RAJIV VOHRA versus THE STATE OF HARYANA AND ORS. on 21 February 2019

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[2019] 4 S.C.R. 822SUPREME COURT REPORTS

SUPREME COURT REPORTS

[2019] 4 S.C.R.

RAJIV VOHRA

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v.

THE STATE OF HARYANA AND ORS.

(Civil Appeal No. 1932 of 2019)

BFEBRUARY 21, 2019

[DR DHANANJAYA Y CHANDRACHUD ANDHEMANT GUPTA, JJ.]

Auction – Commercial property – Willful default by buyer –CAppellant was allotted booth in open auction for Rs.7,55,000/- –Appellant paid Rs. 1,88,750/- (25% of the sale consideration) butfailed to make payment of the remaining sale consideration – Thirdrespondent (Estate Officer, Haryana Urban Development Authority)passed resumption order and resumed the booth on account of non-payment of dues – Appeal filed by the appellant – Resumption orderDset aside – Pursuant to the appellate order, the appellant paidRs.7,00,000/- – Revision filed by the third respondent – Resumptionorder restored – Writ petition filed by the appellant before HighCourt, which was dismissed – On appeal, held: Booth was allottedin 1996 – After making payment of 25% of the sale consideration, Ethe appellant defaulted on the terms and conditions of the allotment– Third respondent issued notices to the appellant – Despite serviceof the notices, the appellant failed to make any payment inaccordance with the terms and conditions of the allotment letter –Despite being afforded multiple opportunities to effect payment ofthe balance sale consideration, the appellant continued to defaultFon the terms and conditions of the allotment – Appellant continuedin possession of the booth for over 23 years after paying a meagresum – Jurisdiction of Supreme Court u/Art.142 cannot be invokedto protect an unscrupulous buyer who took possession of acommercial property by paying only 25% of the sale considerationGand willfully defaulted on the amount of money payable – No reasonto interfere with the judgment of the High Court – Resumption orderconfirmed – Constitution of India – Art.142.

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The appellant was allotted booth in open auction forRs.7, 55,000/-. He paid 25% of the sale consideration, but failedto make payment of the remaining sale consideration. The thirdrespondent (Estate Officer, Haryana Urban DevelopmentAuthority) passed resumption order, resuming the booth onaccount of non-payment of dues. The appellant filed appeal,wherein the resumption order was set aside. The third respondentfiled revision. Resumption order was restored. The appellant filedwrit petition before the High Court, which was dismissed.Hence, the present appeal.

Disposing of the appeal, the Court

HELD 1.1 The booth was allotted in 1996. The bid at theauction was accepted for Rs. 7,55,000, of which a total amount ofRs 1,88,750 (25% of the total sale consideration) was paid by theappellant. After making a payment of 25% of the saleconsideration, the appellant defaulted on the terms and conditionsof the allotment. The third respondent issued notices to theappellant on 3 December 1996, 20 February 1998, 20 October1999, 3 June 1999 and 18 September 2000. Despite service ofthe notices, the appellant failed to make any payment inaccordance with the terms and conditions of the allotment letter.Despite being afforded multiple opportunities to effect paymentof the balance sale consideration, the appellant continued to defaulton the terms and conditions of the allotment. [Paras 9, 10][826-E-H; 827-A]

1.2 The appeal filed by the appellant against the resumptionorder dated 2 February, 2001 was dismissed in default on 23 April2002. The application for restoration of appeal filed on 17 June2002 was dismissed in default on 23 October 2007. Belatedlyafter a period of three years, another restoration application wasfiled on 22 December 2010. The above factors have justifiablyweighed with the High Court. The appellant executed a GeneralPower of Attorney in favour of a person by the name of ‘AP’ on7 June 2001 nearly four months after the order for resumptionwas passed. The High Court has with justification, held that theGPA executed by the appellant appeared to be an assignment oflitigation by the appellant. [Paras 11, 12] [827-B-D]

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824SUPREME COURT REPORTS

A1.3 The jurisdiction of Supreme Court under Article 142cannot be invoked to protect an unscrupulous buyer who tookpossession of a commercial property by paying only 25% of thesale consideration and willfully defaulted on the amount of moneypayable. The appellant has continued in possession of the boothfor over 23 years. Despite being afforded multiple opportunitiesBby the third respondent to effect payment, the appellant continuedto default on payments due. Coupled with the abovecircumstances, there has been an assignment under a GeneralPower of Attorney. During the hearing of this appeal, the appellantwas offered an opportunity to regularize the allotment if aCsubstantial amount of money was paid to the third respondent.Even at this stage, the appellant did not show any inclination topay a fair amount to the third respondent. No reason to interferewith the judgment of the High Court. The order of resumptionshall stand confirmed. During the pendency of the proceedingsin Supreme Court, the appellant deposited an amount of Rs 20Dlakhs before the Registry pursuant to the interim order. The thirdrespondent is at liberty to withdraw the amount deposited by theappellant with accrued interest towards charges for unauthorizedoccupation. The third respondent shall compute occupationcharges of the booth from 6 May 1996 and adjust the dues forEoccupation from the amount deposited by the appellant withintwo months of this order. Any surplus that remains shall bereturned to the appellant with interest at the rate of 6% perannum. If the amount determined by the third respondent is inexcess of the above amount deposited by the appellant, the thirdrespondent will be at liberty to file appropriate proceedings forFrecovery. [Paras 14, 15] [827-F-H; 828-A-D]

Smrita Jain v. HUDA Decision of Supreme CourtinSLP (C) No.14864 of 2013;Ved Prakash Kathuria v.

HUDA Decision of Supreme Court in SLP(C)No. 31841 of 2011– relied on.GCIVIL APPELLATE JURISDICTION: Civil Appeal No.1932of 2019.

From the Judgment and Order dated 08.07.2016 of the High Courtof Punjab and Haryana at Chandigarh in C.WP. No. 25455 of 2014.

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Somvir Singh Deswal, Ms. Amit Kumari Saroha, Satbir Pillania,Nischal Kumar Neeraj, Advs. for the Appellant.

Arun Bhardwaj, AAG, Ashish Pandey, Prateek Rai, Dr. MonikaGusain, Vishwa Pal Singh, Advs. for the Respondents.

The Order of the Court was passed by

DR DHANANJAYA Y CHANDRACHUD, J.

1. Leave granted.

2. The present appeal arises from the judgment and final orderdated 8 July 2014 of the High Court of Punjab and Haryana dismissingthe writ petition filed by the appellant and restoring the resumption orderpassed by the Estate Officer, Haryana Urban Development Authority(the third respondent).

3..The appellant, being successful in an open auction held on 7March 1996, was allotted a booth[1] of 22.68 square metres for a saleconsideration of Rs. 7,55,000. An initial amount of Rs 75,500 (10% ofthe total sale consideration) was paid by the appellant as bid money. Theterms and conditions of the auction stipulated that the appellant wasrequired to remit a further sum of Rs. 1,13,250 (15% of the saleconsideration) within 30 days from the date of issuance of the letter ofallotment. The balance consideration was to be paid either within 60days or in ten half yearly installments with interest of 15% per annum.

4. Possession of the booth was delivered to the appellant on 6May 1996. An allotment letter was issued in favour of the appellant bythe third respondent on 10 May 1996. The appellant made a timelypayment of Rs. 1,13,250 but failed to make payment of the remainingsale consideration. Consequently, on 2 February 2001, the third respondentpassed a resumption order and resumed the booth on account of thenon-payment of dues.

5. The appellant’s appeal before the Administrator, HUDA (thesecond respondent) was allowed on 4 January 2011 and the resumptionorder was set aside subject to the appellant clearing all pending dues andpaying a penalty of Rs 2 lakhs within 30 days from the date of issuanceof a demand notice by the third respondent. Pursuant to the appellateorder, the appellant made a payment of Rs. 7,00,000 by a demand draft 1Booth No. 51, Sector 21-C, Faridabad.

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Adated 9 February 2011 in favour of the third respondent. The demanddraft was encashed. The revision filed by the third respondent beforethe first respondent was allowed and the resumption order was restored.The appellant filed a writ petition before the High Court.

6. By the impugned judgment dated 8 December 2014, the HighBCourt dismissed the writ petition filed by the appellant principally on theground that twenty years had elapsed since the initial allotment and theappellant had failed to comply with the terms of the allotment. Aggrieved,the appellant has filed the present appeal.

7. On 2 December 2016, this Court issued notice subject to theCappellant depositing a sum of Rs. 20 lakhs before the Registry of thisCourt to be kept in a short-term fixed deposit. The appellant has depositedthe sum before the Registry.

8. The counsel for the appellant contented that the default inpayment was due to financial constraints and extenuating familyDcircumstances. It was contended that the appellant has already paid thetotal sale consideration along with the penalty imposed by the secondrespondent. On the other hand, the counsel for the respondent contendedthat the market value of the booth in question has appreciated significantlyand that the present appeal deserves to be dismissed. It was furthercontended that the appellant has never been ready and willing to effectEthe payment of dues.

9. We have heard the learned counsel for the parties. The boothwas allotted in 1996. The bid at the auction was accepted for Rs. 7,55,000,of which a total amount of Rs 1,88,750 (25% of the total sale consideration)was paid by the appellant.F

10. After making a payment of 25% of the sale consideration, theappellant defaulted on the terms and conditions of the allotment. Thethird respondent issued notices to the appellant on 3 December 1996, 20February 1998, 20 October 1999, 3 June 1999 and 18 September 2000.Despite service of the notices, the appellant failed to make any paymentGin accordance with the terms and conditions of the allotment letter. InSmrita Jain v HUDA[2],a three judge Bench of this Court held that arank defaulter is not entitled to any relief. Despite being afforded multiple 2SLP (C) No. 14864 of 2013

opportunities to effect payment of the balance sale consideration, theappellant continued to default on the terms and conditions of the allotment.

11. The appeal filed by the appellant against the resumption orderdated 2 February, 2001 was dismissed in default on 23 April 2002. Theapplication for restoration of appeal filed on 17 June 2002 was dismissedin default on 23 October 2007. Belatedly after a period of three years,another restoration application was filed on 22 December 2010. Theabove factors have, in our view,justifiably weighed with the High Court.

12. The appellant executed a General Power of Attorney in favourof a person by the name of Ajay Pal on 7 June 2001 nearly four monthsafter the order for resumption was passed. In Ved Prakash Kathuriav HUDA[3], a two judge Bench of this Court noted the frequency of suchtransactions as an attempt by unscrupulous buyers to succeed with thehigher authorities. The High Court has, and in our view with justification,held that the GPA executed by the appellant appeared to be an assignmentof litigation by the appellant.

13. Pursuant to the order of this Court dated 14 December 2018,the first respondent has filed an additional affidavit before this Court. Itis stated in the affidavit that the neighbouring booths of a comparablearea have been sold in 2011 for around Rs 1 crore. It is submitted thatthe current estimated price of the booth in question is around Rs 2.14crores. The appellant has been in possession of the booth since 1996after paying a meagre sum of Rs 8,88,750.

14. The counsel for the appellant contended that this Court mayexercise its powers under Article 142 of the Constitution to grant reliefto the appellant. The jurisdiction of this Court under Article 142 cannotbe invoked to protect an unscrupulous buyer who took possession of acommercial property by paying only 25% of the sale consideration andwillfully defaulted on the amount of money payable. The appellant hascontinued in possession of the booth for over 23 years. Despite beingafforded multiple opportunities by the third respondent to effect payment,the appellant continued to default on payments due. Coupled with theabove circumstances, there has been an assignment under a GeneralPower of Attorney. During the hearing of this appeal, the appellant wasoffered an opportunity to regularize the allotment if a substantial amount 2SLP (C) No. 14864 of 2013

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Aof money was paid to the third respondent. Even at this stage, theappellant did not show any inclination to pay a fair amount to the thirdrespondent. We, hence, find no reason to interfere with the judgment ofthe High Court. The order of resumption shall stand confirmed.

15. During the pendency of the proceedings in this Court, theBappellant deposited an amount of Rs 20 lakhs before the Registry of thisCourt pursuant to the interim order. The third respondent is at liberty towithdraw the amount deposited by the appellant with accrued interesttowards charges for unauthorized occupation. The third respondent shallcompute occupation charges of the booth from 6 May 1996 and adjustthe dues for occupation from the amount deposited by the appellantCwithin two months of this order. Any surplus that remains shall be returnedto the appellant with interest at the rate of 6% per annum. If the amountdetermined by the third respondent is in excess of the above amountdeposited by the appellant, the third respondent will be at liberty to fileappropriate proceedings for recovery.

D16. The appeal is disposed of in the aforesaid terms. There shallbe no order as to costs.

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Divya Pandey

Appeal disposed of.

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