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Seema Agency Vs. Union of India and Ors. - (High Court of Chhattisgarh) (02 Jan 2018)

Legitimate expectation operates in the field of public and not private law and such legitimate expectation ought to be protected though not guaranteed



The Petitioner is a chemist and supplier of various types of drugs/medicines, whereas Respondent No. 2 - All India Institute of Medical Sciences (AIIMS), is one of the health care institutes established by Ministry of Health and Family Welfare, Government of India under the Pradhan Mantri Swasthya Suraksha Yojna (PMSSY) with the aim of correcting regional imbalances in quality tertiary level health care in the country and for attaining self-sufficiency in graduate and post-graduate medical education and training. In order to achieve its aim, the Respondent AIIMS issued a global tender inviting applications for establishment of Chemist shop at AIIMS, Raipur and ultimately, upon completion of formalities, the Petitioner's offer was accepted and letter of award was issued to the petitioner on 8-1-2013 and agreement was signed on 24-1-2014 to setup and operate 24 x 7 pharmacy/chemist shop within the premises of AIIMS, Raipur for supply of medicines/surgical consumables/implants/orthotic and prosthetic devices etc. on discounted rates with a condition of maximum accepted discount of 65.30% rebate on printed MRP inclusive of VAT.

Since the Petitioner's term was going to expire on 23rd January, 2017, the Petitioner made a request before the AIIMS authorities for extension of agreement of the said shop for a further period which has been regretted by Respondent No. 2 leading to filing of a writ petition questioning the memo dated 10th January, 2017, but later-on the writ petition was withdrawn with liberty to move fresh and by letter dated 2nd May, 2017, the Petitioner's agreement for running the pharmacy store was extended till 31st October,2017 on the same terms and conditions as earlier agreed upon between the parties. Upon completion of six months, when fresh notice was served to the Petitioner that, no further extension can be granted and as per PMSSY Division, Ministry of Health and Family Welfare, New Delhi, a Jan Aushadhi Store is to be opened in the premises of AIIMS, Raipur, present writ petition has been filed feeling aggrieved and questioning that order.

"Salus populi est suprema lex: regard for the public welfare is the highest law". This principle is based on the implied agreement of every member of society that his own individual welfare shall in cases of necessity yield to that of community. His property, liberty and life shall under certain circumstances be placed in jeopardy or even sacrificed for the public good. This legal maxim has been followed by Supreme Court in the matter of Hira Tikkoo v. Union Territory, Chandigarh and others and it has been held that, in public law in certain situations, relief to the parties aggrieved by action or promises of public authorities can be granted on the doctrine of "legitimate expectation" but when grant of such relief is likely to harm larger public interest, the doctrine cannot be allowed to be pressed into service.

In the matter of Union of India v. Hindustan Development Corpn., the Supreme Court has held that, the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. Where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Legitimate expectation being less than a right operates in the field of public and not private law and to some extent such legitimate expectation ought to be protected though not guaranteed.

In the matter of Madras City Wine Merchants' Assn. v. State of T.N., the Supreme Court has held that, legitimate expectation may arise-(a) if there is an express promise given by a public authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue; (c) such an expectation must be reasonable. However, if there is a change in policy or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise.

In the instant case, the subject shop was given by contract agreement to the Petitioner for a period of three years and was extended for a further period of six months, but thereafter, the Government has taken a policy decision to open Jan Aushadhi Outlet for providing generic medicines to poor and down trodden people, in all the six AIIMS premises which was conveyed through the memo dated 12th June, 2017 to the Respondent AIIMS and thus, the competent authority of the Respondent taken a decision not to renew the contract agreement for further period and decided to open the Jan Aushadhi Outlet in the said premises, in larger public interest, that too through M/s. HLL Lifecare Limited which is a Government of India enterprise. The Government/respondents are free to take a decision in this regard particularly when the opening of Jan Aushadhi Outlet has become imperative for them. There are stronger reasons not to protect the claim of legitimate expectation on behalf of the Petitioner as the decision has been taken in overriding public interest particularly keeping in view the provision for providing generic medicines to the weaker and down trodden sections of the society in more subsidised rates which is one of the policy decisions of the Government of India and to implement the same, the shop/outlet in question is required to be established by the respondents. Therefore, no question of legitimate expectation would arise and such a doctrine cannot be pressed into service competently and also for the reason as the petitioner's performance was not found satisfactory.

It cannot be held that, the Petitioner has a legally enforceable and substantive right in the shape of legitimate expectation for a writ of mandamus for getting the lease renewed in its favour. Consequently, the writ petition is accordingly dismissed.

Relevant : Hira Tikkoo vs. Union Territory, Chandigarh and Ors. MANU/SC/0337/2004; Union of India and others vs. Hindustan Development Corpn. and others MANU/SC/0219/1994; Madras City Wine Merchants' Association and Anr. vs. State of T.N. and Anr. MANU/SC/0815/1994


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