The Hindu : Front Page : High Court order on Ellisnagar housing scheme modified

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High Court order on Ellisnagar housing scheme modified

J. Venkatesan

SC directs allottees to pay interest from January 1, 2001

It declines to modify portion of the order in respect of calculation of capitalisation charges
The Board shall execute the deed of conveyance in favour of the allottees

New Delhi: The Supreme Court has held that allottees of flats/houses in Ellisnagar Housing Scheme in Madurai should pay interest on the difference in land cost from the date of allotment and not from the date on which the final cost was arrived at.

A Bench of Justice R.V. Raveendran and Justice Dalveer Bhandari passed the order while disposing of appeals filed by the Tamil Nadu Housing Board against a Madras High Court judgment asking the allottees to pay interest from May 21, 2004. The Bench modified the High Court order and directed the allottees to pay interest from January 1, 2001 as claimed by the Board.

The High Court had said that the allottees (petitioners) “will pay the final land cost at the rate of Rs.3,49,100 per ground with 5 per cent nominal profit. The capitalisation charges will be determined for the period from the date when flat or house was made ready for occupation till date of allotment for occupation and such amount will be indicated separately.” The writ petitions were filed challenging the determination of the final cost of the land, capitalisation charges and interest in regard to scheme.

Aggrieved against the High Court judgment dated October 16, 2006, the Board in its appeals stated that it had borrowed funds from financial institutions for construction; that in regard to the allotments made after the cut off date, (the date up to which interest is charged while fixing/approving the selling price under the scheme), the Board had capitalised the interest on the cost of construction only till the cut off date; and that the Board was therefore entitled to further capitalisation amount from the cut off date to the date of allotment or ‘ready for occupation date’, whichever was later.”

Disposing of the appeals, the bench while modifying the date for calculation of interest from May 21, 2004 to January 1, 2001 declined to modify the portion of the order in respect of calculation of capitalisation charges. The Bench asked the Board to intimate the allottees, the amount due by them as per the order of the High Court as modified, within three months and the allottees should pay the amount so demanded within three months of the date of demand. On payment of the amounts due by the allottees, the Board shall execute the deed of conveyance in favour of the allottees.

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