JUDGMENT

HANSARIA, J. - Bahadurgarh was declared as an urban estate by the State Government of Haryana in exercise of powers conferred by Section 3 of the Punjab Urban Estates (Development and Regulation) Act, 1964 (hereinafter the Punjab Act). The declaration of any area to be "urban estate", permits the State Government, inter alia, to sell the sites in accordance with the Punjab Urban Estates (Sales of Sites) Rules, 1965 (for short "the Punjab Rules"). An offer was accordingly made for freehold sale of about 2200 plots on first come first serve basis in Sector No. 6 of the estate. Applicants were informed that "all modern amenities like underground sewerage, storm water, drainage, roads, electricity, supply of potable water etc. will be provided". Pursuant to this invitation, a number of persons, some of whom are the members of appellant-Association, applied for allotment. Appellant 2, Jeet Ram, is one such applicant and by memo of even number dated 9-8-1972, the Estate Officer, Faridabad informed Jeet Ram about the allotment of residential plot No. 852 to him on terms and conditions mentioned in the memo. (Similar is the position qua other allotees). We are concerned with conditions 4 and 5 which read as below :

"4. In case, you accept this allotment, you should send the enclosed acceptance in the form given at Annexure A to this letter together with a bank draft for Rs. 750 in order to make 29 per cent of the price of the above-mentioned plot within 30 days from the date of issue of this allotment order, the payment shall be made by a bank draft payable to the Estate Officer, Faridabad, and drawn on the State Bank of India, Faridabad. In case of failure to deposit the said amount within the above specified period, the allotment shall be cancelled and the deposit of 10 per cent earnest money paid with the application shall be forfeited against which you will have no claim.

5. The balance of 80 per cent tentative price can be paid lump sum without interest within 60 days from date of issue of this allotment letter or in the annual equated instalments with 7 per cent interest as laid down in Rule No. 12 framed under Section 23(2)(b)(3)(3) of the Punjab Urban Estates (Development and Regulation) Act, 1964. The first instalment shall fall due after the expiry of one year from the date of issue of this allotment order."

2. As per condition 5 aforesaid, the first instalment become due on 9-8-1973, that is, after expiry of one year from the date of issue of the allotment order. On the instalment not having been paid, Respondent, 2, the Estate Officer, sent notices to the members of the appellant-Association to pay the instalments including 7% interest on the total price of the plot. Failing which, it was stated, that action under Section 10 of the Punjab Act would be taken which visualises resumption and forfeiture. The members of the Association acted as required by the notices but without actually taking possession of the plots. It was so because the plots had not been developed as visualised by the advertisement seeking applications. Various representations were made to Respondent 2 for early development and for delivering the possession of the plots. It was also represented that the members of the Association were being charged interest without actual delivery of possession of the plots which according to the members was not permissible.

3. Despite the aforesaid representations, as the plots were not developed, Appellant 2 approached the High Court of Punjab and Haryana by invoking its jurisdiction under Article 226 of the Constitution. The High Court has held in the impugned order that interest was chargeable. As regards possession, the following observation was made in para 4 :

"4. As regards possession, it may be noticed that the stand of the respondents was that development is still taking place and as soon as the development is completed, possession of the plot would be offered to Petitioner 1. It was further stated at t