LexSTATE OF PUNJAB AND ANR. versus SMT. SIMLA RANI W/O SHRI BHAGWAN DASS
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,. ',;.·).., '.\-.. ·.~· '.' ' ' I. -·.\'. ~\ : \_ ,1,-, A -,...._·. STATE OF.PUNJAB AND ANR. > ' ... v. '.\' .. · · SMT. SIMLA RANIW/0 SHRI BHAGWAN DASS >' : MARCH 27, 1995 '·~ B [K. RAMASWAMY AND B.L. HANSARIA, JJ.) Punjab Urban Estate (Sales of Sites) Rules, 1965: Rule 13-Allotment of bootlt-;4greement for-Payment of initial amount by a//otte~alance to be paid in instalments with interest@7o/u-Default in instalme~ower of · · C · Estate Officer to impose penalty-Levy of 10% penalty and 7% Interest-Held / valitl-Section 10 of the PUnjab Urban Estates (Development ,,;,d Regiilation) D .E F G .H Ac4· .1964 held inapplicable. ' ·-·o~-•=------- .. · · The nspondent was allotted a booth by the appellant· State. In term~ or the agreement he .. paid I/4th amount; namely, Rs. 29,125, while the . balance or.Rs. 87,373 was to be paid in instalments with interest @7% p.a. As default was committed in payment or instalments, the Appellant-State exercised the option provided In Rule 13 or the Punjab Urban Estate (Sales · or Sites) Rules, 1965, Instead or proceeding under section 10 ofthe Punjab Urban Estate (Development and Regulation) Act, 1964 and issued notice calling upon the nspondent to pay Rs. 1,63,456 Inclusive or Interest and penalty. The nspondent challenged the notice befon the High Court which dincted the appellant to adjust the amount or Rs; 75,000 deposited from time to time as per the orders or Court and to nceive the balance amount or Rs. 26,000. . ;.- ' In appeals to this. Court by the State it was contended that as a matter or policy 10% penalty and 7% lntenst on delayed payments was ,. ' being imposed: and that the respondent-allottee having agned to this, .the High Court was not justified In interfering wi_th the action take.L . ';·:-. For the nspondent It was contended that the Ie'Y}' or 17% lntenst by 'way ~r intere~t a.;,ounts to. penalty and thenfon sustainable becaiise ." ~nder the' _rules 'the appellant has discntion to I~ penalty upto a maxi· . mumor10%. Allowing the State's appeal, this Court 1150 I STATE v. SMT. SIMLA RANI i151 HELD : 1. The High Court was not justified in interfering with the A contractual relations entered by the purchasers with the appellant to reduce the amounts payable in ttrms of the contact read with the Punjab Urban Estates (Development and Regulation) Act, 1964 and Punjab Urban Estate (Sales of Sites) Rules, 1965. [1153-E] 2. An exercise of power under section 10 of the 1964 Act, while resuming the property for the default committed, certain consequences ensue. One of the consequences is forfeiture of the amount already deposited. While exercising that power, rule prescribed forfeiture of 10% B r of the total amount deposited by the dafaulter. The said condition is inapplicable to the factual situation as the appellants have not exercised C the option given by section 10. Instead they exercised the option provided _...,...--· I in Rule 13 of the Rules which empowered the Estate Officer to impose penalty for the default committed as stipulated thereunder. The respon- dent misconstrued the scope of the action on the part of the appellant in . this behalf. 17% is not the rate of interest. It is 10% penalty for non-pay· ment of instalments and 7% interest on terms of the contract, which put D together becomes 17%. [1153-B-D] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4272 of 1995. From the Judgment and Order dated 26.4.94 of the Punjab & E Haryana High Court in C.W.P. No. 2950 of 1994. Sarup Singh and Satish Vig for the Appellants. Hardeep Singh, N.M. Popli and R.C. Kaushik for the Respondents. F The following Order of the Court was delivered : Leave granted. This appeal by special leave arises from the order of the High Court of Punjab & Haryana dated 26.4.1994 made in C.W.P. No. 2950/94. At an G open auction conducted by the appellant the respondents; admittedly, became higher bidder for a sum of Rs. 1,16,000. He entered into an agreement on November 24, 1981 and got allotment of booth No. 28 situated in Phase I, Urban Estate, Sahibjada, A_jit Singh ·Nagar (Mohali). He paid ...... the initial 1/4th amount, namely, Rs. 29,125 and he had ~o·pay H 1152 SUPREME COURT REPORTS (1995] 2 S.C.R. A balance of Rs. 87,373 in instalments with interest at 1% p.a. Admiltedly, he committed default in payment of instalments till notice was issued on November 25, 1993. Therein it was specific
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