Telangana High Court
Huda., Hyderabad, And Anr. vs S.V. Castle Creators And Engineers ... on 11 September, 2024
1
THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HON'BLE SRI JUSTICE J.SREENIVAS RAO
+ WRIT APPEAL No. 1105 OF 2016
% Dated 11.09.2024
# Hyderabad Urban Development Authority, rep.,
by its Vice Chairman, Hyderabad and another.
....Appellants
VERSUS
$ S.V. Castle Creators & Engineers Private Limited,
rep., by its Director, Sri M.V.S. Sridhar,
S/o. M.Narayanaswamy Naidu, aged 41 years,
H.No. 7-1-414/37, Srinivasa Colony East, S.R.
Nagar, Hyderabad - 38.
... Respondent
! Counsel for Appellants : Sri Pottigari Sridhar Reddy, Spl.G.P.
^ Counsel for Respondent : Sri C.Raghu
< GIST:
> HEAD NOTE:
? CITATIONS:
1. 2006(5) ALD 741 (DB)
2. (2015) 17 SCC 613
2
THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HON'BLE SRI JUSTICE J.SREENIVAS RAO
WRIT APPEAL No. 1105 OF 2016
JUDGMENT:
(per the Hon'ble Sri Justice J. Sreenivas Rao)
This intra-court Appeal is filed aggrieved by the orders
passed by the learned Single Judge of the erstwhile High Court of
Judicature at Hyderabad for the State of Telangana and the State
of Andhra Pradesh in allowing Writ Petition No.14316 of 2008,
dated 30.09.2015, setting aside the proceedings
No.5640/EMC/HUDA/96, dated 02.03.2008, issued by appellant
No.1 cancelling the allotment made in favour of the respondent
vide proceedings dated 28.08.1996.
2. Heard Sri Pottigari Sridhar Reddy, learned Special
Government Pleader representing learned Advocate General
appearing on behalf of the appellants and Sri C.Raghu, learned
Senior Counsel appearing on behalf of the respondent.
3. For the sake of convenience, the parties in this appeal are
referred to as petitioner and respondents, as they are arrayed in
the writ petition.
4. Brief facts of the case:
4.1. Respondent No.2-Hyderabad Urban Development Authority,
Hyderabad, had issued auction of sale notification from respective
bidders proposing to conduct public auction-cum-sale in respect
of 22 commercial plots and 6 residential plots situated at
Ramachandrapuram and Sarrornagar by mentioning the terms
and conditions and conducted auction on 5th and 6th August,
1996. In the said auction, the petitioner-Company (hereinafter
called, 'the petitioner') was declared as the highest bidder for plot
No.5 admeasuring 1320 square meters equivalent to 1578.72
square yards, @ Rs.510/- per square meter, situated at HUDA
Trade Center, Ramchandrapuram, with a total sale price of
Rs.6,73,200/-. That the petitioner paid an amount of
Rs.1,18,300/- towards initial deposit apart from EMD amount of
Rs.50,000/- on 05.08.1996. Accordingly, respondent No.2 issued
letter of provisional allotment to the petitioner on 28.08.1996
intimating to pay the balance amount of Rs.5,04,900/- without
any interest within one month i.e. 27.09.1996, or with interest
20% per annum on or before 06.11.1996 and also mentioned that
non-payment of the amount within the date will entail
cancellation without any intimation as per the terms and
conditions.
4.2 Thereafter, on 08.12.1996, respondent No.2 issued notice
informing the petitioner to make the payment on or before
31.12.1996, failing which allotment will be cancelled without any
notice. Again respondent No.2 issued another notice on
01.01.1997 asking the petitioner to make the payment on or
before 10.01.1997, failing which respondent No.2 will cancel the
allotment, as per the terms and conditions of allotment without
any notice. On 10.01.1997, the petitioner paid an amount of
Rs.2,64,900/-, out of Rs.5,04,900/-, with 20% interest to be paid.
4.3. Thereafter, on 16.09.1997 respondent No.2 issued notice to
the petitioner to pay the balance amount, wherein it is further
stated that the said notice may be treated as show-cause notice
and if the amount not paid on or before 30.09.1997, the allotment
will be automatically get cancelled, as per the terms and
conditions of the allotment. The petitioner paid Rs.1,00,000/- on
07.10.1997 and Rs.1,40,000/- on 07.11.1997.
4.4 Respondent No.2 sent another notice on 25.02.1999 to the
petitioner intimating that if the total amount is not paid on or
before 15.03.1999, allotment shall be cancelled without any
notice. Subsequently, on 15.07.2003 respondent No.2 issued
another notice to the petitioner intimating that if the due amount
is not paid on or before 31.07.2003, the allotment shall stands
terminated without any notice. Subsequently, on 26.08.2003
respondent No.2 issued another notice to the petitioner directing
to pay an amount of Rs.3,19,936/- along with interest on or
before 15.09.2003 or else allotment will be cancelled without any
notice, as per Clause 11 of the terms of allotment. Once again on
16.10.2003, respondent No.2 issued notice to the petitioner
directing to pay an amount of Rs.3,37,027/- with interest on or
before 31.10.2003 and rejected the request made by the petitioner
for reduction of interest and further stated that the present value
of the property is now valued @ Rs.1,700/- to Rs.2,500/- per
square yard.
4.5 On 10.11.2003, the petitioner submitted a letter to
respondent No.2 stating that they are in financial crisis and
sought for concession in rate of interest. On 08.12.2003,
respondent No.2 issued show-cause notice directing the petitioner
to submit explanation as to why the allotment shall not be
cancelled, since the outstanding payment of Rs.5,07,312/- is not
paid and directed them to submit explanation on or before
31.08.2005, or else action will be taken to cancel the allotment.
4.6 On 31.08.2005, the petitioner addressed a letter to
respondent No.2 requesting for concessional interest, as the
petitioner is in the state of bankruptcy. On 25.11.2005,
respondent No.2 took a decision for cancellation of allotment in
File No.5640/HUDA/EMU/96. On 30.11.2005, the petitioner
deposited the amount directly in the Bank account of respondent
No.2 without their consent. On 02.03.2008, respondent No.2
passed the impugned order cancelling the allotment made in
favour of the petitioner through proceedings No.5640/EMC/
HUDA/96, dated 02.03.2008, by returning the amount of
Rs.11,78,928/- through cheque bearing No.435354, dated
04.03.2008, after forfeiting the initial deposit amount, invoking
condition Nos.11(a) and 11(d) of auction-sale notice. Aggrieved by
the same, the petitioner filed W.P. No.14316 of 2008.
4.7 Learned Single Judge allowed the above said Writ Petition,
on the ground that prior to passing of impugned cancellation of
allotment order dated 02.03.2008, the petitioner had already paid
entire amount and respondent No.2 themselves have extended the
time limit for payment of amount from time to time and time is
not the essence of contract, by its order dated 30.09.2015.
Aggrieved by the same, respondent No.1 filed the present Appeal.
5. Submissions of learned Special Government Pleader for
appellants:
5.1. Learned Special Government Pleader submits that as per
the terms and conditions of auction-cum-sale notification and
provisional allotment letter, the petitioner has to pay the balance
amount without any interest within one month i.e., on or before
27.09.1996, or with interest @ 20% per annum within three
months i.e., on or before 06.11.1996. In spite of repeated
demands, the petitioner has not paid the balance amount along
with accrued interest. Respondent No.2 had issued show cause
notice on 08.08.2005, wherein it is specifically stated that the
petitioner is due an amount of Rs.5,07,312/- as on 31.07.2005
and directed to submit explanation as to why the allotment of plot
cannot be cancelled forfeiting the amount deposited by the
petitioner.
5.2 He further contended that pursuant to the said show cause
notice, the petitioner has not submitted any explanation, on the
other hand submitted representation on 31.08.2005 requesting
the respondent No. 2 to consider concessional interest, though the
said request was already rejected through letter, dated 16.10.2003
by giving reasons. He further submits that respondent No.2 after
following the due procedure passed the impugned order on
02.03.2008 cancelling the allotment made in favour of the
petitioner by invoking the condition Nos.11(a) and 11(d) of the
auction-cum-sale notice by returning the amount of
Rs.11,78,928/- in favour of the petitioner by way of Cheque.
5.3 He further contended that the petitioner without taking any
consent or approval from the respondent No.2, deposited the
amount in their bank account unilaterally. Basing on the alleged
deposit, the petitioner is not entitled to claim any relief. Learned
Single Judge without taking into consideration the above said
fact, set aside the impugned proceedings issued by the respondent
No.2, dated 02.03.2008 and allowed the Writ Petition and the
same is contrary to law.
5.4 In support of his contention, he relied upon the Division
Bench judgment of the erstwhile High Court of Judicature,
Andhra Pradesh at Hyderabad in M.Padmavathi vs. Hyderabad
Urban Development Authority, Secunderabad 1.
6. Submissions of learned Senior Counsel appearing on
behalf of respondent:
6.1 Per contra, learned Senior Counsel contended that the
petitioner had deposited the entire amount along with accrued
interest on 30.11.2005. Respondent No.2 without properly
considering the said fact, passed the impugned order, dated
02.03.2008 cancelling the allotment made in favour of the
petitioner. He further contended that respondent No.2 has not
disputed the deposit of entire amount subsequent to the show
2006(5) ALD 741 (DB)
cause notice, dated 08.08.2005, on the other hand, passed the
above said order after lapse of more than two years and the same
is not permissible under law.
6.2 He also contended that respondent No.2 themselves
extended the time from time to time and the petitioner paid the
entire amount along with interest, as enumerated in the
provisional allotment letter. Respondent No.2 before cancelling
the said allotment through impugned order, dated 02.03.2008,
they have not issued any show cause notice and the same is gross
violation of the principles of natural justice.
6.3 He further contended that respondent No.2 issued show
cause notice, dated 08.08.2005, directing the petitioner to pay the
balance amount on or before 31.08.2005 and that respondent
No.2 has not issued any show cause notice proposing to cancel
the allotment made in favour of the petitioner. In the absence of
the same, respondent No.2 passed the impugned order, dated
02.03.2008 and the same is gross violation of the principles of
natural justice.
6.4 He also contended that the learned Single Judge after
taking into consideration the contentions made by the respective
parties and also after due verification of the records has rightly
allowed the Writ Petition on 30.09.2015 and there are no grounds
to interfere with the above said order.
6.5 In support of his contention, he relied upon the judgment of
the Apex Court in Sunil Madnani vs. Delhi Development
Authority 2.
Analysis of the case:
7. Having considered the rival submissions made by the
respective parties and after perusal of the material available on
record, it reveals that respondent No.2 conducted public auction
for allotment of plot No.5 admeasuring 1320 square meters
situated at HUDAs Trade Center, Ramchandrapura, on
05.08.1996 along with other property. In the said auction, the
petitioner was declared as highest bidder for total sale price of
Rs.6,73,200/- on 09.08.1996, and therefore, the petitioner paid
an amount of Rs.1,18,300/- towards initial deposit and
Rs.50,000/- towards EMD. Pursuant to the same, respondent
No.2 issued provisional allotment letter to the petitioner on
28.08.1996. As per the terms and conditions mentioned in
auction-cum-sale notification, the petitioner has to pay the
balance amount of Rs.5,04,900/- on or before 27.09.1996 or they
have to pay the said amount along with interest @ 20% per
(2015) 17 SCC 613
annum on or before 06.11.1996 and the petitioner has accepted
the said conditions but has not paid the amount within the
stipulated time. However, respondent No.2 had issued notice on
08.12.1996 directing the petitioner to make the payment on or
before 10.01.1997, failing which the allotment will be cancelled
without any notice. Again issued another notice on 01.01.1997
directing the petitioner to pay the amount on or before
10.01.1997. The petitioner instead of paying the amount of
Rs.5,04,900/-, paid only an amount of Rs.2,64,900/-. Thereafter
respondent No.2 had issued another notice on 16.09.1997
directing the petitioner to pay the balance amount, and if the
amount is not paid on or before 30.09.1997, the allotment will get
automatically cancelled.
8. It appears from the record that the petitioner paid an
amount of Rs.1,00,000/- on 07.10.1997 and Rs.1,40,000/- on
07.11.1997. However, the petitioner has not paid the entire due
amount along with interest. It further appears that respondent
No.2 had once again issued notice on 25.02.1999 informing the
petitioner that if they have not paid the entire amount on or
before 15.03.1999, the allotment shall be cancelled without any
further notice. Again respondent No.2 issued another notice on
15.07.2003 intimating the petitioner that if the due amount is not
paid on or before 31.07.2003, the allotment shall stand
terminated without any notice. Once again on 26.08.2003,
respondent No.2 issued another notice directing the petitioner to
pay an amount of Rs.3,19,936/- with interest on or before
15.09.2003, else the allotment will be cancelled without any
notice, as per the clause 11 of the terms and conditions of auction
sale notice. Thereafter on 16.10.2003 respondent No.2 issued
another notice directing the petitioner to pay the amount of
Rs.3,37,027/- with interest on or before 31.10.2003 and also
rejected the claim of the petitioner for reduction of interest.
9. In the above said notice dated 16.10.2003, respondent No.2
specifically stated that the market rate prevailing in the area as on
that date between Rs.1,700/- to Rs.2,500/- per square yard.
Whereas the allotment made in favour of the petitioner on
28.08.1996 @ Rs.510/- per square meter. Hence, question of
reduction of interest claimed by the petitioner does not arise. In
spite of repeated notices issued by the respondent No.2, petitioner
has not chosen to pay the entire amount along with interest. On
the other hand, once again submitted representation on
10.11.2003 requesting respondent No.2 to grant concessional rate
of interest due to their financial crisis, though respondent No.2
has already rejected the claim of petitioner through notice dated
16.10.2003 for reduction of interest.
10. On 08.08.2005 respondent No.2 had issued show cause
notice exercising the clause Nos.11(a) and 11(d) of the terms and
conditions of auction-cum-sale notice, wherein specifically stating
that as on 31.07.2005, the petitioner is due an amount of
Rs.5,07,312/- and directed the petitioner to submit explanation
why the allotment of subject property shall not be cancelled and
forfeit the amount.
11. It appears from the record that the petitioner has not
submitted explanation to the above said show cause notice. On
the other hand, submitted representation on 31.08.2005
requesting respondent No.2 for concessional interest, though the
request made by the petitioner was already rejected by the
respondent No.2 through letter dated 16.10.2003 explaining the
reasons. On 25.11.2005 the competent authority has taken a
decision for cancellation of the allotment made in favour of the
petitioner also and for refund of the amount to the petitioner as
per their entitlement.
12. It further reveals from the record that the petitioner
unilaterally deposited the amount in the Bank account of
respondent No.1, directly in the absence of any permission or
authorization, and filed representation on 30.11.2005 by
enclosing the Xerox copy of challan, dated 30.11.2005 in the
inward section of respondent No.2 Office. The above said
document clearly reveals that the petitioner had not obtained
prior permission or consent for depositing the above said amount,
on the other hand, they unilaterally deposited the amount in the
respondent No.2 bank account. Respondent No.2 had issued the
impugned order on 02.03.2008 cancelling the allotment made in
favour of the petitioner and returned the amount of
Rs.11,78,728/- by way of cheque by forfeiting the amount as per
the terms and conditions of the auction sale notice.
13. Learned Single Judge allowed the writ petition only on the
ground that respondent No.2 themselves extended the time limit
for payment of amount from time to time. Hence, time is not the
essence of the contract and also on the other ground that
respondent No.2 passed the impugned order dated 02.03.2008
cancelling the allotment made in favour of petitioner subsequent
to deposit of the amount.
14. It is pertinent to mention that the petitioner after accepting
the terms and conditions of the auction-cum-sale notice and
provisional allotment letter dated 28.08.1996, failed to pay the
entire amount within the stipulated time, in spite of repeated
reminders issued by the respondent No.2 and the petitioner is not
entitled to take shelter on the ground that the petitioner deposited
the entire amount voluntarily in the bank account of respondent
No.2 behind their back even before cancellation of the allotment
made in their favour, especially without consent of respondent
No.2 and basing on the said deposit, the petitioner is not entitled
to seek equitable relief under Article 226 of the Constitution of
India.
15. It is also pertinent to mention here that at the time of
conducting auction in the year 1996, the value of the property is
Rs.510/- per square meter and the petitioner has to pay the entire
amount within a period of one (1) month i.e. on or before
27.09.1996 without interest and with interest within a period of
three (3) months i.e. on or before 06.11.1996 and the petitioner
has not paid the said amount within the stipulated time in spite of
several reminders issued to the petitioner. Similarly, the request
made by the petitioner for reduction of interest was rejected by the
respondent No.2 on 16.10.2003 by giving reasons, specifically
stating the market value of the property prevailing in the said area
was in between Rs.1,700/- to Rs.2,500/- per square yard as on
the date of issuance of the said notice approximately. Whereas
the subject property was allotted to the petitioner @ Rs.510/- per
square meter only. In spite of the same, the petitioner has not
chosen to pay the due amount along with interest.
16. In M.Padmavathi (supra), the Division Bench of erstwhile
High Court of Judicature, Andhra Pradesh at Hyderabad
specifically held as follows:
"Before concluding, we deem it proper to
take judicial notice of the fact that the price of
real estate has been escalating in last 20 years.
Therefore, implementation of the so-called
decision taken by the functionaries of HUDA to
restore the allotment in favour of a person who
had paid 60 per cent of the total price on the
condition of imposition of 5 per cent penalty
would be gravely detrimental to the financial
interest of HUDA, which is a creature of a
statute. The very fact that the plot in question
has been auctioned on 21.7.2006 for a sum of
Rs.6.00 Crores as against a paltry amount of
Rs.20,80,800/- offered by the petitioner and her
co-bidders in 1996 is sufficient to demonstrate
that the so-called decision taken by HUDA was
highly injudicious, unwarranted and contrary to
public interest and this Court cannot enforce
such decision."
17. In the case on hand, the auction was conducted on
05.08.1996 in respect of the subject property along with other
properties and the provisional allotment order was issued in
favour of the petitioner on 28.08.1996. As per the terms and
conditions of the auction sale notice and also provisional
allotment order, dated 28.08.1996, the petitioner has not paid the
amount within the stipulated time and in spite of several
reminders. Due to escalation of the prices, the subject property
value in the year 2003 itself is more than Rs.2,500/- per square
yard and therefore, the petitioner is not entitled to claim any
equity on the ground that he paid the amount to respondent No.2
even before passing the impugned order of cancellation of
allotment made in their favour. Especially, the petitioner
deposited the amount in respondent No.2 Bank account
unilaterally without any consent/permission from the respondent
No.2. Basing on the alleged deposit, the petitioner is not entitled
to claim any equities.
18. The judgment relied upon on by the learned Senior Counsel
for the appellant in Sunil Madnani (supra), wherein cancelled the
allotment of property made in favour of the appellant therein for
non-payment of balance sale consideration, though the
respondent therein passed a resolution, dated 12.10.2009
granting benefit in favour of 18 plot holders in another locality.
The Apex Court held that the cancellation of allotment made in
favour of appellant therein and non-extending the very same
benefit which was given by the respondent authority in favour of
18 plot holders amounts to discrimination. The above said
judgment is not applicable to the facts and circumstances of this
case on the ground that the petitioner has not pleaded that
respondent No.2 has taken any similar decision or extended the
benefits to the similarly situated persons by dropping the
cancellation of allotment.
19. It is already stated supra, that petitioner has not paid the
amount pursuant to the terms and conditions mentioned in the
auction-cum- sale notice and also as per the provisional allotment
letter. Respondent No.2 had issued show cause notice dated
08.08.2005 directing the petitioner to submit explanation as to
why the allotment made in their favour should not be cancelled.
Petitioner without submitting any explanation to the said show
cause notice, deposited the amount in the respondent No.2 Bank
account unilaterally behind their back, in the absence of any
permission/authorization and basing upon the same, the
petitioner is not entitled to claim any equities and respondent
No.2 has rightly cancelled the allotment made in favour of the
petitioner exercising the powers conferred under condition
Nos.11(a) and 11(d) of auction-cum-sale notification and refunded
the amount of Rs.11,78,728/- by forfeiting the amount. By virtue
of the escalation of the prices, the value of the property is
increased tremendously. Further, the property belongs to State
and the public interest is also involved. If the respondents have
conducted the auction in the year 2005, the property value would
fetch more.
20. For the foregoing reasons, the impugned order passed by
the learned Single Judge in W.P. No.14316 of 2008 dated
30.09.2015 is liable to be set aside and accordingly, set aside.
21. Accordingly, the Writ Appeal is allowed. No order as to
costs.
Miscellaneous petitions, if any pending, shall stand closed.
_______________________
ALOK ARADHE, CJ
_____________________________
J.SREENIVAS RAO, J
Date: 11.09.2024.
pgp
L.R. Copy to be marked.
