Delhi High Court
Federation Of Co-Operative G/H Society ... vs Union Of India And Ors. on 31 March, 1993
Equivalent citations: 1993(26)DRJ156
Author: B.N. Kirpal
Bench: B.N. Kirpal
JUDGMENT B.N. Kirpal, J.
(1) The challenge in this bunch of writ petitions, filed by different Cooperative Group Housing Societies is to the fixation of pre-determined rates of land for the "Dwarka" Project and to the validity of Rule 41A of the Delhi Co-operative Societies Rules.
(2) Dwarka Project has been conceived and undertaken by the Delhi Development Authority (hereinafter referred to as the DDA) to accommodate a population of about 1.1 million people..Dwarka, which is also called Papankalan is situated in the vicinity of Indira Gandhi International Airport. The total area of the scheme is 5648 Hectares, out of which 1862 Hectares is proposed to be developed in Phase-1 and 2098 Hectares in Phase-11. The balance area of 1688 Hectares is already a built up area comprising of regularised/un-authorised colonies being maintained by the Municipal Corporation of Delhi (MCD).
(3) CO-OPERATIVE Group'Housing Societies including the petitioners, after registration with the Registrar of Cooperative Societies, Delhi had applied, and got themselves registered with the Dda for allotment of land.
(4) The present case relates to three different categories of Cooperative Societies. In the first category are those Cooperative Societies who had been registered, for allotment of land, with the Dda, prior to 1983, the second category is of those who were registered in the year 1983 and were issued letters of allotment of land in the year 1990, while the third category consists of those Cooperative Group Housing Societies who had also registered themselves with the Dda in 1983 but in whose favor allotment letters were issued only in October/November, 1992, demanding payment at the pre-determined rate of Rs-1650.65 per sq. metre.
(5) In Civil Writ Petition No-4184/92 and the petitioners in C.writs 767/93, 4396/92, 4440/92 are the Cooperative Group Housing Societies who were registered with the Dda for allotment of land before 1983. On 16th July, 1983 the Registrar Co-operative Societies, who had frozen fresh registration of Co-operative Group Housing Societies, 158 issued public notice re-opening registration of new Cooperative Group Housing Societies. This registration was open for a limited period of time and during this period 1406 new societies were registered.
(6) The Registrar of Cooperative Societies, Delhi called upon these newly registered Housing Societies to complete all codal formalities so that their names could be forwarded by him to the Dda for allotment of land. The Group Housing Societies were required to submit documents such as list of members etc. which they did. The lists so submitted by the societies were approved by the Registrar, Cooperative Societies at various points of time. Some of the lists which were received earlier were, infact, approved later and vice versa. The Government of India on 20th January, 1990 issued Office Memorandum containing guidelines regarding the procedure for allotment of land. These guidelines, inter alia, provided that the date of seniority for allotment of land for Cooperative Group Housing Societies will be the date on which the papers of the society were found to be in order and approved by the Office of the Registrar, Co-operative Societies, Delhi Administration.
(7) On the basis of the said Memorandum a seniority list of the Societies was prepared by the Registrar, Cooperative Societies, the seniority being determined by the date of approval of the final list of members. The Registrar, Cooperative Societies prepared a seniority list of approximately 409 Cooperative Group Housing Societies and a draw of lots took place on 17th January, 1991 for allotting land amongst the first 260 societies in the project "Dwarka" for which land had been given by the Central Government to the Dda for development and allotment.
(8) The aforesaid Memorandum dated 20th Janaury,1990, containing the guidelines for the preparation of the seniority list of the Cooperative Group Housing Societies, was challenged in a number of writ petitions which were filed in this Court, the main writ petition being that of Kaveri Cooperative Group Housing Society Ltd. v. Union of India & Others, (Civil Writ Petition No.2885/90). The primary contention of the petitioners in that case was that the seniority list should be prepared according to the date of registration of the societies and not according to the date when the list of members was finalised and approved by the Registrar. Some of these writ petitions were filed before the draw was held on 17th January, 1991 and allotment letters issued. In some of the allotment letters it was, inter alia, stated that the proposed allotment was subject to the outcome of the writ petitions which were pending at that time.
(9) Vide judgment dated 10th May, 1991 the aforesaid writ petitions filed by Kaveri Co-operative Group Housing Society and others was allowed. The guidelines containing the procedure for determining the seniority which had been issued by the Government were quashed. Amongst the other reliefs which were granted was the relief of a writ of mandamus quashing the list prepared by the Registrar, Co-operative Societies pursuant to the said Memorandum dated 20th January, 1990 and the Court also quashed and set aside all the allotments which had been made or were proposed to be made pursuant to the aforesaid Memorandum of 20th January, 1990. The Registrar was directed to prepare a fresh seniority list and another direction which was issued was that fresh allotment should be made within a stipulated period. The Court, however, specifically excluded from the operation of that judgment the allotment which was made to the societies who were registered prior to 1983 or were registered under Avas Sakar Yojna. Against the aforesaid 159 judgment of this Court dated 10th May, 1991, a Special Leave Petition was filed in the Supreme Court. Vide judgment dated 17th September, 1992 in Navjyoti Co-operative Group Housing Society etc. v. Union of India), the Supreme Court upheld the High Court decision with the result that a fresh seniority list had to be determined according to the date of registration and, thereafter, allotments were to be made afresh.
(10) The petitioners, falling in the first category who were registered prior to 1983, like the petitioners in C.W. 4184/92 received letters of allotment dated 25th January, 1991 whereby they were informed that it had been proposed to allot them land in Dwarka Phase-I. It was also stated therein that the land was proposed to be allotted on leasehold basis under the provisions of the Delhi Development Authority(Disposalof Developed Nazul Land) Rules, 1981 (hereinafter referred to as the Nazul Rules). The rate of premium of land was to be Rs.975.00 per sq.mtr., and that offer was valid up to 31st March, 1991. It was further stipulated in the said allotment letters that the Co-operative Societies would be required to pay 50% of the total premium by 25th March, 1991. This allotment was also subject to the writ petitions which were pending in this Court including that of Kaveri Cooperative Group Housing Society and the allotment letter further stated that possession of the land will be handed over only after the entire premium of land is deposited. The allotment letter also prescribed two conditions and one of them, which related to escalation, was as follows: "YOU shall pay to Dda such additional sum or sums towards premium in respect of the land allotted to it, as may be decided upon and fixed by the Land Acquisition Collector,being enhanced in reference or appeal or both, increase in cost of development and similar other grounds. The decision of the lessee in this regard shall be final."
(11) The Nazul Rules in January, 1991 contemplated payment of only 25% of the amount on allotment of land. As the amount demanded from the pre-1983 societies was 50% of the total premium on allotment, the same was challenged in this Court in C.Writ 59/91.During the pendency of this writ petition, interim orders were passed staying the cancellation of allotment of land subject to the petitioners therein paying 25% of the premium which had been demanded. Prior to 25th March, 1991, but pursuant to the interim orders passed by this Court the said 25% of premium was deposited. On 1st May, 1991 while allowing the aforesaid writ petitions this Court held that according to Rule 24 of the Nazul Rules only 25% of the premium can be demanded on allotment and, therefore, the demand in excess thereto was invalid. The Court, however, clarified that those societies who had not deposited the amount equal to 25% of the premium as directed by it would not get the benefit of the judgment of 1st May, 1991 and that the Delhi Admn., would be free to deal with them according to law.
(12) On 11th November, 1991 a Notification was issued whereby Rule 24 of the Nazul Rules was amended. As a consequence thereof the amended Rule 24 now provides that 25% of the total premium is to be deposited at the time of submitting application for allotment of land, 50% of the premium to be deposited within sixty days of the issue of demand-cum-allotment letter and the balance amount, after adjusting the earnest money, is to be deposited before taking over the possession of the land or within two months of the receipt of communication from the authority offering possession, whichever is earlier. 160 (13) On 21st October, 1992 the Ministry of Urban Development issued a Notification under Rule 2 (1) of the Nazul Rules notifying the pre-determined rates chargeable for different land use. By this Notification pre-determined rates for Dwarka Project 1992-93 per Sq.Mtr., were fixed and according to the same land could be allotted to Cooperative Group Housing Societies @ Rs.1650.65 per sq.mtr. The Notification further stated that "these rates come into force with immediate effect....."
(14) To the pre-1983 societies, to whom the judgment of this Court dated 10th May, 1991 in Kaveri Cooperative Group Housing Socicty's case was not applicable, the Dda, nevertheless, issued fresh demand letters on 26th October, 1992 requiring them to pay premium calculated @ Rs-1650.65 per sq.mtr. The other Cooperative Group Housing Societies, on the basis of fresh seniority list which was prepared pursuant to the judgment in Kaveri Cooperative Group Housing Society's case, were also issued demand letters requiring payment of premium calculated @ Rs.1650.65per sq.mtr.
(15) It is the aforesaid rate of Rs.1650.65 per sq.mtr fixed by the Notification dated 21st October, 1992 which is challenged before us. As the challenge to the fresh demand letters issued to the pre-1983 Societies is slightly different from the challenge which has been made by the other Cooperative Group Housing Societies, we shall deal with these two types of cases separately.
(16) Before dealing with the various contentions which have been raised in these petitions we may firstly refer to the statutory provisions regarding the disposal of land by the DDA. Sections 21 and 22A of the Delhi Development Act, 1957 deal with the disposal of land under the said Act. Section 21(1) deals with the disposal of land by the Authority, which land is acquired-by the Central Government and transferred to the DDA before or after carrying out development thereon. In these petitions we are concerned with what is called the Nazul land. Section 22 of the Act provides that the Central Government may by Notification in the official gazette, and subject to such terms and conditions as may be agreed upon between the Government and the Authority, place at the disposal of the Authority developed or un-developed land in Delhi, which land is vested in the Union with the provisions of the Act. This land which is placed at the disposal of the Authority for development is known as Nazul land. Sub-section (3) of Section 22 provides that after the Nazul land has been developed it shall be dealt with by the Authority in accordance with the rules made and directions issued by the Central Government in this behalf. Section 22A gives the Authority power to develop land even in non-developed area, but we are not concerned with this provision in the present case.
(17) Under the provisions of Section 56(20)(j) read with Sub-section (3) of Section 22 of the Delhi Development Act, the Central Government framed Delhi Development Authority (Disposal of Developed Nazul Land) Rules,1981 which provide for the manner of dealing with Nazul lands developed by or under the control and supervision of the DDA.
(18) In these writ petitions we are only concerned with the question of rates at which the Nazul lands are to be allotted. Two provisions which are relevant are Rule 2(1) and Rule 6 which read as under: "2(l)Pre-determined rates mean the rates of premium chargeable from different 161 categories of persons and determined by notification from time to time, by the Central Government, having regard to - (a) cost of acquisition, (b) development charges, and (c) concessional charges for use and occupation:- d) for developed residential plots, at the rate ofRs.3.60 per square metre for the first 167 square metres or part thereof; Rs.4.80 per square metre for the next 167 square metres or part thereof; Rs.6 per square metre for the next 167 square metres or part thereof; Rs.7.20per square metre for the next 167 square metres or part thereof; Rs.8.40per square metre for the next 167 square metres or part thereof, and Rs.9.60 per square metre thereafter; (ii) for developed industrial plots, at the rate of Rs.3.60per square metre for the first 0.81 hectares or part thereof; Rs.4.80 per square metre for the next 0.81 hectares or part thereof; Rs.6per square metre for the next 0.81 hectares or part thereof; Rs.7.20 per square metre for the next 0.81 hectares or part thereof; Rs.8.40 per square metre for the next 0.81 hectares or part thereof; and Rs.9.60 per square metre thereafter: Provided that the pre-determined rates at which allotment is made to persons belonging to middle income group may be higher than the rates of premium fixed for plots allotted to persons in the low income group; Provided further that in fixing the pre-determined rates of premium, the Central Government may fix a higher rate of premium for plots situated on main roads, corners of two roads, oral other advantage positions than the rates of premium fixed for plots situated faraway from the main roads;" "Rule 6 Allotment of Nazal land at pre-determined rates Subject to the other provisions of these rules the Authority shall allot Nazul land at the predetermined rates in the following cases namely:- (i) to individuals whose land has been acquired for planned development 'of Delhi after the 1st day of January, 1961, and which forms part of Nazul land: ' Provided that if an individual is to be allotted a residential plot, the size of such plot may be determined by the Administrator after taking into consideration the area and the value of the land acquired from him and the location and the value of the plot to be allotted; (ii) to individuals in the low income group or the middle income group, other than specified in clause (i)- (a) who are tenants in a building in any area in respect of which a slum clearance order is made under the Slum Areas Act; (b) who, in any slum area or the other congested area, own any plot of land measuring less than 67 square metres or own any building in any slum area or other congested area; 162 (iii) to individuals, other than those specified in clauses (i) and (ii) who are in the low income group or the middle income group, by draw of lots to be conducted under the supervision of the Land Allotment Advisory Committee; (iv) to individuals belonging to Scheduled Castes and Scheduled Tribes or who are widows of defense personnel killed in action, or ex-servicemen, physically handicapped individuals subject to the provisions of Rule 13; (v) to industrialists or owners and occupiers of ware houses who are required to shift their industries and ware houses from non-conforming areas to conforming area under the Master Plan, or whose land is a.cquired' or is proposed to be acquired under the Act: Provided that the size of such industrial plot shall be determined with reference to the requirement of the industry or warehouses set up or to be set up in accordance with the plants and such industrialists and owners of warehouses have the capacity to establish and run such industries or warehouses and on the conditions, that the land allotted at pre-determined rates shall not, in any case, exceed the size of the land which has been, if any, acquired from such industrialist or owners and occupiers of warehouses and which form part of Nazul land; Provided further that in making such allotment, the Authority shall be advised by the Land Allotment, Advisory committee; (vi) to co-operative group housing societies, co-operative housing societies, consumer co-operative societies and co-operative societies of industrialists on "first come; first serve basis".
(19) Reading the aforesaid two Rules together it is evident that the Authority can allot Nazul lands at the pro-determined rates and these rates are determined by Notification, from time to time, issued by the Central Government. In other words the pre-determined rates arc fixed by the Central Government and Notification in respect thereto has to be issued even though the Dda, any other expert Authority or Body, may carry out the exercise of calculating the rates which should be fixed.
(20) At the time of herring this Court was informed that since the promulgation of the Nazul Rules in 1981 the first time the Central Government issued any Notification determining the rates under Rule 2(1) was only when it issued the impugned Notification dated 21st October,'1992. Prior to that different rates were being fixed and determined, even after the promulgation of the Nazul Rules, by the Dda itself, possibly with the approval of the Lt. Governor of Delhi. Pre-1983 Societies (21) Two contentions have been raised on behalf of the petitioners representing those societies who were expressly excluded from the operation of the judgment in Kaveri Cooperative Group Housing Society's case (Supra). The first contention of the learned counsel is that there was no need to issue fresh allotment letters to the pre-1983 societies because the earlier demand letters which had been issued to them had not been quashed. 163 It was further submitted that what could p43 be legally demanded by the Dda viz., 25% of the premium on allotment, was infact paid by the societies though pursuant to the orders passed by this Court. The payment which was made was as per the Nazul Rules and a concluded contract came into existence between the parties specially when the payment was made within the stipulated point of time, i.e., on or before 25th March, 1991. It was contended that in the earlier letters of allotment the rate which was fixed was Rs.975.00 per sq.mtr and the Notification dated 21st October, 1992 was not retrospective and, in any case, could not affect the rights of the petitioners which stood crystallised when they had made payments as per the Nazul Rules. In the alternative counsel for the petitioners sought to challenge the very basis for the fixation of the rate at Rs.1650.65 per sq.mtr. This is the challenge which is common in all the petitions (pre-1983 and 1983 societies) which are being disposed of by this judgment.
(22) It is not possible for us to accept the contention of the learned counsel for the respondents that because the pre-1983 societies did not pay 50% of the premium which was demanded vide letter dated 25th January, 1991, therefore, the respondents are not obliged to allot the land to those societies @ Rs.975.00 per sq.mtr.
(23) Even the letter of allotment which was issued on 25th January, 1991 clearly states that the land was being allotted to the pre-1983 societies under the provisions of the Nazul Rules.At the relevant point of time Rule 24 of the Nazul Rules entitled the Dda to require the Co-operative Societies to pay only 25% of the premium at the time of allotment. The rate of Rs.975.00 per sq. mtr having been determined, as per the said letter, the respondents could have required the cooperative societies to pay only 25% of the premium at the time of initial allotment. The petitioners successfully challenged the demand for payment of 50% of the premium. In law the petitioners were liable to pay, as was held by this Court, only 25% of the premium which was calculated @ Rs.975.00 persq. mtr. The letter of allotment issued in 1991 conveyed three things viz., the rate of Rs.975.00 per sq. metre; the requirement to pay 50% of the total premium and the date by which the amount was to be paid, i.e., by 25th March, 1991. The Dda could not, in law, require payment of 50% of the premium at the time of allotment.It could demand only 25% of the premium. Therefore, the legal obligation which was cast on the societies was to pay @ Rs.975.00 per sq. metre 25% of the total premium by 25th March, 1991. Admittedly this payment was made within time.
(24) The respondents cannot legitimately contend p43 that because the pre-1983 societies did not pay the demand of 50% of thepremium, therefore, the said societies cannot insist on compliance with the other terms of the letter dated 25th January, 1991. The respondents cannot take advantage of their own wrong. Taking the argument of the Dda to its logical extent it would mean that the Dda insists that the petitioners were liable to pay the illegal demand of 50% of the total premium and as this illegal demand was not met, therefore, the Dda is not bound by the other terms of the said letter of allotment. As under Rule 24 of the Nazul Rules only 25% of the premium could be charged, at the time of allotment, and the petitioners were successful in the writ petition which was filed in this Court and as the payment of this 25% premium was made within the stipulated time it must follow that the valid terms of the letter of allotment issued on 25th January, 1991 had been complied with by the pre-1983 societies and the said societies are right in contending that they are not liable to pay premium at a rate higher than Rs.975.00 per sq. metre. Had the said societies not been successful in their challenge to the demand of 50% of the total premium then, the story may have been different but as the demand for premium beyond 164 25% at the time of allotment was illegal the said illegal demand has to be ignored and the amount p43 which could be legally demanded having been paid the contract between the parties stood concluded on 25th March, 1991 with the payment of 25%of the premium.
(25) It was vehemently contended by the learned Solicitor General that the rate of Rs.975.00 had never been notified by the Central Government. It was submitted by him that the land could be allotted only at the pre-determined rates and Rule 2 (1) of the Nazul Rule clearly provided that the pre-determined rates could be determined by the Central Government by Notification. As notification was issued by the Central Government, it was submitted, no pre-determined rates were fixed and the petitioners cannot require this Court to enforce rates which had not been determined. It was, therefore, submitted that the respondents were entitled to disregard the first letter of allotment which had been issued to pre-1963 societies and could issue fresh allotment letter after the rate of Rs-1650.65 had been determined by the Central Government by Notification dated 21st October, ' 1992. It was also submitted that the rate of Rs.975.00 per sq. metre was neither approved by the Central Government nor was there any ratification of the said rate. It was contended that the ratification, if a tail, could have taken place only by the Central Government issuing a Notification under Section 2(1) of the Nazul Rules.
(26) The undisputed facts, briefly stated, in the present case, qua this aspect are as follows: (i) Since the promulgation of Nazul Rules 1981 no Notification was ever issued by the Central Government till 21st October, 1992. (ii) Between 1981 and 21st October, 1992 Nazul land was allotted by the Dda at various rates from time to time and lease deeds were executed. (iii). Even though the rate of Rs.975.00 per sq. metre may never have been approved by the Central Government but still copy of the allotment letter issued on 25th January, 1991 by the Dda was forwarded for information to the Under secretary, Government of India, Ministry of Works and Housing, Nirman Bhawan, New Delhi and also to the Registrar, Cooperative Societies, Delhi Administration. (iv) In Civil Writ No-459/91, decided on 1st May, 1991, where there was challenge to the demand of 50% of the premium at the time of allotment, the Union of India was a party and was represented before the Court. It was never contended by the Union of India, in that case that the rate of Rs.975.00 per sq. metre was not a predetermined rate.
(27) Taking the aforesaid four circumstances into consideration it appears to us that even though the rate of Rs.975.00 per'sq. metre was never notified, the Union of India is estopped from contending to the contrary.
(28) At least since the time of allotment in 1991 it was aware that the land was being allotted under the Nazul Rules @ Rs.975.00 This is not a case where the principle of estoppel against the statute will apply because the statute has not fixed the rate at which the land can be sold. The rate is to be fixed by the Union of India. The requirement of notification of the rates, as postulated by Rule 2(1), is nothing more than giving finality to the determination of the rates and informing the general public about the same. The statute nowhere prohibits the Central Government from fixing the rate of Rs.975.00 per sq. intr. Even though it may have undertaken the exercise of determining the rate at Rs.975.00 sq. mtr, nevertheless when it was informed that land was being allotted at this rate no 165 objection was taken by it and allotments have been made of Nazullands, since 1981,at the 'rates which have been determined by the Dda and land has been transferred and buildings erected thereon. It is now too late for the Union of India to contend that the rate of Rs.975.00 per sq. metre in respect of these pre-1983 societies cannot be regarded as a pre-determined rate.
(29) The matter may be viewed from another angle. In the affidavit filed by Shri Vijay Kumar, Undersecretary, Ministry of Urban Development on behalf of the Union of India in the present case it has been categorically stated as follows: "In this context, it may 'also be mentioned that the pre-determined rates of land up to 31st March, 1991 for cooperative societies were between Rs.925.00 and Rs.975.00 . Pre-determined rates for housing schemes up to 31.3.92 (that is one year later) were as follows: Sfs - Rs.975 Mig - Rs.870 , - Lig - Rs.660 Ews - Rs.500 (30) It has, therefore, been represented to this Court on oath, on'behalf of Union of India, that there were pre-determined rates of land which had been fixed up to 31st March, 1991 for cooperative societies ranging between Rs.925 and Rs.975.00 . This can be read in conjunction with the Notification dated 21st October, 1992, whereby the pre-determined rates were revised. In the Notification it is stated that these revised rates would come into effect with immediate effect and are the pre-determined rates for Dwarka 1992-93. By this Notification of 21st 0ctober,1992the revised rates were only to be effective from 1.4.1992. The Notification of 21st 0ctober, 1992 had only a limited retrospectivity and it determined the rates w.e.f. 1st April, 1992. It is obvious that the Central Government was aware of the fact that, for the period prior to that, pre-determined rates had been fixed and allotments made.
(31) If the contention of the learned Solicitor General is accepted it would mean that every allotment made after the promulgation of the Nazul Rules in 1981 till 21st October, 1992 must be regarded as illegal because rates had not been determined by issuance of a notification under Rule 2(l).It is not possible to accept such a contention which will lead to disastrous results as every sale made by the Dda of Nazul land since 1981 will have to be regarded as illegal. The principle of estoppel is clearly applicable in the present case relating to the pre-1983 Cooperative Group Housing Societies especially when in the aforesaid affidavit of Shri VijayKumar filed in this Court it has been state don behalf of the Union of India that pre-determined rates of land up to 31st March, 1991 had been fixed. The use of the words " pre-determined rates " can have reference only to the Nazul Rules, 1981 and to Rules 2 (1) and Rule 6 in particular.
(32) In the letters of allotment dated 25th January, 1991 issued to the pre-1983 Cooperative Group Housing Societies it was stated that the allotment @Rs.975.00 per sq. metre would be subject to the final decision in Civil Writ No.339 of 1991 and other writ petitions and if necessary, as a result of the decision therein, the allotment was liable to be reversed and cancelled. The said writ petitions were allowed by this Court in Kaveri Cooperative Group Housing Society's case but, as has already been noticed, the allotments infavorofpre-1983 CooperativeGroup Housing Societies were not cancelled and 166 were expressly saved and the same were not to be adversely affected by the said decision. Therefore, there was no occasion or justification for any fresh allotment letter being issued to the pre-1983 Co-operative Group Housing Societies as the earlier allotment letterdated25th January, 1991 was neither can celled nor quashed. Money legally due pursuant to the aforesaid letter of 25th January, 1991 viz.,25%of thepremium calculated @Rs.975.00 per sq. mtr having been paid before 25th March, 1991 the rights of the said petitioners had got crystallised and, in the absence of default having been committed by the said pre-1983 societies, the said allotment @ Rs.975.00 per sq. metre could not be cancelled. The fresh allotment letters issued to the said petitioners @ Rs.1650.65 per sq. metre have, therefore, to be quashed. Ordered accordingly. 1983 Societies v (33) There are two types of societies who are petitioners before us which are not covered by the first category viz., the pre-1983 societies. Out of these societies who had been registered in 1983-84 there are some to whom allotment letters had also been issued on 25th January, 1991 which, inter alia, contained a clause that their allotment was @ Rs.975.00 per sq. metre.lt was specified in these allotment letter that this rate was valid up to 31stMarch, 1991. In some letters of allotments it was stated that their allotment was subject to cancellation depending upon the outcome of the pending writ petitions viz., that of Kaveri Cooperative Society. These societies arc petitioners in C.Writ Nos.4313/92,4300/ 92, 196/93,254/93,4492/92, 4385/92,4393/92, 4238/92,4340/92, 4456/92,4457/92, 4447/92, 4465/92,4468/9, 4471/92, 4324/92,4325/92, 4327/92,4437/92,4439/92, 4300/92, 4401/92, 4343/92, 4421/92,4379/92,4380/92,4381/92,4432/92,4304/92, 4474/92,4453/92,4312/92, 4314/92, 4315/92,4316/92, 4318/92, 4319/92 and 4321/92, and as a result of this Court's decision in Kaveri Cooperative Group Housing Society's case (supra) their allotments were quashed. Fresh seniority list having been determined, these petitioners were Once again issued allotment letters on 2/3rd November,.1992 but the rate demanded from them was Rs-1650.65 per sq. mtr.
(34) The second category is of those petitioner societies who were not one of the 260 societies to who allotment had originally been made in 1991.These societies are petitioners in C.Writ Nos.4287, 4276,4441, 4347,4452,4523,4480,4481,4384, 4388. 4389,4390, 4391,4392,4256, 4444,4460,4458,4462, 4461,4459, 4463,4454,4448,4449,4450.4466,4469, 4470,4472, 4467, 4493,4426,4436,4347,4442,4403,4309,4310,4311,4317,4320,4322,4323,4277,4278,4279, 4280,4281,4282,4283,4284,4285,4286,4288,4289,4290,4291,4292,4293,4294,4295,4296, 4297, 4298,4403, 4404,4405,4406,4407,4408,4387,4236, 4438,4455, 4338 of 1992 and 649, 395,185,174,26, 27, 28,29, 30 of 1993. These societies were issued allotment letters for the first time after the seniority was re-determined. The only allotment letters which have been issued to them were dated 2/3rd November, 1992 requiring them to pay at the pre- determined rate of Rs. 1650.65 per sq. mtre.
(35) It was contended that allotments having been made in the case of some of the petitioner societies @Rs.975.00 per sq. metre the said rate could not be enhanced to Rs.1650.65 persq. mtr when fresh allotment letters were issued. The submission was that it was not the fault of these petitioners that detective seniority list had been prepared. It was contended that on any principle of seniority the petitions falling in the second category were entitled to allotment of land and, therefore, the rate which was fixed in 1991 @Rs.975.00 could not be altered. 167 (36) The seniority list which was challenged in this Court had been determined by the Registrar, Cooperative Societies. Neither the Dda nor the Central Government were concerned with the said list. The determination of the seniority, and the consequent issuance of allotment letters in 1991 led to dispute inter seamongstthesocieties. No action by the Dda or the Central Government could in law be challenged. The rate of Rs.975/ - per sq. mtr which had been 'determined was valid only up to 31st March, 1991. The allotments couldbemadeaftcrl.4.91ata different pre-determined rate. These letters of allotments which were issued by the Dda were quashed by this Court on May, 1991 in the case of Kaveri Cooperative Group Housing Society(supra). It is true that these petitioners were again issued allotment letters but these fresh letters of allotment were issued after the Notific.ationof21st0ctobcr, 1992.Theearlicriettersofallolment having been quashed by this Court, no reliance could be placed on the same because with the quashing of the said allotment letters no rights emanating there from subsisted. Afresh seniority list, under orders of this Court, was prepared and fresh allotments were made after the dispute between the Cooperative societies had come to an end with the decision of the Supreme Court when the appeals were dismissed. It may here be' mentioned that it is neither the Dda nor the Central Government nor the Registrar, - Cooperative Socielk's who had challenged the correctness of this Court's decision in Kaveri Cooperative Group Housing Society's case (supra). The appeal which was filed before the Supreme Court was by some of those cooperative societies whose allotments bad been-quashed by this Court. Ast'arasthe Dda and the Central Government were concerned they had accepted the judgmentof thisCourt. Theuiifortiiii.ilef:ill out of this. fight between the two sets of cooperative societies was thatthedatcol'31st March, 1991 bad passed amd no 1983 co-operative society could thereafter insist, in law, ni land being allotted at the rate ofRs.975.00 persq. mtr.
(37) As regards the other cooperative societies to whom no allotment w?s made under the First seniority list the question of their demanding allotment at Rs.975.00 persq. mir can, under no circumstance, arise. There was never any promise to them that land will be allotted to them at Rs.975.00 per sq.rntrandthe only letters of allotment which hii been issued in their favor were afterthe impugned Notification of 21st October, 1992 when the price @Rs.l 650.65 pe sq. mtr has been demanded from them.
(38) The allotter qua these societies may be looked p73 at from another angle. These petitioners are all those societies who were registered pursuant to the public notice dated 16th July, 1983 when registration for new group housing societies was re-opened. All these societies aregoingtobeallottedlaiitltnPhasc-1 ofDwarkaProject. Their allotment is common and there is no reason-as to why there should be difference in the rate which - ischargedfronithem. All these societies are similarlysitualeasfreshallotmcntleltcrs have been issued aftcrtheNotificationof21st October, 1992. ltwillbediscriminatoryifsomeof the societies, whose earlier allotments were cancelled by orders of this Court, are allowed to get the benefit of the allotment letters which were quashed while other societies to whom allotment on the basis of earlierseniority list had notbeen made, are required to pay a higherpremium. Ajlcooperative group housing soceitics to whom allotment letters have now been issued forallotmentoflanu in the First lot of 260 in Dwarka Phase-1 must be regarded as a single group of societies who must all be treated identically. When fresh allottees, to whom no allotment letters were issued earlier arc bound to pay at the rates notified on 21st October, 1992 there is no reason as to why other a llotles should be permitted to pay less. 168 (39) Counsel for the petitioners then challenged the fixation of rate of Rs.1650.65 per sq. mtr. The main contention was that the rates have to be fixed in acordance with Rule2 (1) of the Nazul Rules. While it was contended by Mr. Ganguly that' apart from the three factors mentioned in Rule 2(1) no other factor could be taken into consideration, the other counsel submitted that Rule 2(1) requires fixation of pre-determined rates having regard to the factors mentioned in the said Rule. In view of the use of the expression "having regard to" the Central Government was not bound or restricted to take only the factors mentioned in Rule 2(1) into consideration but it could not take any irrelevant factor into consideration. The submission was that the fixation of the pre-determined rate cannot be arbitrary, illogical or violative of Article 14 of the Constitution. In this connection it was also submitted that there must be acorrelation between 1990 and 1992 rates and the 1990 rate of Rs.975.00 per sq.mtr should be the basis for revision.
(40) Dealing with the last contention first we find it difficult to accept the contention of the learned counsel for the petitioners that the rate of Rs.975.00 per sq. mtr fixed in the year 1990 can alone be the basis for revision. Rule 2(l) itself provides that pre-determined rates are those which are determined "by notification from time to time" . Once the Central Government has been given the liberty to fix the predetermined rates from time to time it does not mean that the Central Government must regard the earlier rate as the basis fora fresh fixation. As long as the rates now fixed are not arbitrary and have been fixed also having regard to the factors specified in Rule 2(1) the same cannot be challenged. In other words the Government can change the basis or the method of arriving at the pre-determined rate provided such basis or method is neither arbitrary nor contrary to Rule 2(1).
(41) It was submilted before us by the Solicitor General that the earlier fixation of rale at Rs.975.00 per sq.m.was not scicntifically arrived at. The rate which has now been fixed has been arrived at scientifically. The Solicitor General placed before us a booklet which contains cost benefit analysis of Dwarka Phase-I and determination of land premiums. This document contains an introduction to the project, the assumptions which have been taken into consideration while working out the optimal cost of developed land, the present position of services of Dwarka Phase-I, the methodology used in the cost benefit analysis, conclusions containing pre-determined rates and the multiplier and the constraints. Also included in the document are various tables which indicate as to how the pre-determined rates have been worked out and what is the total cost of the Project of Dwarka Phase-I. (42) In order to appreciate the rival contentions it is necessary to refer to the assumptions on the basis of which the document has been prepared and pre-determined rates arrived at. This document, with regard to assumptions, provides as follows: "2.0 Assumptions For working out the optimal cost of developed land certain assumptions are necessary as this kind of an exercise is a complex interpolation and extrapolation of expenditure incurred in past and proposed for the remaining part of project duration vis-a-vis the revenueexpec.tedin coming period. This exercise will need review every year. The assumptions are:- 2.1 The discounted cash flow method has been used in this study. All expenditure 169 and income are discounted to the prsent using this method. 2.2 Discounting rate has been assumed to be 16.43%. The basis for this assumption "is that the average cost index for Pwd works in past three years has risen by 16.43% from 421 on 1.11.88 to 664 on 31.12.91". 23 This costing exercise takes into account the expenditure for ony peripheral development. All internal development expenditure wherever applicable for housing pockets commercial centres, industrial areas etc., shall have to be accounted for to work out the cost of fuly developed land for such areas. However, the cost of internal development for plotted development (alternative plots and auction plots) has been included in the development expenditure. 2.4 The cost of money wherever funds need to be raised on account of a negative cash flow has been taken @ 18% and the cost of money so raised has been discounted or compounded @ 16.43% as per assumption at serial number 2 above. When this is a cumulative net inflow interst income is calculated at 13%. 25 The total area of Dwarka's is 5648 hect, out of which 1688 hect., is alrady "built up as unauthorised/regularised colonies". As per the initial plan, 1862 hect. was the area of Phase I and 2098 hect. for Phase II. The total area acquired so far for Phase I and Phase Ii is 2500 hect. and the project Planning Wing has evolved a plan for only this area. "The cost of land acquisition for 1862 hect of Phase I was Rs.47.65crores, while 638 hect in Phase Ii has cost Rs.100 crores. during 1991-92, which implies that the cost of land acquisition for Phase Ii so far was approx., Rs. 15.67 lakhs per hect. Contingency for unanticipated increase in rate by 20% for acquisition of the remaining part of Phase Ii as well as the additional area of 96 Hect., needed for trunk utilities has been provided for. 2.6 The land for all utilities is assumed to be given free and the cost of such land has been loaded on the beneficiaries of the project area. 2.7 The value of actual expenditure for previous years has been compounded to 1992-93 and the value of proposed expenditure for future years has been discounted to 1992-93. The compounding/discounting has been done @ 16.43% as per assumption at Sr. No.2 above. 28 Overall breakeven rate for the project has been worked out at no-profit no- loss basis. 2.9 The agencies like Pwd, Delhi Administration and Mcd etc. shall draw out a parallel plan so as to provide IN a synchronised manner the required trunk services as anticipated. It is further assumed that all these agencies shall draw out similar plan of action and provide necessary provisions in their budget. 2.10 Pwd, Delhi Admn., shall construct all master plan roads which are considered as citylevel roads including constn. of over-bridges and sub-ways and various links with the other parts of the city except for 2 lane master plan roads which Dda has already constructed to open the area. The expenditure 170 on the constn. of the Master Plan roads shall be met by PWD/ Delhi Admn.,out of the plan funds. Dda shall provide the land free of cost within the project area and any land required outside the project shall be acquired by Pwd, Delhi Admn. out of their own funds. The roads and other links are supposed to be completed by Pwd, Delhi Adnin. within the duration of Eighth Five Year Plan. 2.11 Dda shall finance the cost of the command tanks and the distribution network within the Dwarka Project.Delhi Water p73 Supply &. Sewerage Disposal Undertaking shall construct the water treatment plant and lay the trunk water line feeding the command tanks. While the land for const. of these trunk facilities by Delhi Water Supplyand Sewerage Disposal Undertaking of Mcd shall begiven by Dda free of cost, the constn, cost of these feilities shall be met by Mcd out of its own funds/plan funds. It has further been assumed that Delhi Water Supply & Sewerage Disposal Undertaking shall take 3 years time for providing these trunk services after the land is handed over to them by DDA. 2.12 Dda shall finance the laying of sewer lines and lake the sewerage up to the pumping stations. From these pumping stations onwards Delhi Water Supply & Sewerage Disposal Undertaking shall layrising mains and construct the sewerage treatment plant. Dda shall give the land to Delhi Water Supply & Sewerage Disposal Undertaking free of cost to construct these facilities. The funds for the const. of these facilities shall be met by the Undertaking. Delhi Water Supply & Sewerage Disposal Undertaking shall complete their part of the work within 3 years of handing over of land. 2.13 Forconstn.of 4 nos.220KV & 11 nos.66KV electricstation, Dda shall hand over the land free of cost. Desu shall provide the trunk electrification services out of their own funds. The time schedule for completion of work shall be three years from the date of handing over land. 2.14 All drains with discharge of 100 cusecs and above shall be constnicted by I & F Deptt. of Delhi Admn., out of the plan funds; Dda shall only provide the land free of cost wherever required. 2.15 As cost of acquisition of land for Dwarka Phase I was much cheaper than the land for Phase-II (only 638 Hectares has so far been acquired) it has been decided to pool the cost of acquisition of land for Phase-I and Phase II. Cost of land acquisition for the balance area of 1460 Hectares of Phase-II has been worked out at Rs-15.67 lacs perhect.(based on average cost of 638 hects.) increased by 20% and the total cost will be Rs .274.608 crores.96 Hect of land which is required for trunk utilities and which is not part of Phase-I or Phase-II shall be additionally needed. The cost of the same shall be Rs. 18.057 crores; it will be additional acquisition expenditure which also would have to be .loaded. Thus total land acquisition cost for Phase-I and Phase-II would be Rs-440.313 crores. Pooled cost of Phase-I would be Rs-207.036 crores and pooled discounted cost would be Rs.248.120 crores which may be seenat Table No.1. Discounted cost of land for Phase-I would have been only Rs.47.648 crores if costs were not pooled. The advantage of pooling is that there will not be wide variation in the sale price of land in Phase-I and Phase-II. Wide variation may not be 171 acceptable to public. 2.16 A provision for addl. compensation which may become payable to the persons whose land has been acquired has been made @ Rs.50.00 persq.mtr. The discounted value of the addl. compensation for Phase-1 is 94.511 croes. 2.17 50% land for schools, colleges used to be given @ Rs.10000 per acre and balance of 50% free. This is not a practical proposition and increases the load on beneficiaries. A different costing method is proposed i.e.50%of land at 50% of the breakeven rate while the remaining 50% of land for playgrounds etc. at 10% of the breakeven cost. The price proposed to be charged for various uses may be seen at column 5 of Table 3. 2.18 The project is envisaged to be completed by 1997-1998. Even though land was acquired in 1986-87, development started only in the year 1990-91 and so far an expenditure of Rs.35 crores has been incurred."
(43) The methodology which has been used in the cost benefit analysis has been described in this document as follows: "4.0 Methodology Used In The Cost Benefit Analysis 4.1 Discounted cash flow method is used in this cost benefit analysis to arrive at the breakeven price. It is for the first time that cost benefit analysis is being done in Dda using the above technique. 42 The discounted cash flow technique involves disconting both expenditure as well as revenue to the present. For this study 1992-93 is used as the base year to which everything has been discounted. Discounting rate of 16.43% has been used in this study. In traditional cost benefit analysis, interest is calculated taking into consideration the total project cost multiplied by the rate of interest for half the project period. In this study the technique of net liability in calculation of interest has been used. This is more realistic. Interest has been calculated at 18% wherever there is cumulative out-flow and at 13% whenever there is comulative in-flow on the presumption that if money is borrowed from market, it will cost 18% and if money is deposited with the bank an interest of 13% shall be earned."
(44) The conclusions which are arrived at which indicate the pre-determined rates existing in 1991-92 and the proposed pre-determined rates for Dwarka 1992-93 are as follows: "5.0 Conclusions 5.1 Breakeven rate of land without any provisions for physical and price contingencies would be: i) Per Sq.mtrs : Rs. 1006.830 ii) Per Acre : Rs. 40,76,234.80 iii)PerHcct. : Rs. 100.683 lacs 52 The sale price of the land with 12% provisions for physical and price contingencies shall be as under: i) Per Sq.mtrs : Rs. 1100.430 ii) Per Acreh : Rs. 44,55,182.10 iii)Per Hect. : Rs. 110.043 lacs 53 Statement of pre-determined rates for the rear 1990-91 and 1991-92 and the proposed rates based on the breakeven prices including 12% provision for physical and price contingency for the year 1992-93 are as under: Category of Predetermined rates Proposed predetermined Multiplier land existing for 1990-91 & rates for Dwarka 1991-92 per sq.mtr. 1992-93 per sq.mtr. 1.Land for Cghs (up to 31.3.91) South Zone Rs.975.00 Rs.1650.65 1.5 North Zone Rs. 950.00 EastZone Rs.925.00 West Zone Rs. 950.00 2. Alternative Plots (up to 31.3.92) South Zone RS.805.00 Rs.1650.65 1.5 North Zone Rs.715.00 East Zone Rs.700.00 West Zone Rs.730.00 3. Auction Plots By auction Rs. 4401.72 4.0 By auction expected revenue is calculated @4 times of the breakeven rate 4. Housing Schemes (up to 3.3.92) Sfs Rs.975.00 Rs. 1650.65 1.5 Mig Rs.870.00 Rs. 1375.54 1.25 Lig RS.660.00 Rs. 825.32 0.75 Ews Rs.500.00 Rs. 550.22 0.50 5. Educational/Hospital & alike. From Rs.l0,000/acre 50% area 0.1 to Rs.l5.60 lacs/ @ 10% of breakeven acre depending on rate, plus type of institution 50% area 0.5 & area required. @ 50% of breakeven rate. 6. Entirely Charitatable Institution From Rs.l0,000/acre to Rs.l5.60 lacs/ Rs. 110.04 O.1 acre depending on type of institution & area required. 173 7. Industrial Rs.l029.00 to Rs.l582.00 Rs. 1375.54 1.25 Depending upon areas 20% to be increased for 1991-92. 8. Commercial Rs.l544.00 to Rs.2373.00 Rs. 2200.86 2.0 Depending upon areas - low turnover 20% to be increased for 1991-92 Rs. 4401.72 4.0 - high turnover 9JJ. & Squatters Resettlements Rs.825.00 (including cost Rs.550.22 0.50 of internal development) (excluding internal development) 10. Utilities like power houses, electric sub-stations, water supply and drainage etc. Rs-15.60 lacs/ acre. At license fee of Re. 1/acre 5.4 Predetermined institutional rates and market rates may be fixed by the Government based on the above data."
(45) Pausing here. it will be seen from the concusions contained in the cost benefit analysis that the said analysis states the pre-determined rates existing for the year 1991 and 1992. One of the pre-determined rates specified up to 31st March, 1991 is that of Rs.975/ -per sq.mtr for South Zone. It is an admitted case of the parties that it is on the basis of this cost analysis that the Notification of 21st October, 1992 was issued approving the pre- determined rates of Dwarka 1992-93. Approval of this cost benefit analysis, would, in any case,specifically amount to the approval of the pre-existing rate of Rs. 975.00 per sq.mtr. for the period prior to 1992-93 and this is yet another reason why that amount has to be taken as the rate applicable to the pre-1983 societies.
(46) Reverting back to the 1983 societies, we have first to examine whether the Government can determine the rates by taking into consideration factors other than cost of acquisition, development charges and concessional charges for use and occupation. Shri Ganguly had submitted, in this connection, that the expression "having regard to" appearing in Section 2(1) of the Nazul Rules means that the Central Government could determine the rate of premium only byhaving regard to these three factors and none other. He further submitted that the proviso to Rule 2(1) indicated that a higher rate could be fixed for the higher income group but no other circumstance could be taken into consideration. In this connection the learned counsel sought to place relinace on Union of India v. Kamla Bai, . In that case the question arose with regard to the meaning of the expression "having regard to", occurring in Section 8(l)(e) of the Requisition and Acquisition of Immoveable Property Act, 1952. The said section 8 provided for principles and method of determining compensation. Sub-section (3) of Section 8, inter alia, provided that the arbitrator had to accept only the smaller figure arrived at after assessment on the two modes of valuation. The contention which was raised before the Supreme Court was that Section 8(l)(e) inter alia, provided that the 174 arbitrator, in making the award, shall have regard to the circumstances of each case and the provisions of sub-section (3) as far as applicable. It was contended that the said expression "having regard to" only meant that the arbitrator was to keep the matter referred to in mind or be conscious of the same but he was not compelled to act himself thereon. This contention was repelled by the Supreme Court and it was observed that the arbitrator was bound to coinply with the provisions ofsub-section (3) and he could only accept the smaller figure. This judgment can be of no assistance to the learned counsel because what was, ineffect, sought to be contended in Kamalabai's case (supra) was that sub-section (3) which made it obligatory for the arbitrator to accept a lesser figure, should infact be ignored. What the Supreme Court held was that the words "having regard to" did not mean that the arbitrator could ignore the mandatory provisions of sub-section (3) of Sections. Similarly in the present case the words "having regard to" occurring in Section 2(1) of the Nazul Rules cannot mean that cost of acquisition, development charges and concessional charges for use and occupation can be ignored. These factors have to be taken into consideration while determining the rates. The Supreme (47) The scope of judicial review and the incaning of the expression "having regard to" occurring in statutes relatingo determination of price have been subject matter of numerous judicial pronouncements. It is not necessary to refer to all the said decisions because they have been referred to and considered in the decision of the Constitution Bench of the Supreme Court in the case of Sliri Sita Ram Sugar Company Ltd. v. Union of India, . In that case the Supreme Court was concerned with the interpretation of Section 3 sub-section (3-C) of the Essential Commodities Act, 1955. The said sub-section, inter alia, provided that where the producer is required to sell any kind of sugar whether to the Central Government or State Government etc. than he is to be pa id an amount in respect of the said sale which is to be calculated with reference to such price of sugar as the Central Government may by order determine "having regard to" minimum price of sugar given, the manufacturing cost of sugar, the duty or tax, if any payable thereon and the securing of a reasonable return on the 'capital employed in the business of manufacturing sugar. The said clause also provided that different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar. While construing this provision the aforesaid decision of the Supreme Court in Kamalabai's case was distin guished by observing that the expression "having regard to" must be understood in the context in which it is used in the statute. It was held that at page 243: "THESEwords do not mean that the government cannot, after taking into account the matters mentioned in clauses (a) to (d), consider any other matter which may be relevant. The expression is not "having regard only to" but "having regard to". These words are not a fetter; they are not words of limitation, but of general guidance to make an estimate. The government must, of course, address itself to the questions to which it must have regard, and, having done so, it is for the government to determine what it is empowered to determine withreference to what it reasonably considers to be relevant for the purpose."
(48) After referring to various decisions of the privy Council as well as its earlier decisions the Supreme Court in Shri Sita Ram Sugar Company's case at page 245 observed 175 as under: "THEwords "having regard to" in the sub-section are the legislative instruction for the general guidance of the government in determining the price of sugar. They arc not strictly mandatory, but in essence directory. The reasonableness of the order made by the government in exercise of its power under sub-section (3-C) will, of course, be tested by asking the question whether or not the matters mentioned in clauses (a) to (d) have been generally considered by the government in making its estimate of the price, but the court will not strictly scrutinise the extent to which those matters or any to ehr maters have been taken into account there is sufficient compliance with the sub-section, if the government has addressed its mind to the factors mentioned in clauses (a) to (d), amongst other factors which the government may reasonably consider to be relevant, and has come to a conclusion, which any reasonable person, placed in the position of the government, would have come to."
(49) While holding that price fixation was in the nature of a legislative action even when it is based on objective criteria and that government cannot fix any arbitrary price and it cannot fix prices on extraneous reasons it was observed that "THECourt has neither the means nor the knowledge tore-evaluate the factual basis of the impugned orders. The court, in exercise of a judicial review, is not concerned with the correctness of the findings of fact on the basis of which the orders are made so long as those findings are reasonably supported by evidence."
(50) It was also held at page 255 that: "JUDICIALreview is not concerned with matters of economic policy. The court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The court does not supplant the "feel of the expert" by its own views. When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness. In all such cases, judicial inquiry is confined to the question whether the findings of fact are rasonably based on evidence and whether such findings are consistent with the laws of the land."
(51) It was lastly observed that price fixation was not the province of the Court and that judicial function in respect of such matters was exhausted when there is found to be a rational basis for the conclusions reached by the concerned authority.
(52) From the aforesaid observations in Sitaram Sugar Company's case (supra) it is clear that the scope of judicial review in cases like the present relating to fixation of price, is limited. What has to be seen, and examined by the Court, is only whether the factors mentioned in Rule 2(1) of Nazul Rules have generally been considered by the Government and whether any irrelevant factor or circumstance has been taken into consideration. Keeping this in view the main thrust of the argument on behalf of the petitioners, while challenging the rate of Rs.1650.65 per sq.m. related to primarily five 176 factors which have been taken into consideration in arriving at the aforesaid rate. These are (1) the pooling of the cost of land acquisition for Phase-I with Phase-II, (2) burdening, on this project, a part of the cost towards resettlement of squatters, (3) taking the cost of the master plan roads into consideration, (4) taking into considertion of Miscellaneous charges and (5) the application of multiplier of 1.50 and equating the Cooperative Group Housing Societies with applicants of Self Financing Scheme category flats.
(53) It was contended that Phase-I and Phase-II are different and distinct from each otherand; therefore, there is no justification for taking into consideration the estimated cost of acquisition of land for Phase-II. It was submitted that the discounted cost of land for Phase-I was only Rs-47.65 crores and if the acquisition cost of land for Phase-II was not pooled in then, the price which the petitioners had to pay would have been much less. There was no justification, it was contended, for treating unequals as equals and the decision to club both Phase-I and Phase-II while arriving at the discounted cost of land was arbitrary. 54. The rate of Rs.1650.65 per sq.mtr has been fixed by adopting the cost benefit method. The principle involved is that the expenditure already incurred is compounded and the expenditure yet to be incurred in future is discounted at a certain factor representing average escalation and these are brought to their present value. The net present value of the total expenditure on the project thus worked out is thereafter spread over to the saleable area which gives the breakeven rate per sq.mtr. According to the DDa when this analysis was done in July, 1992, this breakeven rate came to Rs. 1100.43 per sq.mtr. The oritically if all the saleable land in Dwarka Phase-I is sold at this rate and full premium realised in the year 1992-93, Dda does not suffer any loss and it is possible for the Dda to complete the full development of the project with this capital by the terminal year 1998. In reality, however, disposal of land gets spread over a number of years. This necessitates, therefore, revised analysis on an year to year basis and consequent fixation of the disposal rate every year till the completion of the project. The entire saleable land, however, cannot be disposed off at the breakeven rate as there are uses for which land is allotted at concessional rate as a matter of State policy. This element of subsidy is met by cross subsidisation and in this manner, therateof Rs. 1650.65 per sq.mtr. has been arrived at for Co-operative Group Housing Societies as described in detail in the affidvit filed by DDA.
(55) In the booklet containing the cost benefit analysis the reason for pooling the cost of acquisition.of land is ciearly indicated. What is being developed is a single project called "Dwarka". Thisproject is to accommodate a population of 1.1 million but the development is to take place in two phases namely Phase-I and Phase-II. It is the development of that project which has created two Phases - not the structure or its planning. In the determination of the price the discounted land acquisition cost is one of the elements. By pooling the cost of acquisition for Phase-I and the estimated cost of acquisition for Phase-II the respondents have arrived at a figure of pooled land acquisition erst. This figure is not to vary when the price of land, which is developed subsequently for Phase-II, is determined. In other words the pooled land acquisition cost will be a constant factor in the price of land for both Phase I and Phase-II. It is not as if the entire land for Phase-II has not been acquired. Whereas according to the initial plan of development Phase-II is to consist of 2098 hectares, acquisition of 638 hectares in Phase- Ii has already taken place. It is the price of this land of 638 hectares which has been 177 assumed to be the cost for acquisition of the balance land turn Phase-II with acontingency for unanticipated increase in the rate by 20%. When the project is conceived as a sort of a minicity, the respondents could not be said to have acted arbitrarily in taking the view that by pooling the cost there will not be wide variation in the sale price of land in Phase-I and Phase-II. Land in the two phases is to be auctioned or allotted. As the development of this project is estimated to take a few years the respondents rightly felt that wide variation in the sale price of land will not be acceptable to the public.
(56) As far as the respondents are concerned, the effort is to see that, irrespective of the phase in which Cooperative Societies and other persons are allotted land, there should not be much difference in the price of land. Trying to have a uniform price, as far as possible, is certainly a laudable object. It would be a relevant factor to be taken into consideration under Rule 2(1) of the Nazul Rules, more so when, as rightly contended by the Solicitor General, there are many facilities which are common to both the Phases but which are located in either of the two Phases. The planning of the project has taken place in such a manner that, as is evident from the cost benefit analysis booklet, that the common facilities are more in Phase-II than in Phase-I. These facilities are common to both the Phases and that is why the saleable area in Phase-I is 58% of the total area while in Phase- Ii the saleable area is only 39%.
(57) In our opinion therefore, it was not unreasonable for the respondents to have pooled the cost of acquisition of land for the entire Dwarka Project while determining the price of land.
(58) With regard to squatters, the submission of the learned counsel for the petitioners was that whereas Cooperative Group Housing Societies are required to pay 1.5 times of the breakeven cost, the persons who were squatters and are being re-settled will have to pay only 50% of breakeven cost. Why should the law abiding citizens like the members of the Cooperative Group Housing Societies bear the brunt of re-settlement of squatters, it was contended.
(59) When the State develops a housing project which is really a mini city, planning to accommodate 1.1 million persons, it ought to discharge its obligations towards all sections of the society. The State is entitled to not only cater to the demands for land and housing of the middle income and higher income groups but is also required to provide for the needs of the lower income groups. It is no doubt true that squatters are those persons who have settled on public land but it cannot be denied that they are poor people and, therefore, the respondents would be under an obligation to see that their illegal occupation at the place where they are squatting comes to an end and they are re-settled at a different place. For the State to make provisions to provide for or subsidise settlement or re-settlement of poor people is a desirable thing. It has taken a policy decision that squatters should not be made homeless and that they should be re-settled in a developed colony. There is nothing wrong in requiring the more affluent to look after or pay for the less fortunate people. For accommodating squatters the Dda will get 50% of the breakevencost and the balance of 50% of the break even cost will be distributed amongst the other allottees in the Project. In any case this is a matter of policy and, in the exercise of judicial review, it will not be appropriate for this Court to hold that the squatters, who represent the poor section of the society should not be setlled/re-settled in this Project. 178 (60) With regard to Master Plan roads it was contended by the learned counsel for the petitioners that according to paragraph 2.10 of the cost benefit analysis the Dda is required to provide land free of cost within the Project area for construction of Master Plan roads. The submission was that it is the responsibility of the Pwd or the Delhi Administration to construct roads provided by the Master Plan and the cost in respect thereto should not be added towards the cost of the project.
(61) It has been explained by the Solicitor General that, as is evident from page 134 of the Master Plan for Delhi notified in 1990, the Master Plan roads are those roads which are 30 metres and above. These are not trunk roads and what clause 2.10 of the cost benefit analysis refers to are those Master Plan roads viz., roads of 30 metres and above, which have to be constructed within the Dwarka Project. The land for this is to be provided free of cost by the Dda but the roads are to be constructed by the Pwd, Delhi. The site plan of the Dwarka Project shows the roads which are 30 metres and above within the project area and it is in respect of these Master Plan roads that the cost of land, which has to be given free of cost to the Pwd, which has been taken into consideration. It is obvious, and there is nothing wrong, that Along with other common facilities the cost of land on which roads are to be constructed, which are meant for the project, has to be taken into consideration while arriving at the price of land.
(62) It was also stated that in arriving .it the breakeven cost there has been a 12% provision for physical and price contingencies. In addition thereto Table 9 of the cost benefit analysis shows the year-wise likely expenditure on various services for development of Dwarka Project Phase-I. One of the items which is taken into consideration while working out the total expenditure from the year 1991 to 1997-98 of Rs-615.55 crores is an item of ''MISC" totalling Rs.58.30 crores. The submission of the learned counsel for the petitioners was that when 12% provision has been made for physical and price contingencies there was no justification for taking an amount of Rs.58.30 crores into consideration under the head "MISC". It was also argued that when the system of working out the cost is by discounting and compound ing there is no reason as to why discounted interest should be taken into consideration.
(63) In our opinion examining such particulars would be traveling beyond the scope of judicial review. Whether there can be miscellaneous items or not valued at Rs-58.30 crores is not for this Court to consider. Similarly whether there is any justification for including discounted interest inflow of 12.025 crores would also be outside the scope of judicial review.
(64) Be that as it may, it appears to us that there is no error committed by the respondents as has been alleged by the petitioners. Table 9 of the said analysis enumerates different services on which expen- diture is to be incurred. The services specified in this table are (1) Road, (2) sewer, (3) water supply, (4) drains, (5) parks and (6) electricity. In addition thereto another factor taken into consideration is categorised as "MISC". As has been explained during the course of arguments, this item is a sort of contingency and also refers to other types of expenditure towards utilities which are to be incurred which do not fall directly under the various specified services like road, sewer etc. which are referred to in Table 9. Perhaps instead of using the word "MISC" the more appropriate term would have been "Others" or "Rest". The figure of Rs-58.30 crores is with respect to the expenditure on services or items other than the ones which 179 are specifically stated in Table 9.
(65) As regards discounted interest inflow, it has been contended by the Solicitor General that if interest of 12.025 crores is ignored, there would be a loss in the project. Table 2 of the said analysis provides for physical and price contingencies. In arriving at the expenditure which is to be incurred, some of the factors which are taken into consideration are development expenditure, cost of two lane master plan roads, pooling of land acquisition cost. The total discounted expenditure for the entire project of Dwarka Phase-I for the years 1986-87 to 1997-98 comes to Rs.1018.900 crores. To this is added a sum of Rs.122.268 crores being 12% provision for physical and price contingencies and the total projected expenditure for Dwarka Phase-I comes to Rs.1141.168 crores. As the project is to be a self-financing one the discounted revenue, which has been worked out in this table comes to Rs.1129.142 crores and it is only when discounted interest inflow of Rs.12.025 crores is added that the two sides balance and the projected revenue would then come to Rs.1141.168 crores. in other words if this discounted interest inflow of 12.025 crores was to be ignored there would have been a loss in the project. There is, therefore, justification for adding this amount while arriving at the break even rate per sq.mtr which was worked out, in this table at Rs. 1100.430.
(66) Lastly coming to the contention of the multiplier it was submitted on behalf of the petitioners that members of the Cooperative Group Housing Societies are not affluent persons. In arriving at the cost of Rs.1650.65 per sq.mtr, the respondents have applied a multiplier of 1.5 in so far as the cooperative housing societies are concerned. The contention was that by being asked to pay 1.5 times the break even cost was discriminatory as the Cooperative Group Housing Societies' members a re similarly Linced to the applicants who fall under the Middle Income Group(MIG). The multiplier which has been applied to the Mig category applicants who will be allotted flats constructed by the Dda is l.250.
(67) While it may not strictly be within the scope of judicial review in examining whether the multiplier should have been l.50 or 1.250, still the justification for applying this multiplier has been furnished by the Solicitor General. It has been submitted by him that the Cooperative Housing Societies have been clubbed with the applicants of flats under the Self Financing Scheme (SFS) of DDA. According to the learned Solicitor General keeping in view the Floor Area Ratio (FAR) and the housing density which is provided for in the Master Plan, there can be 119 to161 dwelling units constructed on 10,000 sq.mtr area. The Far being 133 the average size of the flat,depending upon the number of dwelling units, will vary from 82 to 111 sq.mtr but the average will be about 95 sq.mtr. On the other hand the range of the Sfs category flats is from 74 sq.mtrs to 138 sq.mtrs. Middle Income Group flats average 65 sq.mtrs and Lower Income Group flats have an average size of 40 sq.mtrs. Apart from the sizes of flats which are likely to be constructed by the Group Housing societies being similar to that of Sfs flats, the other feature which is common to both is the method of financing. Both in regard to Sfs flats as well as flats to be constructed by Group Housing Societies, people invest money towards the construction of the flat. It is from the moneys which are contributed by the members of the Cooperative Group Housing Societies that the flats are constructed just as an Sfs registrant has to pay Installments which go towards meeting the cost of construction of flat by the DDA. It was also submitted that Middle Income Group has been defined in Rule 2(h) of the Nazul Rules,1981 as meaning a group of persons, the total annual income of the family of 180 everyone of whom exceeds Rs.7200 but does not exceed Rs.l8,000.00 . These amounts can change with the notification being issued by the Central Government, but this has not been done. The member of a Group Housing Society would most likely be a person whose average income would be in excess of Rs.l8,000.00 per annum. These members cannot, therefore, be equated with the Middle Income Group. In our view, therefore, there was justification for the respondents in equating the Cooperative Group Housing Societies with the applicants of Sfs flats inasmuch as the Sfs flat holders are required to pay at amultiplier of 1.50 and there is no reason as to why a different multiplier should be applied to the Group Housing Soceities.
(68) In view of the aforesaid it is not possible for us to accept the contention of the petitioners that the rate of Rs.1650.65 per sq.mtr is unreasonable and should bequashed. The cost benefit analysis which has been furnished to this Court, relevant portions of which have been extracted by us, clearly indicates the policy and the method adopted by the respondents in arriving at the pre-determined rate envisaged by Rule 2(1) of the Nazul Rules. We do not find any irrelevant factor having been taken into consideration or arelevant factor ignored while arriving at the pre-determined rates. In discharge of its social obligations the Government is entitled to charge different prices from different categories of allottees. It is obvious that the entire land which is acquired is not sold. Nearly 50% or more of the land which is acquired, after development, goes into making provisions for common facilities or allotment of land at subsidised rates. For example land is allotted to eductional institutions and hospitals etc. at a highly discounted rate. No price is realised in respect of land which is used for parks and roads. The Dda is supposed to work on the principle of "No Profit No Loss". At the same time needs of different sections of the society have to be catered to. In a welfare State housing for the poor has to be subsidised. This can only be done at the cost of the more affluent. Inarriving at the pre-determined rate of Rs.1650.65 per sq.mtr the petitioners no doubt, will be paying more than the break even rate but looking at the project as a whole the Dda, at least on paper, is not making any profit. If the contention of the petitioners is to beaccepted and the rate of Rs. 1650.65 per sq.mtr. is to be lowered to Rs.975.00 the entire working or costing of the project will have to be re-done which will not only delay the implementation of the project, which will benefit noone, but will also result in the Government having to load this shortfall on some other category of allottees. The respondents have carried out avery detailed cost benefit analysis and we find no error having been committede in arriving at the pre-determined rate of Rs. 1650.65.
(69) It is no doubt true that the method for fixing the rate at Rs.1650.65 is different than the conventional method which was adopted when rate "was fixed at Rs.975.00 per sq.mtr. Explaining the conventional method and highlighting its drawbacks it has been submitted by the respondents that under this method, total expenditure on the project is first calculated. Expenditure on land is worked out by taking into account the prevailing land rate. No consideration is given to investment already made. To the land costs, the development expenditure is added. The sum total of the estimated expenditure on acquisition of land and its development as arrived at in the above manner is distributed over the anticipated net saleable area. This cost of land per sq.mtr which roughly came to Rs.975.00 per sq.mtr was adopted as the rate to be charged from Cooperative Societies in Dwarkain 1990-91.At that time the issue of resource gap in the revenues which would be foregone because of land being allotted at concessional rate for uses such as Janita, Lig Mig, social, religious and charitable institutions was not gone into. The absence of 181 realisation that relatively higher-returns from the disposal of commercial plots will not alone meet the gap was a major inadequacy of the conventional method of price fixation.
(70) Shri Rakesh Munjal, appearing for one of the petitioners, has also contended that the Cooperative Group Housing Societies were registered with the Dda nearly ten years ago. With the passage of time membership of most, if not all, of the cooperative societies has decreased. Either some of the members have resigned or they have not paid their dues. The allotment of land by the Dda has been made on the basis of the number of members of each society available at the time of registration.
(71) In order to get allotment from the Dda a coopertive group housing society had to have a minimum of 60 members as the smallest plot of land which the Dda was willing to allot was approximately 4000 sq.mtr. The Dda, in turn, have demarcated plots of land according to the size of the societies. It is on the basis of the membership of the societies, as on the date of registration, that the plots were allotted, by a draw of lots and demands raised.
(72) Most of the societies have found it difficult to pay the amount demanded. Some of the persons have ceased to be members or even been expelled and the vacancies have not so far been filled. It is difficult, if not impossible, for the remaining members to pay the amount demanded, which amount has been calculated on the basis of the total number of members of a society at the time of registration. It was further submitted that the Dda took a number of years in developing and offering land for allotment and because of lapse of time a number of vacancics have occurred. The further contention is that because of the enactment of Rule 41A of the Cooperative Societics Rules it has not been possible for the cooperative group housing societies to fill up the vacancies.
(73) The challenge before us,therefore, is to Rule 41A which was first incorporated in the Delhi Coperative Societies Rules vide Notification dated 2nd November, 1990, issued under Section 97(1) of the Delhi Cooperative Societies Act.
(74) Section 4 of the Delhi Cooperative Societies Act, 1972 refers to the societies which may be registered under the Act. Sub-section (l) of Section 4, inter alia, provides that a society which has as its object the promotion of the economic interests of its members in accordance with co-opertive principles, or a society established with the object of facilitating the operations of such a society may be registered under the Act. Section 20 specifies who can be the persons who may become members of the cooperative societies. The said section reads as under: "20.Persons who may become members: (1) No person shall be admitted as member of a co-operative society except the following, namely (a) an individual competent to contract under section 11 of the Indian Contact Act, 1872, (Act 9 of 1872); (b) any other co-operative society; (c) the Central Government; and 182 (d) such class or classes of persons or association of persons as may be notified by the Lieutenant Governor in this behalf; Provided that the provisions of clause (a) shall not apply to an individual seeking admission to a society exclusively formed for the benefit of students of a school or college. (2) Notwithstanding anything contained in sub-section (1), the Lieutenant Governor may, having regard to the fact that the interest of any person or class of persons conflicts or is likely to conflict with the objects of any society or class of societies, by general or special order, published in the Delhi Gazette, declare that any person or class of persons engaged in or carrying on any profession, business or employment shall be disqualified from being admitted, or for continuing, as members or shall be eligible for membership only to a limited extent of any specified society or class of societies, so long as such person is or such persons are engaged in or carrying on that profession, business or employment, as the case may be."
(75) The power to make rules under the Act is conferred by Section 97. One of the rules which was framed under this provision was Rule 25. What is relevant for this case is Rule 25(l)(c) which is as follows; "25(1)No person shall be eligible for admission as a member of a cooperative society if he - (a)......... (b)......... (c) in the case of membership of a housing society: (i) he owns a residential house or a plot of land for the construction of a residential house in any of the approved or unapproved colonies or other localities in the Union Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children, on lease holder freehold basis provided that disqualification as laid down in sub-rule (l)(c) (i) shall not be applicable in case of persons who arc only co- sharers of joint ancestral properties in congested localities (slum areas) whose share is less than 65.72 sq.meters (80sq.yards) of land; (ii) he deals in purchase or sale of immoveable properties either as principal or as agent in the Union Territory of Delhi; or (iii) he or his spouse or any of his dependent children is a member of any other housing society except otherwise prmitted by the Registrar."
(76) Prior to 2nd November, 1990 a Cooperative Society, after its registration, could fill up vacancies which may have occurred on the resignation or expulsion of members. Rule 41A of Delhi Cooperative Societies Rules, 1973, when notified on 2nd November, 1990 put restriction on this power to fill up vacancies. The said Rule 41A reads as under: "41A.Notwithstanding anything contained in these rules or the bye- laws of the Cooperative Group Housing Societies, a vacancy arising as a result of resignation, kexpulsion and cessation of membership in such societies, shall not be filled in the period between the verification of the list of members by the Registrar and the allotment of land by the Delhi Development Authority and a vacancy arising after such allotment of land may be filled only from among the willing registrants for flats with the Delhi Development Authority under the self-financing scheme in the order to be determined by draw of lots. The aforesaid restrictions on filling of vacancies in membership shall not apply after allotment of flats".
(77) On behalf of the Administration it has been stated that with a view to widen the scope of enrolment of members to cooperative societies it was decided that one more category should be added to the category of Dda registrants so as to ensure that the societies did not suffer financial inconveniences for want of adequate number of members. The Administration, therefore, decided to amend the newly incorporated Rule 41 A with a view to facilitate migration from one society to another. Accordingly by another Notification dated 19th August, 1991 the earlier Rule 41A was replaccd by a new Rule 41A which reads as under: "41-A.Notwithstanding anything contained in these rules or the bye- laws of the Cooperative Group Housing Societies, vacancy or vacancies arising as a rsult of resignation, expulsion and cessation of membership in such societies shall, until the allotment of land is made to them by the Delhi Development Authority, not be filled up. Vacancy or vacancies arising after the allotment of land to such societies shall be filled up from amongst the willing registrants for flats with the Delhi Development Authority under its self-financing schemes or from amongst the members of other co-operative group husing societies, which are yet to he allotted land by th Delhi Development Authority or from amongst the members of such societies, ashave not reached the stage of construction of flats,"
(78) Before considering the rival contentions it will be appropriate to analyze the said Rule, as it was enacted on 2nd November, 1990 and the amendment which was brought about with the promulgation of the fresh Rule on 19th August, 1991.
(79) Rule 41A, as incorporated on 2nd November, 1990 is firstly a non-obstantive rule. It overrides the cooperative societies rules as well as the bye-laws of any society. Secondly between the period of verification of the list and allotment of land by the Dda it prohibited the filling up of any vacancy. Thirdly vacancy arising after allotment of land could be filled only from willing registrants for flats with the Dda under the Sfs Scheme. Fourthly the restriction so imposed on the filling up of vacancies of membership was not 184 to apply after allotment of flats by the cooperative societies.
(80) The effect of this clearly was that the right of the cooperative societies to choose their members ceased to exist. New members could even be those persons who may not be subscribing to the objects of the society.
(81) The new rule which was promulgated on 19th August, 1991 had practically all the same ingredients as the earlier rule except that vacancies now could also be filled from among members of other cooperative societies. There is one more important amendment which was made and that is that whereas the earlier rule framed on 2nd November,1990 provided that the restriction contained in Rule 41A for filling the vacancies was not to apply after the allotment offlats, in the new rule of August 19, 1991 this portion of the earlier rule has been deleted with the result that for all times to come, whenever a vacancy in the membership arises even after flats are constructed and allotted, the restriction contained in Rule 41A would be applicable to every such cooperative society.
(82) During the pendency of these writ petitions, at the time when applications for interim relief were being argued, the difficulty of filling up the vacancies which had arisen either because of resignation or death or expulsion of members was canvassed. Counsel for the Registrar, Cooperative Societies, Delhi bad placed on record a letter dated 16th December, 1992, which was subsequently followed by a formal order dated 5th January, 1993 issued under Rule 155 of the Delhi Cooperative Societies Rules,1873. By this order the Lt. Governor of Delhi exempted 257 cooperative grouphousing societies, to whom allotments had been made in Phase-I of Dwarka Project, from the provisions of Rule 41A to the extent that these societies were allowed to fill up vacancies as had arisen as a result of resignation, expulsions or cessation of membership before the offer of land by the DDA. These vacancies could, however, be filled, as per the said letter, from only. "AMONGSTthe registrants for flats with Delhi Development Authority under its Self Financing Scheme or from amongst the members of other Cooperative Group Housing Societies which are yet to be allotted land by the Delhi Development Authority."
(83) Pursuant to the aforesaid order dated 5th January, 1993 a large number of advertisements were inserted in various newspapers by different Cooperative Group Housing Socicties in an effort to lure registrants of flats under the Sfs scheme and also other members of the Cooperative Group Housing Societies to become members of these societies to whom land had been allotted but where a number of vacancies existed. We are informed that pursuant to the said advertisements a negligible number of applications for change, possibly 18 in all, have been received. It was contended by the learned counsel for the petitioners that despite amendment to Rule 41A and relaxation vide order dated 5th January, 1993 the Cooperative Societies, including the petitioners, are unable to fill up the vacancies and are, consequently, not in a position to pay the amounts demanded by the DDA. It is under these circumstances that theie is a serious challenge to the validity of Rule 41A.
(84) The first contention, in this behalf of counsel for the petitioners is that Rule 41A is ultra vires, unreasonable, arbitrary and is also contrary to the basic principles of cooperation. As already noted Section 4 of the Delhi Cooperative Societies Act, inter alia, 185 refers to the society being required to promote interests of members according to "Cooperative Principles" in order to get itself registered. What are the Cooperative principles have been dealt with by a single Judge of this Court in the case of Navjivan Cooperative House Building Society V.Delhi Cooperative Tribunal, Delhi, 1988 Cooperative Law Journal 75. While referring to the book entitled "Indian Cooperative Laws vis-a-vis Cooperative Principles" written by Shri P.E.Weeraman it was observed in the said case of Navjeevan Cooperative Society that there are six cooperative principles and they are all equally important and they form a system and are inseparable. These six principles are as follows: "(I)Voluntary and open membership; (ii) Democratic control; (iii) Limited interest on capital; (iv) Equitable division of surplus; (v) Co-operative Education; (vi) Co-operation among cooperatives"
(85) At page 82 of the judgment it was observed by the learned Single Judge in Navjivan Cooperative Society's case, while referring to the principle of voluntary and open membership as follows: "THEprinciple that the membership shall bevoluntary in the Cooperative Society means that: (i) a person who joins a cooperative society of his own free will, and (ii) the society which admits a person into its membership should likewise do so voluntarily. The principle of open membership is that: (i) ther shall be no artificial restriction on the admisison of members; (ii)theres hall be no social, political, racial or religious discrimination against persons who wish to join, and (iii) membership shall be available to all pesons who need and can make use of the society's services and are willing to accept the responsibilities of membership. The principle of voluntary, open membership would natural- lyexclude the state from becoming a member of a Cooperative society, and would exclude the state interference in the affairs of the society."
(86) We are in full agreement with the aforesaid principles. Rule 41A, however,setsat naught the main principle of voluntary and open membership. The right of a society to admit like minded persons as its members has ceased to exist. The non-obstantive clause of Rule 41A overrides the bye-laws. More often than not the cooperative group housing society provide for type of persons who can be members of the society. For example 'there may be a cooperative group housing society of members of the High Court Bar Association which may require, as a condition of eligibility, that only a person who is a member of the High Court Bar Association would be eligible to join the cooperative society. The effect of Rule 41A,howevcr, will be that vacancies in the cooperative societies can even be filled from amongst those members of cooperative societies who may not be members of the High Court Bar Assocaition. This is an example which will show that Rule 41A negates the very principle of voluntary and open membership which is so essential to the spirit of cooperation among the members. It is always like minded persons who join together and form a cooperative society. If members are thrust on the society then the spirit of co-operation and comradeship will come to anend.
(87) 87. We have, therefore, no hesitation in coming to the conclusion that the said Rule 41A is contrary to the cooperative principles and, therefore, is in conflict with Section 4 of the Delhi Cooperative Societies Act.
(88) It was submitted by the learned counsel for the respondents that this Rule was promulgated with aview to check the mal-practices of sale of membership by the societies and to give preference to Dda registrants in the matter of allotment of flats through cooperative societies as these registrants had been a waiting for a number of years but have not been able to secure flats from the DDA. Whatever maybe the object of enacting Rule 41 A, it does appear to us that it is clearly opposed to the basic concept of cooperative movement. Cooperative societies must be free to choose their members.
(89) It was contended by Shri Mahajan that this Rule 41A was promulgaed in exercise of the powers conferred by Section 97(2)(v). The said provision reads as under: "97.Rules. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: (v) the conditions to be complied with by persons applying for admission or admitted as members, for the election and admission of members, and for the payment to bemade and the interest to be acquired before the exercise of the right of membership."
.This provision has nothing to do with Rule 97(1) which gives power to the Lt. Governor to make Rules to carry out the purposes of this Act. lt is in this connection that clause(iv)of Rule 97(2) provides for rules being made which may specify conditions to be complied with by the persons applying for admission to a society. This rule has to be read along with Section 20(l) of the Act. Section 20(l) inter alia, gives a right to an individual who is competent to contract to become a member of a cooperative society. No rule under Section 97(2)(v) can be so framed as to take away this right which is conferred by the substantive provision viz., Section 20(l). Clause (v) of Section 97(2), read in this context, can only relate to the provision being made regarding the procedural requirement to be complied with by a person applying for admission as member of a cooperative society. 187 (90) The problem may be viewed from another angle. Whereas sub-section (1) of Section 20 provides for persons who may become members of a society but sub-section (2) of section 20 gives an overriding power to the Lt. Governor to declare what persons or class of persons are to be disqualified from being admitted or continuing as members of a society. It is pertinent to note that sub-section (2) enables the Lt. Governor to exercise powers only in those cases where the interest of any person or class of persons conflicts or is likely to conflict with the objects of the socicty or class of society.For example under Rule 25(c)(ii) no person is eligible for membership ofa housing society if he deals in purchase or sale of immoveable properties either as member or as agent in the Union Territory of Delhi. No power is given to the Lt. Governor under sub-section (2) of section 20 to debar any other person from becoming a member of a cooperative society. The restriction on the right conferred by sub-section (1) of section 20 is only contained in sub-section (2) of section 20 and the right under section 20(1) can certainly not be curtailed by framing of a rule in exercise of the powers under section 97 of the Act. The impugned rule, therefore, cannot be regarded ashaving been validly enacted under the provisions of Section 97(2)(v) of the Act.
(91) Rules are framed for the purpose of carrying out the Act. The Act and the Rules envisage that vacancies can occur from time to time. It is obvious that the vacancies have to be filled. Rule 41A which has now been framed in effect has prevented the vacancies from being filled. In the instant case though a large number of vacancies exist we were informed, at the time of arguments that only 18 applications for change of membership as per rule 41A were received. With the co-operative societies being prohibited from filling vacancies except in accordance with Rule 41A, the effect of this rule is that the functioning of the co-operative societies gets jeopardised. For example in order to get land from the Dda the minimum membership of a cooperative society must be 60. If the number tails below this figure, because of vacancies and they cannot be filled because of the restriction placed by Rule 41A the effect would be that the society will loose its right to allotment of land by the DDA. That is precisely the case before us where a number of cooperative societies had contended that with the passage of time their membership has fallen below 60 and inview of the restriction placed by Rule 41A it has not been possible to fill up the vacancies.
(92) There is also considerable force in the contention of the learned counsel for the petitioners that Rule 41A is also violative of Article 19(l)(c) of the Constitution, which gives citizens right to form associations. No doubt under sub-article (4) of Article 19 reasonable restriction on this right may be imposed but the question is whether this Rule 41 A places a reasonable restriction? Looking at the fact that even after limited relaxation of Rule 41A the coopeative societies have been unable to fill up the vacancies we have no doubt that the restriction which is placed by Rule 41A is clearly unresonable. To frame an unworkable rule cannot be regarded as a reasonable restriction as contemplated by sub-article (4) of Article 19. The right to form associations being an important fundamental right any restriction which is placed there on will have to be closely examined. When it was demonstrated before us that the entire activity of the cooperative societies to obtain land from Dda and construct flats will befrustrated because of the societies being unable to fill up the vacancies in view of Rule 41A it must follow that the said rule places an unrasonable fetter on the formation and running of the society and is, therefore bad in law. 188 (93) In our opinion Rule 41A as originally framed on 2nd November, 1990 and also as re-framed on 19th August, 1991 is ultra vires Section 4 and 20(1) of the Act as well as ultra vires the rule making power contained in Section 97 of the Act and the said rule is accordingly quashed. The result of this would be that the vacancies occurring in the cooperative societies can be filled by the societies concerned without the impediment which has been created by Rule41Aand in accordance with law.
(94) It was lastly contended by the petitioners that those societies which bad deposited the money pursuant to the allotment of 1991 but were again allotted land on the basis of the revised seniority, should be awarded interest on the amounts already deposited.
(95) Clause 6 of the original letter of allotment issued on 25th January, 1991 not only provided that the allotments were subject to final decision of the cases regarding seniority which were pending in this court but it also provided that "IFas a result of the said decision the allotment was reviewed or cancelled then, in that event, the entire amount received by Dda from you shall be refunded without any interest and you shall have no right to claim for any compensation/damages/alternative allotment, on any ground whatsoever".
(96) While quashing the allotments which had been made in the year 1991 to 1983 societies this Court, in Kaveri Cooperative Society's case (supra) had, inter alia, directed that it would be open to the respondents to refund the money to all those 260 societies to whom allotments had been made and who had paid the allotment money but whose allotments had been quashed. No directions were issued with regard to payment of any interest.
(97) The aforesaid clause 6 of the letter of allotment dated 25th January, 1991 clearly stipulated that no interest was payable by the Dda on the cancellation or review of the allotment. It appears to us that it is wholly immaterial whether the societies to whom original allotment had been made are, subsequently re-allotted land. These societies, like the petitioners of the second category; cannot get a more beneficial treatment than those societies whose allotment was cancelled and have not been re-allotted land. On the allotments being quashed all the societies who had deposited money became entitled to refund of money and according to clause 6 of the allotment letter no interest was payable. This clause is applicable irrespective of the fact whether any one of those societies was re-allotted land or not.
(98) As already observed, while disposing of the Kaveri Co-operative Society's case this Court held that it was open to the respondents to refund the money. The respondents apparently did not refund the money on their own after the decision of the High Court possibly for the reason that an appeal had been filed and the same was pending in the Supreme Court. Nevertheless once the appeal was dismissed by the Supreme Court the Dda was bound to refund the money.
(99) Our attention has been drawn to the decision of the Supreme Court in Sriniketan 189 Co-op. Group Housing Society' v. Vikas Vihur Co-op. Group Housing Society, . In this case allotments which had been made to the societies had been quashed even though money had been paid by them. At page 387 of the judgment it was observed by the Supreme Court that the Government was duty bound to refund the amounts paid by the cooperative societies towards the cost of land together with interest. In this connection it was observed that: "THEGovernment has had the benefit of the amounts deposited by the cooperative societies towards the cost of land for all these years and the members of the societies have suffered loss of interest. We, therefore, direct that in the event of the Government deciding not to allot land to the coopertive societies or to allot the land only to the societies eligible for allotment as per norms and not to the other societies the Government shall refund the amounts paid by the concerned societies together with interest at 12% per annum from the date of deposit till the date of refund."
(100) It is no doubt true that payment of interest was ordered in the case of Sriniketan Cooperative Society's case (supra) but the important distinction between the present case and that of Sriniketan Cooperative Society's case is that here in the letters of allotment itself it was stated that on the allotment being cancelled no interest would be payable. Therefore, there can be no claim of interest by the societies w.e.f. the date of their deposit. Furthermore the Supreme Court contemplated interest not being awarded to those societies who were re-allotted land. Before us there is no society who had deposited the money and has not been re-allotted land. It would, however, be just and fair that if a demand for the refund is made on the Dda then the DDA. if it does not re-pay the money within a reasonable time, should be bound to pay some interest. We are informed that some of the cooperative societies had written to the Dda for refund of money. If the Dda did not refund the money on its own then it would be unfair and it would not be entitled to take benefit of the aforesaid clause 6 and escape the liability to pay interest when a demand for refund of the money is specifically made on it by a cooperative society. In such a case, in our opinion the Dda would be liable to pay interest @ 12% per annum, which rate was awarded by the Supreme Court in Sriniketan Cooperative Society's case (supra) w.e.f. the date the notice of demand was served on the Dda till the date of payment. This payment of interest will only be made to those societies to whom no reallotment of land has been made.
(101) Before concluding we would like 'to record that the learned Solicitor General had stated that the pre-determined rate of Rs. 1650.65 per sq.mtr was not subject to any escalation and if the societies complied with the terms of allotment and made payments as and when demanded and in accordance with the Nazul Rules and did not commit any default then the respondents will not be entitled to change or enhance the rate from Rs. 1650.65 per sq.mtr. In other words this was a fixed rate which the societies will have to pay without any fear of escalation, provided the societies did not commit any breach of the terms of allotment.
(102) Apart from the aforesaid submission of the learned,Solicitor General we find that the pre-detennined rate of Rs.1650.65 per sq.mtr is not per se subject to escalation. The Notification which has been issucd in October,1992, fixing the pre-determined rates, does 190 not contain any escalation clause. The price staled therein is fixed. This is obviously for the reason that this price has been determined by a new method of price fixation which is based on the principle of compounding and discounting and takes into consideration the past and the future expenditure aswell as past inflow and outflow and also makes 12% provision for price contingencies. In other words all the elements which go towards price escalation have already been taken into consideration in the fixation of the predetermined rates. This being so, once an allotment has been made and the cooperative societies comply with the terms of the allotment letters the question of there being any escalation of the rate in future would not arise. It may happen that societies may commit default in payment of some Installments and if this is done the action which can be taken by the Dda will obviously have to be in accordance with law. As long as the allotment remains valid the pre-determined rate cannot be changed. Reliefs (103) For the aforesaid reasons we hold and direct that: (a) as far as pre-1983 Cooperative Geoup Housing Societies are concerned viz., Civil Writ Petition Nos. 4184/92, 4396/92 and 767/93, same are allowed and the revised demand and fresh letters of allotment issued to them by the respondents at the rate of Rs.1650.65 per sq.mtr are quashed and subject to the terms of their letters of allotment they will be liable to pay at the rate of Rs.975.00 persq.mtr. . (b)the challenge to the pre-determined rate of Rs 1650.65 per sq.mtr made by the other Cooperative Group Housing Societies who were registered in 1983 and thereafter tails. (c) we hold that the provisions of Rule 41A of the Delhi Cooperative Societies Rules are ultra vires and bad in law and the cooperative societies are at liberty to fill up their vacancies ignoring the said rule. (d) as far as the Cooperative Group Housing Societies arc concerned, it is the Lt. Governor, who is the head of Administration, who had framed the illegal rule which prevented the vacancies from being filled and consequently, resulted in payment being not made to the DDA. The rate of Rs.1650.65 per sq. mtr had been valid up to 31st March, 1993. As the demand raised at this rate could not be paid by the coopeative societies because of an illegal rule viz., Rule 41A it will be just and proper to extend the time so as to enable the cooperative societies to fill up the vacancies and to make the payment as demanded, we, therefore, direct that petitioners and other co-operative societies who are similarly situate will be entitled to make the payments, as had originally been demanded @ Rs. 1650.65 per sq. mtr by 30th April, 1993 without incurring any other liability including interest.
(104) There will be no order as to costs.