Registrant of a scheme has no right to insist allotment under that particular scheme after its closure, holds Supreme Court

The Supreme Court on Thursday held that an applicant or registrant of a scheme has no right to insist that they should be provided allotment under a scheme.

"Much depends on the terms of the scheme...", added a three-judge bench.

The Court further opined that in absence of any ambiguity- in the law, and the scheme, an applicant could not have insisted that after the closure of the old scheme (which went unchallenged by it), nevertheless, it had a right to allotment. 

In the case before Supreme Court, Noida, published a scheme in 2010 (“the old scheme”) for allotment of industrial plots larger than 2000 sq. meters,. Under the terms of the scheme as spelt out by the brochure, apart from individuals, partnership firms were also eligible to apply for allotment. 

M/S Promotional Club applied to the Noida Authority for two plots. Apparently, Noida decided to terminate the scheme, based upon its assessment of the feasibility of the scheme. 

The club approached the Allahabad High Court by filing the writ petition. During the pendency of writ petition before the High Court, Noida, launched another scheme (“the 2013 Scheme”)  and the club applied under this scheme as well.

This matured into an allotment when Noida allotted a plot of 4000 sq. mtr and thus subsequent allotment of a plot under the later scheme was however, not disclosed to the High Court, before which the complaint of arbitrary non-allotment under the old scheme was pending.

High Court was of the opinion that Noida’s failure to call the club’s representative for interview, was not supported by any reason and that its candidature was never considered for allotment. Noida was directed to consider the petitioner’s two applications under the scheme.

Noida' s review petition came to be by the High Court. The club complained of non-compliance with the original judgment and initiated contempt proceedings.

A bench of Justices UU Lalit, S Ravindra Bhat and PS Narasimha noted that in the writ proceeding, the club did not challenge the closure of the scheme; rather its case was that Noida’s omission to consider its application for allotment was arbitrary.

"Once the club accepted the closure of the scheme and did not challenge it, there was no question of its agitating any right or grievance regarding non-consideration of its application...", said the Court.

It is well established that when a policy decision like the closure or termination of a benefit available to a class of persons, is not challenged, the consequence of such closure (which is the impact on the pendency of those wishing to be considered) cannot ordinarily be subject matter of a grievance. What the club had was a right to be considered for allotment of the plots its applied for, so long as the old scheme subsisted, further held the three-judge bench.

Furthermore, High Court's direction that the club’s applications should be considered “in accordance with law” were complied with, but in contempt proceedings, the High Court was held to have wrongly taken exception to this course of action, in an entirely unnecessary and unwarranted manner.

"...once the legality of closure of the old scheme was undisputed, there was no manner of right inhering with the club, to insist that its claim for any plot had to be considered. If at all, it ought to have applied under subsequent schemes, and waited like other applicants (of that scheme), Noida’s interpretation of the High Court’s judgment (to consider) in this context, was quite correct", held the bench.

The interpretation placed by the High Court, that there were existing plots, which could have been dealt with under the old scheme was held to be entirely misplaced thus resulting in allowing the appeals filed by Noida.

Case Title: RITU MAHESHWARI  vs M/S. PROMOTIONAL CLUB