Harpal Singh vs Union Territory, Chandigarh

G.S. Singhvi, J.—This is a petition to quash the notices Annexures P1 to P3 issued by the Assistant Estate Officer, exercising the powers of the Estate Officer, Chandigarh and the orders Annexures P4 to P6 passed respectively by the Assistant Estate Officer, the Chief Administrator and the Adviser to the Administrator, Union Territory, Chandigarh whereby the plot allotted to the petitioner has been resumed and a part of the amount deposited by him as premium has been forfeited.

In the open auction held on 13.3.1988, the petitioner gave the highest bid of Rs. 21,32,000/ for S.C.O. Site No. 46162, Sector 35C, Chandigarh. The petitioner deposited 25% of the total premium. Thereafter, the Estate Officer issued allotment letter dated 12.4.1988. In terms of the allotment letter option was available to the petitioner to deposit the remaining premium within 30 days without interest or to pay the remaining amount in three annual equated instalments along with interest. The petitioner did not opt for paying the remaining amount in lumpsum. He also failed to deposit the first instalment of Rs. 6,09,299/ as well as the ground rent amounting to Rs. 53,300/ which fell due on 13.3.1989. Consequently, the Assistant Estate Officer issued notice dated 29.5.1989 under Rule 12(3) of the Chandigarh Lease Hold of Sites and Buildings Rules, 1973 (hereinafter referred to as "the Rules of 1973") and called upon the petitioner to pay the amount of instalment with ground rent and interest together with penalty of Rs. 66,260/ within the period of three months i.e. by 31.8.1989. The petitioner not only ignored that but also failed to deposit the second and third instalments. This resulted in the issuance of notices dated 6.6.1990 and 13.11.1991 requiring the petitioner to deposit the amount of instalment along with ground rent and interest and penalty within three months. Even then the petitioner did not bother to deposit the amount. Therefore, the Assistant Estate Officer took further proceedings under Rule 12(3) of the Rules of 1973 for cancellation of the lease of the site. The Assistant Estate Officer fixed the hearing of the case on 3.10.1989, 12.12.1989, 27.2.1990, 26.6.1990, 4.9.1990, 16.10.1990, 5.6.1991, 26.6.1991, 14.8.1991, 4.9.1991, 13.11.1991, 11.12.1991, 6.5.1992 and 24.6.1992. The petitioner failed to avail these opportunities and did not deposit the amount. Therefore, the Assistant Estate Officer held that he was guilty of wilful default and on that basis the order Annexure P4 dated 24.6.1992 came to be passed for cancellation of the lease of the site and forfeiture of 10% of the premium of the site plus ground rent and interest. The petitioner preferred appeal and succeeded in persuading the Chief Administrator to set aside the order of the Assistant Estate Officer by making an unequivocal promise through his counsel that he would make part payment on 7.3.1995 and that the remaining amount will be paid by 31.3.1995. The Chief Administrator reduced the amount of forfeiture from 10% to 2%. Even then the petitioner did not bother to deposit the amount due. Instead he preferred revision petition before the Adviser to the Administrator. Before the revisional authority also, it was given out that the petitioner would pay the outstanding dues. Believing the promise made by the petitioner/his representative the Adviser to the Administrator restored the site to the petitioner subject to the condition that he shall pay Rs. 10 lacs by 7.6.1995 and the balance amount in two equal instalments payable on 27.6.1995 and 25.7.1995. However, after the passing of order dated 26.5.1995 by the Adviser the petitioner failed to clear the due amount and with a view to avoid penal consequences, he filed the present petition.

On 21.11.1995, the notice of motion was issued to the respondents. The Court also directed them to supply details of accounts regarding the outstanding amount payable by the petitioner including interest etc. upto date. On 8.2.1996, the Court recorded an undertaking given by the petitioner to deposit the remaining amount due i.e. Rs. 26,41,552/ in two instalments. Rs. 15 lacs were to be deposited by 15.2.1996 and the remaining amount by 29.2.1996. It appears that the petitioner did not deposit amount within time fixed by the Court on 8.2.1996 and on May 13, 1996, the Court directed the petitioner to deposit the draft brought by him in the Court for payment of Rs. 1,09,855/.

The first contention urged by Shri S.R. Dass, counsel for the petitioner is that the proceedings initiated by the respondents for cancellation of site should be dropped because the petitioner has deposited the entire outstanding amount and construction over the plot allotted to him has already been completed. Shri Dass submitted that the default committed by the petitioner in depositing the instalment money cannot be termed as wilful because the petitioner was facing financial crisis at the relevant time. The second contention urged by Shri Dass is that the imposition of penalty and forfeiture of the premium already deposited by the petitioner are contrary to Rule 12(3) and, therefore, the order of resumption should be declared illegal and void. Shri Subhash Goyal, learned counsel for the respondents rebutted the contentions of Shri Dass and argued that the petitioner does not have the locus standi to challenge the orders Annexures P4, P5 and P6 because he did not deposit any of the instalments after securing possession of the valuable property belonging to the respondents. Learned counsel submitted that the finding recorded by the Assistant Estate Officer on the issue of wilful default is based on a proper appreciation of the facts which were available before the concerned authority and as the petitioner did not challenge this finding before the appellate and the revisional authorities, he cannot now challenge the same by way of writ under Article 226 of the Constitution. Shri Goyal further argued that forfeiture of a part of the premium is legally justified in view of the explicit provision contained in Rule 12(3). In the alternative, he argued that even if the imposition of penalty is found to be illegal, the proceedings of resumption and the impugned orders do not call for interference by the High Court in exercise of its writ jurisdiction. Shri Goyal relied on the following judgments :

(i) Civil Writ Petition No. 9503 of 1996, Ajit Singh and others v. Chandigarh Administration through the Administrator, Union Territory and others, decided on 29.8.1996;

(ii) Civil Writ Petition No. 17188 of 1995, M/s. Teri Oat Estates (P) Limited v. U. T. Chandigarh and others, decided on 19.11.1996; and

(iii) Civil Writ Petition No. 10937 of 1996, Devinder Singh Pannu and others v. The Chandigarh Administration through Adviser to Administrator U.T. Chandigarh and others, 1998(2) R.C.R.(Civil) 536, decided on December 20, 1996 (1997(2) PLJ 569).

Before we deal with the two contentions urged by Shri Dass, we deem it proper to restate the wellsettled principle of law that while exercising jurisdiction under Article 226 of the Constitution for issuing a writ of certiorari, the High Court can interfere with an order passed by the judicial or quasijudicial authority or a Court or a Tribunal only if it is shown to be without jurisdiction or patently erroneous in law or violative of the principles of natural justice. An error of law which may constitute the basis for exercise of certiorari jurisdiction must be apparent on the face of the impugned order/proceedings. The finding of fact cannot be corrected by the High Court except when such finding is perverse. If the quasijudicial authority or a Court subordinate to the High Court/Tribunal records a finding of fact on the basis of appreciation of evidence then the High Court cannot interfere with the same merely because on the reappreciation of evidence and the facts placed before it, the High Court may come to a different conclusion. Adequacy and sufficiency of evidence cannot be gone into by the High Court.

It has also to be remembered that ordinarily, the High Court will not allow a party to raise new plea for the first time in writ proceedings. Likewise a point which has been given up by the petitioner or which has not been raised before the quasijudicial authority, the Court or the Tribunal, cannot be raised in writ proceedings.

The facts of the present case show that after accepting the highest bid given by him, the Administration allotted S.C.O. Site No. 46162, Sector 35C, Chandigarh to the petitioner. The letter of allotment was issued on 12.4.1988 after the petitioner had deposited 25% of the total premium. Thereafter, he got constructed a multistorey building and rented it out to different parties. The petitioner was required to pay the remaining premium in three equated annual instalments commencing from 13.3.1989. However, he did not pay the first, the second and the third instalments compelling the Assistant Estate Officer to initiate action under Rule 12(3) of the Rules of 1973. Despite the receipt of notices dated 29.5.1989, 6.6.1990 and 13.11.1991, the petitioner did not bother to pay a single penny. After the initiation of proceedings under Rule 12(3), the Assistant Estate Officer adjourned the hearing on 14 different dates with a view to enable the petitioner to clear the dues. However, the petitioner adamantly abstained from depositing the amount which was due to the respondents. In the background of these facts, the finding recorded by the Assistant Estate Officer that the petitioner is guilty of wilful default cannot be treated as erroneous, much less perverse. After perusing the facts which were available with the Assistant Estate Officer, a man of ordinary prudence could come to the conclusion that the petitioner has wilfully defaulted in the payment of instalments. We, therefore, do not find any reason to upset the finding recorded by the Assistant Estate Officer on the issue of wilful default.

The plea of the petitioner regarding his inability to pay the instalments due to financial stringency deserves to be negatived on two grounds, namely :

(i) if the petitioner was really handicapped due to critical financial position, he would have sought extension of time by making appropriate application before the competent authority. The fact that during the period of over three years, the petitioner did not make any such application is clearly indicative of the falsehood of the plea raised by the petitioner;

(ii) how could a person who was facing financial crisis erect a multistorey building. This has not been explained by the petitioner.

Moreover the petitioner did not produce any evidence either before the Assistant Estate Officer or the Chief Administrator or the Adviser to the Administrator regarding his poor financial position. Therefore, we have no hesitation to hold that the petitioner has concocted a false story of financial crisis with a view to win sympathy of the Court. However, we have remained least impressed with such a concocted plea.

Learned counsel has no explanation to offer as to why the petitioner did not raise the plea of financial difficulty before the competent authorities. Absence of any such explanation goes a long way to show that the petitioner is raising this plea for the first time with a view to avoid the consequences of the order of cancellation of the site.

Section 8A of the Capital of Punjab (Development and Regulation) Act, 1952, and Rule 12(3) and Rule 20 of the Chandigarh Lease Hold of Sites and Buildings Rules, 1973 are reproduced below for the purpose of reference :

"Section 8A of the Act of 1952. Resumption and forfeiture for breach of conditions of transfer. (1) If any transferee has failed to pay the consideration money or any instalment thereof on account of sale of any site or building or both, under Section 3 or has committed a breach of any other conditions of such sale, the Estate Officer may, by notice in writing, call upon the transferee to show cause why an order of resumption of the site or building, or both, as the case may be, and forfeiture of the whole or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent of the total amount of the consideration money, interest and other dues payable in respect of the sale of the site or building or both should not be made.

(2) After considering the cause, if any, shown by the transferee in pursuance of a notice under subsection (1) and any evidence he may produce in support of the same and after giving him a reasonable opportunity of being heard in the matter, the Estate Officer may, for reasons to be recorded in writing, make an order resuming the site or building or both, as the case may be, so sold and directing the forfeiture as provided in subsection (1) of the whole or any part of the money paid in respect of such sale.

Rule 12(3) of the Rules of 1973 Payment of premium and consequences of nonpayment or late payment. (3) In case any installment is not paid by the lessee by the date on which it is payable, a notice may be served on the lessee calling upon him to pay the instalment within a period of 3 months together with penalty which may extend upto 10 per cent of the amount due. If the payment is not made within the said period, the Estate Officer may cancel the lease and forfeit the whole or any part of the money if paid in if respect thereof which, in no case, shall exceed 10 per cent of the total amount of the consideration money, interest and other dues payable in respect of the lease :

Provided that forfeiture will not be made in addition to penalty;

Provided further that no order of cancellation or forfeiture shall be made without giving the lessee a reasonable opportunity of being heard. If the order of cancellation is for nonpayment of penalty, the lessee may show cause why the penalty should not have been levied.

Rule 20. Notwithstanding and without prejudice to other provisions of these rules the Estate Officer may, by notice in writing, cancel the lease and forfeit the whole or part of the premium and ground rent paid in respect thereof which in no case shall exceed ten per cent of the total amount of premium, interest and other dues payable in respect of the site or building or both as the case may be, on the ground of default, breach or noncompliance of any of the terms and conditions of lease or for furnishing in writing incorrect information under Rule 19 :

Provided that no order regarding cancellation of lease/forfeiture under this rule shall be made unless the lessee has been given a reasonable opportunity of being heard."

A conjoint reading of the provisions quoted above shows that lease of sites and buildings allotted or auctioned by the Administration commences from the date of allotment or auction. In a case where the lease is granted by auction, 25 per cent of the bid money is to be paid on the spot in terms of Rule 9. However, proviso to the said rule empowers the Estate Officer to accept ten per cent of the bid money and give 30 days further time to the bidder to deposit the remaining 15 per cent. Rule 9A gives power to the Chief Administrator to condone the delay in the deposit of 25 per cent of the bid money or to extend the time subject to such terms and conditions as he thinks fit including the payment of penalty not exceeding ten per cent of the amount in default. Rule 12(1) gives two options to the lessee to pay balance of the premium. If the lessee wants to pay in lumpsum then he/she/it can do so within one month from the date of allotment/auction without paying any interest. It is also open to the lessee to pay the amount in three equated instalments. Rule 12(2) lays down that if the lessee opts to pay in three equated yearly instalments, then interest at the rate of 7 per cent or such higher rate, as may be fixed by the Chief Administrator by issuing a notification in the Official Gazette before the commencement of the lease, shall be payable. Vide Notification dated 29.10.1990 the figure of 7 has been substituted by the figure of 10 in Rule 12(2). Rule 12(3) deals with the cases in which the lessee fails to pay the instalment money by the due date. It lays down that the Estate Officer may serve a notice on the lessee calling upon him to pay instalment within a period of three months together with a penalty which may extend to 10 per cent of the amount due. If the lessee does not pay inspite of such notice, then the Estate Officer can cancel the lease and/or forfeit the whole or any part of the money paid in respect thereof. However, the amount of forfeiture shall not exceed ten per cent of the total amount representing the consideration money, the interest and other dues payable in respect of the lease. The first proviso to Rule 12(3) declares that forfeiture will not be in addition to penalty. The second proviso to Rule 12(3) requires giving of a reasonable opportunity of being heard to the lessee before an order of cancellation or forfeiture can be made. Rule 12(3A) which came to be inserted vide notification dated 15.12.1990 lays down that the lessee shall be liable to pay interest calculated at the rate of 15 per cent in case the lessee fails to pay instalment or ground rent or a part thereof by the due date. The figure of 15 has been substituted by the figure of 24 by an amending notification issued in July, 1993.

If we examine the facts of this case in the light of the legal position discussed above there can be no manner of doubt that the Assistant Estate Officer, exercising the power of the Estate Officer, gave more than sufficient opportunity to the petitioner to deposit the amount of instalments. However, the petitioner exhibited total contempt for the notices issued by the respondent No. 3 and persisted with his failure to deposit the money which was due to the Administration. The conduct of the petitioner shows that he treated the property of the Union Territory, Chandigarh as his personal property and he miserably failed to fulfil the contractual obligation incurred by him at the time of acceptance of allotment. In our opinion, the cancellation of site for such wilful default cannot in any manner be termed as illegal, arbitrary or unfair.

In the cases relied upon by Shri Goyal, this Court has dealt with the question whether the cancellation of lease amounts to depriving a person of his property rights. In Devinder Singh Pannu and others v. The Chandigarh Administration through Advisor to Administrator, U.T. Chandigarh and others (supra), a Division Bench of the Court noticed the judgments of this Court in Brij Mohan v. Chief Administrator, AIR 1980 P&H 236 : 1980 PLJ 380 (Full Bench), Amrit Sagar Kashyap v. Chief Commissioner, U.T., Chandigarh, 1982 PLR 441, Ram Puri v. Chief Commissioner, Chandigarh, AIR 1982 P&H 301 (Full Bench), Jaswant Singh v. Chandigarh Administration and others, 1992 PLJ 522 : 1993(1) RRR 301 , Kulwant Pal v. Union of India, 1993(1) R.R.R. 18 : 1992 PLJ 323, Sarla Sachdeva v. Estate Officer, 1994 HRR 79 : 1991 PLJ 761 : 1992(1) RRR 479, Civil Writ Petition No. 3030 of 1994, M/s. Sandhu Builders (P) Limited v. U. T. Chandigarh, disposed of on 19.2.1996, as well as the judgments of the Supreme Court in M/s. Jagdish Chand Radhey Shyam v. State of Punjab and others, 1972 R.C.R.(Rent) 862 : AIR 1972 S.C. 2587 : 1972 PLJ 566, Babu Singh Bains etc. v. Union of India etc., JT 1996(9) SC 371 : 1996 PLJ 686 : 1996(3) RCR (Civil) 752, Panna Lal and others v. State of Rajasthan and others, 1975(2) SCC 633, Har Shankar and others v. The Deputy Excise and Taxation Commissioner and others, AIR 1975 S.C. 1121, and Assistant Excise Commissioner and others v. Issac Peter and others, JT 1994(2) SC 140, and then held :

"We respectfully agree with Sandhawalia, J., as he then was, that the power of resumption should not be resorted to lightly. However, we do not find anything in the abovequoted observations which may support the cause of the petitioner. Rather we are of the view that the Court must take notice of a pernicious tendency which has grown over the years amongst the haves of the society to grab public property by hook or by crook. Those who get lease etc. of public property by allotment through draw of lots or auction have developed the habit of not paying these dues. The Court can legitimately take notice of huge difference between the rate of interest which one is required to pay under the Act of 1952 and the rules framed thereunder and similar statutes on the one hand and interest which one gets on investment in the market on the other hand. People getting allotment of public land do not pay the instalments of lease, rent etc. with the hope that ultimately they will pay the dues along with some penalty and interest after many years and thereby make huge profit. Remedies of appeal and revision provide sufficient timecushion to multiply the profits of those who do not pay the instalments money but raise construction over the allotted piece of land and earn substantial rental income. Thus the gain of individuals is a direct loss to the public exchequer. In our considered opinion, the Estate Officer will be fully justified to exercise the power of resumption in cases of persistent default in the payment of instalment money etc. and the Courts will not readily interfere with the exercise of discretion by the competent authority in such like matters. Time has come when the Courts must not show any compassion towards those who want to enjoy public property without fulfilling their duty in terms of the conditions of allotment. Indulgence of the Court in such like matters will be contrary to public interest".

While dealing with M/s. Sandhu Builder''s case (supra), the Court observed :

"The order passed in that case does show that the Court directed the restoration of the site on payment of the outstanding dues within three months. However, there is nothing in the order dated 19.2.1996 to show that the Court had examined the provisions of Section 8A of the Act of 1952 and Rule 12 of the Rules and recorded a finding that the petitioners had a right to the restoration of the site. Rather, that appears to be a case decided on the basis of the concession and agreement between the parties. Therefore, the same cannot be treated as a precedent for holding that the orders passed under Rule 12(3) can be upset by the Court merely because the petitioner expresses his/its willingness to make the payment."

In view of the above discussion, we hold that the finding recorded by the Assistant Estate Officer regarding the wilful default of the petitioner as well as the order of cancellation of lease of the site do not suffer from any jurisdictional error or error of law warranting interference by the High Court.

There is another reason why the High Court should not interfere with the proceedings initiated under Rule 12(3) of the Rules and the orders passed by the respondents. In the appeal and the revision petition fil by him before the Chief Administrator and the Advisor to the Administrator, the petitioner did not challenge the finding recorded by the Assistant Estate Officer about the wilful default of the petitioner. Rather, the counsel appearing for the petitioner unreservedly agreed to make payment of the amount due. This is evident from paragraphs 4 and 5 of the order dated 21.2.1995 passed by the Chief Administrator and paragraphs 4 and 5 of the order dated 26.5.1995 passed by the Adviser to the Administrator. These paragraphs are quoted below for ready reference :

"Chief Administrator''s order dated 21.2.1995 :

The representative of the Estate Officer argued that an amount of Rs. 2,83,043/ is due from the appellant which includes penalty, interest and forfeiture etc. The counsel for the appellant agrees to make the part payment on 7.3.1995 in the Lok Adalat to be held in U.T. State Guest House and the remaining he shall be paying by 31st March, 1995. To this payment the representative of the Estate Officer has no objection.

In view of the commitment of the counsel for the appellant, I set aside impugned order, restore the site to the appellant subject to the condition that part payment is made on 7.3.1995 in the Lok Adalat and the remaining along with forfeiture of 2% shall be paid by 31st March, 1995 failing which the order of the Estate Officer shall become operative. The penalty on the last instalment is however waived off."

"Adviser to the Administrator order dated 26.5.1995 :

It is urged by the learned counsel for the petitioner that copy of the order of the Chief Administrator was received after the stipulated date of 7.3.1995 and also as huge amount was involved, the petitioner could not deposit the amount in time and, therefore, some more time may be given.

In this case the allotment of the site was made on 12.4.1988 and although a period of more than 7 years has elapsed yet excepting making the initial payment of 25% of the premium amount, the petitioner did not take care to make the payment of premium amount and ground rent etc. with the result that the outstanding amount due from petitioner has accumulated to the extent of more than Rs. 30.00 lacs. Anyhow taking into consideration the fact that the petitioner has already constructed the building over this site and he is now eager to clear all outstanding amounts, I take lenient view in the matter and restore the site to the petitioner subject to the condition that he shall pay Rs. 10.00 lacs by 7.6.1995 and all the balance outstanding amount in two equal instalments, Ist instalment to be paid on or before 27.6.1995 and second instalment on or before 25.7.1995 failing which the order of the Estate Officer shall become operative. However. as ordered by the Chief Administrator he is not liable to pay penalty on Ist instalment. It is also ordered and the petitioner shall be liable to pay only 2% forfeiture amount as ordered by Chief Administrator. It is urged by the learned counsel for the petitioner that the Estate Officer does not cooperate with the party concerned in preparing the account statement and, therefore, direction to this effect may be given to the quarter concerned. In order to obviate the charges that the petitioner may not come with the plea that he could not pay the amount in time because of nonsupply of account statement, it is ordered that Estate Officer shall prepare the account statement of the petitioner indicating the balance amount to be paid by him as early as possible and deliver the same to the petitioner by 31st May, 1995 and inform the Court about it. Petitioner shall also approach the Estate Officer today itself for getting his accounts settled."

Since the petitioner did not challenge the finding recorded by the Assistant Estate Officer before the appellate and the revisional authorities, he must be deemed to have given up his right to challenge that finding and he cannot now raise that issue before the High Court while invoking its certiorari jurisdiction.

There is yet another reason why the impugned orders do not warrant interference by the High Court. By giving the highest bid at the open auction and by paying only 25% of the total premium, the petitioner secured possession of a valuable public property as early as in the year 1989. Thereafter, he continued to enjoy the fruits of that property without paying a single penny to the Administration till he was compelled to do so under the orders passed by the High Court in February, 1996 and May, 1996. The contumacious conduct exhibited by the petitioner during this long period and his unsavoury attempt to grab the public property cannot be ignored by the High Court while exercising the writ jurisdiction which is essentially an equitable jurisdiction. Consequently, we refuse to show any indulgence to the petitioner merely because he has deposited the amount due pursuant to the Court''s order.

The contention of Shri Dass regarding the socalled illegality committed by the Assistant Estate Officer in imposing penalty on the petitioner deserves to be negatived on two counts. Firstly, the order Annexure P4 does not show that the Assistant Estate Officer has imposed penalty upon the petitioner. The petitioner has not produced any other evidence before the Court to show that the Assistant Estate Officer imposed penalty and at the same time forfeiture of 10 per cent of premium. Secondly, the petitioner must be deemed to have given up challenge to the imposition of penalty. If at all the petitioner felt aggrieved by the imposition of penalty and simultaneous forfeiture of the premium, he could have challenged the same before the appellate and the revisional authorities. By not doing so, the petitioner must be presumed to have consciously given up his right to challenge the imposition of penalty.

Moreover, the imposition of penalty in violation of first proviso to Rule 12(3) cannot result in invalidation of the order of cancellation of lease. At the best the petitioner can apply for refund of the amount of penalty, if any, imposed by the Assistant Estate Officer.

For the reason mentioned above, the writ petition is dismissed. He shall pay costs of Rs. 10,000/ to the respondents for forcing litigation upon them.

However, we give liberty to the petitioner to apply under Rule 21A of the Rules for restoration of site. In case such an application is made by the petitioner within two months from today, the same shall be considered and decided in accordance with law within next two months. We also direct that the petitioner shall not be dispossessed from the site for a period of four months or till the decision of his application, whichever is earlier, if he makes an application for restoration of site in view of the observations made hereinabove.

Copy of this order be given dasti to the learned counsel for the petitioner.