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Asha N. Madnani v. Delhi Development Authority & Ors.
Factual and Procedural Background
The petitioner sought a writ of mandamus directing the respondent Delhi Development Authority (DDA) to allot a flat at the originally fixed price and to quash a letter dated 22.9.1992 that raised an escalated demand. In 1979, the DDA introduced the Registration Scheme on New Pattern, 1979, under which the petitioner registered for a MIG flat and was allotted a flat in April 1990 at a specified disposal cost, payable in three installments. The allotment terms required submission of all relevant documents along with proof of payment within 90 days, failing which the allotment would be automatically cancelled.
The petitioner paid all installments within the extended time allowed but did not submit all documents within the prescribed 90 days. Consequently, the DDA cancelled the allotment on the ground of non-submission of documents. The petitioner disputed the cancellation and sought its recall, submitting multiple communications. The DDA later allotted another flat to the petitioner in September 1992 but at a significantly higher price, demanding additional payment within 60 days. The petitioner challenged this demand and cancellation of the original allotment.
Legal Issues Presented
- Whether the cancellation of the original allotment by the respondent-DDA was justified on the ground of non-submission of documents within the prescribed period despite payment of installments.
- Whether the respondent-DDA was entitled to demand payment of the escalated price for the fresh allotment.
- Whether the term regarding submission of documents within the prescribed period is mandatory or directory in the context of allotment cancellation.
Arguments of the Parties
Petitioner's Arguments
- The petitioner paid all installments within the time granted, so the allotment could not be cancelled on the technical ground of non-submission of documents.
- The petitioner was never informed about any deficiency in the documents submitted and was not given an opportunity to rectify or be heard before cancellation.
- The cancellation and subsequent demand for a higher price were unjust and unwarranted.
Respondent-DDA's Arguments
- The allottee was obligated to submit all relevant documents along with payments within the prescribed time.
- Non-submission of documents constituted a breach of an essential term, justifying cancellation of allotment.
- The respondent-DDA was justified in demanding the price prevailing at the time of the fresh allotment along with cancellation charges.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court observed that the flat subsequently allotted to the petitioner was identical in location and characteristics to the originally allotted flat. It was undisputed that the petitioner had not defaulted in payment and had made genuine efforts to submit the required documents, which were received by the respondent-DDA. The petitioner was never informed of any deficiencies in the documents before cancellation, nor was an opportunity given to rectify any such deficiencies.
The Court distinguished between default in payment and default in submission of documents. Default in payment disrupts the scheme's financial management and justifies automatic cancellation. However, default in submitting documents, which do not affect eligibility or entitlement, is a technical and procedural lapse that should not attract harsh consequences if payments are made in time.
The Court held the term requiring payment as mandatory, but the term requiring submission of documents within the prescribed period to be directory. The respondent-DDA suffered no loss since the payment was made, and penalizing the petitioner with an escalated price for a technical deficiency was inequitable.
Holding and Implications
The petition was allowed. The Court quashed the additional demand raised by the respondent-DDA and directed allotment of the flat described in the letter dated 22.9.1992 at the original disposal cost fixed in the allotment dated April 1990.
The respondent-DDA was directed to complete all formalities and deliver possession within specified timeframes. As the price had already been received, the petitioner was entitled to possession without further payment. No order as to costs was made. The decision directly benefits the petitioner and does not establish any new precedent beyond the facts of this case.
R.C Lahoti, J.— The petitioner seeks a writ of mandamus commanding respondent-DDA to allot a flat to the petitioner at the price which was fixed in the original allotment and to quash the letter dated 22.9.92 raising an escalated demand.
2. In the year 1979, the respondent-DDA floated a scheme for allotment of flats which was known as the Registration Scheme on New Pattern, 1979 (hereinafter ‘the Scheme’, for short). The leaflet containing the scheme is filed as Annexure-A. On 26.9.79, the petitioner deposited Rs. 4,500/- seeking registration for allotment of a MIG flat. She was allotted Registration No. 23910 and Priority No. R-610. In block dates 23.4.1990-27.4.1990, the petitioner was allotted a flat described as 42, Ground Floor, Sector 15 Block E-2 Pocket 2, Rohini at a disposal cost of Rs. 2,09,100/- subject to adjustment for the amount already deposited and the interest accrued thereon. The price of the flat was to be paid in 3 installments. One of the terms of the allotment was as under:
“The allottee is required to submit all the relevant documents complete in all respects alongwith proof of payment within the prescribed period of 90 days from the date of issue (latter of the block dates) failing which allotment will be cancelled automatically.”
3. The petitioner had sought for some extension of time for payment of the installments which was allowed by the respondent-DDA. It is not disputed that the installments payable by the petitioner were all paid within the extended period of time. On 25.10.90 and 29.10.90 the petitioner submitted documents in two installments to the respondent-DDA. On 9.11.90, the original surrender slip was submitted to the DDA. On 26.3.91, the DDA informed the petitioner that the allotment of the flat has been cancelled due to non-payment within the due dates. It may be stated here itself that during the course of hearing the learned Counsel for the respondent-DDA conceded that though the installments were paid by the petitioner within the extended time of payment, the cancellation of allotment to the petitioner was founded and could be supported only on the ground of non-submission of the relevant documents by the petitioner within the prescribed period of 90 days.
4. The petitioner sent several communications to the respondent-DDA disputing the justness and correctness of the cancellation of allotment and seeking recall by the DDA of the cancellation of allotment made to the petitioner. Some of the communications dated 22.4.91, 18.7.91, 9.8.91, 6.9.91 and 10.9.91 have been filed with the petition.
5. On 5.12.91, the DDA informed the petitioner that ground floor flat being not available, the petitioner's prayer would be considered on such availability.
6. On 22.9.92, the petitioner has been issued a letter of allotment Annexure-K whereby ground floor flat No. 2 Pocket D-8 Sector-15 in Rohini has been allotted to the petitioner but at the disposal cost of Rs. 4,13,300/- requiring the petitioner to pay an additional amount of Rs. 2,10,699.46 within 60 days.
7. According to the petitioner, she having paid the amount of the installments within the time appointed, her allotment could not have been cancelled for the technicality of non-submission of the documents without her being told as to how the documents submitted by her were deficient and without affording her an opportunity of hearing. The learned Counsel for the DDA has supported the cancellation submitting that as per the letter of allotment the petitioner was obliged not only to make payments but also to submit the documents within the appointed time and even non-submission of documents was a breach of essential term of the allotment entitling the respondent-DDA to cancel the allotment. The learned Counsel also submitted that the respondent-DDA was justified in demanding from the petitioner the price of the flat as applicable on the date of fresh allotment alongwith the cancellation charges.
8. Having heard the learned Counsel for the parties, we are of the opinion that the petition deserves to be allowed as the impugned action of the respondents cannot be sustained. It is not disputed that the flat subsequently allotted to the petitioner is in the same locality, on the same floor and the same in all respects as the flat which was earlier allotted to the petitioner.
9. The petitioner has not defaulted in payment of the price. She did submit the documents also to the respondents. The copies of the covering letters accompanying the documents and filed by the petitioner with the petition go to show a genuine and sincere effort on the part of the petitioner to submit the documents. The documents were received by the respondent-DDA. At no point of time prior to the cancellation of allotment the petitioner was ever told as to how and in what manner the documents were deficient and if only the petitioner would have been told or advised of the deficiency by any one, she would have promptly supplied the deficiency. The respondent-DDA has not lost anything by such a technical default on the part of the petitioner inasmuch as price was fully received by the DDA. Merely for the technical deficiency in supplying the documents, the petitioner cannot be made to suffer by paying an additional amount of more than Rs. 2 lacks.
10. A distinction has to be drawn between the consequence flowing from the default in payment by the allottee in accordance with the terms and conditions of allotment and a default merely in furnishing proof of payments and filing of the documents within the prescribed period. The letter of allotment provides for automatic cancellation of the allotment in both the cases. In the case of default in payment of installments automatic cancellation of allotment has to be sustained because of the consequences flowing therefrom.
10.1 Each allotment is part of a composite scheme. By default in payment the working of the scheme is disturbed and the DDA has to rearrange its financial affairs. An allottee defaulting in payment must give way to an aspirant waiting for an allotment and willing to make payment.
10.2 In case of a mere default in filing of the documents (having no material bearing or eligibility or qualification for allotment) and proof of payments within the prescribed period the considerations are different. Even the respondent-DDA is aware of the payment having been made. It is merely a question of convenience that allottee is required to furnish proof of payment so that collective information as to payments is available at one place and the DDA is not required to scan its records time and again in respect of each allottee. Having made the payments—all and in time—it is primarily the allottee who suffers by his failure to furnish the documents and proof of payments. Execution of lease and delivery of possession to the allottee would be delayed inspite of his having parted with money and the flat lying ready for delivery of possession. Situation may be different if third party interest or any other similar factor has intervened which would render it inequitable or impossible to accommodate the allottee on his original allotment.
10.3 Therefore, the term as to payment as per schedule must be held to be mandatory while the term as to submission of all the relevant documents alongwith proof of payment within the prescribed period should be held to be directory.
11. For the foregoing reasons, the petition is allowed. The additional demand raised by the respondent is quashed. The respondent is directed to allot the flat described in the letter of allotment dated 22.9.92 (Annexure-K) at the same disposal cost at which she was previously allotted a similar flat vide letter of allotment dated 23/27.4.90 (Annexure-C). If there is still anything required to be done by the petitioner in the direction of taking possession of the flat, the same shall be done subject to the respondent-DDA calling upon her to do so within a period of six seeks from today. As the price has already been realised by the respondent-DDA, possession over the flat shall be delivered to the petitioner within a period of eight weeks from today, if nothing remains to be done on the part of the petitioner, otherwise within a period of eight weeks from the date of fulfillment of any other formalities required to be done by the petitioner subject to her being informed by the DDA as already indicated hereinabove. No order as to the costs.
Ordered accordingly.
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