Case Note & Summary
The appellant, Smt. Sharada M., filed a writ petition seeking a direction to the Karnataka Housing Board to execute a sale deed for a site allotted to her. The Board had invited applications for sites in Tilaknagar, Bellary, and the appellant applied in January 2006 under the MIG-II category. By letter dated 28.1.2006, the Board allotted site No.17/N to her at a provisional cost of Rs.1,51,050/-, requiring payment of the balance by 29.3.2006. The appellant paid an initial deposit of Rs.6,050/- on 29.3.2006 but did not pay the balance by that date. The Board cancelled the allotment on 27.9.2006. However, on 17.4.2008, the appellant paid the entire balance of Rs.1,45,000/-, which the Board accepted without objection. Despite this, the Board refused to execute the sale deed, leading to the writ petition. The learned Single Judge dismissed the petition, holding that the cancellation was valid and the appellant could not compel execution. In appeal, the Division Bench examined whether the Board could cancel the allotment after accepting full payment. The Court held that by accepting the balance amount without protest, the Board waived the condition regarding time of payment. The cancellation order became ineffective, and the Board was estopped from denying the allotment. The Court set aside the Single Judge's order and directed the Board to execute the sale deed within three months, failing which the appellant could seek further remedies. The appeal was allowed with no order as to costs.
Headnote
A) Administrative Law - Allotment Cancellation - Waiver of Conditions - Karnataka Housing Board Act, 1962 - The Board cancelled the allotment for non-payment within stipulated time but subsequently accepted the full balance payment without protest. Held that acceptance of payment after cancellation amounts to waiver of the condition regarding time, and the Board cannot later rely on the cancellation to deny execution of sale deed (Paras 5-7). B) Contract Law - Estoppel - Acceptance of Payment - Indian Contract Act, 1872, Section 63 - Where the promisee accepts performance after the stipulated time, the promisor is discharged from the condition of time. Held that the Board, by accepting the balance amount, is estopped from contending that the allotment stood cancelled (Paras 5-7). C) Writ Jurisdiction - Specific Performance - Direction to Execute Sale Deed - Constitution of India, Article 226 - The High Court in writ jurisdiction can direct a statutory authority to perform its contractual obligation when the authority acts arbitrarily. Held that the Board's refusal to execute sale deed despite receiving full consideration is arbitrary and liable to be set aside (Paras 7-8).
Issue of Consideration
Whether the cancellation of allotment of a site by the Karnataka Housing Board was valid when the allottee made full payment after the stipulated date but the Board accepted the payment without objection.
Final Decision
The appeal is allowed. The order dated 19.1.2015 in W.P.No.30914/2008 is set aside. The respondents are directed to execute the sale deed in favour of the appellant in respect of site No.17/N, MIG-II, Tilaknagar, Bellary (Old HP) within three months from the date of receipt of a copy of this judgment. If the sale deed is not executed within the said period, the appellant is at liberty to seek appropriate remedy in accordance with law. No order as to costs.
Law Points
- Allotment cancellation
- waiver of conditions
- acceptance of payment
- estoppel
- specific performance
- writ jurisdiction
