Jain Medical Institute vs Delhi Development Authority And ...
2006 Latest Caselaw 601 Del

JUDGMENT

Pradeep Nandrajog, J.

Page 1344

1. Challenge is to letters dated 25.5.1992 and 2.9.1992 written by DDA to the petitioner. By and under letter dated 25.5.1992 disposable cost of the flat allotted to the petitioner has been charged at Rs. 16,84,927/-. Vide letter dated 2.9.1992, after giving benefit of the amounts received, DDA has demanded Rs. 7,15,194.30 from the petitioner.

2. DDA notified its first Self Financing Scheme For Commercial Flats somewhere in the year 1984. It was indicated that commercial buildings would be constructed in various localities. Applications were invited for being registered under the Scheme. Inter alia, brochures published by DDA indicated to the prospective applicants as under :

Page 1345

The object of the Scheme is to provide commercial flats to individuals, firms, companies etc. in the commercial buildings to be constructed by DDA in its commercial centres through financial participation of the intending purchasers.?

(underline added).

3. Mode of allocation indicated was as under :

Mode of allocation :

The intending purchaser will indicate the name of the building and the type of the flat for which he wants to apply as per information given in Annexure A-I to A-IV. In case the number of applications for any particular type of flat in any particular building happens to be more than the number of flats available, the allotment will be made by draw of lots. The floor of the building on which allotment has to be made will also be determined by draw of lots.

Each registrant has an option to avail of three preferences. These preferences may be in the same District Centre/Building or in different District Centre/Building.

The second and third preference would be given a chance only if the units have not been exhausted among those who have given first preference for such units.

For second and third preferences, no separate registration/earnest money is required.?

4. Mode of payment indicated was as under :

Mode of payment :

The following schedule of payment has been prescribed:

a) Individuals/firms/companies etc. applying under the scheme would have to deposit Rs. 20,000/- in any of the branches or respective banks mentioned above as earnest money Along with the application for registration.

b) 25% (including the earnest money deposited with the application) as initial deposit on allocation of the flat;

c) 15% as second Installment after six months of the date of allocation;

d) 15% as third Installment after six months of the date of second Installment;

e) 15% as fourth Installment after six months of the date of third Installment;

f) 15% as fifth Installment after six months of the date of fourt Installment;

g) 15% as sixth Installment after six months of the date of fifth Installment.

Delayed payments will attract interest @ 18% p.a. in addition to the allocation being liable to be cancelled on account of default in payment.

Page 1346

In case the construction is completed earlier, the DDA reserves the right to recover balance payments earlier.

Possession shall be given within six months of the last Installment failing which interest @ 12% p.a. will be paid by the Authority on the amount deposited by the Allottee for the period beyond six months till the date of handing over possession.?

5. Additionally, following was brought to the notice of the registrants. Likely changes in designs and costs:

The design of flats, their areas etc. are liable to change on finalisation of drawing or during construction for which no objections will be entertained. Consequently increase or decease in the cost on the basis of covered area (including proportionate areas of common portions) will be adjusted after payment of the last Installment.

6. Petitioner applied under the Scheme and gave preferences. Taking note of the preference of the petitioner and other persons and including name of the petitioner at a draw of lots held on 5.9.1984, since name of the petitioner was successfully drawn for a building to be constructed at Madam Bhikaji Cama Place, vide letter dated 4.1.1985, petitioner was informed that a flat admeasuring 106 square meters was allocated to it at Bhikaji Cama Place. Indicating the cost of the flat, petitioner was informed that the total estimated cost was Rs. 9,64,131.50.

7. Date of the 5 installments was indicated. Qua the 6th installment, it was indicated as under :

The 6th and final Installment will be of 15% cost of the flat. This may however be added that there may be variation in the cost of flat occasioned by the variation in the area of the flat. The final calculation will be made on the basis of actual construction. The due adjustment would be made in this Installment.

8. Construction progressed, albeit slowly. By October, 1991 it was completed. A final allotment was made to the petitioner on 29.10.1995. Specific flat was allotted to the petitioner being flat No.405, 4th floor. The total plinth area of the flat was 137.63 square meters. A final demand was raised upon the petitioner calling upon it to pay the balance amount after adjusting the amounts which were paid by the petitioner. Final disposal cost of the flat intimated was Rs. 16,84,927/-.

9. Petitioner entered into a correspondence with DDA. On 22.11.1991, petitioner wrote that save and except increasing the price in relation to the excess covered area of the flat, DDA could not enhance the price. Petitioner wrote that at the stage of allocation on 4.1.1985, a flat admeasuring 106 square meters was allotted at a price of Rs. 9,64,131.50. Petitioner wrote that for the increased area i.e. 137.63 square meters, DDA can at best charge Rs, 12,51,824.60. The said sum was arrived at by multiplying Rs. 9,64,131.50 with 137.63 and dividing the same by 106.

10. DDA did not relent. Petitioner kept on writing letters. Demand was reiterated by DDA vide letter dated 25.5.1992. Additionally, interest was Page 1347 also demanded for the reason as per letter dated 29.10.1991 balance amount payable had to be paid within one month.

11. Petitioner kept on writing letters. DDA stuck to its stand. On 2.9.1992, DDA reduced the price and after giving adjustment of the amounts received, demanded Rs. 7,15,194.30 as the balance amount payable.

12. At that stage, present petition was filed praying that letters dated 25.5.1992 and 2.9.1992 be quashed.

13. From the pleadings of the petitioner, and indeed, these were the points raised during arguments, case of the petitioner is:

a. As per the brochure, under the caption? Likely Changes in Designs and Costs? it was permissible to increase the price of the flat only in relation to the covered area. For the covered area of 106 square meters, at the stage of allocation, on 4.1.1985, price charged was Rs. 9,64,131.50. Since the flat which was finally allotted admeasured 137.63 square meters, proportionate increase relateable to the increase in plinth area alone was recoverable.

b. Allocation letter dated 4.1.1988 clearly indicated that variation in cost of the flat could be occasioned by variation in the area of the flat. Thus, even the allocation letter re-enforced what was held out under the brochure and therefore save and except increasing the cost in relation to the increased covered area, no other increase was permissible.

14. Stand projected by DDA, and as indeed, urged by Sh. C. Mohan Rao, learned Counsel for DDA is that the brochure clearly indicated that the scheme was a Self Financing Scheme and that the commercial centre would be constructed by DDA through financial participation of the intending purchasers. Meaning thereby, entire cost of the project had to be shared by the allotees. That even at the stage of allocation, vide letter dated 4.1.1985, it was clearly indicated that the cost indicated in sum of Rs. 9,64,131.50 was estimated. It is pleaded and a submission made thereon, that the note relied upon in the allocation letter and the terms and conditions of allotment referred to in the brochure have to be construed not as statutes but in harmony along with the other stipulations, terms and conditions, most fundamental being that the scheme was to be financed through the financial participation of the intending purchasers.

15. It was brought out during arguments that land component, pro-rated per square meter was as per land rates in vogue in the year 1984. Land rate charged per square meter of constructed area was Rs. 5,723/-. Cost of construction per square meter was Rs. 6,627/-. Total cost per square meter was Rs. 5,723/- + Rs. 6,627/- i.e. Rs. 12,350/-. Total disposable cost came to Rs. 12,350/- x 137.63 = Rs. 16,99,731/- Rebate of Rs. 10 per square feet was granted. The disposable cost was, therefore, reduced by Rs. 14,807/- in all, Rs. 16,84,927/- was demanded.

16. File of DDA which was produced at the hearing shows that as per note dated 20.8.1990 prepared by the Accounts Officer, cost of construction was determined as under:

i) Cost of construction

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The Ex.En. had intimated the total/expenditure of Rs. 8,19,31,228/-. From this, a sum of Rs. 75 lacs on account of 150 car space @ Rs. 50,000/- per car space has been reduced. The total gross area of shopping floors and SFS commercial offices from 2nd floor to 10th floor is 14491.52 sq.mtr. After spreading over above cost on this floor area, the per sq.mtr. rate works out to Rs. 5136.00. On this cost of construction, overheads such as Deptt. Charges, Admn. Charges and Mark Up @ 15% , 2% and 10% have been added. Thus the cost of construction per sq.mtr. Comes to Rs. 6627/-.

17. As noted above, cost of land is as per rates notified in the year 1984.

18. A contract between the parties has not to be construed like a statute. Terms of a contract have not to be read in isolation. They have to be read meaningfully and in light of other terms of the contract. Besides, fundamental terms of the contract have to be identified and distinguished from the ancillary terms of a contract; the core area of a contract has to be identified. Needless to state, the fundamentals of a contract have to be preserved while interpreting the ancillary terms.

19. A perusal of the scheme, which needless to state is an invitation to offer, informed that the flats to be constructed would be financed through the financial participation of the intending purchasers. Indeed, the scheme was a Self Financing Scheme. Meaning thereby, that the entire cost of construction of the flats had to be borne by the allottees. The words in the scheme under the caption? Likely Changes in Designs and Costs? cannot be interpreted in a pedantic manner as was sought to be urged by Sh. Naresh Thanai, learned Counsel for petitioner. It has to be noted that DDA did not indicate in the brochure inviting offers that a firm price was to be charged. As is to be noted from the brochure, DDA clearly indicated that the entire cost has to be borne by allottee.

20. Having indicated no firm price in the brochure, even on 4.1.1985 when allocation was made, it was clearly indicated that the price indicated was the estimated cost of the flat. Further, in the note contained in allocation letter dated 4.1.1985 it was clearly stipulated that the final calculation will be made on the basis of actual construction.

21. The note has not to be construed as a statute. The note, which is an integral part of an allocation letter has to be read in context of payment terms stipulated in the allocation letter wherein it was clearly mentioned that the cost indicated was an estimated cost. This in turn could be linked to the brochure wherein it was clearly brought to the notice of the intending applicants that the purchasers would have to finance the total cost of the project.

22. Issue of costing and price to be charged by DDA has been a subject matter of perennial litigation in this Court. The issue was conclusively decided by a Full Bench of this Court in the decision reported as 1995 (1) AD (Delhi) 725 Smt. Sheelawanti v. DDA. The said decision was affirmed by the Supreme Court in the decision reported as AIR 2002 Supreme Court DDA v. Ashok Kumar Behal. Latest pronouncement of this Court on the issue is the Full Page 1349 Bench decision of this Court rendered on 22.7.2005 in LPA No. 844/03 Smt. Renu Bali v. DDA. Full Bench noted that various components go into the costing exercise. Broadly, these would be cost of land, actual cost of construction of a building, community facility charges, departmental charges and administrative charges to supervise the construction. Ratio of all afore-noted decisions is that where it is clearly indicated to an applicant at the allocation stage that the price indicated was tentative, no finality attaches to the price. DDA is permitted to charge the actual cost of construction determined on the parameter afore-noted and the same would have to be paid by the allotee.

23. Challenge fails. The rule is discharged.

24. The writ petition is dismissed.

25. No costs.