Funds from one housing scheme can't be diverted to another: HC

Saurabh Malik

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Chandigarh, May 28

The Punjab and Haryana High Court has ruled that diversion of funds deposited for a particular housing scheme to other schemes “on principle would be something that is wholly unjustifiable and unacceptable”.

Can’t deny refund

Just because the respondents have chosen to divert the money taken from the petitioners to schemes with which the petitioners have no concern whatsoever, the petitioners cannot be denied refund of their money along with interest thereupon. HC Bench

The Bench has also made it clear the applicants in all such cases would be entitled to immediate refund with reasonable interest if the scheme was scrapped for any unavoidable reasons.

The direction by the Bench of Justice Amol Rattan Singh and Justice Lalit Batra came on a bunch of 17 petitions filed by Raj Pal Singh Gahlaut and other petitioners against the Haryana Housing Board and another respondent.

They were seeking directions to the respondents to refund the amount deposited by them for allotment of flats in the ‘serving/ex-defence and para-military personnel of Haryana’ category.

The Bench, during the course of hearing, was told that the petitions pertained to different housing schemes in the districts of Haryana. The advertisements were issued at different points of time and the draw of lots was held on different dates. But some of the schemes were scrapped.

Appearing before the Bench, Haryana Advocate-General submitted that the Housing Board floated schemes and the funds gathered from different advertisements were spread out for purchase of land and execution of schemes all over the state.

A kind of common pool was created for utilisation of money from the applicants in various schemes. It was then utilised by buying land in different parts of the state for various schemes and their execution, including construction.

The Advocate-General, as such, submitted that the money gathered from the applicants has not been mis-utilised even where the schemes were scrapped.

It was simply diverted for the benefit of other schemes and other applicants.

The Bench observed ex facie, it did not find the argument tenable. An applicant for a specific scheme obviously had a right to expect the fructification of the scheme floated by a government agency into actual construction of flats. He also had the right to except that a flat would be given to him as a dwelling unit.

The Bench added the applicants in these cases were mostly ex-servicemen, some of whom had taken loans for the schemes. Referring to an affidavit, the Bench observed it was stated that the money would be refunded by June end. “We find it to be reasonable enough, but with it, it was again repeated that it cannot be without payment of interest in the aforesaid circumstances,” the Bench added.