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2014 DIGILAW 2700 (MAD)

L. Adaikkalasamy v. Secretary Tamil Nadu Housing & Urban Development

2014-08-19

T.S.SIVAGNANAM

body2014
Judgment : 1. Since the issue involved in both the writ petitions are identical and the petitioners are same individuals, both the writ petitions were tagged together, heard and disposed of by this common order. 2. The petitioners were allottees of ready built houses promoted by the respondent Tamil Nadu Housing Board under the Scheme called as Ellis Nagar Scheme. They were allotted the houses bearing Nos.RH176, RH175 and RH172, on 27.05.1991, 04.01.1991 and 04.01.1991 respectively and agreements were entered into by the petitioners with the respondent Housing Board on 18.06.1991, 25.04.1991 and 24.01.1991 respectively. The houses, which were allotted in favour of the petitioners are row type houses including land, building and amenities and the tentative cost was fixed at Rs.1,73,000/-per house. In the said orders of allotment as well as the lease-cum-sale agreements, in respect of the houses RH175 and RH172, the western boundary has been shown as road, measuring 30 feet and in the agreement in respect of the house bearing No.RH176, the western boundary is shown as road, measuring 40 feet. All the three petitioners purchased the houses under outright purchase scheme. As per the terms and conditions of the allotment, the allotment was subject to the rules and conditions prescribed in the application form, prospectus and lease-cum-sale agreement for the houses and on production of nativity, income and age proof certificate, community certificate, if reservation is claimed, and declaration Form Nos.I and II. The selling price of the houses was tentatively fixed at Rs.1,73,000/- and the petitioners/allottees in respect of houses bearing Nos.RH175 and RH 172 were required to pay the full cost and the petitioner/allottee in respect of house bearing No.RH176 was required to pay a sum of Rs.68,000/-as initial deposit, within a period of 21 days from the date of receipt of the order of allotment or else the allotment made in their favour would be cancelled without any further intimation. The petitioners were directed to execute lease-cum-sale agreements in non-judicial stamp papers before taking over the houses. As per the terms of agreement, the cost of houses is inclusive of the extent of the land on which the houses have been constructed. The petitioners were Government employees and therefore they applied for house building advance to their respective employers immediately after the allotment during 1991. 3. As per the terms of agreement, the cost of houses is inclusive of the extent of the land on which the houses have been constructed. The petitioners were Government employees and therefore they applied for house building advance to their respective employers immediately after the allotment during 1991. 3. The problem arose because these three petitioners and four others did not have access to their houses as the lands abutting the entrance of the house was not acquired by the Housing Board and the owners of the said land prevented the petitioners to have access. This was realized by the petitioners much after the order of allotment and from 1994 the petitioners have been continuously representing to the Board to initiate action to acquire the lands at the cost of the Board and provide 30 feet road as stated in the lease-cum-sale agreement executed with the petitioners. Further, it is stated that the allotment itself is along with the ready built houses and lack of access amounts to lack of basic amenities and the allotment itself did not fructify in a proper manner so as to demand any payment from the petitioners. Representations were periodically made by the petitioners and this has not been disputed by the respondents. 4. On 29.08.1996, the Executive Engineer and Administrative Officer of the Madurai Special Division informed the petitioners that the required extent of land will be acquired and road will be formed. This assurance was not adhered to for more than two years. The petitioners made representations in 1998, 1999 and on 04.09.2000. On 11.12.2000, the Executive Engineer and Administrative Officer of the Madurai Special Division informed the petitioner that land acquisition proceedings for the purpose of forming road in front of the houses is in progress. Once again the petitioner and other four residents submitted representations on 23.12.2000 before the Executive Engineer and Administrative Officer. The Housing Board addressed the Commissioner, Madurai Corporation, on 08.03.2001, stating that the land acquisition proceedings have been initiated and 4(1) notification has been issued and therefore water line could be drawn to the petitioners' houses. The problem arose that in spite of such order being passed, the water line could not be drawn since the land did not belong to the Board as they were not acquired. The problem arose that in spite of such order being passed, the water line could not be drawn since the land did not belong to the Board as they were not acquired. This was brought to the knowledge of the Executive Engineer and Administrative Officer by the representations dated 09.08.2001, 27.06.2004 and 16.07.2007. Ultimately, the Executive Engineer by Proceedings, dated 23.07.2007 recommended to the Managing Director of the Housing Board to take immediate steps to acquire the land to form 40 feet road and also pointed out that delay in acquisition proceedings will increase the cost of acquisition. Thereafter also, nothing happened and the petitioners submitted one more representation on 25.03.2009. Since the petitioners' representation was put into cold storage, they sought for information under Right to Information Act and secured information vide reply, dated 21.04.2009. Even thereafter, no appreciable action was taken and the petitioners submitted several representation including the representation, dated 27.11.2009 to the Secretary to Government, Tamil Nadu Housing and Urban Development Department. Even such representation did not evoke any response and the petitioners submitted further representations, dated 09.02.2010 and 06.08.2010. 5. Having left with no other option, the petitioners moved this Court by filing the writ petition in W.P.(MD) No.2443 of 2011, wherein an interim direction was granted by this Court on 11.01.2012 directing the Housing Board to consider and dispose of the representation, dated 29.06.2011, made by the respondents 5 and 6, who are the land owners of the land in front of the petitioners' houses, who had initially resisted the petitioners from entering into their property. The said representation was to the effect that the respondents 5 and 6 agreed to give the land abutting the entrance of the houses free of cost to the Board and road could be formed so that the petitioners can have access to their houses and reside in the same. Pursuant to such interim direction issued, there were several internal correspondence between the officials and the Board and the petitioners were called upon to attend personal hearing on 19.03.2012. Pursuant to such interim direction issued, there were several internal correspondence between the officials and the Board and the petitioners were called upon to attend personal hearing on 19.03.2012. During the course of personal hearing, the petitioners requested for four issues to be considered namely (i) to accept the gift deed given by the private respondents and form the road with the said land, (ii) provide proper road, street lights, drainage facility etc., (iii) not to levy any interest termed as 'A' and 'B' interest for the delay of 21 years and (iv) execute sale deed in their favour without demanding any further amount. This agreement was also reduced into writing on the date of personal hearing. Ultimately, by the impugned proceedings, dated 22.03.2012, the respondent Board accepted the request made by the petitioners sofar as issue Nos.(i) and (ii) and sofar as issue No. (iii) is concerned, the Board informed the petitioners that they are liable to pay interest, since no prayer has been made in W.P.(MD) No.2443 of 2011 to waive the interest. This order, dated 22.03.2012, rejecting claim for waiver of interest has been challenged in W.P.(MD) No.14310 of 2013. 6. Heard Mr.C.Arulvadivel @ Sekar, learned counsel for the petitioners, Mr.S.Satheeshkumar, learned Additional Government Pleader for the Special Tahsildar (Land Acquisition), Mr.S.Nagarajan, learned counsel for the Housing Board, Mr.R.Murali, learned counsel for Madurai Corporation and Mr.K.Govindarajan, learned counsel for the private respondents and perused the materials placed on record. 7. The issue involved in both the writ petitions lies in a very narrow compass. The facts are not in dispute and the impugned order, dated 22.03.2012, is not questioned in it's entirety. The petitioners' grievance is regarding the demand of interest by the respondent Board for the initial delay in payment from the date of allotment till the date of sanction of house building advance and paid by the Government of Tamil Nadu and interest for the further period on the interest payable. This has been termed as 'A' and 'B' interests. 8. This has been termed as 'A' and 'B' interests. 8. The learned counsel for the petitioners, after elaborately referring to the facts, brought to the notice of this Court that the petitioners have been driven from pillar to post from 1991 and only in 2012 the Board acceded to the request made by the petitioners that too because the land owners agreed to donate the land free of cost to the Housing Board realizing the plight of the petitioners, since from 1991 the petitioners have not been able to enjoy their property fully since the frontage itself was blocked as the land was not acquired by the Housing Board. It is not in dispute that all the petitioners have paid the entire land cost as per the tentative cost fixed. The claim for the interest made by the respondent Board is based on G.O.Ms.No.174, Housing and Urban Development Department, dated 07.02.1991. In the said Government Order, the Chairman and Managing Director of the Tamil Nadu Housing Board was requested to collect interest from the Government servant allottees at the prevailing rate on 1/3rd or 1/4th cost of the flat/house and interest on the monthly installment alone from the date of ready for occupation, till the date of sanction of house building advance. Further, the procedure should be adopted in respect of all allotments made on or before 01.01.1985. Further, it was ordered that interest should be calculated, in terms of the above procedure and the excess amount paid by the allottee, if any, should be adjusted towards future interest to be paid by the allottee, till the sanction of house building advance or towards the balance cost of the flat/house. Further, the excess amount paid by the allottee should be refunded if the entire cost of the flat/house has been paid in full, as the case may be. 9. By relying upon the said Government Order, the learned counsel for the Housing Board submitted that the petitioners having failed to pay the initial deposit amount and having defaulted in payment of interest, as per the said Government Order, till the sanction of house building advance, the Board was entitled to levy interest. This interest is called as 'A' interest and the same having remained unpaid, the Board is entitled to demand and collect interest on the 'A' interest, which is termed as 'B' interest. 10. This interest is called as 'A' interest and the same having remained unpaid, the Board is entitled to demand and collect interest on the 'A' interest, which is termed as 'B' interest. 10. After perusing the materials placed on record, this Court is of the view that this is a classical case of arbitrary exercise of power by the respondent Board. It is not in dispute that the petitioners did not have access to the houses allotted to them. As a result of which, the houses were not ready for occupation on the date of allotment. Therefore, the petitioners cannot be treated on par with the other allottees, who have also availed house building advance from the Government. From 1994, the petitioners have been persistently following up the matter. The Executive Engineer probably sympathized with the plight of the petitioners and made recommendations from 2007. In fact, the Executive Engineer, while addressing the Managing Director, on 23.07.2007, clearly stated that acquisition has to be made to form road to provide access for the houses and delay would increase the cost of acquisition. In spite of this specific recommendation by the Executive Engineer, the entire matter was put into cold storage and no action was initiated by the respondent Board on their own accord. Therefore, the action of the respondent Board was wholly arbitrary and unreasonable in refusing to provide access to a property alloted by the Board to a purchaser, who is also a Government servant. If only it was a private promoter, then the situation would have been different and years would have passed after the allottees would have succeeded in their attempt to obtain fair compensation for deficiency of service. The respondent Board being a limb of the Government put the matter in cold storage and driven the allottees from pillar to post from 1991. The officials at the higher level failed to take any action and the recommendations made by the field level officers as well as the Executive Engineer of the Madurai Special Division were not taken note off and no proceedings were initiated on their own accord. When the petitioners approached this Court by filing a writ petition in W.P.(MD) No.2443 of 2011 as saviors the original land owners, who were hitherto resisting the petitioners entry to their property, agreed to donate the land to an extent of 20 feet to the Housing Board. When the petitioners approached this Court by filing a writ petition in W.P.(MD) No.2443 of 2011 as saviors the original land owners, who were hitherto resisting the petitioners entry to their property, agreed to donate the land to an extent of 20 feet to the Housing Board. Those two persons are the respondents 5 and 6 in W.P.(MD) No.2443 of 2011. With this proposal, the petitioners approached the respondent Board to consider the same and no action was initiated by the Board in spite of the fact that the land owners were ready to donate the land and if the same is accepted no additional cost would be incurred for the Board for acquisition of land. Since this was not taken serious note of, this Court issued an interim direction on 11.01.2012 and only thereafter the official respondents rose from their deep slumber and afforded an opportunity of personal hearing to the petitioners after about three months after the interim direction was issued by this Court. 11. In the said discussion, certain conditions were placed and the respondent Board has accepted the condition to form 20 feet road by accepting the land donated by the private respondents and also to provide other facilities such as formation of road, laying electricity polls, drainage etc. As regards the claim for interest, in the impugned order the only reason given is by stating that as there was no prayer made by the petitioner in W.P.(MD) No.2443 of 2011 for waiver of interest. However, to this extent, the order of rejection is perverse, since the claim has not been addressed on merits. In the counter affidavit, the respondent Board relies on G.O.Ms.No.174, dated 07.02.1991 for demand of interest. As noticed above, by virtue of the said Government Order, the respondent Board was requested to collect interest from Government servant allottees at the prevailing rate on 1/3rd or 1/4th cost of the flat/house, if the same is ready for occupation since the allottees would have occupied the houses and enjoyed the amenities. Therefore, till the housing building advance was sanctioned by the Government, the allottees should be directed to pay interest and which could be subsequently adjusted and if any excess amount paid could be refunded. Therefore, the justification to collect interest would arise only if the property is ready for occupation. 12. Therefore, till the housing building advance was sanctioned by the Government, the allottees should be directed to pay interest and which could be subsequently adjusted and if any excess amount paid could be refunded. Therefore, the justification to collect interest would arise only if the property is ready for occupation. 12. In the instant case, admittedly, the property in question was not ready for occupation, since it did not have access through 30 feet road as shown in the schedule to the agreement executed by the Board. The learned counsel for the petitioners brought to the notice of this Court that the front portion of the houses namely balcony area and gate were on the property owned by the private respondents and therefore the petitioners/allottees cannot enter into their houses through the said property unless and until they agreed to donate and all along they objected and prevented the access and only during 2011 they agreed to give 20 feet of land so that the petitioners can have a road access. The net result is that though the petitioners were allotted the extent of 1,344 sq.ft., based on which the selling price was calculated at Rs.1,73,000/-, now, the petitioners would be given only an extent of 937 sq.ft., in the case of house No.RH175, 912 sq.ft., in the case of house No.RH172 and 945 sq.ft., in the case of house No.RH176. Therefore, there is a reduction in the total extent of the property itself. Hence, if the total extent is reduced, then the Board is required to return the sale consideration proportionate to the reduced extent and to pay interest to the petitioners on the said amount, since the petitioners are to repay the house building advance together with interest to the Government. Therefore, the Board cannot view the matter from their point of view alone, but the plight of the allottees also ought to have been appreciated. Thus, when the property was not ready for occupation as it did not have any road access and from 1991 till the date of impugned order there is no legally authorized access to the property, this Court has no hesitation to hold that the property was not ready for occupation and for the first time it could be said to be ready for occupation because of the consent given by the private respondents Mr.M.V.Karuppiah and Mr.P.Ramesh. Hence, the respondent Board cannot rely upon the G.O.Ms.No.174, dated 07.02.1991 and the question of demanding or levying interest does not arise. If the claim made by the respondent Board is to be accepted, then the Board has to refund the amount proportionate to the extent of the property, which the petitioners would be loosing, since the selling price was calculated based on the total extent and this amount also should carry interest and this Court is of prima facie view that the interest is payable to the petitioners at market rate for all the pain and sufferings the petitioners have gone through for all these years. However, since this Court is of the view that the petitioners are not liable to pay interest and they are agreed to take the lesser extent of land, to put a finality to the issue both the writ petitions are allowed and the impugned letter, dated 22.03.2012 issued by the second respondent Chairman-cum- Managing Director, Tamil Nadu Housing Board, is set aside, in sofar as it rejects the claim for waiver of interest and the following directions are issued: i. For all the above reasons, the respondent Board is restraining from demanding any interest from the petitioners either 'A' or 'B' interest in the light of the fact that the houses were not ready for occupation at the time of allotment as required, which is a condition precedent for invoking G.O.Ms.No.174, dated 07.02.1991; ii. The respondent Board is directed to form road, provide street lights and other facilities as provided in the other areas of the same Ellis Nagar Scheme at their cost and thereafter hand over the same to the Madurai Corporation. Merely because the other roads had been taken over by the Madurai Corporation, it does not mean that Corporation has to lay the road. The promoter of the scheme is the Housing Board and they have to form the road and this road could not be formed earlier because the land was not acquired. Since the gift deed has already been executed during 2012 by the private respondents, the respondent Board shall develop the road, provide street lights and other facilities as provided in the Ellis Nagar Scheme, within a period of three months from the date of receipt of the copy of this Order. iii. Since the gift deed has already been executed during 2012 by the private respondents, the respondent Board shall develop the road, provide street lights and other facilities as provided in the Ellis Nagar Scheme, within a period of three months from the date of receipt of the copy of this Order. iii. The respondent Board shall execute and register sale deeds in favour of the petitioners without demanding any interest except charges, which are payable for the registration of the sale deed for the extent of the property, which is now available, within a period of eight weeks from the date of receipt of a copy of this Order. The petitioners cannot claim that they are entitled to total extent of the property as per the letter of allotment nor can they seek for refund of proportionate sale consideration. iv. This Order shall put an end to all controversies between the parties and shall be full and final settlement of the claims made against each other. 13. In the result, both the writ petitions are allowed to the extent indicated and directions issued as above. No costs.