IN THE HIGH COURT OF JUDICATURE AT PATNA
MOHIT KUMAR SHAH, J.
CWJC No. 8630 of 2014
(2.5.2025)
Dhananjay Kumar & Ors. ... Petitioners
vs.
State of Bihar & Ors. ... Respondents
Housing – Allotment of MIG House – Rejection of application for waiving the interest charged over enhanced price and issuance of fresh demand notice – Interest can be charged by Housing Board only on amount which has not been paid after demand, however interest for anterior period to demand cannot be charged – In present case, even if demand notice is considered to be a notice intimating original petitioner about balance cost / left out amount / escalated price, no interest could have been charged for prior period – Housing Board cannot be permitted to profiteer out of its own wrong – Writ Petition allowed. (Paras 21 to 25)
Mohit Kumar Shah, J. – The present writ petition has been filed for quashing the order dated 25.1.2014, passed by the Chairman, Pricing Committee, Bihar State Housing Board, Patna, by which the application, filed by the petitioner for waiving the interest charged over the enhanced price has been rejected. The petitioner has also prayed for quashing the consequential fresh demand notice dated 31.01.2014, issued by the Revenue Officer, Bihar State Housing Board, Patna. Lastly, it has been prayed to direct the Respondent authorities to execute the registered lease deed for 90 years in favor of the petitioners.
2. The brief facts of the case, according to the petitioners, are that the father of the petitioners, late Sri Devendra Prasad Sinha (hereinafter referred to as “the original petitioner”) had applied for allotment of house in the middle income group, vide Application No. 168850, before the Bihar State Housing Board, Patna (hereinafter referred to as “the Board”), whereupon the Respondent-Board, after due scrutiny and verification, had issued an allotment letter, vide Memo No. 6184, dated 2.8.1980, for MIG House No. 224, ad-measuring 2.06 kattha, situated at Lohiyanagar, Kankarbagh, Patna, wherein the interim (tentative) cost of the land was mentioned as Rs. 59,200/-. Thereafter, the Respondent-Board had entered into an agreement with the original petitioner on 04.08.1980, after payment of 40% amount i.e. a sum of Rs. 23,680/-. The Respondent-Board had then issued a letter dated 08.08.1980, acknowledging payment of 40% of the estimated cost of the land in question, as also admitting entering into an agreement with the original petitioner. In this letter, it was also acknowledged by the Respondent-Board that the original petitioner is residing in the allotted plot on rent since 01.08.1977 and that allotment of the said land/house has been regularized on rent cum purchase basis. It is stated by the learned Senior Counsel for the petitioners that as per the terms and conditions mentioned in the allotment letter as well as in the lease agreement, the original petitioner was required to pay the balance amount, after deduction of a sum of Rs. 23,680/- from the estimated total cost of Rs. 59,200/- in 180 equal installments of Rs. 403.26 per month, which the original petitioner had paid in 142 installments only and in fact, the original petitioner had deposited a sum of Rs. 709.57 in excess.
3. Nonetheless, the Respondent-Board, all of a sudden issued a demand notice dated 10.1.2006 for a sum of Rs. 2,98,716/-, which was challenged by the original petitioner by filing a writ petition bearing CWJC No. 4211 of 2007 and a coordinate Bench of this Court, by an order dated 29.02.2012, had disposed off the said writ petition with liberty to the petitioner to move the Managing Director, Bihar State Housing Board, Patna, by filing a representation/ application raising his grievances, who in turn was directed to forward the matter to the Pricing Committee, which was directed to consider the claim of the respective parties and take a decision by passing a reasoned order, after granting opportunity of hearing to all concerned, within a period of four months of filing of such representation. Thereafter, the original petitioner had filed a representation before the Managing Director of the Respondent-Board, whereafter the Pricing Committee of the Respondent-Board, after hearing the parties had passed the impugned order dated 25.01.2014, holding that as per the agreement the cost has been revised, whereafter demand has been made as per the agreement and along with the revised cost, interest also becomes automatically applicable, hence no exemption can be granted as far as the interest amount is concerned, thus there is no error in the calculation made by the Board, therefore the claimant should make payment of the amount calculated by the Board immediately. The Board had then issued a fresh demand notice dated 31.01.2014, raising a demand of Rs. 6,
Bihar State Housing Board vs. Radha Ballabh Health Care & Research Institute Pvt. Ltd.
Bihar State Housing Board vs. Sardar Singh
Krishna Deva Prasad vs. State of Bihar
The court directed the Housing Board to reassess penal interest charges, emphasizing the need for fairness in interest calculations for the petitioner.
The Jharkhand State Housing Board cannot charge compound interest on amounts already paid; only simple interest on outstanding amounts is permissible.
The court found the demand for 14% interest arbitrary and ruled for a reduced rate of 6% during the ongoing litigation.
The court affirmed that applicants under a housing scheme are bound by the terms of the scheme, including any cost adjustments made by the housing authority.
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