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1989 Supreme(Del) 210
High Court Of Delhi
ROSE EDUCATIONAL SCIENTIFIC AND CULTURAL SOCIETY (REGD.) - Appellant
Versus
UNION OF INDIA - Respondent
Decided On : 05/08/1989
The Government, having held out a promise to allot land to educational institutions at a rate fixed on "no profit no loss" basis, is estopped from changing the basis of allotment and charging a higher amount.
Headnote:
LAND ALLOTMENT - PRICE ENHANCEMENT - EDUCATIONAL INSTITUTIONS - NO PROFIT NO LOSS BASIS - ESTOPPEL - D. D. A. NAZUL LAND RULES, 1989.
Fact of the Case:
Petitioners, various societies set up for establishing unaided educational institutions, were allotted land by the Delhi Development Authority (DDA) under the D. D. A. Nazul Land Rules, 1989. The allotment letters and lease deeds stipulated a provisional price and provided for payment of any difference in cost as may be decided by the Government/DDA. Subsequently, DDA revised the land prices, resulting in a significant increase for the petitioners.
Finding of the Court:
The court held that the petitioners were liable to pay any increase in land cost, as per the terms of allotment, but the increase sought by DDA was not in accordance with the terms of allotment. The court interpreted the expression "difference of cost" in the allotment letter to mean the difference of cost to the Government, not to anyone else, and that the Government's policy at the time of allotment was to charge a rate arrived at on "no profit no loss" basis.
Issues: 1. Whether the DDA could change the basis for enhancing the price of land in midstream, after issuing allotment letters and lease deeds to the petitioners? 2. Whether the petitioners were estopped from paying an enhanced amount higher than the rate arrived at on "no profit no loss" basis?
Ratio Decidendi: 1. The court applied the principles of promissory estoppel, holding that the DDA was estopped from going back on the promise held out to the petitioners that the land would be allotted at a rate fixed on "no profit and no loss" basis. The petitioners had acted on this promise to their detriment by paying the demanded amount and incurring further expenditure. 2. The court interpreted the expression "difference of cost" in the allotment letter in the context of the Government's policy at the time of allotment, which was to charge a rate arrived at on "no profit no loss" basis. Therefore, the enhancement could only mean the difference of cost to the Government.
Final Decision: The court quashed the impugned demand raised by the DDA and directed the DDA to raise a fresh demand on the petitioners for the increased cost of land calculated at the rate of Rs. 9,50,000.00 per acre, which was the "no profit no loss" rate as of 1st April 1987.
( 1 ) THE challenge in this bunch of writ petitions, which are being decided by a common judgment, is to the increase by the respondents, with retrospetive effect, of the premium payable by the petitioners for the land altted to them by the Delhi Development Authority.
( 2 ) THE petitioners are various societies which have been set up for the purposes of establishing educational institutions. The educational institutions which are proposed to be set up by them are unaided schools within the meaning of that expression in the Delhi Education Act.
( 3 ) THE petitioners, at various points of time, had applied to the Delhi Development Authority for allotment of land. The land is to be allotted by the Delhi Development Authority under the provisions of D. D. A. Nazul Land Rules, 1989. The applicants are required to file a detailed application for allotment of land. The applications so received are forwarded to the Delhi Admininstration, who scrutinise the same from various angles and it is only after the Delhi Administration makes its recommendations that the Delhi Development Authority considers allotment of land to the various applicants for setting up educational institutions. Apparently, the applications of the petitioners were scrutinised and it is only thereafter that the D. D. A. issued allotment letters to the petitioners agreeing to allot the land.
( 4 ) FOR the purposes of this petition, it is not necessary to set out in any great detail the exact area of land which was alloted to different petitioners. The land which was allotted to them was according to the need, which had been assessed by the respondents The allotment was made byissuance of letters bearing different dates, but the contents of all the letters were identical in the sense that each one of these letters stipulated the price which was payable and also contained a provision whereby the petitioners were liable to pay an enhancement in price at a later date. It will be appropriate at this stage to set aut clauses 1 and 2 of one such letter so received, which contained the necessary stipulation with regard to the price of land and the increase thereof. The said clauses, in one of the cases, read as under:-
"1. The Rose Educational Society and Cultural Society shall be required to pay the cost of land measuring 0. 247 acres allotted for school building at the provisional rate of Rs. 8 lakhs per acre and annual ground rent a 2- P. A. of the premium.
2. The Rose Educational Scientific and Cultural Society shall pay the difference of cost of land as may be decided by the Govt. /dda. "
( 5 ) IT is an admitted case that pursuant to the receipt of similar allotment letters all the petitionrs, on various dates, have paid to the D,d. A. the cost of landt as demanded. In some cases a regular lease deed was also executed. The lease deed, inter alia, contained the following term relating to enhancement of price :-
" (1) The Lessee shall pay within such time such additional sum or sum toward premium as may be decided upon by the Lessor on account of the compensation awarded by the Land Acquisition Collector in respect of the said land or any part thereof being enhanced on reference or in appeal or both and the decision of the Lessor this behalf shall be final and binding on the Lessee. The yearly rent of Two and half per cent of the premium hereby reserved shall be calculated on the sum received towards premium by the Lessor before the execution of these presents and such additional sum or sums payable towards premium as provided herein from 28th day of October one thousand nine hundred eighty seven. "as already stated, the letters of allotment and the lease deeds which were executed were all similar to each other. Lease deed has been executed, in addition to issuance of letters of allotment in C. W. Nos. 2764/88, 2603/88, 2883/88, 2502/88, 377/89. 401/89 and 465/89. In the case of all other petitioners only letters of allotment were issued.
( 6 ) AFTER the allot
