IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6055 OF 2009 (Arising out of S.L.P. (C) No.16305 of 2006)

Municipal Corporation, Chandigarh & Ors.      ...Appellant(s)

Versus

M/s. Chandigarh Corporate Guides Ltd.        ...Respondent(s)

O  R  D  E  R

Leave granted.

The  highest  bid  of  Rs.2,26,00,000/-  given  by  

respondent - M/s. Chandigarh Corporate Guides Ltd. in the  

open  auction  conducted  by  the  Municipal  Corporation,  

Chandigarh (appellant No.1 herein) in respect of SCO No.164-

165 situated in Sector 9C, Chandigarh was accepted by the  

competent authority. In terms of the condition of auction,  

the respondent was required to deposit 25% of the premium  

within  30  days  of  the  auction  and  the  balance  75%  in  3  

equated  yearly  installments  of  Rs.71,99,192/-  along  with  

interest @ 18%. Later on, the annual equated installment was  

revised as Rs.69,06,322/-.  The respondent paid 25% of the  

premium  i.e.  Rs.57,25,000/-  on  29.4.1998.   Thereafter,  

allotment letter was issued in favour of the respondent by  

Assistant  Commissioner,  Municipal  Corporation,  Chandigarh  

(appellant No.2 herein).  As the respondent failed to pay the

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balance amount together with interest on due dates, appellant  

No.2 after issuing notice to the respondent and hearing the  

parties passed order dated 12.7.2001 whereby, he cancelled  

the  lease  of  the  site  and  forfeited  10%  of  the  premium,  

interest and ground rent.  On an appeal preferred by the  

respondent,  Joint  Secretary,  Finance,  Union  Territory  

Chandigarh set aside the order of cancellation of lease and  

restored the site to the respondent subject to the condition  

that it shall pay the outstanding dues within 4 months.  This  

was subject to the rider that if the respondent fails to  

stick  to  the  time  schedule,  the  order  of  the  Assistant  

Commissioner  shall  become  operational.   Similar  order  was  

passed  by  Advisor  to  the  Administrator,  Union  Territory  

Chandigarh who disposed of the revision of the respondent by  

giving it 3 months time for payment of the outstanding dues.  

On  an  application  made  by  the  respondent,  the  Advisor  

extended the time specified in the revisional order.  Despite  

this,  the  respondent  did  not  deposit  the  balance  amount.  

Instead,  it  raised  dispute  regarding  correctness  of  the  

statement of accounts furnished by the Municipal Corporation.  

Finally, the respondent filed a writ petition for setting  

aside the order of cancellation of lease passed by appellant  

No.2  herein  as  also  the  appellate  and  revisional  orders  

passed  by  Joint  Secretary,  Finance  and  Advisor  to  the  

Administrator, Union Territory Chandigarh respectively.

The  High  Court  did  not  go  into  the  legality  or  

otherwise of the order by which the respondent’s lease was  

cancelled.  The High Court also did not consider whether the  

conditional  orders  of  restoration  of  lease  passed  by  the  

appellate and revisional authorities were legally correct and

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disposed of the writ petition by a short order.  The High  

Court  took  cognizance  of  the  statement  made  by  counsel  

appearing for the writ petitioner that all outstanding dues  

have  been  paid  and  directed  the  appellant  herein  to  

communicate in writing the outstanding dues which are still  

payable by the writ petitioner and directed the latter to  

clear  the  outstanding  dues  within  3  weeks  of  such  

communication.  The High Court concluded that if the amount  

is deposited, the order of resumption shall be treated as non  

est.   

We have heard learned counsel for the parties.  In  

our  view,  the  procedure  adopted  by  the  High  Court  for  

disposing of the writ petition is wholly unknown to law. When  

the order for cancellation of lease was challenged, the High  

Court was duty bound to decide whether the order passed by  

appellant  No.2  i.e.  Assistant  Commissioner,  Municipal  

Corporation, Chandigarh was legally correct.  The High Court  

should also have examined and adjudicated upon the legality  

of the conditions imposed by the appellate and revisional  

authorities for restoration of the site to the respondent.  

Since, the impugned order has been passed without examining  

the vital issues raised by the parties, the same cannot be  

sustained.

Accordingly, the appeal is allowed, impugned order is  

set aside and the matter is remitted to the High Court for  

deciding  the  writ  petition  afresh  in  accordance  with  law  

after giving opportunity of hearing to the parties.  

Needless to say that we should not be misunderstood  

to  have  expressed  any  opinion  one  way  or  the other in

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relation to the merits of the writ petition filed by the  

respondent.

......................J.               [B.N. AGRAWAL]

......................J.               [G.S. SINGHVI]

New Delhi, September 04, 2009.