Punjab-Haryana High Court
Surinder Singh vs State Of Punjab And Anr. on 30 May, 1997
Equivalent citations: (1997)117PLR261
Author: T.H.B. Chalapathi
Bench: T.H.B. Chalapathi
JUDGMENT M.S. Liberhan, J.
1. This order will dispose of civil writ petition Nos. 3259, 7290, 11969, 13312, 13425, 13437, 13552, 14000, 14016, 14105, 14167 14311, 14500, 14547, 15220, 15316, 15317, 15925, 15959, 16514, 17098 17370 17371 17877, 18249, 18365 of 1994 and 123 and 315 of 1995 and 19828 of 1996 also.
2. The principal issue involved in these writ petitions is as to whether the respondents can demand additional price from the allottees of residential plots in various Sectors of Mohali, and if so, whether the additional price to be charged from the plot-holders can be fixed without granting an opportunity of hearing.
3. In order to determine the issue raised, brief exordium of facts as emerged runs thus.-
The petitioners were allotted plots in various sectors of Mohali from time to time since the year 1983 till date on the tentative price assessed by respondent in consultation with the State.
4. At this stage, it would be expedient to notice the relevant condition of allotment which in verbatim run thus: "liable to any in addition to tentative price, the additional price, if any, determined under the rules." Respondent issued a public notice demanding the deposit of enhanced price at the rates varying from sector to sector. The enhanced price claimed with respect to Sector No. 71, Mohali i.e., the additional price, was at the rate of Rs. 107.94 per square yard, in addition to the original tentative price charged at the time of allotment. Selective individual notice in the stereo-typed form demanding additional price on account of payment of enhanced compensation assessed by various Courts and authorities with respect to the land acquired for various sectors was also issued. It was notified that in the eventuality of the additional price or the enhanced price not paid, the allotment is liable to be cancelled.
5. Learned counsel for the petitioners impugned the demand of additional price broadly on the same grounds, inter alia contending that (1) the additional price claimed from the allottees was assessed or worked out without observing the principle of natural justice. Neither an opportunity of hearing to the effected allottees was granted nor the basis or the parameters to asses the additional price was put to them. Since the State failed to defend the claim of the land owners for enhancement of compensation, diligently failing to lead proper evidence before the acquisition authorities and Tribunals for assessment of the market value of the land and, therefore, the State cannot be permitted to pass their liability of interest on the enhanced compensation as well as the enhanced compensation itself on the allottees.
6. On merits, it was submitted that (i) neither the land price, for all the plots nor enhanced compensation can be distributed, either in equal proportion amongst the plot holders of plotable area or equally on all the plot holders of all the sectors in view of quality of land. Price for plotable plots situated in the Khatans or the big breaches cannot be the same as that of the other lands.
(ii) Respondent could not be exempted from sharing the burden of enhanced price with respect to the plots allotted for public utility services i.e. plots of public utility cannot be exempted from sharing their proportionate liability of the additional price due to enhancement in compensation under the Land Acquisition Act. Burden of the additional price should be spread over on all the allottable plots at Mohali and not according to sector to sector and that too, on the allottees of the residential plots only.
(iii) The petitioners were not made aware of the criteria adopted or the methodology for working out the additional price before or after the issue of demand notice.
(iv) The demand notice for additional price is not only vogue but also shrouded in mystery. Nothing was disclosed as to how much is the enhanced compensation payable with respect to the land allotted to the allottees; allottees were not made aware at what rate and by which court the compensation has been enhanced, the burden of which is being passed on to the allottees.
(v) The benefit of recovery of higher amounts by : sale or auction of commercial sites was not passed on to the allottees of residential plots. Nothing is known as to what is the methodology adopted for fixing the tentative price or the additional price.
(vi) It was also not disclosed as to how and at what rate the liability of the allottees was fixed with respect to development charges. No break-up of the award for the Courts and reasons for enhancement of compensation has been disclosed to the allottees. The allottees cannot be made liable for respondent's inaction or delay in execution of development and other projects. There is no basis for demanding the enhanced price. The demand made after issue of allotment suffers from the infirmities of laches on the part of the respondent, especially when the respondent was working on non-profit-no-loss basis.
(vii) The respondents cannot keep the contract alive for charging additional price indefinitely for any period of time or charge the additional price in bits. The respondent cannot be permitted to add the compensation in the tentative price with respect to the award which was already in existence under which the compensation was enhanced at the time of allotment. Enhansed compensation had to be spread over the plots sold on auction or reserved for auction or other utility services. Even the price is to be reasonable, it cannot be charged or fixed in air. It is only the award subsequent to the allotment which can be taken into consideration for fixing the additional price. The burden of enhancement should either be shared with beneficiaries of public utility services from other sectors or it cannot be passed on to the allottees of only a particular sector where amenities are placed. Since the entire town utilizes the public utility services, consequently the entire burden of the enhanced compensation with respect to the public utility plots has to be shared by the whole town.
(viii) It was argued that the subsequent purchasers from the allottees cannot be burdened with the additional price. Subsequent vendees, since purchased the plots as bona fide purchasers from the vendors after no objection certificate for transfer was granted by the respondents, consequently or as a necessary corollary the condition of liability to pay the additional price was in fact not taken over by the vendees or it did not either impliedly or expressly became privity to such a contract inter se.
(ix) The State has no jurisdiction to charge additional price in view of the provisions of Sections 3 and of the Punjab Urban Estate Development and Regulation Act, 1964 (hereinafter) referred to as '1964 Act') and the Punjab Urban Estate (Sale of Sites) Rules, 1965 (hereinafter referred to as '1965 Rules'). Similarly, under the Punjab Housing Development Board Act, 1972 and the Punjab Housing Development Board (Preparation and Approval Development Plan) Rules, 1975, the subsequent vendees who have purchased the plots free from all encumbrances with a permission to change the ownership, from the respondent, especially when there being no objection or encumbrance pointed out by the respondent or the vendors, are not liable to pay the additional enhanced price.
(x) It is presumed that the tentative price originally fixed and charged was spread over the total area acquired rather than over only a plotable area. Consequently, the burden of enhanced compensation cannot be spread over only on the plotable area, exempting the area under the public utility services-commercial areas, institutional areas etc. Similarly, since no date for charging the interest has been disclosed to the petitioners, the plot-holders are not liable to pay the interest for delayed demand on account of the negligence of the State. The decisions taken behind the curtain should be assumed to be arbitrary unless shown to be otherwise. The price received by the respondents over and above the tentative price by auction of the different nature of plots had not been adjusted while assessing the additional price due. Fifty per cent of the compensation having already been calculated or added, in the tentative price to be paid in future and charged at the time of assessing the tentative price should be adjusted. The enhanced price is unreasonable and cannot be charged. Justice has to be rendered to the allottees who are service-class or middle class or poor people, to whom providing shelter is the duty of the State under the Directive Principles of State Policy.
7. Respondents refuted the grounds of challenge. It was averred that the plots were allottable at the tentative price fixed by the State subject to the liability of the allottees to pay the additional price to be fixed keeping in view the enhanced compensation in the land acquisition proceedings. Additional price has been calculated keeping in view the compensation for the acquisition spread over the plotable area for residential purposes, forming part of the acquisition. Compensation is enhanced of the plots falling under the particular acquisition. Burden of additional price cannot be shifted either from sector to sector or to all the sectors, as the liability of the additional price is only of the holders of the plots in that particular acquisition for which compensation was enhanced. The amount received by selling commercial sites, public utility services sites, institutional sites, was taken into account. Calculations were made keeping in view the area cost of the acquired land and the unacquired land by adding 50% of acquisition charges, 2% administrative charges, interest payable on the compensation paid to the land owners, area to be developed, cost of development, administrative and supervisor charges for (he bank guarantee, Government charges, profits etc. There was no provision for re-fixing the tentative price, much less re-fixing without material on record. In terms as required by the statute, additional price has been charged to the extent of compensation enhanced only.
8. At this stage, it would be expedient to notice the Scheme of the 1964 Act and the 1965 Rules. State is authorised Under Section 23 of the 1964 Act to frame rules with respect to terms and conditions on which lands and buildings can be transferred by the State and the manner in which consideration money for transfer can be paid. Under 1965 Rules, Rule 4 confers power on the respondent to sell the sites by allotment and to charge sale price where such sites form part of the land acquired by the State Government under the Land Acquisition Act and where in case reference Under Section 13 thereafter made against an award, the sale price would be charged tentatively, i.e., it provides sale by allotment at a tentative price to be charged where such sites form part of the land acquired by the State Government under the Land Acquisition Act. In case of reference Under Section 18 of the Land Acquisition Act when either the compensation is enhanced or the State reference for reduction of compensation fails, the aggregate of the tentative price and the additional price would be charged form the allottees. With respect to any other case, such final price may be charged as may be determined by the State Government from time to time. Similarly, Rule 5 of 1965 Rules provides for the liability to pay additional price in case of sale of a site by allotment. The transferee would be liable to pay the State Government in addition to tentative price the additional price determined in respect thereof under the rules. The additional price is payable within 30 days from the date of demand made in this behalf by the Estate Officer or within the period so extended. Tentative price and the additional price have been defined under Rule 2 of 1965 Rules which runs thus:-
"Rule 2aa:- "Additional price "means such sum of money as may be determined by the State Government in respect of sale of a site by allotment having regard to the amount of compensation by which the compensation awarded by the Collector for the land acquired by the State Government of which site sold forms part, is enhanced by the Court on reference made Under Section 18 of the Land Acquisition Act, 1894, and the amount or cost incurred by the State in respect of such reference.
Explanation:- For the purpose of this clause and Sub-rule (4) of Rule 4, the expression The Court' means the Court as defined in Clause (d) of Section 3 of the Land Acquisition Act, 1894 and where an appeal is filed in the Appellate Court.' "Rule 2(e): "Tentative price" means such sum of money as may be determined by the State Government from time to time in respect of sale of a site by allotment having regard, among other matters, to the amount of compensation awarded by the Collector under the Land Acquisition Act, 1894 for the land acquired by the State Government of which the sites sold form part."
9. We may hasten to add herein that there is neither any procedure nor any mechanism for the considerations required to be kept in view for assessing the additional price or the tentative price, as has been provided under the 1964 Act or the 1965 Rules.
10. Insidiously, reading from the judgments cited at the Bar, as reported in Neyvely Lignite Corporation Ltd. v. Special Tehsildar (Land Acquisition) Neyvety and Ors., AIR 1995 SC 1004, Delhi Development Authority v. Pushpendra Kumar Jain, AIR 1994 SCW 3985, Karnail Singh Pacca alias Karnail Singh Managing- v. The State of Punjab, (1987-2) PLRs 236, Gian Jyoti Educational Society v. Urban Estate Punjab, (1992-2) PLRs 515, Charanjit Bajaj v. State of Haryana, 1986 PLJ 601, H.U.D.A. v. Smt. Rajinder Kaur, 1987 PLJ 312, Gurusamy Naiker and Ors. v. G. Jayaraman and Ors., AIR 196 Madras 212, LIC of India v. Consumer Education and Research Centre, JT 1995(4) SC. 366, Bharathi Knitting Co. v. DHL Worldwide Express Courier Division of Airfreight Ltd, JT 1996(6) SC 254, P.T.R. Exports (Madras) Pvt. Ltd. and Ors., v. The Union of India and Ors., JT 1996(6) S.C. 435. Annasaheb @ Bapusaheb Patil and Ors. v. Balwant @ Balasaheb Babusahev Patil, JT 1995(1) SC 370, Harbindra Bajwa v. State of Haryana etc., (1996-3)114 PLR 621, it emerges: (1) where the contract is reduced into writing and the intention of the parties with respect to terms of the contract cannot be proved. (2) Where there is a specific term in the contract, parties are bound by that term. (3) The principle of legitimate expectations does not play any role without an appropriate authority empowered to take decision by an executive policy, as it is settled law that Courts give greater leverage to the executive than legislature.
11. The principle of reasonableness, fairness, absence of arbitrariness and fairness of justice between the State and the subjects, are some of the quite essential of Article 14 of the Constitution of India. Transparency, reasonableness, granting of opportunity of hearing to a citizen or a person affected by an administrative or judicial or quasi-judicial Government decision in discharge of their day-to-day executive functions, the advancement of credibility of the Administration, are matters of public concern and relate to good governance. Executive administrative decisions or quasi-judicial decisions are subject to judicial scrutiny in order to determine whether the decision-making process was reasonable, rational, fair and not arbitrary or vogue; various options and considerations of public interest and State interest, objective approach and such other relevant consideration for arriving at a reasonable decision especially in the present day vast administrative sphere in contractual matters have been taken into account or not. Law has always lifted the veil by all the artificial ways to arrive at substance by judicial scrutiny of the action of the State. With the expanding concept of observance of the principles of natural justice in the administrative actions or contractual matters of the State whereby the citizen's right has been adversely affected, has been imbibed not only in the common law but in the Constitution itself. Its applicability can be stated to be dependent upon the consequences ensuing from exercise of authority under a statute or rules though in addition to it, it may be referable to a contract, much less to a contract entered into by the State under the statute. In a Welfare State, the organs of the State are expected to discharge their functions in a fair and just manner not only with respect to the substantive rights of the citizens but also in the procedural matters. Which particular principle of natural justice to be followed would depend upon peculiar circumstances of a given case particularly when the object of the principle of natural justice is to arrive at a just decision objectively and decision taken on the basis of the peculiar circumstances. Fairness in decision in the lodestar to arrive at it. Ordinarily, observance of the principle of natural justice is the inseparable part of fairness, unless the exclusion of it is determined by the circumstances and facts or by a legislation, expressly or impliedly.
12. Allotment having been made on the tentative price, the respondent have right to charge the additional price under the 1965 Rules as well as under the statutory contract, i.e., the allotment to the allottees. In fairness to the citizens, though the respondent has a right to charge additional price, yet he cannot enhance the price or claim additional price without showing any justification for the same. Finally, cost should be proportionate and approximate to the estimated cost, i.e., the tentative price and the additional price cannot be disproportionate to each other. It cannot be of such a magnitude that a citizen taking a shelter or a roof for himself from the State is caught in a spider's web by an attractive offer failing within his means and later on under the cover of additional price, is made liable to pay an astronomical price for non compliance of which one loses his principal amount paid by way of tentative price. Inability to pay the additional price may result in resumption of the shelter obtained by a citizen after he has spent his life's earnings. We may hasten to add that the State-authorities are bound to explain, justify to the satisfaction of the Court, the reason for the additional price or whether escalated price is permissible. Courts may and would not like to come in and examine minute details with reference to the costs worked out. As observed earlier too, in the era of the principle of natural justice dominating the field as a principle of equity justice, as also envisaged by Article 14 of the Constitution of India, it is incumbent upon the authorities that in order to enhance their credibility and transparency in their public actions, to observe the minimum requirement of natural justice. Granting an opportunity of hearing to the affected person is the minimum that can be expected from the State in its duty for observance of the principles of natural justice. It is a legitimate expectation from the respondent-State or the other authorities that before any liability is fostered upon a person, he would be granted a hearing, denial of which would result in perpetuating injustice.
13. In our considered view, in the facts and circumstances as stated in the earlier part of the judgment, the minimum expectation from the respondent on the touchstone of the observance of the principle of natural justice was that State would disclose to the petitioners the process of calculating the additional price/enhanced price, the methodology adopted in calculating the figures arrived at, the statistics for arriving at the same. The State at least should have invited their objections thereto even if situation where large number of people are involved may not be feasible. It was further the bounded duly of the respondent to satisfy on plausible material on record as to how the figures and the additional price chargeable from the allottees was arrived at.
14. On reading of 1965 Rules, under which the respondent can allot the plots at the price fixed in terms of rules as well as the terms of contract. Respondents earlier were entitled to demand by way of additional price only as defined by the rules. Even in the course of arguments, this limited right of the respondents was not even disputed. Referring to the rules as reproduced in the earlier part of the judgment, the respondents can charge by way of additional price including the service charges, expenses incurred during the proceedings for enhancement of the compensation by distributing the whole amount amongst the plot-holders. No other charges though shown to be admissible can be demanded as an additional price.
15. We have gone through the record and eschewing any expression of opinion on merits with respect to the mode of distribution/spreading of the enhanced compensation only on the plot-holders, granting of exemption from the enhanced price to the institutional plot-holders or public authorities or on the public utility plots or the vacant land or the right to charge additional price only once and not again and gain, the circumstances under which the additional price could be charged, the right to charge interest terminus quo the date from which the interest to be charged, the consideration of the same price irrespective of the situation or nature of plots, the process of determining the additional price, the statistics and the basis of the figures arrived at and the liability of a particular class or section of persons. The writ petitions are disposed of with the observations that the respondent would observe the principle of natural justice i.e. additional price would be determined by the respondent :after granting an opportunity of hearing.
16. In our considered view, though the penal action of resumption etc. is the consequence of the non-payment of the demand made, minimum it can be envisaged that the same can be taken only when demand has been raised against an individual allottee and the demand notice is served on him. While determining the additional price, to observe the principle of natural justice keeping in view the number of allottees and other circumstances notices may be served through a general publication.
17. Resultantly, in view of the observations made above, (1) the respondents would be entitled to take penal action of resumption only after the demand notice is served individually and not complied with and not on the basis of service through publication. The mode of individual service may be determined by the authorities according to the facts and circumstances of each case as to when the action arises.
(2) The additional price would be enhanced compensation, the expenses incurred in defending or prosecuting the claim along with any other ancillary or expenditure incurred in connection with or incurred their of. It is this additional price which can be charge or levied upon plot-holders, and could be charged.
(3) Before fixing the additional price, the respondents would disclose the basis of such calculations, if anybody demands it. The respondents would invite objections with respect to the additional price proposed to be assessed before finally fixing the additional price. It can be the discretion of the authorities after considering the peculiar facts and circumstances and the voluminous nature of the task, to grant an opportunity of personal oral hearing before finally fixing the additional price. While exercising such discretion, appropriate reasons for not granting an opportunity of ¦personal hearing would be recorded in writing.
(4) The respondent-authorities would be liable to permit inspection of the record with respect to the proceedings for fixing the additional price and show the mode and statistics in which the tentative price was fixed. It may be clarified that the allottees would be entitled to inspect the record to know as to how the additional price has been worked out.
(5) The petitioners would be at liberty to raise all objections, including those pointed out in the earlier part of the judgment before the authorities, in addition to any other objections they may propose to raise with regard to calculation of additional price. It is made clear tat it is for the authorities to decide after observing the principle of natural justice as to the persons from whom the additional price would be charged, the amount chargeable, the modalities of receiving charges the process of assessing additional price or making exceptions from paying additional price.
18. With the afore-said observations, the writ petitions are allowed. However, there will be no orders as to costs.