CHANDRA SHEKHAR LAL Vs. GHAZIABAD DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) 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 Indlrapuram Scheme at Ghazlabad 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 respondent has stated that in view of para 10.40 of the scheme, no interest is payable. However, learned counsel for the petitioner has rightly contended that para 10.40 will apply only if the petitioner surrenders the property under para 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 possession 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 para 10.40 of the scheme that no interest will be payable has no application.

(3.) Moreover, in our opinion, clause 10.40 of the scheme which provides that no Interest shall be payable is unconscionable and hence vtolative 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 respondent kept the money of the petitioner with it, 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 respondent should be refunded not only the principal amount but the Interest thereon also. It has been held by the Supreme Court in Central Inland Water Transport Corporation Ltd. v. B. N. Gangiily. 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 vlolatlve of Article 14 of die Constitution.