The Supreme Court in this case addressed the issue of arbitrary decisions made by the government or public bodies under the guise of public interest. The case involved the cancellation of an allotment made to the respondent, Pratima Mohanty, by the Bhubaneswar Development Authority (BDA). The BDA had allotted a plot to her through a public process, which she complied with by fulfilling all terms and conditions, including timely payments. However, the allotment was later cancelled, allegedly in the larger public interest, without providing any cogent reason or notice.

The Court emphasized that “public interest” cannot be used as a cover for arbitrary or unfair decisions. It held that the principles of natural justice and non-arbitrariness are embedded in Article 14 of the Constitution. Any action by the state or its instrumentalities must be fair, reasonable, and just. The decision to cancel the allotment was deemed arbitrary and violative of these principles since no proper justification or process was followed.

The Court also clarified that mere invocation of public interest without evidence or reasoning does not justify taking away vested rights. It warned authorities against using vague and undefined terms like “larger public interest” to override individual rights or lawful entitlements. The judgment reaffirms that fairness in administrative decisions is not optional but a constitutional mandate.

The Supreme Court thus set aside the cancellation and restored the respondent’s rights, underlining that decisions by public authorities must meet constitutional standards of fairness and legality.