Madras High Court
D. Rani Bai And 27 Others vs The Executive Engineer Hosur Housing ... on 18 August, 2000
Equivalent citations: 2000(3)CTC603
Author: P. Sathasivam
Bench: P. Sathasivam
ORDER
1. By consent of both parties, the main writ petitions themselves are taken up for final disposal.
2. Since the issue is common in all these writ petitions, they are being disposed of by the following common order.
3. Aggrieved by the letter of the Allottee Service Manger, Tamil Nadu Housing Board directing the petitioners to pay the difference in final cost in respect of their houses allotted by the Housing Board, they filed the above writ petitions.
4. For the convenience, I shall refer the facts of the case in W.P.No.20841 of 1998. It is stated that the respondent in the year 1997 have called for applications for the allotment of house at the outright purchase basis in Virupakshipuram Neighbourhood Scheme. He preferred an application for allotment of house on the outright purchase basis. His application was considered on merits and the respondent have made an allotment on 29.6.1988 in his favour. He had been allotted a house bearing No.HIG - 12 at Virupakshipuram Neighbourhood Scheme. The tentative cost of the house was fixed as Rs.1,49, 839.00 and he was asked to execute the Lease-cum-Sale Agreement. He has paid the full cost of the house on 28.9.1988 and also executed Lease-cum-Sale Agreement and the possession of the house was handed over to him. No Objection Certificate was also issued by the respondent to mortgage the property stating that the sale deed will be issued to him within a period of five years. All the works pertaining to the developments were completed even before the house was allotted and handed over the possession to him. Thus, as per Clause 17 of the Lease-cum-Sale Agreement the limitation period for fixing the final cost was over by January, 1991. Thereafter, the respondent cannot increase the final cost other than what is fixed in the Lease-cum-Sale Agreement. The cost fixed in the Lease-cum-Sale Agreement is Rs.1,49, 839.00. While so, the respondent on 29.06.1998 have issued the impugned letter stating that the final cost has been fixed at Rs.2,20,302.00 against the tentative cost and he is liable to pay Rs.70,913.00 being the difference in final cost. The respondent cannot increase the final cost after the period of three years from the date of allotment, except if it is increased due to excess compensation if any awarded by Courts for the land acquired. Compensation proceedings had been completed in the year 1987, when the Sub-Court, Krishnagiri have passed the decree in L.A.O.P.Nos.545, 555, 565 to 567, 569 to 587 of 1986. In such circumstance, having no other remedy the petitioner has filed the above writ petition for quashing the letter of the respondent dated 29.6.1998 and for direction to the respondent to issue Sale Deed without demanding over and above the cost agreed in the Lease-cum-Sale Agreement. Similar averments have been made in the other writ petitions, hence I am not referring the same once again.
5. The respondent has not filed counter affidavit disputing various averments made by the petitioners.
6. Heard the learned counsel for petitioners as well as respondents.
7. Mr. S. Doraisamy, learned counsel appearing for the petitioners by pointing out Clause 17 of the Lease-cum-Sale Agreement would contend that, the respondent is not entitled to make a demand over and above the cost already fixed and is also not entitled to fix final cost after the period of limitation prescribed in the contract, viz., within a period of three years from the date of allotment. In support of the said contention, he very much relied on the judgment reported in Meenakshi Apartments v. The Tamil Nadu Housing Board, 1993 (1) M.L.J. 161 and Arunachalam V.S. v. Managing Director, Tamil Nadu Housing Board, 1998 W.L.R. 586.
8. On the other hand, Mr. K. Chelladurai, learned counsel appearing for the respondent Board after taking me through the various Clauses in the Lease-cum-Sale Agreement would contend that, inasmuch as the amount paid by the petitioners at the time of allotment is only tentative and in the light of the various Clauses in the Agreement, they are bound to pay the enhanced cost as claimed by the respondent. He also contented that, it is open to the respondent to claim enhanced cost till all compensation proceedings come to an end. In support of his contentions, he very much relied on the Division Bench decision of this Court reported in V.S. Raghunathan v. Tamil Nadu Housing Board etc., 1997 W.L.R. 25.
9. I have carefully considered the rival submissions.
10. There is no dispute that on the basis of the advertisement made, the petitioners herein preferred an application for allotment of house on the outright basis. Their applications were duly considered and they have been allotted house under the Neighbourhood Scheme. There is no dispute that the cost mentioned in the allotment order is only a tentative cost and all of them were asked to execute the Lease-cum-Sale Agreement. Thereafter, ie., after the allotment and the payment of initial cost (tentative cost), the petitioners have executed the Lease-cum-Sale Agreement. Learned counsel for the petitioners by drawing my attention to Clause 17 of the Lease-cum-Sale Agreement would contend that, inasmuch as all the works pertaining to the developments were completed and handed over possession to them. The limitation period for fixing final cost is over by January, 1991, accordingly the respondent cannot increase the final cost other than what is fixed in the Lease-cum-Sale Agreement. Though initially it is contended that the respondent has no power to fix higher cost at a later point of time, in view of the fact that the cost mentioned in the allotment order itself is only a tentative cost, the said contention cannot be accepted. This aspect has been considered by the Division Bench of this Court in a decision reported in V.S. Ragunathan v. Tamil Nadu Housing Board etc., 1997 W.L.R. 25. Rejecting the similar contention, the Division Bench has held, "4. Though it is contended that the Housing Board has no jurisdiction or authority to enhance the cost, but having regard to the terms of the order of allotment and also the Lease-cum-Sale Agreement executed by the petitioners, it is not possible to agree with the contention of the petitioners that the Housing Board has no jurisdiction or authority to enhance the cost. In fact, the cost as mentioned in the allotment order as well as the lease cum sale agreement is only provisional, subject to final determination. Therefore, the power to make a final determination, as to cost of the plot has been retained and has been made one of the conditions or the order of allotment and the Lease-cum-Sale agreement, which has been executed by the petitioners. The grounds on which the cost can be enhanced, are also stated in the order of allotment. Therefore, we are of the view that the Housing Board has undoubted authority to enhance the cost of the plot."
In the light of the authoritative decision of the Division Bench, I hold that the Housing Board is well within their powers to make a final determination as to cost of the plot at a later point of time as mentioned in the order of allotment and also in the Lease-cum-Sale Agreement.
11. Learned counsel appearing for the petitioners by drawing my attention to Clause 17 of the Lease-cum-Sale Agreement and in view of the limitation prescribed therein would contend that the final cost determined and claimed in the impugned letters, which is beyond the three years period cannot be sustained. Since the petitioner has extracted a portion of Clause 17 in para 3 of the affidavit, I am of the view that it is better to refer the entire Clause 17, which runs as follows:
"Clause 17: The lessor agrees to sell the property more particularly described in the Schedule hereunder to the lessee for such price as the Administrative Officer of the lessor may at any time in his sole discretion fix and at which time the Administrative Officer of the lessor is entitled to consider details regarding development charges, cost of amenities, cost of buildings etc., and whether the price of the land acquired under the Land Acquisition Act together with suitable modifications thereto by the local laws has become final by a conclusive adjudication thereon by the concerned tribunals and Courts. The final decision of the Administrative Officer of the lessor or to the final price of the property as determined under these presents in conclusive and binding on the lessee and lessee agrees to purchases the property from the lessor at the said price on the terms and conditions hereinafter mentioned.
Excepting the fixation of price with reference to the claim or compensation adjudicated or awarded by Courts finally and conclusively with regard to the lands acquired under the Scheme, the lessor shall fix the price of the property after taking into consideration the development charges, cost of amenities and buildings etc., within a period of three years from the date of allotment and which price is subject only to a revision on account of excess compensation if any awarded by Courts for the lands as aforesaid."
12. Mr. K. Chelladurai, learned counsel appearing for the respondent Board by pointing out the earlier portion in Clause 17 would contend that, it is open to the Administrative Officer of the lessor viz., Tamil Nadu Housing Board to fix the final cost at anytime in his sole discretion, regarding development charges, cost of amenities cost of buildings etc.. On the other hand, Mr. S. Doraisamy, learned counsel appearing for the petitioner by drawing my attention to the latter part of the very same Clause would contend that, except fixation of price with reference to the compensation awarded by Courts in respect of lands acquired under the Scheme, it is incumbent on the lessor. Housing Board to fix the price of the property after taking into consideration the development charges, cost of amenities and buildings within a period of three years from the date of allotment.
13. In the light of the submissions made, I have carefully considered the entire Clause, viz. Clause 17. Though initially it is stated that, it is open to the Administrative Officer of the lessor i.e., Housing Board to fix the final price/cost at any time, by reading the entire Clause the proper interpretation would be that, except with regard to compensation for the lands acquired under the Scheme, the Housing Board is expected to fix the price of the property after considering the development charges, cost of amenities and cost of buildings etc., within a period of three years from the date of allotment and they cannot be permitted to fix the price or cost of the property after expiry of the period of three years from the date of allotment. However, it is open to the lessor to raise the price or cost at a later date on account of excess compensation if any awarded for the lands acquired. Even with regard to dispute regarding compensation amount, the petitioners have specifically asserted, particularly in para 6 of the affidavit that all those disputes had been completed even in the year 1987 when the Sub-Court, Krishnagiri passed decrees in L.A.O. Ps . 545, 555, 565 to 567, 569 to 587 of 1986 etc., In the absence of any counter affidavit disputing the above factual position, I do not find any reason to reject the claim of the petitioners.
14. In this regard, Mr. S. Doraisamy, learned counsel for the petitioners has very much relied on two decisions of this Court viz., "1. Meenakshi Apartments v. The Tamil Nadu Housing Board, 1993 (1) M.L.J. 161; and 2. Arunachalam V.S. v. Managing Director, Tamil Nadu Housing Board, 1998 W.L.R. 586."
15. In the first decision viz., Meenakshi Apartments v. The Tamil Nadu Housing Board, 1993 (1) M.L.J. 161 M.Srinivasan, J., (as His Lordships then was) had an occasion to consider similar Clause with regard to determination of final cost. In the case before the learned Judge, Clause 9 of the letter reads thus, "Final cost of the flat will be intimated within a period of 3 years. The difference of cost if any is to be paid in one lump sum or in monthly instalment from the beginning."
Members of the Association before the learned Judge were allotted middle income group flats in 1979-80, the Housing Board demanded additional payment from the petitioners therein only in the year 1986. The learned Judge referred to a similar case decided by this Court in S.A.No.83 of 1982, wherein V. Balasubramanyam, J., has held that, the clause fixing a period of determination of the final cost is a clause of limitation and after the expiry of the said period it is not open to the respondents to fix the final cost. However it was held in the case that the respondents could fix within a reasonable time that portion of the enhancement in the sale value in so far as it relates to excess compensation awarded for the land owners under the acquisition proceedings. The judgment rendered in S.A.No.83 of 1982 was affirmed on appeal by the Supreme Court in C.A.No.3002 of 1983. The Apex Court has accepted the construction put upon the Clause by this Court and held that after expiry of the period mentioned in the Clause it is not open to the respondents to fix the final cost and thereby increase the cost payable by the allottees. The learned Judge has also referred to another order passed by S. Ramalingam, J., in W.P.Nos.4527 and 7642 etc., of 1984 dated 7.2.1989, wherein the learned Judge has held that, after the expiry of the period of limitation set out in similar Clauses it is not open to the respondents to increase the cost under the guise of fixing the final cost. The judgment of S.Ramalingam, J., was affirmed by the Division Bench of this Court in W.A.Nos.460 to 464 of 1990 dated 16.7.1990. It is further seen that in W.P.No.1441 of 1989 Justice Raju (as His Lordship then was) has taken a similar view in his judgment dated 21.2.1992. After referring the relevant clause as well as other decisions, M.Srinivasan, J., (as His Lordships then was) has concluded, The clause in the contract prescribes a period of three years. The final cost is determined only after a period of six years in this case and communicated to the allottees. In the circumstances, I hold that the respondents are not entitled to make any demand over and above the cost already fixed in the contract as the respondents are not entitled to fix the final cost beyond the period of limitation prescribed in the contract."
16. In the second case, viz., Arunachalam V.S. v. Managing Director, Tamil Nadu Housing Board, 1998 W.L.R. 586, Y. Venkatachalam, J., after referring similar Clause (Clause 15) of the Agreement has concluded thus,
11. ...... But as per the provision made in the above Clause-15 that has to he made within a period of three years from the date of allotment. In this case admittedly the allotment has been made to the Petitioner even on 26.4.1974 and the three years period comes to an end on 25.4.1977. Whereas as could be seen from the records, the final cost was arrived at Rs.76,460 only on 10.12.1985. This is clearly violation of Clause-15 of the agreement. .......
The learned Judge has also concluded, "13. Therefore, for all the aforesaid reasons and in view of my above discussions with regard to the various aspects of this case, this Court is of the firm view that the respondent/Board has every power to enhance the cost taking into consideration the development charges etc., and fix the final cost of the property. But at the same time for such a fixation the respondent cannot lake its own time and that should be made within a period of three years from the date of allotment as per Clause-15 of the agreement
17. In the light of similar Clause in these cases, viz., Clause-17, I am in respectful agreement with the view expressed by the learned Judges and I hold that though the Housing Board has every power to enhance the cost taking into consideration the development charges etc., and fix the final cost of the property, but at the same time, that should be made within a period of three years from the date of allotment as per Clause 17 of the agreement.
18. In the light of what is stated above, the impugned letter of the respondent in all these writ petitions is quashed and the following directions are given to the respondent:
"I. The respondent is directed to fix the final cost of the property in question by taking into consideration the development charges, cost of amenities, cost of buildings etc., that are applicable and prevailed before the limitation period of three years from the date of allotment and communicate the same to the petitioners;
2. If there is any amount is due, as per the proposed determination from the petitioners herein, two months time is granted to them to pay the said amount;
3. On such payment being made by the petitioners herein, the respondent concerned authority is directed to execute the sale deed in favour of the petitioners within a period of four weeks from the date of such payment, provided the other formalities are complied with.
19. The writ petitions are allowed to the extent mentioned above. No costs. Consequently, connected WMPs., are closed.