National Consumer Disputes Redressal
Haryana Urban Development Authority ... vs M/S Suneja And Sons on 18 August, 2011
NATIONAL CONSUMER
DISPUTES REDRESSAL COMMISSION
NEW DELHI
Revision
Petition No. 2951 of 2009
(Against the order dated 12.12.2008 in Appeal no.
2790 of 2004 of the Haryana State Consumer Disputes Redressal Commission,
Panchkula)
1. Haryana Urban Development Authority (HUDA)
Sector
6, Panchkula
Through
its Chief Administrator
2.
Estate Officer, Haryana Urban Development Authority (HUDA)
Sector 14, Urban Estate, Gurgaon
Petitioners
versus
M/s
Suneja and Sons
House
no. F 115, Vikas Puri
New
Delhi
Through
its Director P. K. Suneja son of Shri L. C. Suneja
Respondent
BEFORE:
HONBLE MR. ANUPAM DASGUPTA PRESIDING MEMBER
For the Petitioner Mr. R. S. Badhran, Advocate
For the Respondent Mr. Sukumar Pattjoshi, Advocate
Pronounced on 18th August 2011
ORDER
Anupam Dasgupta M/s.
Suneja and Sons Pvt. Ltd., the respondent in this revision petition was the complainant before the District Consumer Disputes Redressal Forum, Gurgaon (in short, the District Forum), while the petitioner, the Haryana Urban Development Authority (in short, the HUDA) was the opposite party (OP) 1 and its Estate Officer, Urban Estate, Gurgaon was the OP 2. For the sake of convenience, I shall refer to the parties by their status before the District Forum.
2. The complainant was the successful bidder in the auction of shop-cum-office (SCO) site no. 41, Old Judicial Complex (OJC), Gurgaon and was allotted the said site by OP 2 under his allotment letter dated 28.04.1989. As directed in the allotment letter, the complainant paid 25% of the accepted bid price of Rs.22, 03,100/- of the site within the stipulated period of 30 days of the date of acceptance of the bid. The letter of allotment gave the purchaser the option to pay the balance amount in one lump sum or in installments.
3. It is useful at this stage to reproduce the relevant clauses of the letter of allotment:
5. The balance amount of Rs.16, 52,325/- 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 in 8 half-yearly installments. The first installment will fall due after the expiry of six months of the date of issue of this letter. Each installment would be recoverable together with interest on the balance price at 10% interest on the remaining amount. The interest shall, however, accrue from the date of offer of possession.
6. The possession of the site will be offered to you on completion of the development works in the area. In the case of building or undeveloped land, the possession shall, however, be delivered within 90 days from the date of this letter.
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8. In case the installment is not paid by the 10th of the month following the month in which it falls 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 Act.
9. In the event of breach of any other condition of transfer, the Estate Officer may resume the land in accordance with the provisions of section 17 of the Act.
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25. 18% interest will be charged on delayed period.
[Emphasis supplied] The last clause (no. 25) was written in hand, i.e., added to the otherwise printed letter of allotment.
4. In accordance with clause 5, the schedule of payment of the eight half-yearly installments would thus have been as under:
Installment No. Due Date Amount (Rs.) I 27.10.1989 2,06,541/-
II 27.04.1990 2,06,541/-
III 27.10.1990 2,06,541/-
IV 27.04.1991 2,06,541/-
V 27.10.1991 2,06,541/-
VI 27.04.1992 2,06,541/-
VII 27.10.1992 2,06,541/-
VIII 27.04.1993 2,06,538/-
Total 16,52,325/-
5. By its letter dated 24.05.1991, OP 2 conveyed to the complainant that the developmental works in and around the site in question had not yet been completed and the possession of the plot would, therefore, be offered to the complainant on completion of such works. On the other hand, the complainant made no payment towards the balance cost during this entire period.
6. OP 1 offered possession of the plot finally by letter dated 10.11.2000, i.e., nearly 91/2 years after the issue of the letter of 1991 and 111/2 years after the letter of allotment. The complainant took possession of the plot on 24.11.2000 and deposited the building plan for construction thereon along with the necessary fees on 09.05.2001.
7. It would appear that on 27.09.2001 OP 2 issued a notice to the complainant asking it to show cause under section 17(1) of the HUDA Act as to why an amount of Rs. 83,17,989 should not be recovered from it towards the balance cost of the site along with interest and penalty. Though this show cause notice did not find any mention therein, it would also appear that it was this notice that led the complainant to file a complaint before the District Forum on 27.09.2001 with prayers for several directions. It would also appear that while the complaint was pending before the District Forum, OP 1/2 issued a notice dated 19.11.2001 under section 17(3) of the HUDA Act asking the complainant to show cause why the plot should not be resumed.
8. It is also not in dispute that the complainant made, in quick succession, the following payments towards the balance cost of the plot on the dates mentioned in the table below:
Bank Draft Date Amount (Rs.) 16.01.2002 3443/-
16.01.2002 13,769/-
16.01.2002 2,06,541/-
16.01.2002 2,06,541/-
26.02.2002 3,95,870/-
27.03.2002 5,26,161/-
08.09.2002 3,00,000/-
Total 16,52,325/-
However, by his letter of 19.06.2002 OP 2 returned these 7 bank drafts to the sender/complainant with the remarks that payment will be accepted after the approval of Head Quarters. It is unclear how OP 2 could return a bank draft dated 08. 09.2002 to the sender/complainant under a letter of 19. 06.2002, i.e., nearly 3 months prior to the date of the bank draft. Be that as it may.
9(i) Sometime later, OP 2 enhanced the total demand to Rs.1,05,81,251/- from the earlier amount of Rs. 83,17,989/-. Though the circumstances leading the complainant to approach the Punjab and Haryana High Court by way of a Civil Writ Petition (no. 1975 of 2002) are not very clear, it would appear that the immediate cause was the notice(s) issued by OP 1/2 raising these large demands on account of the balance cost of the allotted SCO plot.
(ii) On 31.01.2002, the High Court passed the following order in this CWP:
On January 31, 2002, while issuing notice of motion, we had made the following order:
Present:
Mr. Surinder Singh, Advocate Notice of motion for 14.05.2002 Meanwhile, the petitioner will approach the Estate officer, Haryana Urban Development Authority, Gurgaon and verify from him the total amount of installments due from him without interest. The Estate officer will furnish the details of the amount due after excluding interest and the petitioner will deposit the same in two equal monthly installments.
10(i) The contention of the complainant is that even after the above-mentioned order of the High Court, the demand raised by OP 1/2 continued to be worked out taking the interest rate at 18% per annum with effect from the original scheduled dates of payment of the eight installments of the balance 75% cost of the cost of the plot instead of simple interest @ 10% per annum which, according to the complainant was based on clause 5 of the letter of allotment.
(ii) This led the complainant to again approach the High Court when the Court passed the following order on 20.11.2003:
It is the case of the petitioners counsel that the statement of accounts has not been provided to him. Ms. Vandana Malhotra, the learned counsel appearing for the_________________________ (illegible) this statement of the counsel for the petitioner.
In the interest of justice, accordingly, we quash the order Annexure R 4 and direct the respondents to furnish a full statement of accounts of the amounts due to the petitioner clearly specifying the method and mode of calculation. The petitioners counsel also undertakes to deposit a sum of Rs.30 lakh within two months from today as an interim arrangement subject to verification and adjustment in the terms stated above. In case the petitioner feels aggrieved by any order that is subsequently made he would be at liberty to approach this Court yet again.
11. Soon after this order of the High Court, the District Forum also passed its order dated 27.11.2003 disposing of the complaint, with the following observations and directions:
On the face of it, the plea of the respondent is not tenable. The complainant has already deposited the 25% amount against the tentative cost of the site in question and the remaining amount was to be deposited on the offer of possession. But the possession of the plot was not delivered to the complainant as per the terms and conditions of the allotment letter. Moreover, the complainant has been waiting for the site for one decade and instead of taking any action, the respondent resumed the plot already which cannot be resumed in view of the above discussion. After considering all the facts from all corners we found force in the complaint filed by the counsel for the complainant and the citations cited (supra) on his behalf.
In these circumstances, the respondent is directed to restore the booth site no. 41 and to deliver the possession within one month from the date of receipt of the copy of this order. The respondents are further directed to pay interest over the entire deposits of the complainant @ 18% from the date of respective deposits till the date of possession of the site is delivered. It is further ordered that the remaining installments be charged from the complainant as per HUDA policy and the interest on the installments shall be liable after offer of possession of the site till date.
12. This order was challenged by the OPs before the Haryana State Consumer Disputes Redressal Commission, Panchkula (in short, the State Commission). The relevant parts of the State Commissions order dated 12.12.2008 are reproduced below:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Ms. Raminder Gadhoke, Advocate along with Shri. R. K. Gaba and Shri. Virender Singh officials of the Estate Office, Gurgaon have accepted the offer of the complainant subject to the condition that the appellant is entitled to received the compound interest.
We have taken notice of the judgment of the Honble National Commission passed in the case Estate Officer, HUDA, Ambala vs Gurdial Singh decided on 03.02.2005, wherein the Honble National Commission relied upon the judgment of SBI vs Ganjam, reported in 1993-3-PLR 435 wherein Honble Supreme Court (sic - National Commission?) has observed as under:
Coming to the merits of the case, we find as per law laid down by the Honble Supreme Court in its judgment (supra) held that were the agreement does not provide for payment of compound interest then it cannot be charged. Nothing has been brought before any consumer forums by the petitioner that charging of compound interest was as per terms of the agreement be it letter of allotment or re-allotment or any other document. The contention of the learned counsel for the petitioner is that they are charging interest as per the policy of HUDA. Policy is not on record, but what we see from the material on record is that as per instructions of HUDA 03.01.1985 when there is outstanding amount, simple rate of interest has to be charged up to the issue of recovery notice and thereafter compound rate of interest has been charged. Thus, in view of the judgments of Honble Supreme Court (supra), in the absence of any agreement to the contrary, the petitioner cannot charge compound rate of interest on the strength of instructions of which the complainant/ any consumer is oblivious. It may also be mentioned that in large number of judgments with regard to HUDA only, this Commission has held HUDA can charge only simple rate of interest.
Keeping in view the observations made by the Honble Supreme Court as well as Honble National Commission, we reject the plea of the appellant to charge the compound interest.
In this view of the matter, this appeal is disposed of on the terms indicated above.
13. Aggrieved by this order, the OPs filed this revision petition before this Commission after a delay of 144 days.
14. Before proceeding further with the matter, let it be noticed that the complainant had approached the District Forum with an application under section 25 and 27 of the Consumer Protection Act, 1986 (in short, the Act) for execution of the order of the District Forum by its application dated 27.05.2005, even while the HUDAs appeal before the State Commission was pending. By its order dated 17.09.2009 on the execution application, the District Forum gave the following directions:
We find force in the arguments advanced by the counsel for the complainant/DH. In our opinion the opposite parties could not charge compound interest in view of the observations made by the Honble High court of Punjab and Haryana (DB) in civil writ petition no. 15253 of 1998 decided on 16.11.1999 titled as Smt. Kanta Devi Budhiraja vs State of Haryana reported as 2001 (3) RCR (Civil) 277 and also in view of the observations made by the Honble State Consumer Disputes Redressal Commission, Haryana, Panchkula in First Appeal no. 2790 of 2004 decided on 12.12.2008 wherein it was held that HUDA could not charge compound interest. In our opinion the calculations submitted by the complainant had been made as per law. The complainant/DH is entitled to recover Rs.22,68,037/-.
15. This order of the District Forum reproduced in detail (vide its paragraph 4) the entire calculation of the total amount of Rs.1,14,13,050/- demanded by HUDA on 25.09.2003 towards the balance cost of the plot. Further, by its order dated 30.12.2009, in continuation of the execution proceedings, the District Forum directed as under:
Now a letter be written to the concerned bank to issue a draft in the name of this Forum amounting to Rs.22,68,037/- which was attached by this Forum vide order dated
09.11.2009. For further proceedings the case is adjourned to 11.01.2010.
16. However, for some reason the complainant sought to withdraw the execution proceedings which the District Forum allowed by its order of 28.01.2010.
17. I have heard Mr. R. S. Badhran, learned counsel for the petitioner/OPs and Mr. Sukumar Pattjoshi, learned counsel for the respondent/complainant.
18. Along with the revision petition, the petitioners have filed an application for condonation of delay with the following grounds for condonation:
2. That the Honble State Commission announced the order on 12.12.2008 and the copy of order was prepared on 19.12.2008 and issued on 24.12.2008. In the office of Estate Officer, Gurgaon copy of the order was received on 25.02.2009 and the same was sent to the Head Office at Panchkula for taking appropriate action.
3. That after receiving the copy of the order from the office of Estate Officer, Gurgaon, the case was examined by the Legal Branch. The District Attorney, HUDA, Panchkula after verification of the facts and legal position of the case proposed for filing revision petition against the order passed by the Honble State Commission. The file was put up before the Chief Administrator, HUDA, Panchkula with the proposal for filing the revision petition on 20.04.2009. The Chief Administrator, HUDA approved the proposal for filing the revision petition and engagement of the counsel on 27.04.2009. The counsel engaged by the applicant prepared the draft revision petitioner and sent to the Estate Officer, HUDA Gurgaon. In the office of Estate Officer, HUDA Gurgaon the file was processed for verification of the facts from the Accounts Branch and thereafter in the Allotment Branch and thereafter put before the Estate Officer. After verification of the facts the file was sent to the Head Office along with the draft revision petition on 12.06.2009. The draft revision petition was approved on 03.07.2009 and sent to the Counsel for filing the revision petition. The whole process was time consuming. Thus there is a delay for filing of 144 days in filing the revision petition.
4. That the delay in filing the present revision petition is neither deliberate nor intentional but on account of aforementioned circumstances.
5. That there are sufficient grounds which warrant the condonation of delay in filing the present revision petition as the petitioners have not been benefited in any manner whatsoever on account of delay in filing the present revision petition. For substantial justice the Honble Commission is fully empowered under the Consumer Protection Act to condone the delay. The petitioner is a Government authority and the delay in filing the revision petition is procedural delay as well and the same is not intentional. The application of the applicant is liable to be accepted in view of the observations made by the Honble Supreme Court of India in SLP no. 131 of 2206 dated 12.08.2008 titled as State (NCT) of Delhi vs Ahmed Jaan. The Honble Supreme Court while deciding the above said SLP observed thus In litigation to which Government is a party, there is yet another aspect which, perhaps, cannot be ignored. If appeals brought by Government are lost for such default, no person each individually effect (sic) but what in the ultimate analysis, suffer is public interest. The decisions of Government are collective and institutional decisions and do not share the characteristics of decision of private individual.
19. Apart from justifying the delay, Mr. Badhran has vehemently argued that the dispute could not have been entertained at all by the consumer forum, in view of the fact that the complainant/respondent purchased the site in question in an open auction from the petitioner and such a transaction was ab initio outside the purview of the Act in the light of the Apex Courts decision in UT Chandigarh Administration vs Amarjeet Singh [II (2009) CPJ 1 SC)]. He also placed reliance of the Apex Courts ruling in Municipal Corporation, Chandigarh and Ors vs Shantikunj Investment (P) Ltd., [(2006) 4 SCC 109] and HUDA vs Sunita [(2005) 2 SCC 479].
20. On the other hand, Mr. Pattjoshi learned counsel for the respondent/complainant strongly opposed the application for condonation of delay filed by the petitioner. According to him, the grounds cited in the application for condonation of delay were of absolutely routine nature and could not constitute sufficient cause to warrant condonation of delay of such a magnitude. In this context, he sought to rely on the Apex Courts ruling in the State Bank of India vs B. S. Agriculture Industries (I) [(2009) 5 Supreme Court Cases 121]
21. According to Mr. Pattjoshi, the case of the petitioners could not be sustained even on merits:
(i) Though the complainant complied with the terms and conditions of payment of 25% of the cost of the plot within the stipulated time, the petitioner miserably failed to offer possession of the plot within a reasonable period. The facts that eight half-yearly installments were allowed for paying the balance cost of the plot and the first installment was due after six months from the date of the letter of allotment were indicative that after completing all developmental works in the area, possession of the plot should have been given (or, at least offered) in normal course within six month or one year from the date of the letter of allotment.
The petitioner, being a public authority established under an Act of the State Legislature, was obviously not meant to delay the developmental works (and hence the possession of the plot) with a view to maximising income from interest on the balance installments. If, according to clause 5 of the letter of allotment, interest could be charged only from the date of offer of possession and only at 10% per annum, the hand-written condition/clause no. 25 stipulating interest @ 18% per annum on delayed payment could not be applied to all installments falling due from 27.10.1989 onwards. In other words, the only logical and harmonious interpretation of these two clauses relating to levy of interest would be to levy interest on payments due from the date of offer of possession of the plot, which was 10.11.2000 in this case. Further, the petitioner would certainly not be justified in charging compound interest even if it was assumed, for the sake of argument, that the rate of interest could be 18% per annum instead of 10%. In fact, by submitting the same calculations of interest as had been explicitly quashed by the order dated 20.11.2003 of the Punjab and Haryana High Court, the petitioners had compounded this deliberate misfeasance. The respondent/complainant had proved its bona fide by depositing as large a sum as Rs.30 lakh on 29.12.2003 in compliance of the order dated 29.11.2003 of the High Court. Despite this position and the findings of the District Forum in dealing with the complainants execution application that it had deposited excess amount with the petitioner, the latter demanded compound interest @ 18% per annum from the so-called due dates of each installment and also refused to sanction the building plan of the respondent/complainant submitted many years ago. To compound this highhandedness, the petitioner also tried to levy penalty for non-construction on the allotted plot on the ground that the respondent/complainant had failed to raise and complete construction within the stipulated time under clause 16 of the letter of allotment.
(ii) As regards reliance on the Apex Court judgment in the case of UT Chandigarh Administration vs Amarjeet Singh and Ors., Mr Pattjoshi emphasised that reliance ought to be placed instead on two subsequent judgments of the Apex Court, namely, Haryana Urban Development Authority and Another v Satish Hans [(2009) 7 SCC 282] and Madan Kumar Singh vs District Magistrate, Sultanpur [IV (2009) CPJ 3 (SC)] decided respectively on 29.04.2009 and 07.08.2009. Drawing upon the case of HUDA v Satish Hans, Mr. Pattjoshi argued that in a similar matter relating to rectification of statement of accounts of an auction purchaser, the Apex Court did not set aside the order of this Commission on the ground that the complainant being an auction purchaser could not at all qualify as a consumer. However, the Apex Court remanded the matter back to this Commission in view of the specific fact of that the case, viz., the complainant in that case had already availed of the channel of remedy of moving the appellate authority provided for under the relevant provisions of the HUDA Act. In the case of Madan Kumar Singh vs District Magistrate, Sultanpur, on the other hand, the auction purchaser of a vehicle, who was deprived of possession and plying of the vehicle, was held to be a consumer under the Act. The ratio of this case, according to Mr. Pattjoshi, was squarely applicable to this case, because the petitioner had deviated from the terms of allotment and withheld sanction of the building by raising erroneous and arbitrary demands on the balance cost of the plot. Mr. Pattjoshi, therefore, submitted that the demand for the balance cost should be revised by the petitioner by working out simple interest @ 10% per annum with effect from the date of offer of possession till the date of deposit of the sum of Rs. 30 lakh by the respondent/complainant and the balance amount should be refunded to the respondent/complainant by the petitioner with simple interest @ 9% per annum. He concluded by requesting that the petitioner sanction the building plan submitted by the respondent/complainant expeditiously to enable construction on the plot.
DISCUSSION The Delay
22. There is considerable force in the submissions of Mr. Pattjoshi regarding insufficiency of the grounds cited by the petitioners for condoning the long delay of 144 days in filing this revision petition. Prima facie, the causes cited by the petitioners in their application are o better than mere narration of the labyrinthine journey of the file/s in the process of decision-making, without any supporting documentation and cannot be said to constitute sufficient cause, under section 24A of the Act, to warrant condonation of such a long delay. However, the revision petition raises some important points of law that have wider ramifications and it would be desirable in the interest of the consumers as well as the Development Authorities like the petitioners to address these points. It is with this view that I am inclined to condone the delay in this case, subject to the petitioners depositing a sum of Rs. 10,000/- with the Consumer Legal Aid Account of this Commission and paying a like cost to the complainant within four weeks of the date of this order.
The Consumer Status 23(i) Mr. Badhran has vehemently argued that the respondent/complainant could not be termed a consumer under the provisions of section 2(1)(d) of the Act in the light of the Apex Courts ruling in respect of an auction purchaser of a plot of land/house in an open auction on as is where is basis.
(ii) In the case UT Chandigarh Administration v Amarjeet Singh (supra), the Apex Court has held as under:
18. The decision in LDA and GDA make in clear that where a public development authority having invited applications for allotment of sites in a layout to be formed or for houses to be constructed and delivered, fails to deliver possession by forming the layout of sites or by constructing the houses within the stipulated period, the delay may amount to a deficiency in service by treating the development authority as a service provider and the allottee as the consumer. But where existing sites are put up for sale or lease by public auction by the owner, and the sale/lease is confirmed in favour of the highest bidder, the resultant contract relates to sale or lease of immovable property. There is no hiring or availing of services by the person bidding at the auction. Nor is the seller or lessor, a trader who sells or distributes goods. The sale price or lease premium paid by the successful bidder of a site is the consideration for the sale or lease, and not consideration for any service or for provisions of any amenity or for sale of any goods.
20. Where there is a public auction without assuring any specific or particular amenities, and the prospective purchaser/lessee participates in the auction after having an opportunity of examining the site, the bid in the auction is made keeping in view the existing situation, position and condition of the site. If all amenities are available, he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount, or may not participate in the auction. Once with open eyes a person participates in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price/premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided.
21. With reference to a public auction of existing sites (as contrasted from sites to be formed), the purchaser/lessee is not a consumer, the owner is not a trader or service provider and the grievance does not relate to any matter in regard to which a complaint can be filed. Therefore, any grievance by the purchaser/lessee will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction-purchaser/lessee against the owner holding the auction of sites.
24(i) Mr. Badhran seeks to rely on paragraphs 18, 20 and 21 of the Apex Court judgment reproduced above in challenging the identity of an auction purchaser like the complainant as a consumer under the Act. In the first flush, Mr. Badhrans submission appears to be persuasive. However, quieter consideration of the facts of this case, on the one hand, and the Apex Courts judgment as a whole, on the other clearly establishes that Mr. Badhrans basic premise is flawed.
(ii) This is so in view of the explicit provisions of clause 6 of the letter of allotment, already reproduced above, according to which the Development/Housing Authority like the petitioner/s unambiguously promised to offer possession of the auctioned plot of land on completion of developmental works in the area. In a situation like this, the auction purchaser of an existing site/plot/house will certainly be a consumer of, in accord with the provisions of section 2(1)(d)(ii) of the Act, the promised developmental service of the Authority in question, from the date of the letter of allotment till such time the promised service/s is/are delivered to the satisfaction of the purchaser, in accordance with the service providers, i.e., the Authoritys commitment in this behalf. The ruling of the Apex Court in the UT Chandigarh case does not, in my respectful view, cater for a situation where an auction purchaser buys an existing plot of land, not on as is where is basis but with an explicit commitment on the part of the original owner/auctioning entity to offer possession after completion of development works in the area. It is also true that in neither of the two cases quickly following the UT Chandigarh case (as cited by Mr. Pattjoshi, vide paragraph 22(ii) above) did the Apex Court find it fit to disentitle an auction purchaser to its simultaneous identity of a consumer under the Act. Therefore, the principal legal ground on which this revision petition is based has to be firmly rejected.
The Interest Issues
25. The essential dispute in this case, however, revolves around the questions relating to interest on the balance (75%) cost of the auctioned site, viz., leviability per se of any interest other than that under clause 5 of the letter of allotment, rate of such interest, method of its computation - simple or compound and the date of effect.
26. To examine these issues, it is necessary to first read the relevant provisions of the Haryana Urban Development Authority Act, 1977 (hereafter, the HUDA Act) and the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 (hereafter, the L&B Regulations or, simply, the Regulations):
The HUDA Act, 1977
15.
Disposal of the land (1) Subject to any directions given by the State Government under this Act and the provisions of sub-section (5), the Authority may dispose of
(a) any land acquired by it or transferred to it by the State Government without undertaking or carrying out any development thereon; or
(b) any such land after undertaking or carrying out such development as it thinks fit, to such persons, in such manner and subject to such terms and conditions, as it considers expedient for securing development.
(2)Nothing in this Act shall be construed as enabling the authority to dispose of land by way of gift, but subject to this condition, reference in this Act to the disposal of land shall be construed as reference to the disposal thereof in any manner, whether by way of sale, exchange or lease or by the creation of any easement right or privilege or otherwise.
(3)Subject to the provision hereinbefore contained, the Authority may sell, lease, or otherwise transfer whether by auction, allotment or otherwise, any land or building belonging to it on such terms and conditions as it may, by regulations, provide.
(4)The consideration money for any transfer under sub-section (1) shall be paid to the Authority in such manner as may be provided by regulations.
(5)Notwithstanding anything contained in any other law, for the time being in force, any land or building or both, as the case may be, shall continue to belong to the authority until the entire consideration money together with interest and other amount, if any, due to the Authority, on account of the sale of such land or building or both is paid.
(6)Until the conditions provided in the regulations are fulfilled, the transferee shall not transfer his rights in the land or building except with the previous permission of the Authority, which may be granted on such terms and conditions, as the authority may deem fit.
16. Imposition of penalty and mode of recovery of arrears (1) Where any person makes default in the payment of
(a) any rent due in respect of any lease of any land of building or both, as the case may be, under section 15; or
(b) any fee or contribution payable under this Act is respect of any land or building or both, the Estate Officer may direct that in addition to the amount or arrears, a sum not exceeding that amount shall be recovered from the person by way of penalty;
Provided that no such direction shall be made unless the person affected thereby has been given a reasonable opportunity of being heard in the matter.
(2) Where any person makes default in the payment of any amount, being the arrears or penalty or both, directed to be paid under sub-section (1) such amount may be recovered from him in the same manner as arrears of land revenue.
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 installment, 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 percent 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 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 person 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 for 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.
[(8) Any person aggrieved by an order of Chief Administrator under sub-section (6) may within a period of ninety days of the date of the communication to him of such order, prefer a revision petition to the Secretary to Government of Haryana, Town and Country Planning Department in such form and manner as may be prescribed.
Provided that the Secretary to Government, Haryana, Town and Country Planning Department, may entertain the revision petition after the expiry of the said period of ninety days, if he is satisfied that the petitioner was prevented by sufficient cause from filing the revision petition in time.
(9) The Secretary to Government, Haryana, Town and Country Planning Department, may, after hearing the revision, confirm, vary or reverse the order appealed from and may pass such order as he deems fit:
Provided that the Secretary to Government, Haryana, Town and Country Planning Department, shall not pass an order under this section without hearing the parties] 1 _____________________________
1. Added vide Act no. 11 of 2004 dated 17.03.2004 The L&B Regulations
3. Mode of disposal Subject to any direction issued by the State Government under the Act and to the provisions of sub-section (5) of section 15 of the Act:
(a) the Authority may dispose of any land belonging to it in developed or an undeveloped form;
(b) any land or building of the Authority may be disposed of by Authority by way of sale or lease or exchange or by the creation of any easement right or privilege or otherwise;
(c) the Authority may dispose of its land or building by way of sale or lease either by allotment or by auction, which may be by open bid or by inviting tenders.
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5. Procedure in case of sale or lease of land by allotment-
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (6) The payment of balance of the price/premium shall be made, in the manner as may be communicated, in lump sum or in such number of annual or half-yearly installments not exceeding ten as may be decided by the Authority from time to time. The amount of first installment shall be payable within one year or six months from the date of allotment and the subsequent installments shall similarly accrue every year/half yearly on the due date, as the case may be.
(7) Each installment 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 from the date the last installment was due to the date he makes the payment.
6. Sale or lease of land or building by auction (1) In the case of sale or lease by auction the price/premium to be charged shall be such reserve price/premium as may be determined taking into consideration the various factors as indicated in sub-regulation (1) of Regulation 4 or any higher amount determined as a result of bidding in open auction.
(2)10 per cent of the highest bid shall be paid on the spot by the highest bidder in cash or by means of demand draft in the manner specified in sub-regulation (2) of Regulation 5. The successful bidder shall be issued allotment letter in form CC or C-II by registered post and another 15 per cent of the bid accepted shall be payable by the successful bidder in the manner indicated, within thirty days of the date of allotment letter conveying acceptance of the bid by the Chief Administrator, failing which the 10 per cent amount already deposited shall stand forfeited to the Authority and the successful bidder shall have no claim to the land or building auctioned.
(3)The payment of balance of the price/premium, rate of interest chargeable and the recovery of interest shall be in the same manner as provided in sub-regulations (6) and (7) of Regulation 5.
(4)The general terms and conditions of the auction shall be such as may be framed by the Chief Administrator and announced to the public before auction on the spot.
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11. If any instalment of premium, ground rent, unearned increase or any other dues in respect of any lease of any land/building or both is not paid within 30 days from the date it falls due, the Estate officer shall proceed against him in accordance with the provisions of section 16 of Act.
12. In case the price or any instalment 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.
13. Delivery of possession The position of the land shall be delivered to the transferee or lessee as soon as the development works in the area where the land is situated are completed.
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17. Time within which building is to be erected The transferee or lessee shall complete the building within a period of two years from the date of offer of possession of the land, in accordance with the regulations regulating the erection of building;
Provided that the time limit may be extended by the Estate Officer if he is satisfied that the failure to complete the building was due to causes beyond the control of the transferee or lessee.
27(i) Thus, the relevant provisions of the HUDA Act (section 15) and the L&B Regulations (regulation 6) read together lay down that for sale of land by auction by the HUDA (as was the situation in this case), the terms and conditions shall be as prescribed under the L&B Regulations, which (vide regulation 6(2)) include that the successful bidder must pay (a) 10% of the accepted (bid) price on the spot and (b) an additional 15% of the price within 30 days of the date of the letter of allotment. The failure to pay the 15% component of the price within the said 30 days would entail forfeiture of the initial 10% payment and loss of all claims to the land. Needless to recall, the respondent in this case complied with these stipulations.
(ii) This regulation also provides that the letter of allotment shall be in Form CC (for disposal of land/building by auction on free-hold basis) or CII (for disposal of land/building by auction on lease-hold basis) and specimens of these Forms are appended to the L&B Regulations.
(iii) Clause 5 of the Form CC (which is the Form prescribed for letter of allotment of land/building disposed of by auction on free-hold basis) and also clause 5 of the letter of allotment issued to the respondent in this case, gave an option to the auction purchaser (respondent) to either pay the balance 75% of the cost of the land without any interest within 60 days of the date of issue of the letter of allotment or in 8 half-yearly instalments with interest on the balance price at 10% interest on the remaining amount (vide para. 3 above). The first installment of the balance price was due after the expiry of six months of the date of issue of this letter. It is noticed that this is the only clause in the prescribed Form CC, as appended to the L&B Regulations, which mentions levying of interest and leaves the figure of the rate to be specified.
(iv) The consequences of a purchaser/allottee of land disposed of on free-hold basis by auction failing to pay any installment of the price of the land are specified in Regulation 12 of the L&B Regulations, noticed above. The corresponding clause (clause 8) of the letter allotment reads, In case the installment is not paid by the 10th of the month following the month in which it falls due, the Estate Officer shall proceed to take action for imposition of the penalty and resumption of plot in accordance with section 17 of the Act. [Emphasis supplied].
(v) Perusal of sub-sections (1) and (2) of section 17 of the HUDA Act shows that for defaults in due payments, the penal provisions do not include imposition of any interest on the defaulting auction purchaser (other than that already provided for in clause 5 for payment of balance cost in instalments) but a penalty not exceeding 10% of the amount overdue. On further failure of the auction purchaser to pay the overdue amount/s along with the penalty within the period stipulated in the order under section 17(2), section 17(3) provides for issuance of a second notice to show cause why the land should not be resumed and 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 in respect of the sale of land or building, or both should not be forfeited. Section 17(4) empowers the Estate Officer to issue the order of resumption of the land and of forfeiture and the subsequent sub-sections provide for appeal, revision, etc. In other words, section 17, which alone is to be invoked for action in respect of default in paying any installment of the price or breach of any other condition of the allotment/sale by an auction purchaser of land sold on free-hold basis does not prima facie provide for imposition of any penalty in the shape of an interest at a rate higher than that provided for in clause 5 of the letter of allotment.
(vi) The basis of charging interest @ 18% per annum in this case is clause 25 of the letter of allotment, added in hand. The last unnumbered clause in the prescribed Form CC, after clause 22, reads as under:
(Any other condition not incorporated above, but announced at the time of auction, to be indicated).
Therefore, it is obvious that the foregoing general clause can be the only legally valid basis of clause 25 of the letter of allotment issued in this case. Two points are important in this respect. First, it is not the pleading of the HUDA before the District Forum that this higher rate of interest (18% per annum) for delayed payment was announced as a condition at the time of the auction in this case. Secondly, and more important, when it was specifically provided for in clause 8 of the allotment letter (deriving its validity from Regulation 12 of the L&B Regulations) as to what action had be taken by the Estate Officer in case the installment is not paid by the 10th of the month following the month in which it falls due, i.e., in case of delayed payment, the HUDA could not be heard to say that the contingency of delayed payment had not been provided for in the allotment letter prescribed in Form CC appended to the L&B Regulations and hence clause 25 had to be specially incorporated in hand in the letter of allotment issued to the respondent, using the authority of the residuary clause mentioned above.
(vii) As regards the method of calculation of interest, i.e., simple or compound, it is once again clear that neither the L&B Regulations nor the Form CC appended to the Regulations provide for such method. It is settled law that interest cannot be levied at compounded rates unless specifically agreed to or provided for in the stipulated arrangement.
(viii) Finally, as regards the date/dates from which to levy the permissible rate of interest on the installments of balance cost, clause 5 of the allotment letter (flowing from sub-regulation (3) of regulation 6, read with sub-regulations (6) and (7) of Regulation 5) explicitly provided that interest @ 10% per annum would be leviable only from the date of offer of possession of the land. Normal expectation would be for possession of the auctioned land to be offered after completion of developmental works within a reasonable period of time from the date of issuance of the letter of allotment. It can be nobodys case that a public authority, funded with the money paid by the tax payers in the State can delay the developmental works indefinitely without any reasonable cause just so to charge interest with effect from the so-called stipulated due dates of payment of half-yearly/yearly installments of the balance cost of plot without any commitment on the date of delivery of the possession. Therefore, to be consistent with sub-regulation (3) of Regulation 6, read with sub-regulations (6) and (7) of Regulation 5 and clause 5 of the letter of allotment, it has to be held that interest leviable on the installments of balance cost would accrue from the date of offer of possession of the plot of the land if possession is offered much after the otherwise due date of the last yearly/half-yearly installment.
28. In this case, the balance cost as on the date of offer of possession of the plot (10.11.2000) was the entire 75% of the amount of the accepted bid, i.e., Rs. 16,52,325/-. It is an admitted position that on 29.12.2003, the respondent/complainant deposited a sum of Rs. 30 lakh with the petitioner. The petitioner would be entitled to charge simple interest @ 10% per annum on the sum of Rs. 16,52,325/- from 11.11.2000 to 28.12.2003. After adjusting the total amount (balance cost plus interest) due from the respondent, calculated in the aforesaid manner, the petitioner would be liable to refund the balance, if any, out of Rs.30 lakh deposited, to the respondent/complainant with interest @ 9% per annum with effect from 28.12.2003. Further, the petitioner would have no ground to refuse/delay the sanction of the building plan of the respondent/complainant any longer unless there are serious technical objections to the building plan.
29. In conclusion, the revision petition is dismissed with the following directions:
(i) The petitioner shall deposit Rs.20,000/- by way of cost towards condonation of delay in filing this revision petition with the Consumer Legal Aid Account of this Commission within four weeks from the date of this order.
(ii) The petitioner shall refund to the respondent/complainant the difference, if any, between Rs. 30 lakh deposited by it and the sum due to the petitioner from it on account of the balance cost of the land along with simple interest thereon @ 10% per annum from 11.11.2000 to 28.12.2003. This refund amount, if any, shall carry simple interest @ 9% per annum with effect from 28.12.2003 till the actual payment. This shall also be done within four weeks from the date of this order.
(iii) The petitioner shall consider the building plan submitted by the respondent/complainant for construction to be raised on the plot in question and convey its decision in accordance with the provisions of the L&B Regulations within six weeks from the date of this order. It is hoped that the petitioner will adopt a fair and equitable approach in dealing with the respondents construction proposal.
(iv) In the circumstances of the case, there shall be no order as to cost.
30. Before parting with the matter, a few general observations would be in order. It is clear that the letters of allotment of land and/or buildings, as prescribed under the L&B Regulations derive their legal sanctity from the provisions of the HUDA Act, 1977 or the HUD (L&B) Regulations, 1978. Yet, some of the provisions of the pre-printed allotment letter are not in consonance with those of the corresponding Regulation/s. For example, while Regulation 5(7) lays down that no interest will be payable if the entire balance price of a plot of land/building is paid within 60 days of the date of offer of possession, clause 5 of the allotment letter (Form CC) states that this period would be 60 days from the date of the letter of allotment. As already noticed, penal rate of interest or interest at compound rates is not provided for in any of the sections of the HUDA Act or the HUD (L&B) Regulations to deal with cases of delay/default in payment. Yet, this was done in this case and is routinely done in most cases. It is hoped that the HUDA would take steps to remove these discrepancies and inconsistencies and also make clear and equitable provision in the Regulations to cater for situations (like that in this case) where offer of possession is given well beyond the due date of payment of the last installment of price/premium.
Sd/-
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[ANUPAM DASGUPTA]