Madhya Pradesh High Court
Smt. Bhagwati @ Roma Chugh vs M.P. Housing Board on 13 August, 2013
Author: Sanjay Yadav
Bench: Sanjay Yadav
HIGH COURT OF MADHYA PRADEESH JABALPUR
(Second Appeal No. 1160/2008)
Smt. Bhagwati
Vs.
M.P. Housing Board and another
PRESENT : HON'BLE SHRI JUSTICE SANJAY YADAV
Counsel for Petitioner Shri Ravish Agrawal, Senior
Advocate with Shri K.S. Jha,
Advocate.
Counsel for respondents Shri V.S. Shroti, Senior Advocate
with Shri Vikram Johri, Advocate.
Counsel for intervener Shri Ashok Banke, Advocate.
J U D G M E N T (13/8/2013) PER SANJAY YADAV, J This second appeal at the instance of plaintiff was admitted for final hearing on the following substantial questions of law:
(i) Whether the courts below committed an error of law in not addressing itself to the controversy with regard to unreasonable and arbitrary hike/revision of rates of the disputed space and misdirected it in deciding the issue as to whether the defendants had authority in law to revise the rates of the disputed space?
(ii) Whether the finding recorded by the lower appellate court that the defendants have explained as to under what circumstances the cost of booked space has been enhanced, is perverse?2 Second Appeal No. 1160/2008
(iii) Whether the suit preferred by the appellant/plaintiff is barred by proviso to section 34 of the Specific Relief Act, 1963?
(iv) Whether the lower appellate Court committed an error of law in rejecting the applications under order 41 rule 27 and under order 6 rule 17 C.P.C preferred by the appellant/plaintiff?
2. Parties shall be referred to as they stood before the trial court.
3. Facts giving rise to the Appeal, are that in response to the advertisement published and brochure issued by the defendants, plaintiff booked a space; showroom and departmental store under self financing payment schedule, to be constructed near T.T. Nagar Stadium New Market. Case of the plaintiff before trial court was that the price of proposed construction was fixed at Rs.32 lacs of which Rs.3.20 lacs were deposited on 10.2.2000 and the remaining amount was to be deposited in three equal installments of Rs.7.20 lacs within twelve months. The plaintiff was allotted registration number under the scheme. On 2.9.2000 the plaintiff was informed that the installment schedule has been postponed and the revised scheduled shall be communicated separately. That, on 27.9.2001 the plaintiff was informed that her registration is temporary and the rate of the booked property has been revised @ 2000/ per sq. foot. On 9.10.2001 the plaintiff was informed that the area is 2292 sq. ft. of floor and 605 sq. ft. of mezzanine floor total area being 2897 sq. ft. That by communication dated 27.11.2001 the plaintiff was informed that the rates of booked property have been revised to Rs.57,94,000/ @ Rs.2000/ per sq. ft. Being aggrieved plaintiff filed the suit for declaration to the effect that the letter/communication dt. 27.11.2001 is illegal and is not binding on the plaintiff and that, the plaintiff is entitled to allotment of the space booked by her at the original cost and is also entitled for adjustment of interest on the amount deposited by her. The plaintiff also sought relief of injunction to the effect that the 3 Second Appeal No. 1160/2008 defendant be restrained from cancelling the registration of the plaintiff under the scheme.
4. The defendants disputed the claim of the plaintiff contending that in the advertisement estimated and not the final cost of space booked was stated. That, the plaintiff was informed about the revised rates on the basis of the estimated cost and actual cost incurred by the defendants. It was further contended that the plaintiff was given the option that in case she is not willing to accept the revised rates she can withdraw the amount deposited by her with interest @ 8% per annum. It was also contended that initially the cost of construction was estimated at Rs.350/ per sq. ft. Subsequently taking into account the cost of development work, cost of construction, lease rent payable to the government and other expenses the rates were revised to Rs.2000/ per sq. ft. and communication to said effect was entered into. It was further contended that the plaintiff since did not accept the revised rates, therefore, her registration got automatically cancelled on 10.10.2001.
5. The trial court vide judgment and decree dated 31.8.2006, dismissed the suit. It held that the rates advertised by the defendants were only the estimated rates and the plaintiff did not book the space in question at a fixed rate of Rs.32.00 lacs. It further held the registration in respect of the space in question has been automatically cancelled as the plaintiff did not take any appropriate steps in pursuant to the communication dt. 27.11.2001. The trial court held that there was no concluded contract and no right had accrued in favour of the plaintiff merely on registration. That, as no consequential relief of execution of sale deed and possession being sought the suit was held to be barred by proviso to Section 34 of the Specific Relief Act, 1963. The trial court held that suit for specific performance ought to have been filed.
6. An appeal preferred against the judgment and decree was also dismissed by judgment and decree dated 26.7.2008. The appellate Court also rejected the applications under Order 41 Rule 27 and Order 6 Rule 17 Code of Civil Procedure, 1908; whereby, the 4 Second Appeal No. 1160/2008 plaintiff respectively sought to produce documents with regard to statement of price of disputed space, letter written by one Anil Khewani to the Estate Officer, sale deed executed in favour of Anil Khewani, photographs of shop of Anil Khewani, and sought amendment to incorporate, averments with regard to decision rendered by the Supreme Court in Civil Appeal No. 1731 of 2006 (arising out of SLP (Civil) No. 22560/2004): M.P. Housing Board v. Anil Kumar Khiwani decided on 14.3.2005. First Appellate Court rejected the application under Order 41 Rule 27 CPC, for the reasons that, the documents were available with the plaintiff at the trial stage and no cogent reasons were assigned by the plaintiff preventing her from producing these documents. The first appellate court observed that as per clause (aa) of Rule 27 of Order 41 CPC it being obligatory for the party seeking to produce additional evidence to establish that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed and the defendant having failed to establish the same. Whereas application under Order 6 Rule 17 CPC was rejected by the First Appellate Court for the reasons that the verdict by Supreme Court is not required to be pleaded.
7. It is the contention of learned Senior Counsel appearing for the plaintiff that the Courts below committed an error of law in not addressing itself to the controversy with regard to unreasonable and arbitrary hike/revision of rates of the disputed space and misdirected it in deciding the issue as to whether the defendants had authority in law to revise the rates of the space in question. It is next urged that, the finding recorded by the lower appellate Court that the defendants have explained as to under what circumstances the cost of booked space has been enhanced is perverse. It is further contended that the Courts below erred in holding that the contract between the parties is not concluded. The finding that the suit is barred by proviso to Section 34 of the Specific Relief Act, 1963 is being questioned on the ground that 5 Second Appeal No. 1160/2008 there is no foundation for such finding. The decision of lower appellate Court of rejecting the application under Order 41 Rule 27 and Order 6 Rule 17 CPC is also being questioned that the same is erroneous.
8. The defendant on its turn defend the judgment and decree by the trial court and first appellate court.
9. Taking up first, the contention regarding rejection of application under Order 41 Rule 27 of Code of Civil Procedure, 1908, it being not in dispute that the documents in question being in existence during trial and it being incumbent upon the party to establish that notwithstanding the exercise of due diligence such evidence was not within his knowledge or could not after the exercise of due diligence, be produced by him at the time of decree appealed against was passed. The plaintiff having failed to establish the same, as no evidence is there on record, the first appellate Court did not commit any error in rejecting the application. Similarly, the incorporation of the verdict of Supreme Court being sought though amendment in the suit plaint has rightly been negatived as no such pleading is warranted.
10. As regard the contention that the Courts below committed an error in not addressing itself to the controversy with regard to unreasonable and arbitrary hike/revision of rates of the disputed space and misdirected it in deciding the issue as to whether the defendants had authority in law to revise the rates of the disputed space and whether the finding recorded by the lower appellate court that the defendants have explained as to under what circumstances the cost of booked space has been enhanced is perverse.
11. It is required to be noted first the pronouncement of law in respect of scope of enhancement/revising the rates of space.
12. In Bareilly Development Authority and another v. Ajay Pal Singh and others (AIR 1989 SC 1076) it is held:
"16. ..... ..... ...... .... From the above, it is clear that all the respondents who have sent their 6 Second Appeal No. 1160/2008 applications for registration with initial payment only after having fully understood the terms and conditions of the brochure inclusive of the Clauses 12 and 13 and Notes 1 and 2 of the General Information Table as per which the BDA has reserved its right to change, enhance or amend any of the terms and/or conditions as and when felt necessary, and also the right to relax any of the conditions at its discretion, and that the cost shown in the column 4 of the brochure was only estimated cost subject to increase or decrease according to the rise or fail in the price at the time of completion of the property. This is not only the case of the applicants of MIG scheme but also of the other applicants falling under the other categories i.e. HIG, LIG and EWS. So it cannot be said that there was a mis statement or incorrect statement or a fraudulent concealment in the information supplied in the brochure published by the BDA on the strength of which all the applicants falling under the various categories applied and got their names registered. In such a circumstance the respondents cannot be heard to say that the BDA has arbitrarily and unreasonably changed the terms and conditions of the brochure to the prejudice of the respondents."
"18. The respondents were under no obligation to seek allotment of houses/flats even after they had registered themselves. Notwithstanding, they voluntarily registered them selves as applicants, only after fully understanding the terms and conditions of the brochure inclusive of Clauses 12 and 13 and Notes 1 and 2 of the General Information Table which we have reproduced above, they are now trying to obtain the houses/flats at the price indicated in the brochure at the initial stage conveniently ignoring the other express conditions by and under which the BDA has 7 Second Appeal No. 1160/2008 reserved its right to change the terms and conditions as and when felt necessary, evidently depending upon the escalation of the prices. One should not loose sight of the fact that the BDA did not compel anyone of the applicants to purchase the flat at the rates subsequently fixed by it and pay the increased monthly instalments. On the contrary, the option was left over only to the allottees.... ..... ....."
In Delhi Development Authority v. Pushpendra Kumar Jain - 1994 Supp (3) SCC 494 it has been held:
"8. Mere identification or selection of the allottee does not clothe the person selected with a legal right to allotment at the price prevailing on the date of drawl of lots. The scheme evolved by the appellant does not say so either expressly or by necessary implication. On the contrary, clause (14) thereof says that "the estimated prices mentioned in the brochure are illustrative and are subject to revision/modification depending upon the exigencies of layout, cost of construction etc." It may be noted that registration of applicants under the said scheme opened on September 1, 1979 and closed on September 30, 1979. About, 1,70,000 persons applied. Flats were being constructed in a continuous process and lots were being drawn from time to time for a given number of flats ready for allotment. Clause (14) of the Scheme has to be understood in this contextthe steady rise in the cost of construction and of land. No provision of law also could be brought 10 our notice in support of the proposition that mere draw of lots vests an indefeasible right in the allottee for allotment at the price obtaining on the date of draw of lots. In our opinion, since the right to flat arises only on the communication of the letter of allotment, the price or rates prevailing on the date of such communication is applicable unless otherwise 8 Second Appeal No. 1160/2008 provided in the Scheme. If in case the respondent is not willing to take or accept the allotment at such rate, it is always open to him to decline the allotment. We see no unfairness in the above procedure. .... ....."
In Indore Development Authority v. Sadhana Agarwal (Smt.) and others - (1995) 3 SCC 1, it is held "10. So far the facts of the present case are concerned, it is an admitted position that in the proforma attached to the application for registration, the appellant said that the price mentioned by them was a probable and estimated cost, the definite price shall be intimated at the time of the allotment. Thereafter, the appellant had been informing the respondents and others who had got themselves registered, from time to time regarding the escalation in the cost of the flat. One of the reasons for the rise of the price for the LIG flat from Rs. 60,000/ to Rs. 1,16,000/ appears to be the increase in the area of the flat itself from 500 sq.ft. to 714.94 sq.ft. From 1982 to 1984, possession of the flats could not be delivered because of the dispute pending in the Court which also contributed to the increase in the cost of the flat. Admittedly, the respondents came in possession of the flats in the year 1984. In the facts and circumstances of the case, we are satisfied that no interference was called for by the High Court."
In Tamil Nadu Housing Board v. Service Society and another : (2011) 11 SCC 13, it is held:
"25. If a development authority or board acquires a large tract of land and develops it for residential purposes and forms plots in a portion thereof for construction of houses, utilises another portion for construction of multistoreyed apartment buildings and uses the balance for development works like roads, drains, parks, open spaces apart from earmarking 9 Second Appeal No. 1160/2008 some areas for site office/electrical substation/police station, etc., then what is chargeable to the allottee of a plot or a house, is not only the cost of the plot area, but also the cost of the proportionate share in the common areas, used for development and amenities and the cost of the development.
30. Whenever allotments are made even before the completion of the development of land and construction, necessarily the cost that is shown by the authority or the board will be tentative. In regard to the land cost, there may be claims for enhancement of compensation before the reference court with appeals to high court and this court. Sometimes the entire process may take 10 to 15 years and till that process is concluded the final cost of the land cannot be determined. An allottee cannot therefore say that the authority cannot increase the cost after 12 years.
31. Similarly cost of developing of land into residential area requires coordination with different contractors engaged for laying roads, laying drains, developing parks and playgrounds, drawing electricity lines, water lines, sewerage lines etc. Many times, disputes with the contractors lead to delays and litigation. Sometimes though the work may be completed within three years, the settlement of bills and ascertainment of cost may take several years. There may also be encroachments, which will have to be removed which apart from being time consuming and involving litigation, delay the development and finalization of cost of development. As a consequence, the development cost may also shoot up beyond the estimate on account of delays, additional claims of contractors, litigations and other factors. The same applies to the cost of construction of the houses also."10 Second Appeal No. 1160/2008
In the case at hand as perceived from written statement filed by defendants and the evidence of D.W 1 it is amply clear that besides stipulating in the brochure that the price are tentative, the escalation of price to Rs.2000/ per sq. ft is in consonance with the cost incurred by the defendant which has been duly explained by the defendant as would warrant any interference with the findings recorded by the Trial Court as well as first appellate Court in absence of any cogent material on record to draw an inference contrary to the findings.
13. In respect of the submission regarding accrual of vested right on being registered for allotment of space in question; the plaintiff, as apparent from the findings recorded by both the Courts has failed to establish an accrual right over the property in question which could have been only if and when the plaintiff had abide by the stipulations in the brochure and subsequent correspondence, requiring her to deposit the amount at enhanced rates. Having not done so the plaintiff cannot claim to have an accrual of right merely on the basis of registration or the initial allotment letter.
14. In Delhi Development Authority v. Pushpendra Kumar Jain (supra) it has been held:
"8. Now coming to the other ground, we are unable to find any legal basis for holding that the respondent obtained a vested right to allotment on the draw of lots. Since D.DA is a public authority and because the number of applicants are always more than the number of flats available, the system of drawing of lots is being resorted to with a view to identity the allottee. It is only a mode, a method, a process to identity the allottee, i.e., it is a process of selection. It is not allotment by itself. ..... ....... ...... ..... ......."
In Manjul Srivastava v. Government of Uttar Pradesh and others : (2008) 8 SCC 652, it is held :
17. In our view, the Commission was justified in rejecting the claim of the appellant. The plot in 11 Second Appeal No. 1160/2008 question was a category of plot (Category D) which was only reserved for the appellant but from the Clauses, as mentioned above, it would be clear that the final allotment was to be made as regards specific plots only after the lottery related to such allotment was made. It is beyond dispute that in the draw of lottery, the appellant was unsuccessful as her name did not figure in the same. It could not be disputed that 'plot reserved' and a 'plot allotted' are different aspects altogether. A reading of the Clauses, as indicated above, would clearly show that a plot was reserved for her subject to the final allotment after the lottery related to such allotment was made.
20. Therefore, reading the aforesaid Clauses in the brochure, it is evident that since the appellant was not allotted any plot and only a plot was reserved subject to holding of a lottery for the specific plots for allotment, the appellant would not acquire any legal right to such plot, only she would be entitled to get refund of her amount deposited with the GDA.
21. In view of our discussions made hereinabove and a clear reading of the clauses of the Brochure, it would be evident that two separate parts of the clauses have been indicated in the brochure. The first part was with regard to the reservation amount and second part was with regard to allotment of plot if an applicant was successful in the draw of lots. In this connection, the letter issued by the GDA dated 10th of February, 1989 may be looked into. The subject indicated in the said letter to the appellant was regarding reservation of Plot-D in Govindpuram: then from the letter itself it would also be evident that a plot was reserved for the appellant. It would also be evident from the said letter that certain clauses were inserted by the GDA if an applicant was defaulter in payment of the balance 12 Second Appeal No. 1160/2008 amount. In this connection, Clause 5 of the letter dated 1021989 needs reproduction : "Final cost of the plot shall be determined after taking into account its specific location in terms of parkfacing, corner, major road facing etc. for which extra rates are prescribed to be charged which will be intimated after allotment of specific plot."
It was made clear in the said letter that the allotment was subject to conditions "Draw for specific Plot number shall be held separately". Therefore, it must be inferred that no plot was allotted to the appellant since allotment of specific plot could not be made because of failure on the part of the appellant to succeed in the draw of lots."
15. In the case at hand plaintiff having failed to establish that a vested right accrued in her favour, a finding arrived at by trial court as well as first appellate Court on the basis of cogent evidence on record cannot be interfered with.
16. The next contention raised by Senior Counsel regarding the finding that the suit was barred by proviso to Section 34 of Specific Relief Act, 1963 is evident from the suit plaint. The relief sought for by the plaintiff is:
i) It be declared that the letter No. 7270 dated 27th November, 2001 (Annexure XII), issued by the defendants, revising the rates, is illegal and not binding on the plaintiff and further that the plaintiff is entitled to allotment of the space booked by her (as per Annexure II), at the original cost and is also entitled for adjustment of interest on the amount deposited by her.
ii) By the grant of an injunction, the defendants, jointly and severally, their employees and agents, be restrained from cancelling the registration of the 13 Second Appeal No. 1160/2008 plaintiff and/or allotting the said space to any other party.
iii) Cost be awarded in favour of the plaintiff.
iv) Any other relief be granted."
17. Apparent it is from evidence on record that before filing of civil suit since the plaintiff had not deposited the enhanced amount, the allotment was cancelled. Therefore, incumbent it was upon the plaintiff to have sought a consequential relief.
18. Proviso to Section 34 stipulates:
"Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so."
19. In Ram Saran and another v. Smt. Ganga Devi (AIR 1972 SC 2685) it is held:
"4. We are in agreement with the High Court that the suit is hit by Section 42 of the Specific Relief Act. As found by the factfinding Courts, Ganga Devi is in possession of some of the suit properties. The plaintiffs have not sought possession of those properties. They merely claimed a declaration that they are the owners of the suit properties. Hence the suit is not maintainable. In these circumstances, it is not necessary to go into the other contention that the suit is barred by limitation."
20. In Ramnarayan and others v. Firm Mangeram Radheshyam Hardoi (U.P.) and another (AIR 1979 MP 61) it is held:
8. It will thus be seen that Section 34 of the Specific Relief Act, 1963 (old Section 42) merely gives a statutory recognition to certain wellrecognised types of declaratory reliefs and further enacts a limitation on the grant of such relief in the shape of the proviso.
Analysing the scope of this section, Dixit, J. (as he then was) in Madanlal v. State of Madhya Bharat, AIR 1955 14 Second Appeal No. 1160/2008 Madh B 111 pointed out that in order to be able to seek a relief of declaration in terms of Section 42 (of old Act), the plaintiff must show that he has some legal character or some right to property and that his opponent is denying or interested to deny such legal character or right. Legal character is the same thing as Legal status, i.e., a position recognised by law. Like view has been expressed by the Allahabad High Court in Mahabir Jute Mills v. Firm Kedar Nath, AIR 1960 All
254.
10. Question then is whether the Court's jurisdiction to grant declaratory decrees is unfettered. The law has been stated succinctly in para 511, pp. 212215 of Halsbury's Laws of England (Hailsham Edition), Vol. 19, in these terms:
"Judgments and orders are usually determinations of rights in the actual circumstances of which the Court has cognisance, and give some particular relief capable of being enforced. It is, however, sometimes convenient to obtain a judicial decision upon a state of facts which has not yet arisen, or a declaration of the rights of a party without any reference to their enforcement. Such merely declaratory judgments may now be given, and the Court is authorised to make binding declarations of right whether any consequential relief is or could be claimed or not. There is a general power to make a declaration whether there be a cause of action or not, and at the instance of any party who is interested in the subject-matter of the declaration, and although a claim to consequential relief has not been made, or has been abandoned or refused, but it is essential that some relief should be 15 Second Appeal No. 1160/2008 sought or that a right to some substantive relief should be established".
It can at once be seen that a declaration falling outside Section 34 of the Specific Relief Act will be governed by the general provisions of the Civil P. C. like Section 9 or Order 7, Rule 7, in the decision in Supreme General Film Exchange Ltd. v. Brijnath Singhji, AIR 1975 SC 1810, it is ruled that the circumstances in which a declaratory decree under Section 42 should be awarded is a matter of discretion depending upon the facts of each case. Thus where the act complained of deprives the plaintiff of certain present rights to property and the declaratory decree has the effect of giving present relief as well, the Courts shall have power to make such a declaration. In Sheo Singh Rai v. Mst. Dakho, (1877-78) 5 Ind App 87 (PC), the law is very precisely stated in the following terms:
".........a declaratory decree ought not to be made unless there is a right to some consequential relief which, if asked for, might have been given by the Court or unless in certain cases a declaration of right is required as a step to relief in some other Court."
11. The conclusion we have thus reached may be summarised thus: Thus Court's power to grant declaratory decrees is not limited to the terms of Section 34 (present) or Section 42 (old) of the Specific Relief Act. Declaratory decrees can well be made by the Courts under the general provisions of the Civil P. C. as Section 9 or Order 7 Rule 7, of the Code. The exercise of jurisdiction to grant such declaratory reliefs beyond the terms of that section shall depend upon the facts of each case. Such a declaration 16 Second Appeal No. 1160/2008 may be granted when it is essential as a step to a relief in some other case or when a declaration in itself is a substantial relief and has immediate coercive effect.
21. When examined on the touchstone of above mentioned well established settled legal principle and the nature of relief sought by the plaintiff, the finding arrived at by the Trial Court as well as first appellate Court in respect of plaintiff in not seeking consequential relief and the plaint being hit by proviso to Section 34 of the Act cannot be faulted with. Having thus considered, substantial questions of law are answered against the plaintiff.
22. In view of above analysis, the judgment and decree passed by Trial Court affirmed by the First Appellate Court does not warrant any interference. Consequently the appeal fails and is dismissed.
Costs as incurred.
(SANJAY YADAV) JUDGE vivek tripathi