Sita Nath Thakur v. The Bihar State Housing Board

Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 2 allotted to the petitioner vide letter no. 1673 dated 23.10.1983 and subsequently, Hire Purchase Agreement was entered between the parties which has been brought on record as Annexure 1. The tentative price of the flat was fixed at Rs. 35,500/-. The petitioner was required to make an initial payment of Rs. 7,100/- and, thereafter, he was required to pay the balance cost/amount in 120 monthly equated instalments of Rs. 392/- commencing from August 1986. It is apparent from Annexure 3 that the petitioner was handed over possession of the said flat in constructed condition on 25.10.1986. The petitioner claims that he had regularly paid the instalments all along. However, from the letter dated 16.10.2001, appended as Annexure 4 to the writ petition, it appears that Rs. 8500/- was still not paid, but was subsequently paid vide Annexure 5 on 01.04.2002 and 02.04.2002. However, after lapse of several years again a demand, as contained in Annexure 6, has been made by the Board to the tune of amount of Rs. 2,14,546/0. It is submitted on behalf of the petitioner that after handing over the possession of the constructed house and after payment of all the instalments within time and the last demand of Rs. 8500/- also having been paid within time, there was no occasion for the Board to raise further demand. Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 3 A counter affidavit and, thereafter, an additional counter affidavit have been filed by the Board. Learned counsel for the respondent-Board submitted that the price of the flat was tentative one which would be apparent from the Hire Purchase Agreement and it was liable to be increased if the cost of the construction increases and that has to be paid from the pocket of different allottees. Further, if they do not pay such amount then interest, as per Hire Purchase Agreement, has to be charged upon it. Thus, it is contended that the demand made by it is justified. In support of the aforesaid submission, certain documents have been appended with the counter affidavit. Though the date of Annexure A is not legible, learned counsel for the respondent-Board has produced a copy of the same from his record to show that the date of Annexure A is 02.06.1998. Learned counsel has further submitted that from the aforesaid document it would be apparent that with regard to 576 flats of Bahadurpur Housing Colony loans were raised from the HUDCO and, therefore, there has been increase in the price of the flats of 576 allottees who were required to pay additional amount of Rs. 2,03,200/- on 31.03.1998 with the rate of interest of 2.5 % per annum. An abstract of the calculation has also been appended as Annexure B to the counter affidavit. However, learned counsel for the petitioner submits that Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 4 when the flat was handed over in a constructed stage in the year 1986 it is startling as to why and how the cost of the flat escalated and how a stand can be taken on behalf of the Board that the loan from the HUDCO was raised in the year 1998 after handing over the possession of already constructed flats in the year 1986 itself. This Court vide its order dated 30th November, 2012 had directed the Board to file an additional counter affidavit clearly indicating as to why no information regarding the outcome of the Board’s meeting dated 30.04.1998 was given to the petitioner showing extra burden or obligation prior to issuance of Annexure 6 upon him and after about 12 years, suddenly a letter, as contained in Annexure 6, has been issued raising further demand on the basis of such decision of the Board. It has also been observed that the Board would also have to explain as to why for the mistake or error committed by the Board, the petitioner should be saddled with heavy interest upon the revised price of the flat and he would be compelled to pay the same. Additional counter affidavit has been filed on behalf of the Board in compliance of the aforesaid order. However, again similar stand has been taken by the Board that the loan was raised from HUDCO. However, it has nowhere been stated in the additional counter affidavit also as to when the loan was actually raised. Now Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 5 a question arises that if the loan was raised prior to entering into the Hire Purchase Agreement then escalated amount should have been reflected in the Hire Purchase Agreement (Annexure 1). If the loan was raised prior to handing over the possession vide Annexure 3 then again possession could not have been given to the petitioner without making a demand of additional payment. Even if it is assumed that the loan was taken from the HUDCO after handing over the possession of the constructed flat then it is nowhere explained by the Board as to why the loan would be raised for already constructed flats. In view of the aforesaid discussion, in my considered opinion, the Board has miserably failed to make out a case regarding escalation of price of the flats as it has no courage to even disclose the date on which the loan was raised from the HUDCO for the houses/flats of the petitioner and others. Even if it is assumed that the price has actually escalated then again the Board was duty bound to immediately inform the allottees regarding escalation of the price so that the payment could have been made by them within time to avoid any interest having been paid on that amount. Admittedly, that has not been done for more than ten years and even at the time of making a further demand as per Annexure 4 in the year 2001 there is no whisper regarding Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 6 escalation of the price. Learned counsel for the petitioner has stated that the said demand was only made when he approached the authority for execution of the deed and if that is true then the situation is worse for the respondent-Board. Learned counsel for the respondent-Board has made endeavour to impress upon this Court that as per Clause 3(b) of the Hire Purchase Agreement, the Board was not bound to issue any separate reminder/notice for payment of the amount of any instalment/rent or any other dues payable to the Board. This limb of argument is noted only to be rejected inasmuch as Clause 3(b) of the agreement must be read along with Clause 3(a) which discloses the amount under agreement and then the number of instalments to be paid from the date fixed. Therefore, it has been stated in Clause 3(b) of the agreement that no further notice or reminder for payment of the amount of any instalment would be given and the interest would accrue if the instalments are not paid in time. Clause 3(b) of the agreement cannot be deemed to be applicable regarding any future escalation of the price of the flat which is not at all known to the petitioner. Under the garb of such clause the Board cannot hike price of the concerned flat only with a view to charge interest from the Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 7 petitioner who would not be even knowing as to what amount is required to be paid by him. Thus, in my considered opinion, this statement made in the additional counter affidavit of the Board is unfair and unreasonable. The Board cannot take shelter of such clause to say that the price would be enhanced behind the back of the petitioner and he would not even be informed regarding such escalation for 12 years but he will have to pay interest upon the same. There was no justification at all for the action of the respondent-Board in not informing the amount due against the petitioner due to escalation of price as per the meeting of the Board held in the year 1998 which is reflected from Annexure A to the counter affidavit. However, though it has nowhere been stated in the counter affidavit or the additional counter affidavit as to when the loan was actually raised for constructing 576 flats of the lower income group of Bahadurpur Housing Colony, even if it is assumed that it has been done, then admittedly the aforesaid fact not having been disclosed by the respondent-Board at any point of time even after delivery of possession to the petitioner, in my opinion, it may charge the principal amount but it cannot charge any interest upon it because the fault, if any, would be totally on the part of the respondent-Board and not on the part of the petitioner. A reference is made in this regard to a decision of a Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 8 Division Bench of this Court in Bihar State Housing Board and others v. Shiv Sahay Verma and another (2008(2) Patna Law Journal Reports, 384). In that case the Division Bench had affirmed the judgment of the Single Bench which is also reported in Shiv Sahay Verma v. The State of Bihar and others (2006(4) Patna Law Journal Reports, 264) after holding that there was no material to show that there has actually been escalation of price of the concerned property. By way of last resort, learned counsel for the respondent- Board has submitted that in view of the arbitration clause, the petitioner was not required to invoke the jurisdiction of this Court under Article 226 of the Constitution of India at all. He should have resorted to mode of arbitration rather. This limb of argument is also noted only to be rejected inasmuch as this aspect of the matter was considered by the Division Bench in Bihar State Housing Board and others(supra) and it has been held that the existence of the arbitration clause does not exclude the jurisdiction of the High Court as it is a matter of discretion and not a matter of jurisdiction. Accordingly, this writ application is allowed. It is held that in view of the fact that nothing could be brought forward by the respondent-Board showing the petitioner at fault, for the error Patna High Court CWJC No.20820 of 2010 (13) dt.31-01-2013 9 committed by the respondents the petitioner cannot be saddled with interest upon any escalation of price. So far the principal amount is concerned, respondent-Board recalculate the same and re-examine as to when such loan was taken by the respondent-Board and if the loan was taken before the Hire Purchase Agreement or handing over the possession of the flat to the petitioner then why a decision was taken only after 12 years for recovery of the amount. However, if it reaches to the conclusion that the loan was actually taken then it would record every fact commencing from the date of raising loan till taking any decision for escalation of price and then fix instalment for payment on principal amount which shall be paid by the petitioner. However, the petitioner would not be fastened with any liability to pay any interest upon such amount. (Dr. Ravi Ranjan, J) SC/-