Shakti Roller Flour Mills vs Punjab Small Industries and Export Corporation Limited and Others

Dr. Bharat Bhushan Parsoon, J.—Plot No.C-I-168, Focal Point, Phase-V, Dhandari Kalan, Ludhiana was allotted to one Piara Singh. Piara Singh, in turn had rented it out to Shakti Roller Flour Mills, plaintiff-appellant herein. Raising boundary wall, the appellant-plaintiff had been using the said plot for its business.

Litigation started between the parties. The Punjab Small Industries and Export Corporation Limited through its officers filed a petition under Section 5 of the Public Premises and Land [Eviction and Rent Recovery] Act, 1972. An ex-parte attachment order in the said petition was passed against Shakti Roller Flour Mills - Plaintiff. On an application made by the plaintiff, ex-parte attachment order against it was set-aside. Status of the plaintiff was accepted as that of a tenant.

Plaintiff was a licensee for the manufacture of special alloys steel castings. Since the original allottee of the plot, Piara Singh was not making payment of the dues to the respondent-defendant, having opportune time, plaintiff firm also applied for allotment of the plot in dispute along with a demand draft of Rs.2,00,000/- in favour of the defendant. In short, ultimately, the plot was allotted to the plaintiff. It was issued fresh allotment letter in pursuance of which he deposited a sum of Rs.1,00,000/- with the defendant through demand draft No. dated 28.4.1989. As per the communication sent to it on allotment of the plot, the plaintiff was required to deposit a sum of Rs.2,33,631/-. This bifurcation of amount was as under:-

As is apparent from the bifurcation as above, the plaintiff challenged the action of the defendant in charging the transfer fee, costs and interest.

The suit was contested tooth and nail. Possession of the plot was claimed to be illegal and it was asserted that the defendants have every right to seek possession of the vacant plot in question.

The lower court adjudicated the rival claims of the parties by framing the following issues :-

Whether the demand letter dt. 21.11.89 is illegal, malafide, arbitrary, un-constitutional and not binding on the plaintiff? OPP.

Whether the plaintiff is entitled to the injunction as prayed for? OPP.

Whether the plaintiff has already paid costs of plot in dispute? OPP.

Whether this court has no jurisdiction to try the suit? OPD

Whether the suit has not been properly valued for the purpose of court fee and jurisdiction? OPP.

Relief.

The trial Court vide judgment and decree dated 24.2.1994 decided all the issues in favour of the plaintiff holding that the lis between the parties was pending in the territorial jurisdiction of Civil Court at Ludhiana and when cause of action has arisen at Ludhiana, territorial jurisdiction of litigation cannot be denied to the Civil Courts.

On an appeal filed by the respondent-Corporation, the appellate Court without going into the depth of the matter modified the findings on issues No. 1 to 3 of the lower Court and relief of declaration with mandatory injunction was rejected. However, decree of permanent injunction was granted in favour of the plaintiff. Thus, the appeal filed by the respondent-Corporation was partly allowed by the first Appellate Court vide judgment and decree dated 10.2.1999.

In this Regular Second Appeal, it is claimed by the appellant- plaintiff that the judgment and decree dated 10.2.1999 of the first Appellate Court overflows from the pleadings of the parties and goes to developments and acts upon a totally perverse and constrained story.

At the time of admission of the present second appeal, following substantial questions of law were settled needing adjudication by this Court:-

"i) Whether the judgment and decree of the Ld. Appellate Court is perverse and contrary to the evidence on record

ii) Whether the demand raised by the respondent vide letter dated 21.11.1989 (Annexure P-8) is illegal, mala fide, arbitrary and unconstitutional and not binding on the plaintiff?; and,

iii) Whether the re-allotment of plot and after accepting the cost price of the plot, the respondents can raise a demand on account of transfer fee and other charges which were recoverable from the persons allottee in whose favour allotment has been cancelled and earnest money etc. stands forfeited?"

All these three questions of law are being taken up together as they are interconnected and dovetailing to each other.

Before embarking upon discussion on these substantial questions of law needing determination by this Court, it would be appropriate to take into account the facts about which there is no dispute.

Piara Singh was the original allottee of the plot. Allotment in his name was cancelled. Fresh allotment was made in favour of the plaintiff-appellant. Clearly enough, it was not a transfer of plot from Piara Singh to Shakti Rollers Flour Mills, plaintiff-appellant. When the allotment per se has been made afresh on the application of the plaintiff-appellant, no transfer fee could be charged. It is also relevant that even charges which were recoverable from the earlier allottee cannot be shifted to the new allottee and would remain recoverable from the earlier allottee.

DW-1, Inderpal, appearing for the defendants-respondents, in his testimony has categorically admitted all the facts including cancellation of earlier allotment in the name of Piara Singh and fresh allotment of the said plot in favour of the plaintiff-appellant. Payments made by Piara Singh towards allotment had been forfeited by the defendants.

When cross-examined, this witness has conceded that in case of fresh allotment of the plot, only cost of the price of the plot is taken from the date of allotment, whereas, interest and penal interest and transfer fee is not chargeable.

The trial Court has rightly come to the conclusion that no amount other than the cost of price of the plot is payable by the fresh allottee. Following observations of the trial Court are worthy of consideration and with approval are appended as below for ready reference:-

"Plaintiff being fresh allottee is not bound to make payment of penal interest from 20.2.78 as plaintiff only came into picture with regard to allotment of the plot in dispute when application Ex. P-3 dated 23.4.89 having been filed by the plaintiff to the defendant for allotment of the plot in dispute was taken into consideration by the defendant. The defendants have processed allotment of the plot afresh to the plaintiff. Plaintiff is not bound by terms and conditions settled in between Piara Singh and defendants, prior to filing of application Ex. P-3 by the plaintiff. Even whatsoever liability of Piara Singh was, defendants admittedly have forfeited amount whatsoever was deposited by Piara Singh. Defendants intentionally have withhold these details from the file. Even if the defendants are ever entitled to recover penal interest and other charges prior to allotment of this plot to the plaintiff, then defendants can only recover from Piara Singh and not from plaintiff. Plaintiff admittedly, is in possession of the disputed property. There is no other claimant of the plot in dispute. Defendants on the basis of possession of the plaintiff have offered the plaintiff to purchase the plot on the basis of fresh allotment. In these circumstance, it is held that demand letter dated 21.11.89 is illegal, and the same is not binding on the plaintiff. It is also held that plaintiff has already paid costs of the plot in dispute. So, plaintiff is also entitled to injunction prayed for..."

In the considered opinion of this Court, the findings arrived at by the trial Court are well reasoned and the findings recorded in the impugned judgment and decree of the first Appellate Court deserve to be reversed. Thus, restoring the judgment and decree passed by the trial Court and reversing the impugned judgment and decree of first Appellate Court, this appeal is allowed. All the substantial questions of law are answered in favour of the appellant/plaintiff. Decree sheet be prepared accordingly. No costs.