Haryana Urban Development Authority v. M/S Goodyear India Ltd.
Case brief
What is this about?
COURT OF PUNJAB AND HARYANA AT CHANDIGARH…
COURT OF PUNJAB AND HARYANA AT CHANDIGARH…
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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Date of decision: 27th May, 2014
Haryana Urban Development Authority
! Appellant
Versus
M/s Goodyear India Limited
! Respondent
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Mr. A.S. Chadha, Advocate for Mr. S.K. Biriwal, Advocate for the respondent.
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Respondent filed the instant suit seeking declaration to the effect that the impugned demand notice dated 16.06.2003 issued by the defendant7appellant raising demand of External Development Charges (EDC) @ �200 per square yard is illegal and not binding on the rights of the plaintiff. Further relief of permanent injunction was sought restraining the defendant7appellant from recovering any such amount on the basis of the aforesaid notice or taking any other action against the plaintiff7respondent.
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It is the case of the plaintiff7respondent that a piece of land measuring 567 Kanals 15 Marlas situated at 21/4 Milestone, Delhi7 Mathura Road, Ballabhgarh was acquired by the Government of Punjab in the year 1960 for establishment of the respondent7 Company. A conveyance deed dated 28.03.1962 was executed in this regard by the Government of Punjab in favour of the respondent7 Company, which was duly registered on 24.04.1962 before the office of Sub7Registrar of Assurances, Ballabhgarh. Possession of the suit land was handed over to the plaintiff7Company which started manufacturing activities by raising construction of building and its manufacturing plant in the year 1962. It was averred that no extra facility was provided by the defendant7appellant to the respondent7 Company and thereafter, a piece of land was acquired by the Government for infrastructural purposes and after this the plaintiff7 respondent was left with land measuring 534 Kanals 13 Marlas. According to the plaintiff7respondent, the Punjab Scheduled Roads and Controlled Areas (Restriction of Unregulated Development) Act, 1963 came into force, whereas the Rules were framed thereunder on 25.05.1965. According to the respondent7Company, there was no need to seek permission for change of land use, as the land was acquired for a specific purpose of setting up an industry. Still the plaintiff7respondent entered into an agreement with the Director, Town and Country Planning for fulfilling the conditions contained therein in accordance with the Rules framed under the 1963 Act, and thus, an agreement was executed on behalf of the respondent7Company on
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01.12.1971 agreeing to pay EDC. Thereafter, permission to change the land use was also granted to the plaintiff7respondent vide letter dated 22.12.1971. It is further case of the plaintiff7respondent that vide letter dated 03.04.1978, the appellant raised a demand of EDC @ �11,700 per acre in pursuance of the agreement dated 01.12.1971. The total demand raised in this regard was �8,11,980. In response to the aforesaid demand notice, the plaintiff7Company paid a sum of �1,95,464.05 towards 25% of the aforesaid EDC. The balance amount of development charges was never demanded by HUDA from the plaintiff7Company till a letter dated 22.01.1986 was received by the plaintiff7respondent. As per the respondent, vide their letter dated 24.01.1986, the balance amount towards those development charges was deposited. However, the plaintiff7respondent received a memo dated 26.04.2002 from the appellant whereby they raised a demand of �1,51,93,024 along with a penalty/interest @ 10% per annum on account of EDC. It was further stated that in case the plaintiff7 respondent7Company fails to comply with the aforesaid demand notice, resumption proceedings will be started against them. Thereafter, letter dated 19.08.2002 was received by the plaintiff7 respondent whereby the defendant7appellant demanded �200 per square yard on account of EDC from the plaintiff7respondent and as per the aforesaid calculations, a total sum of �6,89,81,270 as on 31.05.2003 was chargeable from them on account of EDC. Thereafter again, a letter dated 29.05.2003 was issued by the defendant7 appellant asking the respondent7Company to pay a sum of
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�7,05,33,350 towards balance amount of EDC upto 15.07.2003. Thus, the aforesaid demand notices and the show cause notice dated 19.11.2001 were assailed by the plaintiff7respondent by filing the instant suit.
Upon notice, the appellant contested the suit raising various preliminary objections stating that despite granting many opportunities of hearing and issuance of show7cause7notices, the plaintiff7Company failed to deposit the EDC due to the appellant. However, acquisition of land for the plaintiff7Company and execution of the conveyance deed in its favour was admitted. Execution of the agreement dated 01.12.1971 was also admitted, however, it was denied that there was no need to seek permission for change of user from the appellant. It was also admitted that initially a demand of �11,700 per acre was raised on account of EDC, however, it was alleged that the plaintiff7respondent deposited lesser amount and the remaining 75 % was deposited only on 24.01.1986, whereas the said amount was to be paid within a period of 30 days with effect from 03.04.1978. As such, it was alleged that the plaintiff7respondent was liable to pay interest on the aforesaid amount. It was further alleged that subsequent memos were issued by the defendant7appellant as per its Policy and Rules. It was further alleged that the show cause notice dated 26.04.2002 had been issued to the plaintiff7respondent under the provisions of the HUDA Act legally and thus, the suit was liable to be dismissed.
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On the basis of the pleadings of the parties, the following
issues were framed by the trial Court:
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Both the parties were given opportunities to lead evidence in support of their rival contentions.
On appreciation of evidence led by the parties and the contentions raised by their counsel, the trial Court decided issues No.1 to 3 in favour of the plaintiff7respondent whereas issues No.4 to 8 were decided against the defendant7appellant and ultimately, suit of the plaintiff7respondent was decreed with costs.
Feeling aggrieved from the aforesaid judgment and decree of the trial Court, the defendant7appellant filed an appeal, which was also dismissed by the first appellate Court, after considering the evidence as well as the arguments raised, vide its judgment and decree dated 05.12.2011.
Still not satisfied, the defendant has filed the instant appeal submitting that the following substantial questions of law arise in this appeal:
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the External Development Charges @ Rs.200/7 per sq. yard as per the policy is justified?
Learned counsel for the appellant has vehemently argued that in view of the agreement dated 01.12.1971, the plaintiff7 respondent was liable to pay EDC as per the policy dated 03.04.1978; however, it deposited only 25% of the initial demand raised and failed to pay the balance amount, which was paid only on 24.01.1986. According to the appellant, as per the aforesaid demand dated 03.04.1978, the respondent7Company was supposed to pay 25% of the total EDC within 30 days and balance 75% amount within 60 days, and in case of failure the respondent7Company was liable to pay interest @ 10% per annum on the balance amount. It is further case of the appellant that fresh Policy dated 08.07.2002 was issued by the appellant which was applicable to the respondent7Company and on the basis of the aforesaid Policy, the notice dated 16.06.2003 raising demand to pay the EDC @ �200 per square yard was rightly issued to the respondent7Company. The impugned notices were issued legally and validly, and therefore, the suit was liable to be dismissed and the judgments and decrees of the Courts below were liable to be set aside.
However, learned counsel for the respondent7Company has supported the judgments and decrees of the Courts below and has vehemently argued that in fact there was no dispute with regard to payment of balance amount on account of EDC as the same have been paid along with interest @ 10% per annum, and this fact has
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been duly noticed by the lower appellate Court in para No.24 of its judgment. According to learned counsel for the respondent, the only issue raised before the lower appellate Court was with regard to payment of interest @ 18% per annum instead of 10% per annum on the balance amount of EDC for the delayed period.
At this stage, para Nos.24 and 26 of the judgment of lower appellate Court be noticed, which read thus:
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A perusal of the aforesaid paragraphs would show that the only question raised by the appellant before the lower appellate Court was with regard to rate of interest payable by the respondent7 Company on the balance amount of EDC, which admittedly stood paid along with interest @ 10% per annum.
Faced with this situation, learned counsel for the appellant has vehemently argued that the appellant was entitled to interest @ 18% per annum on the balance amount of EDC, and has relied upon a Division Bench judgment of this Court rendered in %�&'(&)&��'*&)� �+,+-�./+)0��102�'30(�&)4�&)�02+'�,��53)�4��300&-�&)4��02+'6! (LPA No.933 of 2009 decided on 16.10.2012).
Admittedly, as per the Policy dated 03.04.1978 as well as dated 08.07.2002 issued by the defendant7appellant, whereby demand on account of EDC has been raised against the plaintiff7 respondent, the plaintiff7Company was liable to pay interest @10% per annum on the balance amount of EDC for the delayed period, and in view of the aforesaid condition itself, it does not lie in the mouth of the defendant7appellant to claim interest at a much higher rate. The judgment relied upon by the appellant is not applicable in the facts and circumstances of the case as in the aforesaid case the Court was discussing liability to pay interest @ 18% per annum on the balance amount of equated instalments towards price of the plot etc. as per the terms and conditions; whereas in the instant case as per the Policy
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applicable, interest on EDC is liable @ 10% per annum on the delayed payment.
At this stage, it is useful to refer to the following paragraphs of the judgment of first appellate Court:
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No other argument has been raised.
Thus, this Court finds no merit in the instant appeal as the
substantial questions of law, as raised, do not arise therein.
Dismissed.
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Haryana Urban Development Authority
M/s Goodyear India Limited
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court