IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.7887 of 2005 Between: 1 M.Narayana Rao, S/o.Sampath Rao, R/o.Thanedarpalli Village, Hamlet of Indurthi, Marriguda Mandal, presently staying at Nalgonda at Vidyanagar, Nalgonda. 2 S.Jeeva Latha, W/o.P.Radhupati Rao, R/o.H.No.5-6-101 Bathuguda, Nalgonda. 3 Mrs. E.Narendramma, W/o.G.Kamalakar Rao, R/o.G.K.Triveni STD Booth And Xerox Center DVK Road, Nalgonda. 4 Jalagam Sudhakar Rao, S/o.Madhava Rao, R/o.DVK Road, Nalgonda. 5 Jalagam Jyothi, W/o.Sudhakar Rao, DVR Road, Nalgonda. 6 V.Vijayalakshmi, W/o.Chandra Sekahar Rao, 78-1-153, RTC Colony, Nalgonda. 7 G.Premalatha, W/o.Ravi Kumar, R/o.Gadi U.P.School, Regathi Village, Mandal kamgal, Nalgonda District. 8 Jalagam Sudharashan Rao, S/o.Madhava Rao, R/o.Koppolu village, Gurrampode Mandal, Nalgonda District. 9 Munagala Ramachandra Rao, S/o.Sampath Rao, 106 B, Santhosh Nagar Colony, Saidabad Hyderabad. ..... PETITIONERS AND 1 The Vice Chairman, Housing Commissioner, A.P.Housing Board, Gruhalkalpa, MJ Road, Hyderabad. 2 Executive Engineer (HG) AP Housing Board 8-348/A/5, Mettuguda, Mahabubnagar. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court may be pleased to issue a writ or order more especially one in the nature of writ of Mandamus declaring the action of the respondents in converting the house scheme of 40% as published in the news papers dated 14-1-2002 to a self-ﬁnancing scheme as per the notiﬁcation issued on 4-2-2005 as illegal, arbitrary, capricious, violative of principles of natural justice and consequentially direct the respondents not to proceed to enter into any agreements with prospective purchasers pursuant to the notiﬁcation dated 4-2-2005 and pass such other order or orders as are deemed fit and proper in the circumstances of the case. Counsel for the Petitioners: MR.RAVI SHANKAR JANDHYALA Counsel for the Respondents: MR.D.RANGANATHA KUMAR The Court made the following: THE HON’BLE SRI JUSTICE V.V.S. RAO WRIT PETITION No.7887 of 2005 ORDER: The petitioners, who are nine in number, applied for allotment of MIG houses, pursuant to a notiﬁcation issued by Andhra Pradesh Housing Board (APHB) for conducting demand survey. At that stage, APHB proposed a housing scheme on hire purchase basis-cum-outright sale basis in the ratio of 40:60. After completion of the survey, the 2nd respondent- Executive Engineer (Housing), APHB, sent communications dated 30.01.2004 requesting for willingness of each of the petitioners to migrate from 40% hire-purchase category to Self Financing Scheme (SFS). Aggrieved by such communications, they ﬁled the present writ petition seeking declaration and a consequential direction to the respondents not to proceed to enter into agreement with prospective purchasers. A counter-aﬃdavit is ﬁled inter alia stating that though demand survey was conducted for taking up housing scheme on hire purchase basis and outright sale basis in the ratio of 40:60, subsequently, a policy decision was taken to take up housing schemes under SFC and, therefore, the willingness was asked for. It is further stated that out of 54 applicants for HIG houses, 10 applicants gave their willingness for conversion to SFS, out of 172 applicants for MIG II houses, 16 gave their willingness and accordingly houses were constructed for them. For those who did not give their willingness for conversion to SFS, an amount of Rs.10,000/- paid as application money was refunded. Along with the counter-aﬃdavit, the resolution of APHB dated 28.01.2004 is enclosed. APHB resolved that henceforth all housing schemes will be Self Financing Schemes against 100% payment rater than hire-purchase scheme, in view of low recovery in the later and availability of aﬀordable bank ﬁnance on the other. This resolution is in tune with Section 45 of Andhra Pradesh Housing Board Act, 1956. Therefore, the action of the 2nd respondent in issuing impugned letters asking the petitioners to express their willingness for conversion to SFS cannot be faulted. Regulation 7(i)(iv) of Andhra Pradesh Housing Board (Allotment, Management and Sale of HIG, MIG, LIG, and EWS Houses or Flats) Regulations, 1997 (the Regulations, for brevity) reads as under. In case the Housing Board could not conduct lots within three months from the last date of receipt of applications, it shall pay simple interest ﬁxed by the scheduled banks for Savings Account from time to time, till the allotment of house or withdrawal or cancellation of scheme. Placing reliance on the above Regulation, the learned Standing Counsel submits that APHB is liable to refund the application money of Rs.10,000/- each with interest ﬁxed by scheduled banks for Savings Bank Account. A perusal of Regulation 7(i)(iv) of the Regulations would show that the same is attracted only when the Housing Board cannot conduct lots within three months from the date of receipt of applications. It has no application where the Housing Board is not able to construct houses under hire-purchase scheme having invited applications in a demand survey. Regulation 7(i)(iv) of the Regulations is a check on the power of the Housing Board to construct houses. It calls an obligation on the Housing Board to complete the process of allotment by lots within three months and any delay on their part would attract Regulation 7(i)(iv) of the Regulations, enabling the applicants to claim simple interest payable on Savings Bank Account. When a demand survey is conducted, applications have been called for and Housing Board fails to complete the Scheme in the considerable time, payment of interest at a low rate payable on Savings Bank Accounts is adding insult to injury. There is no denial that on the defaulted installments, Housing Board is charging interest at 1½ times on the bank rate of interest. If that be so, the rate of simple interest at 12% per annum would be reasonable. Therefore, the Housing Board shall refund the application money of the petitioners with simple interest at 12% per annum. With the above observations, the writ petition is disposed of. No order as to costs. ____________ (V.V.S.RAO,J) 25th September, 2008 IBL