# M.I. BUILDERS PVT. LTD v. RADHEY SHAY AM SAHU AND OTHERS - **Citation:** [1999] 3 S.C.R. 1066 - **Court:** Supreme Court of India - **Decided:** 1999-07-26 - **Case number:** Civil Appeal Nos. 93239325 of 1994 - **Bench:** S.B. Majmudar, D.P. Wadhwa - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-i-builders-pvt-ltd-v-radhey-shay-am-sahu-and-others-17163 - **Pages:** 80 ## Headnote Constitution of India : Articles 14,21,49,5/-A, 298, 299, 226 and 136-Park of historical C importance-Maintained by Corporation-Corporation entering into an . agreement with a builder for the construction of underground shopping complex in the guise of decongesting the area without inviting tendersTerms of agreement totally one side in favour of builder and also contrary to statutory provisions passed by State Legislature-Allegations of personal gain against the authorities of Corporation-Corporation divested of its D control over the park after the agreement-Held, such action of Corporation is unreasonable, arbitrary, unfair and opposed to public policy, public interest and public trust doctrine and is an example of bad governance-Therefore, judicial revielf called for-Any illegal or unauthorised construction done by the builder must be demolished irrespective of amount of expenditure incurred ~ E by it-Municipalities-UP. Municipal Corporation Act, 1959-U.P. Reglflation of Buildings Operations Act, 1958-U.P. Urban Planning and Development Act, 1973-U.P. Parks, Playgrounds and Open Spaces (Preservation and Regulation) Act, 1975. Article 136-Relief-illegal and unauthorised construction-Court F should order demolition of such construction irrespective of any amount invested by the builder-Exercise of judicial discretion in moulding the relief not called for in such cases of illegal and unauthorised construction as the same would encourage and perpetuate the illegality-Direction issued to hold an enquiry as to how unauthorised construction came about and to G book the offenders-Public Accountability-Town Planning-Municipalities. Articles-226, 32, I 36-Judicial review-Action of State or its instrumentality-Illegal and in contravention of prescribed procedure apart from being unreasonable, irrational or mala fides-He/d, such action is open to judicial review-Further held, that bad governance sets bad exampleH Administrative Law. 1066 ' ' M.I. BUILDERS PVT. LTD. v. R.S. SAHU 1067 U.P. Municipal Corporation Act, 1959: A Section 114-0bligatory duty of the Corporation to maintain ParksCorporation allowing a builder to construct an underground shopping .. · complex over an existing park of historical importance-Held, section 114 violated-However, underground construction can be converted into a parking place as it was also an obligatory duty of the Corporation-But, B such parking place be constructed after taking into consideration all relevant factors such as locality and its population etc.-Town Planning-UP. Parks, Playground and Open Spaces (Preservation and Regulation)· Act, 197 5. Sections 91, 105 and 119-Meetings of so called High Power Committee of the Corporation-No authority to the Corporation to constitute such a C Committee and to delegate its function to the Committee-Notice issued for meeting of such Committee-Agenda included "other subjects, subject to the permission of the Presiding Officer"- Under this topic of the agenda, Corporation allowed a builder to construct an underground shopping complex on an existing park of historical importance-Decision of this Committee D was approved by Executive Committee and general body-Held, constitution of High Power Committee and delegation of function was wholly illegal and . ) violative of mandatory provisions of Section 91 and 119 and was not mere irregularity so as to be protected under Section 105-Further, such an important project could not have been discussed under the topic "other subjects" of the agenda-Municipalities-Town Planning. E Section 136(2)-Requirement to obtain sanction of State Government where any project approved by the Corporation exceeded Rs. ten lakhsHeld, Section 136 (2) attracted not only where the cost of the project was to be incurred by the Corporation but otherwise also. Sections 131,132,133 and 136-Land of prime value was handed over to a builder in violation of public trust doctrine and master plan of the city F for the construction of an underground ## Text _Characters 0–39,943 of 194,607. This is a partial read: ask again with offset=39943 for what follows._ A M.I. BUILDERS PVT. LTD. v. RADHEY SHAY AM SAHU AND OTHERS JULY 26, 1999 B [S.B. MAJMUDAR AND D.P. WADHWA, JJ.] Constitution of India : Articles 14,21,49,5/-A, 298, 299, 226 and 136-Park of historical C importance-Maintained by Corporation-Corporation entering into an . agreement with a builder for the construction of underground shopping complex in the guise of decongesting the area without inviting tendersTerms of agreement totally one side in favour of builder and also contrary to statutory provisions passed by State Legislature-Allegations of personal gain against the authorities of Corporation-Corporation divested of its D control over the park after the agreement-Held, such action of Corporation is unreasonable, arbitrary, unfair and opposed to public policy, public interest and public trust doctrine and is an example of bad governance-Therefore, judicial revielf called for-Any illegal or unauthorised construction done by the builder must be demolished irrespective of amount of expenditure incurred ~ E by it-Municipalities-UP. Municipal Corporation Act, 1959-U.P. Reglflation of Buildings Operations Act, 1958-U.P. Urban Planning and Development Act, 1973-U.P. Parks, Playgrounds and Open Spaces (Preservation and Regulation) Act, 1975. Article 136-Relief-illegal and unauthorised construction-Court F should order demolition of such construction irrespective of any amount invested by the builder-Exercise of judicial discretion in moulding the relief not called for in such cases of illegal and unauthorised construction as the same would encourage and perpetuate the illegality-Direction issued to hold an enquiry as to how unauthorised construction came about and to G book the offenders-Public Accountability-Town Planning-Municipalities. Articles-226, 32, I 36-Judicial review-Action of State or its instrumentality-Illegal and in contravention of prescribed procedure apart from being unreasonable, irrational or mala fides-He/d, such action is open to judicial review-Further held, that bad governance sets bad exampleH Administrative Law. 1066 ' ' M.I. BUILDERS PVT. LTD. v. R.S. SAHU 1067 U.P. Municipal Corporation Act, 1959: A Section 114-0bligatory duty of the Corporation to maintain ParksCorporation allowing a builder to construct an underground shopping .. · complex over an existing park of historical importance-Held, section 114 violated-However, underground construction can be converted into a parking place as it was also an obligatory duty of the Corporation-But, B such parking place be constructed after taking into consideration all relevant factors such as locality and its population etc.-Town Planning-UP. Parks, Playground and Open Spaces (Preservation and Regulation)· Act, 197 5. Sections 91, 105 and 119-Meetings of so called High Power Committee of the Corporation-No authority to the Corporation to constitute such a C Committee and to delegate its function to the Committee-Notice issued for meeting of such Committee-Agenda included "other subjects, subject to the permission of the Presiding Officer"- Under this topic of the agenda, Corporation allowed a builder to construct an underground shopping complex on an existing park of historical importance-Decision of this Committee D was approved by Executive Committee and general body-Held, constitution of High Power Committee and delegation of function was wholly illegal and . ) violative of mandatory provisions of Section 91 and 119 and was not mere irregularity so as to be protected under Section 105-Further, such an important project could not have been discussed under the topic "other subjects" of the agenda-Municipalities-Town Planning. E Section 136(2)-Requirement to obtain sanction of State Government where any project approved by the Corporation exceeded Rs. ten lakhsHeld, Section 136 (2) attracted not only where the cost of the project was to be incurred by the Corporation but otherwise also. Sections 131,132,133 and 136-Land of prime value was handed over to a builder in violation of public trust doctrine and master plan of the city F for the construction of an underground shopping complex iover an existing park by way of an agreement-Terms of agreement were such that a man of 1 ordinary prudence would not have such one sided terms in favour of the G builder-Terms also contrary to various statutory provisions-Held, agreement was illegal, unreasonable, atrocious, irrational and arbitrary-Constitution of India, Article 14-Administrative Law-Judicial Review. Section 128 and 129-Corporation granted licence to a builder to construct an underground f hopping complex and to hold on the same for an H 1068 SUPREME COURT REPORTS [1999) 3 S.C.R. A indefinite period-Under the terms of the agreement, builder authorised to lease out the shops on behalf of the Corporation-Held, such terms would attract the expression "otherwise dispose of any interest in the property" in Section 128 and hence contravenes Sections 128 and 129. U.P. Parks, Playground and Open Spaces (Preservation and Regulation) B Act, 1975-Corporation allowing a builder to construct an underground shopping complex on an existing park of historical importance-Under the Act, it was the duty of the Corporation to maintain the park-Held, true nature of the paFk destroyed and consequently the public trust doctrine as expounded in Span Resorts case violated-Doctrine of Span resort case is C a part of Indian Law and has developed from Article 2 I-Corporation was a trustee for the proper maintenance of park-Public Trust doctrineEco/ogy-Constitution of India-Article 2 I-Municipalities-Town Planning-Park. U.P. Urban Planning and Development Act, 1973--Sections 14 and D 3(e)-Construction of underground shopping complex in a park-Sanction of the building plan not obtained by the Development Authority constituted under the Act-Held, construction illegal-Town Planning. Easements Act, 1882--Sections 60(b) and 62(/)-Licene-Revocability of-Licence granted by. the Corporation to a builder for the construction of E an underground shopping complex in a park-Construction is a work of permanent nature constructed after having been incurred expenses-Held, Such licence would be irrevocable under Section 60(b)-But licence was deemed to be revoked under Section 62(/) when as per agreement, licensee would recover his full costs plus the agreed percentage of profit on the F investment made by him. Evidence Act, ·1872-,-Section 115-There is no estoppel against a statute. Practice and Procedure-Corporation being a continuing body will be G estopped from changing its stand-But when the Corporation finds that its action was contrary to statute, there could be no impediments in its way to change its stand-Estoppel. Interpretation of Statute-Subsidiary rules-Mandatory or directoryStatute specifically provided that a body corporate has to act in a particular H manner as specified in the statute and in no other way-Held, this provision ' M.l. BUILDERS PVT. LTD. v. R.S. SAHU 1069 is mandatory and has to be strictly complied with. Administrative Law-Authority created under the Act-Jurisdiction ofCorporation allowed construction of an underground shopping complex on A an existing park contrary to various statutory provisions by way of an agreement with a builder-Builder to act an agent-However, concept of agency totally missing-Rather the agreement was from principal to B principal-Terms of the agreement totally one sided in favour of the builderTerms of agreement defied logic, was outrageous and crossed all limits of rationality-Held, the Corporation has acted in a fatuous manner in entering into such an agreement. An agreement to construct an underground-shopping complex in a C park located in a commercial-cum-residential area of Lucknow, was entered into between the appellant/builder and the Lucknow Mahapalika (Corporation) on the pretext of decongesting the area. This agreement was entered into without inviting any bid and without obtaining any project report. Not only that, the procedure adopted by the Corporation was contrary to statutory D provisions and the terms of the agreement was totally one sided in favour of the builder. Decision to award the contract was also prejudicial to public purpose in so far as the maintenance of park was of historical importance from environmental point of view. Respondents challenged the award of the contract to construct underground shopping complex in favour of appellant/ builder by way of a writ petition before the High Court and the same was E allowed. In appeal, a Division Bench of the High Court confirmed the order passed by the Single Judge. Hence this appeal. It was contended by the builder/appellant that there was no disposal of the property by Corporation in favour of the builder and therefore, provisions F of Section 128 of the U.P. Municipal Corporation Adhiniyam, 1959 (the · "Act"); that there was no arbitrariness or unreasonableness vitiating the agreement between Corporation builder in view of the finding of the High Court that there was no lack of bonafides and that it was not disputed that the builder was not competent to execute; and that High Court exceeded its jurisdiction as it did not apply correct parameters of its power of judicial G review as laid down by Tata Cellular 's case. It was contended by the respondent that in view of historical importance and of environmental necessity, construction of shopping complex would be • in breach of Articles 21,49 and 51-A(g) of the Constitution; that the contract was in violation of various statutory provisions contained in U.P. Regulation H 1070 SUPREME COURT REPORTS (1999] 3 S.C.R A of Buildings Operations Act, U.P. Urban Planning and Development Ac~ U.P. Parks, Playgrounds and Open Spaces (Preservation and Regulation) ~ct; that no tender was invited by the Corporation; that the agreement sma~ked of arbitrariness, was unfair and gave undue favour to the builder and this was done with ma/a fide motives of personal gain by the authorities of the B Corporation ; and that the action of the Corporation was against public interest. Dismissing the appeal, this Court HELD. 1.1. There are two distinct areas of challenge in the present case-(1) the agreement between Nagar Mahapalika and the appellant builder C is a fraud on power and prime land has been given for a song by the Mahapalika. The fact that the scheme was so lucrative could be seen from the fact that all the shops less 5% wer.e booked within six days of the advertisement appearing in December 1993. Public interest and the public exchequer have been sacrificed. The Mahapalika is divested of its control D over the project though notionally not forever but the builder, on the other hand, has control_ over the project for all time to come and (2) construction is in contravention of the provisions oflaw as contained in the U.P. Urban Planning and Development Act. The project has been entrusted to the builder in violation of the provisions of Act. The decision taken by the Mahapalika was not on proper consideration and was not an informed objective decision. E Judicial review is permissible if the impugned action is against law or in violation of the prescribed procedure or is unreasonable, irrational or mala fide. The High Court rightly exercised its power of judicial review in the present case. It has examined the manner in which Mahapalika took the decision. The second principle laid down in Tata Cellular case applies in all F respect. The High Court held that the maintenance of the park because of its Jtistorical importance and environmental necessity was in itself a public purpose and, therefore, the construction of an underground market in the garb of decongesting the area was wholly contrary and prejudicial to the public purpose. By allowing the construction the Mahapalika has deprived ·its residents and also others of the quality of life to which they were entitled G under the Constitution. The agreement smacks of arbitrariness unfairness and favouritism. The agreement was opposed to public policy. It was not in public interest. The whole process of law subverted to benefit the builder. The Mahapalika and its officers forgot their duty towards the citizens and acted ' in a most brazen manner. [1140-F-H;~141-A-C] H Tata Cellular v. Union of India, [1994] 6 SCC 651, followed.[1140-C] M.I. BUILDERS PVT.LTD. v. R.S. SAHU 1071 1.2. The competence of the Appellant to undertake the proj. is not A doubted when it is seen that proper construction has been made but before taking the decision to award the contract to it nobody knew its credentials • . Public interest has certainly been given a go-by. There was some undercurrent flowing to award the contract to . the appellant. In these circumstances, the dictum contained in Kasturi Lal Lakshmi Reddy becomes inapplicable. No advantage can be drawn by the builder from the decision of B G.B. Mahajan case as here the whole process of awarding contract to the appellant has been gone through in an unabashed manner and in fragrant violation of law with the sole purpose of conferring benefit on it.[1141-F-Hl Kasturi Lal Lakshmi Reddy v. State of J & K, (1980)4 SCC 1 and G.B. C Mahajan v. Jalgaon Municipal Council, [1991)3 SCC 91, distinguished. 1.3. No consideration should be shown to the builder or any other person where construction is unauthorised. This dictum is now almost bordering the rule of law. Stress was laid by the appellant and the prospective allottees of the shops to exercise judicial discretion in moulding the relief. D Such discretion cannot be exercised which encourages illegality or perpetuates an illegality. Unauthorised construction, ifit is illegal and cannot be compounded, has to be demolished. There is no way out. Judicial discretion cannot be guided by expediency. Courts are not free from statutory fetters. Justice is to be rendered in accordance with law. Judges are not entitled to E exercise discretion wearing the robes of judicial discretion and pass orders based solely on their personal predilections and peculiar dispositions. Judicial discretion wherever it is required to be exercised has to be in accordance with law and set legal principles. [1142-C-E) 2.1. In this case the builder got an interim order from this court and F on the strength of that order got sanction of the plan from the Mahapalika and no objection from LDA. It has no doubt invested considerable amount on the construction which is 80% complete and by any standard is a first class construction. Why should the builder take such a risk when the interim order was specific that the builder will make construction at its own risk G and will not claim any equity if the decision in the appeal goes against it? The builder is not an innocent player in this murky deal when it was able to get the resolutions of the Mahapalika in its favour and the impugned agreement executed. Now construction of shops will bring in more congestion and with that the area will get more polluted. Any commercial activity now in this unauthorised construction will put additional burden on the locality. H 1072 SUPREME C.OURT REPORTS [1999] 3 S.C.R. A The primaR' concern of the Court is to eliminate the negative impact the underground shopping complex will have on the environmental conditions in the area and the congestion that will aggravate on account of increased traffic and people visiting the complex. There is no alternative to this dismantle the whole structure and restore the park to its original condition leaving a B portion constructed for parking as required under· clause (ix-a) of Section 114 of the U.P. Municipal Corporation Act, 1959. [1142-F-H; 1143-A-C) 2.2. While directing demolition of unauthorised construction, Court should also direct an enquiry as to how the unauthorised construction came about and to bring the offenders to book. It is not enough to direct demolition C of unauthorised construction, where there is clear defiance of law. In the present case, but for the observation of the High Court, this Court would certainly have directed an enquiry to be made as to how the project was conceived and how the agreement came to be executed. [1144-D) Ramana Dayaram Shetty v. International Airport Authority of India, D (1979)3 SCC 489; Deputy Commissioner of Sales Tax v. Thomas Stephen & Co. Ltd., (1988)2 SCC 264; MC. Mehta v. Kamal Nath, [1997)1 SCC 388; Sachidanand Pandey v. State of West Bengal; [1987)2 SCC 295; Rashbihari Panda v. State of Orissa [1969)1 SCC 414; State of Haryana v. Jage Ram, [1983)4 SCC 556; Ram & Shyam Co. v. State of Hryana, [1985)3 SCC 267; Chenchu Rami Reddy v. State of Andhra Pradesh, [1986)3 SCC 391; Seth E Badri Prasad v. Seth Nagarmal, [1959) Supp. lSCR 769; K. Ramdas Shenov v. The Chief Officers, Town Municipal Council, [1975)1 SCR 680 at 685; Virendra Gaur v. State of Haryana, [1995)2 SCC 577; Pleasant Stay Hotel v. Palani Hills Conservation Council, [1995)6 SCC 127; Cantonment Board, Jabalpur v. S.N. Awasthi, [1995) Supp 4 SCC 595; Pratibha Cooperative F Housing Society Ltd. v. Stqte of Maharashtra, [1991)3 SCC 341; Dr. G.N.Khajuria v. Delhi Dzye/opment Authority, [1995)5 SCC 762; Manju Bhatia v. New Delhi Municipal Council, JT (1997)5 SC 574 and Ram Avatar Agarwal v. Corporation of Calcutta, (Civil Appeal No. 6416of1981 decided by Supreme Court on August 20.1996), referred to. G Short v. Poole Corporation, (1926) Ch 66, referred to. 3. By allowing underground construction the Mahapalika has deprived itself of its obligatory duties to maintain the park as required under Section 114 of the U.P. Municipal Corporation Act. But then one of he obligatory functions of the Mahapalika under Section 114 is also to construct and H maintain ·parking lots. To that extent some area of the park could be used - - ·- M.I. BUILDERS PVT.LTD. v. R.S. SAHU 1073 , for the purpose of constructing an underground parking lots. But that can A only be done after proper study has been made of the locality, including density of the population living in the area, the floating population and other certain relevant considerations. This study was never done. [1128-C-D] 4.1. The Mahapalika is the trustee for the proper management of the park. When the true nature of the park, as it existed, is destroyed it would B be violative of the doctrine of public trust as expounded by this Court in Span Resort case. Public trust doctrine is part of Indian law. This public trust doctrine in our country has grown from Article 21 of the Constitution. [1128-D-E; 1129-D] MC. Mehta v. Kamal Nath, (Span Resort case), [1997)1 SCC 388, C followed Illinois Central Railroad Co. v. Illinois, 146 US387 (1892), referred to. Environmental Law and Policy; Nature, Law and Society by Plater D Abrams Goldfarb (American Casebook Series, 1992) under the Chapter on Fundamental Environmental Rights, Section 1 (The Modern Rediscove1y of the Public Trust Doctrine), referred to. 4.2. By allowing construction of underground shopping complex in the park the Mahapalika has violated not only Section 114 of U.P. Municipal E Corporation Act but also the public trust doctrine. (1129-D-E] 5. There is no authority with the Mahapalika to constitute a High Power Committee and to delegate its functions to that Committee. There was no agenda at any time in any of the meetings of the Mahapalika for consideration of the underground-shopping complex. Such an important F matter, where the cost of the project was likely to.run into crores of rupees, could not have been considered under the topic "Other Subjects, subject to the Permission of the Presiding Officers." The Corporation had no time to apply their minds. When the agenda did not include the subject of construction of underground shopping complex nor was there any material to support the G discussion on the subject of construction of underground shopping complex it could not have been considered in the meetings of the Mahapalika and the Executive Committee. There was no proposals, no documents no plan, no study, no project report or feasibility report on the basis of which the Mahapalika could have been given a green signal for construction of the underground shopping complex. There was no discussion and no informed H 1074 SUPREME COURT REPORTS (1999] 3 S.C.R. A decision. The Mahapalika completely abdicated its functions. In the present case it is not mere irregularity or defect in the procedure so as to be protected under Section 105 of the Act but the whole procedure is in Clear breach of Sections 91 and 119 of the Act which are mandatory. (1129-F-H; 1130-A-B] B Myurdhwaj Cooperative Group Housing Society Ltd. v. Presiding Officer, Delhi Cooperative Tribunal, [1998)6 SCC 39, distinguished. 6. The agreement dated 4.11.1993 was not executed as required by Section 133 of the Act. Further, though the estimated cost of the project approved by Mahapalika was more than Rs.10 lakhs, no sanction of the State C Government as required under Section 136(2), was obtained. Thus the submission that this provision would apply only if the project cost was to be incurred by the Mahapalika cannot be accepted. It is the cost of the project that matter and not who incurs the cost in the first instance. The agreement dated 4-11-1993 is, therefore, not a valid contract and not binding on the Mahapalika. In H.S. Rikhy's case in which it was held that where a statute D makes a specific provision that a body corporate has to act in a particul!lr manner and in no other, that provision of law being mandatory and not directory has to be strictly followed. This principle will apply both as regards holding of meeting of the Mahapalika and execution of contract on its behalf.· Thus there is no estoppel against a statute. [1131-B-F-H] E Dr. HS. Rikhy v. New Delhi Municipal Committee, AIR (1962) SC 554, relied on. 7. Not only the clauses of the agreement are unreasonable for the Mahapalika but they are atrocious. No person of ordinary prudence shall ever into such an agreement. A trustee, which the Mahapalika is, has to be F more cautious in dealing with its properties. Valuable land in the heart of a commercial area has been handed on a platter to the builder for it to exploit and to make runaway profits. The agreement is completely one-sided favouring the builder. A land of immense value has been handed over to it to construct an underground shopping complex and in violation of the public trust doctrine G and the Master Plan for the city of Lucknow. The Master Plan of the city of Lucknow could not have envisaged Jhandewalan Park as a site available for commercial exploitation considering the density and congestion in the. area. The Mahapalika has no right to step in even if there is any violation by the builder of the terms of the agreement or otherwise. The Mahapalika, though considered to be the owner of the land, is completely ousted and H divested of the land for a period which is not definite and which depends M.I. BUILDERS PVT.LTD. v. R.S. SAHU 1075 wholly on the discretion of the builder. It cannot be said that the construction A of the underground shopping complex is by the builder as an agent of the/ Mahapalika. The concept of agency of totally missing in the present case. Rather the deal is from principal to principal. The agreement dated 4-111993 is not a valid one. The agreement defies logic. It is outrageous. It crosses all limits of rationality. The Mahapalika has certainly acted in a . B fatuous manner in entering into.such an agreement. (1132-E-H; 1133-A; 1136-A-B; 1134-H; 1135-A) Akadasi Pradhan v. State of Orissa, [1963) Supp. 2 SCR 691(at722), relied on. In Re W. (an infant), (1971) AC 682, referred to. Wade on Administrative Law, 7'h Edn., referred to. 8.1. Granting licence to the builder to construct underground shopping complex of a permanent nature and to hold on to the same for a period which c is not definite and then under the impugned agreement authorizing the D builder to lease out the shops on behalf of the Mahapalika, is a dubious method adopted to subvert the provisions of Section 128 which apply as well in the case of lease and thus the transaction will also be covered by the expression "otherwise dispose of any interest in the property". It is, therefore, difficult to accept the argument of the builder that the transaction is outside Section 128 of the Act. [1139-F-G) E 8.2. Licence has been granted to the builder to enter upon the park and to execute a work of permanent character and incur expenses in the execution of the work, thus making the licence irrevocable under Section 60(b) of the Easements Act. However, the licence is deemed to be revoked under Section 62(t) of the Easements Act after the happening of a certain F event which in this case is when the builder has recovered the whole of his investment plus 10% of the profit. When this purpose is achieved by the licensee is anybody's game. Not only that, the licensee, i.e., the builder is then authorised to lease out the shops so constructed on behalf of the Mahapalika. The result would be that to the builder provisions of Section 129 G of the Act cannot be thus made applicable. The provisions of Section-129 of the Act have, therefore, been flouted. The impugned agreement dated 4-111993 is bad having been executed also in contravention of the requirement of Section 129 of the Act. [1139-G-H; 1140-A-B) Chewalier I.I. Iyyappan v. The Dharmodayam Company, [1963)1 SCR H 1076 SUPREME COURT REPORTS [1999] 3 S.C.R. A 85, relied on. 9. When the "development" is by the builder the provisions of Section 14 of the U.P. Urban Planning and Development Act ("Development Act") would apply. There is no sanction of the building plan of the underground shopping complex by Lucknow Development Authority. Construction is, B therefore, per se illegal. Even after the interim order of this Court allowing construction, plans were not got sanctioned from Lucknow Development Authority, which would be the authority under the Development Act Sanction of the building plan by the Mahapalika would, therefore, meaningless. Even then, there were no sanctioned drawings. (1136-C-D] c 10. Action of the Mahapalika in agreeing to the construction of underground shopping complex in contravention of the provisions of the Act and then entering into an agreement with the builder against settled norms was wholly illegal and has been held to be so by the High Court. No doubt the Mahapalika is a continuing body and it will be estoppel from changing D its stand in the given case. But when the Mahapalika finds that its action was contrary to provisions of law by which it was constituted there could certainly be no impediments in its way to change its stand. There cannot be any estoppel operating against the Mahapalika. II 137-H; 1138-A-B] Union of India v. Indo-Afghan Agencies Ltd, (1968)2 SCR 366 and E Ganges Manufacturing Co. v. Sourujmull, 1880 ILR Cal. 669, distinguished. 11.l. Every decision of the authority except the judicial decision is amenable to judicial review and reviewability of such a decision cannot now be questioned. However, a judicial review is permissible if the impugned action is against law or in violation of the prescribed procedure or is F unreasonable, irrational or mala-fide. Bad governance sets a bad example. G That is what exactly happened in the present case. (1135-B] State of Bombay v. Laxmidas Ranchhoddas, Air (1952) Born 468, approved. 11.2. In the present case a decision to construct underground shopping complex by the appellant had already been taken and the whole process was gone into to confer undue benefit on appellant and the bogie of congestion was introduced to justify the action of the Mahapalika. It is wholly illegal and smacks of arbitrariness, unreasonableness and irrationality. It is a case H where the High Court rightly interfered in exercise of its powers of judicial - _,- M.I. BUILDERS PVT. LTD. v. R.S. SAHU [D.P. WADHWA, J.] 1077 ., review keeping in view the principles laid down by this Court in Tata Cellular • A ... (1137-E; 1135-A] Tata Cellular v. Union of India, (1994]6 SCC 651, relied on. ~ CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 93239325 of 1994. B From the Judgment and Order dated 23.8.94 of the Allahabad High Court in W.P. Nos. 89, 92 and 94 of 1994. M.L. Verma, Arun Jaitley, Dushyant Dave, G.L. Sanghi Raju Ramachandran, Ms. ·Nisha Bagchi, Vikas Mehta, Ms. Indu Malhotra, c S.V.Deshpande, Ashok Srivastava, Pradeep Misra, R.C. Verma, C. Sidhartha, M.K. Srivastava, (A.K. Goel) Additional Advocate General for U.P. R.B. Misra, Kamlendra Misra and Uday Umesh Lalit for the appearing parties. The Judgment of the Court was delivered by D.P. WADHW A, J. These appeals are directed against the judgment D dated August 23, 1994 of a Division Bench of the High Court of Judicature at Allahabad, (Lucknow Bench). By a common judgment in three writ petitions, High Court speaking through Shobha Dixit, J. held that the decision of the Lucknow Nagar Mahapalika ('Mahapalika' for short), also now called Nagar Nigam or Corporation, permitting M.I. Builders Pvt. Ltd. (the appellant herein) E to construct underground shopping complex in the Jhandewala Park (also known as Aminuddaula Park) situated at Aminabad Market, Lucknow, was illegal, arbitrary and unconstitutional. High Court set aside and quashed the relevant resolutions of the Mahapalika permitting such construction and also the agreement dated November 4, 1993 entered into between the Mahapalika and the appellant for the purpose. Writ of mandamus was issued to the F Mahapalika to restore back the park in its original position within a period of !hree months from the date of the judgment and till that was done, to take adequate safety measures and to provide necessary safeguard and protection to the public, users of the park. High Court had noticed that the fact that the park was of historical importance was not denied by the Mahapalika and also G the fact that perseverance or maintenance of the park was necessary from the 91 environmental angle and that the only reason advanced by the Mahapalika ---- for construction of the underground commercial complex was to ease th_e congestion in area. High Court, however, took judicial notice of the conditions prevailing at the Aminabad market. It said it was so crowded that it was bursting from all its seams. Construction of the underground shopping complex H 1078 SUPREME COURT REPORTS [1999] 3 S.C.R. A in question would only complicate the situation and that the present scheme would further congest the area. It said that the public purpose, which is alleged to be served by construction of the underground commercial complex, seemed totally illusory. Aggrieved by the impugned judgment of the High Court, appellant has B come to this Court. Mahapalika also felt aggrieved and filed appeals (Civil Appeal Nos. 9326-28 of 1994) but these appeals by the Mahapalika were subsequently allowed to be withdrawn by order dated February 6, 1997. There is controversy as to how the Mahapalika which had earlier justified its action later turned round and sought to withdraw the appeals. The order allowing C withdrawal of the appeals by the Mahapalika is as under: - D E F G "I.A. Nos. 10 TO 12 IN CIVIL APPEAL NOS. 9326-28 OF 1994 · Nagar Mahapalika Appellants v. Radhey Shyam Sahu & others Respondents ORDER Taken on board. The learned counsel for the appellant seeks leave to withdraw the appeals and states that Mr. S.V. Deshpande who appears for the other side has no objection to the withdrawal. The appeals will, therefore, stand disposed of as withdrawn with no order as to costs. New Delhi, February 6, 1997 Sd ................. en Sd ................ .,]." Mahapalika also cancelled the building plans. This action of the Mahapalika was subject matter of criticism by the appellant as to how a duly H sanctioned plan could be revoked without any notice to the appellant. We .. .. - -. M.l. BUILDERS PVT. LTD. v. R.S. SAHU [D.P. WADHWA, J.] 1079 may, at this stage, itself reproduce the relevant portion of the resolution dated A August 6, 1996 of the Mahapalika for withdrawal of its appeals which is as under:- ; "The Lucknow Bench of Hon'ble High Court of Allahabad has declared the agreement dated 4.1 l. l993 executed between the Nagar Mahapalika, Lucknow and M.I. Builders, Karamat Market Lucknow in B respect of construction of underground Palika Bazar and Multistoreyal · parking on Jhandewala Park Aminabad, Lucknow as invalid and not in the public interest vide their judgment dated 23.8.1994. The Hon'ble High Court rendered the above said Judgment by accepting the writ petitions preferred by several elected sabhasad of C the then Nagar Mahapalika and the citizens. On the directions of the then Nagar Pramukh Shri Akhilesh Das, who wanted to cause undue profit to M.I. Builders against the interest of Nagar Mahapalika now Nagar Nigam Lucknow, the citizens of D Lucknow, the Nagar Nigam Lucknow filed Special Leave Petition No. 17223-25 of 1994 in the Hon'ble Supreme Court against the Judgment of the Hon'ble High Court. It is proposed that in the interest of the citizen of Lucknow and the Lucknow Nagar Nigam and pending Special Leave Petition No. E 17223-25 of 1994 in the Hon'ble Supreme Court be withdrawn and the Nagar Nigam Lucknow be further directed to oppose the Special Leave Petition filed by Mis. M.I. Builders in the Hon'ble Supreme Court against the Judgment dated 23.8.1994 of Lucknow Bench of Hon'ble High Court of Allahabad. Unanimously decided that the aforesaid resolution be passed and accordingly the action may be taken." F The letter revoking the sanctioned building plans is dated April 17, 1997 and is as under:- G "To Mis M.I. Builders (P) Ltd. Karamat Market, Nishatganj, Lucknow H 1080 SUPREME COURT REPORTS [1999) 3 S.C.R. A Sir, Vide this office letter No. 223/Sa.Sa.A./95 dtd. 23.1.1995 the building plans for construction of underground shopping and parking complex at Jhandewala Park, Ameenabad were sanctioned. B After talcing legal advice by the Hon'ble Nagar Pramukh from the standing counsel of the Nagar Nigam and Add. Advocate General the earlier sanctioned building plans has been revoked vide order dated 17.4.97. As such these have no legal sanctity. c D E Please be informed. ·Yours faithfully, Sd/- S.K. Gupta Mukhya Nagar Adhikari 17.4.97 Copy to: The Vice Chairman, Lucknow Development Authority, for information. Sd/- S.K. Gupta Mukhya Nagar Adhikari" There were three writ petitions before the High Court and during the course of hearing of those petitions High Court had directed maintenance of status quo. At that time, it would appear only digging in some part of the park had been done and there was no construction. When the matter came before F this Court, by order dated December 14, 1994 the Court passed the following order:- G "Exemption from filing official translation is allowed. Liberty to add the omitted parties in the cause title. Leave granted. We have heard counsel on the question of grant of interim relief. Printing dispensed with. The operation of the impugned order of the High Court is stayed H on the following conditions: ......... .. M.I. BUILDERS PVT. LTD. v.•R.S. SAHU [D.P. WADHWA, J.] 1081 ·1 Taking all the facts and circumstances into consideration and A having regard to the fact that it may not be possible for this Court to hear the appeal within a short time having regard to the pressure of work and pendency of old cases, we direct that the appellant shall be permitted to construct an under ground shopping complex by ~ising its own funds without collecting any additional funds from individuals or concerns to whom the promise of allotment of shop is B made. To clarify the matter, we say that the funds can be raised from agencies other than those to whom the shops are ultimately allotted. It will be made clear to the agencies from whom the funds are raised that they will not be entitled to allotment of shops. The appellant will maintain ~ccounts and file an undertaking to the above effect in this C 1 Court wi*in tw