D.D.A. Flats Applicants Association v. Delhi Development Authority

N.N Goswamy, J.—This judgment will dispose of batch of writ petitions which have been listed before us and involve a common question for decision by this Court. Though the petitioners allottees are registered under two different schemes—one of 1979 and the other of 1982 but the challenge is only to the abandoning of the scheme of allotting flats to citizens on hire purchase basis and insisting on cash down payments from the allottees.

2. The respondent-Delhi Development Authority, under the regulations framed two schemes. The first scheme is known a ‘Registration scheme on new patern 1979 of intending purchasers of flats to be constructed by the Delhi Development Authority’ and the second scheme is for allotment of D.D.A fiats to retired/retiring government servants of 1982. The object of the first scheme as stated in the very first clause of the scheme is that the scheme has been formulated to reduce the sale price of MIG/LIG and Janata fiats so as to be within the reach of common man and to facilitate payments the mode has also been made easier. Clauses 10 and 11 of the said scheme which are relevant for the decisions of these petitions are as under:—

“Clause 10.—While making allotment under the registration scheme, 40% of the MIG flats will be allotted on cash down basis and 60% of the flats on hire purchase basis. LIG/Janata flats will be disposed of on the basis of 25% on cash down basis and 75% on hire purchase basis.

Chase 11.—In case of flats allotted under hire purchase basis the cost of land plus 20% of the balance cost of the flat will be recovered as initial deposit at the time of allotment and the balance amount will • be- recovered in monthly instalments spread over a period of 7 years; in case of MIG flats 10 years and 15 years in case of Janata flats.”

3. Similarly the terms of allotment of the second scheme are that 50% of the house constructed shall be allotted on cash down basis and 50% on instalment basis. In the second scheme, in the case of house allotted to the lower income group and middle income group 50% of the cost was payable within one month of the payment and the balance 50% in regular instalments spread over a period of 10 years in the case of Janata flats 30% of the cost of flats was payable within one month of the demand and balance in regular instalments spread over a period of 15 years.

4. The petitioners in all these petitions are the allottees who had opted for the purchase on hire purchase basis and had made the initial deposit at the time of registration. It is alleged in the petitions that most of the applicants fall in the category of having an income between Rs. 600/- per month and Rs. 1500/- per month and have large families to support. From 1984 on wards till 1986 the D.D.A informed most of the applicants that they had been successful in the draw of lots and it had been decided by the D.D.A to allot the flats to them. However, in August, 1986, the successful ‘applicants received letters from the D.D.A informing them of their allotment Nos. of flats and calling upon them to deposit the entire cost of the flats within two months. The petitioners, who are unable to deposit the entire cost in lumpsum were aggrieved and have thus filed these petitions. Some of the petitioners have also challenged the enhanced demand made against them as compared to the amount mentioned in the original brochures issued by the D.D.A but this plea was given up during the course of arguments and as such we are only concerned with the question of abandoning the system of hire purchase and insisting on cash down basis from the applicants.

5. The main contention of the learned counsel for the petitioners before us was that the Delhi Development Authority was estopped from demanding the payment in lumpsum which is contradictory to the very object of the scheme on the basis of which the petitioners had registered themselves and had made the initial deposit at the time of registration.

6. In the counter affidavit filed on behalf of the Delhi Development Authority, it has been pleaded that due to the escalation in the cost of labour and material it became difficult to have loan facility from HUDCO due to their stringent conditions and as such the D.D.A was compelled to change the scheme. It is further pleaded that the scheme had to be altered for executive necessity as the D.D.A was to get funds from HUDCO and on refusal of HUDCO to provide the necessary funds, the D.D.A had no option but to alter the scheme as it was already in deficit to the extent of Rs. 150.14 crores on the housing project for the year 1986-1987. It is further pleaded that a subcommittee was constituted to conduct an indepth study of the budgetory/propo-sals and make its recommendations. The action of the D.D.A in demanding the entire amount in lumpsum is in accordance with the said proposals of the sub-committee. During the course of arguments, the reliance was placed by the learned counsel for the D.D.A on clause 26 of policy of 1979. The said clause reads, as under:—

Clause 26.—“The above terms and conditions will be valid generally but the D.D.A reserves its right to alter any of them in its discretion as and when considered necessary.”

7. The question for consideration is whether under clause 26, the D.D.A was authorised to abandon the scheme of hire purchase and insist on lumpsum payment. The word ‘alter’ has been considered in various authorities and it would be sufficient to refer to District Local Board, Jalgaon v. Krishna Sakharam Patil, AIR (37) 1950 Bom 18 wherein the Division Bench of the Bombay High Court held that word ‘alter’ means only change, modify or revise but not abolish. It is true that clause 26 does permit alteration but it certainly does not authorise the D.D.A from completely destroying the scheme. We are of the opinion that under this clause only such alterations can be made by which the essential feature of the scheme is retained and the purpose for which it was formulated is not defeated. As we have already said above, the very purpose of the scheme is contained in clause 1 of the scheme which is to the effect that the scheme has been formulated to reduce the sale price of the MIG/LIG and Janata flats so as to be within the reach of the common man and to payments the mode has also been made easier. By this alteration the very mode of payments is being altered which means the object of the scheme is being defeated. The applicants are in the lower income group and in the middle income group and also belonging to the Janata class having a maximum income of Rs. 4200/- per year and in these circumstances, it is impossible for this class to pay the amounts in one lumpsum, particularly, when the demand made by the D.D.A has been substantially raised as compared to the one mentioned in the brochure. The estimated cost of Janata flat as mentioned in the brochure is Rs. 8000/-, the LIG flat is mentioned as Rs. 18,000/- and the MIG flat is mentioned as Rs. 42,000/-. The present demands are Rs. 29,760/-, 63050/- and Rs. 1,38,080/- respectively. To expect the persons earning below Rs. 1500/- per month to pay such heavy amounts in lumpsum is not possible and the action of the respondent-D.D.A would only amount to depriving the petitioners from acquiring their flats.

8. As we have already said the only plea raised in the original affidavit and in the additional affidavit by the respondent is to the effect that the system has been revised due to executive necessity for lack of adequate finance being available with the D.D.A Such a contention has repeatedly been negatived by their lordships of the Supreme Court. In Union of India v. Indo-Afghan Agencies AIR 1968 SC 718, the defence of executive necessity was negatived and it was observed:—

“Under our jurisprudence the government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed grounds of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex-parte appraisement of the circumstances in which the obligation has arisen.”

9. The aforesaid paragraph was cited with approval in the case of Union of India v. Godfery Philips India Ltd., (1985) 4 SCC 369 : AIR 1986 SC 806.

10. In any case the doctrine of executive necessity, if, at all, is available to a sovereign state and not to a statutory body like the Delhi Development Authority which has been constituted under an Act. This doctrine came up for consideration in Rederiiaktie-bolaget Amphitrite v. The King, [1921] 3 K.B 500. In that case during the Ist World War certain neutral ship owners obtained a undertaking from the British Government if the ship owners sent a particular ship to the United Kingdom with a specified cargo she shall not be detained. On the faith of that undertaking the owners sent the ship to a British port with that specified cargo. British Government withdrew their undertaking and refused her clearance. On a petition of right for damages for breach of contract, it was held that the Government's undertaking was not enforceable in a court of law, it not being within the competence of the Crown to make a contract which would have the effect of limiting its powers of executive action in future. The Supreme Court had the occasion to consider this case in Anglo-Afghan-Agencies (supra) and it was observed that the contention of executive necessity does not relieve the Government from honouring its solemn promises when those promises were meant to be acted upon and were in fact acted upon, Such promises were binding on the Crown and the Crown had no authority to revoke the same.

11. In the present case, after the aforesaid two schemes were introduced by the respondents, the petitioners-applicants had registered themselves and had deposited huge amounts as registration charges. Therefore, the petitioners had acted to their deteriment on the basis of the solemn promise given to them in the brochures issued by the respondents. They have been waiting for their flats for several years and after about 7 years when their turns came to own the flats, they are faced with the letters issued by the D.D.A which are impossible for them to comply with. Thus the result is that the petitioners are being denied the right to own their flat and suffer consequences. In the circumstances, the respondent is clearly estopped from acting contrary to the promise made to the citizens who have acted on the said promise and the doctrine of promissory estoppel is clearly applicable to the facts of the present case.

12. We may also mention that some of the petitioners have already deposited a part of the demand as a consequence of interim orders by this Court, those payments would be adjusted towards future instalments.

13. For the reasons recorded above, we make the rule absolute and issue a writ in the nature of mandamus directing the respondent, D.D.A to adhere to its original scheme of allotting flats on hire purchase basis in accordance with the brochures issued and withdraw the letters asking for payment in lumpsum. In the circumstances, we would leave the parties to bear their own costs.

Petitions allowed.