IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF MARCH, 2019 BEFORE THE HON’BLE MR. JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.34149/2013 (LB-RES) BETWEEN:
Sri Rajanna S/o Late Ranga Narasaiah Age: 45 Years R/o H.No.– 96 6th Cross, 8th “C” Main J.C. Nagar, West of Chord Road Bangalore – 560 086. … Petitioner (By Sri. Ajit Kalyan, Advocate) AND:
1. The State of Karnataka Represented by its Secretary Department of Housing Vikas Soudha Bangalore – 560 001.
2. The Housing Board Commissioner Karnataka Housing Board Cauvery Bhavan Bangalore – 560 009. ... Respondents (By Smt. B.P. Radha, AGA for R1;
Sri. H. M. Niranjan, Advocate for R2) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to call for the records from the R-2 and quash the impugned communication vide Annex-A issued by the R-2 on 11th July 2013 as illegal and without authority of law and etc., This Writ Petition coming on for preliminary hearing in ‘B’ Group this day, the Court made the following:
ORDER The petitioner had filed application seeking for allotment of site in the Yelahanka New Town, 3rd Phase Layout, Bengaluru formed by the Karnataka Housing Board (‘K.H.B.’ for short) under the category of Low Income Group (LIG).
2. Petitioner was allotted a site and the same had been communicated by way of Intimation of Allotment dated 04.07.2013. Though no price as such was fixed at the time of calling for applications, subsequently the second respondent – Commissioner, K.H.B. fixed the price at `3,500/- per square feet and the petitioner was called upon to obtain the sale deed by paying the price that was fixed. Petitioner, however, has challenged the price fixation primarily making out a case that he needs to be treated on par with allotments made to other allottees in the vicinity. Petitioner has submitted a copy of the sale deed dated 22.09.2012 executed by K.H.B. in favour one Sri P.Parvatha Reddy, who has been allotted an adjacent site bearing No.990/17 situated at Sector-A, 3rd Phase, Yelahanka New Town, Bengaluru, as per Intimation of Allotment dated 15.06.2012 under the Middle Income Group (MIG) and the price was fixed at `1,899.43/- per square feet. It is an undisputed fact that the site allotted to P.Parvatha Reddy is in the same locality and is in fact adjacent to the site allotted to the petitioner.
3. Sri H.M.Niranjan, the learned counsel appearing for the second respondent – K.H.B. would contend that the question of price fixation lies within the essential domain of K.H.B. and various factors are taken note of while fixing the price and this aspect of the matter cannot be the subject matter of judicial review.
4. Learned counsel also relies on the letter dated 30.09.2013 addressed to the Financial Controller, Karnataka Housing Board by the Assistant Executive Engineer, Karnataka Housing Board, Bengaluru wherein, the reason for fixation of price as regards the site of the petitioner has been adverted to and it is stated that the price fixed as regards the allotment of site to P.Parvatha Reddy at `1,900/- per square feet was in light of the fact that at the time of allotment of site to P.Parvatha Reddy, the width of the road was only six meters, also the access was not through a direct road and the demand was also less for the said site. However, it is pointed out that as regards the petitioner’s site, there has been certain subsequent developments including widening of the road from a width of six meters to nine meters and also the said road has been asphalted resulting in increase in the value of the property and hence, a differential price fixation is sought to be justified.
5. This Court, by its order dated 27.02.2019 had called upon the second respondent – K.H.B. to justify the price fixation as regards the petitioner, keeping in mind the price that was fixed with respect to the allotment made to P.Parvatha Reddy.
6. It is noticed that as regards the allotment of site to P.Parvatha Reddy and the petitioner, the time interval is approximately one year and the question is as to whether the fixation of price at `3,500/- per sq. ft. for the allotment of site to the petitioner was unreasonable? The second respondent–K.H.B. when confronted with a question as to whether there has been any increase in the expenditure incurred by the K.H.B. between the time the allotment was made to P.Parvatha Reddy and the allotment that was made to the petitioner, no satisfactory explanation is forthcoming, except by relying on the justification as made out in the letter dated 30.09.2013.
7. The point that falls for consideration is:- “whether the fixation of price at `3,500/- per square feet is a matter that requires to be interfered with, in light of fixation of price at `1,900/- with respect to the allotment of site to P.Parvatha Reddy in the said layout which is adjacent to the petitioner’s site?”
8. Normally the Courts do not exercise power of judicial review as regards matters of price fixation. However, it is to be noted that the second respondent – K.H.B. being a Public Authority and State, in terms of Article 12 of the Constitution of India, is to be guided by public interest and interests of the allottees and not profit motive, in matters of price fixation.
9. The learned counsel for the petitioner has relied on a number of judgments regarding scope of judicial review in the matters relating to price fixation. The observations in the said cases are referred to approval.
(i) K.S. Panchapakesan and others –vs- State of Karnataka reported in ILR 1997 KAR 1835 .– The Court had cited with approval the observation of the Apex Court in Kerala State Electricity Board –vs-
S.N. Govinda Prabhu & Brothers and others reported in (1986) 3 SCR 628.
“…..It is a public utility monopoly undertaking which may not be driven by pure profit motive not that profit is to be shunned but that service and not profit should inform its actions…”.
(ii) Madhya Pradesh Housing and Infrastructure Development Board –vs- B.S.S. Parihar and Others reported in AIR 2015 SC 3436 “31. … 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 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 in the District which would be arbitrary, unreasonable and unfair”.
(iii) Karnataka Industrial Areas Development Board and Another –vs- Prakash Dal Mill and Others reported in (2011) 6 SCC 714.
This Court has approved the following observations made in Indore Development Authority –vs- Sadhana Agarwal reported in (1995) 3 SCC 1.
“21…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 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 has to be satisfied on the materials on record that the Authority has not acted in an arbitrary or erratic manner…”.
10. In the light of allotment made to P.Parvath Reddy and allotment made to the petitioner within the span of about a year, fixing the price at `3,500/- per sq. ft., which is more than 80% higher than the price fixed with respect to the allotment to P.Parvath Reddy without any objectively justifiable reason cannot be accepted.
11. There is no material placed to justify this increase. It is also a matter of record, as per the submissions made that the layout was almost complete when the allotment to P.Parvath Reddy was made, except with respect to certain infrastructure and civil works and the cost for all further development was contemplated and taken note of and price was fixed while making allotment to P.Parvath Reddy. If that were to be so, the price fixed to the allottee of the adjacent site P.Parvath Reddy ought to have been taken note of while fixing the price as regards the allotment made to the petitioner.
12. Clearly any reasonable escalation on the price fixed with respect to the adjacent site holder could have been justified, but not the increase as is made out in the present case. In the absence of any material being placed to justify the fixation of price different from that fixed with respect to P.Parvath Reddy with reasonable escalation, this Court finds it a fit case for intervention. It is to be noted that the reason for escalation being pointed out, being increase in the market value of the property due to widening of road and asphalting of road, cannot be accepted to be a justifiable cause for fixation of price. The increase in the market value of the property could be no reason to justify increase in the allotment price. The second respondent – K.H.B. being a Public Authority and State under Article 12 of the Constitution of India, needs to keep in mind that it is not a profit making entity.
13. Accordingly, the impugned communication intimating the price as per Annexure-A dated 11.07.2013 is set aside. Matter is remanded back for fresh consideration as regards price fixation. While making such consideration as regards price fixation, the second respondent-K.H.B. is to take note of the price that is fixed with respect to the allotment made to P.Parvath Reddy and it is open to provide for a reasonable escalation while fixing the final price keeping in mind that the time gap was about one year between the two allotments. Subject to the above observations, reconsideration as regards price is to be completed within a period of twelve weeks from today.
14. It is made clear that the second respondent – K.H.B. is to take note of the representation of the petitioner at Annexure-F dated 10.06.2013 while fixing the price and it is also to be noted while fixing the price the fact that market value of the property has escalated cannot be considered as a criteria in fixing the price.
15. No orders are required to be passed on the pending interlocutory applications, as the same having become redundant in view of disposal of the writ petition.
This petition is accordingly disposed of, subject to the above observations.
Sd/- JUDGE RB