Holding

The Supreme Court held that the appellants have no legal right to the property on a hire‑purchase basis, the Director lacked authority to direct such transfer, the matter is a policy decision beyond judicial review, and consequently mandamus could not be issued.

Summary

The appellants, traders licensed by the Krishi Utpadan Mandi Samiti, Pilibhit, claimed that they were assured by a letter from the Director of the Mandi Parishad that the shops, godowns and sheds allotted to them would be transferred on a hire‑purchase basis. After shifting their business to a new market site, they were instead asked to execute lease agreements. They filed a writ petition under Article 226 seeking a mandamus directing the respondents to allot the premises on hire‑purchase terms. The High Court dismissed the petition, directing the appellants to a revision under Section 32 of the U.P. Krishi Utpadan Mandi Act. On appeal, the Supreme Court held that the Director had no authority to issue such a direction, the Mandi Samiti could not transfer immovable property without a resolution and prior written approval of the State Agricultural Produce Markets Board, and that the decision to sell or lease the property is a policy matter not amenable to judicial review. Consequently, there was no statutory duty enforceable by mandamus, and the appeal was dismissed.

Issues considered

The traders have a legal right under the U.P. Krishi Utpadan Mandi Act to claim transfer of the allotted shops, godowns and sheds on a hire‑purchase basis.
Whether the Director's letter creates a statutory duty enforceable by a writ of mandamus.
Whether the policy decision of the Mandi Parishad/Board regarding transfer or lease of immovable property is subject to judicial review.
Whether a writ of mandamus can be issued in the absence of a clear statutory duty.

Subjects

mandamuspolicy decisionjudicial reviewhire‑purchaseagricultural marketstatutory dutyU.P. Krishi Utpadan Mandi Actimmovable propertyleaseadministrative law

Judgment

A MIS RAM SINGH VIJA Y PAL SINGH AND ORS.
v.
STATE OF U.P. AND ORS. "
MAY 1,2007

B [G.P. MATHUR AND R.V. RAVEENDRAN, JJ.]

U.P Krishi Utpadan Mandi Adhiniyan, 1964-ss.12 (1) and 26-L(/)-
Allotment of shops, godowns etc. to traders by Mandi Parishad-Letter from
Director of the Parishad that the shops etc. would be transferred to the
c traders on hire-purchase basis-Subsequent notice to traders to enter into
agreement where-under the shops etc. to be given to them on rental basis-
Notice challenged-Dismissal thereof by High Court-On appeal, held:
Traders have no legal right to claim the transfer of the property to them on
hire-purchase basis-Decision of transfer on hire-purchase basis by Mandi
D Parishad not proved-Letter by Director to that effect was without authority-
Mode of transfer, being a policy decision, Court cannot interfere therewith-
Agricultural Market Produce-Judicial Review-Scope of in policy decision.

Writ-Writ of Mandamus-When can be issued.

E A Writ Petition seeking Writ of Mandamus was filed by traders carrying
on business in agricultural produce. Their case was that they shifted their
business from the old place to new place on the assurance that policy was
being chalked out to give the shops and sheds etc. to the license holders on
hire-purchase basis. Thereafter a letter was given to them by the Director,
Mandi Parishad, to the effect that shops, sheds etc. would be given to the
F license holders on hire-purchase basis. They also made improvements in the
shops etc. with the prior approval of Mandi Parishad. Thereafter they got a
notice from the respondents to execute an agreement with the Mandi Samiti,
where under shops etc. would be given to them on rental basis. High Court
summarily dismissed the Writ Petition. Hence the present appeal.
G
Dismissing the appeal, the Court

HELD: 1. The proviso the sub-section (1) of Section 12 of U.P. Krishi •
Utpadan Mandi Adhiniyam, 1964, would show that the Mandi Samiti
(Committee) is not empowered to transfer any immovable property without
H 1060
RAMSINGHVIJAYPALSINGHv. STATEOFU.P. 1061
j the previous approval in writing of the State Agricultural Produce Markets A
Board (Mandi Parishad). Section 26-L of the Act deals with the powers and
functions of the Board. The Director of Mandi Parishad( Board) has not been
conferred any power whereunder he may issue a general direction that he
shops, godowns and sheds of the Mandi Parishad shall be transferred or sold
to the traders on hire-purchase basis. Therefore, the appellants can derive
no benefit from the letter of the Director wherein it was mentioned that a B
decision had been taken to give the shops on hire-purchase basis. In the
counter affidavit the respondents have specifically asserted that the Board
never took any such decision to sell the property of the Mandi Samiti to the
traders either on hire-purchase basis or otherwise. No, document has been
filed to show that the Board ever took any such decision. The appellants, c
therefore, have no legal right to claim that the property be given to them on
hire-purchase basis. (Para 8) (1066-A-E)

2. The appellants have not filed any document whatsoever to show that
either it was held out or any assurance was given by the respondents that the
business premises would be sold to the petitioners on hire-purchase basis or D
otherwise.

t Whether the shops, godowns and sheds of the Mandi Samiti, which have
been allotted to the appellants, should be given to them on lease or should be
sold to them on hire-purchase basis, is purely a matter of policy as the property
belongs to the Mandi Samiti or the Mandi Parishad. It is for the Mandi Samiti E
or Mandi Parishad to take a policy decision in this regard and the Court cannot
examine the correctness or otherwise of the said policy except in a very
narrow compass. [Para 9) (1066-H; 1067-A-B)

Netai Bagv. State of West Bengal, [2000) 8 SCC 262; BALCO Employees
F
Union v. Union of India, [2002) 2 SCC 333; Federation of Railway Officers
Association v. Union of India, (2003) 4 SCC 289, relied on.

3. In order that mandamus may issue to compel the authorities to do
something, it must be shown that there is a statute which imposes a legal
duty and the aggrieved party has a legal right under the statute to enforce its G
~ performance. (Para 11)

Bihar Eastern Gangetic Fishermen Cooperative Society Ltd v. Sipahi
Singh, AIR (1977) SC 2149, relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2300 of2006. H
1062 SUPREME COURT REPORTS [2007) 5 S.C.R.

A From the Final Judgment and Order dated 05.09.2003 of the High Court
of Judicature at Allahabad in Civil Misc. Writ Petition No. 16315 of2003.

Dinesh Dwivedi, Manish Shanker, G.V. Rao, Ashish Mohan and Shail
Kumar Dwivedi for the Appellants.

B ~hobha Dikshit, Pradeep Misra for the Respondents.

The Judgment of the Court was delivered by

G.P. MATHUR, J. I. Leave granted.

C 2. This appeal, by special leave, has been filed challenging the judgment
and order dated 5.9.2003 of a Division Bench of Allahabad High Court, by
which the writ petition filed by the appellants was summarily dismissed at the
admission stage.

3. The appellants herein filed the writ petition before the High Court
D under Article 226 of the Constitution praying for the following reliefs :
(i) issue an appropriate writ, order or direction commanding the
respondents concerned to allot the shops/godowns to the
petitioners on hire purchase basis;
(ii) issue an appropriate writ, order or direction commanding the
E respondents concerned not to interfere, in any manner, on the
possession of the petitioners' shops and godowns allotted to
them;
(iiO issue an appropriate writ, order or direction commanding the
respondents concerned not to compel the petitioners to enter into
F any agreement for taking shops/godowns allotted to them on
rental basis.
(iv) issue any other or further writ, order or direction which this
Hon 'ble Court may deem fit and proper in the circumstances of
the case.
G
The writ petition was filed on behalf of 143 firms and individuals carrying 1
•
on business in agricultural produce and the respondents arrayed in the writ
petition were (I) State ofU.P. through Director, Krishi Utpadan Mandi Parishad,
Lucknow; (2) Krishi Utpadan Mandi Samiti, Pilibhit through its Chairman; and
H (3) Secretary, Krishi Utpadan Mandi Samiti, Pilibhit.
RAM SINGH VIJAY PAL SINGH v. STATE Of U.P. [G.P. MATHUR. J.] \ 063

4. The case set up by the writ petitioners in the writ petition is as under. A
The petitioners are dealers in agricultural produce and have been granted
licenses by the Krishi Utpadan Mandi Samiti, Pilibhit, to carry on the said
business. They were earlier carrying on business in Purana Galla Mandi in
Pilibhit city. After construction of Nawin Mandi Sthal, they were directed to
shift their business to the said newly constructed premises. Though the
Nawin Mandi Sthal is at considerable distance from the city area and it lacked B
basic infrastructure, the petitioners shifted their business to the said place as
it was intimated that a policy was being chalked out to give the shops and
sheds, etc. to the license holders on hire-purchase basis. Subsequently in the
year 1995, the Director, Mandi Parishad, Lucknow, sent a letter that the shops,
godowns and sheds will be given to the license holders on hire-purchase C
basis. In some places like Haldwani, Rudrapur and Ghaziabad, in the State of
U.P., the shops and godowns were given to the license holders on hire-
purchase basis. The writ petitioners were paying rent to Mandi Samiti, Pilibhit,
regularly and had been repeatedly requesting the authorities of the Mandi
Samiti to formally execute the document giving the shops and godowns to
them on hire-purchase basis. However, instead of executing the said documents, D
the respondents had given them notice to execute an agreement with the
Mandi Samiti, Pilibhit, whereunder the shops and godowns will be given to
them on lease on rental basis. The writ petitioners who were carrying on
business in the shops and god owns since 1986 and had been regularly
paying the rent to the Mandi Samiti were under a bona fide impression that E
ultimately the same shall be transferred to them on hire-purchase basis. Some
of the writ petitioners had spent money in making improvements in the shops
and godowns under their occupation and the same was done with the prior
approval of the Mandi Samiti. The proforma of the agreement which was now
given to the writ petitioners contained a clause that after expiry of a period
of 3 years, the rent shall be enhanced by I 0 per cent. It was on these grounds F
that the writ petition was filed seeking the reliefs as quoted above.

5. In reply to the writ petition, a counter affidavit was filed by the
Secretary, Krishi Utpadan Mandi Samiti, Pilibhit and the pleas taken therein
are as under. The writ petitioners were carrying on business in wholesale in G
specified agricultural produce and they had been allotted shops, sheds and
.. ~ open space in Nawin Mandi Sthal for which rent is charged. All the basic
amenities had been provided in the Nawin Mandi Sthal which was quite close
to the city. The writ petitioners had been allotted the shops etc. on rental
basis and at no stage any assurance was given that the shops, godowns or
sheds would be given to the writ petitioners on hire-purchase basis. At the H
1064 SUPREME COURT REPORTS (2007] 5 S.C.R.

A outset, it was made clear to the traders that the Mandi Samiti was giving the
shops, godowns and sheds on lease for which rent would be charged. It was )_
denied that anywhere in U.P. a different policy was adopted or that shops or
godowns had been given by the Mandi Samiti on hire-purchase basis.
Regarding the letter of the Director allegedly sent in 1995, it was submitted
that being a policy matter, it was the Mandi Parishad (Board) alone which
B could take such a decision and the Director had no authority to direct that
the property of Mandi Samiti shall be given to the traders of agricultural
produce, who are license holders, on hire-purchase basis. It was further
submitted that the Inspector General and Commissioner of Stamps, U.P. had
sent a letter dated 24.10.2002 to the Director, Mandi Parishad, U.P. that the f
C agreement which was to be executed between the Mandi Samiti (Committee)
and the traders required to be registered and stamp duty in accordance with
Article 35 of Schedule l (kha) of the Indian Stamp Act (as amended in the
State of U.P.) had to be paid. lt was after receipt of the said communication
that the various allottees of the shops, godowns and sheds of the Mandi
Parishad were informed to get the agreement (lease deed) registered. It was
D specifically pleaded that the uniform policy of the Mandi Parishad (Board}
was to give the shops, godowns and sheds to the traders of agricultural
produce, who had obtained licenses, on lease on rental basis and not to
transfer the property in their favour either on hire-purchase basis or otherwise.

6. The High Court on 5.9 .2003 summarily dismissed the writ petition by
E
a brief order which reads as under :-

"Heard learned counsel for the parties.

The petitioner has an alternative remedy of filing a revision under
Section 32 of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 before
F the Mandi Parishad.

The petition is dismissed on the ground of alternative remedy.
However, if a revision is filed the sam~ will be decided expeditiously."

G 7. We have heard Mr. Dinesh Dwivedi, learned senior counsel for the
appellants and Mrs. Shobha Dikshit, learned senior counsel for the respondents.

8. The dispute here is governed by U.P. Krishi Utpadan Mandi
Adhiniyam, 1964 (hereinafter referred to as 'the Act'). Sections 12, 26-A and
sub-section (I) of Section 26-L of the Act read as under :-"
H
RAM SINGH VIJA YPAL SINGH v. STA TEOF U.P. [G.P. MATHUR, J.] \ 065

"12. Establishment and incorporation of Committee. (I) For every A
A
Market Area there shall be Committee to be called the Mandi Samiti
of that Market Area, which shall be a body corporate having perpetual
succession and an official seal and, subject to such restrictions or
qualifications, if any, as may be imposed by this or any other enactment,
may sue or be sued in its corporate name and acquire, hold and
dispose of property and enter into contracts : B

Provided that the Committee shall not transfer any immovable
property except in accordance with a resolution duly passed at any
... of its meetings by a majority of not less than three-fourths of the total
number of its members and with the previous approval in writing of
the Board.
c

- (2) The Committee shall be deemed to be a local authority for the
purposes of Land Acquisition Act, 1894 and any other law for the time
being in force.

26-A. Establishment ofthe Board. (I) The State Government shall, by D
notification in the Gazette, and with effect from a date to be specified
therein, constitute a Board by the name of the State Agricultural
Produce Markets Board with its head office at Lucknow.

(2) The Board shall be a body corporate by the said name having
perpetual succession and a common seal and may sue or be sued by E
the said name and acquire, hold and dispose of property and enter
into contracts.

(3) The Board shall for all purposes be deemed to be a local
authority.
F
i 26-L. Powers and functions of the Board. ( 1) The Board shall, subject
to the provisions of this Act, have the following functions and shall
have power to do anything which may be necessary or expedient for
carrying out those functions
(i) superintendence and control over the working of the Market G
-- Committees and other affairs thereof including programmes
~

undertaken by such Committees for the construction of new Market
yards and development of existing markets and Market areas;
(ii) giving such direction to Committees in general or any Committee
in particular with a view to ensure efficiency thereof; H
1066 SUPREME COURT REPORTS [2007] 5 S.C.R.

A (iii) any other function entrusted to it by this Act;
)._
(iv) such other functions as may be entrusted to the Board by the
State Government by notification in the Gazette."

The proviso to sub-section ( 1) of Section 12 of the Act would show that
the Mandi Samiti (Committee) is not empowered to transfer any immovable
B property without the previous approval in writing of the State Agricultural
Produce Markets Board (Mandi Parishad). Section 26-L of the Act deals with
the powers and functions of the Board. The Director of Mandi Parishad

c
(Board) has not been conferred any power whereunder he may issue a general
direction that the shops, godowns and sheds of the Mandi Parishad shall be
transferred or sold to the traders on hire-purchase basis. Therefore, the
j
-
appellants can derive no benefit from the letter of the Director dated 4.11.1995,
wherein it was mentioned that a decision had been taken to give the shops
on hire-purchase basis. In the counter affidavit the respondents have
specifically asserted that the Board never took any such decision to sell the
property of the Mandi Samiti to the traders either on hire-purchase basis or
-
D otherwise. No document has been filed to show that the Board ever took any
such decision. It is the case of the respondents that the letter sent by the
Director was his own action which had never been authorized by the Board.
At any rate the proposal made by the Director never fructified as no such
decision was taken by the Board and the Board never authorized the Mandi
E Samities (Committees) of various districts in the State to transfer the property ·
of the Samiti in favour of the traders of agricultural produce who had been
allotted the shops, godowns and sheds by the Mandi Parishad. In this view
of the matter, the appellants have no legal right to claim that the property be
given to them on hire-purchase basis.

F 9. Mr. Dinesh Dwivedi, learned senior counsel for the appellant has next
submitted that the writ petitioners were earlier carrying on business from their 'r
own premises in Purana Galla Mandi in the city of Pilibhit and they shifted
to Nawin Mandi Sthal, where the Mandi Samiti had made construction of
shops and godowns, etc. which is at considerable distance from the city and
which lacked basic infrastructure, on the assurance given by the Mandi
G Parishad that the business premises would be sold to them on hire-purchase
;:c
basis. Learned counsel has submitted that after having shifted to the Nawin ... '
Mandi Sthal which caused considerable inconvenience to the traders, it is not
open to the respondents to contend that the business premises would be
given to them by the Mandi Samiti on lease or rental basis. In this connection
H it may be pointed out that the writ petitioners have not filed any document
RAM SINGH VIJA YPAL SINGH v. STATE OF U.P. [G.P. MATHUR, J.] J067

~
whatsoever to show that either it was held out or any assurance was given A
by the respondents that the business premises would be sold to the petitioners
on hire-purchase basis or otherwise. In fact, there is not a single piece of
paper on record to substantiate the allegation made by the writ petitioners.
Whether the shops, godowns and sheds of the Mandi Samiti, which have
been allotted to the writ petitioners, should be given to them on lease or
should be sold to them on hire-purchase basis, is purely a matter of policy B
as the property belongs to the Mandi Samiti or the Mandi Parishad. It is for

--
the Mandi Samiti or the Mandi Parishad to take a policy decision in this
) regard and the Court cannot examine the correctness or otherwise of the said
policy except in a very narrow compass.

10. In Netai Bag v. State of West Bengal, [2000] 8 SCC 262, this Court
c
,, held as under in para 20 of the reports :

"20. The Government is entitled to make pragmatic adjustments and
policy decision which may be necessary or called for under the
prevalent peculiar circumstances. The court cannot strike down a D
policy decision taken by the Government merely because it feels that -~-

another decision would have been fairer or wiser or more scientific or
logical. In State of MP. v. Nandla/Jaiswal, [1986] 4 SCC 566 it was
held that the policy decision can be interfered with by the court only
if such decision is shown to be patently arbitrary, discriminatory or
malafide. In the matter of different modes, under the rule of general E
application made under the M.P. Excise Act, the Court found that the
four different modes, namely, tender, auction, fixed licence fee or such
other manner were alternative to one another and any one of them
could be resorted to ............................................."

1 In the well known case of BALCO Employees Union v. Union of India, F
[2002] 2 SCC 333, a Three Judge Bench summarized the law on the point as
under :

"In a democracy, it is the prerogative of each elected Government
to follow its own policy. Often a change in Government may result in
G
--
-~
the shift in focus or change in economic policies. Any such change
v
may result in adversely affecting some vested interests. Unless any
illegality is committed in the execution of the policy or the same is
contrary to law or ma/a fide, a decision bringing about change cannot
per se be interfered with by the Court. It is neither within the domain
of the Courts nor the scope of the judicial review to embark upon an H
1068 SUPREME COURT REPORTS [2007] 5 S.C.R.

A enquiry as to whether a particular public policy is wise or whether
better public policy can be evolved. Nor are the Courts inclined to
strike down a policy at the behest of a petitioner merely because it
has been urged that a different policy would have been fairer or wiser
or more scientific or more logical.

B Wisdom and advisability of economic policies are ordinarily not
amenable to judicial review unless it can be demonstrated that the
policy is contrary to any statutory provision or the Constitution. In
other words, it is not for the Courts to consider relative merits of
different economic policies and consider whether a wiser or better one
can be evolved. In matters relating to economic issues, the Government
- .
c has, while taking a decision, right to "trial and error" as long as both
trial and error are bona fide and within limits of authority. For testing
the correctness of a policy, the appropriate forum is the Parliament
and not the Courts ........................"

D In Federation of Railway Officers Association v. Union ofIndia, [2003)
4 sec 289, it was held as under in para 12 of the reports :-

"12. In examining a question of this nature where a policy is evolved
by the Government judicial review thereof is limited. When policy
according to which or the purpose for which discretion is to be
E exercised is clearly expressed in the statute, it cannot be said to be
an unrestricted discretion. On matters affecting policy and requiring
technical expertise the Court would leave the matter for decision of
those who are qualified to address the issues. Unless the policy or
action is inconsistent with the Constitution and the laws or arbitrary
or irrational or abuse of the power, the Court will not interfere with
F such matters."

This being the settled position of law no direction can be issued to the
respondents to transfer the shops, godowns or sheds to the writ petitioners
on hire purchase basis.

G 11. The principal relief claimed by the writ petitioners is that a writ of
mandamus be issued commanding the respondents to allot the shops, godowns
and sheds to the writ petitioners on hire-purchase basis. The principles, on
which a writ of mandamus can be issued have been settled by a catena of
decisions of this Court. In The Bihar Eastern Gangetic Fishermen Cooperative
H Society Ltd v. Sipahi Singh, AIR (1977) SC 2149, this Court observed as
RAM SINGH VJJAY PAL SINGH v. STATE OF U.P. [G.P. MATHUR, J.] l 069

under: - A
"A writ of mandamus can be granted only in a case where there is a
statutory duty imposed upon the officer concerned and there is a
failure on the part of that officer to discharge the statutory obligation.
The chief function of a writ is to compel performance of public duties
prescribed by statute and to keep subordinate tribunals and officers B
exercising public functions within the limits of their jurisdiction. It
follows, therefore, that in order that mandamus may issue to compel
the authorities to do something, it must be shown that there is a
statute which imposes a legal duty and the aggrieved party has a legal
right under the statute to enforce its performance."
c
12. The writ petitioners have absolutely no legal right to claim that the
shops, godowns or sheds be transferred to them on hire-purchase basis. In
these circumstances the relief claimed by them cannot at all be granted and
the writ petition was rightly dismissed.

13. Having given our careful consideration to the submissions made by
D
learned counsel for the parties, we are of the opinion that the appellants have
failed to make out any ground for granting any relief to them, as claimed in
the writ petition. The appeal is accordingly dismissed with costs.

KKT. Appeal dismissed.