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2013 DIGILAW 420 (HP)

Rana Wines v. State of H. P.

2013-05-14

A.M.Khanwilkar, R.B.Misra

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JUDGMENT A.M. Khanwilkar, CJ. (oral) Heard counsel for the parties. 2. The relief claimed in this petition is founded on the assertion that the Himachal Pradesh Tolls Act, 1975 does not authorize the State Government to levy interest in respect of unpaid amount before the specified period in the agreement; and for that reason, it is not open to the State Authorities to collect interest from the petitioner for the delayed payment. 3. Reliance is placed on Section 3-A of the Act of 1975 to buttress this submission. The said provision stipulates the parameters to be observed by the State Government for leasing of right to collect tolls. Notably, sub-section (3) thereof envisages that any sum including penalty, “interest” or costs of the proceedings, payable by the lessee under a lease granted under the sub-section (1), if not paid by the due date, shall be recoverable as arrears of land revenue. This provision, in our opinion, enables the State Authorities to proceed against the lessee for recovery of the unpaid amount as well as interest thereon as arrears of land revenue. Indisputably, this provision predicates that in a given case the lessee may be liable to pay penalty or interest. That is evident from the bare reading of sub-section (3) of Section 3-A, which reads thus:- “(3) The lessee shall be required to furnish such security for due fulfillment of the terms and conditions of the lease as the Commissioner may direct. Any sum (including penalty, interest or costs of the proceedings) payable by the lessee under a lease granted under sub-section (1), if not paid by the due date, shall be recoverable as arrears of land revenue.” (emphasis supplied) A priori, the argument under consideration is completely ill-advised. Moreso because, in the present case the agreement executed by the petitioner, Clause 19 thereof, unambiguously provides for liability of payment of interest for the delayed payment @ 15% per annum for the period of delay upto one month from the date of default of the amount and @ 20% per annum thereafter till the default continues. Moreso because, in the present case the agreement executed by the petitioner, Clause 19 thereof, unambiguously provides for liability of payment of interest for the delayed payment @ 15% per annum for the period of delay upto one month from the date of default of the amount and @ 20% per annum thereafter till the default continues. The amount demanded by the Excise & Taxation Commissioner, vide impugned communications dated 17.11.2012 and 24.12.2012 is in conformity with Clause 19 of the agreement, which reads thus:- “(19) In the event of his failure to pay an installment or part thereof the lease money by the due date— (a) the lessee shall pay interest on the unpaid amount @ 15% per annum for the period of delay up to one month from the date of default of the amount, and @ 20% per annum thereafter till the default continues; and (b) without prejudice to part (a) of this condition the Assistant Excise and Taxation Commissioner, Incharge of the district may subject to payment of the interest at the prescribed rates permit the lessee to deposit the amount of the installment or part thereof upto 20th of the next month except the last installment which shall be deposited by 10th day of the month following the month in which such installment was payable under condition No.3(17). Explanation:-- For the purpose of this condition, the date of payment shall be included in the period for which interest is to be charged.” (emphasis supplied) Notably, the challenge is not on the ground that the amount quantified by the State Authorities towards interest is not in conformity with Clause 19 of the Agreement. In that view of the matter, the petitioner cannot dispute the liability under the lease agreement. 4. Indeed, in this writ petition, the petitioner has challenged condition 19(a) referred to above, being ultra vires the Act. However, as aforesaid, in our opinion, Section 3-A the Act of 1975 itself recognizes that the lessee may have to pay penalty or interest, if the lease agreement so provides. As a result, the stipulation in the lease agreement, such as Clause 19(a), reproduced above, cannot be considered as ultra vires to the provisions of the Act of 1975. However, as aforesaid, in our opinion, Section 3-A the Act of 1975 itself recognizes that the lessee may have to pay penalty or interest, if the lease agreement so provides. As a result, the stipulation in the lease agreement, such as Clause 19(a), reproduced above, cannot be considered as ultra vires to the provisions of the Act of 1975. The petitioner is not in a position to point out any express provision in the Act of 1975, which prohibits the State from charging interest on the delayed payment by the lessee. 5. Counsel for the petitioner then relied on the decision reported in the case India Carbon Ltd. and Others Versus State of Assam, (1997) 6 SCC 4791 and J.K. Synthetics Limited Versus Commercial Taxes Officer, (1994) 4 SCC 2762. The observations found in these decisions will have to be understood in the context of the controversy involved therein, arising out of the interpretation to the provisions of the Central Sales Tax Act, which has no application to the fact situation of the present case, being governed by the express terms of Section 3A of the Act of 1975 read with the agreement executed between the parties. 6. The respondents invited our attention to the decision of another Division Bench of this Court in the case of Ram Lal Versus State of H.P. & Others decided on 27.12.2007 in CWP No.2160 of 2007 (Annexure R-1), which has also rejected similar challenge. 7. For reasons already recorded hitherto, the petition is dismissed being devoid of merits.