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C.S. Narayana Rao Vs. City Improvement Trust Board, Bangalore - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. No. 566 of 1968
Judge
Reported inAIR1969Kant310; AIR1969Mys310; ILR1969KAR399; (1969)1MysLJ237
AppellantC.S. Narayana Rao
RespondentCity Improvement Trust Board, Bangalore
Excerpt:
.....failure of the allottee to commence or complete the construction within the period specified by the third condition, or for any other reason, since the contract does not empower resumption of a properly alienated site......30 feet by 50 feet in jayanagar was allotted on december 14, 1949 by the city improvement trust board to a certain abdul razack. the terms and conditions under which that allotment was made were incorporated in an agreement executed on may 26, 1952. the third condition in that agreement stated that the allottee should commence the construction on the site allotted to him within six months from the date on which possession was delivered, and that that construction shall be completed within two years thereafter. possession was delivered to the allottee on june 18, 1953, but the allottee did not commence the construction. instead, he sold the site to the petitioner before us on march 1, 1967.2. on april 24, 1967 the allottee made an application to the trust board for the transfer.....
Judgment:

Somnath Iyer, J.

1. A small site measuring 30 feet by 50 feet in Jayanagar was allotted on December 14, 1949 by the City Improvement Trust Board to a certain Abdul Razack. The terms and conditions under which that allotment was made were incorporated in an agreement executed on May 26, 1952. The third condition in that agreement stated that the allottee should commence the construction on the site allotted to him within six months from the date on which possession was delivered, and that that construction shall be completed within two years thereafter. Possession was delivered to the allottee on June 18, 1953, but the allottee did not commence the construction. Instead, he sold the site to the petitioner before us on March 1, 1967.

2. On April 24, 1967 the allottee made an application to the Trust Board for the transfer of the Khata of the site to the name of the petitioner. On July 12, 1967 the Trust Board informed the allottee that that transfer would be made provided he paid the various sums of money set out in that communication. The transferee was asked to pay a small sum of Rs. 10/- by way of transfer fee, a sum of Rs. 54/- which was 61/4% of the value of the site and another sum of Rs. 2,000/- which was the market value of the site on the date on which its transfer was sought. The allottee was also informed that the other condition subject to which the transfer of the khata would be made was that the transferee shall construct a building on the site before December 30, 1967.

3. In a communication addressed by the petitioner's advocate to the Trust Board on August 16, 1967 it was asserted on behalf of the petitioner that the demand made for the payment of the sums of money, to which we have already referred, was an illegal demand, and the Trust Board was called upon to execute the title deed on production of the stamp duty and registration charges. This advocate's letter which was sent to the Trust Board proved unfortunate to the Petitioner. The Trust Board informed the allottee on October 24, 1967 that, in supersession of its earlier letter of July 12, 1967 in which the Trust Board stated that it would be willing to make a transfer of the khata on fulfillment of the conditions enumerated in that letter, the site had been resumed by the Board for breach of the third condition of the agreement executed by the allottee in favour of the Board.

4. This Writ petition is the sequel to that communication, and there is more than one prayer in it. The first is that we should quash the order of resumption. The second is that we should quash the demand for the payment of the sums of money referred to in the letter addressed by the Board on July 12, 1967. The third is that there should be a direction for registration of the petitioner as the khatedar, and the fourth is that we should issue a direction to the Trust Board that it should execute a registered deed of conveyance in favour of the petitioner.

(In para 5 of the order it was held that the prayer for a mandamus requiring the Board to execute the sale deed could not be granted for the reason that the petitioner had not even offered to produce requisite stamped paper. Which he was bound to do under the terms. In paras 6 to 8 the Board's demand of the various sums was quashed on the ground that the terms did not authorise such a demand and after the prohibited period of ten years the allottee could as of right alienate the property to whomsoever he likes. The order then proceeds:)

5. The next question is whether we should quash the order of resumption which was made on October 24, 1967. It is clear that that order of resumption cannot be sustained. The allotment was made as long ago as in the year 1949 and possession of the property was delivered on June 18, 1953. The allottee, under the third condition of the agreement, had to commence the construction on or before December 18, 1953 and had to complete it on or before December 18, 1955. When the Trust Board addressed a letter to the allottee on July 12, 1967, it did not propose to make a resumption of the site on the ground that the construction which should have been completed in the year 1955 had not been completed until 1967 there had already been an alienation in favour of the petitioner or March 1, 1967, and far from the Trust Board entertaining any thought of making the resumption it expressed its willingness to transfer the khata in respect of the site to the name of the petitioner if he complied with the conditions enumerated in that letter. Moreover, the Trust Board informed the allottee that the time for the construction of the building had been extended until December 30, 1967.

6. Under the third clause of the agreement the Board reserved for itself the power to extend the time of the construction of the building and, it is obvious that it was in the exercise of that power that it extended the time for completing the construction till December 30, 1967. Having extended the time in that way. it was clearly precluded from making an order of resumption on October 24, 1967 when the period of extension had not yet expired.

7. Moreover, under the terms of the agreement the allottee had to complete the construction on or before December 18, 1955. But notwithstanding the fact that the allottee did not even commence the construction by December 18, 1955, when he should have completed it, the Trust Board never entertained any thought of exercising the power of resumption which it could exercise under clause 8 of the agreement. The power of resumption which that clause incorporates has to be exercised within a reasonable time after the occasion for the exercise of that power arises, and if the Trust Board did not exercise any such power for a period of nearly twelve years after that occasion arose, it is reasonable to presume the abandonment of that power.

8. That, that is the proper view to take is clear from the provision of the fifth clause in agreement which reads:

'That the site or the building that may be constructed thereon is not to be alienated by the first party for ten years, except with the written permission of the second party, it being also open to the second party to claim preemption in the second party's favour at rates to be fixed by the second party. The second party may permit the hypothecation by the first party in favour of recognised building societies or institutions for bona fide building purposes on the site, each case being considered on its merits by the second party.'

9. This clause makes it clear that after the expiry of a period of ten years, the allottee had the power to alienate the site if no building has been constructed thereon, in the same way in which he had the power to alienate the building if one was constructed. The right to make an alienation of the site if it remains vacant during a long period of ten years and has not been resumed by the Board clearly flows from this clause. And if that alienation which is authorised by the contract between the Board and the allottee is made the alienee becomes the owner of the site completely liberated from the risk of resumption either for the antecedent failure of the allottee to commence or complete the construction within the period specified by the third condition, or for any other reason, since the contract does not empower resumption of a properly alienated site.

10. The prayer that there should be a transfer of the khata of the site to the name of the petitioner is, in our opinion, irresistible. Once there was an alienation to the petitioner after the expiry of the period of ten years to which clause 5 of the agreement refers, the alienee became clothed with the right to ask the Board to transfer the site to his name. Indeed, in its letter of July 12, 1967 the Board expressed its willingness to transfer the site although it stated that it would be done no payment of the sums of money specified in that letter, which it could not legally call upon the petitioner to pay. We must therefore ignore those illegal demands contained in that letter, and, when we do so there is a duty on the part of the Trust Board to transfer the site to the name of the petitioner as it itself agreed to do. We therefore make a direction that the site shall be transferred to the name of the petitioner.

11. As we have already observed the prayer in that part of the application by which we were asked to issue a direction to the Trust Board that it should execute a sale deed in favour of the petitioner stands dismissed.

12. No costs.

13. Petition allowed.


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