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2003 DIGILAW 413 (PAT)

Ramkeshwar Choudhary v. State Of Bihar

2003-04-10

R.S.GARG

body2003
Judgment 1. Heard learned counsel for the parties. 2. The petitioner, on 27.11.1978 deposited earnest money, Rs. 2,000/- under high and fond hope that some day or the other the respondent Housing Board shall give him a plot to build a dream house; the application was for a plot in Bahadurpur Colony. After the lottery draws were drawn, certain plots were allotted in favour of the others, petitioner could not get any plot. The Housing Board even on non-allotment of the plot did not refund the money immediately after the plots were allotted to others at Bahadurpur, but assured the public that some day or the other some plot at some place on some date would be given to the applicants. The earnest money remained in deposit with the respondent right from 1978 to 1991. It appears that in the mean time, as contended by the counsel for the Housing Board certain matters came before this Court in relation to the allotments of certain plots. This Court directed that all pending applications be considered by the Housing Board and such applicants be given plots at Digha. The respondent thereafter vide their letter No. 338 dated 3.9.1991 allotted Plot No. 5M/7 admeasuring 1430 Sq. Ft. to the petitioner. The allotment amount/price of the plot was tentative fixed as 76,896/-. The petitioner was required to deposit the amount in accordance with Clause (4) of the allotment order. The petitioner submits that despite earmarking Plot No. 5M/7 the possession of the said plot was not given to the petitioner. The petitioner in his different letters has submitted to the Housing Board that after the plot was allotted he had deposited a sum of Rs. 97,518/- in stead of Rs. 76;896/- being the original allotment amount. 3. The respondent Housing Board has come out with a case that because of absolute lawlessness and their helplessness in clearing the encroachments made at Digha on the acquired land they are unable to do anything, they are unable to develop the land, mark the plots or allot the piece of land to the said allottees. In the counter affidavit it is said that almost about 40% of land is under encroachment. In the counter affidavit it is said that almost about 40% of land is under encroachment. The total land acquired for the Digha Colony was 1034.92 acres, if out of this total land 40% is under encroachments then at least 600 acres land is in possession of the Housing Board or at least if the Housing Board really wanted they could develop the remaining 600 acres land and give plots to the persons, who had deposited their hard earned money with the Housing Board and the same remains in deposits with the Board for 10 to 25 years. 4. The facts further are that the Housing Board being unable to allot the plot, is not doing anything further and now when the petitioner has come to this Court seeking the relief of delivery of possession of a plot they simply say that they are not in a position to put the petitioner in possession. 5. When this Court asked the learned counsel for the Housing Board that if they are unable to give the plot, why the deposits made by the petitioner be not refunded. Learned counsel for the Housing Board submits that in accordance with the Regulation No. 33 read with Regulation No. 45 they would refund the money. According to him if the Board fails in giving the plots then or in case where the property has been allotted but the application for refund is made then 20% of the deposited amount would be deducted and 5% simple interest would be paid on the balance money from the date of deposit till date of its payment to the applicants. For proper appreciation of the arguments raised by the learned counsel for the respondents it is necessary to consider Regulation 33 and Regulation 45. The said regulations read as under :- "33. 1[(1) Immediately after decision on allotment of dwelling units/flats/sites has been taken, the applicant under High Income Group and Middle Income Group shall be required to pay/deposit equal to 30 per cent of the disposal price, but the applicants under Low Income Group and Economically Weaker Section, shall be required to pay deposit equal to 20 per cent of the disposal price. Such deposit shall be non-interest deposit.] (2) An applicant to whom a dwelling unit or flat/site has been allotted have to pay the balance amount of the disposal price (i.e. after adjusting the deposit) within such period as may be determined by the Board and specified in the allotment order/letter. (3) If the applicant fails to pay the amount within the said specified period, the allotment shall be cancelled and a sum of money equal to 20 percent of the deposit shall be forfeited and the balance refunded. (4) In the case of such applicants as have not been finally allotted any dwelling unit/flat/site the deposit specified in sub-regulation (1) shall be refunded. (5) The Board shall have the sole and exclusive right over the deposit till it is adjusted or refunded with or without deduction as provided in these regulations." "45. Simple interest at the rate of 5 per cent will be payable on the amount of earnest money deposited by the applicants, after the date of enforcement of this regulation. No interest will be payable on deposits made hereinbefore." 6. So far as award of simple interest @ 5% under Regulation 45 is concerned, a bare perusal and simple understanding of the Regulations shows that this regulation would apply to the deposit made under the head of the earnest money. Regulation 45 does not apply to any amount deposited under any other head. Regulation 45 in simple terms says that simple interest at the rate of 5% will be payable on the amount of earnest money deposited by the applicant. The Board while making a regulation has directed that the said interest would be payable to a person if deposits under the head of earnest money was made after enforcement of the regulation. The Board has said in the regulation that no interest would be payable on the deposits made prior to enforcement of regulation 45. 7. I fail to understand that how a Shylock approach can be adopted by Board while making the regulations in relation to the refund of money. When a deposit is made in form of earnest money it is a deposit and not a charity to the Housing Board. This in fact is required to be deposited to create a right in favour of the depositor. The deposits when remained with the Housing Board then the Housing Board earned interest upon it. When a deposit is made in form of earnest money it is a deposit and not a charity to the Housing Board. This in fact is required to be deposited to create a right in favour of the depositor. The deposits when remained with the Housing Board then the Housing Board earned interest upon it. Whatever is the date of deposit of the earnest money, the Board cannot make a regulation in its own favour by saying that no interest would be paid to anybody if the money is deposited prior to enforcement of the regulation. Regulation 45 so far as it directs that no interest would be paid on the earlier deposit is totally dishonest, opposed to the public policy and cannot be allowed to stand, that part of Regulation 45 is held to be contrary to law when it says that no interest would be payable to the deposits made prior to the enforcement of the regulations. It is to be seen further that 5% simple interest is to be paid on the deposit of the earnest money. The petitioner had made the deposit of earnest money in a sum of Rs. 2,000/- but thereafter deposited the money towards the price of the plot. If price of the plot is not covered under Regulation 45 then the bar and the capping of 5% interest would not apply to such a deposit. 8. Regulation 33 is in relation to the disposal of the property, allotment, deposits and refund of the money before or after the allotments are made. Regulation 33(1) says that immediately after decision on allotments the different applicants under different income groups would be required to deposit different amounts of the disposal price. These deposits are not the earnest money though Regulation 33(1) says that such deposits shall be non-interest deposits. In the opinion of this Court if the Board is not in position to deliver the possession of the plot, dwelling units, flats/sites within a reasonable period then it must not be held entitled to retain that deposit as interest free. In a case where the money is kept in deposit, is used and utilised by the Board as its own money then on frustration of the contract they can not say that the said deposits would be deemed to be non-interest deposits. In a case where the money is kept in deposit, is used and utilised by the Board as its own money then on frustration of the contract they can not say that the said deposits would be deemed to be non-interest deposits. Regulation 33(2) says that an applicant to whom a dwelling unit/plot/site has been allotted will have to pay the balance amount of the disposal price within such period as may be determined by the Board and specified in the allotment order/letter. The money deposited under 33(2) undisputedly would not be earnest money because the Regulation itself says that the balance of the disposal price will have to be deposited in accordance with the terms of the allotment letter. 9. Regulation 33(3) says that if the applicant fails to pay the amount within the specified period the allotment shall be cancelled and a sum of money equal to 20% of the deposit shall be forfeited and the balance shall be refunded. This refers to a condition where because of non-compliance of the terms of the allotment order or non-action on the part of the allottee, the allotment is required to be cancelled. In such a case the Board in its discretion shall cancel the allotment, may forfeit 20% of the deposit and would refund the balance amount. This forfeiture of 20% is also to be made only from the amount deposited under 33(1) and not under 33(2). When it says that 20% of the deposit would be forfeited then the word deposit is to be found under 33(1) because under 33(2) the words used are disposal price and not deposit. The contention of the respondents that they are entitled to deduct 20% from the total amount deposited towards earnest money, the first deposit and towards the disposal price appears to be patently illegal and bad and rest contrary to their own Regulation 33(4) says that in case of such applicants who have not been allotted any dwelling unit/flat/site etc. The deposit specified in sub-regulation (1) shall be refunded. It appears that the respondents are belabouring under some misconception to deliver this abortive argument before this Court when they say that they would refund the money only with 5% interest. The deposit specified in sub-regulation (1) shall be refunded. It appears that the respondents are belabouring under some misconception to deliver this abortive argument before this Court when they say that they would refund the money only with 5% interest. 33(4) talks of a case where no allotments are made in favour a particular person, in such a case the amount has to be refunded and such amount, if is more than the amount of deposit, required to be deposited under Regulation 33(1), then it has to be paid with interest. 10. 33(5) says that the Board shall have the sole and exclusive right over the deposit till it is adjusted or refunded with or without deduction as provided in the said Regulations. Even 33(5) would not provide any helping hand to the respondent Board to say that they would simply pay 5% interest on the total amount deposited by the present petitioner. 11. A conjoint reading of Regulation 33 with Regulation 45 would make it clear that 5% simple interest will have to be paid on the earnest money and that rule does not apply to the other deposits. If the capping provided by Regulation 45 is not applicable in case of refund of other amount or interest, then in a case of frustration of contract or when the performance of the contract becomes an almost impossibility then the benefits drawn from the contract/agreement cannot be retained by the beneficiaries but he will be obliged and duty bound to return the benefits i.e. the amount so received and the interest in accordance with the practice of the commercial world. 12. Learned counsel for the Housing Board has referred to an order dated 17.2.1997 passed by the Apex Court in Civil Appeal No. 1566-1567 of 1997 to contend that statutory interest of 5% only can be allowed and nothing beyond that. In the opinion of this Court a fair understanding of Regulation 45 as observed above the restriction of Regulation 45 applies to the earnest deposit and not to other deposits. The judgment of the Supreme Court does not show that it was dealing with the deposit under earnest money head or under different heads. 13. In the opinion of this Court the amount of earnest money i.e. Rs. The judgment of the Supreme Court does not show that it was dealing with the deposit under earnest money head or under different heads. 13. In the opinion of this Court the amount of earnest money i.e. Rs. 2,0007- must be refunded by the Housing Board to the petitioner within a period of one month from today with 5% simple interest. 14. The other deposits made from time to time by the petitioner, should be refunded to him with 12% interest with a quarterly rest. This I am directing because Regulation 45 does not govern/cover interest or rate on such refund. At this stage learned counsel for the Housing Board has submitted that the petitioner has not given the details of the dates or of the amount so deposited, therefore, it is not possible for them to ascertain the dates and deposits and the same is likely to create some problems. In the opinion of this Court this misconceived argument should not unnecessarily detain this Court. When an order of allotment is made then according to the terms a separate file of every allottee is to be opened by the Board; whenever the deposits are made with the Board and the authorised banks then such informations are given by those banks to the Housing Board so that the amounts received on different dates from different banks are appropriated and adjusted in the proper accounts. When the petitioner says that he has deposited a sum of Rs. 97,518/- then the Board is obliged to make enquiries of its own and refund the money with interest. It would be noteworthy that at present the Board is not engaged in developing any of the properties. Its Officers, Accountants, Clerks and Peons all are working in their offices. If that is so then some useful, concrete and constructive work can be taken from all those persons. If the Housing Board cannot give the plots then at least it must show its honesty and refund the money to the persons, who relying upon the honesty of the Housing Board deposited the money and are still awaiting their dream houses. 15. The petition is allowed with the directions aforesaid with cost quantified at Rs. 5,000/- to be paid by the respondents to the petitioner.