Corporation Chandigarh & Ors Vs. M/S. Shantikunj Investment Pvt. Ltd  Insc
109 (28 February 2006)
out of SLP(Civil) No. 12794/2001) WITH
CIVIL APPEAL NOS.OF 2006 [Arising out of SLP(Civil) Nos. 12935/2001,
12987/2001, 12995/2002, 13449/2001, 14289/2003, 16503/2001, 18353/2002,
18911/2002, 18978/2002, 22515/2002, 23737/2002, 23738/2002, 23941/2002,
2948/2003, 3601/2003, 5748/2003, 9178/2003 & 13640-13641/2004] [with
SLP(Civil) No 22517/2002] A. K. MATHUR, J.
these petitions involve common question of law, therefore, these are taken up
together for disposal by the common judgment.
these petitions, there are two class of petitions, one filed by the private
parties/individuals against the Division Bench judgment of the Punjab & Haryana
High Court whereby the Division Bench has not given any relief following its
judgment passed in CWP No.13695 of 2001 dated 18.2,2002 [M/s. D.L.G.Builders
Private Limited vs. The Advisor to the Administrator, Chandigarh Administration
& Ors.]. The relevant portion of that judgment reads as under:
In our considered view, the allottee is bound to pay the premium and other
charges in accordance with the conditions of allotment. If the judgment of M/s.
Shanti Kunj Investments Pvt. Ltd.(supra) is read as laying down a proposition
that the allottee is not obliged to pay the balance of premium even after
raising construction of the building and occupying it on the pretext that
beautification of the site has not been done or land-scaping has not been
provided or payment of the tiles has not been done, extremely anomalous
consequences would follow inasmuch as, the allottee would construct building
and utilize the same by renting out or otherwise and hereby reap huge benefits,
but would not pay a single penny towards balance of premium and ground rent
while examining the complaint of the allottee about the lack of amenities, what
the Court is required to consider is whether the basic amenities, electricity,
approach road, sewerage and drainage have been provided in the area so as to
facilitate construction of the building within the specified time. If such
amenities have been provided, the Court will not interdict in the matter and
facilitate withholding of the balance of premium, ground rent etc. Rather, it
would insist that all the dues of public money are paid by the allottee in
accordance with the relevant rules/ regulations and conditions of
allotment." Another class of cases in which the Municipal Corporation of Chandigarh
and the Chandigarh Administration have filed the special leave petitions
against the order passed by the Division Bench of the Punjab & Haryana High
Court against the judgment dated 2.2.2002 passed in M/s. Shantikunj Investment
Pvt. Ltd. and batch. Relevant portion of the judgment reads as under :
They having failed to provide the basic amenities, the order of resumption and
forfeiture cannot be sustained.
impugned orders are, consequently set aside. The respondents are directed to
provide the amenities in accordance with law. The needful shall be done within
three months. No interest shall be chargeable from the petitioners if they make
the entire outstanding amount within three months from the date of the provision
of the amenities." It would not be proper to refer to all individual cases
because various orders have been passed by the High Court from time to time but
largely, the cases have been divided into two class of cases i.e. one governed
by M/s. Shantikunj Investment Pvt. Ltd. and the other governed by M/s. D.L.G.
Builders Private Limited. We are only deciding the question in principle and
leaving the rest to be decided by the High Court.
these petitions, the common question is whether grant of the amenities is a
condition precedent or not. All the plots in question were allotted by the Chandigarh
Administration as well as the Municipal Corporation of Chandigarh on certain terms and conditions of
the sale of residential and commercial sites & buildings by auction on
lease for 99 years and certain terms and conditions were laid down therein. But
the challenge in these various petitions filed before the Punjab & Haryana
High Court was that the basic amenities were not provided and, therefore, the Chandigarh
Administration and the Municipal Corporation of Chandigarh were not entitled to
charge interest @ 18% or 10%, as the case may be, on the installment as well as
non-payment of installment and non-payment of the ground rents. Likewise, they
cannot charge the penalty for delayed payment at the rate of 10% and at the
rate of 24% interest on the amount falling short of equated instalment or part
thereof and likewise on the ground rents.
as the Division Bench of Punjab & Haryana High Court in the case of Shanti Kunj
Investment (supra) held that providing of amenities is a condition precedent to
the payment of the interest and penalty. As against this, two Division Bench in
the case of G.S. Khurana vs. Chandigarh Administration by order dated 18.2.2002
and in the case of DLG Builders Pvt. Ltd. vs. The Advisor to the Chandigarh
Administration have taken a different view in the matter. In Shanti Kunj, the
Division Bench held that grant of amenities is a condition precedent whereas,
in the case of DLG Builders and G.S. Khurana, it took a contrary view to the
effect that it is not a condition precedent. This apparent contrary view has
given rise to all the litigation before this Court. In order to resolve the
inconsistent view of the two Division Bench, we shall deal with the issue
involved in the matter in a great detail hereinafter.
order to appreciate the controversy involved in the matter, we may refer to few
bare facts in the case of Municipal Corporation, Chandigarh & Ors. vs. M/s.
Shanti Kunj Investment Pvt. Ltd. in SLP(Civil) No. 12794/2001. Seven
petitioners in the aforesaid petition were the allottees of different
commercial sites. The grievance was that the Chandigarh Administration has
failed to provide basic amenities/facilities for use and occupation of the
sites sold to them. It is alleged that they are guilty of mal- administration.
They have arbitrarily charged the ground rent, interest and penal interest and
they are resorting to the resumption of the sites for non- payment thereof.
Therefore, all these petitioners filed joint petitions in the High Court for redressal
of their grievances.
On February 12, 1989 the Chandigarh Administration
auctioned a godown site No. 290, Sector 26, Chandigarh. The petitioner, along with two brothers gave a bid for a premium of Rs.
22,10,000/-. It was accepted and they deposited 25% of the bid money, viz. Rs.
5,52,500/-. The letter of allotment was issued on March 16, 1989. The site was given for 99 years on lease-hold basis. As
per the terms of allotment, the petitioner had to pay the amount along with
interest @ 7% in three equal yearly installments of Rs. 6,31,590/-. This
payment had to commence from the date of auction.
that, the allottee had also to pay an annual ground rent @ 55,250/- for the
first 33 years. The petitioner commenced the construction, but he found that
there were high voltage electric wires passing over the site. The sewerage
system had not been laid on the site. There were a large number of Jhuggies
adjacent to the place. The petitioner submitted representation to the Estate
Officer with a request to remove the unauthorized Jhuggies and to take
necessary steps for providing the amenities. But no amenities such as roads,
water supply, landscaping etc. were provided. It was alleged that since the
petitioner had paid the entire premium as provided under the Act and Rules,
therefore, no interest or ground rent can be charged till all the amenities, as
required under the Act and Rules, are provided. Hence, with this grievance, the
petitioner approached the High Court. The High Court examined all the
provisions and came to the conclusion that Chandigarh Administration cannot
charge interest @ 18%. Though, initially the interest was charged as 7%, but
ultimately by notification it was increased to 10%.
held by the Division Bench that there was no notification for charging the
interest @ 18% and it was conceded before us that so far as this part of the
order is concerned, the Administration does not challenge and the petitioner
will be charged @ 10%.
other aspect was also examined by the Division Bench and they gave an extended
meaning to the definition as provided under Section 2(b) 'amenities' of the
Capital of Punjab (Development and Regulation) Act, 1952 (hereinafter referred
to as the 'Act'). As against this, another Division Bench in the case of DLG
Builders (supra) took a contrary view and held that no extended meaning of
'amenities' as defined in Section 2(b) of the Act can be given that providing
of facilities is a condition precedent for charging of the interest.
order to appreciate the whole controversy involved in these cases, it will be
useful to refer to the necessary provisions of the Act and Rules bearing on the
subject. The allotment of the site in question was given under the Act and the
Rules framed thereunder known as 'Chandigarh Lease-Hold of Sites and Buildings
Rules, 1973. These provisions are applicable to both sets of cases i.e.
allotment of commercial sites as well as residential, made by the Chandigarh Administration
and Chandigarh Municipal Corporation.
2 of the Act deals with definition. Section 2(b) defines 'amenity' as under:
'amenity' includes roads, water-supply, street lighting, drainage, sewerage,
public building, horticulture, landscaping and any other public utility service
provided at Chandigarh." Section 2(f) defines 'erect
a building' which reads as under:
'erect a building' has the same meaning as 'erect or re-erect any building' in
the Punjab Municipal Act, 1911 (Punjab Act III of 1911)." Section 2(i)
defines 'prescribed' which means prescribed by rules made under this Act.
2(j) defines 'site' which means any land which is transferred by the Central
Government under Section 3.
2(k) defines 'transferee', which reads as under:
'transferee' means a person (including a firm or other body of individuals,
whether incorporated or not) to whom a site or building is transferred in any
manner whatsoever, under this Act and includes his successors and assigns."
Section 5 of the Act provides a bar to erection of buildings in contravention
of buildings rules.
6 lays down power to require proper maintenance of site or building which reads
Power to require proper maintenance of site or building. If it appears to the
Chief Administrator that the condition or use of any site or building is
prejudicially affecting the proper planning of, or the amenities in, any part
of Chandigarh or the interest of the general public there, he may serve on the
transferee or occupier of that site or building a notice requiring him to take
such steps and within such period as may be specified in the notice and
thereafter to maintain it in such a manner as may be specified therein."
Section 7 provides for Levy of fee or tax for amenities which reads as under:
Levy of fee or tax for amenities. (1) For the purposes of providing maintaining
or continuing any amenity at Chandigarh the [Central Government] may levy such
fees or taxes as it may consider necessary which shall be in addition to any
fee or tax for the time being leviable under any other law in respect of any
site or building on the transferee or occupier thereof." Section 8
provides for imposition of penalty and mode of recovery of arrears. Section 8-A
provides for resumption and forfeiture for breach of conditions of transfer
which reads as under:
forfeiture for breach of conditions of transfer.
transferee has failed to pay the consideration money or any instalment thereof
on account of the sale of any site or building or both, under section 3 or has
committed a breach of any other conditions of such sale, the Estate Officer
may, by notice in writing, call upon the transferee to show cause why an order
of resumption of the site or building, or both, as the case may be, and
forfeiture of 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 or
the site or building, or both should not be made.
considering the cause, if any, shown by the transferee in pursuance of a notice
under sub- section (1) and any evidence 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 the site or building or both, as the case may be, so sold and
directing the forfeiture as provided in sub- section (1), of the whole or any
part of the money paid in respect of such sale." The relevant rules which
have been framed in exercise of this Act under power conferred by Sections 3
and 22 by the Act of 1952 are known as 'Chandigarh Lease-Hold of Sites and
Buildings Rules, 1973' (hereinafter referred to as the 'Rules').
3(2) defines 'premium' which reads as under:
'Premium' means the price paid or promised for the transfer of a right to enjoy
immovable property under these rules" Some of the relevant Rules are
quoted as under:
Administration may demise sites and buildings at Chandigarh on lease for 99 years. Such leases may be given by
allotment or by auction in accordance with these rules.
For the purpose
of proper planning and development and for the implementation of any scheme
framed by the Chandigarh Administration, the Chief Administrator may reserve
sites/buildings for groups of individuals or for persons practicing any
profession or carrying on any occupation, trade or business, or for the
implementation of any scheme framed by the Chandigarh Administration.
period of lease. The lease shall commence from the date of allotment or
auction as the case may be, and shall be for a period of 99 years. After the
expiry of said period of 99 years the lease may be renewed for such further
period and on such terms and conditions as the Government may decide.
allotment, Procedure for.
In case of allotment of site of
building the intending lessee shall make an application to the Estate Officer
in Form 'A'.
No application under sub-rule (1)
shall be valid unless it is accompanied by 10 per cent of the premium as
earnest money in the prescribed mode of payment.
When 10 per cent of the premium has
been so tendered the Estate Officer shall, subject to such directions as may be
issued by the Chief Administration in this behalf, allot a site of the size
applied for or a building of which particulars are given in the application and
shall intimate, by registered post the number, sector, approximate area,
premium and the rent of the site or building allotted to the applicant.
The applicant shall, unless he
refuses to accept the allotment within 30 days of the date of the receipt of
the allotment order, deposit within that period and in the prescribed mode of
payment, further 15 per cent of the premium. The remaining 75 per cent of the
premium shall be paid as provided in rule 12.
If the applicant refuses to accept
the allotment within said period of 30 days, he will be entitled to the refund
of the amount paid by him. The refusal shall be communicated to the Estate
Officer by a registered letter (acknowledgement due). The refund shall be made
by means of a cheque payable at the State Bank of India at Chandigarh and the applicant shall bear the collection charges for the
If the applicant fails to
communicate his refusal to accept the allotment within 30 days and also fails
to deposit 15 per cent of the premium under sub-rule (4) the Estate Officer may
forfeit the whole or part of the earnest money.
auction, Procedure for. In case of auction at least 25 per cent of the bid
accepted by the Auctioning Officer shall be paid on the spot by the intending
lessee in the prescribed mode of payment in accordance with Rule 12.
that the Estate Officer may, in his absolute discretion, allow the successful
bidder to deposit in the prescribed mode or payment not less than 10 per cent
of the bid on the condition that the difference between the amount deposited
and 25 per cent of the bid shall be deposited in the same manner within 30 days
Delivery of Possession. Actual
possession of the site/building shall be delivered to the lessee on payment of
25 per cent of the premium in accordance with rule 8 or rule 9 as the case may
that no ground rent payable under rule 13 and interest on the instalments of
premium payable under sub-rule (2) of the Rule 12 shall be paid by the lessee
till the actual and physical possession of the site/building is delivered or
offered to be delivered to him, whichever is earlier.
In case of allotment, the premium
shall be such amount as may be determined by Chandigarh Administration.
In case of auction, the premium
shall be the bid accepted by the Estate Officer, as a result of bidding in open
Payment of premium and consequences
of non-payment or late payment.
In addition to payment of 25 per
cent premium under rule 8 or 9 as the case may be, the remaining 75 per cent
premium may be paid in lump sum within 30 days from the date of
allotment/auction without any interest.
If payment is not made in accordance
with sub- rule (1) of this rule, the balance of the 75 per cent premium shall
be paid in three annual equated instalments or more as the Chief Administrator
may in exceptional circumstances of a case fix within prior approval of the
Chief Commissioner along with interest at the rate of 10 per cent per annum or
at such higher rate of interest as may be fixed by the Chief Administrator by a
notification in the official Gazette before the commencement of the lease. The
first instalment shall become payable after one year from the date of
that in the case of allotment of site or building of Small Scale Industries as
defined by Chandigarh Administration from time to time in the Industrial area,
the balance of the 75 per cent of the premium may be paid in ten annual equated
instalments or such other number of annual equated instalments as may from time
to time be fixed by the Chief Administrator along with interest at the rate of
10 per cent per annum or such higher rate of interest as may be fixed by the
Chief Administrator by a notification before the commencement of the lease.
In case any instalment is not paid
by the lessee by the date on which it is payable, a notice may be served on the
lessee calling upon him to pay the instalment within a period of 3 months
together with a penalty which may extend upto 10 per cent of the amount due. If
the payment is not made within the said period, the Estate Officer may cancel
the lease and or forfeit the whole or any part of the money if paid in respect
thereof which, in no case, shall exceed 10 per cent of the total amount of the
consideration money, interest and other dues payable in respect of the lease:
that forfeiture will not be made in addition to penalty. Provided further that
no order of cancellation or forfeiture shall be made without giving the lessee
reasonable opportunity of being heard. If the order of cancellation is for non-
payment of penalty, the lessee may show cause why the penalty should not have
In case any
equated instalment or ground rent or part thereof is not paid by the lessee by
the date on which it became payable he shall be liable to pay in respect of that
instalment or ground rent or part thereof as the case may be, interest
calculated at the rate of twenty four per cent per annum from the date on which
the instalment or ground rent became payable till such date it is actually paid.
Each instalment shall be remitted to
the Estate Officer by the prescribed mode of payment. Every such remittance
shall be accompanied by a letter showing full particulars of the site or
building to which the payment pertains or a statement giving reference to the
number and date of the allotment referred to in rule 8. In the absence of these
particulars, the amount remitted shall be deemed to have been received only on
the date when the remitter supplies correct and complete information.
Rent and consequences of
non-payment. In addition to the premium, whether in respect of site or
building, the lessee shall pay rent as under:-
shall be 2-1/2 per cent of the premium for the first 33 years which may be
enhanced by the Chandigarh Administration to 3-3/4 per cent of the premium for
the next 33 years and to 5 per cent of the premium for the remaining period of
Rent shall be
payable annually on the due date without any demand from the Estate Officer.
that the Estate Officer may for good and sufficient reasons extend the time for
payment of rent upto six months on the whole on further payment of 6 per cent
per annum interest from the due date upto the date of actual payment.
If rent is not
paid by the due date, the lessee shall be liable to pay a penalty not exceeding
100 per cent of the amount due which may be imposed and recovered in the manner
laid down in section 8 of the Capital of Punjab (Development and Regulation)
Act, 1952, as amended by Act No. 17 of 1973.
Execution of lease deed.
After payment of 25 per cent premium
the lessee shall execute a lease deed in Form B, B-I, B-II, or C, as the case
may be, in such manner as may be directed by the Estate Officer within six
months of the date of allotment/auction or within such further period as the
Estate Officer may, for good and sufficient reasons, allow.
If the lessee fails to execute a
lease deed in accordance with sub-rule (1) of this rule, the State Officer may
cancel the lease and forfeit a sum up to 25 per cent of the premium.
that before taking action under sub-rule (2) of this rule, the Estate Officer
shall afford a reasonable opportunity to the lessee of being heard." In
this background of the Act and the Rules, the question before us is whether the
grant of amenities is a condition precedent or not.
counsel for the respondents contended that Rule 12(2) of the Rules should be
interpreted in the sense that when staggering instalment has been paid, then
the allottee is required to deposit the balance 75 per cent of the premium in
three annual equated instalments and the first instalment falling due after one
year from the date of allotment, it should be construed that the authorities
were supposed to provide all the necessary amenities in the meantime. In that
connection, learned counsel has submitted that it was legitimate expectation of
the allottee that within one year all the basic amenities shall be provided. It
was further submitted by learned counsel that Rule 12(2) of the Rules should be
interpreted to mean that there is implied covenant that the authorities will
provide all the amenities within one year. In this connection, learned counsel
referred to a decision of this Court in the case of Kumari Shrilekha Vidyarthi
& Ors. V. State of U.P. & Ors. reported in (1991) 1 SCC
212 and in the case of Jamshed Hormusji Wadia v. Board of Trustees, Port of
Mumbai & Anr. reported in (2004) 3 SCC 214. It was also contended that the
authorities should not charge compound interest. It was also contended that the
word "amenities" should be given extended meaning and
"amenities" as defined in Section 2(b) read with Rule 11, that the
amenities should be provided first otherwise the expression " enjoy"
appearing in Rule 3(2) will be redundant. In this connection, learned counsel
has referred to Section 67 of the Indian Contract Act, 1872 that promisee has
failed to perform its promise and further submitted that by virtue of Section
2(a) of the Specific Relief Act, 1963; when the property had been leased out it
presupposes that the amenities should be provided when the premium is paid. In
this connection, learned counsel for the respondents has invited our attention
to Sections 105 and 108 of the Transfer of Property Act, 1882 with specific
reference to rights and liabilities of lessor and lessee. It was contended that
both should be co-terminus. In this connection, the following decisions of this
Court were cited by learned counsel.
(1992) 4 SCC 363
[ Commissioner of Income Tax v. Sun Engineering Works (P) Ltd]
(2003) 7 SCC 197
[ Divisional Cotroller, KSRTC v. Mahadeva Shetty & Anr.]
(2003) 8 SCC 666
[ Megh Singh v. State of Punjab]
(2004) 6 SCC 186
[ Collector of Central Excise, Calcutta v. Alnoori
Tobacco Products & Anr.] It was also contended that the statute should be
interpreted in the manner which advanced the cause of the public. In this
connection, the following decisions of this Court were cited by learned counsel
for the respondents.
(1981) 4 SCC 173
[ K.P.Varghese v. Income Tax Officer, Ernakulam & Anr]
SCC 335 [ State of Haryana & Ors. V. Bhajan Lal & Ors.]
(1993) 1 SCC 78 [
C.B.Gautam v. Union of India & Ors.] As against
this learned counsel appearing for the appellant submitted that in fact the
expression, "amenities" cannot be given extended meaning and the
consistent case of the Administration was that necessary amenities had already
been provided and in some of the plots, the buildings had been constructed. In
some cases, the premises had been let out. Therefore, it was the case of the
appellant throughout before the High Court as well as before this Court that
providing amenities was never a condition precedent and whatever necessary
facilities/ amenities which were required in the matter had already been
provided. Learned counsel for the Chandigarh Administration and for the
Municipal Corporation submitted that the Corporation/ Administration are not
running away from their legal obligation to provide necessary facilities, which
have already been provided and whatever remains to be provided, shall be
provided. It was contended that tar road could not be constructed because on
most of the places construction was in progress and the construction materials
were lying on the road. Therefore, it was not possible to proceed with the
construction of tar road. However, the Administration is under obligation to
provide necessary facilities as per the provisions of the Act and the Rules. It
was also submitted that in the case of M/s.DLG Builders, the High Court has
already dismissed large number of writ petitions holding that providing of
amenities is not a condition precedent. In this connection, learned counsel for
the appellant-Administration has invited our attention to a decision of this
Court in the case of Sector-6, Bahadurgarh Plot Holders' Association (Regd.)
& Ors. V. State of Haryana & Anr. reported in (1996) 1 SCC
485 wherein a three Judge Bench of this Court in no uncertain terms has held
that providing of the amenities is not a condition precedent. Therefore, it was
contended by learned counsel for the appellant- Administration that it cannot
be constructed to be a condition precedent in the matter.
have bestowed our best of the attention to the provisions of the Act and the
Rules. On a plain reading of the definition "amenities" read with
Rule 11(2) and Rule 12, it cannot be construed to mean that the allottees could
take upon themselves not to pay the lease amount and take recourse to say that
since all the facilities were not provided, therefore, they are not under any
obligation to pay the instalment, interest and penalty, if any, as provided
under the Act and the Rules. It is not possible to accept a sweeping
proposition that if all the facilities or amenities are not provided, then the allottees/
lessees can take upon themselves not to pay the lease amount, interest and
penalty would be going too far. It has never been the condition precedent. It
is true that in order to fully enjoy the allotment, proper linkage is
necessary. But to say that this is a condition precedent, that is not the
correct approach in the matter. "Amenity" has been defined under
Section 2(b) of the Act which includes roads, water-supply, street lighting,
drainage, sewerage, public building, horticulture, landscaping and any other
public utility service provided at Chandigarh. That is a statutory obligation but it is not a condition precedent as
contended by learned counsel for the respondents. It is true the word,
"enjoy" appearing in the definition of the word "premium" in
Rule 3(2) of the Rules, means the price paid or promised for the transfer of a
right to enjoy immovable property under the Rules. It was very seriously
contended before us that the word, enjoy immovable property necessarily means
that the Administration should provide all the basic amenities as appearing
under Section 2(b) of the Act for enjoying that allotment. The expression
"premium" appearing in the present context does not mean that the allottees/
lessees cannot enjoy the immovable property without those amenities being
provided. The word "enjoy" here in the present context means that the
allottees have a right to use the immovable property which has been leased out
to them on payment of premium i.e. the price. This is only the price to enjoy
that allotted/leased property. Otherwise, walking over to that property will
mean to trespass.
is only a permissive possession. Since the allottees had paid the price or
promised to pay after the transfer of the right to enjoy the immovable
property, this cannot be construed that the property cannot be enjoyed without
providing the basic amenities. It is the common experience that for full
development of an area it takes years. It is not possible in every case that
the whole area is developed first and allotment is served on a platter.
of the plot was made, as is where is basis and the Administration promised that
the basic amenities will be provided in due course of time. It cannot be made a
condition precedent. This has never been a condition of the auction or of the
lease. As per the terms of allotment upon payment of the 25 per cent,
possession will be handed over and rest of the 75 per cent of the leased amount
to be paid in a staggered manner i.e. in three annual equated instalments along
with interest at the rate of 10 per cent. If someone wants to deposit the whole
of the 75 per cent of the amount he can do so. In that case, he will not be
required to pay any interest. But if a party wants to make payment within a
period of three years then he is under the obligation to pay 10 per cent
interest on the amount of instalment. This is the obligation on the part of the
allottee as per the condition of lease and he cannot get out of it by saying
that the basic amenities have not been provided for enjoying the allotted land,
therefore he is not entitled to pay the interest. This construction is not
borne out from the scheme of the Act and the Rules. It is true that the
Administration has an obligation but it is not a condition precedent in the
present case. "Amenity" has been interpreted in the Advanced Law
Lexicon (3rd Edition, 2005 at page 237) as follows:
IN REAL PROPERTY LAW, such circumstances, in regard to situation, view,
location, access to a water course, or the like, as enhance the pleasantness or
desirability of the property for purposes of residence, or contribute to the
pleasure and enjoyment of the occupants, rather than to their indispensable
needs. Extras or intangible items often associated with property. They may be
tangible. Often amenities in a condominium include swimming pools, landscaping,
and tennis court." Therefore, the term amenity in the context of real
estate is to mean the facilities as provided under Section 2(b) of the Act but
it can never be treated to mean that this is a condition precedent. It is for
the better use of the allotted piece of land but that does not mean that it
should be provided first as a condition precedent in the matter in the present
case. Learned counsel invited our attention to the expression , " enjoy"
as per the Webster's Dictionary, which means as follows:
to have, possess, and use with satisfaction; to have, hold, or occupy, as a
good or profitable thing, or as something desirable; as, we enjoy many
privileges." It is true that once allotment of the land has been made in favour
of the allottee, he can take possession of the property and use the same in
accordance with the Rules. That does not mean that all the facilities should be
provided first for so called enjoyment of the property this was not the
condition of auction. Party knew the location & condition prevailing
thereon. The interpretation given by the Division Bench of the High Court of
Punjab & Haryana and contended before us cannot be accepted as a settled
proposition of law. In the present case, as per the Act and the Rules it is
never a condition precedent of the auction or as per the lease that all the
facilities like, road, water-supply, street lighting, drainage, sewerage,
public building, horticulture, landscaping shall be a condition precedent.
Nowhere in the conditions of lease or in the auction it is provided that this
will be done first though it had been contended by the Administration that the
basic amenities have already been provided. Be that as it may, in the present
context it cannot be construed that it is a condition precedent. In this
connection, our attention was drawn to a decision of this Court in the case of
Sector-6, Bahadurgarh Plot Holders' Association (Regd.) & Ors. V. State of Haryana
& Ors reported in (1996) 1 SCC 485, which has an important bearing. In this
case, the Punjab Urban Estates (Sales of Sites) Rules, 1965, Punjab Urban
Estates (Development and Regulation)Act, 1964 and Haryana Urban Development
Authority ( Disposal of Land and Buildings) Regulations, 1978, came up for
consideration and in that context, a three Judge Bench of this Court
categorically held as follows:
To decide the aforesaid submission of Shri Bhandare we would really be required
to find out as to whether the offer was of developed plots or undeveloped
plots. As the offer had stated that modern amenities noted above " will be
provided", it cannot be held that till the amenities as mentioned have
become fully functional, the offer is incomplete. It is for this reason that
the fact that full development has not yet taken place, even if that be the
position as contended by Shri Bhandare, cannot be a ground to hold that
interest has not become payable. It is true that the applicants were given to
understand that the amenities noted above would become available (and within
reasonable time), the fact that the same did not become available to the
desired extent could not be a ground not to accept delivery of possession. From
the order of the High Court which we have quoted above, we find that the offer
of possession of the undeveloped plot was not accepted by the counsel of the
appellant. That order being of 17-10-1980, we
are of the view that interest did become payable from that date. The fact that
the plot has not yet been fully developed, as is the case of the appellant,
has, therefore, no significance insofar as charging of interest is concerned.
We are not in a position to accept the submission of Shri Bhandare that equity
would not demand charging of interest, even though the plots are yet to be
fully developed. When parties enter into contract, they are to abide by the
terms and conditions of the same, unless the same be inequitable. In the
present case, question of equity does not really arise inasmuch as the
condition relating to interest is founded on a statutory rule, vires of which
has not been challenged. The provision in a cognate rule cannot alter the
consequence which has to follow from the rule which holds the field. In the
present case, it being the Punjab Rules under which the allotment was made, we
are not in a position to agree with Shri Bhandare, despite his forceful
submissions, that the appellants may not be asked to pay interest, despite
their having been no offer of delivery of possession of fully developed
plots." Similar is the position here also though the Rules are not almost
identical but somewhat similar. In the present case, the effort of learned
counsel to interpret this provision to mean that the amenity was sine qua non
is far from correct. All the forceful efforts made by learned counsel does not
persuade us to take the view, in the present auction notice and the general
terms and conditions of the lease that providing of all the amenities as
appearing in Section 2(b) of the Act was a condition precedent. In this
connection, learned counsel referred to necessary provisions of Section 67 of
the Indian Contract Act, 1872. Section 67 of the Act provides that if any promisee
neglects or refuses to afford the promisor reasonable facilities for the
performance of his promise, the promisor is excused by such neglect or refusal
as to non-performance caused thereby. This provision has no application in the
present case. There was no specific promise on the part of the Administration
that providing of facilities shall be condition precedent.
Section 67 of the Indian Contract Act, 1872 has no application in the present
case. Learned counsel for the respondents referred to Section 2(a) of the Specific
Relief Act, 1963. Section 2(a) of the Specific Relief Act, 1963 says that
obligation includes every duty enforceable by law. As we have already noted
that this was not the obligation on the part of the Administration that they
will necessary provide the amenities before handing over of the possession of
the allotted plots. Therefore, there is no question of obligation being
enforceable by any mandamus as there is no such obligation as per the terms and
conditions of the lease or by the Act or the Rules.
our attention was drawn to Sections 105 and 108 of the Transfer of Property
Act, 1882. Section 105 of the Act defines lease and Section 108 lays down the
rights and liabilities of lessor and lessee. We asked learned counsel for the
parties to tell us which is the obligation of the lessor in the lease deed which
says that they will not charge interest on the instalements before providing
the amenities. There is neither any condition in the lease nor any obligation
under the auction. If the parties have given their bids and with their eyes
wide open they have to blame themselves. It cannot be enforced by any mandamus
as there is no obligation contained in the lease deed or in the auction notice.
It is true that according to the provisions of the Act, the Administration is
under the obligation to provide the amenities but there is no such condition
precedent for that matter. In this connection, our attention was also invited
that the provisions of the Act should be interpreted in a manner which advances
the cause of the public. There is no two opinion in the matter that the statute
should be interpreted in the manner which advance the cause of the public. But
when the issue comes where there is any statutory obligation then certainly
this Court will not hesitate to do so. But in the absence of such, to lay down
that this was a condition precedent and allow the allottees to waive their
obligation to pay the instalments with interest, that is not correct. In the
case of K.P.Varghese (supra), under the Income-tax Act, 1961, Their Lordships
have considered the matter and have held that Circular issued under Section 119
of the Act by the Central Board of Direct Taxes explaining the scope and object
of a provision, is binding because it gives contemporanea exposition and hence
the provision must be construed in accordance with the terms of the circulars.
Thus, the rule of construction by reference to contemporanea exposition is a
well-established rule of interpretation of statute by reference to the
exposition it has received from contemporary authority, though it must give way
where the language of the statute is plain and unambiguous. This is not the
case of State of Haryana & Ors. V. Bhajan Lal & Ors reported in 1992
Supp. (1) SCC 335, the question of invoking inherent power under Section 482 of
the Code of Criminal Procedure came up for consideration before this Court.
This case is also of no help for the respondents in any manner. In the case of C.B.Gautam
v. Union of India & Ors. Reported in (1993) 1 SCC 78, the provisions of
Section 269-UD (1) came up for interpretation before this Court and this Court
held that the provision does not give any unfettered discretion to appropriate
authority for pre-emptive purchase of the property which was agreed to be sold
by assessee on a consideration significantly lower than the fair market value
and they further considered one of the methods for interpretation of the
statute i.e. reading down provision if necessary. This also does not help the
respondent in any manner as there is no need of reading down the provisions in
any manner, as provisions are very clear.
next contended by learned counsel for the respondents that the decision
rendered in the case of Sector-6, Bahadurgarh Plot Holders' Association (Regd.)
(supra) should be read in the context in which it has been given & should
not be read as laying down a universal proposition. In this connection a
reference was made to the decision of this Court in the case of Commissioner of
Income Tax v. Sun Engineering Works (P) Lrd. Reported in (1992) 4 SCC 363. In
that case, this Court observed as follows :
It is neither desirable nor permissible to pick out a word or a sentence from
the judgment of the Court, divorced from the context of the question under
consideration and treat it to be the complete 'law' declared by the Supreme
Court." This is not the case here. We have considered the matter
independent of the facts of the case Sector-6 Bahadurgarh Plot Holders'
Association (Regd.) (Supra) and we have come to the conclusion that the
amenities cannot be made a condition precedent. In the case of Sector-6, Bahadurgarh
Plot Holders' Association (Regd.) (supra) similar argument was raised that the allottee
could refuse to take possession of the plot and deny payment of interest
because the plot had not been developed. Similar provision appears in the
present case i.e. the balance of the 75 pr cent premium may be paid in three
annual equated instalments along with interest without condition of providing
amenities in advance.
in the case of Divisional Controller, KSRTC v. Mahadeva Shetty & Anr
reported in (2003) 7 SCC 197, this Court observed as follows :
The decision ordinarily is a decision on the case before the court, while the
principle underlying the decision would be binding as a precedent in a case
which comes up for decision subsequently." Therefore the decision in the
case of Sector-6, Bahadurgarh Plot Holders' Association (Regd.) (supra) fully
applies in the case as the situation is analogous.
counsel further invited our attention to a decision of this Court in the case
of Megh Singh v. State of Punjab reported in (2003) 8 SCC 666. This was a case
under the Narcotic Drugs and Psychotropic Substances Act, 1985. In that
context, their Lordships held as follows:
Circumstantial flexibility, one additional or different fact may make a world
of difference between conclusions in two cases or between two accused in the
same case." It is true that in criminal matters even one single
significant detail may alter the decision. But that is not the case here.
reference was made to a decision of this Court in the case of Collector of
Central Excise, Calcutta v. Alnoori Tobacco Products & Anr reported in
(2004) 6 SCC 186. In this case, it was held that observations in judgments
should be read in the context in which it is stated and the same should not be
construed as statutes. There is no doubt about this proposition of law.
Therefore, this decision also does not advance the case of the respondents. In
the case of Kumari Shrilekha Vidyarthi & Ors. V. State of U.P. & Ors. Reported in (1991) 1 SCC 212, their
Lordships propounded the theory of legitimate expectation. Legitimate
expectation does not mean illegitimate flight of fancy. Legitimate expectation
means that what has been held out in the terms and conditions of the auction
and the lease deed.
expectation and the provisions of the Act cannot be read together to mean that
the terms of the auction and the lease deed should be ignored.
counsel invited our attention to a decision of this Court in the case of Jamshed
Hormusji Wadia v. Board of Trustees, Port of Mumbai & Anr reported in
(2004) 3 SCC 214. This was a case where the question was whether the Board of
Trustees, Port of Mumbai is a State within the meaning of Article 12 of the
Constitution or not. Their Lordships have observed that the instrumentality of
the State cannot act in an arbitrary or capricious manner. All the State action
must be for public good for which it exists. This does not mean that public can
take up on itself to ignore to abide by condition of auction & refuse to
pay State its dues.
this background, we are of the opinion that the interpretation of the Act and
the Rules given by the Division Bench of the Punjab & Haryana High Court in
the impugned judgment (M/s Shanti Kunj Investment Pvt. Ltd.) cannot be
sustained. It has been contended by the counsel for the Chandigarh
Administration that all necessary facilities have been provided and some of the
allottees have already constructed their buildings and have rented out the same
and some allottees have applied for construction of Hotels also. It is not
possible for us to examine all these facts individually.
of the sectors have been fully developed and some sectors have been less
developed. Therefore, it is not possible to work out that in one case it has
been fully developed and in the other case it is still not developed.
in some cases full payment has been made, in some cases two instalments have
been made. Therefore, all these disputed facts have to be adequately dealt with
by the High Court. We make it clear that though it was not a condition
precedent but there is obligation on the part of the Administration to provide
necessary facilities for full enjoyment of the same by the allottees. We
therefore, remit the matter to the High Court for a very limited purpose to see
that in cases where facilities like kutcha road, drainage, drinking water,
sewerage, street lighting have not been provided, then in that case, the High
Court may grant the allottees some proportionate relief. Therefore, we direct
that all these cases be remitted to the High Court and the High Court may
consider that in case where Kutcha road, drainage, sewerage, drinking water
facilities have been provided, no relief shall be granted but in case, any of
the facilities had not been provided, then the High Court may examine the same
and consider grant of proportionate relief in the matter of payment of penalty
under Rule 12(3) and delay in payment of equated instalment or ground rent or
part thereof under Rule ( 12(3A) only.
repeat again that in case the above facilities had not been granted then in
that case consider grant of proportionate relief and if the facilities have
been provided then it will not be open on the part of the allottees to deny
payment of interest and penalty. So far as payment of instalment is concerned,
this is a part of the contract and therefore, the allottees are under
obligation to pay the same. However, so far as the question of payment of penalty
& penal interest is concerned, that shall depend on facts of each case to
be examined by the High Court. The High Court shall examine each individual
case and consider grant of the proportionate relief.
No. 22517/2002. No allotment was made and no payment was deposited except the
initial payment of 10%. Therefore, this petition is misconceived and the same
is accordingly dismissed.
S.L.P.(c) No.23738 of 2002, the lease has been cancelled.
whether such cancellation was legal or otherwise, the High Court will examine
the same in the light of the above observations. In S.L.P.(c) No.23941 of 2002,
in fact the possession of the plot had been given on 17.1.2000. The allottee
had a grievance that there was a mango tree on his plot which was to be
removed. The High Court may decide as to what extent the relief should be
S.L.P.(c) No.14289 of 2003, S.L.P.(c) No.2948 of 2003 and S.L.P.(c)
Nos.13640-13641 of 2004, the grievance of the writ petitioners was that
sewerage line was passing through the allottees' building.
possession could not be handed over and the same was handed over only after
removal of that sewerage line from the allotted plot. This aspect may also be
examined by the High Court.
Court also called for a report by appointing a Commission. The report of the
Commissioner has been placed on record. The High Court while deciding the
question of facilities provided may look into the aforesaid report.
result of our above discussion, the order dated 2.2.2001 passed by the Division
Bench of the High Court of Punjab & Haryana in C.W.P. No.959 of 1999 [ M/s.Shanti
Kunj Investment (Pvt) Ltd. vs. U.T.Administration Chandigarh & Ors.] which
has been followed in C.W.P. 960 & 5874 of 1999 and C.W.P. No. 5009 of 1998
is set aside and orders dated 10.5.2001, 13.11.2000 & 13.9.2001 passed in
C.W.P.No.5561 of 2000, W.P.No. 19356 of 1998 & C.W.P. No. 10233 of 2000 are
also set aside. Consequently, the appeals arising out of S.L.P.(c) Nos. 12794,
12987, 12935& 13449 of 2001; S.L.P.(c) No. 12995 of 2002,S.L.P.(c) No.16503
of 2001 and S.L.P.(c) No.18911 of 2002 are allowed and the cases are remitted
back to the High Court for deciding each case on its own merit. Rest of the
cases excepting S.L.P.(c) No.22517 of 2002 i.e. appeals arising out of
S.L.P.(c) Nos. 22515, 18978, 18353, 23941, 23737 & 23738 of 2002;
Nos. 14289, 2948, 3601, 9178& 5748 of 2003 and S.L.P.(c) Nos.13640-13641 of
2004 are accordingly disposed of and are also remitted back to the High Court
for being decided in the light of the observations made above. No costs.