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2002 DIGILAW 798 (PNJ)

Ruchika Jain v. Municipal Corporation, Chandigarh

2002-08-13

JAGDISH SINGH KHEHAR

body2002
JUDGMENT J.S. Khehar, J. (Oral) - The Municipal Corporation, Chandigarh issued an advertisement in respect of 61.21 Acres Development Scheme, Manimajra. As per the advertisement, auction of sites in the aforesaid scheme was to be held on 4.8.2000. The petitioner herein was interested in a booth site. She participated in the auction conducted on 4.8.2002, and made a bid for booth site No. 754. Her bid being the highest, was accepted. On the fall of hammer, she was required to deposit 10% of the said amount. Since her bid was for Rs. 8,60,000/-, she deposited Rs. 86,000/- (as 10% of the bid amount), on the same day. 2. The petitioner has placed on record the general terms and conditions of sale of commercial sites/built up booths (by auction on 99 years lease hold basis) at Manimajra, on the record of this case as Annexure P-1. Some of the relevant terms and conditions are being extracted hereunder :- "1. The site will be given on lease hold basis for 99 years. In addition to the auction premium, rent @ 2.5% premium is payable every year for the 1st 33 years. The rent may be 3.75% for the next 33 years and 5% of the premium for the remaining 33 years of the lease period. 2. The actual dimensions and area of each site will be announced before the start of the auction. xx xx xx xx 4. 25% of the bid shall be accepted in case or by means of demand draft at the fall of the hammer and remaining 75% premium may be paid either in lump sum within 30 days (including date of auction) from the date of auction without any interest or the balance 75% premium shall be payable in 3 equated annual instalments alongwith interest @ 18% per annum. The first instalment shall become payable after one year of the date of auction. In case the instalment of premium and ground rent are not paid on due date, interest @ 24% per annum shall be payable from the due date to the date of actual payment. The first instalment shall become payable after one year of the date of auction. In case the instalment of premium and ground rent are not paid on due date, interest @ 24% per annum shall be payable from the due date to the date of actual payment. The Assistant Commissioner, may in his absolute discretion allow the successful bidder to deposit, in the prescribed mode of payment, not less than 10% of the bid on the condition that the difference between the amount deposited and 25% of the bid shall be deposited in the same manner within 30 days of auction (including the date of auction). xx xx xx xx xx 10. The successful bidder shall have to pay 25% of the amount of the bid on the spot in cash or by means of demand draft in favour of the Assistant Commissioner on any scheduled Bank situated at Chandigarh. 11. After making payment of 25% of the premium, the lessee shall execute a lease deed in the prescribed form in such manner as he may be directed by the Assistant Commissioner within six months of the date of auction or within such extended period as may be allowed by the Assistant Commissioner for sufficient reasons, failing which the Assistant Commissioner may cancel the lease and forfeit upto 10% of the premium. The lessee shall bear and pay all expenses in respect of execution of lease deed including the stamp duty and registration fee payable thereof in accordance with law for the time being force." 3. A perusal of the conditions reproduced above reveal that an option is given to successful bidder to make the entire deposit without payment of interest, or in the alternative to make a deposit of 25% of the premium amount in the first instance and to tender the remaining premium in three equated annual instalment. Anyone who accepts the scheme of deferred payment, is required to pay the instalments alongwith interest @ 18% per annum. In case of default in the payment of the said instalments, penal interest @ 24% per annum is chargeable. 4. The general terms and conditions of sale/lease extracted above also reveal that after the lessee makes payment of 25% (or more) of the premium, the lessor has to execute an allotment letter in his (lessees) favour. In case of default in the payment of the said instalments, penal interest @ 24% per annum is chargeable. 4. The general terms and conditions of sale/lease extracted above also reveal that after the lessee makes payment of 25% (or more) of the premium, the lessor has to execute an allotment letter in his (lessees) favour. It is not a matter of dispute that the allotment letter in the present case in furtherance of the acceptance of the bid of the petitioner, was executed by the lessor (i.e. Municipal Corporation, Chandigarh) on 26.9.2000. The allotment letter acknowledged the fact that the petitioner had already paid a sum of Rs. 2,15,000/-. It is the case of the petitioner that he had in fact deposited a total of Rs. 2,80,000/- towards premium by 21.8.2000. The aforesaid factual position has not been disputed in the written statement. Again on 2.9.2000, the petitioner claims to have deposited a further sum of Rs. 3,80,000/-; which fact is also not denied. It is, therefore, evident that by 2.9.2000, the petitioner had made a total deposit of Rs. 7,46,000/- as against the bid amount of Rs. 8,60,000/-. 5. Having paid the aforesaid amount, the petitioner started to address representations to the Municipal Corporation, Chandigarh i.e., the lessor to hand over possession of the plot in question in order to enable her to commence construction on the booth site so as to be able to make use of it at the earliest. This assertion of the petitioner assumes significance on account of the fact that the term of lease commences on the date of issue of the allotment letter. In this case, since the allotment letter was issued on 26.9.2000, the lease period admittedly commenced to run on 26.9.2000 despite the fact that possession of the booth had actually not been delivered to the petitioner. 6. The petitioner finally paid a sum of Rs. 1,18,000/- on 12.10.2000. This amount included the balance payable out of the sum of Rs. 8,60,000/- and interest on the unpaid amount for the period commencing from the date of auction to 12.10.2000. It is, therefore, evident that on 12.10.2000, the entire amount of premium alongwith interest had been paid by the petitioner. Even after the petitioner had paid the entire amount, possession was not formally handed over to her. It is in these circumstances that the petitioner made further representations. It is, therefore, evident that on 12.10.2000, the entire amount of premium alongwith interest had been paid by the petitioner. Even after the petitioner had paid the entire amount, possession was not formally handed over to her. It is in these circumstances that the petitioner made further representations. Having failed to obtain possession of the booth site, the petitioner knocked the doors of this Court through the instant writ petition on 24.7.2001. Eventually, possession of the booth site bearing No. 754 in the 61.21 acres Development Scheme, Manimajra was handed over to the petitioner on 21.8.2001 i.e, during the pendency of the instant writ petition. The fact that possession has been handed over by the respondents to the petitioner is sought to be affirmed by the Municipal Corporation, Chandigarh by relying on Annexures R-1 and R-2 appended to the written statement filed on its behalf. A perusal of the aforesaid annexures reveals that possession was handed over to the petitioner on 21.8.2001. The petitioner has, however, invited the attention of this Court to the endorsement made by her under signatures of Annexure R-1 wherein she had specifically mentioned that possession had been handed over to her nationally i.e., without demarcation. 7. Despite the dispute whether actual or notional possession had been handed over to the petitioner on 21.8.2001, learned counsel for the petitioner has made a statement at the bar, that the controversy be decided as if actual physical possession of the booth was handed over to the petitioner on 21.8.2001. After possession is acknowledged to be handed over to the petitioner in the writ petition i.e., for the issuance of a writ in the nature of mandamus requiring the respondents to hand over physical possession to the petitioner has been rendered infructous. 8. Through the present writ petition, the petitioner further impugns the action of the Municipal Corporation, Chandigarh in demanding the lease amount as indicated in the general terms and conditions of sale, for the period from 26.9.2000 (the date of allotment till 21.8.2001. 8. Through the present writ petition, the petitioner further impugns the action of the Municipal Corporation, Chandigarh in demanding the lease amount as indicated in the general terms and conditions of sale, for the period from 26.9.2000 (the date of allotment till 21.8.2001. Besides the aforesaid, the petitioner demanded interest on the deposits made by her @ 24% per annum on account of the fact that the Municipal Corporation, Chandigarh failed to hand over physical possession of the booth in question to the petitioner, and thus deprived the petitioner of enjoyment of the booth site in question from the date of allotment letter i.e., 26.9.2000 till 21.8.2001 when eventually possession was handed over. 9. Learned counsel representing the Municipal Corporation very fairly states that the lease amount can be charged only from the date when possession is handed over to the petitioner and accordingly conceded that no ground rent was payable from the date of allotment letter till 21.8.2001. That being the conceded position, in so far as the challenge raised by the petitioner on the payment of ground rent is concerned, the same is accepted and it is accordingly held that no ground rent shall be liable to be paid by the petitioner till the date of handing over the possession i.e. 21.8.2001. 10. The question which still needs to be deliberated upon is the claim of payment of interest on the amount of the premium paid by the petitioner, which remained in possession of the Municipal Corporation, Chandigarh for the period during which the Municipal Corporation Chandigarh failed to discharge its obligation, namely, to hand over possession of the booth site to the petitioner. Learned counsel for the respondents has controverted the claim of the petitioner in respect of the demand of interest @ 24% by raising the following pleas : (i) The first contention of the learned counsel for the respondents is that the Municipal Corporation, Chandigarh on the receipt of the premium (or part thereof) is obliged to issue an allotment letter. With the issuance of allotment letter dated 26.9.2000, the Municipal Corporation, Chandigarh fully discharged its obligation. In lieu of possession, the Municipal Corporation, Chandigarh is entitled to charge ground rent. With the issuance of allotment letter dated 26.9.2000, the Municipal Corporation, Chandigarh fully discharged its obligation. In lieu of possession, the Municipal Corporation, Chandigarh is entitled to charge ground rent. And since it has already been conceded on behalf of the respondents that ground rent will not be charged for the period during which possession was not handed over to the petitioner, all the formalities which the Municipal Corporation, Chandigarh was required to perform, had been duly performed and as such the petitioners claim of interest @ 24% on the premium deposited by her is misconceived. (ii) The second contention of the learned counsel for the respondents is that the total lease period is of a duration of 99 years. The instant deprivation is for the period of one year. The petitioner can be permitted a deduction of 1/99 from the premium so as to compensate her on account of non-handing over of possession. (iii) The next contention of the learned counsel for the respondents is that an allottee is required to pay interest @ 18%. Although, in the present case, interest has been charged from the petitioner only @ 10% and as such, while determining the interest payable (if at all ) to the petitioner, the same should not be in excess of 10% and in any case, not beyond 18%. (iv) The last contention of the learned counsel for the respondents is that the issue of quantification of damages claimed by the petitioner cannot be the subject matter of jurisdiction of this Court under Articles 226/227 of the Constitution of India as it involves disputed questions of fact. In the absence of any evidence to indicate the loss suffered by the petitioner, she should not be held entitled to any interest on the deposit made by her. Before dealing with the claim raised on behalf of the petitioner. consider it appropriate to deal with the contentions raised on behalf of the respondents controverting the claim of the petitioner. 11. The first contention raised on behalf of the respondents, noticed above, is based on a misconception of the legal position. It cannot be accepted in law that a successful bidder, who deposits the bid amount, is only entitled to a piece of paper, which communicates to him the factum of allotment and nothing more. 11. The first contention raised on behalf of the respondents, noticed above, is based on a misconception of the legal position. It cannot be accepted in law that a successful bidder, who deposits the bid amount, is only entitled to a piece of paper, which communicates to him the factum of allotment and nothing more. In law, a successful bidder, who deposits the amount due within the frame work of the terms and conditions of allotment is entitled to possession of the property in respect of which his bid has been accepted and in respect of which he has made a tender. The argument advanced by the learned counsel for the respondents can be tested by a simple illustration. Would it be justified for the Administration to accept the entire bid amount and to execute an allotment letter but not hand over possession for a period of 99 years (the total period of lease) ? By not demanding rent/lease amount during the lease period will it be open to the Administration to state that after the expiry of the lease period, the allotted property would resort back to it ? The answer to the aforesaid obviously has to be in the negative. The consideration flowing from the allottee to the Administration is the premium coupled with the rent. For the aforesaid cumulative consideration, the allottee is entitled to the enjoyment of the property for a period of 99 years; it is, therefore, wholly misconceived for the Administration to believe that rent alone is the consideration for possession/occupation. For the reasons recorded above, it is not possible to accept that the premium amount entitles an allottee to an allotment letter alone and nothing more. 12. The second contention of the learned counsel for the respondents, though attractive on first blush, cannot stand legal scrutiny. The contention of the learned counsel for the respondents is that the petitioner should be refunded the premium amount proportionate to the reduction of the lease period. Before examining the aforesaid contention, it would be necessary to examine whether the same claim if made by the petitioner would be acceptable. In the first instance, at the time of the auction, a successful bidder must deposit 10% of the premium amount. Within a period of one month, he must deposit at least an additional 15% of the premium amount. In the first instance, at the time of the auction, a successful bidder must deposit 10% of the premium amount. Within a period of one month, he must deposit at least an additional 15% of the premium amount. In case, a successful allottee deposits 25% of the premium amount, he is entitled to an allotment letter as also possession of the site in question. Can such an allottee (after the receipt of the allotment letter and possession of the site) claim that he does not desire to pay the remaining premium amount but would be satisfied if the lease period is reduced to the extent of the short fall of the premium amount ? Learned counsel for the respondents acknowledge the fact that such a plea would not be open to the petitioner. When such a plea is not open to the petitioner, it is difficult to appreciate how can it be merit in the second contention of the learned counsel for the respondents. 13. The next contention of the learned counsel for the respondents i.e. the third contention, is that the petitioner was required to pay interest @ 10% for deferred payment as per the terms and conditions of allotment, it would not be valid to allow her interest at a rate in excess of which it is chargeable from her. A perusal of the general terms and conditions of sale of commercial sites/built up booths (extracted above) leaves no room for doubt that in case an allottee chooses the scheme of deferred payment, he is required to pay interest on account of deferment @ 18% (which is stated to have been reduced to 10% for the petitioner). Undoubtedly, the terms and conditions extracted above allow an allottee the right, to make the entire deposit of the premium amount within one month (of the date of auction) without payment of interest or in the alternative to deferred payment of the premium amount wherein he is required to deposit 25% of the premium amount within one month of the date of auction and the remaining amount in three equated annual instalments. In case an allottee opts for the scheme of deferred payment, he is charged interest @ 18% (through the petitioner was charged interest @ 10%). In case an allottee opts for the scheme of deferred payment, he is charged interest @ 18% (through the petitioner was charged interest @ 10%). It is, therefore, evident that the liability of the allottee to pay interest on account of deferred payment is not the liability to pay interest for a default committed, but on account of his choice of making payment of the premium amount under the scheme of deferred payment. However, if the allottee does not deposit the amount in terms of the scheme, he must make up the deficiency by paying interest @ 24%. It is, therefore, obvious that for a default committed by the allottee, he is penalised by requiring him to pay interest @ 24%. Thus viewed, it is clear that the Administration is entitled to interest @ 24% on account of unfair retention of the premium amount by the allottee or delay in payment of the premium amount. In order to determine whether interest is payable @ 18% (10% in the present case) or @ 24%, it is necessary to decide whether the claim of interest is on the basis of a default committed or otherwise. There cannot be any doubt that in not handing over possession of the site in question to the petitioner, the Administration committed a default of the terms and conditions of allotment. Having withheld the premium amount of the petitioner unfairly, it must reimburse the allottee in the same terms and at the same rate of interest, which it demands in the case of a default at the hands of the allottee. In fact, the conclusion drawn above, would be the only justified conclusion in terms of Article 14 of the Constitution of India, which guarantees to every citizen, equality before the law as well as equal protection of the laws. If the Administration demands 24% interest for a default committed by the allottee, it must likewise pay interest @ 24% in case of its own default. In view of the above, it is not possible even to accept the third contention of the learned counsel for the respondents that interest chargeable on account of unauthorised retention of the premium amount without simultaneous handing over the possession of the premises in question to the petitioner, cannot be beyond 10% or 18%. 14. In view of the above, it is not possible even to accept the third contention of the learned counsel for the respondents that interest chargeable on account of unauthorised retention of the premium amount without simultaneous handing over the possession of the premises in question to the petitioner, cannot be beyond 10% or 18%. 14. The last contention of the learned counsel for the respondents is that it is not appropriate for this Court to quantify damages payable to the petitioner since it is not possible for this Court without recording evidence to determine the loss suffered by the petitioner. The instant contention is misconceived specially in view of the conclusion drawn in the foregoing paragraph. Damages are clearly expressed in case of any default at the hands of the allottee in the terms and conditions of allotment. The same parameter would regulate the rate at which the allottee is entitled to damages for a default committed by the lessor. Personal injury suffered is wholly irrelevant in the scheme of the terms and conditions of allotment and, therefore, need not be gone into. Moreover, the claim made by the petitioner is not on the basis of any loss suffered by her. Since this court is not being called upon to examine the personal loss suffered by the petitioner, the instant objection raised on behalf of the respondents is also liable to be rejected. 15. While deliberating upon the objections raised by the learned counsel for the respondents (specially in respect of the third contention raised by him), it has already been concluded above that the petitioner is entitled to interest @ 24% on the premium amount for the period for which the Chandigarh Administration utilised the aforesaid amount without handing over physical possession of the booth site to her. Accordingly, for the parity of reasons mentioned above, the petitioner is held entitled to interest @ 24% for the period possession of the site in question was wrongly not handed over to her. Since it is conceded by the parties that the period of lease commences from the date of issuance of the allotment letter, the petitioner would be entitled to interest on the premium amount from the date of the allotment letter i.e., 26.9.2000 till the date when the physical possession of the booth site was handed over to her i.e., till 21.8.2001. 16. Disposed of accordingly. Petition allowed.