M.P. MATHUR AND ORS. versus D.T.C. AND ORS.

Citation: [2006] SUPP. 9 S.C.R. 519 · Decided: 24-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

M.P. MATHUR AND ORS. 
v. 
D.T.C. AND ORS. 
NOVEMEBR 24, 2006 
[ARIJIT PASAYA I AND S.H. KAPADIA, JJ.] 
Doctrine of promissory estoppel-Tenements constructed by Government 
under Scheme for Industrial Workers and Economically Weaker Sections of 
A 
B 
the Community-Scheme amended allowing transfer of allotted houses on C 
ownership basis to occupants-Government corporation passing resolution 
for transfer of allotted houses on ownership basis to occupants-Occupants 
already retired from service-Corporation having only 480 tenements to 
accommodate 254 industrial workers-Resolution not communicated to 
occupants-Sale consideration not fIXed-Occupants never called upon to 
make any payment-Corporation subsequently passing resolution rescinding D 
decision to sell tenements and refusing to implement policy decision of 
Government of India-Occupants filing suit for declaration of entitlement to 
transfer of tenements-Held, Scheme was only an enabling scheme and not 
mandatory and corporation not obliged to sell tenements under the scheme--
Resolution providing for transfer of ownership in favour of occupants was . E 
tentative and not final and binding decision and did not create any legal 
right by itself-Government required to strike balance between competing 
claims-Larger public interest precluded invocation of doctrine of promissory 
estoppel-In the facts held, there is no contract between parties and decree 
passed by trial court rightly set aside-Specific Relief Act, I963-Section 34. 
F 
Respondent -Delhi Transport Corporation constructed 300 tenements 
under Integrated Subsidised Housing Scheme for Industrial Workers and 
Economically Weaker Sections of the Community, 1952 and allotted the said 
tenements to the appelhmts-plaintiffs who were its industrial workers. 
Appellants have retired from service but have continued to reside in the said 
quarters. The said scheme was amended in 1978 allowing transfer of allotted G 
houses on ownership basis to the appellants. Respondent passed resolutions 
dated 18.4.1979 and 31.8.1979 to sell said service quarters to appellants. 
However, the respondent view its subsequent resolution dated 3.12.1979 read 
with resolution dated 2.3.1981 rescinded he decision to sell quarters I 
519 
H 
520 
SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R. 
A tenements to the appellants. Appellants filed suit in the High Court for 
declaration of entitlement to the transfer of the said tenements which was 
decreed by the Single Judge. Respondent preferred appeal which was allowed 
by the Division bench. Hence the present appeal. 
Appellants contended that it was not open to the respondent to question 
B the decision of Central Government to sell tenements to occupants; that a 
legal right was created in their favour vide resolution dated 18.4.1979 read 
with resolution dated 31.8.1979 by itself; and alternatively, that even ifthere 
was no legal right, an estoppel was created in their favour by the conduct of 
respondent as appellants had changed their position to their detriment relying 
C upon the promise made by respondent and therefore it was not open to 
respondent to resile from its earlier decision vide subsequent resolution dated 
3.12.1979. 
Respondent contended that the scheme was only an enabling scheme 
and did not create any obligation on respondent to sell their houses; that 
D decision dated 18.4.1979 was only tentative; that passing of resolution was 
never communicated to any of the appellants; that no letter of allotment was 
ever issued by the respondent; and that decision not to sell tenements was 
particularly taken as respondent had only 480 tenements which were 
inadequate for housing 5254 industrial wdrkers in April, 1979. 
E 
Dismissing the appeal, the Court 
F 
HELD: 1. Promissory estoppel is based on equity or obligations. It is 
not based on vested right. In equity the court has to strike a balance between 
individual rights on one hand and the larger public interest on the other hand. 
Freedom to contract is a common law civil liberty enjoyed by all persons. But 
when the Government is contracting with private parties this common law 
freedom is circumscribed by the principles of administrative law which 
requires larger public interest to be taken into account. The larger public 
interest is not only for accommodating retiree workmen but also to 
accommodate in-service workmen. Even applying the principles enshrined in 
G Article 39 (b) and (c) of the Constitution, eg

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