R. V. RAVEENDRAN, J. - (1.) LEAVE granted.
(2.) THE first appellant is the Haryana State Agricultural Marketing Board ('Board' for short) and second appellant is the Nighdu Market Committee ('Market Committee' for short). THE Market Committee established a New Grain Market at Karnal- Pehowa Road, Nighdu, District Karnal. It gave public notice of a scheme for the open auction of plots, booths and commercial places in the market, to be held on 13.1.1999. THE said auction was governed by the Haryana State Agricultural Marketing Board (Sale of Immovable Property) Rules, 1997 (for short 'the Rules'). Rule 4 of the Rules requires the auction purchaser/allottee to complete construction of a shop within two years from the date of the allotment order. Rule 5 provides that the terms and conditions governing sale will be determined by the Board from time to time. The following provisions of the Terms and Conditions of Sale (by auction), framed by the Board are relevant: "3. One-fourth amount of the successful bid shall be required to be deposited on the spot. Failure to do so shall lead to forfeiture of the earnest money. 12. Allottees shall deposit the remaining three-fourths amount either in a lumpsum without interest within 30 days of allotment or in six equal half yearly instalments along with interest at 15% per annum. 13. The sale/allotment shall remain further subject to the terms and conditions as enumerated in the letter of allotment." The auction Notice also reiterated Conditions (3) and (12) extracted above. The respondent in each of these appeals was the highest bidder in respect of the plot for which he gave the bid. In pursuance of it, each respondent (auction-purchaser) was issued a letter of allotment on 30th January, 1999, specifying the particulars of the plot purchased by him, the auction sale price, 25% amount paid as earnest money and the particulars of the instalments of principal and interest, if the auction-purchaser wanted to pay the 75% amount in six half yearly instalments as also the dates on which the instalments had to be paid. We extract below the relevant clauses of the letter of allotment which was issued to the respondent (Rajpal) in the first matter: "2. The following particulars site is hereby allotted to you on the terms and conditions announced at the spot and mentioned hereunder: JUDGEMENT_1394_AIR(SC)_2011Image1.jpg 3. The area and number shown above are given in the respective plan and are subject to variation of the time of actual possession. 4. The sum of Rs. 63,750/- paid by you as earnest money has been adjusted in your plot account. You are, requested to remit a sum of Rs. 1,91,250/- on account of 75% balance sale price either within 30 days of receipt of this allotment letter without interest or in six half yearly instalments together with interest @ 15% p.a. accruing from the date of issue of this letter as mentioned hereunder." (See Table below)
(3.) IN case of failure to deposit the instalment(s) by 10th of every month due, compound interest @ 10% p.a. along with penal interest @ 4% p.a. with instalments shall be charged. 12. The transferee shall complete the building within two years from the date of issue of allotment order............ 15 .The Market Committee Nighdu shall (Contd. on 2nd col.) not be responsible for levelling of uneven sites." 5. IN pursuance of the said letters of allotment, most of the allottees/auction-pur- chasers paid only the instalments of the auction price and did not pay the interest. Some of the allottees also committed default in paying the instalment of even the auction price. Some allottees however took possession and constructed the shops and commenced their business. Some allottees took possession and constructed merely sheds. Some allottees did not take possession at all contending that the Market Committee did not offer them possession. IN this background, the Market Committee sent Demand Notices to all the allottees on 9th July, 2007 calling upon them to pay the balance sale price and interest on the instalments at 15% per annum, as also the penal interest. At that stage, the allottees/auction-purchasers approached the Punjab and Haryana High Court by filing writ petitions for quashing the demand notices dated 9.7.2007 claiming interest and penal interest, and sought a direction to the appellants to accept only the actual sale price without any interest. They contended that the Market Committee had not provided the basic amenities and facilities in the market; that the Market Committee, in fact, did not offer possession of the plots because the infrastructural facilities and even basic amenities were not ready when the plots were auctioned; and that when the Market Committee was not in a position to offer the possession for lack of amenities and facilities, it could not obviously charge interest JUDGEMENT_1394_AIR(SC)_2011Image2.jpg on the plot value, let alone penal interest. They also contended that when the basic amenities and infrastructure were not available, they could not take possession or construct the buildings. IN its counter to the writ petition, the Market Committee admitted that the roads, drainage and certain other works relating to the market were not ready at the time of auction, and were completed only on 15.4.1999. It was also admitted that the work relating to water supply was started in February, 2001 and sewerage disposal work was started in January, 2002 and they were in progress till 2007. The High Court allowed the writ petitions by a common order dated 15.10.2008. It referred to some of its earlier decisions where directions were issued not to charge interest or penal interest until the water, sewerage disposal and other facilities were provided. It, therefore, disposed of the petitions with the following directions: (i) The writ petitioners were permitted to deposit the instalments within a period of one month. (ii) The Market Committee was directed not to charge any interest or penal interest on the original price of plots/booth. (iii) The Market Committee was directed to provide the remaining basic facilities in Nighdu Grain Market within a period of six months. ;