TaxTMI 
TaxTMI 
1989 (1) TMI 315
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.... three other writ-petitions i.e. WP 5521 & 5699 of 1985 and 3463 of 1986. Special leave petitions 11515 of 1987 and SLP 11499 of 1987 are by the LDA and its Authorities directed against the said common judgment dated 8.12.1986 in so far as it pertains respectively to W.P. 5699 of 1985 and 5521 of 1985. Special leave petition 11220 of 1987 is by the LDA and its Authorities seeking leave to appeal from the Order in W.P. 3463 of 1986. 2. The Writ-petitions before the High Court were preferred by the Respondent Lessees Sri D.P. Singh and his mother Smt. Raj Lakshmi Devi, the heirs of Maharaja Pateshwari Prasad Singh in respect of Nazool land in Plot No. 10, Ashok Marg, Hasratganj, Lucknow, under deed dated 7.10.1961 commencing from 15.11.1961 and stated to expire on 31.3.1991. The proceedings arose out of two matters. The first pertained to the legality of the Notice dated 19.11.1985 issued by the State Government in cancelling the lease. The cancellation was challenged in two writ-petitions filed separately by Sri D.P. Singh and Smt. Raj Lakshmi Devi in W.P. 6819 of 1985 and WP 367 of 1986 respectively. The High Court by its common order dated 8.12.1986 allowing the said two writpet....
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.... the LDA under Sec. 15(1) of the Act for permission to put up a multistoreyed building on the demised property. The permission was refused on the ground, inter alia, that the proposed construction would bring about a change in the user permitted under the lease. The lessees preferred an appeal before the Appellate Authority who dismissed their appeal. The RevisionPetition filed by the lessees before the Government under Sec. 41(1) of the Act was partly allowed and the Government by its order dated 15.10.1984, remitted the matter to the appropriate authority under the Act for a fresh consideration. On 31.3.1984, during the pendency of the revision-petition respondents submitted a modified plan, styling the construction as consisting of "residentialflats". After remand, the Nazool Officer is said to have given his "No objection Certificate" dated 2.12.1984 for the grant of permission. The power of attorney holder of respondents, a certain Sri Pawan Kumar Aggarwai, filed an . affidavit dated 28.12.1984 before the appropriate authority of the LDA in regard to their being no impediment under Urban Ceiling Laws and the manner in which the Lessees propose to comply with any order that may....
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....es and the Builders associated with the construction. It is necessary to excerpt some portion of that communication. "It has come to the notice of the Govt. that in obtaining the said permission the following illegalities, irregularities, material misrepresentation, fraudulent statements, concealments of material facts etc. appear to have been committed." Referring to the various alleged illegalities, and breaches of covenants and of violations of law which, according to Government, vitiated the grant of permission to build and also render the lease liable to forfeiture. The communication proceeded to direct the Chairman. "Therefore, the Governor is pleased to direct you to serve the enclosed show cause notice in the Maharani, Sri Singh and Builders and obtain their explanation within three days of the service of the notice, give them an opportunity of heating on the fourth day and submit your comments on the explanation along with your recommendations in the light of the above mentioned circumstances along with your report fixing the responsibility on the ViceChairman of the Lucknow Development Authority and Officers/Officials of the Nazul and building section latest by 28th Oc....
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....ed to the proposed action; but the Vice Chairman found the objections unacceptable and proceeded, by his order No. 363/VC/RBO/86 dated 19.4.1986, to cancel the permission. The operative portion of the said order dated 19.4.1985 reads: "From the above it is clear that the above irregularities, material mis-representation and fradulent statements have been made along with the building map-plan and other documents submitted by Sri D.P. Singh and he has deliberately concealed material facts and mislead the Authority. Therefore, the permission dated 31.1.1985 granted to him is being cancelled." The two Lessees challenged this cancellation before the High Court in two separate writ petitions filed by each of them in WP 68 19 of 1985 and WP 367 of 1986 respectively. 10. The High Court was persuaded to the view that the proceedings initiated and the action taken by the Government and the Vice-Chairman of the LDA in the matter, respectively, of forfeiture of the lease and the cancellation of the permission to build were both infirm in law and required, to be quashed. Accordingly, writ petitions 6819 of 1985 and WP 367 of 1986 were allowed and the order dated 19.11.1985 of the Government....
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....equires to be mandated against. 12. The show-cause notice preceding the cancellation of the lease and the decision dated 19.11.1985 to cancel the lease, refer to and rely upon 10 grounds. Grounds 1 to 7 pertain to what the Government consider to be violations and breaches of the terms and conditions of the lease. They pertain to an alleged change of user, to subletting and sub-division of the leasehold property. The grounds also refer to the alleged non disclosure of the terms and conditions of the Memorandum dated 7.7.1984 between the Lessees on the one hand and Messrs Amar Builders Private Limited on the other. The grounds for forfeiture also refer to the likelihood of fraud being practised on the prospective purchasers of the fiats as to the nature and extent of the lessees' subsisting interest under the lease and the limitations thereon. We do not propose to go into the merits of these grounds and their sufficiency in law to support the purported forfeiture as, in our view, this exercise, having regard to the disputed questions of fact that are required to be gone into in that behalf, are extraneous to proceedings under Article 226 of the Constitution. 13. In regard to the m....
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.... India and the rights in it cannot be bartered away in accordance with the sweet will of an Officer or a Minister or a Lt. Governor but they should be dealt with in accordance with law. At the same time a person who has acquired rights in such property cannot also be deprived of them except in accordance with law. The stakes in this case are very high for both the parties and neither of them can take law into his own hands." Accordingly, we hold that the question whether the purported forfeiture and cancellation of the lease were valid or not should not have been allowed to be agitated in proceedings under Article 226. 15. Sri Sorabjee submitted that great hardship and injustice would be occasioned to the respondents if the State Government, on the self-assumed and self-assessed validity of its own action of cancellation of the lease, attempts at and succeeds in, a resumption of possession extra-judicially by physical force. Sri Sorabjee referred to the notice dated 19.11.1985 in which the Government, according to Sri Sorabjee, had left no-one in doubt as to its intentions of resorting to an extra-judicial resumption of possession. Sri Sorabjee referred to paras 3.10 and 4 of the....
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....ancellation or forfeiture of the lease. Any developmental work that may be made by the lessees or at their instance would, of course, be at their own risk and shall be subject to the result of such proceedings. 17. We may now turn to the controversy of the cancellation or revocation dated 19.4.1986 of the permission earlier granted under section 15 of the "Act", which was the subject matter of writ petition No. 3463 of 1986. The order of revocation was passed by the successor Vice-Chairman, Shri Govindan Nair, IAS. The earlier permission was granted by the then Vice-Chairman, Shri Babu Ram. A show cause notice dated 9.1.1986 preceding the cancellation was issued by Vice-Chairman, Shri Govindan Nair himself. The order dated 19.4.1986 revoking the permission was challenged before the High Court on four grounds, viz., (a) that the lessees had had no reasonable opportunity of showing cause against the action proposed in the notice dated. 9.1.1986 and that an opportunity of an oral hearing had been denied; (b) that the Vice-Chairman, under the provisions of the Act had no authority or power to revoke a permission once granted; (c) that, at all events, the lessees having incurred enorm....
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....ny show cause notice to the petitioners. There is no other provision in the Development Act conferring powers on the Vice-Chairman to review the decision in the matter of sanctioning a plan to build. In the absence of any provision in the Act or any direction issued by the State Government, the ViceChairman had no jurisdiction or authority to reconsider the decision granting sanction to a plan i.e. permit to build after the same was acted upon and constructions were being made only in accordance with it." As to ground (d), the High Court examined the merits of each of the grounds and, in substance, came to the conclusion that the grounds were either irrelevant or, otherwise, insufficient in law to support the purported cancellation. The High Court held: "The above discussion shows that even though fraud, misrepresentation and concealment of facts etc. on the part of the petitioners having not been made out, yet such conclusions have been arrived at. The matter essentially hinged on the meaning and interpretation of the word 'Building' and instead of doing it in the right and correct perspectives, suspicion 'and presumptions have been made in arriving at the conclusions so arrived....
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....the power of cancellation which prejudically affects vested rights partake predominently of quasi-judicial complexion and where, as here, such power is resorted to at the behest of some-body extraneous to the power, there would be an abdication and surrender of the statutory discretion vitiating the decision. Sri Sorabjee said that the ViceChairman, even granting that he had power to cancel, acted at the behest of the Government which purported to Act under Section 41(1) issued directives on 12.8.1985 and on 15.10.1985 overriding the discretion of the Vice-Chairman. 21. To appreciate these contentions in their proper perspective it is necessary to notice the scheme of the Act in relation to the Regulation of Development in the "Development Area" under the Act. The preamble of the Act says: "In the developing areas of the State of Uttar Pradesh the problems of town planning and urban development need to be tackled resolutely. The existing local bodies and other authorities in spite of their best efforts have not been ableto cope with these problems to the desired extent. In order to bring about improvement in this situation, the State Government considered it advisable that in suc....
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.... Section 15(3) is a distinct statutory authority with statutory powers of his own distinct from the "Development Authority" which under section 4(2) is a body corporate having perpetual succession and common seal. Section 15(5) contemplates and enables an appeal to the Chairman against an order made by the Vice-Chairman refusing permission. Section 37, inter alia, makes an order of the ViceChairman made under Sec. 15 final. 22. Section 41(3) enables the State Government either on its own motion or on an application made to it in this behalf to call for the records of any case disposed of or order passed by the Authority or the Chairman for purposes of satisfying itself as to its legality or propriety and may pass such orders or issue such directions in relation thereto as it may think fit. It is relevant to note that an order made by an Vice-Chairman under Sec. 15(3) of the Act granting permission is not one of the orders revisable by Government under section 41(3). Such an order, under the scheme of the Act, is not also appealable but assumes a finality contemplated by Sec. 37. 23. Sec. 41(1) of the Act provides: "Control by State Government-The (Authority, the Chairman or th....
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....ancel the permission as incidental or supplemental to the power to grant. Otherwise the planitude of the power to regulate would be whittled down or even frustrated. It is erroneous to equate the powers under sections 14 and 15 of the Act with Judicial power which, in the absence of express provisions, could not enable the review of a judicial order after its exercise on the principle of Functus-Officio. In Sardul Singh v. The District Food and Supplies Controller, Patiala and Ors., in writ petition 126/ 1962 DD 19.12.1962 a statutory order, promulgated under sec 3 of the Essential Commodities Act, 1955, contained a provision enabling the cancellation of a 'permit' under certain circumstances. The contention was that section 3 of the parent 'Act' itself did not delegate to the subordinate legislative authority to make such a provision for cancellation and, therefore, the provision for cancellation in the subordinate legislature was ultra vires. There was no provision in the Act expressly conferring the power to make a provision for cancellation of the permit. Section 3(2)(d) of the parent Act merely enabled the government to make orders "for Regulating by licences, permits or other....
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.... principles of natural justice. The authority cannot permit its decision to be influenced by the dictation of others as this would amount to abdication and surrender of its discretion. It would then not be the Authority's discretion that is exercised, but someone else's. If an authority "hands over its discretion to another body it acts ultra vires". Such an interference by a person or body extraneous to the power would plainly be contrary to the nature of the power conferred upon the authority. De Smith sums up the position thus: "The relevant principles formulated by the courts may be broadly summarised as follows. The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, a discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case. In the purported exercise of its discretion it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. I....
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....6 and the cancellation order, dated 19.4.1986, are vitiated by a surrender of a discretion on the part of the Vice-Chairman cannot also be held to be well-founded. Sri Thakur's contention to the contrary on both these points would require to be accepted. 27. Now in the end, two more findings of the High Court remain to be considered, viz., on the Lessees' grievance of denial of reasonable opportunity of being heard and the validity and sufficiency of the alleged grounds to sustain the cancellation. We may consider the latter, first: 28. It not unoften happens that what appears to be a judicial review for breach of natural justice is, in reality, a review for abuse of discretion. It is true that amongst the many grounds' put forward in the show cause notice dated 19.1.1986, quite a few overlap each other and are distinguishable from those urged for the cancellation of the lease itself. Some of the grounds might, perhaps, be somewhat premature. Some of them even if true are so trivial that no authority could reasonably be expected to cancel the permission on that basis. For instance the ground that the permission was applied for and granted in the name of one only of the two lessee....