THE VICE CHANCELLOR, RANCHI UNIVERSITY & ORS. versus JHARKHAND STATE HOUSING BOARD & ORS. on 23 October 2018

SUPREME COURT REPORTS

[2018] 13 S.C.R.

ATHE VICE CHANCELLOR, RANCHI UNIVERSITY & ORS.

v.

JHARKHAND STATE HOUSING BOARD & ORS.

(Civil Appeal No. 8113 of 2009)

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OCTOBER 23, 2018

[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]

Eviction – Eviction of unauthorised occupants – Respondent-State Housing Board allotted flats to the appellant-University forthe residence of the University’s employees – In terms of allotmentCagreement, University was required to pay 10% of the totalconsideration fixed and balance in 180 installments – Universitygot possession of the flats and they allotted few flats to its employees– However, University defaulted in payment of installments andconsequent to which Board raised demand of defaulted sum –DUniversity failed to make the payment and consequently, the Boardcancelled the allotment, but decided to allot the flats to some of theoccupants (retired employees) on request made by the University –Thereafter, University realised that there was some foul play insending of letter of request for allotment to the Board and therefore,cancelled the request letter, and warned the concerned employeesEto not act upon such request and nor should make any payment tothe Board – Despite this, employees (including retired employees-respondent nos. 4 and 5) made payments for the flats allotted tothem and University also made some payments towards the saleconsideration – Whether retired employees-respondent no.4 and 5Fwere in unauthorised occupation of the flats and were liable to paypenal rent to the University for their wrongful use and occupationof flats – Held: The occupants (respondent nos. 4 and 5) had rightto remain in lawful occupation of the flats only so long as they werein the employment of the University, and on payment of the houserent fixed by the University as per their policy – The day their servicesGcame to an end, their possession in flats became unlawful andunauthorised, and they were under contractual and legal obligationto handover the possession of flats to their employer – Insofar asmoney deposited by the respondent nos.4 and 5 to the Board contraryto the directions issued by the University is concerned, the payment H

THE V. C., RANCHI UNIVERSITY v. JHARKHAND STATEHOUSING BOARD

made by the respondent nos.4 and 5 did not create any independentright in their favour and nor such payment even if made by theemployees impaired the rights of the University in any manner inrelation to the allotment of flats qua Board – Furthermore, thecancellation order of the Board was revoked when it accepted thelump sum payments of monthly installments from the University andresultantly, the original allotment stood restored in favour of theUniversity – Thus, respondent nos. 4 and 5 liable to be evicted fromthe flats and also liable to pay penal rent to the University for theiruse and occupation till the date of their eviction – Public Premises(Eviction of Unauthorised Occupants) Act, 1971.

Allowing the appeal, the Court

HELD: 1. The writ petitioners’ (respondent nos. 4 and 5)right to remain in lawful occupation of the flats could subsist onlyso long as they were in the employment of the University, andthat too on payment of house rent fixed by the University as pertheir policy. In other words, the writ petitioners could exercisetheir right of occupation qua the University only during theirservice tenure subject to fulfillment of the requisite terms andconditions and their right of occupation was terminable on theirservice tenure coming to an end. [Para 19][1090-C]

2. It is not in dispute that the writ petitioners (respondentnos. 4 and 5) had retired long back from their services and yetthey retained unlawful possession of the flats in question. TheSingle Judge of the High Court has rightly held that writpetitioners (respondent nos. 4 and 5) were in unauthorizedoccupation of the flats from the date they ceased to be in theemployment of the University and hence were liable to be evictedfrom the flats and were also liable to pay penal rent to the Universityfor their use and occupation till the date of their eviction.[Paras 21 and 22][1090-F-G]

3. The contention of the respondent nos. 4 and 5 thatsince they had deposited some money with the Board for allotmentof the flats in their personal capacity pursuant to the decision ofthe University taken by them in that behalf, a right had accruedin their favour to remain in occupation of the flats even after theyhad ceased to be in the employment of the University in their A

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Aindividual rights is rejected for more than one reason. First, It isnot in dispute that the University had withdrawn its decision toallot the flats to its employees immediately and also warned themnot to enter into any transaction with the Board directly in relationto the flats, else they will have to face the disciplinary action.This was sufficient indication to the employees not to deal withBthe Board in any manner in their individual capacity: Second, it isalso not in dispute that the University even after cancellation ofthe initial allotment order went on paying monthly installmentsin lump sum to the Board and the Board in turn also went onaccepting the money as and when paid by the University. TheCacceptance of payment from the University subsequent tocancellation by the Board amounted to revocation of thecancellation order and resulted in restoration of the initialallotment made in favour of the University: Third, the issue inthe writ petitions was between the writ petitioners (employees)

and the University because the writ petitioners had come intoDpossession of the flats through the University. They had,therefore, no independent cause of action in relation to the issueof flats qua the Board; Fourth, the writ petitioners did not file anysuit for specific performance of contract against the Board forenforcement of their alleged independent contractual right inErelation to the flats. Their alleged disputes qua the Board inrelation to flats, therefore, could not have been gone into in theseproceedings: Fifth, in any event, mere payment of Rs.10,000/- tothe Board by the writ petitioners contrary to the directions issuedby the University did not create any independent right in theirfavour and nor such payment even if made by the employeesFimpaired the rights of the University in any manner in relation tothe allotment of flats qua Board and lastly, the cancellation havingbeen revoked on account of acceptance of payment from theUniversity by the Board, the original allotment dated 05.07.1976stood restored in favour of the University. [Paras 23 and 25]G[1090-G-H; 1091-A, B-G]

4. The University would be at liberty to proceed againstthe writ petitioners seeking their eviction from the flats in questionby filing appropriate proceedings before the Competent Authorityunder the Public Premises (Eviction of Unauthorised Occupants)HAct, 1971 and also claim in the said proceedings arrears of penal rent payable by the writ petitioners from the date their possessionbecame unauthorized in the flats till their delivery. Likewise, thewrit petitioners and other employees (occupants) would also beat liberty to take refund from the Board of their paid amount,which they claimed to have deposited with the Board for allotmentof the flats along with interest at a reasonable rate.[Paras 28 and 30][1092-B, D]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8113 of

From the Judgment and Order dated 21.11.2006 of the High Courtof Jharkhand at Ranchi in L.P.A. No. 440 of 2006.

Gopal Prasad, Adv. for the Appellants.

Pradeep Kant, Sr. Adv., Ms. Lalita Kohli, Sharif Hussain,Divyanshu Sahay, Sanjay Goel for M/S. Manoj Swarup and Co., PavanKumar, Himanshu Shekhar, S. D. Singh, Ms. Bharti Tyagi, Ms. Shweta S.,Advs. for the respondents.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. This appeal is directedagainst the final judgment and order dated 21.11.2006 passed by theHigh Court of Jharkhand at Ranchi in L.P.A. No. 440 of 2006, wherebythe High Court setting aside the order of the Single Judge allowed theL.P.A. filed by the respondent Nos.9 and 10 herein.

2. In order to appreciate the issues involved in this appeal, it isnecessary to set out the facts in detail hereinbelow.

3. The appellant is the University at Ranchi (hereinafter referredto as “the University”) whereas respondent no.1 is the State HousingBoard (hereinafter referred to as “the Board”) created under the StateLaw.

4. On 05.07.1976, the Board allotted 192 Flats to the Universityfor the residence of the University’s employees known as “RanchiUniversity Housing Colony” for a total consideration of Rs.42,24,000/-.

5. In terms of the allotment agreement, the University was requiredto pay 10% of the total consideration to the Board and the balance moneywas to be paid in 180 monthly installments - each for Rs.31,195.30.

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A6. The University paid 10% of the total consideration and startedpaying monthly installments, which they paid up to the year 1991 regularly.However, there were some defaults made by the University in payingremaining installments.

7. The University in the meantime got possession of the flats andBthey allotted few flats to its employees. The University also in themeantime converted some flats for its use as Girls Hostel Block. In themeantime, the University paid lump sum Rs.5 Lakh towards monthlyinstallments to the Board towards total consideration.

8. The Board on 19.10.1989, however, raised a demand ofCRs.2,62,44,149/- on the University, which included partly balance moneytowards principal amount and remaining towards interest accrued onthe defaulted sum. Since the University did not satisfy/pay the demandof Rs.2,62,44,149/-, the Board cancelled the allotment by order dated29.11.1992 and decided to allot the flats to some of the occupants(employees) who were by that time retired but continued to occupy theDflats. This allotment was made on the request made by the University tothe Board.

9. The University, however, on 29.01.1993 realized at their endthat there was some foul play behind sending of the letter of allotmentfrom the University to the Board for allotment of the flats to its employeesEwhich was done apparently at the instance of some occupants. TheUniversity, therefore, immediately cancelled the request letter and warnedthe concerned employees that they should not act upon the request earliersent by the University to the Board and nor should make any payment tothe Board to obtain allotment of flats in their personal capacity. TheFemployees were also warned not to enter into any independent transactionwith the Board in relation to the flats in question, else erring employeeswould have to face disciplinary action. The University also wrote to theBoard on 30.01.1993 that the University is also on its part requesting theState to arrange for payment of balance money to the Board to enablethem to complete the transaction in terms of the allotment order.G

10. Despite this, 19 employees deposited Rs.10,000/- for allotmentof the flats to them. In the meantime, the University also paid Rs.onelakh, Rs.five lakh and some more money towards the sale considerationto the Board on different dates. The Board also accepted the said moneypaid by the University.H

11. It is with these background facts, three writ petitions, namely,Writ Petition (C) No.3652/1996, Writ Petition (C) No.3442/2002 andWrit Petition (C) No.1342/2002 were filed by the employees-occupantsagainst the Board and the University seeking therein a prayer for issuanceof the writ of mandamus directing the Board to execute the lease deedof the flats in question and allot the said flats in their favour. The Universitycontested these writ petitions on several grounds.

12. By order dated 08.08.2006, the learned Single Judge dismissedthe said writ petitions. It was held that the writ petitioners were inunauthorized occupation of the flats in as much as they had no rightwhatsoever to either remain in occupation or to ask for any relief inrelation to the flats except to pay penal rent to the University for theirwrongful use and occupation of the flats.

13. The writ petitioners felt aggrieved and filed intra-court appealbefore the Division Bench of the High Court. By impugned order, theDivision Bench allowed the appeal, set aside the order of the learnedSingle Judge and while allowing the writ petitions issued a writ ofmandamus directing the Board to execute the lease deed of the flats inquestion in favour of each occupant on the basis of terms and conditionsas prevailing today and as may be mutually agreed between them.

14. It is against this order; the University has felt aggrieved andfiled the present appeal by way of special leave to appeal in this Court.

15. Heard Mr. Gopal Prasad, learned counsel for the appellantand Mr. Pradeep Kant, learned senior counsel for the respondent(s).

16. Having heard the learned counsel for the parties and on perusalof the record of the case, we are constrained to allow the appeal, setaside the impugned order and restore that of the learned Single Judge asindicated below.

17. In our considered opinion, the approach, reasoning and theconclusion arrived at by the Learned Single Judge was just, legal andproper as against that of the Division Bench for the reasons mentionedhereinbelow.

18. Firstly, it is not in dispute that the original allotment of the flatsmade by the Board was in favour of the University. Secondly, it is alsonot in dispute that the University had made substantial part payment tothe Board pursuant to the allotment order, which the Board had accepted.

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AThirdly, it is also not in dispute that the writ petitioners were the employeesof the University, and therefore they were allotted flats by the Universityby virtue of their employment conditions. In other words, the writpetitioners came in occupation of the flats through their employer i.e.University. If they were not in the employment of the University, theywould not have been able to occupy these flats in their individual right atBthat point of time for want of any privity of contract with the Board.

19. In our considered opinion, the writ petitioners’ (respondentnos. 4 and 5) right to remain in lawful occupation of the flats couldsubsist only so long as they were in the employment of the University,and that too on payment of house rent fixed by the University as perCtheir policy. In other words, the writ petitioners could exercise their rightof occupation qua the University only during their service tenure subjectto fulfillment of the requisite terms and conditions and their right ofoccupation was terminable on their service tenure coming to an end.

20. The day on which their services came to an end, whether dueDto their tendering the resignation, or on attaining the age of superannuationor for any other reasons, their right to continue in occupation of the flatscame to an end. Their possession in the flats became unlawful andunauthorized. They were under contractual and legal obligation tohandover vacant and peaceful possession of the flats to their employerEi.e. the University so as to enable the University to allot the flats to otheremployees who were eligible for allotment.

21. It is not in dispute that the writ petitioners (respondent nos. 4and 5) had retired long back from their services and yet they retainedunlawful possession of the flats in question.F

22. In our opinion, the learned Single Judge has rightly held thatrespondent nos. 4 and 5 (writ petitioners) were in unauthorized occupationof the flats from the date they ceased to be in the employment of theUniversity and hence were liable to be evicted from the flats and werealso liable to pay penal rent to the University for their use and occupationtill the date of their eviction. So far it has not been done.G

23. We are not impressed by the submission of the learned Seniorcounsel for the respondent nos. 4 and 5 (writ petitioners) when hecontended that since the writ petitioners (Respondent Nos. 4 and 5)deposited some money with the Board for allotment of the flats in their H

personal capacity pursuant to the decision of the University taken bythem in that behalf, a right had accrued in their favour to remain inoccupation of the flats even after they had ceased to be in the employmentof the University in their individual rights.

24. This submission is wholly untenable and deserves rejectionfor more than one reason.

25. First, It is not in dispute that the University had withdrawn itsdecision to allot the flats to its employees immediately and also warnedthem not to enter into any transaction with the Board directly in relationto the flats, else they will have to face the disciplinary action. This wassufficient indication to the employees not to deal with the Board in anymanner in their individual capacity: Second, it is also not in dispute thatthe University even after cancellation of the initial allotment order wenton paying monthly installments in lump sum to the Board and the Boardin turn also went on accepting the money as and when paid by theUniversity. The acceptance of payment from the University subsequentto cancellation by the Board amounted to revocation of the cancellationorder and resulted in restoration of the initial allotment made in favour ofthe University: Third, the issue in the writ petitions was between the writpetitioners (employees) and the University because the writ petitionershad come into possession of the flats through the University. They had,therefore, no independent cause of action in relation to the issue of flatsqua the Board; Fourth, the writ petitioners did not file any suit for specificperformance of contract against the Board for enforcement of theiralleged independent contractual right in relation to the flats. Their allegeddisputes qua the Board in relation to flats, therefore, could not have beengone into in these proceedings: Fifth, in any event, mere payment ofRs.10,000/- to the Board by the writ petitioners contrary to the directionsissued by the University did not create any independent right in theirfavour and nor such payment even if made by the employees impairedthe rights of the University in any manner in relation to the allotment offlats qua Board and lastly, the cancellation having been revoked onaccount of acceptance of payment from the University by the Board,the original allotment dated 05.07.1976 stood restored in favour of theUniversity .

26. In the light of the foregoing discussion/reasons, we cannotconcur with the reasoning and the conclusion of the Division Bench andare inclined to agree with that of the learned Single Judge.

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27. The appeal thus succeeds and is allowed. The impugned orderis set aside, and that of the learned Single Judge restored. The writpetitions out of which this appeal arises is accordingly dismissed.

28. Needless to observe, the University would be at liberty toproceed against the writ petitioners seeking their eviction from the flatsBin question by filing appropriate proceedings before the CompetentAuthority under the Public Premises (Eviction of UnauthorisedOccupants) Act, 1971 and also claim in the said proceedings arrears ofpenal rent payable by the writ petitioners from the date their possessionbecame unauthorized in the flats till their delivery.

C29. The University is also at liberty to finalize the issue of allotmentof the flats with the Board with the intervention of the State expeditiously.It will be for the benefit of the University and its employees, in service.

30. Likewise, the writ petitioners and other employees (occupants)would also be at liberty to take refund from the Board of their paidDamount, which they claimed to have deposited with the Board for allotment of the flats along with interest at a reasonable rate.

31. On such request being made by the writ petitioners, the Boardwill refund the money to the writ petitioners and any such employeeswithin three months from the date of making a demand after verificationas an outer limit.E

32. In the light of this order, the intervention application andimpleadment application stands disposed of.

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Appeal allowed.

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