DULI CHAND GUPTA Vs. CHANDIGARH HOUSING BOARD

JUDGEMENT

(1.) Duli Chand and 65 others through present petition filed by them under Arts. 226/227 of the Constitution of India seek issuance of writ in the nature of mandamus directing respondent-Chandigarh Housing Board not to enhance the price of flats/dwelling units of Category-III situated in Modern Residential Complex, Manimajra in the Union Territory, Chandigarh, which, flats or dwelling units, were offered to them on hire-purchase basis. The hike in price is styled to be arbitrary, unreasonable and unjust. The facts, from which the relief aforesaid stems, as depicted in the petition, need a necessary mention.

(2.) Respondent-Board, vide its advertisement published in the 'Daily Tribune' in, May, 1989, offered 1392 flats to be constructed in an exclusive Residential Complex at Manimajra in the Union Territory of Chandighar for general public. Out of 1392 flats, 624 flats comprised in Categories I and II were so offered under 'Self Financing Scheme' whereas 768 flats comprised in Categories III and IV were offered to the general public on the basis of 'Hire-purchase Scheme' on easy instalments. The last date for filing applications was 8/07/1989 which was later on extended to 15/07/1989. The Brochure-cum-application form included schedule of payment and other terms and conditions. While giving salient features of the Modern Housing Complex, it was, inter alia, provided and held out to the public at large that there was to be provision in the layout plan for shopping Centre, School, Dispensary, Community Centre/Club and each flat was to over-look green spaces. The other salinet features mentioned in the Brochure inviting applications for registration of applicants for the allotment of flats including Categories lI, and IV, were as follows:- (i) The Scheme:- The following four storeyed flats are offered at Manimajra (Chandigarh U.T.) as per tentative layout plan on page Nos. 6 and 7- Category Average() covered Area Location No. of units Tentative price III 1043 Sft. Manimajra U.T., Chandigarh 264 2.25 lacs IV 709 Sft. -do-504 1.50 lacs () covered area includes area under flat, car garage, staircase, ramps and circulation space. MODE OF PAYMENT Initial deposit Rs. 11,000/- At the time of registration i.e. within 30 days of the issue of acceptance-cum-demand letter Rs. 11,000/- Three half-yearly instalments first instalment being payable on completion of six months from the date of issue of acceptance-cum-demand letter. i) First instalment Rs. 16,000/- ii) Second instalment Rs. 16,000/- iii) Third instalment Rs. 16,000/- At the time of possession Rs. 20,000/- Balance in 144 monthly instalments including interest @ 13.5% p.a. Rs. 1,907/- (Tentative) It was also provided that the exact price of flats would be worked out at the time of allotment after the flats were completed and the price could be increased due to variation in plinth area, scope of work change in specifications and design, increase in cost of materials and labour, cost of land or due to any other reason and the same shall be binding upon the allottee. Printed copy of the brouchure containing terms and conditions on which the said dwelling units/ flats were offered, has been placed on the records of this case was Annexure P2. It is pleaded that the respondent-Board had given it out to the public at the time of inviting applications for registration and allotment of these flats/ dwelling units, though not in writing, that work on the construction of the said flats/ dwelling units would be completed within a period of 15 to 30 months and that the Board had fixed a maximim of 30 months period for the completion of the entire project and that the successful applicants in any way would start moving to their new flats/ dwelling units within 15 months of the draw of lots. The representations made and held out by the Board even came to be published in the 'Daily Tribune' on 4/07/1989 before the last date for submission of application forms with a view to influence the mind of intending applicants so as to lure and induce them to file their applications for registration and allotment of dwelling units. It is also pleaded that the Board while giving advertisement in the print media such as the 'Daily Tribune' on 11/02/1990 inviting tenders from its approved builders/ contractors specified a time-frame of 18 months therefrom for the completion of flats/dwelling units. According to the time frame, the flats were to be completed by or about the end of Sept. 1991. Mrs. Tajinder Kaur, Chairman of the respondent-Board, it is further pleaded sensing a strong feeling of frustration and apprehending agitational approach/action on the part of the successful applicants, both in and outside the Court on account of the failure of the Board to complete construction of the said flats within the stipulatled period, made statement which was published in the 'Daily Tribune' on 30/03/1990 that the Board was keen to complete the construction of the flats within the stipulated period as any delay on the part of the Board in that behalf could result in escalation in the cost of construction of flats. Petitioners were further assured through the said statement that the despatch of allotment letters to the successful applicants would start in the very next month of April 1990 and the allottees would be in their flats latest by the end of April, 1992. Petitioners, thus, submitted their applications along with initial deposit of Rs. 11,000.00 each before the last date of the registration on their names for allotment of flats in Category-III of the scheme. The Board, after processing applications and drawing requisite draw of lots on 4/12/1989, issued accemptance-cum-demand letters only in the month of December, 1990 i.e. after a period of more than one year from the date of draw of lots informing the petitioners that their applications as successful applicants have been registered for the allotment of flats in Category-III of the Scheme. They were required to make further payments in accordance with the following schedule:-

(3.) On the facts as stated above, learned counsel appearing on behalf of petitioners vehemently contents that the price of the flats could be increased due to variation in plinth area meaning thereby increase therein, scope of work, change in the specifications and designs, increase in the cost of material and labour, cost of land or due to any other reason. The allotment letter now issued by respondent-Board does not even remotely disclose the head or heads under and on account of which price of the flat has been increased nor any reason has been assigned therein for escalation in price. There has been not only reduction in the covered area of each flat but there has also been overall reduction in the area appurtenant to each block of 24 flats comprised in the four storeys one over the other with the resultant decrease in the green spaces around each of such block of 24 flats. This has been done on account of drastic changes brought about by respondent-Board in the original lay-out plan. It is pleaded and so argued that there were 13 blocks (each block containing 24 flats in four storeys) that were to be constructed. This lay-out plan has come to be changed and in the same total area, 19 blocks (with each block having 24 flats in four storeys) have come to be constructed. In this way six blocks with 144 flats comprised therein have come to be constructed additionally within the same area, which has resulted in over-crowding of the area due to construction of more flats and the area of green spaces which was to be available according to the original layout, stands drastically reduced. Scooter garages of the size of 8'.3" X 3'.71/2" which were to be constructed on the ground floor have been shifted in the basement with reduced area of 8'.3" x 3'. Thus, the covered area of each flat has come to be reduced by about 6 sq. feet whereas the ground area which was to be available for each block of 24 flats has been reduced drastically by about 945 sq. feet which was originally meant for the provision of 24 scooter garages for the use of owners of 24 flats comprised in each block. By reducing the width of the scooter garage to 3 feet, the very purpose of providing scooter garage has been defeated as under the reduced size of the scooter garage, it would be practically impossible for any one to park scooter therein with any convenience. It is further contended that the excavations dug underneath the ground floor for providing basement have made it unsafe for the life of children to play around and it is likely to cause drainage problem because of collection and stagnation of water during rainy season which might even cause damage to the vehicles parked there. There has been no increase in the cost of the land which stood acquired and taken possession of by respondent-Board before the Scheme was floated in the month of May, 1989. Respondent-Board by changing the original layout of the Scheme has come to construct six blocks of 144 flats more within the same total area and has offered them to the general public on similar hire-purchase basis, thereby pocketing more money and the prices of the flats of petitioners in fact should have been decreased from the original one of Rs. 2.25 lacs. No extra expenditure has been incutrfed by respondent-Board towards the cost of material and about in the construction of flats in question as the contractors/ builders through whom the flats were constructed, were paid according to what had been contracted for as back as in the month of March, 1990. While originally fixing the estimated price of each flat at Rs. 2.25 lacs, the Board had taken into consideration the factor of rise in prices in the cost of materials and labour etc. at least up to the month of September, 1991 by which time it had planned to complete the construction of the flats and deliver possession. Under relevant clause dealing with the increase in price, respondent-Board could not have an absolute right to increase the price of flats at any time without assigning any reason in its unfettered discretion. Such a stand based upon the clause aforesaid, it is further contended, would be opposed to public policy as contained in Section 23 of the Indian Contract Act, 1872 and, thus, was not enforceable. In so far as interest is concerned, the respondent-Board was to charge the same @ 13.5% per annum on the balance amount after taking possession of the flats whereas now respondent Board vide letter dated 31/05/1993 had arbitrarily increased the rate of interest to 16.5% per annum unilaterally without any justification whatsoever. The increase in the monthly instalments from Rs.1907.00 to Rs. 2891.00- has also been styled to be an action based upon no cogent reasons whatsoever.