Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 5698-5699 OF 2009

State of Punjab and Others …….Appellants

Versus

Dhanjit Singh Sandhu …..Respondent

JUDGMENT

M.Y. EQBAL, J.:

1.These appeals are directed against the judgment and

order dated 8.1.2009 passed by the Punjab & Haryana High

Court in C.W.P. No.8864 of 2007 and also order dated

27.3.2009 passed in Review Petition No. 112 of 2009,

whereby the writ petition filed by the respondent was

allowed and the order dated 23.12.2004 passed by

appellant no.3 rejecting the application for refund of the

extension fee received by the appellant in excess of the

Page 2 rates mentioned in Rule 13 of the Punjab Regional and Town

Planning and Development Act, 1995 (in short ‘1995 Act’) in

the light of the judgment passed in C.W.P. No.13648 of 1998

(Tehal Singh vs. State of Punjab & Ors. ) along with up-

to-date interest has been set aside.

2. The facts of the case lie in a narrow compass.

3. The respondent was allotted a plot of land measuring

400 square yards bearing No.2177 at Durgi Road, Urban

Estate Phase-II, Ludhiana vide allotment letter dated

1.4.1986. In terms of allotment, the respondent was

required to complete the construction of building within

three years from the date of issuance of the allotment letter

after getting the plans of the proposed building approved by

the competent Authority. The case of the respondent-writ

petitioner is that there was no condition in the allotment

letter for charging extension fee in the case of failure to

complete construction of the building within the

aforementioned period of three years nevertheless as per

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Page 3 clause 15 of the allotment letter, the allotment was subject

to the provisions of Punjab Estates (Development and

Regulation Act), 1964 and the Rules and Policies framed

thereunder.

4.It appears that in the year 1995, the State of Punjab

came with the legislation known as Punjab Regional and

Town Planning and Development Act, 1995 (in short ‘PUDA

Act’). By the said Act, the Punjab Urban Estate

(Development and Regulation) Act 1964 (in short ‘1964 Act’)

and Punjab Housing Development Board Act, 1972 were

repealed. In exercise of power conferred under the Act, the

State Government framed rules called the Punjab Regional

and Town Planning and Development (General) Rules 1995

(in short ‘1995 Rules’) which was published vide Notification

dated 22

nd

August, 1995. Rule 13 of the Rules specified the

time within which the building is to be constructed. It also

provides for extension of time limit subject to payment of

prescribed fee mentioned therein.

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Page 4 5. The Punjab Urban Planning and Development Authority

(in short ‘PUDA’) issued a circular dated 15.1.1998 revising

the rate of extension fee chargeable for the residential and

commercial plots and by the said circular a very high rate of

extension fee was proposed to be charged. The respondent

from time to time deposited the extension fee so demanded

by the appellant. It is alleged that an amount of Rs.1.20 lacs

has been in excess charged from the respondent. The

appellant’s case is that the appellant in an attempt to nullify

the effect of the judgment rendered in Tehal Singh’s case

and to validate the demand of enhanced rate of extension

fee purportedly framed the Rules called Punjab Regional and

Town Planning and Development (General) Second

Amendment Rules, 2001 (in short ‘2001 Rules’) giving

retrospective effect.

6.The respondent moved a writ petition being C.W.P. No.

7934 of 2004 praying inter alia for the directions to refund

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Page 5 the excess fee charged from the respondent. It was

disposed of with the directions to the appellant to reconsider

the representation and to dispose of the same in the light of

the order passed in C.W.P. No.13648 of 1998 (Tehal Singh’s

case). In compliance with the aforesaid directions, the

respondent’s representation was considered and came to be

rejected by the appellant vide order dated 23.12.2004 on the

ground that in the facts and circumstances of the case the

instant case was not similar to Tehal Singh’s case.

7. The writ petition was finally heard by the Punjab and

Haryana High Court and relying on the ratio decided in Tehal

Sing’s case (supra) disposed of the writ petition, quashed the

notice and directed the appellant to calculate the extension

fee as per Rule 13 of 1995 Rules. For better appreciation,

the concluding paragraphs 15 to 17 of the impugned order

are quoted hereinbelow:-

“15. When the facts of the present case are examined in

the light of the principle laid down by the Division Bench

judgment in Tehal Singh’s case (supra), we are left with

no doubt that the show cause notices issued to the

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Page 6 petitioner on 19.9.2006 (P-4) and 12.12.2006 {P-7}

requiring him to pay extension fee of Rs. 1,32,958/- was

violative of the provisions of the 1995 Act and Rule 13

of the 1995 Rules, as has already been noticed in the

preceding paras. The controversy, in fact, stand settled

by the Division Bench judgment in Tehal Singh's case

(supra) and the issue does not deserve to be reopened.

The respondents have failed to consider the reply filed

by the petitioner wherein judgment rendered by the

Division Bench in Tehal Singh's case (supra) has been

cited and the charging of extension fee at exorbitant

rate has been duly answered.

16. In view of above, the writ petition

succeeds. The impugned notice dated

12.12.2006 (P-7) is hereby quashed. The

respondents are directed to calculate the

extension fee as per Rule 13 of the 1995 Rules.

The needful shall be done within a period of

two months from the date of receipt of a

certified copy of this order. The petitioner shall

pay the extension fee within a period of two

months from the date of receipt of the

calculation given in the fresh notice to be

issued by the respondents. The petitioner shall

further be entitled to consequential benefit to

get the site plans approved. The petitioner is

also held entitled to his costs.

17. The other connected writ petitions are also

disposed of in the above terms. It is, however,

clarified that in cases such as C.W.P. Nos. 8864

and 13765 of 2007, where the petitioners have

already paid the extension fee as per the rates

demanded by the respondents, which are

exorbitant and against the Division Bench

judgment of this Court in Tehal Singh's case,

the respondents are directed to re-calculate

the amount of extension fee as per the

provisions of Rule 13 of the Rules and refund

the over-payment alongwith interest 10% per

annum.”

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Page 7 8. We have heard Mrs. Rachna Joshi Issar, learned counsel

appearing for the appellant.

9. As noticed above, the plot in question was allotted to

the respondent vide an allotment letter dated 1.4.1986. In

terms of the allotment letter, the allottee had to fulfill the

terms and conditions enumerated in the said letter. The

terms and conditions of the said allotment are extracted

hereinbelow:-

“1. Plot No. 2177 Phase-II measuring 400 sq. yds. in

Durgri Rd. Urban Estate has been allotted to you.

The tentative price of the said plot is Rs. 51,000/-

2. The plot is preferential one and additional price

at the rate of 10% of the original normal price is Rs.

_____________________________________________________

3. Total price of the plot (normal) plus preferential

is Rs. 51,000/-

4. The above price of the plot is subject to

variation with reference to the actual measurement

of the site as well as in cost of enhancement of

compensation by the court or otherwise and you

shall have to pay the additional price of the plot if

any, determined by the department, within 30 days

of the date of demand of in case of sale by

allotment.

5. You shall have to convey your

acceptance/refusal unless you refuse to accept the

allotment by a registered A/D letter within 30 days

of the issue of this allotment order and have to pay

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Page 8 15% of the sale price amounting of Rs. 4750/- or

such other amount with together with the amount

already paid equal to at least 25% of the sale price

of the site. In case of failure to deposit the sale

amount the allotment shall be liable to be

cancelled and earnest money already paid

forfeited.

6. In case you refuse to accept the allotment

through acknowledgment due registered letter

addressed to the undersigned within 30 days of the

date of issue of allotment order. You will be entitled

to the refund of the earnest money

7. On payment of 100% of the purchase price of

the plot you shall have to execute in deed of

conveyance in the prescribed from in such manner

as may be directed by the Estate Officer.

8. Balance 7.5% of the purchase price shall be

payable either lump-sum within 60 days of the

issue of allotment order without any interest or in

four 2 six monthly equated instalment alongwith

interest at the rate of 7% per annum The first

installment shall fall due after the expiry of six

months from the date of issue of allotment order

and shall be payable on the 10

th

of the month

following in which it falls due.

9. Each remittance shall be remitted to the Estate

Officer by means of demand draft payable to him

drawn on any Scheduled Bank situated at the

nearest place to the Estate Officer. Each such

remittance shall be accompanied by a letter

showing particulars of the site i.e. plot No.

allotment No. and date of issue of allotment order

etc. In the absence of these particulars, the amount

shall not deem to have been received.

10. You shall have to pay separately for any

building

material trees, structures and compound wall etc.

existing in the plot at the time of allotment for

which

compensation has been assessed and paid by the

Government in x case you want to make use of the

same, failing which the government shall have the

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Page 9 right remove or dispose of the same even after the

delivery of possession.

11.The allotment shall be liable to cancellation

in case of the declaration made in the application

for the allotment of the plot is established to be

incorrect.

12. You shall have to complete the building within

three years from the date of issue of allotment

order, after getting the plans of the proposed

building approved by the competent authority.

13 The Government shall not be responsible for

leveling the uneven sites.

14. No allottee under this policy shall dispose of his

plot for period of ten years from the date of

transfer of the ownership to him. However the

transfer of residential plot in the Urban Estate shall

be allowed to be made in case of death of the

allottee in favour of his hairs.

However, the transfer can be allowed before the

expiry of ten years, in exceptional cases, with the

prior approval of the Government. In case an

allottee contravenes provisions of this para, the

plot will be resumed and price paid may be

forfeited by the Government.

15. The allotment is subject to the provision of the

Punjab Urban Estates (Development & Regulation)

Act, 1964 and rules and policy framed thereunder

as amended from time to time and you shall have

to accept and abide by the provision of the Act/

Rules/ policy. “

10. Further, it is clear that the allotment of the plot was

subject to the provisions contained in the 1964 Act. Section

10 of the Act envisages provision for resumption and

forfeiture of the land in case of breach of conditions of

allotment. Section 10 reads as under:-

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Page 10 “10. Resumption and forfeiture for breach of

conditions of transfer.- (i) If any transferee has

failed to pay the consideration money or

any installment thereof on account of the sale of

any site or building, or both, under section 3, or

has committed a breach of any other condition

of such sale, the Estate Officer may, by notice in

writing, call upon the transferee to show cause

why an order of resumption of the site or

building, or both, as the case may be,

and forfeiture of the whole or any part of the

money, if any, paid in respect thereof (which

in no case shall exceed ten per cent of the total

amount of the consideration money, interest

and other dues payable in respect of the sale of

the site or building, or both) should not be

made".

11. In exercise of power conferred by 1964 Act, Rules were

framed in the year 1965 i.e. Punjab Urban Estate

(Development and Regulation) Rules, 1964. Rule 14 of the

said Rules categorically provided that the transferee shall

complete the building within three years from the date of

issue of the allotment letter. In accordance with the Rules

and Regulations of erection of the building, the time limit

may be extended by the Estate Officer if he is satisfied that

failure to complete the construction of the building within

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Page 11 the said period was due to the reasons beyond the control of

the allottee.

12. Since the respondent-allottee failed to abide by the

terms and conditions and did not raise construction, he was

liable to pay non-construction fee/extension fee which was

demanded from him in order to enable him to avoid

resumption of the plot to the appellant-authority. The

aforesaid demand was made by letters dated 6.1.1997 and

27.10.1999. The said letter dated 6.1.1997 is extracted

hereinbelow:-

“PUNJAB URBAN, PLANNING DEVELOPMENT

AUTHOR, SECTOR -32, SAMARALA ROAD, PUDA

COMPLEX, LUDHIANA REGISTERED

To,

D.S. Sandhu Superintending Engineer (PWD)

Office of the Chief Engineer, PWD B&R, Patna

No. PUDA/E.O./Ludhiana (Endst. No.

2177)96/34478 Dated 06.01.97,

Sub: Regarding payment of balance installment

resumption of plot of Urban Estate D Road,

Sector/ Phase-II at Ludhiana, residential/

commercial plot no. 2177. area 400.

With regard to the above subject.

2.Res. 26712/- the detail of which is given below

is recoverable from you as balance of

residential/commercial plot No. 2177, Urban

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Page 12 Estate, D road, Sector/Phase-II, at Ludhiana.

Therefore, deposit a bank draft of this amount

alongwith 18%interest per annum which should

be in favour of Estate Officer, PUDA, Ludhiana

and may be payable at any scheduled bank

upto 31.01.97 in all circumstances and appear

before the undersigned on the date at 11.00

a.m. in case of failure to do so, action would be

initiated for resumption of allotment of plot

under the conditions of allotment and under

Punjab Regional and Town Planning and

Development Act, 1995 and the rules made

thereunder and no other opportunity would be

given to you.

1............amount of balance installments.

2. amount of enhanced compensation

3. extension fee 26712/-

4. interest

5. penalty

Total 26712

Sd/- Estate Officer In

English PUDA,

Ludhiana.”

13. In response to the aforesaid letter dated 6.1.1997, the

respondent agreed to pay the extension fee imposed by the

Estate Officer of the appellant authority in order to avoid

resumption/auction of the plot.

14. Meanwhile, the State of Punjab enacted Punjab

Regional and Town Planning and Development Act, 1995.

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Page 13 Rules were also framed under the said Act. By Section 183

of 1995 Act, earlier Act of 1964 and Punjab Housing

Development Board Act, 1972 were repealed with the saving

clause.

15.Subsequent to the aforesaid Act, by Notification dated

30.6.1995, Punjab Urban Development Authority was

established w.e.f. 1.7.1995 and the Board stood abolished

with effect from that date. Many other Acts were also

repealed. By the said Act Authority was empowered to deal

with the land and prescribe the fee in case where extension

of period for completion of building is set for by the allottee.

16.Since the High Court passed the impugned order

following the decision rendered by the Punjab & Haryana

High Court in Tehal Singh’s case, it would be proper to

refer the facts of that case.

17. In Tehal Singh vs. State of Punjab and Ors . (C.W.P.

No.13648 of 1998), the petitioner filed the writ petition

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Page 14 seeking a writ for quashing certain letters demanding

extension fee and striking down condition No.19 of allotment

letter, insofar as it relates to the charging of separate

extension fee for non completion of construction of building.

Further mandamus was sought for directing the respondents

to charge extension fee from the petitioner under the

provisions of Rule 13 of 1995 Rules. The High Court after

referring various provisions of 1995 Acts and Rules made

thereunder observed as under:-

“A conjoint reading of the various provisions of the 1995

Act and the 1995 Rules shows that the transfer of land

under sub-section (1) of Section 43 is not only subject to

the directions which may be given by the State

Government under the 1995 Act but also the conditions

which may be prescribed with regard to completion of

building of part thereof and with regard to extension of

period for such completion and payment of fee for such

extension. A perusal of rule 13 of the 1995 Rules along

with Section 180 (2) (i) and Section 2 (zc) of the 1995

Act shows that the time within which the building is to

be completed and other related matters are governed by

the 1995 Rules. Therefore, with the coming into force of

these Rules, the rates of extension fee prescribed by the

Board stood superseded and in terms of sub-rule (2) of

Rule 13 of the 1995 Rules, the petitioners became

eligible to seek extension of the specified time limit

subject to payment of the fee prescribed under sub-rule

(3) of Rule 13.”

18. The Court further came to the following conclusions:-

“We have thoughtfully considered the

respective submissions. In our opinion, Shri

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Page 15 Malhotra’s contention on the issue of

applicability of the 1995 Act to the plots

allotted to the petitioners is clearly wide of the

margin. A bare reading of the plain language of

sub-section (4)of Section 183 of the 1995 Act

makes it clear that the allotment of Section

183 of the 1995 Act makes it clear that the

allotment made by the erstwhile Board will be

deemed to have been made under the 1995

Act. Therefore, the construction of the building

will have to be regulated by the conditions of

allotment read with Rule 13 of the 1995 Rules.

As a logical corollary, the extension of the time

limit specified in the letter of allotment will also

be governed by the provisions of the 1995

Rules and the petitioners are entitled to seek

extension of the time limit by paying the fee

prescribed under Rule 13”.

19.Consequently the Court declared the notices

demanding enhanced extension fee as illegal and ultra vires

to the provisions of 1995 Act under the Rules made

thereunder.

20.It is worth to mention here that the aforesaid judgment

rendered in Tehal Singh’s case was challenged before the

Supreme Court in S.L.P. No.18500-18501 of 1999 and was

dismissed on 10.11.2000, but the said order of dismissal was

1

Page 16 modified by the Supreme Court by order dated 12.2.2001 in

the following terms.

“In the facts and circumstances of the case the

order does not warrant in any interference of

this Court. The appeals are accordingly

dismissed.”

21.As noticed above, the facts are quite different from the

facts in Tehal Singh’s case. In the instant case, the

respondents-allottees accepted the terms and conditions of

the allotment letter and possession were taken but they did

not raise any construction upto 2000. There was a specific

condition that non-construction of building would lead to the

resumption of the said plot under the provisions of the Acts

and the Rules. As noticed above, when the allottees did not

raise construction on the plot, the demand was raised for

payment of non-construction fee/extension fee in order to

avoid resumption of the plot by the Authority, allottee paid

the extension fee. After availing the benefit of extension on

payment of extension fee, the allottee sent a letter to the

Estate Officer demanding refund of the extension fee on the

1

Page 17 basis of amended Rule 13 of 1995 Rules. The said demand

was rejected by the Estate Officer by passing the reasoned

order in compliance of the directions of the High Court. In

the facts of the instant case, we have no doubt in our mind

in holding that the ratio decided in Tehal Singh’s case will

not apply in the instant case. In our considered opinion

defaulting allottes of valuable plots cannot be allowed to

approbate and reprobate by first agreeing to abide by terms

and conditions of allotment and later seeking to deny their

liability as per the agreed terms.

22. The doctrine of “approbate and reprobate” is only a

species of estoppel, it implies only to the conduct of parties.

As in the case of estoppel it cannot operate against the

provisions of a statute. (vide C.I.T. vs. Mr. P. Firm Maur,

AIR 1965 SC 1216).

It is settled proposition of law that once an order has

been passed, it is complied with, accepted by the other party

and derived the benefit out of it, he cannot challenge it on

1

Page 18 any ground. (Vide Maharashtra State Road Transport

Corporation vs. Balwant Regular Motor Service,

Amravati & Ors., AIR 1969 SC 329). In R.N. Gosain vs.

Yashpal Dhir, AIR 1993 SC 352, this Court has observed as

under:–

“Law does not permit a person to both

approbate and reprobate. This principle is

based on the doctrine of election which

postulates that no party can accept and reject

the same instrument and that “a person cannot

say at one time that a transaction is valid and

thereby obtain some advantage, to which he

could only be entitled on the footing that it is

valid, and then turn round and say it is void for

the purpose of securing some other

advantage.”

23. This Court in Sri Babu Ram Alias Durga Prasad vs.

Sri Indra Pal Singh (Dead) by Lrs., AIR 1998 SC 3021,

and P.R. Deshpande vs. Maruti Balram Haibatti , AIR

1998 SC 2979, the Supreme Court has observed that the

doctrine of election is based on the rule of estoppel- the

principle that one cannot approbate and reprobate inheres in

it. The doctrine of estoppel by election is one of the species

1

Page 19 of estoppel in pais (or equitable estoppel), which is a rule in

equity. By that law, a person may be precluded by his

actions or conduct or silence when it is his duty to speak,

from asserting a right which he otherwise would have had.

24. The Supreme Court in The Rajasthan State Industrial

Development and Investment Corporation and Anr.

vs. Diamond and Gem Development Corporation Ltd.

and Anr., AIR 2013 SC 1241, made an observation that a

party cannot be permitted to “blow hot and cold”, “fast and

loose” or “approbate and reprobate”. Where one knowingly

accepts the benefits of a contract or conveyance or an order,

is estopped to deny the validity or binding effect on him of

such contract or conveyance or order. This rule is applied to

do equity, however, it must not be applied in a manner as to

violate the principles of right and good conscience.

25. It is evident that the doctrine of election is based on the

rule of estoppel the principle that one cannot approbate and

1

Page 20 reprobate is inherent in it. The doctrine of estoppel by

election is one among the species of estoppel in pais (or

equitable estoppel), which is a rule of equity. By this law, a

person may be precluded, by way of his actions, or conduct,

or silence when it is his duty to speak, from asserting a right

which he would have otherwise had.

26.Be that as it may, so far as the instant case is

concerned, the High Court has totally overlooked the facts of

the present case and allowed the writ petition. The

impugned order, therefore, cannot be sustained in law and is

hereby set aside. The appeals are accordingly allowed.

However, in the facts of the case, there shall be no order as

to costs.

………………………… ...J.

(Dr. B.S. Chauhan)

…………………………… .J.

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Page 21 (M.Y. Eqbal)

New Delhi,

March 14, 2014.

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