Proportionality in land resumption powers limits forfeiture to last resort, with conditional relief where dues were substantially paid.

Resumption and forfeiture under the land allotment regime were held to be valid powers, but only as an extreme civil sanction to be used sparingly and as a last resort where the facts justify such a drastic measure. Applying proportionality, the Court found that substantial payments had been made, the enhanced interest dispute had remained pending, and the allottees had continued efforts to clear dues, so total resumption and forfeiture were too severe. The authority's entitlement to recover dues was preserved, but the consequence was moderated by conditional monetary relief rather than full enforcement of resumption.

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Issues: (i) whether the power of resumption and forfeiture under the governing land allotment regime could be exercised only as a last resort and on the facts of the case; (ii) whether, in light of the appellants' substantial payments and the surrounding circumstances, the resumption and forfeiture order should be maintained or modified.

Issue (i): whether the power of resumption and forfeiture under the governing land allotment regime could be exercised only as a last resort and on the facts of the case.

Analysis: The statutory power of resumption under Section 8-A of the Capital of Punjab (Development and Regulation) Act, 1952 was held to be valid, but its exercise was treated as an extreme civil sanction. The controlling principle was that such power should ordinarily be invoked only as a measure of last resort, with due regard to fairness, public purpose, and the factual matrix of each case. The Court rejected a rigid approach and emphasised that the legality of the action must be tested on whether the authority applied the drastic remedy proportionately and with proper restraint.

Conclusion: The power of resumption is not invalid, but it must be exercised sparingly and only where the facts justify resort to the extreme measure.

Issue (ii): whether, in light of the appellants' substantial payments and the surrounding circumstances, the resumption and forfeiture order should be maintained or modified.

Analysis: The appellants had paid substantial amounts, the dispute over enhanced interest had been pending, and the record showed continuing attempts to clear the dues. The Court applied the doctrine of proportionality and held that, while the appellants had been guilty of delay and could not be fully exonerated, the drastic consequences of total resumption and forfeiture were not warranted on the facts. At the same time, the Court declined to grant complete relief without consequence and instead imposed an additional monetary condition to balance the competing interests.

Conclusion: The resumption and forfeiture order was not to be sustained in its full rigour, and the matter was to be adjusted by conditional monetary relief.

Final Conclusion: The appeals were disposed of by granting limited substantive relief to the appellants, while preserving the authority's entitlement to recover dues through a moderated financial condition rather than by full enforcement of the extreme resumption consequence.

Ratio Decidendi: Even where resumption powers are constitutionally valid, they must be exercised as a proportionate last resort, and may be moderated where the default is not shown to be dishonest and the allottee has substantially discharged the dues.

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