"The Chief Minister had absolute and unfettered discretion in this matter which was not justified. Members of the public should be informed that such schemes are available for them," the division bench headed by Justice Abhay Oka noted.
Flats are alloted to freedom-fighters, artists, sportspersons, government employees, etc, from this quota.
"Unless you (state) adopt a transparent and fair procedure, how can you say that it (scheme) is reasonable?", asked the bench.
The court was hearing petitions filed by former government employees claiming that they were eligible for flats under the 'Chief Minister's quota' since 1989, but their names remained on the waiting list.
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Advocate Uday Warunjikar, appearing for Manohar Bait, one of the petitioners, said the information obtained by Bait under the Right to Information reveals that most of the beneficiaries of CM's quota were either related to MLAs or MPs, or were influential politicians themselves.
The petitioners seek review of the entire allotment of flats since 1990 under CM's discretionary quota. They have also challenged a Government Resolution of November 30, 2011, about CM's quota.
The government also informed that in the last one and half years, no allotment was made under the CM's quota. The bench reserved its order till Monday (March 3) after arguments concluded.