Partly allowed

Arjun Kumar v. Jharkhand State Housing Board

Jharkhand HC16 Aug 2019WPC/1974/2008

Case brief

AI extract

What is this about?

The High Court quashed a demand notice for Rs. 25 lakhs as arbitrary and mala fide given the respondent's earlier stay order prevented timely payments despite an agreement. While striking down the exorbitant demand, the court noted some delay in payments and directed the petitioner to pay interest for one year three months. Upon payment, the deed of conveyance must be executed.

What did the court decide?

Demand notice dated 25.01.2008 for Rs. 25,11,043/- quashed. Petitioner directed to pay interest for 1 year 3 months. Upon payment, Board to execute deed of conveyance within 2 months.

Arjun Kumar Vs Jharkhand State Housing Board — Property and Title | Jharkhand HC (2019)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 1974 of 2008

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Arjun Kumar, S/o Shri Phul Chand, R/o Goswami Mandir Path, House No.4, Baatia Basti, Kadma, P.O. and P.S.Kjadma, Town- Jamshedpur, District- Singhbhum East.

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… ... Petitioner

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Versus

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1. Jharkhand State Housing Board through its Managing Director, Harmu Housing Colony, Ranchi.

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2. The Revenue Officer, Jharkhand State Housing Board, Ranchi.

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3. The Executive Engineer, Jharkhand State Housing Board, Adityapur, Jamshedpur, Singhbhum East.

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4. The Manager, Estate-II, Jharkhand State Housing Board, Ranchi. … … Respondents

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For the Petitioner : Mrs. Kumari Rashmi, Adv. For the Respondents : Dr. Ashok Kr. Singh, Adv.

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Present: HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY

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C.A.V. on 29/07/2019 Pronounced on 16/08/2019

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Heard Mrs. Kumari Rashmi, learned counsel for the petitioner and Dr. Ashok Kr. Singh, learned counsel appearing for the respondents.

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2. The petitioner in this writ application has prayed for quashing of the demand notice as contained in letter dated 25.01.2008 by which the respondent no. 2 has made a demand of Rs. 25,11,043/- from the petitioner even though he had deposited the entire consideration money to the tune of Rs. 7,51,100/- as per the hire purchase agreement registered on 22.02.1994.

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3. The factual aspects of the case reveal that the respondent-Housing Board had decided to allot commercial Plot No. C2-10 on 90 years lease at Dindly, Jamshedpur to the petitioner on the basis that the petitioner had quoted the highest amount of Rs. 7,51,000/-. Initially the petitioner had made a deposit of Rs. 15,000/- as earnest money and he was required to deposit a sum of Rs. 2,63,050/- i.e. 35% of the total consideration amount as

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also the legal and deed writing expenses. The petitioner thereafter had deposited the balance amount of Rs. 2,48,050/- as was directed by letter dated 10.01.1994.

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4. On such deposit vide letter dated 02.02.1994 the Plot No. C2-10 at Dindly, Jamshedpur was formally allotted to the petitioner. A deed of agreement of hire purchase was executed on 10.02.1994 which was registered on 22.02.1994. Upon registration the physical possession of the plot in question was handed over to the petitioner on 15.03.1994. So far as the rest of the consideration amount is concerned it was acknowledged that the same will be deposited in 8 installments of Rs. 76,293/- each which were to be paid in March 1994, June 1994, September 1994, December 1994, March 1995, June 1995, September 1995 and December 1995. It has been stated that the Housing Board stopped with immediate effect the further process with respect to allotment of the plot in question to the petitioner as also with respect to two other allottees on the basis of letter no. 1163 dated 22.03.1994 which indicate that the said decision was on the basis of oral instruction given by the Secretary of the Building Construction Department. In view of the instructions as noted in the letter dated 22.03.1994 the further installments could not be paid by the petitioner as per the schedule mentioned in the agreement.

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5. The petitioner claims that the respondentauthorities were several times requested by the petitioner to receive the amount of installments but citing the contents of letter dated 22.03.1994 the installments were not received by the Board. The petitioner had started construction work on the plot which was allotted to him but he was directed to stop the construction work in view of the letter dated 22.03.1994. However, vide letter no. 2715

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dated 25.07.1997 the petitioner was directed to deposit the amount with interest by 11.08.1997. Since the petitioner was in a dilemma as there was no reference of the earlier letter dated 22.03.1994 and the subsequent letter dated 25.07.1997 he had sought clarification from the respondent no. 3 but of no effect. The petitioner had also represented the Managing Director of the Housing Board seeking for a suitable direction so that the balance amount be deposited before the Board. The Executive Engineer on the representation of the petitioner had made a request to the Estate Officer, Bihar State Housing Board to consider the grievance raised by the petitioner sympathetically and inform him as to the further steps being taken. Since the matter was never clarified the petitioner deposited the entire balance amount on various dates, the initial date of payment of installments being 17.12.1997 and the balance amount was deposited on 06.01.2001. After payment of the entire consideration amount the petitioner made a construction over the plot in question and is in peaceful possession therein. However to the utter surprise of the petitioner he found himself at the receiving end on account of a letter issued by the Board dated 25.01.2008 wherein a demand was made from the petitioner asking him to deposit a sum of Rs. 25,11,043/-. The petitioner on receipt of such letter had represented the respondent no. 1 explaining the entire facts and circumstances but the same was never considered which constrained the petitioner to prefer the present writ application.

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6. In the counter affidavit it has been stated that the petitioner has an alternative remedy by invoking the Arbitration Clause. It has also been stated that the petitioner was never asked to stop payment of installments and non-payment of installment was in violation of the

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terms and conditions of the agreement and therefore the demand which has been raised was in terms of the agreement.

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7. It has been submitted by Mrs. Kumari Rashmi, learned counsel for the petitioner that there was already a stay operating vide letter dated 22.02.1994 which prevented the petitioner from depositing the installments according to the schedule fixed in the agreement. It has further been stated that the action on the part of the respondents is arbitrary and malafide as on the one hand they had stopped the entire process after a hire purchase agreement was executed with the petitioner and on the other hand on account of delayed payment of installments a huge amount of interest which was calculated on a compound basis has been thrust upon the petitioner. On such score therefore learned counsel for the petitioner submits that the demand notice dated 25.01.2008 be quashed and set aside.

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8. Dr. Ashok Kr. Singh, learned counsel appearing for the respondents on the other hand has submitted that the further process of allotment was kept in abeyance on the verbal instruction of the Secretary, Building Construction Department but the same never specified that the petitioner was not to deposit the installments as per the schedule in the agreement. It has been stated that the petitioner in order to escape from his liability has taken a stand which is contrary to the records.

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9. The bone of contention therefore appears to be the letter dated 22.02.1994 which after the hire purchase agreement was executed stalled the further process of allotment. The sequential events as has been narrated above would indicate that the Board has dealt with the entire issue in a shoddy fashion and has acted as a

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Shylock in trying to squeeze an exorbitant amount from the petitioner being wholly oblivious to its own letter dated 22.02.1994. The said letter never specified that the petitioner will continue to deposit the installments. In fact the letter indicated that all activities concerned with the allotment of the plot to the petitioner and the other two allottees shall be kept in abeyance. The further steps of allotment upon executing the hire purchase agreement rested with the petitioner and two other allotees. The Board was to execute a deed of conveyance once the installments have been deposited within the time schedule. The petitioner in fact has been at the receiving end of the arbitrariness of the Housing Board and it was the Board which dictated things ignoring the fact that the installments were not deposited on account of the communication made by the Board. If at all the letter dated 22.02.1994 did not hinder the payment of installments the Board could have issued a clarification in that regard. The Board at this stage cannot be allowed to misinterpret the letter dated 22.02.1994 in order to squeeze a huge amount from the petitioner. The petitioner had applied for a plot of land and had acted in terms of the hire purchase agreement prior to 22.02.1994 little realizing that he would be involved in a legal wrangling with the Board. The Board has miserable failed to justify its stand so far as the demand notice dated 25.01.2008 is concerned.

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10. Although learned counsel for the petitioner has stated about an existence of an Arbitration Clause and therefore the petitioner has an alternative remedy but the said contention has lost its significance in the background facts of the case. The petitioner at this stage if directed to invoke the Arbitration Clause and avail of the alternative remedy would further render the petitioner with grave

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injustice and uncertainty as already more than a decade has passed since the impugned demand notice dated 25.01.2008 had been issued.

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11. Another thing which has drawn the attention of the Court is that the petitioner had deposited the installments in various amounts on several dates extending from 17.12.1997 till 06.01.2001 but there never has been any objection raised by the Housing Board regarding such deposit, rather the Housing Board appears to have gleefully accepted the installments and after seven years from the date of depositing the balance amount of the consideration money the demand notice has been issued by the respondent-Housing Board. Thus the arbitrariness which the learned counsel for the petitioner has repeatedly stressed is stark on the face of the record. Therefore, the demand notice dated 25.01.2008 cannot be construed to be in accordance with law and as such the same is hereby quashed and set aside.

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12. However, at the same time it must be taken into consideration that a letter dated 25.07.1997 was issued in which the petitioner was directed to deposit the installments with interest by 11.08.1997. It has not been stated by the respondent-Housing Board about existence of any other communication in between the letters dated 29.03.1995 and 25.07.1997 with respect to a direction upon the petitioner to start making payment of installments. Therefore after the entire process was stalled vide letter dated 29.03.1995 the same got re-initiated vide letter dated 25.07.1997. The petitioner in terms of the hire purchase agreement was to deposit the installments between March, 1994 and December, 1995 which is about one year and nine months. Consequent to the issuance of the letter dated 25.07.1997 the petitioner had sought

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clarification as to whether the imposition of stay by the Board has been vacated or not and since the petitioner did not receive any such clarification he had started depositing the balance amount from 17.12.1997 itself. The petitioner had deposited Rs. 50,000/- on 17.12.1997, Rs. 50,000/on 20.05.1998, Rs. 1,00,000/- on 25.11.2000 and Rs. 2,88,250 on 06.01.2001 and the entire period which had been taken by the petitioner for deposit of the installments have been about 3 years. As per the terms of the hire purchase agreement, the petitioner was to deposit the entire amount within a period of one year and nine months but after starting of the deposit of the installments it took the petitioner three years to finally deposit the entire amount. Therefore the Housing Board can at best charge interest on the delayed payment of approximately one year three months.

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13. It is also to be noted herein that although the amount was to be deposited in eight installments of Rs. 76,293/- each but from the break up which has been provided by the petitioner the amount which has been deposited in installments varies from Rs. 50,000/- to Rs. 2,88,250/-. However, in spite of such incoherence in deposit of the installments the respondent-Board did not object to the same and kept on receiving the amount. Therefore in such background facts the petitioner is liable to pay interest to the Housing Board for the delay of about one year three months in depositing the installments and that too on an inconsistent and incoherent basis as indicated above. The petitioner after not receiving any clarification from the Board regarding the order of stay as indicated in terms of the letter dated 22.03.1994 could have started making payment of installments for the amount of Rs. 76,293/- from 17.12.1997 itself which is the

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date on which an amount of Rs. 50,000/- towards the first installment was deposited by the petitioner and then could have deposited the balance amount in quarterly installments of Rs. 76,293/- as indicated in the hire purchase agreement itself. Even though the petitioner has taken a stand regarding the deposit of entire amount but as has been stated above on account of the incoherent and irregular deposit of the installments in a disorderly fashion the same would definitely entitle the respondent-Housing Board to charge interest in terms of the agreement from the petitioner for the period of approximately one year three months which the petitioner took in excess to deposit the balance installment amounts. The interest liable to be paid by the petitioner should be considered after taking into account that the petitioner was required to deposit Rs. 76,293/- in quarterly installments but as indicated above varied amounts have been deposited in a haphazard fashion and accordingly the petitioner would be liable to pay interest which is to be calculated from 17.12.1997 till 06.01.2001 in terms of the interest so chargeable as per the hire purchase agreement.

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14. It is ordered that if the petitioner deposits the interest which would be calculated by the respondentHousing Board within a period of four months from the date of receipt of a fresh demand notice the respondentBoard shall immediately on receipt of the same execute the deed of conveyance within a period of two months from the date of receipt of the amount as would be indicated in the demand notice.

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15. This writ application accordingly stands disposed of by quashing the letter dated 25.01.2008 issued by the respondent no. 2 by which a demand has been made of an amount of Rs. 25,11,043/- with a further direction to

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the respondent-Housing Board to calculate the interest as has been indicated above and thereafter within the time stipulated if the petitioner deposits the fresh demand to be raised by the respondent-Housing Board the deed of conveyance shall be executed by the respondent-Housing Board in favour of the petitioner within a period of two months from the date of deposit of the entire amount which will be raised in the fresh demand notice.

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16. This writ application stands disposed of.

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(R. Mukhopadhyay, J.)

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Alok/-

Arjun Kumar v. Jharkhand State Housing Board

Case brief

What is this about?

What did the court decide?

Arjun Kumar v. Jharkhand State Housing Board

Case brief

What is this about?

What did the court decide?

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