In CWP-7733-2009 (O&M)-PUNJ HC- P&H HC upholds Chandigarh Administration’s Order cancelling lease of plot allotted to petitioners in 1985 after they failed to fulfil conditions mentioned in allotment letter Justices Tejinder Singh Dhindsa & Lalit Batra [02-06-2022]

Read order: Ranjit Kaur & Another v.  Chandigarh Administration & Others

Monika Rahar

Chandigarh, June 23, 2022: While dealing with a petition assailing the correctness of the order of Chandigarh Administration cancelling the lease of land granted to the petitioners by an auction carried out in 1985, the High Court of Punjab and Haryana has upheld the impugned order on the ground that contrary to the condition categorically mentioned in the allotment letter, the petitioners did not raise construction on the said plot within a period of three months from the date of auction. 

Also, the Division Bench of Justices Tejinder Singh Dhindsa and Lalit Batra also opined, “In the peculiar facts and circumstances of the case, this Court would have no hesitation in concluding that the petitioners have wilfully and deliberately violated the stipulation obligating them to construct on the site within a period of three years from the date of auction. Such default on the part of the petitioners cannot be viewed as a minor infraction. A period of 21 years would be too long to overlook. The inevitable conclusion is that it was only by way of last resort that the Chandigarh Administration took recourse to the ultimate sanction of cancellation of the lease.” 

Primarily, in this case, a plot of land in Sector 38-B, Chandigarh was allotted to the petitioners on leasehold basis for a period of 99 years in an open auction held in 1985.

However, vide a 2007  order of the Estate Officer, U.T. Chandigarh, the lease of the plot was cancelled and forfeiture of 10% of the premium, ground rent, interest etc. was also directed. The order of cancellation of the lease was affirmed by the appellate and revisional authorities. By virtue of the instant petition, the above-mentioned three orders were assailed. 

It was the case of the petitioners Counsel that the lease was cancelled on account of the fact that the petitioner did not carry out construction on the land within three years of the auction. But, it was the case of the counsel that the actual possession of the land was delivered to the petitioner only in 1992 and therefore, such construction could not be carried out. 

It was further argued that by virtue of an amendment in 2007, the Chandigarh LeaseHold and Sites and Buildings (Amendment Rules, 2007) was notified and Rule 16 thereof was amended to grant further time to allottees to raise construction on the sites allotted to them, however, the benefit of such amended Rule was arbitrarily denied to the petitioners. 

It was also the case of the Counsel that the power of resumption of the property of a citizen under the Rules should be used sparingly by the authorities as resumption is a drastic measure and should be resorted to only when there is a flagrant violation of the condition of lease. Yet another submission raised was that the impugned order of cancellation of lease was passed without giving any proper opportunity of hearing to the petitioners and as such, on such ground alone, the action could not be sustained.

Per contra, the counsel representing U.T. Chandigarh submitted that as per Clause(s) 12 and 22 of the Terms and Conditions of the

allotment letter, the construction on the plot was required to be completed within a period of three years from the date of auction in accordance with the Punjab Capital (Development and Regulation) Building Rules, 1952 as well as the provisions of the Frame Control and Architectural Control and the Zoning Plan (wherever applicable). The Counsel added that the petitioners failed to do so, as a result of which a notice was issued to them and after giving them an opportunity of hearing, the lease was cancelled. 

The UT Counsel also added that the appeal and the revision filed by the petitioners was also not decided favourably.  

Also, it is to be noted the  the Counsel for the petitioners contended that in view of the deposit of the extension fee made in pursuance to the interim orders passed by the High Court, the impugned orders of cancellation deserved to be set aside and the petitioners should be afforded a reasonable time to effect construction.

In such regard, it was submitted that the petitioners would readily deposit the up to date extension fee as may be determined by the respondent/authorities. 

After hearing the parties, contrary to the claim of the petitioners, the Court observed that despite being offered the possession of the land in 1985, the petitioners did not respond to the offer letter and approached the concerned authority for taking physical possession of the site ‘for the first time’ in September, 1992. Thus, this plea of delay on part of the respondent was discarded by the Court. 

Also, the Court held that equally, frivolous was the plea taken that extension fee was not deposited by the petitioners because the respondent raised varying demands at different points of time. 

Next, the Court dealt with the issue of whether the action of cancellation of lease of the site was justified? 

From the conditions, as mentioned in the allotment letter, the Court opined that the auction took place in 1985 and erection of the

building on the site was to be completed within three years from the date of auction. It was noticed that in the allotment letter, it was open for the Administration to cancel and resume the site and to forfeit the premium/rent in the event of breach or non-compliance of any of the conditions. Also, the Court noted that until the order of cancellation of the lease, no effort was put in by the petitioners to commence the construction.

Further, the Court made reference to the Supreme Court when it observed that resumption in the sense of a divestiture of title would be the ultimate civil sanction in the armoury of the authorities to effectuate the twin purpose of a regulated and planned development as also the expeditious creation of the capital city in the State. Also, while opining that resumption should be used as a weapon of last resort, the Top Court held that it would be necessary to grant such ultimate sanction in the hands of the authorities to resume the sites and buildings if the transferee recalcitrantly decline to conform to the ideal of a well planned and well regulated development. 

Coming back to the present case, the Court opined that in spite of a clear stipulation contained in the allotment letter to complete construction within a period of three years from the date of auction, the petitioners chose not to take possession till the year 1992, and  even thereafter petitioners kept dilly-dallying,

and did not even deposit the extension fee leviable on account of non- construction.

In light of the above, the Bench held that the petitioners sat over the site over a period of more than 21 years. 

Thus, in the peculiar facts and circumstances of the case, the Court concluded that the petitioners wilfully and deliberately violated the stipulation obligating them to construct on the site within a period of three years from the date of auction and that such default on the part of the petitioners cannot be viewed as a minor infraction.

“A period of 21 years would be too long to overlook. The inevitable conclusion is that it was only by way of last resort that the Chandigarh Administration took recourse to the ultimate sanction of cancellation of the lease”, asserted the Bench. 

Additionally, the Bench opined that there was no merit in the contention raised by counsel as regards violation of the principles of natural justice as proper notice was given to the petitioners and after hearing them, the lease was cancelled. 

Accordingly, while dismissing the petition, the Court directed that the amount towards extension fee deposited by the petitioners during the pendency of the writ petition would be refunded to them along with interest at the rate of 6% to be reckoned from the date banker’s cheque(s) deposited by the petitioners had been duly encashed and upto the date of actual refund.