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        VAT and Sales Tax

        1989 (1) TMI 315 - SC - VAT and Sales Tax

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        Writ jurisdiction limits, self-help barred in lease disputes, and development permission cancellation must follow natural justice. Writ review under Article 226 is unsuitable for disputed lease forfeiture issues turning on contested facts and lease covenant construction, so the ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Writ jurisdiction limits, self-help barred in lease disputes, and development permission cancellation must follow natural justice.

                          Writ review under Article 226 is unsuitable for disputed lease forfeiture issues turning on contested facts and lease covenant construction, so the challenge to cancellation could not be examined in the manner pursued. Even so, the State cannot resume possession by force or self-help after purported cancellation and must act according to law. Development permission under the U.P. Urban Planning and Development Act may be revoked where the grant is tainted by fraud, misrepresentation, or breach of conditions, but cancellation must comply with natural justice; vague or mixed allegations require precise notice and a fair hearing.




                          Issues: (i) Whether the challenge to cancellation of the nazul lease could be examined in writ jurisdiction under Article 226 of the Constitution of India, and whether the State could resume possession extra-judicially after cancellation. (ii) Whether the Vice-Chairman of the Lucknow Development Authority had power to cancel the development permission and whether the cancellation order was vitiated by denial of natural justice.

                          Issue (i): Whether the challenge to cancellation of the nazul lease could be examined in writ jurisdiction under Article 226 of the Constitution of India, and whether the State could resume possession extra-judicially after cancellation.

                          Analysis: The dispute over forfeiture of the lease depended on contested questions of fact and the construction of lease covenants, which were not suitably adjudicated on affidavits in writ proceedings. The controversy concerning alleged breaches, change of user, subletting, and other contractual violations was therefore held to lie outside the proper scope of Article 226. At the same time, the State, even as lessor, had no authority to take possession by force or by self-help after purported cancellation; possession could be resumed only in accordance with law.

                          Conclusion: The writ petitions challenging the lease cancellation were not maintainable on merits in the manner pursued, and the State was restrained from taking possession except through due process of law.

                          Issue (ii): Whether the Vice-Chairman of the Lucknow Development Authority had power to cancel the development permission and whether the cancellation order was vitiated by denial of natural justice.

                          Analysis: The power to regulate development under Sections 14 and 15 of the Uttar Pradesh Urban Planning and Development Act, 1973 included, as an incidental and supplemental incident of the grant, the power to revoke or cancel permission where the grant was vitiated by fraud, misrepresentation, or breach of conditions. Section 41(1) did not provide the source of that power, but neither did the absence of an express review clause negate it. However, the show-cause notice and the cancellation order were framed on a mixed and impalpable set of allegations, some trivial and some requiring factual determination of complexity. In these circumstances, a personal hearing and a clearer specification of grounds were necessary to satisfy fair procedure.

                          Conclusion: The Vice-Chairman had the competence to proceed with cancellation, but the impugned notice and cancellation order were quashed for breach of natural justice, with liberty to issue a fresh notice on precise grounds and after giving a fair opportunity of hearing.

                          Final Conclusion: The judgment left intact the restraint against extra-judicial dispossession, while simultaneously setting aside the development-permission cancellation for want of proper procedural fairness and preserving liberty for fresh proceedings in accordance with law.

                          Ratio Decidendi: The power to grant statutory development permission includes, by necessary implication, the power to revoke it for fraud, misrepresentation, or breach of conditions, but any such cancellation must satisfy the requirements of natural justice and cannot be based on vague or mixed allegations.


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