Holding

The power of resumption under Section 8‑A is constitutionally valid but must be exercised as a last resort, taking into account the factual circumstances, proportionality, and the absence of wilful default, and the appellant must pay the remaining dues to regularise the lease.

Summary

The appellant, M/s. Teri Oat Estates, purchased a lease‑hold site in Chandigarh and constructed a six‑storey building but failed to pay the instalments and ground rent on time, leading the Estate Officer to invoke Section 8‑A of the Capital of Punjab (Development and Regulation) Act, 1952 and cancel the lease with forfeiture. The appellant challenged the resumption, the levy of penal interest (12%/15%/24%) and the High Court's order allowing re‑purchase under Rule 21, arguing that the power of resumption should be a last resort and that the default was not wilful. The Supreme Court examined whether the exercise of the resumption power complied with Article 14 and the doctrine of proportionality, emphasizing that each case must be assessed on its factual matrix. It held that while the statutory power is valid, it cannot be invoked where the default is not intentional and the appellant has made substantial payments. Consequently, the Court directed the appellant to pay the remaining Rs. 15,00,000 within ten weeks and dismissed the appeals without costs.

Issues considered

The validity of invoking Section 8‑A for resumption and forfeiture when the default is not wilful.
Whether the levy of penal interest at rates above 12% is permissible under the lease‑hold rules.
Whether the power of resumption must be exercised as a last resort in compliance with Article 14.
The applicability of the doctrine of proportionality to limit the exercise of resumption power.
Whether the High Court's order granting re‑purchase under Rule 21 should be set aside.

Legislation cited

Capital of Punjab (Development and Regulation) Act, 1952s. 8, s. 8-A
Chandigarh Lease Hold of Sites and Buildings Rules, 1973s. Rule 12(3), s. Rule 21
Public Premises (Eviction of Unauthorized Occupants) Act, 1971

Subjects

resumption of landforfeitureArticle 14proportionalitylease‑holdpenal interestadministrative lawCapital of Punjab ActChandigarh lease rules

Judgment

M/S. TERI OAT ESTATES (P) LTD. A
v.
U.T. CHANDIGARH AND ORS.

DECEMBER 19, 2003

(V.N. KHARE, CJ. AND S.B. SINHA, J.] B
Capital of Punjab (Development and Regulation) Act, 1952-Section
8~A7Chandigarh Lease Hold of Sites and Building Rules, 1973-Power
ofresumption of/and/building and forfeiture ofmoney deposited on default
in making due payment-Application of-Held: Power of resumption and C
forfeiture is to be taken recourse to as a last resort-Its application
depends upon the factual situation in each case-No hard and fast rule
can be laid down-It should not be violative of Article 14-In case of
extreme hardship faced by the party, power of resumption is not resorted
to and in such a situation doctrine ofproportionality is applied-However, D
if dishonest intention of the allottee in not making due payment is
established, recourse to section 8-A is justified-On facts allottee de-
faulted/delayed in making payment of instalments, interest and ground
rent, but default not wilful-However, his conduct in not making an
endeavour to pay within reasonable time deprecated as such directed to
pay Rs. 15 lakhs-Constitution of India, 1950-Article 14-Administrative E
Law.

Constitution of India, 1950-Article 142-Extra ordinary jurisdic-
tion-When there is failure to establish a legal right, Court cannot pass
an order on the ground of sympathy or sentiment. F
Appellant purchased land on lease-hold basis in auction. Purchase
amount was to be paid in lump-sum and/or in four yearly instalments.
25% of the allotment price was to be deposited within 30 days of
auction and upon complinnce Estate Officer issued allotment letter in
favour of the appellants. In terms of the letter 7% interest was leviable G
on the balance 75% premium in three equal instalments together with
ground rent. Clause 8-A of the allotment letter stipulated 12% levy of
interest per annum, penalty and power of resumption on delayed
payment of instalments upon grant of opportunity of being heard. In
the event of non-payment 12% interest could be enhanced to 15% ard H
1235
1236 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

A,. then 24%. Appellant entered into possession of the property and
constructed six storied hu!lding including basement floor. Appellant
did not pay the first inslalment. However, it is stated that the appellant
deposited Rs. 6,00,000 out of the total slim of Rs. 8,91,960 towards the
amount due as also ground rent from time to time. Meanwhile, Estate
B Office issued notice to the appellant that it did not deposit the second
instalment. After a lapse of three years, Estate Officer informed the
appellant that Rs. 5,31,156 was due. Thereafter, pr()ceeding was
initiated for cancellation of lease by resu~ption of land an'd. lease was
cancelled as a last resort and the money paid by the transferee was
C forfeited. Appellant filed an appeal. Chief Administrator set aside the
order subject to part payment by the appellant by 7.3.1995 and also
other conditions of payment. However, as per the appellant the order
was communicated after 7.3.1995 and as such no payment could be
made. Aggrieved appellant filed a revision application. Estate Officer
was directed to prepare account statement of the appellant indicating
D the balance amount to be paid by him. Appellant contended that in the
statement of accounts prepared in place of 12% interest 15% interest
for certain period and 24% for the rest had been levied. Appellant
filed writ petition challenging levy of penal interest. Meanwhile,
proceeding under the Public Premises (Eviction of Unauthorized •1
E Occupants) Act, 1971 was init_iated. Estate Officer directed the appel-
lant and all other persons in occupation to vacate the premises.
Appellant filed an appeal. which· was dismissed. Thereafter., appellant
filed amendment .application to the writ petition questioning the
eviction order passed under: the 1971 Act. During pendency of the writ
F petition, appellant deposited Rs. 25,00,000 iri terms whereby allegedly
the entire principal amount due towards. instalments and ground rent
was cleared. Thereafter, appellant deposited further. surp and accord-
ing to appellant all outstanding amounts with interest @ .15% per
annum would have been cleared. Writ petitipn wa~ dismisse~, however,
liberty was given to the appellant to purchase the property ~nder Rule
G 21A of the Chandigarh Leash Hold of Sites andBuilding~ Rules, 1973.
Appellant filed review applicatio~ which w.a.s also· dismissed. Hence-the
present appeals.

This Court while issuing notice on SLP direct~d an adcinterim staf .......,
H of resumpti.on of the property; and that the Estate Office and Chief
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH 1237

Administrator would assist in the preparation of accounts and accept A
payment subject to the result of these appeals. Pursuant to this,
appellant made all the payments as directed.

Appellant contended that having regard to the fact that all
payments had been made, pursuant to the order of this Court, B
judgment of the High Court must be set aside; that the issue must be
considered having regard to the facts of the case; that the resumption
of land taken recourse to as a last resort is valid; and that a humane
approach is required to be taken in such matters.

Respondent contended that having accepted the payments from C
the appellant under orders of the Court which being subject to the
result of these appeals, matter may be heard on merits; that the
appellant except for making the initial payment of 25% failed to make
any further payment despite several opportunities granted; that the
appellant also failed to comply with the order passed by appellate and D
revisional authorities in terms whereof also while setting aside the
order of re$umption, opportunities had been granted to it to pay the
amounts in question, directing that in the event of its failure to do so,
the order of resumption will revive; that the power of resumption of
land is valid and the authorities having acted strictly in terms thereof, E
this Court must not show any sympathy; and that an equitable order
has been passed by High Court that the appellant can re-purchase the
land in terms of Rule 21 of the Rules, the same may not be interfered
with.

Disposing of the appeals, the Court F

HELD : 1.1. In terms of the provisions of the Capital of Punjab
(Development and Regulation) Act, 1952 the Estate Officer is entitled
to: (1) resumption of land, (2) resumption of building and (3) forfeiture
of the entire amount paid or deposited. One of the questions which must G
always be posed by the Estate Office, while initiating a proceeding under
Section SA of the Act is as to whether the drastic power of resumption
and forfeiture has been taken recourse to as a last resort. Whether this
extreme power has rightly been applied or not will depend upon the
factual matrix obtaining in each case. Each case may, therefore, have H
1238 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A to be viewed ~eparately and no hard and fast rule can be laid down
therefor. In the inst:rnt case the action of the Estate Officer and other
statutory authorities having regard to the factual matrix obtaining in
each case must be viewed from the angle as to whether the same attracts
the wrath of Article 14 of the Constitution or not; Furthermore, it cannot
B be laid down that the statutory right conferring the right of resumption
should never be resorted. There· cannot be any doubt that if the intention
of the allottee is dishonest or with an ill motive and if the allottee does
not make any payment in terms of the allotment or the statute with a
dishonest view or any dishonest motive, then Section SA can be resorted
C to. (1256-G-H; 1250-D-E;1251-A-B; 1260-G-H)

Babu Singh Bains & Ors. v. Union of India & Ors., (1996) 6 SCC
565; Ram Puri v. Chief Commissioner, Chandigarh, AIR (1982) Punjab
& Haryana 301; Jasbir Kaur v. UT. Chandigarh, (1999) 9 SCC 22;
Roochira Ceramics v. HUDA & Ors., (2002] 9 SCC 599; Kashmir Chand
D v. State of Hmyana, (1996) 9 sec 470; Surinder Kaur v. Government of
Punjab & Ors., (1998) 9 SCC 592; S.MS. Sandhu Builders v. Chandigarh
Administration, [2003] 3 SCC 125; Batra Finance v. Chandigarh Adf1!in-
istration, Civil Appeal No. 459 of (1998) SC; Mis. Darkadas Marfatia and
Sons v. Board of Trustees of the Port of Bombay, AIR (1989) SC 1642;
E A1/s. Sandhu Builders (P) Ltd. v. Union Territory, Chandigarh, CWP No.
3030 of (1994) SC; Jasbir Kaur v. Union Territory of Chandigarh & Ors.,
(1991) 1 P.L.J. 417; Devinder Singh Pannu &. Ors. v. The Chandigarh
Admn. & Ors., Civil Appeal No. 1092 of 1998; Patiala Inds Investment
Co. Pvt. Ltd. v. Union of India, (2003) 3 SCC 127 and Devider Lal Gupta
F v. UT. of Chandigarh & Anr., decided by Supreme Court on 15.2.2000,
referred to.

1.2. ~aving regard to the extremeJiardsb!p which m-afbe faced
by the parties, the default in the payment of purchase amount is not
absolute wilful or a dishonest one but occasioned due to situation
G beyond one's control, the statutory right of the Estate Offic~r in :
resuming the land may not be appropriate." Thus, the situation,
warrants application of the doctrine of proportionality. By proportion-
ality, it is meant that the question whether while regulating exercise
of fundamental rights, the appropriate or least restrictive choice of
H measure has been made by the legislature or the_ admhdstrator so as
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH 1239

to achieve the object of the legislation or the purpose of the adminis- A
trative order, as the case may be. Under the Principle, the court will
see that the legislature and the administrative authority maintain a
proper balance between the adverse effects which the legislation or the
administrative order may have on the rights, liberties or interests of
persons keeping in mind the purpose which they were intended to B
serve. (1256-F-G; 1257-A-Dl

Om Kumar v. Union of India, [2001) 2 SCC 386; State of Madras
v. VG. Row, AIR (1952) SC 186; Tata Cellular v. Union of India, (1994)
6 SCC 651 and E.P. Royappa v. State of Tamil Nadu, (1974) 4 SCC 3
~~~ c
R. v. Secretary of State of the Home Department, ex Brind (1991) I
Appeal Cases 696; Council of Civil Services Union v. Minister of Civil
Service, (1985) 1 Appeal Cases 374; Endore v. Secretary of State for the
Home Department, [2003) 3 All ER 1265 and R. v. Lewisham Londan D
Borough Council, [2003) 3 All ER 1277, referred to.

1.3. Sympathy or sentiment by itself cannot be a ground for
passing an order in relation whereto the appellants miserably fail to
establish a legal right. Despite an extra-ordinary constitutional juris-
diction contained in Article 142 of the Constitution oflndia, this Court E
ordinarily would not pass an order in contravt:ntion of a statutory
provision. f.1255-B-C]

Ashoke Saha v. State of West Bengal, (1999) 2 CLT I, approved.
F
Sairindhri Ddolui v. State of West Bangal, (2002) 1 SLR 803;
C.B.S.E. and Anr. v. P. Sunil Kumar and Ors., [1998) 5 SCC 377, referred
to.

Latham v. Richard Johnson & Nephew Ltd., (1911-13) All ER
reprint 117, referred to. G
1.4. If the competing interest can be balanced, the order of
resumption should not be passed. In the instant case, the land in
question for all intent and purport had been transferred in favour of
the appellants. They were merely to pay the balance amount of 75% H
1240 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
-r .
A of the consideration amount in instalments. Appellants showed their
bona fide in making their payments before the High Court. They also
showed their willingness to m:.ke the payments on the difference of
amount of interest. Pursuant to the order of this Court the appellant
not only paid the entire amount due but also paid ground rent upto
1998-19'99 and further paid 10% penalty of the forfeited amount of
B
entire consideration money amounting to Rs. 2,87,000. [1260-D-E]

1.5. The order of the Estate Officer does not say that the power
of resumption and forfeiture has been taken recourse to as a last resort.
No reason has also been assigned in the said order. However, the
c conduct of the appellants in not making an endeavour to pay the
instalments within a reasonable period is deprecated. They did not pay
the entire amount of the first instalment within the stipulated period;
only a part payment was made in the year 1990 and 1992 by that time
even the second instalment became due. They did not make any
D payment before revisional authority despite the order passed by the
appellate authority. Therefore, appellants directed to deposit a further
sum of Rs. 15,00,000 with the Estate Officer, within ten weeks which
would meet the ends of justice. [1261-A-C]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 49of1999.
E
From the Judgment and Order dated l 9.11.96 of the Punjab and
Haryana High Court in W.A. No. 17188 of 1995.

WITH
F Civil Appeal Nos. 50, 51, 52 and 53 of 1999. ..-~

J.K. Sibal, Manoj Swarup, Vivek Narayan and Debasis Misra (NP)
for the Appellant.

Ms. Kamini Jaiswal for the Respondents.
G
The Judgment of the Court was delivered by

S.B. SINHA, J.: These appeals involving common questions of law
"r
and fact were taken upto for hearing together and are being disposed of
H by this common judgment. The short question which arises for considera-
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1241

tion in these appeals centres round the power of resumption of land/ A
building of the first respondent in favour of the appellants under the Capital
of Punjab (Development and regulation) Act, 1952 read with the Chandigarh
Lease Hold of Sites and Buildings Rules, 1973 and the Public Premises
(Eviction of Unauthorized Occupants) Act, 1971.
B
BACKGROUND FACT :

The factual matrix of the matter is beir.g noticed from Ci vi 1 Appeal
No. 49 of 1999. The site bearing No. SCO 126-127, Sector 34-A,
Chandigarh was purchased on lease-hold basis by the appellant in open
.auction held on 13.3.1988. The purchase amount was to be paid in lump C
sum and/or in four yearly instalments. In the event of the purchaser opting
for payment in instalments, 7% interest was payable. It is not in dispute
that 25% of the allotment price was required to be deposited within 30 days
of auction and upon compliance of the said term, the Estate Officer,
Chandigarh, confirmed the lease of the said site in favour of the purchasers D
vide allotment letter dated 26.4.1988. 7% interest, as, referred to hereinbefore,
was leviable on the balance 75% premium as contained in the letter of
Allotment in three equal instalments together with ground rent. Clause
8-A of the said letter of allotment. however, stipulated l'!vy of interest
@ 12% per annum, penalty and power of resumption in the event of E
delayed payment of instalments upon grant of an opportunity of being
heard in the following terms :

"8-A. After considering the cause, if any, 'shown by the lessee in
pursuance of the aforesaid notice, the Estate Officer may either F
allow payment of instalment/rent with penalty which may extend
to I 00% of the amount due and interest @ 12% P.A., for the
delayed period, order cancellation of lease and forfeit the whole/
part of the amount already paid."

The appellant herein upon entering into possession of the purchased G
site, constructed a six storied building including the basement floor. The
appellant contended that despite the construction of the said building it
could not immediately be let out to the tenants as the area was under-
developed and as parking and approach road had not been provided and
fu1thermore several 'jhuggis' existed near the site. H
1242 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A The second instalment which was due in 1989 had not been paid by
the appellant. The appellant, however, is stated to have deposited a sum
of Rs. 6,00,000 out of the total sum of Rs. 8,91 ,960 towards the amount
due as also ground rent by paying the amounts of Rs. 2,50,000 on 5.4.1990,
Rs. I ,50,000 on 2.5.1990, Rs. 1,50,000 on 25.6.1990 and Rs. 50,000 on
B 13 .1.1992. Before depositing the aforementioned amounts, however, the
appellant received a notice from the Estate Officer to the effect that he did
r L deposit the first instalment. After a lapse of about three years i.e. on
. r about 24.6.1992, the Estate Officer by his letter of the said date informed
the appellant that a sum of Rs. 5,31,156 was due. According to the
C appellant, however, while issuing the said notice, the Estate Office failed
to take into consid:!ration that in the meanwhile a sum of Rs. 6,00,000 was
deposited. A proceeding for cancellation of the lease by way of resumption
of the land and building thereafter, was initiated. It is not clear as to whether
the appellant in the said proceeding took part or filed any reply in response
to show cause notice. The Estate Officer in his order dated 13.8.1992
D although noticed that. the appellant had been granted an opportunity of
being heard in person but failed to notice as to whether on those days any
of them had appeared and/or made his submission or not. He, however,
recorded :

"Inspite of various opportunities the lessee(s) has failed to
E
cleat the outstanding dues. It appears that the lessee(s) is/are not
in a position to clear that Govt. dues. I hold the default wilful.

THEREFORE, in exercise of the powers vested under Rule
12(3) or the Chandigarh Lease Hold of Sites and Building Rules,
F 1973, lease of the said site is hereby cancelled as a last resort and
further 10% of the premium of the site i.e. Rs. 2,87 ,000 (Rupees
Two Lacs Eighty Seven Thousand only) plus ground rent and t"
I
interest calculated to the date of cancellation is forfeited.

None present inspite of valid service of notice.
G
Issue under my hand and seal this 24th day of June, 1992."

The appellant herein preferred an appeal thereagainst befOi'e the Chief
Administrator, Union Territory of Cha.idigarh and by an order dated
H 21.2.1995, the Chief Administrator, Chandigarh held :
~-
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1243

"4. The representative of the Estate officer argued that an amount A
of Rs. 52,25,880 is due from the appellant which includes penalty
interest and forfeiture etc. The Counsel for the appellant agrees
to make the part payment on 7.3.95 in the Lok Adalat to be held
in U.T. State Guest House and the remaining he shall be paying
by 31st March, 1995. To this payment the representative of the B
Estate Officer has no objection.

-r'· 5. In view of this commitment, of the counsel for appellant, l set
aside the impugned order, restore the site to the appellant subject
to the condition that pa1t payment is made on 7.3.95 in the Lok C
Adalat and the remaining alongwith forfeiture of2% shall be paid
by 31st March, 1995 1..,i\ing which the order of the Estate Officer
shall become operative. The penalty on the last instalment is
however waived of.
Announced. Parties be communicated. " D

According to the appellant, the said order was communicated
after 7.3.1995 as a result whereof no payment, as directed, could be
made. The said appellate order, therefore, came to be questioned by the
appellant by filing a revision application before the Advisor to the
Administrator, U.T. Chandigarh, who by his order dated 17.5.1995 directed E
as under :

"5. In this case the allotment of the site was made on 26.4.1988
and although the period of more than 7 years has elapsed yet a
part from making the initial payment of 25% of the premium F
amount, the petitioner did not take care to make the payment of
premium amount and ground rent etc. with the result that the
outstanding amount due from the petitioner has accumulated to
the extent of more than Rs. 50,00 lacs. Anyhow taking into
consideration, the fact that the petitioner has already constructed G
the building over this site and he has now agreed to clear all
outstanding amounts. I take lenient view in the matter and restore
the site to 1he petitioner subject to the condition that be shall pay
Rs. 17 .00 lacs by 31st May, 1995 and second instalment on or
before 18.7. J 995 2nd railing which the order of the Estate Officer H
I
'·
1244 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A shall become operative. However, as ordered by the Chief Admin-
istrator, he is not liable to pay penalty on 1st instalment They will
however pay only 2% forfeiture. It is urged by the learned counsel
for the petitioner that the Estate Officer does not cooperate with
the party concerned in preparing the accounts statement and,
B therefore, direction to this effect may be given to the quarter
concerned. In order to obviate the changes that the petitioner may
not come with the plea that he could not pay the due amount in
time because of non-supply of account statement, it is ordered that
Estate Officer shall prepare the account statement of the

c petitioner indicating the balance amount to be paid by him as
early as possible and deliver the same to the petitioner by 25th
May, 1995.
Announced. Parties be communicat~d."

The appellant contended that in the Statement of Accounts forwarded
D to the appellant by the Estate Officer pursuant to or in furtherance of the
said direction, in stead and place of 12% interest, 15% interest for certain
period and 24% interest for the rest had been levied. Levy of such penal
interest, it appears, was the subject matter of a writ petition before the
Punjab and Haryana High Court marked as CWP No. 17188 of 199~.
E
In the meanwhile, a proceeding under the provisions of the Public
Premises (Eviction of Unauthorized Occupants) Act, I 971 was initiated.
By an order dated 29.3.1996, the Estate Officer directed the appellant and
all other persons in occupation to vacate the said premises. An appeal
F preferred thereagainst was dismissed by the District Judge by an order
dated 17 .4.1996.

An application for amendment to the writ petition was filed question-
ing the order of eviction passed under the Public Premises (Eviction of
G Unauthorized Occupants) Act, 1971. During the pendency of the said writ
petition, the appellant deposited a sum of Rs. 25,00,000 in terms whereof
allegedly the entire principal amount due towards instalments and ground
rent was cleared. A further sum of Rs. 5,00,000 was deposited on
31.10.1996 in terms of an order of the High Court, whereafter the following
H statement of accounts was prepared by the Estate Officer :

r-
1
.~I
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1245

SJ. No. HEAD OUTSTANDTNG AMOUNT A

l. Principal Amount Nil

2. Interest Amount Rs. 25,68,464

3. Forfeiture Amount Nil B
(Maximum l 0% of the
allotment price i.e.
Rs. 28,70,000

The appellant herein deposited a sum of Rs. 13,47,300 on 27.3.1997 C
in terms whereof according to the appellant all outstanding amount with
interest calculated @ 15% per annum would have been cleared. However,
it appears that the pay order dated 31.10.1996 for a sum of Rs. 5,00,000
which the appellant tendered to the Estate Officer was returned. On
2.1.1998, he resubmitted the same to the Estate Officer within its validity
period. D
By reason of the impugned judgment dated 19.11.1996, the writ
petition ';Vas dismissed with costs. Liberty, however, was given to the
appellant to give option to purchase the property in terms of Section 2 lA
of the Rules. A review application was filed by the appellant but the High E
Court dismissed the same.

The appellant herein filed Civil Appeal No. 49 of 1999 against the
main order and Civil Appeal against the order of the High Court refusing
to review its earlier order. This Court by an order dated 18.2.1998 while
issuing notice on the Special Leave Petition directed : F
"There shall be an ad-interim stay of resumption of the property.
The petitioners, in the meanwhile, are directed to approach the
Estate Officer and have their account prepared of all the dues as
due upti.l 31st March, 1998 and make payment thereof before that
date. The Estate Officer and the Chief Administrator would be G
bound to render assistance in the preparation of accounts and
accept payment but subject to the result of these petitions."

Pursuant to or in furtherance of the said direction, the appellant by
pay orders dated 27.3.1998, 17.2.1998 and 15.7.1998 tendered a total sum H
1246 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A of Rs. 26,57 ,500 stating :

"With amount remitted above, it is hoped that all the dues stand
clear. However, as per orders of the Honourable Supreme Court
of India the total due amount after deducting Rs. 26,57,500 may
kindly be intimated so that compliance may be made."
B
The Estate Officer in response to the said letter by his order dated
18.3 .1998 intimated to the appellant the account showing dues of a further
sum of Rs. 3,55,027 including ground rent. It appears from the accounts
that the appellant had made over payment by Rs. 3,723. Upon charging
C of ground rent for the period 13.3.1998 to 10.4.1998 for a sum of Rs.
71,750 and 10% F.F. amounting to Rs. 2,87,000, a further sum of Rs.
3,55,027 was demanded. The appellant deposited the said amount and
forwarded the pay order therefor along with his letter dated 19.3.1998.

D SUBMISSIONS :
Mr. .T.K. Sibal, learned Senior Counsel appearing on behalf of the
'
appellant, would submit that having regard to the fact that all payments
had been made, pursuant to the order of this Court, the impugned judgment
of the High Court should be set aside.
E
Ms. Kamini Jaiswal, learned counsel appearing on behalf of the
respondent would, on the other hand, contend that the respondents herein
having accepted the payments from the appellant under the orders of the
Court which being subject to the result of these appeals, the matter may
be heard on merits. The learned counsel would contend that from the
F records it would appear that the appellant except for making the initial
payment of 25% failed and/or neglected to make any further payment
despite several oppo1tunities granted to it. Ms. Jaiswal would urge that the
appellant also failed to comply with the order passed by the appellate and
the revisional authorities in terms whereof also while seiting aside the order
G of resumption, opportunities had been granted to it to pay the amount(s)
in question, directing, however, that in the event of its failure to do so, the
order of resumption w;ll revive. The learned counsel would submit that this
Court in Babu Singh Bains & Ors. v. Union of India & Ors., [1996] 6 SCC
565 has upheld the validity of the provisions of resumption of lands/
H buildings under the 1952 Act and in view of the fact that the authorities
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1247

of the respondent acted strictly in terms thereof, this Court should not show A
any sympathy. The learned counsel would argue that keeping in view the
fact that an equitable order has been passed by the High Court to the effect
that the appellant can repurchase the land in terms of Rule 21 of the Rules,
the same may not be interfered with.

Mr. Sibal in reply, however, \vould submit that the issue must be B
considered having regard to the fact situation obtaining in each case. The
''\- learned counsel pointed out that a Full Bench of the Punjab and Haryana
High Court in Ram Puri v. Chief Commissioner, Chandigarh, AIR (1982)
Punjab & Haryana 301 upheld the validity of the provisions relating to
resumption of the land only on the ground that the same is to be taken c
recourse to as a last resort. The learned counsel would urge that in Babu
Singh Bains (supra), this Curt having affirmed the judgment of the Punjab
& Haryana High Court in Ram Puri (supra), must be held to have accepted
the said principle.

Drawing our attention to several judgments of this Court including D
those in which one of us (V.N. Khare, CJI was a Member), Mr. Sibal made
submissions to the effect that a humane approach is required to be taken
in such matters. The learned counsel in this behalf relied upon Jasbir Kaur
v. UT. Chandigarh, (1999] 9 SCC 22; Roochira Ceramics v. HUDA &
Ors., (2002] 9 SCC 599; Kashmir Chand v. State of Haryana, [1996] 9 E
SCC 470 Surinder Kaur v. Government of Punjab & Ors., (1998] 9 SCC
592; S.MS. Sandhu Builders v. Chandigarh Administration, [2003] 3 SCC
125 and an unreported order of this Court dated 23.1.1998 passed in Batra
Finance v. Chandigarh Adminstration, (Civil Appeal No. 459 of 1998
arising out of S.L.P. (C) No. 17041 of 1997).
F
Ms. Kamini Jaiswal has also referred to a few unrep01ted orders of
this Court wherein the parties had been directed to take recourse to the
provisions for re-allotment of the lands.
·•

VIRES OF THE 1952 AC1 :
G
The constitutionality of Section 8-A of the 1952 Act as inserted by
the Central Act No: 17 of 73 in terms whereof the Estate Officer became
empowered to resume building or site and to forfeit money paid by
/""'"'
transferee came to be questioned before the Punjab and Haryana High
Court in Ram Puri, (supra), inter alia, on the ground that same is violative H
1248 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A of Article 14 of the Constitution of India. S<lndhwalia, CJ, speaking for the
majority while holding that the power of resumption is valid observed that
the same being an ultimate civil sanction should be used as a weapon of
last resort as well as with great caution and circumspection, Punchhi, J. (as
the learned Chief Justice then was), however, in his minority opinion made
B a distinction between resumption and forfeiture and observed that Section
8-A could not be applied in view of the orders/letters of allotment referred
to therein and in any event such resumption cannot be in relation to a
building which was built on the land. The provision was held ultra vires
also on the ground that there is no relief available against forfeiture in terms
C of Section 80A, holding :

" ... But if it is held that Section 8-A kept applying even after
every paise was paid, on the breach of other conditions of sale,
even then the Estate Officer causing covenantal resumption
cannot, in observance of the practice afore-referred to effect sale
D of the property merely to recover the adjudged penalty. Under the
ordinary law, as observed by the Supreme Court in Jagdish Chand
Radhey Shayam's case AIR (1972) SC 2587, (supra), there is
relief available against forfeiture, but there is none under Section
80-A (old Section 9). The vice of discrimination under Article 14
of the Constitution would immediately set in. The principle of
E
Magan/al Chhaganlal (P) Ltd. v. Municipal C01pn. of Greater
Bombay, AIR (1974) SC 2009 cannot save the vice for these are
not merely procedural matters where two paths are open to reach
the same destination. The end results of both courses are different.
Under ordinary law, the transferee can pay the forfeited money
F and avoid other consequences. But the stance of the Government
under Section 8-A is that : it must sell the property and recover
the forfeited money from the proceeds, refusing to have it directly
from or on behalf of the transferee. Thus, to preserve its
constitutionality, it must be held that the Estate Officer has to keep
G the property intact and release it on the payment of the adjudged
penalty in the case of covenantal resumption. That is what was
held in Amrit Sagar Kashyap 's case (l 980-82 Pun LR 441)
(supra) which has to be approved to this aspect of the case. 'For
the aforesaid reasoning, the Estate Officer has no choice in the
H matter.
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1249

On the other limb, the argument on behalfofthe Chandigarh A
Administration that the title to the site is divested in its favour sans
the building constructed thereon appears to me wholly chimerical
and unworkable, besides being iniquitous. Three Latin maxims
will convey the point:
B
(i) "Aedification solo, solo credit" (That which is built on land
becomes part of the land)
..
(ii) "Quickquid plantatur solo, solo cedit whatever is affixed to
the soil belongs to the soil). C

(iii) "Omne quod solo inaedificator solo credit"

(Everything which is built upon the soil passes with soil).

These maxims have the advantage of embodying the wis- D
dom of many under each of the one who coined them. And
it is said, these maxims are 'prying emanations of the eternal
wisdom'. It is undoubtedly true that their usefulness increases,
rather than diminishes, as the law grows complex and
involved, for they bring back the mind to the just principles. E
Now to say that the site vests in the Government and not the
structure thereon, which becomes part and parcel of the site,
is begging the question. Such a construction put by the
Chandigarh Administration to the effect of resumption causes
destruction of an estate; the two ownership attempting to pull F
apart, but vainly. Thus interpreting Section 8-A, I would
refrain from an odious construction which would lead to the
destruction or dissipation of an estate, and as was done in
Amrit Sagar Kashyap 's case ( 1980-82 Pun LR 441) (supra)
settled the term 'resumption' to a right of pre-entry on the G
property resumed."

This Court in Babu Singh Bains (supra) held that as Section 8-A
provides for a fair procedure, the same is not arbitrary and, thus, riot
violative of Article 14 of the Constitution of India, holding : H
1250 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A " ... The majority judgment has rightly focused the question in
the correct perspective and had held that Section 8-A is valid in
law and, therefore, not violative of Article 14. In Northern India
Caterers (P) Ltd. v. State of Punjab, AIR ( 1967) SC 1581, this
Court had held that when there are two modes of procedure, one
B being more drastic and harsher than the other without any
guidelines, invocation of the former was violative of Article 14
which was reversed by a larger Bench in Maganlal Chhaganlal
(P) Ltd. v. Municipal C01pn. of Greater Bombay, [I 974] SCC
402, knocking the bottom of the plea of constitutional validity of
r l.

Section 8-A on the anvil of Article 14. Though softer course under
c Section 15 was available, Section 8-A does not become invalid
on that score. Section 9 has been deleted and procedural safe-
guards have been provided in Section 8-A. Therefore, Section 8-
A having provided fair procedure, does not become arbitrary and
violative of Article 14."
D
VALIDITY OF THE PROCEEDINGS :

One of the questions which, therefore, must always be posed by the
Estate Officer, while initiating a proceeding under Section 8A of the Act
E is as to whether the drastic power of resumption and forfeiture has been
taken recourse to as a last resort. The order of the Estate Officer dated
13.8.1992, does not say so. No reason has also been assigned in the said
order.

It may be. that the appellant even did not comply with the appellate
F order but it had a legitimate grievance therefor insofar as the said order
was made available to it after 7.3.1995 whereas the part payment in terms
thereof was to ·be made on the said date. The revisional order dated
17.5.1995 provided that payment be made in terms of the accounts
submitted by the Estate Officer but the question as to whether the Estate
G Office could levy. interest over and above 12% p.a. i.e. 15% from 1992
and 24% from 1993 was the subject-matter of a writ petition which was
pending before the High Court. The appellant paid the entire amount
which, according to the it, was due to the respondent. It further kept in
.
!
'°r'..
readiness a pay order of Rs.13,00,000, a copy whereof had also been filed
H with the review application.
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1251

It is, therefore, not a case where the court will have to take one stand A
or the other in the light of the statutory provisions. The question as to
whether the extreme power of resumption and forfeiture has rightly been
applied or not will depend upon the factual matrix obtaining in each case.
Each case may, therefore, have to be viewed separately and no hard and
fast rule can be laid down therefor. In a case of this nature, therefore, the B
action of the Estate Officer and other statutory authorities having regard
to the factual matrix obtaining in each case must be viewed from the angle
as to whether the same attracts the wrath of Article 14 of the Constitution
of India or not.

In Mis. Darkadas Mmfatia and Sons v. Board of Trustees of the Port C
of Bombay, AIR (l 989) SC 1642, while holding that the provisions of
Bombay Rents, Hotel & Lodging House Rates (Control) Act, 1947 do not
apply to the local bodies or public authorities which are States within the
meaning of Article 12 of the Constitution of India, this Court observed :
D
"16. Our attention was also drawn by Mr. Chinai, learned counsel
for the appellant, to the observations on 'Administrative Law' by
Wade, 5th Edn. at pager 355. It was stated therein as follows :

'Statutory power conferred for public purposes is conferred
as it were upon trust, not absolutely - that is to say, it can validly E
be used only in the right and proper way which Parliament when
conferring it is presumed to have intended.

17. It, therefore, followed that the public authorities which enjoy
this benefit without being hidebound by the requirements of the p
_. Rent Act must act for public benefit. Hence, to that extent, this
is liable to be gone into and can be the subject-matter of
adjudication."

The contention advanced on behalf of the respondents therein that
when an order is passed terminating the tenancy, the lack of public interest G
or existence of collateral purpose or mala fide, would be a matter which
the tenant must prove was rejected, stating:

"21. We are unable to accept the submissions. Being a public body
even in respect of its dealing with its tenant, it must act in public H
1252 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

.A interest, and an infraction of that duty is amenable to examination
either in civil suit or in writ jurisdiction."

Unfortunate although it may seem to be that the parties hereto had
not highlighted these issues before the High Court and, thus, the High Court
B could not deal with the matters in their proper perspective.

The High Court, however, not only differed with its earlier opinion
in Mis. Sandhu Builders (P) Ltd. v. Union Teritory, Chandigarh, (CWP No.
3030 of 1994) decided on 19. l.1996 but went on to obs~rve :

c ''. . . We, therefore, do not find any justification to nullify the
impugned orders on the basis of the orders passed in P.K. Ahuja 's
case or Mis. Sandhu Builders' case. The observation made by
Sandhawalia, J. in Ram Puri v. State of Punjab, AIR (1982)
Punjab & Haryana 214 (F.B.) suggesting that the action for
resumption of allotted site should be taken only as a last resort
D
deserve full respect. However, we cannot ignore the growing
tendency amongst allottees of commercial and other· lands to
enjoy the public property without paying the premium, ground
rent etc. A very large number of cases have come to our notice
in which the allottees have not paid a single penny after occupying
E the allotted property. Therefore, we are of the opinion th.at in those
cases where the allottee consistently defaults in payment of the
premium etc. it will be open to the competent authority to take
action under Section 8A or Rule 12(3)."

F That was not the correct approach to be adopted by the High Court.

CASE LAWS:

In Jasbir Kaur (supra), a Bench of this Court of which one of us V.N.
Khare, J. (as the CJI then was, was a Member) without expressing any
G opinion on the question of law as raised therein directed regularization of
allotment of the site in favour of the appellant taking note of the fact that
the entire amount which was due had been paid. In Jasbir Kaur v. Union
Territory of Chandigarh & Ors., [1991] 1P.L.J.417, a Division Bench of
the Punjab & Harayana High Court following its earlier decision in Ram
H Puri (supra) in the facts ·and circumstances of the case held that in case
TERI OAT ESTATES (P) LTD, v. U.T. CHANDIGARH fSINHA, J.] I 253

of default, the· interest chargeable would be 10% and not 18%. A
In Kashmir Chand (supra), again in a case where the payments had
been made, relief had been given to the parties. In an unreported decision
of this Court dated 23.1.1998 in Batra Finance (supra), this Court in the
fact situation obtaining therein observed that the direction for forfeiture B
should not have been passed by the High Court with liberty to file
application foe re-allotment, considering the fact that the interest on unpaid
amount had been ·calculated on the basis of graduated interest from 12%
to 24% and penalty on the first instalment had also been calculated at Rs.
31,400 and for the second instalment at Rs. 83,912 and further in view of
the fact that the appellant had already deposited a sum of Rs. 24,90,000. C

In Surinder Kumar (supra), this Court directed payment of interest
@ 18% on the delayed payments consisting of I 1% penalty plus 7% regular
interest on defaulted instalments and directed :
D
". . . In short, as a condition for cancellation of resumption order
the appellant will be required to pay in all, apart from the defaulted
amount;;, I 8% interest on the delayed payments of instalments.
This will be worked out by the appropriate authority and whatever
balan.:e is payable by the appellant shall be paid over by her
within a period of four weeks from the intimation to him of such E
calculation and determination of payable amount by the appropri-
ate authority, namely, the Estate Officer, Punjab Uraban Planning
& Development Authority, SAS Nagar (Mohali), District Ropal,
Respondent 4, before whom the appellant will produce relevant
evidence about the payment of appropriate amounts pursuant to F
the present order. The shortfall, if any will be made good by her
within a period of four weeks after estimation and intimation by
the 4th respondent as the allotment of the plot shall stand
regularized and resumption order shall stand confirmed."

Yet recently in Sandhu Builders (supra), while dismissing the appeal, G
this Court granted six weeks' time to deposit the balance amount of
difference in interest stating :

"8. Considering all the facts and circumstances of the case as
indicated above, we do not think that it is a case in which any H
1254 SUPREME COURT REPORTS (2003) SUPP. 6 S.C.R.
,. .
A interference is called for in the matter. But we feel that since total
amount of premium as well as the amount of interest @ 12%
stands dep, •Sikd as stated on behalf of the appellant, it would not
be just a,nd appropriate that the appellant be disallowed the
opportunity of depositing the difference in amount on account of
B enhanced rate of interest i.e. @ 24%.

9. In the result, we dismiss the appeal with costs but allow the
appellant six weeks' time to deposit the balance amount of
difference in interest @ 24% as per demand of the respondents."

C A three-Judge Bench of this Court in Patiala Inds. Investment Co. Pvt.
Ltd. v. Union of India & Anr., [2003] 3 SCC 127, on a concession made
by the learned Solicitor General that the enhanced rate of interest @ 24%
would be charg~able from 22.7.1993, directed :

"Revised calculation of the amounts due and payable by the
D petitioners Will be on this basis, will be served on the petitioners
within one week from today. Within four weeks from the service
of the revised demand 25 per cent of the amount due from each
of the petitioner will be paid to the respondents. The balance
amount will be paid within four months of the service of notice
E of demand. It is clarified that the interest will continue to run at
the enhanced rate on the deceasing balance till the date of
payment.

If the payment is made as directed by this order, the Solicitor
General states that the respondent will not exercise their right of
F
re-ent1y/forfeiture and Clause 17 or any other appropriate clause
on the ground of delay in payment of the amounts due to the
respondents."

In Devinder Singh Pannu & Ors. v. The Chandigarh Admn. & Ors.,
G (Civil Appeal No. I 092 of 1998), this Court having regard to the fact that
the appellants therein had already made an application for re-allotment
directed the respondent to consider the same. In Devinder Lal Gupra v.
UT of Chandigarh & Anr., (S.L.P. (Civil) No. 12512of1999) by an order
dated 15.2.2000, the special leave petition was dismissed with a direction
H to the respondents that if the petitioners therein made an application for
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH (SINHA, J.] 1255

re-allotment of the land to them in accordance with the rules within one A
week from the said date the respondents would consider the same on merits
and try to accommodate the petitioners, if it is possible to retain the land.

SYMPATHY:

B
We have no doubt in our mind that sympathy or sentiment by itself"
cannot be a ground for passing an order in relation whereto the appellants
miserably fail to establish a legal right. It is further trite that despite an
extra-ordinary constitutional jurisdiction contained in Article 142 of the
Constitution of India, this Court ordinarily would not pass an order, which C
would be in contravention of a statutory provision.

As early as in 1911, Farewell L.J. in Latham v. Richard Johson &
Nephew Ltd., (1911-13 AER reprint p. 117) observed :

"We must be very careful not to allow our sympathy to affect our D
judgment with the infant plaintiff. Sentiment is a dangerous will
O' the wisp to take as a guide in the search for legal principles."

(See also Ashoke Saha v. State of West Bengal & Ors., CLT (1999) 2
H.c. 1). E

In Sairindhri Ddolui v. State of West Bengal, (2000) l SLR 803, a
Division Bench of the Calcutta High Court wherein (one of us Sinha, J.
was a Member), followed the aforementioned dicta.

This Court also in CB.SE. and Another v. P. Sunil Kumar and F
Others, [1998] 5 SCC 377 rejecting a contention that great injustice would
perpetrate as the students having been permitted to appear at the exami-
nation and having been successful and certificates had been issued in their
favour, held :
G
" ... We are conscious of the fact that our order setting aside the
impugned directions of the High Court would cause injustice to
these students. But to permit students of an unaffiliated institution
to appear at the examination conducted by the Board under orders
of the Court and then to compel the Board to issue ce1tificates in H
1256 SUPREME COURT REPORTS f2003] SUPP. 6 S.C.R.

A favour of those who have undertaken examination would tanta-
mount to subversion of law and this Court will not be justified
to sustain the orders issued by the High Court on misplaced
sympathy in favour of the students ... "

B PROPORTIONALITY :

The issue in the light of the decision of the full Bench of the Punjab
& Haryana High Court in Ram Puri v. Chief Commissioner, Chandigarh,
AIR (1982) P & H 301 (supra) as affirmed by this Court in Babu Singh
C Bains & Ors. "· Union of India & Ors., [1996] 6 SCC 565 (supra) may
have to be considered from another angle.

By reason of the auction held, the land in question has been sold in
favour of the ~ppellant. A letter of allotment has been issued in terms
D thereof. The appellant has been put in possession of the purchased property.
In law he was entitled to raise constructions and in fact he has raised a six
r-·.
storied building. He has paid a part of the first instalment and during
pendency of the proceeding before the High Court has paid a substantial
amount together with interest@ 12% p.a. as enhanced from time to time.

E The respondents were entitled to pay interest on the unpaid amount
@ 7% p.a. which in the event of non-payment was to be paid at a penal
rate of 12% and subsequently enhanced to 15 per cent and then to 24 per
cent as well the amount of penalty to be levied thereupon. The entire
amount was recoverable through the process of law. In a situation of this
F nature, having regard to the rival claims made by the parties, ifthe default
is not absolute wilful or a dishonest one but occasioned due to situation
which may be beyond one's control, the statutory right of the respondent
in resuming the land may not be appropriate, if the entire dues stand
discharged.
G
In terms of the provisions of the Act, the respondents are entitled to,
(1) resumption of the land, (2) resumption of the building and (3) forfeiture
of the entire amount paid or deposit;!d. Having regard to the extreme
hardship which may be faced by the parties, the same shall not ordinarily
H be re.;orted to.
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1257

The situation, thus, in our opinion, warrants application of the A
doctrine of proportionality.

The said doctrine originated as far back as in 19th century in Russia
and later adopted by Germany, France and other European countries as has
been noticed by this Court in Om Kumar v. Union of India, (2001] 2 sec B
386.

By proportionality, it is meant that the question whether while
regulating exercise of fundamental rights, the appropriate or least
restrictive choice of measures has been made by the legislature or the
administrator so as to achieve the object of the legislation or the purpose C
of the administrative order, as the case may be. Under the principle, the
court will see that the legislature and the administrative authority "maintain
a proper balance between the adverse effects which the legislation or the
administrative order may have on the rights, liberties or interests of persons
keeping in mind the purpose which they were intended to serve." D
This Court as far back as in 1952 in the State ofMadras v. V.G. Row,
AIR (1952) SC 196, observed :

"The test of reasonableness, wherever prescribed, should be
applied to each individual statute impugned, and no abstract E
standard or general pattern of reasonableness can be laid down as
applicable to all cases. The nature of the right alleged to have been
infringed, the underlying purpose of the restrictions imposed, the
extent and urgency of the evil sought to be remedied thereby the
disproportion of the imposition, the prevailing conditions at the F
time should all enter into the judicial verdict. In evaluating such
elusive factors and forming their own conception of what is
reasonable, in all the circumstances of a given case, it is inevitable
that the social philosophy and the scale of values of the judges
participating in the decision should play an importcnt part, and G
limit to their interferences with legislative judgment in such cases
can only be dictated by their sense of responsibility and self-
restraint and the sobering reflecting that the Constitution is meant
not only for the people of their way of thinking but for all, and
that the majority of the elected representatives of the people have, H
1258 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A in authorizing the imposition of the restrictions, considered them
to be reasonable."

The principle started gaining momentum in other countries and it was
applied and developed in England as noticed by Lord Diplock in R. v.
B Secretmy of State for the Home Department, ex Brind, (1991) 1 Appeal
case 696. This Court in Tata Cellular v. Union of India, [1994] 6 SCC 651
·.vhile opin'ing in concurrence with the judgment of the House of Lords in
Council of Civil Services Union v. Minister of Civil Service, [1985] 1
Appeal Cases 374 that the extent of judicial review should ordinarily be
C limited to illegality, irrationality and procedural impropriety observed that
they are only the broad grounds but did not rule out addition of further
grounds in the course of time and also noticed 'Brind' (supra).

Ever since 1952, the principle of proportionality has been applied
vigorously to legislative and administrative action in India. While dealing
D with the validity of legislation infringing fundamental freedoms enumer-
ated in Article 19( I) of the Constitution of India, this Court had occasion
to consider whether the restrictions imposed by legislation were dispropor-
tionate to the situation and were not the least restrictive of the choices. In
cases where such legislation is made and the restrictions are reasonable yet,
E if the statute concerned permitted administrative authorities to exercise
power or discretion while imposing restrictions in individual situations,
question frequently arises whether a wrong choice is made by the
administrator for imposing the restriction or whether the administrator has
not properly balanced the fundamental right and the need for the restriction
F or whether he has imposed the least of the restrictions or the reasonable
quantum of restrictions etc. in such cases, the administrative action in our
country has to be tested on the principle of proportionality, just as it is done
in the case of main legislation. This, in fact, is being done by the c0urts.
Administrative action in India affecting the Fundamental Freed0ms has
always been tested on the 3.nvil of the proportionality. in the last 50 years
G even though it has not been expressly stated that the principle that is applied
is the proportionality principle. [See Om Kumar (supra)].

In Om Kumar (supra), however, this Court evolved the principle of
Primary and Secondary Review. The do-:trine of primary view \vas held
H to be applicable in relation to the statutes or statutory rules or any order
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.] 1259

which has the force of statute. The secondary review was held to be A
applicable inter alia in rel~tion to the action in a case where the executive
is guilty of acting patently arbitrarily. This Court noticed E.P. Royappa v.
State of Tamil Nadu, [1974] 4 SCC 3 and observed that in such a case
Article 14 of the Constitution of India would be attracted. In relation to
other a.dministrative actions as for example punishment in a departmental B
proceeding, the doctrine of proportionality was equated with Wednesbury
Unreasonableness.
·~

We may, however, notice that the said doctrine in principle or the ·
spirit thereof has recently been applied by the Court of Appeals.
c
In Edore v. Secret01y of State for. the Home Department, [2003] 3
All ER 1265, the appellant was a citizen of Nigeria who had entered into
the United Kingdom and remained back after her visa had expired. She had
two children, born to a British citizen. The children were emotionally
dependent on him and he was a stabling influence on their lives. If the D
appellant and her children were returned to Nigeria, their relationship with
their father would end. The Court trying to resolve the conflict at hand
opined :

"Where the essential facts were not in doubt or dispute, the
adjudicator's task was to determine whethe·r the decisions under E
appeal was properly one with the decision-makers discretion,
namely that i.t was a decision which could reasonably be regarded
as striking a fair balance between the competing interests in law.
If it were, then the adjudicator could not characterize it as a
decision 'not in accordance with the law' and so, even if he F
personally would have preferred the balance to have been struck
differently, he could not substitute his preference for the decision
in fact t'lken. However, there would be occasions where it could
be properly be said that the decision reached was outside the range
of permissible responses open to him, in that the balance struck G
was siinply wrong."

In a later case although the doctrines of the proportionality was
y
not expressly referred to but the spirit thereof was applied. in R. v.
Levisham London Borough Council, [2003] 3 All ER 1277, wherein it was
held: H
1260 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A "When the decision maker comes to balance the factors he is
entitfed to a place in the scales. Thus, ever. though the length of
delay and reasons for it are often balanced against the prospect
of success, it is possible to envisage circumstances in which an
authority can rationally and properly conclude that even short
B delay for which there is a good explanation is not enough to justify
a an extension of time for review."

CONCLUSION :

Keeping in view the aforementioned principles in mind would it be
C proper for us to take a view as has been suggested by Ms. Jaiswal? The
. answer to the said question must be rendered in the negative, if the
competing interests can be balanced.

The appellants had sought to show their bona fide in making their
D payments before the High Court. They had also shown their willingness
to make the payments on the difference of amount of interest. They
..
pursuant to the order of this Court not only paid the entire amount due but
also paid ground rent upto 1988-1999 and further paid 10% penalty on
the forfeited amount of entire consideration money amounting to Rs.
2,87,000.
E
The la11d in question for all intent and purport had been transferred
in favour of the appellants. They were merely to pay the balance amount
of 75% of the consideration amount in instalments. The rate of interest,
as noticed hereinbefore, had been increased from 7% to 24%. Penalty was
F levied by the appellant authority at 1% and the revisional authority at 2%.
Contrary thereto the Estate Officer, however, in terms of his original order
directed payment of penalty at 10% F.F.

We may, however, hasten to add that we do not intend to lay down
G a law that the statutory right conferring the right of the respondent should
never be resorted. We have merely laid down the principle giving some
illustrations where it may not be used. There cannot be any doubt
whatsoever that if the intention of the allottee is dishonest or with an ill
motive and if the allottee does .not make any payment in terms of the
.
allotment or the statute with a dishonest view or any dishonest motive, then
H Section 8(1) can be taken recourse to.
TERI OAT ESTATES (P) LTD. v. U.T. CHANDIGARH [SINHA, J.) 1261

We, however, cannot but deprecate the conduct of the appellants in A
not making an endeavour to pay the instalments within a reasonable period.
They, thus, did not pay the entire amount of the first instalment within the
stipulated period; only a part payment was made in the year 1990 and 1992
by that time even the second instalment became due. They did not make
any payment before the revisional authority despite the order passed by the B
appellate authority. We, therefore, are of the opinion that the appellant in
C.A. No. 49of1999 should deposit a further sum of Rs. 15,00,000 (Rupees
fifteen lacs) with the Estate Officer, Chandigarh within a period of ten
weeks from date of receipt of a copy of this order, which, in our opinion
would meet the ends of justice. However, so far as the other matters are
concerned, having regard to the facts and circumstances obtaining in their C
cases, we do not intend to direct levy of any penalty on them.

These appeals are disposed of in the above terms. No costs.

N.J. Appeals disposed of.