Punjab-Haryana High Court
Jatinder Sood vs Haryana Urban Development Authority on 23 July, 1999
Author: Mehtab Singh Gill
Bench: Mehtab Singh Gill
JUDGMENT G.S. Singhvi, J.
1. On the basis of highest bid of Rs. 1,94,500/- given by him in the auction held by the Haryana Urban Development Authority (hereinafter described as HUDA), Booth site No. 27, Sector 19-11, Faridabad was allotted to the petitioner subject to the enns and conditions incorporated in the ailolment let-ter Annexure P.I dated 10.7.1989 issued'in Form 'CC' prescribed under Regulation 6(2) of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 (hereinafter referred to as 'the Regulations'). Clauses 2,3,4,5,6 and 23 of the allot-nent letter reads as under :-
"2. Your bid for Booth No. 27 in Sector 19-11 at Faridabad has been accepted and the plot/building as detailed below, has been allotted to you on free-hold basis as per the following terms and conditions and subject to the provisions of the Haryana Urban Development Authority Act, 1977 (hereinafter referred to as 'the Act') and the rules/regulations applicable thereunder 'and as amended from time to time including terms and conditions as already announced at the time of auction and accepted" by you.
Sector 6.19-II Name of Urban Area Faridabad Plot/ Bldg. No.Booth site. 27 Approx. dimension description as notified at the time of auction Area in Sq. Mts. 3MX 9M Price plot/ bldg. (Rs.) 1,94,500/-
3. The sum of Rs. 19,450/- deposited by you as bid money at the lime of bid will be adjusted against the plot/building.
4. You are requested to remit Rs. 29,175/- in order to make the 25% price of the said plot/building within 30 days from the date of issue of this letter. The payment shall be made by a Bank Draft payable to the Estate Officer, HUDA, Faridabad and drawn on any scheduled Bank at Faridabad. In case of failure to deposit the said amount within the above specified period, the allotment shall be cancelled and the deposit of 15% bid money de-. posited at the time of bid shall stand forfeited to the Authority, against which you shall have no claim for damages.
5. The balance amount of i.e. Rs. 1,45,875/- of the above price of the plot/building can be paid in lumpsum without interest within 60 days from the date of issue of the allotment letler or in 10 half years/annual instalments. The first instalment will fall due after the expiry of six months of the date of issue of this letter. Each instalment would be recoverable together with interest on the balance price at 10% interest on the remaining amount. The interest shall, however, accrue from the date of offer of possession.
6. The possession of the plot/building may be taken immediately after making payment of balance 15% amount as demanded in para 4 above.
23. Half yearly instalment of Rs. ....will fall due on ....and ....eveiy year, as under :-
S. No. Due date Principal Interest Total
1.
14587.50 7293.75 21881.25
2. 21151.84
3. 20422.45
4. 19693.05
5. 18963.65
6. 18234.25
7. 17504.85
8. 16775.45
9. 16046.05
10. 15316.65 11,8.89 Sd/- Estate Officer, HUDA, Faridabad Note :- In case of delay instalment interest shall be charged @ 18% P.A."
2. In terms of clauses 2 and 4 reproduced above, the petitioner was required to pay 25% of the price including 10% deposited at the time of bid within 30 days from the date of issue of letter dated 17.8.1989. He was also required to pay balance amount i.e. 1,45,875/- in lumpsum without interest within 60 days or in 10 half yearly instalments with interest at the rate of 10% which was to accrue from the date of offer of possession. It, however, appeals that neither the competent authority of HUDA gave offer of possession of the site of the petitioner after he had fulfilled the requirement of paying 25% of the price nor he paid the instalments in accordance with clause 5 read with clause 23 of the allotment letter. He deposited Rs, 43.033/- vide draft dated 28.1.1992 and Rs. 1,42,9531- vide pay order dated 23.5.1996. While tendering the pay order, he also made a written request for delivery of possession. After about 3 months, he wrote letter Annexure P.4 dated 18.8.1998 with the request that audited statement of account be made available to him for payment of the remaining dues. At the same time, he reiterated the request for possession. On 27.8.1998 under Section 17(1) and (2) of the Haryana Urban Development Authority Act, 1977 (hereinafter referred to as 'the Act') (sic) requiring the petitioner to deposit Rs. 2,50,414/- and also to show cause as to why a penalty ofRs. 25,041.40 i.e, !0%of the amount be not imposed upon him. In terms of that notice, the petitioner was to appear before respondent No. 2 either personally or through his representative. However, 3 weeks before the due date, respondent No. 2 passed order Annexure P.7 dated 3.9.1998 and imposed penalty of Rs. 25,041.40 upon the petitioner who was asked to pay Rs. 2,75,455/-. The order was challenged by the petitioner in the appeal filed by him before the Administrator, HUDA, Faridabad (exercising the powers ofthe Chief Administrator, HUDA). Vide Annexure P.12 dated 27.10.1998, he filed additional grounds of appeals. Ms. G. Anupama, the then Administrator, HUDA, Faridabad, dismissed the ap-
peal by order Annexure P. 13 dated 20.1.1999. Immediately thereafter, respondent No. 2 issued notice dated 20.1.1999 to the petitioner to show cause as to why action may not be taken against him under Section 17(4) ofthe Act.
3. The petitioner has questioned the legality of the orders dated 3.9.1998 and 12.1.1999 as also the notice dated 20.1.1999 mainly on the ground of violation of the principles of natural justice. He has also challenged the decision of the respondents to charge interest at the rate of 18% on the delayed payment of instalments. His contention is that the respondents cannot charge interest till the offer of possession and as no such offer was made to him, the respondents do not have the authority to charge interest even at the rate of 10%.
4. The written statement filed by the respondents is a classic example of confused state of affair prevailing in the functioning of HUDA so far as the Court cases are concerned. Instead of placing the facts in a correct perspective, the respondents have made contradictory statements on the issue of delivery of possession. In paragraphs 4,16 and 21 of the written statement, they have averred that possession of the site has to be offered to the petitioner immediately on his depositing 15% price in addition to the 10% price already deposited at the time of auction. In the same breath, they have said that it was the petitioner's duty to have applied for taking delivery of possession which he failed to do up to 23.5.1996. In paragraph 9 it has been averred that a large sum was due from the petitioner and, therefore, before delivering possession he was called upon to pay the balance amount. Moreover, the respondents have not explained as to why respondent No. 2 passed order daied 3.9.1998 under Section 17(2) of the Act before 24.9.1998 which was fixed as the date for the petitioner's appearance.
5. We have heard Shri Puneet Jindal and perused the record.
6. The first question which arises for our consideration is whether respondent No. 2 could pass order dated 3.9.1998 before the date fixed for hearing. In our opinion, this question must be answered in the negative. A bare perusal of the notice Annexure P-6 shows that respondent No. 2 had called upon the petitioner to remit Rs. 2,50,414/- towards the due instalments and also to show cause why a penalty of Rs. 25,041.40 be not imposed upon him. The petitioner was asked to appear on 24.9.1998 in person or through a duly authorised representative for the purpose of personal hearing. However, 21 days before the appointed date, respondent No. 2 passed the impugned order and slapped penalty upon the petitioner. It is, thus, evident that respondent No. 2 had enacted a farcical show of hearing with the rule of audi alterant partem and the petitioner has been condemned, unheard. We, therefore, hold that the order dated 3.9.1998 passed by respondent No. 2 is nullity.
7. The second question which calls for detemimation by the Court is whether the order passed by the Appel-lale Authority is vitiated by an error of law or violation of the principles of natural justice. In our opinion, this question must also be answered in favour of the petitioner, in the memo of appeal (AnnexureP.12) filed by him, the petitioner had challenged the order passed by respondent No. 2 inter alia on the ground that it is contrary to the provisions of the Act and the" principles of natural justice. He also questioned the wisdom of the authority concerned to impose penalty and to charge interest at the rale of 18%. He gave particulars of the deposit made by him and the letters written to respondent No. 2 for supply of copy of the audited statement so as to enable him to pay the remaining amount. However, none of the points urged by him was considered by the Administrator who dismissed the appeal without assigning any reasons. In (he first three paragraphs of the order passed by her (Annexure P. 13), the Administrator took notice of the factum of filing of appeal and made cryptic observation regarding the pleas put forward by the petitioner and the Deputy District Attorney and in the last paragraph, she recorded her conclusion in the following words:
"I have heard both the parties on 29.10.1998 and gone through the records carefully. From the perusal of the records it is revealed that the appellant has not paid the due amount earlier in time. Keeping in view the facts of the case, the penalty imposed by the respondents as per HUDA Rules after issuing all the notices. There is no merit in the appeal. The same is hereby dismissed. Administrator, HUDA, Faridabad."
8. The least which can be said about the appellate order is that it is not only arbitrary and cryptic to the core but is also a glaring example of non- application of mind by the officer concerned. The Administrator, HUDA, Faridabad has not at all considered the petitioner's plea of violation of the principles of natural justice. She did not even advert to the details of the payment given in the statement annexed with the memo of appeal. The points raised in the main as well as supplementary memo of appeal have not been dealtwith. Above all, no reason has been assigned for upholding the penalty imposed by respondent No. 2. Thus, there is no escape from the conclusion that the appellate order is a non-speaking order and it is vitiated by an error of law apparent on the face of it.
9. The principles of natural justice are multi-dimensional and the courts have applied various facets of these principles in different types of cases. In the recent past, a new dimension has been added to the principles of natural justice, namely, that every quasi-judicial authority/Tribunal must not only record reasons in support of the order they make but such reasons should also be communicated to the affected party. The requirement of recording of reasons and communication thereof has been read as an integral part of the concept of fair procedure. The necessity of giving reasons flows from the concept of rule or law which constitutes one of the corner stones of our constitutional set up. The administrative authorities charged with the duty to act judicially cannot decide the matters on considerations of policy or expediency. The requirement of recording of reasons by such authorities is an important safeguard to ensure observance of the rule of law. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and minimizes arbitrariness in the decision making process. Another reason which makes it imperative for the quasi-judicial authorities to give reason is that their o/ders are not only subject to the right of the aggrieved persons to challenge the same by filing statutory appeal and revision but also by filing writ petition under Article 226 of the Constitution. Such decisions can also be challenged by way of appeal under Article 136 of the Constitution of India. The High Courts have the power to issue writ of certiorari to quash the orders passed by a quasi-judicial authority/Tribunal. Likewise, in appeal the Apex Court can nullify such order/decision. This power of judicial review can be effectively exercised by the Superior Courts only if the order under challenge contains reasons. If such order is cryptic and devoid of reasons, the Courts cannot effectively exercise the power of judicial review and we cannot countenance a situation in which the administrative authorities vested with the power to decide the rights of the parties may stultify the powers of the court simply by not recording reasons in support of their decisions or by refraining from communicating such reasons to the affected person. This is the reason why the Courts have insisted on rigorous compliance of the requirement of recording of reasons and communication thereof by eveiy quasi-judicial authority. Some of the judicial precedents, which can appropriately be cited to support the abovementioned proposition, are :-
(i) Uarinagar Sugar Mills Limited v. Sltyam Sunder Jhunjhunwala, AIR 1961 S.C. 1669;
(ii) Bliagat Raja v. Union of India and others, AIR 1967S.C. 1606;
(iii) Travancor Rayon Ltd, v. Union of India, AIR 1971 S.C. 862;
(iv) Mahabir Prasad Santosh Kumar v. State of V.P., AIR 1970 S.C. 1302;
(v) Woolcombers of India Limited v. Woolcomber Workers Union, AIR 1973 S.C. 2758;
(vi) M/s. Ajantha Industries v. Central Board of Direct Taxes, New Delhi, AIR 1976 S.C. 437;
(vii) Siemens Engineering and Manufacturing Co. v. Union of India, AIR 1976 S.C. 1785;
(viii) S.N. Mukherjee v. Union of India, AIR 1990 S.C. 1984;
(ix) Shanti Prasad Aggarwatta v. Union of India, AIR 1991 S.C. 814;
(x) Krishna Swamiv. Union ofIndia, AIR 1993S.C. 1407; and
(xi) M.L. Jaggi v. Mahanagar Telephone Nigam Ltd., AIR 1996 S.C. 2476 ; 1996(1) RCR(Civil) 646 (SC).
10. In A/A. Brij Bassi Hitech Udyog Ltd, v. State of Punjab and others, 1997(3) PU 53S, a Division Bench of this Court dealt with an issue whether, while exercising appellate/revisional powers under the Punjab General Sales Tax Act, 1948, (he Sales Tax Tribunal is required to record reasons and communicate the same to the affected party. After making reference to the judicial precedents, referred to hereinabove, this Court held that the Tribunal is not only bound to record reasons in support of its decision but also communicate the same to the affected person.
11. On the basis of the above discussion, we hold that the order passed by the Administrator, HUDA, Faridabad is not only violative of the principles of natural justice but is also patently erroneous justifying its invalidation by this Court under Article 226 of the Constitution of India.
12. The notice AnnexureP.14 issued under Section 17(4) of the Act is also liable to be nullified because it is founded on the patently illegal orders passed by respondent No. 2 and the Administrator, HUDA, Faridabad.
13. The issue which now remains to be considered is whether the respondents can charge interest at the rate of 10% or penal interest at the rate of 18%. The petitioner's case is that he is not liable to pay any interest because the possession of the site was not offered to him in terms of clauses 5 and 6 of the allotment letter. The respondents, as already mentioned above, have given vague and contradictory reply. We may have dilated on this issue at length but keeping in view the fact that the petitioner has already paid interest, we deem it appropriate to direct respondent No. 2 to decide this issue afresh after giving opportunity of hearing to the petitioner.
14. For the reasons mentioned above, the writ petition is allowed. Orders Annexures P.7 and P.13 and notice Annexure P.14 are declared illegal and quashed with the following directions:
(i) the Estate Officer, HUDA, Faridabad shall, if he has already not done that so far, offer possession of the site to the petitioner within one month of the submission of certified copy of this order;
(ii) within two months of the submission of certified copy of the order the Estate Officer, HUDA, Faridabad shall send to the petitioner a duly audited statement of accounts specifically indicating the outstanding dues, if any;
(iii) the petitioner shall pay theamount specified in the audited statement of accounts within one month of the receipt thereof;
(iv) The Estate Officer shall decide afresh the issue of charging of interest and levy of penalty and pass appropriate order in accordance with' law and while doing so he shall keep in view the judgment of this Court dated 2.6.1999 rendered in C.W.P. No. 5746 of 1997, Ram Kishan Galati and others v. State of Haryana and others, 1999(2) PLJ 243. In such proceedings, the petitioner shall be free to raise all objections against the charging of interest and levy of penalty. He shall also be free to avail appropriate departmental/legal remedies against the order, if any, passed by the competent authority for charging of interest and/or levy of penalty.
15. The petitioner shall get costs of Rs. 5000/-from the respondents which the Chief Administrator, HUDA shall recover from the officers who passed patently illegal orders.
14. Petition allowed.