State cannot give preference to benefit a select few elites: Supreme Court quashes preferential land allotment

New Delhi: The Supreme Court on Monday said that judges of the Supreme Court and the High Court, MPs, MLAs, officers of the All India Services, journalists etc cannot be treated as a separate category for allotment of land at a discounted basic value in preference to others.

A bench of Chief Justice of India Sanjiv Khanna and Justice Dipankar Datta held the state cannot exercise discretion to benefit a select few elites disproportionately, especially ones who are already enjoying pre-existing benefits and advantages.

Holding the core framework of these policies suffered from the malaise of unreasonableness and arbitrariness, the court cancelled the policy memoranda issued by the Andhra Pradesh government in 2005 to allot land to cooperative societies of such people, within the Greater Hyderabad Municipal Corporation (GHMC) limits.

It felt the allocation of land at basic rates to select privileged groups reflected a “capricious” and “irrational” approach.

"This is a classic case of executive action steeped in arbitrariness, but clothed in the guise of legitimacy, by stating that the ostensible purpose of the policy was to allot land to “deserving sections of society”," the bench said.

It held, without any pretence, this policy of the state government, is an abuse of power meant to cater exclusively to the affluent sections of the society, disapproving and rejecting the equal right to allotment of the common citizen and the socio-economically disadvantaged.

It pointed out the policy indicates that higher echelons of all the three wings of the government —legislators, bureaucrats, and judges of the Supreme Court and high courts—have been afforded such preferential treatment, and journalists, who are considered the fourth pillar of democracy, have also been included.

“These four pillars of democracy are expected to act as checks and balances on the arbitrary exercise of the state’s power. However, the distribution of such extraordinary state benefits renders nugatory the very optics of healthy checks and balances within our democratic system,” the bench said.

It also said the object of the policy perpetuated inequality, differentiated and bestowed largesse to an advantaged section or group by resorting to discrimination and denial.

"The policy promotes social-economic exclusion, to favour a small and privileged section/group. The policy does not meet the equality and fairness standards prescribed by the Constitution," the court held.

The bench also noted land is a finite and highly valuable resource, particularly in densely populated urban areas, where access to land for housing and economic activities is increasingly scarce.

"When the government allocates land at discounted rates to the privileged few, it engenders a system of inequality, conferring upon them a material advantage that remains inaccessible to the common citizen. This preferential treatment conveys the message that certain individuals are entitled to more, not due to the necessities of their public office or the public good, but simply because of their status," the bench said.

The court said such practices foster resentment and disillusionment among ordinary citizens, who perceive these actions as corrupt or unjust, thereby eroding trust in democratic institutions.

"This policy undermines solidarity and fraternity, reinforcing societal hierarchies rather than actively working to dismantle them," it said.

However, the bench recognised the State's discretion and duty under the Constitution, to distribute its resources to marginalised sections of society, or other imminent and deserving personalities, to the extent necessary to discharge their public functions.

"A policy or law allotting land to public servants may be justifiable provided such allotment is within the confines of Article 14. Unless the classification satisfies the twin prong test and the substantive equality benchmark, the mandate of Article 14 is not met. The State cannot exercise discretion to benefit a select few elites disproportionately, especially ones who are already enjoying pre-existing benefits and advantages," the bench said.

In the case, the bench found the policy reeks of colourable exercise of power whereby the policymakers are bestowing valuable resources to their peers and ilk, triggering a cycle of illegal distribution of State resources.

"The State holds all its resources in trust for its citizens, to be utilised in larger public and social interest. The State, including the three organs Legislature, Executive and the Judiciary, are de facto trustees and agents or repositories which function and govern for the benefit of the citizens who are the beneficiaries," the bench said.

During the hearing, the court noted some members of judiciary decided to withdraw their applications for land but others continued to defend the allotment.

The court rejected plea by Telangana government, the cooperative societies and their members, against the 2010 judgment of the Andhra Pradesh High Court. The court quashed orders issued by the state government in 2005 and 2008 as bad in law, being violative of Article 14 of the Constitution.

It directed that the lease deeds executed by the State of Telangana in favour of the societies/members will be treated as cancelled. Similarly, development charges or expenses paid by the cooperative societies and their members, as reflected in the books of accounts, duly certified by the income-tax returns, will be refunded to them along with interest at the rates specified, it directed.