Capital Project, Chandigarh on 21 December, 1958 purchased site No. 43 in the Grain Market, Chandigarh. The purchase price was Rs. 94,000. 25% of the sale price was payable at the fall of the hammer. The balance sum with interest was payable in three equal installments of Rs. 25,615 each. Jagdish Chand Radhey Shyam paid 23, 500 being 25% of the sale price at the fall of the hammer. Jagdish Chand Radhey Shyam paid a further sum of Rs. 21,992 towards the first installment. A sum of Rs. 3,623 was outstanding on the first installment. Jagdish Chand Radhey Shyam made improvements on the site. Jagdish Chand Radhey Shyam raised construction thereon at his own expense. He invested about Rs. 1,50,000 in the shape of building and machinery. He could not pay Rs 3,623 being the balance of the first. instalment and the second and the third installments. Amounting to Rs. 25,615 each.
Jagdish
Chand Radhey Shyam asked for installments because Jagdish Chand Radhey Shyam was in financial difficulty.
Eventually, the Estate Officer on 2 January, 1962 resumed the site and
forfeited the amount of Rs. 42,728.01 paid by him. The order of resumption and
forfeiture was made by the Estate Officer (Capital Project), Cliandigarh in
exercise of powers under section 9 of the Capital of Punjab (Development and Regulation Act, 1952 referred to as the 1952 Act. Jagdish Chand
Radhey Shyam filed an appeal under section 10 of the 1952 Act.
Jagdish Chand
Radhey Shyam challenged the validity of the orders of the respondents.
The grounds for challenge were these. First, section 9 of the 1952 Act which provides for the resumption of
property by the Estate Officer is ultra virus and unconstitutional.
Secondly, section 9 provides for resumption of property and forfeiture of
money paid which are unconstitutional and unreasonable restrictions on the
right to hold property. Thirdly, the power conferred on the Estate Officer to
take action under section 9 for resumption is unregulated and arbitrary.
Jagdish Chand Radhey Shyam made a
representation to the Chief Minister and asked for further installments and
prayed that steps be not taken to resume the site. The appellant's
representation was rejected.
Jagdish Chand Radhey
Shyam appeal was accepted by
the Appellate Authority, the Chief Administrator, Chandigarh. He was given time
for the payment of installments with interest at the rate of 4 1/2% per annum
and a penalty of 10 per cent of the amount in arrears was ordered to be paid
within 30 days from the date of the Appellate order. The conveyance deed in
respect of the site was also to be executed immediately.
Jagdish Chand Radhey Shyam then filed a
revision application before the Financial Commissioner. The Financial
Commissioner rejected the revision application. The ground was that Jagdish Chand Radhey Shyam had filed a first
revision application. The second application was not competent. It may be
stated here that section 10 aforesaid provides an appeal to the Chief
Administrator against the order of the Estate Officer. Section 10 also states that a revision application can be
presented before the State Government against the order of the Chief
Administrator. Jagdish Chand Radhey Shyam
filed a writ petition in the High Court.
The judgment of the High Court is The Act forbids creation of a third part right by the transferee until the amount represented by the charge is paid in full. In the teeth of statutory security and enforceability it is totally unreasonable restriction on the enjoyment of property by resuming the site for defaults in payments of money and forfeiting the monies paid by the transferee. For these reasons, Court are of opinion that the Government is not entitled to forfeit the monies paid and resume the site under the provision contained in section 9 of the 1952 Act. These provisions violate Articles 14 and 19(1)(f). These provisions are unconstitutional. The appeal is allowed and there is no order as to costs in the High Court the parties will pay and bear their own costs.
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