Regular Second Appeal No. 2934 of 2008 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Regular Second Appeal No. 2934 of 2008 Date of decision : November 16, 2010 Haryana Urban Development Authority and another ....Appellants versus Shishu Pal and others ....Respondents Coram: Hon'ble Mr. Justice L.N. Mittal Present : Mr. Deepak Balyan, Advocate, for the appellants Mr. G.I. Sharma, Advocate, for respondent nos. 1 to 3 None for proforma respondent no. 4 L.N. Mittal, J. (Oral) Defendants no. 2 and 3 i.e. Haryana Urban Development Authority (HUDA) and its Estate Officer are in second appeal. Suit was filed by respondents no. 1 to 3 against proforma respondent no. 4 i.e. State of Haryana and the appellants. It is undisputed that commercial site of SCO No. 6 Sector 15, Panchkula was allotted by defendant no. 3-Estate Officer to the plaintiffs-respondents no. 1 to 3 vide allotment letter dated 20.4.1989 for ` 10,05,000/- lacs pursuant to open auction. The plaintiffs paid 10% of the bid money on the fall of hammer and further 15% of the bid money within 30 days of the allotment as Regular Second Appeal No. 2934 of 2008 -2- required. Balance amount was payable in eight half yearly installments with interest @ 10% per annum i.e. upto 20.4.1993 being the due date of last installment. However, till then plaintiffs did not pay any amount whatsoever towards any installment (except 25% of the bid money). The plaintiffs alleged that they paid ` one lac on 20.4.1994 and ` 6 lacs on 22.5.1995 to defendant no. 3. It is further case of the plaintiffs that defendant no. 3 sent notice dated 2.2.1998 under section 17 of the Haryana Urban Development Authority Act, 1977 (in short, the Act) demanding an amount of ` 18,92,327/- being outstanding amount. The plaintiffs asked for details of the said outstanding amount but there was no response from defendant no. 3. Defendant no. 3 also issued notice dated 14.10.1999 under section 17(4) of the Act demanding ` 22,33,053/- including interest and extension fee of ` 99,280/- as outstanding on 31.12.1999, without providing any details. Thereafter, defendant no. 3 vide order dated 27.3.2000 ordered resumption of the suit property and forfeiture of 10% of the consideration money. Plaintiffs preferred appeal against resumption order dated 27.3.2000 but the Administrator, HUDA vide order dated 6.9.2000 dismissed the said appeal. Revision petition preferred by the plaintiffs was allowed by Commissioner and Secretary to the Government vide order dated 3.12.2001 thereby conditionally setting aside the resumption order subject to deposit of outstanding amount with interest within three months, failing which resumption order shall be enforced. Defendant no. 3 thereafter demanded ` 28,24,700/- but it was reduced to ` 20,65,485/- after adjusting the amount deposited from November, 2000 to January, 2001. The said amount was calculated by the defendants by Regular Second Appeal No. 2934 of 2008 -3- charging compound interest @ 18% per annum although the defendants were entitled to charge only simple interest @ 10% per annum. The plaintiffs deposited entire outstanding amount with simple interest @ 10% per annum, the last deposit being made on 26.3.2002. The plaintiffs accordingly sought declaration that notice dated 20.1.2002 issued by defendant no. 3 demanding ` 20,65,485/- being outstanding amount as on 31.1.2002 and order of the Commissioner and Secretary conveyed to plaintiffs vide No. 15304 dated 12.12.2001 stipulating that if outstanding amount as per HUDA policy is not deposited within 3 months, resumption order would prevail, are arbitrary, null and void, against the Act and Rules and principles of natural justice. The plaintiffs also claimed permanent injunction restraining the defendants from resuming the plot in question. Factual position was broadly not controverted by the defendants. However, defendants alleged that the plaintiffs did not pay the balance 75% of the bid money with interest on due dates in half yearly installments. Notice dated 16.10.1991 under section 17(1) of the Act, notice dated 15.9.1992 under section 17(2) of the Act, notice dated 22.10.1992 under section 17(3) of the Act and notices dated 11.2.1993, 17.1.1996, 24.1.1996, 26.7.1999 and 14.10.1999 under section 17(4) of the Act were issued to the plaintiffs, but even after repeated opportunities, the plaintiffs failed to deposit the outstanding amount and consequently, the plot was rightly resumed. Plaintiffs also did not pay the outstanding amount with interest as per policy of the HUDA even pursuant to order dated 3.12.2001 of Commissioner and Secretary and therefore, resumption Regular Second Appeal No. 2934 of 2008 -4- order remains effective. Bar of jurisdiction of civil court was also pleaded. Various other pleas were also raised. Learned Civil Judge (Senior Division), Panchkula vide judgment and decree dated 29.7.2006 dismissed the suit of the plaintiffs. However, first appeal preferred by the plaintiffs has been allowed by learned Additional District Judge, Panchkula vide judgment and decree dated 8.11.2006 holding that the defendants are entitled to recover defaulted amount with simple interest @ 10% and the amount already paid by the plaintiffs will be adjusted and the balance outstanding amount if any will be paid by the plaintiffs within one month from the date of receipt of notice. Feeling aggrieved, defendants no. 2 and 3 have preferred the instant second appeal. I have heard learned counsel for the parties and perused the case file. Learned counsel for the appellants vehemently contended that admittedly the plaintiffs did not deposit the installments of outstanding amount with interest on due dates inspite of notice and therefore, resumption order was rightly passed. It was also contended that even pursuant to the order of the Commissioner and Secretary, plaintiffs did not deposit the outstanding amount with interest as per policy of the HUDA. It was further contended that jurisdiction of civil court to challenge resumption order is barred by section 50 of the Act. On the contrary, learned counsel for respondents no. 1 to 3 contended that HUDA cannot charge compound interest @ 18% per annum and can charge simple interest @ 10% per annum as stipulated in the Regular Second Appeal No. 2934 of 2008 -5- allotment letter. Reliance in support of this contention has been placed on judgments in Roochira Ceramics versus Haryana Urban Development Authority and others, 2001(2) PLR 218; Gian Inder Sharma versus Haryana Urban Development Authority and another, 2003(1) PLR 140 and Mohan Dass versus Haryana Urban Development Authority, 2007 (3) Law Herald (Punjab & Haryana) 1886. It was also contended that respondents no. 1 to 3 have since deposited the outstanding amount with simple interest @ 10% per annum pursuant to order of the Commissioner and Secretary and therefore, the resumption order cannot survive. It was contended that demand of compound interest @ 18% per annum by the defendants is illegal. It was consequently contended that jurisdiction of civil court is not barred because demand by defendants is illegal. I have carefully considered the rival contentions. Learned lower appellate court confined itself to rate of interest that could be charged by the defendants from the plaintiffs. However, learned lower appellate court failed to appreciate that the plaintiffs committed consistent defaults and therefore, the resumption order was passed. If the plaintiffs wanted to take benefit of the conditional order of Commissioner and Secretary, they had to take the said order as a whole and they could not split it for their benefit. The plaintiffs could not take benefit of conditional order of the Commissioner and Secretary regarding setting aside the resumption order because the resumption order was set aside conditionally on payment of outstanding amount with interest as per HUDA policy. Consequently, the plaintiffs by merely depositing the amount with simple interest @ 10% per annum cannot be said to have complied with the order of the Commissioner Regular Second Appeal No. 2934 of 2008 -6- and Secretary. Even if the demand of the defendants regarding compound interest @ 18% is assumed to be illegal for the sake of arguments, even then the resumption order could not be challenged in civil court. Jurisdiction of civil court to challenge the same is barred by section 50 of the Act. Even otherwise the resumption order cannot be said to be illegal because the plaintiffs after paying 25% of the bid money did not care to pay even a single penny till due date of last installment inspite of notices sent in the meanwhile by the defendants to the plaintiffs. Notice was sent under section 17(1) of the Act requiring plaintiffs to show cause why penalty should not be imposed for making default in payment of the installments. Thereafter opportunity of hearing was given to the plaintiffs by serving notice under section 17(2) of the Act and order was passed directing the plaintiffs to pay the penalty under section 17(2) of the Act. The plaintiffs failed to pay the same. Thereafter, notice under section 17(3) of the Act was issued requiring plaintiffs to show cause as to why resumption order should not be passed. Thereafter, notices under section 17(4) of the Act were issued to the plaintiffs and ultimately resumption order under section 17(4) of the Act was passed. Thus, all the statutory provisions of the Act were complied with and principles of nature justice were also not violated. Consequently, civil court cannot assume jurisdiction merely on the ground that there was illegal demand of interest by the defendants. Civil court could assume jurisdiction if there had been violation of statutory provisions or principles of natural justice. In the instant case, all the statutory provisions were complied with and resumption order was passed thereafter. Principles of natural justice were also complied with. Consequently, Regular Second Appeal No. 2934 of 2008 -7- jurisdiction of civil court stands barred. Moreover, resumption order was passed on account of persistent default of plaintiffs who failed to pay any amount of installments till due date of the last installment and they failed to pay amount inspite of notices by the defendants. In view of the aforesaid, following substantial questions of law arises for determination in the instant second appeal:- “1. Whether finding of the courts below that the jurisdiction of the civil court is not barred is perverse and illegal and therefore, unsustainable ? 2. Whether finding of the lower appellate court that resumption order is illegal is sustainable in law ?” In view of the reasons recorded hereinbefore, both the substantial questions of law are answered in favour of the appellants. Jurisdiction of civil court is expressly barred by section 50 of the Act. Resumption order is also fully justified and cannot be said to be illegal. As a necessary upshot of the aforesaid discussion, the instant second appeal is allowed and judgment and decree of the lower appellate court are set aside and suit filed by the plaintiffs/respondent nos. 1 to 3 stands dismissed. ( L.N. Mittal ) November 16, 2010 Judge 'dalbir'