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Madhya Pradesh High Court

Surendra Singh Rana vs Madhya Pradesh Housingh Board Bhopal on 27 November, 2012

     HIGH COURT OF MADHYA PRADESH: JABALPUR
                Writ Petition No. 500 / 2010


             Surendra Singh Rana & another
                           Versus
            State of Madhya Pradesh & another
______________________________________________
Shri Vivek Shukla, learned counsel for the petitioner.

Shri R.K.Samaiya and Shri Shailendra Samaiya, learned
counsel for the respondent/Housing Board.

PRESENT :          Hon'ble Shri R.S. Jha, J.:

                         ORDER

(27-11-2012) The petitioners have filed this petition being aggrieved by the unprecedented and unreasonable increase in the price of the flat allotted to the petitioners in Satyamev Jayate Parisar, Tahsil Compound, Jabalpur, by the respondents.

2. It is submitted by the learned counsel for the petitioners that the Housing Board floated a scheme in the name of "Satyamev Jayate Parisar" proposing to construct and sell three bed room, hall, kitchen and two bedroom, hall, kitchen flats by notice published in the newspaper, dated 24-4-2004. The price of the flats were ranging from Rs. 6.3 lac to 7.90 lac depending upon their size and floor. It is submitted that pursuant to the advertisement the petitioners had applied and were allotted 3 BHK flats in the second floor for which they had deposited a sum of Rs. 7.80 lacs and 8.00 lacs till 2004.

3. It is submitted that subsequent to the allotment of the flats in the year 2004 the respondent/Housing Board issued a letter to the petitioners on 18-8-2006 (Annexures P-6(A) and P-6(B) informing them that the price of the flat has been increased from Rs. 8 lacs to Rs. 10 lacs and thereafter by letter dated 13-7-2009 to Rs. 16.90 lacs. The petitioners being aggrieved by the aforesaid notice have filed the present petition.

4. It is submitted by the learned counsel for the petitioners that two flats have been purchased by them for a cost of Rs. 8 lacs as stated by the respondent/Board in their advertisement/notice and they had taken a loan in respect of the aforesaid purchase from various financial institutions. It is stated that the respondents for a long period of five years did not commence construction of the flats and in fact recovered the amount towards price of the flats from the petitioner even prior to obtaining possession of the land for construction of the flats. It is submitted that after asking the petitioners to deposit the entire price the respondents have now arbitrarily and unreasonably increased the price of the flats, construction of which was commenced by them sometimes in the year 2009, and while doing so they have included the escalated price of the cost land which was given to the State Government; not disclosed the actual escalation in the value of the raw material and the cost of construction; have added service tax and supervision charges etc. and have also charged 14% interest on the outstanding amount while calculating the price of the flat.

5. It is submitted that the aforesaid increase in the price of the flats by the respondents is arbitrary and unreasonable and, therefore, deserves to be quashed as the Housing Board has no right to enhance the price of the flats without their being any justified reason for the same. In view of the aforesaid submissions it is prayed that the enhanced demands be quashed and the respondents be directed to handover possession of the flats to the petitioners at the price that was originally notified by them.

6. The respondent/Board, per contra, has filed a return and submitted that the price that was notified in the initial stage was tentative and was subject to subsequent escalation in price and, therefore, the claim of the petitioners that they should be sold the flats and the plots at the initial price that was notified in the notice itself is patently unjustified. It is further submitted that the land in question was given to the Housing Board by the State pursuant to the MOU that was entered into between the Housing Board and the State on 7-10-2002, however, actual physical possession of the land was given in the year 2009 and, therefore, they could not commence construction prior to the said date. It is submitted that the State has subsequently issued notifications to the effect that the Housing Board should recover service tax, supervision charges and other charges and should include the same in the price of the flat and it is on account of the direction of the State Government that the Housing Board had included the said amount in the estimated price for which impugned notices were issued to the petitioners.

7. The respondent/Housing Board also brought on record the fact that certain other purchasers in the same Satyamev Jayate Parisar had filed writ petitions before this Court which were registered as W.P.Nos. 9126/2010, 138/2009, 8583/2010 and 3068/2010 and were disposed of by order dated 9-3-2011 in the following terms after holding that the petitioners had no right to claim sale of the flats on the notified price :-

"7. The foundation stone in the case is the advertisement and the conditions embodied in it which are also reproduced in Annexure- P/4. On bare perusal of it, this Court finds that the approximate cost of the flats has been given with a further condition that it can be enhanced. Hence, according to me, nowhere the Housing Board has assured the petitioner that at a particular price only the flat will be allotted to her. Much emphasis has been put-forth by learned counsel for petitioner that at the time of booking the flat, a particular amount was deposited and lateron some more amount was also deposited but according to me merely because petitioner submitted an application for allotment of a flat and also made certain deposits in terms of advertisement and the Scheme (Annexure-P/4) it would not confer any right in her to ask respondent-Board to allot the flat at a particular price only. On going through final allotment letter this Court finds that details are mentioned and accordingly enhanced demand has been made from the petitioner. If the petitioner is not willing to accept the flat at that cost, certainly she is free to withdraw the amount which she has deposited alongwith the permissible interest. Apart from this, on bare perusal of this document, this Court finds that in condition No.8 specifically it has been mentioned that if any dispute would arise it will be subject to decision of Commissioner Housing Board, Bhopal, which shall be final.

8. For the reasons stated above, I am of the view that since no right is conferred in petitioner and right from very beginning the Housing Board is stating that cost of the flat which is shown only as approximate subject to final allotment, I am of the view that if petitioner agrees to get the flat in question allotted in her name, the demand so made by the Board be paid. However, if petitioner so advised may submit necessary dispute before the Commissioner demonstrating each and every minor details to settle the amount to be paid at a lesser price and same may be adjusted. If such a dispute is submitted by the petitioner, the same may be decided by the Commissioner, M.P. Housing Board, Bhopal sympathetically by paying heed that proposed allottee belongs to middle class society and they have to take loan from financial institutions etc. and further taking into account in the year 2004 (7 years ago) petitioner applied for allotment of house and they also deposited some amount. This Court hopes and trusts that if such a dispute is raised, certainly it would be considered by the authority in order to reduce the cost of the flat so that the petitioner being a member of middle class, may afford it. In that situation, the findings given by this Court may be ignored by the Commissioner."

8. It is further stated that the writ appeals (W.A.No. 448/2011 and others, decided by this Court on 26-3-2012) filed against the orders of the learned single Judge were subsequently withdrawn with liberty to approach the consumer forum. On the basis of the aforesaid submissions it is submitted that the petition filed by the petitioners be dismissed.

9. The learned counsel for the petitioners in reply submits that the facts of the present petition are distinguishable from the facts of the cases that were -(6)- W.P.No. 500/2010 dismissed by the learned single Judge inasmuch as the petitioners in the instant cases had deposited the entire amount of Rs. 8 lacs and that the decision of the Division Bench in the case of Nisha Singhai Vs. MP Housing Board, Bhopal and others, 1996 MPLJ 469 and subsequent decision rendered in the cases of T.N.Housing Board Vs. Service Authority, (2011) 11 SCC 13 and Karnataka Industrial Areas Development Board Vs. Prakash Dal Mill, (2011) 6 SCC 714 were not available before the learned single Judge wherein the Supreme Court has held that the Housing Board does not have the power to arbitrarily enhance the price of the flats or plots which have been sold by them without giving any specific data and justified reason for the increase.

10. I have heard the learned counsel for the parties at length and perused the record.

11. From a perusal of the facts that have been brought on record, the decisions rendered by the Supreme Court in the cases of T.N.Housing Board Vs. Service Authority, (2011) 11 SCC 13 (supra) and Karnataka Industrial Areas Development Board Vs. Prakash Dal Mill, (2011) 6 SCC 714 (supra) and the decision rendered by the Division Bench of this Court the case of Nisha Singhai Vs. MP Housing Board, Bhopal and others, 1996 MPLJ 469 (supra), it is evident that if the Housing Board wishes to increase the price of the flats or the plots sold by them it can do so only if the increase can be justified and is based on actual escalation calculated on the basis of the data disclosed and available with them. It is further clear that the Supreme Court in the cases of -(7)- W.P.No. 500/2010 T.N.Housing Board (supra) and Prakash Dal Mill (supra) has laid down guidelines on the basis of which escalation of price may be undertaken by the Housing Board.

12. From a perusal of the documents filed by the respondents it is clear that the respondent/Board has not undertaken any such exercise and has arbitrarily increased the value of the flats.

13. In view of the aforesaid facts and circumstances the petition filed by the petitioners is disposed of with a direction to the effect that the petitioners shall file a representation before the respondent/authorities raising all issues before them against the impugned enhancement and on the petitioners' doing so the respondent/Housing Board shall thereafter examine the matter, hear all concerned and thereafter decide the matter in accordance with the decisions of the Supreme Court rendered in the cases of T.N.Housing Board (supra) and Prakash Dal Mill (supra) and other decisions of the Supreme Court keeping in view the guidelines given therein.

14. It is further held that in case the petitioners are unable to pay the enhanced price of the flats or are not willing to do so, the Housing Board would be obliged to return the amount deposited by the petitioners alongwith interest on the same rate they were charging from the petitioners. The aforesaid exercise be completed by the Housing Board as expeditiously as possible preferably within a period of three months from the date of filing of the representation which may be filed by the petitioners -(8)- W.P.No. 500/2010 alongwith a copy of the order passed today and a copy of the petition within three weeks of obtaining the same. Till decision of the respondent/authorities in the matter no coercive steps shall be taken by the respondents and status quo, as it exists today in respect of allotment of the flats, shall be maintained by the respondents.

15. Before parting with the case, I am constrained to observe that the Housing Board is a body created by the State for the purposes of providing infrastructure facility and housing accommodation at a reasonable price and therefore the Housing Board must act reasonably and fairly. It is, however, observed that unfortunately the Housing Board, in the present case as well as other cases, takes 6 to 10 years to handover possession of the flats or plots sold by them and while doing so the price notified by them on the initial date is usually increased by the Board several fold while making the final allotment by relying upon the clause regarding tentative valuation of the price as has been done in the present one. It is observed that the delay in construction and handing over of the flats usually occurs on account of the fact that the Housing Board floats the scheme and recovers the price or part thereof from the purchaser without even having obtaining possession of the land on which the houses or flats have to be constructed as in the present case or on account of delay in creating the necessary infrastructure and civic facilities as well as unnecessary and unavoidable administrative procedures and various other factors. The aforesaid and other reasons for delay can easily be foreseen and anticipated and can, therefore, be conveniently avoided by Housing Board by exercise of -(9)- W.P.No. 500/2010 due diligence thereby avoiding unnecessary complications like escalation etc. and litigation. In fact, the Housing Board having entered into this field is bound to undertake the aforesaid exercise and ensure that such delay is not caused and bona fide purchasers are not unnecessarily harassed. It is further observed that the Housing Board must float the scheme after having obtained possession of the land on which the construction has to be made or plots have to be sold and all formalities in that respect are completed and the infrastructure and other facilities which are required to be provided are adequately taken care of. It must also ensure that the complex exercise of determining the price of the plot, house or the flat, as the case may be, is undertaken prior to floating of the scheme and that the flats/houses are handed over to the purchasers within two to three years of the floating of the scheme so that there is very little or no escalation in price and that the purchaser is not kept in the dark as to the actual price of the flat which he is required to pay so as to avoid such situations as the present one where the price is increased two or three times the original price notified and the parties are dragged into unnecessary litigation.

16. With the aforesaid directions/observations the petition filed by the petitioners stands disposed of.

(R.S.Jha) Judge mct

-(10)- W.P.No. 500/2010