HARYANA URBAN DEVELOPMENT AUTHORITY vs Shri Jatinder Nath Joshi

RESPONDENT-allottee of plot no. 163, measuring 14 marla, in Sector-7, Urban Estate Karnal through his General Power of Attorney (GPA), Shri Rajiv Bhatia, filed a complaint before the District Consumer Disputes Redressal Forum, Panchkula (District Forum for short), alleging following deficiencies on the part of the petitioner-HUDA :- (i) As against the terms and conditions of allotment to charge interest @ 15% per annum on the annual installments they have charged 18% interest on the basis of a footnote on the letter of allotment which could not be treated as a part of the agreement; (ii) It had asked for enhanced compensation for the land acquired by them even though the enhancement had already been accounted for while determining the price of the plot before its allotment; (iii) That HUDA sent a demand notice for Rs.4,22,385/- despite the fact that he had deposited more than the price of the plot which was only Rs.1,46,913/-; and (iv) It had charged compound rate of interest, which was not permissible. As per respondent-complainant, all this constituted unfair trade practice and, therefore, sought the following reliefs :-

That the Opposite Parties may be directed not to charge compound interest on delayed amounts, if any. 2.The demand vide annexure C-2 is unreasonable amounting to unfair trade practice which may please be quashed and direction be issued to recalculate the amount, if any due, by charging only the simple interest, at the rate given in allotment letter, by deducting the amount of enhancement demanded in this notice, which is also part of this demand notice and not to charge the penalty which also is included in this demand notice since this much of amount was at all not due. 3. That H.U.D.A. may directed to charge the original rate as given in the allotment letter, without adding the amount of enhancement second time. 4. Adequate compensation for mental agony and harassment may also be awarded. 5. The cost of the litigation may also be awarded.

A notice being served on the petitioner-HUDA, the complaint was resisted and it was denied that the cost of the plot was only Rs.1,46,913/- as another sum of Rs.87,163.78 ps. was required to be paid as enhanced compensation. It was further explained that 15% rate of interest is required to be applied only with regard to the payment of annual installments whereas the 18% interest was applicable only if the due installments are not paid in time which is being wrongly interpreted as compound interest. It was because the allottee had failed to pay the installments in time as also the enhanced cost of compensation with interest that he was rightly served with a demand notice for the sum of Rs.4,22,385/-. The District Forum, after taking into consideration the evidence adduced by the parties, rejected the contention of the opposite party/petitioner/HUDA with regard to their claim of enhanced compensation as they had failed to produce any evidence to show that there was any award of enhancement of compensation after the date of allotment. It also did not find any justification for the levy of interest @ 18% on compounding basis and passed the following order :- 11. In the result, the instant complaint is hereby allowed and the OPs are directed :- a) Not to charge any enhancement after allotment on 14.1.1994. b) To charge only simple contractual rate of interest. c) To recalculate the account of the complainant as per clause (a) & (b) above.

Aggrieved with this order of the District Forum, the petitioner-HUDA filed an appeal before the Haryana State Consumer Disputes Redressal Commission, Chandigarh (State Commission for short), who, taking note of the fact that the brochure of HUDA itself had stated that enhanced compensation would be recoverable from the plot holders if awarded by the court in future, did not find any merit in the appeal and dismissed the same.

IT was in this backdrop that opposite party/HUDA has filed this revision petition, seeking annulment of the order passed by the fora below. Learned counsel for the petitioner/HUDA, relying on clause 9 of the letter of allotment, has submitted that the price of the plot was tentative to the extent that any enhancement in the cost of land awarded by the competent authority was also payable proportionately by the allottees. On being asked as to why cost of the enhancement was asked for by a separate letter on the very day the letter of allotment of the plot was issued and why was the amount not incorporated in the letter of allotment, the learned counsel was not able to offer any satisfactory explanation, except to say that this cannot be treated as an omission since the additional demand was communicated on that very day.

LEARNED counsel for the respondent-complainant on this point has contended that the petitioner-HUDA, at no stage, have produced any order passed by any court of competent jurisdiction awarding enhancement after the date of the allotment and in fact the enhancement asked for had already been cushioned into the pricing of the plot. He further explained that enhanced compensation of any land acquired by the petitioner-HUDA will be applicable for the entire sector or an area and would not be applicable for a specific plot. Thus, in the absence of any details as to how much was the enhanced compensation and how it had been distributed amongst the various sectors/allottees, it has been rightly rejected by the fora below. We are inclined to agree with the contention of the learned counsel for the respondent-complainant that the charging of Rs.87,163.78 ps. on account of the enhanced compensation does not stand substantiated. In a similar case pertaining to this very issue of enhanced compensation, this Commission has already turned down the plea of HUDA in Kusum Kumari Vs. HUDA (RP No. 1374 of 1997) and no new ground has been advanced before us to make any departure from the same. Insofar as the order of the District Forum to charge only simple contractual rate of interest is concerned, we take note of the fact that the petitioner-HUDA had been issuing notice to the original allottee Shri J.K. Joshi with regard to defaults from time to time, to which there has been no response. Opportunity of personal hearing too was offered but the allottee neither objected nor paid the dues. It appears, the original allottee subsequently sold the plot to the GPA holder who too was issued notice dated 09.08.2002, asking him to deposit Rs.4,22,385/-, but rather than responding to the notice of HUDA, he straightaway rushed to District Forum and filed a consumer complaint. Not only that, he has further transferred the property to Smt. Kamla Bhatia and Shri Vikas Bhatia. The GPA holder-cum-transferee, having undertaken to pay the dues as per terms entered into between HUDA and the original allottee, cannot be permitted to derive undue benefit for his own lapse in depositing the arrears. Learned counsel for the petitioner-HUDA has contended that the respondent-complainant failed to deposit the due installments in time and had been served with various show cause notices, which have been produced before us with our permission, and, therefore, under the terms of the allotment letter, the petitioner-HUDA were entitled to charge interest @ 15% / 18% for the payment of installments/defaulted installments as applicable.

WE agree with this contention of the learned counsel since the opposite party/petitioner/HUDA operates on a no profit no loss basis and it receives funds from the other financial institutions on payment of interest, it has to charge interest on the installments as also penal interest for any default of payment in time. To that extent the order passed by the District Forum to charge only simple contractual rate of interest would not be justified. The petitioner-HUDA would be entitled to charge interest as per the terms of the letter of allotment.

WITH this modification, we dispose of the revision petition and direct the petitioner-HUDA to recalculate the account of the respondent-complainant in terms of letter of allotment but ignoring the amount of enhanced compensation and inform the respondent-complainant of the balance amount due from him, if any. The respondent-complainant would be duty bound to pay the amount so demanded within a period of two months. The revision petition is disposed of as per the above terms. However, under the facts and circumstances of the case, there will be no order as to cost.