Pramod Kumar Jain vs Lt. Governor & Others
2009 Latest Caselaw 4386 Del

10.
*        IN THE HIGH COURT OF DELHI AT NEW DELHI

+        W.P.(C) 9393/2009

                                      Date of decision: 29th October, 2009

         PRAMOD KUMAR JAIN                    ..... Petitioner
                       Through Ms. Shobhana Takiar, Advocate.

                     versus

         LT. GOVERNOR & ORS.                   ..... Respondents
                        Through Ms. Anju Bhattacharya, Advocate.

         CORAM:
         HON'BLE MR. JUSTICE SANJIV KHANNA

         1. Whether Reporters of local papers may be
         allowed to see the judgment?
         2. To be referred to the Reporter or not ?
         3. Whether the judgment should be reported
         in the Digest ?

                                    ORDER

1. The petitioner is a subsequent purchaser of the leasehold rights of

industrial plot No. M-1, Badli Industrial Estate, measuring 1457.4 square

yards. Due to non-construction and other faults, leasehold rights were

cancelled by the respondents.

2. By letter dated 17th May, 2004, the respondents agreed to restore

the leasehold rights on payment of transfer charges, restoration charges,

regularization charges and lease amount in total amounting to

Rs.94,23,727. Certain other formalities were also required to be

completed by the petitioner. This letter further stipulated that the

W.P. (C) No. 9393/2009 Page 1 aforesaid amount should be paid within sixty days of the date of issue of

the letter, otherwise compound interest @ 18% would be charged on the

delayed payment.

3. The said letter was made subject matter of challenge before the

High Court in W.P. (C) No. 18752/2005. This writ petition was disposed of

vide order dated 20th July, 2007, which reads as under:-

" The parties have advanced arguments at length. The learned counsel for the petitioner stated on instructions from the petitioner Mr. P.K. Jain, who is also present in court, that he would now be willing to pay the amount mentioned in the document annexed as Annexure P-1 dated 17th of May 2004 issued by the office of the Commissioner of Industries. However, he seeks some time to make the said payment. Having considered the arguments advanced by the counsel for the parties and noting the fact that this case has had a very long winded and chequered history in which the petitioner has somewhat been shortchanged by his erstwhile partner, it appears that the request of the Ld Counsel for the petitioner is not unreasonable.

Accordingly, this writ petition is disposed of with the direction that the payment required to be made by virtue of the said letter dated 17 May 2004 be made within six months from today."

4. On 18th January, 2008 the petitioner deposited sum of

Rs.94,23,727/-. Thus, the petitioner claims that the entire amount was

deposited by him in terms of order dated 20th July, 2007. On the other

hand, the claim of the respondents is that the petitioner is also liable to

pay compound interest @ 18% per annum for the delay in deposit of W.P. (C) No. 9393/2009 Page 2 Rs.94,23,727/-.

5. The petitioner had filed CM No. 2559/2009 seeking clarification in

W.P. (C) No. 18752/2005. The said application was disposed of vide order

dated 8th May, 2009. The said order reads as under:-

"CM No. 2559/2009 This writ petition was disposed of on 20.07.2007. By way of this application, the petitioner is seeking restoration of the lease and transfer of the property in the name of the petitioner/applicant. Certain subsequent events have also been stated by the respondents in their reply, including an order passed by the Lieutenant Governor on 23.02.2009. I feel that it would be proper for this court not to entertain this application and to direct the petitioner to file a substantive writ petition, if he so chooses, to challenge the subsequent order passed by the Lieutenant Governor. It would be open to the petitioner to take up the plea that no interest ought to be charged from the petitioner in respect of the letter dated 17.05.2004 read alongwith the order dated 20.07.2007. This application stands disposed of with the aforesaid liberty."

6. The question of rate of interest was, therefore, left open to be

decided in a separate writ petition. Learned Judge did not opine and give

any decision whether in terms of the earlier order dated 20th July, 2007,

the petitioner was liable to pay interest on the belated payment, in spite of

the fact that liberty was granted to the petitioner to make payment within

six months.

7. The respondents on 31st January, 2009 modified their existing policy

W.P. (C) No. 9393/2009 Page 3 relating to restoration charges. As per the modified policy, the restoration

charges were drastically reduced from 25% of the market rate as decided

by the lessor from time to time to a fixed charge @ Rs.300/- per square

metre, the rate applicable in the case of the petitioner. The said policy

also provided for calculation of rate of interest. Paragraphs 2 and 3 of the

policy in this regard read as under:-

"2. 18% simple interest shall be charged on all belated payments except in those cases where specific rate of interest has been prescribed in the lease/rent agreement. However, cases where compound interest has already been charged shall not be reopened.

3. Further, interest rate on belated payment of Restoration Charges shall be charged @ 12.5% per annum where delay is 30 days or less or @ 15% per annum for the period exceeding 30 days."

8. The question of charging of rate of interest remained pending with

the respondents from 18th January, 2008 till 23rd February, 2009 when the

note put up by the Legal Assistant in the Law Department of Government

of NCT of Delhi, which states that interest should be charged @ 18% per

annum compounded annually, was accepted. The grievance of the

petitioner today is two-fold. The respondents should not charge interest

@ 18% per annum compounded annually in view of their new policy and

paragraphs 2 and 3 thereof. It is further stated that the petitioner has

already suffered and has not been given benefit of the policy decision

W.P. (C) No. 9393/2009 Page 4 dated 31st January, 2009 in respect of restoration charges. The second

contention of the petitioner is that the respondents delayed the decision

on the question of quantum of interest from 18th January, 2008 till 23rd

February, 2009 as a result of which the petitioner has not been able to

enjoy the property as he could not get the building plan sanctioned and

construction started for failure of the respondents to decide the question

of rate of interest. Thus the respondents' should compensate the

petitioner by reducing the rate of interest.

9. There is unreasonable delay on the part of the respondents in

deciding the question of rate of interest and request of the petitioner to

levy lower restoration charges. The respondents have taken more than a

year to decide this question and communicate their decision to the

petitioner. The petitioner had deposited Rs.94,23,727/- with the

respondents way back on 18th January, 2008,which by no means is a small

amount. The respondents should have immediately thereafter processed

the case in case they felt that the petitioner is liable to pay interest in

terms of the order dated 20th July, 2007 disposing of W.P. (C) No.

18752/2005. They were also required to consider the case of the

petitioner on the question of rate of interest in terms of their new policy

dated 31st January, 2009. Even if the petitioner was not to be given benefit

of the drastically reduced restoration rates mentioned in the new policy,

the decision should have been communicated within a reasonable time

W.P. (C) No. 9393/2009 Page 5 frame. The aforesaid decision took almost 13 months and was

communicated to the petitioner on 23rd February, 2009.

10. Clauses 2 and 3 of the policy decision dated 31st January, 2009

relating to rate of interest have been quoted above. It is admitted position

that as per the lease deed itself, interest is payable @ 6% per annum.

Clause 2 stipulates that 18% simple interest on belated payments shall be

charged except where specific rate of interest has been prescribed in the

lease/rent agreement. Exception has been made in cases where

compound interest has already been charged. In the present case,

compound interest was demanded and payable in terms of letter dated

17th May, 2004 but the same had not been paid by the petitioner till the

new policy dated 31st January, 2008 was enforced.

11. The petitioner may not be entitled to benefit of the contractual rate

of interest mentioned in the lease/rent agreement as in the present case

what has been demanded from the petitioner in terms of the letter dated

17th May, 2004 are the restoration charges, transfer charges and

regularization charges and not any fixed contractual charges. Accordingly,

I feel the case of the petitioner will be covered by clause 3 of the latest

policy decision dated 31st January, 2009 and the petitioner will be liable to

pay 12.5% interest for delay beyond thirty days from the date payment

was due in terms of letter dated 17th May, 2004, i.e., sixty days after the

date of the issue of said letter. After expiry of ninety days, the petitioner

W.P. (C) No. 9393/2009 Page 6 will be liable to pay interest @ 15% per annum till payment was made on

18th January, 2008. The policy quoted above is applicable to all

applications and cases where request for regularization is made. The

petitioner could have withdrawn their earlier application and filed another

application under the new policy. However in the present case, there is a

decision of this Court dated 20th July, 2007. The question of rate of

interest as held in the order dated 8th May, 2009 was left open. The

petitioner is accordingly held entitled to benefit under clause 3.

12. The respondents will compute the interest as directed above within

a period of fifteen days from the date copy of this order is received and

the petitioner will make payment of the said demand in three equal

monthly installments. The first installment will be paid within thirty days

of the date of receipt of the letter of demand. Extension of period of

construction of two years will be counted from the date the petitioner is

liable to pay the last installment of interest in terms of the present order.

In the facts and circumstances of the case, there will be no order as to

costs.

Copy of this order be given dasti to the learned counsel for the

parties.

SANJIV KHANNA, J.

         OCTOBER 29, 2009
         VKR/NA


W.P. (C) No. 9393/2009                                                 Page 7