Ishwar Dass Nassa & Ors vs State Of Haryana & Ors

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4211 OF 2004

Ishwar Dass Nassa and others ... Appellants

versus

State of Haryana and others ... Respondents

With

CIVIL APPEAL NO. 4209 OF 2004

Pyare Lal and others ... Appellants

versus

State of Haryana and others ... Respondents

J U D G M E N T

G. S. Singhvi, J.

1. Whether the Haryana Housing Board (for short, `the Board') could

ignore the time limit of 7 years specified in clause 2(w) of the Hire Purchase

Tenancy Agreement executed by the appellants as per the requirement of

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Regulation 11(4) of the Housing Board Haryana (Allotment, Management and

Sale of Tenements) Regulations, 1972 (for short, `the Regulations') framed by

the Board in exercise of the power conferred upon it under Section 74 of the

Haryana Housing Board Act, 1971 (for short, `the Act') and demand additional

price from them after 10 years of the allotment of tenements is the question

which arises for consideration in these appeals filed against the orders passed

by the Division Bench of the Punjab and Haryana High Court whereby the

letters patent appeals filed by the appellants were dismissed and the order

passed by the learned Single Judge declining their prayer for quashing the

demand of additional price was upheld.

2. In response to an advertisement issued by the Board in 1975, the

appellants applied for the houses proposed to be constructed at Sonepat for

Economically Weaker Sections (EWS), Lower Income Group (LIG) and

Middle Income Group (MIG). After scrutiny of the applications, the competent

authority allotted tenements of different categories to the appellants. The

allotment letters were issued in their favour in November/December 1978. For

the sake of reference, the allotment letter issued in favour of one of the

appellants, namely, Dharam Pal is reproduced below:

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"HOUSING BOARD HARYANA

HOUSING BOARD COLONY

SONEPAT

DATED 9.12.78

REGD.

No.830

Sh.Dharam Pal

c/o Mangat Ram Redy,

Model Town ,

Smalkha (Karnal)

Reference: Your application for registration No.64/EWS

2. EWS/LIG|MIG Tenement No.285 Area 49.94 S.Yds. The

Housing Colony at Sonepat is allottes to you on hire-purchase

basis on a tentative price noted below:

i) Price of House (Normal area) Rs.8000/- (Tentative)

ii) Cost of additional land, if any -----

iii) Additional charges for preferential

(corner) plot ________

TOTAL Rs.8000/-

3. The detail of the amount deposited by you as per your

application etc., is given below:

a) Registration deposit Rs. 500/-

b) Amount deposited for preferential

allotment ----

c) Amount deposit for preferential

(corner)house. ----

d) ----

4. You are requested to deposit the following amounts and take

possession of the house within 30 days of the issue this letter:-

i) Cost of additional land ----

ii) Additional charges for(corner)

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preferential plot ----

iii) Initial instalments/Ist yearly

instalment Rs. 700/-

iv) Cost of H.P.T.A.form Rs. 2.25

Total Rs.702.25/-

5. The balance price of the house is payable in monthly/yearly

instalments of Rs. 481/- each over a period of 18 years.

Sd/-

Estate Manager

Housing Board Haryana

Sonepat

CONDITIONS

1. The allottee shall be bound by the Haryana Housing

Board Act, Rules and Regulations thereunder.

2. If the allottee fails to execute the agreement and to take

possession of the house within 30 days of the issue of this letter

his name shall be removed from the allotment register and any

amount upto 50% of the earnest money deposited by him shall

be forfeited.

3. Possession of the tenement will be given after the Hire

-Purchase Tenancy Agreement is duly executed as prescribed

under the rules and the allottee has paid the initial deposit, first

instalment and such other dues as shall have been demanded by

the Board.

4. xxxx xxxx xxxx

5. xxxx xxxx xxxx

6. xxxx xxxx xxxx

7. xxxx xxxx xxxx

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8. The conveyance deed will be executed after the entire

amount due is paid by the allottee. All expenses for the

registration etc. shall be borne by the allottee."

3. The appellants deposited the amount in accordance with the stipulations

contained in the allotment letters and executed Hire Purchase Tenancy

Agreements. The relevant portions of the Hire Purchase Tenancy Agreement

executed by the Board and Dharam Pal are extracted below:

"HIRE PURCHASE TENANCY AGREEMENT

This INDENTURE MADE THIS 7th day of December

One thousand nine hundred and seventy eight (7.12.78)

BETWEEN HOUSING BOARD HARYANA constituted under

the Haryana Board Act 1971 (Act. No. 20 of 1971) (Hereinafter

called the owner and includes its successors and assigns) of the

one part and Shri Dharam Pal (Hereinafter called the hirer

which expression shall, unless inconsistent with the context of

meaning, includes, as hereinafter provide, the nominees

approved and failing which is heir, executors, administrators,

legal representatives and permitted assigns) of the other part.

WHEREAS in pursuance of the Housing Board Haryana

Act Rule & Regulation (hereinafter called the regulations) the

hirer has apparently applied to the owner for allotment of a

house under the Hire-Purchase Scheme and the owner has

agreed to allot a house to hirer upon the terms and conditions

hereinafter set forth."

xx xx xx xx xx xx xx xx xx xx

"2(w) If after the receipt of the final bills for the

construction of tenements or as the result of land award or

arbitration proceeding or enhancement in cost of land on any

account, the Board considers it necessary to revise the price,

already specified, it may do so and determine the final price

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payable by the hirer who shall be bound by this determination

and shall pay dues, if any, between final price so determined

and price paid by him including the price paid in lump sum,

provided that no change in the price shall be made after 7 years

from the date of allotment."

4. After about 10 years, the Estate Manager, Sonepat issued notices to the

appellants and directed them to pay additional price in lieu of the enhanced

compensation allegedly paid by Improvement Trust, Sonepat for the land which

was sold to the Board. The appellants challenged the notices by filing writ

petitions under Article 226 of the Constitution. They pleaded that in view of

clause 2(w) of the Hire Purchase Tenancy Agreement, the Board cannot

demand additional price after 7 years of the allotment of tenements. The

appellants further pleaded that most of them had already paid the installments

of price specified in the allotment letters and many of them had also obtained

no dues certificates. They relied upon Resolution dated 10.05.1989 passed by

the Board not to recover the additional cost of land from the allottees and

prayed that in view of the decision taken by the Board, the demand notices

should be quashed. In the written statement filed on behalf of the respondents it

was not denied that the Board had decided not to charge additional price from

the allottees but it was averred that they were under a moral obligation to share

the burden of additional cost paid to the Improvement Trust.

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5. The learned Single Judge rejected the appellants' challenge to the

demand of additional price by making the following observations:

"Where judgments are passed by the Court of Competent

jurisdiction increasing the amount of compensation awarded to

the land owners, whose land was acquired for development of

these projects at a much subsequent stage, cannot be hit by this

clause as the increase in the basic cost of the land is a

compulsion imposed upon the acquiring as well as on the

authority for the benefit of which the same was acquired. The

judgments of the Court are obviously not controlled either by

the acquiring body or by the Board. If the cost of acquisition is

increased by the Court of Competent jurisdiction, it will be

unfortunate that the general public is called upon to pay such

increased costs, while the land for the flats/plots has been

acquired for the benefit, utilization and enjoyment by the

petitioners exclusively. Such an interpretation in fact would be

opposed to public policy. Every contract or instrument should

be construed harmoniously so as to fall in line with the

principles of public policy rather than be opposed to it. A

Bench of this court in the case of Subhash Chander Arora and

others versus Housing Board, Haryana, Chandigarh through its

Chief Administrator and others - 1991-2 P.L.R. 698, relating to

the same clause held as under:-

"As far as the first point is concerned I find no merit in

the same. No doubt, the tentative price had been made

final but the increase in the price was due to the

enhancement in the compensation of the land which was

done by a Court of Law. It was not at the instance of the

Board that the prices were being increased. Since the

Board had to pay more compensation, naturally the

burden will fall on all the allottees of the land of which

the compensation has been enhanced. Accordingly the

Board was right in demanding enhanced price. However

question arises as whether the burden of enhanced

compensation should be borne only by allottees of

residential area or by all persons including who have

commercial property, like Cinema, shops etc."

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Even otherwise, the language of the Letter of Allotment or

clause 2(w) does not suggest the interpretation as put forward

by the petitioners. Every contract or document of this kind

must be read in its entirety and construed to give it a meaning

permissible in Law. The power of the Board is whether it

intends to revise the price payable by an allottee, allottee should

be bound by such determination. Obviously, this clause would

operate where there is increase in the price by the act or deed of

the Board in relation to construction or any other factor. But if

there is increase in the price for circumstances beyond the

control of the Board and in furtherance to the Judgment of a

Court of Law, there appears to be least scope for the Board to

apply its mind. Application of mind is a well accepted canon of

administrative law, but it must have some basis or field to be

operated upon. The judgments of the Court are binding on the

parties and the concerned Govt. or authority is obliged to pay

the compensation awarded to the land owners for acquisition of

their respective lands except where such Judgments is set aside

by the highest Court of Competent jurisdiction which

admittedly is not the case here. The judgments of the Courts

have attained finality and have directed the Government of

Haryana and HUDA to pay enhanced compensation to the land-

owners-claimants.

As a result of this compulsive directive of the Court over which

the State of Haryana, the HUDA or the Board had no discretion

to exercise, HUDA had issued the Letters for recovery of the

enhanced amount from the Board to whom the land was given

with the condition of recovery of enhanced amount. All that

the Estate Officer has done is to raise the letter of demand,

forward the demand of HUDA with added interest for the

interregnum period of HUDA's letter and recovery, more

particularly in the background that it had already paid amounts

to HUDA. The argument of the petitioners has an inherent and

inbuilt fallacy. If such interpretation, as suggested by the

petitioners is accepted, it will be opposed to public policy. In

other words, the lands which are to be enjoyed and are being

enjoyed by the petitioners, higher compensation would have to

be paid by the State from the money of the ordinary income tax

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payer, who is neither the beneficiary nor even remotely

connected with such land. Such welfare schemes of the State

are founded on the principles of fairness and to meet the general

requirements of the Society at large. Such schemes cannot act

detrimental to the very basis of State Welfare policies."

6. The Division Bench of the High Court summarily dismissed the letters

patent appeals filed against the orders of the learned Single Judge and thereby

approved the demand of additional price.

7. Shri Harish Chander, learned senior counsel appearing for the appellants

argued that in view of the express bar contained in para 2(w) of the Hire

Purchase Tenancy Agreement against change in the price after 7 years, the

Board did not have the jurisdiction to demand additional price simply because it

was required to pay additional cost for the land purchased from the

Improvement Trust. He submitted that the reasons assigned by the learned

Single Judge for upholding the demand of additional price are legally untenable

and the Division Bench committed serious error by summarily dismissing the

letters patent appeals.

8. Shri T.V. George, learned counsel for the Board argued that the terms

and conditions incorporated in the Hire Purchase Tenancy Agreement are not

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applicable to the cases in which the Board is required to pay additional cost for

the land on which the tenements are constructed. He submitted that if the State

Government or the Board is required to pay higher compensation to the

landowners in compliance of the direction given by the competent Court or an

award of the Arbitrator, the burden thereof is bound to be passed on to the

allottees of plots/houses/tenements. Learned counsel emphasized that the

demand notices were issued to the appellants because Improvement Trust,

Sonepat had asked the Board to pay additional cost for the land in lieu of the

enhanced compensation payable to the landowners. He submitted that time

bound adjudication of the landowners' claim for higher compensation is not

within the control of the State Government or the Board and the fact that the

appeals filed by the landowners are decided after considerable time cannot be a

ground to relieve the allottees of their obligation to share the burden of

additional cost.

9. We have considered the respective submissions. For deciding the

question arising in these appeals, it will be useful to notice the extracts of

agenda item Nos.109-113 of the Board's meeting held on 10.5.1989, resolution

passed in that meeting and Clauses 10(1) and (2) and 11(1), (3) and (4). The

same are reproduced below:

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AGENDA ITEM AND RESOLUTION OF THE BOARD

"To consider and accord ex-post-facto sanction to the payment

of enhanced land compensation for the land purchased by

Board at Sonepat Phase I & II from Improvement Trust,

Sonepat.

The Board purchased the land from I.T.S. during 1972-75 @

Rs.3/- per sq. yard. As per agreement executed with ITS in

respect of land allotted for Phase I, the land enhancement was

payable by Board as and when demand raised by Improvement

Trust. The land of Phase-II was allotted on the same terms of

Phase-I, its agreement could not be executed reasons for which

are not available in the record. As per the advise obtained from

the Advocate, the term applicable in agreement of Phase-I was

so applicable in case of Phase-II in respect of execution of

agreement of Phase-II.

Improvement Trust, Sonepat vide its letter No.279, dated

24.3.86 informed that the land owner filed a writ in the court

for land enhancement and as per judgment of A.D.J. Sonepat

dated 3.10.85 the land sale has been enhanced from Rs.3/- per

sq. yard to Rs.22/- (Rs.25/- per sq. yard) in respect of the

adjoining 100 wide road in the scheme.

As per H.P.T.A. executed with allottees of Phase-I the cost of

houses once fixed cannot be enhanced to disadvantage of

allottees, similarly as per H.P.T.A. executed with allottees of

Phase-II to whom houses were allotted in 1978-79 the enhanced

out of the house cannot be recovered from the allottees after

expiry of 7 years from the date of allotment. Hence State Govt.

was requested vide Housing Board Officer letter No.1100 dated

15.1.87 to pay the amount from State Govt. fund as Board was

not in a position to pay such huge amount. However, State

Govt. decided vide letter No.6/1/87-IHG dated 4.2.87 that the

Board should meet with this expenditure from its overall

budget.

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Board is further requested to approve the raising the demand

from allottees of Sonepat Phase I & II at the tentative recovery

rate of Rs.229/- per sq. yard.

The following resolution passed by the Board on dated

11.5.89.

1) The consider & accord ex-post-facto sanction to the

payment of enhance land compensation for the purchase

of land phase I & II from Improvement Trust, Sonepat.

2) The Board accorded ex-post-facto sanction for the

payment of Rs.53,98,091-00 the Improvement Trust,

Sonepat and State Govt. may be approached for

reimbursing this amount as demand from allottees cannot

be raised at this stage."

(emphasis supplied)

THE REGULATIONS

10. Allotment letter, conditions of allotment etc.- (1) After

the allotment of tenements is finalized the Estate Manager shall

issue an allotment letter informing the allottee that it is

proposed to allot to him the tenement on the terms and

conditions specified in the letter, and asking him to call at the

concerned office of the Board and take delivery of the authority

letter and to take over possession of the tenement within the

period specified in the letter.

(2) On receipt of an allotment letter, the allottee may, within

the period specified in the letter, accept the allotment of a

tenement and shall execute a hire purchase tenancy agreement

if required by the Board and shall comply with the terms and

conditions of such agreement.

11. General liability of allottees.--(1) Every allottee shall

regularly pay to the Board the instalments due from him in

respect of the purchase price of the tenement allotted to him. He

shall also pay municipal taxes, water and electricity charges,

ground rent, his share of common services (e.g., common

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lights, sweeper, watchman and the like) and other public

charges, due in respect of the land and the building occupied by

him to the authorities to whom such taxes and charges are due.

(3) The hirer shall make full and regular payment of all the dues

that are required to be made by him in pursuance of these

presents or the Regulation. If any such payment is delayed, he

shall be liable to pay a penalty at the rate of one per cent per

month. In case of defaults of more than two months, the

tenancy shall stand determined and the hirer shall be liable to be

evicted. All the outstanding dues of the owner shall be

recoverable as arrears of land revenue. The proceedings of

eviction shall be governed by the provisions of Chapter VI of

the Act.

Provided further that in the case of eviction, the amount already

deposited by the hirer shall be utilised for recovering all dues

whatsoever of the owner as the first charge and all the dues of

the public bodies as the second charge and only the remainder

shall be refunded to the hirer on his demand.

(4) On payment of the first instalment and such other dues as

shall have been demanded by the Board, the hirer shall execute

a hire-purchase agreement in the form "A".

10. A conjoint reading of the allotment letter and clause 2 (w) of the Hire

Purchase Tenancy Agreement, which every allottee is required to execute

makes it clear that the price of the tenement specified in the allotment letter is

tentative and the Board can revise the price after receiving final bills

representing the cost of construction or if as a result of an order of the Court or

an award made by the Arbitrator it is required to pay higher cost for the land

used for construction of the tenements. In either case, the allottee is bound to

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pay the additional amount which would represent the final price of the

tenement. If the cost of land is enhanced for any other similar reason then too

the Board can revise the price and ask the allottees to pay additional price. In a

given case, the Board may revise the tentative price more than once and the

allottees are bound to share the burden of additional cost. However, in these

cases, the Board's power to revise the price of the tenements is hedged with the

limitation of 7 years contained in clause 2(w) of the Hire Purchase Tenancy

Agreement. That clause contained an express bar against the change in price

after 7 years of the allotment of tenement. To put it differently, in view of the

bar contained in clause 2(w) of the Hire Purchase Tenancy Agreement, the

Board could not revise the price after 7 years of the allotment of tenement,

irrespective of the justification for such revision. The Board's understanding of

the prohibition contained in clause 2 (w) of the Hire Purchase Tenancy

Agreement is evinced from Resolution dated 10.5.1989 wherein it was clearly

mentioned that enhanced cost is not to be recovered from the allottees after 7

years from the date of allotment. This is also the reason why the Board

accorded ex post facto sanction for payment of Rs.53,98,091/- to Improvement

Trust, Sonepat.

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11. While preparing the format of Hire Purchase Tenancy Agreement, the

Board must have taken into consideration various factors which could lead to an

increase in the cost of tenements and consciously incorporated a prohibition

against change in the price after 7 years from the date of allotment of

tenements. The rationale of this embargo was that once the allottee pays the

total price, he may not be subjected to the burden of additional cost after a

number of years. Surely, adjudication of the landowners' claim for higher

compensation is not within the domain of the Board or the allottees but once the

Board has, after due deliberations, incorporated a prohibition against change in

the price after a period of 7 years from the allotment of tenements, there is no

reason why it should not be asked to honour the commitment made to the

allottees that they will not live under the fear of being asked to pay additional

price after an indefinite period. Unfortunately, the learned Single Judge and the

Division Bench of the High Court did not give due weightage to the prohibition

contained in Clause 2(w) of the Hire Purchase Tenancy Agreement and

negatived the appellants' challenge to the demand of additional price by

assuming that the Board is vested with the power to revise the price at any time.

The use of the expression `or enhancement in cost of land on any account' after

the expression `the receipt of the final bill for the construction of tenements or

as the result of land award or arbitration proceeding' shows that while framing

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the regulations, the Board had kept in view all the eventualities which could

lead to an increase in the cost of land made available for construction of the

tenements and yet it thought proper to put an embargo against the revision of

price after 7 years. Therefore, the learned Single Judge and the Division Bench

of the High Court were not right in deciding the writ petitions and the writ

appeals on the premise that once the cost of land gets increased on account of

payment of higher compensation to the landowners the Board is entitled to

demand additional price from the allottees.

12. In the result, the appeals are allowed. The impugned order as also the

one passed by the learned Single Judge are set aside and the demand notices

issued by Estate Manager, Sonepat requiring the appellants to pay the additional

price are quashed. The parties are left to bear their own costs.

............................................................J.

[G.S. SINGHVI]

NEW DELHI; ............................................................J.

DECEMBER 12, 2011. [SUDHANSU JYOTI MUKHOPADHAYA]