2003 Supreme(SC) 1327

2004(2) Supreme 539
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
V.N. Khare, CJI., S.B. Sinha, J.
M/s.Teri Oat Estates (P) Ltd. -Appellant
versus
U.T., Chandigarh and Ors. -Respondents
Civil Appeal No. 49 of 1999
With
Civil Appeal Nos. 50, 51, 52 & 53 of 1999
Decided on 19-12-2003
Counsel for the Parties :
For the Appellant : J.K. Sibal, Sr. Advocate, Manoj Swarup, Vivek Narayan, Debasis Misra, Advocate (NP)/Advocates.
For the Respondents : Ms. Kamini Jaiswal, Advocate.

IMPORTANT POINT
If the intention of the allottee is dishonest or with an ill motive and if the allottee does not make any payment in terms of the allotment or the statute with a dishonest view or any dishonest motive, then Section 8(A) of the Punjab (Development and Regulation) Act can be taken recourse to.

Headnote:Capital of Punjab (Development and Regulation) Act, 1952-Section 8A-Chandigarh Lease Hold of Sites and Buildings Rules, 1973-Public Premises (Eviction of Unauthorised Occupants) Act, 1971-Power to resume building or site and to forfeit money paid by transferee-Validity-Purchase of site on lease hold basis by appellant in open auction-Purchase amount was to be paid in lump sum and/or in four yearly instalments-25 of allotment price was to be deposited within 30 days of auction and 7 interest on balance 75 premium-Appellant upon entering into possession of purchased site, constructed a six storied building-However, appellant was stated to have deposited a sum of Rs. 6,00,000/- out of total sum of Rs. 8,91,960/- towards the amount due-Proceeding for cancellation of lease by way of resumption of land and building thereafter, was initiated-Appeal against-Whether extreme power of resumption and forfeiture had rightly been applied-(No)-Applicability of doctrine of proportionality.

       Held : One of the questions which, therefore, must always be posed by the Estate Officer, while initiating a proceeding under Section 8A of the Act is as to whether the drastic power of resumption and forfeiture has been taken recourse to as a last resort. The order of the Estate Officer dated 13.8.1992, does not say so. No reason has also been assigned in the said order. (Para 22)

       The question as to whether the extreme power of resumption and forfeiture has rightly been applied or not will depend upon the factual matrix obtaining in each case. Each case may, therefore, have to be viewed separately and no hard and fast rule can be laid down therefor. In a case of this nature, therefore, the action of the Estate Officer and other statutory authorities having regard to the factual matrix obtaining in each case must be viewed from the angle as to whether the same attracts the wrath of Article 14 of the Constitution of India or not. (Para 24)

       By reason of the auction held, the land in question has been sold in favour of the appellant. A letter of allotment has been issued in terms thereof. The appellant has been put in possession of the purchased property. In law he was entitled to raise constructions and in fact he has raised a six storied building. He has paid a part of the first instalment and during pendency of the proceeding before the High Court has paid a substantial amount together with interest @ 12 p.a. as enhanced from time to time. The respondents were entitled to pay interest on the unpaid amount @ 7 p.a. which in the event of non-payment was to be paid at a penal rate of 12 and subsequently enhanced to 15 per cent and then to 24 per cent as well the amount of penalty to be levied thereupon. The entire amount was recoverable through the process of law. In a situation of this nature, having regard to the rival claims made by the parties, if the default is not absolute wilful or a dishonest one but occasioned due to situation which may be beyond one s control, the statutory right of the respondent in resuming the land may not be appropriate, if the entire dues stand discharged. (Paras 41 and 42)

       In terms of the provisions of the Act, the respondents are entitled to, (1) resumption of the land, (2) resumption of the building and (3) forfeiture of the entire amount paid or deposited. Having regard to the extreme hardship which may be faced by the parties, the same shall not ordinarily be resorted to. The situation, thus, in our opinion, warrants application of the doctrine of proportionality. (Paras 43 and 44)

       By proportionality, it is meant that the question whether while regulating exercise of fundamental rights, the appropriate or least restrictive choice of measures has been made by the legislature or the administrator so as to achieve the object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the court will see that the legislature and the administrative authority "maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve." (Para 46)

       The appellants had sought to show their bona fide in making their payments before the High Court. They had also shown their willingness to make the payments on the difference of amount of interest. They pursuant to the order of this Court not only paid the entire amount due but also paid ground rent upto 1998-1999 and further paid 10 penalty on the forfeited amount of entire consideration money amounting to Rs. 2,87,000/-. The land in question for all intent and purport had been transferred in favour of the appellants. They were merely to pay the balance amount of 75 of the consideration amount in instalments. The rate of interest, as noticed hereinbefore, had been increased from 7 to 24 . Penalty was levied by the appellate authority at 1 and the revisional authority at 2 . Contrary thereto the Estate Officer, however, in terms of his original order directed payment of penalty at 10 F.F. We may, however, hasten to add that we do not intend to lay down a law that the statutory right conferring the right of the respondent should never be resorted. We have merely laid down the principle giving some illustrations where it may not be used. There cannot be any doubt whatsoever that if the intention of the allottee is dishonest or with an ill motive and if the allottee does not make any payment in terms of the allotment or the statute with a dishonest view or any dishonest motive, then Section 8(A) can be taken recourse to. (Paras 55 to 57)