N.O.I.D.A. Vs. Army
Welfare Housing Organisation & Ors. [2010] INSC 732 (10 September 2010)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.3625 of 2006 New Okhla
Industrial Development Authority (NOIDA) .....APPELLANT Versus Army Welfare
Housing Organization WITH
CIVIL APPEAL
NOs.2938/2005, 2939/2005, 2941/2005, 2942/2005, 2943/2005, 2945/2005,
2944/2005, 3607/2006, 3605/2006, 3621/2006, 3618/2006, 3608/2006, 3604/2006,
3606/2006 and 3603/2006
HARJIT SINGH BEDI, J.
1.
These
appeals are directed against the Judgment of the Division Bench of the
Allahabad High Court dated 14th October, 2004 whereby the writ petition filed
by the respondents herein has been allowed and the letters issued by New Okhla
Industrial Development Authority (hereinafter called the `NOIDA') dated 13th
November, 2002 and 7th January, 2003 have been quashed. Aggrieved by the
decision 2 Civil Appeal No.3625/2006 of the Division Bench, the respondents in
the High Court are the appellants before us.
2.
The
facts leading to these appeals are as under:-
3.
The
writ petitioners-respondents, Societies registered under the Societies
Registration Act, 1860 namely The Indian Railway Welfare Organization (IRWO),
the Air Force Naval Housing Board (AFNHB), the Army Welfare Housing Organization
(AWHO) and several others filed writ petition in the Allahabad High Court
impugning the letters/notices dated 13th November, 2002 and 7th January, 2003
and other similar notices by which NOIDA had directed the individual members of
the Housing Societies to execute tripartite deeds, the other two parties being
the Housing Societies, as the lessee, and NOIDA, as the lessor, for the sale of
the super-structure which had been built on the land allotted to these
Societies and for further restraining the State Government, Noida etc. from
charging any stamp duty on the execution of the deeds. The petitioners also
pleaded that the land had been allotted to the Societies by NOIDA and that the
super-structure thereon had been built solely on the contributions made by the
individual 3 Civil Appeal No.3625/2006 members as the said Societies did not
have any corpus of their own. It was further pointed out that the buildings had
been constructed in a phased manner over a period of time and, the Societies
being the lessees of the land in question were not the owners of the
super-structure so as to bind the individual members to the covenants that had
been subscribed to by the Societies with NOIDA the lessor. It was further
highlighted that NOIDA had not contributed anything towards the cost of
construction of the super-structures and that the only role performed by it was
the sanctioning of the building plans and the directions to execute tripartite
deeds for the sale of the super-structure of the residential units or sub-leases
for the land, was a superfluous exercise, which was not backed by any statutory
authority, or contractual obligation the more so that it did not fall in the
definition of sale under Section 54 of the Transfer of Property Act, 1882. The
basic argument was that the petitioners could not be compelled to buy something
which was already their own.
4.
The
stand of the writ petitioners was controverted by NOIDA and several pleas were
raised.
Civil Appeal
No.3625/2006
5.
It
was submitted that a writ petition directed against the issuance of a notice
was not maintainable and that as the dispute in effect was as to the terms of a
contract, it could not be adjudicated upon by the High Court in its writ
jurisdiction under Article 226 of the Constitution.
6.
It
was submitted on merits that the petitioners had consented to the execution of
tripartite deeds and that the lease deeds entered into between the NOIDA and
the Societies clearly stipulated that a sub-lease would be executed between the
Societies and the members/allottees and that the sub- lessees herein above
referred had to abide by the terms and conditions of the lease deed. It was
pleaded that the provisions of the Uttar Pradesh Industrial Development Act,
1976 (hereinafter called the `1976 Act') were binding on the sub-lessees and
that the costs of the stamp duty and registration charges were to be borne by
them and that Section 7 and 14 when read together provided for the resumption
of a site in case of a breach of a condition of the lease or sub-lease.
Civil Appeal
No.3625/2006
7.
The
State of U.P. supporting NOIDA, pleaded that the members of the Societies had
sub-leased the land from the Societies on the terms and conditions settled
between them and as the land had been taken on lease by the Societies from
NOIDA and the consideration had been paid by the Societies in advance the
transactions were liable to stamp duty under Sub-Section (6) of Section 2 of
the Stamp Act 1899 and that a tripartite deed envisaged between the parties was
chargeable to stamp duty on the proportionate cost of the land as well as the
cost of the super-structure built thereon.
8.
The
High Court examined the various aspects raised before it and concluded that a
distinction had to be made between contracts entered into between two private
individuals and a contract where one of the parties was the State, or an
instrumentality of the State, and that in the first mentioned case no writ
would lie in relation to such a contract and the parties would have to be
relegated to the civil court. It further held that in the latter case, it would
be open to the High Court to entertain the writ petition and to examine as to
whether any constitutional provision has been violated more particularly 6
Civil Appeal No.3625/2006 where a claim was made that the State or an
instrumentality of the State respondent was acting in a discriminatory and
arbitrary manner.
9.
In
this background, the Division Bench observed that admittedly the land have been
taken on lease from NOIDA by the Societies on which the individual members had
built their houses on the basis of contributions made by the individual members
as the Societies themselves did not have any corpus of funds. It further
pointed out that the flats/apartments had been constructed by the Societies on
a self-financing arrangement under which the construction of the super-
structure was paid for in installments by the allottee members and in this view
of the matter, there was no sale of the super- structure in favour of the
members and the demand raised thereby on the basis of the two notices was
arbitrary and unreasonable and violated Article 14 of the Constitution. The
Division Bench also supported its findings by referring to several judgments of
this court.
10.
The
Court then went into the merits of the controversy and observed that the lease
deeds executed by NOIDA with the 7 Civil Appeal No.3625/2006 various Housing
Societies which were the writ petitioners, the basic covenants were the same
and related primarily to paragraphs 2 to 4 and 12 to 14 and the Societies-writ-
petitioners represented the interests of the members collectively and that the
members were bound by the terms of the bye-laws of the Societies which postulated
that the land allotted to the Societies would be handed over to the Societies
for the construction of flats/apartments and on the basis of a lease deed
executed between NOIDA and the Societies only.
11.
The
Court collated the various paragraphs of the lease deed and held that they
referred only to the transfer of the land and there was no reference whatsoever
that the building constructed thereon at a later stage would also be treated to
have been demised by the lessor. The Court also observed that the provisions of
Section 108 (h) of the Transfer of Property Act that the building also belonged
to the owner of the land was not applicable to India in the light of the
various pronouncement of this court and various High Courts as well.
12.
The
court, in conclusion, observed that in the light of the aforesaid facts, NOIDA
could not compel the Societies or the 8 Civil Appeal No.3625/2006 individual
members of the Societies to execute tripartite sub- leases in terms of the
notices and observed as under:
"The allottee
members, as owners of the flats/apartments, built from the contributions made
by these persons cannot be compelled to purchase it from the society. It
amounts to compelling a full owner of the flat/apartment to purchase the
property already owned by him, from the society of which he is a member and to
which it had contributed for purchase of and for construction of building. Such
a transfer will be fictitious and involuntary, and thus a void transaction
under the Indian Contract Act. It will be neither a sale under section 54, nor
a lease under Section 105 for the Transfer of Property Act 1882"
13.
The
Writ Petitions were accordingly allowed in the following terms:
"All the writ
petitions are consequently allowed.
The impugned notices
published and issued by NOIDA and its officers, directing the petitioners to
enter into the tripartite deeds are set aside. The NOIDA and other respondents
are restrained from compelling the petitioners to execute the tripartite sale
deed of super structure of flat and sub lease deed of land, and from requiring
payment of any stamp duty and registration fees on such documents. No order as
to costs."
14.
Mr.
K.K.Venugopal, the learned senior counsel for the appellants, has made several
submissions before us. He has first pointed out that the observation of the
Division Bench in 9 Civil Appeal No.3625/2006 the High Court that there was no
provision for the execution of a tripartite deed under the lease deed executed
between NOIDA and the respondent AWHO was contrary to the record as several
clauses of the lease deed read cumulatively clearly visualized the execution of
tripartite deed featuring NOIDA, AWHO and the individual sub-lessees. He also
pleaded that Section 17(1)(d) of the Registration Act, 1908 when read with
Section 105 of Transfer of Property Act, 1882 clearly visualized the
registration of a lease or sub-lease and Section 49 of the Registration Act dealt
with the consequences of non- registration. He further pointed out that a lease
executed included a sub-lease as per Section 107 of Transfer of Property Act
and such a document required compulsory registration.
He has also submitted
that in the absence of a registered document, any document purporting to be a
lease would be a mere waste paper, as held by this Court in Lachhman Dass vs.
Ram Lal 1989 (3) SCC 99. It has also been pleaded that Entry 35 ) of Schedule I
B of the Stamp Act as applicable to the State of Uttar Pradesh postulated that
stamp duty was payable not only on the land but on the super-structure as 10
Civil Appeal No.3625/2006 well and the findings of the High Court to the
contrary were, therefore, not maintainable. It has also been submitted that Section
2(g) of the 1976 Act postulated the need for a tripartite deed between NOIDA,
AWHO and the sub-lessees and that NOIDA's authority to issue the impugned
instructions flowed from Section 6 thereof. It has also been pointed out that
the AWHO had, during the course of this litigation and even before had taken
conflicting stand as in the affidavit of Col. Upal of October 2007, it had been
specifically deposed that a sub- lease was contemplated in the lease deed
executed between NOIDA and AWHO and that in a letter from the AWHO to Brig.
Gur Dyal dated 19th
of June 1990 it had been specified that a tripartite document was to be
executed and a specimen of the document was also enclosed along with the
letter. It has been highlighted that thereafter AWHO had taken a volte face and
in the affidavit filed by Col. Sabharwal, a contrary stand had been taken that
a tripartite deed was not visualized in the lease deed executed between NOIDA
and AWHO. It has, accordingly, been pointed out that on account of this confusion
and other reasons a large number of individual 11 Civil Appeal No.3625/2006
members, that is sub-lessees, had in fact executed tripartite deeds, as
required by the instructions. In the rejoinder filed by NOIDA, the fact that
the respondents had been taking shifting stands has, once again, been
highlighted and as further evidence of this fact, attention has again been
drawn by Mr. K.K.Venugopal to the affidavit of Col. Sabharwal of January 2008
wherein the affidavit of Col. Upal has been completely disowned.
15.
Mr.
Anand for the respondents has, however, controverted the stand taken by the
appellants. It has been pointed out that the land had been allotted to AWHO and
other Societies and the Societies formed by members of the Defence Services had
been exempted from the payment of stamp duty on the premium for the lease
whereas in the case of Societies set up of civilians, stamp duty had been made
leviable and had, in fact, been paid, and there was no justification now, after
15 years from the allocation of the land, that the AWHO and sub-lessees had
been called upon to execute a tripartite document and also to pay stamp duty
and registration charges. He has also pointed out that the lease 12 Civil
Appeal No.3625/2006 deed between the NOIDA and AWHO pertained only to the land
and had nothing to do with the super-structure and as the residential building
on the land had been built by the lessees themselves, they could not be called
upon to execute tripartite deeds along with NOIDA and AWHO. The learned counsel
has also referred to several clauses of the lease deed executed between the
NOIDA and AWHO in support of this plea. He has further submitted that a society
registered under the Societies Registration Act was not a body corporate or a
juristic person and its membership could not be said to be distinct from the
society and as such there is no question of transfer of property from the AWHO
to its members. In this connection Mr. Anand has relied upon Illachi Devi &
Ors. vs.
Jain Society,
Protection of Orphans India & Ors. 2003 (8) SCC 413.
16.
We
have considered the arguments advanced by the learned counsel for the parties.
At the outset, it must be pointed out that some of the arguments that have been
raised by the learned counsel were not urged, or if urged, were not dealt with
by the High Court. The High Court has, in fact, 13 Civil Appeal No.3625/2006
proceeded primarily on the interpretation to be put on the lease deed executed
between NOIDA and AWHO and has been influenced also by the fact that as the
structures on the land allotted to AWHO had been built by the sub-lessees, and
as the structures belonged to them the question of any further transfer by way
of sub-lease as per a tripartite deed was not envisaged. It is this background,
we have examined the arguments raised by the learned counsel.
17.
NOIDA
has been set up under the provisions of the 1976 Act. Section 2(a) thereof
defines amenities which include roads, water supply, street lighting, power
supply, sewerage and sub-clauses (d), (e) and (f) deal with the provision of
basic infrastructure for industrial, commercial and residential purposes
whereas Section 6 (2) deals with the obligation of NOIDA towards the land
development of the area. Section 7 authorizes NOIDA to transfer the land by way
of sale, lease or otherwise whether by auction or allotment on such terms and
conditions, as it may think fit to impose. Sections 13 and 14 provide for the
imposition of a penalty and mode of recovery of arrears and resumption of the
property for breach of 14 Civil Appeal No.3625/2006 conditions of transfer and
Section 17 gives overriding effect to the 1976 Act vis-`-vis other statutes. It
is the case of the appellants that the impugned notices were envisaged under
the lease deed between NOIDA and AWHO as well as the aforesaid provisions of
the 1976 Act and for the AWHO and the sub-lessees to contend that they could
not be called upon to execute tripartite deeds was, therefore, not acceptable.
18.
We
have perused the lease deed executed between NOIDA and AWHO. We reproduce
herein below some of the relevant clauses. The lease deed which is for a period
of 99 years itself indicates that the lessees had agreed to the allotment of
the land on lease for the purpose of constructing residential buildings for its
members. Clause 3(b), 3(c), 5, 7, 8, 10, 11 and 12 are reproduced below:-
"3B. That the lessee shall in no case assign relinquish (except in favour
of the lessor), let transfer or part with possession of the demised premises
except by way of sub-lease as provided in this lease to the Cooperative Society
of the members or directly to the individual registered member of the lessee
whose list will be provided to the lessor within three months of such transfer.
Any subsequent transfer will be made by the members with prior concurrence of
the AWHO/Co-operative Society and NOIDA and 15 Civil Appeal No.3625/2006 will
be subject to condition of payment of transfer charges as levied from time to
time but subject to a maximum of 25% of the unearned increase in the value of
land.
3C. This lease deed
will form part of sublease executed between AWHO and Cooperative Society or to
individual members.
All conditions
contained herein binding on the sub-lessees also.
5. The lessee shall
construct the building (group housing pockets) on the demise premises in
accordance with the plan elevation and design and in a position to be approved
by the lessor or any officer authorized by the lessor in that behalf in writing
and in accordance with the building regulations or direction existing or to
exist in future.
The lessee shall be
required to commence construction of flats/houses within one year from the date
of possession letter and complete the same within a period of 7 years
extendable to 10 years from the date of possession failing to which the lease
shall be revoked and 10% of amount deposited shall be forfeited and possession
of the plot and structures thereon unless removed by the lessor within time
specified by the lessee may be taken over by the lessor and lessee will not be
entitled to any compensation.
7. That the lessee
will obey and submit to all direction issued or regulations made by the lessor
now existing or hereinafter to exist so far as the same are incidental to the
possession of immovable property or so far as they effect the health or
convenience of the other inhabitants or the place.
8. That the lessee
will at his own cost erect on the demised premises in accordance with the
plans, deviation and design to be approved by the lessor or any other
authorized 16 Civil Appeal No.3625/2006 by the lessor in that behalf in
writing and in a substantial and workman like manner, a building only with all
necessary, sewers, drains and other appurtenances according to the directions
issued or regulations made in respect of buildings, drains, latrines and
connection with sewer.
10. That the lessee
will not make, or permit to make, any alteration in or additions to the said
buildings or other erections for the time being on the demise premises erect,
or permit to be erected any new building in the demised premises without the
previous permission in writing of the lessor and except in accordance with the
terms of such permission and the land, if any, approved by the lessor or any
officer authorized by the lessor or in that behalf and in case of any deviation
from such terms or plan, will immediately upon receipt of notice from the
lessor or such requiring him to do, correct such deviation for the space of one
calendar month after the receipt of such deviation to be corrected at the
expenses of the lessee which expenses the lessee hereby agrees to reimburse by
paying to the lessor such amount as the lessor (whose decision shall be final)
shall fix in that behalf.
11. That the lessee
shall use the demised premises only for the purpose of constructing a building
for housing its members and for no other purpose.
12. That the lessee
shall not assign, transfer, relinquish (except in favour of lessor) sublet or
otherwise part with possession of the demised premises or any part thereof or
the house constructed thereon or any part thereof, except first to Co-operative
Society of its members and then to or individual members, without the previous
permission in writing of the lessor.
17 Civil Appeal
No.3625/2006 Provided that the lessee may be permitted by the lessor to create
a mortgage for purposes of securing loan from State Central Government/Life
Insurance Corporation, Scheduled Bank/Housing Board/HUDCO and similar statutory
bodies and in that case the right to mortgages shall be as may be provided in
the deed of mortgage, accrue to such institution subject to NOIDA retaining
first charges for recovery of ground rent and other dues, taxes and
charges."
19. A perusal of the aforesaid
clauses would reveal the very starkly patent fact that most of the covenants
place obligations on the lessees as well as on the sub-lessees and if the
covenants are in any manner violated, the lease would be liable for forfeiture
under Section 14 of the 1976 Act. We may, in particular, highlight sub-clause
3B and 3C which says that the conditions of the lease deed will be binding on
the sub- lessees as well. Clause 5 provides that the lessees shall construct
the building on the allotted land in accordance with the plan, elevation and
design to be approved by the lessor and further that the lessee shall be
required to commence construction within the period of one year from the date
of possession. Clause 8 further clarifies that the lessees would erect the
building on the basis of the approved design and 18 Civil Appeal No.3625/2006
Clause 11 once again reiterates that the demised premises shall be used by the
lessee only for construction of buildings, offices and houses for no other
purposes whereas Clause 12 stipulates that the lessee AWHO will not transfer
etc. or part with the possession of the demised premises or the house
constructed thereon except first to the Cooperative society or its members and
then to individual members without the previous permission of the lesser in
writing. Clause 15 stipulates that on the breach of the conditions of the
transfer by the lessee or any other person claiming through or under him, it
will be open for the lessor i.e. NOIDA to re-enter the demised premises to
determine the lease. It would be clear from a reading of these provisions that
the sub-lessees have been fastened with several obligations vis-`-vis the
demised premises and further more, even more significantly, the obligation lies
on the lessees to construct the buildings or flats, as the case may be, at
their own cost and thereafter transfer the same to individual members i.e. the
sub-lessees.
It is extremely
significant that paragraph 69 of the Master Brochure of July 1987 issued by the
AWHO, as amended up to 19 Civil Appeal No.3625/2006 May 2007 reads as under:-
"69. Organization may at its discretion on a written request from the
Allottee, give possession on such conditions as it may stipulate before
instruments of transfer are executed and registered."
20. We are,
therefore, of the opinion that in this background the impugned notices
postulating the execution of tripartite deeds flows not only from the clauses
of the lease deed executed between the NOIDA and AWHO but also from the
supervisory authority which is placed on NOIDA by virtue of the provisions of
Section 7 of the 1976 Act. The observation of the High Court that the
structures built on funds provided by the sub-lessees is to our mind of no
consequence. Even assuming that such was the position, this was an arrangement
inter-se AWHO and its members and would not detract from the obligations placed
on AWHO and the sub- lessees to execute tripartite deeds. We, however, see from
the above facts that the question as to whether the sub-lessees had themselves
constructed the structures is itself in doubt.
In the affidavit of
Col. Upal it has been specifically mentioned that the funds of the organization
were raised by AWHO 20 Civil Appeal No.3625/2006 mainly from the
advances/deposits of the allottees, as also from the borrowings from financial
institutions and that the respondent organization i.e. AWHO therefore
constructed the dwelling units with the funds contributed by the allottees and
also funds raised on loan from the financial institutions. In paragraph 9 of
the aforesaid affidavit, it is deposed by Col.Upal as under:
"Upon completion
of the housing project the respondent organization then forms a "user
committee" of the allottees who subsequently form a `registered
maintenance society' for the maintenance and upkeep of the common areas and
amenities of the housing project. The registered maintenance society of the
allottees so formed is then given the common area maintenance funds as
collected by the respondent organization during the payment of installments
towards the cost of the development of their dwelling units. Thereafter, as and
when the allottee(s) desire to have a registered title deed of the dwelling
unit executed in their favour, the respondent organization registers the same as
per the terms and conditions of the land allotting agency and office of the
sub-registrar upon payment of the required stamp duty and registration charges
payable by the allottee."
Civil Appeal
No.3625/2006
21. As already
indicated above, the above meaningful admission was sought to be explained away
in the subsequent affidavit of Col. Sabharwal wherein (in paragraph 5) he
contradicted the affidavit of Col. Upal by stating that all the expenses
involved in the procurement of land on lease hold basis, payment of lease
costs, lease rent, construction cost of dwelling units, the common amenities
and salary required etc.
were met from the
contributions made by the allottees of the housing scheme and some loans to
procure land from the Government of India or the General Branch of the Army
Group Insurance Scheme had been taken and that the interest on the loans and
the principal amounts had been refunded from the contribution made by the
allottees. It has, however, been admitted that in the year 1989-90 several
allottees had approached AWHO for execution of sub-leases of their dwelling
units, and the respondent AWHO under the impression that stand of NOIDA was
bona fide and legally correct had under mistaken advice directed the execution
of the tripartite deeds.
In other words, it
has been admitted that a large number of allottees had executed the tripartite
deeds, as required by the 22 Civil Appeal No.3625/2006 impugned notices. Col.
Sabharwal has, accordingly, in a manner, sought to distance AWHO from the letter
issued on behalf of AWHO to Brig. Gur Dyal. It is significant that despite
requests to AWHO, no record was produced to substantiate the plea, that the
super-structures had been constructed by the allottees at their cost. We are,
therefore, of the opinion that the Division Bench to have held that the
structures had been built exclusively by the allottees and therefore they were
deemed to be the owners of the structures, is on uncertain ground. In this
background, we are not called upon to examine the constitution and charter of
AWHO or the purpose of its being set up, though a great deal of time and energy
had been expended on this aspect.
22. It is also
evident from the reply of Col. Upal (Paragraph 10) that AWHO had constructed
the dwelling units in NOIDA and the draft bipartite sub-leases for the transfer
of dwelling units to the allottees had been submitted by AWHO to NOIDA on 4th
April 1989 and pursuant thereto the registration of tripartite documents had
commenced. In the affidavit it has further been deposed that no stamp duty had
been charged on 23 Civil Appeal No.3625/2006 the lease deed in favour of AWHO
and stamp duty was proposed to be charged for the first time on the execution
of the tripartite deeds and that though the allottees were entitled to the
ownership of land and structure, but the same would be conveyed to the
individual allottees only on the execution of the registered and stamped
documents, as per the provisions of the Registration Act, the Stamp Act and the
Transfer of Property Act.
23. It has also been
submitted by Mr. Venugopal and Mr. Sunil Gupta, the learned senior counsel for
the appellants, that the payment of stamp duty and the registration of the
tripartite deeds were essential as per the Stamp Act and the Registration Act.
The learned counsel have referred us to Section 2(16) and Entry 35 of the Stamp
Act. Section 2(16) reads as under:
Sec.2(16).
"Lease" means a lease of immovable property, and includes also - (a)
a patta;
(b) a Kabuliyat or
other undertaking in writing, not being a counterpart of a lease, to cultivate,
occupy, or pay or deliver rent for, immovable property;
(c) any instrument by
which tolls of any description are let;
24 Civil Appeal
No.3625/2006 (d) any writing on an application for a lease intended to signify
that the application is granted."
Item 35 of Schedule I
calls for the payment of stamp duty on leases and sub-leases. This fact was not
seriously disputed by the learned Counsel for the respondents. In the
background of this Statutory provision, it is not open for the respondents to
say that stamp duty was not payable.
24. Mr. Anand, has
however, submitted that a society registered under the Societies Registration
Act was not a body corporate or a juristic person and the society i.e. AWHO and
its members were one entity and there was, accordingly, no question of
transferring by way of sub-lease any property from the AWHO to the sub-lessees.
This argument to our mind is without force in the light of what has been held
above and that in the case of Brig. Gur Dyal the stand taken was that the
sub-lessees should execute a document directly with NOIDA bypassing AWHO, as
that was deemed to be the right procedure. Mr. Anand's reliance on Illachi Devi
case is misplaced for the simple reason as no ownership has been transferred to
the cooperative society i.e. AWHO by NOIDA. In 25 Civil Appeal No.3625/2006
this background it must be held that word `vest' in Section 5 of the Societies
Registration Act does not envisage a lease deed and the matter would, if at
all, be covered by Section 5 A, an amendment pertaining to the State of Uttar
Pradesh alone which provides:
"Sec.5A.
Restriction on transfer of property. - (1) Notwithstanding anything contained
in any law, contract or other instrument to the contrary, it shall not be
lawful for the governing body of a society registered under this Act or any of
its members to transfer, without the previous approval of the court, any
immovable property belonging to any such society.
(2) Every transfer
made in contravention of sub-section (1) shall be void."
25. We are, however,
not inclined to examine the implication of Section 5A for the simple reason
that many of those who are likely to be affected by its interpretation are not
parties to the Writ Petition.
26. Mr. Gupta has,
further, submitted that a Society was a legal entity in law distinct from its
members as the property vested in living members, Trust or Board and as such
the Society could hold property, although it may not be a juristic person. For
this argument, Mr. Gupta has placed reliance on 26 Civil Appeal No.3625/2006
Board of Trustees, Ayurvedic and Unani Tibia College, Delhi vs. State of Delhi
AIR 1962 SC 458. In this case, the Constitution Bench was dealing with Sections
5 and 6 of the Societies Registration Act and the question as to whether the
Tibia College Board set up under the Tibia College Act, 1952 was a Corporation
in Law. The Bench held that the Board was, indeed, not a Corporation but had
the characteristics of a quasi-Corporation and though a registered society
could not hold property but a quasi-Corporation would be deemed to be separate
legal entity and entitled to hold property. We are, therefore, of the opinion
that AWHO though registered under the Societies Registration Act has certain
characteristics which would enable it to hold property and therefore transfer
of the land cum super-structure would be by way of a sub-lease from the lessor
i.e. NOIDA to the lessee which is the AWHO to the sub-lessees who are the
individual allottees, by way of a stamped and registered document.
27. It has also been
submitted by the learned counsel for the appellant that registration of a
tripartite deed was mandatory as per the provisions of Section 17(1)(d) of the Registration
Act 27 Civil Appeal No.3625/2006 read with Section 107 of the Transfer of
Property Act. It has been pointed out that the Law Commission had highlighted
the importance of the registration of documents and in this connection
reference has been made to the 13th Report of the Law Commission. Paragraph 14
thereof reads as under:
"From this brief
survey of the provisions of the Act it is clear that the object of the Registration
Act is to preserve an authentic record of the terms of documents so that if a
document be lost or destroyed or misplaced, a certified copy from the register
can be obtained.
Registration also
facilitates the proof of execution of a document as its execution is admitted
by the executant, before the Sub- Registrar. Yet another useful purpose that
registration serves is to enable any person intending to enter into any
transaction relating to immovable property to obtain complete information
relating to the title to such property and for the purpose to look into the
register and obtain certified copies of the documents."
28. Our attention has
also been drawn to Section 49 of the Registration Act which talks of the
effects of non-registration of documents required to be registered and provides
inter-alia that non-registration of such a document would not affect any
immovable property comprised therein, or be received as 28 Civil Appeal
No.3625/2006 evidence of any transaction affecting such property. In Lachhman
Dass's case (supra) it has been held that a non- registered sale deed would be
a paper transaction having no effect in transferring or creating any rights in
the sub-lessees.
It has been observed
thus:
"The real
purpose of registration is to secure that every person dealing with the
property, where such document requires registration, may rely with confidence
upon statements contained in the register as a full and complete account of all
transactions by which title may be affected. Section 17 of the said Act being a
disabling section, must be construed strictly. Therefore, unless a document is
clearly brought within the provisions of the section, its non-registration
would be no bar to its being admitted in evidence.
and again the
Section, however, enjoins registration in respect of any document, which
purports not which intends to create a right in immovable property or declare a
right in immovable property. It is not a question of declaration of an existing
right."
29. It has,
accordingly, been submitted that it was in the interest of the sub-lessees that
they execute tripartite deeds duly stamped and registered so that they could
safeguard the title to their properties and deal with them accordingly as they
Civil Appeal No.3625/2006 were holding legal documents. It has been highlighted
by the learned counsel that the AWHO had on several occasions realized the
importance of the execution of the tripartite deeds and had advised the Societies
accordingly.
30. Concededly a
lease deed or sub-lease of immovable property would be compulsorily
registerable under Section 17 (1)(d) of the Registration Act and Section 107 of
the Transfer of Property Act. In the absence of such a document, Section 49
visualizes no legal effect or an effective transfer by way of a lease or
sub-lease.
31. We have,
therefore, no hesitation in setting aside the judgment of the Division Bench of
the High Court and to allow the appeals and dismiss the writ petitions. We do
so, however, with no order as to costs.
32. Before we part
with the judgment, we must make a further direction. During the course of
arguments, it was pointed out that notices had been issued by NOIDA calling for
the execution of tripartite deeds failing which penalties etc.
would be imposable on
the individual sub-lessees, more particularly as a large number of allottees
had already signed 30 Civil Appeal No.3625/2006 such deeds. In the light of
the fact that this has been a long drawn litigation and involves primarily
serving or retired personnel of the armed forces, we direct that if the
sub-lessees execute tripartite deeds as per the requirement of NOIDA within a
period of six months from today, no penalty or extra charge would be made
payable by such allottees. We clarify that if the tripartite deeds are not
executed within the period of six months, the law or instructions would take
their own course and NOIDA would be entitled to levy such charges as it was
entitled to thereunder.
..............................J.
(DALVEER BHANDARI)
..............................J.
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