DIRECTOR GENERAL (I And R) vs DELHI DEVELOPMENT AUTHORITY

PURSUANT to the Fifth Self-Financing Housing Scheme floated by the Delhi Development Authority (for short, DDA), in 1982, the informant applied for allotment of a plot/flat and paid a sum of Rs. 15,000/- vide Receipt No. 12018/1315/PS/82 dated 11.8.1982 towards registration amount. Thereafter nothing was heard from the respondent side for a considerable period of time. In 1991, the informant came across an advertisement published on behalf of the respondent inviting the public for residential plots/flats in various localities including Jangpura, Defence Colony, Tilak Nagar, Geeta Colony and New Rajinder Nagar, etc. Out of many plots/flats reserved, ten plots/flats were to be offered to the public on auction basis and the remaining were kept for allotment to the applicants who became successful in a draw of lots. Reservation of plots/flats for allotment on the basis of auction solely with the object of making profit, is stated to a restrictive trade practice covered under Section 2(o) of Monopolies and Restrictive Trade Practices Act, 1969 (in short, MRTP Act). It was, therefore, prayed in the application that enquiry be instituted against the respondent and suitable directions be issued restraining the respondent Authority from auctioning the plots/flats as per the advertisement issued on 31.5.1993.

PURSUANT to the Notice of Enquiry issued, the respondent denied the charges levelled against it. As contended, the respondent Authority is stated to have been established with the purpose of promotion and development of Delhi and to make available the houses/plots/flats to the public as would be reflected from the various provisions of the Delhi Development Act, 1957 relating to the functions of the respondent Authority. Auctioning of plots being permissible under the Rules, it has been contended that respondent has not indulged in any trade practice which could be called restrictive. On merit, it has been stated that allocation/allotment of flats/plots is made through a computerized based draw depending upon the locality and choices preferred by the applicants/candidates and unsuccessful allottees have no legal right for allotment of plots/flats in any one of the other Schemes unless applied for. Under the Fifth Self-Financing Housing Scheme, 1982, about 300 ready built multi-storeyed flats were offered to the registrants, after which the Scheme stood closed. The registrants of the Scheme, who have not been allotted flats/plots, have been refunded the amount of registration along with the interest after the surrender of the Fixed Deposit Receipt and other documents. Auction of land on the other hand related to the flats/plots in the locality of Jangpura, Defence Colony, Tilak Nagar, Geeta Colony and New Rajinder Nagar, which have since been transferred to the DDA by the Ministry of Rehabilitation.

After receipt of the reply, the matter was referred to the Director General (Investigation and Registration) [for short, the DG], for investigation in respect of the claim made by the informant. In absence of any reply from the side of the respondent to the probe letter sent by the DG, DG was of the view that non-allotment of flats/plots for a period of 13 long years under the Fifth Self-Financing Housing Scheme, tantamounted to restrictive trade practice within the meaning of Section 2(o) of the Act. On completion of the pleadings, the following issues were framed : (1) Whether the respondent has indulged in the restrictive trade practices alleged in the Notice of Enquiry ? (2) Whether the alleged restrictive trade practices are prejudicial to public interest ?

EVIDENCE in the form of affidavit/counter-affidavit of the parties was filed. The informant also deposed on oath stating that he had applied three times i.e. in the year 1990, 1991 and 1993 for allotment of flat/plot under the Fifth Self-Financing Housing Scheme floated by the respondent Authority. As the respondent did not attend the proceedings, it was set ex-parte vide order dated 18.5.1999. Ex-parte arguments were advanced by the learned Advocate on behalf of the DG.

THE submissions of the learned Advocate for the DG have been considered in the light of the material brought on record. As per the copies of the application forms available on record, we find that the applicant applied for a flat/plot under Third, Fourth, Fifth, Sixth and Sixth-A Self-Financing Housing Schemes vide Application Nos. 18857 dated 31.7.1990, 1894 dated 30.1.1991 and 10055 dated 8.1.1993 respectively. Apparently, the payment of Rs. 15,000/- towards registration amount has been made only in respect of the Fifth Self-Financing Housing Scheme on 11.8.1982 as is evident from Annexure-7 and no other receipt in respect of other Schemes is available on record. It has not been denied that the informant has not been successful in allotment of the flats/plots under the Scheme for which it applied and paid a sum of 15,000/- towards registration amount. Non-payment of registration amount in respect of other Schemes did not entitle the informant for registration - the first step to be eligible for inclusion of name in the draw of lots. On the other hand the payment of registration amount vests no legal right on the applicant for allotment of flat/plot. THE objection of the informant, therefore, that the flat/plot has not been allotted to it for almost a decade is devoid of any force and is not acceptable. Coming to the main objection regarding the imposition of unjustified cost on the consumers by auctioning the flats, we find that the respondent Authority has been set up under the Delhi Development Act, 1957 which lays down the objects for which it has been brought into being and the functions it has to perform. Rules have also been framed as Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981. Rules 6, 8 and 12 are relevant on the issue and the same are reproduced below : "6. Allotment of Nazul land at pre-determined rates-Subject to the other provisions of these Rules the Authority shall allot Nazul land at the pre-determined rates in the following cases, namely,- (i) to individuals whose land has been acquired for planned development in Delhi after the 1st day of January, 1961, and which forms part of Nazul land : Provided that if an individual is to be allotted a residential plot, the size of such plot may be determined by the Administrator after taking into consideration the area and the value of the land acquired from him and the location and the value of the plot to be allotted; (ii) to individuals in the low income group or the middle income group, other than specified in clause (i),- (a) who are tenants in a building in any area in respect of which a slum clearance order is made under the Slum Areas Act; (b) who, in any slum area or the other congested area, own any plot of land measuring less than 67 square metres or own any building in any slum area or other congested area; (iii) to individuals, other than those specified in Clauses (i) and (ii), who are in the low income group or the middle income group, by draw of lots to be conducted under the supervision of the Land Allotment Advisory Committee. 8. Manner of allotment-Save as otherwise provided in Rules 5, 6 and 7, allotment of Nazul land for a residential purpose, an industrial purpose, a commercial purpose or any other purpose shall be made on payment of such premium as may be determined either by auction or by tender in accordance with the provision of these Rules. 12. Priority of allotment for residential purpose-Subject to the availability of land for allotment residential purposes, among the individuals referred to in Clauses (i) to (iii) of Rule 6, the individuals referred to in Clause (i) shall be preferred to the individuals referred to in Clause (ii) and those in Clause (iii) shall be preferred to those in Clause (iii)."

As per Rule 8, the respondent Authority is permitted to auction the plots/flats for a residential/industrial/commercial or any other purpose. It is under this Rule that the advertisement in question was published, which clearly states that the plots/flats specified in certain areas are of rehabilitation colonies and form part of land purchased by the respondent Authority from Ministry of Rehabilitation and are being sold on "as is where is basis". There is no restriction on the category of the people who can participate in the auction. The only condition being that the person should hold a bank draft of Rs. 10,000/- in favour of the "Delhi Development Authority". The DG has not challenged the validity and legality of the aforesaid Rules and has merely stated that by this act of the respondent Authority, it has indulged in restrictive trade practice under the provisions of Section 2(o) of the Act. In the case of Rajasthan Housing Board v. Smt. Parvati Devi, reported in III (2000) CPJ 9 (SC)=2000 CTJ 165 (Supreme Court) (MRTP), it has been held by their Lordships that the definition of restrictive trade practice as spelt out in Section 2(o) of the Act is not to be read in isolation but to be read along with the main ingredient, namely, "of preventing, distorting or restricting competition... as to impose on the consumers unjustified costs or restrictions". No case has been made out by the DG to show that by this practice of the respondent Authority, it has prevented or restricted competition in any manner affecting the services in such a manner as to impose on consumers unjustified costs or restrictions.

ON merit, we may also state that in any one of the Schemes launched by the respondent Authority, normally there are always more applicants/candidates than the number of flats/plots available, as the same are made available on much lesser rates. The Schemes are quite attractive compared to plots available in market carrying more cost. Another fact, which cannot be lost sight, is that it is only to the limited applicants/candidates to whom the flats/plots could be allotted. It has not been shown that the flats/plots auctioned by the respondent Authority was with the intention of earning profits.

IN view of the above, we are of the considered view that no charge of restrictive trade practice has been established against the respondent Authority and as such the first issue framed is answered against the DG. It has also not been shown that the said trade practice is prejudicial to the public interest. Accordingly, in the facts and circumstances of the case, Notice of Enquiry deserves and is hereby discharged. There shall be no order as to the costs. N.O.E. discharged.