2021 INSC 0682
REPORTABLE
                    IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S).    6471      OF 2021
(Arising out of SLP (Civil) No(s).30780 OF 2015)
ANANT RAJ LTD. 
(FORMERLY M/S. ANANT RAJ 
INDUSTRIES LTD.)    ... APPELLANT(S)
    VERSUS
STATE OF HARYANA & ORS.                  … RESPONDENT(S)
WITH
CIVIL APPEAL NO(S).  6472     OF 2021
(Arising out of SLP(Civil) No(s).32798 OF 2015)
CIVIL APPEAL NO(S).  6473    OF 2021
(Arising out of SLP(Civil) No(s). 11082 OF 2016)
J U D G M E N T
Rastogi, J.
1. Leave granted. 
2. The   question   that   arises   for   consideration   in   this   batch   of
appeals   is   whether   the   methodology   adopted   by   the   Respondent
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State of Haryana for grant of licence of its own land on the principle
of First Come First Serve basis for development of a group housing
colony   under   the   Final   Development   Plan   of   Gurgaon­Manesar
Urban Complex for 2025 can be said to be just, proper and legally
tenable in law.  
3. The   High   Court   under   the   impugned   judgment   dated   26 th
August,   2015   taking   note   of   the   Scheme   of   Haryana   Development
and Regulation of Urban Areas Act, 1975  (hereinafter referred to as
the “1975 Act”) read with   Haryana Development and Regulation of
Urban   Areas   Rules,   1976     (hereinafter   referred   to   as   the   “1976
Rules”) held that the policy adopted by the State authorities for the
grant   of   licence   on   the   principle   of   First   Come   First   Serve   basis
cannot be held to be fair, reasonable and transparent method and it
led to an unholy race amongst the applicants in achieving their goal
of   obtaining   grant   of   licence   held   it   against   public   policy   and   in
sequel   thereof   cancelled   the   grant   of   licence   to   the   impleaded
respondents   4   to   7   (Appellant   herein)   with   a   direction   to   the   State
Government   to   consider   the   grant   of   licence   after   framing   a
transparent and fair policy to grant privilege of licence.  
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4.             The   appellants   before   this   Court   are   the   impleaded
respondents whose grant of licence has been cancelled by the High
Court   under   the   impugned   judgment.   At   the   same   time,   since   the
original   petitioners   were   also   deprived   from   grant   of   licence,   they
too   are   in   appeal   before   this   Court   assailing   the   self­same
impugned judgment in the connected appeal.   
5.       The   impleaded   Respondent   Nos.7   to   9   are   the   original
petitioners   at   whose   instance   writ   petition   came   to   be   filed   before
the High Court of Punjab and Haryana at Chandigarh under Article
226/227 of the Constitution against the rejection of their claim for
grant of licence by  an order dated 20 th
  September, 2013 and while
questioning   the   rejection   of   their   claim   for   grant   of   licence,   it   was
also   prayed   that   enquiry   be   held   into   the   functioning   of   the
Department of Town and Country Planning, Haryana and the tailor­
made   mechanism   which   was   adopted   for   grant   of   licence   to   the
privileged builders/developers at the cost of the owners of the land
and appropriate action may be taken against the mal­functioning of
the   Department   and   further   prayed   for   grant   of   licence   in   High
Potential Zone on their land situated in Sector 63A, Gurgaon for the
project of group housing in terms of Section 3 of the 1975 Act.   
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6.   The   facts   in   brief   culled   out   and   relevant   for   the   purpose   are
that   earlier   the   Final   Development   Plan   was   published   on   5 th
February,   2007   under   Section   5   of   the   Punjab   Scheduled   Roads
and   Controlled   Areas   Restriction   of   Unregulated   Development   Act,
1963   (hereinafter   referred   to   as   the   “1963   Act”.     That   the
Respondent   no.2   issued   a   public   notice   dated   1 st
  October,   2010
published   on   4 th
  October,   2010   stating,   inter   alia,   that   the
prospective   Draft   Development   Plan     (DDP)   of   Gurgaon­Manesar
Urban   Complex   (GNUC)   2025   is   published   for     inviting   objections
and   suggestions.     At   the   same   time,   interested   persons   may   apply
on the basis of Draft Development Plan 2025 after its publication in
the   Official   Gazette   with   a   further   rider   that   the   applicant   may
apply   at   his/her   own   risk   knowing   the   afore­stated   position   and
any application received on the basis of Draft Development Plan for
2025 before its publication in the Official Gazette will be rejected.   
7.         It   may   be   relevant   to   note   that   neither   in   the   public   notice
inviting application for grant of licence nor under the Scheme of the
1975 Act and the 1976 Rules thereunder, it is nowhere mentioned
that   the   licence   shall   be   granted   on   the   basis   of   the   alleged   policy
adopted  by  the  Government  of  First  Come First  Serve  basis,  but  it
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appears that all the stakeholders and interested parties are having
access   and   a   knowledge   about   the   principle   of   First   Come   First
Serve   basis,   start   rushing   to   the   office   of   the   Respondent
authorities for submitting their applications.
8. Respondent   nos.7   to   9   (original   writ   petitioners)   submitted
application   under   Section   3  of   the   1975   Act   for   grant   of   licence   to
set   up   a   group   housing   colony   on   its   land   admeasuring   13.618
acres in Sector 60, Gurgaon on 10 th
  September, 2010, much before
the   public   notice   dated   1 st
  October,   2010   being   published   in   the
Official   Gazette   on   4 th
  October,   2010,   and   in   furtherance   an
application   was   submitted   on   6 th
  October,   2010   to   the   second
respondent   for   treating   their   original   application   dated   10 th
September, 2010 in reference to Sector 63A. 
9.           The   present   appellants   also   submitted   their   application
seeking   licence   under   Section   3   of   the   1975   Act   for   setting   up   a
group   housing   colony   on   its   self­owned   land   in   Sector   63A,
Gurgaon   on   4 th
  October,   2010.   It   appears   that   at   the   time   of
publication   of   public   notice   dated   4 th
  October,   2010,   the   subject
land of the Respondent nos.7 to 9 (writ petitioners) became part of
Sector 63A, which obviously came to be rejected by the authority by
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an order dated 9 th
  November, 2010 on the premise that application
was   submitted   for   development   of   land   in   Sector   60   and   was
submitted   prior   to   the   publication   of   DDP   dated   4 th
  October,   2010
with liberty to apply for licence in Sector 63A. 
10.       The   order   of   rejection   dated   9 th
  November,   2010   came   to   be
challenged   by   Respondent   nos.7   to   9   in   Writ   Petition   (Civil)
Nos.18838 of  2010 and 21236 of 2010 which came to  be disposed
of   by   the   High   Court   by   order   dated   9 th
  August,   2011   with   a
direction to decide the application of Respondent nos.7 to 9 afresh
irrespective of sector in which their land fell in accordance with law.
To   their   misfortune,   in   compliance   to   the   order   of   the   High   Court,
their   application   again   came   to   be   rejected   by   a   reasoned   order
passed by the second respondent dated 16 th
 September, 2011.  
11.   Prior   thereto,   Respondent   nos.1   and   2   notified/published   the
Final Development Plan 2025 on 24 th
 May. 2011 and in furtherance
thereof,   Respondent   no.1   came   out   with   the   clarificatory
instructions   dated   5 th
  July,   2012   indicating   that   henceforth   areas
falling   in   high   potential   zone   (GNUC)   to   which   we   are   concerned,
the   date   of   Final   Development   Plan   shall   be   the   effective   date   for
acceptance and consideration of licence applications.  
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12.   The   public   notice   dated   1 st
  October,   2010   which   came   to   be
published  on  4 th
  October, 2010  and the  instructions issued by  the
Respondent   no.2   in   exercise   of   its   powers   under   Section   9A   of   the
1975 Act dated 5 th
 July, 2012 laying down the policy parameters for
allotment of licence on its own land are reproduced hereunder:
“PUBLIC NOTICE
It   is   informed   to   the   General   Public   that   amendment   in   ‘Final
Development  Plan’  Gurgaon  Manesar  Urban Complex published vide
Haryana   Government   Gazette   (Extra   Ordinary)   Notification
No.CCP9NCR/FDP(G)   2007/359,   dated   05.02.2007   is   being   carried
out for which the state level Committee meeting was held 27.09.2010.
It   has   been   observed   that   applications   are   being   received   in   the
Department for granting Change of Land Use permission and licence
applications   on   the   basis   of   such   proposed   amendment.   The   draft
Development   Plan   of   said   Gurgaon­Manesar   Urban   Complex   for
perspective   year   2025   will   be   published   as   per   Section   5(4)   of   the
Punjab   Schedule   Roads   and   Controlled   Areas   Restriction   of
Unregulated   Development   Act,   1963   for   inviting   the   objections   and
suggestions.   Though   a   person   can   apply   on   the   basis   of   the   Draft
Development   Plan­2025   after   publication   in   the   Official   Gazette,   it
does   not   confer   any   right   in   favour   of   the   applicant   with   respect   of
grant   of   change   of   Land   Use   Permission   and   Licence   which   will   not
granted   till   the   publications   of   Final   Development   Plan   Gurgaon­
Manesar   Urban   Complex­2025   under   Section   5(7)   of   the   ibid   act   in
the   Official   Gazette.   It   is   informed   that   the   General   Public   that   the
applicant   may   apply   at   his/her   own   risk   fully   knowing   the   above
stated   position.   Any   application   received   on   the   basis   of   proposed
proposals   in   Draft   Development   Plan,   Gurgaon­Manesar   Urban
Complex­2025   before   its   publication   in   Official   Gazette   will   be
rejected. 
Sd/­
(T.C. Gupta, IAS)
Director, Town & Country Planning
Haryana Chandigarh
Email :  tcphry@gmail.com
Dated : 01.10.2010”
“Memo No. PF­25/7/18/2005­2TCP; Date : 5    th
    of July 2012
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SUBJECT:   INSTRUCTIONS   REGARDING   RECEIPT   &   VALIDITY   OF
APPLICATIONS FOR GRANT OF LICENSE.
…………….
Accordingly,   in   accordance   with   the   powers   conferred   under   Section
9­A   of   the   Haryana   Development   and   Regulation   of   Urban   Area   Act,
1975, the Governor of Haryana is pleased to pronounce the following
policy parameters in this regard:
(i) In   the   towns/urban   areas   falling   in   Hyper   &   High   Potential
Zone,   the   date   of   publication   of   Final   Development   Plan   shall   be
effective   date   for   acceptance   and   consideration   of   licence
applications.
(ii) In towns/urban areas falling in Medium & Low Potential Zones,
the   date   of   publication   of   Draft   Development   Plan   shall   be   the
effective date for acceptance and consideration of licence applications
provided
(a) No   further   change   is   envisaged   in   any   subsequent
Development Plan of that area for which ‘in­principle’ approval of the
Government has been obtained;
(b) There   is   no   recommendation   of   DPC/SLC   to   effect
amendments   in   the   Development   Plan   proposals   already   in   vogue   of
the applied area.
(iii) In   case   of   any   Development   Plan   falling   in   more   than   one
Potential   Zone,   the   policy   prescribed   for   the   higher   category   zone
shall be considered to be applicable.
(iv) On account of availability of information regarding Development
Plan   proposals   in   the   public   domain,   demand   drafts   of   scrutiny   fee
and   license   fee   of   any   date   prior   to   publication   of   Draft/Final
Development   Plan,   as   the   case   may   be,   shall   also   be   accepted
provided   the   same   is   valid   for   at   least   one   month   from   the   date   of
submission   of   the   application.   However,   the   effective   date   for
acceptance and consideration of licence applications shall continue to
remain as prescribed under Sr No.(i) and (ii) above.
(v) Any   application   submitted   prior   to   the   prescribed   effective   date
shall   be   considered   as   premature   and   shall   be   returned   for
re­submission after publication of the respective Development Plan.
These instructions shall come into force with immediate effect.”
13.     M/s   Anant   Raj   Ltd.   (Appellant   in   Civil   Appeal   arising   out   of
SLP(C) No.30780 of 2015) was granted licence No.54 of 2013 dated
6 th
  July, 2013 for setting  up of a group housing  colony on its land
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admeasuring   26.065   acres   in   Sector   63A,   Gurgaon   and   M/s
Mahamaya Exports Pvt. Ltd. (Appellant in Civil Appeal arising out of
SLP(C)   No.32798   of   2015)   was   granted   licence   bearing   no.77   of
2014 dated 6 th
  August, 2014 for setting up a group housing colony
on an area of 14.025 acres in Sector 63A, Gurgaon.       At the same
time,   so   far   as   Respondent   nos.7   to   9   are   concerned,   their
application for  grant of licence being  earlier  rejected by  the second
respondent   by   order   dated   16 th
  September,   2011,   the   appeal
preferred at their instance came to be dismissed by an order dated
20 th
 September, 2013.   
14. The impugned decision rejecting application for grant of licence
of   Respondent   nos.7   to   9   by   the   second   respondent   became   the
subject matter of challenge by filing a writ petition before the High
Court of Punjab and Haryana at Chandigarh under Article 226 and
227 of the Constitution. It is not disputed that Respondent nos.7 to
9   did   not   challenge   the   grant   of   liecence   to     the   appellants   by   an
order   dated   6 th
  July,   2013   and   6 th
  August,   2014   in   unequivocal
terms but the fact is that they were impleaded as party respondent
in   the   writ   petition   and   a   prayer   was   made   that   the   procedure
which   was   being   adopted   by   the   State   authorities   for   grant   of
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licence   on   the   principle   of   First   Come   First   Serve   basis   is
unsustainable   in   law,   not   in   public   interest   and   such   arbitrary
action   of   the   respondent   authorities   requires   to   be   interfered   with
by the Court.  
15. The   present   Appellants   filed   their   counter   affidavit   before   the
High   Court   and   contested   the   matter   knowing   fully   well   the
consequence/outcome   of   the   pending   litigation   and   during   the
course   of   proceedings   by   an   order   dated   13 th
  August,   2015,   two
questions   were   framed   by   the   High   Court   for   its   consideration   as
under:
“1.   How   the   licence   for   development   of   a   colony   can   be   granted   on
publication of draft development  plans published in terms of Punjab
Scheduled   Roads   and   Controlled   Areas   Restriction   of   Unregulated
Development Act, 1963?
2.  As  to  how  the   policy   for   grant   of  licence   on  first   come  First   Serve
basis   is   fair   and   reasonable,   in   view   of   the   Hon’ble   Supreme   Court
judgment   titled  as   Centre  for   Public  Interest   Litigation  and  others   v.
Union of India and others, 2012 (3) SCC page 1?”
16. In pursuance to the order of the High Court dated 13 th
  August,
2015,  additional   affidavit  dated  19 th
  August, 2015  was  filed  by  the
second respondent relying upon the practice followed after 5 th
  July,
2012, of which reference has been made earlier.   It was, inter alia,
stated   that   as   per   the   practice   followed   after   5 th
  July,   2012,
applications have been considered for grant of licence in a high and
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hyper   potential   zones   only   on   the   basis   of   the   Final   Development
Plan   published   under   Section   5   of   the   1963   Act   and   there   was   no
prescribed   policy   before   5 th
  July,   2012   pertaining   to   considering
licence   applications   on   the   basis   of   Draft/Final   Development   Plan,
though neither the 1963 Act or 1975 Act made any restrictions for
grant of licence based on Draft Development Plan.  
17. It was further stated that in the town or urban areas falling in
high and hyper potential zones, the date of publication of the Final
Development   Plan   shall   be   the   effective   date   for   acceptance   and
consideration   of   licence   applications   and   so   far   as   the   second
question   raised   by   the   High   Court   is   concerned,   it   was   nowhere
indicated   how   the   policy   of   grant   of   licence   on   First   Come   First
Serve   basis   has   been   introduced.     However,   a   justification   was
tendered that it is fair and reasonable and it will be appropriate to
quote   the   extract   of   justification   tendered   by   the   Respondent   in
reference to its policy for grant of licence on First Come First Serve
basis as under:
“5. That  regarding   second observation  as to how  the policy  for  grant
of licence on first come first serve basis is fair and reasonable in view
of   the   Hon’ble   Supreme   Court   Judgment   titled   as   Centre   for   Public
Interest   Litigation   and   Others   Vs.   Union   of   India   and   Others.   It   is
clarified that the said policy of first come first serve has been adopted
as   a   ‘Principle   of   Natural   Justice’.   It   is   further   added   that   since   no
natural   resource   in   the   ownership   of   Government   is   being   offered
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through a licence under Act No.8 of 1975, the Hon’ble Supreme Court
judgment in Centre for Public Interest Litigation and others Vs Union
of  India  and  others does  not appear  to be applicable in such  licence
cases. The applications for grant of licence are accordingly considered
on   merits   of   the   case   and   as   per   provisions   laid   down   in   the   Act   of
1975 and Rules made thereunder. However, the Government is seized
of   the   matter   and   devising   an   alternate   transparent   system   for   the
purpose is under active consideration. 
In   view   of   the   submissions   made   in   forgoing   paras,   it   is   respectfully
prayed   that   the   above   said   petition   may   kindly   be   dismissed   being
without any merit.”
18. The   High   Court   after   examining   the   Scheme   of   the   1975   Act
and  1976  Rules  and  taking  note   of  the  rival  submissions  made  by
the parties under its judgment impugned held that grant of licence
on   First   Come   First   Serve   basis   is   not   a   fair,   reasonable   and
transparent   method   and   in   consequence   thereof,   cancelled   the
liecence granted to the Appellants, who were Respondent nos.4 to 7
before   the   High   Court   and   directed   the   State   Government   to
consider   the   grant   of   licences   after   framing   a   transparent   and   fair
policy   to   grant   privilege   of   licences   thereafter   in   accordance   with
law. 
19. It is informed to this Court that in supersession of earlier policy
of 2006, the State Government has come out with its self­contained
policy dated 10 th
 November, 2017 for grant of licence and change of
land   use,   permissions   under   Section   9   of   the   1975   Act   and   Rules
thereof   and   under   Section   11   of   the   1963   Act   to   consider   all
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pending  and future applications in terms of its policy  of  2017 in a
fair   and   transparent   manner,   taking   note   of   the   judgment
impugned of the High Court dated 26 th
 August, 2015.  
20. Mr.   Ranjit   Kumar,   learned   senior   counsel   for   the   Appellants,
submits   that   their   application   for   grant   of   licence   was   duly
considered   by   the   authority   and   the   same   being   in   order,   fulfilling
the   guidelines  and   instructions   dated   5 th
  July,   2012   issued   by   the
State Government in terms of its policy of 2006, licence was granted
to   the   appellant   and   it   was   not   the   subject   matter   of   challenge
before the High Court in the writ petition preferred at the instance
of   Respondent   nos.7   to   9.       In   the   absence   thereof,   the   finding
recorded by the High Court in setting aside their grant of licence is
not sustainable.   
21.     Learned   senior   counsel   further   submits   that   the   policy   for
grant of licence on First Come First Serve basis was a long standing
practice followed by the respondent authorities and the licence was
to   be   granted   to   the   incumbent   of   its   own   land   in   terms   of   the
parameters   which   have   been   laid   down   under   the   policy   and
submits   that   the   judgment   on   which   the   High   Court   has   placed
reliance   to   non­suit   the   claim   of   the   Appellants   in   Centre   for
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Public Litigation & Ors. v. Union of India & Ors.   (2012) 3 SCC 1
has no application.  
22.     Learned   senior   counsel   further   submits   that   there   was   no
prescribed   policy   before   5 th
  July,   2012   regarding   consideration   of
licence applications on the basis of Draft/Final Plan.   Though there
is no restriction in the 1975 Act for grant of licence based on Draft
Plan,   and   submits   that   although   the   policy­instructions   dated   5 th
July, 2012 sought to bring a change, but as per the practice of the
State   authorities,     Government   was   accepting   applications   on   the
basis   of   Draft   Plans   throughout   and   in   the   instant   case   the
Appellants and other contenders submitted their applications on 4 th
October,   2010   when   the   Draft   Development   Plan   was   published,
however,   the   Final   Development   Plan   was   published   on   24 th
  May,
2011,   still   the   licences   were   granted   to   the   Appellants   on   6 th
  July,
2013/6 th
  August,   2014,   much   after   publication   of   the   Final
Development   Plan   and   submits   that   there   was   no   error   in   the
process   which   was   adopted   by   the   Respondents   and   their
applications   being   in   conformity   with   the   policy   which   was   widely
circulated   by   the   State   authorities,   cancellation   of   their   grant   of
14

licence   by   the   High   Court   under   the   impugned   judgment   in   the
facts and circumstances is unsustainable in law.  
23.     Learned   senior   counsel   further   submits   that   the   judgment   in
Centre   for   Public   Litigation    (supra)  of  this  Court  relied  upon   by
the   High   Court   has   no   application   in   the   facts   of   the   instant   case
for the reason that the case relied upon was related to a case where
spectrum was recognised as a natural resource owned by the State
and it was held by  this Court that distribution of natural resource
has   to  be  in   a   fair   and  transparent   manner   and   it  is   possible   that
policy   of   First   Come   First   Serve   basis   may   likely   to   be   misused   in
case of alienation of public property.  But in the instance case, it is
a   land   of   the   owners/Appellants   which   they   seek   to   develop.     The
grant   of   licence   is   not   akin   to   distribution   of   natural   resources   of
the   State   and   further   submitsthat   in   the   given   circumstances   the
interference which has been made by the High Court in cancellation
of their grant of licence deserves to be set aside.   
24. Per   contra,   counsel   for   M/s   Mahamaya   Exports   Pvt.   Ltd.
supports   the   submissions   made   by   Mr.   Ranjit   Kumar,   Senior
Advocate.  
15

25.     Mr.   Anil   Grover,   learned   Senior   Additional   Advocate   General
appearing   for   the   State   submits   that   the   process   was   initiated   for
grant   of   licence   on   the   principle   of   First   Come   First   Serve   basis.
Learned   Sr.   A.A.G.   further   submits   that   after   the   public   notice
dated  1 st
 October, 2010 came to be published on 4 th
 October, 2010,
process   was   initiated   for   grant   of   licence   on   the   principle   of   First
Come   First   Serve   basis   and   this   is   the   practice   which   was   being
followed   for   quite   a   long   time   and   since   the   application   of
Respondent   nos.7   to   9   (original   writ   petitioners)   was   rejected   for
valid reasons and the Division Bench has not interfered in the order
of rejection  passed by  the  authority  and further  submits that  after
passing   of   the   judgment   impugned   in   the   instant   proceedings,   the
Government   in   supersession   of   its   earlier   policy   of   2006   has
introduced   the   self­contained   policy   of   2017   and   he   has
instructions   to   inform   that   all   pending   applications   or   fresh
applications are to be considered in terms of the policy of 2017.   
26. Learned   counsel   further   submits   that   so   far   as   allotment   of
licence   in   Sector   63­A   Gurgaon   is   concerned,   which   is   the   subject
matter  of challenge in  the  instant  proceedings, although  the policy
of   2017   has   now   come   into   force,   but   in   the   peculiar   facts   and
16

circumstances,   the   allotment   was   made   within   the   cap   of   20%   in
Sector 63­A for development of group housing society, as indicated
in   the   public   notice   dated   4 th
  October,   2010,   and   if   this   Court
considers appropriate, the application of Respondent nos.7 to 9 can
be considered under the same policy in vogue to give quietus to the
litigation. 
27. Learned   counsel   appearing   for   the   Respondent   nos.7   to   9
submits   that   after   the   impugned   judgment   passed   by   the   High
Court, the  State Government has accepted the verdict of the Court
and   has   come   out   with   its   policy   of   2017,   which   has   been   duly
notified   and   all   pending/fresh   applications   will   be   considered   for
grant  of  licence  in terms  of the  existing   policy   of 2017 and  further
submits   that   at   least   his   application   for   grant   of   licence   may   be
considered   as   a   special   case   under   the   old   policy   of   2006   in   the
interest of justice.
28.  Learned counsel for Respondent nos.7 to 9 further submits that
their application for grant of licence has been arbitrarily rejected by
the   State   authorities   and   the   factual   matrix   has   not   been
appreciated by the High Court and their application at least may be
17

revisited   in   terms   of   the   policy   in   vogue   for   the   grant   of   licence
earlier rejected by the State authority.  
29. We   have   heard   the   learned   counsel   for   the   parties   and   with
their assistance have perused the materials available on record.  
30.  The undisputed facts which have emerged from the record are
that   neither   in   the   public   notice   dated   1 st
  October,   2010   which
came   to   be   published   on   4 th
  October,   2010,   nor   in   the   Final
Development Plan dated 24 th
 May, 2011, nor in policy instructions
which came to be circulated by the Respondents at a later stage on
5 th
 July, 2012, regarding receipt and validity of the applications for
grant   of   licence,   of   which   a   detailed   reference   has   been   made,
nowhere prescribes that the method of allotment of licence shall be
made on First Come First Serve basis and from where this practice
had   been   borrowed/adopted   by   the   Respondent/State   authorities
is   alien   to   the   Scheme   of   the   1975   Act   or   the   1976   Rules   framed
thereunder,   nor   any   material   in   support   thereof   has   been   placed
on record. 
31.  Even  at the time of conclusion of submissions, we posed this
question to the counsel for the State of Haryana as to from where
this   principle   of   First   Come   First   Serve   basis   for   allotment   of
18

licence   has   been   borrowed   and   what   is   the   basis/foundation   to
hold   it   as   a   practice   in   inviting   applications   from   the   prospective
applicants   on   the   principle   of   First   Come   First   Serve   basis,   but
nothing   has   been   placed   on   record   despite   opportunity   being
afforded to substantiate and to support it further, we find that the
policy   of  the   State  Government   for   grant   of   licence   and  change  of
land   use   cases   dated   19 th
  December,   2006   which   was   made
effective retrospectively from 7 th
 February, 2005, is also completely
silent   and   there   is   no   material   on   record   that   after   the   policy   of
2006   came   to   be   introduced,   at   any   given   point   of   time   in   the
interregnum   the   process   was   ever   initiated   by   the   Respondent
nos.1 and 2 for grant of licence and change of land use before the
publication of public notice dated 4 th
 October, 2010.   
32.   This   Court   can   validly   proceed   on   the   basis   that   some
impression   has   been   thrown   to   examine   the   applications
submitted   by   the   interested   parties/applicants   pursuant   to   a
public   notice   dated   4 th
  October,   2010   for   grant   of   licence   and
change of land use on the principle of First Come First Serve basis,
but   it   is   neither   codified   nor   on   record   from   where   this   practice
has been developed and adopted by the Respondents in examining
the applications for grant of licence.   The entire Scheme placed on
19

record is completely   silent on  the subject issue which came to  be
examined by the High Court under the impugned judgment.  
33.           When   we   call   the   term   “established   practice”,   it   always
refers   to   a   regular,   consistent,   predictable   and   certain   conduct,
process or activity of the decision­making authority and being the
State   functionary,   its   character   is   supposed   to   be   based   on   the
requirement of higher degree of fairness in administrative action to
be tested on the anvil of Article 14 of the Constitution.   
34.       The   very   foundation   on   which   the   process   was   initiated,
inviting   applications   pursuant   to   the   public   notice   dated   4 th
October,  2010, on  the  principle  of First  Come  First Serve basis is
completely   silent/missing   from   records  and   how   that  becomes  an
established   practice   in   entertaining   applications   for   grant   of
allotment   of   licence   under   the   policy   of   the   State   Government
dated   19 th
  December,   2006,   pursuant   to   which   the   public   notice
came   to   be   published   on   4 th
  October,   2010   with   a   clarification
being made of the policy of the Government dated 5 th
 July, 2012 is
alien to the records and it was never made known to the public as
to   the   mechanism   the   Government   intended   to   adopt   for   grant   of
licence to the prospective applicants.  
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35.       Although this factor cannot be ruled out that those who are
interested   parties,   they   were   aware   of   this   so­called   alleged
practice of First Come First Serve adopted in the office of the State
Respondent   and   that   was   the   reason   for   which   even   before   the
public notice dated 1 st
  October, 2010 came to be published on 4 th
October,   2010,   people   start   running   for   submitting   their
applications   as   if   they   are   participating   in   the   mad   race,   without
being   known   to   the   people   at   large   about   the   policy   according   to
which   the   applications   are   invited   for   grant   of   licence   to   the
prospective   applicants   which   is   a   sine   qua   non   for   good
governance.   
36.     That   apart,   there   is   a   fundamental   flaw   in   the   policy   of   the
State   of   First   Come   First   Serve   basis   as   it   involves   an   element   of
pure   chance   or   accident   and   it   indeed   has   inherent   in­built
implications  and   this   factor   cannot   be  ruled   out   as  we  have  gone
through   the   record,   any   person   who   has   an   access   to   the   power
corridors   will   be   made   available   with   an   information   from   the
Government   records   and   before   there   could   be   a   public   notice
accessible to the people at large, the interested person may submit
his   application,   as   happened   in   the   instant   case,   and   become
entitled to stand first included in queue to have a better claim, at
21

the   same  time  it   is  the   solemn   duty   of   the  State   to  ensure  that   a
non­discriminatory   method   is   adopted,   whether   it   is   for
distribution  or  allotment  of   licence  on   his  own   land,  or   alienation
of   property   and   it   is   imperative   and   of   paramount   consideration
that every action of the State should always be in public interest.  
37.     In the matter of grant of licence even on its own land to set
up   a   group   housing   society,   the   policy   of   allotment   must   be   fair
and   transparent   and   as   there   is   a   cap   of   20%   for   group   housing
society   in   the   sector   area   and   if   the   demand   exceeds   more   than
available   density   of   20%   area   reserved   for   group   housing   in   the
sector   alike   Sector   63A,   Gurgaon   under   the   Final   Development
Plans as published in the instant case, the method of selection has
to be such so that all the eligible applicants get a fair opportunity
of   competition   and   it   is   the   bounden   duty   of   the   State   and   its
instrumentalities of their action to be conformed with Article 14 of
the   Constitution   of   which   non­arbitrariness   is   a   significant   facet.
A   public   authority   possesses   powers   only   to   use   them   for   public
good.     This imposes a solemn duty on the State to act impartially
and to adopt a procedure of allotment of licence which is fair play
in action.  
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38.  We find no difficulty in holding that in the first instance there
is no such consistent practice as alleged of First Come First Serve
basis   for   allotment   of   licence   available   under   the   entire   Scheme
placed on record and secondly, from where this principle has been
borrowed   is   alien   to   the   statute   and   also   the   policy   pursuant   to
which   the   process   was   initiated   for   allotment   of   licences   to   the
prospective applicants.      
39.       Curiously,   we   find   that   before   this   Court   counter   affidavits
came   to   be   filed   by   the   Respondent   State   though   its   Chief   Town
Planner,   Department   of   Town   and   Country   Planning,   Haryana,
Chandigarh   coming   out   with   the   justification   and   the   procedure
which has been followed based on the principle of First Come First
Serve   basis   while   granting   licence   to   the   Appellants   stating   inter
alia   that   if   there   are   more   than   one   application   of   the   same   day
and time, what will be the mechanism to be followed has also been
referred   to,   but   from   where   it   has   been   originated   and   about   its
factual   foundation   has   not   been   placed   on   record,   despite   the
directions   of   this   Court   at   the   time   of   conclusion   of   submissions
made.     The   extract   of   the   explanation   tendered   is   reproduced
hereunder :­
23

“A.   That   in   reply   to   sub   para   (A),   it   is   submitted   that   though   land
applied   for   licence   for   setting   up   of   a   Group   Housing   Colony   by   the
present petitioner and respondent no.1 to 3 was different, but as per
the   Final   Development   Plan   of   GMUC­2025   AD   published   vide
notification   dated   24.05.2011,   the  same   was  falling  within  the   same
sector   i.e.   Sector   63A,   Gurugram.   The   licence   was   granted   to   the
present   petitioner   on   the   basis   of   ‘first   come   First   Serve’   basis.
However, licence application of respondent no.1 to 3 was rejected by
respondent   no.5   vide   order   dated   16.09.2011   mainly   on   the   ground
that   some   land   applied   for   licence   was   not   partitioned   and   that   the
land has not been mutated in favour of the applicant. Another ground
for   rejection   was   that   the   same   was   falling   beyond   the   limits   of   the
Development Plan of Gurugram Manesar Urban Complex­2021 AD.
B. That in reply to sub para (B), it is submitted that the interim order
dated  21.12.2013  passed by  the  Hon’ble High Court  was only  to the
extent that the area measuring 13.61875 acres for which respondent
no.1   to   3   had   applied   for   grant   of   licence   for   setting   up   of   a   Group
Housing   Colony   will   be   reserved   till   the   final   conclusion   of   the   legal
proceedings.   However,   the   licence   of   private   respondents   in   CWP
No.21942   of   2013   was   cancelled   by   the   Hon’ble   High   Court   vide
impugned   order   by   observing   that   the   doctrine   of   ‘first   come   First
Serve’ basis was not fair and transparent.
H.   That   in   reply   to   the   averments   made   in   sub   para   (H),   it   is
submitted   that   in   the   policy   dated   19.12.2006,   it   was   specifically
mentioned   that   the   area   under   Group   Housing   should   not   exceed
20% of the sector area. Though, it is not specifically stated in the said
policy   that   the   applications   would   be   considered   on  ‘first   come   First
Serve’, but the applications were considered on the basis of policy of
‘first come First Serve’ basis. The seniority of the applicants for grant
of   licence   for   Group   Housing   Colony/Commercial   Colony  etc.   (where
there is cap for grant of licence) was fixed from the date of receipt of
application. If the date of receipt was the same, then from the receipt
number of the same date. Hence, it cannot be said that the time and
date   when   the   application   for   grant   of   licence   was   filed   was   not
relevant.   However,   if   the   applicant   whose   application   for   grant   of
licence  was  received  earlier,  but  was not   eligible  for   grant  of  licence,
the   application   received   after   the   date   of   the   receipt   of   the   earlier
application was considered for grant of licence. Hence, the averments
made by the petitioner in this sub para cannot be accepted as such.”
40.  In our considered view, the principle of First Come First Serve
basis   which   has   been   adopted   by   the   State   Respondents   in   the
24

facts of the instant case is neither held to be rational nor in public
interest and is in violation of Article 14 of the Constitution of India.
41.   The submission made by counsel for the Appellant that their
grant of licence was not the subject matter of challenge in the writ
petition   before   the   High   Court   is   of   no   substance   for   the   reason
that   firstly   they   were   impleaded   as   party   respondents   and   the
subject issue under consideration was much known to them as to
whether   the   so­called   alleged   practice   of   First   Come   First   Serve
basis which has been adopted by the State authorities for grant of
licence,   how   far   it   was   rational   and   is   in   conformity   with   the
Scheme of the statute and secondly, the High Court after framing
substantive   question   under   its   order   dated   13 th
  August,   2015
afforded   opportunity   of   hearing   to   the   Appellants   who   have   filed
their  counter­affidavits  and thereafter  has  arrived to  a conclusion
that the principle of First Come First Serve basis adopted in grant
of   licences   is   not   a   valid   consideration,   the   only   consequence
available   was   to   cancel   such   licence   which   have   been   granted
based   on   the   so­called   alleged   practice   which   is   unsustainable   in
law and in our considered view no error was committed in passing
the order of cancellation of grant of licence to the Appellants under
the judgment impugned.  
25

42.   A further submission made by counsel for the Appellant that
it   is   a   consistent   practice   which   was   followed   throughout   and
almost 248 licences had been granted under the policy in vogue at
that time, in our considered view does not hold good for the reason
that   those   who   are   not   party   to   the   proceedings   before   the   High
Court   obviously   no   adverse   action   could   have   been   taken   against
them   pursuant   to   the   view   expressed   by   the   High   Court   in   the
impugned   judgment,   at   the   same   time   the  principle   may   apply   to
the   present   Appellants   who   are   indeed   parties   to   the   proceedings
and   have   contested   their   claim   and   have   been   non­suited   after   a
fair opportunity of hearing being afforded, may not be in a position
to defend their grant of licence on the principle of First Come First
Serve   basis   which   has   been   held   to   be   unfair   and   in   violation   of
Article 14 of the Constitution.  
43.       With   regard   to  the  further   submission  made  by   the   counsel
for    Respondent  nos.7 to 9 about  rejection of  their  application for
grant   of   licence,   suffice   it   to   say   that   once   this  Court   has  upheld
the   view   expressed   by   the   High   Court   regarding   the   procedure   of
allotment   of   licence   based   on   the   principle   of   First   Come   First
Serve basis, as held against the Public Policy, at least Respondent
26

nos.7 to 9 would not be in a position to plead for consideration of
their applications for grant of licence under the impugned policy. 
44.     We   make   it   clear   that   once   the   policy   of   2017   has   been
introduced   by   the   State   Respondents,   it   is   open   to   consider   all
pending applications and the application of the present Appellants
for   grant   of   licence   under   the   policy   of   2017   in   accordance   with
law.
45.   Consequently, we find no substance in the appeals which are
accordingly dismissed.
46.    All pending applications, if any, stand disposed of.
…………………………J.
(Ajay Rastogi)
…………………………J.
(Abhay S. Oka)
New Delhi
October 27, 2021.
27