Chairman and Managing Director, Sipcot, Madras Vs. Solvex Oil (Pvt.) Ltd. - Court Judgment

Excerpt:
property - allotment - sections 2 and 4 of tamil nadu public premises (eviction of unauthorised occupants) act, 1976 - whether only remedy for allotting authority was to claim penal interest and not entitled to take proceedings for cancellation of allotment - in case lease cum-sale agreement not executed by allottee and continued only as allottee and licensee and occupation only to allotment order - allotment clearly conditional upon satisfying condition and breach of condition of allotment order will enable authority to cancel allotment. - - over a period of 15 years as well as monthly maintenance charges at rs. the contention is that the allottee is entitled to know the ground on which the order of eviction is proposed to be made and, therefore, on failure to specify the grounds in the notice, the allotment could not be cancelled. the original proceedings which are produced before me clearly show that prior to the issue of the notice in form a, the allotting authority has intimated to the allottee by letter dt. by that letter the allottee was clearly intimated that if the allottee failed to remit rs. the notice clearly stated that the allottee was in unauthorised occupation. the original notice, however, clearly shows that a copy to the allottee at its madras office was also sent. the allotment having been made subject to the conditions laid down in the allotment order and one of the conditions being that the allottee will pay the monthly instalments as agreed, it must necessarily follow that if one of the essential conditions of allotment is not satisfied, then it would be open to the allotting authority to cancel the allotment. the allotment was clearly conditional upon satisfying the condition and a breach of a condition of the allotment order will undoubtedly enable the authority to cancel the allotment. the order of the learned district judge is set aside and it is held that the proceedings for eviction were perfectly legal and proper.order1. this revision petition is filed against the order of the principal district ~judge, north arcot at vellore allowing an appeal filed by the respondent against an order of eviction on the ground that the respondent is in unauthorised occupation of the premises. 2. by order dt. 6-8-1976, the respondent was allotted a flat belonging to the housing board at ranipat sipcot industrial complex . one of the conditions of the allotment order was condition no. 3 which required the allottee to pay 25 per cent of the tentative cost and the remaining 75 per cent was to be paid in monthly instalments of rs. 284-80 p. over a period of 15 years as well as monthly maintenance charges at rs. 20/per month per flat. the condition is as follows :'............you have paid the 25% tentative cost of the flat. the remaining 75% of the tentative cost will be paid in monthly instalments of rs. 284.80 over a period of 15 years with interest at 12% per annum. monthly maintenance charges at rs. 201- per month per flat should be paid to sipcot.'the order of allotment also provided :'............ the allottee should execute at his own cost the l.c.s. agreement in the prescribed form which will be sent separately.'3. by letter dated 28-1-1982, the managing director, sipcot, madras-6 informed the allottee that a sum of rs. 8,46910 p. was due from the allottee in addition to the payment of rs. 629.60 p. towards instalments for the months of nov. and dec., 1981 for the flat. the amount due included water charges and maintenance charges. the allottee was required to remit a sum of rs. 9,098-70 p. (rs. 8,469-10 plus rs. 62960 p.) within 15 days from the date of receipt of the communication.4. on 10-3-1982, the managing director of sipcot informed the allottee that since the allottee did not appear to be earnest in clearing the dues, they would order cancellation of the allotment of the flat no. 'o'-6 to the allottee at their industrial complex, ranipet. the allottee was requested to hand over possession of the flat to the authorised officer within seven days from the date of receipt of the communication.5. the estate officer then issued a notice to the allottee to show cuse as to why an order of eviction should not be made under was allotted a flat belonging to the using. 4(l) of the tamil nadu public premises, board at ranipat sipcot industrial (eviction of unauthorised occupants) act, complex. one of the conditions of the 1975 as the allottee was in unauthorised occupation. the rafter, the allottee was served with a notice on 16-5-1982 in form 'b' stating that the allottee had been already served with a notice under s. 4 of the act, that an enquiry will be held at the administrative office on 28-5-1982 and that the allottee should attend it at 11 a.m. the allottee had received the notice in form 'a' to which he replied on 3-5-1982 stating that any order passed under the act would be illegal and that the proceedings for eviction should be dropped. the allottee by letter dt. 20-5-1982 also replied to the notice dt. 10-51982 raising the same contention that the eviction proceedings would be illegal. the' estate officer then passed an order on 19-61982 that the allottee had committed willful default and that the occupation of the premises had thus become unauthorised as per the provisions of the act. the order requires the allottee to vacate the premises on or before 30-6-1982. this order was appealed against by the allottee.5(a). the appeal was heard by the learned district judge. the district judge took the view that firstly the allottee was not served on its madras address and secondly, the notice merely made a general and vague mention that the occupation of the flat by the allottee had become unauthorised without disclosing how the occupation had become unauthorised. the district judge referred to cl. 5 of the allotment order under which, according to him, only penal interest at the rate of 18 per cent had to be paid for belated payment. he found that the default in the payment of instalments will not be a ground for eviction at all because the default in payment does not make the occupation unauthorised. the appeal was, therefore, allowed.6. in this revision petition, the contention raised on behalf of sipcot is that the notice given to the allottee is in the form prescribed under the rules and the statue and the learned district judge, was, therefore, in error when he found that the notice was vague. it is also contended that since in the instant case the allottee has not executed any registered agreement, the allotment continued to be only under the order of allotment and if a condition of that order of allotment is breached, the occupation will become unauthorised. the learned counsel for the respondent has, however, argued that' the allotment does not provide for resumption of the flat on the ground that the instalments have not been paid and the only liability of the allottee in case the allottee is in arrears is that the allottee is required to pay only penal interest at 18 per cent. reference is made to s. 4(2) of the act and it is contended that cl. (a) of s. 4(2) required that the notice had to specify the grounds on which the order of eviction is proposed to be made. the contention is that the allottee is entitled to know the ground on which the order of eviction is proposed to be made and, therefore, on failure to specify the grounds in the notice, the allotment could not be cancelled. it is necessary at the outset to refer to the definition of 'unauthorised occupation' in s. 2(g) of the act. that clause reads as follows :'.............unauthorised occupation' in retition to any public premises, means the occupation by any person of the public premies without authority for such occultation and includes the continuance in occupation by any person of the public premises after the authority (whether by way. of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever.'7. the definition of 'unauthorised occupation' in so far as the present case is concerned, will indicate that if for any reason the authority under which the allottee occupied the premises is determined, then after such determination, the occupation will become unauthorised.8. form a of the rules prescribes the form in which the show cause notice is to be given and the estate officer has issued a notice in form a calling upon the allottee to show cause why an order of eviction should not be made in respect of the premises which were in unauthorised occupation of the tenant. the original proceedings which are produced before me clearly show that prior to the issue of the notice in form a, the allotting authority has intimated to the allottee by letter dt. 5-11-1981 that the allottee was in arrears of instalments from april to oct., 1981, penal interest, water charges and maintenance charges. by that letter the allottee was clearly intimated that if the allottee failed to remit rs. 2,562-05 p. on or before 20-11-1981, it would be construed that the allottee was not interested and action would be taken to cancel the allotment made to the allottee and possession would be resumed. the second letter dt. 27-12-1981 was sent requesting for prompt payment. then once again a letter dt. 28-1-1982 was sent by which time the amount due had increased to rs. 9,098-70 p. requesting for fully payment within fifteen days. it was only after the allottee persisted in non-payment of the dues that an order canceling the allotment was made on 10-3-1982. by a notice dated 10-3-1982 the allottee was informed that 'we hereby order canceling the allotment' and the allottee was called upon to hand over possession within seven days, failing which action will be taken to evict it under the provisions of the tamil nadir public premises (eviction of unauthorised (occupants) act.8(a). it was only on 27-3-1982 that a reply was given to the letter dt. 7-3-1982 requesting for the action to be dropped on the ground that the action would be illegal. it was thereafter that the notice in form a was issued. the notice clearly stated that the allottee was in unauthorised occupation. this notice has to be read in the light of the earlier letters sent to the allottee that there were large arrears and if the arrears are not paid, the -allotment would be cancelled. the allottee had, therefore, full knowledge of the circumstances under which the allotment was cancelled and also of the fact that the allotment has been cancelled. there is, therefore, no substance in the contention that the allottee did not have notice as to the ground on which it was being held as being in unauthorised occupation.9. it appears that a grievance was made before the learned judge that though the earlier correspondence was addressed to the madras office of the allottee, the notice itself was never sent to the madras office. the contention has been accepted, but it appears that the learned judge did not care to look into the original records. the premises having been allotted to the allottee and notice being in respect of such premises, it was but proper that a notice should-have been sent to the address of the allottee in the allotted premises. the original notice, however, clearly shows that a copy to the allottee at its madras office was also sent. indeed, the letter dt. 28-5-1982 by the allottee expressly refers to the notice dt. 10-5-1982. by this letter, the allottee asked for dropping of the proceedings. the learned district judge was, therefore, not right when he found fault with. the eviction proceedings that the notice has not been sent to the madras office.10. the only question which then remains for consideration is whether the only remedy of the allotting authority was to claim penal interest and that it was not entitled to take proceedings for cancellation of the allotment. it is true that in this case, the lease-cum-sale agreement has not been executed by the allottee. the draft lease cum-sale agreement expressly provided in cl.16 thereof that 'in case the lessee purchaser defaults in paying any of the amounts herein before provided on the date fixed for payment, the lesser-vendor may determine the lease and on such determination, the less cum-purchaser shall surrender the flat.'11. it must be remembered that the allottee not having executed the lease-cum sale agreement, his status continued to be only as an allottee and a licensee. not having executed the agreement, he cannot be described as a lessee-purchaser and his occupation was, therefore, referable only to the allotment order. the allotment having been made subject to the conditions laid down in the allotment order and one of the conditions being that the allottee will pay the monthly instalments as agreed, it must necessarily follow that if one of the essential conditions of allotment is not satisfied, then it would be open to the allotting authority to cancel the allotment. an agreement cannot be countenanced that where by way of a facility to an industrialist or to a factory owner a site or premises had been allotted subject to the express condition that required payments to be made, the allotment order should be so construed as to permit the allottee to be in default without any remedy whatsoever, to the allotting authority to cancel the allotment. the allotment was clearly conditional upon satisfying the condition and a breach of a condition of the allotment order will undoubtedly enable the authority to cancel the allotment. if this allotment has been cancelled, then there is no doubt that the occupation of the allottee will become unauthorised, thus attracting the provisions of the act. undoubtedly, cl. 5 provides for penal interest, but that right to recover penal interest is independent of the right to cancel the allotment and merely because cl. 5 provided for penal interest, it cannot be held that the allotment cannot be cancelled and proceedings for eviction cannot be taken. in my view. therefore, the learned district judge was in error in holding that there was an infirmity in the proceedings for eviction. the order of the learned district judge is, therefore, liable to be set aside.12. this revision petition is allowed. the order of the learned district judge is set aside and it is held that the proceedings for eviction were perfectly legal and proper. respondent to pay the costs of this revision petition-costs rs. 250/-.13. petition allowed.

Judgment:
ORDER

1. This revision petition is filed against the order of the Principal District ~Judge, North Arcot at Vellore allowing an appeal filed by the respondent against an order of eviction on the ground that the respondent is in unauthorised occupation of the premises.

2. By order dt. 6-8-1976, the respondent was allotted a flat belonging to the Housing Board at Ranipat SIPCOT Industrial Complex . One of the conditions of the allotment order was condition No. 3 which required the allottee to pay 25 per cent of the tentative cost and the remaining 75 per cent was to be paid in monthly instalments of Rs. 284-80 p. over a period of 15 years as well as monthly maintenance charges at Rs. 20/per month per flat. The condition is as follows :

'............You have paid the 25% tentative cost of the flat. The remaining 75% of the tentative cost will be paid in monthly instalments of Rs. 284.80 over a period of 15 years with interest at 12% per annum. Monthly maintenance charges at Rs. 201- per month per flat should be paid to SIPCOT.'

The order of allotment also provided :

'............ The allottee should execute at his own cost the L.C.S. agreement in the prescribed form which will be sent separately.'

3. By letter dated 28-1-1982, the Managing Director, SIPCOT, Madras-6 informed the allottee that a sum of Rs. 8,46910 p. was due from the allottee in addition to the payment of Rs. 629.60 p. towards instalments for the months of Nov. and Dec., 1981 for the flat. The amount due included water charges and maintenance charges. The allottee was required to remit a sum of Rs. 9,098-70 p. (Rs. 8,469-10 plus Rs. 62960 p.) within 15 days from the date of receipt of the communication.

4. On 10-3-1982, the Managing Director of SIPCOT informed the allottee that since the allottee did not appear to be earnest in clearing the dues, they would order cancellation of the allotment of the flat No. 'O'-6 to the allottee at their Industrial Complex, Ranipet. The allottee was requested to hand over possession of the flat to the authorised officer within seven days from the date of receipt of the communication.

5. The Estate Officer then issued a notice to the allottee to show cuse as to why an order of eviction should not be made under was allotted a flat belonging to the using. 4(l) of the Tamil Nadu Public Premises, Board at Ranipat SIPCOT Industrial (Eviction of Unauthorised Occupants) Act, Complex. One of the conditions of the 1975 as the allottee was in unauthorised occupation. The rafter, the allottee was served with a notice on 16-5-1982 in Form 'B' stating that the allottee had been already served with a notice under S. 4 of the Act, that an enquiry will be held at the Administrative Office on 28-5-1982 and that the allottee should attend it at 11 a.m. The allottee had received the notice in Form 'A' to which he replied on 3-5-1982 stating that any order passed under the Act would be illegal and that the proceedings for eviction should be dropped. The allottee by letter dt. 20-5-1982 also replied to the notice dt. 10-51982 raising the same contention that the eviction proceedings would be illegal. The' Estate Officer then passed an order on 19-61982 that the allottee had committed willful default and that the occupation of the premises had thus become unauthorised as per the provisions of the Act. The order requires the allottee to vacate the premises on or before 30-6-1982. This order was appealed against by the allottee.

5(a). The appeal was heard by the learned District Judge. The District Judge took the view that firstly the allottee was not served on its Madras address and secondly, the notice merely made a general and vague mention that the occupation of the flat by the allottee had become unauthorised without disclosing how the occupation had become unauthorised. The District Judge referred to Cl. 5 of the allotment order under which, according to him, only penal interest at the rate of 18 per cent had to be paid for belated payment. He found that the default in the payment of instalments will not be a ground for eviction at all because the default in payment does not make the occupation unauthorised. The appeal was, therefore, allowed.

6. In this revision petition, the contention raised on behalf of SIPCOT is that the notice given to the allottee is in the form prescribed under the Rules and the statue and the learned District Judge, was, therefore, in error when he found that the notice was vague. It is also contended that since in the instant case the allottee has not executed any registered agreement, the allotment continued to be only under the order of allotment and if a condition of that order of allotment is breached, the occupation will become unauthorised. The learned counsel for the respondent has, however, argued that' the allotment does not provide for resumption of the flat on the ground that the instalments have not been paid and the only liability of the allottee in case the allottee is in arrears is that the allottee is required to pay only penal interest at 18 per cent. Reference is made to S. 4(2) of the Act and it is contended that Cl. (a) of S. 4(2) required that the notice had to specify the grounds on which the order of eviction is proposed to be made. The contention is that the allottee is entitled to know the ground on which the order of eviction is proposed to be made and, therefore, on failure to specify the grounds in the notice, the allotment could not be cancelled. It is necessary at the outset to refer to the definition of 'unauthorised occupation' in S. 2(g) of the Act. That clause reads as follows :

'.............unauthorised occupation' in retition to any public premises, means the occupation by any person of the public premies without authority for such occultation and includes the continuance in occupation by any person of the public premises after the authority (whether by way. of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever.'

7. The definition of 'unauthorised occupation' in so far as the present case is concerned, will indicate that if for any reason the authority under which the allottee occupied the premises is determined, then after such determination, the occupation will become unauthorised.

8. Form A of the Rules prescribes the form in which the show cause notice is to be given and the Estate Officer has issued a notice in Form A calling upon the allottee to show cause why an order of eviction should not be made in respect of the premises which were in unauthorised occupation of the tenant. The original proceedings which are produced before me clearly show that prior to the issue of the notice in Form A, the allotting authority has intimated to the allottee by letter dt. 5-11-1981 that the allottee was in arrears of instalments from April to Oct., 1981, penal interest, water charges and maintenance charges. By that letter the allottee was clearly intimated that if the allottee failed to remit Rs. 2,562-05 p. on or before 20-11-1981, it would be construed that the allottee was not interested and action would be taken to cancel the allotment made to the allottee and possession would be resumed. The second letter dt. 27-12-1981 was sent requesting for prompt payment. Then once again a letter dt. 28-1-1982 was sent by which time the amount due had increased to Rs. 9,098-70 p. requesting for fully payment within fifteen days. It was only after the allottee persisted in non-payment of the dues that an order canceling the allotment was made on 10-3-1982. By a notice dated 10-3-1982 the allottee was informed that 'we hereby order canceling the allotment' and the allottee was called upon to hand over possession within seven days, failing which action will be taken to evict it under the provisions of the Tamil Nadir Public Premises (Eviction of Unauthorised (Occupants) Act.

8(a). It was only on 27-3-1982 that a reply was given to the letter dt. 7-3-1982 requesting for the action to be dropped on the ground that the action would be illegal. It was thereafter that the notice in Form A was issued. The notice clearly stated that the allottee was in unauthorised occupation. This notice has to be read in the light of the earlier letters sent to the allottee that there were large arrears and if the arrears are not paid, the -allotment would be cancelled. The allottee had, therefore, full knowledge of the circumstances under which the allotment was cancelled and also of the fact that the allotment has been cancelled. There is, therefore, no substance in the contention that the allottee did not have notice as to the ground on which it was being held as being in unauthorised occupation.

9. It appears that a grievance was made before the learned Judge that though the earlier correspondence was addressed to the Madras Office of the allottee, the notice itself was never sent to the Madras Office. The contention has been accepted, but it appears that the learned Judge did not care to look into the original records. The premises having been allotted to the allottee and notice being in respect of such premises, it was but proper that a notice should-have been sent to the address of the allottee in the allotted premises. The original notice, however, clearly shows that a copy to the allottee at its Madras Office was also sent. Indeed, the letter dt. 28-5-1982 by the allottee expressly refers to the notice dt. 10-5-1982. By this letter, the allottee asked for dropping of the proceedings. The learned District Judge was, therefore, not right when he found fault with. the eviction proceedings that the notice has not been sent to the Madras office.

10. The only question which then remains for consideration is whether the only remedy of the allotting authority was to claim penal interest and that it was not entitled to take proceedings for cancellation of the allotment. It is true that in this case, the lease-cum-sale agreement has not been executed by the allottee. The draft lease cum-sale agreement expressly provided in cl.16 thereof that 'in case the lessee purchaser defaults in paying any of the amounts herein before provided on the date fixed for payment, the lesser-vendor may determine the lease and on such determination, the less cum-purchaser shall surrender the flat.'

11. It must be remembered that the allottee not having executed the lease-cum sale agreement, his status continued to be only as an allottee and a licensee. Not having executed the agreement, he cannot be described as a lessee-purchaser and his occupation was, therefore, referable only to the allotment order. The allotment having been made subject to the conditions laid down in the allotment order and one of the conditions being that the allottee will pay the monthly instalments as agreed, it must necessarily follow that if one of the essential conditions of allotment is not satisfied, then it would be open to the allotting authority to cancel the allotment. An agreement cannot be countenanced that where by way of a facility to an industrialist or to a factory owner a site or premises had been allotted subject to the express condition that required payments to be made, the allotment order should be so construed as to permit the allottee to be in default without any remedy whatsoever, to the allotting authority to cancel the allotment. The allotment was clearly conditional upon satisfying the condition and a breach of a condition of the allotment order will undoubtedly enable the authority to cancel the allotment. If this allotment has been cancelled, then there is no doubt that the occupation of the allottee will become unauthorised, thus attracting the provisions of the Act. Undoubtedly, cl. 5 provides for penal interest, but that right to recover penal interest is independent of the right to cancel the allotment and merely because cl. 5 provided for penal interest, it cannot be held that the allotment cannot be cancelled and proceedings for eviction cannot be taken. In my view. therefore, the learned District Judge was in error in holding that there was an infirmity in the proceedings for eviction. The order of the learned District Judge is, therefore, liable to be set aside.

12. This revision petition is allowed. The order of the learned District Judge is set aside and it is held that the proceedings for eviction were perfectly legal and proper. Respondent to pay the costs of this revision petition-Costs Rs. 250/-.

13. Petition allowed.