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PUNJAB AND HARYANA HIGH COURT
G.S. Singhvi and Mehtab Singh Gill, JJ.
Smt. Kanta Devi Budhiraja - Petitioner
Versus
State of Haryana - Respondents
Civil Writ Petition No. 15253 of 1998.
Decided On : 16 November, 1999
HARYANA URBAN DEVELOPMENT AUTHORITY ACT, 1977 - SECTION 17 - HARYANA URBAN DEVELOPMENT (DISPOSAL OF LAND AND BUILDINGS) REGULATIONS, 1978 - REGULATION 6(2) - RESUMPTION OF SITE - INTEREST ON INSTALMENTS - RATE OF INTEREST - COMPOUND INTEREST - ESTOPPEL - WAIVER - LOCUS STANDI - IMPLEADMENT OF PARTIES - ALLOTMENT OF COMMERCIAL SITE - CONDITIONS OF ALLOTMENT - PAYMENT OF INSTALMENTS - DELAY IN PAYMENT - DEFAULT - RESUMPTION OF SITE - RESTORATION OF SITE - PAYMENT OF OUTSTANDING DUES - RATE OF INTEREST - ESTOPPEL - WAIVER - LOCUS STANDI - IMPLEADMENT OF PARTIES.
Fact of the Case:
The petitioner, a general power of attorney holder of the allottees of a commercial site in Panchkula, challenged the orders of resumption of the site by the Haryana Urban Development Authority (HUDA) and the appellate and revisional authorities for non-payment of instalments of the price. The petitioner contended that HUDA could not have compelled the allottees to pay instalments as necessary steps had not been taken to develop the site and possession of the site was not given to the allottees till 1998; that HUDA could not charge interest for a period prior to the date on which the possession of the site was offered to the allottees; and that HUDA was not entitled to charge interest @ 18% per annum.
Finding of the Court:
The Court held that the allottees were bound to pay the instalments of price on the due dates and they could not avoid their contractual liability on the pretext of lack of development. The Court also held that the decision of the respondents to charge interest @ 18% from the allottees for the period of default did not suffer from any legal infirmity. However, the Court held that the respondents could not charge compound interest from the allottees in respect of the period of default.
Issues: 1. Whether the allottees were bound to pay the instalments of price on the due dates despite the lack of development of the site? 2. Whether HUDA could charge interest for a period prior to the date on which the possession of the site was offered to the allottees? 3. Whether HUDA was entitled to charge interest @ 18% per annum? 4. Whether the allottees were estopped from challenging the levy of interest @ 18% per annum? 5. Whether the petitioner had the locus standi to challenge the orders of resumption of the site by HUDA and the appellate and revisional authorities?
Ratio Decidendi: 1. The allottees were bound to pay the instalments of price on the due dates and they could not avoid their contractual liability on the pretext of lack of development. 2. HUDA could not charge interest for a period prior to the date on which the possession of the site was offered to the allottees. 3. HUDA was entitled to charge interest @ 18% per annum. 4. The allottees were estopped from challenging the levy of interest @ 18% per annum. 5. The petitioner had the locus standi to challenge the orders of resumption of the site by HUDA and the appellate and revisional authorities.
Final Decision: The writ petition was dismissed subject to the direction that the respondents shall not charge compound interest from the allottees in respect of the period of default.
G.S. Singhvi, J. - On the basis of highest bid of Rs. 15,75,000/- given by them in the open auction held by the Haryana Urban Development Authority (for short "HUDA"), commercial site No. 29, Sector 11, Panchkula was jointly allotted to Smt. Madhu Gupta, Santosh Gupta, Rita Gupta, Satish Kumar, Satwant and Akshey Kumar subject to the conditions stipulated in the letter of allotment Annexure P-1 dated 5.10.1987 issued by the Estate Officer, HUDA, Panchkula (respondent No. 3) in Form (cc) prescribed under Regulation 6(2) of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 (hereinafter referred to as the 1978 Regulations). Clauses 4, 5, 6 and 23 of the letter of allotment read as under :
"4. You are requested to remit Rs. 2,36,250/- in order to make the 25% price of the said plot/building within 30 days from the date of issue of this letter. The payment shall be made by a bank draft payable to the Estate Officer, HUDA, Panchkula, and drawn on any scheduled bank at Panchkula. In case of failure to deposit the said amount within the above specified period, the allotment shall be cancelled and the deposit of 10% bid money deposited at the time of bid shall sand forfeited to the Authority, against which you shall have no claim for damages.
5. The balance amount, i.e. Rs. 11,81,250/- of the above price of the plot/building can be paid in lump-sum, without interest within 60 days from the date of issue of the allotment letter or in 8 half yearly/annual instalments. The first instalment will fall due after the expiry of six months/one year of the date of issue of this letter. Each instalment would be recoverable together with interest on the balance price at 10% interest on the remaining amount. The interest shall, however, accrue from the date of offer of possession.
6. The possession of the plot/building may be taken immediately after making payment of balance 15% amount as demanded in para 4 above. xx xx xx xx
23. Half yearly instalments of Rs. .... will fall due on 5th April, every year as under :
Sr. No. Due date Principal Interest Total
1. 147656.25 59062.48 206718.73
2. 177656.25 51679.67 199335.93
3. 147656.25 44256.86 191953.11
4. 147656.25 36914.05 184570.30
5. 147656.25 29531.24 177187.49
6. 147656.25 22148.43 169804.68
7. 147656.25 14765.62 162421.87
8. 147656.25 7382.81 155834.06"
2. After about two years of the auction of site, respondent No. 3 issued notices to the allottees under Section 17 of the Haryana Urban Development Authority Act, 1977 (hereinafter referred to as the Act) requiring them to deposit the amount of instalments which had become payable in accordance with the schedule of payment specified in clause 23 of the letter of allotment but they failed to pay the amount due to the HUDA. Instead, they submitted representation dated 22.6.1992 (Annexure-P.3) through Shri Tarsem Jindal, General Power of Attorney asserting therein that interest only @ 10% can be recovered from them from the date on which possession of the site was given but they failed to evoke any favourable response from respondent No. 3. After considering the same respondent No. 3 passed order dated 1.9.1992 for resumption of the site by observing as under :
"As per condition No. 5 of the allotment letter, it is incumbent upon the allottee to pay in the instalments on due date but they did not deposit the amount. Thereafter the following registered notices under Section 17 of the HUDA Act for the recovery of sum of Rs. 8,86,400/- on account of instalment were served upon the allottees.
1. Notice under 17(2) vide Memo No. 18817 dated 7.8.1989 for Rs. 8,86,400/-
2. Notice under 17(2) vide Memo No. 22165 dated 12.12.1989
From the above it is pertinent to mention that after the allotment of site and deposit of 15% amount i.e. Rs. 2,36,250/- on 9.11.1987 no payment against the instalments till 2.12.1989 was received, whereas four instalments had become due. It is also evident from the record that no change in their addr
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