Doctrine of Subrogation : Supreme Court explains

The Constitutional Bench of the Supreme Court has recently explained the concept of subrogation in a contract of insurance. The full text of the Judgment is available below. Certain excerpts are reproduced below;

17. The principles relating to subrogation can therefore be summarized thus :

(i) Equitable right of subrogation arises when the insurer settles the claim of the assured, for the entire loss. When there is an equitable subrogation in favour of the insurer, the insurer is allowed to stand in the shoes of the assured and enforce the rights of the assured against the wrongdoer. 

(ii) Subrogation does not terminate nor puts an end to the right of the assured to sue the wrong-doer and recover the damages for the loss. Subrogation only entitles the insurer to receive back the amount paid to the assured, in terms of the principles of subrogation.

(iii) Where the assured executes a Letter of Subrogation, reducing the terms of subrogation, the rights of the insurer vis-à-vis the assured will be governed by the terms of the Letter of Subrogation.

(iv) A subrogation enables the insurer to exercise the rights of the assured against third parties in the name of the assured. Consequently, any plaint, complaint or petition for recovery of compensation can be filed in the name of the assured, or by the assured represented by the insurer as subrogee-cum-attorney, or by the assured and the insurer as co-plaintiffs or co-complainants. 

(v) Where the assured executed a subrogation-cum-assignment in favour of the insurer (as contrasted from a subrogation), the assured is left with no right or interest. Consequently, the assured will no longer be entitled to sue the wrongdoer on its own account and for its own benefit. But as the instrument is a subrogation-cum-assignment, and not a mere assignment, the insurer has the choice of suing in its own name, or in the name of the assured, if the instrument so provides. The insured becomes entitled to the entire amount recovered from the wrongdoer, that is, not only the amount that the insured had paid to the assured, but also any amount received in excess of what was paid by it to the assured, if the instrument so provides.

18. We may clarify the position with reference to the following illustration: The loss to the assured is Rs.1,00,000/-. The insurer settles the claim of the assured for Rs.75,000/-. The wrong-doer is sued for recovery of Rs.1,00,000/-. Where there is no letter of subrogation and insurer relies on the equaitable doctrine of subrogation (The suit is filed by the assured)

(i) If the suit filed for recovery of Rs.100,000/- is decreed as prayed, and the said sum of Rs.1,00,000/- is recovered, the assured would appropriate Rs. 25,000/- to recover the entire loss of Rs. 100,000/- and the doctrine of subrogation would enable the insurer to claim and receive the balance of Rs.75,000

(ii) If the suit filed for recovery of Rs.100,000/- is decreed as prayed for, but the assured is able to recover only Rs.50,000/- from the Judgment-Debtor (wrong-doer), the assured will be entitled to appropriate Rs.25,000/- (which is the shortfall to make up Rs.100,000/- being the loss) and the insurer will be entitled to receive only the balance of Rs. 25,000/- even though it had paid Rs. 75,000/- to the assured. 

(iii) Where, the suit is filed for recovery of Rs.100,000/- but the court assesses the loss actually suffered by the assured as only Rs.75,000/- (as against the claim of the assured that the value of goods lost is Rs.100,000/-) and then awards Rs.75,000/- plus costs, the insurer will be entitled to claim and receive the entire amount of Rs.75,000/- in view of the doctrine of subrogation. Where the assured executes a letter of subrogation entitling the insurer to recover Rs. 75,000/- (The suit is filed in the name of the assured or jointly by the assured and insurer).

(iv) If the suit is filed for recovery of Rs.1,00,000/-, and if the court grants Rs.1,00,000/-, the insurer will take Rs.75,000/- and the assured will take Rs.25,000/. 

(v) If the insurer sues in the name of the assured for Rs.75,000/- and recovers Rs.75,000/-, the insurer will retain the entire sum of Rs.75,000/- in pursuance of the Letter of Subrogation, even if the assured has not recovered the entire loss of Rs.1,00,000/-. If the assured wants to recover the balance of the loss of Rs.25,000/- as he had received only Rs. 75,000/- from the insurer, the assured should ensure that the claim is made against the wrongdoer for the entire sum of Rs.100,000/- by bearing the proportionate expense. Otherwise the insurer will sue in the name of the assured for only for Rs. 75,000/-. 

(vi) If the letter of subrogation executed by the assured when the insurer settles the claim of the assured uses the words that the “assured assigns, transfers and abandons unto the insurer, the right to get Rs.75,000/- from the wrong-doer”, the document will be a ‘subrogation’ in spite of the use of words ‘transfers, assigns and abandons’. This is because the insurer has settled the claim for Rs.75,000/- and the instrument merely entitles the insurer to receive the said sum of Rs.75,000/- which he had paid to the assured, and nothing more. Where the assured executes a letter of subrogation-cum-assignment for Rs.100,000/-

(vii) If the document executed by the assured in favour of the insured provides that in consideration of the settlement of the claim for Rs.75,000/-, the assured has transferred and assigned by way of subrogation and assignment, the right to recover the entire value of the goods lost and retain the entire amount without being accountable to the assured for any excess recovered (over and above Rs.75,000/-) and provides that the insurer may sue in the name of the assured or sue in its own name without reference to the assured, the instrument is a subrogation-cum-assignment and the insurer has the choice of either suing in the name of the assured or in its own name. Where the assured executes a letter of assignment in favour of a third party to sue and recover from the carrier, the value of the consignment

(viii) If the assured, having received Rs.75,000/- from the insurer, executes an instrument in favour of a third party (not being the insurer) assigning the right to sue and recover from the carrier, damages for loss of the consignment, such a document will be an Assignment. The assignee cannot file a complaint before the consumer fora, as he is not a ‘consumer’. Further, such a document being a transfer of a mere right to sue, will be void and unenforceable, having regard to section 6(e) of Transfer of Property Act, 1882. It is well settled that a right to sue for unliquidated damages for breach of contract or for tort, not being a right connected with the ownership of any property, nor being a right to sue for a debt or actionable claim, is a mere right to sue and is incapable of being transferred.

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Writ of Mandamus - Nature and ambit: Supreme Court explains

The Supreme Court has explained the nature and scope of the writ of Mandamus. The Judgment below contains the entire law relating to the nature, scope and ambit of the writ of Mandamus under Article 226 of the Constitution of India.

35. While dismissing the writ petition the Hon’ble High Court with respect, had taken a rather restricted view of the writ of Mandamus. The writ of Mandamus was originally a common law remedy, based on Royal Authority. In England, the writ is widely used in public law to prevent failure of justice in a wide variety of cases.

36. In England this writ was and still remains a prerogative writ. In America it is a writ of right. (Law of Mandamus by S.S. Merrill, Chicago, T.H. Flood and Company, 1892, para 62, page 71). 

37. About this writ, SA de Smith in ‘Judicial Review of Administrative Action’, 2nd edn., pp 378 & 379 said that this writ was devised to prevent disorder from a failure of justice and defect of police and was used to compel the performance of a specific duty.

38. About this writ in 1762 Lord Mansfield observed that ‘within the past century it had been liberally interposed for the benefit of the subject and advancement of justice’.

39. The exact observations of Lord Mansfield about this writ has been quoted in Wade’s ‘Administrative Law, Tenth Edition’ and those observations are still relevant in understanding the scope of Mandamus. Those observations are quoted below:-

“It was introduced, to prevent disorder from a failure of justice, and defect of police. Therefore it ought to be used upon all occasions where the law has established no specific remedy, and where in justice and good government there ought to be one…..The value of the matter, or the degree of its importance to the public police, is not scrupulously weighed. If there be a right, and no other specific remedy, this should not be denied. Writs of mandamus have been granted, to admit lecturers, clerks, sextons, and scavengers & c., to restore an alderman to precedency, an attorney to practice in an inferior court,& c.” (H.W.R. Wade & C.F. Forsyth: Administrative Law, 10th Edition, page 522-23).

40. De Smith in Judicial Review, Sixth Edition has also acknowledged the contribution of Lord Mansfield which led to the development of law on Writ of Mandamus. The speech of Lord Mansfield in R Vs. Blooer, (1760) 2 Burr, runs as under:

“a prerogative writ flowing from the King himself, sitting in his court, superintending the police and preserving the peace of this country”.(See De Smith’s Judicial Review 6th Edition, Sweet and Maxwell page 795 para 15-036.)

41. Almost a century ago, Darling J quoted the observations in Rex Vs. The Justices of Denbighshire, (1803) 4 East, 142, in The King Vs. The Revising Barrister etc. {(1912) 3 King’s Bench 518} which explains the wide sweep of Mandamus. The relevant observations are:

“..Instead of being astute to discover reasons for not applying this great constitutional remedy for error and misgovernment, we think it our duty to be vigilant to apply it in every case to which, by any reasonable construction, it can be made applicable….” (See page 529)

42. At page 531 of the report, Channell, J said about Mandamus: “It is most useful jurisdiction which enables this Court to set right mistakes”.

43. In Dwarka Nath Vs. Income Tax Officer, Special Circle, D. Ward, Kanpur and another – AIR 1966 SC 81, a three-judge Bench of this Court commenting on the High Court’s jurisdiction under Article 226 opined that this Article is deliberately couched in comprehensive language so that it confers wide power on High Court to ‘reach injustice wherever it is found’.

44. Delivering the judgment Justice Subba Rao (as His Lordship then was) held that the Constitution designedly used such wide language in describing the nature of the power. The learned Judge further held that the High court can issue writs in the nature of prerogative writs as understood in England; but the learned Judge added that the scope of these writs in India has been widened by the use of the expression “nature”.

45. Learned Judge made it very clear that the said expression does not equate the writs that can be issued in India with those in England but only draws an analogy from them. The learned Judge then clarifies the entire position as follows: 

“..It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country. Any attempt to equate the scope of the power of the High Court under Article 226 of the Constitution with that of the English Courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of Government to a vast country like India functioning under a federal structure. Such a construction defeats the purpose of the article itself….” (See para 4, page 85)

46. Same view was also expressed subsequently by this Court in J.R. Raghupathy etc. Vs. State of A.P. and Ors. – AIR 1988 SC 1681. Speaking for the Bench, Justice A.P. Sen, after an exhaustive analysis of the trend of Administrative Law in England, gave His Lordship’s opinion in paragraph (29) at page 1697 thus:

“29. Much of the above discussion is of little or academic interest as the jurisdiction of the High Court to grant an appropriate writ, direction or order under Article 226 of the Constitution is not subject to the archaic constraints on which prerogative writs were issued in England. Most of the cases in which the English courts had earlier enunciated their limited power to pass on the legality of the exercise of the prerogative were decided at a time when the Courts took a generally rather circumscribed view of their ability to review Ministerial statutory discretion. The decision of the House of Lords in Padfield’s case (1968 AC 997) marks the emergence of the interventionist judicial attitude that has characterized many recent judgments.” 

47. In the Constitution Bench judgment of this Court in Life Insurance Corporation of India vs. Escorts Limited and others, [(1986) 1 SCC 264], this Court expressed the same opinion that in Constitution and Administrative Law, law in India forged ahead of the law in England (para 101, page 344).

48. This Court has also taken a very broad view of the writ of Mandamus in several decisions. In the case of The Comptroller and Auditor General of India, Gian Prakash, New Delhi and another Vs. K.S. Jagannathan and another – (AIR 1987 SC 537), a three-Judge Bench of this Court referred to Halsbury’s Laws of England, Fourth Edition, Volume I paragraph 89 to illustrate the range of this remedy and quoted with approval the following passage from Halsbury about the efficacy of Mandamus: “..is to remedy defects of justice and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right, and it may issue in cases where, although there is an alternative legal remedy yet that mode of redress is less convenient beneficial and effectual.” (See para 19, page 546 of the report)

49. In paragraph 20, in the same page of the report, this Court further held: “…and in a proper case, in order to prevent injustice resulting to the concerned parties, the Court may itself pass an order or give directions which the Government or the public authority should have passed or given had it property and lawfully exercised its discretion”

50. In a subsequent judgment also in Shri Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust and Ors. Vs. V .R. R udani and Ors. – AIR 1989 SC 1607, this Court examined the development of the law of Mandamus and held as under:

“21. ……….mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, Professor De Smith states: “To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter common law, custom or even contract.” (Judicial Review of Administrative Act 4th Ed. P. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available ‘to reach injustice wherever it is found’. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition.” (See page 1613 para 21).

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Doctrine of Pith and Substance : Supreme Court explains

This decision reviews and explains the Doctrine of Pith & Substance, as applicable in India; 

35. One of the proven methods of examining the legislative competence of a legislature with regard to an enactment is by the application of the doctrine of pith and substance. This doctrine is applied when the legislative competence of the legislature with regard to a particular enactment is challenged with reference to the entries in various lists. If there is a challenge to the legislative competence, the courts will try to ascertain the pith and substance of such enactment on a scrutiny of the Act in question. In this process, it is necessary for the courts to go into and examine the true character of the enactment, its object, its scope and effect to find out whether the enactment in question is genuinely referable to a field of the legislation allotted to the respective legislature under the constitutional scheme. This doctrine is an established principle of law in India recognized not only by this Court, but also by various High Courts. Where a challenge is made to the constitutional validity of a particular State Act with reference to a subject mentioned in any entry in List I, the Court has to look to the substance of the State Act and on such analysis and examination, if it is found that in the pith and substance, it falls under an entry in the State List but there is only an incidental encroachment on any of the matters enumerated in the Union List, the State Act would not become invalid merely because there is incidental encroachment on any of the matters in the Union List.

36. A Constitution Bench of this Court in A.S. Krishna v. State of Madras [AIR 1957 SC 297], held as under: 

“8. … But then, it must be remembered that we are construing a federal Constitution. It is of the essence of such a Constitution that there should be a distribution of the legislative powers of the Federation between the Centre and the Provinces. The scheme of distribution has varied with different Constitutions, but even when the Constitution enumerates elaborately the topics on which the Centre and the States could legislate, some overlapping of the fields of legislation is inevitable. The British North America Act, 1867, which established a federal Constitution for Canada, enumerated in Sections 91 and 92 the topics on which the Dominion and the Provinces could respectively legislate. Notwithstanding that the lists were framed so as to be fairly full and comprehensive, it was not long before it was found that the topics enumerated in the two sections overlapped, and the Privy Council had time and again to pass on the constitutionality of laws made by the Dominion and Provincial Legislatures. It was in this situation that the Privy Council evolved the doctrine, that for deciding whether an impugned legislation was intra vires, regard must be had to its pith and substance. That is to say, if a statute is found in substance to relate to a topic within the competence of the legislature, it should be held to be intra vires, even though it might incidentally trench on topics not within its legislative competence. The extent of the encroachment on matters beyond its competence may be an element in determining whether the legislation is colourable, that is, whether in the guise of making a law on a matter within it competence, the legislature is, in truth, making a law on a subject beyond its competence. But where that is not the position, then the fact of encroachment does not affect the vires of the law even as regards the area of encroachment.”

37. Again, a Constitutional Bench of this Court while discussing the said doctrine in Kartar Singh v. State of Punjab [(1994) 3 SCC 569] observed as under:

“60. This doctrine of ‘pith and substance’ is applied when the legislative competence of a legislature with regard to a particular enactment is challenged with reference to the entries in the various lists i.e. a law dealing with the subject in one list is also touching on a subject in another list. In such a case, what has to be ascertained is the pith and substance of the enactment. On a scrutiny of the Act in question, if found, that the legislation is in substance one on a matter assigned to the legislature enacting that statute, then that Act as a whole must be held to be valid notwithstanding any incidental trenching upon matters beyond its competence i.e. on a matter included in the list belonging to the other legislature. To say differently, incidental encroachment is not altogether forbidden.”

38. It is common ground that the State Legislature does not have power to legislate upon any of the matters enumerated in the Union List. However, if it could be shown that the core area and the subject-matter of the legislation is covered by an entry in the State List, then any incidental encroachment upon an entry in the Union List would not be enough so as to render the State law invalid, and such an incidental encroachment will not make the legislation ultra vires the Constitution.

39. In Bharat Hydro Power Corpn. Ltd. v. State of Assam [(2004) 2 SCC 553], the doctrine of pith and substance came to be considered, when after referring to a catena of decisions of this Court on the doctrine it was laid down as under:

“18. It is likely to happen from time to time that enactment though purporting to deal with a subject in one list touches also on a subject in another list and prima facie looks as if one legislature is impinging on the legislative field of another legislature. This may result in a large number of statutes being declared unconstitutional because the legislature enacting law may appear to have legislated in a field reserved for the other legislature. To examine whether a legislation has impinged on the field of other legislatures, in fact or in substance, or is incidental, keeping in view the true nature of the enactment, the courts have evolved the doctrine of ‘pith and substance’ for the purpose of determining whether it is legislation with respect to matters in one list or the other. Where the question for determination is whether a particular law relates to a particular subject mentioned in one list or the other, the courts look into the substance of the enactment. Thus, if the substance of the enactment falls within the Union List then the incidental encroachment by the enactment on the State List would not make it invalid. This principle came to be established by the Privy Council when it determined appeals from Canada or Australia involving the question of legislative competence of the federation or the States in those countries. This doctrine came to be established in India and derives its genesis from the approach adopted by the courts including the Privy Council in dealing with controversies arising in other federations. For applying the principle of ‘pith and substance’ regard is to be had (i) to the enactment as a whole, (ii) to its main objects, and (iii) to the scope and effect of its provisions. For this see Southern Pharmaceuticals & Chemicals v. State of Kerala [(1981) 4 SCC 391], State of Rajasthan v. G. Chawla [AIR 1959 SC 544], Amar Singhji v. State of Rajasthan [AIR 1955 SC 504], Delhi Cloth and General Mills Co. Ltd. v. Union of India [(1983) 4 SCC 166] and Vijay Kumar Sharma v. State of Karnataka [(1990) 2 SCC 562]. In the last-mentioned case it was held:

‘(3) Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential.’"

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Master Plan 2021 : Concept and Law explained By Delhi High Court

The Delhi High Court recently dealt with the precarious Delhi Master Plan 2021 and examined the legal position with regard to the Master Plan, in general, as well as the Master Plan 2021, as applicable to Delhi. Some excerpts of the Judgment are reproduced below;

37. The settled law as regards the sanctity of master plan norms as explained in several decisions of the Supreme Court and the High Courts may be noticed. In Dr. G.N. Khajuria v. Delhi Development Authority, AIR 1996 SC 253 the Supreme Court disapproved of the conversion of an area meant for a park for the use of a school. The Court on that occasion observed as under: 

“the land which was allotted to respondent No. 2 was part of a Park. We further hold that it was not open to the DDA to carve out any space meant for park of a nursery school. We are of the considered view that the allotment in favour of respondent No. 2 was misuse of power, for reasons which need not be adverted. It is, therefore, a fit case, according to us, where the allotment in favour of respondent No. 2 should be cancelled and we order accordingly. The fact that respondent No. 2 has put up some structure stated to be permanent by his counsel is not relevant, as the same has been done of a plot of land allotted to it in contravention of law. As to the submission that dislocation from the present site would cause difficulty to the tiny tots, we would observe that the same has been advanced only to get sympathy from the Court inasmuch as children, for whom the nursery school is meant, would travel to any other nearby place where such a school would be set up either by respondent No. 2 or by any other body.” 

38. The inviolability of the provisions of a statutory Master Plan was explained by the Supreme Court inBangalore Medical Trust v. B.S. Muddappa (1991) 4 SCC 54. It explained the legal position thus (SCC, p. 69):

”The scheme is a statutory instrument which is administrative legislation involving a great deal of general law-making of universal application, and it is not, therefore, addressed to individual cases of persons and places. Alteration of the scheme must be for the purpose of improvement and better development of the City of Bangalore and adjoining areas and for general application for the benefit of the public at large. Any alteration of the scheme with a view to conferring a benefit on a particular person, and without regard to the general good of the public at large, is not an improvement contemplated by the section.” 

In the same decision it was further emphasized that a space earmarked for a particular purpose under the Master Plan cannot be used for any other. It was observed (SCC, p. 70, 75): 

“………once appropriated or applied or earmarked by formation of 'open spaces' or for building purposes or other development in accordance with a duly sanctioned scheme should not be used for any other purpose unless the scheme itself, which is statutory in character, is formally altered in the manner that the BDA as a body corporate is competent to alter. This section, of course, empowers the BDA to lease or sell or otherwise transfer any property. But that power has to be exercised consistently with the appropriation or application of land for formation of 'open spaces' or for building purposes or any other development scheme sanctioned by the Government. Property reserved for open space in a duly sanctioned scheme cannot be leased or sold away unless the scheme itself is duly altered. Any unauthorised deviation from the duly sanctioned scheme by sacrificing the public interest in the preservation and protection of the environment by means of open space for parks and play grounds and 'ventilation' will be contrary to the legislative intent, and an abuse of the statutory power vested in the authorities…..”

“Protection of the environment, open spaces for recreation and fresh air, play grounds for children, promenade for the residents, and other conveniences or amenities are matters of great public concern and of vital interest to be taken care of in a development scheme. It is that public interest which is sought to be promoted by the Act by establishing the BDA. The public interest in the reservation and preservation of open spaces for parks and play grounds cannot be sacrificed by leasing or selling such sites to private persons for conversion to some other user. Any such act would be contrary to the legislative intent and inconsistent with the statutory requirements. Furthermore, it would be in direct conflict with the constitutional mandate to ensure that any State action is inspired by the basic values of individual freedom and dignity and addressed to the attainment of a quality of life which makes the guaranteed rights a reality for all the citizens."

39. In Panchsheel Enclave Residents v. UOI, 2002 (6) AD (Delhi) 641 (DB) the court prohibited the carrying on of construction in the vicinity of ancient monuments Blocks A and A1 of Panchsheel Enclave which fell in an area declared as a green belt. In EC Pocket Maya Enclave Residents Welfare Association v. Delhi Development Authority (decision dated 28.8.2006 in WP (C) Nos. 10546-51/2006) the residents of EA, EB and EC Blocks of Maya Enclave complained that part of an area meant for a park had been allotted to the third respondent, IGL, for the purpose of constructing a "CNG mega bus filling station". This Court held: 

“The DDA seems to have proceeded on the assumption that the Zonal Plans having been changed, there was no need to inquire further, and the area could be allotted for use of a mega gas filling station. While the need to have such a station cannot be doubted, the balancing of relevant considerations, such as the developed nature of the park, the substantial amounts expended to maintain it, every year, its use by residents all these years, security and safety concerns on account of the populace and structures, including residences and educational institution in its vicinity, and the likely impact of such a gas station on the persons living or using the area, had to be necessarily balanced, particularly in the light of the Central Government's directive not to use any developed park for setting up a petrol pump.” “The decision to allot the land for use by IGL as petrol pump, cannot be sustained.”

40. In Vivek Srivastava v.Union of India, 2005 (3) AWC 2897 the petitioners contended that the respondents were planning to construct residential buildings in the "Polo Ground" which had remained an open land for the last hundred years. The petitioner alleged that the polo ground acted as the lungs for the citizens of Allahabad and if the residential buildings were allowed to be constructed thereon, the “lungs” would get choked. Further, the constructions would disturb the ecology and create a serious imbalance in the environment of the city. Accepting these contentions, the Allahabad High Court held: “the land in question known as 'Old Polo Ground' measuring approximately 22.77 acres of land, should not be used for the residential construction for the married accommodation project for the married officers of the Army.” Consequently, a writ of mandamus was issued to the respondents, restraining them from making any construction on the Polo ground and maintain it as an open piece of land. In D.D. Vyas v. Ghaziabad Development Authority, Ghaziabad, AIR 1993 All 57 the grievance of the petitioners, who belonged to a locality where the Adu Park was situated, was that though the said area was earmarked for being developed as a public park, the G.D.A. had taken no steps to develop it as a public park. Further the respondents were seeking to carve out plots in such open space in the plan and sell them for huge profits. The attempt by the G.D.A. to alter the plan for that purpose was challenged. Accepting the petition, the High Court held: “Neither the Authority nor can the State Government amend the plan in such a way so as to destroy its basic feature allowing the conversion of open spaces meant for public parks.”

41. The Andhra Pradesh High Court has consistently held that attempts at changing the use of green areas to commercial and other purposes in the layout plans would be impermissible in law. In Sri Ramakrishna Educational Society v. Chairman, Nandyal Municipality, 2006 (3) ALD 242, it was held by the High Court of Andhra Pradesh that an area earmarked as playground in the layout plan could be used by the residents of Nandyal Town for the purpose of children's games and sports, for a walking track, growing tree clusters or as a common meeting place. It was held that “once the layout was approved considering the playground is part of the common area, the same cannot be converted into a business/commercial area by allowing a Rythu Bazar. Such conversion is impermissible in law.” InBhagya Nagar Colony Welfare Association v. Government of A.P., 2003 (4) ALD 74 multi-storeyed residential complexes/group housing were constructed and houses were allotted in a portion of the land admeasuring 2,897 sq. yards which had been earmarked as a park/open space. It was held by the High Court of Andhra Pradesh that the “Municipality shall immediately take action for demolishing and dismantling all structures, which have come up in the open area admeasuring 2897 sq. yards in the layout approved by the Hyderabad Urban Development Authority, whatever be the amount spent on such structures, forthwith.” The court however made an exception for a temple. It said: “The actual area occupied by Shirdi Sai Baba Temple shall be excluded and other structures, be it, temporary or permanent, shall also be dismantled and removed forthwith. The area of about 2,597 sq, yards after excluding 300 sq. yards occupied by the temple shall be developed as a park.” In Co-operative Housing Society, Saleemnagar Limited v. Municipal Corporation of Hyderabad and others, 2001 (5) ALD 663 the first respondent had, instead of developing the area as a park, leased out about 1800 square yards of the park site to the second respondent for construction of school. Some other encroachments were also made in the said area. The first respondent was directed to take appropriate steps for removal of the encroachments in accordance with law and restore the park to its original position. 

42. In Mittakola Venkata Rama Rao v. Sarpanch, Grampanchayath, 1998 (6) ALD 343 it was held: “The Gram Panchayat cannot convert a part of the public park into a commercial complex and such construction would definitely have the effect of polluting the environment and ecology of the park and the town.” The park had been in existence for more than 70 years and also had a historical importance, which had “to be preserved not only by the Gram Panchayat, but by every citizen of Mahaboobabad and in fact they should be proud of such a park and if necessary it is their duty to develop the park into a beautiful park, so that the people of the area, including the children may go and relax during their off time.” In P. Venkateswarlu v. Govt. of Andhra Pradesh, 2001 (6) ALD 533 the action of respondents 1 to 4 in permitting respondents 5 to 8 to construct a multi-storeyed commercial complex in an open space reserved for park, according to sanctioned layout, was held to be illegal. It was observed:

“The Court while considering such a matter is not concerned with the consequences particularly where it concerns ecology. A park provides for some lung space. It is well settled that the community requires certain lung space and may also use open space for sports and other recreational activities. Parks or wetlands are also necessary for the purpose of maintaining ecological balance. The doctrine of public trust applies in relation to park wherefor the open space is earmarked for the purpose of park, and it becomes the statutory duty of the local authorities and other statutory bodies to maintain the same. The authorities of the Board have no right to do away therewith unless the Master Plan is modified in terms of the provisions of Section 12 of the 1975 Act read with Rules 13 and 13-A of the 1977 Rules. The Development Act, as noticed hereinbefore, envisages preparation of a Master Plan, which consists of various zones-the user of such zone is specified therein. Stages of development are also specified. A planned development is contemplated under the Master Plan and Zonal Development Plans. While doing so, larger public interest must be kept in view. A creature of a statute therefore cannot be permitted to violate the provisions of the Act whereunder it was created."

43. In Harijan Layout Sudhar Samiti v. The State of Maharashtra (1997) 99 Bom LR 434 the Bombay High Court held that the action of the respondents in Nagpur converting areas earmarked for green belt/open space for housing purposes and allotting it to the respondent No. 8was not permissible. It was observed that: “neither the Development Authority nor the State Government can amend the plan, in such a way, so as to destroy its basic feature, allowing the conversion of open space meant for public parks.” It was further observed: “Undisputedly, the City of Nagpur is one of the crowded city where the resident do not get anything but atmosphere polluted by smoke and fumes emitted by endless vehicle traffics. Besides this, the pollution is being caused by 'Koradi Thermal Powers house'. Hence, the importance of public parks, plantations and creation places cannot be under estimated. The Public Park is a gift of modern civilisation and is a significant factor, in the improvement of quality of life. It is, thus, clear that the action of the respondents.1 to 7, being inconsistent with and contrary to the legislative intent to safeguard the health, safety and general welfare of the people of the locality, the orders smack colourable exercise of powers and are opposed to the statutory scheme. Thus, it is a fit case, to issue writ of mandamus as prayed by the petitioners.”

44. In Modern Educational and Cultural Society v. Nizam, RLW 2007 (4) Raj 3214 the allotment of an open space reserved as per approved scheme under Rajasthan Urban Areas (Sub-Division, Reconstruction and Improvement of Plots) Rules, 1975 by the Jaipur Development Authority to a private person/body for a school was held by the Single Judge to be illegal. The Division Bench in Nizam v. Jaipur Development Authority, AIR 1994 Raj 87 affirmed this and held: “The action of JDA in making allotment of the site in question in favour of Modern School to establish a school is invalid and without jurisdiction, being contrary to the legislative intent to safeguard healthy, safety and general welfare the people of the locality. It was also opposed to the statutory Scheme/ Plan.” In Rajasthan Housing Board Shopping Centre Vikas Samiti v. State of Rajasthan, RLW 2006 (1) Raj 588 the grievance was that the respondents were permitting vegetable vendors to construct shops in Park-A in Shastri Nagar, Jaipur. The Court held: “There is no dispute the park-A was a facility area and further the Housing Board has not revised the scheme under Sections 29, 30 and 32 of the Housing Board provisions which was published in Gazette. The alleged allotment/permission is also contrary to the scheme as well as the provisions of the Housing Board and later on transfer of maintenance to the Municipal Corporation will also not give any right to the Municipal Corporation to issue the allotment order or grant permission to construct the platform.“ The action of the respondents was held to be illegal.

45. In President, Kanan Vihar Development Societyv. State of Orissa, 2008 (II) OLR 677 the Orissa High Court observed: “In case a particular area has been earmarked to be left as open space for public park in order to achieve the environmental equilibrium, it should not be altered by any means by any authority unless there were compelling circumstances and the procedure prescribed by law has to be followed for the same.” 

46. For an instance of courts not permitting an underground water treatment plant in a park, reference may be made to the decision of the Court of Appeals of New York in Friends of Van Cortlandt Park v. City of New York 95 N.Y.2D 623, 630. The court was informed that the public would be deprived of the use of the park for five years during which the water treatment plant would be constructed and thereafter the park would be restored. That court held that prior legislative approval of the change in user was mandatory even if the proposal was that the park would ultimately be restored. Referring to the decision in Williams v. Gallatin 229 NY 248 the Court of appeals invoked the “public trust” and said: “Though the water treatment plant plainly serves an important public purpose – indeed eve the State Attorney General believes it should be built at the site selected – our law is well settled: dedicated parks in New York are impressed with a public trust for the benefit of the people of the State. Their „use for other than park purposes, either for a period of years or permanently, requires the direct and specific approval of the State legislature, plainly conferred‟.” Our Supreme Court too has reiterated the public trust doctrine as forming part of the environmental jurisprudence in this country (See generally M.C.Mehta v. Kamal Nath (1997) 1 SCC 388).

See the Full text of the Judgment.