HIGH COURT OF JAMMU & KASHMIR AND LADAKH

AT JAMMU

OWP No. 135/2007

Reserved on : 30.05.2023

Pronounced on: 6 .09.2023

Shamsher Singh Manhas …. Petitioner (s)

Through:- Mr. Rahul Pant, Sr. Advocate

with Mr. S. H. Rather, Advocate

V/s

State of J&K and others …..Respondent(s)

Through:- Mr. Sachin Dogra, Advocate

CORAM: HON’BLE MRS. JUSTICE SINDHU SHARMA, JUDGE

JUDGMENT

01. The petitioner has assailed the order of cancellation of allotment of

Shop No. 5(B-2) situated at Lower Ground Floor, South Block, Bahu Plaza

Rail Head Complex, Jammu, vide order dated 15.02.2007, passed by the

Jammu Development Authority.

02. The Shop No. 5(B-2) measuring 605.62 Sq. ft. situated at Lower

Ground Floor, South Block, Bahu Plaza Rail Head Complex, Jammu, was

allotted to the petitioner pursuant to Advertisement Notice dated

22.02.2006 by the Jammu Development Authority vide order No.

JDA/BP/2276 dated 22.02.2006. The allotment of the aforesaid Shop was

made on the following conditions:

“i) To begin with the Shop/Hall shall be allotted to you on

lease hold basis for a period of 40 years.

ii) Balance premium of Rs. 16,88,000/- shall be charged in

remaining four monthly installment in the shape of

Bank Draft in the name of Vice Chairman, JDA as per

the schedule given below:-

a) 2

nd

installment of Rs. 4,22,000/- within 30 days

from the date of issuance of this letter. 2023:JKLHC-JMU:3927

OWP No. 135/2007 Page 2 of 7

b) 3

rd

installment of Rs. 4,22,000/- within 60 days

from the date of issuance of this letter.

c) 4

th

installment of Rs. 4,22,000/- within 90 days

from the date of issuance of this letter.

d) 5

th

installment of Rs. 4,22,000/- within 120 days

from the date of issuance of this letter.

iv) Delay in the payment of any installment shall attract

penal interest @ 18% p.a for a maximum period of three

months beyond which the delay shall empower the

authority to cancel the allotment and forfeit the first

installment.

v) In addition to payment of premium, a monthly rent @

Rs. 5/- per sft. shall be charged from the allottee. The

rate of rent shall be subject to a revision of minimum

10% after every three years. You shall procure the

rent/lease deed forms & return to this office after filling

it immediately after payment of last installment. The

handing over possession of the premises allotted to you

depends on expeditiously execution of the deed in the

court. The entire process must be completed with 30

days from the payment of last installment falling which

rent of the premises shall become payable even without

taking over the possession if the delay is not due to this

office.

Other terms and conditions shall be the same as

mentioned in NIT.”

03. The contention of the petitioner is that he was required to pay total

premium in five monthly installments of Rs. 4,22,000/- each. The first

installment was deposited by him within the stipulated period. The balance

installments were to be paid in four equal installments. The petitioner, after

deposit of the first installment, however, could not deposit the second

installment within time i.e., on or before 22.03.2006 due to circumstances

beyond his control. It is submitted that the petitioner could not do so as he

suffered serious setback in his business and also from a very serious health

ailment. It was after his recovery from the illness, he approached the

respondents for information about the allotment, when he was informed by the 2023:JKLHC-JMU:3927

OWP No. 135/2007 Page 3 of 7

Ministerial Staff that his allotment is being cancelled. Before the petitioner

could make a request for granting him sufficient time to deposit the

installment, the respondents cancelled his allotment and forfeited the first

installment vide order dated 15.02.2007. The Jammu Development Authority

vide impugned order dated 15.02.2007, cancelled the allotment on the ground

that the petitioner had discontinued payment of remaining installments and

violated the Clause (IV) of Letter of Intent (LOI)/Allotment Letter.

04. The contention of the petitioner is that he had deposited the earnest

money amounting to Rs. 4,22,000/- which was accepted by respondent No.

3 and he was willing to deposit the entire balance premium amount in one

installment but the respondent-Authority without considering the same has

cancelled his allotment vide impugned order dated 15.02.2007, and

premium paid for the first installment was also forfeited. The respondents

have cancelled his allotment and forfeited the first installment without

issuing any notice to the petitioner regarding deposit of the balance amount

or giving him any opportunity of being heard and, thus, violated the

principles of natural justice.

05. The respondents submit that the petitioner, in terms of Allotment

Order, was under an obligation to deposit the entire premium amount as per

the schedule of allotment, i.e., in five equal installments of Rs.4,22,000/.

The petitioner only deposited the first installment of Rs. 4,22,000/- and

thereafter discontinued the payment of remaining four installments and

failed to deposit the remaining amount even after 1½ years of the schedule

dates beyond the maximum period of three months, thus, defaulted in

payment of the installment and respondent-Authority was well within its

right to cancel the said allotment. 2023:JKLHC-JMU:3927

OWP No. 135/2007 Page 4 of 7

06. The terms and conditions of the Letter of Intent/Allotment clearly

provided that the petitioner was to deposit the entire amount, i.e., Rs.

21,10,000/- in five equal installments as per the schedule provided in the

same. Though, the petitioner deposited the earnest money within the

stipulated time but failed to deposit the 2

nd

, 3

rd

, 4

th

and 5

th

installments

which were to be deposited within 30, 60, 90 and 120 days from the date of

issuance of Letter Of Intent (LOI)/Allotment Letter dated 22.02.2006

which he failed to deposit.

07. Learned counsel for the petitioner has submitted that as per Clause

(IV), delay in payment of any installment would only attract penal interest

@ 18% per annum, therefore, the respondents should have charged penal

interest which he is willing to pay instead of cancelling his allotment. As

per Condition No. IV of the Allotment Letter, it is clearly stipulated that

delay in the payment of any installment would attract 18% penal interest

but the same is only for a maximum period of three months and delay

beyond this period shall empower the Authority to cancel the allotment and

forfeit the first installment. The petitioner admittedly has not deposited the

remaining four installments within the stipulated time of 120 days from the

date of allotment, i.e., 22.02.2006. The respondents, thus, were well within

their right to invoke this Clause and cancel the allotment as well as forfeit

the first installment.

08. It was next argued by the petitioner that he could not deposit the

remaining amount as he was not handed over the possession of the shop,

this argument too without any basis, as the allotment order clearly stated

that after the payment of the last installment, the handing over of the

possession of the allotted premises would depend on the expeditious 2023:JKLHC-JMU:3927

OWP No. 135/2007 Page 5 of 7

execution of the deed in the Court and the entire process must be completed

within 30 days from the payment of last installment.

09. The petitioner by his own admission has failed to pay the remaining

installments within 120 days from the date of issuance of letter of allotment

and also failed to complete the process, due to which, neither the Lease

Deed could be executed nor the premises could be handed over to him.

Since handing over of the possession of the premises/shop is specifically

mentioned in terms of Letter of Intent/Allotment and the same was to be

completed with 30 days from the payment of the last installment and as the

petitioner having failed to fulfill the terms of the Letter of Intent/Allotment,

therefore, he cannot turn around to take this plea.

10. In any case, the petitioner has woken up from slumber after more

than one and a half year and was ready to deposit the amount, that too, only

after the allotment made in his favour was cancelled.

11. The condition to deposit all the installments was a condition

precedent for execution of Lease Deed and possession. The petitioner

having defaulted the aforesaid condition, the respondents have rightly

invoked the condition of allotment and cancelled the same on the ground

that delay would empower the authority to cancel allotment and forfeit the

premium paid in one installment. It has been held by the Hon‟ble Apex

Court in ‘Skyline Contractors Pvt. Ltd. and another Vs. State Of U.P.

and others’, (2008 (8) SC 265), that „in case a allottee fails to deposit the

installment as per the terms and conditions of the allotment letter, then the

authority is entitled to cancel the allotment.‟ 2023:JKLHC-JMU:3927

OWP No. 135/2007 Page 6 of 7

12. The Hon‟ble Supreme Court, while considering a similar proposition

in ‘Paulmech Infrastructure Pvt. Ltd. vs. State of Odisha and others’,

AIR 2021 SC 4840, has held as under:

“18. Keeping these aspects in view, having noted that the appellant had

failed to adhere to the terms indicated in the LOI dated 19.01.2010 and the

payment required there under not being made even within the extended

period, the Board of Directors of UAHCL were justified in deciding to

terminate the LOI through their letter dated 10.12.2013. In fact, the prayer

no. 3 seeking calculation of interest on the amount deposited and such

amount is being sought to be adjusted towards the balance payments would

in itself indicate that even to the knowledge of the appellant, the entire

payments had not been made even as on the date of the filing the writ

petition. In such circumstance, when the LOI has been rightly terminated,

the directions sought in the writ petition to execute the lease agreement

pertaining to ‘Hotel Nilanchal Ashok Puri’ does not arise and the prayers in

that regard are liable to be rejected.

19. Having arrived at the above conclusion, the next aspect which would

engage our attention is as to the manner in which the amount paid by the

appellant is to be treated. The learned counsel for UAHCL would contend

that the LOI provides that the one­time upfront amount to be paid is

non­refundable, in that view, it is contended that the said amount is not

liable to be refunded. Even otherwise due to the delay caused by the

appellant and having obtained the status quo order from the court by

litigating with regard to the subject matter UAHCL have been prevented

from otherwise utilizing the property which has caused loss to them and the

said amount would be adjustable towards the same is his contention.”

13. The only other contention of the petitioner is that no opportunity of

hearing was provided to him before cancellation of the allotment. The

terms and conditions of the Letter of Allotment are clear and cogent, the

delay in payment beyond the maximum period of three months would

empower the authority to cancel the allotment and forfeit the first

installment. The respondents have cancelled in terms of Letter of 2023:JKLHC-JMU:3927

OWP No. 135/2007 Page 7 of 7

Allotment. The petitioner having failed to fulfill the conditions of the Letter

of Allotment, therefore, the authority rightly acted in accordance with the

allotment letter, which did not provide for any notice to be given to the

petitioner before cancellation of the allotment. This apart, even otherwise,

if on undisputed and admitted fact, if only one view is possible, then even

if no opportunity of hearing is provided, the impugned notice can be

quashed.

14. In “Aligarh Muslim University Vs. Mansoor Ali Khan”, (2000) 7

SCC 529, it has been held that: -

“23. Chinnappa Reddy, J. in S.L.Kapoor's case, laid two

exceptions (at p.395) namely, " if upon admitted or indisputable

facts only one conclusion was possible", then in such a case, the

principle that breach of natural justice was in itself prejudice,

would not apply. In other words if no other conclusion was

possible on admitted or indisputable facts, it is not necessary to

quash the order which was passed in violation of natural justice.

Of course, this being an exception, great care must be taken in

applying this exception.”

15. In view of the aforesaid facts and circumstances, there is no merit in this

petition and the same is, accordingly, dismissed along with connected

application(s).

(Sindhu Sharma)

Judge

Jammu:

06.09.2023

Ram Murti/P.S

Whether the order is speaking : Yes

Whether the order is reportable : Yes

2023:JKLHC-JMU:3927