J. S. LUTHRA ACADEMY & ANOTHER versus STATE OF JAMMU AND KASHMIR & OTHERS

Citation: [2018] 10 S.C.R. 1098 · Decided: 30-10-2018 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 7 · see the full citation network in Lexace

Judgment (excerpt)

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1098
SUPREME COURT REPORTS
[2018] 10 S.C.R.
   J. S. LUTHRA ACADEMY & ANOTHER
v.
STATE OF JAMMU AND KASHMIR & OTHERS
(Civil Appeal Nos. 7184-7185 of 2013)
OCTOBER 30, 2018
[N. V. RAMANA AND MOHAN M. SHANTANAGOUDAR, JJ.]
Natural Resources Allocation:
Allotment of land – To educational institution – By the State –
For shifting the institution from a Waqf  property, pursuant to order
by the Waqf Authority to evict the premises – Out of the 4 kanals
allotted land State charged the institution only for 2 kanals
@ Rs. 8,00,000/- per kanal while 2 kanals were allotted free of cost
– Writ petitions challenging the allotment, on the ground interalia
that the property was not put in auction – Single Judge dismissed
the writ petitions – Division Bench of High Court quashed the
allotment – On appeal, held: When there is transfer of land by the
State, allocation must be guided by consideration of the common
good as per Art. 39(b) and must not be violative of Art. 14 – This
does not necessarily entail auction of the resources – It is discernible
from the facts and circumstances of the case that the land was allotted
keeping in mind public interest in education of hundreds of children
– The circumstances of the case warranted deviation from the
standard procedure of auction, to prevent prejudicing future of the
children studying at the institution – Moreover, the allotment was in
the nature of an exchange of the Waqf land – The action of the
State in allotting the land does not suffer from vice of arbitrariness
as the same is backed by a welfare purpose – the action of the State
was fair, reasonable, transparent, unbiased, without favoritism and
nepotism – However, the action of the State in allotting 2 kanals
free of cost was bad in law as there is nothing on record to show
that the institution was being run purely for charitable and
educational purposes – The allotment/transfer (of the land allotted
fee of cost) can be saved by giving the transferee an opportunity to
make good the shortfall in the consideration by paying for the two
kanals @ Rs. 8,00,000/- per kanal with interest @ 6%  per annum
from the date of allotment, till the date of payment – Constitution of
India – Arts. 14 and 39(b) – Auction. – Tender.
1098
[2018] 10 S.C.R. 1098
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Constitution of India:
Art. 14 – Arbitrariness under – Test of – Held: An executive
action would not be arbitrary merely because the action is not
explicitly stated to have been taken for a particular reason or based
on a particular principle which in itself is reasonable – It is open to
the Court to see whether such a reasonable principle is discernible
from the facts and circumstances of the case.
Arts. 38 and 39 – Rights under – Held: The rights u/Arts. 38
and 39 covers means of livelihood, health and the general well-
being of all the sections of the people in society, of which education
is an important part.
Auction/Tender:
Need of public auction or floating of tenders – In case of
allotment/transfer of land by State – Held: Generally the State should
resort to public auction or floating of tenders for transfer of its
land – However, non-floating of tender or non-conducting of public
auction cannot be deemed in all cases to be an arbitrary exercise
of executive power, if the decision of the executive is result of a fair
decision-making process – Constitution of India – Art. 14.
Allowing the appeals, the Court
HELD: 1.1 Generally, when any land is intended to be
transferred by the State, or any State largesse is to be conferred,
resort should be had to public auction or transfer by way of inviting
tenders from the people. The State must ensure that it receives
adequate compensation for the allotted resource. However, non-
floating of tender or non-conducting of public auction would not
be deemed in all cases to be an arbitrary exercise of executive
power. The ultimate decision of the executive must be the result
of a fair decision-making process. The allocation must be guided
by the consideration of the common good as per Article 39(b),
and must not be violative of Article 14. This does not necessarily
entail auction of the resource; however, allocation of natural
J. S. LUTHRA ACADEMY v. STATE OF JAMMU AND KASHMIR
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1100
SUPREME COURT REPORTS
[2018] 10 S.C.R.
resources to private persons for commercial exploitation solely
for private benefit, with no social or welfare purpose, attracts higher
judicial scrutiny and may be held to be violative

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