Noida Management System Private Limited Vs. New Okhla Industrial Development Authority Through Its Chairman and C.E.O. and Another - Court Judgment

Excerpt:

Judgment:

1. Bhanwar Singh, President - Heard Sri Deepak Mehrotra, learned counsel for the complainant and Sri Rajneesh Kumar, learned counsel for the opposite parties. Also perused the record.

2. This complaint has been filed by NOIDA Management System Private Lim­ited against the opposite parties namely New Okhla Industrial Development Au­thority and. Industrial Development Com­missioner, State of U.P. praying for a direc­tion to the Chairman and Commissioner of the above mentioned authorities respec­tively to deliver factual possession of plot no.B-007, Sector 68Noida free from all encroachments or in the alternative to allot another site of the some size to the complainant. Further interest @ 18% p.a. on the amount deposited by the complainant has been claimed on the basis of plea that the complainant has not yet been able to derive advantage out of the allotted plot on account of encroachment over it. A compensation for Rs.10,00,000/- has further been asked for on account of the physical and mental harass­ment of the complainant's authorities. Since the complainant has not been able to com­mence with its project over the commercial plot allotted to it, extension for time granted to complete the construction has also been prayed for.

3.The facts, in brief, leading to this com­plaint may be narrated as below:-

4. The complainant company, having its registered office at B-65 Gurunanak Pura, Lakshmi Nagar, New Delhi applied for al­lotment of a plot of 4000 Square meters in Industrial Area, Phase 3 of New Okhla. In­dustrial Development Authority (NOIDA for short) vide its application dated 18.09.2006 and deposited Rs.20,00,000/- as registration money. It was allotted plot no.B-007, Sec­tor 68 admeasuring 4000 square meters by means of allotment letter dated 08.01.2007. A sum of Rs.25,90,000/- as allotment money, asked for, vide allotment letter was depos­ited well in time. Before the lease deed would be executed by the NOIDA the complainant's Manager inspected the site and discovered that the land allotted to the complainant along with other allotments done in the adjoining area was encroached upon by the villagers. The complainant re­quested the senior officials of the NOIDA on a number of occasions to hand over the possession of the plot to the complainant free from encroachment and encumbrances. A valid assurance was extended to the com­plainant by the Chief Executive. Officer (CEO for short) and the Deputy CEO. On 02.01.2008 the complainant wrote a letter to the CEO of the Authority asking for hand­ing over the possession of the plot and also lease deed in its favour was sought to be executed. Inspite of the facts that all the formalities had been observed by the com­plainant, the CEO did not accede to the re­quest of the complainant. With the passage of time an installment had become due and the complainant honestly discharged its duty by depositing Rs.16,26,050/- on 27.5.2008. The complainant on being asked deposited the lease rent amounting to Rs.3,82,500/-. Then on 30.5.2008. i.e. after along delay, of about 18 months lease deed was executed by the NOIDA officials in favour of the complainant. On 5.6.2008 the complainant was asked to take possession of the above mentioned plot as by then the Authority was able to get some encroach­ments removed from the site. The Author­ity also assured the complainant for taking effective steps to remove the remaining en­croachments. The complainant took possession of the plot with the understanding that the Authority will support the complainant if there is further encroachment by the villagers of that area. The Authority instructed the complainant that it should immediately start with the construction of the boundary wall around the plot so that the villagers were not able to interfere with its posses­sion. Following the instructions of the au­thorities of the NOIDA, the complainant; immediately started with the construction of the boundary wall but it had to face a lot of opposition from the local villagers. It was barely able to raise some construction in presence of the officials of the company but these officials as Well as the complainant's workers present at the site to start construc­tion were threatened by the villagers and anti social elements. They were abused and manhandled by the villagers. In this back ground the complainant wrote a letter on 11.8.2008 to the CEO NOIDA with copies to SSP NOIDA and SHO of the Police Station Sector 58 - NOIDA to intervene and take legal action against these people and also provide police protection to the work­ers and further make adequate security ar­rangements so that the construction work can be resumed. However, the CEO did not provide any help nor adequate security was arranged for. The CEO advised the complainant's Manager to stop the construc­tion for tile time being and he assured that either the encroachment would be removed soon or he will be allotted an alternative site. In the meantime two half yearly installments had fallen due and one of them for Rs.10,45,000/- was deposited by the complainant on 23.8.2008 and the other for Rs.10,47,656/- on 28.2.2009.

5. The complainant then wrote one more letter on 01.03.2009 requesting for peace­ful possession of the plot free from all en­cumbrances but with no result. Helpless management of the complainant in the se­quence of request after request wrote two more letters on 20.8.2009 and 3.02.2010 to the CEO, NOIDA repeating its request for alternative site. Although assurance was given for allotment of an alternative site with a farther assurance to extend the time limit prescribed for construction but noth­ing concrete happened until this complaint was filed on March 10,2010.

6. The complainant alleged that the op­posite parties were guilty of deficiency in service by not providing peaceful and en­croachment free possession to the complain­ant even after a lapse of 2-1/2 years. The dereliction towards its duty was termed to be an unfair trade practice. In the mean­time the other industrial schemes were floated in Phase 2 and 3 in NOIDA. The com­plainant requested for allotment of alterna­tive site in the then floated schemes but its request was not acceded to. The complain­ant was thus obliged to file this complaint for a direction to the Authority to fetch for it peaceful possession over the plot in ques­tion or allot an alternative site.

7. The opposite party no.1 filed its writ­ten statement on 20.4.2010 and simply alleged that it now owes no obligation towards the complainant as it has already handed over possession of the plot to the complain­ant on 05.06.2008. It was denied that any assurance was ever promised to the com­plainant. As a matter of fact it was the re­sponsibility of the complainant to protect its possession over the plot after 05.06.2008 and it was the complainant alone to be un­der obligation to take effective steps to pre­vent undue encroachments. If the complain­ant failed in its obligation, the Authority cannot be held responsible.

8. The opposite party no.2 did not ap­pear nor filed any written statement. The complaint thus proceeded ex parte against the said opposite party.

9. The crucial question which would arise for our determination is as to whether the complainant is entitled for the relief of pos­session i.e. possession over the plot allotted to it and in the alternative for allotment of another site.

10. There is no dispute that the plot no.B007 Sector 68 area 4000 square meters was allotted to the complainant and a valid lease deed was executed on 30.5.2008 in favour of the complainant. Also it is admitted to the NOIDA that a total sum of Rs.86,90,715/- -has been deposited as part of the plot's price with the Development Authority. No doubt the complainant admitted that after execu­tion of the lease deed on 30.5.2008 a deed of possession was executed oh 05.06.2008 by virtue of which the complainant was inducted into possession of the aforesaid plot but the complainant's plea now being pressed into service is that it was a mere paper transaction and virtually a formality resulting in a total chaos. Thereafter in this context it is noteworthy that chaotic condi­tions started right from very beginning of the allotment on 08.01.2007. The land was not free from encroachments even at that juncture. Inspite of the fact, that a sum of Rs.20,00,000/- as registration money and another sum of Rs.25,90,000/- as allotment money had been deposited, the matter re­garding execution of the lease deed could not be materialized. The complainant wrote to Noida officials two letters dated 13.5.2007 and 02.01.2008 asking for possession and execution of the lease deed but nothing hap­pened for a period of 18 months. The com­plainant however, kept on discharging its obligation of depositing its half yearly installments. The complainant admits that the deed of possession on 05.06.2008 was executed in his presence but it was of no avail as when it had on being instructed by the NOIDA officials, made an attempt to raise boundary wall of the plot, its workers were threatened by the villagers. They had threatened the complainant's office bearers, its workers and also the officials of the NOIDA. The complainant being scared of the villagers nuisance lodged a complaint with the S.S.P. Noida on 11.08.2008 and asked for protection of its possession but the SSP did not take any effective steps. Al­though a squad of 4-5 constables visited the site but the villagers kept on mounting their pressure and succeeded in scaring away the complainant's authorities, its workers and the officials of the Development Authority. A copy of this letter was sent to the CEO NOIDA. The letter is self speaking. For a clear picture at the site it may be quoted as below:-

To,

The CEO,

Dated 11 August 2008 NOIDA

Sir,

Our Company NOIDA Management System Private Limited has been al­lotted plot no. B-7 in sector 68 by the NOIDA authority. The lease deed has been executed in the name of our com­pany by the NOIDA authority and after the execution of the same we had started building the boundary wall of the above mentioned plot 15 days back.

Ever since we have started building the boundary wall of the plot some people from the nearby village have been creating nuisance and have been threatening us and bur workers that we should stop the work and leave the place. We had sought security from the SSP, NOIDA on an earlier occasion when the PAC constables were de­puted at the site and the boundary work continued.

On 9 August 2008 at around 11 pm around 25-30 people from the adjoin­ing village came and surrounded the huts of our workers. These workers are living on the plot allotted to our com­pany and stay there at night and work in the morning. These 25-30 people mostly belonging to the village adjoin­ing our plot tied the hands and feet of our workers and took their mobile sothat they are not able to make any phone calls to inform the police and us. These 30 odd nuisance makers thrashed our workers and threatened them to leave the work and go and warned them that if they continue with the work they will be killed by them.

After this they went ahead and damaged the boundary wall of our plot and brought it down illegally. I had con­tacted SHO, Sector 58 NOIDA yester­day and some constables had visited the site. These people are still threat­ening and beating up our workers and therefore we require adequate protec­tion at the site so that we can complete the construction of the boundary wall. Also kindly take legal action against these persons for threatening to kill our workers and for demolishing and damaging our property.

Sincerely,

Manager

NOIDA Management System Pvt. Ltd.

11. A careful perusal of this letter would reveal that the so called theory regarding delivery of possession to the complainant on 05.06.2008 was absolutely demolished by the unruly villagers. These villagers had tied the hands and feet of the workers gath­ered at the site to raise construction of the boundary wall and also manhandled them. The villagers took mobiles of the workers so as to restrain them from passing out any information of their nuisance. Also the workers were thrashed out and threatened of dire consequences and they were forced to leave the site. If the NOIDA would ad­dress this kind of possession and then shrug off their shoulders of its liability by merely relying upon the paper transaction, then one has to be at his utter shock and dismay. The NOIDA has to ensure that the possession of its allottees is protected from the nuisance of villagers as after all it receives huge price with some installments due as per schedule. In the case of the complainant it has been alleged that mischief mongers gathered at the site of the plot on the day one when it had started raising construction of the boundary wall and did all sorts of mischief as narrated above. In other words the unruly elements never permitted the com­plainant to enter into peaceful possession pf the plot allotted to it. The only occasion for the complainant to enter into physical possession was at the time when it had made an endeavour to raise the boundary wall through its workers but the villagers gave a tough resistance and by beating the workers and labourers showed their might and succeeded to make them run away. Had it been a building—house or commercial or institutional with the complainant being inducted into its possession with lock and keys the position, somehow, could be said to be different but in the case of an open site, execution of possession letter dated 05.06.2008 was nothing but a mere formal­ity. The contention of the learned counsel for the NOIDA that the complainant's au­thorized signatory while signing the paper of possession agreed that the site was free from all encroachments is of no avail as it was all a paper exercise. There is nothing to certify that this paper of possession was executed at the site of the plot. It is a mat­ter of common experience that the lease deeds and the deeds of possession are al­ways prepared, written and executed in the office of the authorities concerned and such exercise is just to fulfill and observe the for­mality.

12. We are therefore, not convinced with the arguments of the learned counsel for the Authority that the execution of the deed of possession terminated the liability of the NOIDA and thereafter it had no concern with the rights of the complainant. It can­not be permitted to lay down a new defini­tion of possession i.e. 'yes come for a while, stand on a piece of land and possession is complete by all means." Possession certainly has to be meaningful, purposeful, physical and effective for all times to come. In the matter of acquisition of land of the farmers it has always been a controversial issue as to how to satisfy the villagers as their de­mand for higher compensation and better facilities for their rehabilitation have been on increase and the NOIDA is virtually a waterloo in this field. The recent acquisi­tion and controversies over the acquisition of land cannot be lost sight of. We can take judicial notice of the judicial pronounce­ments and the issues being raised by the land owners. The farmers, whose lands were acquisitioned for residential or commercial activities have been on war path with the NOIDA and giving tough resistance to the authorities in the matter of acquisition and possession of their agricultural fields. In the case in hand also the complainant high­lighted various turbulent features by means of several letters as referred to above. It had sent several letters to the CEO praying for its protection and providing adequate secu­rity and relief in the matter of possession but the authorities of NOIDA have not come forward to help the complainant.

13. During the pendency of this case the senior authorities of the NOIDA were di­rected by this Commission to inspect the site allotted to the complainant and those senior authorities have prepared a report about the illegal and unauthorized encroachment over the complainant's plot by the villagers. This report was sighed by the Deputy CEO, Sr. Town Planner, Chief Project Engineer and Secretary of the NOIDA and it was filed alongwith the Authority's letter of 18.5.2010. This report reads as follows :-

LANGUAGE"

The above report clearly lays down that plot no.B7, Sector 68 allotted to the com­plainant company has been encroached upon by the villagers. The report also seems to be indicative of the fact that the villagers whose land was acquired, despite payment of compensation having been remitted to the Land Acquisition Officer, have grabbed their land again. The grabbing of the land by the same owners of the erstwhile agricultural land referred to by khasra numbers might be in protest of either non payment or low compensation in their estimation. Be that as it may, the NOIDA, the real owner of the land has not been able to protect possession over it rather knowingly or unknowingly permitted the land owners to repossess the land. The photographs also depict a clear picture that temporary sheds and lintelled accommodation have been constructed over the plot allotted to the complainant. A school namely "Kanchan Public School" is function­ing over it. With this situation of the former land owners being in illegal occupation of the land allotted to the complainant, it emerges out that the complainant was never placed in effective possession of the land rather as can be observed at the cost of rep­etition bare formality was observed while executing paper of possession on 5.6.2008. As a matter of fact effective possession is workable only when paper transaction is not futile exercise. The NOIDA in whom the ownership and the proprietary rights of the land in question are inherently incorporated is fully responsible to protect the complainant's possession over it.

Section 108(b) of the Transfer of Proper­ties Act clearly postulates that the lessor is bound on the lessee's request to put him in possession of the property.

14. Further Clause (c) of Section 108 of the aforesaid Act provides that the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contract binding on the lessee, he may hold the property during the time limited by the lease without interruption.

15. Under Clause (a) of the aforesaid Section of the Transfer of the Properties Act, the lessor is the lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover.

16. The real purport of the above three clauses of Section 108 is that it is the lessor's implied covenant for title to give possession of the leased property because title imports a duty to give possession. After possession is given it has to be protected by the lessor for quiet enjoyment under Clause (c) of the above Section.

17.This imperative obligation of protecting the possession of the lessee for quiet enjoyment is the real and purposeful meaning of the word "possession" and except this no other meaning would be permitted to be imported.

18. The following extract from the Text Book of Mulla's Transfer of Property Act (Fourth Reprint 2011 page 1076) with reference to a citation "ILR 50 Cal 68" is of great relevance.

“This provision Clause, (c) of Section 108 secures for the lessee the benefit of an unqualified covenant for quiet en­joyment. A qualified covenant for quiet enjoyment protects the lessee against interruption by the lessor, his heir and assigns, or any other person claiming by or under him, them, or any of them, whereas an unqualified covenant pro­tects that lessee against the interrup­tion by the lessor, his heirs and assigns or by any other person or persons whomsoever. The covenant, in the un­qualified form covers the case of interruption by the superior landlord or other person claiming by title para­mount, exercising a power of re-entry, or otherwise, dispossessing the lessee”.

19. It is thus clear from the above provisions of law that the covenant operates af­ter possession has been given; for before entry the lessee has his remedy on the cov­enant to give possession. The object of the covenant is to secure continuance of posses­sion to the lessee, and it is therefore, an as­surance against the consequences of a defective title and of disturbance thereupon.

20. The position would have certainly been different had ownership rights been transferred to the complainant and being in effective possession thereof, they had con­structed requisite structure as per their need and after a reasonable lapse of time somebody would have dispossessed them. In that situation of course they would have got nothing to blame NOIDA as it had parted proprietorship rights as well as ef­fective possession over the land but that is not scene here with the land in question. The complainant is only a lessee and it had derived its leaseholds rights from the land owner i.e. NOIDA and therefore, the NOIDA would be responsible and liable to protect its rights of possession as well as leasehold rights. The NOIDA has realized a huge sum from the complainant as part of its price and the latter is liable to pay all the remaining installments in due course of time; and, with all its bona fide and sincerity the complain­ant is following the schedule of payment by installments. The NOIDA is a Governmen­tal Authority and in order to enforce law and order it has always the backing of the Gov­ernment. Moreover, the police administra­tion is always to protect the lawful rights of the citizens. Neither the NOIDA nor the police or district administration should be silent or consenting expectator to the en­croachment by the land grabbers whose re­possession of the land is absolutely illegal. In past also the encroachment on the land, allotted to the complainant were got removed and the NOIDA authorities success­fully made the land grabbers to run away. This time also the NOIDA authority can use the police force in accordance with the rules and remove the encroachment, to shoulder its responsibility and protect the rights of the complainant. If it fails in its duty, it is certainly a deficiency of service on its part. As stated earlier it has received huge con­sideration as part of the price of the land and if it does not ensure possession for the benefit of the complainant it will always be held guilty for deficiency in service.

21. Sri Rajneesh Kumar has raised the issue of jurisdiction. According to him the price of the plot is more than the pecuniary jurisdiction of this Commission and there­fore, the complaint should be dismissed for want of jurisdiction. In this context it may be observed that in the written statement filed by the NOIDA on 20.4.2010 not an iota was mentioned about the pecuniary juris­diction of this Commission and thus the complainant was not in a position to rebut the said argument. However, when this is­sue was raised on the last date of argument i.e. 20.7.2010 after the complaint had re­mained pending for more than a period of 16 months, learned counsel for the com­plainant referred to the plea of complainant's right vis a vis the payment it had made by the time the complaint was filed. As mentioned earlier a sum of about Rs.87,00,000/- had been deposited by the complainant until this complaint was filed and it was entitled for possession of the land on a smaller amount of money i.e. Rs.45,90,000/-. Since the plea of possession only and in the alternative, allotment of another site has been pressed into service, the pecuniary jurisdiction may be limited to the aforesaid amount on payment of which rights of possession would accrue. Leasehold rights spreading over to the en­tire lease money are not in issue. Therefore, the contention of the learned counsel for the Authority is devoid of merit.

22. A reference of this Commission's judg­ment in a bunch of Appeals no. 1380/2009 and several others, Parshavnath Developers Limited versus Manish Kumar and oth­ers is of no help to the NOIDA as in the case of Parshavnath Developers the entire price of the flat (Rs.33,77,278/-) had been paid. It was held by the State Commission that the District Consumer Forum, dealing with the said dispute could not have been competent, enough to take cognizance of the matter. Needless to mention that the District Con­sumer Forum exercise pecuniary jurisdic­tion over disputes involving valuation upto Rs.20,00,000/-. Moreover, in that case the dispute between husband and wife related to their ownership issue. The citation thus would be of no relevance or help to the Au­thority.

In view of the discussion held above we are of the decisive opinion that the NOIDA having failed in its duty of protecting pos­session of its lessee and lease-hold, rights is guilty of deficiency in service.

23. Accordingly, this complaint is allowed and the NOIDA is directed to deliver fac­tual and physical as also effective posses­sion of plot no.B7 Sector 68 NOIDA to the complainant. Also it is directed to ensure that the delivery of physical possession would be free from all encroachments. Let this be done within a period of thirty days failing which it shall be under an obligation to allot an alternative site equivalent to the area of the allotted plot to the complainant on the same terms and conditions as agreed earlier between the parties and the payment made earlier shall be adjusted against the price of the alternative plot.

24. Since the complainant has not been inducted so far into physical/effective pos­session of the plot, the prescribed limit of five years for raising construction and making the company functional would stand extended as may be suitable in the circumstances of the case and in case of the allotment of an alternative site, the said period will be reckoned with from the date of possession. The payment made by the com­plainant shall be adjusted stage wise as scheduled in the payment plan.

25. As a huge sum of Rs.87,00,000/- is lying in the coffers of the Development Authority for the last four years with subse­quent stages of payment (Rs.67,00,000/-deposited upto the filing of the complaint and Rs.20,00,000/- during the pendency of this complaint), the claim of interest on the said large sum being justifiable is allowed. Accordingly, the complainant would be entitled to get interest @ 18% p.a. upto the date of getting physical and effective possession over the allotted site or the alternative plot.

26. The prayer in sub-clause 5 of the relief column for harassment of the owners, directors; shareholders of the complainant too is sustainable. The complainant kept on waiting, in the beginning, for execution of lease deed. More than 18 months' period unnecessarily elapsed. The encroachment at the site was a clause as argued by the earned counsel for the complainant. Then execution of the lease deed brought some relief temporarily. Barely a few days after he complainant's authorities suffered hu­miliation at the hands of land grabbers when their workers were thrashed out at le site. The act of building boundary wall was thwarted by the unruly villagers. The Officials of NOIDA further gave a jolt by pleading helplessness and their refusal to provide protection to the authorities of the Complainant sent shocking waves down their spine, project was delayed and even the prayers for extension of construction period was not acceded to. By making an investment of huge sum with no fruitful result by now, the proprietors of the complain­ant would be entitled to claim compensation of Rs.10,00,000/-.

Complaint allowed.