BANGALORE MEDICAL TRUST v. B.S. MUDDAPPA & Ors.

Judgment

I. The entire proceedings before the State Government suffered from absence of jurisdiction. Even the exercise of power was vitiated and ultra vires. Theref'ore, the orders of the Government to convert the site reserved for public park to civic amenity and to allot it for private nursing home to the appellant Trust and the resolution of the Develop ment Authority. in compliance of it were null, void and without jurisdiction. [148C-D)

2.1 The purpose for which the Bangalore Development Authority Act, 1976 was enacted is spelt out from the preamble itself which pro vides. for establishment of the Authority for development of the city and areas adjacent thereto. To carry out this purpose, the development scheme framed by the Improvement Trust was adopted by the Develop ment Authority. Any alteration in this scheme could have been made as provided in Sub-Section ( 4) of Section 19 only if it resulted in improve ment in any part of the scheme. A private Nursing Home could neither be considered to be an amenity nor it could be considered improvement over necessity like a public park. 1'he exercise of power, therefore, was contrary to the purpose for which it is conferred under the statute. [141G-H) A B c D E F G

2.2 The legislative mandate undt.· ';ec. 19(4) enables the Autho rity to alter any scheme. Thus, existei.. " of power is clearly provided for. But the legislature took care to cu .. twl the exercise of this power by linking it with improvement in the 'rhcme. What is an improve- H MEDICAL TRUST v. B.S. MUDDAPPA 105 ment or when any change in the scheme can be said to be improve ment is a matter of discretion by the authority empowered to exer cise the power. [142C-D]

2.3 Sub-Section (4) of Section 19 not only defines the scope and lays down the ambit within which discretion could be exercised bnt it envisages further the manner in which it could be exercised. Therefore, any action or exercise of discretion to alter the scheme must have been backed by the substantive rationality flowing from the Section. [142E]

2.4 The exercise of power is further hedged by use of the ex pression if it appears to the Authority. In legal terminology it visua lises prior consideration and objective decision. And all this must have resulted in conclusion that the alteration would have been improvement. [145G-H] A B c

3.1 When legislature enacted Sub-Section ( 4), it unequivocally declared its intention of making any alteration in the scheme by the Authority, that is, BDA and not the State Government. It further D permitted interference with the scheme sanctioned by it only if it appeared to be improvement. Therefore, the facts that were to be found by the Authority were that the conversion of public park into private Nursing Home would be an improvement in the scheme. Neither the Authority nor the State Government undertook any such exercise. Power of conversion or alteration in scheme was taken for granted. E There is no whisper anywhere if it was ever considered, objectively, by any authority that the nursing home would amount to an improvement. Whether the decision would have been correct or not would have given rise to different consideration. But it was a total absence of any effort to do so. [J44G-H, 145A, G] F

3.2 The manner in which power was exercised fell below even the minimum requirement of taking action on relevant considerations. A scheme could be altered by the Authority, as defined under Section 3 of the Act. It is a body corporate consisting of the Chairman and experts on various aspects. This Authority functions through committees and meetings as provided under Sections 8 & 9. The purpose of the Autho- G rity taking such a decision is their knowledge of local conditions and what was better for them. That is why participatory exercise is contem plated. Yet, without calling any meeting of the authority or any com mittee the Chairman sent the letter for converting the site. If any altera- tion could be done by the Chariman or the Chief Minister, then sub- section (4) of Section 19 is rendered otoise. [145E, F, 146A-B] H 106 SUPREME COURT REPORTS I 1991] 3 S.C.R.

3.3 Financial gain by a local authority at the cost of public welfare has never been considered as legitimate purpose even if the objective is laudable. Sadly the law was thrown to winds for a private purpose. The extract of the Chief Minister's order quoted in the letter of Chairman of the BDA leaves no doubt that the end result having been decided by the highest executive in the State, the lower in order of hierarchy only followed with 'ifs' and 'buts' ending finally with resolu tion of BDA which was more or less a formality. In less than ninety days, the machinery in BDA and Government moved so swiftly that the initiation of the proposal, by the appellant, a rich trust with foreign deposits, query on it by the Chief Minister of the State, guidance of way out by the Chairman, direction on it by the Chief Minister, orders of Govt., resolution by the BDA and allotment were all completed and the site for public park stood converted into site for private nursing home without any intimation direct or indirect to those who were being de prived of it. [141A-C]

3.4 Speedy or quick action in public institutions call for apprecia- tion but our democratic system shuns exercise of individualised discre tion in public matters requiring participatory decision by rules and regulations. No one howsoever high can arrogate to himself or assume without any authorisation express or implied in law a discretion to ignore the rules and deviate from rationality hy adopting a strained or distorted interpretation as it renders the action ultra vires and bad 'in law. [141C-D] A B c D E

3.5 There is no provision in the Act for alteration in a scheme by converting one site to another, except, of course if it appeared to be improvement. Bnt even that power vested in the Authority, not the Government. The Authority should have applied its mind and must F have come to the conclusion that conversion of the site reserved for public park into a private nursing home amounted to an improvement; then only it could have exercised the power. Instead, the application for allot1nent of the site was ac1:epted first and the procedural requirements were attempted to he gone through later, and that too, hy the State Government, which was not authorised to do so. The only role which the State Government could play in a scheme altered by the BDA is specified in Sub-Sections (5) and (6) of Section 19 of the Act, viz, the State Government could be concerned or involved with an altered scheme either because of the financial considerations or when addi tional land was to be acqnired, an exercise which could not be underta ken by the BDA. A development scheme, therefore, sanctioned and published in the Gazette could not be altered hy the Government. [146B, G-H, 147A] H G A B c MEDICAL TRUST v. B.S. MUDDAPPA 107

3.6 Not only that the Authority did not apply its mind and take any decision ifthere was any necessity to alter the Scheme, but even ifit is assumed that the State Govt. could have any role to play, the entire exercise, instead of proceeding from below, that is, from the BDA to State Government, proceeded in reverse direction, that is, from the State Government to the BDA. Every order, namely, converting the site from public park to private nursing home and even allotment to the applicant was passed by State Government and the BDA, acting like a true subservient body, obeyed faithfully by adopting and confirming the directions. It was complete abdication of power by the BDA. [l46D-E]

#3. 7 The Legislature entrusted the responsibility to alter and approve the Scheme to the BDA, but the BDA in complete breach of faith reposed in it, preferred to take directions issued on command of the Chief Executive of the State. This resulted not only in error of law, but much beyond it. [I46F] '

3.8 Under Sub-Section (3) of Section 15, the State Government has power to direct the Authority to take up any scheme. The main D thrust of the Sub-Section is to keep a vigil on the local body. But it cannot be stretched to entitle the Government to alter any scheme or convert any site or power specifically reserved in the Statute in the Anthority which functions as a body. The general power of direction to take up development scheme cannot be construed as superseding specific power conferred and provided for under Section 19(4). Absence E of power apart, such exercise is fraught with danger of being activated by extraneous considerations. [l47D-E]

3.9 An exercise of power which is ultra vires the provisions in ihe Statute cannot be attempted to be resuscitated on general powers reserved in a Statute for its proper and effective implementation. F Section 65 authorises the Government to issue directions to carry out purposes of the Act and to ensure that the provisions of law are obeyed, and not to empower itself to proceed contrary to law. What is not permitted by the Act to be done by the Authority cannot be assumed to be done by State Governmeni to render it legal. An illegality cannot be cured only because it was undertaken by the Government, or because it G is done at the behest of the Chief Executive of the State. No one is above law. In a democracy what prevails is law and rule and not the height of the person exercising I.he power. [l47G-H, I48A-B]

#3. IO Amenity was defiped in Section 2(b) of the Act to include road, street, lighting, drainage, public works and such other con- H 108 SUPREME COL:RT REPORTS I 1991] 3 S.C.R. A B c veniences as the Government may, by notification, specify to be an amenity for the purpose of this Act and before any other facility could be considered amenity, it was necessary for State Government to issue a notification. And since no notification was issued including private nursing home as amenity, it could not be deemed to be included in it. That apart, the definition indicates that the convenience or facility should have had public characteristic. Even if it is assumed that the definition of amenity, being inclusive, it should be given a wider mean ing so as to include hospital added in clause 2(bb), as a civic amenity with effect from 1984, a private nursing home, unlike a hospital run by Govt. or local authority, did not satisfy that characteristic which was necessary, in the absence of which it could not be held to be amenity or civic amenity. In any case, a private nursing home could not be con sidered to be an improvement in the scheme and, therefore, the power under Section 19(4) could not have been exercised. [I45A-D] D

4.1 Discretion is an effective tool in administration. But wrong notions about it result in ill-conceived consequences. In law it provides an option to the authority concerned to adopt one or the other alterna tive. But a better, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objec tively and rationally what serves the interest better. When a Statute either provides guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it. Even E where Statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbitrarily. It should be guided by reasonableness and fairness. The legislature never intends its authorities to abuse the law or use it unfairly. [144E-G]

4.2 The executive or the administrative authority must not be oblivious that in a democratic set up the people or community being sovereign, the exercise of discretion must be guided by the inherent philosophy that the exerciser of discretion is accountable for his action. It is to be tested on anvil of rule of law and fairness or justice particularly if competing interests of members of society are involved. [ l44C-D I

4.3 When the law requires an authority to act or decide, 'if it appears to it necessary' or if he is 'of opinion that a particular act should be done', then it is implicit that it should be do11e objectively, fairly and reasonably. Decisions affecting public interest or the neces sity of doing it in the light of guidance provided by the Act and rules may not require intimation to person affected yet the exercise of discre· tion is vitiated if the action is bereft of rationality, lacks objective and F G H MEDICAL TRUST v. B.S. MUDDAPPA 109 purposive approach. The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for which power is exercised. Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal exercise of power. It must withstand scrutiny of the legislative standard provided by the Statute itself. The authority exercising discretion must not appear to be, impervious to legislative directions. No doubt, in modern State activity, discretion with executive and administrative agency is a must for efficient and smooth functioning. But the extent of discretion or constraints on its exercise depends on the rules and regulations under which it is exercised. [141E-F, 142F, DJ

5.1 Public park as a place reserved for beauty and recreation .is associated with grawth of the concept of equality and recognition of importance of common man. Earlier free and healthy air in beautiful surroundings was privilege of few. But now it is a 'gift from people to themselves'. Its importance has multiplied with emphasis on environ ment and pollution. In modern planning and development it occupies an important place in social ecology. A private nursing home, on the other hand, is essentially a commercial venture, a profit oriented industry. Service may be its moto but earning is the objective. Its utility may not be undermined but a park is a necessity not a mere amenity. A private nursing home cannot be a substitute for a public park. [134A-C] A B c D E

5.2 In 1984, the BD Act itself provided for reservation of not less than fifteen per cent of the total area of the lay out in a development scheme for public parks and playgrounds, the sale and disposition of which is prohibited under Sec. 38A of the Act. Absence of open space and public p3.rk, in present day when urbanisation is on increase, rural exodus is on large scale and congested areas are coming up rapidly, may F give rise to health hazard. May be that it may be taken care of by a nursing horne. But it is axiomatic that prevention is better than cure. What is lost by removal of a park cannot be gained by establishment of a nursing home. To say, therefore, that by conversion of a site reserved for low lying park into a private nursing ho1ne, social welfare was being promoted was being oblivious of true character of the two and their G utility. [134D-F)

6.1 Locus standi to approach by way of writ petition and refusal to grant relief in equity jurisdiction are two different aspects, may be with the same result. One relates to maintainability of the petition and other to exercise of discretion. L'!w on.the former has marched much ahead. H -. 110 SUPREME COt;i{[' REPORTS [1991] 3 S.C.F Many milestones have been covered. The restricted meaning of aggrieved person and narrow outlook of specific injury has yielded in favour of broad and wide construction in the wake of public interest litigation. Even in private challenge to executive or administrative action having extensive fall out the dividing line between personal injury or loss and injury of a public nature is fast vanishing. [133B-C] r-

6.2 Law has veered round from genuine grievance against order affecting prejudicially to sufficient interest in the matter. The rise in exercise of power by the executive and comparative decline in power and effective administrative guidance is forcing citizens to expose challenges with public interest flavour. Therefore, it is too late in the day to claim that petition flied by inhabitants of a locality whose park was converted into a nursing home had no cause to invoke equity juris diction of the High Court. In fact, public spirited citizens having faith in rule of law are rendering great social and legal service by espousing cause of public nature. They cannot be ignored or overlooked on techni cal or conservative yard stick of the rule of locus standi or absence of personal loss or injury. Present day development of this branch of jurisprudence is towards free movement both in nature of litigation and approach of the courts. Residents of locality seeking protection and maintenance of environment of their locality cannot be said to be busy bodies or interlopers. Even otherwise physical or personal or economic injury may give rise to civil or criminal action but violation of rule of law either by ignoring or affronting individual or action of the" executive in disregard of the provisions of law raises substantial issue of accounta bility of those entrusted with responsibility of the administration. It furnishes enough, cause of action either for individual or community in general to approach by way of writ petition and the authorities cannot be permitted to seek shelter under cover of technicalities of locus standi nor they can be beard to plead for restraint in exercise of discretian as grave issues of public concern outweigh such considerations. [133C-H] A B c D E F ORDER A B Sanction is accorded to the conversion of the Low Level Park, situated next to the land allotted to the H.K.E. Society in Rajmahal Vilas Extension, Bangalore as a civic amenity site. c By order and in the name of the Governor of Karnataka sd/- . (S.R. Shankaranarayana Rao I/c. Under Secretary to Government Health & Municipal Admn. Deptt." D It was followed by another order dated 17th June, 1976, sanc tioning the lease to the BMT. The order reads as under: "Subject: Allotment of a C.A. site to Bangalore Medical Trust for Construction of a hospital. E ORDER NO. HMA 249 MNG 76, BANGALORE DATED THE 17THJUNE, 1976 . • READ; (1) Govt. Order No. PLM 18 MNG 64 dated 17th March, 1964. 2) Govt. Order No. HMA 249 MNG 76 dated 27th May, 1976. 3) Letter No. PS 132/76-77 dated 1st June, 1976 from the Chairman, Bangalore Deve lopment Authority, Bangalore. PREAMBLE; F G H 138 SUPREME COURT REPORTS [1991] 3 S.C.R. A B c b E Sanction was accorded to convert a low level park situated next to the land allotted to H.K.E. Society in Rajmahal Vilas Extension, Bangalore vide Govt. Order read at (ii) above. Now the Chairman, Bangalore Developrr.wt Authority requests for lease of the aforesaid Civic Amenity Site to the Bangalore Medical Trust, Bangalore. ORDER Sanction is accorded to the lease of Civic Amenity Site situated next to the land allotted to HKE Society in Rajmahal Vilas Extension Bangalore to the Bangalore Medical Trust for construction of hospital with conditions of lease as detailed in the Govt. Order No. PLM 18 MNG 64, dated 17th March, 1964. The trust should strictly adhere to the condition no. 7 of the lease and should complete the building well within 3 years. By Order and in the name of Governor of Karnataka sd- (K.G. Rajanna) Under Secretary to Government Health & Municipal Admn. Deptt." F On 14th July the Bangalore Development Authority (hheinafter referred as BOA) completed the formality by passing the resolution and allotting the site to the BMT. The resolution reads as under: G "The Government Order No. HMA 249 MNG 76 Banga lore dated the 17th June 1976 regarding allotment of C.A. Site situated next to the land allotted to H.K.E. Society in Rajmahal Vilas Extension, Bangalore in favour of Banga lore Medical Trust for construction of hospital be read and recorded with confirmation for further action in the matter .. " On coming to know of the allotment in 1981, when some con struction activity was noticed by the residents, they approached the H - MEDICAL TRUST v. B.S. MUDDAPPA (SAHA!, J.l 139 High Court by way of writ petition on which the learned single Judge framed two issues: A "( 1) Whether the land had become the property of the Corporation and therefore the allotment of land by the BO A· in favour of the fourth respondent was illegal and invalid? (2) Even assuming that the ownership of the land had not been transferred to the Corporation, whether the action of the BOA in allotting the land, originally earmarked for a park, for construction of a nursing home and a hospital, io the fourth respondent is illegal and invalid? B c Both the issues were answered in the negative. On the first it was held that even though building and street etc. were transferred to the Corporation by the State Govt. by a notification issued under Section 23( 1) of the Act no such notification under Sub-Section (2) of Section 23 was issued in respect of open space etc. therefore the site reserved D for public park did not vest in the Corporation and it continued with the BOA which could deal with it. The finding was affirmed by the Division Bench as well. Its correctness was not assailed by the respon dents, in this Court. As regards the second question the learned Judge while agreeing with the Division Bench in Holy Saint Education Society v. Venkataamana, !LR 1982 1 Karnataka P. l. that 'a site E reserved for children's playground under the scheme prepared under the City Improvement Act when came to be vested in the Corporation, it was under a duty to retain it as such and it had no authority to divert it for any other use or grant it to a private person or organisation; held that the ratio was not helpful as, 'both under the provisions of the City Improvement Act and the BOA Act, the CIT or the BOA, as the case F may be, had the authority to improve the scheme by making alteration in the scheme and in exercise of the said power, the purpose for which any space was reserved, could be changed and after such change is effected the land could be disposed of for the purpose for which it is earmarked after such change.' The Judge held that since the site reserved for public park was converted under order of the Govern- G mcnt it was not possible to hold that the land in que3tion was reserved for a park. It was further held, that, 'since only notification allotting the site was challenged and not the conversion of site from public park to private nursing home and once the scheme was altered and the area rese~·ved for park was converted to be an area reserved for civic amenity the contention of the petitioners that the BOA had allotted i-1 - A B c D 140 SUPREME COURT REPORTS [1991) 3 S.C.13'. the site for a purpose other than to which the land was reserved, had no basis at all for the fact that after alteration brought about by Government under order dated 27th March, 1976, the site in question was only reserved for a civic amenity generally and not for a part specially.' .-.. Two other subsidiary submissions which in fact are now the principal issues, "that the BDA had no power to alter the scheme', and in any event a site reserved for a civic amenity could not have been allotted for construction of a hospital" also did not find favour as the scheme could be altered under Section 19( 4) of the Act and it was done with approval of State Govt. In appeal the Division Bench after examining inclusive definition of civic amenity in Section 2(bb), added in 1984, amended with retrospective effect in 1983 held that a hospital could not be considered to be an amenity in 1976 as, "public amenity civic or otherwise to be a public convenience for purposes of the BDA Act, the Government has to notify. If it does not specify whatever may otherwise be a public convenience will not be a civic amenity or amenity under clauses (bb) and (b) of Section 2 respectively for purposes of the BD Act. "The Bench further held that in allowing the site to the BMT largess was conferred on it in utter violation of law and rules. F Did the Division Bench commit any error of law? Was the con- E version of site in accordance with law? Were any of the authorities aware or apprised of the provisions under which they could convert a site reserved for public park into a nursing home? Did the authorities care to ascertain the provisions of law or rules under which they could act? Was any precaution taken by the Chief Executive of the State to adhere to legislative requirement of. altering any scheme. Not in the least. The direction of the Chief Minister, the apex public functio nary of the State, was in breach of public trust, more like a person dealing with his private property than discharging his obligation as head of the State administration in accordance with !aw and rules. The Govt. record depicted even more distressing picture. The role of the administration was highly disappointing. In their noting even a show of awareness of law and fact was missing. This culture of public functionary, adorning highest office in the State of being law to himself and the administration acting on dictate, for whatever reason disturbs the balance of rule of law. What is more shocking is that this happened in 1976 and not even one out of various departments from which the papers were routed through raised any objection. And the statutory H body like BDA with impressive members too succumbed under the G pressure without, even, a murmur. -.. , __ MEDICAL TRUST v. B.S. MUDDAPPA [SAHA!, J.l 141 ~ A Financial gain by a local authority at the cost of public welfare has never been considered as legitimate purpose even if the objective is laudable. Sadly the law was thrown to winds for a private purpose. the extract of the Chief Minister's order quoted in the letter of Chairman of the BD A leaves no doubt that the end result having been decided by the highest executive in the State the lower in order of hierarchy only followed with 'ifs' and 'buts' ending finally with resolu- B ti on of BD A which was more or less a formality. Between 21st April and 14th July, 1976, that is less than ninety days, the machinery in BDA and Government moved so swiftly that the initiation of the pro- posal, by the appellant a rich trust with 90,000 dollars in foreign r deposits, query on it by the Chief Minister of the State, guidance of c way out by the Chairman, direction on it by the Chief Minister, orders of Govt. resolution by the BDA and allotment were all completed and the site for public park stood converted into site for private nursing home without any intimation direct or indirect to those who were being deprived of it. Speedy or quick action in public institutions cal~ for appreciation but our democratic system shuns exercis~ of individua- lised discretion in public matters requiring participatory decision. by D rules and regulations. No one howsoever high can arrogate to himself or assume without any authorisation express or implied in law a discre- tion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it renders the action ultra vires and bad in law. When the law requires an authority to act or decide, 'if it appears to it necessary" or if he is 'of opinion that a particular act E should be done' then it is implicit that it should be done objectively, fairly and reasonably. Decisions affecting public interest or the neces- sity of doing it in the light of guidance provided by the Act and rules may not require intimation to person affected yet the exercise of dis- cretion is vitiated if the action is bereft of rationality lacks objective and purposive approach. The action or decision must not only be F reached reasonably and intelligibly but it must be related to the purpose for which power is exercised. The purpose for which the Act was enacted is spelt out from the Preamble itself which provides for establishment of the Authority for development of the city of Banga- lore and areas adjacent thereto. To carry out this purpose the develop- ment scheme framed by the Improvement Trust was adopted by the G Development Authority. Any alteration in this scheme could have been made as.provided in Sub-Section (4) of Section 19 only if it resulted in improvement in any part of the scheme. As stated earlier a private Nursing Home could neither be considered to be an amenity nor it could be considered improvement over necessity like a public park. The exercise of power, therefore, was contrary to the purpose H ~ ~. ··./ ,)_ .. A B 142 SUPREME COURT REPORTS (1991) 3 S.C.R. for which it is conferred under the statute. Was the exercise of discretion under Sub-Section (4)-0f Section 19 in violation or in accordance with the norm provided in law. For proper appreciation the Sub-Section is extracted below: ~ "(4) If at any time it appears to the Authority that an improvement can be made in any part of the scheme, the Authority may alter the scheme· for the said purpose and shall subject to the provisions of sub-section (5) and (6) forthwith proceed to execute the scheme as altered." ~ .i )-' D c This legislative mandate enables the Authority to alter any scheme. Existence of power is thus clearly provided for. What is the nature of this power and the manner of its exercise? It is obviously statutory in character. The legislature took care to control the exercise of this power by linking it with improvement in the scheme. What is an improvement or when any change in the scheme can be said to be improvement is a matter of discretion by the authority empowered to exercise the power. In modern State activity discretion with executive and administrative agency is a must for efficient and smooth function- ing. But the extent of discretion.or constraints on its exercise depen~s· on the rules and regulations under which it is exercised. Sub-Section (4) of Section 19 not only defines the scope and lays down the ambit E within which the discretion could be exercised but it envisages further- the manner in which it could be exercised. Therefore, any action or exercise of discretion to alter the scheme must habe been backed by substantive rationality flowing from the. Section. Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a preiext to justify the arbitrary or illegal exercise of power. It must withstand scrutiny of the legislative standard provided by the Statute itself. The authority exer- cising discretion must not appear to be, impervious to legislative direc- tions. From the extracts of correspondence between the Chairman and the Chief Minister it is apparent that neither of them cared to look into the provisions of law. It was left to the learned Advocate General to G defend it, as a matter of law, in the High Court. There is no whisper anywhere if it was ever considered, objectively, by any authority that the nursing home would amount to an improvement. Whether the decision would have been 'correct or not would have given rise to different consicleraiion. But.here it was total absence of any effect to do so. Even in the reply filed on behalf of BDA in the High Court tt which appears more a Iega_~juggI:ry than stateme~t of facts bristling f ~ ' l t MEDICAL TRUST v. B.S. MUDDAPPA [SAHAI, J.] 143 with factual inaccuracies there is no mention of it. The extent of mis leading averments for purpose of creating erroneous impressions on the Court shall be clear from the statement contained in paragraph 1 of the affidavit relevant portion of which is extracted below: "The fourth respondent had made an application for grant of land for purpose of constructing a Nursing Home. This application was made also to this Respondent. Considering the fact that the medical facilities available in Bangalore were meagre and were required to be supplemented by charitable medical institutions, this authority was required to ascertain whether a suitable site could be given for the hospital building of the fourth ·respondent. Upon scrutiny of the Rajmahal Vilas Extension, as early as in 1976, the area in question which had been marked as a low level park measuring 13485 sq. yards was found suitable to ·cater to the medical relief to the needy public. However, since the said area had been marked as a low level park, it was neces sary to convert the said low level park as civic amenity site. Furthermore, it is essential that the Government had to approve allotment of the site to the fourth respondent as a civic amenity site. There are proceedings before the first respondent in relation to allotment of site to public institu tions. Under the recommendations which has been made, it was decided that plots could be allotted to public institu-. J:l tions subject to certain conditions." D c It was this statement which resulted in erroneous finding by the learned single Judge to the effect. "Therefore, it is clear that though at the time of preparation of the scheme, formation of a park was con sidered in the interest of the general public, nothing prevents the BO A · F · from taking. the view that the construction of a hospital to provide medical facilities to the general·public is necessary and therefore, the area earmarked for park should be converted into a civic amenity site. It is in exercise of this power, the BOA decided to convert the area. reserved for park into a civic amenity site so as to enable its disposal in favour of the fourth respondent for construction of a hospital. Though G Section 19( 4) does not expressly require the taking of the approval of the Government for such alteration, the approval was necessary as the original scheme in which the area was reserved for a park had been. approved by the Government. Therefore, the BDA considered appropriate, and in my opinion rightly, to seek the approval of the Government for making such conversion:· The State. Government !'I ' . 144 SUPREME COURT REPORTS I 1991] 3 S.C.R. accorded sanction for the conversion. Therefore, the conversion was in accordance with law". The averment in the affidavit of the BOA that an application was made before it could not be substantiated. Nor it could be established that the BOA or any of its committee ever took into consideration that medical facilities were meagre in the city of Bangalore. Such misleading statements call for serious condemnation. No further comment is needed except that the public institutions should be cautious and must not give impression of taking sides. It is destructive of fairness. The then Chairman's letter in 1976 extracted above was forthright whereas the stand of BOA in 1983 appears to be crude effort to support the executive action. No record was produced to substantiate· the averments. It was necessary as it was not in harmony with the correspondence extracted earlier. The statement by the counsel for the BOA that the records were not traceable was not satisfactory. The executive or the administrative authority must not be oblivious that in a democratic set up the people or community being sovereign the exercise of disceretion must be guided by the inherent philosophy that the exercisor of discretion is accountable for his aetion. It is to be tested on anvil of rule of law and fairness or justice particularly if competing interest of members of society is involved. Was this adhered to by any of the authority? Unfortunately not. Much was attempted to be made out of exercise of discretion in converting a site reserved for amenity as a civic amenity. Discretion is an effective tool in administration. But wrong notions about it results in ill-cmiceived consequences. In law it provides an option to the authority concerned to adopt one or the other alternative. But a bet ter, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better. When a Statute either pro vides guidance or rules or regulations are framed for exercise of discre tion then the action should be in accordance with it. Even where Statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbitrarily. It should be guided by reasonableness and fairness. The legislature never intends its authorities to abuse the law or use it unfairly. When legisla- tu re enacted Sub-section ( 4) it unequivocally declared its intention of making any alteration in the scheme by the Authority, that is, BOA and not the State yovernment. It further permitted interference with the scheme sanctioned by it only if appeared to be improvement. The facts, therefore, that were to be found by the Authority were that the conversion of public park into private nursing home would be an improvement in the scheme. Neither the Authority nor the State A B c D E F G H -~ MEDICAL TRUST v. B.S. MUDDAPPA (SAHA!, J.] 145 Government undertook any such exercise. Power of conversion or alteration in scheme was taken for granted. Amenity was defined in Section 2(b) of the Act to include road, street, lighting, drainage, public works and such other conveniences as the Government may, by notification, specify to be an amenity for the purposes of this Act. The Division Bench found that before any other facility could be consi dered amenity it was necessary for State Government to issue a notifi cation. And since no notification was issued including private nursing home as amenity it could not be deemed to be included in it. That apart the definition indicates that the convenience or facility should have had public characteristic. Even if it is assumed that the definition of amenity being inclusive it should, be given a wider meaning so as to include hospital added in clause 2(bb) as a civic amenity with effect from 1984 a private nursing home unlike a hospital run by Govt. or local authority did not satisfy that characteristic which ·was necessary in the absence of which it could not be held to be amenity or civic amenity. In any case a private nursing home could not be considered to be an improvement in the scheme and, therefore, the power under Section 19(4) could not have been exercised. A B c D Manner in which power was exercised fell below1.'. even the minimum requirement of taking action on relevant considerations. A scheme could be altered by the Authority as defined under Section 3 of the Act. It is a body corporate under Section 3 consisting of the Chairman and experts on various aspects, namely, a finance member, E an engineer, a town planner, an architect, the ex-officio members such as Commissioner of Corporation of the City of Bangalore. officer of the Secretariat and elected members for instance, two persons of the State Legislature, one a woman and other a Scheduled caste and Scheduled tribe member, representative of labour, representative of water-supply, sewerage board, electricity board, State Road Transport F Corporation, two elected counsillors etc. and the Commissioner. This authority functions through committees and meetings as provided under Sections 8 and 9. There is no Section either in the Act nor any rule was placed to demonstrate that the Chairman alone, as such, could exercise the power of the Authority. There is no whisper nor there is any record to establish that any meeting of the Authority was G held regarding alteration of the scheme. In any case the power does not vest in the State Government or the Chief Minister of the State. The exercise of power is further hedged by use of the expression, if 'it appears to the Authority'. In legal terminology it visualises prior con sideration and objective decision. And all this must have resulted in conclusion that the alteration would have been improvement. Not H ,. 146 SUPREME COURT REPORTS [1991] 3 S.C.R. A eYen one was followed. The Chairman could not have acted on his own. Yet without calling any meeting of the authority or any commit- tee he sent the letter for converting the site. How did it appear to him that it was necessary, is mentioned in the letter dated 21st April, because the Chief Minister desired so. The purpose of the Authority taking such a decision is their knowledge of local conditions and what B was better for them. That is why participatory exercise is contemlated. If any alteration in Scheme couid be done by the Chairman and the Chief Minister then Sub-Section (4) of Section 19 is rendered otiose. There is Iio provision in the Act for alteration in a scheme by convert ing one site to another, except, of course if it appeared to be improve ment. But even that power vested in the Authority not the Govern ment. What should have happened was that the Authority should have C applied its mind and must have come to the conclusion that conversion of the site reserved for public park into a private nursing home amounted to an improvement then only it could have exercised the power. But what happened in fact was that the application for allot ment of the site was accepted first and the procedural requirements D were attempted to be gone through later and that too by the State Govt. which was not authorised to do so. Not only that the Authority did not apply its mind and take any decision if there was any necessity to alter the Scheme but even if it is assumed that the State Govt. could have any role to play, the entire exercise instead of proceeding from below, that is, from the BOA to State Government proceeded in reverse direction, that, from the State Government to the BOA. Every order, namely, convertiPg the site from public park to private nursing home and even allotment to BMT was passed by State Government and the BOA acting like a true subservient body obeyed faithfully by adopting and confirming the directions. It was complete abdication of power by the BOA. The Legislature entrusted the responsibility to F alter and approve the Scheme to the BOA but the BOA in complete breach of faith reposed in it, preferred to take directions issued on Command of the Chief Executive of the State. This resulted not only in error or law but much beyond it. In fact the only role which the State Government could play in a scheme altered by the BOA is specified in Sub-Section (5) and (6) of Section 19 of the Act. The former requires G previous sanction of the Govt. if the estimated cost of executing the altered scheme exceeds by a greater sum than five per ceat of the cost of executing the scheme as sanctioned. And later if the 'scheme as altered involved the acquisition otherwise than by agreement'. In other words the State Government could be concerned or involved with an altered scheme either because of financial considerations or H when additional land was to be acquired, an exercise which could not E , MEDiCAL TRUST v. B.S. MUDDAPPA [SAHA!, J.J 147 be undertaken by the BOA. A development scheme, therefore, sane- A tioned and published in the Gazette could not be altered by the Government. Effort was made to justify the exercise of power under Sub Section (3) of Section 15 which reads as under: ... "(3) Notwithstanding anything in this Act or in any other law for the time being in force, the Government may, whenever it deems it necessary require the Authority to take up any development scheme or work and execute it subject to such terms and conditions as may be specified by the Government." In Sub-Section (1) the Authority is empowered to draw up development scheme with approval of government whereas under Sub-Section (2) it is entitled to proceed on its owil provided it has funds and resources. Sub-Section (3) is the power of State Government to direct it to take up any scheme. The main thrust of the Sub-Section is to keep a vigil on the local body. But it cannot be stretched to entitle the Government to alter any scheme or convert any site or power specifically reserved in the Statute in the Authority. The general power of direction to take up development scheme cannot be con strued as superseding specific power conferred and provided for under Section 19(4). The Authority under Section 3 functions as a body. The Act does not contemplate individual action. That is participatory exer cise of powers by different persons representing different interest. And rightly as it is the local persons who can properly assess the need and necessity for altering a scheme and if any proposal to convert from one use to another was an improvement for residents of locality such as exercise could not be undertaken by the Government. Absence of power apart, such exercise is fraught with danger of being activated by extraneous considerations. t E Section 65 the overall power reserved in Government to give such directions to the Authority as it considers expedient for carrying out any purpose of the Act was another provision relied to support an order which is otherwise unsupportable. An exercise of power which is ultra vires the provisions in the Statute cannot be attempted to be resuscitated on general powers reserved in a Statute for its proper and effective implementation. The Section authorises the Government to issue directions to ensure that the provisions of law are obeyed and not to empower it itself to proceed contrary to law. What is not permitted G H r 148 SUPREME COURT REPORTS [1991] 3 S.C.R. A B by the Act to be done by the Authority cannot be assumed to be done by State Government to render it legal. An illegality cannot be cured only because it was undertaken by the Government. The Section authorises the Government to issue directions to carry out purposes of the Act. That is the legislative mandate should be carried out. And not that the provision of law can be disregarded and ignored because what was done was being done by State Government and not the Authority. An illegality or any action contrary to law does not become in accor dance with law because it is done at the behest of the Chief Executive of the State. No one is above law. In a democracy what prevails is law and rule and not the height of the person exercising the power. ..- C For these reasons the entire proceedings before the State Government suffered from absence of jurisdiction. Even the exercise of power was vitiated and ultra vires. Therefore the orders of the· Government to convert the site reserved for public park to civic ame nity and to allot it for private nursing home to Bangalore Medical D Trust and the resolution of the Bangalore Development Authority in compliance of it were null, void and without jurisdiction. Leave granted. ORDER E In the result this appeal fails, for the reasons stated by us in our separate but concurring judgments, and is accordingly dismissed. We further direct that the respondents shall be entitled to their cost throughout. N.P.V. Appeal dismissed.