Holding

The administration’s revised allotment policy was lawful, the applicants had no enforceable right to the earlier drawn sites, the premium must remain at Rs 15 per square yard, and the appeals are dismissed.

Summary

The Chandigarh administration sought to relocate scattered printing presses to an industrial area, initially earmarking 43 larger sites in Phase‑II and inviting applications with a 10% earnest money deposit. After lots were drawn in 1977 awarding sites to the appellants, the administration abandoned the Phase‑II scheme, created a new layout of smaller sites in Phase‑I and announced a higher premium of Rs 35 per square yard. The appellants filed a writ petition claiming a right to the larger sites and challenging the revised policy as arbitrary and violative of Art 14; the High Court directed that only Rs 15 per square yard be payable. Both parties appealed. The Supreme Court held that the applicants had no enforceable right to the earlier drawn sites absent formal intimation, that the word “shall” in Rule 8 of the 1973 Rules is not mandatory, that the doctrine of promissory estoppel could not compel the administration to honor a non‑statutory assurance, and that the revised policy was bona‑fide and not arbitrary, so the premium should remain at Rs 15 per square yard. Both appeals were dismissed.

Issues considered

The validity of the revised policy of allotting smaller Phase‑I sites at a higher premium.
Whether applicants acquire a vested right to sites for which lots were drawn under Rule 8 of the 1973 Rules.
Whether the doctrine of promissory estoppel applies to prevent the administration from altering its allotment policy.
Whether the revised policy violates Article 14 of the Constitution as arbitrary classification.
The correct rate of premium payable for the allotted sites.

Legislation cited

Subjects

industrial site allotmentadministrative lawArticle 14promissory estoppelRule interpretationleaseholdpremium rateclassificationarbitrariness

Judgment

PARADISE PRINTERS AND ORS. A
v.
UNION TERRITORY OF CHANDIGARH AND ORS.

DECEMBER 4, 1987

[B.C. RAY AND K. JAGANNATHA SHETTY, JJ.] B

Reversion of policy of allotment of industrial sites for establish-
ment of printing presses, under the Chandigarh (Development and
Regulation) Act. 1952, and the Chandigarh Lease Hold of Sites and
Building Rules, 1973, challenged.
c
The Chandigarh Administration wanted the printing presses,
scattered all over Chandigarh in the residential premises or small
shops, to be located in an industrial area. For that purpose, the
administration earmarked forty three sites in the industrial area
Phase-II, and invited applications for allotment of the sites. Several D
persons submitted the applications with deposits of earnest money of
Rs.1,000 in each. That was ten per cent of the premium payable for
each site. The appellants in the C.A. No. 97 of 1981, who were among
the said applicants, were called upon to deposit 25 per cent of the
premium calculated at the rate of Rs.15 per square yard. The appel-
lants complied with that demand. The authorities decided to draw lots
as the applicants were more than the number of the sites available. In E
October 1977, lots were drawn and the appellants won. But the
authorities did not issue the letters of allotments. The authorities had a
second thought about the scheme of the allotment of the sites. They
wanted to accommodate as many applicants as possible, which,
however, could not be done in the industrial area phase II. The
authorities also came to hold the view that for setting up the printing F
Industry, larger sites as earmarked earlier would not be necessary and
smaller sites would meet the requirements. Consequently, the sites
proposed in the industrial phase II were given up and a lay-out of
smaller sites in the industrial area phase I was prepared, wherein
about BI sites were reserved for allotment to the printing press
owners. G

).. The appellants as also the other applicants were intimated by
letters that the said sites would be allotted at the rate of Rs.35 per
square yard, and that the allotment would be made by draw of lots on
October 3, 1979. The appellants did not participate in the proceed-
ings. They moved the High Court by a writ petition, challenging the H

157
158 SUPREME COURT REPORTS (1988] 2 S.C.R.

A revised policy of the allotment of the smaller sites on the ground inter
alia that they had a right to take possession of bigger plots in respect
which lots were earlier drawn in their favour. The High Court did '
not give substantial relief to the appellants, holding that there was
nothing illegal in the said revised policy since the appellants did not
acquire right to get bigger sites in the phase II, it directed that the
ij appellants would be liable to pay at the rate of Rs.15 and not Rs.35
per square yard. The appellants appealed to this Court by special
leave against the decision of the High Court (C.A 97 of 1981). The res-
pondents the Chandigarh Administration-also moved this Court by
special leave (C.A. No. 98 of 1981) against the direction of the High
Court as to the reduced premium to be recovered from the appellants.
c Dismissing both the appeals, the Court,

HELD: There was no substance in the appeal by the ·respon-
dents. If the applicants had been allotted sites as per the original plan
and as per the first draw in 1977, they would have been liable to pay
D at the rate of Rs.15 per square yard. In fact, the other enterpreneurs
who were allotted sites in the industrial area phase II paid premium
only at the rate of Rs.15 per square yard. Why then should there be a
higher rate payable by the appellants? They had not asked for the sites
in the industrial area phase I. Secondly, the applicants were not
responsible for the delay in the allotment of sites. Thirdly, there was no
E evidence that the Chandigarh Administration had to incur more
expenditure in forming the new sites in the phase I. The High Court
was right in directing the authorities to recover only at the rate of
Rs.15persquareyard. ll61H; l62A-C]

In the case of the appeal by the appellants/owners of the printing
F presses, admittedly, at the relevant stage, there was no intimation
of the allotment of the sites to the appellants. There was no
official communication to them, as required under sub-rule (3) of
Rule 8 of the Chandigarh Lease Hold Sites and Building Rules, 1973.
Such an intimation alone could confer the right on the appellants to
obtain possession of the sites. In the absence of any such communi·
G cation, the appellants could not be held to have the right to get the
sites. I t63F-G I

Emphasis was laid on the word "shall" used in sub-rule (3) of
Rule 8, which provides that when 10 per cent of the premium has been
tendered, the Estate Officer shall, subject to such directions as may be
H issued by the Chief Administrator in that behalf, allot a site of the size
PARADISE PRINTERS v. UNION TERRITORY 159

..l.. applied for. There is not much force in this contention. Generally, the A
use of the word "shall" prima facie indicates that the particular
provision is imperative, but that is not so always. The meaning to be
given to a word depends upon the context in which it is used. The right
of every applicant under sub-rule (3) of Rule 8 is only a right to have
his application considered. The acceptance of the application does not B
create a right for allotment of a site. The word "shall" used in the
sub-rule must be considered as not mandatory. The ·imperative
-1 meaning would defeat the purpose of the rule. [163H; 164A-B, F]

It is not known under what provision the authorities asked the
- ~- sites even before allotment. There was no specific assurance or
appellants to pay 25 per cent of the premium payable in respect of the
c
representation made by the authorities, promising to allot the sites
applied for. Even if there was any such assurance, the Court did not
think that it would give rise to the doctrine of promissory estoppel in"the
case. The authorities cannot give assurance contrary to the statutory
rules. They are bound by the rule of procedure and cannot make any
D
representation or promise to allot particular sites to the applicants.
Even if they make such a promise or assurance, the doctrine of
promissory estoppel cannot be invoked to compel them to carry out
the promise or assurance which is contrary to law. I166B-D I

If there were enough plots to accommodate all the applicants in
E
the industrial area Phase II, it would not be proper for the authorities

- ·,
to revise the policy and allot smaller sites in phase I. But no material
was placed before the Court to come to the conclusion that there were
enough industrial plots to accommodate, possibly, all the applicants.
The authorities formed another lay-out in phase I for want of plots in
phase II. The action of the authorities was bona fide and there was no
F
, -- reason to doubt it. [166F-G]

The revised policy of the Chandigarh Administration did not
suffer from any act of arbitrariness either in classifying the appellants
as a separate group or in considering them for allotment of smaller
sites in phase I. All the persons, who had applied for industrial sites
G
., for establishing printing presses were grouped together. They were
considered together. They could not be accommodated in phase II for
want of enough sites. So, another lay-out was formed in phase I. The
grievance of the appellants about the revised policy of the Chandigarh
Administration to allot smaller sites to them, being discriminatory,
was not justified. [168H; 169A-C]
H
160 SUPREME COURT REPORTS [1988] 2 S.C.R.

A Delhi Cloth & General Mills Ltd. v. Union of India, Civil
Appeal No. 223 of 1974, disposed of by this Court on October 8, 1987
and Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and
Ors., [1959 I SCR 279, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 97
B & 98 of 1981.

From the Judgment and Order dated 25.4.1980 of the Punjab 'r
and Haryana High Court in C.W. No. 2512 of 1979.

V.M. Tarkunde and N.S. Das Behl for the Appellants. ~-
c Kapil Sibal, P. Gaur and Jitendra Sharma for the Respondents. ~
.A.
The Judgment of the Court was delivered by

JAGANNATHA SHETTY, J. These appeals by special leave
•
D are directed against the judgment dated April 25, 1980 of the High
Court of Punjab & Haryana in civil writ no. 3512 of 1979.
I-

The revised policy of allotment of industrial sites for the estab-
lishment of printing presses in Chandigarh has been called into
question in the aforesaid writ petition. The printing presses are now
E scattered all over Chandigarh. They are situated either in residential
premises or in small shops in different localities. The Chandigarh
administration wanted them to be located in an industrial area. For
that purpose, they earmarked forty three sites in the industrial area
phase-II. The sites are comparatively of bigger dimensions. In 1975,
the authorities invited applications for allotment of those sites. __
'
I

(
-
F Several persons submitted applications. The appellants in Appeal
No. 97 of 1981 were some of them. They applied with deposit of
earnest money of Rs. 1000 each. That would be ten per cent of the
1
premium payable for the site. All the applications were processed for
final allotment. In the meantime, it is said that the appellants were
called upon to deposit 25 per cent of the premium calculated at the
G rate of Rs. 15 per square yard. The appellants appear to have
complied with that demand also. Since there were more applicants
".
than the sites available, the authorities decided to draw the lots. In
October 1977, the lots were drawn and the lady luck smiled at the -I
appellants. But the authorities did not issue letters of allotment. The
reason was obvious. The authorities had a second look at the scheme
Ji of allotment of sites for printing industries. The authorities wanted to
PARADISE PRINTERS v, UNION TERRITORY [SHETTY, J,] 161
,J,
accommodate as many applicants as possible, But they cm•ld not A
accommodate all those applicants for want of adequate number of
sites in the industrial area phase IL The authorities were also of the
view that for setting up the printing industry, larger sites such as
those earmarked earlier, would not be necessary and smaller sites
would meet the requirements, Consequently, the sites proposed in
the industrial area phase II were given up and a lay out of smaller B
sites in the industrial area phase I was formed, There about 131 of
sites were reserved for allotment to printing press owners,

The appellants and other like applicants were intimated by
letters that the said sites would be allotted at the rate of Rs.35 per
square yard. They were also informed that the allotment would be C
made by draw of lots ori October 3, 1979. The appellants however,
did not participate in the proceedings, They moved the High Court
with a petition under Art. 226 of the Constitution challenging the
revised policy for allotment of smaller sites, It was contended inter alia
that they had a right to take possession of bigger plots in respect of
which the lots were earlier drawn in their favour, The High Court D
issued rule Nisi in the petition, but allowed the authorities to draw
the lots as proposed, The High Court also permitted the appellants to
deposit the premium demanded without prejudice to their rights in
. ,_
.
the writ petition .

That is all at the preliminary hearing of the writ petition, In the E

- f
final hearing the High Court did not give substantial relief to the
appellants. The High Court was of the view that there was nothing

-~
illegal in the revised policy adopted by the Chandigarh administration
since the appellants did not acquire right to get bigger sites in the
industrial area phase II. The High Court however, felt that the
r appellants would be liable to pay only at the rate of Rs, 15 per square
yard and not Rs-35 per square yard, Accordingly a direction was
F

issued to the .authorities.

It is against this judgment that the present appeals have been
preferred, Civil appeal No, 97/81 is by the printing press owners.
Civil Appeal No, 98/81 is by the Chandigarh administration, The G
Chandigarh administration is aggrieved by the direction issued by the
High Court as to the premium to be recovered from the allottees,

We may first dispose of the appeal preferred by the Chandigarh
administration, We do not find any substance in this appeaL If the
applicants had been allotted sites as per the original proposal and as H
162 SUPREME COURT REPORTS [ 1988] 2 S.C.R.

A per the first draw in 1977, they would have been liable to pay only at
the rate of Rs. 15 per square yard. In fact, the other entrepreneurs
who were allotted sites from industrial area phase II paid the premium
only at the rate of Rs. 15 per square yard. Why then there should be a
higher rate payable by these persons. They did not ask for sites in the
Indistrial area phase I. Their applications for sites in the industrial
B area phase II were nut rejected. The same applications appear to
have been considered for sites in the industrial area phase I.
Secondly, the applicants were not responsible for the delay in the
allotment of sites. The delay was entirely due to the change of policy
adopted by the Chandigarh administration. Thirdly, there is no
_) -...
\
evidence that the Chandigarh administration had to incur more
C expenditure for forming new sites in phase I. It is, therefore, not
proper that these applicants should be asked to pay the premium at a
higher rate. The High Court, in our opinion, was justified in directing
the authorities to recover only at rate of Rs.15 per square yard. y

Before considering the contentions urged in the appeal of
D printing press owners, we may briefly refer to the relevant provisions
of the enactment bearing on the contentions. The disposal of building
sites in Chandigarh has been regulated by the Capital of Pun jab
(Development and Regulation) Act, 1952 which may be termed as
"The Act". The Chandigarh Lease Hold of Sites and Building Rules,
1973 are the relevant rules which may be referred to as "The Rules".
E Section 3 of the Act provides power to the authorities to ,sell, lease or
otherwise transfer any land or building belonging to the Government.
They could be disposed of by auction, allotment or otherwise. Rule 4
provides that Chandigarh Administration may demise sites and
building on lease for 99 years. The procedure for allotment has been
prescribed under rule ,8. Rule 8 so far as it is material provides:
F
"Rule 8. Lease by allotment-Procedure for-

( 1) In case of allotment of site or building the
intending lessee shall make an application to the Estate
Officer in Form 'A'.
G
(2) No application under sub-rule ( 1) shall be valid
unless it is accompanied by 10 per cent of the premium as
earnest money in the prescribed form of payment.

(3) When 10 per cent of the premium has been so
H tendered the Estate Officer, shall, subject to such direc-
PARADISE PRINfERS v. UNION lERRITORY [SHE1TY, J.I 163

lions as may be issued by the Chief Administrator in this A
behalf, allot a site of the size applied for or a building or
which particulars are given in the application and shall
intimate, by registered post the number, sector, approxi-
mate area, premium and the rent of the site or building
allotted to the applicant.
B
(4) The applicant shall, unless he refuses to accept

-
the allotment within 30 days of the date of the receipt of
the allotment order, deposit within that period and in the
prescribed mode of payment, further 15 per cent of the
~- premium. The remaining 75 per cent of the premium shall
be paid as provided in Rule 12."
c
The scheme provided under these Rules for allotment of sites is
like this: Sub-rule (1) of Rule 8 provides for making an application to
the Estate Officer for allotment of site. The application shall be
accompanied with 10 per cent of the premium as earnest money. That
amount must be tendered to the Estate Officer. The allotment of a D
site shall be intimated to the applicant by registered letter giving the
particulars of number, sector, approximate area, premium and the
rent of the site or building allotted to the applicant. It would be open
to the applicant to accept the allotment or not. If he accepts the
allotment he must deposit 15 per cent of the premium and the
remaining 75 per cent of the premium shall be paid as provided under E
Rule. 12.

Relying on these provisions, it was urged that the appellants had
a right to obtain transfer of sites in respect of which the lots were first
drawn in their favour. We are unable to accept this contention.
Admittedly, at that stage, there was no intimation of allotment of F
sites to the appellants. There was no official communication to them
as required under sub-rule (3) of Rule 8. Such intimation alone con-
fers right on the appellants to obtain possession of the sites. The inti-
mation must be sent by a registered letter giving particulars of the
.... sites allotted and the premium payable in respect thereof. In the abs-
ence of any such communication, the appellants cannot be held to G
have the right to get transfer of sites in their favour.

The next step in the argument was that the Estate Officer ought
to have allotted the sites upon the receipt of applications ofthe appel-
lants. The reliance was placed and emphasis was put on the word
"shall" used in sub-rule (3) of Rule 8. Sub-rule (3) of Rule 8 provides H
164 SUPREME COURT REPORTS (1988] 2 S.C.R.

A that when 10 per cent of the premium has been tendered, the Estate
Officer shall, subject to such directions as may be issued by the Chief
Administrator in that behalf, allot a site of the size applied for. We
do not think that there is much force in this contention also. Gener-
ally the use of the word "shall" prima facie indicates that the particu-
lar provision is imperative. But that is not always so. The meaning to
B be given to a word depends upon the context in which it is used. The
word takes the colour depending upon the context. We must ask
what does the word mean in its context? We must examine why the
Rule making authority has chosen that word. After examining the
purpose and scope of the rule, we must give such meaning as to ren-
der the rule workable in a fair manner. We must give that meaning
c iswhich would promote the purpose and object of the rule. When there
a choice of meanings, there is a presumption that one which pro-
duces an unjust or inconvenient result was not intended. Let us now
take a brief look at Rule 8. If sub-rule (3) of Rule 8 is construed as
mandatory, then every person who applies for a site with earnest
money must be allotted a site. That means the administration must
D receive only equal number of applications as there are sites available
for allotment. That would be impracticable. The administration can-
not restrict the number of applications to be received when the public
are notified. Secondly, the sites are required to be disposed by auc-
tion or allotment. ff it is by allotment, it should be after considering
all applications. The sites cannot be allotted by private arrangement.
E All the applications received must be considered and if there are
more applications than the available sites, some reasonable pro-
cedure should be adopted for consideration and elimination. In our
opinion, the right of every applicant under sub-rule (3) of Rule 8 is
-
only the right to have his application considered. The acceptance of
application does not create a right for allotment of a site. The word
F "shall" used in sub-rule (3) must, therefore, be considered as not
mandatory. The imperative meaning would defeat the purpose of the
rule.

It was next urged that the Chandigarh administration was estop-
ped from revising the policy of allotment after taking several steps for
G allotment of sites. The steps taken like demanding 25 per cent of the
premium payable and drawing the lots would lead to an assurance
that they would be allotted bigger plots. It was stated that the appel-
lants upon the assurance of getting bigger plots had placed orders for
heavy machinaries for their printing presses. These averments were
also made in the writ petition before the High Court. The High Court
H rejected the plea of estoppel on the ground that there was no evi-
PARADISE PRINTERS v. UNION TERRITORY [SHE1TY, J.] !65

dence of heavy investment on machinaries. Mr. V.M. Tarkunde, A
learned counsel for the appellants urged that there is no need to pro-
> , duce any such evidence to invoke the doctrine of equitable estoppel.
The counsel is right in this aspect. The party invoking the doctrine of
estoppel need not prove any detriment as such. It may be sufficient if
he has relied upon the assurance made to him. This court in the Delhi
Cloth & General Mills Ltd. v. Union of India, (Civil Appeal No. 223 B
of 1974 disposed of on October 8, 1987) to which one of us was a
member, said:

"It is true, that in the formative period, it was gener-
ally said that the doctrine of promissory estoppel cannot
be invoked by the promisee unless he has suffered 'detri- c
ment' or 'prejudice'. It was often said simply, that the
party asserting the estoppel must have been induced to act
to his detriment. But this has now been explained in so
many decisions all over. All that is now required is that
the party asserting the estoppel must have acted upon the
assurance given to him must have relied upon the rep- D
resentation made to him. It means, the party has changed
or altered the position by relying on the assurance or the
representation. The alteration of position by the party is
the only indispensable requirement of the doctrine. It is
not necessary to prove further any damage, detriment or
prejudice to the party asserting the estoppel. The Court, E
however, would compel the opposite party to adhere to
the representation acted upon or abstained from acting .
;• The entire doctrine proceeds on the promise that it is
~-..,-!

reliance based and nothing more."
).,
And said: F

"The concept of detriment as we now understand is
whether it appears unjust, unreasonable or inequitable
that the promisor should be allowed to resile from his
assurance or representation having regard to what the
promisee has done or refrained from doing in reliance on G
the assurance or representation."

It was further said:

"It is however, quite fundamental that the doctrine
of promissory estoppel, cannot be used to compel the H
166 SUPREME COURT REPORTS (1988) 2 S.C.R.

A public bodies or the Government to carry out the rep-
resentation or promise which is contrary to law or which is
outside their authority of power."

In the first place, we do not know under what provision the
authorities asked the appellants to pay 25 per cent of the premium
B payable in respect of the sites even before allotment. Apparently that
procedure appears to be irregular with no statutory sanction.
Secondly, we do not find any Specific assurance or representation
made by the authorities promising to allot the sites applied for.
Thirdly, even if there was any such assurance, we do not think that it
would give rise to the doctrine of promissory estoppel in the instance ·
1'
C case. The authorities cannot give assurance contrary to the statutory
rules. The sites are required to be disposed of by auction, allotment
or sale as per the procedure prescribed. The authorities who are ,
bound by the rules of procedure cannot make any representation or
promise to allot particular sites to the applicants. Even if they make
such promise or assurance, the doctrine of promissory estoppel can-
D not be invoked to compel them to carry out the promise or assur-
ance which is contrary to law.

The next contentton urged for the appellants related to the
revised policy adopted by the Chandigarh administration for allot-
ment of smaller sites. It was said that the sites in phase II ought to
E have been allotted when there were enough to go round the appel-
lants. It was also said that the other entrepreneurs who had filed
applications along with the appellants had been allotted sites in phase
II and there was no good reason to exclude the appellants for being
considered for smaller sites in phase I. The procedure followed by the
authorities has been assailed as arbitrary and contrary to Art. 14 of
F the Constitution. Of course, if there were enough plots to accommo-
date all the applicants in the industrial area phase II, it would not be
proper for the authorities to revise the policy and allot smaller sites in
phase I. But no material has been placed before us to come to the
conclusion that there were enough industrial plots to accommodate as
far as possible all those applicants. It appears from the record that
G the authorities for want of plots in phase II formed another lay out in
pha'se I. The action of the authorities appears to be bona fide and we
have no reason to doubt it.

This takes us to the question whether the revised policy
adopted by the Chandigarh administration to allot smaller sites to
H these appellants was discriminatory and violative of Art. 14 of the
PARADISE PRINTERS v. UNION TERRITORY [SHETTY, J.J 167

Constitution. The true meaning and scope of Art. 14 has been stated A
and restated in a string of decisions of this Court. It is now well
established that Art. 14 forbids class legislation, but does not forbid
reasonable classification for the purpose of legislation. In order, how-
ever, to pass the test of permissible classification two conditions must
be fulfilled, namely, (i) that the classification must be founded on an
intelligible differentia which distinguishes persons or things that are B
grouped together from others left out of the group; and (ii) that the
differentia must have a rational relation to the object sought to be
achieved by the statute in question. The classification may be
( founded on different basis, namely, geographical or according to
, · - objects or occupations or the like. What is necessary is that there
. must be a nexus between the basis of classification and the object of c
the Act under consideration. S.R. Das, C.J. speaking for this Court
in Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar & Others,
[1959] SCR 279 has formulated the various aspects of Art. 14 and out
of them, we may refer to the following proposition:

(a) Art. 14 condemns discrimination not only by substantive law D
but by a law of procedure,

(b) Art. 14 forbids class legislation but does not forbid classi-
fication,

(c) In permissible classification, mathematical nicety and per- E
feet equality are not required,

~)\ ( d) The classification may be founded on different basis,
namely, geographical or according to objects or occupations or
-. the like,
F
(e) If a law deals equally with members of a well defined class,
it is not obnoxious and it is not open to the charge of denial of
equal protection on the ground that it has no application to
other persons, and

(f) Even a single individual may form a class by himself on ac- G
count of some special circumstances or reason applicable to him
and not applicable to others.

This Court speaking through Chandrachud, CJ. in Re The ·
Special Courts Bill, 1978 (1979 2 SCR 476) reformulated in detail
the propositions on Art. 14. The following are relevant for the H
168 SUPREME COURT REPORTS [1988] 2 S.C.R.

A present case and may be extracted:

(i) The constitutional command to the State to afford
equal protection of its law sets a goal not attainable by the in-
vention and application of a precise formula. Therefore, clas-
sification need not be constituted by an exact or scientific exclu-
B sion or inclusion of persons or things. The Courts should not
insist on delusive exactness or apply doctrinaire tests for
determining the validity of classification in any given case. Clas-
sification is justified if it is not palpably arbitrary.

(ii) The law can make and set apart the classes according
to the needs and exigencies of the society and as suggested by
c experience. It can recognise even a degree of evil, but the clas-
sification should never be arbitrary, artificial or evasive.

(iii) The classification must not be arbitrary but must be
rational, that is to say, it must not only be based on some qual-
D ities or characteristics which are to be found in all the persons
grouped together and not in others who are left out but those
qualities or characteristics must have a reasonable relation to
the object of the legislation.

There is yet another facet of Art. 14. This Court speaking
E through Bhagwati, J. in E.P. Royappa v. State of Tamil Nadu, [1974]
2 SCR 348-AIR 1974 SC 555) and in Maneka Gandhi case (AIR
1978 SC 597) held that the basic principle which informs both Arts.
14 and 16 is equality and inhibition against discrimination. Equality
and arbitrariness are sworn enemies, one belongs to the rule of law in
a republic while the other to the whim and caprise of an absolute
F monarch. Where an act is arbitrary, it is implicit in it that it is
unequal both according to political logic and constitutional law and
is, therefore, violative of Art. 14. Articles 14 and 16 strike at
arbitrariness in State action and ensure fairness and equality of treat-
ment. This, in our opinion, is more fundamental. Article 14 unlike
other articles in Part III of the Constitution, is an injunction against
G the State that it shall not discriminate person to person unless the
action is supported by well-known principles.

There is thus no doubt or dispute about the principles. The
question is only the application of the principles to a given case. In
the present case, however, we do not find that the revised policy of
H the Chandigarh administration suffers from any act of arbitrariness
PARADISE PRINTERS v. UNION TERRITORY (SHETIY, J.( 169

either in classifying the appellants as a separate group or in consider- A
ing them for allotment of smaller sites in phase I. The appellants
;, ' formed a separate class. All the persons who have applied for indust-
rial sites for establishing printing presses were grouped togdher.
They were considered together. They could not have been accommo-
dated in phase II for want of enough sites. So another lay out was B
formed in phase I. We are told that most of the applicants have now
been allotted sites and they have since taken possession. The appel-
lants were also allotted sites in phase I. We are, therefore, of the
opinion that the grievance of the appellants about discrimination is
not justified on the facts and circumstances of the case.

In the result, both the appeals fail and are dismissed, but we C
make no order as to costs,

S.L. Appeals dismissed.