Karnataka High Court
Bank Officers' And Officials' House ... vs The Assistant Registrar Of ... on 10 November, 2004
Equivalent citations: 2005(1)KARLJ245, 2005 AIR - KANT. H. C. R. 148, (2005) 1 KANT LJ 245
Author: N.K. Patil
Bench: N.K. Patil
ORDER N.K. Patil, J.
1. The petitioner, assailing the correctness of the order dated 11-6-2004 in Appeal No. 836 of 2000 on the file of the Karnataka Appellate Tribunal, Bangalore vide Annexure-B and also the order dated 25-9- 2000 in dispute No. ARB/50/ABN/7/93-94 passed by the 1st respondent insofar as it relates to paying of interest, has presented this writ petition.
2. The undisputed facts of the case are that the 2nd respondent being a member of the petitioner-Society, filed an application for allotment of a site and had paid the entire sital value. In spite of the same, the petitioner-Society has failed to allot a site in her favour. Hence, the 2nd respondent was constrained to issue a notice dated 26-2-1992 demanding refund of the amount paid by her. The said request has been rejected by the petitioner-Society and hence, the 2nd respondent raised a dispute Under Section 70 of the Karnataka Co-operative Societies Act, 1959 (hereinafter called as the 'Act') before the 1st respondent in Dispute No. ARB/50/ABN/7/93-94. The Arbitrator, after appreciation of the oral and documentary evidence available on the file, has allowed the dispute and directed the petitioner-Society to refund a sum of Rs. 42,581/- with interest at 21% p.a., by his order dated 25-9-2000. Being aggrieved by the said order, the petitioner-Society filed an appeal on the file of the Karnataka Appellate Tribunal in Appeal No. 836 of 2000. The said appeal had come up for consideration before the Tribunal on 11-6-2004. The Tribunal, after appreciation of the oral and documentary evidence and the order passed by the Arbitrator and also placing reliance on the order passed by this Court dated 10-3-2000 in W.P. No. 35597 and connected matters, has partly allowed the appeal and modified the award to the extent of interest only holding that the rate of interest should he read as 12% p.a. instead of 21% p.a. Assailing the correctness of the orders passed by both the authorities, the petitioner-Society has presented this writ petition.
3. The principal submission canvassed by the learned Counsel for the petitioner is that, the petitioner-Society is not at all liable to pay any interest and that there is no agreement with the 2nd respondent for payment of interest. He submitted that the 2nd respondent has failed to pay the sital value well in time. He further submitted that the application filed by the 2nd respondent for refund of deposit was placed before the General Body of the petitioner-Society and the said request has been rejected. He also submitted that pending adjudication of the dispute, the petitioner has deposited a sum of Rs. 15,000/- before the 1st respondent and thereafter, the remaining amount of Rs. 26,700/- has been refunded to the 2nd respondent on 23-7-2004 vide Cheque No. 735717. He further submitted that it is open for the 2nd respondent to withdraw Rs. 15,000/- deposited before the 1st respondent. Further, he vehemently submitted that there is no deficiency of service by the petitioner-Society. He therefore submitted that the impugned orders passed by both the authorities are not sustainable and the same are liable to be set aside.
4. Per contra, the learned Counsel appearing for the 2nd respondent, inter alia, contended and substantiated the impugned orders. He submitted that both the authorities have passed the impugned orders in strict compliance of the mandatory provisions of the Act and after appreciation of the oral and documentary evidence available on the file. He further submitted that both the authorities have rightly held that the 2nd respondent is entitled for interest having regard to the facts and circumstances of the case and in view of the order passed by this Court in similar matters and no error or illegality as such has been committed by them. To substantiate his submission, he placed reliance on the well-settled law laid down by the Apex Court in the case of Ghaziabad Development Authority v. Balbir Singh, and submitted that the said ruling has been followed in the case of Haryana Urban Development Authority and Ors. v. A.K. Rampal, wherein it is consistently held that the applicants are entitled for refund of the amount with interest. He submitted that if the well-settled law laid down by the Apex Court is taken into consideration, the impugned orders passed by both the authorities are in accordance with law and the petitioner is not entitled to seek any relief in this case.
5. After hearing the learned Counsel for the petitioner and the learned Counsel for the respondents and after careful perusal of the impugned orders vide Annexures-A and B, it emerges that the Tribunal has not committed any error of law muchless irregularity. The Tribunal has only modified the rate of interest awarded by the Arbitrator by placing reliance on the direction issued by this Court in W.P. No. 35597 and connected matters disposed of on 10-3-2000. The relevant para 32(2) which is found at page 15 of the order passed by Tribunal reads as under:
"1...........
2. The Society is directed to allot sites to its members who have filed applications for allotment of site in the layout formed in the lands acquired pursuance to the notifications issued Under Sections 4(1) and 6(1) of the Land Acquisition Act, 1894. Act. If there are no vacant sites available for allotment of sites in the said layout, it is open for the Society to allot sites in the other layout to be formed by it, in the event no sites are available, the Society is directed to refund the amount to its member with interest at 12% per annum. Compliance by one year from today".
The Tribunal, following the direction issued by this Court in W.P. No. 35597 and connected matters and after taking into consideration the order passed by the Arbitrator and after recording a specific finding at paragraphs 8, 9 and 10 of the order, has rightly modified the rate of interest from 21% p.a. to 12% p.a. In view of that, I do not find any error or illegality in the order passed by the Tribunal nor I find any justification to set aside the order passed by the Arbitrator. Further, on the earlier occasion, this Court directed the learned Counsel for the petitioner to produce the notification issued by the Reserve Bank of India regarding interest rates on deposits. Today, the learned Counsel for the petitioner has produced the Notification dated 27-12-1985 bearing No. DBOD.No.Dir.BC.151/C.347-85 issued by the Deputy Governor of the Reserve Bank of India wherein it is mentioned that for deposits for 5 years and above, the rate of interest would be 11% p.a. If is significant to note that in the instant case also, the 2nd respondent has paid the entire sital value of Rs. 42,581/- as per petitioner-Society whereas, Rs. 41,700/- as per 2nd respondent between 2-11-1984 to 8-4-1987. After lapse of 5 years, the 2nd respondent has issued the notice dated 26-2-1992 requesting the petitioner-Society to refund the deposit amount. Therefore, as per the guidelines of the Reserve Bank of India, the 2nd respondent is entitled for 11% interest. Further, as rightly pointed out by the learned Counsel appearing for respondents 1 and 2, it is well-settled law laid down by the Apex Court in the cases of Ghaziabad Development Authority and Haryana Urban Development Authority, wherein it is held that the respective development authorities are liable to pay interest if they fail to allot sites. It is further held that such compensation is a recompense for the loss or injury and it necessarily has to be based on a finding of loss or injury and must co-relate with the amount of loss or injury. It is further held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. The Apex Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases. If the well-settled law laid down by the Supreme Court is taken into consideration, the order passed by the Tribunal cannot be disturbed nor the petitioner has made out any good grounds to interfere with the impugned orders passed by both the authorities.
6. For the foregoing reasons, writ petition is dismissed.