Case Note & Summary
This appeal by special leave arose from an order of the High Court of Patna dated 8.5.1995 by which a Division Bench refused to modify an earlier order dated 2.2.1993. The appellants were the Bihar State Housing Board, its Managing Director and its Executive Engineer at Harun-Ranchi. The respondent was Lalit Ram, an allottee under a housing scheme of the Board. The dispute pertained to a flat bearing No.H-1/200 allotted to the respondent by allotment order dated 9.12.1983 at a tentative cost of Rs.85,400. The respondent was required to pay an initial amount of Rs.17,230 after adjusting an advance of Rs.6,500, leaving Rs.10,730 to be paid within thirty days. The respondent paid this amount only in 1987 in the sum of Rs.17,541, presumably with interest. Clause 6 of the allotment order required the balance of Rs.68,320 to be paid in monthly installments along with interest. The respondent contended that he could not execute the required agreement because the flat remained incomplete; he informed the Board that he had to take another house on rent. He then filed a writ petition before the High Court seeking appropriate reliefs. By order dated 2.2.1993, the High Court directed that upon deposit of the balance amount of Rs.68,320, the Housing Board would deliver vacant possession of the flat with all fittings and fixtures within one month from the last deposit, and the Board was to indicate the date for execution of agreement when the respondent deposited the last installment. On 15.2.1993, the Executive Engineer required the respondent to execute the agreement after depositing Rs.68,320 within two months and to take physical possession. It was admitted that the respondent paid that amount. The Housing Board thereafter moved the High Court on three occasions seeking modification of the order dated 2.2.1993, but the High Court declined each time, culminating in the order challenged before the Supreme Court. Before the Supreme Court, learned counsel for the Housing Board mainly contended that the amount of Rs.85,400 was only tentative and the allottee was liable to pay revised rates; additionally, the Board claimed that respondent was liable to pay interest on the Rs.68,320 because he failed to pay the monthly installment of Rs.980 from the date of allotment. The Court at first blush considered the interest claim to have merit, but upon closer examination found the other side of the picture. The respondent alleged that the flat in its incomplete form was being used by the Housing Board for storing cement stock. It was undisputed that the flat remained incomplete. The appellants blamed the respondent for non-execution of agreement, but the Court held that liability to execute the agreement cannot be insisted upon without completing the construction of the flat. In the above situation, the Court found no fit case for interference with the High Court order. The Supreme Court dismissed the appeal and granted two months' time to the Housing Board to comply with the directions issued by the High Court in the order dated 2.2.1993.
Headnote
A) Housing Allotment - Delivery of Possession - High Court direction to deliver vacant possession with fittings and fixtures upon deposit of balance amount upheld - Not mentioned - The High Court directed the Housing Board to deliver vacant possession within one month from the last deposit of Rs.68,320 as per clause 6 of the allotment order; the Supreme Court found no fit case for interference and granted two months to comply. Held that the High Court order did not warrant modification. B) Contract Enforcement - Execution of Agreement - Liability to execute agreement cannot be insisted upon without completing construction of flat - Not mentioned - The Housing Board blamed the respondent for non-execution of agreement, but the court observed that the flat remained incomplete and that liability to execute the agreement cannot be insisted without completing the construction. Held that the appellants could not insist on execution of agreement before completing the flat. C) Interest on Delayed Payment - Claim for Interest on Balance Amount - Claim for interest on Rs.68,320 not accepted where flat was incomplete and used for storing cement - Not mentioned - The Housing Board argued that respondent was liable to pay interest on the balance amount for failure to pay monthly installments; the court noted the flat remained incomplete and was used by the Housing Board for storing cement stock, thereby rejecting the claim. Held that the appeal was dismissed.
Issue of Consideration
Whether the High Court was justified in refusing to modify its earlier order directing delivery of possession of an allotted flat upon deposit of the balance amount, despite the Housing Board's claim for interest on delayed payment and revised cost; whether execution of agreement can be insisted upon before completion of construction.
Final Decision
The Supreme Court dismissed the appeal and granted two months' time to the Housing Board to comply with the directions issued by the High Court in the order dated 2.2.1993.
Law Points
- Liability to execute agreement cannot be insisted upon without completing construction of flat
- Allottee cannot be compelled to execute agreement when flat remains incomplete
- Claim for interest on balance amount not accepted where flat incomplete and used for storing cement
- High Court direction to deliver possession on deposit of balance amount confirmed
- Supreme Court grants two months time to comply with High Court directions
