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Supreme Court of India

HUDA AND ANR.versusBABESWAR KANHAR AND ANR.

Citation
2004 INSC 666
Decided
22 November 2004
Disposal
Disposed off

Holding

A communication delayed by a postal holiday or office closure is deemed to have been made within the prescribed period, so forfeiture of earnest money is not permissible and the deposit must be refunded with interest.

Summary

The Haryana Urban Development Authority (HUDA) allotted a residential plot to an applicant who deposited earnest money. Clause‑4 of the allotment letter required the applicant to communicate non‑acceptance within 30 days or forfeit the deposit. The applicant mailed a registered notice of non‑acceptance on 28‑Nov‑2001, but due to a postal holiday on 30‑Nov and HUDA’s office closure on 1‑2‑Dec, the notice was received on 3‑Dec‑2001. The dispute before the consumer forums and the Supreme Court was whether the delay, caused by circumstances beyond the applicant’s control, invalidated the forfeiture clause. The Court held that under Section 10 of the General Clauses Act, 1897, an act delayed by holidays is deemed done on the next working day, so the notice was timely and the forfeiture was unlawful. Consequently, the earnest money was ordered to be refunded with interest at 9% from the date of receipt. The appeal was dismissed, affirming the lower forums’ orders.

Issues considered

  • Whether the 30‑day period for communicating non‑acceptance under Clause‑4 is extended when the communication is delayed due to a postal holiday and the authority’s office closure.
  • Whether the earnest money can be forfeited despite the delay in receipt of the non‑acceptance notice.
  • What rate of interest is appropriate on the refund of the earnest money.

Legislation cited

Subjects

consumer protectionearnest moneyforfeitureGeneral Clauses Actpostal holidayinterest ratelegal maxims

Judgment

A                              HUDA AND ANR.
                                        v.
                      BABESWAR KANHAR AND ANR.

                             NOVEMBER 22, 2004

B                [ARIJIT PASAYAT AND S.H. KAPADIA, JJ.]

          Urban Development-Haryana Urban Development Authority-
    Allotment of residential plot stipulating that if non-acceptance not given
    within 30 days earnest money to be forfeited-Allottee sending by registered
C   post his non-acceptance but due to postal holiday and closure of HUDA
    office receipt of letter delayed-Held, besides s. JO of the General Clauses
    Act, there is general principle that a party prevented from doing an act
    by some circumstances beyond his control, can do so at first subsequent
    opportunity-Allotee entitled to refund of earnest money with 9% interest-
    General Clauses Act, 1897-S. JO-Consumer Protection Act, 1986-S. 12.
D
         Limitation-Period prescribed for performance of an act in a court
    or officer expiring on a holidays-Held, the act should be considered to
    have been done within {hat period if it is done on the next day on which
    the court or office is open-General Clauses Act, 1897-S. 10.
E        Legal Maxims :

         (1) Lex non cogit ad impossiblia; and

         (2) Actus curiae nemi nem gravabit-Applicability of
F       Sambasiva Chari v. Ramaswami Reddi, (1998) 8 Mad. Law Journal
    265 and Hossein Ally v. Donze/le, ILR 5 Calc.itta 906, referred to.

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7522 of
    2004.
G
         From the Judgment and Order dated 4.2.2004 of the National Consumers
    Disputes Reddressal Commission, New Delhi in R.P. No. 3378 of 2003.

         Satinder S. Gulati and Dr. Kailash Chand for the Appellants.

H        Respondent No. I-in-person.
                                       282
                                                                                  •
             HUDA AND ANR. v. BABES WAR KANHAR                             283

     H.K. Puri, Manish Kumar Saran and V.K. Verma for the Respondent               A
No. 2.

     The Order of the Court was delivered by

     ARIJIT PASAYAT, J.: Leave granted.
                                                                                   B
       The controversy in this appeal lies within a very narrow compass. The
respondent No. 1 applied for allotment of a plot in response to an
advertisement issued by the Haryana Urban Development Authority (in
short 'HUDA'). The application was for allotment of a residential plot
measuring 250 ~quare yards, and deposit of Rs. 46,625 was made on                  c
26.12.2000. The HUDA intimated respondent No. I by letter dated 30.10.2001
that plot No. 2205 in Sector 65, Faridabad has been alloted to him. The
respondent No. l purportedly, on the basis of Ch· · ,-4 of the letter, sent
a registered letter on 28.11.2001, intimating HUDA that he is not interested
in accepting the allotment. The letter was received on 03.12.2001 by HUDA.         D
Referring to Clause-4 of the letter, HUDA directed forfeiture of the earnest
money deposited. A complaint under Section 12 of the Consumer Protection
Act, 1986 (in short 'the Act') was lodged by respondent No. I before the
District Consumer Disputes Redressal Forum, Faridabad (in short the 'District
Forum'). By order dated 31.03.2003, the District Forum directed refund of
the amount deposited along with 12% interest with effect from the date of          E
deposit till realisation. The matter was carried in appeal before the State
Consumer Disputes Redressal Commission, Haryana, Chandigarh (in short
the 'State Commission') by HUDA. By order dated 09.06.2003, the State
Forum reduced the interest to I 0% but otherwise affirmed the order of the
District Forum. The matter was carried in revision before the National
                                                                                   F
Consumer Disputes Redressal Commission (in short the 'National
Commission'f By the impugned order dated 04.02.2004, the revision has
been dismissed.

      Learned counsel br the appellant-HUDA submits that there was clear
stipulation about forfeiture in case the intimation regarding non-acceptance       G
is not given within 30 days. Therefore, according to him, the forfeiture was
in order and the direction for refund within interest is not sustainable in law.

     The respondent No. 1, who appears in person, submitted that the non-
acceptance was conveyed by letter dated 28.11.2001. The HUDA office was
                                                                                   H
    284                   SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.

A   closed on 01.12.200 I and 02.12.200 I. 30.11.200 I was a postal holiday and,
    therefore, on the next day after the closure period, i.e. 03.12.2001, the letter
    was served on HUDA and therefore the orders of the Forums below do not
    suffer from any infirmity.

          What is stipulated in Clause-4 of the letter dated 30. l 0.2001 is a
B   communication regarding refusal to accept the allotment. This was done on
    28.11.200 I. Respondent No. 1 cannot be put to loss for the closure of the
    office of HUDA on 01.12.2001 and 02.12.2001 and the postal holiday on
    30.11.200 I. In fact he had no control over these matters. Even the logic of
    Section l 0 of the General Clauses Act, 1897 can be pressed into service.
C   Apart from the said Section and various provisions in various other Acts,
    there is the general principle that a party prevented from doing an act by
    some circumstances beyond his control, can do so at the first subsequent
    opportunity (see Sambasiva Chari v. Ramaswami Reddi, (1898) 8 Madras
    Law Journal 265). The underlying object of the principle is to enable a
D   person to do what he could have done on a holiday, on the next working
    day. Where, therefore, a period is prescribed for the performance of an act
    in a court or office, and that period expires on a holiday, then the act should
    be considered to have been done within that period if it is done on the next
    day on which the court or office is open. The reason is that law does not
    compel the performance of an impossibility. (See Hossein Ally v. Donze/le,
E   ILR 5 Calcutta 906). Every consideration of justice and expediency would
    require that the accepted principle which underlies Section I 0 of the General
    Clauses Act should be applied in cases where it does not otherwise in terms
    apply. The principles underlying are lex non cogit ad impossibilia (the law

F
    does not compel a man to do the impossible) and actus curiae nemi nem
    gravabit (the act of Court shall prejudice no man). Above being the position,
                                                                                       /
    there is nothing infirm in the orders passed by the Forums below. However,
    the rate of interest fixed appears to be slightly on the higher side and is
    reduced to 9% to be paid with effect from 03.12.2001, i.e., the date on which
    the letter was received by HUDA.

G          The appeal is, accordingly, disposed of.

    R.P.                                                       Appeal disposed of.



H


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