2002 JTR(SC) 830
2003 1 AIC 21 ; 2002 AIR(SC) 2940 ; 2002 AIR(SCW) 3436 ; 2003 1 AllCJ 17 ; 2002 49 AllLR 213 ; 2002 3 BLJR 2453 ; 2002 99 DLT 284 ; 2004 ILR(Kar) 1573 ; 2002 6 JT 182 ; 2002 3 RCR(Civ) 740 ; 2002 6 Scale 20 ; 2002 7 SCC 135 ; 2002 Supp1 SCR 622 ; 2002 1 WLC 714 ; 2002 KHC 1348 ; 2002 5 Supreme 398
2002(5) Supreme 398
SUPREME COURT OF INDIA
(From Delhi High Court)
V.N. Khare, Shivaraj V. Patil and Ashok Bhan, JJ.
Delhi Development Authority -Appellant
versus
Ashok Kumar Behal & Ors. -Respondents
Civil Appeal Nos. 9802-9807 of 1995
With
C.A. No. 9825 of 1995
Decided on 20-8-2002
Counsel for the Parties :
For the Appearing Parties : Har Dev Singh, Sr. Advocate, Ms. Indu Malhotra, Ms. Pooja, Dheeraj Nair, Ms. Deepa Vishwanathan, Ms. Madhu Moolchandani, S.B. Upadhyay, Advocate (NP), V. Shekhar, Advocate (NP), G.K. Bansal, Advocate (NP)/Advocates.
VERY IMPORTANT POINT
In view of Clauses 13 and 14 in the Brochure of DDA s Registration Scheme on new Pattern-1979 it has right to escalate the prices in 1990 and High Court cannot interfere under Article 226 of the Constitution in the matter of pricing/costing of flats, including escalation of cost of land, cost of construction of MIG, LIG and Janta flats. The impugned revision by Lt. Governor, Delhi is thus neither illegal nor arbitrary.
Act Referred :CONSTITUTION OF INDIA : Art.226
(A) The referred Article 226 of the Constitution of India empowers the High Court to issue writs for enforcement of rights and for any other purpose, and its jurisdiction extends to matters connected with pricing, costing, and administrative action of governmental authorities. The Delhi Development Authority operated under the Registration Scheme on New Pattern-1979, which outlined indicative flat prices and was framed as a contractual scheme. The schemes clauses on land valuation and escalation, specifically the revision of land rates in 1990 and the fixation of MIG flat prices, fall within the scope of this jurisdiction. However, the availability of judicial review under Article 226 in pricing matters is constrained by contractual terms and the requirement of demonstrated arbitrariness or failure to apply relevant principles.
(B) Key legal principles include the limited scope of judicial review over pricing/costing where a contractual scheme and clear escalation mechanisms exist, the binding effect of an authoritys reasoned decision, the necessity for authorities to place relevant material on record before revising prices, and the principle that co-equal benches of a High Court must be resolved by a larger bench when inconsistencies arise, with the larger benchs decision being binding.
Facts of the case:
The Delhi Development Authority formulated a 1979 flat allotment scheme indicating an MIG flat price of Rs. 42,000. Registration opened and closed in 1979. Due delays, allotments occurred in 1991. In 1990, land rates were revised significantly upward. Respondents challenged the revised rates in writ petitions, arguing they exceeded the schemes indicative prices. Several similar petitions were previously dismissed. A Division Bench directed the Authority to fix flats at four-and-a-half times the 1979 price and appointed an Expert Committee. A conflict emerged between Division Bench and Full Bench directions. A Full Bench ultimately held that the revised land rate was neither arbitrary nor illegal and that judicial review under Article 226 was not available to challenge pricing/costing in this contractual context.
Findings of Court:
The Full Bench found that Clause 13 and 14 of the brochure, together with the contractual nature of the scheme, limited judicial interference to cases of arbitrariness or non-disclosure, not mere disagreement with pricing. It held that the 1990 revision by the Lieutenant Governor was neither arbitrary nor illegal and that the Division Benchs contrary view created an inconsistency.
Issues:
Whether Article 226 of the Constitution permits judicial review into the pricing and costing of flats under a scheme with detailed clauses on land valuation and escalation, and whether the impugned revision of land rates by the Lieutenant Governor was illegal or arbitrary.
Ratio Decidendi:
Where a statutory or scheme-based pricing framework exists and the authority has placed relevant material, the High Court cannot interfere with the pricing/costing or the escalation of land prices under Article 226 merely on the ground of higher charges; such revision is not arbitrary if based on relevant factors and a reasoned exercise of authority. The larger benchs interpretation, reflected in the impugned Full Bench judgment, prevails over inconsistent earlier Division Bench rulings.
Result:
The appeals are allowed, the impugned Full Bench judgment is set aside, and the writ petitions are disposed of in terms of the Full Bench order, affirming the Lieutenant Governors revision of land rates.
(A) The referred Article 226 of the Constitution of India empowers the High Court to issue writs for enforcement of rights and for any other purpose, and its jurisdiction extends to matters connected with pricing, costing, and administrative action of governmental authorities. The Delhi Development Authority operated under the Registration Scheme on New Pattern-1979, which outlined indicative flat prices and was framed as a contractual scheme. The schemes clauses on land valuation and escalation, specifically the revision of land rates in 1990 and the fixation of MIG flat prices, fall within the scope of this jurisdiction. However, the availability of judicial review under Article 226 in pricing matters is constrained by contractual terms and the requirement of demonstrated arbitrariness or failure to apply relevant principles.
(B) Key legal principles include the limited scope of judicial review over pricing/costing where a contractual scheme and clear escalation mechanisms exist, the binding effect of an authoritys reasoned decision, the necessity for authorities to place relevant material on record before revising prices, and the principle that co-equal benches of a High Court must be resolved by a larger bench when inconsistencies arise, with the larger benchs decision being binding.
Facts of the case:
The Delhi Development Authority formulated a 1979 flat allotment scheme indicating an MIG flat price of Rs. 42,000. Registration opened and closed in 1979. Due delays, allotments occurred in 1991. In 1990, land rates were revised significantly upward. Respondents challenged the revised rates in writ petitions, arguing they exceeded the schemes indicative prices. Several similar petitions were previously dismissed. A Division Bench directed the Authority to fix flats at four-and-a-half times the 1979 price and appointed an Expert Committee. A conflict emerged between Division Bench and Full Bench directions. A Full Bench ultimately held that the revised land rate was neither arbitrary nor illegal and that judicial review under Article 226 was not available to challenge pricing/costing in this contractual context.
Findings of Court:
The Full Bench found that Clause 13 and 14 of the brochure, together with the contractual nature of the scheme, limited judicial interference to cases of arbitrariness or non-disclosure, not mere disagreement with pricing. It held that the 1990 revision by the Lieutenant Governor was neither arbitrary nor illegal and that the Division Benchs contrary view created an inconsistency.
Issues:
Whether Article 226 of the Constitution permits judicial review into the pricing and costing of flats under a scheme with detailed clauses on land valuation and escalation, and whether the impugned revision of land rates by the Lieutenant Governor was illegal or arbitrary.
Ratio Decidendi:
Where a statutory or scheme-based pricing framework exists and the authority has placed relevant material, the High Court cannot interfere with the pricing/costing or the escalation of land prices under Article 226 merely on the ground of higher charges; such revision is not arbitrary if based on relevant factors and a reasoned exercise of authority. The larger benchs interpretation, reflected in the impugned Full Bench judgment, prevails over inconsistent earlier Division Bench rulings.
Result:
The appeals are allowed, the impugned Full Bench judgment is set aside, and the writ petitions are disposed of in terms of the Full Bench order, affirming the Lieutenant Governors revision of land rates.
JUDGMENT
Bhan, J.-Appellant-Delhi Development Authority (hereinafter referred to as the Authority ) formulated a Scheme known as "Registration Scheme on New Pattern- 1979" (for short the Scheme ) to build and sell MIG/LIG and Janta flats so as to be within the reach of the common man.
2. Registration for the scheme opened on 1st September, 1979. In the scheme the illustrated price of various categories of flats were mentioned. The likely cost of MIG flats with which we are concerned in these appeals was indicated to be Rs. 42,000/-. On 30th of September, 1979, registration was closed. About 1,70,000 persons registered themselves in the scheme. In 1981, allotment started taking place by draw of lots based on randomised allotment. The cost of flats was worked out after taking into account the prevailing rate of land by the Lt. Governor. The cost of construction was worked out by dividing the cost incurred in construction of a pocket of flats by a number of flats in that pocket. Clauses 13 & 14 of the brochure are as follows:
"Clause 13. The plinth area of the flats to be constructed under new pattern is likely to be as under:-
MIG Between 60 to 65 Sq. Mtrs.
LIG About 38 Sq. Mtrs.
Janta Upto 24 Sq. Mtrs.
The accommodation in the flats under different categories will be as under:-
MIG One Living Room, 2 Bed Rooms, Kitchen, Bath Room and W.C. and Open Court-yard.
LIG 2 Rooms, Kitchen, Bath Room and W.C.
Janta One room, Kitchen, Bath Room and W.C.
The likely cost of flats constructed under this scheme will be as under:-
MIG Rs. 42,000/-
LIG Rs. 18,000/-
Janta Rs. 8,000/-
The prices are indicative and do not represent the final cost.
14. It may please be noted that the plinth area of the flats indicated and the estimated prices mentioned in the brochure are illustrative and are subject to revision/modification depending upon the exigencies or lay out cost of construction etc."
[Emphasis supplied]
3. Due to certain reasons with which we are not concerned at the moment, the allotments could not be made. On 6th of December, 1990 fresh rates of land to be taken into account for costing of flats were approved by the Lt. Governor. Whereas in 1979 the prevailing land rate was fixed at Rs. 62/- per sq. meter, the same was revised in 1990 to Rs. 870/- per sq. meter for MIG flats, Rs. 660/- per sq. meter for LIG flats and Rs. 500/- per sq. meter for EWS (Janata flats). The increased rate was approved after taking into consideration all the relevant factors involved.
4. The respondents-writ petitioners (hereinafter referred to as the respondents ) whose turn for allotment came in 1991 were allotted flats in Jahangirpuri. The demand letters were sent to them. Respondents filed the writ petition No. 3267 of 1991 along with Civil Writ Nos. 3198, 3456, 3645, 3795 and 3796 of 1991 respectively in Delhi High Court challenging the rate at which the flats were being allotted. The case put up by them was that the amount being charged for the flats was much higher than what was indicated in the scheme itself.
5. Writ Petition Nos. 3876 of 1992 titled Prem Chand vs. Union of India & Anr., CWP 2787 of 1990 J.K. Dhingra vs. DDA, CWP 728 of 1991 Vinod Kumar Gupta vs. DDA, and CWP 1327 of 1991 Maha Nand Sharma vs. DDA also filed on the same grounds and for the same were dismissed on 24th May, 1993, 16th May, 1991, 22nd October, 1991 and 15th January, 1992, respectively.
6. Writ Petitions filed by the respondents were allowed by the High Court despite the fact that several similar writ petitions had already been dismissed on merits. By the impugned judgment the High Court struck down the revision in the rate of land. The Authority was directed to make allotment of flats at a tentative price of four and a half time of the price offered in the year 1979. Further the Authority was directed to constitute an Expert Committee to go into the costing of the flats taking the land rate at Rs. 62/- per sq. meter. The Expert Committee was to work out the price after taking into account the actual cost of construction made by it for the construction of the flats. If the Expert Committee after working out the cost on the basis of aforesaid works out cost to be more than the price that was provisionally fixed then the Authority was put at liberty to revise the cost and intimate to the respondents requiring them to make the payment within a month of such intimation.
7. Another set of writ petitions 1121/91, 1102/93, 1059/94, 874/94, 1008/94, 1019/94, 1451/94 and 1628 of 1994 which were for similar relief came up for hearing before another Division Bench. Arguments were heard and orders were reserved. A miscellaneous application being CM No. 6491 of 1993 was filed in writ petition No. 1121 of 1991 to report that another Division Bench had pronounced judgment in Writ Petition No. 3267 of 1991 (writ petition filed by the respondents) on August 25, 1993 which had a direct bearing on the controversy involved, in which similar issues had been considered and decided. The relief similar to the one claimed in petition had been granted. A prayer was made that the writ petitions be disposed of in terms of the said judgment. On notice, the authority resisted the application saying that important decisions vital to the issue raised had escaped attention of the Court in CWP 3267 of 1991 and as such the same was not binding. Keeping in mind the divergent views expressed by different Benches of equal strength, the Division Bench felt it appropriate that the matter be decided by a larger bench and in particular the following questions:
"1. Whether under Article 226 of the Constitution of India, this Court can interfere in the matter of pricing/costing of flats including escalation in cost of land particularly in view of Clause No. 13 and 14 of the brochure regarding the Registration Scheme on New Pattern-1979 under which the petitioners are registrants for allotment of flats?
2. Is the impugned revision of cost of land by the Lieutenant Governor of Delhi illegal and arbitrary?"
8. Thus, on their recommendation, a Full Bench was constituted to decide the aforesaid questions.
9. The fact that the matter had been referred to a larger Bench doubting the correctness of the view expressed in the impugned judgment was brought to the notice of this Court in the present appeals. This Court on 7th February, 1994 adjourned the case sine die to await the decision of the Full Bench and passed the following order:
"We are told at the bar that the instant decision under appeal has been doubted by another Division Bench of the High Court. Apparently there exists a conflict of opinion raging in the High Court on the question raised herein. It appears that CWP No.1121/91 Sheela Wanti vs. Delhi Development Authority and other batch cases stands referred to a Full Bench by a order of a Division Bench dated 22nd September, 1993. We feel that in this situation it would be appropriate that the High Court itself puts to order its own views. We, therefore, send a request to the Chief Justice of the High Court to constitute a Full Bench, if possible, within 3 weeks and have the matter listed and heard as expeditiously as possible. We on our part hold over this matter awaiting the decision of the Full Bench.
The matter is adjourned sine die with the liberty to mention."
10. The authority filed a detailed affidavit before the Full Bench along with the documents explaining as to how likely cost of the flats mentioned in 1979 was arrived at the component of land price in the said cost, the basis thereof and increase in the land price, if any, between 1979 and 1990. The basis on which the price was enhanced was also indicated which ultimately resulted in the issuance of the notification by the Lt. Governor of Delhi dated 6th December, 1990 fixing the revised rates which was impugned in the writ petitions filed in the High Court.
11. The points which were referred to the Full Bench were answered in the negative, i.e. in favour of the authority and against the allottees. It was held that the scope of judicial review in the cases involving costing and fixation of prices was very much limited.
12. In the concluding portions, the two points referred to the Full Bench were answered in the following terms:
"We may now advert to the questions referred to the Full Bench. In keeping without observations and findings recorded above, we are of the opinion that in view of Clause 13 and 14 of the brochure and the transaction being contractual, this court cannot interfere under Article 226 of the Constitution in the matter of pricing/costing of flats, including escalation of cost of land, etc. The answer to the first question has to be in the negative.
As regards the second question referred to the Full Bench, as noticed above, we are of the view that the impugned revision of by the Lieutenant Governor of Delhi is neither illegal nor arbitrary."
13. The decision of the Full Bench was challenged in this Court by filing Special leave petition © No. 13508 of 1995 and the same was dismissed on 14th July, 1995.
14. Special leave petitions in the present appeals were listed before the Bench on 20th October, 1995. Counsel for the respondents raised an argument that since the special leave petitions against the Full Bench judgment were dismissed in limine, he would like to challenge the correctness of the Full Bench judgment. Keeping in view this submission, this Court granted the leave to file the appeals. The order passed by the Court is in the following terms:
Learned counsel for the petitioner submits that the impugned judgment by a Division Bench of the High Court is contrary to the subsequent Full Bench decision of the same High Court against which Special Leave Petition has been dismissed by this Court. Learned counsel further submits that other similar SLPs were also dismissed by this Court which amounts to affirmance of the Full Bench decision dated 3rd February, 1995 (at page 143-79 of the paper book). On the other hand, learned counsel for the respondent submits that the dismissal of the SLPs being in limine, he would like to challenge the correctness of the Full Bench judgment and therefore the hearing will take some time.
For the above reason, we grant special leave in all the special leave petitions. In the meantime operation of the impugned judgment shall remain stayed."
15. From the facts narrated above, it is evident that there was a difference of opinion between co-equal benches of the High Court regarding fixation of the price of MIG flats in the same scheme. Since there was a divergence of opinion, the matter was referred to a Full Bench to resolve the conflict in the views expressed. The conclusion arrived at by the Full Bench run contrary to the view expressed by the Division Bench in the impugned judgments.
16. Shri Hardev Singh, senior advocate appearing for the respondents strenuously contended that the view expressed in the impugned judgment before us was not overruled by the Full Bench, rather the same was approved. Relying upon the following observations:
"The consistent view of this Court thus, was that escalation in prices of the flats constructed by the DDA under different schemes, including the present scheme, could not be challenged under Article 226 of the Constitution till the decision in Ashok Kumar Behl Vs. DDA 52 (1993) DLT 153, in which the Court went into the question of pricing and quashed the escalated price of the flats allotted under the scheme. It appears that the Court did so apparently for the reason that despite specific directions in that behalf the DDA had failed to place the relevant material before the Court to explain how the price fixation had been done and on what basis. Court queries in this behalf were not answered, which led to the belief that the DDA was suppressing something and had acted arbitrarily to the prejudice of the writ petitioners. These significant factors put the case out of the ambit of the ratio of the Bareilli Development Authority s case."
It was stressed that since the DDA had failed to produce the relevant material before the Court to explain how the price fixation had been done ratio of this Court s Judgment in Bareilly Development Authority Vs. Ajai Pal Single 1989(1) SCR 743, was not applicable. That the Division Bench in the impugned judgment decided the case on the peculiar facts of the case and therefore the same would not be governed by the ratio of the decision of the Full Bench judgment.
17. The contention put forth by the counsel for the respondents cannot be accepted either on facts or in law. Keeping in mind the divergence of views expressed by the co-equal benches the matter was referred to the Full Bench. The Full Bench expressed the view that revision of price by the Lieutenant Governor of Delhi in the year 1991 was neither arbitrary nor illegal, in the other words, the price fixed by the Lieutenant Governor in the year 1991 was upheld whereas the Division Bench in the impugned judgment has taken a dramatically opposite view. In the impugned judgment it has been held that the price fixed by the Lt. Governor in the year 1991 was arbitrary and illegal. The Court after fixing a tentative price directed to constitute an Expert Committee to go into the question of pricing and determine the same after taking the land rate at Rs. 62/- per sq. meter and actual cost of construction made by it for the construction of the flats. The Full Bench did not approve the view expressed by the Division Bench in the impugned judgment, it simply stated that the Division Bench may have come to this conclusion because the Authority failed to place the relevant material before the Court to explain how the price fixation had been done and on what basis. Court queries in this behalf were not answered, which led to the belief that the DDA was suppressing something and had acted arbitrarily to the prejudice of the writ petitioners. The relevant material had been placed before the larger Bench and the Bench after taking into consideration the material placed before it came to the conclusion that the price fixed by the Lt. Governor of Delhi was neither arbitrary nor illegal. The inconsistency of the views expressed in the impugned judgment and the larger Bench of Delhi High Court is self evident. Delhi High Court has resolved the conflict of views expressed by the Division Benches of co-equal strength by constituting a larger Bench and the special leave filed against the judgment of the larger Bench has already been dismissed.
18. Inconsistency and contradiction in the orders passed by the same Court on the same point regarding the same scheme cannot be allowed to be continued or perpetuated. If contention of the learned counsel is accepted then an anomalous situation would arise by which the price fixed for few of the MIG flats in the scheme would be much less than the price fixed for the remaining flats allotted in the same year which cannot be permitted. The law laid down by the Supreme Court is binding on all courts within the territory of India and the law laid down by a High Court is binding on all courts within its jurisdiction. It is a cardinal principle of rule of law that inconsistency and contradiction in the orders has to be avoided at all costs to bring about a certainty in the mind of the Subordinate courts and the litigant public. This principle would stand violated in case two binding principles on the same point of the same Court are allowed to operate simultaneously.
19. We put an end to the controversy by setting aside the impugned judgment and dispose of the writ petitions filed by the respondents in terms of the order passed by the Full Bench of the Delhi High Court in Sheelawanti & Ors. decided on 3rd February, 1995. We agree with the view expressed by the larger Bench in Sheelawanti & Ors. Case (supra).
20. The appeals, accordingly, stand disposed of with no order as to costs.
(N.K.R.) Appeals allowed accordingly.
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