CHITTA RANJAN HOTA Vs. STATE

JUDGEMENT

(1.) The petitioner has assailed the order (Annexure 5) passed by the Revenue Divisional Commissioner, Northern Division (opposite party No. 3) holding that he is liable to pay penal interest at the rate of 9% over and above the usual interest at the house building advance under the low income housing scheme.

(2.) The facts are not in dispute. The petitioner by executing an agreement dated 19-3-1962 with opposite party No. 2, secured a house building advance of Rs. 5000/- and subsequently took a further advance of Rs. 800/- agreeing to repay the same in instalments. He paid the first instalment of Rs. 408.30 on the due date, but defaulted payment of subsequent instalments. Therefore, opposite party No. 2 initiated Certificate Case No. 5 of 1973 before the Certificate Officer, Bolangir (Opposite party No. 51 for recovery of the principal loan. the usual interest at the rate of 5% and the penal interest at the rate of 9%. The Certificate Officer (opposite party No. 5) passed an ex parte order (Annexure 2) for payment of the dues. The petitioner preferred Revenue (Certificate) Appeal No. 37 of 1976 before the Additional District Magistrate, Bolangir (opposite party No. 4) and mainly challenged the order of the Certificate Officer on two grounds, namely, (i) he had paid a sum of Rs. 8174.65 including the first instalment; and (ii) he was not liable to pay the usual interest at the rate of 5%, if penal interest at the rate of 9% was charged. The Additional District Magistrate, Bolangir (Opposite party No. 4) in his order (Annexure 4) accepted his contentions and held that the amount already paid by the petitioner should be adjusted and a recalculation of the amount to be further realised from him should be done by excluding the usual interest at the rate of 5% and charging only the penal interest at the rate of 9%. Being aggrieved by the order of the Additional District Magistrate, Bolangir (Opposite party No. 4), the State Government preferred Certificate Revision No. 2 of 1977 before the Revenue Divisional Commissioner, Northern Division (opposite party No. 31 who on interpretation of the terms of the agreement disagreed with the view expressed by the Additional District Magistrate and held that although the amount paid by the petitioner should be adjusted, he is liable to pay penal interest at the rate of 9% over and above the usual interest at the rate of 5% from the date of default. Accordingly, he set aside the appellate order, allowed the revision and remanded the case to the Certificate Officer for recalculation of interest to determine the amount due from the petitioner. It is averred by the petitioner that in case of default of payment of instalments he was at best liable to pay the penal interest at the rate of 9% excluding the usual interest at the rate of 5%. The opposite parties, on the other hand, have averred that according to the terms of Clause (2) of the agreement, the petitioner is liable to pay interest at the rate of 5% on the loan amount and as he defaulted payment of instalments he is liable to pay penal interest at the rate of 9% over and above the usual rate of interest-

(3.) Mr. S.S. Das, learned counsel appearing for the petitioner, urged that in view of the arbitration Clause (17) of the agreement, the dispute relating to the rate of interest should have been referred to the sole arbitration of the Secretary to Government of Orissa in the Labour Department. Although there is an arbitration clause in the agreement, we do not find any scope for any dispute because of the specific Clauses (2) and (9) of the agreement with regard to stipulation of usual interest at the rate of 5% and the penal interest at the rate of 9%. This apart, no attempt was made by the petitioner himself to make a reference for arbitration. At this belated stage and particularly when there could not be any dispute, reference to the arbitration could not legally be made. The contention of Mr. Das is, therefore, untenable.