Patna High Court
Manju Singh vs The Bihar State Housing Board And Ors. on 7 September, 2000
Equivalent citations: 2000(3)BLJR2299
JUDGMENT Radha Mohan Prasad, J.
1. In this writ petition, the petitioner is aggrieved by the demand contained in letter dated 23.12.1997 (Annexure 8), issued by the Revenue Officer of the Bihar State Housing Board, Patna to the Executive Engineer of the Board at Gaya, pursuant to which she is required to pay a further sum of Rs. 1,72,942/- in addition to the amount which has already been paid by her as the price of M.I.G. House No. M.H. 13 at Gaya allotted to her.
2. In short, the relevant facts are that on 28.12.1976, the petitioner filed an application for allotment of M.I.G. house in pursuance of the advertisement. On 3.9.1983, lottery for the said purpose was held by the respondent Board and the petitioner was allotted the house in question, about which she received intimation, vide letter dated 3.9.1983, contained in Annexure 2. Pursuant to the said letter, she received the allotment letter dated 3.9.1983, contained in Annexure 3 also, whereby she was required to deposit a sum of Rs. 13,560/- being 20% of the tentative price of the house and to deposit the remaining amount of Rs. 54,200/- in 120 equal monthly instalments of Rs. 452/- without interest and Rs. 502/-with interest if paid after 7th of the respective months. In pursuance of the said allotment letter, the petitioner deposited Rs. 13,560/-. However, the Hire Purchase Agreement was entered by the Board only on 23.3.1985, vide Annexure 4, whereafter the possession of the house in question was delivered to the petitioner on the same day, vide Annexure 5. The petitioner has annexed a photocopy of the details of payment made by her issued by the Executive Engineer of the Board, contained in Annexure 6, from which it is evident that the entire payment was made with due interest on account of delayed payment for certain period. The last payment was made on 12th February, 1996. However, after lapse of long time of the order of allotment and pursuant to which full payment has also been made, the impugned letter has been issued with a copy of it to the petitioner by the Revenue Officer of the Board.
3. In the counter-affidavit filed on behalf of the respondent-Board and its officials, it is stated that as per the allotment order, the tentative cost of the house was fixed at Rs. 67,800/- as on 2.9.1983 and the payments made by her have not been disputed. It is, however, alleged that the allottee i.e., the petitioner executed the agreement after a long gap, i.e., on 23.3.1985, which is in clear violation of the terms of the allotment order. It is stated that in the year 1992 the cost of M.I.G. house for Anugrahpuri, Gaya was revised as Rs. 1,68,613/- as on 30th September. 1991 by the Board and, according to the revised cost, the cost of the house comes to Rs. 73,165.64 as on 30th September, 1983 on the effected rate of interest at the rate of 11% per annum. According to the respondents, increase in the cost of construction or development or due to increase in cost of land acquisition due to any decision/award of Court of law or legislation or due to increase in the cost due to final valuation or calculation or otherwise as per the decision of the Board are payable by the petitioner either in instalments or in lump sum within the period decided by the Board. It is stated that it was confirmed that under no circumstances the settlee be entitled to question or dispute it and this shall be fixed by the Board in its sole discretion.
4. Further case of the respondents is that the Board has no fund of its own and it runs after getting loans from financial institutions e.g. HUDCO. The Board normally charges interest to its allottees at the rate of interest which it repays to the ginancial institutions. A reference has been made to the decision of the case in the case of Raj Mohan Prasad Sinha v. State of Bihar and Ors. C.W. J. C. No. 941 of 1991 on the point of interest in which, according to the respondents, it was observed that the board charges interest only to meet the financial obligation. It is, thus, contended that as per the above observation and condition, as cited in Clause 4 of the agreement, the demand made by this respondent cannot be said to be illegal and arbitrary.
5. Learned Counsel for the petitioner has submitted that the impugned demand is wholly arbitrary and has been issued in mala fide exercise of the power for the reasons best known to the authority concerned. The petitioner has already made all the payments in terms of the allotment letter well within time with interest for the period where there was delay in payment of the instalment as per the terms of the order of allotment. It is submitted that the allegation of the Board that there was delay in the hands of the petitioner in execution of the agreement is wholly baseless and mala fide. On the contrary, the petitioner kept on approaching the Board to get the agreement executed, but no step was taken by the authority of the Board for execution of the agreement even though the petitioner deposited the initial amount of 20% well within time as is also evident from the agreement, contained in Annexure 4.
6. On the other hand, earned Counsel appearing for the Board has submitted that it was the responsibility of the petitioner to executive an agreement within a month of the receipt of the allotment letter but she having not done so and having taken two years to execute the agreement cannot be permitted to say that the action of the authority is arbitrary and mala fide. It is also submitted that it is due to increase in the cost of expenditure of the house that the impugned demand has been made and that in view of the clear terms of agreement, the cost at the time of agreement, was purely tentative and was to be revised which the petitioner cannot question or dispute the validity of such increase in any circumstances. Thus, according to the learned Counsel, the writ petition filed by the petitioner is not maintainable and is fit to be dismissed on this ground alone.
7. This Court is unable to accept the said submission of the learned Counsel for the Board. In the case of Central Inland Water Transport Corporation Ltd. v. Brojo Nath , the apex Court held that the Courts will not enforce and will, when called upon to do so. strike down an unfair and un reasonable contract, or an unfair and unreasonable clause in a con tract, entered into between the parties who are not equal in bargaining power. The apex Court also gave an example to apply the said principle where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties and also chase the weaker party is in a position in which he can obtain goods or services or means of livelihood and upon the terms imposed by the stronger party or go without them, and also where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or spared form or to accept a set of Rules as part of the contract; however, unfair, unreasonable and unconscionable clause in that contract or Rules may be.
8. In the present case, the petitioner, being an allottee, is obviously a weaker party and could not have got the allotment except upon the terms imposed by the stronger party, i.e., the Board or go without it. In fact, she had no choice or rather no meaningful choice, but to give her assent to a contract by signing on the dotted line in the prescribed form, though it obviously incorporated wholly unreasonable and unconscionable clause that under no circumstances, the settlee is entitled to dispute the increase of the cost fixed by the Board in its sole discretion. The respondents have not brought anything on record to justify such exorbitant increase in the price of the house allotted to the petitioner long back in the year 1983 and possession also delivered to her in the year 1985 and also full payments already made pursuant to the terms of allotment, except the vague allegation and bald stand being taken in the counter-affidavit not supported by any evidence.
9. A Division Bench of this Court in the case of Citizen Cause v. Bihar State Housing Board reported in (1992) 1 BLJR 367, held that disposal of the price of the flats is to be fixed as it was when the lottery was held. The Board was to fix the disposal price at the actual cost of construction and other charges as was there at the time of disposal.
10. Here, from the stand taken in the counter-affidavit itself, it appears that the impugned demand was made on the basis of the cost as determined on 30th September, 1991 when, in fact, the allotment was made to the petitioner on 2.9.1983. Moreover, this Court fails to appreciate as to how such exorbitant cost of the house has been fixed after lapse of almost 17 years of the allotment and 15 years of delivery of possession. This Court does not find any merit in the contention that there was delay caused by the petitioner in entering into the agreement. Nothing has been brought on record by the respondents to show that soon after expiry of the period for entering into the agreement, the Board ever took any steps by giving notice or otherwise for recall of the order of allotment. On hearing, several writ petitions with respect to such allotment, this Court can take judicial notice of the fact that even after lapse of several years, no steps are taken by the Board for entering into the agreement and allottees are made to run to the Board's office. Thus, it is a clear case of mala fide harassment to the petitioner by the authorities of the Board where despite the allotment made on 3.9.1983 and deposit of tentative initial 20% of the price, no steps for agreement was taken by the Board till 23rd March, 1985 and yet it is alleged that there was delay by the petitioner in entering into agreement. Moreover, there is no explanation whatsoever for the lapse of long period even after 23rd March, 1985 when the agreement was entered and possession delivered to the petitioner.
11. This Court feels shocked by such malfunctioning of the institutions like Housing Board and strongly deprecate its manner of functioning. If any delay has been caused by the Board in finalising the cost of the house, there cannot, be any justification to raise such exorbitant cost belatedly and charge interest or penal interest on account of such delay which may force the allottee to even surrender allotment itself as for no fault of his/her, one may not be in a position to meet such exorbitant cost, as, in the instant case, earned Counsel for the petitioners, on instructions, submitted that the petitioner is prepared to even surrender her allotment provided the Board refunds the entire amount deposited by the petitioner with market rate of interest.
12. In fact, in my opinion, the price of such house should be first determined and fixed even before its allotment and the same should be communicated to the allottee so that he or she may proceed to take any further action only after assessment of the availability of fund and not to get stuck in the hands of the authorities of the Board for no fault. The Board is expected to know as to what would be the cost incurred on the date of allotment over the construction of the house and the interest which they may have to pay to any agency for taking loan and also regarding accrual of interest on account of payment of the price in instalments and on calculation of the same can fix the price in the allotment letter itself which can only be said to be the fair approach of the Board so that the allottees may also understand about their position in regard to financial involvement and proceed accordingly. This will also avoid any mala fide action on the part of the authorities of the Board leading to unnecessary harassment. In my opinion, by not fixing the price on the date of allotment leaves the scope for all kinds of manipulation and mala fide harassment to the allottee by the officials of the Board. The conditions in the allotment letter that the price was tentative and that it could be revised, in my opinion, are unfair and unreasonable and such condition cannot be allowed to stand where the allottee is not equal in bargaining power. Accordingly, this Court strikes down the said condition.
13. In the result, the impugned demand, contained in Annexure 8, is quashed and the writ petition is allowed with a cost of Rs. 5,000/- (five thousand) to be paid to the petitioner by the respondent-Board within two weeks of the receipt/production of a copy of this judgment/order. The respondent-Board is directed to execute the deed with respect to lease in terms of the order of allotment.