JUDGMENT : AJIT KUMAR, J. 1. Heard Sri Anurag Khanna, learned Senior Advocate assisted by Sri Maya Shanker Srivastava, Ms. Himadri Batra, Sri Hridesh Batra, Sri Raghav Dev Gaur, Ms. Gunjan Jadwani and Sri Shivam Shukla, learned counsels for the petitioner, Sri Ajit Kumar Singh, learned Additional Advocate General assisted by Sri Alok Kumar Singh, learned Standing Counsel for the State and perused the record. 2. This petition has been filed under Article 226 of the Constitution of India seeking inter-alia following relief: "(i) Issue a writ, order or direction partly quashing the demand notice dated 27.01.2012 (Annexure No. 12) in so far as it reduces the discount from 20% to 10% on the one time deposit of the amount for grant of freehold rights in the petitioner's land and also the demand of 15% annual simple interest from 26.06.2008 to the date of payment as per the aforementioned demand note dated 27.01.2012 being contrary to the freehold policy prevailing at the time of the application of the petitioner. (ii) Issue a writ, order or direction in the nature of mandamus directing the respondents to give 20% discount on the one time amount to be deposited by the petitioner towards the balance of the freehold amount and not to charge any interest thereon and recalculate the demand notice as per the freehold policy prevailing at the time of application of the petitioner and issue the fresh demand notice accordingly. (iii) Issue a writ, order or direction in the nature of mandamus directing the respondents to execute the freehold deed in favour of the petitioner in respect of Nazul Plot No. 147/2 Civil Station, Mauza Naseebpur Bakhtiyara, Allahabad (Having an area 1 acre & 2432 Sq. Yards) after accepting the sum of Rs. 1,33,76,676.00." 3. During the pendency of this writ petition, while counter and rejoinder affidavits were exchanged, the subsequent event that has taken place is that the respondent authorities namely the second respondent granted freehold rights in respect of land with plot no. 147/2 situate on Civil Station, Mauja Nazirpur Bakhtiyar, Allahabad measuring 1 acre and 2413 square yards. The freehold deed having got executed in favour of the petitioner on 23.11.2012 the third prayer in the writ petition (supra) got rendered infructuous. 147/2 situate on Civil Station, Mauja Nazirpur Bakhtiyar, Allahabad measuring 1 acre and 2413 square yards. The freehold deed having got executed in favour of the petitioner on 23.11.2012 the third prayer in the writ petition (supra) got rendered infructuous. In so far as the second prayer regarding 20% discount, a claim set by the petitioner, is concerned, it has come on record that freehold deed was executed in favour of the petitioner only in the year 2012 and therefore, the law as prevailing at the time of grant of freehold rights is to be considered in view of Full Bench decision of this Court in Anand Kumar Sharma v. State of U.P. and others 2014 (2) ADJ 742 . 4. Accordingly, since this discount, as claimed by the petitioner, is not available under the prevalent freehold grant policy in the year 2012, the second prayer cannot be granted to the petitioner. 5. Learned counsel for the petitioner has also very fairly conceded that so far as the second and third prayer are concerned, no such relief is being claimed and the writ petition is now confined to the prayer no. 1 only. 6. Briefly stated facts are that petitioner along with his mother Sheela Kochhar and elder brother Tarun Kochhar are the co-lessees of plot in question and the last renewal of the said lease executed initially on 01.12.1988 was extended by the Governor of U.P. on 30.06.1991 which was got registered on 25.07.1991. In view of the then prevalent policy to grant freehold rights in respect of Nazul land under certain terms and conditions, the petitioner applied with the consent of his other co-lessee for freehold rights in respect of plot in question on 26.06.2008, depositing Rs. 60,80,110/- as 25% of the said amount on assessed valuation as per the then circle rate enforced in respect of the residential land situate at Clive Road, Allahabad. 7. There is no quarrel about such application being made and the amount being submitted with the main branch of State Bank of India in the Government Treasury on 24.06.2008. However, thereafter, the authorities did not take any action and accordingly the matter of grant of freehold rights in respect of land in question in favour of the petitioner remained pending for years together. However, thereafter, the authorities did not take any action and accordingly the matter of grant of freehold rights in respect of land in question in favour of the petitioner remained pending for years together. In supersession to all the earlier government orders the State Government issued another Government Order on 28.09.2011 for granting freehold rights in respect of pending matters vide clause IV of the said Government Order, which is reproduced hereunder: ^^4- utwy Hkwfe dks Qzh& gksYM fd;s tkus gsrq yfEcr vkosnu i=ks dk fuLrkj.k & 'kklu ds laKku es vk;k gS fd utwy Hkwfe dks Qzh & gksYM fd;s tkus gsrq utwy uhfr ds vuqlkj iV~Vsnkj vFkok mlds fof/kd mRrjkf/kdkjh vFkok dszrk vFkok ukfeuh }kjk 25 izfr'kr LoewY;kadu /kujkf/k Vsªtjh pkyku ds ek/;e ls tek dj vkosnu fd;k x;k vkSj mlds i'pkr utwy Hkwfe dks Qzh & gksYM fd;s tkus ds laca/k es dksbZ #fp ugh yh xbZ rFkk yEcs le; ds ckn vkosnd }kjk vkosnu djus dh frfFk dks izHkkoh lfdZy jsV ij ekax i= ¼fMekUM uksV½ fuxZr fd;s tkus dk vuqjks/k fd;k tk jgk gSA dfi; ekeyks es ;g Hkh laKku es vk;k fd ftys Lrj ls mDr vkosnu i=ks ij losZ vkfn es vizR;kf'kr foyEc fd;k x;k ;k fdlh fookn dh fLFkfr ds dkj.k vkosnu i= ij ekax i= ¼fMekUM uksV½ fuxZr ugh fd;k x;kA ,sls ekeyksa es mDr yfEcr vkosnu i=ksa dk fuEuor~ fuLrkj.k fd;k tk;sxk & 1- iV~Vkxr utwy Hkwfe dks Qzh & gksYM fd;s tkus gsrq yfEcr lHkh vkosnu i=ks dk fuLrkj.k 06 ekg ds vUnj dj fn;k tk;sA ,sls yfEcr vkosnu i=] ftueas vkosnudrkZ }kjk lHkh vkSipkfjdrk;sa iw.kZ dj yh x;h gksa] dk fuLrkj.k ;fn mi;qZDr 6 ekg dh vof/k esa lEcaf/kr vf/kdkjh }kjk ugh fd;k tkrk gS rks lEcaf/kr vf/kdkjh dk mRrjnkf;Ro fu/kkZfjr djrs gq, dMh dk;Zokgh dh tk;sxhA mDr vof/k ds mijkUr ,sls yfEcr vkosnu i= Lor% fujLr le>s tk;saxs vkSj ,sls vkosnu i=ksa ftuds lkFk Vsªtjh pkyku ds ek/;e ls tek dh x;h 25 izfr'kr LoewY;kadu dh /kujkf'k ds lkFk vkosnu fd;k x;k gS] es vkosnu dh frfFk dks izHkkoh utwy uhfr vkSj izHkkoh lfdZy jsV ij Qzh & gksYM dh dk;Zokgh dh tk;sxh rFkk vo'ks"k 75 izfr'kr /kujkf'k Hkqxrku dh frfFk rd 15 izfr'kr okf"kZd lk/kkj.k C;kt ds lkFk tek dh tk;sxhA 2- iV~Vkxr utwy Hkwfe dks Qzh&gksYM fd;s tkus gsrq vc izHkkoh utwy uhfr ds vUrxZRk tks Hkh vkosnu i= fn;s tk;sxsa] os dsoy 01 o"kZ ds fy, ekU; gksaxs vkSj 01 o"kZ dh vof/k O;rhr gks tkus ij ,sls vkosnu i= LoRk% fujLr le>s tk;sxs vkSj l{ke izkf/kdkjh }kjk vkosnu dks LoewY;kadu dh /kujkf'k okil dj nh tk;sxhA bl ,d o"kZ dh vof/k es vkosnu dh frfFk dks ykxw lfdZy jsV ds vk/kkj ij fMekaM uksV fn;k tk;sA "4. Disposal of pending applications seeking conversion of nazul land into free hold:- It has come into notice of the Government that an application seeking conversion of nazul land into free hold was moved having deposited 25 percent of self assessed amount through the treasury challan, as required under the nazul policy in case of lease holder or his legal successor or purchaser or nominee; and thereafter, no interest was shown towards conversion of the nazul land into free hold; and after a long time, a demand note is being requested to be issued at the circle rate effective on the date of moving the application. In some cases, it has also come into notice that unexpected delay was caused at the district level in conducting survey etc. on the aforesaid applications; or a dispute having arisen, even demand note was not issued consequent upon such application. In such matters, the aforesaid pending application shall be disposed of in the following manner: - 1. For conversion of the nazul land under lease into free hold, all the pending applications shall be disposed of within 06 months. If such pending applications, wherein all formalities have been fulfilled by the applicant, are not disposed of by the officer concerned within the aforesaid period of 06 months, then stern action shall be taken while fixing the accountability of the officer concerned. After the expiry of the aforesaid period, such pending applications shall be taken to have been cancelled by themselves; and on those applications, with which 25 percent self assessed amounts have been deposited though treasury challans, processes for conversion into free hold shall under the nazul policy be taken at effective circle rate, and remaining 75 percent amounts shall be deposited with 15 percent interest until deposition. 2. All those applications that shall be moved under the currently effective nazul policy for the conversion of the leased nazul land into free hold, shall be valid only for 01 year; and after the expiry of 01 year, such applications shall be taken to have been cancelled by themselves, and applications with self assessed amounts shall be returned by the competent authority. In this period of one year, demand note be issued on the basis of circle rate effective on the date of submission of the application. (Translated by Court) 8. In this period of one year, demand note be issued on the basis of circle rate effective on the date of submission of the application. (Translated by Court) 8. Pursuant to the aforesaid Government Order, the authorities took up the matter of grant of freehold rights in respect of the petitioner whose application was pending since 2008, obviously for no fault on his part. Consequently, on 22.01.2012 demand notice was issued to the petitioner for depositing remaining amount of 40% of the assessed valuation as per circle rate then prevalent i.e. in the year 2008 calculated out to be Rs. 1,58,08,723.40 paise. However, at the same time the demand notice also contained demand of simple interest @ 15% over and above the due amount which is assessed as Rs. 1,58,08,723.40 paise w.e.f. 2008. The petitioner though deposited the amount of Rs. 1,58,08,723.40 paise but challenged the part of demand notice in so far as it requires deposit of simple interest of 15% and also reducing the amount of execution from 20% to 10%. 9. While entertaining the writ petition, this Court passed following order on 05.04.2012: "Mr. Keshari Nath Tripathi, learned Senior Advocate assisted by Mr. Anurag Khanna, learned counsel appearing for the petitioner contended that the application for freehold along with challan of 25% of the amount was deposited in pursuance of earlier Government Order. The impugned demand notice is issued in terms of subsequent Government Order depriving the petitioner from the benefit of rebate and claiming interest of 15% not from the date of Government Order but retrospectively. In our view when the petitioner wants to deposit the entire sum of Rs. 1,58,08,723.40 within two weeks from the date of obtaining the certified copy of this order and also wants to secure respondents' demand of 15% interest by way of bank guarantee, we do not find any reason as to why no order will be passed to protect the interest of the petitioner in connection with demand notice dated 27.1.2012. Therefore, subject to deposit of the sum and giving bank guarantee, the demand notice dated 27.1.2012 will be kept in abeyance till further order or orders to be passed by this Court. The matter will be heard upon exchange of affidavits. Therefore, counter affidavit will be filed by 16.4.2012. Rejoinder affidavit, if any, will be filed by 23.4.2012. The matter will appear on 26.4.2012." 10. The matter will be heard upon exchange of affidavits. Therefore, counter affidavit will be filed by 16.4.2012. Rejoinder affidavit, if any, will be filed by 23.4.2012. The matter will appear on 26.4.2012." 10. In compliance of the interim order of this Court dated 05.04.2012, the petitioner deposited the amount of Rs. 1,58,08,723.40 paise and also submitted bank guarantee as against 15% interest raised under the demand notice. On the basis of compliance as made by the petitioner of the interim order of this Court, except for interest part, the entire demand raised in the demand notice dated 27.01.2012 stood satisfied and so the second respondent executed freehold deed in favour of the petitioner on 23.11.2012. However, in the freehold deed it has also come to be recorded in following terms: ^^;g QzhgksYM foys[k flfoy felysfu;l fjV isVh'ku uEcj 16965 lu~ 2012 ¼ujs'k dkspj cuke LVsV vkQ mRrj izns'k vkfn½ es ikfjr gksus okys vfUre fu.kZ; ds v/khu gksxkA QzhgksYM ds fy, dszrk us LoewY;kadu dh /kujkf'k #i;s 60]80]110-00 ¼'kCnks es #i;s lkB yk[k vLlh gtkj ,d lkS nl ek=½ Vsªtjh pkyku la[;k 001 fnukad 24-6-2008 }kjk rFkk ekaxi= dh /kujkf'k #i;s 1]58]08]724-00 ¼'kCnks esa #i;s ,d djksM vV~Boku yk[k vkB gtkj lkr lkS pkSCkhl ek=½ Vsªtjh pkyku la[;k , 150001 fnukad 12-4-2012 }kjk] dqy #i;s 2]18]88]834-00 ¼'kCnksa es #i;s nks djksM vV~Bkjg yk[k vV~Bklh gtkj vkB lkS pkSarhl ek=½ tek dj fn;k gSA+ dszrk ds gLrk{kj g0 ujs'k dkspj uke & ujs'k dkspj irk & 61@ 23] Dykbo jksM rglhy lnj] ftyk bykgkckn fodzsrk g0 vi0 ¼jkts'k dqekj jk;½ vij ftykf/kdkjh ¼utwy½ bykgkckn jkT;iky] mRrj izns'k dh vksj ls ¼jkts'k dqekj jk;½ vij ftykf/kdkjh ¼utwy½] bykgkckn^^ This free-hold deed shall be subject to the final decision to be passed in the Civil Miscellaneous Writ Petition No. 16965 of 2012, Naresh Kochhar Vs State of Uttar Pradesh and others. For the free-hold, the purchaser has deposited self assessment amount to the tune of Rs. 60,80,110/-(Sixty lakh eighty thousand one hundred and ten rupees only) through treasury challan no. 001 dated 24.06.2008, and the demand note amount of Rs. 1,58,08,724/- (One crore fifty eight lakh eight thousand seven hundred and twenty four rupees only) through treasury challan no. A 150001 dated 12.04.2012; which aggregate to Rs. 2,18,88,834/-(Two crore eighteen lakh eighty eight thousand eight hundred and thirty four rupees only). 001 dated 24.06.2008, and the demand note amount of Rs. 1,58,08,724/- (One crore fifty eight lakh eight thousand seven hundred and twenty four rupees only) through treasury challan no. A 150001 dated 12.04.2012; which aggregate to Rs. 2,18,88,834/-(Two crore eighteen lakh eighty eight thousand eight hundred and thirty four rupees only). The signature of purchaser Sd/- (Naresh Kochhar) Address - 61/23, Clive Road Tehsil - Sadar, District - Allahabad Seller Sd/-(illegible) (Rajesh Kumar Rai) Additional District Magistrate (Nazul), Allahabad. On behalf of the Governor (Rajesh Kumar Rai) Additional District Magistrate (Nazul), Allahabad. (Translated by Court) 11. Learned counsel for the petitioner has conceded to this effect that as far as the discount from 20% to 10% is concerned under demand notice dated 27.01.2011 the same can not be questioned in view of Full Bench judgment and therefore, the only issue for consideration here is about the interest and the point of time from which the interest has to be charged. 12. Taking us through Government Order dated 28.09.2011 (supra), learned counsel for the petitioner has argued that in so far as pending applications for freehold rights are concerned vide clause 4.1, the Government Order provided strict action at the end of concerned officials within a period of six months by disposing of all pending matters, failing which, disciplinary action would be taken against the guilty and thereafter if the formalities were not fulfilled, the applications for freehold grant shall stand rejected. On the question of consideration of freehold right in respect of the application where 25% of the self assessed amount has been deposited, it is provided that as per the prevalent Nazul policy and circle rate at the time of submitting an application will be considered and action will be taken accordingly. What is further provided is that on the balance amount, 15% simple interest will be charged. 13. Argument is that this amount of interest is only chargeable when amount is due, in other words, according to learned counsel for the petitioner the amount becomes due only when demand is raised. What is further provided is that on the balance amount, 15% simple interest will be charged. 13. Argument is that this amount of interest is only chargeable when amount is due, in other words, according to learned counsel for the petitioner the amount becomes due only when demand is raised. If the applicant of freehold right is only required as per the then prevalent policy of 2008 to deposit 25% of the self assessed amount as per the then circle rate enforced, the said amount having been deposited and despite that if respondents have not taken any decision to grant or reject the freehold rights, the petitioner cannot be saddled with any liability to pay interest on principal amount which had not even become due. Accordingly, the contention is that the demand notice, in so far as it charges interest @ 15% since 2008, was per se illegal. The interest at the most could have been charged only from the date when the demand is raised and that too after expiry of 90 days, the 'breathing period' which is provided for depositing the amount in one go. 14. Per contra the argument advanced by learned Additional Advocate General is that the Government Order dated 28.09.2011 provides for an interest liable to be charged on balance amount @ 15% simple interest and this condition is not qualified by any such rider that it will be charged on the date when demand is raised. He submitted that the amount of 75% had become due in the year 2008 itself and the petitioner having not deposited the entire amount, what is due to the Government for granting freehold rights cannot be diluted and the Government could not be made to suffer the loss. 15. Rival submissions fall for consideration. 16. In order to appreciate the argument of learned counsel for the petitioner with regard to interpretation of Government Order dated 28.09.2011 in so far as it provides for payment of interest on the balance amount of 75%, we need to examine the Government Orders dated 10.12.2002 and 21.10.2008. 15. Rival submissions fall for consideration. 16. In order to appreciate the argument of learned counsel for the petitioner with regard to interpretation of Government Order dated 28.09.2011 in so far as it provides for payment of interest on the balance amount of 75%, we need to examine the Government Orders dated 10.12.2002 and 21.10.2008. The Government Order dated 10.12.2002 has been issued in supersession to all earlier Government Orders and we find that in both the Government Orders the applicants seeking freehold rights were required to be issued with demand notice raising demand in terms of money for granting freehold rights/ executing deed of freehold rights and after the demand is raised, the claimants were required to deposit the entire amount within a period of 90 days and in such event they would be entitled for a discount of 20% or otherwise in case an installment, the discount was provided 10% on deposit of last installment. But there was no such condition of payment charging interest over and above the due amount. Government Order dated 10.12.2002 further came to be modified in terms of condition for grant of freehold vide Government Order dated 21.10.2008 in which also it was provided that the amount would be payable as per the demand notice and in the event of such deposit being made, the discount @ 10% will be granted. In this Government Order also, there was no provision for charging interest over and above any amount after the due date. The natural interpretation will be, therefore, that there was lure for discount on the total deposit either @ 20% within 90 days or 10% in case of installments. However, in both the conditions, the amount would become due only when the demand is raised. The Government Order dated 21.10.2008 came further to be amended in terms of its effect vide order dated 26.05.2009 which provided that conditions would be same as under Government Order dated 21.10.2008. 17. In the instant case, we find that application for freehold rights submitted by the petitioner on 24.06.2008 and at that time the prevalent freehold policy in respect of Nazul land was as prescribed under the Government Order dated 10.12.2002. 17. In the instant case, we find that application for freehold rights submitted by the petitioner on 24.06.2008 and at that time the prevalent freehold policy in respect of Nazul land was as prescribed under the Government Order dated 10.12.2002. Since the Full Bench of this Court (supra) has already taken the view that the freehold rights will be considered of the lease holders in terms of policy on the date of grant of freehold rights. There could be no quarrel that the policy prevalent in 2002 for freehold rights would be applicable in the case of petitioner also. Here now we find that the Government Order dated 28.09.2011 has specifically provided that the pending applications for freehold rights shall be considered by issuing demand note taking into consideration the circle rate as prevailed at the time of application submitted by the applicants seeking freehold rights and that the freehold rights will be governed by prevalent policy as was on the date of application. Thus, the Government Order carves out a new policy for consideration of pending cases for freehold rights and issuance of demand notice as per the circle rate at the time of submission of application. What is very interesting is that in juxtaposition to the earlier Government Orders, this Government Order provides for charging rate of interest though simple interest @ 15%. The Government Order has come to be enforced on 28.09.2011 and it also talks of issuing demand notice. So, in way the Government Order provides that the rate of interest will be charged on the balance amount to be deposited minus the one already deposited on the basis of self assessment. Thus, all that it provides is that the interest will be paid on the remaining amount. What will be the remaining amount will depend obviously only on issuance of demand notice. Thus, all that it provides is that the interest will be paid on the remaining amount. What will be the remaining amount will depend obviously only on issuance of demand notice. The cumulative effect of the conditions as prescribed under the Government Orders of 2002, 2010 and 2011 is that there will be an amount due only when a demand is raised and then since Government Order of 2011 does not dilute the condition of 90 days deposit and the Government Order dated 28.09.2011 does not state that it is being issued in supersession of earlier Government Orders of 2002 and 2010, it will be deemed that a period of 90 days to deposit the amount after the demand is raised, is well within the prevalent freehold policy in respect of Nazul land even in 2012 and is so apparent from the demand notice dated 27.01.2012 impugned in the present writ petition. It does not appeal to reason or logic to even think that on one hand the Government would provide for 10% discount in the event of deposit of the entire payment raised in 90 days in one go, it will still charge interest on the amount raised in the demand notice, even though it becomes due only when demand is raised. It would be equally illogical that Government would not give any interest on the amount deposited 10 years back and yet will charge interest on the remaining amount from the date of submission of the application even without there being any demand notice. This, in our considered opinion, amounts to penalty which is not permissible in law in the event of no fault on the part of a party from whom the interest is being demanded. The law of interest is also very much clear that interest is chargeable only when an amount has become due and payment thereof is defaulted and an amount becomes due when it is either raised as demand or is prescribed as condition to be paid after assessment. Either of the conditions are not present in the case in hand, as neither the demand was raised in 2008 nor, any such condition was prescribed to deposit the entire amount by self assessment. Either of the conditions are not present in the case in hand, as neither the demand was raised in 2008 nor, any such condition was prescribed to deposit the entire amount by self assessment. What was required to be deposited by self assessment was 25% amount of the 40% on the basis of circle rate and which was very much deposited in the present case. 18. From the above discussion, it can safely be concluded that the amount became due only on 27.01.2012 and that too after expiry of period of 90 days that any interest or penalty can be charged on delayed payment. We find that 90 days period expired in the present case on 26.04.2012. The entire amount of Rs. 1,58,08,723.40 paise which was balance amount as raised in demand notice dated 27.01.2012 was deposited by the petitioner on 12.04.2012 well within 90 days, and so in our considered opinion there was no occasion to charge interest from the petitioner on any balance amount for which the demand was raised only on 27.01.2012. 19. In view of the above, we hold that charging of interest from the petitioner on the balance amount for granting freehold rights for which the demand was raised only on 27.01.2012, even @ 15% simple interest was highly illegal and arbitrary and, therefore, to that extent we are quashing the demand notice. Since freehold rights have already been conferred upon the petitioner by executing freehold deed on 23.11.2012, no other relief is required to be granted. 20. In view of the above, the bank guarantee given by the petitioner pursuant to the interim order of this Court dated 05.04.2012 accordingly stands discharged in favour of the petitioner. The freehold rights conferred upon the petitioner under the deed dated 23.11.2012 are hereby made absolute and consequential action, if any, to follow. 21. The writ petition stands allowed with cost.