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MADHYA PRADESH HIGH COURT AT JABALBUR BENCH
Sanjay Yadav, J.
Sudha Jain and 16 Others - Appellant
Versus
M.P. Housing and Infrastructure Development and Others - Respondent
Writ Petition Nos. 439, 3170 and 5692-2013, [Alongwith Writ Petition Nos. 21789-2012, 995, 996, 998, 5690, 5746, 7147, 9736, 10713, 10714, 10715, 10717, 10718, 10738, 10740, 11242, 11312, 11313, 11314, 11316, 11317, 11710, 11712, 11713, 11714, 11715, 11716, 11717, 11788, 11789, 11790, 11791, 11792, 12595, 13104 and 13106-2013]
Decided On : 21-11-2013
Pricing of Residential Accommodations - Madhya Pradesh Housing and Infrastructure Board - M.P. Act No. 4 of 2011, Section 3, 31, 33, 34, 47, 50 - The judgment discusses the controversy surrounding the pricing of residential accommodations purchased under the self-financing scheme from the Madhya Pradesh Housing and Infrastructure Board. The court analyzed the cost components, including land cost, construction cost, advertisement cost, and surcharge/contingency charge, and the method of pricing. The court examined the legality of linking the cost price of land with the Collector's guidelines and the determination of the date for including the cost price of land in the final cost price. The judgment also highlighted the principles of pricing under the self-financing scheme and the limitations on the Board's right to enhance prices without establishing the actual cost of inputs. The court ultimately quashed the direction for allottees to pay the land price at the rate determined by the Collector on the date of execution of the sale deed and directed the Board to fix the price of the land as it existed on the date of the issuance of the allotment letter.
Fact of the Case:
The judgment discusses the controversy surrounding the pricing of residential accommodations purchased under the self-financing scheme from the Madhya Pradesh Housing and Infrastructure Board. The issue revolves around the pricing of these residential accommodations, including the cost components and the method of pricing. The representations of the petitioners were decided by the Board, upholding the decision of enhancing the cost price of respective units. The petitioners challenged the linking of the cost price of land with the Collector's guidelines and the determination of the date for including the cost price of land in the final cost price.
Finding of the Court:
The court found that the Board's justification for linking the cost price of land with the Collector's guidelines was not supported by evidence of extra expenditure incurred after the allotment of the site. The court held that the Board was not justified in adding the market price of the land at the time of execution of the instrument of conveyance to the final cost price. The court quashed the direction for allottees to pay the land price at the rate determined by the Collector on the date of execution of the sale deed and directed the Board to fix the price of the land as it existed on the date of the issuance of the allotment letter.
Issues: The main issues discussed in the judgment include the legality of linking the cost price of land with the Collector's guidelines, the determination of the date for including the cost price of land in the final cost price, and the limitations on the Board's right to enhance prices without establishing the actual cost of inputs.
Ratio Decidendi: The court held that the Board was not justified in adding the market price of the land at the time of execution of the instrument of conveyance to the final cost price. The court also emphasized the principles of pricing under the self-financing scheme and the limitations on the Board's right to enhance prices without establishing the actual cost of inputs.
Final Decision: The court quashed the direction for allottees to pay the land price at the rate determined by the Collector on the date of execution of the sale deed and directed the Board to fix the price of the land as it existed on the date of the issuance of the allotment letter.
Sanjay Yadav, J.
1. Though these writ petitions are by different income groups having purchased Nice Duplex/Nice Triplex/Nice Duplex Corner/Senior Higher Income Groups/Higher Income Group/Middle Income Group and the Economically Weaker Sections under Self Financing Scheme from the Madhya Pradesh Housing and Infrastructure Board (hereafter referred to as Board); however, because of the similarity of the controversy raised in these writ petitions, they were heard analogously and decided by this common order. The issue revolves round the pricing of these residential accommodations.
2. Since the same principle of pricing are applied for these residential houses by the Board, the basic facts are retrieved from Writ Petition No. 5692/2013 - Dr. Sudha Jain and 16 others.
3. Inviting offer through advertisement, drawing of lot, allotment thereof by selecting prospective purchasers, various installments payable by these prospective purchasers on the basis of tentative/provisional price fixed by Board by these purchasers (In some EWS cases the fact may vary regarding the payment schedule; however, since pricing of residential houses is the core issue, the variation of payment schedule will not have any bearing on the final outcome), non execution of sale deeds are not in dispute. Therefore, these facts are not gone into.
4. It may also be noticed that this is the second round of litigation. In earlier round the writ petitions were disposed of with direction to Commissioner, Housing Board to decide the representation preferred by respective petitioners by a reasoned and cogent order.
5. The representations came to be decided on 8.3.2013 whereby the decision of Board of enhancing the cost price of respective units have been upheld and following decision has been taken:
6. Before getting into the reasons assigned by the Board, Comparative Statement will set out the costing pattern of the residential accommodation in question.
7. Now for the reasons which find mention in the order dated 8.3.2013 justifying the enhancement. These are:
It is further observed that the respondent authorities may also consider the request of the petitioners to hand over possession of the houses, as an interim measure, as has been done in the case of Dr. Mrs. Krishna Yadav, in case so advised and is permissible and in case such an application is filed by the petitioners subject to the final decision in the mater.
8. The rationality of this cost price system of land is being questioned as also the stage at which it should be made applicable. It is made clear at this stage that the petitioners have confined the challenge only to linking of cost price of land with Collector's guidelines which keeps changing every year.
9. Shri R.N. Singh, learned Senior Counsel with Shri Vijay Shukla, Advocate, Shri Hemant Shrivastava, Advocate, Shri A.K. Singh, Advocate, Shri A. Mukhipadhyay, Advocate, Shri Jaideep Sirpurkar, Advocate and Shri Dipak Raghuvanshi, Advocate for petitioners and Shri R.D. Jain, learned Advocate General with Shri P.K. Kaurav, learned Additional Advocate General, Shri R.K. Samaiya, Advocate, Shri G.P. Dubey, Shri Sanjiv Mishra, Shri Vivekanand Awasthy, Advocate, Shri Rakesh Jain, Advocate, Shri M.S. Bhatti, Advocate and Shri Aditya Khandekar, Advocate for the respondents were heard at length.
10. Four elements which cumulatively determine the pricing of respective residential units under the self financing scheme are the (i) cost of land, (ii) construction cost, (iii) total advertisement cost and (iv) surcharge and contingency charge.
11. The cost of land, besides actual cost incurred would include the development expenditure, probable expenses, better location, capital interest for loan for purchasing the land, enhanced lease rent if any, registration charges of land. Similarly the construction cost would include actual cost incurred in construction, the supervision charges, charges on building permission, contingencies (certain %). The total advertisement
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