Dal Chandra Sharma & Anr. vs Delhi Development Authority
2008 Latest Caselaw 1789 Del

*                  HIGH COURT OF DELHI AT NEW DELHI

+                                 LPA NO.240/2007


Dal Chandra Sharma & Anr.         Appellants
                   Through: Mr.Rakesh Munjal, Sr. Advocate
                            with Mr.Sumit Bansal, Mr.Manish
                            Paliwal and Ms.Aparajita
                            Mukherjee, Advocates


                               Versus

Delhi Development Authority       Respondent
                    Through: Ms.Sangeeta Chandra, Advocate

      CORAM:
      HON'BLE THE CHIEF JUSTICE
      HON'BLE DR. JUSTICE S.MURALIDHAR

                  ORDER

30.09.2008

The appeal impugns an order of the single Judge dismissing

the appellants' writ petition for quashing the letter dated

23.3.2004 issued by the Delhi Development Authority

(hereinafter referred to as "the DDA") cancelling the bid for plot

No.B-3/35, Yamuna Vihar, Delhi.

2. The appellants participated in an open auction conducted

by the DDA, on 8.11.2002 and they were the highest bidder for

the plot, which measures 67 sq. meters. The auctioneer

LPA No.240/2007 page 1 of 10 accepted the appellants' bid. The appellants deposited a sum of

Rs.2,67,413/- and applied to the DDA seeking its permission to

mortgage the plot with a bank. The application was approved by

the DDA, which granted a "no objection certificate". Vijaya Bank

also issued a cheque of Rs.8,02,253/- in favour of DDA and the

same was accepted by it. The appellants allege that the DDA was

duty bound to issue lease deed and hand over the possession of

the plot, but it failed to do so. After lapse of a year on 23.3.2004,

the appellants were shocked to receive a letter of cancelling

allotment of the plot, informing them that since the first appellant

was holding property bearing No.B-3/60, Yamuna Vihar by way of

agreement to sell dated 20.12.1999, which the appellants had

not disclosed at the time of auction and also that they had

submitted false affidavit, thus they violated the terms and

conditions of the sale / auction. The DDA thus cancelled the bid,

and forfeited the earnest money deposited by the appellants.

3. The DDA had relied upon the following condition of the

auction, to issue the impugned cancellation letter, which is

reproduced herein below:-

"any individual who is not a minor and is citizen of India may purchase lease hold rights in any

LPA No.240/2007 page 2 of 10 one plot by bid in the auction, if he/she, his wife/husband or any of his/her minor and or dependent children or dependent parents or dependent minor sisters and brothers, ordinarily residing with him/her do not own in full or in part on lease hold or free hold basis any residential plot or flat or house or have been allotted on hire purchase basis a residential plot or house or flat to any one in the past, nor has transferred his/her membership in any co-operative house building society/CGHS in Delhi."

4. The DDA has relied upon the declaration furnished by the

appellants that :-

"Neither I nor my wife-husband or any of my minor or dependent children old dependent parents or dependent minor sister and brothers ordinarily residing with me, own in full or in part on lease hold or free hold basis in any residential plot of land or house or have been, allotted on hire purchase basis a residential land or house in union territory of Delhi. I have transferred any residential plot/house or flat to any nor I have transferred my membership in any cooperative housing building society - CGHS in Delhi In Favour of anyone."

5. According to the DDA when the case was processed for

handing over the possession of the plot it came across the file of

plot No.B-3/60, Yamuna Vihar, which requested conversion in the

name of the allottee i.e. the first appellant. The lease deed of

plot No.B-3/60 was executed in the name of Shri P.C. Pandey and

Smt.Manju Pandey. The first appellant had applied for conversion

LPA No.240/2007 page 3 of 10 of the said property into freehold in his favour being General

Power of Attorney (hereinafter referred to as "GPA") and vendee

under an agreement to sell. As per the copy of the said

document that plot was purchased by the first appellant on

20.12.1999 and conversion had been approved. The conveyance

deed papers were duly stamped from the office of Collector of

Stamps and were submitted for execution. The DDA has alleged

that as per the terms and conditions of auction sale the

appellants were ineligible to participate in the auction as they

had another plot as GPA holder. It is further alleged that there

was suppression of material facts by the appellants. It was

further alleged that since there was suppression of material facts

by the appellants, the cancellation order was issued and earnest

money deposited forfeited.

6. The principal argument of the appellants before the

learned single Judge was that the terms and conditions of auction

do not debar anyone from participating in an auction if any other

property is held on GPA or agreement to sell basis. Unless the

terms and conditions specifically stipulate such a condition it

cannot be said that such persons are barred from participating in

LPA No.240/2007 page 4 of 10 the auction. It was also submitted that the terms and conditions

of auction are pari materia with Rule 17 of the DDA (Disposal of

Developed Nazul Land) Rules, 1981. Neither the said Rules nor

the terms and conditions of auction contain any stipulation with

regard to ineligibility of persons who are holding property as GPA

or due to agreement to sell. Therefore, it cannot be said that the

appellants are ineligible to apply with DDA or would not have

been eligible to participate in the auction. Secondly, it was

argued that there was violation of principles of natural justice

inasmuch as no prior notice was given of the cancellation of the

bid.

7. The learned single Judge dismissed the petition with the

following observations:

"19. The prohibition contained in Rule 17 applies, in my opinion, in all cases of allotments of Nazul Rules, whether by way of auction, or for predetermined rates. Its purpose and objective is to ensure that lands acquired and placed at disposal of DDA, and developed at public expense by it, ought to be made available to every one and on non-discriminatory principles. One of the principles underlying the object of Rule 17 is that ownership of such plots/ properties ought to be restricted; therefore the disqualification of spouses, dependents, etc. of those who already own such plots/flats. This objective, to my mind, cannot be defeated and set at naught by

LPA No.240/2007 page 5 of 10 stratagems, and ingenious devices adopted by those wanting to acquire such plots from the DDA. One such obvious stratagem is the device of General Power of Attorney/Agreement to sell, which are used by numerous people to acquire properties, without a formal conveyance or sale deed. The DDA, and Central Government, by its policies, formulated since 1992, has recognized, and sought to regularize such transactions, by permitting freehold rights. Therefore, such rights have now been given the formal clothing of legal ownership. Once a GPA holder applies for conversion, he signifies the resolve to acquire formal, legal and absolute "freehold" rights, which more often than not, are an enlargement of the existing rights of the "formal" owner.

20. In this case, the petitioner undisputedly is a GPA holder of another property; he does not deny its acquisition for valuable consideration. He applied for its conversion into freehold. During the pendancy of the request, he participated and bid in the auction, without disclosing that he was GPA holder, whose request for conversion was pending. This conduct betrays intention to own two properties. As per Rule 17, and the declaration required to be made by bidders, such bidders, owning other properties could not participate in the auction, and were ineligible. Therefore, I am of the opinion that the petitioner cannot claim that he was eligible and the allotment was valid.

          21      xxx xxx xxx xxx xxx xxx xxx

          22      xxx xxx xxx xxx xxx xxx xxx

23. The recent trend in administrative action is to emphasize not so much on strict adherence to rules of natural justice, as upon fairness, and non-

LPA No.240/2007 page 6 of 10 arbitrariness. Every action of an authority, and complaints of violation of principles of natural justice, have to be seen from the standpoint of fairness, and prejudice to the individual or concerned party. This is because natural justice cannot be straight-jacketed into stale moulds. Each case has to be judged from the perspective of its facts. The petitioner has not denied any of the facts which led to cancellation of the allotment. The question of the DDA, therefore, granting a hearing in respect of what was essentially a commercial transaction, cannot be insisted as an invariable, mandatory requirement. It has often been held that sans abuse of power or discretion, illegality, or mala fides, the administrative action cannot be faulted on the ground of violation of principles of natural justice, particularly in the commercial sphere. Fairness, it has been remarked, is not a one way street ( See Natwar Textile Processors Ltd vs. Union of India 1995 (1) SCC 753; U.P. Financial Corporation vs. Gem Cap 1993 (2) SCC 299)."

8. Learned counsel appearing for the appellants submitted

that the view taken by the learned single Judge is contrary to the

judgment of the Division Bench in the case of Alimuddin v.

Registrar of Co-operative Societies & Ors. 63(1996) DLT

655. In that case the petitioner Alimuddin, was a member of a

Co-operative Housing Society and his membership with the

Society has been ceased on the ground that during his

membership of the Society, his wife had purchased a plot in one

of the unauthorised colonies of Delhi, namely, Zafar Nagar and

LPA No.240/2007 page 7 of 10 this act had rendered him disqualified to continue as a member of

the Society under Rule 25(3) of the Rules. Clause 25(1)(c)(i)

provides as under:

"he owns a residential house or a plot of land for the construction of a residential house in any of the approved or unapproved colonies or other localities in the National Capital Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children, on lease hold or free hold basis: ....."

The case of the petitioner was that his wife had only

entered into an agreement for sale of the said plot but she had

never purchased it through a registered document and, therefore,

she never legally owned it and therefore Rule 25(3) of the Rules

was not attracted. The Registrar of the Co-operative Society

came to the conclusion that the petitioner's wife had been

indulging in sale of the property and consequently the

disqualification clause was attracted. The Division Bench referred

to decision of this Court in Navjeevan Co-operative House

Building Society Ltd. v. Delhi Co-operative Tribunal (CWP

No.3150/1985 decided on 10.7.1987) where a learned Judge of

this Court had held as under:-

"The provisions of Rule 25 in so far as they disqualify persons from being members of the Co-

LPA No.240/2007 page 8 of 10 operative society need to be strictly construed and unless any person is clearly covered by the terminologies which are used to disqualify, no disqualification should attach to such a person."

"The clear intend of this rule is, therefore, that those who hold properties "Benami" either in their wife's name or in the name of their dependent children, were not intended to be permitted to become a member of the Cooperative House Building Society."

The Division Bench approving the above judgment held that

to attract the applicability of Rule 25(1)(c)(i), the member of the

Society must own a residential house or a plot of land for the

construction of a house in his own name or in the name of his

spouse or a dependent child. The phrase "in the name of" has

been interpreted to mean the ownership must be of the member

though it may stand Benami in the name of the wife or a child.

Since there was no finding that the petitioner had purchased the

property Benami in the name of the wife, the order of the

Registrar was set aside. This judgment is clearly distinguishable

and has no application to the facts of the present case.

9. We are in agreement with the leaned single Judge that the

first appellant, who is a GPA holder and who has applied for

conversion, was clearly ineligible to participate in the auction.

LPA No.240/2007 page 9 of 10 The appellants suppressed the fact of acquisition of the property

and this would disentitle them from claiming any equitable relief

in proceedings under Article 226 of the Constitution of India. In

our opinion, the DDA has rightly cancelled the bid and forfeited

the earnest amount in accordance with the terms and conditions

of the auction. The appeal is accordingly dismissed with costs.

CHIEF JUSTICE

S.MURALIDHAR JUDGE September 30, 2008 "nm"

LPA No.240/2007                                         page 10 of 10