The Tamilnadu Housing Board vs T.V.S. Colony Welfare Association

S.J. Mukhopadhaya, J.—As common question of law involved, both the writ appeals were heard together and disposed of by this common

judgment.

TVS Colony Welfare Association, Anna Nagar West Extension, Madras, (hereinafter referred to as ''Association''), preferred both the writ

petitions. Prayer was made to direct the Tamil Nadu Housing Board (hereinafter referred to as ''Housing Board) to refund to its members named in

Annexure A, B and C, whatever the sum collected from them in respect of the properties allotted in their favour by the Housing Board. In the other

writ petition, further prayer was made to execute and present registration sale deeds in respect of the members of the association named in

Annexure-C. Learned single Judge, having allowed both the writ petitions, the Housing Board preferred these appeals.

The main plea taken by the Housing Board is that in respect of some of the members sale deed having already been executed, everything

reached finality and thus no refund could be asked for by such members. Further, according to the Housing Board, at the time of agreement,

tentative cost of land having been fixed, as agreed by parties, including the members of the association, they were liable to pay the full cost of the

land after finalisation of the cost and thus no excess amount was claimed. It was submitted that without payment of rest of the amount as per the

final fixation of cost of the land, no final sale agreement could be executed in favour of the allottees, who are members of association named at

Annexure-C.

On the other hand, according to counsel for the association, in the light of decree in civil suit, C.S. No. 385/85, vide judgment dated 1st July,

1991, the Court held that the Housing Board is not entitled to demand any excess price other than the one originally fixed and, therefore, the

Housing Board cannot raise any excess demand and excess amount, if any, paid by one or other member, in whose favour sale deeds have already

been executed, it should be refunded. It was also submitted that Resolution No. 20, dated 29th May, 1984, by which Housing Board enhanced

the cost of the land was declared illegal in a suit by this Court.

Though general pleading was made before learned single Judge, it appears that details of land allotted in favour of one or other members of the

association, the terms of lease agreement, sale deed, etc., were not brought to the notice of the court. In the present appeal, copies of certain

orders of allotment, lease-cum-sale agreement, draft sale deed/sale deed in respect of some of the members of the association has been brought to

the notice of the court for determination of the issue. From the aforesaid documents, following fact emerges:

i) By letter No. A6/56407/79 dated 5th July, 1980, one of the allottee - member of the association, was informed the price of the house, total cost

of the house and the amount of installment as was to be paid. It was specifically mentioned that the cost of the house is inclusive of tentative cost of

the proportionate extent of land with interest.

ii) The lease agreement stipulated that the price of the land was tentative and may be revised at a later stage in accordance with the decision, if any,

given by the Tribunal or courts, as evident from Clause 5 and quoted hereunder:

AND WHEREAS therefore the price of the land as fixed by the board in this Deed is purely tentative and may be revised at a later stage in

accordance with the decisions, if any, of the Tribunals and Courts referred to above.

iii) From letter No. A3/56907/79 dated 28th July, 1989, issued by Housing Board to the same allottee - member of the association, whereby he

was informed the tentative cost of the house with plot as Rs. 17,850/= and the final cost of the house with plot at Rs. 23,141/= and was asked to

pay the difference amount of Rs. 5,291/= in one lumpsum or in installment with 14% interest.

iv) From the sale deed dated 6th Jan., 1990, executed in favour of the said allottee - member of association, that the cost of Rs. 23,141/= in terms

with letter dated 28th July, 1989, was reflected for discharging the liability.

From all the aforesaid documents, as referred to above, it will be evident that the allottees, including members of the association, in their

agreement and other letters they were informed that the cost of land was tentative and may be revised at a later stage in accordance with decision,

if any, rendered by Tribunal or Court of law. Thus, if the Housing Board was to pay more cost for the land, pursuant to any decision of any

Tribunal or Court of law to the original land holders, then it was to be borne by the allottees.

It appears that out of 196 allottees, 155 allottees, who are members of the association, had already paid the total amount as per the final cost and

sale deeds had already been executed in their favour. It is only thereafter when some other allottees could not pay the amount and were asked to

pay the rest of the amount towards final cost and on refusal to execute sale deed without such payment, the association moved the two writ

petitions, one for refund of excess amount and another for execution of sale deed without payment of such amount.

So far as resolution No. 20, dated 29th May, 1984, is concerned, the allottees of the area, i.e., members of the association are not covered by

the said resolution. The said C.S. No. 385/85 to which reference has been made is also not binding between the parties as neither the association

nor its members were party to the said suit, but it was preferred by allottees of some other area. The said decision was rendered on the basis of

evidence on record, including the agreement as reached between the Housing Board and those allottees of the other area and thus cannot be relied

upon for the benefit in favour of the members of the association in question.

In the case of Shimla Development Authority Vs. Asha Rani, , the Supreme Court held that allottees were bound to pay the cost of escalation in

construction and cost of escalation of value of land, in case court enhanced the compensation for land acquired under the Land Acquisition Act at

various stages.

In another case of Preeta Singh, etc., Vs. Haryana Urban Development Authority and others, , the Supreme Courtnoticed that the allottees were

paying the amount as per the original demand calculated provisionally. The Supreme Court held that the competent authority is entitled to demand

Additional Price"" or expense incurred towards acquisition of land, its development etc.

In the present case, learned single Judge failed to discuss the question whether the price of the land as shown in the agreement was tentative or

final. The Court also failed to notice that the association or any of its members being not party to the civil suit, C.S. No. 385/85, the judgment

dated 1st July, 1991, passed in the said suit was not binding on the Housing Board in respect of the members of the petitioner-association. Without

deciding the issue whether one or other individual member actually paid any cost excess to the cost finally determined between the parties, the

Court directed to refund the amount and to execute agreement with some others, who have not paid the final cost.

In view of our aforesaid finding, the impugned order passed by learned single Judge cannot be upheld. We, accordingly, set aside the order

dated 21st Jan., 1994, passed by learned single Judge in W.P.Nos.12628 and 12629 of 1992, but remit the case with the following observation:

i) If any allottee paid excess amount than the amount finally fixed for land, such allottee may bring the matter to the notice of the Housing Board. In

such case, the Housing Board, after verification, if comes to a conclusion that excess amount has been paid by any one or such original allottee, it

may refund the excess amount to such allottee.

ii) However, if original allottee has already sole/transferred the property in favour of any other person, who is not the original allottee, in such case,

no refund be made either in favour of the original allottee or subsequent purchaser/occupier.

iii) So far as the allottees in favour of whom no sale deed has been executed, the Housing Board will execute sale deed on payment of full and final

consideration amount.

iv) If any allottee has transferred or handed over the house property to a third party without permission of the Housing Board, in such case, the

Housing Board will not regularise such transfer by executing a sale deed on the basis of the amount for which it was decided to sell in favour of the

original allottee. However, on payment of the market value of such property, the Housing Board may regularise such transfer by executing the sale

deed, if otherwise permissible under law.

Both the writ appeals stand allowed with the aforesaid observations. But there shall be no order as to costs.