While granting a concession, using wrong terminology employed by Statutory Authority cannot be a ground to revoke such concession: Karnataka High Court

The Karnataka High Court has said under Justice Krishna S Dixit in Suchitra Cinema and Cultural Academy v. The Commissioner Bangalore Development Authority & ANR.(Writ Petition No. 58854 of 2014) that if a statutory authority uses a wrong terminology while granting concessions, it cannot be used as a ground to revoke that concession if the party itself is not at fault.


The difficulty which the petitioner is put to arose because of BDA’s employment of a wrong English word namely, ‘donation’ in a lease transaction and the same having been literally construed by the statutory auditing party, the concession given to the lessee was sought to be revoked.

The Petitioner, a private Trust registered under the provisions of Indian Trusts Act, 1882 is grieving before the Writ Court against the BDA’s Letter dated 19.11.2014 (Annexure-M) whereby it is asked to pay back a sum of Rs.50 Lakh on the ground that such a ‘donation’ could not have been made by the BDA – an authority constituted under the Bangalore Development Authority Act, 1976 whilst renewing lease of the sites in question.


It was said that the concession was granted on the instructions of the Chief Minister under section 65 of the BDA Act. The BDA later claimed that it being the statutory authority has to function under the provisions of 1976 Act and therefore it cannot undertake any charitable activity like making donation that are not authorized by the statutory scheme. It was also pointed out that the audit objections to the concession granted to the petitioner-lessee in the matter of premium/rentals.

The Court said “The grant of said concession was acted upon by the Petitioner, is also not in dispute. It has been a settled position of law that where a person acts on that representation of another to his prejudice, whatever be the arguable prejudice, ordinarily it is not open to the representer to contend or conduct to the contrary, vide estoppel enacted in section 115 of the 1872 Act.”


The Court clarified that “The BDA could have offered a proper explanation to the auditing party as to what it meant by the word ‘donation’ in the light of transaction in question. However, it did not choose to do that. The auditing party did not solicit explanation from the petitioner, either. Therefore, the contention of BDA Panel Counsel that his client being a statutory authority cannot give any donation to anyone since it has to act as the trustee of the public funds, does not impress the Court, even in the least.”

It was further said “Law abhors approbation & reprobation, in as much as the BDA being a statutory authority answers the description of State under Article 12 of the Constitution of India. The instrumentalities of the State have to conduct themselves with a measure of fairness and justice, in all their actions. However, impugned action falls short of reasonable fairness standards.”

Therefore the petitioner was released from their duty to pay the specified sum as demanded by BDA.

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