- (1.) M. Katju, J. The petitioner is a retired District Judge who retired on 31-1-1995. While he was in service he applied for allotment of a house under the In-dirapuram Scheme at Ghaziabad and he paid all the instalments but the property was not allotted to him. Most of the amount which the petitioner deposited has been refunded to him but he has claimed interest on the deposits.
(2.) LEARNED Counsel for the respon dent has stated that in view of paragraph 10. 40 of the Scheme no interest is payable. However, learned Counsel for the petitioner has rightly contended that para graph 10. 40 will apply only if the petitioner surrenders the property under paragraph 10. 30 of the scheme. He has alleged that the petitioner never surrendered the property rather he wrote a letter to the respondent asking them to give him pos session of the house or else refund the money. In our opinion, this does not amount to surrender as the petitioner had not given up his claim. Hence in our opinion the provision in paragraph 10. 40 of the scheme that no interest will be pay able has no application. Moreover, in our opinion, clause 10. 40 of the scheme which provides that no interest shall be payable is unconscionable and hence violative of Article 14 of the Constitution. It may be mentioned that interest is the normal accretion to capital, and it is not a penalty. Since the respon dent kept the money of the petitioner with it is obvious that the respondent earned interest on the same. If the amount had remained with the petitioner the petitioner would have earned the interest on the same. Hence the petitioner should be refunded not only the principal amount but the interest thereon also. It has been held by the Supreme Court in Central In land Water Transport Corporation Ltd. v. B. N. Ganguly, AIR 1986 SC 1571 that an unconscionable term in a contract is violative of Article 14 of the Constitution. In our opinion, the term in the scheme which states that no interest on the deposits is payable is arbitrary and violative of Article 14 of the Constitution. For the reasons given above, this petition is allowed. The respondents are directed to refund any balance amount payable to the petitioner as well as to pay interest at the rate of 12% on any amount deposited by the petitioner from the date of deposit till the date of refund which shall be made within a period of two months of production of a certified copy of this order before the Secretary, Ghaziabad Develop ment Authority, Ghaziabad. Petition allowed. .;