D.G.R.PATNAIK, J. - (1.) CHALLENGE in this Writ Application is to the demand made by the Respondent Housing Board vide letter dated 10th November, 2006 (Annexure -7), whereby the Petitioner has been called upon to pay a sum of Rs. 6,41,523/ - towards price of the house allotted to him. The Petitioner has also challenged the calculation chart. (Annexure -7/1), annexed to the demand letter, as being erroneous, arbitrary and illegal.
(2.) THE main question raised by the Petitioner in this Writ Application is, whether in the facts and circumstances of the case, the Respondent Housing Board can calculate and charge compound interest and capitalisation value on the balance amount, by adding such compound interest towards the price of the house allotted? Facts of the case, in brief, are as follows: The Petitioner applied to the Chairman of the Respondent Housing Board for allotment of a house on hire purchase basis under the MIG (A) Housing Scheme. He deposited a sum of Rs. 6,500/ - by way of advance at the time of submitting his application on 26th June, 1975. After completion of the requisite formalities and requirements, a residential house bearing House No. MIG (A) -42 situated at Adityapur, was allotted to him by the Housing Board vide its allotment letter dated 7th April, 1977. The terms of the allotment, as indicated in the allotment letter, declared a tentative price of the house at. Rs. 61,300/ - with a stipulation that the allottee would be liable to pay additional price on the basis of the final valuation of expenditure incurred on the construction of the house/or land acquisition and development. It was declared subsequently that the declared tentative price was the final assessed price and after adjusting the advance payment, the balance amount of Rs. 45,975/ - was to be paid by the Petitioner in 120 equal monthly installments. The amount of monthly installments was fixed together with interest at Rs. 557.81 per month if the installment is paid within the 7th day of every month and at Rs. 617.90 per month, if paid after the 7th day of the month. The absolute ownership of the house was to be transferred only after payment of full price together with interest, though the land was to remain on lease for a period of 90 years. Delivery of possession of the allotted house, was to be made on the terms of the Agreement after completion of all formalities followed by execution of the Agreement in the prescribed format and on payment of premium.
(3.) UPON receipt of the letter of allotment, the Petitioner forwarded his Draft Agreement on 13th May, 1977 on Non -Judicial Stamp Paper along with the initial deposit of Rs. 8,975/ - as per Clause - IV of the allotment letter, to the Housing Board. Upon receiving the Draft Agreement, the Executive Engineer of Jamshedpur was directed by the Estate Manager -cum -Secretary, Bihar State Housing Board, Patna to hand over the possession of the allotted house to the Petitioner even without formal execution of the proposed agreement. It was explained that the execution of the agreement may take time in view of the coming into force of the Urban Land (Ceiling and Regulation) Act, 1976. It was also declared in the letter of allotment that the recovery of the price of the house shall commence from the date of handing over of the actual physical possession of the house.;