Surinder Singh Bains vs Union Territory of Chandigarh

R.L. Anand, J.—Wing Commander Shri Surinder Singh Bains, has filed the present Civil Writ Petition under Articles 226/227 of the Constitution of India against the Union Territory, Chandigarh praying for the issuance of a writ of certiorari quashing the orders/directions Annexure P-2 and P-4. The petitioner has further prayed that a writ in the nature of mandamus be issued directing the respondent to refund the amount of Rs. 3,11,308.00 with interest which the petitioner was forced to deposit as a condition precedent for permission to transfer his plot No. 2573 Sector 35-C, Chandigarh, as the order is illegal, without jurisdiction, arbitrary and amounts to infringement of Articles 14 and 19, 265 and 300A of the Constitution.

The case set up by the petitioner is that he applied for the allotment of a residential plot at Chandigarh with the respondent vide his application dated 27.1.1967 and he was allotted Plot No. 2573 Sector 35-C, Chandigarh. The approximate area of the plot was 1039.18 square yards and it was allotted to him vide allotment letter dated 1.6.1967 at the reserved price of Rs. 16,627/-. This residential plot was allotted on free hold basis. The possession was delivered to the petitioner and a condition was imposed vide which the petitioner could not sell, mortgage or otherwise transfer the title or interest for a period of 10 years except with the permission of the respondent.

In the year 1987, the petitioner thought to sell the said property and he sent his intention to the respondent and a permission was sought from the respondent to sell the aforesaid property. In response to the petitioner''s intention, the respondent sent letter, dated 12.10.1989 stating that the petitioner could be granted the permission provided he deposits Rs. 3,11,308/-. This amount of Rs. 3,11,308/- constitutes 1/3rd amount of enhanced increase in the value. Through the aforesaid letter, the petitioner was directed to make the payment within a period of 15 days. Though the petitioner was not required to deposit the amount, yet he deposited the amount of Rs. 3,11,308/0- as demanded by the respondent. According to the petitioner, he was allotted the plot in the year 1967 and the possession was delivered to him in the year 1970. He became the full fledged owner of the plot on free hold basis and the amendment under which the amount was claimed, was inserted in the year 1979, therefore, the said amendment is not binding upon the petitioner. The petitioner, in these circumstances, made a demand to the respondent for the refund of the amount of Rs. 3,11,308/- but it has not been returned. This action on the part of the respondent is without jurisdiction and contrary to the rules.

With the above broad allegations the petitioner has prayed for the issuance of necessary writs in his favour, as stated in the earlier portion of the judgment.

Notice of the writ petition was given to the respondent-Chandigarh Administration, which filed the written statement and denied the allegations. A preliminary objection was raised by the respondent that the petitioner had not exhausted the alternative remedy. He had not filed any appeal before the Chief Administrator, Chandigarh and then Revision before the Adviser to the Administrator. Hence the present writ is liable to be dismissed.

It was also pleaded by the respondent that petitioner had not availed the remedy available to him under the Civil Court. He could have filed a civil suit for the recovery of the amount. Further that after the allotment of the site to the petitioner, the petitioner executed a deed of conveyance on 18.7.1973, and clause 9-A was inserted which puts an embargo upon the petitioner not to sell or transfer the rights in the property for the period of ten years from the date of the completion of the building. This document was executed by the petitioner in favour of the respondent. The petitioner was allotted the plot in question on concessional rate out of the defence quota and as such the Chandigarh Administration was competent to put an embargo upon the petitioner so as to keep a check that petitioner or such like person does not make the plot a saleable commodity in order to earn undue benefit at the costs of the Government exchequer. The petitioner voluntarily accepted the condition of the allotment and thus, he is estopped from his own act and conduct from filing the present petition. The respondent further stated that there was a demand in the public in such like cases that the allottee should be allowed to transfer the rights in the property of this kind before the expiry of the restricted period as a result of which Rule 8-C was added in the Chandigarh (Sale of Sites and Buildings) Rule, 1960 vide notification dated 9.2.1979. Rule 8-C is as follows:-

"Rule 8-C: Notwithstanding anything contained in the letter of allotment/conveyance deed imposing a ban on the transfer of a site/building as the case may be or any right, title or interest therein, before the stipulated period, the Estate Officer may grant possession to the transfer by way of sale, gift, mortgage or otherwise of the site/building or any right, title or interest therein, after transferor has paid full price of the site/building and if in the opinion of the Estate Officer special circumstances exist for the grant of such permission. This will be applicable to all categories of sites/building sold by allotment/hire purchase or on concessional rates.

In the case of transfer by way of sale/gift/mortgage or otherwise of the site, or any right, title or interest therein, i/3rd of the unearned increase in the value i.e. the difference between the price paid and the market value of the site/building at the time of permission of transfer shall be paid to the Government, before registering such sale or transfer. The market value of the property for this purpose shall be assessed by the Estate Officer, or such authority as may be prescribed by the Chief Administrator and the transferee shall be entitled to produce his evidence of being heard. Thus, this rule was not made applicable retrospectively in any case. In fact this rule was made to facilitate the allotment of transfer the rights in the property before the stipulated period. This was in fact an enabling provision and the person whosoever desired to get benefit of provisions of this Rule 89-C; could apply to the Estate Officer for getting permission after charging the 1/3 unearned increase in the value of the property. Accordingly, the petitioner applied for issuance of No Objection Certificate under this rule ibid and he was granted permission to sell before the expiry of stipulated period as agreed upon, after charging the unearned increase. A copy of the application whereby the petitioner applied for No Objection Certificate is annexed as Annexure R-1/. As per the allotment letter and deed of conveyance allottee was required to complete the building within 3 years from the date of delivery of possession. The petitioner till the date of application at Annexure R-1, did not complete the construction on the site. Thus, the petitioner was granted permission even without completion of building before the expiry of stipulated period under Rule 8-C. Grant of No Objection Certificate after charging unearned increase was concession to the petitioner under Rule 8-C."

It is further stated by the respondent that the petitioner, while agreeing to sell the plot to Shri Sampuran Singh son of Shri Sadhu Singh must have settled the value of the property taking into account the liability to pay 1/3rd unearned increase to the Estate Officer for seeking "No Objection Certificate". The petitioner has not placed on record the agreement to sell the plot to Shri Sampuran Singh. However, it is certain that this liability of 1/3rd unearned increase has been burdened or paid by the purchaser Shri Sampuran Singh. The amount has certainly come out from the pocket of Shri Sampuran Singh. At this belated stage, the petitioner, who is seeking the refund of the unearned increase which has come from the pocket of Sampuran Singh, is not entitled to claim.

With the above broad defence, the respondent has prayed for the dismissal of the writ petition.

In support of his case, the petitioner has placed on record Annexure P-1, vide which, a plot No. 2573, Sector 35-C, Chandigarh, was allotted to the petitioner for a consideration of Rs. 16,627/- and the area of the plot has been mentioned as 1039.18 square yards. Annexure P-2 is the letter dated 12.10.1989, issued by the Chandigarh Administration in which it is mentioned that permission for the sale of the plot No. 2573, Sector 35-C, Chandigarh would be granted under Rule 8-C provided the petitioner deposits a sum of Rs. 3,11,210/- and Rs. 96/- as arrears in the office within 15 days from the date of the issuance of the letter representing 1/3rd of the unearned increase in the value i.e. the difference between the price paid and the market value. Annexure P-3 is the receipt through which this amount has been received by the Administration. Annexure P-4 is the permission which was granted in favour of the petitioner so that he may sell the plot in favour of Sampuran Singh son of Shri Sadhu Singh. Annexure P-5 is the application given by the petitioner for the refund of the amount. On behalf of the respondent, Annexure R-1 has been placed in which it has been stated by the attorney of the petitioner that the petitioner wanted to sell his property for some domestic reason and financial constrains and he made a prayer to seek the permission of the respondent to sell the above said property in favour of Shri Sampuran Singh.

I have heard Shri P.C. Goel, Advocate, appearing on behalf of the petitioner and Shri Subhash Goel, Advocate appearing on behalf of the respondent and with their assistance have gone through the record of this case.

It is the admitted case of the parties that petitioner was allotted a plot on a concessional rate out of the defence quota. When the Chandigarh was proposed to be established, the Administration allotted residential/commercial/industrial plots to the various applicants and the object was to rehabilitate this beautiful city. A sort of incentive was given to the applicants or to the intended purchasers to rehabilitate them in this city so that this town may develop like anything. With that intent, the administration while allotting the plot put certain restrictions in the allotment order itself and in the various conveyance deeds executed in favour of the allottees and one of the stipulation was that such allottee shall not sell the plot for a period of 10 years from the date when they complete the building. Then the administration was obliged to consider the genuine cases of hardship where a person required the money for his family affairs due to any exigency. In such a situation Rule 8-C was incorporated which have already quoted above.

Now the point which survives for determination is whether the clause imposed by the respondent authority in the sale deed or whether the Rule 8-C is unreasonable and whether this Rule 8-C can be applied prospectively or retrospectively. The learned counsel appearing on behalf of the petitioner has relied upon a judgment of a Single Bench of this Court delivered on 28.7.1989 in Civil Writ Petition No. 9516 of 1988 titled Brigadier (Retd.) Harbans Singh Sekhon v. Union Territory, Chandigarh (1989 96 P.L.R. 503 and submitted that similar question came up for consideration before Hon''ble Single Judge who allowed the writ of petitioner Brigadier Harbans Singh Sekhon and ordered for the refund of the amount and the case of the petitioner is also covered by the said ratio. The counsel also submitted that the L.P.A. No. 1755 of 1989 against this judgment was also dismissed on 23.10.1989.

On the contrary, the learned counsel appearing on behalf of the respondent, invited my attention to a decision of the Hon''ble Division Bench dated 25.7.1989 given in C.W.P. No. 1685 of 1996 titled Dr. Sehdev Gupta v. Union Territory, Chandigarh, where this very point was examined and in the cited case, it was one of the defence of the Department that the writ of Dr. Sehdev Gupta was liable to be rejected on the ground of delay and laches. In the present case, when the petitioner deposited the amount, he had never stated that he was depositing the amount under duress or under threat or coercion. He did not lodge any protest with the respondent by saying that condition contained in Rule 8-C was oppressive and unjust or unreasonable. He did not express his reservation with the requirement of depositing 1/3rd for the unearned increase in the value of the property. Rather, he voluntarily agreed to abide by the provisions of the Act and the Rules. He suo motu opted to deposit the amount in accordance with the provisions and, therefore, on the ground of laches this petition is liable to be dismissed. The judgment which has been relied upon by the learned counsel for the petitioner was also cited before their Lordships and the judgment did not find favour with the Hon''ble Division Bench in C.W.P. No. 1685 of 1996. The Hon''ble Division Bench was pleased to remark as follows:-

"A careful reading of the judgment passed by Hon''ble Mr. Justice N.C. Jain, shows that the learned Single Judge did not consider the background in which 1/3rd of the unearned increase in the value of the property was deposited by the writ petitioner. Rather the judgment proceeds on the assumption that the amount was deposited by the petitioner under the threat of punitive action. This in our view is the fundamental error in the approach of the learned Single Judge. Moreover, attention of the learned Single Judge does not appear to have been drawn to the provisions of Rule 8-A and Forms ''D'' and ''E'' which contain the drafts of conveyance deed. If the learned Single Judge had properly analysed the relevant provisions and the conditions of the letter of allotment and the deed of conveyance it could not have been possible for him to reject the plea of estoppel raised by the respondent."

The ratio of the judgment of the Hon''ble Division Bench, passed in C.W.P. No. 1685 of 1996 is fully applicable to the facts in hand.

The other point which requires to be determined is whether the Rule 8-C which was incorporated is to apply prospectively or retrospectively. This point was also considered by the Hon''ble Division Bench. In the light of the provisions of Section 3(1) and Section 2 of the parent Act and Rules 3.4(1) and 2, 8, 8-A and 8-C, it was observed by the Hon''ble Division Bench by disagreeing with the view of Hon''ble Single Judge, that Rule 8-C can apply to a case in which the property was allotted even prior to 9.2.1979. The Hon''ble Division Bench was pleased to hold further that the learned Single Judge did not correctly appreciate the ambit and scope of Rule 8-C and its applicability. Virtually the judgment of Brigadier Harbans Singh Sekhon (supra) was overruled by the aforesaid Division Bench. This judgment, holds the day even today. Faced with this difficulty, the learned counsel for the petitioner then submitted that the clause imposed by the respondent is arbitrary and unconstitutional and, therefore, it cannot be enforced. The argument is devoid of any merit. When the clause was imposed in the conveyance deed, it restricted the sale of the plots etc. which was incorporated with a purpose to discourage, profiteering by those persons who get building sites on concessional rates. A person who gets the building site by allotment pays far less to the Administration as compared to a person who purchases similar property in auction. Therefore, the restriction not to transfer the property for a period of ten years from the date of the completion of the building cannot be described as unreasonable or arbitrary. Even this condition was relaxed for the benefit of those persons who were in need of money. They, of course, could sell the plot after taking the permission if they deposited or paid 1/3rd of the unearned increase money with the Department.

The point in hand in the present writ petition earlier came up for consideration also before this Bench recently on 14.9.1999 in Ex. Captain Bant Singh v. Chandigarh Administration 1999(4) R.C.R. 475 and it was held by this Bench that the stipulation which has been challenged is not unreasonable and the allottee cannot demand for the return of the amount. The learned Single Judge relied upon a judgment of Dr. Sehdev Gupta v. Union of Territory, Chandigarh, (C.W.P. No. 1685 of 1996) decided on 25.7.1997.

Lastly, it was contended by the learned counsel for the petitioner that now there is a conflict between the two Division Benches one presided by Justice Singhvi and other in L.P.A. No. 1755 of 1989, decided on 23.10.1989 and, therefore, this case should be referred to the larger Bench. I do not subscribe this view also. Division Bench headed by Hon''ble Mr. Justice G.S. Singhvi, overruled the decision of the learned Single Judge given in Brigadier Harbans Singh Sekhon ''s case (supra). Moreover, the judgment passed in the aforesaid L.P.A. has not been shown to me by the learned counsel for the petitioner. He simply gave a reference to L.P.A. No. 1755 of 1989.

Be that as it may, this Court is of the considered opinion that the reasons advanced by Hon''ble Division Bench in Civil Writ Petition No. 1685 of 1996 titled Dr. Sehdev Gupta v. Union Territory, Chandigarh are full of merits and this Court earlier adopted the reasons of this Division Bench. I am still inclined to adopt the same very reasons in preference to the reasons given in Brigadier (Retd.) Harbans Singh Sekhon''s case (supra). Finally, I do not see any merit in this writ petition which is hereby dismissed with no order as to costs.