Madhya Pradesh Housing And Infrastructure Development Board & Ors. vs B. S. S. Parihar & Ors.

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1801 OF 2015

MADHYA PRADESH HOUSING AND INFRASTRUCTURE DEVLOPMENT BOARD …APPELLANT

Vs. B.S.S. PARIHAR & ORS. …RESPONDENTS AND CIVIL APPEAL NOS.1802-1803 OF 2015

MADHYA PRADESH HOUSING AND INFRASTRUCTURE DEVLOPMENT BOARD …APPELLANT

Vs. DR. SUDHA JAIN & ORS. ETC. …RESPONDENTS

J U D G M E N T

V. GOPALA GOWDA, J.

Civil Appeal No. 1801 of 2015 by special leave

has been filed against the impugned judgment and Signature Not Verified

order dated 31.7.2014 passed in Writ Appeal No. 1565 Digitally signed by Shashi Sareen Date: 2015.10.26 08:17:03 IST Reason: 2

of 2013 by the High Court of Judicature at Madhya

Pradesh at Jabalpur, whereas C.A. Nos. 1802-1803 of

2015 by special leave have been filed against the

impugned judgment and order dated 31.7.2014 passed in

Writ Appeal Nos. 1550 of 2013 and 1563 of 2013 by the

same High Court. In both the matters, the dispute

relates to the fixation of the price of the under

construction 36 Duplex/Triplex HIG Houses, situated

in “Riviera Towne”, Bhopal, by the appellant-Madhya

Pradesh Housing and Infrastructure Development Board

(for short “the appellant-Board”) and the method

adopted by them for fixing the price of the

properties in dispute and linking the cost price of

the land with the Collector’s guidelines on the date

of completion of the project in the case of Self

Financing Scheme. The High Court dismissed the writ

appeals filed by the appellant-Board and quashed the

enhanced/final demand for price fixation of land by

the appellant-Board.

2. The brief facts of the case are stated hereunder

to appreciate the rival legal contentions urged on

behalf of the parties:

An advertisement was published on 9.11.2007 in 3

the local daily newspaper ‘Dainik Bhaskar’ regarding

the Housing Scheme which was floated by the

appellant-Board for the allotment of 36 residential

houses for the employees of the State Government and

the State Public Sector Undertaking under the name of

“Riviera Towne” in Bhopal with the following terms

and conditions :-

1. Application forms for residential houses in Riviera Towne, Bhopal can be purchased at a cost of Rs.250/- from the Punjab National Bank, R.S.S. Market Panch Bus Stop, Bhopal on all working days between 21.11.2007 and 7.12.2007 and Registration Amount/Banker’s Cheque/Demand Drafts can be deposited in the above bank on all working days till 7.12.2007.

2. In case the number of applications are more than the number of premises advertised for sale, the registration will be done through a system of lottery which will be held at 4.00 pm on 14.12.2007 in the office of Estate Officer.

3. Preference in registration will be given to those who pay the total estimated amount in one lump sum.

4. Apart from the sale price, other charges and maintenance fee shall be payable as per the Board rules.

5. Once registration is sanctioned under Self Financing Scheme, the applicants have to pay the balance amount in instalments as per the intimation given by the Board.

6. Costs of the houses shown in this advertisement are totally provisional and the final fixation of the price 4

will be done after completion of the Scheme. Allottees have to pay the difference of tentative cost and final sale price in fixation of final cost on intimation within the time stipulated.

7. Other taxes and lease rent shall be payable as per rules.

8. Applications for registration are invited from the officers and employees of various departments of the Madhya Pradesh Government and undertakings Institutions. Reservation of houses will be in accordance with the rules.

9. Even after publication of two advertisements for registration of the house, if some houses still remain available, then application will be invited from General Category as per rules.

10. Other terms and conditions apply.

Type No. Approx. Approx. Estimated Regn.

of carpet plot area Cost (in Amount House area in in Sq. lakhs) (in Sq. mtrs. mtrs. lakhs)

Nice 18 184.57 150 40.00 4 Duplex sq.mtrs.

Nice 14 228.25 150 45.00 4.50 Triplex sq.mtrs.

Nice 4 223.51 223 53.00 5.50 Duplex sq.mtrs. Corner

XXX XXX

3. The appellant-Board held the draw of lots for the

allotment of the said houses in dispute and the 5

successful applicants were notified by the

appellant-Board vide communication letter dated

20.12.2007 about the allotment of the said houses in

their favour. The appellant-Board also took the

administrative approval on 3.1.2008 for the

construction of 36 houses of the disputed properties.

The appellant-Board also constituted a Price Fixation

Committee in its 199th meeting for the fixation of the

rational price for the said houses. They also issued

two Circulars dated 30.9.2008 and 24.10.2008 relating

to the fixation of cost of the said properties in

dispute.

4. The Price Fixation Committee worked out the

prices of the said 36 residential houses as mentioned

below :-

Total Flats-18 Total Flats-14 Total Flats-4 Plot area -150 sq. Plot area-150 sq. Plot area-223 mts. mts. sq. mts.

Built up area- Built up area Built up area 184.57 sq.mts. -228.25 sq. mts. -223.51 sq. mts.

Cost - Cost-Rs.55,91,000/ Cost-Rs.66,17,00 Rs.49,53,000/- - 0/-

Upon getting the tentative cost of construction

of the houses and on the basis of the revised

calculations and price determination of the said 6

properties in dispute and after the receipt of

tender, the demand letters were issued on 18.6.2009

to the respondent-allottees requesting them to submit

their consent or dissent to the enhanced estimated

cost in writing within 15 days from the date of the

issuance of the letter.

5. The construction of the houses started from

30.6.2009 and almost 90% of the allottees gave their

consent to the revised cost of the properties in

dispute as determined by the appellant-Board on the

report of the Price Fixation Committee.

6. The appellant-Board, vide letter dated 7.7.2009,

sought for consent from the remaining

allottees-respondents, who had not given their

consent with regard to the revised fixation of prices

on the said disputed properties, stating thereby that

if they fail to do so, they will not be allotted the

houses and the registration amount that they had

earlier given towards the allotment of the houses

will be refunded to them with interest as per the

rules of the Madhya Pradesh Co-operative Societies

Act, 1960 (hereinafter called as “the Societies Act”)

and Madhya Pradesh Co-operative Societies Rules, 7

1962(hereinafter called as “the Rules”).

7. On 7.10.2009, the appellant-Board had informed

that all the allotments that were made to the

respondents subsequent to the issuance of the

circulars dated 30.9.2008 and 24.10.2008, will be

final and they will be bound by the said circulars.

The draw of lots was conducted on 22.12.2009 for the

allocation of house numbers to the eligible

applicants. In the meeting held on 2.12.2011, it was

decided by the appellant-Board that all the

allotments made to the respective applicants will be

governed by the notifications/circulars regarding the

cost of fixation of the properties in dispute and

also according to the appellant-Board.

8. The Price Fixation Committee in its meeting held

on 9.12.2011 and in its report dated 15.12.2011,

fixed the cost with regard to the houses to be

allotted under the said “Riviera Towne” Scheme. In

the report, the commencement of the Scheme is to be

considered to be from the date of the Work Order and

not from the date of the advertisement. Thereafter,

taking into consideration the final cost determined

by the Price Fixation Committee, the final demand 8

letters were issued to the successful allottees on

24.12.2011.

9. Being aggrieved by the action of the

appellant-Board, the respondents filed Writ Petition

No.15983 of 2012 before the learned single Judge of

the High Court of Madhya Pradesh, challenging the

decision of the Price Fixation Committee, whereby the

appellant-Board has directed the respondents to

deposit the price for the said houses allotted to

them at a highly enhanced rate which is 300% more

than the original price of the said properties in

dispute. The grievance of the respondents was that

they had applied for the said Scheme and had been

allotted houses in the year 2007 at the price

prevalent at the relevant period of time, subject to

reasonable escalation. But at the time of the

delivery of possession of the said properties in

dispute the appellant-Board has demanded the price of

Rs.30,000/- instead of Rs.9,000/- per sq. mtr. which

is highly unjustified on its part. The respondents

have further contended that the appellant-Board has

wrongly taken into consideration the subsequent

guidelines and notifications issued by the Collector, 9

notifying the price of the land for registration and

the stamp duty which is contrary to the law laid down

by this Court in a catena of cases.

10. The learned single Judge disposed of the said

writ petition on 24.9.2012, and directed the

appellant-Board to consider the representation of the

respondents and the legal opinion obtained by them

and decide the matter in accordance with the

decisions of this Court in a catena of cases, after

giving the respondent-allottees due opportunity of

being heard.

11. Though various representations were filed before

the appellant-Board by the allottees with regard to

the fixation of the cost of the properties in

dispute, the Commissioner of the appellant-Board by

order dated 8.3.2013, after considering the

representations of the respondent-allottees and by

referring to the various circulars regarding the cost

fixation, rejected the representations of the

allottees.

12. The said action of the Commissioner of the

appellant-Board led the respondents to file Writ 10

Petition No.5690 of 2013 and connected writ petitions

before the learned single Judge of the High Court.

During this period 3 applicants did not make the

initial payment of Rs.4 lakhs i.e. 10% of the

advertised tentative cost which resulted in the

cancellation of their registration to the said

properties and their duplex houses were put to

auction.

13. The learned single Judge of the High Court

disposed of the Writ Petition No.5690 of 2013 along

with the other connected writ petitions vide its

common order dated 21.11.2013. The learned single

Judge allowed the writ petitions of the respondents

and directed the appellant-Board to fix the price of

the land as it existed on the date of issuance of the

allotment letter and consequently quashed the land

price determined by the appellant-Board which was

based on the guidelines of the Collector.

14. Being aggrieved by the order dated 21.11.2013,

the appellant-Board filed Writ Appeals before the

Division Bench of the High Court which were dismissed

vide its common order dated 31.7.2014. The Division

Bench upheld the findings of the learned single 11

Judge, thereby quashing the enhanced/final demand

raised by the appellant-Board. Hence, these appeals

have been filed by the appellant-Board, urging

various legal grounds and contentions and prayed to

set aside the impugned order passed by the High

Court.

15. Mr. Sunil Gupta, the learned senior counsel

appearing on behalf of the appellant-Board has relied

upon the judgment of this Court in the case of Delhi

Development Authority v. Pushpendra Kumar Jain1, in

support of his case, wherein this Court has held that

the allottee was bound to make the deposit at the

enhanced rate as per the demand raised by the D.D.A.

if he wanted to secure the flat. It was further held

that an allottee gets an indefeasible right to

allotment only on the date of communication of

allotment and not on the date of draw of lots which

is only a process to identify or select the persons

for allotment and not the allotment itself. It was

further held that when the cost was enhanced prior to

the allotment letter, demand of the enhanced rate was

justified. The learned senior counsel has contended

1 (1994) Supp (3) SCC 494 12

that the impugned order of the High Court was not

right as the same is contrary to the case of Delhi

Development Authority (supra), which is squarely

applicable to the fact situation of the instant case

and the High Court has failed on its part by ignoring

the same and passing the order against the

appellant-Board.

16. It has been further contended by the learned

senior counsel that the High Court has gravely erred

in determining the price of the properties in dispute

at a rate prevalent during the period 2007-2008 or

2008-2009, as the appellant-Board has sold and

executed the sale deeds of 1718 flats and 302 plots

as per the guidelines of the Collector issued from

time to time which would become applicable to the

allottees as well.

17. The learned senior counsel has further contended

that the fixation of the cost of the properties in

dispute has been done in accordance with the Scheme,

the rules and the policy of the appellant-Board and

the so-called allotment made in favour of the

allottees is not an allotment but only a registration

granted to them which the High Court has misconstrued 13

as allotment of the said land.

18. On the contrary, the learned senior counsel

appearing on behalf of the respondents has sought to

justify the impugned judgment and order contending

that the judgment of the High Court is perfect and

justified. He has contended that on the issue of

fixing the price of the land, the High Court has

rightly held that the price or cost of the said land

should be in accordance with the price or the cost of

land which existed on the date of allotment.

19. He has further contended that the High Court has

rightly held that the date of allotment is the date

on which the offer of the respondents was accepted

and their applications were registered and the

allotments to the land were made accordingly, which

is clear from a bare perusal of the letters

indicating the acceptance of registration in

allotment.

20. The learned senior counsel has further contended

that the main dispute is with regard to the

difference of the amount of the cost of the land that

is being demanded by the appellant-Board as per the

Collector’s guidelines prevailing in the year 2011-12 14

and the actual cost that existed on the date of

allotment of the said land. The applicants have

already paid the entire cost as per the demand of the

appellant-Board and have in fact paid 10% extra

towards the cost of the said property and despite the

same, the property has not been handed over to them

which is a grave miscarriage of justice and the

respondents have been suffering for a long time.

21. We have heard both the parties. On the basis of

the aforesaid rival legal contentions urged on behalf

of the parties and on perusal of the findings

recorded by the High Court in its impugned judgment

and order, we have to answer the points of dispute on

the basis of the evidence produced on record. We

record our reasons hereunder:-

The contentions urged on behalf of the

respondents that once the appellant-Board has made

the allotment of the said plot of land, it is

debarred from raising the cost of construction or

claiming enhanced prices for the said land, is wholly

untenable in law in view of the clauses contained in

the advertisement published in the newspaper Dainik

Bhaskar dated 09.11.2007, which read that the cost of 15

the houses shown in this advertisement are totally

provisional and the final fixation of the price will

be done after the completion of the Scheme.

Therefore, the allottees will have to pay the

difference between the tentative cost and the final

sale price of the land which is based on the fixation

of the final cost of the land, within the stipulated

time.

Therefore, in view of the aforesaid clause, the

allotment of the said plot of land in favour of the

respondent-allottees is only provisional in nature

and the same would be subject to the final fixation

of the price of the land that will be done after the

completion of the Scheme as the said clause is

binding upon the respondent- allottees.

22. Further, the said clause is also traceable to

Section 50 of the Madhya Pradesh Griha Nirman Mandal

Adhiniyam, 1972 (in short ‘the Act, 1972’), wherein

the appellant-Board is empowered to retain, lease,

sell, exchange or otherwise dispose of any land,

building or other property vesting with it, situated

in the area comprised in any housing Scheme or in any

adjoining area. The Madhya Pradesh Housing Board 16

Accounts Rules, 1991, ( in short “the Rules, 1991”)

were framed in this regard, the relevant provisions

of which are necessary to be extracted hereunder:

“5.4.SALE PRICE Sale price of sites and buildings shall be separately determined in accordance with the guidelines issued by the Board. But where yield a sale price for any reason different from cost price determined under Rule 5.3.2 and 5.3.3 (e.g. due to adoption of different rates of overheads for different income groups, charging premium from higher income groups for appreciation in land value, grant of concessions to Board’s employees adoption of average expenditure on project instead of year wise expenditure for calculating overheads on interest, adoption of uniform rate of interest of the entire construction period instead of varying rates of interest for separate years), sales may be brought to account in the revenue section of project accounts without prejudice to the operation of Rules 5.3.2 and 5.3.3 (These rules deal with account adjustment in the expenditure section of project account upto the state of recording under the account head “cost of Sales”). Accordingly account adjustment regarding capitalization of overheads, transfer of assets from Divisions to Estate Management and incorporation of costs in the account “Cost of Sales” in the ledgers of Estate Management shall be carried out immediately on completion of project and not held up till sale price approved by the Competent Authority.

5.7 LAND 5.7.1 Land acquired shall be brought to account on accrual basis, land made over to the Board free of cost shall be brought to account at nominal price.

XXX XXX XXX 17

5.7.4 For the purpose of assessing the cost of a project, i.e., debiting “Cost of Sales” as well for the purpose of valuation of closing stock in Final Accounts, appreciation in land value shall be ignored. The Board may, however, take it into account for the purpose of determination of sale price.”

23. The final sale price which is fixed and

intimated to the allottees is in accordance with the

provisions of the Act 1972, the Rules, 1991 and the

clause of the advertisement which is binding on the

respondent allottees. Therefore, the High Court has

committed an error in law by quashing the demand

notice of the appellant-Board for the payment of the

final sale price and allowing the writ petitions of

the respondent-allottees without considering the

terms and conditions of the advertisement and the

statutory provisions of the Act and the Rules towards

the fixation of the cost of the land. On this

ground, the impugned judgments of both the learned

single Judge and the Division Bench of the High Court

are liable to be quashed and set aside.

24. The learned senior counsel on behalf of the

appellant-Board has rightly pointed out the

concurrent findings recorded in the impugned judgment

of the Division Bench, which has referred to the 18

judgment of the learned Single Judge, wherein he has

held that once the allotment of the said plot of land

is made, the appellant-Board is denuded of its power

to seek enhanced cost of land based on the

Collector’s guidelines, as erroneous in law. He has

also relied on the principles that have been laid

down in various cases of this Court including the

cases of Tamil Nadu Housing Board v. Service Society

& Anr2 and Delhi Development Authority (supra). He

has rightly pointed out that the said conclusions of

both the learned single Judge and the Division Bench

of the High Court are erroneous in law and the same

is a perverse finding of fact for the reason that

they have misconstrued the registration of the

applications and the allotments made with respect to

the land in dispute which is in accordance with the

clause published in the advertisement. Reliance has

been placed in the case of Delhi Development

Authority (supra) which reads thus:

“8……..No provision of law also could be brought to our notice in support of the proposition that mere draw of lots vests an indefeasible right in the allottee for allotment at the price obtaining on the date of draw of lots. In our opinion, since the 2 (2011) 11 SCC 13 19

right to flat arises only on the communication of the letter of allotment, the price or rates prevailing on the date of such communication is applicable unless otherwise provided in the Scheme. If in case the respondent is not willing to take or accept the allotment at such rate, it is always open to him to decline the allotment. We see no unfairness in the above procedure.”

25. The conditions stipulated in the advertisement

inviting applications from the applicants and the

provision provided under Section 50 Rule (5)(iv) of

the Act of 1972 and Rules 5.7.1 and 5.7.4 of the

Rules, 1991 would make it clear that the law laid

down in the Delhi Development Authority (supra) case

is aptly applicable to the fact situation of the

instant case. The same has not been considered by

the High Court while passing its impugned order. On

this ground also, the impugned judgment is liable to

be set aside.

26. The learned senior counsel on behalf of the

appellant-Board has rightly pointed out that the

determination of the sale price of the flats

allotted in favour of the respondent-allottees is

based on the cost price fixed as per the guidelines

provided by the Collector from time to time for the

relevant year for the final allotment. He has 20

further pointed out that the total number of

allottees who have applied to the advertisement

through the procedure of drawing the lottery for the

allotment of flats in their favour are 2531. The

allottees who have accepted the final cost are 1472.

The allottees who have not accepted the final cost

and filed a petition against the same are 84. There

are 975 applicants who have vacant houses and are

awaiting the decision of the courts in other cases

but they have neither accepted nor refused the final

cost fixation. Apart from the said factual position,

about 700 HIG & MIG and 1500 LIG and EWS housing

units would be further affected by the impugned

judgment of the High Court. The legal issue that is

present for our determination is, whether the demand

of the final sale price which has been fixed by the

appellant-Board in terms of the conditions

stipulated in the advertisement with regard to the

land in dispute for the year 2010-2011 which has

been done on the basis of the “Market Price Guiding

Principles, District, Bhopal” by the Collector under

Section 47(a) of the Indian Stamp Act, 1899 (Act NO.

2 of 1899), read with Section 75 of the Madhya 21

Pradesh Preparation and Revision of Market Value

Guidelines Rules, 2000 (hereinafter called as “the

Rules, 2000”), framed by the State Government for

the determination of the market price of immoveable

property and the tier review under Rule 4(b) of

Rules, 2000, the proposal of rates of market price

for the year 2011-2012, submitted by the

sub-District Valuation Committee before the District

Valuation Committee is legal and valid?

27. The provisos issued by the Central Valuation

Board vide letter No. 713/Ga.La./2011 Bhopal dated

29.03.2011 for the implementation of the rates of

plots of land, buildings and agricultural land in

Rule 3(2) of the Rules, 2000 and the after approval

of the rate of the market price proposed by District

Valuation Committee Guiding Principles (Guidelines)

for the year 2011-2012 for reckoning the market

price of the immovable property (plots of land,

building and agricultural land) situated in District

Bhopal under Rule 4(2)(c) of the Rules, 2000, are

forwarded by the Sub-Registrar of the Districts for

the purpose of issuing directions under Section

47-A, sub-Section (1) of the Indian Stamp Act, 1899. 22

The said valuation fixed by the District Valuation

Committee under the Chairmanship of the District

Collector of Bhopal is not under challenge by either

the allottees or any other person. Therefore, the

guiding principles for the determination of the

final sale price of the plots in favour of the

allottees cannot be termed as either erroneous or

error in law. Further, the learned senior counsel

for the appellant-Board has placed reliance upon the

judgment of this Court in the cases of BSEB v.

Suresh Pd. Sinha3 and State Of U.P. v. Synthetics &

Chemicals Ltd.4 in support of the proposition of law

upon the principal of binding precedents, wherein

this Court has held that any declaration or

conclusion arrived at without application of mind or

preceded without any reason cannot be deemed to be

declaration of law or authority of a general nature

and the same cannot been deemed as a precedent.

The learned senior counsel on behalf of the

appellant-Board has further rightly placed reliance

upon the judgment of this Court in the case of Tamil

Nadu Housing Board (supra) in support of his legal

3 (2009) 8 SCC 483 4 (1991) 4 SCC 139 23

submission wherein, this Court has held thus:

“18. There is no term or provision in the contract that if the Board does not determine the final price within three years from the date of allotment, the Board would lose the right to determine the final price thereafter or that the tentative price would become the final price. If on account of delay in determination of compensation for land acquisition or delay on the part of the contractors in completing the development works or construction, or if there are any encroachments or if there are pending claims of contractors regarding development or construction, the Board would not be able to determine the final cost within three years. But that did not mean that the tentative cost would become the final cost in the absence of such a provision in the letter of allotment or lease-cum-sale agreement.

20. Clause 17 states that except the fixation of price with reference to the compensation finally awarded by the courts, the Board should fix the price of the LIG house after taking into consideration the development charges, cost of amenities and cost of buildings within three years from the date of allotment. If the final price is so fixed, thereafter what could be increased is only the land cost component on account of any increase in compensation that may be awarded by the courts. If the Board had earlier fixed the final price, the Society’s contention might have merited acceptance as the component of price with reference to cost of development and amenities and cost of building would have attained finality on account of such final determination and only the increase on account of award of compensation for land could be demanded after such determination of final price. But where the final price 24

has not been determined at all, for whatsoever reason, and the final cost was being determined for the first time, the allottee cannot contend that only the increase on account of the land, and not the increase on account of development cost and construction cost, could be demanded. Where the final price has not been fixed, the Board could, after ascertainment of various costs, determine the final price even after three years, and the finality in regard to cost of development and amenities and the cost of construction, referred under Clause 17, would not apply.

30. Whenever allotments are made even before the completion of the development of land and construction, necessarily the cost that is shown by the authority or the Board will be tentative. In regard to the land cost, there may be claims for enhancement of compensation before the Reference Court with appeals to the High Court and this Court. Sometimes the entire process may take 10 to 15 years and till that process is concluded the final cost of the land cannot be determined. An allottee cannot therefore say that the authority cannot increase the cost after 12 years.

32. Therefore, an allottee cannot contend that the increase, if any, should be determined within three years and if the increase is not so determined, the tentative cost would itself become the final cost. Such an interpretation of Clause 17 would be illogical and unreasonable. If the Board is able to show that there was sufficient cause for the delay in deciding the final price and that it was beyond its control to determine the final cost earlier (or within three years) it will be entitled to final cost even if the claim is delayed by a few years. The allottee cannot refuse to pay it merely on 25

the ground of delay.

37. We find that the allottees/Society do not dispute that the cost of the land increased considerably on account of enhancement of compensation. The Board showed that the total cost of land inclusive of interest up to 31-3-1987 was Rs. 35,02,727 for 8 acres and 16,422 sq ft. The said figure was broadly accepted by the Society, in its calculation sheet. The Society arrived at the cost of a plot measuring 1040 sq ft as Rs. 3500 (paid as deposits) plus Rs. 8634 which aggregates to Rs. 12,134. But as noticed above, this is the proportionate cost worked out for 1040 sq ft out of the total cost of an extent of 33,64,902 sq ft (8 acres and 16,422 sq ft). It is not possible for the allottee to contend that he will pay only the proportionate actual cost of his plot. If the cost of the plot has to be worked out, the cost relating to proportionate share in the common/service areas (roads, parks, playgrounds, etc.) should be added. That means at least addition of another 40% to the price worked out for the actual extent of the plot. With reference to the cost worked out by the Society, if 40% is added, the increased cost of plot would be around Rs. 16,987.60. According to the Society the original tentative cost for the plot was Rs. 3000. Therefore the increase in cost would be around Rs.

14,000. What is demanded as additional amount is Rs. 16,770. The difference is hardly Rs. 2770 which may be attributable to the increase in the cost of development/construction. It cannot therefore be said that the amount claimed under the demand notice dated 21-5-1988 is excessive or unreasonable. Neither party has given the full data or facts or accounts. The allotment was made 35 years back. No purpose would be served by remitting the matter for re-examination. 26

In the facts and circumstances, we are satisfied that the demand is not open to challenge.”

In view of the aforesaid decisions of this

Court, both the learned single Judge and the

Division Bench of the High Court have misconstrued

the terms and conditions stipulated in the

advertisement and have erroneously applied the same

to the fact situation of the present case and came

to the erroneous conclusion by placing reliance upon

the judgment of this Court in the case of M.P.

Housing Board v. Anil Kumar Khiwani5, wherein this

Court by referring to the observations made by the

Division Bench in its judgment at paras

6,7,8,9,10,11,12, 16 and 17 held that the Board was

not entitled to raise the price of 71 lakhs

particularly, when it was guilty of delaying the

project. The strong reliance placed upon the

aforesaid judgment by both the learned single Judge

and the Division Bench of the High Court in holding

that the appellant-Board is not empowered to

determine the final cost of the properties in

dispute is wholly erroneous in law as the said 5 (2005) 10 SCC 796 27

judgment does not deal with the role and the power

of the appellant-Board to determine the final price

of the allotted plot which power is in conformity

with the provisions of Section 50 of the Act of 1972

and the relevant rules referred to supra and the

terms and conditions of the advertisement.

Therefore, the said judgment does not have the

binding precedent for the proposition of law that

the appellant-Board does not have the power to

re-determine the final price of the allotted

properties after the applications of the allottees

were registered. In this regard, the learned senior

counsel for the appellant-Board has rightly placed

reliance upon the judgment of this Court in the case

of State of U.P. v. Synthetics and Chemicals Ltd.

(supra), the relevant paras of which read thus:

“41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. “A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind.”. In 28 Lancaster Motor Company (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as it was rendered ‘without any argument, without reference to the crucial words of the rule and without any citation of the authority’. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur. The bench held that, ‘precedents sub-silentio and without argument are of no moment’. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry it was observed, ‘it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein’. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law.

42. Effort was made to support the conclusion, indirectly, by urging that the State having raised same objections by way of review petition and the same having been rejected it amounted impliedly as providing reason for conclusion. Law declared is not that can be culled out but that which is stated as law to be accepted and applied. A conclusion without reference to relevant provision of law is weaker than even casual observation. In the order of Brother Thommen, the extracts from the judgment of the 29

Constitution Bench quoted in extenso demonstrate that the question of validity of levy of sales and purchase tax was neither in issue nor was it raised nor is there any discussion in the judgment except of course the stray argument advanced by the learned Attorney General to the following effect:

“But alcohol not fit for human consumption are not luxuries and as such the State legislatures, according to Attorney General, will have no power to levy tax on such alcohol.” Sales tax or purchase tax under Entry 54 is levied on sale or purchase of goods. It does not contemplate any distinction between luxury and necessity. Luxuries are separately taxable under Entry 62. But that has nothing to do with Entry 54. What prompted this submission is not clear. Neither there was any occasion nor there is any constitutional inhibition or statutory restriction under the legislative entry nor does the taxing statute make any distinction between luxuries and necessities for levying tax. In any case the bench did not examine it nor did it base its conclusions on it. In absence of any discussion or any argument the order was founded on a mistake of fact and, therefore, it could not be held to be law declared. The bench further was not apprised of earlier Constitution Bench decisions in Hoechst Chemicals v. State of Bihar and Ganga Sugar Mill v. State of U.P. which specifically dealt with the legislative competence of levying sales tax in respect of any industry which had been declared to be of public importance. Therefore, the conclusion of law by the Constitution Bench that no sales or purchase tax could be levied on industrial alcohol with utmost respect fell in both the exceptions, namely, rule of sub-silentio and being in per incuriam, to the binding authority of the precedents.” 30

Further reliance has been placed upon the

decision of this Court in the case of Bihar

School Examination Board v. Suresh Prasad Sinha,

(supra), the relevant paras of which read thus:

“18. The courts should guard against the danger of mechanical application of an observation without ascertaining the context in which it was made. In CIT v. Sun Engg. Works (P) Ltd.

“39. … It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete ‘law’ declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings.”

19. It is also necessary to keep in mind the following principles laid down in Govt. of Karnataka v. Gowramma with reference to precedential value of decisions:

“10. ‘12. … Reliance on the decision without looking into the factual background of the case before it, is 31

clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving [a] judgment that constitutes a precedent. The only thing in a Judge’s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates: (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. (See State of Orissa v. Sudhansu Sekhar Misra and Union of India v. Dhanwanti Devi.) A case is a precedent and binding for what it explicitly decides and no more. The words used by Judges in their judgments are not to be read as if they are words in an Act of Parliament. In Quinn v. Leathem the Earl of Halsbury, L.C. observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to be the exposition of the whole law but governed and qualified by the particular 32

facts of the case in which such expressions are found and a case is only an authority for what it actually decides.’

11. ‘15. … Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclid’s theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.

* * *

18. The following words of Lord Denning in the matter of applying precedents have become locus classicus:

“Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.

* * * Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the 33

side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.”

20. In Sarva Shramik Sanghatana (KV) v. State of Maharashtra this Court cited the following passage from Quinn v. Leathem with approval:

“… Now, before discussing Allen v. Flood and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but [are] governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all.”

28. Applying the guideline rates in relation to

the valuation of the land in accordance with Circular

No. 21 of 2008 dated 24.10.2008, for the

determination of the cost of the L.I.G./E.W.S.

buildings, the Board has passed the following

resolution:-

34 “Following decision has been taken by the competent authority in connection with the buildings of all the categories of E.W.S./L.I.G. in all the districts of Madhya Pradesh whose registration has been carried out before 19th of December, 2011 and whose final determination of the value is effected the Circular No.21/2008 dated 24.10.2008:-

(i) From the date of coming into force of the Circular of the Board vide No. 21/08 dated 24.10.2008 and in between the period of coming into force of the Circular No.15/11 dated 19.12.2011 the cost of the land in the final valuation of the buildings of E.W.S/L.I.G. duly advertised, the value taken in the initial determination of the value, be determined.

(ii) In the final determination of the value of the aforesaid

E.W.S./L.I.G. buildings, following shall be the criteria/ingredients:-

(a) The cost of the land which was determined at the time of the registration.

(b) Actual development expenditure incurred on the plot since after the registration.

(c) Total construction cost.

(d) Supervision fees (At the rate prevalent at the time of the registration).

(e) Penal interest against the remaining instalments as per the rules of the Board (at the rate prevalent from time to time).

(f) Other charges as per the rules of the Board……”

The said guidelines have been laid down by the 35

Development Board during the pendency of this

proceeding. The submission made by the learned senior

counsel on behalf of the allottees is that the said

benefit may be extended to these allottees involved

in these proceedings. The rates with regard to the

cost of flats as on the date of the publication of

the advertisement in November, 2007, the cost of the

flats fixed in the year June, 2009 and the total

final demand for the cost of the flats in December,

2011 are furnished in the table which are extracted

herein below for our perusal:-

Type of Advt. Cost Cost as Total Final House (In Lakhs) told in Demand in In November, June, Dece., 2011 2007 2009 (In (In Lakhs) Lakhs)

Nice 40.00 49.53 81.73 Duplex Nice 45.00 55.91 88.97 Triplex Nice Duplex 53.00 66.17 120.44 Corner

29. Dr. Rajeev Dhawan, the learned senior counsel

for the respondent-allottees in C.A. Nos. 1802-1803

of 2015, has placed strong reliance upon Article 14

of the Constitution of India and upon the judgment of

this Court in the case of Coimbatore District 36

Central Coop. Bank v. Employees Association6, in

support of the proposition of law that the

appellant-Board while exercising its power to fix the

final rates of the allotted plots by invoking the

clause contained in the notification issued by it for

inviting applications, wherein it has retained its

right to determine the final price of the allotted

plot, must pass the test of the doctrine of

proportionality in determining the final price of the

plot. He has placed strong reliance in support of his

case upon the following decisions of this Court in

the cases of Coimbatore District Central Coop. Bank

(supra), Teri Oat Estates (P) Ltd. v. U.T.

Chandigarh7, Om Kumar v. Union of India8 and State of

U.P. v. Sheo Shanker Lal Srivastava9 and has

contended that the same have to be applied to the

fact situation of the present case with regard to the

legal principle of doctrine of proportionality. The

relevant paras of the above mentioned judgments are

stated hereunder:

In Coimbatore District Central Coop. Bank (supra),

6 (2007) 4 SCC 669 7 (2004) 2 SCC 130 8 (2001) 2 SCC 386 9 (2006) 3 SCC 276 37

this Court has held thus:

“17. So far as the doctrine of proportionality is concerned, there is no gainsaying that the said doctrine has not only arrived in our legal system but has come to stay. With the rapid growth of administrative law and the need and necessity to control possible abuse of discretionary powers by various administrative authorities, certain principles have been evolved by courts. If an action taken by any authority is contrary to law, improper, irrational or otherwise unreasonable, a court of law can interfere with such action by exercising power of judicial review. One of such modes of exercising power, known to law is the “doctrine of proportionality”.

18. “Proportionality” is a principle where the court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of decision-making consists in the attribution of relative importance to the factors and considerations in the case. The doctrine of proportionality thus steps in focus true nature of exercise—the elaboration of a rule of permissible priorities.

19. de Smith states that “proportionality” involves “balancing test” and “necessity test”. Whereas the former (balancing test) permits scrutiny of excessive onerous penalties or infringement of rights or interests and a manifest imbalance of relevant considerations, the latter (necessity test) requires infringement of human rights to the least restrictive alternative. [Judicial Review of Administrative Action (1995), pp. 601-05, para 13.085; see also Wade & Forsyth:

Administrative Law (2005), p. 366.]

20. In Halsbury’s Laws of England (4th Edn.), Reissue, Vol. 1(1), pp. 144-45, para 78, it is stated:

“The court will quash exercise of 38

discretionary powers in which there is no reasonable relationship between the objective which is sought to be achieved and the means used to that end, or where punishments imposed by administrative bodies or inferior courts are wholly out of proportion to the relevant misconduct. The principle of proportionality is well established in European law, and will be applied by English courts where European law is enforceable in the domestic courts. The principle of proportionality is still at a stage of development in English law; lack of proportionality is not usually treated as a separate ground for review in English law, but is regarded as one indication of manifest unreasonableness.””

In Teri Oat Estates (P) Ltd. (supra), it was held as

under:

“46. By proportionality, it is meant that the question whether while regulating exercise of fundamental rights, the appropriate or least restrictive choice of measures has been made by the legislature or the administrator so as to achieve the object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the court will see that the legislature and the administrative authority “maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve”.

49. Ever since 1952, the principle of proportionality has been applied vigorously to legislative and administrative action in India. While dealing with the validity of 39

legislation infringing fundamental freedoms enumerated in Article 19(1) of the Constitution of India, this Court had occasion to consider whether the restrictions imposed by legislation were disproportionate to the situation and were not the least restrictive of the choices. In cases where such legislation is made and the restrictions are reasonable; yet, if the statute concerned permitted administrative authorities to exercise power or discretion while imposing restrictions in individual situations, question frequently arises whether a wrong choice is made by the administrator for imposing the restriction or whether the administrator has not properly balanced the fundamental right and the need for the restriction or whether he has imposed the least of the restrictions or the reasonable quantum of restrictions etc. In such cases, the administrative action in our country has to be tested on the principle of proportionality, just as it is done in the case of main legislation. This, in fact, is being done by the courts. Administrative action in India affecting the fundamental freedom has always been tested on the anvil of the proportionality in the last 50 years even though it has not been expressly stated that the principle that is applied is the proportionality principle.

50. In Om Kumar, however, this Court evolved the principle of primary and secondary review. The doctrine of primary review was held to be applicable in relation to the statutes or statutory rules or any order which has the force of statute. The secondary review was held to be applicable inter alia in relation to the action in a case where the executive is guilty of acting patently arbitrarily. This Court in E.P. Royappa v.

State of T.N. noticed and observed that in such a case Article 14 of the Constitution of India would be attracted. In relation to other administrative actions as for example, 40

punishment in a departmental proceeding, the doctrine of proportionality was equated with Wednesbury unreasonableness.

52. In Edore v. Secy. of State for the Home Deptt. the appellant was a citizen of Nigeria who had entered the United Kingdom and remained back after her visa had expired. She had two children, born to a British citizen. The children were emotionally dependent on him and he was a stabling influence on their lives. If the appellant and her children were returned to Nigeria, their relationship with their father would end. The Court trying to resolve the conflict at hand opined:

Where the essential facts were not in doubt or dispute, the adjudicator’s task was to determine whether the decision under appeal was properly one within the decision-maker’s discretion, namely, that it was a decision which could reasonably be regarded as striking a fair balance between the competing interests in play. If it were, then the adjudicator could not characterize it as a decision “not in accordance with the law” and so, even if he personally would have preferred the balance to have been struck differently, he could not substitute his preference for the decision in fact taken. However, there would be occasions where it could properly be said that the decision reached was outside the range of permissible responses open to him, in that the balance struck was simply wrong.”

In Om Kumar v. Union of India (supra), this Court has

held thus:

“28. By “proportionality”, we mean the question whether, while regulating exercise of fundamental rights, the appropriate or 41

least-restrictive choice of measures has been made by the legislature or the administrator so as to achieve the object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the court will see that the legislature and the administrative authority “maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve”. The legislature and the adminis-trative authority are, however, given an area of discretion or a range of choices but as to whether the choice made infringes the rights excessively or not is for the court. That is what is meant by proportionality.

67. But where an administrative action is challenged as “arbitrary” under Article 14 on the basis of Royappa (as in cases where punishments in disciplinary cases are challenged), the question will be whether the administrative order is “rational” or “reasonable” and the test then is the Wednesbury test. The courts would then be confined only to a secondary role and will only have to see whether the administrator has done well in his primary role, whether he has acted illegally or has omitted relevant factors from consideration or has taken irrelevant factors into consideration or whether his view is one which no reasonable person could have taken. If his action does not satisfy these rules, it is to be treated as arbitrary. In G.B. Mahajan v. Jalgaon Municipal Council, Venkatachaliah, J. (as he then was) pointed out that “reasonableness” of the administrator under Article 14 in the context of administrative law has to be judged from the stand point of Wednesbury rules. In Tata Cellular v. Union of India (SCC at pp. 679-80), Indian Express Newspapers Bombay (P) Ltd. v. Union of India 42

(SCC at p. 691), Supreme Court Employees’ Welfare Assn. v. Union of India (SCC at p.

241) and U.P. Financial Corpn. v. Gem Cap (India) (P). Ltd. (SCC at p. 307) while judging whether the administrative action is “arbitrary” under Article 14 (i.e. otherwise then being discriminatory), this Court has confined itself to a Wednesbury review always.

68. Thus, when administrative action is attacked as discriminatory under Article 14, the principle of primary review is for the courts by applying proportionality. However, where administrative action is questioned as “arbitrary” under Article 14, the principle of secondary review based on Wednesbury principles applies.

71. Thus, from the above principles and decided cases, it must be held that where an administrative decision relating to punishment in disciplinary cases is questioned as “arbitrary” under Article 14, the court is confined to Wednesbury principles as a secondary reviewing authority. The court will not apply proportionality as a primary reviewing court because no issue of fundamental freedoms nor of discrimination under Article 14 applies in such a context. The court while reviewing punishment and if it is satisfied that Wednesbury principles are violated, it has normally to remit the matter to the administrator for a fresh decision as to the quantum of punishment. Only in rare cases where there has been long delay in the time taken by the disciplinary proceedings and in the time taken in the courts, and such extreme or rare cases can the court substitute its own view as to the quantum of punishment.”

In the case of State of U.P. v. Sheo Shanker Lal

Srivastava (supra), this Court has held thus: 43

“23. In V. Ramana v. A.P. SRTC this Court upon referring to a large number of decisions held: (SCC p. 348, para 11) “11. The common thread running through in all these decisions is that the court should not interfere with the administrator’s decision unless it was illogical or suffers from procedural impropriety or was shocking to the conscience of the court, in the sense that it was in defiance of logic or moral standards. In view of what has been stated in Wednesbury case the court would not go into the correctness of the choice made by the administrator open to him and the court should not substitute its decision for that of the administrator. The scope of judicial review is limited to the deficiency in decision-making process and not the decision.”

24. While saying so, we are not oblivious of the fact that the doctrine of unreasonableness is giving way to the doctrine of proportionality.

25. It is interesting to note that the Wednesbury principles may not now be held to be applicable in view of the development in constitutional law in this behalf. See, for example, Huang v. Secy. of State for the Home Deptt. wherein referring to R. v. Secy. of State of the Home Deptt., ex p Daly it was held that in certain cases, the adjudicator may require to conduct a judicial exercise which is not merely more intrusive than Wednesbury, but involves a full-blown merit judgment, which is yet more than ex p. Daly requires on a judicial review where the court has to decide a proportionality issue.”

30. The respondent-allottees have concurred with

the fact that the appellant-Board has the right to 44

re-determine the final cost price of the plots

allotted on the basis of the escalation of rates with

regard to both the land as well as the building

materials used for the construction of the buildings

of the allotted plots in favour of the

respondent-allottees. However, while exercising that

power their decision in determining the final price

of the property must pass the test of reasonableness

and fairness which are the cardinal principles of law

as enunciated by this Court in the catena of cases

referred to supra upon which the learned senior

counsel for the respondents has placed strong

reliance in support of his contention that the

determination of the final price of the allotted plot

which has been done on the basis of the Collector’s

guidelines, for the financial year 2011-12, was fixed

at Rs.30,000/- per sq. mtr. as per the Circular

No.1842, dated 30.9.2008 which is arbitrary,

unreasonable and unfair.

31. We have in the earlier paragraphs held that

the appellant-Board is entitled to fix the final cost

of the land and the same is legal and valid. We 45

however, agree with the learned senior counsel for

the respondent-allottees that the same has been done

arbitrarily, unreasonably, unfairly and without

applying the principle of the doctrine of

proportionality. The determination for the final

price of the plots allotted to the allottees must be

on the basis of the appellant-Board Rules read with

the relevant aspects namely, the Collector’s

Guidelines, the Act, 1972 and the Rules, 1991, for

the purpose of determination of the market value of

the land. A statutory duty is cast upon the

appellant-Board which is governed by the provisions

of the Act and Rules and the appellant-Board being

the statutory Board is amenable to Article 14 of the

Constitution of India. The determination of the final

cost of the land in dispute must be in consonance

with the doctrine of proportionality but not on the

basis of the market price, i.e. fixed by the

Committee for the determination of guidance value of

the immovable property in the District which would be

arbitrary, unreasonable and unfair.

32. As could be seen from the letter dated 46

18.6.2009, by the officers of the appellant-Board

addressed to Mr. B.S.S. Parihar and Mrs. Raina Singh

that as per the advertisement published by the

appellant-Board, the estimated cost of the House of

HIG was Rs.40 lakhs and in view of the approved

minimum bid rates, the costs of the aforesaid type of

houses were likely to increase by Rs.9.53 lakhs and

therefore, the consent or dissent of the allottees

for the enhanced estimated cost for the land was

sought for, as the same was necessary before the

allotment of land. The said value is for the final

determination of the revised estimated cost of house

which is taken into consideration by applying the

Collector’s guidelines, the same will be arbitrary

and unreasonable. Therefore, the doctrine of

proportionality must come into play for the

determination of the final price of the allotted

plot, keeping in view the relevant factors namely,

the escalation of the cost of the building materials

and the cost of land which are re-determined as the

land is acquired by the State Government in favour of

the appellant-Board and the State Government will

have to pay the enhanced compensation of the land to 47

the land owners. The relevant factor to be borne in

mind for the purpose of re-determination of the cost

of the land is that the relevant period from the date

of advertisement in the year 2007 to 2010 should be

taken into consideration.

33. The demand made by the appellant-Board from the

allottees after the cost of the land was determined

at Rs.30,000/- per sq. mtr. is near about double the

cost of the developed plots for the Duplex and

Triplex houses which were earlier fixed at

Rs.16,500/- as per the Rules of the Board. There is

no justification on the part of the appellant-Board

to fix the price of the land at Rs.30,000/- per sq.

mtr. and placing the said demand on the constructed

HIG houses, from the respondent-allottees would be

most unreasonable and unfair. Therefore, this Court

has tried to maintain the balance between the figure

Rs.16,500/- per sq. mtr. fixed in relation to the

cost of the developed plot by the appellant-Board, as

per the Board Rules and Rs.30,000/- per sq. mtr.

fixed on the basis of the Collector’s guidelines for

the financial year 2011-12. It would be just and 48

proper to take into consideration the cost of the

developed plots at Rs.16,500/- per sq. mtr. and take

the escalation at the rate of 10% for every year from

2007 to 2011 and ask the respondent-allottees to pay

simple interest on the said sum which would do

complete justice to both the parties. The same would

be in conformity with the doctrine of proportionality

and it will pass the test of reasonableness and

fairness.

34. For the aforesaid reasons, we partly accept

the submissions made on behalf of the appellant-Board

as well as the submission made on behalf of the

respondent-allottees, particularly, the submission

made by Dr. Rajeev Dhawan on the principle of

doctrine of proportionality, and applying the

constitutional principles of reasonableness and

fairness in fixing the cost of the developed plots

allotted in favour of the respondent-allottees.

Therefore, to that extent his submission is well

founded and the same must be accepted as it is in

conformity with the law enunciated by this Court in

the catena of cases upon which he has rightly placed 49

reliance. Therefore, to that extent, we have to

modify the impugned judgment of the Division Bench of

the High Court. We accordingly pass the following

order :-

I. The appeals are partly allowed and the

impugned judgment and order of the Division

Bench of the High Court is set aside.

II. We modify the demand notice served upon the

respondent-allottees and fix the cost of the

developed plots for the year 2009 at

Rs.16,500/-. The same may be revised by adding

10% to the provisional cost every year upto

the date of the demand made upon the said

amount which is payable by the

respondent-allottees. The interest at the rate

of 9% per annum may be added on such enhanced

revised value amount from the date of demand

till the date of payment in modification of

the demands to the aforesaid extent from the

respondent-allottees.

III. The orders dated 24.11.2014 granting stay in

C.A. No. 1801 of 2015 and the order dated

16.1.2015 granting stay in C.A. Nos. 1802-1803 50

of 2015 shall stand vacated. The applications

for direction in C.A. Nos. 1802-1803 of 2015

are disposed of.

……………………………………………………………………J. [V.GOPALA GOWDA]

……………………………………………………………………J. [R. BANUMATHI] New Delhi, July 21, 2015 51

ITEM No. 1A Court No. 2 SECTION (For Judgment)

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Civil Appeal No(s). 1801 of 2015

M P. HOUSING INFRASTRUCTURE DEV. BOARD Appellant(s)

VERSUS

B S S PARIHAR AND ORS. Respondent(s)

WITH CIVIL Appeal No. 1802-1803 of 2015

Date : 21.07.2015 These appeals were called on for judgment today.

For Appellant(s) Mr. Pramod Dayal, Adv.

For Respondent(s) Mr. M.L.Lahoty, Adv.

Mr. Paban K.Sharma, Adv.

Mr. Himanshu Shekhar, Adv.

Mr. Akshat Shrivastava, Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced

Judgment of the Bench comprising Hon'ble Mr. Justice

V.Gopala Gowda and Hon'ble Mrs. Justice R.Banumathi.

The appeals are partly allowed and the

impugned judgment and order of the Division Bench of

the High Court is set aside in terms of the signed

reportable judgment.

We modify the demand notice served upon the

respondent-allottees and fix the cost of the 52

developed plots for the year 2009 at Rs.16,500/-. The

same may be revised by adding 10% to the provisional

cost every year upto the date of the demand made upon

the said amount which is payable by the

respondent-allottees. The interest at the rate of 9%

per annum may be added on such enhanced revised value

amount from the date of demand till the date of

payment in modification of the demands to the

aforesaid extent from the respondent-allottees.

The orders dated 24.11.2014 granting stay in C.A.

No. 1801 of 2015 and the order dated 16.1.2015

granting stay in C.A. Nos. 1802-1803 of 2015 shall

stand vacated. The applications for direction in C.A.

Nos. 1802-1803 of 2015 are disposed.

(Shashi Sareen) (Renu Diwan) Court Master Court Master

(Signed reportable judgment is placed on the file)