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Judgment
G.S. Singhvi, J.—The petitioners, who have purchased plots from D.L.F. Universal Limited, M/s. Utility Builders and Promoters Leasing: (India) Ltd., Unitech Limited Ansal Properties and Industries (Pvt.) Ltd., have invoked writ jurisdiction of the High Court for quashing the levy of enhanced development charges by the Haryana Urban Development Authority (for short "the H.U.D.A.") and also for directing the respondent Nos. 1 to 3 for ensuring the external development work of the colonies in District Gurgaon.
The learned counsel for the parties are in agreement that the issues of fact and the question of law raised in these petitions-are identical. Therefore, we are deciding all the petitions by a common order.
D.L.F. Universal Limited, Ansal Properties and Industries (Pvt.) Ltd., Unitech Limited and Utility Builders were granted licences under the Haryana Development and Regulation of Urban Areas Act, 1975 (hereinafter referred to as "the Act of 1975") and the rules made thereunder for developing colonies in District Gurgaon. All of them entered into an agreement with the Government of Haryana for the purpose of development of colonies in accordance with the licence. Some of the clauses of the agreement entered into between the owner of the land and the Director, Town and Country Planning, Haryana, acting on behalf of the Governor of Haryana are:-
"(e) That the owner shall pay proportionate development charges as and when, required and as determined by the Director in respect of external development charges.
(j) That the owner shall pay the following external development charges as determined by the Chief Engineer, H.U.D.A., in four six monthly instalments. The first instalment of 25% would be deposited by the owner within 60 days of the issue of licence and the remaining three equal instalments would be deposited by the owner after every six months :-
Proportionate cost of external water source i.e. for bringing new water, raw water storage, pumping, filtration and rising main etc. @ Rs. 25.00 per sq. mt.
External development charges for sewerage system @ Rs. 36,500/- per gross acres.
External development charges for storm water drainage system @ Rs. 20,300/- per gross acre.
External development charges for common/external roads @ Rs. 11,900/- per gross acre.
Community building @ Rs. 26,000/- per gross acre.
In case plantation & horticulture is to be provided as per latest norms of H.U.D.A., the additional cost to be borne/shared by the colonizer will be calculated @ Rs. 17,100.00 per gross acre area of the whole of the colony.
In addition to the above the owner shall also pay any other charges, if any, on account of external development charges."
After the grant of licences by the Government the colonizers developed the areas and sold land to the public. One of the plots bearing No. A-27/15 in Qutab Enclave Colony developed by D.L.F. Universal Limited was sold to Smt. Rashmi Jain wife of Shri Arun Jain on 25.2.1986 Resident of 217126, Lodhi Colony, New Delhi. However, just after two months, it was transferred in favour of the nominees of Smt. Rashmi Jain, namely, Shri D.S. Tewatia (Karta-HUF) and Smt. Chandra Tewatia, who has filed C.W.P. No. 3301 of 1980. At the time of allotment of plot to her, Smt. Rashmi Jain entered into an agreement with the colonizer. The purchaser and the colonizer agreed that the pace of the plot covers the cost of internal development as well as external development as determined by the Director, Town and Country Planning while granting licence for the area.
Initially the rate of external development charges was Rs. 1.42 Lacs per gross acre. Later on the finance committee of the H.U.D.A. decided to charge the external development charges from the private colonizers @ Rs. 2.41 lacs per acre. The decision of the finance committee was conveyed by the Chief Administrator, H.U.D.A. to the Director, Town and Country Planning, Haryana vide letter No. H.U.D.A./Accounts-SO-III-87/239 dated 15.9.1987. On receipt of this communication, the Director, Town and Country Planning called upon the licences to pay enhanced development charges at the rate of Rs. 1.41 Lacs per gross acre. This would be evident from the memo dated 18th September, 1997 written by the Director, Town and Country Planning, Haryana to M/s. Ansal Properties and Industries (Private) Limited, which is reproduced below.-
"Your letter No. API/GM(C)/PU/3/Thh. dated 11.6.1987, on the subject noted above.
You had executed an agreement dated 15.6.1987 in respect of the licence issued to you And your associate companies upto May 1986, according to Clause (4) of which you had undertaken to pay the external development charges on the revised rates as may be determined by the DTCP in accordance with the time schedule approved by him. Accordingly, it has been decided to recover the external development charges @ 2.41 lacs per gross acre (inclusive of 44% overhead charges) for all the licences granted to you and your associate companies upto May, 1986, under the provisions of the Haryana Development and Regulations of Urban Areas Act, 1975, and Rules framed thereunder on the conditions and schedule given below: -
(i) In addition to 44% overhead, an interest of 15% on 60%-deferred payment for 2 year i.e. 18% will be charged for payment received from these colonisers for fund deposited after these rates come into force.
(ii) The basic cost of internal development charges for community building has been taken as Rs. 27,000/- per acre. In case any of the building covered under this category (as per Annexure-B) are not constructed by the colonisers, additional recovery shall be made to cover the gap. This will be subject to the normal overheads.
(iii) The basic cost of external development charges for community building has been taken as Rs. 23,000/- per acre. If any of the buildings covered under this category (as per Annexure-C) are constructed by the colonisers with the prior approval of the DTCP, corresponding rebate shall be given by giving due regards to overheads.
(iv) If there is any delay in the payment, interest at the rate of 18% P.A. shall be charged instead of 15% P.A. The delay in the payment will be allowed only for three months.
(v) Enhanced compensation on land cost, if any, shall be payable extra as decided by the Authority from time to time.
However, the development charges of Rs. 1,42,100/- per gross acre may be paid in 5 years from the date of issue of licences as per the payment schedule already approved by the government. The increase in the development charges may be paid as per the following schedule: -
(a) 25% of the increase within 30 days from the date of issue of this letter.
(b) Balance 75% of the increase in 4 equal six-monthly instalments starting from the date of issue of this letter.
However, in case you want to make the full payment in lumpsum i.e. within 30 days from the date of issue of letter, then the component of escalation and interest may not be charged. In this case, the external development charges after excluding escalation and interest works out to Rs. 1,99,300/- per gross acre. In such cases, the interest for the already delayed payment shall be charged extra. The other terms and conditions as mentioned above from Sr. No. (ii) to (v) will remain the same.
You are hereby directed to deposit the requisite external development charges as per details given above within the prescribed time schedule. You are also requested to execute an agreement for payment of the external development charges as per the rates and schedule given above within a period of 30 days.
The issue relating to external development charges were again considered by the respondent - H.U.DA in its meeting held on 19/20.12.1987 and it was decided that external development charges at the rate of Rs. 3.72 lacs per gross acre be charged from the licensecs private colonizers. This decision was communicated to the Director, Town and Country Planning, Haryana vide letter dated 21.12.1987, who in turn issued circular dated 11.1.1988 requiring the licensees to pay the enhanced development charges at the rate of Rs. 3.72 lacs per gross acre. A copy of the letter dated 11.1.1988 sent by the Director, Town and Country Planning Department to M/s. D.L.F. Universal Limited is reproduced below for reference purposes:-
"In supersession of this office Memo No. 5 DP-87/17047, dated 18th September, 1987, it is to inform you that H.U.DA. which is responsible for undertaking external development work in Gurgaon has decided to charge Rs. 3.72 lacs per gross acre external development charges subject to the following terms and conditions:-
(i) The development charges will be paid (after adjusting the amount already paid) as per the following schedule:
(a) 25% within thirty days.
(b) Balance 75% in two years in four equal six-monthly instalments.
Interest at the rate of 18% per annum shall be charged on deferred payments, that is, on unpaid portion of the amount worked out at the rate of Rs. 3.72 lacs per gross acre.
(ii) If there is any delay in the payment of instalments penal interest at the rate of 3% P.A. shall be charged in addition. The delay in payment will be allowed only for three months.
(iii) Enhanced compensation on land cost, if any, shall be payable extra as decided by the authority from time to time.
(iv) An amount of Rs. 61,000/- has been included in the external development charges on account of internal community building for which no recovery shall be made from the plot holders. However, credit will be given by H.U.DA. for the internal buildings already constructed by you in the colony.
(v) The colonisers will arrange the electric connection from outside source for electrification of their colonies from H.S.E.B. and make payment, if any, direct to H.S.E.B. If they fail to provide electric connection from H.S.E.B. the Director, Town & Country Planning will recover the cost from the colonisers and deposit with H.S.E.B.
(vi) The enhanced rates would not be recovered from the E.W.S/L.I.G. categories of allottees.
As per Clause (e) of the agreement executed by you in respect of the licences referred to above, you had undertaken to pay the external development charges as may be determined by the Director, Town & Country Planning, m accordance with the schedule prescribed by him.
You are hereby directed to deposit the requisite external development charges as per details given above within the prescribed time schedule. You are also requested to execute an agreement for payment of external development charges as per the rates and schedule given above within a period of 30 days. You are also advised to submit a statement furnishing the details of the charges/amount so far deposited/being deposited in response to this communication and the amount due against different licences issued to you and your associate companies for reconciliation of your accounts.
This reference supersedes all previous decisions/communications addressed to you with regard to the payment of schedule of external development charges."
The petitioners have challenged the enhancement in the amount of external development charges from Rs. 1.42 lacs per gross acre on the following grounds:-
(a) that there is no factual and legal justification for enhancing the rate of external development charges from Rs. 1.42 lace to Rs. 3.72 lacs per gross acre and, therefore, the enhancement is contrary to Article 14 of the Constitution;
(b) the colonizers cannot be made to pay for the facilities provided to Maruti Udyog, HSIDC, new colony set up by H.U.D.A. etc.
(c) the calculation of enhanced charges is extremely arbitrary and cryptic, inasmuch as, no details have been furnished by the H.U.D.A. regarding the enhanced charges.
The respondent Nos. 1 to 3 State of Haryana, the Director, Town and Country Planning, Haryana, and the Haryana Urban Development Authority have justified the charging of enhanced external development charges on the premises that the colonizers have agreed to pay the enhanced external charges in accordance with the terms of licences. The respondents have pleaded that M/s. D.L.F. Universal limited and other colonizers are required to pay proportionate development charges for the main lines of the roads, drainage, sewerage, water supply, electricity and other amenities which are to be laid out and constructed by the Government and other local authorities in terms of Section 3(a) of the 1975. The colonizers were required to pay the, external development charges within the specified time frame but they adopted dilatory by making frequent representations for the revision of external development charges and for deferment of the payment due to which the external development work could not be taken in time and there has been escalation in the cost of external development work which could not be taken in time and there has been escalation in the cost of external development resulting in enhancement of the external development charges.
In a separate written statement to C.W.P. No. 3301 of 1988, M/s. D.L.F. Universal Limited has pleaded that in accordance with the agreement of sale, the petitioner is bound to pay the increase in the amount of external development charges. The respondent has also pleaded that in terms of the licence, it is required to pay external development charges and this amount is to be recovered from the purchasers. In support of this assertion a copy of the letter dated 1/2.2.1988 written to the co-purchaser of the petitioner has been enclosed. The same is reproduced below:-
"You have been kept informed of the progress of development of D.L.F. Qutab Enclave Complex, while internal development of the colony has been progressing satisfactorily, there has been delay in the completion of external development works which have to be undertaken by the Haryana Government on payment of the charges to be determined by them. There has also been increase, in the demands of Haryana Government in the matter of external development charges (EDC). In September 1987, the Director, Town and Country Planning, Haryana had intimated the estimates of enhanced external development charges to all the colonisers operating in the District, Gurgaon which worked out to approximate 137.50 per meter. We informed the plot holders about this enhancement and asked for the payment by them accordingly. Now we have received revised estimates of EDC from the Directors, Town and Country Planning, Haryana vide his letter dated 11.1.1988 by which the demand for external development charges have been further enhanced which now works out to Rs. 155.10 per sq. meter. This letter of DTCP dated 11.1.1988 supersedes the earlier letter dated 18.9,1987. On the basis of this further enhanced demand of the external development charges we are constrained to write you again and have prepared a fresh statement showing the amount payable by individual plot holders. The statement relating to your plot is annexed.
In transmitting the enclosed statement we would like to bring to your notice that in view of the revision in charges made by the Haryana Government, we have. no option excepting to request the plot holders to bear this additional burden on the external development charges. You would appreciate that it is in the interest of the development of the colony that the external development work should in no way be hampered or delayed on this account. In this context we may mention that while communicating this demand for enhanced external development charges the Haryana Government has also placed an additional burden on the developers in the area in as much as they have asked us to pay from our own resources an additional amount of Rs. 61.00/- per acre for provision of external Community buildings". This additional burden computes to about Rs. 29.00 per square metre.
We earnestly hope that the Haryana Government expeditiously undertakes and complete the external development work and there is no further enhancement of the external development charges by the Haryana Government beyond the present revised demand. We may, however, mention here that the Director of Town and Country Planning, Haryana has also indicated and clarified that there may be, a possibility that besides additional expenses which may have to be incurred by the State Government on account of enhancement in compensation for acquisition of land, for purpose of laying out the external roads as well as for providing the canal for bringing water from outside sources, to the colonies, expenses for arranging the electric connection from Haryana State electricity Board for electrification of the colonies may also be payable at a later stage. For enabling us to meet such expenses to be paid to the authorities later on, we had earlier requested the plot holders for payment of contingency deposit of Rs. 6.00 per sq. metre. This amount has had to be now increased to Rs. 12.00 per square metre keeping in view the aforesaid intimation from Haryana Government for payment as and when demanded at a subsequent stage. This contingency deposit will remain with us and shall carry simple interest at the rate of 12% per annum during the period of its non-utilisation.
We may also mention that although in terms of earlier memo dated 18.9.87 the Director, Town and Country Planning, Haryana had also provided a concessional rate of external development charges if the payment of the same is made in lumpsum within the stipulated period. In view of this stipulation a facility of special down payment rebate was also offered to you. This concession has not been withdrawn by the Director, Town and Country Planning, Haryana as per its superseding memo dated 11.1.88. Accordingly, all payments made by you are being adjusted in order to determine the balance amount payable by you and the faculty of special down payment rebate is now not available. Necessary adjustment in this behalf has been made in the enclosed statement.
The plot holders will kindly notice that the developers of the colonies feel helpless in this matter. We are most keen that the colonies should be expeditiously and satisfactorily developed, and therefore we have to depend on the plot holders'' expeditiously discharging their obligation under the agreement With us by remitting the additional charges as set out in the enclosed statement.
You are requested to kindly let us have a sum of Rs. 18,068/- immediately so as to enable us to convey the plot."
Shri J. K. Sibal, Senior Advocate, Shri P.C. Goel, Ms. Jasbit Sahni and Shri Rajesh Kumar Sharma, counsel for the petitioners argued that the increase in the external development charges from Rs. 1.42 lacs to Rs.3.72 lacs per gross acre is wholly arbitrary, unreasonable and unjustified, Shri Sibal pointed out that about 4000 acres of land in District Gurgaon is being developed by different colonizers and, therefore, the external development charges can be levied only in respect of the facilities provides to the colonies coming upon such land and not for the facilities which will benefit industries like Maruti Udyog, land belonging to the HSIDC and the old as well as new colonies being developed by the H.U.DA. Shri Sibal further pointed out that total area to be benefited by the water channel and electric installations is around 9500 acres but the colonizers cannot be made to pay for land other than the one which falls under the colonies. Shri. Sibal readout the averments made in Para 23 of the writ petition and the reply of the respondent Nos.1 to 3 and submitted that the explanation offered by the respondent for enhancement in the amount of development charges is wholly unsatisfactory. He submitted that the purchasers of the plots from the colonizers (licensees) are entitled to challenge the enhancement in external developments charges because they are directly affected by such enhancement. He relied upon the decision of the Supreme Court in LIC of India and Another Vs. Consumer Education and Research center and Others, . Shri H. S. Hooda, learned Advocate General. Haryana and Shri R. S. Mittal, Senior Advocate appearing on behalf of the Haryana Urban Development Authority argued that the petitioners cannot invoke extra ordinary jurisdiction of the High Court to get themselves relieved from the contractual obligation incurred by them in terms of the agreement which they have entered with the licensees at the time of purchase of the plots. Shri Hooda pointed out that 30 parties have been given licences for developing colonies in District Gurgaon. These colonies are situated in scattered areas. They have agreed to pay the external development charges to be determined by the Director, Town and Country Planning from time to time and the demand raised by the respondent No. 2 is neither arbitrary nor unreasonable. Shri Hooda and Shri Mittal pointed out that the colonizers delayed the development of the area and have also delayed the payment of external development charges which prevented the government and the H.U.D.A. from carrying out the external development. This also resulted in escalation of the cost of external development and the colonizers/licensees are bound to pay the enhanced development charges. Shri Mittal made a statement that the licencees have already deposited the external development charges including the enhancement made after the filing of the writ petition and submitted that the petitioners are free to avail the remedy in a civil court if they feel that the licences cannot charge enhanced external development charges from them. Shri Mittal relied on the following decisions :-
(i) Har Shankar and Others Vs. The Dy. Excise and Taxation Commr. and Others, ;
(ii) Radhakrishna Agarwal and Others Vs. State of Bihar and Others, ; and
(iii) Sh. M.S. Dutta v. State of Haryana 1989 P.L.J. 217.
Shri M. L. Saris, Senior Advocate, who appeared for M/s. D.L.F. Universal Limited pointed out that there are two agreements, one entered between the government and the colonizers and the other between the colonizers and the purchasers and in terms of the agreement the colonizers as well as the purchasers are bound to pay the external development charges as determined by the respondent No. 2. Shri Sarin relied on the decision of this Court in Gulmohar Estates Limited and Others Vs. State of Haryana and Another, in support of his argument that enhancement of external development charges cannot be challenged in writ jurisdiction.
The Haryana Development and Regulation of Urban Areas Act, 1975 was enacted by the legislature of the State of Haryana in order to prevent ill planned and haphazard urbanisation in or around the towns in the State of Haryana. Section 2(e), (g), (1), (k) and (m), Section 3(1), (3)(a)(i)(ii), 8(1) and (2) and the Act and Rules 2(b) and (d), 3(1), ll(a), (b) and (c), 12 of the Haryana Development and Regulation of Urban Areas Rules as well as extract of Form LC-IV are reproduced below for ready reference:-
The Act: "2. Definition - In this act, unless the context otherwise requires,-
xx xx xx xx xx (e) "development works" means internal and external development works;
xx xx xx xx xx (g) "external development works" include sewerage, drains, roads and electrical works which may heave to be executed in the periphery of or outside colony for the joint benefit of two or more colonies;
xx xx xx xx xx (1) "internal development works" mean -
(i) metalling of roads and paving of footpaths;
(ii) turning and plantation with trees of open spaces;
(iii) street lighting;
(iv) adequate and wholesome water supply;
(v) sewers and drains both for storm and sullage water and necessary provision for their treatment and disposal; and
(vi) any other work that the Director may think necessary in the interest of proper development of a colony
xx xx xx xx xx (k) "owner" includes a person in whose favour a lease of land in an urban area for a period of not less than ninety-nine years has been granted;
xx xx xx xx (m) "Plot holder" means a person in whose favow a plot in colony has been transferred or agreed to be transferred by the colonizer
xx xx xx xx xx 3. Application for licence. - (1) Any owner desiring to convert his hand into a colony, shall unless exempted u/s 9, make on application, to the Director, for the grant of licence to develop a colony in the prescribed form and . pay for it such fee as may be prescribed. The application shall be accompanied by an Income Tax shall clearance certificate.
(3) After the enquiry under Sub-section (2) the Director, by an order in writing shall
(a) grant a licence in the prescribed form, the applicant has furnished to the Director a bank guarantee equal to twenty five per centum of the estimate cost of development works as certified by the director and has undertaken -
(i) to enter into in agreement in the prescribed form for carrying out and completion of development works in accordance with the licence granted;
(ii) to pay proportionate development charges if the main lines of roads, drainage, sewerage, water supply and electricity are to be laid out and constructed the Government or any other legal authority. The proportion in which, and the time within which, such payment is to be made shall be determined by the Director.
xx xx xx xx xx 8. Cancellation of License. - (1) A license granted under this Act, shall be liable to be cancelled by the Director if the colonizer contravenes any of the conditions of the licence or the provisions of the Act or the rules made thereunder provided that before such cancellation the coloniser shall be given an opportunity of being heard.
(2) After cancellation of the licence, the Director may himself, carry but or cause to be carried out, the development works in the colony and recover such charges as the Director may have to incur on the said development works from the colonizer and the plot holders in the manner prescribed as'' arrears of land revenue.
xx xx xx xx xx The Rules : 2. Definitions - In these rules unless the context otherwise requires:-
xx xx xx xx xx (b) "amenity" includes roads, water supply, street fighting, drainage sewerage, public parks, schools, play grounds, hospitals, community centres and other community buildings, horticulture, landscaping and any other public utility service;
xx xx xx xx xx (d) "Forum" means a form appended to these rules
xx xx xx xx xx 3. Application for licence (Sections 3 and 24). - (1) Any owner of land desirous '' of setting up a colony shall make an application in writing to the Director in form LC-1 and shall furnish therewith;-
(1) a demand draft for a sum calculated at the rate of
(i) two thousand rupees for a colony having an area not exceeding ten acres;
(ii) four thousand rupees for a colony having an area exceeding ten acres but not exceeding twenty acres;
(iii) six thousand rupees for a colony having an area exceeding twenty acres but not exceeding fifty acres, and
(iv) ten thousand rupees for a colony haying an area exceeding fifty acres, as licence fee in favour of the Director and drawn on any scheduled bank;
xx xx xx xx xx 11. Conditions required to be fulfilled by applicant [Section 3(3) ] - The applicant shall:--
(a) furnish to the Director a bank guarantee equal to twenty five per cent of the estimated cost of the development work as certified by the Director and enter into an agreement in form LC-IV for carrying out and completion of development works in accordance with the licence finally granted;
(b) undertake to deposit fifty per cent of the amount to be realised by him from the plot-holders, from time to time, within ten days of its realisation in a separate account to be maintained in a scheduled bank and this amount shall only be utilised towards meeting the cost of internal development works in the colony;
(c) undertake to pay proportionate development charges if the main lines of roads, drainage, sewerage, water supply and electricity are to be laid out and contructed by the government or any other local authority. The proportion in which and time within which such payments is to be made shall be determined by the Director;
xx xx xx xx xx 12. Grant of Licence [Section 3 (3) ] -
(1) After the applicant has fulfilled all the conditions laid down in Rule 11 to the satisfaction of the Director, the Director shall grant the licence in form LC-V
(2) The licence granted under Sub-rule (1) shall be valid for a period of two years from the date of its grant during which period all development works in the colony shall be completed and certificate of completion obtained from the Director as provided in Rule 16.
xx xx xx xx xx Form LC-W
(see Rule 11)
Agreement by owner of land intending to set up a colony.
This agreement made on the____________ day of ____________ one thousand nine hundred and eight_________ between. Shri/M/s S/o Shri _____________ resident__________of _________ (hereinafter called the, owner) of the one part and the Governor of Haryana, acting through the Director, Town and Country Planning, Haryana (hereinafter referred to as the Director) of the other part.
Whereas the owner is in possession of or otherwise well entitled to the land mentioned in Annexure hereto for the purpose of covering into residential/commercial/industrial colony.
And whereas under Rule 11 of the conditions for the grant of licence is that the owner shall enter into an agreement for carrying out and completion of development works in accordance with the licence finally granted for setting up a colony at ___________ Tehsil ____________ and District_______________.
NOW THIS DEED WITNESSTH AS FOLLOWS
In consideration of the Director agreeing to grant licence to the owner to set up the said colony on the land mentioned in Annexure hereto on the fulfilment of all the conditions laid down in Rule 11 by the owner hereby convants as follows:-
(a) xx xx xx xx xx to
(d) xx xx xx xx xx (e) That the owner shall pay proportionate development charges as and when required and as determined by the Director in respect-of external development charges.
xx xx xx xx xx
A careful reading of the provisions quoted above shows that the execution of agreement by the owner who applies for licence is a necessary condition for grant of licence and one of the obligations which the applicant must fulfil is the payment of external development charges which the competent authority is required to undertake in terms of the Act. At what rate and when the external development charges are required to be deposited has been left to be determined by the Director. Thus the levy of external development charges is backed by statutory provisions and the power to detemine the extent of development charges is conferred upon the Director. The licensees/colonizers have not questioned the jurisdiction of the Director to levy the external development charges or enhance the amount of such charges and, in our opinion, they have rightly done so because after having entered into an agreement with the government to pay the external development charges at the rates determined by the Director, the licensees/colonizers cannot plead that the levy of such charges is illegal or without jurisdiction. When the petitioners applied for purchase of land from the licensees/colonizers, they were aware of the fact that in terms of the Act of 1975 and the rules framed thereunder as also in terms of die agreement entered into between the government and the licensee, the latter was required to pay the development charges. All the purchasers like the petitioners entered into agreement with the licensees/colonizers. The relation between the licensees/colonizers and the government may be governed by statute and the contract entered into between the government and licensee/colonizer may have statutory flavour but as far as the purchasers and the licensees/colonizers are concerned their relationship emanates from pure contract. The agreement to sell and the sale deed executed between the purchasers and the licensees do not have their source in the provision of the Act and the rules. Therefore, we find merit in the submission of Shri Hooda and Shri Mittal that after having agreed to pay the amount of external development charges to the licensees/colonizers, the petitioners cannot question the jurisdiction of the respondent Nos. 2 and 3 to enhance the amount of external development charges, There is no privity of contract between the petitioners and the respondent Nos. 1 to 3. Therefore, they are not entitled to question the levy of enhanced external development charges by the respondent No. 2. In our opinion, the petitioners are not entitled to seek issuance of a writ under Article 226 to avoid their contractual obligation. If they felt aggrieved by the demand of enhanced external development charges by the licensees/colonizers, the petitioners should have availed the remedy of civil suit. The jurisdiction of the civil court to adjudicate the dispute between the petitioners and the licensees/colonizers is not ousted by virtue of Section 15 of the Act. That section bars the jurisdiction of the civil court only for resolution of the questions and the rules framed thereunder. It has nothing to do with the private dispute between the purchasers and the licensees/colonizers.
Notwithstanding the aforementioned conclusion, we deem it appropriate to deal with the argument of Shri Sibal and other learned counsel that the demand of enhanced development charges is arbitrary and unjustified. However, before we deal with the submission of the learned, counsel on merits, it will be useful to take notice of the principles of law which govern the adjudication of such disputes.
In Mississippi Valley Barge Line Company v. United States of America (1993) 292 US 282 Justice Cardoze observed that price fixation is not within the province of the Courts and went on to hold:-
"The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which die commission by training and experience is qualified to form........It is not the province of a court to absorb this function itself........The judicial function is exhausted when there is found to be a rational basis for die conclusions approved by the administrative body."
In Railroad Commission of Taxes v. Rowan and Nichols Oil Company (1940) 311 US 570 Justice Frankfurter of the US Supreme Court observed:-
"Nothing in the Constitution warrants a rejection of these expert conclusions. Nor, on die basis of intrinsic skills and equipment, are the federal courts qualified to set their independent judgment on such matters against that of the chosen state authorities..... When we consider the limiting conditions of litigation - the adaptability of the judicial process only to issues definitely circumscribed and susceptible of being judged by the techniques and criteria within the special competence of lawyer - it is clear that the Due Process Clause does not require the feel of the expert to be supplanted by an independent view of judges on the conflicting testimony and prophecies and impressions of experts witnesses."
In Gupta Sugar Works Vs. State of U.P. and Ors, , Jaganatha Shetty, J. observed:-
"the court does not act like a chartered accountant nor acts like an income tax officer. The court is not concerned with any individual case or any particular problem. The court only examines whether the price determined was with due regard to considerations provided by the statute. And whether extraneous matters have been excluded from determination.''''
In M/s. Shri Sitaram Sugar Co. Ltd. and another Vs. Union of India and others, , a Constitution Bench of the Supreme Court dealt with the scope of the judicial review in such matters and observed: -
"Judicial review is not concerned with matters of economic policy. The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The Court does not supplant the "feel of the expert" by its own view. When the legislature acts within the sphere of its authority and delegates power to agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness. In all such cases, judicial inquiry is confined to the question whether the findings of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land.''
In Indore Development Authority Vs. Sadhana Agarwal (Smt) and Others, the Supreme Court directly dealt with the issue relating to charging of enhanced price. After making reference to the observations made in Delhi Development Authority Vs. Pushipendra Kumr Jain, , the Apex Court observed: -
"Although, this Court has from time to time taking the special facts and circumstances of the cases in question has upheld-the excess charged by the development authorities, over the cost initially announced as estimated cost, but it should not be understood that this Court has held that such development authorities have absolute right to hike the cost of flats, initially announced as approximate or estimated cost for such flats.............................................The High Court was justified in saying that in such circumstances, the Authority owed a duty to explain and satisfy the Court, the reasons for such high escalation. We may add that this does not mean that the High Court in such disputes, while exercising the writ jurisdiction, has to examine every detail of the construction with reference to the cost incurred. The High Court has to be satisfied on the materials on record that the authority has not acted in an arbitrary or erratic manner.
So far the facts of the present case are concerned, it is an admitted position that in the proforma attached to the application for registration, the appellant said that the price mentioned by them was a probable and estimated cost, the definite price shall be intimated at the time of the allotment. Thereafter, the appellant had been informing the respondents and others who had got themselves registered, from time to time regarding the escalation in the cost of the flat. One of the reasons for the rise of the price for the L.I.G. flat from Rs. 60,000/- to Rs. 1,16,000/-appears to be the increase in the area of the flat itself from 500 square feet to 714.94 square feet. From 1982 to 1984, possession of the flats could not be delivered because of the dispute pending in the Court which also contributed to the increase in the cost of the flat. Admittedly, the respondents came in possession of the flats in the year 1984. In the facts and circumstances of the case, we are satisfied that no interference was called for by the High Court."
In Chandigarh Housing Board v. K.K. Kalsi and Ors. 1996 (2) All L J 554 a Division Bench reversed the judgment of the learned Single Judge quashing the demand of enhanced price made by the Housing Board. While doing so, the Court reviewed several decisions and held:
"From the present trend settled by the judgments of the Supreme Court the decision making process and the decisions of the authorities taken thereupon are certainly open to judicial review, but what is more material is the extent of judicial review. Distinction has to be drawn between appellate authority, appellate Court and the courts exercising such powers under writ jurisdiction. If the basis of the decisions are apparently unreasonable, wholly irrational, unfair arbitrary or erratic, the court would interfere in such process and consequently interfere in the action taken pursuant thereto, but once a proper and satisfactory explanation is tendered, then it may not be permissible for the court to go into the niceties of accountancy and minute details of accounts in such cases. Some elements of bona fide would have to be attached to such welfare schemes and their implementation. Every hardship or unreasonableness pleaded by the petitioner of an applicant may not fall within this purview and scope of judicial review...................
Investigation and determination into costing factors and head of expenditure incurred by such Boards beyond the circumscribed dimensions of writ jurisdiction is not permissible. Any transgression of such jurisdiction would have the effect of converting this extraordinary writ jurisdiction into an ordinary, remedy, that too, without affording the affected parties opportunity to leading evidence etc. in accordance with law and it likely to affect the rights of the parties adversely. There can be no doubt that actions of such authorities are not immune from judicial scrutiny. The limits imposed under the basic rule of law, that of fairness, reasonableness, larger public interest and action being free of arbitrariness are the relevant considerations before a Court of law while exercising powers of such judicial review. Enquiry by the Court into such matters is permissible, it has to be definite but is limited, it is purposeful but avoids investigations by use of magnifying glass, to judge fairness in State action without substituting its own view for that of the authority is to ensure achievement of large public interest and purpose, but keeping in view the nexus sought to be achieved by implementation of the achieved by implementation of the scheme within its purpose."
In view of the above precedents, it must be treated as a settled principle of law that although decisions of the administrative authorities in the matters involving fixation of price and demand of enhanced price are not altogether immune from judicial review, the Court must be extremely slow to interfire with the decision taken by the government and the statutory authorities in such matters. The Court cannot go into the niceties of the methodology adopted for determination of the price/development charges nor can it reevaluate the various factors which may have weighed with the competent body to arrive at a particular figure. The Court cannot interfere with the judgment of expert bodies merely because on a review of the material placed before it, the Court can come to different conclusion. It has also to be kept in mind that the Court will ordinarily not relieve the parties from the obligations voluntarily incurred by them by entering into agreement with the public authorities even though such agreements may have been provided in the Act or the rules framed thereunder. The scope of interference by the Court is limited to the cases in which the decisions of the administrative authorities/expert bodies is vitiated by mala fides or patent error or where there is a wholesome reach of the provisions of law.
Keeping these principles in mind, we shall now examine whether the demand of external development charges is wholly arbitrary or unreasonable warranting intervention by the Court. In order to rebut the charges of arbitrariness levelled by the petitioners, the respondents have detailed out the circumstances and the factors which are responsible for raising of the demand of enhanced external development charges. The explanation given by the respondent Nos.1 to 3 is contained in paras 4 and 11 of the reply, a portion of which is extracted below: -
"4......The external development charges are fixed by the answering respondent on the basis of the estimated cost of works. Thus estimated cost of the external development is worked out by respondent No. 3 i.e. H.U.D.A. As already stated in para No. 1 of the written statement, in the year 1982-83, the colonizer (respondent No. 4) was required to pay external development charges at the rate of Rs. 1,67,300/- per gross acre within a period of two years in terms of the agreement but the colonizer adopted dilatory tactics by making frequent representations for the revision of the external development charges and for the deferment of the payments due. The full amounts of external development charges are yet to be realised. The development charges at the rate of Rs. 3,72,000/- per gross acre were, fixed as decided in H.U.D.A. meeting held on 19/20.12.1987. On the basis of considerations explained in para 1. The aforesaid external development charges were fixed after taking into consideration the estimated cost of external development works to be executed by H.U.DA. The aforesaid rates at the rate of Rs. 3.72, lacs per gross acre were revised keeping in view the increase in the cost of works. The cost of external works has also been distributed upon areas where the development was going on and areas for future development. The other element which weighed in arriving the price of external development charges was the cost of community building (Which itself amount to Rs. 61,000/- per acre) which is normally the responsibility of the colonizers. However, the colonizers have not discharged this responsibility. This element was included to ensure that such facilities were definitely provided and are not allowed to be left out of the colonizers.. It was specifically mentioned in the impugned order at Annexure P.2, that no recovery shall be made by respondent No. 4 from the plot holders on this account. It is correct that approximately Rs. 40 crores had been received as mentioned by the petitioner. Out of this amount the major amount of Rs. 28 crores have been received only after September 1987. This amount of Rs. 40 crores represents less than 40% of the estimated recoverable amount from the colonizers. It is incorrect to suggest that there has been very inadequate revisions of external services which jeopardize expeditious development of these colonies. In view of the past record of payment by colonizers the Government feels that external development works should be taken up in full swing only after full payment has been made otherwise the works would be jeopardized, for paucity of funds. Government cannot divert funds from other projects for this work. The investment made in projects left incomplete for want of funds would become an exercise in futility. Such projects should not be allowed to become a liability for the State and the tax-payers. Respondents are fully aware of the need to develop a sound and adequate infrastructure for the rapidly expending population in the vicinity of Delhi. Costs for provisions of essential services have been escalating in the last few years alongwith the phenomenal increase ill land prices. Respondents are determined and anxious to provide essential services of a very high standard to these intending to settle in residential colonies in Gurgaon. The facts are that projects for the major external development works viz water supply, sewerage, drainage, have already been finalised and approved by the competent authority. The work on sewerage services is already in hand and about 22 Kms. of sewerage has been laid. Similarly, the water supply projects which involves bringing canal water from WJC system upto Gurgaon involving a length of about 70 Kms. has been finalised by the Irrigation Branch of PWD Haryana and part funds have been advanced to the irrigation Department for taking work-in hand. The work of procurement of material is at an advanced stage and tenders for sewerage treatment plant have also been invited. The land required for the water treatment plant of Gurgaon is also under process of acquisition. The link roads for connecting the various colonies to the main arterial system have also been completed in major portion of the area. In the meanwhile arrangements are , already in hand to provide interim arrangements for sewerage, water supply, services, where-ever required. It may, however, be added that within the completion of internal facilities within a colony, which is the responsibility of the colonizers, it should be possible for the plot-holders to complete, their construction work. Sectors developed by H.U.D.A. in adjacent areas already having a substantial inhabiting population. Interim arrangements of external development are enough to sustain the satisfactory operation of internal services that may have been developed in colonies. Initially the services provided by the colonizers are supposed to take care of the immediate needs of plot-holders. The long term arrangements are to be made by H.U.D.A. There is full justification for the increase of the rate of external development charges to Rs. 3.72 lacs per gross acre, because of price escalation............
xx xx xx xx 11.............The facts are that projects for the major external development works viz. water supply, sewerage, drainage have already been finalised and approved by the competent authority. The work on sewerage services is already in hand and about 22 Kms. of sewerage has been laid. Similarly, for water supply, a novel project for bringing canal water from WJC system upto Gurgaon involving a length of about 70 Kms. has been finalised by the litigation Branch of PWD, Haryana and part funds have been advanced to the Irrigation. Department for taking work in hand. In the meanwhile local sources have been developed for making water supply available. The work of procurement of material is at an advanced stage and tenders for sewerage treatment plant have also been invited. The link roads for connecting the various colonies to the main arterial system have also been completed in major portion of the area. In the meanwhile arrangements are already in hand to provide interim arrangements for sewerage water supply, services, where-ever required. It may, however, be added that with the completion of internal facilities within a colony, which is the responsibility of the colonizers, it should be possible for the plot-holders to complete their construction work, Sectors, developed by H.U.D.A. in adjacent areas are already having a substantial inhabiting population. H.U.D.A. is confident of providing satisfactory support source to the internal services made operational by colonizer.
That in reply to para No. 12 of the writ petition, it is submitted that in the year 1987, the development charges were worked out to Rs. 2.41 lacs per gross acre which were revised to Rs. 3.72 lacs per gross acre, keeping in view the increase in the cost of external works. The cost of external works has been distributed upon areas where development is going on and areas for future development and where it was possible to recover such development charges H.U.DA. had already recovered their changes from its own new sectors. The other element which weighed in arriving at the price of external development charges was the cost of external community building (which itself amount to Rs. 61,000/- per acre) which is the responsibility of colonizer. Thus element was included in the interest of plot-holder and future residents as the colonizers have not provided these services so far. The increase in the external development charges has been necessitated by non-payment of external development charges in the past by colonizers and the resultant price escalation. Moreover, the external development charges are determined by the respondent No. 2 keeping in view the estimated cost of external development worked out by respondent No. 4."
In the meeting of the H.U.D.A. held on 20th December, 1987, the issue of enhancement of external development charges Were examined threadbare. The authority considered the following parameters, for evolving the external development charges
"(a) The size of the estate is 9600 acres with the following break-up:
i) Residential: old H.U.D.A. Sectors : 2000 acres New H.U.D.A. Sectors: 1650 " Licence granted to colonizers for development: 2763 acres Area under pocket to be developed : 937 acres ii) Commercial: 350 acres iii) Industrial: Old H.U.DA. Sectors : 300 acres New H.U.D.A. Sectors : 600 acres HSIDC & Maruti : 1000 acres 9600 acres (b) Total population according to Master Plan. Population of Municipal area of old township : 1 Lacs Population of the Urban Estate : 6 Lacs
(c) Design parameter : As per H.U.DA. norms: (d) Engineering & Land Costs; Item Cost (Rs. Crore Water Supply 47.00 Sewerage 17.70 Drainage 16.70 Roads/Bridges 26.75 Community Buildings 48.00 Horticulture & Street Lighting 3.84 Maintenance of Roads & Public Health Services for 5 Years 7.68 Total - 167-67 (e) Amount already recovered/recoverable from H.U.D.A. Sectors 11.61 crores - Balance now to be recovered: 156.06 crores (f) Gross area over which the charges are to be distributed (i) Colonizers Land: 2763 acres Land under pockets : 937 acres 3700 acres (ii) New H.U.D.A. Sectors 1650 acres (iii) Commercial 350 acres (iv) 600 acres: New Industrial area to be charged at 30% 180 acres 5880 acres Since the services to be provided to industrial area would be roughly 30% of the services provided in residential areas, only 30% of the cost per acre (gross) would be recovered from future industrial sectors, to be developed.
On the basis of the above parameters, the external development charges work out to Rs. 3.72 lacs/gross area as per calculations given in the annexure."
The calculation-sheet to which reference has been made in the above quoted parameters is also reproduced below:-
"CALCULATIONON SHEET
Total area of Urban Estate, Gurgaon 9600 acres Gross area over which external development charges are to be distributed : 5880 acres Cost of Engineering Works Rs. 167.67 crores Less funds available from H.U.D.A. Sectors, already developed/under development: Rs. 11.61 crores Rs. 156.06 crores Rs. 156.00 crores (Costs in Rs. crores) Say Rs. 156.00 crores. Works Costs Land Cost Total Cost Basic costs 120.00 36.00 156.00 Add 44% overheads 15% Admn. 52.80 3.60 (25% escalation) charges on basis plus escalation) and 10% on land cost. Add 5% unforeseen charges on basic cost of works 6.00 - 6.00 178.00 39.60 218.40 Development cost per gross 218.40 Rs. 3,71,420 say acre for external services (5880 acres area) 5880 : Rs. 3.72 lacs per gross acre."
It is thus evident that the respondents determined the amount of development charges after taking into consideration the relevant factors and the cost of facilities to be provided to others have not been taken into consideration in its entirety while determining the rate of development charges per gross acre. Their is no merit in the argument of Shri Sibal and others that the demand of external development charges is arbitrary, unreasonable or unjust.
It has not been shown to the Court that the colonies being developed by the licensees are adjacent to one another. In fact Shri Hooda made a statement that the various colonies are scattered in different areas. Therefore, if benefit of some amenities are made available to the people living between the two colonies or the industries which may fall in between various colonies, the petitioners cannot accuse the respondents of having acted arbitrarily by demanding enhanced development charges from the licensees/colonizers.
On the basis of the above discussion. We hold that the writ petitions are without substance and the same are liable to be dismissed. Each of the petitioners pay costs of Rs. 5,000/- of which Rs. 3,000/- shall be payable to the respondent Nos.1 and 2 and Rs. 2,500/- to the H.U.D.A.