JAGDISH CHAND RADHEY SHYAM versus THE STATE OF PUNJAB AND OTHERS

Citation: [1973] 2 S.C.R. 97 · Decided: 06-09-1972 · Supreme Court of India · Bench: A.N. RAY · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
JAGDISH CHAND RADHEY SHY AM 
v. 
THE STATE OF PUNJAB AND OTHERS 
September 6, 1972 
97 
B 
[A. N. RAY, f. D. DUA AND K. K. MATHEW, JI.] 
Constit11tio11 of India-Articles 14 and 19(1) (/) 
Capital of P1miab 
(Development a11d Regulation) Act 1952-Section 9, forfeiture of the 
who!<! or any part of considtration money for brcac/1 of non-payment 
of rile balai1ce-Whether violative of Art. 14 of tlte Consrit11tion of lndia-
Res11mption of site for unpaid consideration mo:rcr-Wlwlter riolntcs 
C 
Artie/~ 14 of the Constitution, 
D 
E 
F 
G 
H 
Section 9, resuntption of .titt fo"' unpaid considerarion an1011nt ii·lrct'lie1 
violates Article 19(1) (/) of tire Cons1itutio11. 
The appellant purchased a site at a public auction for Rs. 94.000. ·-. 
~5% of the price, j.e. Rs. 23,500/. was paid at th~ site and the balance 
was to be paid in three equal instalments. The appellant paid a further 
sum 
of Rs. 
21,992/-
towards 
the 
first 
instalment. 
Two instal-
me.1ts 
of 
Rs. 25,615 /-
each and sum of Rs. 3.623 /-
being the 
balance sum of the first instalment were not paid by the appellant. The 
Estate Officer. in exercise of powers under section 9 of the Capilal of 
Punjab (Development and Regulation) Act. 1952. resumed the site and 
forefeited the. amount of Rs 42,728.01 paid hv Lhe appellant. 
After cx-
haust'ng his remedies under the Act, the appellant challenged the validity 
of the orders and vires of Section 9 of !he Act on the ground that pro-
\ isions Of Section 9 regarding forfeiture of the instalmentc; paid dnd the 
rc'iumption Of the auction site were violative of Article 14. 
The power 
of resumption of site uneer section 9 was also challenged as uncon•titu-
tional on the ground that it imposed unreasonable restriction on the ri~ht 
to property violatinR Article 19(1) (fl of the Constitution. The Punjab 
High Court held that the Government had ri~ht to resume the site as 
they were the owners and till all the instalmeots "ere not 
paid. 
the 
title did not pass to the auction purchser. 
The Hi~h Court also held 
thJt as the Government havf! power to recover the due an1ount as arrear!; 
of land revenue, resumption of site was not illeR•l. 
HELD : Th.e prohibition in Section 3 of the Act 
against 
sale. 
"!ortgage o_r .transfer. by the auction purchaser except with the 
pre-
vtous penmss1on of the Estate Officer of any ri~ht. title or interest in 
the site or building. recognises the ownership riRhls of the purclhaser-
The Government is only entitled to a char~e on lhe propertv for the 
?npaid portion of the consideration 
money. 
A charge on property 
1s under the Transfer of Property Act enforced bv instituting a suit 
anti 
bringing property to sale. 
Section 8 of the Act provides another 
power to the Government to recover the unpaid money as arrears of 
land revenue. [100 E-101-AJ 
!!ction ll of the Act empowers the Government to forfeit the whole 
or any part of the money in case of non-payment 
of 
consideration 
money or instalments or other dues ·or breach of covenants. 
Under 
the' ordinarv law of the land, there is relief against forfeiture for breach 
of cownant. 
Section 9 does not offer any relief against forfeiture. The 
Go\-el'nment can proceed either under the Transfer of Property Act 
8-L348Sup.C.I./73 
98 
SUPREME COURT REPORTS 
[1973] 2 S.C.lt. 
or under the present Act without any guidelines provided in the statute. 
This tea.turc makes section 9 discriminatory and violative of Article 
14 of the 
Constitution of India. 
Section 9 also confers power tn resume the site. 
Where there is 
a charge, the same can be enforced by instituting a suit in a court of 
Jaw under Trnnsfcr of Property Act. 
The owner will have an oppor-
tunity of paying the money and clearing the property of the charge. 
No such opportunity of clearing the charge is possible under sea:on II 
cf the Act. There is no guideline in the Act as to when the Government 
will resort to resumption of site or forfeiture of monies. 
The Govem-
mav choose without any guideline and d:scriminate in proceeding agaimr 
one penon in one manner and a second <>ne in o•hcr manner. 
In the teeth of !tatutory •ecurity and enforceability of the Govem· 
ment charge in preference to others, it is totally unreasonable restriction 
on the enjoyment of property by resuming site for defaults in payments 
of money and forfo;tlng the monies paid by the transferee. Section 9 
violates Article 19( I) (f). [IOIC-!02A] 
C1v1L APPELLATE JURISDICTION : Civil Ap

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