BUDDALA VEERASWAMY Vs. URBAN DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) THIS Second Appeal under Section 100 of the Code of Civil Procedure (for short, 'the Code') by the unsuccessful plaintiff is directed against the judgment and decree dated 28.01.2004 of the learned IX Additional District Judge (Judge, Fast Track Court), Visakhapatnam in A.S. No. 137 of 2000. The learned Additional District Judge while dismissing the said Appeal had confirmed the judgment and decree dated 05.06.2000 passed by the learned II Additional Junior Civil Judge, Visakhapatnam in O.S. No. 936 of 1996. At the time of admission of the Second Appeal, this Court having regard to the grounds (a) to (c) mentioned in the grounds of objection had formulated the following substantial questions of law:

(2.) I have heard the submissions of the learned counsel for both the sides. I have perused the material record.

(3.) (a) The case of the plaintiff may be stated, in brief, is as follows: "The plaintiff had applied on 25.03.1981 to the Visakhapatnam Urban Development Authority ('the VUDA', for brevity) for allotment of a house site. On accepting the request of the plaintiff, an allotment letter dated 16.10.1984 was issued allotting the site in an extent of 325 square yards in MIG 290 of Madhavadhara layout covered by Survey No. 14 within Visakhapatnam Municipal Corporation limits, which is more fully described in the schedule annexed to the plaint. Thereafter, the plaintiff had paid the entire consideration to the VUDA. On that, the VUDA had submitted on 20.11.1987, the duly executed sale deed before the Sub Registrar concerned for registration. However, the registration of the said document was kept pending for want of fixation of stamp duty charges payable on the transaction by the Government. The sale deed, the registration of which was kept pending, was finally registered on 27.04.1996 on receipt of the stamp duty payable on the said sale deed. After such registration, the sale deed was released to the plaintiff. The plaintiff had thus purchased the schedule site from the VUDA. The plaintiff, who was employed and was residing in Madhya Pradesh, has no site in Visakhapatnam or anywhere else and had intended to construct a house and settle down at Visakhapatnam and never had an intention to sell away the assigned plot to make profit. As the plaintiff had no financial sources, he did not construct a building either by borrowing a loan from his employer or other financial institutions. While so, the plaintiff had received a letter dated nil. 10.1994 cancelling the allotment and forfeiting the registration fee and 50% of the amount paid towards the land cost. No notice was given prior to the issuance of such letter of cancellation and no opportunity of hearing was also given to explain as to why the plaintiff could not construct a building in the allotted site. Therefore, the plaintiff had made a number of representations to withdraw the letter/order of cancellation and the same are of no avail. The plaintiff had also received a cheque for 1 14,439.50ps dated 15.03.1996 along with the covering letter dated 21.03.1996 informing that the plot sold to the plaintiff was allotted in a public auction to a third party and that the cheque was being sent towards the amount refundable to the plaintiff consequent upon the cancellation of the allotment of the plot. The said cancellation of the plot allotted to the plaintiff is illegal, arbitrary and beyond the powers of the defendant authority for the following reasons: 'The VUDA has never made known the terms in conditions of the sale deed to the plaintiff either prior to the submission of the application or at the time of the allotment or at the time of execution of the sale deed; Since the sale deed was released to the plaintiff on 27.04.1996, there was no opportunity to the plaintiff to know the terms and conditions of the sale deed; The sale in favour of the plaintiff is absolute in nature and cancellation of such a sale deed can only be made by following the due process of law but not by an executive order; the allotment made in favour of the plaintiff was confirmed by execution of a sale deed and hence, mere cancellation of the allotment without the cancellation of the sale deed is bad in law; the cancellation of a registered sale deed can only be done by following the legal process but not by his administrative order that too by the Vice Chairman of the VUDA, who is not empowered under law to cancel the sale deed executed by and on behalf of the VUDA; the possession and enjoyment of the plaintiff over the schedule plot are not disturbed; the plaintiff is continuing in possession and enjoyment of the property; as per the terms and conditions of the sale deed the VUDA is entitled to cancel the sale deed/sale in default of the compliance of the terms and conditions and is entitled to repay the sale price after adjusting the cancellation charges; however, the VUDA had illegally retained 50% of the sale price arbitrarily; the unilateral cancellation of the sale deed was done in violation of law and such cancellation of registered sale deed is neither recognised by the provisions of the Indian Registration Act nor any other law in force; a conditional sale deed with right to cancel is in violation of law and is hit by Section 23 of the Indian Contract Act; the Board of the VUDA by its resolution dated 10.07.1995 had clearly and categorically revoked the cancellation orders earlier made giving two years time for construction of the building; However, for reasons best known to the officers of the VUDA, the sale price with 50% deduction was refunded to the plaintiff by violating the orders of the Board of the VUDA, which is the supreme authority; the plaintiff is having title over the suit schedule site and the selling of the same to another person by VUDA without cancelling the registered sale deed would result in unnecessary litigation.' Hence, the suit is filed for declaration that the cancellation of allotment by order dated nil. 10.1994 and consequent refund of the amount by cheque dated 15.03.1996 to the plaintiff as illegal, arbitrary and capricious and for a consequential mandatory injunction directing the VUDA to cancel the allotment of plot (schedule plot), if any, made to the third parties."