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2006 DIGILAW 2334 (DEL)

DAL CHANDRA SHARMA v. DELHI DEVELOPMENT AUTHORITY

2006-12-14

S.RAVINDRA BHAT

body2006
JUDGMENT S. Ravindra Bhat, J.- The writ petitioner, by these proceedings, claims a direction under Article 226 of the Constitution for quashing the letter dated 23.3.2004 issued by the Delhi Development Authority (hereafter referred to as "the DDA") canceling the bid for plot No. B-3/35, Yamuna Vihar, Delhi (hereafter "the plot"). 2. The facts necessary to decide this particular petition are that the petitioner participated in an open auction conducted by the DDA, on 8.11.2002 and was the highest bidder for the plot, which measures 67sq. mts. The auctioneer accepted the Petitioners bid. The petitioner deposited a sum of Rs. 2.67,413 and applied to DDA seeking its permission to mortgage the plot with a bank. The application was approved by the DDA, which granted a "no objection certificate". It is alleged that the Vijaya Bank also issued a cheque of Rs. 8,02,253/- in favour of DDA and the same was accepted by it. The petitioner further avers that he paid Rs. 8.02,253/- and submitted proof for the same, to the DDA. The petitioner alleges that the DDA was duty bound to issue lease deed and hand over the possession of the plot, but the latter failed to do so. After lapse of a year, on 23.3.2004 the petitioner was shocked to receive a letter of cancelling allotment of the plot, informing him that since he was holding property bearing No. 8-3/60, Yamuna Vihar by way of Agreement to Sell dated 20.12.1999, which he had not disclosed,at the time of auction and also that he had submitted false affidavit, thus he violated the terms and conditions of the sale/auction. The respondent had so cancelled the bid, and forfeited the earnest money deposited by the petitioner. 3. The respondent had so cancelled the bid, and forfeited the earnest money deposited by the petitioner. 3. The Petitioner alleges that the DDA has relied upon the following terms and conditions of the auction, to issue the impugned cancellation letter, which is reproduced as under: "any individual who is not a minor and is citizen of India may purchase lease hold rights in anyone plot by bid in the auction, if he/she, his wife/husband or any of his/her minor and or dependent children or dependent parents or dependent minor sisters and brothers, ordinarily residing with him/her do not own in full or in part on lease hold or free hold basis any residential plot or flat or house or have been allotted on hire purchase basis a residential plot or house or flat to anyone in the past, nor has transferred his/her membership in any co-operative house building society/CGHS in Delhi." 4. The petitioner further alleges that the DDA, in terms of Rule 29 of the Nazul Land Rules conducts the auction and as per the rules the competent authority (to reject and accept the bid is Vice-Chairman of the DDA) who had, in this case accepted the bid, leading to issuance of the demand letter. It does not stand to reason as to how the bid could be cancelled by the competent authority when the same had been duly confirmed. The petitioner further alleges that the cancellation of the bid was in complete violation of the principles of natural justice as there was no show cause notice issued to him as to why the bid be not cancelled. The action is also impugned as arbitrary, and in violation of right to opportunity to be heard. 5. The petitioner alleges that the terms and condition of auction do not debar anyone from participating in an auction if any other property is held on General Power Attorney or Agreement to Sell basis. Unless the terms and conditions specifically stipulate such a condition it cannot be said that such persons are barred from participating in the auction. 5. The petitioner alleges that the terms and condition of auction do not debar anyone from participating in an auction if any other property is held on General Power Attorney or Agreement to Sell basis. Unless the terms and conditions specifically stipulate such a condition it cannot be said that such persons are barred from participating in the auction. The petitioner also submits that the said terms and conditions of auction are in pari materia with rules 17 of the DDA (Disposal of Nazul Land) Rules, 1981: neither in the said rules nor in the terms and conditions of auction contain any stipulation with regard to the ineligibility of persons who holding the property benami, on as General Power Attorneys or an due to Agreement to sell. Therefore, it cannot be said that the petitioner was ineligible to apply with the DDA or would not have been eligible to participate in the auction. 6. It is alleged that the DDA issued the cancellation after a lapse of a year, and illegally forfeited the earnest money. As per Rule 32 of the Nnzul Land Rules the earnest money could have been forfeited if only a person failed to deposit the balance bid amount with in the period, provided in Rule 29. The respondent has till date retained the amount deposited by the petitioner. It is alleged that DDA is estopped in law from canceling the petitioners allotment after its acceptance. It is also stated that the action of the DDA is contrary to the mandate, of the Legislature. permitting conversion of properties from leasehold to freehold. Under the policy of conversion from leasehold to freehold a person can own any number of properties. 7. The DDA in its return agrees that the petitioner participated in the auction and by placing the highest bid of Rs. 10,69,650/-. It relies on the declaration furnished by him that- "Neither I nor my wife-husband or any of my minor or dependent children old dependent parents or dependent minor sister and brothers ordinarily residing with me, own in full or in part on lease hold or free hold basis in any residential plot of land or house or have been, allotted on hire purchase basis a residential land or house in union territory of Delhi. I have transferred any residential plot/house or flat to any nor I have transferred my membership in any cooperative housing building society-CGHS in Delhi In Favour of anyone." 8. The DDA alleges that when the case was processed for handing over the possession of the plot it came across the file of Plot No. B-3/60 Yamuna Vihar, which requested conversion to the name of the allotee i.e., the petitioner. The lease deed of plot 8-3/60 was executed in the name of Shri P.C. Pandey and Smt. Manju Pandey. The petitioner had applied for conversion of the said property into free hold in his favour being GPA and vendee under an agreement to sell; as per the copy of the said documents that plot was purchased by the petitioner on 20.12.99 and conversion had been approved. The conveyance deed papers were duly stamped from the office of collector of stamps and were submitted for execution. 9. The DDA alleges that as per the terms and conditions of auction sale the petitioner was ineligible to participate in the auction as he had another plot as GPA holder. It is further alleged that there was suppression of material facts by the petitioner; the cancellation order was therefore issued and earnest money deposited, forfeited. It is also alleged that the petitioner represented to the DDA against the cancellation and he, by letter dated 14.10.2004, and 26.10.2004 requested the authority not to proceed further on his conversion application of plot No. B-3/60 which was acquired by him on Power of Attorney basis. He also set up a Will. The petitioner requested that the plot purchased by him through auction may be regularized and possession be given. The respondent here stated that the said Willi/GPA was an after thought as the property was purchased on 20.12.1999 and the Will/GPA of a later date was executed to avoid cancellation of the plot in question. It is alleged that the petitioner was the owner of plot No. B-3/60 Yamuna Vihar on the date of bidding of the plot No. B-3/35. The DDA states that it had requested the petitioner to intimate his bank account number to refund the cheque as early as possible; he failed to do so. . 10. Mr. Sum it 8ansal, learned Counsel, submitted that the action of DDA is arbitrary, and untenable. The DDA states that it had requested the petitioner to intimate his bank account number to refund the cheque as early as possible; he failed to do so. . 10. Mr. Sum it 8ansal, learned Counsel, submitted that the action of DDA is arbitrary, and untenable. Having accepted the bid, it was not open for the latter to cancel the allotment, and forfeit the earnest money, after a considerable period. It was submitted that as per the Nazul Rules, there is no disability for a person holding power of Attorney from applying for plots, in auctions held by the DDA. Counsel relied upon the representation of the petitioner, addressed to DDA, to say there was no requirement of disclosure of any bidder about his being a power of attorney holder, or intending purchaser, under an Agreement to Sell. 11. It is submitted that the decision in Alimuddin v. Registrar of Cooperative Societies and Ors., (63) 1996 DLT 655 (DB), supports the petitioners case. It was submitted that the Court rejected the contentions in favour of liberal interpretation and underlying objective of the provision, i.e., that a GPA holder ought to be treated as the owner, leading to ensuing disability in owning another property, and the Court held that if the rule framing authority is of the opinion the language of the rule as judicially interpreted was not serving the object sought to be achieved, then it was for the authority to amend the rule to bring it in conformity with such object. It was also submitted that having permitted the petitioner to deposit the amounts, it was not open to the DDA to cancel the allotment, more than one year later. This action amounted to going back upon a concluded transaction. 12. Mr. Jayant Sud, learned Counsel submitted that the action impugned is unexceptionable, in the facts of the case. He contended that the condition of sale, by auction, clearly prohibited anyone owning other property, or whose spouse/dependents were full or part owners of properties. 13. It is also contended that the petitioner, knowing fully well that he had power of attorney for another property, and was intending to purchase it, and had even applied for its conversion, yet he deliberately falsely declared that he was not owner of any other property. 14. 13. It is also contended that the petitioner, knowing fully well that he had power of attorney for another property, and was intending to purchase it, and had even applied for its conversion, yet he deliberately falsely declared that he was not owner of any other property. 14. In Navjeevan Cooperative House Building Society Ltd. v. Delhi Cooperative Tribunal, CWP 3150/85 (decided on 10.7.87) this Court, interpreting Rule 25 of the Delhi Co-operative Societies Rules, stated as follows: "The clear intend of this rule is, therefore, that those who hold properties Benami either in their wifes name or in the name of their dependent children, were not intended to be permitted to become a member of the Cooperative House Building Society." Rule 25 of the said rules, reads as follows: "25: Disqualification for membership (1) No person shall be eligible for admission as a member of a Cooperative soceity if he- (a) ………. (b) ………. (c) in the case of membership of a housing society: (i) he ownes a residential house of a plot of land for the construction of a residential house in any of the approved or unapproved colonies or other localities in the Union Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children, on lease hold or feeehold basis provided that disqualification as laid down in Sub-rule (l)(c)(i) shall not be applicable in case of persons who are only co-sharers of joint ancestral properties incongested localities (slum areas) whose share is less than 65.72 sq. metres (80 sq. yards) of land; (ii) he deals in purchase of sale of immovable properties either as principal or as agent in the Union Territory of Delhi; or (iii) he or his spouse or any of his dependent children is a member of any other housing society, except otherwise permitted by the Registrar." 15. In O.P. Sethi v. Lt. Governor, 45 (1991) DLT 426, the Division Bench while dealing with the provisions of Rule 25(1)(c)(i) observed that the mere fact that wife of the said petitioner was owner of a house which she possessed prior to petitioners becoming a member of the Society was no ground to declare petitioners membership invalid. The objection of the Society was rejected by observing that Rule 25(l)(i) was not applicable to a case of succession by "Will". The objection of the Society was rejected by observing that Rule 25(l)(i) was not applicable to a case of succession by "Will". The Court further observed that Rule 25 was attracted in those cases where properties were held benami by the member. But the said rule would not apply if the property was acquired by transmission/devolution i.e. by inheritance or by "Will". In case acquiring of the property was benami then objection could be considered sustainable. In Alimuddin v. The Registrar Co-operative Societies and Ors., 63 (1996) DLT 655, the Court held as follows: "The view taken by this Court has been that to attract the applicability of Rule 25(l) (c) (i), the member of the Society must own a residential house or a plot of land for the construction of a house in his own name or in the name of his spouse or a dependent child. The phrase in the name of has been interpreted to mean the ownership must be of the member though it may stand benami in the name of the wife or a child." 16. It is necessary to refer to Rules 17 and 29 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981. Those rules read as follows: "17. General restriction to allotment for residential pruposes-Notwith-standing anything contained in these rules, no plot of Nazul land shall be allotted for residential purposes, to an individual other than an individual referred to in Clause (i) of Rule 6, who or whose wife or husband or any of his or her dependent children whether minor or not, or any of his or her dependent parents or dependent minor brothers or sisters, ordinarily residing with such individual, own in full or in part, on lease hold or freehold basis, any residential land or house or who has been alloted on hire purchase basis any residential land or house in the Union Territory of Delhi: Provided that where, on the date of allotment of Nazul land. (a) the other land owned by or alloted to such individual is less than 67 square metres, or (b) the house owned by such individual is on a plot of land which measures less than 67 square metres, or (c) the share of such individual in any such other land or house measures less than 67 square metres, he may be alloted a plot of Nazul land in accordance with the other provision of these rules." xxx xxxxxx 29. Sale to the highest bidder-The officer conducting the auction shall normally accept, subject to confirmation by the Vice-Chairman, the highest bid offered at the fall of the hammer at the auction and the person whose bid had been accepted shall pay as earnest money, a sum equivalent of 25 per cent of his bid and he shall pay the balance amount to the Authority within fifteen days of acceptance of the bid or within such period as the Vice-Chairman may specify in the public notice under Rule 27 or in another public notice: "Provided that Vice-Chairman may extend the date of payment where he is satisfied that sufficient reason exists for doing so, upto a maximum of 180 days subject to payment of interest on the balance amount at the rate of 18% per annum where the delay is thirty days or less and 25% per annum for a period exceeding 30 days." Rule 32 lays down the provisions for forfeiture of earnest money where it is stated that a person who fails to pay the balance amount of the bid within the period provided in Rule 29 shall forfeit the earnest money and it would be competent for the Vice-Chairman to re-auction the plot. The aforesaid provision of Rule 29 and Rule 32 have been held to be mandatory. 17. The petitioners allegations about the impugned cancellation are premised upon three contentions. One, that the condition regarding non-ownership of a plot, applicable under Rule 17, does not apply in the case where the highest bidder does not own the plot, but is power of attorney holder, and intending purchaser of a property, as per Agreement to Sell. The reasoning is that in such a case, the bidder/allottee does not own, or have interest in the property. The reasoning is that in such a case, the bidder/allottee does not own, or have interest in the property. The second is that the condition under Rule 17 does not apply to allotment by auction, and that the petitioner being highest bidder, whose offer was accepted, is beneficiary of a concluded transaction; cancellation of the bid is therefore impermissible. Lastly, the contention about illegality is violation of principles of natural justice. 18. The reliance placed upon the decision in Alimuddin s case (supra) in my opinion is inapt. In fact, in that decision, the portion quoted would reveal that the Court had held that if the allottee/member of co-operative society owned another property "through" his spouse, he was disqualified. A fortiorari, the decision is authority for the proposition that an allottee/ owner should himself, or through his spose should not be owner of another property. 19. The prohibition contained in Rule 17 applies, in my opinon, in all cases of allotments of Nazul Rules, whether by way of auction, or for predetermined rates. Its purpose and objective is to ensure that lands acquired and placed at disposal of DDA, and developed at public expense by it, ought to be made available to everyone on non-discriminatory principles. One of the principles underliying the object of Rule 17 is that ownership of such plots/properties ought to be restricted; therefore the disqualification of spouses, dependents, etc. of those who already own such plots/flats. This objective, to my mind, cannot be defeated and set at naught by stratagems, and ingenious devices adopted by those wanting to acquire such plots from the DDA. One such obvious stratagem is the device of General Powers of Attorney/Agreement to Sell, which are used by numerous people to acquire properties, without a formal conveyance or sale deed. The DDA, and Central Government, by its policies, formulated since 1992, has recognized, and sought to regularize such transactions, by permitting freehold rights. Therefore, such rights have now been given the formal clothing of legal ownership. Once a GPA holder applies for conversion, he signifies the resolve to acquire formal, legal and absolute "freehold" rights, which more often than not, are an enlargement of the existing rights of the "formal" owner. 20. In this case, the petitioner undisputedly is a GPA holder of another property; he does not deny its acquisition for valuable consideration. He applied for its conversion into freehold. 20. In this case, the petitioner undisputedly is a GPA holder of another property; he does not deny its acquisition for valuable consideration. He applied for its conversion into freehold. During the pendency of the request, he participated and bid in the auction, without disclosing that he was GPA holder, whose request for conversion was pending. This conduct betrays intention to own two properties. As per Rule 17, and the declaration required to be made by bidders, such bidders, owning other properties could not participate in the auction, and were ineligible. Therefore, I am of the opinion that the petitioner cannot claim that he was eligible and the allotment was valid. 21. So far as the second issue is concerned, I am of the opinion that the condition in the bid has not been challenged. That conforms to Rule 17. There is no dispute that the plot is for residential purposes. Facially, therefore, Rule 17 applies. The petitioner, having participated in the auction for the plot, with the condition in question, cannot now say that it did not apply. 22. The last contention is regarding violation of principles of natural justice. Here, the petitioner is seeking equitable remedies, under Article 226 of the Constitution of India. It has been often said that he who seeks equitable relief, must approach the Court with clean hands (Ref. R. Vishwanatha Pillai v. State of Kerala and Others, II (2004) SLT 51= 2004 (2) SCC 105 ; Ram Saran v. IG Police, CRPF, II (2006) SLT 296= 2006 (2) SCC 541 ). 23. The recent trend in administrative action is to emphasize not so much on strict adherence to rules of natural justice, as upon fairness, and non-arbitrariness. Every action of an authority, and complaints of violation of principles of natural justice, have to be seen from the standpoint of fairness, and prejudice to the individual or concerned party. This is because natural justice cannot be straitjacketed into stale moulds. Each case has to be judged from the perspective of its facts. The petitioner has not denied any of the facts which led to cancellation of the allotment. The question of the DDA, therefore, granting a hearing in respect of what was essentially a commercial transaction, cannot be insisted as an invariable, mandatory requirement. Each case has to be judged from the perspective of its facts. The petitioner has not denied any of the facts which led to cancellation of the allotment. The question of the DDA, therefore, granting a hearing in respect of what was essentially a commercial transaction, cannot be insisted as an invariable, mandatory requirement. It has often been held that sans abuse of power or discretion, illegality, or mala fides, the administrative action cannot be faulted on the ground of violation of principles of natural justice, particularly in the commercial sphere. Fairness, it has been remarked, is not a one way street [see Natwar Textile Processors Ltd. v. Union of India, 1995 (1) SCC 753 ; U.P. Financial Corporation v. Gem Cap, 1993-(2)-SCC 299]. 24. In view of the above discussion, the petitioner is not entitled to the relief in these proceedings. The writ petition is therefore, dismissed, with no order as to costs. Writ Petition dismissed.