Punjab-Haryana High Court
Haryana Urban Development Authority & ... vs Vinod Mittal & Others on 16 October, 2012
Author: Hemant Gupta
Bench: Hemant Gupta, Rajiv Narain Raina
1
LPA No.933 of 2009 (O&M)
IN THE PUNJAB & HARYANA HIGH COURT AT
CHANDIGARH
Date of Decision: 16.10.2012
LPA No.933 of 2009 (O&M)
Haryana Urban Development Authority & another ...Appellants
Versus
Vinod Mittal & others ...Respondents
CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA
HON'BLE MR. JUSTICE RAJIV NARAIN RAINA
Present: Mr. Anupam Gupta, Senior Advocate, with
M/s Sidharth Batra, Angel Sharma & Karan Sandhu,
Advocates, for the appellants-HUDA.
Mr. Arun Palli, Senior Advocate, with
M/s Tushar Sharma, Fateh Saini, Arastu Chopra & Tarun Vir
Singh Lehal, Advocates, for the respondents-allottees.
HEMANT GUPTA, J.
1. This order shall dispose of aforementioned appeal along with bunch of other appeals and writ petitions, as mentioned in the foot note of the order, as all these cases raise common question of law and facts.
2. Challenge in LPA No.933 of 2009 is to an order passed by the learned Single Judge, therefore, the facts are taken from the said case alone. In the said appeal, the appellant is the Haryana Urban Development Authority (for short 'the Authority'), who has allotted plots to the respondents in the appeals or to the writ petitioners, who are for facility of reference called as 'the allottees' hereinafter.
Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 2 LPA No.933 of 2009 (O&M)
3. The dispute in this bunch of cases is to the levy of interest, compound interest and the penalty for not making the payment of installments in terms of the conditions of letter of allotment. Before we come to the terms & conditions of the letter of allotment the relevant Sections of the Haryana Urban Development Authority Act, 1977 (for short 'the Act') necessary to decide the issue involved, are reproduced as under:
"15. Disposal of 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) xxx xxx (3) Subject to the provisions 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 to 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 -
(i) any rent due in respect of any lease of any land or building or both, as the case may be, under Section 15; or
(ii) any fee or contribution payable under this Act in respect of any land or building or both, the Estate Officer may direct that in addition to the amount of 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.
Kumar Vimal2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 3 LPA No.933 of 2009 (O&M) (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 *be equal to ten percent 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.
xxx xxx xxx"
(Note *substituted for the words "not exceed" by Haryana Act No.41 of 2008)
4. It terms of Section 54 and Section 15(3) of the said Act, the Authority can make regulations with the previous approval of the State Government including the terms and conditions on which transfer of any right, title and interest in any land or building may be permitted. Section 55 of the Act provides for penalty for breach of rules and regulations punishable with fine which may extend to five hundred rupees and in case of continuing contravention with an additional fine which may extend to fifty rupees for each day of breach. The relevant provisions of Sections 54 & 55 of the Act read as under:
"54. Power to make regulations - The Authority may, with the previous approval of the State Government, make regulations consistent with this Act, and without prejudice to the generality of this power such regulations may provide for :-
xxx xxx xxx
(e) the terms and conditions in which transfer of any right, title
Kumar Vimal and interest in any land or building may be permitted;"
2012.10.16 13:39
I attest to the accuracy and
integrity of this document
Chandigarh
4
LPA No.933 of 2009 (O&M)
xxx xxx xxx
55. Penalty for breach of rules and regulation - Except as other-wise provided for in this act, and any contravention of any of the rules or regulations made thereunder shall be punishable with fine which may extend to five hundred rupees, and in the case of a continuing contravention, with an additional fine, which may extend to fifty rupees, for each day during which such contravention continues after the first conviction; and the court, while passing any sentence on conviction of any person for the contravention of any rule or regulation, may direct that any property or part thereof, in respect of which the rule or regulation has been contravened, shall be forfeited to the Authority:
xxx xxx xxx"
5. In terms of Section 54 of the Act, the Authority with the previous approval of the Government of Haryana made Haryana Urban Development (Disposal of Land and Building) Regulations, 1978 (for short 'the Regulations'). Regulation 3 of such Regulations permits the Authority to dispose of any land or building by way of sale or lease or exchange or by the creation of any easementary right or privilege or otherwise; whereas sub-
clause (c) contemplates disposal of land or building by the Authority either by allotment or by auction. Regulation 5 prohibits the procedure in case of sale or lease of land or building by allotment, whereas Regulation 6 prohibits procedure for sale or lease of land or building by auction. In terms of sub-
regulation (3) of Regulation 6, 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. The relevant extract of Regulation 5 reads as under:
"5. Procedure in case of sale or lease of land or building by allotment-
xxx xxx xxx (6) The payment of balance of the price/premium shall be made, in the manner as may be communicated, either in lump sum or in such Kumar Vimal number of annual or half yearly equal installments not exceeding ten, as 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 5 LPA No.933 of 2009 (O&M) 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 yearly/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 for the period from the date the last installment was due to the date he makes full payment.
*(7A) The payment of installment(s) on due date is mandatory. In case the payment of installment(s) is not made on due date, interest at the rate as may be decided by the Authority from time to time shall be chargeable on the delayed payment of installment(s) irrespective of the fact whether the possession has been offered or not."
(Note *added by Haryana Government Gazette Part III dated 29.11.2004)"
6. Form 'C' is the model form of allotment letter for allotment of residential/industrial/commercial plots/buildings by allotment framed in exercise of the powers conferred under Regulation 5(3). The relevant clauses in the Form 'C' read as under:
"6. The balance amount, i.e. Rs.______ of the above tentative price of the plot/building can be paid in lump sum without interest within 60 days from the date of the issue of the allotment letter or in _______ half yearly/annual installments. The first installment will fall due after the expiry of six months/one year of the date of issue of this letter. Each installment would be recoverable together with interest on the balance price at ______ per cent interest on the remaining amount. The interest shall, however, accrue from the date of offer of possession. *(6A) The payment of installment(s) on due date is mandatory. In case the payment of installment(s) is not made on due date, interest at the rate as may be decided by the Authority from time to time shall be chargeable on the delayed payment of installment(s) irrespective of the fact whether the possession has been offered or not.
(Note *added by Haryana Government Gaz. Part III dated 29.11.2004) Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 6 LPA No.933 of 2009 (O&M) (10) In case the installment is not paid by the 10th of the month following the month in which it falls due, (or in case the additional price is not paid within time) 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.
(11) 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.
(12) the land/building 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 sale of such land or building or both is paid. You shall have no right to transfer by way of sale, gift, mortgage, or otherwise the plot/building or any right, title or interest therein till the full price is paid to the Authority, except with the prior permission of the competent authority."
7. Form 'CC' is the model form of allotment letter used for residential/industrial/commercial plots/buildings disposed of by auction only in terms of Regulations 6. The relevant terms are identical with the conditions contained in letter of allotment in model Form 'C'.
8. In the present appeal, allotment letter (Annexure P-1) issued to the allottee on 05.10.1987 contemplates levy of interest at the rate of 10% on the deferred payment of the balance sale consideration in an allotment letter issued as per the model letter of allotment. The allotttee was granted occupation certificate on 04.10.1989. A show cause notice dated 03.04.1991 (Annexure P-4) was served upon the allottee for failure to make payment of Rs.14,41,499/-, to show cause as to why a penalty of Rs.1,44,150/- be not imposed. Another show cause notice dated 12.12.1991 (Annexure P-7) was served upon the allottee to show cause as to why penalty of Rs.1,77,059/- be not imposed upon the allottee and that interest at the rate of 18% per annum will be charged after due date.
Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 7 LPA No.933 of 2009 (O&M)
9. The allottee invoked the writ jurisdiction of this Court challenging the claim of interest at the rate of 18% per annum compounded half yearly being against the terms & conditions of the letter of allotment as without any authority of law and also for the fact that the necessary amenities have not been provided by the Authority, therefore, the interest will not accrue till such amenities are provided.
10. Apart from the objection taken in the written statement that the writ petition is premature, it is asserted that the development work is complete when the letter of allotment was issued and that the allottee is, in fact, an auction purchaser. It is mentioned that the water connection and the sewerage connections were sanctioned to the petitioner on 19.01.1988 and 09.11.1989 respectively, whereas the Damp Proof Course (DPC) Certificate was issued on 09.02.1988. It is pointed out that the allottee has only deposited a sum of Rs.1,42,125/-, whereas the total amount to be paid by the allottees is Rs.13,92,824.90. It is also stated that the Authority in its meeting held on 24.09.1992 has decided to grant benefits to the purchasers of the commercial sites, which have been constructed up to 31.07.1992, but also the installments were to be recovered with penal interest at the rate of 18% per annum as per policy of authority.
11. At this stage reference may be made to communication dated 19.09.1985 and circular dated 15.01.1987, the basis of claim of interest by the Authority, which read as under:
Circular dated 19.09.1985 "Sub.:Charging of Interest from the allottees on delayed payment.
--
Please refer to the above noted subject.
It is intimated that the question of formulating of uniform policy in Kumar Vimal respect of charging of interest from the allottee who make the payment of 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 8 LPA No.933 of 2009 (O&M) dues beyond stipulated period was discussed in the last meeting of the officers of HUDA held on 25.04.1985 and decided that in future the calculations of interest be compounded if the payment becomes over otherwise simple interest is chargeable. These instructions, therefore, be brought in the notice of all concerned for compliance." Circular dated 15.01.1987 "Sub.:Revised rates of interest of instalments of plot-holders.
--
It was under the active consideration of the Authority to charge higher rate of interest on the delayed payments. It was observed that the recovery of enhanced compensation and installments are not being effected from the plot-holders in time because of lower rate of interest. The matter has been examined in detail and it has been decided that following rates of interest may be charged from the plot holders who do not make the payment in time:-
a) Normal rate of interest : 10% p.a.
b) Interest for the delayed : 18% (which payment of installments includes 10% p.a. normal interest).
Due date means the last day on which the payment falls due. Thus, interest at 18% p.a. is to be charged if payment is made after even one day after the due date. However, after the expiry of one year from the due date, the resumption proceedings may be initiated.
In the case of amount due on account of "Enhanced Compensation" the interest pattern of charging 10% interest from the due date will continue as such.
One notice should be issued to the plot holders regarding charging of this interest. This notice may be issued immediately after due date, if installment has not been received. These instructions will come into force with immediate effect."
12. This Court appointed Shri B.R.Gupta, Advocate, as Local Commissioner to visit the subject urban estates/areas and submit a fact finding report regarding status of the development works vide order dated 22.04.2002. In the report dated 18.12.2002, it has been reported by the Local Commissioner that the facility of water supply and sewerage were made available at the time of allotment itself, whereas the roads in front and Kumar Vimal back of Pocket-A covering SCO No.1 to 34 have been constructed in June 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 9 LPA No.933 of 2009 (O&M) 1992. Therefore, the learned Single Judge returned a finding that the work was completed in June, 1992 and that in terms of the conditions of letter of allotment, the interest can be charged from the date the amenities were completed. Therefore, the allottees are liable to pay interest w.e.f. 01.06.1992. In respect of rate of interest, the learned Single Judge held that the allottees are liable to pay interest at the rate of 10% p.a. w.e.f. 01.06.1992 i.e. the rate of interest mentioned in the letter of allotment relying upon the judgment of Hon'ble Supreme Court reported in Roochira Ceramics Vs. HUDA & others (2002) 9 SCC 599 (for short referred as 'Roochira Ceramics-II') and of this Court in CWP No.6588 of 2001 titled "Kirti Kumar Vs. State of Haryana & others" decided on 15.05.2002.
13. At this stage, it would be advantageous to reproduce the orders passed in Kirti Kumar's case (supra). This Court observed as under:
"We have heard learned counsel for the parties.
We find that the matter is fully covered by the judgment of the Supreme Court in Roochira Ceramics Versus Haryana Urban Development Authority and others 2001 (2) PLR 218 in which it has been held that if an allottee commits default in payment of instalments, the HUDA is entitled to charge interest at the rate of 10% on the delayed instalments. In this view of the matter, the claimants-respondents would be entitled to recover interest @ 10% and not 18%. The impugned order Annexure P1 is accordingly quashed to this limited extent. The petition is allowed in the above terms."
14. In SLP (C) No.1109 of 2003, against the said order, the Hon'ble Supreme Court observed as under:
"In view of the order of this Court in Roochira Ceramics Vs. Haryana Urban Development Authority & others in Civil Appeal No.4306 of 1998 dated 29th November, 2000 permitting charging of only ten per cent interest on late payment, the order under challenge cannot be faulted with. Mr. Raju Ramachandran, learned Additional Solicitor General appearing for the appellant, submits that subsequently a judgment of the High Court upholds the rate of interest at eighteen per cent. If that be so, such an Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 10 LPA No.933 of 2009 (O&M) order would be wholly unsustainable in view of the order of this Court in Roochira Ceramics (supra)."
15. Another judgment, which has been relied upon by the learned Single Judge is Roochira Ceramics case (supra). The back ground of the said case needs to be pointed out. This court in a judgment reported as 1996(2) PLR 580 Roochira Ceramics Vs. State of Haryana set aside the order of resumption keeping in view financial stringency of the petitioner by observing as follows:
"10. Keeping in view the financial stringency of the petitioner, interest of the parties, readiness and willingness of the petitioner to pay the remaining unpaid amount and to set the controversy at rest, orders Annexures P-5 to P-8 are quashed. The petitioner shall deposit the balance amount of instalments, including enhancement of price along with interest at the rate of 10% per annum on the unpaid amount within a period of three months. The respondents shall calculate and convey to the petitioner the total amount payable by it within two weeks from the date of receipt of copy of judgment. After the receipt of intimation regarding the total amount of its liability, the petitioner shall deposit the said amount within two months thereafter positively. In case the petitioner fails to deposit the amount within the time specified despite intimation in terms of our judgment, it shall be liable to pay whole of the amount to the respondents as per the demand and the calculations made by the respondents according to the order impugned and it shall not be held entitled to any further time to make the payment. It is relevant to mention here that as per stipulation in the allotment letter, copy Annexure P-1 to the writ petition, interest at the rate of 10% per annum is being charged from the petitioner.
11. From the language of Section 17, it is apparent that penalty can be imposed, though not mandatory. We, therefore, maintain the order of penalty as no justifiable cause has been shown to upset the same."
16. The said order passed by this court was set aside by the Hon'ble Supreme Court on 23.10.1996 in the judgment reported as Haryana Urban Development Authority & another Vs. M/s Roochira Ceramics & Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 11 LPA No.933 of 2009 (O&M) another 1996 (6) SCC 584 (for short referred as Roochira Ceramics-I). The court held as follows:
"3. ..........Without recording a finding as to the correctness of the said plea assuming for the sake of argument that such a course was permissible in a writ petition the High Court allowed the writ petition "keeping in view the financial stringency of the petitioner, interest of the parties, readiness and willingness of the petitioner to pay the remaining unpaid amount and to set the controversy at rest". The High Court further directed that interest shall be charged only at 10% per annum on the amount due and not at the rate of 18% as calculated by the Authority for a part of the period.
4. We are of the opinion that in a writ petition it was not open to the High Court to entertain the plea of financial stringency for the first time. The respondent who had not responded to repeated notices and had not availed of the personal hearing offered to him, could not be allowed to plead such financial stringency for the first time before the High Court. Indeed the High Court could not have entertained such a plea. It has been held repeatedly by this Court that the power under Article 226 is the power of judicial review. The High Court can only examine the procedural correctness. It cannot go into the merits of the controversy like an appellate authority. No finding is recorded by the High Court in this case that the procedure adopted by the Estate Officer was either not in accordance with the statutory provisions or was in violation of the principles of natural justice. The High Court obviously acted as an appellate authority and that too as a benevolent appellate authority. There is no room for any benevolence under Article 226 of the Constitution. If the court departs from law and enters the arena of benevolence the perils and pitfalls are too many to recount. There will be no objective standards of judging. Justice becomes personalised. It would vary from Judge to Judge. In the absence of any procedural irregularity, the High Court had no jurisdiction to interfere in the matter. The High Court also failed to notice that the respondent is guilty of not paying the instalments as undertaken by him. By interfering on the basis of unverified and unsubstantiated plea of financial stringency, the Court would be encouraging contumacious conduct and breach of undertakings."
17. At this stage, it may be mentioned that the order in Roochira Ceramics-I case (supra) was modified on 04.12.1996, wherein liberty was given to the respondents therein to pay the entire arrears as demanded by Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 12 LPA No.933 of 2009 (O&M) authority within three months. On deposit of the amount, it was ordered that the forfeiture shall not take effect. The Authority demanded interest at the rate of 18%, which was challenged by the allottee by way of a writ petition. The writ petition was dismissed and it is the said order against which the allottee filed Special Leave Petition, which was allowed relying upon the judgment of this Court in CWP No.16437 of 1991 titled "Harish Kumar Virja Vs. State of Haryana & another" decided on 02.02.1994 and in CWP 12975 of 1994 decided on 25.7.1998. The Court while setting aside the claim of the authority of interest at the rate of 18%, in its subsequent judgment in M/s Roochira Ceramics-II case (supra) observed:
"4. Learned counsel, appearing for the appellant, urged that the consistent view of the High Court has been that where an allottee has committed default in payment of instalment, the Authority was made to charge interest at the rate of 10% and not 18%. It is also urged that the judgment of the High Court has been upheld by this Court. Learned Counsel appearing for the appellant, referred the judgment of the High Court of Punjab and Haryana passed in C.W.P. No. 12975/94 decided on 25.7.1996 wherein the Division Bench of the High Court held that the Authority is entitled to charge interest at the rate of 10% and not 18% when there is default in payment of instalment. The Special Leave Petition No. 23203/96 preferred by the Authority against the said judgment was dismissed on 9.12.1996. The decision of the High Court of Punjab and Haryana in C.W.P. No. 16487/91 : 1994(2) RCR(Civil) 168 (P&H), Harish Kumar Virja v. State of Haryana and another, which was followed in other cases, laid down that the Authority in cases of default in payment of instalments is entitled to charge interest at the rate of 10%. Learned counsel, appearing for the respondents, conceded that no special leave petition was filed against the said judgment and the said judgment has attained finality. In view of the aforesaid decision, we are of the view that the respondents were entitled to charge interest @ 10% only and not 18%. Since the appellant had deposited interest @ of 18%, the Authority under law is required to refund the excess of the interest realised from the appellant. For the aforesaid reasons, the judgment under appeal is set aside. The respondent-Authority is directed to refund excess interest Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 13 LPA No.933 of 2009 (O&M) realised from the appellant within three months from the date of service of certified copy of this order".
18. The Authority is in appeal before this Court aggrieved against the judgment of the learned Single Judge holding that interest @10% can be charged from the allottee and that too from the date, the amenities were provided.
19. The learned Single Judge has held that the interest can be charged only when the amenities were provided. However, the provisions of the amenities cannot be linked with the payment of interest in view of the judgments of Hon'ble Supreme Court and of this Court. In Sector 6, Bahadurgarh Plot Holder's Association (Regd.) Vs. State of Haryana (1996) 1 SCC 485, the question raised was whether the allottee can be made liable to pay interest for not providing the amenities. A three Judges' Bench held that even though plots are yet to be fully developed, but the allottee is liable to pay interest. In Haryana State Agricultural Marketing Board & another Vs. Raj Pal (2011) 13 SCC 504, again the question of levy of interest for not providing the amenities came up for consideration. In the said case, at the time of allotment, there was no statutory provision in respect of levy of interest and the Rules were promulgated after allotment. In view of the terms of allotment, the Hon'ble Supreme Court directed that the Market Committee can claim simple interest at the rate of 15% per annum, as certain infrastructural work like water and sewerage disposal was yet to be completed. Similar question came to be decided in UT Chandigarh Administration Vs. Amarjeet Singh (2009) 4 SCC 660. The said judgments have been made basis to maintain liability to pay interest from the date of offer of possession in CWP No.13024 of 2001 titled "M/s Panna Lal Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 14 LPA No.933 of 2009 (O&M) Kundan & others Vs. State of Haryana & others" decided on 17.05.2012 and LPA No.502 of 2011 titled "Raksha Rani Vs. Haryana State Agricultural Marketing Board & others" decided on 14.09.2012.
20. In view of the above, the direction of the learned Single Judge to charge interest from 01.06.1992 is not sustainable. In fact, no argument was addressed on the said question by the learned counsel representing the allottees.
21. On the question of levy of interest, there are numerous judgments of this Court as well as of the Hon'ble Supreme Court. One of the first judgments of this Court and referred to in Roochira Ceramics II (Supra) was Harish Kumar Virja's case (supra). The challenge in the said case was to the additional price of Rs.21,710/-demanded from the writ petitioner @ Rs. 302.59 paise for 135 square yard plot. That was a case where the possession of the plot allotted could not be delivered since it was not in existence. The possession was delivered of an alternative plot on 06.10.1984. The demand was quashed for the reason that the possession of the plot was not delivered. It was held as under:
"This order will dispose of two Civil Writ Petitions (No.15867 of 1992 'K.G.Prashar & Anr. v. State of Haryana & Ors.' And 16437 of 1991 'Harish Kumar Virja v. State of Haryana & Anr.') as common questions of law and fact are involved therein. The facts have, however, been extracted from Civil Writ Petition No.16437 of 1991 (Harish Kumar Virja v. State of Haryana & Anr.).
Harish Kumar Virja seeks writ in the nature of certiorari so as to quash Annexure P-1 vide which he has been asked to deposit an amount of Rs.21,710/- in addition to the price already settled for allotting plot to him way back in the year 1980. This extra price is being asked on the sole ground that the prices of the plots prevalent in the year 1990, when letter, Annexure P-1 was issued, necessarily require deposit of Rs.21,710/-.
xxx xxx Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 15 LPA No.933 of 2009 (O&M) After hearing learned counsel for the parties and going through the records of the case, this Court is of the considered view that the action of respondents in issuing letter, Annexurre P-1, asking the petitioner to pay an amount of Rs.21,710/- is wholly unjustified. If the plot that was initially allotted to the father of petitioner was not in existence and was yet allotted to him or if later on the other plot given to him was not somehow delivered possession of either to the petitioner or his father, it is the respondent-authorities, who have to be blamed. Petitioner or his father had no hand in it. The allotment of plot was exclusively in the domain of respondents. If for some reason or the other respondents could not give possession of the plot allotted to the father of petitioner, there was no justification to charge price (sic), which was prevalent after ten years. On the one hand petitioner was deprived of taking possession and constructing the house upto 1990, on the other hand, he has been asked to pay more price of the plot. This is a common knowledge that the cost of construction has sky-rocketed during the last ten years. The action of the respondents in delaying the allotment of plot to the petitioner has already worked a lot of hardship to him as he will not be able to construct the plot with the cost he could have, had the plot been allotted to him in the year 1980. The ordeal of petitioner has increased mani-fold by charging him the price of the plot prevalent in the year 1990. Thus, finding no justification for the respondents to charge price in addition to what has already been paid by the petitioner, Annexure P1 is quashed.
xxx xxx For the reasons recorded above, these petitions are allowed and respondents are directed not to charge additional amount as asked by them vide Annexure P1. In Civil Writ Petition No.15867 of 1992 (K.G.Prasher's case), Respondents are directed to give possession of the plot allotted to them forthwith. In Civil Writ Petition No.16437 of 1991 (Harish Kumar Virja's case) possession was got delivered to the petitioner vide interim orders passed by the Motion Bench and the same is ordered to be regularized. There shall, however, be no order as to costs."
22. Relying upon the aforesaid order, a Division Bench of this Court disposed of CWP No.12975 of 1994 titled "Ramjas Vs. Haryana Urban Development Authority & others" on 25.07.1996, wherein Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 16 LPA No.933 of 2009 (O&M) challenge was to the compound interest claimed at the rate of 18%. The said order reads as under:
"In this writ petition filed under Articles 226/227 of the Constitution of India, the petitioner has prayed for quashing the demand letter dated 27.05.1994 whereby demand for Rs.56,100/- has been raised consisting of an amount of Rs.20,823/- charged as compound interest at the rate of 18% from 23.05.1990 to 23.05.1994.
The relief has been sought primarily on the ground that no notice was ever served upon the petitioner.
Learned counsel for the petitioner contends that the matter is squarely covered by the decision rendered in Harish Kumar Virja Vs. State of Haryana and another, Civil Writ Petition No.16437 of 11991 on 02.02.1994.
Learned counsel for the respondents has not been able to repel the submission of learned counsel for the petitioner.
After having heard learned counsel for the parties and perusing the paper book, we are convinced that the matter is squarely covered by the decision rendered in Harish Kumar Virja's case (supra).
Accordingly, this writ petition is disposed of with a direction to the respondents to take a decision in the matter in the light of this court's decision rendered in Harish Kumar Virja's case (supra)."
23. In CWP No.2363 of 1996 titled as "Ashwani Puri Vs. HUDA"
this court passed the following order on 3.12.2006:
"The petitioner has deposited Rs.3.64 lacs and undertakes to deposit the balance amount, if any, intimated by the respondents through registered post AD as undertaken by them, with 10% interest within one month from the receipt of intimation.
In view of this stand taken by counsel for the parties, the writ petition is disposed of."
24. In Aruna Luthra Vs. State of Haryana 1998(2) PLR 687, another Division Bench has set aside the charging of interest at the rate of 18% p.a. claimed on delayed payment of the installments. It was observed as under:
"4. Having given our thoughtful consideration to the rival contentions of the parties, we are of the opinion that the petitioner is liable to pay interest Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 17 LPA No.933 of 2009 (O&M) at the agreed rate of 10% as stipulated in the letter of allotment. Allotment of S.C.F. through an open auction was the result of a contract between the parties whereby it was agreed between them that the unpaid instalments would be recoverable together with interest at the rate of 10% on the balance price. Clause (6) of the allotment letter contains the stipulation. In the light of this clause, it is not open to HUDA to claim and charge interest @ 18% as is being done in the instant case. All that is stated in para 14 of written statement is that the petitioner is liable to pay interest @ 18% per annum as per HUDA policy. What is that policy, under which provision of law has it been framed and whether it can override the contractual stipulation contained in Clause (6) of the allotment letter has not been spelt out in the written statement. No provision of any law or the aforesaid regulations has been brought to our notice whereby HUDA could charge interest at a rate exceeding the agreed rate of interest."
25. Another Division Bench in CWP No.4405 of 1998 titled "Manju Jain & another Vs. Haryana Urban Development Authority & others" decided on 02.04.1998 has followed the judgment in Aruna Luthra's case (supra) to return a finding that there is no provision in the Regulations to levy penal interest, thus, the levy of interest at the rate of 18% p.a. was set aside.
26. The orders of this court (in Aruna Luthra's; Manju Jain's and Ashwani Puri's) were considered by another Division Bench in a judgment reported as Ram Kishan Gulati Vs. State of Haryana 2000 (2) PLR 119 (for short referred as 'Ram Kishan Gulati-I'). The Court noticed the decision of the Financial Committee of the Authority and the circular dated 15.01.1987, as reproduced above and held that the authority is justified in law claiming interest @ 18% p.a. The Court also referred to Roochira Ceramics-I case (supra) in support of its finding to observe as under:-
"12. The issue which remains to be decided is whether the respondents can charge 18% interest from the petitioners as a condition for restoration of the plot. The argument of Shri Kapoor is that in view of the express provision contained in the letter of allotment, the respondents cannot Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 18 LPA No.933 of 2009 (O&M) charge interest at a rate higher than 10% per annum. According to him 10% is the outer limit of the rate at which the interest is to be charged for normal as well as delayed payments and, therefore, the decision of the respondents to charge interest @ 18% from the petitioners should be declared as without jurisdiction, arbitrary and illegal. He strongly relied on the observations made in Aruna Luthra's case in support of his submission that the respondents do not have the authority to charge interest @ 18% per annum. In our opinion, the contention of the learned counsel is wholly untenable and merits rejection. At the cost of repetition, we deem it appropriate to observe that 10% interest which the allottees were liable to pay is not an interest on delayed payment. Rather, it is an integral part of the price determined by the respondents. The allottees and their successors were required to pay balance price in lump sum without interest or to pay the same price in 8 half yearly instalments with interest. They adopted the second course and in this manner, they incurred the liability to pay interest @ 10%.
13. In our considered opinion, Regulations 5(6) & (7) and 6(3) of 1978 Regulations read with Clause 5 of the letter of allotment which deal with payment of balance price and interest in case the allottee opts to pay the balance price in instalments do not have any application to the cases in which the allottees commit default in the payment thereof on due dates. The cases of this category are to be dealt with under other provisions of the Act and the Regulations. ................. Section 53 empowers the State Government to make rules for carrying out the purpose of the Act and Section 54 empowers the Authority to make Regulations, which may provide for the various things enumerated in the said section including the terms and conditions on which transfer of any right, title and interest in any land or building may be permitted. A cumulative reading of these provisions generally and Section 15 in particular shows that the transfer of property vesting in HUDA, by way of allotment, is governed by the Regulations framed under Section 54 and the policy to be framed by the HUDA from time to time. The exercise of the various powers vested in HUDA is subject to the directions which the State Government may issue.
14. The issue whether penal rent should be charged from the allottees who default in the payment of price was considered in the 36th meeting of the Financial Committee of the HUDA held on 14.08.1987. The proposal put up before the Finance Committee was that in the case of default interest shall be charged @ 18% instead of the normal interest @ 10%. This proposal was approved by the Finance Committee vide agenda item Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 19 LPA No.933 of 2009 (O&M) NO.XXXVI(17) and on that basis circular no.HUDA-Accounts-87/1398- 1408 dated 15.01.1987 was issued by the Chief Administrator.
xxx xxx In our opinion, these policy decisions govern the case of the petitioners and other cases of delayed payment of instalment/default in the payment of instalments and, therefore, no illegality has been committed by the respondents in charging 18% interest as a condition for restoration of the plot.
15. We are further of the opinion that the petitioners cannot question the levy of penal interest at a rate higher than 10% because theirs' is not a case of simple delayed payment. Their plot was resumed by the competent authority because of the non-compliance of the conditions of allotment. That order was upheld by the appellate authority and when the revision came up for hearing before the Commissioner and Secretary, Town and Country Planning Department, the counsel appearing for the petitioners stated that his clients will pay the dues of instalments alongwith interest, which necessarily means that the interest payable in accordance with the policy of HUDA. In our opinion, after having given an unequivocal undertaking before the revisional authority to pay the dues of the instalments with interest, the petitioners cannot turn around and challenge the jurisdiction of the respondents to charge interest @ 18% in accordance with the policy. The plea of the petitioners that they cannot be asked to pay interest @ 18%, if accepted, will lead to anomalous results. In that situation, no allottee of the HUDA land would pay the price in accordance with the conditions of allotment and feel relief against the resumption of plot by stating that he/she/it is ready to pay the entire price with interest at the normal rate. Otherwise also, it sounds wholly incongruous that an allottee who has defaulted in the payment of instalments of the price is treated at par with the one who regularly pays the instalments with interest."
27. In Smt. Kanta Devi Budhiraja Vs. State of Haryana 2000 (2) PLR 698, a Division Bench followed the judgment in Ram Kishan Gulati's case (supra) to return a finding that the decision of the respondents to charge interest at the rate of 18% from the allottee does not suffer from any illegality or infirmity, but the Authority cannot claim compound interest. Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 20 LPA No.933 of 2009 (O&M)
28. In Ram Kishan Gulati-I's case (supra), this Court has permitted the petitioner to pay the amount due within two months. In terms of such liberty, the Authority demanded a sum of Rs.44,20,604/- as the balance amount and Rs.4,45,719/- towards the extension fee up to 31.12.1999. The said claim was again disputed by Ram Kishan Gulati before this Court in CWP No.13269 of 1999 decided on 25.05.2000 (for short referred as 'Ram Kishan Gulati-II'). The Division Bench relied upon the earlier judgment in Smt. Kanta Devi Budhiraja's case (supra) and set aside the amount of compound interest and extension fee. It was observed as under:
"For the reasons mentioned above, the writ petition is allowed. The demand of compound interest as well as extension fee are declared illegal and quashed with liberty to the competent authority of HUDA to charge simple interest at the rate of 18%. It will also be open to such authority to issue notice to the petitioners to determine the date of commencement of the construction as well as the completion of the building and then decided as to whether or not any extension fee is chargeable from them. However, it is directed that while deciding this issue, the authority shall not take adverse view against the petitioners simply on the ground that they had not applied for commencement of the construction in terms of Regulation 10 of the Haryana Urban Development (Erection of Building) Regulations, 1979 and had not applied for issue of completion certificate."
29. In Gian Inder Sharma Vs. Haryana Urban Development Authority AIR 2003 Punjab 128, the writ petition was allowed relying upon the judgment rendered in CWP No.2278 of 1999 titled "Bhatia Brothers Vs. Haryana Urban Development Authority & others" decided on 14.02.2000, wherein the petitioner has sought a direction to the respondents to charge simple interest at the rate of 15% p.a. on delayed payment of additional price. The writ petition was allowed for the reason that the respondents cannot charge compound interest, as there is no provision in the Act or the Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 21 LPA No.933 of 2009 (O&M) Regulations framed there under for such interest. The Court directed the respondents to calculate the additional price with 15% simple interest.
30. The said order was made basis of its order by another Division Bench in a judgment reported as Mohan Dass & others Vs. Haryana Urban Development Authority & another 2007 (4) PLR 31.
31. In CWP No.18364 of 2003 titled "M/s Setia & Company Vs. HUDA & others" decided on 09.12.2003, another Division Bench of this Court observed as under:
"The learned counsel for the petitioner contends that the matter is covered by the judgment of the Hon'ble Supreme Courrt in Roochira Ceramics v. Haryana Urban Development Authority & others, Civil Appeal No.4306 of 1998 decided on 29.11.2000. As the respondents have not yet filed the written statement, we direct that if that be so, the petitioner will be given the benefit under the aforesaid judgment forthwith with all consequential relief. The writ petition is allowed in the above terms."
32. Another Division Bench in a judgment reported as National Air Products Ltd. (NAPL), Merged with M/s The Motor & General Finance Limited, New Delhi Vs. Haryana Urban Development Authority & others 2004 (2) PLR 7 directed the Authority to charge interest at the rate of 10% on the demand of development charges claimed under the Haryana Urban Development (Disposal of Land and Building) Regulations, 1978.
33. Another Division Bench in CWP No.20734 of 2006 titled "Smt. Vidya Devi Vs. State of Haryana & others" decided on 19.03.2008 has set aside the claim of compound interest at the rate of 18% relying upon Roochira Ceramics-II case (supra) and directed the Authority to calculate the interest at the rate of 10% p.a. In Special Leave Petition (Civil) No.15298 of 2008 against the said order, the Hon'ble Supreme Court observed as under: Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 22 LPA No.933 of 2009 (O&M)
"We see no reason to interfere with the impugned order, the special leave petition is dismissed. However, we leave open the question raised in this petition to be decided in other appropriate case."
34. Another Division Bench in a judgment reported as Haryana Builders Ltd. Gurgaon Vs. Haryana Urban Development Authority & others AIR 2003 Punjab 48, referred to the judgments of earlier Division Benches in Ram Kishan Gulati's case (supra), Aruna Luthra's case (supra), Kanta Devi Budhiraja's case (supra), Sukhpal Singh Kang Vs. Chandigarh Administration 1999(1) PLR 54 and D.L.G. Builders Pvt. Ltd. Vs. Advisor to Administrator, Chandigarh Administration (CWP No.13695 of 2001, decided on 18.02.2002) and found the levy of compound interest as void while maintaining the levy of interest at the rate of 18%.
35. Another Division Bench in a judgment reported as Brij Lal Garg Vs. Haryana Urban Development Authority and another 2009 (1) PLR 423, considered the levy of compound and penal interest on the delayed payment by the allottee. This court ordered that the guidelines issued in Gian Inder Sharma's case (supra) were to be uniformly applied to all affected persons including the petitioner. The Court considered the judgment of the Hon'ble Supreme Court in HUDA Vs. Raj Singh Rana (2009) 17 SCC 199 to return a finding that the authority cannot demand compound interest on delayed payment including on enhanced amount of compensation and also that no penalty can be charged on account of delayed payment of installment/additional price.
36. In HUDA Vs. Raj Singh Rana (2009) 17 SCC 199, the Hon'ble Supreme Court allowed the appeal filed by the Authority, when it imposed simple interest on the basis of prevailing current rate of interest in Kumar Vimal proceedings initiated by the allottee under the Consumer Protection Act, 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 23 LPA No.933 of 2009 (O&M) 1986. The said direction was issued relying upon the provisions of the Interest Act, 1978. In the said case, the District Forum held that Authority can charge interest as mentioned in the letter of allotment. The said decision was confirmed in appeal by the State Commission and in revision by the National Commission. It is in these circumstances, the Hon'ble Supreme Court was seized of the matter.
37. The learned counsel for the Authority has referred to certain judgments such as Haryana Urban Development Authority Vs. Som Nath (2005) 9 SCC 545 and Haryana Urban Development Authority Vs. Prem Kumar Agarwal & another 2008 (1) SCR 807, wherein the Hon'ble Supreme Court disposed of the appeals filed by the Authority, whereby the Authorities under the Consumer Protection Act, 1986 have directed the Authority to pay interest at the rate of 18%.
38. There are some other Single Bench judgments in respect of levy of interest, compound interest and penalty, but since the issue has earlier been decided by the Division Benches and also by the Hon'ble Supreme Court, we shall not burden this judgment with the opinion of the learned Single Benches.
39. A perusal of the orders, reproduced and mentioned above, would show that some of the writ petitions have been disposed of by this Court quashing claim of interest at the rate of 18% for the reason that such rate of interest does not find mention in the letter of allotment, whereas in some other judgments, this Court has framed an opinion that interest at the rate of 18% can be claimed, but such interest cannot be compounded. Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 24 LPA No.933 of 2009 (O&M)
40. We have heard learned counsel for the parties at length and find that the judgment of learned Single Bench is not sustainable in law to the effect that the authority cannot charge interest exceeding 10% p.a.
41. The judgments of this court prior to the opinion of this court in Ram Kishan Gulati-I's case (supra) were considered and distinguished in the said judgment. The subsequent judgments of this court have followed the order passed in Roochira Ceramics-II's case (supra) without noticing the view of this court in Ram Kishan Gulati-I's case (supra) or any provisions of the Act or regulations.
42. The letter of allotment is based upon model letter of allotment as contained in the Regulations. In terms of Section 15(5) of the Act, the Authority continues to be the owner of the plot or building, until the entire consideration money together with interest and other amount, if any due to the Authority, is paid. The Regulation 5 of the Regulations framed in exercise of powers conferred under Section 54 of the Act, contemplates that the payment of the balance of the price/premium shall be payable either in lump sum or in such number of annual or half yearly installments, as may be decided by the Authority (see Regulation 5(6)). Each installment of the remaining 75% of the sale consideration is recoverable together with interest on the balance price/premium at the rate as may be decided by the Authority at the time of allotment (see Regulation 5(7)). Such interest is charged for deferred payment of the balance sale consideration, which is evident from the fact that no interest is payable if whole of the balance price/premium is made in full, within sixty days of the offer of possession. The letter of allotment contemplates that if any installment or the additional price is not paid, the Estate Officer shall proceed to take action for imposition of penalty Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 25 LPA No.933 of 2009 (O&M) and resumption of plot in accordance with the provisions of Section 17 of the Act (see condition No.10). In the event of breach of any other condition of transfer, the Estate Officer may resume land in accordance with the provisions of Section 17 of the Act (see condition No.11).
43. Apart from resumption of plot or building for non-payment of the installments, the Authority is also empowered to levy penalty. The extent of the penalty is provided under Sections 16, 17 & 55 of the Act. Section 16 provides that the amount of penalty shall not exceed twice of the amount due, which amount is recoverable as arrears of land revenue as well. In terms of Section 17(1) of the Act, the penalty can be imposed to the extent of ten percent of the amount due from the allottee, which provision has now been amended to make it mandatory to levy penalty of 19% of the due amount. Section 55 of the Act empowers the Authority to impose fine for any violation of the Rules and Regulations. Apart from the imposition of penalty in terms of the Act and the letter of allotment, the plot is also liable to be resumed for non-payment of installments.
44. The resumption of the plot or building is a last resort, a harsh remedy in the hands of the Authority to be resorted as a last measure in view of the judgment of the Hon'ble Supreme Court in Teri Oat Estates (P) Ltd. Vs. U.T.Chandigarh & others (2004) 2 SCC 130 and HSIDC Vs. Hari Om Enterprises (2009) 16 SCC 208. In Hari Om Enterprises case (supra), the Court has referred to its earlier judgment in Jagdish Chand Radhey Shyam Vs. State of Punjab (1973) 3 SCC 428 to hold that when two remedies to enforce a contract are available, the power should be exercised in a reasonable manner. Therefore, a harsher remedy may not ordinarily be Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 26 LPA No.933 of 2009 (O&M) resorted to. Since harsher remedy is of resumption, the remedy of levy of interest to ensure payment of installments on due date can be resorted to.
Therefore, the Authority can frame a uniform policy permitting the allottees to deposit the due amount to avoid resumption, which is a consequence of non-payment of the amount of installments, if the terms of the letter of allotment have to be strictly construed. It is to mitigate the effect of the drastic action of resumption, an opportunity is provided to the allottees to make payment of delayed amount of installments on payment of interest. Such condition of interest serves the larger public interest, as the said provision is to seek compliance of the due payment of the installments and to avoid resumption. Therefore, instead of resumption of plot, the Authority is justified in adopting a uniform policy of charging interest for delayed payment. The purpose of charging of such interest is for scrupulous compliance of the conditions of the letter of allotment. Therefore, a defaulter cannot be permitted to say that even if he has committed default in making payment of the balance sale consideration, he should not be called up to pay interest, which is to be paid in any case for opting deferred payment of the balance sale consideration.
45. The rate of interest of 10% p.a. is the rate for deferred payment of the balance sale consideration. The rate at which the balance price or premium is payable is to be decided by the Authority at the time of allotment. Though Regulation 7A has been inserted on 29.11.2004, but even prior to insertion of such Regulation, the Authority could charge interest dehors any specific provision for claim of interest on delayed payment of the installments of the balance sale consideration.
Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 27 LPA No.933 of 2009 (O&M)
46. In Roochira Ceramics-I's case (supra), the order of this Court that the rate of interest at the rate of 10% should be charged and not at the rate of 18% was set aside and an opportunity was given to the allottees to deposit the due amount as per clarification ordered later. But in Roochira Ceramics-II's case (supra), the argument of counsel for the allottees was accepted that the "consistent view of the High Court has been that where an allottee has committed default in payment of installment, the Authority was made to charge interest at the rate of 10% and not 18%". The basis of such statement was judgments of this Court in Ramjas's case (supra) and Harish Kumar Virja's case (supra). The order passed in Harish Kumar Virja's case (supra), as reproduced above, shows that the controversy in the said case was not in relation to the demand of interest @ 18% p.a. nor such question was raised or decided. In Ramjas's case (supra), this Court has not examined the issue of levy of interest but followed Harish Kumar Virja's case (supra). The attention of the Hon'ble Supreme Court was not brought to the fact that there is no consistent view in the matter of levy of interest. Therefore, such order is restricted to peculiar facts of the case and is in exercise of the jurisdiction vested in Court under Article 142. Therefore, in the absence of any ratio decidendi discernible from the said judgment, it cannot be treated to be a binding precedent dealing with the issue of claim of interest or for this court to be bound by the decision on the doctrine of stare decisis.
47. The orders of this Court in Manju Jain, Ashwani Puri, Kirti Kumar, Ramjas, Mohan Dass, Vidya Devi, Setia & Company and National Air Products Ltd. cases (supra) are orders passed without reference to any provision of the Statute, Regulations or the consequences of non-payment of installments on due dates. Some of the orders are based upon the judgment Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 28 LPA No.933 of 2009 (O&M) in Roochira Ceramics-II's case (supra), which judgment is an order passed in exercise of jurisdiction conferred under Article 142 of the Constitution. The provisions of the Statute, the conditions of the letter of allotment and the powers of the Authority were not brought to the notice of the Court in the judgments referred to above. It is Aruna Luthra's case (supra) alone, that there is reference to the Regulations, but charging of interest at the rate of 18% has been set aside for the reason that the respondents could not point out under which provision of law, the policy has been framed and whether it can override the contractual stipulations. The provisions of law were not brought to the notice of the Court.
The said judgment has been considered in Ram Kishan Gulati- I's case (supra) and found to be distinguishable. Apart from the reasons recorded in Ram Kishan Gulati-I's case (supra), we find that the said judgment cannot be applied in all cases as the Authority continues to be the owner of the land allotted till such time the entire consideration money together with interest and other amount due to the Authority on account of sale of plot or building or both is paid in terms of Section 15(5) of the Act. As an owner of the land allotted to the allottees, the authority could impose any condition, which is not arbitrary or discriminatory. Such power is conferred on the Authority in terms of Section 15(3) of the Act so as to frame Regulations. In the absence of the approval from the State Government, the circular cannot be said to be a Regulation, but since it is not contradictory to any of the Regulations framed, it is supplementing the purpose of Regulations and thus cannot be termed without jurisdiction. The charging of interest at the rate of 18% p.a. for delayed payments of the Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 29 LPA No.933 of 2009 (O&M) installments is with the object to ensure the timely payments and to seek compliance of the conditions of allotment.
48. A Full Bench of this Court in Bakshish Kaur Saini Vs. Union Territory, Chandigarh & others AIR 1994 P & H 1 examined Section 8A and Section 15 of the Capital of Punjab (Development and Regulation) Act, 1952. An argument was raised that after six months of raising of unauthorized construction, the same cannot be demolished. The Court found that even if the unauthorized construction cannot be demolished, but the consequences under Sections 8A and 15 of the Capital of Punjab (Development and Regulation) Act, 1952 namely resumption of site, forfeiture and fine would still subsist. It was held to the following effect:
"8. Next, again in terms of Section 15, contravention of the building rules has been made a punishable offence with the defaulter being liable not only to fine but also to a recurring fine for continued breach. The Court has, in addition, power to order the forfeiture of the building too.
9. Finally, there is resumption of the site or building and forfeiture of the whole or part of the money paid in respect thereof in terms of Section 8A of the Act for breach of any of the conditions of the sale.
xxx xxx xxx
17. It is, no doubt, true that in terms of the first proviso to Section 15 of the Act, a time limit has been imposed for the issuance of notice upon the owner for demolition of the alleged unauthorized construction and no such notice can, therefore, be issued after this time limit has expired, but as pointed out earlier issuance of such notice is but one of the three consequences that can flow from contravention of the provisions of the Act and the rules pertaining to erection of building. The defaulting owner's liability for action against him under Sections 8A and 15, namely, resumption of the site, forfeiture and fine would still subsist. It cannot, therefore, be said that by mere lapse of time, namely, six months after the completion of the unauthorized construction that it would stand legalized."
49. In a recent judgment reported as Punjab Urban Planning and Development Authority & others Vs. Raghu Nath Gupta & others Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 30 LPA No.933 of 2009 (O&M) (2012) 8 SCC 197, the Hon'ble Supreme Court followed its earlier judgments in Municipal Corporation, Chandgarh Vs. Shantikunj Investment (P) Ltd. (2006) 4 SCC 109 and UT Chandigarh Administration Vs. Amarjeet Singh (2009) 4 SCC 660, to return a finding that the allottees are liable to pay interest, penal interest and penalty for the delayed payment of installments. That was a case arising out of allotment of plots by Punjab Urban Planning and Development Authority. A reading of the said judgment shows that there was no condition in the letter of allotment for claiming penal interest and penalty.
50. Reference may be made to another judgment reported as Surinder Kaur Vs. Government of Punjab & others (1998) 9 SCC 592, wherein the Hon'ble Supreme Court has considered the levy of interest on delayed payment of installments at the rate of 18% consisting of 11% penalty interest and 7% regular interest, on defaulted installments, as a condition for cancellation of resumption order. The Court observed as under:
"5. Under these circumstances, therefore, we deem it fit to direct that the appellant shall pay total interest at the rate of 18% on the delayed payments which will consist of 11% penalty interest plus 7% regular interest on defaulted instalments. We are told by learned counsel for the appellant that interest @ 17% in all has already been deposited with the respondent. If that is so, the appellant will have to deposit an additional amount of interest amounting to 1% more. However, this will be subject to verification by appropriate authority. In short, as a condition for cancellation of resumption order the appellant will be required to pay in all, apart from the defaulted amounts, 18% interest on the delayed payments of instalments...."
51. The Hon'ble Supreme Court has referred to judgment in Appeal (Civil) No.4272 of 1995, which is reported as State of Punjab & another Kumar Vimal Vs. Simla Rani (1995) Supp. 2 SCC 357. In Surinder Kaur's case (supra), 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 31 LPA No.933 of 2009 (O&M) as reproduced above, and in Simla Rani's case (supra), the allotment was made under Punjab Urban Estate (Sales of Sites) Rules, 1965. Sub Rule 12(2) of such Rules is somewhat in pari materia with Regulation 5(6) of the Regulations in question. Rule 13 of such Rules is also in pari materia with Section 16 of the Act. Rule 13 of the Punjab Urban Estate (Sales of Sites) Rules, 1965 contemplates that if installment is not paid by 10th of the month following the month in which it falls due, a notice shall be served on the transferee calling upon him to pay the installment within a month together with a sum not exceeding such amount as may be determined by the Estate Officer, by way of penalty and if the payment is not made within the said period or such extended period, the Estate Officer may proceed to have the same recovered as an arrear of land revenue or to take action under Section 10 of the Act. The relevant Rules read as under:
12. Instalments -
xxx xxx (2) In case of payment by instalment as provided in sub-rule (1), each instalment would be recovered together with interest thereon, at the rate of seven per cent per annum. The interest shall accrue from the date of issue of allotment order or the date of auction, as the case may be, but no interest shall be payable if the whole of the balance of seventy-five per cent of the sale price is paid in full by the transferee within sixty days of the issue of allotment order or the date of auction, as the case may be.
xxx xxx
13. Procedure in case of default Sections 23(3)(a) and 3(2) - In case an instalment is not paid by the transferee by the 10th of the month following the month in which it falls due, a notice shall be served on the transferee calling upon him to pay the instalment within a month together with a sum not exceeding such amount as may be determined by the Estate Officer, by way of penalty. If the payment is not made within the said period or such extended period as may be allowed by the Estate Officer, not exceeding three months in all from the date on which the instalment was originally due, the Estate Officer may proceed to have the same recovered as an arrears of land revenue or to take action under Section 10.Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 32 LPA No.933 of 2009 (O&M)
52. Considering Rule 13, the Hon'ble Supreme Court in Simla Rani's case (supra) upheld the levy of interest at the rate of 10% as penalty. It was observed as under:
"4. As a matter of policy the appellants have been imposing 10% penalty and 7% interest on delayed payments. This being the rule position and having agreed with the rule position, the High Court case was not justified in interfering with the action taken by the appellants. We find force in his contention.
5. It is contended for the respondent that under the rules the appellant have discretion only upto the maximum of 10% penalty. They have no right to impose more than 10% and that imposition of 17% by way of interest is a penalty and it cannot be sustained. We find no force in the contention.
6. Exercising the power under Section 10 of the Act, while resuming the property for the default committed, certain consequences were to ensue. One of the consequence is forfeiture of the amount already deposited. While exercising that power, rule prescribed forfeiture of 10% of the total amount deposited by the defaulter. The said condition is inapplicable to the factual situation. In this case, admittedly, the appellant have not exercised the option given by Section 10. Instead they had exercised and offer option provided in Rule 13 of the Rules. As seen, Rule 13 gives power to the Estate Officer to impose penalty for the default committed as stipulated thereunder. It is now stated that not disputed by the other side that as a matter of policy, the appellant adopted that 10% would be levied as penalty and 7% as interest on delayed payments in terms of the contract. In other words, the total liability is 17%. The respondent misconstrued the scope of the action on the part of the respondent in this behalf. 17% is not the rate of interest. It is 10% penalty for non-payment of installments and 7% interest on terms of the contract which put together becomes 17%.
7. Under these circumstances, we find that the High Court was not justified in interfering with the contractual relations entered by the purchasers with the appellant to reduce the amounts payable in terms of the contract read with the Act and the Rules."
53. The view expressed by us is in tune with the pari materia provisions considered by the Hon'ble Supreme Court in Surinder Kaur and Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 33 LPA No.933 of 2009 (O&M) Simla Rani cases (supra), wherein the interest for not making payment of the installment has been upheld.
54. In view of the above, though in the letter of allotment, there was no clause for charging interest on delayed payment of the balance sale consideration, but the consequences of non-payment i.e. resumption of site, forfeiture of the amount paid and imposition of penalty are still available to the Authority. Therefore, it cannot be said as an established legal principle that the Authority is not competent to charge interest so as to ensure timely payment of the installments where payment of price/premium/sale consideration is deferred. There is always a public law element involved in ensuring return of public money deferred only for the convenience of the allottee to a future date to enable him to enjoy property in the present. Towards this end, that is, timely return of money but staggered at convenient fixed future dates of maturity by the Authority itself is interest chargeable for non-payment of balance dues. The Authority acts as a custodian of public property and when it parts with ownership of land or building in favour of an allottee the public interest commands that it should be seen possessed of such inherent rights as to levy of interest as a sacred duty enjoined upon it for enforcement of return of public money. The levy of interest at 18% ought to be seen in the nature of a sanction against private dereliction traceable to the provisions of Sections 16, 17, 54 & 55 of the Act.
55. On behalf of the allottees, an argument was raised that the policy decision dated 15.01.1987 was never communicated to them. Since such circular is beneficial to the allottees, it is open to them to take benefit of such circular failing which the consequence, that is, resumption of plot can Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 34 LPA No.933 of 2009 (O&M) follow. It is for the allottees to choose resumption or pay interest on the delayed amount of installments.
56. Learned counsel for the Authority referred to Central Bank of India vs. Ravindra & others (2002) 1 SCC 367 to assert that the appellants are entitled to compound interest on account of non-payment of installments. We do not find that such judgment leads any credence to the argument raised by the learned counsel for the appellants. The judgment in Ravindra's case (supra) is in respect of a contract permitting capitalization of interest executed between the borrower and a lender. In the present case, there is no provision in the Statute or the Regulations, which contemplates compounding of interest. Even the Circular dated 15.01.1987 does not contemplate charging of compound interest. The Circular dated 15.01.1987 has been issued by the Authority, whereas the communication dated 19.09.1985 was issued in pursuance of meetings of the Officers of HUDA. Therefore, in terms of the Circular dated 15.01.1987, as referred in Ram Kishan Gulati-II's case (supra), the authority cannot charge compound interest.
57. Mr. Gupta has referred to another judgment reported as Secretary, Bhubaneshwar Development Authority Vs. Susanta Kumar Mishra (2009) 4 SCC 684, wherein even on account of non-payment of installments, it has been held that such interest is neither inequitable nor in terrorem. However, again the said judgment is not helpful to the argument raised by learned counsel for the appellants for the reason that Clause 6 of the lease-cum-sale agreement contemplated that in the event of default in paying the installment, the lessee shall pay interest at the rate of 15% p.a. on Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 35 LPA No.933 of 2009 (O&M) the defaulted installments/dues from the date when the same fell due. There is no provision on the lines of such Clause in the Act or the Regulations.
58. In Raj Singh Rana's case (supra), the Hon'ble Supreme Court has referred to the Interest Act, 1978, so as to empower the Authority to charge current market rate of interest. That was a case where the Consumer Forum has passed an order of payment of interest. In terms of the Interest Act, 1978, the interest could be awarded by a Court, which includes Tribunal and Arbitrator. Though the Consumer Forum would be a Tribunal within the meaning of 'Court', as defined in the Interest Act 1978, but the Authorities under the Act will not be able to take recourse to the provisions of the Interest Act. Such levy of interest by the Authorities is traceable to the provisions of Sections 16, 17, 54 & 55 of the Act.
59. Another judgment on which heavy reliance was placed on behalf of the appellants is Amarjeet Singh's case (supra). In the aforesaid case, arising out of the allotment under the Capital of Punjab (Development and Regulation) Act, 1952, the Rules itself contemplate levy of higher rate of interest for delayed payment of installments. The said judgment is again not helpful to the argument advanced by Mr. Gupta.
60. On the other hand, the reliance of the learned counsel for the respondents is primarily on the judgment of the Hon'ble Supreme Court in Roochira Ceramics-II's case (supra) and the orders passed by the different Benches of this Court on the basis of said judgment. We do not find any merit in the said argument for the reasons recorded in the preceding paragraphs.
Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 36 LPA No.933 of 2009 (O&M)
61. In view of the discussion above, we hold that:
(i) That lack of amenities cannot be made a ground for not making the payment of installments in terms of the letter of allotment. The interest on installments of the deferred payment of the sale consideration alone is chargeable from the date of offer of possession. Since the possession was offered and construction raised, the allottees are liable to pay interest on the amount of installments from the date of offer of possession itself.
(ii) In the event of non-payment of installments along with interest thereon, the Authority is justified in charging interest at the rate of 18% p.a. Such interest is to ensure the timely payment of the installments and is aimed at mitigating the extreme hardship which may result from resort to the last measure of resumption of land or building. However, the rate of interest at the rate of 18% cannot be compounded, as there is no provision either in the Act or in the Regulations or in the Circular for compounding of such interest.
(iii) The Authority is competent to charge interest, as it has the authority to levy penalty under Sections 16, 17 & 55 of the Act apart from the power of resumption of land or building. The charging of interest is a policy adopted by the Authority short of resorting to the extreme remedy of Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 37 LPA No.933 of 2009 (O&M) resumption. Therefore, such policy is in fact designed for the benefit of the allottees.
62. Consequently, we find that the order of the learned Single Judge is not sustainable in law. The same is accordingly set aside. The appeals filed by the Authority-HUDA are allowed, whereas the writ petitions filed by the allottees are disposed of. However, it shall be open to the Authority to recalculate the amount due from the allottees and to call upon them to pay the same, failing which the Authority shall be competent and at liberty to proceed in accordance with law.
(HEMANT GUPTA)
JUDGE
16.10.2012 (RAJIV NARAIN RAINA)
Vimal JUDGE
Kumar Vimal
2012.10.16 13:39
I attest to the accuracy and
integrity of this document
Chandigarh
38
LPA No.933 of 2009 (O&M)
Sr.No. Case No. Parties Name
1. LPA No.130 of 2010 HUDA & another Vs. Sohan Lal & others
2. LPA No.131 of 2010 Chief Administrator, HUDA & others Vs. M/s
Mohan Jain Boota Singh & Co. and another
3. LPA No.132 of 2010 HUDA & another Vs. Ved Parkash Arya &
others
4. LPA No.134 of 2010 HUDA & another Vs. Gopal Bhushan Gupta
5. LPA No.135 of 2010 HUDA & another Vs. M/s Ansal Housing &
Construction Ltd.
6. LPA No.136 of 2010 HUDA & another Vs. M.K.Jain & others
7. LPA No.137 of 2010 HUDA & another Vs. M.K.Jain & another
8. LPA No.138 of 2010 HUDA & another Vs. Vikram Paul
9. LPA No.139 of 2010 HUDA & another Vs. Krishan Lal Bansal
10. LPA No.140 of 2010 HUDA & another Vs. Kiran Jain
11. LPA No.212 of 2010 HUDA & another Vs. Suresh Chander Khattar &
another
12. LPA No.213 of 2010 HUDA & another Vs. Sanjay Ahuja & others
13. LPA No.214 of 2010 HUDA & others Vs. Parshu Ram Chhabra &
others
14. LPA No.215 of 2010 HUDA & another Vs. M/s Ansal Housing and
Construction Ltd.
15. LPA No.343 of 2010 HUDA & another Vs. Amrit Lal Kundra &
others
16. LPA No.344 of 2010 The Estate Officer, HUDA & another Vs. Gopal
Bhushan Gupta
17. LPA No.764 of 2011 HUDA & another Vs. Smt. Seema & others
18. LPA No.94 of 2012 HUDA & another Vs. Raj Rani & others
19. CWP No.12590 of 1996 Neelam Gupta & others Vs. The State of Haryana & others
20. CWP No.12624 of 1996 Ashok Kumar & another Vs. The State of Haryana & others
21. CWP No.1034 of 2010 Jagdish Swaroop Vs. The Secretary, Town & Country Planning, Haryana & others
22. CWP No.5662 of 2010 Rajeev Gupta & another Vs. State of Haryana & others
23. CWP No.18121 of 2010 R.S.Saini Vs. State of Haryana & others Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh 39 LPA No.933 of 2009 (O&M) Kumar Vimal 2012.10.16 13:39 I attest to the accuracy and integrity of this document Chandigarh