Punjab-Haryana High Court
S.C. Gupta And Another vs State Of Haryana And Others on 29 April, 2013
Author: Amol Rattan Singh
Bench: Satish Kumar Mittal, Amol Rattan Singh
CWP No.989 of 2012 & -1-
CWP No.1065 of 2012
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH
Date of Decision: April 29, 2013
1. CWP No.989 of 2012
S.C. Gupta and another
.....Petitioners
Versus
State of Haryana and others
.....Respondents
2. CWP No.1065 of 2012
Krishna Rani and others
.....Petitioners
Versus
State of Haryana and others
.....Respondents
CORAM: HON'BLE MR. JUSTICE SATISH KUMAR MITTAL
HON'BLE MR. JUSTICE AMOL RATTAN SINGH
Present: Mr. Vishnu Bhagwan Aggarwal, Advocate
for the petitioners.
Mr. Arvind Seth, Advocate
for respondents No.2 and 3.
***
Amol Rattan Singh, J.
These are two writ petitions filed by the same two petitioners in each case, challenging the letters (in each case), dated 04.01.2008 (Annexure P-6 with each petition), seeking that they be quashed, on the ground that Rs.1,72,250/- and Rs.1,72,700, demanded as outstanding amount in respect of Plot No.D.S.11, Sector-29, Urban Estate, Panipat in one case & Plot No.D.S.12, Sector 29, Urban Estate, Panipat, in the other, is an illegal demand. They further seek that CWP No.989 of 2012 & -2- CWP No.1065 of 2012 possession of the said plots be handed over to them. (The two separate petitions are in respect of one plot each).
They also seek compensation to the tune of Rs.20 lacs, on account of alleged delay of 8 years on the part of the respondents, in giving possession of the plots to them. The facts are being taken from CWP No.989 of 2012, for the sake of brevity and convenience.
2. The facts of the case, as set out by the petitioners in the petition, are that, for a double storey shop site, measuring 5.5 X 13.75 mtrs., situated in Sector 29, Urban Estate, Panipat, petitioners made a successful bid, in an open auction held on 14.03.2003, for a sum of Rs.7,66,000/-. Consequently, D.S. Shop/Site No.11 was subsequently allotted to them on 07.04.2003, vide allotment letter, Annexure P-1.
3. As per the allotment letter, 10% of the total amount of Rs.7,66,000/-, deposited at the time of the bid, was adjusted against the total auction amount and they were further directed to pay a sum of Rs.1,14,900/-, i.e. 15% of the total bid amount, within 30 days from the date of the acceptance of the bid.
The remaining amount of Rs.5,74,500/- could either be paid in lump-sum without interest, within 60 days from the date of issue of the allotment letter, or in 8 half yearly installments, over a period of 4 years. In case the allottees opted for payment by installments each installment would carry 11% p.a. interest on the remaining amount. Such interest, however, was to accrue only from the date of offer of possession.
CWP No.989 of 2012 & -3-CWP No.1065 of 2012
4. Para 6 of the allotment letter states that the possession of the site would be offered on completion of development work in the area or, "in the case of building of undeveloped land, the possession shall, however, be on (sic) delivered within 90 days from the date of this letter."
5. The petitioners are stated to have paid 15% of the allotment price on 01.05.2003, duly acknowledged by a receipt from the respondents.
6. As per the petitioners, at the time of deposit of the said 15% amount, they had brought to the notice of the estate officer (respondent No.3), that the area in question is completely undeveloped, i.e. roads, parking and water facilities etc. are not available and that a high tension electric wire is passing through the site in question, which needs to be shifted/removed.
7. It is further averred that possession of the site was offered to the petitioners vide letter dated 28.08.2007, a copy of which has been annexed, as Annexure P-3 with the petition. On receipt of the above said letter, the petitioners claim to have paid the complete balance amount of Rs.5,74,500/- on 11.10.2007, in terms of allotment letter dated 07.04.2003. They also requested for delivery of the possession of the plot which, according to them, was still not handed over, despite complete payment having been made, against receipt issued by the authorities.
CWP No.989 of 2012 & -4-CWP No.1065 of 2012
The petitioners claim to have visited the office of the 3rd respondent, time and again, and represented again by letter dated 03.12.2007, but to no avail.
Finally, instead of being given unconditional possession of the plot, the impugned letter dated 04.01.2008 (Annexure P-6) was communicated to them, raising a demand of Rs.1,72,250/-, seemingly on account of interest on delayed payment.
8. Aggrieved of the same, the petitioners first issued a notice and, thereafter, approached the District Consumer Forum, Panchkula, which allowed the complaint, vide order dated 01.09.2008, holding therein that possession was not offered within 90 days, as required, as per Condition No.6 of the allotment letter, and subsequently, when it was offered, it was not delivered owing to the demand of Rs.1,72,250/-. Therefore, direction was issued to deliver possession, without charging the said amount.
9. The respondents herein, challenged the above said order of the Consumer Forum before the State Commission, which allowed the same on the ground of jurisdiction, holding that complainants (present petitioners) are not consumers, as per the judgment of the Hon'ble Supreme Court in U.T. Chandigarh Administration and another Vs. Amarjeet Singh and others, (2009) 4 SCC 660.
Therefore, the present petition has come to be filed. (These facts are almost identical in both the petitions before us, except for the slight difference of amounts, in respect of each plot). CWP No.989 of 2012 & -5- CWP No.1065 of 2012
10. In the shoddy reply filed on behalf of the respondents- HUDA, apart from formal preliminary objections, substantively it is contended that all basic amenities and developmental works stand completed in front of the site in question and that possession having been offered on 28.08.2007, the petitioners were bound to pay the amount of Rs.1,72,250/-, in terms of the allotment letter and, as a matter of fact, an amount of Rs.2,80,907/- is still outstanding as on 17.04.2012, as per the account statement annexed along with the reply.
11. A perusal of the said account statement shows that the amount sought to be recovered from the petitioner is primarily on account of delayed interest on installments due, in addition to Rs.10,017/- on account of extension and surcharge thereon in the case of each plot.
The fact that the possession was actually offered on 28.08.2007, and not immediately with the allotment letter dated 07.04.2003, is not denied by the respondents.
12. The question, therefore is, is the levy of interest, on account of non-payment of installments between 2003 and 2007 justified?
13. Before we proceed to answer this question, the scheduled dates of payment of installments would work out, on the basis of the fact that the first installment was to due within 6 months of the date of the allotment letter, which is 07.04.2003, as under:
1. First installment : 06.10.2003
2. Second installment: 06.04.2004
3. Third installment : 06.10.2004
4. Fourth installment : 06.04.2005 CWP No.989 of 2012 & -6- CWP No.1065 of 2012
5. Firth installment : 06.10.2005
6. Sixth installment : 06.04.2006
7. Seventh installment : 06.10.2006
8. Eight installment : 06.04.2007.
Thus, the entire consideration money was to be paid by the petitioners as per the above schedule of installments, by 06.04.2007.
Each installment would, naturally, have two components, i.e. principal amount and, interest.
Factually, the entire remaining consideration money of Rs.5,74,500/- was paid, as a lumpsum, on 11.10.2007, after the offer of possession was made on 28.08.2007.
14. To answer the question pored by us above, first of all, the relevant provisions of the allotment letter are to be quoted, though already referred to above. Clause 5 thereof is being reproduced in extenso:
"5. The balance amount i.e. Rs.5,74,500/- of the above price of the plot/building can be paid in lump-sum without interest within 60 days from the date of issue of allotment letter or an 8 half yearly installments. The first instalment will fall due after the expiry of six month/one year of the date of issue of this letter. Each instalment would be recoverable together itch interest on the balance price at 11% interest on the remaining amount. The interest shall, however, accrue from the date of offer of possession."
Thus, as per this clause, the interest would accrue only from the date of offer of possession, which undisputedly is 28.08.2007. Obviously, no interest on installments can accrue before this date, in case the principal component of the installments was paid within time.
15. Sh. Vishnu Bhagwan Aggarwal, learned counsel for the petitioner, would try and persuade us to hold, that until the offer of CWP No.989 of 2012 & -7- CWP No.1065 of 2012 possession is made by the respondents, the petitioners would not be liable to pay even the principal component of the installments. Towards this argument, he has drawn our attention to Clause (7) of Regulation 5 of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978, which reads as under:
"(7) Each instalment would be recoverable together with interest on the balance price/premium, at the rate as may be decided by the authority at the time of allotment. The interest shall, however, accrue from the date of offer of possession of land/building. No interest shall be payable if the whole of the balance price/premium is paid in full, within sixty days of the offer of possession. If at any time the transferee opts to make the balance payment in full, he shall be entitled to do so and interest shall be charged on the balance amount only for the period from the date last installment was due to the date he makes full payment."
16. A perusal of both the provisions, i.e. Clause 5 of the allotment letter, as also Regulation 5(7) of the 1978 Regulations, does not support the argument made by learned counsel for the petitioners.
What the said provisions do stipulate, is that the principal amount must be paid on time, but interest thereupon cannot be made to run except when the possession of the plot has actually been offered to the allottee.
The reasoning behind this is sound in logic inasmuch as, that the remainder 75% of the bid amount, after the initial 25% has been paid (10% at the time of making the bid and 15% within 30 days of date of issue of allotment letter), is to be paid within 60 days from the date of issue of the allotment letter without interest. Only in case the allottee choses to pay the remainder 75% by way of installments, as per the schedule contained in allotment letter, would he be required to pay CWP No.989 of 2012 & -8- CWP No.1065 of 2012 interest @ 11% of the remaining amount of each instalment. Thus, when the bidder makes his bid, he is aware of the condition of the property that he is bidding for, especially as to whether the area around it has been developed or not. He makes his bid/offer knowing fully well the stage condition of such development/non-development, in relation to the plot. Hence, he is actually required to make the payment immediately, within two months of the offer of the allotment. Had the petitioners done so, there would have been no question of payment of any remainder 75% of the consideration money in installments. Obviously, if there was no consideration money left to be paid after 60 days, the question of it carrying any interest would not have arisen. Just because the petitioners chose to pay by way of installments, does not mean that such installments are not to be paid as per the 6 monthly schedule, over a period of 4 years (8 installments). Hence, the averments made by the learned counsel to that effect in the pleadings and as argued by Sh. Aggarwal, are wholly misconceived to that extent.
17. Now the question arises, that if no interest is to accrue on the remaining principal, as per the statutory regulation reproduced above and Clause 5 of the allotment letter, then what interest is to be charged, if any, from the petitioners, by the respondents, on account of the fact that the installments were factually not paid on time.
18. The answer would be, and is, very simple and logical, i.e. for the delay in non-payment of the principal component of each installment, as per the schedule, the respondents would be entitled to charge, what is statutorily provided for, in such a situation. CWP No.989 of 2012 & -9- CWP No.1065 of 2012
19. This issue is dealt with in Regulation 12 of the 1978 Regulations, which reads as under:
"12. Failure to pay price or any installment thereof.- In case the price or any installment thereof is not paid by the transferee within 30 days from the date it falls due, the Estate Officer shall proceed against such transferee in accordance with the provisions of Section 17 of the Act."
Section 17 of the Haryana Urban Development Authority Act, 1977 reads as under:
"17. Resumption and forfeiture for breach of conditions of transfer:- (1) Where any transferee makes default in the payment of any consideration money, or any instalment, on account of the sale of any land or building, or both, under Section 15, the Estate Officer may, by notice in writing, call upon the transferee to show cause within a period of thirty days, why a penalty which shall not exceed ten per cent of the amount due from the transferee, be not imposed upon him.
(2) After considering the cause, if any, shown by the transferee and after giving him a reasonable opportunity of being heard in the matter, the Estate Officer may, for reasons to be recorded in writing, make an order imposing the penalty and direct that the amount of money due along with the penalty shall be paid by the transferee within such period as may be specified in the order. (3) If the transferee fails to pay the amount due together with the penalty in accordance with the order made under sub-section (2), or commits a breach of any other condition of sale, the Estate Officer may, by notice in writing, call upon the transferee to show cause within a period of thirty days, why an order of resumption of the land or building, or both, as the case may be, and forfeiture of the whole or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent of the total amount of the consideration money, interest and other dues payable in respect of the sale of the land or building, or both, should not be made.
(4) After considering the cause, if any, shown by the transferee in pursuance of a notice under sub-section (3) and any evidence that he may produce in support of the same and after giving him a reasonable CWP No.989 of 2012 & -10- CWP No.1065 of 2012 opportunity of being heard in the matter, the Estate Officer, may for reasons to be recorded in writing, make an order resuming the land or building or both, as the case may be, and directing the forfeiture as provided in Sub-section (3) of the whole or any part of the money paid in respect of such sale.
(5) Any persons aggrieved by an order of the Estate Officer under Section 16 or under this Section may, within a period of thirty days of the date of the communication to him of such order, prefer an appeal to the Chief Administrator in such form and manner, as may be prescribed.
Provided that the Chief Administrator may entertain the appeal after the expiry of the said period of thirty days, if he is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.
(6) The Chief Administrator may, after hearing the appeal, confirm, vary or reverse the order appealed from and may pass such order as he deems fit.
(7) The Chief Administrator may, either on his own motion or on an application received in this behalf, at any time within a period of six months from the date of the order, call for the record of any proceedings in which the Estate Officer has passed an order for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order in relation thereto as he thinks fit:
Provided that the Chief Administrator shall not pass an order under this Section prejudicial to any person without giving him a reasonable opportunity of being heard."
In this regard, Clause 8 of the allotment letter is also relevant and is reproduced hereunder:
"8. In case the instalment is not paid by the 10th of Month following the month in which it fall due, the Estate Officer shall proceed to take action for imposition of penalty and resumption of plot in accordance with the provisions of Section 17 of the said Act."
(reproduced ad verbatim, including grammatical errors) CWP No.989 of 2012 & -11- CWP No.1065 of 2012
20. In view of Sub sections 1 and 2 of Section 17 of the 1977 Act, the respondents would, thus, be entitled to recover, by way of penalty, an amount up to 10% of the amount due from the transferee (allottee/auction purchaser) up to the date when the payment is not actually made by the allottee.
At the cost of repetition, the allottees, i.e. the petitioners in this case, paid the entire balance amount of Rs.5,74,500/- on 11.10.2007. The offer of possession was made on 28.08.2007. Thus, no interest on the principal due can be charged till that date. However, penalty for non-payment of the principal component can definitely be charged from the date that each installment became due.
21. It has been nowhere averred, even in the reply filed by the respondents that any notice under Section 17 (1) of the 1977 Act, was issued to the petitioners in respect of payment of penalty for non- payment of the principal component of the installments. However, undoubtedly no part of the installments was ever paid on time, and therefore, in our opinion, the respondents would be entitled to recover penalty at any rate up to 10% , from the petitioners, in view of the statutory provisions reproduced herein, above.
22. These writ petitions are, thus, disposed of with a direction to the respondents to proceed as per law, by issuing notices with regard to the amount of penalty to be charged from the petitioners in respect of each of plot, on the basis of statutory provisions and what has been observed by us in relation thereto, within a period of 15 days from the date of receipt of a certified copy of this order. After hearing the CWP No.989 of 2012 & -12- CWP No.1065 of 2012 petitioners, with regard to reasons for non-payment in time, it would be open to the respondents to charge a penalty as statutorily allowed. If it is charged, the petitioners would make such payment within a period of 15 days thereafter, subject to any calculation errors, for which they may make a representation to the 3rd respondent. Even while making such representation, ¾ of the amount demanded, provided it does not exceed 10% of the principal component of the amount due, calculated from the day on which the installments falls due, would be paid by the petitioners.
The petitioners are also stated to have submitted their building plans for construction of the buildings on the sites in question. Subject to payment of penalty, as above, the respondents would consider sanction, as per law and decide thereupon within one month of payment being made by the petitioners (if penalty is imposed). In case sanction is given, the petitioners would complete the same within one year thereafter.
Since the construction was to be completed, within 2 years from the date of offer of possession, in terms of Clause 16 of the allotment letter, any extension fee payable as per rules would also be paid by the petitioners after 27.08.2009, i.e. after 2 years from the date of offer of possession, uptill the date of filing of the present petitions.
23. To clarify any ambiguity, what has been observed in relation to CWP No.989 of 2012, would also apply mutatis mutandis to Plot No.D.S. 12, Sector-29, Urban Estate, Panipat, which is subject matter of Civil Writ Petition No.1065 of 2012.
CWP No.989 of 2012 & -13-CWP No.1065 of 2012
24. Both the petitions stand disposed of as above, with no order as to costs.
(AMOL RATTAN SINGH)
JUDGE
April 29, 2013 (SATISH KUMAR MITTAL)
vcgarg JUDGE