Onus on Statutory Authority over encroached plot: HC

Srinagar, Feb 26: For auctioning an encroached plot of land, taking contradictory stand and retaining a bidder’s money for over 15 years without handing over possession, the High Court of Jammu and Kashmir has imposed Rs 50000 costs on Jammu Development Authority (JDA).

Observing it as “arbitrary use of power”, a bench of Justice Wasim Sadiq Nargal ordered to impose the costs on the Authority, even as it noted that such functioning causes grave prejudice to individual citizens and undermines the credibility and institutional integrity of public authorities entrusted with developmental functions.

The Court noted that forfeiture clauses though contractual in nature, cannot be invoked arbitrarily, particularly when the alleged default itself is attributable to the Authority.

The case relates to an auction of 5.38 kanals of land at Chinor Chowk, Bantalab, Jammu in 2011. After the petitioner emerged as the highest bidder, he deposited Rs 25.50 lakh pursuant to the Letter of Intent issued by JDA. However, he found that a part of the land was under encroachment after he visited the site.

The aggrieved man raised the issue with JDA soon after the auction and withheld further payment until the encroachment was removed.

The Court noted that the internal records of the Authority acknowledged the existence of encroachment and identified the encroacher, yet possession was not handed over for years.

“No offer was even made to give an alternate plot to the petitioner in case there was any impediment in handing over the said plot to him,” Court said.

The Court rejected the JDA’s contention that the allotment stood cancelled due to non-payment of the remaining bid amount, saying that “forfeiture clauses cannot be invoked where the alleged default is attributable to the authority itself”.

In response to the Authority’s contention that the Letter of Intent stood automatically cancelled and that the earnest money was liable to be forfeited, the court said the argument could not be accepted in the facts and circumstances of the present case.

“Forfeiture clauses, though contractual in nature, cannot be invoked mechanically or arbitrarily, particularly when the alleged default itself is attributable to the authority”.

The court observed that retaining the petitioner’s money for more than 15 years without either delivering possession or refunding the amount reflected arbitrary conduct and amounted to unjust enrichment.

The Development Authorities are under a legal obligation to ensure that land put to auction is free from encumbrances and that they must act fairly and transparently in dealings with citizens, the court said.

Taking call on the plea, the Court directed the JDA to calculate the total sale consideration in respect of the land originally auctioned in favour of the petitioner measuring 5.38 kanals .

This, the Authority has to do within a period of one week from the date of receipt of its order.

The Court ordered that upon receipt of the amount from petitioner and upon completion of all requisite codal formalities, the JDA shall, within a period of four weeks thereafter, hand over possession of the land measuring 5.01 kanals found free from hindrances, along with possession of the equivalent land allotted in lieu of the encroached portion measuring approximately 0.37 kanals.

For filing wrong affidavits or taking contradictory stand with a view to mislead the Court, the Bench imposed costs of Rs 25,000 upon JDA and directed that the same shall be borne by the Officers who have filed such a wrong affidavit. Moreover, the court imposed Rs 25,000 as costs on the Authority for the inordinate delay and unjustified retention of the petitioner’s money.

The amount in nutshell to the tune of Rs. 50,000 shall be deposited by the JDA with the Advocates’ Welfare Fund within a period of four weeks (beginning February 25), the court said.