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PETITIONER: SECTOR-6, BAHADURGARH PLOTHOLDERS ASSOCIATION (REGD.) & ORS.

       Vs.

RESPONDENT:

DATE OF JUDGMENT06/12/1995

BENCH: HANSARIA B.L. (J) BENCH: HANSARIA B.L. (J) RAMASWAMY, K. MAJMUDAR S.B. (J)

CITATION:  1996 SCC  (1) 485        JT 1995 (9)   167  1995 SCALE  (6)765

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T HANSARIA, J.      Bahadurgarh was  declared as  an urban  estate  by  the State Government  of Haryana in exercise of powers conferred by section  3 of  the Punjab  Urban Estates  (Development  & Regulation) Act,  1964 (hereinafter  ’the Punjab  Act’). The declaration of  any area  to be  ’urban estate’, permits the State  Government,   inter  alia,   to  sell  the  sites  in accordance with  the Punjab  Urban Estates  (Sales of Sites) Rules, 1965  (for short  ’the Punjab  Rules’). An  offer was accordingly made  for free  hold sale of about 2200 plots on first come  first serve  basis in Sector No.6 of the estate. Applicants were  informed that  "all modern  amenities  like underground  sewerage,   storm   water,   drainage,   roads, electricity, supply of potable water etc. will be provided". Pursuant to  this invitation,  a number  of persons  some of whom are  the members  of appellant-Association, applied for allotment. Appellant  No.2, Jeet  Ram, is one such applicant and by  memo of  even  number  dated  9.8.1972,  the  Estate Officer, Faridabad  informed Jeet Ram about the allotment of residential Plot  No.852 to  him  on  terms  and  conditions mentioned in  the memo.  (Similiar is the position qua other allottees). We  are concerned  with condition  Nos.4  and  5 which read as below :      "4.  In case, you accept this allotment,      you should  send the enclosed acceptance      in the  form given at Annexure A to this      letter together  with a  Bank draft  for      Rs.750/- in order to make 29 per cent of      the price  of the  above mentioned  plot      within 30 days from the date of issue of      this  also  tement  order,  the  payment      shall be made by a Bank draft payable to      the Estate Officer, Faridabad, and drawn

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    on the  State Bank  of India, Faridabad.      In case  of failure  to deposit the said      amount  within   the  above   sepecified      period, the allotment shall be cancelled      and the  deposit of  10 per cent Earnest      money paid with the application shall be      forfeited against which you will have no      claim.      5.   The  balance   of   80   per   cent      tentative  price  can  be  paid  lumpsum      without interest  within  60  days  from      date of  issue of  this allotment letter      or in  the  annual  equated  instalments      with 7 per cent interest as laid down in      Rule No.12  framed under  section  23(2)      (b) (3)  (3) of the Punjab Urban Estates      (Development and  Regulation) Act, 1964.      The  first  instalment  shall  fall  due      after the  expiry of  one year  from the      date of issue of this allotment order". 2.   As per  condition No.5  aforesaid, the first instalment became due  on 9.8.1973,  that is,  after expiry of one year from the  date of  issue of  the  allotment  order.  On  the instalment not having been paid, respondent No.2, the Estate Officer, sent  notices to  the  members  of  the  appellant- Association to  pay the instalments including 7% interest on the total  price of  the plot. Failing which, it was stated, that action  under section  10 of  the Punjab  Act would  be taken  which   visualises  resumption  and  forfeiture.  The members of  the Association acted as required by the notices but without  actually taking possession of the plots. It was so because the plots had not been developed as visualised by the    advertisement     seeking    applications.    Various representations were  made  to  respondent  No.2  for  early development and  for delivering the possession of the plots. It was  also represented that the members of the Association were being  charged  interest  without  actual  delivery  of possession of  the plots  which according to the members was not permissible. 3.   Despite the  aforesaid representations,  as  the  plots were not developed, appellant No.2 approached the High Court of Punjab  & Haryana  by  invoking  its  jurisdiction  under Article 226  of the Constitution. The High Court has held in the impugned  order that interest was chargeable. As regards possession, the following observation was made in para 4 :      "4.  As regards  possession, it  may  be      noticed   that    the   stand   of   the      respondents  was   that  development  is      still taking  place and  as soon  as the      development is  completed, possession of      the plot  would be offered to petitioner      No.1. It  was further  stated at the bar      that   in   case   the   petitioner   is      interested in  taking possession  of the      undeveloped  plot,  they  are  prepared.      Counsel  for   the  petitioner  was  not      prepared to accept this offer." Feeling aggrieved  at the  view taken by the High Court this appeal has been preferred under Article 136. 4.   Shri  Bhandare,   learned  senior   counsel   for   the appellants, has  strenuously contended that what was offered for allotment  was developed plots and not undeveloped ones. The follow  up submission is that as the plots are yet to be developed fully,  the respondents  could  not  have  charged interest because  possession of developed plots is yet to be

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given. The  stand of  the respondents  on the  other hand is that charging  of interest is not co-related to the delivery of possession,  as  is  in  case  of  allotments  under  the provisions of  Haryana Urban Development Authority Act, 1977 in view  of what  has been  mentioned in  Rule 5(7)  of  the Haryana Urban  Development Authority  (Disposal of  Land and Buildings)   Regulations,    1978,   (brevi   mani   Haryana Regulations) provision  in which would not apply to the case at hand in as much as the same is not the requirement of the Punjab Rules.  Ms. Nisha,  appearing  for  the  respondents, submitted that  as per  Rule  12(2)  of  the  Punjab  Rules, interest accrues from the date of the issue of the allotment order as has been mentioned in the aforesaid condition No.5. 5.   The allotment  in the  present  case  being  under  the Punjab Rules,  we are  satisfied that  the provisions of the Haryana Regulations  cannot be  called  in  aid  and  it  is because of  this that  terms and conditions mentioned in the allotment order  of other  persons, an  instance of which is the allotment  to  one  Surat  Singh  by  memo  No.23  dated 28.2.1979, can  be of  no assistance to the appellants. Shri Bhandare’s alternative  submission is  that in  any case  as possession of  developed  plots  has  yet  not  been  given, interest  cannot   be  demanded,  even  as  per  the  scheme visualised by the Punjab Rules. A perusal of the Rules shows that after  applications are made for allotment and the same are accepted,  possession of  the site  is  required  to  be delivered to  the transferee,  as mentioned in Rule 7, after he has paid 25% of the price. Another provision of the Rules which is  required to  be noted  is that  the transferee  is required to  complete the  building within  three years from the date  of issue of allotment order as per Rule 14, though this time limit may be extended by the Estate Officer, if he is satisfied  that the  failure  to  complete  the  building within the  period of  three years  was due to causes beyond the control of the transferee. 6.   We are  thus satisfied  that if the Rules are read as a whole, possession  of the  allotted plot  is required  to be given within  reasonable time  after payment  of 25%  of the price. Rule  14 itself would indicate that possession has to be delivered  soon after  the allotment  order to enable the transferee to  complete the building within three years from the date  of issue of allotment order. The submission of Ms. Nisha is  that Rule  14 having  visualised extension  of the time  limit,   this  Rule  would  not  require  delivery  of possession soon  after the  payment of the 25% of the price. According to  us, this submission cannot be accepted because the power of extension given to the Estate Officer is really meant to  be exercised when the transferee, after receipt of possession of the land, is not in a position to complete the building.  We,  therefore,  hold  that  interest  cannot  be demanded till  offer of  possession is  made.  There  is  no dispute that appellant No.2 had paid the required amount. It is also  not in  dispute that the possession of the plot was not delivered within reasonable time thereafter. 7.   Shri Bhandare  has taken  pains to  persuade us to hold that it  is incumbent  on the  part of the Estate Officer to deliver possession  of developed  plots and  as even by 1985 such plots  had not  been offered  for  delivery,  as  would appear from  the  order  passed  by  this  Court  itself  on 14.1.1985,  there  can  be  no  justification  in  demanding payment of  interest.  As  per  the  learned  counsel,  full development  is  yet  to  take  place  in  as  much  as  the statements made  by the respondents in their application for vacation of stay, which was registered as I.A. No.2 of 1992, were as below :

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    "1. that  the Sector-6,  Bahadurgarh  is      almost fully developed.      2) That  150 houses  are constructed for      which the  completion certificates  have      been issued.      3) That  near about 250 houses are under      construction.      4) That water supply work is completed.      5) That road works in the sector is also      completed.      6)  That   the  internal  sewerage  line      S.W.D. (Storm  Water drainage) have been      laid down  and  temporary  disposal  has      been completed."      Ms. Nisha,  however, states  that this  position was in 1992; by  now, she  has instruction  to stay that plots have been fully developed. 8.   To decide  the aforesaid submission of Shri Bhandare we would really be required to find out as to whether the offer was of  developed plots  or undeveloped  plots. As the offer had stated  that  modern  amenities  noted  above  "will  be provided", it  cannot be  held that  till the  amenities  as mentioned  have   become  fully  functional,  the  offer  is incomplete. It  is for  this reason  that the fact that full development has  not yet  taken place,  even if  that be the position as  contended by  Shri Bhandare, cannot be a ground to hold  that interest  has not  become payable.  It is true that the  applicants  were  given  to  understand  that  the amenities noted  above would  become available  (and  within reasonable time),  the fact  that the  same did  not  become available to the desired extent could not be a ground not to accept delivery  of possession.  From the  order of the High Court which  we have quoted above, we find that the offer of possession of  the undeveloped  plot was not accepted by the counsel of  the appellant. That order being of 17th October, 1980, we  are of  the view  that interest did become payable from that  date. The  fact that  plot has not yet been fully developed, as  is the case of the appellant, has, therefore, no significance  in  so  far  as  charging  of  interest  is concerned. We are not in a position to accept the submission of Shri  Bhandare that  equity would  not demand charging of interest,  even  though  the  plots  are  yet  to  be  fully developed. When  parties enter  into contract,  they are  to abide by  the terms  and conditions  of the same, unless the same be inequitable. In the present case, question of equity does not  really arise  in as much as the condition relating to interest  is founded  on a statutory rule, vires of which has not  been challenged.  The provision  in a  cognate rule cannot alter  the consequence  which has  to follow from the rule which holds the field. In the present case it being the Punjab Rules  under which the allotment was made, we are not in a  position to  agree with  Shri  Bhandare,  despite  his forceful submission, that the appellants may not be asked to pay interest, despite their having been no offer of delivery of possession of fully developed plots. 9.   We, therefore,  hold that  the interest  in the present and similar cases had become due from 17th October, 1980. We understand from  Shri Bhandare  that most  of the members of the appellant-Association  had  paid  the  instalments  with interest as per the notice of the respondent No.2. According to us,  as interest  became chargeable  from  17th  October, 1980, it  would be open to the members of the Association to claim refund  if they  had paid  interest, as claimed in the notices issued by the respondent No.2. 10.  We do  not propose  to leave  the matter  at this.  The

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allotments having been made about two decades ago, there can be no  justification in  not fully developing the plots even by 1992.  The statement in I.A. No.2 of 1992 that the sector is "almost fully developed" and that "temporary disposal has been completed"  do speak  about lack of proper interest and attention on the part of the respondents. In this connection we would  state that  a statement had been made on behalf of the  respondents   before  this   Court  on  14.1.1985  that possession of  the developed  plots would  be given  to  the appellants within  a period  of six  months, and  so such  a direction was  given. Shri Bhandare states that direction is yet to  be complied  with in  letter and  spirit. It is this complaint which has given rise to Contempt Petition No.22 of 1989. On  the facts and circumstances of the case, we do not propose to  pursue the contempt application and would direct the respondents  once again to develop the sector fully, and not, "almost  fully". This  would be done within a period of six months,  failing which the respondents would not only be liable for  contempt but  the allottees  would be exonerated from the liability to pay any interest whatsoever. 11.  The appeal  is disposed  of  accordingly,  without  any order as to costs.