NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY v. DABUR CONTAINERS PVT LTD
2004-02-11
MARKANDEY KATJU, R.S.TRIPATHI
body2004
DigiLaw.ai
M. KATJU, J. This is the defendants appeal against the judgment of the Court below dated 6-2-95 in suit No. 462 of 1994, M/s. Dabur Containers (P) Ltd. v. New Okhla Industrial Development Authority (hereinafter referred to as NOIDA ). 2. Heard learned counsel for the parties. 3. The plaintiff-respondent filed the aforesaid suit for declaring the letter dated 30-3-94 issued by the defendant-appellant NOIDA by which the allotment of plot No. 40 Block-C, Sector 58 Phase-3, NOIDA, Tahsil Dadri District Ghaziabad was cancelled as null and void. The plaintiff-respondents also prayed for an injunction restraining NOIDA from interfering with the peaceful possession of the plaintiff over the land in dispute and for a direction to the defendant to re-schedule the instalments while imposing simple interest. A copy of the plaint is Annexure-1 to the Stay Application filed with this appeal. 4. It appears that the plaintiff-respondent was allotted the aforesaid plot by NOIDA on 16-10-90 and possession was handed over to the plaintiff and a lease deed was executed on 20-2-91. As per the terms mentioned in the allotment letter and the lease deed the plaintiff was required to pay the amount due against the aforesaid plot and to put his unit functional within a stipulated time but the plaintiff failed to fulfill these conditions and consequently the allotment of the plot was cancelled by order dated 30-3-94. A true copy of the written statement filed by the NOIDA before the trial Court is Annexure-2 to the Stay Application. 5. It is alleged in paragraph 4 of the plaint that the plaintiff has paid a sum of Rs. 1,87,846 to the defendant and the remaining amount has to be paid by 31-12-1995. In paragraphs 5 and 6 of the plaint it is alleged that the defendant has not done any development work in the area. In paragraph 7 it is stated that since no development work was done by the defendant the plaintiff could not set up its factory or start its business and hence it was unable to pay the instalments which were due. However, in paragraph 8 it is stated that the defendant has now started the development work and on 21-3-94 the plaintiff has paid a sum of Rs. 26,000 to the defendant. The plaintiff has denied that it has committed any violation of the conditions of the allotment or lease deed.
However, in paragraph 8 it is stated that the defendant has now started the development work and on 21-3-94 the plaintiff has paid a sum of Rs. 26,000 to the defendant. The plaintiff has denied that it has committed any violation of the conditions of the allotment or lease deed. Hence it is alleged in paragraph 10 of the plaint that the impugned letter dated 30-3-94 was illegal. It is alleged that no opportunity of hearing was given to the plaintiff before issuing that letter. 6. In its written statement NOIDA has denied the plaint allegations. It is alleged in paragraph 2 of the same that the plaintiff did not abide by the conditions of the allotment or lease deed, did not make the payment of instalments and did not made the unit functional for which notices were given to the plaintiff from time to time but yet he did not made any payment or make the unit functional. Hence by letter dated 30-3-94 the allotment was cancelled. In paragraph 4 of the written statements it is denied that the plaintiff has deposited a sum of Rs. 1,87,846. It is alleged that if the plaintiff has deposited the said amount he should produce the receipt for the same. In paragraph 5 it is stated that the plaintiff was allotted a developed plot with sewer line, electricity, road, water and other facilities. In the same area many Industrialists are running their businesses. 7. In paragraph 21 of the written statement it is alleged that the plaintiff did not commence production in accordance with the allotment letter and lease deed nor did he made payments to the NOIDA which he had to make. He was given notices in this connection and sufficient time but he did not commence the work nor made the payments. Hence he has violated the terms of the agreement. A copy of the notice dated 30-3-94 cancelling the allotment is Annexure-3 A to the stay application with this appeal. A perusal of the same shows that it permitted representation within a period of 15 days to the plaintiff. 8. The trial Court framed three issues. These issues were as follows: (1) Whether the notice dated 30-3-94 was illegal and void? (2) Whether the suit was barred by Sections 34 and 1 of the Specific Relief Act? (3) What relief is the plaintiff entitled to? 9.
8. The trial Court framed three issues. These issues were as follows: (1) Whether the notice dated 30-3-94 was illegal and void? (2) Whether the suit was barred by Sections 34 and 1 of the Specific Relief Act? (3) What relief is the plaintiff entitled to? 9. On behalf of the plaintiff Smt. Meena PW-1 was examined who proved the existence of the lease deed. She stated that no condition of the lease deed was violated. She stated that the defendant did not give opportunity of hearing before cancelling the allotment. However, she admitted in cross- examination that the constructions were not made in accordance with the allotment letter and lease deed. 10. On behalf of the defendant one Narendra Tripathi, Assistant Development Officer, NOIDA was produced and he also stated that the constructions were not made within the prescribed period nor were payments made accordingly and hence the lease deed was cancelled. 11. The trial Court has accepted that it is open to the defendant to cancel the allotment or lease deed if the conditions of the same have been violated. However, the Court below has held that no opportunity of hearing was given to the plaintiff before cancelling the lease deed. 12. On behalf of NOIDA DW-1, Narendra Tripathi stated in his cross-examination that before cancelling the lease deed notice had been given to the plaintiff but it had been returned by the plaintiff. The notce was then sent for the second and third time but again the plaintiff returned the notice. These notices were sent by Registered Post but copy of the notice and the registry receipts were not filed in the Court below. 13. On behalf of the defendant it was contended that before cancelling the lease deed there was no requirement to give show cause notice to the allottee and whenever there was violation of the terms of the lease deed the lease deed could be cancelled. 14. The learned counsel for the defendant contended that the notice dated 30-3-94 itself was the notice which was required by law. It was contended that the notice dated 30-3-94 gives 15 days time to make representation, and hence the requirement of law was complied with. 15.
14. The learned counsel for the defendant contended that the notice dated 30-3-94 itself was the notice which was required by law. It was contended that the notice dated 30-3-94 gives 15 days time to make representation, and hence the requirement of law was complied with. 15. The plaintiff relied on the decision in Dooni Lal Seal and another v. Smt. Giniya Devi Rateria and others, AIR 1970 Calcutta 452, and the provisions of Sections 114-A and 111 (g) of the Transfer of Property Act and has contended that merely on violation of the conditions of the lease deed the same cannot be cancelled and instead the lessee should be given some time to remedy the breach as specifically provided in Section 114-A. 16. The defendant has relied on the decision of Jai Narain Dass v. Smt. Zubeda Khatoon, AIR 1972 All. 494 , in which it has been held that for cancelling the lease two notices under Section 111 (g) are not required. A single notice is sufficient vide Kshiroda Sundari Bhattacharya v. Bhupendra Mohan Deb and others, AIR 1961 Assam 70. 17. Learned counsel for the plaintiff has contended that a perusal of the lease deed shows that according to the condition No. II (a) all the instalments had to be deposited by 31-12-95. On failure to deposit the instalments or interest accruing thereon interest at 17% per annum would become payable. According to the condition No. III (4) of the lease the lessee had to complete the construction of the factory building and make the unit functional with 24 months of the date of allotment (unless the lessor gave further time in writing ). It is nobodys case that the lessor gave further time, and hence there was clear breach of Clause III (4) of the lease deed. 18. The trial Court held that the notice dated 30-3-94 was not in accordance with Sections 106, 111 (g) and 114-A of the Transfer of Property Act and the plaintiff was not given opportunity of hearing before cancelling the lease. Hence the trial Court was of the opinion that the cancellation of the lease was illegal. The issue No. 2 was also decided in the plaintiffs favour and it was held that the suit was not barred by Sections 34 and 41 of the Specific Relief Act. Issue No. 3 was also decided accordingly. 19.
Hence the trial Court was of the opinion that the cancellation of the lease was illegal. The issue No. 2 was also decided in the plaintiffs favour and it was held that the suit was not barred by Sections 34 and 41 of the Specific Relief Act. Issue No. 3 was also decided accordingly. 19. Before dealing with the submissions of the learned counsel for the parties we may note the relevant clauses in the lease deed. Clause III (4) of the lease deed states: "that the lessee at his own cost shall erect on the demised premises in accordance with the layout plan, elevation and design and in a position to be approved of in writing by the lessor in a good substantial and workman-like manner a building to be used as industrial factory with all necessary out buildings, severs, drains and other appurtenances and proper conveniences thereto according to the rule, building regulations and directions of the lessor, and proper municipal or other authority now existing or hereafter to exist in respect of building drafts, latrines and communication with the sewers and shall complete the construction of factory building and make the unit functional within a period of 24 months from the date of allotment in case of plots or within such extended time as may be allowed by the lessor or writing in its discretion on the request of the lessee, on the completion of the work the lessee shall send registered notice intimating to the lessor that the constructions have been completed for use as aforesaid whereupon the lessor shall get the same inspected and if all the work has been done in accordance with the covenants herein contained the lessor shall issue a completion certificate. In even of allottee hiking power requirement after having been allotted industrial plots/sheds for specific project of certain scale. The additional expenditure to the incurred on cable laying etc. such a circumstances shall be born by the lessee. " The above clause shows that the lessee has to make the unit functional within a period of 24 months from the date of allotment, unless the lessor granted further time. Clause II (a) of the lease deed states: "the lessee shall pay to the lessor the premium of Rs. 6,09,765, Rs. 1,82,929.
" The above clause shows that the lessee has to make the unit functional within a period of 24 months from the date of allotment, unless the lessor granted further time. Clause II (a) of the lease deed states: "the lessee shall pay to the lessor the premium of Rs. 6,09,765, Rs. 1,82,929. 50 out of which has already been paid, the receipt whereof the lessor hereby acknowledges, and the balance sum of Rs. 4,26,855. 50 shall be paid in ten half yearly instalments alongwith interest @ 17% per annum from the date of issue of allotment letter the interest to be compounded half yearly the first instalment falling due for payment on the 30th day of June or the 31st day of December, which ever failing earlier after the expiry of the period of six months next to the date allotment of the demised premises and the remaining instalments falling due consecutively as follows: (1) Rs. 42683. 55 on the 30th Day of June 1991 (2) Rs. 42683. 55 on the 31st Day of Dec. 1991 (3) Rs. 42683. 55 on the 30th Day of June 1992 (4) Rs. 42683. 55 on the 31st Day of Dec. 1992 (5) Rs. 42683. 55 on the 30th Day of June 1993 (6) Rs. 42683. 55 on the 31st Day of Dec. 1993 (7) Rs. 42683. 55 on the 30th Day of June 1994 (8) Rs. 42683. 55 on the 31st Day of Dec. 1994 (9) Rs. 42683. 55 on the 30th Day of June 1995 (10) Rs. 42683. 55 on the 31st Day of Dec.
42683. 55 on the 31st Day of Dec. 1993 (7) Rs. 42683. 55 on the 30th Day of June 1994 (8) Rs. 42683. 55 on the 31st Day of Dec. 1994 (9) Rs. 42683. 55 on the 30th Day of June 1995 (10) Rs. 42683. 55 on the 31st Day of Dec. 1995 Provided that the interest shall be computed as the rate mentioned above on the total amount of the balance premium outstanding from time to time from the date of allotment and shall be payable half yearly on the 30th day of June and 31st day of December each year, the first of each payment to be made on the 30th day of June 1978 falling earlier : Provided that a rebate of 3-1/2% in the rate of interest shall be admissible if the instalment together with the interest accruing thereon are paid by or on the due date : Provided further that if any instalment or the interest accruing thereon is not paid on the due date compound interest at the rate of 17% per annum shall be chargeable with six monthly rests on the premium due. " A perusal of the Clause II (a) shows that the plaintiff lessee was to pay the balance sum in ten half yearly instalments with interest at the rate of 17% per annum from the date of the issue of the allotment letter. Clause II (c) of the lease deed states: "if lessee makes default in payment of premium and interest for three consecutive instalments the lessor shall have a right to determine the lease and to resume possession. " A perusal of the Clause II (c) shows that in case of default in payment of premium and interest for three consecutive instalments the lessor (NOIDA) could determine the lease and resume possession.
" A perusal of the Clause II (c) shows that in case of default in payment of premium and interest for three consecutive instalments the lessor (NOIDA) could determine the lease and resume possession. Clause IV (1) of the lease deed states: "hereinbefore or to put the same to use in the time and manner as provided in Clause-III hereinbefore or if the amount due to the lessor as rent here by reserved or any part of the premium or interest as stipulated in Clause-II shall be in arrear and unpaid to the extent of three instalments but shall have fallen due for payment, or if the lessee or the persons in whom the lease hereby created shall be vested shall be adjudged insolvent or if this lease is determine as hereinbefore specified, it shall be lawful for the lessor without prejudice to any other right of action of the lessor in respect of any breach of this deed to re-enter upon the demised premises of any part thereof in the name of the whole and thereupon this demise shall absolutely cease and determine and out of the moneys paid by the lessee by virtue of these presents, such amount as prescribed by competent authority shall stand forfeited to the lessor and balance, if any, shall be refunded to lessee without any interest. However, if the money equivalent to deposited by the lessee till date of cancellation is not prescribed percentage, the lessor shall have right to recover the balance amount to that it may come prescribed percentage of total premium alongwith interest at the rate of 17%. " A perusal of Clause IV (1) of the lease deed shows that it states that if the lease is determined the lessor had a right to re-enter upon the premises. 20. There is no dispute that the plaintiff was a defaulter in payment of instalments as per the lease deed and in failing to make the unit operational within two years. This is even the finding of the Court below, with which we agree. 21. The question however, remains whether the Court below was right in holding that the notice dated 30-3-94 was illegal and void. 22.
This is even the finding of the Court below, with which we agree. 21. The question however, remains whether the Court below was right in holding that the notice dated 30-3-94 was illegal and void. 22. Section 111 (g) of the Transfer of Property Act states that a lease of immovable property determines: " (g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof the lessor may re-enter, or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such even;and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease. " 23. Sri S. C. Budhwar and Sri Vikas Budhwar learned counsels for the plaintiff-respondent have submitted that Section 111 (g) clearly provides that before forfeiture or determination of the lease it is mandatory upon the lessor to give notice to the lessee in writing of his intention to determine the lease. He submitted the word intention in Section 111 (g) implies that the lessor should give two notices, one communicating the intention to determine the lessee, and the other actually cancelling the lease. We do not agree. Section 111 (g) only mentions two conditions for forfeiture of the lease (1) the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter and (2) the lessor gives notice in writing to the lessee of his intention to determine the lease. There is no requirement in Section 111 (g) that the lessor has to give two notices, one expressing his intention to determine the lease, and the other actually determining it vide Jai Narain Das v. Zubeda Khatoon, AIR 1972 All 494 . In our opinion communication of the intention to determine the lease is the same as determining the lease and no opportunity of hearing is necessary for doing this. 24. In the present case both the above conditions have been fulfilled.
In our opinion communication of the intention to determine the lease is the same as determining the lease and no opportunity of hearing is necessary for doing this. 24. In the present case both the above conditions have been fulfilled. Clause II (c) and Clause IV (1) of the lease deed clearly provide that in case of breach of a condition of the lease deed the lessor had a right to determine the lease and re-enter the premises. The notice dated 30-3-94 clearly expresses the intention to determine the lease. Hence both the conditions mentioned in Section 111 (g) of the Transfer of Property Act have been fulfilled in the present case. In our opinion there was no further requirement to give a show cause notice to the defendant so as to comply with Section 111 (g) of the Transfer of Property Act. 25. Learned counsel for the plaintiff-respondent however, urged that in view of Section 114-A of the Transfer of Property Act the notice dated 30-3-94 was invalid. 26. Section 114-A states: "114-A. Relief against forfeiture in certain other cases.- Where a lease of immovable property has determined by forfeiture for a breach of an express condition which provides that on breach thereof the lessor may re-enter, no suit for ejectment shall lie unless and until the lessor has served on the lessee a notice in writing: (a) specifying the particular breach complained of ; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and the lessee fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if it is capable of remedy. " 27. Learned counsel for the plaintiff-respondent submitted that the lessor has not served notice on the plaintiff requiring him to remedy the breach of the condition of the lease. 28. In our opinion there is no merit in this submission. The suit with which we are concerned is not a suit for ejectment, but is a suit for declaring the notice cancelling the lease as null and void. Hence Section 114-A has no application at all. Moreover, it is doubtful whether the breach of non-payment of instalments in time could be remedied. When a payment has to be made within a specified time and it is not so made, surely it cannot be made retrospectively.
Hence Section 114-A has no application at all. Moreover, it is doubtful whether the breach of non-payment of instalments in time could be remedied. When a payment has to be made within a specified time and it is not so made, surely it cannot be made retrospectively. Hence in our opinion this breach is not capable of remedy. At any event the notice gave 15 days further time to the lessee but yet he did not make the due payments. 29. For the reason given above we are clearly of the opinion that the view taken by the Court below is incorrect and the suit is liable to be dismissed. 30. Sri Anurag Khanna learned counsel for the defendant-appellant further contended that NOIDA has been constituted under the U. P. Industrial Area Development Act, 1976 and the area allotted to the plaintiff was within the notified industrial development area and as such the provisions of U. P. Industrial Area Development Act, 1976 are applicable to the same. Section 14 of this Act provides that upon non- payment of instalments or breach of any condition the Chief Executive Officer of NOIDA may resume the site. Section 14 of the Act states: "14. Forfeiture for breach of conditions of transfer.- (1) In the case of non-payment of consideration money or any instalment thereof on account of the transfer by the authority of any site or building or in case of any breach of any condition of such transfer or breach of any rules or regulations made under this Act, the Chief Executive Officer may resume the site or building so transferred an may further forfeit the whole or any part of the money if any paid in respect thereof. (2) Where the Chief Executive Officer orders resumption of any site or building under sub-section (1) the Collector may, on his requisition, cause possession thereof to be delivered to him and may for that purpose use or cause to be used such force as may be necessary. " 31. We are of the opinion that the U. P. Industrial Area Development Act, 1976 is a special law, and hence it will prevail over the Transfer of Property Act which is a general law in case of any inconsistency.
" 31. We are of the opinion that the U. P. Industrial Area Development Act, 1976 is a special law, and hence it will prevail over the Transfer of Property Act which is a general law in case of any inconsistency. Hence even assuming that any provision of the Transfer of Property Act was violated that would still not help the plaintiff-respondent as in our opinion the action of NOIDA was clearly in accordance with Section 14 of the U. P. Industrial Area Development Act, 1976, which Act is a special law for NOIDA area and will prevail over the provisions of the Transfer of Property Act. 32. Sri Khanna submitted that NOIDA has been created for planned industrial development. The land, which was allotted to the plaintiff in the year 1990, was an industrial development area and was allotted with the object of quick development. However, the plaintiff failed to put the unit into operation as a result of which the entire scheme of quick planned industrial development suffered. The plaintiff has set up no unit nor have they paid the amounts due. The plaintiff deserves no relief in the aforesaid background. 33. We fully agree with the submissions of Sri Anurag Khanna. The plaintiff is entirely to blame for not having complied with the conditions of the lease and hence NOIDA was fully entitled to cancel the allotment and the lease deed. 34. For the reason given above this Appeal is allowed. The impugned judgment of the lower Court dated 6-2-95 is set aside. The suit of the plaintiff-respondent is dismissed with costs. Appeal allowed.