Teena Jain vs State of Rajasthan and Others

Alok Sharma

All these petitions have been filed with the similar prayer that the demand notice under the hand of the Resident Engineer Rajasthan Housing Board (herein after ''the Board'') requiring the petitioners to pay a sum of Rs. 1,48,954.60 for allotment of a house admeasuring 31.42 sq. meters be set aside and that the Board be directed to allot houses to the petitioners at the indicative rate of Rs. 85,000/- as detailed in the brochure circulated by the Board in the year 2005 for allotment of houses built over plot admeasuring 31.42 sq. meters in its Special Residential Scheme Gharonda 2005. The facts in the case of Teena Jain Vs. State of Rajasthan (S.B. Civil Writ Petition No. 2471/2011) are being taken as a leading case for determination of the issues raised by petitioners in their respective writ petitions.

The case of the petitioner Teena Jain is that in the year 2005 the Board introduced a residential scheme popularly known as Special Residential Scheme Gharonda 2005 for the purpose of allotment of houses to economically weaker section (EWS) of the society. The said scheme was formulated for backward areas of Rajasthan more particularly in Mangrol, Baran, Aklera, Atru, Ramganj Mandi in Jhalawar and Kota Districts. It is stated that enthused by the Special Residential Scheme Gharonda 2005, the petitioner got herself registered as an applicant for allotment of house and deposited requisite registration fee with the Board in the year 2005. It is submitted that the petitioner was found eligible for registration for the allotment of house under the category of EWS and that in the lottery held for the registered applicants in 2009 she was declared successful and thus became entitled for allotment of a house in Aklera District Jhalawar, whereupon Gharonda No. 3/20 was allotted her on 106-2009. An allotment cum possession letter dated 15-9-2010 in her favour followed.

The case of the petitioner is that as against the indicative price of Rs. 85,000/- for the house advertised under the Special Residential Scheme Gharonda 2005 as circulated by the Board in the year 2005, the allotment cum possession letter dated 15-9-2010 demanded payment of the enhanced cost of Rs. 148954.60 along with other charges applicable aggregating Rs. 161416.33. It is contended that the increase in the price of the house allotted under Special Residential Scheme Gharonda 2005 to petitioner belonging to weaker section of the society is wholly arbitrary, unconscionable and is thus liable to be quashed and set aside. A further allegation has been levelled that the house allotted to petitioner was not constructed as per prescribed norms and was substandard. It is submitted that in this regard a complaint was also made to the Consumer Forum Jhalawar. (It is however not been stated in the petition as to what the details of complaint were, or what steps were taken or what was the outcome of the said complaint). The petitioner has also invoked Article 21 of the Constitution of India to contend that the right to shelter is an ingredient of right to life and that the arbitrary enhancement of price of the house allotted to petitioner in fact would tantamount to denial of petitioner''s right to shelter as, belonging to the EWS category, the petitioner would not be in a position to pay up the enhanced price of the house as demanded by the Board.

The State Government and the Board have filed separate replies to writ petition. In the reply to writ petition the common defence is that the Special Residential Scheme Gharonda 2005 merely invited applications for registration for allotment of a house amongst the applicants who fulfilled the eligibility criteria. It has been submitted that however no right to an applicant accrued merely on registration entailing a payment of a meager amount Rs. 10,000/- as registration fee, whereupon an applicant merely became entitle to participate in the lottery for allotment of house. It is submitted that the lottery for the allotment of the house was to be held on the construction and readiness of the houses and payment of installment towards the cost of the house allotted was to be made only on issue of allotment cum possession letter.

It has been further submitted that it is universally known that escalation of prices owing to increase of cost of raw material and labour is routine and it is inconceivable that, even while the Board acts for no profit no loss, it is programmed for making a loss as would necessarily follow from the Board registering applicants in a year and freezing the cost of construction as calculated on the date of registration for allotment of the house without regard to the economics of the actual cost of construction. It is also submitted that Board is dealing with public monies and public monies cannot be expanded for private gain of allottees more so on a perverse and unfair reading of the conditions of the Special Residential Scheme Gharonda 2005. It is submitted that action of the Board in demanding Rs. 1,43,800 in the year 2009 as against the indicative cost Rs. 85,000/- in the year 2005 cannot be treated to be either arbitrary or a breach of its alleged obligations. It is submitted that cost of house is to be calculated on the basis of cost of land, construction and development charges for the house allotted on the date of the allotment and such costing is absolutely just and reasonable and necessary to safeguard the public exchequer. It has been also submitted that in any event the petitioner did not have any legal or fundamental right to allotment of a house by the Board at a price of his choice on a misreading of the terms and conditions of the Special Residential Scheme Gharonda 2005. It is submitted that consequent to registration of various applicants for consideration for allotment of house by the Board, the Board proceeded to construct 264 houses, in respect of which lottery was held Board on 15-3-2008 in regard to 170 houses and on 10-6-2009 in regard to 94 houses, thereafter allotment letters were issued to 264 allottees. It has been submitted that one Khemraj the allottee of house No. 2/32 had deposited entire amount demanded. Similarly Rambabu Lakhara the allottee of house No. 3/15 has deposited entire amount as demanded and taken physical possession of the house. It has been contended that there was no unnecessary or unreasonable delay in construction of houses as no express representation had been made with regard to the date of allotment and in fact no advance for the construction of house taken-the payment of the registration fee apart. It is submitted that subsequent to inviting applications from the applicants under the Special Residential Scheme Gharonda 2005, the work of construction and development was started after inviting tender applications. It has been submitted that as a statutory body, the Board has to adhere to detailed processes in carrying out its works and in the context of its obligation as a public authority, unconscionable delay in the construction of the houses in issue by the Board cannot be made out.

It is further submitted that the cost of the house was determined on the basis of cost of land, construction and development charges prevalent at the time of allotment of house. There was no assurance in fact or in law from the Board to freeze the cost of construction at Rs. 85,000/- only as approximately prevalent in the year 2005-06. The doctrine of estoppel as advocated by the petitioners has been stated not to apply in the facts of the case as no unequivocal representation as to the cost of the house could be attributed to the Board. It is pointed out that on the contrary a holistic reading of the terms and conditions of prospectus of the Special Residential Scheme Gharonda 2005, particularly condition No. 16, indicates that allotment of house was to be made at the price determined/ calculated by the Board at the time of allotment of house.

It is submitted that the estoppel in the facts of the case operates against the petitioners and writ should be dismissed on this ground.

It is further submitted that invoking of Article 21 of the Constitution of India in the present is misdirected, as the Article 21 does not entitle an allottee of a house constructed by the Board to an allotment at a cost lower than the cost incurred by the Board.

A rejoinder has been filed by the petitioner, wherein the case set out in writ petition has been reiterated and it has been submitted that the petitioners are entitled for allotment of house at the price set out of the Special Residential Scheme Gharonda 2005 as the houses were to be built and allotted within one year of the registration i.e. by 2006. It has been submitted that the delay in the construction of houses could not be attributed to petitioners or other similarly placed applicants and was wholly to the account of the Board and the Board having delayed in construction of houses; it could not be allowed to take advantage of its wrong and burden the petitioners with the higher cost of the house than set out in the prospectus of the Special Residential Scheme Gharonda 2005.

Heard learned counsel for the parties and perused the material available on record of the writ petitions.

Before addressing the case of petitioners, it would be relevant to refer the relevant term and condition of the Special Residential Scheme Gharonda 2005 circulated by the Board inviting applications from interested persons belonging to weaker section of the Society.

Condition No. 3(a) of the Special Residential Scheme Gharonda 2005 provided that where the applicants were more than 500 in number, only 500 applicants would be selected out of registered allottees through lottery, and the remainder applicants would be refunded the registration amount. Condition No. 16 of the Special Residential Scheme Gharonda 2005 extremely relevant for determination of these cases, is reproduced here under:-

Condition No. 17 of the Special Residential Scheme Gharonda 2005 provided that allotment would be made on the basis of lottery conducted amongst registered applicants. Condition 18 provides that where allotment was made subsequent to registration, for the duration of registration the applicant would be entitled for varying rate of interest. Where allotment was made within three years of the registration 5% interest would be paid on the registration fee; where allotment was made after three but within six years, 6% interest on the registration fee would be paid; and where allotment was made after six years, 7% interest on the registration fee would be paid. Condition No. 25 provides that the Board would be free to alter/ extend the scheme, and in case of any additional expenses incurred such expenses would be to the account of allottees who would be obliged to make payment of the amounts thereunder.

A holistic and harmonious reading of the terms and conditions of the scheme in issue indicates that the cost Rs. 85000/- was thus merely an indicative cost in the year 2005. There was no fixed price frozen in terms on which the allotment would be made to the applicants registered. The Board while hoping to construct the house in one year had also categorically stated that it worked on the basis of "no profit no loss" and that the houses would be allotted at the cost which would be determined at the time of allotment of house with the allottee having no right to demur or object to the price at which the allotment was made. Condition 18 of the Special Residential Scheme Gharonda 2005 refers to right of registered applicant to get interest on the amount of registration even beyond six years of registration till the date of allotment of house. This condition clearly implies that it was not at all in the contemplation of the Board or that it represented that it would be obliged irrevocably to complete the construction of house/s within one year and make an allotment to successful allottees on the indicative prices. If the Board would have undertaken irrevocably to allot the houses within one year from the date of registration, condition 18 of the prospectus of Special Residential Scheme Gharonda 2005 would be redundant and otiose. It would also do well to recall that no advance amount towards cost of construction was obtained by the Board. The payment of registration fee only entailed a right to be considered for allotment not any right for allotment as is evident from condition No. 3(a) of the scheme which provided that unsuccessful applicants in the lottery would be refunded the registration fee. This condition is clearly counter-indicative of even a right to allotment of the house-what of a right to allotment of a house within one year of the registration at the indicative cost. The contention of the petitioners are thus on the face of it quite contrary to the terms and condition of the scheme.

The Hon''ble Supreme Court in case of Kanpur Development Authority Vs. Smt. Sheela Devi and Others etc., has held that each case with regard to allotment of house by a statutory authority has to be decided on its own facts and circumstances and in the light of the scheme published/ framed as also the terms and conditions mentioned in the brochure and/ or in the prescribed form of the application. A Division Bench of this is Court in the case of Nemi Chand Patni Vs. Raj. Housing Board [D.B. Civil Writ Petition No. 451/1987, decided on 16-7-1987] has held that mere registration does not entitle the applicant to get the house allotted at a price mentioned in the book-let and allotment of the house has to be at the price when the house is allotted in view of the fact that it is universally known that inflation entails escalation of the indicative price of the house set out in the prospectus at the time of registration of the scheme. The court has thus clearly recognized the absurdity of setting up a case of frozen prices unless such a case can be made out categorically and irrevocably from stated terms and conditions. Such categorical and irrevocable representation by the Board to the registered applicants for allotment of the house does not obtain in the facts of the present case.

In my considered opinion the aforesaid two cases apply on all fours to the cases at hand.

I also find no substance in the case of petitioners in the facts of the case that the Board is estopped from charging a higher price at the time of allotment than the indicative price as detailed in the prospectus of Special Residential Scheme Gharonda 2005. The factual foundation for a plea estoppal are absent in the case and in fact the terms and conditions of the prospectus of the Special Residential Gharonda Scheme are contra indicative of such a plea. I do not find any representation unequivocal or otherwise by the Board as claimed by the petitioner. On the contrary even the allotment of house was not definitive and was dependent upon success in the lottery under condition 3(a). Further, the Board has unequivocally stated the condition No. 16 of the prospectus that price indicated in 2005 was not the actual price and the actual price would be determined at the time of allotment. Admittedly the allotment in the present case has been made in the year 2009. Consequently the Board was entitled to determine the price of the house on the date of allotment as appears to have be done. It is clear that the petitioners in accordance with the terms and condition of the Special Residential Scheme Gharonda 2005 had agreed and applied for registration and sought allotment of house under the EWS category by the Board on the understanding that price determined by the Board at the time of allotment would not be subject to any objection/ challenge by the petitioner.

I also do not find any substance in the ground agitated by the petitioner relying upon Article 21 of the Constitution of India. Article 21 of the Constitution of India cannot make a case for seeking a direction against the Board to allot a house under the Special Residential Scheme Gharonda 2005 at the price lower than the actual cost incurred by the Board for construction of house and determined in accordance with condition 16 of the Gharonda 2005 residential scheme. The Rajasthan Housing Board is a public body constituted under an Act passed by the Rajasthan Legislative Assembly. It deals with public monies which inter alia draw on public exchequer. Selling houses sub-cost is not the mandate of the Housing Board. The Board is only to eschew profit while supplying an essential need to the community. Sub-cost housing would be a subsidy unapproved in law to public detriment and the destruction of public finances. Counsel for the Board has submitted that houses in the vicinity of the houses allotted even in 2009 were several times dearer. It appears the petitioner only seeks to profit personally at public cost.

No material has been submitted by the petitioners before the court to establish that the price of the house at the time of issue of allotment cum possession letter was unconscionable or expropriative or otherwise arbitrary with reference to the cost of construction expanded by the Board.

Consequently, the writ petitions are misdirected, have no force and are dismissed. Stay application and misc. applications are dismissed.