The Punjab & Haryana High Court has held that invoking resumption proceedings with respect to sold property violate the Right to Property enshrined in Article 300-A of the Constitution of India.

The Court was considering a Writ-Petition seeking direction upon the Respondents to act strictly in accordance with law in the context of resumption proceedings, and to desist from continuation of arbitrary and illegal action of consequential eviction of the Petitioner from the subject property.

The division bench of Justice Sureshwar Thakur and Justice Vikas Suri observed,".......Resultantly, the said power, even if the said clause became introduced in the registered deed of conveyance, reiteratedly rather was unenforceable or uninvokeable at the instance of the vendor. If the said is permitted to be done, therebys there would be an untenable snatching of the right vested in an absolute owner, thus through the execution of a registered deed of conveyance qua the vendor. Moreover, if the said is permitted, therebys, there would be an unjust expropriation of the right, title and interest rather vested in a lawful owner through a registered deed of conveyance becoming executed inter se him, and, the vendor concerned. The said would also violate the Right to Property as enshrined in Article 300-A of the Constitution of India, which otherwise can be restricted but only after lawfully employing the power of eminent domain, besides upon the said power becoming employed for the public purpose."

The Petitioner was represented by Advocate B.B. Bagga while the Respondent was represented by Advocate Pankaj Gupta.

Facts of the Case

The Petitioner-Company under the relevant policy was allotted Industrial Shed and after depositing the requisite amount, a possession letter was issued to it. In 1998, an agreement to sell was executed between the Petitioner and the Respondent and, subsequently in 2006, a deed of conveyance became executed in favour of the Petitioner Company. One of the Promoters of the Company died and his widow took over as a Director which led to various initial level complications in the managerial functions and decision making endeavours of the company. Taking advantage of it, two senior employees of the Petitioner-Company attempted to grab the assets and income of the company, which led to the filing of three separate court cases. However, the same were withdrawn pursuant to the amicable resolution of the matters.

Furthermore, it was averred that during the pendency of the disputes, the Directors of the company could not visit any of the properties. However, upon the resolution of the disputes of the company, thus the Directors of the company made strenuous efforts to resume the business of the company, and, upon their visiting the disputed shed, they found that the said property stood resumed by the Respondent concerned. It was also averred that neither any Notice was ever received by any of the Directors of the Company, nor at the registered office of the Petitioner Company, and, that no order regarding resumption of the property in question was ever served to any of the Directors of the company.

Counsel for the Petitioner submitted that the impugned action of the Respondents, qua resumption of the property, even after the execution of the registered deed of conveyance, is not in conformity with the principles of natural justice, and, also is impermissible in law. It was contended that the Respondent Company does not have any legal authority of resumption, as resumption is an integral extension of the power of eminent domain and only the State, under certain terms and conditions duly notified, can exercise such power(s).

Reasoning By Court

The Court at the outset noted that 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 Civil Court of competent jurisdiction.

"As such, only on a decree rather rescinding the registered deed of conveyance (Annexure P-9), thus becoming rendered by the Civil Court of competent jurisdiction, that therebys there would be an effective annulment of the absolute right, title and interest endowed thereunders vis-avis the vendee i.e. the present petitioner, and, not in the manner, as has been done through the passing of the impugned order," the Court observed.

It stressed that the effect of non-mentioning of the clause in the registered deed of conveyance, rather made it completely ineffective or unenforceable against the rights acquired over the subject plot by the vendee i.e. the present petitioner, besides therebys the conferment(s) of complete right, title and interest over the subject property vis-a-vis the vendee i.e. the present petitioner, but would remain completely unaffected, thus even on account of any breach thereto becoming made.

"Even otherwise, if the said clause became introduced in the registered deed of conveyance, therebys also it would be completely antithetical to the vestment of complete right, title or interest over the subject property vis-a-vis the vendee, especially when the said occurred through the execution of a registered deed of conveyance. The execution of the registered deed of conveyance qua the subject property, thus completely forbade the invocation of the said clause against the vestment of complete right, title and interest thereins vis-a-vis the present petitioner. Therefore, to validate the said clause but would, as stated (supra), result in the snatching of the power of the Civil Court of competent jurisdiction to rescind the registered deed of conveyance, especially when the power to do so becomes solitarily vested in the Civil Court of competent jurisdiction," the Court observed.

It concluded that since the subject property was not strived to be acquired through the invocation of the relevant statute appertaining to lawful acquisition thereof, therefore, 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 and remained unintroduced in the registered deed of conveyance but naturally is completely arbitrary, besides militates against the Right to Property, as enshrined in Article 300-A of the Constitution of India.

"Moreover, if the existence of an arbitration clause in a contract of the supra genre is permissible, but an arbitration clause is unknown to exist in a registered deed of conveyance. If it does become incorporated thereins, as has been done instantly, therebys the said clause prima facie limits or restricts the otherwise absolutely conferred right, title and interest over the subject property by the vendor upon the vendee. In sequel, therebys too, the arbitration clause prima facie appears to restrict, abridge or limit the otherwise absolute conferment of right, title and interest in the vendee by the vendor. As such, prima facie therebys, the said arbitration clause is a cleverly introduced clause rather merely to give leeway to the vendor to somehow or the others, untenably restrict or scuttle the rights of the vendee over the subject property, and, that too in garb thereof to make an impermissible order of resumption vis-a-vis the subject property," the Court further observed.

The Petition was accordingly allowed.

Cause Title: M/s Penguin Enterprises Pvt. Ltd. vs. State of Haryana and others (2025:PHHC:049150-DB)

Appearances:

Petitioner- Advocate B.B. Bagga, Additional Advocate General Ankur Mittal, Additional Advocate General Svaneel Jaswal, Senior Deputy Advocate General Pardeep Prakash Chahar, Deputy Advocate General Saurabh Mago, Deputy Advocate General Gaurav Bansal, Additional Advocate General Karan Jindal.

Respondent- Advocate Pankaj Gupta, Advocate Vaibhav Gupta

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Punjab & Haryana High CourtJustice Sureshwar ThakurJustice Vikas Suri

Sheetal Joon