Holding

The Court held that the surcharge was within the DDA’s statutory and delegated authority, did not constitute unlawful discrimination, and the writ petitions under Article 32 were not maintainable; therefore the petitions were dismissed.

Summary

The petitioners, allottees of Middle‑Income Group flats constructed by the Delhi Development Authority (DDA), challenged the levy of a surcharge added to the purchase price, alleging it violated Article 14’s equality clause and the DDA’s statutory ‘no‑profit‑no‑loss’ policy. They also contended that the Supreme Court could not entertain their writ under Article 32 because it sought to reopen a concluded contract. The Court examined whether the DDA, under the Delhi Development Authority Act, 1957 and its regulations, had the statutory power to fix disposal prices and to include a surcharge, and whether the Vice‑Chairman’s delegation of such power was valid. It held that price fixation is an executive function with wide discretion, that the surcharge was authorised by the Vice‑Chairman under the delegated powers, and that the ‘no‑profit‑no‑loss’ principle did not impose a statutory formula. Consequently, the levy was not discriminatory, the petitioners were not entitled to relief, and the writ petitions were dismissed as not maintainable under Article 32.

Issues considered

Whether the levy of a surcharge on MIG flats by the DDA violates Article 14 of the Constitution.
Whether the petitioners can invoke Article 32 to reopen a completed contract and obtain a refund of the surcharge.
Whether the DDA, under the Delhi Development Authority Act, 1957 and its regulations, has the authority to fix disposal prices and include a surcharge.
Whether the Vice‑Chairman possessed the delegated power to approve the surcharge as part of the disposal price.
Whether the ‘no‑profit‑no‑loss’ policy creates a statutory obligation on the DDA to sell flats at cost price.

Legislation cited

Delhi Development Authority Act, 1957s. 3(3)(b), s. 52, s. 57, s. 58, s. 59

Subjects

Article 14Article 32Delhi Development AuthoritySurchargeNo‑profit‑no‑lossPrice fixationDiscriminationHousing schemeStatutory authorityContract re‑opening

Judgment

704

A PREMJI BHAI PARMAR & OTHERS ETC.
v.
DELHI DEVELOPMENT AUTHORITY & OTHERS
December 21, 1979
[V. R. KRISHNA IYER AND D. A. DESAI, JJ.]
B
Constitution of India 1950 Artic.'es 14 & 32 & Delhi De~'elop1nent Autlwrity
Act 1957-Authority cunstr11cting flats and selling thc111 to public-Levy and
collection of surcharge as, price of fiat in addition to the construction cost-
Authority to work on 'no p1ofit no loss' basis-Such surcharge-Whether illegal
-Dijcritninatory.

c The Delhi Development .-\uthority Act was enacted to provide for the deve-
lopment of IJelhi through ?\faster and Zonal Plans. 'the authority un4ertakes
constructions of d'welling units for peopl'e belonging to different income groups
styled as Middle Income, Lovv Income, Jaoa1.a and Ccmn1unity Personnel Service.
In 1971, the authority '.:Ornmenced registration of intending applicants desirous
of having dwelling units in d:ffere;nt Incom'e- Groups. Some of the petitioners
got themselves registered with the authority in accordance with the terms and
D condition~ laid down by it, for allotment of flats in deposits as required hy the
terms and cond.itions for ~tIG Scheme at Lawrence Road, Prasad Na_Pdr and
Rajouri Garden .and made the initial deposit. Th~ number of available flats be-
ing less in each scheme compared to the number of applicants registered, lots
Were drawn and the petitioners were i1;1formcd that each of them should deposit
the amourrt mentioned in the letter of allotment. The Petitioners paid the
amount a3 intimated and Consequently a flat was aUotted to each of them and
E they entered into possession.

Jn their \Vrit petitions under Article 32, the petitioners assailed the levy and
collection of surcharge in zddition to the cost price of the flats. It was con-
tended on th'eir behalf that; (i) The treatment meted by the Authority is discri-
minatory inasmuch as no surch:_:irge was levied on flats in Ml(J schemes cons-
tructed and allotted plior to November. 1976 and after January, 1977; (ii) As
the authority f0r1nulates income-wise, area-wise schemes for constructing fiats,
F
there 8hould be only income-wise classification wholly ignoring area and time
factor for classification; (iii) Levying of surcharge runs counter to the object
for which th'e authority was set-up namely to make available housing accom-
n1odation on "no profit no loss" basis; (iv) Surcharge is arbitrary inasmuch as
how the surcharge i;;; worked out in each case does not conform to any rational, •
t&ngible, sch::ntifi\.' or understandable formula; (v) The Vice-Chairrnan bad no
authority to levy surcharge and that even if he has authorised the same, it runs
G ccuntcr to the principle of fixing disposal price incorporated in resolution No. 209
dated Nov'ember 26, 1974; (vi) Even if the Vice-Chairman had such power there
is nothing to show that he has exercised this power and given direction for adding
the surcharge to the disposal price and that therefore, the levy of surcharge is
unauthorised; and (vii) that the nuthority has mad'e a. huge profit by levy of
surcharge.

H The respondents raised a preliminary objection that the petitions were not
maintainable under Article 32 of the Constitution inasmuch&<> the petitioners have
not come to lhe Court for enforcement of a fundamental right conferred upon.
P. B. PARMAR V. DELHI DEVELOPMENT AUTHORITY 705

them under P&t Ill of the Constitution but that the petition'ers have invoked the A
jurisdicion of the Court for the t'elief of reopening concluded contracts, and
that if the court accepts the contentions, the petitioners would deriv'e an unfair
ad'vantage ovt'r ethers who may not have applied for fiats because of the price
set out in the brochur'e· and if surcharge is excluded they may have applied for
!lats at a lov.:er price. The Court should not therefore entertain the petitions.

Dismissing the petitions, B

• HELD : I. 1\s the Court has heard the petitions on m<;;rits it is not inclined
to 1eject then1 on the prdiminary objections. _It is undeniable that can1ouflage of

\I )
;\rt. 14 cannot conceal the re<1l purpose motivating the petitions, na1nely to get
back a part of the purchase price of flats paid by the· petitioners with wide open
eyes after flat'\ have been St'curely obt<i.ined. Petition to this Court under Art. 32
i~ not a proper rente<ly nor is the Supren1e Court a. proper forum for re-opening c
concluded cJ:1tracts with a view to getting back a part cf the purchase price paid
after the benefit is iaktn. [112 l)-E]

I11 the instant case it is difiicult to appreciate ho\.V Art. 14 can be altractctl.
Cost price of a property offer'ed for SrJe is determined according to the volition
of the owr..er who h8'> constructed the property unless it is shown that he is. under
any statutor~' obligati:Jn to determine cost price according to certain statutory D
fu1n1uJa. The authority is under no obligation to fix price of diil'erent flats in
different schemes albeit in the s'1me income group at the same level or by any
particular statutory or binding formulrJ. Those who opt to take flats in a parti-
cular income-wise, ar'..::a-wise scheme in which all flats came up together as one
project, may forn1 a 'Class and any discrsillinatory treatn1ent in the same class may
• attract Art. 14. But to say that the Authority would be bound to oif'er flats
income-group-wise according to the same price formula is to expect the Authority E
to ignore time, situation, location and other releva•nt factors which all enter the
price structure. [713 F, 715 A-F]

Radhakrishna Agarwal & Ors. v. State of Bi/1ar & Ors. [1977j 3 S.C.R. 249
at 255; Har Slwnkar & Ors. etc. etc. v. The Dy. Excise & Taxation Com1nr. &
Ors, [1975] 3 S.C.R. 254, referred to.
F
2. In price fixation cxt·cutivc has a wide discretion and is only answerable
provid'ed there is any statutory control over itS policy of price fixation and it is
not the function of the Court to sit in judgment over such mattero; of econon1ic
policy as must be necessarily left to the Government of the day to decide. The
exi:erts alone can \<;Ork 011t the n1echanics of price determination, Court can cer·
tainly not be expected to decide without the assistance of the experts. [715 F-G]
G
Priig lee & Oil Mills and A11r. etc. v. Union of India, [19781 3 S.C.R. 293 at
330; Avindcr Singh v. State of Punjab [1979] 1 S.C.R. 845~ State of Gujarat &
another· Sln"i A111bicn ~.fills Lui .. Ahmedabad, etc., f1974] ~ S.C.R 760 at 782;
rrferrcd LO.

3. Price of land, building, material, labour charges and cost of transpcrt,
quality and availability of land, supervision and management charges are all
H
• variable factors that eni·~r into price fix6.•tion. Their cost varies time-wise, place"
wi~ and aYailabilitv-wisl'. A.11 these uncertain factors cannot be overlooked for
ii e rnrpose of cla<;5ifirati<1n. It i-: not possible therefore to hold that allottees of
786 SUPREME COUU REPORTS [1980] 2 S.C.R.

A fiats in MlG sche1ne a~ any place and executed at any time will form one class
for the purpose of pricing policy. The only valid basis for cla:>sification would
be income-wise, area-wise, time-wise, scherne-\vise, meaning 2.11 flats con5tructed t
at or about the same time in same area in one project for particular income-group
vvill fo1m a class. nnd there is no discrimination a1nongst them. [716 G-H_. 717
A-B]
4. Pricing policy is ;:;n executive policy. Jf the :\uthority \\:ls set up for
B making available dweJling units at reason<>bie prices to person·; belonging to
different groups it would not be precluded from devising its 'J\'.:n price formula
for different income-groups. If in so doing it uniformally collects something
more than cost price from tho<;e· with cushion to benefit tilos'c who are less fortu·
nate it cannot be accused of discrimination. In this country \Vhere weaker and _,.
poorer sections are unabl'e to enjoy the basic necessities, namely, food', shelter and
clothing, a body like the ,\nthority undertaking a comprehensiYe policy of pro- '
c viding shelter to those who cannot afford to have the same in the competitive
alho"t harsh niarket of dcn1and and supply nor can aJToTl it on their own meagre
en1oluments or incon1e, a little more from those \Vho can afford for the benefit of
those \Vho need ~nccour, crin by no strckh of in1agination attract Art. 14. [717
B-D]
5. It is a well recognised policy underlying tax law that the State has a wide
D discretion in selecting the persons or objects it will tax and that the statute is
not open to attack on the ground that it taxes 5on1c persons or objects and not
others. It is only when within the range or its selection the Ja\v operates un-
equally, and this cannot be justified on the basis of a valid classification, that
there would be ai violation of Art. 14. [717 E-F]
...
East India Tobacco Co. v. State of Andhi"a Pradesh, [1963] 1 S.C.R. 404.
•
E 6. The principle of "no profit no loss" c<?.nnot apply either to every fiat or to
cvc1y schcnie or to every 1•icce of land devel0pcd by the 1\uthority. It would
be impossible for the Authority to function on such fragmented basi3 v.nd such
a po!icy statement has not been made by the Authority. [718 D-El
7. 1·hcre is not the f>lightest or e\'en a remote reference to "no profit no Joss" )
formula for determining the cost price. A survey of the Regulations do not spell
out any formula for price determination on the basis of "no profit no loss".
F Proj~t-wise price fixation cannot b'e dubbed as arbitrary or djscriminatory by
comparing it with other projects at different places or at different times. [719
A-B & E-F]
In the instant case after the work commenced and the actual cost estimate
started coming in t:he revised estimate for 304 fiats was of the order of •
Rs. 2,07,33,000/- which was approved by the Vice-Chairman on Septen1ber 18,
1976. According to the revised estimate the approximate disposal cost for each
G flat rame tc Rs. 68.202/- and. the cost of laond per d¥lelling unit was Rs. 7008/-.
The revised estimate s110,ved the disposal price of each flat as Rs. 75.200/-. The
Commissioner of Income Tax \\·ho wanted to acquire 40 1flG flats in Prasad
Nagar area offered the price of Rs. 75.000/- per flat which prlce was accepted.
The difference between the cost price and th~ dispo.~al price of Rs. 75,000/- per
Jlat \Vas treated as snrchargc and the purpose ,·vas to use the- extra n1oney for
extending pnc'e reduction benefit to the allottees of flats in LlG, Jana.ta and CPS
H schen1es. It is therefore difficult to entertain the contention that even if surch&rge
could be justifi'ed its actual computation is arbitrary and irrational. [720 B-E,
E-FJ
P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY 707

8 . The Vice-Chairman is appointed by the Central Government as per Section A
' 3 (3 )(b) of the Act. He is a whole time officer and the Chief Executive of the
.( Authority. The contposition of the Authority as set out in section 3 would
include su•.::h persons as Finance and Accounts Member, Engine'ering Member.
representatives of Municipal Corporation of Delhi a.nd representatives of Metro-
politan Coun~il. Three other persons, were to be nominated by Central Govern-
ment of whom one shall be person with experience of planning. It is a high
power body. Yet it completely abdicated its power and authority .i.n favour of B
!lousing Comm!ttee. The !--lousing Committee \Vil! practivally <iUpplant the
Authority. By n pro;.:css of eli1nination the Hou5ing Co1nmittee 'vould ~up
phint the l\utho1ity r,·nd the Chairn1an could constitute the I-lousing Cornn1:ttee.
ThercfC1re, the Chairman enjoyed a very wide discretionary power. Ho\\1evcr
once tlle _pcwcr to delegate is given by the Regulations. the ,_;hall'cnge to V<llidity
on the ground of dcie.'.,.'.:1tion nuist fClil. [720 G-H; 721 E-H, 722 A1
9. Resolution No. 209 is the one adopted by the Housing Conuni.ttc:. It c
takes note of the delegation of' powers to fix disp05al and hire-purchase price of
flats to the Vice-Chui1Taan :1nd further provides that if there is a marginal saving
in any scheme th'e amount b~ diverted to subsidise cost of Janata and CPS houses.
The Resolution No. 200 of the A.uthority read with Resolution. No. 209 of the
Housing Cor:,n1ith:e sets out c:learly that the. power to fix the tlisposal price was
de!egated to th~ Vic';:-Chainruin and ordinarily such excessive delegation to one
n1an Dl<'•Y b~ galling to a judicial body yet the scheinc of regulations and the
D
provisions containe:l in Regulation 3 read with Section 59 clearly envi.;nge~ such

. )
delegation of prJwcrs. [72:. C-F1

iO. The: n1ltc of .'.cco11nts 0111,,.'er I Housing) dated September S, 197(), ~.ub
rnitted to the Finan·~i'.il .'\dvisur (f-fou<iing) sho"'t3 that the fiats have been offered
at the rate of R~. 75,()(}()/- to the Con1n1is.sion'..::r of Income Tax for th~ Income
Tax Department :;nJ th:it sh0uld be the disposcJ price. This note \vas approveJ E
• by the Financial Advisor (H0u~i11g) and ultimately countersigned by th;;: \'icc-
Chnirfll<lfl. !~ver. if it includes snr-ch:1rge it cannot be .-;a:U \Vitll conridenc.::- th<tt the
Vice-Chairn1an has not &pproved the surcharge as a component of dispo~al price.
[722 G-H]

1 l. The contention th~1t tht' Authority has mc1dc a hu;e p o'.'1t by lc\y of
~q;r.:h;lff'C is \vithout
nierits. e;,,
1 hC' contniry it arpears that the OYerall working
F
of the J\uthority is dcfilit rithkn. [723 A.-BJ
• ORIGINAL JURISDICTION : Writ Petitions Nos. 4660/78 & 562/79
(Under Article 32 of the Constitution).
Y. S. Chita/f and R. R. Datar for the Petitioner in W.P. No.
4660/76.
G
L. M. Sing!!l"i. Sardar B"hudur Sahariya, Vishnu Bahadur Sahariya
antl L. K. Pm;dey for the Respondent No. 1 in both the Writ Petiticns.
F. S. NarimaJZ and B. Datta and K. K. Manchanda for the Petition-
er in W.P. No. 562/79.
The Judgment of the Court was delivered by
H
DESAI, J. Allottees of fiats, constructed by the Delhi Develop·
men; Authority ('Authority' for short), loca'ed at Rajouri Garden,
708 SUPREME COURT REPORTS [19HJ1 2 S.C.R.

A Prasad Nagar and Lawrence Road comprised in Middle Income
G10,1p scl,"me, question the decision of first respondent (De;hi
I ,
Devclopmen: Authority) to collect surcharge as part of the sale price
of eoch flat from each of :hem as unautho,-ised ahtl discriminatory in
character, in thc•se two petitions under Article 32 of th•c Constitution. '
B
_Both the petitions raise idcn'.ical contenLic.as and i_· was said that ,~Vrit
Petiti0n No. 562 o[ 1979 is more cornrrehcnsive in cb~~ractcr and,
"~-

therefore, the facts alieged therein may \Jc taken as representative i'n
character. They may be briefly s'.ated.

Delhi Development Authority was set up under the Delhi Develop-
ment Act, 1957. The Act was enac~:ed to provide for the develop-
c ment of Delhi according to plan and for matters ancillary thereto and /
for carrying ou: the objects underlyrng the Act, the Authority has '
prepared Master and Zonal development p'.ans for Delhi. W1tb a
view to easing the acute housing problems in the capital city the
Authority undertakes construction of dwelling units for people belong-
ing to different income groups s"yled as Middle Income Group ('MIG'
D for short), Low Income Group ('LIG' for short), Janta and Commu-
nity Personnel Service ('CPS' for short). In 1971 the Authority
commenced registration of intending applicants desirous of having a
dwelling unit in different income groups. Some of the peti"ioners got
,•
themselves registered with the authority in accordance with the terms •
E and conditions laid down by it and made the initial deposits as requir- "
ed by 1he terms and conditions. Petitioners had applied and got •
themselves registered for al'.otment of flats in MIG scheme situated
at La\\Tcnoe Road. As the number of available flats in this scheme
were less than the number of allot:ees registered, lots were drawn and
the pe"itioncrs were informed that they have been allotted flats and
F' that each of them should deposit the amount men'ioned in the letter
,J-
of allotment. It appears that the peti' ionors paid the amount they
were called upon to pay and a flat was allotted to each of them &nd
they have entered into possession. Petitioners now contend that the
Authority being a statutory body formed with a'n object of working
on 'no profit no loss' basis and having prescribed a formula for work-
G in~ out the cost price of flats has ~evied and collec~od a surcharge
from each of the petitioner. According to the petitioners the cost
price worked out in accordance with the formula prescribod by the
Authority, cost of each flat would be between Rs. 51,800 and
Rs. 55.600 dependinQ upon rhe area. extra bolconv etc. However,
each one of them had to pay between Rs. 56.000 to Rs. 60.000
H and that according to" the petitioners a surcharge varying from
Rs. 3.'100 to Rs. 6.000 for a flat has been illeoal\y and unla wfulJy
collected by way of premium or profit. It is further alleged that the
, P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 709

• Autl101ity has not levied and collected such surcharg;~ from other A
allottcees of fia's in some other MIG Schemes and that this action of
levying and co;lecting surcharge is violative of Art. 14 inasmuch as
persons belonging to the same class. namely, allottees of fiats in MIG
scheme have been unequally treated. It is also alleged that there
• was no valid or understandable justification of levying and collecting
surchar~e as price cf fiats compr18ed in MIG Schemes, between 19 76 B
and 1977, and that from May 10, 1978, this unauthorised surcharge
has been abolished. Petitioners also contend that th~ assertion cf
the Authority lhat ·this surcharge was levied and col:ected with a view
to financing housing projects for lower income groups, Janta and
CPS dwelling units so as to provide these weaker sections of the
society, houses at a price lower than cost price with a view to making c
them affordable by such members of the weaker sections of the society,
is mlkd by facts undisputed and that the whole attempt of the
Authority, in violation of its avowed policy, was to make profit by
levybg such illegal surcharge. The petitioners, therefore, prayed for
issue ol a writ or order or direction declaring the l·~vy of surcharge D
"s illegul and unconstitutional and for a direction for refund thereof
togNher with the interest at the ra'.e of 12% per annum from th~
' .. <late of levy and collection till the date of refund.
In the cognate petition the p~'.itioners are allottees of flats situatro
at Prasad Nagar and Rajouri Garden under MIG scheme and they
e-0mrl~in that in their case surcharge varies from Rs. 19,200 to E
Rs. 22,600.
Respondents to the petition are Delhi Development Authority, No.
1 am' Chairman and Vice-Chairman of the AuthorLy, Nos. 2 and 3
respectively. In Writ Petition No. 4660178 the Authority is respon-
dent 1 and Union of India, respondent 2. Petitions were mainly con- F
tested by and on behalf of the Authority.
The Delhi Development Act, 1957 ('Act' for short), was enacted
as its ll'ng title shows with the a vkw to providing for the deve:opm.:nt
of Dcln1 according .to the plan and for arresting haphazard growth
and for matters ancillary thereto. It envisages the set'.ing up of an G
Authority to be styled as Delhi Development Authority which would
h;, a buly corporate by the name aforesaid having perpetual succci;sioll
and a common seal with power 'o acquire, hold and dispose of pro-
perty. both movable and immovable, and to contract and shall by the
said name, sue and be sued. The composition of the Authority is
set out in sub-section (iii) of s. 3. Amongst others, Administrator H
of Union Territory of D~lhi would be an ex-officio Chairman and a
Vice-Chairman to be appointed by the Central Government. The
710 SUPREME COURT REPORTS (1%0] 2 S.C.R.

A Vice-Chairman may be either a who:e-time or part-time officer a> the •
Central Gover,;nment may think ftt. Section 5 contemplates the
constitution of an Advisory Conncil for the purpose of advising the
',
Authority on the preparation of the master plan and on such matters
relating to the planning of development or arising out of or in connec-
tion with the administration of :he Act. Section 5A which was
B added by am~nding Act 56 of 1963 confers power on the Authority
to constitute as many committees con,isting wholly of members or
wholly of other persons or partly of membens and parly of other
persons and for such purpose or purposes as it may think fit. Chapter
III-A which was inserted by the Amending Act of 1963 confern power
for moJification of the master phfn once prepared. Chapter JV
c providog for development of lands. Chapter V confers power on the
Central Government to acq uirc land (or the purposes of development
or for any other purpose under the Act under the provisions ot tho
Land Acquisition Act, I 894, and further authorises the LtUtral
Governmeht to transfer the :and so acquired to he Authority. Chapc·er
VI provides for finances and audit of the accounts of the Authority.
ll
Ch8pter VII provides for supplemental and miscellaneous provisions.
Section 52 confers power on the Au:hority to delega:e any power
exercisable by it under the Act, except the power to make regulations,
on such officer or local authority or committee constitucd under s.
SA as may be mentiohe<l, by a notifica:ion to be published in the .
Official Gazette in such cases and subject to such conditions, if any,
as may be specified therein. One mar·~ section of which notice should
be taken is s. 57 which confers power on the Authority with th:
prc;•ious approval of the Central Governmen: by notification m the
Oflicial Gazette to make regulations consistent with the Act and the
rules made thereunder to carry out the purposes of this Act. Sub-s.
F (2) provides that until the Authority is established under the Act any
regulation which may be made under sub-s. (1) may be made by
the Central Government and any regulation so made may be altered
or rcsc•nded by the Authority in exercise ol its powers under ,ub-s.
(1). Sec'. ion 58 makes it obligatory to lay every rul•c and regulation
made under this Act before each I-louse of Parliame'nt in session f0r
G a period of 30 days and subjcc- to any alteration or modificuuon
therein, the rule or regulation shall after expiry of the prescnbed
pcricod mentioned have e!Iect only i·n such modified form or be of no
effect as the case may be. so however that any such modification or
an11ulm2nt shall be without prejudice to the validity of any;hing pre-
viously cto·ne under the rule or regulation.
H
Petitioners belong to MIG, each of whom registered himself as an·
intendbg app:ican'. for a flat in MIG scheme and each of whom h"~
• P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 7 11

been allotted a flat either in Rajouri Garden, Prasad Nagar or A
Lawrence Road. Number of persons desirous of having a flat regis-
tered with the Authority far outnumbered the available flats with the
result that lots had to be drawn and the lucky Gile• got a letter of
allotment to pay the price set out in the brochure in respect of each
scheme and to obtain a flat. Each petitioner had paid the price and
B
has entered into possession of the allotted fla:t. All the petitioners
now contend that the Authority has levied and collected a surcharge as
part of purchase price of flat arbitrarily and without the authority of
law and has collected the same from them in vio:ation of its object
of functioning on 'no profit no loss' basis and thereby made a huge
profit. They further contend that they have been subjected to dis- c
crimh;atory treatment in contravention of Art. 14 of the Constitution
inasmuch as no surcharge has been collected from allottees of flats in
MIG schemes prior to November 1976 and subs•:quent to January
1977 except these three schemes and one Wazirpur MIG scheme.
Further, no other MIG scheme fiats have been subjected to such un-
authorised levy ol' surcharge. It is pointed out that the levy of sur- D
charge has been scrapped in 1978. The petitioners contend that levy
of surcharge has no n:xus to the object for which the Au'hority was
set up, namely, providing housing accommodation at reasonable price
by the Authority whose declared policy is 'no profit nu luss'. It was
said on behalf of the petitioners that even if :b: Authority was set
up for providing housing accommodation to the people in dillercnt E
income groups (keeping in view their financial capacity/affordab1lity J
yet a statutory body like the Authority operating on 'no profit rm loss'
bas:s must have a scientifically prescribed formula for working out
its price structure and that must be uniformly applied to all those who
apply for flats and to whom they are allotted and such a statutory
F
Authority cannot discriminate in working out the disposal price of the
flats by including surchar19;, in respect of some MIG schemes within
a certain specified period, a surcharge not authorised by law and not
sanctioned by the Authority as a component of price and unknown to
pricing of fiats, while others similarly situated and similarly circum-
stanced and belonging to the same income group enjoyed the benefit G
of getting flats at cost price and, therefore, pe!itioners have been ac-
corded discriminatory treatment in th;, matter of price of flats allotted
to them. Petitioners, therefore, contend that even if they applied for
flats and got registered and were offered fiats and accepted the same at
the price stated in the brochure and even if it has resulted in a con-
cluded contract yet the Court should not turn a blind eye to such gross H
discrimination by a statutory authority charged with a duty to provide
housing accommodation a~ting on the declared policy of 'no profit no
8-91SCI[80
71 2 SUPREME COURT REPORTS [l\loO] 2 S.C.R.

A Joss'. lt was simul:aneously co·ntended that the Vice-Chairman of
the Authority authorised to determine the prices of flats in each incom<:
group has not made any order or has not given any direction for levy- ••
ing surcharge and that the levy of surcharge was wholly unauthori>ed.

A preliminary objection was raised by the Authority that the peti-
B tions are not maintai·nable under Art. 32 of the Constitution inasmuch
as the petitioners hav•2 not come to the Court for enforcement of a
fundamental right con(erred upon tbe petitioners under Part III of the
Constitution but the petitioners have invoked jurisdiction of this. C::ourt
for ~ relief of re-opening concluded contracts. It was also submitted
that if the Court accepts the contention of the petitioners they would
C derive an unf"ir advantage over others who may not have applied for \ ./
flats because of the price set out in the brochure and if surcharge is
exc:uded they may have applied for flats at a lower price and, there-
fore, also the Court should not entertain the petitions.

Though we are not inclined to reject the petitio"ns on this pre-
D liminary objection as we have heard them on merits it is undeniable
that camouflage of Art. 14 cannot conceal tbc real purpose motivating
these petitions, namely, to get back a part of the purchase price of
flats paicl by the petitioners with wide open eyes after flats have been
securely obtained and petitio·n to this Court under Art. 32 is not a
proper remedy nor is this Court a proper forum for re-opening the
E
<:oncluded contracts with a view to getting back a part of the purchase
price paid and the benefit taken. The undisputed facts are that peti-
tioners offered themselves for registration for allotment of flats thai
may be constructed by th2 Authority for MIG scheme. After the
registration and when the flats were constructed and ready for occupa-
F tion brochures were issued by the Authority. One such brochure for
allotment of MIG flats in Lawrence Road residential scheme is Ar-
nexure R-1. This brochure specifies the terms and conditions in-
cluding price on which flat will be offered. It also reserved the right
to smTendcr or cancel the registratio"n, the mode and method of pay-
ing the price and handing over the poosession. There is an applica-
G tion form annexed to the brochure. Annexure 'A' to the brochure
sets out the price of flat on the ground floor, first floor and second floor
respectively. It sets ont the premium amount payable for land as also
the total cost in respect of the flats ou the ground floor, first floor and
second floor. The statement also shows tho earnest money depooited
at the time of the registration and the balance payable. It is on the
H basis ot these. brochures that the applicants applied for the flats in
LawNnce Road and other MIG schemes. They knew and are pre-
sumed :o know the contents of the brochure and particularly the price
'l'. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 713

payable. They offered to purchase the fiats at the price on which th~ A
Authority offered to sell the same. After the lots were drawn and
they were lucky enough to be found eligible for allotment of flats, each
one of them paid the price set out in the brochure and took pos9ossion
of the fiat, and thus sale became complete. There is no suggestion
that there was a mis-statement or incorrect statement or .any fraudulent
concealme'nt in the information supplied in the brochure published B
by th.: Authority on the strength of which they applied and obtained
:flats. How the seller works out his price is a matter of his own choice
unless. it is subject to statutory control. Price of property is in the
realm of con!ract between a seller and buyer. There is no obligation
-on the purcha9er to purchase the flat at the price offered. Even after
registration the registered applicants may opt for other schemes. His
c
right to enter into--other scheme opting out of present offer is not
thereby jeopardised or negatived a-nd applicants so outnumbered the
available fiats that lots had to be drawn. With this background the
petitioners now contend that the Authority has collected surcharge as
component of price which the Authority was not authoris•ed or entitled
D
to collect. Even if there may be any merit in this contention, though
there is none, such a relief of refund cannot be the subject-matter of
a petition under Art. 32. And Art. 14 cannot camouflage the real
bnne of contention. Conceding for this submission that the Authority
has the trapplngs of a Stat•:: or would be comprehended in 'other
authority' for the purpose of Art. 12, while determining price of fiats E
constructed by it, it acts purely in its executive capacity and "is. bound
by the obligations which dealings of the State with the individual citi-
zens import into every tra:nsaction entered into the exercise of its
constitutional powers. Bui after the State or its agents have entered
into the field of ordinary contract, the relations are no longer governed
by th" Constitutional provisions but by the legally valid contract which F
determines rights and obligations of the parties iJtter se. No questio·n
arises of violation of Art. 14 or of any other constitutional provision
when the State or its agents, purporting to act within this field, per-
form any act. In this ~phere, thoy can only claim rights conferred
upon them by contract and are bound by the· terms of the contract
-only unless some statute steps in nnd confers some special statutorv G
power er obligation on the State in the contractual fold which is apai:t
from contract" (see Radhakrishna Aganval & Ors. v. State of Bihar &
Ors.) . ( l) Petitioners were under no obligation to seek allotment of
fiats even after th::y had registered themselves. They looked at the
price and flats and applied for the fiats. This they did voluntarily.
They were advised by the brochures to look at the flats before going H

(l) [1977] 3 S.C.R. 249 at 255.
714 SUPREME COURT REPORTS [1980j 2 S.C.R.

'A in for the same. They were lucky enough to get allotment when the·
lots were drawn. Each one of them was allotted a fiat and he paid
the price voluntarily. They are now trying to wriggle out by an in-
vidious method so as to get back a part of the purchase price not
offering to return the benefit under the contract, namely, surrender of
fiat. , The Authority in its affidavit in reply in terms stated that it is.
B willing to take back the fiats and to repay them the full price. The
transaction is complete, viz., possession of the fiat is taken and price
is paid. At a later stage when they are secure in possess.ion with title,
petitioners are trying to get back a part of the purchase price and thus
trying to re-open and wriggle out of a concluded cmrtract only partially.
In a similar and identical situation a Constitution Bench of this Court
c in Har Shankar & Ors. etc. etc. v. The Dy. Excise & Taxation Commr.
& Ors.(1) has observed that those who contract with open eyes must
accept the burdens of the contract along with its benefits. Reciprocal
rights mod obligations arising out of contract do not depend for their
enforceability upon whether a contracting party finds it prudent to
abide by the terms of the contract. By such a test no contract. would
D
ever have a binding force. The jurisdiction of this Court under Art.
32 of the Constitution is not intended to facilitate avoidance of ob!iga·
lions voluntarily incurred. It would thus appear that petitions ought
not to have b:~en entertained. However, as the petitions were heard
on merits, the contentions canvassed on behalf of the petitioners may
E as well be examined.

The principal contention canvassed on behalf of the petitioners is
that the treatment meted to them by the Authority is discriminatory
inasmuch as no surcharge was levied on fiats in MIG scheme coinstruct-
ed and allotted prior to November 1976 and after January 1977. MIG
F fiats involved in these petitions were constructed and were available
for allctment in November 1976 and the lots were drawn in January
1977. Theroo is one more MIG scheme at Munirka where the allot-
ment took place at or about the same time but in which case no sur-
.:harg~ was levied. The contention is that once for the purpose of
eligibility to acquire a fiat, the criterion is grounded in income
G brackets, MIG, LIG, et et. those in the same income bracket form
one class even for the purpose of determining disposal price of fiat
allotable to them irrespective of sitnation, location or other relevant
determinants which enter into price calculation and therefore, in the
same income group there cannot be differentiation by levying of sur-
charge in some cases and charging only the cost price in other cases
H and that the discrimination is thus writ large on the face of the record

(I) [1975J 3 s.c.R. 254.
•
P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 71 i;

'because by levying surcharge in case of petitioners they have been A
treated unequally and with an evil eye. It is difficult to appreciate how
Art. 14 can be attracted in the circumstances he1'.':inabove mentioned.
Cost price of a prope1ty offered for sale is determined according to
the voiition of the owner who has constructed the property unless it is
shown that he is under any statutory obligation to determine cost
price according to certain statutory formula. Except the submissim B
that the Authority has a proclaimed policy of constructing and offering
flats on 'no profit no loss' basis which according to Mr. Nariman has
a statutory flavour in the regulatiohs enacted under the Act, the
Au:hcrity is under no statutory obligation about its pricing policy of
the flats constructed by it. When the fiats were offered to the peti-
tioners the price in round figure in respect of each flat was mentiooed c
and surcharge was not separately set out and this price has been
acoopted by the petitioners. The obligation that regulations are binding
on the Authority and have provided for a statutory pric•o fixation
formula on 'no profit no loss' basis will be presently examined but save
this the Authority is under no obligation to fix price of different fiats
D
in diffcren\ schemes albeit in the same income group at the same level
or by a·ny particular statutory or binding formula. The Authority
having the trappings of a State might be covered by the expression
'other authority' in Art. 12 and would certainly be precluded from
according discriminatory treatment to persons offering to purchase fiats
in tbe same scheme. Those who opt to take flats in "' particular in- E
come-wise area-wise scheme in which all flats came up together as
one project, may form a class and any discriminatory treatment in the
same class may attract Art. 14. But to say that throughout its course
of existence tile Authority would be bound to offer fiats income-group-
wise according to the same price formula is to expect the Authority
to ignore time, situation, location and other relevant factors which all F
• enter the price structure. In price fixation eioecutive has a wide dis-
cretion and is only ahswerable provided there is any statutory control
over its policy of price fixation and it is not the function of the Court
to sit in judgment over such matters of economic policy as must be
necessarily left to the Gove(mnent of the day to decide. The experts
alone can work out the mechanics of price determi"nation; Court can G
certainly not be expected to decide without1 the assistance of the experts
(See Prag Ice & Oil Mills and Anr. etc. v. Union of India)(') In the
leading judgment it has been observed that mechanics qf price fixation
have necessarily to be left to the executive and unless it is pat·~nt that
there is hostile discrimination against a class the processual basis of
H
price fixation has to be accepted in the generality of cases as valid.
;
(!) [1978] 3 S.C.R. 293 at 330.
•
716 SUPREME COURT REPORTS [1980] 2 3.C.R.

~ A This Court in Avinder Singh v. State of Punjab.( 1 ) approved the
following dictum of Willis on Constitutional Law, page 587 :
"The State does not have to tax everything in order to
tax something. It is allowed to pick and choose districts,
objects, persons, methods and even rates for taxation if it
does so reasonably ... The Supreme Court has been practical
B and has permitted a very wide latitude in classification for
taxation."
What is forbidden by Art. 14 is discrimination amongst persons of
the same class and for the pnrposes of allotme'nt of flats scheme-wise,
c sllottecs of flats in the same scheme, not different schemes in the same
income bracket, will have to be treated as a class and unless in each
I
such class there is unequal treatment or unreasonable or arbitrary \_
treatment, the complaint that Art. 14 is violated cannot be entertained.
Therefore, in the State of Gujarat & Another v. Shri Ambica Mills Ltd.,
Ahmedabad, etc.,(') Mathew, J., speaking for the Court observed a$
D under :
"A ioeasonablc classification is one which includ·~s all who
are similarly situated and none who are not. The question
then is what does the phrase 'similarly situated' mean ? The
answer to the qu•estion is that we must look beyond the
classification to the purpose of the law. A reasonable
E classification is one which includes all persons who are
similarly situated with respect to the purpose of the law.
The purpose of a law may be either the elimination of a
public mischief or the achievement of some positive public
good."
F Is the classification income-wise scheme-wise violative of Art. 14
in any manner? The Authority formulates inconro-wise area-wise
schemes for constructing flats. Petitioners contend that there should
be only income-wise classification wholly ighoring area and time factor
for classification. They say that allottees of flats in all MIG schemes
irrespective of area and location and irrespective of when the flats
G were constructed form one class for determining price of flats. There
is no merit in this contention. Wha: are price determinahts ? Price
of land, building material, labour charges and cost of transport, quality
and availability of land, supervision and management chargos are alf
variable factors that enter into price fixation. Their cost varies ;ime-
wise, place-wise, availability-wise. All these uncertain factors cannot
H
(I) [1979] 1 S.C.R. 845.
(2) [1974] 3 S.C.R. 760 at 782.
~ P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 717

•• be overlooked for the purpose of classification. Therefor-<,, it is not A
possible to hold that allottees of flats in MIG scheme at any place and
executed at any time will form one class for the purpose of pricing
pvlicy. Only valid basis for classification would be income-wise, area-
wis-e, time-wise, scheme-wise, meaning all fla:ts constructed at or about
tbe same time in same area in one project for particular income-group
will form a class. And there is no discrimination amongst them. B

Pricing policy is an executive policy. If the Authority was set up
for making available dwelling units at reasonable prioc to persons
belonging to different rncome-groups it would not be precluded from
devising its own price formula for different income-groups. If in 30
doing it uniformally collects something more than cost price from
c
those with cushion to benefit those who are Jess fortunate it cannot be
accused of discrimination. In this country where weaker and poorer
sections are unable to enjoy the basic necessities, namely, food, shelter
and clothing, a body like the Authority undertaki'ng a comprehensive
policy of providing shelter to those who cannot afford to have the D
same in the competitive albeit harsh market of demand and supply
nor can afford it on their own meagre emoluments or income, a little
more from those who can afford for the benefit of those who need
succour, can _by no stretch of imagination attract Art. 14. People in
the MIG can be charg"d more than the actual coot price so as to give
benefit to allottees of flats in LIG, Janata and CPS. And yet record E
shows that those better off got flats comparatively cheaper to such
IJms in open market. It is a well recognis·od policy underlying tax Jaw
that the State has a wide discretion in selectin~ the persons or objects
it will tax and that the statute is 'not open to attack on the ground that
it tuxes some persons or objects and not others. It is only when within
the range of its selection the: Jaw operates unequally, and this cannot be F
ju>,ified on the basis of a valid classification, that there would be a
violation of Art. 14, (see East India Tobacco Co. v. State of A11dhra
Pradesh). ( 1 ) Can it be said that classification, income-wise-cum-
scheme-wise is unreasonable? The answer is a firm no. Even the
petilioners could not point out unequal treatment in same class. How-
ever, a feeble attempt was made to urge that allottees of flats in G
MlG schoome at Munirka which project came up at or about the same
time were uot subjected to surcharge. This will be presently examined
but aside from that, contention is that why within a particular period,
namely, November 1976 to January 1977 th•o policy of levying sur-
ch~rge was resorted to and that in MIG schemes pertaining to period
pnor to November 1976 and later April 1977 no surcharge was levied. H
t
(!) [1963] I S.C.R. 404.
71 8 SUPREME COURT REPORTS [1980] 2 S C.R. "

A If a ce11ain pricing policy was adopted for a certain period and was
uniformly applied to projects coming up during that period, it can-
no'. be the foundation for a submission why such policy was not
adopted earlier or abandoned later.
It was, however, said that J."vying of surcharge runs counter to
object for which the Authority was set up, namely, to make available
B housing accommodation on 'no profit no Joss' basis. The argument
proceeds o'n the assumption that the principle of 'no profit no loss'
implies that in re~pect of each fiat the cost of its construction musti
be worked out and that alone can be the disposal price of each fiat.
Principle of 'no profit no loss' bas been explained by the respondents.
c It is said that in tho over-al! working, planning and executio'n of pro-
jects which the Authority undertakes as part of development of Delhi,
the integral part of it being construction of fiats for different income-
groups the motives and working of it would not be profit oriented but
would work on 'no profit no loss' economic doctrine. This would
not for a moment suggest that the principle of 'no profit no Joss' should
D apply either to every fiat or to every scheme or to •overy piece of
land developed by the Authority. It would be impossible for the
Authority to function on such fragmented basis and such a policy
cta•emcnt has not been made by the Authority. Of course, som~
public statement appears to have been made that the overall working
of the Authority is on "no profit no Joss' basis. Respondent 1 has
E been able to point out that the Authority's housing scheme as a whole
has been running in a heavy deficit because fiats including such as
those of the petitioners actually cost much more than the initiaily
determined estimates and by the time fiats are ready for occupation
initial estimates founded o'n prevalent market prices of materials and
labour escalate and revised estimates have to be made. It is also
F shown that till Municipal authority .talo~s over municipal services the
Authority spends for the same and incurs cost. Apart from that
p~litioners have not been able to show that the Authority is actuated
by commercial profit oriented approach in its overall working.
It is, however, neoossary to examine the contention whether this
G "no profit no Joss' policy statement has any statutory flavour as con-
tended by Mr. Nariman. The regulations styled as the Delhi Develop-
ment Authority (Management and Disposal of Housing Estates)
Regulations, 1968, ('Regulations' for short) are f~amed in exercise
of the powers conferred by s. 57 and were laid before the Houses of
Parliament as required by s. 58. Disposal price has been defined in
H Regulation 2 (13) to mean in relation to a property such price as may
be fixed by the Authority for such property. There is not the slight-
est or even a remote reference to 'no profit no loss' formula for
'
• ~- B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, !.) 71 9

.' determini~g tho cost price. A quick survey of the Regulatio'ns do
not spell out any formula for price determination on the basis of 'no
A

profit no Joss'. Whether the power to determine disposal price is in
the Housing Commi:tee will bo presently examined. Regulations,
however, on the contrary indicate that the power to determine the
disposal price is vested in the Authority and as price has b"en fixed
by the delegate of the Authority even if it is inclusive of surcharge B
it cannot be said that it runs counter to the declared policy of the
Authority.
It is at this stage necessary to examine the contention that in the
,J ·case of Wazirpur and Munirka LIG schemes which came up during
this very period no surchar(lo was levied and, therefore, there is c
invidious discriminatio'n amongst members of the same class. Again
·the argument proceeds that income-wise classification alone is valid.
Here time-wise (November 1976 to January 1977) classification is
relied upon. It is an admitted position that no surcharge is levied
0n MIG fiats at Munirka. The affidavit. in reply shows that the land
-on which fiats are constructed in Mu'nirka MIG scheme turned out D
lo be very rocky with the result that the construction cost in respect
-Of fiats at .Munirka MIGs scheme worked out at Rs. 456 per plinth
area per metp;, whereas in respect of Lawrence Road it came to
Rs. 401.54 p. only. The Authority, therefore, thought that if sur-
-eharge is levied on fiats under MIG scheme in Munirka area the dis-
posal price would be very high and would be beyond the reach of E
MIG. It is in this background of the special facts that no surcharge
·~· was levied in respect of any fiat in MIG in Munirka area. Project-
wise price fixation cannot be dnbbed as arbitrary or discriminatory
in comparison with other projects at diffurent places.
It was, however, pointed out that 132 flats in Rajouri Garden F
MIG scheme were disposed of- without levying surcharge as compo-
nent of sale price. It is pointed out in affidavit in reply that these
flats were handed over to the Government of India for meeting their
needs for staff quarters and that was done in the year 1978. It is
~!so pointed out that the Government charged half the price of the
fand in respect of these 132 fiats and, therefore, surcharge was not G
levied. There is two-fold fallacy in this submission. Government
ordinarily is in a class by itself and its needs of staff quarters deserve
to be met in large public inters!. Government has not got any
undeserved benefit at the cost and risk of petitiomrs. Hence their
complaint in this behalf is without merits.
H
1 It was 'next contended tha: surcharge is arbitrary inasmuch as
how the surcharge is worked out in each case does not answer any
720 SUPRE1'1E CO.URT REPORTS [1980] 2 S.C.R.

rational, tangible, scientific er understandable formula. '"How th"
figure of surcharge has been worked out has been explain~d in detail
in. affidavit in reply. Briefly recapitulating the same, it may be
mentioned that initial estimates for 304 MIG flats i:n Prasad Nagar
area were prepared in or about 1971 and the estimated cost was
Rs. 1,17,83,200 and that on March 21, 1972, an estimate of
Rs. 1,09,97,100 was sanctioned. After the work commenced and
the actual cost started coming in the revised estimate for 304 flats
was of the order of Rs. 2.07,33,000 which was approved by the Vice-
Chairman on September 18, 1976. According to :he revised esti-
mate the approximate disposal cost for each flat came to Rs. 68,202
and the cost of land per dwdli"ng unit was Rs. 7,008. Extracts of
c original notes of Financial Adviser (Housing) and the approval of
the same by the Vice-Chairman have been set out in the affidavit in
reply. The subsequent r-"vised estimates show that disposal price of
each flat would be Rs. 75,200. In the meantime the Income Tax
Department wanted to acquire 40 MIG flats in Prasad Nagar area
a'nd the same w~re offered at the price of Rs. 75,000, per flat. Com-
D
missioner of Income Tax accepted the price. This became the start-
ing point for working out the disposal price in that period. The
difference h~tween the cost price and the disposal price of Rs. 75,000
per flat was treated as surcharge and the purpose was to use the extra
money for extending cost reduction benefit to the allottees of flats
E in LIG, Janata and CPS schemes. Affidavit in reply of the Secretary of
Respondent 1 provides further information which shows tha:t the cost
price would be Rs. 78,000. Therefore, at best the component of
surcharge would be between Rs. 1700 to Rs. 2200 in Rajouri Garden
MIG flats. Similarly, with ""gard to MIG flats at Lawrence Road the
actual cost price would be in close proximity of the disposal price·
F would be in close proximity of the disposal price charged from the
petitioners. It is, therefore, difficult to ent·~rtain the contention that
even if surcharge could be justified its actual computation is arbitrary
and irrational.
The next contention is that Vice-Chairman had no authority to
levy surcharge and that even if he has authorised the same it runs
G
counter to the principle of fixing disposal price incorporated in Reso-
lution No. 209 dated November 26, 1974. The Vice-Chairman is to
be appointed by the Central GoV'~rnment as per s. 3 (3) (b) of the
Act. It appears that this Vice-Chairman is whole-time offic•er and will
be the Chief Executive of the Authority. This becomes clear from
H regubt,lon 3 of the Regulations which provides as under :
"3. These regulations shall be administered by the Vice-
Chairman, snbject to general guidance and rcsolutio"ns of the
' P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 721

' Authority, who may delegate his powers to any officer of the A ..
Authority".

Thus the Vice-Chairman, subject to general guidance and resolutions
of the Authority, shall administer the regulations. He can delegate the
functions to any officer of the Authority. Regulation 59 is important
B
which reads as under:
"59. The Authority may delegate all or any of its powers
under these regulations to the Vice-Chairman or to a whole-
tirne men1~r".

Armed with this power of delegation the Authority adopted Resolu- C
tion No. 60 dated Febrnary 21, 1970 w'hich reads as under :

"Reoolved that the recommendations of the Committee
be approved and all the powers of Delhi Development
Authority be exercised by the Housing Committee and the
Chairman, Delhi Development Authority be authorised to
constitute the said committee, determine the organisational
set-up and take (sic) all efforts for implementing the housing
and allied schemesn.

Serious exception was taken to this gross abdication of its powers and
functions by the Authority. The composition of the Authority as set E
out in s. 3 would include such persons as Finance ahd Accounts

·"'.
Member, Engineering Member, representatives of Municipal Corpora-
tion of Delhi and representative.s of Metropolitan Council as and when
set up. Three o,ther persons were to be nominated by Central Govern-
ment of whom one shall be person with experience of planning. It is a
F
high power body. Yet it completely abdicated its power and authority
in favour of Housing Committee. The Housing Committee will practi-
cally supplant the Authority. But the more objectionable part of Reso-
lution No. 60 is that such Housing. Committee which is to enjoy all
pcwers and fu'nctions of the Authority was to be constituted by the
' Chairman at his sole discretion because he was authorised not only G
to constitute the Housing Committee but to determine organisationa~
set up and then make all efforts for implementing the hous-
ing and allied schemes. It is really difficn;t to appreciate sru:h
whole-sale abdication or d•clegation of powers by a :statutory authority
in favour of a Committee whose composition would be determined by
one man, the Chairma'n. By a process of elimination the
>
Housing Committee could supplant the Authority and the Chairman
could constitute Housing Committee. Therefore, the Chairman enjoyed
72 2 SUPREME COURT REPORTS [1980] 1 S.C.R.
A
a very ."".ide discretionary power. Though Mr. Nariman did challenge
the ~ahd1ty of R~solution No. 60, Mr. Chitaley in cognate petition
reframe~ from domg so. Once the power to delegate is given by the
Regulattons the challenge to validity on th~ ground of delegation must
fail.
·1l It is, however, necessary to examine the submission whether
Vice-Chairman could have permitted levy of surcharge as a component
of the price of flats in MIG schemes. In this connection it would be
advantageous to refer to Resolution No. 200 dated June 18, 1968, of
the Authority by which the recommendations of the Standing Com-
mittee, inter alia, empowerrng the Vice-Chairman to approve forms of
c application as well as to fix the disposal and hire-purchase price were
accepted. Resolution No. 209 is th~ one adopted by the Horning
Committee. It takes note of the delegation of powers to fix disposal
and hire-purchase price of flats to the Vice-Chairman and further
provides that if there is a marginal saving in any scheme the amount is
always diverted to subsidise cost of Janata and CPS houses. It seems
the Resolution is for rnformation of the Housing Committee and the
Housing Committee has merely resolved that the information be noted.
The Resolution No. 200 of 'the Authority with Resolution No. 209 of
the Housing Committee sets out clearly that the power to fix the dis-
posal price was delegated to the Vice-Chairman and ordinarily such
E excessive delegation to one man may be galling to a judicial body yet
the scheme of regulations and the provisions contained in Regulation 3
read with s. 59 clearly envisages such delgation of powers. It is,
therefore, idle to contend that the Vice-Chairman had no authority to
levy the surcharge as component of disposal price of flats.

'F It was next contended that even if Vice-Chairma'n had such power
there is nothing to show that he has exercised this power and that,
therefore, somewhere without any authority someone has added the
surcharge to the disposal price and that, therefore, the levy of sur-
charge is unauthorised. The submission seems to be factually incorrect.
The note of Accounts Officer (Housing) dated September 8, 1976,

--
submitted to the Financial Advisor (Housing) shows that the fiats
have been offered at the rate of Rs. 75,000 to th~ Commissioner of
Income Tax for the Income Tax Department nnd that should be the
disposal price. This note was approved by the Financial · Advisor
(Housing) and ultimately countersigned by the Vice-Chairman. There-
fore, the price of Rs. 75,000 as the disposal price is approved by the
Vice-Chairman. Even if it includes surcharge it cannot be said with
confidence that the Vice-Chairma'n has not approved the surcharge as
a compr:nent of disposal price.
P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 723

The last contention is that the Anthority has made a huge profit A
. ;
by levy of surcharge. In this connection statistical table was annexed to
the petition and there was serious controversy about the facts and
figures set out therein, by the other side. Having gone through the
, detailed ·affidavit in reply it transpires that the contention is without
'" merits. Therefore, there is no substance in the contention that the
Authority has made a huge profit. On the contrary it appears that the B.
overall working of the Authority is deficit ridden.
These were all the contentions in these petitions and as there is
no merit in any of them the petitions are dismissed. There will be no
order as to cost.
c
Petitions dismissed.
N. K. A

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