Authorities Cannot Take Undue Advantage Of Their Default In Failure To Act In Accordance To Law Within Reasonable Time: Allahabad HC

The Court was disposing a Writ Petition filed by a 75 year old woman who was aggrieved by the action of Uttar Pradesh State Industrial Development Authority which not handed over the possession of land in time and also asked for heavy interest from her for the delayed period.

The bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar observed, “Hon’ble Supreme Court in catena of judgments starting right from M.K. Shah Engineers (supra), Mrutunjay Pani (supra), Kusheshwar Prasad Singh (supra), Nirmala Anand (supra) and Municipal Committee Katra (supra) has throughout held that the authorities cannot be allowed to take undue advantage of their own default in failure to act in accordance with law within a reasonable time.”

Advocate Pankaj Jaiswal appeared for the Petitioner and Senior Advocate H.N. Singh appeared for the Respondent.

Brief Facts-

The Petitioner, a 75-year-old woman, applied for a residential plot and was allotted one for Rs. 36 lakhs. She paid approximately 80% of the total amount though only 25% was required upfront. However, the promised possession of the plot was delayed. The Petitioner approached the Real Estate Regulatory Authority (RERA), which directed UPSIDA to hand over possession but did not address the issue of interest for the delay. The Petitioner then appealed to the Real Estate Appellate Tribunal, but due to the COVID-19 lockdown, the hearing was delayed.

The UPSIDA gave allottees the option to either withdraw from the project with 6% interest or continue under the original terms. Because of some issues between the State government and UPSIDA, the execution of the Conveyance Deed was delayed. Later, UPSIDA informed the Petitioner they were ready to execute the sale deed but demanded 12% interest on the remaining balance from the date of allotment. Aggrieved by the delay and the interest demand, the petitioner filed a writ petition under Article 226 of the Constitution.

The Court noted that in the advertisement, there was no disclosure that UPSIDA did not have a “Conveyance Deed” in its favour and that its title was still inchoate which resulted in a large number of persons applying under the scheme unaware of the defect in the title of UPSIDA. “A very relevant information was thus withheld from the public at large.”, the Court said.

The Court further noted that the UPSIDA kept accepting money without apprising the applicants of the defects in its title and also failed to deliver possession even after receipt of more than 25 % of the premium amount, which according to the Court is a complete breach of the obligation under the allotment letter.

The Court mentioned the recent decision of the Supreme Court in the matter of Municipal Committee Katra & Ors vs. Ashwani Kumar where according to the Court it was observed, “no one can be permitted to take undue and unfair advantage of his own wrong to gain favourable interpretation of law. It is a sound principle that he who prevents a thing from being done shall not avail himself of the non-performance he has occasioned. A wrong doer ought not to be permitted to make profit out of his own wrong.”

The Court observed, “A party cannot be permitted to “blow hot and cold”, “fast and loose” or “approbate and reprobate” at the same time. This rule is applied to do equity, however, it must not be applied in a manner as to violate the principles of right and good conscience.”

Accordingly, the Court said that UPSIDA cannot take unjust benefits from its delay and must rectify the interest rate accordingly.

Finally, the Court disposed of the Writ Petition.