Summary
The Supreme Court preserved land allotted without auction to relocate a school, finding a genuine welfare purpose in protecting students and securing vacation of wakf premises. Auction was not an inflexible constitutional requirement on these facts. However, allotting half the land free lacked justification and caused a recoverable public loss. The Academy was directed to pay the Rs.16 lakh shortfall with 6% annual interest from allotment within three months, replacing cancellation and reauction.
Issues
- Whether the school-relocation allotment was arbitrary solely because no auction was held.
- Whether the free allocation of two kanals was justified.
- Whether the transfer could be preserved by recovery of the consideration shortfall.
Held
- Fairness, common good and adequate public consideration govern State allocation. Non-auction alone does not establish arbitrariness; a genuine social or welfare objective can justify another fair method on the circumstances. (¶ 6)
- Protecting the education of several hundred displaced students and securing peaceful vacation of the earlier premises were discernible welfare purposes. Their absence as express words in the correspondence did not negate the purposes evident from the surrounding facts. (¶¶ 7, 8, 9, 10)
- Rs.8 lakh per kanal reflected the prevailing auction price, but giving two kanals free was unjustified without material showing purely charitable operation. It caused a Rs.16 lakh shortfall in consideration. (¶¶ 11, 12, 13)
- The Academy had acted bona fide and constructed and operated the school for years. Because the monetary loss could be made good without lasting public harm, the transfer could be saved by requiring payment rather than cancellation. (¶¶ 13, 14)
- The Academy was to pay Rs.16 lakh for the two gratuitous kanals plus 6% annual interest from allotment until payment within three months. The Division Bench judgment was set aside and the Single Judge judgment restored with that modification. (¶¶ 15, 16)
Result
Appeals allowed. Cancellation/reauction judgment set aside; Single Judge judgment restored subject to payment of Rs.16 lakh plus 6% annual interest from allotment until payment within three months.