HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN AND * HONBLE MS. JUSTICE J.UMA DEVI
WRIT PETITION Nos.11826 OF 1993 and batch
04-01-2018
The Annavarappadu Hut Peoples Association, Ongole,Rep. by its President .Petitioner
The Government of A.P. rep. by its Secretary, Revenue Department & Ors. . Respondents
Counsel for Petitioners: Sri S. Ramachandra Rao, learned Senior
Counsel, Sri M.R.K. Chowdary, learned Senior Counsel, and Sri P. Sri Raghuram, learned Senior
Counsel, Sri M.Subba Reddy, Sri V.V.N. Narayana Rao, Sri K.R. Prabhakar, Learned Counsel.
Counsel for respondents: Sri M.L. Ali, learned Standing Counsel
for the respondent-Railways;
Learned Government Pleader for Revenue (Assignments), Sri K.Lakshman, Asst. Solicitor General, Sri R.S.Murthy,
Addl. CGSC, Sri P.Bhaskar, Sri P.Phalguna Rao, Learned Counsel.
<GIST:
>HEAD NOTE:
?Citations:
1.AIR 1979 SC 621
2.AIR 1992 SC 1075
3.AIR 1986 SC 806
4.AIR 1983 SC 848
5.AIR 1987 SC 2414
6.AIR 1971 SC 1021
7.AIR 1968 SC 718
8. (1904) I.L.R. 29 Bom. 580 = LR 28 IA 211
9.AIR 1986 SC 872
10. (2003) 1 SCC 341
11. (1989) 2 SCC 116
12. (1987) 2 SCC 720
HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN
AND
HONBLE MS. JUSTICE J. UMA DEVI
WRIT PETITION Nos.11826 OF 1993, 25593 OF 1995, 22635
OF 2004 AND 3287 OF 2007
COMMON ORDER : (per Honble the Acting Chief Justice Ramesh Ranganathan)
W.P. No.11826 of 1993 is filed by Annavarapupadu Hut
Peoples Association (HPA for short) seeking a writ of certiorari to
quash G.O.Ms. No.224 dated 15.03.1993 holding that the
members of the petitioner society were entitled for allotment of the
lands in their occupation. W.P. No.22593 of 1995 is also filed by
HPA seeking a writ of certiorari to quash the judgment and decree
passed in A.S. No.72 of 1992 dated 28.09.1995 on the file of the
Additional District Judge, Ongole.
W.P. No.3287 of 2007 is filed by the Rajiv Gandhi Railway
Co-op. House Building Society seeking a mandamus to declare the
action of the respondents, in not delivering possession of the
abandoned railway land of an extent of Ac.4.57 cts in Sy. No.63,
68, 69 and 70 of Mamidipalem village, Ongole Mandal as arbitrary
and illegal. W.P. No.24069 of 2008 is also filed by the Rajiv
Gandhi Railway Co-op. House Building Society seeking a
mandamus, to declare the inaction on the part of the respondents
in protecting the land, in an extent of Ac.4.54 cts situated in Sy.
No.4, 17, 18, 45, 46 and 47 of AHPA village, Ongole Mandal,
Prakasham District, which has been sought to be allotted to the
petitioners though G.O.Ms. No.224 dated 15.03.1993, as arbitrary
and illegal. By an interlocutory order passed on 05.11.2008, the
respondents were directed to maintain status quo.
G.O.Ms. No.224 dated 15.03.1993 was issued by the
Government of Andhra Pradesh allotting an extent of Ac.29.51 cts
of Railway land to the Ongole Taluq Non-Gazetted Co-operative
House Building Society Limited, and an extent of Ac.11.00 cts to
the Rajiv Gandhi Railway Employees Co-operative House Building
Society Limited, Ongole, on confirmation from the South Central
Railways for the market value fixed by the District Collector,
Prakasam. The District Collector was directed to collect the
market value of the land, at the specified rate, from the two house
building societies in advance, pay the same to the General
Manager, South Central Railways, Secunderabad; and take
possession of the subject land from the South Central Railway, and
then allot the same to the Society expeditiously.
G.O.Ms. No.224 records that the General Manager, South
Central Railway, Secunderabad had, by his letter dated
12.02.1992, requested the State Government to inform whether
they were willing to take over railway land of an extent of Ac.40.51,
along the siding of the Ongole railway yard at Ongole, Prakasam
District; the matter was referred to the District Collector, Prakasam
and the Commissioner of land revenue for their remarks/
recommendations; the District Collector had submitted his
proposal, vide letter dated 21.06.1992, for transfer of 40 acres of
railway land in AHNP village of Ongole Mandal for grant of house
sites for an extent of Ac.34.69 cts in favour of the Ongole Taluq
Non-Gazetted Officers, and an extent of Ac.5.82 cts in favour of the
Railway Employees at Ongole on payment of market value in
advance; the Commissioner of Land Revenue had, vide letter dated
04.07.1992, endorsed the proposal of the District Collector;
aggrieved by the proposal of the District Collector, the Rajiv
Gandhi Employees Society had filed W.P. No.9847 of 1992 before
the High Court which was disposed of with a direction to the
District Collector to allot land to the petitioners in proportion to the
strength of the members, of both the petitioner as also the
respondent society, after conducting a meticulous enquiry
regarding the genuineness of the members; the Ongole Taluq Non-
Gazetted Officers Co-operative House Building Society, and the
Rajiv Gandhi Employees Society, had entered into a compromise,
and had filed the same vide letter dated 11.02.1993, pursuant to
the order of the High Court in W.P. No.9847 of 1992 dated
30.09.1992; and, in view of the compromise entered into by both
the Societies, the District Collector had finally submitted revised
proposals in his letter dated 13.02.1993 for allotment of the
subject land as house sites on payment of the market value of
Rs.80,000/- per acre, to be paid in advance by both the societies in
respect of the subject land. The State Government directed the
District Collector to collect the market value of the subject land at
the rates specified in the said G.O. from the two house building
societies in advance, pay the same to the General Manager, South
Central Railway, take possession of the subject land from the
South Central Railway, and allot the same to the said societies.
Questioning the validity of G.O.Ms. No.224 dated 15.03.1993, the
HPA filed W.P.No.11826 of 1993 claiming allotment of land, to the
members of their association, which were in their occupation.
In its order in W.P. No.11826 of 1993 dated 20.02.1993, a
Division bench of this Court observed that an extent of Ac.42.00
cts of land was originally allotted to the State Government for the
railways; the railways found that this extent of Ac.42.51 cts was a
quarry area, and they only required Ac.1.50 cts; the Railways
informed the State Government that Ac.40.51 cts was not required
by them, and they were prepared to surrender the same to the
State Government; since the land was not being properly secured,
a large number of encroachments had come up; two co-operative
Housing Societies had requested for allotment of land as house
sites; the High Court had, by order in W.P. No.9874 of 1992 dated
30.09.1992, directed the State Government to consider allotment
of house sites to the two co-operative societies; consequently the
impugned G.O. was passed; in the meanwhile the Railways tried to
get the land vacated of encroachments; this led to an order being
passed by the Appellate authority under the Public Premises
(Eviction) Act, 1971; the parties to that appeal consisted of 158
persons who claimed that some of them had constructed pucca
houses in the land, and they should be given the right to purchase
the property at the market value, in the same manner in which the
offer was given to the railway employees; the fact that they were in
possession by encroaching the land was evident; if the intention of
the State Government was to distribute plots, to the Co-operative
societies as house sites, on payment of market value, there was no
reason why a similar offer should not be made to those who were
already in possession, and whose claim was that they had already
built pucca houses on the land; and the State Government should
consider the applications of these persons who were in occupation,
for allotment of sites, on payment of market value in the same
manner in which the offer was made to the Co-operative societies;
and it would be unreasonable to evict them from the premises.
While directing that the eviction order of the Appellate Authority be
kept in abeyance, the respondents were directed to consider the
claim of HPA for allotment of house sites on payment of market
value in the manner in which the request of the Employees
societies was being considered. W.P. No.25593 of 1995 filed by
the HPA, against the order of the District Judge, Ongole in A.S.
No.78 of 1992 dated 28.09.1995, was dismissed as infructuous by
order dated 20.09.1995.
On a petition being filed by the General Manager, South
Central Railway, in Rev.WPMP Nos.11240 and 33271 of 1997 in
W.P. No.11826 of 1993, a Division bench of this Court, by its order
dated 21.03.2005, observed that both the earlier orders passed by
the Division bench in W.P. No.11826 of 1993 and W.P. No.25593 of
1995 did not examine the merits of the order of eviction passed by
the Estate Officer which was upheld by the District Judge; no
finding had been recorded by this Court as to whether the order of
eviction was valid or not; this was a mistake apparent on the face
of the record, which necessitated examination; and, therefore,
Review Applications were allowed and the orders passed in W.P.
No.11826 of 1993 and W.P. No.25593 of 1993 were recalled, and
both the Writ Petitions were placed for final hearing before the
appropriate bench along with W.P. No.9472 of 2004, 9479 and
22635 of 2004. The Division bench permitted parties to file
pleadings with regards subsequent events, and directed all the
Writ Petitions to be listed together.
As the earlier order of the Division bench in W.P. No.11826
of 1993 dated 20.02.1997 has been recalled, we are now required
not only to examine the validity of G.O.Ms. No.224 dated
15.03.1993 which is under challenge in W.P. No.11826 of 1993,
but also to examine the claims of HPA for allotment of house sites
with respect to the plots which they had encroached upon; and
whether the South Central Railway can be directed by a writ of
mandamus to allot the subject land to the HPA or the Ongole Taluq
Non-gazetted Officers Co-operative house building society or the
Railway Employees Cooperative House Building Society, Ongole;
and, if so, the rate at which the Railways should be directed to
alienate the land in favour of the Government of A.P. to enable the
latter, in turn, to allot them as house sites to both the Societies
and the HPA.
Heard Sri S. Ramachandra Rao, learned Senior Counsel
appearing on behalf of the petitioners in W.P. No.3287 of 2007 and
W.P.No.24069 of 2008; Sri M.R.K. Chowdary, learned Senior
Counsel appearing on behalf of the petitioners in W.P.No.11826 of
1993 and W.P. No.25593 of 1995, and Sri P. Sri Raghuram,
learned Senior Counsel appearing on behalf of the petitioners in
W.P. No.22635 of 2004. Sri M.L. Ali, learned Standing Counsel,
put forth his submissions on behalf of the respondent-Railways
and the learned Government Pleader for Revenue (Assignments)
put forth his submission on behalf of the State of Andhra Pradesh.
While drawing our attention to the correspondence between
the Railways and the State Government on the one hand, and the
State Government Officials and the petitioner-Associations on the
other, it is contended on behalf of the petitioners that, having
agreed to relinquish Ac.41-50 acres of Railway land at Ongole, at
Rs.2,59,674/- per acre, it was not open to the Railways thereafter
to turn around and contend that the said amount is meagre; on
the basis of the assurances given by the Chief General Manager
and the Chief General Engineer, South Central Railway, the
petitioner-Associations had made payment, receipt of which was
acknowledged by the Railways; after having received the entire sale
consideration, it is not open to the Railways to now contend that a
higher price should be paid; the doctrine of promissory estoppel is
attracted, and the petitioners are entitled to be allotted plots in
accordance with the amounts already paid by them; on the basis of
the assurance of the Railways and the State Government, the
petitioners had altered their position, and had paid the sale
consideration at the market value determined by the State
Government; having accepted the sale consideration, it is not open
to the Railways to resile from their promise, and demand higher
amounts; and a Writ of Mandamus should, therefore, be issued by
this Court directing the respondent-Railways to hand over the
subject land to the State Government, and for the State
Government, in turn, to hand it over to the petitioner-Associations
which would, in turn, allot plots to the members of their respective
associations, who had paid the amounts, as directed by the State
Government, to the Railway authorities.
Sri P. Sri Raghuram, learned Senior Counsel appearing on
behalf of NGGOs Association, would further submit that, though
the members of the association he represented had already paid
the entire sale consideration, they were willing to pay even the
higher market value as determined by the District Judge,
Prakasam, in the report submitted by him pursuant to the order
passed by the Division Bench in Review WPMP No.11240 of 1997
dated 16.8.2004.
On the other hand Sri M.L. Ali, learned Standing Counsel for
the respondent-Railways, would submit that, while the Railways
had agreed in principle to alienate the subject land of Ac.40.51
cents to the State Government, it was made clear that the said
alienation would be at the market value prevailing on the date of
transfer; even the very low rate of Rs.2,59,674/- per acre,
determined on the basis of the report of the Mandal Revenue
Officer dated 24.01.2003, was not paid for more than a year
thereafter till February, 2004; the competent authority, to alienate
Railway land, is the Railway Board which had directed that the
subject land should be alienated only at the market value
prevailing on the date of transfer; the several letters, referred to by
the petitioners, would itself show that there was no
correspondence between the petitioners and the Railways; it is
clear therefrom that the Railways were only corresponding with the
State Government, and not with the petitioner associations; any
assurance given by the State Government to the petitioners cannot
be construed as a promise made by the Railways to the petitioners;
no assurance was given to the petitioners by the Railways that the
subject land would be alienated in their favour at a particular
price; the Railways were obligated, by the Indian Railway Code, to
ensure that they secure the market price prevailing on the date of
transfer; and the petitioners cannot seek a Mandamus that the
subject land should be alienated in the year 2017 at the market
price prevailing in the year 2003, as that would fall foul of the
Railway Code, and the directions issued by the Railway Board.
Learned Government Pleader for Revenue would submit that,
while the Railways claim that an extent of Ac.40-51 cents belongs
to it, it is evident from the revenue records that an extent of
Ac.5.82 cents is classified as hill poramboke; and it is only an
extent of Ac.36.19 cents of land which belongs to them.
As Learned Senior Counsel appearing on behalf of the
petitioners have extensively referred to the correspondence
between Railways officials and officials of the Government of
Andhra Pradesh, in support of their contention that the railways
cannot resile from their promise to alienate the subject land in
favour of the petitioner associations, more so as they had received
the entire sale consideration from its members, it is useful to refer
to the exchange of letters, between these officials, albeit in brief.
The District Collector, Prakasam, by his letter dated
02.01.1991, informed the Divisional Railway Manager, South
Central Railways that the Ongole Taluk N.G.G.Os., House Building
Society (NGGO Society for short), vide their letter dated
22.11.1990, had requested that house site pattas be granted on
payment of market value, in the land covered by the Railway track;
the Mandal Revenue Officer had reported that the subject land was
classified as railway poramboke in the village accounts; the
Railway department was not utilizing the land for the last 15 years;
these lands were lying vacant except a small portion which was
encroached by way of houses in Sy.No.18 of Annavarappadu
Village; these lands were fit for habitation; the Mandal Revenue
Officer had recommended grant of house site pattas to the NGGO
Society on payment of market value, subject to obtaining the
consent of the railway authorities; the State Government, under
G.O.Ms. No.634 dated 02.07.1990, had agreed to consider sale or
lease of its lands, to various categories of government employees,
on payment of cost or lease amount if suitable land is available;
and as per BSO 23(ii), when the Central Government no longer
required any land which was in their possession, the State, in
which it was situated, could be given the option of assuming
possession of the whole or any portion thereof. The District
Collector requested the Divisional Railway Manager to offer his
opinion regarding transfer of the land in favour of the State
Government on payment of the market value so as to enable him to
issue house site pattas to the NGGO Society.
The Senior Divisional Engineer, South Central Railway
informed the District Collector, by his letter dated 06.02.1991, that
one of the proposals was to use the land partly or fully for the
Railway Employees House Building Societies (Railway Societies
for short); as per the extant instructions, such surplus land would
be handed over only to the State Government, if no other Central
Government department was in need thereof; and if the land was
given possession to the State Government, the latter had to
arrange for payment of compensation at the prevailing market
value. The District Collector was requested to furnish the
prevailing market value of the said land, and to help the Railway
Administration in evicting encroachments over the subject land so
that, if the land was proposed to be transferred finally, there would
be no difficulty in giving vacant possession thereof.
The District Collector, Prakasam, vide his letter dated
11.12.1991, informed the Divisional Railway Manager that the
Mandal Revenue Officer, to whom the matter was referred to, had
reported that the market value, of the surrounding lands, ranged
from Rs.1,84,000/- to Rs.3,04,900/- per acre; the sales, which
occurred in the vicinity of the land, did not represent the true
market value; Rs.2,00,000/- to Rs.2,25,000/- was required for
reclamation of the lands; and the Mandal Revenue Officer and the
Revenue Divisional Officer, Ongole had recommended the market
value of the proposed lands at Rs.80,000/- per acre.
The General Manager, South Central Railway informed the
Secretary, Revenue Department, Government of A.P., vide letter
dated 12.02.1992, that an extent of 1.50 Acres near Ongole Station
yard, was required for railway use; since the balance land of
Ac.40.51 area was far away from the Railway Station, and it was
no longer required by the Railways, it was proposed to dispose of
this land to the State Government on the following terms and
conditions i.e. (1) the complete area of the land of Ac.40.51 should
be taken over by the State Government; (2) the market value of the
land should be the value at the time of handing over the land; (3)
the State Government may consider allotment of a portion of the
land to the Railway Societies on payment of the market value of the
land, since, as per the extant orders of the Railway Board, railway
land was not being given to the Railway Societies; the request of
railway employees, for allotment of a portion of the railway land to
the Railway Societies, may be considered by the State Government,
after taking the land from the railways; and the land would be
handed over to the State Government, after dismantling the track
and collecting all the materials, and affording credit to the
Railways account. The State Government was requested to advise
whether they were willing to take over railway land at Ongole on
these conditions. Reminders were sent by the General Manager,
South Central Railway to the Secretary, Revenue Department,
Government of Andhra Pradesh on 08.07.1992, 05.08.1992 and
11.09.1992. By his letter dated 16.12.1999, the General Manager,
South Central Railway requested the Secretary to the Government,
Revenue Department to convey the consent of the State
Government, for the proposal afresh, for taking further action to
relinquish railway land in favour of the State Government.
A reminder, to that effect, was against sent on 21.01.2000.
In the joint report dated 12.09.1994/26.09.1994, the
Mandal Revenue Officer informed that they had arrived at the
present net market value of the subject land at Rs.1,49,355/- per
acre. The General Manager, South Central Railway informed the
District Collector, by his letter dated 08.08.1995, that the rate of
Rs.80,000/- per acre, as advised by the State Government, was
very low; the market value of the land was obtained from the Sub-
Registrar taking into account the reclamation charges per acre;
and the value was arrived at Rs.1,77,493/-, excluding solatium at
30% and contingency charges at 3%. While referring to the letter
of the District Collector dated 25.03.1995, wherein it was stated
that the associations had accepted the market value at
Rs.1,49,355/- per acre, the General Manager requested the
District Collector to confirm whether the rate of Rs.1,77,493/- per
acre, and other charges, was acceptable to the State Government
to deal further in the matter for obtaining the competent
authoritys sanction.
The District Collector, Prakasam informed both the Societies,
by his letter dated 21.08.1995, that the General Manager, South
Central Railway had fixed the market value at Rs.2,36,065/- per
acre (market value of Rs.1,77,493/- + solatium at 30%
Rs.53,247=90 + contingency charges at 3% i.e Rs.5,324/-). The
societies were requested to file their acceptance letters to pay the
market value of the land, as proposed by the General Manager, at
the Collectors office within a week so that the report could be sent
to the General Manager, South Central Railway.
By his letter dated 05.09.1995, the District Collector
informed the General Manager, South Central Railway that the
market value has already been fixed by the Government, and the
Sub-Registrar was not the authority to fix the market value; it was
upto the railways and the purchasers to negotiate higher or lower
rates; and he was enclosing the acceptance letters received from
the associations for taking further action.
The General Manager, South Central Railway informed the
Executive Director, Land Management, Railway Board, vide letter
dated 06.09.1995, that it was decided to dispose of an extent of
Ac.40.50 cents in terms of the provisions laid down by the
Engineering Code, keeping the remaining Ac.1.50 cents for the
future needs of the Railways; the State Government had advised
that they were prepared to take over the land at Rs.80,000/- per
acre; since the rate offered by the State Government was very low,
the Divisional Railway Manager was asked to collect the market
value by causing local enquiry; they had assessed the rate per acre
at Rs.1,19,750/- (i.e., Rs.2,96,710/- per acre less Rs.1,76,960/-
towards reclamation charges); based on the rates given by the
District Registrar of Assurance, Ongole and the Sub-Registrar,
Ongole, the weighted average rate per acre worked out to
Rs.3,54,453/-, and after deducting the cost of reclamation of
Rs.1,76,960/-, the net value of the land per acre came to
Rs.1,77,493/- which was higher than the rate quoted by the
Collector or assessed by the Division; the remarks of the Financial
Advisor and the Chief Accounts Officer of the Railways was that
Rs.1,77,493/- was reasonable, taking into consideration the
problems of encroachment; the land should be relinquished to the
State Government which, in turn, would allot the same to the
Societies; and the Boards approval was being sought in terms of
the Boards letter dated 24.04.1992, as the value exceeded Rs.5
lakhs. The Railway Board was requested to approve the proposal
for relinquishment of surplus railway land admeasuring Acs.40.51
cents at Rs.1,77,493/- per acre, plus the usual codal charges and
contingencies, to the State Government. Again by proceedings
dated 25.06.1996, the General Manager, South Central Railway
requested the Executive Director, Land Management, Railway
Board to communicate its approval, for relinquishing the land, to
the State Government.
The Additional Secretary to the State Government, by his
letter dated 04.06.1998, forwarded a copy of the representation
dated 27.05.1998 received from the President, NGGO Society to the
Collector requesting him to send his report in the matter
immediately so that the Government would hand over the land to
the NGGO Society.
The District Collector informed the Secretary to the
Government, Revenue Department, vide his letter dated
16.08.1998, that, as there were unauthorized encroachments by
way of houses, the railway authorities had initiated eviction
proceedings under the provision of the Public Premises (Eviction of
Unauthorized Occupants) Act, 1971 against about 360
encroachers; aggrieved thereby, the encroachers had filed C.R.P
and had preferred an appeal in A.S.No.78 of 1992, which was
dismissed by the Additional District Judge, Ongole, by his order
dated 28.09.1995; aggrieved thereby, the Annavarappadu Hut
Peoples Association, Ongole (HPA for short) had filed
W.P.No.11826 of 1993 and, by order dated 20.02.1997, the High
Court had directed that the eviction order be kept in abeyance; the
respondents were directed to consider the claim of the HPA for
allotment of house sites on payment of market value in the same
manner in which the Railway Societies were being considered;
aggrieved thereby, the NGGO Society had preferred a review
petition stating that the encroachers were spread all over the land,
and the encroachers should be re-located at one place to enable
the associations, as well as the Government, to make better use of
the land; the HPA had also informed that they were willing to pay
the market value, and they should also be allotted the respective
extents in their occupation; while the total number of
encroachments as on 30.02.1995 were 295, the President of the
HPA had represented that 700 families had encroached upon the
sites since 30 years; and he proposed to hold a joint meeting, with
the associations, on receipt of a report along with a sketch from
the Mandal Revenue Officer.
A copy of representation received from the NGGO Association
was forwarded by the Secretary to the Government to the District
Collector, Prakasam, by his letter dated 02.09.1998, requesting
him to convene a joint meeting and take action. Accordingly, a
joint meeting was convened in the Chambers of the Joint Collector
on 25.06.1999 wherein all the four associations informed the Joint
Collector that they were willing to pay the market value for the
railway land. They also agreed that payment would be made at
their own risk, and subject to acceptance of the Railway Board.
They informed that payment would be made by way of demand
drafts drawn in favour of the Divisional Manager, South Central
Railway, Secunderabad, and the demand drafts would be handed
over to the Mandal Revenue Officer, Ongole for transmission to the
Railway Authorities through the District Collector, Ongole. The
AEN, South Central Railway had informed that, on receipt of the
land value, he would submit proposals to the General Manager,
South Central Railway for acceptance of the market value received
from the four associations, and from other encroachers.
The Mandal Revenue Officer issued demand notice dated
27.10.1999 to the Railway Societies informing him that
Rs.10,71,738=68 should be deposited by way of demand draft on
10.11.1999 with the S.B.I. Ongole in favour of the Mandal Revenue
Officer; an extent of Ac.4.54 cents would be handed over to the
Societies; and, in case the Societies failed to pay the said amount
within the stipulated time, the said land would not be handed over
to them.
By his letter dated 04.11.1999, the General Manager, South
Central Railway informed the Revenue Secretary, Government of
Andhra Pradesh that proposals were sent to the Railway Board for
their approval of the proposed relinquishment of surplus railway
land measuring Ac.40.51 cents to the State Government; the
Railway Board desired that consent of the State Government
should be obtained, and sent afresh, for the disposal of surplus
Railway land admeasuring Ac.40.51 cents to the State Government
as per codal provisions, and the extant instructions, for their
consideration. He requested that the consent of the Government of
Andhra Pradesh should be sent for taking further action.
The General Manager, South Central Railway informed the
Divisional Railway Manager, Vijayawada, by his letter dated
27.04.2000, that the subject matter was under correspondence
with the Railway Board, and the Government of Andhra Pradesh,
for obtaining Boards sanction for the proposed relinquishment of
Railway land; and an advise be sent to the District Collector,
Prakasam to avoid criticism from the Railway Board. He also
informed that, unless fresh proposals were initiated by the State
Government, this issue could not be finalised. Again, vide letter
dated 27.06.2000, the General Manager, South Central Railway
requested the Revenue Secretary, Government of A.P., to arrange
to send the consent letter of the State Government to the proposed
relinquishment of the subject Railway land in favour of the State
Government. Reminders were sent on 03.03.2001 and
13.03.2001.
The Deputy Director, Land Management, Railway Board,
New Delhi, by his letter dated 14.03.2001, informed the General
Manager, South Central Railway, Secunderabad that approval of
the Ministry of Railways was being conveyed for relinquishment of
railway land measuring Ac.40.51 cents to the Government of
Andhra Pradesh; the transfer of land should be made subject to
fulfilment of the following conditions: (i) possession of the land
should be transferred only after receipt of the market value of the
land prevailing at the time of actual transfer of land; and (ii) other
charges, such as easement and maintenance charges etc, to be
levied in addition as per Rules should be collected in advance; and
this was issued in concurrence with the Finance Directorate of the
Ministry of Railways.
By his letter dated 14.02.2002 the District Collector,
Prakasam informed the General Manager, South Central Railway
that a meeting was held in the chambers of the Joint Collector on
25.06.1999 at 11.00 A.M; the four associations had agreed that the
payment which they make would be at their own risk, and subject
to acceptance of the Railway Board. The District Collector
requested the General Manager to consider the proposal regarding
payment of market value of Rs.2,36,067/- per acre as suggested
by the General Manager himself on 08.08.1995, and for the
proposal to be accepted.
By letter dated 13.05.2002 the Divisional Railway Manager
(Works), South Central Railway informed the District Collector,
Prakasam that, by their earlier letter dated 22.03.2002, he had
requested to arrange to issue the present day market value
certificate in respect of Railway quarry lands at Ongole covered by
certain Survey Nos in Mamidipalem and Annavarappadu villages,
but their reply was awaited. The District Collector was informed
that, as the Competent Authority of Railways had decided to
relinquish the said railway land on payment of the present market
value, the valuation certificate, in and around the said railway
lands, was required. The District Collector was requested to issue
the valuation certificate so that the long pending issue could be
settled at the earliest.
By his letter dated 16.10.2002 the General Manager, South
Central Railway informed the District Collector, Prakasam District
that approval of the Railway Board was obtained for transfer of
Ac.40.51 cents to the State Government on payment of current
market value at the time of actual transfer of land, along with
other codal and miscellaneous charges; the District Collector had
been requested to advise the current market value of land which
was yet to be received; as per the land plans available with their
office, an extent of Ac.5.82 cents in Survey No.63 at Mamidipalem
village belonged to the South Central Railway; and the Government
of Andhra Pradesh may take over the complete land of Ac.40.51
cents duly arranging payment of the market value of the land at
the time of actual transfer as approved by the Railway Board.
The District Collector, Prakasam by his dated 25.01.2003,
while referring to the letter of the General Manager, South Central
Railway dated 28.02.2002, informed the General Manager, South
Central Railway that the matter was referred to the Mandal
Revenue Officer, and he had submitted a report on 24.01.2003
recommending the market value of Rs.2,59,674/- per acre; he had
also informed that the Railway Societies had paid a total amount of
Rs.10,71,769/- by way of demand drafts and the NGGO Society
had paid Rs.21,45,838/-; and the HPA had paid Rs.31,73,574/- as
against Rs.49,71,524.40 ps. leaving a balance of Rs.17,97,906.00;
and the amount was deposited with the Central Bank, Ongole in
the name of the Mandal Revenue Officer. The District Collector
recommended the revised market value of the land at
Rs.2,59,674/- per acre, and requested the Railway authorities to
accept the said proposal.
The FA & CAO, South Central Railway, Secunderabad
informed the Chief General Manager, South Central Railway, by
his letter dated 10.04.2003, that their office had agreed for the
relinquishment of railway land admeasuring Ac.40.51 cents at
Ongole at the market value of Rs.2,59,674/- per acre, as advised
by the District Collector; it was advised that, at the time of actual
transfer of land, the Senior Divisional Engineer may be asked to
ascertain the prevailing market value from the revenue authorities,
and then enter into the transfer deed; and the further conditions
put-forth by the railway board, vide their letter dated 14.03.2001,
may be strictly followed.
By his letter dated 09.07.2003, the Chief General Engineer,
South Central Railways informed the District Collector, Prakasam
that it had been decided to relinquish 40.51 acres of Railway land
at the rate of Rs.2,59,674/- per acre amounting to
Rs.1,05,19,394/-; and, in addition, easement and maintenance
charges, if any, may have to be paid before transfer of land. He
requested that the amount be remitted with the Financial Adviser
and Chief Accounts Officer, South Central Railway, Secunderabad;
and, after remittance of the full amount to the Railways, the other
procedure for handing over of the land would be followed.
By his letter dated 26.08.2003, the Chief General Engineer
informed the District Collector that the amount, as indicated
earlier, be remitted to the FA & CAO, South Central Railway,
Secunderabad, before transfer of the land; and, after remittance of
the full amount to the Railways, the other procedure of handing
over of land shall be followed.
The District Collector informed the Chief General Manager,
South Central Railway, by his letter dated 15.12.2003, that the
Mandal Revenue Officer had reported that the NGGO Society and
the Railway Societies had paid the full amount of Rs.35,39,406/-
for the total extent of Ac.13.63 cents (Ac.9.09 cents to NGGOs
Society and Ac.4.54 cents to the Railway Society); the HPA had
paid a major portion of the amount, and a small balance was still
due; the demand drafts, submitted by the said two associations,
was being forwarded; and the balance amount would be paid soon
after collection of the amount from the HPA.
While acknowledging receipt of four demand drafts, the Chief
General Engineer, South Central Railway informed the District
Collector, by his letter dated 02.01.2004, that the demand drafts
for Rs.35,39,409/- could not be realized till the entire payment,
amounting to Rs.1,05,09,394./- together with easement and
maintenance charges, if any, was fully paid to the Railways. The
District Collector, Prakasam was informed that till such time the
entire payment was made, the four demand drafts would be kept in
the safe custody of the office. The District Collector, Prakasam was
requested to arrange for payment of the balance amount from the
HPA to enable relinquishment of Railway land at the earliest. He
was also informed that, if the balance amount was not paid by
28.02.2004, the four demand drafts would be returned to him.
By his letter dated 08.01.2004, the District Collector,
Prakasam directed the Mandal Revenue Officer, Ongole to arrange
for payment of the balance amount from the HPA towards the
market value of railway land, and remit the same to the Financial
Adviser and Chief Accounts Officer, South Central Railway,
Secunderabad by the end of February, 2004; any deviation to
those instructions would be seriously viewed; and the matter be
treated as urgent.
The Chief General Manager, South Central Railway informed
the District Collector, Ongole, by his letter dated 06.02.2004, that
the demand drafts for Rs.35,39,409/- were kept in safe custody till
the entire payment was made to the Railways; if the entire amount
was not paid within six months from the date the total amount was
advised for payment i.e., vide office letter dated 27.08.2003, fresh
market value would be taken, and the amount due for payment
would be revised and advised. The District Collector was requested
to arrange for payment of the balance amount immediately to settle
the long pending issue.
By his letter dated 25.02.2004, the District Collector
informed the Chief General Manager, South Central Railway that,
from out of 40.51 acres, only an extent of Ac.36.19 cents belonged
to the Railway Department in Mamidipalem and Annavarappadu
Villages; and the remaining extent of Ac.5.82 cents in Survey
No.63-1 of Mamidipalem village was classified as Mungamur
Konda as per the Revenue records, and belonged to the Revenue
Department of the Government of Andhra Pradesh. He requested
the Chief General Manager, South Central Railway to delete this
land admeasuring Ac.5.82 cents from the land belonging to the
Railway Department. He also enclosed a copy of the report of the
Mandal Revenue Officer dated 25.02.2004, along with three
demand drafts for Rs.54,68,685/-.
The District Collector, Prakasam was informed by the Chief
Engineer, South Central Railway, Secunderabad, vide his letter
dated 26.02.2004, that the entire extent of Ac.40.51 cents
belonged to the Railways; and the same would be relinquished only
on payment of the entire amount of Rs.1,05,19,394/-. The District
Collector, Prakasam was advised to make the balance payment
without further delay, otherwise fresh market value would be
taken, and the amount due for payment would be revised. A
similar letter was addressed to the Revenue Divisional Officer,
Ongole, vide letter dated 23.03.2004.
By his letter dated 13.04.2004, the Chief General Manager,
South Central Railway, while acknowledging receipt of one demand
draft dated 12.04.2004 for Rs.15,11,303/-, also stated that the
seven demand drafts sent earlier for Rs.35,39,406/- and
Rs.54,65,685/- had been sent to the Chief Cashier/SC Railway,
Secunderabad for realisation; and on realisation of the entire
amount of Rs.1,05,19,394/-, further action would be taken for
relinquishment of the said land.
By his letter, dated 24.05.2004, the Divisional Railway
Manager, South Central Railway informed the Chief General
Manager that the State Government had paid Rs.1,05.19.394/- for
relinquishment of railway land of Ac.40.51 at Ongole; in their
letter, dated 05.03.2004, they had mentioned that the present
market value was in the range of Rs.79,20,000/- to Rs.95,04,000/-
per acre; this meant that the total value of the land, to be
relinquished at Ongole, was in the range of Rs.32,08,38,200/- to
Rs.38,50,07,040/-; and this fact may be taken into account while
taking any decision on the relinquishment of Railway Land to the
State Government.
By his letter dated 08.05.2004, the District Collector
informed the Chief General Manager, South Central Railway that
the latter had, by his letter dated 13.04.2004, informed that
demand drafts for Rs.1,05,19,394/- had been received, and further
action would be taken to relinquish the land on realization of the
demand drafts; at that stage, the Divisional Railway Manager,
South Central Railway had informed that an extent of Ac.4.50
cents originally forming part of the land proposed to be spared by
Railways to the State Government, was proposed to be retained by
the Railways for laying a new road for granite lorry traffic to avoid
plying of vehicles through the busy residential areas of Ongole; the
entire amount of Rs.1,05,19,394/- was paid to the Railways; and
further action should be taken to hand over the railway land at
Ongole to the associations immediately as per the orders issued in
the Chief General Managers proceedings dated 09.07.2003.
The Senior Divisional Engineer, South Central Railway,
Vijayawada informed the General Manager, South Central Railway,
vide proceedings dated 02.06.2004, that they had made an
independent enquiry, and had obtained the current market value;
and as per the certificate issued by the District Registrar, Ongole,
the market value prevailing ranged between Rs.79,86,000/- and
Rs.95,83,200/- per acre obtained as on 01.10.2003, whereas the
District Collector had recommended at Rs.1,95,244/- per acre.
The Chief General Engineer, South Central Railway,
requested the Divisional Railway Manager, South Central Railway,
Vijayawada, by his letter dated 22.07.2004, to ascertain the
present market value from the Collector, and other appropriate
State Government authorities; and take further action accordingly.
The Senior Divisional Engineer, in turn, requested the District
Collector, Prakasam, by his letter dated 12.08.2004, to furnish the
present market value of the land in Mamidipalem and
Annavarappadu Villages in Ongole.
The General Manager, South Central Railway sought review
of the order passed in W.P.No.11826 of 1993 dated 20.02.1997.
The Division Bench of this Court, by its order in Review WPMP
No.11240 of 1997 dated 16.08.2004, appointed the District Judge,
Prakasam to conduct an enquiry, and report the rates which the
subject lands would fetch in the market as on date, if they were
put to sale without any encumbrances and after removal of
encroachments. The report was directed to be submitted within
four weeks. The District Judge, Prakasam District, submitted his
report to the Registrar (Judicial) stating that the total value of the
entire extend of land in Annavarappadu and Mamidipalem villages
was Rs.24,93,40,580/- as per the prevailing market value
according to his enquiries with local persons.
The General Manager, South Central Railway, by his letter
dated 07.09.2004, informed a Member of Parliament that the
representation of the dwellers associations had been examined; as
per the railway boards instructions, relinquishment of Railway
land admeasuring Ac.40.51 cents to the Government would be
subject to realization of full market value of land prevailing at the
time of actual transfer of land, together with other charges such as
easement and maintenance charges; accordingly, the prevailing
market value of the land had been sought from the District
Collector and District Magistrate, Ongole for which the land rates
were yet to be received; on receipt of the market value from the
Collector, and on payment of the difference if any, the land would
be handed over to the District Collector.
By his letter dated 11.11.2004 the Additional Divisional
Railway Manager, South Central Railway, Vijayawada informed the
District Collector that he was called upon to hold a joint meeting
with the District Collector to discuss: (i) arrangement for
conducting joint survey to demarcate Railway land admeasuring
Ac.40.51 acres at Ongole Railway quarry siding; (ii) progress of the
enquiry ordered by the District Collector, Prakasam vide letter
dated 03.08.2004, to enquire into allegations of encroachments;
(iii) arrangement of police protection for eviction of 60 numbers of
unauthorised encroachments which took place subsequent to the
prohibition orders issued by the High Court; (iv) efforts of the
District Administration to protect further encroachments; and (v)
whether allotment of plots to NGGOs Association and Rajiv Gandhi
Association had been made legally by the District Administration.
He sought a convenient date for a meeting to be held.
An additional affidavit was filed before this Court, on behalf
of the General Manager, South Central Railway, stating that the
total value arrived for Ac.40.51 cents was between
Rs.52,76,68,456/- and Rs.55,44,97,662/-.
The exchange of letters, as referred to hereinabove, would
show that the correspondence was mainly between railway officials
and officials of the Government of A.P. on the one hand, and
between the Government of A.P. and the petitioner associations on
the other. It is also evident that no letter was addressed by the
railway officials directly to the petitioners associations. Even in
the absence of any promise being made directly by the Railways to
the petitioners associations, can it be said that the Railways had
made a promise to the petitioners association, and are disabled
from resiling therefrom on application of the doctrine of
promissory estoppel?
Before examining this question, it is necessary to
understand the scope of this doctrine, variously called 'promissory
estoppel', 'equitable estoppel', 'quasi estoppel' and 'new estoppel'.
This doctrine of promissory estoppel is a principle evolved by
equity to avoid injustice, and is neither in the realm of contract nor
in the realm of estoppel. The basis of this doctrine is the inter-
position of equity. (M/s.Motilal Padampat Sugar Mills Co. Ltd. v.
The State of U.P. ). This doctrine, well established in
administrative law, represents a principle evolved by equity to
avoid injustice. (Amrit Banaspati Co. Ltd. v. State of Punjab ;
Union of India v. Godfrey Philips India Ltd. ). The true principle
of promissory estoppel is that, where one party has by his words or
conduct made to the other a clear and unequivocal promise which
is intended to create legal relations or affect a legal relationship to
arise in the future, knowing or intending that it would be acted
upon by the other party to whom the promise is made, and it is in
fact so acted upon by the other party, the promise would be
binding on the party making it; and he would not be entitled to go
back upon it, if it would be inequitable to allow him to do so having
regard to the dealings which have taken place between the parties,
and this would be so irrespective of whether there is any pre-
existing relationship between the parties or not. (The Gujarat
State Financial Corporation v. M/s.Lotus Hotels Pvt. Ltd. ;
M/s.Motilal Padampat Sugar Mills Co. Ltd.1). This doctrine has
evolved to prevent injustice where a promise is made by a person
knowing that it would be acted on by the person to whom it is
made, and in fact it is so acted on, and it is inequitable to allow the
party making the promise to go back upon it. (M/s.Motilal
Padampat Sugar Mills Co. Ltd.1).
In order to invoke the doctrine of promissory estoppel, it is
not necessary for the promisee to show that he suffered detriment
as a result of acting in reliance on the promise. If, by detriment,
injustice is caused to the promisee which could result if the
promisor were to recede from his promise, then detriment would
certainly come in as a necessary ingredient. The detriment in such
a case is not some prejudice suffered by the promisee by acting on
the promise, but the prejudice which would be caused to the
promisee, if the promisor were allowed to go back on the promise.
(M/s.Motilal Padampat Sugar Mills Co. Ltd.1). The concept of
detriment is whether it appears unjust, unreasonable or
inequitable that the promisor should be allowed to resile from his
assurance or representation, having regard to what the promisee
has done or refrained from doing in reliance on the assurance or
representation. (Delhi Cloth and General Mills Ltd. v. Union of
India ). It is not necessary, in order to attract the applicability of
the doctrine of promissory estoppel, that the promisee, acting in
reliance of the promise, should suffer any detriment. What is
necessary is only that the promisee should have altered his
position relying on the promise. (M/s.Motilal Padampat Sugar
Mills Co. Ltd.1).
In order to invoke the doctrine of promissory estoppel it is
enough to show that the promisee has, acting in reliance of the
promise, altered his position and it is not necessary for him to
further show that he has acted to his detriment. (M/s.Motilal
Padampat Sugar Mills Co. Ltd.1). Alteration of position only
means that he (the promisee) must have been led to act differently
from what he would otherwise have done. All that is required is
that one should have acted on the belief induced by the other
party. The gist of the equity lies in the fact that one party has, by
his conduct, led the other to alter his position. (M/s.Motilal
Padampat Sugar Mills Co. Ltd.1). The party, asserting estoppel,
must have relied upon the representation made to him. He should
have changed or altered the position by relying on the assurance or
the representation. The alteration of position by the party is the
only indispensable requirement of the doctrine, and it is
unnecessary to prove further any damage, detriment or prejudice
to the party asserting estoppel. The entire doctrine is reliance
based and nothing more. (Delhi Cloth and General Mills Ltd.5).
This doctrine of promissory estoppel is applicable to the
Central Government including the Railways. 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. (Century Spinning and
Manufacturing Co Ltd. v. The Ulhasnagard Municipal Council ;
Union of India. v. Indo-Afghan Agencies ). The Crown cannot
escape by saying that estoppel does not bind it, for that doctrine
has long been exploded. Nor can the Crown escape by praying, in
aid, the doctrine of executive necessity, that is, the doctrine that
the Crown cannot bind itself so as to fetter its future executive
action. (Century Spinning and Manufacturing Co Ltd.6;
IndoAfghan Agencies Ltd.7).
The doctrine of promissory estoppel is applicable against the
Government in the exercise of its governmental, public or executive
functions, and the doctrine of executive necessity or freedom of
future executive action cannot be invoked to defeat the
applicability of the doctrine of promissory estoppel. (Godfrey
Philips India Ltd.3). No distinction can be made between exercise
of a sovereign or governmental function, and a trading or business
activity of the Government, so far as the doctrine of promissory
estoppel is concerned. Whatever be the nature of the function
which the Government is discharging, it is subject to the rule of
promissory estoppel and, if the essential ingredients of this rule
are satisfied, the Government can be compelled to carry out the
promise made by it. (M/s.Motilal Padampat Sugar Mills Co.
Ltd.1).
A public body is not exempt from liability to carry out its
obligation arising out of representations made by it relying upon
which a citizen has altered his position to his prejudice. (Century
Spinning and Manufacturing Co Ltd.6). Public bodies are as
much bound as private individuals to carry out representations of
facts and promises made by them, relying on which other persons
have 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 who acts upon
the promise. (Century Spinning and Manufacturing Co Ltd.6).
An instrumentality of the State cannot commit breach of a solemn
under-taking on which other side has acted, and then contend that
the party suffering by the breach of contract may sue for damages
but cannot compel specific performance of the contract.
(M/s.Lotus Hotels Pvt. Ltd.4).
Law of Promissory Estoppel furnishes a cause of action to a
citizen, enforceable in a court of law against the government if it,
or its officials, in the course of their authority, had extended any
promise which created, or was capable or creating legal
relationship, and it was acted upon, by the promisee irrespective of
any prejudice. (Amrit Banaspati Co. Ltd.2). It is open to a party,
who has acted on a representation made by the Government to
claim that the Government shall be bound to carry out the promise
made by it, even though the promise is not recorded in the form of
a formal contract as required by the Constitution. (Indo-Afghan
Agencies7; The Municipal Corporation of the City of Bombay v.
The Secretary of State for India in Council ). The Government is
not exempt from liability to carry out the representation made by it
as to its future conduct, and it cannot on some undefined and
undisclosed ground of necessity or expediency fail to carry out the
promise, solemnly made by it, nor claim to be the judge of its own
obligation to the citizen on an ex parte appraisement of the
circumstances in which the obligation has arisen. (Indo-Afghan
Agencies7).
For the doctrine of promissory estoppel to apply it is
necessary to show that the Railways have made a promise, acting
upon which the petitioners associations had altered their position,
in that they had acted differently from what they would, otherwise,
have done. While the second limb of the doctrine has been fulfilled
on the petitioners having paid certain amounts to the State
Government which, in turn, forwarded it to the Railways, it is
necessary to examine whether the first limb of this doctrine has
been fulfilled i.e., whether the Railways had made any promise to
the petitioners associations and, if so, the nature of the promise?
The correspondence, referred to hereinabove, would show that the
NGGO Society had requested the District Collector, by their letter
dated 22.11.1990, that house site pattas be granted on payment of
market value, in the subject land belonging to the Railways. This
request was made by the petitioner in view of G.O.Ms. No.634
dated 02.07.1990 issued by the State Government that it would
consider sale or lease of its land to various categories of
Government employees, on payment of cost, if suitable land was
available. It is pursuant to such a request by NGGO Society that
the District Collector, Prakasam had, by his letter dated
02.01.1991, sought the opinion of the Divisional Railway Manager,
for transfer of the land in favour of the State Government on
payment of market value, in order to enable him to issue house
site pattas to the NGGO Society.
It is no doubt true that the Senior Divisional Engineer, South
Central Railway had informed the District Collector, by his letter
dated 06.02.1991, that one of the proposals was to use the land
partly or fully for the Railway Society. However the said letter
dated 06.02.1991 makes it clear that, as per the extant
instructions, railway surplus land would be handed over only to
the State Government on the latter arranging payment of
compensation at the prevailing market value. The correspondence
between the Railway officials and the State Government officials is
mainly regarding the true market value of the subject land and,
while initially the District Collector Prakasam, had, by his letter
dated 11.12.1991, informed the Railways that the value of the
proposed land was Rs.80,000/- per acre, their market value was
revised thereafter by the District Collector in his letter dated
25.03.1995 to Rs.1,49,355/- per acre. The General Manager,
South Central Railways informed the District Collector, by his
letter dated 08.08.1995, that the information obtained by them
showed that the market value was RS.1,77,493/- per acre plus
30% solatium plus contingency charges at 3% (ie.) for a total sum
of Rs.2,36,065/- per acre.
The General Manager, South Central Railway sought the
approval of the Railway Board, by letter dated 06.09.1995, for
relinquishment of the subject land at Rs.1,77,493/- per acre plus
usual codal charges and contingencies. It is only by letter dated
14.03.2001 was the approval of the Railway Board conveyed to the
then General Manager, South Central Railway for relinquishment
of the subject land to the State Government. The conditions
stipulated by the Railway Board, for such alienation, was for
transfer of possession of the subject land, to the State
Government, only after receipt of the market value of the land
prevailing at the time of its actual transfer and for collection in
advance of easement and maintenance charges. Pursuant to the
approval of the Railway Board, the Railways, by their letter dated
22.03.2002, sought information from the District Collector
regarding the current value of the land. It is more than nine
months thereafter, that the District Collector, by his letter dated
25.01.2003, had recommended the market value of the subject
land at Rs.2,59,674/- per acre.
While the Chief General Manager, South Central Railway had
conveyed his concurrence, by his letter dated 09.07.2003, to the
market value as determined as Rs.2,59,674/- per acre plus
easement, and maintenance charges (i.e.) for a total sum of
Rs.1,05,19,394/- for the total extent of 40.51 acres, the fact
remains that, despite repeated reminders, the said amount was not
remitted in its entirety, by the petitioners Associations, till
12.02.2004 i.e for more than nine months after communication of
the concurrence, of the Chief General Engineer to the District
Collector, by letter dated 09.07.2003.
In the meanwhile, the District Collector informed the
Railways, by his letter dated 25.02.2004, that only an extent of
36.19 Acres, from out of the total extent of 40.51 acres belonged to
the Railways, and the remaining extent of 5.82 acres in
Mamidipalem village was classified as a hillock and belonged to the
State Government. This claim of the State Government was
disputed by the Chief Engineer, South Central Railway who, by his
letter dated 26.02.2004, informed that the entire extent of 40.51
Acres belonged to the Railways. While matters stood thus, the
Chief General Manager was informed by the Divisional Manager, by
his letter dated 24.05.2004, that the present market value of the
subject land was in the range of Rs.79.20 lakhs to Rs.95.04 lakhs
per acre; and this information was, in turn, communicated by
Chief General Manager to the District Collector.
Before this dispute regarding the extent of land belonging to
the Railways, and its market value, could be finally resolved the
Railways sought review of the order passed by this Court in W.P.
No.11286 of 1993 dated 20.02.1997 and, by order dated
16.08.2004, the Division Bench appointed the District Judge to
conduct an enquiry and report the rates which the subject land
would fetch in the market as on date, if they were put to sale
without any encumbrance, and after removal of encroachments.
In the report submitted by him to this Court, the District Judge
opined that the total value of the subject land was Rs.24,93,40,580
as per the prevailing market value. This market rate of Rs.24.93
crores was also disputed by the Railways which, in its additional
affidavit filed before this Court in the Review WPMPs, contended
that the total value of the subject land, of an extent of 40.51 Acres,
was between Rs.52,76,68,456/- and Rs.55,44,97,662/-. The
Division bench allowed the review application thereafter on
21.03.2005, and recalled its earlier order in W.P. No.11826 of 1993
and W.P. No.25593 of 1995.
The doctrine of promissory estoppel has certain limitations.
The Government or public authority cannot be debarred by
promissory estoppel from enforcing a statutory prohibition.
Promissory estoppel cannot be used to compel the Government or
a public authority to carry out a representation or promise which
is contrary to law or which was outside the authority or power of
the officer of the Government or of the public authority to make.
(Godfrey Philips India Ltd.3; M/s.Motilal Padampat Sugar Mills
Co. Ltd.1). In public law, the most obvious limitation on the
doctrine of estoppel is that it cannot be evoked to give an
overriding power which the authority does not in law possess. In
other words, no estoppel can legitimate an action which is ultra
vires. Another limitation is that the principle of estoppel does not
operate at the level of Government policy. Estoppel has, however,
been allowed to operate against a public authority in minor
matters of formality where no question of ultra vires arises. (Wade,
Administrative law, 5th edition, pp. 233-34; Express
Newspapers Pvt Ltd. v. Union of India ).
The doctrine of promissory estoppel, being an equitable
doctrine, must yield when equity so requires. If it can be shown,
by the Government or public authority, that, having regard to the
facts as they have transpired, it would be inequitable to hold the
Government or public authority to the promise or representation
made by it, the Court would not raise an equity in favour of the
person to whom the promise or representation is made, and
enforce the promise or representation against the Government or
public authority. The doctrine of promissory estoppel would be
displaced in such a case because, on facts, equity would not
require that the Government or public authority should be held
bound by the promise or representation made by it. (Godfrey
Philips India Ltd.3; M/s.Motilal Padampat Sugar Mills Co.
Ltd.1).
Promissory Estoppel, being an extension of the principle of
equity, the basic purpose of which is to promote justice founded on
fairness and to relieve a promisee of any injustice perpetrated due
to the promisor's going back on its promise, is incapable of being
enforced in a court of law if the promise which furnishes the cause
of action or the agreement, express of implied, giving rise to
binding contract is statutorily prohibited or is against public
policy. (Amrit Banaspati Co. Ltd.2). The doctrine of promissory
estoppel cannot be used to compel public bodies or the
Government to carry out a representation or promise which is
contrary to law or which is outside their authority or power.
Secondly, the estoppel stems from an equitable doctrine. It,
therefore, requires that he, who seeks equity, must do equity. The
doctrine cannot be invoked if it is found to be inequitable or unjust
in its enforcement. (Delhi Cloth and General Mills Ltd.5).
It is only if the person making the promise had the authority
to make it, can he be prevented, by the application of the doctrine
of promissory estoppel from resiling on his promise. It is
necessary, therefore, to examine the power conferred on Railway
officials to alienate Railway Land. Chapter-X of the Indian
Railways Code for the Engineering Department, issued by the
Ministry of Railways (Railway Board), Government of India, relates
to the custody, management and disposal of land. Paragraph-1001
of the Code refers to Article 294 of the Constitution whereunder all
property and assets vest in the Union which is at liberty to dispose
them of by sale, mortgage, etc. Paragraph-1004 of the Code
stipulates, as the duty of the Railway Administration, to preserve
unimpaired the title to all lands in its occupation; and to keep it
free from encroachment. Paragraph-1008 stipulates that all
Railway land should be managed on commercial lines, and each
Railway Administration should endeavour to develop resources of,
and put to profitable use, any areas in its occupation which,
though not eligible for disposal or lying idle, can be put to
profitable use. Paragraph-1010 stipulates that the engineering, or
any other department of the Railways, as decided by the General
Manager at his discretion, will be responsible to him for the
management of all land in the occupation of the Railways.
Paragraph-1035 of the Railway Code relates to disposal of
land not required by the railways and stipulates that, in regard to
all Railway land, the policy of the Railway Board is to limit
holdings to actual requirements, present and prospective; every
Railway Administration should, where they are not in a position to
justify retention of land occupied by them, classify it as eligible for
disposal, and arrange for its disposal agreeable to the rules in the
subsequent paragraphs of the Code. Paragraph-1038 relates to
disposal of land eligible for disposal and, thereunder, where it has
been decided that a certain area of land is no longer required by
any department of the Railways and it is, therefore, eligible for
disposal to follow the procedure prescribed thereunder. The
directions to be observed as stipulated in Paragraph-1038(1) is
that the lands shall be first offered to the Railways or other
Departments of the Central Government, if they desire to acquire
it. Paragraph-1038(2) provides that, if the land is surplus to the
requirements of the Central Government, the State Government, in
which it is situated, would be given the option of assuming
possession subject to the conditions mentioned therein.
Paragraph-1038(2)(c) stipulates that the amount payable for the
land would, in all cases, be its market value on the date of
transfer. Paragraph-1038(2)(e) stipulates that, if the State
Government does not desire to assume possession of any land, the
Central Government should be free to dispose it of to a third party;
but, before doing so, the Central Government would consult the
State Government as to the levy of ground rent or assessment, and
the conditions, if any subject to which it should be sold; and,
therefore, they would dispose of the land subject to the conditions,
which the State Government may desire to impose.
In the present case, the Railways decided to alienate the
subject land in favour of the State Government, and not to the
Petitioner-Associations. It is the State Government which, in turn,
had assured the associations i.e the Railway Society and the
NGGO Society that the land would be allotted to them in
accordance with the terms agreed to by the Railway
Administration. In terms Paragraph-1038(2)(c) of the Railway
Code, the amount payable for the land, in all cases, is at market
value on the date of transfer, and this stipulation is what the
Railway Board had also prescribed in its letter of approval dated
14.03.2001.
Power is conferred, by the Indian Railway Code, for
alienation of railway land on the Railway Board. Para 1038(2) of
the Code stipulates that the amount payable for the land should,
in all cases, be its market value on the date of transfer. In terms of
para 1038(2) of the Code, approval of the Railway Board was
conveyed by its letter dated 14.03.2001 for alienation of an extent
of Ac.40.51 cts to the State Government on condition that
possession of the land should be transferred only after receipt of
the market value of the land prevailing at the time of its actual
transfer, besides collection of easement, maintenance charges etc.
Failure on the part of the petitioners to make payment within time
resulted in the Railway officials refusing to alienate the subject
land to the State Government. Since the Railway Officials are
required to exercise their power strictly in terms of the Railway
code, the doctrine of promissory estoppel cannot be invoked to
carry out any representation which is contrary to the conditions
stipulated in the Indian Railway Code.
In order to invoke the doctrine of promissory estoppel, it is
also necessary that the representation must be clear. For the
purpose of finding whether an estoppel arises in favour of the
person acting on the representation, it is necessary to look into the
whole of the representation made. It is also necessary that the
representation must be unambiguous and not tentative or
uncertain. (Delhi Cloth and General Mills Ltd.5). To found an
estoppel a representation need not, necessarily, be susceptible of
only one interpretation, but such as will reasonably be understood
by the person to whom it is made in the sense contended for, and
for this purpose the whole of the representation must be looked at.
This is merely an application of the old maxim applicable to all
estoppel, that they "must be certain to every intent. (Delhi Cloth
and General Mills Ltd.5; Halsbury's Laws of England, Halsbury's
Laws of England 4th Edn. Vol. 16 p. 1071 para 1595).
While it is true that the Chief General Manager, by his letter
dated 13.04.2004, acknowledged receipt of the demand drafts for
Rs.1,05,19,394/-, and informed the District Collector that further
action would be taken for relinquishment of the said land, the
words further action cannot be construed as a promise to
relinquish the subject land, as just a month thereafter, the Chief
General Manager, South Central Railway was informed by the
letter of the Divisional Railway Manager dated 24.05.2004 that the
total land value ranged between Rs.32.08 crores and Rs.38.50
crores per acre. That the value of the subject land is several times
the consideration of Rs.1.05 crores paid by the petitioners-
associations is also evident from the report of the District Judge,
Prakasam who caused an enquiry into the value of the land
pursuant to the order of the Division bench dated 16.08.2004. The
market value of the land, as ascertained by the District Judge, is
nearly Rs.25 crores which is more than 20 times the consideration
paid by the petitioners-Associations of Rs.1.05 Crores. It would,
therefore, be wholly inappropriate for this Court to direct the
Railways to transfer the subject land to the State Government for
it, in turn, to allot it to the members of the petitioners-Associations
merely for a sum of Rs.1.05 crores.
While Sri P.Sri Raghuram, Learned Senior Counsel
appearing on behalf of the NGGOs Association, submitted that the
members of their Association were willing to pay the market value
of the subject land as determined by the District Judge, Ongole,
Sri S. Ramachandra Rao, Learned Senior Counsel appearing on
behalf of the Railway Employees Association, would request us to
decide their contentions on merits, and submit that the members
of the Railway Societies were neither obligated nor willing to pay
the market value of the subject land as determined by the District
Judge.
In this context, it is necessary to note that the price at which
Government land should be transferred is not for this Court to
stipulate. The Central Government (Railways) is the owner of the
land, and it is open to it to fix such price as it thinks appropriate
having regard to public interest which, inter alia, would include
the interests of revenue. (Rayalaseema Paper Mills Ltd. v.
Government of A.P ). While determining the price of plots, and
the amount to be paid, the Government, even after entering into a
contract, acts purely in its executive capacity. Thereafter the
relations are no longer governed by the Constitutional provisions,
but by the legally valid contract which determines the rights and
obligations of the parties inter-se. (Bareilly Development
Authority v. Ajai Pal Singh ). Price fixation is neither the
function nor the forte of the Court. Nor is it concerned with the
policy or with the rates. The Court would exercise jurisdiction to
enquire into the question, in appropriate proceedings, whether
relevant considerations have gone in, and irrelevant considerations
kept out of, the determination of the price. (Rayalaseema Paper
Mills Ltd.10; Union of India v. Cynamide India Limited ).
The scope of judicial scrutiny would be far less where the
price fixation is not governed by any Statute or any Statutory
Order. It is only where the legislature has prescribed the factors
which should be taken into consideration, and which should guide
the determination of price, would the Courts examine whether the
consideration, for fixing the price mentioned in the Statute or the
Statutory Order, have been kept in mind while fixing the price; and
whether these factors have guided the determination. Courts
would not go beyond that point, more so when there is no law or
statutory provision laying down the criteria or the principles which
must be followed, or which must guide the determination of price.
No doubt, any arbitrary action taken by the State would be subject
to scrutiny by the Courts because arbitrariness is the very
antithesis of the rule of law. But this does not mean that the Court
would act as an appellate authority over the determination of price
by the authorities. (Rayalaseema Paper Mills Ltd.10). What then
should be the nature of relief to be granted in these Writ Petitions?
Before examining this question, it is necessary to take note
of the eviction proceedings initiated against those who had
encroached on the subject railway land i.e several of those whom
the HPA claims to represent. By the notice in Form-A dated
07.07.1992, issued under Section 4(1) of the Public Premises
(Eviction of unauthorised occupants amendment) Act, 1980, the
South Central Railway sought to evict 296 encroachers.
W.P.No.11826 of 1993 was filed by the HPA, and not by any of the
individual encroachers who suffered the orders of eviction.
Aggrieved by the order passed by the Estate Officer, South
Central Railway, Vijayawada, under Section 9 of the Public
Premises (Eviction of Unauthorized Occupants) Act, 1971 (for
short, the Act), to evict encroachers from the subject land, 158
individual encroachers, and the President of Annavarappadu Hut
Peoples Association, Ongole preferred the appeal in A.S.No.78 of
1992 contending that they were in occupation of the sites for more
than two decades; the purpose, for which the respondent had
started eviction proceedings, was vague; the notice issued under
Section 4 of the Act was defective; the order passed under Section
5 of the Act was also defective as the reasons for eviction were not
given; and the occupants were not given a reasonable opportunity
to state their grounds.
In his order, in A.S. No.78 of 1992 dated 28.09.1995, the
Additional District Judge, Ongole observed that appellants 1 to 158
were occupants of the railway siding site; originally the erstwhile
Southern Railway had acquired Ac.42-00 in different survey
numbers of Mamidipalem and Annavarappadu revenue villages
more than a century ago, and had laid a railway track though the
said land for transportation of gravel and ballast quarried in
Mamidipalem and Annavarappadu, which material was being used
by the Railway authorities; after quarrying operations were
completed, and the bottom of the hills in the said villages having
been exhausted, the railway track and the railway siding went into
disuse; and the appellants were claiming that they had encroached
upon the railway site covered by the railway siding, and to have
raised huts therein; and some of them had raised pucca houses in
the place of the huts.
The learned Additional District Judge observed that there
was no dispute that appellants 1 to 158 were in occupation of their
respective sites, which was owned by the Railways; it was not their
case that they were in occupation of the respective railway sites
with any right or permission; their occupation of the respective
sites was, admittedly, without any right or permission, and was
totally unauthorized; appellants 1 to 158 were, therefore, in
unauthorized occupation of Railway property as defined under
Section 2 (2) (g) of the Act; the eviction order, passed by the Estate
Officer under Section 5(2) of the Act, could not be equated with the
eviction orders passed under the Rent Control Act or the Tenancy
Act; in case of eviction of persons, in unauthorized occupation of
public property, the authority was required to satisfy himself that
the site or property, in occupation of the appellants, belonged to
the Government, and to ascertain whether the person, in
occupation of the said property, had occupied it with or without
authority; the moment the respondent came to the conclusion that
the appellants were in occupation of the railway site without any
authority and unauthorizedly, he could straightaway issue the
order, under Section 5 (2) of the Act, for his or her eviction; in the
present case, there was no dispute on the part of the appellants
that the site in their occupation was railway property; appellants 1
to 158 did not make out any case of acquisition of right or title to
their respective sites in their occupation, by way of adverse
possession for over the statutory period; appellants 1 to 158 had
no right to be in possession of the respective sites in their
occupation; and they had no defence at all against the eviction
proceedings launched against them by the Estate Officer of the
Railway Administration.
With regards the contention that the Railway Administration
proposed to alienate the site to the Railway Employees Association
and to the NGGO Association and, if the Railway Administration
intended to sell the sites, then the appellants and other occupants
were prepared to purchase the respective sites in their occupation
on payment of market value, the learned Additional District Judge
held that the railway siding which was in unauthorised
occupation, including by appellants 1 to 158, had become the
heart of Ongole town, as the railway siding went across the Grand
Trunk Road; if the unauthorised occupants intended to purchase
the site at market value, then it was for them to approach the
appropriate authorities with the appropriate prayer; and, while
disposing of the appeal under Section 9 of the Act, the Court had
no power or authority to make any observations about the proposal
to purchase the land at market value. The appeal was dismissed
by the learned Additional District Judge, Ongole holding that
appellants 1 to 158 were in unauthorized occupation of the railway
property, and they were liable to be evicted from the sites in their
occupation.
In his order, in W.P.M.P.No.31535 of 1995 in W.P.No.25593
of 1995 dated 14.11.1995, a learned Single Judge of this Court
directed that the members of the petitioners-Society be continued
in possession and enjoyment of the lands in S.Nos.63, 68, 69 and
70 of Mamidipalem and S.Nos.4, 17, 18, 45, 46 and 47 of
Annavarappadu Revenue Villages suspending the order and decree
passed in A.S.No.78 of 1992 dated 28.09.1995 on the file of the
Additional District Judge, Ongole pending further orders. The
aforesaid order was passed in a Writ Petition filed by the
Annavarappadu Hut Peoples Association represented by its
President E.Mallaiah Gowd, and not by any one of the individuals
who suffered the eviction orders.
The effect of the order, passed in Review WPMP No.11240
and 33271 of 1997 in W.P.No.11826 of 1993 dated 21.03.2005, is
that the earlier order passed in W.P.No.11826 of 1993 and 25593
of 1995 dated 20.02.1997, keeping the eviction order as upheld by
the Additional District Judge, Ongole in abeyance, and in directing
the respondents to consider the claim of the HPA for allotment of
house sites on payment of market value in the same manner in
which the Societies of Railway Employees and the NGGOs was
considered and disposed of, is no longer in force. Consequently,
the earlier orders of eviction passed by the Estate Officer, and as
affirmed by the Additional District Judge, stand revived. As a
result, neither the South Central Railway nor the Government of
Andhra Pradesh is obligated to consider the claim of the members
of the HPA for allotment of house sites on payment of market
value.
Neither have any of the actual encroachers individually
questioned the order passed by the Additional District Judge,
Ongole upholding the order of the Estate Officer directing their
eviction, nor has any submission been put forth before us by Sri
M.R.K. Chowdary, Learned Senior Counsel appearing on their
behalf, on the merits of the order of eviction. The encroachers
(allegedly the members of the HPA), who have admittedly
encroached on the subject railway land, and who have suffered an
order in A.S. No.78 of 1992 dated 28.09.1995, can no longer claim,
as of right, that they should also be treated on par with the railway
society and the NGGO society as their claim for allotment of the
land, which they have encroached upon, is based on the earlier
order passed in W.P. No.11826 of 1993 and 25593 of 1995 which
was recalled by the Division bench in the order passed by it in the
Review WPMP.
We must, however, bear in mind that like the NGGO
Association and Railway Employees Association, members of the
HPA have also paid their share of the total sale consideration of
Rs.1.05 crores which amount is lying with the Railways ever since
April, 2004 i.e for the past nearly 14 years. It is also necessary to
note that the office of the Assistant Divisional Engineer, Ongole
informed the Senior Divisional Engineer, by his proceedings dated
12.11.2005, that the approximate number of encroachments was
685 with 25 pucca buildings (RCC), 570 buildings with AC sheet
roof and 90 thatched huts.
In the light of the order of the Additional District Judge,
Ongole, in A.S. No.78 of 1992 dated 28.09.1995, the encroachers
are liable to be evicted. Since no contentions have been put forth
before us regarding its validity, we affirm the order in A.S. No.78 of
1992 dated 28.09.1995, and dismiss W.P. No.25593 of 1995. The
justification for the Railways, to adopt the circuitous route of
alienating the subject land to the State Government for it, in turn,
to allot it to the members of the Railway society and NGGOs
society, seems to be to overcome the prohibition in the Railway
Code for alienating railway land to railway employees. The fact,
however, remains that this procedure found acceptance with the
State Government, apparently because a part of the subject land
was proposed to be alienated in its favour to enable it to allot it in
favour of the Non-Gazetted Government officers Association, all of
whom were employees of the State Government. Can the HPA, in
such circumstances, be faulted in questioning the validity of
G.O.Ms. No.224 dated 15.03.1993 claiming that, since they were in
possession of a substantial portion of the subject land albeit as
encroachers, it is their possession which should be regularised by
allotment of plots, instead of allotting the subject land to the
Railway and the NGGO societies?
Our attention has not been drawn to any law in force which
confers a right on encroachers to claim that the lands, which they
have illegally encroached upon, should be regularised by allotment
of plots in their favour. In the absence of any statutory right to
claim preferential right for allotment of the subject land, it is not
open to the HPA, which represents these encroachers, to question
allotment of land to the Railway and NGO societies vide G.O.Ms.
No.224 dated 15.03.1993. While we see no reason to examine the
validity of G.O.Ms. No.224 dated 15.03.1993 on its being
challenged by encroachers whom the HPA represents, the above
referred events show that, subsequent to the filing of the aforesaid
Writ Petitions, the Railways have agreed to alienate the subject
land in favour of the State Government, and the dispute between
them relates only to the price at which these lands should be
alienated.
Bearing these aspects in mind, let us now examine the
nature of the relief to be granted to the petitioners-Associations.
While none of the petitioner-associations can claim, as of right,
that the Railways should alienate the subject land in their favour,
that too at the market rate determined by the State Government in
January, 2003, it is not even the case of the Railways that they do
not wish to alienate the subject land in favour of the State
Government. The dispute mainly appears to revolve around the
market price on the basis of which the subject land should be
alienated. The State Government disputes the title of the Railways
over Ac.5.82 cents, and contends that this extent of land has been
classified in the revenue records as hill-poramboke and that, from
out of the total extent of Ac.40.51 cents, only Ac.36.19 cents
belongs to the Railways. There is, admittedly, no bar for the
Railways to alienate at least this extent of Ac.36.19 cents of land.
A substantial portion of the subject land is under encroachment.
Though an order for eviction of 296 encroachers was passed, out of
whom 158 had preferred the appeal in A.S.No.78 of 1992 before
the Additional District Judge, Ongole, it is evident from the letter of
the Assistant Divisional Engineer, Railways, Ongole dated
12.11.2005 that, even by then, there were 685 encroachments,
with 25 pucca buildings (RCC), 570 with ACC roofed buildings and
90 thatched huts.
In case they intend retaining the subject land, the Railways
would now have to initiate action for eviction of several of these
unauthorised encroachments in accordance with the provisions
of the Public Premises (Eviction) Act, 1971. While this Court may
not be justified in issuing a mandamus, it would undoubtedly be in
the interest of all the parties concerned to mutually discuss and
resolve the dispute regarding the price to be paid for alienation of
the subject land. We consider it appropriate, therefore, to dispose
of all the Writ Petitions directing the respondent-Railways, in
consultation with the Government of Andhra Pradesh, to finalise
the market rate at which they are willing to alienate the subject
land in favour of the State Government which, in turn, shall
consider alienation of the subject land to the petitioner-
Associations on receipt of the market value of the subject lands
from the members of the said Associations. The entire exercise,
culminating in a final decision being taken on whether the subject
land should be alienated and, if so, at what price, shall be
completed with utmost expedition and, in any event, not later than
six months from the date of receipt of a copy of this order.
In case the parties are not mutually able to resolve the issue,
the Railways shall then be entitled to retain the subject land and,
instead, refund the consideration received by them of
Rs.1,05,19,394/- (which was paid to them in April, 2004) with
interest at 12% per annum to the State Government which shall,
in turn, pay the said amount to the members of the petitioner-
Associations from whom it was received. This sum of Rs.1.05
crores, with interest at 12% per annum, shall be refunded within
three months of a final decision being taken by the Railways, and
in case the decision is not to alienate the subject lands in favour of
the State Government. It is also made clear that, in case the
Railways do not alienate the subject land to the State Government,
it is open to them to take further action pursuant to the Judgment
of the Additional District Judge, Ongole in A.S.No.78 of 1992 dated
28.09.1995, and to initiate proceedings afresh for eviction of the
other encroachers, (who were not parties to the earlier proceedings
for eviction), in accordance with law.
W.P. No.25593 of 1995 is dismissed and all the other Writ
Petitions are disposed of in terms of the aforesaid directions. The
Miscellaneous Petitions, if any pending, shall also stand disposed
of. No costs.
_______________________________
RAMESH RANGANATHAN, ACJ
_________________
J. UMA DEVI, J.
Date:04.01.2018.
WRIT PETITION Nos.11826 OF 1993 and batch
04-01-2018
The Annavarappadu Hut Peoples Association, Ongole,Rep. by its President .Petitioner
The Government of A.P. rep. by its Secretary, Revenue Department & Ors. . Respondents
Counsel for Petitioners: Sri S. Ramachandra Rao, learned Senior
Counsel, Sri M.R.K. Chowdary, learned Senior Counsel, and Sri P. Sri Raghuram, learned Senior
Counsel, Sri M.Subba Reddy, Sri V.V.N. Narayana Rao, Sri K.R. Prabhakar, Learned Counsel.
Counsel for respondents: Sri M.L. Ali, learned Standing Counsel
for the respondent-Railways;
Learned Government Pleader for Revenue (Assignments), Sri K.Lakshman, Asst. Solicitor General, Sri R.S.Murthy,
Addl. CGSC, Sri P.Bhaskar, Sri P.Phalguna Rao, Learned Counsel.
<GIST:
>HEAD NOTE:
?Citations:
1.AIR 1979 SC 621
2.AIR 1992 SC 1075
3.AIR 1986 SC 806
4.AIR 1983 SC 848
5.AIR 1987 SC 2414
6.AIR 1971 SC 1021
7.AIR 1968 SC 718
8. (1904) I.L.R. 29 Bom. 580 = LR 28 IA 211
9.AIR 1986 SC 872
10. (2003) 1 SCC 341
11. (1989) 2 SCC 116
12. (1987) 2 SCC 720
HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN
AND
HONBLE MS. JUSTICE J. UMA DEVI
WRIT PETITION Nos.11826 OF 1993, 25593 OF 1995, 22635
OF 2004 AND 3287 OF 2007
COMMON ORDER : (per Honble the Acting Chief Justice Ramesh Ranganathan)
W.P. No.11826 of 1993 is filed by Annavarapupadu Hut
Peoples Association (HPA for short) seeking a writ of certiorari to
quash G.O.Ms. No.224 dated 15.03.1993 holding that the
members of the petitioner society were entitled for allotment of the
lands in their occupation. W.P. No.22593 of 1995 is also filed by
HPA seeking a writ of certiorari to quash the judgment and decree
passed in A.S. No.72 of 1992 dated 28.09.1995 on the file of the
Additional District Judge, Ongole.
W.P. No.3287 of 2007 is filed by the Rajiv Gandhi Railway
Co-op. House Building Society seeking a mandamus to declare the
action of the respondents, in not delivering possession of the
abandoned railway land of an extent of Ac.4.57 cts in Sy. No.63,
68, 69 and 70 of Mamidipalem village, Ongole Mandal as arbitrary
and illegal. W.P. No.24069 of 2008 is also filed by the Rajiv
Gandhi Railway Co-op. House Building Society seeking a
mandamus, to declare the inaction on the part of the respondents
in protecting the land, in an extent of Ac.4.54 cts situated in Sy.
No.4, 17, 18, 45, 46 and 47 of AHPA village, Ongole Mandal,
Prakasham District, which has been sought to be allotted to the
petitioners though G.O.Ms. No.224 dated 15.03.1993, as arbitrary
and illegal. By an interlocutory order passed on 05.11.2008, the
respondents were directed to maintain status quo.
G.O.Ms. No.224 dated 15.03.1993 was issued by the
Government of Andhra Pradesh allotting an extent of Ac.29.51 cts
of Railway land to the Ongole Taluq Non-Gazetted Co-operative
House Building Society Limited, and an extent of Ac.11.00 cts to
the Rajiv Gandhi Railway Employees Co-operative House Building
Society Limited, Ongole, on confirmation from the South Central
Railways for the market value fixed by the District Collector,
Prakasam. The District Collector was directed to collect the
market value of the land, at the specified rate, from the two house
building societies in advance, pay the same to the General
Manager, South Central Railways, Secunderabad; and take
possession of the subject land from the South Central Railway, and
then allot the same to the Society expeditiously.
G.O.Ms. No.224 records that the General Manager, South
Central Railway, Secunderabad had, by his letter dated
12.02.1992, requested the State Government to inform whether
they were willing to take over railway land of an extent of Ac.40.51,
along the siding of the Ongole railway yard at Ongole, Prakasam
District; the matter was referred to the District Collector, Prakasam
and the Commissioner of land revenue for their remarks/
recommendations; the District Collector had submitted his
proposal, vide letter dated 21.06.1992, for transfer of 40 acres of
railway land in AHNP village of Ongole Mandal for grant of house
sites for an extent of Ac.34.69 cts in favour of the Ongole Taluq
Non-Gazetted Officers, and an extent of Ac.5.82 cts in favour of the
Railway Employees at Ongole on payment of market value in
advance; the Commissioner of Land Revenue had, vide letter dated
04.07.1992, endorsed the proposal of the District Collector;
aggrieved by the proposal of the District Collector, the Rajiv
Gandhi Employees Society had filed W.P. No.9847 of 1992 before
the High Court which was disposed of with a direction to the
District Collector to allot land to the petitioners in proportion to the
strength of the members, of both the petitioner as also the
respondent society, after conducting a meticulous enquiry
regarding the genuineness of the members; the Ongole Taluq Non-
Gazetted Officers Co-operative House Building Society, and the
Rajiv Gandhi Employees Society, had entered into a compromise,
and had filed the same vide letter dated 11.02.1993, pursuant to
the order of the High Court in W.P. No.9847 of 1992 dated
30.09.1992; and, in view of the compromise entered into by both
the Societies, the District Collector had finally submitted revised
proposals in his letter dated 13.02.1993 for allotment of the
subject land as house sites on payment of the market value of
Rs.80,000/- per acre, to be paid in advance by both the societies in
respect of the subject land. The State Government directed the
District Collector to collect the market value of the subject land at
the rates specified in the said G.O. from the two house building
societies in advance, pay the same to the General Manager, South
Central Railway, take possession of the subject land from the
South Central Railway, and allot the same to the said societies.
Questioning the validity of G.O.Ms. No.224 dated 15.03.1993, the
HPA filed W.P.No.11826 of 1993 claiming allotment of land, to the
members of their association, which were in their occupation.
In its order in W.P. No.11826 of 1993 dated 20.02.1993, a
Division bench of this Court observed that an extent of Ac.42.00
cts of land was originally allotted to the State Government for the
railways; the railways found that this extent of Ac.42.51 cts was a
quarry area, and they only required Ac.1.50 cts; the Railways
informed the State Government that Ac.40.51 cts was not required
by them, and they were prepared to surrender the same to the
State Government; since the land was not being properly secured,
a large number of encroachments had come up; two co-operative
Housing Societies had requested for allotment of land as house
sites; the High Court had, by order in W.P. No.9874 of 1992 dated
30.09.1992, directed the State Government to consider allotment
of house sites to the two co-operative societies; consequently the
impugned G.O. was passed; in the meanwhile the Railways tried to
get the land vacated of encroachments; this led to an order being
passed by the Appellate authority under the Public Premises
(Eviction) Act, 1971; the parties to that appeal consisted of 158
persons who claimed that some of them had constructed pucca
houses in the land, and they should be given the right to purchase
the property at the market value, in the same manner in which the
offer was given to the railway employees; the fact that they were in
possession by encroaching the land was evident; if the intention of
the State Government was to distribute plots, to the Co-operative
societies as house sites, on payment of market value, there was no
reason why a similar offer should not be made to those who were
already in possession, and whose claim was that they had already
built pucca houses on the land; and the State Government should
consider the applications of these persons who were in occupation,
for allotment of sites, on payment of market value in the same
manner in which the offer was made to the Co-operative societies;
and it would be unreasonable to evict them from the premises.
While directing that the eviction order of the Appellate Authority be
kept in abeyance, the respondents were directed to consider the
claim of HPA for allotment of house sites on payment of market
value in the manner in which the request of the Employees
societies was being considered. W.P. No.25593 of 1995 filed by
the HPA, against the order of the District Judge, Ongole in A.S.
No.78 of 1992 dated 28.09.1995, was dismissed as infructuous by
order dated 20.09.1995.
On a petition being filed by the General Manager, South
Central Railway, in Rev.WPMP Nos.11240 and 33271 of 1997 in
W.P. No.11826 of 1993, a Division bench of this Court, by its order
dated 21.03.2005, observed that both the earlier orders passed by
the Division bench in W.P. No.11826 of 1993 and W.P. No.25593 of
1995 did not examine the merits of the order of eviction passed by
the Estate Officer which was upheld by the District Judge; no
finding had been recorded by this Court as to whether the order of
eviction was valid or not; this was a mistake apparent on the face
of the record, which necessitated examination; and, therefore,
Review Applications were allowed and the orders passed in W.P.
No.11826 of 1993 and W.P. No.25593 of 1993 were recalled, and
both the Writ Petitions were placed for final hearing before the
appropriate bench along with W.P. No.9472 of 2004, 9479 and
22635 of 2004. The Division bench permitted parties to file
pleadings with regards subsequent events, and directed all the
Writ Petitions to be listed together.
As the earlier order of the Division bench in W.P. No.11826
of 1993 dated 20.02.1997 has been recalled, we are now required
not only to examine the validity of G.O.Ms. No.224 dated
15.03.1993 which is under challenge in W.P. No.11826 of 1993,
but also to examine the claims of HPA for allotment of house sites
with respect to the plots which they had encroached upon; and
whether the South Central Railway can be directed by a writ of
mandamus to allot the subject land to the HPA or the Ongole Taluq
Non-gazetted Officers Co-operative house building society or the
Railway Employees Cooperative House Building Society, Ongole;
and, if so, the rate at which the Railways should be directed to
alienate the land in favour of the Government of A.P. to enable the
latter, in turn, to allot them as house sites to both the Societies
and the HPA.
Heard Sri S. Ramachandra Rao, learned Senior Counsel
appearing on behalf of the petitioners in W.P. No.3287 of 2007 and
W.P.No.24069 of 2008; Sri M.R.K. Chowdary, learned Senior
Counsel appearing on behalf of the petitioners in W.P.No.11826 of
1993 and W.P. No.25593 of 1995, and Sri P. Sri Raghuram,
learned Senior Counsel appearing on behalf of the petitioners in
W.P. No.22635 of 2004. Sri M.L. Ali, learned Standing Counsel,
put forth his submissions on behalf of the respondent-Railways
and the learned Government Pleader for Revenue (Assignments)
put forth his submission on behalf of the State of Andhra Pradesh.
While drawing our attention to the correspondence between
the Railways and the State Government on the one hand, and the
State Government Officials and the petitioner-Associations on the
other, it is contended on behalf of the petitioners that, having
agreed to relinquish Ac.41-50 acres of Railway land at Ongole, at
Rs.2,59,674/- per acre, it was not open to the Railways thereafter
to turn around and contend that the said amount is meagre; on
the basis of the assurances given by the Chief General Manager
and the Chief General Engineer, South Central Railway, the
petitioner-Associations had made payment, receipt of which was
acknowledged by the Railways; after having received the entire sale
consideration, it is not open to the Railways to now contend that a
higher price should be paid; the doctrine of promissory estoppel is
attracted, and the petitioners are entitled to be allotted plots in
accordance with the amounts already paid by them; on the basis of
the assurance of the Railways and the State Government, the
petitioners had altered their position, and had paid the sale
consideration at the market value determined by the State
Government; having accepted the sale consideration, it is not open
to the Railways to resile from their promise, and demand higher
amounts; and a Writ of Mandamus should, therefore, be issued by
this Court directing the respondent-Railways to hand over the
subject land to the State Government, and for the State
Government, in turn, to hand it over to the petitioner-Associations
which would, in turn, allot plots to the members of their respective
associations, who had paid the amounts, as directed by the State
Government, to the Railway authorities.
Sri P. Sri Raghuram, learned Senior Counsel appearing on
behalf of NGGOs Association, would further submit that, though
the members of the association he represented had already paid
the entire sale consideration, they were willing to pay even the
higher market value as determined by the District Judge,
Prakasam, in the report submitted by him pursuant to the order
passed by the Division Bench in Review WPMP No.11240 of 1997
dated 16.8.2004.
On the other hand Sri M.L. Ali, learned Standing Counsel for
the respondent-Railways, would submit that, while the Railways
had agreed in principle to alienate the subject land of Ac.40.51
cents to the State Government, it was made clear that the said
alienation would be at the market value prevailing on the date of
transfer; even the very low rate of Rs.2,59,674/- per acre,
determined on the basis of the report of the Mandal Revenue
Officer dated 24.01.2003, was not paid for more than a year
thereafter till February, 2004; the competent authority, to alienate
Railway land, is the Railway Board which had directed that the
subject land should be alienated only at the market value
prevailing on the date of transfer; the several letters, referred to by
the petitioners, would itself show that there was no
correspondence between the petitioners and the Railways; it is
clear therefrom that the Railways were only corresponding with the
State Government, and not with the petitioner associations; any
assurance given by the State Government to the petitioners cannot
be construed as a promise made by the Railways to the petitioners;
no assurance was given to the petitioners by the Railways that the
subject land would be alienated in their favour at a particular
price; the Railways were obligated, by the Indian Railway Code, to
ensure that they secure the market price prevailing on the date of
transfer; and the petitioners cannot seek a Mandamus that the
subject land should be alienated in the year 2017 at the market
price prevailing in the year 2003, as that would fall foul of the
Railway Code, and the directions issued by the Railway Board.
Learned Government Pleader for Revenue would submit that,
while the Railways claim that an extent of Ac.40-51 cents belongs
to it, it is evident from the revenue records that an extent of
Ac.5.82 cents is classified as hill poramboke; and it is only an
extent of Ac.36.19 cents of land which belongs to them.
As Learned Senior Counsel appearing on behalf of the
petitioners have extensively referred to the correspondence
between Railways officials and officials of the Government of
Andhra Pradesh, in support of their contention that the railways
cannot resile from their promise to alienate the subject land in
favour of the petitioner associations, more so as they had received
the entire sale consideration from its members, it is useful to refer
to the exchange of letters, between these officials, albeit in brief.
The District Collector, Prakasam, by his letter dated
02.01.1991, informed the Divisional Railway Manager, South
Central Railways that the Ongole Taluk N.G.G.Os., House Building
Society (NGGO Society for short), vide their letter dated
22.11.1990, had requested that house site pattas be granted on
payment of market value, in the land covered by the Railway track;
the Mandal Revenue Officer had reported that the subject land was
classified as railway poramboke in the village accounts; the
Railway department was not utilizing the land for the last 15 years;
these lands were lying vacant except a small portion which was
encroached by way of houses in Sy.No.18 of Annavarappadu
Village; these lands were fit for habitation; the Mandal Revenue
Officer had recommended grant of house site pattas to the NGGO
Society on payment of market value, subject to obtaining the
consent of the railway authorities; the State Government, under
G.O.Ms. No.634 dated 02.07.1990, had agreed to consider sale or
lease of its lands, to various categories of government employees,
on payment of cost or lease amount if suitable land is available;
and as per BSO 23(ii), when the Central Government no longer
required any land which was in their possession, the State, in
which it was situated, could be given the option of assuming
possession of the whole or any portion thereof. The District
Collector requested the Divisional Railway Manager to offer his
opinion regarding transfer of the land in favour of the State
Government on payment of the market value so as to enable him to
issue house site pattas to the NGGO Society.
The Senior Divisional Engineer, South Central Railway
informed the District Collector, by his letter dated 06.02.1991, that
one of the proposals was to use the land partly or fully for the
Railway Employees House Building Societies (Railway Societies
for short); as per the extant instructions, such surplus land would
be handed over only to the State Government, if no other Central
Government department was in need thereof; and if the land was
given possession to the State Government, the latter had to
arrange for payment of compensation at the prevailing market
value. The District Collector was requested to furnish the
prevailing market value of the said land, and to help the Railway
Administration in evicting encroachments over the subject land so
that, if the land was proposed to be transferred finally, there would
be no difficulty in giving vacant possession thereof.
The District Collector, Prakasam, vide his letter dated
11.12.1991, informed the Divisional Railway Manager that the
Mandal Revenue Officer, to whom the matter was referred to, had
reported that the market value, of the surrounding lands, ranged
from Rs.1,84,000/- to Rs.3,04,900/- per acre; the sales, which
occurred in the vicinity of the land, did not represent the true
market value; Rs.2,00,000/- to Rs.2,25,000/- was required for
reclamation of the lands; and the Mandal Revenue Officer and the
Revenue Divisional Officer, Ongole had recommended the market
value of the proposed lands at Rs.80,000/- per acre.
The General Manager, South Central Railway informed the
Secretary, Revenue Department, Government of A.P., vide letter
dated 12.02.1992, that an extent of 1.50 Acres near Ongole Station
yard, was required for railway use; since the balance land of
Ac.40.51 area was far away from the Railway Station, and it was
no longer required by the Railways, it was proposed to dispose of
this land to the State Government on the following terms and
conditions i.e. (1) the complete area of the land of Ac.40.51 should
be taken over by the State Government; (2) the market value of the
land should be the value at the time of handing over the land; (3)
the State Government may consider allotment of a portion of the
land to the Railway Societies on payment of the market value of the
land, since, as per the extant orders of the Railway Board, railway
land was not being given to the Railway Societies; the request of
railway employees, for allotment of a portion of the railway land to
the Railway Societies, may be considered by the State Government,
after taking the land from the railways; and the land would be
handed over to the State Government, after dismantling the track
and collecting all the materials, and affording credit to the
Railways account. The State Government was requested to advise
whether they were willing to take over railway land at Ongole on
these conditions. Reminders were sent by the General Manager,
South Central Railway to the Secretary, Revenue Department,
Government of Andhra Pradesh on 08.07.1992, 05.08.1992 and
11.09.1992. By his letter dated 16.12.1999, the General Manager,
South Central Railway requested the Secretary to the Government,
Revenue Department to convey the consent of the State
Government, for the proposal afresh, for taking further action to
relinquish railway land in favour of the State Government.
A reminder, to that effect, was against sent on 21.01.2000.
In the joint report dated 12.09.1994/26.09.1994, the
Mandal Revenue Officer informed that they had arrived at the
present net market value of the subject land at Rs.1,49,355/- per
acre. The General Manager, South Central Railway informed the
District Collector, by his letter dated 08.08.1995, that the rate of
Rs.80,000/- per acre, as advised by the State Government, was
very low; the market value of the land was obtained from the Sub-
Registrar taking into account the reclamation charges per acre;
and the value was arrived at Rs.1,77,493/-, excluding solatium at
30% and contingency charges at 3%. While referring to the letter
of the District Collector dated 25.03.1995, wherein it was stated
that the associations had accepted the market value at
Rs.1,49,355/- per acre, the General Manager requested the
District Collector to confirm whether the rate of Rs.1,77,493/- per
acre, and other charges, was acceptable to the State Government
to deal further in the matter for obtaining the competent
authoritys sanction.
The District Collector, Prakasam informed both the Societies,
by his letter dated 21.08.1995, that the General Manager, South
Central Railway had fixed the market value at Rs.2,36,065/- per
acre (market value of Rs.1,77,493/- + solatium at 30%
Rs.53,247=90 + contingency charges at 3% i.e Rs.5,324/-). The
societies were requested to file their acceptance letters to pay the
market value of the land, as proposed by the General Manager, at
the Collectors office within a week so that the report could be sent
to the General Manager, South Central Railway.
By his letter dated 05.09.1995, the District Collector
informed the General Manager, South Central Railway that the
market value has already been fixed by the Government, and the
Sub-Registrar was not the authority to fix the market value; it was
upto the railways and the purchasers to negotiate higher or lower
rates; and he was enclosing the acceptance letters received from
the associations for taking further action.
The General Manager, South Central Railway informed the
Executive Director, Land Management, Railway Board, vide letter
dated 06.09.1995, that it was decided to dispose of an extent of
Ac.40.50 cents in terms of the provisions laid down by the
Engineering Code, keeping the remaining Ac.1.50 cents for the
future needs of the Railways; the State Government had advised
that they were prepared to take over the land at Rs.80,000/- per
acre; since the rate offered by the State Government was very low,
the Divisional Railway Manager was asked to collect the market
value by causing local enquiry; they had assessed the rate per acre
at Rs.1,19,750/- (i.e., Rs.2,96,710/- per acre less Rs.1,76,960/-
towards reclamation charges); based on the rates given by the
District Registrar of Assurance, Ongole and the Sub-Registrar,
Ongole, the weighted average rate per acre worked out to
Rs.3,54,453/-, and after deducting the cost of reclamation of
Rs.1,76,960/-, the net value of the land per acre came to
Rs.1,77,493/- which was higher than the rate quoted by the
Collector or assessed by the Division; the remarks of the Financial
Advisor and the Chief Accounts Officer of the Railways was that
Rs.1,77,493/- was reasonable, taking into consideration the
problems of encroachment; the land should be relinquished to the
State Government which, in turn, would allot the same to the
Societies; and the Boards approval was being sought in terms of
the Boards letter dated 24.04.1992, as the value exceeded Rs.5
lakhs. The Railway Board was requested to approve the proposal
for relinquishment of surplus railway land admeasuring Acs.40.51
cents at Rs.1,77,493/- per acre, plus the usual codal charges and
contingencies, to the State Government. Again by proceedings
dated 25.06.1996, the General Manager, South Central Railway
requested the Executive Director, Land Management, Railway
Board to communicate its approval, for relinquishing the land, to
the State Government.
The Additional Secretary to the State Government, by his
letter dated 04.06.1998, forwarded a copy of the representation
dated 27.05.1998 received from the President, NGGO Society to the
Collector requesting him to send his report in the matter
immediately so that the Government would hand over the land to
the NGGO Society.
The District Collector informed the Secretary to the
Government, Revenue Department, vide his letter dated
16.08.1998, that, as there were unauthorized encroachments by
way of houses, the railway authorities had initiated eviction
proceedings under the provision of the Public Premises (Eviction of
Unauthorized Occupants) Act, 1971 against about 360
encroachers; aggrieved thereby, the encroachers had filed C.R.P
and had preferred an appeal in A.S.No.78 of 1992, which was
dismissed by the Additional District Judge, Ongole, by his order
dated 28.09.1995; aggrieved thereby, the Annavarappadu Hut
Peoples Association, Ongole (HPA for short) had filed
W.P.No.11826 of 1993 and, by order dated 20.02.1997, the High
Court had directed that the eviction order be kept in abeyance; the
respondents were directed to consider the claim of the HPA for
allotment of house sites on payment of market value in the same
manner in which the Railway Societies were being considered;
aggrieved thereby, the NGGO Society had preferred a review
petition stating that the encroachers were spread all over the land,
and the encroachers should be re-located at one place to enable
the associations, as well as the Government, to make better use of
the land; the HPA had also informed that they were willing to pay
the market value, and they should also be allotted the respective
extents in their occupation; while the total number of
encroachments as on 30.02.1995 were 295, the President of the
HPA had represented that 700 families had encroached upon the
sites since 30 years; and he proposed to hold a joint meeting, with
the associations, on receipt of a report along with a sketch from
the Mandal Revenue Officer.
A copy of representation received from the NGGO Association
was forwarded by the Secretary to the Government to the District
Collector, Prakasam, by his letter dated 02.09.1998, requesting
him to convene a joint meeting and take action. Accordingly, a
joint meeting was convened in the Chambers of the Joint Collector
on 25.06.1999 wherein all the four associations informed the Joint
Collector that they were willing to pay the market value for the
railway land. They also agreed that payment would be made at
their own risk, and subject to acceptance of the Railway Board.
They informed that payment would be made by way of demand
drafts drawn in favour of the Divisional Manager, South Central
Railway, Secunderabad, and the demand drafts would be handed
over to the Mandal Revenue Officer, Ongole for transmission to the
Railway Authorities through the District Collector, Ongole. The
AEN, South Central Railway had informed that, on receipt of the
land value, he would submit proposals to the General Manager,
South Central Railway for acceptance of the market value received
from the four associations, and from other encroachers.
The Mandal Revenue Officer issued demand notice dated
27.10.1999 to the Railway Societies informing him that
Rs.10,71,738=68 should be deposited by way of demand draft on
10.11.1999 with the S.B.I. Ongole in favour of the Mandal Revenue
Officer; an extent of Ac.4.54 cents would be handed over to the
Societies; and, in case the Societies failed to pay the said amount
within the stipulated time, the said land would not be handed over
to them.
By his letter dated 04.11.1999, the General Manager, South
Central Railway informed the Revenue Secretary, Government of
Andhra Pradesh that proposals were sent to the Railway Board for
their approval of the proposed relinquishment of surplus railway
land measuring Ac.40.51 cents to the State Government; the
Railway Board desired that consent of the State Government
should be obtained, and sent afresh, for the disposal of surplus
Railway land admeasuring Ac.40.51 cents to the State Government
as per codal provisions, and the extant instructions, for their
consideration. He requested that the consent of the Government of
Andhra Pradesh should be sent for taking further action.
The General Manager, South Central Railway informed the
Divisional Railway Manager, Vijayawada, by his letter dated
27.04.2000, that the subject matter was under correspondence
with the Railway Board, and the Government of Andhra Pradesh,
for obtaining Boards sanction for the proposed relinquishment of
Railway land; and an advise be sent to the District Collector,
Prakasam to avoid criticism from the Railway Board. He also
informed that, unless fresh proposals were initiated by the State
Government, this issue could not be finalised. Again, vide letter
dated 27.06.2000, the General Manager, South Central Railway
requested the Revenue Secretary, Government of A.P., to arrange
to send the consent letter of the State Government to the proposed
relinquishment of the subject Railway land in favour of the State
Government. Reminders were sent on 03.03.2001 and
13.03.2001.
The Deputy Director, Land Management, Railway Board,
New Delhi, by his letter dated 14.03.2001, informed the General
Manager, South Central Railway, Secunderabad that approval of
the Ministry of Railways was being conveyed for relinquishment of
railway land measuring Ac.40.51 cents to the Government of
Andhra Pradesh; the transfer of land should be made subject to
fulfilment of the following conditions: (i) possession of the land
should be transferred only after receipt of the market value of the
land prevailing at the time of actual transfer of land; and (ii) other
charges, such as easement and maintenance charges etc, to be
levied in addition as per Rules should be collected in advance; and
this was issued in concurrence with the Finance Directorate of the
Ministry of Railways.
By his letter dated 14.02.2002 the District Collector,
Prakasam informed the General Manager, South Central Railway
that a meeting was held in the chambers of the Joint Collector on
25.06.1999 at 11.00 A.M; the four associations had agreed that the
payment which they make would be at their own risk, and subject
to acceptance of the Railway Board. The District Collector
requested the General Manager to consider the proposal regarding
payment of market value of Rs.2,36,067/- per acre as suggested
by the General Manager himself on 08.08.1995, and for the
proposal to be accepted.
By letter dated 13.05.2002 the Divisional Railway Manager
(Works), South Central Railway informed the District Collector,
Prakasam that, by their earlier letter dated 22.03.2002, he had
requested to arrange to issue the present day market value
certificate in respect of Railway quarry lands at Ongole covered by
certain Survey Nos in Mamidipalem and Annavarappadu villages,
but their reply was awaited. The District Collector was informed
that, as the Competent Authority of Railways had decided to
relinquish the said railway land on payment of the present market
value, the valuation certificate, in and around the said railway
lands, was required. The District Collector was requested to issue
the valuation certificate so that the long pending issue could be
settled at the earliest.
By his letter dated 16.10.2002 the General Manager, South
Central Railway informed the District Collector, Prakasam District
that approval of the Railway Board was obtained for transfer of
Ac.40.51 cents to the State Government on payment of current
market value at the time of actual transfer of land, along with
other codal and miscellaneous charges; the District Collector had
been requested to advise the current market value of land which
was yet to be received; as per the land plans available with their
office, an extent of Ac.5.82 cents in Survey No.63 at Mamidipalem
village belonged to the South Central Railway; and the Government
of Andhra Pradesh may take over the complete land of Ac.40.51
cents duly arranging payment of the market value of the land at
the time of actual transfer as approved by the Railway Board.
The District Collector, Prakasam by his dated 25.01.2003,
while referring to the letter of the General Manager, South Central
Railway dated 28.02.2002, informed the General Manager, South
Central Railway that the matter was referred to the Mandal
Revenue Officer, and he had submitted a report on 24.01.2003
recommending the market value of Rs.2,59,674/- per acre; he had
also informed that the Railway Societies had paid a total amount of
Rs.10,71,769/- by way of demand drafts and the NGGO Society
had paid Rs.21,45,838/-; and the HPA had paid Rs.31,73,574/- as
against Rs.49,71,524.40 ps. leaving a balance of Rs.17,97,906.00;
and the amount was deposited with the Central Bank, Ongole in
the name of the Mandal Revenue Officer. The District Collector
recommended the revised market value of the land at
Rs.2,59,674/- per acre, and requested the Railway authorities to
accept the said proposal.
The FA & CAO, South Central Railway, Secunderabad
informed the Chief General Manager, South Central Railway, by
his letter dated 10.04.2003, that their office had agreed for the
relinquishment of railway land admeasuring Ac.40.51 cents at
Ongole at the market value of Rs.2,59,674/- per acre, as advised
by the District Collector; it was advised that, at the time of actual
transfer of land, the Senior Divisional Engineer may be asked to
ascertain the prevailing market value from the revenue authorities,
and then enter into the transfer deed; and the further conditions
put-forth by the railway board, vide their letter dated 14.03.2001,
may be strictly followed.
By his letter dated 09.07.2003, the Chief General Engineer,
South Central Railways informed the District Collector, Prakasam
that it had been decided to relinquish 40.51 acres of Railway land
at the rate of Rs.2,59,674/- per acre amounting to
Rs.1,05,19,394/-; and, in addition, easement and maintenance
charges, if any, may have to be paid before transfer of land. He
requested that the amount be remitted with the Financial Adviser
and Chief Accounts Officer, South Central Railway, Secunderabad;
and, after remittance of the full amount to the Railways, the other
procedure for handing over of the land would be followed.
By his letter dated 26.08.2003, the Chief General Engineer
informed the District Collector that the amount, as indicated
earlier, be remitted to the FA & CAO, South Central Railway,
Secunderabad, before transfer of the land; and, after remittance of
the full amount to the Railways, the other procedure of handing
over of land shall be followed.
The District Collector informed the Chief General Manager,
South Central Railway, by his letter dated 15.12.2003, that the
Mandal Revenue Officer had reported that the NGGO Society and
the Railway Societies had paid the full amount of Rs.35,39,406/-
for the total extent of Ac.13.63 cents (Ac.9.09 cents to NGGOs
Society and Ac.4.54 cents to the Railway Society); the HPA had
paid a major portion of the amount, and a small balance was still
due; the demand drafts, submitted by the said two associations,
was being forwarded; and the balance amount would be paid soon
after collection of the amount from the HPA.
While acknowledging receipt of four demand drafts, the Chief
General Engineer, South Central Railway informed the District
Collector, by his letter dated 02.01.2004, that the demand drafts
for Rs.35,39,409/- could not be realized till the entire payment,
amounting to Rs.1,05,09,394./- together with easement and
maintenance charges, if any, was fully paid to the Railways. The
District Collector, Prakasam was informed that till such time the
entire payment was made, the four demand drafts would be kept in
the safe custody of the office. The District Collector, Prakasam was
requested to arrange for payment of the balance amount from the
HPA to enable relinquishment of Railway land at the earliest. He
was also informed that, if the balance amount was not paid by
28.02.2004, the four demand drafts would be returned to him.
By his letter dated 08.01.2004, the District Collector,
Prakasam directed the Mandal Revenue Officer, Ongole to arrange
for payment of the balance amount from the HPA towards the
market value of railway land, and remit the same to the Financial
Adviser and Chief Accounts Officer, South Central Railway,
Secunderabad by the end of February, 2004; any deviation to
those instructions would be seriously viewed; and the matter be
treated as urgent.
The Chief General Manager, South Central Railway informed
the District Collector, Ongole, by his letter dated 06.02.2004, that
the demand drafts for Rs.35,39,409/- were kept in safe custody till
the entire payment was made to the Railways; if the entire amount
was not paid within six months from the date the total amount was
advised for payment i.e., vide office letter dated 27.08.2003, fresh
market value would be taken, and the amount due for payment
would be revised and advised. The District Collector was requested
to arrange for payment of the balance amount immediately to settle
the long pending issue.
By his letter dated 25.02.2004, the District Collector
informed the Chief General Manager, South Central Railway that,
from out of 40.51 acres, only an extent of Ac.36.19 cents belonged
to the Railway Department in Mamidipalem and Annavarappadu
Villages; and the remaining extent of Ac.5.82 cents in Survey
No.63-1 of Mamidipalem village was classified as Mungamur
Konda as per the Revenue records, and belonged to the Revenue
Department of the Government of Andhra Pradesh. He requested
the Chief General Manager, South Central Railway to delete this
land admeasuring Ac.5.82 cents from the land belonging to the
Railway Department. He also enclosed a copy of the report of the
Mandal Revenue Officer dated 25.02.2004, along with three
demand drafts for Rs.54,68,685/-.
The District Collector, Prakasam was informed by the Chief
Engineer, South Central Railway, Secunderabad, vide his letter
dated 26.02.2004, that the entire extent of Ac.40.51 cents
belonged to the Railways; and the same would be relinquished only
on payment of the entire amount of Rs.1,05,19,394/-. The District
Collector, Prakasam was advised to make the balance payment
without further delay, otherwise fresh market value would be
taken, and the amount due for payment would be revised. A
similar letter was addressed to the Revenue Divisional Officer,
Ongole, vide letter dated 23.03.2004.
By his letter dated 13.04.2004, the Chief General Manager,
South Central Railway, while acknowledging receipt of one demand
draft dated 12.04.2004 for Rs.15,11,303/-, also stated that the
seven demand drafts sent earlier for Rs.35,39,406/- and
Rs.54,65,685/- had been sent to the Chief Cashier/SC Railway,
Secunderabad for realisation; and on realisation of the entire
amount of Rs.1,05,19,394/-, further action would be taken for
relinquishment of the said land.
By his letter, dated 24.05.2004, the Divisional Railway
Manager, South Central Railway informed the Chief General
Manager that the State Government had paid Rs.1,05.19.394/- for
relinquishment of railway land of Ac.40.51 at Ongole; in their
letter, dated 05.03.2004, they had mentioned that the present
market value was in the range of Rs.79,20,000/- to Rs.95,04,000/-
per acre; this meant that the total value of the land, to be
relinquished at Ongole, was in the range of Rs.32,08,38,200/- to
Rs.38,50,07,040/-; and this fact may be taken into account while
taking any decision on the relinquishment of Railway Land to the
State Government.
By his letter dated 08.05.2004, the District Collector
informed the Chief General Manager, South Central Railway that
the latter had, by his letter dated 13.04.2004, informed that
demand drafts for Rs.1,05,19,394/- had been received, and further
action would be taken to relinquish the land on realization of the
demand drafts; at that stage, the Divisional Railway Manager,
South Central Railway had informed that an extent of Ac.4.50
cents originally forming part of the land proposed to be spared by
Railways to the State Government, was proposed to be retained by
the Railways for laying a new road for granite lorry traffic to avoid
plying of vehicles through the busy residential areas of Ongole; the
entire amount of Rs.1,05,19,394/- was paid to the Railways; and
further action should be taken to hand over the railway land at
Ongole to the associations immediately as per the orders issued in
the Chief General Managers proceedings dated 09.07.2003.
The Senior Divisional Engineer, South Central Railway,
Vijayawada informed the General Manager, South Central Railway,
vide proceedings dated 02.06.2004, that they had made an
independent enquiry, and had obtained the current market value;
and as per the certificate issued by the District Registrar, Ongole,
the market value prevailing ranged between Rs.79,86,000/- and
Rs.95,83,200/- per acre obtained as on 01.10.2003, whereas the
District Collector had recommended at Rs.1,95,244/- per acre.
The Chief General Engineer, South Central Railway,
requested the Divisional Railway Manager, South Central Railway,
Vijayawada, by his letter dated 22.07.2004, to ascertain the
present market value from the Collector, and other appropriate
State Government authorities; and take further action accordingly.
The Senior Divisional Engineer, in turn, requested the District
Collector, Prakasam, by his letter dated 12.08.2004, to furnish the
present market value of the land in Mamidipalem and
Annavarappadu Villages in Ongole.
The General Manager, South Central Railway sought review
of the order passed in W.P.No.11826 of 1993 dated 20.02.1997.
The Division Bench of this Court, by its order in Review WPMP
No.11240 of 1997 dated 16.08.2004, appointed the District Judge,
Prakasam to conduct an enquiry, and report the rates which the
subject lands would fetch in the market as on date, if they were
put to sale without any encumbrances and after removal of
encroachments. The report was directed to be submitted within
four weeks. The District Judge, Prakasam District, submitted his
report to the Registrar (Judicial) stating that the total value of the
entire extend of land in Annavarappadu and Mamidipalem villages
was Rs.24,93,40,580/- as per the prevailing market value
according to his enquiries with local persons.
The General Manager, South Central Railway, by his letter
dated 07.09.2004, informed a Member of Parliament that the
representation of the dwellers associations had been examined; as
per the railway boards instructions, relinquishment of Railway
land admeasuring Ac.40.51 cents to the Government would be
subject to realization of full market value of land prevailing at the
time of actual transfer of land, together with other charges such as
easement and maintenance charges; accordingly, the prevailing
market value of the land had been sought from the District
Collector and District Magistrate, Ongole for which the land rates
were yet to be received; on receipt of the market value from the
Collector, and on payment of the difference if any, the land would
be handed over to the District Collector.
By his letter dated 11.11.2004 the Additional Divisional
Railway Manager, South Central Railway, Vijayawada informed the
District Collector that he was called upon to hold a joint meeting
with the District Collector to discuss: (i) arrangement for
conducting joint survey to demarcate Railway land admeasuring
Ac.40.51 acres at Ongole Railway quarry siding; (ii) progress of the
enquiry ordered by the District Collector, Prakasam vide letter
dated 03.08.2004, to enquire into allegations of encroachments;
(iii) arrangement of police protection for eviction of 60 numbers of
unauthorised encroachments which took place subsequent to the
prohibition orders issued by the High Court; (iv) efforts of the
District Administration to protect further encroachments; and (v)
whether allotment of plots to NGGOs Association and Rajiv Gandhi
Association had been made legally by the District Administration.
He sought a convenient date for a meeting to be held.
An additional affidavit was filed before this Court, on behalf
of the General Manager, South Central Railway, stating that the
total value arrived for Ac.40.51 cents was between
Rs.52,76,68,456/- and Rs.55,44,97,662/-.
The exchange of letters, as referred to hereinabove, would
show that the correspondence was mainly between railway officials
and officials of the Government of A.P. on the one hand, and
between the Government of A.P. and the petitioner associations on
the other. It is also evident that no letter was addressed by the
railway officials directly to the petitioners associations. Even in
the absence of any promise being made directly by the Railways to
the petitioners associations, can it be said that the Railways had
made a promise to the petitioners association, and are disabled
from resiling therefrom on application of the doctrine of
promissory estoppel?
Before examining this question, it is necessary to
understand the scope of this doctrine, variously called 'promissory
estoppel', 'equitable estoppel', 'quasi estoppel' and 'new estoppel'.
This doctrine of promissory estoppel is a principle evolved by
equity to avoid injustice, and is neither in the realm of contract nor
in the realm of estoppel. The basis of this doctrine is the inter-
position of equity. (M/s.Motilal Padampat Sugar Mills Co. Ltd. v.
The State of U.P. ). This doctrine, well established in
administrative law, represents a principle evolved by equity to
avoid injustice. (Amrit Banaspati Co. Ltd. v. State of Punjab ;
Union of India v. Godfrey Philips India Ltd. ). The true principle
of promissory estoppel is that, where one party has by his words or
conduct made to the other a clear and unequivocal promise which
is intended to create legal relations or affect a legal relationship to
arise in the future, knowing or intending that it would be acted
upon by the other party to whom the promise is made, and it is in
fact so acted upon by the other party, the promise would be
binding on the party making it; and he would not be entitled to go
back upon it, if it would be inequitable to allow him to do so having
regard to the dealings which have taken place between the parties,
and this would be so irrespective of whether there is any pre-
existing relationship between the parties or not. (The Gujarat
State Financial Corporation v. M/s.Lotus Hotels Pvt. Ltd. ;
M/s.Motilal Padampat Sugar Mills Co. Ltd.1). This doctrine has
evolved to prevent injustice where a promise is made by a person
knowing that it would be acted on by the person to whom it is
made, and in fact it is so acted on, and it is inequitable to allow the
party making the promise to go back upon it. (M/s.Motilal
Padampat Sugar Mills Co. Ltd.1).
In order to invoke the doctrine of promissory estoppel, it is
not necessary for the promisee to show that he suffered detriment
as a result of acting in reliance on the promise. If, by detriment,
injustice is caused to the promisee which could result if the
promisor were to recede from his promise, then detriment would
certainly come in as a necessary ingredient. The detriment in such
a case is not some prejudice suffered by the promisee by acting on
the promise, but the prejudice which would be caused to the
promisee, if the promisor were allowed to go back on the promise.
(M/s.Motilal Padampat Sugar Mills Co. Ltd.1). The concept of
detriment is whether it appears unjust, unreasonable or
inequitable that the promisor should be allowed to resile from his
assurance or representation, having regard to what the promisee
has done or refrained from doing in reliance on the assurance or
representation. (Delhi Cloth and General Mills Ltd. v. Union of
India ). It is not necessary, in order to attract the applicability of
the doctrine of promissory estoppel, that the promisee, acting in
reliance of the promise, should suffer any detriment. What is
necessary is only that the promisee should have altered his
position relying on the promise. (M/s.Motilal Padampat Sugar
Mills Co. Ltd.1).
In order to invoke the doctrine of promissory estoppel it is
enough to show that the promisee has, acting in reliance of the
promise, altered his position and it is not necessary for him to
further show that he has acted to his detriment. (M/s.Motilal
Padampat Sugar Mills Co. Ltd.1). Alteration of position only
means that he (the promisee) must have been led to act differently
from what he would otherwise have done. All that is required is
that one should have acted on the belief induced by the other
party. The gist of the equity lies in the fact that one party has, by
his conduct, led the other to alter his position. (M/s.Motilal
Padampat Sugar Mills Co. Ltd.1). The party, asserting estoppel,
must have relied upon the representation made to him. He should
have changed or altered the position by relying on the assurance or
the representation. The alteration of position by the party is the
only indispensable requirement of the doctrine, and it is
unnecessary to prove further any damage, detriment or prejudice
to the party asserting estoppel. The entire doctrine is reliance
based and nothing more. (Delhi Cloth and General Mills Ltd.5).
This doctrine of promissory estoppel is applicable to the
Central Government including the Railways. 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. (Century Spinning and
Manufacturing Co Ltd. v. The Ulhasnagard Municipal Council ;
Union of India. v. Indo-Afghan Agencies ). The Crown cannot
escape by saying that estoppel does not bind it, for that doctrine
has long been exploded. Nor can the Crown escape by praying, in
aid, the doctrine of executive necessity, that is, the doctrine that
the Crown cannot bind itself so as to fetter its future executive
action. (Century Spinning and Manufacturing Co Ltd.6;
IndoAfghan Agencies Ltd.7).
The doctrine of promissory estoppel is applicable against the
Government in the exercise of its governmental, public or executive
functions, and the doctrine of executive necessity or freedom of
future executive action cannot be invoked to defeat the
applicability of the doctrine of promissory estoppel. (Godfrey
Philips India Ltd.3). No distinction can be made between exercise
of a sovereign or governmental function, and a trading or business
activity of the Government, so far as the doctrine of promissory
estoppel is concerned. Whatever be the nature of the function
which the Government is discharging, it is subject to the rule of
promissory estoppel and, if the essential ingredients of this rule
are satisfied, the Government can be compelled to carry out the
promise made by it. (M/s.Motilal Padampat Sugar Mills Co.
Ltd.1).
A public body is not exempt from liability to carry out its
obligation arising out of representations made by it relying upon
which a citizen has altered his position to his prejudice. (Century
Spinning and Manufacturing Co Ltd.6). Public bodies are as
much bound as private individuals to carry out representations of
facts and promises made by them, relying on which other persons
have 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 who acts upon
the promise. (Century Spinning and Manufacturing Co Ltd.6).
An instrumentality of the State cannot commit breach of a solemn
under-taking on which other side has acted, and then contend that
the party suffering by the breach of contract may sue for damages
but cannot compel specific performance of the contract.
(M/s.Lotus Hotels Pvt. Ltd.4).
Law of Promissory Estoppel furnishes a cause of action to a
citizen, enforceable in a court of law against the government if it,
or its officials, in the course of their authority, had extended any
promise which created, or was capable or creating legal
relationship, and it was acted upon, by the promisee irrespective of
any prejudice. (Amrit Banaspati Co. Ltd.2). It is open to a party,
who has acted on a representation made by the Government to
claim that the Government shall be bound to carry out the promise
made by it, even though the promise is not recorded in the form of
a formal contract as required by the Constitution. (Indo-Afghan
Agencies7; The Municipal Corporation of the City of Bombay v.
The Secretary of State for India in Council ). The Government is
not exempt from liability to carry out the representation made by it
as to its future conduct, and it cannot on some undefined and
undisclosed ground of necessity or expediency fail to carry out the
promise, solemnly made by it, nor claim to be the judge of its own
obligation to the citizen on an ex parte appraisement of the
circumstances in which the obligation has arisen. (Indo-Afghan
Agencies7).
For the doctrine of promissory estoppel to apply it is
necessary to show that the Railways have made a promise, acting
upon which the petitioners associations had altered their position,
in that they had acted differently from what they would, otherwise,
have done. While the second limb of the doctrine has been fulfilled
on the petitioners having paid certain amounts to the State
Government which, in turn, forwarded it to the Railways, it is
necessary to examine whether the first limb of this doctrine has
been fulfilled i.e., whether the Railways had made any promise to
the petitioners associations and, if so, the nature of the promise?
The correspondence, referred to hereinabove, would show that the
NGGO Society had requested the District Collector, by their letter
dated 22.11.1990, that house site pattas be granted on payment of
market value, in the subject land belonging to the Railways. This
request was made by the petitioner in view of G.O.Ms. No.634
dated 02.07.1990 issued by the State Government that it would
consider sale or lease of its land to various categories of
Government employees, on payment of cost, if suitable land was
available. It is pursuant to such a request by NGGO Society that
the District Collector, Prakasam had, by his letter dated
02.01.1991, sought the opinion of the Divisional Railway Manager,
for transfer of the land in favour of the State Government on
payment of market value, in order to enable him to issue house
site pattas to the NGGO Society.
It is no doubt true that the Senior Divisional Engineer, South
Central Railway had informed the District Collector, by his letter
dated 06.02.1991, that one of the proposals was to use the land
partly or fully for the Railway Society. However the said letter
dated 06.02.1991 makes it clear that, as per the extant
instructions, railway surplus land would be handed over only to
the State Government on the latter arranging payment of
compensation at the prevailing market value. The correspondence
between the Railway officials and the State Government officials is
mainly regarding the true market value of the subject land and,
while initially the District Collector Prakasam, had, by his letter
dated 11.12.1991, informed the Railways that the value of the
proposed land was Rs.80,000/- per acre, their market value was
revised thereafter by the District Collector in his letter dated
25.03.1995 to Rs.1,49,355/- per acre. The General Manager,
South Central Railways informed the District Collector, by his
letter dated 08.08.1995, that the information obtained by them
showed that the market value was RS.1,77,493/- per acre plus
30% solatium plus contingency charges at 3% (ie.) for a total sum
of Rs.2,36,065/- per acre.
The General Manager, South Central Railway sought the
approval of the Railway Board, by letter dated 06.09.1995, for
relinquishment of the subject land at Rs.1,77,493/- per acre plus
usual codal charges and contingencies. It is only by letter dated
14.03.2001 was the approval of the Railway Board conveyed to the
then General Manager, South Central Railway for relinquishment
of the subject land to the State Government. The conditions
stipulated by the Railway Board, for such alienation, was for
transfer of possession of the subject land, to the State
Government, only after receipt of the market value of the land
prevailing at the time of its actual transfer and for collection in
advance of easement and maintenance charges. Pursuant to the
approval of the Railway Board, the Railways, by their letter dated
22.03.2002, sought information from the District Collector
regarding the current value of the land. It is more than nine
months thereafter, that the District Collector, by his letter dated
25.01.2003, had recommended the market value of the subject
land at Rs.2,59,674/- per acre.
While the Chief General Manager, South Central Railway had
conveyed his concurrence, by his letter dated 09.07.2003, to the
market value as determined as Rs.2,59,674/- per acre plus
easement, and maintenance charges (i.e.) for a total sum of
Rs.1,05,19,394/- for the total extent of 40.51 acres, the fact
remains that, despite repeated reminders, the said amount was not
remitted in its entirety, by the petitioners Associations, till
12.02.2004 i.e for more than nine months after communication of
the concurrence, of the Chief General Engineer to the District
Collector, by letter dated 09.07.2003.
In the meanwhile, the District Collector informed the
Railways, by his letter dated 25.02.2004, that only an extent of
36.19 Acres, from out of the total extent of 40.51 acres belonged to
the Railways, and the remaining extent of 5.82 acres in
Mamidipalem village was classified as a hillock and belonged to the
State Government. This claim of the State Government was
disputed by the Chief Engineer, South Central Railway who, by his
letter dated 26.02.2004, informed that the entire extent of 40.51
Acres belonged to the Railways. While matters stood thus, the
Chief General Manager was informed by the Divisional Manager, by
his letter dated 24.05.2004, that the present market value of the
subject land was in the range of Rs.79.20 lakhs to Rs.95.04 lakhs
per acre; and this information was, in turn, communicated by
Chief General Manager to the District Collector.
Before this dispute regarding the extent of land belonging to
the Railways, and its market value, could be finally resolved the
Railways sought review of the order passed by this Court in W.P.
No.11286 of 1993 dated 20.02.1997 and, by order dated
16.08.2004, the Division Bench appointed the District Judge to
conduct an enquiry and report the rates which the subject land
would fetch in the market as on date, if they were put to sale
without any encumbrance, and after removal of encroachments.
In the report submitted by him to this Court, the District Judge
opined that the total value of the subject land was Rs.24,93,40,580
as per the prevailing market value. This market rate of Rs.24.93
crores was also disputed by the Railways which, in its additional
affidavit filed before this Court in the Review WPMPs, contended
that the total value of the subject land, of an extent of 40.51 Acres,
was between Rs.52,76,68,456/- and Rs.55,44,97,662/-. The
Division bench allowed the review application thereafter on
21.03.2005, and recalled its earlier order in W.P. No.11826 of 1993
and W.P. No.25593 of 1995.
The doctrine of promissory estoppel has certain limitations.
The Government or public authority cannot be debarred by
promissory estoppel from enforcing a statutory prohibition.
Promissory estoppel cannot be used to compel the Government or
a public authority to carry out a representation or promise which
is contrary to law or which was outside the authority or power of
the officer of the Government or of the public authority to make.
(Godfrey Philips India Ltd.3; M/s.Motilal Padampat Sugar Mills
Co. Ltd.1). In public law, the most obvious limitation on the
doctrine of estoppel is that it cannot be evoked to give an
overriding power which the authority does not in law possess. In
other words, no estoppel can legitimate an action which is ultra
vires. Another limitation is that the principle of estoppel does not
operate at the level of Government policy. Estoppel has, however,
been allowed to operate against a public authority in minor
matters of formality where no question of ultra vires arises. (Wade,
Administrative law, 5th edition, pp. 233-34; Express
Newspapers Pvt Ltd. v. Union of India ).
The doctrine of promissory estoppel, being an equitable
doctrine, must yield when equity so requires. If it can be shown,
by the Government or public authority, that, having regard to the
facts as they have transpired, it would be inequitable to hold the
Government or public authority to the promise or representation
made by it, the Court would not raise an equity in favour of the
person to whom the promise or representation is made, and
enforce the promise or representation against the Government or
public authority. The doctrine of promissory estoppel would be
displaced in such a case because, on facts, equity would not
require that the Government or public authority should be held
bound by the promise or representation made by it. (Godfrey
Philips India Ltd.3; M/s.Motilal Padampat Sugar Mills Co.
Ltd.1).
Promissory Estoppel, being an extension of the principle of
equity, the basic purpose of which is to promote justice founded on
fairness and to relieve a promisee of any injustice perpetrated due
to the promisor's going back on its promise, is incapable of being
enforced in a court of law if the promise which furnishes the cause
of action or the agreement, express of implied, giving rise to
binding contract is statutorily prohibited or is against public
policy. (Amrit Banaspati Co. Ltd.2). The doctrine of promissory
estoppel cannot be used to compel public bodies or the
Government to carry out a representation or promise which is
contrary to law or which is outside their authority or power.
Secondly, the estoppel stems from an equitable doctrine. It,
therefore, requires that he, who seeks equity, must do equity. The
doctrine cannot be invoked if it is found to be inequitable or unjust
in its enforcement. (Delhi Cloth and General Mills Ltd.5).
It is only if the person making the promise had the authority
to make it, can he be prevented, by the application of the doctrine
of promissory estoppel from resiling on his promise. It is
necessary, therefore, to examine the power conferred on Railway
officials to alienate Railway Land. Chapter-X of the Indian
Railways Code for the Engineering Department, issued by the
Ministry of Railways (Railway Board), Government of India, relates
to the custody, management and disposal of land. Paragraph-1001
of the Code refers to Article 294 of the Constitution whereunder all
property and assets vest in the Union which is at liberty to dispose
them of by sale, mortgage, etc. Paragraph-1004 of the Code
stipulates, as the duty of the Railway Administration, to preserve
unimpaired the title to all lands in its occupation; and to keep it
free from encroachment. Paragraph-1008 stipulates that all
Railway land should be managed on commercial lines, and each
Railway Administration should endeavour to develop resources of,
and put to profitable use, any areas in its occupation which,
though not eligible for disposal or lying idle, can be put to
profitable use. Paragraph-1010 stipulates that the engineering, or
any other department of the Railways, as decided by the General
Manager at his discretion, will be responsible to him for the
management of all land in the occupation of the Railways.
Paragraph-1035 of the Railway Code relates to disposal of
land not required by the railways and stipulates that, in regard to
all Railway land, the policy of the Railway Board is to limit
holdings to actual requirements, present and prospective; every
Railway Administration should, where they are not in a position to
justify retention of land occupied by them, classify it as eligible for
disposal, and arrange for its disposal agreeable to the rules in the
subsequent paragraphs of the Code. Paragraph-1038 relates to
disposal of land eligible for disposal and, thereunder, where it has
been decided that a certain area of land is no longer required by
any department of the Railways and it is, therefore, eligible for
disposal to follow the procedure prescribed thereunder. The
directions to be observed as stipulated in Paragraph-1038(1) is
that the lands shall be first offered to the Railways or other
Departments of the Central Government, if they desire to acquire
it. Paragraph-1038(2) provides that, if the land is surplus to the
requirements of the Central Government, the State Government, in
which it is situated, would be given the option of assuming
possession subject to the conditions mentioned therein.
Paragraph-1038(2)(c) stipulates that the amount payable for the
land would, in all cases, be its market value on the date of
transfer. Paragraph-1038(2)(e) stipulates that, if the State
Government does not desire to assume possession of any land, the
Central Government should be free to dispose it of to a third party;
but, before doing so, the Central Government would consult the
State Government as to the levy of ground rent or assessment, and
the conditions, if any subject to which it should be sold; and,
therefore, they would dispose of the land subject to the conditions,
which the State Government may desire to impose.
In the present case, the Railways decided to alienate the
subject land in favour of the State Government, and not to the
Petitioner-Associations. It is the State Government which, in turn,
had assured the associations i.e the Railway Society and the
NGGO Society that the land would be allotted to them in
accordance with the terms agreed to by the Railway
Administration. In terms Paragraph-1038(2)(c) of the Railway
Code, the amount payable for the land, in all cases, is at market
value on the date of transfer, and this stipulation is what the
Railway Board had also prescribed in its letter of approval dated
14.03.2001.
Power is conferred, by the Indian Railway Code, for
alienation of railway land on the Railway Board. Para 1038(2) of
the Code stipulates that the amount payable for the land should,
in all cases, be its market value on the date of transfer. In terms of
para 1038(2) of the Code, approval of the Railway Board was
conveyed by its letter dated 14.03.2001 for alienation of an extent
of Ac.40.51 cts to the State Government on condition that
possession of the land should be transferred only after receipt of
the market value of the land prevailing at the time of its actual
transfer, besides collection of easement, maintenance charges etc.
Failure on the part of the petitioners to make payment within time
resulted in the Railway officials refusing to alienate the subject
land to the State Government. Since the Railway Officials are
required to exercise their power strictly in terms of the Railway
code, the doctrine of promissory estoppel cannot be invoked to
carry out any representation which is contrary to the conditions
stipulated in the Indian Railway Code.
In order to invoke the doctrine of promissory estoppel, it is
also necessary that the representation must be clear. For the
purpose of finding whether an estoppel arises in favour of the
person acting on the representation, it is necessary to look into the
whole of the representation made. It is also necessary that the
representation must be unambiguous and not tentative or
uncertain. (Delhi Cloth and General Mills Ltd.5). To found an
estoppel a representation need not, necessarily, be susceptible of
only one interpretation, but such as will reasonably be understood
by the person to whom it is made in the sense contended for, and
for this purpose the whole of the representation must be looked at.
This is merely an application of the old maxim applicable to all
estoppel, that they "must be certain to every intent. (Delhi Cloth
and General Mills Ltd.5; Halsbury's Laws of England, Halsbury's
Laws of England 4th Edn. Vol. 16 p. 1071 para 1595).
While it is true that the Chief General Manager, by his letter
dated 13.04.2004, acknowledged receipt of the demand drafts for
Rs.1,05,19,394/-, and informed the District Collector that further
action would be taken for relinquishment of the said land, the
words further action cannot be construed as a promise to
relinquish the subject land, as just a month thereafter, the Chief
General Manager, South Central Railway was informed by the
letter of the Divisional Railway Manager dated 24.05.2004 that the
total land value ranged between Rs.32.08 crores and Rs.38.50
crores per acre. That the value of the subject land is several times
the consideration of Rs.1.05 crores paid by the petitioners-
associations is also evident from the report of the District Judge,
Prakasam who caused an enquiry into the value of the land
pursuant to the order of the Division bench dated 16.08.2004. The
market value of the land, as ascertained by the District Judge, is
nearly Rs.25 crores which is more than 20 times the consideration
paid by the petitioners-Associations of Rs.1.05 Crores. It would,
therefore, be wholly inappropriate for this Court to direct the
Railways to transfer the subject land to the State Government for
it, in turn, to allot it to the members of the petitioners-Associations
merely for a sum of Rs.1.05 crores.
While Sri P.Sri Raghuram, Learned Senior Counsel
appearing on behalf of the NGGOs Association, submitted that the
members of their Association were willing to pay the market value
of the subject land as determined by the District Judge, Ongole,
Sri S. Ramachandra Rao, Learned Senior Counsel appearing on
behalf of the Railway Employees Association, would request us to
decide their contentions on merits, and submit that the members
of the Railway Societies were neither obligated nor willing to pay
the market value of the subject land as determined by the District
Judge.
In this context, it is necessary to note that the price at which
Government land should be transferred is not for this Court to
stipulate. The Central Government (Railways) is the owner of the
land, and it is open to it to fix such price as it thinks appropriate
having regard to public interest which, inter alia, would include
the interests of revenue. (Rayalaseema Paper Mills Ltd. v.
Government of A.P ). While determining the price of plots, and
the amount to be paid, the Government, even after entering into a
contract, acts purely in its executive capacity. Thereafter the
relations are no longer governed by the Constitutional provisions,
but by the legally valid contract which determines the rights and
obligations of the parties inter-se. (Bareilly Development
Authority v. Ajai Pal Singh ). Price fixation is neither the
function nor the forte of the Court. Nor is it concerned with the
policy or with the rates. The Court would exercise jurisdiction to
enquire into the question, in appropriate proceedings, whether
relevant considerations have gone in, and irrelevant considerations
kept out of, the determination of the price. (Rayalaseema Paper
Mills Ltd.10; Union of India v. Cynamide India Limited ).
The scope of judicial scrutiny would be far less where the
price fixation is not governed by any Statute or any Statutory
Order. It is only where the legislature has prescribed the factors
which should be taken into consideration, and which should guide
the determination of price, would the Courts examine whether the
consideration, for fixing the price mentioned in the Statute or the
Statutory Order, have been kept in mind while fixing the price; and
whether these factors have guided the determination. Courts
would not go beyond that point, more so when there is no law or
statutory provision laying down the criteria or the principles which
must be followed, or which must guide the determination of price.
No doubt, any arbitrary action taken by the State would be subject
to scrutiny by the Courts because arbitrariness is the very
antithesis of the rule of law. But this does not mean that the Court
would act as an appellate authority over the determination of price
by the authorities. (Rayalaseema Paper Mills Ltd.10). What then
should be the nature of relief to be granted in these Writ Petitions?
Before examining this question, it is necessary to take note
of the eviction proceedings initiated against those who had
encroached on the subject railway land i.e several of those whom
the HPA claims to represent. By the notice in Form-A dated
07.07.1992, issued under Section 4(1) of the Public Premises
(Eviction of unauthorised occupants amendment) Act, 1980, the
South Central Railway sought to evict 296 encroachers.
W.P.No.11826 of 1993 was filed by the HPA, and not by any of the
individual encroachers who suffered the orders of eviction.
Aggrieved by the order passed by the Estate Officer, South
Central Railway, Vijayawada, under Section 9 of the Public
Premises (Eviction of Unauthorized Occupants) Act, 1971 (for
short, the Act), to evict encroachers from the subject land, 158
individual encroachers, and the President of Annavarappadu Hut
Peoples Association, Ongole preferred the appeal in A.S.No.78 of
1992 contending that they were in occupation of the sites for more
than two decades; the purpose, for which the respondent had
started eviction proceedings, was vague; the notice issued under
Section 4 of the Act was defective; the order passed under Section
5 of the Act was also defective as the reasons for eviction were not
given; and the occupants were not given a reasonable opportunity
to state their grounds.
In his order, in A.S. No.78 of 1992 dated 28.09.1995, the
Additional District Judge, Ongole observed that appellants 1 to 158
were occupants of the railway siding site; originally the erstwhile
Southern Railway had acquired Ac.42-00 in different survey
numbers of Mamidipalem and Annavarappadu revenue villages
more than a century ago, and had laid a railway track though the
said land for transportation of gravel and ballast quarried in
Mamidipalem and Annavarappadu, which material was being used
by the Railway authorities; after quarrying operations were
completed, and the bottom of the hills in the said villages having
been exhausted, the railway track and the railway siding went into
disuse; and the appellants were claiming that they had encroached
upon the railway site covered by the railway siding, and to have
raised huts therein; and some of them had raised pucca houses in
the place of the huts.
The learned Additional District Judge observed that there
was no dispute that appellants 1 to 158 were in occupation of their
respective sites, which was owned by the Railways; it was not their
case that they were in occupation of the respective railway sites
with any right or permission; their occupation of the respective
sites was, admittedly, without any right or permission, and was
totally unauthorized; appellants 1 to 158 were, therefore, in
unauthorized occupation of Railway property as defined under
Section 2 (2) (g) of the Act; the eviction order, passed by the Estate
Officer under Section 5(2) of the Act, could not be equated with the
eviction orders passed under the Rent Control Act or the Tenancy
Act; in case of eviction of persons, in unauthorized occupation of
public property, the authority was required to satisfy himself that
the site or property, in occupation of the appellants, belonged to
the Government, and to ascertain whether the person, in
occupation of the said property, had occupied it with or without
authority; the moment the respondent came to the conclusion that
the appellants were in occupation of the railway site without any
authority and unauthorizedly, he could straightaway issue the
order, under Section 5 (2) of the Act, for his or her eviction; in the
present case, there was no dispute on the part of the appellants
that the site in their occupation was railway property; appellants 1
to 158 did not make out any case of acquisition of right or title to
their respective sites in their occupation, by way of adverse
possession for over the statutory period; appellants 1 to 158 had
no right to be in possession of the respective sites in their
occupation; and they had no defence at all against the eviction
proceedings launched against them by the Estate Officer of the
Railway Administration.
With regards the contention that the Railway Administration
proposed to alienate the site to the Railway Employees Association
and to the NGGO Association and, if the Railway Administration
intended to sell the sites, then the appellants and other occupants
were prepared to purchase the respective sites in their occupation
on payment of market value, the learned Additional District Judge
held that the railway siding which was in unauthorised
occupation, including by appellants 1 to 158, had become the
heart of Ongole town, as the railway siding went across the Grand
Trunk Road; if the unauthorised occupants intended to purchase
the site at market value, then it was for them to approach the
appropriate authorities with the appropriate prayer; and, while
disposing of the appeal under Section 9 of the Act, the Court had
no power or authority to make any observations about the proposal
to purchase the land at market value. The appeal was dismissed
by the learned Additional District Judge, Ongole holding that
appellants 1 to 158 were in unauthorized occupation of the railway
property, and they were liable to be evicted from the sites in their
occupation.
In his order, in W.P.M.P.No.31535 of 1995 in W.P.No.25593
of 1995 dated 14.11.1995, a learned Single Judge of this Court
directed that the members of the petitioners-Society be continued
in possession and enjoyment of the lands in S.Nos.63, 68, 69 and
70 of Mamidipalem and S.Nos.4, 17, 18, 45, 46 and 47 of
Annavarappadu Revenue Villages suspending the order and decree
passed in A.S.No.78 of 1992 dated 28.09.1995 on the file of the
Additional District Judge, Ongole pending further orders. The
aforesaid order was passed in a Writ Petition filed by the
Annavarappadu Hut Peoples Association represented by its
President E.Mallaiah Gowd, and not by any one of the individuals
who suffered the eviction orders.
The effect of the order, passed in Review WPMP No.11240
and 33271 of 1997 in W.P.No.11826 of 1993 dated 21.03.2005, is
that the earlier order passed in W.P.No.11826 of 1993 and 25593
of 1995 dated 20.02.1997, keeping the eviction order as upheld by
the Additional District Judge, Ongole in abeyance, and in directing
the respondents to consider the claim of the HPA for allotment of
house sites on payment of market value in the same manner in
which the Societies of Railway Employees and the NGGOs was
considered and disposed of, is no longer in force. Consequently,
the earlier orders of eviction passed by the Estate Officer, and as
affirmed by the Additional District Judge, stand revived. As a
result, neither the South Central Railway nor the Government of
Andhra Pradesh is obligated to consider the claim of the members
of the HPA for allotment of house sites on payment of market
value.
Neither have any of the actual encroachers individually
questioned the order passed by the Additional District Judge,
Ongole upholding the order of the Estate Officer directing their
eviction, nor has any submission been put forth before us by Sri
M.R.K. Chowdary, Learned Senior Counsel appearing on their
behalf, on the merits of the order of eviction. The encroachers
(allegedly the members of the HPA), who have admittedly
encroached on the subject railway land, and who have suffered an
order in A.S. No.78 of 1992 dated 28.09.1995, can no longer claim,
as of right, that they should also be treated on par with the railway
society and the NGGO society as their claim for allotment of the
land, which they have encroached upon, is based on the earlier
order passed in W.P. No.11826 of 1993 and 25593 of 1995 which
was recalled by the Division bench in the order passed by it in the
Review WPMP.
We must, however, bear in mind that like the NGGO
Association and Railway Employees Association, members of the
HPA have also paid their share of the total sale consideration of
Rs.1.05 crores which amount is lying with the Railways ever since
April, 2004 i.e for the past nearly 14 years. It is also necessary to
note that the office of the Assistant Divisional Engineer, Ongole
informed the Senior Divisional Engineer, by his proceedings dated
12.11.2005, that the approximate number of encroachments was
685 with 25 pucca buildings (RCC), 570 buildings with AC sheet
roof and 90 thatched huts.
In the light of the order of the Additional District Judge,
Ongole, in A.S. No.78 of 1992 dated 28.09.1995, the encroachers
are liable to be evicted. Since no contentions have been put forth
before us regarding its validity, we affirm the order in A.S. No.78 of
1992 dated 28.09.1995, and dismiss W.P. No.25593 of 1995. The
justification for the Railways, to adopt the circuitous route of
alienating the subject land to the State Government for it, in turn,
to allot it to the members of the Railway society and NGGOs
society, seems to be to overcome the prohibition in the Railway
Code for alienating railway land to railway employees. The fact,
however, remains that this procedure found acceptance with the
State Government, apparently because a part of the subject land
was proposed to be alienated in its favour to enable it to allot it in
favour of the Non-Gazetted Government officers Association, all of
whom were employees of the State Government. Can the HPA, in
such circumstances, be faulted in questioning the validity of
G.O.Ms. No.224 dated 15.03.1993 claiming that, since they were in
possession of a substantial portion of the subject land albeit as
encroachers, it is their possession which should be regularised by
allotment of plots, instead of allotting the subject land to the
Railway and the NGGO societies?
Our attention has not been drawn to any law in force which
confers a right on encroachers to claim that the lands, which they
have illegally encroached upon, should be regularised by allotment
of plots in their favour. In the absence of any statutory right to
claim preferential right for allotment of the subject land, it is not
open to the HPA, which represents these encroachers, to question
allotment of land to the Railway and NGO societies vide G.O.Ms.
No.224 dated 15.03.1993. While we see no reason to examine the
validity of G.O.Ms. No.224 dated 15.03.1993 on its being
challenged by encroachers whom the HPA represents, the above
referred events show that, subsequent to the filing of the aforesaid
Writ Petitions, the Railways have agreed to alienate the subject
land in favour of the State Government, and the dispute between
them relates only to the price at which these lands should be
alienated.
Bearing these aspects in mind, let us now examine the
nature of the relief to be granted to the petitioners-Associations.
While none of the petitioner-associations can claim, as of right,
that the Railways should alienate the subject land in their favour,
that too at the market rate determined by the State Government in
January, 2003, it is not even the case of the Railways that they do
not wish to alienate the subject land in favour of the State
Government. The dispute mainly appears to revolve around the
market price on the basis of which the subject land should be
alienated. The State Government disputes the title of the Railways
over Ac.5.82 cents, and contends that this extent of land has been
classified in the revenue records as hill-poramboke and that, from
out of the total extent of Ac.40.51 cents, only Ac.36.19 cents
belongs to the Railways. There is, admittedly, no bar for the
Railways to alienate at least this extent of Ac.36.19 cents of land.
A substantial portion of the subject land is under encroachment.
Though an order for eviction of 296 encroachers was passed, out of
whom 158 had preferred the appeal in A.S.No.78 of 1992 before
the Additional District Judge, Ongole, it is evident from the letter of
the Assistant Divisional Engineer, Railways, Ongole dated
12.11.2005 that, even by then, there were 685 encroachments,
with 25 pucca buildings (RCC), 570 with ACC roofed buildings and
90 thatched huts.
In case they intend retaining the subject land, the Railways
would now have to initiate action for eviction of several of these
unauthorised encroachments in accordance with the provisions
of the Public Premises (Eviction) Act, 1971. While this Court may
not be justified in issuing a mandamus, it would undoubtedly be in
the interest of all the parties concerned to mutually discuss and
resolve the dispute regarding the price to be paid for alienation of
the subject land. We consider it appropriate, therefore, to dispose
of all the Writ Petitions directing the respondent-Railways, in
consultation with the Government of Andhra Pradesh, to finalise
the market rate at which they are willing to alienate the subject
land in favour of the State Government which, in turn, shall
consider alienation of the subject land to the petitioner-
Associations on receipt of the market value of the subject lands
from the members of the said Associations. The entire exercise,
culminating in a final decision being taken on whether the subject
land should be alienated and, if so, at what price, shall be
completed with utmost expedition and, in any event, not later than
six months from the date of receipt of a copy of this order.
In case the parties are not mutually able to resolve the issue,
the Railways shall then be entitled to retain the subject land and,
instead, refund the consideration received by them of
Rs.1,05,19,394/- (which was paid to them in April, 2004) with
interest at 12% per annum to the State Government which shall,
in turn, pay the said amount to the members of the petitioner-
Associations from whom it was received. This sum of Rs.1.05
crores, with interest at 12% per annum, shall be refunded within
three months of a final decision being taken by the Railways, and
in case the decision is not to alienate the subject lands in favour of
the State Government. It is also made clear that, in case the
Railways do not alienate the subject land to the State Government,
it is open to them to take further action pursuant to the Judgment
of the Additional District Judge, Ongole in A.S.No.78 of 1992 dated
28.09.1995, and to initiate proceedings afresh for eviction of the
other encroachers, (who were not parties to the earlier proceedings
for eviction), in accordance with law.
W.P. No.25593 of 1995 is dismissed and all the other Writ
Petitions are disposed of in terms of the aforesaid directions. The
Miscellaneous Petitions, if any pending, shall also stand disposed
of. No costs.
_______________________________
RAMESH RANGANATHAN, ACJ
_________________
J. UMA DEVI, J.
Date:04.01.2018.
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