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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 5698-5699 OF 2009

State of Punjab and Others …….Appellants

Versus

Dhanjit Singh Sandhu …..Respondent

JUDGMENT

M.Y. EQBAL, J.:

1. These appeals are directed against the judgment and  

order dated 8.1.2009 passed by the Punjab & Haryana High  

Court  in  C.W.P.  No.8864  of  2007  and  also  order  dated  

27.3.2009  passed  in  Review  Petition  No.  112  of  2009,  

whereby  the  writ  petition  filed  by  the  respondent  was  

allowed  and  the  order  dated   23.12.2004  passed  by  

appellant  no.3  rejecting  the  application  for  refund  of  the  

extension  fee  received  by  the  appellant  in  excess  of  the

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rates mentioned in Rule 13 of the Punjab Regional and Town  

Planning and Development Act, 1995 (in short ‘1995 Act’) in  

the light of the judgment passed in C.W.P. No.13648 of 1998  

(Tehal Singh vs. State of Punjab & Ors.) along with up-

to-date  interest has been set aside.  

2. The facts of the case lie in a narrow compass.

3.    The respondent was allotted  a plot of land measuring  

400  square  yards  bearing  No.2177  at  Durgi  Road,  Urban  

Estate  Phase-II,  Ludhiana  vide  allotment  letter  dated  

1.4.1986.   In  terms  of  allotment,  the  respondent  was  

required  to  complete  the  construction  of  building  within  

three years from the date of issuance of the allotment letter  

after getting the plans of the proposed building approved by  

the  competent  Authority.  The case of  the  respondent-writ  

petitioner  is  that  there  was  no  condition  in  the  allotment  

letter  for  charging  extension  fee  in  the  case  of  failure  to  

complete  construction  of  the  building  within  the  

aforementioned period of  three years  nevertheless  as  per  

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clause 15 of the allotment letter, the allotment was subject  

to  the  provisions  of  Punjab  Estates  (Development  and  

Regulation  Act),  1964  and  the  Rules  and  Policies  framed  

thereunder.  

4. It appears that in the year 1995, the State of Punjab  

came  with  the  legislation  known  as  Punjab  Regional  and  

Town Planning and Development Act, 1995 (in short ‘PUDA  

Act’).    By  the  said  Act,  the  Punjab  Urban  Estate  

(Development and Regulation) Act 1964 (in short ‘1964 Act’)  

and  Punjab  Housing  Development  Board  Act,  1972  were  

repealed.  In exercise of power conferred under the Act, the  

State Government framed rules called the Punjab Regional  

and Town Planning and Development (General) Rules 1995  

(in short ‘1995 Rules’) which was published vide Notification  

dated 22nd August, 1995.  Rule 13 of the Rules specified the  

time within which the building is to be constructed.  It also  

provides for extension of time limit subject to payment of  

prescribed fee mentioned therein.

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5.     The Punjab Urban Planning and Development Authority  

(in short ‘PUDA’) issued a circular dated 15.1.1998 revising  

the rate of extension fee chargeable for the residential and  

commercial plots and by the said circular a very high rate of  

extension fee was proposed to be charged. The respondent  

from time to time deposited the extension fee so demanded  

by the appellant.  It is alleged that an amount of Rs.1.20 lacs  

has  been  in  excess  charged  from the  respondent.    The  

appellant’s case is that the appellant in an attempt to nullify  

the effect of the judgment rendered in Tehal Singh’s case  

and to validate the demand of enhanced rate of extension  

fee purportedly framed the Rules called Punjab Regional and  

Town  Planning  and  Development   (General)  Second  

Amendment  Rules,  2001  (in  short  ‘2001  Rules’)  giving  

retrospective effect.   

6. The respondent moved a writ petition being C.W.P. No.  

7934 of 2004 praying inter alia for the directions to refund  

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the  excess  fee  charged  from  the  respondent.   It  was  

disposed of with the directions to the appellant to reconsider  

the representation and to dispose of the same in the light of  

the order passed in C.W.P. No.13648 of 1998 (Tehal Singh’s  

case).   In  compliance  with  the  aforesaid  directions,  the  

respondent’s representation was considered and came to be  

rejected by the appellant vide order dated 23.12.2004 on the  

ground that in the facts and circumstances of the case the  

instant case was not similar to Tehal Singh’s case.

7.   The writ petition was finally heard by the Punjab and  

Haryana High Court and relying on the ratio decided in Tehal  

Sing’s case (supra) disposed of the writ petition, quashed the  

notice and directed the appellant to calculate the extension  

fee as per Rule 13 of 1995 Rules.  For better appreciation,  

the concluding paragraphs 15 to 17 of the impugned order  

are quoted hereinbelow:-

“15. When the facts of the present case are examined in  the light of the  principle laid down by the Division Bench  judgment in Tehal Singh’s  case (supra), we are left with  no doubt  that the show cause notices issued  to  the  

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petitioner on   19.9.2006  (P-4)  and   12.12.2006 {P-7}  requiring him to pay extension fee of Rs. 1,32,958/- was  violative of the  provisions of the 1995 Act and Rule 13  of the 1995 Rules, as has already been noticed in the  preceding paras. The controversy, in fact, stand settled  by the Division Bench judgment  in Tehal  Singh's  case  (supra) and the issue does not deserve to be reopened.  The respondents have failed to consider the reply filed  by  the  petitioner  wherein  judgment  rendered  by  the  Division Bench in Tehal Singh's case (supra)  has been  cited  and  the  charging  of  extension  fee  at  exorbitant  rate has been duly answered.

16.  In  view  of  above,  the  writ  petition  succeeds.  The  impugned  notice  dated  12.12.2006  (P-7)  is  hereby  quashed.  The  respondents  are  directed  to  calculate  the  extension fee as per Rule 13 of the 1995 Rules.  The needful  shall  be done within a period of  two  months  from  the  date  of  receipt  of  a  certified copy of this order. The petitioner shall  pay the extension fee within a period of  two  months  from  the  date  of  receipt  of  the  calculation  given  in  the  fresh  notice  to  be  issued by the respondents. The petitioner shall  further be entitled to consequential benefit to  get the site plans approved. The petitioner is  also held entitled to his costs.

17. The other connected writ petitions are also  disposed of in the above terms. It is, however,  clarified that in cases such as C.W.P. Nos. 8864  and 13765 of 2007, where the petitioners have  already paid the extension fee as per the rates  demanded  by  the  respondents,  which  are  exorbitant  and  against  the  Division  Bench  judgment of this Court in Tehal Singh's case,  the  respondents  are  directed  to  re-calculate  the  amount  of  extension  fee  as  per  the  provisions of Rule 13 of the Rules and refund  the over-payment alongwith interest 10% per  annum.”

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8.    We have heard Mrs. Rachna Joshi Issar, learned counsel  

appearing for the appellant.  

9.     As noticed above, the plot in question was allotted to  

the respondent vide an allotment letter dated 1.4.1986.  In  

terms of the allotment letter, the allottee had to fulfill  the  

terms and conditions  enumerated in  the  said  letter.   The  

terms  and  conditions  of  the  said  allotment  are  extracted  

hereinbelow:-

“1. Plot No. 2177 Phase-II measuring 400 sq. yds. in  Durgri Rd. Urban Estate has been allotted to you.  The tentative price of the said plot is Rs. 51,000/- 2. The plot is preferential one and additional price  at the rate of 10% of the original normal price is Rs. _____________________________________________________

3.   Total price of the plot (normal) plus preferential  is Rs. 51,000/- 4.   The  above  price  of  the  plot  is  subject  to  variation with reference to the actual measurement  of  the site  as well  as in  cost of  enhancement of  compensation by the court  or  otherwise and you  shall have to pay the additional price of the plot if  any, determined by the department, within 30 days  of  the  date  of  demand  of  in  case  of  sale  by  allotment. 5.   You  shall  have  to  convey  your  acceptance/refusal unless you refuse to accept the  allotment by a registered A/D letter within 30 days  of the issue of this allotment order and have to pay  

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15% of the sale price amounting of Rs. 4750/- or  such other amount with together with the amount  already paid equal to at least 25% of the sale price  of  the site.  In  case of  failure to deposit  the sale  amount  the  allotment  shall  be  liable  to  be  cancelled  and  earnest  money  already  paid  forfeited. 6.   In  case  you  refuse  to  accept  the  allotment  through  acknowledgment  due  registered  letter  addressed to the undersigned within 30 days of the  date of issue of allotment order. You will be entitled  to the refund of the earnest money 7.    On payment of 100% of the purchase price of  the  plot  you  shall  have  to  execute  in  deed  of  conveyance in the prescribed from in such manner  as may be directed by the Estate Officer. 8.   Balance 7.5% of the purchase price shall  be  payable  either  lump-sum  within  60  days  of  the  issue of allotment order without any interest or in  four  2  six  monthly  equated instalment  alongwith  interest  at  the  rate  of  7%  per  annum  The  first  installment  shall  fall  due  after  the  expiry  of  six  months from the date of issue of allotment order  and  shall  be  payable  on  the  10th of  the  month  following in which it falls due. 9.  Each remittance shall be remitted to the Estate  Officer by means of demand draft payable to him  drawn  on  any  Scheduled  Bank  situated  at  the  nearest  place  to  the  Estate  Officer.  Each  such  remittance  shall  be  accompanied  by  a  letter  showing  particulars  of  the  site  i.e.  plot  No.  allotment No. and date of issue of allotment order  etc. In the absence of these particulars, the amount  shall not deem to have been received. 10.   You  shall  have  to  pay  separately  for  any  building material trees, structures and compound wall etc. existing  in  the  plot  at  the  time  of  allotment  for  which compensation has been assessed and paid by the Government in x case you want to make use of the same, failing which the government shall have the  

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right remove or dispose of the same even after the  delivery of possession. 11. The allotment shall be liable to cancellation  in case of the declaration made in the application  for  the allotment of  the plot  is  established to be  incorrect. 12.  You shall have to complete the building within  three  years  from  the  date  of  issue  of  allotment  order,  after  getting  the  plans  of  the  proposed  building approved by the competent authority. 13  The  Government  shall  not  be  responsible  for  leveling the uneven sites. 14. No allottee under this policy shall dispose of his  plot  for  period  of  ten  years  from  the  date  of  transfer  of  the  ownership  to  him.  However  the  transfer of residential plot in the Urban Estate shall  be  allowed  to  be  made  in  case  of  death  of  the  allottee in favour of his hairs.      However, the transfer can be allowed before the  expiry of ten years, in exceptional cases, with the  prior  approval  of  the  Government.  In  case  an  allottee  contravenes  provisions  of  this  para,  the  plot  will  be  resumed  and  price  paid  may  be  forfeited by the Government. 15.  The allotment is subject to the provision of the  Punjab Urban Estates (Development & Regulation)  Act, 1964 and rules and policy framed thereunder  as amended from time to time and you shall have  to accept  and abide by the provision  of  the Act/  Rules/ policy. “

10.  Further,  it  is clear that the allotment of the plot was  

subject to the provisions contained in the 1964 Act.  Section  

10  of  the  Act  envisages  provision  for  resumption  and  

forfeiture  of  the  land  in  case  of  breach  of  conditions  of  

allotment.  Section 10 reads as under:-

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“10. Resumption   and   forfeiture for breach of  conditions of transfer.- (i) If any transferee has  failed to pay the    consideration    money    or  any installment thereof on account of the sale of  any site or building, or both, under section 3, or  has committed a  breach of any other condition  of such sale, the Estate Officer may, by notice in  writing, call upon the transferee to show  cause  why    an    order    of resumption of the site or  building, or both,   as   the   case   may   be,  and forfeiture  of  the whole  or  any part  of  the  money,   if any, paid  in  respect thereof (which  in no case shall exceed ten per cent of the total  amount of the consideration   money,   interest  and other dues payable in respect of the sale of  the  site  or  building,  or  both)  should  not  be  made".

11.   In exercise of power conferred by 1964 Act, Rules were  

framed  in  the  year  1965  i.e.  Punjab  Urban  Estate  

(Development and Regulation) Rules, 1964.  Rule 14 of the  

said  Rules  categorically  provided that  the transferee shall  

complete the building within three years from the date of  

issue of the allotment letter.  In accordance with the Rules  

and Regulations of erection of  the building, the time limit  

may be extended by the Estate Officer if he is satisfied that  

failure to  complete the construction of  the building within  

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the said period was due to the reasons beyond the control of  

the allottee.

12.    Since the respondent-allottee failed to abide by the  

terms and conditions and did not raise construction, he was  

liable to pay non-construction fee/extension fee which was  

demanded  from  him  in  order  to  enable  him  to  avoid  

resumption  of  the  plot  to  the  appellant-authority.   The  

aforesaid demand was made by letters dated 6.1.1997 and  

27.10.1999.   The  said  letter  dated  6.1.1997  is  extracted  

hereinbelow:-  

“PUNJAB URBAN, PLANNING DEVELOPMENT  AUTHOR, SECTOR -32, SAMARALA ROAD, PUDA  

COMPLEX, LUDHIANA  REGISTERED To,

D.S. Sandhu Superintending Engineer (PWD)  Office of the Chief Engineer, PWD B&R, Patna

No. PUDA/E.O./Ludhiana (Endst. No.  2177)96/34478 Dated 06.01.97, Sub: Regarding payment of balance installment  resumption  of  plot  of  Urban  Estate  D  Road,  Sector/  Phase-II  at  Ludhiana,  residential/  commercial plot no. 2177. area 400.

With regard to the above subject.

2. Res. 26712/- the detail of which is given below  is  recoverable  from  you  as  balance  of  residential/commercial  plot  No.  2177,  Urban  

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Estate,  D  road,  Sector/Phase-II,  at  Ludhiana.  Therefore, deposit a bank draft of this amount  alongwith 18%interest per annum which should  be in favour of Estate Officer, PUDA, Ludhiana  and  may be  payable  at  any  scheduled  bank  upto 31.01.97 in all circumstances and appear  before the undersigned on the date at 11.00  a.m. in case of failure to do so, action would be  initiated  for  resumption  of  allotment  of  plot  under  the  conditions  of  allotment  and  under  Punjab  Regional  and  Town  Planning  and  Development  Act,  1995  and  the  rules  made  thereunder and no other opportunity would be  given to you.

1............amount of balance installments. 2. amount of enhanced compensation 3. extension fee 26712/- 4. interest 5. penalty Total 26712

Sd/- Estate Officer In  English  PUDA,  Ludhiana.”

13.  In response to the aforesaid letter dated 6.1.1997, the  

respondent agreed to pay the extension fee imposed by the  

Estate Officer  of  the appellant  authority  in  order  to  avoid  

resumption/auction of the plot.   

14.    Meanwhile,  the  State  of  Punjab  enacted  Punjab  

Regional  and  Town Planning  and  Development  Act,  1995.  

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Rules were also framed under the said Act.  By Section 183  

of  1995  Act,  earlier  Act  of  1964  and  Punjab  Housing  

Development Board Act, 1972 were repealed with the saving  

clause.    

15. Subsequent to the aforesaid Act, by Notification dated  

30.6.1995,  Punjab  Urban  Development  Authority  was  

established w.e.f.  1.7.1995 and the Board stood abolished  

with  effect  from  that  date.   Many  other  Acts  were  also  

repealed.  By the said Act Authority was empowered to deal  

with the land and prescribe the fee in case where extension  

of period for completion of building is set for by the allottee.

16. Since  the  High  Court  passed  the  impugned  order  

following the  decision  rendered by  the  Punjab  & Haryana  

High Court  in  Tehal  Singh’s case,  it  would  be proper  to  

refer the facts of that case.  

17.  In Tehal Singh vs. State of Punjab and Ors. (C.W.P.  

No.13648  of  1998),  the  petitioner  filed  the  writ  petition  

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seeking  a  writ  for  quashing  certain  letters  demanding  

extension fee and striking down condition No.19 of allotment  

letter,  insofar  as  it  relates  to  the  charging  of  separate  

extension fee for non completion of construction of building.  

Further mandamus was sought for directing the respondents  

to  charge  extension  fee  from  the  petitioner  under  the  

provisions of Rule 13 of 1995 Rules.  The High Court after  

referring various  provisions  of  1995 Acts  and Rules  made  

thereunder observed as under:-

“A conjoint reading of the various provisions of the 1995  Act and the 1995 Rules shows that the transfer of land  under sub-section (1) of Section 43 is not only subject to  the  directions  which  may  be  given  by  the  State  Government under the 1995 Act but also the conditions  which may be prescribed with regard to completion of  building of part thereof and with regard to extension of  period for such completion and payment of fee for such  extension. A perusal of rule 13 of the 1995 Rules along  with Section 180 (2) (i) and Section 2 (zc) of the 1995  Act shows that the time within which the building is to  be completed and other related matters are governed by  the 1995 Rules. Therefore, with the coming into force of  these Rules, the rates of extension fee prescribed by the  Board stood superseded and in terms of sub-rule (2) of  Rule  13  of  the  1995  Rules,  the  petitioners  became  eligible  to  seek  extension  of  the  specified  time  limit  subject to payment of the fee prescribed under sub-rule  (3) of Rule 13.”

18.    The Court further came to the following conclusions:-

“We have  thoughtfully  considered  the  respective  submissions.  In  our  opinion,  Shri  

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Malhotra’s  contention  on  the  issue  of  applicability  of  the  1995  Act  to  the  plots  allotted to the petitioners is clearly wide of the  margin. A bare reading of the plain language of  sub-section (4)of Section 183 of the 1995 Act  makes  it  clear  that  the  allotment  of  Section  183 of  the  1995 Act  makes it  clear  that  the  allotment made by the erstwhile Board will be  deemed to have been made under the 1995  Act. Therefore, the construction of the building  will have to be regulated by the conditions of  allotment read with Rule 13 of the 1995 Rules.  As a logical corollary, the extension of the time  limit specified in the letter of allotment will also  be  governed  by  the  provisions  of  the  1995  Rules and the petitioners are entitled to seek  extension of the time limit by paying the fee  prescribed under Rule 13”.

19. Consequently  the  Court  declared  the  notices  

demanding enhanced extension fee as illegal and ultra vires  

to  the  provisions  of  1995  Act  under  the  Rules  made  

thereunder.  

20. It is worth to mention here that the aforesaid judgment  

rendered in Tehal  Singh’s case was challenged before the  

Supreme Court in S.L.P. No.18500-18501 of 1999 and was  

dismissed on 10.11.2000, but the said order of dismissal was  

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modified by the Supreme Court by order dated 12.2.2001 in  

the following terms.  

“In the facts and circumstances of the case the  order does not warrant in any interference of  this  Court.   The  appeals  are  accordingly  dismissed.”

21. As noticed above, the facts are quite different from the  

facts  in  Tehal  Singh’s  case.   In  the  instant  case,  the  

respondents-allottees accepted the terms and conditions of  

the allotment letter and possession were taken but they did  

not raise any construction upto 2000.  There was a specific  

condition that non-construction of building would lead to the  

resumption of the said plot under the provisions of the Acts  

and the Rules.  As noticed above, when the allottees did not  

raise construction on the plot,  the demand was raised for  

payment  of  non-construction fee/extension fee in  order  to  

avoid resumption of the plot by the Authority, allottee paid  

the extension fee.  After availing the benefit of extension on  

payment of extension fee, the allottee sent a letter to the  

Estate Officer demanding refund of the extension fee on the  

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basis of amended Rule 13 of 1995 Rules.  The said demand  

was rejected by the Estate Officer by passing the reasoned  

order in compliance of the directions of the High Court.  In  

the facts of the instant case, we have no doubt in our mind  

in holding that the ratio decided in Tehal Singh’s case will  

not  apply  in  the  instant  case.   In  our  considered  opinion  

defaulting  allottes  of  valuable  plots  cannot  be  allowed  to  

approbate and reprobate by first agreeing to abide by terms  

and conditions of allotment and later seeking to deny their  

liability as per the agreed terms.  

22.  The  doctrine  of  “approbate  and  reprobate”  is  only  a  

species of estoppel, it implies only to the conduct of parties.  

As  in  the  case  of  estoppel  it  cannot  operate  against  the  

provisions of a statute. (vide C.I.T. vs. Mr. P. Firm Maur,  

AIR 1965 SC 1216).  

It is settled proposition of law that once an order has  

been passed, it is complied with, accepted by the other party  

and derived the benefit out of it, he cannot challenge it on  

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any  ground.  (Vide  Maharashtra  State  Road Transport  

Corporation  vs.  Balwant  Regular  Motor  Service,  

Amravati & Ors.,  AIR 1969 SC 329). In  R.N. Gosain vs.  

Yashpal Dhir, AIR 1993 SC 352, this Court has observed as  

under:–

   “Law  does  not  permit  a  person  to  both  approbate  and  reprobate.  This  principle  is  based  on  the  doctrine  of  election  which  postulates that no party can accept and reject  the same instrument and that “a person cannot  say at one time that a transaction is valid and  thereby obtain some advantage, to which he  could only be entitled on the footing that it is  valid, and then turn round and say it is void for  the  purpose  of  securing  some  other  advantage.”

23.    This Court in Sri Babu Ram Alias Durga Prasad vs.   

Sri Indra Pal Singh (Dead) by Lrs.,  AIR 1998 SC 3021,  

and P.R.  Deshpande  vs.  Maruti  Balram Haibatti,  AIR  

1998 SC 2979, the Supreme Court  has observed that  the  

doctrine  of  election is  based on  the  rule  of  estoppel-  the  

principle that one cannot approbate and reprobate inheres in  

it. The doctrine of estoppel by election is  one of the  species  

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of estoppel in pais (or equitable estoppel), which is a rule in  

equity.  By  that  law,  a  person  may  be  precluded  by  his  

actions or conduct or silence when it is his duty to speak,  

from asserting a right which he otherwise would have had.

24. The Supreme Court in The Rajasthan State Industrial   

Development  and  Investment  Corporation  and  Anr.  

vs. Diamond and Gem Development Corporation Ltd.  

and Anr.,  AIR 2013 SC 1241, made an observation that  a  

party cannot be permitted to “blow hot and cold”, “fast and  

loose” or “approbate and reprobate”.  Where one knowingly  

accepts the benefits of a contract or conveyance or an order,  

is estopped to deny the validity or binding effect on him of  

such contract or conveyance or order. This rule is applied to  

do equity, however, it must not be applied in a manner as to  

violate the principles of right and good conscience.  

25. It is evident that the doctrine of election is based on the  

rule of estoppel the principle that one cannot approbate and  

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reprobate  is  inherent  in  it.  The  doctrine  of  estoppel  by  

election is  one among the species  of  estoppel  in  pais  (or  

equitable estoppel), which is a rule of equity. By this law, a  

person may be precluded, by way of his actions, or conduct,  

or silence when it is his duty to speak, from asserting a right  

which he would have otherwise had.

26. Be  that  as  it  may,  so  far  as  the  instant  case  is  

concerned, the High Court has totally overlooked the facts of  

the  present  case  and  allowed  the  writ  petition.   The  

impugned order, therefore, cannot be sustained in law and is  

hereby  set  aside.   The  appeals  are  accordingly  allowed.  

However, in the facts of the case, there shall be no order as  

to costs.

  …………………………...J. (Dr. B.S. Chauhan)

…………………………….J.

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(M.Y. Eqbal) New Delhi, March 14, 2014.  

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