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Friday, January 9, 2015

CIVIL APPEAL NO. 9951 OF 2014 (Arising out of Special Leave Petition (Civil) No.15445 of 2010) HUDA & Anr. ... Appellants Versus Kedar Nath ... Respondent-2014 Oct.Month - S.C.


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO. 9951 OF 2014
      (Arising out of Special Leave Petition (Civil) No.15445 of 2010)

HUDA & Anr.                                  ... Appellants


Kedar Nath                              ... Respondent

                               J U D G M E N T


1.    Leave granted.

2.    Being aggrieved by the judgment dated 10th December,  2009  in  R.S.A.
No.790 of  2008  delivered  by  the  High  Court  of  Punjab  &  Haryana  at
Chandigarh, this appeal has been filed by the original defendant  –  Haryana
Urban Development Authority, through its Chief Administrator.

3.    The facts giving rise to the present litigation in a nutshell  are  as
under :-

            The present respondent had participated in an auction  conducted
by the appellants for disposal of certain booths situated  in  Sector  9  at
Panchkula and had offered the highest bid of Rs.4  lakhs  for  booth  no.103
situated in the said sector.  As he was the highest bidder, subject  to  the
conditions of the  auction,  he  was  allotted  the  said  booth  vide  Memo
No.12351  dated  14th  September,  1988.   The  respondent   had   deposited
Rs.40,000/-, being 10% of the amount of bid, immediately and  thereafter  he
had further  deposited a sum of Rs.60,000/- so as to make 25% of  the  total
amount offered by him.

4.    The balance amount of Rs.3 lakhs was to be paid by the  respondent  to
the appellant authorities in 10 half yearly instalments along with  interest
@ 10% per annum.   There was a condition in the auction sale  that  in  case
of default in payment, the respondent had to pay interest @  10%  per  annum
on the unpaid amount and it  was  also  open  to  the  appellant  to  impose
further amount of penalty and to resume possession of the booth.

5.     It  is  an  admitted  fact  that  the  respondent  committed  several
irregularities in making payment of the remaining amount.   As  he  did  not
pay the remaining instalments, he was called upon  to  pay  the  same  along
with interest @ 18% per annum,  compounded  quarterly.  In  the  aforestated
circumstances, the respondent had filed a suit challenging the  validity  of
the  action  of  the  appellant  of  charging  18%  compound  interest   and
resumption of the booth.

6.    It was mainly contended in the suit filed by the  respondent  that  it
was not open to the appellant to charge 18%  compound  interest.   According
to the respondent, the appellant could have charged  only  10%  interest  on
the delayed payments.

7.    After considering relevant evidence, the trial court had  decreed  the
suit, especially on the ground that it was not  open  to  the  appellant  to
charge 18% compound interest.

8.    Being aggrieved by the final outcome of the suit,  the  appellant  had
filed first appeal, but the same had been dismissed.

9.    In the aforestated circumstances,  the  appellant  had  filed  Regular
Second Appeal No.790 of 2008 before the High Court.

10.   After considering the  facts  and  submissions  made  by  the  learned
counsel, the High Court dismissed the second appeal by  observing  that  the
appellant was entitled to charge only 10%  interest  and  not  18%  interest
compounded quarterly, as demanded by the appellant.

11.    The  learned  counsel  appearing  for  the  appellant  authority  had
submitted that though the respondent had succeeded in the suit  as  well  as
in the first appeal and the second appeal, till the  date  of  admission  of
the present appeal, the respondent had not made  payment  and  it  had  also
been submitted that the respondent’s bona fides were doubtful.

12.   In the aforestated circumstances, so as to see whether the  respondent
was in fact interested in retaining the booth in question,  this  Court  had
passed an order on 17th February, 2014, directing the appellant as  well  as
the respondent to place on record their  calculations  with  regard  to  the
amount payable by the respondent on the basis of interest @  10%  per  annum
on the unpaid instalments.  In pursuance of the aforestated  direction,  the
appellant had given a statement giving details about the amount  payable  by
the respondent with 10% interest on the unpaid instalments.  The  respondent
had been directed to make the payment from time to time so as  to  know  his
bona fides.

13.   Finally, on 5th September,  2014,  this  Court  had  passed  an  order
directing the respondent to pay at least Rs.13 lakhs  before  10th  October,
2014 and the said amount was, in fact, much lesser  than  the  amount  which
was payable by the respondent even as per his own statement of accounts.

14.   In spite of the aforestated direction, the respondent did not pay  any
amount towards the unpaid instalments and interest thereon.

15.   With the  passage  of  time,  value  of  the  property  has  increased
substantially and it is clear that the respondent is  not  inclined  to  pay
the unpaid amount along with interest thereon even at the rate  of  10%  per
annum, which was agreeable to  him.   It  is  also  an  admitted  fact  that
without  taking  any  permission  from  the   concerned   authorities,   the
respondent has put up  construction  on  the  booth  in  question.   In  the
aforestated circumstances, it had been  submitted  by  the  learned  counsel
appearing for the appellant that the  impugned  order  passed  by  the  High
Court is unjust and improper for the reason  that  the  respondent  had  not
even paid the amount payable by him, though several opportunities  had  been
given to him.   He had further submitted that  as  the  respondent  had  not
paid the amount, the appellant had a right  to  recover  possession  of  the
booth in question but  the  appellant  could  not  take  possession  due  to
interim orders passed by the Courts below.   He  had,  therefore,  submitted
that the impugned judgment deserves to be quashed and set aside.

16.   On the other hand, the learned counsel appearing  for  the  respondent
had expressed financial difficulties of the respondent  and  submitted  that
he was prepared to make some payment on account,  though  it  could  not  be
denied by  the  learned  counsel  appearing  for  the  respondent  that  the
appellant was lawfully entitled to take possession of the booth in  question
on account of non-payment of the unpaid instalments  and  interest  thereon.
He had, therefore, submitted that in the interest  of  justice,  the  appeal
should be dismissed and some more time should be granted to  the  respondent
to make the payment.

17.   We have heard the learned counsel for the parties at length  and  have
considered the facts of the case.  After hearing the concerned  counsel  and
looking at the facts of the case, we find that it is an admitted  fact  that
the respondent did not make payment of the unpaid instalments and also  that
the appellant has a right to resume possession of the booth in the event  of
non-payment of the auction price of the booth.  The auction had taken  place
in September, 1988.  The balance amount of Rs.3 lakh was to be paid  in  ten
half-yearly instalments.   Hence, the entire amount ought to have been  paid
within five years thereafter i.e. by the end of 1993.

18.   Even if we come to a conclusion that the High Court was right  in  not
permitting the appellant to recover compound interest @ 18%  per  annum,  it
is an admitted fact that the respondent did not pay interest even @ 10%  per
annum, to which he could not have objected.

19.   In spite of the fact that the amount was to be paid before 1993,  even
today in 2014, neither the respondent has paid the unpaid amount along  with
interest thereon, nor has he shown willingness  to  make  the  payment  when
ample opportunities were given to him  by  this  Court  for  making  payment
along with interest @ 10% per annum on the amount due and payable.

20.   The above facts clearly show that the respondent is  not  having  bona
fide intention and is merely trying to remain in possession  without  making
payment of the bid amount, which he  had  agreed  to  pay.   It  is  not  in
dispute that the appellant authority is entitled to take possession  in  the
event  of  non-payment  of  the  entire  price  of  the  booth,  which   the
respondent, as  an  auction  purchaser,  had  agreed  to  pay.    Thus,  the
respondent has been committing default  continuously.   The  respondent  has
also put up illegal construction on the booth/land allotted to  him  without
taking any permission from the concerned authority.

21.   Looking  at  the  fact  that  the  appellant  is  entitled  to  resume
possession of the booth on account of non-payment of the  price,  but  still
the respondent is in possession of the same.

22.   Though sufficient opportunities were given to the respondent  to  make
payment of the price, the respondent has not paid the same.  Hence,  in  our
opinion, the Courts below had become more  lenient  than  necessary  towards
the respondent by permitting him  to  retain  possession  and  make  payment
along with 10% interest on the amount due and payable by him.

23.   Upon looking at the overall facts, in our opinion,  it  would  not  be
proper to grant  any  further  accommodation  to  the  respondent,  who  has
admittedly not paid the amount due and therefore, we  allow  the  appeal  by
quashing and setting aside the orders passed by the courts below.  It  would
be open to the appellant to take possession of  the  booth  in  question  in
accordance with law.

24.   The appeal is, accordingly, allowed with no order as to costs.

                                                  (ANIL R. DAVE)

                                                  (KURIAN JOSEPH)

                                                  (R.K. AGRAWAL)
OCTOBER 29, 2014.

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