CWP No.1619 of 2011 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.1619 of 2011 Date of decision:26.08.2011 M/s Tyfort Sales Promotion Pvt. Ltd. ..... Petitioner Versus State of Punjab and others ..... Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA Present: Mr.R.S.Bains, Advocate for the petitioner. Mr.Puneet Gupta, Addl.A.G., Punjab for respondent No.1 Mr.Balwinder Singh, Advocate for respondents No.2 & 3. ***** RAJIVE BHALLA, J. (ORAL) Prayer in this petition is for issuance a writ, order or direction setting aside orders dated 30.11.2010 (Annexure P-13) and 20.11.2009 (Annexure P-3/T). Counsel for the petitioner submits that though the petitioner was allotted a plot measuring 5510.50 square yards, in an open auction, but on account of global recession and ill health of its C.E.O., the petitioner made a request to the Estate Officer to cancel the allotment. Before this request could be accepted, the Estate Officer, Patiala, vide order dated 20.11.2009 cancelled the allotment for default in payment of instalments and ordered forfeiture of 10% of the total consideration. The petitioner filed an appeal where the forfeiture amount was reduced to 5% but in a revision filed by the Punjab Urban Development Authority (for short PUDA), the order passed by the Estate Officer was CWP No.1619 of 2011 -2- restored. Counsel for the petitioner further submits that Section 45 of the Punjab Regional and Town Planning and Development Act, 1955 (hereinafter referred to as the Act), empowers PUDA to resume a plot, impose a penalty and order forfeiture upto 10% of the total consideration, interest and other dues. The maximum forfeiture of 10%, however, cannot be imposed arbitrarily. The use of the words “which in no case shall exceed ten percent...”, in Section 45 of the Act, clearly indicate that the Estate Officer may impose a lesser forfeiture. The fact that the petitioner did not respond to the show cause notice, does not absolve the Estate Officer of his statutory obligation to assign reasons while imposing the maximum forfeiture, particularly when in similar cases a much lesser forfeiture has been imposed. It is further argued that as the appellate authority reduced the penalty to 5%, the revisional authority had no jurisdiction to set aside this order and restore the penalty to 10%, by holding that the Estate Officer is not required to assign any reasons. Counsel for PUDA submits that as the petitioner did not respond to the show cause notice and caused a loss to PUDA, the Estate Officer, was justified in imposing a maximum forfeiture of 10%. It is further submitted that as the petitioner did not furnish any explanation for this default, the Estate Officer was not required to assign any reason other than the default of the petitioner in paying instalments. I have heard counsel for the parties and perused the impugned orders. It is true that the petitioner has defaulted in payment of CWP No.1619 of 2011 -3- instalments and has caused a loss to PUDA. It is equally true that Section 45(3) of the Act, empowers the Estate Officer to impose a maximum forfeiture of 10%, but this power does not absolve the Estate Officer from assigning reasons while imposing forfeiture or confer legitimacy, on the order passed by the revisional authority, holding that the Estate Officer is not required to assign reasons. The discretion to impose maximum forfeiture, undoubtedly rests with the Estate Officer but as Section 45(3) of the Act uses the expression “which in no case shall exceed ten percent”, a reasoned order must precede the imposing of forfeiture whether 10% or less. Section 45 of the Act, confers a quasi judicial power, upon the Estate Officer, the appellate authority and the revisional authority. While considering the default in payment and the quantum of forfeiture to be imposed, authorities under the Act, are required to consider the facts, the explanation if any and only then after by assigning clear and cogent reasons, preceded by a discernible process of reasoning, impose a forfeiture of 10% or less. The absence of reasons would render such an order void. The Estate Office has imposed a forfeiture of 10%. The appellate authority reduced this amount to 5% but the revisional authority has restored it to 10% by holding that the Estate Officer is not required to assign any reasons. The operative part of the order passed by the revisional authority reads as follows: - “I have carefully considered the submissions made by the Ld. counsel for both the parties. I find no force in CWP No.1619 of 2011 -4- the submissions made by the Ld. counsel for respondent No.1 as 10% is the upper limit to which the amount deposited by respondent No.1 could be forfeited and no reasons are required to be given so long as the forfeited amount is below 10%. I am also not inclined to agree with the Ld. counsel for respondent No.1 that only 10% of the amount of 10% initially deposited by respondent No.1 could be legally forfeited as contended by the Ld. counsel.” The finding recorded by the revisional authority that the Estate Officer is not required to record reasons, if the forfeiture is less than 10%, is to say the least incomprehensible. The forfeited amount is 10% and not less than 10%. The revisional authority appears to be labouring under an error that the forfeited amount is less than 10%. That apart, the finding that no reasons are required to be recorded is perverse, arbitrary and an anathema to the well establish principles of adjudication. The sine qua non of any adjudicatory process is the assigning of reasons preceded by a perceptible process of reasoning. The impugned order holding that the Estate Officer is not required to assign any reasons is, therefore, void. In this view of the matter, I have no option but to partly allow the writ petition, set aside order 30.11.2010 (Annexure P-13) and remit the matter to the revisional authority to consider and decide the matter afresh, in accordance with law. Lest this order is misunderstood as a direction that the respondents cannot or should not impose the maximum forfeiture, it is hereby clarified that the right to impose maximum forfeiture is statutorily conferred but may only be exercised after assigning clear CWP No.1619 of 2011 -5- and cogent reasons. Parties are directed to appear before the Joint Secretary to Government of Punjab, Department of Housing and Urban Development Chandigarh-cum-Revisional Authority, on 12.10.2011 who shall decide the matter within three months of the receipt of a certified copy of this order. 26.08.2011 [RAJIVE BHALLA] shamsher JUDGE