Master Rajwant Singh and Another vs Advisor to the Administrator, Union Territory and Others

G.S. Singhvi, J.—Could the Assistant Estate Officer, exercising the powers of Estate Officer, Union Territory, Chandigarh cancel the lease of the site allotted to the petitioners even though they did not commit default in the payment of instalments of premium nor did they violate the conditions of allotment? This is the question which arises for adjudication in this petition filed by Master Rajwant Singh and Master Harnam Singh through their mother and natural guardian-Smt. Joginder Kaur.

There is no dispute between the parties that after accepting the highest bid of Rs. 5,16,000/- given on their behalf at the auction of commercial sites held by the Chandigarh Administration on 10.7.1985, site of SCO No. 368, Sector 44-D, Chandigarh was allotted to the petitioners on lease-hold basis subject to the terms and conditions specified in the letter of allotment which was issued by the competent authority on 29.8.1985. Ten per cent of the premium was paid at the time of auction and 15% was deposited on 8.8.1985. However, before possession of the site could be delivered, father of the petitioners, Shri G.S. Bawa, submitted application Annexure P.2 to the Estate Officer conveying the petitioners'' inability to keep the site. He requested for cancellation of allotment and refund of the amount deposited as a part of the premium. The Assistant Estate Officer, exercising the powers of the Estate Officer, not only rejected his request but also issued notice dated 13.12.1985 under Rule 12(3) of the Chandigarh Lease Hold of Sites and Building Rules, 1973 (hereinafter referred to as ''the Rules'') proposing cancellation of the lease of the site and forfeiture of the premium. The father of the petitioners appeared before the Assistant Estate Officer on 7.1.1986 and reiterated his request for surrender of the site. This was turned down by the Assistant Estate Officer who passed order for cancellation of the lease and forfeiture of Rs. 20,000/- constituting a part of the premium. The appeal and the revision filed on behalf of the petitioners for restoration of the lease were dismissed by the Chief Administrator and the Adviser to the Administrator, Union Territory, Chandigarh though the revisional authority granted partial relief by reducing the amount of forfeiture from Rs. 20,000/- to Rs. 10,000/-.

The petitioners have challenged the impugned orders on the following grounds:-

(i) The Assistant Estate Officer did not have the jurisdiction to cancel the lease and forfeit a part of the premium because they did not commit default in the payment of instalments of premium.

(ii) The conditional offer of surrender made by their father could not have been made basis for cancellation of the lease and forfeiture of a part of the premium.

(iii) The surrender of the lease could not have been accepted by the Assistant Estate Officer ignoring the fact that it was contrary to the interest of the minors.

(iv) The dismissal of their appeal and revision should be treated as violated by an error of law because the objection raised on behalf of the petitioners to the jurisdiction of the Assistant Estate Officer to cancel the lease has not been decided by either of the authorities.

The respondents have justified the cancellation of lease by stating that the Assistant Estate Officer had no option but to do so because the petitioners were not interested in retaining the site and there is no provision in the Capital of Punjab (Development and Regulation) Act, 1952 (hereinafter referred to as ''the Act'') and the Rules.

During the course of hearing, Shri Ashok Aggarwal, Senior Counsel appearing for the respondents made a statement that possession of the site was handed over to the father of the petitioners by some official of the Estate Office on 25.3.1986 and it is still with the petitioners. When we inquired from him as to how possession of the site could be delivered to the father of the petitioners after the cancellation of lease, he replied that this must have happened due to collusion between the father of the petitioners and the concerned official of the Estate Office. He was also forth-right in stating that the working of the Estate Office, at the relevant time, left much to be desired and many officials seem to have connived with the allottees and lessees to cause harm to the public interest.

The first contention urged by Shri M.L Sarin, Senior Advocate appearing for the petitioners is that the order of cancellation of lease should be declared as nullity because the Assistant Estate Officer concerned did not have the jurisdiction to initiate proceedings under Rule 12(3) of the Rules. Shri Sarin submitted that the concerned officer could not have invoked Rule 12(3) up to 13.12.1985, the date on which show cause notice was issued because till then the petitioners did not incur the liability to deposit first instalment. Shri Sarin further argued that the Assistant Estate Officer could not have partially accepted the request made by the petitioners father, namely, to give up the allotment and at the same time reject their prayer for refund of the premium. Learned Counsel assailed the appellate and the revisional orders by arguing that the concerned authorities did not consider the point of jurisdiction urged on behalf of the petitioners. Shri Sarin invited our attention to the affidavit of Shri Ram Saran Dass, Advocate in support of his assertion that the appellate and the revisional authorities did not consider and decide the plea raised on behalf of the petitioners that the Assistant Estate Officer did not have the jurisdiction to cancel the lease by invoking Rule 12(3) of the Rules. The last submission of Shri Sarin is that the Assistant Estate Officer could not have ordered cancellation of the lease of the site ignoring the fact that the request made by their father was contrary to the interest of the minors. Shri Ashok Aggarwal conceded that the Assistant Estate Officer could not have invoked Rule 12(3) for cancelling lease of the site but argued that the order Annexure P.3 should not be invalidated because the father of the petitioners had voluntarily given up the allotment. He relied on the decision of this Court in C.W.P. No. 2570 of 1995 Harish Goel v. Union Territory, Administration and Ors., . Shri Aggarwal, then submitted that none of the legal or fundamental rights of the petitioners can be said to have been infringed due to the cancellation of the lease because they did not execute the lease in accordance with Clause 10 of the letter of allotment.

Rule 12(3) of the Rules, under which action has been taken by the Assistant Estate Office, reads as under:

"12. Payment of premium and consequences of non-payment or late payment:

xx xx xx xx (3) In case any instalment 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 a penalty which may extend upto 10 pet cent of the amount due. If the payment is not made within the said period, the Estate Officer may cancel the lease and/or forfeit the whole or any part of the money if paid in 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 non-payment of penalty, the lessee may show cause why the penalty should not have been levied."

A bare reading of the above extracted rule shows that the competent authority can initiate action for cancellation of the lease and forfeiture of the premium or a part thereof if the lessee fails to pay the instalment of premium in accordance with Rule 12(2). It envisages giving of 3 months notice to the lessee to deposit, the amount of instalment and empowers the Estate Officer to initiate action for cancellation of the lease if the lessee fails to pay the instalment along with interest inspite of the notice. It is, thus, clear that the action under Rule 12(3) can be initiated by the competent authority only if the lessee commits default in the payment of instalment of premium in accordance with Rule 12(2) and not otherwise.

The facts of this case show that first instalment of the premium was payable by the petitioners on 10.7.1986 in accordance with Rule 12(2) read with Clause 5 of the letter of allotment but 8 months before that date, show cause notice dated 13.12.1985 was issued by the Assistant Estate Officer under Rule 12(3) proposing cancellation of the lease and forfeiture of the premium. The order of cancellation of lease was also passed by the Assistant Estate Officer on 7.1.1986 i.e. more than 6 months before the first instalment was to be deposited by the petitioners. Therefore, we do not have any hesitation in holding that the order Annexure P.3 passed by the Assistant Estate Officer for cancellation of the lease of the site and forfeiture of Rs. 20,000/- is without jurisdiction.

The argument of Shri Aggarwal that the Assistant Estate Officer had the inherent jurisdiction to partially accept the surrender of the site appears attractive but merits rejection on a closer scrutiny. A careful reading of Annexure P.3 shows that instead of accepting the request made by the father of the petitioners, the Assistant Estate Officer invoked Rule 12(3) under a mistaken impression that the lease granted to the petitioners could be cancelled even though they did not commit default in the payment of instalment of premium. Therefore, we are unable to agree with Shri Aggarwal that although the Assistant Estate Officer could not cancel lease by invoking Rule 12(3), the impugned order should be sustained by treating it as an act of acceptance of surrender made by the petitioners father.

The judgment of this court in Harish Goel v. Union Territory, Administration (supra) on which reliance has been placed by Shri Aggarwal, is clearly distinguishable. A careful reading of that judgment shows that after having given highest bid of Rs. 93,50,000/- for SCO No. 198-199-200, Sector 34 and depositing 10% of the premium, petitioner-Harish Geol and his co-allottees made joint representation for surrender of the site and for refund of the amount deposited by them. The Assistant Estate Officer did not accept their request and issued order cancelling the lease of the site. He also forfeited 2-1/2% of the premium deposited by the petitioners. In the appeal, the petitioners pleaded for refund of the entire amount deposited by them. However, during the course of hearing of the appeal, counsel for the petitioners requested that the amount of forfeiture be reduced. The Chief Administrator accepted his request and reduced the amount of forfeiture. The Adviser to the Administrator, who heard their revision petition, refused to annul the forfeiture in toto. These orders were challenged by Harish Goel and Gora Lal in C.W.P. No. 2570 of 1995 and 2728 of 1995 respectively. It appears from the judgment that after cancellation of the lease of the site allotted to Harish Goel and others, the respondents re-auctioned the site and gave possession to the non-official respondents who gave highest bid in the second auction. One of the contentions urged on behalf of the petitioners was that the Assistant Estate Officer did not have the jurisdiction to cancel the lease of the site because they did not commit default in the payment of the instalments. While rejecting this plea, the Court held, as under:

"The argument of the learned counsel regarding lack of authority of the Assistant Estate Officer/Estate Officer to cancel the lease is wholly misconceived. The very edifice of the argument involving attack on the jurisdiction of the Estate Officer had been built upon an erroneous premise that the Estate Officer took action for cancellation of lease without there being any cause. The argument of the learned counsel is completely wide of margin because it is a case in which the petitioners have volunteered to surrender the plot with a request to refund the amount paid by them. Letter Annexure P-l does make a reference to the circumstances which may have contributed to the decision of the petitioners to surrender the plot, but the surrender was unconditional. It is, therefore, no longer open to the petitioners to question the cancellation of the allotment made in their favour. It is not out of place to mention that neither in their appeal nor in the revision petition filed by them before the Chief Administrator or the Adviser to the Administrator of the Union Territory, Chandigarh the petitioners questioned the cancellation of their allotment of the site. Rather, they made prayer for refund of the amount already deposited by them. This would be evident from the prayers made by the petitioners in the memo of appeal as well as the revision petition filed by them, extract of which are reproduced below:

"Prayer clause of the appeal.

So, in the interest of justice it is respectfully prayed that the order of the Estate Officer, Chandigarh be set aside, forfeited amount may be given up and the Estate Officer, Chandigarh be directed to refund the entire amount deposited by the appellants.

Prayer clause of the revision.

So, in the interest of justice it is respectfully prayed that the orders of the Court below may be set aside, the entire amount deposited by the petitioners may be refunded to the petitioners. It is further requested that no ground rent, interest may be charged."

Duting the course of arguments before the Appellate Authority, counsel appearing for the petitioners, confined his plea to the reduction of the amount of forfeiture. This is clear from paragraph 3 of the order Annexure P.8 passed by the Chief Administrator, which is reproduced below:

"3. The counsel for the appellant requested for reducing the forfeiture as he had to surrender the site due to unavoidable circumstances. In view of the this, I reduce the forfeiture to 50% of the already imposed."

In view of the fact that the petitioners never challenged the legality of the order of the Estate Officer cancelling their lease, it is no longer open to them to argue before this Court that the order Annexure P.6 passed by the Assistant Estate Officers suffers from lack of jurisdiction in so far as cancellation of lease is concerned.

We are also of the opinion that even if the Assistant Estate Officer may have committed an error in assuming that in the absence of any provision for acceptance of the application for surrender, the request made by the petitioners vide Annexure P.4 could not be accepted and he proceeded to issue notice under Rule 12(3) even though no default was committed by the petitioners to pay the instalments, the impugned order will have to be treated as an order accepting surrender of plot made by the petitioners. In any case, the petitioners do not have nay locus standi to challenge the order of cancellation after they had voluntarily surrendered the plot in favour of the Administration of the Union Territory, Chandigarh.

We also find substance in the argument advanced by the learned counsel for the official respondents that even though the Act and the rules framed thereunder do not contain any provision to deal with the application for surrender of a site, the very right to give bid at the auction of a public property inheres in itself a right to give up the property for which highest bid has been given by a party. In that event, the authority concerned is entitled to take action in accordance with the conditions of the auction or the law governing such auction. It must, therefore, be held that after having exercise the option to Surrender the plot, the petitioners are not entitled to question the legality of the cancellation order nor are they entitled to challenge fresh auction of the disputed site made by the Union Territory, Administration nor are they entitled to challenge the allotment of the site in favour of the respondents 4 to 15."

The ratio of the afore-mentioned decision cannot be applied to the facts of this case because,

(i) in that case, the lessees had not only surrendered the site and prayed to the Assistant Estate Officer to refund the amount deposited by them, they confined their prayer in the appeal and the revision to the refund of the amount forfeited by the Assistant Estate Officer. As against this, in the present case, the petitioners specifically challenged the order of cancellation of lease in the appeal and the revision and pleaded for restoration of the site; and

(ii) in that case, site was re-auctioned and allotted to third party who raised substantial construction after paying a part of the premium. In this case, site has not been allotted to any one else and the same is lying vacant.

The argument of Shri Sarin that the appellate and the revisional orders should be quashed because the concerned officers failed to apply their mind to the important question of law raised on behalf of the petitioners deserves to be accepted. A bare reading of the memo of appeal and the revision petition along with uncontroverted affidavit of Shri Ram Saran Dass, Advocate, who had appeared on behalf of the petitioners before the two authorities, shows that the petitioners did raise an unequivocal plea before them that the Assistant Estate Officer did not have the jurisdiction to pass order under Rule 12(3) for cancellation of lease because they did not commit default in the payment of premium but neither the appellate authority nor the revisional authority has decided this vital point. Therefore, it must be held that the orders passed by the appellate and the revisional authorities suffer from an error of law apparent on the face of the record.

The appellate and the revisional authorities have also failed to take notice of the fact that the petitioners had unequivocally pleaded before them that they were desirous of retaining the site and were ready to pay the amount of instalments. Therefore, in view of our finding that the order of cancellation of lease is liable to be declared nullity, the allotment made in favour of the petitioners will have to be restored subject to the condition of their paying the amount of premium together with interest.

In view of the above conclusion, we do not consider it necessary to deal with the issue whether the application submitted by the petitioners father to give up the allotment was contrary to the interest of the petitioners and, therefore, the same could not have been acted upon by the Assistant Estate Officer.

For the reasons mentioned above, writ petition is allowed. Order Annexure P.3, P.5 and P.7 passed by the Assistant Estate Officer, the Chief Administrator and the Adviser to the Administrator, Union Territory, Chandigarh are declared illegal and quashed. Consequently, the allotment of SCO No. 368, Sector 44-D, Chandigarh shall stand restored to the petitioners. The petitioners are directed to pay the amount of instalments of premium together with ground rent and interest payable under Rule 12(3) and Rule 12(3-A) within a period of 3 months from the date on which details of the dues are communicated to the petitioners by the Assistant Estate Officer/Estate Officer, Union Territory, Chandigarh who shall do so within one month from today.

Before parting with the case, we deem it necessary to take cognizance of the fact that some official of the Estate Officer connived with the petitioners'' father and handed over possession of the site to him on 25.3.1986 i.e., after 2 months and 15 days of the cancellation of lease of the site. This is prima facie indicative of the fact that the concerned official entered into a criminal conspiracy with the petitioner''s father to fritter away the public property. The fact that the possession of the site remained with the petitioners till 25.7.1990, when this Court stayed their dispossession, shows that the higher authorities of the Estate Office also indirectly abetted the commission of offence by the concerned official of the Estate Office in connivance with the father of the petitioners. We, therefore, direct the Adviser to the Administrator, Union Territory, Chandigarh to issue order for getting a criminal case against Shri G.S. Bawa, father of the petitioners and the official(s) of the Estate Office, who connived with the former and handed over possession of the site to him after cancellation of the lease by the competent authority.

An attested copy of this order be given to Shri Subhash Goyal, Advocate by the Bench Secretary after due attestation under her signatures.