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2003 DIGILAW 155 (PAT)

Krishna Deva Prasad v. State Of Bihar

2003-02-07

AFTAB ALAM

body2003
Judgment 1. The petitioner had believed, and not without reason, that he had paid off the consideration (i.e., the value of the house along with interest for delayed payment) of the house allotted to him as back as in October, 1982, and the delay in execution and registration of the transfer deeds was due to the slothful ways of the Bihar State Housing Board. But the Housing Board on the basis of a policy decision taken much later and by adopting a different mode of computation of interest makes further demands from the petitioner. The Board maintains that according to its books of account, the petitioner was liable to pay a sum of Rs. 01,67,528/-, as on 30.9.1996 and as a result of accumulation of interest during the pendency of this litigation the Boards demand has swelled up to a sum of Rs. 03,91,679.00 paise, as on 31.12.2002. 2. When the controversy first cropped up in the year 1996, the petitioner came to this Court in C.W.J.C. No. 8906 of 1996, challenging the Boards demand for a further payment of Rs. 01,84,267/- towards the price of the house allotted to him. At that stage this Court did not intervene in the matter. It was noticed that in pursuance of a direction by a Bench of this Court, a committee was constituted in the Board to look into the grievance of the allottees with regard to the Boards demands for further payment for their respective houses/flats. The petitioner was, accordingly, asked to file a representation before the Committee, which in turn was directed to examine his grievances and to pass orders in accordance with law. The petitioner, as directed by this Court, went before the Committee, which by order, dated 8.4.2000, found and held that the Boards demand for further payment(s) was not unwarranted. The petitioner was, accordingly, directed "to pay the up-to-date amount". The order passed by the Committe further said that on receipt of the amount so demanded, along with interest till its payment, the Board would execute lease in favour of the petitioner/ allottee in terms of the letter of allotment. 3. This writ petition was then filed chllenging the order of the Committee as well as the Boards demand for any further payment by the petitioner. This writ petition was filed on 28.7.2000 and was heard for final disposal in January, 2003. 3. This writ petition was then filed chllenging the order of the Committee as well as the Boards demand for any further payment by the petitioner. This writ petition was filed on 28.7.2000 and was heard for final disposal in January, 2003. All this while,the accrual of interest went on unchecked with the result that the outstanding against the petitioner, according to the case of the Board, stood at Rs. 03.91,679.00 paise, as on 31.12.2002. 4. The facts of the case are simple and without any controversy. MIG House No. 119 was allotted to the petitioner, on rental basis, in December, 1968. by the Housing Department, Government of Bihar. In 1975 the Bihar State Housing Board was established by an Ordinance which was later replaced by the Bihar State Housing Board Act, 1982 (Bihar Act 57 of 1982). Shortly after the establishment of the Board, a decision was taken to transfer the houses to their respective allottees on a permanent basis. On 2.8.1975, the petitioner made an application for transfer of the house (MIG House No. 119) in his favour permanently and on 16.8.1975 he deposited the sum of Rs. 3,000/- as earnest money. The allotment of the house was made in his favour by letter no. 888, dated 13.4.1979 (copy at Annexure 1). In the allotment letter the tentative valuation of the house along with the tentative valuation of the land was fixed at Rs. 39,000/- as on 30 June, 1974. The value of the house as stated in the allotment letter was liable to enhancement depending upon three factors, namely, final determination of the cost of (i) acquisition and (ii) development of the land and (iii) the cost of construction of the house. It was also stipulated that with regard to the final determination of the price of the land and the house the Boards decision will be final. 5. By the allotment letter the petitioner was required to make payment of the consideration money which was determined in the following way. (i) The entire amount of the tentative valuation of the house and the land in one lump sumRs. 39,000.00 (ii) The amount of advances deposited by the allottee (to be deducted) Rs. 11,144.80 (iii) Legal and documentation charges (to be added) The amount required to be deposited in one lump sumRs. 27,855.00 6. (i) The entire amount of the tentative valuation of the house and the land in one lump sumRs. 39,000.00 (ii) The amount of advances deposited by the allottee (to be deducted) Rs. 11,144.80 (iii) Legal and documentation charges (to be added) The amount required to be deposited in one lump sumRs. 27,855.00 6. It was further stated in the allotment letter that after making payment of the sum indicated above the allottee would have to execute the ekrarnama in Form II a copy of which was enclosed with the allotment letter. The execution of the ekrarnama would be on judicial stamp paper and he would have to bear the necessary expenses of registration of documents. 7. The petitioner was presumably able to find out the amount he was required to pay and he deposited the entire sum of Rs. 27,855.10 paise vide bank chalan, dated 20.03.1979 (copy at Annexure 2), even before the issue of the allotment letter on 13.4.1979. 8. Before proceeding further it must be noted here that the sum of Rs. 11,144.00 which was deducted from the value of the house as advances having been already paid by the petitioner, admittedly, comprised the earnest money of Rs. 3,000/-, deposited on 16.8.1975 and the monthly rent of the house paid bv the petitioner from December. 1968. till the date on which the value of the house was determined, in other words, the total amount paid by the petitioner as monthly rental was adjusted towards the valuation/consideration of the house. It is also to be noted that this was not an isolated case but the benefit of adjustment of the monthly rent paid by the allottees towards the consideration of their respective houses was extended in other similar cases as well. 9. Later on, it was realised that though the valuation of the house was fixed with reference to 30.6.1974, the payment was made by the petitioner on 20.3.1979; hence, he was liable to pay a further sum of Rs. 03,481.88 paise as interest on Rs. 27,855/- for the period between 30.6.1974 to 20.3.1979. Once again the petitioner was able to find out from the office his liabilty to pay the amount of interest and he paid the sum of Rs. 03,481.88 on 15.10.1982 as evidenced from the bank chalan (copy at Annexure 4) long before the issuance of the demand letter, dated 31.3.1984. 10. 27,855/- for the period between 30.6.1974 to 20.3.1979. Once again the petitioner was able to find out from the office his liabilty to pay the amount of interest and he paid the sum of Rs. 03,481.88 on 15.10.1982 as evidenced from the bank chalan (copy at Annexure 4) long before the issuance of the demand letter, dated 31.3.1984. 10. Having, thus, paid the entires sideration of the house, as indicated in the allotment letter and the interest for the delayed payment, the petitioner remained under the belief that he had discharged his obligations and the transfer deeds of the house would be executed and registered in due course. According to his cases,he went to the office of the Board from time to time and requested for execution and registration of the transfer deeds, but he was not unduly anxious as he had made full payment of the consideration money and the interest for the delayed payment. 11. Here it may be stated that the Executive Engineer of the Housing Board wrote letter no. 2418, dated 16.2.1984,to the Manager, Estate, intimating that till then the petitioner had deposited a sum of Rs. 43,008.28 with respect to MIG House No. 119. It was further stated in the letter that though the payments made by the petitioner were entered in the relevant ledger, those were required to be confirmed by the Boards head office because the third copy of the receipts were sent directly there by the bank. This letter of February, 1984, was replied to, after more than 12 years, by letter no. 1418, dated 20.3.1986 from the Revenue Officer of the Board. In this letter it was declared that apart from the payments made earlier,a sum of Rs. 01,84,267.00 paise was the outstanding balance against the petitioner as on 30.4.1996 (in the affidavits filed on behalf of the Board it is stated that Rs. 01,84,267.00 was mentioned in that letter due to some mistake in calculation and the correct figure was of Rs. 01,67,528/-). A copy of this letter was forwarded to the petitioner also. And it is undeniabfe that this was the first demand of any outstanding dues made by the Board after the last payment by the petitioner 14 years ago, on 15.10.1982. 12. As noted above the petitioner challenged this demand before this Court in C.W.J.C. Mo. 01,67,528/-). A copy of this letter was forwarded to the petitioner also. And it is undeniabfe that this was the first demand of any outstanding dues made by the Board after the last payment by the petitioner 14 years ago, on 15.10.1982. 12. As noted above the petitioner challenged this demand before this Court in C.W.J.C. Mo. 8906 of 1996 and by the order passed in that case he was relegated to the Boards Committee. The Committee upheld the Boards demand and the petitioner, once again, came to this Court in this writ petition. 13. The Board has defended the impugned demand in a rather stumbling way and no less than four counter affidavits were filed on its behalf. In the first counter affidavit filed on 5.8.2002 all the statements made on behalf of the petitioner were admitted. In paragraph 10 of this counter affidavit it was stated that after adjustment of Rs. 11,144,90 paise already paid by him against the tentative cost of the house fixed at Rs. 39,000/-, he was required to pay the remaining amount of Rs.27,885.10 paise in one lump sum. He paid this amount on 20.3.1975 and, thereafter, he further paid a sum of Rs. 03,481.88 on 15.12.1982 as interest accrued on the tentative cost/price of Rs. 27,885.10 paise for the period 30.6.1974 to 20.3.1979.The adjustment of the monthly rental paid by the petitioner towards the consideration/valuation of the house was also admitted in paragraph 12 of the counter affidavit, which is as follows : "12 : That it would not be out of place to mention here that earlier Rs. 3000/- deposited by the petitioner towards Earnest Money and Rs. 8294.00 deposited by the petitioner towards monthly rental of the said house upto 30.61974 i.e. Rs. 3000.00 + Rs. 8,294.00 - Rs. 11.294.00 was adjusted against the said tentative cost/price of the house i.e. Rs. .39.000/- but in the year 1984, - the Board in its 91st meeting held on 14.9.1984 and 18.9.1984 took a decision not to adjust the amount of rent (Rs. 8,294.00) towards cost of such houses for meeting the cost of repair and maintenance." 14. A second counter affidavit was filed on 19.9.2002 and the thud and the fourth counter affidavits were filed on 25.11.2002 and 19.12.2002 respectively. What emerges from the counter affidavits filed on behalf of the Board can be summarised as follows : 15. 8,294.00) towards cost of such houses for meeting the cost of repair and maintenance." 14. A second counter affidavit was filed on 19.9.2002 and the thud and the fourth counter affidavits were filed on 25.11.2002 and 19.12.2002 respectively. What emerges from the counter affidavits filed on behalf of the Board can be summarised as follows : 15. On 31.3.1974, the cost of the land and the house was determined by the Board at Rs. 39,127.05 paise. By accrual of interest at the rate of 8 per cent up to 31.3.1976 and at the rate of 8.5 per cent up to 30.4.1979 (the allotment being made in April, 1979) the capitalized value of the house came to Rs. 57,707.00 paise. Further, the Board in its meeting, dated 14.9.1984, took the decision not to allow adjustment of monthly rentals paid by the allottees towards the cost of the respective houses and an office order was, accordingly, issued on 10.11.1984. In view of this decision/office order only Rs. 27,855.10 paise and the earlier deposit of Rs. 3,000/- as earnest money were taken as payment towards the consideration of the house. Thus, after adjustment of Rs. 3,000/- deposited as earnest money and Rs. 27,855.10 paid on 20.3.1973 the outstanding balance against the petitioner was Rs. 26,445.90 paise as on 31.3.1979 and it this amount which bv accrual of interest at differnt rates for different periods has swelled up to the large sum of Rs. 3.91.679/- as outstanding on 31.12.2002. Here one is remind of a case where a few .malignant cells are left in the body due to the incompetence or gross oversight of the surgeon which later, unknown to the person concerned, grow into a large life threatening tumour. 16. In this whole controversy two things stick out prominently. First, the decision not to allow adjustment of the monthly rental paid by the allottees towards the valuation of the house was taken in September, 1984, and the order was issued in November, 1984, that is to say, five years after the benefit of adjustment of monthly rental was allowed to the allottees and payments were accepted from them on that basis. Secondly, even after the decision was taken and the calculation of interest/capitalised value of the house as on 30.4.1979 was made following a different mode, no notice or information was given to the petitioner with regard to his further liability. Secondly, even after the decision was taken and the calculation of interest/capitalised value of the house as on 30.4.1979 was made following a different mode, no notice or information was given to the petitioner with regard to his further liability. Had the petitioner been informed in 1984 that he had an outstanding balance of Rs. 26,448.90 paise as on 31.3.1979 then, according to the Boards own calculation, the dues at that time would have been no more than around Rs. 40,000/- and the petitioner might have paid this amount rather than taking recourse to a long, costly and tiring litigation. But having entered the figures in the books of account the Babus in the Housing Board simply slept over the matter and made the first demand from the petitioner, after 12 years, on 20.3.1996 when the outstanding balance by accumulation of interest had already gone up to Rs. 01,67,528/-. 17. I have some doubt whether it was open to the Board to take a decision not to allow the adjustment of rent five years after the payments were accepted on that basis and the contract was practically closed. But even assuming that the Board was at liberty to unilaterally re-open the issue of fixing the price of the house, there can be absolutely no justification for not intimating the petitioner and not making a demand from him for twelve years even after the price of the house along with interest was finally determined in November, 1984. In these facts the demand for payment of interest on the outstanding balance forlhe period November, 1984,to 20.3.1996 would plainly mean asking the petitioner to pay a heavy penalty for the laches, oversight and inefficiency of the Board. 18. Though it is an admitted position that no notice or intimation was sent to the petitioner prior to the letter, dated 20.6.1996, with regard to the outstanding liability in the light of the reversal of decision and adoption of a different mode of calculation of interest, it is stated on behalf of the Board that the petitioner was otherwise aware of the outstanding dues against him. In this regard, reliance is placed on a representation filed by the petitioner on 11.6.1986, a copy of which is at Annexure D. In my view, the reliance is wholly misplaced, in that representation, the petitioner primarily made a request for execution of the final transfer deed with regard to the house allotted to him and all that was said in that representation wast that it was not open to the Board to unilaterally change the terms or revise and re-fix the price against the terms embodied in its proposal and offer. In the rejoinder affidavit filed on behalf of the petitioner it is explained that he used to go to the Boards office from time to time and he had vaguely learnt that there was some proposal to refix the valuation of the house by a different mode and he was protesting against that Moreover, he did not receive any reply to this representation filed in June, 1986.and he had, therefore, no means to know that his pleas were not accepted and the outstanding balance shown against him in the Boards books of account was attracting huge interests and that by 1996 the dues had accumulated to a sum of over Rs. 01,67,528/-. In Bihar State Housing Board & others V/s. Sardar Singh 1998 (3) All P.L.R., 404, a Division Bench of this Court held that interest could be charged oniy on an amount which was not paid after demand In the facts and circumstances of this case, the Division Bench decision applies with full force and I have no hesitation in holding that even if the Boards decision not to allow adjustment of rent towards the value of the house is upheld it cannot be held entitled to charge interest on the outstanding dues as on 31.3.1979. From the discussion, made above, it is clear that the Board can claim from the petitioner only a sum of Rs. 26,445.90 but no interest accruing on that amount for the simple reason that no demand for payment of that sum was ever made to the allottee. 19. In the result, this writ petition is allowed. The order, dated 8.4.2000, passed by the Boards Committee (Annexure 10) and the impugned demand (Annexure 7), are quashed. The petitioner is directed to make payment of the sum of Rs. 19. In the result, this writ petition is allowed. The order, dated 8.4.2000, passed by the Boards Committee (Annexure 10) and the impugned demand (Annexure 7), are quashed. The petitioner is directed to make payment of the sum of Rs. 26,445.90 within one month from today and the Board in turn is directed to execute the document(s) of title with regards to MIG. House No. 119 and to submit them for registration within two months from the date of the deposit made by the petitioner.