TMI Blog2007 (12) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... c. were heard together and are being disposed of by this common judgment. FACTS : 3. Delhi Development Authority (for short, the Authority) has been constituted under the Delhi Development Act, 1957 (for short, the Act ). Indisputably, it develops different areas in the town of Delhi and constructs houses for all groups of people. 4. Principally it allocates flats under six different schemes viz : (i) Self Financing Scheme (SFS); (ii) Higher Income Group Scheme (HIG Scheme); (iii) Middle Income Group Scheme (MIG Scheme); (iv) Lower Income Group Scheme (LIG Scheme), (v) Janata Scheme; and (vi) Expandable Housing Scheme. 5. The flats constructed and allocated under the SFS Scheme are distinct and different from the other five schemes launched by the Authority. We shall advert to the said distinction a little later. 6. Suffice, however, it to say that not only costs of such schemes are calculated on different basis but the rights and stipulated liabilities thereunder are also different. Cost of flats vary from scheme to scheme. Under one of the schemes, applications were invited by the Authority from 22.12.1992 to 11.01.1993. 7. We may notice some of the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion only after he has completed all the formalities, paid all dues and furnished/executed all the documents as required in the allotment-cum-demand letter of the Delhi Development Authority. 8. Appellants in the first batch of cases and the respondents in the second batch (hereinafter referred to as the registrants ) applied for allocation of flats under the SFS Scheme. The said scheme was floated in terms of Item No.112 of 1992. For the said purpose, brochures are issued. Those who desired to have allocation of such flats were asked to opt therefor at three different places. Allocation of flats under the said Scheme is made upon 90% payment of the estimated costs. However, allotment is made on draw of specific number of flats. Allocation of flats may be made in respect of areas, floors and/or the pockets. On receipt of the letter of demand-cum- allocation by the registrant, the schedule of payment commences. Estimated cost for construction is calculated on the basis of the value of the land and likely cost of constructions. 9. The letter of demand-cum-allocation issued to successful registrants contains a condition which may be noticed for the purpose of these cases and rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 11. Registrants are said to have defaulted resulting in purported automatic cancellation of their allotments. Show cause notices were issued to them. Some of them allegedly expressed their difficulties in regard thereto. Decisions impugned 12. The Vice-Chairman of the appellant who is said to be delegated with the power of the Authority to which reference would be made hereinafter took a policy decision which is reflected from Office Order issued on 16.8.1996, the relevant clauses whereof are : 2. With the approval of L.G. a decision was taken that the current price for South Delhi flats will be worked out by adding a surcharge of 20% from the price worked out as per old formula. The approval of L.G. to this decision was granted on 12.07.1996. 3. There are presently cases in the Housing Department where there have been delays in the making of the payments of the flats allocated/allotted in South Delhi under SFS. Before the aforesaid revision took place, delays of one year or so were being regularised with usual charges, i.e., on payment of 18% interest per annum and restoration charges, etc. in few cases where delays are unusually long, current price has also been dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llocated/allotted flat is in South Delhi where the construction has been undertaken by the South East Zone and South West Zone of the Engineering Wing Except Dwarka (being in West Delhi) the Price of the flat if restored, would be Old Cost interest or current cost whichever is higher. ii) In case where allottees of the localities mentioned (i) above default a small percentage of demand amount upto 10% beyond the due date, this delay, if regularised would be on Old Cost- interest. iii) In other cases of all category flats i.e. where the construction of flats has been undertaken by other zones of Engineering Wing the restoration shall be at Old Cost-interest . 2. A decision exists that while working out the current cost for flats in South Delhi, a surcharge of 20% from the price worked out as per old formula, will be added. This surcharge will continue to be added for South Delhi flats. The interest rates in the above case shall be @ 18% per annum on the default amount. C. RESTORATION CHARGES : In addition to the above, the allottees/allocatees whose allotment is restored by the competent authority, shall be liable to pay Restoration Charges @ 2.5% of the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, having regard to conflict in decisions operating in the field referred the matter to a larger Bench. 20. The Full Bench of the said Court by reason of the impugned judgment modified the judgment and order of the learned Single Judge in respect of current cost holding that the Authority had the requisite jurisdiction also in respect thereof. The validity of levy of 20% surcharge was also upheld. Contention before the Full Bench : 21. Before the Full Bench, the registrants, inter alia, raised a contention that levy of an additional amount over and above the disposal price on the allocatees or flats in South Delhi was wholly unjustified. It was also urged that adoption of current cost formula being contrary to the regulations was also not sustainable in law inasmuch as rights of the writ petitioners crystallized on issuance of the allocation letter and not when the actual allotment of flat took place. Levy of surcharge amounts to a levy of tax or cess, wherefor there is no authority in law. 22. Relying on or on the basis of a decision of this Court in Premji Bhai Parmar and Others v. Delhi Development Authority [AIR 1980 SC 738] as also on Delhi Development Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reaffirmed in DDA v. Ashok Kumar Behl [(2002) 7 SCC 135]. (vii) The present case was different from the case of P.N. Verma v. Union of India [AIR 1985 (Delhi) 417] Submissions of the learned counsel on behalf of the registrants : Mr. Rungta, Mr. Maninder Singh and Mr. Shekhar, learned counsel, submitted : (i) Having regard to the admitted fact that all allocations were made during the period 1991 and 1994 and all of them having paid the instalments except the fourth one, prior to taking of the purported policy decision dated 22.08.1996, the Authority had no jurisdiction either to recalculate the current cost or impose a levy of 20% surcharge. (ii) As the impugned Levy comprises of three elements, namely, (i) the current cost which is determined; whereover (ii) 20% over the actual cost is taken into consideration, and again (iii) 20% surcharge is required to be paid, the same is unreasonable. (iii) The Full Bench wrongly applied P.N. Verma (supra), R.K. Sacher (supra) and Premji Bhai Parmar (supra), which were decided on wholly different set of facts as the scheme(s) involved therein was for low income group of people in terms whereof payments were to be made on com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arun Jaitley and Mr. Sunil Gupta, learned senior counsel, appearing on behalf of the respondents, on the other hand, submitted : (i) The relationship between the parties being contractual, the writ petitions were not maintainable. (ii) Price fixation of flats being within the exclusive domain of the Authority, the High Court has rightly refused to interfere therewith. (iii) The findings arrived at in P.N. Verma (supra) falling in the line of Pushpendra Kumar Jain (supra), on the one hand, and Premji Bhai Parmar (supra), on the other, are strictly not applicable in this case as the policy decision adopted by the Authority on 22.08.1996 was a new one in terms whereof having regard to the equitable principle in mind, the Authority adopted a policy de hors clause (4) of the letter of allotment. (iv) This Court not only in Premji Bhai Parmar (supra) but also subsequently having upheld the decisions of the Delhi High Court in P.N. Verma (supra) and Sheelawanti (supra) and in D.D.A. v. Ashok Kumar Behl [(2002 (7) SCC 135], the same constituted a binding precedent. (v) Sections 5 and 6 of the Act read with Regulation 5 having authorised the Authority to fix the price of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees and allowances for attending its meetings and for attending to any other work of the Authority, as may be determined by Regulations made in this behalf. Section 6 provides for objects of the Authority, in the following terms: 6. Objects of the Authority.- The objects of the Authority shall be to promote and secure the development of Delhi according to plan and for that purpose the Authority shall have the power to acquire, hold, manage and dispose of land and other property, to carry out building, engineering, and manage and dispose of land and property, to execute works in connection with supply of water and electricity, disposal of sewage and other services and amenities and generally to do anything necessary or expedient for purposes of such development for purposes incidental thereto : Provided that save as provided in this Act, nothing contained in this act shall be construed as authorizing the disregard by the Authority of any law for the time being in force. Section 52 of the Act reads as under : 52. Power to delegate .- (1) The Authority may, by notification in the Official Gazette, direct that any power exercisable by it under this Act except the power to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delegate his powers to any officer of the Authority. Regulation 5 provides for disposal of the property which may be effected by either hire-purchase or sale or in such other manner and subject to such terms and conditions as may be decided by the Authority from time to time. Regulation 6 provides for fixation of price to be one which may be determined by the Authority. Regulation 8 provides for the manner of payment of disposal price. Chapter III of the Regulations provides for the procedure for disposal of property. In terms of Regulation 30 of the Regulations, the Authority is mandated to prepare an allotment register in which names and other particulars of the registrants are to be entered. The names of the persons on the waiting list should also be entered in a separate section of the same register in the order in which their names appear in the draw of lots. Power to decide representations has been conferred upon the Committee in regard to the selection of applicants for allotment of property. Regulation 37 provides for handing over of possession of the property. Regulation 59 provides for delegation of all or any of the powers of the authority under the Regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land rates approved by the Government of India for Dwarka is also applied on flats in South Delhi. They are predetermined rates on actual break even basis. 7. Surcharge @ 20% w.e.f. 16.8.96. 33. Indisputably again, other components for determining the cost remains the same every year. The only change which was effected, is the change in the land rate, which is approved by the Government. Other parameters for calculating the material cost were approved by the Vice- Chairman of the Authority. 34. Delhi Development Authority has been created under a Parliamentary Act. It, indisputedly, is a State within the meaning of Article 12 of the Constitution of India. Being so, the provisions of Part III of the Constitution of India must be applied by it. Undisputedly, again, it has also the duty to strive hard for giving effect to the Directive Principles of State Policy as contained in Part IV of the Constitution of India. 35. Objects of the DDA is stated in Section 6 of the Act. We may notice that although the heading of Section 6 states about the object of the Act, the main provision contain both its objects and powers. It is also curious to notice that its power to constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the aforementioned principles in mind, we may consider the points involved herein. Scheme 39. The basic fact that the scheme was floated in the year 1991 being SFS is not in dispute. It has also not been denied or disputed before us that the said scheme in its application is fundamentally different from those of the others schemes, viz., MIG, LIG, Janta and Expandable Housing Scheme. There is also not much dispute as regards the fact that in terms of the said scheme, estimated costs as well as rights and liabilities of the parties are laid down in the invitation to offer. Allocation of the area, floor etc. ought to be notified on acceptance of the offer by the registrants. Such allocation again undisputedly is made on the basis of draw of lot having regard to the specific number of flats available. The registrants have no choice in that behalf. Although he might have exercised his right of option in relation to the area or the floor but then he, in fact, has no hands thereover. The letter of allotment contains the schedule of payment as also other terms and conditions in support thereof. 40. We, in this batch of appeals, are principally concerned, inter alia, with the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaken by the allocattees within a reasonable time. What would be a reasonable time would, however, depend on the facts and circumstances of each case. No hard and fast rule can be laid down therefor. 46. In a given case, it may be a few months but in another having regard to the conduct of DDA, it may be one year or more. What would constitute a reasonable period must also be considered keeping in view the rights of the parties as also the fact that in terms of clause 4 of the offer of allotment there does not exist any prohibition to pray for regularization upon default, even after a period of 120 days. In a situation of this nature, it may not be unjustified to arrive at the conclusion that such a right can be exercised, if not, when the flats were ready for handing over actual possession, but at least when there has been a substantial progress. We must also take into consideration that the scheme, the letter of allotment, the contract between the parties to pay interest in case of default to each other leads to a conclusion that DDA in its wisdom thought that payment of 18% interest shall subserve the purpose. We, however, hasten to add that it does not mean that DDA must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cum demand letter dated 31.3.93 under the DDA (Management Disposal of Housing Estates) Regulations 1968 against your registration under the 5th SFS 1982. AND WHEREAS as per the allocation cum demand letter the following installments were to be paid as per the following schedule :- Installments Amount Due Date Installment Challan paid on No. 1st ₹ 1,35,867/- 30.4.93 24.5.93 032601 (Rs.1,35,867) IInd ₹ 1,25,060/- 30.10.93 30.10.93 112025 31.05.94 (Rs.43,675) (Rs.50,000) IIIrd ₹ 1,56,325/- 30.4.94 24.11.94 010243 (Rs.50,000) IVth ₹ 1,25,060 30.10.96 25.07.96 010245 (Rs.50,000) From the perusal of the above chart, it can be seen that you have not deposited the installment as per schedule indicated in the allocation cum demand letter. AND WHEREAS as per the terms and conditions of the allocation cum demand letter as contained in Clause 4 the allocation was liable to be cancelled if the installments are not made as per the schedule. AND WHEREAS it is evident that you failed to deposit the installments as per the schedule and thus have committed the breach of the terms and conditions of the allocation cum demand letter dated 31.3.1993 Therefore, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 16.8.1996 and subsequent office orders was included. The allocattee at that stage might not have any other option but to pay the same for obtaining possession. But by reason thereof, he never gave up his right to question the action on the part of DDA. Rule of estoppel, therefore, has no application. 56. It was, on the other hand, DDA who having accepted the offer of the allocattee by restoring the allotment, in our opinion, is estopped and precluded from raising a plea as regards application of office order dated 16.8.1996. It may be noticed that even contents of those letters were not disclosed to the allocattee. Was it a Restoration Scheme ? 57. The office orders, on the basis whereof the purported impugned policy had been taken, do not refer to the scheme as a restoration scheme. The resolutions do not say so. Had it been so, DDA would have issued a fresh notification or at least made its stand clear to the allocattees either by way of public notice or by informing each of such defaulters individually. Had such conditions for the purpose of restoration being made known, the allocattees would have accepted it or rejected it. Evidently, it is a part of the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eview. 60. Broadly, a policy decision is subject to judicial review on the following grounds : (a) if it is unconstitutional; (b) if it is de hors the provisions of the Act and the Regulations; (c) if the delegatee has acted beyond its power of delegation; (d) if the executive policy is contrary to the statutory or a larger policy. 61. The stand taken by DDA itself is that the relationship between the parties arises out of the contract. The terms and conditions therefor were, therefore, required to be complied with by both the parties. Terms and conditions of the contract can indisputably be altered or modified. They cannot, however, be done unilaterally unless there exists any provision either in contract itself or in law. Novation of contract in terms of Section 60 of the Contract Act must precede the contract making process. The parties thereto must be ad idem so far as the terms and conditions are concerned. If DDA, a contracting party, intended to alter or modify the terms of contract, it was obligatory on its part to bring the same to the notice of the allocate. Having not done so, it, relying on or on the basis of the purported office orders which is not ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. When the same is done having regard to the relevant factors on the basis of which brochure as well as the notice inviting tender was issued, the superior courts may not interfere; but the same must be done in terms of the original contract and not de hors the same. The authority, even while exercising its residuary power, is required to act within the four corners of the contract. While doing so, the terms of the contract cannot be altered to include any other factors which were contemplated thereunder. While computing the extra cost, no additional factor, thus, can be taken into consideration. If such a power is conceded in the authority, the same would give rise to exercise of arbitrary power. It is not contemplated in law. When construing a provision delegates a power on an authority under a statute, the constitutional provisions must be kept in mind. 67. At the time of calculation of the amount which would be the subject matter of demand of 5th and final instalment, the jurisdiction of DDA is to keep itself confined only to the factors on the basis whereof, the brochure has been issued and offer was made. No additional factor, thus, could be taken into consideration at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere being regularized with usual charges, i.e., on payment of 18% interest per annum and restoration charges, etc. in few cases where delays are unusually long, current price has also been demanded. 70. Thus, a decision in that behalf had not only been taken but also was made applicable both in the case where the delay is of one year or so and the delay which was unusually long. By reason of the said circular, delay in making payments of instalment was to be condoned on payment of either current price or old price whichever is higher. From a perusal of the Resolution dated 27.8.1996, it appears that 20% surcharge was levied over the disposal cost worked out for the flats in South Delhi SFS. It does not show that any subsidy was proposed to be granted for the migrants from Jammu and Kashmir or Punjab. The policy was taken only with a view to balance the reduced cash in-flow. DDA, thus, had in view commercial aspect of the matter and not the social justice aspect. 71. Again, by reason of the office order dated 31.3.1999, the delegation of power in favour of various authorities was redefined. The Vice-Chairman could deal with delay or default even if it exceeds one year and six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a regulation with retrospective effect. The purported regulations, thus, could not have been given retrospective effect or retro-active operation as it is now well- settled that in absence of any provision contained in the legislative Act, a delegatee cannot make a delegated legislation with retrospective effect. [See also Ashok Lanka and Another v. Rishi Dixit and Others, (2005) 5 SCC 598] 76. A definite price is an essential element of binding agreement. A definite price although need not be stated in the contract but it must be worked out on some premise as was laid down in the contract. A contract cannot be uncertain. It must not be vague. Section 29 of the Indian Contract Act reads as under : Section 29 - Agreements void for uncertainty Agreements, the meaning of which is not certain, or capable of being made certain, are void. 77. A contract, therefore, must be construed so as to lead to a conclusion that the parties understood the meaning thereof. The terms of agreement cannot be vague or indefinite. No mechanism has been provided for interpretation of the terms of the contract. When a contract has been worked out, a fresh liability cannot thrust upon a contracting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the components of the figure arrived at, as that would be a matter for determination after evidence and investigation in a suit. Even if an item should be included in the cost components, about the inclusion of which as one of the cost factors there could be some doubt, the writ court may not interfere and may leave the parties to fight out their battle in a regular suit. But where the disposal cost is fixed on a basis totally different from that announced earlier or where the components taken into account cannot be described by any stretch of imagination as cost factors or where a component of the cost is shown to have been fixed arbitrarily and without any basis whatsoever, the Court has no option but to quash the determination of the disposal cost so fixed and direct the DDA to undertake afresh a proper determination thereof in accordance with the terms of the original contract or after excluding the items unwarrantedly included therein or after re- determining the value of any component on a proper and reasoned basis On legal principle, therefore, ratio of P.N. Verma (supra) is not very different from what has been held herein. 80. Another fundamental error committed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless it comes within the sphere of contract. 86. It may be reiterated that it is only those components which fall within the Brochure of the DDA or within the purview of the statutory requirements can be included in the exercise of price fixation. To the said extent are the decision of the Delhi High Court in P.N. Verma (supra), Narsingh Jain v. Union of India [(80) 1999 DLT 742] and DDA SFS Flat Owners Society v. UOI [AIR 2001 Del 39]. 87. Against the said judgment of the Division Bench of the High Court in P.N. Verma (supra), an appeal was preferred by the DDA before this Court. This Court in the said appeal titled as DDA v. SFS Assn. and Ors. [Civil Appeal No. 4402 of 1985] rejected the contention of the DDA that under the terms of the Brochure related to the said scheme it was empowered to recover from the registrants an additional amount over and above the disposal price by way of equalization charges in the following terms: The lengthy and elaborate judgment of the High Court under appeal makes instructive reading in prohibiting the DDA from adding to the prices of the named flats on escalation termed as equalisation and ad hoc charges . From the terms of the model c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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