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2013 DIGILAW 286 (PNJ)

Sandeep Kohli v. Union Territory, Chandigarh

2013-03-02

AMOL RATTAN SINGH, SATISH KUMAR MITTAL

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JUDGMENT Mr. Amol Rattan Singh, J.: - In this petition, the petitioners are seeking a writ of certiorari for quashing of orders, dated 04.08.2004 passed by the revisional authority, those dated 06.05.2003 passed by the appellate authority and those dated 14.01.2003 passed by the Estate Officer, Union Territory, Chandigarh, vide which their prayer for surrender of Plot No.102, Sector-40A, Chandigarh was rejected and such allotment was considered as having been cancelled, resulting in forfeiture of 10% of the premium for the site, ground rent, interest and other dues that became payable up to the date of cancellation, in terms of Rule 12(3) of the Chandigarh Lease Hold of Sites and Buildings Rules 1973 (henceforth to be called “the Rules”). Petitioners have also sought refund of the amount forfeited after treating the plot as having been surrendered. 2. The facts of the case are that, on 10.12.1998, the three petitioners (two of whom are brothers, i.e. petitioners No.1 and 2), gave a bid for residential site No.102, Sector 40A, Chandigarh, in an open auction and their bid was accepted at a sum of Rs. 23,80,000/-. 25% of the bid amount was deposited by the petitioners, after which a letter authorizing the petitioners to take possession was given, along with the allotment letter dated 08.02.1999 (Annexure P-1). 3. The balance 75% was to be deposited in three annual equated installments, along with the ground rent. Each installment was for a sum of Rs. 7,17,766/-. Annual ground rent was Rs. 59, 500/- for the first 33 years of the lease, the auction being for the allotment of the site on Lease Hold Basis for a period of 99 years. 4. The first installment became due on 10.12.1999, i.e. one year after the date of auction, with a grace period of one month. Thus payment could be made up to 10.01.2000. Similarly, the last installment could have been paid up to 10.01.2002 and second installment, in between, up to 10.01.2001. 5. As per the petitioners’ story, due to some marital discord between petitioner No.2 and his wife, he had to travel between the U.S. and India frequently and as a result of the terms of settlement of divorce, the petitioners ran into financial problems, as a consequence of which they could not pay the installments. 5. As per the petitioners’ story, due to some marital discord between petitioner No.2 and his wife, he had to travel between the U.S. and India frequently and as a result of the terms of settlement of divorce, the petitioners ran into financial problems, as a consequence of which they could not pay the installments. As a matter of fact, what they paid, in addition to the 25% already paid by them before the date of allotment, was: (i) Rs. 1,59,500/- on 10.01.2000 (as against Rs. 7,17,766/- which was to be paid by way of first installment on that date plus Rs. 59,500/- as annual ground rent); (ii) Rs. 3,37,766/- on 10.03.2000; (iii) Rs. 40,000/- on 13.06.2001. Total paid after 08.02.1999: Rs.5,37,266/- Total due (minus ground rent) up to 10.02.2001: Rs.14,36,232/- Thus the total amount paid, including 25% of the premium amount, was Rs. 11,26,266/- against the total bid price of Rs. 23,80,000/- (minus interest due on instalments). The ground rent of Rs. 1,19,000/-, for 2 years up to the due date of 10.01.2001 @ Rs. 59,500/- per year, was also not paid. 6. On 23.04.2001 they were issued a notice under Rules 12(3) and 13(iii) of the Rules, calling upon them to pay the amount of installments that had become due, along with ground rent and interest @ 24% per annum for the period of default, plus a penalty @ 10% of the due amount, within a period of 15 days. When they did not do so, another reminder was sent to them to appear on 08.08.2001 before the Estate Officer. 7. Still not having paid the amount, they were served with an order dated 26.09.2001, calling upon them to pay the installments and ground rent along with 10% of the due amount as penalty (Rs. 95,777/-), failing which, process for cancellation of the site would be undertaken. 8. Not being able to pay the amount demanded, the petitioners, vide letter dated 01.10.2001, requested respondent No.3, i.e. the Estate Officer, to cancel the allotment of the residential site and to refund the amount paid by them. Vide order dated 02.01.2002, passed in the presence of the father of petitioners No.1 and 2, the Estate Officer ordered cancellation of the allotted site with immediate effect and further ordered forfeiture of 10% of the premium, ground rent and interest. 9. Vide order dated 02.01.2002, passed in the presence of the father of petitioners No.1 and 2, the Estate Officer ordered cancellation of the allotted site with immediate effect and further ordered forfeiture of 10% of the premium, ground rent and interest. 9. In appeal, the penalty imposed vide earlier order dated 26.09.2001 was waived off, and with regard to forfeiture of the amount of premium, ground rent, interest etc., the matter was remanded to the Estate Officer for passing fresh orders after hearing the petitioners and making calculation of interest as per the notification dated 05.06.2002, which had been issued by the Administration in respect of surrender of a site by an allottee. 10. After to and fro communications between the Estate Officer and the Chief Administrator, U.T., Chandigarh, on the issue of retrospective applicability of the said guidelines and notification for accepting of surrender of site, eventually on 14.01.2003, the Estate Officer again ordered cancellation of the site holding that the provisions for surrender of site could not be made applicable to the petitioners retrospectively. He, thus, maintained the earlier order imposing 10% forfeiture of the premium, ground rent, interest and other dues payable up to the date of cancellation. 11. In appeal against the said order, the Chief Administrator, U.T. Chandigarh, reduced the forfeiture amount from 10% to 5%, but otherwise maintained the rest of the order dated 14.01.2003. 12. The revision petition was also dismissed on 04.08.2004, upholding the reduction of forfeiture amount, but otherwise maintaining the order dated 14.01.2003. 13. Now, in the reply filed by the respondent-Administration, after giving the facts, which are not in dispute, it has been stated that a notification was issued on 05.06.2002, inserting Rule 10A to the Chandigarh Lease Hold of Sites and Buildings Rules, 1973, stipulating as under: “Rule 10-A. Surrender of Site or Buildings: (1) The lessee who has already paid at least 25% premium of the site or building, may, before he is offered possession of the site or building by the Estate Officer, and within 180 days of the allotment of the site or building, whichever is earlier, surrender the site or building on payment of penalty equal to 2½% of the premium. Interest prescribed in Rule 12(2), shall be charged on the remaining premium due from the allottee for the period from the date of allotment up to the date of surrender. Interest prescribed in Rule 12(2), shall be charged on the remaining premium due from the allottee for the period from the date of allotment up to the date of surrender. The date of surrender under these rules shall be the date when intimation by the lessee to this effect reaches the Estate Officer. (2) A lessee as mentioned in sub-rule (1) above may, even if possession of the site or building has been offered or handed over to the lessee by the Estate Officer, surrender the site or building within two years of the date of the allotment on payment of penalty equal to 5% of the premium. Interest shall be chargeable from the lessee as provided in sub-rule (1) above. The Estate Officer shall be competnent to decide such cases as also in cases under sub-rule (1). (3) The Chief Administrator may, in exceptional circumstances for reasons to be recorded in writing accept the surrender of site or building from the lessee as prescribed in sub-rule (2) above, at any time after two years from the date of allotment on payment of penalty which shall not be less than 6% and not more than 10% of the premium. Interest shall be chargeable from the lessee as prescribed in sub-rule (1) above. (4) The Chief Administrator may, on compassionate grounds, in cases of extreme hardship, for reasons to be recorded in writing, reduce or waive off the amount of penalty in any case of surrender.” The relevant extracts of Rule 12, as it existed at the relevant time, are also being reproduced: “12 Payment of premium and consequences of non-payment or late payment- (1) In addition to payment of 25% premium under Rule 8 or 9 as the case may be, the remaining 75% premium may be paid in lump sum within 30 days from the date of allotment/auction without any interest. (2) If payment is not made in accordance with sub-rule (1) of this rule, the balance of the 75% premium shall be paid in three annual equated instalments along with interest @ 10% per annum (or at such higher rate of interest as amy be fixed by the Chief Administrator by a notification in the official Gazette) before the commencement of the lease. The first instalment shall become payable after one year from the date of allotment/auction. The first instalment shall become payable after one year from the date of allotment/auction. Provided that xxxxxxxxxxxxxxxxxxxxxxxx Provided that xxxxxxxxxxxxxxxxxxxxxxxx (3) In case any instalment is not paid by the lessee by the date on which it is payable, a notice may be served on the lessee calling upon him to pay the instalment within a period of 3 months together with a penalty which may extend upto 10 per cent of the amount due. If the payment is not made within the said period, the Estate officer may cancel the lease and or forfeit the whole or any part of the money if paid in respect thereof which, in no case, shall exceed 10 per cent of the total amount of the consideratio money, interest and other dues payable in respect of the lease: Provided that forfeiture will not be made in addition to penalty; Provided further that no order of cancellation or forfeiture shall be made without giving the lessee a reasonable opportunity of being heard. If the order of cancellation is for non-payment of penalty, the lessee may show cause why the penalty should not be have been levied.” (3A) In case any equated instalment or ground rent or part thereof is not paid by the lessee by the date on which it became payable he shall be liable to pay in respect of that instalment or ground rent or part thereof as the case may be, interest calculated at the rate of [twenty four per cent] per annum from the date on which the instalment or ground rent became payable till such date it is actually paid. (4) xxxxxxxxxxxxxxxxxxxxxxxx” Thus, for non-payment of instalments, as per Rule 12(3), the respondents are entitled to forfeit up to 10% of the total amount of the consideration money, interest and other dues payable in respect of the lease, when the lease is cancelled. 14. Sh. Deepak Sharma, Advocate, learned counsel appearing for the respondent-Administration has submitted that insertion of Rule 10A by way of amendment in Rules of 1973, having come about on 05.06.2002 without any retrospective effect, there was no provision for surrender of plot/site prior to this and as such, the petitioners’ offer of surrender dated 01.10.2001 could not be accepted. 14. Sh. Deepak Sharma, Advocate, learned counsel appearing for the respondent-Administration has submitted that insertion of Rule 10A by way of amendment in Rules of 1973, having come about on 05.06.2002 without any retrospective effect, there was no provision for surrender of plot/site prior to this and as such, the petitioners’ offer of surrender dated 01.10.2001 could not be accepted. He has further submitted that whatever concession could be given, was given by the appellate authority in the form of reduction of forfeiture amount from 10% to 5% and, as such, as per the then existing statutory rules, nothing further could be granted. 15. Learned counsel for the respondents has relied upon a judgment of the Hon’ble Supreme Court in the case of Haryana Urban Development Authority Vs. Roochira Ceramics, 1996 (6) SCC-584, in which it was held as under: “It has been held repeatedly by this Court that the power under Article 226 is the power of judicial review. The High Court can only examine the procedural correctness. It cannot go into the merits of the controversy like an appellate authority. No finding is recorded by the High Court in this case that the procedure adopted by the Estate Officer was either not in accordance with the statutory provisions or was in violation of the principles of natural justice. The High court obviously acted as an appellate authority and that too as a benevolent appellate authority. There is no room for any benevolence under Article 226 of the Constitution. If the court departs from law and enters the arena of benevolence the perils and pitfalls are too many to recount. There will be no objective standards of judging. Justice becomes personalized. It would vary from Judge to Judge. In the absence of any procedural irregularity, the High Court had no jurisdiction to interfere in the matter. The High court also failed to notice that the respondent is guilty of not paying the installments as undertaking by him. By interfering on the basis of unverified and unsubstantiated plea of financial stringency, the court would be encouraging contumacious conduct and breach of undertakings.” Further, in the case of Municipal Corporation, Chandigarh Vs. Vipin Kumar Jain (Civil Appeal No.4451 of 2007 decided on 20.09.2007), the same view has been reiterated, in a case where a site allotted had been resumed due to non-payment of installments. 16. Sh. Vipin Kumar Jain (Civil Appeal No.4451 of 2007 decided on 20.09.2007), the same view has been reiterated, in a case where a site allotted had been resumed due to non-payment of installments. 16. Sh. D.K. Bhatti, Advocate, learned counsel for the petitioners, on the other hand, has submitted that this Court can exercise jurisdiction to grant further relief in view of the special circumstances of the case, especially as Sub Rule 4 of Rule 10A provides that the Chief Administrator, in extreme hardship, can waive off or reduce the penalty amount in any case of surrender. 17. We are unable to accept this contention, in view of the fact that the offer of surrender came from the petitioner on 01.10.2001, whereas the provision for surrender, came into being in the form of Rule 10A, in the 1973 Rules, only w.e.f. 05.06.2002 and not before that. As a matter of fact, the wording of the letter dated 01.10.2001 is “to please cancel the allotment and arrange to refund the amount of installments etc.” Even allowing the above phrase to be interpreted as a request for accepting surrender of the plot, this Court, under Article 226, cannot direct a rule to run retrospectively, if that was not the intention of the Rule making authority. 18. Retrospectivity can be read into subordinate legislation, if it is clarificatory in nature. In this case, there is a grant of a substantive right of surrender by insertion of Rule 10A, from a particular date; thus, making it a beneficiary provision. Can we interpret it to say that it would run retrospectively? In our opinion, we cannot, because, principally, the question would then arise, as to how far back such retrospective action would run. We cannot assign any date from which it would run, arbitrarily. In the case of a clarificatory notification, the clarification would generally go back to the date of promulgation of the rule which it seeks to clarify, unless specifically a different date is given. However, in cases where a new substantive right has been created, it would be up to the rule making authority to make it run prospectively or retrospectively, by fixing a rationally assignable date, if it is to run with retrospective effect. In this regard, the Hon’ble Supreme Court held in Government of India Vs. However, in cases where a new substantive right has been created, it would be up to the rule making authority to make it run prospectively or retrospectively, by fixing a rationally assignable date, if it is to run with retrospective effect. In this regard, the Hon’ble Supreme Court held in Government of India Vs. Indian Tobaco Association, (2005) 7 SCC 396 , as under: “The cardinal principle is that statues must always be interpreted prospectively, unless the language of the statutes makes them retrospective, either expressly or by necessary implication. Penal statutes which create new offences are always prospective, but penal statutes which create disabilities, though ordinarily interpreted prospectively, are sometimes interpreted retrospectively when there is a clear intendment that they are to be applied to past events. The reason why penal statutes are so construed was stated by Erle, C.J., in Midland Rly. Co. v. Pye (CB NS at p.191) in the following words: ‘Those whose duty it is to administer the law very properly guard against giving to an Act of Parliament a retrospective operation, unless the intention of the legislature that it should be construed is expressed in clear, plain and unambiguous language; because it manifestly shocks one’s sense of justice that an act, legal at the time of doing it, should be made unlawful by some new enactment’.” Again, in another judgment where the above lines of Erle, C.J., were also quoted, i.e. Vijay Vs. State of Maharashtra and others, (2006) 6 SCC 289 , it was observed that the inhibition against retrospective construction is not a rigid rule. It does not apply to a curative or a clarificatory statute. It was observed by the Apex Court as under, in Vijay’s case (supra):- “...It is true that ordinarily a statute is construed to have prospective effect, but the same rule does not apply to a disqualifying provision. The inhibition against retrospective construction is not a rigid rule. It does not apply to a curative or a clarificatory statute. If from a perusal of the statute, intendment of the legislature is clear, the court will give effect thereto. For the said purpose, the general scope of the statute is relevant. Every law that takes away a right vested under the existing law is retrospective in nature.” In the present case, the amendment does not take away a vested right, but confer one. For the said purpose, the general scope of the statute is relevant. Every law that takes away a right vested under the existing law is retrospective in nature.” In the present case, the amendment does not take away a vested right, but confer one. Still, it is certainly not a clarificatory amendment to the rules, hence, it cannot be held that the intention of the legislature was to give it retrospective effect. In view of the same, we cannot order Rule 10A to run retrospectively from any particular date and can only hold it to run prospectively from the date that it was promulgated, i.e. 05.06.2002. 19. Learned counsel for the petitioners, has further argued that, in view of the fact that Proviso to Clause (3) of Section 12 states that forfeiture will not be made in addition to penalty, the order of forfeiture of 5% of the amount of consideration money etc. is contrary to the said proviso. 20. This argument is completely without merit, as the penalty of Rs. 95,777/- imposed by the order dated 26.09.2001 by the Estate Officer was already waived off by the appellate authority vide his order dated 24.04.2002 while remanding the case back to the Estate Officer. The said penalty was never re-imposed. 21. Thus, the relief sought by the petitioner, in our considered opinion, cannot be given. 22. Having said that we do feel, however, that in view of the fact that the Administration in any case could not be a loser, as it would now be auctioning the site afresh and obtaining the current market price for it, which, needless to say, is manifold over and above the price on which the site was leased out to the petitioners in the year 1998, a provision could have been made in the Rules, providing for waiver of forfeiture if the price fetched in a fresh auction well covers the interest, penalty and other charges and expenses/losses incurred by the Government, due to non-payment and surrender of the site by the allottee. However, such action falls in legislative domain and, in the absence of any such provisions in the Rules, obviously no relief can be granted to the petitioners other than what has already been granted by the appellate authority by reduction of the amount of forfeiture from 10% to 5% of the consideration money, interest and other dues payable in respect of the lease. 23. Therefore, the only limited relief that can be provided to the petitioners is that, in case there is any difference in calculation in the amount forfeited by the respondents, i.e. Rs.4,08,847/-, due to interest or penalty having been charged at a rate higher than that prescribed in the rules, then they may represent in that regard to the respondents. We say this because, learned counsel for the petitioner did raise the issue initially, though could not conclusively prove it, it being a matter of calculation. 24. On merits, in view of what has been observed above, we find that the stand of the respondent in the reply, as also the reasoning given in the impugned orders, is wholly justified and as per statute. We, therefore, decline to interfere in the impugned orders. 25. In view of the above, the writ petition fails and is dismissed with no order as to costs, with the limited liberty to the petitioners of representing to the respondents, in case of any miscalculation of the forfeiture amount, which must be calculated as per the statutory rules, as they stood at the relevant time. ----------------------