IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.19-20 OF 2011

[Arising out of SLP(C) No.28713-28714/2009]

Commissioner,  Avas  Evam  Vikas  Parishad, Lucknow & Anr.

.......Appellants  

Versus

Laxmi Nath Misra & ORS. .....Respondents  

O R D E R Leave granted.   

2. The  appellants  informed  the  first  respondent  by  allotment  letter dated 22.3.2006 that a High Income Group  House No.6A/180 had been allotted to him through draw of  lots on 18.3.2006. This was followed by an amended letter  of  allotment  dated  26.5.2006.  This  showed  that  the  allotment was at a total cost of Rs.15,50,740; and that  after  adjusting  Rs.26,250  (that  is  Rs.25,000  paid  as  registration  deposit  and  interest  thereon)  the  amount  payable was Rs.15,24,490. He was required to pay a lump sum  of  Rs.7,75,390  immediately  and  pay  the  balance  of  Rs.7,49,100  with  interest  @13%  per  annum  in  120  equated  instalments  of  Rs.11,185  commencing    from    1.4.2006.  He  was   also  required  to  pay  Rs.15,190  towards

miscellaneous expenses and Rs.155,100 towards stamp duty.  It was further provided that if there were any delay in the  payment of any of the amount, then additional interest will  be charged at the rate of 16% per annum in regard to the  amount that had become overdue.  

3. The first respondent did not make the payment but filed  a writ petition on 6.6.2006 seeking (a) a direction to the  appellants not to cancel the allotment and to accept the  amount due without any penal interest; and (b) a direction  to the appellants to remove the two electrical poles in  front  of  the  allotted  house  before  insisting  upon  the  deposit.  The  appellants  filed  a  counter  contending  that  first respondent cannot object to the existence of electric  poles in front of the house (at a distance of 1.2 M on the  road from the boundary of the plot allotted to him). During  the  pendency  of  the  said  writ  petition,  the  appellants  cancelled the allotment on 21.4.2007, as first respondent  failed  to  deposit  the  amounts  due  and  complete  the  formalities.  The  High  Court  made  an  interim  order  on  18.5.2007 directing the appellants not to allot the said  house  to  anyone  else  subject  to  the  first  respondent  depositing a sum of Rupees five lakhs. In pursuance of it,  the  first  respondent  deposited  Rupees  five  lakhs  on  

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12.6.2007. Ultimately, the High Court disposed of the writ  petition  on  4.11.2008  directing  that  if  the  first  respondent pays the entire sum of Rs.15,50,740 (less Rupees  five lakhs paid on 12.6.2007) within eight weeks, he shall  be  extended  the  benefit  of  allotments  and  the  appellant  should execute the Sale Deed in his favour. The High Court  held that as the first respondent wanted to pay the initial  deposit of Rs.7,50,000 and the entire balance in one lump  sum,  he  should  not  be  burdened  with  any  interest.  In  pursuance  of  the  final  order  dated  4.11.2008,  the  first  respondent  is  stated  to  have  deposited  Rs.10,50,750,  on  12.12.2008.  

4. Aggrieved  by  the  direction  of  the  High  Court  that  appellants should waive the interest, they filed a review  petition which was dismissed on 29.7.2009. The appellants  have challenged the orders dated 4.11.2008 and 29.7.2009 in  these appeals by special leave.  

5. The  allotment  of  the  house  is  governed  by  the  terms  contained in the letter of allotment. According to the letter  of  allotment  the  total  price  was  Rs.15,50,740.  The  first  respondent had the option to pay the entire allotment price  (less Rs.25,000) in a lump sum forthwith in which case he was  

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not liable to pay any interest. He was also given the option  to pay the first instalment of Rs.7,75,390 and pay the balance  of Rs.7,49,100 with interest @13% per annum in 120 monthly  instalments of Rs.11,185 each. The contract also made it clear  that  if  there  were  any  default,  on  the  defaulted  amount,  additional interest was payable at the rate of 16% per annum.  Thus, there were clear provisions in the contract between the  parties contained in the letter of allotment for charging of  interest  on  instalments  and  additional  interest  on  the  defaulted dues. The initial amount of Rs.775,390 had to be  paid by 30.4.2006 and possession was offered by the appellants  on such payment and completion of registration formalities by  30.6.2006. The first respondent could not, therefore, delay  the payments due and at the same time contend that he would  not pay the interest. Even if he wanted to pay the entire  amount in one lump sum, he had to pay interest on Rs.7,75,390  from 1.5.2006 and on Rs.7,49,100 from 1.7.2006, apart from  paying the stamp duty and miscellaneous amounts as per the  letter of allotment.   

6. The High Court could not have ordered waiver of interest.  In  fact,  this  Court  while  directing  notice  had  stayed  the  order of the High Court subject to the condition that if the  first respondent pays interests at the rate of 13% per annum  

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from 22.3.2006 till date of payment, then the appellant shall  execute the sale deed, subject to the final decision. We are  informed that the interest was not paid and therefore, the  sale deed has not been executed.

7. The appellants claimed interest in terms of the contract.  No rules or regulations to the contrary were relied on by the  first respondent. There is no reason why the appellant should  not  charge  interest  in  terms  of  the  contract.  High  Court  should not, in exercise of power of judicial review, interfere  in such pure matters of contract.  

8. We, therefore, allow these appeals in part and modify the  order of the High Court as under :  

(a) Having  regard  to  the  fact  that  the  entire  principal  amount has been paid on 12.6.2007 and 12.12.2008, the first  respondent shall pay interest at 13% per annum on Rs.15,24,490  from 1.7.2006 (due date) to 12.6.2007 (date of payment of Rs.5  lakhs)  and  interest  at  the  rate  of  13%  per  annum  on  Rs.10,24,490 from 13.6.2007 to 12.12.2008.  

(b) As  first  respondent  has  paid  Rs.15,50,750  instead  of  Rs.15,24,490 actually due as the cost, the excess of Rs.26,260  

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shall be adjusted towards miscellaneous and other dues claimed  by the appellant.

(c) If the first respondent pays the said interest within  three months from this date and also pays other dues (namely  allotment revival fee, late fee, stamp duty, and miscellaneous  charges), the appellants shall execute the Sale Deed in favour  of the first respondent. If the first respondent fails to pay  the  interest  due  within  three  months  from  this  date,  the  cancellation  of  allotment  shall  stand  confirmed  and  the  appellants will be entitled to allot the said house to anyone  else without reference to the first respondent and refund the  sum of Rs.15,50,750 (deposited in terms of the orders of High  Court) to the first respondent without any interest.  

(d) Parties to bear respective costs.  

.....................J.           ( R.V. RAVEENDRAN )

New Delhi;            ....................J. January 03, 2011.                   ( A.K. PATNAIK )

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