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  • section 3(1) of the Capital of the Punjab (Development and Regulations) Act, 1952 (hereinafter called the Act).
  • rule 5(2) of the Chandigarh (Sale of Sites) Rules.
  • rule 5(2) of the Chandigarh (Sale or sites) Rules
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  • section 3(1) of the Capital of the Punjab (Development and Regulations) Act, 1952 (hereinafter called the Act).
  • rule 5(2) of the Chandigarh (Sale of Sites) Rules.
  • rule 5(2) of the Chandigarh (Sale or sites) Rules
Smart Summary

Judicial Opinion Summary — A.S. Bains, J.

Factual and Procedural Background

The Chandigarh Administration framed, towards the end of 1968, a scheme under section 3(1) of the Capital of the Punjab (Development and Regulations) Act, 1952 for allotment of plots in Sector 38 (and other developed sectors) specifically for Indians settled abroad. The scheme specified, among other things, prices for different plot categories, and required applicants to remit 10% of the price as earnest money within 21 days and the balance within two months of allotment.

The petitioner, an Indian resident of Malaysia, applied on 31 January 1969 for a 2-kanal (1,000 sq. yd.) plot and enclosed a bank draft of Rs. 3,360/- as the 10% earnest money calculated at Rs. 33.60 per sq. yd., the rate mentioned in the scheme. He indicated preferences for larger plots (3 or 4 kanals) but expressly requested to be consulted if an alternate allotment would be made. After repeated reminders over several years, he received (on 3 September 1974, memorandum annexure P.15) a communication proposing allotment only of a one-kanal plot in Sector 38 on leasehold at the rate of Rs. 104/- per sq. yd., subject to alteration if another auction were held prior to allotment. The petitioner represented against this on 28 September 1974; the Chief Commissioner declined to intervene.

The petitioner filed a writ petition challenging the Administration’s conduct and the impugned memorandum (annexure P.15). The Chandigarh Administration filed a return raising a preliminary objection that no legal right of the petitioner had been infringed, characterising the sale process as contractual and the petitioner’s application as an offer that the Administration could accept or reject.

Legal Issues Presented

  1. Whether, having framed a scheme under section 3(1) of the Act and published a price (Rs. 33.60 per sq. yd. for a 2-kanal plot), the Chandigarh Administration was bound to allot a plot to an applicant who applied in accordance with the scheme and deposited the prescribed 10% earnest money under rule 5(2) of the Chandigarh (Sale of Sites) Rules.
  2. Whether the Administration's prolonged inaction (over 5½ years) and subsequent attempt to allot a different sized plot on different terms and at a materially higher price (Rs. 104 per sq. yd.) amounted to arbitrary or unlawful conduct warranting judicial intervention under Article 226.
  3. Whether the petitioner's remedy lay in mandamus or other equitable relief compelling the Administration to perform obligations arising from the scheme and representations on which the petitioner had relied.

Arguments of the Parties

Petitioner's Arguments (as presented)

  • Once the Administration formulated and published the scheme under section 3(1) of the Act and specified a rate (Rs. 33.60 per sq. yd.), it could not subsequently demand a higher price from an applicant who had applied in accordance with the scheme and paid the prescribed earnest money under rule 5(2) of the Chandigarh (Sale of Sites) Rules.
  • The Administration’s long delay (about 5½ years) in deciding the application and then proposing different and less favourable terms was arbitrary, unfair and prejudicial to the petitioner.
  • The petitioner relied on precedent authorities (including Union of India v. Anglo Afghan Agencies; Century Spinning & Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council; Amrit Vanaspati Company Ltd. v. The State of Punjab) supporting enforcement of administrative schemes or representations where citizens act to their detriment.

Respondents' Arguments (as presented)

  • The Chandigarh Administration took a preliminary point that no legal right of the petitioner had been infringed; sale of plots is a contractual matter, and the petitioner’s application was merely an offer which the Administration could accept or reject.
  • Reliance was placed on Lekhraj Sathramdas Lalvani (A.I.R. 1966 S.C. 334) to argue that no mandamus could issue because there was no infringed legal right.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India v. Anglo Afghan Agencies (A.I.R. 1968 S.C. 718) Courts can, in appropriate cases, compel performance of obligations imposed by departmental schemes; the Government is not exempt from equity where citizens have acted to their detriment in reliance on governmental representations. The Court relied on this authority to support the proposition that the Administration’s published scheme and representations can give rise to enforceable obligations and that the petitioner's reliance on the scheme justified judicial intervention to compel performance.
Century Spinning & Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council (1970 1 SCC 582) An aggrieved party asserting that a public authority acted unlawfully, arbitrarily or unjustly is entitled to a hearing on merits. The Court used the principle to validate the petitioner’s entitlement to have his grievance heard and to support the availability of writ relief where public action is arbitrary or prejudicial.
Amrit Vanaspati Company Ltd. v. The State of Punjab (1975 P.L.R. 557) Cited by the petitioner (specific rule/principle not quoted in the opinion text). The opinion records that the petitioner relied upon this authority, but it does not elaborate any specific application or quotation from the case in its reasoning.
Lekhraj Sathramdas Lalvani (A.I.R. 1966 S.C. 334) Discusses the function of writs to compel performance of public duties and keep subordinate tribunals/officers within their jurisdiction (as referenced in the opinion). The respondents relied on this case to oppose mandamus. The Court held that this authority did not assist the Administration; on the contrary, it supports the notion that writs can compel public authorities to perform statutory/public duties and thus helps the petitioner.
Union of India v. K.P. Joseph Administrative orders can, in some cases, confer rights and impose duties; natural justice principles may apply. The Court cited the proposition to underline that administrative communications/schemes may create enforceable expectations or rights and that such orders may be subject to judicial scrutiny.

Court's Reasoning and Analysis

The court's analysis proceeded from established and admitted facts: the Chandigarh Administration framed a scheme under section 3(1) of the Act which expressly specified (in para 4) a price of Rs. 33.60 per square yard for 2-kanal plots; the petitioner applied on 31 January 1969 in accordance with the scheme and rule 5(2) of the Chandigarh (Sale of Sites) Rules, and deposited the prescribed 10% earnest money. The Administration acknowledged receipt of the draft but thereafter remained largely silent for more than five years.

The impugned memorandum (annexure P.15) dated 3 September 1974 proposed allotment on different terms (one kanal, leasehold, at Rs. 104 per sq. yd., and subject to change if another auction occurred). The court viewed this course as arbitrary and prejudicial. It held that once the Administration had framed the scheme and the petitioner had complied with the scheme's conditions, the Administration was bound to allot the plot in accordance with the scheme unless it took earlier, express steps to reject the application and refund the earnest money.

The court emphasized public servants' duty to act efficiently and expeditiously in accordance with rules and policies, and found the Administration's conduct—keeping the application undealt with for years and then altering the terms without earlier rejection or refund—to be inconsistent with those duties. The court found the respondents' preliminary objection (that no legal right was infringed) untenable because the petitioner had a legal right to have his application processed and decided expeditiously under the scheme and rules.

In support of these conclusions, the court relied on a string of Supreme Court authorities which establish that: (a) administrative schemes and representations can create enforceable obligations in equity where citizens act to their detriment; (b) courts can compel departmental authorities to perform obligations imposed by schemes in appropriate cases; and (c) administrative orders may confer rights and attract principles of natural justice. The court rejected respondent reliance on Lekhraj as supportive of respondents, noting that the principle of writs compelling public duties actually favours the petitioner.

Having applied those principles to the facts (the scheme, the petitioner’s compliant application and payment, the long inaction, and the subsequent change of terms), the court concluded that the Administration’s conduct was arbitrary, amounted to prejudice to the petitioner, and warranted judicial correction.

Holding and Implications

Holding: The petition is ALLOWED. The Court quashed the impugned memorandum (annexure P.15) and directed the Chandigarh Administration to allot a two-kanal plot to the petitioner in Sector 38 at the rate of Rs. 33.60 per square yard as specified in the scheme.

Specific directions and immediate consequences:

  • If a two-kanal plot is not available in Sector 38, the Administration is directed to allot a two-kanal plot in some other sector at the aforesaid rate (Rs. 33.60 per sq. yd.) within one month.
  • The petitioner was awarded costs of the petition; counsel fee fixed at Rs. 300/-.

Broader implications: The opinion enforces the proposition that administrative schemes and representations can create enforceable obligations and that administrative inaction or arbitrary change of terms after a citizen has relied on a scheme may attract equitable and writ relief. The Court did not purport to lay down a novel rule of law beyond applying these established authorities to the facts; the direct effect is the quashing of the impugned order and the specific allotment and cost directions documented above.

This summary is based exclusively on the content of the provided opinion and does not add facts or inferences beyond the text.

    Sangat Singh v. Union Territory Chandigarh And Anothers

    A.S Bains, J.:— The Chandigarh Administration sometime in the end of year 1968 framed a scheme for the allotment of plots in Sector 38 as also in other developed Sectors for the Indians settled abroad. This scheme is stated to have been framed under section 3(1) of the Capital of the Punjab (Development and Regulations) Act, 1952 (hereinafter called the Act). The scheme (Annexure P1) is in the following terms:—

    “A copy of the plan indicating the location of various Sectors and distribution of plots is enclosed for reference and information.

    2. In order to help the Indians residing abroad in settling at Chandigarh, it has been decided to reserve Sector 38 for them. A brief sketch of these sub-Sectors showing various sires and location of plots as well as their serial Nos. is also enclosed for reference. Plots in the developed Sectors may also be allotted subject to availability.

    3. Plots will be allotted to those Indians who wish to settle in this Sector, out of the plots shown in this plan. As such you are requested to indicate your preference in respect of the plot or plots you want to purchase. Efforts will be made to allot a plot of your choice, in case there is no claimant for the same. In the event of more than one claimant in respect of one plot, lots may be draws and plots will be offered accordingly.

    4. The price is based on the average price fetched by similar category of plots in the last 2 auctions. The price of different categories of plots at present is as under:—

    (i) xxx

    (ii) xx

    (iii) xxx

    (iv) Rs. 33.60 per square yard for plots of 2 Kanal category (1000 square yards)

    (v) xxx

    (vi) xxx

    You are requested to remit 10 per cent of the price of the plot you require as earnest money to the Estate Officer, Chandigarh Administration, Chandigarh, within 21 days of receipt of this letter. The balance amount would be payable within two months from the date of allotment.

    5. xxx

    6. xxx

    2. In para 4 of the scheme, it is mentioned that the price of a 2 Kanal plot would be @ Rs. 33.60 per square yard and that 10% of the price of the plot is required to be remitted as earnest money along with the application for allotment of the plot. It was in accordance with this condition that the petitioner, who is an Indian settled in Malaysia, submitted an application for allotment of a 2 Kanal plot on January 31, 1969 (annexure P2) by annexing a bank draft of Rs. 3,460/-, benig 10 per cent of the purchase price of the plot. In the forwarding letter (annexure P4) vide which the petitioner had sent the application for allotment of the plot, he had mentioned his preference for 3 or 4 Kanal plots and had further stated that in case any plot of his preference was not available, he may be consulted before an alternate allotment is made. The petitioner heard nothing from respondent No. 3 for seven months. So he sent a reminder letter on July 12, 1969 (annexure P5). However, respondent No. 3 acknowledged the receipt of the demand draft of Rs. 3,360/-, vide letter dated August 29, 1969 (annexure P6). In a subsequent letter dated September 24, 1969 (annexure P7) respondent No. 2 informed the petitioner that as 3 or 4 Kanal plots were not available for allotment in Sector 38 he might intimate if he was willing to have a two Kanal plot in the said Sector. This letter was superfluous because the petitioner had already stated in his application for allotment of plot (annexure P4) that he be allotted 1,000 square yards (2 Kanals) plot and accordingly he had sent bank draft for Rs. 3,360/- being 10% of the price of the plot. It was averred that the matter again remained pending for a considerably long time and the petitioner sent a letter dated October 12, 1970 (annexure P8) and another letter dated June 20, 1972 (annexure P10) to respondent No. 3, who ultimately vide letter dated July 15, 1972 (annexure P11) informed him that his case for allotment of plot had been referred to the Government and that he would be informed as and when the decision was arrived at. Having not been informed of the decision of the Government for another three month?, the petitioner wrote letters dated October 10, 1972 (annexure P. 12) and dated March 7, 1973 (annexure P. 14) and was ultimately informed by respondent No. 2, vide memorandum dated September 3, 1974 (annexure P. 15) that a plot of one kanal was proposed to be allotted to him in Sector 38 at the rate of 104 per square yard and that the allotment will be on lease-hold basis and besides premium, ground rent shall be charged. It was further mentioned in this memorandum that the rate of Rs. 104/- per square yard was subject to alteration in case another auction was held before actual allotment of the plot to the petitioner. The petitioner then submitted a representation dated September 28, 1974 (annexure P. 161 to respondent No. 2 who vide memo dated November 23, 1974 (annexure P. 17) informed the petitioner that a plot cannot be allotted to him at the rate of Rs. 33.60 The petitioner then saw the Chief Commissioner who refused to intervene. It is against this attitude of Chandigarh Administration and the impugned order (annexure P. 15) that the present writ petition has been filed.

    3. Return has been filed on behalf of the Chandigarh Administration wherein a preliminary objection has been taken that no legal right of the petitioner has been infringed and, therefore, this petition is not competent. It is stated that the sale of plots by the Chandigarh Administration to any party is a matter of contract; that the application for allotment of the plot made by the petitioner was only an offer to purchase a certain plot at a certain price and that the Chandigarh Administration was within its right to accept or reject the offer.

    4. Mt. Wasu, learned counsel for the petitioner, has contended that once the Chandigarh Administration had agreed to sell the plot at the rate of Rs. 33.60 per square yard per the scheme prepared by it under section 3 of the Act it was not subsequently justified in asking the petitioner to pay the price of the plot at the rate of Rs. 104/- per square yard in support of his argument he has relied upon The Union of India v. Anglo Afghan Agencies . A.I.R 1968 S.C 718., Century Spinning & Manufacturing Co. Ltd. v. The Ulhasanagr Municipal Council . 1970 1 SCC 582, and Amrit Vanaspati Company Ltd. v. The State of Punjab . 1975 P.L.R 557.. Mr. Anand Sarup, learned counsel for the respondents, relying upon Lekhraj Sathramdas Lalvani v. (In Both The Appeals) . A.I.R 1966 S.C 334., contends that as no legal right of the petitioner is impeached no mandamus can be issued by this Court.

    5. I have carefully considered the respective contentions of the counsel for the parties and find merit in what Mr. Wasu says. The formulation of the scheme by the Chandigarh Administration for the allotment of plots in Sector 38 to the Indians settled abroad is not denied it is also not denied that in pursuance of the scheme the petitioner sent his application along with 10% of the purchase price of the plot in accordance with rule 5(2) of the Chandigarh (Sale of Sites) Rules. All the facts mentioned in the petition are accepted. It is also admitted that the petitioner had been sending reminders. In such a situation, when the Chandigarh Administration had itself formulated a scheme under section 3(1) of the Act and the petitioner sent the application as required under rule 5(2) of the Chandigarh (Sale or sites) Rules with 10% of the price of a 2 Kanal plot @ Rs. 33.60 per square yard (which rate was itself mentioned in the scheme the Chandigarh Administration was bound to allot the plot to the petitioner in accordance with the scheme. The application for allotment of the plot was made by the petitioner on January 31, 1969 (annexure P. 2). The respondent Chandigarh, Administration remained silent and in July, 1972, the petitioner was merely informed that his case for the allotment of a plot was under consideration of the Government. Further, it was only in September, 1974, that the impugned letter (annexure P. 15) was sent to the petitioner intimating therein that a plot of one Kanal size only was available for allotment to him on lease hold basis at the rate of Rs. 104/- per square yard subject to alteration in case another auction was held before actual allotment of the plot to him. This action of the Administration is arbitrary and to the great prejudice of the petitioner. If the petitioner was not to be allotted the plot of the size at the rate and other terms applied for, the Administration could decide it earlier but they took 5½ years to take a decision which is the height of inefficiency and red-tapeism. The concerned officials are public servants who are to work efficiently and expeditiously in accordance with rules and they cannot take arbitrary decisions.

    6. The contention of Mr. Anand Swaroop that no legal right of the petitioner has been infringed is without any merit. The petitioner had sent the application for allotment of a plot in accordance with rule 5(2) of the Chandigarh (Sale of Sites) Rules and deposited 10% price as the earnest money as required under the scheme framed by the Administration under section 3(1) of the Act. The petitioner had the legal right that his application was processed and decided expeditiously in accordance with the conditions laid down in the scheme but it took the Administration more than 5½ years to decide the matter and that, too, against the scheme. Every citizen has a right to be dealt within accordance with the policy, the scheme or the rules made by the Government or the Administration. Mr. Anand Swarup also did not show me any record as to in which manner the application of the petitioner was dealt with. This shows that somebody in the Administration had kept the application undealt with and did not even lay the same before the authorities and it was only as a result of the repeated reminders sent by the petitioner that the impugned letter dated September 3, 1974 (annexure P. 15) was sent to him. The public servants are expected to perform their duties to fulfill their assurrances. It was expected of the Administration to have dealt with and decided the application of the petitioner efficiently and expeditiously. The impugned letter of the Chandigarh Administration only mentions that they proposed to allot about one Kanal residential plot to the petitioner in Sector 38 at the rate of Rs. 104/- per square yard. It is not known as to how the Administration can demand the price of the plot at the rate of Rs. 104/- per square yard when it had earlier entertained the application of the petitioner and accepted the earnest money in accordance with the scheme. It was open to the Administration to reject the application and refund the earnest money if it was not in accordance with the scheme but it chose to keep mum for over 5½ years. The earnest money of Rs. 3360/- received by the Chandigarh Administration in February, 1969, is still lying with them.

    7. Their Lordship of the Supreme Court in the Union of India v. Ms. Angle Afghan Agencies, etc., have held as under:—

    “Granting that it was executive in character, the Courts have the power in appropriate cases to compel performance of the obligations imposed by the Schemes upon the departmental authorities. It could not be said that the executive necessity releases the Government from honouring its solemn promises relying on which citizen have acted to their detriment. Under the constitutional set-up, no person may be deprived of his right or liberty except in due course of and by authority of law; if a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law common or statute the Courts will be competent to, and, indeed, would be bound to protect the rights of the aggrieved citizen.”

    8. Their Lordships of the Supreme Court in Centuary Spinning & Manufacturing Co. Ltd. v. The Ulhasnagar Municipal Council, have observed as follows:

    “A party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, highhanded, arbitrary or unjust, is entitled to a hearing of its petition on merits.”

    9. In this case, the High Court had dismissed the petition under Article 226 of the Constitution in limine and aggrieved by the order of the High Court, the appeal was filed in the Supreme Court which made the above observation?. It was further observed in this decision as follows:—

    “Public bodies are as much bound as private individuals to carry out representations of facts and promised made by them, relying on which other persons. The altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person which acts in the promise; when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation if the contract be not in that form may be enforced against it in appropriate cases in equity. In Union of India v. Indo-Afghan ??? Ltd. (A.I.R 1968 S.C 718), this Court held that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice, relying upon the representations as to its future conduct made by the Government.

    If our nascent democracy is to thrive, different standards of conduct for the people and the public bodies cannot ??? be permitted. A public body is, in our juegment, not exempt from liability to any out its obligation arising out of representations made by if relying upon which a citizen has altered his position to his prejudice.”

    10. In another decision in Union of India v. K.P Joseph,5 their Lordships of the Supreme Court have observed as follows:—

    “To say that an administrative order can never confer any right would be too wide a proposition. There are administrative orders which confer rights and impose duties. It is because an administrative order can abridge or take away rights that Courts have imported the principle of natural justice of audi alteram partem into this area.”

    11. The ratio of there Supreme Court authorities is that the authorities are bound by their promises and respresetations on which the citizens have relied and such promises are enforceable in equity in appropriate cases. The Courts have the power in appropriate cases compel performance of the obligations imposed by he Schemes upon the departmental authorities Lekhraj Sathramdas Lalvani's case (supra) relied upon by Mr. Anand Swarup is of no help to the Chandigarh Administration; it rather helps the petitioner. In this decision it was observed by their Lordships of the Supreme Court that the chief function of the writ is to compel the performance of public duties prescribed by statute and to keep the subordinate tribunals and officers exercising public functions within the limits of their jurisdictions. Moreover, this authority has no application to the facts of the present case. There is another aspect that the impugned order (Annexure P. 15) was passed without hearing the petitioner. For the lessens recorded above I allow this petition, quash the impugned order (annexure P. 15) and direct the Chandigarh Administration to allot, a two Kanal plot to the petitioner in Sector 38 at the rate of Rs. 33.60 per square yard as mentioned in the scheme and in case the plot be not available in Sector 38, the same shall be allotted to him in some other Sector at aforesaid rate within one month. The petitioner shall be entitled to the costs of the costs of this petition. Counsel fee Rs. 300/-.

    12. Petition allowed.

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    Sangat Singh v. Union Territory Chandigarh And Anothers
    (Dec 10, 1975)