The Punjab and Haryana High Court has set aside orders fastening penalty on Punjab Ex-Serviceman Corporation (PESCO) over alleged misuse of the basement of its commercial property in Sector 34-A, Chandigarh. The division bench of Justice Jasgurpreet Singh Puri and Justice Pravindra Singh Chauhan held that the Chandigarh Administration repeatedly pursued a matter that had already been settled by its own appellate authority.“The present is a litigation which was an avoidable litigation and we are of the considered view that the respondent-UT Chandigarh Administration has perpetuated the litigation, whereas it ought to have put a quietus to the same once by way of two orders passed by the Chief Administrator, UT Chandigarh, the action of the respondent-UT Chandigarh Administration had already been set aside,” the bench observed.Appearing before the bench, counsel Vikas Jain contended that dispute arose after the Administration issued PESCO a show-cause notice on June 4, 2004, under Rule 20 of the Chandigarh Lease Hold of Sites and Building Rules, 1973, alleging that trade was being carried on or permitted in the basement of the SCO, instead of its being used as a godown. PESCO maintained that the basement was being used for storage of official files, books, equipment, stores and furniture.Jain told the bench that six inspections were subsequently conducted. Taking note of the submissions, the bench observed: “Six different inspections were carried out and in all the inspection reports, it was so observed by the inspection team that there was no misuse or violation of any condition of the allotment and still the Assistant Estate Officer cancelled the site of the petitioner”.Acting on an appeal filed by PESCO, UT Chief Administrator allowed the matter on August 27, 2008, and restored the site. The order was significant because the Law Officer appearing for the Estate Officer stated that an inspection found no commercial activity in the basement and that she had no objection to restoration.The high court noted that the Administration never challenged this order before the Revisional Authority or any court. “The order dated August 27, 2008, passed by the Chief Administrator, UT Chandigarh was never assailed by the respondent-UT Administration either before the revisional authority or before any court of law and in this way, the said order attained finality,” the bench observed.However, a few months later, the Administration made a calculation and issued a demand notice to PESCO, which was again challenged before the Chief Administrator. Their appeal was allowed through order dated September 19, 2016, and demand notices dated November 12, 2008, October 23, 2005, and March 16, 2015, be set aside.The high court noted that the second order too had attained finality as there was no appeal or revision against it. Yet the Administration subsequently sought clarification of that order, following which the Chief Administrator reviewed his own order and directed recovery of penalty for the period June 4, 2004 to February 14, 2006.The bench found no inspection report on record supporting the alleged misuse during that specific period.“There is nothing available on the record nor has any such inspection report been attached along with the reply,” the court observed,The bench held once the comprehensive show-cause notice, covering both resumption of the site and imposition of penalty, had been set aside and the order had attained finality, the Administration could not reopen the matter through a demand notice.“Even otherwise also, once the show-cause notice issued to the petitioner, which was a comprehensive notice under Rule 20 of the Chandigarh Lease Hold of Sites and Building Rules, 1973, wherein both resumption of the site as well as imposition of penalty were proposed, was set aside by the Chief Administrator and the said order attained finality, the same could not have been re-opened by the respondent-UT Chandigarh Administration by issuing of any demand notice.”The bench also found that the Chief Administrator could not review his own order in the circumstances. “In the absence of any provision for review, no such order could have been reviewed, particularly when the Chief Administrator was acting as a quasi-judicial authority and was exercising his statutory powers.”The court further noted that the impugned order had fastened liability for the period from June 4, 2004, to February 14, 2006, despite no inspection report for that period being shown to the court or forming part of the record.The bench also examined the statutory basis of the original proceedings. It noted that the foundational show-cause notice had been issued under Rule 20, which pertained to cancellation/resumption, while Rule 20-A was relevant for charging penalty for misuse.“There is no provision under the aforesaid Rule 20 of the Chandigarh Lease Hold of Sites and Building Rules, 1973, for the purpose of charging any penalty because for the purpose of charging the penalty, Rule 20-A of the Chandigarh Lease Hold of Sites and Building Rules, 1973 would be relevant…”Before parting with the case, the bench added: “We are, therefore, of the considered view that the entire action of the respondent-UT Chandigarh Administration was purely an abuse of the process of law… The maxim ‘interest reipublicae ut sit finis litium’ means that it is in the interest of the state that there should be an end to litigation and that litigation should not be perpetuated.”Allowing the petition, the bench set aside the impugned orders dated October 24, 2016, and June 6, 2017, were set aside. “Consequently, the present civil writ petition is allowed. The impugned orders dated October 24, 2016, passed by the Chief Administrator, UT Chandigarh, and dated June 6, 2017, are hereby set aside,” the bench concluded.