MUNICIPAL CORPORATION CHANDIGARH AND ORS. ETC. versus M/S SHANTIKUNJ INVESTMENT PVT. LTD.

Citation: [2006] 2 S.C.R. 768 · Decided: 28-02-2006 · Supreme Court of India · Bench: B.N. AGRAWAL · Disposal: Disposed off

Judgment (excerpt)

A 
MUNICIPAL CORPORATION CHANDIGARH AND ORS. ETC. 
v. 
"( 
MIS SHANTIKUNJ INVESTMENT PVT. LTD. 
FEBRUARY 28, 2006 
B 
[B.N. AGRAWAL AND A.K. MATHUR, JJ.] 
Chandigarh Lease--Hold of Sites and Buildings Act, 1973; Sections 
2(b), 7, 8 and 8-A-Chandigarh Lease-Hold of Sites and Buildings Rules, 
... • 
1973; Rules 3(2), II, 12 and 13--/ndian Contract Act, 1872; Section 87-
c Specific Relief Act, 1963; Section 2(a)-Transfer of Property Act, I 882; Sections 
/05 and 108-Al/otment of plots by State to allottees on payment of initial 
premium with a conditicn to pay remaining amount in instalments-Allottees 
refased to pay instalment amounts contending that the State has not provided 
amenities under the Act-State initiated steps to levy interest, penalty and 
D resumption of plots for non-payment of instalments and ground rent-Writ 
Petitions by allottees before High Court-High Court holding contrary views 
in different Writ Petitions-Whether provision of basic amenities by the State 
is a condition precedent to demand payment of instalment amount and ground 
> 
rent from the allottees-Held, provision of basic amenities is not a condition 
precedent for payment of instalment amounts and ground rent under the Act 
E and Rules and under the terms and conditions of auction and lease-Al/ottees 
are bound to pay instalment amounts being part of the contract-Matters 
remitted back to High Court for fr•~sh disposal on the facts of each case. 
Allottees were allotted residential and commercial sites on lease by 
F 
State on payment of premium. As per the terms and conditions of the 
lease, the remaining amount would be required to be paid by the allottees 
to the State in instalments. The State demanded payment of interest and 
y • 
penalty from the allottees for non-payment or short/delayed payment of 
instalments and ground rent. The allottees filed Writ Petitions before 
High Court challenging the arbitrary demand of payment and resumption 
G and forfeiture of allotment of the sites by the State contending that the 
State cannot demand the payment on the ground that basic amenities for 
use and occupation of the sites have not been provided by the State. One 
Division Bench of the High Court allowed the writ petitions of the allottees 
~ .. 
holding that provision of basic amenities is a condition precedent to the 
H 
768 
MUNI. CORPN. CHANDIGARH v. SHANTIKUNJ INVEST. rvr. LTD. 
7 69 
payment of instalment and ground rent. Another Division Bench of the A 
High Court held a contrary view holding that provision of basic amenities 
is not a condition precedent. Hence the appeals by the State and the 
allottees. 
The allottees contended that the word 'amenities' under section 
2(b) of the Chandigarh Lease-Hold of Sites and Buildings Act, 1973 should B 
be given an extended meaning; that Rule 12(2) of the Chandigarh Lease-
Hold of Sites and Buildings Rules, 1973 should be interpreted to mean 
that the State should provide basic amenities within the agreed period of 
payment of instalments by the allottees; that the expression 'enjoy' under 
Rule 3(2) of the Rules would become redundant if all the amenities C 
provided under section 2(b) of the Act were not provided first by the 
State; that the State has failed to perform its promise under section 67 of 
the Indian Contract Act, 1872; that under Section 2(a) of the Specific 
Relief Act, 1963, when a property is leased out, it presupposes that the 
amenities should be provided on payment of premium; that under sections 
105 and 108 of the Transfer of Property Act, 1882, the rights and liabilities D 
of lessor and lessee are co-terminus; and that the provisions of a Statute 
should be interpre~ed in such a manner that it advances the cause of the 
~ 
public. 
The State contended that the 'amenities' under section 2(b) of the 
Act, 1973 cannot be given an extended meaning; that providing amenities E 
was never a condition precedent and the necessary amenities had already 
been provided; and that it is not running away from the legal obligation 
in providing remaining amenities. 
Disposing of the ·appeals, the Court 
HELD: 1.1. On a plain reading of the definition "amenity" under F 
section 2(b) of the Chandigarh Lease-Hold of Sites and Buildings Act, 
1973 read with Rules 11(2) and 12 of the relevant Rules, it cannot be 
construed to mean that the allottees can contend that they are not under 
any obligation to pay instalment, interest and penalty, if any, under the 
Act and the Rules 

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