Punjab-Haryana High Court
Duli Chand Gupta And Others vs Chandigarh Housing Board on 4 March, 1994
Equivalent citations: AIR1994P&H222, AIR 1994 PUNJAB AND HARYANA 222
ORDER
Duli Chand and 65 others through present petition filed by them under Arts. 226/227 of the Constitution of India seek issuance of writ in the nature of mandamus directing respondent-Chandigarh Housing Board not to enhance the price of flats/dwelling units of Category-III situated in Modern Residential Complext, Manimajra in the Union Territory, Chandigarh, which, flats or dwelling units, were offered to them on hire-purchase basis. The hike in price is styled to be arbitrary, unreasonable and unjust. The facts, from which the relief aforesaid stems, as depicted in the petition, need a necessary mention.
2. Respondent-Board, vide its advertisement published in the 'Daily Tribune' in. May, 1989, offered 1392 flats to be constructed in an exclusive Residential Complex at Manimajra in the Union Territory of Chandighar for general public. Out of 1392 flats, 624 flats comprised in Categories I and II were so offered under 'Self Financing Scheme' whereas 768 flats comprised in Categories III and IV were offered to the general public on the basis of 'Hire-purchase Scheme' on easy instalments. The last date for filing applications was July 8, 1989 which was lateron extended to July 15, 1989. The Brochure-cum-application form included schedule of payment and other terms and conditions. While giving salient features of the Modern Housing Complex, it was, inter alia, provided and held out to the public at large that there was to be provision in the layout plan for shopping Centre, School, Dispensary, Community Centre/Club and each flat was to over-look green spaces. The other salinet features mentioned in the Brochure inviting applications for registration of applicants for the allotment of flats including Categories II and IV, were as follows :-
"(i) The Scheme:--
The following four storeyed flats are offered at Manimajra (Chandigarh U.T.) as per tentative layout plan on page Nos. 6 and 7:--
Category Average(*) covered Area Location No, of units Tentative price III 1043 Sft.
Manimajra O.T., Chandigarh 264 2.25 lacs IV 709Sft.
-do-
5041.50 lacs (*) covered area includes area under flat, car garage, staircase, ramps and circulation space.
MODE OF PAYMENT Initial deposit Rs. 11,000/-
At the time of registration i.e. within 30 days of the issue of acceptance-cum- Rs. 11,000/-
demand letter Three half-yearly instalments first instalment being payable on completion of six months from the date of issue of acceptance-cum-demand letter.
i) First instalment Rs. 16.000/-
ii) Second instalment Rs. 16,000/-
iii) Third instalment Rs. 16,000/-
At the time of possession Rs. 20,000/-
Balance in 144 monthly instalments including interest @ 13.5% p.a. Rs. 1.907/-(Tentativcr It was also provided that the exact price of flats would be worked out at the time of allotment after the flats were completed and the price could be increased due to variation in plinth area, scope of work change in specifications and design, increase in cost of materials and labour, cost of land or due to any other reason and the same shall be binding upon the allottee. Printed copy of the brouchure containing terms and conditions on which the said dwelling units/flats were offered, has been placed on the records of this case was Annexure P2. It is pleaded that the respondent-Board had given it out to the public at the time of inviting applications for registration and allotment of these flats/ dwelling units, though not in writing, that work on the construction of the said flats/ dwelling units would be completed within a period of 15 to 30 months and that the Board had fixed a maximim of 30 months period for the completion of the entire project and that the successful applicants in any way would start moving to their new flats/dwelling units within 15 months of the draw of lots. The representations made and held out by the Board even came to be published in the 'Daily Tribune' on July 4, 1989 before the last date for submission of application forms with a view to influence the mind of intending applicants so as to lure and induce them to file their applications for registration and allotment of dwelling units. It is also pleaded that the Board while giving advertisement in the print media such as the 'Daily Tribune' on February 11, 1990 inviting tenders from its approved builders/contractors specified a time-frame of 18 months therefrom for the completion of lats/dwelling units. According to the time frame, the flats were to be completed by or about the end of Sept. 1991. Mrs. Tajinder Kaur, Chairman of the respondent-Board, it is further pleaded sensing a strong feeling of frustration and apprehending agitational approach/action on the part of the successful applicants, both in and outside the Court on account of the failure of the Board to complete construction of the said flats within the stipulated period, made statement which was published in the 'Daily Tribune' on March 30, 1990 that the Board was keen to complete the construction of the flats within the stipulated period as any delay on the part of the Board in that behalf could result in escalation in the cost of construction of flats. Petitioners were further assured through the said statement that the despatch of allotment letters to the successful applicants would start in the very next month of April 1990 and the allottees would be in their flats latest by the end of April, 1992. Petitioners, thus, submitted their applications along with initial deposit of Rs. 11,000/- each before the last date of the registration on their names for allotment of flats in Category-111 of the scheme. The Board, after processing applications and drawing requisite draw of lots on December 4, 1989, issued accempt-ance-cum-demand letters only in the month of December, 1990 i.e. after a period of more than one year from the date of draw of lots informing the petitioners that their applications as successful applicants have been registered for the allotment of flats in Category-111 of the Scheme. They were required to make further payments in accordance with the following schedule:--
"(i) Within 30 days of the issue of this acceptance-cum-demand letter Rs. 11,000/-
(ii) Three half-yearly instalments first instalment being payable on completion of six months from the date of issue of acceptance-cum-demand letter
(i) First instalment on or before 10-6-1991 Rs. 16,000/-
(ii) Second instalment on or before 10-12-1991 Rs. 16,000/-
(iii) Third instalment on or before IO-O-I992 Rs. 16,000/-
At the time of possession :
Rs.20.000/-
Balance in 144 monthly instalments including interest (ii) 1.13.5% p a."
Rs. 1,907/-(tcntalive) Petitioners accordingly deposited with the respondent-Board further sum of Rupees 11,000/- within the stipulated period. Thereafter, each one of them made further payment of Rs. 48,000/- in three stipulated six monthly instalments with the result that each petitioner came to deposit total amount of Rs.70,000/- before June 10, 1992 with the Board. The price of each flat in Category-Ill, though tentative, was Rs. 2.25 lacs out of which an amount of Rs. 70,000/- had been deposited by each of the petitioners by June 10, 1992. The exact price of each flat was to be worked out ultimately at the time of allotment after they were complete but while working out the final/ultimate price of the flat the same could be increased, if necessary, due to (i) variation in plinth area, (ii) scope of work, (iii) change in specifications and design, (iv) increase in cost of materials and labour, (v) increase in cost of land and (vi) due to any other reason. Petitioners specifically plead that the last clause empowering the Board to increase the price, on its proper and reasonable construction, only meant that the increase in the price of such a flat could be for a valid and justifiable reason and not because of any whim, fancy or arbitrariness which is the very antithesis of 'reason' as envisaged and contemplated under the clause itself. The possession of the flats was to be given to petitioners by the end of September, 1991 and in any case by the end of April, 1992 according to the assurances held out by the Chairman of the Board for and on its behalf. Petitioners were to pay Rs. 20,000/- each at the time of getting possession and the balance amount of Rs. 1.35 lacs was payable either in lump sum or in 144 monthly instalments of Rupees 1907/- which included the amount of interest chargeable by the Board @ 13.5% per annum. However, it came as surprise to the petitioners when they received in or about the first week of June, 1993.1etter of allotment of flats whereby respondent-Board had arbitrarily and without any justification increased the price of the flat from Rs. 2.25 to 3 lacs, which too was provisional. They were required to pay an amount of Rs. 1.20 lacs instead of Rs. 90,000/-. That apart, monthly instalment payable was fixed at Rs. 2891/- instead of Rs. 1907/-. Further, instalment was to include interest chargeable by the Board @ 16.5% per annum instead of 13.5%. In paragraph 2 of the aforesaid letter it was stated that petitioners should either accept or refuse the allotment in writing so that intimation thereof must reach the office of the Board within 30 days of the issue of the letter. !n case no information was given on payment, as specified in the clause was made, Board was to presume that the petitioners were not interested and the flat was liable to be cancelled on expiry of 30 days period. Petitioners, it is pleaded, could not file objections or make representations with respect to their grievances as non-compliance of the conditions contained in the allotment letter was to result in cancellation of the allotment itself and, therefore, they have chosen to file the writ in this Court for the relief as indicated in the earlier part of this judgment. The increase in the prices, as mentioned above, has been styled to be arbitrary, unreasonable and unjust besides being actuated by mala fide considerations.
3. On the facts as stated above, learned counsel appearing on behalf of petitioners vehemently contents that the price of the flats could be increased due to variation in plinth area meaning thereby increase therein, scope of work, change in the specifications and designs, increase in the cost of material and labour, cost of land or due to any other reason. The allotment letter now issued by respondent-Board does not even remotely disclose the head or heads under and on account of which price of the flat has been increased nor any reason has been assigned therein for escalation in price. There has been not only reduction in the covered area of each flat but there has also been overall reductien in the area appurtenant to each block of 24 flats comprised in the four storeys one over the other with the resultant decrease in the green spaces around each of such block of 24 flats. This has been done on account of drastic changes brought about by respondent-Board in the original lay-out plan. It is pleaded and so argued that there were 13 blocks (each block containing 24 flats in four storeys) that were to be constructed. This lay-out plan has come to be changed and in the same total area, 19 blocks (with each block having 24 flats in four storeys) have come to be constructed. In this Way six blocks with 144 flats comprised therein have come to be constructed additionally within the same area, which has resulted in over-crowding of the area due to construction of more flats and the area of green spaces which was- to be available according to the original layout, stands drastically reduced. Scooter garages of the size of 8'.3" x 3'.7 1/2" which were to be constructed on the ground floor have been shifted in the basement with reduced area of 8'.3" x 3'. Thus, the covered area of each flat has come to be reduced by about 6 sq. feet whereas the ground area which was to be available for each block of 24 flats has been reduced drastically by about 945 sq. feet which was originally meant for the provision of 24 scooter garages for the use of owners of 24 flats comprised in each block. By reducing the width of the scooter garage to 3 feet, the very purpose of providing scooter garage has been defeated as under the reduced size of the scooter garage, it would be practically impossible for any one to park scooter therein with any convenience. It is further contended that the excavations dug underneath the ground floor for providing basement have made it unsafe for the life of children to play around and It is likely to cause drainage problem because of collection and stagnation of water during rainy Season which might even cause damage to the vehicles parked there. There has been no increase in the cost of the land which stood acquired and taken possession of by respondent-Board before the Scheme was floated in the month of May, 1989. Respondent-Board by changing the original layout of the Scheme has come to construct six blocks of 144 flats more within the same total area and has offered them to the general public on similar hire-purchase basis, thereby pocketing more money and the prices of the flats of petitioners in fact should have been decreased from the original one of Rs. 2.25 lacs. No extra expenditure has been incurred by respondent-Board towards the cost of material and about in the construction of flats in question as the contractors/ builders through whom the flats were constructed, were paid according to what had been contracted for as back as in the month of March, 1990. While originally fixing the estimated price of each flat at Rs. 2.25 lacs, the Board had taken into consideration the factor of rise in prices in the cost of materials and labour etc. at least up to the month of September, 1991 bywhich time it had planned to complete the construction of the flats and deliver possession. Under relevant clause dealing with the increase in price, respondent-Board could not have an absolute right to increase the price of flats at any time without assigning any reason in its unfettered discretion. Such a stand based upon the clause aforesaid, it is further contended, would be opposed to public policy as contained in Section 23 of the Indian Contract Act, 1872 and, thus, was not enforceable. In so far as interest is concerned, the respondent-Board was to charge the same @ 13.5% per annum on the balance amount after taking possession of the flats whereas now respondent-Board vide letter dated May 31, 1993 had arbitrarily increased the rate of interest to 16.5% per annum unilaterally without any justification whatsoever. The increase in the monthly instalments from Rs. 1907/- to Rs. 2891 /- has also been styled to be an action based upon no cogent reasons whatsoever.
4. Respondent-Board has contested the claim of petitioners and in the reply filed on its behalf through Rajesh Gupta, IAS, Secretary, Chandigarh Housing Board, it has been pleaded by way of preliminary objections that writ under Articles 226/227 of the Constitution of India is not maintainable being not an appropriate remedy. Petitioners had accepted the terms and conditions which led to the creation of a valid contract between- the parties. Pure and simple contractual matters, it is thus pleaded, could not be racked in writ jurisdiction. It is also pleaded that writ involves disputed questions of fact and for that reason as well the same is not maintainable, and the petitioners, if have any grievance, should be shown the door of Civil Court. While giving details of the scheme, it has been pleaded by respondent-Board that in the year 1989 a housing scheme was floated for allotment of Categories I and II flats under Self Financing Scheme and Categories III and IV flats under hire-purchase scheme. The tentative price of categories III and IV flats was fixed at Rs. 2.25 lacs and Rs. 1.50 lacs respectively with average covered area of 1043 and 709 sq. feet. The price stated in the brochure was nothing but only a tentative/ estimated one because it was not possible in the nature of things to determine the exact price at the time of floating the scheme. The exact price was dependent upon various imponderable factors. It was, thus, made clear explicitly in the brochure that the price of Rs. 2.25 lacs in respect of Category III flats was only tentative and that the exact price of the flats shall be worked out at the time of allotment after the same were complete. It was also stipulated that the price could be increased due to variation in plinth area, scope of work, change in specifications and designs, increase in cost of material and labour, cost of land etc. or due to any other reason and the same shall be binding upon the allottee. The relevant clause dealing with this precise condition reads thus :--
"The exact price (consideration money) of the flat shall be worked out at the time of allotment after the fiats are completed. The price can be increased due to variation in the plinth area, scope of work, change in specifications and design, increase in cost of materials and labour, cost of land etc. or due to any other reason and the same shall be binding upon the allottee."
Further, respondent-Board reserved its right to increase or decrease the number of flats depending upon the actual feasibility at site during the course of construction and it also reserved the right to make modifications in the designs, scope of work, specifications and price without assigning any reasons. The relevant clause reads thus :--
GENERAL :
1. The Chandigarh Housing Board reserves the right to increase or decrease the number of flats depending upon the actual feasibility at site during the course of construction. Similarly, the Board also reserves the right to change the facilities and specifications shown in various plans appended to the brochure. The Board also reserves the right to make variations in the sizes of the individual rooms and over all covered areas as per actual construction. The various plans as given in the brochure are for the general information and for guidance of the intending purchasers of these flats. The Board further reserves the right to make modifications in the design, scope of work, specifications, and price without assigning any reasons. The land will be on lease-hold basis on the prescribed terms and conditions laid down in the Capital of Punjab (Development and Regulation) Act, 1952 and Rules and Regulations made thereunder from time to time."
The petitioners, after going through the terms of the scheme, applied for allotment of Category III flats on the prescribed application form and gave undertakings at the end of the application form that they shall abide by the terms and conditions of the scheme and provisions of the Chandigarh Housing Board (Allotment, Management and Sate of Tenements) Regulations, 1979 and also to pay higher price due to fluctuation in the price of the building materials, labour charges, land costs etc. or due to any other reasons and the price of the flat finally fixed by the Board shall be binding upon them. The Undertaking runs thus :--
"18. It is certified that :
(a) I have carefully gone through and understood the terms and conditions of the Scheme and the provisions of Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations, 1979 and do hereby undertake to abide by the same. I also undertake to pay higher price due to fluctuation in the price of the building materials, labour charges, land cost etc. or due to any other reasons and the price of the flat finally fixed by the Board shall be binding upon me. I shall abide by the terms and conditions of allotment which may be altered by the Chandigarh Housing Board, Chandigarh from time to time and shall enter into such agreement with the Board as stipulated. I further undertake to accept any dwelling unit on any floor at the different price and in any sector which may be allotted to me by the Board.
(b) I shall not claim any interest on the amount of the deposit made in consideration of allotment of dwelling unit under this scheme."
The application form also contained a declaration furnished by all the applicants including petitioners and the same was duly attested by Oath Commissioner/Magistrate I Class. A copy of this undertaking has been placed on the records of this case as Annexure R-2. In view of the relevant clauses reproduced above, the case of respondent-Board is that a valid contract has, thus, come into existence between the parties which was complete and the parties are bound by it. It has also been pleaded that petitioners have deliberately and consciously made false and misleading statements that the Board had earlier fixed the price of Category III flats at Rs. 2.25 lacs and had enhanced the same to Rs. 3 lacs. On merits, the allegations as made in the petition have been by and large denied.
5. Maintainability of writ petition need not detain us for a long time as Mr. Gupta, learned counsel for the petitioners himself pleads that it is only if the escalation in the prices of the flats is held arbitrary and has come about without any cogent reasons that the writ under Article 226 of the Constitution of India shall be maintainable. Mr. Aggarwal, learned Senior Advocate, appearing on behalf of respondent-Board, however, contends that it is a case of completed contract and the -only remedy for the petitioners is to get the matter determined from the Civil Court and it is for the Civil Court to find out as to whether there was any justification for increasing the prices. In the context of the submissions made by learned counsel for the petitioners if a complete justification is found out to increase the prices, writ shall not be maintainable. That being so, it shall be necessary to find out the justification pleaded by respondent-Board. It is made out from the reading of the written statement that the Chandigarh Housing Board has been established with the object of providing measures to be taken to deal with and satisfy the need of housing accommodation in the Union Territory of Chandigarh. The Chandigarh Administration allots land to respondent-Board at reserved price which is far below the market price of the land. Respondent-Board manages finances from the Housing Urban Development Corporation Limited (HUDCO), a Government of India undertaking, which provides finances at cheaper rates of interest to all the housing and land development agencies throughout the country. It is stated that it is for the aforesaid reasons that respondent-Board is able to provide houses to the lower middle class of the society at much cheaper rate which is also payable in monthly instalments over a period of 12 to 15 years depending upon the repayment schedule fixed by HUDCO. In the very nature of things it is not possible for respondent-Board to fix the exact price of the houses which are to be constructed over a period of 3 to 4 years at the time of inviting applications as the cost of construction depends upon various imponderables, like land price finally charged by the Chandigarh Administration, the increase in prices of building materials, labour rates and rate of interest to be charged by HUDCO for providing finances for the construction of houses. It is further pleaded that the Board gives an estimated price of the flats with the stipulation that the exact price of the fiats shall be fixed at the time of allotment on their completion. In the brochure, therefore, it was clearly stipulated that the price is only tentative and can be increased due to rise in the cost of building materials, labour charges, land rates etc. or for any other reason. The housing scheme in question was floated for construction of 1608 flats of different categories in the year 1989. Tentative cost of category III flat with average covered area of 1043 sq. ft. was given as Rs. 2.25 lacs and it was made clear that exact price of the flats shall be worked out at the time of allotment after the flats were completed. Petitioners applied for allotment of flats after going through the terms and conditions mentioned in the brochure and gave an undertaking to accept the prices as fixed by the Board. An amount of Rs. 20,000/ - was to be deposited at the time of delivery of possession and remaining amount was to be paid in 144 monthly instalments of Rs. 1907/- each. The amount of instalments was also tentative. It is categorically denied that any promise was given to petitioners for handing over flats to them within 15 to 30 months. It is pleaded that in the very nature of things no such promise could be held out as the construction of flats was to depend upon so many factors. As per terms of the scheme and schedule of payment given in the acceptance-cum-demand letter issued in the month of December, 1990 to the successful applicants of category III, they were required to deposit 40% of the price of dwelling units by the end of December, 1992 as the 3rd six monthly instalment of Rs. 16,000/- was payable by June 10, 1992. It is also pleaded that there could be no reason to influence the minds of petitioners so as to induce them to file applications seeking registration and allotment of dwelling units. The number of applications received against 264 flats of Category III for general public was 6304. Tenders were called in the month of February, 1990 for different groups of houses and tenders were opened in the month of March, 1990. Works were allotted in respect of 216 flats in the months of April and May, 1990 and the civil work was to be completed within 18 months. Infra-structures were, obviously, to be completed after the completion of civil work, It is, thus, pleaded that the presumption drawn by the petitioners from invitation of tenders that the flats would be completed within 15 to 30 months is not based on sound reasoning but is a mere guess. In so far as statement of the then Chair person of respondent-Board, Mrs. Tejinder Kaur, is concerned, it is stated that, no doubt, the Board was always keen to complete the construction of flats at the earliest possible time to avoid escalation in the course of construction but respondent-Board could not manage due to reasons beyond its control. Start of construction was delayed by six months in view of the directions of the Government to revise layout plan. Activity schedule has been given vide Annexure R-3. The same shows that preparation of layout and preliminary architectural plans were made in February, 1989 and the scheme was floated in July, 1989. The processing of applications to hold draw of lots was done in November and December, 1989. The area plan, survey plan, contour plan and development plan (regarding infra-structure) of the area was prepared and tenders were called from January, 1990 to March, 1990. Civil works for 216 flats were allocated and tenders recalled for 96 units in April and May, 1990. The possession of the land after approval of detailed area/survey was taken in June, 1990. The Chandigarh Administration, however, decided to revise layout plan to accommodate more units and, therefore, revised layout was prepared and preliminary architectural plans and civil works for 96 flats were allotted from July, 1990 to September, 1990. Revised layout and detailed architectural plans were prepared from September, 1990 to October, 1990. Civil work for all the 312 flats was completed except passages which could not be completed due to non-provision of Public Health Lilies by the Chandigarh Administration by August, 1992. Draw of lots for allotment of units was held on February 19, 1993. All 312 flats were completed in March, 1993. Other details with regard to tenders that were called for constructing Category HI houses (312), have also been given in Annexure R-3. In view of the facts, as detailed above, it is, thus, vehemently denied that any assurance was given to petitioners that they would be in their flats by the end of April, 1992. The price of the dwelling units, it is further the case of respondent Board, has been worked out on the basis of actual cost of construction and not arbitrarily. However, even this price of Rs. three lacs is stated to be tentative for the reason that when respondent-Board approached the Chandigarh Administration in 1992 for reduction in the land cost and the Engineering Department of respondent-Board furnished the price to be finally worked out in respect of Category HI flats at Rs. 3.13 lacs without adding any interest on the cost of finances i.e. interest on investment of the Board by raising loan from HUDCO for the construction of flats, interest on cost of land, guarantee fee for raising loan from HUDCO and profit of 10%, the Chandigarh Administration instead of reducing the rate of land decided in 1993 that respondent-Board should charge price at Rs. 3 lacs instead of 3.13 lacs which meant reduction in the amount of profit by about Rs. 13,000/-. Respondent-Board instead of delaying the matter by referring the same back to the Administration for reconsideration, decided to issue allotment letters at the price of Rs. 3 lacs provisionally. That was done in May, 1993 to avoid further escalation in the price of the units due to interest on the investment beyond 31-5-1993. The Board again took up the matter which Chandigarh Administration and brought out that by fixing the price at Rs. 3 lacs, it would suffer a loss of about 2.49 crores. After the matter was discussed with the Chandigarh Administration in August, 1993, it was decided that respondent-Board may not go by the price unilaterally determined by the Chandigarh Administration and it may recover all expenses incurred by it and will charge reasonable profit. Accordingly, Board worked out the price on the basis of actual cost of construction by charging 8% profit instead of 10% as envisaged at the time of floating the scheme and at the time of furnishing the cost of the units to the Chandigarh Administration in 1992. The Board, in the manner aforesaid, sacrificed its profit by Rs.6861/-per unit and fixed the price at Rs. 3.75 lacs which is to be charged from the allottees without any further increase. The details of the prices fixed by the Board in the manner aforesaid, have been given in Annexure R-4. A bare glance of Annexure R-4 giving breakup of consideration money in respect of 312 Category III units at Manimajra would make it amply clear that it has been worked out in a proper manner without in any way attempting to fleece the petitioners on any count that may be called irrational, illogical or arbitrary, same is as under :--
Category Building including P.H. El & Depttl. charges @ 10% Cost of land @Rs.600/-pet sq,yd.
Interest on B P. @ 16% from 15-11-90 to 30-9-91 (320 days) &@ 16.5% form 1-10-1991 to 315-93 (20 months) (on average basis) on Rs. 2,05,220/-(Rs. 2.64,220 less Rs. 59,000) advance deposited by the allottee Intt. on cost of land @ 15% from 1-6-90 to 14-11-90 (167 days) & @ l6% from 15-11-90 to 30-9-91 (320 days) & @ 16.5% from 1-10-91 to 31-5-93(20 months) Total of cols. 2 to 5 Profit @ 8% Grand total 1 2 3 4 5 6 7 8 Cat. III 2,64,220/-
22.914.00 (38,l9sq. yds.) 28,787.00 56,436.00 1,573.00 3.214.00 3,40,834.00 27,267 Add. guaran-tee fee 3,68,101.00 2,820.00 85,223.00 6,301.00 42,612.00 11,088.00 330,921.00 Say:
3,71.000.00 b. p.
1.00,000.00 Note: (i) Building cost of Rs. 2,64,220/- has been taken into account for the fixation of consideration money as conveyed by EF III.CHB to A A. with reference to his order dated 18-12-1992.
P. H. 29,200.00 E.I. 11.000.00 2,40.20000
ii) No interest on the total amount of advance deposit of Rs. 59.000/- made by the allottee as per acccptance-cum-demand letter, has been charged during the construction period. In other words, interest on building cost of Rs. 2,05.220/- has been charged for the average period of construction, i.e. total building cost of Rs. 2.64.220/- less advance deposit of Rs. 59,000/-
Depttl.
Charges @ 10% 24,020.00 264.220.00 Guarantee fee paid @ 2% to Chandigarh Admin-istration for Cateogry III flats for raising loan from HUDCO;
iii) This consideration money is not applicable to the allottee of discretionary quota.
i) Total loan amt. for 312 flats = 439.88 lacs
ii) 2% guarantee fee of Rs. 8,79,758/- loan amt.
iii) Guarantee fee per DU Rs. 2820/-
Sd/-
Asstt.
Sd/-
S.0.III Sd/-
A.O.I Sd/-
A.O.I Sd/.
C.A.O"
6. In so far as charging of interest @ 15.5% per annum instead of 13.5% per annum is concerned, it is the case of respondent-Board that at the time when the scheme was framed in February, 1989, respondent-Board had estimated the price by taking prevalent rate of interest i.e. 13.5% per annum. However, the interest rate was revised by HUDCO from time to time and accordingly respondent-Board has charged interest @ 15% per annum for the period June 1, 1990 to November 14, 1990 on the cost of the land and @ 16% per annum from November 15, 1990 to September 30, 1991 and @ 16.5% per annum from October 1, 1991 to May 31, 1993 on the cost of land and building. The monthly instalment has been worked out at Rs. 2891/-against the tentative amount of Rs. 1907/- due to fixation of price at Rs. 3 lacs against in tentative price of Rs. 2.25 lacs and on account of revision in interest rates. It is further the case of respondent-Board that as per Regulation 5, Board is to determine and, if considered essential, may revise consideration from time to time and wherever the consideration is revised, it shall also determine the manner in which revised consideration is payable and such determination, both original or revised, is to be final and the hirer is precluded from making complaint or raising objections or setting up any claim. Further, as per Regulation 10(i) the balance of hire-purchase price of the flats including interest thereon at such rates as may be fixed by the Board, is to be recovered in such number of monthly instalments as may be specified in each scheme and the amount of each instalment is to be such as may be fixed by the Board in every case.
7. By further elaborating the reasons for escalation in the prices, it is stated that in February, 1989 it was decided by the Chandigarh Administration to allot 24 acres of land for the construction of 1608 flats of different categories out of the chunk of sixty acres of land at average rate of Rs. 180/- per sq. yard on lease-hold basis for 99 years and tentative price of dwelling units was estimated accordingly. Later, in November, 1990, Chandigarh Administration decided to allot sixty acres of land for the construction of these flats @ Rs. 180/- per sq. yard. Now the land was to be allotted on chunk basis and Board was required to bear the cost of entire chunk of sixty acres of land and not just 24 acres of land on which flats were to be constructed. Tentative premium in respect of whole of chunk of 60 acres of undeveloped land works out to Rs.5,22,72,000/-. In addition, Board was to bear Rs. 2.42 crores as estimated internal development charges. The cost of undeveloped 60 acres of land works out to Rs. 550/- per sq. yard. By adding internal development charges of Rupees 2.42 crores, the land cost on plotted area basis works out to Rs. 800/- to 900/- per sq. yard. It is, thus, the later decision of the Chandigarh Administration which materially affected the prices of flats. The Board took up the matter with the Chandigarh Administration for reduction of land rates and it was finally decided not to change the land rates. However, it was decided that recovery of land cost in respect of land measuring 2.07 acres to be allotted to the institutions, like, community centre, School and Dispensary at the rate of Rs. 300/ - per sq. yard be adjusted against the price of land to be paid by respondent-Board. It was further, decided that the recovery on account of auction of commercial area of shop-cum-offices/ booths, measuring 1.23 acres, which was estimated @ Rs. 4000/-per sq. yard, be also adjusted against the price of land to be paid by respondent-Board. Recovery was, thus, estimated in respect of institutional area at Rs. 30.05/- lacs and in respect of commercial area at Rs. 129.14 lacs totalling in all to Rs. 159 lacs. After giving credit for the recovery on account of allotment of land to institutions and auction of commercial land, the net amount payable by the Board works out to around Rs. 6.05 crores for the development land on chunk basis and the average land cost works out to Rs. 597/-persq. yard against Rs. 180/-which was decided to be charged by the Chandigarh Administration from respondent-Board in February, 1989 when the scheme was floated. A chart indicating the cost of land per sq. yard in respect of the land under the flats as alllotted to petitioners has been placed on records as Annexure R-7. With regard to plinth area it is the case of respondent-Board that the same was worked out at 709 sq. feet on the basis of preliminary drawings and no area under varandah and Balcony was included. Further, due to change of layout the garages were taken to the basement as a result whereof area under ramp, stairs and circulation was increased. By adding proportionate area on this account, plinth area per unit works out to 893 sq. feet which has further affected the cost of construction per unit. It is further the case of respondent-Board that cost escalation in the rates of building materials also substantially contributed to the higher price per dwelling unit. The rates of main components of building construction as those stood in the year 1989 and 1992-93 have been worked out as under :--
"1989 1992-93 % increase Cement per bag 60/-
100/-
67% Steel M. T. 7000/-
12000/-
71% Brack per 1000 600/-
900/-
50% Labour index 162 242 80 Points Points Points"
8. After draw of lots for registration and allocation of flats were held in November/December, 1989, the Board prepared area list, contour plan, layout plan and development plan (regarding infrastructures) of the area during January to March, 1990 and took possession of the land after approval of total area as per survey plans in June, 1990. Thereafter, Chandigarh Administration decided to revise layout plan to construct 2280 dwelling units of categories I, II, III and IV instead of 1672 as originally planned in February, 1989. As a result, independent single-storeyed garages were shifted to basement and this changeover from four-storeyed to five storeyed required the introduction of costly arrangements of RCC frame structure and RCC retaining walls, approach roads etc.
9. Petitioners have filed replication controverting the preliminary objections with regard to maintainability of the writ on the ground that it is a matter of concluded contract by asserting and reiterating that increase in the price of flats could only be on the basis of bona fide and reasonable expenditure incurred by respondent-Board on account of some valid reasons. On merits, it is by and large reiteration and elaboration of the facts already pleaded in the writ. It has, however, also been pleaded that Section 27 of the Haryana Housing Board Act, 1971, provides that Board shall not revise any sanctioned housing scheme involving additional expenditure exceeding 10% of its original scheme under Phase I involving increase in cost of project to more than 50 to 60 per centum of its original cost. Section 28 of the Act further provides for seeking fresh sanction, readvertisement and notification of such revised scheme and under aforesaid provisions of the Act, it was mandatory for respondent-Board to have readvertised revised scheme and issued notices to each of the successful registered applicants in confirmity with the principles of natural justice as their property rights and in any case their legitimate expectations in and in relation to property were likely to be jeopardised.
10. Respondent-Board has filed rejoinder to the replication.
11. After hearing learned counsel for the parties and going through the records of the case, this Court is of the considered view that it was a matter of concluded contract between the litigating parties and that even though the price initially fixed at Rs. 2.25 lacs has now been increased to Rs.3.71 lacs, an increase which petitioners might have not expected, yet since there is complete explanation for increase in cost and price of flats, the Court cannot do anything in the matter but for to sympathise with the petitioners. There could have been some substance in the contention of Mr. Gupta if it was proved that the delay in completing the construction of flats was entirely attributable to respondent-Board as also that there was some commitment either spelled out from any of the conditions mentioned in the Brochure or else where, that the construction of flats would be completed within a stipulated period. However, on the strength of scanty evidence that has been brought on the records of this case, no definite finding on that score can be recorded by this Court. It is not disputed that the Board never gave it in writing that the flats would be constructed within some time frame scheme. To recall the pleadings made in the writ, it is the petitioners' case that respondent-Board had given it out to the public at the time of inviting applications for registration and allotment of flats, though not in writing, that the work on the construction of the flats would be completed within 15 to 30 months. However, it is from the newspaper items and the statement made by the then Chairperson of the Board, which was again published in the newspaper, that it has been sought to be proved that such a commitment was made by respondent-Board. The news item dated July 4, 1989 which is said to have been published before the last date of submission of the applications i.e. July 15, 1989, cannot take character of a clause for construction to be completed within 15 months from the date of draw of lots. It cannot be held to be a promise for which the Board can be pinned down. In the written statement that has been filed by the Board it has been specifically denied that any such representation or promise was held out. The source of correspondent as to from where he gathered the information is also not known. Further, by inviting tenders from the approved builders/contractors specifying time frame of 18 months therefrom for completion of flats is no indication of promise held out to petitioners with regard to construction of flats under some watertight time scheme. It could well be with a view to pin down the contractors to complete the work in a specified time frame but that in no case can assume the character of a promise held out to petitioners, thus, resulting into term of agreement between the parties. The statement of Chairperson of Board, Mrs. Tajinder Kaur, if at all made, which was again published in the Daily Tribune on March 30, 1990 that Board was keen to complete construction of flats within the stipulated period, would at best show the intention of the Board in completing the project as early as possible. That, again, cannot amount as term of agreement between the parties. On this scanty evidence which has no evidenciary value, no definite finding, thus, can be recorded in favour of petitioner that there was any term of contract by which respondent-Board was enjoined to complete the construction within some stipulated time frame and handover possession of dwelling units to petitioners. As referred to above, from the terms and condi-tions mentioned in the brochure or any other correspondence that might have been exchanged between the parties, there was no promise, agreement or representation that the dwelling units shall be constructed within some time frame scheme. Assuming that it is permissible for a party to prove term of agreement, even though it is not mentioned in the agreement, from the material that has been placed on records no cogent or admissible evidence has been produced to supply a term of contract which is missing in the brochure and other documents exchanged between the parties.
12. Insofar as contention of learned counsel for petitioners that the price has been increased by applying the term in the brochure stipulating that prices could be increased due to variation in the plinth area, scope of work, change in specifications and design, increase in the cost of materials and labour, cost of land etc. or due to any other reason and the same shall be binding upon the allottees and further that under the last part of the clause i.e. 'for any other reason', respondent-Board has necessarily to come up with cogent grounds and no such reason exists, is concerned, suffice it to say that the Board has successfully pleaded that there were good and justifiable grounds for increasing the prices. To recaptulate the averments made in the written statement, it is the Chandigarh Administration which allots land to the Board at reserved price which is far below the market price. The Board manages finances from the HUDCO, a Government of India undertaking, which provides finances at cheaper rates of interest to all the housing and land development agencies throughout the country. It is for this reason that the Board is able to provide houses to the lower middle class of the society at much cheaper rate which is also payable in monthly instalments over a period of 12 to 15 years. In the very nature of things it is not possible for the Board to fix the exact price of the houses which are to be constructed over a period of 3 to 4 years. If during this time the cost of construction, which is dependant upon various imponderables, like, land price finally charged by the Chandigarh Administration, the increase in the prices of building materials, labour rates and rate of interest to be charged by HUDCO, increase, the Board has no choice in the matter but for to split up this increased price on the allottees. Petitioners have not been able to make out a case where it could be shown by any cogent evidence that the Board by increasing the price is in fact fleecing the allottees and appropriating the increased price to its coffers by way of earning huge profits. The housing scheme in question was floated for construction of 1608 flats of different categories in the year 1989 and the tentative price of Category III flat with average covered area of 1043 sq. ft. was given as Rs. 2.25 lacs. An amount of Rs. 20,000/-was to be deposited at the time of delivery of possession and remaining amount was to be paid in 144 monthly instalments of Rs. 1907/- each. The amount of instalment was also tentative. The rate of interest to be charged was also tentative. The number of applications received against Category-III flats for general public was 6304. The tenders were called in the month of February, 1990 for different groups of houses and the same were opened in the month of March, 1990. Works in respect of 216 flats were allotted in the month of April and May, 1990 and the civil work was to be completed within 18 months. The possession of land after approval of detailed area/survey was taken in June, 1990. However, the Chandigarh Administration decided to revise the layout plan to accommodate more units and, therefore, revised layout was prepared and preliminary architectural plans and civil works for 96 flats were allotted from July 1990 to September, 1990. Civil work for all 312 flats was completed except passages which could not be completed due to non-provision of Public Health Lines by Chandigarh Administration by August, 1992. Draw of the lots was held on February 19, 1993. All 312 flats were completed in March, 1993. If in this process the Board took more time than it might have been intended in constructing the flats and meanwhile cost of various items, as mentioned above, had gone up, it is the allottees who have necessarily to be asked to pay the same. Break-up of consideration money in respect of 312 Category-Ill flats at Manimajra has also been given and reproduced in the earlier part of this judgment. This Court, after going through the pleadings of the parties, is fully satisfied that the Board cannot be blamed for completing the construction later than it might have been expected by petitioners and, as mentioned above, if cost of construction increased during the intervening period, the clause for increase in price that was initially settled as tentative, became operative.
13. In so far as the point projected in the replication that in view of Section 27 of the Haryana Housing Board Act, 1971, the Board cannot revise any sanctioned housing scheme involving additional expenditure exceeding 10% of its original scheme under Phase-I involving increase in cost of project to more than 50 to 60 percentum of the original cost and in accordance with the provisions contained in Section 28 of the Act for seeking fresh sanction, re-advertisement and notification of such revised scheme had to be done, is concerned, suffice it to say that petitioners are not asking for setting aside of the scheme as such nor such a result is acceptable to them. They want the scheme to be enforced but the price to be charged under the scheme is asked not to increase beyond tentative price fixed in the brochure. If that be the intention of petitioners and the only relief asked for by them is to direct respondent-Board so as not to increase the price beyond the one which was tentatively fixed and when they want the scheme to remain intact, there arises no necessity, whatsoever, to decide the validity of the scheme, on the basis of ground noticed above.
14. Finding on merit, I dismiss this petition leaving the parties, however, to bear their own costs.
15. Petition dismissed.