Judgment:
Jawahar Lal Gupta, J.
1. The petitioner is aggrieved by the order dated February 3, 1992, a copy of which has been produced as Annexure P-12 with the writ petition. By this order, the Chairman, Chandigarh Housing Board, has rejected her representations, cancelled the allotment of Flat No. 291/1, Sector 45-A, which had been made in her favour and ordered the forfeiture of the amount of Rs. 54,000/- paid by her. A few facts may be noticed.
2. In the year 1987, the respondent-Board announced a Scheme for construction and allotment of 1100 flats 'for one and all'. The petitioner applied for allotment of one of the flats. She deposited an amount of Rs. 4000/- alongwith her application. A copy of this application has been produced as Annexure P-1 with the writ petition. At Sr. No. 10(a) in this application, the petitioner was required to state whether she or her husband or any of her dependent relations including unmarried children' own in full or in part on free hold/lease-hold or on hire-purchase basis a residential plot or house in Union Territory of Chandigarh or either of the Urban Estates of Mohali or Panchkula?'. In response to this query, she had said 'NO'. The petitioner avers that she had committed a mistake while submitting the application. A house No. 404, Sector 41-A, had been initially allotted to her husband. However, in pursuance to her application, the petitioner got a letter dated August 31, 1989 asking her to send more money because of the enhancement of the price of flats. In view of the fact that she had committed a mistake while submitting the original application, the petitioner states that she did not send the amount as demanded by the respondents through the above mentioned letter. On July 31, 1990, she was informed that House No. 291/1, Sector 45-A, had been allotted to her. She was asked to deposit Rs. 49, 875/- within thirty days. The petitioner avers that since she was not was not interested in the allotment of the house, she did not deposit the requisite amount within the stipulated period. She was given a reminder. In December 1990, she visited the office of the Board. She claims to have met one Shri Harnam Dass, the dealing superintendent. She explored the possibility of surrendering House No. 404, Sector 41-A so as to enable her to accept the allotment of House No. 291/1 Sector 45-A, Mr. Harnam Dass asked her to see him after three days. She met him. She was advised that the earlier house which was smaller in size could be surrendered and the newly allotted house could be given to her and the amount of money paid in respect of the earlier house in the shape of instalments would be adjusted against the newly allotted one--'
She was asked to submit an application for this purpose. On December 27, 1990, the petitioner along with her husband sent an application stating that after taking the possession of the house now allotted to her in Sector 45-A, they will surrender the House No. 404, Sector 41-A which had been allotted under an earlier scheme. She also submitted a Bank Draft for an amount of Rs. 50,000/- alongwith the application. A copy of the application along with the affidavit has been produced on record as Annexures P-5 and P-6 to the petition. She avers that there was no mala fide on her part and that 'she was not interested in getting a new allotment in her name until and unless the earlier house already (allotted) in the name of her husband was permitted to be surrendered.' Thereafter, she visited the office of the Board on a number of occasions. She requested the authorities to either refund the amount of Rs. 54,000/- paid by her or to give her possession of the house allotted to her. She even sent a notice. This was followed by a representation dated September 1, 1991 to the Chairman followed by another one sent by registered A.D. post in November, 1991. When she did not hear anything, she filed Civil Writ petition No. 200 of 1992 in this Court. A Division Bench of this court directed the respondents to decide the representations within 15 days of the receipt of the copy of the order. Vide order dated February 3, 1992, her representations were rejected, the allotment of Flat No. 291/1, Sector 45-A, was cancelled and the entire amount of Rs. 54,000/- paid by the petitioner was ordered to be forfeited under Regulation 6(2) of the Chandigarh Housing Board (Allotment, Management and sale of Tenements) Regulations, 1979. Aggrieved by this order, the petitioner has approached this Court through the present writ petition. The provisions of Regulation 6(2) and the order passed by the Chairman of the Board have been challenged as being wholly illegal and arbitrary.
3. The petitioner has also filed a supplementary affidavit averring inter alia that the impugned order was passed without giving any notice and any opportunity of being heard to her.
4. A written statement has been filed on behalf of the Board and its Chief Executive Officer. It is not necessary to notice the preliminary objections raised in the written statement as none were pressed at the hearing. On merits, it has been stated that the copy of the application produced by the petitioner is not a correct copy. It has been further averred that on account of the increase in the plinth area of the flats and escalation in the cost of the material, the tentative price of the flat was revised. The petitioner was advised to pay Rs. 10,000/- by November 10, 1989 as per the revised schedule of payment. She did not, however, pay this amount. The averment of the petitioner that she had inadvertently committed a mistake, has been denied. It has been stated that the petitioner had made a wrong statement in the application and even the declaration made by her at the end of the form was incorrect. According to the terms of the Scheme, she was not eligible for the allotment of a flat as her husband 'had already been allotted House No. 404, Sector 41-A, Chandigarh on hire-purchase basis by the Chandigarh Housing Board.' The averment of the petitioner that she did not deposit the requisite amount within the stipulated period as she was not interested in the allotment of the house, has been controverted and it has been stated that she had actually filed an application on September 5, 1990 requesting the Board to extend the time for the deposit of the amount. It has been further averred that the Board had issued a circular letter to the employers of all successful applicants of category III flats before the issue of allotment letters 'to ascertain if such allottees, as per the record available with the employers owned any house in Chandigarh/Mohali/Panchkula or had acquired any house anywhere in India through Govt./Semi-Govt./Municipal Committee/Corporation/Improvement Trust at concessional rate. Such a letter was also issued to the employer of the petitioner on 26.7.1990, a copy of which is annexed as R-3. It was at the pain of this letter that the petitioner ultimately on 27.12.1990 came out with the fact that House No. 404 in Sector 41-A, Chandigarh had already been allotted to her husband on 1.4.1985 and intended to surrender the said house on the pretext that the same was not sufficient for the growing family.' The averment of the petitioner regarding her having contacted Mr. Harnam Dass, the dealing superintendent, has been denied. It has been averred that he is no longer working in the Board and there is nothing on record to prove the averment of the flat on account of her husband having been already allotted a house and that the order of cancellation is legal and valid. Further more, in view of the provisions of Regulation 6(2), the money paid by her is also liable to be forfeited. The respondents have also stated that Regulation 6(2) has been incorporated in order to ensure that no person 'chooses to furnish false information in the application form for getting the allotment of a house fraudulently with a view to earn huge profits....'. It is on these premises that the respondents contest this writ petition. As for the averment in the supplementary affidavit that the impugned order regarding the forfeiture of the amount of Rs. 54,000/- had been passed without the grant of any opportunity whatsoever to the petitioner, it is conceded by Mr. B.M. Lal, learned counsel for the respondents that the statement was correct.
5. I have heard learned counsel for the parties.
6. Mr. S.D. Sharma, learned counsel for the petitioner has submitted that while submitting an application for the allotment of a flat, the petitioner had committed a bona fide mistake in not disclosing that a small house consisting of one room and a kitchen had been allotted to her husband. She had actually acknowledged that mistake while submitting her representation dated December 27, 1990, a copy of which has been produced with the writ petition as Annexure P-5. Learned counsel submits that in view of the facts of this case, the action of the respondents is wholly illegal and invalid. He has also challenged the vires of Regulation 6(2) as being beyond the provisions of the Act and ultra vires the Constitution, On the other hand, Mr. Lal, learned counsel for the respondents submitted that the action of the respondents was in conformity with the provisions of the Regulations which have been validly framed.
7. The following three questions arise for consideration:-
(i) Whether the action of the respondents is violative of the principles of natural justice?
(ii) Whether the action is arbitrary?
(iii) Is Regulation 6(2) arbitrary and ultra vires the Act and the Constitution of India?
8. It is the admitted position that the flat in dispute was allotted to the petitioner vide letter dated July 31, 1990. Thereafter, the petitioner had addressed a communication dated December 27, 1990 for permission to surrender the dwelling Unit No. 404 in Sector 41-A which had been allotted to her husband. It was also requested that the consideration money of Rs. 38,800/- deposited by the petitioner's husband in respect of Dwelling Unit No. 404 be adjusted towards the newly allotted No. 291/1, Sector 45-A. Even an affidavit was filed. Along with this, the petitioner deposited an amount of Rs. 50,000/-. This was followed by a notice through counsel and various representations. Ultimately, when nothing was heard in reply, the petitioner filed Civil Writ Petition No. 200 of 1992 in this Court. The Motion Bench gave directions to the respondent-Board for decision of the petitioner's representations. In pursuance to the directions of the Motion Bench, the Board passed the impugned order. It ordered the cancellation of the allotment made in favour of the petitioner as also the forfeiture of the total amount of Rs. 54,000/- paid by her. Was this action in conformity with the principles of natural justice?
9. It is indisputable that the impugned order determines the petitioner's right in respect of her property. It has civil consequences. It has not only belied the petitioner's hopes of getting a dwelling unit but has also resulted in the forfeiture of a substantial amount of Rs. 54,000/-. Such an order which has serious civil consequences could not have been passed without granting an opportunity to the petitioner. It is no doubt correct that the petitioner had made certain representations. It is also correct that she had acknowledged her mistake. This was done so as to get the possession of the flat or the refund of the money. The petitioner was never made aware of the fact that the Board wanted to cancel the allotment and forfeit the money. She was never given an opportunity to show cause. Consequently, the representations that were submitted by the petitioner cannot be a substitute for the opportunity that she deserved to be given by the Board. It was the duty of the Board to have informed her of its intention to take the impugned action. Had the petitioner been made aware of the proposed action and granted an opportunity to explain her position, she could have possibly furnished her explanation which could have satisfied the concerned authority. The rule in this behalf was clearly enunciated by their Lordships of the Supreme Court in S.L. Kapoor v. Jagmohan and Ors. AIR 1981 S.C. 136. Their Lordships were pleased to observe as under:-
'The requirements of natural justice are met only if opportunity to represent is given in view of proposed action. The demands of natural justice are not met even if the very person proceeded against has furnished the information on which the action is based, if it is furnished in a casual way or for some other purpose. The person proceeded against must know that he is being required to meet the allegations which might lead to a certain action being taken against him. If that is made known the requirements are met.'
10. In view of the above dictum of law, it was incumbent on the Board to have granted an opportunity to show cause to the petitioner. It failed to do so. It acted in violation of the elementary principles of natural justice. The impugned order, cannot, therefore, be sustained.
11. Is the action arbitrary?
12. The sequence of events as delineated above clearly shows that the petitioner was informed about the allotment of the flat vide letter dated July 31, 1990. She was also called upon to deposit an amount of Rs. 49, 875/-. The respondents aver that she had asked for extension of time to deposit the money. They have produced a copy of the letter which was received in the office of the Board on September 5, 1990. According to this letter, she had asked for extension of time upto September 30, 1990. Thereafter, the petitioner alongwith her husband wrote a letter dated December 27, 1990 (Annexure P-5) informing the Board that a dwelling Unit No. 404, Sector 41-A, was allotted to the petitioner's husband Vijay Kumar on April 1, 1985. They requested the Board to adjust the amount of Rs. 38,000/- deposited by the petitioner's husband towards the cost of House No. 291/1, Sector 45-A and undertook to surrender that house on being given the possession of the flat. The petitioner also filed an affidavit alongwith this application. She even deposited an amount of Rs. 50,000/- alongwith it. The petitioner claims that this was a bona fide acknowledgment of the mistake made by her. The respondents dispute this. It is averred that in fact vide letter dated July 26, 1990, a query had been made from the petitioner's employer if she owned any house etc. At Chandigarh/Mohali/Panchkula or any where else in the country. Even if it is assumed that such a query had been made, the fact remains that no information is shown to have been received from the petitioner's employer. The allotment of the flat was actually made to the petitioner. She had made a deposit of Rs. 50,000/-. This was accepted by the Board. Was it fair on the part of the Board to forfeit the entire amount of Rs. 54,000/- and cancel the allotment of the flat.
13. Mr. B.M. Lal, learned counsel for the respondent-Board submits that the action is in conformity with the provisions of Regulation (2). The said Regulation provides as under:-
'6(2) The applicant shall furnish an affidavit in the prescribed form with regard to his eligibility along with the application. In the event of the affidavit being found false at any stage, the Board shall be entitled to cancel the registration or the allotment of dwelling unit or flat as the case may be, and to forfeit the deposit received with the application and all the payments made to the Board thereafter.'
14. The above Regulation undoubtedly authorises the Board to forfeit the deposit received with the application and the payments made thereafter. However, it is only an enabling provision. It does not mean that in every case, the Board has to pass an order of cancellation of allotment and forfeiture of the entire money. Under the aforesaid Regulation, it is incumbent on the Board to examine the facts and circumstances of each case. It must consider the explanation that may be offered by the person concerned in respect of the default committed by him or her. It is on the examination of the facts of the case that the order has to be passed. It cannot be passed mechanically.
15. It appears from the record that the statement of the petitioner in her application was not accurate. However, she had acknowledged her mistake. This was done by her without any body else having come to know of the correct position. The plea taken on behalf of the respondent Board that she had done so on the pain of fraud being discovered in view of the fact that a communication dated July 26, 1990 had been addressed to the petitioner's employer does not appear to be tenable. After this query from the employer, the allotment had in fact been made. No communication for record has been produced to show that the Board had discovered the factum of the allotment of a dwelling unit to the petitioner's husband at any time before December 27, 1990, when she and her husband had sent a joint representation for permission to surrender the dwelling unit. The bona fides of the petitioner are further apparent from the fact that she had sent a Demand Draft for an amount of Rs. 50,000/- alongwith this application. This action of the petitioner in fact corroborates her averment that she had been advised to do so by the Superintendent, Mr. Harnam Dass. Otherwise, she could have simply made a request for permission to surrender the one room tenement which had been allotted to her husband. If the Board were to decline her request, she would not have been required to deposit Rs. 50,000/-. In that event, the Board would not have been in a position to forfeit at least this amount of Rs. 50,000/-.
16. Equally, one cannot also lose sight of the fact that the LIG and MIG Units are constructed and allotted to persons in the lower income group or the middle income group. In the present case, the petitioner and her husband are admittedly government servants. The petitioner is a Class HI employee. It was stated that even her husband was similarly situated. For persons in this income group, the amount of Rs. 50,000/- is very substantial. They cannot bear this heavy loss. Taking the totality of the circumstances into consideration, it appears that the action of the Board in forfeiting the entire amount of Rs. 54,000/- was unfair. It was arbitrary.
17. Accordingly, it is held that the action of the Board was not only violative of the principles of being arbitrary. In this situation, it does not appear to be necessary to consider the third contention raised on behalf of the petitioner regarding the validity of Regulation 6(2).
18. In the background of these findings, the question arises as to what relief should be given to the petitioner?
19. It is the admitted position that a dwelling unit had been allotted to her husband. She was consequently not eligible for the allotment of the flat. If she had disclosed this fact in her application, it would have been rejected at the outset. In that event, even the amount of Rs. 4000/- would have been refunded to her. She having failed to disclose this fact, she cannot be held entitled to the allotment of the flat. However. Keeping in view the fact that she had disclosed the relevant information after the allotment of the flat to her, the action of the Board in forfeiting the entire amount of Rs. 54,000/- cannot be sustained. Forfeiture of the amount of Rs. 4000/- deposited by her along with the application would meet the ends of justice. The remaining amount of Rs. 50,000/- which is deposited with the Board by her on December 27, 1990 deserves to be refunded to her. In fact, this was also the request made by the petitioner in her notice dated July 17, 1991, a copy of which has been produced as Annexure P-8 with the writ petition.
20. Accordingly, the writ petition is allowed to the extent that the impugned order is invalid in as much as it directs the forfeiture of the entire amount of Rs. 54,000/-. It is directed that the amount of Rs. 50,000/- be refunded to her along with interest at the rate of 12 percent per annum from the date of payment till its refund. The needful shall be done within two months from the date of the receipt of a copy of this order by the respondents. In the circumstances of the case, there will be no order as to costs.