Association Of Self-Employed ... vs Lt. Governor Of Delhi And Anr.
2000 Latest Caselaw 790 Del

JUDGMENT

D.K. Jain, J.

1. By this petition under Article 226 of the Constitution of India, the petitioners, numbering 22, assail price of sheds demanded from them by the Delhi State Industrial Development Corporation Ltd. (DSIDC in short). The first petitioner is the association of self-employed entrepreneurs and the remaining petitioners claim to be allottees of industrial sheds in New Jhilmil Industrial Complex, G.T. Road, Shahdara, Delhi.

2. At the outset, it is pointed out by learned counsel for the DSIDC that though initially there were 22 petitioners but during the pendency of the petition, some of the petitioners have made full payment in terms of the decision of this Court, dated 16th January, (996 in the case of Pushp Lata v. DSIDC, 1996(1) AD Delhi 390, without any demur, some of the petitioners had also filed separate petitions, which have since been dismissed, three of the petitioners namely, Petitioners No. 11, 16 and 22 have already sold off their sheds and name of petitioner No. 5 has already been deleted from the array of parties by virtue of order dated 26th March, 1990. This judgment will, therefore, govern the cases of only those petitioners, who do not fall in any of the said categories.

3. The sheds in question, constructed during the period 1973-74, under a scheme to provide gainful and productive self-employment to unemployed engineering degree and diploma holders, were originally allotted on monthly lease basis. However, since inception, the said arrangement did not work inasmuch as there were consistent defaults in payment of rent by the allottees and, therefore, on the request of the entrepreneurs, a scheme of transfer of ownership of the sheds to the allottees on hire-purchase basis was floated some time in March, 1977. but despite requests to pay and threats of cancellation of allotment, by means of various letters, by and large, the entrepreneurs did not pay, either the rent or the hire purchase instalments, but continued to retain and enjoy the sheds. It would appear that DSIDC took a decision to transfer the sheds to the allottees on payment of a particular amount towards its price. Accordingly, various meetings are said to have taken place between the officials of the DSIDC and the representatives of the allottees in the year 1983 with regard to the costing of the sheds and ultimately the final price of sheds was communicated to the allottees some time in February, 1984. According to the petitioners, in February 1984, the association objected to the working of the price of the sheds and claim for interest, inter alia, pointing out that the total structural area taken into consideration for the purpose of costing had been taken more by 6225 Sq.Ft. by including the land where no construction existed; the cost of the open area, meant for common facilities, except the pump house, should not have been included in the vacant land as worked out in costing of the land; the cost of construction in the year 1972-73 was only Rs. 25/- per Sq.Ft. whereas DSIDC had worked out the same at Rs. 50/- per Sq.Ft.; and the petitioners had never agreed to pay the entire amount of interest which the DSIDC had to pay to the banks or other financial institutions. It is pleaded that the DSIDC had initiated the scheme for allotment of the sheds at the instance of the Government of India, which had placed certain lands at its disposal, for assistance to and benefit of unemployed technical and other educated persons and were to be given to the entrepreneurs on no-profit no-loss basis but the DSIDC was trying to earn profits by selling the sheds at a higher price :

4. It seems that the war of letters between the allottees and the DSIDC continued for a number of years and all this while, i.e. 1972 to 1987, none of the petitioners made full payments, either in terms of original lease deeds or in terms of June, 1987 offer offering transfer of rights in sheds on cash down or hire purchase basis. Only meagre amounts were paid by them. Fearing action for dispossession on account of default in payments, the present petition was filed.

5. The petition is resisted by the DSIDC, inter alia, on the grounds that the petitioners are in default not only in the payment of rent/instalments, but have also violated the terms and conditions of allotment with regard lo the nature of business etc. which they were supposed to conduct in the premises ; that the cost of construction of the sheds has been worked out strictly on no-profit no-loss basis as per the books of accounts regularly maintained in the normal course of its business; the price of sheds includes only the cost of construction (based on 72 items as specified in the CPWD Manual), the cost of land and capitalisation expenses besides interest on the loans raised by the Corporation from the banks and other financial institutions for undertaking construction of sheds for which it had to mortgage its properties and for default in payments on the part of the allottees, the Corporation could not re-pay its loans as scheduled, escalating the element of interest which had to be included in the cost of construction. The DSIDC claims that the petitioners having challenged costing of the sheds without cause and declined the offer for transfer of sheds on hire-purchase basis made to them in the year 1987, have repudiated the offer made and are thus not entitled to transfer of sheds in their favour as they cannot be permitted to approbate and reprobate at the same time. It is alleged that though the petitioners kept on enjoying the fruits and benefits of the sheds in question for a number of years without fulfillling any of the obligations cast on them by virtue of the licence deeds or even otherwise, are not entitled to any relief. It is asserted that all the points raised by the petitioners with regard to the accounts, area etc. touching upon the issue of pricing of sheds have already been considered and decided against the petitioners in the case of Pushp Lata (supra), which is final and binding on all the allottees of sheds.

6. We have heard Ms. C.M. Chopra, for the petitioners, and Ms. Gita Mittal for the DSIDC

7. The pricing of the sheds is challenged as being illegal and arbitrary mainly on the grounds that ; (i) the cost of a pan of the land not used for construction of sheds has been wrongly included in the total cost of the land, (ii) the cost of construction has been taken at a higher rate, and (iii) the rate of interest charged from the allottees on the loan taken by the DSIDC for construction of the sheds is more than what the DSIDC has actually paid to the banks and other financial institutions. On the contrary, the DSIDC claims that the mechanism of price fixation being entirely in the realm of executive function and no case of arbitrariness having been made out, it is not a case for interference by this Court in the exercise of its writ jurisdiction. It is also urged by Ms. Gita Mittal, learned counsel for the DSIDC, that the issues raised in the petition stand concluded against the petitioners in DSIDC v. Chandra Prakash and Anr., 1993 (4) Delhi Lawyer 418.

8. The scope of judicial review in cases involving costing and fixation of price of property is very much limited. Ordinarily, the power of judicial review should not be exercised to decide disputed questions of fact, more so when these are purely theoretical or for which no judicially manageable standards are available. The question of costing of DDA flats came up for consideration before a Full Bench of this Court, to which one of us (D.K. Jain, J.) was a party, in Smt. Sheelwanti and Anr. v. DDA and Anr., and taking note of the decisions of the Supreme Court in Shri Sita Ram Sugar Company Limited v. Union of India, 1990 (3) SCC 233, Gupta Sugar Works v. State of UP, and Bareilly Development Authority v. Ajay Pal Singh, it was observed that a public body entering in the realm of contract acts merely in its executive capacity and, thereafter, the relations are no longer governed by the constitutional provisions but by contract; what has to be seen and examined by the writ court is whether the price demanded is whimsical or arbitrary; the Court, having no expertise, knowledge or wherewithal to evaluate the cost aspect, is not concerned with the correctness or otherwise of the price fixed.

9. Reference in this connection may also be made to Chandra Prakash's case (supra). In that case fixation of price of similar sheds by the DSIDC was challenged unsuccessfully on various legal pleas, including that of estoppel. Rejecting the contentions of the allottees that they had been assured that the sheds will be transferred to the entrepreneurs on hire purchase basis and that price will be determined after proper evaluation by a body which will comprise government representatives and representatives of the entrepreneurs, speaking for the Bench, B.N. Kirpal, J. (as his Lordship then was) observed that the DSIDC being a commercial organisation, the agreements it had entered with the allottees were purely commercial in nature and that being so it was for the DSIDC to fix the price and for the allottees, either to accept or to reject the same and the DSIDC could not be compelled by the allottees to refix the price to the detriment of DSIDC. It will be useful to notice the following observations by the Court:

"We, therefore, do not find any legal justification for the challenge by the proposed purchaser to the price fixed by the proposed seller. At the cost of repetition it is observed that the transaction between the petitioners and the respondent is purely commercial in nature and has to be examined in its proper perspective. Commercially speaking it is for the seller to fix the price, and for the purchaser, either to accept or to reject the same. The seller cannot be compelled by the purchaser to re-fix the price to its detriment. Of course negotiations between the parties had taken place even with regard to determination of price but when the price has been fixed and a firm offer made there is no legal justification for claiming any right, in a Court of law, to the lowering of the price. In other words it would not be proper for the Court to direct the seller to decrease the price unless of course the Court comes to the conclusion that the action of the seller is arbitrary. There is no reason for us to come to such a conclusion in the present case, even assuming that such a principle can be invoked in a transaction of commercial nature."

10. While noting that the sheds were admittedly constructed by the DSIDC after obtaining loans from the banks and other financial institutions; which in turn being purely a commercial transaction, the DSIDC was under an obligation to pay interest on the loans taken by it, the Court held that the said interest element had to be taken into consideration while working out the actual cost of sheds.

11. Keeping in view the limited scope of judicial review in such like matters and applying the afore noted broad principles on the facts at hand, we are unable to hold that the DSIDC has acted arbitrarily in fixing the price of sheds. From the material disclosed, we feel that the price has been fixed on the basis of relevant and cogent material, namely, the CPWD rates. It is not for this Court to go into the minute details of working of the price of the sheds. There is no reason to disbelieve the stand of the DSIDC that the cost of the sheds has been worked out on no-profit no-loss basis and the facts and figures are based on the books of accounts regularly maintained by it. As pointed out by learned counsel for the DSIDC that on account of non-payment of regular instalments either under the initial arrangement or under the hire purchase agreement, the DSIDC was not in a position to discharge its debts towards banks and other financial institutions on time, with the result that the interest payable on the loans accumulated. DSIDC was obliged to pay the same. That being so, we arc of the view that the interest element taken into account while working out cost of the sheds, cannot be said to be whimsical or arbitrary.

12. For the foregoing reasons, we do not find any merit in the petition. The same is accordingly dismissed with costs quantified at Rs. 5,000/-