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PETITIONER: DELHI DEVELOPMENT AUTHERITY

       Vs.

RESPONDENT: KANWAR KUMAR MEHTA & ORS.

DATE OF JUDGMENT:       16/09/1996

BENCH: K. RAMASWAMY, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                             WITH             CIVIL APPEAL NOS. 13054-75 OF 1996. /2589/96 (@ SLP(C) Nos.253-55/96/575-78/96,300/96,/933/96 928/96, 929/96, 930/96 931/96, 932/96, /934/96, 935/96,  936/96, 938/96,937/96, 945/96 946/96, xxx)                          O R D E R      Delay condoned.      Leave granted.      We have heard learned counsel of both sides.      The question  of law  that arises  for consideration in these appeals  is; whether  the  High  Court  was  right  in directing calculation  of interest  @ 7%  of the  escalation charges on the principle of equity?      The facts  of the case are not in dispute. On March 27, 1991 draw  of plots  was made for allotment of 5000 plots in Sectors 23  and 24  of Rohini  Scheme in  Delhi. Between 6th April, 1991  and March  27,  1991,  around  3000  orders  of allotment came to be issued. Only 2000 persons are yet to be issued of  the allotment letters. It is settled law that the rate of plot is as is prevaling on the date of communication of the allotment letter. Before the letters of allotment was communicated to  the rest  of the  successful applicant, the owners of  the lands  acquired under the notification issued under Section  4(1), had  approached the  High Court and had stay of  further proceedings.  Consequently, the issuance of the letters of allotment was stopped. Subsequently, the stay was vacated  on August  4, 1992  and it  is  stated  in  the counteraffidavit that  the owners  had approached this Court by way  of appeal  and in  September  1992  this  Court  had dismissed the special leave petitions. In the meanwhile, the Government of  India have re-determined the cost of the land for allotment  of the  acquired land  for the  year  1992-94 effective from April 1, 1993 to March 31, 1994 at Rs.2675.29 per  square   yard.  The   DDA  evolved   the  principle  of calculating the cost of development charges at par with cost of living  index rate  which admittedly worked out to 16.62% per annum.  On that basis it had worked out the cost of plot at the  rate of  Rs.1579.17 per  square yard.  On the  basis thereof, they  recalculated the cost of allotment and issued letters of  allotment to  the respondents.  The  respondents

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came to challenge this order in the High Court. The impugned judgment made  on August  11, 1995  in C.W.P. No. 196/94 was declared invalid.  The Division  Bench of the High Court has ultimately held that when the DDA seeks equity, it must also do equity.  When the  claimants have  been directed  to bear interest only  at the  rate of   per  annum  on  the  amount deposited  by   them  towards   advance  payment   deposited adjustable of  the successful  bidders and refund is made to the unsuccessful  applicants with the same rate of interest, the DDA  should equally charge the escalation charges at the rate of  7% per  annum. Therefore, directions to deposit the cots of  plot at  16.62% per  annum as  escalation  cost  is unjust in law.      Mr. Arun  Jaitley, learned senior counsel appearing for DDA, has  contended that  the DDA, with a view to do justice to the  claimants, have  not demanded  the rate  of  charges prevailing as  on the date of allotment as determined by the Government of  India, namely, Rs.7675.29 per square yard and instead worked  out special  equity by enhancing the cost of escalation charges  at 16.62%  per annum  as per the cost of having index. The High Court was not justified in giving the direction to  charge the  escalation only  at the rate of 7% per annum.  We find  force in the contention. Though Shri M. Shekhar and  Shri Bimal  Roy Jad,  learned counsel appearing for the  respondents, have  contended that  the DDA  has not produced any material to show that the escalation cost would be at  the rate  of 16.2%  and that  there is no evidence to show that between the date of the stay by the High Court and the date  of the  demand, this  amount has been expended for developmental charges  by the DDA. That point was not raised before the  High Court,  the appellant  is not  entitled  to raise the contention. We find no force in the contention. It is the very basis on which the appellant has justified their demand in the High Court which was also accepted by the High Court, on the basis of which, it proceeded that due to grant of stay  by the  High  Court  the  escalation  charges  have increased  for   improvements  effected.  Consequently  they worked out  the  escalation  charges  applying  the  special equity namely,  the basis  of living  costs of  index  which admittedly was 16.2% per annum.      Under those  circumstances, we are of the view that the basis on which all parties have proceeded and the High Court has  accepted   was  that   the   escalation   charges   for improvements have  been worked  out at  16.2% per  annum, on that basis  re-calculation, came  to be  made and the market value was  determined at  the rate  of Rs.1579.17 per square yard. The  direction of  the High  Court, that  they have to pay, while  working out  equity at  7% is  not based  on any rational principle.  The High  Curt lost  sight of  the fact that the  appellant had  spent money  for development of the plots and  to meet  the cost demand in allotment letters was made at  reduced rate.  It  is  also  stated  that  the  two allottees were  in the  low priority  list in  1991 had same benefit of pre 1991. rates and the same be extended to the respondents. Though  this contention  was not  raised in the High Court,  nor the  High Court had advantage of it, we are of the  view. that  it has no legal foundation is a mistaken allotment  to  them  in  1991  is  no  ground  to  allot  to respondent at the rame rate.      The appellants  are, however,  directed to  charge  the rate  of  interest  at  7%  on  the  deposits  made  by  the respondents till  the date  of the letter of allotment. Time for payment  of the  amount at  the rate  of Rs.1579.17  per square yard  is extended for six months and the appellant is directed to deduct the difference of the rate of interest on

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the deposit  amount at 7% from the date of the original draw till the date of communication of the letters of allotment.      The appeals  are accordingly  allowed. The order of the High Court  is set  aside, but in the circumstances, without costs.