G.S. Singhvi, J.
1. The facts necessary for deciding this petition filed by Ram Kishan Gulati and three others for quashing of the notices and orders is sued by the Estate Officer and the Chief Administrator, Haryana Urban Development Authority, Panchkula (hereinafter referred as to "HUDA"), are that on the basis of highest bid of Rs.9,55,500/- given by them in the auction held by respondent No.3, Showroom Plot No.7, Sector 11, Panchkula measuring 574.75 sq. metres was allotted to Shri Agya Ram and Ors. (predecessor-in-interest of the petitioners). They deposited 10% price of the plot at the fall of hammer but delayed the deposit of remaining 15% as required by Clause 4 of the letter of allotment. A part of 15% of the price was deposited on 22.9.1986 and the balance was deposited on 11.10.1986. Notwithstanding this de fault, possession of the plot was delivered to the allottees on 21.6.1988. Thereafter, they constructed the building and occupied the same. Due to non-payment of instalments in accordance with Clause 5 of the letter of allotment, proceedings under Section 17 of the Haryana Urban Development, Authority Act, 1977 (hereinafter referred to as 'the Act') were initiated against Shri Agya Ram and Ors.. Notices under Section 17(1) to 17(4) of the Act were issued to them but they did not deposit the instalments of the price. In stead, Shri S.R. Suri, Advocate who appeared on their behalf before the Estate Officer, Panchkula (hereinafter described as 'respondent No.3') pleaded that interest may not be charged because the development works were not complete at the site. This plea of Shri Suri was rejected by respondent No.3 who observed that the development work had, in fact, been completed. He further held that the allottees are evading the payment of out standing dues. On that premises, he ordered resumption of the site and forfeiture of Rs.2,30,143/- out of amount deposited by the allottees. The relevant portion of the order passed by the respondent No.3, which we have taken from the original file produced by Shri R.S. Chahar is reproduced below:-
"As per condition No.5 of the allotment letter, it was incumbent upon the allottee to pay the due instalments on due dates, but they did not deposit the due amount. Therefore, the following regd. notice u/s 17 of the HUDA Act for recovering a sum of Rs.9,10,000/- on account of outstanding dues were served upon the allottees.
1. Notice U/s 17(1) vide memo No.18819 dated 7.10.89 for Rs.9,10,000/-.
In response to the above notice, reacting sharply the allottees have resorted to frivolous correspondence and contended the non-completion of development works and charging the alleged interest on account thereof. While replying to the notice vide their reply dated 1.11.98. They have also supported their reply with the copy of undertaking given by the then Administrator. Miss Leena Nair dated 17.2.88 stating that no interest on the principal shall be charged if shops from the residential premises were not vacated. Since this undertaking was not held valid by the Chief Administrator, HUDA because she was not competent to give such undertaking. Therefore, both these representations were not considered satisfactory being not based on facts having any authenticity. Since the development works were complete at site at the time of allotment of this site, therefore, by rejecting their representations the further notices U/s 17 of HUDA Act as per detail given below were again served upon them.
1. Notice U/s 17(2) vide memo No.22216 dated 13.12.89.
In response to the above notices neither the allottees have appeared for hearing nor they have deposited even a single penny against the outstanding dues. This negligence was viewed seriously and the Estate Officer had imposed a penalty of Rs.91,000/-vide this office memo No.462 dated 11.1.90 and further directed them to make the payment of outstanding dues within 30 days. But the allottee have filed an appeal before the Administrator, HUDA, Panchkula against these orders. The appeal has also been rejected by the appellate authority and the order issued by the Estate Officer, HUDA, Panchkula is upheld. However, a lenient view was again taken and to give them further opportunities the process of notices was again adopted and the notices u/s 17(3) were again served upon them.
1. Notice U/s 17(3) vide memo No.546 dated 11.1.93 for Rs. 19,54,783/-.
2. Notice U/s 17(4) vide memo No.7922 dated 21.5.93 for Rs.21,23,850/-.
In response to the above mentioned notices the Advocate of the allottee Shri S.R. Suri appeared for hearing on 8.6.92 and he has given a representation that the development works were not complete at the site. Therefore, the interest should not be charged against the outstanding dues. It is not out of place to point out here that the development works were complete at site when it was sold and the allottees are evading the payment of outstanding dues by resorting to these frivolous contentions. It is also pertinent to mention here that since the allotment of site that allottees remained grossly defaulter in making the up to date payments of instalments. Whereas, all 8 Nos. half yearly instalments had already been elapsed on 19.8.90 and the amount of outstanding due has accumulated to Rs.20,62,680/- up to 8.6.1993. Whereas the Show Room is constructed at site and the allottees are deriving all the benefits after occupying the same without obtaining occupation certificate from this office on the one hand, but evading payments of outstanding dues on the other. This clearly shows that non-seriousness of the allottees in clearing outstanding dues.
From the facts mentioned above it is clear that allottees are wilfully defaulting in making the due payment in spite of various notices issued by this office from time to time. Whereas, repeated opportunities have been given to them. Hence, I am of the considered opinion that the allottees have violated the terms and conditions of the allotment letter by not making the due payments in time. Hence, I order the resumption of Show Room Site No.7, Sector 11, Panchkula under powers conferred upon me U/s 17 of the HUDA Act. I also order the forfeiture of Rs.2,30,143/- out of the amount deposited by them.
Endst. No. 8617 Dated 9.6.1995"
By an order dated 4.2.1997, the Administrator HUDA, Panchkula (exercising the powers of the Chief Administrator, HUDA) dismissed the appeal filed by the petitioners. The relevant extract of the appellate order is reproduced below.-
"Keeping in view the arguments of both the parties and facts on record, it is clear from the record that the appellants have retained the Show Room in question after paying almost 25% of the tentative price only. A number of notices has been issued to the appellants but they did not bother to pay any amount against the outstanding instalments which have become due. Moreover, the appellants has constructed the building over the Show Room in question and occupied illegally without obtaining Occupation certificate as required under the Erection of Building Regulations, 1979. Therefore., I find no illegality in the order of Estate Officer which is quite in accordance with terms and conditions of allotment and as per provisions of HUDA Act, 1977. Order of Estate Officer is upheld and the appeal is dismissed.
Announced in the open Court on 4.2.97.
(Exercising the powers of C.A. HUDA)"
The revision petition filed by the petitioners was dismissed by the Commissioner and Secretary to Government, Town and Country Planning Department, Haryana, who expressed his concurrence with respondent No.3 and the appellate authority in the following words:-
"I have heard both the parties, it is admitted fact that not a single instalment was deposited by the allottee till 24.4.1995. If the instalments were paid on due times then the entire price of the plot would have been deposited by August, 1990. During the course of arguments the learned counsel of the petitioners admitted that they were ready to deposit the outstanding dues alongwith interest within three months if the site in question was restored to them. Keeping in view the facts and circumstances of the case, I hereby order that HUDA would arrive at the outstanding dues afresh by levying 10% interest on the instalments till 19.8.1990 and, thereafter, interest as per the policy of HUDA. Calculation sheet so prepared will be supplied to the petitioners by 15.4.97 and they will deposit the amount within three months from 15.4.1997. If they fail to deposit the amount within the stipulated date, the site shall stand resumed immediately after the expiry of the period.
Announced on 11.4.1997
Commissioner and Secretary to Government,
Town and Country Planning. Department,
The application dated 9.5.1997 filed by the petitioner under Section 151 C.P.C. with the prayer that the revisional order may be modified by directing the respondents to charge interest from the date of completion of work was filed by the Chief Administrator with the observation that the said order was passed with the consent of the petitioners.
2. In the meanwhile, proceedings under Section 18(1 )(b) of the Act were initiated against the petitioners and after issuing notice to them, respondent No. 3 passed order Annexure P.6 dated 18.3.1997 directing their ejectment from the plot in question.
3. The petitioners have challenged the impugned notices/orders by contending that the respondents cannot charge interest from them because they failed to develop the site in accordance with the provisions of the Act and the Regulations framed there under. Another contention urged by them is that the demand of interest over and above the rate specified in Clause 5 of letter of allotment is without jurisdiction. They have pleaded that after having agreed to charge interest @ 10% on the delayed payment of instalments, the respondents are estopped from charging interest at higher rates.
4. The respondents have contested the writ petition by stating that the development works were completed before issuance of the letter of allotment and possession was given to them after providing all the amenities. They have defended the resumption of plot on the ground that the allottees willfully defaulted in the payment of instalments. They have averred that after having secured the restoration of allotment by making a statement before the revisional authority that they will pay the outstanding dues with interest, the petitioners cannot turn around and question the jurisdiction of the respondents to levy interest as per the policy of the HUDA. The respondents have further averred that the construction of the show room and occupation thereof by the petitioners even without obtaining required certificate under the Haryana Urban Development Authority (Erection of Buildings) Regulations, 1979 (hereinafter referred to as the 1979 Regulations) belies their claim that the development work has not been carried out.
5. Along with the replication filed by them, the petitioners have placed before the Court a chart containing information regarding the development works undertaken and the amenities made available in respect of S.C.O. sites of Sector 11, Panchkula. At the same time, they have reiterated the plea set up in the writ petition that the respondents cannot charge interest at a rate higher then the one specified in the letter of allotment.
6. The first contention urged by Shri S.C. Kapoor, learned senior counsel appearing for the petitioners is that the respondents are estopped from charging interest from the petitioners because they failed to fulfil the promise made to the allottees that fully developed plots will be allotted. He relied on the contents of the chart Annexure P. 13 and the memos of appeal and revision filed by the petitioners and argued that the levy of interest should be out rightly nullified because due to the lack of amenities like road, electricity and water connections etc., the petitioners could not commence the business activities in the building constructed by them. The second contention urged by Shri Kapoor is that in view of the express provision contained in Clause 5 of the letter of allotment empowering the competent authority to charge interest @ 10%, the respondents do not have the jurisdiction to levy and collect interest @ 18%. According to the learned counsel, the consent given on behalf of the petitioners to pay interest must be read in the context of the terms and conditions subject to which the plot was allotted and any agreement made by or on behalf of the petitioners to pay interest at a higher rate is liable to be ignored. Learned counsel then invited our attention to memo No.ADA-1 -99/12907 dated 12.4.1999 issued by the Chief Administrator, HUDA, Panchkula and submitted that in view of latest instructions issued by the Chief Execu tive of HUDA, the respondents can at the best charge interest @ 10%. He relied on the judgments of this Court in Baij Nath Garg v. The Chief Administrator, HUDA and Ors., (1995-2)110 P.L.R. 261 and Aruna Luthra v. State of Haryana and Ors., (1998-2)119 P.L.R. 687 in support of his arguments.
7. Shri R.S. Chahar, counsel for the HUDA controverted the submissions made by Shri Kapoor and argued that charging of interest @ 18% is consistent with the policy of the HUDA. Shri Chahar submitted that Clause 5 of the letter of allotment does not deal with the interest on delayed payment and, therefore, the petitioners cannot rely upon the same for the purpose of seeking nullification of the levy of interest @ 18%. He strongly refuted the statement made by Shri Kapoor that the development has not been under taken in the area and pointed out that the completion of construction of the building and illegal occupation thereof by the petitioners is a clear proof of the availability of amenities like road, electricity, water etc.
8. We have thoughtfully considered the respective contention and have gone through the records of the writ petition as well as the record produced by Shri R.S. Chahar. Ad mittedly, the allotment of the plot in question was made to Shri Agya Ram and Ors. in accordance with Section 15 of the Act read with Regulations 3, 5(6), (7) and 6 of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 (here inafterreferred to as the 1978 Regulations). These provisions read as under: -
15. Disposal of land- (1) Subject to any directions given by the State-Government under this Act and the provisions of Sub-Section (5), the Authority may dispose of-
(a) any land acquired by it or transferred to it by the State Government without undertaking or carrying out any development thereon; or
(b) any such land after undertaking or carrying out such development as it thinks fit, to such persons, in such manner and subject to such terms and conditions, as it considers expedient for securing development.
(2) Nothing in this Act shall be constructed as enabling the authority to dispose of land by way of gift, but subject to this condition, reference in this Act to the disposal of land shall be constructed as reference to the disposal thereof in any manner, whether by way of sale, exchange or lease or by the creation of any easement right or privilege or otherwise.
(3) Subject to the provisions hereinafter contained, the Authority may sell, lease, or otherwise transfer whether by auction, allotment or otherwise any land or building belonging to it on such terms and conditions as it may, by regulations provide.
(4) The consideration money for any transfer under sub-section (1) shall be paid to the Authority in such manner as may be provided by regulations.
(5) Notwithstanding anything contained in any other law, for the time being in force, any land or building or both, as the case may be, shall continue to belong to the authority until the entire consideration money together with interest and other amount, if any, due to the Authority on account of the sale of such land or building or both is paid.
(6) Until the conditions provided in the regulations are fulfilled, the transferee shall not transfer his rights in the land or building except with the previous permission of the Authority, which may be granted on such terms and conditions as the authority may deem fit.
The 1978 Regulations:
3. Mode of disposal.- Subject to any direction issued by the State Government under the Act and to the provisions of Sub-Section (5) of Section 15 of the Act:-
(a) the Authority may dispose of any land belonging to it in developed or an undeveloped form:
(b) any land or building of the Authority may be disposed of by Authority by way of sale or lease or exchange or by the creation of any easement right or privilege or otherwise;
(c) the Authority may dispose of its land or building by way of sale or lease either by allotment or by auction, which may be by open bid or by inviting tenders.
XX XX XX XX XX
5. Procedure in case of sale or lease of land or building by allotment:-
XX XX XX XX XX
(6) The payment of balance of the price/premium shall be made, in the manner as may be communicated, either in lump sum or in such number of annual or half yearly equal installments not exceeding ten, as may be decided by the Authority from time to time. The amount of first installment shall be payable within one year or six months from the date of allotment and the subsequent installments shall similarly accrue every yearly/half yearly on the due date, as the case may be.
(7) Each installment would be recoverable together with interest on the balance price/premium, at the rate as may be decided by the Authority at the time of allotment. The interest shall, however, accrue from the date of offer of possession of land/building. No interest shall be payable if the whole of the balance price/premium is paid in full, within sixty days of the offer of possession. If at any time the transferee opts to make the balance payment in full, he shall be entitled to do so and interest shall be charged on the balance amount only for the period from the date the last installment was due to the date he makes full payment.
6. Sale or lease of land or building by auction.- (1) In the case of sale or lease by auction, the price/premium to be charged shall be such reserve price/premium as may be determined taking into consideration the various factors as indicated in Sub-Regulation (I) of Regulation 4 or any higher amount determined as a result of bidding in open auction.
(2) 10 per cent of the highest bid shall be paid on the spot by the highest bidder in cash or by means of a demand draft in the manner specified in Sub-Regulation (2) of Regulation 5. The successful bidder shall be issued allotment letter in form 'CC or 'C-II by registered post and another 15 per cent of the bid accepted shall be payable by the successful bidder, in the manner, indicated, within thirty days of the date of allotment letter conveying acceptance of the bid by the Chief Administrator; failing which the 10 per cent amount already deposited shall stand forfeited to the Authority and the successful bidder shall have no claim to the land or building auctioned.
(3) The payment of balance of the price/premium, rate of interest chargeable and the recovery of interest shall be in the same manner as provided in Sub-Regulations (6) and (7) of Regulations 5.
(4) The general terms and conditions of the auction shall be such as may be framed by the Chief Administrator from time to time and announced to the public before auction on the spot."
Clause 2, 3, 4, 5, 15 and 16 of the letter of allotment dated 19.8.1986 issued by respondent No.3 in Form CC prescribed by Regulation 6(2) of the 1978 Regulations, which have bearing on the issues raised in the writ petition are reproduced below:-
"2. Your bid for plot N6.7 in Sector 11 at Panchkula has been accepted and the plot/building as detailed below has been allotted to you on free-hold basis as per the following terms and conditions and subject to the provisions of the Haryana Urban Development Authority Act, 1977 (hereinafter referred to as the Act) and the rules/regulations applicable there under and as amended from time to time including terms and conditions as already announced at the time of auction and accepted by you. ____________________________________________________________________________________
Sector Name of Plot/Building Approx Area Price of
No. Urban No. Dimension in PIot/Bldg.
Area description Sq.
as notified Mtrs.
at the time
11 Panchkula Show Room 11.00x52.55 574.75 9,55,500/-
Building Sq. Mtrs.
3. The sum of Rs.95,500/- deposited by you as bid money at the time of bid will be adjusted against the said plot/building.
4. You are requested to remit Rs. 1,43,375/- in order to make the 25% price of the said plot 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 stand forfeited to the Authority, against which you shall have no claim for damages.
5. The balance amount i.e. Rs.7,16,625/- 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 instalments. The first instalment will fall due after the expiry of six months of the date of issue of this letter. Each instalment would be recover able 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. XX XX XX XX XX
15. The Authority will not be responsible for leveling the uneven sites.
16. You will have to complete the construction within two years of the date of offer of possession after getting the plans of the proposed building approved from the competent authority in accordance with the regulations governing the erection of buildings. This time limit is extendable by the Estate Officer if he is satisfied that non-construction of the building was due to reasons beyond your control, otherwise this plot is liable to be resumed and the whole or part of the money paid, if any, in respect of it forfeited in accordance with the provisions of the said Act. You shall not erect any building or make any alteration/addition without prior permission of the Estate Officer. No fragmentation of any land or building shall be permitted."
A careful reading of the statutory provisions quoted above, the substantive portions of which have been incorporated in the letter of allotment, clearly shows that the allot tees were required to pay 25% of the price before the delivery of possession and the balance price in lump-sum without being required to pay interest or to pay the same in 8 instalments with interest. In terms of Clauses 2, 3 and 4 of the letter of allotment. Rs.95,500/- representing 10% of the total price were to be deposited at the time of bid and remaining 15% i.e. Rs. 1,43,375/- were to be paid in the next 30 days. The failure of the allottees to deposit 25% of the price within 30 days could entail-cancellation of allotment and forfeiture of 10% of the bid money. For paying the balance price i.e. Rs.7,16,625/- representing 75% of the total price, the allottees were given two options. The first option was to pay total balance price in lump sum within 60 days from the date of issue of allotment letter. In that case, they were not to pay interest. The other option available to them was to pay the balance price in 8 half yearly instalments with interest @ 10% payable from the date of offer of possession. However, there is nothing in the tetter of allotment which may suggest that the demand of the balance price was subject to the condition of the respondents carrying out the development work. Therefore, we are unable to agree with Shri Kapoor that the petitioners were not required to pay the balance price because the particular development work had not been carried out at the site. We are also unable to agree with the learned counsel that the petitioners could not be asked to pay interest on the balance price because they were unable to commence business activities due to the lack of amenities like road, electricity, water and sewerage.
9. The following are the other reasons why the argument of Shri Kapoor that the respondents cannot recover the amount of balance price along with interest should be rejected:-
"(a) At the time of taking the possession on 21.6.1988, the representative of the allottees did not make any note on the possession certificate that the plot is undeveloped or that the area was without amenities like roads, electricity, water, sewerage etc. The photostat copy of the possession certificate which is available in the file produced by Shri Chahar shows that the person who took possession did not express any reservation about the status of the plot or development in the area. In view of this, it is reasonable to hold that the plea of non-development raised on behalf of the petitioners is an after-thought.
(b) Clause 5 read with Clause 23 of the letter of allotment made, it obligatory for the allottees to pay half yearly instalment with interest on the specified dates. This, is our view, is sufficient to negative the claim of the petitioners that they are not required to pay the instalments together with interest till the area is fully developed.
(c) The payment of instalments of the balance price was not contingent upon the respondents providing particular amenities to the plot holders.
(d) Soon after getting possession, the petitioners not only erected the building but also occupied the same without even obtaining the occupation certificate. This fact, in our opinion, is sufficient to reject their plea that the area was not fully developed.
(e) A perusal of the chart Annexure P. 13 shows that the basic facilities and amenities had already, been provided in the area. This is also supported from the fact that the petitioners have not come forward to plead that they had applied for electricity and water connections but the same were not made available to them."
We are further of the view that the condition requiring the allottee to pay interest on the balance price, if he/she decides to pay the same in instalments, is based on simple but sound logic and is quite rational. If an allottees pays the balance price in lump-sum then the respondents can deposit the amount in a bank and earn interest. This is not possible if the balance price is paid otherwise than in lump sum. In that event, money remains with the allottees who can utilise the same for his/her benefit and even earn interest on it by keeping the same deposited in the bank. Therefore, charging of interest @ 10% on the balance price cannot be termed as arbitrary, unreasonable, unconscious able or illegal. The condition incorporated in Clause 5 of the letter of allotment that interest shall be payable from the date of offer of possession operates as a safeguard for the allottees against any possibility of exploitation. In view of this condition, the allottee is not put to the burden of interest before he gets an opportunity to take the possession. We, therefore, do not find anything inherently wrong in the levy of interest on the balance price in a case in which an allottee decides to pay the balance price in instalments.
10. The question whether an allottees can delay the payment of instalments of price with interest on the pretext that the area is not fully developed or that the particular amenities have not been provided has been considered and answered in the negative in C.W.P. No.9503 of 1996, Ajit Singh and Ors. v, Chandigarh, Administration through Administrator, Union Territory and Ors., decided on 29.8.1996 and Sukhpal Singh Kang and Ors. v. Chandigarh Administration and Anr., (1999-1)121 P.L.R. 54. In Ajit Singh's case (supra), the petitioners contended that they were not bound to pay the instalments because amenities have not been provided by the respondents. While rejecting their contentions, this Court held as under:-
"There is another important reason why no indulgence should be shown to the petitioners. The allotment letter Annexure P.1, contain a clear stipulation regarding the schedule of payment.. Para 8 of the allotment letter postulates cancellation of lease on account of non-payment of instalment money. Para 8-A empowers the Estate Officer to allow payment of instalments with penalty up to 100 per cent of the amount due and interest at the rate of 12 per cent for the delayed period. Duty to pay tee and taxes etc. was also of the petitioners. In addition to the conditions incorporated in the letter of allotment, the petitioners were bound to abide by the provisions of the Act and the Rules. The general terms and conditions laid down by the Administration form part of the contract entered into between the petitioners and the respondents. Paras 11,12 and 21 of the general conditions also contemplate payment of 25 per cent amount as a condition precedent to the acceptance of bid; remaining 75 per cent in three equated instalments along with interest; and cancellation of the lease as well as forfeiture of the whole or part of the premium already paid. The petitioners took possession of the property and raised construction thereon after having accepted the conditions incorporated in Annexure P.1 and R.1. They did so knowing fully the implications and consequences of their failure to pay the instalment money. After having accepted those conditions and taken public property on an assurance that they would faithfully comply with the conditions of payment laid down by the Administration, the petitioners are not entitled to plead that they were not bound to make payment of instalments on the ground that basic amenities were not provided by the Administration. We may add that payment of instalments was not subject to the Administration's providing basic amenities to the petitioner. Rather the conditions incorporated in Annexures P. 1 and R. 1 made it obligatory for the petitioners to pay their dues. Thus, the petitioner cannot wriggle out of the contract which they had entered into with the respondents. In matters like the present one, writ jurisdiction , cannot be exercised by the High Court to permit a party to commit a breach of the terms and conditions of contract of allotment."
In Sukhpal Singh Kang's case (supra), it has been held as under:-
"We also do not find anything in the rules from which it can be inferred that the administration of Union Territory is under an implied obligation to auction fully developed sites. The auction notices and the general terms and conditions, which were made known to the bidders at the time of auction did not postulate transfer of sites with all amenities. As a matter of fact, by virtue of Clause 12 of the general terms and conditions of auction and Clause 20 of the letter of allotment, it was made clear to the prospective lessees that the government does not own the responsibility for levelling the uneven sites. It is, thus, clear that the respondents did not invite bids for the sites by making representations to the public that fully developed sites will be auctioned. The petitioners have not disputed the factum of physical transfer of sites to them after the payment of 25% premium. The averments made in the writ petitions and the uncontested assertion made in the affidavits of the Assistant Estate Officer shows that the petitioners have not only erected multi-storeyed buildings on the site but most of them have also leased out the same to third parties. Therefore, it is not possible to accept the argument of the learned counsel that possession of the site cannot be treated to have been transferred to them."
Applying the ratio of the above quoted decisions to the facts of this case, we hold that the petitioners cannot get themselves relieved of their obligation to pay the instalments with interest.
11. The judgment of the learned Single judge in Baij Nath Garg v. The Chief Admin istrator, HUDA and other (supra) on which reliance has been placed by Shri Kapoor does not, in any manner, help the cause of the petitioners. A careful reading of that deci sion shows that plot No. 102, Sector 7, Ambala City was allotted to petitioner- Baij Nath on the basis of the highest bid given by him. The letter of allotment was issued on 21.2.1990. After paying Rs. 1,02,300/-, the petitioner surrendered the site and requested the respondents to refund the consideration money paid by him. The respondent-HUDA made deduction and refunded only a part of the amount deposited by him. The learned Single Judge held that in view of the conditions of allotment, the possession of the site was to be offered after completion of the development work and the interest could be charged from the date of offer of possession. He further held that due to the failure of the HUDA authorities to develop the sector, the petitioner cannot be made to pay inter est. In contrast, a perusal of letter of allotment issued in favour of Shri Agya Ram and Ors. shows that the handing over of possession was not dependent on the completion of particular development work and as a matter of fact, the allottees not only obtained possession on 21.6.1988, but also completed the construction and occupied the building without obtaining the occupation certificate. In this context, we consider it appropriate to take notice of Regulation 17 of the 1978 regulations and Regulations 3 to 11 of the 1979 Regulations. In terms of Regulation 17 of the 1978 Regulations read with Clause 16 of the letter of allotment, the allottees were required to complete the building within two years from the date of offer of possession in accordance with the regulations regulating erection of buildings'. Regulations 3 to 11 of the 1979 Regulations require them to submit application in the prescribed form for erection of the building. They were also required to furnish the documents specified in Regulation 3 of the 1979 Regulations . After the sanction of building plan in terms of Regulation 8 of the 1979 Regulations, they were to give notice of commencement of work and occupy the building after obtaining the occupation certificate in Form BR-IV which, as of necessity, must have been accompanied by a certificate in Form BR-V duly signed by Architect. However, in complete disregard of Regulation 11 of the 1979 Regulations, the petitioners occupied the building after completing the construction. Thus, their grievance against the lack of development is totally misconceived and no relief can be given to them on the basis of the judgment of the learned Single judge in Baij Nath Garg's case (supra).
12. The issue which remains to be decided is whether the respondents can charge 18% interest form the petitioners as a condition for restoration of the plot. The argument of Shri Kapoor is that in view of the express provision contained in the letter of allotment, the respondents cannot charge interest at a rate higher then 10% per annum. Ac cording to him 10% is the outer limit of the rate at which the interest is to be charged for normal as well as delayed payments and, therefore, the decision of the respondents to charge interest @ 18% from the petitioners should be declared as without jurisdiction, arbitrary and illegal. He strongly relied on the observations made in Aruna Luthra's case in support of his submission that the respondents do not have the authority to charge interest @ 18% per annum. In our opinion, the contention of the learned counsel is wholly untenable and merits rejection. At the cost of repetition, we deem it appropriate to ob serve that 10% interest which the allottees were liable to pay is not an interest on delayed payment. Rather, it is an integral part of the price determined by the respondents. The allottees and their successors were required to pay balance price in lump sum with out interest or to pay the same price in 8 half yearly instalments with interest. They adopted the second course and in this manner, they incurred the liability to pay interest @ 10%.
13. In our considered opinion, Regulations 5(6) and (7) and 6(3) of 1978 Regulations read with Clause 5 of the letter of allotment which deal with payment of balance price and interest in case the allottee opts to pay the balance price in instalments do not have any application to the cases in which the allottees commit default in the payment thereof on due dates. The cases of this category are to be dealt with under other provisions of the Act and the Regulations. Section 3 of the Act, which deals with the constitution of the HUDA declares that it shall be body Corporate with power to acquire, hold and dispose of property. In terms of Section 3(3) of the Act, the Authority consists of a Chair man, a Vice-Chairman, a Chief Administrator and maximum of 12 other members to be appointed by the government. Section 13 of the Act lays down that the objective of the Authority shall be to permit and secure development of all or any of the areas comprised in an urban area. For that purpose, the authority has been vested with the power to acquire by way of purchase, transfer, exchange or gift, hold manage, plan, develop and mortgage or otherwise dispose of land and other property and to carry out by itself or through any agency, building, engineering, mining and other operations, to execute works in connection with supply of water, disposal of sewerage, control of pollution etc. Section 15 deals with disposal of land. Section 30 lays down that the Authority shall carry out the directions, as may be issued, by the State Government for efficient administration of the Act, Section 53 empowers the State Government to make rules for carrying out the purpose of the Act and Section 54 empowers the Authority to make Regulations, which may provide for the various things enumerated in the said section including the terms and conditions on which transfer of any right, title and interest in any land or building may be permitted. A cumulative reading of these provisions generally and Section 15 in particular shows that the transfer of property vesting in HUDA, by way of allotment, is governed by the Regulations framed under Section 54 and the policy to be framed by the HUDA from time to time. The exercise of the various powers vested in HUDA is subject to the directions which the State Government may issue.
14. The issue whether penal rent should be charged from the allottees who default in the payment of price was considered in the 36th meeting of the Financial Committee of the HUDA held on 14.8.1987. The proposal put up before the Finance Committee was that in the case of default interest shall be charged @ 18% instead of the normal interest @ 10%. This proposal was approved by the Finance Committee vide agenda item No.XXXVI(17) and on that basis circular No.HUDA-Accounts-87/1398-1408 dated 15.1.1987 was issued by the Chief Administrator. That circular read as under :-
"Haryana Urban Development Authority
SCO No. 841, Manimajra
No. HUDA-Acctts-87/1398-1408 15.1.87
All the Estate officers, HUDA (in the State).
Subject: Revised rates of interest on instalments of plot holder.
It was under the active consideration of the Authority to charge higher rate of interest on the delayed payments. It was observed that the recovery of enhanced compensation and instalments are not being effected from the plot-holders in time because of lower rate of interest. The matter has been examined in detail and it has been decided that following rates of interest may be charged from the plot-holders who do not make the payment in time : a) Normal rate of interest : 10% P.A.
b) Interest for delayed payment of
instalments : 18% P.A. (Which include
10% P.A. normal interest)
Due date means the last day on which the payment falls due. Thus, interest at 18% P.A. is to be charged if payment is made after even one day after the due date. However, after the expiry of the one year from the due date, the resumption proceedings may be initiated.
In the case of amount due in account of "Enhanced compensation" the interest pattern of charging 10% interest from the due date will continue as such.
One notice should be issued to the plot holder regarding charging of this interest. This notice may be issued immediately after the due date if instalment has not been received. These instructions will come into force with immediate effect.
Please acknowledge its receipt.
Controller of Finance-
for Chief Administrator, HUDA"
The decision contained in the above reproduced circular was reiterated in the 37th meeting of the HUDA held on 29.3.1988 under the Chairmanship of the Chief Minister. The decision taken and the agenda item No.A-XXXVII(2) was that for the delayed payment interest @ 18% should be charged. The relevant extract of that decision is reproduced below:-
"It was further decided that the payment schedule in respect of residential/industrial plots will be as under:
(i) 10% bid money at the fall of hammer;
(ii) 15% within 30 days from the date of issue of allotment letter; and
(iii) balance 75% in six half yearly instalments However, for payment in instalments interest @ 10% per annum may be charged
from the date of offer of possession with provision to charge 18% interest on delayed payments."
In our opinion, these policy decisions govern the case of the petitioners and other cases of delayed payment of instalment/default in the payment of instalments and, there fore, no illegality has been committed by the respondents in charging 18% interest as a condition for restoration of the plot.
15. We are further of the opinion that the petitioners cannot question the levy of penal interest at a rate higher than 10% because theirs is not a case of simple delayed payment. Their plot was resumed by the competent authority because of the non-compliance of the conditions of allotment. That order was upheld by the appellate authority and when the revision came Up for hearing before the Commissioner and Secretary, Town and Country Planning Department, the counsel appearing for the petitioners stated that his clients will pay the dues of instalments alongwith interest, which necessarily means that the interest payable in accordance with the policy of HUDA. In our opinion, after having given an unequivocal undertaking before the revisional authority to pay the dues of the instalments with interest, the petitioners cannot turn around and challenge the jurisdiction of the respondents to charge interest @ 18% in accordance with the policy. The plea of the petitioners that they cannot be asked to pay interest @ 18%, if accepted, will lead to anomalous results. In that situation, no allottee of the HUDA land would pay the price in accordance with the conditions of allotment and feel relief against the resumption of plot by stating that he/she/it is ready to pay the entire price with interest at the normal rate. Otherwise also, it sounds wholly incongruous that an allottee who has delimited in the payment of instalments of the price is treated at par with the one who regularly pays the instalments with interest.
16. In this respect, it will be useful to take notice of the decision of the Supreme Court in Haryana Urban Development Authority and Anr. v. Roochira Ceramics and Anr., (1997-2)116 P.L.R. 512 (S.C.). The facts of that case were that the industrial plot allotted to the respondents was resumed under Section 17(4) of the Act due to non-payment of instalments. After remaining unsuccessful before the appellate authority, respondents instituted C.W.P. No.14676 of 1995 before this Court for invalidation of the order of resumption. A division bench of this Court accepted the plea of the respondents that they could not pay due to financial stringency and ordered the restoration of plot on payment of the remaining unpaid amount with interest @ 10% per annum instead of 18% calculated by the appellant. Their Lordships of the Supreme Court reversed the order of the High Court and held that there was no justification to accept the plea set up by the respondents.
17. The letter Annexure P-2 dated 17.12.1988 written by the Administrator, HUDA, Panchkula to the President, Joint Panchkula Shopkeepers Association and the memo dated 12.4.1999 issued by the Chief Administrator on which reliance has been placed by the learned counsel for the petitioners cannot, in our opinion, be made basis for giving relief to the petitioners. A perusal of Annexure-P.2. shows that then Administrator have given some assurance to the allottees that interest on principal shall be waived off for the period the shops are not resumed.
18. The memo dated 12.4.1999 which has been issued by the Chief Administrator during the pendency of this petition shows that on the basis of some judgments of this Court and the Supreme Court a direction has been given to charge 10% interest on the delayed payment. As far as letter Annexure-P.2 is concerned, it is sufficient to observe that the Administrator, HUDA, Panchkula did not have the authority to give any assurance to the plot holders about charging of interest etc. He was not the Chief Executive of the HUDA nor was the authorised by the government to act on behalf of the HUDA. Therefore, the so-called assurance given by him cannot be made basis for declaring that the charging of interest @ 18% on the delayed payment is without jurisdiction. The memo dated 12.4.1999 issued by the Chief Administrator cannot also be made basis for quashing the levy of interest because :-
(a) the decision contained in that memo is not based on the decision taken by the Haryana Urban Development Authority as a body corporate and the chief Administrator, alone does not have the jurisdiction to revise the rate of interest;
(b) in view of the decision taken by the HUDA as a body corporate and vide circular dated 15.1.1987, the memo dated 12.4.1999 will be deemed to have been issued without authority; and
(c) though the memo does not expressly refer to the particular judgment of the Court, the same appears to have been issued under a total mistaken impression about the ratio of the judgments of this Court in Aruna Luthra's case (supra); C.W.P. No.4405 of 1998, Manju Jain and Anr. v. H. U.D.A. and Ors., decided on April 2, 1998 and C.W.P. No.2363 of 1996, Ashwani Puri v. H.U.D.A., decided on 3.12.1996. However, it will be seen hereinafter that none of these decisions has any bearing on the issue of charging of interest on delayed payments or to the cases of restoration of the resumed plots.
A reading of the judgment of Aruna Luthra's case (supra) shows that S.C.F. No.33, Sector 7, Faridabad, was allotted to the petitioner on 5.12.1980. However, possession of the site was delivered to her some time in 1990. The Administrator, HUDA, exercising the powers of the Chief Administrator (acting as Arbitrator) issued direction in this respect. After some time, the petitioner applied for transfer. At that stage, the respondents demanded penal interest @ 18%. This Court held that the petitioner cannot be made to pay interest because the possession of premises was delivered to allotee on 4.5.1987. The relevant portion of that decision is extracted below:-
"We have heard counsel for the parties and from their pleadings it is clear that the possession of the S.C.F. was delivered to the petitioner on 4.5.1987. As per the decision of the Administrator, HUDA dated 21.5.1990 the petitioner is liable to pay interest only from the date of delivery of possession. This is also in accordance with Clause (6) of the allotment letter. Even according to Regulation 5(7) of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978, interest on delayed payments has to accrue only from the date of offer of possession of the building. The question that, however, arises for consideration is at what rate is the interest payable. According to the respondents, HUDA had prepared some policy on the basis of which interest is being charged @ 18%. On the other hand, the learned counsel for the petitioner strenuously urged that in terms of Clause (6) of the allotment letter the instalments were recoverable together with interest on the balance price @10%.
Having given our thoughtful consideration to the rival contentions of the parties, we are of the opinion that the petitioner is liable to pay interest at the agreed rate of 10% as stipulated in the letter of allotment. Allotment of S.C.F. through an open auction was the result of a contract between the parties whereby it was agreed between them that the unpaid instalments would be recoverable together with interest at the rate of 10% on the balance price. Clause (6) of the allotment letter contains this stipulation. In the light of this clause, it is not open to HUDA to claim and charge interest @18% as is being done in the instant case. All that is stated in para 14 of written statement is that the petitioner is liable to pay interest @ 18% per annum as per HUDA policy. What is that policy, under which provision of law has it been framed and whether it can over-ride the contractual stipulation contained in Clause (6) of the allotment letter has not been spelt out in the written statement. No provision of any law or the aforesaid regulations has been brought to our notice where by HUDA could charge interest at a rate exceeding the agreed rate of interest.
In the result, it has to be held that the petitioner is liable to pay interest @ 10% as agreed between the parties and that too w.e.f. 4.5.1987 on which date the possession of the premises was delivered to her. Consequently, the communication dated 11.4.1996 (Annexure P.11 with the writ petition) in so far it requires the petitioner to deposit a sum of Rs. 14,77,660/- is quashed and respondents 2 and 4 are directed to work out afresh the total amount, if any, payable by the petitioner together with interest @10% per annum w.e.f. 4.5.1987 and intimate the same to the petitioner who shall have to pay the same."
Manju Jain's case (supra) was decided on the basis of the judgment rendered in Aruna Luthra's case (supra). In Ashwani Puri's case (supra), the following order was passed by the Court:-
"The petitioner has deposited Rs.3.64 lacs and undertakes to deposit the balance amount, if any, intimated by the respondents through registered post Ad as undertaken by them, with 10% interest within one month from the receipt of intimation.
In view of this stand taken by counsel for the parties, the writ petition is disposed of."
It may be mentioned that the SLP filed by the HUDA against the order in Ashwani Puri's case (supra) was dismissed in limine by the Supreme Court on 7.4.1997. None of these decisions have any bearing on the issue of rate of interest payable by the defaulters or those whose plots are resumed due to non-fulfillment of the conditions of allotment. Therefore, the Chief Administrator was clearly in error when he issued the memo dated 12.4.1999. In any case, that memo cannot be made basis for granting relief to the petitioners by ignoring the policy framed by the HUDA and also the fact that charging of interest @18% will be deemed to have been upheld by the Supreme Court in the case of Roochira Ceramics (supra).
19. For the reasons mentioned above, the writ petition is dismissed subject to the direction that in case the petitioners pay the amount due within two months, the plot shall not be re-resumed on the ground of their failure to make payment in terms of the impugned notice.