New Delhi, Feb. 16: The Supreme Court has set aside an Orissa High Court order that had ruled that the Bhubaneswar Development Authority (BDA) had no business to cancel land allotments made on a first-come-first-served basis and allot it again on by drawing of lots.

A two-judge bench of Justices Deepak Verma and K.S. Radhakrishnan, in an order passed on February 1, upheld the BDA appeal against the high court order quashing its decision to change its allotment policy from first-come-first-served basis to allotment by draw of lots.

In response to pleas by those who got land on first-come-first-served basis, the high court had set aside the BDA’s allotment of 45 plots in the city done by way of drawing of lotteries.

The authorities had advertised in 2000 that it would allot these plots on first-come-first-served basis. These plots, measuring 2,400sqft in Chandrasekharpur residential area, were offered for Rs 2.40 lakh, thus pegging the per sqft price at Rs 100.

The advertisement said that those interested in outright purchase would get priority in allotment of plot and would have to submit a bank draft drawn on Oriental Bank of Commerce, BDA Branch, Akash Sova Building, Bhubaneswar.

After the advertisement was published in three local dailies, 58 applicants deposited the full amount, along with application and other prescribed details for outright purchase. Three applicants submitted their applications on January 8, 2000, and one each on January 10, 2000, and January 11, 2000, along with a sum of Rs 2.40 lakh each.

Amid allegations that the scheme was intended to benefit pre-determined persons close to BDA officials, the Odisha Lokpal wrote a letter to the vice-chairman, BDA, on January 15, 2000.

On May 16, 2000, the secretary of the state department of urban development gave a proposal to BDA to cancel the process of allotment of plots.

The matter was placed before the BDA in its 76th authority meeting held on May 16, 2000, and after weighing the pros and cons, a decision was taken by the BDA to return the deposits and re-offer these plots to members of the public through draw of lots.

Some of the allottees accepted the amounts but protested, some did not accept them and some accepted the sums without any protest. Some of them approached the high court.

The high court then set aside the BDA decision to re-allot these plots.

The BDA appealed against this decision in the top court. Lawyer for the BDA R.S. Jena argued that the high court could not quash the BDA decision unless it were arbitrary, illegal or vitiated by extraneous reasons.

The BDA took a decision to change its allotment policy because of the public perception that there was foul play and favouritism in the proposed allotment of plots.

Jena also contended that there was no indefeasible right on the applicants to get allotment and that the authority had the right to adopt a system that was transparent and complaint free.

He also referred to a judgment of the top court that had held that supervening public equity or public interest would override individual equity and in such case a court would not be justified in interfering with the decision of the authority.

The lawyer for the allottees, P.S. Narasimha, said the high court decision was justified in the absence of any material to show that the decision taken for allotment of plots following the first-come-first-served basis was vitiated by any extraneous or irrelevant considerations.

The bench, however, ruled in BDA’s favour.

“We are of the view that the process of allotment of housing plots on First Come First Served basis by a statutory authority has inherent dangerous implications and unless properly guarded, may lead to favouritism, partiality, arbitrariness etc,” the bench said.

“In our opinion, there appears to be a fundamental flaw in adopting the principle of ‘first come first served’ inasmuch as it cannot be said to be free of arbitrariness and does not reflect transparency. It may be proved beneficial to those, who may be aware of such a procedure to be followed by BDA in allotment of plots and may cause loss to those who may genuinely be interested in having a plot. We cannot put a seal of approval for such a method as the same is surrounded by many extraneous considerations. We have to keep in mind the larger public interest and institutional integrity cannot be allowed to be compromised.”

The court noted that the BDA had since expressed its desire to re-offer these plots at the rate of Rs 1,378 per sqft, as assessed by the cost assessment committee considering the benchmark value furnished by the sub-registrar, Bhubaneswar, by way of lots.