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High Court Of Delhi
UNION OF INDIA - Appellant
Versus
WEARWELL CYCLE COMPANY (INDIA) LIMITED - Respondent
L.P.A. 109 of 1974
Decided On : 01/15/1985
{'KEYWORD': 'DISPLACED PERSONS (COMPENSATION AND REHABILITATION) ACT, 1954 - TRANSFER OF PROPERTY - MANDAMUS', 'SUBJECT': 'Transfer of property under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 and the issuance of a writ of mandamus to enforce such transfer.', 'ACT SECTION LIST': ['DISPLACED PERSONS (COMPENSATION AND REHABILITATION) ACT, 1954 - SECTION 20', 'DISPLACED PERSONS (COMPENSATION AND REHABILITATION) RULES, 1955 - RULE 87', 'CONSTITUTION OF INDIA, ARTICLE 14', 'CONSTITUTION OF INDIA, ARTICLE 226', 'CONSTITUTION OF INDIA, ARTICLE 299']}
Fact of the Case:
The appellant, a government authority, issued a Press Note in 1954 proposing to allot a property in Faridabad. The respondent applied for and obtained a lease for the property in 1956. In 1961, the appellant offered to sell the property to the respondent, but the respondent did not accept the offer within the stipulated time. Eviction proceedings were initiated against the respondent under the Public Premises (Eviction of Unauthorised Occupants) Act, 1958, but the eviction order was set aside in 1968. The appellant again offered to sell the property to the respondent in 1969, and the respondent accepted the offer. However, the respondent sought a rebate on account of upkeep and repairs of the property, which the appellant refused to grant. The respondent then filed a writ petition seeking a mandamus to direct the appellant to transfer the property to it.
Finding of the Court:
The court held that the appellant had the authority to transfer the property to the respondent under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 and the Rules framed thereunder. The court also held that the appellant's decision to transfer the property to the respondent was a valid one and that the appellant could not, without any valid reason, resile therefrom. The court further held that the respondent's claim was not the enforcement of a contractual right but a claim that the appellant should not act in an arbitrary manner. The court concluded that the learned single Judge was justified in entertaining the writ petition and in issuing the mandamus.
Issues: 1. Whether the appellant had the authority to transfer the property to the respondent under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 and the Rules framed thereunder? 2. Whether the appellant's decision to transfer the property to the respondent was a valid one? 3. Whether the appellant could, without any valid reason, resile from its decision to transfer the property to the respondent? 4. Whether the respondent's claim was the enforcement of a contractual right or a claim that the appellant should not act in an arbitrary manner?
Ratio Decidendi: 1. The court held that the appellant had the authority to transfer the property to the respondent under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 and the Rules framed thereunder. The court reasoned that the property in question formed part of the compensation pool and that the appellant had the power to transfer the property under Section 20 of the Act, read with Rule 87 of the Rules. The court further held that the decision for the transfer of property had to be taken by the authorities under the said Act and that the decision need not be in the name of the President of India. It was only when the instrument of transfer was executed that the same had to be in the name of the President. 2. The court held that the appellant's decision to transfer the property to the respondent was a valid one. The court reasoned that the appellant had taken a decision to transfer the property in favour of the respondent and had communicated the same to it. The court further held that the premises were in the occupation of the respondent and that the appellant had told the respondent that they were being transferred to it. The court concluded that the decision to transfer the premises to the respondent was a valid one. 3. The court held that the appellant could not, without any valid reason, resile from its decision to transfer the property to the respondent. The court reasoned that if the appellant sought to resile therefrom, the said action would really be termed as arbitrary and violative of the provisions of Article 14 of the Constitution. The court further held that what the respondent was seeking is not the enforcement of a contractual right but the claim of the respondent was that the appellant should not act in an arbitrary manner. 4. The court held that the respondent's claim was not the enforcement of a contractual right but a claim that the appellant should not act in an arbitrary manner. The court reasoned that the direction, which was sought from the Court, was that the appellant should be compelled to act in accordance with law.
Final Decision: The court dismissed the appeal and directed the appellant to transfer the property to the respondent subject to the respondent paying a sum of Rs. 4,71,080.00 along with arrears of rent and interest up to date. The court also directed the appellant to communicate the exact figure of the arrears of rent and interest calculated up to February 28, 1985 to the respondent on or before that date and the respondent was directed to pay the entire amount so demanded by May 31, 1985.
( 1 ) THIS is a Letters Patent appeal against the judgment of Rajinder Sachar, J. who had issued a mandamus directing the appallant herein to transfer property No. 30, New Industrial Township, Faridabad, in favour of respondent No. 1.
( 2 ) FOR the view which we are taking, it is not necessary to refer to the facts in any great detail. The same have already been dealt with by the learned single Judge. It is, however, necessary to note that on April 28, 1954 the appellant issued a Press Note to the effect that it proposed to allot property No. 30, New Industrial Township, Faridabad. On April 1, 1956 respondent No. 1 had applied and obtained a lease for a period of five years on an annual rent of Rs. 23,050. 00. On June 22, 1961 the appellant gave an offer to respondent No. 1 to purchase the said property. The acceptance was required to be communicated within a month. This, however, was not done.
( 3 ) IT appears that eviction proceedings were initiated against respondent No. 1 under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1958. On Dec. 28, 1965 an order of eviction was passed on the ground that respondent No. 1 had not paid the lease money. The said respondent then made an offer to pay the rent along with interest if the eviction order was withdrawn. On March 4, 1968 the appellant agreed to withdraw the eviction order if the said respondent agreed to execute a fresh lease at an enhanced rent of Rs. 30,620. 00 per annum. This offer was accepted by the respondent but it requested that the rent be reduced and the interest be charged at the rate of 5 per cent instead of 6 per cent, which was claimed.
( 4 ) THE said respondent had filed an appeal against the order of eviction which had been passed under the Public Premises (Eviction of Unauthorised Occupants) Act. On June 22, 1968 this appeal was allowed on the ground that the said Act had been declared ultra vires. The respondent informed the appellant about the acceptance of the appeal and again offered to purchase the said property. By letter dated June 23,1969 the offer to purchase was accepted at a total cost of Rs. 4,71,000. 00. The said respondent was also required to pay the arrears of rent in monthly instalments of Rs. 2500. 00. The cost of the property was to be paid in 10 annual instalments, the first instalment was required to be paid within 30 days of the offer. Interest was required to be paid at the rate of 9 per cent. It is contended by the appellant that the offer of June 23,1969 was not accepted in toto by the respondent- company. By its letter dt. July 7, 1969 it communicated a conditional acceptance. The said company wanted an extension of time for making payment of the first instalment which was granted up to Oct. 7,1969. Thereafter an extension was again granted up to Dec. 31, 1969. It appears that thereafter the respondent- company wrote to the appellant asking for a rebate of Rs. 70,712. 25 on account of upkeep and repairs of the factory premises.
( 5 ) THE two crucial documents in the case are the letters dt. Dec. 28,1970, written by the appellant, and the reply received thereto. By its letter dt. Dec. 28,1970, issued on behalf of the Settlement Commissioner, the said respondent was informed that it was not possible to give rebate for non-repairs of the building. A fresh offer was made to the respondent to pay the arrears of rent up to Dec. 31, 1970 amounting to Rs. 1,20,165. 67 together with further rent up to the payment of the entire cost of the first instalment of the cost of land and the instalments of arrears were to be paid, as laid down in the earlier letter dated June 23, 1969. The said company was also asked to pay the entire cost of the factory and building which had earlier been asked for. The payment was required to be paid within one month of the date of issue of the said letter, failing which the offer of sale was to be treated as withdrawn. It appears that the respondent wrote of rebate made
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