'First Come First Serve' Policy Of Granting Licence Is Fundamentally Flawed: Supreme Court

The Supreme Court observed that there is a fundamental flaw in the policy of granting licence on the First Come First Serve basis.

It is the solemn duty of the State to ensure that a non-­discriminatory method is adopted, whether it is for distribution or allotment of licence on his own land, or alienation of property, the bench of Justices Ajay Rastogi and Abhay S. Oka observed.

In this case, the Punjab and Haryana High Court held that the policy adopted by the State authorities for the grant of licence on the principle of First Come First Serve basis for the Scheme of Haryana Development and Regulation of Urban Areas Act, 1975 cannot be held to be fair, reasonable and transparent method. The court observed that it led to an unholy race amongst the applicants in achieving their goal of obtaining grant of licence.

Before the Apex Court, some of the parties whose licence were cancelled due to this High court judgment, contended that the policy for grant of licence on First Come First Serve basis was a long standing practice followed by the authorities and the licence was to be granted to the incumbent of its own land in terms of the parameters which have been laid down under the policy. 

The court found that there is no such consistent practice as alleged of First Come First Serve basis for allotment of licence available under the entire Scheme placed on record and secondly, from where this principle has been borrowed is alien to the statute and also the policy pursuant to which the process was initiated for allotment of licences to the prospective applicants.

Therefore, the court observed that the principle of First Come First Serve basis which has been adopted by the State Respondents in the  facts of the instant case is neither held to be rational nor in public interest and is in violation of Article 14 of the Constitution of India. The court said:

36. That apart, there is a fundamental flaw in the policy of the State of First Come First Serve basis as it involves an element of pure chance or accident and it indeed has inherent in­built implications and this factor cannot be ruled out as we have gone through the record, any person who has an access to the power corridors will be made available with an information from the Government records and before there could be a public notice accessible to the people at large, the interested person may submit his application, as happened in the instant case, and become entitled to stand first included in queue to have a better claim, at  the same time it is the solemn duty of the State to ensure that a non-­discriminatory method is adopted, whether it is for distribution or allotment of licence on his own land, or alienation of property and it is imperative and of paramount consideration that every action of the State should always be in public interest.

Observing thus, the bench upheld the High Court judgment.

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