Haryana Urban Development Authority vs Tarun Textile

Rajesh Bindal, J.—The defendants are in appeal against the judgment and decree of the lower appellate court whereby that of the trial court was reversed, as a result of which the suit filed by the respondent for declaration with consequential relief of permanent and mandatory injunction, was decreed.

In the case in hand, the respondent filed a suit pleading that it was allotted industrial plot No. 208 in Textile Valley Rojka Meo, District Gurgaon, now District Mewat measuring 1,950 square meters. Provisional letter of allotment was issued on 5.5.1994 after the respondent had already paid 25% of the total allotment money. In terms of the provisional letter of allotment, the plaintiff was to complete certain formalities within a period of 180 days. Haryana Urban Development Authority (for short, ''HUDA'') finding that the plaintiff did not complete the formalities, withdrew the provisional letter of allotment on 22.8.1996. In appeal, withdrawal of provisional letter of allotment was set aside by Administrator, HUDA vide order dated 22.4.1998 allowing one month''s time to the plaintiff to complete the formalities. It was further pleaded that the Administrator, HUDA found that it was on account of fault on the part of HUDA authorities that the plaintiff could not complete the formalities in time as the building plan could not be prepared in the absence of zoning plan, which was not finalised and supplied to the plaintiff. Thereafter, the plaintiff completed all the formalities within the period prescribed. It was so acknowledged even by the Estate Officer, HUDA Gurgaon in communication to the Chief Administrator, HUDA, Panchkula, but still final allotment letter was not issued. Provisional letter of allotment was again withdrawn on 21.6.2007 without opportunity of hearing to the plaintiff. The order was not even served. The plaintiff came to know after seeing a notice published in the newspaper on 1.8.2007 that the plot in question was sought to be auctioned by HUDA. It was at that stage the suit was filed which was dismissed by the trial court, whereas the learned lower appellate court decreed the same. It is the aforesaid judgment and decree, which has been impugned in the present appeal.

Learned counsel for the appellants submitted that once in terms of the provisional letter of allotment, the allottee was required to complete certain formalities within specified time, on failure HUDA had full right to cancel the provisional letter of allotment. In the case in hand, the respondent-plaintiff was asked to deposit a sum of ` 7,70,213.65 vide communication dated 26.4.1999, i.e., balance 75% of sale consideration plus interest and extension fee. The respondent having failed to do so and complete other formalities even in terms of the order passed by the Administrator, HUDA, the provisional letter of allotment was rightly withdrawn on 21.6.2007. The order was sent to the respondent-plaintiff. He further submitted that in terms of Section 50 of the Haryana Urban Development Authority Act, 1977 (for short, ''the Act''), the civil court did not have the jurisdiction and the respondent could avail of his appropriate remedy of appeal etc. in terms of the provisions of the Act.

On the other hand, learned counsel for the respondent-plaintiff submitted that after deposit of 25% of the amount of allotment money, provisional letter of allotment was issued to the respondent on 5.5.1994. In an arbitrary manner, the provisional letter of allotment was cancelled with the allegation that the respondent failed to complete the formalities, whereas the fault was on the part of HUDA. In appeal, the order of cancellation of provisional letter of allotment was set aside by the Administrator, HUDA. The respondent-plaintiff was given one month''s time to complete the formalities. The plaintiff completed all the formalities, which has been even acknowledged by the Estate Officer, HUDA, Gurgaon in his communication dated 12.1.1999 (Ex. PX) to the Chief Administrator, HUDA, Panchkula, but still final allotment letter was not issued and the HUDA authorities continued demanding 75% of the balance amount along with interest and extension fee. He further submitted that in terms of the conditions laid down in the provisional letter of allotment, final allotment letter was to be issued on completion of formalities as contained in clause thereof and balance 75% of the tentative cost of the same was payable within 3 months from the date of issue of final allotment letter in case of self financed project and within 9 months in case where term loan is to be arranged by an allottee, along with interest @ 15% per annum. However, the interest was to be charged from the date of offer of possession. As in the case in hand, despite completing all the formalities, the appellants failed to issue final allotment letter, there was no question of demand of balance 75% amount. The respondent cannot be said to be at fault.

He further submitted that the issue regarding jurisdiction was not raised by appellants either in the written statement or during the course of arguments before both the courts below. In fact, no issue to that effect has been framed by the courts and the same cannot be permitted to be raised in the present appeal as the same will not arise out of the judgment of the learned lower appellate court. He further submitted that in the circumstances, it shall be deemed to have been waived off. It was further argued that advertisement for sale of the plot was issued, that too without even cancellation of provisional letter of allotment. The cancellation of provisional letter of allotment vide order dated 21.6.2007 was never served upon the respondent. It was merely pleaded in the written statement filed by them. Under these circumstances, the only remedy available with the respondent was to file the suit. Further submission is that the decree of the lower appellate court has been complied with as final letter of allotment has been issued.

Heard learned counsel for the parties and perused the paper book.

In the case in hand, the appellants are seeking to impugn the judgment and decree of the learned lower appellate court, whereby it had passed a decree against them directing for issuance of final allotment letter while restraining from allotting the plot to any other person. It is on the plea that after the earlier withdrawal of provisional letter of allotment vide letter dated 22.8.1996 was set aside in appeal by the Administrator, HUDA vide order dated 22.4.1998, the respondent-plaintiff did not complete the formalities within a period of one month, as was granted. It failed to deposit balance 75% of the tentative allotment price, as a result of which provisional letter of allotment was withdrawn on 21.6.2007. However, the contention raised is totally misconceived if considered in the light of the conditions laid down in the provisional letter of allotment and the order passed by the Administrator, HUDA while setting aside the cancellation of provisional letter of allotment.

The Administrator, HUDA, vide order dated 22.4.1998 accepted the appeal filed by the respondent-plaintiff challenging withdrawal of provisional letter of allotment on 22.8.1996 with the following observations:

"I have heard the two parties in detail and have also gone through the record of the case. I feel that the Estate Officer had no alternative under the law except the withdrawal of PLA. The delay in sanction of building plan and sanction of loan from Financial Institution was not because of any lack of efforts on the part of the appellant. In fact, submission of building plan was delayed because of non supplying of zoning plan by HUDA. Similarly, the Financial Institution failed to sanction them the loan in spite of the formalities having been completed by the appellant. The appellant should have been heard before taking any drastic action of withdrawing of PLA. I, therefore, set aside the order of the Estate Officer. The appellant should complete the formalities within one month of the issue of this order if not already done."

A perusal of the aforesaid operative part of the order shows that the delay in completion of formalities in terms of the provisional letter of allotment within 180 days thereof was not on account of any fault of the allottee, rather, it was on account of the fact that the appellants failed to supply zoning plan. It was further noted by the Administrator, HUDA that withdrawal was without offering opportunity of hearing to the allottee.

The provisional letter of allotment issued in favour of the respondent-plaintiff on 5.5.1994 contained following relevant conditions:

"2. i) Registration of unit with the Directorate of Industries (GM/DIC) of the concerned district or registration with DGTC/Ministry of Industry, Govt. of India depending upon the size of the industrial undertaking, i.e., small, medium and large.

ii) Approval of building plan from the competent authority.

iii) Arrangement of financial resources with the financial institution.

iv) Supply of list of plant and machinery along with quotations.

The final allotment letter will be issued on completion of the above formalities. In case, you fail to complete all the above formalities within the above mentioned period, the offer shall stand withdrawn/cancelled and the amount deposited by you will be refunded after deducting 10% from it.

The balance 75% amount of the total tentative price shall be payable within three months of the date of issue of final allotment letter, in case of self financed project and within 9 months in case of term loan is arranged by you along with interest at the rate of 15% per annum. However, the interest will be charged from the date of offer of possession."

Clause 2 of the provisional letter of allotment required that the Unit was to be registered with Directorate of Industries, building plans were to be approved, arrangement of finances was to be made and list of plant and machinery along with quotations was required. The allottee was to be issued final allotment letter only after completion of four conditions laid down in clause 2 of the provisional letter of allotment. On failure, the provisional letter of allotment could be withdrawn. Clause 4 of the provisional letter of allotment provided that balance 75% of the total tentative price shall be payable within three months of the date of issue of final allotment letter in case of self financed project and within 9 months in case where term loan is to be arranged. The amount was payable along with interest @ 15% chargeable from the date of offer of possession.

Though the plea raised by the appellants is that the respondent-plaintiff failed to complete the formalities, whereas the fact remains that in a communication dated 12.1.1999 (Ex. PX) written by Estate Officer, Gurgaon to Chief Administrator, HUDA, Panchkula, it has been mentioned that the allottee was to complete four formalities as mentioned in clause 2 of the provisional letter of allotment, however, it failed to complete two formalities out of that, namely, sanction of building plan and sanction of loan from the financial institution or bank. It was further mentioned in the letter that subsequently after the order was passed by the Administrator, HUDA accepting the appeal of the allottee, even those two conditions had been completed and the allottee had been asked to pay balance 75% of the allotment price vide memo dated 10.9.1998 along with interest, but it failed to do the needful. Another letter Ex. PW1/16 dated 26.4.1999 asking the respondent to deposit ` 7,70,213/- on account of balance 75% of the allotment money along with interest and extension fee has been referred to in the judgment of learned lower appellate court. Despite the fact that admittedly the respondent had completed all the formalities as were required in the provisional letter of allotment, still final letter of allotment was not issued to it for the reasons best known to the appellants.

The plea sought to be raised that the respondent-plaintiff failed to deposit the balance amount is totally misconceived for the reason that it goes against the terms of provisional letter of allotment, which clearly provided that 75% amount was payable only after issuance of final letter of allotment and not before that. In the circumstances, the direction issued by the learned lower appellate court for issuing final letter of allotment to the respondent-plaintiff cannot be faulted with.

As far as the contention raised by learned counsel for the appellants regarding jurisdiction of the civil court is concerned, suffice to state that no such plea was taken in the written statement and no issue to that effect was framed. No arguments were addressed before both the courts below. In the case in hand, the respondent-plaintiff had not challenged cancellation of provisional letter of allotment as such before the civil court as his plea is that the order was never served upon him. It was passed at his back. He had approached the court when advertisement for sale of the plot already allotted to him had been issued on 1.8.2007. The suit was filed immediately thereafter on 24.8.2007. Under these circumstances, it cannot be said that the civil court did not have the jurisdiction.

No substantial question of law arises. Accordingly, the present appeal is dismissed with cost of ` 10,000/- to be deposited with State Legal Services Authority, Haryana within one month from the date of receipt of copy of the order.