M/S. TERI OAT ESTATES (P) LTD. versus U.T. CHANDIGARH AND ORS.

Citation: [2003] SUPP. 6 S.C.R. 1235 · Decided: 19-12-2003 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Disposed off

Judgment (excerpt)

M/S. TERI OAT ESTATES (P) LTD. 
v. 
U.T. CHANDIGARH AND ORS. 
DECEMBER 19, 2003 
(V.N. KHARE, CJ. AND S.B. SINHA, J.] 
Capital of Punjab (Development and Regulation) Act, 1952-Section 
8~A7Chandigarh Lease Hold of Sites and Building Rules, 1973-Power 
of resumption of/and/building and forfeiture of money deposited on default 
A 
B 
in making due payment-Application of-Held: Power of resumption and C 
forfeiture is to be taken recourse to as a last resort-Its application 
depends upon the factual situation in each case-No hard and fast rule 
can be laid down-It should not be violative of Article 14-In case of 
extreme hardship faced by the party, power of resumption is not resorted 
to and in such a situation doctrine of proportionality is applied-However, D 
if dishonest intention of the allottee in not making due payment is 
established, recourse to section 8-A is justified-On facts allottee de-
faulted/delayed in making payment of instalments, interest and ground 
rent, but default not wilful-However, his conduct in not making an 
endeavour to pay within reasonable time deprecated as such directed to 
pay Rs. 15 lakhs-Constitution of India, 1950-Article 14-Administrative E 
Law. 
Constitution of India, 1950-Article 142-Extra ordinary jurisdic-
tion-When there is failure to establish a legal right, Court cannot pass 
an order on the ground of sympathy or sentiment. 
F 
Appellant purchased land on lease-hold basis in auction. Purchase 
amount was to be paid in lump-sum and/or in four yearly instalments. 
25% of the allotment price was to be deposited within 30 days of 
auction and upon complinnce Estate Officer issued allotment letter in 
favour of the appellants. In terms of the letter 7% interest was leviable G 
on the balance 75% premium in three equal instalments together with 
ground rent. Clause 8-A of the allotment letter stipulated 12% levy of 
interest per annum, penalty and power of resumption on delayed 
payment of instalments upon grant of opportunity of being heard. In 
the event of non-payment 12% interest could be enhanced to 15% ard H 
1235 
1236 
SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R. 
A,. then 24%. Appellant entered into possession of the property and 
constructed six storied hu!lding including basement floor. Appellant 
did not pay the first inslalment. However, it is stated that the appellant 
deposited Rs. 6,00,000 out of the total slim of Rs. 8,91,960 towards the 
amount due as also ground rent from time to time. Meanwhile, Estate 
B Office issued notice to the appellant that it did not deposit the second 
instalment. After a lapse of three years, Estate Officer informed the 
appellant that Rs. 5,31,156 was due. Thereafter, pr()ceeding was 
initiated for cancellation of lease by resu~ption of land an'd. lease was 
cancelled as a last resort and the money paid by the transferee was 
C forfeited. Appellant filed an appeal. Chief Administrator set aside the 
order subject to part payment by the appellant by 7.3.1995 and also 
other conditions of payment. However, as per the appellant the order 
was communicated after 7.3.1995 and as such no payment could be 
made. Aggrieved appellant filed a revision application. Estate Officer 
was directed to prepare account statement of the appellant indicating 
D the balance amount to be paid by him. Appellant contended that in the 
statement of accounts prepared in place of 12% interest 15% interest 
for certain period and 24% for the rest had been levied. Appellant 
filed writ petition challenging levy of penal interest. Meanwhile, 
proceeding under the Public Premises (Eviction of Unauthorized 
•1 
E Occupants) Act, 1971 was init_iated. Estate Officer directed the appel-
lant and all other persons in occupation to vacate the premises. 
Appellant filed an appeal. which· was dismissed. Thereafter., appellant 
filed amendment .application to the writ petition questioning the 
eviction order passed under: the 1971 Act. During pendency of the writ 
F petition, appellant deposited Rs. 25,00,000 iri terms whereby allegedly 
the entire principal amount due towards. instalments and ground rent 
was cleared. Thereafter, appellant deposited further. surp and accord-
ing to appellant all outstanding amounts with interest @ .15% per 
annum would have been cleared. Writ petitipn wa~ dismisse~, however, 
liberty was given to the appellant to purchase the property ~nder Rule 
G 21A of the Chandigarh Leash Hold of Sites andBuilding~ Rules, 1973. 
Appellant filed review 

Excerpt shown. Read the full judgment & AI analysis in Lexace.