Sabiha Jamal Vs State of U.P. Thru Secy. and Others

Court No. - 32

Case :- WRIT - C No. - 11386 of 2012

Petitioner :- Sabiha Jamal Respondent :- State Of U.P. Thru Secy. And Others Counsel for Petitioner :- R.K. Gupta Counsel for Respondent :- C.S.C.,A.P. Srivastava,Anand Prakash Srivastava,Chandra Shekhar Singh

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Hon'ble Shashi Kant Gupta,J.

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Hon'ble Piyush Agrawal,J.

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1. Heard Sri R.K. Gupta, learned counsel for the petitioner, Standing Counsel for State-respondent nos. 1, 4 and 5 and Sri Chandra Shekhar Singh, learned counsel appearing on behalf of respondent nos. 2 and 3.

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2. The present writ petition has been filed for the following amongst other relief:-

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“i) Issue a suitable writ order or direction in the nature of certiorari quashing the impugned recovery notice dated 15.7.2009 as well as O.T.S. Notice dated 13.2.2012 passed by respondent no. 3 (Annexure No. 7 to this writ petition).

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ii) Issue a suitable writ order or direction in the nature of mandamus directing the respondents not to adopt any coercive measure and also not to realize the penal interest from the Government Order/ Circular/ Office Letter dated 19.11.1994/25.03.1995 and 19.11.2011 to the petitioner within a reasonable time as fixed by this Hon'ble Court.

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iii) Issue a suitable writ order or direction in the nature of mandamus directing the concerned respondents to furnish the correct statement of account after giving the rebate pursuant to the Government Orders and finalize sale deed in favour of the petitioner by the respondent no. 2.”

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3. The petitioner contend that he belongs to the economically weaker section (E.W.S.) of the society. For settlement of the E.W.S. of the society, the Uttar Pradesh Awas Evam Vikas Parishad launched a scheme known as Bhumi Vikas Evam Grihastha Yojna No.7 in early eighties for

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allotment of small residential houses to the E.W.S. of the society.

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4. Under the said scheme, the petitioner applied for allotment of E.W.S. residential houses. The respondents processed the papers and accepted the application of the petitioner and an allotment order was issued on 20.3.1996. A hire purchase agreement was entered into and possession of the house was given to the petitioner on 4.12.1996. In the allotment letter as well as in the agreement, it was stipulated that the petitioner would be required to pay in 240 installments over a period of 20 years. It was specifically stipulated that in case of late payment, penal interest would be charged @ 18% per annum.

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5. The petitioner defaulted in payment of the installments, as a result recovery notice was issued against which the petitioner has filed the present writ petition praying for the quashing of the recovery notice.

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6. This Court by order dated 29.2.2012 by calling counter affidavit from the respondents, had stayed the recovery notice dated 15.7.2009 subject to deposit a sum of Rs. 1,71,797/- in three equal fortnightly instalments.

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7. Learned counsel for the petitioner states that in pursuance of the interim order dated 29.2.2012, the petitioner deposited the required amount. He further states that at present the petitioner had deposited the entire principal amount.

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8. However, Sri Chandra Shekhar Singh, learned counsel for the respondents, has disputed the aforesaid contention and stated that the entire principal amount has not yet been deposited.

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9. Learned counsel for the petitioner specifically relied upon the judgement of Apex Court in Special Leave to Appeal (C) No. 28403 of 2017 (Mohd. Atique and others Vs. State of UP and others) wherein

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the appeal was disposed of with the observation that for payment of outstanding principal and towards interest amount equal to outstanding principal amount would suffice, thus payment of double of the outstanding amount of principal amount would be sufficient.

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10. The case law relied upon by the learned counsel for the petitioner in Mohd. Atique (supra) is not applicable as the Apex Court in aforesaid case has observed that the said order is not to be treated as a precedent in any other case, as it is passed in peculiar facts and circumstances of the case, in exercise of powers under Article 142 of the Constitution of India.

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11. Learned counsel for the petitioner further submits that similar controversy was raised before this Court in Writ C No. 20268 of 2018 (Hasin Haider Vs. State of UP) decided on 31.5.2018, wherein this Court had disposed of the writ petition with the consent of the respondent-authority that it would not charge penal interest on the outstanding amount provided the petitioner agrees to deposit the entire amount.

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12. In the present case, learned counsel appearing on behalf of respondent-authority has refused to give any such consent as such the petitioner cannot claim any benefit of the order passed in the case of Hasin Haider (supra).

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13. Division Bench of this Court in Writ C No. 14756 of 2016 (Mohd. Atique and others Vs. State of UP) along with other set of connected writ petitions involving similar controversy, after considering each and every aspects of the matter by a judgement and order dated 30.9.2016, dismissed the writ petitions and held that since the contract entered into between the parties was non-statutory as such the writ petitions are not maintainable. For ready reference, the relevant part of the judgement dated 30.9.2016 is extracted herein below:-

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“10. The demand letters issued by the respondents requiring the petitioners to deposit the price of the house along with interest is as per the terms and conditions of the allotment order of the agreement entered between them. We find that the relationship between the petitioners and the Parishad is governed by a non-statutory contract.

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11. There is a line of decisions to the effect that where a contract is entered between the State and the person aggrieved is a non-statutory contract in which case the rights are governed only by the terms of the contract for which no writ could be issued under Article 226 of the Constitution of India nor can the Writ Court compel the authority to remedy the breach of contract, if any, as held by this Court in Radha Krishna Agarwal vs. State of Bihar, AIR 1977 SC 1496, Premji Bhai Parmar vs. Delhi Development Authority, AIR 1980 SC 738 and DFO vs. Vishwanath Tea Company Ltd., AIR 1981 SC 1368.

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12. In Bareilly Development Authority vs. Ajai Pal Singh, 1989 SC 1076, the Supreme Court held that even if the Bareilly Development Authority had the trappings of a State or came under the category of "other authority" for the purpose of Article 12 of the Constitution while determining the price of the house/flat constructed by it and the rate of monthly installments to be paid, the authority or its agent after entering into the field of ordinary contract acts purely in its executive capacity, which determines the rights and obligations of the parties inter-se. Such relationship between the parties was governed by a nonstatutory contract.

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"13. In the light of the aforesaid, we are of the opinion that the writ petitions are not maintainable.

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14. In Tarun Kumar Chabra vs. U.P. Avas Evam Vikash Parishad, Lucknow, 1990(2)UPLBEC 1330, a similar controversy arose with the Avas Evam Vikas Parishad with regard to the demand of 18% additional interest for the period of delay in making payment of installment. A Division Bench of this Court held that writ petition was not maintainable since the contract entered between the parties were non-statutory. The said decision is fully applicable in the instant case.

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15. In Punjab Urban Planning and Development Authority and others vs. Raghunath Gupta, 2012 (8) SCC 1997, the Supreme Court held that once the offer was accepted and a condition was imposed, the authorities are bound by the terms and conditions and are liable to pay interest, including penal interest.

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16. In Writ Petition No.8916 of 2011, Prem Lata vs. State of U.P. and another, decided on 28.2.2011, relating to the same controversy involved in the present writ petition with regard to allotment of the house under the E.W.S. scheme, the Court declined to interfere in the demand notice holding:-

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"The next issue is whether this Court can interfere in the award of penal interest. Penal interest is part of the letter of allotment and terms and conditions by which allotment was done. It is the

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realm of the original allottee on the one hand and the respondents on the other. In such matters, Court cannot intervene and impose some other conditions to create another contract. The contract, terms and condition under which it was entered, has to be recognized by this Court, unless there is a power in the respondents to waive any amount. If there be any such power, then it is open to the person to apply. At any rate that cannot be subject matter of intervention by this Court."

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17. The contention of the petitioners, that penal interest was waived by the respondents by circular dated 19.11.1994 and 25.3.1995, is patently misconceived. We find that the said circulars were modified by circular dated 22.7.1996, which provided that additional interest @ 3.5% per annum would be charged in addition to the simple interest. By another circular dated 22.9.1999, the Joint Housing Commissioner further clarified that the circular dated 22.7.1996 superseded the Government Orders dated 19.11.1994 and 25.11.1995 and that the earlier circulars of 1994 and 1995 became non-est.

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18. In the light of the aforesaid, we are of the opinion that the contention of the petitioners that no penal interest was payable, is patently erroneous. The petitioners are liable to pay penal interest as per the terms and conditions of the allotment letter and agreement, which is deemed to have been modified by circular dated 27.7.1996.

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19. The contention of the petitioners, that the installment and the rate of installment fixed in the allotment letter is in violation of the Regulations of 1979, is patently misconceived and cannot be considered at this belated stage. Admittedly, the petitioners accepted the allotment order and thereafter entered into an agreement and was given possession. Majority of the petitioners have not paid a single paisa since getting possession of the house. The petitioners have violated the terms and conditions of the allotment orders and the agreement with impunity and cannot turn around after 20 years, contending that the conditions so fixed in the allotment letter is violative of the Regulations of 1979.

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20. We are of the opinion that once an agreement has been executed, the rights and obligations are governed only by the terms of the contract and not by the Regulations. The authorities cannot be compelled to remedy the breach of contract, if any, in terms of the Regulations. The decisions cited by the learned counsel for the petitioner in Anupam Sari Centre vs. Collector, Padrauna, Laws (All)1998-11-69, Iqbal Naseer Usmani vs. Central Bank of India, 2006 Law Suit (SC)45, Mange Ram and another vs. State of U.P. and others, 2010 Law Suit (All) 660, Mirza Javed Murtaza vs. U.P. Financial Corporation Kanpur, 1983 AIR (All)-0-234, Mahrajwa vs. State of U.P., UPLBEC-2013-1-56, Writ Petition No.1933 of 2003 Hraidesh Kumar vs. State of U.P. and others, decided on 14.1.2013 and Corporation Bank vs. D.S. Gowda, 1994- SCC-5-213 are not at all applicable to the facts and circumstances of the case and are clearly

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distinguishable.

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21. In the light of the aforesaid, we do not find any error in the impugned demand notices. The demand notices do not suffer from any error of law.

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22. All the writ petitions fail and are dismissed."

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14. It is notable that this Court in the aforementioned case has also dealt with the contention of the petitioner therein with regard to the circular dated 19.11.1994 and 25.3.1995, whereby the penal interest was waived. This Court has observed after considering the subsequent circular dated 27.7.1996 that the circular dated 27.7.1996 has superseded the Government Orders dated 19.11.1994 and 25.11.1995 and the earlier circular of 1994 and 1995 became non-est.

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15. The judgement and order passed by division bench of this Court in Writ C No. 14756 of 2016, is applicable to the present case and we do not find any reason to disagree with the view taken in the abovementioned case.

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16. In light of above, we do not see any justification to interfere in the matter. There is no error apparent in the impugned recovery notice.

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17. The writ petition is dismissed accordingly. No order as to costs. Order Date :- 6.1.2020 Rahul Dwivedi/-

Sabiha Jamal v. State of U.P. Thru Secy. and Others

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Sabiha Jamal v. State of U.P. Thru Secy. and Others

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