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Monday, July 25, 2016

question the allotment of orchards belonging to the State on lease for a period of 25 years to private parties without following auction process. =Considering the above, we deem it appropriate to quash and set aside the impugned judgment and order only qua appellants herein (the respondents 25 and 26 in the Writ Petition); and further direct remand of the Writ Petition to the High Court for reconsidering it afresh only with regard to them as regards the validity of grants in favour of Tata Energy Research Institute (now known as Energy and Resources Institute); and two grants in favour of Akhilesh Kala as the appellants herein claim to be the heirs and legal representatives of deceased Akhilesh Kala. We once again make it clear that we may not be understood to have disturbed the order in any manner operating against Dabur Research Foundation (original respondent No.14, in the remanded Writ Petition).



                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                 CIVIL APPEAL NO……6606…………/2016
(Arising out of S.L.P. (Civil) No. 39898/2012)

    The Energy and Resources Institute                       ….Appellant

                                   Versus

          Suhrid Sudarshan Shah & Ors.               …..Respondents

                                    WITH

                        CIVIL APPEAL NO……6607………/2016
                (Arising out of S.L.P.(Civil) No. 4886/2013)


                             J U D G M E N T

A.M. Khanwilkar, J.



Leave granted.





2.    Respondent No.1 (Suhrid Sudarshan Shah) had filed Writ Petition  under
Article  226  of  the  Constitution  of  India  before  the  High  Court  of
Uttarakhand at Nainital in the nature of public interest litigation  against
the  State  of  Uttarakhand  and  the  Director  of  Horticulture  and  Food
Processing, to question the allotment of orchards belonging to the State  on
lease for a period of 25 years to private parties without following  auction
process.  Reliefs claimed in the said Writ Petition (PIL)  No.600  (M/B)  of
2003 read thus:

                                 PRAYER

It is, therefore most  respectfully  prayed  that  this  Hon’ble  Court  may
graciously be pleased to allow this petition and issue:-

Writ Rule, Order or direction in  the  nature  of  mandamus  commanding  and
directing the respondents  not  to  implement  the  decision/policy  of  the
government to handover 77 government orchards to the private person.

Writ, Rule, Order or direction  in  the  nature  of  mandamus  declaring  or
rendering the government action/policy, or handing  over  of  77  government
orchards to private persons, void and unconstitutional.

Any other relief, which this Hon’ble Court may deem fit and  proper  in  the
circumstances of this case.

To award the cost to the petitioners.



This Writ Petition was summarily dismissed by  the  Division  Bench  of  the
High Court on 30th August 2003.  The Court noted that the short point to  be
decided in the Writ Petition was whether 74 orchards or  any  of  them  were
making profit,  as  alleged.   The  Division  Bench  opined  that  the  writ
petitioner had failed to provide any details in  that  regard  in  the  Writ
Petition.  On the other hand, the State furnished a chart  based  on  Profit
and Loss Account of the orchards, which was taken on  record.   The  factual
position stated therein having remained uncontroverted, the  Division  Bench
summarily dismissed the Writ Petition in limine.

3.    The respondent No.1 carried  the  matter  to  this  Court  by  way  of
S.L.P.(Civil) No. 23707/2003 (converted into C.A. No.  4629/2006).  In  that
appeal, the State was called upon to  file  counter  affidavit  before  this
Court, wherein, it was, inter-alia, contended by the State as follows:

“(1)  That a total area of 1380.254  Hectare  comprised  in  104  Government
orchards have been dismissed, the estimated value  whereof  would  be  about
Rs.138 crores.

(2)   The State of Uttaranchal  has   allegedly  taken  a  purported  policy
decision in terms whereof  Public  Private  partnership  was  sought  to  be
resorted to with a view to attract more investment and provide  new  avenues
of employment for local people and for betterment of the economic  condition
of the public in general and the Government.

(3)   With the private investment  coming  in  these  orchards  the  benefit
thereof would also pass to the local people. Moreover,  other  horticultural
activities like medicinal and herbal  plants,  tea,  sericulture  and  other
high value land based  operations  are  proposed  to  be  taken  upon  these
lands/orchards in future.”




With reference to this plea, this Court vide judgment dated August 30,  2006
opined that the matter required consideration afresh by the High Court.   In
that, the High Court in the first place ought to consider  the  question  as
to whether on the admissions made by the  State,  the  purported  policy  to
lease out such valuable lands on nomination basis was in public interest  or
not, keeping in mind the exposition in the case  of  Ramana  Dayaram  Shetty
vs. International Airports Authority of India & Ors.[1].   The  Court  noted
that since the nominees were not before the Court,  the  High  Court  should
give opportunity to them before  finally  deciding  the  matters  in  issue.
This Court, accordingly, was pleased to set aside the High Court  order  and
remanded the Writ Petition to the High  Court  for  fresh  consideration  in
accordance with law.


4.     In furtherance of remand order,  the  Writ  Petition  stood  restored
before the High Court and was assigned fresh number as Writ  Petition  (PIL)
No. 857/2007.  In the said Writ Petition the High Court ordered  impleadment
of  the  nominees.   The  appellants  before  this  Court  were  accordingly
impleaded as respondent Nos. 25 and 26 vide  order  dated  18th  July  2011.
Having received  court  notice,  respondent  No.  25  (appellant  in  appeal
arising from SLP (Civil) No. 3989/2011) responded to the  writ  petition  by
filing an affidavit dated 20th November  2011  and  supplementary  affidavit
dated 29th July  2012  in  the  said  Writ  Petition.   The  said  appellant
asserted on affidavit that allotment of orchard in its favour was  just  and
proper.  It was done on the basis of a well informed policy  decision  taken
by the State Government and in larger public interest.   Further,  the  said
appellant being a registered society was established with the aim to  tackle
and deal with immense and acute problems that mankind is likely to  face  in
the years ahead on account  of  gradual  depletion  of  the  earth’s  finite
energy resources which are largely  non-renewable  and  existing  method  of
their use. That the policy  decision,  contended  the  said  appellant,  was
taken by the State Government  - as the stated  104  orchards  were  causing
huge losses to the  public  exchequer  for  its  management,  in  particular
towards the payment of salaries to its employees.  The State Government  had
suffered staggering loss to the tune of Rs. 2,70,00,000/- in the year  1998-
1999, Rs. 2,91,00,000/- in the year 1999-2000 and  Rs.2,10,00,000/-  in  the
year 2000-2001.  In this backdrop, with the  approval  of  the  Cabinet  the
State  Government  delineated  the  measures  for  re-organization  of   the
Horticulture  Directorate  of  the  State  Government  of  Uttarakhand.   In
pursuance of  the  said  Scheme,  the  Principal  Secretary-cum-Commissioner
circulated an official Order  dated  21st  May  2001  to  all  Universities,
Research  Institutes  and  Government  Departments  as  well   as   District
Administrations expressing its desire to make available on long  term  lease
the  unproductive  77  Government  Udhyaans/orchards  for  horticulture  and
agricultural diversification.  The appellant (in C.A.  arising  out  of  SLP
(Civil) No.39898/2012) after becoming aware of the policy  decision  of  the
State  Government,  expressed  its  interest  for  allotment  of  Government
orchard on long term basis by  submitting  proposal  on  22nd  August  2001.
That proposal was processed at different levels including by the Cabinet  of
the State Government  in its meeting dated 11th October 2002; and after  due
deliberations, the Government through  its  Joint  Secretary,  Horticulture,
vide letter dated 16th October 2002, informed the said  appellant  that  the
proposal submitted by it has been accepted.  It is  also  contended  by  the
said  appellant  that  news  articles  were  duly  published  in  the  local
newspapers including Indian Express about the Uttarakhand Government  having
invited NGOs to conduct research on the uses of  the  medicinal  plants  and
herbs available in the  Himalayas.   Further,  consequent  to  the  sanction
accorded in favour of the said appellant, lease deed  was  executed  on  5th
February 2003 through the Director, Horticulture, Government of  Uttarakhand
in respect of 7.50 hectares for 5 years initially  subject  to  renewal  for
another 20 years on satisfactory fulfillment of the terms and conditions  of
the allotment and the lease deed.  That the appellant  thereafter  has  made
huge investment to the tune of Rs.  15  crores  in  setting  up  the  entire
project.  It is stated that the State Government had formed  a  Six  Members
Committee under the Chairmanship of Professor A.N.Purohit for  formation  of
Government policy for allotment of the remaining  70  unproductive  orchards
to private parties on leasehold basis.  Requisition notice was  also  issued
inviting private (interested) parties for grant of  orchards  on  long  term
leasehold basis.  It is contended that as per  the  policy  the  lessee  was
obliged to pay lease amount  quantified  as  100  times  of  the  Government
revenue for the first 10 years and, thereafter, 200 times for  the  next  15
years.  In the process, no  revenue  loss  has  been  caused  to  the  State
Government.


5.    As regards the appellants in companion Civil Appeal  (arising  out  of
SLP (Civil) No. 4886/2013) whose predecessor  was  impleaded  as  respondent
No.26 in the Writ Petition, the High Court  in  the  impugned  judgment  has
noted that neither any  representation  was  made  on  his  behalf  nor  any
response was filed.  As the legal heirs  and  representatives  of  the  said
respondent, who have filed the present appeal, however, assert that  neither
any notice was served on their predecessor nor they  were  aware  about  any
proceedings pertaining to the two grants issued by the State  Government  in
favour of their  predecessor.   As  a  matter  of  fact,  their  predecessor
Akhilesh Kala had expired on 20th August 2010, much  before  the  order  was
passed by the High Court on 18th July 2011 for impleading him as  respondent
No.26 in the remanded Writ Petition.  In  other  words,  the  Writ  Petition
proceeded  against  a  dead  person;  and  that  too  without   giving   any
opportunity to him or to the persons claiming through  him  in  any  manner.
For, no notice about the said  proceedings  was  ever  served  on  the  said
respondent or their successors in title.


6.    The Division Bench of the High Court proceeded to finally  dispose  of
the remanded Writ Petition vide impugned  judgment  dated  30th  July  2012.
The High Court in the first place noted that before the formation  of  State
of Uttarakhand, stated 104 orchards were under effective  control  of  State
of  Uttar  Pradesh  and  were  run  and  managed  through  its  Horticulture
Department.  After  creation  of  State  of  Uttarakhand,  the  Horticulture
Department of the State of  Uttarakhand  evolved  mechanism  to  manage  and
maintain those orchards for which it invited six persons of  the  public  to
take over seven orchards.  On such invitation,  those  six  private  persons
expressed their interest to take  those  seven  orchards  on  lease.   Seven
leases were executed in favour of six private persons and they were  put  in
possession of seven orchards on lease basis.  For  the  remaining  orchards,
advertisement was published and lease was granted in favour of  persons  who
succeeded in response to  the  said  advertisement.   The  High  Court  then
proceeded to observe that the  present  public  interest  litigation  raises
issue about the unjust allocation of orchards, as it has not benefitted  the
State Government.  Thus, the grants must  be  declared  as  illegal.   After
having noticed this position, the High Court in the  impugned  judgment  has
noted that grants given pursuant to advertisement need  no  interference  as
no contention has been raised in the Writ Petition about the correctness  or
validity of the advertisement and as the grants  were  settled  pursuant  to
the said advertisement.





7.    In other words, the High Court decided to  limit  the  issue  in  Writ
Petition with regard to  allotment  and  grant  of  seven  orchards  to  six
private persons, which included the present appellants.  The  Court  noticed
that out of seven grants, three  grantees  have  surrendered  their  grants.
Only three grantees namely, Dabur Research Foundation, Tata Energy  Research
Institution (appellant in appeal arising out of SLP (Civil) No.  39898/2012)
and  Akhilesh  Kala  (appellant  in  C.A.  arising  out  of  SLP(Civil)  No.
4886/2013) have chosen to continue with the four  grants.   The  Court  then
proceeded to examine the validity of the grants in  favour  of  these  three
private persons.  It first considered the validity of  grant  in  favour  of
Dabur Research Foundation.  The High Court noted the contention of the  said
grantee that lease was executed  after  advertisement  was  published.   It,
however, found that the said grantee had not stated that the  lease  in  its
favour was the subject matter of any  advertisement.   With  regard  to  the
second contention of the grantee  that  the  lease  conditions  provide  for
periodical inspection after every five years, the  High  Court  opined  that
neither the State nor the said grantee produced inspection report on  record
to substantiate that inspection has  been  carried  out,  much  less  having
complied with the terms and conditions of lease in all respects.  The  Court
further found that as per the lease terms the grantee was obliged to  impart
horticulture education to the people of the locality  and  also  to  provide
them engagement, but neither the State nor the  said  grantee  has  produced
any record that even that condition  has  been  complied  with.   The  Court
noted that the said grantee claims to have  planted  medicinal  herbs  which
has had the capability of fighting cancer, but found that the  said  grantee
was exploiting the same for its own benefit  to  the  extent  possible.   In
that, no benefit has been derived by the State Government or its  people  to
any extent except the lease rent  of  Rs.1250  per  Hectare  per  year.  The
Court, accordingly, held that the allotment  in  favour  of  Dabur  Research
Foundation was surreptitious and  has  benefitted  only  the  grantee  Dabur
Research Foundation.








8.    Having analysed the case of Dabur Research Foundation, the High  Court
proceeded to hold that similar situation obtains  even  in  respect  of  the
appellant (in C.A. arising out of SLP  (Civil)  No.  39898/2012-Tata  Energy
Research Institute), who has been given orchards spread over to  the  extent
of 7.50 Hectares at an yearly rental of Rs. 7245/- only.  No other  analysis
much less are any reasons found  in  the  impugned  judgment  qua  the  said
appellant Tata Energy Research Institute.  The  sum  and  substance  of  the
conclusion of the High Court, is that, the State did not  take  recourse  to
due diligence to ascertain as to how the revenue  from  the  land  could  be
optimized by the State.  On this reasoning,  the  High  Court  proceeded  to
cancel the grants and the lease granted even in favour of the appellant  (in
appeal arising out of SLP (Civil) No. 4886/2013-Akhilesh  Kala).   The  High
Court also issued direction to the three  grantees  to  hand  over  physical
possession of the land in question  to  the  State  Horticulture  Department
within a period of six months  from  the  date  of  the  order.   The  Court
further directed that after possession is taken  the  State  should  utilize
the orchards and must make an endeavour to  ascertain  at  least  what  best
possible price it can get for  the  same  before  exploring  the  option  of
private-public  partnership  arrangement  for  exploitation  of   the   said
orchards.





9.    This decision is the subject matter of challenge in  the  two  appeals
before us.  Notably, Dabur Research Foundation has not chosen  to  challenge
the decision.  It is  only  the  legal  heirs  of  Akhilesh  Kala  (original
Respondent No. 26 in  Writ  Petition)  and  The  Energy  Research  Institute
(formerly known as Tata Energy Research Institute) (original Respondent  No.
25 in Writ Petition) who have questioned the correctness of the  view  taken
by the Division Bench of the High  Court  and  in  particular  quashing  and
setting aside of the grants and lease deeds executed in their favour by  the
State. The grievance of the Energy  Research  Institute  is  that  the  High
Court has completely glossed over the stand taken by it on  affidavit  filed
to oppose in the Writ Petition.








10.   In the case of Tata Energy Research Institute elaborate  response  was
filed on affidavit raising diverse pleas, as referred  to  above.   None  of
the contentions so raised have been  dealt  with  by  the  High  Court.   As
regards the heirs of Akhilesh Kala, it is  submitted  that  the  High  Court
could not have proceeded with the hearing of the  Writ  Petition  against  a
dead person.  In any case,  the  High  Court  should  have  ascertained  the
factual position about service of notice on respondent No.26  as  impleaded.
No satisfaction in that behalf is noted in  the  impugned  judgment.  It  is
cardinal that in absence of service  on  the  named  respondent,  the  Court
should  be  loathe  to  proceed  with  the  matter  finally   against   such
respondent; and more so in the backdrop of the dictum of the  Supreme  Court
whilst remanding the Writ Petition that the nominees  should  be  heard  who
were not made parties in the Writ Petition, as was originally filed.







11.   Having considered the rival submissions, we desist from examining  the
controversy about the merit of the allotment to the  respective  appellants.
For, we are inclined to relegate the appellants and respondent No.1 as  also
the State Authorities in the respective appeal for  reconsideration  of  the
matter afresh qua these appellants.








12.   This Court, on the earlier occasion, had  plainly  observed  that  the
High Court in the first place must examine the question  whether  the  stand
taken by the State Government that the stated policy to lease  out  orchards
to the private persons (including appellants herein) on nomination  on  long
term basis was in public interest or not; and to  do  so  after  giving  due
opportunity  to  the  nominees  (such  as  the  appellants  before  us)   by
impleading them as party respondents in the Writ Petition.  Admittedly,  the
appellants  were  directed  to  be  impleaded  as  respondents  25  and   26
respectively, in the remanded Writ Petition.








13.   In the impugned judgment, however, there is absolutely  no  discussion
on the question whether the policy of the State Government,  which  was  the
subject  matter  of  challenge  in  the  remanded  Writ  Petition,  was   in
accordance with law and in public interest or not.  If it were to  be  found
that such a policy is permissible in law; and  that  the  allotment  to  the
respective respondents 25 and 26 in the said remanded Writ Petition  was  in
conformity with that policy,  the  end  result  would  be  quite  different.
Further, the High Court has in any case failed to analyze the diverse  pleas
available to the appellants herein and more so  specifically  taken  by  the
appellant (in C.A. arising out of SLP (Civil) No. 39898/2012) on  affidavits
whilst opposing the remanded Writ Petition on the factual  matrix  including
about  the  engagement  of  the  said  appellant  in  activities  which  are
beneficial to the locals and in larger public interest.   According  to  the
said appellant, they have  not  only  complied  with  all  the  stipulations
required to be fulfilled in terms of the State Government  policy  but  were
scrupulously adhering to all the terms and conditions of lease  executed  in
their  favour  without  any  exception.  Moreover,   even   the   periodical
inspection of orchards managed by the said appellant has been  done  by  the
competent authority, unlike in the case of Dabur Research Foundation.








14.   We are in agreement with the appellants  that  without  analyzing  the
contentions specifically raised by them, it was improper to make a  sweeping
observation against these appellants with reference to  the  case  of  Dabur
Research Foundation.








15.   Indubitably, no discussion about the stand  taken  by  the  respondent
No. 25 on affidavits can be discerned from the impugned judgment.  In  other
words, the decision of the Division Bench qua the respondent  No.25  in  the
remanded Writ Petition is sans any  reason,  if  not  cryptic.  That  cannot
stand the test of judicial scrutiny especially when the decision results  in
serious civil consequences to the party; and more so when this  Court  while
remanding the matter had made it clear to hear all the  nominees  likely  to
be affected by the decision and to answer all relevant issues including  the
justness of the Government Policy.








16.   Reverting to the case  of  appellant  (in  C.A.  arising  out  of  SLP
(Civil) No.4886/2013) their predecessor in  title  had  already  expired  on
20th  October  2010.   If  so,  the  High  Court  could  not  have  directed
impleadment of a  dead  person  as  respondent  No.26.   Further,  there  is
nothing in the impugned judgment to indicate  that  the  High  Court  before
proceeding to finally dispose of the Writ Petition,  reassured  itself  that
respondent No.26 has been duly served.  All that is mentioned  in  paragraph
4, in the last sentence, is that, Akhilesh Kala,  despite  notice,  has  not
responded. However, on the factum as to when such service  was  effected  or
whether the service was complete in all respects, no  observation  is  found
in the impugned judgment.  The  appellants  in  the  said  appeal,  however,
asserted that no notice  was  received  at  the  known  residence  of  their
predecessor.  The fact remains  that  the  respondent  No.26  could  not  be
represented, being a  dead  person.   The  concomitant  is  that,  the  Writ
Petition proceeded for final hearing without hearing  the  said  respondent.
This was against the spirit of the remand order passed by this Court.





17.   Considering the above, we deem it appropriate to quash and  set  aside
the impugned judgment and order only qua appellants herein (the  respondents
25 and 26 in the Writ Petition); and  further  direct  remand  of  the  Writ
Petition to the High Court for reconsidering it afresh only with  regard  to
them as regards the validity of grants in favour  of  Tata  Energy  Research
Institute  (now known as Energy and Resources Institute); and two grants  in
favour of Akhilesh Kala as the appellants herein claim to be the  heirs  and
legal representatives of deceased Akhilesh Kala.







18.   We once again make it clear that we may  not  be  understood  to  have
disturbed  the  order  in  any  manner  operating  against  Dabur   Research
Foundation (original respondent No.14, in the remanded Writ Petition).








19.  Considering the fact that the Writ Petition has been filed in the  year
2003 and is required to be remanded for the second time by  this  Court  and
in view of the nature of issue involved and the substantial period of  lease
term is already exhausted, the High Court is requested  to  dispose  of  the
remanded Writ Petition expeditiously, preferably  within  six  months.   The
High Court may consider  the  request  of  the  concerned  parties  to  file
affidavits and further pleadings as may be necessary.  All questions in  the
remanded writ petition in terms of this order, are left open.








20.   The appeals are allowed in the above terms with no order as to costs.



                                                            ..………………………….CJI
                                                                (T.S.Thakur)


                                                             ..……………………………J.
                                                           (A.M. Khanwilkar)


                                                             ……………………………..J.
                                                          (D.Y. Chandrachud)
New Delhi,
Dated: 22nd July, 2016


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[1]     [1979 SCR (3) 1014 = (1979) 3 SCC 489]


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