Rajasthan High Court - Jaipur
Mangey Lal Sharma vs State (U I T )And Ors on 11 October, 2012
Author: Alok Sharma
Bench: Alok Sharma
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH ORDER 1. Ashok Kumar Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12519/2012) 2. Banwari Lal Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12668/2012) 3. Gopal Chand Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12669/2012) 4. Mukesh Kumar Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12670/2012) 5. Om Prakash Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12671/2012) 6. Prakash Chand Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12770/2012) 7. Rajesh Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12761/2012) 8. Jawahar Lal Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12760/2012) 9. Ashok Kumar Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12762/2012) 10. Mangey Lal Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12764/2012) 11. Guru Dayal Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12825/2012) 12. Jaiprakash Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12826/2012) 13. Radhey Shyam Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12925/2012) 14. Lallu Ram Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12926/2012) 15. Manoj Kumar Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.12927/2012) 16. Nand Lal Sharma Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.13154/2012) S. B. Civil Writ Petitions under Article 226 of the Constitution of India. Date of Order: October 11, 2012. PRESENT HON'BLE MR. JUSTICE ALOK SHARMA Mr. Rakesh Kumar, for the petitioners. Mr. R. K. Mathur, Senior Advocate with Mr. Aditya Mathur, for respondents. BY THE COURT:
Since all these writ petitions involve identical issues they are being decided by a common order. The facts of the writ petition No.12519/2012 are being taken as a lead case for disposal of these cases.
The Urban Improvement Trust, Alwar (hereinafter `the UIT') in March, 2008 carved out a special commercial scheme titled Sculptures Welfare Scheme. The purpose of the scheme was to allot a plot each to eligible sculptors to facilitate them in their trade/ business. Pursuant to publication of the Sculptures commercial Scheme, the petitioners herein and others applied for allotment of plots to the UIT by depositing Rs.10,000/- each as security amount. A Committee was constituted by the UIT for conducting a lottery on 1-3-2008 for allotment of plots. A list of eligible successful applicants was thereafter prepared and instructions to deposit 50% of the amount payable were issued. The name of the petitioner was shown at Sr. No.3 in the list successful allottees and plot No.46 measuring 167.22 sq. meters. allotted to him. For this purpose the Secretary, UIT issued a letter dated 5-3-2008 recording the aforesaid fact and requiring him to pay 50% amount of the total consideration of Rs.5,68,548/- for plot No.46 within 45 days. This was computed as Rs.2,86,145/-. The remainder 50% amount (Rs.2,84,274/-) along with 12% interest was to be paid by the petitioner in 59 equated monthly instalments. The petitioner was also to pay interest and penalty as provided in the event of default. In pursuance to the letter dated 5-3-2008, the petitioner aside of Rs.10,000/- earlier deposited along with application for registration, further deposited a sum of Rs.2,86,145/- on 21-4-2008 with the UIT.
Thereafter for over four years subsequent to issue of the letter of allotment and deposit of Rs.2,96,145/- by the petitioner, no further steps were taken by the UIT and the matter remained in a limbo. The continuous entreaties of petitioner to the UIT to proceed with the handing over of the possession of the plot were of no avail. Thereupon on 1-8-2012, the petitioner served a legal notice for demand of justice seeking handing over of the possession of the plot in question and to issue lease-deed, whereupon the petitioner would discharge his liability to pay the remainder amounts as per terms and conditions of the letter of allotment. However the notice for demand of justice also elicited no response. Consequently this writ petition has been filed primarily aggrieved of the arbitrariness of the UIT in not acting upon a concluded contract in respect of the plot allotted to the petitioner in the Sculptures' Scheme, based on an announcement by the Hon'ble Chief Minister of Rajasthan on 29-11-2004. The case of the petitioner is that arbitrariness is founded upon the fortuitous change of the government since the allotment was made in April, 2008.
On notice, the UIT in its reply to the writ petition has admitted the fact of Sculptures' Scheme having been floated. It was however submitted that the entire lottery conducted on 1-3-2008 was suspect, and therefore acting on the allotment made was kept in abeyance. It was submitted that following the lottery conducted on 1-3-2008 various complaints were received from the persons, who claimed to be sculptors but their names were excluded from the draw of lot. It was submitted that a civil suit was also instituted by one Ramautar before the Civil Judge (Junior Division) Alwar challenging the entire process of draw of lots on the ground that all the members of the Committee, required to be present, did not participate in the draw of lot. (However no order adverse to the petitioner by the writ court was brought to the notice of this court). It was also submitted that the draw of lot conducted on 1-3-2008 was never brought before the meeting of the Board of the Trust for approval as per provisions of the UIT (Disposal of Lnad) Rules, 1974 (hereinafter `the 1974 Rules'), nor approval of the Chairman of the UIT obtained. A report was also stated to have been lodged at Police Station Kotwali Alwar i.e. FIR No.189/2009 for the offences alleged under Sections 420, 406, 467, 468 and 471 IPC. It was submitted that in pursuance to said FIR vide letter dated 25-3-2009 the record of allotment of plots in the Sculptures' Scheme was summoned from the UIT by the police. It was further submitted that the proceedings were also pending before the Anti Corruption Bureau and the Additional Superintendent of Police, ACD Alwar vide letter dated 16-8-2012 had required the submission of the entire record before him. It was then stated that one Sooraj Prakash Sharma, who was himself one of the allottees and Secretary of the Moortikar Association Alwar, had filed a complaint and based on his complaint, the Deputy Secretary, UDH Jaipur also required a report from the UIT Alwar. In the aforesaid context, complaint and inquiries, it was submitted that it is not possible for the answering respondent to complete the process of allotment of plots in pursuance to the process of draw of lot dated 1-3-2008 and that the answering respondents were ready to refund the amount deposited by the petitioners. Oddly thereafter it has been asserted in the reply that the security amount as deposited by the petitioners was liable to be forfeited. However the maintainability of the writ petition in the facts of the case as been agitated has not been challenged.
However the respondents failed to clarify as to whether the UIT had a plausible legal ground or jurisdiction within the ambit of law to cancel a concluded contract?
Heard learned counsel for the parties, and perused the material available on record of writ petitions.
One thing that stands out starkingly at the very outset is that in pursuance of a allotment letter dated 5-3-2008 following a lottery on 1-3-2008 the petitioners have deposited substantial amounts as required. At no time during over the last four years the respondent UIT sought to cancel the lottery or renege on the contract nor even attempt to cancel the contract.
Section 4 of the Contract Act, 1872 (hereinafter `the Contract Act') provides that the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made, and that the communication of an acceptance is complete as against the proposer when it comes to the knowledge of the proposer. Section 8 of the Contract Act provides that performance of the conditions of a proposal or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal is an acceptance of the proposal. Section 8 of the Contract Act thus provides that performance of the conditions of a proposal or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal is an acceptance of the proposal.
In the instant case the letter dated 5-3-2008 issued by the UIT on the face of it constituted a proposal. As against the proposal the petitioners deposited the required amount. Under Section 8 of the Contract Act this tantamounted to acceptance of the proposal of the promisee. Therefore a concluded contract came into existence. In my considered view a concluded contract having thus come into force, it was binding on the UIT unless there were allegations of fraud or misrepresentation as against the petitioner, based whereupon requisite declaration from a competent court of law could have been sought. No such fraud or misrepresentation has been alleged against the petitioners. No suit for cancellation of a duly formed contract has been filed. The Hon'ble Division Bench of the Delhi High Court in Govt. of NCT of Delhi Vs. Bhushan Kumar [LPA No.141 and 168/2006 and WP (C) No.2040/2007 decided on 18-3-2008], held that allotment having been made specifically mentioning the area and property number allotted to the applicant and consideration having been paid by the applicant a concluded contract came into existence between the parties. It was held that the terms and conditions of the allotment following a concluded contract can only be modified (novation under Section 60 of the Contract Act) with mutual consent and not unilaterally unless there exists a provision in the law or in the contract itself. Similarly no policy decision could obstruct the operation of a concluded contract. A party to a contract can not unilaterally alter the terms and conditions of the contract. Consequently no escape from the inexorable effect of a contract was available to any of the party to the contract. It was further held that even in cases of unilateral mistake, which was not occasioned by the successful allottees who had acted upon proposal and accepted it a duly concluded contract could not be cancelled. Reference was also made to Section 22 of the Contract Act, which provides a contract is not voidable merely because it was caused under a mistake as to a matter of fact, and where allottes were not guilty of fraud, misrepresentation or unfair dealing, their rights could not be stalled by arbitrary action. In the aforesaid case where the allottees parted with money and deposited the sale consideration with the authority, which was accepted and retained by the authority, (as also in the present case where considerable amounts have been deposited for over last four years) the sanctity of the contract had to be maintained as contrarily the allottees would apart from arbitrary action of the authority also suffer loss and damages in circumstances not of their making.
In the instant case the allottees (the petitioners) have deposited the amount as required and demanded by the UIT, which amount has been accepted and retained by the UIT. A concluded contract has thus come into existence. After acceptance of the amount by the petitioners, the UIT was to hand over the possession of the plots to them. Thereupon the petitioners were to deposit the remainder amount in instalments as agreed between the parties with interest if delay was occasioned.
In the case of Rochees Hotels Pvt. Ltd. Vs. Jaipur Development Authority [AIR 2002 Raj. 316] a Division Bench of this court has taken a similar view with regard to sanctity of a contract. It was held that subsequent to formation of a contract the only manner of challenge to its validity would be in a judicial forum of appropriate jurisdiction. It was held that the JDA could not refuse to discharge its obligation on the ground that the contract in issue was under a cloud and was under investigation by the police. To my mind, the ratio of the aforesaid case is that contractual obligation cannot be kept in abeyance on ground of pendency of criminal investigation, and a contract having been concluded between the parties, the only manner to impugn such a concluded contract would be to take proceedings before a competent civil court for a declaration as to its validity.
A perusal of the reply by the UIT to the case set up by the petitioners is fundamentally based on the lottery of 1-3-2008 being vitiated for a variety of reasonsPrimarily resting not on substance grounds but on suspicion against the lottery conducted on 1-3-2008. Oddly however, the UIT itself has not done anything about the alleged illegalities for over 4 years. The allotment letter were not cancelled, the amounts deposited not refundedeven if at all it could be lawfully done. No proceeding were taken before a competent civil court seeking invalidation of a concluded contract. No action was taken against the officials of the UIT who allegedly allowed conduct of the lottery on 1-3-2008 in an irregular manner and sent letters of allotment on 5-3-2008. Plea of pendency of investigation in a criminal case, in my considered view cannot be an escape from the obligation of the State instrumentality to discharge its obligation under a concluded contract. Mr. Rakesh Meena submitted that Final Report (negativer) was filed in FIR No.189/2009, by Police Station Kotwali Alwar. This was not controverted by the respondents. A State instrumentality cannot be allowed to abandon normal recourse to judicial process and instead advance arguments of suspicion seeking to deflect from the determination of rights otherwise established on the basis of documents before this court.
I also find no substance in the argument of counsel for the UIT that the Committee constituted for draw of lot on 1-3-2008 was incomplete. It has not been stated as to which Committee member was absent at the draw on 1-3-2008 and under which Rule or circular absence of a member at the draw i.e. lottery would vitiate the lottery itself. Counsel for respondents has also not been able to point out, albeit averred in reply to writ petition, as to which rule of the 1974 Rules was violated in the process of conducting of the lottery on 1-3-2008 and the issue of allotment letters on 5-3-2008.
With regard to Sculptures' Scheme itself while in ground (B) it has been stated that the scheme has been abandoned, in ground (d) it has been stated that the scheme has not been finally abandoned. In the course of arguments Mr. R.K. Mathur, learned Senior Advocate however has stated that the scheme has not abandoned. This appears to be the correct position as till the hearing of the writ petitions the allotment of plots to petitioners have not been cancelled and the amount deposited by the petitioners more than four years back has not been refunded to petitioners. In any event of the matter, it would be in place to record that the manner of conducting a lottery for the allotment of plots is a matter of internal management of the UIT. The petitioners were not concerned with the internal management and processes of the UIT. The petitioners have discharged their obligation following the letter of allotment dated 5-3-2008 and made the requisite deposit accepting the conditions of the allotment. It is not the case of the UIT that the petitioners were a party to any fraud or misrepresentation or any other manipulative act warranting this court to eschew exercising its equitable jurisdiction under Article 226 of the Constitution of India in the facts of the present case where a concluded contract has otherwise been found.
A fundamental principle for an orderly society which has been enunciated by the Hon'ble Supreme Court is that of sanctity of contract. Sanctity of contract cannot be allowed to be lost to unilateral actionthat would promote breaches of contract. In the case of ONGC Ltd. Vs. Saw Pipes Ltd. [(2003) 5 SCC 705], the Hon'ble Supreme Court in the context of Arbitration and Conciliation Act, 1940 has held that it is a duty of the Arbitrator to have enforced the compromise which the party made and to uphold the sanctity of the contract which forms the basis of a civilized society. In the case of Barauni Refinery Pragatisheel Shramik Parishad Vs. Indian Oil Corporation Limited [(1991) 1 SCC 4] in the context and backdrop of Industrial Disputes Act, 1947, the Hon'ble Supreme Court has again emphasized that even in conciliation proceedings between the management and its workers a settlement arrived at will be binding on all workers of the establishment, even those who belong to the minority union which had object to the same. The object, the Hon'ble Supreme Court has held was obviously is to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minority union from scuttling the settlement. It is thus evident that sanctity of a contract is inviolable and binding. In case of J.P. Builders Vs. A. Ramadas Rao [(2011) 1 SCC 429]with reference to doctrine of marshalling, which is fundamentally an equitable doctrine, the Hon'ble Supreme Court has held that even the doctrine of marshalling cannot be permitted to become a device for destroying the sanctity of a contract. Contracts thus hold even against equity and only cede to legislation. No legislation has been sit up in deffence in the present case.
Sanctity of contract, is therefore from all accounts a fundamental concept for an orderly society to be safeguarded by the courts. A concluded contract having come into existence on the petitioners' depositing an amount Rs.2,86,145/- including Rs.10,000/- security amount following the allotment letter dated 5-3-2008 issued by the UIT, in my considered opinion the further inaction on the part of the UIT in not complying with the terms and conditions of the allotment letter by not handing over the possession of the plots to petitioners is absolutely arbitrary and unsustainable. Subsequent to the issue of allotment letter dated 5-3-2008, and depositing of the required amount by the petitioners the UIT was bound to hand over the possession of the plots to the petitioners, such that the petitioners would have been able to discharge their further obligation to deposit the remainder amount in 59 equated monthly instalments.
A mere change of government cannot be a cause for change of policy as the State is a continuing body. Politics cannot inform governance where what is done by the previous government is not contrary to statute or palpably arbitrary, Andhra Pradesh Dairy Development Corporation Federation Vs. B. Narasimha Reddy [(2011) 9 SCC 286]. In the instant case the mere fact of the government of the day having changed after the conduct of the lottery on 1-3-2008 and issue of letter of allotment on 5-3-2008 cannot entail denial of the benefits of an allotment made, conveyed and consideration as demanded received from the allottees.
The inaction of the UIT Alwar in not handing over plots allotted to the petitioners wherefor amounts demanded have already been lawfully deposited as demanded by writ petitioners is absolutely arbitrary and unsustainable. The petitioners have not been alleged to be guilty of any fraud or misrepresentation and are thus entitled to the benefits of concluded contracts. The UIT as a state instrumentality cannot be allowed to perpetuate its arbitrary inaction already having availed of deposit of lakhs of rupees for over four years deposited.
Consequently, I would dispose of the writ petitions with the following directions:-
(i) The petitioners should be given possession of land allotted to them under allotment letter dated 5-3-2008, in pursuance of a concluded contract between the allottee and UIT Alwar; the possession of plots be handed over to the petitioners within a period of four months from the receipt of certified copy of this order.
(ii) The petitioners would be liable to strictly adhere to payment of remainder 50% amounts payable towards the cost of plots, subsequent to possession being given, strictly in accordance with terms of letter of allotment dated 5-3-2008.
The writ petitions stand disposed of accordingly.
Stay applications need no address in view of the writ petition itself being disposed of.
(Alok Sharma),J.
arn/ All corrections made in the order have been incorporated in the order being emailed.
Arun Kumar Sharma, Private Secretary.