`Discretionary powers to officers do not absolve Board of duty'

Our Legal Correspondent

Chennai, April 20

The Madras High Court has held that the Tamil Nadu Housing Board being a statutory body was required to act non-arbitrarily.

Conferment of discretion on its officers did not relieve the Board of duty to act fairly and in a non-arbitrary way since power exercised by officers flew from contract between Board and its customers.

The Court was hearing a writ appeal from an allottee of a house in Perumalpuram, Tirunelveli, challenging the board's demand to pay interest and penal interest over and above amounts he had to pay as per original agreement between him and the board.

A Division Bench held in order dated October 21, 2003 that statutory bodies, such as Housing Board, should act in a non-arbitrary manner and legally in fixing price for the plots and houses.

Extraordinary delay

Citing the case of the appellant, Mr K.V. Krishnan, the Bench observed that the allotment of the house in Tirunelveli was made on July 12, 1988. The amount of Rs 12,133, which the respondent (TNHB) sought to recover now, was an amount that even, according to the Board, should have been included in the cost as on that date, but had omitted to do so.

The amount, which it said should have been included, was the amount determined by it as interest on the sum of Rs 80,000 (which was the tentative cost of the house fixed on June 30, 1987) till July 12, 1988 (allotment date) plus penal interest on the same sum for the same period at 12 per cent. As to how penal interest could be levied for this period had not been explained, the Bench pointed out.

The Bench wondered that the Board chose to intimate the allottee about this additional amount only 13 years later, in 2001.

"There is no explanation forthcoming for this extraordinary long delay."

The Bench had directed the Board to execute the sale deed in favour of the appellant after collecting from him the sum of Rs 11,200 being interest at 14 per cent on Rs 80,000 from June 30, 1987 to July12, 1988 together with interest thereon at 8 per cent from June 1, 2001 till date of payment.

Disposing of a review petition from the respondent (TNHB), a Division Bench, comprising Mr Justice P. Sathasivam and Mr Justice J.A.K. Sampathkumar, held that the direction issued in the order dated October 21, 2003 of the Division Bench was to be confined to the parties to the said proceedings.

For other cases, interest had to be worked out/calculated as per terms and conditions agreed to between allottees and the Board.

In view of the fact that the appellant (Mr K.V. Krishnan) had paid interest as per the direction and the Board had also executed sale deed several years ago, the Bench said they were not inclined to disturb or alter the direction mentioned at this juncture. The said direction was confined to the said particular allottee.

(This article was published in the Business Line print edition dated April 21, 2006)
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