RAJAMOHANAN. J Vs. SECRETARY

JUDGEMENT

(1.) THE petitioner took on lease three shop rooms in a shopping complex constructed by the Anchal Grama Panchayat. He committed default in payment of monthly rent payable in respect of the shop rooms. The petitioner was directed to pay the arrears of rent with penal interest of 18%. That is under challenge in this writ petition. The contention of the petitioner is that the direction to pay 18% penal interest is without authority of law.

(2.) THE contention of the Panchayat is that he took on lease the shop rooms after executing Ext.P(1) agreement in which he had agreed to pay 18 % penal interest in case of default in payment of monthly rent on due dates. After having signed Ext.P(1) agreement with open eyes, the petitioner cannot now turn around and claim that he is not liable to pay the penal interest, is the contention raised.

(3.) THE validity of levy of penal interest by local bodies have been considered by me in the decision in M- Far Hotels Ltd. vs State of Kerala 2012 (1) KLT 66 in the context of building tax payable under the Panchayat Raj ( Building Tax and Surcharge thereon) Rules, 1996. In that I had generally considered the validity of recovery of penal interest. In the same I held as follows.