CHAMAN LAL SINGHALversusHARYANA URBAN DEVELOPMENT AUTHORITY & ORS.

                              [2009] 1 S.C.R. 1045


                           CHAMAN LAL SINGHAL                           A
                                       v.
           HARYANA URBAN DEVELOPMENT AUTHORITY & ORS.
                     (Civil Appeal No. 803 of 2009)
                             FEBRUARY 9, 2009
                                                                        B
           [S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.]
    ·i'
              URBAN DEVELOPMENT:

              HARYANA URBAN DEVELOPMENT AUTHORITY                       c
          ACT, 1977:

              S. 17 - Allotment of land - Delay in depositing 15% of
          the amount - Consequent cancellation of the land -
          Justification of - Held: Rejection of representation by the
                                                                        D
          Estate Officer not proper- Matter remanded to the Chairman
          of HUDA for considering the representation in accordance
          with law and as expeditiously as possible.

              In this appeal against the judgment of the Punjab
          and Haryana High Court, the question that arose for           E
          consideration was whether the land allotted to the
          ~ppellant could have been cancelled in the manner in
          which it was done by respondent-Authority (HUDA).

              Disposing of the appeal and remitting the matter to
                                                                        F
          the Chairman, HUDA, the Court

              HELD:1. A bare perusal of. the aforesaid relevant
          clauses of the allotment letter would indicate that the
          balance amount of the cost price i.e. Rs. 5,39,4841- could
          be paid either in lump sum without interest within 60 days    G
          from the date of issue of allotment letter or in six annual
......    installments which were recoverable in terms of the
          Schedule given in clause 6 of the aforesaid allotment

                                     1045                               H
    1046       SUPREME COURT REPORTS            [2009) 1 S.C.R.


A letter. [Para 14] [1055-D-E]

        2. 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
8
   order of cancellation came to be passed by the
   competent authority after 500 days. The allotment of plot
   of land in favour of the appellant came to be cancelled
   because of non-payment of the amount as stipulated in
   clause 5 and, therefore, the earnest money deposited by
C him could be forfeited by the Authority. 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 agreemenUcontract
D between the appellant and the respondent-Authority and
  there being no such agreemenUcontract and because of
  non-compliance of requirement of clause 5 the issue with
  regard to violation of principles of natural justice also
  would not arise. Therefore, it cannot be said that
E provisions of Section 17 of the Act are violated and that
  there is non-compliance of the principles of natural
  justice. [Para 15] [1055-G-H; 1056-A-C]

       3. It is, however, explicit from the records that there
F is an instruction of the respondent-Authority in terms of
  which delay in depositing 15% price up to 150 days could
  be condoned by the Chief Administrator, HUDA and that
  the Chairman of HUDA is competent to condone the delay
  beyond 150 days if he is satisfied that the allottee failed
G to deposit 15% of the amount due to the reasons which
  were beyond his control. The revisional authority while
  disposing of the revision petition also granted such a          -,.... ~
  liberty to the appellant to approach the appropriate
  authority for restoration of the plot and for condonation
  of the delay in depositing 15% price of the plot. The
H
       CHAMAN LAL SINGHAL v. HARYANA URBAN DEVE.            1047
                   AUTHORITY & ORS.

      appellant availed the said opportunity provided by the        A
      revisional authority but his representation came to be
     dismissed by the Estate Officer on the ground that his
     appeal and the revision petition stood dismissed. The
     aforesaid disposal of the representation by the Estate
     Officer was not proper, for the Estate Officer while           B
     disposing of the said representation did not at all deal
     with or mention as to whether or not the same was a case
     for condonation of delay in depositing the 15% amount.
     Besides, in terms of the aforesaid departmental
     instruction it is the Chief Administrator who is required      c
     to consider the said representation initially and if it is a
     case of delay of more than 150 days the same is required
     to be considered by the Chairman, HUDA. In the instant
     case, in terms of the records available the said
     representation was rejected by the Estate Officer and,
                                                                    D
     therefore, such disposal was not in accordance with law.
     [Paras 16 and 17] (1056-D-F; 1057-A-B]

         4. The order of the Division Bench of the Punjab and
     Haryana High Court is set aside and the matter is
     remanded to the Chairman, HUDA for considering the             E
     aforesaid representation of the appellant in accordance
     with law and as expeditiously as possible. [Para 18]
     (1057-C]

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 803        F
     of 2009.

         From the JudgmenUOrder dated 19.7.2007 passed by the
     High Court of Punjab & Haryana at Chandigarh in CWP No.
     10672/2007.
                                                                    G
           Vikas Mahajan, Vishal Mahajan Bhaskar and Y. Kuikarni
.~   for the Appellant.

         Kumar Kartikay, Aruneahwar Gupta, Ravi Vijay and Neelu
     Sharma for the Respondent.
                                                                    H
    1048        SUPREME COURT REPORTS               [2009] 1 S.C.R.


A       The Judgment of the Court was delivered by

         DR. MUKUNDAKAM SHARMA, J.1. Leave Granted.

       2. In this appeal we are called upon to adjudicate and
  decide an issue as to whether the land allotted to the appellant
B could have been cancelled in the manner in which it was done
  by respondent No. 1 - Haryana Urban Development Authority
  (in short the "Authority").

        3. The appeal is filed against the judgment and order of
c the Division Bench of the Punjab and Haryana High Court,
  whereby the Division Bench dismissed the writ petition not only
  on the ground of inordinate delay but also on the premise that
  no reasonable ground is made out to exercise the equitable
  jurisdiction of the court under Article 226 of the Constitution of
D India.
           4. In order to appreciate the contentions raised on behalf
    of the parties it would be necessary to state few facts leading
    to filing of the writ petition before the Punjab and Haryana High
    Court.
E
       5. The appellant submitted an application for allotment of
  a residential plot to the respondent-Authority. The aforesaid
  request of the appellant was considered and accepted.
  Accordingly the respondent-Authority passed an order allotting
F a residential plot to the appellant bearing No. 1042-P in Sector
  43, Gurgaon measuring about 135 square meter at a tentative
  cost of Rs. 4,843.8 per square meter. As the said plot was a
  preferential one the appellant was required to pay an additional
  10% of the price, thus making the total sale consideration at
G approximately Rs. 7, 19,312/-. An allotment letter dated 14-06-
  2002 was issued by the respondent-Authority to the appellant
  wherein the terms and conditions of allotment were mentioned.         ,.
  Some of the relevant clauses having a bearing in the present
  case are extracted below :
H
           CHAMAN LAL SINGHAL v. HARYANA URBAN DEVE.                 1049
            AUTHORITY & ORS. [MUKUNDAKAM SHARMA, J.]

    -1        Clause 4. In case you refuse to accept this allotment you A
              shall communicate your refusal by a registered letter within
              30 days from the date of issue of this allotment letter, falling
              which this allotment shall stand cancelled and the earnest
              money deposited by you shall be forfeited to authority and
              you shall have no claim for damages.                             B
              Clause 5. In case you accept this allotment, please send

"
    +         you acceptance by registered post an amount of Rs.
              114436.00 within 30 days from the date of issue of
              allotment letter, which together with an amount of Rs.
              65392.00 paid by you along with your application form an
                                                                              c
              earnest money, will constitute 25 percent of the total
              tentative price.

              Clause 6. The balance amount i.e. Rs. 539484.00 of the
              above tentative price of the plot can be paid in lump sum D
              without interest within 60 days from the date of issue of
              allotment letter or in six annual installments. The first
              installment will fall due after the expiry of one year of the
              date issue of this letter. Each installment would be
              recoverable together with interest on the balance price at E
              15% interest of the remaining amount. The interest shall
              however, accrue from the date of offer of possession.

               6. In accordance with the aforesaid terms and conditions
         of allotment letter the appellant was required to deposit an
                                                                               F
         amount of Rs. 1, 14,436/- within 30 days from the date of the
         said allotment letter. The balance tentative amount of Rs.
         5,39,484/- was required to be paid either in lump sum without
         interest within 60 days from the date of issue of the allotment
         letter or in six annual installments with interest at the rate of 15%
         per annum. The interest, however, was to be calculated from G
         the date of offer of possession. Some of the other relevant
    -~
         terms of the allotment letter which would have a bearing while
         deciding the present matter are extracted hereinbelow :

              Clause 10. In case the installment is not paid by the 10th      H
    1050        SUPREME COURT REPORTS                [2009) 1 S.C.R. .
                                                                         •
A        of the month following the month in which it falls due for in
         the case the additional price is not paid within time, the
         Estate Officer shall proceed to take action for imposition
         of penalty and resumption of plot in accordance with the
         provisions of Section 17 of the Act.
B
         Clause 11. In the event of the breach of any other condition
         of transfer the Estate Officer may resume the land in_
         accordance with the provision of Section 17 of the Act.

        7. The appellant received the aforesaid letter of allotment
C but he did not send any letter of acceptance of the aforesaid
   allotment to the respondent-Authority nor did he pay the amount
 · of Rs. 1, 14,436/- within 30 days from the date of issue of the
   aforesaid allotment letter. Consequent thereto, due to non-
   payment of the amount due and payable, the Estate Officer
D issued an order which was communicated under letter dated
   3.12.2003 whereby the allotment in favour of the appellant was
   cancelled. In terms of the aforesaid clauses appearing in the
   allotment letter earnest money equivalerit to 10% was forfeited
   by the respondent-Authority. The contents of the aforesaid letter
E issued by the Estate Officer are as under:

        •As per terms and Conditions No. 5 of the allotment letter
        issued vide this office Memo No. 2222 dated 11.6.2002
        (11th June, 2002), you have failed to deposit the 15%
        amount within 30 days from the date of issue of allotment
F       letter i.e. upto 10.7.2002. Hence, the allotment letter of the
        above said plot issued vide this office memo No. 2222
        dated 11.6.2002 is hereby cancelled and 10% amount
        deposited by you is also forfeited in favour of the .
        Authority."                       ·· ·             ·
G
        · 8. Being aggrieved by the aforesaid cancellation of the
    allotment the appellant approached the appellate authority               ~.~
    namely, the Chief Administrator, Haryana Urban Development
    Authority (for short 'HUDA'). However, the same was of no avail
    and the appeal of the appellant was dismissed by the Chief
        CHAMAN LAL SINGHAL v. HARYANA URBAN DEVE.                1051
        AUTHORITY & ORS. [MUKUNDAKAM SHARMA, J.]

     Administrator on the ground that the cancellation order passed      A
     by the Estate Officer was in accordance with and in consonance
     with the terms and conditions of the allotment letter. Consequent
     upon passing of the said order the order forfeiting the earnest
     money was also upheld. While disposing of the said appeal the
     appellate authority also mentioned that no order was passed         B
     by the Estate Officer under Section 17 of the Haryana Urban
     Development Authority Act. 1977 (hereinafter referred to as the
     "Act").

           9. The appellant still aggrieved, filed a revision petition C
      which was also dismissed by the revisional authority i.e. the
      Commissioner and Principal Secretary to Government,
      Haryana, Town and Country Planning Department, Chandigarh
      by an order passed on 14.7.2006. In the said order which was
      communicated to the appellant the revisional authority held that
      as per departmental instructions delay in depositing 15% of the D
      amount up to 150 days could be condoned by the Chief
     Administrator, HUDA. As per instructions, Chairman of HUDA
     is competent to condone the delay beyond 150 days if he is
     satisfied that the allottee has failed to deposit the amount due
     to the reasons which were beyond his control. However, while E
     disposing the revision petition an option was given to the
     appellant-allottee to approach the respondent-Authority for
     condonation of delay in depositing 15% price and for restoration
     of the plot. In terms of the aforesaid order the appellant-allottee
     gave a representation to the respondent-Authority but the said F
     representation was rejected by the Estate Officer by only
     mentioning that the appeal and revision petition filed by the
     appellant having already been rejected by the Chief
     Administrator, HUDA as well as by the Commissioner, the said
     representation also stands dismissed. Thus, having no other G
     alternative left the appellant approached the High Court of
•.
     Punjab and Haryana by filing the aforesaid writ petition which
     was also dismissed in the manner stated hereinabove.

         10. We heard the learned counsel appearing for the              H
    1052       SUPREME COURT REPORTS               [2009] 1 S.C.R.


A parties who had taken us through the records and also the
  relevant provisions. Since the letter of allotment makes a
  reference to Section 17 of the Act and since the counsel for
  the parties referred to and relied upon the same while making
  their submissions, the said section is extracted hereinbelow:
B
       Section 17. Resumption and forfeiture for breach of
       conditions of transfer
                                                                       .., '
        (1) Where any transferee makes default in the payment of
        any consideration money, or any installment, on account
c       of the sale of any land or building, or both, under Section
        15, the Estate Officer may, by notice in writing, call upon
        the transferee to show cause within a period of thirty days,
        why a penalty which shall not exceed ten percent of the
        amount due from the transferee, be not imposed upon him.
D
       (2) After considering the cause, if any, shown by the
       transferee and after giving him a reasonable opportunity
       of being heard in the matter, the Estate Officer may, for
       reasons to be recorded in writing, make an order imposing
       the penalty and direct that the amount of money due along
E
       with the penalty shall be paid by the transferee within such
       period as may be specified in the order.

       (3) If the transferee fails to pay the amount due together
       with the penalty in accordance with the order made under
F      Sub-section (2), or commits a breach of any other
       condition of sale, the Estate Officer may, by notice in
       writing, call upon the transferee to show cause within a
       period of thirty days, why an order of resumption of the land
       or building, or both, as the case may be, and forfeiture of
G      the whole or any part of the money, if any, paid in respect
       thereof which in no case shall exceed ten per cent of the
       total amount of the consideration money, interest and other
       dues payable in respect of the sale of the land or building,
       or both, should not be made.
                                                                         •·
H
             CHAMAN LAL SINGHAL v. HARYANA URBAN DEVE.                  1053
             AUTHORITY & ORS. [MUKUNDAKAM SHARMA, J.]

               (4) After considering the cause, if any, shown by the            A
               transferee in pursuance of a notice under sub-section (3)
               and any evidence that he may produce in support of the
               same and after giving him a reasonable opportunity of
               being heard in the matter, the Estate Officer, may for
               reasons to be recorded in writing, make an order resuming        B
               the land or building or both, as the case may be, and
               directing the forfeiture as provided in sub-section (3) of the
               whole or any part of the money paid in respect of such sale.

                (5) Any person aggrieved by an order of the Estate Officer
                under section 16 or under this section may, within a period
                                                                                c
                of thirty days of the date of the communication to him of
                such order, prefer an appeal to the Chief Administrator in
                such form and manner, as may be prescribed:

                      Provided that the Chief Administrator may entertain       D
     -t        the appeal after the expiry of the said period of thirty days,
               if he is satisfied that the appellant was prevented by
               sufficient cause from filing the appeal in time.

               (6) The Chief Administrator may, after hearing the appeal,       E
               confirm, vary or reverse the order appealed from and may
               pass such order as he deems fit.

               (7) The Chief Administrator may, either on his own motion
               or on an application received in this behalf, at any time
               within a period of six months from the date of the order,        F
               call for the record of any proceedings in which the Estate
               Officer has passed an order for the purpose of satisfying
               himself as to the legality or propriety of such order and
               may pass such order in relation thereto as he thinks fit:
                                                                                G
                     Provided that the Chief Administrator shall not pass
               an order under this section prejudicial to any person
- ~'.loi
               without giving him a reasonable opportunity of being heard.

                11. The learned counsel appearing for the appellant while
           relying upon Section 17 of the Act submitted that all the            H
    1054        SUPREME COURT REPORTS                [2009] 1 S.C.R.


A authorities including the High Court failed to appreciate that the
  cancellation of the allotment of the plot in favour of the appellant
  was in contravention of the statutory provision namely Section
  17 of the Act. By placing reliance on the said provision he
  submitted that the said Section imposes a responsibility and
B duty upon the Estate Officer to issue a show cause notice, if
  the allottee fails to deposit the requisite amount within the
  stipulated period mentioned, stating to show cause as to why
  a penalty should not be imposed upon the allottee. It was also
  submitted by him that there is not only violation of the statutory
c provision but also of the principles of natural justice as no
  opportunity was given to the appellant before passing the order
  of cancellation of the allotment and also before passing the
  order forfeiting the earnest money deposited by the appellant.

        12. The learned counsel appearing for the respondent,
D however, submitted before us that the provisions of Section 17
  of the Act could not be applied to the facts and circumstances
  of the present case as there was in fact no agreement/contract
  between the parties. He also submitted that as the appellant
  failed to accept the offer of the respondent-Authority by making
E payment of the amount as directed in the letter of allotment,
  there was no binding contract between the parties and,
  therefore, Section 17 of the Act has no application at all. It was
  further submitted that the forfeiture of the amount could have
  been and rightly done by the respondent-Authority by invoking
F the mandate of clause 4 of the letter of allotment.

       13. In the light of the aforesaid submissions and facts we
  are required to answer the issue which was raised before us.
  While it is true that an allotment letter was issued to the
G appellant by the respondent-Authority, but the said allotment
  was subject to the conditions as mentioned in the terms and
  conditions of the allotment letter, some of which have been
  extracted hereinabove. In terms thereof the appellant was              ,___ ~
  required to send a communication to the respondent-Authority
  by registered post that he is accepting the aforesaid allotment
H
              CHAMAN LAL SINGHAL v. HARYANA URBAN DEVE.                  1055
              AUTHORITY & ORS. [MUKUNDAKAM SHARMA, J.]
            made in his favour along with an amount of Rs. 1, 14,436/-           A
            within 30 days from the date of issue of allotment letter. That
            amount was supposedly 15% of the price payable for the plot
            of land allotted to him. The said amount together with the
            amount of Rs. 65,392/- which was paid by the appellant-
            applicant along with his application form would, therefore, have     B
            constituted 25% of the total tentative price of the land. If the
            appellant refused to accept the offer of allotment he was
            required to communicate his refusal by a registered letter within
            30 days from the date of issue of allotment letter failing which
            it was made clear that the aforesaid allotment would stand           c
            cancelled and that the earnest money deposited by him would
            be forfeited by the Authority and the appellant would have no
            claim for damages thereafter.
~
                  14. A bare perusal of the aforesaid relevant clauses of the
     -+      allotment letter would indicate that the balance amount of the      D
             cost price i.e. Rs. 5,39,484/- could be paid either in lump sum
            without interest within 60 days from the date of issue of
            allotment letter or in six annual installments which were
            recoverable in terms of the Schedule given in clause 6 of the
            aforesaid allotment letter. Clause 10 provides that in case the      E
            installment which is payable is not paid by the 1Oth of the month
            following the month in which it falls due or in the case the
            additional price is not paid within time, the Estate Officer shall
      ...   proceed to take action for imposition of penalty and resumption
            of plot in accordance with the provisions of the Section 17 of       F
            the Act. Clause 11 of the said terms and conditions also makes
            a reference of Section 17 of the Act.

                  15. In our considered opinion the appellant failed to comply
            with the aforesaid clauses of the letter of allotment and, therefore,
                                                                                  G
            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
                                                                                  H
    1056        SUPREME COURT REPORTS                [2009] 1 S.C.R.


A of non-payment of the amount as stipulated in clause 5 and,
  therefore, the earnest money deposited by him could be
  forfeited by the Authority. 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
B and would not apply. It is thus established that there was no
  agreemenUcontract between the appellant and the respondent-
  Authority and there being no such agreemenUcontract and
  because of non-compliance of requirement of clause 5 the
  issue with regard to violation of principles of natural justice also
c would not arise. Therefore, the contentions that provisions of
  Section 17 of the Act are violated and that there is non
  compliance of the principles of natural justice have no merit.

       16. It is, however, explicit from the records that there is an
  instruction of the respondent-Authority in terms of which delay
D in depositing 15% price up to 150 days could be condoned by            r-
  the Chief Administrator, HUDA and that the Chairman of HUDA
  is competent to condone the delay beyond 150 days if he is
  satisfied that the allottee failed to deposit 15% of the amount
  due to the reasons which were beyond his control. The revisional
E authority while disposing of the revision petition also granted
  such a liberty to the appellant to approach the appropriate
  authority for restoration of the plot and for condonation of the
  delay in depositing 15% price of the plot. The appellant availed
  the said opportunity provided by the revisional authority but his
F representation came to be dismissed by the Estate Officer on
  the ground that his appeal and the revision petition stood
  dismissed.

       17. In our considered opinion the aforesaid disposal of the
G representation by the Estate Officer was not proper, for the
  Estate Officer while disposing of the said representation did
  not at all deal with or mention as to whether or not the same          ~- -
  was a case for condonation of delay in depositing the 15%
  amount. Besides, in terms of the aforesaid departmental
  instruction it is the Chief Administrator who is required to
H
  CHAMAN LAL SINGHAL v. HARYANA URBAN DEVE.                1057
  AUTHORITY & ORS. [MUKUNDAKAM SHARMA, J.]

consider the said representation initially and if it is a case of A ·
delay ~more than 150 days the same is required to be
considered by the Chairman, HUDA. In the instant case, in
terms of the records available and shown to us the said·
representation was rejected by the Estate Officer and,
therefore, such disposal was not in accordance with law.          B

     18. Considering the aforesaid facts, we set aside the order
of the Division Bench of the Punjab and Haryana High Court
and remand the matter to the Chairman, HUDA for considering
the aforesaid representation of the appellant in accordance with   C
law and as expeditiously as possible. We may mention that we
have taken the decision to send the same to the Chairman,
HUDA because the records available with us disclose that the
delay to be condoned, if any, in the present case would be more
than 150 days, for which Chairman, HUDA is the competent
Aµthority. We also make it clear that no part of observations      D
m·ade herein would have any effect in the process of disposal
of the representation which shall be disposed of on its own
merit.

    19. In terms of the aforesaid observations this appeal         E
stands disposed of.

G.N.                                      Appeal disposed of.