Charanjit Bajaj vs State of Haryana

P.C. Jain, C.J.

This judgment of ours would dispose of Civil Writ Petitions No. 1270, 1283, 2975 and 5794 of 1985 as all these writ petitions raised substantially the same issues and the pleadings in the writ petitions also follow substantially the same pattern. Civil Writ Petition No. 1270 of 1985 is being treated as the main writ petition. It would, therefore, be convenient to refer to this petition and trace the facts therein :

Charanjit Bajaj, President, Urban Estate Welfare Association (Regd.) Karnal and others, whose names have been given in the memo of parties, purchased plots in the Urban Estate Karnal Sector 13 and most of them have already constructed their houses over those plots. The Government of Haryana enacted the Haryana Restriction on (Development and Regulations of) Colonies Act (hereinafter referred to as `the Act'') to place severe restrictions on the sale of plots for profit by colonisers with the twin objectives of ensuring well planned houses in fully developed colonies on the one hand and curbing the lust for profits by the real estate sharks. In consonance with the policy enshrined in the said Act the Government of Haryana issued an advertisement (copy Annexure P1) announcing to the public the scheme of the Government to provide a well developed colony to meet the genuine requirements for residential plots of the people of Karnal. The plots were to be sold on `first come first served basis'' and the allotment of plots was to be made under the Punjab Urban Estate (Development and Regulation) Act, 1964 (hereinafter referred to as `Development Act''). In pursuance of that advertisement, the petitioners applied and were allotted the residential plots of different sizes at prices which varied according to the size of the plot and an allotment letter was also issued to the petitioners respectively (copy of one of such allotment letters attached with the petition is Annexure P.2). Condition No.4 in the allotment letter reads as under :

"The above price of the plot is subject to variation with reference to the actual measurement of the plot as well as in case of enhancement of compensation of acquisition cost of land of this sector by the Court or otherwise and you shall have to pay this additional price of the plot, if any, as determined by the Department within 30 days from the date of demand."

It is further averred that Government acquired the land measuring 338.74 acres for the purpose of setting up the aforementioned Urban Estate at Karnal under the Land Acquisition Act. The award was announced by the Land Acquisition Collector on 23rd November, 1973. Some of the landowners filed references under section 18 of the Land Acquisition Act claiming enhancement in the amount of compensation and all these references were decided by the Tribunal at Karnal between the year 1979 and 1980. The compensation was enhanced to Rs.22/ per square yard vide these awards.

It is next averred that the Government created Haryana Urban Development Authority (hereinafter referred to as `HUDA") by an Ordinance, which was substituted by an Act called The Haryana Urban Development Authority Act (Haryana Act No. 13 of 1977). Notices were received by the petitioners (copy of one of such notices attached with the petition is Annexure P3) intimating the plot holders that in order to meet the enhanced cost of land, the price of the plots had been revised. The price in the case of Krishan Kumar Chawla petitioner was revised from Rs 37/ to Rs 45/ per square yard. There was enhancement in all cases, the quantum per square yard varying with the number of instalments in which the total amount was paid. Feeling aggrieved from this enhancement, some of the plot holders filed writ petitions and one of such writ petitions was Civil Writ Petition No. 3217 of 1977, which was ultimately dismissed along with other petitions on 22nd July, 1981. Thereafter, HUDA issued yet another demand notice in April, 1981 to each of the plot/house owners in Sector 13 of the Urban Estate Karnal. This demand notice briefly referred to condition No. 4 in the allotment letter and further stated that the enhanced compensation of the Sector had since been deposited in the Court for payment to the concerned parties and the same was recoverable from the plot holders. The matter did not rest there as another notice in July 1984 was issued to the petitioners and other plot holders in which again, after making reference to condition No.4, it is stated that enhanced compensation of the Sector had since been deposited in the Court for payment to the concerned parties and that each of the plot holder was to pay at the rate of Rs 46.74 per square yard to meet the cost of enhanced compensation. Copy of one of such notices is attached with the petition as Annexure P5. The petitioners were perturbed on the receipt of this notice and accordingly filed a common representation through the Welfare Association of the residents of Sector 13 as well as Sector 13 (Extension). But no heed was paid to the representation and instead another notice was issued (copy of one of such notices is Annexure P7) partially modifying notice Annexure P5, in which it is stated that on recalculation the amount payable comes to Rs. 37.71 per square yard instead of Rs. 46.74 per square yard and requiring the petitioners to pay the said amount by means of a demand draft in favour of the Estate Officer, Karnal, payable at Karnal, within thirty days of the date of issue of the notice, failing which action for the imposition of penalty and resumption of plot in accordance with the provisions of section 17 of the HUDA Act read with Regulation 12 of the Haryana Urban Development Authority (Disposal of Land and Buildings) Regulations, 1978, would be taken.

The petitioners have called in question the legality of the notice Annexure P7 through this petition, inter alia, on the grounds that no enhancement whatsoever, in the amount of compensation by any Court took place after 22nd October, 1980, that already an additional price at the rate of Rs.10.67 per square yard in April 1981 had been demanded, that respondent No. 2 cannot now turn round and say that more amount is payable to meet the enhanced cost of compensation, that the proceedings regarding compensation having attained judicial finality in the year 1980, the enhanced compensation cannot be asked for after such an inordinate delay, that the respondents had taken a plea in the earlier petition that according to the policy of the department the residential plots were allotted to the persons on the basis of `No Profit No Loss Basis'' but by issuing the present impugned demand notice the respondents are not taking into account the huge profits made by them from the transactions to which reference is made in clause (viii) of ground No. 22, that a total area of 29.5 acres was reserved to be utilised as a green belt, but the respondents have given up this green belt and have started a commercial Nursery which is purely a commercial activity, with the result that the cost incurred in relation to that land must be reduced from the total cost and that the action of the respondents in demanding the enhanced price on the face of it is arbitrary and violative of Article 14 of the Constitution.

Notice of motion was issued by the Bench on 13th March, 1985.

In response to the notice, written statement on behalf of respondents Nos. 1 to 3 has been filed by the Administrator, HUDA, dated 19th April, 1985, in which besides taking certain preliminary objections, the material allegations made in the petition have been controverted. It is not necessary to refer to the preliminary objections as they were not pressed at the time of the arguments. On merits, it is averred that when initially price of the plots in dispute was fixed, the award of the Collector had not been made and an approximate cost of Rs. 15,000/ per acre was assumed as the tentative price of the land. Later on, the Land Acquisition Collector assessed the price of the acquired land at Rs. 29,980/ per acre, which necessitated the revising of the tentative price, which was done on a consideration expressly stipulated in the regulations. Initially, the price had been fixed at Rs. 33/, Rs. 35/ and Rs. 37/ respectively for the three categories and the tentative price was revised to Rs. 43/ Rs. 44/ and Rs. 45/ respectively. The petitioners are under a contractual obligation to pay the additional price. The demand notice at Annexure P4 is legal and valid. The compensation had been enhanced from time to time by the District Courts. The amount of enhanced compensation has to be deposited in the Court as per the judicial orders, to be recovered from the plot holders. The averment of the petitioners that no order for enhancement were passed after 22nd October, 1980 has been denied and it is averred that the references were decided by the District Judge from time to time which increased the amount of compensation every time. The latest case No. 89/4 of 1983 was decided on 29th September, 1983. It is further averred that on the receipt of the common representation from the Welfare Association of Sector 13, an opportunity of hearing was afforded to the representatives of the Association. The matter was discussed with the representatives in detail. The calculations were got checked by the respondents. On recalculation it was ordered that recovery at the rate of Rs. 37.75 per square yard instead of Rs. 46.75 per square yard be made. In para 20, a detailed statement showing the date of enhanced compensation of Sector 13 and 13 (Extension) per square yard has been given. The respondents are legally entitled to recover the additional price at the rate of Rs 37.75 per square yard.

It is also stated that HUDA has stepped into the shoes of the Urban Estates Department and the impugned notice can legally be issued by HUDA and the same is neither arbitrary nor offends the provisions of Article 14 of the Constitution.

A supplementary written statement dated 6th August, 1985 was filed, in which it is stated that a sum of Rs 2,12,63,442.69 is such for which awards were announced after 1st April, 1981 but its amount could not be included while calculating the recovery of enhanced compensation at the time of the issue of notice as mentioned in Annexure P.4. This amount was deposited on 1st April, 1981, and as such was recoverable from the plot holders. To this outstanding amount was also added the amount totalling Rs.72,45,046.37 for which the awards were announced after 1st April, 1981 onwards and were deposited from time to time. Besides, the interest payable and the miscellaneous expenses were added when final notices as contained in Annexure P5 were issued on 15th July, 1984 and revised vide Annexure P7.

During the course of arguments, certain clarification was needed and the respondents were required to file another affidavit which was filed on 31st March, 1986, in which it is stated that for the purpose of calculation of additional price the incidence on account of commercial area is not chargeable to the plot holders. Any amount payable on account of enhanced compensation of the commercial area is debited to HUDA and is taken outside the purview of the calculations made for determining the additional price payable by the plot holders as is clear from the statement of account attached with the additional written statement filed. It is also averred that wherever an area gets shown as "Undetermined use" in as it happened in case of Sector 14, Gurgaon (which is presently maintained as an open space) the land use may not be changed and the area will not be utilised for any other purpose till the plan is modified and approved by the State Government. It is next averred that payment of enhanced compensation is made by HUDA out of its own resources and no assistance from the State Government or financial institutions is available to the organisation for this purpose. Since the amount is to be subsequently recovered from the allottees over a period of time, it becomes difficult to make the payment immediately after the announcement of enhanced amount of compensation by the District Courts/ High Court. The investigation made by HUDA towards the payment of enhanced compensation from its own resources further strains the commitment or development works in other areas. Consequently, a certain amount of delay in the payment of enhanced compensation is inevitable. After issue of recovery notices to the allottees the actual recovery from the plot holders takes a long time, whereas the investment has already been made by the authorities. The interest of 7/10 per cent, as the case may be, for the period intervening between deposit of compensation and issue of notice to the allottees is a reasonable charge as if it is an instalment of the amount due from the plot holders. If HUDA were to raise resources from the financial institutions, a much higher rate of interest would be charged which would mean an additional burden on the plot holders. As in the case additional compensation, which becomes payable to the right holders from the date of the taking over the possession, this additional price also becomes payable from that date itself. This is how the pleadings of the parties stand.

It was contended by Mr. Kuldip Singh, Senior Advocate, whose contention was adopted by the other learned counsel that after 3rd April, 1981, no enhancement in compensation has been made and as such no enhancement amount could be claimed from the petitioners on the pretext that the enhanced amount of compensation payable to the landowners was deposited late. We are afraid we are unable to agree with this submission of the learned counsel. Condition No.4, which has been reproduced in the earlier part of the judgment, clearly provides that the price of the plot is subject to variation with reference to the actual measurement of the plot, as well as in case of enhancement of compensation of acquisition cost of land of this Sector by the Court or otherwise. As it transpires from the reading of the various affidavits filed by the Administrator, what has actually happened is that some awards enhancing the amount of compensation were made prior to 1st April, 1981, but the amount of compensation could not be deposited in Court, with the result that such amount till its deposit could not be included while calculating the recovery of enhanced price. Further, the plea that no award enhancing compensation was given after 1st April, 1981, is incorrect as in the affidavit dated 6th August, 1985, it has been specifically averred that the awards for the amount totalling Rs. 72,45,046.37 were announced after 1st April, 1981. Be that as it may, the fact remains that the calculation for demanding the enhanced amount of additional price was made only after HUDA had deposited the amount of compensation and it is on the basis of that calculation that the impugned notice, Annexure P.7, was issued to the plot holders. In reply to para 20, the Administrator in his written statement dated 19th April, 1985, has given complete chart showing figures on the basis of which calculation for enhanced amount of additional price for Rs. 37.75 has been made. For facility of reference the same is being reproduced hereunder :

Statement showing the data of enhanced compensation of Sector 13 and 13 Extension, per Sq. Yd.

Total amount payable by Haryana Urban Development Authority upto 31.10.83.

Interest upto 31.3.84 @ 7% P.A.

Total

Rs. 3,56,54,56544

50,14,90500

4,06,69,47044

Rs. 5,20,14625

93,57880

6,13,72505

3,61,74,71169

51,08,48380

4,12,83,19549

Therefore the total amount of enhanced compensation which is recoverable.

Rs. 4,12,83,19549

Balance already recovered.

Rs. 73,03,56800

Balance amount yet to be recovered.

Rs. 3,39,79,62749

Less interest recovered in excess.

14,91,14500

Total land.

338.74 Acres

Enhanced compensation per gross acre.

Rs. 95,90978

(i) Area falling in Sector 14.

25.31 Acres.

(ii) Area under shopping centre.

5.31 Acres.

(iii) Area of 50% of Sec. dividing roads of Sector 12&13

3.00 Acres.

(iv) Other area Haryana Urban Development Authority residence vacant land under Kutia etc.

6.16 Acres.

(v) Area under institutions

11.13 Acres.

Total 50.91

Compensation to be charged to Sector 14 & other for 50.91 acres as `A'' above.

Rs. 48,82,76680

Balance amount including the recoverable amount from Haryana Housing Board.

Rs.2,76,05,71569

Plotable area of

(i) Sector 13 and 13 Extension.

132.20 Acres.

(ii) Plotable are of Haryana Housing Board.

20.09 Acres.

Total plotable area

152.29 acres or 7,37,084 sq.yd.

Therefore the rate of enhanced compensation from the plot holders of Sector 13 & 13 Extn. and Haryana Housing Board

Rs. 37.45 per sq.yd.

Less excess charged.

Rs. 1.72 per sq.yd.

Net

Rs. 35.73 per sq.yd.

Rate of interest @ 7% 1.4.84 to 15.1.85

1.98 per sq.yd.

Rs 37.71 per sq.yd.

Under clause (4) of the agreement, the petitioners are legally bound to pay the enhanced amount of additional price demanded from them. Under this clause, HUDA has an absolute right to revise the price of the plot on the basis of the enhancement of compensation. Merely this fact that there has been some delay in depositing the amount of compensation in the Court by HUDA, it cannot be a valid ground to invalidate the demand made from the petitioners for the enhanced amount of additional price. The amount of enhanced compensation has been actually paid by HUDA and its burden must fall on all the plot holders. The contention of the learned counsel, as earlier observed, has no merit.

It was next contended by the learned counsel for the petitioners that the stand of the HUDA is that they are working on the principle "no profit no loss" basis, that area has been reserved as commerical area and for nursery, that from the sale of some commercial sites, huge amount has been earned by HUDA and that the enhanced amount of compensation paid by HUDA with regard to the commercial area is also being charged from the plotholders. According to the learned counsel, the incidence of the enhanced amount of compensation regarding commercial area or for the area which has been shown "undetermined use" cannot legally fall on the plotholders and that this incidence should be borne by HUDA itself. At the initial stage when this argument was advanced we felt very much impressed and were tentatively of the view that the incidence of the enhanced amount of compensation regarding the commercial area should not be borne by the plotholders. Mr. Rajinder Singh, learned counsel appearing for HUDA, controverted the contention and submitted that its incidence was not falling on the plotholders and was being borne by HUDA. This argument of the learned counsel did not find any support from the pleadings as in the written statement no specific averment had been made in this respect, with the result that Shri Rajinder Singh, prayed for time to enable him to file an additional affidavit. The prayer was allowed and written statement in the shape of additional affidavit, dated 31st March, 1986, was filed by Shri I.M Khunger, Deputy Secretary. To the plea taken in this written statement, a detailed reference has already been made in the earlier part of the judgment. In this written statement it has been clearly stated that for the purpose of calculation of additional price, the incidence on account of commercial area is not chargeable to the plotholders. Any amount payable on account of enhanced compensation of the commercial area is debited to HUDA and is taken outside the purview of the calculations made for determining the additional price payable by the plotholders, as is clear from the statement of account attached with the additional written statement filed. With regard to the area shown as "undetermined use", it is averred that wherever an area gets shown as "undetermined use", as it happened in the case of Sector 14, Gurgaon (which is presently maintained as an open space), the land use may not be changed and the area will not be utilised for any other purpose till the plan is modified and approved by the State Government. In view of this specific averment made in the written statement, no merit is left in the contention of the learned counsel for the petitioners. So far as the area which is shown as "undetermined use" is concerned, the same has to remain as it is till the plan is modified and approved by the State Government. In this situation for this area the incidence of compensation must fall on the plot holders. So far as the commercial area is concerned, it has been brought out clearly in the written statement, that the amount of enhanced compensation payable in respect of the commercial area is debited to HUDA and is taken outside the purview of the calculations made for determining the additional price payable by the plotholders. In view of this specific averment it cannot justifiably be urged that the incidence of the enhanced compensation of the commercial area is falling on the plotholders. Consequently, the contention of the learned counsel has no force.

It was next contended by the leaned counsel that 7% interest is being charged by HUDA for the period intervening between the deposit of compensation and the issue of notices to the plotholders and that the petitioners cannot be held liable to pay interest and suffer for the lapse on the part of HUDA in depositing the amount of compensation. This contention of the learned counsel was sought to be controverted by Mr.Rajinder Singh on the basis of the pleas raised in the written statement dated 31st March, 1986, which read as under :

"(iii) That reference under Section 18 of the Land Acquisition Act of individual landowners with regard to a particular acquisition are decided at different points of time. It may be mentioned that administratively it may become impracticable to work out the additional price for each enhancement and then the demand is made from the plotholders which may become irksome.

That payment of enhanced compensation is made by HUDA out of its own resources and no assistance either from the State Government or Financial Institutions is available to the Organisation for this purpose. Since the amount is to be subsequently recovered from the allottee over a period of time, it becomes difficult to make the payment immediately after the announcement of enhanced amount of compensation by the District Courts/High Court. The investment made by HUDA toward payment of enhanced compensation from its own resources further strains the commitment on development works in other area. Consequently a certain amount of delay in the payment of enhanced compensation is inevitable.

(iv) That as already mentioned in para (iii) above the payment of enhanced compensation is made by HUDA from its own resources. Even after issue of recovery notices to the allottees the actual recovery from the plotholders takes a long time whereas the investment has already been made by the Authority. The interest of 7/10% as the case may be for the period intervening between deposit of compensation and the issue of notices to the allottees is a reasonable charge as it is an instalment of the amount due from the plot holders. It may also be mentioned that if HUDA were to raise resources from the financial institutions, a much higher rate of interest would be charged which would mean additional burden on the plotholders. As in the case of payment of compensation, which becomes payable to the rightholders from the date of the taking over of the possession this additional price also becomes payable from the date itself."

After giving our thoughtful consideration to the entire matter, we find merit in this submission of the learned counsel for the petitioner. The interest is being charged for the period intervening between deposit of compensation and the issue of notices to the allottees. Mr. Rajinder Singh, learned counsel, could not convince us as to on what basis interest was being charged from the plotholders. The recovery of the enhanced price on the basis of payment of enhanced compensation has to be made by HUDA. If the authority does not take prompt action in making recovery or in depositing the enhanced amount of compensation, then the plotholders cannot be made to suffer for that lapse. Further, there does not seem to be any basis for charging interest on the amount deposited for paying compensation. The incidence that has to fall on the plotholders is of the amount of enhanced compensation paid by HUDA. By charging interest on such amount, HUDA only wishes to make profit as not amount of interest is payable by HUDA after the deposit of the amount of enhanced compensation. In this view of the matter the explanation furnished by HUDA in charging interest is not tenable and the petitioners cannot be made liable to pay interest for the period intervening between deposit of compensation and the issue of notices.

7 .In C.W.P. No. 5794 of 1985 Shri V.K. Bali, learned counsel, raised one additional point.

It was contended by him that when the tentative price of the plots was fixed, the enhancement which had ultimately to be made by Courts had been kept in mind and that the petitioners could not be forced to pay for the area which has been allocated to the Housing Board, a department of Government itself as also area which is allocated and in fact already allotted for shopping complex and the other places earmarked. The specific plea to which our attention was drawn is in para 17 of the petition (C.W.P. No 5794 of 1985) and reads thus :

"17. That although in the first instance, the case of the petitioners is that the respondents at the time when they fixed tentative price of the plots which were ultimately allotted to the petitioners, they had kept in mind the enhancement which was to be ultimately done by the Courts as they had before them the example of Sector 13 and for this precise reason, whereas price fixed for plot in sector 13 was between Rs. 30/ to Rs. 35/, it was Rs 159.16 per sq. meter for Sector 6. Secondly, if it be assumed that no such calculations were made by them earlier and also that the respondents have a long rope to indulge in profiteering in real estate business, then also, the notice for enhancement issued by them even as per clause 9 are wholly illegal and without jurisdiction inasmuch as petitioners cannot be forced to pay even with regard to the area which has been allocated to Housing Board, a department of Government itself as also area which is allocated and in fact already allotted for shopping complex and the other places earmarked and allotted for other things. The petitioners can at the most be forced to pay proportionate enhanced cost. On the contrary, the entire burden of enhancement is being thrown upon the petitioners. It may be mentioned here that by the time the first notice for enhancement came into being by then only 9 cases of landowners had been decided by the Additional District Judge regarding which alone the compensation had since been deposited by the respondents. Since the area with the said landowners was quite small and the plot owners are many, the notice for paying enhanced price was only for Rs. 4.95. The respondents have thus instead of recovering proportionate amount from the petitioners as per area in their possession are wanting to recover the enhanced compensation awarded by the Courts from the petitioners and other plotholders alone and are not issuing notices either to Housing Board or those who have purchased shopping/commercial sites."

On the other hand, the learned counsel for the respondents controverted the contention of the learned counsel for the petitioners and drew our attention to the reply of the respondents to para 17, which is in the following terms :

"That the contents of paragraph No. 17 of the writ petition are wrong, frivolous, baseless, misconceived and hence denied. As averred in paragraph No. 16 of this written statement, the tentative price of the plots has been fixed in accordance with the provision of HUDA Act and Regulations framed thereunder and not fixed arbitrarily or keeping in view the enhancement which was to be ultimately done by the Courts as alleged by the petitioners. It is further submitted that the tentative price/additional price is determined keeping in view `sector'' as a unit and it is not determined on the basis of which land compensation has been enhanced on reference made under section 18 of the Land Acquisition Act by the Court. The additional price on account of enhancement of land compensation is also recoverable from the Housing Board, Haryana in the same manner as it is recovered from the allottees of HUDA. It also does not lie in the mouth of the petitioners to challenge Clause 9 of the allotment letter or for that matter the right of the Authority to recover the additional price on the basis of Clause 9 and under the provision of HUDA Act and the Regulations framed thereunder from time to time when they have accepted the same at the time of allotment and that they are bound to pay the same under contractual obligation. It is also absolutely baseless that the Authority is indulging in profiteering. It is also not admitted that only 9 cases of landowners have been decided by the Additional District Judge, Karnal but many more cases have been decided by the Courts wherein the Compensation has been paid by the Authority in the Court. It is because of enhancement of land compensation the additional price is being demanded from the petitioner, which has been determined as under :

Amount paid by HUDA upto 3.4.85

Rs. 97,36,072.67

Interest upto 30.6.85

Rs. 5,54,659.61

Total amount of enhanced compensation

Rs.102,90,732.28

Total land

245.02 Acres.

E.C. per gross acre

Rs. 4,200.00

(i) Area falls under commercial Centre

1.90 Acres.

(ii) Area of 50% of sector dividing roads of sector 6 and 7.

3.40 Acres.

5.30

Compensation to be charged as in (ii) above

Rs. 2,22,600.00

Balance recoverable amount from plotholders & Haryana Housing Board

Rs 1,00,68,132.68

Plotable area:

(i) Sector 6

365904 sq.yd.

(ii) Plotable area of Haryana Housing Board.

71875 sq.ys.

Total

437739 Sq. Yd.

Therefore the rate of enhanced compensation from the plotholders of Sec.6 Haryana Housing Board

Rs 23.00 per Sq.Yd.

Less already recovered.

Rs. 4.02 per Sq Yd.

Net recoverable per Sq. Yds.

Rs. 18.98 per Sq Yd.

Thus the addition price is legally and validly being demanded from the petitioner in view of provisions of Act and Regulation.."

A bare perusal of the reply clearly shows that there is no merit in the contention of the learned counsel for the petitioners. The petitioners are bound to pay enhanced price which is being claimed from them under clause 9. The enhanced price is being demanded from the petitioners on the basis of the payment of enhanced compensation. In this view of the matter, in the light of the reply given by the respondents, we find no merit in the contention of the learned counsel for the petitioners.

No other point was urged on behalf of the learned counsel for the petitioners.

For the reasons recorded above, we allow these petitions partly to this extent that the respondents are not entitled to charge any interest from the petitioners for the period intervening between deposit of compensation and the issue of notices. On all other points, the petitions stand dismissed. In the circumstances of the case, we make no order as to costs.