1. This Second Appeal is directed against the judgment and decree dated 15.07.2010 in A.S.No.126 of 2005 on the file of the Court of the XX Additional Chief Judge, City Civil Court, Secunderabad, whereunder and whereby the appeal filed by Secunderabad Cantonment Board represented by its Chief Executive Officer challenging the judgment and decree dated 17.02.2005 in O.S.No.162 of 1997 on the file of the learned III Senior Civil Judge, City Civil Court, Secunderabad, was dismissed.

2. The appellant herein is the defendant and the respondent herein is the plaintiff in O.S.No.162 of 1997. For the sake of convenience, the parties hereinafter are referred to as they are arrayed in the said suit.

3. At the time of admission of this appeal, the appellant is permitted to serve personal notice to the respondent-plaintiff by Registered Post with Acknowledgment Due. But, the postal endorsement shows that the envelope was returned with an endorsement ‘unclaimed’, which amounts to deemed service.

4. Heard the learned counsel for the appellant.

5. The following substantial questions of law are sought to be raised by the appellant-defendant:

i) The plaintiff did not exhaust the remedy available within the ambit of the Cantonment Act, 1924 (for short, ‘the Act of 1924’) under Section 274 but approached the trial Court hastily and as such the suit is liable to be dismissed. It was further contended that the appellate Court erred in relying on the decision of this Court in 3 ACES, HYDERABAD V/s. MUNICIPAL CORPORATION OF HYDERABAD AIR 1995 AP 17 [LQ/TelHC/1994/289] (FB) though it has no relevance to the case on hand.

ii) The appellate Court failed to appreciate Section 185 of the Act of 1924 in true perspective and erred in decreeing the suit against the Secunderabad Cantonment Board (for short, ‘the Board’) defeating the very purpose of the Board with power and authority to regularize construction and re-construction in public interest.

iii) The respondent herein is only a General Power of Attorney (GPA) Holder but not owner of the schedule property, but it was not considered by both the Courts below.

iv) Respondent obtained for two separate plans but constructed one building clubbing both the plans and violated the building bye laws.

v) Though the Board issued notices to the respondent to stop construction, it did not stop the construction and appeared before the Board. Admittedly, the sanction was accorded only for stilt, ground and two upper floors, but the respondent constructed cellar, ground and three upper floors and as such the construction of stilt and third floor is unauthorized. More over, the respondent did not intimate about the commencement of construction or completion of the construction and it did not obtain plinth checking certificate from the Board.

vi) D.W.1 admitted that they failed to maintain FSI as per the sanction accorded by the Board and the said admission itself is sufficient for dismissal of the suit. Further, D.W.1 also admitted that stilt floor was converted into a regular floor and there was no sanction for construction of the cellar and third floor and that the respondent did not stop the construction activities in spite of receiving the notices and proceeded with the construction.

vii) The appellate Court ought to have dismissed the suit on the ground that the appellant is a civic body authorized to check the unauthorized constructions within the cantonment and the Board initiated proceedings in the interest of general public but erred in holding that no deviations and does not call for resorting to the extreme step of demolition.

6. The plaintiff filed O.S.No.162 of 1997 claiming that Mrs.Sharada Srinivas and Mrs.Ranjani Rangarajan were joint owners of the land admeasuring 1325 square yards in Sy. Nos.17 to 23 with a house bearing No.3-9-105, Krishna Bhavan, Krishnapuri West Marredpally, Secunderabad, (hereinafter referred to as ‘suit schedule property’), having got the same by way of a Memorandum of Settlement dated 16.07.1993 between Sri B.K.Seshu and Smt.Sharada Srinivasan and Smt.Ranjani Rangarajan. The plaintiff entered into a Development Agreement with the joint owners on 20.10.1993 for development of the land by constructing residential complex after demolishing the existing structures. The joint owners also executed a General Power of Attorney in favour of the plaintiff on 30.10.1993. They obtained ULC Certificate dated 25.08.1980 from the Office of the Ministry of Defence, New Delhi. They also applied for approval of the plans for construction of multistoried complex under Section179 of the Act of 1924. The Board sanctioned plans vide its Resolution No.28(4) dated 04.12.1995 and Resolution No.40 dated 04.12.1995. The sanctioned plan consists of stilt floor, ground, first and second floors. As per the specifications mentioned in the plan, the plaintiff constructed multistoried complex. While construction was going on, the representative of the Board inspected the suit schedule property for several times, but not raised any objection. Though there are no deviations or alterations, the Board issued notice under Section 185 of the Act of 1924 directing the plaintiff to remove the unauthorized constructions only with an intention to harass the plaintiff and by that time the plaintiff completed the entire construction in the suit schedule property except the wiring and plastering work in the second floor. The prospective purchasers of the plots were also intended to join in their respective plots. The plaintiff states that it commenced the construction and completed the same within one year and possession of flats were also delivered to the respective flat owners. The plaintiff would aver that it did not violate the rules and regulations or bye laws of the Board. In view of the notice issued by the Board, it may resort to demolish the structures, in which event the plaintiff would sustain great financial loss, and as such, the plaintiff gave reply notice on 04.03.1997 for regularizing the constructions. The plaintiff further aver that there is no necessity to the Board to issue notice under Section 273 of the Act of 1924 and that the suit is filed only for mere injunction and requested the Court to grant permanent injunction restraining the Board from interfering with the peaceful possession in respect of the suit schedule property or demolition of the structures.

7. In the written statement filed by the defendant, it is contended that Mrs.Sharada Srinivas and Mrs.Ranjani Rangarajan were joint owners. They gave building application for permission to construct a residential complex. Plans were sanctioned on 04.12.1995 permitting them to construct multistoried building consisting of stilt, ground, first and second floors. The total plot area as per the sanctioned plan and title documents was 1175 square yards. Both of them obtained permission for construction of their respective buildings under two separate sanctioned plans. During routine site inspection, the concerned area Supervisor Mr.M.Phani Kumar found that the plaintiff was constructing one residential complex buy clubbing two sanctions and deviated from the original sanctioned plan and when the construction was in progress the representative of the Board inspected the suit schedule property and raised an objection. The plaintiff constructed RCC columns in the setback area, which is in gross violation of the sanctioned plan and against the building byelaws. The cellar floor was constructed unauthorisedly which was not sanctioned and thus the Board treated it as unauthorized construction and the owners are guilty of committing the offence punishable under Section 184 of the Act of 1924. A preliminary show cause notice was issued under Notice No.EB/House No.3-9- 105/M’pally/4597 dated 06.11.1996 directing the plaintiff to remove the unauthorized construction. As the plaintiff did not stop the construction in spite of receipt the said show cause notice, a notice under Section 185 of the Act of 1924 was issued on 09.12.1996. The said notice was issued after passing resolution by the elected representative of the people under Resolution CBR No.3(2) dated 26.11.1996. The set backs are not provided and the common areas are encroached. Cellar floor was unauthorisedly constructed and construction was in gross violation of the building byelaws. The photographs of the unauthorized construction were filed as Document Nos.1 and 2, attested copy of the report of the Supervisor filed as Document No.3, office copy of the notice under Section 185 of the Act of 1924 was filed as Document No.4 and the sanctioned plan is filed as Document No.5. It is further contended that the plaintiff or the owners had the absolute right to prefer an appeal before the Competent Authority under Section 274 of the Act of 1924, but it did not choose to avail the said facility or the remedy available to it under the statute. The plaintiff did not give reply to the show cause notice. As the right of hearing was provided and the plaintiff had an opportunity of preferring an appeal against the proceedings under Section 185 of the Act of 1924, the suit is not maintainable and that the plaintiff approached the Court seeking equitable relief of injunction but suppressed the material facts and did not exhaust the remedy available under the Act of 1924, and as such the suit is liable to be dismissed. It is also stated that no statutory notice in terms of Section 273 of the Act of 1924 was issued by the plaintiff and thus the suit is bad in law for want of notice. Either in the plaint or in the affidavit filed in support of the interlocutory application for dispensing with the notice, no grounds are elucidated, and thus, the suit is to be dismissed for non-issuance of mandatory notice. It is also stated that the fact finding regarding deviations and the unauthorized construction falls within the domain of the Board and the Board has the required experts, and as such the suit is to be dismissed. As the right of appeal was also provided to the plaintiff under the Act of 1924, the proceedings under Section 185 of the Act of 1924 were initiated only after providing the reasonable opportunity and after passing of the resolution by the elected representative of the people, the suit is not maintainable. It is also stated that the suit is filed by the plaintiff but not the true owners of the property and as such the suit is bad for non-joinder of necessary parties and thus requested to dismiss the suit.

8. Basing on the above pleadings, oral and documentary available on record and the cross-examination of D.W.1, extracted in page Nos.6 and 7 of the judgment, the trial Court observed that the plaintiff made construction of the building within the area owned by it and there is no complaint from the neighbours or anybody. The trial Court relied upon a decision reported in 3 ACES, HYDERABAD’s case (supra) in which it was held that if the deviations made during the construction are not in public interest or cause public nuisance or are hazardous or dangerous to public safety including the residents there in and are minor, minimal or trivial, which do not effect public at large, the Corporation will not resort to demolition. The trial Court further observed that the main objection of the defendant is that though the plaintiff obtained two sanctioned plans, it constructed one multistoried building and that itself cannot be considered as violation. The trial Court also observed that the construction of the building was in accordance with the sanctioned plan and thus it need not prefer an appeal against the notice issued by the Board as the plaintiff filed only suit for injunction simplicitor, it is maintainable and accordingly granted permanent injunction.

9. Aggrieved by the above judgment, the defendant preferred an appeal vide A.S.No.120 of 2005 and the appellate Court confirmed the judgment of the trial Court on the ground that constructions are not illegal and as per the sanctioned plans and that the constructions are not in the public property and no nuisance was caused to the public and no complaints were given by the public. The appellate Court also observed that regularization can be done by collecting compound fee as per the decision reported in 3 ACES, HYDERABAD’s case (supra). Aggrieved by the said judgment, the defendant preferred this appeal.

10. The substantial question of law before this Court would be:

(1) Whether the plaintiff can approach this Court without preferring appeal before the Appellate Authority as per Section 274 of the Act of 1924

2) Whether there are deviations and violations in constructing the building and thus Secunderabad Cantonment Board can demolish the structures

11. A Cantonment Board is a civic administration body in India under control of the Ministry of Defence. The board comprises elected members besides ex-officio and nominated members as per the Cantonments Act, 2006. The Board is bound by the provisions of the Act of 1924, which was amended subsequently. Mrs.Sharada Srinivas and Mrs.Ranjani Rangarajan were the joint owners of the suit schedule property, entered into Development Agreement with the plaintiff company and also executed general power of attorney in favour of the plaintiff company. They obtained ULC from the Ministry of Defence on 25.08.1980 and also obtained sanctioned plans separately vide Cantonment Board Resolution No.28(4) and 40 dated 04.12.1995. The plaintiff company filed a suit for permanent injunction.

The case of the appellant/defendant is that the plaintiff company obtained two separate sanctioned plans, but constructed one residential complex by clubbing two sanctioned plans and it amounts to deviation from the original sanctioned plan. It is its further case that when the construction was in progress, it issued a notice and raised an objection. The plaintiff constructed RCC columns in the setback area and that the stilt floor was constructed unauthorisedly without any sanction, and thus, the same is to be treated as unauthorized construction and the owners are guilty of committing an offence under Section 184 of the Act of 1924. Therefore, the appellant/defendant issued a preliminary show cause notice on 06.11.1996 to demolish the unauthorized constructions. When the plaintiff failed to oblige the same after resolution dated 26.11.1996, the appellant/defendant issued another show cause notice dated 09.12.1996 under Section 185 of the Act of 1924. The crux of the contention of the appellant/defendant is that against the above said show cause notice, the plaintiff has to prefer an appeal before the Competent Authority under Section 274 of the Act of 1924, but it failed to do so.

12. It is apposite to extract Section 274 of the Act of 1924, which reads as under:

‘274. Appeals from executive orders.—(1) Any person aggrieved by any order described in the third column of Sch.V may appeal to the authority specified in that behalf in the fourth column of the said schedule.

(2) No such appeal shall be admitted if it is made after the expiry of the period specified in that behalf in the fifth column of the said schedule.

(3) The period specified as aforesaid shall be computed in accordance with the provision of the Limitation Act, 1963 (36 of 1963), with respect to the computation of periods of limitation thereunder.’

13. As per Section 276 of the Act of 1924, on the admission of an appeal, all the proceedings to enforce the order and all prosecutions of any contravention thereof shall be held in abeyance and as per Section 278 of the Act of 1924, every order of the appellate Authority shall be final. If at all the plaintiff approached the appellate Authority provided under the Act of 1924, the appellant/defendant should have suspended the show cause notice issued under Section 185 of the Act of 1924 after giving due opportunity to the plaintiff. But the plaintiff, despite receipt of the said show cause notice, did not give any reply and did not avail the remedy of appeal under Section 274 of the Act of 1924, instead it approached the Civil Court for permanent injunction. The appellant/defendant in its written statement itself raised the above issue before the trial Court, but the trial Court misinterpreted the facts and section of law and held that the suit filed by the plaintiff is maintainable.

Admittedly, there are deviations in the construction of the building. P.W.1 during his cross-examination clearly admitted that he made construction by clubbing two separate sanctioned plans. Defendant accorded sanction for ground, first and second floors, but he constructed cellar, ground plus three floors. Stilt permission was accorded for parking purpose, but he constructed cellar. In fact, stilt floor above the cellar floor was significantly converted to regular floor. He failed to maintain FSI as per sanction accorded by the Board. He also admitted that there is no sanction for construction of cellar and third floors. He added that he addressed a letter dated 04.03.1997 to grant permission for cellar, but he did not receive any reply from the Board. He has not issued commencement notice, not obtained plinth checking certificate and not obtained completion certificate.

14. D.W.1 was the Supervisor of the appellant/defendant Board, who deposed that a residential complex was constructed by clubbing two different sanctioned plans. The plaintiff violated the sanctioned plan by not maintaining the FSI 0.5 as per the sanction accorded by the Board and it failed to maintain setbacks and constructed RCC columns and common areas are encroached. The plaintiff made cellar unauthorisedly and violated the sanctioned plan by constructing the cellar and third floor unauthorisedly. The plaintiff failed to submit any notice prior to the commencement and failed to obtain any plinth checking certificates from the Board. The plaintiff also constructed additional floors without there being any sanction. The plaintiff did not stop construction activities even after issuance of the preliminary show cause notice and show cause notice and proceeded with the construction unauthorisedly. In the notice issued under Section 185(1) of the Act of 1924, the plaintiff was directed to remove the unauthorized construction within thirty days and it has not preferred any appeal provided under Section 274 of the Act of 1924 and willfully failed to avail the remedy available under the statute, and thus it clearly violated the building byelaws of the appellant-defendant and the unauthorized construction cannot be compounded and it cannot be regularized and that the plaintiff not even given completion notice of the construction to the appellant-defendant. D.W.1 gave report under Ex.B1. Basing on the said report, show cause notice was issued under Ex.B2 and notice under Section 185(1) was issued under Ex.B3 along with sanctioned building plan under Ex.B4. D.W.1 worked in the said place till the middle of 1997 and later one Mr.Iqbal was posted as incharge of the suit schedule area.

15. Learned counsel for the appellant-defendant relied upon case law reported in FRIENDS COLONY DEVELOOPMENT COMMITTEE V/s. STATE OF ORISSA(AIR 2005 SUPREME COURT 1 ) holding to the effect that stringent actions by ruthlessly demolishing illegal constructions and non-compoundable deviations is necessary. Unwary purchasers of such buildings to be compensated. In DIPAK KUMAR MUKHERJEE V/s. KOLKATA MUNICIPAL CORPORATION(AIR 2013 SUPREME COURT 927 ), the Hon’ble Apex Court held that illegal and unauthorized constructions of buildings and other structures not only violate the municipal laws and the concept of planned development of the particular area but also affect various fundamental and constitutional rights of other persons. The failure of the State apparatus to take prompt action to demolish such illegal constructions has convinced the citizens that planning laws are enforced only against poor and all compromises are made by the State machinery when it is required to deal with those who have money power or unholy nexus with the power corridors. The builder conveniently walks away having pocketed the money leaving behind the unfortunate occupants to face the music in the event of unauthorized constructions being detected or exposed and threatened with demolition. The unwary purchasers who shall be the sufferers must be adequately compensated by the builder.

16. The plaintiff cannot justify his action on the ground that the owners are joint owners and previously they have single construction and as such though there are two separate sanctioned plans, it can construct one multistoried residential complex by clubbing both the plans. Merely because it entered into a Development Agreement with the joint owners, it cannot alter the sanctioned plans according to its convenience. In the process of altering the sanctioned plans, it made several violations, it is amply established by oral evidence of P.W.1 and D.W.1, and thus, the appellant-defendant issued show cause notice directing it to remove the unauthorized constructions. Instead of obliging the same, the plaintiff proceeded with construction and also obtained interim order from the civil Court without preferring an appeal before the Appellate Authority under the Act of 1924. The plaintiff stated that under Ex.A6 it addressed a letter to the appellantdefendant to regularize the plan. In the said notice, the plaintiff stated that on commencement of the construction its Engineer advised it to join both the buildings together to provide more spacious living areas and to save the costs considerably, and thus it extended the slab, beams and columns slightly in to the setback area. It further states that excavation for foundation it was observed by the Engineer that the soil was extremely loose and not conducive for foundation and since the neighbouring plot is lower by about eight feet, the Engineer advised it to completely excavate the property to avoid any structural problems and danger to the building, and as such, the plaintiff requested for regularization of the plans.

17. To the notice issued under Section 185 of the Act of 1924 on 09.12.1996, there is no date mentioned on the reply notice given by the plaintiff, but the Secunderabad Cantonment Board received it on 04.05.1997. The plaintiff filed the subject suit seeking permanent injunction was on 30.04.1997. The argument of the plaintiff is that in spite of issuance of reply notice under Ex.A6, the appellant-defendant has not regularized the plan cannot be countenanced as the plaintiff not only violated the sanctioned plan but also made several deviations by discarding the show cause notice. The appellant-defendant would contend that the plaintiff is not the owner of the property and it is only a General Power of Attorney Holder, but admittedly the joint owners of the suit schedule property executed the General Power of Attorney in favour of the plaintiff and authorized it to represent in any Court cases and as such it cannot be said that the plaintiff is not authorized to represent the true owners.

Section 273 notice under the Act of 1924 is on par with Section 80 notice under CPC. It is argued by the learned counsel for the appellant that without any proper reason, the said notice was dispensed with, of course Board contested the injunction suit and thus non-issuance of notice prior to the filing of plaintiff’s suit is not prejudicial to the rights of the Board. As per the judgment of the Hon’ble Apex Court in SMT.HAANNURAMMABAI KALAL (DECEASED) BY L.R. V/s. CANTONMENT BOARD, BELGAUM 2007 SCC OnLine Kar 416 , it was held that the requirement of notice before instituting the suit is not required where the relief sought is an injunction, and thus it cannot be held as fatal to the suit.

18. During the course of arguments, learned counsel for the appellant-defendant would submit that now the illegality committed by the plaintiff cannot be compounded and the cellar portion is to be kept only for parking purpose and the unauthorized construction in the third floor is to be pulled down.

19. No doubt, the prospective purchasers who purchased the property from the developer and residing in it from 1997 onwards will sustain loss for no fault of them. Therefore, the said flat owners are entitled for refund of the amount whatever they paid towards purchase of flats along with interest from the builder.

20. On the above analysis, this second appeal is allowed. The judgment and decree dated 15.07.2010 in A.S.No.126 of 2005 on the file of the Court of the XX Additional Chief Judge, City Civil Court, Secunderabad, and the judgment and decree dated 17.02.2005 in O.S.No.162 of 1997 on the file of the learned III Senior Civil Judge, City Civil Court, Secunderabad, are hereby set aside. There shall be no order as to costs.

21. Pending miscellaneous petitions, if any, shall also stand closed in the light of this final judgment.