An allottee’s non-occupation or subletting cannot defeat G.O. benefits absent an express disqualification.

The plaintiff was allotted the suit property by the second defendant, Tamil Nadu Small Industries Development Corporation, in 1973. He sought a declaration that he was entitled to purchase it under G.O. (Ms.) No. 128 dated 24 March 1997, and a direction to the Corporation to execute a sale deed upon payment of ₹9,600.

The trial court granted relief, but the first appellate court allowed an appeal brought by the third defendant, holding that the plaintiff’s subletting of the property and lack of physical occupation disentitled him to the Government Order’s benefit. The Corporation defendants did not appeal the trial court’s decree. The plaintiff appealed to the High Court under Section 100 CPC.

Whether the third defendant could challenge the trial court’s decree when the first and second defendants had not appealed.

Whether the first appellate court erred in holding that the plaintiff was disentitled to the benefit of G.O. (Ms.) No. 128 because he had sublet the property and was not in physical occupation, despite the absence of such a disqualification in the Government Order.

Under Section 96 CPC, a defendant who is a party to the suit may appeal against a decree; the appellant accepted that the third defendant could challenge the decree in this case.

Under Section 100 CPC, the High Court may interfere with a first appellate court’s factual findings where, among other grounds, they are perverse, based on inadmissible evidence, or arrived at without evidence. The Court relied on Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722, for that principle.

G.O. (Ms.) No. 128 dated 24 March 1997 provided the relevant purchase benefit; the Court found that it prescribed no disqualification based on subletting or the allottee’s lack of physical occupation.

The Court rejected the challenge to the third defendant’s right to appeal, noting the appellant’s concession that a defendant-party could appeal under Section 96 CPC.

On the second issue, it examined the Government Order and the evidence, including the testimony of the Corporation’s officer, who accepted that the Order contained no disqualification for subletting or absence from the property. The first appellate court had therefore imposed a condition not found in the Government Order. Its conclusion was contrary to the evidence and perverse, permitting interference in second appeal under the principle in Kondiba Dagadu Kadam.

The second appeal was allowed; the first appellate court’s judgment and decree were set aside, and the trial court’s decree was restored. No costs were awarded.