IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FOURTEENTH DAY OF OCTOBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.V.S.RAO WRIT PETITION NO : 6321 of 2004 Between: K.Satyanarayana Rao, S/o of Anantharamaiah, R/o.2-10-1268, Chaitanyapuri, Karimnagar Town, Karimnagar ..... PETITIONER AND 1. Vice Chairman and Managing Director, AP.Houseing Board, Gruhakalpa, Mukharamjahi Raod, Hyderabad. 2 Executive Engineer (Housing ), AP.Housing Board, Warangal ..RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the Memo.No.16/MIG/Ep/MNCL/WR/2004 dt. 9/01/2004 issued by the 2nd Respondent herein is a arbitrary , illegal, improper and unjust consequently set aside the same. Counsel for the Petitioner: MR.K.RAJA REDDY Counsel for the Respondents: Mr.D.Ranganatha Kumar, SC for APHB The Court made the following : THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.6321 OF 2004 ORDER: The petitioner was allotted House No.16 MIG in Andhra Pradesh Housing Board (APHB) colony, Naspur village near Mancherial in 1994 on hire purchase basis. As per terms of allotment, out of the tentative cost of Rs.1,79,000/-, petitioner was required to pay 30% thereof. Accordingly, he paid the amount. He could not, however, pay the instalments regularly. Therefore, in December, 1997, second respondent issued a letter asking petitioner to pay a sum of Rs.2,75,000/- towards instalments due. Petitioner paid Rs.25,000/-. Therefore, another letter, dated 11.12.2002 was issued calling upon petitioner to pay Rs.3,66,304/-. Petitioner submitted a letter, dated 26.12.2002, raising certain objections. He alleged that amenities like drinking water are not provided and that number of houses constructed remained vacant. He requested APHB to treat the allotment made in his favour on par with allotment made in favour of employees of Singareni Colleries. In reply thereto, second respondent sent a letter, dated 28.04.2003 directing petitioner to pay Rs.3,99,504/-. Petitioner again sent letter on 01.07.2003 requesting to allow the facility of payment in twenty instalments spread over sixty months. Rejecting the request, second respondent issued impugned demand notice, dated 09.01.2004 calling upon petitioner to pay a sum of Rs.1,74,824/- as on 18.03.2004 towards arrears of instalments together with penal interest upto the date of payment. This memo is challenged in the writ petition. Second respondent ﬁled counter aﬃdavit. The brief summary of the same is as follows. APHB constructed 46 MIG houses and 110 LIG houses at their colony, Naspur. However, only 23 MIG houses and 41 LIG houses were allotted during 1994. The other houses remained vacant due to lack of demand. Therefore, APHB oﬀered the vacant houses to Singareni Colleries Company Limited (SCCL) as their colony was adjacent to APHB colony. SCCL informed their decision not to purchase the houses, however, they agreed to stand guarantee for recovery of instalments if any of the employees opt for allotment of LIG/MIG houses. In view of this, after repairing the houses, APHB allotted them to various employees of SCCL, who applied during 2001 on hire purchase basis at a cost of Rs.1,81,200/- for MIG and Rs.99,100/- for LIG payable in 143 instalmetns. If is further stated in the counter aﬃdavit that petitioner executed agreement on 03.08.1995 and took possession in the house on 18.09.1996. As per clause 18 of the agreement if the allottee fails to pay the instalments on due date, penal interest is charged at one and a half (1½) times the normal rate of interest for the period of delay. As per clause 13 of the agreement, the price of the house ﬁnally determined, will be deemed to have become payable from the date of agreement, i.e., 03.08.2005 and therefore, petitioner cannot be permitted to treat the allotment as if it is made in 2001 when the vacant houses were allotted to employees of SCCL. Learned counsel for petitioner submits that though APHB completed construction of houses in 1994 majority of them remained vacant as there was no demand. When the employees of SCCL came forward in 2001, they were allotted giving the facility of payment of balance amount in 143 instalments. Even though petitioner was allotted house in 1994, basic amenities were not provided and therefore, allotment in favour of petitioner should be considered as if it is made in 2001. Nextly, he contends that without providing all the facilities, APHB cannot collect interest and penal interest from the date of handing over of the possession. As held by Supreme Court in Bareli Development Authroity v Ajay Pal Singh[1] a n d Delhi Development Authority v Ashok Kumar Pehal[2], the relationship between allottee and Housing Board is contractual. It is no doubt true that an unconscionable clause or a clause in contravention of Section 23 of Indian Contract Act, 1872 can be struck down as violative of Article 14 of Constitution of India, especially, when one of the parties to the contract is a public/statutory authority. This, however, does not enable the Court of judicial review to re-write the terms of contract and alter binding covenants in the contract governing jural relationship between allottee and Housing Board. There is no denial that petitioner executed an agreement on 03.08.1995. Clause 18 thereof provides that the purchaser shall pay to the owner (APHB) penal interest at 1½ times interest ﬁxed by APHB under the Regulations on outstanding instalments of principle and interest. Regulation 22(iii) of Andhra Pradesh Housing Board (Allotment, Management and Sale of HIG, MIG, LIG and EWS Houses or Flats) Regulations, 1997 is to the eﬀect that on delayed payments of instalments 1½ times over and above normal rate of interest shall be payable by the allottee. These regulations govern the allotment and sale of houses by APHB as seen from Regulation 2(i) thereof. Therefore, petitioner is bound to pay the penal interest as per clause 18. The next aspect of the matter is whether the allotment made in favour of petitioner in 1994 culminating the agreement, dated 03.08.1995 can be treated as an allotment made in 2001 on par with the allotment made in favour of employees of SCCL? This Court is afraid the petitioner’s contention in this regard cannot be accepted. There is no dispute that though 46 MIG houses were constructed only 23 MIG houses were allotted to diﬀerent persons including petitioner in 1994. Admittedly, petitioner also paid a sum of Rs.44,700/- towards 30% of down payment in addition to another sum of Rs.25,000/- in 1997. By the time, APHB decided to allot vacant houses to employees of SCCL, petitioner’s allotment is made and there cannot be novation of the same unless both the parties agree for the same. As observed hereinabove, the power of judicial review, ordinarily, cannot be used to re-write the contract and alter the binding covenants in the contract. If the plea of petitioner is accepted, it amounts to rendering the very allotment and handing over possession itself is illegal because unless and until allottee executes an agreement, possession cannot be handed over. When once allotment is made, agreement is executed and possession is handed over, the allottee is bound to pay the instalments as per the agreement, and there cannot be any alteration so as to reschedule the payment of instalments. Of course, if both the parties to contract agree for rescheduling the amount of payments of instalments is altogether different matter, which is not the case here. Therefore, there cannot be any inﬁrmity if the petitioner’s request to treat the allotment as if it is made in 2001 is rejected by APHB. By impugned memo, petitioner was directed to pay Rs.1,74,824/- as on 18.03.2004 with subsequent penal interest. As the petitioner approached this Court immediately thereafter and obtained interim order, it is appropriate that there shall have to be moratorium on penal interest with eﬀect from 01.04.2004 when the writ petition was ﬁled in the registry. The respondents shall be entitled to collect a sum of Rs.1,74,824/- as demanded in the impugned memo without charging any penal interest. The writ petition, with the above observations, is accordingly disposed of. No costs. ______________ (V.V.S.RAO,J) 14.10.2008. pln [1] AIR 1989 SC 1076 [2] AIR 2002 SC 2940