Supreme Court of India
PUNJAB URBAN PLANNING & DEV. AUTHORITY & ORS.versusRAGHU NATH GUPTA & ORS.
- Citation
- 2012 INSC 332
- Decided
- 16 August 2012
- Disposal
- Appeal(s) allowed
- Bench
- K S RADHAKRISHNAN
Holding
Allottees who accept a plot on an "as is where is" basis are bound by the auction terms and must pay the stipulated interest, penal interest and penalty despite any delay in provision of amenities.
Summary
The Punjab Urban Planning & Development Authority (PUDA) conducted a public auction of commercial plots on an "as is where is" basis, offering installment payment with interest, penal interest and penalty for delayed installments. The successful bidder, Raghu Nath Gupta, accepted the allotment and later claimed that PUDA should not charge interest until basic amenities were provided, obtaining a writ from the High Court directing PUDA not to levy such charges. PUDA appealed, arguing that the allottee had accepted the terms, including the "as is where is" condition, and that there was no substantial delay in providing amenities. The Supreme Court held that the allottee was estopped from denying liability for interest, penal interest and penalty, as the auction terms were clear and the amenities were provided without undue delay. Consequently, the Court set aside the High Court's order, dismissed the writ petitions and allowed the appeals.
Issues considered
- Whether the allottees are liable to pay interest, penal interest and penalty on delayed installment payments after accepting a commercial plot on an "as is where is" basis.
- Whether the delay in provision of basic amenities by PUDA bars the authority from levying interest and penalties.
Subjects
public auctionas is where isinstallment paymentinterest on installmentspenal interestpenaltyurban development authoritybasic amenitiesestoppelcontractual terms
Judgment
[2012] 8 S.C.R. 118
A PUNJAB URBAN PLANNING & DEV. AUTHORITY & ORS.
v.
RAGHU NATH GUPTA & ORS.
(Civil Appeal No. 5887 of 2012 etc.)
AUGUST 16, 2012
B
[K.S. RADHAKRISHNAN AND MADAN B. LOKUR, JJ.]
URBAN DEVELOPMENT:
c Allotment of commercial plots in auction by Urban
Development Authority - On 'as is where is' basis - Allottee
accepting the same - Allottee taking the instalment facility for
payment of the cost of the site - Allotment letter stipulating
for interest, penal interest and penalty for delayed payment
0 of instalment - Writ petition by allottee seeking direction to
the Authority not to charge interest on the instalments till the
basic amenities were provided on the site - Writ allowed by
High Court - On appeal, held: The allottee having accepted
the allotment on 'as is where is' basis, is estopped from
E seeking basic amenities from the Authority - On facts, there
was not much delay in providing the basis amenities by the
Authority - Therefore, allottee liable to pay the interest, penal
interest and penalty on account of delayed payment of
instalments.
F The question for consideration in the present
appeals was whether the respondents were legally
obliged to pay the interest, penal interest and penalty on
account of delayed payment of instalments after having
accepted the allotment of commercial plots by way of
G auction.
The High Court, in the impugned order had taken the
view that since there was delay on the part of the
appellant-Authority in providing the basic amenities in
H 118
I
PUNJAB URBAN PLANNING & DEV. AUTHORITY v. 119
RAGHU NATH GUPTA
time, it could not have legally claimed the interest, penal A
interest and penalty on account of delayed payment of
instalments.
Allowing the appeals, the Court
HELD: The High Court was not justified in holding B
that the respondents were not liable to pay the interest,
penal interest and penalty for the belated payment of
installments. The respondents had accepted the
commercial plots with the open eyes, subject to the terms
and conditions stipulated in the auction Notification. C
Evidently, the commercial plots were allotted on "as is
where is" basis. The allottees would have ascertained the
facilities available at the time of auction and after having
accepted the commercial plots on "as is where is" basis,
they cannot be heard to contend that the appellant- D
Authority had not provided the basic amenities like
parking, lights, roads, water, sewerage etc. If the allottees
were not interested in taking the commercial plots on "as
is where is" basis, they should not have accepted the
allotment and after having accepted the allotment on "as E
is where is" basis, they are estopped from contending
that the basic amenities were not provided by the
appellant-Authority when the plots were allotted. The facts
would clearly indicate that there was not much delay on
the part of the appellant-Authority to provide those F
facilities as well. [Paras 12 and 15] [125-8-E; 127-F]
Municipal Corporation, Chandigarh and Ors. v.
Shantikunj Investment (P) Ltd. 2006 (4) SCC 109: 2006 (2)
SCR 768; UT Chandigarh Administration and Anr. v.
Amerjeet Singh and Ors. (2009) 4 SCC 660: 2009 (4) G
SCR 541- relied on.
Case Law Reference:
2006 (2) SCR 768 Relied on Para 12
H
120 SUPREME COURT REPORTS (2012] 8 S.C.R.
A 2009 (4) SCR 541 Relied on Para 12
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5887 of 2012.
From the Judgment & Order dated 5: 11.2008 of the High
B Court of Punjab & Haryana at Chandigarh in Civil Writ Petition
6929 of 2007.
WITH
C.A.No. 5888 of 2012.
c Rachana Joshi lssar, Nidhi Tiwari, Ambreen Rasool for the
Appellants.
P.S. Patwalia, Tushar Bakshi, Raja! Singh, Arnita Gupta,
Jagjit Singh Chhabra for the Respondents.
D
The Judgment of the Court was delivered by
K.S. RADHAKRISHNAN, J. 1. Leave granted.
2. The questions raised in both these appeals are the
E same, hence, we are disposing of both the appeals by a
common judgment.
3. The question that has come up for consideration in
these appeals is whether the respondents are legally obliged
F to pay the interest, penal interest and penalty on account of the
delayed payment of installments after having accepted the
allotment of commercial plots by way of auction. The High Court
has taken the view that since there was delay on the part of
the Punjab Urban Planning and Development Authority (for short
G "PUDA") in providing the basic amenities like parking, lights,
road, water, sewerage etc. in time, PUDA cannot legally claim
the interest, penal interest as well as penalty on account of the
delayed payment of installments. The High Court placed
reliance on the judgment of this Court in Municipal Corporation,
Chandigarh and Ors. v. Shantikunj Investment (P) Ltd. (2006)-
H
PUNJAB URBAN PLANNING & DEV. AUTHORITY v. 121
RAGHU NATH GUPTA [K.S. RADHAKRISHNAN, J.]
4 SCC 109 to reach that conclusion. A
4. We heard Mrs. Rachna Joshi, learned counsei
appearing on behalf of PUDA as well as Shri P.S. Patwalia,
learned senior counsel assisted by Mr. Tushar Bakshi,
appearing for the respondents. 8
5. For the disposal of these appeals, we may refer to the
facts of Civil Appeal No ..... : . of 2012 [arising out of SLP (Civil)
No. 8732 of 2009], as follows:
PUDA, on 16.3.2001, conducted a public auction for sale c
of the commercial plots. Raghu Nath Gupta, the respondent
was the successful bidder of a single storey shop no. 134 in
Phase Ill BIT, for a total consideration of Rs.31,75,000/-. The
possession of the said shop was handed over to the
respondent on 25.5.2001 on payment of Rs.7,93,750/- being o
25% of the total cost of site. Installment facility was extended
to the respondent for paying the balance 75% of the amount,
that was Rs.23,81,250/- The relevant clauses of the Allotment
Letter dated 16.3.201 j are extracted below for easy reference:
"4. The sum of Rs.7,93,750/- being 25% of the total E
cost of the site deposited by you after the ..... been
adjusted as 25% of the sale.
5. The balance amount i.e. Rs.23,81,250/- being 75%
of above piece of the writ, can be paid in lump sum F
without interest within 60 days from the date of
auction or in 4 equated yearly installments along
with interest@ 15 % per annum.
6. The annual quoted installment with interest@ 15% G
per annum will be payable as per the following
schedule:
H
122 SUPREME COURT REPORTS (2012] 8 S.C.R.
A Installment Due date Amount of Interest Total amount
Installment payable
1st 16.3.2002 5,95,313/- 3,57,188/- 9,52,501/-
B 2nd 16.3.2003 5,95,313/- 2,67,891/- 8,52,501/-
3rd 16.3.2004 5,95,312/- 1,78,594/- 7,73,906/-
4th 16.3.2005 5,95,312/- 89,297/- 6,84,609/-
c 23,81,250/- 8,92,970/- 32,74,220/-
In case the installment is not paid on the 10th of the month
following the month in which it falls due, PUDA can impose
penalty. Th~ penalty Clause 9 reads as follows:
D "9. In case the installment is not paid by the 1oth of the
month following the month, in which it falls due, the
Estate Officer shall proceed to take action for
imposition of penalty charged @ 2% per month of
the amount i.e. from the due date in addition to
E normal simple interest. In case of non-payment of
the installment along. with interest due thereon for
a continuous period of 3 months, the whole or any
part of the money paid in respect of the site shall
be forfeited and the Estate Officer shall cancel the
F allotment and resume the site, after giving you
appropriate notice and an opportunity of being
heard shall continue to be charged in the whole due
amount till the date of payment of amount due."
G 6. Above mentioned conditions were accepted and the plot
was allotted. On getting possession after payment of 25% of
the total cost, respondent raised construction on the allotted site
in the year 2002. PUDA completed the development work by
20.12.2002 and provided all the facilities for the enjoyment of
the various commercial plots allotted.
H
•
PUNJAB URBAN PLANNING & DEV. AUTHORITY v. 123
RAGHU NATH GUPTA [K.S. RADHAKRISHNAN, J.]
High Court seeking a direction to PUDA not to charge interest A
on the balance installments till the basic amenities were
provided on the site. The writ petition was disposed of by the
High Court on 22.4.2002 directing the Estate Officer, PUDA,
Mohali to pass a speaking order. Consequently, the Estate
Officer passed the order on 5.9.2002 rejecting the demand B
made in the notice, which was challenged by the respondents
by filing CWP No. 18753 of 2002, which was disposed of vide
order dated 13.7.2006 directing the respondents to file detailed
representations before the Additional Chief Administrator.
Consequently, a detailed representation was filed by the c
respondents on 29.8.2006 before the Additional Chief
Administrator stating that since PUDA had failed to provide the
basic amenities like drinking water, drainage and public toilets,
respondents were not legally obliged to pay interest, penal
interest, penalty etc. on the delayed installments. PUDA took
0
up the stand before the Additional Chief Administrator that the
basic amenities like parking, lights, roads, water, sewerage etc.
were not provided at the site when they were allotted, but the
toilet was shown near SCF No. 124-125. PUDA submitted that
the electrical works had been completed by 24.12.2002, public E
health works had been completed by 22.11.2002 and the
development of the commercial pocket had been completed
by 20.12.2002.
8. After having examined the contentions raised by both,
respondents and PUDA, the Additional Chief Administrator F
rejected the representation vide his order dated 31.3.2007,
which was challenged by the respondents before the High Court
by filing CWP No. 6929 of 2007. The High Court allowed that
CWP vide its judgment dated 5.11.2008 placing reliance on
the judgment of this Court in Shantikunj Investment (supra), G
which is impugned before this Court.
9. Mrs. Rachana Joshi took us through the terms and
conditions of Auction Notice and also to the various terms and
conditions of the allotment, as well as the judgment of this Court H
124 SUPREME COURT REPORTS [2012) 8 S.C.R.
A in Shantikunj Investment (supra).
10. Shri P.S. Patwalia submitted that the High Court was
justified in allowing the writ petition, since there was a failure
on the part of PU DA in providing the necessary facilities for
enjoyment of the plots allotted to the respondents. Further, it
8
was also contended by the learned senior counsel that the High
Court had rightly applied the principle laid down by this Court
in Shantikunj Investment (supra).
11. We are of the view that the terms and conditions
C stipulated in the auction notification for allotment of commercial
plots, published by PUDA, has got considerable bearing in
resolving the disputes between the parties. We, therefore,
called for the auction notification published by PUDA and the
same was made available to us. There was no dispute that the
D plots were auctioned on 16.3.2001 on the basis of the terms
and conditions stipulated therein. Clause 25 is the most
important clause, which binds both the parties, reads as follows:
"25. The site is offered on "as is where is" basis and the
Authority will not be responsible for leveling the site
E
or removing the structures, if any, thereon."
In other words, the plot in question was auctioned on "as is
where is" basis and the same was accepted by the respondent
on "as is where is" basis. Plot was allotted to the respondent
F by PUDA vide Memo No. A-5/2001/3192 dated 25.5.2001.
The relevant terms and conditions of the allotment have already
been referred to by us in the earlier part of the judgment.
Respondents could have paid the entire amount in lump sum,
however, they availed off the installment facility offered. It was
G made clear in the allotment letter that, in case, there was a
failure to pay the installment by the 10th of the month following
the month in which the payment fell due, the Estate Officer
should proceed to take action for imposition of penalty charged
@ 2% per month of the amount i.e. from the due date in addition
H to normal simple interest. Further, it was also stated in the
PUNJAB URBAN PLANNING & DEV. AUTHORITY v. 125
RAGHU NATH GUPTA [K.S. RADHAKRISHNAN, J.]
allotment letter that in case of non-payment of installment along A
with interest due thereon for a continuous period of three
months, the whole or any parts of the money paid in respect of
the site, should be forfeited and the Estate Officer could even
cancel the allotment.
B
12. We notice that the respondents had accepted the
commercial plots with the open eyes, subject to the above
mentioned conditions. Evidently, the commercial plots were
allotted on "as is where is" basis. The allottees would have
ascertained the facilities available at the time of auction and C
after having accepted the commercial plots on "as is where is"
basis, they cannot be heard to contend that PUDA had not
provided the basic amenities like parking, lights, roads, water,
sewerage etc. If the allottees were not interested in taking the
commercial plots on "as is where is" basis, they should not have
accepted the allotment and after having accepted the allotment D
on "as is where is" basis, they are estopped from contending
that the basic amenities like parking, lights, roads, water,
sewerage etc. were not provided by PUDA when the plots were
allotted. Over and above, the facts would clearly indicate that
there was not much delay on the part of PUDA to provide those E
facilities as well. As noted, the electrical works and health works
were completed by 24.12.2002 and 22.11.2002 respectively
and all the facilities like parking, lights, roads, water, sewerage
etc. were also provided.
F
13. On facts, we find that this is not a case where PUDA
was callous or indifferent or had caused an inordinate delay in
providing the basic facilities to allottees. In our view, the High
Court has not properly comprehended the scope of the
judgment of this Court in Shantikunj Investment {supra) and G
the terms and conditions of the auction. This Court, in that case,
has specifically held as follows:
"26 ....... It is the common experience that for full
development of an area it takes years. It is not possible in
every case that the whole area is developed first and H
126 SUPREME COURT REPORTS [2012] 8 S.C.R.
A allotment is served on a platter. Allotment of the plot was
made on an as is where is basis and the Administration
promised that the basic amenities will be provided in due
course of time. It cannot be made a condition
precedent. ........... .
B
28. It is true that once allotment of the land has been
made in favour of the allottee, he can take possession of
the property and use the same in accordance with the
Rules. That does not mean that all the facilities should be
provided first for so called enjoyment of the property as this
c was not the condition of auction. The party knew the
location & condition prevailing thereon. The interpretation
given by the Division Bench of the High Court of Punjab &
Haryana and contended before us cannot be accepted as
a settled proposition of law ............ .
D
(emphasis supplied)"
We may also refer to another judgment of this Court in UT
Chandigarh Administration and Anr. v. Amerjeet Singh and
E Ors. (2009) 4 SCC 660, in which, after having referred to the
judgment of this Court in Shantikunj Investment case, this Court
held as follows:
"19 ............. In a public auction of sites, the position
is completely different. A person interested can inspect the
F sites offered and choose the site which he wants to acquire
and participate in the auction only in regard to such site.
Before bidding in the auction, he knows or is in a position
to ascertain, the condition and situation of the site. He
knows about the existence or lack of amenities. The
G auction is on 'as is where is basis'. With such knowledge,
he participates in the auction and offers a particular bid.
There is no compulsion that he should offer a particular
price.
20. Where there is a public auction without assuring
H
•
PUNJAB URBAN PLANNING & DEV. AUTHORITY v. 127
RAGHU NATH GUPTA [K.S. RADHAKRISHNAN, J.]
any specific or particular amenities, and the prospective A
purchaser/lessee participates in the auction after having
an opportunity of examining the site, the bid in the auction
is made keeping in view the existing situation, position and
condition of the site. If all amenities are available, he would
offer a higher amount. If there are no amenities, or if the B
site suffers from any disadvantages, he would offer a
lesser amount, or may not participate in the auction. Once
with open eyes, a person participates in an auction, he
cannot thereafter be heard to say that he would not pay
the balance of the price/premium or the stipulated interest c
on the delayed payment, or the ground rent, on the ground
that the site suffers from certain disadvantages or on the
ground that amenities are not provided."
14. We are of the view that the judgment in Amarjeet Singh
(supra) is a complete answer to the various contentions raised D
by the respondents. We may reiterate that after having
accepted the offer of the commercial plots in a public auction
with a super imposed condition i.e. on "as is where is" basis
and after having accepted the terms and conditions of the
allotment letter, including installment facility for payment, E
respondents cannot say that they are not bound by the terms
and conditions of the auction notice, as well as that of the
allotment letter. On facts also, we have found that there was no
inordinate delay on the part of PUDA in providing those
facilities. F
15. We are of the view that the High Court was not justified
in holding that the respondents are not liable to pay the interest,
penal interest and penalty for the period commencing from
1.6.2001 to 31.12.2002 for the belated payment of installments. G
Consequently, the judgments of the High Court are set aside
and the writ petitions would stand dismissed and the appeals
would stand allowed as above. There will be no order as to
costs.
K.K.T. Appeals allowed. H
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