Allahabad High Court
Rail Vihar Kalyan Sahkari Awas Samiti ... vs State Of U.P. And Ors. on 14 October, 2004
Equivalent citations: AIR2005ALL86, 2005(1)AWC682, AIR 2005 ALLAHABAD 86, 2005 ALL. L. J. 873 (2005) 1 ALL WC 682, (2005) 1 ALL WC 682
Bench: M. Katju, Sunil Ambwani
ORDER
1. Heard learned counsel for petitioners, learned Standing Counsel, and Sri Arvind Srivastava for New Okhla Industrial Development Authority, District Gautam Budh Nagar (in short, the NOIDA).
2. The petitioners are Welfare Societies/ Co-operative Housing Societies, and individual member of these societies. The writ petitions are directed against the letters issued by Additional Chief Executive Officer, NOIDA dated 13-11-2002 and 7-1-2003 by which the NOIDA has directed the individual members to execute a tripartite deed with the Welfare Societies/Co-operative Housing Societies as the lessees, and NOIDA, as the lessor, for sale of the superstructure and sub lease deed for the respective flats apartments, residential accommodations, allotted by the societies to its individual members; and for restraining the respondents from charging any stamp duty on the execution of such tripartite deed.
3. The brief facts giving rise to these writ petitions are stated as below :--
In Writ Petition No. 13560/2003 between Rail Vihar Kalyan Samiti Limited Rail Vihar, Sector 33. NOIDA. District Gautam Nagar v. State of U.P. the petitioners are housing societies, registered under the Cooperative Societies Act, 1965. The members of the two societies detailed in Annexures 1 and 2 of the writ petition are serving Railway personnel, retired personnel, spouses and dependent children of the deceased Railway employees. The Indian Railway Welfare Organisation (IRWO), is a society under the Societies Registration Act 1860, registered on 25-9-1985. One of the objects of the society is to provide houses for Railway men at All India level at no profit and no loss basis. The bye laws of IRWO provide for allotment of dwelling units to the members of the society. The NOIDA entered into a lease of plots on land Nos. F-2 and F-3 in Sector 30 and Plot Nos. D-66 in Sector -33 for a total premimum of Rs. 20,4,10,972.00. The lease deed was executed on 11-2-1991 between NOIDA and IRWO.
4. The petitioners are members of IRWO. They have formed separate housing societies. The entire premium, as consideration for the lease was provided by members of the petitioners society through IRWO. Five types of dwelling units were constructed. The building complexes are called 'Rail Vihar'. The constructions were complete in the year 1994 and were handed over to the members of the petitioners by way of possession letter. All the petitioners after paying the instalments were allotted residential houses in the year 1994 and are residing therein. The IRWO has circulated a letter dated 16-1-2003 to all the allottees enclosing a copy of copy of letters dated 7-1-2003 from NOIDA, requiring all the allottees to execute a tripartite sale deed of superstructure and sub-lease for land, within 15 days, failing which Rs. 10,00 per day will be levied and essential facilities will be withdrawn.
5. Writ Petition No. 30637/1999 has been filed by Air Commodore S.K. Misra, who is a member of the Air Force Naval Housing Board, Air Force Station, Race Course, New Delhi. It is alleged in the writ petition that in the year 1978-79 the Ministry of Defence, Government of India authorised formation of societies namely Air Force Naval Housing Board (AFNHB) and Army Welfare Housing Organisation (AWHO) to promote economical housing to the serving and retired Air Force, Navy and Army personnel, as a welfare measure, on self-financed and on no profit and no loss basis. The AFNHB was registered as a society with the Registrar of Societies of Delhi on 19-5-1990. The entire corpus and endowment funds was made out of the advances and is contributed by the members regisrants of the dwelling units.
6. The NOIDA executed a lease deed of land with AFNHB for construction of dwelling units and common amenities vide lease deed dated 29-9-1987 registered with the Sub-Registrar, NOIDA on 5-10-1987. About 3800 dwelling units were progressively constructed in Sectors 21 and 25 and were handed over to registrants/plot owners phasewise from 1985 onwards. The building complex is called 'Jalvayu Vihar'. The AFNHB approached NOIDA for finalising a sub-lease deed for transfers of the land to the plot owners members of the scheme, Instead of agreeing to the draft sub-lease deed submitted by AFNHB, the NOIDA provided a composite tripartite sale deed for superstructure of residential units and sublease deed for land to be executed between NOIDA as 1st party, AFNHB as 2nd party and members flat owners as 3rd party. A public notice was published in Times of India' on 1-5-1995 by NOIDA directing flat owners of Sectors 21, 25, 28, 29 and 37 to execute the deeds through their respective boards by 31-5-1995, failing which the flat owners will be declared unauthorised occupants on whom penalty shall be charged.
7. The AFNHB obtained legal opinion from the Additional Solicitor General of India, who by his opinion dated 21-10-1997 advised the Board that it is bound to ensure that no terms and conditions of the lease deed are violated by its allottees and that no terms and conditions in its sub-lease will contradict and contravene any of the terms of lease. However, the demands were enhanaced. It was opined that the terms and conditions of mandatory nature sought to be imposed by NOIDA do not fall within the regulatory aspect and ambit contemplated by Clause 8 of the lease deed. The, main transaction was completed in 1987. The constructions were completed and the allotments, and in some cases further third party transactions have taken place. The NOIDA as such cannot super impose terms and conditions either on allottees, or those in possession for a long period of time and on third party purchasers in a unilateral manner. By its letter dated 20-2-1997 giving for execution of the sub lease deed in the manner it was proposed and requested that the proposed draft be scrutinised and verified at an appropriate level and to consider whether the proposed sub-lease can substitute the sale deed for superstructures of residential units and sub-lease deed for land.
8. It is alleged that about 900 flats owners under misconception of law have entered into the tripartite agreements. The Sub-Registrar, Gautam Budh Nagar in respect of the petitioner, has calculated stamp duty and registration fees payable on the cost of superstructure and land and has demanded the sum of Rs. 35,940.00 towards stamp duty and Rs. 4880.00 as registration fees from the petitioner. The Sub-Registrar, NOIDA on an objection filed by the petitioner has referred the matter under Section 33 to the District Magistrate Gautam Budh Nagar on 27-8-1998, confiscating the deed and for recovery of deficient stamp duty and registration fees under Section 38(2) of the Stamp Act. A notice has been published in newspapers directing all allottees/flats owners, to pay penalty for land execution at the rate of Rs. 10.00 per day up to 30-7-1997, Rs. 20,00 per day up to 31-3-1999 and Rs. 40,00 per day thereafter. The petitioner has prayed for a direction to the respondents restraining them to force the petitioners and other memers by respondent No. 5 to execute the tripartite deed and to refund all costs burden for execution of sale deed and to accept the sub-lease offered by AFNHB to NOIDA for registration.
9. Writ Petition No. 12317/2003 has been filed by Swarna Javanti Rail Nagar Flat Owners Association (SJRNFOA) with the averments that Indian Railways Welfare Organisation (IRWO) is a society registered under the Societies Registration Act, 1860, dated 25-9-1989. The aims and objects of the society provide for various housing schemes for serving and retired employees, registered as members for self-financed housing projects. The IRWO acquired land measuring 20,000 square metres in Plot No. A-1, Sector 50 NOIDA on premium of Rs. 2,00,86,000/- on a 90 years lease commencing from 6-9-1997 for construction of dwelling units and common amenities. The lease deed was registered on 15-2-2000. The IRWO does not have any corpus and endowment fund except the advances contributed by members registrants for the housing schemes. The IRWO has constructed 264 dwelling units in the year 1998-2000 from the funds obtained from its members in instalments. The IRWO has forwarded a copy of the tripartite deed titled 'sale deed for superstructure and sub-lease deed for land' by letter dated 22-10-2002. The petitioner has prayed for a direction to NOIDA and IRWO to amend the lease deed for the land dated 15-2-2000 and from restraining respondents from forcing the petitioner for execution of the tripartite sale deed and to declare the sale deed as void and in the alternative to register the bipartite sub-lease deed of land on nil stamp duty.
10. Writ Petition No. 13814/2003 has been filed by M/s. Jeewan Ashray Co-operative Housing Society and others with the averments that the petitioner is a co-operative group housing society registered vide registration certificate No. 2541 under U.P. Co-operative Societies Act 1965 to provide its members, detailed in Annexure 1 to the petition, dwelling houses. The NOIDA allotted plot of land No. 8 situate in C-58 Sector 62 NOIDA for Rs. 2,92,92,192/- vide letter dated 1-1-2000. A lease deed was executed by NOIDA in favour of petitioner's society on 15-1-2000. The society has constructed 104 flats dwelling units over the land from the costs of construction paid by the members of the society in advance as per the agreed schedule of payment, after clearance of lay out plan from the authority. The Assistant Inspector General/Assistant Commissioner (Stamp) Gautam Budh Nagar sent a letter dated 13-2-2003, to the District Magistrate, Gautam Budh Nagar for execution of a sub-lease deed on which the liability of the payment of stamp duty shall be on the sub-lessee under Section 29 of the Stamp Act, 1899. All the allottees/owners according to him were required to obtain possession after execution of the sub-sale deed, failing which they will render themselves liable for penalty under Section 47-A and a punishment of imprisonment of six months under Sections 62 and 64 of the Act. He has required all the members allottees of the Co-operative Societies builders to get the sub-lease deed executed and registered before 30-2-2003. The petitioner has prayed for quashing the order dated 13-2-2003 and notice dated 7-3-2003 issued by District Magistrate, Gautam Budh Nagar to all the allottees/members of the petitioners society and for restraining the respondents from charging any stamp on the execution of the sub-lease deed.
11. Writ Petition No. 18723/2000 has been filed by Army Welfare Housing Organisation (AWHO) Flats Owners Welfare Sanstha NOIDA, a society registered under the Societies Registration Act 1860. The Army Welfare Housing Organisation (AWHO) and Air Force, Navy Housing Board (AFNHB) was formed by the Ministry of Defence, Government of India in 1978-1979 to promote economical housing on self-financed and no profit and no loss basis for serving and retired Army, Navy and Air Force personnel. Various housing schemes were initiated by the AWHO. The first of these schemes was for construction of self-financed 4752 dwelling units for registered members in Sector Nos. 28, 29, and 37 of NOIDA, which were completed in 20 phases between 1985 and 1993 and other 456 flats were completed in Sections 30 and 34 and handed over to the members. The Board had no corpus or endowment and fund except the contribution from members/registants for dwelling units. The Board acquired land at NOIDA by lease deed dated 29-12-1986 and has constructed 5208 dwelling units for registrants members in Sector 28, 29, 37, 30 and 34 known as 'Arun Vihar' (Sectors 28, 29 and 37), 'Ram Vihar' (Sector 30). 'Nar Vihar' (Sector 34) NOIDA. A letter was issued by AWHO to the co-operative societies of Arun Vihar, directing all the members flat owners, to execute a tripartite deed within three months otherwise after 31-5-1995 a penalty of Rs. 10,00 per day will be charged after nine months and allotment of flats will be cancelled. Similar letters were also issued to flats owners of other sectors between 1st May, 1995 to 24-2-1999. A total of 14 public notices were issued to the allottees flat owners. A number of representations were made to NOIDA and AWHO. One such representation was made by Col. R.K. Sahney dated 30-3-1999 has been enclosed to the writ petition. The petitioner has prayed for directions to NOIDA and AWHO, restraining them from forcing their members of the petitioners Sanstha to execute the tripartite deed and to publish any further notice.
12. Writ Petition No. 19095/2003 has been filed by Sri R.K. Pandey and 171 other members of Central Government Employees Welfare Housing Organisation (CGEWHO) formed under the Ministry of Urban Development and Poverty Alleviation, Government of India to promote economical housing for serving and retired Central Government employees on self-finance and at no profit and no loss basis. The CGEWHO is registered as a society vide Registration No. S/21181 dated 17-1-1990. It has no corpus and endowment funds other than the advances of private and personal funds contributed by members registrants for its housing scheme. It acquired land measuring 7920 square meters (residential plot No. C-1, Sector 51, NOIDA) for construction of dwelling units vide lease deed dated 11-9-2000 executed by NOIDA with CGEWHO. The organisation has constructed various types (AA, A, B and C) dwelling units for its members in Sector 51 NOIDA. The building complex is called 'Kendriya Vihar' with about 1200 dwelling units constructed phasewise from Sept. 1997 onwards. A draft sub-lease deed proposed by CGEWHO has been converted by NOIDA into 'tripartite sale deed of superstructure and sub-lease deed for land'. Objections were raised by the members of the scheme on 30-3-2001 with regard to costs of the dwelling units for imposition of stamp duty on the land and the final costs of the housing scheme. A reply was given by CGEWHO on 3-5-2001 stating that the final cost of the dwelling units will be communicated as and when calculated and that the stamp duties are required to be paid by the members as per Rules, when the land was transferred and thereafter the conversion of the project. The petitioners have prayed for restraining the respondents from forcing the petitioners to execute the tripartite sale deed and to direct them to execute a bipartite sub-lease deed between CGEWHO and the petitioners and to direct respondent No. 3 to register the same at nil consideration.
13. Writ Petition No 9711/2000 has been filed by Jal Vavu Vihar Residents Welfare Group Sanstha. The facts grounds and the reliefs sought in this writ petition are, the same as in writ petition Nos. 30637 of 1999 and 18723 of 2000.
14. Writ Petition No. 2881/2003 has been filed by Kendriya Vihar Residents Welfare Association (KVRWA) A-181, Kendriya Vihar, Sector 51, NOIDA. In this writ petition, the petitioners have prayed for a direction to the President, Central Government Employees Welfare Housing Organisation (CGEWHO) and Chairman, NOIDA, to delete all the clauses in the lease deed dated 11-9-2000 entered into, between NOIDA and CGEWHO on 11-9-2000, which are illegal as alleged in paras 3, 4 and 5 of the writ petition, and retraining them from forcing the petitioners and its members to execute 'the tripartite sale deed of super structure of the plots and sub-lease deed of the land', and commanding them not to take any coercive methods. They have also prayed for a direction, to CGEWHO to give details, final accounts and expenditure incurred on the housing project, as a whole, at Kendriya Vihar Sector 15, NOIDA, and the share of each member of the scheme with the component of land and superstructure separately. They have also prayed for a direction to CGEWHO to execute a bipartite sub-lease deed of land between respondent No. 5 and members of the petitioners at nil consideration and to direct respondent Nos. 1, 2, 3 and 4 to register these bipartite sub-lease deed for land at nil stamp duty.
15. The counsel for the petitioners submit, that the lease deeds executed between NOIDA and the societies provided for a restriction on the lessee to assign, relinquish (except in favour of the lessor) let, transfer or part with possession of the leased premises except by way of sub-lease, as provided in the lease to the Co-operative Society of the members of t he housing schemes sponsered by the lessee, and/or directly to the individual registered members of the housing schemes sponsored by the lessee. Clause 4 provided that the lease deed will form part of the sub-lease executed between lessee and all the Co-operative Society members or individual members of the housing scheme and that all the terms and conditions of the lease deed shall be binding on the sub-lessee.
16. It is contended that the housing societies did not have any corpus or endowment funds of its own. The entire costs of the premium for which the land was taken on lease and the construction was paid by the members to the societies, which are functioning at no profit and no loss basis and contributed towards the entire amount of stamp duty and registration fees payable on the registration of the lease deed. They represent the members collectively, who have agreed to subscribe to the memorandum of association, and bye laws of the society and have paid the entire premium, stamp duty, registration, and the costs of construction of the residential units in instalments. The petitioners have actually subscribed to the lease deed through their societies . Under the covenants of the lease deed, the members of the society had agreed through their society to abide by the terms and conditions of the lease. The society is not owner of the superstructure of the flats/ apartments, as residential units. The individual members have contributed for the entire costs of construction in instalments and allotment letters have been issued by the society in, favour of its members .
17, According to the petitioners, the lease deeds specifically provide that the individual registered members of the housing scheme shall be bound by the terms and conditions of the lease and if sub-leases are executed beteen societies and its members, the terms and conditions contained in the lease deed shall be binding on the sub-lessees.
18. It is further contended that the members allottees are not the first purchasers. They are original owners of the flats/residential accommodations, constructed from the funds contributed by them individually, and they are bound by terms and conditions of the lease deed executed by the society representing them as their agent. The society represents all its members and the lease deed binds all the members of the society both individually and collectively. Section 108(j) of the Transfer of Property Act, 1882 provides that a sub-lease can be executed between the society and its allottees. In such case, fresh rights are not created but are only defined individually. There is no such term in the original lease deed nor any term can be imposed in law by NOIDA directing the petitioners to enter into a tripartite sale and sub-lease of the land.
19. It is also contended that the NOIDA has not contributed towards constructions and has not done any act except for sanctioning the building plans, and thus the direction to execute the tripartite deed by NOIDA for sale of the superstructure of the residential units and sub lease deed for the land, is a superfluous exercise, which is not backed up by any statutory authority. The sale is a transfer of ownership for a price paid or promised or part paid or part promised under Section 54 of the Transfer of Property Act 1882. The NOIDA or the society is not the owner of the superstructure, which has been constructed from the funds contributed by the members/allottees, only. The proposed sale of superstructures in the draft lease deeds by NOIDA, is as such wholly arbitrary and illegal. The petitioners cannot be compelled to sell something which is already owned by them.
20. In the alternative, counsel, for petitioners has submitted that where the subleases have been executed, and where in some cases the tripartite lease deeds have been executed, under ignorance of law, the respondents cannot charge stamp duty as such sub-lease deeds/tripartite agreements do not transfer any property or any right in the property.
21. Counsel for the NOIDA has raised a preliminary objection to the maintainability of the writ petition. He submits that the writ petition against the notice is not maintainable and in any case the controversy raised in the writ petition falls in the realm of contract, which cannot be adjudicated by this Court. He has relied upon the decisions of Supreme Court in National Highways Authority of India v. Ganga Enterprises, (2003) 7 SCC 410 : (AIR 2003 SC 3823); Orissa State Financial Corporation v. Narsingh Ch. Nayak (2003) 10 SCC 261; State of Bihar v. Jain Plastics and Chemicals Ltd., (2002) 1 SCC 216 : (AIR 2002 SC 206); Air India Ltd. v. Cochin International Airport Ltd., (2000) 1 SCC 617 : (AIR 2000 SC 801), World Tel Inc. v. Union of India (2001) 10 SCC 513; Kerala SEB v. Kurien E. Kalathil, (2000) 6 SCC 293 : (AIR 2000 SC 2573); State of Rajasthan v. Anil Kumar Sunil Kumar & Party, (2000) 4 SCC 347 : (AIR 2000 SC 1441); State of Orissa v. Narain Prasad, (1996) 5 SCC 740 : (AIR 1997 SC 1493) and National Textile Corporation Ltd. v. Haribox Swalram, (2004) 9 SCC 786 : (AIR 2004 SC 1998) in support of his submission that the interpretation and implementation of clauses in a contract cannot be the subject matter of a writ petition. Where a term of a contract is violated, ordinarily the remedy is not a writ petition under Article 226 of Constitution of India. He submits that the petitioners have an alternative remedy of filing a suit, in the Court of competent jurisdiction.
22. In the alternative, the counsel appearing for NOIDA submits that the petitioners have consented and agreed to the execution of the sub-lease deed. The lease deeds entered into between NOIDA and the societies clearly stipulate that the sub-lease shall be executed between the societies and the members/allottees, and that such subleases shall abide by the terms and conditions of the lease deed. The provisions of U.P. Industrial Area Development Act 1976 and the Rules/Regulations framed under the Act or any directions issued are binding upon the lessee. The costs of stamp duty and registration charges are to be borne by the lessee. The agreement between NOIDA and the society has an overriding effect over Section 108(j), as Section 108 is applicable in the absence of a contract to the contrary. Section 7 of the U. P. Industrial Area Development Act 1976 authorizes NOIDA in respect of transfers of land under Section 14 of the Act for resuming the site or building in case of any breach of any condition.
23. The Standing Counsel appearing for State respondents states that the members of the petitioners' society have purchased flats from the society/housing co-operatives and have made payment for the transaction, as per the terms and conditions agreed between them. The land was taken on lease by the societies from NOIDA for 90 years. The sale consideration was paid to the societies in advance. These documents are chargeable to stamp duty. Under Section 2(6), "chargeable" under the Stamp Act means, as applied to an instrument executed or first executed after the commencement of the Act, chargeable under the Act, as applied to any other instrument chargeable under the law in force in India, when such instrument was executed or, where several persons executed the instrument at different times, first executed. He submits that the tripartite deed executed between the parties is chargeable to stamp duty on the proportionate cost of the land as well as cost of superstructure.
24. There is a distinction between a contract between two private persons, and a contract where one of the parties is the State, or an instrumentality of the State. In case of a contract, where both the parties are private individuals, no writ will lie in relation to such a contract, and the parties have to be relegated to the alternative remedy of filing a suit or any other remedy, to be availed by them. However, where one of the parties to the contract is the State or an instrumentality of the State, the position becomes totally different. In such a case Article 14 and other provisions of the Constitution will apply as the respondent cannot discriminate or act arbitrarily in respect of such contracts'. In the present case, the substance of the submission of the petitioners allottees is that they have taken on lease the land from NOIDA through the societies of which they are members. These societies did not have any corpus and the entire consideration for the lease was paid by the contributions received from the members. The flats/apartments were constructed by them on a self-finance arrangement in which the amount was paid by allottee-member, in instalments. There was no sale of the land and superstructure in favour of members and thus the direction to execute a tripartite deed, which includes sale of superstructure and for payment of stamp duty of such document is grossly arbitrary, unreasonable and violative of Article 14 of the Constitution of India.
25. It is well settled that the State Government, cannot act arbitrarily. In Sterling Computers Ltd. v. M. & N. Publications Ltd. (1993) 1 SCC 445 : (AIR 1996 SC 51) it has been held that "State action in commercial contractual transactions with private parties must be in consonance with Article 14 of the Constitution." In para 14 of the said judgment the Supreme Court has observed :
"That action or the procedure adopted by the authorities which can be held to be State within the meaning of Article 12 of the Constitution, while awarding contracts in respect of properties belonging to the State can be judged and tested in the light of Article 14 of the Constitution, is settled by the judgments of this Court in the cases of Ramana Davaram Shetty v. International Airport Authority of India, (AIR 1979 SC 1628); Kasturi Lal Lakshmi Reddy v. State of J. & K., (AIR 1980 SC 1992); Fertiliser Corporation Kamgar Union (Regd.) Sindri v. Union of India, (AIR 1981 SC 344); Ram and Shyam Co. v. State of Haryana, (AIR 1985 SC 1147), Hazi T.M. Hassan Rawther v. Kerala Financial Corporation (AIR 1988 SC 157); Mohabir Auto Stores v. Indian Oil Corporation, (AIR 1990 SC 1031) and Shrilekha Vidyarthi v. State of U.P., (AIR 1991 SC 537). It has been said by this Court in Kasturi Lal (1980 (4) SCC 1); (SCC p. 13, para 14) (AIR 1980 SC 1992 at p. 2000, para 14) :
"It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Government therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so."
26. In Tata Cellular v. Union of India, AIR 1996 SC 11 (vide paras 85 and 86) it has been observed :
"It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 12 of the Constitution have to be kept in view while accepting or refusing a lender. There can be no question of infringement of Article 14. The Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus, they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review."
27. In M.I. Builders Pvt. Ltd. v. Radhey Shyam Sahu (1999) 6 SCC 464 : (AIR 1999 SC 2468), the Supreme Court has held that "even in contractual matters the Municipal Corporation cannot act unreasonably or arbitrarily and there can be judicial review of its decision based on Wednesbury unreasonableness principles." A similar view was taken in Monarch Infrastructure Pvt. Ltd. v. Commissioner Ulhanagar Municipal Corporation (2000) 5 SCC 287 : (AIR 2000 SC 2272). In Y. Srinivasa Rao v. J. Veeraiah, AIR 1993 SC 929, it was held that a writ will lie in relation to fair price shops.
28. In Style (Dress Land) v. Union Territory, Chandigarh (1999) 7 SCC 89 : (AIR 1999 SC 3678), the Supreme Court has observed (vide para 12) :
"Action of renewability should be gauged not on the nature of function but public nature of the body exercising that function and such action shall be open to judicial 'review if it pertains to the contractual field.' The State action which is not informed by reason cannot be protected as it would be easy for the citizens to question such an action as being arbitrary."
29. In ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. (2003) 10 JT (SC) 300 the Supreme Court observed (vide para 10) :
"On a given set of facts if a State acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the Court by way of writ under Article 226 of the Constitution." In this decision the Supreme Court considered several earlier decisions and held that Article 14 applies to Government contracts, and a writ will lie if it is violated."
30. In Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai (2004) 3 SCC 214 : (AIR 2004 SC 1815) vide para 17 the Supreme Court has observed :
"It is not as if the requirements of Article 14 and contractual obligations are alien concepts which cannot coexist. Our Constitution does not envisage or permit unfairness or unreasonableness in State action in any sphere of activities contrary to the professed ideals in the Preamble. Exclusion of Article 14 in contractual matters is not permissible in our constitutional scheme."
31. Thus there is a plethora of decisions holding that even in contractual matters a writ will lie, where one of the parties to the contract is the State or is an instrumentality of the State. To hold otherwise would mean that the State, which is otherwise under the mandate of Article 14 of the Constitution of India to act fairly and reasonably can act arbitrarily in the matter of non statutory contracts. There is another reason for not accepting the submissions of the counsel for NOIDA, and to relegate the petitioners to alternative remedy namely, that there are thousands of plots/apartments owners before us in this batch of writ petitions. To hold that only a suit will lie, for the reliefs claimed in these writ petitions, will make the relief nugatory as it will give rise to thousands of civil actions which may take several years to decide and may result in consistent orders or decrees. In the present case all the petitioners have claimed reliefs against the NOIDA, which is an instrumentality of the State, which must act fairly and reasonably, with all the persons with which it is dealing. It would be most appropriate to decide and to settle these purely legal issues raised in these writ petitions, which are pending in this Court since past several years.
32. In all the lease deeds executed by the NOIDA, with the housing society/cooperative society, the covenants in the deeds are common. The lease deeds have settled the land on lease on a premimum for a period of 90 years. Paragraphs 2, 3, 4, 12, 13 and 14, which are almost common in all the lease deeds are quoted as below ;
"2. The lessee will not allot the flat/house to any of the member of the housing scheme sponsored by him, who owns a residential plot/house within the area of NOIDA of Municipal Corporation of Delhi/New Delhi/ Delhi Cantt. The spouse, dependent children will constitute one family unit for the purpose of allotment of residential plot/house in NOIDA/Delhi/New Delhi Cant.
3. That the lessee shall in no case assign, relinquish (except in favour of the lessor), let, transfer or part with possession of the demised premises except by way of sublease as provided in the lease to the Co-operative Society of the members of the housing scheme sponsored by the lessee and/or directly to such individual registered members of the housing scheme sponsored by the lessee, whose list will be provided to the lessor within three months of such transfer. Any subsequent transfer will be made by such members with prior occurrence of the lessor and the lessee and also of the Cooperative Society of the members in those cases where the sub-lessee is granted through the said Society and will be subject to condition of payment of transfer charges as levied from time to time but subject to a maximum of 25% of the unearned increase in the value of the land.
4. This lease deed will form part of sublease executed between ABNHB and Co-operative Society of the members or to individual members of the housing schemes 'All the terms and conditions contained herein shall be binding on the sub-lessee also.
12. That the lessee shall use the demised premises only for the purpose of constructing residential buildings for members of the housing schemes: sponsored by the lessee arid for no other purpose.
13. That the lessee shall not assign, transfer, relinquish (except in favour of lessor) sublet or otherwise part with possession of the demised premises or any part thereof or the house/flat constructed thereon or any part thereof except first to co-operative of its flat members or industrial members of housing schemes, without the previous permission in writing of the lessor. Provided that the lessee may be permitted by the lessor to create a mortgage for purposes of securing loan from State/Central Government/Life Insurance Corporation, Scheduled Bank, U.P. State Housing Board, Housing & Urban Development Corporation Ltd. and similar statutory bodies and in that case the right of mortgages shall as may be provided in the deed of mortgage, accrue to such institution, subject to lessor retaining first charge for recovery of ground rent and other dues, taxes and charge.
14. The lessee shall not be entitled to sub-divide the demised premises or to amalgamate it with any other plot of land."
33. The housing societies, before us are an association of its members, who have subscribed to its bye-laws. The societies represent the interest of its members collectively in terms of the bye-laws. In the present case, the members of the societies have agreed to subscribe to the bye-laws, to procedure land for construction of flats/apartments. After the allotment of land, and execution of lease deed and after payment of premium, the group housing pockets have been constructed, from the contributions/ instalments paid by the allottee-members of the societies. It is not denied that these societies did not have sufficient corpus, and that each of the members contributed to the premium in respect of land and constructions of the flats/apartments, either in full or in instalments, to the societies. Clause 3 of the lease deed between NOIDA and the housing societies/co-operative housing societies, prohibit assignment, relinquishment (except in favour of the lessor), letting transfer or parting with possession of the demised premises, except by way of sub-lease as provided in the lease to the society of the members of the housing scheme sponsored by the lessee and/or directly to such individual registered members of the housing scheme whose list was to be provided to the lessor within three months of such transfer.
34. The subsequent transfers to be made by such members were prohibited until prior concurrence of the lessor was taken, and was to be subject to the condition of payment of transfer charges, to a maximum of 25% of the unearned increase in the value of the land. Clause 4 of the deed provides that the lease deed will form part of the sublease executed between the housing society/ co-operative society and the individual members of the housing schemes. All the terms and conditions contained therein are binding on the sub-leasee. Clause 12 prohibits the use of the demised premises except for the purpose of constructing residential buildings for the members of the housing scheme sponsored by the lessee. Clause 14 prohibits the lessee to sub-divide the demised premises and to amalgamate it with any other plot of land.
35. These covenants of the deeds in our opinion are equally binding upon the members or individual members of the housing scheme, by the conditions of the lease deed. The respondents have pleaded nor set up any case of execution of sub-lease by the societies with its members and individual member. From the facts of the case we gather that each individual member has either been issued a letter of allotment or a deed, witnessing the ownership of the flats/apartments, which have been constructed from out of the contribution/instalments paid by the members.
36. We have examined the various clauses of the lease deed and find that in none of them it is positively stated that the buildings to be erected on the demised land would be in the ownership of the lessors, and that the building would be deemed to have been leased to the lessee along with demised land. In the absence of any such clause, the buildings constructed on the lease land cannot be said to have been demised by the lessor. The lease deeds specifically mention that only the land has been demised. There is no mention that any building was constructed would also form part of the demised property. The land has been leased by NOIDA for the purpose of raising group housing projects, for the members/ societies. The lease deed, however, does not mention that any such constructions were standing or when so constructed, shall be treated to have been demised by the lease deed.
37. The doctrine of the English law, namely that the building should belong to the owner of the land, is not applicable to India. In Dr. K.A. Dhairyawan v. J.R. Thakur 1959, SCR 799 : (AIR 1958 SC 789), it was held by the the Apex Court as follows (Para 6 of AIR):
"The various clauses of the lease are consistent with the ownership in the building being with the lessees in which the lessors had no right while the lease subsisted. In the case of Narayan Das Khettry v. Jatindra Nath Roy Chowdhury, (1926) 54 Ind App 218 : (AIR 1927 PC 135), the Privy Council approved the observations of Sir Barnes Peacock in the case of Thakoor Chunder Poramanick v. Ramdhone Bhuttacharjee, 1866 (6) Suth WR 228, to the following effect :
"We have not been able to find in the laws or customs of this country any traces of the existence of an absolute rule of law that whatever is affixed or built on the soil becomes a part of it, and is subjected to the same rights of property as the soil itself." In the case of Vallabhdas Naranji v. Development Officer, Bandra, (AIR 1929 PC 163) the Privy Council once again referred to Sir Barnes Peacock's observation as stated above. The Privy Council also quoted the following observation of Couch, C.J., in the case of Narayan v. Bholagir, (1869) 6 Bom HC (AC) 80" ........ We cannot, however, apply to cases arising in India the doctrine of the English law as to buildings, viz., that they should belong to the owner of the land. The only doctrine which we can apply is the doctrine established in India that the party so building on another's land should be allowed to remove the materials."
38. Under Section 108(h) of the Transfer of Property Act 1882, before the expiry of the lease a lessee can remove the structures and buildings erected by him on the demised land, as the ownership of the building is with the lessee. Section 108 of the Transfer of Property Act does not provide that the building constructed on the land taken by the lessee shall be handed over on the expiry of the lease without receiving any compensation. The lease deed executed by the NOIDA in the present case authorised construction of buildings (Group Housing Pockets) on the demised premises. The only restriction attached to such constructions is that the buildings shall be constructed in accordance with the plan, elevation, and design, and in a position to be approved by the lessor or any officer authorised by the lessor in that behalf in writing and in accordance with building regulations or directions existing or to exist in future. The other restriction includes commencement of constructions within one year from the date of possession and completion of the same within a period of seven years extendable to ten years, failing which the lease was to be revoked and ten per cent of the amount deposited was to be forfeited. The lease deed provides that in case of breach of any of the conditions of the lease by the lessee or any person claiming through or under it and in particular and without prejudice to the generality of the sub clause, if the lessee transfers, relinquishes, or assigns the whole or part of the demised premises before constructing a building on it, without prior approval of NOIDA within the period stipulated, it shall be lawful for the lessor to determine the lease and re-enter the demised premises and or any part. Sub-clause (a) provides that in that event the lessor may re-allot the demised premises and refund the payment already made with interest after deducting arrears of lease rent and full interest and all instalments in default. Sub-clause (b) provides that at the time of re-entry where the demised premises are occupied by any building constructed by the lessee thereon the lessor shall within a period of three months from the date of reentry remove from the demised premises all erections and placing, fixtures and things which at any time and during the said term shall be fixed or set up on the premises and in default the same shall become the property of the lessor without payment of any compensation to the lessee on the land of the building fixtures and things thereon.
39. In R.G. Hiremath v. T. Krishnappa, AIR 1978 Karnataka 13, the Karnataka High Court held that there may be separation of the ownership of the buildings from the ownership of the land, and there is no rule of law that whatever is affixed or built on the soil becomes a part of which and is subjected to the same rights of property as the soil itself. In reaching to this finding the Court relied upon the following observations of Sir Lancelot Sanderson in Narayan Das v. Jitendranath, (AIR 1927 PC 135) :
......... In India respecting the separation of the ownership of buildings from the ownership of the land, and to the recognition by the Courts in India that there is no rule of law that whatever is affixed or built on the soil becomes a part of it, and is subjected to the same rights of property as the soil itself, their Lordships are of opinion that in order to make a house erected upon the land, as well as the land itself, subject to the Government power of sale for arrears of revenue, special words indicating the intention of the Legislature to make the building subject to sale would be necessary."
40. In this case, we are not concerned with the sub leases or allotment letters or any other documents which may have been executed between the societies as lessee with its members/flat owners. These documents are not before us. We are concerned only within the letters issued by NOIDA to the petitioners to execute a, tripartite sale deed of super structure of flats and sub lease deed of land'. The terms and conditions of proposed "Sale deed for super structure of residential units and sub lease deed of land", acknowledges the consideration of the amount including the cost of super structure and the share of land paid by the allottee to the society. The deed seeks to transfer the dwelling units with sanitary electrical and other fittings along with all rights, easements and appurtenances in the dwelling units along with undivided shares in common portions and passages and common facilities subject to the covenant and conditions given in the deed. This document seeks to impose terms and conditions between the second and third party, namely the society and the member, and to super impose certain terms and conditions unilaterally between them with regard to payment of taxes, charges and other impositions. Clause 4 of this deed provides that the second and third party shall observe the covenant and conditions contained in the lease deed executed between lessor i.e. the NOIDA and the second party. Clause 5 seeks to impose a restriction on sale transfer, assignment or otherwise for a period of ten years except with previous consent of the lessor, which the lessor is entitled to refuse in his absolute discretion. It also seeks to impose a restriction on mortgage of the dwelling units for the purpose of securing in loan except with the prior permission of the lessor in writing. Under Clause 10, the third party, namely the member, is directed to pay all rates, taxes, charges and assessment, in respect of the agreement between the society and the member.
41. The sale deed of the super structure and sub lease deed of the land, proposed and directed to be executed, seeks to impose terms and conditions between the society and its members. It virtually amounts to compelling the allottee members to agree with its society and NOIDA with terms and condition over and above the bye laws to which they have subscribed, and the lease deed executed between the NOIDA and the society. The allottee members, as owners of the flat/apartments, built from the contributions made by these persons cannot be compelled to purchase it from the society. It amounts to compelling a full owner of the flat/apartment to purchase the property already owned by him, from the society of which he is a member and to which it had contributed for purchase of land and for construction of building. Such a transfer will be fictitious and involuntary, and thus a void transaction under the Indian Contract Act. It will be neither a sale under Section 54, nor a lease under Section 105 of the Transfer of Property Act 1882.
42. The counsel for the NOIDA could not point out any statutory provision or any regulation or direction having the force of legislation, either in the U.P. Industrial Area Development Act 1976, or otherwise giving an authority to NOIDA to impose such unilateral conditions. Section 108(j) of the Transfer of Property Act enables a lessee to transfer his leased interest, and enter into a sub lease. In such case the lessee shall not by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease. It, however, does not provide that a lessor may compel the lessee to execute such sub lease, nor do we find any such covenant in the lease deeds.
43. We find substance in the contention of the petitioners that the members of the society as owners of the flats/apartments, are bound by the terms of the lease deed. They have subscribed to the bye laws of the society and to the terms and conditions of the lease deed executed between NOIDA and the societies. They cannot, however, be compelled to enter into the sale of the flat which is already owned by them and to enter into any fresh terms and conditions of allotment of such flat/apartment which are not agreeable to them. The lease deed executed between the NOIDA and the housing society / cooperative housing society does not provide for any such covenant to enter into a fresh sale deed of super structure and for sub lease of the land.
44. All the writ petitions are consequently allowed. The impugned notices published and issued by NOIDA and its officers, directing the petitioners to enter into the tripartite deeds are set aside. The NOIDA and other respondents, are restrained from compelling the petitioners to execute the tripartite sale deed of super structure of flat and sub lease deed of land, and from requiring payment of any stamp duty and registration fees on such documents. No order as to costs.