Thursday, February 22, 2001,
Chandigarh, India


M A I N   N E W S

First amenities, then penalties: HC
Yoginder Gupta
Tribune News Service

Chandigarh, February 21
A Punjab and Haryana High Court judgement of far-reaching consequences, on the vexed issue of the powers of the administration to impose penalties like interest on delayed payment for a site allotted by it or to resume the site, will bring cheers to thousands of harassed allottees not only in the Union Territory of Chandigarh but in Haryana and Punjab also where HUDA and PUDA are as arbitrary in their actions as the UT administration has been found to be by the judiciary.

It is no secret that the allottees of commercial as well as residential sites in Chandigarh, Haryana and Punjab are often harassed by the authorities which do not provide basic amenities essential for the “enjoyment of the property”, as provided under various rules and laws, and still penalise the allottees by imposing various penalties — including the ultimate penalty of resumption — on them.

Disposing of a bunch of identical writ petitions, in a Division Bench of the High Court comprising Mr Justice Jawahar Lal Gupta and Mr Justice K.S. Garewal, examined in depth and detail various issues concerning the allotment of the sites and subsequent imposition of penalties.

The 40-plus-page judgement, written by Mr Justice Gupta on behalf of the Bench, said while an allottee was liable to pay instalments regularly, the authorities were under an obligation to provide amenities because “when the authorities fail to perform their part of duty, the citizen feels aggrieved...a dispute ensures.

“To avoid all this, it would be appropriate for the administration to ensure that there is no delay in the provision of amenities and removal of encroachments. Thereafter, it should effectively recover the instalments and penalise the defaulters...We are not happy with the manner in which the administration has performed its part of the duty. It has failed in some cases to remove the encroachments and provide the amenities for unduly long periods of time. They delay has resulted in loss to the citizen as well as the administration. Both are avoidable. We hope and trust that the administration and the Municipal Corporation shall be careful in future.”

Mr Justice Gupta said when a person paid a fabulous price for a site, he was entitled to assume that the property was free from all encumbrances and he would be provided all the civic amenities necessary for proper raising of the building, its occupation and enjoyment of property. He pointed out that Section 2 of the Capital of Punjab (Development and Regulation) Act, 1952, said that the “amenity shall include roads, water supply, street lighting, drainage sewerage, public building, horticulture, land scaping and any other public utility service provided in Chandigarh”.

He observed: “Surely, the Legislature had not defined the amenities for purely academic reasons. The obvious purpose was to make the administration aware of its obligation to provide the said amenities.”

The Legislature did not rest by merely defining the amenities. It made a specific provision in Section 6 of the Act authorising the Chief Administrator to ensure that the amenities in any part of the city were not prejudicially affected. “On a cumulative consideration of the provisions”, the Bench held that the administration was duty bound to provide the amenities.

The Judge said since the “premium” was the price paid by the allottee for the transfer of the right to enjoy the property, “the payment can be claimed only when the allottee can exercise the right to enjoy the property. In a case where the site is not accessible for lack of amenities or on account of obstruction caused by encroachment, it cannot be said that the right to enjoy the property has been transferred... It is the duty of the seller to deliver a clear and unencumbered possession of the property to the allottee.

The Bench held that the administration was under an obligation to ensure that there was no obstruction in the way of the allottee to reach the site and the administration had to remove the encroachments like jhuggis or other unauthorised occupants, including rehriwalas from and around the sites allotted to the buyers.

Going into the contention of the administration’s counsel that the allottees were bound by the contract to pay ground rent or interest even if there was a delay in providing amenities, Mr Justice Gupta said since the administration enjoyed a monopoly in the allotment of the sites, the allottees had no realistic opportunity to bargain. The allottee “is in the position of a weak party”.

Referring to a Supreme Court judgement, Mr Justice Gupta observed that the principle enunciated by the apex court that “the courts will not enforce and will strike down an unfair and unreasonable contract... entered into between the parties who are not equal in bargaining power”, was fully attracted in the case of allotment of the sites. He pointed out that the Supreme Court also held that this principle would apply to the situations in which the weaker party was in a position in which he could obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them.

The High Court said where the administration had failed to provide the amenities or to remove the encroachments... “it would be unfair to allow it to claim that the allottee is bound to pay the ground rent as also the interest on account of the delay in paying the instalment of the premium or the ground rent.”

The court said: “In our view when the administration fails to provide condition where the enjoyment of property is not possible and the allottee is not to be blamed, its right to recover the money in the form of ground rent and interest is not enforceable. Otherwise, the contract itself shall suffer from the criticism of being unconscionable.”

Regarding the charging of 18 per cent interest on instalments by the Municipal Corporation, the Bench did not sustain it because it found that the Chief Administrator, which had the sole power to revise the interest rate by a notification in the official gazette, had not done so.

Accepting the writ petitions the court also imposed costs on the administration. 

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