Supreme Court of India
BARELLLY DEVELOPMENT AUTHORITYversusVRINDA GUJARATI AND ORS.
- Citation
- 2004 INSC 132
- Decided
- 26 February 2004
- Disposal
- Appeal(s) allowed
- Bench
- S RAJENDRA BABU
Holding
The enhancement in the cost of the flats is valid and the allottees are bound to pay the enhanced price, with 9% simple interest payable in six‑monthly installments.
Summary
The Bareilly Development Authority (BDA) ran a self‑financing housing scheme in which the brochure stated only an estimated cost of flats, with final costing to be determined later. After construction was altered from four storeys to two, the BDA raised the price of the flats based on actual increased area, land cost and additional facilities, and notified the allottees, who filed affidavits undertaking to pay the enhanced amount and subsequently took possession. The allottees later refused to pay the increased price, prompting the BDA to initiate recovery proceedings under the U.P. Zamindari Abolition and Land Reforms Act, 1950. The Allahabad High Court allowed the allottees' writ petition, directing adjustments to the price and ordering the BDA to pay 18% interest for alleged delay in possession, but did not strike down the price increase. On appeal, the Supreme Court held that the price enhancement was valid under the brochure and allotment letter clauses, that the allottees were bound by their affidavits, and set aside the High Court’s order for the BDA to pay interest, directing the allottees to pay the enhanced price in six‑monthly installments with 9% simple interest.
Issues considered
- The validity of the price enhancement of flats under the terms of the brochure and allotment letters.
- Whether the allottees, having executed affidavits undertaking to pay the enhanced amount and taken possession, are bound to pay the increased price.
- Whether the High Court erred in directing the BDA to pay interest to the allottees while denying interest on the unpaid enhanced amount.
- The appropriate rate of interest, if any, on the unpaid enhanced amount.
- Whether there was an inordinate delay in allotment or possession justifying interest payable to the allottees.
Legislation cited
Subjects
housing schemeself‑financingprice escalationcontractual obligationaffidavit of undertakinginterest raterecovery proceedingsstatutory authorityland reformspossession delay
Judgment
A BARElLLY DEVELOPMENT AUTHORITY
v.
VRINDA GU JARA TI AND ORS.
FEBRUARY ·26, 2004
B (S. RAJENDRA BABU, DR. AR. LAKHSMANAN AND G.P.
MA THUR, JJ.]
U.P. Urban Planning and Development Act, 1973-Section 3-U.P.
Zamindari Abolition and Land Reforms Act, 1950-Allotment of flats under
C &If Financing Scheme by Development Authority-Brochure and allotment
letter stating estimated cost of construction and that final costing to be done
after completion on basis ofactual cost-Demand ofenhanced price-Allottees
filing affidavits of undertaking that they are bound by final costing offlats and
also liable to pay enhanced amount-Possession offlats delivered-Failure of
D allottees to pay enhanced amount-Recov~ry Proceedings-Issuance of
recovery certificates-Writ Petition challenging enhancement in final cost and
recovery proceedings-High Court directing the authority to adjust amounts
against final price offlats though not striking down the enhanced price-On
appeal held: Enhancement in cost was due to actual increase in cost offlat
in accordance with the brochure and allotment letter issued-Allottees after
E filing undertaking to pay the enhanced amount and taking possession offlats
cannot avoid payment-Also there is no inordinate delay in allotment-Hence,
allottees directed to pay enhanced price offlats in six monthly equal instalments
with 9% simple interest.
Appellant-Bareilly Development Authority invited applications for
F allotment of flats to be constructed by it under the Housing Scheme. The
Housing Scheme is a Self Financing Scheme wherein the allottees were to pay
the cost of the flats in quarterly instalments on which no interest is payable.
However, if the amounts are not paid within the prescribed time limit, penal
interest of 18% per annum would be payable along with amounts due. Clause
G 2 and 15 of the Brochure specified that the cost of each flat given in the
Brochure was estimated cost and that the final costing will be done later which
was subject to amendment by the appellant. It did not contain any prescribed
date or time period for either construction of the flats or the delivery of
possession. Respondents applied for allotment of flats. They were allotted
under draw of lots and allotment letters were issued indicating that the price
H ns
- BAREILL Y DEVELOPMENT AUTHORITY v. VRINDA GUJARATI
of the flat was stili an estimated one and that the final costing would be done
after completion on the basis of the actual. costs. Final Costing Committee
729
A
was set up. Thereafter, respondents were informed about the final costing of
the said flats and also that the balance amount of price of the flat as well as
the proposed lease rent was to be deposited within 15 days of the receipt of
to
the notice. Respondents filed objections the increase in price which were
rejected. Respondents then filed affidavits of undertaking that they were B
bound by the final costing of the flats and also liable to pay the enhanced
amount. Thereafter, the possession was delivered to them. Respondents again
made representation against the final costing of the said flats. In the meantime
appellants issued another notice to the respondents to pay the enhanced unpaid
~
amounts of the costs with 18% interest. Respondents failed to pay the said c
amount. Appellants then initiated recovery proceedings against respondents
under U.P. Zamindari Abolition and Land Reforms Act, 1950 and issued
recovery certificates against respondents. Respondents filed writ petition
challenging enhancement in the final cost of the flats and the recovery
proceedings. High Court allowed the writ petition and directed the appellants
to adjust various amounts against the final price of the flats, though it did D
not strike down the enhanced price or hold it illegal; and that since there was
unreasonable delay in delivery of possession, appellants were directed to pay
18% interest to respondents from date of allotment to date of delivery of
possession. Hence the present appeal.
Appellant-Development Authority contended that High Court failed to
E
appreciate that Clauses 2 and 15 of the Brochure clearly stated that the cost
of each flat given in the Brochure was only an estimated cost of the said flats
· and the final costing will be done later which was subject to amendment by
the appellant; that the revised cost of the said flats was necessitated by the
increase in size of the flat as well as increase in each flat's share in cost of the F
land due to reduction in number of flats built; that the respondents were
informed of the same and they agreed to abide by the increased cost by filing
affidavits of undertakings; that the direction issued by the High Court
regarding the payment of interest by the Authority to the respondents is
baseless and issued without any reason; that the High Court has failed to
appreciate that by the interim order it had only stayed the recovery G
proceedings against the respondents for non-payment of balance amount, and
not the liability of the said respondents to pay the said amount; and that the
-., High Court has not struck down the enhanced cost announced by the appellant
nor has it held that the appellant is not entitled to recover the unpaid amounts
from the respondents, it has only directed that certain adjustments be made. H
-
730 SUPREME COURT REPORTS [2004) 2 S.C.R.
A Respondents contended that the appellant bt;ing a statutory body is
under obligation to provide flats to the respondents, who belong to the Middle
Income Group and other citizens of a reasonable and just price; that a reading
of the terms and conditions of the Brochure would show the same· was one
sided; that the terms and conditions of the contract as well as the undertaking
B given by the respondents are not voluntary and respondents who are weaker
sections of the society were forced to give undertakings which were
enforceable; and that the interest rate be reduced from 18% to 6% as the
allottees under the scheme belong to Middle Income Group and they could
not be in a position to pay interest.
c Allowing the appeal, the C~urt
HELD: 1.1. The parties are bound by the terms of the ·contract in regard
to the payment of the original cost of the flats as per the agreement. The
enhancement in the cost was due to actual increase in t~e cost of the flat. Such
enhancement was in accordance with clauses 2 and 15 of the Brochure and
D clause 2 of the allotment letters issued to various applicants. The enhancement
was clearly accepted by the respondents by their various affidavits of
undertakings filed before the Development Authority. Respondents after
undertaking to pay the enhanced amount and after taking possession of the.
flats cannot be allowed to raise frivolous contentions to avoid payment to the,
E appellant. [741-C; 739-F-G]
LJC of India and Anr. v. Consumer Education & Research Centre and
Ors., [1995) 5 SCC 482, distinguished.
Bareilly Development Authority and Anr. v. Ajai Pal Singh and Ors., [1989]
2 SCC 116 and Indore Development Authority v. Sadhana Agarwal (Smt.) and
F Ors., [1995] 3 sec 1, referred to.
1.2. The Scheme originally was to build four storeyed buildings but now
only t~o storeyed building has been built. As a result, the entire cost of the
flats has rateably been distributed among the occupiers of the two storeys
G building instead of larger number of occupiers of the four storeys building as
was originally envisaged. This is another reason for the enhancement in the
cost of the flat. [739-H; 740-A]
.
1.3. In the instant case, there was no period prescribed for allotment
and in any case, the flats in question were allotted within two years from the
H
BAREILL Y DEVELOPMENT AUTHORJTYv. VRINDA GUJARATI [LAKSHMANAN, J) 731
- issuance of the Brochure and there cannot be said to be any inordinate delay.
[740-D)
A
Delhi Development Authority v. Pushpendra Kumar Jain, (1994) Supp. 3
sec 494, referred to.
1.4. Once the liability of the respondents to pay the balance amount B
remaining unpaid out of the final cost of the flat ;~ m,t struck down and
remains in existence, the appellant cannot be asked to forego the interest for
the period, or any part thereof, for which the said amounts remain unpaid.
(740-G)
-- 1.5. High Court is not right in creating double jeopardy for the BDA
directing it to pay interest to the respondents while at the same time to direct
C
the respondents not to pay interest on the unpaid amounts. However, taking
note of the financial status of the respondents and in the peculiar facts and
circumstances of the case, respondents are directed to pay 9% simple interest
on the enhanced price of the flats. The enhanced price of flats would be paid D
in six monthly equal instalments together with accrued interest payable on
diminishing balance. If the respondents commit any two defaults in the
payment of instalments on the enhanced price, 18% interest would be
recovered from them by BDA. The amounts deposited by the respondents as
per the interim order, if any, will be given credit to. (740-H; 741-A-B)
E
- 1998.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3706 of
From the Judgment and Order dated 14.5.96 of the Allahabad High
Court in C.M.W.P. No. 36735 of 1995.
F
Bharat Sangal, Ms. Sangeeta, S. Panikar and R.R. for the Appellant.
A.K. Sanghi, Punit D. Tyagi and R.C. Verma for the Respondents.
The Judgment of the Court was delivered by
G
DR. AR. LAKSHMANAN, J. This appeal is directed against the
judgment and order dated 14.5.1996 passed by the High Court of Judicature
at Allahabad in Civil Misc. Writ Petition No. 36735 of 1995. The appellant-
Bareilly Development Authority '( hereinafter referred to as "the BDA") was
set up by the State of U.P. ~y Notification dated 19.4.1977 issued under
Section 3 of the U.P. Urban Planning and Development Act, 1973. The BDA H
732 SUPREME COURT REPORTS [2004] 2 S.C.R.
A issued an advertisement calling for applicants to apply for allotment of flats
to be constructed by it in the Priyadarshani Nagar Yojna of Bareilly under the
--
Pushpanjali Scheme and the Kusumanjali Scheme. The appellant also issued
a Brochure giving the terms and conditions under which the said applicants
could apply for and be allotted the flats under the said Scheme. The estimated
B cost of the said flats was also given in the said Brochure and it was clearly
mentioned that the final costing will be done later and the costing of the flats
was subject to the right of the appellant to amend the same. The Brochure
also did not contain any prescribed date or time period for either construction
of the flats or the delivery of possession.
_c;,.-
C The respondents in this appeal applied for allotment of flats in
Kusumanjali Scheme. As per the Brochure, 52 flats under the Scheme were
to be of 57.10 Sq. Mtrs. (614.39 Sq. Ft.) and were to cost as follows:-
Ground Floor Rs.2, 10,000.00
D First Floor Rs.2,00,000.00
Second Floor Rs.1,90,000.00
Third Floor Rs. l,80,000.00
E Respondents 1-5 registered themselves for the flats in Kusumanjali
Scheme and also paid the required registration fee. The construction of the
flats was started and thereafter, there was some dispute between the BDA and
its contractor and the construction was delayed for nearly one and a half year
and finally the construction was re-started though only two floors instead of
original four were built in the Kusumanjali Scheme and thus only 22 flats
F were built out of 52 originally intended. After the draw oflots, the respondents
were issued allotment letters indicating therein in Clause 2 that the price of
the flat was still an estimated one and that the final costing would be done
after completion on the basis of the actual costs and would be informed
thereafter to the allottee which would be payable by them. Clause 2 of the
G Allotment Letter (Annexure-B) reads as under:
"The estimated cost of the flat is Rs.2, 10,000/-. The final cost would
be intimated to you on the basis of actual costing after the completion
of the Scheme, which would be payable by you."
A Final Costing Committee was ~et up by the BDA consisting of the
H Secretary, the Chief Accounts Officer and the Executive Engineer of the
BAREILL Y DEVELOPMENT AUTHORITY v. VRINDA GUJARATl [LAKSHMANAN, J.] 73 3
- BOA and the Committee, after due deliberation, recommended that on the
basis of the actual cost of each flat, the price had to be enhanced (in the case
A
of flats on the ground floor, for example, increasing from Rs.2, I 0,000/- to
Rs.2,8I,100/-). The Committee also recommended that the allottees be given
additional time to deposit the enhanced amount of the price as the said
allottees had already deposited their respective quarterly instalments. It has B
further recommended that in case the allottees fail to deposit the said amount
in the time prescribed, interest @ 18% be charged from them. The respondents
were duly informed by individual notices by the ctppellant about the final
costing of the said flats and also that they were required to deposit within 15
days of the receipt of the said notice the balance amount of price of the flat
as well as the proposed lease rent. The respondents filed objections to the C
said increase in price. The said representations were rejected by the appellant
on 21.1O.l993(Annexure-D). When the flats were ready for delivery of
possession, in view of the reluctance shown by the respondents in paying the
enhanced amount, the BOA offered the option to the respondents to either
file an undertaking by way of affidavit that they would pay the enhanced D
amounts or to take back their deposit sums with interest. All the respondents
filed their undertakings by way of affidavits dated 19.5.1994 and undertook
unconditionally to be bound by the final costing of the flats by the BDA and
also to pay the enhanced amount. The affidavit reads thus:-
AFFIDAVIT
E
I, Shrimati Vrinda Gujarati, Wife ofShri B.K. Das, am the resident
of 330, Madhobadi, Bare illy and I hereby on oath state as following:
l. That the decision taken in future by the Bareilly Development
Authority regarding the increase in the cost of the Flat No.9-A (Ground
Floor), Kusumanjali Scheme, Priyadarshani Nagar, Bareilly allotted F
to me would be binding on me.
2. That the deponent is ready to deposit the entire amount of the
increase in cost.
Sd/- G
Varinda
On 19.6.1993 to 13.7.1994, the BDA delivered possession of the said
flats on various dates to the respondents. The respondents, after taking
possession of their respective premises and after filing the above undertakings
once again made representation to the appellant against the final costing of H
734 SUPREME COURT REPORTS [2004) 2 S.C.R.
A the said flats. The BDA, in the meantime, sent another notice to the respondents
to pay the enhanced unpaid amounts of the costs with 18% interest or else·
legal action would be taken against them. Since the respondents failed to pay
the said amount in spite of repeated demands, the BDA initiated recovery
proceedings against the respondents under the U.P. Zamindari Abolition and
B Land Reforms Act, 1950 and recovery certificates were issued against the
respondents by the Tahsildar, Bareilly. Being aggrieved, the respondents filed
C.M.W.P; No. 36735of1995 before the High Court of Judicature at Allahabad
challenging enhancement in the final cost of the flats and praying, inter alia,
that the recovery· proceedings against the respondents initiated by the BDA
for recovery of the unpaid amounts be quashed. The High Court stayed the
C recovery proceedings provided the respondents deposited Rs.45,000/- on or
before 31. i'.1996. Before the High Court, the BDA placed the Chart showing
the details of the reasons for enhancement of the price. (Annexure-N). The
High Court by its judgment and order dated 14.5.1996 allowed the writ
petition filed by the respondents herein and issued further. directions to the
D BDA regarding adjustment of various amounts against the final price of the
flats, though the High Court did not either strike down the enhanced price or
hold it illegal. Aggrieved by the said judgment, the BDA has preferred this
appeal by way of special leave petition ..
We heard Shri Bharat Sangal, learned senior counsel appearing for the
E BDA and Mr. A.K. Sanghi & Mr. Punit D. Tyagi, learned counsel appearing
for the respondents.
Learned counsel appearing for the appellant made the following
submissions:
(i) There has been no application of mind by the High Court to
F
the. terms and conditions of the contract entered into between the
BDA and the respondents and the High Court has ignored totally the
law in regard to such cases as laid down by this Court.
(ii) The High Court failed to appreciate that Clause 2 of the
G Brochure of May, 1990 produced by the BDA for the concerned
scheme in which the said respondents applied for and obtained the
concerned flats, clearly provided that the cost of each flat given in the
said Brochure was only an estimated and actual cost would be intimated
later at the time of allotment.
H (iii) The High Court failed to appreciate tha.t in Clause 15 of the
BAREILL Y DEVELOPMENT AUTHORITY 1·. VRINDA GU.IARATl [LAKSHMANAN, .I.] 73 5
Brochure it .was clearly stated that the BDA reserves the right to A
amend any term or condition of the Scheme till the time of allotment
and such amendment shall be binding on the allottees.
(iv) It was contended that the revised cost of the said flats,
necessitated by the increase in size of the flat as well as the increase
in each flat's share in cost of the land due to reduction in number of B
flats built, were informed to the respondents, they accepted the
increased cost and also filed undertakings by way of affidavits
affirming their decisions to abide.by the increase and pay the required
enhanced amount.
(v) The High Court has failed to appreciate that Clause· 13 of the C
Brochure only provides that the possession would be given to the
allottee only after the full amount has been. deposited and it cannot
be interpreted to mean that the possession would be given immediately
after the allotment is made. The direction issued by the High Court
regarding the payment of interest by the authority to the respondents D
is baseless and issue.d without any reason.
It was submitted that the High Court has erred in holding that the
appellant is not entitled to any interest on the amounts unpaid to it by the
concerned respondents for the period between 20.12.1995, date of the interim
order and 14.5.1996, the date of the final judgment. In this regard, it was E
submitted that the High Court has failed to appreciate that by the interim
order dated 20.12.1995, the High Court had only stayed the recovery
proceedings against the said respondents for non-payment of balance amount,
and it cannot be said that the said order has also stayed the liability of the
said respondents to pay the said amount.
F
It was further submitted that the High Court has not struck down the
enhanced cost announced by the appellant nor has it held that the appellant
is not entitled to recover the unpaid amounts from the respondents and it has
only directed that certain adjustments on account of interest payable to the
respondents and difference in registration fee be adjusted from the final price.
G
(vi) The High Court has failed to appreciate that there was no
challenge made to the terms of the Brochure by the respondents at
any stage and thus there could be no interference with the said terms
and conditions by the High Court and in that regard, the High Court
has exceeded its jurisdiction by doing so.
H
736 SUPREME COURT REPORTS (2004] 2 S.C.R.
A It was further submitted that the judgment and order of the High Court
is also bad as it has exceeded its jurisdiction by granting compensation to the
respondents.
Per contra, Mr. A.K. Sanghi, learned counsel appearing for the
respondents, submitted that the appellant being a statutory body is under
B obligation to provide flats to the respondents, who belong to the Middle
Income Group and other citizens of a reasonable and just price. The High
Court, therefore, was perfectly justified in law in holding that the enhancement
sought to be recovered from the respondents is arbitrary and without basis
whatsoever.
c A reading of the terms and conditions of the Brochure would show that
the same were one sided and were rightly held by the High Court to be
unconscionable because the BDA has a duty to construct and allot flats to the
. poor citizens who are unable to construct houses on their own. It was further
contended that the terms and conditions of the contract as well as the
D undertaking given by the respondents are not voluntary and that the
respondents who are weaker sections of the society were forced to give
undertakings which were unforceable.
We have gone through the relevant records, the undertakings and the
affidavits given by the respondents and the Chart of Escalation and the
E judgment of the High Court.
Before proceeding further, it is beneficial to reproduce the Chart of
Escalation which is as follows:
Chart of Escalation
F
I. Estimated area 614 Sq.ft.
2. Finally constructed area 702 Sq. ft.
3. Increase in covered area 88 Sq. ft.
4. Rate of construction per sq. ft. Rs. 342/-
G (cost of land included)
5. Increase in construction cost 342 x 88= Rs.30,096/-
6. Cost of land also increased for
every purchaser as the construction
made was 2 storeyed in place of 4
H storeyed
BAREILL Y DEVELOPMENT AUTHORITY v. VRINDA GUJARATI [LAKSHMANAN, J ] 73 7
...,_.
7. Initially purchaser of ground A
floor had to pay for land Rs.137/- per Sq. ft.
(This was included in estimated cost of Rs.2, I 0,000/-)
8. After final costing cost of land
increased to Rs.183/- per sq. ft.
9. Increase in cost of land Rs.46/- per sq. ft. B
10. Total increase in cost of land Rs.32,292/-
for every purchaser of
ground floor
11. Increase in cost of other
facilities Rs.8,500/- such as c
parking, water, sewer
etc.
12. Total increase Rs.30,096+Rs.32.292+
Rs.8,500 = Rs.70,888/-
Details of increased area
D
1. One more toilet was constructed.
2. In place of two common passages, three common passages were
constructed.
3. Bigger Verandah was made.
E
Total increase in covered area = 88 Sq. ft.
It is seen from the above Chart that the finally constructed area is 702
Sq. ft. and the increase in the covering area is 88 sq. ft. The BDA has claimed
only the increase in construction cost of 88 sq. ft. @ construction per sq. ft.
at Rs. 342/- namely, Rs.342 x 88 = 30,096/-. According to the BDA, the cost F
of the land has also increased for every purchaser as the construction made
was two storeyed in place of four storeyed. Initially the purchaser of the
ground floor had to pay for land Rs.137/- per sq. ft. which was included in
the estimated cost of Rs.2,10,000/-. After final costing, the cost of the land
is now increased to Rs. l 83/- per sq. ft. The increase in cost of the land is Rs. G
461- per sq. ft. and the total increase in the cost of the land for every, purchaser
of ground floor is Rs. 32,292/-. It is also an admitted fact that the BDA had
provided the other facilities such as parking, water, sewer etc. and the increase
in cost of these facilities is Rs.8,500/-. Thus the total increase of construction
cost, cost of the land and the other facilities come to Rs. 70,888/-. The details
H
738 SUPREME COURT REPORTS [2004] 2 S.C.R.
A of the increased area has also been very clearly spelt out which includes one
more toilet, in place of two common passages, three common passages were
constructed and a bigger Verandah was made and the area covered by these
items comes to 88 sq. ft.
We have already referred to the allotment letter, undertaking by way of
B affidavit and· Chart of Escalation etc. and as per the above undertaking, the
BDA is entitled to collect the enhanced price from the allottees. Once the
respondents owe money to the appellant, it is fully in the competence of the
Authority to recover the same. The parties to this action .are bound by the
terms of the contract.
c This Court in its judgment in the case of Bareilly Development Authority
andAnr. v. Ajai Pal Singh and Ors., [1989] 2 SCC 116 has clearly held that
the authority or its agent after entering into the field of ordinary contract acts
purely 'in its executive capacity. Thereafter, the relations are no longer governed
by the constitutional provisions but by the legally valid contract which
D determines the rights and obligations of the parties inter se. At page 124 of
the judgment, this Court has also held that once the respondents have given
their written consent accepting the changed and varied terms and conditions,
they cannot be permitted to contend that the authority has gone back on its
original terms and conditions to their detriment. This Court further held that
once the respondents have entered into the realm of concluded contract pure
E and simple with the authority they cannot step out of the terms of the contract
unless some statute steps in and confers some special statutory obligations on
the authority in the Contractual field.
The above view was endorsed by this Court in itsjudgment in Indore
F DevelopmentAuthority v. Sadhana Agarwal(Smt.) & Ors., [1995] 3 SCC I.
This Court in paragraph 9 of this judgment held as under:
"But taking all facts and circumstances into consideration, this Court
said tha_t it cannot be held that there was m_isstatement or incorrect
statement or any fraudulent concealment, in the brochure published
G by the Authority. It was also said that the respondents cannot be
' '
heard to say that the Authority had arbitrarily and unn(asonably
changed the terms and conditions of the brochure to the prejudice of
the respondents. In that connection, it was pointed out that the most
of the respondents had accepted the changed and varied terms.
Thereafter they were not justified in seeking any directio.n from the
-
H
BA REILLY DEVELOPMENT AUTHORiTY v VRINDA GU.JARA TI [LAKSHMANAN, J.] 739
--- Court to allot such flats on the original terms and conditions."
This Court further in paragraph 10 of the judgment held as under:
A
"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 B
.....___ 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 t!:te flat. One of the
--'- reasons for the rise of the price for the LIG Flat from Rs.60,000 to
c
-·
""1.
Rs. I, 16,000 appears to be the increase in area of the flat itself from
500 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
D
that no interference was called for by the High Court."
We are, therefore, of the opinion that only obligation on the BDA was
to provide the houses in question on the contractual price and in that regard
the judgment of this Court in L.J. C. of India and Anr. v. Consumer Education
& Research Centre and Ors., [1995] 5 SCC 482 was cited. The above judgment E
--.... has no relevance with the present case.
It was denied by the BDA that the respondents have paid full amount
towards the cost of the flats as alleged. The enhancement in the cost was due
to actual increase in the cost of the flat as detailed in the chart annexed as
Annexure-N which formed part of the supplementary affidavit filed before F
this Court. Such enhancement, in our opinion, was in accordance with clauses
2 and 15 of the Brochure of May, 1990 and the said enhancement was alsp
in accordance with clause 2 of the allotment letters dated 10.12.1991 issued
to various applicants. The said enhancement was clearly accepted by the
respondents by their various affidavits of undertakings filed on 19 .4.1994
and other respective dates before the BDA. The respondents after undertaking
G
to pay the enhanced amount and after taking possession of the flats on that
- ground cannot be allowed to raise frivolous contentions to avoid payment to
the appellant.
At the time of hearing, this Court on 11.4.1997 passed an order directing H
740 SUPREME COURT REPORTS [2004] 2 S.C.R.
A the counsel appearing on behalf of the l3DA to find out whether there is a
proposal or likelihood of two more storeyes being added to the flats that have
been constructed. Counsel for the BDA submitted before the Court that the
Scheme originally was .to build four storeyed buildings but now only two
stor(fyed building.has been built. As a result, the entire cost of the flats has
ratea.bly been distributed among the occupiers of the two storeys building
B instead of larger number of occupiers of the four storeys building as was
originally envisaged.. This is another reason for the enhancement in the cost
of the flat..
This Court in the case of Delhi Development Authority v. Pushpendra
C Ku~ar Jain, [1994] Supp. 3 SCC 494, which was cite~ before the High
Court, has. misinterpreted the said decision. In that case in paragraph 7 at
page 497 ofthej~dgment, this Court held that there was no materi.al produced
before any Court in the said matter to show that there was any delay in
allotment of the flats in the said case due to inefficiency on the part of the
authority and further that as there was no period prescribed in the Scheme for
n· the allotment hence it could not be said that there was any inordinate delay.
In, the present case also, there was no period prescr.ibed. for.allotment
and in any case,. the flat~ in question were allotted within two years from the
issuance of the Brochure and there cannot be said to be any inordi~ate delay.
E· The High Court also has not given any finding that the final costing of
the flats concerned was wrong or unreasonable. The High Court has only
held that there is unreasonable delay in delivery of possession and hence,
directed to pay the interest @ 1_8% for the delayed period from the date of
the allotment to the date of the delivery of the possession ..
P: The BDA Housing Scheme provides that no interest is payable on
instalments under Self FihanCing Scheme. However, the Scheme provides
that if the ainourits payable to the BDA are Jot paid within the prescribed
time limit; penal interest at the rate of 18% per annum shall be payable along
with' parable amounts.
G,
At the time of hearing, learned counsel made an appeal to the Court to
reduce the rate of interest from 18%i to 6% on the ground that the allottees
under the Scheme in question belonged to Middle Income Group and,
therefore, they would not be in a position to pay the interest. In our view, "
once the liability of the respondents to pay the balance amount remaining
H'. unp~id ·o~t· of the final cost of the flat is not struck 'down and remains in
-- BAREILL Y DEVELOPMENT AUTHORITY v. VRINDA GUJARA Tl [LAKSHMANAN ,J.) 741
existence, the appellant cannot be asked to forego the interest for the period, A
or any part thereof, for which the said amounts remain unpaid. The High
Court is not right in creating double jeopardy for the BDA directing it to pay
interest to the respondents while at the same time to direct the respondents
not to pay interest on the unpaid amounts. However, taking note of the
financial status of the respondents and in the peculiar facts and circumstances B
of the case, we direct the respondents to pay simple interest @ 9% on the
enhanced price of the flats. The enhanced price of the flats shall be paid in
six monthly equal instalments together with accrued interest payable on
diminishing balance on or before the I 0th of every succeeding month
com.mencing from April 2004. lfthe respondents commit any two defaults in
the payment of instalments on the enhance price, the interest @ 18% shall be C
recovered from them by the BDA. The amounts deposited by the re~pondents
as per the interim order, if any, will be given credit to. According to the
Brochure, the Housing Scheme is a Self Financing Scheme wherein the
allottees were to pay the cost of the flats in quarterly instalments. The parties
are bound by the terms of the contract in regard to the payment of the D
original cost of the flats as per the agreement.
For the foregoing reasons, the present appeal filed b.Y the BDA deserves
to be allowed. The judgment and order of the High Court dated 14.5.1996 in
CMWP No. 36735/95 is set aside. But however, we make no order as to
costs.
N.J. Appeal allowed.
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