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Punjab Urban Planning and Development Authority and anr. Vs. Pawan Kumar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtPunjab and Haryana High Court
Decided On
Judge
Reported in(2009)156PLR625
AppellantPunjab Urban Planning and Development Authority and anr.
RespondentPawan Kumar
DispositionAppeal allowed
Cases ReferredSupreme Court In Raja Ram Pal v. Hon
Excerpt:
.....punjab regional and town planning and development act, 1995 - respondent was allotted plot through allotment letter - respondent deposited 10% of total price - respondent sought extension of time to deposit balance money - allotment in favour of respondent cancelled and earnest money forfeited - respondent filed suit against appellant - suit was decreed in favour of respondent - appeal - dismissed - hence, present appeal - held, respondent did not accept terms and conditions of sale consideration in terms of letter of allotment - allotment letter was only an offer - respondent has failed to accept offer within time - thus procedure contemplated in section 45 of act does not come into play - respondent by his conduct allowed offer to lapse and, therefore, jurisdiction of civil court could..........was allotted plot no. 1144 measuring 150 square yards in phase-iii, urban estate, bathinda vide allotment letter dated 16.8.2001/15.10.2001. a sum of rs. 2,97,000/was the total sale consideration. the plaintiff has deposited 10% of the total price. in terms of the allotment letter, 15% of the total price was to be deposited within 60 days and the remaining 75% in six monthly instalments commencing from 16.8.2002 to 16.2.2005. the plaintiff sought extension of time for deposit of rs. 44,550/-i.e. 15% of the total price vide letter dated 12.12.2001. such request was reiterated on 11.7.2002. on 23.1.2003, the plaintiff sought refund of the amount already deposited. it was only on 12.8.2003, he moved an application for withdrawal of his earlier application dated 23.1.2003. the plaintiff.....
Judgment:

Hemant Gupta, J.

1. The defendants are in second appeal aggrieved against the judgment and decree passed by the Courts below, whereby suit for declaration challenging the order of cancellation of allotment of plot and for mandatory and permanent injunction in respect of possession of the said plot, was decreed.

2. The plaintiff-respondent was allotted plot No. 1144 measuring 150 square yards in Phase-III, Urban Estate, Bathinda vide allotment letter dated 16.8.2001/15.10.2001. A sum of Rs. 2,97,000/was the total sale consideration. The plaintiff has deposited 10% of the total price. In terms of the allotment letter, 15% of the total price was to be deposited within 60 days and the remaining 75% in six monthly instalments commencing from 16.8.2002 to 16.2.2005. The plaintiff sought extension of time for deposit of Rs. 44,550/-i.e. 15% of the total price vide letter dated 12.12.2001. Such request was reiterated on 11.7.2002. On 23.1.2003, the plaintiff sought refund of the amount already deposited. It was only on 12.8.2003, he moved an application for withdrawal of his earlier application dated 23.1.2003. The plaintiff was informed vide communication dated 8.12.2003 that the allotment stands cancelled and earnest money of Rs. 29,700/-stands forfeited. The plaintiff alleged that the order dated 8.12.2003 is illegal, null & void, arbitrary, ineffective, inoperative and unconstitutional. The plaintiff alleged that before the cancellation of the allotment, he was not issued any notice nor any opportunity of hearing was granted to the plaintiff.

3. In the written statement, it was pleaded that the jurisdiction of the Civil Court was barred under Section 174 of the Punjab Regional and Town Planning and Development Act, 1995 [ for short `the Act' ]. The plaintiff was given extension upto 31.3.2002, but again he sought extension, but still the plaintiff failed to deposit the amount, which led to the cancellation of allotment. It was denied that the letter dated 12.8.2003 was written by the plaintiff regarding withdrawal of his earlier application.

4. The learned trial Court decreed the suit on the ground that no notice was served upon the plaintiff before cancellation of the plot. It held to the following effect:.It is also not sufficient for the defendants to say that no notice was required to be issued to the plaintiff before cancellation of the allotment letter because of the option of the plaintiff to withdraw the application money. The defendants were supposed to proceed in accordance with Section 45 of the PUDA Act. Section 45 of the PUDA Act provides for the imposition of penalty. There is no justification for not proceeding in accordance with Section 45 of the PUDA Act. Order Ex. P2 regarding cancellation of the allotment letter is hence not legal and valid order. It is against the principles of natural justice. When the plaintiff lastly offered to pay the price alongwith interest and penalty, the defendants should have followed the procedure as enshrined in Section 45 of the PUDA Act.

5. The learned trial Court noticed the fact that there is delay in payment of the instalments by way of earnest money on the part of the plaintiff, but the defendants have cancelled the allotment without taking into consideration the application of the plaintiff, whereby he has expressed his intention to pay the amount. The plaintiff has conveyed that he could not pay the amount due to sickness of his son.

6. The Court concluded to the following effect:.From the evidence on record, it is proved that the order Ex. P.2 is illegal, null, void and is against the principles of natural justice. The same is not binding on the rights of the plaintiff. The plaintiff is bound to get the plot re-allotted, as per the terms and conditions of the allotment order and in view of Section 45 of the PUDA Act. The defendants are however at liberty to impose penalty and interest on the amount to be paid by the plaintiff towards the price of the plot.

7. The appeal against the aforesaid judgment and decree was dismissed by the learned first Appellate Court. It was found by the learned first Appellate Court that in terms of Clause 9 of the allotment letter, the plaintiff was required to be served with notice in case any instalment is not paid by the allottee by the due date. Thus, it was found that since no notice was given to the plaintiff, the order of cancellation of the plot is not tenable.

8. The appeal was admitted vide order dated 7.7.2009 by this Court on the following substantial questions of law:

1. Whether the jurisdiction of the Civil Court is barred in terms of Section 174 of the Punjab Regional and Town Planning and Development Act, 1995?

2. Whether the plaintiff is entitled to declaration and injunction, even when he has defaulted even in payment of the earnest money and the balance sale consideration?

However, at the stage of consideration of the application for interim relief, learned Counsel for the parties stated that the appeal itself be taken up for hearing.

9. The questions of law framed at the time of admission of the appeal are re-framed to read as under:

1. Whether a concluded contract has come into existence between the parties which entitles the plaintiff of an opportunity of hearing or a show cause notice before communicating the cancellation of allotment of the plot?

2. Whether the jurisdiction of the Civil Court is barred in terms of Section 174 of the Punjab Regional and Town Planning and Development Act, 1995?

10. The relevant Clauses i.e. Clauses No. 3, 4 and 9 of the allotment letter read as under:

[3] In case you accept allotment you should send your acceptance by registered AD post within 60 days from the date of receipt of allotment letter along with amount of Rs. 44550/-which together with an amount of Rs. 29,700/-paid by you along with your application form as earnest money will constitute 25% of the total tentative price, in case you fail to make the payment within the stipulated time, the allotment is liable to be cancelled. However, on your request the Chief Administrator or any other officer authorised by him may allow to make the payment of the initial amount as the case may be made within a further period of 6 months subject to the condition that the interest for extension in time should be made by you within sixty days from the date of issue of allotment letter, in that case. Penal interest at the rate of ONE AND HALF PERCENT (1-1/2%) per annum shall be charged on the amount due. However, if the request for extension is received after 60 days of the date of issue of allotment letter in that case penal interest at the rate TWO PERCENT (2%) per annum shall be charged on the amount due.

[4] In case, you refuse to accept the allotment and your refusal is received after the draw of lots and within 30 days of issue of allotment letter, in that case 10% of earnest money deposited shall be forfeited. In case refusal is received after 30 days and within 60 days of issue of allotment letter, 15% of the earnest money deposited shall be forfeited. In case of refusal /acceptance is not received within 60 days of the issue of allotment letter or refusal is received after making 25% payment, the action shall be taken under the provision of Section 45(3) Punjab Regional Town Planning and Development Act, 1995.

xx xx xx

[9] In case any instalment is not paid by you by the due date then without prejudice to any action under Section 45 of the Punjab Regional & Town Planning and Development Act, 1995, you shall be liable to pay interest on instalment so due @ one and half percent per mensum for the period of the default not exceeding one year and thereafter @ 2% per mensum till the date of instalment so due is actually paid or till the date, action is initiated Under Section 45 of the said Act whichever date is earlier.

11. The allotment letter was issued to the plaintiff on 15.10.2001. In terms of Clause 3 of the allotment letter, the plaintiff was to deposit a sum of Rs. 44,550/-within 60 days and with such deposit alone, it would constitute 25% of the total tentative price. The Chief Administrator could extend the period of deposit for a period of six months, but on condition of payment of interest. The plaintiff sought extension of time within 60 days vide his letter dated 12.12.2001. Vide Exhibit D.3 dated 29.1.2002, the plaintiff was given time to deposit the balance 15% amount upto 31.3.2002 along with interest @ 12%. Exhibit D.4 is the letter written by the plaintiff on 30.3.2002 to the effect that he is not in a position to pay the amount and requested for extension of time. Exhibit D.5 is the letter dated 13.6.2002 to the effect that period of two months sought earlier, has come to an end, but amount has not been deposited. On 23.1.2003, the plaintiff has sought refund of Rs. 29,700/-deposited as an application money. Thereafter, an order was passed by the Estate Officer on 8.12.2003 for cancellation of the allotment. The request for withdrawal of application dated 23.1.2003 is Exhibit P.6.

12. The plaintiff has not deposited 15% of the amount within 60 days. The time for deposit could be extended only for a period of six months. The plaintiff has not deposited the amount within the aforesaid period as well. It was only on 12.8.2003 i.e. 22 months after the issuance of allotment letter, the plaintiff conveyed his willingness to deposit the amount. It is only on payment of 15% of the amount, a concluded contract would come into existence. Prior thereto, the allotment letter is only an offer. Since the plaintiff has failed to accept the offer within the time granted, a concluded contracted never came into existence and thus, the procedure contemplated in Section 45 of the Act, does not come into play. Both the Courts have misconstrued the terms of letter of allotment letter and have wrongly held that the procedure for resumption of plot as provided in Section 45 of the Act was required to be followed.

13. In Chaman Lal Singhal v. Haryana Urban Development Authority and Ors. : (2009)4 Supreme Court Cases 369, in somewhat similar circumstances pertaining to the allotment of plot by the Haryana Urban Development Authority, It was held to the following effect:

21. In our considered opinion the appellant failed to comply with the aforesaid clauses of the letter of allotment and, therefore, his allotment stood cancelled and the earnest money deposited by him could be forfeited by the Authority. The order of cancellation came to be passed by the competent authority after 500 days. Be that as it may, the aforesaid allotment of plot of land in favour of the appellant came to be cancelled because of nonpayment of the amount as stipulated in Clause 5 and, therefore, the earnest money deposited by him could be forfeited by the Authority.

22. Since the case of the appellant comes within the ambit of Clauses 4 and 5 of the allotment letter, the provisions of Section 17 of the Act would have no application and would not apply. It is thus, established that there was no agreement/contract between the appellant and the respondent Authority and there being no such agreement/contract and because of non-compliance with requirement of Clause 5 the issue with regard to violation of principles of natural justice also would not arise. Therefore, the contentions that provisions of Section 17 of the Act are violated and that there is noncompliance with the principles of natural justice have no merit.

14. In view of the said factual and legal position, the finding recorded by the Courts below that the respondents have not issued any notice or granted opportunity of hearing to the plaintiff before resumption of the plot is misconceived, as no concluded contract came into force between the parties as plaintiff has failed to accept the terms and conditions on deposit of 25% of the sale consideration in terms of the letter of allotment.

15. In view of the above, the first substantial question of law is answered in favour of the appellant and against the plaintiff.

16. A Full Bench of this Court in the judgment reported as State of Haryana and Ors. v. Vinod Kumar and Ors. AIR 1986 P&H; 406, has held that though the express provision excludes the jurisdiction of the Civil Court, but still the bar created by the relevant provisions of the Act, cannot operate in the case where the plea raised before the Civil Court goes to the root of the matter and would if upheld lead to the conclusion that the impugned order is a nullity. It was held to the following effect:.Applying these two tests it does appear that the words used in Section 3(4) and Section 16 are clear. Section 16 in terms provides that the order made under this Act to which the said section applies shall not be called in question in any Court. This is an express provision excluding the Civil Courts' jurisdiction. Section 3(4) does not expressly exclude the jurisdiction of the Civil Courts but in the context, the inference that the Civil Courts' jurisdiction is intended to be excluded, appears to be inescapable. Therefore, we are satisfied that Mr. Goyal is right in contending that the jurisdiction of the Civil Courts is excluded in relation to matters covered by the orders included within the provisions of Seciton 3(4) and Section 16.

This conclusion, however, does not necessarily mean that the plea against the validity of the order passed by the District Magistrate, or the Commissioner, or the State Government can never be raised in a Civil Court. In our opinion, the bar created by the relevant provisions of the Act excluding the jurisdiction of the Civil Courts cannot operate in cases where the plea raised before the Civil Court goes to the root of the matter and would, if upheld, lead to the conclusion that the impugned order is nullity.

17. In the present case, the plaintiff has not accepted the offer of allotment. By failure to accept the terms of the allotment, the plaintiff by his conduct allowed the offer to lapse and, therefore, the jurisdiction of the Civil Court could not have been invoked.

18. Another aspect that needs to be examined is the extent of power of the judicial review of the Civil Court. Does the Civil Court acts as a Court of appeal and thus, could sit over the decision as an Appellate Authority and to exercise the powers of Authorities under the Act or will only examine the decision making process?

19. It is well settled that the scope of the judicial review is limited to the deficiency in decision making process and not the decision itself. The Hon'ble Supreme Court, while dealing with such aspect in Union of India and Anr. v. K.G. Soni : (2006)6 Supreme Court Cases 794, has held to the following effect:

14. The common thread running through in all these decisions is that the court should not interfere with the administrator's decision unless it was illogical or suffers from procedural impropriety or was shocking to the conscience of the court, in the sense that it was in defiance of logic or moral standards. In view of what has been stated in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation (1948) 1 KB 223, the court would not go into the correctness of the choice made by the administrator open to him and the court should not substitute its decision to that of the administrator. The scope of judicial review is limited to the deficiency in the decision making process and not the decision.

20. Similar is the decision of the Hon'ble Supreme Court in Bachan Singh v. Union of India and Ors. : (2008) 9 Supreme Court Cases 161, wherein it has been held to the following effect:.It is well-known and well settled proposition of law that in proceedings under Article 226 of the Constitution, the High Court cannot sit as a court of appeal over the findings recorded by the GCM. Judicial review under Article 226 of the Constitution is not directed against the decision but is confined to the decision-making process. Judicial review is not an appeal but a review of the manner in which the decision is made. The Court sits in judgment only on the correctness of the decision-making process and not on the correctness of the decision itself. Thus, examining the case of the appellant from all angles we are satisfied that there was no irregularity or illegality in the GCM which was fairly and properly conducted by most qualified members holding very high ranks in army hierarchy.

21. A Constitution Bench of the Hon'ble Supreme Court In Raja Ram Pal v. Hon'ble Speaker, Lok Sabha and Ors. : (2007) 3 Supreme Court Cases 184, concluded that the power of judicial review can be exercised for the following:

431. (a) to (t)xxxxxx

(u) An ouster clause attaching finality to a determination does ordinarily oust the power of the court to review the decision but not on grounds of lack of jurisdiction or it being a nullity for some reason such as gross illegality, irrationality, violation of constitutional mandate, malafides, non-compliance with rules of natural justice and perversity.

22. In view of the judgments referred to above, the Civil Court could exercise jurisdiction only on the ground of lack of jurisdiction or it being a nullity, such as, gross illegality, irrationality, violation of constitutional mandate, malafides, non-compliance with rules of natural justice and perversity. None of the said grounds, is attracted in the present case, which could warrant exercise of judicial review by the Civil Court.

23. Consequently, the present appeal is allowed. Judgment and decree passed by the Courts below are set aside and suit of the plaintiff is dismissed.


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