WP/5930/1997 of A.P.S.R.T.C. EMPOLYEES CO-OPERATIVE BUILDING SOCIETY Vs Government of Andhra Pradesh on 29 December 2004

ORDER:

The A.P.S.R.T.C. Employees Co-operative Building Society, Kurnool,represented by its Secretary filed the present Writ Petition against therespondents praying for issuance of a writ, order or direction moreparticularly one in the nature of writ of mandamus declaring the action of the 2[nd]respondent in issuing the endorsementL.P.CMP/27/S.A./97 dated 18-2-1997 proposing to auction the land inSy.No.473 and 460 of Dinnedevrapadu village which was allotted tothe petitioner-society as house sites as illegal, arbitrary, violative ofprinciples of natural justice, null and void and consequently direct therespondents to assign the land admeasuring Acs.24-50 cents out ofS.No.396 which is demarcated as Sy.No.473 after its Sub-Division and Acs.5-55 cents in Sy.No.460 of Dinnedevarapadu village,Kurnool District in favour of the individual members-allottees of thepetitioner-society and to pass such other suitable orders.

Sri T.Bali Reddy, learned Senior Counsel representing the petitioner-society advanced submissions at length tracing the eventscommencing from Rc.A11.6174/72 dated 3-4-1972 till date and wouldcontend that in the light of the facts and circumstances of the case itis a clear case where the doctrine of promissory estoppel isapplicable to the facts of the case and hence the Government cannotgo back on the proposals to allot these lands in favour of thepetitioner-society and the members of the said society and hence theproposed auction contrary to the promise already made is arbitrary,illegal and also unconstitutional being violative of Article 21 of theConstitution of India. The learned Senior Counsel also had drawn theattention of this Court to proceedings Rc.No.B-6/1052/93 D-1, dated7-9-1994, Rc.(E1)/1052/93, dated 29-3-2000, Rc.No.E(1)/1052/93,dated 13-7-2000 and Rc.No.E1/2682/2003 dated 1-9-2003 and thegrounds raised in the affidavit filed in support of the Writ Petition andalso the stand taken by the respondents in the counter affidavit. Thelearned Senior Counsel would conclude that in the facts andcircumstances of the case, the proposed auction is not justified andthe Government may have to keep up the promise and finalise theallotments in favour of the petitioner-society and its members.

Per contra, the learned Government Pleader for Revenue hadpointed out the lapses on the part of the petitioner-society incomplying with the conditions which had been imposed in theproceedings Rc.A11/6174/72 dated 3-4-1972 and in the light of thesubsequent policy decision the Government is well justified indropping the proposals and further proceed with the proposedauction for the purpose of securing the maximum finance to theGovernment by putting the property to auction. The learned Counselalso had taken the Court through the contents of the counter affidavitin detail and would conclude that in view of the specific policy whichhad been referred to in the counter affidavit just on the strength of theproposals already made, the writ petitioner is not entitled to the reliefprayed for and hence the Writ Petition is liable to be dismissed.Heard the Counsel.

The secretary of the petitioner-society, a registered society consistingof the employees of A.P. State Road Transport Corporation, Kurnool,hereinafter in short referred to as “APSRTC, Kurnool” had sworn tothe affidavit filed in support of the Writ Petition. It is averred that themembers of the society, the employees, are all poor persons with nohouses of their own and they have been residing in the rentedpremises at exorbitant rents and have been facing harassment fromthe greedy landlords and their salaries are also hardly sufficient tomaintain their family and to meet the educational needs of their

children and with a view to secure the residential accommodationthese employees formed a society registered as “R.T.C.EMPLOYEES COOPERATIVE HOUSE BUILDING SOCIETY LTD.,KURNOOL” under A.P. Co-operative Societies Act. It is furtheraverred that the petitioner requested for assignment of house sites toits members. The District Collector, Kurnool District, permitted theSecretary of the petitioner-society to enter upon Acs.24-50 cents inS.No.396 and Acs.5-55 cents in S.No.460 of Dinnedevarapaduvillage for distribution of the same to 357 members pendingfinalisation of all the formalities and subject to the payment of marketvalue to be fixed. The Secretary who had sworn to this affidavit wasthen the Treasure of the said society. The proceedings of theCollector in Rc.A.11/6174/72 dated 3-4-1972 stipulated the followingconditions:

i. No body should sell away the plot allotted to others;ii. House should be built in five years time; iii. Layout with 60’ x 40’ size plots should be got approved bythe Revenue Divisional Officer, Kurnool;the Revenue Divisional Officer, Kurnool;

iv. The plot number to each individual should be got assignedby Revenue Divisional Officer as per the lay outapproved.by Revenue Divisional Officer as per the lay outapproved.

It is further averred that the Revenue Divisional Officer, Kurnoolapproved the lay out plan in S.Nos.396 and 460 measuring Acs.30- 05 cents of Dinnedevarapadu village as per L.Dis.4963/92 dated 16-11-1992. Further the Revenue Divisional Officer, Kurnool approvedthe list of beneficiaries (members of the Society) after obtainingcertification of the same from Regional Manager, A.P.S.R.T.C.Cuddapah and submitted to Collector with lay-out plan. Theproceedings Rc.379/93 dated 12-11-1993 also stated that the land issituated on a hillock and fit for house sites and it is free fromencroachment. The value of the land was fixed at Rs.7000/- per acreafter inspection along with the Mandal Revenue Officer and MandalSurveyor of Kurnool. It was further averred that the land in S.No.396was sub-divided by the Mandal Surveyor and approved by theMandal Revenue Officer, Kurnool on 18-12-1993. The AssistantDirector of Survey and Land Records scrutinized the sub-division andissued proceedings Rc.A11/4/94 dated 1-2-1994. It is a waste land.The sub-divided extent of Acs.24-50 cents was assigned inS.No.473. In pursuance of the sub-division effected to allot the landso sub-divided as house sites to the members of the society, theMandal Revenue Officer, Kurnool published notice on 8-2-1994 inDinnedevarapadu village where it is situated, by beat of drum andaffixture and the relevant notice is Rc.B.2031/92.

It is further stated that the Mandal Revenue Officer, Kurnool byproceedings Rc.B.2031/92 dated 8-2-1994 sought the approval ofGram Panchayat and the Gram Panchayat at its meeting on 10-2- 1994 gave its approval by means of resolution to the proposal ofMandal Revenue Officer. Subsequent thereto the Mandal RevenueOfficer, Kurnool submitted to the District Collector, the duly filled upquestionnaire and plan on 24-4-1994 recommending acceptance.The District Collector, Kurnool sent a comprehensive report enclosingall the above records to the Government with a letter in Roc.1052/93dated 11-6-1994 and the relevant portion of the said letter reads asfollows :

“The Revenue Divisional Officer has approved the lay-put plan.The beneficiaries list has been approved and signed by theRevenue Divisional Officer, Kurnool, Regional Manager,APSRTC, Cuddapah and Mandal Revenue Officer, Kurnool.The undertaking (affidavit) from each member to the effect thatthey are not having house or house sites within the radius of 8K.Ms. from Kurnool town and they have accepted to pay theM.V. fixed by the Government. The affidavits arecountersigned by the Notary.

The proposed Market Value @ Rs.7000/- per acre for anextent of Acs.30-05 worked out to Rs.2,10,350/-, the monetarylimits for fixation vests with the Government.”

The Commissioner of Land Revenue in his proceedings CLR’sRef.No.Spl.B-4/1524/94 dated 13-7-1994 asked the Collector toexplain the reasons for delay and sought detailed report. TheCollector, Kurnool submitted his Report in Rc.B-6 1052/93 D-1 dated7-9-1994 and in the said report certain other aspects were recordedwhich are as follows :

“The land is a hill block consisting waste area of Ac.900.39

acres, the area required has been sub-divided from big block,formed a new field assigning, new i.e., S.No.473 (Extent 24-50). For this purpose, time has been taken in observingnecessary formalities under S & B Act.

Statutory time limit has been taken for observing formalities forsubmitting transfer proposals and gathering of sales of thelands in the vicinity etc.”

It is also further averred that the Commissioner of Land Revenuefixed the market value and submitted the same to the Government toissue G.O. and it was pending though all procedures and formalitiesrequired for issuance of G.O. were completed as per Rules andRegulations. It is further stated that the petitioner has been expectingcommunication calling upon the members to deposit the marketvalue. The respective plots of 372 members of 551 x 40’ (5 cents) arealso demarcated for issuing individual assignment of the extents toeach of them. It is further stated that the Revenue Divisional Officer,Kurnool on 28-8-1996 had sent a report to the District Collector inRc.939/96 dated 28-8-1996 recommending market value ofRs.15,000/- per acre, even though the basic market value as per therecords of Sub-Registrar was only Rs.7500/- per acre. The Collector,Kurnool on 19-2-1997 informed the petitioner-society that it wasproposed to auction the lands agreed to be assigned to the membersof the petitioner-society and with that money it is proposed to add twomore storeys to the Collector’s building. The said decision taken tofurther proceed with the public auction of the large extent of land inclusive of the land in question had been questioned in the presentWrit Petition.

A counter affidavit in detail had been filed wherein none of the factsreferred to in the affidavit filed in support of the Writ Petition had beendenied. The stand taken by the Government in the counter affidavit isthat the Government have directed the Collector to secure finance forconstruction of Government office buildings by putting theGovernment waste lands to public auction. Further the Governmentby G.O.Ms.No.234, Revenue (Assignment-I) Department dated 4-5-1995 issued orders for selection of the Government lands for sale inpublic auction for raising funds. During the Joint Collector’s meetingheld at Hyderabad on 16-5-1996, the Special Chief Secretary andCommissioner of Land Revenue, A.P., Hyderabad while reviewingthe progress of the receipt of proposals of selection of surplusGovernment lands for sale in public auction for construction ofGovernment buildings in the existing complex instructed to expediteproposals of lands available in the District and to furnish theparticulars of the lands. Therefore a report was submitted to theCommissioner of Land Revenue, A.P. Hyderabad in Rc.B6-1052/93dated 8-2-1997 stating that the lands in question including all otherGovernment lands are proposed for public auction to raise funds forconstruction of third and fourth floors of Collectorate, Kurnool andrecommended to drop the said proposal. At this stage, the Secretary of the petitioner-society had put in a petition dated 13-1-1997 to theKurnool Chief Minister’s Grievance Cell, A.P., Hyderabad requestingfor consideration of the lands in question to alienate in the name ofthe petitioner-society for distribution of house sites to 357beneficiaries. The application was forwarded to the Collector, Kurnoolin C.M.P.No.1604/KCMP(O)/97 dated 16-1-1997 for taking necessaryaction and to inform the applicant about the action taken on thepetition. In response to the above, the applicant was informedthrough Collector’s Grievance Cell in L.Dis.CMP/27/SA/97 dated 18-2-1997 that the lands in question are proposed for public auction toraise funds for the construction of third and fourth floors in Collector’scomplex, Kurnool. Aggrieved by the same the present Writ Petitionhad been filed. It was also further averred that it is a fact thatpermission was granted to the members of the petitioner-society toenter upon land in S.No.396 to an extent of Acs.24-50 cents and inS.No.460 to an extent of Acs.5-55 cents of Dinnedevarapadu villageof Kurnool Mandal on payment of market value to be fixed by theGovernment in the year 1972 pending finalisation of the formalitiesimposing condition that houses should be built in five years. Buthowever the petitioner society did not submit beneficiaries list and theaffidavits of their members till 17-5-1993 stating that the site allotted tothem is at a distance of more than 10 K.Ms. from the town and thesite is a hillock and they did not take proper interest for getting regular

house site pattas even after 21 years. Several other details also hadbeen narrated in the counter affidavit. It was further stated thatpermission was granted to the petitioner-society on 3-4-1972 throughproceedings referred to supra to enter upon the land pendingfinalisation of all formalities and subject to the payment of marketvalue fixed by the Government and simultaneously proposals werealso called for from the Revenue Divisional Officer for assignment ofhouse sites to 357 persons but however the petitioner-society did notsubmit affidavits of their members for grant of house sites till 17-5-1993 expressing certain difficulties. Thus it is clear that the petitioner-society has no interest either to occupy the said site relating to whichpermission was granted. Subsequent thereto, proposals relating tothe transfer of classification of land also had been referred to and itwas specifically stated that it is only due to the negligence and delayin submitting the affidavits to the Government on the part of thepetitioner-society, decision was taken to put these lands by way ofpublic auction to raise funds. In nut-shell the stand taken by theGovernment is by virtue of the policy decision and also in the light ofthe public interest involved, the proposals had been dropped andhence the relief prayed for in the Writ Petition cannot be granted.

It may also be of some relevance to note the proceedings referred toinfra. In Rc.B6/1052/93 dated 7-9-1994 addressed by the Collector tothe Secretary to Commissioner of Land Revenue, A.P. Hyderabad, it was specified as hereunder :

“I invite kind attention to the reference cited.

I submit that the permission was accorded to the Secretary,A.P.S.R.T.C. Employees Co-operative Building Society,Kurnool to enter upon the lands in S.Nos.396 and 460 to anextent of Ac.30-05 of Dinnedevarapadu village in this officeproceedings Rc.A11.6174/72 dated 3-4-72, pendingfinalisation of all the formalities and subject to payment ofmarket value fixed by the Government and also to theconditions as already reported in this office reference 1[st] cited.

The secretary of the said Society in his letter dated 17-5-93has requested to allot the pattas to their members urgently assome illicit mining operations of digging granite stones is beingmade.

After inspection on 30-3-94 and 12-11-93 the Mandal RevenueOfficer and Revenue Divisional Officer, Kurnool havesubmitted market value proposals at Rs.7,000/- per acre forassignment of house sites to the A.P.S.R.T.C. Employees andtransfer proposals making the land free from encroachmentsand observing necessary formalities.

The Revenue Divisional Officer has approved the lay out andbeneficiary list of 372 members and sent under taking(affidavits) their members countersigned by the RegionalManager, A.P.S.R.T.C., Cuddapah.

After receipt of the proposals from the Revenue DivisionalOfficer, Kurnool, the Market value proposals were submitted tothe Government through Commissioner of Land Revenue,A.P., Hyderabad in this office reference 1[st] cited.

The Commissioner of Land Revenue in the reference 2[nd] citedhas pointed out the delay in submission of proposals at theproceedings for handing over possession of the proposed landwere issued in the year 1972.

In response to this, the reasons for the delay in submitting theproposals are given below.

1. That the A.P.S.R.T.C. Co.op. House Building Society,Kurnool did not submit the affidavits of theirmembers/beneficiaries as per the norms prescribed for grant ofhouse sites till 17-5-93 for which the Secretary of the societystated that the land for house sites allotted to them is at a distance of more than 10 K.Ms. from Kurnool town and athillock; the previous body did not take proper interest forgetting regular house site pattas.

2 . The Society has stated that the present body aftertaking charge, has initiated proper action in gatheringparticulars of all members regarding their eligibility as per rules,consent for payment of Market value fixed by the Governmentetc., in a prescribed proforma.

3. That the APSRTC Employees are scattered and someof the employees have already been retired. Some of them areriped for retirement. Taking view of the minimum benefits to theemployees, the present body was actively manned andapproached the Government with full particulars.

That in the mean time eviction of temporary occupationsi.e., removal of metal by the some unauthorized persons hasalso been taken up.

4 . The land is a hill block consisting waste area ofAc.900.39 acres, the area required has been sub-divided frombig block, formed a new field assigning new i.e., S.No.473(Extent 24.50). For this purpose, time has been taken inobserving necessary formalities under S & B Act.

5. Statutory time limit has been taken for observingformalities for submitting transfer proposals and gathering ofsales of the lands in the vicinity etc.

6. The verification of beneficiaries lists with reference tothe affidavits filed by the members, much time has been takenas the total members are 372. The Revenue Divisional Officer,Kurnool, Regional Manager, APSRTC, Cuddapah and theMandal Revenue Officer, Kurnool have certified thebeneficiaries list after satisfying the norms. The Report of theMandal Revenue Officer dated 2-8-1994 is enclosed.

I request communication of order in this regards.”

Subsequent thereto in the communication from the Collector to theChief Commissioner of Land Administration, Andhra Pradesh,Hyderabad in Rc.(E1) 1052/93 dated 29-3-2000, it was specified as hereunder :

Sub:- Assignment of House sites – Kurnool Mandal –Dinnedevarapadu (v) – Sy.No.473, 460 etc., of extent 30-05Acs. to APSRTC Employees, Kurnool on payment of M.V.proposals submitted – Orders – Requested – Reg.

Ref:- 1. This office Rc.B6.1052/93 dated 11-6-94.

2. C.C.L.A., A.P., Hyderabad Ref.Spl.B4/1524/94, dated 13-7-

94

3. This office Rc.B6.1052/93, dated 7-9-94.

4. C.C.L.A., A.P., Hyderabad., Ref.Spl.B4/1594/94, dated 24-9-1994.

5. Govt.Memo No.67238/Ann-IV(1)/94-I.

6. This office Rc.(B6)1052/93, dated 8-2-97.

7. Interim orders of W.P.M.P.No.7070/97 in W.P.No.5930/97, dt.26-3-97.

8. C.C.L.A., A.P., Hyd. Ref.Spl.B4/119/2000, dt.1-3-2000.

9. R.D.O., Kurnool Rc.(C) 938/96, dt.10-3-2000.

I invite kind attention to the reference cited and submitthat the reference 1[st] cited proposals were submitted to theGovernment. Through Chief Commissioner of LandAdministration for assignment of house sites to theA.P.S.R.T.C. Employees, Kurnool on payment of M.V. atRs.7000/- per acre in Sy.No.396 (old), 473 new and 460 ofDinnedevarapadu village of Kurnool Mandal further informationhas also been submitted in the reference 3[rd]cited. Theproposals was endorsed by Chief Commissioner of LandAdministration in the 4[th] reference cited. Proposing M.V. atRs.8,500/- per acre. It is further submitted that the Governmentin this Memo. 5[th] cited have called for the latest M.V. throughthe Chief Commissioner of Land Administrative. In thereference 6[th] cited, the report was submitted to drop theproposal as the land was proposed for public auction to raisethe funds for construction of the Collectorate/Revenue officeand orders from Chief Commissioner of Land Administrationare awaited. Mean while the representatives of A.P.S.R.T.C.employees, Kurnool have filed up in W.P.No.5930/97 in

Conclusion

Hon’ble High Court. The High Court has passed interim ordersin the reference 7[th] cited. A copy order is also enclosed.Counter has been filed and the case is still pending in theHon’ble High Court.

Further the Chief Commissioner of Land Administration,Andhra Pradesh, Hyderabad in the reference 8[th] cited has alsorequested to intimate the present stage of the Writ Petition.

In this connection that the Revenue Divisional Officer,Kurnool has submitted the latest M.V. proposals in thereference 9[th] cited reporting that the proposed land is rocky,uneven and unfit for cultivation. But it is fit for house sites. Asper the local enquiry and demand of the land for house sites itmay be fixed the market value at Rs.50,000/- per acre.

The market value at Rs.50,000/- per acre for an extent of30-05 Acs. for assignment to the employees of A.P.S.R.T.C.Kurnool may be fixed and orders may kindly be communicatedat an early date, for grant of individuals the pattas on paymentof market value.”

Subsequent thereto in the proceedings Rc.E(1) 1052/93, dated 13-7- 2000 addressed by the Collector to the Chief Commissioner of Land Administration, Andhra Pradesh, Hyderabad it was further specified as hereunder :

Sub:- Alienation of Land – Kurnool District and MandalDinnadevarapadu (v), Sy.No.473, 460 etc., an extent of Acres30-05 cents in favour of APSRTC Employees Co-op. HouseBuilding Society – Proposals – Requested – Report submitted– Regarding.

Ref:- 1. This office Rc.B(6) 1052/93, dt.11-6-94.

2. CCLA., A.P., Hyderabad Ref.Spl.B4/1524/94, dt.13-7-94.

3. This office Rc.B(6) 1052/93, dt.7-9-94

4. CCLA, A.P., Hyderabad Ref.Spl.B4/1594/94, dated 24-9-94.

5. Govt.Memo No.67238/Asn.-IV(1)/94-1, dt.13-10-95

6. This Office Rc.B(6) 1052/93, dt.8-2-97

7. Interim orders of W.P.M.P.No.7070/97 in W.P.No.5930/97, dated 26-3-97.

8. CCLA.,A.P, Hyderabad Ref.Spl.B4/119/2000, dated 1-3-2000.

9. R.D.O. Kurnool Rc.(C) 938/96, Dt.10-3-2000

10. This office Rc.E(1) 1052/93, dt.29-3-2000

11. CCLA., A.P., Hyderabad Spl. (B4) 119/2000, Dt.27-6-2000.

I invite kind attention to the reference cited and submit that inthe reference 1[st] cited proposals were submitted to the Govt.through the Chief Commissioner of Land Administration forassignment of House sites to the A.P.S.R.T.C. Employees,Kurnool on payment of Market Value at Rs.7000/- per acre. InSy.No.396 (old) 473 New and 460 of Dinnadevarapadu(village) of Kurnool Mandal. Further information has also beensubmitted in the reference 3[rd], 6 and 10[th]cited. In thereference 11[th] cited, the Chief Commissioner of LandAdministration requested to send the proposals with latestMarket Value and combined sketch. In this connection, incontinues to this office report 10[th] cited, I submit that at presentthe basic value of the land is at Rs.8,700/- per acre, as per thebasic valuation register maintained by the Joint Sub-Registrar.The lands proposed is rocky, uneven and unfit for cultivation.But it is fit for house sites. The sales statistics were gatheredupto 1999 year, ranging from Rs.7500/- to 9900/- per acre. Thesales lands which took place at higher rate are away from theland in question and are even and at the foot of the hill inbetween village Dinnadevarapadu and Engineering College.As per local enquiry and demand of the land for house sites itis proposed to fix the Market Value at Rs.50,000/- per acre.The sales statistics and combined sketch copies are submittedherewith.

The Market value at Rs.50,000/- per acre for an extent of 30-05 acres for assignment to the Employees of APSRTC.Kurnool may be fixed and orders may kindly be communicatedfor grant of the pattas on payment of Market value to theAPSRTC Employees.”

Subsequent thereto in Rc.E1.2682/2003, dated 1-9-2003 addressed by the Collector to the Secretary, R.T.C. House Building Society it was specified :

Sub:- Alienation of land – Kurnool Mandal – Dinnadevarapaduvillage – Sy.No.460 and 473 an extent of 30-05 cents – infavour of APSRTC Employees Co-operative House BuildingSociety – Proposals submitted – Consent – Requested –Regarding.

Ref:- 1. This Office Rc.E1/1053/93, dated 1-12-2000

2. Govt.Memo No.67238/Asn-IV(1)/94-7, Dated 4-6-2003.

The alienation proposals were submitted to the ChiefCommissioner of Land Administration, A.P., Hyderabad asfixing the market value at Rs.5,00,000/- per acre in thereference first cited for House sites to the said society inSy.Nos.460 and 473 of Dinnedeverapadu village of KurnoolMandal.

In the reference second cited the Government have requestedto obtain consent of the society for the proposed market valueat Rs.5,00,000/- per acre for consideration of the proposals.

Hence, you are requested to give consent for the abovemarket value at Rs.5,00,000/- per acre immediately for furtheraction.”

As can be seen from the proceeding dated 1-9-2003 referred tosupra wherein it was stated that the alienation proposals weresubmitted to the Chief Commissioner of Land Administration, A.P.,Hyderabad fixing the market value at Rs.5,00,000/- per acre to theselands, it is clear that the Government is only interested in securing thehighest price possible for these lands. The doctrine of promissoryestoppel had not only been adopted in fullness in our country but ithad been recognized as affording a cause of action to the person to whom the promise is made. In this context the early cases which may be referred to are GANGES MFG.CO. Vs. SOURUJMULL andMUNICIPAL CORPORATION OF BOMBAY Vs. SECRETARY OFS T A T E . I n COLLECTOR OF BOMBAY Vs. MUNICIPALCORPORATION OF THE CITY OF BOMBAY his LordshipChandrasekhara Aiyer, J (as he then was) expressed the solitaryview pointing that the Government cannot be allowed to go back onthe representation made by it and opined that it would amount tocountenancing the preparation of what can be compendiouslydescribed as legal fraud which a court of equity must prevent beingcommitted. This view referred to supra had been approved in UNIONOF INDIA Vs. INDO-AFGHAN AGENCIES . In TURNER MORRISONAND CO. LTD. Vs. HUNGERFORD INVESTMENT TRUST LTD. itwas held :

“Estoppel is a rule of equity. That rule has gaineddimensions in recent years. A new class of estoppel i.e.,promissory estoppel has come to be recognized by the courtsin this country as well as in England. The full implication of‘promissory estoppel’ is yet to be spelled out”.

In M.P. SUGAR MILLS Vs. STATE OF U.P. it was held at para 33 as hereunder :

“The State, however, contended that the doctrine ofpromissory estoppel had no application in the present casebecause the appellant did not suffer any detriment by acting onthe representation made by the Government; the vanaspatifactory set up by the appellant was quite a profitable concern

and there was no prejudice caused to the appellant. Thiscontention of the State is unsustainable and must be rejected.We do not think it is, necessary, in order to attract theapplicability of the doctrine of promissory estoppel, that thepromisee, acting in reliance on the promise, should suffer anydetriment. What is necessary is only that the promisee shouldhave altered his position in reliance on the promise. Thisposition was impliedly accepted by Denning J., in the HighTrees Case when the learned Judge pointed out that thepromise must be one “which was intended to create legalrelations and which, to the knowledge of the person makingthe promise, was going to be acted on by the person to whomit was made and which was in fact acted on”. If a promise is“acted on”, “such action, in law as in physics, must necessarilyresult in an alteration of position”. This was again reiterated byLord Denning in W.J. Alan & Co. Ltd. V. El Nasr Export andImport Co. (1972) 2 All.E.R. 127 at p.140 where the learnedLaw Lord made it clear that alteration of position “only meansthat he (the promisee) must have been led to act differentlyfrom what he would otherwise have done. And, if you study thecases in which the doctrine has been applied, you will see thatall that is required is that the one should have acted on thebelief induced by the other party”. Viscount Simonds alsoobserved in Tool Metal Mfg. Co. Limited v. Tungsten Electricco. Ltd. (1955) 2 All.E.R. 657 that “…..the gist of the equity liesin the fact that one party has by his conduct led the other toalter his position”. The Judgment of Lord Tucker in the samecase would be found to depend likewise on a fundamentalfinding of alteration of position, and the same may be said ofthat of Lord Cohen. Then again in Ajayi v. Briscoe (1964) 3All.E.R. 556 (supra) Lord Hodson said : “This equity is,however, subject to the qualifications (a) that the other partyhas altered his position”. The same requirement was alsoemphasized by Lord Diplock in Kammin’s Ballrooms Ltd. v.Zenith Investments (Torguay) Ltd. (1970) 2 All.E.R. 871. Whatis necessary, therefore, is no more than that there should bealteration of position on the part of the promisee. The alterationof position need not involve any detriment to the promisee. Ifdetriment were a necessary element, there would be no needfor the doctrine of promissory estoppel because, in that event,in quite a few cases, the detriment would form theconsideration and the promise would be binding as a contract.There is in fact not a single case in England where detriment isinsisted upon as a necessary ingredient of promissoryestoppel. In fact, in W.J.Alan & Co. Ltd. V. El.Nasr Export andImport Co. (supra), Lord Denning expressly rejected detriment as an essential ingredient of promissory estoppel saying :

“A seller may accept a less sum for his goods than thecontracted price, thus inducing (his buyer) to believe that hewill not enforce payment of the balance : See Central LondonProperty Trust Ltd. V. High Trees House Ltd. (1956) 1 All.E.R.256 and D & C. Builders Ltd. v. Rees (19650 3 All.E.R. 837). Innone of these cases does the party who acts on the beliefsuffer any detriment. It is not a detriment, but a benefit to him tohave an extension of time or to pay less, or as the case maybe. Nevertheless, he has conducted his affairs on the basisthat he has had that benefit and it would not be equitable nowto deprive him of it”.

We do not think that in order to invoke the doctrine ofpromissory estoppel it is necessary for the promisee to showthat he suffered detriment as a result of acting in reliance onthe promise. But we may make it clear that if by detriment wemean injustice to the promisee which would result if thepromisor were to recede from his promise, then detrimentwould certainly come in as a necessary ingredient. Thedetriment in such a case is not some prejudice suffered by thepromisee by acting on the promise, but the prejudice whichwould be caused to the promisee, if the promisor were allowedto go back on the promise. The classic exposition of detrimentin this sense is to be found in the following passage from theJudgment of Dixon, J in the Australian case of Grundt v.Greate Boulder Pty. Gold Mines Ltd., (1938) 59 CLR 641 :

“……It is often said simply that the party asserting the estoppelmust have been induced to act to his detriment. Althoughsubstantially such a statement is correct and leads to nomisunderstandings, it does not bring out clearly the basalpurpose of the doctrine. That purpose is to avoid or prevent adetriment to the party asserting the estoppel by compelling theopposite party to adhere to the assumption upon which theformer acted or abstained from acting. This means that the realdetriment or harm from which the law seeks to give protectionis that which would flow from the change of position if theassumption were deserted that led to it. So long as theassumption is adhered to, the party who altered his situationupon the faith of it cannot complain. His complaint is that whenafterwards the other party makes a different state of affairs thebasis of an assertion of right against him then, if it is allowed,his own proginal change of position will operate as a detriment.His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and aninconsistent state of affairs were accepted as the foundation ofthe rights and duties of himself and the opposite party, theconsequence would be to make his original act or failure to acta source of prejudice”.

If this is the kind of detriment contemplated, it wouldnecessarily be present in every case of promissory estoppel,because it is on account of such detriment which the promiseewould suffer if the promisor were to act differently from hispromise, that the Court would consider it inequitable to allow toallow the promisor to go back upon his promise. It would,therefore, be correct to say that in order to invoke the doctrineof promissory estoppel it is enough to show that the promiseehas, acting in reliance on the promise, altered his position andit is not necessary for him to further show that he has acted tohis detriment. Here, the appellant clearly altered its position byborrowing moneys from various financial institutions,purchasing plant and machinery from M/s. De Smet (India) Pvt.Ltd., Bombay and setting up a vanaspati plant, in the beliefinduced by the representation of the Government that salestax exemption would be granted for a period of three yearsfrom the date of commencement of the production. TheGovernment was therefore, bound on the principle ofpromissory estoppel to make good the representation made byit ……”.

A similar question had been considered by this Court inAERONAUTICS EMPLOYEES COOP. HOUSING SOCIETY LTD.Vs. THE GOVT. OF A.P., HYDERABAD AND OTHERS where in atparas 11 and 12 it was held as hereunder :

“Had the Government told the management of the H.A.L. in thebeginning itself in 1981 when vast tracts of land was readilyavailable for construction purposes, the management wouldhave explored alternative arrangements to provide housingaccommodation to their employees. Because of the promisemade by the State Government, the management, thinking thatthe promise would be acted upon, did not explore otherpossibilities. It is the promise of the Government that hadaltered the position of the petitioner-society. The doctrine ofpromissory estoppel also applies against the Government. It is no defence for the Government to say that because ofexecutive necessity, it need not keep up its promise. In M.P.Sugar Mills V. State of U.P. (AIR 1979 S.C. 621), the SupremeCourt held (at p.643 of AIR):

“Where the Government makes a promise knowing orintending that it would be acted on by the promisee, and infact, the promisee, acting in reliance on it, alters his position,the Government would be held bound by the promise andpromise would be enforceable against the Government at theinstance of the promise, notwithstanding that there is noconsideration for the promise and the promise is not recordedin the form of a formal contract as required by Art.299 of theConstitution. It is elementary that in a republic governed by therule of law, no one, howsoever high or low, is above the law.Every one is subject to the law as fully and completely as anyother and the Government is no exception. It is indeed thepride of Constitutional democracy and rule of law that theGovernment stands on the same footing as a private individualso far as the obligation of the law is concerned: the former isequally bound as the latter. The Government cannot claim tobe immune from the applicability of the rule of promissoryestoppel and repudiate a promise made by it on the groundthat such promise may fetter its future executive action. If theGovernment does not want its freedom of executive action tobe hampered or restricted, the Government need not make apromise knowing or intending that it would be acted on by thepromisee and the promisee would alter his position relyingupon it. But if the Government makes such a promise and thepromisee acts in reliance upon it and alters his position, thereis no reason why the Government should not be compelled tomake good such promise like any other private individual.

It is true that if there is overriding public interest, it is alwaysopen to the Government to resile from the promise. In thepresent case, the file containing allotment of the land in favourof Karshaka Parishad had not been placed before me. TheConstitutional validity of the Act by which the KarshakaParishad was brought into being was questioned and aDivision Bench of this Court on 1-9-1988 had struck down partof the Act and also set aside the appointment of the Chairman.The reappointment made subsequently was also struck downby this Court. No final decision was taken about the setting upof Karshaka Parishad. The learned Counsel for the petitionerhas placed before me a copy of Telugu daily ‘Eenadu’ dated15-4-1990 which contained a statement of the Hon’ble Ministerfor Agriculture that the Karshaka Parishad exists only on

paper. Even if Karshaka Parishad comes into existence, itcannot be said that the entire extent of Ac.645-16 guntaswould be required for Krishak Nagar. In any event, havingmade a promise as far back as 1982 to the petitioner-society itis inequitable on the part of the Government not to act uponthat promise. The extent of the land promised to the petitioneris only Ac.89-31 guntas out of the Ac.645-16 guntas coveredby S.No.64 of Madhavapur village. Apart from the principle ofpromissory estoppel, in the interests of good government thecommitment made to the management of the H.A.L. should behonoured. The employees of any Central Government publicsector undertaking, after having been promised assignment ofland, should not be subjected to disappointment on the groundof the policy of the Government that the State Governmentemployees should be given preference in the matter ofassignment of house sites. Apart from the legality of thegovernmental action, its legitimacy also is involved in asituation of the present type”.

As can be seen from the averments made in the affidavit filed insupport of the Writ Petition and the stand taken by the Government inthe counter affidavit and also the correspondence in between theGovernmental agencies and also the correspondence in between thepetitioner and the Governmental agencies, it is clear that theproposals had been initiated way back in the year 1972. It is no doubttrue that while invoking the doctrine of promissory estoppel publicinterest also may have to be kept in mind by Courts of law. It is alsotrue that as can be seen from the conduct, there are certain lapseson the part of the petitioner too by non-complying with certainconditions which had been specified way back in the year 1972. TheGovernment, with a view to raise necessary finance for constructionof Collectorate buildings appears to have taken this decision to further proceed with the sale of land by public auction and it ispertinent to note that large extent of land is available inclusive of theland in question or controversy. Courts no doubt are expected toadopt cautious approach while applying the equity doctrine ofpromissory estoppel. A balanced view may have to be takenbetween interest of the Government, public interest and also theeffect of promise, the effect, if the promise is directed to be enforcedby invoking the doctrine. The object of the Government appears to beone of pooling up the finance for construction of buildings by theGovernment and at the best the question which may be of someimportance is the fixing of the market value by private negotiationswith the petitioner vis-à-vis the value which would be secured if thisproperty is sold by auction. In the large extent of land available asmall portion alone was proposed to be allotted to the petitionersociety. As per the correspondence available, the Governmentappears to be more interested in securing the maximum possibleprice. It is needless to say that in the changed situation, a just andreasonable market value may have to be fixed by the parties.Keeping in view the lapse of time and also the slight lapse on the partof the petitioner society and the inaction thereof in complying withcertain of the conditions specified way back in 1972 and also keepingin view the policy decision taken by the Government, it is a fit casewhere the petitioner and the revenue authorities may have to further negotiate on the market value and fix a just and reasonable marketvalue and arrive at a decision. However, it is made clear that whilefixing the just and reasonable market value, the Government mayhave to take into consideration that the members of the petitionersociety are employees, present and retired of A.P.S.R.T.C., andthese employees also have been serving the public. InSHANTISTAR Vs. NARAYAN while dealing with right to havereasonable residence it was held that the same would fall underArticle 21 of the Constitution of India.

Taking into consideration the over all facts and circumstances,this Court is of the considered opinion that in view of the fact that theinitial proposals had been made way back in the year 1972, it wouldbe totally unjust on the part of the Government to go back on thepromise and the same may have to be finalized and hence there isno justification on the part of the Government to proceed with theproposed auction of the subject matter of the Writ Petitionwithdrawing the prior proposals under the guise of policy decision.However, this Court does hope that just and reasonable market valuewould be arrived at by parties taking into consideration that themembers of the petitioner-society are employees, present and retiredof A.P.S.R.T.C., who too are serving the public. In view of the factsand circumstances the respondents are directed not to furtherproceed with the proposed auction relating to the lands in questionspecified supra and the petitioner and the respondents are directed to negotiate and arrive at a just and reasonable market value keepingin view the lapse of time and arrive at a decision within a period ofthree months from the date of receipt of the order and further finalisethe allotment within a further period of two months thereafter. ThisCourt does also hope that these directions would safeguard theinterests of the Government and also the petitioner-society as well.

Accordingly, the Writ Petition is allowed to the extent indicated withthe above directions. In the peculiar facts and circumstances, thisCourt makes no order as to costs.

_________________

P.S.Narayana.,J

L.R. copy to be marked : YES / NO

AM

That Rule Nisi has been made absolute as above.

Witness the Hon’ble Sri Devinder Gupta, the Chief Justice on thisSecond day of December Two Thousand and Four.

To:

1. Government of Andhra Pradesh Rep. by its Secretary, RevenueDepartment, Secretariat, Hyderabad.Department, Secretariat, Hyderabad.

2. The District Collector, Kurnool.

3. Revenue Divisional Officer, Kurnool.

4. Mandal Revenue Officer, Kurnool.

5. 2 C.Cs. to Government Pleader for Revenue, High Court of A.P., High Court Buildings, Hyderabad.

6. 2 C.D. copies