Rohit Lal vs. Muzaffarnagar Development Authority And Another

Held

The Court held that the cancellation of allotment of Shop No. G-3 in favour of the petitioner, Rohit Lal, by the impugned order dated 18.11.2000 was justified. The reasoning was that both the petitioner and his son held adjacent shops (G-2 and G-3) on the ground floor facing Bhagat Singh Road and were running the same watch business, while there was a scarcity of such shops. The Authority aimed to accommodate other displaced shopkeepers. The Court noted that while an allotment order for Shop No. G-3 in favour of Rohit Lal was not on record, the note sheet and the impugned order indicated such an allotment. However, mere allotment does not grant an unfettered right to a sale deed; it is akin to an agreement to sell. Conversely, respondent no. 4 obtained a sale deed in 2003, becoming the absolute owner, and established his business without knowledge of the pending litigation, making him a bona fide purchaser. Quashing the cancellation order would disturb his established business. Furthermore, with the death of Rohit Lal, his successor, Raj Kumar (Petitioner No. 1/1), who already possesses other ground-floor shops, would not suffer irreparable loss. Therefore, the Court found no reason to interfere with the impugned order.

Facts

The petitioner, Rohit Lal, challenged an order dated 18.11.2000 by which his allotment of Shop No. G-3 was cancelled. The cancellation was based on the ground that both he and his son, Raj Kumar (petitioner no. 1/1), held adjacent shops (G-2 and G-3) on the ground floor facing Bhagat Singh Road, both used for watch businesses, and there was a scarcity of shops facing that road. Initially, the writ petition was allowed on 03.05.2018. However, respondent no. 4, who was allotted Shop No. G-3 in 2002 during the pendency of the writ petition, filed a recall application, asserting he was a bona fide purchaser and had not been heard. His application was allowed, and he was impleaded. The original petitioner, Rohit Lal, died, and his son, Raj Kumar, was substituted. The shops were originally constructed over a nala and later replaced by shops in a complex adjacent to Bhagat Singh Road.

Key Issues

1. Whether the cancellation of allotment of Shop No. G-3 in favour of the petitioner, Rohit Lal, was erroneous, considering that the shops were allotted in lieu of his and his son's separate shops over the nala, and they were conducting independent businesses (Question of law and fact, turning on principles of allotment and cancellation by the Development Authority). 2. Whether respondent no. 4, who was allotted Shop No. G-3 in 2002 and executed a sale deed in 2003, is a bona fide purchaser for consideration without knowledge of the pending litigation, and thus cannot be evicted or have his sale deed cancelled (Question of law and fact, turning on principles of bona fide purchaser and equity). Petitioner's contention: The cancellation was erroneous as father and son were allotted shops in lieu of their different shops over the nala and conducted independent businesses. Respondent no. 4's contention: After cancellation, Shop No. G-3 was allotted to him in 2002 as no interim order was in place. A sale deed was executed in 2003, making him the absolute owner. He was not informed about the litigation and is a bona fide purchaser. His established business since 2002 should be protected, and considering the substituted petitioner has other shops, he should not be dispossessed. Reliance was placed on GST receipts showing watch business in both shops by the petitioner.