IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA C.W.P. No.717 of 2007 Judgment reserved on: 14.10.2008. Date of decision: 30th October, 2008. Raj Kumar ....Petitioner -Versus- State of H.P. and others ….Respondents Coram: The Hon’ble Mr.Justice Deepak Gupta, Judge. The Hon’ble Mr.Justice V.K.Ahuja, Judge. Whether approved for reporting? No For the Petitioner: Mr.A.K. Jain with Mr.Neeraj Kumar Sharma, Advocates. For Respondents: Mr.R.M. Bisht, Dy.A.G. for respondents 1&2. Mr.Ajay Sharma, Advocate for R-3. Deepak Gupta, J. By means of this writ petition, the petitioner has prayed for grant of the following amongst other reliefs: “i) Issue a writ in the nature of certiorari quashing the order dated 24.5.2005 (Annexure P-7) i.e. the letter issued by Commissioner, Shimla Division and notice dated 16.4.2007 (Annexure P-6) issued by Collector, District Sirmour.” The brief facts necessary for disposal of the writ petition are that the petitioner raised a loan of Rs.1.96 lacs in the year 1984 for purchase of a truck. Admittedly this loan was not repaid within time and there was default in repayment of the loan. Thereafter, the 2 petitioner entered into a one time settlement with the respondent to repay the entire loan amount. He however could not even comply with the terms of the one time settlement and did not repay the loan within the time agreed to in the one time settlement. The petitioner deposited a sum of about Rs.2 lakhs in July, 2005 and thereafter the respondent Corporation issued another letter to the petitioner on 3rd August, 2005 in which it was mentioned that the Corporation has received a sum of Rs.3,47,500/- up to 22.7.2005 against the one time settlement scheme wherein the loan had been settled for Rs.4 lakhs and demanded the balance amount of Rs.55,000/- plus interest during the OTS as well as interest on the delayed payment. It was mentioned that in case this amount was deposited the case of the petitioner for condoning the delay as per the OTS would be considered on merits as per the policy of the Board. The petitioner thereafter deposited a sum of Rs.20,000/- on 30.12.2005 and another sum of Rs.32,500/- thereafter. Since the amount had not been deposited in terms of the one time settlement scheme or the letter dated 3rd August, 2005 the respondent Corporation took out proceedings for recovery of the amount under the H.P. Land Revenue Act. Thereafter, the petitioner filed the present writ petition. We have heard Sh.A.K. Jain, learned counsel for the petitioner as well as Sh.Ajay Sharma, learned counsel for the Corporation. The main ground raised on behalf of the petitioner is that in view of the fact that the respondent had accepted the balance amount 3 payable under the OTS and had agreed vide letter dated 3rd August, 2005 to grant further time to the petitioner, the respondent Corporation is deemed to have waived its right to claim the entire amount and can only claim the amount of interest and not the amount in terms of the original contract. Sh.Jain has relied upon the provisions of Section 55 of the Indian Contract Act, 1872 which reads as follows: “55. Effect of failure to perform at a fixed time, in contract in which time is essential. When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before a specified time, and fails to do such thing at or before a specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promises, if the intention of the parties was that time should be of essence of the contract. Effect of such failure when time is not essential:-If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. Effect of acceptance of performance at time other than agreed upon:-If, in case of a contract voidable on account of the promisor’s failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than agreed, the promises cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of acceptance, he gives notice to the promisor of his intention to do so.” He submits that though the petitioner may not have performed his part of the contract in terms of the one time settlement within the time prescribed but since the respondent accepted a portion of the amount they cannot claim the entire amount. 4 We are unable to accept this argument. Section 55 is wholly inapplicable to the facts of the present case. In the present case the one time settlement was arrived at in the year 2001 in which the petitioner agreed to pay a sum of Rs.four lakhs in a prescribed period of time. This amount was not paid during this period. Thereafter, on 3rd August, 2005 the respondent only sent a letter that in case the petitioner pays the balance amount of Rs.55,000/- in terms of the one time settlement along with the interest during the OTS as well as the interest for the delayed period then his case shall be considered for condoning the delay in depositing the amount. This letter was issued without prejudice to the rights of the respondent. We fail to understand how by issuing this letter the respondent has waived its right under the terms of the contract. The original contract was the contract for grant of loan. The Corporation agreed to give benefit to the petitioner in case he paid the entire balance amount in one go in terms of the one time settlement scheme. Admittedly, the petitioner failed to pay this amount within the time agreed to in the one time settlement scheme. Thereafter, he was only informed that in case he pays Rs.55,000/- along with interest during the OTS and interest on delayed period his case will be considered. He only deposited a sum of Rs.55,000/- but did not deposit the amount of interest at all. Therefore, he did not even comply with the terms of the letter dated 3rd August, 2005. As such the respondent was fully entitled to claim the entire balance amount in terms of the contract. 5 In view of the above discussion, we find no merit in the petition which is accordingly dismissed. There will be no order as to costs. ( Deepak Gupta ), Judge October 30, 2008. ( V.K. Ahuja ), PV Judge