Vinod Medical Systerms PVT. LTD. vs. Raipur Development Authority

Facts

The petitioner, Vinod Medical Systems Pvt. Ltd., is a permanent leaseholder of a residential property in Raipur Development Authority (RDA) Colony. The petitioner applied for freehold rights on September 8, 2021, and November 2, 2021, depositing the requisite fees of Rs. 5,60,924/- on October 30, 2021. Despite compliance with all formalities, including a previous writ petition (WPC No. 3486 of 2022) which resulted in a No Objection Certificate being issued on September 9, 2022, the freehold rights have not been granted. The respondent, Raipur Development Authority, states that the delay is due to the seizure of relevant files by the Economic Offences Wing (EOW) in connection with an investigation into alleged unlawful benefits conferred under Scheme No. 32, and a subsequent Board resolution excluding freehold conversions pending the investigation.

Held

The Court held that the petitioner had duly complied with all conditions for the grant of freehold rights, including depositing the premium amount and fulfilling procedural requirements. It was also noted that the respondent RDA withheld these rights citing the pendency of an EOW investigation and a consequential Board decision. The Court acknowledged the Board's policy decision to await clearance from the EOW before proceeding with freehold rights, and stated that courts generally do not interfere with policy decisions unless they are arbitrary, unreasonable, or discriminatory. The Court found nothing on record to suggest that the decision to await EOW clearance was unreasonable or arbitrary, deeming it guided by administrative caution and compliance with law enforcement proceedings. Therefore, no positive direction could be issued at that stage for the execution of a freehold lease deed. However, to ensure administrative diligence and prevent indefinite delay, the Court directed the petitioner to file a fresh representation, and upon submission, the respondent authority was directed to approach the EOW for necessary permission/clearance within four weeks, and thereafter proceed to grant freehold rights if permission was granted.

Key Issues

1. Whether the respondent authority's inaction in granting freehold rights to the petitioner, despite due compliance with all statutory requirements and procedural formalities, is arbitrary, illegal, and unsustainable in law, particularly in light of the principles of promissory estoppel and legitimate expectation (as argued by the petitioner)? 2. Whether the respondent authority's reliance on the pendency of an EOW investigation and a subsequent Board resolution to withhold freehold rights is a valid ground for refusal, and if so, whether the policy decision is reasonable and non-discriminatory under Article 14 of the Constitution (as argued by the respondent)? Petitioner's Contentions: The petitioner argues that the respondent's inaction is arbitrary and illegal, causing grave hardship. They contend that the principles of promissory estoppel and legitimate expectation apply, as they altered their position based on assurances. They also claim infringement of fundamental rights under Articles 14, 19, and 21, including the right to property under Article 300-A. Respondent's Contentions: The respondent argues that the delay is due to an ongoing EOW investigation and a Board resolution that specifically excludes freehold conversions pending the investigation's outcome. They contend that this policy decision is guided by administrative caution and compliance with law enforcement proceedings, and therefore, not arbitrary or unreasonable.