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2025 Supreme(Online)(Kar) 18045
KARNATAKA HIGH COURT
M.NAGAPRASANNA, J
SRI. UDAYA BASRUR – Appellant
Versus
BENGALURU DEVELOPMENT AUTHORITY – Respondent
WRIT PETITION NO. 8892 OF 2025
For the Appellants/Petitioners: SRI. SATHYANARAYANA
For the Respondents: SRI. VINAYAKA PANDIT
Judicial delays do not justify imposing interest on delayed payments post court intervention.
Headnote:(A) Constitution of India - Articles 226 and 227 - Challenging the demand notice for interest on delayed payment - The petitioner, as a successful auction bidder, sought reduction of interest for the period after a judicial decision set aside the cancellation of allotment - The court held that the delay caused by the BDA in complying with the prior court's order could not lead to additional liability for the petitioner. (Paras 8 and 10)
(B) Demand Notice - Validity - The court ruled that the BDA could not impose interest post the date the writ appeal was pending as the act of the court shall not prejudice the parties (actus curiae neminem gravabit). (Paras 10 and 11)
Facts of the case:
The petitioner successfully bid for a site in 2018 but delayed payments led to a cancellation order, which was later set aside by the court. The BDA demanded interest from 2018 to 2025, which was challenged by the petitioner.
Findings of Court:
The petitioner is liable for interest only until the court's intervention, with the BDA instructed to recalibrate the payment terms according to the modified order.
Issues: Determination of interest imposed on the delayed payment in light of judicial delays and court rulings.
Ratio Decidendi: The court established that judicial delays should not penalize the party beyond their period of fault, reinforcing the principle that an act of court should not harm any party. The modified time frame for liability of interest was set.
Result: The writ petition is allowed in part, with modifications to the interest liability.
| Table of Content |
|---|
| 1. the process of auction, payment terms, and initial cancellation. (Para 1 , 4) |
| 2. arguments about the reasonableness of interest imposed. (Para 5 , 6) |
| 3. court's reasoning regarding the judicial delays affecting interest liability. (Para 7 , 8 , 9 , 10) |
| 4. final order modifying the demand notice and interest terms. (Para 11 , 12 , 13) |
ORAL ORDER
The petitioner is before this Court calling in question a demand notice dated 12.02.2025, insofar as it imposes interest upon the delayed payment and also seeks a mandamus directing the respondent - BDA to refund the excess amount of interest collected to the tune of Rs.71,17,876/-.
2. Heard Shri Sathyanarayana, learned counsel appearing for the petitioner and Shri Vinayaka S. Pandit, learned counsel appearing for the respondents
3. The facts adumbrated are as follows:
The BDA issues a notification on 30.01.2018 concerning site No.16, 4th Block, Sri M.V. Layout for e-auction. The auction was conducted between 06.02.2018 to 20.02.2018. The result of the auction is the emergence of the petitioner, as the successful bidder. The sum was declared to be Rs.1,52,98,800/- and called upon the petitioner to pay the balance amount within 45 days. It transpires that the petitioner made a part payment only on 28.11.2018 and not the complete payment, as was required in law.
4. The petitioner then represents to the authority seeking extension of time or waiver of interest, as the case would be. The representation comes to be rejected on 04.02.2020, which follows a cancellation order on 30.05.2020.
4.1 The petitioner calls the said order of cancellation in question before this Court in WP.No.2663/2021. The co-ordinate bench of this Court in terms of its order dated 22.08.2022, sets aside the order of cancellation and directs the respondent - BDA to consider the matter in the light of the observations made in the course of the order. The observations in the course of the order was to collect the outstanding amount along with applicable interest and pass necessary orders, in accordance with law, within 30 days from the date of receipt of the copy of the order.
4.2 The BDA does not comply with the order, but chooses to challenge it before the division bench in WA.No.1081/2022, the writ appeal also comes to be dismissed on 09.12.2024, affirming the findings of the learned single Judge.
4.3 The respondent - BDA then sought to comply with the order, but issues a demand notice demanding interest from 2018 till 2025, the date on which the demand notice was issued. The petitioner then makes the payment of interest and challenges the same before this Court.
5. The learned counsel appearing for the petitioner would submit that the period of pendency of the petitions, both before the learned single Judge and the division bench, is calculated as interest and imposed upon the petitioner. The learned counsel submits that for the folly of the petitioner, for not paying the amount for two long years from 2018 to 2020, he is ready to pay interest, but not for the subsequent period, as the allotment had been cancelled and the cancellation is set aside by this Court.
6. Shri Vinayaka S. Pandit, learned counsel appearing for the respondent - BDA submits that no fault can be found with the imposition of interest for the period throughout. At best, the petitioner may get relief at the period when the writ appeal was pending, as the BDA had chosen to file a writ appeal. He would submit that the petition be dismissed only with the aforesaid observation and is not entitled to any relief beyond what is submitted.
7. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material available on record.
8. The afore-narrated facts are not in dispute. The issue, as observed, lies in a narrow compass. The petitioner is an auction purchaser. The auction is conducted by the BDA on 30.01.2018. The petitioner was called upon to pay Rs.1,52,98,800/- within 45 days from 12.
