Holding

The price applicable to the allotted flat is the rate prevailing on the date of communication of the allotment, and the draw of lots does not vest a vested right to the flat at the earlier rate.

Summary

The Delhi Development Authority (DDA) allotted a flat to the respondent after a draw of lots on 12 October 1990, but the allotment‑cum‑demand letter was sent only on 9‑13 January 1991. In the interim, DDA revised land rates by a circular dated 6 December 1990, and the respondent was asked to pay the higher price. The respondent filed a writ petition contending that only the rates prevailing on the date of the draw should apply. The Delhi High Court allowed the petition, holding that the delay was due to DDA’s inefficiency and that the draw vested a right to the flat at the earlier rates. The Supreme Court held that the three‑month interval was neither inordinate nor deliberate, that the draw of lots is merely a selection process and does not vest a vested right, and that the price applicable is the rate prevailing on the date of communication of the allotment unless the scheme provides otherwise. Consequently, the appeal was allowed and the High Court’s order set aside.

Issues considered

Whether a delay in issuing the allotment‑cum‑demand letter caused by the authority precludes the application of revised land rates.
Whether the draw of lots vests a vested right to allotment at the price prevailing on the date of the draw.
Which rate – the one on the date of draw or the one on the date of communication – governs the price of the allotted flat.

Subjects

Housing schemeDraw of lotsLand rate revisionAllotment priceAdministrative lawWrit petitionDelhi Development Authority

Judgment

A DELHI DEVELOPMENT AUTHORITY
v.
PUSHPENDRA KUMAR JAIN

SEPTEMBER 23, 1994

B · [B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.]

Housing Development Authority-Housing scheme-Draw of lots-In-
timation to allottee after three months-Enhancement of rates by authority
between the period of draw of flats and intimation-Time of three months
...
c taken for intimation held not inordinate nor deliberate-Mere draw of lot does
not vest an indefeasible right in the allottee for allotment at price prevailing
on date of draw of lot~Right to flat arises on communication of letter of

D
allotment-Price prevailing on date of such communication is applicable un-
less otherwise provided in the scheme.

The respondent was allotted a flat under the scheme of New Pattern
of 1979 in the draw conducted on 12th October, 1990, but the allotment-
-
cum-demand letter was sent to him by the appellant-authority on January
9/13,1991. Between the date on which the lot was drawn and the date on
which the allotment of flat was communicated to the respondent, the land
E rates were revised by the appellant-authority by its circular dated 6th
December, 1990 and the respondent was called upon to remit the first
instalment of the price determined taking into account the revised land
rates.

The respondents filed a writ petition before the High Court contend-
F ing that only the land rates prevailing on the date of draw of lots should
be charged from him; that the revised land rates cannot be applied to him
inasmuch as the said rates came into force after the draw of lots.

The High Court allowed the petition holding that (i) on account of
inefficiency on the part of the appellant-authority there was delay in
-
G issuing the allotment-cum-demand letter; since the delay was on the
appellant's part it cannot charge the revised rates from the respondent ~
inasmuch as the respondent became entitled to get the Oat on the date of
draw of lots i.e. on Oct?ber 12, 1990.

H Allowing the appeal and setting aside the judgment of the High
770
D.DA v. P.K.JAIN 771

Court, this Court A
· HELD : 1. Both the grounds assigned by the High Court are unsus-
tainable. There was no material piaced before the High Court ~ nor has
any material been brought to the notice of this Court • to record a finding
that the interval of three months between the draw oflots and the despatch
of allotment-cum-demand letter was on account of inefficiency of the B
appellant. The interval of three months between the draw of lots and
sending the demand-cum-allotment letters cannot be characterised either
as inordinate or as deliberate delay. The scheme itself does not prescribe
the period within which allotment. has to be communicated from the date
of draw of lots. It has, of course, to be done within a reasonable period. C
[774-B to DJ
2. There is no legal basis for holding that the respondent obtained
a vested right to allotment on the draw of lots. The system of drawing of
lots is only mode, a method, a process to identify the allottee, i.e., it is a
process of selection. It is not allotment by itself. Mere identification or D
selection of the allottee does not clothe the person selected with a legal
right to allotment at the price prevailing on the date of draw of lots. The
scheme evolved by the appellant does not say so either expressly or by
necessary implication. On the contrary, clause (14) thereof say that "the
-estimated prices mentioned in the brochure are illustrative and are subject
to revision/modification depending upon the exigencies of lay out, cost of E
construction etc."No provision of law also could be brought to the notice
of this Court 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. Since the right to flat arises only on the communica-
tion of the letter of allotment, the price or rates prevailing on the date of p
such communication is applicable unless otherwise provided in the
Scheme. [774-E to G, 775-A, BJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6205 of
1994.
G
From the Judgment and Order dated 11.11.93 of the Delhi High
Court in C.W.P. No. 906 of 1991.

Arun J aitley and J ayant Bhushan for the Appellant.

Shiv Kumar Suri for the Respondent. H
772 SUPREME COURT REPORTS (1994) SUPP. 3 S.C.R.

A The Judgment of the Court was delivered by

B.P. JEEVAN REDDY, J. Leave granted. Heard counsel for the
parties.

This appeal is preferred against the judgment and order of a Division
B Bench of the Delhi High Court allowing the writ petition filed by the
respondent.

The appellant, Delhi Development Authority (D.DA.) prepared and
published a scheme called "Registration Scheme of New Pattern, 1979 of
intending purchasers of flats to be constructed by Delhi Development
C Authority" providing the procedure for allotment of flats constructed by it.
Clause (11) of the Scheme, issued as a brochure says that "in case of flat
allotted under Hire Purchase basis, the cost of the land plus 20% of the

D
balance cost of the flat will be recovered as initial deposit at the time of
allotment and balance amount will be recovered in monthly instalments
spread over a period of 7 years in case of M.I.G. , 10 years· in case of
L.I.G. and 15 years in case of Janata flats". Clause (14) says that "it may
-
please be noted that the plinth area of the flats indicated and the es-
timated prices mentioned in the brochure are illustrative and are subject
to revision/modification depending upon the exigencies of layout,' cost of
construction etc."
E
The appellant has been constructing flats in several localities in Delhi
and has been selling them to needy citizens from time to time in accordance
with the procedure indicated in the said brochure. Since there are always
more applicants than the number of flats available, the appellant has been
adopting the method ·Of draw of lots among the registered applicants to
F select the allottees. One of such draws was held on October 12, 1990 for
allotment of certain number of flats at which the respondent was successful.
An intimation was sent to him on January 9/13, 1991 informing him that a
flat No.42-A, Type-3, Pocket-A2, GRP.5 Kondli Gharoli has been allotted
to him and that he must remit the initial deposit as per the rules.
G The writ petition was occasioned by the fact that between the date
on which lots were drawn and the date on which the allotment of flat was
communicated to the respondent, the land rates were revised by the
D.D.A. by Circular dated December 6, 1990. There has been a substantial
enhancement of land rates in the region of about fifty to seventy per cent.
H Since the allotment to the respondent was made on January 9/13, 1991, he
D.D.A v. P.K JAIN [JEEVAN REDDY, J.] 773

was called upon to remit the first instalment of the price of the flat A
determined taking into account the revised land rates aforesaid. The
respondent's contention in the writ petition was that only the land rates
prevailing on the date of drawl of fots should be charged to him. He
submitted that the revised land rates cannot be applied to him inasmuch
as the said rates came to into force after the draw of lots. This contention B
has been upheld by the Division Bench. The reasoning behind the allowing
of writ petition is disclosed from the following extracts from ·the impugned
order. (Indeed, it is a short order and what we are extracting hereinbelow
represents almost the entire order :

"it is the case of the petitioner that though the draw was held on C
12th October, 1990, it was because of the inefficiency of the
respondent that the allotment-cum-demand letter was not issued
till 9th January - 13th January, 1991. In the meanwhile, the respon-
dent has revised the land rate on 6th December, 1990. Thus, the
petitioner was made to pay higher amount for the LIG flat which D
he became entitled to get in the draw held on 12th October, 1990.

Counter Affidavit has been filed by the respondent and it is
admitted that the petitioner became successful in the draw of lot
held on 12th October, 1990. There is no reason given for not issuing
allotment-cum-demand letter till 9th January- 13th January, 1991. E

It is thus clear that the allotment-cum-demand letter was
delayed in the office of the respondent. In the meanwhile, even if
the land rates have been increased, since the petitioner had be-
come entitled to get the flat on 12th October, 1990, the respondent F
could not charge enhanced rate from the petitioner. As such we
allow the writ petition and direct the respondent to revise the
demand and charge the rate payable by petitioner on 12th October,
1990. The revised demand be issued within one month. No costs."

A perusal of the High Court's order shows that it is based upon the G
following two reasons :

(i) Though the draw was held on October 12, 1990, the allotment-
cum-demand letter was issued to the respondent only on January 9/13,
1991. This delay was the result of inefficiency of the D.D.A. H
774 SUPREME COURT REPORTS (1994] SUPP. 3 S.C.R.

A (2) Inasmuch as the issue of allotment-cum-demand letter was
delayed in the office of D .D .A. it cannot charge the revised land rates to
the respondent inasmuch as the respondent became entitled to get the flat
on October 12, 1990; the revision of land rates subsequent to the drawl of
lots cannot affect the respondent.
B
In our opinion, both the grounds assigned by the High Court are
unsustainable. There was no material placed before the High Court- nor
has any material been brought to our notice - to record a finding that the
interval of three months between the drawl of lots and the despatch of
allotment-cum-demand letter was on account of inefficiency of the appel-
C lant. The appellant's case is that the draw of lots was held for nearly three
thousand flats and since the land rates were revised meanwhile, the process
of calculating the cost of each flat and sending of demand-cum-allotment
letters to nearly three thousand allottees took some time. In our opinion,
the interval of three months cannot be characterised either as inordinate
D or as deliberate delay. The scheme itself does- not prescribe the period
within which allotment has to be communicated from the date of drawl of
lots. It has, of course, to be done within a reasonable period.

Now coming to the other ground, we are unable to find any legal
a
basis for holding that the respondent obtained vested right to allotment
E on the drawl of lots. Since D.D.A. is a publi~ 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 identify
the allottee. It is only a mode, a method, a process to identify the allottee,
i.e., it is a process of selection. It is not allotment by itself. Mere identifica-
F tion 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 lay out, cost of
G 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
H understood in this context-the steady rise in the cost of construction and
D.DA v. P.K.JAIN [JEEVAN REDDY,J.] 775

of land. No provision of law also could be brought to our notice in support A
of the proposition that mere drawl of lots vestes an indefeasible right in
the allottee for allotment at the price obtaining on the date of drawl 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 provided in the Scheme. If B
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.

We may clarify that the ~dity or justification of the revision of land
rates by circular dated December 6, 1990 was not questioned in the writ C
petition nor has it been pronounced upon by the High Court nor has it
been urged before us. We must, therefore, proceed on the assumption that
the said revision of land rates is valid.

For the above reasons, the appeal is allowed and the judgment and
order of the High Court is set aside. D
T.N.A. Appeal allowed.

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