Prasanna Narayan vs Jharkhand State Housing Board ...
2021 Latest Caselaw 1427 Jhar

                            IN THE HIGH COURT OF JHARKHAND AT RANCHI
                                    W.P.(C) No. 4880 of 2019

            Prasanna Narayan                                 .....   ... Petitioner
                                                Versus
            1. Jharkhand State Housing Board through its Managing Director.
            2. The Secretary, Jharkhand State Housing Board.
            3. The Estate Officer, Jharkhand State Housing Board.
            4. The Executive Engineer, Ranchi Division, Jharkhand State Housing
                Board.
            5. M/s R.P. Singh.                                .... .... Respondents
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CORAM : HON'BLE MR. JUSTICE RAJESH SHANKAR

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For the Petitioner : Mr. Sumeet Gadodia, Advocate For the Respondent Nos.1 to 4 : Dr. Ashok Kumar Singh, Advocate

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08/22.03.2021 The present writ petition is taken up today through Video conferencing.

2. The present writ petition has been filed for quashing/setting aside the letter No.537 dated 03rd August, 2019, whereby the respondent- Jharkhand State Housing Board (hereinafter to referred as the "JSHB") has allotted chhitput plot situated near Low Income Group (LIG) House No.LRA-51 at Argora Housing Colony, Ranchi belonging to the petitioner to the respondent no.5 for construction of flats under the category of "Economically Weaker Sections" (EWS) (wrongly mentioned in the writ petition as Middle Income Group House/Flats) over the said chhitput plot in form of G+3 (Block-7) building. Further prayer has been made for quashing the order, if any, passed pursuant to the show cause notice issued to the petitioner as contained in memo No.324 dated 10th March, 2015. The petitioner has also prayed for issuance of declaration that the deed of lease on perpetuity executed between the respondent-Jharkhand State Housing Board and the petitioner dated 27th November, 2010 cannot be unilaterally cancelled by the said respondent in absence of any such order passed in that regard by the competent court of civil jurisdiction.

3. The factual background of the case as stated in the writ petition is that the petitioner was allotted a LIG house being LRA-51 by the respondent-Board at Argora Housing Colony, Ranchi vide allotment letter no.186 dated 30th May, 1992 pursuant to her application dated 16th March, 1985 for allotment of LIG house under scheduled caste category. The said allotment was subsequently cancelled due to non-execution of

agreement by the petitioner. Thereafter, the said house was re-alloted in favour of the petitioner pursuant to an application made by her and possession of the same was handed over to her on 3rd June, 2018. Subsequently, a registered lease deed of the said transfer was also executed. The petitioner constructed a three storied residential house over the said plot and is residing in it. The State of Jharkhand in exercise of its powers conferred under Section 28(3) of the Jharkhand State Housing Board Act, 2000 framed "Jharkhand State Housing Board (Management and Disposal of Housing Estate) Regulation, 2004" (in short 'Regulation, 2004'). Clause 30 of said Regulation provides for allotment of 'chhitput plot' (cut plot) to an adjacent existing allottee who has sought allotment of such type of plot. The petitioner filed an application dated 21st March, 2009 for allotment of 'chhitput plot' measuring an area of 2500 square feet which was situated near her existing house being LRA-

51. Thereafter, a report was submitted by the Executive Engineer as required under Clause 30 of the Regulation 2004 and vide letter no. 295 dated 03rd March, 2010, the said 'chhitput plot' was allotted in favour of the petitioner on payment of commercial rate but she was restrained from using the said plot for any commercial purpose. The petitioner deposited the requisite amount with the JSHB and thereafter a hire purchase agreement dated 12th October, 2010 was executed between the petitioner and the JSHB. Possession of the said chhitput plot was also handed over to her on 21st October, 2010. Subsequently, the registered deed of lease of perpetuity was executed by the JSHB in favour of the petitioner on 27th November, 2010. In the year 2015, the Managing Director of the JSHB, Ranchi issued show cause notice to the petitioner vide memo no.324 dated 10th March, 2015 directing her to explain as to why restoration of allotment of house being LRA-51 made in her favour be not cancelled as the same was re-allotted to her in contravention of Clause 8 (Gh) and 9 (Kh) of the Regulation, 2004. The petitioner was also directed vide said show cause notice to explain as to why allotment of chhitput land/plot made in her favour near her house being LRA-51 be not cancelled as the allotment letter no.295 dated 3rd March, 2010 was issued in contravention of Clause 2(xxxi), 8(Gh), 9(Kh), 30(Ga) and 30(Gh) of the Regulation, 2004. The petitioner filed reply to the said show cause notice before the respondent no.1 on 30th March, 2015. However, the petitioner was not

served any order passed by the JSHB, rather vide letter No.537 dated 03rd August, 2019, the said chhitput plot was allotted to the respondent no.5 for construction of flats under Economically Weaker Sections (EWS) category over it. Hence, the present writ petition.

4. The learned counsel for the petitioner submits that neither under the provisions of the Jharkhand State Housing Board Act, 2000 (in short 'Act 2000') nor under Regulation, 1984 as well as Regulation, 2004, any power has been conferred to the respondent authorities to unilaterally cancel a registered lease deed executed by the JSHB in favour of the allottee and in such a situation the provisions of Transfer of Property Act, 1882 would be applicable. If the respondent-JSHB intended to cancel the registered lease deed of the petitioner, it was required under law to approach the competent court of civil jurisdiction seeking declaration that the said lease deed was void ab-initio and/or to get it cancelled. It is further submitted that in absence of any such provision in the Act, 2000 or the Regulation, 2004, the respondent-JSHB has no jurisdiction whatsoever to interfere with the peaceful possession of the petitioner over the property in question. It is a settled law that a party to a registered lease deed has no jurisdiction and/or competence to unilaterally cancel the same. Once, a registered sale deed was duly executed in favour of the petitioner, no order could have been passed cancelling the same unilaterally by the JSHB far less its Managing Director.

5. The learned counsel appearing on behalf of the respondent-JSHB submits that as per Clause 2(xxxi) of Regulation 2004, a plot is called 'chhitput bhukhand' only if it is not capable of being allotted independently for house construction. According to the standard norms as laid down by the JSHB, a plot having size of 2000 square feet and above, is capable of being allotted independently as High Income Group (HIG) plot and even a plot having size of 1000 square feet and above with proper dimension does not qualify to be considered as a 'chhitput bhukhand'. It is further submitted that the provisions contained in Clause 2(xxxi) and 30(Ka), 30(ga) and 30 (gha) of the Regulation, 2004 were grossly violated while allotting the said plot to the petitioner. It is also submitted that the petitioner's husband was posted as Managing Director of the JSHB during the relevant period and as such the Executive

Engineer, JSHB and other concerned officials of JSHB extended undue favour to the petitioner and made recommendation for transfer of the said plot in her favour. It is further submitted that in pursuance of the petitioner's application for allotment of the said plot, the Estate Manager, JSHB called for a report from the Executive Engineer, Ranchi who submitted his report on 21st January, 2010 but did not report the actual dimension of the plot in question, he rather reported that the area of the said plot was 2500 square feet. In reality, the same was more than 2500 square feet. The Executive Engineer also did not report the actual area of the Board's land lying on the north and south side of the so called 'chhitput bhukhand' proposed to be allotted to the petitioner. Moreover, he also did not take measurement of the western side of the plot which was much more than the eastern side of the plot, rather reported it to be 50 feet only. It is also submitted that the plot in question could not have been allotted to the petitioner in view of the provisions contained in Clause 30 (Ga) of the Regulation, 2004 as the said plot was not in the front/rear side or adjacent to the petitioner's house i.e., LRA-51. In fact the plot in question was separated from LRA-51 by House no. LRA-52, a 20 feet wide road and a 6 feet wide drain. Thus, even if the said plot was considered as a 'chhitput bhukhand', it could not have been allotted to the petitioner. It is further submitted that the allotment of the said plot was part of a collusive deal with the petitioner under the influence of her husband i.e., the then Managing Director of JSHB. The petitioner's husband despite being fully aware of the fact that the plot in question could not have been allotted as a 'chhitput bhukhand', he passed an order of allotment of the said plot as a chhitput plot in favour of his wife i.e., the petitioner. It is also submitted that the then Managing Director also did not take approval of the Board of Directors of JSHB as was required under Section 45(3) and Section 51 of the Act, 2000. Thus, there was clear violation of the provisions of the Act, 2000 in allotting the chhitput plot to the petitioner. It is further submitted that Section 21 of the General Clauses Act, 1897 provides that the power to do includes the power to undo. Thus, the power to allot a plot of land includes the power to cancel the said allotment if the situation so warrants. The JSHB after following the principles of natural justice, took steps to cancel the allotment of the plot in question on discovery of blatant illegalities

committed in allotting chhitput plot to the petitioner. The petitioner has been given ample opportunity of hearing and thereafter the allotment of the plot in question has been cancelled by the Board of Directors of JSHB on 07th April, 2015 in its 40th meeting vide Agenda no.18. The decision of the Board of Directors of JSHB with regard to cancellation of the plot in question has also been communicated to all concern vide memo no.710 dated 15th April, 2015. The petitioner herself has been an active accomplice in the said collusive deal and has fraudulently got the allotment of the said plot made in her favour. Hence, she cannot be allowed to take a plea that since the lease deed has already been registered, it can only be cancelled by an order of a competent court of civil jurisdiction.

6. Heard the learned counsel for the parties and perused the materials available on record. The petitioner is aggrieved with the order of the respondent-Board whereby allotment of 'chhitput plot' in her name has been cancelled and the same has been handed over to the respondent no.5 vide letter No.537 dated 03rd August, 2019 for construction of flats under Economically Weaker Sections (EWS) category over the same.

7. The thrust of the argument of the learned counsel for the petitioner is that the respondent-Board could not have unilaterally cancelled the lease in perpetuity executed in favour of the petitioner which is a registered document, rather the JSHB should have moved before the competent civil court under the relevant provisions of law to get it cancelled.

8. In support of the said argument, the learned counsel for the petitioner puts reliance on the judgment of the Hon'ble Supreme Court rendered in the case of ITC Limited Vs. State of Uttar Pradesh and Others reported in (2011) 7 SCC 493. Further reliance has been placed on the judgments of the Hon'ble Supreme Court rendered in the cases of Industrial Infrastructure Development Corporation (Gwalior) Madhya Pradesh Limited Vs. Commissioner of Income Tax, Gwalior, Madhya Pradesh reported in (2018) 4 SCC 494 and Sukh Sagar Medical College & Hospital Vs. State of Madhya Pradesh and Others reported in 2020 SCC Online SC 851.

9. In the case of ITC Limited (Supra), the Hon'ble Supreme Court has held as under:-

"30. A lease governed exclusively by the provisions of the Transfer of Property Act, 1882 ("the TP Act", for short) could be cancelled only by filing a civil suit for its cancellation or for a declaration that it is illegal, null and void and for the consequential relief of delivery back of possession. Unless and until a court of competent jurisdiction grants such a decree, the lease will continue to be effective and binding. Unilateral cancellation of a registered lease deed by the lessor will neither terminate the lease nor entitle a lessor to seek possession. This is the position under private law. But where the grant of lease is governed by a statute or statutory regulations, and if such statute expressly reserves the power of cancellation or revocation to the lessor, it will be permissible for an authority, as the lessor, to cancel a duly executed and registered lease deed, even if possession has been delivered, on the specific grounds of cancellation provided in the statute."

10. It may thus be construed that there is a distinction between a private lease and a government lease. It has been held that a private lease is governed by the Transfer of Property Act, 1882, the cancellation of which cannot be done unilaterally and a party intending cancellation must seek such remedy before a competent court of civil jurisdiction. However, the position would be different in a case where any lease is governed by a statute or statutory regulation as also if such statute expressly reserves the power of cancellation or revocation to the lessor. In such cases, the authority as a lessor may cancel a duly executed and registered lease deed on the specific grounds of cancellation provided in the statute. The said cancellation of lease deed may be done even if the possession has been delivered to a lessee.

11. In the case of State of U.P. Vs. Zahoor Ahmad & Another reported in (1973) 2 SCC 547, the Hon'ble Supreme Court has held as under:-

"16. Section 3 of the Government Grants Act declares the unfettered discretion of the Government to impose such conditions and limitations as it thinks fit, no matter what the general law of the land be. The meaning of Sections 2 and 3 of the Government Grants Act is that the scope of that Act is not limited to affecting the provisions of the Transfer of Property Act only. The Government has unfettered discretion to impose any conditions, limitations, or restrictions in its grants, and the rights, privileges and obligations of the grantee would be regulated according to the terms of the grant, notwithstanding any provisions of any statutory or common law."

12. In the case of Union of India & Another Vs. Dinshaw Shapoorji Anklesari & Others reported in (2014) 14 SCC 204, the Hon'ble Supreme Court has held thus:-

"36. The Government Grants Act, 1895 as would be evident

from the Preamble and Section 2 therein, seeks to clarify the doubts with regard to the extended operation of the Transfer of Property Act. Section 2 of the Act reads as follows:

"2. Transfer of Property Act, 1882, not to apply to Government grants.--Nothing in the Transfer of Property Act, 1882, contained shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to, or in favour of any person whomsoever; but every such grant and transfer shall be construed and take effect as if the said Act had not been passed."

37. Not only the Transfer of Property Act is made inapplicable to the government grants but Section 3 of the Government Grants Act, 1895 further makes it clear that the Government grants is to take effect according to their tenor, notwithstanding any rule of law, statute or enactment of the legislature to the contrary. Section 3 lays down as follows:

"3. Government grants to take effect according to their tenor.--All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor, any rule of law, statute or enactment of the legislature to the contrary notwithstanding."

38. This Court in Azim Ahmad Kazmi v. State of U.P. [(2012) 7 SCC 278] , has held that the government grant of lease of land is governed entirely by the terms of the grant. The Court took note of Section 3 of the Government Grants Act, 1895 which is to take effect according to its tenor notwithstanding any other law to the contrary.

39. In Chief Executive Officer v. Surendra Kumar Vakil [(1999) 3 SCC 555] , this Court has held that the grantee under the old grant terms is a mere occupier/licensee having no title over the land so as to entitle him to transfer the land to another person without prior consent of the authorities concerned. The Court further held that the regulations as well as the General Land Register which are old documents maintained in the regular course and coming from proper custody clearly indicate that the land was held on old grant basis and this was sufficient for the Government to resume the land in accordance with law.

40. In Union of India v. Kamla Verma [(2010) 13 SCC 511] , this Court has held that it is always open to the Union of India to resume the land held on old grant terms and that the Union of India cannot be prevented from resuming the said land.

41. Therefore, it is clear that the Government has unfettered discretion and under Section 3 impose any condition, limitation or restriction in its grants and the rights, privileges and obligations of the grantee would be regulated only according to the terms of the grant itself though they may be inconsistent with the provisions of any statute or common law."

13. In the aforesaid judgments, the Hon'ble Supreme Court while interpreting Sections 2 and 3 of the Government Grants Act, 1895 has held that the Transfer of Property Act, 1882 is not applicable to any Government grants including lease of land and the same will be governed entirely by the terms of the grant. The Government has a discretion under Section 3 to impose any condition, limitation or restriction in its

grants and the rights, privileges and obligations of the grantee would be regulated according to the terms of the grant itself even if the said terms may be inconsistent with the provisions of any statute or common law.

14. In the present case, the allotment of 'chhitput plot' is governed by the Regulation, 2004. Clause 2(xxxi) defines 'chhitput plot' as a plot which is left un-allotted after development/allotment of the residential premises and which is not fit for allotment independently. However, the said chhitput plot shall not be capable of allotment if the same is the part of a projected road or park or through which sewer line, water disposal and water pipe line are passing or upon which Housing Board has proposed some other project. Further, Clause 30 of the said regulation contains the procedure for allotment of 'chhitput plot'. Clause 30(Ga) provides that a 'chhitput plot' will be allotted to only those persons in whose name there is a plot allotted beside/in front of or in back side of the said 'chhitput plot'. Clause 36 further provides that the allotment of a residential unit/flat to an allottee will be on "Perpetual Lease Hold" basis as per the terms and conditions framed by the JSHB.

15. On bare perusal of the lease deed of the said 'chhitput plot', it would appear that in paragraph 12 of the same certain conditions have been mentioned under which the Board has the right to cancel the lease. The said paragraph of the lease deed is quoted hereunder for ready reference:-

"12. That the without prejudice to the Board right under any other law rules and regulation and besides recovering the amount if found due to the Board along with interest penalty and damage even after execution of these present the Board shall in addition the right to cancel the allotment/settlement made in favour of the LESSEE and to evict him from premises allotted to the LESSEE and resume possession therefore in the event of any one of the or more of the following:- a. Non-compliance of any terms and condition of the Indenture or of the terms and condition of the Hire Purchase Agreement executed on 13.10.2010.

b. Violation of the term and condition prescribed in the rules and regulation of the Board in this regard.

c. Default in payment of any amount remaining due for payment to the Board even after execution of the presence for the period of more than 12 months from the date such demand by the Board.

d. If it is found that the LESSEE was Frazidar and took settlement on behalf of any other person or persons. e. If it is found that the allotment/settlement was taken by furnishing false information or affidavit or concealing any material facts."

16. The learned counsel for the respondent-JSHB has submitted that the lease of the 'chhitput plot' granted to the petitioner was subsequently

found to be in gross contravention of the Regulation, 2004 and at the time of grant of lease, petitioner's husband was the Managing Director of the Board who, with a well-designed plan, in association with the Executive Engineer, Ranchi Division and other officials got the allotment of 'chhitput plot' made in favour of the petitioner. The JSHB having found the illegality in grant of said allotment to the petitioner has subsequently cancelled it.

17. On perusal of paragraph 12(b) of the lease deed, it appears that while executing the lease deed of the 'chhitput plot', the Board had reserved its right to cancel the lease in the event of violation of the terms and conditions prescribed in the rules and regulations of the JSHB in this regard. On perusal of the map of the 'chhitput plot' appended with the lease deed dated 27th November, 2010, it appears that the same was not situated beside/in front of/behind plot no.LRA-51 which was earlier allotted to the petitioner and thus there was clear violation of the Regulation, 2004 while allotting the said 'chhitput plot' to the petitioner. It further appears from the map that after plot no. LRA-51, there was plot no. LRA-52 and thereafter a 20 feet wide road and then a drain of 6 feet and lastly the said chhitput plot was situated. Apart from that, the petitioner's own statement is that the area of the said 'chhitput plot' was 2500 square feet which in view of the statement of the respondent-Board was capable of being allotted as a HIG plot and thus the same could not be said to be coming under the definition of 'chhitput plot'.

18. In view of the aforesaid fact, I do not find any substance in the argument of the learned counsel for the petitioner that the JSHB was not justified in cancelling the lease deed. Since, the power of cancelling the lease deed was conferred in the lease deed itself on certain conditions and the petitioner had signed the lease deed with her open eyes, the Board having found that there was violation of the provisions of Regulation, 2004 rightly cancelled the lease of the said 'chhitput plot' executed in favour of the petitioner. I am of the view that in the cases where allotment/transfer of any land is made by the state instrumentalities in favour of any private person in violation of law, they should be given some latitude to cancel the same under a given situation. The purpose behind it is that the matters of illegal and fraudulent transfer of land should not be relegated to civil adjudication in a routine manner

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which is a time consuming process giving undue benefit to the transferee whose transfer was in contravention of law. This also adversely affects other persons seeking allotment of land as per law.

19. I have also perused the other judgments cited by the learned counsel for the petitioner in support of the petitioner's claim.

20. In the case of Sukh Sagar Medical College (Supra.), the Hon'ble Supreme Court has held that the act of issuance of Essentiality Certificate by the State is a quasi judicial function. It is neither a legislative nor an executive function and as such the same cannot be varied or altered applying Section 21 of the General Clauses Act, 1897 (in short Act, 1897'). It has further been held that the State is competent to withdraw the certificate if it is obtained by fraud or in circumstances where the very substratum on which the Essentiality certificate was granted, disappears or any other reason of like nature.

21. In the case of Industrial Infrastructure Development Corporation (Supra.), the Hon'ble Supreme Court has held that the function exercisable by the CIT under section 12-A of the Income Tax Act, 1961 is neither legislative nor executive, rather the same is quasi judicial in nature and as such the same does not fall under the category of orders mentioned in Section 21 of the Act, 1897 and any order passed under Section 12-A cannot be modified or rescinded by applying Section 21. The Hon'ble Supreme Court has further held that even if an order is quasi judicial in nature, the same may be varied or reviewed if it is obtained by fraud or when such power is conferred by the Act or the Rules under which it is made.

22. The fact and issue involved in the aforesaid judgments are altogether different from the fact of the present case and as such the ratio laid down in the said cases is not applicable in the present case. Here, the lease deed of the petitioner itself contained conditions under which the lease of the petitioner could be unilaterally cancelled by the JSHB and since the same has been cancelled after having found the allotment in gross violation of the regulation, I do not find any reason to interfere with the said decision of the JSHB.

23. One of the arguments of the learned counsel for the petitioner is that the impugned order has been passed in violation of the principles of natural justice.

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24. In the case of Ashok Kumar Sonkar v. Union of India & Others reported in (2007) 4 SCC 54, the Hon'ble Supreme Court has held as under:-

"26. This brings us to the question as to whether the principles of natural justice were required to be complied with. There cannot be any doubt whatsoever that the audi alteram partem is one of the basic pillars of natural justice which means no one should be condemned unheard. However, whenever possible the principle of natural justice should be followed. Ordinarily in a case of this nature the same should be complied with. Visitor may in a given situation issue notice to the employee who would be effected by the ultimate order that may be passed. He may not be given an oral hearing, but may be allowed to make a representation in writing.

27. It is also, however, well settled that it cannot put any straitjacket formula. It may not be applied in a given case unless a prejudice is shown. It is not necessary where it would be a futile exercise.

28. A court of law does not insist on compliance with useless formality. It will not issue any such direction where the result would remain the same, in view of the fact situation prevailing or in terms of the legal consequences. Furthermore in this case, the selection of the appellant was illegal. He was not qualified on the cut-off date. Being ineligible to be considered for appointment, it would have been a futile exercise to give him an opportunity of being heard."

25. Thus, the compliance of the principles of natural justice cannot be put in a straitjacket formula. If under certain circumstances, it is found that any prejudice has been caused to the aggrieved, the principles of natural justice must be followed in its strict sense. However, if the court finds that even after compliance of the principles of natural justice, the result would be the same, the court may waive the compliance of principles of natural justice considering it as a futile exercise. Moreover, it is evident from the record that the petitioner was issued a show cause notice on 10th March, 2015 which was replied by her and only thereafter, the impugned order has been passed. As such, the JSHB had given ample opportunity to the petitioner to controvert the allegation levelled against her before taking the impugned action.

26. The writ petition being devoid of merit is accordingly dismissed.

(Rajesh Shankar, J.) Rohit