KENDRIYA KARMCHARI SAHKARI GREH NIRMAN SAMITI LTD. v. NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY
2008-08-07
AMITAVA LALA, SHISHIR KUMAR
body2008
DigiLaw.ai
JUDGMENT Honble Amitava Lala, J.—This appeal arises out of the order dated 30th May, 2006 passed by the Court below rejecting the application for interim injunction filed by the plaintiff, the appellant herein, in Original Suit No. 273 of 2006 (Kendriya Karamchari Sahkari Greh Nirman Samiti Ltd. v. New Okhla Industrial Development Authority). 2. By consent of the parties, the appeal has been heard on the informal papers, however, upon exchange of affidavits. 3. The plaintiff-appellant alleged to be a Co-operative Housing Society (hereinafter in short called as ‘society’) registered in the year 1975 under the U.P. Co-operative Societies Act, 1965. The appellant’s case is that it has purchased 292 bighas of land situated in Village Chhalera of District Gautam Budh Nagar, commonly known as Noida, U.P. for housing purpose from the funds contributed by its members before acquisition by the State Government for New Okhla Industrial Development Authority (hereinafter in short called as ‘NOIDA’) established in the year 1976. After acquisition NOIDA wanted to allot the plots to the members of the society in its planned developed sectors. NOIDA directed the society to furnish list of bona fide members and also directed to deposit 40% of the premium. It has been stated by the plaintiff-appellant that in between the year 1994 to 1996 a total sum of Rs. 36 crores has been deposited. According to the plaintiff-appellant, NOIDA authority issued allotment letters on 23rd February, 1995, 28th February, 1995 and 1st March, 1995. NOIDA also issued letters seeking more information regarding members of the society. Thereafter a show cause notice was issued regarding members as well as title in respect of land of the society. On 5th May, 1998 a notice was issued cancelling the allotment. In the notice of cancellation it has been specified by the authority that the plaintiff-appellant society has acquired land only around 34 bighas and not 292 bighas. It has received compensation only in respect of such area of land. In further, an area of about 65 bighas land vested with the State. So far as 118 bighas land is concerned, compensation was received by the farmers regarding which dispute between farmers and society is going on. However, the plaintiff-appellant filed a case in M.R.T.P. Commission. Subsequently, on legal notice a writ petition, being Civil Misc.
In further, an area of about 65 bighas land vested with the State. So far as 118 bighas land is concerned, compensation was received by the farmers regarding which dispute between farmers and society is going on. However, the plaintiff-appellant filed a case in M.R.T.P. Commission. Subsequently, on legal notice a writ petition, being Civil Misc. Writ Petition No. 39842 of 2001 (Kendriya Karmchari Sehkari Grih Nirman Samiti Ltd. v. New Okhla Industrial Development Authority Noida) was filed, which was allowed by a Division Bench of this Court on 5th August, 2003. Against said order of this Court, Special Leave Petition No. 18449 of 2003 (New Okhla Industrial Development Authority v. Kendriya Karmchari Sehkari Grih Nirman Samiti Ltd.) was filed, which was allowed by the Supreme Court by judgment dated 24th April, 2006 and the order of the High Court was set aside. Ultimately, the plaintiff-appellant filed the present suit, being Original Suit No. 273 of 2006 (Kendriya Karamchari Sahkari Greh Nirman Samiti Ltd. v. New Okhla Industrial Development Authority), and made an interim application for injunction under Order 39 Rules 1 and 2 read with Section 151 of CPC therein, to which NOIDA filed its objection and the appellant filed its rejoinder. 4. Specific defence was taken by NOIDA in the Court below that the suit by the plaintiff-appellant is not maintainable. Material facts regarding membership were concealed. Allotment order was obtained by misrepresentation and fraud giving false membership. NOIDA authority made an inquiry and submitted report, from which it appears that the plaintiff appellant is not entitled to 292 bighas of land nor has membership of 1754 members as on 27th February, 1988. The enquiry report reveals that only 34 bighas of land was acquired by the plaintiff-appellant society and its membership is only 546. Therefore, several notices were given to prove the membership. When no reply was given by the society, the allotment was cancelled. Suit is barred by Sections 9 and 11 of the Code of Civil Procedure, 1908 (hereinafter in short called as ‘CPC’). The compensation claimed by the society is time barred. There is no possession of members of the society on any plot. The authority possesses power to cancel wrongful allotment. 5. Ultimately, the Court below found so in respect of membership and area of land.
The compensation claimed by the society is time barred. There is no possession of members of the society on any plot. The authority possesses power to cancel wrongful allotment. 5. Ultimately, the Court below found so in respect of membership and area of land. Further, the Court below held that by such allotment letter/s no legal right can be created in respect of the land. The legal right can only be created upon execution of the appropriate lease deed. General order of allotment neither creates any lien nor is a concluded contract. Element of fraud cannot be avoided. Claim of ownership over 292 bighas of land is prima facie illegal and not proved. The case regarding 65 bighas of land is still pending in the Board of Revenue. In respect of 118 bighas of land compensation has been given by the Land Acquisition Officer to the farmers. The allotted land is not identifiable.As per Section 19 of the Indian Contract Act, since the fraud has been detected, the authority is fully empowered to cancel the allotment of land. Element of prima facie case is relevant in respect of discretionary remedy. Question of public interest cannot be avoided. No case of balance of convenience is available. Therefore, such interlocutory application was rejected by the Court below by order dated 30th May, 2006, which is impugned in this appeal. 6. The reliefs sought in the suit are to be seen in this context which are as follows : “A. That through the decree of declaration it be declared that order dated 5.5.1998 passed by defendant Authority cancelling the allotment of plots in favour of the plaintiffs by allotment letter dated 12.8.1994 is null and void and ineffective. The plaintiff society is the lawful allottee of the said land. B. That through the decree of prohibitory injunction the defendant or anyone else acting for or on behalf of the defendant may kindly be restrained from allotting the land allotted to the plaintiff society by allotment letter dated 12.8.1994 in favour of anyone else and also be restrained from for executing transfer documents of the said land in favour of anyone else and also from handing physical possession thereof to someone else.
C. That through the decree of mandatory injunction the defendant may kindly be directed to deliver possession of the land allotted in favour of plaintiff by allotment letter dated 12.8.1994 and to execute necessary transfer documents in favour of the members of the plaintiff society. D. Cost of the suit. E. Any other relief.” 7. Before filing of the suit on the selfsame issue the aforesaid writ petition was filed by the plaintiff-appellant, when upon hearing at length a Division Bench of this Court was pleased to deliver a judgment passing an affirmative order in favour of the plaintiff-appellant, the petitioner therein, on 5th of August, 2003, by which the order dated 5th May, 1998 cancelling the allotment was quashed and the authority was directed to allot the land in question to the members of the appellant/petitioner-society in Sector 42 and 43 of NOIDA forthwith. At the time of deciding the writ petition, the Court held that genuineness of the members of the petitioner-society has been verified by the Assistant Registrar, Co-operative Society, which is the competent authority in respect of the societies. The only question is whether there was any misrepresentation by the petitioner/appellant or not. The Court held that it is well-settled that mutation neither confers nor discharges any right of the parties. The society had filed registered sale-deeds in respect of the land measuring 292-12-17.75 bighas prior to the cut off date. Sale-deeds were examined. Administrative Officer of NOIDA submitted a report upon verifying the records. As regards withdrawal of compensation by the farmers, it may be mentioned that this is the matter between the petitioner/appellant and the farmers. NOIDA has nothing to do with it. After making the sale-deeds by registered documents, the farmers did not retain any title to the land and it seems that they illegally withdrew the compensation for the land which they did not own. So far as genuineness of membership of the society is concerned, this point cannot be raised at such a belated stage particularly when membership has already been verified by the competent authority. The respondent accepted 40% of the amount from the individual members and further instalments totalling over Rs. 36 crores and it cannot be permitted now to raise such kinds of frivolous objection at the belated stage.
The respondent accepted 40% of the amount from the individual members and further instalments totalling over Rs. 36 crores and it cannot be permitted now to raise such kinds of frivolous objection at the belated stage. Objection as to the genuineness of the members has not been raised in that order and cannot be supplemented by fresh reasons in the shape of an affidavit or otherwise. NOIDA acted in a highly arbitrary manner and has discriminated against the petitioner/appellant since similar benefit was given to other societies. 11 societies were mentioned in that writ petition who were granted the benefit as per Khodaiji Committee report, which was accepted by NOIDA with some modifications. Doctrine of promissory estoppel is applicable in this case. The NOIDA authority scrutinized and verified the sale-deeds and other papers submitted by the society relating to title to 292 bighas and issued a letter for allotment to the members. After receiving the letter, the society communicated it to its members and gave it wide publicity. 1754 members deposited 40% of the cost of land within time limit. The authority accepted over Rs. 36 crores from the society on the basis of genuineness of the members and the sale-deeds and issued allotment letters to 1754 members of the society. Doctrine of legitimate expectation is applicable in the present case. NOIDA authority must have earned interest on that deposited amount of Rs. 36 crores. Therefore, the writ Court was pleased to pass a favourable order directing the authority to handover the possession of the developed plots within the period specified therein. 8. The Supreme Court while setting aside the aforesaid order of the High Court made several observations in the judgment dated 24th April, 2006, which are as follows : “Though it is claimed by the respondent that there was no dispute that 292 bighas of land had been acquired by the Society, on verification of records the position appears to be entirely different. It has been all through the stand of appellant that the Society had misrepresented to be the owner of 292 bighas of land. This is a disputed question of title which was to be established in an appropriate Court of law and the writ petition was not the proper remedy. Further as rightly contended by the learned Counsel for the appellant, the High Court’s order practically renders the proceedings before the Board of Revenue redundant.
This is a disputed question of title which was to be established in an appropriate Court of law and the writ petition was not the proper remedy. Further as rightly contended by the learned Counsel for the appellant, the High Court’s order practically renders the proceedings before the Board of Revenue redundant. Findings recorded about the merits of the proceedings before the Board of Revenue when the State was not a party in the writ petition is an impermissible course adopted by the High Court. Even otherwise, the finding that farmers have practiced fraud is without any foundation since farmers were not parties in the writ petition. The appellant’s effort was to verify genuineness of the members who were claimed by the Society to be its genuine members. Interestingly at the initial stage the list was verified by Sh. Balbir Singh who undisputedly was President of the respondent-Society. In spite of several opportunities the details regarding membership were not furnished. Obviously it cannot be said that the appellant was bound to allot land, even if the membership was not established and it was established that large number of people were not genuine members. Allotment in the manner desired by the respondent-Society would be against the very purpose of allotment flowing from the scheme in question. In any event highly disputed questions of fact were involved. The High Court did not examine that issue in its proper perspective. It only referred to some decisions which noted that the High Court is not deprived of its jurisdiction to entertain a petition under Article 226 of the Constitution, merely because in considering the petitioner’s right to relief, questions of fact may fall to be determined. These judgments have been read out of context. It is fairly well settled that disputed questions of fact should not be gone into by the High Court in writ proceedings. A High Court is not deprived of its jurisdiction to entertain a petition merely because in considering petitioner’s right to relief question of fact may fall to be determined as pointed out in Gunwant Kaur v. Municipal Committee ( AIR 1970 SC 802 ). In a petition under Article 226, the High Court has jurisdiction to try issues of law and fact. Where, however, the petition raises complex question of fact, the Court should not entertain the petition.
In a petition under Article 226, the High Court has jurisdiction to try issues of law and fact. Where, however, the petition raises complex question of fact, the Court should not entertain the petition. In Mahanta Moti Das v. S.P. Sahid ( AIR 1959 SC 942 ) the High Court refused to go into the question as to whether Trusts were public or private trusts as the question had involved investigation of complicated facts and recording of evidence. The view was upheld. Thus, if there is a question on which there is a serious dispute which cannot be satisfactorily decided without taking evidence, it should not be decided in a writ proceeding (See Union of India v. T.R. Verma, AIR 1957 SC 882 ). If disputed questions of fact arise and the High Court is of the view that those may not be appropriately tried in a writ petition, the High Court has jurisdiction to refuse to try those questions and relegate the party to his normal remedy to obtain redress in a suit. In a petition under Article 226, the High Court has jurisdiction to try issues both of fact and law. When the petition raises complex questions of fact which may, for their determination, require oral evidence to be taken and on that account the High Court is of the view that the disputed statement may not be appropriately tried in a writ petition, the High Court should ordinarily decline to try the petition. Thus, a High Court is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner’s right, question of fact may fall to be determined. Ultimately, the question is one of discretion which is to be exercised in conformity with judicial principles. The High Court entertained the writ petition on the ground that the present appellant by acting wholly arbitrarily and illegally had discrimination against the writ petitioner. These conclusions were based on no material. On the contrary, the factual scenario as described above goes to show that the respondent-Society was not entitled to maintain a writ petition. Further there was no claim for interest made in the writ petition but the High Court granted interest. Looked at any angle the High Court’s order is clearly unsustainable and is set aside. The Writ Petition (Civil) No. 39842 of 2001 filed before the High Court is dismissed.
Further there was no claim for interest made in the writ petition but the High Court granted interest. Looked at any angle the High Court’s order is clearly unsustainable and is set aside. The Writ Petition (Civil) No. 39842 of 2001 filed before the High Court is dismissed. The appeal is allowed but in the circumstances without any order as to costs.” 9. Upon going through the facts and circumstances of the case and consideration made by the Division Bench of this Court and the Supreme Court extensively, we are of the view that in spite of cancellation of allotment the amount deposited by the society for the purpose of allotment of land has not yet been refunded. It is also an admitted position that there is no dispute as yet with regard to allotment of 34 bighas of land. These two factual aspects definitely give a clear indication of mind that the society had intention in its mind to get the land allotted but not to commit a fraud. It is true to say that at the time of submission of application by any society availability of the members is given, which may increase subsequently. Had it been the case of fraud, it would have been detected by the Registrar of the Co-operative Societies either on the basis of the application of any member or the society itself or suo motu when such a large area of land is going to be allotted by the Government to a society. Therefore, area, but not the members, is a question of subjective decision to be taken on the basis of the joint inspection by the society and the authority. It could have been revealed in that manner. The Court below at an interim stage has proceeded in a wrong premises. It has proceeded in a manner as if it is going to finally conclude hearing of the suit which is a gross mistake. On the other hand, the Division Bench had also decided it in a writ petition. The Supreme Court while considering the cause has categorically held when there is a question of title involved and the decision is to be taken on the basis of material evidence, a final conclusion cannot be drawn by the writ Court.
On the other hand, the Division Bench had also decided it in a writ petition. The Supreme Court while considering the cause has categorically held when there is a question of title involved and the decision is to be taken on the basis of material evidence, a final conclusion cannot be drawn by the writ Court. But that does not necessarily mean that evidential value available to the Division Bench of this High Court, while deciding the writ petition, will be ignored particularly in a situation when the authority in spite of cancellation of allotment did not return huge amount of money of about Rs. 36 crores and is enjoying its interest till today. In such circumstances, the best course open for the Court below is to expedite the process of hearing directing to maintain status quo. In case of passing or refusing grant of injunction, the Court will obviously see the prima facie case, balance of convenience and irreparable loss. In this case, such elements are available. In case of cancellation of allotment, for which such a huge money has been received but not refunded as yet, a question of estoppel, if not, a question of expectation arises. The defendant-respondent authority cannot avoid liability when they have received a huge sum of purported Rs. 36 crores and are enjoying the fruits of the same. It appears to us that other societies standing on the equal footing have already got the allotment. Increase of number of the members of a society cannot disentitle such society absolutely from getting the land in question. It is not the domain of the authority unless it violates the law made for it. If today the land, which has purportedly been allotted to the society, is given to a third party, right of such third party will accrue. In such circumstances, attempt of the appellant will be futile. The society will have no other alternative but to ask back the money in the place and instead of land in question, for which society was formed and the members have invested good amount of money. Hence, it is not a case where element of interim injunction is not available at all. Even if it is so, when the question of immovable property is involved, the Court below could have expedited the hearing of the suit with a direction to the parties to maintain status quo.
Hence, it is not a case where element of interim injunction is not available at all. Even if it is so, when the question of immovable property is involved, the Court below could have expedited the hearing of the suit with a direction to the parties to maintain status quo. An absolute refusal of grant of injunction on the part of the Court below appears to be faulty. In AIR 2005 SC 104 , Maharwal Khewaji Trust (Regd.), Faridkot v. Baldev Dass, it has been held that unless and until a case of irreparable loss or damage is made out by a party to the suit, the Court should not permit the nature of the property being changed which also includes alienation or transfer of the property which may lead to loss or damage being caused to the party who may ultimately succeed and may further lead to multiplicity of proceedings. In 2001 (1) All CJ 579 (FB), Sunni Central Board of Waqfs U.P. and others v. Gopal Singh Visharad and others; 1995 (3) AWC 1573 (DB), Bhardwaj Medical Centre v. NOIDA Authority and others; and 1991 (2) AWC 786 (DB), Vidya Matri Mandir (Regd.) Meerut Road, Ghaziabad v. Rajinder Nath and another, in various circumstances, the Court held that to avoid the multiplicity of proceedings and for the ends of justice there would not be any error in passing the order of status quo in an appropriate circumstance. In 1996 (1) ACJ 225 (SC), Smt. Rajnibai @ Mannubai v. Smt. Kamla Devi and others it has been held by the Supreme Court that Order XXXIX Rule 1 and 2 of CPC could be availed of only when the property, subject matter therein, is in danger of being wasted, damaged or otherwise being dealt with. 10. According to us, in passing such discretionary order at an interim stage particularly with regard to immovable property, equitable principle is to be applied to weigh the balance of convenience. Estoppel and/or expectation are soul of equitable principle but when estoppel stands on the higher side, expectation stands on the lower side. At an interim stage it is very difficult to come to a definite conclusion as to whether it is a case of estoppel or it is a case of expectation or it is of no case at all. In such circumstances, the Court is duty bound to strike a balance.
At an interim stage it is very difficult to come to a definite conclusion as to whether it is a case of estoppel or it is a case of expectation or it is of no case at all. In such circumstances, the Court is duty bound to strike a balance. The balance depends upon the circumstances of each case. In the instant case, there is no doubt that the consideration has already been passed and the allotment letter has been issued. However, at the time of cancellation of allotment, huge sum of money lying with the governmental authority was not refunded. It is unjustly enriching itself. In the case of specific performance or alike, refund of money is a determinative factor, in lieu thereof or in addition thereto. If specific performance or the order alike is not possible, the money, which has been deposited for the purpose of performing the contract, has to be refunded. Conversely, the party litigating with the cause will have to have the consideration back. One cannot be made doubly aggrieved i.e. by refusing the land to be handed over to them and also by not refunding the amount. 11. In such circumstances, we are of the view that the appeal succeeds at least to the extent of order of status quo to be passed herein with a direction for expeditious hearing of the suit. Accordingly, the order impugned in this appeal is set aside. Parties are directed to maintain status quo as on date. Suit is expedited with a request to the concerned learned Judge to hear out the same as expeditiously as possible preferably within a period of six months from the date of communication of this order. No unnecessary adjournments will be granted to the parties. Written statement, if not filed, will be filed within a period of one month from this date. Cross order for discovery and inspection, as directed hereunder, will be completed within a period of two weeks thereafter. 12. Accordingly, the appeal is disposed of without imposing any cost. Hon’ble Shishir Kumar, J.—I agree. ————