CWP No.1122 of 2003 & other connected matters 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. DATE OF DECISION: 6.12.2010 1.CWP No.1122 of 2003 Raksha Rani ...Petitioner VERSUS HSAMB and others …Respondents 2.CWP No.20153 of 2004 Ramesh Chand ...Petitioner VERSUS HSAMB and others ...Respondents 3.CWP No.16182 of 2009 Ashok Kumar ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 4.CWP No.16787 of 2005 Surinder Kumar ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 5.CWP No.5152 of 2007 CWP No.1122 of 2003 & other connected matters 2 Sarla Devi ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 6.CWP No.5202 of 2007 Shankuntla Devi ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 7.CWP No.1781 of 2008 Kalicharan and others ...Petitioners VERSUS Haryana State Agricultural Marketing Board and others …Respondents 8.CWP No.20142 of 2009 Ashwani Kumar and another ...Petitioners VERSUS Haryana State Agricultural Marketing Board and others …Respondents 9.CWP No.20141 of 2009 Jai Parkash ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 10.CWP No.217 of 2010 CWP No.1122 of 2003 & other connected matters 3 Balwant Rai ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 11.CWP No.18076 of 2009 Pardeep Kumar ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 12.CWP No.18096 of 2009 Tara Rani ...Petitioner VERSUS Haryana State Agricultural Marketing Board and others …Respondents 13.CWP No.18095 OF 2009 Radha Kishan and another ...Petitioners VERSUS State of Haryana and others …Respondents 14.CWP No.14064 of 2010 Sunil Kumar Sareen ...Petitioner VERSUS State of Haryana and others …Respondents CWP No.1122 of 2003 & other connected matters 4 CORAM HON'BLE MR.JUSTICE PERMOD KOHLI PRESENT: Mr.Ravi Kapoor, Advocate, Mr.Naveen Batra, Advocate Mr.Amarjeet Markan, Advocate, Mr.Jagat Singh, Advocate for the petitioner(s) Mr.CB Geol, Advocate Mr.AK Jangra, Advocate, Mr.Amit Sharma, Advocate for respondents Permod Kohli, J. Controversy is common to these petitions. Precisely speaking, the petitioners are challenging the action of the respondents in charging extension fee, interest and penalty from them for granting permission to raise construction over the plots allotted to them in various developed areas in the State of Haryana. In some petitions, claim is made for refund of the interest and penalty already deposited. Petitioners in all these petitions were allotted plots by the respondents for different commercial purposes from time to time. In view of the nature of relief claimed, it is not necessary to advert to facts of each and every case. However, brief factual matrix is noticed from CWP No.1122 of 2003. Market Committee, Kalka (hereinafter referred to as “the respondent-Committee”), by a general auction notice invited applications for allotment of plots in the Grain Market to be developed by Haryana State Agricultural Marketing Board, namely, Kalka Mandi. Besides giving the CWP No.1122 of 2003 & other connected matters 5 location of the area, various other facilities to be provided in the New Grain Market were indicated. The relevant extract of the above auction notice is reproduced here under:- “…. This mandi is being developed with the modern way. Proper arrangement in the mandi is being made for pucca platform, Cadda sheds, Park and Rest House, Latrines, Drinking Cooler Water, electricity, sewerage and cattle sheds and for their drinking water. Work of pucca platform and roads have been completed. Facility of bank and post office will also be provided in the mandi…” Allotment was to be made through open auction. The payment was to be made in accordance with the following schedule:- “3.1/4th of the bid amount will have to be deposited at the spot. 4.Remaining auction price in full can be deposited within one month from the date of approval without interest or the same can be deposited in three years in 6 monthly/yearly easy instalments. On the balance amount of the instalments interest at the bank rate would be leviable….” The allottee/purchaser was under obligation to construct the shop within one year, as per the design of the Market Committee. The petitioner applied for allotment of plot and participated in the auction held on 15.2.1983 at Kalka. Bid of the petitioner was accepted and the petitioner was allotted plot nos. 47 and 48 measuring 16’ x 50’ for an CWP No.1122 of 2003 & other connected matters 6 amount of Rs.32000. Earnest money of Rs.8000/- was adjusted towards the price of the plot. The balance amount of Rs.24,000/- being 75% of the sale price was to be deposited either within 30 days of the receipt of the allotment letter, without interest or in three instalments with interest at the rate of 7 ½% in the following order:- No. of instalment Date of insalment Amount of instalment Interest Total Remarks 1st 25.5.83 Rs.8000/- Rs.150/- Rs.8150 2nd 25.11.83 Rs.8000/- Rs.600/- Rs.8600/- 3rd 25.4.84 Rs.8000/- Rs.300 Rs.8300 Apart from the interest leviable on payment by instalments, the allotment letter also contained a covenant for imposition of penalty for delayed payment. Clause 6 relating to imposition of penalty is reproduced here under:- “For 1st default 5% For 2nd default 7 ½% For subsequent defaulter 10%” It is alleged that possession of the allotted plots was not given till 2001. The petitioner claims to have made a request for handing over the possession vide letter dated 17.8.2001 (Annexure P-7). The petitioner was asked to deposit the extension fee before taking possession vide letter dated 6.9.2001 (Annexure P-8) . It was also indicated that the petitioner has failed to construct the shop. The petitioner placed on record some letters whereby request was made for delivery of possession. Executive Officer-cum- Secretary, Market Committee vide its letters dated 15.7.2002 (Annexures P- 14 and P-15) asked the petitioner to deposit extension fee of Rs.1,52,100/- for each plot before extension for construction of the shop is granted. The petitioner, however, requested for waiving off the extension fee vide letter CWP No.1122 of 2003 & other connected matters 7 dated 31.7.2000 (Annexure P-16). In the year 2000, Haryana Government framed Rules, namely, Haryana State Agricultural Marketing Board (Sale of Immovable Property) Rules, 2000 (hereinafter referred to as “the 2000 Rule”). Rule 4 of the aforesaid Rule relates to sale by allotment and sub rule (5) provides the mode for making payment. The prescribed mode of payment is as under:- “4. XXX XXX XXX XXX (5)The balance seventy five percent of the price of plot may either be deposited without interest within thirty days from the date of issue of allotment letter or in six half yearly instalments, with fifteen percent interest, or at such rate of interest as may be specified by the Board from time to time. The first such instalment shall fall due after six months from the date of allotment letter. However, interest on instalments shall accrue from the date of offer of possession.” Rule 5 of the aforesaid Rule further deals with the possession which reads as under:- “5.The possession of the plot shall be offered to the allottee by the Executive Officer-cum-Secretary, Market Committee within thirty days from the date of issue of allotment letter. “If minimum basic facility i.e. roads, water supply, electrification are existing and if the said basic facilities arenot existing, then after providing the said basic facilities.” CWP No.1122 of 2003 & other connected matters 8 Sub Rule (5) of Rule 4 and Rule 5 of the 2000 Rule was amended vide notification dated 5.3.2002 as under:- “In rule 4 and in sub rule (5), the words and signs “However, interest on instalments shall accrue from the date of offer of possession” shall be added at the end. In Rule 5, after the words “allotment letter” the words, letters and signs “if minimum basic facilities i.e. rods, watersupply, sewerage and electrification are existing and if the said basic facilities are not existing, then after providing the said basic facilities” shall be added at the end.” The petitioner placed on record completion certificate dated 7.1.2004 to indicate that the construction was completed on 30.12.2003 (Annexure P- 21). Another communication dated 26.11.2009 has been filed as Annexure P-31 which indicates that water supply in grain market has started since 26.11.2007. The petitioner has placed on record photographs to establish that the necessary amenities in the area have not been provided even till 2009. To the contrary, the respondents in their reply have pleaded that the basic facilities such as platforms, streets, electricity, water supply, roads and office building etc. have been provided in the Grain Market. It is further stated that second auction of plot was conducted in the same market on 30.11.1990 and 24 out of 25 plots were sold. It is accordingly pleaded that this establishes availability of certain facilities even in the year 1990. It is further the case of the respondents that the petitioner was not interested in construction of the shops. That is why the petitioner waited for 20 years to CWP No.1122 of 2003 & other connected matters 9 raise construction. It is also stated that the petitioner seems to have purchased the plot for re-sale. Respondents also stated that the petitioner did not pay the instalments after initial payment of earnest money and it was only in April, 1989 that a sum of Rs.32500/- was deposited against Plot No.47 and Rs.30000/- against plot No.48. A notice dated 9.5.1988 was served upon the petitioner asking to start and complete the construction and despite this, the petitioner did not start construction and thus, the plea that possession was not handed over till August, 2001 is not well founded. Giving details of the payments made by the petitioner, it has been mentioned that the balance amount of price of the plot was paid by the petitioner between 20.1.1986 to 2.11.1987 for Plot No.47 and between 18.2.1986 to 24.2.1989 for Plot No.48. Respondents have also pleaded that possession was offered to the petitioner in the year 1984, but she did not take possession. Respondents have relied upon the policy decision dated 29.4.1998 whereby decision was taken to charge extension fee in all cases where two years period for construction of shops lapsed on 1.6.1987. During the pendency of the petition and in view of the conflicting stands of the parties regarding availability of facilities, this Court vide its order dated 18.8.2003 appointed a Local Commission to inspect the site in Kalka Mandi. The Commission, after spot inspection submitted his report dated 2.9.2003. The Commission reported that the development of the area in question is very poor and very few shops have been constructed. The roads have been partly constructed and are in bad condition. Electric polls have been installed, but the electricity is available only on Wednesday. It is further mentioned that though water tank was constructed, however, there is no system of water supply. The sewerage system installed is not working. CWP No.1122 of 2003 & other connected matters 10 The area is being used for parking of buses and other vehicles. From the photographs placed on record, it also appears that there are very few constructed shops/buildings. Some constructions are incomplete. Roads have not been properly constructed and even where there is a road, it is not metalled. There are bushes here and there. Electric polls are visible. The land is uneven. Trucks, buses and cars are parked in a haphazard manner on various places. Some of these photographs were taken in November, 2009 with a ditital dated camera. The reply of the respondents also does not establish that all the facilities are in position nor any details of facilities provided are given. It can be safely and conveniently inferred from the above mentioned facts that the facilities have not been provided as per the general auction notice issued as far back as in the year 1984. Though the respondents have pleaded that possession was offered in the year 1987, however, there is no such record to support their contention. Both the sides have relied upon various judgments of this Court and of the Hon’ble Apex Court. It may be useful to notice some of the judgments relied upon by the parties. A Division Bench of this Court in the case of Pankaj Sharma and others vs. State of Haryana and others, 2003(3) PLR 790, while relying upon earlier Division Bench judgment of this Court titled as M/s Makhan Lal Dalip Singh etc. v. H.S.A.M.B. (CWP No.4241 of 1992 decided on 5.6.1993), held as under:- “4.In view of the aforesaid discussion,we allow this writ petition and direct the respondents to provide water supply and sewerage facilities and other facilities, as mentioned in the sanctioned building plans, to all the CWP No.1122 of 2003 & other connected matters 11 plot holders in the New Grain Market, Naneola, District Ambala, within a period of one year. It is further directed that the respondents would not charge interest and penal interest from the petitioners till the water and sewerage facilities are provided to them in the New Grain Market. It isalso madeclear that the petitioners will raise construction on the allotted plots as perthe approved design within a period of two years from the date of providing of the water and sewerage facilities in the New Grain Market. However, in the meanwhile the petitioners will continue to pay instalments of the price already fixed without interest. The clause of interest would come into operation after facilities of water supply and sewerage are provided to thed petitioners in the new Grain Market. If the petitioners commit any default in making payment of instalments in the aforesaid manner, they will be liable to pay interest on the said default as provided in the allotment letter. Whatever instalments have fallen due till today, the petitioners shall pay the same to the respondents within a period of two months. If any new default in the payment of instalments is committed, the petitioners would be liable to pay interest also.” Another Division Bench in the case of M/s Fateh Singh Jitender Kumar vs. State of Haryana and others, 2000 (3) PLR 200 also considered the earlier Division Bench judgment in the case of M/s Makhan CWP No.1122 of 2003 & other connected matters 12 Lal Dalip Singh etc. v. H.S.A.M.B. (supra) and other judgment in the case of Sukhpal Singh Kang v. Chandigarh Administration, 1999 (1) PLJ 219 (DB) wherein it has been held as under:- “11. The roads Annexures P-6 and P-7 relied upon by Shri Hooda do not in any manner support the case set up by the petitioner. A careful reading of the order in Makhan Lal Dalip Singh and others v. Haryana State and others (supra) shows that petitioners M/s Makhan Lal Dalip Singh had come forward with the plea that it could not start construction due to lack of water and sewerage connections and also because the electric wires were passing over the plot. The counsel appearing for the respondent-Market Committee seems to have, on a realisation that it was impossible for the petitioner to raise construction because of the existence of electric wires over the plot, agreed to the imposition of condition by the court that interest shall not be charged on the amount of instalments. The order passed in CWP No.10948 of 1993 is nothing but a reiteration of the direction given in M/s Makhan Lal Dalip Singh's case (supra). The petitioner, in our considered view, cannot take advantage of those orders because as per his own showing the construction has been completed and electricity and telephone connections have been made available to it.” A Single Bench of this Court in the case of Vinod Mittal and others CWP No.1122 of 2003 & other connected matters 13 vs. State of Haryana & Ors., 2009(4) RCR (Civil) 528, considering similar issue in this context and various regulations of HUDA held as under:- “[16]. On a combined reading of the relevant provisions of the HUDA Act and the Regulations, it transpires that the “basic amenities” can be said to have been completed when the metaled roads, wholesome water, sewerage and electrification is completed and made available to the allottees. The “amenity” is a wider expression which includes activities like the tourist spots, open space, parks and play fields, etc. Though the expression “development work” has not been defined under the HUDA Act or the Regulations, however, for the limited purpose of enabling an allottee to utilize the allotted site, it would include the 'basic amenities' only and not the 'amenities' which are to be provided for the entire township and need not be confined to one ‘urban area’ only. The respondent-authorities are, thus, under a legal obligation to provide the ‘basic amenities’ and complete the development works before the possession is offered. [17]. Similarly, the liability of an allottee to pay interest on the balance allotment price shall accrue from the date of offer of possession only, which in turn can be offered only on completion of development works. It necessarily means that unless the development works consisting of 'basic amenities' are completed, the respondent- authorities cannot charge interest from the allottee. The contention raised on behalf of the respondents that the completion of development work comprising basic amenities is not a bilaterally agreed pre-condition for charging interest from the allottee is, thus, totally misplaced and merits rejection. In view of the above referred provisions imposing statutory obligations upon the respondents, the principles laid down by the Hon’ble Supreme Court in a recent decision in U.T. Chandigarh Administration v. Amarjeet Singh & Ors., 2009(4) SCC 660, also do not come to the rescue of the respondents. The HUDA is a statutory authority constituted to act as an extended hand of the welfare State. It has to act strictly in accordance with its own Regulations. Since the local commissioner has found as a matter of fact that the development works comprising the CWP No.1122 of 2003 & other connected matters 14 basic amenities were completed in June, 1992, I have no hesitation in holding that the petitioners are liable topay interest with effect from 1.6.1992 onwards and not prior thereto.” Learned Single Judge in another case of Pawan Kumar vs. State of Haryana and another, CWP No.8129 of 2008 decided on 12.5.2009 while considering the rights of the allottee of the Market Committee observed as under:- “In this view of the matter, there can be no escape but to hold that the petitioner having defaulted in payment of due installments as per the agreed Schedule, the respondents have rightly held it liable to pay penal and compound interest as per the agreed terms and conditions of the allotment and no direction for the refund thereof can be issued. The writ petition is disposed of accordingly.” Another Single Bench of this Court in a bunch of writ petitions titled as Bir Singh Nain and others vs. Haryana State Agricultural Marketing Board, Haryana Panchkula and others, (CWP No.12018 of 2008 and other connected matters decided on 26.11.2009) observed as under:- “The stand of the Board that basic amenities were provided at the time of allotment is disputed by the allottees. Under the writ petition, this Court will not adjudicate this issue. Since the matter has already been decided by a Single Judge of this Court relying upon judgment in M/s Shantikunj Investment;s Case (supra), petitioners have rightly paid the penal interest. Therefore, petitioners are not entitled to any refund for making CWP No.1122 of 2003 & other connected matters 15 payment of extension fee and penal interest.” While considering similar issue, Hon’ble Supreme Court in the case of UT Chandigarh Administration & Anr. Vs. Amarjeet Singh & Ors., JT 2009 (4) SC 39, relied upon its earlier judgment in the case of Municipal Corporation, Chandigarh v. Shantikunj Investments Pvt. Ltd., 2006 (4) SCC 109 and various other judgments and observed as under:- “18.3)..... As per the terms of allotment upon payment of the 25 per cent, possession will be handed over and rest of the 75 per cent of the leased amount to be paid in a staggered manner i.e. in three annual equated installments along with interest at the rate of 10 per cent. If someone wants to deposit the whole of the 75 per cent of the amount he can do so. In that case, he will not be required to pay any interest. But if a party wants to make payment within a period of three years then he is under the obligation to pay 10 per cent interest on the amount of installment. This is the obligation on the part of the allottee as per the condition of lease and he cannot get out of it by saying that the basic amenities have not been provided for enjoying the allotted land, therefore he is not liable to pay the interest". We asked the learned counsel for the parties to tell us which is the obligation of the lessor in the lease deed which says that they will not charge interest on the installments before providing the amenities. There is neither any condition in the lease nor any obligation under the auction. If the parties have given their bids an with their eyes wide open, they have to blame themselves. It cannot be enforced by any mandamus as there is no obligation contained in the lease deed or in the auction- notice." “Therefore, it is evident that a lessee/successful bidder cannot seek reschduling of the instalments of premium or postponement of accrual of the interest payable as per rules.” 20.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 CWP No.1122 of 2003 & other connected matters 16 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 sam be inequitable. In the present case, question of equity does not really arise inasmuch as the condition relating to interest is founded on a statutory rule, vires of which has not been challenged." 24. But the facts of this case are completely different. The auction sale was in December 1996. The National Commission has recorded a finding that almost all the facilities/amenities had provided in the year 1999, that is within about two years. Therefore, the observations of this court in para 38 of Shantikunj will have no applications to these cases, particularly as they were made in the context of a writ proceeding, whereas we are concerned with a proceedings under Consumer Protection Act. We may also refer to another aspect. Section 7 of the Act empowers the Central Government to levy such fees and taxes as it may consider necessary (which shall be in addition to any fee or tax for the time being leviable under any other law) in respect of any site or building on the transferee or the occupier thereof, for the purpose of providing, maintaining or continuing any amenity at Chandigarh. This provision clearly demonstrates that the providing amenities is not linked to auction of plots on lease basis and the premium paid is not for providing any amenity. The Central Government is required to provide amenities by levying fees and taxes in respect of sites/plots on the transferees/ occupiers thereof. Therefore, it is doubtful whether any proportionate reduction in penal/default interest could be made on the ground of non-provision of amenities. Be that as it may. As we have already held that para 38 will not apply, we do not propose examine that aspect any further in these cases.” Even though Division Bench of this Court in the case of Pankaj Sharma and others (supra) ruled that liability to pay interest and penalty accrues on completion of facilities. However, a subsequent Division Bench in the case of M/s Fateh Singh Jitender Kumar (supra) had expressed a different opinion regarding the liability to pay interest and penal interest, in the event of default. The controversy has been now settled at rest by CWP No.1122 of 2003 & other connected matters 17 Hon’ble Supreme Court in the case of Municipal Corporation, Chandigarh