Huda And Another v. Dr. Babeswar Kanhar And Another

Factual and Procedural Background

Respondent 1 applied for allotment of a residential plot measuring 250 square yards in response to an advertisement issued by the Haryana Urban Development Authority (HUDA). He deposited Rs 46,625 on 26-12-2000 as earnest money. By letter dated 30-10-2001, HUDA intimated Respondent 1 that Plot No. 2205 in Sector 65, Faridabad had been allotted to him.

Clause 4 of HUDA’s allotment letter contemplated communication of refusal to accept the allotment. Relying on this clause, Respondent 1 sent a registered letter dated 28-11-2001 to HUDA, stating that he was not interested in accepting the allotment. This letter was received by HUDA on 3-12-2001. HUDA, referring to clause 4, directed forfeiture of the earnest money.

Respondent 1 filed a complaint under Section 12 of the Consumer Protection Act, 1986 before the District Consumer Disputes Redressal Forum, Faridabad. By order dated 31-3-2003, the District Forum directed refund of the amount deposited along with 12% interest from the date of deposit till realisation.

HUDA appealed to the State Consumer Disputes Redressal Commission, Haryana, Chandigarh. By order dated 9-6-2003, the State Commission reduced the rate of interest to 10% but otherwise affirmed the District Forum’s direction for refund.

HUDA then filed a revision petition before the National Consumer Disputes Redressal Commission. By order dated 4-2-2004, the National Commission dismissed the revision. HUDA thereafter approached the Supreme Court by way of appeal, in which leave was granted.

Legal Issues Presented

1. Whether, under clause 4 of the allotment letter, HUDA was entitled to forfeit the earnest money when Respondent 1’s communication of non-acceptance, though dispatched within the stipulated period, was received after the period expired due to postal holidays and closure of HUDA’s office.
2. Whether the consumer fora were justified in directing refund of the deposited amount with interest, and to what rate and from what date such interest should be payable.

Arguments of the Parties

Appellant HUDA's Arguments

• Clause 4 of the allotment letter clearly stipulated forfeiture of the earnest money if intimation of non-acceptance of the allotment was not given within 30 days.
• Since the communication of non-acceptance was not received within 30 days, the forfeiture ordered by HUDA was valid.
• Consequently, the directions of the consumer fora to refund the amount with interest were not sustainable in law.

Respondent 1's Arguments

• He communicated his non-acceptance by a registered letter dated 28-11-2001, within the 30-day period.
• 30-11-2001 was a postal holiday, and the HUDA office was closed on 1-12-2001 and 2-12-2001.
• The letter was served on HUDA on 3-12-2001, the next working day after the closure period, and he had no control over postal holidays or office closures.
• Thus, the communication should be treated as within time, and the orders of the forums below did not suffer from any infirmity.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court examined clause 4 of HUDA’s allotment letter dated 30-10-2001 and noted that what it stipulated was a communication regarding refusal to accept the allotment. This requirement was satisfied when Respondent 1 sent his registered letter on 28-11-2001 communicating non-acceptance.

The Court emphasized that Respondent 1 could not be made to suffer for circumstances beyond his control—namely, the postal holiday on 30-11-2001 and the closure of HUDA’s office on 1-12-2001 and 2-12-2001. Because of these factors, the letter was actually received by HUDA on 3-12-2001.

The Court observed that the logic of Section 10 of the General Clauses Act, 1897 could be invoked. It referred to the general principle that where a period is prescribed for performance of an act in a court or office and that period expires on a holiday, performance on the next working day is deemed to be within time. The Court cited Sambasiva Chari v. Ramasami Reddi and Hossein Ally v. Donzelle to illustrate this principle and its rationale—namely, that the law does not compel the performance of an impossibility and that what could have been done on a holiday may validly be done on the next working day.

The Court articulated that every consideration of justice and expediency requires application of the accepted principle underlying Section 10 of the General Clauses Act even in cases where that provision does not in terms apply. It expressly invoked the maxims lex non cogit ad impossibilia (the law does not compel a man to do the impossible) and actus curiae neminem gravabit (the act of court shall prejudice no man) as the principles underlying the approach.

On this reasoning, the Court held that there was no infirmity in the orders passed by the consumer fora directing refund of the amount, since the communication of refusal was to be treated as within time and HUDA’s forfeiture could not stand on the basis of delay caused by holidays and office closure.

However, the Court considered the rate of interest awarded to be on the higher side. While upholding the direction to refund, it modified the interest component by reducing the rate to 9% per annum, to be paid with effect from 3-12-2001, the date on which HUDA actually received the respondent’s letter.

Holding and Implications

Holding: The appeal was DISPOSED OF by affirming the orders of the District Forum, State Commission, and National Commission insofar as they directed refund of the deposited amount to Respondent 1, but modifying the rate of interest. The Supreme Court reduced the interest to 9% per annum, payable with effect from 3-12-2001, the date on which HUDA received the communication of refusal.

Implications: The immediate consequence is that Respondent 1 is entitled to refund of the earnest money with interest at 9% per annum from 3-12-2001 until realisation, and HUDA’s forfeiture of the deposit does not stand. The decision applies the principle that a party prevented from acting within a prescribed period due to holidays or office closure may validly act on the next working day, aligning with the logic of Section 10 of the General Clauses Act, 1897. No broader or novel legal rule is expressly laid down beyond this application of established principles to the facts of the case.