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High Court Of Delhi
DDA FLATS APP.ASSOCIATION - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Civil 2285 of 1986
Decided On : 07/01/1987
ESTOPPEL - ALLOTMENT OF FLATS - ABANDONMENT OF HIRE PURCHASE SCHEME - DEMAND FOR CASH DOWN PAYMENT - ESTOPPEL BY REPRESENTATION - EXECUTIVE NECESSITY - DOCTRINE OF PROMISSORY ESTOPPEL - APPLICABILITY.
Fact of the Case:
The Delhi Development Authority (DDA) introduced two schemes for allotting flats to citizens: one in 1979 and the other in 1982. The schemes allowed for both cash down payments and hire purchase options. The petitioners, who had opted for the hire purchase option and made initial deposits, challenged the DDA's decision to abandon the hire purchase scheme and demand cash down payments.
Finding of the Court:
The court held that the DDA was estopped from demanding cash down payments as it was contradictory to the object of the scheme and defeated its purpose of making flats affordable to the common man. The court also held that the DDA's reliance on executive necessity was not valid as it was not a sovereign state and the doctrine of executive necessity was not available to it.
Issues: 1. Whether the DDA was authorized to abandon the hire purchase scheme and insist on cash down payments under clause 26 of its policy, which allowed for alterations to the scheme? 2. Whether the doctrine of promissory estoppel applied to the case, given that the petitioners had acted to their detriment based on the DDA's promise of hire purchase?
Ratio Decidendi: 1. The court interpreted clause 26 of the DDA's policy as allowing only alterations that retained the essential features of the scheme and did not defeat its purpose. Abandoning the hire purchase scheme and demanding cash down payments fundamentally changed the scheme and defeated its purpose of affordability. 2. The court applied the doctrine of promissory estoppel, holding that the DDA was estopped from acting contrary to its promise to the petitioners, who had relied on that promise and acted to their detriment by making initial deposits.
Final Decision: The court issued a writ of mandamus directing the DDA to adhere to its original scheme of allotting flats on a hire purchase basis and to withdraw the letters demanding cash down payments.
( 1 ) 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 as Registration scheme on new pattern 1979 of intending purchasers of flats to be constructed by the D. D. A. and the second scheme is for allotment of D. D. A. flats to retired/retiring Govt. servants of 1982. The object of the first scheme as stated in the very first clause is that the Scheme has been formulated to reduce the sale price of M1g/lig and Janata flats 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 are :- "clause JO.- While making allotment under the registeration 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. Clause 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. " Similarly the terms of allotment of the second scheme are that 50% of the houses 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 LIG and MIG, 50% of the cost was payable within one month of the demand, and the balance 50% in regular instalments of 10 years; in the case of janata flats 30% of the cost was payable within one month of the demand and balance in instalments of 15 years.
( 3 ) THE petitioners in all these petitions are the allottees who had opted for the purchase on H. P. basis and had made the intial 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. 00 p. m. and 1500. 00 p. m. and have large families to support. From 1984 onwards 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 letter 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 2 months. The petitioners, who are unable to deposit the entire cost in lumpsum were aggrieved and have thus filed these petitions. Some of the 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.
( 4 ) THE main contention of the learned counsel for the petitioners before us was that the D. D. A. was estopped from demanding the payment in lumpsum which is contradictory to the very object of the scheme on the basis of which the petitioner had registered themselves and had made the initial deposit at the time of registration.
( 5 ) IN the counter affidavit filed on behalf of D. D. A. 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
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