Harpal Singh vs Haryana Development Authority, Faridabad

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RSA-4152 -2009 (O&M)

IN THE PUNJAB AND HARYANA HIGH COURT AT
CHANDIGARH.
RSA-4152-2009 (O&M)
Reserved on: 31.10.2026
Date of Decision: 05.11.2026
Uploaded on: 05.11.2026


Whether only operative part of the
judgment is pronounced or the full
judgment is pronounced.


Operative part/full judgment

HARPAL SINGH
… Appellant/Plaintiff
Versus

HARYANA URBAN DEVELOPMENT AUTHORITY, FARIDABAD.
... Respondent/Defendant
CORAM: HON'BLE MR. JUSTICE HARMEET SINGH DEOL
Present: Mr. Vijay Kumar Jindal, Senior Advocate with
Mr. Bahul Bunger, Advocate and
Mr. Abhishek Shukla, Advocate.
for the appellant.
Mr. Prateek Rathee, Advocate and
Mr. Parveen Mehta, Addl. A.G., Haryana,
for the respondent-HSVP.

HARMEET SINGH DEOL, J
1. The present Regular Second Appeal has been preferred by the
appellant/plaintiff against the judgment and decree dated 09.04.2009 passed
by the learned District Judge, Faridabad, in Civil Appeal No.08 dated
16.01.2009, whereby the judgment and decree dated 17.12.2008 passed by
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the learned Civil Judge (Sr. Divn.), Faridabad, decreeing the suit of the
appellant/plaintiff, was set aside.
2. Briefly stated, the appellant/plaintiff filed a suit seeking a
declaration to the effect that he is the owner in possession of the shop
bearing No.68, Sector 7, Faridabad (hereinafter referred to as ‘the shop in
dispute’). He further prayed for setting aside the resumption order passed by
the respondent/defendant, alleging the same to be null and void, along with
a decree for permanent injunction. The shop in dispute was purchased by
the father of the appellant/plaintiff namely Pritam Singh, in a public
auction in the year 1980 and, accordingly, letter of allotment dated
28.07.1980 was issued by the respondent/defendant-Haryana Urban
Development Authority (hereinafter referred as HUDA). After the death of
his father, the appellant/plaintiff became the owner of the shop in dispute.
The total sale price of the shop was Rs.85,000/-, out of which 10%, i.e.
Rs.8,500/-, was deposited at the time of auction. A further sum of
Rs.12,750/- was deposited with the respondent/defendant within 30 days,
which made up Rs.21,250/-, i.e. 25% of the total bid amount. The balance
amount of Rs.63,750/- was to be paid either in lump sum within a period of
60 days from the date of issuance of the allotment letter, or in 8/10 half-
yearly instalments along with interest @10% per annum. As per the terms
and conditions of the allotment letter, interest was to accrue from the date of
offer of possession. It was pleaded that there was no development in the
market regarding roads etc. and possession of the shop was delivered only
on 12.12.1991, after removal of the sewerage line.
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3. The respondent/defendant raised a demand of Rs.3,93,464/- on
26.11.1993 towards the balance price, which was challenged by the
appellant/plaintiff by way of an appeal before the Administrator, HUDA.
The said appeal was allowed by the Administrator, HUDA vide order dated
29.03.1994, waiving off the interest and penalty subject to payment of the
due amount within 30 days from the issuance of the order. The order was
dispatched on 05.04.1994 and, thus, the payment was to be made by
04.05.1994. However, before the expiry of the time granted, the Estate
Officer raised a fresh demand of Rs.3,25,325/- on 29.04.1994, which was
challenged by the appellant/plaintiff before the Consumer Court, but the
complaint was dismissed by the Consumer Court. The appellant/plaintiff
further pleaded that he had always been ready and willing to pay the
balance price as agreed in the allotment letter, but the respondent/defendant
raised illegal demands for the balance amount along with compound interest
at the rate of 18% per annum. It was averred that the respondent/defendant
proceeded to resume the suit property on 12.02.2001 illegally and issued
notice under Section 18(1) of the HUDA Act, 1977 (Ex.P2), which
compelled the appellant/plaintiff to file the present civil suit.
4. The respondent/defendant filed its written statement
controverting the case of the appellant/plaintiff. It was admitted that the
shop in dispute was allotted in the name of the father of the
appellant/plaintiff in the year 1980 and that possession of the said shop was
delivered on 12.12.1991. The claim of the appellant/plaintiff that there was
no development in the market regarding roads etc. was denied. It was stated
that, as mentioned in the letter of allotment, interest @18% per annum was
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to be levied and the same was being charged as per HUDA policy up to
31.08.2000. It was further stated that since the appellant/plaintiff failed to
deposit the amount due despite issuance of various notices under Section 17
of the HUDA Act, the order of resumption dated 12.02.2001 was passed. A
preliminary objection was also taken that the suit was barred under Section
50(2) of the HUDA Act, 1977.
5. On the pleadings of the parties, the following issues were
framed by the learned Trial Court vide order dated 22.09.2001:-

1. Whether the plaintiff is lawful owner in possession of shop in
question? OPP.

2. Whether the resumption order and subsequent demand of penalty
and compound penalty interest raised by the defendant are illegal,
arbitrary, null and void? OPP

3. Whether the plaintiff is entitled to a decree for permanent
injunction as prayed for? OPP

4. Whether the plaintiff has no cause of action to file the
present suit? OPD

5. Whether the suit of the plaintiff is not maintainable in the
present form? OPD

6. Whether the plaintiff has concealed the material facts
from the court? OPD

7. Relief.
6. The appellant/plaintiff stepped into the witness box as PW-1
and examined Udai Pal Singh, Clerk, HUDA as PW-2 and Sh. S.K. Sharma,
S.O., HUDA as PW-3, whereas the respondent/defendant examined Daya
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Nand, Clerk as DW-1. No evidence was led by the appellant/plaintiff in
rebuttal.
7. The learned Trial Court, vide judgment and decree dated
17.12.2008, decreed the suit filed by the appellant/plaintiff. Issue No.1 was
partly decided, holding the appellant/plaintiff to be in possession but not the
owner of the suit property. Issues No.2 and 3 were decided in favour of the
appellant/plaintiff. Issues No.4 to 6 were also decided in favour of the
appellant/plaintiff, as the onus to prove these issues was on the
respondent/defendant but the same were not pressed during the course of
arguments.
8. Aggrieved by the aforesaid judgment and decree, the
respondent/defendant-HUDA filed an appeal, which was allowed by the
learned First Appellate Court vide judgment and decree dated 09.04.2009
and the judgment and decree passed by the learned Trial Court were set
aside. Hence, the present Regular Second Appeal by the appellant/plaintiff.
9. Learned senior counsel for the appellant/plaintiff has
vehemently argued that the learned First Appellate Court has wrongly
reversed the well-reasoned judgment of the learned Trial Court. He submits
that under Clauses 5 and 6 of the allotment letter Ex.P1, possession was to
be offered only on completion of the development works and interest was to
accrue only from the date of offer of possession. Possession was never
offered before 1991 and was delivered only on 12.12.1991, which stands
admitted by the respondent/defendant-HUDA and was not denied by PW-3
S.K. Sharma, S.O., HUDA. He further argues that since the delay in
delivering possession was attributable to the respondent/defendant-HUDA,
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interest could run only from the date of possession and the levy of
compound interest @18% per annum is illegal.
10. Learned senior counsel further submits that the demand of
Rs.3,25,325/- raised on 29.04.1994, before expiry of the time granted by the
Administrator, HUDA vide order dated 29.03.1994, was illegal. The
appellant/plaintiff was always ready and willing to pay and had, in fact,
deposited Rs.50,000/- on 17.07.1995 and Rs.1,79,632/- on 24.04.2002,
which exceeds the amount due. Yet, the suit property was resumed under
Section 17 of the HUDA Act. It is further argued that the appellant/plaintiff
is still in possession and the inter se rights among the brothers are not a
matter of concern for the respondent/defendant-HUDA. Reliance is placed
upon the judgment passed by the Hon’ble Supreme Court in Haryana
Urban Development Authority v. Manoj Kumar and another, (2005) 9
SCC 541 and by this Court M/s R.S. Builders (India) Pvt. Ltd. v. State of
Haryana, 1997(2) RCR (Civil) 504 . Accordingly, he prays that the
judgment and decree passed by the learned First Appellate Court be set
aside and that of the learned Trial Court be restored.
11. Per contra, learned counsel for the respondent/defendant-
HUDA submits that the learned First Appellate Court has rightly
appreciated the evidence available on record and has recorded findings in
accordance with law. He submits that the appellant/plaintiff failed to
discharge his contractual and statutory obligation of depositing the
installments of the sale consideration within the stipulated period, despite
issuance of repeated notices by the respondent/defendant-HUDA. He
further submits that the demand of interest and penalty was raised strictly in
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accordance with the terms and conditions of the allotment letter and the
applicable HUDA policy, and that the appellant/plaintiff cannot derive any
benefit from the alleged non-development of the area, particularly when the
liability to pay the outstanding instalments arose in terms of the allotment
letter. He further submits that the resumption proceedings were initiated
only after following the prescribed procedure and affording sufficient
opportunities to the appellant/plaintiff.
12. It is further argued on behalf of the respondent/defendant-
HUDA that Mark E relates to SCF No.64 and not to SCF No.68, i.e. the
shop in dispute. The suit was only partly decreed and Issue No.1 was, in
fact, decided against the appellant/plaintiff by the learned Trial Court. An
injunction cannot be granted to a person who has not proved his title.
Reliance is placed upon the judgment passed by the Hon’ble Supreme Court
in Padhiyar Prahladji Chenaji (Deceased) through LRs v. Maniben
Jagmalbhai (Deceased) through LRs and others, 2022 (12) SCC 128 .
Learned counsel also points out that the plea of bar of jurisdiction under
Section 50(2) of the HUDA Act, 1977 was taken in the written statement. It
is further argued that the allotment was in favour of Pritam Singh, father of
the appellant/plaintiff, who has other brothers, sisters and a mother. No
intimation of the death of the allottee was given and only one of the legal
heirs has challenged the resumption. Thus, no illegality or perversity can be
attributed to the judgment and decree passed by the learned First Appellate
Court. Accordingly, he prays for dismissal of the present appeal.
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13. I have heard learned counsel for the parties and have gone
through the paper book as well as the judgments passed by both the Courts
below.
14. The controversy involved in the present appeal primarily
relates to the legality of the demand raised by the respondent/defendant-
HUDA towards the outstanding sale consideration, interest and penalty, and
the validity of the resumption order dated 12.02.2001.
15. At the outset, it may be noticed that the framing of a substantial
question of law is not mandatory in a second appeal governed by Section 41
of the Punjab Courts Act, 1918,as held by a Constitution Bench of the
Hon’ble Supreme Court in Pankajakshi (Dead) through LRs and others v.
Chandrika and others , 2016 (6) SCC 157 .
16. As regards the objection to the jurisdiction of the Civil Court,
the respondent/defendant-HUDA pleaded in its written statement that the
suit was barred under Section 50(2) of the HUDA Act, 1977. Issue No.5
regarding maintainability of the suit, which, along with Issues No.4 and 6,
was not pressed by the respondent/defendant-HUDA before the learned
Trial Court. The learned First Appellate Court also did not record any
finding on it. Even otherwise, a Full Bench of this Court in The Estate
Officer and another v. Parveen Kumar, 2009(4) PLR 619 held that,
notwithstanding the bar under Section 50 of the HUDA Act, 1977, the Civil
Court can exercise jurisdiction where the order is a nullity, “such as, gross
illegality, irrationality, violation of constitutional mandate, mala fides, non-
compliance with rules of natural justice and perversity”. In that case, the
suit was dismissed as there was no averment that the plaintiff had been
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denied notice, and the challenge was confined to the rate of interest. In the
present case, the resumption is founded upon a demand raised in disregard
of the order of the Administrator, HUDA and contrary to Clause 5 of the
allotment letter, and the appellant/plaintiff has disputed the service of
notices preceding it, as discussed hereinafter. The Civil Court was,
therefore, competent to examine the validity of the resumption order.
17. It is an admitted position that the shop in question was allotted
to the father of the appellant/plaintiff in a public auction in the year 1980
for a total consideration of Rs.85,000/- and that 25% of the bid amount was
deposited in accordance with the terms of the allotment. The remaining
amount was payable in lump sum within 60 days, or in 8/10 half-yearly
instalments with interest @10% per annum, in terms of Clause 5 of the
allotment letter Ex.P1.
18. The primary grievance of the appellant/plaintiff is that
possession of the shop in question was not delivered within the stipulated
period and was, in fact, delivered only on 12.12.1991, after removal of the
sewerage line. Clause 5 of the allotment letter Ex.P1 provides that interest
shall accrue from the date of offer of possession, and Clause 6 provides that
possession will be offered on completion of the development works in the
area. Clause 23 only permits the allottee to take possession after payment of
25% of the price. It was the respondent/defendant’s own case that no letter
offering possession was issued. In the written statement, the respondent
admitted para 4 of the plaint, which states that possession was delivered on
12.12.1991 after removal of the sewerage line, in so far as delivery of
possession is concerned. Even PW-2, the HUDA clerk, stated that
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possession was given on 27.06.1990. On either date, admittedly, possession
was delivered about ten years after the allotment. The learned First
Appellate Court relied upon Clause 23 without considering Clause 5.
19. The question as to when interest can be charged under a clause
in identical terms is no longer res integra. In HUDA v. Manoj Kumar
(supra), the allotment letter contained Clause 5 in the very words used in
Ex.P1, namely, that the balance price could be paid in lump sum without
interest within 60 days or in ten half-yearly installments with interest
@10%, and that “the interest shall, however, accrue from the date of offer
of possession”. The Hon’ble Supreme Court held that HUDA was bound to
deliver possession within a reasonable time. Where possession could not be
offered because development work had not taken place, the authority could
not expect the allottee to keep paying instalments, and in such cases it could
not charge interest on delayed payments until it offered possession. Clause
5 so providing, it was held that “interest could only have been charged from
date of offer of possession”.
20. This Court in the case of M/S. R.S. Builders (supra), dealing
with a commercial site at Faridabad allotted by HUDA under an allotment
letter containing similar Clauses 5 and 6, noticed Regulation 13 of the
HUDA (Disposal of Plots) Regulations, which provides that possession of
the land shall be delivered to the transferee as soon as the development
works in the area where the land is situated are completed. It was held that
Clauses 5 and 6 apply in different situations and have to be reconciled.
Clause 5, with regard to offer of possession, applies to an allottee making
payment by instalments where, on the date of allotment, the authority has
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not developed the area where the site is located. Where the allottee is not
given possession, the authority is not entitled to charge interest either in
law, on the terms of allotment or in equity. It is not possible for an allottee
to take possession himself, as possession has to be given by the authority by
demarcating the plot. It may, however, be noticed that in that case the main
plea based on Clause 5 failed on facts, as development had been shown by
an affidavit of the Superintending Engineer, and the petitioner succeeded on
his alternative plea.
21. Applying the above principles, the case of the
appellant/plaintiff stands on a stronger footing. Here, the
respondent/defendant itself admitted in the written statement that possession
was delivered on 12.12.1991, about ten years after the allotment. No letter
offering possession was ever issued and no material, such as an affidavit of
an engineering officer as in the case of M/S. R.S. Builders (supra), was led
by the respondent to show when the development works were completed.
Possession being in the respondent’s own hands, Clause 23 could not shift
the burden of interest to the allottee for the period during which the
respondent did not, and on its own showing could not, deliver possession.
Interest under Clause 5 could, therefore, run only from the date of
offer/delivery of possession and not from the date of allotment. In such
circumstances, the respondent/defendant-HUDA could not have raised
demands towards interest and penalty without first determining the actual
liability of the allottee in accordance with the terms and conditions of the
allotment letter.
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22. Another important aspect which requires consideration is the
levy of compound interest at the rate of 18% per annum. Clause 5 of Ex.P1
stipulates interest @10% per annum. The plea in the written statement that
interest @18% per annum was to be levied as mentioned in the letter of
allotment is, thus, contrary to Ex.P1. The Hon’ble Supreme Court in
Roochira Ceramics v. Haryana Urban Development Authority, 2002 (9)
SCC 599 , relied upon by the learned Trial Court, held that HUDA could
charge interest @10% and not 18% on delayed instalments. The
respondent/defendant-HUDA was required to demonstrate the correctness
of the amount demanded and the basis on which compound interest was
calculated, and could not have mechanically raised demands. The
resumption order dated 12.02.2001, however, proceeds on arrears of
Rs.10,18,707/-. No calculation has been placed on record to show how this
figure was arrived at. To the extent it has been computed at 18% compound
interest and from a date prior to delivery of possession, it is, as already held,
contrary to Clause 5 of Ex.P1 (Allotment Letter) and cannot be sustained.
23. The demand of Rs.3,93,464/- raised on 26.11.1993 towards the
alleged outstanding sale consideration was challenged by the
appellant/plaintiff before the Administrator, HUDA, who, vide order dated
29.03.1994, accepted the appeal and waived off the interest and penalty,
subject to deposit of the due amount within 30 days from the issuance of the
order. The said order was dispatched on 05.04.1994 and, accordingly, the
appellant/plaintiff was required to deposit the amount by 04.05.1994.
However, even before the expiry of the aforesaid period, the Estate Officer,
HUDA raised another demand of Rs.3,25,325/- on 29.04.1994. The
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respondent/defendant-HUDA has not been able to satisfactorily explain the
circumstances in which such a demand was raised without giving effect to
the order dated 29.03.1994 passed by the Administrator, HUDA. Having
itself raised a fresh demand before the time granted had run out, the
respondent/defendant cannot hold against the appellant/plaintiff his failure
to deposit the amount within that period, nor can it treat the waiver off
interest and penalty as having lapsed. Notably, the appellant/plaintiff
deposited Rs.50,000/- on 17.07.1995 to show his bonafide.
24. It is pertinent to notice that the appellant/plaintiff has
consistently maintained that he was always ready and willing to pay the
balance sale consideration in accordance with the terms and conditions of
the allotment letter. However, instead of reconciling the account and
determining the actual amount payable by the appellant/plaintiff, the
respondent/defendant-HUDA continued to raise demands incorporating
interest and penalty. The respondent/defendant-HUDA, being a statutory
body, was expected to act fairly, reasonably and in accordance with the
terms and conditions governing the allotment. It could not have ignored the
order passed by the Administrator, HUDA, particularly when the said order
had attained finality and had not been shown to have been set aside by any
competent authority.
25. PW-2 Udai Pal Singh, Clerk, HUDA admitted the deposits
made by the appellant/plaintiff. The finding of the learned First Appellate
Court that “not a penny” was paid after the initial deposit is, thus, contrary
to the evidence. The payments made are as under:-
Sr. Date Amount (Rs.)
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1. At the time of auction, in 8,500/- (10%)
1980
2. Within 30 days of allotment, 12,750/- (15%) (making 25% =
1980 Rs.21,250/-)
3. 17.07.1995 50,000/-
4. 24.04.2002 1,79,632/-
Total 2,50,882/-

The learned Trial Court found that interest on Rs.63,750/- from
12.12.1991 to 24.04.2002 comes to about Rs.70,000/- only. The deposit of
Rs.1,79,632/- made on 24.04.2002 has been received and retained by the
respondent/defendant. On a query by the Court, learned counsel for the
respondent/defendant could not point out any document showing that the
amounts were accepted under protest. Thus, against the total price of
Rs.85,000/- and interest of about Rs.70,000/-, i.e. about Rs.1,55,000/-, the
appellant/plaintiff has deposited Rs.2,50,882/-.
26. Resumption of an allotted property is an extreme measure and
cannot be resorted to mechanically. Before taking such a drastic step, the
authority is required to strictly comply with the statutory procedure and
afford an effective opportunity of hearing to the allottee. In the present case,
the appellant/plaintiff has specifically disputed the service of notices before
passing of the resumption order. The respondent/defendant-HUDA was,
therefore, required to establish due compliance with the statutory
requirements. The mere assertion that notice under Section 17 of the HUDA
Act had been issued would not, by itself, establish that the mandatory
procedure was duly followed.
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27. In M/S. Teri Oat Estates (P) Ltd. v. U.T., Chandigarh and
others, 2004 (2) SCC 130 , the Hon’ble Supreme Court held that
resumption is to be resorted to only as a last resort. As per the list of notices
given by PW-2, after the notice dated 27.01.1995, the next notice was
issued only on 21.11.2000 and the site was resumed on 12.02.2001. Thus,
for almost six years no notice was issued, and the resumption followed
within less than three months of a single notice. Resumption was, therefore,
not resorted to as a last resort. The judgment in Ravi Kant Ahuja v.
HUDA (CWP No.14022 of 2001) , relied upon by the learned First
Appellate Court, concerned allottees who had paid nothing after the initial
deposit and is, thus, distinguishable. As held by the Hon’ble Supreme Court
in HUDA v. Manoj Kumar (supra), the respondent, having raised demands
against the allottee in excess of what was due under Clause 5, cannot
sustain a resumption founded upon such demands.
28. It is true that the appellant/plaintiff has not become owner of
the shop, no conveyance deed has been executed and Ex.PX and Ex.PY
relate to shop-cum-flat No.68. The learned Trial Court, however, granted no
declaration of ownership. It only set aside the resumption order and
restrained dispossession on the basis of that order. The judgment of Hon’ble
Supreme Court in Padhiyar Prahladji Chenaji (supra) is distinguishable,
as in that case the plaintiff sought injunction against the true owner,
whereas here the possession of the appellant/plaintiff was delivered by the
respondent itself under the allotment, and the injunction is only
consequential to the setting aside of the resumption order.
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29. The plea regarding the other legal heirs of the original allottee
also does not defeat the suit. The resumption order is founded only on non-
payment of arrears and not on non-intimation of death or any unauthorized
transfer. Moreover, the respondent never called upon the legal heirs to give
written intimation of the death of the original allottee or to have their names
substituted as allottees. The appellant/plaintiff is admittedly the son of the
original allottee and is in possession. A co-owner is as much an owner of
the entire property as a sole owner and can maintain an action to protect the
common property without joining the other co-owners, where they do not
object. Reference in this regard may be made to the judgment passed by the
Hon’ble Supreme Court in Sri Ram Pasricha v. Jagannath, 1976 (4) SCC
184 and M/S. India Umbrella Manufacturing Co. and others v.
Bhagabandei Agarwalla (dead) by LRs Smt. Savitri Agarwalla, 2004 (3)
SCC 178 . No other legal heir has objected, and the setting aside of the
resumption order is to the benefit of all the legal heirs. Their inter se rights
are a matter between them and do not concern the respondent/defendant.
30. The learned First Appellate Court, while reversing the well-
reasoned judgment and decree passed by the learned Trial Court, failed to
properly appreciate the effect of the order dated 29.03.1994 passed by the
Administrator, HUDA, as well as the subsequent demand raised by the
Estate Officer before expiry of the period granted under the said order.
These circumstances were material for determining the legality of the
outstanding demand and the consequential resumption proceedings. The
learned First Appellate Court also failed to examine whether the demand
raised by the respondent/defendant-HUDA was in conformity with the
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terms and conditions of the allotment letter and whether the statutory
procedure preceding resumption had been duly complied with. The findings
recorded by the learned First Appellate Court, therefore, cannot be
sustained.
31. In view of the aforesaid discussion, this Court finds that the
learned First Appellate Court was not justified in reversing the judgment
and decree passed by the learned Trial Court.
32. Consequently, the present Regular Second Appeal is allowed .
The judgment and decree dated 09.04.2009 passed by the learned District
Judge, Faridabad are set aside and the judgment and decree dated
17.12.2008 passed by the learned Civil Judge (Sr. Divn.), Faridabad are
restored.
33. Pending application(s), if any, shall also stand disposed of.


05.11.2026 (HARMEET SINGH DEOL)
monika
JUDGE

Whether speaking/reasoned: Yes
Whether reportable: Yes

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