IMPORTANT POINT
The appellant cannot be penalized for the action/inaction of the UIT, and the court held that the direction to pay interest for the balance amount was not tenable as it was based on a rule applicable to residential plots, not commercial plots.

ORDER :

1. This intra court appeal is filed by the appellant being aggrieved with the order dated 27.09.2007 passed by the learned Single Judge in S.B. Civil Writ Petition No.452/1996, whereby the learned Single Judge, while allowing the writ petition filed by the petitioner, has directed the respondents to accept the remaining amount of Rs.11,86,550/- from the petitioner for executing lease deed in his favour with a further direction to the petitioner to pay interest over the balance amount of Rs.11,86,550/- @ 15% per annum to the respondent – Urban Improvement Trust (for short ‘the UIT’) from 30.01.1996.

2. Learned Single Judge has further observed that the interest shall be appropriated under Sub-Rule 5 of Rule 17 of the Urban Improvement (Disposal of Urban Land) Rules, 1974.

3. Brief facts of the case are that the appellant has participated in the auction proceedings conducted by the respondent – UIT for sale of commercial plot situated at Sector 5, Hiran Magri, Udaipur. The appellant deposited earnest money of Rs.5,000/- in cash and his bid of Rs.311 per sq. ft. being the highest bid was accepted by the respondent – UIT. The total cost of the plot was Rs.15,86,100/- and the appellant has deposited 1/4th of the above amount within time. The bid of the appellant was accepted by the Chairman of the UIT on 18.01.1996 and he was requested to deposit the balance amount of Rs.11,86,550/- and pursuant to that, the appellant has deposited three post dated cheques to the respondent, which were accepted by it, however instead of executing the lease deed, the UIT has issued a communication to the appellant that the bid which was accepted and confirmed by the Chairman – UIT has been canceled. Simultaneously, a cheque of Rs.4,00,000/- has been returned to the appellant and being aggrieved with the same, the appellant has preferred the writ petition. The learned Single Judge, while allowing the writ petition, has observed as under :

"The facts which are not in dispute are that the respondent UIT put the plot in question for sale by auction on 17.01.1996. The petitioner gave bid of Rs.311/- per sq.ft. and that was the highest bid. The petitioner deposited total Rs.4,00,000/- which is the 1/4th of the amount. The respondent UIT itself conveyed that the sale has been confirmed by the chairman of the UIT on 18.01.1996. The petitioner was asked to deposit the balance amount of Rs.11,86,550/- by 15.02.1996.

On 24.01.1996, the chairman of the UIT wrote, “Rate seems quite less. The current rate is approximately 500/- per sq.ft. The proceedings are not conducted properly.” It appears from the said endorsement which is dated 24.01.1996, but before that the chairman of the UIT already confirmed the sale on 18.01.1996. Thereafter, the petitioner was asked to deposit the balance 3/4th amount vide letter dated 19.01.1996. Therefore, once the sale has been confirmed by the chairman of the UIT, it could not have been cancelled by the chairman. Said order of cancellation dated 24.01.1996 was also passed without giving opportunity of hearing to the petitioner and without recording any basis for reaching to the conclusion that the market rate of the property at relevant time was Rs.500/- per sq.ft. It is true that it was not obligatory on the part of the chairman, UIT to accept the highest bid but when the sale is confirmed by the chairman, UIT, a right accrued in favour of the petitioner and that could not have been taken away unilaterally and that too without affording opportunity of hearing to the aggrieved person. Therefore, on this ground alone, the order referred above, which only recorded the fact that the price is less than the current market rate and the price of the land could have been Rs.500/- per sq.ft. and which specifically has not cancelled the auction or the bid, is violative of principles of natural justice and, therefore, liable to be set aside.

So far as factual aspect is concerned, the petitioner has placed on record the approval granted fo