BALRAJ CFAIBBAR v. NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY
1995-05-09
D.K.SETH, R.A.SHARMA
body1995
DigiLaw.ai
R. A. SHARMA, J. ( 1 ) ALL the writ petitions involve the same controversy. With the consent of the learned counsel for parties writ petition No. 27450 of 1991. Lt Col Balraj Chibbar v. New Okhla Industrial Development Authority has been made the leading case and from it necessary facts will be stated hereinafter. ( 2 ) IN 1971 a Co-operative Society know as Kendriya Sarkari Seva sahkari Bhoomi Tatha Grab Nirman Samiti Ltd. (herein after referred to as the Society) was farmed by various persons most of belonged to the service of central Government. The Society was registered under U. P. Co-operative societies Act (hereinafter referred to as the Act) in November 1971 and between 1973 and April 1976 it purchased about 1250 Bigha of land situate in there villages of district Ghazibad. On 1-5-1976 New Okhla Industrial development Authority (hereinbfter referred to as the NOIDA) was constituted under U. P. Industrir-l Area Development Act, 1976 (hereinafter referred to as the Development Act) The land which was purchased by the society was acquired for NOIDA in 1976-77. Acquision of its land was challenged by the Society and ultimately the matter was settled between the society and the NOIDA, according to which only those members of the society to be given plots by the NOIDA who were bona fide member as on 1-5-1976, which fact is to be duly certified by the Deputy Registrar of the co-operative Housing Society. Meerut In pursuance of the said agreement list of 1088, members of (be Society was submitted by the Society to the noida. The NOIDA sent this list or the Deputy Registrar of the Housing society for verification. The Deputy Registrar after verification and inspection submitted report to the NOIDA declaring all the 1088 members as genuine and bona fide with reference to the cut off date (1-5-1976 ). Thereafter the p!ofs were allotted to those members and from December 1985 to October 1986 lease deeds of the plots were executed by the NOIDA in favour of aforesaid members including the petitioners. As required by the NOIDA the members deposited 20 per cent of the land determined by it. From 1986 to 1989 the instalments were also paid by these persons.
As required by the NOIDA the members deposited 20 per cent of the land determined by it. From 1986 to 1989 the instalments were also paid by these persons. ( 3 ) IT appears that the Executive Director of the Society in his letter dated 20-7-1990, written to the Chairman NOIDA regarding extension of time to the allottees, has mentioned that 142 members of the Society acquired membership after 1-5-1976 In view of above statement in the said letter noida issued notice to the 142 members including the petitioners asking them to show-cause as to why leases executed in their favour be not cancelled under clause (b) ot Pt. III of the lease deed on (he ground that they were executed in iheir favour on account of mis-representation and mis-statement. Petitioners in reply to the said notices submitted their representations. The executive Diret r of the Society thereafter sent a letter dated 6-12-1990 to the Chairman NOIDA mentioning therein that these members had paid their admission fee before 1-5-1976 and as per record of the Society they are the members with effect from the date they. deposited their admission fee. It appears that enquiry was all made by the Assistant Registrar of the cooperative Societies and in his report (Annexure-21 to the writ petition) he has stated that 142 members are genuine and bona fide members of the Society having been enrolled before 1-5-1976 the Executive Director has also clarified his observation made iu his earlier letter dated 20-7-1990 by letter dated 7-9-1991, mentioning therein that while writing the earlier letter full facts were not brought to his notice on account of which it was inadvertently written therein that 142 members were enrolled after 1-5-1976, whereas correct facts are that they were enrolled before 1-5-1976. Pending consideration of their representations against show-cause notices petitioners filed a writ petition No 18157 of 1991 before this Court which was dismissed on 11-7-1991 with the observations that the concerned authority shall take decision within the specified time. Thereafter representations were filed afresh before NOIDA and vide his order dated 20-5-1991 Chairman-cum-Chief Executive Officer noida had rejected the representations holding that 142 members including the petitioners acquired their membership after 1-5-1976 and they filed false affidavits at the time of execution of the lease deeds.
Thereafter representations were filed afresh before NOIDA and vide his order dated 20-5-1991 Chairman-cum-Chief Executive Officer noida had rejected the representations holding that 142 members including the petitioners acquired their membership after 1-5-1976 and they filed false affidavits at the time of execution of the lease deeds. By the same order the leases which were executed in favour of petitioners in 1985-86 were determined and the amount deposited by tbem as cost of the land, was forfeited. In the last paragraph of the order cancelling the leases it was however, mentioned that the petitioners are at liberty to seek revocation of the order in case they are able to produce some cjgent and convicing evidence in support of their enrollment as members of the Society before 1-5-1976. Being aggrieved, the petitioners have filed this writ petition. ( 4 ) RESPONDENTS have filed counter-affidavit and the petitioners have filed rejoinder-affidavit in reply thereto. ( 5 ) LEARNED counsel for the petitioners has raised for contentions, viz. (I) there is no fraud, misrepresentation or mis-statement made by the petitioners so as to justify the cancellation of the lease; (2) the NOIDA cannot be judged in its own case and, the therefore, it cannot assume jurisdiction to decide the question as to whether petitioners are guilty of fraud, mis-reprrsentation or mis-statement. As such a question can only be decided by Civil court, it is not open to the NOIDA to cancel the lease deeds and in any case it cannot take possession of the plots by force; (3) there is no justification for forfeiting the amount deposited by the petitioners towards the cost of the land; (4) the lease deeds executed in the year 1985-86 in favour of the petitioners, cannot be cancelled after long gap of time and such an action is arbitrary and violative of Article 14 of the Coastitution of India.
( 6 ) LEARNED counsel lor the NOIDA apart from disputing the above contentions, has raised three preliminary objection, namely (i) rights of the parties are governed by a contract, breach of which cannot be agitated under article 226 of the Constitution as the lease in question is non-statutory contract; (ii) in view of the last para of the impugned order it is open to the petitioners to place any proof of their memberships before NOIDA and if they do so the impugned order can be recalled; and (iii) petitioners have alternative remedy before the State Government under Section 41 (3) of the u. P. Urban Planning and Development Act, 1973, ( 7 ) THE impugned order cannot be sustained for two reasons, viz. (1)whether the petitioners were the membes of the Society as on 1-5-1976, is a question which has to be decided on the basis of relevant provisions of the act, Rules and Byelaws. Section 2 (n) of the Act defines a member of the society as a person who joins in the application for registration of the Society or a person admitted to membership after such registration in accordance with the provisions of the Act, Rules and the Byelaws. It is admitted by the petitioners that they are not the persons who joined in the application for registration of the Society. They claim to have been enrolled as members thereafter. The fact that the petitioners had deposited membership fee before 1-5-1976, which was duly accepted by the Society at that time is not disputed by the respondents, What is contended on their behalf is that mere deposit and acceptance of membership fee will not make the petitioners as members of the Society, unles they also subscribed to the specified shares and it is only thereafter that the member can be lawfully enrolled. But there is do such finding in the impugned order. In fact the impugned order has been passed without taking into consideration the relevant provisions of the Act, rules and the Bye-law. Although the question as to whether a person is a member of the Society can only be decided on the basis of relevant provisions of the Act, Rules and the bye-laws of the Society but in the instant ease such an exercise has not been done. (2) Sections 17 and 18 of the Contract Act define fraud and mis-representation.
Although the question as to whether a person is a member of the Society can only be decided on the basis of relevant provisions of the Act, Rules and the bye-laws of the Society but in the instant ease such an exercise has not been done. (2) Sections 17 and 18 of the Contract Act define fraud and mis-representation. Section 19 of the same Act makes the contract voidable when consent to an agreement is caused by coercion, fraud or mis-representation, at the option of the party whose consent was so caused. However, Exception to Section 19 has laid down that if the consent to an agreement is caused by mis-representation or by silence or fraud, the contract nevertheless is not voidable if the party, whose consent was so caused, had the means of discovering the truth with ordinary diligence. This exception is quoted below :"section 19. . . . . . . . . . . Exceptionif such consent was caused by mis-representation or by silence, fraudulent within the meaning of Section 17, the cooract, nevertheless, is voidable, if the party whose consent was so caused had the means of discovering the truth ordinary diligence," ( 8 ) SUPREME Court in Shri Krishna v. Kurukshetra University, AIR 1976 SC 376 , while dealing with the plea relating to fraud, has laid down as under:"it is well settled that where a person on whom fraud is committed is in a position to discover the truth by due diligence, fraud is not provided. "in view of the exception to Section 19 of the Act, same principle is applicable to the aase of mis-representation mis-statement. Therefore, even if the lease was executed in favour of petitioners by NOIDA due to mis-representation or mis-statement it cannot be avoided if the NOIDA had the means of discovering the truth with ordinary diligence. These aspects have not been dealt with by the respondents while deciding the controversy by the impugned order. ( 9 ) AS we are deciding the writ petition on the first question it is not not necessary to go into the other questions raised by the learned counsel for the petitioners. ( 10 ) BEFORE parting with the case it may be observed that the preliminary objections raised on behalf of the respondents cannot be sustained noida has been constituted under the Development Act.
( 10 ) BEFORE parting with the case it may be observed that the preliminary objections raised on behalf of the respondents cannot be sustained noida has been constituted under the Development Act. The functions of this authority have been specified by Section 6 of the Act. Under Section 7 it has been authorised to sell, lease or otherwise transfer whether by auction, allotment or otherwise any land or building belonging to it in industrial development area on such terms and conditions as it may, subject to any rules that may be made under the Act, think fit to impose. Section 13 of the same Act empowers the authority to impose penalty in the event of default in payment of consideration money or instalments. It is thus apparent that power to sell or lease any property vest in the NOIDA by virtue of statutory provisions. The contract/leases executed by it cannot therefore, be said to be purely non-statutory contract. Decisions of Honble Supreme Court in the case of Bareilly Development Authority v. Ajay Pal Singh, AIR 1980 SC 1076 and of this Court in M/s Shree Raghunath Alloy and Steel Castings Pvt. Ltd v. New okhla Industrial Development Authority (Writ Petition No. 17007 of 1989)decided on May 2, 19-0, which have been relied upon by the learned counsel for the respondents cannot be of any assistance to him because in the case of Bareilly Development Authority, AIR 1989 SC 1076 (supra) the contracts therein were found to be non-statutory and in the case of M/s. Shree Raghunath alloy and Steel Castings Pvt, Ltd , Writ Petn. No. 17007 of 1989, d/-2-5-1990 (supra) it was admitted that the deed executed between the the petitioner therein and the NOIDA was a non-statutory contract. This is clear from the first page of the judgment itself wherein it has been observed as under;"it is not disputed that the lease deed executed between the petitioner and NOIDA authorities is a non-statutory contract. "that apart, the provisions of fhe Development Act do not appear to have been brought to the notice of this Court in that case. The decision which is based on the admission of the parties cannot be used a precedent in the subsequent cases.
"that apart, the provisions of fhe Development Act do not appear to have been brought to the notice of this Court in that case. The decision which is based on the admission of the parties cannot be used a precedent in the subsequent cases. In this connection it may be mentioned that recently supreme Court in Indore Development Authority v. Smt Sadhana Agarwal jt 1995 (3) SC 1 decided on 7-3-1995, after considering the case of bareilly Development Authority (supra) wherein was involved the contractual dispute relaing to the escalation of the price of the land, has laid down that even in the cases of escalation of price of the land flats the Development authorities cannot act arbitraily and if and when their action is challenged they owe a duty to the High Court to explain and to satisfy the Court the reasons for such escalation. The power of the High Court to interfere even in such cases, though on limited grounds, was thus upheld by the Honble supreme Court. The first objection as such, has to be rejected, ( 11 ) THE second objection also deserves the same fate. It is true that in the last para of the impugned order it has been mentioned that the petitioners are at liberty to seek review of that order in case they are able to place some cogent and convincing evidence in support of their claim. Learned counsel for the petitioners has stated that whatever petitioners have with them they hvve produced before the authority and there is nothing more with them and, therefore, the question of applying for review before the concerned authority, does not arise. ( 12 ) SO far as the third objection is concerned, it is true that revision could have bean filed under Section 41 (3) of U. P. Urban Planning and devlopment Act. 1963 before the State Government against the impugned order. But this objection should have been raised by the respondents at the thresh-hold when the petition was taken up for the first time in 1991.
1963 before the State Government against the impugned order. But this objection should have been raised by the respondents at the thresh-hold when the petition was taken up for the first time in 1991. To dimiss; when writ petition now after about four years specially when counter and rejoinder affidavits have been exchanged between the parties and the case is at the stage of admission hearing, would not be justified, in this connection reference may be made to L. Hirday Naratn v. Income-tax Officer Barillly, AIR 1971 SG 33; wherein it was laid down as under:"we are unable to hold that because and revision application could have been moved for an order correcting the order of the Income-tax Officer under Section 35, but was not moved, the High Court would be justified in dismissing as not maintainable the petition, which was entertained and was heard on the merits. "this objection also cannot be sustained. ( 13 ) FOR thr reasons given above, the matter daserves to be sent back to the Chairman of the NOIDA for deciding the issue afresh after giving reasonable opportunity of being heard to the petitioners. ( 14 ) THESE writ petitions are partly allowed. The matter is remanded to the Chairman of the NOIDA, to decide it afresh after giving reasonable opportunity of being heard to the petitioners, within two months from the date of presentation of certified copy of this order before him. In view of the facts and circumstances of the case there shall be no order as to cost. Petition partly allowed. .