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2016 DIGILAW 3354 (ALL)

MOHD. ATIQUE v. STATE OF U. P.

2016-09-30

TARUN AGARWALA, VIPIN SINHA

body2016
JUDGMENT Hon’ble Tarun Agarwala, J.—In this group of petitions, the petitioners have challenged the demand notices for non-payment of the installment alongwith interest. For facility, the facts of Writ Petition Nos. 45579 of 2010 and 14756 of 2016 are being taken into consideration. 2. The petitioners contend that they belong to the economically weaker section (E.W.S.) of the society. For settlement of the E.W.S. of the society, the Uttar Pradesh Awas Evam Vikas Parishad launched a scheme known as Bhumi Vikas Evam Grihastha Yojna No. 7 in early eighties for allotment of small residential houses to the E.W.S. of the society. The allotments were made over a period of time from 1982 to 1998 and, in this fashion, approximately 2700 persons were given residential accommodation. 3. Under the scheme, the petitioners applied for allotment of E.W.S. residential houses. The respondents processed the papers and accepted the application of the petitioners and an allotment order was issued. A hire purchase agreement was entered into and possession of the house was given between the period 1982 to 1998. In the allotment letter as well as in the agreement, it was stipulated that the petitioners would be required to pay the installment over a period of 20 years in 240 installments. It was specifically stipulated that in case of late payment, penal interest would be charged @ 18% per annum. 4. The petitioners defaulted in payment of the installments, as a result demand notices were issued against which the petitioners have filed the present writ petition praying for the quashing of the demand. 5. The contention of the petitioners is basically that charging of penal interest is illegal, inasmuch as, by circulars dated 19.11.1994 and 25.3.1995 the respondents had waived the imposition of penal interest on late payment of the installments. It was thus contended that no penal interest could be charged. 6. In Writ Petition No. 14756 of 2016, it was further contended that under the Regulations known as Uttar Pradesh Awas Evam Vikas Parishad Bhookhandon Tatha Bhawnon Ke Panjikaran Evam Pradeshan Sambandhi Viniyam, 1979, the allotment of residential accommodation for E.W.S. could only be given to those persons who had an annual income of Rs. 8400/- or less and that installment @ Rs. 240/- per month was only payable whereas in the allotment order the installment is much more than Rs. 8400/- or less and that installment @ Rs. 240/- per month was only payable whereas in the allotment order the installment is much more than Rs. 240/- per month and if the installment is calculated on a yearly basis, it would be more than Rs. 8400/- per annum. It was thus contended that the terms and conditions contained in the allotment order and in the agreement was void and not binding upon the petitioners. It was contended that the protests in this regard was given to the authorities to revise the rate of installments, which was not done and, accordingly, the installments were not paid. The petitioners have also contended that imposition of penal interest was against the circulars issued by the respondents. 7. We have heard Sri O.P.Singh, the learned Senior Counsel assisted by Sri R.K.Gupta and Sri Hari Om for the petitioners as well as Sri Madan Mohan Chaurasiya, Sri Srikant, Sri Navneet Chandra Tripathi, Sri Anand Prakash Srivastava, Sri Sunil Kumar Misra and Sri Rana, the learned counsel appearing for the U.P.Awas Evam Vikas Parishad. 8. Having heard the learned counsel for the parties, we find that under the allotment letter and the agreement that was entered with U.P. Avas Evam Vikas Parishad for purchasing the houses under the self financing scheme or hire purchase scheme, the petitioners were required to pay the amount as per the installment fixed. It was clearly stipulated that if the installment was not paid within the stipulated period penal interest would be charged @ 18% per annum. It was also indicated that if payments are not made then eviction proceeding could also be initiated. 9. The counter-affidavit filed in various petitions reveals an interesting fact. Only a few of the petitioners have paid some installments and the majority of the petitioners have not paid a single installment from the time possession of the residential house was given. Possession has been given between the period 1982 to 1998 and till date installment has not been paid barring a few who have paid the amount as per the interim order of the Court. 10. The demand letters issued by the respondents requiring the petitioners to deposit the price of the house alongwith interest is as per the terms and conditions of the allotment order of the agreement entered between them. 10. The demand letters issued by the respondents requiring the petitioners to deposit the price of the house alongwith interest is as per the terms and conditions of the allotment order of the agreement entered between them. We find that the relationship between the petitioners and the Parishad is governed by a non-statutory contract. 11. There is a line of decisions to the effect that where a contract is entered between the State and the person aggrieved is a non-statutory contract in which case the rights are governed only by the terms of the contract for which no writ could be issued under Article 226 of the Constitution of India nor can the Writ Court compel the authority to remedy the breach of contract, if any, as held by this Court in Radha Krishna Agarwal v. State of Bihar, AIR 1977 SC 1496 , Premji Bhai Parmar v. Delhi Development Authority, AIR 1980 SC 738 and DFO v. Vishwanath Tea Company Ltd., AIR 1981 SC 1368 . 12. In Bareilly Development Authority v. Ajai Pal Singh, AIR 1989 SC 1076 , the Supreme Court held that even if the Bareilly Development Authority had the trappings of a State or came under the category of “other authority” for the purpose of Article 12 of the Constitution while determining the price of the house/flat constructed by it and the rate of monthly installments to be paid, the authority or its agent after entering into the field of ordinary contract acts purely in its executive capacity, which determines the rights and obligations of the parties inter-se. Such relationship between the parties was governed by a non-statutory contract. 13. In the light of the aforesaid, we are of the opinion that the writ petitions are not maintainable. 14. In Tarun Kumar Chabra v. U.P. Avas Evam Vikash Parishad, Lucknow, 1990(2) UPLBEC 1330 , a similar controversy arose with the Avas Evam Vikas Parishad with regard to the demand of 18% additional interest for the period of delay in making payment of installment. A Division Bench of this Court held that writ petition was not maintainable since the contract entered between the parties were non-statutory. The said decision is fully applicable in the instant case. 15. A Division Bench of this Court held that writ petition was not maintainable since the contract entered between the parties were non-statutory. The said decision is fully applicable in the instant case. 15. In Punjab Urban Planning and Development Authority and others v. Raghunath Gupta, 2012 (8) SCC 1997, the Supreme Court held that once the offer was accepted and a condition was imposed, the authorities are bound by the terms and conditions and are liable to pay interest, including penal interest. 16. In Writ Petition No. 8916 of 2011, Prem Lata v. State of U.P. and another, decided on 28.2.2011, relating to the same controversy involved in the present writ petition with regard to allotment of the house under the E.W.S. scheme, the Court declined to interfere in the demand notice holding : “The next issue is whether this Court can interfere in the award of penal interest. Penal interest is part of the letter of allotment and terms and conditions by which allotment was done. It is the realm of the original allottee on the one hand and the respondents on the other. In such matters, Court cannot intervene and impose some other conditions to create another contract. The contract, terms and condition under which it was entered, has to be recognized by this Court, unless there is a power in the respondents to waive any amount. If there be any such power, then it is open to the person to apply. At any rate that cannot be subject-matter of intervention by this Court.” 17. The contention of the petitioners, that penal interest was waived by the respondents by circular dated 19.11.1994 and 25.3.1995, is patently misconceived. We find that the said circulars were modified by circular dated 22.7.1996, which provided that additional interest @ 3.5% per annum would be charged in addition to the simple interest. By another circular dated 22.9.1999, the Joint Housing Commissioner further clarified that the circular dated 22.7.1996 superseded the Government Orders dated 19.11.1994 and 25.11.1995 and that the earlier circulars of 1994 and 1995 became non-est. 18. In the light of the aforesaid, we are of the opinion that the contention of the petitioners that no penal interest was payable, is patently erroneous. 18. In the light of the aforesaid, we are of the opinion that the contention of the petitioners that no penal interest was payable, is patently erroneous. The petitioners are liable to pay penal interest as per the terms and conditions of the allotment letter and agreement, which is deemed to have been modified by circular dated 27.7.1996. 19. The contention of the petitioners, that the installment and the rate of installment fixed in the allotment letter is in violation of the Regulations of 1979, is patently misconceived and cannot be considered at this belated stage. Admittedly, the petitioners accepted the allotment order and thereafter entered into an agreement and was given possession. Majority of the petitioners have not paid a single paisa since getting possession of the house. The petitioners have violated the terms and conditions of the allotment orders and the agreement with impunity and cannot turn around after 20 years, contending that the conditions so fixed in the allotment letter is violative of the Regulations of 1979. 20. We are of the opinion that once an agreement has been executed, the rights and obligations are governed only by the terms of the contract and not by the Regulations. The authorities cannot be compelled to remedy the breach of contract, if any, in terms of the Regulations. The decisions cited by the learned counsel for the petitioner in Anupam Sari Centre v. Collector, Padrauna, Laws (All)-1998-11-69, Iqbal Naseer Usmani v. Central Bank of India, 2006(2) ADJ 603 (SC), Mange Ram and another v. State of U.P. and others, 2010(4) ADJ 390 (DB), Mirza Javed Murtaza v. U.P. Financial Corporation Kanpur, 1983 AIR (All)-0-234, Mahrajwa v. State of U.P., 2013(1) ADJ 426 (FB), Writ Petition No. 1933 of 2003 Hraidesh Kumar v. State of U.P. and others, decided on 14.1.2013 and Corporation Bank v. D.S. Gowda, 1994-SCC-5-213, are not at all applicable to the facts and circumstances of the case and are clearly distinguishable. 21. In the light of the aforesaid, we do not find any error in the impugned demand notices. The demand notices do not suffer from any error of law. 22. All the writ petitions fail and are dismissed.