NAGAPPA Vs. STATE

JUDGEMENT

(1.) Basically, the cancellations of contracts subject to continuing certain works are challenged in these writ petitions. By an executive order government resolved to build 1,75,000 houses in rural areas of the State and 30,000 houses in urban areas; in addition 30,000 houses were to be put up in Bangalore urban area. This scheme is referred to as 'Ashraya Scheme', under the order dated 4-11-1991. Houses were also to be constructed under another scheme referred to as 'Dr. B. R. Ambedkar Centenary Celebrations Memorial Scheme'. The Government entrusted the responsibility of constructing these houses with the Karnataka Housing Board (referred to as 'the Board'). These houses were to be allotted to those belonging to economically weaker sections; the houses were to cost Rs. 15,000/- each in rural areas and Rs. 16,000/- in urban areas. In response to the Board's invitation, 265 applicants were received from the contractors; out of them 13 persons were selected. Petitioner in WP No. 10895/93 received a letter of intent dated 7-11-1992 calling upon the petitioner to enter into a contract in Soraba Assembly Constituency. Work order was issued on 21-12-1992 to execute the work for construction of 1098 houses in that constituency; an agreement was entered into between the petitioner and the Board on 21-12-1992. According to the petitioner, sites were demarcated and delivered to him, who in turn made preparations to execute the works; this petitioner asserts that he had spent about Rs. 6 lakhs to store the sand in several rural areas; size stones were also collected at a cost of Rs. 2,40,000/-. Further, wood worth Rs. 2 lakhs and tiles investing Rs. 2.4 lakhs have been provided for to utilise in the constructions. Labourers have been paid advances investing Rs. 50,000/-. Vast amounts have been borrowed by the petitioner to make these preparations. When the stage was set for moving further, government issued the impugned order dated 8-1-1993 modifying the scheme. The responsibility of constructing the houses was shifted to the Deputy Commissioners of the concerned Districts; only a small percentage of the houses was to be built by the Board under this order. The Board was to construct houses against the advances given to the contractors to the tune of Rs. 22 crores and rest to be constructed by the Deputy Commissioners. The total number of houses was reduced as follows: In each Assembly Constituency 500 houses were to be built, leading to a total of 1,06,000 houses; out of this, Board was to put up only 40,000 houses and the balance of 66,000 houses by the Deputy Commissioners; all these houses were to be completed by the end of June 1993 positively. The unit cost was to be the same as earlier; it is unnecessary to refer to the details of this order.

(2.) Therefore, in Soraba Constituency the houses to be built are 500 instead of 1098. In this, the Deputy Commissioner has to build 400 houses and the Board through the petitioner has to construct only 100 houses.

(3.) Petitioner contends that the change of policy is arbitrary and the decision to modify the number of houses to be built under the relevant schemes was arrived at without application of the mind and has been formed consequent upon the change of the Chief Minister of the State. The petitioner having invested large sums of money in the hope of completing them has made to suffer great loss. The right accrued to the petitioner cannot be tampered with by an executive order. The process involved in changing the policy, resulting in the impugned order, ignored to consider the interest of the petitioner and the legitimate expectation nurtured by the petitioner that he will be allowed to complete the works as agreed upon earlier.