Dalbir Singh Bhagat and Others vs Chandigarh Administration and Another

A.P. Chowdhri and N.K. Sodhi, JJ.—The Chandigarh Housing Board (hereinafter referred to as ''the Board'') invited applications for multi storeyed flast at Manimajra under a self financing scheme. Last date for receipt of application was July 8,1989. In category I, the covered area was to be 1895 square feet and tentative price was Rs. 4 lacs. In case of category II, the covered area was to be 1440 square feet and tentative price was Rs. 3 lacs. The petitioners applied and after draw of lots were issued acceptance letters setting out the schedule of payment. A specified amount was payable within 30 days and the balance in four half-yearly instalments. It appears that the petitioners paid the amount On April 9, 1992, however, the Board issued letter (Annexure P-3'') seeking to increase the price of the flats in both the categories. In respect of Category I, the price was sought to be increased from Rs. 4.00 lacs to Rs. 6 25 lacs. In case of Category IT, it was increased from Rs. 3.00 lacs to Rs. 4 75 lacs. Afresh schedule for payment of the enhanced amount was also given in the notice (Annexure''P-3'') failing which the registration was to be cancelled. The petitioners made representations (Annexure ''P-4'' and ''P-4/A'') seeking reasons/justifications for the proposed increase. No reply was given by the Board. the petitioners have challenged the enhancement as being totally arbitrary and without any authority of law. They seek appropriate writ/ direction to the Board to deliver possession of the flats adhering to the schedule of payment vide Annexure ''P-l''.

Identical question is raised in connected Civil Writ Petitions (Nos. 9217, 10413, 10507, 10758, 13705, 15288 and 15368 of 1992) which are being dealt with and disposed of along with the aforesaid writ petition.

Written statement has been filed in the present writ petition. Mr. Ashok Aggarwal, Senior Advocate, appearing for the respondent Board, states that similar written statement may be taken as having been filed in the remaining connected petitions.

A preliminary objection has been taken in the written statement. The objection is that the contract between the petitioners and the Board was a non-statutory one and writ petition under Article 226/227 of the Constitution was not maintainable for the alleged breach of the contract. Reliance was placed on Bareilly Development Authority and Another Vs. Ajay Pal Singh and Others, and two unreported decisions in S. L. P. (Civil) Nos. 12875/91 and 13993/91 (Joginder Kumar Nagpal v. Chandigarh Housing Board and Ors.), SLP (Civil) Nos. 12875 and 13993 of 1991. dated March 1, 1993 and S. L. P. (Civil) Nos. 12321, 12878-79. and 13430/91 (Mrs. Sharda Nayar v. Chandigarh Housing Board and Ors., S. L. P. (Civil) Nos. 12321, 12878-79 and 13430 of 1991.) dated August 26, 1992 It was stated that the price of Rs. 4 00 lacs and Rs. 3 00 lacs, respectively, of two categories of flats was tentative. The exact amount had to be worked out at the time of allotment. It was expressly made clear that the price was liable to be increased on account of variation in plinth area, scope of work change in specifications and design, increase in cost of material and labour, cost of land etc. or due to any other reason and such increase was binding upon the allottee. The petitioners, it was pointed out, had also furnished an individual undertaking to be bound by increase made in the aforesaid circumstances. In paragraphs 7 t" 9 of the written statement, an effort was made to give jurisdiction in some detail for the enhancement in the price under various heads of expenditure, these heads being cost of land, increase of covered area, rectifying errors in not including area of verandah, balcony and other common areas while working out the cost of the covered area, escalation in the cost of building material and labour etc. As a result of more detailed and precise exercise it was found that tentative cost in respect of flat of Category 1 would work out to Rs. 5.50 lacs and in case of category II to Rs. 4.25 lacs

Mr. Ashok. Aggarwal stated during the course of arguments that these estimates appear to be fairly accurate and there could be variation of plus-minus one or two per cent in the final reckoning

The contention of Mr. M. L. Sarin. Senior Advocate, learned counsel for the petitioners, is that notice (Annexure "P 3) is demonstrably arbitrary and must be quashed, in support of this contention. Mr Sarin submitted that Annexure ''P-3'' mechanically mentions all heads of expenditure on which increase could be possibly made without making any effect to show how much increase had been made under a particular head of expenditure and for what reasons He further submitted that Annexure ''P 3'' did not contain any understandable reason justifying the increase even under a single head of expenditure. The Board failed to furnish reasons even in reply to the representations (Annexure ''P-4'' and ''P 4/A'') and above all in the written statement itself it was admitted that the amount of Rs. 6.25 lacs and Rs. 4 75 lacs in respect of Category I and Category II flats, respectively, mentioned in Annexure ''P-3'' was incorrect and, in act, the escalated cost would be Rs. 5 50 lacs and Rs. 4.25 lacs in respect of said categories of flats Mr. Sarin further contended that Bareilly Development Board does not lay down an inflexible rule of thumb and where, as in this case, the increase is totally arbitrary and no justification is offered, the action is subject to judicial review and liable to be set aside being in contravention of Article 14 of the Constitution.

We do not consider it necessary to deal with the various authorities relied on by learned counsel on both sides. It is sufficient to say that even according to written statement the price mentioned in Annexure ''P-3'' is not adhered to, nor was there any justification, not even in broad terms, given either in Annexure ''P-3'' itself or in reply to the representations which were made by the petitioners on receipt of the said notice. We have therefore, no difficulty in holding that Annexure ''P 3'' must be quashed being arbitrary and in violation of the provisions of Article 14 of the Constitution.

The next question which was debated before us was whether the cost now worked out, as stated in the written statement, should be broadly accepted; and if the petitioners still dispute the correctness thereof or any particular head of expenditure therein, they may be referred to Civil Court, which is the proper forum, as distinguished from writ proceedings in this Court.

We are of the view that it would not be fair to even broadly accept the escalation in the cost under various heads of expenditure, as mentioned in the written statement, without giving an opportunity to the petitioners to challenge the same by a suitable rejoinder, the written statement having been filed only two days earlier. That does not, however, mean that the explanation given to the written statement and accompanying documents deserves to be rejected as unacceptable. We leave the question open.

In view of our conclusion that Annexure ''P-3'' suffers from the vice of arbitrariness, we set aside the same.

There is ample material on record that the price indicated in the brochure/letter of acceptance was tentative. The petitioners appears to have given undertaking also to pay the price as finally -worked out at the time of allotment. The whole of the discussion before us centred round the main question-whether notice Annexure p 3'' was arbitrary. Mr. Sarin did not even once suggest in the course of the arguments that the petitioners were entitled to possession of the flats on the original pi ice and that the Board was not entitled to any increase whatsoever. We, therefore, dispose of these connected writ petitions by setting aside Annexure ''P-3'' It will be open to the Board to take further action in accordance with the terms and conditions of the contract in question.