P.N. Verma and Others vs Union of India (UOI) and Others

S. Ranganathan, J.—This writ petition highlights the various types of difficulties that have to be faced by the Delhi Development Authority (hereinafter called ''the DDA'') and allottees of houses in Delhi in the implementation of the former''s Self Financing Schemes (hereinafter referred to as ''the SFS'') which have now caught on, not only in Delhi but also elsewhere in India, as perhaps one of the practical and effective solutions to meet the country''s shortage of housing accommodation and to forestall speculation and racketeering by private agencies at the cost of the ordinary citizen. The controversy arises out of the first of such schemes inaugurated by the DDA in 1977.

The DDA announced in the newspapers towards the end of August, 1977 (e.g. vide ''Hindustan Times'' dt. the 28th Aug. 1977) the introduction by it of a new scheme under which it sought to enable people interested in having a flat in Delhi to "own your house". Para 2 pf the announcement read:

The Scheme which, will be called ''Self Financing Housing Registration Scheme (1977)'' seeks financial participation of the intending purchasers during the process of the construction of flats. This would help not only in increasing the housing activity in the capital but will also help in bringing about people''s involvement in DDA''s housing programme.

Registration under the scheme was to commence on 15-9-1977 and close on 30-11-1977.

The Self Financing Scheme:

Under the scheme, the DDA proposed to construct three categories of multi-storied flats, viz., Categories I, II and III the broad accommodation available under each of which was indicated. Persons who registered under the Scheme had to pay a sum of Rs. 10,000/- on registration and the "payment of cost of flat" was to be made on instalment basis according to the following schedule:

(i) 25% (including the sum of Rs. 10,000) at the time of acceptance of the application for the scheme;

(ii) Half-yearly payments after the acceptance of the application in relation to the time of such acceptance:

(a) 20% at the end of six months.

(b) 25% at the end of one year.

(c) 20% at the end of one and half years.

(iii) 10% when required to take over possession.

The details of the scheme were elaborated in a pamphlet issued by the DDA soon afterwards. Para 1 of the pamphlet explained:

...The scheme has been formulated to obtain financial participation of the intending purchasers during the process of construction, so that the flats could be constructed with people''s money over and above those now being constructed with the financial resources of DDA.

It proceeded to set out the scheme of instalment payment referred to above, the registration deposit of Rs. 10,000/- carrying interest from a specified point of time till adjustment against the first instalment of 25% or repayment. Para 9 of the pamphlet, which is important, read as follows:

The estimated cost of flats on each floor would be announced whenever specified schemes have been prepared taking into consideration the location of each scheme, specifications and design of flats, cost of construction prevailing at the time of the execution of the scheme, fluctuations in other cost factors.

It proceeded to enumerate several other terms and conditions with which we are not here; concerned.

Saket Housing Project: The first project under the above scheme was announced in the newspapers (vide Hindustan Times dt. 30th June, 1978) at Malviya Nagar (Saket) in South Delhi. Applications were invited till 31st Aug. 1978 from persons who had registered under the scheme "for allotment of flats, garages and servant quarters of Categories I, II and III in Blocks F, H, K and N in the above locality".

It was proposed to construct 796 flats as per the details given below:

______________________________________________________________________________________ Cate- No. of No. of Plinth Area Accommodation Tentative gory Block Flats provided Cost ______________________________________________________________________________________ I ''K'' 160 76 Sq. mtrs. Living Room, Bed Room Rs. 60,000/- ''N'' 120 with Toilet Lounge, Kit- to chen, Store, Additional Rs. 70,000/- WC, Open Terrace. II ''F'' 36 83.4 Sq. mtrs. Living Room, Two Bed Rs. 75,000/- ''H'' 152 Rooms, Two Toilets, Lou- to ''K'' 80 nge, Kitchen, Store, Rs. 85,000/- ''N'' 60 Front & Back courtyards. III ''F'' 36 129 Sq. mtrs. Living Room, Lounge, Rs. 1,10,000/- First Floor; 75 Bed Room with Toilet, to Sq. mtrs. Seco- Kitchen, Store, Additional Rs. 1,25,000/- nd Floor. WC, Terrace. ''L'' 152 54 Sq. mtrs. Two Bed Rooms, Toilet, Water Closet, Two Terraces. ______________________________________________________________________________________

The allotment was to be decided on the basis. of lots if the number of applications exceeded the number of available flats. A certain number of car/scooter garages and servants'' quarters (136) were also to be constructed but these were to be allotted on payment of extra cost by the allottees of the flats who asked for them (if necessary, by lots) and the cost of these were given separately in a brochure containing all the relevant details and plans and an application form.

The brochure, made available on payment simultaneously or soon after, was a bulky printed document. A slip was attached to the opening page of the brochure which reads:

Cost

The estimated cost of Category I (One Bed Room), Category II (Two Bed Rooms) and Category III (Three Bed Rooms) flats is Rs. 55,000/-, Rs. 85,000/- and Rs. 1,15,000/- respectively. The respective estimated cost of servant quarters and garage is Rs. 15,000/- and Rs. 14,000/-. The actual cost, however, may vary depending upon the cost of construction at the time of execution and fluctuations in other cost factors.

The brochure enumerated several terms and conditions but it is sufficient for our purpose to notice only a few of them: (a) Consequent on an expectation that the construction could be completed within a time span of 15 months (as against 24 months originally expected), the schedule of instalment payments was revised, enabling the DDA to call for the second to fourth instalments at intervals of "three to six months" in place of the earlier half-yearly intervals; demand letters indicating the prescribed dates up to which the payments were required to be made, as per the above schedule, were to be issued and complied with promptly: Para 6; (b) The allottee was to be entitled to delivery of possession of the flat only after he had completed all the formalities, paid all the dues and furnished and executed all the documents as required in the demand-cum-allotment letter or the DDA (Management and Disposal of Housing Estates) Regulations, 1968 (hereinafter referred to as ''the 1968 Regulations''): Para 10; (c) The property was being offered on as "as is where is basis" and the DDA would not entertain "any request for additions and alterations or any complaints whatsoever regarding property circumstances as defined in para 19 of the Regulations referred to above or about the cost of the flats, its design, the quality of materials used, workmanship or any other defect": Para 10; and (d) the allottees were required to pay a surcharge to the DDA at the rate of 2�% of the land value per year for maintenance of road, water supply, drainage, sewerage, street lighting and other civil services within the housing estate till such time these services were taken over by the Municipal Corporation of Delhi (MCD), the surcharge for the first year being payable at the time of making the last instalment: Para 14.

Illustrative Facts:

The controversy between the petitioners in a batch of writ petitions (of which C. W. 190/81 is one) and the DDA arises out of the demand, by the DDA, from each of allottees-petitioners for the payment of a "cost" for the flat allotted to him of an amount much in excess of the estimated cost indicated earlier. It will be convenient at this stage to explain the nature of the problem by means of a reference to the facts and figures in the case of one of the petitioners in C.W. 190/81. We shall take up the case of the fourth petitioner, Satya Bhushan Puri. He had registered himself under the scheme by paying the initial deposit of Rs. 10,000/-. When the Saket Project was announced, he made application No. 747 on, 28-8-1978 for the allotment of a Category III flat (with garage and servants'' quarters). On 20-12-1978, he was informed by the DDA that he had been declared successful for the allocation of a Category III flat in ''H'' Block in a draw of lots held on 16-11-1978, the allocation being subject to the conditions stipulated in the 1968 Regulations. The "estimated cost of the flat" was mentioned as Rs. 1,15,000/- same as was mentioned in the brochure earlier referred to and the petitioner was called upon to pay within one month the first instalment of Rs. 18,075/- (Rs. 28,750/- (being 25% of the cost) less Rs. 10,675/- (being the amount of the initial deposit and interest thereon)). The allotment letter also set out several other terms and conditions which are not relevant for our present purposes. This was followed by demands for Rs. 7,250/-, Rs. 23,000/-, Rs. 5,800/-, Rs. 28,750/- and Rs. 7,250/- on 30-12-1978, 2-6-1979, 2-6-1979, 27-12-1979 and 27-12-1979 respectively in respect of the second and third instalments for the flat and first to third instalments for the garage and servants'' quarters as per the terms contained in the brochure and the allotment letter. On 6th May, 1980, the petitioner was called upon to pay Rs. 23,000/- being the amount of the fourth instalment in respect of the flat. A similar demand in respect of the fourth instalment on the garage and servants'' quarter was apparently also made though this demand notice has not been placed on record. In compliance with these notices, the petitioner paid Rs. 1,03,500/- towards the cost of flat and Rs. 26,100/- towards the cost of the servants'' quarter (Rs. 13,500/-) and garage (Rs. 12,600/-). As per the original letters of allotment, a balance of Rs. 11,500/- in respect of the cost of the flat and Rs. 2,900/- in respect of the garage remained to be paid by the petitioner on the date of delivery of possession of the premises to the petitioner by the DDA. While so, the petitioner was, it is said, shocked to receive from the DDA two demand letters dt. 6-12-1980 and 16-1-1981 for payment of substantially larger amounts before the delivery of possession of the premises could be given to him. By the first of these letters, he was informed that the total cost of the flat was Rs. 1,45,800/- and that he should pay a sum of Rs. 42,300/- as the last and final instalment. By the second letter, he was told that the total cost of the servants'' quarters was Rs. 27,300/-and that of the garage was Rs. 21,600/- and that he had to pay balance amounts of Rs. 13,800/- and Rs. 9,000/- as the last and final instalment. After making an addition of Rs. 47/- in respect of each of these items which is not in dispute, the petitioner was called upon to pay Rs. 42,347/- and Rs. 22,894/- respectively within one month of the dates of these letters.

The position in respect of the other petitioners-allottees is similar. For purposes of comparison, the figures of total cost announced by the DDA at various stages may be tabulated as follows:

______________________________________________________________________________________ Category of flat Original Price in Estimated Cost Actual cost as % age incre- announcement as per brochure finally deter- ase in cost mined* _______________________________________________________________________________________ Category I Rs. 60-70 thousand Rs. 55,000/- Rs. 86,800/- 57.8 Category II Rs. 75-85 thousand Rs. 85,000/- Rs. 1,05,200/- 23.8 Category III Rs. 1,10,000 to Rs. 1,15,000/- Rs. 1,46,400/- 27.3 Rs. 1,25,000 Car/Scooter Garage- Rs. 14,000/- Rs. 21,600/- 54.3 Servants'' quarters-- Rs. 15,000/- Rs. 27,300/- 82 *There are some small variations in the figures from case to case depending upon the actual plinth area of the flat, which is not of much importance.

The petitioners made several representations to the DDA and higher authorities protesting against the enhancement and seeking information regarding the details of the cost and the basis for the determination of the prices of the flats. These having been unsuccessful, the petitioners have approached the court praying:

(a) that the demands for the final instalments, as raised, be quashed as arbitrary;

(b) that the DDA be directed to render a true and faithful account of the actual cost of the flats, garages and servants'' quarters; and

(c) that the DDA be restrained from cancelling, or treating as automatically cancelled, the allotments made in favour of the petitioners on the ground of non-payment of the final instalments as demanded.

There was also a prayer for delivery of possession pending the decision of the writ petition in respect of which directions have already been issued.

Preliminary Objections:

Before proceeding to discuss the contentions on merits, it is necessary to deal with certain preliminary objections raised by the respondents regarding the maintainability of the writ petition. The first and principal objection raised is that the disputes between the parties arise out of a contract between the petitioners and the DDA and even assuming, at the most, that the DDA has committed a breach of contract in demanding a higher price for the flats, garages and servants'' quarters in violation of their previous undertaking regarding cost, the remedy of the petitioners can only be by way of a suit for specific performance or otherwise and not by way of a writ petition. It may appear, at first sight, that this is a valid argument and that the petitioners should not be allowed to ventilate by means of a writ petition grievances in the domain of contract (i.e. in relation to mutual obligations arising out of an offer by the DDA of a constructed flat on certain conditions and each of the petitioner''s acceptance of the same). The real position is not as simple as that, for one has to look not merely at the contract that appears to have been entered into by the parties but a little further than that, into the source of the authority under which the DDA has promulgated the SFS, in general, and the Saket Housing Project, in particular. When one does that, the following position is seen to emerge.

Statutory background:

It is well known that, following the partition of this sub-continent and the achievement of independence, there has been a phenomenal growth in the city''s population. There came into being a number of sprawling residential colonies without proper layouts, conveniences and amenities. With further increase in the importance of Delhi as the capital of India and vast influx of people into the city from all parts of the country, several problems were created due to speculation in land, mushrooming of unauthorised and unplanned colonies and shortage of housing accommodation. To check the haphazard and unplanned growth of the city, a Delhi Development (Provisional) Authority and a Town Planning Organisation were set up in Nov./Dec. 1955. The Town Planning Organisation produced an Interim General Plan providing an outline for the planned development of the city during the next two or three years, pending the preparation of a comprehensive long run plan. The statutory base for the planned development of Delhi followed soon after by the enactment of the Delhi Development Act, 1957. The DDA, constituted on 30-12-1957 under the Act, drew up a Master Plan for the city which was finalised on 1st Sept. 1962. We may now notice some of the provisions of the Delhi Development Act, 1957.

Chapter I of the Act is preliminary and sets out the relevant definitions. Chapter II deals with the DDA and its objects: Section 3 constitutes the DDA and Section 6 enumerates the objects of the Authority thus:

The objects of the Authority shall be to promote and secure the development of Delhi according to plan and for that purpose the Authority shall have the power to acquire, hold, manage and dispose of land and other property, to carry out building, engineering, mining and other operations, to execute works in connection with supply of water and electricity, disposal of sewage and other services and amenities and generally to do anything necessary or expedient for purposes of such development and for purposes incidental thereto:

Provided that save as provided in this Act, nothing contained in this Act shall be construed as authorising the disregard by the Authority of any law for the time being in force." Chapter III details the procedure for drawing up the Master Plan and the Zonal Development Plans and Chap. III A deals with the procedure for modifications thereto. In Chap. IV, which deals with the development of lands, Section 12 empowers the Central Government to declare any area in Delhi as a ''development area'' and the DDA is given the exclusive authority of controlling the development of land within the area. Chapter V deals with the acquisition and disposal of land. u/s 15, if the Central Government is of opinion that any land is required for purposes of development or for any other purpose under the Act, it may proceed to acquire the land under the provisions of the Land Acquisition Act (I of 1894). After taking possession of the acquired land, it is handed over by the Government to the DDA (or other local authority) for pursuing the purpose of acquisition. But, for this, the DDA (or other authority) has to pay to the Government the amount of compensation which the Government has to award for the acquisition and other incidental charges. Section 21 which enables the DDA (or other local authority) to dispose of the lands is relevant and important for our present purposes. It runs:

21(1). Subject to any directions given by the Central Government under this Act, the Authority or, as the case may be, the local authority concerned may dispose of--

(a) any land acquired by the Central Government and transferred to it, without undertaking or carrying out any development thereon; or

(b) any such land after undertaking or carrying out such development as it thinks fit, to such persons, in such manner and subject to such terms and conditions as it considers expedient for securing the development of Delhi according to plan.

(2) The powers of the Authority or, as the case may be, the local authority concerned with respect to the disposal of land under Sub-section (1) shall be so exercised as to secure, so far as practicable, that persons who are living or carrying on business or other activities on the land shall, if they desire to obtain accommodation on land belonging to the Authority or the local authority concerned and are willing to comply with any requirements of the Authority or the local authority concerned as to its development and use, have an opportunity to obtain thereon accommodation suitable to their reasonable requirements on terms settled with due regard to the price at which any such land has been acquired from them;

Provided that where the Authority or the local authority concerned proposes to dispose of by sale any land without any development leaving been undertaken or carried out thereon, it shall offer the land in the first instance to the persons from whom it was acquired, if they desire to purchase it subject to such requirements as to its development and use as the Authority or the local authority concerned may think fit to impose.

(3) Nothing in this Act shall be construed as enabling the Authority or the local authority concerned to dispose of land by way of gift, mortgage or charge, but subject as aforesaid reference in this Act to the disposal of land shall be construed as reference to the disposal thereof in any manner, whether by way of sale, exchange or lease or by the creation of any easement right or privilege or otherwise.

Section 22 confers similar powers on the Central Government to hand over lands belonging to the Union of India to the DDA for purposes of development and on the DDA to deal with these lands, if necessary, after developing the same, in accordance with rules made, and directions given, by the Central Government in this behalf. Section 22A also confers on the DDA the power to carry out the development of any land placed at its disposal u/s 15 or Section 22, even if it is situated in any area which is not a development area. Section 40A enables the recovery of any amounts payable to the DDA as if they were arrears of land revenue. Section 56 of the Act enables the Central Government (after the first occasion of framing rules) in consultation with the DDA, to frame rules and Section 57 enables the DDA (after it is constituted, with the previous approval of the Central Government) and the Central Government (before that), to make regulations consistent with the Act and the rules to carry out the purpose of this Act. Both the rules and regulations are required u/s 58 to be laid before Parliament.

In exercise of the powers conferred by Sections 56 and 57, rules and regulations have been framed. We may now notice the relevant provisions of the Delhi Development Authority (Management and Disposal of Housing Estates) Regulations, 1968 which have a bearing on the issues in the present case. Under Regulation 1, the regulations are to apply "to those schemes in which built up properties are to be disposed of by way of sale or hire-purchase." Regulation 2 defines, inter alia, the expressions: allotment letter, allottee, application form, conveyance deed, flat, housing estate, property circumstances and registered agency, but these definitions need not be set out here. Under Chap. II which pertains to terms and conditions of disposal of property, the powers of the DDA are vested in the Vice Chairman subject to the guidance and resolutions of the DDA with a power of delegation to any other officer of the DDA. Regulations 4 to 8 may be noted:

Execution of agreements--All agreements made under these regulations shall be executed on behalf of the Authority by the Vice-Chairman or such officer as may be authorised by him in this behalf.

Disposal of Property--The disposal of a property shall be effected by either hire- purchase or sale or in such other manner and subject to such terms and conditions as may be decided by the Authority from time to time.

Fixation of Price--The hire-purchase price or the disposal price, as the case may be, shall be such price, as may be determined by the Authority.

Eligibility of Allotment--A dwelling unit or flat in the Housing Estates of the Authority shall be allotted only to such person who or his wife/her husband or any of his/her dependants, relations including unmarried children, does not own in full or in part on free hold or lease hold basis a residential plot or house in the urban area of Delhi, New Delhi and Delhi Cantonment.

Manner of Payment of Disposal Price--

(1) When a property is disposed of by sale, every applicant shall deposit a sum equal to 20 per centum of the disposal price of the property rounded to the next hundred along with the application. Such deposit shall be non-interest bearing.

(2) An applicant to whom the property has been allotted shall have to pay the balance amount of the disposal price (i.e., after adjusting the deposit) within such period as may be specified in the allotment letter.

(3) If the applicant fails to pay the amount within the said specified period, the allotment shall be cancelled and a sum of money equal to 20 per centum of the deposit shall be forfeited and the balance refunded.

(4) In the case of such applicants as have not been allotted any property, the deposit specified in Sub-regulation (1) shall be refunded.

(5) The Authority shall have the sole and exclusive right over the deposit till it is adjusted or refunded with or without deduction as provided in these regulations.

Chapter III sets out the procedure for disposal of property. The issue of a public notice, the making of applications and their scrutiny, the constitution of an allotment committee, the drawing of lots, intimation of allotments and the maintenance of a waiting list to fill up vacancies in allotment are all provided for in detail in Regulations 21 to 35. Regulation 37, which relates to handing over of possession of property in cases of sale, reads:

Handing over of Possession of Property (Sale)--When the property is disposed of by way of sale, the possession of the property shall be handed over to the allottee, after such allottee has made the required payments and the possession of the common portions and common services in the Housing Estate shall be handed over to the Registered Agency of which such allottee is a member after such Agency has been duly registered and the agreement with regard to common portions and common services has been executed as ''prescribed in Regulation 55.

Chapter IV deals with Registered Agencies. In Chap. V Regulation 55, which deals with the transfer of ownership to an allottee (i.e., a person to whom property has been allotted by way of sale) is important. It runs:

Transfer of Ownership to Allottee--When the property is disposed of by way of sale, the allottee shall become the owner only after the full disposal price and all other dues have been paid by him to the Authority and the transfer of the property has been effected through a Conveyance Deed executed in such form as may be prescribed by the Authority and the common portions and common services have been transferred to the Agency through a Conveyance Deed executed in such form as may be prescribed by the Authority.

It is within the framework of the above Act and Regulations that the Self Financing Scheme and the Saket Housing Project have been evolved. It is contended for the petitioner that, in view of these statutory foundations on which the contract between the parties rests, it would follow that the rule against writs being available to secure performance of contracts is not a bar to the entertainment of these writ petitions. In fact, counsel for the petitioners, S/S Mridul & Lokur, went one step further and sought to justify the maintainability of the writ petitions on three alternative bases:

(a) The contract between the parties is not a simple voluntary agreement between parties but one hedged in by statutory restrictions in all its aspects and hence amenable to writ jurisdiction;

(b) Even assuming that the contract pertains to a "non-statutory field" the dispute relates not to the contract but to a "pre-contract" area of operation; in this area, the principle of promissory estoppel will operate and can be enforced by means of a writ petition; and

(c) Even if the dispute between the parties is taken as pertaining purely to the contractual field, the doctrine of "approbate and reprobate" will apply and the respondents can be restrained, by the issue of an appropriate writ, from going back on their original promise.

We shall proceed to consider these aspects in turn.

The Parmar case: So far as the first contention is concerned it is contended on behalf of the respondent that the issue is already concluded by the decision of the Supreme Court in Premji Bhai Parmar and Others Vs. Delhi Development Authority and Others, . That also pertained to a similar scheme promulgated by the DDA viz., the Middle Income Group (MIG) Housing Scheme and the argument is that the decision and observations in the above case fully cover the present case. Since this decision has been relied upon, not only in support of the preliminary objection but on certain aspects of the merits as well, it is necessary to refer to this decision at some length. In that case, the DDA constructed flats under the MIG scheme at Rajouri Garden, Prasad Nagar and Lawrence Road. Some of the petitioners had got themselves registered with the DDA for allotment of the flats to be constructed under the scheme and in accordance with the terms and conditions of the scheme. When the flats were ready, the DDA issued a brochure which, inter alia, set out the price in respect of each flat and the details in respect thereof. They applied for flats on the basis of the brochure, made the initial deposits required of them and eventually were (on the basis of lots) allotted the flats on payment of the amount mentioned in the letters of allotment. They paid these amounts and got possession of the property. After some time, they discovered that although the cost of each flat, worked out in accordance with the formula prescribed by the DDA, should have been between Rs. 51,800/- and Rs. 55,600/- depending upon the area, extra balcony etc., each one of them had been called upon to pay amounts varying between Rs. 55,000/- to Rs. 60,000/-. This, "they found, was because a surcharge of Rs. 3.000/- to Rs. 6,000/- per flat had been collected from them by the DDA. (The position in the case of all the petitioners was similar, there being only a difference in the figures of cost and Surcharge.) They challenged the collection of this surcharge in writ petitions filed under Article 32 of the Constitution on several grounds:

(a) that it had no nexus to the object for which the DA was set up and was in reality in the nature of a premium or profit which the DDA, being a statutory body formed with the object and avowed policy of working on a "no-profit-no-loss" basis, was not entitled to collect and, perhaps realising this, collection of surcharge had been done away with effect from May 10, 1978.

(b) that no such surcharge had been levied or collected from other allottees of flats in some other M1G schemes prior to Nov. 1976 or after Jan. 1977 and, therefore, the levy and collection of surcharge from the petitioners amounted to discrimination and violated Article 14 of the Constitution; and

(c) that the assertion of the authority that the surcharge was levied and collected with a view to finance other housing projects (for low income groups and janata and community personnel service (CPS) dwelling units) intended to provide weaker sections of the society with houses at less than cost price was belied by the undisputed facts.

A preliminary objection was raised by the DDA to the maintainability of the writ petitions. It was contended that the petitioners had come to the court not for the enforcement of a fundamental right but for a relief of reopening concluded contracts. It was also pointed out that, if the court accepted the contentions of the petitioners, "they would derive an advantage over others who may not have applied for flats because of the price set out in the brochure and, if surcharge is excluded, they may have applied for flats at a lower price." (underlining ours). The Court was inclined to uphold this objection though, the petitions having been admitted, it also proceeded to discuss the contentions regarding the merits. The court observed (Para 8):

Though we are not inclined to reject the petitions on this preliminary objection as we have heard them on merits it is undeniable that camouflage of Article 14 cannot conceal the real purpose motivating these petitions namely, to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained and petition to this Court under Article 32 is not a proper remedy nor is this Court a proper forum for re-opening the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken. The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the Authority for MIG scheme. After the registration and when the flats were constructed and ready for occupation brochures were issued by the Authority. One such brochure for allotment of MIG flats in Lawrence Road residential scheme is Annexure R-1. This brochure specifies the terms and conditions including price on which flat will be offered. It also reserves the right to surrender or cancel the registration, the mode and method of paying the price and handing over the possession. There is an application form annexed to the brochure. Annexure ''A'' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively. It sets out the premium amount payable for land as also the total cost in respect of the flats on the ground floor; first floor and second floor. The statement also shows the earnest money deposited at the time of the registration and the balance payable. It is on the basis of these brochures that the applicants applied for the flats in Lawrence Road and other MIG schemes. They knew and are presumed to know the contents of the brochure and particularly the price payable. They offered to purchase the flats at the price on which the Authority offered to sell the same. After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat, and thus sale became complete. There is no suggestion that there was a misstatement or incorrect statement or any fraudulent concealment in the information supplied in the brochures published by the Authority on the strength of which they applied and obtained flats. How the seller works out his price is a matter of his own choice unless it is subject to statutory control. Price of property is in the realm of contract between a seller and buyer. There is no obligation on the purchaser to purchase the flat at the price offered. Even after registration the registered applicants may opt for other schemes. His right to enter into other scheme opting out of present offer is not thereby jeopardised or negatived and applicants so outnumbered the available flats that lots had to be drawn. With this background the petitioners now contend that the Authority has collected surcharge as component of price which the Authority was not authorised or entitled to collect. Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject-matter of a petition under Article 32. And Article 14 cannot camouflage the real bone of contention. Conceding for this submission that the Authority has the trappings of a State or would be comprehended in ''other authority'' for the purpose of Article 12, while determining price of flats constructed by it, it acts purely in its executive capacity and "is bound by the obligations which are dealings of the State with the individual citizens import into every transaction entered into in the exercise of its constitutional powers. But after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the Slate or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which. is apart" from contract" See Radhakrishna Agarwal and Others Vs. State of Bihar and Others, . Petitioners were under no obligation to seek allotment of flats even after they had registered themselves. They looked at the price and flats and applied for the flats. This they did voluntarily. They were advised by the brochures to look at this flats before going, in for the same. They were lucky enough to get allotment when the lots were drawn. Each one of them was allotted a flat and he paid the price voluntarily. They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat The Authority in its affidavit in reply in terms stated that it is willing to take back the flats and to repay them the full price. The transaction is complete, viz., possession of the flat is taken and price is paid. At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to re-open and wriggle out of a concluded contract only partially. In a similar and identical situation a Constitution Bench of this Court in Har Shankar and Others Vs. The Dy. Excise and Taxation Commr. and Others, , has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this Court under Article 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained. However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined.

The court then proceeded to deal with the argument based on Article 14 which is not relevant for the purposes of the present writ petitions. But certain observations made in this context which also touch upon the third of the contentions on behalf of the DDA have been relied upon and may be referred to. The point said (Paras 9 and 10 of AIR):

The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the Authority is discriminatory inasmuch as no surcharge was levied on flats in MIG scheme constructed and allotted prior to Nov. 1976 and after Jan. 1977. MIG flats involved in these petitions were constructed and were available for allotment in Nov. 1976 and the lots were drawn in Jan. 1977. There is one more MIG scheme at Munirka where the allotment took place at or about the same time but in which case no surcharge was levied. The contention is that once for the purpose of eligibility to acquire a flat, the criterion is grounded in income brackets, MIG, LIG, et. al., those in the same income bracket form one class even for the purpose of determining disposal price of flats allot table to them irrespective of situation, location or other relevant determinants which enter into price calculation and, therefore, in the same income group there cannot be differentiation by levying of surcharge in some cases and charging only the cost price in other cases and that the discrimination is thus writ large on the face of the record because by levying surcharge in case of petitioners they have been treated unequally and with an evil eye. It is difficult to appreciate how Article 14 can be attracted in the circumstances hereinabove mentioned. Cost price of a property offered for sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. Except the submission that the Authority has a proclaimed policy of constructing and offering flats on no profit no loss basis which according to Mr. Nariman has a statutory flavour in the regulations enacted under the Act, the Authority is under no statutory obligation about its pricing policy of the flats constructed by it. When the flats were offered to the petitioners the price in round figure in respect of each flat was mentioned and surcharge was not separately set out and this price has been accepted by the petitioners. The obligation that regulations are binding on the Authority and have provided for a statutory price fixation formula on ''no profit no loss'' basis will be presently examined but save this the Authority is under no obligation to fix price of different flats in different schemes albeit in the same income group at the same level or by any particular statutory or binding formula. The Authority having the trapping of a State might be covered by the expression ''other authority in Article 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme. Those who opt to take flats in a particular income-wise, area-wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract Article 14. But to say that throughout its course of existence the Authority would be bound to offer flats income-group-wise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure. In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide. The experts alone can work out the mechanics of price determination; Court can certainly not be expected to decide without the assistance of the experts, (see Prag Ice and Oil Mills and Another Vs. Union of India (UOI), . In the leading judgment it has been observed that mechanics of price fixation have necessarily to be left to the executive and unless it is patent that there is hostile discrimination against a class the processual basis of price fixation has to be accepted in the generality of cases as valid.

Is the classification income-wise, scheme-wise violative of Article 14 in any manner? The Authority formulates income-wise, area-wise schemes for constructing flats. Petitioners contend that there should be only income-wise classification wholly ignoring area and time factor for classification. They say that allottees of flats in all MIG schemes irrespective of when the flats were constructed form one class for determining price of flats. There is no merit in this contention. What are price determinants? Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation. Their cost varies time-wise, place-wise, availability wise. All these uncertain factors cannot be: overlooked for the purpose of classification. Therefore, it is not possible to hold that allottees of flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing policy. Only valid basis for classification would be income-wise, area-wise, time-wise, scheme-wise, meaning all flats constructed at or about the same time in same area in one project for particular income-group will form a class. And there is no discrimination amongst them.

Pricing policy is an executive policy. If the Authority was set up for making available dwelling units at reasonable price to persons belonging to different income-groups it would not be precluded from devising its own price, formula for different income-groups. If in so doing it uniformly collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely food, shelter and clothing, a body like the Authority undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford it on their meagre emoluments or income, a little more from those who can afford for the benefit of those who need succor ,can by no stretch of imagination attract Article 14. People in the MIG can be charged more than the actual cost price so as to give benefit to allottees of flats in LIG Janata and CPS. And yet record shows that those better off got flats comparatively cheaper to such flats in open market. It is well recognised policy underlying tax law that the State has a wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a violation of Article 14.

Turning to the argument that the DDA was a "no-profit no-loss" organisation which could not charge any element of profit in fixing the cost price of the flats, the Court observed (Para 11 of AIR SC):

It was, however, said that levying of surcharge runs counter to object for which the Authority was set up, namely, to make available housing accommodation on ''no profit no loss'' basis. The argument proceeds on the, assumption that the principle of ''no profit no loss'' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat. Principle of ''no profit no loss'' has been explained by the respondents. It is said that in the overall working, planning and execution of projects which the Authority undertakes as part of development of Delhi, the integral part of it being construction of flats for different income-groups the motives and working of it would not be profit oriented but would work on ''no profit no loss'' economic doctrine. This would not for a moment suggest that the principle of ''no profit no loss'' should apply either to every flat or to every scheme or to every piece of land developed by the Authority. It would be impossible for the Authority to function on such fragmented basis and such a policy statement has not been made by the Authority. Of course, some public statement appears to have been made that the overall working of the Authority is on ''no profit no loss'' basis. Respondent 1 has been able to point out that the Authority''s housing scheme as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made. It is also shown that till Municipal Authority takes over municipal services the Authority spends for the same and incurs cost. Apart from that petitioners have not been able to show that the Authority is actuated by commercial profit oriented approach in its overall working.

Difference between PARMAR and present cases:

If one carefully peruses the factual details set out in the judgment, one will notice that there are two fundamental differences between the situation in the Parmar case and that in the writ petitions before us and each side contends that the difference tilts the scale in its favour. Firstly, in that case, the cost of the flats, as announced in the brochure, included the surcharge. This inclusive cost had been agreed to by the petitioners at the time of application and allotment. It was after allotment and taking possession of the flats that they had second thoughts about the legality of the inclusion of the surcharge as part of the cost and they wanted to go back on the agreement which they had entered into and to wriggle out of their contractual obligations. In the present cases, on the other hand, the terms and conditions of registration or allotment did not specify the exact cost of the flat. A tentative or estimated cost was announced but it was made clear that this will-not be final and would be subject to variation. On behalf of the DDA it is argued that the petitioners fully knew that the prices announced earlier were only tentative and had agreed to purchase the flats at such price as may be fixed eventually by the DDA. They could not be allowed to wriggle out of the agreement, as the petitioners in Parmar tried to do, and pin the DDA down to the original cost or question the price fixed by the DDA. On the other hand, the petitioners say that though the actual price of the flats had not been announced and parties had agreed that it was to be determined later, the basic understanding was that it was to be "self-financing". This expression means that flats were being constructed by the DDA, as an agent of the allottees, as it were. The concept was that the allottees were to be called upon to share the actual cost of the land and construction, contributing it in instalments spread over the period of construction. As the actual cost could not be known in advance, a tentative cost was announced and this figure was naturally variable. But the basic principle that it was only the cost of the land and construction that was to be shared by the allottees was not to be lost sight of. This is clear from the announcement that the "actual cost, however, may vary depending upon the cost of construction at the time of execution and fluctuations in other cost factors." It is, therefore, submitted that while no doubt the original price was tentative and subject to variation, the DDA was entitled to collect nothing more than the cost of the flats to the DDA. The allottees were entitled to call upon the DDA to satisfy them that the price eventually determined was nothing more than this. It was alleged that the DDA was trying to go back upon the agreement and was pressurizing the allottees to pay a fancy price for the flats which had no relation to the actual cost, taking advantage of the helplessness of the allottees who had not only already paid a substantial part of the cost but also were keen to take possession of the flats as early as possible for obvious reasons. This conduct of a public authority, it is urged, is amenable to correction in writ jurisdiction.

Secondly, the price announced in the Premji Bhai Parmar and Others Vs. Delhi Development Authority and Others, included a surcharge and the validity of this inclusion was questioned but upheld. The DDA contends that, in the present case, it had been left to the DDA to fix the price and the petitioner could not question its computation. Without prejudice to this contention, elaborate details and computations were furnished, at later stages of the argument, to prove that the price fixed has not taken into account anything other than the cost factors and that, even if it included a surcharge as in the Parmar case, it was quite validly fixed. On the other hand, the petitioners, adducing detailed supplementary affidavits and computations, sought to contend that the price fixation was not in terms of the original understanding, had taken into account items that cannot be included and also inflated/various items or cost. To the details of the calculations and analyses furnished by the parties we shall advert later and shall address ourselves, for the present, to the principle involved qua the preliminary objection.

The principles of decided cases:

The Parameters of interference by courts in exercise of their writ jurisdiction in areas where the domains of private contracts and statutory or public duties intersect have been enunciated by the Supreme Court in the trilogy of cases: Radhakrishna Agarwal and Others Vs. State of Bihar and Others, , Premji Bhai Parmar and Others Vs. Delhi Development Authority and Others, and Divisional Forest Officer Vs. Bishwanath Tea Co. Ltd., . These cases have laid down in no uncertain terms that what is basically a claim to enforce a contract, seek damages for its breach, challenge some action taken on its clear terms or to claim a refund of amounts paid voluntarily thereunder cannot be disguised under a camouflage of statutory or constitutional obligations so as to be made the subject matter of a writ petition. Indeed, this Court has had occasion to reiterate the same principles in Jasjit Films (P) Ltd. and Another Vs. Delhi Development Authority and Others, , Sanjiv Parkash and Others Vs. N.D.M.C. and Others, and very recently in Civil Miscellaneous Mancat Ram Vs. Delhi Development Authority and Others, , the last being a decision of this very Bench. It is, therefore, not necessary to discuss the principles over again except to refer to certain reservations we voiced in the last, mentioned case while dismissing the writ petitions by applying the principles enunciated in the three decisions of the Supreme Court above referred to. We observed (Paras 19 and 20):

We do not wish, however, to be understood as saying that there are no circumstances at all in which a contract entered into on behalf of the Government would be amenable to interference under Article 226 of the Constitution. This branch of law is still in a process of evolution. The proliferation of statutory authorities and public corporations has brought into existence a huge contractual field in which the terms and conditions of the contract are practically dictated by the monopolistic limbs of State or other public authority and the other party to the contract has very little say in regard to the terms and conditions to which it is supposed to have agreed. In this state of things situations are likely to arise which may justify interference under Article 226 even in such cases. We may indicate two situations, in which, it seems to us, an exception can be made to the general rule outlined in Radhakrishna Agarwal and Others Vs. State of Bihar and Others, and the other cases referred to above. The first covers cases where, after entering into a contract, the Government purports to exercise certain rights under the contract but, in reality, the Government is exercising its executive power in an arbitrary and unreasonable manner, so as to violate the common law. In such cases, though the Government is ostensibly acting under the terms of a contract it can be said, in reality to be an exercise of the executive power of the State that is being challenged. This may be a way of looking at the decision in Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., . In that case, as already discussed, the agreement itself envisaged the possibility of a re-finance not being available and provided that, in that contingency, the Corporation''s loan would carry interest at 13% p.a. Despite the specific provision to this effect in the contract the public corporation, which was a State Authority, acted arbitrarily so as to cause harm and injury flowing from its unreasonable conduct to the respondent. The conduct of the State Corporation did not at all flow out of any of the terms of the contract.

Though, in form, it appeared to be a case where the Corporation was refusing to perform its obligations under the contract, in truth and fact it was a case where the Corporation was acting arbitrarily and outside the terms of the contract. It was a case of colourable exercise of a power available purportedly under the contract but which was in truth not available and which was explicable only as a high-handed and arbitrary conduct of a statutory authority. The decision in Jamna Devi''s case C.W. No. 783 of 1972, D/-25-5-1982 (Delhi)), referred to earlier, can also be explained on. this principle.

The second situation which comes to mind perhaps involves an extension of the same principle. This is of cases where a term of a contract "Imposed" by the State or authority on the citizen is contrary to law and, thus, non est. An action of the State, insisting on the observance of such a term of the contract would, in substance, be an act in the exercise of its executive or statutory power rather than as a contracting party simpliciter. A striking illustration of this situation is provided by the recent decision of one of us (Wad, J.) in Modern Automobiles v. Union of India C.W. No. 777 of 1983 and a batch of connected cases disposed of on 30-11-1983 : reported in 1984 Tax LR 2888 (Delhi). The petitioners in that batch of cases were successful tenderers for the purchase of certain stores from the Director General Supplies and Disposals (DGS & D), Government of India. Both Parties to the Contract were registered dealers under the Delhi Sales Tax Act, 1975. Earlier, the contractors used to be exempt from sales tax on their furnishing a declaration form (STI) in accordance with the provisions of the Sales Tax Act. However, on 28-12-1981, the DGS & D passed an office order to the effect that declaration forms should not be accepted from purchasing dealers and directing that they should pay sales tax on their purchases separately. The form of contract was also amended to introduce a special condition to the above effect. It was such an amended contract entered into between the parties that came up for consideration before the Court. The petitioners seem, subsequently, to have realised that the above new condition in the contract was contrary to the express provisions of the Sales Tax Act and they filed writ petitions challenging the validity of the office order and of the amendment to the special conditions of contract. The DGS & D resisted the writ petitions on the ground that the condition was not inconsistent with the Sales Tax Act and that in any event, the petitioners having agreed to such a term contractually should be deemed to have waived their right to exemption. Wad, J. found that the Sales Tax Act and Rules conferred a right to exemption on the purchasing dealers on giving a declaration form, and a duty on the selling dealer to accept such a form. On the second argument, the learned Judge observed:

It is then submitted that the right to exemption is waived by the petitioners through a contract. What is challenged in the petitions is not only the contract but also the amendment in the general conditions of contract introduced by Office Order 120 dt. 28-12-1981. Right to claim exemption is created by the Act and Rules. The Special or General Conditions of Contract must act in furtherance of and not contrary to the statutory provisions. Amendment to Clause 10 in the Special Conditions to the effect that sales tax declaration will not be accepted is directly in breach of Rule 7(1) also. Direction to pay sales tax in the said amendment is contrary to Sections 4 and 5 of the Act. The validity of this amendment has been separately challenged by the petitioners and they are entitled to do so, Once it is held that the said amendment to Clause 10 is contrary to Sections 4 and 5 of the Act void it is obvious that no such term can be incorporation of an illegal term of a contract. It must be remembered that these are standard form contracts and being Government contracts are mostly one sided. The citizen as a contracting party contracts as in the normal commercial contracts. If he is not to be out of business he has no option but to agree to the terms of contract already settled by the Government. A citizen has a right to expect that the Government will respect the statutory provisions and would not act contrary to it by Imposing different terms in the contracts. A term in a contract, contrary to the expressed provisions of a statute is illegal and void and the contract would be read as if no such illegal condition exists in a contract.

It is not necessary, for the purposes of the present case, to discuss these aspects at greater length or express a final opinion in regard thereto. Suffice it to say that, in the present case, there are no unusual features of the above type. The case is a clear and simple one of enforcement of an ordinary contractual right which is fully governed by the principle of the Radhakrishna Agarwal and Others Vs. State of Bihar and Others, .

The situation here:

We shall proceed now to consider the applicability of the above principles to the situation before us. But, for doing that, we should first try to see what exactly it is that is happening here. The DDA is public authority which is entrusted, inter alia, with the responsibility of providing houses to the citizens of Delhi. The statute and the regulations lay down the modalities by which the DDA can dispose of properties by way of sale or hire. The drawing up of schemes, the modes of registration and allotment, the fixation of a price and the mode of its payment, the execution of a deed and the conditions of transfer are all provided for in these regulations. There is nothing in the regulations that compels the DDA to provide houses free of cost or at concessional rates or even at the cost of construction. It is open to the DDA to fix such price for the flats as it may deem fit. In doing so, it can keep a margin of profit for itself take into consideration its overall working, consider the picture of town planning as a whole and off set deficits in one scheme while completing another and so on. In short, it is as free in fixing the price of flats as any private contractor will be, except only for the limitations of fair play and the need to avoid arbitrariness and discrimination that fetter the hands of a public authority which is amenable to Article 226, So long as it conforms to these regulations, its actions cannot be challenged. But once some regulation is infringed or any arbitrariness or invidious discrimination creeps in, its action is liable to challenge under Article 226. For example, if the DDA does not fix a price or the principles for its determination or if properties are sought to be allotted otherwise than the lots when there are more claimants than houses or plots or there is arbitrariness in allotment, the action of the DDA can be challenged in a writ petition. Perhaps, even, where the price is fixed arbitrarily and without any basis for it, it can be challenged in writ proceedings. This is a pre-contractual statutory stage. Thereafter, when the DDA announces a scheme in conformity with these regulations and applications are received and allotments are made and accepted, the general public scheme yields place to individual contracts between the DDA and each allottee. Now we reach the contractual stage in the domain of private law. It replaces the earlier stage of statutory obligations which was in the domain of public law. Here, any action by any one of more of the allottees to enforce the terms of the contract or to complain of their breach on the part of the DDA will lie, at general law, by way of a suit and not by way of a writ petition. To put it in other words, any complaint or grievance pertaining to the pre-contractual statutory stage can be aired under Article 226 but any complaint or grievance pertaining to the contractual stage can be agitated only in a civil suit.

In the present cases the scheme was drawn up in accordance with the regulations. The objective of the scheme was that, over and above the flats that were being constructed by the DDA out of its own resources, flats should be constructed on a "self financing basis", i.e., by the DDA by obtaining financial participation from the intending purchasers themselves during the process of construction instead of constructing flats from out of its own resources and then selling them to intending purchasers. The brochure or announcement does not specifically say that the DDA will be constructing the houses as an agent of the purchasers; it only tells them : "You will yourself finance the construction of the flat during the process of its construction". But what is important is that the brochure makes it very clear that the flats are to be provided to the purchasers at their cost. The use of the word "cost" instead of "price" is very significant. "Price is the consideration which a purchaser has to pay for a property. It may be the "cost" or something more. It very often includes something more by way of a margin of profit. It would have been different if the scheme had said that the price was being fixed at an estimated figure and was subject to variation. But it clearly said that the purchasers would be asked to pay only the actual cost. Papers filed before us show that estimated figures of the actual cost of construction had admittedly been prepared in detail and announced with the necessary rider that these figures were not conclusive but "may vary depending upon the cost of construction at the time of execution and fluctuations in other cost factors". All this makes it clear that, in exercise of its statutory power, under the regulations, the DDA had decided that the price to be charged for the flats was to be nothing more than their actual cost of construction. This was quite understandable for while, as pointed out by the Supreme Court in the Parmar case, there is no statutory or other prohibition against the DDA making a profit on construction and sale of houses, their avowed intention and policy was not to do so. So they told the public : "We cannot afford to finance all the houses ourselves. So we have a scheme under which you provide the money and we make the construction. We shall make no profit and shall pass on the flats to you at their construction cost." The rider regarding variation was necessary as, at that stage, the cost was only being estimated tentatively and the actual figures of construction cost might be much more for various reasons. A perusal of the announcement and brochure leaves no doubt in one''s mind that the price for each flat was fixed at the amount of its actual cost of construction. It is on this basis that the contract was concluded between the parties.

While so, what is it that the DDA is now seeking to do? The DDA says four things (we are making a peace of what has been said at great length and somewhat repetitively in the counter-affidavit):

(1) DDA is under no statutory obligation about its pricing policy. This is a purely executive matter which is not open to Judicial review. The DDA has wide discretion to devise its own formula of pricing in regard to different flats and different schemes and this may even include a margin of profit for the DDA if it considers it necessary;

(2) The DDA''s housing projects should not be taken individually, locality wise or in isolation otherwise. They should be considered as a whole in the context of the entirety of the development projects undertaken by the DDA. The pricing policy can be so evolved as to enable the DDA to manage its finances in such a way that the projects in their totality do not end up in a loss;

(3) In ensuring orderly development, new colonies have to be set up sometimes in comparatively far flung areas or less popular areas where the cost of peripheral or internal services is very high. To make the dwelling units in such areas more acceptable, it sometimes becomes necessary to charge a little extra from allottees in more popular localities which are situated nearer the city. It is also necessary to moderate the cost of construction of dwelling units in projects where the cost (due to nature and availability of land, fluctuation of market rates, labour charges, cost of transport, supervision and management charges) come to be unduly high vis-a-vis these where the position is comparatively better. This needs the costing policy to be periodically reviewed from time to time;

(4) The DDA has initiated housing activity voluntarily as a social function to help various income groups and primarily the weaker sections of society. Its costing policies have, therefore, to balance cross interests like those between the paying capacity of the lower income groups vis-a-vis the demand of higher income groups who go in for the self Financing Schemes.

Without prejudice to the above stand, the DDA also offered to establish that the price now demanded from the petitioners does not exceed the actual cost. It has sought to make this out on the basis of some figures regarding the plinth area rates of construction at the relevant time and regarding the cost of the land. Later, in the course of the proceedings before us, more and more details were furnished and a basis was sought to be worked out on the strength of which the prices demanded from the petitioners could be justified. To these we shall advert later. Also, in the counter affidavit the DDA also said: "...While asserting that the right to fix the cost of the flat is within its executive policy and cannot be called in question in the court of law, (the DDA) in right earnest submits before this Hon''ble Court to appoint a registered valuer of repute to be nominated by this Hon''ble Court of the Institute of Engineers to evaluate the cost of construction, land and the amenities provided in and around the locality and to report to this Hon''ble Court whether the amount demanded by the DDA is in any way excessive."

However, later in the course of arguments, Pr. Singhvi, learned Counsel for the DDA, Withdrew this offer. He submitted that while the DDA had nothing to conceal and was willing to have its books examined at any time by any person appointed by the Court with a view to ascertain the actual cost of construction or to have an independent valuer make a report as to the cost of construction, he would Oppose such a course or; principle, He pointed out, and we think there is force in what he says, that if they conceded this in principle, the DDA would be flooded with request for valuation in respect of each of the several projects, they have on hand or may take on in future and it would become impossible for the DDA to meet all such demands. Nevertheless, the DDA did file a valuation report before us towards the end of the hearing from an eminent engineer to show that the price demanded was commensurate with the cost of construction. On behalf of the petitioners, a counter-report was filed pointing out certain errors and inaccuracies in this valuation report and reiterating its submission. To those reports also we shall advert later. At this stage, it is sufficient to point out that the principal stand of the DDA is that the price of the flats has been fixed in the light of the factors referred to above and that this cannot be questioned in the Court in a writ petition.

Revision pertains to statutory stage:

We think this stand of the DDA cannot be upheld. It is true that the regulations give a discretion to the DDA to fix the price of the flats and, in fixing the price, the DDA exercises an executive power. As has already been pointed out this Court will normally decline to go into the merits of the fixation of price in a writ petition or perhaps even in a suit, so long as the fixation is based on some relevant principles and not arbitrary or discriminatory. But the position in this case is different. The DDA has already announced the basis on which it was fixing the price of the flats (viz. actual cost) but it is now claiming that it can give this principle or basis a go-by and fix the price at any level and in any manner it chooses to. This we think means a revision of the policy of price fixation which is a pre-contractual stage. If the stand of the DDA is that the price they demand is only on the same formula as was announced and that the increased price demanded is only due to escalation in cost of construction and fluctuation in other cost factors, then the issue will only be whether the fixation of price is in accordance with the contract and that can be gone into, both by reason of principle and because it will involve complicated factual investigations, only in a suit. This is the alternative stand of the DDA which we will discuss later. But if the DDA says, whatever we may have said earlier, we can fix the price on any basis and that cannot be questioned at all because it is a contractual matter, the argument is fallacious because this stand of the DDA means going behind the contract and revising the earlier formula of price fixation which means travelling back to the pre-contractual statutory stage.

(sic) refuse to do so and demand a higher price. For this it is open to the petitioners to sue the DDA for specific performance of the contract on the original terms or for damages for breach of contract or for other appropriate relief. A writ will not be maintainable. This argument, we think, is untenable; it attaches undue, importance to the form and ignores the substance of the stand taken by the DDA, In all these matters, the court should look at the real effect of what has been done. The decided cases referred to above show that, if what is done is really an enforcement of the contractual terms, the affected party cannot be allowed to camouflage its grievances in the garb of fundamental rights or by attributing to the action of the authority a statutory flavour and seek redress by means of a writ petition. It should equally follow, we think, per contra, that where what the authority has done is in effect a variation of the incidents of the pre-contractual stage, it cannot be rendered immune from proceedings under Article 226 merely because it can be dressed up or described as a mere breach of contract. So, in our opinion, where the DDA revises the earlier policy of price fixation and substitutes a new one, it is truly interfering with a step in the statutory stage amenable to writ jurisdiction and a writ petition cannot be dismissed as not maintainable merely on the ground that the result of the action also results in a breach of the original contract for which remedy is available in the ordinary civil courts. Looked at in the proper perspective, this is a case where the grievance of the petitioners falls under the second category of cases referred to in Radhakrishna Agarwal and Others Vs. State of Bihar and Others, :

GSFC principle applies.

We think that even if the above view that the DDA is demanding extra price from the petitioners by revising the formula for fixation of price formerly adopted and that is stepping back to the pre- contractual statutory stage is not accepted and the present case is taken as pertaining purely to the domain of contract, it will still fall under the exception we have indicated in para 29 of our decision in Civil Miscellaneous Mancat Ram Vs. Delhi Development Authority and Others, . For this is a case where the DDA (which is ''State'') after entering into a contract purports to (sic). The contract dose not permit the DDA unilaterally raise the price on altogether different lines from those contemplated earlier and in doing so it is acting in the exercise of its executive power as a public authority and not in exercise of a power under contract. So long as the authority is acting bona fide and purportedly under the terms of the contract the Court will (not?) interfere but where the authority out steps the contractual rights and wields its executive power it becomes amenable to writ jurisdiction and, if the exercise of the power is high-handed or arbitrary or otherwise vitiated, a writ can be issued to regulate the same. The decision of the Supreme Court in Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., is the best illustration of this proposition. In substance that was merely a case where the Gujarat State Financial Corporation refused to perform its obligation under the contract to advance the money promised to Lotus Hotels. Nevertheless it was treated not as a case of breach of contract simpliciter but as one of breach of statutory authority by the Corporation which, being found arbitrary or unreasonable, could be set right by appropriate directions. We, therefore, do not think that the respondents'' preliminary objection that the writ should be dismissed in limine can be accepted.

Promissory Estoppel:

The next question to consider is whether the action of the DDA in refixing the price of the flats on different criteria for the purposes of this argument also we shall assume this to be the position is liable to be struck down, for any reason. The answer is in the affirmative and the grounds for sticking down the revision of price are the doctrine of promissory estoppel and the doctrine of arbitrariness. The contours of the doctrine of promissory estoppel have been well delineated in the decisions of the Supreme Court in the Union of India (UOI) and Others Vs. Indo-Afghan Agencies Ltd., , the Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, , Jit Ram Shiv Kumar and Others Vs. State of Haryana and Others, and Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., and examined in detail by a Full Bench of this Court in Bansal Export (P) Ltd. and another Vs. Union of India and others, . The rule that arbitrary action of the State in exercise of its executive power would violate Article 14 of the Constitution is now well entrenched in our law by the rulings in Mrs. Maneka Gandhi Vs. Union of India (UOI) and Another, , Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, and Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., . It is, therefore, unnecessary to discuss these principles in detail. Suffice it to extract the head notes in Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., which is not only the latest pronouncement of the Supreme Court but also one rendered on facts closest to the present case:

It is too late in the day to contend that the instrumentality of the State which would be other authority'' under Article 12 of the Constitution can commit breach of a solemn undertaking on which other side has acted and then contend that the party suffering by the breach of contract may sue for damages but cannot compel specific performance of the contract. It was not disputed that the Gujarat State Financial Corporation which is set up u/s 3 of the State Financial Corporation Act is an instrumentality of the State and would be "other authority" under Article 12 of the Constitution. By its letter of offer and. the subsequent agreement the appellant Corporation entered into a solemn. agreement in performance of its statutory duty to advance the loan of Rs. 30 lakhs to the respondent-company. Acting on the solemn undertaking, the respondent proceeded to undertake and execute the project of setting up a 4 Star Hotel The agreement to advance the loan was entered into in performance of the statutory duty cast on the corporation by the statute under which it was created and set up. On its solemn promise evidenced by the aforementioned two documents, the respondent incurred expenses, suffered liabilities to set up a hotel. Presumably, if the login was not forthcoming, the respondent may not have undertaken such a huge project. Acting of the promise of the appellant evidenced by documents, the respondent proceeded to suffer further liabilities to implement and execute the project. In the backdrop of this incontrovertible fact situation, the principle of promissory estoppel would come into play.

Thus, the principle of promissory estoppel would certainly estop the Corporation from backing out of its obligation arising from a solemn promise made by it to the respondent. The respondent acting upon the solemn promise made by the appellant incurred huge expenditure and if the appellant is held to its promise, the respondent would be put in a very disadvantageous position and therefore also the principle of promissory estoppel can be invoked in this case.

Further, the rule inhibiting arbitrary action by the Government would equally apply where such corporation dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance.

These observations are very apposite here. The DDA had agreed to provide houses at their actual cost (estimated at certain figures subject to variation). Acting on this promise, the petitioners altered their position and suffered considerable detriment. They poured in all their life-savings in the hope that at the end of a couple of years they will be having roofs above their heads acquired at the modest figures originally announced or somewhere in the neighbourhood. The DDA cannot be allowed to go back on this promise and to fix such prices for the property as they desire on totally different principles, far above those the petitioners had bargained for. The argument that, as on the date of completion or today or even the date of the contract, the market price of similar accommodation will be far higher is of no weight in this context. Equally pointless is the suggestion that, if the petitioners do not want or are unable to pay the price demanded, they are welcome to surrender the houses and take back their money, if desired, with interest The question is not whether, in the conditions prevailing today or on the date possession was handed over, the amount demanded is disproportionate to the market value and whether the petitioners can get a house of the same dimensions at the price demanded; the question is whether the petitioners can be compelled to pay more than what they promised to pay viz. more than what they are required to pay for these flats. The unilateral revision of the price of flats, without any reasons being adduced therefore ,is also arbitrary and unreasonable. The action of the DDA in revising the estimates, otherwise than on the terms of the original contract is, therefore, illegal and is liable to be quashed.

Factual Disputes:

So far we have proceeded on the assumption that the determination of the price that has been demanded from the petitioners is on a basis different from the basis originally proposed and accepted. We may now examine what the position actually is.

A Counter-affidavit:

In the original counter-affidavit filed on behalf of the DDA, it was stated that "the difference between the estimated cost and the actual cost is based on the actual and estimated expenditure" but it was added that "in fact, while actual costing is done, the DDA is entitled to take into account its overall housing activity". However, the DDA did not furnish any analysis of the actual cost of construction but only sought to justify the reasonableness of the ultimate price demanded.

(i) It was submitted that the following components were largely responsible for the increase in cost vis-a-vis the estimates cited in 1978 : The estimated cost had been taken on the basis of a Plinth Area Rate (PAR) of Rs. 113/- per sq. ft. that had been approved by the CPWD on 30-12-1977. Subsequently, the PAR had been revised to Rs. 130/- sq. ft. on 31-3-1979, Rs. 176/- in April 1980 and Rs. 200/- on or about 25-4-1981. That there has been an enormous escalation in cost will also be clear from a comparative statement of average prices of building materials as compiled from the statistics maintained by the Bureau of Economics and Statistics of the Delhi Administration. This explains and revision of the PARs and if each of these PARs, applicable for the several periods, were applied in respect of the proportionate construction which took place during that period in viz, 2% in 1978, 55% in 1979, 35% in i960, 3% in 1981 and 5% still remaining to be done--the cost, minus the cost of land (Rs. 92A per sq. metre), would work out to as follows:

Category I Rs. 86,800/- Category II Rs. 1,64,000/- (indistinct) Category III Rs. 1,42,400/-

Though the reserve rate in respect of the land was Rs. 92/- per sq. metre it has to be enhanced by Rs. 11/- being the enhancement in pooling rate as on the date of completion of the flats, as that would be the rate at which cost of land would be debited to DDA by the Delhi Administration. Even if the cost of construction is taken uniformly at the PAR of Rs. 169/- and the cost of land added at Rs. 92/- per sq. metre, the cost of the flats would work out to Rs. 1,5,900/- (indistinct) Rs. 1,28,700/- and Rs. 1,73,800/- respectively in respect of category Nos. I, II and III. Moreover, the actual plinth area in respect ot each of the categories was also larger than that shown originally and this also increased the cost of construction .In fact, the DDA had charged the petitioners departmental charges at 10% and administration charges at 1% though it was entitled to charge these at 15% and 2% respectively. It should also be remembered that the interest payable by the allotte on the difference between the actual cost and estimated cost would make a further difference of Rs. 1815/1865/- in category I flats, Rs. 1,435/- in category II flats and Rs. 2,115/- in category III flats.

(ii) The land was in major demand in South and West Delhi where the largest number of dwelling units were constructed while it was scarce and expensive in other areas such as the Trans-Yamuna areas. The impact of development costs and costs for provisions of services essential for development in various areas have to be taken into account. The dwelling units in South and Central Delhi should, therefore, bear a charge of Rs. 100/-per sq. metre of plinth area and those in West and North Delhi at Rs. 50/- per sq. metre. This change was being made even in respect of MIG, LIG and EWS categories and there was no reason why the allottees under SFS should not be asked to pay the same. If this is added, the category wise costs, exclusive of land cost, would be:

Category I Rs. 94,700/- Category II Rs. 1,12,700/- Category III Rs. 1,55,600/-

(iii) Irrespective of the factors for escalation referred to above, the cost of the dwelling units constructed under the scheme compare favourably with close released simultaneously] The comparative figures are:

Rate per sq. metre. East of Kailash Rs. 1,375/- Malviy Nagar Rs. 1,37l/- Kalkaji Rs. 1,295/- Rajouri Garden Rs. 1,323/- Saket Rs. 1,095/-

(iv) As to the actual cost of construction the counter affidavit stated:

It is submitted that the accounts of the so-called self Financing Schemes cannot be completed until considerable time after the construction work is fully completed. There are many components of costs regarding which date has to be received, compiled and collated, scrutinized audited and the items which have been omitted or ignored have to be included and accounted for. The divergences and discrepancies between cost figures of different pockets of construction and received from different engineers have to be carefully looked into. In the instant case there are serious problems with regard to the actual preparation of final and audited accounts because there were considerably divergences and discrepancies/The matter has been further complicated because some of the allottees themselves happened to be in charge of the construction. Certain officials of the answering respondent were also allottees in the scheme. Then some of the figures were brought to the attention of the Higher authorities of DDA, it became evident that cost figures had been under-stated and depressed while the comparison of Saket with other schemes shows that construction cost in the other schemes was considerably higher as compared to the figures reported in respect of Saket Pockets. Some of these figures were obviously dubious and suspicious. Thus engineering estimates have to be scrutinized, investigated and moderated. In addition items which have been admitted or are under estimated have to be taken into account. Such items would, for example, include cost of rectification, contingencies and unforeseen liabilities litigation and arbitration costs, horticultural land scrapping and other works still to be completed. Sometimes even then the engineering estimates contain some of those cost components, they have to be revised by the Defence Department, keeping in view the prevailing trends, cost estimates in comparable situations, etc. An overall addition has also to be made in respect of departmental charges (which include an allocation of expenses on the establishment and administration at different levels) and cost for provision of community facilities and cost of land. Some of these components have to be costed, scrutinized and moderated in the Finance Department. Some of these components have to be costed on a notional or provisional basis. The final disposal price asked by the answering respondent is in any case very reasonable price and any delay in the payment of this price or postponement in the payment of this price is likely to increase the liability of the answering respondent.

B. Rejoinder:

On behalf of the petitioners a rejoinder was filed. In the rejoinder, it was submitted in reply to the aspects pointed but in the counter affidavit, that the references to the CPWD Plinth Area Rates comparative indices of prices of building materials, pool rates of land, capacity or affordability by the petitioners of the price demanded and other matters mentioned in paras (i) to (iii) above are all irrelevant. It was submitted that it was clear from the counter affidavit that accounts have been maintained and it was alleged that in fact the actual cost was worked out and the actual basis of fixation of the price demanded will be available in the records of the DDA, in particular, the papers submitted by the Executive Engineers in charge of construction of Blocks N & K, H and F to show the actual cost with breakup, the estimates prepared by Sri R.K. Chawla, Financial Adviser (Housing) on 6-10-1978 and the approval thereof by the Vice-Chairman on 10-10-1978. The allegations that some of the details of construction in respect of some pockets had been manipulated by some of the petitioners, who were also allottees, was denied. The admission of this rejoinder affidavit was initially opposed by the DDA on the ground that it raised fresh pleas (CM 1201/82) but, eventually by an order dt. 22-3-1982, they were given an opportunity to file a further affidavit, if desired to answer the fresh points that had allegedly been raised in the rejoinder. In the men time, the petitioners had also been granted inspection of the relevant records and they filed an affidavit dt. 7-5-1982 elucidating further the points raised in the earlier rejoinder. The DDA filed a reply dated 16-12-1983. A rejoinder to this was filed ''which was dt. 4-1-1984. The contents of those affidavits may now be examined.

C Further affidavit of petitioners:

In their affidavit dt. 7-5-1982. the petitioners referred to two sets of documents found by them in the records on inspection. These were:

(i) Two statement showing a computation of the disposal cost of the flats, garages and servants'' quarters : These have been marked as Annexures (Ins) I & II and read as follows:

Annexure Ins-I Garage Servant Quarters Numbers. 135 135 1. Plinth Area in sq. mt. 24.47 28.67 2. Cost of Construction etc. @ Rs. 511/- for garage & Rs. 611.41 for servant quarters 12,504/- 17,529 3. Deptt. Charges @ 10% 1,250 1,753 _______ _______ 13,754 19,282 4. Admn. Charges 1% 138 193 _______ _______ 13,892 19,475 5. Extra @ 7.5% for deposit into EWS Fund 1,100 ________ ________ 14,992 19,475 6. Premium for land @ 45 p. sq.Mt. 1,700 2,000 ________ ________ 16,692 21,475 7. Equalisation Fund @ Rs. 200/- per sq. mt. 4,900 5,800 ________ ________ 21,592 27,275 or 21,600 27,300

Annexure Ans-II

Details of disposal cost for flats constructed at Malviya Nagar Extension (Saket) under SFS

DETAILS OF FLAT CATEGORY I CATEGORY II CATEGORY III With ter. Without ter GF FF & SF Average P.A. in sq. Meter 78.36 78.36 86.48 86.38 No. of D/Units 64 64 328 264 Cost of Civil Works etc. @ 734.69 57570 57570 63536 96671 Cost of court yard. ---- ---- 2422 ----- Cost of terrace @ Rs. 870 870 ---- ----- ----- Cat. I Cost of Ter. @ Rs. 1977 ---- ----- 1977 for Cat. III Community facilities. 750 750 750 750 ______________________________________________________ Total 59190 58320 66708 99398 Departmental DC 10% charges (DC) 5919 5832 6671 9940 _______________________________________________________ 65109 64152 73379 109338 Adm. Charges 1% 651 642 734 1093 Premium for land 6100 6100 8700 10300 _______________________________________________________ 71860 70984 82813 120731 EWS @ 7�% ----- ----- 6300 ------ ________________________________________________________ 71860 70894 89113 120731 Equalisation charges @ Rs. 100 per sq. Meter of the P.A. rounded to nearest hundred 7900 7900 8700 13200 ________________________________________________________ Disposal Cost with our Equalisation Charges 71900 70900 89200 120800 ________________________________________________________

It is pointed out that, according to these tabular statements, the disposal cost has been worked out by taking into account the following components:

(i) Cost of Construction.

(ii) Community facilities.

(iii) Departmental charges at 10%.

(iv) Administrative charges at 1%.

(v) Extra charge at 7� for deposit into "Economically Weaker Sections" Fund.

(vi) Premium for land at Rs. 45 per sq. yd.

(vii) Equalisation Fund at Rs. 100 per sq. metre in the case of flats and at Rs. 200 per sq. metre in the case of garages and servants'' quarters.

(ii) Minutes resolutions and office notings in DDA. (a) In a note in respect of an agenda for Resolution No. 397 of the Housing Committee dt. 16-12-1977, it was mentioned that for MIG, LIG, Janata and CSP, cost is charged as per actual cost; the engineers provided for anticipated liability and unforeseen expenditure. A departmental noting for the same meeting said that disposal price consisted of the following five components : Cost of construction, departmental charges, interest charges, administrative charges and cost of land. A note dt. 11-7-1978 indicates that estimate of the price was made on the basis of six components : construction cost, common facilities, departmental charges at 10% interest charges, administrative charges at 1% and premium for land.

(b) The whole complexion of the matter, however, changed in 1980 when it became necessary to fix the prices for these SFS flats, say the petitioners. A meeting of the Housing Committee was to be held on 24-10-1980. For this meeting, a departmental note was put up which, inter alia read:

... Allottee takes the view on the cost at the time of allocation and arranges for loan accordingly. Between allocation and final disposal, new developments sometime take place. Decisions are accordingly taken in the intervening period and which tend to increase the cost. Allottees do not grudge extra payment due to increase in cost of construction but recent increases made on the basis of intervening decisions like increase in rates of deptt. and adm. charges and new levies like equalisation charges. In equity on costing policy like deptt. and adm. charges and cost of land should remain unchanged after allocation.

This suggestion the Committee approved, observing in its resolution:

It was emphasised that in respect of the dwelling units already allocated, there may not be any variation in norms.

However, the same note drawn up for consideration of the Housing Committee shows that on 27-2-1980 the Committee had resolved (Resolution No. 49) to add equalisation charges in regard to pricing of houses at Rs. 100/- per sq. metre for colonies in South and Central Delhi and at Rs. 50/- per sq. metre for West and North Delhi. While observing that this was resented by allottees, the note, which suggested that on cost charges like departmental and administration charges and cost of land should remain unchanged after allocation, had this to say, about the equalisation charges:

As the construction activity under Group Housing is now to be carried mostly in trans-Yamuna area, it would be desirable that the cost of the land in South, West and North Delhi is somewhat increased so that the people getting dwelling units in the trans-Yamuna areas get some solace.

The Housing Committee on 24-10-1980 by its resolution No. 447 dt. 24-10-1980 also adopted the same inconsistent posture. While agreeing that there should be no variation in norms in respect of the dwelling units already allocated it remained tacit about the equalisation charges. Thereupon, the Financial Adviser (H) put up a note on 12-11-1980 for the consideration of the Finance Member:

...When the pricing formula on the subject was being discussed with VC, he had desired that taking into consideration the above factors and above all whole, the pricing of these units may be raised on ad hoc basis and return therefrom transferred partly to the EWS Fund and partly to Equalisation Fund. At the rate of Rs. 200 per sq. mt. of the plinth area under the dwelling units, this charge comes to Rs. 15,700, 17,300, 26,400 for Categories I, II and III respectively.

FM/VC may like to approve the cost as in para I above and indicate pleasure if any additional extra charge over and above the figures as given in para (1) above is to be effected and if so to what extent.

On this the Finance Member noted:

The proposed addition is to cover (i) the fact that some allottees belong to HIG

(ii) to cover contingencies.

(iii) to cover maintenance and services for some time.

(iv) to cover unforeseen liabilities of arbitration, litigation and rectification of defects.

This note was approved by the Vice-Chairman on 23-11-80.

On behalf of the petitioners, it is submitted that these documents make it clear that several unjustified additions have crept into the determination of the disposal cost, the effect of which is as follows:

Impact of on flats of Item Cat. I Cat. II Cat. III Ser. Qrs. Garage Rs. Rs. Rs. Rs. Rs. 1. Extra 7.5% for EWS Fund 6,300 1,100 2. Equalisation charges. 15,700 17,300 26,400 5.800 4,900 3. Cost of land Rs. 45/- 1,868.56 4,030.08 3,194.68 451.02 378.02 per sq. yd. or Rs. 54/- per sq. metre of plinth area--Mistake in calculation. 4. Administrative charges --a duplication of 651 734 1,093 193 138 _____________________________________________________________________ deptt. charges. 18,219 28,634 30,688 6,444 6,517

It is further pointed out that, perhaps realizing how much the magnitude of the enhancement would affect the allottees, the Financial Adviser (H) had himself suggested in a note of 1-1-1981 that the prices for category I could be reduced by Rs. 5000/-. The Finance Member also agreed with him but this note remained unsigned by the Chairman. A further comment made on behalf of the petitioners, is that the rate of construction has been taken in Annexure Ins. II at Rs. 734.69 per sq. metre. This, it is said, is unjustified, as according to the notes found in the file, the Engineer-in-charge have reported only the following figures:

Block F Rs. 740.15 Block H Rs. 765.56 Block K Rs. 698.05 Block N Rs. 712.35 the average of which will work out Rs. 729.03 only. The cost of construction will, in that event, be reduced by Rs. 443.5, 489.5, 744.7, 162.3 and 138.5 respectively in respect of the various categories tabulated above.

D. Further Reply:

In reply to the above affidavit of the petitioner dt. 7-5-1982 a detailed affidavit dated 16-12-1983 was filed on behalf of the DDA. The contents of this counter affidavit can be conveniently divided into two parts;

I. In para 10 of this affidavit, the existence, on the record, of the two statements referred to as Ann. Ins. I & II is admitted. These, it is said, were notes prepared for the consideration of the Competent Officers and are so be read and understood in the context of the genera housing schemes of the DDA and various resolutions passed by it and its Housing Committee and decisions taken by the Competent Officers". The correctness of the resolution No. 447 dt. 24-10-1981 and of the notings of the Finance: Member and Vice-chairman--competent authority under the regulations--on 17-11-1980 and 23-11-1980 is admitted. In addition, an order dt. 27-2-1980 passed by the Vice-Chairman on 27-2-1980 has been annexed to the affidavit which is in the following terms:

The basic policy that we have been following so far in regard to pricing of the houses is on no-profit-no-loss basis. The idea is that we should be able to recover all our costs including our overheads etc. and make no loss. This policy could have been followed without any hitch so long as the number of houses built by us continued to be modest in number and were confined to some limited number of pockets. However, when we have expanded oar activities and are (sic) constructing a large number of houses in various areas, then we are up against the problem there is a definite consumer preference for certain pockets/areas. Frankly speaking, any house in South Delhi enjoys the highest consumer preference as compared to other areas. However, increasingly we have to go towards other areas and when we take up such works, the cost of peripheral services and internal services vis-a-vis similar services in more developed areas will be higher. Therefore, at a place where the consumer preference is less, we are saddled up with higher cost and vice versa.

When we look at ourselves as an authority marketing a house, it will be necessary for us to take into consideration the consumer preference also, so our policy for pricing should be determined by this factor as well as by the actual cost incurred by us because in the given circumstances we have to incur lower cost of services for such preferred areas as compared to less popular areas. If we do this, it will lead to a situation where we will be equalising the price (more or less on flats offered in various areas). Apparently, this will mean that such areas where we have incurred relatively less cost of services on the one hand are enjoying a higher consumer preference, on the other hand, the allottees will be able to pay a higher cost; likewise the other areas with lesser consumer preference should be made available at a slightly lesser price. This adjustment should be done through an equalisation fund.

II. The DDA also filed, along with this affidavit, two statements of cost based on the actual booked expenditure till Nov. 1983. Consolidated into one, these statements represented the position thus:

Particulars Category I Category II Category III Car Servant garrage Quarters ------------- ------------- ------------- ------- -------- With Without at Gr. Floor at First Terrace Terrace. Floor & Second Floor 1. Average Plinth area 78.36 78.36 86.48 131.58 24.47 28.67 Sq. mt. Sq. mt. sq, mt. sq. mt. sq. mt. sq. mt. Number 64 64 328 264 135 135

Cost of Civil Works at Rs. 800.96 per Rs. 62763 Rs. 62763 Rs. 69267 Rs. Rs. Rs. Sq. mt. 105390 12925 18010 (at Rs. (at Rs. 528.18) 628.18) 4. Cost of Court -------- --------- Rs. 2422 -------- ------- ------- yard

Cost of terrace Cat. I Rs. 870 --------- --------- ---------- -------- -------

Cost of terrace for Cat. III ------- -------- --------- Rs. 1977 --------- -------

Community Facilities Rs. 750 Rs. 750 Rs. 750 Rs. 750 --------- -------- _________________________________________________________________ Rs. 64383 Rs. 63513 Rs. 72439 Rs. 108117

Departmental Charges at 15.52% Rs. 9992 Rs. 9857 Rs. 11243 Rs. 16780 Rs. 2406 Rs. 2795. _____________________________________________________________________________________ Rs. 74375 Rs. 73370 Rs. 83682 Rs. 124897 Rs. 14931 Rs. 204805 9. Administration Charges at 2% for 12 yrs. Rs. 2231 Rs. 2201 Rs. 2510 Rs. 3747 Rs. 448 Rs. 624

Premium for land at Rs. 122 per sq. mt. for 75% of the Group Housing Area or say at Rs. 92/- per sq. mt. of gross area Rs. 9000 Rs. 9000 Rs. 12700 Rs. 15100 Rs. 2900 Rs. 3300 ___________________________________________________________________________________ Rs. 85606 Rs. 84571 Rs. 98892 Rs. 143744 Rs. 18279 Rs. 24729

7% for deposit into EWS Fund on G.F. Flats & Garrages -------- --------- Rs. 7500 --------- Rs. 1,400 --------- ______________________________________________________________________________________ Rs. 85606 Rs. 84571 Rs. 106392 Rs. 143744 Rs. 19679 Rs. 24729

Rounded off to Rs. 85700 Rs. 84600 Rs. 106400 Rs. 143800 Rs. 19700 Rs. 24800

Disposal cost charged. Rs. 86800 Rs. 85800 Rs. 105200 Rs. 145800 Rs. 21600 Rs. 27300

The rates mentioned above are explained thus:

(A) The cost of construction rate of Rs. 800.96 per sq. mt. in respect of the flats is calculated as follows:

a) Actual booked expenditure Rs. Rs. up to November 1983. 54642134 b) Anticipated expenditure 1. Payment of Final bill of contractors, arbitration claims etc. 6360572 2. Maintenance charges for one year 735633 7496205 3. Provision for Litigation exp. 4000000 ________ 62138339 (c) Contingencies at 3% to cover up depreciation, maintenance, POIL of jeeps, site Officers etc. 1864150 ____________ 64002489 Less: Expenditure on Rs. Rs. (i) Court yards (Rs. 2422 X 328) 794416 (ii) Terrace (Rs. 870 X 64) 55680 (Rs. 1977 X 264) 521928 (iii) Servant quarters and 4054409 5426483 _________ ________ 58576005 ________

The total plinth area of the flats being 73132.64 sq. mt. (78.36 X 128 + 86.48 X 328 + 131.58 X 264), the plinth area rate of construction works out to Rs. 58576006 - Rs. 73132.64 = Rs 8OO.96 per sq. mt.

B) In respect of car garages and servant quarters, the cost is worked out as follows:

Expenditure relevant to these contingencies Rs. at 3% 4054459 121643 _________ 4176093 Less: Excess exp. on servant quarters at Rs. 100/- per sq. mt. 387045 _________ 37899048

The total plinth area being 3303.45 sq. metre for garages and 3870.45 sq. mt. in respect of servant quarters (7173.90 sq. mt. in all) the plinth area rate is worked out to Rs. 3789048-7173.90 or Rs. 528.18 for garages and Rs. 628.18 (Rs. 100/- more) for servant quarters.

(C) The departmental charges are said to have been worked out as follows:

(i) Expenditure relevant for departmental charges Rs. 64383 X 64 = 4120512 Rs. 63513 X 64 = 4064832 Rs. 72439 X 328 = 23759992 Rs. 108117 X 264 = 28542888 __________ 60488224 ________ ii) Departmental charges booked: Year Booked expenditure Rate Amounts (Rs.) 1978-79 7409498 23.31% 1727154 1979-80 31383467 15.11% 4742042 1980-81 11441777 9.84% 1125871 1981-82 11112042 16.09% 1787928 _______ 9382995 (iii) Percentage of departmental charges 9382995 / 60488224 multiplied by 100 = 15.52%.

(D) The counter-affidavit further explains the cost of land charged at Rs. 92/- per sq. mt. as against Rs. 45/-per sq. yd. or Rs. 54/- per sq. mt. of gross area, which was, it is admitted, the rate previously adopted. This is because, it is explained the DDA would be liable to pay the cost of land at that rate which, it is pointed out, is far below the land cost charged from Co-operative Societies and Group Housing Societies all over Delhi. The computation of this rate of Rs. 92/- per sq. ml. is sought to be justified on the basis of certain correspondence with, and instruction of the Delhi Administration which have been annexed to an affidavit of, or on behalf of, the DDA, dt. Mi-1984.

(E) The following further points are made:

(i) Relying on a resolution No. 2397 dt. 16-12-1977, it is said that departmental and administrative charges were earlier charged at 10% and 1% respectively. Whereas they could have been charged at 15% and 2% and actually work out to 15.52% and 3% respectively. Similarly, the DDA was entitled to charge interest at 10% for a period of six months and cost of land at the average marked price in the area but this has not been done.

The operative portion of this resolution is as follows:

The following decisions were taken:

Cost of Construction : It was decided that the cost of construction under the Self Financing Scheme is to be charged on the same basis as is being done in the case of MIG/LIG/Janta/CSF Housing.

Departmental Charges: It was decided that departmental and administrative, charges in the case of flats constructed under the Self Financing Scheme may be charged @l5.% and 2% respectively.

Interest Charges : It was decided that DDA will charge interest @10% of the total cost of the flat constructed under the Self Financing Scheme uniformly for a period of six months.

Cost of Land : It was decided that cost of land in respect of MIG, LIG &. Janta Group of allottees may be the same as contained (sic?)

Element of Profit: It was decided that no element of profit would be added while fixing the disposal cost of flats under the Self Financing Scheme.

(ii) As against the equalisation charge approved by the Vice Chairman to cover "contingencies, maintenance of services, unforeseen liabilities of arbitration, litigation, rectification of defects etc.", the actual and anticipated expenditure has now been worked out which brings the disposal cost to the figures above mentioned which are much above those worked out in Ann. Ins. II (though not Ann. Ins. I, i.e., in respect of garages and servants quarters). It is claimed that the competent authority (the Vice-Chairman), having considered the computations in Ann. Ins. I and II, fixed the final prices of units in the light of the figures of actual expenditure booked and the anticipated liabilities as at that time.

(iii) It is said that if the anticipated liabilities and unforeseen expenditure set out in these statements had not been taken into account, DDA would have suffered huge losses and the Vice-Chairman has a duty to see that this does not happen. While the DDA''s policy is to make no profit it cannot afford to work on huge losses either.

(iv) Land has been charged (this is apparently a reference to annexure Ins. I and II) at Rs. 54A per sq. mt. of gross area as against Rs. 92/- properly chargeable and this entails a loss of Rs. 38 per sq. mt. together with the proportionate ground rent payable in perpetuity.

(v) The suggestion of the Financial Adviser (H) on 1-1-1981 to reduce the cost of category I flats by Rs. 5000 was not accepted as he himself had pointed out in the same note that to do so would have meant a loss of Rs. 4 to Rs. 6.40 lakhs.

(vi) The plinth area rate of construction (taken in Ann, Ins. I & II) at Rs. 734.69 is on the basis of weighted average and not the arithmetical average of the figures mentioned in the petitioner''s affidavit.

36-37. Relying strongly on the calculations contained in these statements and explanations in this affidavit, it is contended that the disposal cost of the flats has been fixed at a very reasonable figure.

E Further Rejoinder:

The petitioners filed an additional affidavit in reply dt. 4-1-1984. They maintained that the records made it clear that a deliberate decision had been taken to inflate the charges at the rate of Rs. 200/- per sq. mt. on an ad hoc basis. The Finance Member, "invented lame, irrational and irrelevant excuses" to justify the ad hoc increase overlooking that as per resolution No. 397 of 16-12-1977 and decisions thereon, anticipated liabilities and unforeseen items of expenditure had already entered into the picture "while conveying the data relating to the actual cost of construction". It had also been categorically admitted in the ''DDA''s counter-affidavit that the actual cost had been fixed "in the perspective of the overall housing activities throughout the Union Territory." It is pointed out that no record showing how the Vice-Chairman fixed the disposal price has been placed on record so far.

As to the statements newly sought to be filed, the petitioners point out:

(a) That in the counter-affidavit, para 9(c), it had been stated that "there are no completely separate accounts for each scheme";

(b) That none of the records con raining the accounts on the basis of which the statements have been drawn up have been made available for the inspection of the petitioners though the DDA claimed that "all the relevant records relating to pricing" had been shown to the counsel for the petitioner;

(c) That despite repeated requests of the petitioners, the cost details were not furnished though, at one stage, they were promised;

(d) That the fixation of prices in Dec. 1980 could not have taken into account the booked expenditure between Dec. 1980 and Nov, 1983;

(e) That, in the circumstances, "there is room for strong suspicion that the booking of expenditure as has been done is an afterthought and manipulated to justify the total cost mentioned in the letters of demand of the fifth installment .

On the merits of these statements, the following points were raised:

(a) Increasing the cost of land beyond Rs. 54/- per sq. mt. was contrary to the decision

of the Housing Committee in resolution No. 447 of 24-10-1980;

(b) No documents have been produced to show that the DDA had been called upon to pay cost of land at Rs. 92/- per sq. mt. (It is in reply to this point that an affidavit dt. 11-1-1984 and its annexures were filed by the DDA).

(c) Departmental and administrative charges had been fixed at 10% and 1% and, as per resolution No. 447, should remain unaltered;

(d) The contracts were completely executed by Dec. 1980. They were contracts at fixed rates. It is not clear how there could be anticipated further expenditure by way of bills of the contractors;

(e) The claim for provision towards arbitration claims is untenable. There is no mention whether any proceedings for arbitration are pending or contemplated. A part of the arbitration costs, if any, would category (?) of anticipated expenditure is vague and undefined;

(f) The claim towards maintenance charges for one year is imaginary. The DDA has done nothing in this regard during the period of one year. A separate service charge is being paid to the DDA until the colony is handed over to the Corporation;

(g) The provision towards anticipated litigation is unjustified, hypothetical, arbitrary and inadmissible;

(h) Contingencies at 3% cannot be on booked expenditure or anticipated expenditure; it should be on the cost of jeeps and site Officers; and the provision of more than Rs. 6 crores on this account is imaginary, highly inflated and inadmissible;

(i) Deposit into EWS is not a cost factor and there is no decision requiring the petitioners and other allottees to contribute to this fund.

These objections were sought to be supplemented by certain facts and figures set out in an affidavit filed on behalf of the petitioners dt. 16-1-1984. This was based on certain documents which they had come across in the DDA''s records during their inspection which have been annexed to the affidavit as Ann. Ins. III inspection were:

(i) The dates of start and completion of the construction in the colony were as follows:

Pocket Date of Start Date of completion* F 7-12-1978 6-12-1979 N 7-12-1978 6-12-1979 K 4-12-1978 30-9-1980 (likely) N(Cat. I) 4-12-1978 3-12-1979 N.(Cat. III) 23-3-1979 22-3-1980 *These are only anticipated dates of completion according to DDA.

(ii) The total cost of construction in the four pockets as reported by the Engineers-in-charge was:

Pocket Rs. F 64,82,954@ H 2,53,57,038 K 1,33,91,434 N 94,01,708 ___________ 5,46,42,134** _____________ @ This, according to DDA, does not include courtyards and terraces.

**These figures are, according to DDA Rs. 57,27,688, Rs. 2,60,09,888, Rs. 1,37,20,278 and Rs. 96,44,372 aggregating to Rs. 5,51,02,228.

This tallies exactly with the figure of "actual booked expenditure up to 11/83" in the statements of actual cost filed by the DDA. This shows there was no expenditure on construction after Dec. 1980 or so.

(iii) The expenditure shown for each pocket includes:

Miscellaneous Exp. Rs. 33,42.274 (in respect of all pockets) Deficiency charges at 2% Rs. 6,90,548* (in respect of H&K Pockets) Maintenance charges at Rs. 16,15,525* 2.5% for 2 years (for H, K and N Pockets) Towards rectification of Rs. 2,11,557* defects at 0.5% for pockets H, K & N. _____________ Rs. 58,59,504 _____________ (*The DDA says these figures are available for ''F pocket also and amount to Rs. 92,772, Rs. 1,15,945 and Rs. 23, 193 respectively).

The first of the above items, in turn includes the following provisions:

Blocks __________________________________________ F H K N __________________________________________ Payment likely under escalation cost Rupees Rupees Rupees Rupees in contract (Clause 10(c)). 1 lac 6 lacs 1 lac _______ ______ _______ _______ payment of money to be kept for arbitration/ contractor''s claim and unforeseen expenditure at Rs. 2000 per unit/arbitration at Rs. 1000 per flat. 50,000 6.8 lacs 2.24 lacs (sic). Miscellaneous. 20,000 Unforeseen items. 2 lacs. Contingency at 3% 16,635 others. 31,500** Material issued free of cost, payment under Clause 10(c), drawings, arbitration, deficiency of services, contingency etc. 13,39,139 _______________________________________________ 17,70,000* 12,08,000 5,71,635* 13,39,139 (sic) _______________________________________________ *According to DDA the correct figure is Rs. 5,71,135/-.

**According to DDA the correct figure is Rs. 30,500/-.

(iv) On the basis of this, the reports calculated the cost of the flats as follows (exclusive of cost of land, departmental administration and interest charges):

Pocket Category Middle Unit End Unit Rs. Rs. ________ _________ ____________ _________ F II 65.379 65,504 *64,826 (with expansion joint) III 93,940 93,940 *93,725 (with expansion joint). H II @ 66,410 68,958 III 1,01,274 1,04,176 K I 55,335 & 53,530 for First Floor. 56,097 & 54,280 for Second Floor. II 64,580, 64,485 and 62,113. III 95,145 and 92,633. N **II 96,745 & 94,132. Servant Quarters 15.682 and 14243 *** Garages 12,338 and 12,088 *** *The DDA adds this.

@ According to DDA, only the cost of the middle Unit has been worked out and comes to Rs. 66,410, Rs. 68,958 and Rs. 68,751.

**According to DDA, these figures for Cat. III, Rs. 65,744 and Rs. 63,407.

***These include 2% maintenance charges and �% for removal of defects.

(v) The P.A.A.R. has been calculated at:

Pocket Flats Ser. Qr. Garage. Rs. Rs. Rs. ________ ______ ________ ________ F 740.15 599.94 493.57 H 765.56 K 698.05 N 712.35 as mentioned earlier.

(vi) The above cost figures were examined by the Accounts Department of the DDA who made the following comments and suggestions:

(a) Cost of land may be charged at Rs, 62/-per sq. mt.

(b) Departmental and administrative charges have been taken at 10% and 1% respectively.

(c) Interest charges have not been added:

(d) Administrative charges have been levied at 1% for one year.

(e) For inter-category adjustment, cost of ground floor flats should be increased by 7%, rounded off to the next one hundred rupees and taken to a separate fund for EWS housing;

(f) No extra charge of 1% be levied as recommended by the Engineering Wing.

(g) Rounding off to the nearest hundred rupees will accommodate future unforeseen expenditure.

(vii) Having regard to the above comments and suggestions, the Accounts Department calculated the cost as follows:

Category I Rs. 70,100 and Rs. 71,100 Category II Rs. 87,900 Category III Rs. 1,10,400

It is this note that was put up to the Financial Adviser (H), Finance Member and then Vice-Chairman who approved it on 23-11-1980 subject to his approval of an ad hoc increase of Rs. 200 per sq, mt. to cover contingencies, maintenance and services for some time, unforeseen liabilities of arbitration, litigation and rectification of defects. Making this addition which worked out Rs. 15,700, Rs. 17,300 and Rs. 26,400 respectively in regard to the three categories, the disposal cost was fixed at:

Category I Rs. 86,800 Category II Rs. 1.05.200 Category III Rs. 1,45,800

42-43. On the basis of the data collected thus, the petitioners contend:

(a) That the cost of construction worked out by the Engineers already included payments due to the contractor, arbitration expenses, deficiency charges at 2%, maintenance charges at 2%, rectification charges at �% and contingency charges to the extent of Rs. 58,59,904. This was per resolution No. 397 dt. 16-9-1977;

(b) That, if the anticipated expenditure shown in the DDA''s statement of actual cost filed before the court is deducted, the plinth area rate will work out to Rs. 734.69 in place of Rs. 800.96 per sq. mt. On this basis the cost of civil works would be, for the various categories, as follows:

Category I Flats. Rs. 57,570 Category II flats. Rs. 63,536 Category III flats Rs. 96,670

(c) That Departmental and administrative charges at 10% and 1% having been approved by the Vice-Chairman cannot be increased;

(d) That cost of land cannot be changed at Rs. 62/- per sq. mt. and in any event, the calculations and correspondence relied upon to justify it, do not support it;

(e) That the premium on land should be divided between allottees of ground floors and first floors and not duplicated;

(f) Contingencies at 3% cannot in any event be levied on anticipated expenditure like arbitration and litigation.

(g) Contribution to EWS was a later thought and is not a cost factor and so should be excluded;

(h) There is no litigation apart from the present contest between the DDA and the allottees and the costs thereof cannot be included in cost factor; in any event, the estimate of Rs. 4 lacs in this respect is highly inflated;

(i) Even, as per the latest calculations, the disposal cost charged for flats and garages is excessive.

G. DDA''s further affidavit:

The DDA filed an affidavit on 18-1-1984 in reply to the above affidavit of the petitioners. Broadly, the figures referred to by the petitioners are accepted to be correct except for certain minor errors which have been indicated earlier as footnotes. The other comments of the petitioners are repudiated and it is submitted that--

(a) The Vice-Chairman is competent to fix the price and no question'' of ad hoc increase arises;

(b) Anticipated liabilities have to be taken into account to avoid losses;

(c) The cost of land has been properly distributed;

(d) The land had to be charged at market value (at least in respect of Categories II and III flats which are intended for higher income groups) and the Departmental and administrative charges at 15% and 2% as per resolution No. 397 dt. 16-12-1977 whereas the petitioners have been charged much less;

(e) The petitioner cannot choose to accept these decisions of the Vice-Chairman as are in their favour and ignore those which are against them;

(f) Details of other expenditure still continue coming in;

(g) As per experience of the DDA, the provision of Rs. 4 lakhs towards litigation expenditure is not at all excessive and these are not included in administrative or departmental charges (vide the resolution of Housing Committee No. 209 dt 26-11-1974);

(h) Contribution to EVVS fund was an idea decided upon in April, 1978 and is not an afterthought.

H. Latest Affidavit:

One more affidavit filed on behalf of the DDA needs to be referred to. This is an affidavit dt. 11-1-1984. This stated that valuation reports in respect of the flats constructed by the DDA under various Self Financing Schemes had been obtained from Shri Swami Dial, Retd. Chief Engineer, CPWD and former Chief Engineer (Valuation) for the Income Tax Department. The report, pertaining to the Saket flats in two parts, is annexed to the affidavit The report bears no date and the details are too cumbrous to be set out The conclusion is that the "fair market value" of these flats in December, taking the departmental and administrative charges at 103 10% and 1% respectively would be:

______________________________________________________________________________________ Method of Category I Category II Category III computation Terrace No Terrace G.F. IST & 2nd floors. _______________________________________________________________________________________ Rs. Rs. Rs. Rs.

a. If cost of land is Rs. 92/- per sq. mt. 86,500 86,500 1,07,300 1,45,300

b. Land at Rs. 54 per sq. mt. with equalisation at Rs. 100/- per sq. mt. 91,000 90,000 1,10,500 1,53,000

c. Land at 54 per sq. mt. with equalisation at Rs. 200 per sq. mt 98,600 97,600 1,19,000 1,65,500

d. Fair market value 1,10,000 - 1,40,000 1,85,000 ______________________________________________________________________________________

The Short Question:

We have set out elaborately the details of the various affidavits filed in Order to explain exactly how the matter has developed. However, it will at once be obvious that it is not within the province of the writ court to go into the intricacies of the calculations, decide the correctness of the various inclusions or their extent or compute the figure at which the disposal cost should be fixed. Our jurisdiction in this case is very limited. As we have explained earlier, at the time of the promulgation of the scheme, the DDA had committed itself that the flats would be allotted at the actual cost. That actual cost was tentatively fixed at a figure which was announced subject, however, to variations in cost factors. It is not open to the DDA to alter this basis for the determination of the disposal cost. So long as the DDA adheres to this basis in fixing the disposal cost, court will not interfere. It will not interfere even if there should be some mistakes or exaggerations in the calculation of the components of the figure arrived at, as that would be a matter for determination after evidence and investigation in a suit. Even if an item should be included in the cost components, about the inclusion of which as one of the cost factors there could be some doubt, the writ court may not interfere and may leave the parties to fight out their battle in a regular suit. But where the disposal cost is fixed on a basis totally different from that announced earlier or where the components taken into account cannot be described by any stretch of imagination as cost factors or where a component of the cost is shown to have been fixed arbitrarily and without any basis whatsoever, the Court has no option but to quash the determination of the disposal cost so fixed and direct the DDA to undertake afresh a proper determination thereof in accordance with the terms of the original contract or after excluding the items unwarrantedly included therein or after redetermining the value of any component on a proper and reasoned basis.

We should, therefore, first ascertain the basis on which the disposal cost has been determined by the DDA here. The DDA has not been able to pinpoint any particular paper on or papers which will clearly show how the exact computation of the figures of disposal cost finally demanded from the petitioners has been arrived at and whether these particular figures were actually approved by the Housing Committee or the Vice-Chairman and, if so, when. But the paper marked as Ann. Ins. I to IV throw considerable light on the process. They show that the actual plinth area rate was worked out at Rs. 734.69 per sq. mt. (Ann. Ins. III) and, on this basis, the figures of disposal cost were worked out (in Ann. Ins., I & II). These show that it was worked out at Rs. 79,800, 78,800, 97,900, 1,34,000, 21,600 and 27,300 respectively in respect of categories I (with terrace), I (without terrace), II, III, Garages and Servant quarters. This computation included cost of works, departmental and administrative charges, premium for land at Rs. 45/- per sq. yd. and two factors which can be described as EWS and EC. The former came to Rs. 6,300 in respect of Category II flats only and Rs. 1,100/-, in respect of garages. The latter was worked out, at Rs. 100/- per sq. mt. at Rs. 7,900, Rs. 8,700 and Rs. 13,200 respectively in respect of the three categories of flats and, at Rs. 200/- per sq. mt., at Rs. 4,900 and Rs. 5,800/- respectively in respect of the garages and'' servant quarters. If the equalisation charges are excluded, the disposal cost would work out as follows:

Category Rs. I (with Terrace) 71,900 I (without Terrace) 70,900 II 89,100 III 1,20,700 Garages. 16,700 Servant quarters 21,500

But the calculations in Ann. Ins. III and IV show that these figures underwent some vetting in the accounts department. The details of this calculation are not available and it is not clear whether the land cost here has been worked out at Rs. 62/- per sq. mt. as suggested by the accounts department, for the figures arrived at by the department, even after charging 7% for ground floor flats (Category II) work out at slightly smaller figures:

Category Rs. I (with Terrace) 71,100 I (without Terrace) 70,100 II 87,900 III 1,19,400

The reason for the small difference of Rs. 800/-, Rs. 1,200/- and Rs. 1,300/- respectively in the three categories is not apparent.

To the figures thus arrived at have been added equalisation charges at Rs. 100/- or Rs. 200/- per sq. mt. raising the disposal cost by Rs. 15,700 (Cat I), Rs. 17,300 (Cat II) and Rs. 26,300 (Cat. III). The reason for making this addition is explained in the note to the Housing Committee in respect of resolution No. 449 of 24-12-1980. It is further stated there that usually an addition of Rs. 100/- per sq. mt. used to be made but that it should be somewhat increased so that the people living in trans-Yamuna area should get some solace. We are totally at a loss to see how this addition, as part of the cost of construction, can be supported. It is clearly an addition made over and above the cost of construction for extraneous reasons. Whatever may be the relevance or justification for making an addition of this type in fixing the market price or disposal price in otherwise free conditions, the DDA, having committed itself to allot flats at the actual cost cannot make any such addition, whatsoever to the cost as determined by them. The same consideration perhaps applies also to the transfer to the EWS Fund but we shall say nothing in regard to this as, even with the addition on this account, the cost of a category II (Ground Floor) flat has been fixed only at Rs. 87,900 as against Rs. 85,000/- earlier announced and the figure of addition towards EWS in respect of garages is too insignificant an amount to be interfered with.

It is, however, argued for the DDA that though this was the basis of the note put up to the committee and the note of the Finance Adviser (H), the final grounds for the additions made were different. It is pointed out that the basis finally approved by the Vice-Chairman on 23-11-80 was that the proposed addition should cover the four aspects mentioned in the note of the Finance Member, namely:

(i) to cover the fact that some of the allottees belong to higher come group;

(ii) to cover contingencies;

(iii) to cover maintenance and service for some time; and

(iv) to cover unforeseen liabilities of arbitration, litigation and rectification of defects.

Learned Counsel for the respondents appear to be correct in characterising the note of the Finance Member as an effort made by him (on realising the amenability of making an ad hoc addition of an Equalization Charge as suggested in the earlier hotings) to enunciate some plausible (but in justified) grounds to justify the proposed addition to the cost of construction as worked out by the accounts department of the DDA. We say this for three reasons. In the first place, if the addition had been intended to be based on these grounds, there should have been some attempt at working out, at least on a rough basis, an estimate of the addition that these grounds would call for and to correlate it with figures of Rs. 200 per sq. metre suggested as an ad hoc addition. In the absence of any such attempt at quantification the arbitrariness of the addition proposed becomes quite apparent and the criticism that the grounds are given as "camouflage" to cover up the ad hoc nature of the addition rather than as a genuine addition proposed on other tenable grounds becomes valid. Secondly, this note clearly overlooks that the first factor mentioned regarding the paying capacity of the allottee is irrelevant (not to say, also inappropriate, at least in the case of allottees of flats of category I and category II) and the other three aspects have already been taken into account while working out the cost of construction. It was not the case made out that though these items had entered into the picture, the inclusion had been incomplete or inadequate. No attempt was made to examine whether there had been any inadequacies in making these charges earlier or to see whether they required to be supplemented in any manner and, if so, in what respects and to what extent Thirdly, as pointed out in the note put up to the committee, it had been decided even on 27-2-1980 that equalisation charges at Rs. 100/- per sq. metre were to be charged in respect of the South Delhi Colonies and the proposal for the consideration of the Vice-Chairman was whether this needed to be enhanced further. It is hardly possible to agree with the suggestion that, in approving the proposal the Vice-Chairman had agreed that the ad hoc charges approved earlier be given up and that the addition be restricted only to the four grounds enunciated by the Finance Member unless he has specifically said so. This basis of justification for the addition cannot, therefore, be upheld.

It is next pointed out for the DDA that at the time when the S.F.S. was proposed to be introduced and the norms of costing decided upon, the Housing Committee had decided, on 16-12-1977, that the cost of land in respect of MIG : LIG and Janta Group Housing Schemes was to be at predetermined rates but that in respect of allottees in the higher income groups, it should be charged for at the average market price in the place. It is argued that the addition of Rs. 200/- per sq. metre would be more than justified on this account alone. There are several difficulties in accepting this argument .In the first place, this aspect is not mentioned anywhere in the working of the figures or in the notes put up or the minutes as reworded. Indeed, if this factor had really been considered, there need have been no attempt to support the proposed addition on the other grounds mentioned in the notings above referred to. Secondly, it appears that, at that time, the precise formulation of the eligibilities for the SFS does not appear to have been made as can be seen from the reference to separate rates for MIS : LIG and Janata Group allottees and allottees in the higher income groups. As the scheme eventually emerged, it was not based on any group classification on the basis of income. It catered to people who could pay the money asked for, whatsoever income group they belonged to. That this resolution is not applicable here will also be clear from the fact that cost of land is not sought to be supported, even now, on differential rates based on income grouping. That resolution does not envisage a uniform costing of land at market rate for all categories of allottees which is what is now sought to be made. Thirdly, it is seen that a proposal put up to the Housing Committee and approved at its meeting of 24-10-1980 by resolution No. 447, determined the cost of land to be charged in respect of Group Housing Pockets. It said:

We may charge uniform rate of land for-all the Group Housing Colonies irrespective of the consideration of their location.

We may charge at Rs. 61.50 per sq. metre of the gross area of land from all colonies for the present and review the position after about two years.

The cost of land as proposed at ''2'' above may be uniform for all categories i.e. MIG, LIG, Janta and C.S.P.

We may also charge extra on account of Equalisation Fund, discussed above, at the following rates:

(a) Zones A, B, C, D & F (these Zones are almost fully developed and are very popular) at Rs. 100/- per sq. m.

It is in the context of this proposal that the working of cost figures by the accounts department and the note in respect of resolution No. 449 for the same date should be read. The accounts department had, suggested cost of land having taken at Rs. 62/- per sq. mt. apparently on the basis of the proposal in respect of resolution No. 447 for the same date. But the note in respect of resolution No. 449 pointed out three things:

i) Inequity, on costing policy like departmental and administrative charges and cost of land should remain unchanged for allocation;

ii) Former Vice-Chairman had considered that SFS allottees predominantly belong to MIG and for uniformity MIG rates should be adopted and accordingly cost was charged at Rs. 45 per sq. yard as under group housing schemes;

iii) Increase of ground floor flats by 7.5% was to be taken to EWS Housing Fund.

These were approved by the Housing Committee. Regarding (i) the committee agreed that there should be no variation in norms after allotment and regarding (ii) that cost of land under SFS should be same as in General Housing Scheme. These two decisions were not disapproved or commented upon by the Financial Adviser (H) or the Finance Member. They apparently approved of the cost as worked out by the accounts department. Their only concern was that the cost so worked out should be increased on ad hoc basis for purposes of equalisation. Lastly if it was the decision that the land had been wrongfully charged at Rs. 54/- per sq. m. and should have been charged at Rs. 62/- per sq.m. or the market price, it should have been specifically so decided and in the event of the latter being adopted, there should have been some effort to find out the market price and fix the addition accordingly. A careful perusal of the proceedings makes it absolutely clear that the addition of Rs. 200/- per sq. m. was to the actual cost of construction as worked out; it had nothing to do with the redetermination of the cost or market price of the land as is now suggested.

Our earlier discussion would show that strenuous efforts have been made on behalf of the DDA to justify the disposal price demanded with reference to (a) current market prices; (b) the cost of construction (actual and anticipated) and (c) the detailed report of an eminent engineer who has been asked by the DDA to value the flats. We do not wish to go into these details nor can we do so. If the position had been that the disposal price had been fixed altogether arbitrarily and that it was necessary to go into the details of the cost of construction, we may have merely quashed the disposal price fixed and directed a fresh determination on proper principles. But here the records clearly show that the disposal price had been calculated by working out the cost of construction but that after doing so some extra element has been added over and above by way of equalisation charges. We would be wholly unjustified in going into the correctness of the cost of construction as worked out by the DDA. We would be equally unjustified in permitting the DDA to go back upon this computation to furnish now, if it can, fresh modes or basis of computation of actual cost in an effort to sustain the disposal prices fixed or in examining how far these computations are correct and how far not. We, therefore, make no comments in regard to the affidavits and valuation report filed by the DDA in this direction.

Conclusion:

To sum up, our finding is that the DDA had computed the actual cost of construction of these flats at Rs. 70,100/-, Rs. 71,100/-, Rs. 87,900/- and Rs. 1,19,400/-. The cost of the servants'' quarters and garages were worked out at Rs. 27,300/- and Rs. 21,600/- after including Rs. 5,800/- and Rs. 4,900/- by way of EC, i.e. at Rs. 21,500/-and Rs. 16,700/- before such inclusion. To these figures they have added an ad hoc sum and this addition has no basis or relevance to the determination of actual cost. We are, therefore, of opinion that a mandamus should issue to the DDA that, from the disposal price of the flats as determined and demanded from the petitioners, this unwarranted component to the extent of Rs. 15,700/- in respect of category I flats, Rs. 17,300/- in respect of category II flats, Rs. 26,400/- in respect of category III flats, Rs. 5,800/- in respect of servants'' quarters and Rs. 4,900/- in respect of garages, should be excluded and only the balance of the disposal price be demanded from the petitioners in respect of the respective flats allotted to them. We direct accordingly.

To summarise the arithmetical result of our findings in terms of figures, the position would be as follows:

Category Original Cost as worked Cost recoverable Estimated cost out after exclude- as per our order, ing EC _____________________________________________________________________________ I (with Terrace) 55,000/- 86,800/- 71,100/- (without Terrace) 55,000/- 86,800/- 70,100/- II 85,000/- 1,85,200/- 87,900/- III 1,15,000/- 1,45,800/- 1,19,400/- Garage 14,000/- 21,600/- 16,700/- Servants'' Quarters 15,000/- 27,300/- 21,500/-

The writ petition stands allowed as indicated above. However, having regard to the niceties and difficulties involved, we would direct the respective parties to bear their own costs.