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Delhi Development Authority v. Ashok Kumar Behal And Others
Factual and Procedural Background
The Delhi Development Authority (the “Authority”) launched the “Registration Scheme on New Pattern — 1979” to construct and sell MIG, LIG and Janta flats. The brochure indicated an illustrative price of Rs 42,000 for MIG flats, while making it clear in Clauses 13 and 14 that both plinth area and prices were only indicative and subject to revision.
Registrations closed on 30-9-1979 with approximately 1,70,000 applicants. Owing to delays, actual allotments to the respondent-writ-petitioners were made only in 1991. Meanwhile, on 6-12-1990 the Lieutenant-Governor revised land rates from Rs 62 per sq m (1979) to Rs 870 per sq m for MIG flats. When demand letters were issued, the respondents filed several writ petitions in the Delhi High Court contending that the revised prices were excessive in light of the 1979 brochure.
One Division Bench (CWP 3267/1991 and connected matters) accepted the respondents’ plea, struck down the 1990 land-rate revision, fixed a tentative price at 4½ times the 1979 figure and directed constitution of an Expert Committee. Other Division Benches had earlier dismissed similar petitions. Because of these conflicting views, another Division Bench referred two specific questions to a Full Bench, which upheld the Authority’s pricing methodology on 3-2-1995 (Sheela Wanti). Special Leave Petitions challenging the Full Bench decision were dismissed in limine on 14-7-1995.
The present appeals arise from the Division Bench judgments that had favoured the respondents; the Supreme Court stayed those judgments, heard the matter after the Full Bench decision, and has now delivered the instant pronouncement.
Legal Issues Presented
- Whether, under Article 226 of the Constitution, the High Court can interfere with pricing/costing of flats, including escalation of land cost, in view of Clauses 13 and 14 of the 1979 brochure.
- Whether the 6-12-1990 revision of land cost approved by the Lieutenant-Governor of Delhi is illegal or arbitrary.
- Consequently, whether the impugned Division Bench judgment could stand in the face of the contrary Full Bench determination in Sheela Wanti.
Arguments of the Parties
Respondents’ Arguments
- The Division Bench judgment in their favour had not been overruled; indeed, it was implicitly approved by the Full Bench, which merely noted that earlier material had not been produced before the Division Bench.
- Because the Authority allegedly failed to place relevant pricing data before the Division Bench, the ratio of Bareilly Development Authority v. Ajai Pal Singh (1989) was inapplicable.
- Dismissal of SLPs against the Division Bench decision would create an anomalous situation where some allottees pay more than others for identical flats.
Authority’s Position (as recorded in the opinion)
- Filed a detailed affidavit before the Full Bench explaining the methodology for calculating construction and land costs between 1979 and 1990.
- Emphasised that Clauses 13 and 14 expressly permitted revision of price; therefore judicial interference was unwarranted.
- Relied on the Full Bench ruling affirming that the 1990 price escalation was neither arbitrary nor illegal and that judicial review over pricing matters is extremely limited.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bareilly Development Authority v. Ajai Pal Singh, (1989) 2 SCC 116 | Judicial review over pricing of development-authority flats is limited; such transactions are contractual. | Referenced to show the governing principle that courts should not interfere with price fixation absent arbitrariness; Full Bench relied on it, and the Supreme Court treated it as applicable once relevant data were produced. |
| Ashok Kumar Behal v. Union of India, 1993 (52) DLT 153 | Instance where escalated prices were quashed because DDA failed to disclose cost data. | Distinguished by Full Bench; Supreme Court noted it was fact-specific and not controlling once cost details were on record. |
| Sheela Wanti v. DDA (Full Bench, Delhi HC, 3-2-1995) | Held that, given Clauses 13 & 14, courts cannot interfere with pricing; 1990 land-rate revision not arbitrary. | Treated as the correct and binding view; Supreme Court enforced this ruling and disposed of present writ petitions accordingly. |
| Prem Chand v. Union of India (Delhi HC, 24-5-1993) | Dismissed similar challenge to DDA price escalation. | Cited as an example of earlier Division Bench decisions contrary to the impugned judgment. |
| J.K. Dhingra v. DDA (Delhi HC, 16-5-1991) | Same as above. | Cited to show existing contrary precedent within the High Court. |
| Vinod Kumar Gupta v. DDA (Delhi HC, 22-10-1991) | Same as above. | Used to illustrate conflicting High Court views. |
| Maha Nand Sharma v. DDA (Delhi HC, 15-1-1992) | Same as above. | Used in the procedural narrative of conflicting judgments. |
Court's Reasoning and Analysis
1. The Supreme Court noted the existence of conflicting Division Bench decisions on identical issues concerning the same scheme. This inconsistency led to the reference to, and authoritative pronouncement by, the Full Bench in Sheela Wanti.
2. The Full Bench, after examining detailed cost data supplied by the Authority, concluded that: (a) Clauses 13 and 14 constituted contractual permission for price revision; and (b) the 1990 escalation was neither arbitrary nor illegal. It therefore limited the scope of judicial review over such pricing decisions.
3. Special Leave Petitions against the Full Bench ruling were dismissed by the Supreme Court in limine, lending finality to that view.
4. The Division Bench decision presently under appeal had reached the opposite conclusion, largely because at that time the Authority had not produced the cost particulars. The Supreme Court held that once the requisite data were before the Full Bench, the premise for the Division Bench’s intervention disappeared.
5. Allowing both views to co-exist would create uncertainty and unequal treatment among allottees. Upholding the Full Bench position maintains doctrinal consistency and the rule of law.
6. Consequently, the Court held that the impugned Division Bench judgment could not stand and that the matter must be governed by the Full Bench decision.
Holding and Implications
Impugned Division Bench judgment SET ASIDE; writ petitions disposed of in terms of the Full Bench judgment in Sheela Wanti.
Implications: The price of MIG flats allotted under the 1979 Scheme will be calculated in accordance with the 6-12-1990 land-rate revision and the methodology upheld by the Full Bench. No separate Expert Committee will be constituted, and all allottees under the Scheme are subject to a uniform pricing regime. The decision reinforces the limited scope of judicial review over contractual price fixation by development authorities and sets no new substantive precedent beyond affirming the Full Bench ruling.
Ashoke Bhan, J.— The appellant Delhi Development Authority (hereinafter referred to as “the Authority”) formulated a scheme known as “Registration Scheme on New Pattern — 1979” (for short “the Scheme”) to build and sell MIG/LIG and Janta flats so as to be within the reach of the common man.
2. Registration for the Scheme opened on 1-9-1979. In the Scheme the illustrated price of various categories of flats were mentioned. The likely cost of MIG flats with which we are concerned in these appeals was indicated to be Rs 42,000. On 30-9-1979, registration was closed. About 1,70,000 persons registered themselves in the Scheme. In 1981, allotment started taking place by draw of lots based on randomised allotment. The cost of flats was worked out after taking into account the prevailing rate of land by the Lt. Governor. The cost of construction was worked out by dividing the cost incurred in construction of a pocket of flats by a number of flats in that pocket. Clauses 13 and 14 of the brochure are as follows:
“13. The plinth area of the flats to be constructed under new pattern is likely to be as under:
MIG between 60 to 65 sq m
LIG about 38 sq m
Janta up to 24 sq m
The accommodation in the flats under different categories will be as under:
MIG — one living room, 2 bedrooms, kitchen, bathroom and WC and open courtyard.
LIG — two rooms, kitchen, bathroom and WC.
Janta — one room, kitchen, bathroom and WC.
The likely cost of flats constructed under this Scheme will be as under:
MIG Rs 42,000
LIG Rs 18,000
Janta Rs 8000
The prices are indicative and do not represent the final cost.
14. It may please be noted that the plinth area of the flats indicated and the estimated prices mentioned in the brochure are illustrative and are subject to revision/modification depending upon the exigencies or layout, cost of construction etc.”
(emphasis supplied)
3. Due to certain reasons with which we are not concerned at the moment, the allotments could not be made. On 6-12-1990, fresh rates of land to be taken into account for costing of flats were approved by the Lt. Governor. Whereas in 1979 the prevailing land rate was fixed at Rs 62 per sq metre, the same was revised in 1990 to Rs 870 per sq metre for MIG flats, Rs 660 per sq metre for LIG flats and Rs 500 per sq metre for EWS (Janta flats). The increased rate was approved after taking into consideration all the relevant factors involved.
4. The respondent writ petitioners (hereinafter referred to as “the respondents”) whose turn for allotment came in 1991 were allotted flats in Jahangirpuri. The demand letters were sent to them. The respondents filed Writ Petition No. 3267 of 1991 along with Civil Writs Nos. 3198, 3456, 3645, 3795 and 3796 of 1991 respectively in the Delhi High Court challenging the rate at which the flats were being allotted. The case put up by them was that the amount being charged for the flats was much higher than what was indicated in the Scheme itself.
5. Writ Petition No. 3876 of 1992 titled Prem Chand v. Union of India, CWP No. 2787 of 1990 J.K Dhingra v. DDA, CWP No. 728 of 1991 Vinod Kumar Gupta v. DDA and CWP No. 1327 of 1991 Maha Nand Sharma v. DDA also filed on the same grounds and for the same were dismissed on 24-5-1993, 16-5-1991, 22-10-1991 and 15-1-1992, respectively.
6. Writ petitions filed by the respondents were allowed by the High Court despite the fact that several similar writ petitions had already been dismissed on merits. By the impugned judgment the High Court struck down the revision in the rate of land. The Authority was directed to make allotment of flats at a tentative price of four-and-a-half times of the price offered in the year 1979. Further the Authority was directed to constitute an Expert Committee to go into the costing of the flats taking the land rate at Rs 62 per sq metre. The Expert Committee was to work out the price after taking into account the actual cost of construction made by it for the construction of the flats. If the Expert Committee after working out the cost on the basis of the aforesaid works out cost to be more than the price that was provisionally fixed then the Authority was put at liberty to revise the cost and intimate to the respondents requiring them to make the payment within a month of such intimation.
7. Another set of Writ Petitions Nos. 1121 of 1991, 1102 of 1993, 1059, 874, 1008, 1019, 1451 and 1628 of 1994 which were for similar relief came up for hearing before another Division Bench. Arguments were heard and orders were reserved. A miscellaneous application being CM No. 6491 of 1993 was filed in Writ Petition No. 1121 of 1991 to report that another Division Bench had pronounced judgment in Writ Petition No. 3267 of 1991 (writ petition filed by the respondents) on 25-8-1993 which had a direct bearing on the controversy involved, in which similar issues had been considered and decided. The relief similar to the one claimed in petition had been granted. A prayer was made that the writ petitions be disposed of in terms of the said judgment. On notice, the Authority resisted the application saying that important decisions vital to the issue raised had escaped the attention of the Court in CWP No. 3267 of 1991 and as such the same was not binding. Keeping in mind the divergent views expressed by different Benches of equal strength, the Division Bench felt it appropriate that the matter be decided by a larger Bench and in particular the following questions:
“1. Whether under Article 226 of the Constitution of India, this Court can interfere in the matter of pricing/costing of flats including escalation in cost of land particularly in view of clauses 13 and 14 of the brochure regarding the Registration Scheme on New Pattern — 1979 under which the petitioners are registrants for allotment of flats?
2. Is the impugned revision of cost of land by the Lieutenant Governor of Delhi illegal and arbitrary?”
8. Thus, on their recommendation, a Full Bench was constituted to decide the aforesaid questions.
9. The fact that the matter had been referred to a larger Bench doubting the correctness of the view expressed in the impugned judgment was brought to the notice of this Court in the present appeals. This Court on 7-2-1994 adjourned the case sine die to await the decision of the Full Bench and passed the following order:
“We are told at the Bar that the instant decision under appeal has been doubted by another Division Bench of the High Court. Apparently there exists a conflict of opinion raging in the High Court on the question raised herein. It appears that CWP No. 1121 of 1991 Sheela Wanti v. Delhi Development Authority and other batch of cases stands referred to a Full Bench by an order of a Division Bench dated 22-9-1993. We feel that in this situation it would be appropriate that the High Court itself puts to order its own views. We, therefore, send a request to the Chief Justice of the High Court to constitute a Full Bench, if possible, within 3 weeks and have the matter listed and heard as expeditiously as possible. We on our part hold over this matter awaiting the decision of the Full Bench.
The matter is adjourned sine die with the liberty to mention.”
10. The Authority filed a detailed affidavit before the Full Bench along with the documents explaining as to how the likely cost of the flats mentioned in 1979 was arrived at, the component of land price in the said cost, the basis thereof and increase in the land price, if any, between 1979 and 1990. The basis on which the price was enhanced was also indicated which ultimately resulted in the issuance of the notification by the Lt. Governor of Delhi dated 6-12-1990 fixing the revised rates which was impugned in the writ petitions filed in the High Court.
11. The points which were referred to the Full Bench were answered in the negative i.e in favour of the Authority and against the allottees. It was held that the scope of judicial review in the cases involving costing and fixation of prices was very much limited.
12. In the concluding portions, the two points referred to the Full Bench were answered in the following terms:
“We may now advert to the questions referred to the Full Bench. In keeping with our observations and findings recorded above, we are of the opinion that in view of clauses 13 and 14 of the brochure and the transaction being contractual, this Court cannot interfere under Article 226 of the Constitution in the matter of pricing/costing of flats, including escalation of cost of land, etc. The answer to the first question has to be in the negative.
As regards the second question referred to the Full Bench, as noticed above, we are of the view that the impugned revision by the Lieutenant Governor of Delhi is neither illegal nor arbitrary.”
13. The decision of the Full Bench was challenged in this Court by filing Special Leave Petition (C) No. 13508 of 1995 and the same was dismissed on 14-7-1995.
14. Special leave petitions in the present appeals were listed before the Bench on 20-10-1995. Counsel for the respondents raised an argument that since the special leave petitions against the Full Bench judgment were dismissed in limine, he would like to challenge the correctness of the Full Bench judgment. Keeping in view this submission, this Court granted leave to file the appeals. The order passed by the Court is in the following terms:
“Learned counsel for the petitioner submits that the impugned judgment by a Division Bench of the High Court is contrary to the subsequent Full Bench decision of the same High Court against which special leave petition has been dismissed by this Court. Learned counsel further submits that other similar SLPs were also dismissed by this Court which amounts to affirmance of the Full Bench decision dated 3-2-1995 (at pp. 143-79 of the paper-book). On the other hand, learned counsel for the respondent submits that the dismissal of the SLPs being in limine, he would like to challenge the correctness of the Full Bench judgment and therefore the hearing will take some time.
For the above reason, we grant special leave in all the special leave petitions. In the meantime operation of the impugned judgment shall remain stayed.”
15. From the facts narrated above, it is evident that there was a difference of opinion between coequal Benches of the High Court regarding fixation of the price of MIG flats in the same Scheme. Since there was a divergence of opinion, the matter was referred to a Full Bench to resolve the conflict in the views expressed. The conclusions arrived at by the Full Bench run contrary to the view expressed by the Division Bench in the impugned judgments.
16. Shri Hardev Singh, Senior Advocate appearing for the respondents strenuously contended that the view expressed in the impugned judgment before us was not overruled by the Full Bench, rather the same was approved. Relying upon the following observations:
“The consistent view of this Court, thus, was that escalation in prices of the flats constructed by DDA under different schemes, including the present scheme, could not be challenged under Article 226 of the Constitution till the decision in Ashok Kumar Behal v. UOI (1993) 52 DLT 153 in which the Court went into the question of pricing and quashed the escalated price of the flats allotted under the Scheme. It appears that the Court did so apparently for the reason that despite specific directions in that behalf DDA had failed to place the relevant material before the Court to explain how the price fixation had been done and on what basis. Court queries in this behalf were not answered, which led to the belief that DDA was suppressing something and had acted arbitrarily to the prejudice of the writ petitioners. These significant factors put the case out of the ambit of the ratio of Bareilly Development Authority case (1989) 2 SCC 116, (1989) 1 SCR 743.”
it was stressed that since DDA had failed to produce the relevant material before the Court to explain how the price fixation had been done the ratio of this Court's judgment in Bareilly Development Authority v. Ajai Pal Singh (1989) 2 SCC 116, (1989) 1 SCR 743 was not applicable. That the Division Bench in the impugned judgment decided the case on the peculiar facts of the case and therefore the same would not be governed by the ratio of the decision of the Full Bench judgment.
17. The contention put forth by the counsel for the respondents cannot be accepted either on facts or in law. Keeping in mind the divergence of views expressed by the coequal Benches the matter was referred to the Full Bench. The Full Bench expressed the view that revision of price by the Lieutenant Governor of Delhi in the year 1991 was neither arbitrary nor illegal, in other words, the price fixed by the Lieutenant Governor in the year 1991 was upheld whereas the Division Bench in the impugned judgment has taken a diametrically opposite view. In the impugned judgment it has been held that the price fixed by the Lt. Governor in the year 1991 was arbitrary and illegal. The Court after fixing a tentative price directed to constitute an Expert Committee to go into the question of pricing and determine the same after taking the land rate at Rs 62 per sq metre and actual cost of construction made by it for the construction of the flats. The Full Bench did not approve the view expressed by the Division Bench in the impugned judgment, it simply stated that the Division Bench may have come to this conclusion because the Authority failed to place the relevant material before the Court to explain how the price fixation had been done and on what basis. Court queries in this behalf were not answered, which led to the belief that DDA was suppressing something and had acted arbitrarily to the prejudice of the writ petitioners. The relevant material had been placed before the larger Bench and the Bench after taking into consideration the material placed before it came to the conclusion that the price fixed by the Lt. Governor of Delhi was neither arbitrary nor illegal. The inconsistency of the views expressed in the impugned judgment and the larger Bench of the Delhi High Court is self-evident. The Delhi High Court has resolved the conflict of views expressed by the Division Benches of coequal strength by constituting a larger Bench and the special leave filed against the judgment of the larger Bench has already been dismissed.
18. Inconsistency and contradiction in the orders passed by the same Court on the same point regarding the same scheme cannot be allowed to be continued or perpetuated. If the contention of the learned counsel is accepted then an anomalous situation would arise by which the price fixed for a few of the MIG flats in the Scheme would be much less than the price fixed for the remaining flats allotted in the same year which cannot be permitted. The law laid down by the Supreme Court is binding on all courts within the territory of India and the law laid down by a High Court is binding on all courts within its jurisdiction. It is a cardinal principle of rule of law that inconsistency and contradiction in the orders has to be avoided at all costs to bring about a certainty in the mind of the subordinate courts and the litigant public. This principle would stand violated in case two binding principles on the same point of the same court are allowed to operate simultaneously.
19. We put an end to the controversy by setting aside the impugned judgment and dispose of the writ petitions filed by the respondents in terms of the order passed by the Full Bench of the Delhi High Court in Sheela Wanti decided on 3-2-1995. We agree with the view expressed by the larger Bench in Sheela Wanti case (supra).
20. The appeals, accordingly, stand disposed of with no order as to costs.
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