministry of Urban Development against the judgment of the Delhi High
Court allowing the writ petition filed by the respondents with certain G
directions. The first respondent is Jain Sabha, New Delhi [Sabha) and the
second respondent is the President of the first respondent-Sabha.

. ' The Sabha applied to the Land and Development Officer (L. &
D.O.) for allotment of a plot of land for locating the school being run by
them. The L.& D.O. allotted in 1963, a plot of land admeasuring 1.363 H
4 SUPREME COURT REPORTS [1996) SUPP. 9 S.C.R.
A acres @ Rs. 5000 per acre plus the annual ground rent of five percent
thereon. The allotment could not, however, be given effect to. The Sabha
was representing repeatedly for allotment of the land. In 1967, another
letter of allotment was issued stipulating the very same rate. As required
by the said letter, the Sabha deposited an amount of Rs. 7,185 on 8th July,
1967. The physical possession of the land could not, however, be delivered
B
to Sabha on account of existence of certain structures which could not be
vacated or removed. Sabha continued to press for allotment. A question
was also raised in the Parliament on 27th February, 1978 in this behalf, to
which a reply was given by the government that an alternate plot of 2.15
acres would be allotted to the appellant-petitioner. This change in the
C extent to be allotted was the consequence of change in policy. Sometime
after 1967, it appears, the relevant rules were amended according to which
no school can be established in a plot of land less than two acres in extent.
Be that as it may, possession of the alternate land was also not given to the
Sabha. Correspondence went on between the parties. On 14th October,
D 1986, the L.&D.O. informed the Sabha that an extent of 2.15 acres is being
allotted to the Sabha for running the school @ Rupees eight lakhs per acre.
Sabha represented against the price proposed to be charged. On 18th July,
1990, a formal letter of allotment was issued in respect of 2.15 acres of
land. So far as the rate is concerned, a distinction was made therein. With
respect to the extent of 1.363 acres [which was the area originally allotted
E or intended to be allotted to the Sabha], consideration was fixed at Rs.
5,000 per acre but in respect of the excess land of 0.787 acres, consideration
was fixed at Rupees thirty eight lakhs per acre. The total consideration so
fixed for the entire extent of 2.15 acres came to Rs. 29,90,600 [premium)
and Rs. 74,765 payable as ground rent per annum. On 16th August, 1990,
F the Sabha deposited a sum of Rupees ten lakhs towards the consideration
demanded.

On September 5, 1990, Delhi High Court delivered its judgment in
Delhi Development Authority v. Lala Amamath, 42 (1993) D.L.T. 651
holding that in respect of Nazul land allotted on 'no profit no loss' basis in
G accordance with the policy of the Central Government of schools, it is not
open to the government to charge market rate. Relying upon the said
judgment, Sabha filed the writ petition (from which this appeal arises) io
the Delhi High Court questioniog the demand of consideration @ Rupees
thirty eight lakhs per acres for part of the land allotted to it, i.e., io respect
H of an extent of 0.787 acres. The Delhi High Court has allowed the writ
U.0.1.v. JAINSABHA[B.P.JEEVAN REDDY,J.] 5
... petition directing that the government shall charge @ Rupees five thousand A ·
per acre for the extent of 1.363 acres (the original proposed extent) and
@ Rupees eight lakhs per acre for the excess land of 0.787 acres. The
Sabha is also made liable to pay proportionate ground rent and other
charges in accordance with law. The money already paid by Sabha is
directed to be adjusted against the amount determined as payable on the B
above basis. It has been further directed that physical possession of the
land shall be handed over to the Sabha on completing all the fG1malities
within two months of the judgment. ·
' ..,.
The case put forward by the Sabha and accepted by the High Court
is to the following effect : as far back as 1967, 1.363 acres was allotted to C
the Sabha @ Rupees five thousand per acre; as per the order of allotment,
the Sabha had deposited the sum of Rs. 7,185 on 8th July, 1967; so far as
this extent is concerned, the question of rate cannot be re-opened. (Indeed,
the rate in respect of this extent is not in issue between the parties.) The
dispute pertains only to the rate chargeable for the additional extent of D
0.787 acres. So far as this additional extent is concerned, the government
had agreed to allot the same @ Rupees eight lakhs per acre through its
• letter dated October 14, 1986 which was unreasonably enhanced to Rupees
thirty eight lakhs per acre under a subsequent letter dated 18th July, 1990.
This enhancement is unreasonable and arbitrary. The government cannot
charge anything more than Rupees eight lakhs for this additional extent. E

For a proper appreciation of the controversy, it is necessary to first
determine the correct state of facts .

• By its letter dated June 3, 1967, the Deputy Land and Development F
Officer, New Delhi informed Sabha that "the President is pleased to ........
sanction allotment of another plot of land measuring 1.363 acres in Edward
Square, New Delhi........ for the construction of a building for the Jain
Happy School... ... " subject to conditions specified therein. The rate
prescribed was Rupees five thousand per acre plus the annual ground rent
@ five percent thereon. It was further stipulated that the land shall be used G
by the Sabha only for construction of a building for Jain Happy School and
for no other purpose, that no religions instructions shall be imparted and
that "no citizen shall be denied admission to their school on grounds of
religion, race, caste, language or any of them". The Sabha was intimated
that if the conditions mentioned in the said letter were acceptable to it, it H
6 SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R.
A may deposit the sum of Rs. 7,185.75p and the ground rent. Accordingly,
the Sabha deposited the said amount which amounts to acceptance of the
conditions stipulated. The possession of the land could not however lie
'
delivered to the Sabha for various reasons. The Sabha was thereupon asked
'
to choose an alternate site. The Sabha was representing for allotment and
B possession of the land and the matter was kept pending. A question )"as
raised in this behalf in the Parliament. The Minister for Works and
Housing replied that possession of the land could not be delivered to the
school on account of number of built-up structures on the land. At last, on
14th October, 1986, the Government of India informed the Sabha that its
request for charging @ Rupees five thousand per acre for the alternate site
C of 2.15 acres cannot be accepted and that the rate charged shall be Rupees
eight lakhs per acre, i.e., for the entire extent allotted. Evidently, the Sabha
made representations against this whereupon the Government of India
issued the formal letter of allotment dated 18th July, 1990. In this letter, it
was stated that an extent of 2.15 acres is allotted in DIZ Area, New Delhi
D for the school, instead of 1.363 acres, subject to several conditions men-
tioned therein. With respect to the rate charged, it was stipulated that so
far as additional land of 0.787 acres is concerned, it shall be charged
@ Rupees thirty eight lakhs per acre while for the original extent of 1.363 •
acres, the premium amount already paid by the Sabha shall be treated as
sufficient. One of the conditions stipulated that "in the event of dissolution
E of the Jain Happy School, the land allotted and the assets created thereon
will be transferred to an institution having similar aims and objects with
the prior approval of the Govt. and failing that to Government". Yet
another condition was that "the institution shall not increase the rate of
tntion fee without the prior sanction of the competent authority and shall
F follow the provisions of Delhi School Education Act/Rules, 1973 and other '
instructions issued from time to time". It was also stipulated that "the Jain
Happy School shall not refuse admission to the residents of the locality".
This offer was stated to be valid for one month and if acceptable to the
Sabha, it was required to communicate its acceptance and remit the
consideration amount. Pursuant to this letter, the Sabha wrote to the L &
G D.O. on 17th August, 1990 as follows:

Dated 17.8.1990
"No. JAS/Land/1
'
The Land & Development Officer,
H Government of India,
U.0.1.v. JAIN SABHA[B.P.JEEVAN REDDY, J.] 7

Nirman Bhavan A
New Delhi-1

Sub. : Allotment of land for Jain Happy School

Ref.: Your letter NO. LV-4(162)/90/300 dt.18.7.1990
B
Dear Sir,

With reference to your abo~e cited letter, which was received
by us on 23.7.1990 and in continuation to our letter of even No.
dated 13.8.90, we are enclosing herewith a Pay Order No. 001670
dated 16.8.90 for Rs. 10 lakhs on Central Bank of India, Gole C
Market, New Delhi-1 as a part payment for the above subjected
land.

Since the fee structure of the school is such that it runs on 'No
Profit & No Loss' basis and since the amount to be deposited is D
very huge, it is not possible for the Sabha to deposit full amount
at a time and hence part payment is being made, which may kindly
be accepted.

In view of the above, you are requested to please allow us more
time to make the balance payment. E

Thanking you,

Yours faithfully,
., Sd/·
(Shri Pal Jain) F
Horry. General Secretary"

It is clear from the letter that Sabha accepted the rate specified in
the allotment letter dated July 18, 1990, viz., rate of Rupees thirty eight
lakhs per acre for the additional extent of 0.787 acres and the rate of G
Rupees five thousand per acre for the initial extent of 1.363 acres · apart
from the other conditions of allotment - and deposited a sum of Rupees
ten lakhs towards the total consideration payable as per the said allotment
letter. It also requested for further time to deposit the balance amount.
Within two months, however, Sabha resiled from this position seeking to
take advantage of a decision of the Delhi High Court in Lala Amamath. H
8 SUPREME COURT REPORTS (1996] SUPP. 9 S.C.R.

A On 28th October, 1990, the Sabha addressed a letter referring ·to the
judgment of the Delhi High Court in Lala Amamath and requesting that
as per the said judgment, it should not be charged at a rate of more than
Rupees eight lakhs for the additional extent of 0.787 acres, and that the
amount already paid by it should be adjusted accordingly and the excess
B amount refunded to it. Pausing here, we may mention that the said judg-
ment of the Delhi High Court deals with a different situation under a policy
said to be in force at the time of allotment in that case. The terms of
allotment and all the material facts are wholly different. We do no see any
relevance of the said decision to the facts of this case. Be that as it may,
when its request was not acceded to, the Sabha filed the writ petition from
C which this appeal arises.

It is not brought to our notice that allotment of land to a school by
the Government of India or by the L.&D.O. is governed by any statute or
statutory powers. The Sabha had no right to allotment. It is true that an
D allotment was made of 1.363 acres in the year 1967 and Sabha had remitted
the consideration of Rs. 7,185.75p in that year itself. But for one or the
other reason, possession of the land could not be delivered and no steps
were taken by the Sabha thereafter to enforce its claim. About twenty years '
later, i.e., on 14th October, 1986, 2.15 acres was proposed to be allotted at
a uniform rate of Rupees eight lakhs per acre. This offer was later revised
E in the respondents' letter dated 18th July, 1990, as stated above. The Sabha
accepted the same and deposited the sum of Rupees ten lakhs towards part
consideration. It only changed its stance two months later when it came to
know of the judgment of the Delhi High Court in Lala Amamath and on
that basis demanded that the rate to be charged for the additional land
F should be @ Rupees eight lakhs per acre only and not @ Rupees thirty •
eight lakhs per acre. We have pointed out that the said judgment was in
no way relevant to the facts of this case and, therefore, it is clear that the
reversal of its stand by the Sabha was neither justified as a fact nor justified
in law. Even assuming that the said judgment was relevant in some manner,
the Sabha could only request for revision of price but could not claim such
G revision as a matter of right, in view of its acceptance of the terms of letter
of allotment dated July 18, 1990. It is not - and it cannot be the case of the
Sabha that its acceptance aforesaid is vitiated by the later judgment of the
High Court between third parties and that it is not bound by the said
acceptance. If it takes that stand, the result would be that the very offer
H contained in the letter dated July 18, 1990 would lapse; there would be no
U.O.l. v. JAIN SABHA [B.P.JEEVAN REDDY,J.] 9

· allotment at all in favour of the Sabha. This is the factual position. Now, A
coming to the legal aspect, it appears highly doubtful whether the writ
petition itself was maintainable but we do not wish to pursue this line of
enquiry for the reason that no such objection seems to have been raised
before or considered by the High Court. The judgment of the High Court
does not refer to any such objection nor does it deal with it.
B
Sri Singhvi, learned counsel for the appellant, however, submits that
the Sabha is running a school catering to the students from the poor and
middle classes, that it is a purely charitable and genuine charitable or-
ganisation and that in view of its repeated request for allotment of land
over more than last thirty years, its request for, and its need for land, C
should be sympathetically considered. Counsel also submits that the Sabha
is in no position to pay the full consideration demanded by the Govern-
ment. He also submits that the Sabha is anxious to help supplement the
Government's efforts and obligation to provide school education and .
hence, it should not be asked to pay tl-ie said revised price for the additional D
land of 0.787 acres. Sri Singhvi submitted that many other schools similarly
situated have been allolled land at very low prices and that there is no
reason for not extending the same treatment to the appellants. The ques-
tion is what is the proper direction to be made in the matter consistent
with law, justice and public interest? In our opinion, the proper course in
all the circumstances of the case is to leave it open to the respond9ts to E '
approach the appellants with the above request. It is open to the respon-
dents to place all the relevant facts before the appellants and ask for a
reconsideration of the matter. It is for the Union of India and the L. &
D.O. to consider whether their orders contained in the allotment letter
• dated 18th July, 1990 call for any revision. The appeal is disposed of with F
the above direction. The judgment of the Hig)i Court is set aside. No costs.

It is directed that for a period of six months from today, status quo
as on today shall continue.

1
Before parting with this case, we think it appropriate to observe that G
, '.it is high time the government reviews the entire policy relating to allotment
iof land to scl;iools ·and othfr' charitable· institutions. Where the public
' . I -
:property is being given to such institutions practically free, stringen~on-
'.ditions have to be attached with respect to the user of the land and the .
manner in which schools or other institutions established thereon shall H
10 SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R.

A function. The conditions imposed should be consistent with public interest
and should always stipulate that in case of violation of any of those
conditions, the land shall be resumed by the government. Not only such
conditions should be stipulated but constant monitoring should be done to
ensure that those conditions are being observed in practice. While we
B cannot say anything about the particular school run by the respondent, it
is common knowledge that some of the schools are being run on totally
commercial lines. Huge amounts are being charged by way of donations
and fees. The question is whether there is any justification for allotting land
at throw-away prices to such institutions. The allotment of land belonging
to the people at practically no price is meant for serving the public interest,
C i.e., spread of education or other charitable purposes; it is not meant to
enable the allottees to make money or profiteer with the aid of public
property. We are sure that the government would take necessary measures
in this behalf in the light of the observations contained herein.

v.s.s. Appeal disposed of.