Madhya Pradesh High Court
Kameshwar Sharma vs The State Of Madhya Pradesh on 25 January, 2018
Author: Vijay Kumar Shukla
Bench: Vijay Kumar Shukla
HIGH COURT OF MADHYA PRADESH : AT JABALPUR
Writ Petition No. 20647 / 2017
Kameshwar Sharma and another .................. Petitioners
- V/s -
State of Madhya Pradesh and others .................. Respondents
Present : Hon'ble Shri Justice Hemant Gupta, Chief Justice.
Hon'ble Shri Justice Vijay Kumar Shukla.
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Shri N.S. Ruprah with Ms. Rajeshwari Tanwar, Advocates
for the petitioners.
Shri B.D. Singh, Government Advocate, for respondent/State.
Shri Anshuman Singh, Advocate for respondents 2 to 4.
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Whether Approved for Reporting :: Yes
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Law Laid down :
The public interest in contractual matters is not maintainable. It is one thing
to say that the State or its instrumentalities or agencies must adopt a
transparent method for disposal of its properties, and another is that after
disposal of the properties in a transparent and fair manner, whether a third
person has a right to interfere in respect of implementation of the terms of
allotment in a public interest litigation. After the Contract, the parties are
governed by the terms of the agreement and if the terms of agreement are not
acceptable to either of the parties, the remedy is available to the aggrieved
party, but interference at the hand of a third person in contractual matters
would create cloud on the right of the parties, which will affect the parties to
perform their contractual obligations. A contract fairly entered into cannot be
under threat at the instance of a third person.
A reading of Rule 23 of Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit
Bhoomiyo, Griho, Bhavano Tatha Anya Sanrachanao Ka Vyayan Niyam,
1975 permits the Authority to recover the amount of installments with
2
Writ Petition No. 20647/2017
interest at the rate of 7% per annum. The installments can be spread over a
period of 5 years, but the said limit is for the Authority to claim the amount
of installments and not a condition for the lease to pay the premium amount
in five years. In respect of a lease, such clause is directory as no consequence
is contemplated against the lessee. The use of word "shall" in a statute,
though generally taken in a mandatory sense, does not necessarily mean that
in every case it shall have that effect, that is to say, that unless the words of
the statute are punctiliously followed, the proceeding or the outcome of the
proceeding, would be invalid.
The determination of the question whether a provision is mandatory or
directory would, in the ultimate analysis, depend upon the intent of the law-
maker. The said intention has to be gathered not only from the phraseology of
the provision but also by considering its nature, its design and the
consequences which would follow from construing it in one way or the other.
The Court is required to consider the nature and design of the statute; the
consequences which would follow from construing it the one way or the
other; the impact of other provisions whereby necessity of complying with
the provisions in question is avoided; the circumstances, namely, that the
statute provides for contingency of the non-compliance with the provisions;
the fact that the non-compliance with the provision is or is not visited with
some penalty; the serious or the trivial consequences, that flow therefrom;
and the factors which are required to be determined whether the provision is
mandatory or directory.
Even if the provision is considered mandatory, the same was for the benefit
of the Authority, therefore, such condition can be waived of and in fact
stands waived of when the Authority demanded interest for delayed
payments.
While exercising the power of judicial review, this Court will not act as a
Court of appeal to take a different view than what has been taken by the
Authority.
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Significant Paragraph Nos: Paragraphs 12, 13, 21 to 35.
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Order reserved on:: 12.01.2018.
3
Writ Petition No. 20647/2017
ORDER
25/01/2018 Per Hemant Gupta, Chief Justice:-
The challenge in the present petition in public interest, is to an order-dated 25.9.2017, passed by respondent No.3 Chairman, Jabalpur Development Authority, Jabalpur (for short "the Authority") whereby respondent No.4 Madhya Pradesh Kesharwani Shiksha Samiti (for short "the Society") was permitted to deposit a sum of Rs.
93,93,699/- within one month and thereafter the Authority was directed to hand over possession of the allotted land to the Society. The said respondent was also directed to pay a sum of Rs.10,000/- (Rupees Ten Thousand Only) per hut existing on the land for the rehabilitation of the occupants at an alternate place.
2- In pursuance to an advertisement issued by the Authority on 31.5.2005 in respect of allotment of Plot measuring 18,866 square meters, for educational purpose, the bid of respondent No.4 - the Society was accepted on 22.8.2005. A regular letter of allotment was issued on 26.10.2005 - Annexure P/6. The total premium amount was Rs.1,15,27,126/- and that a sum of Rs.28,81,782/- as 25% of the amount, was to be deposited on or before 12.9.2005. It is contemplated that if the amount is not deposited within three months or in installments, the lease can be cancelled in terms of Clause 21 of the application form. The Society deposited an amount of Rs.7,50,000/- on 12/22.09.2005; and Rs.
21,31,782/- on 14.10.2005 towards 25% of the initial amount. The 4 Writ Petition No. 20647/2017 Society deposited further Rs.15 Lakhs on 1.8.2007, and the remaining amount of Rs.71,21,991/- on 26.5.2012.
On account of delayed payment, interest amounting to Rs.83,29,397/- and 15% cess amount amounting to Rs.10,64,302/-, totaling Rs.93,93,699/- was to be deposited upto 30.6.2012. The Society challenged the said demand in Writ Petition No.16620/2012. In the said writ petition, direction was issued to the Chairman of Authority on 29.6.2017 to decide the representation in terms of Clause 32 of Madhya Pradesh Nagar Tatha Gram Nivesh Niyam, 1975 (for short the 'Rules'). It is in pursuance of such direction, the impugned order has been passed. 3- The sole argument of learned counsel for the petitioners is that in terms of Rule 23 of the Rules, the balance amount of premium is to be deposited within five years and not any later. Since the balance 75% was not deposited within five years, therefore, the lease granted to the Society is deemed to have been cancelled.
4- Earlier the allotment of the lease was cancelled on 7.8.2008, for the reason that the Society has not deposited the premium amount. The Society submitted a representation that it is ready to deposit the balance amount within 15 days, but Authority has to remove the drain and the illegal occupants/encroachers on the said land. Another notice was issued to the Society on 28.8.2012, calling upon to pay the remaining amount. Against the demand raised, the Society filed a writ petition No. 16620 of 2012 interalia on the ground that there were encroachments and a drain on the land. This Court on 29.6.2017 5 Writ Petition No. 20647/2017 permitted the Society to submit a representation with a direction to the Authority to consider the representation in accordance with the Rules. It is thereafter the impugned order was passed.
5- The petitioners earlier filed Writ Petition No.8712/2013, wherein the Division Bench of this Court passed the following order on 10.7.2014:-
"It is not in dispute that the petitioner has made representation to the concerned Authorities vide Annexure P/9, but has not been communicated about the outcome thereof. In our considered opinion, it is appropriate that the grievance of the petitioner is first examined by some senior official in the Administration such as Commissioner Jabalpur Division, who is also discharging the role as Chairman of Jabalpur Development Authority.
Accordingly, we direct the Commissioner Jabalpur Division/In-charge Chairman of Jabalpur Development Authority to examine the grievance made by the petitioner in representation (Annexure P/9) / any further representation to be made by the petitioner within one week from today, and after due enquiry take appropriate decision as may be advised on each of the points raised by the petitioner in the said representation.
The final decision to be taken by the Commissioner should be by way of a reasoned order, to be communicated to the petitioner before 30/9/14.
If the petitioner is not satisfied with the said decision, will be free to take recourse to appropriate remedy, as may be advised.
Needless to observe that the Commissioner will give opportunity to all concerned before taking final decision.
Petition disposed of, accordingly."
6- In terms of such direction, an order was passed by the Commissioner, Jabalpur Division, Jabalpur on 30.9.2014, rejecting the representation of the petitioners.
6Writ Petition No. 20647/2017 7- The disposal of the land, buildings and other development works within the municipal area is governed by Section 58 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 (for short "the Act"). Such provision contemplates that disposal of the land shall be as per the Rules that may be made by the State Government. In terms of this power conferred under Section 58, the State Government has notified the Rules Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano Tatha Anya Sanrachanao Ka Vyayan Niyam, 1975" (for short the '1975 Rules'). Such allotment was made prior to commencement of M.P. Vikas Pradhikarano Ki Sampatiyon Ka Prabandhan Tatha Vyayan Niyam 2013, repealing 1975 Rules. The parties agree that the allotment of the land to the Society is governed by the 1975 Rules.
8- At this stage, relevant extract of the statutory provisions need to be reproduced. Section 58 of the Act read as under:-
"58. Disposal of land, buildings and other development works - Subject to such rules as may be made by the State Government in this behalf, the Town and Country Development Authority shall, by regulation, determine the procedure for the disposal of developed lands, houses, buildings and other structures."
The relevant extracts from the 1975 Rules are extracted here-in- under:-
"6. xxx xxx xxx (3) Offers to acquire in lease hold rights of a plot of which premium has been fixed shall be accompanied 7 Writ Petition No. 20647/2017 with an amount less than 1/5th of the premium of plot as earnest money. The acceptance of the earnest money shall not be deemed to impose any obligation on the Authority to grant a lease of plot to the person making the deposit. If the offer is accepted, a communication to that effect shall be given to the purchaser when the grant of lease is sanctioned by the Chairman.
(4) If more than one person offer to take on lease the same plot the allotment shall be made by the Chairman after consideration of the circumstances and merits of each case and the decision of the Chairman shall be final.
(5) If the offer to acquire a plot in lease hold rights is accepted by the Chairman in the case of Authority plots or by Government in the case of Government or Nazul the balance of premium shall be deposited with the Authority within 30 days of the communication of the acceptance of the offer except in the cases where payment of the balance of the premium is agreed to be made in installments as prescribed by any general or special order. In the latter case, the lessee shall pay interest at 7 percent per annum on the outstanding balance of the premium calculated from the date on which it fell due till the full payment is made, but the Authority or Government may in its discretion change such rate of interest as it may deem fit.
(6) The annual instalment of the premium in such case shall be payable together with the interest due on the date prescribed for the payment of annual ground rent.
xxx xxx xxx
15. If after communication of acceptance under rule 13, the purchaser refused to purchase or does not deposit the balance within the time prescribed therein, the chairman may cancel the sale and forfeit the amount deposited by the purchaser and auction the plot.
xxx xxx xxx 8 Writ Petition No. 20647/2017
23. The premium payable in respect of any Authority land may be recovered by the Authority in installments spread over a period of years not exceeding 5 with interest with 7 per cent per annum thereon or as may be laid down by the Authority by a general or special order.
xxx xxx xxx
51. If the lessee does not comply with any of the requirements or conditions mentioned above the lease of the plot may be cancelled by the Authority or Government as the case may be and the same may be disposed of in such a manner as the Authority or Government may deem fit at the risk of the lessee. Any loss caused to the Authority or Government whether on account of premium or ground rent, or any other account in consequences of the default made the lessee shall be made good by him and the amount deposited by him is liable to be forfeited or appropriated by the Authority or by the Government as the case may be towards such loss."
9- A perusal of the record shows that the Society was required to deposit 25% of the total premium amount, amounting to Rs.28,82,782/- on or before 12.9.2005. However, an amount of Rs.29,31,782/- was deposited upto 14.10.2005, which includes interest on the delayed payment of Rs.28,81,782/- that was to be deposited on or before 12.9.2005.
10- As per the terms of allotment, the balance amount could be paid within three months or in installments. The society opted to pay the amount in installments, but the remaining amount of Rs.71,21,991/- was deposited on 26.5.2012. It is thereafter that an amount of Rs.83,29,397/- was claimed from the Society for delayed payment and 15% cess 9 Writ Petition No. 20647/2017 amounting to Rs.10,64,302/-, totaling Rs.93,93,699/-. As per the petitioner, the amount could be deposited by the petitioner within 5 years of the date of allotment in terms of Rule 23 of the 1975 Rules, whereas the Society has deposited the principle amount beyond the period of 5 years, thus the amount could not have been accepted. 11- We find that public interest in contractual matters is not maintainable. It is one thing to say that the State or its instrumentalities or agencies must adopt a transparent method for disposal of its properties, and another is that after disposal of the properties in a transparent and fair manner, whether a third person has a right to interfere in respect of implementation of the terms of allotment in a public interest litigation.
12- In a judgment reported as The Managing Director, Orix Auto Finance (India) Limited Vs. Shri Jagmander Singh and another, (2006) 2 SCC 598, the question examined was entertainment of writ petitions by the High Court in public interest, on the question of right to financiers to take possession of the vehicle in terms of the agreement. The Court held that if agreement permits the financier to take possession of the financed vehicle, there is no legal impediment on such possession being taken. Relevant extract reads as under:-
"9. Before we part with the case, it is relevant to take note of submission of learned counsel for the hirer that in several cases different High Courts have passed orders regarding the right to repossess where the High Courts have entertained writ petitions including writ petitions styled as PIL on the question of right of financiers to take possession of the vehicle in terms of the 10 Writ Petition No. 20647/2017 agreement. It is stated that directions have been given to the RBI for framing guidelines in this regard. If it is really so, the orders prima facie have no legal foundation, as virtually while dealing with writ petitions subsisting contracts are being rewritten. It is still more surprising that petitions styled as PIL are being entertained in this regard. Essentially these are matters of contract and unless the party succeeds in showing that the contract is unconscionable or opposed to public policy the scope of interference in writ petitions in such contractual matters is practically non-existent. If agreements permit the financier to take possession of the financed vehicles, there is no legal impediment on such possession being taken. Of course, the hirer can avail such statutory remedy as may be available. But mere fact that possession has been taken cannot be a ground to contend that the hirer is prejudiced. Stand of learned counsel for the respondent that convenience of the hirer cannot be overlooked and improper seizure cannot be made. There cannot be any generalization in such matters. It would depend upon facts of each case. It would not be, therefore, proper for the High Courts to lay down any guideline which would in essence amount to variation of the agreed terms of the agreement. If any such order has been passed effect of the same shall be considered by the concerned High Court in the light of this judgment and appropriate orders shall be passed." (Emphasis Supplied) 13- In another judgment reported as State of Kerala and another Vs. M.K. Jose, (2015) 9 SCC 433, a party to the contract has been invoking the jurisdiction of the writ Court time and again for every aspects of the contract. Though that was a case of invocation of writ jurisdiction by a party to the contract, but it was held as under:-
"12. As the factual narration would reveal, the respondent has been invoking the jurisdiction of the High Court under Article 226 of the Constitution on various occasions 11 Writ Petition No. 20647/2017 challenging every action which pertain to extension of time, denial of revised estimate by the State Government and many other facets of that nature and the High Court, we must say, has been generously passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the contractor and to consider his representation in accordance with law. This kind of orders in a contractual matter, in our considered view, is ill-conceived. They not only convert the controversy to a disturbing labyrinth, but encourage frivolous litigation. The competent authority might have mentioned that more than 50% work remained to be done but that should not have prompted the Appellate Bench hearing the intra-court appeal to appoint a Commission of two advocates and granting them liberty to take assistance of a competent Engineer. As the report would show, the Commission of two advocates have taken assistance of a retired Assistant Executive Engineer and submitted the report. Though, learned counsel for the State had not objected to the same, yet we really fail to fathom how a writ jurisdiction can be extended to cause a roving enquiry through a Commission and rely on the facts collected without granting opportunity to the State to file objections to the same and in the ultimate eventuate, cancel the order of termination of contract. What precisely was the quantum of work done and whether there had been a breach by the owner or the contractor, are required to be gone into by the appropriate legal forum.
13. A writ court should ordinarily not entertain a writ petition, if there is a breach of contract involving disputed questions of fact. The present case clearly indicates that the factual disputes are involved."
(Emphasis Supplied) 14- We find that after allotment of land, the parties are governed by the terms of the agreement and if the terms of agreement are not acceptable to either of the parties, the remedy is available to the aggrieved party, but interference at the hand of a third person in 12 Writ Petition No. 20647/2017 contractual matters would create cloud on the right of the parties, which will affect the parties to perform their contractual obligations. A contract fairly entered into cannot be under threat at the instance of a third person.
15- On merits, the argument of the petitioners is based upon a Division Bench judgment of this Court in the case of Manish Gupta Vs. State of MP and others, reported as 2012 (5) MPHT 497, wherein while considering the 1975 Rules, the Court set aside the allotment of the part of land. In the aforesaid case, land measuring 374.91 acres was allotted to develop residential colony after publication of a tender in the newspapers. 25% of the total premium was to be deposited within 30 days whereas the remaining 75% could be paid either in lumpsum or in six half yearly installments with interest. In the aforesaid case, 25% of the initial premium amount itself was deposited after 2 years and 2 months. Even without payment of the entire premium amount, the bidder received advance booking amount from the customers. The bidder was handed over possession of the entire land measuring 374.91 acres, though it had not deposited the entire sale premium. A lease deed of 71.77 acres alone was executed in favour of the bidder. It was in these circumstances, the Court set aside the sale of land excluding 71.77 acres in respect of which lease was executed.
16- The said judgment is of no help in the present case, where the Society deposited 25% of the premium amount with delay of 1 month or so, but with interest as claimed by the Authority. In respect of 13 Writ Petition No. 20647/2017 the remaining amount, there was a drain on the land as also there were hutments and without relocation of drain and/or the hutments, the Society could not utilize the land for the purpose of allotment. Therefore, the Authority permitted the Society to deposit the balance amount alongwith interest and the cess.
17- The demand of interest and cess was challenged by the Society in the writ petition. The petitioner intervened in the said writ petition. This Court remitted the matter to the Chairman of the Authority in view of Clause 32 of the Agreement, which contemplated that in case of any dispute, the decision of the Chairman of the Authority will be final and acceptable. It is in pursuance of such direction that the impugned order has been passed by the Chairman of the Authority. 18- The order passed by the Chairman of the Authority is a possible view on the basis of facts on record, therefore, such order does not call for any such interference in exercise of powers of judicial review more so for the reasons hereinafter enumerated.
19- A reading of Rule 6 sub-clause (5) of 1975 Rules shows that the balance of premium is to be deposited within the period of 30 days of the communication of acceptance of the offer except in a case where payment of the balance of the premium is agreed to be made in installments as prescribed by any general or special order. If the balance premium is opted to be paid in installments, the lessee is required to pay interest at the rate of 7% per annum of the outstanding balance of the premium calculated from the date on which it fell due till the full 14 Writ Petition No. 20647/2017 payment is made. Therefore, in terms of such clause, the Society was called upon to pay 25% of the amount of premium, but the payment within 30 days was not sacrosanct. In case of delayed payment, interest at the rate of 7% per annum could be claimed and has been charged. In respect of the remaining amount, again the lessee could pay the balance amount with interest at the rate of 7% per annum in terms of sub-clause (5) of Rule 6, of 1975 Rules.
20- A reading of Rule 23 permits the Authority to recover the amount of installments with interest at the rate of 7% per annum. The installments can be spread over a period of 5 years, but the said limit is for the Authority to claim the amount of installments and not a condition for the lease to pay the premium amount in five years. In respect of a lease, such clause is directory as no consequence is contemplated against the lessee.
21- The question whether provision in a statute are directory or mandatory has very frequently arisen before the Courts in India. There is no general rule but in every case the object of the statute must be looked at. When the provisions of the statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty and at the same time would not promote the main object of the Legislature, it has been a practice to hold such provisions to be directory only. The use of word "shall" in a statute, though generally taken in a 15 Writ Petition No. 20647/2017 mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding or the outcome of the proceeding, would be invalid. The Constitution Bench of Supreme Court in State of UP versus Manbodhan Lal Srivastava, reported in AIR 1957 SC 912, has quoted the following quotation from Crawford on 'Statutory Construction' :-
'The question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other.....' 22- In Banwari Lal Agarwalla versus State of Bihar, reported in AIR 1961 SC 849, Constitution Bench of Supreme Court held that no general rule can be laid down for deciding whether any particular provision in a statute is mandatory, meaning thereby that non-
observance thereof involves the consequence of invalidity or only directory i.e., a direction the non-observance of which does not entail the consequence of invalidity, whatever other consequences may occur. But, in each case, the Court has to decide the legislative intent. The Court have to consider not on the actual words used but the scheme of the statute, the intended benefit to public or what is enjoined by the 16 Writ Petition No. 20647/2017 provisions and the material danger to the public by the contravention of the same.
23- In State of Mysore versus V.K. Kangan, reported in AIR 1975 SC 2190, the Supreme Court held that in determining the question whether a provision is mandatory or directory, one must look into the subject-matter and the relation of that provision to the general object intended to be secured. It was held that, no doubt, all laws are mandatory in the sense they impose the duty to obey on those who come within its purview but it does not follow that every departure from it shall taint the proceedings with a fatal blemish. The determination of the question whether a provision is mandatory or directory would, in the ultimate analysis, depend upon the intent of the law-maker. The said intention has to be gathered not only from the phraseology of the provision but also by considering its nature, its design and the consequences which would follow from construing it in one way or the other.
24- In Topline Shoes Limited versus Corporation Bank, reported in (2002) 6 SCC 33, the Supreme Court negatived the argument raised that the State Commission constituted under the Consumer Protection Act, 1986, has no power to accept a reply filed beyond a total period of 45 days. It was held that such provision is not mandatory in nature. No penal consequences are prescribed and the period of extension of time "not exceeding 15 days", does not prescribe any kind of period of limitation. The provision is directory in nature. The provision is more by way of procedure to achieve the object of speedy 17 Writ Petition No. 20647/2017 disposal of such disputes. It is an expression or desirability in strong terms. But it falls short or creating any kind of substantive right in favour of the complainant by reason of which the respondent may be debarred from placing his version in defence in any circumstances whatsoever.
25- In P.T. Rajan versus T.P.M. Sahir and others, reported in (2003) 8 SCC 498, the Supreme Court held that where a statutory functionary is asked to perform a statutory duty within the time prescribed therefore, the same would be directory and not mandatory. It was held to the following effect:-
"45. A statute as is well known must be read in the text and context thereof. Whether a statute is directory or mandatory would not be dependent on the user of the words "shall" and "may". Such a question must be posed and answered having regard to the purpose and object it seeks to achieve.
46. What is mandatory is the requirement of sub-section (3) of Section 23 of the 1950 Act and not the ministerial action of actual publication of Form 16.
47. The construction of a statute will depend on the purport and object for which the same had been used. In the instant case the 1960 Rules do not fix any time for publication of the electoral rolls. On the other hand, Section 23(3) of the 1950 Act categorically mandates that direction can be issued for revision in the electoral roll by way of amendment in inclusion and deletion from the electoral roll till the date specified for filing nomination. The electoral roll as revised by reason of such directions can, therefore, be amended only thereafter. On the basis of direction issued by the competent authority in relation to an application filed for inclusion of a voter's name, a nomination can be filed. The person concerned, therefore, would not be inconvenienced or in any way be prejudiced only 18 Writ Petition No. 20647/2017 because the revised electoral roll in Form 16 is published a few hours later. The result of filing of such nomination would become known to the parties concerned also after 3.00 pm.
48. Furthermore, even if the statute specifies a time for publication of the electoral roll, the same by itself could not have been held to be mandatory. Such a provision would be directory in nature. It is a well-settled principle of law that where a statutory functionary is asked to perform a statutory duty within the time prescribed therefore, the same would be directory and not mandatory. (See Shiveshwar Prasad Sinha versus District Magistrate of Monghyr, AIR 1966 Patna 144;
Namita Chowdhary versus State of WB (1999) 2 Cal LJ 21; and Garbari Union Coop. Agricultural Credit Society Ltd versus Swapan Kumar Jana (1997) 1 CHN 189).
49. Furthermore, a provision in a statute which is procedural in nature although employs the word "shall" may not be held to be mandatory if thereby no prejudice is caused. (See Raza Buland Sugar Co. Ltd versus Municipal Board, Rampur, AIR 1965 SC 895; State Bank of Patiala versus S.K. Sharma, (1996) 3 SCC 364; Venkataswamappa versus Special Dy. Commr (Revenue), (1997)9 SCC 128; and Rai Vimal Krishna versus State of Bihar, (2003) 6 SCC 401)." 26- In a judgment reported as Amardeep Singh Vs. Harveen Kaur, (2017) 8 SCC 746, the Supreme Court held that the Court is required to consider the nature and design of the statute; the consequences which would follow from construing it the one way or the other; the impact of other provisions whereby necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for contingency of the non-compliance with the provisions; the fact that the non-compliance with the provision is or is 19 Writ Petition No. 20647/2017 not visited with some penalty; the serious or the trivial consequences, that flow therefrom; and the factors which are required to be determined whether the provision is mandatory or directory.
"18. In determining the question whether provision is mandatory or directory, language alone is not always decisive. The court has to have the regard to the context, the subject-matter and the object of the provision. This principle, as formulated in Justice G.P. Singh's Principles of Statutory Interpretation (9th Edn., 2004), has been cited with approval in Kailash v. Nanhku [(2005) 4 SCC 480] as follows: (SCC pp. 496-97, para 34) "34. ... 'The study of numerous cases on this topic does not lead to formulation of any universal rule except this that language alone most often is not decisive, and regard must be had to the context, subject-matter and object of the statutory provision in question, in determining whether the same is mandatory or directory. In an oft-quoted passage Lord Campbell said: "No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered.
"'For ascertaining the real intention of the legislature', points out Subbarao, J. 'the court may consider inter alia, the nature and design of the statute, and the consequences which would follow from construing it the one way or the other; the impact of other provisions whereby the necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for a contingency of the non- compliance with the provisions; the fact that the non- compliance with the provisions is or is not visited by some penalty; the serious or the trivial consequences, that flow therefrom; and above all, whether the object of the legislation will be defeated or furthered'. If object of the enactment will be defeated by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory serious general inconvenience will be created to innocent persons without very 20 Writ Petition No. 20647/2017 much furthering the object of enactment, the same will be construed as directory." "
27- In Administrator, Municipal Committee Charkhi Dadri versus Ramji Lal Bagla, reported in AIR 1995 SC 2329, Supreme Court ruled that absence of provision for consequence in case of non- compliance with the requirements prescribed would indicate directory nature despite use of word "shall".
28- In the case of Rao Mahmood Ahmad Khan through Their LR Vs. Ranbir Singh and others, reported as 1995 Supp (4) SCC 275, the Court was examining Rules 285-D to 285-G, of the U.P. Zamindari Abolition and Land Reforms Rules, 1952 (for short the '1952 Rules'). Such Rules contemplate that the purchaser has to deposit 25% of the amount of bid and in default of such deposit; the property shall be resold forthwith. It was under these circumstances that Rule 285 was said to be mandatory.
"8. A perusal of the language employed in Rule 285-D would go to show that it requires the person declared to be purchaser to deposit immediately 25 per cent of the amount of his bid, and in default of such deposit the property shall be resold forthwith and such person who failed to deposit 25 per cent of the bid amount shall be liable for the expenses incurred in the first sale and the deficiency of price, if any, which may occur on the resale would be recovered from such defaulting purchaser as arrears of land revenue. The use of the word 'immediately' in depositing 25 per cent of the bid amount and the expression resale of the property 'forthwith' are equally meaningful and significant. Strictly speaking the requirement of deposit of 25 per cent immediately, by the person declared to be the purchaser may not mean the deposit on fall of hammer within twinkle of an eye and without 21 Writ Petition No. 20647/2017 affording the purchaser even the reasonable time to enable him to make the deposit. According to us the word 'immediately' connotes and implies that the deposit should be made without undue delay and within such convenient time as is reasonably requisite for doing the thing same day with all convenient speed excluding the possibility of rendering the other associated corresponding act and performance of duty nugatory. Here the other associated corresponding act and duty cast upon the officer/authority conducting the sale as envisaged by Rule 285-D is to put up the property for resale 'forthwith' on the failure of the declared purchaser to deposit 25 per cent of the bid amount. The word 'immediately' therefore, connotes proximity in time to comply and proximity in taking steps to resell on failure to comply with the requirement of deposit as first condition that is to take place within relatively short interval of time and without any other intervening recurrence. But it has to be noted that the meaning of the word immediately has to be determined by the context in which it has been used and the purpose for which the statute using the word was enacted. That being so it goes without saying that in the instant case the rule casts an obligation on the purchaser to deposit 25 per cent of the bid amount immediately and if he fails to do so the property shall be resold forthwith.
9. Further Rule 285-D provides resale of the property forthwith on the failure of the purchaser to deposit 25 per cent of the bid amount. The meaning of the word 'forthwith' is synonymous with the word 'immediately' which means with all reasonable quickness and within a reasonably prompt time. It, therefore, necessarily follows that the intention of the legislature is that as soon as it becomes known that the purchaser has failed to deposit 25 per cent immediately after he is declared as purchaser, the property shall be put to resale forthwith without any loss of time or postponement of the date of resale. The provision has been made mandatory because if the property is not resold forthwith and on the same day but later on after a day or two, the sufficient number of purchasers may not be forthcoming and the property may not fetch adequate and fair price to the prejudice of the judgment-debtor. There is yet another reason for making this provision mandatory and it is this that if on the failure of the purchaser to deposit 25 per cent of the bid amount 22 Writ Petition No. 20647/2017 immediately and on the day the person is declared to be purchaser then the sale of the property will have to be postponed to some other date and according to the provisions contained in Rule 25-G reproduced in para 6 above, no sale after the postponement under Rule 285-D in default of payment of the purchase money shall be made until a fresh proclamation has been issued as prescribed for the original sale. It is to avoid this situation and the delay in the sale that a provision under Rule 285-D has been made mandatory and on the failure of compliance of the same the sale becomes a nullity."
29- The provisions of Rule 285-D of the 1952 Rules, were held to be mandatory as it had a default clause that on failure to deposit the amount, the property shall be resold forthwith. But in the 1975 Rules under consideration, there is no such clause in the Rules. Clause 51 of the Rules empowers the Authority to cancel lease, but such cancellation of lease is on the basis of the pre-conditions which are required to be satisfied therein. Therefore, if the lessee has not paid the amount of installments, it cannot be said that the cancellation of lease is the only consequence.
30- The Supreme Court in a case reported as General Manager, Sri Siddeshwara Cooperative Bank Limited and another Vs. Ikbal and others, (2013) 10 SCC 83, was considering The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It was held that Rule 9(1) providing that the purchaser to deposit 25% of the amount of the sale price is mandatory in nature, but the period for payment of balance amount is not sacrosanct and is extendable, if there is written agreement between the 23 Writ Petition No. 20647/2017 parties. It was held that such provision is for the benefit of borrower, whereas Rules 9(3) and 9(4) are for the benefit of the secured creditor. If the provision is mandatory, it can always be waived by a party for whose benefit such provision has been made.
"19. There is no doubt that Rule 9(1) is mandatory but this provision is definitely for the benefit of the borrower. Similarly, Rule 9(3) and Rule 9(4) are for the benefit of the secured creditor (or in any case for the benefit of the borrower). It is settled position in law that even if a provision is mandatory, it can always be waived by a party (or parties) for whose benefit such provision has been made. The provision in Rule 9(1) being for the benefit of the borrower and the provisions contained in Rule 9(3) and Rule 9(4) being for the benefit of the secured creditor (or for that matter for the benefit of the borrower), the secured creditor and the borrower can lawfully waive their right. These provisions neither expressly nor contextually indicate otherwise. Obviously, the question whether there is waiver or not depends on facts of each case and no hard and fast rule can be laid down in this regard."
(Emphasis supplied) 31- A Full Bench of this Court in a judgment reported as Smt. Bhulin Dewangan Vs. State of MP and others, 2000 (4) MPHT 69, held that use of the word 'shall' is normally construed as mandatory, but it is settled that in the context and object of the statute, it can, to effectuate the meaning of the relevant rule or law, be treated as 'may'. The Court also held that the general rule is non-compliance of a mandatory requirement results in nullification of the act, but there are several exceptions to the same. The nullification of the Act, although 24 Writ Petition No. 20647/2017 mandatory, the requirement of conditions can be waived of if any public interest are involved. The relevant extracts read as under:-
"5. Use of word 'shall' in a statute is normally to be construed as mandatory but it is settled that in the context and object of the statute, it can, to effectuate the meaning of the relevant rule or law be construed as 'may'. See the following passage in Principles of Statutory Interpretation, 7th Edition, 1999 by Justice G.P. Singh at page 298, Syn. 6 Clause (e) :--
"The use of word 'shall' raises a presumption that the particular provision is imperative; but this prima facie inference may be rebutted by other consideration such as object and scope of the enactment and the consequences flowing from such construction. There are numerous cases where the word 'shall', has, therefore, been construed as merely directory. "The word 'shall', observes Hidayatullah, J., "is ordinary mandatory but it is sometimes not so interpreted if the context or the intention otherwise demands", and points of Subbarao, J., "When a statute uses the word 'shall', prima facie it is mandatory, but the Court may ascertain the real intention of the Legislature by carefully attending to the whole scope of the statute."
xxx xxx xxx
15. The general rule is that non-compliance of mandatory requirement results in nullification of the Act. There are, however, several exceptions to the same. If certain requirements or conditions are provided by statute in the interest of a particular person, the requirements or conditions, although mandatory, may be waived by him if no public interest are involved and in such a case the act done will be valid even if the requirements or conditions have not been performed.....................The general rule is that a mandatory provision of law requires strict compliance and the directory one only substantial. But even 25 Writ Petition No. 20647/2017 where the provision is mandatory, every non-compliance of the same need not necessarily result in nullification of the whole action. In a given situation even for non-fulfillment of mandatory requirement, the authority empowered to take a decision may refuse to nullify the action on the ground that no substantial prejudice had been caused to the party affected or to any other party which would have any other substantial interest in the proceeding. This Court under Article 227 of the Constitution has also a discretion not to interfere even though a mandatory requirement of law has not been strictly complied with as thereby no serious prejudice or failure of justice has been caused. ........."
32- Thus, even if the provision is considered mandatory, the same was for the benefit of the Authority, therefore, such condition can be waived of and in fact stands waived of when the Authority demanded interest for delayed payments.
33- In the light of the precedents mentioned above, we find that though plot was allotted in the year 2005 and the initial 25% of the amount in terms of the letter of allotment was deposited after 30 days but with interest. Still further, the statutory rules do not contemplate payment of the initial amount within any time frame. Therefore, having accepted the payment alongwith interest, the Authority has rightly not raised a dispute that initial money was not deposited within time. Thereafter, in respect of balance 75% of the amount, sub-clause (5) of Rule 6 and Rule 23 of the 1975 Rules, has to be read together. Rule 6(5) contemplates that in cases where the payment of the balance of the premium is not to be paid within 30 days, the amount can be paid in installments as prescribed by any general or special order. If it is by a 26 Writ Petition No. 20647/2017 special order, the lessee has to pay interest at the rate of 7% per annum on the outstanding balance of the premium calculated from the date on which it fell due till the full payment is made.
34- Rule 23 is in respect of recovery of premium by the Authority in installments with interest at the rate of 7% per annum over a period of years not exceeding 5 years. This limit of five years is for the Authority to claim installments. The Authority is required to fix installments payable over a period of 5 years, but that does not debar the lessee to pay the balance installments of premium even beyond 5 years. Rule 23 puts an embargo on the Authority to claim installments not exceeding 5 years, but there is no embargo on the lessee to pay the premium even after 5 years. A harmonious construction of Rule 6(5) read with Rule 23 is that though the Authority is required to claim installments in a period of 5 years, but if the premium is not paid by the lessee, the lessee shall be liable to pay interest on the delayed amount of the premium.
35- While exercising the power of judicial review, this Court will not act as a Court of appeal to take a different view than what has been taken by the Authority. Reference may be made to the judgment in the case of Tata Cellular v. Union of India, (1994) 6 SCC 651, wherein it is interalia held that the power of judicial review is in respect of decision making process, as under:-
"74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for 27 Writ Petition No. 20647/2017 judicial review is made, but the decision-making process itself.
75. In Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141, 154] Lord Brightman said:
"Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made.
* * * Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power."
In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms:
"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160)."
In R. v. Panel on Take-overs and Mergers, ex p Datafin plc (1987) 1 All ER 564, Sir John Donaldson, M.R. commented:
"An application for judicial review is not an appeal."
In Lonrho plc v. Secretary of State for Trade and Industry (1989) 2 All ER 609, Lord Keith said:
28Writ Petition No. 20647/2017
"Judicial review is a protection and not a weapon."
It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin v. Entry Clearance Officer (1983) 2 All ER 864, Lord Fraser observed that:
"Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made.... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer."
76. In R. v. Panel on Take-overs and Mergers, ex p in Guinness plc (1990 1 QB 146: (1989) 1 All ER 509, Lord Donaldson, M.R. referred to the judicial review jurisdiction as being supervisory or 'longstop' jurisdiction. Unless that restriction on the power of the court is observed, the court will, under the guise of preventing the abuse of power, be itself guilty of usurping power."
36- In view of the said fact, we find that challenge in the present writ petition to an order passed by the Chairman of the Authority is misconceived and not tenable. The view taken by the Authority is a possible view.
37- In view of the above, we find that the procedure adopted by the Authority is not irrational, nor arbitrary or unjust, which may warrant interference in the writ jurisdiction of this Court. 38- Accordingly, the writ petition stands dismissed.
(HEMANT GUPTA) (VIJAY KUMAR SHUKLA)
CHIEF JUSTICE JUDGE
Aks/-
Digitally signed by ANIL KUMAR SHIVARAMAN
Date: 2018.01.24 22:27:49 -08'00'