E-Paper
Chandigarh MC can impose only 10% interest on delayed rent payment: Estate officer
The lessee has also been directed to pay the dues within 30 days from issuance date of the demand notice, failing which the office would be at liberty to initiate action as per the rules applicable in the present case
The court of additional commissioner-cum-estate officer, Chandigarh municipal corporation, on Friday held that the civic body cannot charge its allottees 20% penal interest on account of delayed ground rent payment and can only impose 10% interest.
The order came in the case of Lok Priya Buildwell Private Limited, which is the lessee of the hotel site in Sector 35-B from where JW Marriott hotel operates.
The EO directed the MC to calculate the outstanding amount of ground rent at 10% as per provisions of the lease rules and intimate the lessee Lok Priya Buildwell Pvt Ltd, hotel site Block no 6, Sector 35B, within seven days.
The lessee has also been directed to pay the dues within 30 days from issuance date of the demand notice, failing which the office would be at liberty to initiate action as per the rules applicable in the present case.
Notably, the EO order came following the directions dated October 22, 2020, of the court of UT adviser, which had set aside the resumption order issued to the Sector 35 hotel by the estate office branch of the Chandigarh MC. The adviser had directed the EO to examine afresh. The petitioner approached court of EO through advocate by SK Jain and Vikas Jain.
The petitioner’s counsel stated that the estate office had wrongly charged 20% interest on account of non-payment of ground rent while applying condition five of the allotment letter and that the said condition applied to non-payment of principal amount of premium and not non-payment of ground rent.
The appellant further contended that as per the Rule 13 of Chandigarh Leasehold of Sites and Building Rules, 1973, only 6% interest can be charged for the non-payment of the ground rent and till date it is actually paid. “The Chandigarh MC had not issued any notification for the imposition of interest at 20%, which without any notification is illegal and liable to be set aside,” it was said.
The MC representative submitted that it was clearly mentioned in clause five of the allotment letter that in case the petitioner failed to make payment of outstanding dues then he is liable to pay 20% interest on the account of non-payment of ground rent.
“The Chandigarh Lease Hold of Sites and Building Rules, 1973, governing the allotment of the site had mentioned 20% penal interest,” it was mentioned.
The UT adviser had set aside the impugned orders passed by the lower courts and remanded the case back to the MC additional commissioner for a fresh decision.
The adviser order had stated, “It is clear that condition five of the allotment letter providing 20% interest is applicable only to non-payment of the principal amount premium. It is also a fact that there is a separate provision for non-payment of ground rent under the act as well as in the allotment letter. Since the additional commissioner has not applied the relevant rules while passing the impugned orders, therefore, the revision petition deserves to be accepted.”
