Lt.Col.Balraj Chhibbar and 96 Others vs New Okhla Industrial Development Authority,Sector 6,NOIDA,Ghaziabad and Another

R. A. Sharma, J.—All the writ petition involve the same controversy With the consent of the learned counsel for parties Writ Petition No. 27040 of 1991, Lt. Col. Balraj Chhibbar v. New Okhla Inbustrial Development Authority. has been made the leading case and from it necessary facts will be stated hereinafter.

In 1971 a Cooperative Society known as Kendriya Sarkari Seva Sahkari Bhoomi Tatha Garah Nirman Samiti Ltd. (hereinafter referred to the Society) was formed by various persons most of whom belonged to the service of Central Government. The Society was registered under U. P. Cooperative Societies Act (hereinafter referred to as the Act) in November 1971 and between 1973 and April 1976 it purchased about 1250 Bigha of land situate in three villages of district Ghaziabad. On 151976 New Okhla Industrial Development Authority (hereinafter referred to as the NOIDA) was constituted under U. P. Industrial Area Development Act, 1976 (hereinafter referred to as the Development Act). The land which was purchased by the Society was acquired for NOIDA in 197677. . Acquisition of its land was challenged by the Society and ultimately the matter was settled between the Society and the NOIDA, according to which only those members of the Society to be given plots by the NOIDA who were bonafide members as on 151976, which fact is to be duly certified by the Deputy Registrar of the Cooperative Housing Society, Meerut. In pursuance of the said agreement list of 1088 members of the Society was submitted by the Society to the NOIDA. The NOIDA sent this list to the Deputy Registrar of the Housing Society for verification. The Deputy Registrar after verification and inspection submitted report to the NOIDA declaring all the 1088 members as genuine and bonafide with reference to the cut off date (151976). Thereafter the plots were allotted to those members and from December 1985 to October 1986 lease deeds of the plots were executed by the NOIDA in favour of aforesaid members including the petitioners. As required by the NOIDA the members deposited 20 per cent of the cost of the land determined by ii. From 1986 to 1989 the instalments were also paid by these persons.

It appears that the Executive Director of the Society in his letter, dated 2071990, written to the Chairman NOIDA regarding extension of time to the allottees, has mentioned that 142 members of the Society acquired membership after 151976. In view of above statement in the said letter NOIDA issued notices to the 142 members including the petitioners asking them to showcause as to why leases executed in their favour be not cancelled under clause (b) of Part III of the lease deed on the ground that they were executed in their favour on account of misrepresentation and misstatement. Petitioners in reply to the said notices submitted their representations. The Executive Director of the Society thereafter sent a letter, dated 6121990 to the Chairman, NOIDA mentioning therein that these members had paid their admission fee before 151976 and as per record of the Society they are the members with effect from the date they deposited their admission fee. It appears that enquiry was also made by the Assistant Registrar of the Cooperative Societies and in his report (Annexure 21 to the writ petition) he has stated that 142 members are genuine and bonafide members of the Society having been enrolled before 151976. The Executive Director has also clarified his observation made in his earlier letter, dated 2071990 by letter, dated 791991, mentioning therein that while writing the earlier letter full facts were not brought to his notice on account of which it was inadvertently written therein that 142 members were enrolled after 151976, whereas correct facts are that they were enrolled before 151976. Pending consideration of their representations against showcause notices petitioners filed a writ petition No. 18157 of 1991 before this Court which was dismissed on 1171991 with the observations that the concerned authority shall take decision within the specified time. Thereafter representations were filed afresh before NOIDA and vide his order, dated 2051991 ChairmancumChief Executive Officer, NOIDA had rejected the representations holding that 142 members including the petitioners acquired their membership after 151976 and they filed false affidavits at the time of execution of the lease deeds. By the same order the leases which were executed in favour of petitioners in 198586 were determined and the amount deposited by them as cost of the land, was forfeited. In the last paragraph of the order cancelling the leases it was however, mentioned that the petitioners are at liberty to seek revocation of the order in case they are able to produce some cogent and convincing evidence in support of their enrollment as members of the Society before 151976. Being aggrieved, the petitioners have filed this writ petition.

Respondents have filed counteraffidavit and the petitioners have filed rejoinderaffidavit in reply thereto.

Learned counsel for the petitioners has raised four contentions, viz. (I) there is no fraud, misrepresentation or misstatement made by the petitioners so as to justify the cancellation of the leases; (2) the NOIDA cannot be judge in its own case and, therefore, it cannot assume jurisdiction to decide the question as to whether petitioners are guilty of fraud, misrepresentation or misstatement. As such a question can only be decided by Civil Court, it is not open to the NOIDA to cancel the lease deeds and in any case it cannot take possession of the plots by force ; (3) there is no justification for forfeiting the amount deposited by the petitioners toward the cost of the land ; and (4) the lease deeds executed in the year 198586 in favour of the petitioners, cannot be cancelled after long gap of time and such an action is arbitrary and violative of Article 14 of the Constitution of India.

Learned counsel for the NOIDA apart from disputing the above contentions, has raised three preliminary objections, namely, (i) rights of the parties are governed by a contract, breach of which cannot be agitated under Article 226 of the Constitution as the lease in question is nonstatutory contract; (ii) in view of the last para of the impugned order it is open to the petitioners to place any proof of their memberships before NOIDA and if they do so the impugned order can be recalled ; and (iii) petitioners have alternative remedy before the State Government under Section 41(3) of the U. P. Urban Planning and Development Act, 1973.

The impugned order cannot be sustained for two reasons, viz. (1) Whether the petitioners were the members of the Society as on 151976, is a question which has to be decided on the basis of relevant provisions of the Act, Rules and the Byelaws. Section 2(n) of the Act defines a member of the Society as a person who joins in the application for registration of the Society or a person admitted to membership after such registration in accordance with the provisions of the Act, Rules and the Byelaws. It is admitted by the petitioners that they are not the persons who joined in the application for registration of the Society. They claim to have been enrolled as members thereafter. The fact that the petitioners had deposited membership fee before 151976, which was duly accepted by the Society, at that time is not disputed by the respondents. What is contended on their behalf is that mere deposit and acceptance of membership fee will not make the petitioners as members of the Society, unless they also subscribed to the specified shares and it is only thereafter that the members can be lawfully enrolled. But there is no such finding in the impugned order. In fact the impugned order has been passed without taking into consideration the relevant provisions of the Act, Rules and the Byelaws. Although the question as to whether a person is a member of the Society can only be decided on the basis of relevant provisions of the Act, Rules and the Byelaws of the Society but in the instant case such an exercise has not been done. (2) Sections 17 and 18 of the Contract Act define fraud and misrepresentation. Section 19 of the same Act makes the contract voidable when consent to an agreement is caused by coercion, fraud or misrepresentation, at the option of the party whose consent was so caused. However, exception to Section 19 has laid down that if the consent to an agreement is caused by misrepresentation or by silence of fraud, the contract nevertheless is not voidable if the party, whose consent was so caused, had the means of discovering the truth with ''ordinary diligence. The exception is quoted below :

"Section 19.......................... ...

Exception.U such consent was caused by misrepresentation or by silence, fraudulent within the meaning of Section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence."

Supreme Court in Shri Krishna v. Kurukshetra University, AIR 1976 SC 376, while dealing with the plea relating to fraud, has laid down as under :

"It is wellsettled that where a person on whom fraud is committed is in a position to discover the truth by due diligence, fraud is not proved."

In view of the exception to Section 19 of the Act, same principle is applicable to the lease of misrepresentation, misstatement. Therefore, even if the lease was executed in favour of petitioners by NOIDA due to misrepresentation or misstatement it cannot be avoided if the NOIDA had the means of discovering the truth with ordinary diligence. These aspects have not been dealt with by the respondents while deciding the controversy by the impugned order.

As we are deciding the writ petition on the first question it is not necessary to go into the other questions raised by the learned counsel for the petitioners.

Before parting with the case it may be deserved that the preliminary objections raised on behalf of the respondents cannot be sustained. NOIDA has been constituted under the Development Act. The functions of this authority have been specified by Section 6 of the Act. Under Section 7 it has been authorised to sell, lease or otherwise transfer whether by auction, allotment or otherwise any land or building of belonging to it in industrial development area on such terms and conditions as it may, subject to any rules that may be made under the Act, think fit to impose. Section 13 of the same Act empowers the authority to impose penalty in the event of default in payment of consideration money or instalments. It is thus apparent that power to sell or lease any property vests in the NOIDA by virtue of statutory provisions. The contracts/leases executed by it cannot, therefore, be said to be purely non'' Statutory contract. Decisions of Hon''ble Supreme Court in the case of Bareilly Development Authority v. Ajay Pal Singh, AIR 1989 SC 1076 and of this Court in M/s. Shree Raghunath Alloy and Steel Castings Pvt. Ltd. v. New Okhla Industrial Development Authority, Writ Petition No. 17007 of 1989, decided on May 2, 1990, which have been relied upon by the learned counsel for the respondents cannot be of any assistance to him because in the case of Bareilly Development Authority (supra) the contracts therein were found to be nonstatutory and in the case of M/s. Shree Raghunath Alloy and Steel Castings Pvt. Ltd (supra), it was admitted that the deed executed between the petitioner therein and the NOIDA was a nonstatutory contract. This is clear from the first page of the judgment itself wherein it has been observed as under:

"It is not disputed that the lease deed executed between the petitioner and NOIDA authorities is a nonstatutory contract/''

That apart, the provisions of the Development Act do not appear to have been brought to the notice of this Court in that case. The decision which is based on the admission of the parties cannot be used as a precedent in the subsequent cases. In this connection it may be mentioned that recently Supreme Court in Indore Development Authority v. Smt. Sadhana Agarwal, JT 1995 (3) SC 1 decided on 731995, after considering the case of Bareilly Development Authority (supra), wherein was involved the contractual dispute relating to the escalation of the price of the land, has laid down that even in the cases of escalation of price of the land/flats the Development Authorities cannot act arbitrarily and if and when their action is challenged they own a duty to the High Court to explain and to satisfy the Court the reasons for such escalation. The power of the High Court to interfere even in such cases, though on limited grounds, was thus upheld by the Hon''ble Supreme Court. The first objection as such, has to be rejected.

The second objection also deserves the same fate. It is true that in the last para of the impugned order it has been mentioned that the petitioners are at liberty to seek review of that order in case they are able to place some cogent and convincing evidence in support of their claim. Learned counsel for the petitioners has stated that whatever petitioners have with them they have produced before the authority and there is nothing more with them and, therefore, the question of applying for review before the concerned authority, does not arise.

So far as the third objection is concerned, it is true that revision could have been filed under Section 41(3) of U. P. Urban Planning and Development Act, 1973 before the State Government against the impugned order. But this objection should have been raised by the respondents at the threshhold when the petition was taken up for the first time in 1991. To dismiss the writ petition now after about (sic) four years, specially when counter and rejoinder affidavits have been exchanged between the parties and the case is at the stage of admission hearing, would not be justified. In this connection reference may be made to L. Hirday Narain v. Income Tax Officer, Bareilly, AIR 1971 SC 33, wherein it was laid down as under :

"We are unable to hold that because a revision application could have been moved for an order correcting the order of the Incometax Officer under Section 35, but was not moved, the High Court would be justified in dismissing as not maintainable the petition, which was entertained and was heard on the merits."

The objection also cannot be sustained.

For the reasons given above, the matter deserves to be sent back to the Chairman of the NOIDA for deciding the issue afresh after giving reasonable opportunity of being heard to the petitioners.

These writ petitions are partly allowed. The matter is remanded back to the Chairman of the NODIA, to decide it afresh after giving reasonable opportunity of being heard to the petitioners, within two months from the date of presentation of certified copy of this order before him. In view of the facts and circumstances of the case there shall be no order as to costs.