Full Judgment Text
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CASE NO.:
Appeal (civil) 3940 of 2007
PETITIONER:
HARYANA STATE INDUSTRIAL DEVELOPMENT CORPORATION
RESPONDENT:
M/S CORK MANUFACTURING CO
DATE OF JUDGMENT: 27/08/2007
BENCH:
TARUN CHATTERJEE & P.K. BALASUBRAMANYAN
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 3940 OF 2007
(Arising out of SLP(C) No.11683 of 2006)
P.K. BALASUBRAMANYAN, J.
1. Leave granted.
2. The defendant in Suit No. 8 of 1995 in the court
of Senior Sub-Judge, Gurgaon is the appellant in this
appeal. The appellant allotted plot No. 259 on 12.3.1986
to the respondent through its sole proprietor Om Prakash
Saharan. The approximate area of the plot is 1000 square
meters and the tentative price was Rs. 1,20,000/-. On
12.2.1988, a formal agreement was entered into between
the parties. According to the agreement, the allottee had
to start construction of a building for the setting up of an
industrial unit within a period of three months and had to
complete the construction within one and half years from
the date of issue of the letter of allotment. The
construction had to be completed and the installation of
the machinery had also to be completed and the
commercial production was to be started within a period
of two years from the date of allotment. The Agreement
also provided that failing compliance with the above
condition by the allottee, the plot was liable to be resumed
and 10% of the cost of the plot deposited by the allottee at
the time of allotment was liable to be forfeited. The letter
of allotment was issued on 24.12.1987. The allottee did
not fulfil the condition of starting commercial production
within two years of the letter of allotment. This fact is not
in dispute. The appellant thereupon issued various
notices to the allottee. On 19.7.1991, the allottee
requested for extension o time. That request was rejected.
On 13.9.1991, according to the appellant, the appellant
issued an order of resumption which specifically referred
to the contravention of the terms and conditions of
allotment by the allottee. According to the appellant,
possession was taken back on 20.9.1991. The plot was
thereafter re-allotted to M/s Insulation & Electrical
Products (P) Ltd., New Delhi on 2.4.1992. Since that
allottee also did not fulfil the conditions, the said
allotment was cancelled on 6.1.1994.
3. The respondent, the plaintiff, filed an application
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for referring the dispute to Arbitration. The same was
rejected. Respondent then approached the Consumer
Forum, but that complaint was also dismissed.
4. On 5.10.1995, the respondent filed the present
suit No. 8 of 1995 for a permanent injunction restraining
the defendant \026 appellant from interfering, disturbing or in
any manner tampering with the possession of the plaintiff
over the plot in dispute, and restraining the defendant \026
appellant from re-allotting the plot in question to any
other person on the basis of the resumption order, if any,
or otherwise. Though there was no prayer regarding any
resumption order, it was asserted that the resumption
order, if any passed by the defendant was void, illegal,
non-est and not binding upon the plaintiff in any manner.
A decree for mandatory injunction directing the defendant
\026 appellant to remove an existing high-tension wire going
over the plot in question and also to remove an electrical
pole existing in the plot and to make available the plot free
from all kinds of hindrances for raising the construction
was also prayed for. The plaint was signed by one Uma
Shankar who was said to be a power of attorney of the
plaintiff \026 firm. The plaint proceeded on the footing that
there was also an agreement between the parties that the
electric pole located in the plot would be got removed by
the appellant and it was in view of the failure of the
appellant to get it done, that the construction could not be
started by the plaintiff. It was also admitted in the plaint
that there might have been an order of resumption of the
plot, but if there was any such order, it was illegal, void
and ineffective and not binding on the rights of the
plaintiff because of lack of opportunity of hearing given to
the plaintiff. The plaint proceeded to state that the
defendant was threatening to dispossess the plaintiff
pursuant to that order of resumption; that the plaintiff
was in possession and that the plaintiff was entitled to
relief as claimed.
5. The defendant filed a written statement
contending that the plot in question was resumed on
13.9.1991 in view of the plaintiff contravening the terms of
the allotment and possession was taken back on
25.9.1991. The plot had been re-allotted to another
concern. The plaintiff had neither any right over the plot
in question nor any possession over the same. Since the
plaintiff had defaulted, the plot had been rightly resumed.
There was no stipulation or condition in the allotment that
the appellant had the obligation to remove the electric post
located in the plot or the overhead electrical line. The
plaintiff was not in posssession. The suit was liable to be
dismissed.
6. On behalf of the plaintiff, one Jai Bhagwan was
examined as P.W. 6. He gave evidence to the effect that
the plot in dispute was allotted to Om Parkash Saharan.
He had been appointed as General Power of Attorney by
the said Om Parkash Saharan on 9.4.1996. Om Parkash
Saharan was the sole proprietor of the business of the
plaintiff \026company. Obviously, this witness who entered
the picture by virtue of a power of attorney executed on
9.4.1996, was not a party to any of the things that had
taken place prior to the grant of power of attorney in his
favour and had no knowledge of them. Om Parkash
Saharan in whose name the allotment was made did not
go to the box. In the box, P.W. 6 admitted that the
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company had received the letter warranting of the
proposal to resume the plot because of its failure to fulfil
the condition of allotment. He stated that because of the
high-tension wire passing over the plot in dispute, it was
not possible to raise construction thereon. He admitted
that one week prior to the institution of the present suit,
the plaintiff came to know that defendant had resumed
the plot in dispute and had also prepared a report that
possession had been taken back. He asserted that the
plaintiff had not surrendered the possession of the suit
property and the plaintiff was in possession till date. He
stated that letters sent intimating the proposal to resume
the plot were illegal and void. No opportunity of hearing
was afforded prior to the resumption of plot in dispute.
He admitted that the defendant had issued Exhibit
PW4/11 letter to Om Parkash Saharan, but no payment
was made by Saharan in pursuance thereof. He stated
that he knew Om Parkash Saharan since 1983. He
admitted that the allottee had to start construction within
two years from the date of allotment. He admitted that
within the prescribed period, no construction was raised
but claimed that that was because of the passing of the
high-tension wire over the property. He denied the
suggestion that the plot was resumed on 13.9.1991 and
possession was taken on 25.9.1991. He pleaded
ignorance of the fact that the plot in question was re-
allotted to another Om Parkash, son of Arjan Lal and that
possession had been given to him since 2.9.1994. He
denied the suggestion that he was aware at the time of
execution of the Power of Attorney in his favour that the
plot in dispute was re-allotted to Om Parkash son of Arjan
Lal. He pretended ignorance of the filing of a complaint in
the District Consumer Forum earlier by the plaintiff and
about the dismissal of the same. He also pretended
ignorance of the fact that a petition under the Arbitration
Act was filed by the plaintiff and that was also dismissed.
But, he admitted that no construction was started by the
time the suit was filed. He denied the suggestion that he
had no right to file the present suit. The power of attorney
in his favour was marked as PW6/1.
7. Letter PW-4/5 produced by the plaintiff and
proved through P.W. 4 examined on behalf of the plaintiff,
was a final show cause notice given to the plaintiff \026
company on its failure to set up an industrial unit in the
plot in question. In that notice, after informing the
plaintiff that no further extension of time was possible, the
plaintiff was called upon to show cause within a period of
35 days from the date of issue of that letter as to why the
plot allotted to the plaintiff be not resumed on account of
the failure of the plaintiff to set up the unit within the
extended period. The plaintiff was informed that in case
no satisfactory explanation was received within the period
specified, the Corporation would be constrained to resume
the plot without making any further reference to the
plaintiff. Exhibit PW4/16, the letter dated 1.4.1991 sent
in reply to the above letter dated 4.3.1991 after
acknowledging the threat of resumption stated that the
plaintiff was quite eager and sincere in its desire to set up
an industrial unit but since Shri Om Parkash Saharan,
who signed the letter, was under severe stress and strain
due to a serious accident which made him almost
incapacitated for a long period, he could not take effective
steps to undertake the work, and that the plaintiff hoped
to take up the work and complete it in four months and
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praying that some more time may be allowed for that
purpose. It is also seen from an earlier letter PW 4/6
dated 27.3.1991, that the appellant had specifically
brought to the notice of the plaintiff that the plaintiff had
contravened the terms of the agreement by not taking up
the construction and calling upon the plaintiff to show
cause within 35 days why the plot of land should not be
cancelled. This was followed by PW4/9 dated 15.9.1991
conveying the decision of the appellant to resume the plot
for non-compliance with the terms of allotment. Thus the
correspondence marked on the side of the plaintiff itself
clearly indicated that the plaintiff had been given notice of
the resumption for failure of the plaintiff to fulfil the terms
of the allotment. The correspondence produced by the
plaintiff also indicates that there was no stipulation
outside the terms of the written allotment letter about any
promise of removal of any electrical pole or electrical line
passing over the plot in question. Otherwise, that would
have been mentioned in Ex. PW4/16 dated 1.4.1991.
8. The case tottered out on behalf of the plaintiff in
the trial court was that the authorities had agreed to have
the electrical pole removed from the plot and since it was
not removed, the work could not be started. This is not
reflected by the written allotment letter. In other words,
there is no term therein to that effect. Such a claim is
also belied by the letters written by the plaintiff which
have been marked on the side of the plaintiff as exhibits
and reference to one of them has been earlier made. Some
correspondence with some officers of the appellant
regarding the removal of the electric pole was relied on to
say that outside the written agreement, the appellant had
agreed to get the electric pole and overhead line removed.
There was also no evidence to prove the possession
claimed by the plaintiff as on the date of suit.
9. In spite of such glaring factors emerging, the
trial court proceeded to accept the story of the plaintiff
that it had not been given notice of the resumption of the
land and that it continued to be in possession and that
there was a condition for removal of the electric pole and
the electrical line and since the pole and the line were
removed only by 30.11.1995, the plaintiff had time to take
up the project thereafter. I must say that the decision of
the trial court shows total lack of application of mind and
non consideration of the pleadings and the evidence in the
case. The suit was thus decreed declaring the resumption
order dated 13.9.1991 illegal and against the principles of
natural justice and setting it aside, a relief that does not
even seen to be sought in the plaint. The lower appellate
court also toed the line of the trial court and dismissed the
appeal, again, without proper advertence to the relevant
materials available in the case and even without adverting
to the fact that P.W. 6, the power of attorney holder had
no knowledge of what had transpired earlier even on his
own showing and that the original grantee Om Parkash
Saharan had not even come forward to speak to the case
of the plaintiff. The appeal was dismissed by the Appellate
Court. I must say that as a court of first appeal and as
the final court of facts, the Appellate Court had a duty to
reappraise the entire material to decide the points arising
and the appellate court in this case has miserably failed to
perform its duty.
10. The defendant filed a Second Appeal. Along with
the Second Appeal, since the plaintiff had pretended
ignorance of the order of resumption, on behalf of the
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defendant, a legal notice sent by counsel for the plaintiff
was also produced by way of additional evidence by
invoking Order 41 Rule 27 of the Code of Civil Procedure.
We must say with regret that the Second Appellate Court
without any application of mind ---- in fact it pains me to
record out of my experience in this Court for three years,
that the particular High Court is disposing of Second
Appeals in such a cavalier manner that nothing else is
needed to bring discredit the system itself --- rejected the
Second Appeal by stating that no substantial questions of
law arose in the Second Appeal. This was after dismissing
the application filed under Order 41 Rule 27 of the Code, I
get the impression, even without trying to understand
what the suit is for, what was the nature of disposal of the
suits by the courts below and what that document implied
and what it established. The decree thus granted is under
challenge before us.
11. Learned counsel for the appellant submitted
that it was not a condition of the grant or allotment, that
the appellant would get removed an existing electric pole
or electric wire passing over the property before handing
over possession to the respondent. It is pointed out that
the plaintiff had unconditionally taken possession
pursuant to the allotment. Learned counsel pointed out
that the written letter of allotment does not contain any
such stipulation, on the other hand it contained a clear
stipulation that the allottee had to complete the entire
construction and start the commercial production within
two years from the date of issue of the letter of allotment.
Learned counsel further pointed out that even the letters
on the side of the plaintiff seeking extension of time did
not put forward any such claim and what was put forward
was only the incapacitation of the proprietor of the
plaintiff and the consequent delay in starting the
construction. Learned counsel further pointed out that
P.W. 6 examined as the power of attorney of the plaintiff,
came into the picture only in the year 1996 and had no
knowledge of things that transpired in the year 1991 when
the allotment was cancelled, the resumption order was
passed and the land was resumed. Om Parkash Saharan
who was the eo nominee allottee, had not even gone to the
box to speak about the letters relating to the failure of the
plaintiff to fulfil the conditions of allotment and speak
about the so called absence of knowledge about the order
of resumption. Learned counsel submitted that it was in
that context that the original notice sent by one P.
Bhaskaran, Advocate on behalf of the plaintiff to the
appellant \026 defendant was sought to be produced in the
Second Appeallate Court so that the conscience of the
court may be satisfied in that regard since the said notice
clearly acknowledged the letter conveying the factum of
the resumption of the plot allotted to the plaintiff by the
appellant. Learned counsel submitted that the High Court
was clearly in error in rejecting the application under
Order 41 Rule 27 even without applying its mind as to the
purpose for which the said document was produced and
the need for that document for rendering a decision more
satisfactory to the conscience of the Court and without
even properly understanding the scope of Section 100 of
Code of Civil Procedure and the duty a Second Appellate
Court is called upon to perform. Learned counsel pointed
out that even a finding of fact ignoring vital documents or
without advertence to the relevant evidence and without
asking itself the relevant questions, was a finding that was
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not binding on a Second Appellate Court under Section
100 of the Code. Learned counsel pointed out that there
was no evidence of the possession being with the plaintiff
as on the date of the suit and even the local
Commissioner’s report taken at the instance of the
plaintiff showed that the land was lying vacant. The
appellant had allotted the land to another person though
it had to be resumed again because of failure of that
person to fulfil the terms of the allotment to him. The
decree for injunction in favour of the plaintiff restraining
the appellant from interfering with the so called
possession of the plaintiff was clearly a decree not
supported by the necessary finding required under law
and a relief granted, unsupported by the necessary finding
based on evidence in that behalf, clearly amounted to the
lower appellate court making a substantial error of law
warranting correction by the High Court in Second Appeal.
Learned counsel submitted that the relief of declaration
granted was also unwarranted in the nature of the reliefs
claimed in the plaint.
12. On behalf of the respondent \026 plaintiff, it was
contended that the understanding was that the electric
pole and the overhead electric lines will be got removed by
the defendant \026 Corporation and since that was not done
till the year 1995, there was no default on the part of the
plaintiff. The High Court was justified in not admitting
fresh evidence in Second Appeal since the defendant had
the opportunity to produce the same before the trial court.
Learned counsel also submitted that the finding of
possession was a finding of fact and the High Court was
justified in not interfering with the same. Learned counsel
submitted that there is no reason to interfere with the
decree passed in the case.
13. The plaintiff had come forward with a dubious
case regarding the order of resumption of the plot in
question. There was clearly a default on the part of the
plaintiff in complying with the requirement of putting up
an industry in the plot and starting commercial
production within two years of allotment. The excuse put
forward by the plaintiff for not doing anything in the plot
was the existence of a electric pole and overhead electric
wires, which stood in the way of the construction. It was
the further case of the plaintiff that it was for the
defendant \026 Corporation to have got them removed while
delivering possession of the plot. We find from the written
instrument of allotment, that there was no such
stipulation therein. Having accepted the allotment on its
basis and taken possession of the plot, it is not open to
the plaintiff to raise a contention based on some other
subsequent understanding between the plaintiff and some
of the officers of the defendant or outside the agreement.
In fact, in the letter PW4/16, when such a case if true,
should have been put forward, such a case is not put
forward. There is also no evidence of any subsequent
agreement in that regard. Merely because the officers of
the appellant were induced to write letters regarding
removal of the pole long after the resumption does not
establish any such condition of allotment.
14. The plaintiff’s plea that it was not aware of the
order of resumption is belied by the letters marked on its
side through PW4 and the admission of PW6. These
letters clearly show that the plaintiff was given notice of
the resumption and was informed that if he did not
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comply with the requirement and sent satisfactory reply,
the land will be resumed without any further notice within
the time stipulated therein. Thus obviously, adequate
notice and adequate opportunity was given to the plaintiff
before the order of resumption was passed. The non-
examination of Om Prakash Saharan was fatal to the case
of the plaintiff under the circumstances. The courts below
acted perversely in entering a finding that the order of
resumption was illegal and was not binding on the
plaintiff. I find that the courts below have not adverted to
the relevant materials available. Moreover, it is seen that
P.W.6, who is examined on behalf of the plaintiff came into
the picture only in the year 1996 and was not a competent
witness to speak about anything that transpired in the
year 1991 and that the original allottee Om Parkash
Saharan had not even come forward to give evidence on
behalf of the plaintiff. It was a clear case for drawing an
adverse inference against the plaintiff for non examination
of Om Parkash Saharan. These vital aspects have been
ignored by the trial court and by the first appellate court
when they purported to find that the order of cancellation
was not binding on the plaintiff. I am of the view that a
finding ignoring legal evidence available in the case and
ignoring the inferences to be drawn from the
circumstances established, is a finding that can only be
described as perverse and such a finding is not binding on
a Second Appellate Court under Section 100 of the Code.
In fact, it compels interference by the Second Appellate
Court. The High Court has unfortunately not adverted to
anything relevant and was incorrect in thinking that the
findings of fact are not liable to be interfered with in the
case on hand. At least, it should have seen that parole
evidence to alter the terms of a written instrument was not
permissible and the fact that the courts below had relied
on such evidence justified interference by the High Court
in Second Appeal.
15. Same is the position regarding the finding on
possession. The correspondence with the Electricity
Board does not establish that the plaintiff continued to be
in possession notwithstanding its default and the order of
resumption with notice to the plaintiff. . The evidence of
P.W. 6 is not evidence at all of possession of the plaintiff
as on the date of the suit or of possession subsequent to
1991. There is no evidence to show that the plaintiff Om
Parkash Saharan, the allottee continued in possession
until the power of attorney was executed in favour of
P.W. 6. The suggestion to P.W. 6 that he was aware of the
resumption and re-allotment to another entity when he
filed the suit, is a justifiable suggestion on the facts of this
case. The finding on possession is also found to be based
on no legal evidence and consequently infirm and liable to
be interfered with by this Court as it should have been
interfered with by the Second Appellate Court.
16. I am also of the view that the Second Appellate
Court was clearly in error in refusing to admit in evidence
the notice sent on behalf of the plaintiff by its advocate to
the defendant. It must be noticed that not even an
objection was filed on behalf of the plaintiff to the
application under Order 41 Rule 27 of the Code denying
the issue of such a notice. There was no denial of the
status of the counsel who had issued the notice on behalf
of the plaintiff. There is a presumption that when an
Advocate sends a notice on behalf of a client, the notice is
sent by him on instructions from his client. The plaintiff
had no case before the High Court that it had not
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instructed the concerned counsel to send such a notice.
After all, the purpose for which the notice was produced
was only to show that the plaintiff was aware of the
resumption made in the year 1991 and the specific
acknowledgement of receipt of the concerned letters in
that behalf. Even otherwise, the letters produced at the
trial do indicate that the plaintiff was aware of the
resumption of the plot. Therefore, this was a case where
the document produced under Order 41 Rule 27 of the
Code was required to enable the High Court to pronounce
a judgment more satisfactory to its conscience
constituting other sufficient cause within the meaning of
Order 41 Rule 27 of the Code for production of additional
evidence. The authenticity of the notice had not been
questioned by filing an objection and the High Court was
therefore in error in thinking that it was not a document
which could be straight away accepted.
17. Thus, on the whole, I am satisfied that the
plaintiff had not made out any case for relief in the
present suit. The judgments of the courts below therefore
call for interference. I am satisfied that the appeal
deserves to be allowed. If the decree now passed is not set
aside, I apprehend that I would be failing in my duty
exercising jurisdiction under Article 136 of the
Constitution of India. After all, the jurisdiction of this
Court is a corrective jurisdiction and not a restricted one.
18. The appeal is therefore allowed. The judgments
and decrees of the courts below are set aside and the suit
filed by the plaintiff is dismissed with costs throughout.
19. During the course of the hearing, the defendant
-- appellant offered that the plot could be allotted afresh to
the plaintiff, if the plaintiff was willing to pay the price at
the rate of Rs.13,000/- per square meter which is the
current rate. The plaintiff was not willing to pay that
price. But learned counsel for the plaintiff contended that
the plaintiff had, obviously subsequent to the decreeing of
the suit, had put up a construction in the property. It is
obvious that on the date of suit, there was no
construction. The Local Commissioner’s report
establishes that and the evidence of P.W. 6 also indicates
that. In that situation, taking note of the circumstances, I
think it proper to give the plaintiff an opportunity to have
the land allotted to it afresh, on its paying a price for the
plot at the rate of Rs.10,000/- per square meter. In other
words, if the plaintiff \026 respondent pays to the defendant \026
appellant, the price of the plot at Rs.10,000/- per square
meter within four months from today, there will be a fresh
allotment of the plot by the defendant to the plaintiff.
While calculating the amount, the plaintiff will be entitled
to adjust any sum that might have been paid towards the
allotment of the plot originally made in the year 1987 and
it need only pay the balance amount. In case, the price at
the rate of Rs.10,000/- per square meter is not paid by
the plaintiff to the defendant within a period of four
months as stipulated above, the defendant would
forthwith take physical possession of the land and report
that fact to the trial court by way of the affidavit and deal
with the plot in accordance with law.
20. Before leaving this case, I think it necessary to
issue a direction and to make an observation. The
direction is to the appellant to initiate action against those
officers who were dealing with the cancellation of the
allotment and taking possession of the property, and more
particularly those who were in charge of the litigation and
who failed to produce vital documents including the notice
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issued on behalf of the plaintiff that was sought to be
produced in Second Appeal. It is absolutely necessary to
take such action in the interests of the appellant, the
citizens and the State since it should not be forgotten that
the appellant is a trustee of public property and is
expected to deal with it as a trustee with all care and
caution. The second is to exhort the trial courts, the first
appellate courts and the second appellate courts in the
State to show better application of mind while deciding a
lis keeping in mind that what they are performing is a
divine function that is onerous and at the same time
challenging. I am making these observations regarding
the courts in the concerned State since for the last three
years I have been noticing with regret the lack of
application in many a case that had come before this
Court.