The Supreme Court on Monday quashed a policy issued by the then Andhra Pradesh government between 2005 and 2008 which gave preferential treatment to legislators, judges, government employees, and journalists when it came to the allotment of land for housing [State of Andhra Pradesh v. Dr Rao VBJ Chelikani].

A Bench of Chief Justice of India Sanjiv Khanna and Justice Dipankar Datta opined that since this policy created a separate, privileged class for the allotment of land at discounted rates, it was unreasonable, arbitrary and promoted inequality, thereby violating Article 14 of Constitution of India.

The Court, therefore, quashed Government Memoranda (GoM) issued by Andhra Pradesh (now Telangana) in 2005 and 2008, to the extent it created a separate class for the preferential allotment of land in the Greater Hyderabad Municipal Corporation area.

"The allocation of land at basic rates to select privileged groups reflects 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.' Shorn of 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," the Court held.

In 2005, the then Andhra Pradesh (before the bifurcation of the State into Andhra Pradesh and Telangana in 2014) government issued three GoMs to establish a comprehensive policy for managing land resources and housing in urban and semi-urban areas.

This was followed by a GoM in 2006 which relaxed the 2005 policy further. Together, these GoMs gave preferential treatment to certain classes of persons who were allowed to avail land allotment in Hyderabad at discounted prices (basic rates) instead of prevailing market rates.

These persons included Supreme Court and High Court judges, All India Service Officers, State employees, Members of Parliament (MPs), Members of the Legislative Assembly (MLAs), accredited journalists, sports persons and eminent persons in the fields of art and culture.

The combined effect of the GoMs of 2005 and 2006 was such that these persons could be allotted land at discounted rates even if they had a house in their name, or in the name of their spouse or children, or had earlier been allotted a plot of land at a concessional rate provided they did not have any house in Hyderabad or Secunderabad.

This land allotment was challenged before the High Court by three persons who contended that land worth ₹700 crores was being allotted to affluent persons at throw-away prices that were only a fraction of the market value.

The High Court quashed the State's move in 2007, which led the State to issue fresh GoMs in 2008. The 2008 GoMs were also challenged before the High Court, which quashed the same in 2010.

The Andhra Pradesh government (now Telangana government) Cooperative Societies and their members then filed an appeal against a 2010 judgment of the High Court. One of the writ petitioners (Keshav Rao Jadhav) before the High Court also filed a cross appeal.

In its judgment, the top court noted that the GoMs favored a privileged segment of society which was already better off compared to the vast majority of marginalized and socio-economically disadvantaged individuals.

The Court pointed out that government servants, elected legislators, judges and accredited journalists do not belong to the 'weaker' section to warrant special State reservations in land allotment.

The Court concluded that such a policy of preferential treatment to persons who are already better off only perpetuates inequality.

"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. Such practices foster resentment and disillusionment among ordinary citizens, who perceive these actions as corrupt or unjust, thereby eroding trust in democratic institutions," the Court observed.

The Court added that the State cannot exercise discretion for preferential allotment to benefit a select few elites disproportionately, especially those who are already enjoying pre-existing benefits and advantages.

Therefore, the Court quashed the 2005 and 2008 GoMs in question as being violative of Article 14 of the Constitution.

The Court added that Cooperative Societies and their members will be entitled to a refund of the entire amount deposited by them for land allotment made under the now-quashed policy.

Senior Advocate Raghenth Basant led arguments for Keshav Rao Jadhav, who challenged the land allotment policy and sought its quashing.

Senior Advocates SS Prasad, Dr. Menaka Guruswamy, K Ramakanth Reddy, Rajashekhar Rao, Dr. AM Singhvi, Vibha Datta Makhija and Rajiv Datta were among the lawyers who led arguments in support of the policy.

[Read Judgment]