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2002 DIGILAW 715 (PNJ)

State Bank Of India v. Chandigarh Administration

2002-07-26

G.S.SINGHVI, KIRAN ANAND LALL

body2002
Judgment G.S.Singhvi, J. 1. This is a petition for quashing orders dated 7.4.1982, 26.6.1984/3.8.1984 and 6.12.1989 passed by the Assistant Estate Officer, Administrator and Advisor to the Administrator, Union Territory, Chandigarh; Chief Administrator and Advisor to the Administrator, Union Territory, Chandigarh, respectively under the Chandigarh Lease Hold of Sites and Building Rules, 1973 (for short the Rules) and also for quashing notices dated 18.8.1999 and 29.5.2001 issued by the Land Acquisition Officer, exercising the powers of Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (for short the 1971 Act). 2. The background facts: On the basis of the highest bid of Rs. 1,72,500/- given by respondent No. 6 Smt. In-derjit Kaur in the auction held on 28.8.1979 by Chandigarh Administration, SCO Site No. 220, Section 37-C & D, was allotted to her subject to terms and conditions embodied in allotment letter Annexure P1 dated 11.11.1979. The amount of Rs. 43,125/- deposited by her at the time of auction was adjusted towards 25% of the premium. In terms of para 5 of the allotment letter, she was required to pay the balance premium in three equated instalments of Rs. 49,298.36 with annual ground rent for first 33 years at the rate of Rs. 4,312.50, but after taking possession of the site and constructing building, she did not pay the first instalment which became due on 28.10.1980. This led to the initiation of action for cancellation of lease. The Assistant Estate Officer issued notice dated 16.10.1981 under Rule 12(3) of the Rules requiring respondent No. 6 to pay the instalments which had become due, but she ignored the same. Therefore, by an order dated 7.4.1982 (Annexure P6), the Assistant Estate Officer cancelled the lease and forfeited 10% of the premium with ground rent and interest. The appeal filed by respondent No. 6 under Rule 22 of the Rules was disposed of by the Chief Administrator, Union Territory, Chandigarh vide order dated 26.6.1984 by giving her an opportunity to pay the entire amount together with interest and ground rent within a period of 30 days. The operative part of the appellate order reads as under: "I have considered at length the arguments of both the parties and have also gone through the record of this case. The operative part of the appellate order reads as under: "I have considered at length the arguments of both the parties and have also gone through the record of this case. Therefore, I find that SCO Site No. 220, Sector 37 C&D was leased out to the appellant in the auction held on 28.10.79 at premium of Rs. 1,72,500/-. The appellant paid a sum of Rs. 43,125/- against this amount of premium. The balance 75% is reported to be unpaid. The reasons for not making the payment of the amount of instalment are vague and unconvincing. During the arguments the counsel for the appellant has undertaken to make payment of the entire amount outstanding against the appellant at a short interval. The appellant is stated to be anxious to retain the site. I am doubtful if the appellant would be in a position to pay a sum of Rs. 1,60,930/- in lump sum particularly when she could not pay the amount of 1st instalment which was Rs. 53,610.86 only. The above amount of Rs. 1,60,930/- does not include the amount of interest, ground rent for subsequent years and the amount of forfeiture. The approximate payable by the appellant will be Rs. 2 lacs. Any way ! do not want to deprive the appellant of her right to hold this property particularly when she is prepared to make payment of the entire amount of outstanding against her. Keeping this fact in view and also taking into consideration the fact that the impugned order has been passed under Rule 20 instead of Rule 12(3) in disregard to the ruling of Punjab & Haryana High Court, 1 accept the present appeal. The site is restored to the appellant and amount of forfeiture shall stand. The restoration of the site is subject to the condition that the appellant makes payment of the entire amount of premium, interest thereon, amount of ground rent and the amount of forfeiture within 30 days reckonable from the date of issue of this order. Non-compliance with this order will bring into operation the impugned order of the Estate Officer." Respondent No. 6 did not avail of the concession granted by the appellate authority. Instead, she filed a petition under Rule 22(4) of the Rules which was dismissed by the Advisor to the Administrator vide order Annexure P8 dated 6.12.1989. Non-compliance with this order will bring into operation the impugned order of the Estate Officer." Respondent No. 6 did not avail of the concession granted by the appellate authority. Instead, she filed a petition under Rule 22(4) of the Rules which was dismissed by the Advisor to the Administrator vide order Annexure P8 dated 6.12.1989. The relevant portion of that order reads as under: "I have heard Shri R.C. Baii, proxy counsel for Shri Raj Kumar, counsel for the petitioner. He contended that the petitioner could not deposit the amount of the first instalment and the subsequent instalments due to financial difficulties and adverse family circumstances and that in case reasonable opportunity is granted to her she will deposit the entire outstanding amount. It is pertinent to mention here that the petitioner has not paid anything so far except 25% of the amount of premium.The first instalment fell due on 28.10.1980 for which petitioner made a default and the subsequent instalments have also fallen due. But, the petitioner has failed to pay the amount of any of the instalments. The petitioner was afforded an opportunity by the learned Chief Administrator to pay the amount of instalments, but even then she failed to do so. There is no illegality in the order passed by the Chief Administrator nor there is any material irregularity in the exercise of the jurisdiction by him. There is, thus, no case made out for interference in the revisional jurisdiction. This revision petition, therefore, fails and is accordingly dismissed." After 17-1/2 years from the date of cancellation of lease, the Land Acquisition Officer, exercising the powers of Estate Officer under the 1971 Act "issued notices Annexures P10 dated 18.9.1999 and P11 dated 29.9.1999 to the present petitioner, respondent No. 6 and four other tenants of SCO No. 220 proposing their eviction. 3 The petitioner has challenged the impugned orders and notices solely on the ground of violation of rules of natural justice. It has averred that before cancelling the lease of the site, the Assistant Estate Officer did not give notice and opportunity of hearing to the tenants which he was duty-bound to do as per the law laid down by this Court and, therefore, the order cancelling the lease and all subsequent orders and proceedings initiated under the 1971 Act may be declared void and quashed. 4. 4. In the written statement filed on behalf of respondents No. 1 to 5, it has been averred that the order cancelling the lease was passed by the Assistant Estate Officer after giving due notice and opportunity of hearing to the allottee. In paragraph 6 of the written statement, it has been averred that neither the petitioner nor respondent No. 6 had informed Chandigarh Administration about leasing out of a part of the premises to the petitioner and, therefore, the cancellation of lease cannot be nullified on the ground of violation of rules of natural justice. 5. In a separate written statement, respondent No. 6 has supported the case of the petitioner by stating that the petitioner-Bank was a tenant in the demised premises and no notice was served upon it before cancellation of the lease. On the question of payment of instalments, respondent No. 6 has averred that she could not do so due to unavoidable family circumstances. 6. Shri H.C. Gupta referred to the averments contained in paragraph 4 of the writ petition to show that the petitioner had taken a part of the SCO on lease in 1981 and argued that the order passed by the Assistant Estate Officer for cancellation of lease and all subsequent proceedings should be declared as void because no notice or opportunity of hearing was given to the petitioner. In support of his argument, learned counsel relied on the decisions of this Court in Brij Mohan v. Chief Administrator, (1980)82 P.L.R. 621; Ram Puri v. Chief Commissioner, (1982)84 P.L.R. 388; International Publishers v. Union Territory Chandigarh and Ors., (2000-3)126 P.L.R. 579 and Naresh Departmental Store v. The Chandigarh Administration and Ors., (2001-1)127 P.L.R. 314. 7. Shri Sanjeev Sharma, counsel for respondents No. 1 to 5 argued that the impugned orders and notices should not be nullified at the instance of the petitioner on the ground of violation of rule of audl alteram partem because Chandigarh Administration was never informed about its induction as a tenant in the demised premises. Shri Sharma pointed out that notices issued by the Assistant Estate Officer under Rule 12(3) of the Rules was duly served upon respondent No. 6, but she did not disclose the fact that different parts of the premises had been leased out to different tenants including the petitioner. 8. We have thoughtfully considered the respective arguments. Shri Sharma pointed out that notices issued by the Assistant Estate Officer under Rule 12(3) of the Rules was duly served upon respondent No. 6, but she did not disclose the fact that different parts of the premises had been leased out to different tenants including the petitioner. 8. We have thoughtfully considered the respective arguments. A perusal of the record shows that the site was leased out to respondent No. 6 subject to the conditions specified in allotment letter Annexure P1. She took possession and raised construction and then leased out different parts of the building to various tenants including the petitioner. Annexures P2, P3, P3-A, P4 and P5 are copies of correspondence exchanged between the petitioner and respondent No. 6 between December, 1980 and January, 1991, but at no point of time, either of them bothered to inform Chandigarh Administration about the induction of the petitioner as a tenant in a part of the building. Being a statutory body, the petitioner was expected to take care of finding out the nature of title of respondent No. 6 qua the property sought to be leased out. If the officers concerned had taken little care, they could have easily found that the building had been constructed over the site leased out by Chandigarh Administration subject to the conditions embodied in Annexure P1. They would have also come to know that respondent No. 6 had not paid instalments on due dates and proceedings for cancellation of the lease had been initiated. However, the concerned authorities neither bothered to consider this aspect nor they thought it proper to inform Chandigarh Administration about their having taken a part of the premises on lease. During the course of hearing, Shri H.C. Gupta candidly admitted that on its part, the petitioner had given no intimation to Chandigarh Administration about its tenancy of the demised premises. Therefore, the proceedings initiated by the Assistant Estate Officer and order dated 7.4.1982 passed by him for cancellation of lease and forfeiture of a part of the premium cannot be invalidated on the ground of violation of rules of natural justice. Section 8-A of the Capital of Punjab (Development and Regulation) Act, 1952 (for short the 1952 Act), which provides for resumption of the site and forfeiture of whole or part of the premium on account of breach of conditions of transfer, envisages giving of notice to the transferee. Section 8-A of the Capital of Punjab (Development and Regulation) Act, 1952 (for short the 1952 Act), which provides for resumption of the site and forfeiture of whole or part of the premium on account of breach of conditions of transfer, envisages giving of notice to the transferee. Likewise, Rule 12(3) of the Rules envisages issuance of notice to the lessee. Rule 20 of the Rules empowers the Assistant Estate Officer to cancel the lease and forfeit the whole or part of the premium after giving notice in writing about the default, breach or non-compliance of any of the terms and conditions of the tease. None of these provisions contemplate issuance of notice to the tenant/occupier of the allotted premises about whom the transferee has not given any notice to the competent authority of Chandigarh Administration. Therefore, the petitioner cannot complain of lack of notice and seek invalidation of the orders passed under the rules on the ground that notice and opportunity of hearing had not been given to it. 9. We may now refer to the decisions relied upon by the learned counsel for the petitioner. 10. In Brij Mohan v. Chief Administrator (supra) a Full Bench of this Court interpreted Section 2(k) of the 1952 Act and held that the word "transferee" includes a lessee. The Full Bench further held that a tenant of the building is entitled to be heard before an order of resumption is passed under Section 8-A of the Act read with Rule 9 of the Chandigarh (Sales of Sites and Buildings) Rule s, 1960. A careful reading of the judgment shows that the Full Bench had dealt with reference made in Letters Patent Appeals No. 101 and 102 of 1977. The facts of L.P.A. No. 101 of 1977 were that the appellant-tenant was furnished with a copy of show cause notice sent to his landlord-Faqir Chand requrring him to prefer his objection, if any. The estate Officer resumed the building on the ground of misuser. The appellant did not challenge the order of resumption by filing an appeal, but filed writ petition when proceedings under the 1971 Act were initiated for his eviction. The estate Officer resumed the building on the ground of misuser. The appellant did not challenge the order of resumption by filing an appeal, but filed writ petition when proceedings under the 1971 Act were initiated for his eviction. Learned Single Judge dismissed the writ petition holding that he had no right to be heard before passing of the order of resumption and that having failed to avail the alternative remedy, he was not entitled to any relief in view of Article 226(3) of the Constitution of India. In the second appeal (LPA No. 102 of 1977), the appellant-tenant was furnished with a copy of show cause notice issued to his landlord. He challenged the order of resumption by filing an appeal and contended that he was entitled to be heard. The appellate authority rejected his contention and upheld the order of resumption. The learned Single Judge dismissed the writ petition by holding that the tenant did not have the right to challenge the order of resumption. 11. From the above facts, it is clear that the learned Single Judge and the Full Bench had proceeded on the assumption that the factum of induction of the tenant was within the knowledge of the Estate Officer and yet, notice proposing resumption of the site was not given in the second case. 12. In Ram Puris case (supra), the Full Bench upheld the constitutional validity of Section 8-A of the 1952 Act, but gave a word of caution against the resumption of the silt. The proposition laid down in that case has no bearing on the facts of the present case. 13. In M/s International Publisherss case (supra), a Division Bench to which one of us (G.S. Singhvi, J.) was a member, held that the tenant of a premises was entitled to be heard. A reading of para 20 of the judgment shows that the respondents had taken the stand that notice of the proceedings initiated against the landlord had been sent to the petitioner, but the latter refused to accept the same. This was denied by the petitioner. After examining the record, the Division Bench came to the conclusion that the notice had not been served upon the tenant. That judgment also proceeded on the assumption that Chandigarh Administration was aware of the facts relating to the induction of the petitioner as a tenant in the premises. 14. This was denied by the petitioner. After examining the record, the Division Bench came to the conclusion that the notice had not been served upon the tenant. That judgment also proceeded on the assumption that Chandigarh Administration was aware of the facts relating to the induction of the petitioner as a tenant in the premises. 14. In Naresh Departmental Store v. The Chandigarh Administration (supra), the Division Bench reiterated the view taken in M/s International Publisherss case (supra) and quashed the order of resumption on the ground of denial of opportunity of hearing to the tenant. A reading of para 2 of the judgment shows that Chandigarh Administration was aware of the induction of the petitioner as tenant and yet, notice of proposed resumption was not given to it. 15. From what we have observed above, it is clear that none of the judgments relied upon by Shri Gupta helps the case of the petitioner because, as mentioned above, no intimation was ever given either by it or respondent No. 6 of the fact that a part of the premises had been leased out to the former. 16. In view of the above discussion, the writ petition is dismissed. However, keeping in view the fact that the petitioner-Bank is a statutory instrumentality of the State, we accept the oral request made by Shri H.C. Gupta and grant one years time to the petitioner after passing the order of eviction for vacating the premises. 17. Before parting with the case, we deem it proper to make it clear that Chandigarh Administration should ordinarily not entertain or accept any application filed by respondent No. 6 under Rule 21-A(2) of the Rule s. If, at all, the power under the said rule is exercised for restoration of the site, then the petitioner-Bank shall be free to move this Court for handing over the possession of the ground floor and basement of the building to it.