Varinder Kumar vs State of Punjab and Others

Adarsh Kumar Goel, A.C.J

Grievance raised in this petition is against demand of interest under Rule 4(5) of the Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) Rules, 1999 even after the necessary payments were made.

Case of the Petitioner is that a plot was allotted to him in the Grain Market at Mansa vide letter dated 8.12.2009. The entire payment having already made, the Estate Officer, Punjab Mandi Board issued letter dated 3.9.2010 raising demand for interest which also covered the period after the deposit on the ground that the above Rule enabled such liability to be created if the payment was beyond 30 days from the date of issuance of the allotment letter. Aggrieved thereby, this petition has been filed on the ground that the Rule has been misread and once the entire payment is made, no interest could be claimed thereafter. Alternatively, prayer has been made to quash the Rule, as being arbitrary.

The Mandi Board has contested the petition by submitting that once the payment was not made within 30 days, the interest liability will continue for two years irrespective of payment earlier.

We have heard learned Counsel for the parties.

Since the issue involves interpretation of Rule 4(5) above, the same is reproduced below:

5) The balance of seventy five per cent of the allotment price, may either be deposited in lump sum without interest within a period of thirty days from the date of issue of the allotment letter by deducting two per cent of the said balance amount, as a discount or in six half yearly installments with fifteen per cent interest or at such rate of interest, as may be notified from time to time by the State government. The first such installment shall fall due after six months from the date of allotment letter.

In our view, the correct reading of the Rule is that if the deposit is not made within 30 days, the allottee can make payment in six half yearly installments with the prescribed rate of interest but there is no bar to payment being made earlier, in which case, the interest liability will not continue after the payment. There is no reason to interpret the Rule the way the Respondent-Mandi Board claims, namely, that if the payment is not made within 30 days, the interest liability will continue for two years irrespective of payment even before longer permissible period. Provision for interest is to compensate a creditor for the delay in payment. Once the payment is made, there could not be any question of interest after the payment.

Accordingly, we allow this petition and hold that there will be no liability of interest after the payment is made. However, the interest liability for the period till the payment is made will be as per terms of allotment letter.

The petition will stand disposed of accordingly.