JUDGMENT Pradeep Kant and Rajiv Sharma, JJ.
1. This petition of the year 1989 challenges the demand of enhanced amount towards the price of the house allotted to the petitioner by the Avas Evam Vikas Parishad, hereinafter referred to as the Parishad.
2. The U.P. Awas Evam Vikas Parishad, a body created under the provisions of the U.P. Avas Evam Vikas Parishad Adhiniyam, floated a scheme Own a house under self-financing Scheme in October, 1984. The registration book-let provided types of houses, area of the land, plinth area, estimated cost of the house and the registration fee for Type-IV houses, the cost of which house is the subject matter of consideration in the present writ petition. Type-IV house was to have an area of land of 108.50 metres, out of which built-up area was 40.40 metres and estimated cost was Rs. 65,000 and registration fee was Rs. 7,000. The petitioner, being an eligible prospective allottee, applied for registration of Type-IV house with the Parishad.
3. The relevant paragraph/provisions of the brochure for the purpose of the present case are as under:
Para 1 of the brochure gave the estimated cost alongwith the area of land, plinth area and the registration fee. In Para 1-3, it was provided that the aforesaid cost of the house was estimated, which can stand increased or decreased as per the actual cost incurred. In Para 8-1, the manner of payment of the estimated cost and the period, during which it was to be paid, was detailed. The prospective allottee was to deposit the amount of registration fee of Rs. 7,000 and within one month from the date of registration, he was to make the payment of Rs. 14,000 and thereafter instalments of Rs. 14,000 were to be paid every four months but before possession was to be delivered, the difference of the amount of the cost as against the estimated cost and the actual cost was to be paid. On failure on the part of the allottee to make such payment, he was liable to pay the interest as provided therein on the unpaid amount.
Para 9.3 said that the house would be allotted within two years from the last date of registration but if for any unavoidable reasons, any delay takes place in construction of the houses, the Parishad would not be responsible for such delay nor it would be liable to pay any interest on the amount deposited.
4. The petitioner's case is that though he had deposited the entire instalments as per the brochure, but the Parishad delayed the construction of the house for no valid reason and, therefore, the demand of additional cost was wholly arbitrary, illegal and without any basis, not flowing from the terms of the brochure.
5. As per the terms of Para 9.3, allotment of the house was to be made within two years from the last date of registration. The last date of registration being 31.12.1984, the house should have been allotted to the petitioner latest by 31.12.1986. Allotment in this case of house number 13/207 in T-IV Indira Nagar was made on 25.2.1987, i.e., with a delay of two months as against the aforesaid condition.
6. Though the allotment of the house was made but possession could not be delivered, as the same was not constructed. According to the petitioner the construction of the houses under the scheme was not even started till February, 1987. After the issuance of the allotment order, the petitioner was issued a letter for delivery of the possession on 20.6.1988 in which revised cost of the house was shown as Rs. 94,350 as against the original estimated costs of Rs. 65,000. On 21.6.1988 alongwith the demand of additional amount asking the petitioner to take the possession, copy of the formal allotment order was also annexed, which says that the cost of the land and the cost of the construction comes to Rs. 94,744. The petitioner was required to make the payment of the difference of the amount before taking possession but the petitioner, instead of making payment of the aforesaid amount, approached this Court by filing the present writ petition.
7. A Division Bench of this Court, while admitting the writ petition, also passed an interim order to the effect that in case the petitioner deposits one-fourth of the additional amount demanded within one month, the allotment of the house in question shall not be cancelled and in the meanwhile opposite parties shall complete the construction if not already complete expeditiously and shall deliver the possession of the house in question to the petitioner. It was also directed that the petitioner shall not transfer the house in question. This order was passed on 23.2.1989.
8. We are informed that the petitioner, in terms of the aforesaid order, has deposited the amount and he has already been delivered possession.
9. Sri S.K. Kalia, learned Counsel for the petitioner, challenging the aforesaid demand, submits that under the terms of the brochure and the conditions specified thereunder, it was obligatory upon the Parishad to start construction of the house within time and to complete the same by the date prescribed, namely, 31.12.1986, but having failed to do so, for no fault of the petitioner, they are not entitled to take advantage of the delay caused by them by burdening the petitioner to make the payment of the additional cost. He also submits that the averments made in the writ petition that Parishad did not undertake the work of construction till the year 1987 and that no reason much less any unavoidable reason has been shown by the Parishad for not being able to complete the construction within the time notified even under the terms of the conditions mentioned in the brochure for having additional cost towards the actual cost of construction, as against the estimated cost, would not allow to charge any additional cost. Submission, therefore, is that in the absence of any reason, much less any cogent or unavoidable or compulsive reason for not being able to complete the houses within time specified or notified and as represented to the petitioner, the Parishad would not have any right to charge any amount towards the additional cost or towards the penal interest or under any other head.
10. Reliance has been placed upon the case of Kanpur Development Authority v. Smt. Sheela Devi and Ors. (2004) 1 UPLBEC 662 : 2004 (1) AWC 739 (SC), wherein the Apex Court, after taking note of the judgment passed in the case of Ba.reti.ly Development Authority v. Ajay Pal Singh , observed as under:
Although this Court has from time to time, taking the special facts and circumstances of the cases in question, has upheld the excess charged by the Development Authorities over the cost initially announced as estimated cost, but it should not be understood that this Court has held that such Development Authorities have absolute right to hike the cost of flats, initially announced as approximate or estimated cost for such flats. It is well known that persons belonging to middle and lower income groups, before registering themselves for such flats, have to take their financial capacity into consideration and in some cases, it results in great hardship when the Development Authorities announce an estimated or approximate cost and deliver the same at twice or thrice of the said amount. The final cost should be proportionate to the approximate or estimated cost mentioned in the offers or agreements. With the high rate of inflation, escalation of the prices of construction materials and labour charges, if the scheme is not ready within the time-frame, then it is not possible to deliver the flats or houses in question at the cost so announced. It will be advisable that before offering the flats to the public such Development Authorities should fix the estimated cost of the flats taking into consideration the escalation of the cost during the period the scheme is to be completed. In the instant case, the estimated cost for the L.I.G. flat was given oat at Rs. 45,000. But, by the impugned communication the appellant informed the respondents, that the actual cost of the flat shall be Rs. 1,16,000, i.e., the escalation is more than 100%. The High Court was justified in saying that in such circumstances, the authority owed a duty to explain and to satisfy the Court, the reasons for such high escalation. We may add that this does not mean that the High Court in such disputes, while exercising the writ jurisdiction, has to examine every detail of the construction with reference to the cost incurred. The High Court had to be satisfied on the materials on record that the authority has not acted in an arbitrary or erratic manner.
The Apex Court concluded as under:
We are of the view, that each case is to be decided in the facts and circumstances of the case in the light of the scheme published/framed and the terms and conditions mentioned in the brochure and/or in the prescribed form of application in the matter of escalation/determination of cost of house/flat. However, cases where there is limit for fixing the escalation of cost, normally the price of house or flat cannot exceed the limits so fixed. The determination of cost of house/flat or escalation of cost cannot be arbitrary or erratic. The authority has to broadly satisfy by placing material on record to justify the escalation of cost of a house/flat. Whether the delay was caused by the allottee or the authority itself is also a factor which has bearing in determination of the cost of house/flat. The unforeseen cause or the reason beyond control of the authority in a given case may be another factor to be kept in view. We may also notice that in these cases, the tentative cost of houses was fixed at Rs. 48,000 but final cost was determined at Rs. 2,08,000. This increase is not mere escalation but it is a multiplication by almost four and half times, although escalation could not exceed 10% as is evident from the contents of the brochure read with prescribed form of application for allotment of house itself. Contentions of the K.D.A. run contrary to the contents of its own brochure on which the respondents acted adjusting their financial affairs understanding that the cost of the houses would be fixed in terms of brochure and that too not exceeding 10% of the estimated cost fixed initially.
11. Learned Counsel for the Parishad Sri Nakul Dubey took the usual plea that it is a purely contractual matter and in view of the pronouncement made by the Apex Court in the case of Bareilly Development Authority (supra), the writ petition would not lie. He also drew attention of the Court to a Division Bench judgment of this Court, dismissing the writ petition, where escalation of price was challenged, relying upon the aforesaid judgment in the case of Bareilly Development Authority, namely, Civil Misc. Writ Petition No. 1218 of 1986, Smt. Susheel Kumari v. State of U.P. and Ors. decided on 11.12.1989.
12. Sri Dubey also relies upon the judgment passed by a Division Bench in the case of Self Financing Scheme Allottees Association v. U.P. Avas Evam Vikas Parishad, passed in Review Petition No. 51 (W) of 1990, In re : Writ Petition No. 1280 of 1987, after the matter had gone to the Supreme Court, against the judgment passed in the writ petition.
13. It is admitted to both the parties that this judgment of Self Financing Scheme Allottees Association related to the same scheme of self financing, to which the petitioner is also an allottee. In the said judgment, though passed in review, the Court had taken into consideration the terms and conditions given in the brochure including the condition that under ordinary circumstances the allotment of the houses would be made within two years from the last date of registration but if on account of unavoidable circumstances, the construction of the houses were to be delayed, the Parishad would not be responsible and the Parishad would not be liable to pay any interest on the amount deposited by the applicant. The Court took into consideration the explanation of the Parishad that the delay in construction was caused due to unavoidable reasons, i.e., delayed administrative, as well as technical sanction by the authorities concerned to the Parishad and the delay in execution of necessary agreement for construction of the houses etc. The Court further observed that undoubtedly, under the terms of the brochure, this Court had indicated that the Parishad was entitled to increase the amount of the houses due to the spiral and escalation of the prices of various articles, which are used in the construction of those houses.
14. On considering the entire facts and circumstances, the Court found though the Parishad in accordance with the terms and conditions of the contract has a right to realise the escalated price, but the Parishad was responsible for not obtaining the required sanction at appropriate time, as a result of which undue delay was caused in construction of the houses and, therefore, certain concessions were given to the allottees. In view of the fact that there was no contractual liability, the Court reduced the maintenance, administrative and profit charges and condoned the payment of penal interest.
15. It is true that in the instant case, the Parishad did not file the counter-affidavit till date controverting the factual assertions made in the writ petition about the time in undertaking the work of construction nor it gave any reason for delay but since the same very question under the same very scheme had already been the subject matter of consideration in the aforesaid writ petition of Self Financing Scheme Allottees Association, we take the observations made in the aforesaid judgment, as applicable in the present case also, so far the cause of delay in raising the construction is concerned.
16. In view of the principle laid down in the case of Kanpur Development Authority, after considering the Judgment in the case of Bareilly Development Authority, it can safely be observed that the Avas Evam Vikas Parishad, though had a right to realise the actual cost of construction, which may be an increased or decreased cost as against the estimated cost, but at the same time, it is also necessary for the Parishad to include the probable cost of escalation, while representing the estimated cost to the prospective purchasers/allottees. The period under which or during which, construction would be completed and delivery of the possession of the house would be made, should also be kept in mind, while calculating the cost of construction and the time prescribed should be adhered to, unless, of course, there are some exceptional or valid reasons for not being able to complete the construction within the time pronounced. The Parishad cannot be given advantage of the escalated cost, in case for no exceptional or valid reason, it itself delays the construction and moreso, when it does not start the construction at all within the period, during which a finally completed house is supposed to be delivered to the prospective allottees.
17. The determination of cost of the house/flat or escalation of the cost, cannot be arbitrary or erratic and there has to be a reason for the escalation and degree of escalation of cost, which should be directly in proportion to the actual cost incurred. If a challenge is made to the escalation of cost, the authority would be under an obligation to specify, by placing such material, that the action taken or the cost so determined, was justified and that there were reasons for delay in making the constructions. True, that in the brochure it is only the estimated cost, which, is reflected and also the period, during which the construction is to be made is also approximate, but the prospective allottees/applicants, who are willing to have any one such house, would determine their capacity to purchase the house, looking to the estimated cost and the period during which they would be given possession of the house. If the aforesaid two factors are clouded by absolute uncertainty, the floating of the scheme and inviting applications from prospective and willing applicants, would be frustrated.
18. In the case of Kanpur Development Authority, where cost was increased by more than 4-1/2 times, the Supreme Court observed that 'escalation could not exceed 10% as is evident from the contents of the brochure read with prescribed form of application for allotment of house itself.'
19. Since in the case of Self Financing Scheme Allottees Association, this Court has already taken a view that the delay had occurred because of some technicalities although Parishad could have avoided such a delay, but has refused to reduce the escalated cost, after giving concessions with respect to the amount under other heads, we do not intend to pass an order with respect to additional cost, which may run contrary to the aforesaid judgment.
20. Under the circumstances, we feel that the interest of justice would be met in case the petitioner is directed to deposit the additional cost demanded, i.e., Rs. 37,915.75, alongwith 10% simple interest. We further direct that the petitioner would not be liable to pay any penal interest nor the charges like maintenance charges etc. Since the petitioner has already deposited 1/4th amount against the aforesaid escalated demand, the balance amount may be deposited by the petitioner within next four months. After the aforesaid amount is deposited the Parishad shall forthwith execute the sale deed in favour of the petitioner.
21. The writ petition is allowed in part. Cost easy.