Delhi High Court
Smt. Renu Bali vs Delhi Development Authority on 30 October, 2003
Equivalent citations: 108(2003)DLT392
Author: Sanjay Kishan Kaul
Bench: Sanjay Kishan Kaul
JUDGMENT Sanjay Kishan Kaul, J.
1. Delhi Development Authority (DDA) was constituted under the Delhi Development Act, 1957 (hereinafter to be referred to as 'the said Act') with the avowed object, unfulfilled as it may be, for the development of Delhi according to plan and for matters ancillary thereto.
2. In order to meet the requirements of housing needs of the residents of Delhi, vast strips of land were acquired and placed at the disposal of DDA for its housing projects, The DDA propounded various schemes for construction of dwelling units. One mode was to allot the flat after carrying out construction and registration under the scheme was based upon the economic condition of the registrants. Under this scheme. Higher Income Group (HIG), Middle Income Group (MIG), Lower Income Group (LIG) and Janta flats were constructed and thereafter sold to the registrants. The number of registrants were much higher than the original number of flats envisaged to be constructed and, thus, periodically draw of lots had to be held from time to time to make the allotment.
3. The DDA simultaneously adopted another mode of construction of flats where registrants were financial participants in construction of the flats by contributing funds from time to time. These were the self-financing schemes (SFSs). The allottees were registered under these schemes and draws of lots were held, since under these schemes also the number of registrants were far beyond expectation and the immediate construction ability of the respondent DDA. The registrants, who were successful in draws of lots, were issued allocation letters allocating the particular category of flat in a locality and zone. Thus, it was a mere matter of chance as a result of the draw as to in which area, the allottee would be allocated the flat. Pursuant to these draws, allocation letters were issued specifying the terms and conditions specifically, which were already set out in the brochure and the rules and regulations applicable as framed under the said Act. However, no specific flat number was assigned at that stage and the allottee only knew that he was to get a flat on a particular floor in a particular locality, zone and area.
4. The allocation letter provided for payment of four Installments towards 90% of the tentative price of the flat. The word 'tentative' has material bearing as in all cases by the time the construction of the flats was complete, there was considerable increase in the final cost and the contributions towards the first four Installments towards 90% of the estimated cost did not actually reflect 90% of the final cost. At the stage when the flats were almost ready for allotment, draws of lots were to be held allotting specific flat numbers and thereafter the fifth and final demand letter was issued allotting specific flat number and making demand for the balance payment to be paid within the stipulated period of time. It is on payment made pursuant thereto and completion of necessary formalities, the possession of the flat was handed over.
5. In the allocation letter issued, dates were stipulated for making payments of the first four Installments and there were consequences of making default in payment. Payment could be made belatedly with interest up to a maximum period of 90 days without applying for extension. The interest chargeable was @ 12% per annum for the first month and @ 18% per annum for the subsequent period and there was provision for automatic cancellation of the flat in case of failure to make payment even during the extended period of time. The cancellation due to nonpayment of any Installment could, however, be revoked and the registration restored on payment of dues with interest along with cancellation and registration charges for each cancellation, subject to availability of the allocated flat.
6. The allocation letter originally envisaged a time period about two and a half years for construction of the project. However in case of delay, interest was payable @ 7% per annum for the period of six months and thereafter @ 10% per annum to be adjusted against the cost of the flat.
7. The DDA came out with a number of self-financing schemes in early 1980s evoking large response. The V SFS was announced in November, 1986 and in view of large number of unsuccessful applicants in the first four SFSs, a decision was taken to permit even the applicants of the first four SFSs to apply for being considered for the draw of lots under the V SFS. The brochure provided that the scheme would be governed by the terms and conditions contained in the brochure and the DDA (Management and Disposal of Housing Estates) Regulations, 1968 (hereinafter to be referred to as the said Regulations). It would be relevant to reproduce some of the paras of the scheme as under:
"Mode of payment:
The demand-cum-allotment letters issued will indicate the prescribed dates by which the payments will be required to be made, the demand letter for 5th and final Installment will be issued separately and this may also include the possible increase in the cost of the flat. No separate letters will be issued for any of the subsequent Installments. It will be obligatory on the part of the allottees to make the payments before the due dates indicated therein. In the event of default the allocation of the flat in the scheme will liable to be cancelled.
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Surrender/Cancellation:
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If the allotment of flat is cancelled (either on the allottee's own request or due to the non-fulfilment of the terms and conditions of allotment by the allottee) after the expiry of 1, 2, 3 & 4 months from the date of issue of demand-cum-allotment letter, interest calculated @ 12% p.a. for the 1st month and 18% p.a. for the 2nd, 3rd & 4th month on the amount demanded in the demand letter shall be charged in addition to the amount of penalty specified above.
If the applicant does not pay the subsequent Installments before the due date the allotment of the flat in the Scheme will be cancelled and the amount deposited till date will be refunded to the penalty after deducting 10% of the amount of the registration deposit.
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General ... ... ... ...
(ii) Intending purchasers are also requested to study carefully the Delhi Development Authority (Management and Disposal of Housing Estate) Regulations, 1968 and the various deeds which are appended thereto before filling up the application form. The booklet containing these Regulations is available on payment at the Form Sales Counter of DDA.
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(iv) The above terms and conditions will be followed generally but the DDA reserves its right to alter any of them in its discretion if and when considered necessary. The altered terms, if any, will supersede these terms and conditions.
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8. Annexure A to the brochure specified the localities in which the flats were to be offered on the different floors and note to the said annexure stated that no preference for block, floor or pocket would be exercised.
9. Even in this V SFS, all the persons could not be accommodated and thereafter the VI, VIA, VIB, VIII and IX Self Financing Schemes were floated. The relevant terms and conditions, however, remained the same, though the clause numbers may have changed. Similarly, draws were held in these cases also and allocation letters were issued along with the terms and conditions.
10. Clause 4 of the allocation letter is as under :
"4. The amount demanded should be paid on or before the due date mentioned in paras 2 & 3 above. Extension of time for making payment of the amount demanded in column 7 of para 3 above up to a maximum period of 90 days from the due date is admissible. An allottee need not apply for extension but he will have to pay interest @ 12% p.a. for the first month and @ 18% p.a. for the subsequent period. In case payment of the amount asked for in the demand letter is not made within 90 days of the due date, the allotment shall stand cancelled automatically. However, cancellation due to non-payment of first 4 Installments during the stipulated period can be got restored on payment of dues with interest along with cancellation and restoration charges for each cancellation due to non-payment, subject to availability of the allocated flat. The cancellation due to non-payment of final Installment within 120 days of the date of issue (latter of the block date) of the demand letter for 5th Installment shall not be restored under any circumstances."
11. Some of the other relevant general terms and conditions circulated with the letter are as under:
"1. No separate demand letters will be issued for 2nd, 3rd & 4th Installments. It will be obligatory on your part to make the payment before the due date indicated at page-1; failing which the allocation is liable to be cancelled.
2. The estimated cost of the flats as given in this letter is provisional & subject to revision on the completion of the flat. Any price difference between the estimated cost & the cost as it comes out on completion as per costing formula then in vogue would have to be paid along with the 5th and final Installment. There would be no review of the cost of the flat in the intermining period. Interest @ 7% on the amount deposited will be payable for the period beyond 31/2 years to the date of issue of possession later if the construction of the houses is not completed by then.
3. The amount demanded should be paid on or before the stipulated due date failing which the allotment shall be liable to be cancelled without notice. In case, due to unavoidable reasons, the allottee is not able to make the payment within the due time, then he must ensure that his acceptance of the allotment reaches the Housing Department before the due date of payment with a request for extension. A special counter has been opened at the Ground Floor of Vikas Minar where such acceptance can be given and a receipt obtained about giving the acceptance. However, those allottees who cannot come to Vikas Minar can send their acceptance by registered post. But it should be ensured that it reaches before the due date to avoid cancellation of the flat. The maximum extension would be available only for four months from the due date on payment of interest for the first month @ 12% p.a.; for second, third & fourth month @ 18% p.a. chargeable from the due date of payment. No further extension of more than four months, in any circumstances, would be given and any request would be summarily rejected. In case the payment is not received even during the extended period and if the acceptance is received, the allotment will be cancelled without any show-cause notice and he will also be liable to pay the usual cancellation charges/penalty, etc. The broken period up to 15 days is taken as half month while that exceeding 15 days as full month for calculation of interest. The DDA reserves the right to refuse the permission of extension in its discretion at any time. Delay in the sanction of the loan by the employers of the allottees, would not be considered a ground for the deferment of the due date of payment. Whether the financiers grant the loan to the allottee or not the interest on the belated payments would be payable at the fixed rates. No request for the waiving of penal interest would be considered on this ground.
4. Penalty equal to 10% of the registration deposits is to be payable for the surrender /cancellation of the flat after the draw, but within one month of issue of the demand-cum-allocation letter after which an additional interest @ 12% p.a. will be charged on the amount of first Installment and if the allocation is surrendered/cancelled within the second, third and fourth month of the issue of the demand-cum-allocation letter, an additional interest @ 18% p.a. will be charged. In case the payment is not received within the permissible period, it will be deducted from the registration deposit. In case the allottee gets the allotment of scooter garage surrendered/cancelled on the basis of draw of lots after the draw, but within one month from the date of allocation, he will be liable to pay penalty of Rs. 100/-. If the allocation of scooter garage is cancelled (either on the allottee's own request or due to the non-fulfilment of the terms and conditions of allotment by the allottee) after the expiry of one month from the date of issue of demand-cum-allocation letter, interest calculated @ 12% p.a. on the amount demanded in the demand letter after expiry of 2nd, 3rd and 4th month @ 18% p.a. shall be charged in addition to the amount of penalty specified above.
5. If the applicant does not pay the subsequent Installments before the due date, the allocation of the flat in the scheme will be cancelled and the amount deposited till date, will be refunded without interest to the party, after deducting 10% of the amount of the registration deposits The applicant will, however, be allowed to continue to remain an registered if he opts to keep Rs. 10,000/- or Rs. 15,000/- (as the case may be) with the DDA for such purpose out of the amount so found to be refundable.
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15. You are not allowed to transfer, mortgage or otherwise part with the possession of the whole or any part of the flat without the previous consent of the Authority in writing and the Authority shall be entitled to refuse the permission in its absolute discretion :
Provided that in the event of a transfer being made without obtaining previous consent of the Authority in writing, such transfer shall not be recognised by the Authority and it shall be open to the Authority to cancel the allotment and resume the flat:
Provided further that in the event of consent being given, the authority may impose such terms & conditions as it may think and the Authority shall be entitled to claim and recover a portion of the unearned increase in the value of land i.e. difference between the premium paid and the market value of the land prevailing on the day of transfer at the time of sale, transfer, assignment or parting with the title, the amount to be recovered being 50% of the unearned increase. The decision of the Authority in respect of the market value of the land shall be final and binding:
Provided further that the Authority have the pre-emptive right to purchase the property (less depreciation) and 50% of the unearned increase in the cost of land.
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12. In the present batch of writ petitions, the allottees are of the V and VI SFSs, who were allocated flats in Jasola, Sarita Vihar and Sheikh Sarai. The VISFS opened in December, 1992 and closed in January, 1993. The successful allocatees were issued allocation letters specifying the due dates for payment of the first four Installments. There were some delay in construction subsequently and as a consequence of the same, in some of the cases, second, third and fourth Installments were deferred, but there was no deferring of the first Installment. There were defaults in payments by a number of allocatees and the allocations were being restored on the conditions of payment of stipulated interest and registration charges. However, in August, 1996, a circular was issued by the DDA in the form of an office order dated 16.08.1996 in respect of the regularisation of delays of the flats allotted in South Delhi under the SFSs. The circular was issued under the signatures of the Commissioner (Housing), DDA and was approved by the Vice-Chairman, DDA on 22.08.1996. The said circular dated 16.8.1996 is in the following terms :
"No. PA/CH/DDA/96/150 Dated : 16.8.1996 OFFICE ORDER
Sub: Regularisation of delays in respect of the Flats allotted in South Delhi under the SFS Under the present delegation of powers, delays in making payments of first 4 Installments as well as payment of 5th and final Installment are regularised as per following delegation of powers:
Director (H)-I - up to 3 months Commr. (Housing) - up to 1 Year Principal Commr. - From 1 Year to 11/2 Year V.C. - Full pwers
2. With the approval of L.G. a decision was taken that the current price for South Delhi flats will be worked out by adding a surcharge of 20% from the price worked out as per old format. The approval of L.G. to this decision was granted on 12.7.1996.
3. There are presently cases in the Housing Department where there have been delays in the making of the payments of the flats allocated/allotted in South Delhi under S.F.S. Before the aforesaid revision took place, delays of one year or so were being regularised with usual charges, i.e., on payment of 18% interest per annum and restoration charges, etc. in few cases where delays are unusually long, current price has also been demanded.
4. With the revision aforesaid, a question has arisen whether delay should be got regularised or flats should be disposed of, at current price since that can fetch perhaps some more revenue in few cases.
5. Matter has been considered and it is felt that non-regularisation of delays in deserving cases will be presented and therefore, in the cases of those who have got allocations/allotments in South Delhi, if any time extension/ regularisation of delay is done as per above delegation of powers, then we may do so with the following condition:
"Delay shall be regularised on payment of either current price or old price/usual charges, whichever is higher."
6. This may please be approved, so that further action in individual cases is accordingly taken.
Sd/-
Kewal K. Sharma Commissioner Housing)"
13. The effect of the aforesaid circular was that in respect of South Delhi flats, a 20% surcharge was added. Simultaneously, it was decided that in respect of South Delhi flats where there has been defaults in making payment, the delay in making payment was to be regularised only by payment of either current price or old price /usual charges, whichever was higher. This policy decision, thus, came into force on 22.8.1996 when the scheme was approved by the Vice-Chairman, DDA.
14. On 27.8.1996, the authority constituted under the said Act passed a resolution being Item No. 105 dealing with the grant of incentives to applicants of the proposed Expandable Housing Scheme - 1976 for making payment on cash down. To balance the reduced cash flow because of the discount being offered for cash down payment under the scheme, it was found necessary to charge premium in the areas where the real value in the market of DDA flats is much higher and, thus, a 20% premium over the disposable cost was worked out for South Delhi flats.
15. Another office order was issued by the respondent DDA on 5.11.1998 also dealing with the issue of delayed payments of Installments, which is as under :
"No. HAU-IX/Delay/98/DDA/239-M November 5, 1998 OFFICE ORDER
While issuing allocation/allotment letters to the registrants of various schemes announced by DDA, a demand is raised from the concerned allottees specifying the amounts to be paid with due date of payment. However, sometimes on account of the problems faced by the concerned allottees the payment received by the DDA are later than the scheduled date. Such cases are usually examined on merits and the delay is regularised if there is merit in the case as non-regularisation of delays in deserving cases may be resulted by the allottees. The following shall be the rules applicable to the allottees of all category of flats in case there payments are delayed and are regularised by the competent authority.
A. Competent Authority to regularise the delay;
Period of delay. Designation i) up to 30 days Jt./Dy. Directors ii) Beyond 30 days but up to 90 days. Directors (Housing) iii) Beyond 90 days but up to 1 year. Commissioner (Housing) iv) Beyond 1 year but up to 1 Year 6 month Principal Commissioner v) More than 1 year 6 months. Vice-Chairman B. Price of the Flat.
i) If the allocated/allotted the flat in South Delhi where the construction has been undertaken by the South East Zone and South West Zone of the Engineering Wing Except Dwarka (being in West Delhi) the price of the flat if restored, would be " Old Cost" interest or current cost whichever is higher.
ii) In case where allottees of the localities mentioned (i) above default a small percentage of demanded amount up to 10% beyond the due date, this delay, if regularised, would be on " Old Cost interest".
iii) In other cases of all category flats i.e. where the construction of flats has been undertaken by other zones of Engineering Wing the restoration shall be at " Old Cost interest".
2. A decision exists that while working out the current cost for flats in South Delhi, a surcharge of 20% from the price worked out as per old formula, will be added. This surcharge will continue to be added for South Delhi flats. The interest rates in the above case shall be @ 18% per annum on the defaulted amount.
C. REStorATION CHARGES:
In addition to the above, the allottees/allocatees whose allotment is restored by the competent authority, shall be liable to pay Restoration Charges @ 25% of the registration money of the respective scheme.
D. EXTENSION OF TIME The requests concerning extension of time, if made, shall be governed by the same rules as above and the clause of restoration charges as mentioned in (C) above, will not apply. The competent authority will be as per (A) above.
3. The above orders are in supersession of the previous orders on the subject and would come into force with immediate effect.
Sd/-
(Gyanesh Kumar) Commissioner (Housing)"
16. At this stage/ it would be appropriate to also refer to two earlier resolutions of the DDA as a consequence of the issues arising in some of the writ petitions where the allottees requested for change of floor in the same locality or change of locality in the same zone. The first policy decision is a resolution of the authority bearing No. 51 dated 9.7.1990 providing that in case of left-out flats, the case was to be worked out at the current cost formula, but depreciation @ 1% per annum was to be allowed thereon. The relevant extract of the said resolution is as under:
"No. Sub ; Calculation of revised cost in respect of left 51 out flats 9.7.90 File No. PA/CH/DDA/90/25-H PRECIS
The allotment of flats by DDA is made on 'No Profit No Loss' basis. After completion of the flats, the allotment is made by DDA to the eligible registrants. During the process of allotment some flats are surrendered by the allottees or the allotments are cancelled for various reasons. As per the existing procedure 21/2% of the total flats constructed in each pocket/Scheme are also reserved for allotment on out of turn basis. The cost of the left-out flats is updated at the time of allotment in case such flats remain vacant for more than 6 months from the date of original draw.
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RESOLUTION It was resolved that cost of the left out flats be worked out at the current cost formula and depreciation @ 1% p.a. be allowed thereon."
17. The further resolution No. 103 dated 13.9.1991 dealt with the issue of price of flats in cases where change is allowed on the request of the allottee and discussed the earlier resolution No. 51 dated 9.7.1990. This was on account of the fact that revised land rates had come into force from 6.12.1990. It was decided that in cases of change at the request of the allottees, the up-to-date cost of the subsequent flat based on revised land charge and current building cost would be leviable and as the change is allowed to the benefit / advantage of the allottee, no interest on his deposit against earlier flat is allowed, which was being done even earlier.
18. An office order was also issued on 23.1.2001 in the nature of a clarification of the circular dated 31.3.1999, which are as under :
"DELHI DEVELOPMENT AUTHORITY No. HAU-IX/Delay/98/DDA March 31,1999 OFFICE ORDER While issuing allocation/allotment letters to the registrants of various schemes announced by the DDA, a demand is raised from the concerned allottees specifying the amounts to be paid with due dates of payments. However, sometimes on account of the problems faced by the concerned allottees, the payments received by the DDA are later than the scheduled date. Such cases are usually examined on merits and the delay is regularized if there is merit in the case, as non-regularisation of delays in deserving cases may be resented by the allottees.
The following shall be the rules applicable to the allottees of all category if flats in case their payments are delayed and are regularized by the competent authority.
1. COMPETENT AUTHORITY TO REGULARISE THE DELAY:
Period of delay. Designation i) up to 30 days Jt./Dy. Directors ii) Beyond 30 days but up to 90 days. Directors (Housing) iii) Beyond 90 days but up to 1 year. Commissioner (Housing) iv) Beyond 1 year but up to 1 Year 6 month Principal Commissioner v) More than 1 year 6 months. Vice-Chairman Note:
However, the cases where allottees default a small percentage of total demanded amount up to 10% beyond the due date, regularization of delay/ restoration of allotment, if considered, the competent authority shall be the Commissioner (Housing) to restore the allotment/regularize the delay irrespective of the period of delay.
2. PRICE OF THE FLAT
i) In cases (pertaining to any locality) where demanded amounts were received prior to 22.08.1996 by DDA, the restoration of allotment/regularization of delay, if considered, would be on "old cost + interest".
ii) In case where allottees default a small percentage of total demanded amount up to 10% beyond the due date, the delay, if regularized, would be on "old cost+ interest".
iii) If the allocated/allotted flat is in South Delhi i.e. where the construction has been undertaken by the South East Zone and South West Zone of the Engineering Wing except Dwarka (being in West Delhi), the price of the flat, if restored, would be "old cost +interest or current cost", whichever is higher. This clause will be applicable in cases for which demanded amount by DDA is received after 22.08.1996 and the delay is regularized.
iv) In other cases of all category flats i.e. where the construction of flats has been undertaken by other zones of Engineering Wing, the restoration shall be at "old cost = interest".
3. SURCHARGE The premium of 20% over the disposal cost worked out on current cost or old cost for the SFS flats in South Delhi, where the real value in the market of DDA flats is much more than DDA is charging as per its costing formula, shall be charged.
4. INTEREST
i) Where the allottee enters the scheme at a later stage, he shall deposit all the due Installments with Actual Period Interest @ 10% per annum from time to time as per schedule already fixed.
ii) While working out the current disposal cost, in addition to current land premium at pre-determined rate, Actual Period Interest @ 10% per annum shall be charged.
iii) For updating the old cost, Actual Period interest on the 5th and final Installment shall be charged @ 18% per annum from the date of issue of demand letters in bulk.
iv) In other cases, the interest rate shall be @ 18% per annum.
5. REStorATION CHARGES In addition to the above, the allottees/allocates of SFS flats whose allotment is restored by the competent authority, shall be liable to pay Restoration Charge @ 25% of the registration money as per terms of allocation/allotment letter. However, such allottees of other categories of flats, shall be liable to pay "Restoration Charge" as Rs. 1000/- for Janta, Rs. 1500/- for LIG & EHS Type 'A' and Rs. 2500/- for MIG & EHS Type-'B'.
6. EXTENSION OF TIME The request concerning Extension of Time, if made, shall be governed by the same rules as above and the clause of restoration charge as mentioned above, will not apply. The competent authority will be as per (1) above.
7. PAYMENT OF BELATED CONSTRUCTION INTEREST As per scheme brochures, terms and conditions of the SFS allocation/ allotment, in case where construction of flats is delayed beyond 30 months (2 years 6 months), interest @ 7% per annum on the amount paid, up to 36 months and @ 10% per annum thereafter is permissible to the allocatees/allottees.
Accordingly, the Belated Construction Interest will be paid for the period beyond 2 years 6 months till the date of issue of 5th and final demand letters in bulk of the same sector/pocket/scheme. This amount ill be adjusted in the cost of the flat. This provision will, therefore, be applicable to the allocates/allottees whose payments are in time or in cases where delays stands regularized by the Competent authority. The above orders are in supersession of the previous orders on the subject and would come into force with immediate effect.
Sd/-
(Gyanesh Kumar) Commissioner (Housing)"
"No. PA/CH/DDA/2000/18-N Dated 23rd January, 2001 OFFICE ORDER There is some confusion regarding the applicability of the Circular dated 31.3.99 regarding charging of old cost plus interest in cases where all four Installments were paid before 22.8.96 (except in cases where one or two Installments were deferred but one or two Installments were delayed). In this regard, it is now made clear that benefit of old cost plus interest as per the circular of 31.3.99 would apply in cases where the conditions are fulfillled :
1. Any delay in deposition of Installment money should have been condoned by the Competent Authority after charging the penal interest and other usual as per the terms & conditions of the allotment.
2. The cases should be of original allottee only. No benefit will be given to GPA/SPA cases.
3. 5th and final demand letter should have been issued on or after 31.3.99 or where the action is still to be taken. No settled case where amount has been deposited thus would be re-opened.
In such cases once benefit of old cost plus interest is agreed to, belated construction interest (BCI) will also be payable as per prevailing rules.
This bears the approval of FM and V.C. Sd/-
(Devendra Bhushan Gupta) Commissioner (Housing)"
19. The office order dated 31.3.1999 was issued in relation to cases where the payment of Installments was received after the scheduled date. In terms of the circular where the demanded amount was received prior to 22.8.1996, the old cost plus interest formula was to apply. This was also made applicable where the default was a small percentage of the total amount up to 10%. After 22.8.1996, the formula was to remain the same for areas other than South Delhi where it would be old cost plus interest or current cost, whichever was higher and surcharge of 20% was also applicable to these flats. The interest rate and restoration charges as also payment of belated construction interest were also provided for.
20. The effect of the office order dated 23.1.2001 was that the benefit was not to be granted to persons, who were not original allocatees and were attorney holders, who had purchased the flat on such agreement to sell and power of attorney. The ostensible reason for this policy was that such sales were contrary to the terms and conditions of the allotment providing for the restriction on such transfer.
21. Mr. S.K. Rungta, learned' Counsel for the petitioners appearing in most of the matters, has sought to crystallised his submissions in respect of two broad subject matters arising for adjudication in the present writ petitions. The first aspect is the imposition of 20% surcharge and the second aspect is the charging of current cost. This charging of current cost in turn arises on account of (a) delayed payment, of Installments; (b) change of floor at the request of the allottee(s); and (c) delay in sending demand letters and change of locality at the request of the petitioners.
22. Learned Counsel for the petitioners has submitted that the principles laid down in R.K. Sachar v. Delhi Development Authority, 104 (2003) DLT 426=2002 VIII AD (DELHI) 280 would not apply to the facts of the present case. This is stated to be so on account of the fact that the present cases are one of Self Financing Scheme(s). The policy dedsion in respect of imposition of 20% surcharge was taken on 16.8.1996 and came into force on 22.8.1996, when it was approved by the Vice-Chairman, DDA. It was submitted that at least two Installments had already been paid prior to the date of 16.8.1996 and there was deferred payment of Installments in certain cases on account of delay in construction by DDA. The delay had dual consequences of deferment of payment of Installments and interest on the belated construction beyond 30 months. It was, thus, submitted that but for the delay on the part of the respondent DDA in completing the project, the allottees would have got possession prior to the date of 16.8.1996 and the policy would have had no application insofar as the registrants who had registered much earlier and were entitled to the flats within at least 30 months' period of time, but that did not happen.
23. Learned Counsel for the petitioners has submitted by reference to Item No. 105 of 27.8.1996 that it was in order to balance the reduced cash-flow because of the proposed discount on cash-down basis payment that the charge of 20% premium was imposed on the South Delhi flats. It was further submitted that the same was linked with announcement of the Expandable Housing Scheme - 1996 and Self Financing Scheme of 1996. It was, thus, submitted that the same would have no application to SFS prior to 1996. The said item No. 105 of 27.8.1996 is as under:
"Item No. 105/27.8.96 Sub: Grant of an incentive to the applicants of proposed Expandable Housing Scheme - 1976 for making payment on cash down basis.
No. F. 10(15)/96/EHS PRECIS To dispose of about 700 expandable houses available with DDA, a new Scheme was brought before the Authority in its meeting held on 22.3.1996. Authority had approved the proposal for (i) offering 50% of the flats to the various Public Sector Undertakings/Government organizations and (ii) for offering the remaining 50% houses to the public by announcing a new Expandable Housing Scheme. A copy of the relevant Agenda item together with the resolution recorded by the Authority is added as App. A.P. No. 3-9.
Under this proposal, matter is being placed before the Authority for considering giving a rebate to those applicants who accept the allotment of the flats on cash down basis.
2. On the basis of the aforesaid resolutions of the Authority, 50% flats are proposed to be offered to the public. It is also being proposed to offer to public the unavailed flats if any out of the 50% flats being reserved for Govt. organisations/PSUs. In this manner, number of flats to be offered to the public can be beyond 50%.
3. The nature of hire purchase mode of payment to be incorporated in the Scheme being opened to public is separately under finalisation.
4. While this facility is being given to all the applicants it is felt that we may simultaneously think of measures by which allottees are encouraged to pay the entire price of the flat before taking possession. When the hire purchase facility exists ordinarily no one comes towards to accept allotment on cash down basis. To loans or otherwise make arrangements to pay full price of the flat before possession, it is proposed that following discount may be provided in the scheme.
Name of the Locality Discount to be provided (i) Dwarka sub-City 5% on the disposal price (ii) Rohini, Narela and 15% on the disposal price Kondli Gharoli
To balance the reduced cash in-flow because of the proposed discount it will be necessary to charge premium in the areas where the real value in the market of DDA flats is much more than what DDA is changing as per its costing formula in the demand letters. It would be in the fitness of thing to charge premium of 20% over the disposal cost worked out for the flats in Sough Delhi SFS.
6. This discount, however, will not be provided to the Public Sector Undertakings/ Government Organizations availing the flats.
7. The above proposals were placed before the Lt. Governor/ Chairman, DDA and his permission was sought for implementing the proposals and seeking post facto approval of the Authority since the proposals/are linked with announcement of Expandable Housing Scheme-1996 and Self Financing Housing Scheme-1996. Matter is now accordingly placed before the Authority for approval.
.................... RESOLUTION.....................
Resolved that proposal contained in the Agenda Item be approved."
24. Learned Counsel for the petitioners has referred to Division Bench judgment of this Court in P.N. Verma and Ors. v. Union of India and Ors., AIR 1985 Delhi 417. In the said case, the Division Bench referred to judgment of the Supreme Court Premji Bhai Parmar and Ors. v. Delhi Development Authority and Ors., . The Division Bench was of the view that the principles laid down in Premji Bhai Parmar's case (supra) would not be applicable in view of he fact that there was a material difference insofar as P.N. Verma's case (supra) was concerned. The difference arose on account of the fact that while the cost of the flat as announced in the brochure included surcharge in Premji Bhai Parmar's case (supra), this was not position in P.N. Verma's case (supra). Secondly, P.N. Verma's case (supra) dealt with SFS cases where there was participatory financing and what could be included was only the cost of construction and cost of land, though the estimated cost may have been tentative. The Division Bench in P.N. Verma's case (supra) was of the view that there could not be a revision of the policy of price fixation, which is a pre-contractual stage and the formula must remain the same. Thus, the fixation cannot be on any basis at the whim and fancy of DDA. The Division Bench also relied on the principles of promissory estoppel. The equalization charges, which was a component sought to be included in the pricing was, thus, struck down in the said case.
25. Learned Counsel for the petitioners has submitted that at no stage was any consent taken from the allottees nor were they put to notice of any such surcharge to be imposed. Learned Counsel has referred to judgment of the Division Bench of this Court in Nar Singh Jam and Ors. v. Union of India and Ors., . The Division Bench took note of the Full Bench judgment of this Court in Smt. Sheelawanti and Anr. v. D.D.A. and Anr., dealing with the scope of scrutiny by the Court in matters of price fixation, but held that equalization charges could not be included in the cost of flats in view of the decision of Supreme Court in Civil Appeal No. 4402/1985 titled 'Delhi Development Authority v. Self Financing Residents Association and Ors.' decided on 28.11.1996 where it was held that from the terms of the model contracts entered into by DDA with the people who opted for Self Financing Scheme, charging of equalization and ad hoc charges is evidently totally missing and, thus, could not be recovered. However, insofar as the charges for conversion were concerned, the Division Bench upheld the same being in larger public interest and having been uniformly applied. Learned Counsel also made reference to para 19 of the said judgment where the expression 'cost of the flat' was discussed and it was stated that the same is nothing, but the price paid or to be paid for something which in the instant case is the flat. Thus, the cost or the price is the cost to acquire it by the seller and something more by way of margin of profit.
26. Learned Counsel for the petitioners also referred to the Delhi Development Authority (Management and Disposal of Housing Estates) Regulations, 1968 (hereinafter to be referred to as' the said Regulations'). Regulation 2(13) defines the disposable price to mean such price as may be fixed by the authority for such property. It was submitted that 20% surcharge was over and above the disposable price while the said Regulations permit only the disposable price to be charged. It was submitted that different paras of Regulation 2 gave expression to different meanings used in the said Regulations and, thus, the meaning given in Regulation 2(13) are to be made applicable.
27. Learned Counsel further submitted that if this 20% surcharge was taken as part of the cost, the same would have ramification on other charges, which are calculated on the basis of the disposable cost. Illustrations of these were given as documentation charges, ground rent, etc.
28. Learned Counsel then referred to the issue of charging of current cost arising as a consequence of the change of floor and took the example of CWP No. 5141/2000. After the first three Installments had been paid, the change of floor was granted and all payments had been made within time. Learned Counsel has, thus, submitted that there was no basis for charging of current cost in such cases as it was open to the respondents to consider the case for change of floor, but that would not give rise to the consequence of current cost and nor was there any intimation of such charging. Learned Counsel has further submitted that at least insofar as the SFS flats were concerned, no policy has been placed on record to substantiate charging of such current cost.
29. A reference was than made to the cases of delayed payment of Installments. It was submitted that in Sheikh Sarai, there was no deferment of Installments even though the project was delayed. The allocation was made in the year 1993, but the fifth and final demand letter was issued only in the year 1999. Interest on blocked capital was given, but not for cases where there was any default. It was, thus, submitted that in case deferment was granted of Installments taking into consideration the progress of the project, the parties would not have been in default of payment of Installments. Reference, in this behalf, was made to CWP No. 5937/2000.
30. The pricing of these flats is stated to be in terms of the office order dated 31.3.1999 and it was submitted that Clause 2(iii) is illegal and invalid, which requires higher of the two costs to be charged between the old cost plus interest or current cost. This is sought to be made applicable in cases where the demanded amount is received by DDA after 22.8.1996.
31. Learned Counsel further submitted that in a number of cases, the overdue Installments were paid with interest, the name was included in the draw thereafter and demand letter was issued. It was stated that all this happened before the cutoff date of 22.8.1996 for imposition of surcharge. It was, thus, submitted that in such cases, there, would neither be an issue of 20% surcharge or current cost, which if would be applicable, would amount to discrimination between persons in the same scheme. Learned Counsel referred to the observations in para 9 of Premji Bhai Parmar's case (supra) to the effect that the authority having trapping of state might be covered by the expression 'other authority' under Article 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme. Thus, it was contended that there cannot be discrimination within the class itself.
32. Learned Counsel has submitted that the very concept of restoration means to put back a person in the original position and that if the completion date was taken as the relevant date and calculation made working backwards in time, the Installments could, in fact, have been treated as having been paid in time. Learned Counsel has further submitted that there was, in fact, not even any intimation of the change of costing, which would arise on restoration by charging current cost to the allottees at the stage when such restoration took place.
33. The anomaly in Sheikh Sarai cases was further sought to be explained by learned Counsel for the petitioners on the basis that the fourth Installment was payable in October, 1097 and was, thus, paid three years before time. The revised letter was issued only in February, 2000.
34. The fifth and final demand letters had, in fact been sent in February, 1999, but the flat was still not ready for delivery. It was submitted that all the Installments, even though delayed, had been paid by 1998 much before the flats were ready for delivery of possession.
35. Learned Counsel has also referred to judgment of the Supreme Court in K. Eapen Chako v. The Provident Investment Company (P) Ltd., AIR 1976 SC 2610, more particularly para 37, which is as under:
"37. A statute has to be looked into for the general scope and purview of the statute and at the remedy sought to be applied. In that connection the former state of the law is to be considered and also the legislative changes contemplated by the statute. Words not requiring retrospective operation so as to affect an existing statutory provision prejudicially ought not be so construed. It is a well-recognised rule that statute should be interpreted if possible so as to respect vested rights. Where the effect would be to alter a transaction already entered into, where it would be to make that valid which was previously invalid, to make an instrument which had no effect at all, and from enactments merely affect procedure and do not extend to rights of action. See Re Joseph Sucha & Co. Ltd. (1875) 1 Ch D 48. If the Legislature forms a new procedure alterations in the form of procedure are retrospective unless there is some good reason or other why they should not be. In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties it will be held to apply prima facie to all actions, pending as well as future."
36. Insofar as the issue of delay in sending demand letters in cases of change of locality at the request of the petitioners is concerned, reference was made to CWP No. 2833/2003 where there was three and a half years delay in issuance of allotment letter. The change was accepted on 3.11.1999. Learned Counsel also referred to the allotment letter dated 22.11.1999 to state that it was a case of adjustment against change of allotment. It was submitted that this change was sought as the original allocation was on the ground floor in Jasola, but the allotment had been made on the third floor. However, this fact is not correct as borne out from the record, since the allocation letter is in respect of the third floor.
37. Mr. Maninder Singh, learned Counsel for the petitioner in CWP No. 4901 of 2000, apart from relying on the submissions made by Mr. Rungta, sought to advance certain additional submissions. Learned Counsel sought to challenge the very jurisdiction of DDA to issue a cancellation letter under the contract when the stage of construction was not commensurate with the amount liable to be paid by that stage of time. Learned Counsel referred to the scheme and submitted that the same stipulated a financial participation during the period of construction by the persons, who wish to own flats offered by DDA. The same was set out in the beginning of the scheme itself as under :
"FIFTH SELF-FINANCING HOUSING REGISTRATION SCHEME-1992 The name of the Scheme will be " Fifth Self Financing Housing Registration Scheme" of the Delhi Development Authority. This Scheme has been formulated to obtain financial participation during the period of construction by persons who wish to own flats according to the different type/designs offered by the D.D.A."
38. Learned Counsel referred to Clause 5 of the Scheme, which stipulated that flats in South Delhi may also be offered subject to availability of land. The said clause is as under:
"5. Areas:
Flats to be constructed under the Fifth Self Financing Scheme will be released in due course. Subject to availability of land, flats in South Delhi may also be offered,"
Learned Counsel, thus, submitted that at the stage of registration, it was not even known whether any flats in South Delhi would be offered to the allottees or not and certainly no provision was made for any different terms to be made applicable to South Delhi flats.
39. Learned Counsel then referred to Clause 16 of the scheme, which is as under:
"16. General:
(i) Other terms and conditions of allotment would be the same as are presently applicable to the Self Financing Schemes as stipulated under the Delhi Development Authority (Management & Disposal of Housing Estates) Regulations, 1968.
(ii) The above terms and conditions will be followed generally but D.D.A. Reserves its right to alter any of them in its discretion if and when considered necessary.
... ... ... ...
40. Learned Counsel submitted that Clause 16(i) made applicable the Regulations and stipulated terms and conditions of allotment. It was submitted that unless a charge is specifically covered under the scheme or under the said Regulations, the same cannot be levied. Learned Counsel, thus, submitted that 20% surcharge, not having been provided for, could not be levied without there being a statutory amendment to the said. Regulations.
41. Insofar as Clause 16(ii) is concerned, which is the principal clause on which the respondent has relied upon in support of its authority for stipulation of the charges, it was submitted that the same cannot be read as a right to alter the very scheme. It was, thus, submitted that the right to exercise under Clause 16(ii) could be only incidental to what was stipulated in the scheme, since if it was read otherwise, it was liable to be struck down as unconscionable under Section 23 of the Indian Contract Act, 1872 (hereinafter to be referred to as, 'the Contract Act'). The said Section 23 is as under :
"23. What consideration and objects are lawful, and what not--The consideration or object of an agreement is lawful, unless--
It is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent;
or involves or implies, injury to the person or property of another;
or the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void."
42. Learned Counsel submitted that the matter in issue has even to be tested on the touch tone of the provisions of the Constitution of India (hereinafter to be referred to as, 'the Constitution') more specifically Article 19(1)(e) and Article 21. This submission was advanced on the basis that the right to shelter effects the very human existence and has, thus, to be tested on the touch tone of the aforesaid provisions as also Article 14.
43. To substantiate the aforesaid contention, learned Counsel referred to judgment of the Supreme Court in U.P. Avas Evam Vikas Parishad and Anr. v. Friends Co-op. Housing Society Ltd. and Anr., , where the Supreme Court observed that the right to shelter is a Fundamental Right, which springs from the right to residence assured under Article 19(1)(e) and right to life under Article 21 of the Constitution. Learned Counsel also referred to judgment of the Supreme Court in Ahmedabad Municipal Corporation v. Nawab Khan Gulab Khan and Ors., to contend that even encroachers on public land were required to be removed only after following certain principles of natural justice as enunciated in the said judgment.
44. Learned Counsel sought to challenge the very authority of the respondent DDA to impose 20% surcharge and submitted that Clause 16(ii) will have to be read with Section 23 of the Contract Act, if it is relatable to Part III of the Constitution. Learned Counsel, thus, sought to place great reliance on judgment of the Supreme Court in Central Inland Water Transport Corporation Ltd. and Anr. v. Brojo Nath Ganguly and Anr., , wherein the Supreme Court while taking into consideration the submissions and counter submissions in respect of the right of the parties to terminate the contract of employment considered the issue of unconscionable contract or bargain. This was in view of the submission of the appellant therein that unconscionability was not mentioned in the Contract Act as one of the grounds which invalidate the contract. The Supreme Court observed as under:
"76. ... ... ... ...
We need not trouble ourselves with the other sections of the Contract Act except Sections 23 and 24. Section 23 states that the consideration or object of an agreement is lawful unless inter alia the Court regards it as opposed to public policy, This section further provides that every agreement of which the object or consideration is unlawful is void. Under Section 24, if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object is unlawful, the agreement is void. The agreement is, however, not always void in its entirety for it is well settled that if several distinct promises are made for one and the same lawful consideration, and one or more of them be such as the law will not enforce, that will not of itself prevent the rest from being enforceable. The general rule was stated by Willes, J., in Picketing v. Ilfracombe Ry. Co. (1868) 3 CP 235 (at pages 250) as follows:
"The general rule is that, where you cannot sever the illegal from the legal part of a covenant, the contract is altogether void; but where you can sever them, whether the illegality be created by statute or by the common law, you may reject the bad part and retain the good."
In the said case, after discussing the law prevalent in this behalf in UK, USA, France and Germany, the Supreme Court set down its conclusion in para 90 as under :
"90.... This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No Court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations and with their vast infra-structural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The Court must judge each case on its own facts and circumstances."
45. In the said case, the Supreme Court was of the view that such a clause in the contract has to be adjudged as void and, thus, must fall under one of the relevant sections of the Contract Act. It was held that the only relevant provision in the Contract Act is Section 23 as the decision was opposed to public policy.
46. Learned Counsel sought to make light of the delays in making payment on the ground that the subsequent communications and the delay in construction made the same irrelevant. It may, however, be noticed that in para 7 of the counter-affidavit, it has been stated that the petitioner delayed in depositing part of the second Installment by 71/2 months and part by 41/2 months and in the third Installment by 27 and 371/2 months. Learned Counsel referred to the notice dated 23.4.1997 intimating to the petitioner that the flat allotted to the petitioner had been automatically cancelled in view of the delay in payments. On representations of the petitioner, the matter was reconsidered and letter dated 10.12.1998 was issued allotting the flat to the petitioner in Sheikh Sarai. It was submitted that the said letter states the reference no. of the file in terms whereof the earlier allocation was made to the petitioner and vide the said letter in the draw held on 15.10.1998 specific flat no. was allotted to the petitioner. It was submitted that there was not even a reference of restoration of any cancellation of allotment in the said letter. Learned Counsel, thus, submitted that there could not be any question of charging current cost from the petitioner in view thereof.
47. Learned Counsel further submitted that there was no authority in law to levy 20% surcharge since it did not form part of the said Regulations or the scheme and in this behalf referred to recent judgment of the Supreme Court in Civil Appeal No. 4167 of 2003 titled I.I.T.T.College of Engineering v. State of H.P. and Ors. decided on 8.8.2003 to contend that even assuming the laudable object of 20% surcharge, the same cannot form the basis of a levy, unless a power is conferred in this behalf. The Supreme Court while dealing with the issue of appointment of an Administrator in the private college by the High Court taking note of deficiencies in the Management held that in the absence of a provision under which Management of unaided private schools could be taken over by the Administrator, no such order could be justified under law however laudable the object behind the step taken by the High Court.
48. Learned Counsel submitted that the Legislature in its wisdom has not given the head of levy or such a surcharge in terms of the said Regulations and by the administrative order such a surcharge could not be levied, which is really in the nature of a tax as it would amount to circumventing the procedure or legislative enactment.
49. Learned Counsel also submitted that, in fact, the flat allotted to the petitioner is practically surrounded by slums as would be apparent from the photographs annexed to the rejoinder filed in CWP No. 4901 of 2000. It was submitted that the petitioner was not even given an option to take a flat in South Delhi or elsewhere and, thus, there could be no question of levy of 20% surcharge. Learned Counsel submitted that a number of these aspects including the right to levy such surcharge was not contended before this Court in R.K. Sachar's case (supra) and this Court is not precluded from considering the said submissions now irrespective of the decision in the said case. Learned Counsel submitted that the sub silentio principle would apply in such a case and referred to judgment of the Supreme Court in Municipal Corporation of Delhi v. Gurnam Kaur, , wherein it was observed as under:
"10. It is axiomatic that when a direction or order is made by consent of the parties, the Court does not adjudicate upon the rights of the parties nor does it lay down any principle. Quotability as' law' applies to the principle of a case, its ratio decidendi. The only thing in a Judge's decision binding as an authority upon a subsequent judge is the principle upon which the case was decided. Statements which are not part of the ratio decidendi are distinguished as obiter dicta and are not authoritative. The task of finding the principle is fraught with difficulty because without an investigation into the facts, as in the present case, it could not be assumed whether a similar direction must or ought to be made as a measure of social justice. That being so, the direction made by this Court in Jamna Das case could not be treated to be a precedent. The High Court failed to realise that the direction in Jamna Das case was made not only with the consent of the parties but there was an interplay of various factors and the Court was moved by compassion to evolve a situation to mitigate hardship which was acceptable by all the parties concerned. The Court no doubt made incidental observation to the Directive Principles of State Policy enshrined in Article 38(2) of the Constitution and said:
"Article 38(2) of the Constitution mandates the State to strive to minimise, amongst others, the inequalities in facilities and opportunities amongst individuals. One who tries to survive by one's own labour has to be encouraged because for want of opportunity destitution may disturb the conscience of the society. Here are persons carrying on some paltry trade in an open space in the scorching heat of Delhi sun freezing cold or torrential rain. They are being denied continuance at that place under the specious plea that they constitute an obstruction to easy access to hospitals. A little more space in the access to the hospital may be welcomed but not at the cost of someone being deprived of his very source of livelihood so as to swell the rank of the fast growing unemployed. As far as possible this should be avoided which we propose to do by this short order."
This indeed was a very noble sentiment but incapable of being implemented in a fast growing city like the Metropolitan City of Delhi where public streets are overcrowded and the pavement squatters create a hazard to the vehicular traffic and cause obstruction to the pedestrians on the pavement.
11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the Court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn. explains the concept of sub silentio at p. 153 in these words:
"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favor of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favor of the particular party unless it also decided point B in his favor; but point B was not argued or considered by the Court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio."
50. Learned Counsel also referred to judgment of the Supreme Court in State of U.P. and Anr. v. Synthetics And Chemicals Ltd. and Anr., , where it was observed as under :
"39. But the problem has arisen due to the conclusion in the case of Synthetic and Chemicals. The question was if the State Legislature could levy vend fee or excise duty on industrial alcohol. The bench answered the question in the negative as industrial alcohol being unfit for human consumption the State legislation was incompetent to levy any duty of excise either under Entry 51 or Entry 8 of List II of the Seventh Schedule. While doing so the bench recorded the conclusion extracted earlier. It was not preceded by any discussion. No reason or rationale could be found in the order. This gives rise to an important question if the conclusion is law declared under Article 141 of the Constitution or it is per incuriam and is liable to be ignored.
40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean perignomtium. English Courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered,' in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.). Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury's Laws of England incorporating one of the exceptions when the decision of an appellate Court is not binding.
41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English Courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub silentio. "A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind." (Salmond on Jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as it was rendered' without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnant Kaur. The Bench held that, 'precedents sub silentio and without argument are of no moment'. The Courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."
51. In the end, learned Counsel for the petitioner referred to the advertisement issued by DDA on 24.3.2002 relating to the relief for defaulting DDA allottees who would be charged reduced interest at the rate of 13% p.a. in payments made up to 31.3.2002. It was, thus, submitted that the petitioner in any case had paid the amounts by 1997.
52. Mr. J.M. Sabharwal, learned senior Counsel for the respondent DDA, on the other hand, sought to justify the costing and the imposition of various charges and emphasised on the terms and conditions of the brochure. Learned Senior Counsel submitted that the matter between the parties was one of pure contract and as long as DDA levies amounts, which are permitted under the brochure, the petitioner cannot make a grievance in respect of the same. Learned Senior Counsel submitted that Clause 1.2 of the brochure itself provided that allotment under the scheme will be on terms and conditions contained in the brochure and the said Regulations. Learned Senior Counsel referred to Clause 5.8, which provides for no preference for block, floor or pocket or type to be exercised, as also Clause 5.10, which states that costing of the flats mentioned therein is tentative and subject to revision on account of escalation in the value of land and cost of construction. The said clauses are as under :
"1.2 The allotment under the scheme will be on the terms & conditions contained in this brochure and the Delhi Development Authority (Management & Disposal of Housing Estates) Regulations, 1968.
... ... ... ...
5.8 No preference for block, floor or pocket or type can be exercised.
... ... ... ...
5.10 The details of the flats and tentative cost, etc. are available in Annexure-II. The cost of the flats mentioned therein is tentative and subject to revision on account of escalation in the value of land & cost of constructions. Please note that there is a possibility of upward revision of the tentative cost."
Learned Senior Counsel also referred to the stipulation in Clause 7.2, which required an allottee to carefully read the terms and conditions of the said Regulations, which would be applicable to all the allottees. The principal clause, however, is 17.4 (or a different no. in different schemes), which gives the right to DDA to alter the terms and conditions.
53. Learned Senior Counsel referred to the allocation letter and more specifically Clause 4 therein, which provides for payment of interest on delayed payment of Installments as also automatic cancellation. The said clause specifically stipulates that any price difference between the estimated cost and the cost 'as it works out on the completion as per costing formula in vogue' would have to be paid along with the fifth and final Installment. The submission of learned Senior Counsel, thus, was that the contention of the petitioners that they had not been put to notice was not correct since they had been informed that it would be costing formula in vogue at the stage of issuance of the fifth and final demand letter, which would be applicable. Not only this, Clause 11 (or any modified no. thereof), which puts a restriction on transfer, mortgage or parting with possession without previous consent of the Authority itself implied that those petitioners, who had purchased the flats on power of attorney basis without any prior consent of the Authority would have no locus standi as they had violated the terms and conditions of the allotment.
54. To elucidate the aforesaid point, learned Senior Counsel referred to the facts of CWP No. 5937/2000 titled Anil Kumar Gupta v. DDA, which is a case of power of attorney purchase though filed in the name of the original allottee. It was submitted that all the four Installments were paid only in 1998 just prior to the draw held on 15.10.1998 and the demand letter was issued in February, 1999. It was, thus, submitted that there was no participatory financing by such allottees and prior to the draw being held, an allocation was sold and the power of attorney purchasers then deposited the amount knowing fully well that the allotment stood cancelled.
55. Learned Senior Counsel referred to the policy of 16.8.1996, which was approved by the Vice-Chairman on 22.8.1996. It was submitted that para 2 of the said policy itself states that a decision was taken that current price for the South Delhi flats will be worked out by adding 20% surcharge as per the old format and this was taken with approval of the Lieutenant Governor granted on 12.7.1996. It was, thus, submitted that this policy was, in fact, approved on 12.7.1996 and the policy decision on 16.8.1996 only incorporated the same by reference to the regularisation of delays in respect of flats allotted in South Delhi under SFSs, which was approved on 22.8.1996. Para 4 of the scheme of 16.8.1996 also referred to the fact about regularisation of delays, which had taken place in respect of South Delhi flats taking into consideration the aspect of current price since they fetch perhaps more revenue in few cases. It was in these circumstances that the decision was taken to charge higher of the current price or old price/usual charges.
56. Learned Senior Counsel referred to the office order of 5.11.1998 to submit that the policy of charging current cost is applicable only to South Delhi flats, but an extra benefit has been given in cases where the default is of a small percentage of demanded amount up to 10% beyond the due date, which could be regularised at old cost plus interest. Learned Senior Counsel then referred to the office order dated 31.3.1999 where while dealing with the issue of price of flat in Clause 2(i), it was stipulated that where the demanded amounts were received prior to 22.8.1996 (that being the date when the policy was approved by the Vice-Chairman, DDA) the earlier policy of old cost plus interest would continue to apply. These aspects were further clarified by the office order dated 23.1.2001 in respect of there being some apparent confusion about applicability of the circular dated 31.3.1999 in terms whereof the benefit was to be given only to the original allottees and not to the GPA/ SPA cases.
57. Learned Senior Counsel referred to the form for challans of payment to contend that the mere fact that someone deposited the amount would not create any special equities in his favor if it was beyond the specified period of time and in that behalf referred to condition 2 of the same, which is as under :
"2. Payment of any amount without express permission of the competent authority after the cancellation of the allotment or after the date by which payment was due for any reason whatsoever hall not amount to condoning any default which may have been committed and shall be without prejudice to the rights of the Authority that may have accrued to it after cancellation of the allotment or after the date on which the payment was due."
58. Learned Senior Counsel submitted that in order to appreciate the contention of the respondent to fix the price at which the flat is to be sold to the allottees, reference be made to the provisions of Regulation 2(13) which defines the disposable price to mean such price as may be fixed by the Authority for such property. It was, thus, submitted that the Authority fixes the prices, which is the disposable price. The Authority is empowered to delegate any of its power to the Vice-Chairman in terms of Regulation 59 and in view thereof the Vice-Chairman was competent to do so. It is submitted that this aspect of delegation has also been dealt with in Premji Bhai Parmar's case (supra). It would be relevant to reproduce paras 16 and 17 of the said judgment, which deals with the issue as to how the power has been delegated to the Vice-Chairman to impose surcharge as a component of the disposable price of flats.
"16. The next contention is that Vice-Chairman had no authority to levy surcharge and that even if he has authorised the same it runs counter to the principle of fixing disposal price incorporated in Resolution No. 209 dated November 26, 1974. The Vice-Chairman is to be appointed by the Central Government as per Section 3(3)(b) of the Act. It appears that this Vice-Chairman is wholetime officer and will be the Chief Executive of the Authority. This becomes clear from Regulation 3 of the Regulations which provides as under:
"3. These regulations shall be administered by the Vice-Chairman, subject to general guidance and resolutions of the Authority, who may delegate his powers to any officer of the Authority."
Thus the Vice-Chairman, subject to general guidance and resolutions of the Authority, shall administer the regulations. He can delegate the functions to any officer of the Authority. Regulation 59 is important which reads as under:
"59. The Authority may delegate all or any of its powers under these regulations to the Vice-Chairman or to a wholetime member."
Armed with this power of delegation the Authority adopted Resolution No. 60 dated February 21, 1970 which reads as under:
"Resolved that the recommendation of the Committee be approved and all the powers of Delhi Development Authority be exercised by the Housing Committee and the Chairman, Delhi Development Authority be authorised to constitute the said committee, determine the organisational setup and take (sic) all efforts for implementing the housing and allied schemes."
Serious exception was taken to this crass abdication of its powers and functions by the Authority, the composition of the Authority as set out in Section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of Municipal Corporation of Delhi and representatives of Metropolitan Council as and when set up. Three other persons were to be nominated by Central Government of whom one shall be person with experience of planning. It is a high power body. Yet it completely abdicated its power and authority in-favor of Housing Committee. The Housing Committees will practically supplant the Authority. But the more objectionable part of Resolution No. 60 is that such Housing Committee which is to enjoy all powers and functions of the Authority was to be constituted by the Chairman at his sole discretion because he was authorised not only to constitute the Housing Committee but to determine organisational setup and then make all efforts for implementing the housing and allied schemes. It is really difficult to appreciate such wholesale abdication or delegation of powers by a statutory authority in favor of a Committee whose composition would be determined by one man, the Chairman. By a process of elimination the Housing Committee would supplant the Authority and the Chairman could constitute Housing Committee. Therefore/ the Chairman enjoyed a very wide discretionary power. Though Mr. Nariman did challenge the validity of Resolution No. 60, Mr. Chitale in cognate petition refrained from doing so. Once the power to delegate is given by the Regulations the challenge to validity on the ground of delegation must fail.
17. It is, however, necessary to examine the submission whether Vice-Chairman could have permitted levy of surcharge as a component of the price of flats in MIG scheme. In this connection it would be advantageous to refer to Resolution No. 200 dated June 18,1968, of the Authority by which the recommendations of the Standing Committee, inter alia, empowering the Vice-Chairman to approve forms of application as well as to fix the disposal and hire-purchase price were accepted. Resolution No. 209 is the one adopted by the Housing Committee. It takes note of the delegation of powers to fix disposal and hire purchase price of flats to the Vice-Chairman and further provides that if there is a marginal saving in any scheme the amount is always diverted to subsidies cost of Janata and CPS houses. It seems the Resolution is for information of the Housing Committee and the Housing Committee has merely resolved that the information be noted. The Resolution No. 200 of the Authority with Resolution No. 209 of the Housing Committee sets out clearly that the power to fix the disposal price was delegated to the Vice-Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with Section 59 clearly envisages such delegation of powers. It is, therefore, idle to contend that the Vice-Chairman had no authority to levy the surcharge as component of disposal price of flats."
59. Learned Senior Counsel strongly relied upon the judgment of the Supreme Court in Premji Bhai Parmar's case (supra) to contend that the same applied on all fours to the matters in issue in the present case since it was held that the collection of surcharge by DDA from a particular income group within a particular time for a particular scheme, project and area was not discriminatory and the price fixation fell within the discretion of the Executive. In the said case, the Supreme Court in respect of the issue of pricing observed as under:
"10. Pricing policy is an executive policy. If the Authority was set up for making available dwelling units at reasonable price to persons belonging to different income groups it would not be precluded from devising its own price formula for different income groups. If in so doing it uniformly collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract Article 14. People in the MIG can be charged more than the actual cost price so as to give benefit to allottees of flats in LIG, Janta and CPS. And yet record shows that those better off got flats comparatively cheaper to such flats in open market. It is a well recognised policy underlying tax law that the State has a wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a violation of Article 14. (See East India Tobacco Co. v. State of Andhra Pradesh, ).Can it be said that classification income-wise-cum-scheme-wise is unreasonable? The answer is a firm no. Even the petitioners could unto point out unequal treatment in same class. However, a feeble attempt was made to urge that allottees of flats in MIG scheme at Munirka which projects came up at or about the same time were not subjected to surcharge. This will be presently examined but aside from that, contention is that why within particular period, namely, November, 1976 to January, 1977 the policy of levying surcharge was resorted to and that in MIG schemes pertaining to period prior to November, 1976 and later April, 1977 no surcharge was levied. If a Certain pricing policy was adopted for a certain period and was uniformally applied to projects coming up during that period, it cannot be the foundation for submission why such policy , was not adopted earlier or abandoned later.
11. It was, however, said that levying of surcharge runs counter to objects for which the Authority was set up, namely, to make available housing accommodation on 'no profit no loss' basis. The argument proceeds on the assumption that the principle of 'no profit no loss' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat. Principle of 'no profit no loss' has been explained by the respondents. It is said that in the overall working, planning and execution of projects which the Authority undertakes as part of development of Delhi, the integral part of it being construction of flats for different income-groups the motives and working f it would not be profit oriented but would work on 'no profit no loss' economic doctrine. This would not for a moment suggest that the principle of 'no profit no loss' should apply either to every flat or to every scheme or to every piece of land developed by the Authority. It would be impossible for the Authority to function on such fragmented basis and such a policy statement has not been made by the Authority. Of course, some public statement appears to have been made that the overall working of the Authority is on 'no profit no loss' basis. Respondent No. 1 has been able to point out that the Authority's housing scheme as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time fiats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made. It is also shown that till Municipal authority takes over Municipal services the Authority spends for the same and incurs cost. Apart from the petitioners have been able to show that the authority is actuated by commercial profit oriented approach in its overall working.
12. It is, however, necessary to examine the contention whether this 'no profit no loss' policy statement has any statutory flavour as contended by Mr. Nariman. The regulations styled as the Delhi Development Authority (Management and. Disposal of Housing Estates) Regulations, 1968, ('Regulations' for short) are framed in exercise of the powers conferred by Section 57 and were laid before the House of Parliament as required by Section 58. Disposal price has been defined in Regulation 2(13) to mean in relation to a property such price as may be fixed by the Authority for such property. There is not the slightest or even a remote reference to 'no profit no loss' formula for determining the cost price. A quick survey of the Regulations do not spell out any formula for price determination on the basis of 'no profit no loss'. Whether the power to determine disposal price is in the Housing Committee will be presently examined. Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the Authority and as price has been fixed by the delegate of the Authority even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the Authority."
60. Learned Senior Counsel referred to Division Bench judgment of this Court in DDA Self-Finance Flat owners Society (Regd.) and Ors. v. Union of India and Ors., , which relied upon judgment of the Supreme Court in Delhi Development Authority v. Pushpendra Kumar Jain, . The Division Bench specially upheld the concept of DDA charging the petitioner more than the cost price of flats in order to generate funds to provide dwelling units to those who fell in lower income groups. The Division Bench observed as under:
"18. It appears to us that the basis on which enhanced cost has been demanded is not arbitrary, irrational, illogical or unreasonable. Even if the DDA were to charge the petitioners more than the cost price of the flats in order to generate funds to provide dwelling units to those who fall in lower income groups at a subsidised cost, no fault could be found with the same The Supreme Court in Premji Bhai's case (supra), dealing with the question of pricing held that where the Authority was set up for making available dwelling units to persons belonging to different income groups it would not be precluded from formulating its own price formula for different income groups. In doing so it could collect something more than cost price from those with higher incomes to benefit those who are in the lower income groups. In this regard, the Supreme Court held as follows:
"Pricing policy is an executive policy. If the Authority was set up for making available dwelling units at reasonable price to persons belonging to different income-groups it would not precluded from devising its own price formula for different income-groups. If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are ess fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract Article 14.
... ... ...
Respondent No. 1 has been able to point out that the Authority's housing scheme as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made. It is also shown that till Municipal Authority takes over Municipal services the Authority spends for the same and incurs cost. Apart from that petitioners have not been able to show that the Authority is actuated by commercial profit oriented approach in its overall working."
23. In this regard the Supreme Court in Bareilly Development Authority and Anr. v. Ajay Pal Singh and Ors., , held as follows:
"Thus the factual position in this case clearly and unambiguously reveals that the respondents after voluntarily accepting the conditions imposed by the BDA have entered into the realm of concluded contract pure and simple with the BDA and hence the respondents can only claim the right conferred upon them by the said contract and are bound by the terms of the contract unless some statute steps in and confers some special statutory obligations on the part of the BDA in the contractual field. In the case before us, the contract between the respondents and the BDA does not contain any statutory terms and/ or conditions."
... ... ...
" There is a line of decisions where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the Authorities to remedy abreach of contract pure and simple : Radhakrishna Agarwal v. State of Bihar, , Premji Bhai Parmar v. Delhi Development Authority, and D.F.O. v. Bishwanath Tea Company Ltd., ."
In view of the authoritative judicial pronouncements of this Court in the series of cases dealing with the scope of interference of a High Court while exercising its writ jurisdiction under Article 226 of the Constitution of India in cases of non-statutory concluded contracts like the one in hand, we are constrained to hold that the High Court in the present case has gone wrong in its finding that there is arbitrariness and unreasonableness on the part of the appellants herein in increasing the cost of the houses/ flats and the rate of monthly Installments and giving directions in the writ petitions as prayed for."
25. It appears to us that a Development Authority cannot arbitrarily increase the price of the dwelling units from the initial approximate cost envisaged at the launch of a housing scheme, but where the actual cost incurred by the Development Authority goes up during the execution of the project due to various factors, the Development Authority is not precluded from enhancing the price of the dwelling units. By this we should not be understood to mean that a Development Authority can only charge actual price incurred by it for construction of a dwelling unit. Besides the actual price it can also recover little more for subsidising the housing for the weaker sections of the society and for meeting its legitimate organisational expenses so that it does not depend upon tax-payers money for its survival."
61. Learned Senior Counsel also referred to Full Bench judgment of this Court in Smt. Sheelawanti and Anr.'s case (supra) where it was held that the pricing is not a one-time process and discussed meaning of the word 'cost'. In the said case, it was held that the word 'cost' was used in the sense of a price to be fixed. It was observed as under:
"24. In view of the terms and conditions (Clauses 13 & 14) in the brochure, it cannot be said that pricing is one-time process and the D.D.A. having fixed in the brochure some price could not revise it or that the nature or character of the scheme is engaged thereby. Obviously, it is a continuous process. Different sectors/colonies come into being at different times with continuous spiralling escalation in prices, the costing would naturally materially vary. It is true that housing accommodation is a vital requirement for a proper living and a city like Delhi, where State controls the land and regulate the development activities, the instrumentalities of the State, like the D.D.A., has a responsibility to act fairly and reasonably while fixing the price for sale of the land, houses or the flats belonging to it. However, it cannot be said that the D.D.A. is obliged to sell them at a price that may result in loss to it or at a price which does not contain any profit element. It has been held by the Supreme Court in Oil and Natural Gas Commission v. Association of Natural Gas Consumer Industries of Gujarat, that generation of some commercial profit to the public undertakings is not prohibited. Similar view has been expressed in Premji Bhai Parmar v. D.D.A., . In view of it, it cannot be said that taking into account of some profit element, if any, which the D.D.A. denies to have taken in account while fixing the price, per se, renders the price fixed as arbitrary or unreasonable.
25. Even otherwise, the Scheme itself contemplates varying rates depending upon the class to which an allottee belongs -- such as economically weaker section, Low Income Group or Middle Income Group. But, in each case, the consideration payable for the flat is referred to as the "cost", In other words, even to those who belong to the economically weaker sections, the consideration payable is called the "cost' of the flat. If the basic cost (i.e. the actual expenditure incurred by the DDA) is to be the "cost" for the flats then, the same rate should have been uniformally applied to all the classes of allottees. Admittedly, it is not so. Therefore, the word "cost" referred in the Scheme cannot be equated to the basic expenditure incurred by the DDA. The term has a wider significance and is used to convey the meaning of the term "price".
26. The Scheme uses the word "cost" at several places. But it is clear that it is used in the sense of a price to be fixed.
27. The new Lexicon, Webster's Dictionary of the English Language (1988 Edition) gives one of the meaning of the term "cost" as "the price paid or to be paid for something".
28. The Scheme itself has equated the "cost" to the word "price". Clause 13 gives the "likely cost of the flats" and thereafter says " the prices are indicative and do not represent the final cost". Again Clause 14 says "... the estimated prices mentioned in the brochure are illustrative ...".
62. Learned Senior Counsel submitted that the material date is the date of allotment. If at all the aspect of delay has to be considered, it can be the delay between the date of draw and the date of allotment. However, in the present case, there is no such delay. Learned Senior Counsel in this behalf referred to judgment of the Supreme Court in Pushpendra Kumar Jain's case (supra) where it was held that mere draw of lots would not confer any right(s) till communication of the letter of allotment and it is the price or rates prevalent on the date of such communication, which have to be made applicable. The Supreme Court, however, observed that communication of the allotment letter has to be done within a reasonable period.
63. Learned Senior Counsel then referred, to earlier judgment of this Court in R.K. Sachar's case (supra) to contend that there was no difference between the said case and the present one insofar as the issue of 20% surcharge is concerned. Learned senior Counsel submitted that all the aspects in judgments cited in the present case have, in fact, been discussed in R.K. Sachar's case (supra). In the said case, though the registrants were earlier registered under 1979 Scheme, they finally switched over to IX Self-Financing Scheme since they were not successful in the draw of lots under the earlier schemes. The 20% surcharge was upheld taking into consideration the observations of the Supreme Court in Premji Bhai Parmar's case (supra) and DDA Self-Finance Flat owners Society (Regd.)'s case (supra). It was, thus, submitted that the only plea on which the present case was sought to be distinguished was the fact that the petitioners were registered under earlier SFS(s) and the policy decision came later, but that would make no difference since it is the date of issuance of the allotment letter, which is material and a uniform policy in that behalf has been followed.
64. Learned Senior Counsel also referred to the fact that the Special Leave Petition (SLP) filed against the Full Bench judgment of this Court in Smt. Sheelawanti & Anr.'s case (supra) had, in fact, been dismissed. Not only this, reference to the Full Bench judgment in Smt. Sheelawanti and Anr.'s case (supra) arose out of judgment of this Court in Ashok Kumar Behal and Ors. v. U.O.I. and Ors., 52 (1993) DLT 153 against which this SLP was pending at the time when the judgment was rendered by Full Bench of this Court. The said case was decided by the Supreme Court in Delhi Development Authority v. Ashok Kumar Behal and Ors., 2002 (6) SCALE 20. The said case was disposed of in terms of judgment of this Court in Sheelawanti and Anr. 's case (supra) agreeing with the view expressed by Full Bench of this Court. The Supreme Court observed in para 19 as under:
"19. We put an end to the controversy by setting aside the impugned judgment and dispose of the writ petitions filed by the respondents in terms of the order passed by the Full Bench of the Delhi High Court in Sheelawanti and Ors. decided on 3rd February, 1995. We agree with the view expressed by the larger Bench in Sheelawanti and Ors. case (supra)."
65. Learned Senior Counsel also referred to judgment of the Supreme Court in Central Inland Water Transport Corporation Ltd.'s case (supra) referred to by Mr. Maninder Singh, Advocate for the petitioners and submitted that, in fact, the said judgment supports the stand of DDA. Learned Senior Counsel submitted that there is no Fundamental Right to get free shelter, but the object of 20% surcharge is to provide subsidised housing to the economically weaker section and persons affected by unrest. It was, thus, contended that a social object was sought to be fulfillled. Further no plea of promissory estoppel could be raised against the respondent DDA in the teeth of the clause for escalation in the terms and conditions of allotment as also by reason of the provisions contained in the said Regulations.
66. Learned Senior Counsel further referred to the policy regarding change of localities/floors dated 15.3.1993 whereby it was resolved that the ban on change of location under SFS imposed in terms of the Resolution of the Authority No. 108 of 1992 would continue and would be extended to all schemes. However, the Lieutenant Governor/Chairman of DDA was given the discretion to permit change of floor at the same location in suitable cases subject to availability of flat and production of certificate from a Government hospital/recognised hospital establishing the allottee or member of his family suffered from blindness or physical handicapped of an orthopaedic nature where lower limbs are affected or in case a serious heart condition or if any member of the family, as aforesaid, was more that 70 years of age. Learned Senior Counsel also referred to the Resolution dealing with the calculation of revised cost in respect of left-out flats dated 9.7.1990 in terms whereof it was resolved the cost of left-out flats would be worked out at current cost formula and a depreciation @ 1% p.a. be allowed thereon. This Resolution was referred to subsequently in Resolution No. 103 of 13.9.1991 dealing with the issue of price of flats in cases where change is allowed on the request of allottee and it was decided that the allottee is liable to pay the updated cost of the subsequent flat on revised land charges and current building cost. It may, however, be noted at this stage that in none of these cases was the allottee ever put to specific notice, but the stand of the respondent is that the Resolution itself amounted to a notice to the allottees. Not only this, the flats in the present case are not ones which remained vacant for six months as per Resolution No. 51 dated 9.7.1990. Learned Senior Counsel submitted that the surcharge imposed is actually part of the disposable cost in terms of Regulation 2(13), which had to be fixed by the Authority and the final demand included increase in cost on account of the surcharge. The inclusion of the surcharge in the price was, thus, in conformity with the law laid down in Premji Bhai Parmar's case (supra) and R.K. Sachar's case (supra).
67. Learned Senior Counsel sought to rebut the submissions advanced on behalf of the petitioners that the imposition of surcharge on the existing schemes would imply retrospective application of the policy. Learned Senior Counsel submitted that there was only a prospective application of the policy. However, it was applied uniformally to all cases where demand letters were issued after the said date. Since the cost aspect crystallized only on issuance of the allotment letter in terms of Pushpendra Kumar Jain's case (supra), that would be the relevant date for application of the policy. Admittedly, the final demand letter was issued later on and there is no question of working out of the final disposable cost prior to the said date. In this behalf, it was also submitted that the terms and conditions themselves prescribed that it would be the cost according to formula in vogue when the fifth and final demand-cum-allotment letter was issued and the costing formula as on that date included the 20% surcharge. The meaning of the word 'cost' and 'price' has been explained in Smt. Sheelawanti and Anr. 's case (supra) as quoted above and, thus, the cost would mean the price so arrived at. Learned Senior Counsel relied upon Division Bench judgment of this Court in K. Bhattacharjee v. DDA, to advance the contention that it is not for the allottee to choose when to deposit the amount and the payment has to be deposited in terms of the Installment stipulated. The corresponding obligation of DDA to hand over the flat in appropriate condition would arise thereafter.
68. Learned Senior Counsel also referred to judgment of the Division Bench of this Court in J.P. Gupta v. D.D.A., where it was held that in view of the Full Bench judgment of this Court in Smt. Sheelawanti and Anr.'s case (supra), jurisdiction of the Court under Article 226 of the Constitution should not be exercised in respect of the disputes regarding pricing of flat and land rate to be charged.
69. In the end, learned Senior Counsel submitted that he has instructions to make certain concessions, which are as under :
(i) In cases of cancellation and restoration, the restoration charges would be for each cancellation and not each default and this aspect can be remedied. This arose on account of the fact that if there were defaults in payment of more than one Installment, restoration charges were being levied for each of the defaulted Installment;
(ii) Cases where there were inordinate delay in issuance of allotment letters would be examined. This would arise in cases where after restoration also, there was considerable delay in issuance of allotment letters up to almost 31/2 years;
(iii) In case any allottee was willing to change over from South Delhi to any other area, the same would be permitted and the allotment in areas other than South Delhi would be as per old cost plus interest; and
(iv) For a case of change of floor, the policy decision of 13.9.1991 would continue to apply of charging current cost of land and construction. It may be noted that this is really not a concession as this was the stand of DDA even during submissions.
70. The method of costing would imply old cost plus 18% p.a. interest or current cost plus 10% p.a. interest. This was to balance the aspect arising from the problem that since the current land rates were taken into consideration, there could not be duplication of charges. Current cost would imply current land cost plus earlier cost of construction with interest. Old cost would imply old cost of land and old cost of construction with interest. Thus, once the current cost of land was taken, interest element cannot be charged to the extent that the current cost includes current cost of land element. It is to balance this element that the differential of interest rate of 10% p.a. and 18% p.a. exist. A comparative chart has been given showing the basis for costing, which is as under:
S.No. Element/Component of Cost For Old Cost + Interest For Current Cost
1.
Interest on 4 Installments @ 18% p.a. simple @ 10% p.a. simple (API)
2. Cost of Construction Actual expenditure incurred on construction Actual expenditure incurred on construction
3. Land Premium At the rates prevalent on the date of allocation At the rates prevalent on the date of allotment
4. Surcharge @ 20% On cost of construction + land premium + API, if any On cost of construction + land premium + API, if any
71. In rebuttal, learned Counsels for the petitioners submitted that the very concept of cost of SFS flat is different as earlier an allocation letter is issued when rights and duties accrue even though no specific flat has been allotted. There is participatory financing. There cannot be inclusion of a new component in view of the observations of the Supreme Court in P.N. Verma 's case (supra) and in case any adverse effect has to flow to the allottees, they have to be put to notice of the proposed alteration and their consent obtained. The tentative cost calculation never included surcharge and this was a new element sought to be included. It was submitted that the object of 20% surcharge was also in view of discount in the Expandable Housing Scheme on lumpsum payments and if at all such a surcharge could be imposed, it could only be on schemes which came into force after the policy decision. The decision was only a business decision to encourage cash down payment, which had no rationale or connection with the object of providing housing to a particular category. Learned Counsels submitted that the current cost had three elements -- (i) current land cost; (ii) interest on four Installments; and (iii) restoration charges. It was submitted that the estimated cost was worked out both on the basis of cost of land and cost of construction. Thus, the current cost included the element of interest on the earlier cost of land apart from charging current land cost and the mere differential in interest between 18% p.a. and 10% p.a. given as a concession/statement by learned Senior Counsel for the respondent, cannot balance this amount. Insofar as restoration charges are concerned, it is25% of the registration amount and now statement had been given by learned Senior Counsel for the respondent that the same would be charged only once.
72. It was forcibly contended by learned Counsels for the petitioners that the principle of current cost being charged was implemented in a discriminatory manner only in respect of South Delhi colonies while other colonies continued to be governed by the principle of old cost plus interest. It was submitted that this could not be done considering that it was only one scheme, which was in question and there could not be any discrimination under the same scheme. The draw was also one insofar as the chance of allotment was concerned and it was a pure chance that some persons got the allotment in South Delhi. Thus, it was submitted that there could not be two principles applied for so-called defaulters under the same scheme, especially when there was no particular basis for allotment in South Delhi other than a matter of chance in the draw of lots.
73. It was also submitted that there was no answer to the delay of almost three and a half years in issuance of the allotment letter after the draw was held in certain cases, especially CWP No. 2833/2003. It may, however, be noted that these are cases which the respondent has expressed the willingness to re-examine.
74. Mr. Maninder Singh, learned Counsel in facts of his case specifically submitted that there was no restoration or intimation of current cost as the respondent had realised their mistake. Not only this, allegations had been made in the petition, which have gone materially unrebutted dealing with the issue of scam in cases of such allotments of SFS flats.
75. Learned Counsel further submitted that the surcharge is really in the nature of a tax or cess and not a fee and it must have sanction in terms of Article 265 of the Constitution. Learned Counsel referred to judgment of the Supreme Court in Ahmedabad Urban Development Authority v. Sharad kumar Jayanti kumar Pasawalla and Ors., where the development fee levied was held to be ultra vires the Gujarat Town Planning and Urban Development Act, 1976 and it was held that fiscal provisions must be based on specific statutory provisions and not any implied, incidental or ancillary authority. Though the object of the fee was for augmenting the revenue for development work, it was held that a delegate authority cannot impose a tax or fee in the absence of express provision.
76. Learned Counsel also referred to recent judgment of the Supreme Court in Hindustan Times and Ors. v. State of U.P. and Anr., dealing with the issue of Executive instructions issued by the State Government relating to pension and social security scheme for full-time Journalists. An Executive order issued by the State Government under Article 162 of the Constitution directing deduction of an amount of 5% from the bills payable to newspapers having circulation of more than 25000 copies for publication of Government advertisement for the pension scheme was held as invalid even though it was a welfare impost. This was in view of the absence of any employer - employee relationship between the contributor newspaper and the beneficiaries under the schemes and in the absence of any specific provision of law authorising such compulsory imposition. In the said case, the Supreme Court observed as under:
"26. The term "taxation" has been defined in Article 366(28) of the Constitution of India in the following terms :
"366(28) 'taxation' includes the imposition of any tax or impost, whether general or local or special, and "tax' shall be construed accordingly;"
27. The impost by reason of the impugned orders may come within the purview of the aforesaid definition. See Corporation of Calcutta v. Liberty Cinema, Hoechst Pharmaceuticals Ltd. v. State of Bihar and Gasket Radiators (P) Ltd. v. ESI Corporation. The question which is required to be posed and answered is as to whether the petitioners herein can be directed to bear the burden although they have no statutory liability in this behalf.
28. We may at this juncture notice that a Constitution Bench of this Court in Koluthara Exports Lt. v. State of Kerala has observed that even if a State in exercise of its legislative power under Entry 23 List III of the Seventh Schedule of the Constitution of India can make a welfare legislation, yet the burden of impost cannot be placed upon a person who is neither a member of the society nor the employer of a person who is a member of such society. It was held that: (SCC p. 466, Para 18) "There can be no doubt that Entry 23 enables the State Legislature of enact a law in respect of social security and social insurance or dealing with employment and unemployment. The provisions of Sub-section (4) of Section 3 of the Act (quoted above) postulate social security and welfare measures of the fishermen. The State can, therefore, justify its competence under this entry. But, in our view, the State cannot, in an Act under Entry 23 of List III, place the burden of an impost by way of contribution for giving effect to the Act and the Scheme made there under for the social security and social welfare of a section of society upon a person who is not a member of such section of society nor an employer of a person who is a member of such section of society. The burden of the impost may be placed only when there exists the relationship of employer and employee between the contributor and the beneficiary of the provisions of the Act and the scheme made there under."
29. The burden of the impost, thus, can be placed only when there exists relationship of employer and employee between the contributor and the beneficiary of the provisions of the Scheme. In the instant case also, no such relationship exists.
30. In any event, the State cannot make any compulsory exaction from any citizen unless there exists a specific provision of law operating in the field. In relation to a compulsory payment, it is well settled, there is no room for any intendment."
... ... ... ...
39. The respondents being a State, cannot in view of the equality doctrine contained in Article 14 of the Constitution of India, resort to the theory of "take it or leave it". The bargaining power of the State and the newspapers in matters of release of advertisements in unequal. Any unjust condition thrust upon the petitioners by the State in such matters, in our considered opinion would attract the wrath of Article 14 of the Constitution of India as also Section 23 of the Indian Contract Act. See Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly and Delhi Transport Corporation v. D.T.C. Mazdoor Congress. It is trite that the State in all its activities must not act arbitrarily. Equity and good conscience should be at the core of all governmental functions. It is now well settled that every executive action which operates to the prejudice of any person must have the sanction of law. The executive cannot interfere with the rights and liabilities of any person unless the legality thereof is supportable in any Court of law. The impugned action of the State does not fulfill the aforementioned criteria."
It was submitted that in view of the aforesaid judgment unless there was something being given in return, the same would amount to a taxation or a levy without any authority of law.
77. I have considered the elaborate submissions advanced at the Bar by learned Counsel for the parties as also ramification of the various judgments referred to.
78. The first aspect to be considered is the challenge to imposition of 20% surcharge in respect of South Delhi flats. One of the contentions advanced by learned Counsel for the petitioners was that while considering this issue earlier in R.K. Sachar's case (supra), certain aspects in law and judgments of the Supreme Court were not brought to notice of this Court. The submission, thus, was that there were a number of aspects, which were not even agitated before this Court in the said case and, thus, the sub silentio principle would apply. In this behalf, the judgments of the Supreme Court in Gurnam Kaur's case (supra) and Synthetics and Chemicals Ltd.'s case (supra) were referred to.
79. In my considered view, there can be really no dispute on the principle of law especially in view of enunciation of the same by the Supreme Court. If certain matters are not raised resulting in a judgment, which has not considered all the ramifications in law in view of the absence of those aspects being agitated, it is open to the Court to look into those aspects for determination of the controversy in question.
80. The challenge to this 20% surcharge is based on the principle that there is no authority in law to impose the same and in the absence of it, the same cannot be sustained, however laudable object may be. The Supreme Court has observed in I.I.T.T. College of Engineering's case (supra) about the requirement of a provision before the Administrator could be appointed. While dealing with the issue of exaction in Hindustan Times's case (supra), the Supreme Court was of the considered view that there cannot be any compulsory exaction, unless there exists a specific provision of law operating in the field. The case was one where a deduction was being made out of the bills of a certain percentage in the nature of a taxation. A number of judgments were referred to in this behalf, but it is not necessary to go further into details of this aspect in view of the fact that there cannot be any dispute about the proposition that there cannot be any taxation or cess except by authority of law.
81. The question, however, is as to whether the surcharge of 20% can be stated to be in the nature of a taxation or cess?
82. The nature of the 20% surcharge was considered in R.K. Sachar's case (supra) as also the object for the same. This surcharge has been included as a component of the price of the flat and there is no real dispute about the laudatory object of the surcharge. The proposal to impose this 20% surcharge was approved by the Lieutenant Governor on 12.7.1996. This fact is noted in the office order dated 16.8.1996. The surcharge was imposed for all the South Delhi flats and was not restricted to the persons who had defaulted in payment and whose flats were subsequently restored. Insofar as the authority to impose the surcharge is concerned, the same was discussed in judgment of the Supreme Court in Premji Bhai Parmar's case (supra). The authority of the Vice-Chairman to levy a surcharge was considered by reference to various resolutions and provisions and it was held that such a surcharge could be imposed. Not only this, it was held in the said judgment that the collection of a surcharge from a particular income group within a particular time for a particular scheme, project and area was not discriminatory and such price fixation fell within the discretion of the Executive.
83. The surcharge is really not a taxation or a levy, but is a component in calculation of price of the flat. In SFS, the participants are contributors during the process of construction. However, this does not imply that in such a participatory financing, there can be no element of some profit for DDA. The surcharge is really in the nature of an extra profit, but with a special object in mind. The object is to benefit the weaker and poorer sections and those persons who have been affected by unrest in Punjab and Jammu & Kashmir. This aspect has been elucidated in paras 10 to 12 of the judgment in Premji Bhai Parmar's case (supra).
84. The matter was once again discussed by Division Bench of this Court in DDA Self-Finance Flat owners Society (Regd.)'s case (supra), which relied upon judgment of the Supreme Court in Pushpendra Kitmar Jain's case (supra). It was held that even if DDA was to charge the petitioners more than the cost of the flats in order to generate funds to provide dwelling units to those who fall in the lower income groups at a subsidized cost, no fault can be found with the same. Thus, the surcharge is really a part of the pricing policy rather than a tax or a levy.
85. The issue regarding as to what is the price of the flat and the significance of the word 'cost' used in the brochure and the allotment letters was discussed in the Full Bench judgment of this Court in Sheelawanti and Anr.'s case (supra). The word 'cost' was held not to be capable of being equated to the basic expenditure incurred by DDA and was held to have a wider significance and to convey the meaning of the term 'price'. The Special Leave Petition against this judgment was dismissed. Not only this, reference to the Full Bench judgment arose out of judgment of this Court in Ashok Kumar Behl's case (supra) and while dismissing the appeal against the said judgment, the Supreme Court in DDA v. Ashok Kumar Behal's case (supra) reinforced the conclusions arrived at by the Full Bench of this Court in Smt. Sheelawanti and Anr.'s case (supra).
86. The other aspect of challenge to the surcharge arises from the plea raised on behalf of the petitioners that this surcharge cannot be made applicable retrospectively. This is based on the contention that once a scheme has been propounded/ charges existing as on that date can only be included. This issue is dependent on the rival contention as to whether the rights can be said to have matured on the date when the allottee was registered under the scheme or on allocation letter being issued as compared to the alternative plea that the rights crystallized only on issuance of the allotment letter. If the date of issuance of the allotment letter is the relevant date, undisputedly the surcharge had come into force by that date and then, there would be no issue of retrospective application of this surcharge as a component of the price of the flat.
87. The Supreme Court in Pushpendra Kumar Jain's case (supra) categorically stated that rights of the allottee vest only on the allotment letter being issued. In fact, the Supreme Court went as far as to state that even holding of the draw of lots would not give any right so long as there is no inordinate delay in issuance of the allotment letter.
88. In view of these clear observations, it can hardly be said that the rights crystallized prior to issuance of the allotment letter. The allocation letter only allocates a flat to an allottee, which implies that the allottee will get a flat in a particular zone and area. The specific flat is allotted only when the allotment letter is issued. It is only on issuance of this allotment letter that the rights of the allottee get crystallized. The 20% surcharge has been made applicable only in respect of allotment letters issued after the said date and, thus, there is no retrospective application of the surcharge. The registrants under the SFSs were very large in number. There has also been some delay in construction of the flats. However, the same itself provides for compensation for such delay by providing for interest payment to the allottee in case of failure to make the allotment of a specific flat. Thus, an allottee has been compensated when there has been such delay.
89. I am unable to accept the contention that merely because the construction may have got completed at an earlier date, if there was no delay and in such a case, the policy of surcharge would not have come into force would imply that such a surcharge cannot be imposed where there is delay in the construction.
90. The fact that the aspect of 20% surcharge also finds mention in the Item No. 105 dated 27.8.1996 while dealing with the issue of encouraging cash down payment as compared to hire-purchase will again not make a difference because the imposition of surcharge was not in pursuance to that circular, but the decision had been taken with the approval of Lieutenant Governor earlier to the same on 12.7.1996 and has been made applicable to all cases of South Delhi vide office order dated 16.8.1996 w.e.f. 22.8.1996 on approval by Vice-Chairman, DDA.
91. Learned Counsel for the petitioners laid great emphasis on the Division Bench judgment of this Court in P.N. Verma's case(supra),which dealt with the cases of SFS flats. The Division Bench held that there could not be revision of policy of price fixation, which is a pre-contractual stage and the formula must remain the same. The Division Bench took note of the judgment of the Supreme Court in Premji Bhai Parmar's case (supra). However, in this behalf, the terms of the scheme have to be considered where specific provision has been made reserving the right to alter any of the terms.
92. There is force in the contention of learned Counsel for the petitioners to the extent that this clause cannot give a blanket power to introduce extraneous material and it has to be read along with the other clauses. It is only if this clause were to be construed to give a blanket power, then the issue of there being an unconscionable contract would arise. Learned Counsel for the petitioners did not dispute the proposition that it is always open to the Court to read down the clause. In my considered view, this is what should be done; the clause must relate to the matters referred to in the brochure and within the same broad parameters.
93. There is also no doubt that the respondent must act in accordance with the said Regulations. However, the scheme makes it clear that the provisions made therein would apply as also of the said Regulations. The important aspect is that the issue of there being something added to the actual cost to come to the cost within the meaning of documents issued by the respondent (which is actually the price) in respect of SFS form subject matter of adjudication in the case of DDA Self-Finance Flat owners Society (Regd.)'s case (supra). It is in this context that the Division Bench came to the conclusion that something more can be recovered than the actual amount spent by the respondent for subsidized housing of other categories.
94. In my considered view, it is not really open to the petitioners to agitate the aforesaid issue in view of the Division Bench judgment of this Court in DDA Self-Finance Flat owners Society (Regd.)'s case (supra).
95. In this behalf, I find also force in the contention of learned Senior Counsel for the respondent by reference to Clause 4 of the allocation letter, which stipulated that the differential between the estimated cost and the cost "as it works out on the completion as per costing formula in vogue" would have to be paid at the time of fifth and final Installment. Undoubtedly, at the stage of issuance of the allotment letter, the costing formula included this 20% surcharge.
96. I am, thus, of the considered view that there is no illegality in the imposition of 20% surcharge and inclusion of the same as part of the cost and/or price of the flat.
97. The second aspect, which arises for consideration in these matters, is the imposition of the formula of current cost by DDA in certain eventualities. The first such eventuality is where there has been delay in payment of Installments.
98. The allocation letter provided for payment of four Installments on the tentative and estimated cost of the flat. This was to the tune of 90% of such estimated cost. The concept was participatory financing and instead of DDA constructing the flats by utilization of its funds and thereafter recovering the price, funds were to be provided from time to time by the successful allocatees towards construction cost.
99. It is another matter that the ultimate cost was much more than the estimated cost and, thus, the contribution was not really 90%. That is, however, for no fault of the allottees. However, a number of such persons did not make payments within time and paid belatedly. There is also no doubt that in a number of cases, there was a sale of the allocation letter and the successors deposited the Installments belatedly having purchased the allocation letter after the payment of Installments had expired. The allocation letter itself contained the consequences of not making payment. In case of delay in making payment up to a maximum period of 90 days, interest was chargeable, but thereafter there was automatic cancellation of the flat. There can be really no grievance in respect of this procedure, since once the allottee fails to contribute and participate in financing of the flat, he must suffer the consequences. There was, however, provision that such cancellation could be revoked and the registration restored on payment of dues with interest along with cancellation and registration/restoration charges and also subject to availability of the allocated flat(s). The provision for charging of cancellation and registration/ restoration charges was for each cancellation. Thus, where a person defaulted in more than one Installment, each such default was charged with the cancellation amount.
100. The grievance in respect of the provision for charging of cancellation and registration/restoration charges really does not survive for consideration in view of the concessions made by learned Senior Counsel for the respondent on instructions to the effect that insofar as the cancellation and restoration charges are concerned, they would be charged for each cancellation and not for each default.
101. The grievance of the petitioners is that while the earlier policy followed in this behalf was for restoration of the allocation subject to payment of interest, this methodology was sought to be changed in the case of the petitioners. This arose on account of certain circulars issued by the respondent DDA whereby a segregation was made in respect of South Delhi flats. This particular formula was made applicable only to the said flats and not to the defaulters in other areas though falling under the same scheme. The policy decision came into force on 22.08.1996 when the office order dated 16.8.1996 was approved by the Vice-Chairman, DDA. However, this was made applicable only in cases in which the demanded amount by DDA was received after the said date of 22.8.1996 and the delay was regularised. This was in terms of the office order dated 31.3.1999. This was further clarified by the office order of 22.3.2001 to state that the benefit of earlier policy granted to persons who had paid all four Installments prior to 22.8.1996 would be available only to the original allottees and not to GPA/SPA cases. The policy decision, in fact, stipulates that it is the higher of the two charges to be charged, i.e., old cost plus interest or current cost. In this behalf, learned Counsel for the petitioners submitted that the very concept of restoration means to put the person back in the original position and the allocation letter itself provided the requirements for such restoration. Thus, such restoration took place where the requirements were fulfillled and the basis of costing can only be to charge interest on the unpaid amounts for the period of delay.
102. Learned Counsel for the petitioners further stated that if the payment dates are taken with reference to the process of construction, in a number of cases, it will be found that the payment was made well before he relevant date if the period was worked backwards from the date of completion of construction. However, I may state at this stage that this plea cannot be accepted since the payment has been made in terms of the allocation letter or the re-scheduled Installments. If there is delay in handing over possession, it may have other consequences.
103. The defense of the respondent in this behalf is the clause, which permits the respondent to alter any of the terms and conditions in its discretion. However, as stated above, this clause has to be read down as otherwise this clause would be hit as being unconscionable under Section 23 of the Contract Act. The consequences of non-payment having already been provided for, in my considered view, the respondent DDA was bound to adhere to the same. If a person has not participated in financing, there is automatic cancellation; but once the respondent authority restores the allocation, it must be on the terms and conditions, which require payment of interest and subject to availability of flats. There is no case made out that there was no availability of flats.
104. The fact that some of the persons got the allocation in South Delhi and some others in different parts of Delhi was a pure matter of chance. The DDA did not propound a separate scheme for South Delhi. If the DDA was of the view that in view of the land in South Delhi being more valuable, there should have been separate registration for the same and provisions should have been made in that behalf. All the registrants were under the same scheme.
105. Is it really open to the respondent Authority to differentiate in the matter of restoration between registrants in different parts of Delhi under the same scheme when their allocation in the particular area was a matter of chance? In my considered view, answer to this question would be in the negative. This must be distinguished from a matter of inclusion in prices of a particular element as the case of 20% surcharge, which is a matter of price determination with a particular object. In the present case, there appears to be no object at all. The only basis is that the flats in South Delhi are more valuable and, thus, DDA should make a greater profit from the same. It is not disputed that it is open to the respondent to make some profit, but that is not the sole object of DDA, and that too without any particular social object in mind. The party is penalised for delay in making payment of Installments by charging of high interest rates. The office orders starting with the office order of 16.8.1996, 5.11.1998, 31.3.1999 and 23.1.2001, all deal with the same aspect. The last circular deals with not giving the benefit to South Delhi allocatees, who are power of attorney transaction holders. There are power of attorney transaction holders even in other areas and there is no doubt that the same is in violation of the terms of allocation. However, DDA itself has regularised the whole thing by repeatedly coming out with policies for conversion to freehold recognising the concept of power of attorney transaction, but subject to payment of 1 /3rd extra surcharges. In any case, if in a particular case, there is inordinate delay and the power of attorney holder had come into the picture at the last moment, it was open to the DDA to have refused restoration for cogent reasons to be recorded.
106. The allocation letter or the terms and conditions never specified that defaulters in different areas would be treated differently. The offer made by learned Senior Counsel for the respondent as concession that the allottees can be permitted allotment in other areas, if they so opt, at old cost plus interest is not a solution to the problem. This aspect has to be also considered keeping in mind the very basis on which the allocation letter was issued. The allocation letter gave 90% of the estimated cost and four Installments to be paid. The estimated cost included both the components, i.e., cost of land and cost of construction. Thus, when the restoration is made on payment of interest, the interest is charged on both the components which form part of the estimated cost. In the formula applied by the respondent being the current cost, there is a breakup between the mode of calculation of these two components. The cost of construction is taken on the same basis as in the earlier formula, but the land premium is taken on the date of allotment. Thus, in this formula by charging the actual period interest on the Installments, interest has already been charged on the element of the cost of land included as a part of the component of cost at the stage of issuance of the allocation letter, yet current cost of land is also sought to be charged. Thus, there is element of dual charging. This is sought to be compensated by the respondent on the basis that the interest on Installment charged as per the formula of old cost plus interest is 18% p.a., while at the current cost is only 10% p.a. In my considered view, this has no rationale nor does it balance the two aspects.
107. In fact, the observations of the Supreme Court in Premji Ehai Parmar's case (supra) that there should be uniform application of a policy would apply in this case. The residuary clause of the scheme cannot be utilised to change the basis of restoration when the methodology of restoration and charges for the same are provided in the allocation letter and the scheme itself. There is also no rationale behind this difference in the methodology of costing for restoration other than the claim that South Delhi flats are more valuable. I am, thus, of the considered view that the formula of current cost made applicable only to the defaulters of South Delhi cannot be sustained and is hereby quashed. The cost has to be arrived at on the basis of the formula of restoration of old cost plus interest and the same principle should apply to South Delhi area as applicable for restoration in other areas.
108. It may also be noticed that after the relevant date, all the South Delhi allottees, irrespective of being a defaulter or not, are as it is paying the 20% surcharge as part of the pricing formula to give some profit to the respondent DDA to be utilised for social objects.
109. Insofar as the issue of delay in sending the demand letters and change of locality are concerned, in view of quashing of the principle of current cost, this matter need not be looked into further. However, it has to be noticed that undoubtedly in Sheikh Sarai, there has been undue delay in delivery of possession much after the fifth and final demand letter was issued. If the flats are not ready for delivery, DDA has been shifting forward the dates for payment of Installments. This was apparently not done properly in the case of Sheikh Sarai with the result that fifth demand letter was issued much prior to the date for delivery of possession.
110. In my considered view, the respondent DDA was duty-bound to have delayed the requirement of payment of Installments in case it was not in a position to hand over possession of the flats.
111. Another aspect in this behalf, which arises where there has been inordinate delay in issuance of allotment letters even after restoration. It has been illustrated that in some cases there has been delay of as much as 2 to 31/2 years. There can be no reason for this delay nor can the allottee be burdened with the cost and consequences thereof. Learned Senior Counsel for the respondent on instructions has himself stated that these are the cases which will have to be re-looked into and the costing re-worked out. It is, thus, directed that the needful be accordingly done.
112. Another category of costing cases arise where there has been a request for change of floors. The circular of 9.7.1990 was referred to in this behalf. However, the said circular is applicable only in respect of costing of left out flats and no case has been made out that the present flats allotted are in the said category. The resolution dated 13.9.1991 was also referred to in this behalf in view of the fact that the revised land rates had come into force from 6.12.1990. The revised land rates were made applicable in cases of change of floors at request of the alltotees. Further no interest on their deposit against the earlier flat was to be allowed, which was being done earlier. Admittedly, other than issuance of these circulars, nothing was done to put the allottees to notice that in cases of change of floors, such new pricing system would come in vogue.
113. In fact, a reference was made to the policy dated 15.31993 resolving the ban on change of location under SFS(s) in terms of resolution No. 108 of 1992 to continue giving discretion to the Lieutenant Governor/Chairman of DDA to permit change of floor in suitable cases. The suitable cases were also further explained and qualified, which were cases of handicapped persons with certain disabilities or elderly family members.
114. I fail to appreciate how mere change of floor can result in the current cost being charged in the same area. There was a ban on change of floor. It was only in medical cases or of old persons that this change could be permitted taking into consideration the bonafide and suit abilities for the requirement of such change. Once the change was permitted, it has to be assumed that the same was after due scrutiny and based on the said parameters. If that be the position, the only charge which could have been levied was the differential in the price which would have been applicable as a consequence of the change of floor and based on the price of the ground floor for successful allocatees of such floor. An important aspect, which has to be considered, is that at the stage of such change of allocation, the allottees were never informed of this consequence. The mere passing of a resolution in the records of DDA cannot be said to be a notice to such allottees. Thus, the allottees may or may or not have accepted to change the floor if they had known that the consequences would have been so harsh.
115. This is apart from the fact that there seems to be no basis for such a policy. The policy, thus, requiring current cost to be charged in cases of change of floor is also hereby quashed.
116. The writ petitions are allowed in the aforesaid terms and the respondents are directed to re-work out the cost and issue fresh demand letters to the petitioners within a period of three months from today.
117. Parties are left to bear their own costs.