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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9951 OF 2014 (Arising out of Special Leave Petition (Civil) No.15445 of 2010)

HUDA & Anr.  ... Appellants

Versus

Kedar Nath  ... Respondent

J U D G M E N T

ANIL R. DAVE, J.

1. Leave granted.

2. Being aggrieved by the judgment dated 10th December,  

2009 in R.S.A. No.790 of 2008 delivered by the High Court of  

Punjab & Haryana at Chandigarh, this appeal has been filed by  

the original defendant – Haryana Urban Development Authority,  

through its Chief Administrator.

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3. The facts giving rise to the present litigation in a nutshell  

are as under :-

The present respondent had participated in an auction  

conducted  by  the  appellants  for  disposal  of  certain  booths  

situated in Sector 9 at Panchkula and had offered the highest  

bid of Rs.4 lakhs for booth no.103 situated in the said sector.  

As he was the highest bidder, subject to the conditions of the  

auction, he was allotted the said booth vide Memo No.12351  

dated  14th September,  1988.   The  respondent  had  deposited  

Rs.40,000/-, being 10% of the amount of bid, immediately and  

thereafter he had further  deposited a sum of Rs.60,000/- so as  

to make 25% of the total amount offered by him.

4. The balance amount of Rs.3 lakhs was to be paid by the  

respondent  to  the  appellant  authorities  in  10  half  yearly  

instalments along with interest @ 10% per annum.   There was  

a  condition  in  the  auction  sale  that  in  case  of  default  in  

payment, the respondent had to pay interest @ 10% per annum  

on the unpaid amount and it was also open to the appellant to

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impose further amount of penalty and to resume possession of  

the booth.

5. It  is  an  admitted  fact  that  the  respondent  committed  

several  irregularities  in  making  payment  of  the  remaining  

amount.  As he did not pay the remaining instalments, he was  

called upon to  pay the  same along with interest  @ 18% per  

annum,  compounded  quarterly.  In  the  aforestated  

circumstances, the respondent had filed a suit challenging the  

validity  of  the  action  of  the  appellant  of  charging  18%  

compound interest and resumption of the booth.   

6. It  was  mainly  contended  in  the  suit  filed  by  the  

respondent that it was not open to the appellant to charge 18%  

compound interest.  According to the respondent, the appellant  

could have charged only 10% interest on the delayed payments.  

7. After  considering relevant evidence,  the trial  court had  

decreed the suit, especially on the ground that it was not open  

to the appellant to charge 18% compound interest.  

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8. Being  aggrieved  by  the  final  outcome  of  the  suit,  the  

appellant  had  filed  first  appeal,  but  the  same  had  been  

dismissed.

9. In the aforestated circumstances, the appellant had filed  

Regular Second Appeal No.790 of 2008 before the High Court.  

10. After considering the facts and submissions made by the  

learned counsel, the High Court dismissed the second appeal by  

observing that the appellant was entitled to charge only 10%  

interest  and  not  18%  interest  compounded  quarterly,  as  

demanded by the appellant.

11. The learned counsel appearing for the appellant authority  

had submitted that though the respondent had succeeded in  

the suit as well as in the first appeal and the second appeal, till  

the date of admission of the present appeal, the respondent had  

not  made payment  and it  had also  been submitted that  the  

respondent’s bona fides were doubtful.   

12. In the aforestated circumstances, so as to see whether  

the respondent was in fact interested in retaining the booth in

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question,  this  Court  had  passed  an  order  on  17th February,  

2014, directing the appellant as well as the respondent to place  

on record their calculations with regard to the amount payable  

by the respondent on the basis of interest @ 10% per annum on  

the  unpaid  instalments.   In  pursuance  of  the  aforestated  

direction,  the  appellant  had  given  a  statement  giving  details  

about the amount payable by the respondent with 10% interest  

on the unpaid instalments.  The respondent had been directed  

to make the payment from time to time so as to know his bona  

fides.

13. Finally, on 5th September, 2014, this Court had passed  

an order directing the respondent to pay at least Rs.13 lakhs  

before 10th October,  2014 and the said amount was,  in fact,  

much  lesser  than  the  amount  which  was  payable  by  the  

respondent even as per his own statement of accounts.   

14. In spite of the aforestated direction, the respondent did  

not  pay  any  amount  towards  the  unpaid  instalments  and  

interest thereon.  

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15. With  the  passage  of  time,  value  of  the  property  has  

increased substantially and it is clear that the respondent is not  

inclined to pay the unpaid amount along with interest thereon  

even at the rate of  10% per annum, which was agreeable to  

him.   It  is  also  an  admitted  fact  that  without  taking  any  

permission from the concerned authorities, the respondent has  

put  up  construction  on  the  booth  in  question.   In  the  

aforestated  circumstances,  it  had  been  submitted  by  the  

learned counsel appearing for the appellant that the impugned  

order passed by the High Court is unjust and improper for the  

reason  that  the  respondent  had  not  even  paid  the  amount  

payable by him, though several opportunities had been given to  

him.   He had further submitted that as the respondent had not  

paid  the  amount,  the  appellant  had  a  right  to  recover  

possession of the booth in question but the appellant could not  

take  possession due to  interim orders  passed by  the  Courts  

below.   He  had,  therefore,  submitted  that  the  impugned  

judgment deserves to be quashed and set aside.  

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16. On the other hand, the learned counsel appearing for the  

respondent  had  expressed  financial  difficulties  of  the  

respondent and submitted that he was prepared to make some  

payment  on  account,  though  it  could  not  be  denied  by  the  

learned counsel appearing for the respondent that the appellant  

was lawfully entitled to take possession of the booth in question  

on  account  of  non-payment  of  the  unpaid  instalments  and  

interest  thereon.   He  had,  therefore,  submitted  that  in  the  

interest of  justice,  the appeal should be dismissed and some  

more time should be granted to the respondent to make the  

payment.   

17. We  have  heard  the  learned  counsel  for  the  parties  at  

length and have considered the facts of the case.  After hearing  

the concerned counsel and looking at the facts of the case, we  

find that  it  is  an admitted  fact  that  the  respondent  did  not  

make  payment  of  the  unpaid  instalments  and  also  that  the  

appellant has a right to resume possession of the booth in the  

event of non-payment of the auction price of the booth.  The  

auction  had  taken  place  in  September,  1988.   The  balance

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amount  of  Rs.3  lakh  was  to  be  paid  in  ten  half-yearly  

instalments.    Hence,  the entire amount ought to have been  

paid within five years thereafter i.e. by the end of 1993.   

18. Even if we come to a conclusion that the High Court was  

right  in  not  permitting  the  appellant  to  recover  compound  

interest  @  18% per  annum,  it  is  an  admitted  fact  that  the  

respondent  did  not  pay  interest  even @ 10% per  annum, to  

which he could not have objected.  

19. In spite of the fact that the amount was to be paid before  

1993, even today in 2014, neither the respondent has paid the  

unpaid amount along with interest thereon, nor has he shown  

willingness  to  make  the  payment  when  ample  opportunities  

were given to him by this Court for making payment along with  

interest @ 10% per annum on the amount due and payable.

20. The above facts clearly show that the respondent is not  

having bona fide intention and is merely trying to remain in  

possession without making payment of the bid amount, which  

he had agreed to pay.  It is not in dispute that the appellant

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authority  is  entitled  to  take  possession in  the  event  of  non-

payment of the entire price of the booth, which the respondent,  

as  an  auction  purchaser,  had  agreed  to  pay.    Thus,  the  

respondent  has  been  committing  default  continuously.   The  

respondent  has  also  put  up  illegal  construction  on  the  

booth/land allotted to him without taking any permission from  

the concerned authority.  

21. Looking  at  the  fact  that  the  appellant  is  entitled  to  

resume possession of the booth on account of non-payment of  

the price, but still the respondent is in possession of the same.  

22. Though  sufficient  opportunities  were  given  to  the  

respondent to make payment of the price, the respondent has  

not paid the same.  Hence, in our opinion, the Courts below  

had  become  more  lenient  than  necessary  towards  the  

respondent by permitting him to retain possession and make  

payment  along  with  10%  interest  on  the  amount  due  and  

payable by him.

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23. Upon looking at the overall facts, in our opinion, it would  

not  be  proper  to  grant  any  further  accommodation  to  the  

respondent, who has admittedly not paid the amount due and  

therefore, we allow the appeal by quashing and setting aside the  

orders passed by the courts below.  It  would be open to the  

appellant  to  take  possession  of  the  booth  in  question  in  

accordance with law.   

24. The appeal is, accordingly, allowed with no order as to  

costs.  

    ………..……………….J      (ANIL R. DAVE)

    ………..……………….J      (KURIAN JOSEPH)

    …..…………………….J      (R.K. AGRAWAL)

NEW DELHI; OCTOBER 29, 2014.