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Tuesday, July 20, 2010

Surrender of site-Penalty--Demand for the balance penalty was made after more than 2 years and 6 months of the acceptance of surrender of the site--Demand quashed.

2010(2) LAW HERALD (P&H) (SC) 965
IN THE SUPREME COURT OF INDIA
Before
The Hon’ble Mr. Justice G.S. Singhvi
The Hon’ble Mr. Justice Asok Kumar Ganguly
Civil Appeal No. 1640 of 2010
Daljit Singh
v.
Union Territory Chandigarh through its Chief Administrator, U.T. Chandigarh
{Decided on 09/02/2010}
For the Appellants : Mr. P.S. Patwalia, Sr. Advocate, Ms. Pragati Neekhra, Mr. Suryanaryana and Ms. Sonika, Advocates.
For the Respondents : Ms. Kamini Jaiswal, Advocate.
IMPORTANT POINT
Surrender of site-Penalty--Demand for the balance penalty was made after more than 2 years and 6 months of the acceptance of surrender of the site--Demand quashed.
Chandigarh (Sale of Sites & Buildings) Rule, 1960, R.7-A(2) --Surrender of residential plot--Penalty--Site purchased in the open auction--Appellant, highest bidder in the public auction conducted by Administration--He deposited 25 percent of the bid money and took possession of the auctioned site--Appellant requested respondent to accept the surrender of site--Respondent No. 2 accepted the surrender of the site and imposed penalty @ 2.5%--After 2 years and 6 months, respondent No.2 issued notice to the appellants requiring them to deposit Rs.3,38,082/- in terms of Rule 7-A(2) of the Rules, where penalty @5% of the premium ought to be imposed--Appellants challenged the demand of additional penalty--High Court refused to quash the proceedings--Appeal--Whether demand of penalty by 2nd respondent is valid--Sub-rule (2) of Rule 7-A was applicable--R2 did not commit any illegality--Demand for the balance penalty was made after more than 2 years and 6 months of the acceptance of surrender of the site and the appellants' legitimate prayer for withdrawal of the letter of surrender was rejected without any tangible reason--High Court should have quashed the demand raised by respondent No.2 on the ground of arbitrary exercise of power and violation of the doctrine of fairness in state action-- Demand raised by respondent No.2, quashed. (Para 9 to 12)