W.P.(C) No.2659/2008 Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2659/2008 Judgment reserved on: 10.07.2008 % Judgment delivered on: 07.01.2009 DUNLOP INDIA LTD. ..... Petitioner Through: Mr. C. Mukund, Mr. Pankaj Jain, Mr. Ashok Jain & Mr. Amit Kasera, Advocates versus BANK OF BARODA & ANR. ..... Respondent Through: Mr. Arun Aggarwal, Advocate CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI 1. Whether the Reporters of local papers may be allowed to see the judgment? 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be Yes reported in the Digest? VIPIN SANGHI, J. 1. In this petition under Article 226 of the Constitution of India, the petitioner seeks a writ for quashing the orders dated 12.1.2008 and 15.3.2008 passed in Eviction Petition No.1/2006 by the Estate Officer, Bank of Baroda, Zonal Branch, New Delhi appointed under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (for short `the Act‟), with a further direction that the Estate Officer should proceed only with the proceedings under Sections 4 and 5 of W.P.(C) No.2659/2008 Page 2 of 27 the Act and not with the proceedings under Section 7 of the Act. The petitioner also seeks a direction for removal of the Estate Officer and for appointment of another Estate Officer as this Court may deem fit and proper. 2. By lease dated 30.8.1977, the petitioner took on lease from respondent no.1, premises admeasuring 1382.26 sq.ft on the 7th floor of the building known as Bank of Baroda Building, 16 Parliament Street, New Delhi for a period of ten years w.e.f. 1.6.1971 on a monthly rent of Rs.3885.42 inclusive of current taxes and Rs. 400/- per month for car parking space for two motor cars in the basement. The lease was extended for a period of five years on the same terms and conditions. It was further extended with enhancement of monthly rent and service charges. During the currency of the lease, the petitioner was declared a sick company under the Sick Industrial Companies(Special Provisions) Act, 1985 by the Board for Industrial and Financial Reconstruction on 22.6.1988. 3. It appears that the petitioner went into arrears of rent and service charges. Vide notice dated 23.5.2006, the respondent bank terminated the lease and demanded arrears of rent and service charges and also called upon the petitioner to vacate the aforesaid premises. After some correspondence, the respondent no.1 invoked the provisions of the Act by filing a petition under Sections 4 and 5 of the said Act against the petitioner before the Estate Officer i.e. W.P.(C) No.2659/2008 Page 3 of 27 respondent no.2. The substantial reliefs prayed for in that petition were the following:- i) direct the respondent to forthwith evict and vacate the property in question i.e 7th Floor, Bank of Baroda Building, 16, Parliament Street, New Delhi admeasuring 1382.26 sq.ft(approx.) and deliver the actual, physical, vacant and peaceful possession of the premises to the petitioner in the same state in which it was let out; ii) direct the respondent to pay forthwith a sum of Rs.22,14,535.68 being the arrears in respect of rent and pay forthwith a sum of Rs.12,49626.00 being the arrears in respect of service charges aggregating to Rs.39,64,161.68 with interest thereon @ 18% p.a till actual realization thereof in the hands of the petitioner;” 4. Before the Estate Officer, the petitioner moved two interim applications, being I.A. Nos. 14 & 15 of 2008. I.A 14 of 2008 was preferred by the petitioner for the relief of striking out prayer clause no(ii) in the petition filed under Sections 4 and 5 of the Act. Though it was not so specifically stated in the application, learned counsel for the petitioner submits that the basis of this application was that the said relief could only be claimed under Section 7 of the Act, which had not been invoked by the respondent. I.A.15/2008 was preferred by the petitioner on the premise that the Estate Officer had no jurisdiction to adjudicate upon the prayer made in clause (ii) of the petition, as the proceedings before him were only under Sections 4 and 5 of the Act and no show cause notice had been issued under Section 7(2), 7(2A) and 7(3) of the Act. W.P.(C) No.2659/2008 Page 4 of 27 5. The Estate Officer, by his impugned order dated 12.1.2008 rejected both these contentions of the petitioner. He held that though the petition had been captioned as being 4 and 5 of the Act, prayer(ii) was in the nature of a consequential relief and that the omission to mention Section 7 of the Act in the title of the petition, or in the prayer clause of the petition cannot entail fatal consequences. He also observed that this technical objection was raised for the first time in the application. However, no such objection was taken in the written statement. Even more importantly, he also observed that the respondent no.1 had preferred another application under Section 7 of the Act for recovery of liquidated and un-liquidated damages along with the application under Sections 4 and 5 of the Act, and that the petition under Section 7 of the Act had remained unrebutted. He further held that the objection regarding maintainability of the prayer clauses made in the petition could be decided after comprehensive appraisal of pleadings, documents and evidence by the parties. He also rejected the submission of the petitioner that no show cause notice under Section 7 of the Act had been issued as prescribed under the Act. He observed that the petitioner had chosen not to respond to the application preferred by the respondent for liquidated and unliquidated damages. The petitioner was aware of the pendency of the said petition throughout and, therefore, the petitioner could not claim to have been prejudiced by non-service of notice in the prescribed form. He held that the objection was raised belatedly. The petitioner had repeatedly taken adjournments and W.P.(C) No.2659/2008 Page 5 of 27 no such objection had earlier been raised by it. He also held that apparently the petitioner wishes to delay the proceedings which require summary disposal. 6. The categorical case of the petitioner is that the petitioner was never served with the petition under Section 7 of the Act whereby the respondent claimed liquidated and unliquidated damages from the petitioner on the premise that the petitioner is an unauthorized occupant of the premises in question prior to 29.01.2008. Learned counsel for the petitioner states that even though the notice issued to the petitioner made a reference to Section 4, 5 & 7 of the Act, the reference to Section 7 of the Act was on account of the fact that the respondent had claimed arrears in respect of rent and arrears in respect of service charges. The petitioner learnt of the filing of a separate petition under Section 7 only on 29.1.2008 which led to the filing of the aforesaid two applications being IA Nos.14 and 15 before the Estate Officer. 7. Respondent No.1 Bank of Baroda has filed its counter affidavit in opposition to the writ petition. The respondent has vehemently argued that the petitioner has falsely claimed that the petitioner was not served with a copy of the petition under Section 7 of the Act prior to 29.1.2008 and that it learnt about the same at an advanced stage of the proceedings before the Estate Officer. Learned counsel for the respondent submits that, as a matter of fact, the petitioner was served with not only the composite notice under Sections 4, 5 & 7 of the Act, and the order passed by the W.P.(C) No.2659/2008 Page 6 of 27 Estate Officer on 01.07.2006 but also the two petitions, one filed under Sections 4 & 5 of the Act and the other under Section 7 of the Act, claiming liquidated and unliquidated damages. He makes reference to the averment of the petitioner itself in the earlier writ petition being W.P.(C) No.10936/2006, filed by it, wherein the petitioner had, in Para (XVI), stated “The respondent was also purportedly filed a petition under Section 7 of the Act of 1971 for recovery of liquidated and unliquidated damages”. 8. Learned counsel for the respondent also relies on the order dated 01.07.2006 passed by the Estate Officer as also to the composite notice issued to the petitioner by the Estate Officer in pursuance of that order. Copies of both these documents have been handed over in Court and taken on record. A perusal of the order dated 01.07.2006 shows that the Estate Officer while passing the said order had before him not only the petition under Sections 4 & 5 “for recovery of arrears of rent and eviction of respondent” but also “a petition under Section 7 for recovery of liquidated and unliquidated damages”. In the said order dated 01.07.2006, the learned Estate Officer in the penultimate paragraph observed “I issue notice in the above petitions and application for stay to the respondent returnable on 10.07.2006. The notices be served by registered AD post. Dasti. failing which by affixation” (emphasis supplied). The composite notice dated 01.07.2006 issued to the petitioner also clearly stated “Whereas the petitioner moved petitions u/s 4, 5 & 7 of Act alongwith application for stay”. It further stated “Notice is hereby issued to the respondents along W.P.(C) No.2659/2008 Page 7 of 27 with copy of Order dated 01.07.2006, copies of the above petitions and the application for stay”(emphasis supplied). 9. To meet the aforesaid submission of the respondent, learned counsel for the petitioner states that, in fact, when the earlier writ petition being W.P.(C) No.10639 of 2006 had been filed, the petitioner was not possessed any of the petitions-neither the one under Sections 4 & 5, nor the one under Section 7 of the Act and this is clear from the averment made in paragraph (xvii) of that petition and the petitioner‟s communication dated 03.07.2006, filed as Annexure P-13 to the petition. In Para (xvii) the petitioner had, inter alia, stated “The respondents were also requested for a copy of the eviction petition filed under Sections 4,5 & 7 of the said Act of 1971, filed by the Respondent No. 3, so that appropriate steps may be taken by the petitioner for protection of their interest in the matter. Hereto annexed and marked as ANNEXURE “P-13” is a copy of the said representation dated 03.07.2006 addressed by the Petitioner Company to the respondents.” 10. The petitioner, in the earlier writ petition made a categorical statement in Para (xv) that “at around 12.15 p.m. an order dated 01.07.2006 was received by the Petitioner Company at its Calcutta Office, which order directed the parties to maintain status-quo qua the suit premises, as it existed on the said date, till further directions. Upon scrutiny of the said order, the Petitioner Company realized that the said order has been passed by the Zonal Manager of Respondent No. 3 (respondent No. 2 herein), purportedly acting as Estate Officer under the said Act of 1971.” W.P.(C) No.2659/2008 Page 8 of 27 11. From the aforesaid, it becomes clear that the petitioner was conscious of the fact apart from a petition under Sections 4 & 5, (wherein apart from eviction, the respondent had sought the payment of arrears of rent and service charges), another petition under Section 7 of the Act for claiming liquidated and unliquidated damages, had been filed by the respondent. 12. It, therefore, cannot be accepted that the petitioner was reeling under the impression that there was only one petition filed by the respondent before the Estate Officer under Sections 4 & 5 of the Act, and that the petitioner had understood the reference to Section 7 of the Act in the Order dated 01.07.2006, and the notice of the same date issued by the Estate Officer, as being with reference to the claim for arrears of rent and service charges. As aforesaid, both the order dated 01.07.2006, and the notice dated 01.07.2006 issued by the Estate Officer, which were admittedly served upon the petitioner, categorically made reference to “petitions” and not “a petition”; “copies” of the “petitions”, and not “copy” of “a petition”, and; also “a petition under Section 7 for recovery of liquidated and unliquidated damages” and not just to “A petition under Sections 4 & 5 for recovery of arrears of rent and eviction”. In fact, in the petition under Sections 4 & 5 of the Act, the respondent had not expressly invoked Section 7 of the Act. Therefore, there would have been no occasion for the Estate Officer to have made reference to Section 7 of the Act either in the Order, or the notice dated 01.07.2006, had he not been presented with a separate petition under Section 7 of the Act claiming liquidated and W.P.(C) No.2659/2008 Page 9 of 27 unliquidated damages. There can be no manner of doubt that the Estate Officer was not only presented with a petition under Section 7 of the Act to claim liquidated and unliquidated damages, but he dealt with it and issued notice thereof to the petitioner. The respondent bank has tendered in Court a copy of the affidavit of service filed before the Estate Officer in respect of the notices issued to the petitioner. The affidavit of service of one Tika Ram, an employee of the respondent bank records that he has dispatched the notice returnable on 10.07.2006 along with copy of the order dated 01.07.2006 to the petitioner herein by Registered A.D. Post. Copies of the three postal receipts bearing nos. 3709, 3710 and 3711 were enclosed. It was, inter alia, stated that he had dispatched the notice and the order to the Branch Office of the respondent at Kolkata for effecting service on the petitioner herein “dasti”. Along with the affidavit, three copies of notices served on three offices of the petitioner in Kolkata bearing the endorsement of receipt with the seal of the petitioner showing receipt on 03.07.2006 have also been annexed to the affidavit of service. From the aforesaid, it is evident that the petitioner was served with the order and notices dated 01.07.2006. The order and notices dated 01.07.2006 clearly refer to „copies‟ of the „petitions‟. They also made reference to the “petitions u/s 4, 5 and 7 of the Act”. In case the petitioner was not served with the petition under Section 7, as claimed by it, it would have been natural for the petitioner to enquire from the respondent bank, or from the Estate Officer as to which are the „petitions‟ referred to in the order/notices dated W.P.(C) No.2659/2008 Page 10 of 27 01.07.2006 and to have demanded copies of the petitions. The fact that the petitioner did not consider it necessary to make any enquiry in this regard clearly shows that the petitioner was duly served with the requisite notice/petitions. 13. If the petitioner failed to take notice of the filing of the separate petition under Section 7 of the Act despite the clear language used in the order dated 01.07.2006 as well as the notice issued to the petitioner, which admittedly was received by the petitioner, the petitioner has only itself to blame. 14. The primary contention of the petitioner is that only after the eviction proceedings initiated under Section 4 of the Act are finally adjudicated and the Estate Officer has returned the finding that the occupant is an authorized occupant, does the Estate Officer get jurisdiction to proceed to issue notice under Section 7(2) to determine the liability of the occupant to pay damages under Section 7(3) of the Act. He submits that only upon it being finally determined that the occupant is an unauthorized occupant, the question of levy of damages can possible arise. For this he relies upon the language used by the legislature in Section 4 of the Act on the one hand and that used in Section 7 on the other hand. He points out that Section 4 permit the Estate Officer to proceed for eviction on the basis of an “opinion” that the occupier is in unauthorized occupation, where as for the purpose of initiating proceedings under Section 7 of the Act for realization of damages, the Estate Officer has to be “satisfied” that the occupier is an unauthorized occupant. He also relies upon the language used in W.P.(C) No.2659/2008 Page 11 of 27 Form-`A‟ under the Act and he Rules in which a notice under Section 4 is issued and compares the same with the Forms `B‟, `F‟ and `G‟ prescribed under the Act and the Rules which relate to Sections 5(1), 7(3) and 7(2) and 7(2A) of the Act respectively, where, once again the same distinction has been drawn. It is also the submission of the petitioner that the forms under the Act in which notices/orders are required to be issued are statutory in character and are mandatory and that unless the notices/orders are issued in the prescribed forms the same cannot be acted upon. 15. Learned counsel for the respondent bank, on the other hand submits in respect of forms A, B, D, F and G prescribed under the Act, that it would suffice if there is substantial compliance of the same. The proceedings do not get vitiated merely because of lack of strict compliance with the language employed in the said forms at the time of issuance of requisite notice/order to the occupant, when there is substantial compliance of the same. 16. Having heard the submissions of the parties I am of the view that there is no merit in this petition and the same deserves to be dismissed. 17. As I have already noticed hereinabove, the petitioner was served with the composite notice and the two petitions under Sections 4 & 5 and Section 7 of the Act for claiming liquidated and un-liquidated damages against the petitioner. W.P.(C) No.2659/2008 Page 12 of 27 18. The Form in which the notice was issued to the petitioner by the Estate Officer reads as follows: - “Whereas the undersigned being the Estate officer Designated By the Central Government Under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (hereinafter referred to “Act”) Whereas the petitioner moved petitions u/s 4, 5 & 7 of the Act along with an application for stay And Whereas after hearing the arguments advanced by Mr. Arun Aggarwal, Counsel for the petitioner, I am satisfied that the petitioner had made out a Prima facie case And Whereas I am inclined to hear the respondent also and in the meanwhile, in the interest of justice I had directed both the petitioner and the respondent to maintain status quo as it exists this day by Order dt. 1.7.06 Notice is hereby issued to the respondents along with copy of Order dated 01.07.2006, copies of the above petitions and application for stay. You the respondent is hereby directed to appear before me on 10.07.06 at 4.00pm in person or through duly constituted attorney and make submissions/pleadings after Serving the copies of pleadings to the petitioner in advance.” 19. The Form prescribed under the Act and the Rules framed thereunder, in which the notice is required to be issued to the noticee/unauthorized occupant for claiming damages under Section 7(3) of the Act as set out in Form F reads as follows: W.P.(C) No.2659/2008 Page 13 of 27 “FORM F Form of notice under sub-section (3) of Section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 To Shri/Smt./Km…………………………………………… Whereas I, the undersigned, am satisfied that you are/were in unauthorized occupation of the public premises mentioned in the Schedule I below: And whereas, in exercise of the powers conferred on me by sub-section (2) of section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, I consider the damages, amounting to Rs……………………. (Rupees ……………………………………………….) are due for the period(s) and at the rate(s) sown in Schedule II below on account of unauthorized use and occupation of the said premises; And, whereas, in exercise of the powers conferred on me sub-section (2A) of section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, I consider that you are also liable to pay simple interest to the Government/Statutory Authority on the said arrears at the rate determined by the undersigned till its final payment. Now, therefore, under the provisions of sub- section (3) of section 7 of the Act, I hereby call upon you to show cause on or before ………….. why an order requiring you to pay the said damages together with interest should not be made.” 20. Section 7(2), (2A) and (3) of the Act are relevant and they read as follows: “7(1) ……………………………………………… W.P.(C) No.2659/2008 Page 14 of 27 (2) Where any person is, or has at any time been, in unauthorized occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order. [2A] While making an order under sub-section (1) or sub-section (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with simple interest at such rate as may be prescribed, not being a rate exceeding the current rent or interest within the meaning of the Interest Act, 1978 (14 of 1978.] (3) No order under sub-section (1) or sub-section (2) shall be made against any person until after the issue of a notice in writing to the person calling upon him to show cause within such time as may be specified in the notice, why such order should not be made, and until his objections, if any, and any evidence he may produce in support of the same, have been considered by the estate officer.” 21. By virtue of Section 7(2) the Estate Officer is empowered to assess the damages on account of the use and occupation of the public premises by having regard to such principles of assessment of damages as may be prescribed, and is entitled by an order to require the person to pay the damages within such time and in such instalments as may be specified in that order. Section 7(2A) entitles the Estate Officer to direct payment of interest on arrears of rent or damages, as the case may be, at a rate not exceeding the current rate of interest within the meaning of the Interest Act. Section 7(3), which is the substantive provision laying down the W.P.(C) No.2659/2008 Page 15 of 27 procedure to be adopted for determination of arrears of rent/damages, states that no order under Sections 7(1) or 7(2) shall be made against any person, until after issuance of a notice in writing to the person calling upon him to show cause within such time as may be specified, as to why such order should not be made, and until his objection, if any, and the evidence that may be produced in support of the same have been considered by the Estate Officer. The requirement of the substantive provision is, therefore, that the Estate Officer shall issue a notice in writing to the person to grant him an opportunity to show cause against the making of an order, inter alia, under Section 7(2) i.e. for claiming damages and to provide him an opportunity to file his objections and lead evidence in the matter. The Estate Officer is required to consider the objections and the evidence, if any, led by the noticee before issuance an order, inter alia, for imposing damages upon the noticee. 22. The composite notice issued to the petitioner was accompanied by the petitions filed by the respondent under Sections 4 and 5 and Section 7 of the Act before the Estate Officer. The petitioner was, therefore, put to notice with regard to the quantum of the claim