Holding

The Board may fix the final price of the allotted plots, but the fixation must conform to the doctrine of proportionality and be reasonable under Article 14; consequently the demand was modified to Rs.16,500 per sq.m with 10% annual escalation and 9% interest.

Summary

The Madhya Pradesh Housing and Infrastructure Development Board advertised a housing scheme in 2007 stating that the prices were provisional and the final price would be fixed after completion. The Board later fixed a final price of Rs.30,000 per square metre, substantially higher than the provisional cost of Rs.16,500 per square metre, and demanded the difference from the allottees. The allottees challenged the demand, and the High Court quashed it. The Supreme Court held that the Board is empowered under the 1972 Griha Nirman Mandal Act and its own rules to fix the final price, but the fixation must satisfy the doctrine of proportionality and Article 14. The Court found the Board’s demand arbitrary and unreasonable, and modified the demand to the original Rs.16,500 per square metre with a 10% yearly escalation and 9% simple interest. The appeals were partly allowed, the High Court judgment set aside, and the stay orders vacated.

Issues considered

Whether the Board is barred from raising the cost of land after allotment due to the provisional price clause in the advertisement.
Whether the Board’s fixation of the final sale price complies with the doctrine of proportionality and Article 14 of the Constitution.
Whether the demand based on the Collector’s market‑price guidelines is legally valid.
Whether the High Court was correct in quashing the Board’s demand notice.

Legislation cited

Indian Stamp Act, 1899s. Section 47(a)
Madhya Pradesh Co-operative Societies Act, 1960
Madhya Pradesh Griha Nirman Mandal Adhiniyam, 1972s. Section 50
Madhya Pradesh Housing Board Accounts Rules, 1991s. Rule 5.4, s. Rule 5.7
Madhya Pradesh Preparation and Revision of Market Value Guidelines Rules, 2000s. Rule 4(2), s. Rule 75

Subjects

Housing schemePrice fixationProvisional price clauseArticle 14Doctrine of proportionalityAdministrative lawMarket value guidelinesEscalationInterestReasonableness

Judgment

[2015) 6 S.C.R. 841

MADHYA PRADESH HOUSING AND A
INFRASTRUCTURE DEVELOPMENT BOARD & ORS.
v.
B. S. S. PARIHAR & ORS.
(Civil Appeal No.1801 of 2015) B

JULY 21, 2015
[V. GOPALA GOWDA AND R. BANUMATHI, JJ.]
Housing - Housing Scheme - By State Housing and c
Infrastructure Development Board- Cost of developed plots
initially fixed at Rs. 16, 5001- per sq. mfr. as per Rules of the
Board - Final demand by the Board from the allottees after
fixing the sale price at Rs. 30, 0001- per sq. mtr. - Final demand
at enhanced rate challenged - Single Judge and Division D
Bench of High Court quashed the enhanced/final demand -
On appeal, held: The advertisement of the housing scheme
in the newspaper specifically stated that the price was
provisional - The final sale price was fixed in accordance
with the provisions of Griha Nirman Manda/ Adhiniyam and E
Housing Board Accounts Rules - Hence the Board was not
debarred from raising the cost of construction or claiming
enhanced prices for the land - However, the said
enhancement is arbitrary, unreasonable, unfair and without
applying the principle of the doctrine of proportionality and F
thus violative ofArt. 14 of the Constitution - The determination
of final cost of the land should have been in consonance
with the doctrine of proportionality and not on the basis of
the market price - It would be just and proper to take into
consideration the cost of developed plots at Rs. 16, 5001- per G
sq. mtr. and take escalation@10% for every year from 2007
to 2011 and ask the allottees to pay simple interest thereon
- Constitution of India, 1950 - Art. 14 - Madhya Pradesh
Griha Nirman Manda/ Adhiniyam, 1972 - s.50 - Madhya H
841
842 SUPREME COURT REPORTS [2015) 6 S.C.R.

A Pradesh Housing Board Accounts Rules, 1991- Stamp Act,
1899-s.47(a)-Madhya Pradesh Preparation and Revision
of Market Value guidelines Rules, 2000- Rules 4(2) and 75.

Precedent -: Precedential value of a judgment - Any
B declaration or conclusion arrived at without application of
mind or preceded without any reason cannot be deemed to
be declaration of law of a general nature and cannot be
deemed as a precedent.

c Partly allowing the appeals, the Court.

HELD: 1.1 It is not correct to say that once the
appellant-Board has made the allotment of the said plot
of land, it is debarred from raising the cost of
construction or claiming enhanced prices for the said
0
land, in view of the clauses contained in the
advertisement published in the newspaper which read
that the cost of the houses shown in this advertisement
are totally provisional and the final fixation of the price
E will be done after the completion of the Scheme.
Therefore, the allottees will have to pay the difference
between the tentative cost and the final sale price of the
land which is based on the fixation of the final cost of
the land, within the stipulated time. [para 21)(855-H; 856-
F A-C]

1.2 Further, the said clause is also traceable to
Section 50 of the Madhya Pradesh Griha Nirman Mandal
Adhiniyam, 1972, wherein the appellant-Board is
G empowered to retain, lease, sell, exchange or otherwise
dispose of any land, building or other property vesting
with it, situated in the area comprised in any housing
Scheme or in any adjoining area. [para 22] [856-E-F]

1.3 Thus, the final sale price which is fixed and
H intimated to the allottees is in accordance with the
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 843
B. S. S. PARIHAR

provisions of the 1972 Act, Madhya Pradesh Housing A
Board Accounts Rules, 1991 and the clause of the
advertisement which is binding on the respondent
allottees. Therefore, the High Court has committed an
error in law by quashing the demand notice of the
appellant-Board for the payment of the final sale price. B
(para 23) (858-A-B]

1.4 The provisos issued by the Central Valuation
Board vide letter No. 713/Ga.La./2011 Bhopal dated
29.03.2011 for the implementation of the rates of plots C
of land, buildings and agricultural land in Rule 3(2) of
the Rules, 2000 and the after approval of the rate of the
market price proposed by District Valuation Committee
Guiding Principles (Guidelines) for the year 2011-2012
for reckoning the market price of the immovable property D
(plots of land, building and agricultural land) situated in
District Bhopal under Rule 4(2)(c) of the Rules, 2000,
are forwarded by the Sub-Registrar of the Districts for
the purpose of issuing directions under Section 47-A,
sub-Section (1) of the Indian Stamp Act, 1899. The said E
valuation fixed by the District Valuation Committee under
the Chairmanship of the District Collector of Bhopal is
not under challenge by either the allottees or any other
person. Therefore, the guiding principles for the F
determination of the final sale price of the plots in favour
of the allottees cannot be termed as either erroneous or
error in law. (para 27] [860-F-H; 861-A-B]

Tamil Nadu Housing Board v. Service Society & Anr
2011 (6) scR 1 =2011 (11) sec 13; Delhi G
Development Authority vs. Pushpendra Kumar Jain
=
1994 (3) Suppl. SCR 110 1994 (3) Suppl. sec 494
-relied on.

M.P. Housing Board v. Anil Kumar Khiwani 2005 (2) H
=
SCR 765 2005 (10) SCC 796 - held inapplicable.
844 SUPREME COURT REPORTS [2015] 6 S.C.R.

A 2. Any declaration or conclusion arrived at without
application of mind or preceded without any reason
cannot be deemed to be declaration of law or authority
of a genli!ral nature and the same cannot be deemed as
a precedent. [para 27] [861-C-D]
B
Bihar School Education Board v. Suresh Pd. Sinha
(2009) 8 SCC 483; State of U.P v. Synthetics &
Chemicals Ltd. (1991) 4 SCC 139 - relied on

c Tamil Nadu Housing Board v. Service Society & Anr
2011 (6) SCR 1 =2011 (11) SCC 13 - referred to

3.1. The appellant-Board is entitled to fix the final
cost of the land and the same is legal and valid. However,
the same has been done arbitrarily, unreasonably,
0
unfairly and without applying the principle of the doctrine
of proportionality. The determination for the final price
of the plots allotted to the allottees must be on the basis
of the appellant-Board Rules read with the relevant
E aspects namely, the Collector's Guidelines, the 1972 Act
and the 1991 Rules, for the purpose of determination of
the market value of the land. A statutory duty is cast
upon the appellant-Board which is governed by the
provisions of the Act and Rules and the appellant-Board
F being the statutory Board is amenable to Article 14 of
the Constitution of India. The determination of the final
cost of the land in dispute must be in consonance with
the doctrine of proportionality but not on the basis of
the market price, i.e. fixed by the Committee for the
G determination of guidance value of the immovable
property in the District which would be arbitrary,
unreasonable and unfair. [para 31] [882-A-E]

3.2 As per the advertisement published by the
H appellant-Board, the estimated cost of the House of HIG
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 845
B. S. S. PARIHAR

was Rs.40 lakhs and in view of the approved minimum A
bid rates, the costs of the aforesaid type of houses were
likely to increase by Rs.9.53 lakhs. The said value is for
the final determination of the revised estimated cost of
house which is taken into consideration by applying the
Collector's guidelines, the same will be arbitrary and B
unreasonable. Therefore, the doctrine of proportionality
must come into play for the determination of the final
price of the allotted plot, keeping in view the relevant
factors namely, the escalation of the cost of the building
materials and the cost of land which are re-determined C
as the land is acquired by the State Government in favour
of the appellant-Board and the State Government will
have to pay the enhanced compensation of the land to
the land owners. The relevantfactorto be borne in mind D
for the purpose of re-determination of the cost of the
land is that the relevant period from the date of
advertisement in the year 2007 to 2010 should be taken
into consideration. [para 32] [882-F-H; 883-A-C]

3.3 The demand made by the appellant-Board from E
the allottees after the cost of the land was determined
at Rs.30,000/- per sq. mtr. is near about double the cost
of the developed plots for the Duplex and Triplex houses
which were earlier fixed at Rs.16,500/- as per the Rules F
of the Board. There is no justification on the part of the
appellant-Board to fix the price of the land at Rs.30,000/
- per sq. mtr. and placing the said demand on the
constructed HIG houses, from the respondent-allottees
would be most unreasonable and unfair. Therefore, by G
maintaining the balance between the figure Rs.16,500/-
and Rs.30,000/-, it would be just and proper to take into
consideration the cost of the developed plots at
Rs.16,500/- per sq. mtr. and take the escalation at the
rate of 10% for every year from 2007 to 2011 and ask the H
846 SUPREME COURT REPORTS [2015] 6 S.C.R.

A respondent-allottees to pay simple interest on the said
sum. The same would be in conformity with the doctrine
of proportionality and it will pass the test of
reasonableness and fairness. [para 33] [883-D-H]

B Coimbatore District Central Coop. Bank v. Employees
Association 2007 (5) SCR 430 = 2007 (4) SCC 669;
Teri Oat Estates (P) Ltd. v. U. T. Chandigarh 2003 (6)
=
Suppl. SCR 1235 2004 (2) SCC 130, Om Kumar
v. Union of India 2000 (4) Suppl. SCR 693 2001=
c (2) SCC 386; State of U.P. v. Sheo Shanker Lal
Srivastava 2006 (2) SCR 656 = 2006 (3) SCC 276
- relied on.

Case Law Reference
D
1994(3)Suppl.SCR 770 relied on para 15

2011 (6) SCR 1 relied on para 24

(2009) 8 sec 483 relied on para 27
E
(1991) 4 sec 139 relied on para 27

2005 (2) SCR 765 held inapplicable para 27

2007 (5) SCR 430 relied on ·para 29
F
2003(6)Suppl. CR 1235 relied on para 29

2000(4)Suppl.SCR 693 relied on para 29

2006 (2) SCR 656 relied on para 29
G
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1801 of 2015.

From the Judgment and Order dated 31.07.2014 of
H the High Court of Madhya Pradesh, Principal Seat at Jabalpur
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 847
B. S. S. PARIHAR

in Writ Appeal No. 1565 of 2013. A
WITH

Civil Appeal Nos. 1802-1803 of 2015.

Sunil Gupta, Sushil Dutt Salwan, Nikunj Dayal, Paya! B
Dayal, Nipun Goel, Pramod Dayal for the Appellants.

M. L. Lahoty, Paban K. Sharma, Gargi B. Bharali,
Hemant Shrivastava, Himanshu Shekhar for the
Respondents. C

The Judgment of the Court was delivered by

V. GOPALA GOWDA, J. 1. Civil Appeal No. 1801 of
2015 by special leave has been filed against the impugned
0
judgment and order dated 31.7.2014 passed in Writ Appeal
No. 1565 of 2013 by the High Court of Judicature at Madhya
Pradesh at Jabalpur, whereas C.A. Nos. 1802-1803 of 2015
by special leave have been filed against the impugned
judgment and order dated 31.7.2014 passed in Writ Appeal E
Nos. 1550 of 2013 and 1563 of 2013 by the same High Court.
In both the matters, the dispute relates to the fixation of the
price of the under construction 36 Duplex/Triplex HIG
Houses, situated in "Riviera Towne", Bhopal, by the appellant-
Madhya Pradesh Housing and Infrastructure Development F.
Board (for short "the appellant-Board") and the method
adopted by them for fixing the price of the properties in
dispute and linking the cost price of the land with the
Collector's guidelines on the date of completion of the project
in the case of Self Financing Scheme. The High Court G
dismissed the writ appeals filed· by the appellant-Board and
quashed the enhanced/final demand for price fixation of land
by the appellant-Board.

2. The brief facts of the case are stated hereunder to H
848 SUPREME COURT REPORTS [2015) 6 S.C.R.

A appreciate the rival legal contentions urged on behalf of the
parties:

An advertisement was published on 9.11.2007 in the
local daily newspaper 'Dainik Bhaskar' regarding the Housing
B Scheme which was floated by the appellant-Board for the
allotment of 36 residential houses for the employees of the
State Government and the State Public Sector Undertaking
under the name of "Riviera Towne" in Bhopal with the
following terms and conditions :-
c ;-1-.-~ApPJicatiOn fOrmS for residentiafhouses in Rlviera Tcmne, 1
Bhopal can be purchased at a cost of Rs.25Ql- from the
Punjab National Ban~ R.S.S. Market Panch Bus Stop,
Bhopal on all working days between 21.11.2007 and .
7 .12. 2007 and Registration Amount/Banker's i
D Cheque/Demand Drafts can be deposited in the above :
I bank on all working days till 7.12.2007. '
I
~ - --- -
2. In case the-number of applications are morethan the~I
number of premises advertised for sale, the registration
will be done through a system of lottery which will be held .
E at 4.00 pm on 14.12.2007 in the office of Estate Officer.

3. Prefererice-m -ieglsiration will be giVenTo those-whclpay
the total estimated amount in one lump sum.
- - - ------- - . - ·-- - ---· - - - · - -- - ·-- ---
4. Apart from the sale price, other charges and maintenance
F fee shall be payable as per the Board rules.

5. Once registration is sanctioned under Self Financing :
1
' Scheme, the applicants have to pay the balance amount I
in instalments as per the intimation given by the Board.

16. Costs of the houses shown in this advertisement are .
G I totally provisional and the final fixation of the price will be I
done after completion of the Scheme. Allottees have to
1

I

pay the difference of tentative cost and final sale price in :
fixation of final cost on intimation within the time ;
stipulated.
H
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 849
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

A
7. ~~~:r laxes-aiici1e·ase re-niSh-alibep-ayabie-asileJ

1-=-8_--i·~A-p~pl~ica~tions for reglstraHori- are - in-vifed from-the
officers and employees of various departments of the
Madhya Pradesh Government and undertakings B
Institutions. Reservation of houses will be in i
accordance with the rules.

l
i

I R- Even after pub-lication of two adve-rtisem en ts-for
registration of the house, if so me houses still remain !
available, then application will be invited from General :
Category as per rules.
c
I
~ ~0-t-he-r ter-ms and conditions-apply ___ -- ________J

,...-------- - -------, -- --- ---- -- - -- ---- -- ·----------- -- - - . -- - - - D
Type ct f'b. Pi:J!:rox Pi:J!:rox. pot 8tirrated Rl:g1.
l-b.s9 ' cai:a. a-ea in S:j. COO: (in famUl!Qn
' rrtrs. la<hs) la<hs)
i aea1n

---:-----+----
krrtrs..
I

- ----- -- - - - - - - - - - - - - - - --------
I Nee o.pex j 18 1 184.57 1&> sq.rrtrs. 40.00 4 E
I . I
I Nee Triplex I 14 i 228.25 1&> sq.ntrs. 45.00 4.&>
~----1-- ;. -- -
Nee D_pex 14 I 2'23.51
-

2'23 sq.ntrs.
---
53.00
---- ---- ----
5.&>
Carer :
F
xxx xxx
3. The appellant-Board held the draw of lots for the
allotment of the said houses in dispute and the successful
applicants were notified by the appellant-Board vide G
communication letter dated 20.12.2007 about the allotment
of the said houses in their favour. The appellant-Board also
took the administrative approval on 3.1.2008 for the
construction of 36 houses of the disputed properties. The
appellant-Board also constituted a Price Fixation Committee H
850 SUPREME COURT REPORTS [2015] 6 S.C.R.

A in its 199'" meeting for the fixation of the rational price' for
the said houses. They also issued two Circulars dated
30.9.2008 and 24.10.2008 relating to the fixation of cost of
the said properties in dispute.

i;i 4. The Price Fixation Committee worked out the prices
of the said 36 residential houses as mentioned below :-
- - -
[ Total F1at5-1a Total Flats-14 ! Total Flats-4

-

c · Plot area -150 Plot area-150 sq. 'I Plot area-223 sq.
sq. mts. mts. i mts.

i Built up area- Bui It up area - Built up area -
: 184.57 sq.mis. 228.25 sq. mts 223.51 sq. mts.

D Cost- Cost- · Cost-
Rs.49,53,000/- Rs.55 ,91,000/- I Rs.66, 17,000/-
'

E Upon getting the tentative cost of construction of the
houses and on the basis of the revised calculations and price
determination of the said properties in dispute and after the
receipt of tender, the demand letters were issued on
18.6.2009 to the respondent-allottees requesting them to
F submit their consent or dissent to the enhanced estimated
cost in writing within 15 days from the date of the issuance
of the letter.

5. The construction of the houses started from
G 30.6.2009 and almost 90% of the allottees gave their consent
to the revised cost of the properties in dispute as determined
by the appellant-Board on the report of the Price Fixation
Committee.

6. The appellant-Board, vide letter dated 7.7.2009,
H
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 851
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

sought for consent from the remaining allottees-respondents, A
who had not given their consent with regard to the revised
fixation of prices on the said disputed properties, stating
thereby that if they fail to do so, they will not be allotted the
houses and the registration amount that they had earlier
given towards the allotment of the houses will be refunded B
to them with interest as per the rules of the Madhya Pradesh
Co-operative Societies Act, 1960 (hereinafter called as "the
Societies Act") and Madhya Pradesh Co-operative Societies
Rules, 1962(hereinafter called as "the Rules").
c
7. On 7.10.2009, the appellant-Board had informed that
all the allotments that were made to the respondents
subsequent to the issuance of the circulars dated 30.9.2008
and 24.10.2008, will be final and they will be bound by the
said circulars. The draw of lots was conducted on 22.12.2009 D
for the allocation of house numbers to the eligible applicants.
In the meeting held on 2.12.2011, it was decided by the
appellant-Board that all the allotments made to the respective
applicants will be governed by the notifications/circulars
regarding the cost of fixation of the properties in dispute and E
also according to the appellant-Board.

8. The Price Fixation Committee in its meeting held on
9.12.2011 and in its report dated 15.12.2011, fixed the cost
with regard to the houses to be allotted under the said "Riviera F
Towne" Scheme. In the report, the commencement of the
Scheme is to be considered to be from the date of the Work
Order and not from the date of the advertisement. Thereafter,
taking into consideration the final cost determined by the
Price Fixation Committee, the final demand letters were G
issued to the successful allottees on 24.12.2011.

9. Being aggrieved by the action of the appellant-Board,
the respondents filed Writ Petition No.15983 of 2012 before
H
852 SUPREME COURT REPORTS (2015] 6 S.C.R.

A the learned single Judge of the High Court of Madhya
Pradesh, challenging the decision of the Price Fixation
Committee, whereby the appellant-Board has directed the
respondents to deposit the price for the said houses allotted
to them at a highly enhanced rate which is 300% more than
B the original price of the said properties in dispute. The
grievance of the respondents was that they had applied for
the said Scheme and had been allotted houses in the year
2007 at the price prevalent at the relevant period of time,
subject to reasonable escalation. But at the time of the
C delivery of possession of the said properties in dispute the
appellant-Board has demanded the price of Rs.30,000/-
instead of Rs.9,000/- per sq. mtr. which is highly unjustified
on its part. The respondents have further contended that
the appellant-Board has wrongly taken into consideration
0
the subsequent guidelines and notifications issued by the
Collector, notifying the price of the land for registration and
the stamp duty which is contrary to the law laid down by this
Court in a catena of cases.
E 10. The learned single Judge disposed of the said writ
petition on 24.9.2012, and directed the appellant-Board to
consider the representation of the respondents and the legal
opinion obtained by them and decide the matter in
F accordance with the decisions of this Court in a catena of
cases, after giving the respondent-allottees due opportunity
of being heard.

11. Though various representations were filed before
the appellant-Board by the allottees with regard to the fixation
G of the cost of the properties in dispute, the Commissioner of
the appellant-Board by order dated 8.3.2013, after
considering the representations of the respondent-allottees
and by referring to the various circulars regarding the cost
H fixation, rejected the representations of the allottees.
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 853
B. S.S. PARIHAR [V. GOPALA GOWDA, J.]

12. The said action of the Commissioner of the A
appellant-Board led the respondents to file Writ Petition
No.5690 of 2013 and connected writ petitions before the
learned single Jud,ge of the High Court. During this period 3
applicants did not make the initial payment of Rs.4 lakhs i.e.
10% of the advertised tentative cost which resulted in the B
cancellation of their registration to the said properties and
their duplex houses were put to auction.

13. The learned single Judge of the High Court disposed
of the Writ Petition No.5690 of 2013 along with the other C .
connected writ petitions vide its common order dated
21.11.2013. The learned single Judge allowed the writ
petitions of the respondents and directed the appellant-Board
to fix the price of the land as it existed on the date of issuance
of the allotment letter and consequently quashed the land D
price determined by the appellant-Board which was based
on the guidelines of the Collector.

14. Being aggrieved by the order dated 21.11.2013,
the appellant-Board filed Writ Appeals before the Division E
Bench of the High Court which were dismissed vide its
common order dated 31.7.2014. The Division Bench upheld
the findings of the learned single Judge, thereby quashing
the enhanced/final demand raised by the appellant-Board.
Hence, these appeals have been filed by the appellant- F
Board, urging various legal grounds and contentions and
prayed to set aside the impugned order passed by the High
Court.

15. Mr. Sunil Gupta, the learned senior counsel G
appearing on behalf of the appellant-Board has relied upon
the judgment of this Court in the case of Delhi Development
Authority v. Pushpendra Kumar Jain', in support of his
case, wherein this Court has held that the allottee was bound
H
1
(1994) Supp (3) sec 494
854 SUPREME COURT REPORTS (2015] 6 S.C.R.

A to make the deposit at the enhanced rate as per the demand
raised by the D.D.A. if he wanted to secure the flat. It was
further held that an allottee gets an indefeasible right to
allotment only on the date of communication of allotment
and not on the date of draw of lots which is only a process to
B identify or select the persons for allotment and not the
allotment itself. It was further held that when the cost was
enhanced prior to the allotment letter, demand of the
enhanced rate was justified. The learned senior counsel has
contended that the impugned order of the High Court was
C not right as the same is contrary to the case of Delhi
Development Authority (supra), which is squarely
applicable to the fact situation of the instant case and the
High Court has failed on its pail oy 1gno1ing the same and
passing the order against the appellant-Board.
0
16. It has been further contended by the iearned senior
counsel that the High Court has gravely erred in determining
the price of the properties in dispute at a rate prevalent during
the period 2007-2008 or 2008-2009, as the appellant-Board
E has sold and executed the sale deeds of 1718 flats and 302
plots as per the guidelines of the Collector issued from time
to time which would become applicable to the allottees as
well.

F 17. The learned senior counsel has further contended
that the fixation of the cost of the properties in dispute has
been done in accordance with the Scheme, the rules and
the policy of the appellant-Board and the so-called allotment
made in favour of the allottees is not an allotment but only a
G registration granted to them which the High Court has
misconstrued as allotment of the said land.

18. On the contrary, the learned senior counsel
appearing on behalf of the respondents has sought to jul'tify
H the impugned judgment and order contending that the
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 855
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

judgment of the High Court is perfect and justified. He has A
contended that on the issue of fixing the price of the land,
the High Court has rightly held that the price or cost of the
said land should be in accordance with the price or the cost
of land which existed on the date of allotment.
B
19. He has further contended that the High Court has
rightly held that the date of allotment is the date on which
the offer of the respondents was accepted and their
applications were registerea a{)d the allotments to the land
were made accordingly, which i"S clear from a bare perusal C
of the letters indicating the acceptclhce of registration in
allotment.

20. The learned senior counsel has further contended
that the main dispute is with regard to the difference of the D
amount of the cost of the land that is being demanded by
the appellant-Board as per the Collector's guidelines
prevailing in the year 2011-12 and the actual cost that existed
on the date of allotment of the said land. The applicants
have already paid the entire cost as per the demand of the E
appellant-Board and have in fact paid 10% extra towards
the cost of the said property and despite the same, the
property has not been handed over to them which is a grave
miscarriage of justice and the respondents have been
suffering for a long time. F

21. We have heard both the parties. On the basis of
the aforesaid rival legal contentions urged on behalf of the
parties and on perusal of the findings recorded by the High
Court in its impugned judgment and order, we have to answer G
the points of dispute on the basis of the evidence produced
on record. We record our reasons hereunder:-

The contentions urged on behalf of the respondents
that once the appellant-Board has made the allotment of H
856 SUPREME COURT REPORTS [2015] 6 S.C.R.

A the said plot of land, it is debarred from raising the cost of
construction or claiming enhanced prices for the said land,
is wholly untenable in law in view of the clauses contained in
the advertisement published in the newspaper Oainik
Bhaskar dated 09.11.2007, which read that the cost of the
B houses shown in this advertisement are totally provisional
and the final fixation of the price will be done after the
completion of the Scheme. Therefore, the allottees will have
to pay the difference between the tentative cost and the final
sale price of the land which is based on the fixation of the
C final cost of the land, within the stipulated time.

Therefore, in view of the aforesaid clause, the allotment
of the said plot of land in favuur of th<> •espondent-allottees
is only provisional in nature and the same would be subject
D to the final fixation of the price of the land that will be done
after the completion of the Scheme as the said clause is
binding upon the respondent- allottees.

22. Further, the said clause is also traceable to Section
E 50 of the Madhya Pradesh Griha Nirman MandalAdhiniyam,
1972 (in short 'the Act, 1972'), wherein the appellant-Board
is empowered to retain, lease, sell, exchange or otherwise
dispose of any land, building or other property vesting with
it, situated in the area comprised in any housing Scheme or
F in any adjoining area. The Madhya Pradesh Housing Board
Accounts Rules, 1991, ( in short "the Rules, 1991 ") were
framed in this regard, the relevant provisions of which are
necessary to be extracted hereunder:

G "5.4.SALE PRICE

Sale price of sites and buildings shall be separately
determined in accordance with the guidelines issued
by the Board. But wliere yield a sale price for any reason
H different from cost price determined under Rule 5.3.2
M. P. HOUSING & INFRASTRUCTURE DEV. BC. \RO v. 857
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

and 5.3.3 (e.g. due to adoption of different rates of A
overheads for different income groups, charging
premium from higher income groups for appreciation
in land value, grant of concessions to Board's
employees adoption of average expenditure on project
instead of year wise expenditure for calculating B
overheads on interest, adoption of uniform rate of
interest of the entire construction period instead of
varying rates of interest for separate years), sales may
be brought to account in the revenue section of project
accounts without prejudice to the operation of Rules c
5.3.2 and 5.3.3 (These rules deal with aci:-'.:lunt
adjustment in the expenditure section of project
account upto the state of recording under the account
head "cost of Sales"). Accordingly account adjustment
D
regarding capitalization of overheads, transfer of assets
from Divisions to Estate Management and incorporation
of costs in the account "Cost of Sales" in the ledgers of
Estate Management shall be carried out immediately
on completion of project and not held up till sale price E
approved by the Competent Authority.

5.7 LAND

5.7.1 Land acquired shall be brought to account on
accrual basis, land made over to the Board free of cost F
shall be brought to account at nominal price.

xxx xxx xxx
5.7.4 For the purpose of assessing the cost of a project, G
i.e., debiting "Cost of Sales" as well for the purpose of
valuation of closing stock in Final Accounts,
appreciation in land value shall be ignored. The Board
may, however, take it into account for the purpose of
determination of sale price." H
858 SUPREME COURT REPORTS (2015] 6 S.C.R.

A 23. The final sale price which is fixed and intimated to
the allottees is in accordance with the provisions of the Act
1972, the Rules, 1991 and the clause of the advertisement
which is binding on the respondent allottees. Therefore, the
High Court has committed an error in law by quashing the
B demand notice of the appellant-Board for the payment of
the final sale price and allowing the writ petitions of the
respondent-allottees without considering the terms and
conditions of the advertisement and the statutory provisions
of the Act and the Rules towards the fixation of the cost of
C the land. On this ground, the impugned judgments of both
the learned single Judge and the Division Bench of the High
Court are liable to be quashed and set aside.

24. The learned senior counsel on behalf of the
D appellant-Board has rightly pointed out the concurrent
findings recorded in the impugned judgment of the Division
Bench, which has referred to the judgment of the learned
Single Judge, wherein he has held that once the allotment
of the said plot of land is made, the appellant-Board is
E denuded of its power to seek enhanced cost of land based
on the Collector's guidelines, as erroneous in law. He has
also relied on the principles that have been laid down in
various cases of this Court including the cases of Tamil Nadu
F Housing Board v. Service Society & Anr2 and Delhi
Development Authority (supra). He has rightly pointed out
that the said conclusions of both the learned single Judge
and the Division Bench of the High Court are erroneous in
law and the same is a perverse finding of fact for the reason
G that they have misconstrued the registration of the
applications and the allotments made with respect to the
land in dispute which is in accordance with the clause
published in the advertisement. Reliance has been placed
in the case of Delhi Development Authority (supra) which
H reads thus:
2 (2011)11 SCC13
M. P. HOUSING & INFRASTRUCTURE DEV. BO!.RD v. 859
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

"8 ........ No provision of law also could be brought to A
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. l_n our opinion, since the right to flat arises only on
the communication of the letter of allotment, the price B
or rates prevailing on the date of such communication
is applicable unless otherwise 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 c
above procedure."

25. The conditions stipulated in the advertisement
inviting applications from the applicants and the provision
provided under Section 50 Rule (5)(iv) of the Act of 1972 D
and Rules 5.7.1 and 5.7.4 of the Rules, 1991 would make it
clear that the law laid down in the Delhi Development
Authority (supra) case is aptly applicable to the fact situation
of the instant case. The same has not been considered by
the High Court while passing its impugned order. On this E
ground also, the impugned judgment is liable to be set aside.

26. The learned senior counsel on behalf of the
appellant-Board has rightly pointed out that the determination
of the sale price of the flats allotted in favour of the F
respondent-allottees is based on the cost price fixed as per
the guidelines provided by the Collector from time to time
for the relevant year for the final allotment. He has further
pointed out that the total number of allottees who have
applied to the advertisement through the procedure of G
drawing the lottery for the allotment of flats in their favour
are 2531. The allottees who have accepted the final cost
are 1472. The allottees who have not accepted the final cost
and filed a petition against the same are 84. There are 975 H
860 SUPREME COURT REPORTS [2015) 6 S.C.R.

A applicants who have vacant houses and are awaiting the
decision of the courts in other cases but they have neither
accepted nor refused the final cost fixation. Apart from the
said factual position, about 700 HIG & MIG and 1500 LIG
and EWS housing units would be further affected_ by the
B impugned judgment of the High Court. The legal issue that
is present for our determination is, whether the demand of
the final sale price which has been fixed by the appellant-
Board in terms of the conditions stipulated in the
advertisement with regard to the land in dispute for the year
C 2010-2011 which has been done on the basis of the "Market
Price Guiding Principles, District, Bhopal" by the Collector
under Section 47(a) of the Indian Stamp Act, 1899 (Act NO.
2 of 1899), read with Section 75 of the Madhya Pradesh
D Preparation and Revision of Market Value Guidelines Rules,
2000 (hereinafter called as "the Rules, 2000"), framed by
the State Government for the determination of the market
price of immoveable property and the tier review under Rule
4(b) of Rules, 2000, the proposal of rates of market price for
E the year 2011-2012, submitted by the sub-District Valuation
Committee before the District Valuation Committee is legal
and valid?

27. The provisos issued by the Central Valuation Board
F vide letter No. 713/Ga.La./2011 Bhopal dated 29.03.2011
for the implementation of the rates of plots of land, buildings
and agricultural land in Rule 3(2) of the Rules, 2000 and the
after approval of the rate of the market price proposed by
District Valuation Committee Guiding Principles (Guidelines)
G forthe year 2011-2012 for reckoning the market price of the
immovable property (plots of land, building and agricultural
land) situated in District Bhopal under Rule 4(2)(c) of the
Rules, 2000, are forwarded by the Sub-Registrar of the
Districts for the purpose of issuing directions under Section
H 47-A, sub-Section (1) of the Indian Stamp Act, 1899. The
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 861
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

said valuation fixed by the District Valuation Committee under A
the Chairmanship of the District Collector of Bhopal is not
under challenge by either the allottees or any other person.
Therefore, the guiding principles for the determination of the
final sale price of the plots in favour of the allottees cannot
be termed as either erroneous or error in law. Further, the B
learned senior counsel for the appellant-Board has placed
reliance upon the judgment of this Court in the cases of BSEB
v. Suresh Pd. Sinha3 and State Of U.P. v. Synthetics &
Chemicals Ltd. 4 in support of the proposition of law upon
the principal of binding precedents, wherein this Court has C
held that any declaration or conclusion a.rrived at without
application of mind or preceded without any reason cannot
be deemed to be declaration of law or authority of a general
nature and the same cannot been deemed as a precedent.
D
The learned senior counsel on behalf of the appellant-
Board has further rightly placed reliance upon the judgment
of this Court in the case of Tamil Nadu Housing Board
(supra) in support of his legal submission wherein, this Court E
has held thus:

"18. There is no term or provision in the contract that if
the Board does not determine the final price within three
years from the date of allotment, the Board would lose
the right to determine the final price thereafter or that F
the tentative price would become the final price. If on
account of delay in determination of compensation for
land aC;quisition or delay on the part of the contractors
in completing the development works or construction,
or if there are any encroachments or if there are pending G
claims of contractors regarding development or
construction, the Board would not be able to determine
the final cost within three years. But that did not mean
3
(2009) s sec 483 H
4 (1991) 4 sec 139
862 SUPREME COURT REPORTS (2015] 6 S.C.R.

A that the tentative cost would become the final cost in
the absence of such a provision in the letter of allotment
or lease-cum-sale agreement..

20. Clause 17 states that except the fixation of price
B with reference to the compensation finally awarded by
the courts, the Board should fix the price of the LIG
house after taking into consideration the development
charges, cost of amenities and cost of buildings within
three years from the date of allotment. If the final price
c is so fixed, thereafter what could be increaseel is only
the land cost component on account of any increase in
compensation that may be awarded by the courts. If
the Board had earlier fixed the final price:"the Society's
contention might have merited acceptance as the
D component of price with reference to cost of
development and amenities and cost of building would
have attained finality on account of such final
determination and only the increase on account of
award of compensation for land could be demanded
E after such determination of final price. But where the
final price has not been determined at all, for
whatsoever reason, and the final cost was being
determined for the first time, the allottee cannot contend
that only the increase on account of the land, and not
F
the increase on account of development cost and
construction cost, could be demanded. Where the final
price has not been fixed, the Board could, after
ascertainment of various costs, determine the final p1 ice
even after three years, and the finality in regard to cost
G
of development and amenities and the cost of
construction, referred under Clause 17, would not apply.

30. Whenever allotments are made even before the
completion of the development of land and
H
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 863
B. S. S. PARIHAR [V. GOPALA GOWDA, J.)

construction, necessarily the cost that is shown by the A
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 the High Court and this Court. Sometimes the entire
process may take 10 to 15 years and till that process is B
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.

32. Therefore, an allottee cannot contend that the c
increase, if any, should be determined within three
years and if the increase is not so determined, the
tentative cost would itself become the final cost. Such
an interpretation of Clause 17 would be illogical and
unreasonable. If the Board is able to show that there D
was sufficient cause for the delay in deciding the final
price and that it was beyond its control to determine
the final cost earlier (or within three years) it will be
entitled to final cost even if the claim is delayed by a
few years. The allottee cannot refuse to pay it merely E
on the ground of delay.

37. We find that the allottees/Society do not dispute
that the cost of the land increased considerably on
account of enhancement of compensation. The Board F
showed that the total cost of land inclusive of interest
up to 31-3-1987 was Rs. 35,02,727 for 8 acres and
16,422 sq ft. The said figure was broadly accepted by
the Society, in its calculation sheet. The Society arrived
at the cost of a plot measuring 1040 sq ft as Rs. 3500 G
(paid as deposits) plus Rs. 8634 which aggregates to
Rs. 12, 134. But as noticed above, this is the
proportionate cost worked out for 1040 sq ft out of the
total cost of an extent of 33,64,902 sq ft (8 acres and
H
864 SUPREME COURT REPORTS [2015] 6 S.C.R.

A 16,422 sq ft). It is not possible for the allottee to contend
that he will pay only the proportionate actual cost of his
plot. If the cost of the plot has to be worked out, the
cost relating to proportionate share in the common/
service areas (roads, parks, playgrounds, etc.) should
B be added. That means at least adc:fition of another 40%
to the price worked out for the actual extent of the plot.
With reference to the cost worked out by the Society, if
40% is added, the increased cost of plot would be
around Rs. 16,987.60. According to the Society the
c original tentative cost for the plot was Rs. 3000.
Therefore the increase in cost would be around Rs.
14,000. What is demanded as additional amount is Rs.
16,770. The difference is hardly Rs. 2770 which may
be attributable to the increase in the cost of
D
development/construction. It cannot therefore be said
that the amount claimed under the demand notice dated
21-5-1988 is excessive or unreasonable. Neither party
has given the full data or facts or accounts. The
E allotment was made 35 years back. No purpose would
be served by remitting the matter for re-examination.
In the facts and circumstances, we are satisfied that
the demand is not open to challenge."

F In view of the aforesaid decisions of this Court, both
the learned single Judge and the Division Bench of the High
Court have misconstrued the terms and conditions stipulated
in the advertisement and have erroneously applied the same
to the fact situation of the present case and came to the
G erroneous conclusion by placing reliance upon the judgment
of this Court in the case of M.P. Housing Board v. Anil
Kumar Khiwani5, wherein this Court by referring to the
observations made by the Division Bench in its judgment at
paras 6,7,8,9, 10, 11, 12, 16 and 17 held that the Board was
H 5 (2oos) 1o sec 796
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 865
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

not entitled to raise the price of 71 lakhs particularly, when it A
was guilty of delaying the project. The strong reliance placed
upon the aforesaid judgment by both the learned single
Judge and the Division Bench of the High Court in holding
that the appellant-Board is not empowered to determine the
final cost of the proper.ties in dispute is wholly erroneous in B
law as the said judgment does not deal with the role and the
power of the appellant-Board to determine the final price of
the allotted plot which power is in conformity with the
provisions of Section 50 of the Act of 1972 and t.he relevant
rules referred to supra and the terms and conditions of the C
advertisement. Therefore, the said judgment does not have
the binding precedent for the proposition of law that the
appellant-Board does not have the power to re-determine
the final price of the allotted properties after the applications D
of the allottees were registered. In this regard, the learned
senior counsel for the appellant-Board has rightly placed
reliance upon the judgment of this Court in the case of State
of U.P. v. Synthetics and Chemicals Ltd. (supra), the
relevant paras of which read thus: E

"41. Does this principle extend and apply to a
conclusion of law, which was neither raised nor
preceded by any consideration. In other words can such
conclusions be considered as declaration of law? Here
F
again the English courts and jurists have carved out
an exception to the rule of precedents. It has been
explained as rule of sub-silentio. "A decision passes
sub-silentio, in the technical sense that has come to
be attached to that phrase, when the particular point of G
law involved in the decision is not perceived by the
court or present to its mind.". In Lancaster Motor
Company (London) Ltd. v. Bremith Ltd. the Court did
not feel bound by earlier decision as it was rendered
'without any argument, without reference to the crucial H
866 SUPREME COURT REPORTS (2015] 6 S.C.R.

A words of the rule and without any citation of the
authority'. It was approved by this Court in Municipal
Corporation of Delhi v. Gurnam Kaur. The bench held
that, 'precedents sub-silentio and without argument are
of no moment'. The courts thus have taken recourse
B to this principle for relieving from injustice perpetrated
by unjust precedents. A decision which is not express
and is not founded on reasons nor it proceeds on
consideration of issue cannot be deemed to be a law
declared to have a binding effect as is contemplated
c by Article 141. Uniformity and consistency are core of
judicial discipline. But that which escapes in the
judgment without any occasion is not ratio decidendi.
In 8. Shama Rao v. Union Territory of Pondicherry it
was observed, 'it is trite to say that a decision is binding
D
not because of its conclusions but in regard to its ratio
and the principles, laid down therein'. Any declaration
or conclusion arrived without application of mind or
preceded without any reason cannot be deemed to be
E declaration of law or authority of a general nature
binding as a precedent. Restraint in dissenting or
overruling is for sake of stability and uniformity but
rigidity beyond reasonable limits is inimical to the growth
of law.
F
42. Effort was made to support the conclusion,
indirectly, by urging that the State having raised same
objections by way of review petition and the same
having been rejected it amounted impliedly as providing
G reason for conclusion. Law declared is not that can be
culled out but that which is stated as law to be accepted
and applied. A conclusion without reference to relevant
provision of law is weaker than even casual observation.
In the order of Brother Thommen, the extracts from
H the judgment of the Constitution Bench quoted in
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 867
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

extenso demonstrate that the question of validity of A
levy of sales and purchase tax was neither in issue nor
was it raised nor is there any discussion in the judgment
except of course the stray argument advanced by the
learned Attorney General to th~ following effect:
B
"But alcohol not fit for human consumption are not
luxuries and as such the State legislatures, according
to Attorney General, will have no power to levy tax on
such alcohol."
c
Sales tax or purchase tax under Entry 54 is levied on
sale or purchase of goods. It does not contemplate
any distinction between luxury and necessity. Luxuries
are separately taxable under Entry 62. But that has
nothing to do with Entry 54. What prompted this D
submission is not clear. Neither there was any occasion
nor there is any constitutional inhibition or statutory
restriction under the legislative entry nor does the taxing
statute make any distinction between luxuries and
necessities for levying tax. In any case the bench did E
not examine it nor did it base its conclusions on it. In
absence of any discussion or any argument the order
was founded on a mistake of fact and, therefore, it could
not be held to be law declared. The bench further was
not apprised of earlier Constitution Bench decisions in F
Hoechst Chemicals v. State of Bihar and Ganga Sugar
Mill v. State of U.P which specifically dealt with the
legislative competence of levying sales tax in respect
of any industry which had been declared to be of public
importance. Therefore, the conclusion of law by the G
Constitution Bench that no sales or purchase tax could
be levied on industrial alcohol with utmost respect fell
in both the exceptions, namely, rule of sub-silentio and
being in per incuriam, to the binding authority of the
H
precedents."
868 SUPREME COURT REPORTS (2015] 6 S.C.R.

A Further reliance has been placed upon the decision of
this Court in the case of Bihar School Examination Board
v. Suresh Prasad Sinha, (supra), the relevant paras of which
read thus:

B "18. The courts should guard against the danger of
mechanical application of an observation without
ascertaining the context in which it was made. In C/Tv.
Sun Engg. Works (P) Ltd.

c "39 . ... It is neither desirable nor permissible to pick
out a word or a sentence from the judgment of this
Court, divorced from the context of the question
under consideration and treat it to be the complete
'law' declared by this Court. The judgment must be
o read as a whole and the observations from the
judgment have to be considered in the light of the
questions which were before this Court. A decision
of this Court takes its colour from the questions
involved in the case in which it is rendered and while
E applying the decision to a later case, the courts must
carefully try to ascertain the true principle laid down
by the decision of this Court and not to pick out words
or sentences from the judgment, divorced from the
context of the questions under consideration by this
F Court, to support their reasonings."

19. It is also necessary to keep in mind the following
principles laid down in Govt. of Kamataka v. Gowramma
with reference to precedential value of decisions:
G
"10. '12 . ... Reliance on the decision without looking
into the factual background of the case before it, is
clearly impermissible. A decision is a precedent on
its own facts. Each case presents its own features.
H It is not everything said by a Judge while giving (a]
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 869
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

judgment that constitutes a precedent. The only thing A
in a Judge's decision binding a party is the principle
upon which the case is decided and for this reason
it is important to analyse a decision and isolate from
it the ratio decidendi. According to the well-settled
theory of precedents, every decision contains three B
basic postulates: (1) findings of material facts, direct
and inferential. An inferential finding of facts is the
inference which the Judge draws from the direct, or
perceptible facts; (it) statements of the principles of
law applicable to the legal problems disclosed by c
the facts; and (iit) judgment based on the combined
effect of the above. A decision is an authority for
what it actually decides. What is of the essence in a
decision is its ratio and not every observation found
D
therein nor what logically flows from the various
observations made in the judgment. The enunciation
of the reason or principle on which a question before
a court has been decided is alone binding as a
precedent. (See State ofOrissa v. Sudhansu Sekhar E
Misra and Union of/ndia v. Dhanwanti Devi.) A case
is a precedent and binding for what it explicitly
decides and no more. The words used by Judges in
their judgments are not to be read as if they are
words in an Act of Parliament. In Quinn v. Leathern F
the Earl of Halsbury, LC. observed that everv
judgment must be read as applicable to the particular
facts proved or assumed to be proved, since the
generality of the expressions which are found there
are not intended to be the exposition of the whole G
law but governed and qualified by the particular facts
of the case in which such expressions are found
and a case is only an authority for what it actually
decides.'
H
870 SUPREME COURT REPORTS [2015] 6 S.C.R.

A 11. '15. . . . Courts should not place reliance on
decisions without discussing as to how the factual
situation fits in with the fact situation of the decision
on which reliance is placed. Observations of courts
are neither to be read as Euclid's theorems nor as
B provisions of the statute and that too taken out of
their context. These observations must be read in
the context in which they appear to have been stated.
Judgments of courts are not to be construed as
statutes. To interpret words, phrases and provisions
c of a statute, it may become necessary for Judges to
embark into lengthy discussions but the discussion
is meant to explain and not to define. Judges
interpret statutes, they do not interpret judgments.
They interpret words of statutes; their words are not
D
to be interpreted as statutes .
• • •
18. The following words of Lord Denning in the matter
E of applying precedents have become locus classicus:

"Each case depends on its own facts and a close
similarity between one case and another is not
enough because even a single significant detail may
F alter the entire aspect. In deciding such cases, one
should avoid the temptation to decide cases (as said
by Car::lozo) by matching the colour of one case
against the colour of another. To decide therefore,
on which side of the line a case falls, the broad
G resemblance to another case is not at all decisive.

•• •
Precedent should be followed only so far as it marks
the path of justice, but you must cut the dead wood
H
M. P. HOUSING & 11°'.!!FRASTRUCTURE DEV. BOARD v. 871
B. s. s. PARIHAR :1v1 &op~()i.· GoWoA. J.1
1

and trim off the side branches else you will find A
yourself lost in thickets and branches. My plea is to
keep the path to justice clear of obstructions which
could impede it."

20. In SaNa Shramik Sanghatana (KV) v. State of B
Maharashtra this Court cited the following passage from
Quinn v. Leathern with approval:

" ... Now, before discussing Allen v. Flood and what
was decided therein, there are two observations of c
a general character which I wish to make, and one
is to repeat what I have very often said before, that
every judgment must be read as applicable to the
particular facts proved, or assumed to be proved,
since the generality of the expressions which may D
be found there are not intended to be expositions of
the whole law, but [are] governed and qualified by
the particular facts of the case in which such
expressions are to be found. The other is that a case
is only an authority for what it actually decides. I E
entirely deny that it can be quoted for a proposition
that may seem to follow logically from it. Such a
mode of reasoning assumes that the law is
necessarily a logical code, whereas every lawyer
must acknowledge that the law is not always logical F
at all."

28. Applying the guideline rates in relation to the
valuation of the land in accordance with Circular No. 21 of
2008 dated 24.10.2008, for the determination of the cost of G
the L.l.G./E.W.S. buildings, the Board has passed the
following resolution:-

"Following decision has been taken by the competent
authority in connection with the buildings of all the H
872 SUPREME COURT REPORTS [2015] 6 S.C.R.

A categories of E.W.S./L.l.G. in all the districts of Madhya
Pradesh whose registration has been carried out before
191h of December, 2011 and whose final determination
of the value is effected the Circular No.21/2008 dated
24.10.2008:-
B
(i) From the date of coming into force of the Circular
of the Board vide No. 21/08 dated 24.10.2008 and in
between the period of coming into force of the Circular
No.15/11 dated 19.12.2011 the cost of the land in the
C final valuation of the buildings of E.W.S/L.l.G. duly
advertised, the value taken in the initial determination
of the value, be determined.

(ii) In the final determinaiion of the value of the
D aforesaid E.W.S./L.l.G. buildings, following shall be the
criteria/i ng red ients: -

(a) The cost of the land which was determined at the
·time of the registration.
E (b) Actual development expenditure incurred on the
plot since after the registration.

(c) Total construction cost.

F (d) Supervision fees (At the rate prevalent at the time
of the registration).

(e) Penal interest against the remaining instalments
as per the rules of the Board (at the rate prevalent
from time to time).
G
(f) Other charges as per the rules of the Board ...... "

The said guidelines have been laid down by the
Development Board during the pend ency of this proceeding.
H
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 873
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

The submission made by the learned senior counsel on A
behalf of the allottees is that the said benefit may be extended
to these allottees involved in these proceedings. The rates
with regard to the cost of flats as on the date of the publication
of the advertisement in November, 2007, the cost of the flats
fixed in the year June, 2009 and the total final demand for B
the cost of the flats in December, 2011 are furnished in the
table which are extracted herein below for our perusal:-

1-TYPe of HCiUSe-·r~~i 6n- Cost as told in Taal Rnal
Jure, 2009 (In Derrandin c
. Naverrber, Lakhs) Dece., 2011
i '2fljf I (In L.akhs)

~--+--~~-----·
l'ire DJµex ! 40.00
-------------j-
49.53
- - .-
i 81.73
D
NO'! Triplex 45.00 55.91 188.97
NO'! !Alpex 53.00 66.17 1120.44
Comer I

- - - - · - - - - - - - -- --
E
29. Dr. Rajeev Dhawan, the learned senior counsel for
the respondent-allottees in C.A. Nos. 1802-1803 of 2015,
has placed strong reliance upon Article 14 of the Constitution
of India and upon the judgment of this Court in the case of
Coimbatore District Central Coop. Bank v. Employees F
Association 6, in support of the proposition of law that the
appellant-Board while exercising its power to fix the final
rates of the allotted plots by invoking the clause contained
in the notification issued by it for inviting applications, wherein
it has retained its right to determine the final price of the G
allotted plot, must pass the test of the doctrine of
proportionality in determining the final price of the plot. He
has placed strong reliance in support of his case upon the

• (2007) 4 sec 669 H
874 SUPREME COURT REPORTS [2015) 6 S.C.R.

A following decisions of this Court in the cases of Coimbatore
District Central Coop. Bank (supra), Teri Oat Estates (P)
Ltd. v. U. T. Chandigarh', Om Kumar v. Union of lndia8
and State of U.P. v. Sheo Shanker Lal Srivastava 9 and
has contended that the same have to be applied to the fact
B situation of the present case with regard to the legal principle
of doctrine of proportionality. The relevant paras of the above
mentioned judgments are stated hereunder:

In Coimbatore District Central Coop. Bank (supra),
C this Court has held thus:

"17. So far as the doctrine of proportionality is
concerned, there is no gainsaying that the said doctrine
has not only arrived in our legal system but has come
o to stay. With the rapid growth of administrative law and
the need and necessity to control possible abuse of
discretionary powers by various administrative
authorities, certain principles have been evolved by
courts. If an action taken by any authority is contrary to
E law, improper, irrational or otherwise unreasonable, a
court of law can interfere with such action by exercising
power of judicial review. One of such modes of
exercising power, known to law is the "doctrine of
proportionality".
F
18. "Proportionality" is a principle where the court is
concerned with the process, method or manner in which
the decision-maker has ordered his priorities, reached
a conclusion or arrived at a decision. The very essence
G of decision-making consists in the attribution of relative
importance to the factors and considerations in the
case. The doctrine of proportionality thus steps in focus
true nature of exercise-the elaboration of a rule of
7 (2004J 2 sec 130
H • (2001 J 2 sec 386
' (2006J 3 sec 216
M. P. HOUSING & INFRASTRUCTURE DEV 80/\RD v. 875
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

permissible priorities. A

19. de Smith states that "proportionality" involves
"balancing test" and "necessity test". Whereas the
former (balancing test) permits scrutiny of excessive
onerous penalties or infringement of rights or interests B
and a manifest imbalance of relevant considerations,
the latter (necessity test) requires infringement of
human rights to the least restrictive alternative. (Judicial
Review of Administrative Action (1995), pp. 601-05,
para 13.085; see also Wade & Forsyth: Administrative C
Law (2005), p. 366.]

20. In Halsbury's Laws of England (4th Edn.), Reissue,
Vol. 1(1), pp. 144-45, para 78, it is stated:
D
"The court will quash exercise of discretionary powers
in which there is no reasonable relationship between
the objective which is sought to be achieved and the
means used to that end, or where punishments
imposed by administrative bodies or inferior courts are E
wholly out of proportion to the relevant misconduct. The
principle of proportionality is well established in
European law, and will be applied by English courts
where European law is enforceable in the domestic
courts. The principle of proportionality is still at a stage F
of development in English law; lack of proportionality
is not usually treated as a separate ground for review
in English law, but is regarded as one indication of
manifest unreasonableness.""
G
In Teri Oat Estates (P) Ltd. (supra), it was held as
under:

"46. By proportionality, it is meant that the question
whether while regulating exercise of fundamental rights,
H
876 SUPREME COURT REPORTS [2015] 6 S.C.R.

A the appropriate or least restrictive choice of measures
has been made by the legislature or the administrator
so as to achieve the object of the legislation or the
purpose of the administrative order, as the case may
be. Under the principle, the court will see that the
B legislature and the administrative authority

"maintain a proper balance between the adverse
effects which the legislation or the administrative
order may have on the rights, liberties or interests of
c persons keeping in mind the purpose which they
were intended to serve".

49. Ever since 1952, the principle of proportionality has
been applied vigorously to legislative and administrative
D action in India. While dealing with the validity of
legislation infringing fundamental freedoms
enumerated in Article 19(1) of the Constitution of India,
this Court had occasion to consider whether the
restrictions imposed by legislation were
E disproportionate to the situation and were not the least
restrictive of the choices. In cases where such
legislation is made and the restrictions are reasonable;
yet, if the statute concerned permitted administrative
authorities to exercise power or discretion while
F imposing restrictions in individual situations, question
frequently arises whether a wrong choice is made by
the administrator for imposing the restriction or whether
the administrator has not properly balanced the
fundamental right and the need for the restriction or
G whether he has imposed the least of the restrictions or
the reasonable quantum of restrictions etc. In such
cases, the administrative action in our country has to
be tested on the principle of proportionality, just as it is
done in the case of main legislation. This, in fact, is
H
being done by the courts. Administrative action in India
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 877
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

affecting the fundamental freedom has always been A
tested on the anvil of the proportionality in the last 50
years even though it has not been expressly stated
that the principle that is applied is the proportionality
principle.
B
50. In Om Kumar, however, this Court evolved the
principle of primary and secondary review. The doctrine
of primary review was held to be applicable in relation
to the statutes or statutory rules or any order which
has the force of statute. The secondary review was c
held to be applicable inter alia in relation to the action
in a case where the executive is guilty of acting patently
arbitrarily. This Court in E.P. Royappa v. State of T.N.
noticed and observed that in such a case Article 14 of
the Constitution of India would be attracted. In relation D
to other administrative actions as for example,
punishment in a departmental proceeding, the doctrine
of proportionality was equated with Wednesbury
unreasonableness.
E
52. In Edore v. Secy. of State for the Home Deptt. the
appellant was a citizen of Nigeria who had entered the
United Kingdom and remained back after her visa had
expired. She had two children, born to a British citizen.
The children were emotionally dependent on him and F
he was a stabling influence on their lives. If the appellant
and her children were returned to Nigeria, their
relationship with their father would end. The Court trying
to resolve the conflict at hand opined:
G
Where the essential facts were not in doubt or
dispute, the adjudicator's task was to determine
whether the decision under1appeal was properly one
within the decision-maker's discretion, namely, that
it was a decision which could reasonably be regarded H
878 SUPREME COURT REPORTS (2015] 6 S.C.R.

A as striking a fair balance between the competing
interests in play. If it were, then the adjudicator could
not characterize it as a decision "not in accordance
with the law" and so, even if he personally would
have preferred the balance to have been struck
B differently, he could not substitute his preference for
the decision in fact taken. However, there would be
occasions where it could properly be said that the
decision reached was outside the range of
permissible responses open to him, in that the
c balance struck was simply wrong."

In Om Kumarv. Union of/ndia (supra), this Court has
held thus:

D "28. By "proportionality", we mean the question
whether, while regulating exercise of fundamental
-· ;!
rights, the appropriate or least-restrictive choice of
measures has been made by the legislature or the
administrator so as to achieve the object of the
E legislation or the purpose of the administrative order,
as the case may be. Under the principle, the court will
see that the legislature and the administrative authority
"maintain a proper balance between the adverse effects
which the legislation or the administrative order may
F have on the rights, liberties or interests of persons
keeping in mind the purpose which they were intended
to serve". The legislature and the adminis-trative
authority are, however, given an area of discretion or a
range of choices but as to whether the choice made
G infringes the rights excessively or not is for the court.
That is what is meant by proportionality.

67. But where an administrative action is challenged
as "arbitrary" under Article 14 on the basis of Royappa
H (as in cases where punishments in disciplinary cases
''
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 879
B. S.S. PARIHAR [V. GOPALA GOWDA, J.]

are challenged), the question will be whether the A
administrative order is "rational" or "reasonable" and
the test then is the Wednesbwy test. The courts would
then be confined only to a secondary role and will only
have to see whether the administrator has done well in
his primary role, whether he has acted illegally or has B
omitted relevant factors from consideration or has taken
irrelevant factors into consideration or whether his view
is one which no reasonable person could have taken.
If his action does not satisfy these rules, it is to be
treated as arbitrary. In G.B. Mahajan v. Jalgaon c
Municipal Council, Venkatachaliah, J. (as he then was)
pointed out that "reasonableness" of the administrator
under Article 14 in the context of administrative law
has to be judged from the stand point of Wednesbury ...,n
rules. In Tata Cellular v. Union of India (SCC at pp.
679-80), Indian Express Newspapers Bombay (P) Ltd.
v. Union of India (SCC at p. 691), Supreme Court
Employees' Welfare Assn. v. Union of India (SCC at p.
241) and U. P. Financial Corpn. v. Gem Cap (India) (P). E
Ltd. (SCC at p. 307) while judging whether the
administrative action is "arbitrary" under Article 14 (i.e.
otherwise then being discriminatory), this Court has
confined itself to a Wednesbury review always.
F
68. Thus, when administrative action is attacked as
discriminatory under Article 14, the principle of primary
review is for the courts by applying proportionality.
However, where administrative action is questioned as
"arbitrary" under Article 14, the principle of secondary G
review based on Wednesbury principles applies.

71. Thus, from the above principles and decided cases,
it must be held that where an administrative decision
relating to punishment in disciplinary cases is
H
880 SUPREME COURT REPORTS [2015) 6 S.C.R.

A questioned as "arbitrary" under Article 14, the court is
confined to Wednesbury principles as a secondary
reviewing authority. The court will not apply
proportionality as a primary reviewing court because
no issue of fundamental freedoms nor of discrimination
B under Article 14 applies in such a context. The court
while reviewing punishment and if it is satisfied that
Wednesbury principles are violated, it has normally to
remit the matter to the administrator for a fresh decision
as to the quantum of punishment. Only in rare cases
c where there has been long delay in the time taken by
the disciplinary proceedings and in the time taken in
the courts, and such extreme or rare cases can the
court substitute its own view as to the quantum of
punishment."
D
In the case of State of U.P. v. Sheo Shanker Lal
Srivastava (supra), this Court has held thus:

"23. In V Ramana v. A.P. SRTC this Court upon
E referring to a large number of decisions held: (SCC p.
348, para 11)

"11. The common thread running through in all these
decisions is that the court should not interfere with the
F administrator's decision unless it was illogical or suffers
from procedural impropriety or was shocking to the
conscience of the court, in the sense that it was in
defiance of logic or moral standards. In view of what
has been stated in Wednesbury case the court would
G not go into the correctness of the choice made by the
administrator open to him and the court should not
substitute its decision for that of the administrator. The
scope of judicial review is limited to the deficiency in
decision-making process and nbt the decision."
H
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 881
B. S.S. PARIHAR [V. GOPALA GOWDA, J.]

24. While saying so, we are not oblivious of the fact A
that the doctrine of unreasonableness is giving way to
the doctrine of proportionality.

25. It is interesting to note that the Wednesbury
principles may not now be held to be applicable in.view B
of the development in constitutional law in this behalf.
See, for example, Huang v. Secy. of State for the Home
Deptt. wherein referring to R. v. Secy. of State of the
Home Deptt., exp Oa/yitwas held that in certain cases,
the adjudicator may require to conduct a judicial C
exercise which is not merely more intrusive than
Wednesbury, but involves a full-blown merit judgment,
which is yet more than exp. Daly requires on a judicial
review where the court has to decide a proportionality
issue." D

30. The respondent-allottees have concurred with the
fact that the appellant-Board has the right to re-determine
the final cost price of the plots allotted on the basis of the
escalation of rates with regard to both the land as well as E
the building materials used for the construction of the
buildings of the allotted plots in favour of the respondent-
allottees. However, while exercising that power their decision
in determining the final price of the property must pass the
test of reasonableness and fairness which are the cardinal F
principles of law as enunciated by this Court in the catena of
cases referred to supra upon which the learned senior
counsel for the respondents has placed strong reliance in
support of his contention that the determination of the final
price of the allotted plot which has been done on the basis G
of the Collector's guidelines, for the financial year 2011-12,
was fixed at Rs.30,000/- per sq. mtr. as per the Circular
No.1842, dated 30.9.2008 which is arbitrary, unreasonable
and unfair.
H
882 SUPREME COURT REPORTS (2015) 6 S.C.R.

A 31. We have in the earlier paragraphs held that the
appellant-Board is entitled to fix the final cost of the land
and the same is legal and valid. We however, agree with the
learned senior counsel for the respondent-allottees that the
same has been done arbitrarily, unreasonably, unfairly and
B without applying the principle of the doctrine of proportionality.
The determination for the final price of the plots allotted to
the allottees must be on the basis of the appellant-Board
Rules read with the relevant aspects namely, the Collector's
Guidelines, the Act, 1972 and the Rules, 1991, for the
C purpose of determination of the market value of the land. A
statutory duty is cast upon the appellant-Board which is
governed by the provisions of the Act and Rules and the
appellant-Board being the statutory Board is amenable to
Article 14 of the Constitution of India. The determination of
0
the final cost of the land in dispute must be in consonance
with the doctrine of proportionality but not on the basis of
the market price, i.e. fixed by the Committee for the
determination of guidance value of the immovable property
E in the District which would be arbitrary, unreasonable and
unfair.

32. As could be seen from the letter dated 18.6.2009,
by the officers of the appellant-Board addressed to Mr. B.S.S.
F Parihar and Mrs. Raina Singh that as per the advertisement
published by the appellant-Board, the estimated cost of the
House of HIG was Rs.40 lakhs and in view of the approved
minimum bid rates, the costs of the aforesaid type of houses
were likely to increase by Rs.9.53 lakhs and therefo~e. the
G consent or dissent of the allottees for the enhanced estimated
cost for the land was sought for, as the same was necessary
before the allotment of land. The said value is for ttie final
determination of the revised estimated cost of house which
is taken into consideration by applying the Collector's
H
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 883
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

guidelines, the same will be arbitrary and unreasonable. A
Therefore, the doctrine of proportionality must come into play
for the determination of the final price of the allotted plot,
keeping in view the relevant factors namely, the escalation
of the cost of the building materials and the cost of land
which are re-determined as the land is acquired by the State B
Government in favour of the appellant-Board and the State
Government will have to pay the enhanced compensation
of the land to the land owners. The relevant factor to be
borne in mind for the purpose of re-determination of the cost
of the land is that the relevant period from the date of c
advertisement in the year 2007 to 2010 should be taken into
consideration.

33. The demand made by the appellant-Board from
the allottees after the cost of the land was determined at D
Rs.30,000/- per sq. mtr. is near about double the cost of the
developed plots for the Duplex and Triplex houses which
were earlier fixed at Rs.16,500/- as per the Rules of the
Board. There is no justification on the part of the appellant-
Board to fix the price of the land at Rs.30,000/- per sq. mtr. E
and placing the said demand on the constructed HIG houses,
from the respondent-allottees would be most unreasonable
and unfair. Therefore, this Court has tried to maintain the
balance between the figure Rs.16,500/- per sq. mtr. fixed in F
relation to the cost of the developed plot by the appellant-
Board, as per the Board Rules and Rs.30,000/- per sq. mtr.
fixed on the basis of the Collector's guidelines for the financial
year 2011-12. It would be just and proper to take into
consideration the cost of the developed plots at Rs.16,500/ G
- per sq. mtr. and take the escalation at the rate of 10% for
every year from 2007 to 2011 and ask the respondent-
allottees to pay simple interest on the said sum which would
do complete justice to both the parties. The same would be
H
884 SUPREME COURT REPORTS (2015] 6 S.C.R.

A in conformity with the doctrine of proportionality and it will
pass the test of reasonableness and fairness.

34. For the aforesaid reasons, we partly accept the
submissions made on behalf of the appellant-Board as well
B as the submission made on behalf of the respondent-
allottees, particularly, the submission made by Dr. Rajeev
Dhawan on the principle of doctrine of proportionality, and
applying the constitutional principles of reasonableness and
fairness in fixing the cost of the developed plots allotted in
C favour of the respondent-allottees. Therefore, to that extent
his submission is well founded and the same must be
accepted as it is in conformity with the law enunciated by
this Court in the catena of cases upon which he has rightly
placed reliance. Therefore, to that extent, we have to modify
D the impugned judgment of the Division Bench of the High
Court. We accordingly pass the following order :-

I. The appeals are partly allowed and the impugned
judgment and order of the Division Bench of the
E High Court is set aside.

11. We modify the demand notice served upon the
respondent-allottees and fix the cost of the
developed plots for the year 2009 at Rs.16,500/-
F The same may be revised by adding 10% to the
provisional cost every year upto the date of the
demand made upon the said amount which is
payable by the respondent-allottees. The interest
at the rate of 9% per annum may be added on
G such enhanced revised value amount from the
date of demand till the date of payment in
modification of the demands to the aforesaid
extent from the respondent-allottees.

H 111. The orders dated 24.11.2014 granting stay in C.A.
M. P. HOUSING & INFRASTRUCTURE DEV. BOARD v. 885
B. S. S. PARIHAR [V. GOPALA GOWDA, J.]

No. 1801 of 2015 and the order dated 16.1.2015 A
granting stay in C.A. Nos. 1802-1803 of 2015 shall
stand vacated. The applications for direction in
C.A. Nos. 1802-1803 of 2015 are disposed of.

Kalpana K. Tripathy Appeals partly allowed. B