Amarjeet Singh Randhawa and Others vs Notified Area Committee

H.S. Bedi, J.—Respondent i.e. the Notified Area Committee (Now Municipal Corporation) Chandigarh conducted an open auction of commercial sites on 20.6.1990 in the 61, 21 Area Development Scheme, Mani Majra as per the terms of allotment appended as Annexure P-1 to the petition. The petitioner participated in the said auction and their bid for S.C.O. No. 703 for Rs. 41,01,000/- being the highest was accepted. This information was conveyed to the petitioners vide Memo dated 17.7.1990 Annexure P-2 to the petition. The petitioners accordingly deposited a sum of Rs. 4,10,100/- on 30.6.1990 representing 10% of the auction bid for the site in question. The petitioners thereafter deposited another sum of Rs. 6,15,000/- on 30.7.1990 vide receipt Annexure P.3 to the position. Petitioner No.2 thereafter representing the other petitioners as well, wrote to the Secretary Notified Area Committee, Manimajra on 4.12.1990 Annexure, P.4 to the petition informing him that the amount to be deposited upto that date had been deposited and that necessary formalities and amenities be provided at the site so that the construction could be commenced at the earliest. A reminder to the same effect was also sent on 2.4.1991. It appeals that the petitioners could not make the construction on the site and chose to surrender the same and accordingly wrote to the respondents vide letter dated 19.9.1991. Annexure P-5 to the petition, exercising their option to surrender the plot and requesting that a sum of Rs. 10,25,250/- that had been deposited by them be refunded after making deduction of 10% therefrom as forfeiture money on surrender, by virtue of Clause 18 of Annexure P-1.

It appears that the respondent did not lake any action in the matter for sometime and vide letter dated 19.6.1992 Annexure P-6 to the petition informed the petitioner that before the refund could be made certain formalities were required to be carried out. The petitioners duly completed the formalities as detailed in Annexure P-6 in the month of August/September, 1992 and waited for the refund thereafter. The respondents, however, issued a cheque on 23.7.1993 i.e. after a lapse of 22 months from the date of surrender, for a sum of Rs. 5,92,113/- only which represented the amount much lower than would be payable after deduction of 10 per cent made as per Clause 18. As the total amount to be refunded according to the petitioner would have been Rs. 9,22,725/-, the petitioners accepted this amount under protest and issued a legal notice to the respondent on 10.8.1993 and sought refund of a further amount of Rs. 3,30,612/- alongwith interest thereon with effect from 23.7.1993 till the date of actual payment. Certain other amounts representing the interest claimable were also sought. The petitioners also moved a complaint before the Consumer Disputes Redressal Commission and the State Commission at Chandigarh but before notice could be issued the said complaint was got dismissed as withdrawn. As the respondent had not taken any action of the legal notice, the petitioners have filed this writ petition praying inter-alia that the respondents were entitled to deduct only 10% of the 25 per cent that has been deposited on 30.6.1990 and not 10% of the total bid money of about Rs. 41 lacs

On notice the respondents have filed their reply and while admitting Clause 18 reproduced above, have placed reliance on Clause 24 of Annexure P.1 in which it has been given in the post script that the forfeiture amount was to be 10 per cent of the total bid money. It is further pleaded that vide resolution dated 23.8.1991 (Annexure R-2) to the petition, Clause 18 had been clarified and as far as back in 1993 vide Annexure R-3, wherein while dealing with a specific case, the Notified Area Committee had interpreted the said clause in the terms suggested by the respondent. It is accordingly prayed that the action of the respondent was fully justified and the petition deserved dismissal.

The petitioner have also filed a replication to the written statement wherein it is pointed out that the post script in Clause 24 on which primary reliance; has been placed by the respondent though relating to Clause 18 had been added as a result of the resolution of the Notified Area Committee dated 23.8.1991 and this clarification amendment was therefore could not operate retrospectively to the prejudice to the petitioners.

Mr. S.C. Mohanta, the learned Senior Advocate appearing for the petitioners has argued that Clause 18 of Annexure P-1 was originally enacted visualized the forfeiture of only 10% out of the 25% cost paid at the fall of the hammer and no other forfeiture could be spelled out as claimed by the respondent. He has also argued that the post script relied upon by the respondent could not be made applicable to their case as the same had been added on 23.8.1991 whereas the auction had been held on 29.6.1991 and the deposit of 25% of the bid money had also been made 30 days thereafter. He has further pleaded that the clarification issued on 23.8.1991 (Anuexure R-2 to the written statement) being also subsequent to the date of auction, could not be made applicable respectively. As against this Mr. Ashok Aggarwal, the learned Senior Advocate appearing for the respondent has argued that the terms of the allotment given in Annexure P.1 could not be disputed but after the clarification had been made wide Annexure R-2, the fresh terms would be equally applicable to the case of the petitioners and that the post script added to Clause 18 being also clarificatory in nature, the petitioners were bound by the same and liable to pay 10 per cent of the total bid money. In this connection he has relied upon Roshan Lal Jindal Vs. The Notified Area Committee and Another, in which a similar dispute had been raised.

We have heard the learned counsel for the parties and gone through the record as also the judgment cited above. Clause 18 and 24 of Annexure P-1 are reproduced below :-

Clause - 18.

If at any stage the transferee(s) due to certain compelling circumstances, would like to surrender the site, he/she/they shall be allowed to do so with prior permission from the President of the Committee and the surrender would be subject to forfeiture of 10% of the amount out of 25% of the cost paid at the fall of the hammer. The interest amount recovered upto the date of surrender shall not in any case be refunded.

Clause - 24.

The right or display of advertisement and use of end wall of end sites and the benefits derived from shall vest in the committee.

P.S. Forfeiture of 10% of the amount means 10% of total bid money."

It is admitted that the property had been auctioned on 20.6.1990 and at that time Clause 18 of Annexure P.1 clearly spelt out that the forfeiture could be made of 10 per cent of the 25 per cent deposited at the fall of the hammer. It appears that the Notified Area Committee thereafter experienced some difficulties and vide resolution dated 23.8.1991 added two post scripts to Clause 24 though related to Clause 18 and also passed resolution Annexure Rule 2 farther clarifying that the forfeiture was to be with regard to 10 per cent of the total bid money. In our opinion the said post script or the clarificatory resolution made after the date of the auction cannot operate retrospectively.

We have also perused the judgment in Roshan Lal Jindal''s case and in particular the passage quoted below :-

"Even assuming from that when the auction took place on 30th June, 1990, the amount of forfeiture was only 10 per cent of the 25 per cent of the amount deposited, the said condition was changed by a Resolution of the Committee on 23.8.1991. Even on the basis of the resolution dated 23.8.1991 being prospective in nature, it applied to a case of surrender that is made after the date of resolution."

We are of the opinion that these observations do not reflect the correct position of law. It is to be noted that both the parties i.e. the buyer as well as the seller are equally bound by the terms of the auction and to allow one party to divert therefrom by a unilateral act would be wholly impermissible. As already mentioned above, the property had been sold by auction on 20.6.1990 and at that time the petitioners were given on assurance that in case of the surrender of the plot they were liable to suffer a forefeiture of 10% out of 25% deposited by them at the fall of the hammer. Any subsequent unilateral act by the Notified Area Committee changing the conditions of the allotment by a resolution of the Notified Area Committee cannot be countenanced. Roshan Lal Jindal''s (supra) case is accordingly over-ruled. We accordingly allow this petition and direct that the respondents shall make the refund of the balance amount within a period of six months from today failing which - the petitioners would be entitled to the payment of interest at the rate of 12% per annum from 23.7.1993 till the date of actual payment. No costs.