Summary
The Supreme Court set aside a High Court order that had restored a Chandigarh booth site whose lease was cancelled for non-payment of instalments. The allottees had been given repeated opportunities and a final chance to pay, and the alleged tenant who also challenged the resumption had produced no proof of tenancy, so no separate notice to it was required and its litigation was a proxy action for the defaulting allottees.
Issues
- Whether the High Court, under Article 226, was justified in quashing the cancellation and resumption of a leasehold site cancelled for failure to pay instalments of the premium after notice and hearing.
- Whether resumption was vitiated because notice was not served on an alleged tenant of the allottees.
- Whether the alleged tenant had standing to challenge the resumption, relying on the Full Bench reading of 'transferee' in Section 2(k) of the Capital of Punjab (Development and Regulation) Act, 1952.
Provisions considered
- Rule 12(3), Chandigarh Lease Hold of Sites and Building Rules, 1973The show cause notice for default in paying the instalments was issued under this rule; the Court noted that the lease was cancelled only after the notice and several opportunities of hearing, which it treated as due process. (¶¶ 4, 10, 11)
- Section 2(k), Capital of Punjab (Development and Regulation) Act, 1952The alleged tenant relied on a Full Bench decision holding that 'transferee' includes a lessee. The Court held that decision inapplicable because the respondent placed no material to show it was a tenant of the allottees at all. (¶¶ 9, 11)
- Article 226, Constitution of IndiaThe Court held that the High Court erred in interfering in writ jurisdiction with the orders of the statutory authorities, having lost sight of the allottees' repeated default and the absence of any proof of tenancy. (¶¶ 7, 11, 12)
Held
- Where the lease of an auctioned site was cancelled after a show cause notice and several opportunities to clear the outstanding dues, and the appellate authority gave a final chance to pay which the allottees did not use, the cancellation followed due process and the High Court erred in quashing it. (¶¶ 10, 11)
- No notice of resumption was required to be served on a person claiming to be the allottees' tenant when nothing on record showed any tenancy; the absence of such notice could not be a ground to set aside the resumption. (¶ 11)
- The Full Bench decision reading 'transferee' to include a lessee did not help a respondent who could not establish that it was a tenant at all; its litigation was a proxy action on behalf of the defaulting allottees and an abuse of process. (¶¶ 9, 11)
Result
Appeals allowed; the High Court's common order restoring the site set aside.