The Allahabad High Court has observed that a party cannot be permitted to “blow hot and cold”, “fast and loose” or “approbate and reprobate” at the same time while disposing a petition. This rule is applied to do equity, however, it must not be applied in a manner as to violate the principles of right and good conscience.
The Division Bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar passed this order while hearing a petition filed by Smt Madhubala Jaiswal.
Uttar Pradesh State Industrial Development Authority launched a scheme of residential plots in ‘Saraswati-Hi Tech City Naini, Allahabad’. The petitioner, a 75-year-old woman, made an application for allotment of plot and had deposited Rs 1,95,930 as registration amount.
The petitioner was found to be successful and was allotted a plot measuring 200 sq metre on 18.02.2017 and the cost of plot was fixed at Rs 36 lakh. The allotment letter was issued on 18.02.2017, wherein it was stated that 25% of the total premium of plot after adjusting registration amount is to be deposited within 30 days.
The Court noted,
From the record it emerges that the condition in the allotment letter was that the allottee while participating has to deposit Rs 1,93,320 as registration amount and after he/she was found successful in getting the allotment, the allottee would be required to pay 25% of the total premium amount within 30 days (which was amounting Rs 7,01,680).
The allotment also provided the facility of instalment, but, it carried an interest of 14% per annum on remaining premium chargeable from the date of allotment, payable in 12 half yearly installments alongwith interest on first day of January & July each year. Rebate of 2% was also admissible in case the payments due are made on or before the prescribed date if there are no arrears of dues.
The petitioner instead of depositing 25% (which was Rs 7,01,680/-) of the said total amount, has deposited around Rs 29 lakhs which was approximately 80% of the total amount of the premium, without seeking benefit of instalments which was offered in the allotment letter. So far as the possession of the plot as per the allotment letter is concerned, it was to be delivered to the allottees after payment of 25% of the total premium of plot (after adjusting earnest money/registration amount).
As per the terms and condition of the allotment, the petitioner was promised to get possession by July 2017, but the same was not given to the petitioner. Aggrieved with the same, the petitioner approached Real Estate Regulatory Authority on 05.11.2017 and RERA vide order dated 27.02.2018 directed the respondent No 3- UPSIDA for delivering the possession, however, no order was passed for the interest on the delayed period.
Hence, the petitioner filed an appeal before the Real State Appellate Tribunal, Lucknow within time and after admission of appeal, the Tribunal fixed the date for hearing, but due to lockdown in Corona period, it was informed to the petitioner that the hearing would be conducted through Video conferencing. It is claimed that no link was provided in spite of several requests, hence, the petitioner could not appear. The matter was kept pending before the RERA Appellate Authority.
On 03.09.2019, an office order was issued by the UPSIDA, whereby the allottees were given option if they want to quit from the project, they can take back their deposited money with 6 percent interest per annum, or in case they want to continue under the scheme they will have to pay the remaining premium amount and other charges as per the original allotment order.
The Court further noted that,
It transpires that there was some issue between UPSIDA and the State Government and the State Government for some internal reason did not executed the Conveyance Deed in favour of UPSIDA, as a result, they were also not in position to further execute the Conveyance Deed and hand over possession to the allottees.
It seems that ultimately the State Government executed the Conveyance Deed on 23.01.2021 in favour of UPSIDA, and hence the delay in executing the sale deed by UPSIDA in favour of the petitioner was not on account of respondent No 3, but was on account of State Government.
It was somewhere in 2022, the Respondent No 3 sent a letter informing that they were in position to execute the sale deed, but at the same time, they asked the petitioner to pay (14% – 2% =12%) interest on the balance amount from the date of allotment till the date of payment.
Aggrieved by the action that respondent no 3 has not handed over the possession of land in time and thereafter, asking for heavy interest for the delayed period, petitioner instituted the petition under Article 226 of the Constitution of India seeking for the following relief:-
“(i) issue a writ, order or direction in the nature of mandamus commanding (a) UPSIDA to pay delay period interest on the amount paid (Rs 29 lakhs), at the same rate which respondent no 3 is charging from allottees in case of default, from July 2017 (promised date of possession) till the date of possession. (b) Appellate Tribunal to hear the petitioner and decide the matter on merit. (c) Appellate Tribunal to provide all the orders passed in the matter of petitioner and to provide video link for hearing.
(ii) issue any other suitable writ, order or direction as the Court may deem fit and proper under the circumstances of the case.
(iii) Award cost of the petition in favour of the petitioner.
(iv) issue a writ order or direction in the nature of mandamus for directing respondent no 3 to provide possession of plot.
(v) issue a writ order or direction in the nature of certiorari for quashing of order dated 08.06.2022 upto payment of interest of Rs 535967 + Rs 53552 & GST of Rs 64762.50.”
The Court observed that,
In the case, the undisputed fact remains that the respondent no 3-UPSIDA allocated the plot to the petitioner without holding proper title, resulting in a delay of nearly four years to acquire the title. This delay was obviously not attributable to the petitioner but solely due to the actions and internal issues of respondent no 3. Therefore, respondent no 3 cannot take advantage of the delay or default that they themselves caused and ask for interest to be paid for that period.
The only bone of contention before the Court is whether the UPSIDA is entitled to levy interest on the remaining balance due from the petitioner during the period in which the delay was attributable to UPSIDA itself. According to the terms of the allotment letter, the petitioner was required to pay 25% of the total premium amount within 30 days of the allotment, following which UPSIDA was obligated to execute the lease deed in favour of the allottee.
In this instance, despite the petitioner having paid 80% of the premium amount, UPSIDA failed to execute the “Conveyance Deed” or hand over possession until January 25, 2021, due to internal issues within UPSIDA.
Consequently, it is unjustifiable for UPSIDA to impose an interest rate of 14%, later reduced to 12%, for the period of delay, which is solely attributable to UPSIDA, caused by its own actions. The 14% interest rate was originally stipulated for instances where the allottee opted for installment payments which the petitioner did not opt for. In the interest of justice, there cannot be a discrepancy in the rate of interest applied.
If UPSIDA offers a 6% interest rate to individuals, for withdrawing from the agreement, in all fairness, it cannot charge 14% or 12% interest from those who remain committed to the agreement. Moreover, there is no provision in the allotment letter for charging interest if the default is on UPSIDA’s part.
Regarding the interest on the 80% premium amount paid by the petitioner, this matter is currently pending before the RERA Appellate Authority. The petitioner is entitled to pursue the issue for interest or damages for the period during which the payment was made, and the property could not be enjoyed by her. This aspect remains open for adjudication, and we are not addressing it in this judgement.
“In view of the aforementioned considerations, it is evident that the respondents cannot capitalize on their own defaults to the detriment of the petitioner. The established legal principle that no party should get benefit for their own wrong applies in the case,” the Court further observed while disposing the petition.
Accordingly, the Court directed respondent No 3, UPSIDA, to correct the unjust imposition of interest and to comply with appropriate legal standards. They may only charge interest @ 6% on the outstanding amount. Upon the petitioner paying the outstanding amount along with 6% interest rate for the period from the date of allotment of plot, respondent no 3 is obligated to execute the lease deed and complete all other formalities within 2 weeks thereafter.