CRPL Infra Private Limited & Anr. v. Ministry of Food Processing Industries

16. The Technical Committee has evaluated the Petitioner and the Petitioner has scored 88 points out of 100. The case of the Petitioner was put up before the Inter-Ministerial Approval Committee and the said Committee referred the proposal of the Petitioner for re-evaluation on the ground that substantial amount has been incurred by the Petitioner prior to the Petitioner’s applying under the Scheme and the case of the Petitioner was one of expansion. The Technical Committee once again evaluated the case of the Petitioner. The Petitioner scored 84 points out of 100, which is more than the minimum threshold of 60 points. However, the Technical Committee was of the opinion that the Petitioner is ineligible for the Scheme as it has incurred about half of the project cost prior to its application under the scheme. The Inter-Ministerial Approval Committee accepted the recommendation of the Technical Committee that the Petitioner is not eligible for the Scheme.

17. The law of legitimate expectation has been crystallized by the Apex Court in several judgments. It has been held that for a legitimate expectation to arise, the decision of the authority must affect such person by (a) altering rights or obligations of that person which are enforceable by or against him in private law, or (b) depriving him of some benefit or advantage which he has conferred upon him in the past by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until some rational ground for withdrawing the benefit has been communicated to him and he has been given an opportunity to comment thereon, or he has received assurance from the decision-maker that the benefit will not be withdrawn without giving him an opportunity of advancing reasons for contending that they should not be withdrawn. The Apex Court in Sethi Auto Service Station v. DDA, (2009) 1 SCC 180, has explained the concept of legitimate expectation as under:

27. Explaining the nature and scope of the doctrine of legitimate expectation, in Food Corporation of India v. Kamdhenu Cattle Feed Industries [(1993) 1 SCC 71], a three-Judge Bench of this Court had observed thus: (SCC p. 76, para 8)

28. The concept of legitimate expectation again came up for consideration in Union of India v. Hindustan Development Corpn. [(1993) 3 SCC 499] Referring to a large number of foreign and Indian decisions, including in Council of Civil Service Unions [1985 AC 374: (1984) 3 WLR 1174: (1984) 3 All ER 935 (HL)] and Kamdhenu Cattle Feed Industries [(1993) 1 SCC 71] and elaborately explaining the concept of legitimate expectation, it was observed as under: (Hindustan Development Corpn. case [(1993) 3 SCC 499], SCC p. 549, para 35)

29. Then again in National Buildings Construction Corpn. v. S. Raghunathan [(1998) 7 SCC 66: 1998 SCC (L&S) 1770], a three-Judge Bench of this Court observed as under: (SCC p. 75, para 18)

30. This Court in Punjab Communications Ltd. v. Union of India [(1999) 4 SCC 727], referring to a large number of authorities on the question, observed that a change in policy can defeat a substantive legitimate expectation if it can be justified on “Wednesbury” reasonableness. The decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy. Therefore, the choice of the policy is for the decision-maker and not for the court. The legitimate substantive expectation merely permits the court to find out if the change in policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. (Also see Bannari Amman Sugars Ltd. v. CTO [(2005) 1 SCC 625].)

31. Very recently in Jitendra Kumar v. State of Haryana [(2008) 2 SCC 161: (2008) 1 SCC (L&S) 428] it has been reiterated that a legitimate expectation is not the same thing as an anticipation. It is distinct and different from a desire and hope. It is based on a right. It is grounded in the rule of law as requiring regularity, predictability and certainty in the Government's dealings with the public and the doctrine of legitimate expectation operates both in procedural and substantive matters.

32. An examination of the aforenoted few decisions shows that the golden thread running through all these decisions is that a case for applicability of the doctrine of legitimate expectation, now accepted in the subjective sense as part of our legal jurisprudence, arises when an administrative body by reason of a representation or by past practice or conduct aroused an expectation which it would be within its powers to fulfil unless some overriding public interest comes in the way. However, a person who bases his claim on the doctrine of legitimate expectation, in the first instance, has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment. The Court could interfere only if the decision taken by the authority was found to be arbitrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and not taken in public interest. But a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles.

33. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. The court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. Therefore, a legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited. (Vide Hindustan Development Corpn. [(1993) 3 SCC 499] )” (emphasis supplied)

18. Applying the said principles to the facts of the present case, the case of the Petitioner that it had a legitimate expectation of being granted the benefit cannot be accepted because of the stipulation in the guidelines that the expenditure incurred before the submission of the expression of interest will not be considered. Further, the project was nearing completion at the time when the Technical Committee examined the case of the Petitioner. As stated earlier, no right had been created upon the submission of the expression of interest and the Petitioner, therefore, could not as a matter of right demand that the Technical Committee must accept the case of the Petitioner. Admittedly, the Petitioner has spent substantial amount of money even before giving its expression of interest which is contrary to the Guidelines.

19. The fact that the Petitioner has already spent money would not create any right on the Petitioner to claim that amount from the State. It is also well settled that High Courts while exercising its jurisdiction under Article 226 of the Constitution of India do not interfere with the decisions of various authorities but only adjudicate on the decision making process. The Petitioner has been given an opportunity to present its case before the Technical Committee and the IMAC. The Petitioner has put forward his case and a decision has been passed. It cannot be said that the decision arrived at by the Government is so perverse that it requires interference by this Court.

20. Interference of High Courts in administrative decisions has been well crystallized by the Apex Court in a number of Judgments. In Tata Cellular v. Union of India, (1994) 6 SCC 651, the Apex Court has held as under:

73. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action.

74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself.

75. In Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141, 154] Lord Brightman said: “Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made. *** Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power.” In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms: “This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160).” In R. v. Panel on Take-overs and Mergers, ex p Datafin plc [(1987) 1 All ER 564], Sir John Donaldson, M.R. commented: “An application for judicial review is not an appeal.” In Lonrho plc v. Secretary of State for Trade and Industry [(1989) 2 All ER 609], Lord Keith said: “Judicial review is a protection and not a weapon.” It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin, Re [Amin v. Entry Clearance Officer, (1983) 2 All ER 864], Lord Fraser observed that: “Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made…. Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer.”

76. In R. v. Panel on Take-overs and Mergers, ex p in Guinness plc [(1990) 1 QB 146: (1989) 1 All ER 509], Lord Donaldson, M.R. referred to the judicial review jurisdiction as being supervisory or „longstop‟ jurisdiction. Unless that restriction on the power of the court is observed, the court will, under the guise of preventing the abuse of power, be itself guilty of usurping power.

77. The duty of the court is to confine itself to the question of legality. Its concern should be:

1. Whether a decision-making authority exceeded its powers?

2. Committed an error of law,

3. committed a breach of the rules of natural justice,

4. reached a decision which no reasonable tribunal would have reached or,

5. abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:

(i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.

(ii) Irrationality, namely, Wednesbury unreasonableness.

(iii) Procedural impropriety.

The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696], Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, “consider whether something has gone wrong of a nature and degree which requires its intervention”.”

21. At this Juncture, it is apposite to extract Clauses 9(viii) and 11.3(ii) of the Guidelines. The same reads as under: “9(viii) Mere submission of application with required documents against the EOI does not confer any right on the applicant for claim of grant in aid under the scheme. The grant in aid will be sanctioned based on merit, preference criteria and evaluation of the proposal as per the assessment criteria laid down in the guidelines of the scheme. Grant will be released subject to availability of funds under scheme to the approved projects as per merit order and preference as laid down herein. xxx 11.3(ii) The decision of the Ministry in all matters relating to eligibility, acceptance or rejection of the applications, mode of selection, grant approved and imposition of penalty shall be final and binding on the applicant.”

22. A perusal of the above Guidelines shows that mere filing of an application does not create any right in favour of the Petitioner. As rightly pointed out by the learned Counsel for the Respondent. Clause 11.1(B) of the Guidelines categorically states that the expenditure incurred prior to the expression of interest cannot be covered and expenditure incurred between the date of the expression of interest till the approval of grant in aid shall be considered. The finding of the Technical Committee that, the Petitioner is not eligible for grant under the scheme as the Petitioner has incurred about 12 crores prior to the date of submission of application i.e., half of the project cost, and expenditure of about 17 crores till the date of the meeting of the Technical Committee, and that application was made when the project was nearing completion, and therefore, the Petitioner is not eligible to get the benefit of the Scheme does not require any interference. The findings of the Technical Committee were based on the appraisal of the expert body as well as the presentation and submission made by the Petitioner. This Court is of the opinion that the decision making process is neither irrational nor unreasonable warranting interference under Article 226 of the Constitution of India.

23. In view of the above, this Court does not find any reason to interfere with the decision taken by the Technical Committee of the Respondent.

24. Accordingly, the Writ Petition is dismissed. Pending applications, if any, also stand dismissed.

SUBRAMONIUM PRASAD, J FEBRUARY 06, 2024