REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.803 OF 2009 (arising out of SLP (C) No. 20651 of 2007)  

Chaman Lal Singhal  …Appellant

Versus

Haryana Urban Development  Authority & Ors.  …Respondents  

JUDGMENT

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 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 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 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.   

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 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  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 :

Clause 4. In case you refuse to accept this allotment you  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.

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  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 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 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 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 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 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.

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 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  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 equivalent

to 10% was forfeited by the respondent-Authority.  The contents of

the aforesaid letter 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  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.”

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 Administrator on the ground

that  the  cancellation  order  passed  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 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 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 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 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 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  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 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:

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 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.

(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 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 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 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.

(4) After considering the cause, if any, shown by the 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 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 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 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,  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, 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:

Provided that the Chief Administrator shall not pass an order under this section prejudicial to any person 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 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 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 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,  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 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  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  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 made in his favour along with an amount of

Rs. 1,14,436/-  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

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  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  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 installment which is payable is not paid

by the 10th 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  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,  his

allotment stood cancelled and the earnest money deposited by him

could be forfeited by the Authority.  The order of cancellation came

to be passed by the competent authority after 500 days.  Be that as

it  may,  the  aforesaid  allotment  of  plot  of  land  in  favour  of  the

appellant  came to  be cancelled  because  of  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 and would not apply.  It is thus established that

there was no agreement/contract  between the appellant  and the

respondent-Authority and there being no such agreement/contract

and  because  of  non-compliance  of  requirement  of  clause  5  the

issue  with regard to  violation of  principles  of  natural  justice  also

would  not  arise.   Therefore,  the  contentions  that  provisions  of

Section 17 of the Act are violated and that there is 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 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 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 appellant  availed the said opportunity provided by the

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.   

17.In  our  considered  opinion  the  aforesaid  disposal  of  the

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 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 and shown to us the said

representation  was rejected by the Estate Officer  and,  therefore,

such disposal was not in accordance with law.

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  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 Authority.  We also make it clear

that no part of observations made 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 stands disposed

of.

       ………………………..J.

                          [S.B. Sinha]

  ...………………………J.             [Dr. Mukundakam Sharma]

New Delhi, February  9, 2009