Shri Ajaib Singh vs State Of Punjab and Another

This judgment will dispose of Civil Writ Petition Nos. 3776, 410(sic), 4141, 4161, 4162, 4192, 4193, 4194, 4227 and 4228 of 1984 as all of them involve common question of law and fact.

The facts are being taken from Civil Writ Petition No. 4192 of 1984. Khanna Improvement Trust, Khanna. framed a development scheme u/s 24 read with Section 23(2) of the Punjab Town Improvement Act, 1922 (for short the Act) known as shopping Centre Karnaal Singh road, Khanna Scheme (for short the Scheme). The State of Punjab Respondent No. I vide notification dated 4th December. 1975 sanctioned this Scheme and land measuring 5.5 acres approximately was decided to be acquired for the purpose within the boundaries of Municipal Committee, Khanna, set forth in the schedule to the notification. An award was also made by the Land Acquisition Collector of Respondent No. 2, on 24th February, 1977, acquiring land and awarding compensation at the rate of Rs. 1,88,700-30 Paise per acre. The Petitioner who owns shops abutting Karnail Singh road which are in existence for more than 30 years applied to Respondent No 1 for exemption of the same from acquisition under the powers vested in the State government under Sub-section (1) of Section 55 of the Act. His case was that the shops are constructed on the road side; no development was required to be carried out by the Trust; all facilities like electricity, water and sewerage connections with the main road were already pro-vided for the same. Respondent No. 1 issued a notification dated 10.9.1976 Annexure P. 2 in exercise of the powers conferred by Sub-section (1) of Section 56 of the Act exempting his properties i.e. the shops on Karnail Singh road from acquisition in pursuance of the earlier notification u/s 41(1) of the Act dated 4th December, 1975. It has not been disputed by the Respondents that the properties which are the subject matter of other writ petitions were also exempted through the notification Annexure P 2.

The Respondent No. 2 issued a demand notice dated 7.2.1984 Annexure P. 3 to the Petitioner demanding from him a sum of Rs. 66304/- as development charges and exemption fee and he was required to deposit the same within 30 days or in instalments with interest stipulated therein. The Petitioner protested against this demand and he received a reply dated 31st May, 1984 Annexure P. 4 from Respondent No. 2 to the effect that the development charges and exemption fee was payable by the Petitioner u/s 56 of the Act.

Through the present writ petition the Petitioner has challenged the legality and validity of the demand notice Annexure P. 3 and the letter Annexure P. 4 mainly on the ground that there was no agreement entered into between Respondent No. 2 and the Petitioner for payment of any such development and exemption fee prior to issuance of the notification Annexure P. 2 by which his shops were exempted from acquisition. He, therefore, contends that Respondent No. 2 has no power under the statute to make such a demand and to recover the amount so demanded. He has, therefore, prayed for issuance of a writ of ceritorari quashing the demand notice Annexure P. 3.

The petition has been contested by Respondent No. 2 by filing its written statement. It has been contended therein that the Petitioner is liable to pay the development and exemption charges u/s 56 of the Act. No agreement could be entered into between the Petitioner and Respondent No. 2 prior to the notification Annexure P. 2 for the reason that the Petitioner never approached Respondent No. 2 by way of an application for abandonment of acquisition in accordance with the provisions of Section 56 of the Act. It is further contended that the development charges and exemption fee has been claimed from the Petitioner in accordance with the instructions contained in the letter of the State Government dated 22nd June, 1978 Annexure R 2/2. It is further stated that Respondent No. 2 had to pay charges for laying of sewerage in the Scheme area where the shops of the Petitioner are also situate to the Punjab Water Supply and Sewerage Board as per the demand received from it vide letter dated 11.6.1982 Annexure R 2/1. It is further elaborated that at the time when the Scheme was framed in the year 1973 approximate value of the land underneath the shops of the Petitioner was Rs. 40/- per sq. yards which rose to Rs. 1375/- per sq. yards in the year 1978 and to Rs. 5250/- per sq yards in the year 1982. The Petitioner is, therefore, required to pay the aforesaid development charges and the exemption fee.

I have heard the learned Counsel for the parties at some length. I find that the demand made through the notice Annexure P. 3 is not in conformity with the provisions of Section 56 of the Act, which is reproduced hereunder:-

56 (1) Wherever in any locality comprised in any scheme under this Act the State Government has sanctioned the acquisition of land which is subsequently discovered to be unnecessary for the execution of the scheme the owner of such land, or any person having an interest therein, may make an application to the trust requesting that the acquisition of such land be abandoned in consideration of the payment by him of a sum to be fixed by the trust in that behalf;

Provided that no land shall be deemed to be unnecessary for the execution of the scheme, unless the State Government, after makinng such enquiry as it may deem fit, declares it to be so by a notification in the official Gazette.

(2) The trust shall admit every such application if it-

(a) reaches it before the time fixed by the Collector u/s 9 of the Land Acquisition Act, 1984, for making claims in reference to the land, and

(b) is made by any person, who either owns the lands, is mortgagee thereof or holds a lease thereof, with an unexpired period of seven years.

(3) The trust may admit any such application presented by any other person having an interest in the land.

(4) On the admission by the trust of any such application, it shall forthwith inform, the Collector and the Collector shall thereupon stay for a period of three months all further proceedings for the acquisition of the land, and the trust shall proceed to fix the sum in consideration of which the acquisition of the land may be abandoned.

(5) Within the said period of three months, or, with the permission of the trust, at any time before the Collector has taken possession of the land u/s 16 of the Land Acquisition Act, 1984, the person from whom the trust has agreed to accept the sum so fixed may, if the trust is satisfied that the security offered by him is sufficient, execute an agreement with the trust either--

(i) to pay the said sum three years after the date of the agreement, or

(ii) to leave the said sum outstanding as a charge on his interest in the land, subject to the payment of interest at the rate to be agreed upon by such person and the trust untill the said sum has been paid in full and to make the first annual payment of such interest four years after the date of the agreement:

Provided that the trust, may at any time before the Collector has taken possession of the land u/s 16 of the Land

Acquisition Act, 1894 accept immediate payment of the said sum instead of an agreement as aforesaid.

(6) When any agreement has been executed in pursuance of Sub-section (5) or when any payment has been accepted in pursuance of the proviso to that Sub-section in respect of any land, proceedings for the acquisition of the land shall be deemed to be abandoned.

(7) Every payment due. from any person under any agreement executed under Sub-section (5) shall be a charge on the interest of that person,

(8) If any instalment of interest payable under an agreement executed in pursuance of Clause (ii) of Sub-section (5) be not paid on the due date, the sum fixed by the trust under Sub-section (4) shall be payable on the date, in addition to the said instalment.

(9) At any time after an agreement has been executed in pursuance of Clause (ii) of Sub-section (5), any person may pay in full the charge created thereby, with interest, at the agreed rate, up to the date of such payment.

(10) When an agreement in respect of any land has been executed by any person in pursuance of Sub-section (5), no suit with respect to such an agreement shall be brought against the trust by any other person (except an heir, executor or administrator of the person first aforesaid) claiming to have an interest in the land.

(11) When an agreement in respect of any land has been executed by any person in pursuance of Sub-section (5), and any sum payable in pursuance of that Sub-section is not duly paid, the same shall be recoverable by the trust (together with interest up to the date of realisation at the agreed rate), from the said person or his successor in interest in such land in the manner provided by Section 222 of the Municipal Act, and, if not so recovered the chairman, may, after giving public notice of his intention to do so and not less than one month after the publication of such notice sell the interest of the said person or successor in such land by public auction, and may deduct the said money and the expenses of the sale from the proceeds of the sale, and shall pay the balance (if any) to the default.

According to this provision, the trust is to fix the sum in consideration of which the acquisition of land may be abandoned after an application is made to it by any owner of the property falling within the Scheme area for doing so. If the trust is satisfied that the security offered by such an owner for the consideration is sufficient he shall be required to excute an agreement with the trust to pay the amount of consideration three years after the date of the agreement or to leave the said amount outstanding as a charge on his interest in the land, subject to payment of interest at a rate to be agreed upon between such person and the trust untill the said sum is paid in full and to make payment of first instalment of such interest four years after the date of the agreement. When an agreement has been executed or when any payment has been accepted out of the sum agreed as consideration for abandonment of acquisition the proceedings for acquisition of the land shall be deemed to have been abandoned. The mode is provided for payment of the amount stipulated in the agreement by such a person in easy instalments along with interest. In case he fails to make the payment in accordance with the agreement the trust can take appropriate proceedings to recover the amount in accordance with the provision of Section 222 of the Municipal Act. The interest of such a person in the property which had been exempted would be encumbered with the charge of the amount of consideration so agreed and the same can be sold by public auction so as to recover the amount of consideration.

The Scheme of the section leaver no doubt that an agreement for payment of consideration for abandonment between the person whose property is abandoned from acquisition and the trust is a condition pre-requisite to the recovery of any such amount stipulated therein. It has not been disputed on behalf of Respondent No. 2 that no such agreement was ever entered into. Its grievance is that the Petitioner never approached it with an application for abandonment of an acquisition and in fact the government exempted his property from acquisition and it is because of this that no agreement as contemplated by Section 50 of the Act could come into being. Be that as it may, since the demand for the amount made in the notice Annexure P. 3 is not based on any agreement which is a condition precedent to the same, the demand notice Annexure P. 3 purporting to have been issued u/s 56 of the Act as explained in the letter Annexure P. 4 cannot be sustained.

The learned Counsel for Respondent No. 2 contended that Respondent No. 2 laid parks, streets, provided for sewerage and other amenities in the Scheme area of which the Petitioner has taken full benefit and as a result of this the market value of his land has increased manyfolds. While market value in the year 1973 was Rs. 40/- per sq. yards, in the year 1982 it has arisen to Rs. 5250/- per sq. yards approximately. It is not within the scope of this petition to decide whether under any other provisions of the Act Respondent No. 2 cm recover development charges. It may, however, be stated that Sections 50-A to 50-D of the Act vest the power in the Respondents to levy betterment contribution in case as a result of making of any Scheme the value of any property has increased or is likely to increase but the extent of the amount to be levied as betterment contribution and the term of years for which it has to be recovered is to be fixed in the Scheme. It is, however, not for me to adjudge in this petition whether betterment contribution can be levied on the Petitioner and can be recovered under the aforesaid provisions or whether any stipulation to this effect has been made in the Scheme.

The upshort of the above discussion is that all these writ petitions succeed. Notice dated 7.2.1984 Annexure P. 3 in C.W.P. No. 4192 of 1984 demanding development charges and exemption fee from the Petitioner and similarly notices issued by Respondent No. 2 which are the subject matter of the other writ petitions are quashed. There shall, however, be no order as to costs.