Dismissed

Smt Shylashree v. Karnataka Housing Board

Karnataka HC27 Mar 2023WP/27946/2018

Case brief

AI extract

What is this about?

The Karnataka High Court dismissed a writ petition seeking interest on a refunded house allotment amount. The Court held that as the petitioner forfeited her right by opting for a refund after cancelling the allotment due to non-payment, the Board owed no interest despite previous precedents involving Board default.

What did the court decide?

The claim for interest on the refunded amount was dismissed.

Smt Shylashree Vs Karnataka Housing Board — Pension and Retirement Benefits | Karnataka HC (2023)

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WP No. 27946 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27^TH DAY OF MARCH, 2023 BEFORE

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THE HON'BLE MR JUSTICE RAVI V HOSMANI WRIT PETITION NO.27946 OF 2018 (GM-RES)

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BETWEEN:

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SMT SHYLASHREE, W/O SRI.C.N.CHANDRAPPA, R/AT NO.424, 9^TH CROSS, 5^TH MAIN DOLLARS COLONY, HIG HOUSING, RMV II STAGE, BENGALURU-560 094.

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…PETITIONER

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(BY SRI. MALLIKARJUN M. K., ADVOCATE FOR SRI. PUNEETH K., ADVOCATE)

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AND:

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KARNATAKA HOUSING BOARD BY ITS COMMISSIONER, CAUVERY BHAVAN, K.G.ROAD, BENGALURU-560 009.

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…RESPONDENT

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(BY SRI. RAGAHAVENDRA A. KULKARNI, ADVOCATE)

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Digitally signed by GURURAJ D Location: High Court of Karnataka

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THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENT TO CONCLUDE THE PROCESS OF ALLOTMENT OF THE HOUSE DESCRIBED IN THE SCHEDULE BELOW BY EXECUTING A DEED CONVEYING THE HOUSE TO THE PETITIONER AND ON SUCH TERMS AND CONDITIONS THAT MAY BE FELT REASONABLE BY THIS HON'BLE COURT.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B-GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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WP No. 27946 of 2018

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ORDER

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This petition is filed seeking for writ of mandamus directing respondent to conclude process of allotment of schedule house or in alternative for direction, directing respondent to refund sum of Rs.14,85,000/- along with interest at rate of 18% per annum from date of payment till date of repayment.

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Sri Mallikarjun M.K., advocate appearing for Sri Puneeth K., learned counsel for petitioner at outset submitted that during pendency of this writ petition, petitioner has given up prayer no.1 and even insofar as prayer no.2, respondent has refunded entire principal amount of Rs.14,85,000/- to petitioner. Therefore, petitioner's claim in this writ petition survives only in respect of interest on amount refunded, which right was kept open by this Court as per its order dated 22.07.2019.

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Relying upon decision of NCDRC in case of S.P. Dhavaskar v/s Housing Commissioner, Karnataka Housing Board , reported in 1995 (3) CPR 376 and decision of Hon'ble Supreme Court in case of K.A.Nagamani v/s Housing Commissioner, Karnataka Housing Board

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WP No. 27946 of 2018

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reported in 2015 (16) SCC 587 , it was submitted that in case of applicant opting out of allotment, respondent was required to refund of amount with interest. Both Courts have directed respondent - Board to refund with interest at rate of 18% per annum. Relying upon same, learned counsel for petitioner seeks for issuance of direction to respondent - Board to pay interest on amount of Rs.14,85,000/-.

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On other hand, Sri Ragahavendra A Kulkarni, learned counsel for respondent - Board opposed writ petition. It was submitted that petitioner was allotted LIG house bearing no.1530 in Suryanagar on 18.10.2007. At that time, petitioner had made initial deposit of Rs.50,000/-. Later, petitioner paid further amount of Rs.10,74,000/- on 24.01.2008. Thereafter, petitioner failed to pay balance installments. Consequently, allotment stood cancelled as per order of cancellation dated 19.01.2019 produced as Annexure-R3.

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It was submitted that said order was preceded by notice dated 06.11.2008 issued to petitioner calling upon her to pay balance amount produced as Annexure-R2. Since process of cancellation was done by respondent - Board in compliance with principles of natural justice, merely on ground that

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WP No. 27946 of 2018

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petitioner had paid balance amount of Rs.3,58,750/- by way of challan (Annexure-D) in Bank account of respondent - Board directly, petitioner cannot contend that allotment was live.

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It was submitted that as per regulations, in case of cancellation of allotment, respondent - Board was entitled for forfeiture of portion of EMD and Registration Fee as per 12(4) and (5) of Karnataka Housing Board (Allotment) Regulations, 1983 respectively. However, without taking recourse to same, Board had refunded entire amount deposited by petitioner and there was no provision in Act or Regulations governing allotment for payment of interest.

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It was further submitted that decision relied upon by petitioner and facts involving thereon were different. In case of S.P.Dhavaskar's case (supra) cancellation advise was at instance of Board and under such circumstances, Court had directed to refund with interest. Even in case of K.A.Nagamani's case (supra), facts would reveal that on account of delay in completion of project and escalation of allotment price, applicant therein had sought refund, which was also on account of default by respondent. Therefore, refund was ordered with interest. But, in instant case, petitioner

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WP No. 27946 of 2018

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herself was at fault. Due to non-payment of balance amount in time, allotment was cancelled on 19.01.2009 and after deducting 10% out of initial deposit, refund cheque for Rs.11,21,250/- was sent to petitioner's address mentioned in application as early as on 12.05.2009. Said cheque returned back due to change of petitioner's address. It was further submitted that prior to filing writ petition, petitioner had not made any request for refund. Under such circumstances, since Board had made bonafide effort for refund of amount, it was not at fault. Hence, ought not to be saddled with liability to pay interest.

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Heard learned counsel for parties and perused writ petition papers.

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From above submission, and as petitioner is invoking extraordinary jurisdiction of this Court under Article 226 of Constitution of India for issuance of writ of mandamus, petitioner is first required to establish essential requirements for issuance of said writ, namely, legal right vested with petitioner and corresponding duty cast upon respondent, demand made by petitioner and its refusal by respondent,

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WP No. 27946 of 2018

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require to be established. In instant case, there is no provision

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or circular etc., entitling petitioner to claim interest.

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Hon'ble Supreme Court in Punjab Urban Planning and Development Authority v/s Bhupinder Singh , reported in 2008 (13) SCC 572 , distinguished decision in

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S.P.Dhavaskar's case (supra) and held:

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"26. In our view, the single most important aspect of this case is that on the failure of the respondents to ask for refund of the deposited amount within a reasonable time, the same was not refunded to them by PUDA. Not having asked for such refund, the respondents cannot also take advantage of their lapse.

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In our view, it will be inequitable to saddle the appellant only with the responsibility of nonrefund of the earnest money between 10.03.1989 and 19.01.1997"

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In decisions relied upon by petitioner, direction to

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pay interest was issued under different circumstances due to delay or failure to complete project and complete allotment by Board. In instant case, petitioner has unequivocally accepted cancellation of allotment and opted for refund and which is

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WP No. 27946 of 2018

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complied without any deduction/forfeiture. Since cancellation cannot be attributed to any reasons on part of respondent, it

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cannot be saddled with liability to pay interest.

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