Pioneer Timber Products vs Chandigarh Administration and Others

G.S. Singhvi, J.—The petitioner, who is tenant of M/s Om Prakash Aggarwal in respect of plot No. 662, Phase-I, Industrial Area, Chandigarh, has filed this petition for quashing the orders Annexures P-17, P-19 and P-21 passed respectively by the Assistant Estate Officer, exercising the powers of the Estate Officer, the Chief Administrator and the Advisor to the Administrator, Union Territory, Chandigarh on the ground of violation of natural jus- tice, discrimination and arbitrariness.

The facts relevant for the purpose of deciding this case are that proceedings u/s 8-A of the Capital of Punjab (Development and Regulation) Act, 1952 (hereinafter described as the 1952 Act) were initiated against M/s Om Parkash Aggarwal, owner and N.K. Sharda, who has been described as tenant of Plot No. 662, Phase-I, Industrial Area, on the ground of misuse of premises. Vide order Annexure P-17, dated 7.9.1989, the Assistant Estate Officer resumed the site and forfeited 10% of the total price plus interest paid in respect of sale of the site. The appeal filed by the petitioner was dismissed by the Chief Administrator on 19.6.1990. The Adviser to the Administrator, before whom the petitioner filed revision petition, rejected the petitioner''s contention that the order of resumption which was passed without giving notice and opportunity of hearing to him was liable to be declared as nullity. He held that the notice issued by the Assistant Estate Officer proposing resumption of the site was duly served upon the petitioner. Notwithstanding this finding, the revisional authority ordered the restoration of site subject to the condition that the petitioner shall remove misuse on or before 31st March, 1992.

The petitioner has challenged the impugned orders mainly on the following grounds :-

(a) the order of resumption of the plot is liable to be declared as null and void because of non-compliance of the provisions of the Act and the Rules and the principles of natural justice;

(b) the action initiated by the Chandigarh Administration is discriminatory, inasmuch as no action has been taken to resume other sites in spite of the fact that the occupiers are running industries in violation of the conditions of allotment; and

(c) the proceedings of resumption initiated after more than 30 years are liable to be quashed on the ground of arbitrariness and mala fides.

In the written statement, the respondents have contested the petitioner''s assertion regarding non-service of notice. They have pleaded that the service of notice by affixation was treated sufficient because the petitioner was avoiding acceptance of notice. They have also controverted the petitioner''s plea of discrimination and unreasonableness. However, it is not necessary to make a detailed reference to the other averments made in the written statement because, in our considered opinion, the order of resumption is liable to be set aside solely on the ground of violation of the principles of natural justice.

The record produced by Shri Ashok Aggarwal shows that notice u/s 8-A of the 1952 Act, as amended by Chandigarh Amendment Act No. 17 of 1973 was issued to the owner Shri Om Parkash Aggarwal on 26.5.1989. A copy of notice was also forwarded to the petitioner. The process server reported that the notice could not be served because the factory was closed due to disconnection of electric supply. On the notice dated 6.7.1989, the process server reported that the service could not be effected because Shri N.K. Sarda was reported to be out of station, He, however, pasted a copy of the notice. On the copy of notice dated 4.8.1989, the process server made a report that the factory was found closed and, therefore, he has pasted the notice on the premises.

In the background of above noted facts, it is to be decided whether the notice proposing resumption of the site can be treated as duly served. For deciding this contentious issue, we may refer to the provisions of Section 8-A of the 1952 Act and Rule 2 of the Capital of Punjab (Development and Regulation) (Service of Notice) Rules, 1974. These provisions read as under:-

1952 Act:

"8-A. 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 the sale of any site or building or both, u/s 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 percent 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 Sub-section (i) and any evidence he may produce in support of the same and after giving him 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 sub-section (1), of the whole or any part of the money paid in respect of such sale.

1974 Rules:

(1) A notice required to be served or which may be served upon any person under any of the provisions of the Capital of Punjab (Development and Regulation) Act, 1952 or any of the rules made thereunder shall, if practicable, be served (a) personally on the person to whom it is addressed, or failing him (b) his recognised agent or (c) any adult member of his family usually residing with him.

(2) If service cannot be so made, or if acceptance of service so made is refused, the notice may be served by affixing a copy thereof at the usual or last known place of residence of the person to whom it is addressed, or if that person does not reside in Chandigarh, then by affixing a copy of the notice on some conspicuous place in or near the building or the site to which the notice relates.

(3) A notice may, if the issuing authority so directs, be served on the person named therein, either in addition to or in substitution for any other mode of service, by forwarding the notice by post in a letter addressed to the person and registered under Chapter VI of the India Post Office Act, 1898.

(4) When a notice is so forwarded in a letter, and it is proved that the letter was properly addressed and duly posted and registered, the issuing authority may presume that the notice was served at the time when the letter would be delivered in the ordinary course of post.

(5) A notice may, if the issuing authority so directs, be served on the person named therein by publishing the same in any newspaper having circulation in the locality."

A careful analysis of Section 8-A(1) of the 1952 Act shows that it envisages issuance of notice to the transferee requiring him to show cause why an order of resumption of the site or the building and forfeiture of the money may not be made on the allegation of non-payment of instalments or violation of the conditions of sale. The competent authority can pass order for resumption only after considering the cause, if any, shown by the transferee and evidence which he may produce in support of his case. Section 8-A(2) speaks of giving reasonable opportunity of hearing to the transferee and recording of reasons. The manner in which notice envisaged in Section 8-A of the 1952 Act is required to be served has been provided in Rule 2 of the 1974 Rules. Clause (1) thereof requires that the notice shall be served personally on the person to whom it is addressed or failing him, his recognised agent or any adult member of his family usually residing with him. Service of notice by affixation can be resorted only if the same cannot be served in the manner indicated in Sub-rule (1) or if the person concerned refuses to accept the notice.

In the present case, the notice issued to the petitioner was not offered personally to Shri N.K. Sarda or any other authorised representative of the petitioner. The report made on the first notice shows that the process server found the factory to be closed. The second and the third notices were affixed on the premises without making any endeavour to serve the notice personally upon the representative of the petitioner in terms of Rule 2 of 1974. As a matter of fact, during the, hearing of the petition learned counsel for the respondents fairly conceded that notices issued by the Assistant Estate Officer were not offered personally to the occupier of the plot. In view of this, it must be held that the finding recorded by the revisional authority on the issue of service of notice upon the petitioner is contrary to the record. As a logical corollary, it must be held that the order of resumption of site passed by the Assistant Estate Officer without ensuring service of notice upon the petitioner is nullity and it is liable to be quashed.

In view of the above mentioned finding, the orders passed by the appellate and the revisional authorities are also liable to be invalidated.

For the reasons mentioned above, the writ petition is allowed with liberty to the competent authority to pass fresh order in accordance with law. For the purpose of affording hearing to the petitioner and the owner of the site, we direct that,-

(i) within three weeks from today, the Assistant Estate Officer shall serve notice of fresh hearing upon the landlord. He shall fix the date of hearing as 16.11.1998;

(ii) the petitioner shall appear before the Assistant Estate Officer, exercising the powers of the Estate Officer, Chandigarh on 16.11.1988;

(iii) within four months, thereafter, the competent authority shall pass appropriate order after giving reasonable opportunity of hearing to the petitioner and the owner of the site.

Copy of the order be given dasti to the learned counsel appearing for the Chandigarh Administration by the, Bench Secretary, after due attestation under his signatures.