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Smart Summary

Factual and Procedural Background

An appeal by special leave challenged an order of the Patna High Court dated 8-5-1995, by which a Division Bench refused to modify its earlier order dated 2-2-1993. The appellants were the Bihar State Housing Board, its Managing Director, and its Executive Engineer at Harun—Ranchi.

Under a housing scheme, the Housing Board allotted Flat No. H-1/200 to the respondent by allotment order dated 9-12-1983 at a tentative cost of Rs 85,400. The respondent was to make an initial payment of Rs 17,230, with an advance of Rs 6,500 adjustable, leaving Rs 10,730 payable within 30 days; the respondent paid later in 1987 (Rs 17,541, presumably with interest). Under clause 6 of the allotment order, the balance amount of Rs 68,320 was to be paid in monthly instalments with interest.

The respondent asserted that the flat remained incomplete and therefore he could not execute the required agreement; he informed the Board that he had to live in rented accommodation and was suffering loss, and he filed a writ petition in the High Court.

By order dated 2-2-1993, the High Court directed that upon the respondent depositing the balance amount of Rs 68,320, the Housing Board must deliver vacant possession with all required fittings and fixtures within one month from the date of last deposit, and also indicate the date for execution of the necessary agreement after the last instalment. On 15-2-1993, the Executive Engineer required the respondent to execute the agreement after depositing Rs 68,320 within two months and take possession. It was admitted that the respondent paid Rs 68,320. The Housing Board moved the High Court three times for modification of the 2-2-1993 order; the High Court declined on all three occasions, leading to the present appeal.

Legal Issues Presented

  1. Whether the Supreme Court should interfere with the High Court’s refusal (dated 8-5-1995) to modify its earlier order dated 2-2-1993 directing delivery of possession upon deposit of Rs 68,320.
  2. Whether the Housing Board could claim interest on Rs 68,320 on the basis that the respondent failed to pay monthly instalments from the date of allotment, despite the flat remaining incomplete and the agreement not having been executed.

Arguments of the Parties

Appellants' (Housing Board) Arguments

  • The allotment cost of Rs 85,400 was only tentative and the allottee would be liable to pay the revised rate when the final amount was estimated (mentioned as a separate aspect).
  • The respondent was liable to pay interest on the balance amount of Rs 68,320 because he allegedly failed to pay the monthly instalments of Rs 980 from the date of allotment.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court noted that, at first glance, the Housing Board’s claim for interest appeared to have merit. However, on examining the circumstances, it considered the respondent’s repeated communications that the flat remained incomplete and required fittings and fixtures, and the additional allegation that the incomplete flat was being used by the Housing Board for storing cement. It was undisputed before the Court that the flat remained incomplete.

The Court rejected the appellants’ attempt to attribute the incompleteness to the respondent on the ground that no agreement had been executed. It reasoned that the liability to execute the agreement could not be insisted upon without completing the construction of the flat. On this basis, the Court found no justification to interfere with the High Court’s order.

Holding and Implications

DISMISSED: The Supreme Court dismissed the appeal and declined to interfere with the High Court’s order.

The Court granted the Housing Board two months from the date of its decision to comply with the directions issued by the High Court in the order dated 2-2-1993 (including delivery of vacant possession with fittings and fixtures after deposit). The opinion does not indicate any broader legal implications or the setting of a new precedent; its direct effect is to enforce compliance with the High Court’s directions in favour of the respondent.

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    Bihar State Housing Board And Others v. Lalit Ram .

    K.T Thomas, J.— This appeal by special leave is in challenge to an order of the High Court of Patna dated 8-5-1995 by which a Division Bench has refused to modify an earlier order dated 2-2-1993. The appellants herein are the Bihar State Housing Board, its Managing Director and its Executive Engineer at Harun — Ranchi.

    2. The Bihar State Housing Board (for short “the Housing Board”) put up flats under a housing scheme. As per the allotment order dated 9-12-1983, a flat bearing No. H-1/200 was allotted to the respondent at a tentative cost of Rs 85,400. The respondent was to pay a sum of Rs 17,230 as the initial payment. As the respondent had paid an advance of Rs 6500 he was permitted to deduct it from the initial payment and thus he was to pay Rs 10,730 in a lump within thirty days from the date of allotment order. But the respondent paid that amount only in 1987 presumably with interest (as he paid an amount of Rs 17,541). As per clause 6 of the allotment order the allottee was to pay the balance amount of Rs 68,320 in monthly instalments along with interest. The case of the respondent is that he could not execute the agreement as was required in the allotment order as the flat remained incomplete. He informed the Housing Board that he had to take another house on rent to live in and he was incurring a huge loss on account of it. The respondent then filed a writ petition before the High Court for appropriate reliefs.

    3. By order dated 2-2-1993, a Division Bench of the High Court directed that if the respondent would deposit the balance amount of Rs 68,320 as mentioned in clause 6 of the allotment order, the Housing Board shall deliver vacant possession of the flat to him with all the fittings and fixtures required to be done “within one month from the date of last deposit of the amount”. The Board was further directed to indicate the date when the respondent was to execute the necessary agreement after the respondent deposits the last instalment.

    4. On 15-2-1993, the Executive Engineer of the Housing Board required the respondent to get the agreement executed after depositing the amount of Rs 68,320 within two months and to take physical possession of the flat. It is now admitted that the respondent had paid the said amount. But the Housing Board thereafter moved the High Court for modification of the order dated 2-2-1993 on three different occasions, and the High Court has declined to modify the order on all those three occasions.

    5. The main thrust of argument of Shri Ranjit Kumar, learned counsel for the Housing Board, is that the amount of Rs 85,400 was fixed in the allotment order only tentatively and the allottee is liable to pay the revised rate when the Housing Board estimates the final amount. That is altogether a different aspect since the claim of the Board now is that the respondent is liable to pay interest on the amount of Rs 68,320 since the respondent has failed to pay the monthly instalment of Rs 980 from the date of allotment.

    6. At the first blush, it appeared that there is merit in the aforesaid claim of the Housing Board. But on a closer look we noticed the other side of the picture. The respondent has been intimating the Board time and again that they have to make the flat residential by putting up the fittings and fixtures as it remains only in a skeleton form. The respondent further alleges that the flat in the present incomplete form is being used by the Housing Board for storing cement stock with them. It is a fact which is not disputed before us that the flat remains incomplete. The appellants blame the respondent for it as no agreement was executed but liability to execute the agreement cannot be insisted on without completing the construction of the flat.

    7. In the above situation, we do not think that this is a fit case for interference with the order of the High Court. While dismissing this appeal we grant two months' time from today to the Housing Board to comply with the directions issued by the High Court in the order dated 2-2-1993.

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    Comments

    Bihar State Housing Board And Others v. Lalit Ram .
    (Feb 3, 1997)