Punjab-Haryana High Court
Aidhan Mechanical Works vs Unknown on 25 January, 2013
Author: Surya Kant
Bench: Surya Kant
CWP No. 9102 of 2011. ::-1-::
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH
CWP No. 9102 of 2011[O&M]
Date of decision: January 25, 2013.
Aidhan Mechanical Works ...Petitioner
v.
State of Punjab and others ...Respondents
CORAM: HON'BLE MR. JUSTICE SURYA KANT
HON'BLE MR. JUSTICE R.P.NAGRATH
**
1. Whether Reporters of local papers may be allowed to see the judgment?
2. Whether to be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest?
**
Present: Shri Sunil Chadha, Advocate, for the petitioner.
Mr. Amit Rawal, Addl. AG, Punjab with
Mr. Mikhail Kad, Asstt. AG, Punjab.
Mr. Sanjeev Sharma, Advocate,
for respondent No.3.
***
Surya Kant, J.
This order shall dispose of CWP Nos. 9102, 9171, 10346 and 10357 of 2011 as all these cases have arisen out of a common issue. The facts are being extracted from CWP No. 9102 of 2011. [2]. The petitioner firm who runs an Industrial Unit seeks quashing of the communication-cum-orders dated 27.11.2006, 19.08.2010 and 18.01.2011 [Annexures P-8, P-14 and P-16] issued by the Punjab Small Scale Industries and Export Corporation Limited
- the respondent Corporation raising demands towards outstanding dues against the industrial Plot No. C-101, Phase-V, Industrial Focal Point, Ludhiana. The petitioner also seeks a writ of Mandamus to direct the Industries Department, Government of Punjab and the respondent Corporation to execute the lease/transfer deed in respect CWP No. 9102 of 2011. ::-2-::
of the above mentioned Industrial Plot in petitioner's favour without insisting on the demand raised vide the impugned notices. [3]. The Industrial Plot measuring 5000 square yards situated in Phase-V, Focal Point, Dhandhari Kalan, Ludhiana, was agreed to be allotted to the petitioner vide letter dated 24.07.1974 and was formally allotted vide allotment letter dated 10.11.1975 [Annexure P- 2]. Some of the relevant terms and conditions of the allotment were to the following effect:-
"[i] The tentative price of plot has been calculated as Rs.100000/- [One Lakh only]. This is, however, subject to adjustment when the works are completed and accounts closed finally. A sum of Rs.20,000/- [Twenty thousand only] being 20% amount of premium price of plot is payable within a period of 30 days from the date of this allotment order through a demand draft drawn on any scheduled Bank at Chandigarh and in favour of the Managing Director, Punjab State Small Industries Corporation Limited, Chandigarh.
[ii] The above price of the plot is subject to variation with reference to the actual measurement of the plot and cost of acquisition of land by the Industries Department. In case of enhancement of compensation on account of acquisition of land of this sector by the Court or otherwise, you shall have to pay the additional price of the plot, if any, determined by the Corporation within 30 days from the date of demand.
xx xx xx
[v] Balance 80% of the total tentative price shall be
payable either in lump-sum within 60 days from the date of issue of allotment letter without interest or in five equated instalments, along with interest, the first instalment being payable in two years from the date of CWP No. 9102 of 2011. ::-3-::
taking over possession, interest being charged at a rate determined by Punjab State Small Industries Corporation from time to time.
xx xx xx [ix] In the event of non-payment of premium price of the plot or interest due thereon, a penal interest of 4% per annum shall be charged, in addition to the normal interest until the outstanding arrears are fully cleared.
xx xx xx [xxvii] In the event of breach of any term and condition of allotment, the Corporation shall have the right to cancel the allotment of plot and take back the possession of site building and also forfeit the entire amount paid by that time".
[4]. The petitioner failed to deposit the due instalments for which a Show Cause Notice dated 07.12.1979 seeking to terminate the lease-right was issued and the explanation having been found to be unsatisfactory, the petitioner's lease was terminated vide order dated 07.03.1980.
[5]. The aggrieved petitioner approached this Court in CWP No. 4523 of 1980 which was conditionally allowed as per the agreed terms vide order dated 05.03.1984. Since the true interpretation of the said order is the real bone of contention, we deem it appropriate to reproduce the same in extenso:-
"The learned counsel for the petitioner states that 25 per cent of the price of the plot in dispute shall be paid on or before March 31, 1984 and the balance in three six monthly equal instalments, the first payable on or before September 30, 1984. The learned counsel for the petitioner further states that the petitioner would submit plan/revised plan of the building within three months from CWP No. 9102 of 2011. ::-4-::
today and will commence construction of the building within six months from the date of the approval thereof. The learned counsel for the petitioner also states that in case of default in payment or construction of the building, as indicated above, the writ petition shall stand dismissed and in case the payable is made and the construction is started, as stated above, the impugned order cancelling the allotment of the plot from the name of the petitioner shall stand set aside.The learned counsel for the respondent No. 3
states that the amount and interest shall be charged from the petitioner as demanded in letter of demand No. PSSIC/CE/AAO[EW]/8628 dated January 31, 1979 and PSSIC/AAO[EW]/P/1-16318 dated May 2, 1979.
In view of the statement of the learned counsel for the petitioner and respondent No. 3 the petitioner is allowed to deposit 25 per cent of the price of the plot on or before March 31, 1984, and the balance in three six monthly equal instalments, the first falling due on or before September, 1984. The petitioner will submit the plan/revised plan of the building within three months from today and will start construction of the building within six months of the date of the approval thereof. In case the payment is made and the construction is started, as indicated above, the impugned order cancelling the allotment of the plot in dispute from the name of the petitioner shall stand set aside and in case of default the writ petition shall be taken as dismissed. No order as to costs".
[6]. The petitioner-Industry is said to have complied with the directions contained in the above reproduced order and thereafter had approached the Corporation for execution of the transfer/lease deed but its request was not accepted. On the other hand, the CWP No. 9102 of 2011. ::-5-::
Corporation filed a Misc. Application No. 1162 of 1987 seeking clarification of the order dated 05.03.1984, followed by another Civil Misc. Application No. 785 of 1994 praying for the dismissal of writ petition on the ground that no industry had been set up over the plot in dispute. Both these applications were taken up for hearing on 23.11.2002, and two members of the Bar were appointed as Local Commissioners who submitted their report dated 05.12.2002 to the effect that no industry was being run at site No. C-101. CWP No. 4523 of 1980 filed by the petitioner was consequently dismissed vide order dated 13.05.2003 with liberty to the Corporation to take proceedings for recovery of possession and for recovery of arrears, if any, due from the petitioner.
[7]. The petitioner, however, moved a review application No. 304 of 2003 to recall the order dated 13.05.2003 which was allowed vide order dated 13.10.2004 on the ground of non-compliance of the principles of natural justice and the main writ petition was ordered to be listed for hearing on 29.10.2004. The writ petition along with Civil Misc. Applications No. 785 of 1994 was taken up for hearing on 05.07.2006 when the application moved by the Corporation was dismissed whereas the writ petition was allowed. The operative part of the order dated 05.07.2006 is reproduced as under:-
"It will be clear from a bare perusal of the order dated March 5, 1984, which has been quoted above in extenso, that there was no direction from the learned Single Judge that the industrial activity was to be started by the petitioner within a fixed time frame as the only direction was with respect to the payment of instalments within a CWP No. 9102 of 2011. ::-6-::
specified period and to the completion of the construction on the plot. To my mind, the argument of Mr. Rawal that as the industry had not been set up in terms of the directions given by the learned Single Judge appears to be erroneous as there was in fact no such direction.
It is also significant that in CM No. 785 of 1994, on the basis of which the order dated May 13, 2003 was made by the Division Bench, there was absolutely no reference to any default in payment of instalments and the reference was only to the effect that the building had not been raised as required by the order dated March 5, 1984. I am of the opinion that in view of the fact that the Local Commissioners appointed by this Court had clearly found that the construction had been made on the plot falsifies the claim of the respondents on this score as well.
In this view of the matter, Civil Misc. Application No. 785 of 1994 is dismissed whereas the writ petition is allowed. Ipso-facto, it is also held that the order dated 05.03.1984 has been complied with by the petitioner".
[8]. It is thereafter that the respondent Corporation issued notice dated 27.11.2006 raising a demand of `45,52,427/-, against which the petitioner offered payment of `1,05,000/- vide Demand Draft dated 27.11.2006. The Corporation thereafter sent another letter dated 19.08.2010 asking the petitioner to pay `53,66,103/- and finally it sent the letter dated 18.01.2011 increasing the outstanding dues to the tune of `83,41,156/- and asking the petitioner to deposit the said amount so as to enable the Corporation to execute the transfer/lease deed in favour of the petitioner. [9]. The aggrieved petitioner has approached this Court. [10]. The respondent Corporation has filed its reply/affidavit CWP No. 9102 of 2011. ::-7-::
maintaining that the demand raised against the petitioner is in conformity with the order dated 05.03.1984 passed by this Court in CWP No. 4523 of 1980 wherein it was categorically mentioned that the Corporation shall demand the due amount and interest from the petitioner in terms of the letters dated 31.01.1979 and 02.05.1979. The Corporation has placed on record the letters dated 31.01.1979 and 02.05.1979 [Annexures R-1 and R-2], the relevant contents whereof are to the following effect:-
"[R-1]:-The outstanding instalment No. 1st which is due on 7.2.79 amounting to Rs.16000/- and interest amounting to Rs.20352/- has not been paid by you so far. You are, therefore, advised to pay the instalment with interest by the due date, failing which action will be taken in accordance with the terms of agreement/allotment. R-2:-Please referrer to PSSIC letter No. 8628-29 dated 31.1.79 on the above subject.
The first instalment which was due on 7.2.79 amounting to Rs.16000/- and interest amounting to Rs.20352/- has not been paid by you as required under the Lease deed despite notice in writing given to you. You are, therefore, finally asked to pay the outstanding instalment with interest within 10 days from the issue of this notice, failing which action will be taken in accordance with the terms of agreement/allotment, and no further notice will be given. You will, therefore, be liable for all consequences arising out of this default".
[11]. The Corporation has explained that after making the allotment on 10.11.1975, the possession of the plot was taken over by the allottee on 07.02.1977 and as per the terms and conditions of allotment, the first instalment was payable on 10.03.1979, but no CWP No. 9102 of 2011. ::-8-::
payment was made by the allottee except a sum of `20,000/- towards 20% of the price deposited on 29.01.1976. The due instalment was not deposited despite reminders and show cause notices and/or till the allotment was cancelled on 07.03.1980. It has been explained that the lease was terminated on more than one grounds, namely, [i] non-payment of instalments along with interest; [ii] failure to complete the construction of the factory building within two years of taking possession; and [iii] failure to show positive evidence of effective steps taken for supply of machinery etc. [12]. It is also maintained that after the order dated 05.03.1984 was passed by this Court, the petitioner deposited the following instalments towards the principal and interest:-
30.03.1984 29,888.00 1st Installment 28.09.1984 29,888.00 2nd Installment 29.03.1985 29,888.00 3rd Installment 30.09.1985 29,888.00 4th Installment 30.09.1985 45.00 Lease Rent [13]. However, the outstanding dues as on 31.08.1986 were `1,81,131/- for which the petitioner was reminded vide letter dated 08.09.1986. It is also pointed out that even before the passing of the order dated 05.03.1984 by this Court, the partner of the petitioner-
firm had given in writing on 18.11.1983 that he was willing to pay the balance amount of `1,54,360/- in instalments but at the time of actual payment, no such amount was deposited.
[14]. It has further pointed out in the reply/affidavit that the Corporation vide the impugned letter dated 19.08.2010 had offered to waive off 50% of the penal interest amounting to `26,34,954/- provided that the petitioner was willing to settle the outstanding dues CWP No. 9102 of 2011. ::-9-::
in lump-sum by 31.08.2010, as per the policy of the Corporation. Since the petitioner failed to avail the policy benefit before the cut-off date, that the revised notices were sent pointing out the outstanding amount of `53,66,103/-. The enhanced demands raised within a short span are further justified with the following averments made in Para No. 10 of the reply:-
"It is, however clarified that the petitioner was conveyed the outstanding dues as per the terms and conditions of allotment. Further, outstanding dues conveyed to the petitioner were Rs.45,52,427/- as on 30.11.2006, Rs.53,66,103/- [i.e., Rs.80,01,057/- [-] less Rs.26,34,954/- being 50% penal interest component] as on 31.08.2010 and Rs.83,41,256/- as on 31.12.2010. It is further stated that the petitioner was offered to waive off 50% penal interest component vide letter dat4ed 19.08.2010 as per the policy of the defendant Corporation but the petitioner did not come forward to avail the said concession".
[15]. The petitioner has filed rejoinder controverting the allegations and denying its liability to the extent raised or claimed by the Corporation.
[16]. The claim and counter-claim raised by the parties hinging around the order dated 05.03.1984 passed by this Court and reproduced above were heard at some length by us on 05.11.2012 and in order to resolve the issue the following order was passed:-
"We have heard learned counsel for the parties at some length and gone through the records.
In our considered view, the liability of the petitioner towards non-payment of due instalments or interest accrued thereupon or the consequential entitlement of CWP No. 9102 of 2011. ::-10-::
the Corporation to recover its dues are to be determined on accordance with the order dated 5.3.1984 passed by this Court in petitioner's earlier writ petition and which has attained finality. The resultant effect would be that the Corporation can not be demand non-construction charges nor it appears entitled to penal interest, wherever no such specific demand against the allottee along with detailed calculations after the decision dated 5.3.1984, was ever raised by it. The petitioner, however, would undoubtedly be liable to pay the allotment price/lease money [revised, if any] along with interest @12% per annum as mentioned in the Corporation's letters March 03, 1978 or May 02, 1979.
Let the due amount recoverable from the petitioner in the light of our order, be recalculated and intimated to the petitioner along with statement of accounts". [17]. In deference to the above reproduced order, the Corporation has filed the additional affidavit of its authorized officer along with Statement of Accounts of the petitioner dated 21.11.2012 [Annexure R-4]. It has also placed on record the notices sent to the petitioner on 08.09.1986 [Annexure R4/A] and 27.11.2006 [Annexure R-5]. The revised Statement of Accounts dated 21.11.2012 comprises of the following dues raised against the petitioner, the details whereof have been appended separately as Annexure 'A':-
Sr. Description of dues Amount [`]
No.
1. Principal cost of plot as per terms of `9229579/-
allotment along with normal and penal
interest [normal interest @12% p.a. + penal
interest @4% p.a.] as on 30.12.2012
[Annexure 'A']
2. Land cost enhancement with due interest as `1997822/-
on 30.12.2012 [Annexure 'B'
3. Lease Rent `495/-
4. Restoration Charges `50000/-
5. Total dues `11277896/-
CWP No. 9102 of 2011. ::-11-::
[18]. The petitioner has also filed its affidavit dated 03.12.2012
disputing its liability on the ground that since due instalments were admittedly deposited by it after the passing of the agreed order dated 05.03.1984, therefore, no occasion could ever arise to impose any penal interest, whereas the substantial part of the claim raised against the petitioner comprises of penal interest only. [19]. We have again heard learned counsel for the parties at some length and gone through the entire records. Since much would depend upon the true understanding of the order dated 05.03.1984 passed by this Court in petitioner's first writ petition, we advert to the same and explain it in the manner as we have comprehended. [20]. The above stated writ petition was directed against the termination of the petitioner's lease on three grounds; namely, [i] non- payment of the due instalments; [ii] non-construction; and [iii] lack of positive evidence regarding purchase/installation of the machinery etc., i.e., to show that the plot was being utilized for industrial activities. It was in this context that the petitioner's counsel made a statement before this Court which is duly recorded in the first paragraph of the order dated 05.03.1984 that 25% of the allotment price shall be paid on or before 31.03.1984 and the balance in three six monthly equal instalments, the first of which shall be paid before 30.09.1984. It was also stated that the plan/revised plan of the building shall be submitted within three months and the construction will commence within six months from the date of approval of the building plans. It was also agreed that in case of default, "non- payment or construction of building", the writ petition shall stand CWP No. 9102 of 2011. ::-12-::
dismissed and in case the payment is made and the construction is started, the impugned order cancelling the allotment of the plot in the name of the petitioner, shall stand set aside.
[21]. Accepting the above stated offer made on behalf of the petitioner, the counsel for the respondent Corporation also made a statement that "the amount and interest shall be charged from the petitioner as demanded in letter of demand No. PSSIC/CE/AAO [EW]/8628 dated January 31, 1979 and PSSIC/AAO[EW]/P/1-16318 dated May 2, 1979".
[22]. It was "in view of the statement of learned counsel for the petitioner and the respondent No. 3" that this Court permitted the petitioner to deposit 25% of the price of the plot on or before
31.03.1984 and the balance in three six monthly equal instalments, first falling due on 30.09.1984. The petitioner was further permitted to submit the plan/revised plan of the building within three months from 05.03.1984 on the condition that it will start construction of the building within six months of the date of approval thereof. This Court further clarified that if the payment is made and the construction started, "the impugned order cancelling the allotment of the plot in question" shall stand set aside and in case of default "the writ shall be taken as dismissed".
[23]. We may at the out-set re-state the well-settled principle that the order of a Court need not be interpreted or construed like provisions of a Statute and its import must be understood in the plain language used by the Court. We have no reason whatsoever to doubt that the Corporation never gave up its right to recover the due CWP No. 9102 of 2011. ::-13-::
amount and interest which it had demanded from the petitioner vide letters dated 31.01.1979 and 02.05.1979, which obviously means that the petitioner was liable and permitted to deposit 25% of the price of the plot before 31.03.1984 or the subsequent three six monthly equal instalments, of the amount which was recoverable from it as per the Corporation's above mentioned two letters. [24]. We have already reproduced the contents of letters dated 31.01.1979 and 02.05.1979, which firmly called upon the petitioner to deposit the due instalments along with interest calculated thereupon within the stipulated period, failing which "action will be taken in accordance with the terms of the agreement/allotment" or that the petitioner will be "liable for all consequences arising out of its default".
[25]. What could have been the action permissible to the Corporation to be taken against the petitioner as per the terms and conditions of the agreement or allotment, in the event of non-deposit of the due amount along with interest, can be found out from the terms and conditions of the allotment which were neither under challenge in the 1980 writ petition nor in the present case. Clause [ix] of the terms and conditions is so categoric in prescribing that "in the event of non-payment of premium price or the plot or interest due thereon, the penal interest of 4% per annum shall be charged in addition to the normal interest until the outstanding arrears are fully cleared".
[26]. The allotment letter dated 10.11.1975 is a binding contract between the parties. The petitioner accepted the terms and CWP No. 9102 of 2011. ::-14-::
conditions with its open eyes and never ever alleged that any of its clauses was un-conscienceable or violative of Article 14 of the Constitution. The petitioner, therefore, in the event of non-payment of the due instalments or interest agreed thereupon, has always been liable to pay penal interest and at the time of the passing of the order dated 05.03.1984, the right to claim penal interest on the default amount had never been given up by the Corporation. The order dated 05.03.1984 can not be construed to mean that this Court set aside/modified the demand notices dated 31.01.1979 or 02.05.1979 or it permitted the petitioner to deposit the due amount with agreed interest, without paying any penal interest.
[27]. In all fairness, it was vehemently urged on behalf of the petitioner that once this Court post-poned the due dates and permitted the petitioner to deposit the due instalments on or before future dates and the petitioner having deposited such instalments as per the agreed future dates, there could be no imposition of penal interest as the petitioner would be deemed to be not in default of payment of any instalment or interest accrued thereupon. We are, however, unable to agree with the contention. We say so for the reason that the ultimate paragraph of the order dated 05.03.1984 is preceded by the statement of learned counsel for the parties. What has been permitted by this Court is the agreed terms and conditions between the parties which included acceptance of the amount and interest chargeable from the petitioner as demanded by the Corporation vide its letters of demand dated 31.01.1979 and 02.05.1979.
CWP No. 9102 of 2011. ::-15-::
[28]. Having said that, we now turn to the order dated 05.07.2006 passed by a learned Single Judge of this Court dismissing the Corporation's application and holding that the petitioner's CWP No. 4523 of 1980 stood allowed. The operative part of the said order, as reproduced by us, leaves no room to doubt that the Corporation sought the dismissal of the petitioner's writ petition on the ground that the industrial activities were not yet started by the petitioner and that it had not set up the industry in terms of the order dated 05.03.1984. This plea was turned down and rightly so after observing that the allowing of the writ petition vide the order dated 05.03.1984 was subject to two conditions, namely, the payment of instalments and the raising of construction and since there was no violation of those two conditions that the application moved by the Corporation was misplaced. In our humble view, the scope of order dated 05.07.2006 can not be expanded to say that the instalments purportedly deposited by the petitioner were of the actual due amount or nothing more was recoverable from it. The fact of the matter is that before the passing of that order, several notices had already been served upon the petitioner raising the demand as per the agreed terms and conditions of the allotment read with the order dated 05.03.1984 passed by this Court. The Corporation, at no point of time, is said to have given up its claim nor the orders passed by this Court from time to time, and referred to above by us in extenso have held that the demand raised by the Corporation, towards the penal interest was unreasonable, contrary to any law or rules or violative of the order dated 05.03.1984. That being the legal and CWP No. 9102 of 2011. ::-16-::
factual position no fault can be found with the demand of 'penal interest' by the respondent Corporation.
[29]. The other vital component of the demand raised against the petitioner pertains to the revised cost of the plot due to the enhancement of compensation paid for the acquisition of the land.
The petitioner has no where disputed that compensation of the acquired land was not enhanced or that the amount sought to be recovered from the allottee[s] disproportionately was higher than the compensation amount paid by the Corporation to the landowners under the Land Acquisition Act, 1894. Similarly, it is not the petitioner's case that no such demand has been raised against the other allottees. Nonetheless, the petitioner has a right to seek Statement of Accounts from the Corporation along with details of the original compensation awarded by the Land Acquisition Collector or the Reference Court, the payment thereof to the landowners, enhancement if any, made by the Appellate Courts and the payment of such enhanced compensation to the landowners. This would essentially be a question of fact for which we decline to act as the accountants of the aggrieved allottees. The detailed facts and figures can always be obtained from the Corporation as a matter of right and if there is any discrepancy or unjust claim, the petitioner or other allottees shall be well within their right to object against the same and/or seek redresssal of their grievance before an appropriate forum but after depositing the demanded amount without prejudice to their legal rights.
[30]. There is albeit one singular but strong factor prompting us CWP No. 9102 of 2011. ::-17-::
to invoke equitable jurisdiction and issue consequential directions.
The Corporation has referred to its policy decision uniformly applicable to all the allottees whereby it decided to waive off 50% of the penal interest in default provided that the allottees would deposit the balance amount in lump-sum on or before 31.08.2010. The petitioner did not avail that benefit as it has been harping too much upon the interpretation of order dated 05.03.1984 and which might have given rise to some expectations [may not be legitimate] against payment of penal interest and under this wrong impression only, it has been pursuing this second round of litigation before this Court since May, 2011.
[31]. Since the controversy regarding the petitioner's liability to pay penal interest has been explicitly determined for the first time vide this order only, we see no reason as to why the Corporation should not extend the benefit of its previous policy to the defaulters like the petitioner to give them an opportunity to deposit the due amount in lump-sum before a cut-off date and seek waiving off the penal interest on such deposit, to the extent it may be decided by the Corporation in public interest.
[32]. For the reasons afore-stated and while dismissing these writ petitions, we direct that if the petitioner[s] deposits 50% of the demand under challenge in two instalments before 31.03.2013 and show[s] its bona-fide, the Corporation shall take an appropriate afresh decision after re-visiting its earlier policy on the waiving off of the penal interest. Such a decision shall be taken before 31.05.2013.
The petitioner[s] or other industries in default shall thereafter be CWP No. 9102 of 2011. ::-18-::
given some reasonable period of time, not less than three months, to deposit the balance amount after deducting the penal interest to the extent it might be waived off. No sooner the balance amount is deposited, the transfer/lease deed shall be executed in favour of the petitioner or other industries within one month.
[33]. Disposed of. Dasti.
[SURYA KANT]
JUDGE
January 25, 2013. [R.P.NAGRATH]
dinesh JUDGE