Date:18/12/2007 URL: http://www.thehindu.com/2007/12/18/stories/2007121857950600.htm

Tamil Nadu

TNHB can’t levy interest for delay in fixing cost: HC

Staff Reporter

“Burden cannot be shifted to the shoulders of allottees”

MADURAI: The Tamil Nadu Housing Board cannot levy interest for the unreasonable delay it caused while fixing the final cost of property, the Madras High Court has ruled.

Disposing of a petition filed before the Madurai Bench, Justice M. Jeyapaul said: “The burden of bearing the cost for the delay on account of the default on the part of the respondent [the Board] cannot be shifted to allottees.”

The petitioner, N. Subburam of Tirunelveli, said the Board allotted him a house at Tenkasi in 1998 on payment of a tentative cost of Rs.3,09,700. He agreed to pay the final cost after the land acquisition was completed. The process came to an end in 2002. But, the Board took four more years to fix the final land price and issued a demand notice only in October 2006. He was also asked to pay interest at the rate of nine per cent for the default period of 2002-06. He objected to the levy, arguing that the delay was caused by the lapses on the part of the Board.

Board counsel contended that the Board borrowed from nationalised banks for developing housing colonies and paid heavy interest. So, it would have to bear a huge financial burden if the interest levied on allottees, such as the petitioner, was waived.

Though the High Court passed its final verdict in the land acquisition proceedings in 2002 itself, the Board had to approach the Land Acquisition Officer for fixing the exact compensation for the landowners. The delay was caused by such a cumbersome process.

Disagreeing with him, the judge said: “If the respondent had been vigilant, the entire process of calculating and making payment of compensation in the light of the final decision arrived at by this court in the appeal suit would have been over within six months.”