Punjab Book Centre vs Union Territory, Chandigarh and Others

K.S. Tiwana, J.—Civil Writ Petition No. 11 of 1980 Punjab Book Centre v. U.T. Chandigarh and others, which was admitted to a Division Bench and Civil Writ Petitions No. 495 of 1980, Ram Sarup Leekha v. U.T. Administration, Chandigarh and another, 738 of 1980, Amar Natk etc. v. U.T. Administration, Chandigarh and others, 1576 of 1980, Gian Singh and others v. U.T., Administration, Chandigarh and others; and 1981 of 1980, Avtar Singh v. U.T. Administration, Chandigarh and others, which were heard together by us because of the common questions of law involved in them. The facts of these petitions are almost similar except that in four C.W.P. Nos. 11 of 1980, 495 of 1980, 738 of 1980, the sites were acquired by the petitioners in open auction being the highest bidder in different Sectors of Chandigarh and in C.W.P. No. 1981 of 1980 an industrial plot was allotted to the petitioner of that case, on his application. The petitioners in all these petitions had paid 25 per cent of the premium, which varried in each case, within the prescribed, period, and got the possession. All the petitioners failed to pay the first instalment of the premium, when it fell due and the Estate Officer after issue of notice under rule 20 of the Chandigarh Lease Hold of Sites and Buildings Rules, 1973 (hereinafter referred to as the Rules,) cancelled the lease and also forfeited the amount equivalent to 10 per cent of the premium paid. The appeals in all these cases before the Chief Administrator failed in C.W.P. Nos. 495 of 1980, 738 of 1980 and 1576 of 1980, the Chief Administrator restored the sites on appeal subject to the condition that the premimum and the forfeited amount was paid within the date specified. No payment was, however, made by the petitioners of these petitions and the appeals remained dismissed. The revisions before the Chief Commissioner also met with the same result. Eviction of the petitioner in C.W.P. No. 11 of 1980 was sought under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. The petitioners have filed these writ petitions under Article 226 and 227 of the Constitution of India challenging the order passed by the Estate Officer under rule 20 of the Rules and also the orders affirming those on the ground that this Rule is violative of Articles 14 and 19(1)(f) of the Constitution of India. It is also taken as a ground that rule 20 is beyond the rule-making powers as provided by section 22 of the Capital of Punjab (Development and Regulation) Act, 1952 (hereinafter referred as the Act). In C.W.P. No. 11 of 1980, an additional ground was taken that the Assistant Estate Officer, who passed the orders of cancellation of the lease, was not authorised to pass those. Lack of proper notice in some cases was also taken a ground.

In the returns filed on behalf of the respondents, the facts were admitted. The order of cancellation of the lease was defended as passed by the competent authority in accordance with provisions of law. It was averred that rule 20 was not ultra vires of Articles 14 and 19.and that the framing of that rule was in accordance with the provisions of the Act.

The leases were cancelled by the Assistant Estate Officer in C.W.P. No. 11 of 1980 and C.W.P. 1576 of 1980 vide orders dated 10th of March 1978 and 15th of May, 1978 respectively. Vide Notification No. 8854-UTFI (2)-77 of January, 1978, the Chief Commissioner exercising the powers of the Central Government conferred the powers of the Estate Officer on the Assistant Estate Officer, Chandigarh. These powers were conferred on the Assistant Estate Officer u/s 2(g) of the Act. In view of this Notification, the challenge to the powers of the Assistant Estate Officer to cancel the lease cannot be sustained.

Two-pronged attack has been made on the Rules on behalf of the petitioners. The first is that the Act does not contain any provision for the cancellation of the lease and that when the Act itself is bereft of such a provision, the Rules, which are made to carry out the purposes of the Act, cannot have any rule regarding that purpose, which is not mentioned in the Act. The second is that rule 20 is violative of Article 14 of the Constitution of India, as in the presence of rule 12, this is more drastic and clothes the authorites with more drastic and arbitrary powers.

In order to appreciate the arguments, a detailed look on the provisions of the Act and the Rules framed thereunder becomes necessary.

The Act has been brought on the Statute to "re-enact and modify the law in relation to the development and regulation of the new Capital of Punjab". Section 1 gives the name of the Act, extent of its operation and the time of its coming to force. Section 2 contains definitions, Section 3, which gives the powers to the Central Government in respect of transfers of land and building in Chandigarh is as under:-

(1) Subject to the provisions of this section, the Central Government may sell, lease or otherwise transfer, whether by auction, allotment or otherwise, any land or building belonging to the Government in Chandigarh on such term and condition as it may, subject to any rules that may be made under this Act, think fit to impose.

(2) The consideration money for the transfer under sub-section (1) shall be paid to the Central Government in such manner and in such instalments and at such rate of interest as may be prescribed.

(3) Notwithstanding, anything contained in any other law for the time being in force, until the entire consideration money together with interest or any other amount, if any, due to the Central Government on account of the transfer of any site or building, or both, under sub-section (1) is paid, such site or building, or both, as the case may be, shall continue to belong to the Central Government.

Under section 4, the Chief Administrator for the purpose of proper planning or development of Chandigarh is empowered to issue directions in regard to eviction of buildings and a duty is cast on every transferee to comply with these directions as expeditiously as possible. Section 5 gives powers to the Central Government to make rules, through notification, to bar erection of buildings and debars the transferees to violate these instructions Section 6 empowers, the Chief Administrator to see that no site or building prejudicially affects the proper planning or the amenities of Chandigarh, u/s 7, the Administration is given powers to levy tax for the amenities and also to exempt the transferees or occupiers, if they being religious or charitable institutions do not enjoy any of the amenities for which tax is levied. u/s 7-A, the provisions of the Punjab Municipal Act can be made applicable to the Union Territory of Chandigarh. Sections 8 and 8-A provide for imposition of penalty and resumption and forfeiture for breach of the conditions of transfer. These are as follows:-

8(1) Where any transferee makes any default in the payment of any rent due in respect of any lease of any site or building or both, as the case may be u/s 3, or where any transferee or occupier makes any default in the payment of any fee or tax levied u/s 7, the Estate Officer may direct that in addition to the amount of arrears, a sum not exceeding that amount shall be recovered from the transferee or occupier, as the case may be, by way of penalty:

Provided that no such direction shall be made unless the person affected thereby has been given a reasonable opportunity of being heard in the matter.

(2) Where any person makes any default in the payment of any amount, being the arreas and penalty directed to be paid under sub-section (1), such amount may be recovered from the transferee or a occupier, as the case may be, in the same manner as an arrear of land revenue.

8-A(1) If any transferee has failed to pay the consideration money or any instalment thereof on amount 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 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 sub-section (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 Sub-section (1), of the whole or any part of the money paid in respect of such sale.

Section 9 was omitted. Section 10 provides for the appeal and revision against the order passed under sections 8 and 8-A, Sections 11 and 12 deal with the preservation and planting of trees and control of advertisments. Section 13 clothes the Administration to penalise the transferees for their failure to comply with the conditions in sections 4 and 6 regarding the erection of buildings and their proper maintenance. Section 14 contains penalties, for the contravention 6f the Rules and sections 11 and 12 which can be imposed by a Court. Section 15 invests the Court with the power to inflict punishment for breach of the Rules. Section 16 provides for registration of architects, Engineers, plumbers etc., qualifications for whom are given in the Schedule to the Act regarding the certification of the plans. u/s 17, the Chief Administrator can authorise any person to enter after notice to the occupier, any building or land between sunrise and sun-set to inspect, survey, check level, take measurements of the buildings to examine whether the building has been erected or re-erected without sanction. Section 19 provides for the launching of the prosecution in a Court for violation of any of the provisions of the Act or the Rules on a complaint by the Chief Administrator or any other person authorised by him. Section 19 bars the jurisdiction of the Court to entertain matters on the questions arising u/s 8 and 8-A. Section 20 gives protection to the officers of the Administration against the acts done by them in good faith and bona fide discharge of their duties. Section 21 deals with the delegation of powers. Section 22 gives the Central Government powers to frame rules. The relevant provisions of that section are:-

22(1) The Central Government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any following matters, namely:-

(3) The terms and conditions for the breach of which any site or building may be resumed.

The rules have been framed by the Government and published vide notification dated 20th of August, 1973 under the powers conferred by sections 3 and 22 of the Act Rule 1 gives the name of the Rules and rule 2 prescribes the date of its coming into operation. Rule 3 pertains to the definitions, in which ''premium'' has been defined to "mean the price paid or promised for the transfer of a right to enjoy immovable property under these rules." Rule 4 authorises the Chandigarh Administration to allot or auction sites and building on 99 years lease. Under rule 5, the Chief Administrator may reserve sites or buildings under a scheme framed by the Chandigarh Administration for a group of individuals or persons practising any profession or carrying on any occupation, trade or business, or for the implementation of any scheme framed by the Chandigarh Administration. Rule 6 provides that the lease is to commence from the date of allotment and shall be for 99 years. It may be renewed by the Government on its expiry for such further period on such terms and conditions as it may direct. Rule 7 requires the transferees to give the complete and correct address at which a communication sent under registered cover A D is to be deemed a sufficient service. Rule 8 provides procedure for allotment of a site or building, fixing of the premium and the mode of its payment, issue of an allotment order and the consequences of non-acceptance of an allotment order within the prescribed period. Rule 9 lays down the procedure for lease in the following terms:-

In case of auction, atleast 25 per cent of the bid accepted! by the Auctioning Officer shall be paid on the spot by the intending lessee in the prescribed mode of payment in accordance with rule 12:

Provided that the Estate Officer may, in his absolute discretion, allow the successful bidder to deposit in the prescribed mode of payment not less than TO per cent of the bid on the condition that the difrence between the amount deposited and 25 per cent of the bid shall be deposited in the same manner within 10 days of auction.

Rule 10 provides for the delivery of actual possession of the site/building on payment of 25 per cent of the premium in accordance with rules 8 and 9. Rule 11 determines the premium in case of allotment, as is fixed by the Chandigarh Administration, and in the case of auction, which is the highest bid. Rule 12 which governs the payment of premium and consequences of non-payment is as follows:-

12(1) In addition to payment of 25 per cent premium under rule 8 or 9 as the case may be, the remaining 75 per cent premium may be paid in lump'' sum within 30 days from the date of allotment/auction without any interest.

(2) If payment is not made in accordance with sub-rule (1) of this rule, the balance of the 75 per cent premium shall be paid in three annual equated instalments along with interest at the rate of 6 per cent per annum or at such higher rate of interest as may be fixed by the Chief Administrator by notification in the official Gazette before the commencment of the lease. The first instalment shall become payable after one year from the date of allotment/auction.

(3) In case any instalment is not paid by the lessee by the due date, a notice shall be served on the lessee calling upon him to pay the instalment with in a month together with a penalty which may extend upto 10% of the amount due. If the payment is not made within the said period or such extended period as may be allowed by the Estate Officer, but not exceeding three months in all from the date on which the instalment was originally due, the Estate Officer may cancel the lease and forfeit the whole or part of the premium and rent already paid in respect of the lease.

(4) Each instalment shall be remmitted to the Estate Officer by the prescribed mode of payment. Every such remittance shall be accompanied by a letter showing full particulars of the site or building to which the payment pertains or a statement giving reference to the number and date of the allotment referred to in rule 6. In the absence of these particulars, the amount remitted shall be deemed to have been received only on the date when the remitter supplies correct and complete information.

Rule 13 governs the payment of rent on the sites or buildings, the mode of its payment and the imposition of penalty in case of its nonpayment Under rule 14, lease deed has to be executed after payment of the 25 percent of the premium in form ''B'' (for sites for a period of 99 years) and in form ''C'' (for buildings for a period of 99 years), as the case may be, in the manner directed by the Estate Officer within six months from the date of auction or allotment or within such period as he may direct. If the lessee does not execute the lease deed on the direction of the Estate Officer, the said authority, after affording a reasonable opportunity of being heard to the lessee, may cancel the lease. Rule 15 deals with the registration expenses and rule 16 gives the time within which the building may be erected Rule 17 provided for the general conditions of the lease and vide sub-rule (13) gives absolute discretion to the Chief Commissioner to prescribe such further conditions of the lease consistent with the provisions of the Act. Rule 18 authorises the Estate Officer to withdraw any site or building that may have been put up for auction and has been given, the authority to reject any bid without assigning any reason Under rule 19 a person is competent to bid on behalf of another in the case of partnership, company Hindu Joint family etc. and has to give the names and addresses of the partners or members immediately after the bid.

Rule 20, which deals with the cancellation and forfeiture of the premium and ground rent, is as under:-

20 Without prejudice to the remedies available under these rules, the Estate Officer may cancel the lease and forfeit the whole or Part of the premium and ground rent paid by the lessee on the ground of default breach of noncompliance of any of the terms and conditions of the lease or for furnishing any wrong or incorrect information under rule 19:

Provided that no order under this rule shall be made unless the lessee has been given a reasonable opportunity of being heard.

Rule 21 provides that in case of cancellation of lease, the allotee has to remove the structure, at his own expense within three months and restore possession of the site to the Estate Officer in the same position in which he took it at the time of the commencement of the lease. In the event of the failure of the lessee to remove it, the Estate Officer shall be competent to remove the same and recover the expenses incurred in doing so from the person whose lease deed has been cancelled or auction/allot the site along with the structure and after deducting the market value of the site refund the balance to the lessee. The Estate Officer is to determine the market value and his decision in that respect shall be final, subject to the result of the appeal. Rule 22 provides for the appeals by the aggrieved persons against the orders passed under rules 12, 13, 20 and 21 and rule 17(10) and also revision after the remedy of appeal has been exhausted.

Form ''B'' of the lease deed is a part of the Rules. In addition to the conditions of the lease as contained in rule 17, conditions in clause IV of this from ''B'' of the lease deed have been provided, which are as under:-

IV. No forfeiture of re-entry shall be effected until the lessor has served the lessee notice in writing:-

(a) specifying the particular breach complained of and

(b) if the breach is capable of remedy, requiring the lessee to remedy breach, and the lessee fails within such reasonable time as may be mentioned in the notice to remedy the breach if it is capable of remedy; and in the event of forfeiture orrentry the lessor may in his discretion relieve against forfeiture on such terms and conditions as be thinks proper.

A reference to the provisions of the Act shows that only two sections, that is, 8 and 8-A are provided in it to deal with the acts of default by the transferees. Out of these section 8 deals with the cases of the lease. It covers the cases of only that lessee who is a defaulter in the payment of rent in respect of any fee or tax levied u/s 7 of the Act The case of default in the instalments of the premium does not fall within the ambit of section 8. Section 8-A does not deal with the lease, but applies to the cases of sale only Drawing support from the absence of any reference of the default in the premium of a lease in section 6 or 8-A. Mr. H.L. Sibal, learned Senior Advocate, counsel for the petitioner in C.W.P. 11 of 1980, argued that since there was no provision for the cancellation of the lease in the Act in case of the default of premium, the Central Government could not frame Rules in regard to the cancellation of the lease. He further argued that the contravention of any rule was punishable u/s 15 of the Act, but by a Court and not by the Estate Officer, who had no power to handle the breach of any rule.

The preamble give the purpose of the Act to re-enact and modify the law in relation to the development and regulation of the new Capital of Punjab, that is, Chandigarh. Lease is not something new created beyond the sphere and scope of the Act, but it is a creation of the statute for the purpose of the development of the city of Chandigarh. The concept of lease as a part of the development of the city of Chandigarh is to be found in section 3(1) extracted above, where the Government is authorised to sell, lease or otherwise transfer any land or building. Section 3(1) further provides that such transfers may be subject to any terms or conditions the Central Government may put or the Rules it may frame Lease, sale or transfer by any other mode recognised by the Act, of the site or building is thus a purpose of the Act and the Government has been given powers u/s 22(2)(g) of the Act to frame Rules regarding the terms and conditions for the breach of which any site or building may be resumed. The Rules also contained recital at the beginning that these have been framed in exercise of the powers conferred by sections 3 and 22 of the Act. In view of the this we do not find any life in the challenge to the Rules being beyond the powers given by the Act.

At one stage an argument was raised in C.W.P. 11 of 1980 that since the lease deed was not executed, the Rules were not attracted for application and for that matter neither rule 12 nor 20 was attracted for application regarding the cancellation of the lease. It was urged that general principles of law governing the lease are to apply. Mr. R.K. Chhibbar, learned counsel appearing on behalf of the respondents in that case conceded to the argument, but we do not find if the

argument was sound or the concession of Mr. Chhibbar was correct. It is admitted that after the auction and allotment all the sites were conveyed to the petitioners through allotment orders. A printed proforma of the allotment order has been supplied to us on behalf of the respondents. Its admitted that this is the proforma on the basis of which lease-hold sites ate allotted by allotment or auction. The heading of the proforma is "Allotment of commercial sites at Chandigarh on lease hold basis" Clause 29 of this allotment order reads:-

The terms and conditions of this allotment letter shall be in addition to the provisions of Capital of Punjab (Development and Regulation) Act, 1952 and the rules made thereunder which shall be binding on the lessee.

This clause brings in the application of the rules whether the lease deed is executed or not. By accepting the lease of the sites or buildings through this allotment order, the parties had contracted to be governed by rules framed under the Act. The Rules, therefore, have necessarily to govern the cancellation of the lease.

Although lot of argument was addressed before us, but we feel that we need not enter into a controversy whether rule 20 is the presence of rule 12(3) violates Article 14 or Article 19 of the Constitution of India as it is not required in the set up of the case. A study of rule 12(3) and rule 20 shows that two procedures have been provided in the Rules for the cancellation of the lease; one is specific dealing with the cancellation of lease on account of default in the payment of the premium as contained in rule 12(3) and the other is general providing for the cancellation of the lease on more grounds, including the default of payment of premium. On a deep look into the provisions, we notice that rule 12(3) is the only rule, which is exclusively meant for resort to any case where the lessee fails to pay the instalments of the premium. The heading of rule 12 is "Payment of premium and consequences of non-payment or late payment." Though the heading of the section or the rules may not always depict their true import, but in case where there are general and specific provisions in the same statute, they do indicate the legislative intent to differentiate between the two. Sub-rules (1) and (2) of rules 12 prescribe the mode of payment and sub-rule (3) operates in the consequence of default of any instalment of the premium, the course of payment of which is determined by sub-rule (2). This rule, therefore is of a special nature and makes a specific provision to deal with the consequence of default in payments of the premium. Rule 20 on the contrary is a general provision. It comes into operation in case of breach or non-compliance of the terms and conditions of the allotment order on default in payment or even furnishing of any wrong or incorrect information under rule 19. This rule can spring into action against any transferee even on account of wrong or incorrect information under rule 19, Rule 20 is undoubtedly a general provision covering more grounds for mobilising it for use by the Administration.

When, there is, in the same statute, a specific provision and also a general one, which in its most comprehensive sense, would include metters embraced in the former, the particular provision must be operative and the general provision must be taken to affect only such cases within its general language as are not within the provisions of the particular provision. In other words, where the same statute makes general provisions in respect of a particular subject-matter and makes a specific provision with respect to general category, the latter must prevail over the general. The Rules, which are a part of the Act, being statutory, have provided for the cancellation of lease. In rule 20 cancellation is provided for several reasons but in rule 12(3) default of the premium is provided specially. In such a situation rule 20, which is general, is to give way to rule 12(3), which is special, of this category.

Even the language of rule 20 guides the course of these two rules. The rule starts with the words, "without prejudice to the remedies available under these Rules." If the invoking of this rule causes prejudice to the other provisions of the Rules, than it will immediately recede to allow the other provisions to operate in their area of operation. This rule has now been recently amended and non-postente clause has been added to it. This amendment has been noticed by us only for reference, otherwise the parties are agreed that the old rules as have been extracted above apply to the cases in hand Rule 12(3) provides for the calling upon the lessee to remedy the breach within the period of one month which can be extended upto three months. This rule creates a right in the lessee to have noticed to pay the instalments, which he has failed to pay, Rule 20 does not envisage such a procedure. Under it the Estate Officer noticing default straightaway can cancel the lease after a notice of hearing The procedure of rule 20 causes prejudice to rule 12(3) in the language in which both these rules are couched and the set up they are placed. For this reason also, rule 20 will not be invoked for cancellation of the lease in preference to rule 12(3). Even clause IV in form ''B'' meant for leases, which is statutory form being part of the Rules, as extracted above, supports our view Both the Rules do not even run parallel to each other and rule 20 has to bend in favour of rule 12(3).

"The argument of Shri Anand Swaroop that rule 20 can be invoked by the Government, as in his view it provides for speedy remedy in case the default in payment of premium is to result in cancellation, to get the money which the Government needs to re-invest in the form of loans etc. for the development of Chandigarh does not impress us. When there is a specific rule and a clause in the lease deed, anticipated to be executed, to call upon the defaulting lessee to remedy the breach, the Administration could not resort to a short-cut method to cancel the lease for the purpose of re-auctioning or re-evaluating the site by reclining against rule 20.

Admittedly, in all the cases, notices were issued under rule 20, which contrary to rule 12(3) does not give any opportunity to the defaulting lessee to remedy the breach by paying the premium for which he has made a default The procedure adopted by the Assistant Estate Officer in C.W.P. Nos. 11/1980, 1576/1080 and the Estate Officer in C.W.P. Nos. 495/1980 4 8 of 1980 & 1981 of 1980 was contrary to law being prejudicial to rule 12(3). The action so initiated and the consequential orders of cancellation of the lease so passed and affirmed in appeals and revisions cannot be upheld and are hereby quashed. Before us some of the petitioners raised pleas that they have made the payment. If the petitioners are still in default the Estate Officer will have the option to take proceedings against them in accordance, with law. All the five writ petitions are, therefore, accepted with no order as to costs.