Resumption Proceedings Cannot Be Invoked Over Sold Property, Would Violate Article 300A: Punjab & Haryana High Court

The Punjab & Haryana High Court has said that a property which is sold by a registered sale deed cannot be taken back by invocation of resumption proceeding, observing that the same will amount to violation of right to property under Article 300-A.Justice Sureshwar Thakur and Justice Vikas Suri said, "the instant invocation of the power of assumption, thus on any purported breach of supra condition, which otherwise exists, only in the agreement to sell (Annexure P-8) and remained unintroduced in the registered deed of conveyance (Annexure P-9) but naturally is completely arbitrary, besides militates against the Right to Property, as enshrined in Article 300-A of the Constitution of India."The petitioner company, M/s Penguin Enterprises Pvt. Ltd., was allotted an industrial shed in Gurgaon in 1997 and received a conveyance deed in 2006. Following the death of one of its directors in 2007, internal management issues and legal disputes disrupted operations. These issues were resolved by 2016. However, when the company resumed its activities, it discovered that the shed had been resumed by the authorities without any prior notice to the directors or at the registered office. An RTI revealed that the notices had not been properly served, and a representation made to the authorities in 2019 remains undecided.The plea was filed seeking an order to stop the respondents from carrying out arbitrary and illegal resumption proceeding and eviction from the concerned property.It was argued that the resumption and eviction notices were issued without following due process or natural justice and notices relied upon were never properly served to the petitioner at the registered or stated address. The resumption power lies with the State, not the respondent company under the Companies Act, 1956.After hearing the submissions, the Court noted that the resumption of the petitioner's industrial plot was illegal, as the registered deed of conveyance had granted the petitioner full ownership rights, which could not be canceled by the respondents but only by a civil court."The empowerment to rescind or cancel the supra registered deed of conveyance, thus executed between the vendor and the vendee, rather is solitarily vested in the Civil Court of competent jurisdiction, and, the said jurisdiction was to be exercised only upon a civil suit in the said regard becoming constituted before the learned Civil Court of competent jurisdiction," said the bench.It added that "the dispute resolution mechanism of arbitration also does not permit the exercisings of powers of resumption but even if assumingly it has some validity, the same only endows rights to the aggrieved, to without invoking the power of resumption, thus resolve the differences which emerge amongst the vendor and the vendee."In the light of the above, the Court allowed the plea with an exemplary compensation of Rs. 5 lakh.Mr. B.B.Bagga, Advocate for the petitioner.Mr. Ankur Mittal, Addl. A.G., Haryana, Ms. Svaneel Jaswal, Addl. A.G. Haryana,Mr. Pardeep Prakash Chahar, Sr. DAG, Haryana. Mr. Saurabh Mago, DAG, Haryana,Mr. Gaurav Bansal, DAG, Haryana and Mr. Karan Jindal, AAG, Haryana for the respondent-State.Mr. Pankaj Gupta, Advocate and Mr. Vaibhav Gupta, Advocate for respondents No. 2 and 3Title: M/s Penguin Enterprises Pvt. Ltd v.State of Haryana and othersClick hereto read/download the order

Resumption Proceedings Cannot Be Invoked Over Sold Property, Would Violate Article 300A: Punjab & Haryana High Court

Aiman J. Chishti

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