M.I. Builders Pvt Ltd v Radhey Shyam Sahu (1999)

It is the case in which the Supreme Court ordered a completed commercial construction to be demolished and a public park physically restored, and it did so on the public trust doctrine.

The principle is simple and severe: a municipal body holds a park as trustee for the citizens. It may manage the park. It may not alienate it, nor convert it into something that is not a park. A trustee who does so acts beyond power, and the courts will undo what has been done rather than award damages.

Together with M.C. Mehta v Kamal Nath (the Span Motels case), this is the foundation of the public trust doctrine in Indian environmental law.

The Lucknow Nagar Mahapalika permitted M.I. Builders Pvt Ltd to construct an underground shopping complex in the Jhandewala Park (also called Aminuddaula Park) at Aminabad Market, Lucknow, under an agreement dated 4 November 1993.

Three writ petitions were filed. A Division Bench of the Allahabad High Court (Lucknow Bench), speaking through Shobha Dixit J, held on 23 August 1994 that the Mahapalika's decision was "illegal, arbitrary and unconstitutional", quashed the resolutions and the agreement, and issued a writ of mandamus to the Mahapalika "to restore back the park in its original position within a period of three months", and meanwhile "to take adequate safety measures and to provide necessary safeguard and protection to the public, users of the park."

The findings the High Court made, which the Supreme Court adopted, are the substance of the case:

• the park was of historical importance, which the Mahapalika did not deny;
• its preservation was necessary from the environmental angle;
• the only reason advanced for the underground complex was to ease congestion in the area — but taking judicial notice of Aminabad market, the High Court said it "was so crowded that it was bursting from all its seams", and that the complex "would only complicate the situation and ... would further congest the area."

The builder appealed to the Supreme Court.

1. Could the Mahapalika permit commercial construction under a public park?
2. Does the public trust doctrine apply to such a park in India?
3. Could a contract of this magnitude be awarded without inviting tenders?
4. What relief follows where the construction is already made?

Appeals dismissed. The construction could not stand.

The public trust doctrine

"As a matter of fact Mahapalika was the trustee of the park and the doctrine of public trust, which was applicable in India as held by this Court in M.C. Mehta vs. Kamal Nath and others (known as Span case) (1997 (1) SCC 388), was applicable to the park in question. Mahapalika, therefore, could only manage the park and could not alienate it or convert it something different from the park. Park was held by the Mahapalika on trust for the citizens of Lucknow."

Of Span Resorts the Court recorded that "public trust doctrine, as discussed in the judgment, is a part of the law of land", that the Court there cancelled the lease granted to the Motel and directed it "to pay compensation by way of cost for restitution of the environment and ecology of the area."

The Mahapalika disabled itself from its own obligatory duties

Section 114 of the Adhiniyam imposes obligatory duties, among them "to maintain public places, parks and to plant trees". That "cannot now be done as the park has been dug and construction made underground. By allowing underground construction Mahapalika has deprived itself to its obligatory duties which cannot be permitted."

And the damage was not trivial: "Irreversible changes have been made. Qualitatively it may still be a park but it is a park of different nature inasmuch as trees cannot be planted. Now it is like a terrace park."

No tender

"Contract of such a magnitude could not have been awarded to the builder without calling for tenders. There was no ground to depart from the settled norms."

The Parks Act

The U.P. Parks Act came into force on 1 February 1995 and the construction had begun in January 1995 after an interim order — but "since the construction was made subject to the final order of this Court the provisions of the Park Act will have to be considered while deciding the matter." Under s. 2(b) a "park" is land with no buildings, or not more than one-twentieth covered by buildings, laid out as a garden, lawn or meadow and "maintained as a place for the resort of the public for recreation, air or light."

A municipal corporation holds a public park on trust for the citizens. It may manage but not alienate it, nor convert it into something other than a park; a resolution or agreement permitting commercial construction in a park is ultra vires, arbitrary and liable to be quashed, and the court may order restoration of the park even where the construction is complete. A contract of that magnitude also requires a public tender.

• Direct question: Explain the public trust doctrine and its application in India. Origin in Roman and English law → M.C. Mehta v Kamal Nath (1997) making it part of Indian law → this case applying it to a municipal park with an order of restoration.
• Problem question pattern: a local body leases or licences part of a park, lake bed, riverbank or other common resource for commercial use. Ultra vires; the body is a trustee; restoration rather than compensation.
• Two subsidiary points that carry marks: the corporation cannot act so as to disable itself from performing its own obligatory statutory duties; and large contracts require tenders.
• Phrase worth quoting: the park "is a park of different nature inasmuch as trees cannot be planted. Now it is like a terrace park" — a concrete illustration that a thing can survive in name and be destroyed in substance.