IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.20514 of 2008 Date of decision: 5th November, 2009 United Cooperative Housing Building Society Ltd. … Petitioner Versus State of Punjab and others … Respondents CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. Puneet Bali, Advocate for the petitioner. Mr. Anil Kumar Sharma, Additional Advocate General, Punjab for the State. Mr. Balwinder Singh, Advocate for respondents No.2 to 4. KANWALJIT SINGH AHLUWALIA, J. (ORAL) United Cooperative Housing Building Society Ltd., Sector 68, S.A.S. Nagar (Mohali) through its President, has filed present writ petition. In the present writ petition, petitioner seeks quashing of impugned letter (Annexure P-16) dated 22nd June, 2007, whereby building plans were returned by the Sub Divisional Officer (Buildings), GMADA, Mohali on the ground that the plot has been already resumed. Petitioner society also seeks quashing of order (Annexure P-9) dated 29th April, 2003; order (Annexure P-10) dated 9th March, 2004; order (Annexure P-11) dated 16th December, 2004; order (Annexure P-13) dated 25th January, 2005 and order (Annexure P-15) dated 17th April, 2007. For adverting to the facts of the case, it will be necessary to notice details of impugned orders, quashing of which has been sought by the petitioner. Vide impugned order (Annexure P-9), allotment of the site to the petitioner Society was cancelled, as they failed to adhere to the schedule of payment of installments. A perusal of order (Annexure P-9) Civil Writ Petition No. 20514 of 2008 reveals that site measuring 9.20 acres was allotted to the petitioner Society at the rate of Rs.1690/- per square yard. On 29th April, 2000, Rs.3,43,27,789/- were outstanding and were to be recovered from the Society. Various opportunities were given to the office bearers of the Society. They failed to pay the amount and hence, order of resumption was passed. Order of resumption was challenged in appeal before Additional Chief Administrator, Punjab Urban Planning & Development Authority. The appeal filed by the petitioner was dismissed on 9th March, 2004. When the appeal was dismissed, at that time amount of Rs.4,93,75,586/- was outstanding. The appellate authority inferred that there is a shortage of funds with the Society, therefore, by their conduct they will not be in position to comply with the schedule of payments of installments. The order of resumption (Annexure P-9) and order passed by the appellate Authority (Annexure P-10) were challenged in revision. The revisional authority took into consideration various pleas raised by the Society and made following observations: “Since there is now no dispute regarding the actual area allotted, I give an explicit finding of fact that the allotted area to the Society shall be reckoned as 8.77 Acres, for all purposes and that all calculations shall be re-worked out keeping in view this figure.” XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX “I have pondered over this matter deeply. While, as concluded before, there appears to be prima facie merit in the claim of the petitioner-society, yet it would not be appropriate for this revisional forum to go into the exact and micro- determination of the proportion in which the accumulated penal interest should be waived of on account of the admittedly deficient services of PUDA. Notwithstanding the arguments advanced by the representative of PUDA, I am of the considered opinion that it would be appropriate for an independent arbitrator to go into this issue. The disputes or the differences between the petitioner society and PUDA, as 2 Civil Writ Petition No. 20514 of 2008 indeed argued by the representative of PUDA, clearly go beyond all the terms and conditions of the allotment letter of PUDA. As such paragraph 22 of the allotment letter is, strictly speaking, not applicable. This is particularly so since PUDA was expected to allot a fully developed site, whereas in the instant case, it is admittedly one which had at least some deficiencies and encumbrances. I thus find that it may be neither fair nor just to refer this issue to the Chief Administrator, PUDA, even after adopting a liberal interpretation of the provisions of paragraph 22 of the allotment letter, since the said officer is Chief Executive Officer of PUDA, which is very much an interested party. Moreover, no prejudice would be caused to PUDA by referring this issue/dispute to an independent Arbitrator of repute. This being the case, I deem it fair, just and reasonable to consign the matter regarding the waiver/rebate in respect of the accumulated penal interest claimed by PUDA to an independent Arbitrator, subject, of course, to the explicit findings/decisions given in this order. Shri Rajan Kashyap, IAS, Chief Secretary, Punjab (Retd.) has had a rich experience in the Department of Cooperation and has agreed to take up this matter as an Arbitrator. As far as possible, the arbitration proceedings shall be completed within a period of two months, after hearing both the parties. The fee of the Arbitrator is hereby fixed at 1% of the penal interest claimed by PUDA and shall be payable by PUDA and the petitioner Society in 1 : 1 ratio, in advance.” Thereafter, revisional authority has given various directions. One of the directions given was that the petitioner Society shall pay the amount as per the calculations made by PUDA’s statutory authority (Chartered Accountants) within 60 days. However, liberty was granted to the petitioner to seek extension of time. Mr. Balwinder Singh, appearing for respondents No.2 to 4, has stated that it will be apposite if following portion of the order passed by the revisional authority is also noticed. There is merit in the contention of 3 Civil Writ Petition No. 20514 of 2008 Mr.Balwinder Singh, therefore, portion referred by him is also reproduced as under: “In case, the petitioner-Society deposits the re-worked out principal amount and the basic interest, within the stipulated period of 60 days, as directed hereinbefore, the impugned order dated 09.03.2004 and the basic order 29.04.2003, passed by the Estate Officer, PUDA, Mohali shall be deemed to have been set aside and the site shall stand restored to the petitioner-Society. If, however, the said payment is not made within the stipulated time, the impugned order shall remain in force and the official respondents shall proceed to take over possession of the site, along with the superstructure, in due process of law, after forfeiting the maximum amount admissible under the law. Needless to say, if these amounts are paid in time, but the Society subsequently defaults in the payment of the penal interest, if any, determined by the Arbitrator, PUDA shall be at liberty to initiate fresh proceedings warranted under the law.” Thereafter, on 25th January, 2005, revisional authority passed another order (Annexure P-13). The revisional authority held that as per PUDA, there is no dispute regarding the interest amounting to Rs.3,05,85,879/- upto 31st January, 2005 and same is to be paid by the Society. Revisional authority also held that the petitioner Society is under obligation to deposit an amount of Rs.3,35,51,119/- within 60 days. It was further clarified that after the amount of Rs.3,35,51,119/- is paid by the Society within 60 days, then only the matter will be referred to the Arbitrator. Lastly, revisional authority passed order on 17th April, 2007, where it noticed the contention of Law Officer of PUDA that the petitioner Society had not paid the amount of Rs.3,35,51,119/- within the specified time of 60 days. Therefore, the revisional authority concluded that petitioner Society is adopting delay tactics to evade the payments to GMADA. Therefore, prayer for extension of time was rejected. 4 Civil Writ Petition No. 20514 of 2008 Mr. Puneet Bali, appearing for the petitioner, has referred to application for extension of time (Annexure P-14) and has submitted that it was specifically stated before the revisional authority that Dalbir Singh, Assistant Registrar, Cooperative Societies was appointed as Administrator of the Society, therefore, he deposited Rs.1.00 crore on 19th April, 2005; another Rs.1.00 crore on 9th August, 2005; Rs.68.00 lakh on 19th May, 2005 and Rs.67.00 lakh on 22nd December, 2005. According to Mr.Bali, the delay has ensued because the Administrator was appointed and payment could not be made within the time specified by the revisional authority. Learned counsel has further submitted that acceptance of part payment will amount to condonation of the delay. This Court is not impressed by the contentions raised by Mr. Puneet Bali on the ground that revisional authority had granted various opportunities to the petitioner Society to make good the deficiency of the amount. Furthermore, the allotment was made in year 2000. Therefore, for a period of nine years, it failed to comply with the schedule of payment of installments. At this stage, during course of arguments, Mr. Balwinder Singh, on instructions from Mr.Sunil Mehta, Sectional Officer, PUDA, has stated that in case petitioner Society is ready and willing to pay 12 percent interest on the delayed payment, the resumed plot shall be restored to the petitioner Society. Mr.Balwinder Singh has further stated that whether 5 percent penal interest is to be paid by the Society or not, let the matter be decided by the Arbitrator appointed by the revisional authority. After hearing counsel for the parties and taking into consideration, especially the statement made by Mr.Balwinder Singh, appearing for PUDA on instructions from Mr.Sunil Mehta, Sectional Officer, PUDA, present writ petition is disposed of by giving following directions: (1) Petitioner Society shall pay 12 per cent interest on the delayed payment; 5 Civil Writ Petition No. 20514 of 2008 (2) Regarding the imposition of 5 per cent penal interest required to be paid by the petitioner Society, the matter shall be decided by the Arbitrator. The entire calculation of the interest shall be placed before the Arbitrator, who will also take into consideration whether the interest calculated is in consonance with the policy of PUDA or not. The decision given by the Arbitrator shall be binding upon the parties, subject to the right of the parties to assail the award; (3) The Arbitrator shall also decide the claim of the petitioner Society that they have already made a payment in excess; (4) The Arbitrator shall be paid his fee and charges as per orders passed by the revisional authority. (5) The Arbitrator is requested to conclude the proceedings within three months after receipt of certified copy of this order. In case proceedings are not concluded within three months, the Arbitrator shall also decide as to which party is responsible for the delay and he will be at liberty to fasten that party with necessary cost. With the observations made above, present writ petition is disposed of. [KANWALJIT SINGH AHLUWALIA] JUDGE November 5, 2009 rps 6