An organization like HIMUDA which claims to run business on a ‘no profit no loss basis’ cannot make claims which do not have any legal basis.

JUDGMENT :

M.S. Ramachandra Rao, C.J.

In this batch of cases, the issue which arises for consideration is:

“whether the H.P. Housing and Urban Development Authority (in short “the Authority”) is entitled to claim from the respondents in LPAs / Writ Petitioners in respect of plots/houses which were allotted to them in 1989 under the 5th Partially Self Financing Scheme and 6th Self financing Scheme certain additional amounts towards notional interest which it would have earned had it invested the payments received from such allottees in FDRs earning interest /opportunity cost or not?”.

Background facts

2) The said Authority is a statutory Authority created under the Himachal Pradesh Housing & Urban Development Authority Act, 2004, and its predecessors, were the Himachal Pradesh Housing Board, constituted under the H.P. Housing Board Act, 1972, constituted on 09.11.2000, and prior thereto, the Himachal Pradesh Nagar Vikas Pradhikaran, and before it, the Shimla Development Authority, constituted by the State of Himachal Pradesh under Section 42-A of the H.P. Town & Country Planning Act, 1977.In 1989, the Shimla Development Authority announced the 5th Partially Self Financing Scheme and 6th Self Finance Scheme for construction and offer for allotment flats, residential houses and developed plots of different sizes/types on 99 years lease hold basis with renewal after 33 years in Shimla and issued a Brochure Annexure P-1.

3) Applications were invited from General Public, which were to be submitted on or before 30th November, 1989.

4) The respondents in the LPAs/petitioners in the CWPs are either original allottees or transferees therefrom submitted applications and flats/houses/plots were allotted to them in 1990. For convenience, these persons would be referred to as “allottees”.

5) The brochure provided that 20% of the earnest money was to be paid before draw of plots, 50% before issuance of letter of possession, and 100% of earnest money after issuance of letter for taking over possession.

6) It is not in dispute that Foot Note No.2 of the Annexure attached at the end of the Brochure issued by the Shimla development Authority contained the following condition:

“Shimla Development Authority reserves the right to change the cost depending upon actual cost of construction, escalation in cost of land or material and labour etc.”

7) Under the terms of the brochure as well as the allotment letter, the price of the land was fixed at Rs.800/- per sq.m which was to be paid in accordance with the schedule given by the Shimla Development Authority which was subsequently revised from time to time. Some of the allottees were also permitted to transfer the plots to others.

CWP no.3206 of 2011

8) For the purpose of consideration, we shall refer to the facts in CWP no.3206 of 2011, out of which, LPA no.144 of 2012 arises.

9) In that Writ petition, the petitioner is a transferee from an original allottee of a plot for which the permission was accorded on 28.01.1991 by Shimla Development Authority.

10) Later, vide a letter dt. 10.01.1994, the allottee was informed that due to increase in cost of land, there would be increase in cost of the plot of not less than 70% and thus, revised tentative cost of the plot would be almost doubled. He was further informed that the plot was likely to be completed by the end of 1995 and the increase in price would be recovered in 30 installments of Rs.2,430/- per month.

11) The allottee made payments in accordance with the terms of the Brochure/ Scheme and as per the schedule fixed from time to time by the predecessor of the Authority.

12) Through another letter dt. 29.12.1993, the allottees of the plots under the 6th Self Financial Scheme, were also reminded of Foot Note No.2 of the Annexure attached to the brochure that the Shimla Development Authority reserves the right to change the cost depending upon actual cost of construction, escalation in cost of land or material and labour etc. The allotees were also informed in this le