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CASE NO.: Appeal (civil)  3044 of 2008

PETITIONER: Jagmohan Singh

RESPONDENT: State of Punjab & Ors

DATE OF JUDGMENT: 29/04/2008

BENCH: S.B. Sinha & Lokeshwar Singh Panta

JUDGMENT: J U D G M E N T REPORTABLE

CIVIL APPEAL NO.    3044       OF 2008 (Arising out of SLP (C) No.8590 of 2007)

S.B. Sinha, J.

1.      Leave granted. 2.      First respondent invited applications for allotment of 3950 free hold  residential plots in Sector 76-80, SAS Nagar, Mohali.  Appellant applied for  allotment of a plot measuring 500 sq. yards on 13.1.2001.  He deposited the  requisite earnest money therefor being a sum of Rs.1,87,500/-.  He was  successful at the draw of lots for allotment of a plot which was held on  30.3.2001.  A letter of intent was issued on the same day.  Before the said  draw of lots, a brochure was issued which, inter alia, contained the following  clauses : "2.REFUND OF EARNEST MONEY In case applicants asks for refund before draw of  lots for issuance of letter of intent, refund shall be  allowed after deducting the processing fee of  Rs.500/-. Unsuccessful applicants shall be refunded their  earnest money after 90 days from date of draw.   However, interest @ 10% per annum shall be  allowed for the period beyond 181st day in case  refund is made after 180 days. In case, the successful applicant refuses to accept  the offer of allotment and his refusal is received  after the draw of lots and within 90 days of issue  of letter of intent 10% of earnest money deposited  shall be forfeited and balance will be refunded to  him without interest.  In case refusal is received  after 90 days, the entire money deposited shall be  forfeited."

       The letter of intent contained the following terms and conditions :

"You are requested to deposit 15% amount i.e.  Rs.2,81,250.00 of the above price within 60 days  of the date of issue of this letter.  This period of 60  days can be further extended by 30 days by the  undersigned on your request.  This extension will  be subject to payment of interest @ 2% per month  (calculated on daily basis for the period of delay

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beyond 60 days) on the amount due.  All payments  should be made in the shape of crossed bank draft  in favour of "Estate Officer, PUDA, SAS Nagar",  payable at SAS Nagar/Chandigarh. 5.      You are also requested to submit an affidavit  (specimen provided along with the application  form) attested by a Magistrate that you or your  spouse or any minor child do not own any  residential plot/house/flat (except ancestral  property) in Urban Estate, SAS Nagar (Mohali). 6.      In case your application is as a member of  any reserved category, you will also have to  submit the proof (as per brochure) of belonging to  that catgegory. 7.      Further, if you, including your family  members, have got more than one plot at SAS  Nagar (Mohali) through this scheme, you will be  allowed to retain only one plot and you will have  to surrender extra plot(s) within 60 days of issue of  Letters of Intent.  In case this intimation is  received by undersigned within the specified  period, the earnest money of plot surrendered shall  be refunded after deducting processing fee of  Rs.500/-.  If you fail to inform the undersigned in  this regard and the fact of multiple allotments is  detected at a later stage, all Letters of  Intent/Allocation Letters/Allotment Letters will be  deemed to have been cancelled and the amount  deposited with PUDA shall be forfeited. 8.      In case you are not interested in accepting  this offer of allotment, you may send your refusal  to undersigned within 90 days of issue of this  letter.  In this case, 10% of Earnest Money  deposited shall be forfeited and the balance shall  be refunded to you without interest. 9.      In case you neither deposit money within 90  days as per Point No.4 above nor give your refusal  to accept this offer within 9 days, the entire earnest  money deposited by you shall be forfeited."

3.      The matter relating to allotment of plots admittedly is governed by  Punjab Regional and Town Planning and Development Authority Act, 1995  (The Act).   Section 2(m) of the Act defines "transferee" to mean ’a person  including a firm or other body of individuals, whether incorporated or not, to  whom a site or building is sold, leased or transferred under this Act and  includes his successors and assignees’. 4.      Sub-sections (3) and (4) of Section 45 of the Act reads thus : "(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 transfer, 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 transfer 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

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sub-section (3), and any evidence that he may  produce in respect 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  direct the forfeiture as provided in sub-section (3)  of the whole or any part of the money paid in  respect of such transfer."

5.      Appellant allegedly sought for permission to mortgage the plot as per  prescribed Form No.VI along with letter of approval dated 19.10.2001.  No  permission, however, was granted. Again, an application for grant of  permission to mortgage the said plot was filed on 5.2.2002. He was not  communicated with the result of the said application.  Admittedly, the  appellant did not deposit the balance amount.  The Estate Officer, by reason  of a letter dated 13.1.2002, cancelled the letter of intent and forfeited the  earnest money.   A revision application was filed thereagainst before the Secretary to  the Government of Punjab which, by reason of an order dated 5.3.2004 was  dismissed, simply stating : "I have heard both the parties, and also perused the  record of the case placed before me during the  course of hearing.  I am in agreement with the Sr.  Law Officer, PUDA, Mohali that the petitioner has  failed to avail all the opportunities offered by  PUDA to deposit the initial 15% price of the said  plot even within the extended period of 60 days.   He should have arranged sufficient amount in  advance to deposit after draw of lots and all his  pleas for failing to do so seems to be lame excuses.   After going through all the facts, I find no merit in  this case and, accordingly, the revision petition is  rejected."

6.      An application for review was filed but according to the appellant, no  order has been passed thereupon.  He thereafter filed a writ petition before  the High Court which by reason of a judgment dated 11.12.2006 has been  dismissed.  He filed a review petition, inter alia, on the premise that other  instances had come to his knowledge where the first respondent had granted  opportunity to a large number of people to deposit the balance 15% of the  amount even after the period of 60 days elapsed, by a long margin.   However, the High Court opined that the review application was not  maintainable as the said documents had come to knowledge of the appellant  only after the decision in the writ petition. 7.      Appellant is, thus, before us. 8.      Mr. Mahajan, learned counsel appearing on behalf of the appellant,  would contend that in view of the fact that by reason of forfeiture of the  earnest money deposited by him, the appellant suffered civil consequences,   the respondents were bound to comply with the principles of natural justice  particularly when in almost similar situation not only possession had been  granted upon condoning delay but also permission had been granted to  mortgage the properties to others who were similarly situated.  Our attention  in this behalf has been drawn to the case of Shri Gulshan Kumar, wherein  the Revisional Authority directed : "In view of the above circumstances, I deem it fair,  just and reasonable to direct the Estate Officer,  PUDA to accept the 15% instalment along with  compound interest @ 15% per annum, along with  the surcharge/penal interest in accordance with the  terms and conditions of the prospectus and policy  decisions of PUDA but also along with a penalty  equivalent to 10% of the total tentative allotment

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plot pirce, which would otherwise have been liable  to forfeiture, in accordance with the stipulation of  Section 45(3) of the Punjab Regional & Town  Planning and Development Act, 1995.         With the above stipulation the revision  petition is partly accepted and the impugned orders  are set aside subject, however, to the following  conditions, that the 15% amount along with  interest, penal interest, surcharge, etc. and in  addition a penalty equivalent to 10% of the total  allotment price shall be deposited within 30 days  of the communication of this order."

9.      It was furthermore contended that no distinction can be made between  a person in whose favour a letter of intent has been issued and the one in  whose favour a transfer has been made.  Our attention has further been  drawn to another order of the High Court Baldev Singh Jhajj v. The  Secretary to the Government of Punjab & Ors. [Civil Writ Petition No.15845  of 2006 decided on 29.9.2006], wherein it was opined : "Without going into the detailed facts pleaded in  the present petition, we take note of a contention  raised by Shri A.R. Takkar, learned counsel for the  petitioner.  It has been argued by the learned  counsel that in identical circumstances of same  allottees, as is the controversy in the case of the  petitioner, the requisite relief had been granted to  the aforesaid allottees by the authorities but the  claim of the petitioner was rejected by the  appellate authority as well as the Revisional  Authority.  As a matter of fact when the factum of  the grant of relief to the similarly situated persons  came to the notice of the petitioner, he filed a  review application before the revisional authority  bringing to its notice all such orders in which relief  had been granted to the allottees.  However, the  review petition filed by the petitioner has been  rejected by the revisional authority vide order  dated May 23, 2006 (Annexure P-17) by holding  that there was no power of review.         After taking into consideration the plea  raised by the petitioner, but without commenting  on the merits of the claim raised on his behalf, we  find that if persons similarly situated had already  been granted relief which has been claimed by the  petitioner also, then it is only appropriate that the  claim of the petitioner be reconsidered by the  revisional authority."

10.     The learned counsel urged that PUDA itself was not in a position to  hand over possession as a larger number of litigations were pending and in  that view of the matter, it shall not suffer any loss, as particularly in view of  the fact that pursuant to this Court’s order dated 10.10.2007 the requisite  amount has not only been deposited, the appellant ready and willing to  deposit the balance amount in time. 11.     Ms. Sucharita, learned counsel appearing on behalf of the respondent,  on the other hand, would contend : (i)     In view of the clear stipulation contained in the brochure as also the  letter of intent, the principles of natural justice were not required to be  complied with.   (ii)    Appellant being not a transferee within the meaning of Section 2(m)  of the Act, the provisions of sub-sections (3) and (4) of Section 45  would not apply.   (iii)   The orders of the Revisional Authority relied upon by the appellant

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stand completely on different footings as in those cases, no letter of  intent had been delivered.   12.     Indisputably, the appellant has not deposited the 15% of the amount of  tentative price of the plot within 60 days from the issuance of letter of intent.   It may further be true that in terms of clause (9) of the letter of intent, failure  on his part would entail forfeiture of the earnest money. 13.     Sub-sections (3) and (4) of Section 45 of the Act again may not be  stricto sensu applicable as the principles of natural justice, as envisaged  therein, were required to be complied with only in the cases of transferees. 14.     It, however, appears that in terms of the office order dated 13.11.2002,  the earnest money was directed to be forfeited only on the premise that he  did not comply with the terms of the letters of intent.  The Estate Officer did  not take into consideration the fact that the appellant had applied for transfer.   He had also sought for extension of time to deposit the amount.  Extension  was granted upto 8.6.2001.  By a letter dated 9.10. 2001, however, it appears  that further extension was granted upto 31.10.2001.  No order, however, has  been passed on his application for transfer.  Admittedly, no show cause  notice was issued.  The order passed by the Estate Officer was a revisable  one.  The Revisional Authority had rejected the revision application, inter  alia, upon taking into consideration a purported order of ban issued by  PUDA to receive any payment with regard to the allotment of plots in  Sectors 76-80 from the defaulters by an order dated 3.1.2003.  The said  order dated 3.1.2003 has not been brought on record by the respondents.   It now transpires that almost in a similar situation which may not be  absolutely identical, the Revisional Authority itself in exercise of its  statutory power has granted extension.   Forfeiture of earnest money, therefore, had not been adhered to in a  large number of cases.  In Teri Oat Estates (P) Ltd. v. U.T., Chandigarh &  Ors. [(2004) 2 SCC 130], this Court has taken notice of the fact that different  orders were being passed by the High Court from time to time.  The orders  passed by the High Court have been upheld therein upon applying the  doctrine of proportionality as contradistinguished from Wednesbury  Unreasonableness principle.  [(See also Jintendra Kumar & Ors. v. State of  Haryana & Anr. [(2008) 2 SCC 161].   15.     In Teri Oat (supra), it was opined that the power of forfeiture should  be taken recourse to as a last resort and the action of the statutory authority  is required to be judged on the touchstone of Article 14 of the Constitution  of India.  The High Court in its judgment failed to consider this aspect of the  matter. It is furthermore evident that order 47 Rule 1 of the Code of Civil  Procedure does not preclude the High Court or a court to take into  consideration any subsequent event.  If imparting of justice in a given  situation is the goal of the judiciary, the court may take into consideration  (of course on rare occasions) the subsequent events.   This Court, in Board of Control for Cricket in India & Anr. v. Netaji  Cricket Club & Ors. [(2005) 4 SCC 741], held as under : "89. Order 47 Rule 1 of the Code provides for  filing an application for review. Such an  application for review would be maintainable not  only upon discovery of a new and important piece  of evidence or when there exists an error apparent  on the face of the record but also if the same is  necessitated on account of some mistake or for any  other sufficient reason. 90. Thus, a mistake on the part of the court which  would include a mistake in the nature of the  undertaking may also call for a review of the order.  An application for review would also be  maintainable if there exists sufficient reason  therefor. What would constitute sufficient reason  would depend on the facts and circumstances of  the case. The words "sufficient reason" in Order  47 Rule 1 of the Code are wide enough to include  a misconception of fact or law by a court or even  an advocate. An application for review may be

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necessitated by way of invoking the doctrine  "actus curiae neminem gravabit"."

It was furthermore observed : "93. It is also not correct to contend that the Court  while exercising its review jurisdiction in any  situation whatsoever cannot take into consideration  a subsequent event. In a case of this nature when the  Court accepts its own mistake in understanding the  nature and purport of the undertaking given by the  learned Senior Counsel appearing on behalf of the  Board and its correlation with as to what transpired  in the AGM of the Board held on 29-9-2004, the  subsequent event may be taken into consideration by  the Court for the purpose of rectifying its own  mistake.

16.     It has been stated before us that in terms of this Court’s order dated  10.10.2007, the entire amount has been deposited.  Appellant has, as noticed  hereinbefore, undertaken to deposit the amount as and when directed to do  so by the authorities.  It may be true that his name has not appeared in the  draw of lots but it has not been denied or disputed that if his revision  application was allowed, a plot of land may be assigned in his favour. 17.     We do not intend to enter into the merit of the matter as we are of the  opinion that in the peculiar facts and circumstances of this case, the interest  shall be subserved if the impugned judgments are set aside and the matter is  remitted to the Revisional Authority for consideration of the appellant’s case  afresh in the light of various orders passed by the said Authority as also the  High Courts. 18.     The Appeal is disposed of accordingly.  In the facts and circumstances  of the case, there shall be no order as to costs.