KRISHI UTPADAN MANDI SAMITI AND ORS. v. PILLIBHIT PANTNAGAR BEEJ LTD. AND ANR

Citation: [2003] SUPP. 6 S.C.R. 344

Court: Supreme Court of India

Bench: V.N. KHARE, S.B. SINHA, AR. LAKSHMANAN

Judgment text

KRISHI UTPADAN MANDI SAMITI AND ORS. v. PILLIBHIT PANTNAGAR BEEJ LTD. AND ANR. NOVEMBER 28, 2003 [V. N. KHARE, CJ. AND S. B. SINHA AND DR. AR. LAKSHMAJ'JAN, JJ. ] UP. Krishi Utpadan Mandi Adhiniyam, 1964; Sections 2(a), 2(y), 11, 17(iii)-Seeds Act, 1966,: Section 2(11)-Seeds Rules, 1968, Rule 2 (e) - Wheat and wheat seed - Respondents dealing i_n purchase and sale of certified seeds of wheat-Levy of Market Fee under the State Act- Competency of-Held, wheat and wheat seed are different-Hence, State is not competent to levy market fee since seeds ofwheat is not a specified agricultural produre under the State Act-On harmonious reading ofState Act and Central Act, respondents are not traders under the State Act- _ Essential Commodities Act, 1955; Section 3-Seeds Control Order, , 1983-Food grains Movement Restriction (Exemption of Seeds) Orders, 1970. Respondents are engaged in business -of buyfog, processing and selling of certified wheat seeds.

The appellant-Market Committee issued notices to the respondents for levying market fees under section 17 (iii) (b) of the U. P. Krishi Utpadan Mandi Adhiniyam, 1964 (U. r. Act) on the ground that the respondents are dealing in wheat, a specified 'agricultural produce' under section 2(a) of the U. P. Act. The respondents replied to the notices of the appellants that they are dealing with certified seeds of wheat and not wheat and hence are not liable to market fee under the U. P. Act. The appellants rejected· the representations and passed an order demanding market fees under 'the U. P. Act. The respondents filed a Writ Petition before High Court for quashing the order of the appellants. The High Court allowed the writ petition and quashed the order of the appellants following the decision in State ofRajasthan v. Rajasthan Agriculture Input Dealers Association, AIR (1996) SC 2179. In appeal, the appellants contended that the market fee is levied under the U. P.

Ad on purchases of wheat by the respondents and not on sale ofcertified seeds; that wheat is an agricultural . produce notified '. l. 14 KRISHI UTPADAN MANDI SAMITI v. PILLIBHIT PANTNAGAR BEEJ LTD. 345 under the heading 'cereal' chargeable to market fee under the U. P. Act; that cereal is a seed in itself; and that there is no difference between wheat and wheat seed. i The respondents contended that they are dealing only in certified seeds of wheat and not in purchase or sale of wheat; that the breeder seeds of wheat are purchased from Agricultural Universities for processing them into certified seeds; that the seeds of wheat are not wheat; and that wherever seeds are intended to be notified, it has been specifically mentioned as seeds in the Schedule to the U. P. Act and since the seeds of wheat are not notified, it cannot be subjected to market fee under the U. P. Act Dismissing the appeal, the Court Per AR. Lakshmanan, J (for himself and V. N Khare, CJ): HELD: 1. 1.

A perusal of the Schedule to the U. P. Krishi Utpadan Mandi Adhiniyam, 1964 (U. P. Act) shows that wherever seeds have been intended to be notified, it has been specifically mentioned as see~s. In case ofwheat, the Schedule does not provide or notify seed of wheat and thus the seeds of wheat are not specified in the Schedule and thus not covered by the definition of 'agricultural produce'. The object of legislature was to notify only those seeds which are different from the produce itself. 1360-G-Hl 1. 2 The ratio decidendi of the decision in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association is squarely applica~le where the appellants seek to give a wide connotation to the words· in the Schedule. Giving a wide interpretation is not possible and since wheat seed is not included in the Schedule, the Market Committee is not allowed to levy market fee on its purchase.

As the Market Committee plays no role in the trade of the respondents' seeds, it may not be allowed to levy the market fee. (364-F-G-Hl 1. 3. There is no nexus whether the seed has been chemically treated or not and the levy of market fees. Since the seed is a separate ~ommodity from grain, the same is not covered under the Schedule of the U. P. Act and as such 110 market fee is leviable over . the sale or purchase of the same. (366-C-D) 1. 4. The seeds are not specified agricultural produce under the · . ' ' provisions of the Act and therefore the business of purchase and sale o_(seeds under the supervision of Seed Certification agency established under t~e ~ct is not a business of. ~ale and purchase of specified agricultura. 1 produce and as such the. resp~ndents are not required to pay the market fee or to take o. ut a licenc~. Since the processing. of · wheat resulting in loss of its basic characteristics of being cereal, it cannot be subjected to levy .

as agricultural produce since the purchase .. by the respondent is for the purpose of g~o"'. ing seeds, no levy is permissible and therefore the market fee cannot be imposed on seeds which are unfit for human consumption. (366-D-G) .. '· State ofRajasthan v. Rajasthan Agriculture Input Dealers Association, AIR (1996) SC 2179, relied on. State of Rajasthqn v. Mangi Lal Pindwasl, (1996) · 5· SCC 60, referred to. Per S. B. Sinha, J (supplementing) 'l:t. The entire process beginning from procurement of see'ds breeder, further production thereof as well a~ sale is g~verned under the Seeds Act, 1966 and the Rules framed thereunder: The U. P. Krishi Utpadan Mandi Adhiniyam, 1964 contains both penal and· fiscal provisions. A 'trader' within the meaning of the U. P. Act wo. u! d be a. person who carries on business inter ·alia i'n 'the agricultu'r~I produce.

Although the dictionary meaning of 'business' may, be ~ide, but f~r the purpose of conside,ring th~ same'in the conte~t of regulatory ~nd ~ · ~ ~ , ' • • • ;. _ ·I • i • f,1 I l ' °t • I I penal statute, the same must be read as carrying on a commercial venture in th'e agricultural pr~d~ce. The. r~le' of st~ict c~-nstruction· ·shouid be applied in the 'instant case~ The intentio~ of the legislature in directing the ,trader to. obtain 'iicence is ab~olutely ~lear: ·a'nd· unambiguous in so far ~s it seeks to regulate the. trade' for purc~ase and sale. Thus a person who is not buying an agricultural produce for the pu'rpose «:»fs. elling it, ~. hether i~ the s~me form o~,in the transf~~red · form, may n~r be ~ trader•. The construction of a stat~t~ wm depend .. • ' . J ~ t • t ... • upon the purport and object of the, Act. The di. fferent provisions of the KRISHI UTPADAN MANDI SAMITI 1·. PILLIBHIT PANTNAGAR BEEJ LID.

347 statute which have the object of enforcing the provisions thereof namely levy of market fee, which was to be collected for the benefit of the producers is to be interpreted differenily from a provision where it requires a person to obtain a licence so as to regulate a trade. In case of doubt in construction of a penal statute, the same should be · construed in favour of the subject and against the State. The fiscal · statute must not only be construed literally, but also strictly. Ifin terms of the provisions of a penal statute, a person becomes liable to follow . the provisions thereof, it should be clear and unambiguous so as to let him know his legal obligations and liabilities thereunder. [368-C-D; 369-F-G; 370-G-H; 371-A-C, E-Fl State ofAndhra Pradesh v. Niis Abdul Bashi & Bros, AIR (1965) SC 531 and Sri Krishna Coconut Co. v. East Godavari Coconut & Tobacco Market Committee, AIR (1967) SC 973, referred to. London & North Eastern Railway Company & Berrriman.

(1946) AC 278 and Tuck & Sons v. Priester, [1987) 19 QBD 629, referred to. 0 1. 2. The legal maxim "Expressio unius (persone vel rei) est exclusio a/terius" is applicable in the instant case. Mis. Khemka & Co. (Agencies) Pvt. Ltd. Etc. v. State ofMaharashtra Etc. , f1975) 2 SCC 22, referred to. 1. 3. A conflict would arise in the event it is held that buying of seeds, which is a commodity governed by a Central Act (Seeds Act) would attract payment of market fee in terms of the State A ;ing minimum standards of germination; purity and other quality factors; (c) t~stlng seeds for quality factors at the seed testing laboratories to ce established by the Central Government and the State Government; KRISHI UTPADAN MANDI SAMITI '" PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA, J.

) 369 (d) Creating of seed inspection and certification service in each State and grant of licences and certificates to dealers in seeds; (e) Compulsory labelling of seed containers to indicate the quality of seeds offered for sale, and (f) restricting the export import and inter-State movement of non-descript seeds. " Section 2(11) of the Seeds Act defines seeds to mean : "Seed means any ofthe following classes ofseeds used for sowing or planting : (i) seeds of food crops including edible oil-seeds and seeds of fruits and vegetables; includes seedings, and tubers and bulbs, rhizomes, roots, cutting, all topes of grafts and other vegetatively propagated material, of food crops or cattle fodder". The definition of 'seeds', therefore, is not exhaustive. It is not in dispute that the entire process for procurement of 'breeder seeds' to sale of 'seeds' is governed under the provision of the Seeds Act as well as the rules framed thereunder.

Wheat is an agricultural produce within the meaning ofSection 2(a) which together with thirteen other food products have been placed under the heading "cereals". The Act contains both penal and fiscal provisions. A trader within the meaning of the said Act would be a person who carries on business inter alia in the agricultural produce. The question is as to whether in the aforementioned situation the respondent would be a trader of Agricultural produce within the meaning of the provisions of the said Act. It is not disputed that 'seed' as purchased and 'sold' is not meant to be used as a cereal. The respondent buys only certified seeds and sales the same as seeds after processing the same. 'Seeds' which are sold by the respondent admittedly are not consumable. It is furthermore not disputed that in terms of the licenses granted in their favour under the 1966 Act, they are not permitted to deal in the commodities for any other purpose. In the State ofAndhra Pradesh v. Mis.

H Abdul Bakhi & Bros. , AIR (1965) SC 531, the Supreme Col! rt held:- "We are unable to agree with this view of the High Court. A person to be a dealer must be engaged in the business of buying or selling or supplying goods. The expression 'business' though extensively used is a word of indefinite import; in taxing statutes it is used in the sense of an occupation, or profession which occupies the time, attention and labour of a person, normally with the object ofmaking profit. To regard an activity as business there must be a course ofdealings, either actually continued or contemplated to be continued with profit motive, and not for sport or pleasure. " Yet again in Sri Krishna Coconut Co. v.

East Godavari Coconut and Tobacco Market Committee, AIR (1967) SC 973, this Court while considering interpretation of Section 11 of the Madras Commercial Crops Markets Act held :- "The relevant provisions of the said Act and the rules which fell for consideration by the Supreme Court would be evident from paragraph 5 of the reported case which is in the following terms: Section 11(1) with which we are concerned in these appeals reads : "The Market committee shall, subject to such rules as may be made in this behalf, levy fees on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine". - Although the dictionary meaning of business may be wide, in our opinion, for the purpose of considering the same in the context of regulatory and penal statute like the Act, the same must be read as carrying on a commercial venture in agricultural produce. The rule of strict construction should be applied in the instant case.

The intention of the legislature in directing the trader to obtain licence is absolutely clear and KRISHI UTPADAN MANDI SAMITI '" PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA,]. ) 371 unambiguous in so far as it seeks to regulate the trade for purchase and sale. Thus a person who is not buying an agricultural' produce for the purpose of selling it whether in the same form or in the transformed form may not be a trader. Fuithermore, it is well known that construction of a statute will depend upon the purport and object of the Act, as has been held in Sri Krishna Coconut's case (supra) itself. Therefore, different provisions ofthe statute which have the object of enforcing the provisions thereof, namely, levy of market fee, which was t0 be collected for the benefit ofthe producers, in our opinion, is to be interpreted differently from a provision where it requires a person to obtain a licence so as to regulate a trade.

It is now well known that in case of doubt in construction of penal statute, the same should be construed in favour of the subject and against the State. In the case of London and North Eastern Railway Company and Berrriman, [1946] AC 278 Lord Simonds quoted with approval the following observations of Lord Esher N. K. in the case of Tuck & Sons v. Priester, [1887] 19 QBD, 629, 638. "We must be very careful in construing that section, because it imposes a penalty. If there is reasonable interpretation which will avoid the penalty in any particular case, we must adopt that construction. If there are two reasonable construction we must give the more lenient one. That is the settled Rule for ~he construction of penal sections. " It is trite that fiscal statute must not only be construed literally, but also strictly.

It is further well known that if in terms of the provisions of a penal statute a person becomes liable to follow the provisions thereof it should be clear and unambiguous so as to let him know his legal obligations and liabilities thereunder. The matter may be considered from another angle, "Expressio unius (persone vel rei) est exclusio alterius", is a well known maxim which means the express intention of one person or thing is the exclusion of another. The said maxim is applicable in the instant case. [See Mis Khemka & Co. (Agencies) Pvt. Ltd. etc. v. State ofMaharashtra etc. , [1975] 2 SCC 22 paras 47 and 48]. Having regard to the fact that in the event it is held that buying of seeds which is a commodity governed by a Parliamentary Act would attract payment of market fee in terms of the said Act, a conflict would arise.

In ordinary parlance at particular stages in which seeds are grown from breeder seeds may take the form of wheat but the said production which is bought by the respondents is also governed by the provisions ofthe Seeds Act and the Rules framed thereunder. The definition of 'seed' as noticed hereinbefore is of wide amplitude. It includes seedling of food crops. It is, thus, necessary to construe both the statutes harmoniously. Both, the Statutes must be given proper effect and allowed to work in their respective fields. Even if there is some over-lappings, the same should be ignored. Taking into consideration the totality ofthe situation and upon giving harmonious construction to both the 1966 Act as well as the said Act, we are of the opinion that the respondent cannot be said to be a trader of agricultural produce as in the ordinary course of business, he is engaged in buying or selling agricultural produce.

Once it is held that the respondent is not a trader, no market fee can be demanded from it by the appellant. 'Seed' is also an essential commodity within the meaning of the provisions ofthe Essential Commodities Act, 1955 which has been enacted by the Parliament in exercise of its power conferred under Entry 33 of List III of the 7th Schedule of the Constitution of India. Further more, if a Parliamentary Act governs the entire field, the 'seeds' which are bought and further seeds produced therefrom and processed upon being governed by the Parliamentary Acts and Statutory Rules must be held to have been excluded from the purview of the provisions of the said Act. The Central Government, made Foodgrains Market Restrictions (Exemption of Seeds) Order, 1970 and Seeds Control Order, I983 in exercise of its power under Section 3 of the Essential Commodities Act, 1955.

In terms of sub-section (2) of Section 4 of the Act, the provisions of Section 3 of Essential Commodities Act, 1955 and the orders made thereunder shall have effect, notwithstanding anything inconsistent therewith contained in the said Act or in any law made thereunder, thus, the seeds "which are subject matter of not only a Parliamentary Act but also an order made under Section 3 of Essential Commodities Act would by necessary implication are not meant to be included within the definition of 'agricultural produce~ under the said Act. KRISHI lITPADAN MANDI SAMITI 1·. PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA, J. ] 373 Furthermore the interpretation Clauses contained in Section 2 of the said Act is prefaced with the expressions "unless there is anything repugnant in the subject or context". This Court in State ofMaharashtra v.

Indian Medical Association and Others, [2002] l sec 589, inter alia, held that the expression contained in one Statute may have to be read c':fft;:·ently in a particular context. Recently in S. Samuel, MD. , Harrisons Malayalam & Anr. v. Union ofIndia & Ors. , J. T. (2003) 8 SC 413, this Court has held that 'tea' does not come within the purview ofthe expression 'food stuff' contained within the meaning of the provisions of Essential Commodities Act, holding :- "It is thus clear that in common parlance food is something that is eaten. In a wider sense 'food' may include not only solid substances but also a drink. Still the fact remains that whether D : a solid or a liquid, the substance called 'food' should possess the quality to maintain life and its growth; it must have nutritive or nourishing value so as to enable the growth, repair or maintenance of the body.

As the purpose for which the respondents purchase the 'seeds' is not meant to be used as a 'cereal' which is an agricultural produce within the meaning of the provisions of the said Act, the High Court, in our opinion, has rightly held that the respondents are not liable to pay any market fee. I respectfully agree with the proposed judgment of Brother Dr. AR. Lakshmanan that the appeal be dismissed. B. S. Appeal dismissed. KANPUR DEVELOPMENT AUTHORITY v. SMT. SHEELA DEVI AND ORS. ETC. . ' NOVEMBER 28, 2003 [SHIVRAJ V. PATIL AND D. M. DHARMADHIKARI, JJ. ] Development Authority-Housing Scheme floated in 1978-Tentative cost of MIG Flat fixed at Rs.

48,000-Applications received for such scheme less than total number offlats to be constructed under the scheme- Brochure containing a clause that the price was not to be escalated in excess of10% ofthe tentative cost-Construction offlats under the Scheme was completed in 1980-However, flats not allotted to eligible applicants who applied for the scheme-No fault was attributed to the applicants- In 1994 the price of the Flat was increased from Rs. 48,000 to Rs. 2,08,000-Challenge to High Court directing delivery ofpossession offlats at the cost mentionedin the brochure-Held, valid-The cost ofconstruction of flats was to be determined on the date of the completion of the construCtion and not on the date ofdeliveringpossession - The determination ofcost ofhouse/flat or escalation ofcost cannot be arbitrary or erratic~ The Development Authority could not enhance the pricesfor the unforeseen .

E or/or compelling reasons beyond control of the Development Authority even as against the terms and conditions contained in. the brochur~'. ·" t·. Appellant floated three housing schemes with financial support from 'HUDCO' "on no profit no loss basis" for Lower Income GFb'up; and Middle Income Group. A brochure was issued showing the' cost of each house and terms and conditions of the scheme. Respondents applied for Middle Income Group (the "MIG") and were not allMteci the house after more than 18 years for no fault of theirs. The estimated cost ofeach house was specified in the brochure, which was Rs. 48,000. The houses were to be allotted among the valid applicants by lottery and on receipt of letter of information ofallotment, the applicants ha'd to deposit the balance of the I/4th of the cost of the house.

Thereafter the physical possession of the houses was to be delivered to the allottees and the remaining 3/4th of the cost of the house was to be paid by t'1e allottees in 48 quarterly installments in 12 years. Out of 111 MlG flats KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI 375 only 108 were valid applications so all the applicants were required to be allotted the MIG flats when l/4th of the cost of the flats were deposited. However, the Appellant chose to include the names of some more persons after the last date, which gave rise to disputes. Some affected applicants filed suits and the court finding fault with the Appellant decreed the suit and directed it to allot the houses to 108 valid applicants keeping 8 houses reserved for the persons who were plaintiffs in those two suits. The appeals filed by the Appellants against the decree passed by the trial court were also dismissed. Instead of complying with the decree, Appellant increased the cost of house from Rs. 48,000 to Rs.

2,08,000 and directed the applicants to deposit further sum of Rs. 40,000 and in case of default the name of such applicant would not be included in the list oflottery for allotment of houses. Some of the Respondents filed Writ Petitions, which were admitted. The High Court quashed the order issued by the Appellant and directed the Appellant to deliver the possession of the houses to the Respondents at the cost fixed in the brochure. Hence these appeals. It was contended by the Appellant that the High Court failed to appreciate that the Vice Chairman of the Appellant could determine the cost of the houses and the cost fixed by him was reasonable and fair; t!

iat the Appellant had brought out the scheme for allotment of houses on 'no profit no loss basis'; that the cost fixed was based on the relevant materials and it was not arbitrary so as to interfere with the same; that it was not open for the High Court to hold that the price of the house fixed was arbitrary and unreasonable without going into the method or the basis for calculating the cost of the house; the delay in allotment of houses was not deliberate or intentional but was because of the long pending litigation in court; that the houses were constructed by raising loans under the HUDCO Scheme; that enormous amount of interest has been paid on the loan amount; and that the appellant had to pay heavy compensation for the acquisition of ~~ It was contended by the Resp'.

>ndents that the delay in allotment of houses and delivering possession of the same to the Respondents was on account of the Appellant; the Respondents compiled with every condition of the brochure; the unreasonable stand and the conduct of - the Appellant was responsible for delay and no blame can be put on the Respondents; that the suits were filed by 8 Plaintiffs and nothing prevented the Appellant from allotting the houses to the Respondents keeping aside eight ·houses for those Plaintiffs as houses were available in excess of the Apptications; that the interim orders in those suits were passed ·in 1981/1982 whereas the Ap,pel1ants moved the court for vacating the interim order in t990; that the present Respondents were not parties in those suits; that as . per the br-0chure issued by the Appellant, escalation of cost of houses could not exceed 10%; that the cost of tbe house should be determined as on the date of com·pletion of itbe 1houses and .

not on the date of the allotment or delivering possession of tbe ! 10uses; and that ithe Respondents were salaried employees having fosser income and they had arranged their financial affairs •With a ho,pe 1to . get the houses; that had they been given the ,possession oftbe·. houses :in 1981, after its construction, they could have saved money paid by way of rent to houses where they were staying. Dismissing the appeals, the Court HELD : 1. 1. It 'is not in dispute that the Respondents made applications within the time fixed, satisfied the terms and conditions for aUotment of houses and they wer:e not the Plaintiffs in the suits filed in 1981/1982. Tfie const·ruction of houses was completed in 1980, the cost ofthe house was determined as on 24. 12. 1994. Nothing prevented the Appellant from allotting houses to the Respondents, when the houses were ready_ for allotment . particularly, when houses available were more than the applications received before the last date.

For no fault on the Respondents, they were made to wait for more than 1'8 years. As per the brochure the houses were to be allotted t. hrough lottery system by drawing lot among the eligible applicants, who got themselves r:egistered through the pr. escribed format within the time fixed and paid the required money within time. In the MIG Scheme, 111 houses were available but the number of applicants were less including the Respondents. Only 8 pe1·sons had filed suit in the years 1981/1982. There shou. ld have been no difficulty in allotting the houses and delivering possession to the Respondents immediately on their completion in 1980. In that event, the payment of interest on loan said to have been taken by the authority would not have arisen. 1386-C-F) », KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI 377 1. 2 Itcannot also be ignored that the Respondents were I are mostly salaried employees having monthly income of Rs. 601 to Rs. 1500.

They must also have adjusted and arranged their finance and affairs to make payment towards the houses. It may also be kept in mind the allottees were expected to pay the remaining amount after initial deposit in 48 installments. Even having regard to the payment of money in installments, the estimated cost which was fixed at Rs. 48,000 with a clear and express understanding that increase in the cost of the house could be up to 10% of the cost of the house. Jn the brochure, it is also mentioned that the price of the house mentioned is totally approximate and that the final price of the houses would be determined by the Vice Chairman, on the completion ofthe houses. Prices ofthe houses in these cases were determined as on 24. 12. 1994 as against the express clause that the determination of the final price shall be as on the date of completion of the construction of the houses i. e. in the year 1980.

As can be seen from the prescribed form of application and rules for payment the increase ofthe cost ofthe house can be up to 10%. Further it is clear D ' from the prescribed form of application as filed by the Respondents that the estimated cost of the house is Rs. 48,000, which could exceed up to 10%. (386-F-H; 387-A-CI 1. 3. The arguments advanced on behalf of the appellant to the effect that the Vice Chairman has power to determine the prices of the houses and the price determined is binding on the Respondents, runs contrary to brochure. Hence it cannot be accepted. (387-CJ 1. 4. For no fault of the Respondents they cannot be penalized to pay the cost of construction as determined on 24. 12. 1994 when the houses were ready in 1980. [387-D) 1. 5.

The High Court rightly concluded that delay in allotting and in delivering possession of the houses to the Respondents was caused due to the lapse on the part of the Appellant, and, therefore, in the fairness of things, the Appellant should not be allowed to determine unjust and unfair cost of the houses in an arbitrary ·manner. [388-E] Delhi Development Authority v. Pushpendra Kumar Jain, (1994] Supp. 3 SCC 494 and Prashant Kumar Shahi v. Ghaziabad Development Authority, (2000] 4 sec 120, distinguished. 2. As regards the claim that the Appellant ~orks on no profit no loss basis and it has raised huge loan under the HUDCO scheme _for construction of houses and it has to pay heavy interest on the amount ofloan raised, the Appellant neither urged nor laid any foundation for this argument before the High Court.

No details or particulars were given as to the amount of loan raised and the period for which interest has been paid in respect of the houses constructed which are to be allotted to the Respondents. (388-F-G] 3. As found, there was delay on account of the Appellant and if that occasioned payment of interest, the re:opondent cannot be held responsible, having regard to the terms and conditions contained in the brochure. This apart, no justifiable case has been made out for escalation of price of the houses in these cases, to say that the Appellant could enhance the prices for the unforeseen or for compelling reasons beyond its control even as against the terms and conditions contained in the brochure. (388-H; 389-A-B] 4.

Each case is to be decided in the facts and circumstances of the case in the light of the scheme published /framed and the terms and conditions mentioned in the brochure and/or in the prescribed form ofapplication in the matter ofescalation/determination ofcost ofhouse/ flat. However, cases where there is limit for fixing the escalation ofcost, normally the price . of house or flat cannot exceed the limits so fix~d. The determination of cost of house/flat or escalation of cost cannot be arbitrary or erratic. The authority has to broadly satisfy by placing material on record to justify the escalation of cost of a house/flat. Whether the delay was caused by the allottee or the authority itself is also a factor, which has bearing in determination of cost of house/flat. The unforeseen cause or the reason beyond control of the authority in a given case may be another factor to be kept in view. (393. ;C-E] Indore Development Authority v. Sadhana Agarawal (Smt. ) and Ors.

, (1995) 3 SCC 1 and Bareilly Development Authority v. Ajay Pal Singh, (1989] 2 sec 116, referred to. 5. In these cases the tentative cases of houses was fixed at Rs. 48,000 but the final cost was determined . at Rs. 2,08,000. This increase KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J. ] 379 is not mere escalation but it is a multiplication by almost four and half times, although escalation could not exceed 10% as is evident from the contents of the brochure read with prescribed form application for allotment of house. itself. Contentions of the appellant run contrary to the contents of its own brochure on which the Respondents acted adjusting their financial affairs understanding that the cost of the houses would be fixed in terms of brochure and that too not exceeding 10% of the estimated cost fixed initially. (393-E-Gl CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 913-914 of 1998. From the Judgment and Order dated 21. 5. 97 of the Allahabad High Court in c. M. W. P.

Nos. 303 and 9478 of 1995. Vikas Singh ancl Ms. Amrit Narayan for L. R. Singh for the Appellant. Ranjeet Kumar, Ms. Bina Gupta, Ms. Rakhi Ray and Ms. Sreedevi Raja for the Respondents. The Judgment of the Court was delivered by SHIVARAJ V. PATIL, J. Kanpur Development Authority (KDA) has filed these appeals challenging the correctness and validity of the common order dated 21. 5. 1997 made by the Division Bench of the High Court in Writ Petitions. Three schemes were floated by KDA in September, 1978 with financial support of 'HUDCO' "on no profit no loss basis". The three scheme were; (1) For Economically Weaker Section; (2) For lower Income Group and (3) Middle Income Group. Applications were invited in the prescribed form fixing the last date as 29. 9. 1978. The applications were to be made in the prescribed form along with the earnest money for each category. A brochure was issued showing the cost ofeach house and terms and conditions of the Schemes.

In these cases, we are not concerned with the houses constructed in two other schemes which were allotted to the applicants on the basis of lottery on 25. l 0. 1980 and cost specified in the brochure and the possession ofthe houses was delivered to them. However, the applicants (respondents herein) in the Middle Income Group were not l allotted the houses and their applications were kept pending for more than 18 years for no fault of them. As per the terms and conditions mentioned in the brochure inthe MIG Category, the applications were to be made along with the earnest money by 29. 9. 1978. The estimated cost of each house was specified in the brochure as Rs. 48,000. The persons wh0se income was between Rs. 601 to Rs. 1500 per month were eligible for Middle Income Group Houses: The houses were to be. allotted among the valid applicants byfottery.

After the lottery was drawn and on receipt of letter of information-of allotment, the applicants had to deposit balance of the 1/4th of the cost of the house. Thereafter, physical possession of the houses was to be delivered to the allottees and the remaining 3/4th of the cost of the house i. e. Rs. 36,000 was to be paid by the allottees in 48 quarterly installments in 12 years with 11. 5% interest as per the brochure. Since there were only 108 valid applications altogether for 111 MIG houses, all the applicants could have been allotted MIG houses when l/4th cost of the house was deposited by the applicants as on 31. 3. 1979, what remained was only to draw a lottery among the I08 valid applicants for the specific houses to each one of the applicants. And thereafter the possession of specified house was to be delivered to each allottee as the constructions of 111 MIG houses were completed in 1980. However, KDA chose to include names ofsome more applicants after the last date i. e. 29.

9. 1978, which gave rise to disputes. · Some affected applicants filed suits in 198Ill 982. None ofthese respondents were parties in those suits. The court finding fault with the KDA decreed the suit and directed it to allot the houses to I08 valid applicants. keeping 8 houses reserved for the person who are plaintiffs in those two suits. The appeals filed by the KDA agair. st the decree passed by the trial court were also dismissed. Instead of complying with the decree, KDA increased the cost of each houses from Rs. 48,000 to Rs. 2,08,000 by the notification dated 24. 12. 1994 stating that each applicant had to deposit a further sum of Rs. 40,000 and in case of default the name of the applicant-would· not be included fa the list of lottery for allotment of houses. In•these circumstances, some of the respondents were compelled to file writ petitions. KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI (PATIL, J.

] 3lU The writ petitions were admitted and interim orders were issued to include the names of 85 general category applicants in the lottery. In spite of the interim order dated 4. 1. 1995, KDA again issued a notification on l0. 1. 1995 stating that the date of lottery had been extended to 17. 1. 1995. The lottery was drawn among the 108 valid applications, keeping 8 houses reserved to the plaintiffs in the two suits. In February, 1995, information ofallotment was issued to all the allottees along with demand for Rs. 24,000 from each one ofthem towards first 6th monthly installment. The High Court in the writ petitions stayed this demand. The KDA filed the counter affidavit in the writ petitions taking a stand that it was entitled to escalate the price as per the brochure; the initial price fixed as the cost of the houses, was only tentative; the· delay in drawing of lottel')' and allotment of house was on account of the suits filed and because of the pendency of the cases.

According to the KDA, the action taken by it in increasing the cost of the. house to Rs. 2,08,000 was quite justified. The Division Bench of the High Court, after detailed consideration of the respective contentions, allowed the writ petitions granting relief to the respondents by quashing the order dated 24. 12. 1994 ofthe KDA increasing the cost ofthe houses and directed it to . deliver the possession ofthe houses to the respondents on the cost fixed in the brochure. The learned counsel for the appellant urged that the High Court failed to appreciate that the Vice Chairman of KDA could determine the cost of the houses and the cost fixed by him was reasonable and fair; the High Court could not have interfered with such determination of cost. The High· Court should have .

taken into consideration the position that the KDA brought out the scheme for allotment of houses on 'no pwfit and no loss basis'; the cost fixed was based on the relevant materials and it was not · arbitrary so as to interfere with the same; it was not open to the High Court to hold that the price of the house fixed was arbitrary and unreasonable without going into the method or the basis for calculating the cost of the house. The delay in allotment of houses was not deliberate or intentional; it was because of long pending litigation in courts. The learned counsel added. that KDA constructed houses by raising loans under the HUDCO Scheme; it has paid enormous amount of interest on the Joan raised; it had to pay heavy compensation for acquisition of land. On the other hand, the learned senior counsel for the respondents argued fully justifying the impugned order.

He submitted that the delay in allotment of houses and delivering the possession of the same to the respondents was on account of the appellant; the respondents complied with the every condition contemplated in the brochure; the unreasonable stand and conduct ofthe appellant was responsible for delay and no blame can be put on the respondents in that regard. Two suits were filed in 1981/ 1982 by eight plaintiffs in all. Nothing prevented the appellant from allotting the houses to the respondents keeping aside eight houses for the eight· plaintiffs as they were available in excess of the applications. The appellant moved for vacating the interim order in those suits filed in 1981I 1982-only in 1990. The present respondents were not' parties in those suits. The-appeals filed by the KDA against the decree μassed in the suits were dismissed on 24. 5. 1994.

The learned counsel fmther contended that as per the brochure issued by the appellant, escalation ofcost of houses could not exceed l0%; cost of the houses should be determined as on the date of 'completion ofthe houses and not on the date ofthe allotment or delivering -the possession of the houses. The appellant has tried fo prosecute parallel remedies inasmuch as it filed review petitions before the High Court and special° leave petition before this Court against the impugned order. ·The respondents were salaried employees having income between: Rs. 601 to Rs. 1500 per month; they had arranged their financial affairs with a hope to get houses. Had they been given the possession ofthe houses immediately after their completion in 1981, they could have saved money paying by way of rent to houses where they were staying. The learned counsel drew . · our attention to I. A. Nos. 7-8 of2003 filed by the respondents to take action .

F against the appe1la:-1t under Section 340 read with Section 195 of the Code of Criminal Procedure by ordering an inquiry into the offences committed by the appellant under Sections 193, 196, 199, 200, 463, 464, 465, 467, 468, 471 read with Section 120-B of the Indian Penal Code in ~espect of production of false and fabricated documents and giving false evidence during the proceedings. In these applications it is specifically averred that the appellant produced a translated copy of the brochure (Annexure A- I) alleging the same to contain the 1978 Scheme for allotment of houses in Mohalla Barra Third Phase, Kanpur. The correct copy (translated) of the brochure that was given to the respondents at the time of application for : H the said scheme is filed as Annexure A-2. The original copy in Hindi was KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J. ] 383 placed before us during the hearing.

According to the respondents Annexure A-1 was filed before the High Court by the appellant, which is fake, fabricated and materially different from the true translation of the original brochure and that the said document has been filed by the appellant with oblique motives to thwart/alter the course ofjustice. It is further stated in these I. As. that the case of the appellant before this Court is based on the premise that "In the brochure Clause 4 relating to payment of price, stipulated that the final price shall be determined by the Vice Chairman of the KDA and that the said price shall be determined by the Vice Chairman of the KDA and the price would be binding on the applicants. The brochure for allotment of houses under the Scheme also provided that the Vice Chairman of the KDA is empowered to alter/change the price/ · shape of the houses shown in the brochure and it shall be binding on every applicant". The prayer is made in these I. As.

to order for a preliminary inquiry into the offences committed by the persons responsible in the appellant authority during the course of the judicial proceedings and after recording the findings make a complaint to the Chief Judicial Magistrate for the prosecution of the accused persons in accordance with law. During the course of hearing when the original brochure in Hindi was produced on behalf of the respondents the learned counsel for the appellant did not dispute its correctness and authenticity. We have carefully considered the respective submissions made on behalf of the parties and to appreciate them, it may be necessary to refer to the relevant tenns and conditions under different headings contained in the brochure.

In the light of the controversy as to the translated copies of F' the brochures produced by the appellant and the respondents and in view ofwhat is stated above in relation to them the relevant terms and conditions contained in translated copy of the brochure (Annexure A-2) filed along with I. A. Nos. 7-8 on comparison of the same with the original in Hindi, reads :- G· "Signature (L. N. Tripathi) (Rubber stamp) Head Cleark (Sales) Kanpur Development Authority BURRA HOUSING CONSTRUCTION SCHEME (financially supported1·by. HUDCO) Third Phase (Application Form) KANPUR DEVELOPMENT AUTHORITY Price Rs. 5· "(Application form for applicant only) KANPUR DEVELOPMENT AUTHORITY No;:........... (without putting adverse effect) Price Rs. 5 D; BARRA·HOUSING SCHE\1E To: Vice Chairman Development Authority Kanpur Sir, . f. : I/We:..................................................................... son/wife of· .........................................................................................

apply for. l:\ ·house in the proposed 'houses under "Barra~. iGran Ninnan Yogna"· of Kanpur:Development Authority; the estimated cost of which· is Rs. 48,000' (which ·can also exceed ·upto I 0%) G: "SYSTEM AND RULES OF ALLOTMENT OF HOUSES (8) ·The Vice~Chairman can ·change any rulec. or,. cn~cancel and f, can make other rule which shall be acceptable . to. the applicant. " 1· KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J. ] 385 "KANPUR DEVELOPMENT AUTHORITY BARRA HOUSING CONSTRUCTION SCHEME Details of House & Rule for Payment SI. Category Area Details Monthly Sale Adv. 31. 12. 78 31. 12. 79 Qtly. Rate No. of house of land of income price amt. install- of . In sq. house of family of with ments interemt. Not house appli- st/year exceeding which cation can increase upto 10% 1 2 3 4 5 6 7 8 9 10 11 1. ............... 2. ............... ' 3. Middle 167. 20 2 rooms, 1500 48000 5000 2500 4500 48 11.

5% Income drawing Group dinning, Bath& Toilet Room& Lounge In the application form as prescribed by the KDA, it is clearly mentioned that the estimated cost ofthe house in MIG schr,me is Rs, 48,i.. OO (which can also exceed up to 10%). There was some controversy with regard to the terms and conditions mentioned in the brochure. It was contended on behalf of the respondents that there was deliberate misrepresentation by KDA before the High Court by filing incomplete and incorrect extract of Brochure. Before us, not only translated copy but original ofBrot:hure in Hindi itselfwas produced by respondents and there . was no controversy as to the terms and conditions in relation to the relevant clauses extracted above.

As rightly contended on behalfofthe respondents there is no clause 4 in the brochure re,lating to payment of price on which the appellant claimed that the Vite-Chairman of the KDA has the right to increase the price and fix the final price that would be binding on the applicants. This being the position, the very foundation for increase of the price of houses and justification thereof itself is destabilized and knocked down. Cfause 4 of the brochure is altogether different, which reads:- "(4) House category 2 and 3, the interested applicants to deposit full amount of the house, will have to deposit balance of the I/4th of cost by 3 l. 12. 1978. The if! formation of lottery will be sent by registered·post on the address mentioqed in the application form. The remaining 3/4th .

of the cost of the house will have to be deposited in cash or by Bank draft in favour of Development Authority within 60 days from the information oflottery given by registered post, otherwise all proceedings regarding allotment will be cancelled and the advance money will be forfeited. " It is not in dispute that the respondents made applications within the ' • l ' time fixed, satisfied the terms and conditions for allotment of houses and they were not the plaintiff in the suits filed in 19810982. The construction of houses was completed in 1980, the cost of the house was determined as on 24. 12. 1994. Nothing prevented the KDA from allotting houses to the respondents, when the houses were :ready for al1otment. Particularly, when houses available were more than the applications received before the last date. For no fault ofthe respondents, they were made to wait for more than 18 years.

As per the brochure, the house were to do allotted through lottery system by drawing lot among the eligible applicants, who got themselves registered through the prescribed format within the time fixed and paid required money withi. n time. In the instant case in MIG scheme, 111 houses were available but the number of applications were less including the respondents. Only 8 persons had filed suits in the years 1981/1982. There should have been no difficulty, in allotting fhe houses and delivering the possession to the respondents immediately <? n their complet. ion in 1980. In that event, the payment of interest on loan said to have been taken by the authority would not have arisen. It can,not also be ignored that the respondents were/are mostly salaried employees having monthly. inco! Ile of Rs. 601-1500. They must also have adjusted. and arranged their finances and affairs to make payment towards the houses.

It may also be kept in mind that the allottees were expected to pay the remaining amount after, initial deposit and first installment, in 48 jnstallments. Even having regard to the payment of money in installments, the estimated cost which was fixed at Rs. 48,000 with a clear and express understanding that increase KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J. ] 387 in the cost of the house could be up to I0% of the cost of the house. In the brochure, it is also mentioned that the price of the house~ mentioned is totally approximate and that the final price of the houses would be determined by the Vice Chairman, KDA, on the completion ofthe houses. Prices of the houses in these cases were determined as on 24. 12. 1994 as against the express clause that the determination ofthe final price shall be as on the date of completion of the construction of the houses i. e. in the year 1980.

As can be seen from the prescribed form ofai;plication and rules for payment the increase ofthe cost ofthe house can be up to 10%. Further it is clear from the prescribed form of application as filled by the respondents that the estimated cost of the house is Rs. 48,000 which could exceed up to 10%. The argument advanced on behalf of the appellant to the effect that the Vice Chairman has power to determine the prices ofthe houses and the price determined is binding on the respondents, runs contrary to brochure. Hence it cannot be accepted. Further for no fault of the respondents they cannot be penalized to pay the cost ofconstruction as detenni~ed on 24. 12. 1994 when the hous. es were ready in 1980. As can be seen from the impugned oraer, the High Court has found thus :- "It was undesirable conduct of the authority which gave rise to the civil litigation.

There were no restraints and constraints for the respondents in drawing the lottery and making the allotments to the genuine applicants even during the pendency ofthe civil suit and appeal before the District Judge. There is nothing in the counter affidavit to demonstrate that the respondents were under legal obligation to refuse the allotment ofthe houses to the persons or make delay in allotment of the houses to them. So in absence of a reasonable and sufficient justification preventing the respondents to make allotment in 1979, we feel that the respondents should be blamed for delay in. making the allotment. " The High Court has further observed : "It may be mentioned that the petitioners deposited the installments under the hope and trust that they will get the houses within the time schedule advertised at the initial. stage. Much time is elapsed between the registration of the applications for aliotment of the houses and actual construction and delivery of possession thereafter.

It is worth mentioning that the petitioners might be living in the rented house since 1979 and they might have managed their financial position in such a manner that after the deposit of the installments they will get the house of their own and thereafter they will be·free- from· payment of house rent and then they wiII be shifted from the rented ·house to the allotted house, but. on account of inordinate delay in. delivery of possession of allotted house;. their financial calculation and expectation stands frustrated causing. various types offinancial loss to them. Ori the other hand, once th~ authorities made-'Offers-and the same were accepted,by the allottees, with. the legitimate -exception, the statutory obligation cast upon the authorities to complete the same within the time schedule mentioned in the offer and if they fail to discharge the D. :. same, they should be held responsible for it and not the petitioners.

" The High Court finally concluded that delay in allotting and in delivering the possession of the houses to the respondents was caused due to the lapse on the part of the appellant, and, therefore, in the fairness of things, the KDA should not be allowed to determine unjust and. unfair cost · of the houses in an arbitrary manner. We have no good reason·to take a different view in the light of what is stated above. We have to note ·one more submission made on behalf of the appellanLthat the appellant works on no loss and no profit basis and it has raised ,huge . loan under. the HUDCO scheme for construction of houses and iLhas to . pay heavy interest on the amount of loan raised. The appellant neither urged nor laid any foundation for this argument before G; the High Court. No,details and. particulars were given·as to the amount of loan raised and the period for which interest has been paid in respect of the houses constructed which are to be allotted to the respondents.

, Further the final price ofthe houses had to be determined on the date of their completion. As found, there was delay on account of the appellant KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J. ) 389 and ifthat occasioned payment of interest, the respondents cannot be held responsible, having regard to the terms and conditions contained in the brochure. This apart, no justifiable case is made out for escalation of price of the houses in these cases, to say that the appellant could enhance the prices for the unforeseen or compelling reasons beyond control of appellants even as against the terms and conditions contained in the brochure. The learned counsel for the appellant cited two decisions in Delhi Development Authority v. Pushpendra Kumar Jain, [1994] Supp. 3 SCC 494 and Prashant Kumar Shahi v. Ghaziabad Development Authority, · [2000] 4 SCC 120, in support of his submissions.

In our view both the decisions do not help the appellant when we look at the facts ofthose cases and the views expressed therein. In the case ofDelhi Development Authority (supra) the facts were that Delhi Development Authority (DDA) published a scheme called "Registration Scheme of New Pattern, 1979 of intending purchasers of flats to be constructed by Delhi Development Authority" providing a procedure for allotment of flats. In the brochure, clause (11) provided schedule of payment. Clause (14) was to the effect that "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 of lay-out, cost of construction etc. ". The Court took notice that there were always more applicants than the number of flats available. The DDA had been adopting the method of draw of lots among the registered applicants to select the allottees.

The writ petition was filed by one of the allottees because between the date on which lots were drawn and the date on which the allotment was communicated to the respondent, the land rates were revised by the DDA by the circular dated 6. 12. 1990, as the_re has been substantial enhancement of land rates in the region of about 50 to 70%. Since the allotment was made ot allottee on January 9/13, 1991, he was called upon to remit the amount on the basis of revised land rates as aforesaid. The Division Bench of the High Court accepted the plea of the allottee writ petitioner. This Court, allowing the appeal filed by the ODA, found fault with two reasons given by the High Court:(l) Though the draw was held on 12. 10. 1990, the allotment-cumdemand letter was issued to the respondent only on January 9/13, 199\.

This delay was the result of inefficiency of the DDA, and (2) as the issue of allotment-cum-demand letter was delayed in the office of DDA, it cannot charge the revised land rates to the respondent inasmuch as the respondent became entitled to get the flat on 12. l0. 1990; the revision of land rates subsequent to the draw of lots cannot effect the respondent. This Court held that there was no legal basis for holding that the respondent obtained the vested right to allotment on the draw of lots as the system of drawing of lots was resorted to with a view to identify the allottee; it was not the allotment by itself. Mere identification or selection of the allottee does not clothe the person selected with a legal right to allotment at the price prevailing on the date of draw of lots. The scheme did not say so either expressly or by necessary implication. On the contrary clause (14) made provision for modification or revision of cost of construction, etc.

On facts it was also found that there was no unreasonable delay or inefficiency on the part of the DDA. Further, the validity or justification ofthe revision ofland rates by circular dated 6. 12. 1990 was not questioned in the writ petition. But in the present case the facts are entirely different. On fa~ts it is found that there has been unreasonable and unjustified delay on the part of the appellant in allotting and delivering the possession of the houses. The clause in regard to determination of price is not similar to clause (I4) in the aforementioned case of DDA. The cost of escalation could not exceed l0% of the tentative cost. The cost of construction of house in these cases on hand was to be determined as on the date of the completion of the construction of the house and not on the date of delivering possession of the house.

Unlike in the case of DDA it was n•)t the case of revision of land rates alone, that too in the absence of any circular indicating revision of cost of land before allotment or delivery of. possession of houses. The case ofPrashant Kumar Shahi, aforementioned, is also ofno help to the appellant. It supports the case of the respondents. This Court held that if the authority is found to be re~ponsible for the delay in delivery of the possession ofthe plots in terms ofthe agreement arrived at or acc~rding to the assurance given in the brochure~ the allottee cannot be burdened with the interest on the balance amount not paid by him. But on the facts of that case fault was found with the allottee in reagard to the delay in payment. As already recorded above, in these appeals, with which we are concerned, delay was on account of the appellant. authority itself. KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.

] 391 The learned counsel for the respondents in support ofhis submissions cited the decision of this Court in Indore Development Authority v. Sadhana Agarwal (Smt) and Others. , [1995) 3 SCC l. In the facts and circumstances of that case having regard to the reasons for the increase in the cost no interference was called for by the High Court. Further, the High Court was justified in saying that in such circumstances, the authority owed a duty to explain and satisfy the court, the reasons for such high escalation. The High Court has to be satisfied on the materials on record that the authority has not acted in an arbitrary or erratic manner. In the said decision reference is made to two earlier decisions of this Court including the case· of DDA aforementioned. In paragraph 9 it is stated, thus :- "9. This Court in the case of Bareilly Development Authority v.

Ajai Pal Singh, [1989) 2 SCC 116, had to deal with a similar situation in connection with the Bareilly development Authority which had undertaken construction of dwelling units for people belonging to different income groups styled as "Lower Income Group", "Middle Income Group", "Higher Income Group" and the "Economically Weaker Sections". The respondents to the said appeal had registered themselves for allotment of the flats in accordance with the tenns and conditions contained in the brochure' issued by the Authority. Subsequently, the respondents of that appeal received notices. for the Authority intimating the revised cost of the houses/flats and the monthly installment rates which were almost double the cost and rate ofinstallments initially stated in the General Information Table.

But taking all facts and circumstances into consideration, this Court said that it cannot be held that there was a misstatement or incorrect statement or any fraudulent concealment, in the brochure published by the Authority. It was also said that the respondents cannot be heard to say that the Autharity had arbitrarily and unreasonably changed the tenns and conditions of the brochure to the prejudice of the respondents. In that connection, it was pointed out that the most of the respondents had accepted the changed and varied tenns. Thereafter they were not justified in seeking any direction from the Court to allot such flats on the original terms and conditions. Recently, the same question has been examined in the case of Delhi Development Authority v. Puspendra Kumar Jain. In respect of hike in the price of the flats, it was said : (SCC p.

497, Para 8) "Mere identification or seledion of the allottee does not clothe the person selected with a legal right to allotment at the price prevailing on the date of draw of lots. The scheme evolved by the appellant does not say so either expressly or by necessary implication. On the . contrary, clause (14) thereof says ·that 'the estimated, prices mentioned in the brochure are illustrative and are subject to revisions/modification depending upon the exigencies of lay out, cost of construction etc. '. " •Although this Court has from time to time, taking the special facts ,and circumstances of cases in question, has upheld the excess charged. by the . development authorities over the cost initially announced as·estimated cost, but it should not be understood that this Court has· held· that such development authorities hav~ absolute right-to hike the cost of flats, initially announced as , approximate-or ·estimated cost for such flats.

It is well known that · persons belonging ·to· middle and lower income groups, before registering themselves for such flats, have to take their financial capacity into consideration and in some cases it results in great hardship when the· development authorities announce an estimated ·or approximate cost andideliver the same at twice or thrice of the said· amount. The· final cost should be proportionate to the approximate·or estimated cost. mtmtioned in the offers or agree- . ments. With the high rate of inflation, escalation of the prices of construction materials, and labour charges, if the scheme is not · ready within•the time-frame, then-it is not possible to deliver the flats or houses in question at the cos~ so announced. It will be advisable that·before offering the flats to the public such development authorities should fix the estimated cost ofthe flats taking into consideration'the·escalation ofthe cost during the period the scheme is to be completed.

In the instant case the estimated cost for the LIO flat was given outat Rs. 45,000. But by the impugned communication, the appellant. informed the respondents that the actual cost of the flat shall be Rs. 1;16,000 i. e. the escalation is KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J. ] 393 more than 100%. The High Court was justified in saying that in such circumstances, the Authority owed a duty to explain and to satisfy the Court, the reasons for such high escalation. We may add that this does not mean that the High Court in such disputes, while exercising the writ jurisdiction, has to examine every detail of the construction with reference to the cost incurred. The High Court had to be satisfied on the materials on record that the Authority has not acted in an arbitrary or erratic manner.

" We are of the view that each case is to be decided in the facts and circumstances of the case in·the light of the scheme published/framed and the terms and conditions mentioned in the Brochure and/or in the prescribed form ofapplication in the matter ofescalation/determination ofcost of house/flat. However, cases where there is limit for fixing the escalation ofcost, normally the price ofhouse or flat cannot exceed the limits so fixed. The determination of cost of house/flat or escalation of cost cannot be arbitrary or erratic. The authority has to broadly satisfy by placing material on record to justify the escalation ofcost ofa house/flat. Whether the delay was caused by the allottee or the authority itself is also a factor which has bearing in determination of the. cost of house/flat. The unforeseen cause or the reason beyond control ofthe authority in a given case may be another facto. - to be kept in view.

We may also notice that is these cases the tentative cost of houses was fixed at Rs. 48,000 but final cost was detennining at Rs. 2,08,000. This increase is not mere escalation but it is a multiplication by almost four and half time, although escalation could not exceed I0% as is evident from the contents of the Brochure read with prescribed form of application for allotment of house itself. Contentions of the KDA ruh contrary to the contents ofits own Brochure on which the respondents acted adjusting their financial affairs understanding that the cost of the houses would be fixed in terms of brochure and that too not exceeding I0% of the estimated cost fixed initially.

As to the complaint that the appellant having filed review petition before the High Court seeking review ofthe impugned judgment could not prosecute parallel remedy by filing :::ILP in this Court, the learned counsel for the appellant was not in a position to say as to what happened to the review petition filed in the High Court. In our view it may be unnecessary to say anything ·fu11her on this aspect in the view we have taken and are A disposing of these appeals themselves on merits. As regards the prayer made by the respondents in I. As. 7-8 we do not think it necessary to probe fu1ther in these proceedings. Hence no orders are required to be passed in these I. As. B Thus having regard to the facts found and in view of what is stated above, we cannot find fault with the conclusions arrived at by the High Court in the impugned judgment. Hence, finding no merit iP these appeals, they are dismissed but with no order as to costs. R. K. S. Appeals dismissed.