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2004(2) Supreme 299
SUPREME COURT OF INDIA
(From Allahabad High Court)
S. Rajendra Babu, AR. Lakshmanan & G.P. Mathur, JJ.
Bareilly Development Authority -Appellant
versus
Vrinda Gujarati & Ors. -Respondents
Civil Appeal No. 3706 of 1998
Decided on 26-2-2004
Counsel for the Parties :
For the Appellant : Bharat Sangal, Ms. Sangeeta S. Panikar, R.R. Kumar, Advocates.
For the Respondents : A.K. Sanghi, Punit D. Tyagi, R.C. Verma, Advocates.
Held : The finally constructed area is 702 Sq.ft. and the increase in the covering area is 88 sq.ft. The BDA has claimed only the increase in construction cost of 88 sq.ft. @ construction per sq.ft. at Rs. 342/- namely, Rs. 342 x 88 = 30,096/-. According to the BDA, the cost of the land has also increased for every purchaser as the construction made was two storeyed in place of four storeyed. Initially the purchaser of the ground floor had to pay for land Rs. 137/- per sq.ft. which was included in the estimated cost of Rs. 2,10,000/-. After final costing, the cost of the land is now increased to Rs. 183/- per sq.ft. The increase in cost of the land is Rs. 46/- per sq.ft. and the total increase in the cost of the land for every purchaser of ground floor is Rs. 32,292/-. It is also an admitted fact that the BDA had provided the other facilities such as parking, water, sewer etc. and the increase in cost of these facilities is Rs. 8,500/-. Thus the total increase of construction cost, cost of the land and the other facilities come to Rs. 70,888/-. The details of the increased area has also been very clearly spelt out which includes one more toilet, in place of two common passages, three common passages were constructed and a bigger Verandah was made and the area covered by these items comes to 88 sq.ft. We have already referred to the allotment letter, undertaking by way of affidavit and Chart of Escalation etc. and as per the above undertaking, the BDA is entitled to collect the enhanced price from the allottees. Once the respondents owe money to the appellant, it is fully in the competence of the Authority to recover the same. The parties to this action are bound by the terms of the contract. (Paras 15 and 16)
The High Court is not right in creating double jeopardy for the BDA directing it to pay interest to the respondents while at the same time to direct the respondents not to pay interest on the unpaid amounts. However, taking note of the financial status of the respondents and in the peculiar facts and circumstances of the case, we direct the respondents to pay simple interest @ 9% on the enhanced price of the flats. The enhanced price of the flats shall be paid in six monthly equal instalments together with accrued interest payable on diminishing balance on or before the 10th of every succeeding month commencing from April 2004. If the respondents commit any two defaults in the payment of instalments on the enhance price, the interest @ 18% shall be recovered from them by the BDA. The amounts deposited by the respondents as per the interim order, if any, will be given credit to. According to the Brochure, the Housing Scheme is a Self Financing Scheme wherein the allottees were to pay the cost of the flats in quarterly instalments. The parties are bound by the terms of the contract in regard to the payment of the original cost of the flats as per the agreement. (Para 26)
JUDGMENT
Dr. AR. Lakshmanan, J.-This appeal is directed against the judgment and order dated 14.5.1996 passed by the High Court of Judicature at Allahabad in Civil Misc. Writ Petition No. 36735 of 1995. The appellant-Bareilly Development Authority (hereinafter referred to as "the BDA") was set up by the State of U.P. by Notification dated 19.4.1977 issued under Section 3 of the U.P. Urban Planning and Development Act, 1973. The BDA issued an advertisement calling for applicants to apply for allotment of flats to be constructed by it in the Priyadarshani Nagar Yojna of Bareilly under the Pushpanjali Scheme and the Kusumanjali Scheme. The appellant also issued a Brochure giving the terms and conditions under which the said applicants could apply for and be allotted the flats under the said Scheme. The estimated cost of the said flats was also given in the said Brochure and it was clearly mentioned that the final costing will be done later and the costing of the flats was subject to the right of the appellant to amend the same. The Brochure also did not contain any prescribed date or time period for either construction of the flats or the delivery of possession.
2. The respondents in this appeal applied for allotment of flats in Kusumanjali Scheme. As per the Brochure, 52 flats under the Scheme were to be of 57.10 Sq. Mtrs. (614.39 Sq. Ft.) and were to cost as follows :-
Ground Floor - Rs. 2,10,000.00
First Floor - Rs. 2,00,000.00
Second Floor - Rs. 1,90,000.00
Third Floor - Rs. 1,80,000.00
3. Respondents 1-5 registered themselves for the flats in Kusumanjali Scheme and also paid the required registration fee. The construction of the flats was started and thereafter, there was some dispute between the BDA and its contractor and the construction was delayed for nearly one and a half year and finally the construction was re-started though only two floors instead of original four were built in the Kusumanjali Scheme and thus only 22 flats were built out of 52 originally intended. After the draw of lots, the respondents were issued allotment letters indicating therein in Clause 2 that the price of the flat was still an estimated one and that the final costing would be done after completion on the basis of the actual costs and would be informed thereafter to the allottee which would be payable by them. Clause 2 of the Allotment Letter (Annexure-B) reads as under :
"The estimated cost of the flat is Rs. 2,10,000/-. The final cost would be intimated to you on the basis of actual costing after the completion of the Scheme, which would be payable by you."
4. A Final Costing Committee was set up by the BDA consisting of the Secretary, the Chief Accounts Officer and the Executive Engineer of the BDA and the Committee, after due deliberation, recommended that on the basis of the actual cost of each flat, the price had to be enhanced (in the case of flats on the ground floor, for example, increasing from Rs. 2,10,000/- to Rs. 2,81,100/-). The Committee also recommended that the allottees be given additional time to deposit the enhanced amount of the price as the said allottees had already deposited their respective quarterly instalments. It has further recommended that in case the allottees fail to deposit the said amount in the time prescribed, interest @ 18% be charged from them. The respondents were duly informed by individual notices by the appellant about the final costing of the said flats and also that they were required to deposit within 15 days of the receipt of the said notice the balance amount of price of the flat as well as the proposed lease rent. The respondents filed objections to the said increase in price. The said representations were rejected by the appellant on 21.10.1993 (Annexure-D). When the flats were ready for delivery of possession, in view of the reluctance shown by the respondents in paying the enhanced amount, the BDA offered the option to the respondents to either
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