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
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.
3. The facts giving rise to the present litigation in a nutshell are as
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 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.
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 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
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.
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.
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 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 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.
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.
(ANIL R. DAVE)
OCTOBER 29, 2014.