Research › Search › Judgment

Telangana High Court · body

2025 DIGILAW 1199 (TS)

Santosh Hooli v. State of Telangana

2025-10-10

LAXMI NARAYANA ALISHETTY

body2025
ORDER : 1. This Writ Petition is filed to declare the action of respondent No.2 in not paying the compound interest @ 24% per annum from 14.09.2007 to 30.07.2015 on Rs.51,66,800/- paid by the petitioner, as arbitrary, illegal and unjustified. 2. Heard Sri T. Bala Mohan Reddy, learned counsel for petitioner and Sri V. Narasimha Goud, learned Standing Counsel for HMDA. 3. Learned Counsel for the petitioner would submit that petitioner is native of Hubli, Karnataka and presently settled in USA and he is an NRI; that petitioner participated in the auction conducted by respondent No.2 on 14.09.2007, for sale of open plots and the petitioner became highest bidder in respect of plot No.666/A, Miyapur Residential Complex, Miyapur, and paid the entire sale consideration of Rs.51,66,800/- vide Challan Nos.10068/ 2007-08 dated 17.09.2007 for Rs.5,00,000/-, 10255/2007-08 dated 19.09.2007 for Rs.7,91,000/- and 45/2007-08 dated 01.10.2007 for Rs.38,75,100/- towards plot cost as per the terms of auction, by obtaining loan from ICICI Bank for an amount of Rs.48,00,000/- and was paying monthly EMI of Rs.63,000/-; that petitioner is under the impression that auctioned plots are free from litigation as the same were auctioned by Government agency, however, surprisingly he came to know that respondent No.2 allotted the said plot to D. Vijaya Jyothi in the year 1990 i.e., much prior to the auction dated 14.09.2007. In fact, registered sale deed No.7878 of 2015 was also executed in favour of D. Vijaya Jyothi. Despite payment of entire auction amount, respondent No.2 did not execute registered sale deed in favour of petitioner, therefore, the petitioner made several requests for execution of sale deed in his favour, however, the respondent No.2 did not execute the sale deed. 4. Learned Counsel for the petitioner would further submit that petitioner has requested respondent No.2 to allot alternate plot and submitted representations dated 13.01.2014 and 05.06.2014; that respondent No.2 offered plot No.960/1 to the petitioner, which is left over plot out of 300 acres developed by respondent No.2 and is much inferior to that of the plot purchased by the petitioner in all aspects, therefore, petitioner informed the respondent No.2 that he is not interested in the said alternate plot and requested respondent No.2 to refund the amount paid by the petitioner i.e., Rs.51,66,800/- along with compound interest @ 24 % per annum. The respondent No.2 refunded the said amount of Rs.51,66,800/- to the petitioner vide Cheque bearing No.641830 dated 30.07.2015, however, without any interest. Aggrieved by the same, present writ petition is filed. 5. Learned counsel for the petitioner principally contended that petitioner has paid the auction amount in the month of September, 2007, whereas, respondent No.2 refunded the said amount on 30.07.2015 i.e., after eight (08) years, therefore, petitioner is entitled to compound interest as the petitioner has been put to financial loss and hardship because of the mistake on the part of respondent No.2 in auctioning non-existing plot No.666/A. He further contended that in similar circumstances, this Court awarded interest @ 12% per annum and therefore, the petition is deserved to be allowed and the petitioner is entitled to compound interest @ 24% per annum. In support of his contention, he relied upon the Judgment of this Court passed in W.P.Nos.26832 and 27310 of 2024, dated 02.05.2025. 6. Per contra, learned counsel for respondent No.2 would submit that non-existence of plot No.666/A which was purchased by the petitioner, was noticed by respondents and the same was promptly informed to the petitioner and also offered an alternate plot bearing No.960/1 with the same extent and dimensions with that of the plot purchased by the petitioner. Learned Standing Counsel for respondent No.2 further submitted that petitioner was not interested in taking alternate land, and as such, respondents refunded the entire amount paid by the petitioner on 30.07.2015. Therefore, the contention of the petitioner that he is entitled to compound interest @ 24% per annum is untenable and without any basis. He further submitted that orders passed in W.P.Nos.26832 and 27310 of 2024, which was relied upon by learned counsel for the petitioner has no application to the present case as the facts and circumstances of that case and the present case are entirely different. 7. He further submitted that orders passed in W.P.Nos.26832 and 27310 of 2024, which was relied upon by learned counsel for the petitioner has no application to the present case as the facts and circumstances of that case and the present case are entirely different. 7. In support of his contention, learned Standing counsel for respondent No.2 relied upon the following Judgments: a) State of U.P and Others vs. Bridge & Roof Company (India) Ltd. (1996) 6 SCC 22 b) Assistant Excise Commissioner and Others vs. Issac Peter and Others , (1994) 4 SCC 104 c) W.A. No. 808 of 2024 dated 08.07.2024 i) The Hon’ble Apex Court in State of U.P and Others (cited supra) held that “writ petition filed for issuance of a writ of mandamus restraining the Government from deducting or withholding a particular sum, which according to the respondent is payable to it under the contract, was wholly misconceived and was not maintainable in law and writ petition is ought to have been dismissed on this ground alone.” ii) The Hon'ble Apex Court in Assistant Excise Commissioner and Others (cited supra), held that “contract between the parties is governed by statutory provisions, i.e., provisions of the Act, the Rules, the conditions of license and the counterpart agreement, they constitute the terms and conditions of the contract. They are binding both upon the Government and the licensee. Neither of them can depart from them. It is not open to any officer of the Government to either modify, amend or alter the said terms and conditions, not even to the Minister of Excise. It is, therefore, not really necessary for the present purpose to examine what precisely was the statement made by the Minister of Excise or by the auctioning authorities at the time of auction.” iii) A Hon'ble Division Bench of this Court in W.A. No. 808 of 2024 dated 08.07.2024 , held that “whether the rescission of the contract is arbitrary or is irrational or the power to rescind the contract has been exercised in consonance with the terms and conditions of the contract depends upon adjudication of disputed questions of fact which cannot be gone into in a summary proceeding under Article 226 of the Constitution of India.” 8. Learned Standing Counsel for respondent No.2 submitted that as per Pre-Final allotment dated 25.10.2007, physical possession was supposed to be handed over on 30.11.2007, however, petitioner did not take possession despite informing specifically, therefore, conveyance deed could not be executed in favour of the petitioner. He further submitted that for the delay and laches on the part of petitioner, respondent No.2 cannot be penalized. He further submitted that auction and purchase of plots is purely a contract, therefore, writ jurisdiction under Article 226 cannot be invoked for adjudication of complex contractual disputes or to grant money decrees. He further submitted that petitioner has en-cashed the cheque issued by respondent No.2 and has not challenged the validity of terms of auction, therefore, petitioner is estopped from seeking any relief including penal or compound interest. 9. Perusal of the record discloses that petitioner was the successful bidder in the auction conducted by respondent No.2 on 14.09.2007, having agreed to pay Rs.20,000/- per square yard and paid the total sale consideration amount of Rs.51,66,800/- subsequently, in the month of September, 2007. Respondent No.2 realized that the plot No.666/A is not existing on the ground and the dimensions and the boundaries of the said plot are in fact belongs to plot No.664/B, which was already handed over to Ms.D. Vijaya Jyothi on 30.08.1995, therefore, respondent No.2 had offered alternate plot bearing No.960/1, which is of same extent. However, the said offer was not accepted by the petitioner and requested respondent No.2 to refund the entire amount paid by the petitioner. Accordingly, entire amount of Rs.51,66,800/- paid by the petitioner was refunded by the respondent No.2 on 30.07.2015. 10. The grievance of the petitioner is that he has paid the auction amount to respondent No.2, by obtaining loan of Rs.48,00,000/- from ICICI Bank, and thus respondent No.2 is liable to pay compound interest @ 24% per annum as the amount was refunded by respondent No.2 after eight (08) years. 11. In so far as maintainability of writ petition is concerned, it is relevant to note that the Hon’ble Apex Court in Unitech Limited and others vs. Telangana State Industrial Infrastructure Corporation (TSIIC) and others, wherein it was held as under:- “39. 11. In so far as maintainability of writ petition is concerned, it is relevant to note that the Hon’ble Apex Court in Unitech Limited and others vs. Telangana State Industrial Infrastructure Corporation (TSIIC) and others, wherein it was held as under:- “39. A two judge Bench of this Court in ABL International Ltd. v. Export Credit Guarantee Corporation of India [ABL International] analyzed a long line of precedent of this Court to conclude that writs under Article 226 are maintainable for asserting contractual rights against the state, or its instrumentalities, as defined under Article 12 of the Indian Constitution. … 39.2. The decision in ABL International, cautions that the plenary power under Article 226 must be used with circumspection when other remedies have been provided by the contract. But as a statement of principle, the jurisdiction under Article 226 is not excluded in contractual matters. … 39.4. If the State instrumentality violates its constitutional mandate under Article 14 to act fairly and reasonably, relief under the plenary powers of Article 226 of the Constitution would lie. … 39.6. In determining as to whether the jurisdiction should be exercised in a contractual dispute, the Court must, undoubtedly eschew, disputed questions of fact which would depend upon an evidentiary determination requiring a trial. But, equally, it is well settled that the jurisdiction under Article 226 cannot be ousted only on the basis that the dispute pertains to the contractual arena. This is for the simple reason that the state and its instrumentalities are not exempt from the duty to act fairly merely because in their business dealings they have entered into the realm of contract. Similarly, the presence of an arbitration clause does (sic not) oust the jurisdiction under Article 226 in all cases though, is still needs to be decided from case to case as to whether recourse to a public law remedy can justifiably be invoked.” 12. Thus, it is clear from above decisions that writs under Article 226 are maintainable for asserting contractual rights against the State, or its instrumentalities, as defined under Article 12 of the Indian Constitution. Therefore, the contention of learned Standing Counsel for respondent No.2 that writ jurisdiction under Article 226 cannot be invoked for adjudication of complex contractual disputes, is untenable. 13. Therefore, the contention of learned Standing Counsel for respondent No.2 that writ jurisdiction under Article 226 cannot be invoked for adjudication of complex contractual disputes, is untenable. 13. Now the point that arises for consideration of this Court is whether the petitioner is entitled to compound interest @ 24% per annum on Rs.51,66,800/-. 14. In the judgment relied upon by the petitioner, it is observed that where State or its instrumentalities are involved in auctioning of the properties, there is a presumption that such properties are free from encumbrances and there is also a reasonable and legitimate expectation that encumbrances, if any, shall be informed to the participants of the auction. This Court further observed that the State must act fairly and when the property was not free from encumbrances and the same was never informed to the buyer and is unable to enjoy the fruits of the property, the State shall refund the amount paid by the buyer and ultimately, directed the State to refund the auction amount along with interest @18% per annum. 15. In the present case, admittedly, plot No.666/A, which was auctioned and purchased by the petitioner is non-existing plot and this fact was noticed by respondent No.2 after auction and the payment of entire auction amount by the petitioner. Though alternative plot was offered by respondent No.2, the same was not accepted by the petitioner as according to him, the alternative plot is the left over plot out of 300 acres land developed by respondent No.2 and also inferior in all aspects with that of the plot purchased by the petitioner in auction. Therefore, this Court cannot find fault with the petitioner in not accepting the alternate plot offered by the respondent No.2. The respondent No.2 had auctioned non-existing plot No.666/A and therefore, there is clear mistake on the part of respondent No.2, which reflects non diligent approach on the part of respondent No.2. The judgments referred to and relied upon by the learned Standing counsel for respondent No.2 have no application to the present facts and circumstances of the case. 16. The respondent No.2 had auctioned non-existing plot No.666/A and therefore, there is clear mistake on the part of respondent No.2, which reflects non diligent approach on the part of respondent No.2. The judgments referred to and relied upon by the learned Standing counsel for respondent No.2 have no application to the present facts and circumstances of the case. 16. Admittedly, respondent No.2 refunded the amount paid by the petitioner on 30.07.2015, which is about eight (08) years from the date of payment by the petitioner, therefore, petitioner is put to financial loss as well as hardship and thus, petitioner is entitled to interest from the date of payment till the date of refund. Though, the petitioner claimed compound interest @ 24% per annum, in considered opinion of this Court ends of the Justice would be met, if interest @ 18% per annum is awarded to the petitioner from the date of payment till the date of refund i.e., 30.07.2015. 17. Accordingly, writ petition is allowed in part, directing the respondent No.2 to pay interest @ 18 % per annum on Rs.51,66,800/- to the petitioner from the date of payment till the date of refund. There shall be no order as to costs. Miscellaneous petitions pending, if any, shall stand closed.