BAHADURGARH FLAT HOLDERS ASSOCIATIONversusTHE STATE OF HARYANA AND ANR.

A             SECTOR-6, BAHADURGARH FLAT HOLDERS
                   ASSOCIATION (REGO.) AND ORS.
                                         v.
                   THE STATE OF HARYANA AND ANR.

                               DECEMBER 6, 1995
B
     [K. RAMASWAMY, B.L. HANSARIA AND S.B. MAJMUDAR, JJ.]

           Punjab Urban Estates (Development & Regulation) Act, 1964-Sec. 3
    declared urban estat,,_punjab Urban Estates (Sales of Sites) Rules,
C   1965-Pennit sale of the sites-Provisions of Haryana Urban Development
    Authority Act, 1977 and rule 5(7) of the Haryana Urban Development
    Authority (Disposal of Land and Building) Regulation, 1978-Held, not ap-
    plicable.

           An offer was made for free hold sale of plots with all modern
D   amenities like underground sewerage, storm water, drainage, roads,
    electricity, supply of potable water etc. Appellants applied for allotment as
    per terms and conditions mentioned in the memo. As per condition, No. S
    the first instalment became due, i.e. after expiry of one year from the date
    of issue of the allotment order. On the instalment not having been paid,
E   Respondent No. 2 sent notice to the member of appellllnt Association to
    pay the instalment induding 7% interest on the total price of the plol The
    members acted as required by the notices but without actually taking
    possession of the plots. The members of the appellant made various
    representations to Respondent No. 2 for early development and for deliver-
    ing the possession of the plots. It was also represented that the members
F   of the appellant Association were being charged interest without such
    delivery of possession of the plots, which according to the members was
    not permissible.

          Despite the representations, as the plots were not developed appel-
G lant No. 2 approached the High Court. The High Court held that interest
    was chargeable and as regards possession, since development was still
    taking place and as soon as the development was completed, possession of
    the plot would be offered. Aggrieved appellant preferred the present ap-
    peal.

H         On behalf of the appellant, it was contended that what was offered
                                        276
  BAHADURGARH FLATHOLDERSASSN. (REGO.) v. STATE (HANSARIA, J.]277


for allotment was developed plots and not undeveloped ones. As the plots A
are yet to be developed fully, the respondents could not have charged
interest because possession of development plots is yet to be given.

      Disposing of the appeal, this Court

      HELD : 1. The allotment being under the Punjab Rules, the               B
provisions of the Haryana Regulations cannot be called in aid and it
because of this that terms and conditions mentioned in the allotment order
of the othc~ persons can be of any. assistance to the appellants. [280-C]

      2. The power of extension given to the Estate Officer is really meant   C
to be exercised when the transfree, after receipt of possession of the land
is not in a position to complete the building; therefore interest cannot be
demanded till offer of possession is made. The Interest in the present and
similar cases had become due from 17.10.1980. It would be open to the
members of the Association to claim refund if they had paid interest, as      D
claimed in the notices by the Respondent No. 2. [280-H, 282-E-F)

      3. When parties enter contract, they are to abide by the terms and
conditions of the same, unless the same is inequitable. [282-C]

     4. The respondents are directed to develop the sector fully and not      E
almost fully within a period of six months failing which the respondent
would not only be liable for contempt but also the allottees would be
exonerated from the liability to pay any interest whatsoever. [283-B)

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2347 of
the 1981.                                                                     F

     From the Judgment and Order dated 17.10.80. of the Punjab &
Haryana High Court in C.W.P. No. 2415 of 1980.

     Y.P. Rao, S. Srinivasan and M.S. Indu Malhotra for the Appellants.       G
     The Judgment of the Court was delivered by

       HANSARIA, J. Bahadurgarh was declared as an urban estate by the
State Goverrunent of Haryana in exercise of powers conferred by section
3 of the Punjab Urban Estates (Development & Regulation) Act, 1964 H
    278                   SUPREME COURT REPORTS (1995] SUPP. 6 S.C.R.

A (hereinafter 'the Punjab Act'). The declaration of any area to be 'urban
  estate', permits the State Government, inter alia, to sell the sites in accord-
  ance with the Punjab Urban Estates (Sales of Sites) Rules, 1965 (for short
  'the Punjab Rules'). An offer was accordingly made for free hole sale of
  about 2200 plots first come first serve basis in Sector No. 6 of the estate.
B Applicants were informed that "all modern amenities like underground
  sewerage, storm water, drainage, roads, electricity, supply of portable water
  etc. will be provided". Pursuant to this invitation, a number of persons some
  of whom are the members of appellant-Association, applied for allotment.
  Appellant No. 2, Jeet Ram, is one such applicant and by memo of even
  number dated 9.8.1972, the Estate Officer, Faridabed informed Jeet Ran
C about the allotment of residential Plot No. 852 to him on terms and
  conditions mentioned in the n••mo. (Similar is the position qua other
  allottees). We are concerned with condition Nos. 4 and 5 which read as
  below:

D            "4. In case, you accept this allotment, you should send the enclosed
             acceptance in the form given at Annexure A to this letter together
             with a Bank draft for Rs. 750 in order to make 29 per cant of the
             price of the above mentioned plot within 30 days from the date of
             issue of this also tement order, the payment shaii be made by a
E            Bank draft payable to the Estate Officer, Faridabed, and drawn
             on the State Bank of India, Faridabad. In case of failure to deposit
             the said amount within the above specified period, the allotment
             shall be cancelled and the deposit of 10 per cent Earnest money
             paid with the application shall be forfeited against which you will
             have no claim.
F
             5. The balance of 80 per cent tentative price can be paid lumpsum
             without interest within 60 days from date of issue of this allotment
             letter or in the annual equated instalments with 7 per cent interest
             as laid down in Rule No. 12 framed under section 23(2) (b) (3)
G            (3) of the Punjab Urban Estates (Development and Regulation)
             Act, 1964. The first instalment shall fall due after the expiry of one
             year from the date of issue of this allotment order."

          2. As per condition No. 5 aforesaid, the first instalment became due
H on 9.8.1973, that is, after expiry of one year from the date of issue of the
  BAHADURGARHFIATHOLDERSASSN.(REGD.) v.STATE(HANSARIA,J.)279

allotment order On the instalment not having been paid, respondent No. A
2, the Estate Officer, sent notices to the members of the appellant-Associa-
tion to pay the instalments including 7% interest on the total price of the
plot. Failing which, it was stated, that action under section 1910 of the
Punjab Act would be taken which visualises resumption and forfeiture. The
members of the Association acted as required by the notices but without B
actually taking possession of the plots. It was so because the plots had not
been developed as visualised by the advertisement seeking applications.
Various representations were made to respondent No. 2 for early develop-
ment and for delivering the possession of the plots. It was also represented
that the members of the Association were being charged interest without
actual delivery of possession of the plots which according to the members C
was not permissible.

      3. Despite the aforesaid representations, as the plots were not
developed, appellant No. 2 approached the High Court of Punjab &
Haryana by invoking its jurisdiction Article 226 of the Constitution. The D
High Court has held in the impugned order that interest was chargeable.
As regards possession, the following observation was made in para 4 :

        "4. As regards possession, it may be noticed that the stand of the
        respondents was that development is still taking place and as soon
        as the development is completed, possession of the plot would be        E
        offered to petitioner No. 1. It was further stated at the bar that in
        case the petitioner is interested in taking possession of the un-
        developed plot, they are prepared. Counsel for the petitioner was
        not prepared to accept this offer."
                                                                                F
      Feeling aggrieved at the view taken by the High Court this appeal
has been preferred under Article 186.

      4. Shri Bhandare, learned senior counsel for the appellants, has
strenuously contended that what was offered for allotment was developed
plots and not undeveloped ones. The follow up submission is that as the G
plots are yet to be developed fully, the respondents could not have charged
interest because possession of developed plots is yet to be given. The stand
of the respondents on the other hand is that charging of interest is not
co-related to the delivery of possession, as is in case of allotments under
the provisions of Haryana Urban Development Authority Act, 1977 in view H
                   ~-·'
   280                   SUPREME COURT REPORTS (1995) SUPP. 6 S.C.R.

A of what has been mentioned in Rule 5(7) of the Haryana Urban Develop-
  . ment Authority (Disposal of Land and Buildings) Regulations, 1978, (brevi
    mani Haryana Regulations) provision in which would not apply to the case
    at hand inasmuch as the same is not the requirement of the Punjab Rules.
    Ms. Nisha, appearing for the respondents, submitted that as per Rule 12(2)
B of the Punjab Rules, interest accrues from the date of the issue of the
    allotment order as has been mentioned in the aforesaid condition No. 5.

        5. The allotment in the present case being under the Punjab Rules,
  we are satisfied that the provisions of the Haryana Regulations cannot be
  called in aid and it is because of this that terms and conditions mentioned
C in the allotment order of other persons, an instance of which is the
  allotment to one Surat ;<;ngh by memo No. 23 dated 28.2.1979, can be of
  no assistance to the appellants. Shri Bhandare's alternative submission is
  that in any case as possession of developed plots has yet not been given,
  interest cannot be demanded, even as per the scheme visualised by the
D Punjab Rules. A perusal of the Rules shows that after applications are
  made for allotment and the same are accepted, possession of the site is
  required to be delivered to the transferee, as mentioned in Rule 7, after
  he has paid 25% of the price. Another provision of the Rules which is
  required to be noted is that the transferee i~ re<1mred to complete the
E building within three years from the date of issue of allotment order as per
  Rule 14, though this time limit may be extended by the Estate Officer, if
  he is satisfied that the failure to complete the building within the period of
  three years was due to causes beyond the control of the transferee.

          6. We are thus satisfied that if the Rules are read as a whole,
F possession of the allotted plot is required to be given within reasonable
  time after payment of 25% of the price. Rule 14 itself would indicate that
  possession has to be delivered soon after the allotment order to enable the
  transferee to complete the building within three years from the date of
  issue of allotment order. The submission of Ms. Nisha is that Rule 14
G having visualised extension of the time limit, this Rule would not require
  delivery of possession soon after the payment of the 25% of the price.
  According to us, this submission cannot be accepted because the power of
  extension given to the Estate Office is really mearit to be exercised when
  the transferee, after receipt of possession of the land, is not in a position
H to complete the building. We, therefore, hold that interest cannot be
  BAHADURGARH FLAT HOLDERS ASSN. (REGD.) v. STATE [HANSARIA, J.}281.


demanded till offer of possession is made. There is no dispute that appel-     A
!ant No. 2 had paid the required amount. It is also not in dispute that the
possession of the plot was not delivered within reasonable time thereafter.

       7. Shri Bhandare has taken pains to persuade us to hold that it is
incumbent on the part of the Estate Officer to deliver possession of
developed plots and as even by 1985 such plots had been offered for            B
delivery, as would appear from the order passed by this Court itself on
14.1.1985, there can be no justification in demanding payment of interest.
As per the learned counsel, full development is yet to take place inasmuch
as the statements made by the respondents in their application for vacation
of stay, which was registered as I.A. No. 2 of 1992, were as below :           C

        "(1) That the Sector-6, Bahadurgarh is almost fully developed.

        (2) That 150 houses are constructed for which the completion
        certificates have been issued.
                                                                               D
        (:>) That near about 250 houses are under construction.

        (4) That water supply work is completed.

        (5) That road works in the sector is also completed.

        {6) That the internal sewerage line S.W.D. (Storm Water drainage)      E
        have been laid down and temporary disposal has been completed.'

      Ms. Nisha, however, states that this position was in 1992; by now, she
has instruction to say that plots have been fully developed.

       8. To decide the aforesaid submission of Shri Bhandare we would
                                                                               F
really be required to find out as to whether the offer was of developed
plots or undeveloped plots. As the offer had stated that modern amenities
noted above "will be provided", it cannot be held that till the amenities as
mentioned have become fully functional, the offer is incomplete. It is for
this reason that the fact that full development has not yet taken place, even G
if that be the position as contended by Shri Bhandare, cannot be a ground
to hold that interest has not become payable. It is true that the applicants
were given to understand that the amenities notes above would become
available (and within reasonable time), fact that the same did not become
available to the desired extent could not be a ground not to accept delivery H
    282                   SUPREME COURT REPORTS (1995) SUPP. 6 S.(:.R.

A of possession. From the order of the High Court which we have quoted
    above, we find that the offer of possession of the undeveloped plot was not
    accepted by the counsel of the appellant. That order being of 17th October,
    1980, we are of the view that interest did become payable from that date.
    The fact that plot has not yet been fully developed, as is the case of the
B   appellant, has, therefore, no significance in so far as charging or interest is
    concerned. We are not in a position to accept the submission of Shri
    Bhandare that equity would not demand charging of interest, even though
    the plots are yet to be fully developed. When parties enter into contract,
    they are to abide by the terms and conditions of the same, unless the same
    be inequitable. In the present case, question of equity does not really arise
C   inasmuch as the condition relating to interest is founded on a statutory rule,
    vires of which has not been challenged. The provision in a cognate rule
    cannot alter the consequence which has to follow from the rule which holds
    the field. In the present case it being the Punjab Rules under which the
    allotment was made, we are not in a position to agree with Shri Bhandare,
D   despite his forceful submission, that the appellants may not be asked to pay
    interest, despite their having been no offer of delivery of possession of fully
    developed plots.

          9. We, therefore, hold that the interest in the present and similar
E   cases had become due from 17th October, 1980. We understand from Shri
    Bhandare that most of the members of the appellant-Association had paid
    the instalments with interest as per the notice of the respondent No. 2
    According to us, as interest became chargeable from 17th October, 1980,
    it would be open to the members of the Association to claim refund if they
F   had paid interest, as claimed in the notices issued by the respondent No.
    2.

          10. We do not propose to leave the matter at this. The allotments
    having been made about two decades ago, there can be no justification in
    not fully developing the plots even by 1992. The statement in I.A. No. 2 of
G   1992 that the sector is "almost fully developed" and that "temporary dis-
    posal has been completed" do speak about lack of proper interest and
    attention on the part of the respondents. In this connection we would state
    that a statement had been made on behalf of the respondent before this
    Court on 14.1.1985 that possession of the developed plots would be given
H   to the appellants within a period of six months, and so such a direction was
  BAHADURGARH FIATHOIDERS ASSN. (REGD.) v. SfATE (HANSARIA, J.]283


given. Shri Bhandare states that direction is yet to be complied with in A
letter and spirit. It is this complaint which has given rise to Contempt
Petition No. 22 of 1989. On the facts and circumstances of the case, we do
not propose to pursue the contempt application and would direct the
respondents once again to develop the sector fully, and not, "almost fully".
This would be done within a period of six months, failing which the B
respondents would not only be liable for contempt but the allottees would
be exonerated from the liability to pay any interest whatsoever.

         11. The appeal is disposed of accordingly, without any order as to
costs.

R.S.                                                   Appeal disposed of.
                                                                              c