C.W.P. No.7851 of 1990 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.7851 of 1990 Date of Decision.26.03.2010 Jai Chand Bansal ......Petitioner Versus The Union Territory of Chandigarh through the Administrator, Chandigarh and others ....Respondents Present: Pt. Vinod Sharma, Advocate for the petitioner. Mr. K.K. Gupta, Advocate for the respondents. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? No 2. To be referred to the Reporters or not ? No 3.Whether the judgment should be reported in the Digest? Yes -.- K. KANNAN J.(ORAL) 1. The petitioner challenges the order of resumption of an industrial plot on the ground of non-payment of installments within the time stipulated. The property had been taken on leasehold basis in public auction for 99 years for Rs.2,99,000/- and the petitioner had paid 25% of the premium and the balance of the amount of 75% was payable in three equated installments. The first installment was due on 09.07.1986 and providing for a grace period by another one month, the amount could have been paid with interest @12%. This installment had not been paid and after a notice alleged to have been issued, the resumption proceedings were C.W.P. No.7851 of 1990 -2- initiated. The order of resumption reads that after serving a show cause notice under Rule 12(3) of the Chandigarh Lease Hold of Sites and Building Rules, 1973 and after affording an opportunity of being heard in person on 06.10.1987 when the allottee had still not paid that amount, the allotment was cancelled and 10% of the amount paid as premium plus ground rent and interest calculated upto the date of cancellation was ordered to forfeited. 2. The order of resumption had been challenged in appeal before the Chief Administrator principally on the ground that the petitioner had not been afforded reasonable opportunity of personal hearing before the impugned order had been passed and that the notice had been sent to the wrong address and that he never received the notice as wrongly stated in the order of cancellation. The petitioner claimed that he came to know of the order dated 06.10.1987 only on 22.12.1987 and making a calculation that he was liable to pay only Rs.30,000/- upto 05.12.1987, he had offered to pay the amount by means of a demand draft. It transpired that the demand draft, however, was returned by the Administration. The Appellate Authority set aside the order of cancellation of allotment and after ascertaining from the Administration that an amount of Rs.49,456/- remained due, directed that the said amount should be paid within 30 days from the date of the order on the condition of losing the C.W.P. No.7851 of 1990 -3- benefit if the amount was not paid within that time. This order came to be passed in November, 1989 and soon thereafter, a calculation had been made by the Administration on 06.03.1990 and had called upon the petitioner to pay Rs.58,406/-. If this amount had been paid at that time the matter ought to have come to a close but however, the petitioner challenged even this demand stating that the calculation made by the Administration was higher than the amount, which was demanded before the Appellate Authority. He also contended that the facilities had not been provided and therefore, the penalty could not have been charged from the date when the installment was allegedly due but it could have been calculated only from the time when the facilities had been provided some time later in the year 1987. Dissatisfied with the notice of demand issued pursuant to the order of the Appellate Authoirty, petitioner had again preferred a revision to the Advisor to the Administrator where he persisted with the contention that since the amenities had been provided only in March, 1987, he had calculated the amount of Rs.20,656/- as the amount legitimately due by him, against the claim of the Administration of Rs.58,406/-. The Revisional Authority accepted the contention of the petitioner partially as regards his contention that the amenities had been provided only in the month of March, 1987 and therefore, had reduced the amount of forfeiture from 10% to 7% and restored C.W.P. No.7851 of 1990 -4- the lease of the site to the petitioner subject to the petitioner depositing of the outstanding amounts on or before 31.05.1990. The reduction of the amount of forfeiture from 10% to 7%, could have had a meaning only in the event of the cancellation of the site being upheld, for if the property were to be restored to the petitioner, the question of applying of forfeiture itself did not arise. 3. The revision, therefore, must be taken as having confirmed the order of the Appellate Authority in all respects except that in the event of cancellation of lease for non- payment, the forfeiture would have been 7% and not 10%. The amount as specified before the Appellate Authority as till due which was to the tune of Rs.49,000/- and odd and the amount, which had been calculated and served on the petitioner, which was to the tune of Rs.58,406/- had still not been paid at the time when the writ petition came to be filed before this Court. The contention before this Court was that order of resumption itself was not valid, the same having been passed without following the statutory rules that required personal service of notice of resumption and an opportunity of being heard. Learned counsel appearing for the petitioner, would, however submit at the time of arguments that he does not want to enter into issues of the validity of resumption notice if the Administration was prepared to accept amount of dues that would include imposition of penalty and for interest for C.W.P. No.7851 of 1990 -5- delayed payments. Learned counsel appearing for the respondent, though would state that the amount that would fall due upto 18.02.2010 including penalty and interest was Rs.4,82,416/-, would still plead that the petitioner cannot have the benefit of restoration of the lease, he having failed to avail of the favourable orders of both the Appellate Authority and the Revisional Authority. 4. Learned counsel appearing for the petitioner refers to a decision of this Court in Ajay Singh Mann Vs. State of Haryana and others 2009(1) RCR (Civil) 474 that held that an allottee should be given an opportunity to clear all the payments in accordance with the terms and conditions of allotment and a mere default in payment itself will not entail resumption of plot. The Bench had cautioned that the power of resumption should be exercised only as a last resort keeping in mind the doctrine of proportionality of penalty and maintaining a proper balance between the maintaining of administrative order and rights and interests of individuals. This statement of law also applied in earlier ruling of a Division Bench in Anil Kumar Vs. Union Territory, Chandigarh and others (2006-1) PLR 454 that said that an offer of payment of the entire amount along with interest, costs, ground rent, which is made before the High Court during the pendency of writ petition itself would be sufficient to recall the order of resumption. The Division Bench was setting C.W.P. No.7851 of 1990 -6- down the law by examining the whole issue of resumption in a larger social context of the State actions being guided by welfare precepts and held that profiteering from a citizen could never be the aim of welfare State. The Bench sounded that the action of depriving a citizen of his property would, therefore, have to be resorted only as a matter of last resort. 5. Learned counsel appearing for the Administration refers to a decision of the Hon'ble Supreme Court recently in Municipal Corporation, Chandigarh and others Vs. Vipin Kumar Jain in Civil Appeal No.4451 of 2007 by its order dated 20.09.2007 that the auction is a price-discovery mechanism which falls in contractual realm and in a case concerning auction of commercial plots, it is basically an exercise of raising revenue for the Government. When the price was not paid within time it resulted in loss of revenue to a State. Time, it said, was the essence of contract in matters concerning auction, the property prices rising day by day. The Hon'ble Supreme Court was dealing with an interference of cancellation of allotment and dealing with the pleas of personal difficulties that an allottee had undergone as a justification for non-payment, and it rejected all those contentions and held that the intervention made by the High Court was unjustified and restored the first order setting aside the auction. 6. It is not as if that the Appellate Authority or the C.W.P. No.7851 of 1990 -7- Revisional Authority had confirmed the order of resumption. They were still affording to the petitioner a long leash and enabled the petititoner to otabin the benefit of lease, if the amount as determined by the authorities had been paid within a specified time. The petitioner challenged those orders as well and the offer which is now being made at a time where the petitioner has not availed himself of the time granted by the authorities. While as a general proposition, it could be clearly seen that resumption of properties shall not be a matter of course and that it has to be a tool of last resort when the non-payment of the amount due in an auction would result in losing the benefit of auction itself, I still think there has to be a favourable intervention in favour of the petitioner only by virtue of the fact that during the proceedings, the amounts due towards installments had been paid but what stood in contest was only a claim for penalty and the interest for delayed payments. The petitioner had been informed during the pendency of appeal that an amount of Rs.48,000/- and odd was payable and when an order was issued directing the petitioner to make the payment, the demand from the Administration made a further escalation. It allowed for the petitioner to still make it a contentious issue, for the demand came without any reference to calculations. There was an obvious difference between what was demanded before the Appellate Authority and what was ultimately served on the C.W.P. No.7851 of 1990 -8- petitioner. When the writ petition was filed, there was an order of stay of resumption and the petitioner had been allowed to continue. It is an industrial plot where the petitioner is carrying on an industry and the Administration itself would not think of using the property otherwise than by a fresh auction. Stopping an industry from its further functioning after resuming the plot and making it available for fresh auction does not serve any purpose. If the petitioner is allowed to retain possession, it shall not be without suffering an adequate detriment for what he has caused by not paying the installments in time and by entering into meaningless contention of how he was not bound to make the payment. His own contention that he had not been served with notice and that it had been served elsewhere, I reject as unmerited, for the issue of non-service itself assumes no significance for the petitioner had known about the proceedings and he had participated in the same by engaging a counsel before the Appellate Authority. If the order of resumption had been sustained by the Appellate Authority, then it would have meant serious prejudice but the Appellate Authority was setting aside the order of resumption and was affording to the petitioner an opportunity to make the payment. Against claim for Rs.58,000/- and odd, the petitioner had paid only of Rs.20,000/- and odd by picking up again frivolous pleas that all the improvements and facilities had not been provided and C.W.P. No.7851 of 1990 -9- that he would not be liable to pay penal interest for delayed payments. The amount, which the Administration had claimed upto 18.02.2010 worked out Rs.4,82,416/-, in my view, if the petitioner shall pay additional Rs.5,50,000/- within 30 days from the date of receipt of copy of order, the order of resumption already made shall be set aside and the petitioner shall have the benefit of retention of the leae. 7. There shall be no further extension of opportunity for the petitioner and if the petitioner fails to make the payment of Rs.5,50,000/- within the time as stipulated, the order of cancellation shall stand restored without any further opportunity to the petitioner. 8. The writ petition is allowed and the order of cancellation of lease is set aside on the above terms subject to the restrictions as to the amount of payment and the time for payment as indicated above. There shall be, however, no direction as to costs. (K. KANNAN) JUDGE March 26, 2010 Pankaj*