C.W.P. No. 19482 of 2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No. 19482 of 2010 Date of Decision : May 30, 2011 M/s Puri Engineering Works .... PETITIONER Vs. State of Punjab and others ..... RESPONDENTS CORAM : HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH * * * Present : Mr. D.S.Patwalia, Advocate, for the petitioner. Ms. Sudeepti Sharma, DAG, Punjab, for respondents No. 1 and 2. Mr. R.K.Goel, Advocate, for Mr. A.R.Takkar, Advocate, for respondents No. 3 to 5. * * * AUGUSTINE GEORGE MASIH, J. (ORAL) The petitioner applied for and was allotted a Plot No. C-114 measuring 4167 Sq. Yards at Industrial Focal Point, Ludhiana on 24.10.1975. He deposited 20% of the amount of the plot on 07.02.1976. The plot was cancelled by the respondents-Punjab Small Industries and Export Corporation Ltd. (hereinafter referred to as 'the Corporation') on 07.01.1978. No reasons were assigned for the cancellation of the said plot. However, the petitioner was issued a letter dated 21.11.1978 by the respondent-Corporation that he would be allotted an alternative plot as the C.W.P. No. 19482 of 2010 2 earlier plot stood cancelled as the same has been allotted to some other person. Vide letter of allotment dated 08.10.1980, Plot No. C-174, Industrial Focal Point, Ludhiana was allotted to the petitioner which measured 3500 Sq. Yards i.e. about 650 Sq. Yards lesser than the initially allotted plot. The petitioner made a request for allotment of an adjacent plot i.e. C-175, which request of the petitioner was acceded to and the allotment letter was issued on 04.05.1981. The possession of Plots No. C-174 and C-175 was handed over to the petitioner on 14.08.1981. The petitioner made the full and final payment of both the plots on 18.05.1982. Thereafter, lease money was also paid by the petitioner on 24.05.1982. An order dated 12.05.1983 was received by the petitioner, wherein penal interest amounting to ` 21,000/- qua delayed payment of Plot No. C-114, which was initially allotted to the petitioner, was made and ` 15,000/- for the delayed payment on Plot No. C-174 was also made. A show cause notice dated 23.12.1985 (Annexure P-17) was issued to the petitioner and the petitioner replied to the said show cause notice vide letter dated 15.01.1986, wherein he denied any liability to pay the penal interest. The first ground urged was that since Plot No. C-114 although was allotted yet no possession was handed over and the same was cancelled because of non-availability, the petitioner could not be made liable to pay penal interest. Qua penal interest on Plot No. C-174, the same was also not chargeable from him. Thereafter, allotment of Plots No. C- 174 and C-175 was cancelled vide letter dated 16.02.1989. The petitioner challenged the said order in CWP No. 7284 of 1993 where an interim direction was granted in favour of the petitioner vide order dated 11.06.1993 that the said plot be not allotted to any other person during the pendency of the writ petition. The case was admitted and finally taken up C.W.P. No. 19482 of 2010 3 for disposal on 07.12.2009 when a statement was made by the counsel for the respondents that for resolution of the dispute amicably, the Corporation had come forward to minimize the litigation and the case of the petitioner would be considered by the Board of Directors sympathetically. The Court, on the basis of the statement made by the counsel for the respondents, expressed its opinion that the petitioner may file an undertaking before the Board of Directors that he would complete the construction and commence production within one year from the date of decision of the Board of Directors. In case, such an undertaking is filed by the petitioner, the same would be considered by the Board of Directors sympathetically. Liberty was also granted to the petitioner to challenge the decision of the Board of Directors in accordance with the provisions of the law. This order attained finality. Since no decision was taken by the Board of Directors, the petitioner approached this Court by filing COCP No. 1574 of 2010 and thereafter, a decision dated 24.09.2010 was conveyed to the petitioner by the Estate Officer, which has been appended as Annexure P-27 with the writ petition and assailed by the petitioner. In the said decision dated 20.09.2010, the Board of Directors had considered the claim of the petitioner and offered him allotment of the plots on the current reserved price on the date when the decision was taken by the Board of Directors i.e. ` 3500/- per sq. yard+10% extra for the corner site. After the adjustment of the amount already paid by the petitioner, the remaining amount was worked out at ` 2,67,67,666/-. Whereas, dues towards the price of the plot calculated as per initial terms of allotment along with interest, penal interest and other incidental charges as per the Policy of the Corporation, were worked out at ` 86,14,515/- as on 01.11.2010. As the C.W.P. No. 19482 of 2010 4 earlier option was on the higher side and, therefore, as per the Policy, the same was accepted and adopted by the Board of the Corporation to be the allotment price of the plot of the petitioner on the issuance of the date of the restoration letter. Counsel for the petitioner contends that the petitioner cannot be held liable for the payment of the current reserved price of the plot. At the most, the respondents can claim penal interest from the petitioner which, if worked out, would come to ` 86,14,515/- at the maximum. Therefore, the petitioner is not liable to pay an amount of ` 2,67,67,666/-, which has been worked out at the current reserved price on the date of the resolution of the Board i.e. 20.09.2010. In any case, he submits that the petitioner cannot be held responsible and penalized for the delay in taking decision by the Board of Directors in compliance with the order passed by this Court dated 07.12.2009. The reserved price, as on the date of decision of the writ petition i.e. 07.12.2009, could, at most, be claimed from the petitioner. He, accordingly, prays for quashing the decision dated 24.09.2010 (Annexure P-27). On the other hand, counsel for the respondents submits that the plots of the petitioner were not cancelled merely on the basis of non- payment of penal interest on the amount of sale price within time but was cancelled because of non-compliance of the terms of allotment, which included the construction of the unit and starting of the production within the specified time. He, therefore, contends that the penal interest cannot be taken into consideration for re-allotment of the plot to the petitioner. The Board of Directors, in its meeting held on 20.09.2010, took a decision for re-allotment of the plot to the petitioner and, therefore, the current reserved price on the said date has been taken to be the basic price for C.W.P. No. 19482 of 2010 5 allotment to the petitioner along with 10% extra for the plot being a corner one, which is as per the Policy. He, accordingly, supports the order dated 24.09.2010. I have heard the counsel for the parties and with their able assistance, have gone through the records of the case. The facts are not in dispute, as have been stated above. The only question, which requires to be determined at this stage, is whether the petitioner would be entitled to the allotment on restoration of the plot on the basis of penal interest as has been calculated along with other incidental charges which comes to ` 86,14,515/- or at the current reserved price on the date of the meeting of the Board of Directors. The contention of the counsel for the petitioner that the penal interest and other incidental charges have to be taken into consideration for re-allotment of the plot to the petitioner, cannot be accepted for the reason that the cancellation of the plots was not merely on the basis of non- payment of the sale amount by the petitioner in time and non deposit of penal interest but was also because of non-construction of the unit and putting it to the production, as per the allotment letter. However, the question, which requires to be now considered, is what should be the current reserved price, on which the allotment of the plot to the petitioner has to be made. If the date of the meeting, on which the Board of Directors met i.e. 20.09.2010 is taken to be the date, the current reserved price would be ` 3500/- per Sq. Yards+10% extra for the corner site but in the light of the fact that this Court vide order dated 07.12.2009 had given liberty to the Board of Directors of the Corporation to decide the issue sympathetically. The said decision was accepted to be taken within a reasonable time. Delay in holding the meeting by the Board C.W.P. No. 19482 of 2010 6 of Directors cannot be a reason for penalizing the petitioner for no fault of it. The reasonable time, within which the Board of Directors should have met and taken a decision, would be three months or so from the date of passing of the order by this Court in CWP No. 7284 of 1993. As a matter of fact, the Board of Directors did meet on 29.03.2010 and 06.05.2010 but no decision was taken by the Board. Accordingly, keeping in view the equity and to balance the interest of the parties, it would be just and appropriate that the current reserved price per square yard, as it existed on 29.03.2010, be taken as the base allotment price and thereafter, the amount due, which the petitioner is to make payment of, be calculated and conveyed to the petitioner within a period of two weeks' from today. As per the interim order passed by this Court on 29.10.2010, counsel for the petitioner states that an amount of ` 1 Crore has already been paid by the petitioner to the respondent-Corporation, which fact is not disputed by the counsel for the Corporation. The said amount be also adjusted by the Corporation in the final amount, which has to be conveyed to the petitioner, within the time stipulated above. The petitioner would make the remaining payment within a period of further four weeks' from the date, the amount due is conveyed to the petitioner. Counsel for the petitioner undertakes that the condition with regard to the completion of construction and commencing production in the unit as per the mandate of the allotment letter shall be completed and complied within a period of one year from the date of re-allotment of the plot and the handing over the possession thereof to the petitioner. The undertaking is accepted. However, it is made clear that in case, the undertaking given by the counsel for the petitioner is not complied with or violated, the C.W.P. No. 19482 of 2010 7 allotment of the plots to the petitioner, as per the above order passed by this Court, shall automatically stands cancelled. The petitioner shall not sell or create any third party rights till the completion of construction and commencement of production. The petition stands disposed of accordingly. (AUGUSTINE GEORGE MASIH ) May 30, 2011 JUDGE pj