# JAGDISH CHAND RADHEY SHY AM v. THE STATE OF PUNJAB AND OTHERS

- **Citation:** [1973] 2 S.C.R. 97
- **Court:** Supreme Court of India
- **Decided:** 1972-09-06
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jagdish-chand-radhey-shy-am-v-the-state-of-punjab-and-others-5933
- **Pages:** 6

## Headnote

A
JAGDISH CHAND RADHEY SHY AM
v.
THE STATE OF PUNJAB AND OTHERS
September 6, 1972
97
B
[A. N. RAY, f. D. DUA AND K. K. MATHEW, JI.]
Constit11tio11 of India-Articles 14 and 19(1) (/)
Capital of P1miab
(Development a11d Regulation) Act 1952-Section 9, forfeiture of the
who!<! or any part of considtration money for brcac/1 of non-payment
of rile balai1ce-Whether violative of Art. 14 of tlte Consrit11tion of lndiaRes11mption of site for unpaid consideration mo:rcr-Wlwlter riolntcs
C
Artie/~ 14 of the Constitution,
D
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H
Section 9, resuntption of .titt fo"' unpaid considerarion an1011nt ii·lrct'lie1
violates Article 19(1) (/) of tire Cons1itutio11.
The appellant purchased a site at a public auction for Rs. 94.000. ·-.
~5% of the price, j.e. Rs. 23,500/. was paid at th~ site and the balance
was to be paid in three equal instalments. The appellant paid a further
sum
of Rs.
21,992/-
towards
the
first
instalment.
Two instalme.1ts
of
Rs. 25,615 /-
each and sum of Rs. 3.623 /-
being the
balance sum of the first instalment were not paid by the appellant. The
Estate Officer. in exercise of powers under section 9 of the Capilal of
Punjab (Development and Regulation) Act. 1952. resumed the site and
forefeited the. amount of Rs 42,728.01 paid hv Lhe appellant.
After cxhaust'ng his remedies under the Act, the appellant challenged the validity
of the orders and vires of Section 9 of !he Act on the ground that pro-
\ isions Of Section 9 regarding forfeiture of the instalmentc; paid dnd the
rc'iumption Of the auction site were violative of Article 14.
The power
of resumption of site uneer section 9 was also challenged as uncon•titutional on the ground that it imposed unreasonable restriction on the ri~ht
to property violatinR Article 19(1) (fl of the Constitution. The Punjab
High Court held that the Government had ri~ht to resume the site as
they were the owners and till all the instalmeots "ere not
paid.
the
title did not pass to the auction purchser.
The Hi~h Court also held
thJt as the Government havf! power to recover the due an1ount as arrear!;
of land revenue, resumption of site was not illeR•l.
HELD : Th.e prohibition in Section 3 of the Act
against
sale.
"!ortgage o_r .transfer. by the auction purchaser except with the
prevtous penmss1on of the Estate Officer of any ri~ht. title or interest in
the site or building. recognises the ownership riRhls of the purclhaserThe Government is only entitled to a char~e on lhe propertv for the
?npaid portion of the consideration
money.
A charge on property
1s under the Transfer of Property Act enforced bv instituting a suit
anti
bringing property to sale.
Section 8 of the Act provides another
power to the Government to recover the unpaid money as arrears of
land revenue. [100 E-101-AJ
!!ction ll of the Act empowers the Government to forfeit the whole
or any part of the money in case of non-payment
of
consideration
money or instalments or other dues ·or breach of covenants.
Under
the' ordinarv law of the land, there is relief against forfeiture for breach
of cownant.
Section 9 does not offer any relief against forfeiture. The
Go\-el'nment can proceed either under the Transfer of Property Act
8-L348Sup.C.I./73
98
SUPREME COURT REPORTS
[1973] 2 S.C.lt.
or under the present Act without any guidelines provided in the statute.
This tea.turc makes section 9 discriminatory and violative of Article
14 of the
Constitution of India.
Section 9 also confers power tn resume the site.
Where there is
a charge, the same can be enforced by instituting a suit in a court of
Jaw under Trnnsfcr of Property Act.
The owner will have an opportunity of paying the money and clearing the property of the charge.
No such opportunity of clearing the charge is possible under sea:on II
cf the Act. There is no guideline in the Act as to when the Government
will resort to resumption of site or forfeiture of monies.
The Govemmav choose without any guideline and d:scriminate in proceeding agaimr
one penon in one manner and a second <>

## Text

A
JAGDISH CHAND RADHEY SHY AM
v.
THE STATE OF PUNJAB AND OTHERS
September 6, 1972
97
B
[A. N. RAY, f. D. DUA AND K. K. MATHEW, JI.]
Constit11tio11 of India-Articles 14 and 19(1) (/)
Capital of P1miab
(Development a11d Regulation) Act 1952-Section 9, forfeiture of the
who!<! or any part of considtration money for brcac/1 of non-payment
of rile balai1ce-Whether violative of Art. 14 of tlte Consrit11tion of lndiaRes11mption of site for unpaid consideration mo:rcr-Wlwlter riolntcs
C
Artie/~ 14 of the Constitution,
D
E
F
G
H
Section 9, resuntption of .titt fo"' unpaid considerarion an1011nt ii·lrct'lie1
violates Article 19(1) (/) of tire Cons1itutio11.
The appellant purchased a site at a public auction for Rs. 94.000. ·-.
~5% of the price, j.e. Rs. 23,500/. was paid at th~ site and the balance
was to be paid in three equal instalments. The appellant paid a further
sum
of Rs.
21,992/-
towards
the
first
instalment.
Two instalme.1ts
of
Rs. 25,615 /-
each and sum of Rs. 3.623 /-
being the
balance sum of the first instalment were not paid by the appellant. The
Estate Officer. in exercise of powers under section 9 of the Capilal of
Punjab (Development and Regulation) Act. 1952. resumed the site and
forefeited the. amount of Rs 42,728.01 paid hv Lhe appellant.
After cxhaust'ng his remedies under the Act, the appellant challenged the validity
of the orders and vires of Section 9 of !he Act on the ground that pro-
\ isions Of Section 9 regarding forfeiture of the instalmentc; paid dnd the
rc'iumption Of the auction site were violative of Article 14.
The power
of resumption of site uneer section 9 was also challenged as uncon•titutional on the ground that it imposed unreasonable restriction on the ri~ht
to property violatinR Article 19(1) (fl of the Constitution. The Punjab
High Court held that the Government had ri~ht to resume the site as
they were the owners and till all the instalmeots "ere not
paid.
the
title did not pass to the auction purchser.
The Hi~h Court also held
thJt as the Government havf! power to recover the due an1ount as arrear!;
of land revenue, resumption of site was not illeR•l.
HELD : Th.e prohibition in Section 3 of the Act
against
sale.
"!ortgage o_r .transfer. by the auction purchaser except with the
prevtous penmss1on of the Estate Officer of any ri~ht. title or interest in
the site or building. recognises the ownership riRhls of the purclhaserThe Government is only entitled to a char~e on lhe propertv for the
?npaid portion of the consideration
money.
A charge on property
1s under the Transfer of Property Act enforced bv instituting a suit
anti
bringing property to sale.
Section 8 of the Act provides another
power to the Government to recover the unpaid money as arrears of
land revenue. [100 E-101-AJ
!!ction ll of the Act empowers the Government to forfeit the whole
or any part of the money in case of non-payment
of
consideration
money or instalments or other dues ·or breach of covenants.
Under
the' ordinarv law of the land, there is relief against forfeiture for breach
of cownant.
Section 9 does not offer any relief against forfeiture. The
Go\-el'nment can proceed either under the Transfer of Property Act
8-L348Sup.C.I./73
98
SUPREME COURT REPORTS
[1973] 2 S.C.lt.
or under the present Act without any guidelines provided in the statute.
This tea.turc makes section 9 discriminatory and violative of Article
14 of the
Constitution of India.
Section 9 also confers power tn resume the site.
Where there is
a charge, the same can be enforced by instituting a suit in a court of
Jaw under Trnnsfcr of Property Act.
The owner will have an opportunity of paying the money and clearing the property of the charge.
No such opportunity of clearing the charge is possible under sea:on II
cf the Act. There is no guideline in the Act as to when the Government
will resort to resumption of site or forfeiture of monies.
The Govemmav choose without any guideline and d:scriminate in proceeding agaimr
one penon in one manner and a second <>ne in o•hcr manner.
In the teeth of !tatutory •ecurity and enforceability of the Govem·
ment charge in preference to others, it is totally unreasonable restriction
on the enjoyment of property by resuming site for defaults in payments
of money and forfo;tlng the monies paid by the transferee. Section 9
violates Article 19( I) (f). [IOIC-!02A]
C1v1L APPELLATE JURISDICTION : Civil Appeal No. 1099 of
1967.
Appeal by certificate from tbe judgment and order <lated 21st
Februnry 1966 of the Punjab High Court, Chandigarh in Letters
Patent Appeal No. 218 of 1965.
Ma/ioufrajit Singh and K. B. Mehta for the appellant.
llarbi;ns Singh and R. N. Sachthey for respondents.
The Judgment of the Court was delivered by
RAY, J. This appeal is by certificate from the judgment dated
2 l February, 1966 of the High Court of Punjab and Haryana at
Chandigarh.
The appellant at a public auction held by the Estate Officer.
Capital Project, Chandigarh on 21 December, 1958
purchased
site No. 43 in the Grain Market, Chandigarh. The P.urchase
price was Rs. 94,000.
25% of the sale price was payable at the
fall of the hammer.
:rhe balance sum with interest was payable
in three equal instalments of Rs. 25,615 each. The appellant
paid 23 ,500 being 25 % of the sale price at the fall of the hammer. The appellant paid a further sum of Rs. 2 l ;992 towardii
the first instalment. A sum of Rs. 3,623 was outstanding on the
first instalment.
The appellant made improvements on the site.
The appellant raised construction thereon at his own expense. He
invested about Rs. 1,50,000 in the shape of building and machinery.
The appellant could not pay Rs. 3,623 being the balance
of the firs~ imtalment and the second and the third instalment~
amounting to Rs. 25,615 each.
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JAGDJSH CHAND v. PUNJAB (Ray, J.)
99
The appellant asked for instalments because the
appellant
was in financial difficulty.
Eventually, the Estate Officer on 2
January, J 962 resumed the site and forfeited
the amount . of
Rs. 42, 728.0 I .paid ~ the appellant.
The order of resumption
and forfeiture was made by the Estate Officer (Capital Project),
Chandigarh in exercise of powers under section 9 of the Capital
of Punjab (Development and Regulation) Act, 1952 referred to
a~ the 1952 Act.
The appellant filed an appeal under section 10 of the 1952
Act.
The appellant's apepal was accepted by the Appellate
Authority, the Chief Administrator, Chandigarh. The appellant
was given time for the payment of instalments with interest at
the rate of 41% per annum and a penalty of 10 per cent of the
amount in arrears was ordered to be paid within 30 days from
the date of the Appellate order.
The conveyance deed in respect
of the site was also to be executed immediately.
The appellant thereafter made a representation to the Chief
Minister and asked for further instalments and prayed that steps
be not taken to resume the site.
The appellant's representation
was rejected.
The appellant then filed a revision application before the Financial Commissioner. On 14'September, '1964 the Financial Com--
missioner rejected the revision application. The ground was that
the appellant had filed a first revision application.
The second
application was therefore not competent. It may be stated here
that section 10 aforesaid provides an appeal to the Chief Administrator against the order of the Estate Officer.
Section lO also
states that a revision application can be presented before the
State Government against the order of the Chief Administrator.
The appellant filed a writ petition in the High Court. The
appellant challenged the validity of the orders of the respondents.
The grounds for challenge were these.
First, section 9 of the
1952 Act which provides for the resumption of property by the
Estate Officer is
ultra vires and unconstitutional.
Secondly,
section 9 provides for resumption of property and forfeiture of
money paid which are unconstitutional and unreasonable restrictionN1n the right to hold property. Thirdly, the power conferred on the Estate Officer to take action under section 9 for resumpfion is unregulated and arbitrary.
In the High Court is was contended that the appellant became
owner of the site, and, therefore, no resumntinn of the site could
be taken bv proceeding under the Punjab Public Premises and
Land !Eviction and Rent Recoverv) Act, 1959. Seconnlv,
it
was contended that section 9 of the 1952 A·~t violated Article 14
100
SUPREME COURT REPORTS
[1973] 2 S.C.R.
jnasmuch as sections 8 and 9 of the 1952 Act provide for the
same matter and there is no indication as to when action wm be
taken under either of the sections. It was also said that the sections offended Article 14 of the Constitution by rea~on of unregulated conferment of power.
The High Court held that title would pass only when full
price was paid and till then the Government remained the owner
and coulrl resume possession.
The High Court held that sections 8 and 9 of the 1952 Act were supplementary to each other
and if recovery of the amount due as arrears of land revenue was
provided for there could be resumption of the site.
Counsel for the appellant repeated the contentions which had
been made before the High Court.
Broadly stated section 3 of the 1952 Act indicate these features.
The Government has power to sell by auction, allotment
or otherwise any land or building.
The consideration money is
to be paid in such manner as the Government may prescribe. The
unpaid portior. of the consideration money wilt be a first charge
on the site or the building.
The transferee except with the previous permission in writing of the Estate Officer shall not be
entitled to sell, mortgage or otherwise transfer any right, title or
interest
in
the
site
or
building
until
the
amount
which is a first charge has been paid in full.
Section 3
·totally repels
the
conclusion
arrived
at
bY
the
High
Coart that the Government remains the owner
until
the
entire tj:ms!deration money is paid.
A charge is created
for the unpaid portion of the consideration money.
The prohi·
bition against sale, mortgage or transfer by the transferee except
with the previous permission of the Estate. Officer of any right,
title or interest in the site or building establishes the ownership
and rights of the transferee. If the Government were the owner
it could not be said that the transferee could sell, mortgage or
transfer any right, title or interest.
The statute speaks of payment of consideration money by and sale to the transferee. The
Government cannot after sale remain the owner.
The Statute
forbids such construction. If the Government is the owner the
Government cannot at the same time be entitled to a charge on
the property for the balance of the
consideration
money.
A
charge on a property is under the Transfer of Property Act enforced by instituting a suit and bringing the property to sale. If
the property yields a higher price then what the charge represents, the owner is entitled to the excess sum.
Section 8 of the 1952 Act deals with i~position of penalty
and mode of recovery of arrears. If there is any default in payment of consideration money or instalment or any other money
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JAGDISH CHAND v. PUNJAB (Ray., J.)
IO I
due on account of transfer or if there is default in the payment
of fee or tax levied the Estate Officer may direct a sum not
exceeding that amount due to be recovered by way of penalty.
The amount due together with the penalty may recovered as an
arrear of land revenue.
Section 9 speaks of resumption of the site or building by the
Estate Officer and forfeiture of the whole or part Of the money
paid on account of consideration in the case of non-payment of
consideration money or instalment or breach of any condition
of transfer or breach of any rule.
Under the ordinary law of the land it is open to the Government to enforce the charge and to recover the due on consideration money, instalments or any other due from the transferee. It
is also open to the Government under section 8 of the Act to
proceed against the transferee io realise the amount due on consideration money or on instalment or any other due as an arrear
of land revenue.
Section 8 provides penalty for default in payment of money and the recovery of the same as an arrear of land
revenue.
These remedies are deterrent and drastic.
Section 9 of ·the I 952 Act empowers the Government to
forfeit the whole or any part of the money in case of nonpayment of consideration money or instalments or other dues for
breach of covenants. Under the ordinary law of the land there
is relief against forfeiture for breach of covenant or provisions.
Section 9 does not offer any relief against forfeiture.
This f~
ture that the Government can proceed either under the ordinary
law of the land or under the 1952 Act shows that there is discrimination.
There is nothing in the statute to guide the exercise
of power by the Government as to when and how one of the
methods will be chosen.
Section 9 confers power to resume site.
There is a charge
on the land for the unpaid consideration money.
This charge
can be enforced by institu·ting a suit in a court of law.
The
owner will have the opportunity of paying the money and clearing the property of the charge.
On the. other hand wh1~11 the
Government proceeds under section 9 of the Act to resume the
land or building the Government proceeds under the Punjab
Public Premises and Land (Eviction and Rent Recovery) Act.
1959. There is no guidance in the Act as to when the Government will resort to either of the remedies.
Again in all these cases of recovery of money or rcsun1ption
of land or building and forfeiture of monies paid the Govern-
• ment may choose and discriminate in proceeding against one
person in one manner and another person in another manner.
102
SUPREME COURT REPORTS
. [1973) 2 S.C.R.
The Act creates a charge on the property. The Act forbids
creation of a third part right by the transferee until the amount
represented b!y the charge is paid in full.
In the teeth of statutory security and enforceability it is totally unreasonable restriction on the enjoyment of property by resuming the site for defaults in payments of money and forfeiting lhe monies paid by the
transferee.
For these reasons, we are of opinion that the Government is
not entitled to forfeit the monies paid and resume the site under
the provision contained in section 9 of the 1952 Act.
These
provisions violate Articles 14 and 19 (1 )( f).
These provisions
ar" unconstitutional.
1he judgment of the High Court is set aside. The appeal is
allowd. In view of the fact that there is no order as to costs
·in the High Court the parties wi!l pay and bear their own costs.
S.B.W.
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