Punjab-Haryana High Court
Geeta Devi vs Chandigarh Administration, Through ... on 7 September, 1998
Equivalent citations: (1999)121PLR88
Author: Iqbal Singh
Bench: Iqbal Singh
JUDGMENT G.S. Singhvi, J.
1. These petitions have been filed to quash the orders passed by the Assistant Estate Officer, Union Territory, Chandigarh, cancelling the lease of residential sites allotted to the petitioners and forfeiting 10% of the premium plus ground rent and interest.
2. Since the issues of fact and law which arise for adjudication in these cases are similar, we are deciding them by a common order.
3. Petitioner Smt. Geeta Devi, whose land was acquired by the respondents for Capital Project after 1.1.1966, applied for allotment of residential plot under the scheme known as "The Chandigarh Allotment of Sites on Lease-hold basis to the Oustees of Chandigarh Scheme, 1972" (hereinafter referred to as the 1972 Scheme), by stating that she did not own a house or plot in Chandigarh either in her own name or in the name of any dependent family member. Her application was accepted by the administration and she was allotted site No. 2273(P), Sector 44-C, Chandigarh vide memo dated 13.1.1992. After taking possession of the site on 18.3.1992, she applied for sanction for the building plan which was granted by the Chief Administrator vide memo dated 26.6.1992. She completed the construction of building within next year and six months. Thereafter, the Estate Officer, Chandigarh issued occupation certificate to her vide memo dated 4.1.1994 and presently she is residing in the said building. Lease deed was also executed between the petitioner and the Administration of Union Territory on 2.4.1993. After three years of the allotment of plot and over one year of the grant of occupation certificate, the Assistant Estate Officer, exercising the powers of the Estate Officer, Union Territory, Chandigarh, issued notice dated 22.3.1995 under rule 20 of the Chandigarh Lease-hold of Sites and Building Rules, 1973 (hereinafter described as the 1973 Rules) and asked the petitioner to explain her eligibility to be allotted site under the 1972 scheme. The petitioner submitted a detailed reply dated 3.4.1995 running into 12 typed sheets. Thereafter, the respondent No. 3 passed the impugned order cancelling the lease of the residential site allotted to the petitioner on the ground that she has failed to explain her position with regard to her eligibility for allotment of the site under the oustees scheme and also on the ground that she is a wilful defaulter.
4. The petitioners Joginder Singh and others and Ajaib Singh and others, who have filed Civil Writ Petition Nos. 16345 of 1995 and 17647 of 1995, were also allotted residential sites in the years 1991 and 1992 on the basis of applications submitted by them under the 1972 Scheme. They also constructed buildings after obtaining sanction of plans from the competent authority. Occupation certificates have also been issued to them. Thereafter, notices were issued under Rule 20 of the 1973 Rules requiring the petitioners to explain their eligibility to be allotted sites under the 1972 Scheme and after receiving their replies, the Assistant Estate Officer passed stereo type orders cancelling their leases on grounds similar to those incorporated in the order passed in the case of Smt. Geeta Devi.
5. The petitioner's have challenged the impugned order on the ground of non-application of mind, violation of the principles of natural justice and arbitrariness. Their contention is that the Assistant Estate Officer could not invoke Rule 20 of the 1973 Rules for cancellation of the sites allotted to them after construction of the buildings, particularly, when none of them has violated the conditions of allotment or the provisions of the Capital of Punjab (Development and Regulation) Act 1952 and the rules framed thereunder. The petitioners' have also raised the plea of equitable estoppel and have urged that they cannot be deprived of the valuable right to prpperly acquired on the basis of allotments made in the years 1991 and 1992 after the construction of buildings in accordance with the sanctioned building plans. The petitioners have also raised the plea of discrimination by pointing out that similar allotment made to Smt. Hukam Kaur (site No. 2252/44-C), Jarnail Singh and Gurdev Singh, (2253, Sector 44-C), Chaman Lal and Ram Sarup (2254/44-C), and Ajmer Singh (2255/44-C), have not been touched by the respondents.
6. The common stand of the respondents is that the petitioners were not eligible to be allotted plots under the 1972 Scheme because their land was acquired for the development of third phase and not the second phase of Capital Project as contemplated by clause 12 of the 1972 Scheme. To support this assertion, the respondents have relied on the memo no. M-5/STP-95/2930, dated 23.3.1995, written by the Chief Architect, Department of Urban Planning to the Land Acquisition Officer, U.T. Chandigarh, (Annexure Rule 1).
7. After hearing Shri Arun Jain and Shri Ashok Aggarwal, we are convinced that the impugned orders cancelling the lease of residential sites allotted to the petitioners deserves to be invalidated on the ground of violation of principles of natural justice, non-application of mind and equitable estoppel.
8. Admittedly, the petitioners had applied for allotment of the residential sites on the ground that their land had been acquired by the administration for the Capital Project. After examining their eligibility, the concerned authority of the Chandigarh Administration allotted residential sites to them in Sector 44-C and 46-D. They took possession of the sites and raised construction as per sanctioned building plans. They were issued occupation certificates by the Estate Officer. Thereafter, notices under Rule 20 of the 1973 Rules were issued doubting their eligibility to be allotted residential sites under the 1972 Scheme. The petitioners were called upon to explain their eligibility to be allotted land under the said scheme. It was mentioned in the notices that further action shall be taken in case no reply is received within 15 days. Each of the petitioners filed a detailed reply to contest the notice by raising objections similar to the grounds of challenge incorporated in these petitions. However, without even adverting to the replies filed by the petitioners to the notices, the Assistant Estate Officer passed the impugned orders cancelling the lease of the site on the following grounds:-
(i) the lessee has failed to explain his position with regard to his eligibility for allotment of site under the oustee scheme.
(ii) the lessee is in wilful default.
9. Learned counsel for the Chandigarh Administration found it difficult to justify the orders passed by the Assistant Estate Officer. Rather, he has been extremely fair to concede that the impugned orders are totally devoid of reasons. Otherwise also we are convinced that the order passed by the Assistant Estate Officer are liable to be quashed on the grounds of violation of natural justice, equitable estoppel and discrimination.
10. It is a settled proposition of law that every quasi-judicial authority must comply with the rules of natural justice and pass order after considering the material placed before it in an objective manner.
11. The manner in which the quasi-judicial authority should discharge its function has been outlined in the decision of the Supreme Court in Jaswant Sugar Mills Ltd. Meerut v. Lakshmi Chand, A.I.R. 1963 S.C. 677, in the following words:-
"(1) it is in substance a determination upon investigation of question by the application of objective standards, to facts found in the light of pre-existing legal rules;
(2) it declares rights or imposes upon parties obligations affecting their civil rights; and (3) the investigation is subject to certain procedural attributes contemplating an opportunity of presenting its case to a party, ascertainment of facts by means of material if a dispute be on question of fact, and if the dispute be on question of law, on the presentation, of legal argument, and a decision resulting in the disposal of the matter on findings based upon those questions of law and fact".
12. We shall now consider the issue whether the power exercisable by the Estate Officer etc. is quasi-judicial or not. The impugned notices/orders have been issued under Rule 20 of the 1973 Rules. However, the source of power to order resumption of the site or building is traceable in Section 8-A of the 1952 Act. The provisions of Section 8-A of the 1952 Act and Rule 20 of the 1973 Rules reads as under:-
1952 Act. "8. Resumption and forfeiture for breach of conditions of transfer:-
(1) If any transferee has failed to pay the consideration money or any instalment thereof on account of the sale of any site or building or both, under Section 3 or has committed a breach of any other conditions, of such sale, the Estate Officer may, by notice in writing, call upon the transferee to show cause why an order of resumption of the site or building, or both, as the case may be, and forfeiture of the whole or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent of the total amount of the consideration money, interest and other dues payable in respect of the sale of the site or building or both should not be made.
(2) After considering the cause, if any, shown by the transferee in pursuance of a notice under sub-section (i) and any evidence he may produce in support of the same and after giving him reasonable opportunity of being heard in the matter, the Estate Officer may, for reasons to be recorded in writing, make an order resuming the site or building or both, as the case may be, so sold and directing the forfeiture as provided in sub-section (i) of the whole or any part of the money paid in respect of such sale.
1973 Rules:
20. Notwithstanding and without prejudice to other provisions of these rules the Estate Officer may, by notice in writing, cancel the lease and forfeit the whole or part of the premium and ground rent paid in respect thereof which in no case shall exceed ten per cent of the total amount of premium, interest and other dues payable in respect of the site or building or both as the case may be on the ground of default, breach or non compliance of any of the terms and conditions of lease or for furnishing in writing incorrect information under rule 19;
Provided that no order regarding cancellation of lease/forfeiture under this rule shall be made unless the lessee has been given a reasonable opportunity of being heard."
13. A conjoint reading of the provisions quoted above shows that by virtue of the power vested in him under Section 8-A, the Estate Officer can order resumption of the site or building or both and forfeiture of the consideration money if the transferee fails to pay the consideration money or any instalment thereof or commits breach of any other condition of sale. This power can be exercised by the Estate Officer only after giving notice to the transferee to show cause as to why an order of resumption and forfeiture may not be made. Sub-section (2) of Section 8-A casts a duty on the Estate Officer to consider the cause, if any, shown by the transferee in pursuance of the notice issued under sub-section (1) and the evidence which he may produce in support of his case. It also enjoins upon the Estate Officer to give reasonable opportunity of hearing to the transferee and record reasons in writing. Rule 20 begins with a non-obstante clause. It empowers the Estate Officer to cancel the lease and forfeit the whole or part of the premium and ground rent on the ground of default, breach or non-compliance of any of the terms and conditions of lease or on the ground of furnishing incorrect information under Rule 19. It also imposes a duty on the Estate Officer to give a reasonable opportunity of hearing to the lessee. In other words, an order of cancellation of lease and forfeiture of the premium etc. cannot be passed under Rule 20 without complying with the basic rules of natural justice. It can, therefore, be said that the applicability of principles of natural justice has been statutorily engrafted in Section 8-A of the 1952 Act and Rule 20 of the 1973 Rules. In our opinion, even if such provision had not been enacted by the Legislature and the Central Government in exercise of its rule making power, the court would have, looking in the nature of power exercisable by the Estate Of- ficer, held that duty to comply with the rule of audi alteram partem as well as the duty to act fairly is implicit in the statute. In any case, having regard to the explicit language of the provisions quoted above, it must be held that the Estate Officer or the Assistant Estate Officer, exercising the power of the Estate Officer, acts as a quasi-judicial authority and as the orders passed by them for cancellation of lease and forfeiture have grave adverse impact on the rights of the lessees, they are under an obligation to follow all basics of natural justice. This means that before passing an order for cancellation of lease and/or forfeiture of whole or part of the premium and ground rent, the concerned officer is not only required to give notice containing the grounds on which the lease is proposed to be cancelled but also permit the lessee to file written representation and also produce evidence to show that the ground on which the action is proposed to be taken is either erroneous or non-existent. The statute also makes it imperative for the Estate Officer to consider the cause, if any, shown by the transferee/lessee and to record reasons in writing for resumption of the site/cancellation of lease.
14. The expression "reasonable opportunity of hearing" used in Rule 20 has not been defined in the 1952 Act or the 1973 Rules. In the absence of such definition, it will be useful to refer to the judicial precedents interpreting similar expression used in Section 240(3) of the Government of India Act, 1935 and Article 311(2) of the Constitution (unamended). In Secretary of State for India v. I.M. Lall, 1945 Federal Court 47, the majority views was expressed in the following words :-
"In our judgment each case will have to turn on its own facts, but the real point of the sub-section is in our judgment that the person who is to be dismissed or reduced must know that punishment is proposed as the punishment for certain acts or omissions on his part and must be told the grounds on which it is proposed to take such action and must be given a reasonable opportunity of showing cause why such punishment should not be imposed".
15. The ratio of that decision has been applied in Khem Chand v. Union of India, A.I.R. 1958 S.C. 300 : State of Assam v. Bimal Kumar Pandit, A.I.R. 1963 S.C. 1612 and The State of Mysore v. K. Manche Gowda, A.I.R. 1964 S.C. 506.
16. The record of these causes shows that in the notice issued to the petitioners to explain their eligibility to be allotted plots under the oustee scheme, the Assistant Estate Officer had indicated that failure of the petitioners to explain their position will lead to initiation of further action. However, after receiving the reply from the petitioner, he did not issue notices to them proposing cancellation of the lease. Instead he straightaway passed the impugned orders by erroneously presuming that the petitioners had the opportunity to defend themselves against the proposed action. In our opinion, absence of specific notice to the petitioners to show cause against the proposed cancellation of the lease clearly amounts to denial of reasonable opportunity of hearing within the meaning of Section 8-A(2) of the 1952 Act and Rule 20 of the 1973 Rules.
17. Another important requirement of the principles of natural justice, which is reflected in Section 8-A(2) and which the Estate Officer must comply with is that he must pass a speaking order while directing resumption of the site or cancellation of the lease and/or forfeiture of whole or part of the premium along with ground rent. These reasons are also required to be communicated to the lessee. The requirement of recording of reasons and communication thereof has been regarded as an integral part of the concept of natural justice which, as held above, has to be complied with by every quasi-judicial authority. The Courts have insisted on compliance of this branch of natural justice by every quasi-judicial authority because an order passed by quasi-judicial authority is open to be challenged in appeal or revision provided under the relevant statute or by filing writ petition under Article 226 of the Constitution of India. In an appropriate case, appeal under Article 136 can also be filed If the order under challenge does not contain reasons, the appellate or the revisional authority, as also the Superior Courts, will be left to grope in dark about the manner in which the concerned authority applied its mind to the facts placed before it and the contentions urged on behalf of the parties.
18. In Testeels Limited v. N.M. Desai, Conciliation Officer and Anr., A.I.R. 1970 Gujarat 1 (F.B.), Bhagwati, J. (as his lordship then was) speaking for the Bench reviewed various precedents including those of English, American and Australian Courts and then made lucid exposition of law in the following words:-
"There are two strong and cogent reasons why we must insist that every quasi-judicial order must disclose reasons in support of it. This necessity of giving reasons flows as a necessary corollary from the rule of law which constitutes one of basic principles of our constitutional set-up.............................
The condition to give reasons introduces clarity, checks the introduction of extraneous or irrelevant considerations and excludes or, at any rate, minimises arbitrariness in the decision making process; it gives satisfaction to the party against whom the order is made and guarantees consideration of all relevant factors and discharge of his functions by the officer in accordance with the requirement of law..............................
Another reason of equal cogency which weighs with us in spelling out the necessity for giving reasons is based on the power of judicial review which is possessed by the High Court under Article 226 and the Supreme Court under Article 32. The High Court under Article 226 and the Supreme Court under Article 32 have the power to quash by certiorari a quasi-judicial order made by an administrative officer and this power of review exercisable by issue of certiorari can be effectively exercised only if the order is a speaking order and reasons are given in support of it. If no reasons are given, it would not be possible for the High Court or the Supreme Court exercising its power of judicial review to examine whether the administrative officer has made any error of law in making the order. It would be the easiest thing for an administrative officer to avoid judicial scrutiny and correction by omitting to give reasons in support of his order. The High Court and the Supreme Court would be powerless to interfere so as to keep the administrative officer within the limits of the law. The result would be that the power of judicial review would be stultified and no redress being available to the citizen, there would be insidious encouragement to arbitrariness and caprice. The power of judicial review is a necessary concomitant of the rule of law and if judicial review is to be made an effective instrument for maintenance of the rule of law, it is necessary that administrative officers discharging quasi-judicial functions must be required to give reasons in support of their orders so that they can be subject to judicial scrutiny and correction."
19. We may now notice sortie decisions of the Apex Court which lay down the proposition that every quasi-judicial and administrative authority must record reasons for their decision. In Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala, A.I.R 1961 S.C. 1669, a constitution Bench of the Supreme Court dealt with a case involving challenge to the order passed by the Central Government in exercise of its appellate powers under Section 111(3) of the Companies Act, 1956. While quashing the order of the Central Government, the court held :-
"If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Article 136 of the Constitution we fail to see how the power of this Court can be effectively exercised if reasons are not given by the Central Government in support of its order".
20. In Madhya Pradesh Industries Ltd. v. Union of India, A.I.R. 1966 S.C. 671, the majority judgment distinguished the earlier decision of the Constitution Bench in Harinagar Sugar Mills case (supra) by observing that the Central Government had reversed its decision appealed against without giving any reasons and the record did not disclose any apparent ground for the reversal. After making these observations, the majority judgment proceeded to uphold the older of affirmance passed by the appellate authority. In his dissenting judgment, Subba Rao, J. as his Lordship then was, observed:-
"In the context of a welfare State Administrative Tribunal's have come to stay. Indeed they are the necessary concomitants of a welfare State. But arbitrariness in their functioning destroys the concept of a welfare State itself. Self-discipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantee consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness, it gives satisfaction to the party against whom the order is made: and it also enables an appellate or supervisory court to keep the tribunals within bounds. A reasoned order is a desirable conditions of judicial disposal."
21. In Bhagat Raja v. Union of India and Ors., A.I.R. 1967 S.C. 1606, legality of an order passed by the Central Government in exercise of its revisional powers under Section 30 of the Mines and Minerals (Regulation and Development) Act, 1957, read with Rules 54 and 55 of the Mineral Concession Rules, 1960, was challenged. One of the contentions urged on behalf of the respondents was that Rule 55 does not enjoin upon the government to give reasons and, therefore, the order cannot be invalidated due to 'absence of reasons'. While rejecting the argument, their Lordships of the Supreme Court observed :-
"Our attention was drawn in particular to Rule 26 of the Mineral Concession Rules which enjoined upon the State Government to communicate in writing the reasons for any order refusing to grant or renew a mining lease. The absence of any provision in Rule 55 for giving such reasons was said to be decisive on the matter as indicative of the view of the legislature that there was no necessity for giving reasons for the order on review. We find ourselves unable to accept this contention. Take the case whore the Central Government sets aside the order of the State Government without giving any reasons as in Harinagar Sugar Mills case. The party who loses before the Central Government cannot know why he had lost it and would be in great difficulty in pressing his appeal to the Supreme Court and this Court would have to do the best it could in circumstances which are not conducive to the proper disposal of the appeal. Equally, in a case where the Central Government merely affirms the order of the State Government, it should make it clear in the order itself as to why if it is affirming the same. It is not suggested that the Central Government should write out a judgment as a courts of law are went to do. But we find no merit in the contention that an authority which is called upon to determine and adjudicate upon the rights of parties subject only to a right of appeal to this Court should not be expected to give an outline of the process of reasoning by which they find themselves in agreement with the decision of the State Government. As a matter of fact, Rule 26 considerably lightens the burden of the Central Government in this respect. As the State Government has to give reasons, the Central Government after considering the comments and counter-comments on the reasons given by the State Government should have no difficulty in making up its mind as to whether the reasoning of the State Government is acceptable and to state as briefly as possible the reasons for its own conclusion."
22. After making reference to the decision in Madhya Pradesh Industries Case (supra), their Lordships of the Constitution Bench held :-
"After all a tribunal which exercises judicial or quasi-judicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of parties of far-reaching consequences to them are adjudicated upon a summary fashion, without giving a personal hearing when proposals and counter, proposals are made and examined, the least that can be expected is that the tribunal shall tell the party why the decision is going against him in all cases where the law gives a further right of appeal".
23. In Travancore Rayon Ltd. v. Union of India, A.I.R. 1971 S.C. 862, the requirement of recording of reasons and communication thereof has been highlighted in the following words :-
"The Court insists upon disclosure of reasons in support of the order on two grounds: one that the party aggrieved in a proceedings before the High Court or this Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous: the other that the obligation to record reasons operates as a deterrent against possible arbitrary action by the executive authority invested with the judicial powers".
In Mahabir Prasad Santosh Kumar v. State of U.P., A.I.R. 1970 S.C. 1302, an order passed by the District Magistrate cancelling the licence granted under the U.P. Sugar Dealers Licensing Order, 1962, without giving reasons and the appellate order passed by the State Government were set aside by the Supreme Court with the following observations:-
"recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just".
24. In Woolcombers of India Ltd. v. Woolcombers Workers Union, A.I.R. 1973 S.C. 2758, the Apex Court quashed the award passed by the Tribunal on the ground of absence of reasons and observed :-
"The giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Second, it is a well-known principle that justice should not only be done but should also appear to be done. Unreasoned conclusion may be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi-judicial authorities to this Court by special leave granted under Article 136. A judgment Which does not disclose the reasons will be of little assistance to the Court."
25. In S.N. Mukherjee v. Union of India, A.I.R. 1990 S.C. 1984, a Constitution Bench again reviewed the law on the subject and then laid down the following principles :-
"Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi-judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighted with this Court in holding that an administrative authority must record reasons for its decision are of no significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decisions-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge."
(Underlining is ours)
26. Similar views have been expressed in State of Gujarat v. Patel Raghav Natha and Ors., A.I.R. 1969 S.C. 1297: Ajanatha Industries and Ors. v. Central Board of Direct Taxes, New Delhi and Ors., A.I.R. 1976 S.C. 437; Siemens Engineering & Manufacturing Co. of India Limited v. Union of India, A.I.R. 1976 S.C. 1785: Raipur Development Authority etc. etc. v. Chokhamal Contractors etc. etc., A.I.R. 1990 S.C. 1426; Workmen of Meenakshi Mills Ltd. and Ors. v. Meenakshi Mills Ltd. and Anr., (1992)3 S.C.C. 336 and Krishna Swami v. Union of India and Ors., (1992)4 S.C.C. 605.
27. Having noticed the relevant statutory provisions and the judicial precedents which have direct bearing on the nature of power exerciseable by the Assistant Estate Officer, we shall now scrutinise the impugned orders in order to decide whether they meet the requirement of speaking order. Perusal of the record shows that in reply to the notices issued by the Assistant Estate Officer under Rule 20, each of the petitioners filed detailed reply not only to justify the allotment of plots to her/him but also challenged the jurisdiction of the Assistant Estate Officer to question their eligibility to be allotted plots under the 1972 Scheme. They also raised the plea of discrimination by pointing out that the administration had adopted the methodology of pick and choose for cancellation of the lease. However, without even making reference to the reply filed by any of the petitioners and without dealing with the points raised by them, the Assistant Estate Officer mechanically passed the order of cancellation by stating that the lessee has failed to explain his position on the issue of eligibility for allotment of site under the oustees scheme. We have perused the original record produced by the learned counsel for the respondents which contains applications filed by the petitioners for allotment of land under the 1972 Scheme, the allotment letters, the applications submitted for sanction of building plans, the sanctions issued by the competent authority, the occupation certificates and copies of stereo-type orders passed by the Assistant Estate Officer. The language of all the orders is identical. So much so, the Assistant Estate Officer did not even bother to change the gender of the words used in the orders passed qua the petitioners Smt. Geeta Devi, Smt. Prem Devi and Ms. Charan Kaur. Moreover, the impugned orders are conspicuously silent on the objections raised by the petitioners to the maintainability of the notices. There is no discussion on the petitioners plea that they are eligible to be allotted plots under the 1972 Scheme. The officer concerned has also not dealt with the plea of discrimination. He has not held that the petitioners made misrepresentation or played fraud for securing allotment of plots. It is, thus, evident that instead of discharging his duty to pass speaking order after considering the points raised by the petitioners to the tenability of notices issued to them and their plea of discrimination, the Assistant Estate Officer recorded bald conclusions that the petitioners have not been able to establish their entitlement to be allotted plots under the 1972 Scheme and that they are wilful defaulters. The manner in which the Assistant Estate Officer conducted himself in these matters and passed orders totally devoid of reasons leaves much to be deserved. We, therefore, hold that the impugned orders are liable to be declared void on the ground of violation of the principles of natural justice.
28. We also agree with Shri Jain that the action initiated by the respondents to cancel the allotment made in favour of the petitioners is without jurisdiction.
29. A bare reading of Rule 20 quoted above shows that the Estate Officer can initiate action for cancelling the lease and forfeiture of the whole or part of the premium etc. on the ground of default, breach or non-compliance of any of the terms and conditions of lease or on the ground of furnishing incorrect information under Rule 19. If we read the notices dated 22.3.1995 issued to the petitioners along with the impugned orders, it becomes clear that the action was not initiated against the petitioners on the allegation of default in payment of instalments etc. or on the allegation of breach of the terms and conditions of the lease or on the ground of furnishing incorrect information under Rule 19 of the 1973 Rules. Rather, the explicit ground on which the notices were issued to the petitioners was that they were allotted land under the 1972 Scheme because their land was acquired for the development of third phase of Chandigarh city. This is not one of the grounds specified in Rule 20 on which action can be initiated for cancellation of the lease etc. In view of this, we hold that the notices issued to the petitioners are ultra vires to Rule 20 of the 1973 Rules.
30. The contention of the learned counsel for the petitioners that the Assistant Estate Officer passed the impugned orders without application of mind also deserves to be accepted. At the cost of repetition, we deem it necessary to mention that the concerned officer neither referred to the reply filed by any of the petitioners nor did he decide the objections raised by them. Instead, he recorded a bald and presumptuous conclusion that the petitioners have failed to prove their entitlement to be allotted plots under the 1972 Scheme. As a matter of fact, he decided the entire matter with a close mind. This inference of ours is amply supported by memo No. 2607-UTFI(5)-94/10940 dated 11.8.1994 sent by the Finance Secretary, Chandigarh Administration to the Estate Officer, Chandigarh. The same reads as under:-
"From The Finance Secretary
Chandigarh Administration.
To The Estate Officer,
Chandigarh.
Memo No. 2607/UTFI(5)-94/10940
Dated Chandigarh the 11.8.94.
Subject: Allotment of sites to the oustees of Chandigarh Allotment of sites on lease hold basis to the oustees of Chandigarh Scheme 1972.
Reference your Memo No. 2007/5AOS/Policy/94 dated 24.5.94 on the subject noted above.
2. This administration agrees with the proposal made in your communication under reference as the allotment in these cases can be cancelled after providing due opportunity of hearing to the allotees of these plots under the rules. You are, therefore, requested to take further necessary action to cancel the allotment made in these cases accordingly under intimation to this Administration.
Sd/-
Superintendent Finance-I for Finance Secretary, Chandigarh Admn."
31. Though, this letter speaks of giving of opportunity of hearing to the allottees, in our opinion, such hearing was nothing but a farce because the Assistant Estate Officer, who was much lower in the hierarchy of administration, could not dare to ignore the fact that the higher authorities have given the green signal to the proposal of the Estate Officer to cancel the allotments made to the petitioners. Thus, there was no scope left for him to apply his mind independently before passing the orders of cancellation. In fact, the entire exercise was reduced to an empty formality and the order of cancellation was a foregone conclusion.
32. The non-application of mind by the Assistant Estate Officer is evident from the fact that the clear and categorical plea of discrimination raised by the petitioners has been altogether overlooked by the Assistant Estate Officer. Even in the written statements filed before this Court, the averments made in the writ petitions showing that the plots allotted to Smt. Hukam Kaur and S/Shri Jarnail Singh, Chaman Lal and Ajmer Singh have not been cancelled have remained uncontested. In the absence of any explanation by the respondents why they adopted the policy of pick and choose, it must be held that the impugned orders are discriminatory and violative of Article 14 of the Constitution.
33. The observation made by the Assistant Estate Officer that the petitioners are willful defaulters is clearly unwarranted and extraneous and violative of the principles of natural justice because the only ground on which notices were issued to the petitioners for cancellation of the lease was that they were not eligible to be allotted residential plots under the 1972 Scheme. Since they had not been charged with the allegation of default in the payment of instalments or other dues, the petitioners did not have the opportunity to contest this charge and to show that they had paid due instalments and nothing was outstanding against them. In the absence of such notice, the Assistant Estate Officer was not justified in recording an observation adversely affecting the petitioners. In law, the failure of the Assistant Estate Officer to give notice and opportunity of hearing to the petitioners in respect of the allegation of default will have to be treated as an act of condemning them unheard.
34. The question whether the respondents are estopped from cancelling the lease granted to the petitioners deserves to be examined in the backdrop of the admitted facts that the residential plots were allotted to the petitioners in the years 1991 and 1992 after scrutiny of the applications submitted by them. The petitioners neither misled the authorities of the Chandigarh Administration nor did they conceal any fact from them. They took possession of the plots after paying 25% of the total price. Later on, they constructed buildings after obtaining sanction of their plans from the competent authority. They wore also granted occupation certificates by the competent authority. Each one of them spent lakhs of rupees for construction of the residential houses. After all this had happened, some one in the estate Officer appears to have initiated action for cancellation of the lease on the ground that the petitioners were not eligible to be allotted plots under the 1972 Scheme because their land was acquired for development of third phase of Chandigarh city and not the second phase. The Finance Secretary, Chandigarh, to whom reference was made by the Estate Officer approved the proposal for cancellation of leases without giving notice to the petitioners and thereafter the Assistant Estate Officer enacted a farcical show of compliance of the principles of natural justice. In our opinion, the allotment of plots made to the petitioners by the competent authority will have to be treated as a valid promise made to them that they may raise construction and enjoy the property on payment of price indicated in the letters of allotment. The petitioners acted on this promise and raised construction after obtaining sanction of the building plans and they have been residing in the houses construction between the years 1992 to 1994. This is sufficient to invoke the doctrine of promissory and equitable estoppel for nullifying the orders of cancellation of the leases passed by the respondents. The administration of the Union Territory, in our considered view, cannot back out from the promise made to the petitioners about their entitlement to hold the property and deprive them of the houses after each of them spent lakhs of rupees for construction. In support of this, we may usefully refer to the decisions of the Supreme Court in Motilal Padampat Sugar Mills Co. (P) Ltd. v. The State of U.P. and Ors., A.I.R. 1979 S.C. 621: The Gujarat State Financial Corporation v. Lotus Hotels Private Ltd., A.I.R. 1983 S.C. 848 and Union of India and Ors. v. Godfrey Phillips India Ltd. A.I.R. 1986 S.C. 806 and a decision of this Court in M/s Nestle India Ltd. and Anr. v. State of Punjab and Ors., (1998-3)120 P.L.R. 367 (C.W.P. No. 9974 of 1997) decided on 18.5.1998.
35. In view of the above conclusions, it is not necessary to deal with the arguments of the learned counsel on the interpretation of various clauses of 1972 Scheme.
36. For the reasons mentioned above, the writ petitions are allowed. The orders of resumption passed by the Assistant Estate Officer are quashed. The petitioners shall get costs of Rs. 5,000/- each for the harassment suffered by them at the hands of the respondents. The respondents shall be free to recover the amount of costs from the officer(s) who may be found responsible for having initiated wholly illegal and unjust proceedings for resumption of the sites after the petitioners had constructed the buildings.