Commnr.Avas Evam Vikas Parishad & Anr vs Laxmi Nath Mishra & Anr

Commissioner, Avas Evam Vikas .......Appellants

Parishad, Lucknow & Anr.

Versus

Laxmi Nath Misra & ORS. .....Respondents

O R D E R

Leave granted.

2. The appellants informed the first respondent by

allotment letter dated 22.3.2006 that a High Income Group

House No.6A/180 had been allotted to him through draw of

lots on 18.3.2006. This was followed by an amended letter

of allotment dated 26.5.2006. This showed that the

allotment was at a total cost of Rs.15,50,740; and that

after adjusting Rs.26,250 (that is Rs.25,000 paid as

registration deposit and interest thereon) the amount

payable was Rs.15,24,490. He was required to pay a lump sum

of Rs.7,75,390 immediately and pay the balance of

Rs.7,49,100 with interest @13% per annum in 120 equated

instalments of Rs.11,185 commencing from 1.4.2006.

He was also required to pay Rs.15,190 towards

2

miscellaneous expenses and Rs.155,100 towards stamp duty.

It was further provided that if there were any delay in the

payment of any of the amount, then additional interest will

be charged at the rate of 16% per annum in regard to the

amount that had become overdue.

3. The first respondent did not make the payment but filed

a writ petition on 6.6.2006 seeking (a) a direction to the

appellants not to cancel the allotment and to accept the

amount due without any penal interest; and (b) a direction

to the appellants to remove the two electrical poles in

front of the allotted house before insisting upon the

deposit. The appellants filed a counter contending that

first respondent cannot object to the existence of electric

poles in front of the house (at a distance of 1.2 M on the

road from the boundary of the plot allotted to him). During

the pendency of the said writ petition, the appellants

cancelled the allotment on 21.4.2007, as first respondent

failed to deposit the amounts due and complete the

formalities. The High Court made an interim order on

18.5.2007 directing the appellants not to allot the said

house to anyone else subject to the first respondent

depositing a sum of Rupees five lakhs. In pursuance of it,

the first respondent deposited Rupees five lakhs on

3

12.6.2007. Ultimately, the High Court disposed of the writ

petition on 4.11.2008 directing that if the first

respondent pays the entire sum of Rs.15,50,740 (less Rupees

five lakhs paid on 12.6.2007) within eight weeks, he shall

be extended the benefit of allotments and the appellant

should execute the Sale Deed in his favour. The High Court

held that as the first respondent wanted to pay the initial

deposit of Rs.7,50,000 and the entire balance in one lump

sum, he should not be burdened with any interest. In

pursuance of the final order dated 4.11.2008, the first

respondent is stated to have deposited Rs.10,50,750, on

12.12.2008.

4. Aggrieved by the direction of the High Court that

appellants should waive the interest, they filed a review

petition which was dismissed on 29.7.2009. The appellants

have challenged the orders dated 4.11.2008 and 29.7.2009 in

these appeals by special leave.

5. The allotment of the house is governed by the terms

contained in the letter of allotment. According to the letter

of allotment the total price was Rs.15,50,740. The first

respondent had the option to pay the entire allotment price

(less Rs.25,000) in a lump sum forthwith in which case he was

4

not liable to pay any interest. He was also given the option

to pay the first instalment of Rs.7,75,390 and pay the balance

of Rs.7,49,100 with interest @13% per annum in 120 monthly

instalments of Rs.11,185 each. The contract also made it clear

that if there were any default, on the defaulted amount,

additional interest was payable at the rate of 16% per annum.

Thus, there were clear provisions in the contract between the

parties contained in the letter of allotment for charging of

interest on instalments and additional interest on the

defaulted dues. The initial amount of Rs.775,390 had to be

paid by 30.4.2006 and possession was offered by the appellants

on such payment and completion of registration formalities by

30.6.2006. The first respondent could not, therefore, delay

the payments due and at the same time contend that he would

not pay the interest. Even if he wanted to pay the entire

amount in one lump sum, he had to pay interest on Rs.7,75,390

from 1.5.2006 and on Rs.7,49,100 from 1.7.2006, apart from

paying the stamp duty and miscellaneous amounts as per the

letter of allotment.

6. The High Court could not have ordered waiver of interest.

In fact, this Court while directing notice had stayed the

order of the High Court subject to the condition that if the

first respondent pays interests at the rate of 13% per annum

5

from 22.3.2006 till date of payment, then the appellant shall

execute the sale deed, subject to the final decision. We are

informed that the interest was not paid and therefore, the

sale deed has not been executed.

7. The appellants claimed interest in terms of the contract.

No rules or regulations to the contrary were relied on by the

first respondent. There is no reason why the appellant should

not charge interest in terms of the contract. High Court

should not, in exercise of power of judicial review, interfere

in such pure matters of contract.

8. We, therefore, allow these appeals in part and modify the

order of the High Court as under :

(a) Having regard to the fact that the entire principal

amount has been paid on 12.6.2007 and 12.12.2008, the first

respondent shall pay interest at 13% per annum on Rs.15,24,490

from 1.7.2006 (due date) to 12.6.2007 (date of payment of Rs.5

lakhs) and interest at the rate of 13% per annum on

Rs.10,24,490 from 13.6.2007 to 12.12.2008.

(b) As first respondent has paid Rs.15,50,750 instead of

Rs.15,24,490 actually due as the cost, the excess of Rs.26,260

6

shall be adjusted towards miscellaneous and other dues claimed

by the appellant.

(c) If the first respondent pays the said interest within

three months from this date and also pays other dues (namely

allotment revival fee, late fee, stamp duty, and miscellaneous

charges), the appellants shall execute the Sale Deed in favour

of the first respondent. If the first respondent fails to pay

the interest due within three months from this date, the

cancellation of allotment shall stand confirmed and the

appellants will be entitled to allot the said house to anyone

else without reference to the first respondent and refund the

sum of Rs.15,50,750 (deposited in terms of the orders of High

Court) to the first respondent without any interest.

(d) Parties to bear respective costs.

.....................J.

( R.V. RAVEENDRAN )

New Delhi; ....................J.

January 03, 2011. ( A.K. PATNAIK )