Punjab-Haryana High Court
**** vs Ut Chandigarh Admn. & Ors on 8 November, 2012
Author: Surya Kant
Bench: Surya Kant, Augustine George Masih
CWP No.16634 of 2008 -1-
HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
****
CWP No.16634 of 2008 (O&M)
Date of Decision: November 08, 2012
****
Dheera Singh . . . . Petitioner
VS.
UT Chandigarh Admn. & Ors. . . . . Respondents
****
CORAM: HON'BLE MR.JUSTICE SURYA KANT
HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH
HON'BLE MR. JUSTICE R.P. NAGRATH
****
1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
****
Present: Mr. Rajiv Atma Ram, Senior Advocate;
Mr. Kanwaljit Singh, Senior Advocate;
Mr. Chetan Mittal, Senior Advocate;
Messrs. BR Mahajan, Ravi Gakhar,
Vikas Kuthiala, Puneet Gupta, Vikas Jain,
Alok Jain & Gaganpreet Kaur, Advocates
for the PETITIONER(s)
Mr. Sanjay Kaushal, Senior Standing Counsel with
Messrs. Amit Sharma, Arjun Shukla,
Smriti Dhir & Nimrata Shergill, Advocates
for RESPONDENT - Chandigarh Administration
****
SURYA KANT, J.
(1). A Division Bench of this Court vide order dated 16.11.2010 made the following reference for adjudication by a Full Bench:-
"In this petition, the constitutional validity of Section 8-A of the Capital of Punjab (Development & Regulation) Act, 1952 (for short 'the Act') has been CWP No.16634 of 2008 -2- challenged primarily on the ground that the earlier Full Bench judgement of this Court in case Ram Puri, Chandigarh vs. Chief Commissioner, Chandigarh and others, AIR 1982 (Pb & Hr) 301, in paragraph Nos. 66, 67 and 68, while upholding the validity of Section 8-A of the Act, nevertheless referred to Rule 11-D of the Chandigarh (Sales of Sites and Building) Rules, 1960 (for short 'the Rules of 1960), which according to the Full Bench tampers the rigor and softens the strictness of resumption by making it possible to offer the same property to the original transferee on certain liberal terms.
2. It is not in dispute that the said provision which form one of the factors in upholding the constitutional validity of Section 8-A of the Act, was subsequently deleted w.e.f. 31.01.2007. Though the learned counsel for the respondents has relied upon a judgement of the Hon'ble Supreme Court in case Babu Singh Bains etc. vs. Union of India and others etc. 1996 HRR 511, but that judgement was rendered on 11.9.1996 when Rule 11-D existed on the statute. Infact while upholding the validity of Section 8-A of the Act, Hon'ble Supreme Court referred to merits of the dispute arising under Rule 11-D of the Rules.
3. Accordingly, in our view the judgement of the Hon'ble Supreme Court rendered at a time when Rule 11-D of the rules existed would not be of much CWP No.16634 of 2008 -3- assistance to the respondents. We are accordingly of the view that since the earlier judgement was delivered by a Full Bench, the constitutional validity of Section 8-A of the Act deserves to be heard by a Full Bench."
(2). The petitioners, as indicated by the reference order, assail Section 8-A of the Capital of Punjab (Development & Regulation) Act, 1952 (in short, 'the 1952 Act'), it being ultra vires the Constitution of India after the deletion of Rule 11-D of the Chandigarh (Sales of Sites & Building) Rules, 1960 (in short, 'the 1960 Rules') w.e.f. 31.01.2007. They also assail the deletion of Rule 11-D and seek directions for re- transfer of the resumed sites in their favour on the premise that the afore-stated Rule was in force when they applied for re-transfer of such sites.
(3). A brief resume of the facts of CWP Nos.16634, 16163, 20895 of 2008; 167 & 1416 of 2010, giving rise to this reference and which are being disposed of together, are also relevant at this stage. CWP No.16634 of 2008
(Dheera Singh vs. The Union Territory, Chandigarh Administration & Ors.) (4). Plot No.317, Industrial Area, Phase-I, Chandigarh was allotted to the petitioner's father late Harbans Singh on 17.07.1961. The industrial plot was found to have been misused for residential purposes and was resumed on 15.11.1979 after hearing the allottee CWP No.16634 of 2008 -4- and giving an opportunity to produce evidence. The allottee's appeal and revision were also dismissed on 11.04.1984 and 17.08.1989, respectively and he did not challenge these orders till he unfortunately passed away on 04.04.1993. The petitioner who inherited the estate of his father as per registered Will dated 30.03.1993, challenged these orders in CWP No.3783 of 2007 which was dismissed on 13.03.2007. It appears that the petitioner never applied for re-allotment of the resumed site under Rule 11-D of the 1960 Rules before 31.01.2007. The first application for re-allotment was submitted by the petitioner on 26.09.2007 (Annexure P4) which was rejected by a self-speaking order dated 25.06.2008 (Annexure P5) primarily on the plea that Rule 11-D was non-existent w.e.f. 31.01.2007. The petitioner now asserts that Section 8-A of the 1952 Act is unconstitutional especially after deletion of Rule 11-D. Alternatively, the petitioner claims that the resumed property be re- allotted to him.
CWP No.167 of 2010 (Meharawal Khewaji Trust, Faridkot vs. Chandigarh Admn. & Ors.) (5). The petitioner - Mehrawal Khewaji Trust is successor-in- interest of erstwhile Ruler of Faridkot State (Col. Sir Harinder Singh). A hotel site measuring 13198.77 sq.yards in Sector 17-D, Chandigarh was allotted to Col. Harinder Singh in an open auction held on CWP No.16634 of 2008 -5- 27.09.1970. The site was resumed on 26.02.1974 (Annexure P1) and after dismissal of appeal, revision and writ petition in the High Court, the resumption order got the final seal of approval when the Trust's Special Leave Petition to appeal was rejected on 31.03.1997. The petitioner-Trust thereafter moved an application for re-allotment of the resumed site. No decision was taken on its application, hence the petitioner-Trust approached this Court in Civil Revision No.5336 of 2004 wherein a direction was issued on 07.08.2006 to decide the petitioner's application for re-allotment within six months. The said application was turned down by the Chandigarh Administration on the plea that meanwhile Rule 11-D stood deleted w.e.f. 31.01.2007. The petitioner now questions Constitutionality of Section 8-A of the 1952 Act now that the protective umbrella of Rule 11-D has been taken away.
CWP No.1416 of 2010
(M/s. New Life General Finance & Investment Co. Ltd. vs. Chandigarh Administration & Ors.) (6). The petitioner-Company was allotted commercial site No.110-111 in Sector 8-C, Chandigarh in an auction held on 09.07.1995. It deposited 25% but failed to deposit the balance 75% of the premium amount in three equated annual instalments. The site was resumed and lease rights were cancelled vide an order dated 29.09.1987, against which the appeal and revision petition were CWP No.16634 of 2008 -6- dismissed on 19.07.1988 and 09.01.1991, respectively. The review application was also declined. The order reveals that the revisional authority gave sufficient opportunities to the allottee to write off its outstanding dues but it failed. The petitioner challenged these orders before this Court in CWP No.15609 of 2006 which was dismissed on 28.09.2006 though with liberty to take appropriate proceedings for re- transfer of the property. The petitioner instead went in SLP which was dismissed by the Supreme Court on 08.03.2007. Meanwhile, Rule 21-B of the Chandigarh Leasehold of Sites and Building Rules, 1973 was deleted w.e.f. 31.01.2007, hence the application for the re-transfer moved thereafter was rejected being untenable. The petitioner now challenges Section 8-A of the 1952 Act as well as deletion of Rule 21-B of the 1973 Rules.
CWP No.16163 of 2008
(Avtar Singh vs. Union Territory, Chandigarh & Ors.) (7). The petitioner was allotted commercial site bearing SCO No.196, Sector 7-C, Chandigarh in an auction held on 13.03.1988 on 99 years' leasehold basis. The petitioner did not pay 75% of the premium amount as per agreed instalments hence the allotment was cancelled and the site resumed vide order dated 05.06.1991. The petitioner's appeal was allowed by the Chief Administrator vide order dated 21.02.1995 permitting him to pay the due amount by 07.03.1995. The amount of forfeiture was also reduced from 10% to CWP No.16634 of 2008 -7- 2%. The petitioner, instead of depositing the admitted dues, preferred a revision petition which was dismissed on 06.06.1995. The review application was also dismissed. The petitioner approached this Court in CWP No.12006 of 1996 wherein also despite several opportunities, he failed to clear the outstanding dues and the writ petition was dismissed. The part-amount deposited by the petitioner was returned to him. The petitioner thereafter applied for re-transfer of the site on 10.02.2004 and in response he was intimated vide letter dated 08.03.2004 that the re-transfer was permissible only if the outstanding dues including the forfeited amount was paid under Rule 21-B of the 1973 Rules. The petitioner did not deposit the due amount and opted for 2nd round of litigation before the appellate and revisional authorities as well as this Court in CWP No.4607 of 2006 which was dismissed though with a liberty to apply for re-transfer of the plot in accordance with law by clearing all the outstanding dues at the first instance.
The petitioner thereafter moved an application on 19.05.2006 to 'know' the outstanding dues but his application was rejected on 04.06.2007 essentially on the plea that Rule 21-B of the 1973 Rules was no longer in existence. The petitioner again went in appeal which he lost before coming to this Court in this petition, questioning the afore-stated orders and seeking re-transfer of the site. CWP No.16634 of 2008 -8- CWP No.20895 of 2008 (Rattan Kaur & Ors. vs. Chandigarh Administration & Ors.) (8). The petitioners were allotted Quite Site No.14, Sector 35- A, Chandigarh on leasehold basis in an auction held on 25.02.1990. The petitioners did not deposit 75% of the premium amount due to which the allotment was cancelled on 20.07.1992. Their appeal and revision petition were dismissed. The petitioners came to this Court in CWP No.5864 of 1997 which was also dismissed on 27.08.1997 though with a liberty to apply for re-allotment of the site. Their SLP too was turned down. The petitioners though applied for re-transfer of the site on 24.05.1999 yet did not appear or come forward before the Estate Officer for years on end despite notices having been sent to them hence their application was rejected on 16.07.2003. They went in appeal but before its decision on 27.02.2008, Rule 21-B of the 1973 Rules was deleted vide notification dated 31.01.2007 and the appeal as well as subsequent revision petitions were turned down on that count only. While impugning these orders the petitioners seek re- transfer of the resumed site.
(9). The briefly stated facts unveil that residential or non- residential sites allotted to the petitioner(s) by Chandigarh Administration were 'resumed' exercising the powers under Section 8- A of the 1952 Act, for their failure to pay the consideration money or for breach of one or the other condition of allotment. The resumption CWP No.16634 of 2008 -9- orders have attained finality and the subsequent applications moved by the petitioners for re-allotment of the resumed sites have been rejected on the ground that Rule 11-D of the 1960 Rules and Rule 21- B of the 1973 Rules have since been deleted from the Rule Book. BRIEF HISTORY OF THE LEGISLATION:-
(10). The partition of the country in 1947 led to the division of Panjab Province whose capital Lahore fell in to the share of West Panjab (Pakistan). The first Prime Minister of independent India conceptualized the vision of setting up a new Capital city for the Punjab State. The idea was transformed into reality when the site was chosen and a new city known as 'Chandigarh' was planned out by the famous French Architect Monsieur Le Corbousier. While some of the important buildings, now known as the Marvels of Modern Architecture, were still under construction, the Capital of Punjab (Development & Regulation) Act, 1952 was legislated for the following Objects & Reasons:-
"The construction of the New Capital of Punjab at Chandigarh is in progress. It is considered necessary to vest the State Government with legal authority to regulate the sale of building sites and to promulgate building rules on the lines of Municipal Bye-laws so long as a properly constituted local CWP No.16634 of 2008 - 10 - body does not take over the administration of the city. The Capital of Punjab (Development & Regulation) Bill, 1952, seeks to carry out the above objects and to repeal the Capital of Punjab (Development and Regulation) Act, 1952, which is a President's Act and is due to expire in April, 1953. Vide Punjab Govt. Gazette Extraordinary, dated the 23rd July, 1952."
(11). The Legislature reinforced its will for the planned development of Chandigarh by enacting yet another supplementary legislation known as Punjab New Capital (Periphery) Control Act, 1952, with the following Objects & Reasons:-
"The Punjab Government are constructing a New Capital named "Chandigarh". The master plan providing for the future extension of the Capital will extend over a much greater area than the area acquired so far the construction of the first phase of the Capital. To ensure healthy and planned development of the new city it is necessary to prevent growth of slums and ramshackle construction on the land lying on the periphery of the new city. To achieve this object it is necessary to have legal CWP No.16634 of 2008 - 11 - authority to regulate the use of the said land for purposes other than the purposes for which it is used at present."
(12). The legislative policy to develop not only a planned New Capital City but also to prevent haphazard unregulated clusters on its periphery upto a distance of 5 miles, can be unequivocably foreseen from an integrated reading of these two contemporaneous Legislations.
(13). Section 3 of the 1952 Act empowers that "the Central Government may sell, lease or otherwise transfer, whether by auction, allotment or otherwise, any land or building belonging to the Government in Chandigarh on such terms and conditions as it may, subject to any rules that may be made under this Act, think fit to impose."
(14). It is relevant to mention here that earlier Section 9 of the 1952 Act empowered the Estate Officer to resume the site or building and forfeit the whole or part of consideration money paid by an allottee on the ground of non-payment of entire consideration money or the breach of any condition of transfer or of any Rule framed under the Act. Section 9, however, was declared violative of Articles 14 & 19(1)(f) of the Constitution by the Supreme Court in M/s. Jagdish Chand Radhey Shyam, appellant vs. the State of Punjab & Ors., CWP No.16634 of 2008 - 12 - respondents, (1972) 3 SCC 428, for there were no guidelines as to when the Government will resort to either of the two remedies as the Government could selectively discriminate in proceeding against one person in one manner and another person in another manner; and that Section 9 was a totally unreasonable restriction on the enjoyment of property.
(15). Section 9 was formally omitted by the Capital of Punjab (Development & Regulation) (Amendment) Act, 1973 and was substituted by Sections 8-A introduced retrospectively since 01.11.1966, the date when the Union Territory of Chandigarh came into being. Section 3 of the Act was also amended. The new provisions were intended to cure the defects viewed in Section 9 by the Supreme Court. One of the curative steps that the Legislature took was insertion of a provision for compliance of the principles of natural justice before the resumption of a property by the Estate Officer. (16). Section 8-A of the 1952 Act is the pivotal point of controversy and it reads as follows:-
"8-A Resumption and forfeiture for breach of conditions of transfer. -
(1) If any transferee has failed to pay the consideration money or any instalment thereof on account of the sale of any site or building or both, under section 3 or has committed a breach of any other conditions of such sale, the Estate Officer may, by CWP No.16634 of 2008 - 13 - notice in writing, call upon the transferee to show cause why an order of resumption of the site or building, or both, as the case may be, and forfeiture of the whole or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent of the total amount of the consideration money, interest and other dues payable in respect of the sale of the site or building or both should not be made. (2) After considering the cause, if any, shown by the transferee in pursuance of a notice under sub-section (1) and any evidence he may produce in support of the same and after giving him a reasonable opportunity of being heard in the matter, the Estate Officer may, for reasons to be recorded in writing make an order resuming the site or building or both, as the case may be, so sold and directing the forfeiture as provided in sub-section (1), of the whole or any part of the money paid in respect of such sale."
(17). Section 8-A obligates the Estate Officer to show cause a transferee who fails to pay the consideration money, full or in part, or has breached any condition of sale, as to why an order of resumption of the site or building, as the case may be, and forfeiture of the whole or in part of the money, be not passed. Its sub-section (2) assimilates the principle of audi alteram partem.
CWP No.16634 of 2008 - 14 -(18). An order of resumption of a site or building passed under Section 8-A is appealable and/or revisable under Section 10(1) & (4) which reads as under (relevant extracts only):-
"10. Appeals and revision. -
(1) Any person aggrieved by an order of the Estate Officer made under [sections 8 or 8A] may, within thirty days of the date of the communication to him of such order, prefer an appeal to the Chief Administrator in such form and manner as may be prescribed :
Provided that the Chief Administrator may entertain the appeal after the expiry of the said period of thirty days, if he is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.
(2) The Chief Administrator may, after hearing the appeal, confirm, vary, or reverse the order appealed from and may pass such orders as he deems fit.
(3) xxx xxx xxx xxx
xxx xxx xxx xxx
(4) Where a person is aggrieved by any order of the Chief Administrator, deciding a case under sub-
section (2) or sub-section (3), he may, within thirty days of the date of communication to him of such decision, make an application in writing to the Central Government for revision against the said decision and the Central Government may confirm, CWP No.16634 of 2008 - 15 - alter or rescind the decision of the Chief Administrator."
(19). Section 8 of the 1952 Act enables the Estate Officer to impose penalty not exceeding the due amount and recover the arrears of rent due and penalty in respect of a leasehold site or building. Section 13 provides a penalty of Rs.500/- with a further fine extendable to Rs.20/- for each corresponding day if a person fails to comply with the directions issued in respect of erection of a building under Section 4 or if he does not properly maintain the site or building despite a direction issued to this effect under Section 6 of the Act. Likewise, Section 15 of the 1952 Act prescribes penalty upto Rs.500/- for breach of the Rules including an additional fine upto Rs.20/- per day for a continuing contravention, without prejudice to the prosecution of such violators as well as forfeiture of the property or part thereof, within six months of the beginning of erection or re- erection of the building in violation of Rules.
(20). The power to make Rules for carrying out the purposes of 1952 Act is embodied in Section 22 and it says that:-
"22. Power to make rules. -
(1) The Central Government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may CWP No.16634 of 2008 - 16 - provide for all or any of the following matters, namely:-
(a) the terms and conditions on which any land or building may be transferred by the Central Government under this Act;
(b) the manner in which consideration money for any transfer may be paid;
(c) the rate of interest payable, and the procedure for payment of instalments, interest, fees, rents or other dues payable under this Act;
(d) the terms and conditions under which the transfer of any right in any site or building may be permitted;
(e) erection of any building or the use of any site;
(f) levy of fees or taxes under section 7;
(g) the terms and conditions for the breach of which any site or building may be resumed;
(h) the conditions with regard to the buildings to be erected on sites transferred under this Act ;
(i) the form of notice and the manner in which notices may be served;
(j) the form and manner in which appeals and application under this Act may be filed and the court fees leviable on such appeals and applications;
(k) the matters referred to in sub-section(2) of section 5;
(l) any other matter which has to be or may be prescribed."
(21). The power under Section 22 has been intermittently invoked to enact or amend various sets of Rules. The Chandigarh CWP No.16634 of 2008 - 17 - (Sale of Sites and Buildings) Rules, 1960 are also the creation of Section 22 of the 1952 Act. These Rules lay down the procedure to be followed for the auction and allotment of sites, their use, procedure in case of misuse, payment of instalments or time permissible for erection etc. Rule 11-D was added in these Rules vide Notification dated 04.10.1979 and it remained operative till its deletion on 31st January, 2007. Rule 11-D of the 1960 Rules (relevant extracts only) was to the following effect:-
"11-D. Retransfer of Site. - (1) Where a site has been resumed under section 8A of Act No. XXVII of 1952 for any reasons, the Estate Officer may on an application, retransfer the site to the outgoing transferee, on payment of an amount equal to 10 per cent of the premium originally payable for such property or one- third of the difference between the price originally paid and its value at the time when the application for transfer is made, whichever is more. However in the case of a person who is serving or who has served in the Armed Forces of the Union, the amount payable by him or his legal heir for the retransfer of a site shall be 10% of the price originally payable for such site or 5% of the difference between the price originally payable and its value at the time when application for transfer is made, which ever is more.
Provided that such transfer shall be permissible only if-CWP No.16634 of 2008 - 18 -
(i) where the site has been resumed on ground of misuser, the misuser has stopped;
(ii) where the site has been resumed for non-
payment of price, all outstanding dues including forfeiture have been paid;
(iii) where the site has been resumed for breach of any conditions of sale, the breach has been remedied and conditions fulfilled.
Notwithstanding anything contained in the proviso above, when the site has been resumed on ground of misuser or non-completion of the building on it within the stipulated period, the Estate Officer may allow the retransfer on the applicant agreeing to vacate or have the misuser vacated or the building completed as the case may be within such reasonable period as the Estate Officer may stipulate.
Explanation. -. xxx xxx xxx
(2) xxx xxx xxx xxx
(3) xxx xxx xxx xxx
(4) xxx xxx xxx xxx
(5) xxx xxx xxx xxx"
(22). Chandigarh Leasehold of Sites and Building Rules, 1973
(in short, 'the 1973 Rules') are also notified under Section 22 of the Act. Rule 21-B of these Rules added on 04.10.1979 was in pari materia to Rule 11-D of 1960 Rules and it has also been deleted with effect from the same date i.e. 31st January, 2007 when Rule 11-D of the 1960 Rules stood deleted. The only distinction between the two sets of Rules is that while 1960 Rules deal with the transfer of a CWP No.16634 of 2008 - 19 - building or site by way of sale or allotment on free-hold basis, the 1973 Rules regulate the leasehold properties.
BRIEF HISTORY OF 1st CHALLENGE TO SECTION 8-A (23). The constitutionality of Section 8-A of the 1952 Act was put to trial before a Full Bench of this Court in Ram Puri vs. Chief Commissioner, Chandigarh, AIR 1982 P&H 301 on the following grounds:-
(i) Section 8-A continued to suffer from the same vice as was the Section 9;
(ii) Section 8-A was hit by Article 19(1)(f) of the Constitution as the resumption of a property amounted to divestiture of ownership and possession without paying any compensation;
(iii) Section 8-A vested the Authority with such unguided and arbitrary powers that it was violative of the Fundamental Right to property guaranteed under Article 31 of the Constitution;
(iv) Alternatively, Section 8-A was applicable only to such transferees who for want of payment of total consideration had not perfected their title of ownership; and CWP No.16634 of 2008 - 20 -
(v) There could be no forfeiture of title or possessory rights after full payment of consideration money as the transferee became absolute owner of the property.
(24). This Court by majority repelled these contentions and held Section 8-A to be in conformity with Articles 14, 19(1)(f) & 31 of the Constitution of India.
(25). The issue of validity of Section 8-A was again raked up after a long silence in Babu Singh Bains etc. vs. Union of India & Ors. (1996) 6 SCC 565 which pertained to the misuse of a residential house by the allottee to run "Blue-Star Guest House", contrary to the terms and conditions of allotment. The site was resumed and the appeal/revision against that order were dismissed. The Chandigarh Administration then initiated eviction proceedings under the Public Premises Act, giving rise to yet another bout of litigation upto the final Court wherein the allottee was heard afresh on the merits of resumption order but no illegality having been found, the resumption order as well as the order(s) declining the allottee's prayer for condonation of delay in applying for re-allotment of the site under Rule 11-D, were upheld. Since the allottee attacked on the vires of Section 8-A of the 1952 Act and relied upon Rule 11-D for the re-
transfer of resumed site, both the provisions were considered at length CWP No.16634 of 2008 - 21 - by the Apex Court. Section 8-A was upheld on the anvil of Article 14 and the majority view in Ram Puri's case was also approved. (26). The Supreme Court in Babu Singh Bains further held that once the Statute occupied the field and gave power to resume the land or building subject to the conditions mentioned therein, the general principles of resumption and other principles remained no more relevant. Maganlal Chhagganlal Pvt. Ltd. vs. Municipal Corporation of Greater Bombay, (1974) 2 SCC 402 was relied upon to knock the bottom of the plea of constitutional invalidity of Section 8-A on the anvil of Article 14 when softer course under Section 15 was available and it was held that Section 8-A does not become invalid on that score. It was also laid down that after deletion of Section 9 procedural safeguards have been provided in Section 8-A and in view of having provided fair procedure, the said provision does not become arbitrary and violative of Article 14 of the Constitution. (27). The last plea raised by the allottee, pinning hope on Rule 11-D, was also rejected outrightly by the Apex Court in Babu Singh Bains and rather it questioned the very legality and propriety of this Rule saying that "It would be a constant sprout of corruption and abuse of Rule 11-D for diverse reasons which in the interest of smooth administration need to remove the irritant. However, we need not dwell upon it any further as it is not necessary for the purpose of CWP No.16634 of 2008 - 22 - deciding the question in this case. Suffice it to state that Rule 11-D is only an enabling provision to make an application. The Estate Officer has discretion to re-grant the land or building which stood already resumed and vested in the State. Of course, he cannot arbitrarily reject the petition; he has to give reasons in support thereof as contemplated in Rule 11-D itself."
(28). In Chandigarh Administration through the Estate Officer, Union Territory, Chandigarh vs. M/s. Johnson Paints and Varnish Co., (1996) 8 SCC 374 also the Hon'ble Supreme Court came very heavily on Rule 11-D and doubted the very bona fides behind introducing the said Rule. In that case an industrial plot was firstly resumed for non-payment of the due instalments but was restored on deposit of the due amount with penal interest. Thereafter the allottee kept the plot unused for speculative purposes hence it was resumed the second time for breach of allotment conditions. The allottee unsuccessfully challenged the second resumption order and then sought re-allotment under Rule 11-D. (29). The Supreme Court turned down the prayer for re-transfer of the resumed site in M/s. Johnson Paints and Varnish Co.'s case holding that "once the original allotment stands cancelled and the resumption becomes final, the allottee has no right in the allotted site. Rule 11-D deals with only discretionary power given to the Estate CWP No.16634 of 2008 - 23 - Officer. The only right the erstwhile outgoing transferee had was to make an application. On making the application, he has to satisfy the criteria laid down under the Rule. We doubt the very bona fides in introducing Rule 11-D to provide a back door entry from the lost rights. But on the facts in this case, it is not necessary to go into the wisdom of introducing Rule 11-D. Suffice it to state that it does not clothe him with any right to the allotment as of right. It being a discretionary benefit sought to be given to the outgoing transferee in the language of the rule, the outgoing transferee must, in fact and in reality, be the real, genuine and bona fide transferee and for him alone the benefit may be given for consideration under Rule 11." (30). The adverse remarks of the severest nature made against the very substratum of Rule 11-D also did not deter the Authorities to persist with this Rule and it took more than 10 years to see sense and delete Rule 11-D and Rule 21-B from the 1960 and 1973 Rules, respectively, w.e.f. 31.01.2007.
(31). It is equally significant to cite M/s. Teri Oat Estates Pvt. Ltd. vs. UT Chandigarh & Ors., (2004) 2 SCC 130, where a commercial site allotted on leasehold basis was resumed for non- payment of the consideration money. The instalments were not deposited despite many opportunities granted by the appellate and revisional authorities and the matter was taken before the Hon'ble CWP No.16634 of 2008 - 24 - Supreme Court. The constitutional validity of Section 8-A was expressly questioned in this case also and the Supreme Court after dwelling upon the vires of the 1952 Act upheld Section 8-A on the strength of Babu Singh Bain's case save as it applied the 'doctrine of Proportionality', keeping the facts and circumstances of the case in hand, in view as the appellant had deposited the entire consideration money under the orders of the Court and restored the site by imposing a penalty of Rs.15 lacs on the allottee. It was, however, observed that "there cannot be any doubt whatsoever that if the intention of the allottee is dishonest or with an ill motive and if the allottee does not make any payment in terms of the allotment or the statute with a dishonest view or any dishonest motive, then Section 8(A) can be taken recourse to."
(32). The principle of 'Proportionality' for restricting the power of forfeiture, only as a last resort was reiterated by the Supreme Court in Jagmohan Singh vs. State of Punjab & Ors. (2008) 7 SCC 38 also when it said that :-
"In Teri Oat Estates (P) Ltd. vs. U.T.,
Chandigarh & Ors. [(2004) 2 SCC 130], this
Court has taken notice of the fact that different orders were being passed by the High Court from time to time. The orders passed by the High Court CWP No.16634 of 2008 - 25 - have been upheld therein upon applying the doctrine of proportionality as contra-distinguished from Wednesbury Unreasonableness principle. [(See also Jitendra Kumar & Ors. vs. State of Haryana & Anr. [(2008) 2 SCC 161].
15. In Teri Oat (supra), it was opined that the power of forfeiture should be taken recourse to as a last resort and the action of the statutory authority is required to be judged on the touchstone of Article 14 of the Constitution of India..."
PETITIONERS' CASE:-
(33). The core contentions elucidated by counsel for the petitioners on the premise that the subject reference has opened a new vista to re-convulse even settled issues may be summarized as follows:-
(i) Section 8-A is unconstitutional and is hit by Article 19(1)(f) read with Article 31 of the Constitution - It was argued that constitutionality of Section 8-A can be tested on the touch-stone of Article 19(1)(f) and Article 31 of the Constitution as the Fundamental Rights guaranteed thereunder were enforceable when Section 8-A was enacted by Parliament vide Act No.XVII of 1973 (retrospectively from 01.11.1966). Since 'resumption' under CWP No.16634 of 2008 - 26 - Section 8-A absolutely divests the allottee of ownership and possessory rights without payment of any compensation, it derogated the Fundamental Right 'to acquire, hold and dispose of property' which remained guaranteed till June 20, 1979 when the Constitution (Forty-fourth) Amendment Act, 1978 was passed diluting the right to property from a 'Fundamental' right to the 'Constitutional' one. To substantiate the contention that a provision brought on a Statute Book before June 20, 1979 must also satisfy the test of Article 19(1)(f) and Article 31, reliance is placed on the decisions of the Apex Court in (i) Waman Rao & Ors. vs. Union of India, (1981) 2 SCC 362; (ii) State of Maharashtra vs. Kamal Sukumar Durgule, (1985) 1 SCC 234; (iii) Chairman, Railway Board vs. CR Rangadhamaiah, (1997) 6 SCC 623.
(ii) Section 8-A offends Article 300-A of the Constitution also - It was urged that 'Right to Property' is still a Constitutional right under Article 300-A of the Constitution hence no person can be "deprived of his property save by authority of law" which according to Hon'ble Supreme Court in KT Plantation Pvt. Ltd. vs. State of Karnataka, (2011) 9 SCC 1, means -
CWP No.16634 of 2008 - 27 -
"(a). Right to acquire, hold and dispose of property has
ceased to be a fundamental right under the
Constitution of India.
(b). Legislature can deprive a person of his property only
by authority of law.
(c). Right to acquire, hold and dispose of property is not a
basic feature of the Constitution, but only a
Constitutional right.
(d). Right to Property, since no more a fundamental right,
the jurisdiction of the Supreme Court under Article 32 cannot be generally invoked, aggrieved person has to approach the High Court under Article 226 of the Constitution."
It was emphasized that the principle of eminent domain must be read into Article 300-A to vouch for 'public purpose' as a pre- condition to deprive a person of his property and right to claim 'compensation', failing which the 'authority of law' shall subvert to police dominion as against the rule of law. Since Section 8-A does not qualify the twin test of 'public purpose' and payment of 'compensation' in lieu thereof that the resumption of property under the 1952 Act is directly in teeth of Article 300-A of the Constitution. Additional support was drawn from the decisions CWP No.16634 of 2008 - 28 - in (i) Jilubhai Nanbhai Khachar & Ors. vs. State of Gujarat & Anr. (1995) 1 Suppl. SCC 596; (ii) State of West Bengal & Ors. vs. Vishnunarayan & Associates Pvt. Ltd. & Anr. (2002) 4 SCC 134; and (iii) Rajiv Sarin vs. State of Uttrakhand (2011) 8 SCC 708.
(iii) Section 8-A runs contrary to the basic legislative scheme and object of the 1952 Act itself - It was submitted that the legislative object behind enacting 1952 Act was to vest the State Government (now UT Administration) with a legal authority to regulate the sale of building sites and to promulgate building rules in the lines of Municipal Byelaws. The Act does not envisage unjust enrichment of the Administration through resumption and re-sale of properties. Prior to insertion of Section 8-A there used to be three remedies available under the Act to deal with the default against the non-payment of allotment price i.e. (i) Section 3(3) created a charge over the allotted property till the due instalments were paid; (ii) the due amount was recoverable as arrears of land revenue under Section 8; and lastly (iii) the site could be resumed under Section
9. Similarly, in case of misuse of the site or violation of Building Byelaws, (i) penalties could be imposed under Section 13, or (ii) the building could be ordered to be altered or demolished by CWP No.16634 of 2008 - 29 - following the procedure laid down in Section 15 before inflicting the final blow of resumption. Section 8-A though was intended to cure the legal defects found in Section 9 in M/s. Jagdish Chand Radhey Shyam's case (supra), however, it has taken away more than one alternative remedy available earlier for the recovery of due instalments, emboldening the Estate Officer to resume a site outrightly for the non-payment of such dues. Power of 'Resumption' is said to have over-shadowed and hidden away the softer penal alternatives and thus the legislative object of 1952 Act has been shrunk as a measure to confiscate properties instead of regulating them to keep Chandigarh as a planned city as envisaged under Section 8-A is arraigned to have rendered Section 15 redundant which no penalty for breach of any rule is leviable after expiry of six months' period from the date of erection or re-erection of a building in contravention of the building Rules as held by a Full Bench of this Court in Bakshish Kaur Saini vs. UT Chandigarh, AIR 1994 P&H 1 (FB) and the Estate Officer would deliberately allow the said period to expire and then invoke Section 8-A for the same misdemeanour so as to impose the harshest penalty in comparison to the softer action of Rs.500/- plus Rs.20/- per day for continuous breach permissible under Section 15 of the Act. CWP No.16634 of 2008 - 30 -
(iv) Section 8-A is wholly unjust, unreasonable and is violative of Article 14 as well as the human rights - It was reiterated that every action, whether legislative or executive, affecting one's fundamental, constitutional, civil or human rights must satisfy the test of it being just, reasonable, fair and non-discriminatory to retain constitutionality within the circumference of Article 14 or other provisions of our Constitution. The petitioners on this similitude firstly urged that robbing off a person of his property without paying just compensation through legislative means like Section 8-A is per se arbitrary and breeds inequality. Secondly, the very object of inserting Section 8-A was to wipe out the discriminatory consequences noticed by the Supreme Court in Section 9 in M/s.
Jagdish Chand Radhey Shyam's case but the true understanding of import and impact of Section 8-A leaves no room to doubt that the very cure has increased the ailment of discrimination manifold as the Estate Officer may in a given case take recourse to Section 15 and impose a fine only but may choose to sleep over for six months and then resume the property for an identical violation of the Building Byelaws. There are no inbuilt safeguards or guidelines in the Act nor there is any embargo that Section 8-A cannot be invoked unless the defaulter CWP No.16634 of 2008 - 31 - has been firstly dealt with under Section 15 or other provisions containing minor penalties. Section 8-A is alleged to have invested more arbitrary and discriminatory powers in the Estate Officer to act as per his whims and fancies. It was argued that the majority in Ram Puri misconstrued the Supreme Court decision in Maganlal Chhagganlal Pvt. Ltd. (supra) though the latter surely held that where a Statute providing for a more drastic procedure different from the ordinary procedure, covers the whole field which is covered by the ordinary procedure also without any guidelines as to the class of cases in which either procedure is to be resorted to, the Statute will be hit by Article 14. The petitioners also cited AP State Financial Corporation vs. M/s. GAR Re-rolling Mills & Anr., (1994) 2 SCC 647, to say that when two remedies are available for the same relief, the party to whom the said remedies are available has the option to elect either of them but that doctrine would not apply to cases where the ambit and scope of the two remedies is essentially different. Reference was made to yet another decision in State of Maharashtra vs. Mrs. Kamal P.Kumar, (1985) 1 SCC 234, wherein the definition of phrase "vacant land" coupled with the discretion conferred upon the competent authority to declare a land as a vacant land without laying down CWP No.16634 of 2008 - 32 - any guidelines to control that discretion, were held to be violative of Articles 14 and 19(1)(f) of the Constitution. The decisions in (i) Krishna vs. State of UP, (2007) 15 SCC 320;
(ii) Karnataka State Financial Corporation vs. Narasimahaiah, (2008) 5 SCC 176; and (iii) Shantilal Walchand Kothari vs. Smt. Shantabhai Purushottam Deshmukh, AIR 1984 Bom 306 were also quoted in aid.
(v) The effect of Section 8-A is total divestiture of title and a confiscatory provision like this should be strictly construed as title in a property cannot be taken away by implication - 'Resumption', in fact embodies all the ingredients of penalty. The power to confiscate and consequential forfeiture of right or interest in a property is thus sore and severe. Statutes conferring such powers must be strictly interpreted as the expropriatory power cannot be inferred by implication. The confiscatory power of 'resumption', therefore, is subject to other overriding rights, like to claim 'compensation' at least equivalent to the value fetched by the resumed property on afresh auctioning. Such like rights are recognized even in the case of a third party like Bank if it has a charge over the resumed property. Right to seek 'compensation' therefore must be read into Section 8-A through purposive CWP No.16634 of 2008 - 33 - construction so as to save it from the rigors of Articles 19(1)(f), 31 & 300-A of the Constitution. The decision in O.Konavalov vs. Commander, Coast Guard Region, (2006) 4 SCC 620, dealing with confiscatory provisions contained in the Customs Act, 1962 has been relied upon in this regard.
(vi) Section 8-A in its present form is susceptible to being misused by the Estate Officer, unless qualified as the last resort after exhausting other penal provisions under the 1952 Act - The impugned provision vests the authorities under the Act with unbridled, uncontrolled and unguided powers to resume a building even for minor misuse of a part of it. The power to resume an entire property ought not to be exercised unless the authority has exhausted all other penal remedies and the allottee is incorrigible to a degree that the other penalties have been rendered ineffective. In the absence of mandatory guidelines or a policy of self-restraint for the authorities, resumption has become the rule of the day while other penalties are an exception. Rule 11-D used to salvage the situation as a tool of checks and balances viz. Section 8-A but after its deletion the resumption power has become a Draconian piece of legislation.
CWP No.16634 of 2008 - 34 -
(vii) The 1952 Act is a transitory legislation and has become obsolete after achieving its purpose and fulfillment of its objectives - The Reasons and Objects behind enactment of 1952 Act were to develop Chandigarh as a planned Capital city of Punjab State and its provisions were to remain operative till the occupation of the field by an elected local body under the Municipal laws. Chandigarh is now a fully developed city. Parliament has already extended the Punjab Municipal Corporation Act, 1976 to the Union Territory of Chandigarh enacting the Punjab Municipal Corporation Law (Extension to Chandigarh) Act, 1994 (in short, 'the 1994 Act'). In view of enunciation in Rameshwar Prasad & Ors. vs. State of UP & Ors. (1983) 2 SCC 195 the Statement of Objects and Reasons of an Act have to be read with the Act itself hence, the 1952 Act has lost its sanctity and has become obsolete. To support the contention that a legislative Act can be declared obsolete once it has achieved the purpose and fulfilled the objectives, reliance is placed on a decision of the Hon'ble Supreme Court in Satyawati Sharma (dead) by LRs vs. Union of India & Ors. (2008) 5 SCC 287. Articles 243-P & 243-Q have also been ascribed to canvass that in view of phrase "shall" mentioned therein, setting up a Municipality is the CWP No.16634 of 2008 - 35 - constitutional mandate which has since been given effect in the UT Chandigarh, leaving no other field to operate for the 1952 Act.
(viii) The decisions of the Hon'ble Supreme Court in M/s. Johnson Paints and Varnish Co. and Babu Singh Bains cases are obiter dicta and sub silentio and have no binding force - The observations made by the Hon'ble Supreme Court in para 6 of its order in M/s. Johnson Paints and Varnish Co.'s case (supra) that "Rule 11-D deals with only discretionary power given to the Estate Officer. The only right the erstwhile outgoing transferee had was to make an application... We doubt the very bona fide in introducing Rule 11-D to provide a back-door entry from the lost rights", or that "it is not necessary to go into the wisdom of introducing Rule 11-D. Suffice it to state that it does not clothe him with any right to the allotment as to right" and that to avail the benefit of Rule 11-D, "the outgoing transferee must, in fact and in reality, be the real, genuine and bona fide transferee" were elaborate to mean that Rule 11-D was an 'enabling provision' vesting discretionary powers in the Estate Officer to re-allot the land or the building which already stood resumed. The inconsequential observations doubting the bona fide in introducing Rule 11-D to provide a back-door entry CWP No.16634 of 2008 - 36 - from the lost rights, the petitioners claimed, are indeed obiter dicta as neither validity of Rule 11-D was an issue raised nor the Supreme Court expressed any final view in relation thereto. Similarly, para 16 in Babu Singh Bain's case essentially follows para 6 in M/s. Johnson Paints and Varnish Co. and the observation that "it would be a constant sprout of corruption and abuse of Rule 11-D for diverse reasons which in the interest of smooth administration need to remove the irritant", too was obiter dicta as in this very paragraph it was held that discretionary power under Rule 11-D to re-grant the land or building which stood already resumed and vested in the State, cannot be arbitrarily exercised while rejecting the petition and the Estate Officer "has to give reasons in support thereof as contemplated in Rule 11-D itself". The later observations are said to have impliedly approved that Rule 11-D could be resorted to for fair, valid and just reasons. The two set of observations when juxtaposed are reconcilable to hold that power under Rule 11-D can be sparingly used, if need be. The Hon'ble Supreme Court thus did not intend nor did it completely erase Rule 11-D from the Rule Book. Contrarily, in Jyotsna Kohli vs. Union Territory of Chandigarh & Ors., (2004) 12 SCC 516, the Supreme Court recognised the right to seek re-allotment under CWP No.16634 of 2008 - 37 - Rule 11-D and permitted the allottee to take its benefit even while upholding the resumption order passed under Section 8-A. Davinder Singh Pannu vs. Chandigarh Administration, (2003) 2 PLJ 210, is yet another case where the Estate Officer was directed to favourably consider application for re- transfer/re-allotment. A series of reported judgments of this Court wherein the resumption orders were upheld but right to seek re-allotment was protected, have also been referred to. To say that a 'judgement' of the Supreme Court has to be read in the context of questions which arose for consideration in that case and an obiter dictum is distinguished from ratio decidendi and only the latter carries binding force within the meaning of Article 141 of the Constitution, the petitioners relied upon (i) M/s. Raval & Co. vs. KG Ramachandran, (1974) 1 SCC 424;
(ii) State of UP & Anr. vs. Synthetics & Chemicals Ltd. & Anr. (1991) 4 SCC 139; (iii) M/s.A-One Granites vs. State of UP & Ors., (2001) 3 SCC 537; (iv) Director of Settlements, AP & Ors. vs. MR Apparao & Anr., (2002) 4 SCC 638; (v) Chandramohan Pandurang Kajbaje vs. State of Maharashtra & Ors., (2008) 1 SCR 187; (vi) Arun Aggarwal vs. State of Madhya Pradesh, (2011) 4 RCR (Crl.)137. CWP No.16634 of 2008 - 38 -
(ix) The deletion of Rule 11-D has re-fuelled unguided, unbridled and arbitrary powers exercisable under Section 8-A - It was argued that Rule 11-D protected Section 8-A against unconstitutionality for it enabled an allottee to seek re-allotment of the resumed property on payment of prevalent market rate. Rule 11-D, according to the petitioners, was a device to impose highly exorbitant penalty on the allottee beyond the scope of Section 15 of the 1952 Act as the resumed site was allowed to rest in his hands only on payment of the 'current market price'. The Rule successfully achieved the avowed object of preventing violations or misuse of a site through the deterrent effect of dissipated penalty. Rule 11-D thus was subservient to public interest and had no element of 'discretion' as was erroneously represented before the Supreme Court in M/s.Johnson Paints and Varnish Co. or Babu Singh Bains cases. While the Estate Officer had no discretion to refuse re- transfer of the resumed site if the previous allottee was ready and willing to abide by the fresh terms and conditions of allotment including payment of current market price, the allottee too had no choice but to accept re-transfer on the terms and conditions thrust on him. Rule 11-D successfully stood to the test of time and held the field for about 28 years before its CWP No.16634 of 2008 - 39 - sudden deletion without any rhyme or reason. The Chandigarh Administration has not come up with any just explanation for the deletion of Rule 11-D except to take shelter behind the adverse comments made on its validity by the Supreme Court more than a decade ago. It is also the petitioners' case that Section 8-A would not have survived in Ram Puri's case but for the fact that Rule 11-D came to its rescue.
(x) Rule 11-D cannot be deleted retrospectively to take away the benefits accrued in favour of the allottees to whom sites were allotted before 31.01.2007 or those who had applied for re-transfer of resumed sites before its deletion - One of the principal contention is that the existing rights under a Statute ought to be determined according to its provisions prevailing and applicable at the time when such rights accrued. The amendment or repeal of the Statute cannot take away the rights which had accrued before such amendment or repeal. The same principle governs the subordinate legislation as well. It was argued that the benefit of Rule 11-D or Rule 21-B, as the case may be, shall remain available to those allottees to whom sites were allotted before 31st January, 2007 as 'right to re-allotment' shall be deemed to be one of the terms and conditions of their allotments. CWP No.16634 of 2008 - 40 - Alternatively, the petitioners are said to have applied for re- transfer of the resumed sites under Rule 11-D or Rule 21-B before these Rules were omitted from the Rule Book on 31st January, 2007, their applications deserve to be entertained and decided on the assumption that the afore-stated Rules were still in force. The effect of deletion thus cannot be applied retrospectively to take away the right to seek re-transfer accrued in favour of the applicants when the Rule(s) were operative. It is explained in CWP No.167 of 2010 that the petitioner-Trust made an application under Rule 11-D within six months of the resumption proceedings attaining finality i.e. on 16th October, 1997 but its application was kept pending for 9 long years compelling it to obtain a direction from this Court for a time- bound decision which was to expire on 6th February, 2007 and a few days before that Rule 11-D was deleted to defeat the Trust's legitimate right under the existing Rule. The plea that a legislation, subordinate or otherwise, cannot be brought into force retrospectively to take away a vested right or adversely affect such right, has been aided with catena of decisions including (i) State of Gujarat & Anr. vs. Raman Lal Keshav Lal Soni & Ors. (1983) 2 SCC 33; (ii) Mahabir Vegetable Oils Pvt. Ltd. vs. State of Haryana & Ors., (2006) 3 SCC CWP No.16634 of 2008 - 41 - 620; (iii) Union of India & Ors. vs. Asian Food Industries, (2006) 13 SCC 542; (iv) Brig. Harbans Singh vs. Union Territory, 1989 (2) RCR (R) 400; (v) Ajmer Singh vs. Union of India, 1996(3) RCR (C) 126; (vi) Bharat Rattan Dr. Baba Sahib Bhim Rao Ambedkar Cooperative Transport Society Ltd., Narnaund vs. State of Haryana, 2005(2) RCR (C) 243;
(vii) M/s.Kumar Brothers (Chemists) Pvt. Ltd. vs. Union Territory of Chandigarh & Ors., 2008(3) RCR (C) 4; (viii) Harbinder Singh Dhillon & Anr. vs. Union Territory, Chandigarh & Ors. 2008(1) LAR 26 (ix) Subhash Chander & Anr. vs. HUDA & Anr., 2009(2) RCR (C) 164; (x) Escorts Ltd. vs. Union of India & Anr., 2010(2) RCR (C) 60.
(xi) The power to cancel leasehold rights or to resume a site is directly in conflict with provisions of the Indian Contract Act as it amounts to annulling a concluded contract - The petitioners claimed that offer of allotment, acceptance by the allottee of its terms and conditions and the deposit of allotment price amounts to a concluded contract within the meaning of Chapter-I of the Indian Contract Act, 1872 which cannot be rescinded unless held to be a voidable contract. It was also argued that even if it were to be a case of breach of contract, there lies a remedy with the Administration CWP No.16634 of 2008 - 42 - to seek compensation as per Section 73 of the Indian Contract Act rather than resuming the site or building through confiscatory power.
(xii) The majority view in Ram Puri does not lay down correct law and calls for re-consideration - As a corollary to and cumulative effect of the multi-dimensional contentions noticed above, counsel for the petitioners very passionately discoursed that the majority view in Ram Puri has stumbling legal foundations, hence the core question wheeling around the Constitutional sustainability of the power of resumption without payment of compensation conferred by Section 8-A requires serious re-consideration by this larger Bench.
RESPONDENT'S COUNTER:-
(34). The Senior Standing Counsel for the UT Administration at the outset raised a preliminary objection against the enlargement of the scope of reference, reminding us of the illiberal issue sent for our consideration vide order dated 16.11.2010 namely, the effect of deletion of Rule 11-D on the Constitutionality of Section 8-A. He maintained that the short question raised in the reference order effectively finds its answer in the majority view in Ram Puri's case as well as in the decision of the Hon'ble Supreme Court in Babu CWP No.16634 of 2008 - 43 - Singh Bains and M/s. Teri Oat Estates Pvt. Ltd. and if we were to be convinced that deletion of Rule 11-D did affect the Constitutionality of Section 8-A, the matter eventually would have to be referred to a five-Judges' Bench as Ram Puri was decided by a Full Bench comprising three-Judges.
(35). Mr. Kaushal divided the question emanating from the reference order into two parts i.e. (i) whether Section 8-A can withhold the test of Constitutionality on its own? and (ii) whether Section 8-A was valid for all these years as it had Rule 11-D to support it? He maintained that if the sanction of resumption of sites and buildings including divestiture of title within its sweep made available in the hands of the authorities is held to be just and in public interest, the petitioners' abortive attempt for revival of the concluded proceedings by raising various other issues would not arise for our consideration. (36). We were taken to the decisions in Ram Puri and Babu Singh Bains in extenso to substantiate the points that:-
(i) Section 8-A was upheld as it has inbuilt safeguards and the arbitrariness brought into fore by Section 9 was cured while enacting Section 8-A.
(ii) The Constitutionality of Section 8-A was tested on the anvil of Articles 14, 19(1)(f) and 31 of the Constitution and it was held that the new provision violated none. CWP No.16634 of 2008 - 44 -
(iii) The decision in Ram Puri (para 86) consciously noticed that resumption leads to divestiture of title but upheld it as an ultimate civil sanction in the armoury of the Authorities to effectuate the twin purpose of the 1952 Act;
(iv) The questions that Section 8-A ultra vires fundamental guarantees contained in our Constitution or is de hors of the rule of law, were raised and negated by the highest Court of the land in Babu Singh Bains without the aid and assistance of Rule 11-D;
(v) The Supreme Court in Babu Singh Bains case not only approved the validity of Section 8-A, but also nearly struck down Rule 11-D, it being full of arbitrary and improper discretionary powers;
(vi) The Full Bench in Ram Puri has nowhere said, not even impliedly, that Rule 11-D was the soul or breath of Section 8-A;
(vii) There was only a passing reference to Rule 11-D in Ram Puri after rejection of the contentions founded upon Articles 14, 19(1)(f) or 31 of the Constitution;
(viii) The reasons given by Full Bench in Ram Puri while upholding Section 8-A have got the seal of approval from the Hon'ble Supreme Court in Babu Singh Bains and CWP No.16634 of 2008 - 45 - again in M/s. Teri Oat Estates Pvt. Ltd. case hence it is impermissible to re-open a settled issue;
(ix) Section 8-A passed the litmus test of reasonableness when the Full Bench held that the power of resumption deserves to be vested in larger public interest though it could be the last resort only.
(x) The provisions regarding opportunity of being heard and forfeiture of the consideration money not exceeding 10% were found to be the golden rules of audi alteram partem.
(xi) The Full Bench further held that the right to property though was a Fundamental Right when Section 8-A was enacted but the rights under Article 19(1)(f) read with Article 31 were not absolute and an individual could be deprived of such rights when those are in conflict with public interest.
(37). Mr. Kaushal also retorted to those contentions which were not raised by the writ-petitioners in Ram Puri or Babu Singh Bains and maintained that even the new challenges mounted on Section 8-A merit rejection. He urged that Section 9 was struck down in M/s.
Jagdish Chand Radhey Shyam for want of guidelines in the Act as the Government could act discriminatorily by taking lenient action against one defaulter and a harsh one of resumption against the CWP No.16634 of 2008 - 46 - other. The discrimination so perceived in M/s. Jagdish Chand Radhey Shyam's case was later disapproved by the Constitution Bench in Maganlal Chhagganlal [P] Ltd. laying down that where a Statute provides for more drastic procedure different from that of the ordinary procedure without any guidelines as to the class of cases in which either procedure is to be resorted to, the Statute though will be hit by Article 14 yet the provision for appeal may cure the defect. Nonetheless, the Legislature cured the pointed defects while inserting Section 8-A which possesses inbuilt guarantees and safeguards to (i) ensure a reasonable opportunity to show cause against the proposed resumption; (ii) restriction on forfeiture beyond 10% of the total amount; (iii) the obligation on the Estate Officer to give reasons in support of his conclusion after giving opportunity to lead evidence; and (iv) the statutory remedy of appeal and revision under which the resumption order can be 'varied', 'reversed', 'altered' or 'rescinded'. (38). The contention that Section 8-A is violative of Articles 14, 19(1)(f) or 31 of the Constitution was refuted with a pointed reference to previous decisions by the Full Bench of this Court in Ram Puri and later on by the Supreme Court in the Babu Singh Bains case, where Section 8-A, on identical grounds, was challenged. He argued with reference to Article 31 as it existed before 44th Amendment to the Constitution, that no meaningful contention of its violation was raised CWP No.16634 of 2008 - 47 - by the aggrieved allottees in the above-cited two decisions nor did they have now been able to establish their right to seek compensation which could arise only in a case of 'acquisition' of property. The civil sanction of 'resumption', on the other hand, is a somewhat punitive action taken for violation of building byelaws or breach of terms and conditions of allotment. It was maintained that if Section 8-A did not violate Article 31, it could not on the same analogy delict Article 300-A also as the deprivation of an allottee of his property due to 'resumption' is by the authority of law on a proven charge under the 1952 Act which in no circumstances amounts to taking away one's property through police power. It was clarified that since the 'resumption' power can be invoked as a last resort only when the other punitive actions have failed to deter the violators, it is neither unjust or unreasonable nor does it violate anyone's human rights. It was vehemently argued that an allottee who calumniously violates and breaches the regulatory laws applied uniformly in the UT Chandigarh and is relentless to deface the very legislative objects of the 1952 Act, cannot cry hoarse for protection of his fundamental or human rights for which he must give equal respect to the 'duties' tied with such rights.
(39). Counsel for the respondents also denied that Section 8-A or for that matter the 1952 Act as a complete Code violates Article 14 CWP No.16634 of 2008 - 48 - of the Constitution. According to him, Section 8-A should be seen not in isolation but as a part of the composite legislative scheme to find out whether it satisfies the test of reasonableness. Reliance was placed on (i) Jyoti Pershad vs. The Administrator for the Union Territory Of Delhi, AIR 1961 SC 1602; and (ii) Hari Shankar Bagla vs. State of Madhya Pradesh, AIR 1954 SC 465, to urge that when the Legislature lays down the policy and indicates the rule or the line of action which should serve as a guidance to the authorities and where such guidance is expressed in the statutory provision conferring the power, no question of violation of Article 14 can arise.
(40). It was disputed that 1952 Act has become obsolete after the Punjab Municipal Corporation Law (Extension to Chandigarh) Act, 1994 came into force. Pointed reference was made to Section 424- A of the 1994 Act which expressly states that "notwithstanding anything contained in this Act, the provisions of the Capital of Punjab (Development and Regulation) Act, 1952 (Punjab Act No.XXVII of 1952) and of the Punjab New Capital (Periphery) Control Act, 1952 (Punjab Act No.1 of 1952) and the rules, regulations, bye-laws, notifications, orders, scheme, form or notice made thereunder shall continue to be applicable in relation to the development and regulation of the Union Territory of Chandigarh as immediately CWP No.16634 of 2008 - 49 - before the commencement of the Punjab Municipal Corporation Law (Extension to Chandigarh) Act, 1994". It has thus never been the intention of the Legislature that the 1952 Act should cease to operate after enforcement of the Municipal Laws. It is pointed out that Sections 226, 275, 280, 312, 343, 346 of the Punjab Municipal Corporation Act dealing with public streets, building scheme, hygienic system, restrictions on use of premises etc. have also been made inapplicable to UT Chandigarh to keep the enforceability of 1952 Act intact.
(41). The petitioners' plea that 1952 Act was transitory in nature or has become obsolete after achieving its purpose or fulfillment of objectives was also refuted saying that Section 8-A needs to be in operation for the consistently regulated and planned development and should Section 8-A be deleted the very object of setting up Chandigarh as a planned city shall fail. Section 8-A is the most effective armoury in the hands of the authorities to rein in the haphazard growth therefore the said provision needs to be perpetually co-terminus with Chandigarh's present status. It is pointed out that 'development' is a dynamic and not static process and if Section 8-A is omitted from the Statute Book or declared redundant at this stage then the efforts put in by the Administration to develop Chandigarh CWP No.16634 of 2008 - 50 - in a concerted and well devised manner since its very inception would be an exercise in futility.
(42). Mr. Kaushal while concluding his submissions did not forget to remind even at the cost of repetition that the scope of reference may not be broadened as the only question to be re- determined by this larger Bench pertains to the constitutional validity of Section 8-A of the 1952 Act after the deletion of Rule 11-D from the Statute Book which, according to majority in Ram Puri, "tampers the rigour and softens the strictness of resumption by making it possible to offer the same property to the original transferee on certain liberal terms...".
REASONS TO UPHOLD SECTION 8-A IN RAM PURI:-
(43). The conventional recourse for us would be to dissect the majority view in Ram Puri or the decision of the Hon'ble Supreme Court in Babu Singh Bains so as to find out whether the Section 8-A was upheld by drawing any implied or express aid and effect of Rule 11-D or Section 8-A was declared intra vires to the Constitution de hors of Rule 11-D? The answer to these questions by all means will also set at rest those contentious issues which were duly considered in Ram Puri and Babu Singh Bains cases but have been re-argued before us in a different flavour.CWP No.16634 of 2008 - 51 -
(44). It would, therefore, be appropriate at this stage to cull out the following reasons that weighed with the majority in Ram Puri to uphold Section 8-A:-
(i) "Now apart from the above the subsequent amendments introduced in Sections 3 and 8 as also the deletion of Section 9 altogether and its substitution by Section 8-A of the Act was designed to and has undoubtedly cured the infirmities which their Lordships had discerned in the previous provisions in Jagdish Chand Radhey Shyam's case (AIR 1972 SC 2587). By these legislative changes the charge on the transferred site has been abolished and similarly the clog on the transfer to the third party stands removed."
(ii) "Further there are now in-built guarantees and safeguards provided in Section 8-A itself by ensuring a reasonable opportunity to show cause against any proposed resumption or forfeiture."
(iii) "A further limitation that forfeiture in no case shall exceed 10 per cent of the total amount of consideration money has been itself laid down therein."CWP No.16634 of 2008 - 52 -
(iv) "The Estate Officer is obliged to record his reasons after giving adequate opportunity including the right to lead evidence to the transferee before passing an order adverse to his interest."
(v) "Further the statute and the rules thereunder provide for an appeal and revision against such orders.
Therefore it is now vain to contend that Section 8-A suffers from the vice of discrimination or in any way violates the equality clause under Article 14 of the Constitution."
(vi) "At the very threshold one has to remind oneself that the fundamental right under Article 19(1)(f) to acquire, hold and dispose of property is not an absolute right. It can be hedged in by the imposition of reasonable restrictions on its exercise in the interest of general public. Apart from this express limitation imposed by the Constitution itself, binding precedents of the Final Court have authoritatively highlighted that in this context considerations of larger, social and public purpose are germane to the construction of this Article."
CWP No.16634 of 2008 - 53 -
(vii) "Now it seems plain from the ratio of Jyoti Parshad's case (AIR 1961 SC 1602) (supra) that the challenge to the constitutionality of a statute on the anvil of Article 19(1)(f) is not merely to be judged from the particular provisions of the section alone. It is permissible and indeed desirable for the Court to take judicial notice of the facts which led to the enactment of the statute and the avowed objects and reasons thereof. Again the preamble to the Act may provide a clue to its interpretation. Further the provisions of the impugned section along with the other supplementary provisions of the Act as also the statutory rules made thereunder, have all to be viewed as a whole for testing its constitutionality."
(viii) "The larger purpose of the planned development and regulation of the new capital city, as spelled out in the preamble of the Act, is the fixed Pole Star to which the ultimate exercise of the power of resumption under Section 8-A is hitched. What deserves highlighting herein is that this power of resumption under Section 8-A is merely a discretionary and an enabling power. The statute CWP No.16634 of 2008 - 54 - does not lay down any mandate that it must necessarily be exercised in a particular situation.
(ix) "The word used in both the sub-sections is 'may' and not 'shall'..." "...To put it in plain language it is not mandatory for the authority to order resumption, but only in extreme cases it enables it to do so when the other powers and sanctions to enforce the purpose of the Act have failed, or in the circumstances it is the only remedial power which can be applied. Therefore, it is farcical and imaginary to assume that the authority would necessarily use this power arbitrarily and whimsically and that they will use this hammer to swat a fly."
(x) "Reference must also be made to the provisions of Sections 4, 5, 6, 13 and 15 of the Act, which provide a variegated armoury of sanctions and penalties against the violation of the Act, rules or the conditions of allotment. It seems to be rather writ large in the statute itself that normally resort would be made to these provisions before applying the ultimate sanction spelled out in Section 8-A."
CWP No.16634 of 2008 - 55 -
(xi) "In the last analysis even if an order of resumption has been made, Rule 11-D which has been recently added to the rules must be adverted to which is in the following terms :-
"11-D. (1) Where a site has been resumed under Section 8-A of Art No. XXVII of 1952 for any reasons, the Estate Officer may on an application, retransfer the site to the outgoing transferee, on payment of an amount equal to 10 per cent of the premium originally payable for such property or one-third of the difference between the price paid and its value at the time when the application for transfer is made whichever is more:
xx xx xx."
It is obvious that this rule tampers the rigour and softens the strictness of resumption by making it possible to offer the same property to the original transferee on certain liberal terms."
(xii) "It is well-settled that the taint of unconstitutionality does not attach to a provision of law merely because there may be remote possibilities of the abuse of power conferred thereby. In such a situation it is only the arbitrary or the wrongful CWP No.16634 of 2008 - 56 - exercise of the power which can be struck down but not the statute itself."
(xiii)"In conclude, in the larger conspectus of the purposes of the Act itself, its preamble; the specific provisions of Section 8-A; the setting in which it is placed along with the supplementary sections of the Act and the rules framed thereunder; it has to be held that the enabling power of resumption conferred thereby is only a reasonable restriction on the fundamental right to hold, acquire and dispose of property and is, therefore, in no way violative of Article 19(1)(f)."
(xiv) "The provisions of S.8-A give not the least inkling of any distinction between transferees who have paid the whole of the consideration money due and those who have as yet to pay some part of the consideration money or the instalments and other dues thereon. The power of resumption thereunder as analysed by me earlier applies uniformly to all transferees in the happening of the three preconditions referred to in para 30 above. Neither on principle nor on the language of S.8-A is it possible to draw any distinction betwixt transferees who have paid the full CWP No.16634 of 2008 - 57 - consideration money and those against whom some amounts are lawfully outstanding in accordance with the contract."
(xv) "The anomalous results that flow therefrom have already been noticed and it is hardly any satisfaction to hold that the legislature should now intervene to remedy the mischief. In view of the exhaustive discussion in the earlier part of this judgement this contention of the learned counsel for the petitioner is also to be rejected."
(45). Having held that Section 8-A was in concord with the Constitution, the majority in Ram Puri analysed the true nature and scope of Section 8-A through the following self-imposed question:-
"Herein the core question is the import of the word 'resumption' which indeed has primarily necessitated this reference to the Full Bench. Does it connote in essence a divestiture of title? Or, does it mean canvassed on behalf of the petitioner only a temporary divesting of posses in favour of a trustee who is obliged to restore the same if the default is later rectified." CWP No.16634 of 2008 - 58 -
(46). The Full Bench then navigated through the previous case law and taking cue from an earlier Full Bench decision in Brij Mohan vs. Chief Administrator, AIR 1980 P&H 236, wherein this Court had held that "The proposed order of resumption has dual consequences; (i) the depriving of ownership right in the site or building which concerns only the owner of the site or building; and (ii) the deprivation of the lessee of his lawful possession thereof...", very aptly concurred with the said view. (47). The Full Bench in Ram Puri thereafter found that the Division Bench decision in Amrit Sagar Kashyap vs. Chief Commissioner, UT Chandigarh (1980) 82 PLR 441, was in direct and headlong conflict with that of the Full Bench in Brij Mohan's case and consequently overruled the same.
(48). The Full Bench in Ram Puri posed yet another question as :-
"What is the true import and width of the word 'resumption' designedly used by the legislature in Sec.8-A?"
(49). After a long and analytical journey of dictionary meanings, case law and comparative study of provisions, the majority concluded that :-
CWP No.16634 of 2008 - 59 -
"...However, there is no manner of doubt 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."
(50). The Full Bench in its penultimate paragraph reiterated with a sharp note of caution that the power of resumption is the ultimate civil sanction and must, therefore, be a weapon of last resort and inevitably it should be used with great caution and circumspection.
(51). The Full Bench finally held that:-
"Equally it is well to remember that even where resumption has necessarily to be resorted to it should be liberally tampered with the provisions of the recently inserted R.11-D which empowers the authority to retransfer the site to the original transferee in specified situations. I would, therefore, hold that though the judicious and lawful exercise of the powers of resumption must be upheld and in certain situations may CWP No.16634 of 2008 - 60 - be both necessary and desirable, yet any arbitrary or discriminatory application thereof would at once attract the ever vigilant power of the Court under the writ jurisdiction."
(52). Ram Puri uninterruptedly held the field for 14 successive years on both counts, namely, resumption of a property on any of the prescribed grounds as also the desirability of its re-allotment to the same allottee on revised terms and conditions as per Rule 11-D. The Full Bench unambiguously though impliedly inserted the doctrine of proportionality in Section 8-A when it said that 'resumption' is the ultimate civil sanction and must be 'a weapon of last resort'. (53). It will thus be an exercise in futility to say that Rule 11-D ever saved Section 8-A in Ram Puri's case. The Full Bench unequivocally held that Section 8-A did not suffer from the vice of discrimination nor did it violate the equality clause under Article 14 of the Constitution. It also held that Section 8-A was a reasonable restriction in public interest on the Fundamental Right to acquire, hold and dispose of property under Article 19(1)(f). The Full Bench viewed that it was farcical and fanciful to imagine that the authority would use the power of resumption arbitrarily or whimsically, rather various provisions suggest that normally resort would be made to Sections 4,5,6,13 & 15 of the Act before applying the ultimate sanction CWP No.16634 of 2008 - 61 - spelled out in Section 8-A. The majority view neither referred to nor relied upon Rule 11-D for the sustenance of these reasons. (54). The Full Bench consciously used the expression "in the last analysis" before observing that Rule 11-D "tampers the rigor and softens the strictness of resumption by making it possible to offer the same property to the original transferee on certain liberal terms". (55). The Full Bench in Ram Puri was sentient of the consequences of resumption while posing the question - Does it connote in essence a divestiture of title? And answered by saying that the order of resumption has dual consequences, namely, deprivation of ownership right in the site or building and deprivation of the lessee of his lawful possession. The devastating effect of resumption was approved by the Full Bench holding it as "ultimate civil sanction in the armoury of the authorities" to effectuate the twin purpose of the Act. Having said that, the Full Bench impressed upon the authorities that wherever resumption has to be resorted to it should be liberally tampered with the provisions of the recently inserted Rule 11-D which empowered the Authority to re-transfer the site to the original allottee as per the new terms and conditions.
(56). The occasional reference to Rule 11-D in Ram Puri was merely an acknowledgement of a fact brought on record without allowing it to infringe or effect its decision-making process nor was the CWP No.16634 of 2008 - 62 - Full Bench driven away by this Rule to reach its verdict in favour of Section 8-A. To say it differently, every finding given by the majority is padded by reasons other than Rule 11-D. Having upheld resumption as an ultimate civil sanction to deprive the allottee of his ownership right and possession of the site or building, there was no compulsion for the Full Bench to look for a device for tampering with the rigor or to soften the strictness of resumption. The factual observations made by the Full Bench on the effect of Rule 11-D is not a declaration of conditional validity of Section 8-A of the 1952 Act. SUPREME COURT ON SECTION 8-A:-
(57). The shadow of doubt on the legality of resumption power under Section 8-A, were there any, was removed and it was allowed to be in full bloom by the Supreme Court in Babu Singh Bains, disapproving the minority view in Ram Puri and holding that "the majority judgement has rightly focused the question in the correct perspective and had held that Section 8-A is valid in law and therefore, not violative of Article 14". (58). In addition, the Supreme Court also viewed that :-
(i) "Sections 8-A was brought on statute with a view to bring it in conformity with the purpose the Act seeks to subserve."CWP No.16634 of 2008 - 63 -
(ii) "It would, however, appear that the learned Judge, with due respect, sought to set the clock back to the Amendment by constructing the meaning of the words 'forfeiture' and 'resumption' and the consequential effect on general principles of law without giving needed effect to the object of the Amendment." (views on the minority judgement in Ram Puri)
(iii) "Once the statute occupied the field and gave power to resume the land or building subject to the conditions mentioned therein, the general principles of resumption and other principles considered therein absolutely remained no more relevant."
(iv)"In Northern India Caterers (Pvt.) Ltd. vs. State of Punjab & Anr. [AIR 1967 SC 1581], this Court had held that when there are two modes of procedure, one being more drastic and harsher than the other without any guidelines, invocation of the former was violative of Article 14 which was reversed by a larger Bench in Maganlal Chhagganlal [P] Ltd. vs. Municipal Corporation of Greater Bombay & Ors.
[AIR 1974 SC 2009] knocking the bottom of the plea of CWP No.16634 of 2008 - 64 - constitutional invalidity of Section 8-A on the anvil of Article 14."
(v) "Though softer course under Section 15 was available, Section 8A does not become invalid on that score."
(vi)"Section 9 has been deleted and procedural
safeguards have been provided in Section 8-A.
Therefore, Section 8A, having provided fair
procedure, does not become arbitrary and violative of Article 14."
(vii)"For these reasons and also for the reasons given in the majority judgment, we are of the view that Section 8-A is not violative of Article 14 since it has prescribed an in-built procedure of giving an opportunity and right to adduce evidence and consideration thereof by the Estate Officer before resumption and to pass a reasoned order in support thereof."
(viii) "The order is also subject to an appeal before the Chief Administrator. If permissible, within circumscribed parameters, appellate order may be subject to judicial review under Article 226."
CWP No.16634 of 2008 - 65 -
(ix)"The vice pointed out by this Court in Jagdish Chander's case (supra) has been cured by introducing Section 8-A. It would, therefore, be clear that the resumption under Section 8-A is not only in case of non-payment of dues under the sale but for violation of the conditions of the sale, the rules, regulations and other relevant conditions applicable in that behalf."
(59). The definitive and eloquent self-speaking reasons reproduced above should leave no one guessing that the Supreme Court besides giving its own reasons upheld Section 8-A by approving the majority judgement in Ram Puri's case.
(60). The appellant before the Supreme Court in Babu Singh Bains incidentally sheltered behind Rule 11-D as a last resort though he had applied for re-transfer of the resumed property after 13 years and his perceived right to seek re-transfer occasioned for the Court to reiterate the view already taken by it in M/s. Johnson Paints and Varnish Co.'s case and to doubt the very bona fide in introducing Rule 11-D as a source of backdoor entry.
(61). The vires of the 1952 Act, with special reference to Section 8-A, was unsuccessfully re-agitated before the Supreme Court, after more than seven years in M/s. Teri Oat Estates Pvt. Ltd. case. CWP No.16634 of 2008 - 66 - Following Babu Singh Bains and approving the Full Bench decision of this Court in Ram Puri, the Hon'ble Supreme Court again thwarted the challenge though re-enforced that the drastic power of resumption and forfeiture has to be taken recourse to as a last resort. The doctrine of proportionality was also read implicit in Section 8-A. IS THE DECISION IN BABU SINGH BAINS AN OBITER DICTA AND SUB SILENTIO ?
(62). It is the solemn duty of all Courts within the territory of India to follow the judgements of the Hon'ble Supreme Court as they amount to declaration of the law under Article 141 of the Constitution. It is the ratio decidendi, namely, the reasons assigned in support of its conclusion by the Supreme Court which are binding in nature. Mere observations or what has been finally done in a given case without laying down the law would not constitute as an obligatory ratio of the Supreme Court judgement to be followed by the Courts in India. Equally true is that a decision of the Supreme Court is an authority for the point in issue it decides and not for what was neither decided nor there was an occasion for it to express its opinion. Per contra, an obiter dicta is the expression of view by a Court on a question of law though raised before it but did not arise for consideration in such a manner that the case could not have been decided unless such question was also answered. It is thus an incidental statement made CWP No.16634 of 2008 - 67 - in a Court opinion that was not required for deciding the case. It may be a superfluous observation without which also the lis could be effectively adjudicated. "Obiter dicta is more or less presumably unnecessary to the decision. It may be an expression of a viewpoint or sentiments which has no binding effect".1 (63). An obiter or indirectly-expressed view by the Supreme Court on a pointedly raised issue does carry persuasive value though may not be binding on a co-ordinate Bench. It is however, equally well placed that an obiter of the Supreme Court is worthy of respect, has persuasive value and considerable weight and in the absence of any direct pronouncement on that question elsewhere by the Supreme Court, it has a binding force on the High Courts.2 (64). Sub silentio in literal sense is known as 'under silence'. It may be simplified to say that when the later opinion of a superior Court reaches a result contrary to the previous view of the inferior Court or Bench, the latter case by necessary implication overrules sub silentio the previous inconsistent view. Additionally, when a decision is not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue, cannot be deemed to be a law 1 [Ref. State of Haryana vs. Ranbir alias Rana, (2006) 5 SCC 167] 2 [Ref. Oriental Insurance Co. Ltd. vs. Meena Variyal, (2007) 5 SCC 428] CWP No.16634 of 2008 - 68 - declared to have a binding effect within the meaning of Article 141 and is known as sub silentio.3 (65). Let us now find out whether the decision in Babu Singh Bains on Section 8-A is actually obiter dicta or sub silentio? A residential property in that case was resumed on October 17, 1977 as it was being misused for commercial purposes. The resumption order was upheld by the Supreme Court on March 13, 1992. Thereafter, the allottee applied for re-allotment of site under Rule 11-D on April 6, 1992. His application was dismissed by the authorities. The writ petition challenging that order was rejected by the High Court as the allottee failed to give any satisfactory explanation for the delay of 13 years in filing the application. The allottee again approached the Apex Court and specifically challenged the constitutionality of Section 8-A under which the property was resumed. It is so decipherable from paragraph 8 of the judgement where it is unequivocably noticed that "when the matter came up for hearing before a Bench of two learned Judges, by order dated February 14, 1995 reference was made to a three-Judge Bench to consider the validity of Section 8-A of the Act and the question of resumption since it has got a vital bearing on the right of property held by a defaulter. Thus these cases have come up before this Bench". The question of vires of Section 8-A thus was expressly 3 [Ref. Arnit Das vs. State of Bihar (2000) 5 SCC 488] CWP No.16634 of 2008 - 69 - and attentively raised as there could possibly be no other legal contention to rekindle the hope, for which the parties were duly heard and the decision pronounced. The constitutionality of Section 8-A was approved by the Supreme Court for more than one reason briefly noticed in para Nos.57 to 61 of this order. Those reasons for all intents and purposes amount to declaration of law within the meaning of Article 141 and are binding on us, regardless of the fact that even an obiter dicta of the Supreme Court, in the absence of any contrary pronouncement, is also equally binding.
ARE THE ADVERSE COMMENTS ON RULE 11-D IN M/S. JOHNSON PAINTS AND VARNISH CO. & BABU SINGH BAINS CASES OBITER DICTA OR SUB SILENTIO ?
(66). The petitioners, in our considered view, cannot be heard to say that the adverse observations invited from Supreme Court on Rule 11-D in M/s. Johnson Paints and Varnish Co. or Babu Singh Bains cases were obiter dicta or sub silentio. We say so for the reasons that the petitioners in both the cases banked upon Rule 11-D to assert their 'right for re-allotment'. The first question that arose for consideration thus was whether the said Rule was an enabling provision or an allottee in default could seek re-transfer of the resumed site as a matter of right? It was in the quest for a true answer that the Rule was viewed as tainted with notable impropriety and unguided discretionary power and potential to seep in corruption CWP No.16634 of 2008 - 70 - for its illogical and absurd reward to an allottee who was found guilty of misusing the site and/or breach of the conditions of allotment. The Supreme Court made outright observations with reference to a question directly and substantially raised before it. The expression of views on Rule 11-D in both the cited cases were thus neither obiter dicta nor sub silentio and carry their binding force as the law of the land.
(67). The later decision in Jyotsna Kohli's case (supra) does not advance the petitioners' case on the question of Rule 11-D as in that case the revisional authority vide its order dated 14th June, 1989 granted two years' time to the allottee to stop the misuse of the premises by the tenant Bank and only on failure to do so that the Estate Officer took possession of the premises on 18th December, 1991. The owner-cum-allottee applied under Rule 11-D for re-transfer of the site in the year 1992 and the Supreme Court while declining to embark upon the validity of the resumption order, ordered that "the ends of justice will be met by directing the respondent Estate Officer to treat the application under Rule 11-D as having been filed in the year 1992 and assess the value on that basis.". The sanctity of Rule 11-D was neither an issue for consideration nor was there an occasion to consider the previous decisions rendered in M/s. Johnson Paints CWP No.16634 of 2008 - 71 - and Varnish Co. or Babu Singh Bains, more-so when these decisions were not even cited for consideration. OUR FINDINGS ON ADDITIONAL CONTENTIONS:-
(68). If we were to accept the preliminary objection taken on behalf of the respondents, the reference order dated 16.11.2010 stands fully answered by our findings given hereinabove. However, in all fairness to counsel for the parties who have been heard at length and slightly deviating from the established conventions, we incline to dwell upon the petitioners' renewed attack on Section 8-A through supplemental and additional contentions. We proceed accordingly. (69). The petitioners are on firm footing in contending that the 44th Amendment of the Constitution is prospective w.e.f. 20th June, 1979 and any law enacted prior thereto is open to challenge on the ground of contravention of the Fundamental Rights guaranteed under Articles 19(1)(f) & 31 of the Constitution. The Waman Rao & Ors.
authoritatively ruled that the deletion of the right to property from the array of Fundamental Rights will not deprive the petitioners of the arguments which were available to them prior to the coming into force of the 44th Amendment, since the impugned Acts were passed before June 20, 1979 on which date Article 19(1)(f) was deleted. In Kamal Sukumar Durgule's case, the provision defining "vacant land", was struck down as it was found to be violative of Articles 14 & CWP No.16634 of 2008 - 72 - 19(1)(f) of the Constitution. A somewhat similar view has been taken by the Supreme Court as late as in 1997 in Chairman Railway Board's case also.
(70). The Full Bench in Ram Puri disapproved the contention emanating from Articles 19(1)(f) & 31 on the turf of public interest viz. the avowed objects and reasons for which the 1952 Act was enacted. We need not say anything but our unqualified and respectful concurrence to the views taken by the majority in Ram Puri's case, with a little addition that the purpose of imposing 'reasonable restrictions' through legislative means on the Fundamental Rights guaranteed under Article 19 which are not absolute, are measures of social control as there is a hair-thin difference between the 'right' and the corresponding 'duty' imposed on the person in enjoyment of such right. If it is established that there is a direct and proximate nexus between the restrictions imposed and the object sought to be achieved, such a legislative enactment shall always carry a strong presumption of constitutionality.
(71). The protection of Article 19(1)(f) to acquire, hold and dispose of an immoveable property in Union Territory of Chandigarh is preceded by sale, allotment, transfer or leasehold of such property in accordance with Section 3 read with Rules framed under Section 22 of the 1952 Act. Even if an allottee acquires unconditional or absolute CWP No.16634 of 2008 - 73 - title of ownership, the user of such property is subject to the statutory restrictions imposed by the Act or Rules and Regulations framed thereunder. So long as the owner-cum-allottee abides by the obligations created and fastened on him by the 1952 Act or the Rules and Regulations, such owner can enjoy his right to acquire, hold and dispose of a property without any fetter or fault. His relentless defiance to the 1952 Act, Rules or the Regulations may, however, incur the consequences of ultimate civil sanction of resumption under Section 8-A. The legislative policy of 'zero tolerance' for inexcusable violations or breach of allotment conditions per se is neither unreasonable to attract Article 14 nor does it fall in the teeth of Article 19(1)(f) of the Constitution.
(72). The petitioners' contestation that 'resumption under Section 8-A amounts to compulsory 'acquisition' of a site or property without payment of any compensation hence violated Article 31 till 20th June, 1979 or it now abrogates Article 300-A on the same analogy', too has not made any indelible mark on us for more than one count.
(73). We say so for the reason that the squabble is based upon a wholly misconceived notion as if the expressions "resumption" and "acquisition" are agnates or interchangeable. True it is that both 'resumption' and 'acquisition' take place by force of law and deprive CWP No.16634 of 2008 - 74 - the owner of his title and/or possession over the subject property. There is, however, a marked and significant distinction in their allegiant sense. While 'acquisition' of a property can be only for a specified public purpose, the 'resumption' of property is a punitive measure in furtherance of legislative object(s). 'Acquisition' is a positive action as opposed to 'resumption' which is passive in nature. 'Acquisition' within the meaning of our Constitutional scheme "has the effect of deprivation and enjoyment of the property. The acquisition in order to be valid must be for a public purpose and the person deprived of the same is entitled to compensation"4. 'Resumption', on the other hand, has been understood to mean "taking back what was given". The Blacks' Law Dictionary as well as The Chambers 21st Century Dictionary also define 'resumption' as "the taking back of property previously given up or lost" and "to take back or return to a former position" respectively. The word 'resumption' was explained in Dattatraya vs. Krishna Rao, (1993) Suppl. 1 SCC 32 to say that "what was resumed are the lands and not the property of a person from whom it was taken by the rightful owner". The 'resumption', 'forfeiture' or 'confiscation' of a property thus, does not amount to its 'acquisition' within the meaning of Articles 31 or 300-A of the 4 [Ref. Bhuri Nath & Ors. vs. State of J&K, (1997) 2 SCC 745] CWP No.16634 of 2008 - 75 - Constitution to create the right of compensation in the expropriated owner.
(74). There is no gainsaying that after the amendment of Article 31(2) of the Constitution by the 25th Amendment Act, 1971, it was lawful to acquire a private property on payment of an 'amount' instead of granting 'compensation' and it was not necessary that the amount so payable must be equivalent to the market value of the acquired property. It was thus open to the Legislature to lay down principles for determining the 'amount' payable on compulsory acquisition of a property except that such principles had to be relevant and must not determine the value which is only illusory in nature. Another effect of the 25th Amendment was that the law providing inadequate compensation or illusory compensation was saved from the ambit of judicial review.
(75). Section 8-A was enacted in an era when Article 31(2) was still operative and regardless of the fact that the resumption of property was consequent upon violation of the building laws, the said provision held the allottee entitled to seek refund of the consideration money save to the extent of its forfeiture which was also restricted upto a maximum of 10% of the total amount. The 'resumption' of a site or building under Section 8-A in legal parlance means taking it back from the allottee to whom it was given by the Administration CWP No.16634 of 2008 - 76 - through one of the modes prescribed under Section 3 of the 1952 Act. The legal effect of such a statutory exercise means re-vesting of the title of the site or building in the Administration. The expropriated allottee, therefore, can have no claim for compensation except to seek refund of the consideration money deposited by him. Since the action of resumption is resultant to an established violation of law by the allottee, the forfeiture of a part of the consideration money deposited by such allottee is the only de facto penalty he suffers. The maximum cap on forfeiture of the consideration money is an inbuilt safeguard and a compensatory measure to provide refund of substantial part of the paid amount. The allottee cannot thrive on his willful violations to seek payment of the actual market value of the resumed property as the principle of adequate or reasonable compensation is alien to the scheme of 1952 Act.
(76). The petitioners can draw no advantage from Article 300-A of the Constitution to seek compensation in lieu of resumption of their properties, firstly for the reasons we have already assigned for inapplicability of Articles 19(1)(f) & 31 of the Constitution in the case of a 'resumption'. Secondly, Article 300-A is a replica of Article 31(1) with complete omission of its sub-Article (2) and has been bodily lifted from Part-III, "Fundamental Rights" and added to Part-XII, Chapter- IV of the Constitution, with the legal effect that 'right to property' CWP No.16634 of 2008 - 77 - though a human and Constitutional right, is no longer a Fundamental Right. Thirdly, the 'right to property' is now saved to the extent that no person can be deprived of his property save by authority of law. To say it differently, the competent legislature can deprive a person of his property in accordance with Article 300-A of the Constitution. The long-standing debate whether the doctrine of 'eminent domain' and its key components, namely, 'public purpose' and 'compensation' in the case of depriving a person of his property are to be read into Article 300-A, is also no longer res nova.
(77). The Constitution Bench in KT Plantation's case (supra) has authoritatively laid down that "the concept of public purpose has been given fairly expansive meaning which has to be justified upon the purpose and object of the Statute and the policy of the legislation. Public purpose is, therefore, a condition precedent, for invoking Article 300-A". As regards compensation, the Bench held that:-
"189. Requirement of public purpose, for deprivation of a person of his property under Article 300-A, is a pre-condition, but no compensation or nil compensation or its illusiveness has to be justified by the State on judicially justiciable standards. Measures designed to achieve greater social justice, may call for lesser compensation and such a limitation by itself will not make legislation invalid or unconstitutional or confiscatory. In other words, the right to claim compensation or the obligation to CWP No.16634 of 2008 - 78 - pay, though not expressly included in Article 300-A, it can be inferred in that article and it is for the State to justify its stand on justifiable grounds which may depend upon the legislative policy, object and purpose of the statute and host of other factors.
xxx xxx xxx
191. The legislation providing for deprivation of property under Article 300-A must be "just, fair and reasonable" as understood in terms of Articles 14, 19(1)(g), 26(b), 301, etc. Thus in each case, courts will have to examine the scheme of the impugned Act, its object, purpose as also the question whether payment of nil compensation or nominal compensation would make the impugned law unjust, unfair or unreasonable in terms of other provisions of the Constitution as indicated above."
(78). The purport and object of a Statute which seeks to deprive a person of his property, are thus of paramount consideration and applying the principle of 'purposive construction', the Court shall determine whether the provisions in such legislation regarding deprivation of property when construed with reference to Article 300-A, are just, fair and reasonable. The legislative intention to curb some public evil or to effectuate some public benefits is the principal guide for a court to give effect to the language or words employed in the Statute and then only to enforce the legislative policy. It is by now a firmly established rule that the intention of the CWP No.16634 of 2008 - 79 - Legislature must be found by reading the Statute as a whole. "The Court must ascertain the intention of the Legislature by directing its attention not merely to the clauses to be construed but to the entire Statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs".5 (79). Should these parameters be applied to the 1952 Act for the true construction of Section 8-A, we find that the provision under challenge does not tinker with the principles of just, fairness or reasonableness on the anvil of Articles 14, 19(1)(f), 31 or 300-A of the Constitution, for a restriction in public interest cannot be said to be unreasonable only because in the facts and circumstances of a given case it operates harshly on a person. The Statute of 1952 imposes no unreasonable restriction on the right to enjoy an immoveable property so long as the mandatory building laws are observed. The exceptional recourse to re-take a site or building on refund of substantial part of the consideration money is permissible against an incorrigible and habitual violator only. An exception of the nature explained above does not override nor does it have an effect on the dominant character of the legislation.
(80). Is Section 8-A, when mirrored against Article 14 of the Constitution full of so much unreasonableness, arbitrariness and 5 [Ref. State of West Bengal vs. Union of India, AIR 1963 SC 1241] CWP No.16634 of 2008 - 80 - muscle power that it deserves to be struck down even if 'right to property' is no more a Fundamental Right? Any successful challenge to a piece of legislation must sail through either of the twin tests namely, (i) violation of the basic structure of the Constitution; or (ii) lack of legislative competence. Suffice it to observe that the presumption of constitutionality attached to an Act of Legislature shall remain unrebutted until proved otherwise. The petitioners have not doubted the legislative competence of 1952 Act. On the question of Section 8-A as a violator of Article 14, we are of the view that the allegations should always be specific, clear and unambiguous with relevant particulars in the pleadings which are conspicuously missing in the instant cases. The aggrieved allottees firstly failed before the Full Bench in Ram Puri to substantiate such a plea. Their second attempt before the Supreme Court in Babu Singh Bains also proved unsuccessful. The third attempt in M/s. Teri Oat Estates Pvt. Ltd. case too yielded no fruits. Fourthly, on dispassionate and afresh consideration of Section 8-A as one of the components of the legislative scheme of 1952 Act, we unhesitatingly hold that the same is surrounded by inescapable safeguards like (i) observance of principles of natural justice including right to hearing and lead evidence; (ii) resumption as a last recourse to be resorted to; (iii) the doctrine of proportionality; (iv) sweeping powers vested with the appellate and CWP No.16634 of 2008 - 81 - revisional authorities; and (v) every action under the Act finally being subject to judicial review, hence there is no space left to be occupied by unreasonable or arbitrary considerations.
(81). The doctrine of proportionality as ruled in M/s. Teri Oat Estates Pvt. Ltd. is now an integral part of Section 8-A to protect an allottee against unreasonable or arbitrary action by the Authority under that provision. It necessarily means and the respondents cannot be heard to say otherwise except that the power of resumption can be invoked as a last resort and the action of the Estate Officer is required to be judged on the touch-stone of Article 14 of the Constitution. It implies that the Estate Officer before passing a resumption order shall be obligated to determine whether the breach of terms and conditions of allotment or violation of any building byelaw by the allottee is 'willful' and 'deliberate' or it has occurred for the reasons beyond his control? In the case of the latter category it shall not be possible to invoke the power mechanically and resume the property. For example, if an allottee indisputably rents out his residential premises to a tenant for residential purposes only and the tenant in utter defiance to the terms of tenancy starts misusing the premises for commercial purposes against whom the landlord, without any inordinate delay, initiates eviction proceedings under the East Punjab Urban Rent Restriction Act, 1949 (as applicable to UT CWP No.16634 of 2008 - 82 - Chandigarh) inter alia on the ground of misuse of the premises, how can the allottee be held guilty of willful and deliberate violation of the building byelaws? The only recourse in such an eventuality available with the Estate Officer shall be to keep the resumption proceedings in abeyance till the eviction proceedings are decided though he must keep track of the status of eviction proceedings from time to time. Any attempt to deviate from such like fait accompli conditions shall vitiate the action rendering the resumption proceedings to nothing but a colourable exercise and/or abuse of power by the Estate Officer. Similarly, the first or stray violation(s) can hardly justify the impaling effect of 'resumption' and any such casual attempt with a bureaucratic approach deserves serious view in exercise of power of judicial review. (82). Contrary to it and again for illustrative purposes, if a premises is being misused by the tenant with a tacit understanding or in connivance with the landlord and the so-called eviction proceedings are a ruse to defy and defeat the action under the 1952 Act, the Estate Officer shall be well within his right to return such a finding of fact on appreciation of evidence on record, and hold that the misuse of premises by the tenant shall be deemed to be violation of Building Byelaws by the allottee-cum-landlord.
(83). It is equally well-settled that where the Statute vests an administrative or quasi-judicial authority with discretionary power, CWP No.16634 of 2008 - 83 - right to appeal against the order of such authority is one of the safeguards against arbitrary exercise and/or to bring such power within reasonableness of the restrictions imposed upon a Fundamental Right under Article 19 of the Constitution and wherever the provision of appeal has been made, the discretion vested in the original authority is neither unfettered nor unguided.6 (84). Given a meaningful interpretation to Section 10(2)&(4) of the 1952 Act consistent with the legislative policy of developing Chandigarh as a planned city, it completely takes away the sting of arbitrariness or discriminatory consequences imputed to the last civil sanction of 'resumption'. The inadvertent or otherwise omission by the Estate Officer in overlooking the sine qua non conditions for resumption shall have to be rectified by the appellate authority in performance of its plenary duty to 'confirm', 'vary' or 'reverse' the order of the Estate Officer. The word "vary" as defined in The Chambers Dictionary means to 'alter, ..to change to something else; to make of different kinds; ..to deviate; to disagree'. The Concise English Oxford Dictionary defines "vary" to mean '...change from one form or state to another'. Similarly, the expression "reverse" has been defined by Black's Law Dictionary to mean 'to overturn (a judgement) on 6 [Ref. (i) Tika Ramji vs. State of UP, AIR 1956 SC 676; (ii) Patel Chaturbhai M vs. Union of India, AIR 1960 SC 424,
(iii) Kaushal PN vs. Union of India, (1978) 3 SCC 558; & (iv) Mangalore Ganesh Beedi Works vs. Union of India, (1974) 4 SCC 43] CWP No.16634 of 2008 - 84 - appeal'. The Chambers Dictionary defines "reverse" 'to turn the other way about... in the opposite direction..., to run aside..., the contrary..., the act of reversing'. The Concise English Oxford Dictionary defines "reverse" to say 'move backwards..., law revoked or annul (a judgement by a lower court or authority)'. The powers enjoyed upon by the appellate authority are thus vast, wide and expansive enough to re-appraise the evidence led under Section 8-A, to take notice of the subsequent events, if any, and form an independent view on the sustainability of the resumption order. The wings of its power must always prompt the appellate authority and it shall be so obligated to reverse the resumption order no sooner does it find that during the pendency of the resumption or appellate proceedings, the very basis to initiate such proceedings within the mischief of Section 8-A(1) has completely disappeared. In other words, it cannot be said that even if the ground of resumption is non- existent yet the appellate authority would have a discretion to "confirm" the order of resumption and dismiss the appeal. Such a misconstruction of Section 10(2) of the Act would lead to arbitrary and discriminatory consequences against the very ethos of Article 14 of the Constitution.
(85). The unconventional wide power given to the revisional authority to "alter" i.e. 'to make different, to modify' [The Chambers CWP No.16634 of 2008 - 85 - Dictionary]; or 'change in character, appearance or composition' [Concise English Oxford Dictionary] and/or to "rescind" i.e. 'to abrogate or cancel..., to repeal or annul' [Black's Law Dictionary] or 'to cut away, to annul...' [The Chambers Dictionary], too are choate and encompasses the revisional authority to take over and exercise the powers of the Estate Officer or the Appellate Authority to derail the resumption proceedings wherever the cause of initiation has vanished.
(86). We do not foresee even an iota of discretion with the appellate or revisional authorities except to set aside and annul the resumption proceedings wherever the cause of inception has eclipsed except however in a case of repeated violations where the allottee had already been forewarned by the appellate or revisional authority on previous occasion(s). Similarly, dropping of the resumption proceedings by the appellate or revisional Authorities would not forestall such authorities from imposing exemplary alternative penalty like fine etc. on the allottee-in-default in accordance with law. Any other construction of Section 10(2)&(4) would circumvent the true amplitude of the phrases "vary", "reverse", "alter" or "rescind" as they are to be construed keeping in view the legislative policy of the 1952 Act, namely, the Union Territory of Chandigarh as a 'planned regulated City'. The power of judicial review under Articles 226 or 32 CWP No.16634 of 2008 - 86 - of the Constitution completely wipes out the outmost fear of discriminatory or arbitrary exercise of powers by the Estate Officer, appellate or revisional authorities.
(87). It is well known that mere possibility of abuse of power or its arbitrary exercise is no test for determining the reasonableness of the restriction imposed by law nor shall it vitiate such law. If, however, the statutory power or discretion is shown to have been abused by the authority, the person aggrieved is entitled to approach the appropriate forum against the illegal order but that would be no ground for invalidating the Statute itself. Nonetheless, we direct that 'resumption' being the last resort, the Estate Officer shall not henceforth initiate proceedings under Section 8-A unless the wrong- doer has been penalized to the maximum firstly under Section 15 or under the Rules framed under Section 22 of the Act and every such action shall have to be expressly disclosed in the show cause notice for initiating the resumption proceedings.
(88). In ITC Ltd. vs. State of Karnataka, (1985) Suppl. SCC 476, the doctrine that the Court's function is not simply to take a negative view by striking down unconstitutionality but to take an affirmative attitude by issuing directions to the Government as to what is to be done in future to avoid such unconstitutionality, has been extended to the jurisdiction under Article 226 also laying down CWP No.16634 of 2008 - 87 - that where a law could be saved from unconstitutionality if implemented in a proper manner, the High Court may instead of striking down such law, may give proper directions to the implementing Authorities. Taking jurisdictional strength from the above-cited precedent that we have in the previous paragraphs, interpreted Sections 8-A and 10(2)&(4) of the 1952 Act in such a manner that the Estate Officer, the Appellate or Revisional Authorities under the 1952 Act are left with very little subjective discretion, besides setting out the imperious conditions to be followed before initiating resumption proceedings so that the remotest possibility of any arbitrary or discriminatory action of resumption of a site or building is ruled out.
IS THE 1952 ACT A TRANSITORY OR OBSOLETE LEGISLATION? (89). We now proceed to consider one of the most vigorous
discord that the 1952 Act was a transitory legislation and has now become obsolete on achieving the purpose of its enactment. The contention has been given fillip from the Statement of Objects and Reasons noticing the fact of 'construction of the New Capital' at Chandigarh being 'in progress' and the need of consequential legislation to regulate the sale of building sites and to promulgate building Rules 'on the lines of Municipal Byelaws so long as a properly constituted Local Body does not take over the administration of the CWP No.16634 of 2008 - 88 - City'. Articles 243-P, 243-Q, 243-W, 243-ZB and 243-ZF of the Constitution mandating the constitution of Municipalities were referred to besides placing reliance on the Punjab Municipal Corporation (Extension to Chandigarh) Act, 1994. It was suggested that most of the immoveable properties have already been sold and the building byelaws can now be enforced through the Punjab Municipal Corporation Act, as applicable to UT Chandigarh. We, however, find the contentions unmerited for more than one reason. (90). It may not be seriously in dispute that a Law though constitutionally valid at one point of time may become unconstitutional due to passage of time or changed circumstances, yet the principle 'cessante ratione cessat ipsa lex' (with the reason of the law ceasing, the law itself ceases) cannot be applied ipso facto to a Legislative Act as it may not cease to be a 'law' on mere change of conditions unlike a Court decision which may cease to be a 'law' even without being reversed or overruled, due to changed conditions or changed law.
(91). A Statute is either perpetual or temporary. When the Legislature does not fix any time-frame, such a Statute remains operative and in force until it is repealed by the Legislature itself. It is only when the duration of a Statute is for a specific period of time that it expires by afflux of time. Secondly, there may be an implied CWP No.16634 of 2008 - 89 - repeal if the Legislature through a subsequent legislation abrogates the previous Statute and the legislative Scheme of the subsequent Act leaves no room to doubt that the previous legislation has been repealed by necessary implication. Thirdly, no legislative Act is rendered obsolescent and inoperative by virtue of a long lapse of time on the reasoning that the Act was a transitory enactment and that the powers thereunder were meant to be exercised immediately or within a reasonable time. The settled position is that the power conferred by a Statute may be exercised from time to time as and when the occasion arises unless a contrary intention appears. "A Statute can be abrogated only by express or implied repeal. It cannot fall into desuetude or become inoperative through obsolescence or by lapse of time."7 (92). The Parliament, in no uncertain terms, has expressed through a non obstante clause contained in Section 424-A of the Punjab Municipal Corporation (Extension to Chandigarh) Act, 1994 that the provisions of the 1952 Act shall operate and have an overriding effect. Secondly, there is no express or implied provision in the 1952 Act to infer that the Legislature ever intended to enact it as a 'temporary' or 'transitory' legislation. Thirdly, the 1952 Act is a special enactment with a significant object to devise Chandigarh as a 7 [Ref. State of Maharashtra vs. Narayan Shyamrao Puranik & Ors. (1992) 3 SCC 519]. CWP No.16634 of 2008 - 90 - planned city through regulatory measures. The said object of the Act is perpetual and co-terminus with Chandigarh as a planned city. Fourthly, the decision relied upon by the petitioners in Satyawati Sharma's case (supra) wherein the eviction under the Rent Act restricted for 'residential premises' was expanded by the Hon'ble Supreme Court to include 'commercial premises' laying down that "...it is trite to say that legislation which may be quite reasonable and rationale at the time of its enactment may with the lapse of time and/or due to change of circumstance become arbitrary, unreasonable and violative of the doctrine of equity and even if the validity of such legislation may have been upheld at a given point of time, the Court may, in subsequent litigation, strike down the same if it is found that the rationale of classification has become non-existent...", does not help the petitioners as that was a case of further expansion of the legislative policy of an enactment.
THE STATUS OF RULE 11-D OR RULE 21-B:-
(93). We now propose to concentrate on the last breather of the petitioners resting on Rule 11-D and Rule 21-B, as the case may be.
The moot point is whether deletion of Rule 11-D has got retrospective effect on the premise that the applications for re-transfer of the resumed sites which were pending consideration on the date of deletion of that Rule, have been rejected only on the ground of non- CWP No.16634 of 2008 - 91 - existence of a provision enabling such re-transfer. The petitioners assert that their rights ought to have been determined in the light of the law as it very much existed when they applied for the re-transfer. (94). There need to be no re-thinking nor does it invite any elaborate discussion that a Statute which affects 'substantive rights' is presumed to be prospective in operation unless made retrospective by express or necessary implications though a Statute merely affecting the procedure is presumed to be retrospective in its application unless provided otherwise. It is also equally convincing that if the substantive law has been amended during the pendency of a suit, the right of the parties ought to be decided as per the law prevailing when the action began. Declaratory or explanatory legislations, however, are placed at a different pedestal as they are meant to supply an obvious omission or to remove doubts to the meaning of an existing Act and are by nature retrospective.
(95). The true question that needs to be answered is whether Rule 11-D (or an identical Rule) while on the Statute Book 'conferred a right' of enforceable nature for re-transfer of the resumed property or was it only a provision enabling the executive to grant concession at its discretion? The answer to this question eloquently lies in the two cited decisions of the Hon'ble Supreme Court in M/s. Johnson Paints and Varnish Co. and Babu Singh Bains cases, deprecating the CWP No.16634 of 2008 - 92 - very existence of Rule 11-D. The aforesaid Rule was held to be an enabling provision with the discretionary power but conferring no legally vested right in a previous allottee to seek re-transfer on payment of current allotment price. No further supplement is required to these reasons as we have already held that the cited decisions are binding precedents in the context of Article 141 of the Constitution. We are, however, unable to reconcile as to how the time clock could be reversed by re-transferring the property to a person who breached the terms and conditions of allotment and violated the building Byelaws? There would be some logic attached to prescribing a penalty minor than 'resumption' for imposition on a violator of building laws so that the penultimate power of 'resumption' continues to remain the last civil sanction, to be invoked in a rare case. However, if the circumstances so warranted that a resumption order had to be passed, it would be totally absurd to clothe the Estate Officer with an implied power to review, modify or dilute his previous order (which might have attained finality up to the Highest Court) and re-transfer the site to the same allottee at a higher price. (96). It also appears that firstly, the power to re-transfer a site at the 'current market price' was in conflict with the legislative policy and the Objects for which the 1952 Act was enacted. Secondly, Section 22 authorizes to make Rules "only for carrying out the purposes" of CWP No.16634 of 2008 - 93 - the Act, hence a provision like Rule 11-D is alien to the rule-making power. Thirdly, the existence of a rule enabling re-transfer of the resumed sites encourages violations. Fourthly, the 'doctrine of proportionality' contemplates existence of more than one softer penalties before the ultimate civil sanction of resumption is invoked. Fifthly, Rule 11-D while in existence was never interpreted or construed to say that an application for re-transfer once moved should be eventually accepted. Finally, the fact that an illegal benefit was availed by many defaulters for a pretty long period does not strengthen the petitioners' plea of 'discrimination' within the meaning of Article 14 which must always be founded upon legal and positive considerations.
(97). Rule 11-D (or Rule 21-B of the 1973 Rules) in a way was a policy decision taken through subordinate legislation to re-transfer the resumed site subject to the compliance of prescribed conditions. The said Rule at the best gave rise to some 'expectations', 'legitimate' as per the petitioners though 'illegitimate' according to the respondents. The Court, however, would not bind the Government to its previous policy decision by invoking the doctrine of legitimate expectation unless the change in policy is vitiated by mala fides or extraneous considerations which are required to be pleaded and proved to its satisfaction. It is well settled that the power to take a CWP No.16634 of 2008 - 94 - policy decision includes the power to withdraw the same unless such withdrawal is tainted with actuated considerations. The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by way of an executive order or under the law.
(98). Rule 11-D (or Rule 21-B) lost its legitimacy and reached at the brink of being struck at the hands of Supreme Court in M/s. Johnson Paints and Varnish Co. and Babu Singh Bains cases. The law as interpreted or explained by the Supreme Court always has retrospective consequences unless applied prospectively through an express direction. Given the best assumption in favour of the petitioners that the declaration on the validity of Rule 11-D was prospective only, yet the legal status of that Rule after the Supreme Court decisions in the year 1996 was no better than a spurious offspring. The principle of promissory estoppel, therefore, cannot be invoked compelling the authorities for enforcement of a promise made contrary to the law or which is prohibited by law.8 (99). Equally apt it may be to re-state that a policy decision representing a promise to grant benefit of substantive nature does create legitimate expectation which is normally binding on the decision-maker. However, the State is indubitably entitled to alter, 8 [Ref. (i) PTR Exports (Madras) (P) Ltd. vs. Union of India, (1996) 5 SCC 268, & (ii) Shree Sidhbali Steels Ltd. vs. State of UP, (2011) 3 SCC 193] CWP No.16634 of 2008 - 95 - amend or rescind its policy decision in public interest. Such a recourse is available to the State under Section 21 of the General Clauses Act, 1897. It may have a retrospective effect in certain situations but the same by itself would not be sufficient to be struck down on the ground of unreasonableness if the source of power to take such policy decision is referable to a Statute or statutory provisions. Thus, a statutory policy decision withdrawing the concessional benefits retrospectively is also permissible, if so warranted by the facts and circumstances.9 (100). The underlying philosophy of our Constitution stands tall on the guarantee of Equality. The rule of law, the other side of which says that no one is above law, is also one of the facets of equality which is the basic feature of the Constitution. The practice of benevolentia regis habenda (a fine paid to receive the King's pardon and restoration of place, title or estate) is thus foreign to our democratic polity which does not recognize an authority superior to the Constitution. How can then a 'King' be permitted to restore or grant title or estate on quid pro quo basis? Rule 11-D was a refined version of the illustrated Majestic powers disbanded on January 26, 1950.
9 [Ref. Kusumam Hotels (P) Ltd. vs. Kerala SEB, (2008) 13 SCC 213] CWP No.16634 of 2008 - 96 - (101). Keeping these principles in view, we have no reasons to doubt that Rule 11-D neither did nor could it give rise to any legitimate expectation in favour of the petitioners promising them that irrespective of the violations under the 1952 Act, their resumed sites shall be re-transferred. The Rule, while in existence at the best kindled a hope that the applications moved by the petitioners for the concession of re-transfer were maintainable and shall be considered. Such a ray of hope was mere brutum fulmen which never materialised into a right enforceable through a court of law. We, however, hasten to add that Rule 11-D has not been deleted retrospectively as the orders of re-transfer of the resumed sites passed before 31.01.2007 have not been recalled.
(102). Having held that, we cannot refrain from observing that the 1952 Act may need revamping and updation to meet the modern day challenges some of which are incidental to the steep hike in the value of real estate and an unprecedented pressure of population mounted on Chandigarh. We are cognizant of the fact that the issue whether or not the 1952 Act is in need of suitable amendments falls exclusively within the domain of law-makers as the Courts would ordinarily expound the law and refrain from legislating except in a case of casus omissus. However, it cannot be overlooked that after enacting a bill the Legislature becomes functus officio so far as that CWP No.16634 of 2008 - 97 - particular Statute is concerned. The Legislature may not have a mechanism of its own to keep track of the deficiencies or difficulties faced by the executive who has been assigned the duty to give effect to the enactment and achieve the legislative object(s). It is the Executive, therefore, who has an onerous duty to apprise, suggest and put up before the Legislature a proposal along with facts and figures justifying the changes that may be brought into an enactment. Thereafter, it is the absolute and non-justiciable prerogative of the Legislature to take a decision on such proposal as per its wisdom. (103). The Executive has in the instant case, with reference to the 1952 Act, failed to live-up to the expectations of the residents as instead of approaching the Ministry concerned with a concrete proposal on data-based information for onward consideration of the Legislature to rejuvenate the 1952 Act and make it more vibrant and alive to the issues in praesentia or in future, it has gone for ad hoc solutions taking refuge under Section 22 of the Act. Strangely, the amount of penalty or fine fixed by the Legislature in the year 1952 (Sections 8, 13 & 15) has not been got revised even after the expiry of 60 years.
(104). The principles governing the powers of delegated legislation are fairly settled. Such a power is exercisable to implement and achieve the objects of a Statute within the framework CWP No.16634 of 2008 - 98 - of the legislative policy; every delegate is subject to the authority and control of the principal who can always direct, correct or cancel the action of the subordinate legislation; the delegate in the garb of making rules cannot legislate on the fields covered by the Act. (105). Section 22(1) of the Act empowers the Central Government to make Rules "for carrying out the purposes" of the 1952 Act. Its sub- Section (2) in particular and without prejudice to the powers given under sub-Section (1), empowers the Central Government to make Rules to provide for all or any of the subject matters mentioned therein. It is well known that where a Statute confers particular powers without prejudice to the generality of a general power already conferred, the particular powers are only illustrative in nature and do not impinge upon the general power. If one looks into sub-Section (2) of Section 22 within the framework of the settled principles noticed in the previous paragraphs, there should be no difficulty in understanding that the power to determine the nature and extent of penalties for varied violations under the Act was neither intended nor was delegated by the Legislature to the Executive. Had it been so, no occasion could arise for the Legislature to fix the amount of lumpsum or day-to-day penalty as has been done by it through Sections 8, 13, 15 or to maximize the limit of forfeiture in Section 8-A of the 1952 Act. Section 22 of the Act as an integral part of the legislative scheme does CWP No.16634 of 2008 - 99 - not authorize the subordinate legislation to occupy the fields which the Legislature has kept exclusively for itself. The penalties or other penal consequences laid down by the subordinate legislation in purported exercise of its powers under Section 22 must therefore be different from those which are explicitly in the domain of the Legislature under Sections 8, 8-A, 13 or 15 of the 1952 Act. We, however, must enter caveat and clarify that there is no challenge before us to any set of Rules made in exercise of powers under Section 22 of the 1952 Act by the Central Government or the Administrator, UT Chandigarh, therefore, the interpretation of Section 22 given hereinabove shall have no ipso facto impact on the existing Rules framed thereunder.
(106). In the light of the above discussion, we sum up our conclusions and answer the reference as follows :-
(i) Rule 11-D of the 1960 Rules lent no support nor did it help Section 8-A to survive on being challenged as violative of Articles 14, 19(1)(f) read with Article 31 of the Constitution before the Full Bench of this Court in Ram Puri's case or before Hon'ble Supreme Court in Babu Singh Bain's case;
(ii) The Hon'ble Supreme Court upheld Section 8-A in Babu Singh Bains, approving the majority view in CWP No.16634 of 2008 - 100 - Ram Puri besides giving its own reasons in support of its findings;
(iii) There was no occasion for the Hon'ble Supreme Court to rely upon Rule 11-D to dilute the strictness of resumption under Section 8-A when it questioned the very justification or propriety behind existence of that Rule;
(iv) To say it differently, we hold that Rule 11-D was not the pillar of strength for sustenance of Section 8-A either before the Full Bench of this Court in Ram Puri or the Hon'ble Supreme Court in Babu Singh Bain's case. In fact, this Court in Ram Puri referred to Rule 11-D as a positive event of fact but the said Rule invited criticism and was disapproved by the Supreme Court in Babu Singh Bain's case;
(v) The Supreme Court judgements in (i) M/s. Johnson Paints and Varnish Co.; (ii) Babu Singh Bains;
and (iii) M/s. Teri Oat Estates Pvt. Ltd. cases are neither obiter dicta nor sub silentio and are binding precedents within the meaning of Article 141 of the Constitution;
CWP No.16634 of 2008 - 101 -
(vi) Section 8-A of the 1952 Act does not violate Articles 14, 19(1)(f), 31 & 300-A of the Constitution of India;
(vii) Rule 11-D was illegal from the very inception and it conferred no right enforceable through court of law to seek re-transfer of a resumed site or building. We, however, clarify that the declaration on the legality of Rule 11-D shall have no retrospective effect and the cases already settled thereunder while it was operative, shall not be re-opened;
(viii) The petitioners or other similarly-placed allottees-in-
default have got no legally-vested right to seek re- transfer of the resumed sites only on the ground that they applied for such re-transfer before deletion of Rule 11-D on 31.01.2007;
(ix) The 1952 Act has become neither obsolete nor redundant and it shall continue to operate until repealed expressly or by implication by the competent Legislature;
(x) The petitioners while challenging the orders rejecting their applications for re-transfer of the resumed sites cannot be permitted to re-visit their challenge to the CWP No.16634 of 2008 - 102 - orders of resumption of their respective sites or buildings which have already attained finality, irrespective of the new grounds now taken by them. (107). In the light of the interpretation given by us to some of the provisions of the 1952 Act in paragraphs 81, 82, 84 to 87, 102, 103 & 105 of this order, we also deem it appropriate to issue the following directions:-
(i) The Estate Officer, UT Chandigarh is directed to follow hitherto the directions-cum-observations made in paragraphs 81, 82 & 87 while initiating proceedings for resumption of a site or building, the non-compliance whereof shall vitiate the resumption proceedings besides other consequences;
(ii) The appellate and revisional Authorities under the 1952 Act while invoking their powers under Section 10(2) & (4), shall be duty-bound to exercise their respective jurisdictions in the manner as has been interpreted by us in paragraphs 84 to 86 of this order;
(iii) The Union Territory of Chandigarh through its Administrator shall take steps as may be necessary for updation of the 1952 Act in the light of the CWP No.16634 of 2008 - 103 - observations made by us in paragraphs 102, 103 & 105 of this order before March 31, 2013;
(108). Since the writ petitions giving rise to this reference to a Full Bench do not involve any other question of fact or law for adjudication, no purpose shall be served by sending these cases back to the appropriate Bench hence for the reasons given in para 106 above, we dismiss the same though without any order as to costs.
(109). Dasti.
(Surya Kant)
Judge
(Augustine
(Augustine George Masih)
Judge
November 08, 2012
vishal shonkar (R.P. Nagrath)
Judge