REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.8113 OF 2009

THE VICE CHANCELLOR, RANCHI UNIVERSITY & ORS.        ….Appellant(s)

VERSUS

JHARKHAND STATE HOUSING BOARD & ORS.        …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. This appeal  is directed against the  final

judgment and order dated 21.11.2006 passed

by the High Court of Jharkhand at Ranchi in

L.P.A. No. 440 of 2006, whereby the High

Court setting aside the order of the Single

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Judge allowed the L.P.A. filed by the

respondent Nos.9 and 10 herein.

2. In order to appreciate the issues involved

in this appeal, it is  necessary to set out the

facts in detail hereinbelow.

3. The appellant is the University at Ranchi

(hereinafter referred to as “the University”)

whereas respondent no.1 is the State Housing

Board (hereinafter referred to as “the Board”)

created under the State Law.  

4. On 05.07.1976, the  Board allotted 192

Flats to the University for the residence of the

University's employees known as “Ranchi

University Housing Colony” for a total

consideration of Rs.42,24,000/­.  

5. In terms of the allotment agreement, the

University was required to pay 10% of the total

consideration to the  Board and the balance

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money was to be paid in 180 monthly

installments ­ each for Rs.31,195.30.  

6. The University paid 10% of the total

consideration and started paying monthly

installments,  which they paid up to the year

1991 regularly.   However, there were some

defaults made by the University in paying

remaining installments.  

7. The University in the meantime got

possession of the flats  and  they  allotted few

flats  to  its  employees.  The University also  in

the meantime converted some flats for its use

as  Girls  Hostel  Block. In the  meantime, the

University paid lump sum Rs.5 Lakh towards

monthly installments to the Board towards

total consideration.  

8. The Board on 19.10.1989, however,

raised a  demand of  Rs.2,62,44,149/­  on  the

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University, which included partly balance

money towards principal amount and

remaining towards interest accrued on the

defaulted sum.  Since the  University did  not

satisfy/pay the  demand  of  Rs.2,62,44,149/­,

the Board cancelled the allotment by order

dated 29.11.1992 and decided to allot the flats

to some of the occupants (employees) who were

by that time retired but continued to occupy

the flats. This allotment was made on the

request made by the University to the Board.

9. The  University,  however,  on  29.01.1993

realized at their end that there was some foul

play behind sending of the letter of allotment

from the University to the Board for allotment

of  the flats to  its employees which was done

apparently at the instance of some occupants.

The University, therefore, immediately

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cancelled the request letter and  warned the

concerned employees that they should not act

upon the request earlier sent by the University

to the Board and nor should make any

payment to  the  Board to obtain allotment  of

flats in their personal capacity. The employees

were also warned not to enter into any

independent transaction with the Board in

relation to the flats in question, else erring

employees would have to face disciplinary

action. The University also wrote to the Board

on 30.01.1993 that the University is also on its

part requesting the State to arrange for

payment of balance  money to the  Board to

enable them to complete the transaction in

terms of the allotment order.  

10. Despite this, 19 employees deposited

Rs.10,000/­ for allotment of the flats to them.

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In the meantime, the University also paid

Rs.one lakh, Rs.five lakh and some more

money  towards  the  sale  consideration  to the

Board on different dates. The Board also

accepted the said money paid by the

University.

11. It is with these background facts, three

writ petitions, namely, Writ Petition (C)

No.3652/1996, Writ Petition (C) No.3442/2002

and Writ Petition (C) No.1342/2002 were filed

by the employees­occupants against the Board

and the University seeking therein a prayer for

issuance of the writ of mandamus directing the

Board to execute the lease deed of the flats in

question and allot the said flats in their favour.

The  University  contested these  writ  petitions

on several grounds.

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12. By order  dated 08.08.2006, the learned

Single Judge dismissed the said writ petitions.

It  was held  that the writ  petitioners were  in

unauthorized occupation of the flats in as

much as they had no right whatsoever to

either remain in occupation or to ask for any

relief in relation to the flats except to pay penal

rent to the  University for their  wrongful  use

and occupation of the flats.

13. The writ petitioners felt aggrieved and

filed intra­court appeal before the Division

Bench of the High Court. By impugned order,

the Division Bench allowed the appeal, set

aside the order of the learned Single Judge and

while allowing the writ petitions issued a writ

of  mandamus directing the Board to execute

the lease deed of the flats in question in favour

of  each occupant  on  the  basis  of terms and

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conditions as prevailing today and as may be

mutually agreed between them.  

14. It is against this order; the University has

felt aggrieved and filed the present appeal by

way of special leave to appeal in this Court.

15. Heard Mr. Gopal Prasad, learned counsel

for the appellant and Mr. Pradeep Kant,

learned senior counsel for the respondent(s).

16. Having heard the learned counsel for the

parties and on  perusal of the record of the

case, we are constrained to allow the appeal,

set aside the impugned order and restore that

of the learned Single Judge as indicated below.

17. In our considered opinion, the approach,

reasoning and the conclusion arrived at by the

Learned Single Judge was just, legal and

proper as against that of  the Division Bench

for the reasons mentioned hereinbelow.

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18. Firstly, it is not in dispute that the

original allotment of the flats  made by the

Board was in favour of the University.

Secondly, it is also not in dispute that the

University had made substantial part payment

to the Board pursuant to the allotment order,

which the Board had accepted.   Thirdly, it is

also  not in  dispute that the  writ petitioners

were the employees of the University, and

therefore they were allotted flats by the

University by virtue of their employment

conditions.  In other words, the writ petitioners

came in occupation of the flats through their

employer  i.e.  University.   If they were not  in

the employment of the University, they would

not  have  been  able to  occupy these flats in

their individual right at that point of time for

want of any privity of contract with the Board.

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19. In our considered opinion, the writ

petitioners’ (respondent nos. 4 and 5) right to

remain in lawful occupation of the flats could

subsist only so long as they were in the

employment of the University, and that too on

payment of house rent fixed by the University

as  per their  policy. In  other  words, the  writ

petitioners could exercise their right of

occupation qua the University only during

their service tenure subject to fulfillment of the

requisite terms and conditions and their right

of occupation was terminable on their service

tenure coming to an end.   

20. The day on which their services came to

an end,  whether due to their tendering the

resignation, or on attaining the age of

superannuation or for any other reasons, their

right to continue in occupation of the flats

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came to an end.  Their possession in the flats

became unlawful and unauthorized.   They

were under contractual and legal obligation to

handover vacant and peaceful possession of

the flats to their employer i.e. the University so

as to enable the University to allot the flats to

other employees who were eligible for

allotment.

21. It is not in dispute that the writ

petitioners (respondent nos. 4 and 5) had

retired long back from their services and yet

they retained unlawful possession of the flats

in question.  

22. In our opinion, the learned Single Judge

has rightly held that respondent nos. 4 and 5

(writ petitioners) were in unauthorized

occupation of the flats from the date they

ceased to be in the employment of the

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University and hence were liable to be evicted

from the flats and were also liable to pay penal

rent to the University for their use and

occupation till the date of their eviction.  So far

it has not been done.

23. We are not impressed by the submission

of the learned Senior counsel for the

respondent nos. 4 and 5 (writ petitioners)

when he contended that since the writ

petitioners (Respondent Nos. 4 and 5)

deposited some money with the Board for

allotment of the flats in their personal capacity

pursuant to the   decision of the  University

taken  by them  in that behalf,   a right  had

accrued in their favour to remain in

occupation of the flats even after they had

ceased to be in the employment of the

University in their individual rights.  

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24. This submission is wholly untenable and

deserves rejection for more than one reason.  

25. First, It is not in dispute that the

University had withdrawn its decision to allot

the flats to its employees immediately and also

warned them not to enter into any transaction

with the Board directly in relation to the flats,

else they will have to face the disciplinary

action. This  was sufficient indication to the

employees not to deal with the Board in any

manner in their individual capacity: Second, it

is also not in dispute that the University even

after cancellation of the initial allotment order

went on paying monthly installments in lump

sum to the Board and the Board in turn also

went on accepting the  money as and  when

paid by the University. The acceptance of

payment from the University subsequent to

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cancellation by the Board amounted to

revocation of the cancellation order and

resulted in restoration of the initial allotment

made in favour  of the  University:  Third, the

issue in the writ petitions was between the writ

petitioners (employees) and the University

because the writ petitioners had come into

possession of the flats through the University.

They had, therefore, no independent cause of

action in relation to the issue of flats qua the

Board; Fourth, the writ petitioners did not file

any  suit for  specific  performance of contract

against the Board for enforcement of their

alleged independent contractual right in

relation to the flats. Their alleged disputes qua

the Board in relation to flats, therefore, could

not have been gone into in these proceedings:

Fifth, in any event, mere payment of

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Rs.10,000/­ to the Board by the writ

petitioners contrary to the directions issued by

the University did not create any independent

right in their favour  and  nor such  payment

even  if  made by  the  employees  impaired  the

rights of the University in any manner in

relation to the allotment of flats qua Board and

lastly, the cancellation having been revoked on

account of acceptance of payment from the

University by the Board, the original allotment

dated 05.07.1976 stood restored  in  favour of

the University .

26. In the light of the foregoing

discussion/reasons, we cannot concur with

the reasoning and the conclusion of the

Division Bench and are inclined to agree with

that of the learned Single Judge.  

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27. The appeal thus succeeds and is allowed.

The impugned order is set aside, and that of

the learned Single Judge restored. The  writ

petitions out of which this appeal arises is

accordingly dismissed.             

28. Needless to observe, the University would

be at liberty to proceed against the writ

petitioners seeking their eviction from the flats

in  question by filing  appropriate  proceedings

before the Competent Authority under the

Public Premises (Eviction of Unauthorised

Occupants)  Act,  1971 and  also  claim  in the

said proceedings arrears of penal rent payable

by the writ petitioners from the date their

possession  became unauthorized in the flats

and University till their delivery.  

29. The University is also at liberty to finalize

the issue of allotment of the flats  with the

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Board with the intervention of the State

expeditiously. It will  be for the benefit of the

University and its employees, in service.  

30. Likewise, the  writ  petitioners  and  other

employees (occupants) would also be at liberty

to take refund from  the  Board  of their  paid

amount, which they claimed to have deposited

with the Board for allotment of the flats along

with interest at a reasonable rate.

31.  On such request being made by the writ

petitioners, the Board will refund the money to

the  writ  petitioners  and any such employees

within three months from the date of making a

demand after verification as an outer limit.

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32. In the light of this order, the intervention

application and impleadment application

stands disposed of.         

…...……..................................J.          [ABHAY MANOHAR SAPRE]

.………...................................J.   [INDU MALHOTRA]

New Delhi; October 23, 2018.

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