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PUNJAB & HARYANA HIGH COURT
Jawahar Lal Gupta and K.S.Garewal JJ.
Shanti Kunj Investment (Pvt.) Ltd.
Versus
U.T.Administration, Chandigarh
Civil Writ Petition No. 10409 of 2000,
Decided On : FEBRUARY 2, 2001
AUCTION - LEASE-HOLD OF SITES AND BUILDINGS RULES, 1973 - PUNJAB CAPITAL (DEVELOPMENT AND REGULATION) ACT, 1952 - PUNJAB CAPITAL (DEVELOPMENT AND REGULATION) BUILDING RULES, 1952 - CHANDIGARH ADMINISTRATION - MUNICIPAL CORPORATION - ALLOTMENT OF SITES - PROVISION OF AMENITIES - REMOVAL OF ENCROACHMENTS - PAYMENT OF INSTALLMENTS OF PREMIUM, GROUND RENT AND INTEREST - RATE OF INTEREST - UNCONSCIONABLE CONTRACT - INTERPRETATION OF STATUTES - PRINCIPLES OF CONSTRUCTION OF CONTRACTS - RIGHT TO ENJOY PROPERTY - DUTY OF ADMINISTRATION TO PROVIDE AMENITIES AND REMOVE ENCROACHMENTS - LIABILITY TO PAY INSTALLMENTS, GROUND RENT AND INTEREST - POWER TO FIX RATE OF INTEREST - NOTIFICATION IN OFFICIAL GAZETTE - MAL-ADMINISTRATION - PENALTY - ACCURACY OF AFFIDAVITS - COSTS.
Fact of the Case:
The petitioners, allottees of commercial sites, alleged that the Chandigarh Administration failed to provide basic amenities/facilities for the use and occupation of the sites sold to them. They complained that the Administration had failed to administer. It was guilty of mal-administration. Yet, it was arbitrarily charging ground rent and interest. It was even resorting to the resumption of sites. On these premises, the petitioners prayed for the intervention of this Court so as to prevent the Administration from charging interest and ground rent.
Finding of the Court:
The Court held that the Administration is under a duty to provide the amenities as defined in Sec. 2(b) of the Act. The roads, water supply, street lighting drainage, sewerage, public building, horticulture, land scaping and other public utility services are the amenities contemplated under the Statute. These are essential for an effective enjoyment of the property. These have to be provided. The Court further held that the Administration is under an obligation to ensure that there is no obstruction in the way of the allottee to reach the site and to enjoy the property. In case, there is any obstruction, the Administration is under an obligation to remove it. The Court also held that when the administration fails to provide conditions where the enjoyment of property is possible and the allottee is not to blame in any manner whatsoever, its right to recover the money in the form of ground rent and interest is not enforceable. Otherwise the contract itself shall suffer from the criticism of being unconscionable. The Court further held that the Municipal Corporation cannot charge interest at the rate of 18% as demanded by it.
Issues: 1. Is the Administration required to provide the basic amenities which are essential for the enjoyment of the property? 2. Is the Administration under a duty to remove encorchments like jhuggis or other unauthorised occupants like rehriwalas? 3. Is an allottee entitled to contend that he is not liable to pay the installment of the premium or the ground rent or the interest thereon till the basic amenities are provided by the concerned authority and/or the encroachments are removed? 4. Can the Municipal Corporation charge interest at the rate of 18%? 5. To what relief are the petitioners entitled in these cases?
Ratio Decidendi: 1. The Administration is under a duty to provide the amenities as defined in Sec. 2(b) of the Act. The roads, water supply, street lighting drainage, sewerage, public building, horticulture, land scaping and other public utility services are the amenities contemplated under the Statute. These are essential for an effective enjoyment of the property. These have to be provided. 2. The Administration is under an obligation to ensure that there is no obstruction in the way of the allottee to reach the site and to enjoy the property. In case, there is any obstruction, the Administration is under an obligation to remove it. 3. When the administration fails to provide conditions where the enjoyment of property is possible and the allottee is not to blame in any manner whatsoever, its right to recover the money in the form of ground rent and interest is not enforceable. Otherwise the contract itself shall suffer from the criticism of being unconscionable. 4. The Municipal Corporation cannot charge interest at the rate of 18% as demanded by it.
Final Decision: The writ petitions were allowed. The Administration was directed to provide the amenities and remove the encroachments within a specified time. The petitioners were not liable to pay interest on the installments of the premium and the ground rent till the amenities were provided. The Municipal Corporation was restrained from charging interest at the rate of 18%. The petitioners were also entitled to their costs.
JAWAHAR LAL GUPTA, J.
1. The petitioners in these seven cases are the allottees of different commercial sites. They allege that the Chandigarh Administration has failed to provide basic amenities/facilities for the use and occupation of the sites sold to them. They complain that the Administration has failed to administer. It is guilty of mal-administration. Yet, it is arbitrarily charging ground rent and interest. It is even resorting to the resumption of sites. On these premises, the petitioners pray for the intervention of this Court so as to prevent the Administration from charging interest and ground rent. The factual position as relevant for the decision of these cases may be briefly noticed.CWP No.9481/99
2. On Feb. 12, 1989, the Chandigarh Administration auctioned Godown Site No.290, Sector 26, Chandigarh. The petitioner along with his two brothers gave a bid for a premium of Rs. 22,10,000/-. It was accepted. After deposit of 25% of the bid money viz. Rs. 5,52.500/- , the letter of allotment was issued to the petitioner on March 16, 1989. The site was given to the petitioner for 99 years on lease-hold basis. Under the terms of allotment the petitioner had to pay the amount along with interest at the rate of 7% per annum in three equal yearly installments of Rs. 6,31,590/-. These payments had to commence at the expiry of one year from the date of auction. Besides that, the allottees had also to pay annual ground rent at the rate of Rs. 55,250/- for the first 33 years. A copy of the letter of allotment has been produced as Annexure-P1 with the writ petition.
3. The petitioner commenced construction. However, he found that there were high voltage electric wires passing over the site. The sewerage system had not been laid. There was no approach road to the site. There were a large number of jhuggis adjacent to the place. The dwelllers were using the site as an open lavatory. On Sept. 26, 1989, the petitioner submitted a representation to the Estate Officer with the request that the necessary facilities be provided and that the unauthorised jhuggis be got removed. The needful was not done despite various representations and personal requests. The petitioner alleges that "from the date of allotment till today, no amenities such as roads, water supply, sewerage, drainage, land-scaping and other public utility services have been provided." He has "paid the entire premium...." Since "the amenities prescribed under the Act and necessary for the proper use of the site have not been made available at the site from the date of auction till today, no interest or ground rent can be charged. ........ till the amenities are made available and the site is made use-able.... " It is his case that the Administration " is required to provide the amenities and to develop the site before auction which the respondents fail to do. Without developing the site and providing the amenities, the respondents started charging the ground rent from the date of auction. Since .........site is not fit for use, no ground rent and interest deserve to be charged till the amenities are provided and the site is made properly useable for running the business for which it has been purchased.
4. The petitioner alleges that his repeated requests for provision of facilities were not heeded to. However, on June 1, 1990, the Estate Officer issued a notice under Rule 12(3) of the Chandigarh Lease-hold of Sites and Buildings Rules, 1973 calling upon him to pay the first installment along with ground rent. Interest and a penalty of Rs. 46,684/. A copy of this notice has been produced as Annexure-P.7. The petitioner was warned that if the payment is not made, the proceedings for cancellation of lease shall be initiated. He filed an appeal against the order. The Chief Administrator vide his order dated Feb. 6, 1998, found that "the Assistant Estate Officer has imposed the maximum possible penalty on account of the delay in making the payment. It is felt that the m
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