Gurmukh Singh Puri vs State of Punjab and Another

Daya Krishan Mahajan, J.—This petition under Article 226 of the Constitution is directed against the following order of the Under-Secretary, Industries, dated 27th November, 1963--

A copy is forwarded to the Collector, Ambala, with the above order of resumption, the vendees'' possession of the Metallic Work Centre, Yamunanagar, has become unauthorised. Action should, therefore, be taken to resume possession u/s 4 of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act, 1959.

The facts giving rise to this petition are that by sale-deed dated 30th June, 1956 (annexure A.1), the premises in dispute were sold to the Petitioner for a sum of Rs. 2,99,937. The Petitioner paid a sum of Rs. 45,700-14-6 in cash towards the purchase price as advance. He submitted claims mentioned in the margin of the sale-deed amounting to Rs. 1,06,987-13-0 with interest at 5� per cent to be calculated from the date of delivery of possession and actual adjustment of compensation in the work-centre''s account. He agreed to pay the balance of the price amounting to Rs. 1,57,248-8-0 with interest at the rate of 5� per cent in ten years in half-yearly equated instalments. The first instalment was to be to the tune of Rs. 9,195-1-0 of principal and interest combined. The second and subsequent instalments were to be of Rs. 9,295-1-0. The instalments were to be paid every six months till whole of the amount of Rs. 1,47,248-8-0 and interest was paid. In lieu of the aforesaid consideration the vendor as the sole and absolute owner transferred to the purchaser the property specified in schedule I to the sale-deed with all rights and privileges and appurtenances and was to hold the same as absolute owner subject to certain specified conditions. It is unnecessary to reproduce all the conditions. For our purposes it will be sufficient to set down conditions Nos. 4, 6 and 7, which are as follows--

And further this deed also witnesses that for the consideration aforesaid and as security for the payment to the vendor of the whole money due to him from the purchaser on account of the sale price and interest and any part thereof according to the terms and conditions thereof the purchaser hereby transfers to the vendor all the property described in schedules I and II hereto of which he is the absolute owner and which he assures to be free from all encumbrances to the intent that the same shall remain and be charged by way of simple mortgage in manner following namely that for the purpose of recovering the sum of Rs. 1,47,248-8-0 (one lac forty-seven thousand, two hundred forty-eight and annas eight only) and interest due thereon at the rate of 5J per cent or any such other sum as may be due to the vendor from the purchaser by virtue of this deed the vendor may enforce against the property described in schedules I and II or any part thereof any of the remedies of the holder of a simple mortgage.

(5) * * * * * *

(6) In the event of non-payment of the balance of the price in accordance with the covenants specified heretofore and of non-observance or non-performance by the purchaser of any of the provisions hereof, the vendor shall, without prejudice to other rights and remedies and notwithstanding the waiver of any previous right for re-entry, have the right to enter into and upon the said premises or any part thereof and to resume, repossess, retain and enjoy the same and the machinery entered in schedule II as to his former state and the purchaser shall not be entitled to the refund of the purchase money or any part thereof or to any compensation whatsoever on account of such resumption.

(7) In the event of any dispute or difference at anytime arising between the vendor and the purchaser as to the true intent and meaning of these presents and each and every provision thereof, the property and rights hereby reserved or any of them or in any manner incidental or relating thereto, the said dispute or difference shall be referred to the Secretary to Government, Punjab, Industries Department, acting as such at the time of reference whose decisions thereon shall be final and binding on both the parties.

* * * * * *

This sale-deed is executed on behalf of the Governor of the Punjab by the Director of Industries and signed by the vendee. According to the case of the Petitioner, he had been trying to make the department agree to take his verified claims and the verified claims of other associates in payment of the price. As I read the sale deed, the sum of Rs. 1,47,248-8-0 had to be paid in cash by instalments and that amount could not be discharged by putting in the claims of his associates or even his own claims. The sum of Rs. 1,06,987-13-0 could only be paid by adjustment of the claims specified in the margin of the sale deed. Therefore, the stand taken by the Petitioner in the petition is not justified in any manner.

According to the sale-deed, if there is any breach in the payment of the instalments which obviously there is in the present case, the Government has the right to resume the factory. The sole question that requires determination is how that resumption is to be effected. The Government has sought to resume the factory by recourse to Section 4 of the Punjab Public Premises and Land (Eviction, and Rent Recovery) Act, 1959 (Punjab Act No. 31 of 1959), whereas according to the Petitioner this cannot be done as any dispute arising out of the terms of the sale deed is to be settled by arbitration. This is provided in condition No. 7 in the sale deed. All that I am called upon to determine now is whether the Government has the right to evict the Petitioner from the premises under Act 31 of 1959. Section 2(3) of the Act defines ''public premises'' in these terms--

''Public premises'' means any premises belonging to, or taken on lease or requisitioned by, or on behalf of the State Government, or requisitioned by the competent authority under the Punjab Requisitioning and Acquisition of Immovable Property Act, 1953, and includes any premises belonging to any district board, municipal committee, notified area committee or panchayat;

In view of the sale deed it cannot be argued that the premises in question are public premises. The Government had transferred the premises to the Petitioner and the Petitioner was to hold them as absolute owner. Therefore, in this context the premises do not belong to, or in any manner vest with, the Government. Therefore, the provisions of Act 31 of 1959 will not apply. Faced with this situation, Mr. Sharma relied on Section 3 of the Government Grants Act, 1895. This provision also is of no assistance to the Government.

This led Mr. Sharma to an ingenious argument on the basis of Article 162 of the Constitution. The argument is that in the exercise of the executive power of the State, the Government could evict the Petitioner. The rights of the Government vis-a-vis the Petitioner are the creation of the. contract of sale and according to Article 299 read with Article 300 of the Constitution those rights have to be settled by a suit or, in the present case, by resort to arbitration. Mr. Sharma in support of his contention relied on Rai Sahib Ram Jawaya Kapur and Others Vs. The State of Punjab, . I have gone through that decision, and that has not the remotest bearing so far as this argument is concerned.

Mr. Sharma lastly contended that the Petitioner does not become the owner till the conditions of the sale deed are fulfilled. That depends on the interpretation that is to be placed on the sale deed. As I have already held, according to the sale deed the Petitioner was made absolute owner of the premises. Ownership was not retained by the Government. All it did was to have the right of resumption of premises with regard to the purchase-money. The premises were subject to a mortgage in favour of the Government. Therefore, this contention of Mr. Sharma has also no substance.

For the reasons given above, I allow this petition and quash the orders of the Government so far as they relate to the use of Act 31 of 1959, In the circumstances of this case, I will make no order as to costs.