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CASE NO.: Appeal (civil)  6668-6698 of 2000

PETITIONER: Delhi Development Authority, N.D. & Anr.

RESPONDENT: Joint Action Committee,Allottee of SFS Flats & Ors.

DATE OF JUDGMENT: 13/12/2007

BENCH: S.B. Sinha & Harjit Singh Bedi

JUDGMENT: J U D G M E N T

AND CA NOS.6700-6732 OF 2000   WITH  

CIVIL APPEAL NOS. 6666, 6667 & 6733 OF 2000                                          AND          CIVIL APPEAL NOS. 5881, 5867, 5882, 5876 and 5870 OF 2007 [S.L.P. (C) NOS. 25385 OF 2005,  1003,  8033, 8262 & 13512 OF 2006]

S.B. SINHA, J :

1.      Leave granted in all the Special Leave Petitions. CIVIL APPEAL NOS.  6666, 6667, 6668-6698, 6799-6732 & 6733 of 2000  CIVIL APPEALS @ SLP (CIVIL) NOS. 25385 OF 2005, 1003, 8033 OF  2006 AND 13512 OF 2006 :   

2.      This batch of appeals arising out of a judgment and order dated  23.07.1999 passed by a Division Bench of the Delhi High Court, inter alia,   in Writ Petitions No. 793 of 1993 as also a judgment and order dated  22.07.2005 passed by a Full Bench of the Delhi High Court in Letters Patent  Appeal Nos. 844 of 2003 etc.  were heard together and are being disposed of  by this common judgment. FACTS : 3.      Delhi Development Authority (for short, \021the Authority) has been  constituted under the Delhi Development Act, 1957 (for short, \021the Act\022).  Indisputably, it develops different areas in the town of Delhi and constructs  houses for all groups of people.   4.      Principally it allocates flats under six different schemes viz : (i) Self  Financing Scheme (SFS); (ii) Higher Income Group Scheme (HIG Scheme);  (iii) Middle Income Group Scheme (MIG Scheme); (iv) Lower Income  Group Scheme (LIG Scheme), (v) Janata Scheme; and (vi) Expandable  Housing Scheme.   5.      The flats constructed and allocated under the SFS Scheme are distinct  and different from the other five schemes launched by the Authority.  We  shall advert to the said distinction a little later.   6.      Suffice, however, it to say that not only costs of such schemes are  calculated on different basis but the rights and stipulated liabilities  thereunder are also different.  Cost of flats vary from scheme to scheme.  Under one of the schemes, applications were invited by the Authority from  22.12.1992 to 11.01.1993.  7.      We may notice some of the provisions containing the terms and  conditions on the basis whereof such an offer was made. \0235.10 the details of the flats and tentative cost etc.  are available in  Annexure-B.  The cost of the flats  mentioned therein is tentative and subject to

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revision on account of escalation in the value of  land and cost of construction.  Please note that  there is a possibility of upward revision of the  tentative cost. 5.11    Those who are successful for a ready built  flat will be called upon to make the payment in  lump sum within 60 days.  Others who are  successful for a flat where the work is already in  progress will be asked to deposit within 30 days a  specified percentage anything upto 90% of the  estimated disposal price representing the  expenditure already made and the amount required  for construction of flats in next 3 to 4 months.   Applicants successful for new allocations are  asked to pay 25% the estimated cost of the flat by  way of 1st instalment payable within 30 days.  In  each of the case 60 days time is further given to  remit the amount with prescribed interest. 11.2    The demand-cum-allocation letters issued  will indicate the prescribed dates by which the  payments will be required to be made.  The  demand letter for final instalment for the flats in  progress and new allocations will be issued  separately and this may also include the possible  increase in the cost of the flat.  No separate letters  will be issued for any of the subsequent  instalments.  It will be obligatory on the part of the  allocatees to make the payments and deposit the  requisite documents before the due dates indicated.   In the event of default the allocation/allotment of  the flat in the scheme will be liable to be cancelled.   If submission of documents as demanded are  delayed, maintenance charges will be leviable  provided the delay in submission of documents is  regularized. 12.2    If the allotment of flat is cancelled (either on  the allottee\022s own request or due to the non- fulfilment of the terms and conditions of allocation  by the allottee) after the expiry of 1, 2, 3 and 4  months from the date of issue of demand-cum- allocation letter, interest calculated @ 12% p.a. for  the 1st month and 18% p.a. for the 2nd, 3rd and 4th  month on the amount demanded in the demand  letter shall be charged in addition to the amount of  penalty specified above. 14.1    The allottee shall be entitled to take delivery  of the possession only after he has completed all  the formalities, paid all dues and  furnished/executed all the documents as required  in the allotment-cum-demand letter of the Delhi  Development Authority.\024

8.      Appellants in the first batch of cases and the respondents in the second  batch (hereinafter referred to as \021the registrants\022) applied for allocation of  flats under the SFS Scheme.  The said scheme was floated in terms of  Item  No.112 of 1992.   For the said purpose, brochures are issued.  Those who  desired to have allocation of such flats were asked to opt therefor at three  different places.  Allocation of flats under the said Scheme is made upon  90% payment of the estimated costs.   However, allotment is made on draw  of specific number of flats.  Allocation of flats may be made in respect of  areas, floors and/or the pockets.  On receipt of the letter of demand-cum- allocation by the registrant, the schedule of payment commences.    Estimated cost for construction is calculated on the basis of the value of the  land and likely cost of constructions.   

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9.      The letter of demand-cum-allocation issued to successful registrants  contains a condition which may be noticed for the purpose of these cases and  read as under : \0234.  The amount demanded should be paid on or  before the due date mentioned in para 2 and 3  above.  Extension of time for making payment of  the amount demanded in column 7 of para 3 above  upto a maximum period of 90 days from the due  date is admissible.  An allottee need not apply for  extension but he will have to pay interest @ 12%  p.a. for the first month and @ 18% p.a. for the  subsequent period.  In case payment of the amount  asked for in the demand letter is not made within  90 days of the due date, the allotment shall stand  cancelled automatically.  However, cancellation  due to non-payment of first 4 instalments during  the stipulated period can be got restored on  payment of dues with interest along with  cancellation and restoration charges for each  cancellation due to non-payment, subject to  availability of the allocated flat.  The cancellation  due to non-payment of final instalment within 120  days of the date of issue (letter of the block date)  of the demand letter for 5th instalment shall not be  restored under any circumstances.\024       10.     It may be useful to notice some other clauses containing terms and  conditions of allocation, which are as under : \0231.  No separate demand letters will be issued for 2nd,  3rd and 4th instalments.  It will be obligatory on your part  to make the payment before the due date indicated at  page-1; failing which the allocation is liable to be  cancelled. 2.      The estimated cost of the flats as given in this  letter is provisional and subject to revision on the  completion of the flat.  Any price difference between the  estimated cost and the cost as it comes out on completion  as per costing formula then in vogue would have to be  paid along with the 5th and final instalment.  There would  be no review of the cost of the flat in the intermining  period.  Interest @ 7% on the amount deposited will be  payable for the period beyond 3= years to the date of  issue of possession letter if the construction of the houses  is not completed by then. 3.      The amount demanded should be paid on or before  the stipulated due date failing which the allotment shall  be liable to be cancelled without notice.  In case, due to  unavoidable reasons, the allottee is not able to make the  payment within the due time, then he must ensure that his  acceptance of the allotment reaches the Housing  Department before the due date of payment with a  request for extension.\024       11.     Registrants are said to have defaulted resulting in purported automatic  cancellation of their allotments.  Show cause notices were issued to them.   Some of them allegedly expressed their difficulties in regard thereto. Decisions impugned   12.     The Vice-Chairman of the appellant who is said to be delegated with  the power of the Authority to which reference would be made hereinafter  took a policy decision which is reflected from Office Order issued on  16.8.1996, the relevant clauses whereof are : \0232.  With the approval of L.G. a decision was  taken that the current price for South Delhi  flats will be worked out by adding a  surcharge of 20% from the price worked out

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as per old formula.  The approval of L.G. to  this decision was granted on 12.07.1996. 3.      There are presently cases in the Housing  Department where there have been delays in  the making of the payments of the flats  allocated/allotted in South Delhi under SFS.   Before the aforesaid revision took place,  delays of one year or so were being  regularised with usual charges, i.e., on  payment of 18% interest per annum and  restoration charges, etc. in few cases where  delays are unusually long, current price has  also been demanded.\024       13.     The aforementioned Office Order dated 16.8.1996 was reiterated in a  resolution dated 27.8.1996 wherein a further decision was taken to impose a  surcharge of 20% \023over and above\024 disposal price only in respect of  registrants who had been allotted flats in South Delhi.  The said decision was  taken to balance the reduced cash flow of the  Authority.   It reads as under : \0231.  On the basis of the aforesaid resolutions of  the Authority, 50% flats are proposed to be  offered to the public.  It is also being  proposed to offer to public the unavailed  flats if any out of the 50% flats being  reserved for Govt. organisations/PSUs.  In  this manner, number of flats to be offered to  the public can be beyond 50%.         XXX                         XXX           XXX 4.      To balance the reduced cash in-flow because  of the proposed discount it will be necessary  to charge premium in the areas where the  real value in the market of DDA flats is  much more than what DDA is charging as  per its costing formula in the demand letters.   It would be in the fitness of thing to charge  premium of 20% over the disposal cost  worked out for the flats in South Delhi  SFS.\024       14.     Yet again, on 5.11.1998, a purported clarification was issued in regard  to regularization of flats where there had been delay in payment of first four  instalments, stating : \023While issuing allocation/allotment letters to the  registrants of various schemes announced by  DDA, a demand is raised from the concerned  allottees specifying the amounts to be paid with  due date of payment.  However, sometimes on  account of the problem faced by the concerned  allottees the payment received by the DDA are  later than the scheduled date.  Such cases are  usually examined on merits and the delay is  regularised if there is merit in the case as non- regularisation of delays in deserving cases may be  resulted by the allottees.  The following shall be  the rules applicable to the allottees of all category  of flats in case there payments are delayed and are  regularised by the competent authority. A.      Competent Authority to regularise the delay: Period of delay                 Designation i)      Upto 30 days            Jt./Dy. Directors ii)     Beyond 30 days but         upto 90 days                    Director (Housing) iii)    Beyond 90 days but      Commissioner         upto 1 year                     (Housing) iv)     Beyond 1 year but upto  Principal

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       1 year 6 months         Commissioner v)      More than 1 year         6 months                        Vice-Chairman B.      Price of the Flat : i)      If the allocated/allotted flat is in South Delhi  where the construction has been undertaken by the  South East Zone and South West Zone of the  Engineering Wing Except Dwarka (being in West  Delhi) the Price of the flat if restored, would be  \023Old Cost\024 interest or current cost whichever is  higher. ii)     In case where allottees of the localities  mentioned (i) above default a small percentage of  demand amount upto 10% beyond the due date,  this delay, if regularised would be on \023Old Cost- interest.\024 iii)    In other cases of all category flats i.e. where  the construction of flats has been undertaken by  other zones of Engineering Wing the restoration  shall be at \023Old Cost-interest\024. 2.      A decision exists that while working out the  current cost for flats in South Delhi, a surcharge of  20% from the price worked out as per old formula,  will be added.  This surcharge will continue to be  added for South Delhi flats.  The interest rates in  the above case shall be @ 18% per annum on the  default amount. C.      RESTORATION CHARGES : In addition to the above, the allottees/allocatees  whose allotment is restored by the competent  authority, shall be liable to pay Restoration  Charges @ 2.5% of the registration money of the  respective scheme.\024       15.     Another office order dated 31.3.1999 was issued in regard to  imposition of 20% surcharge over and above disposal price only in respect  of registrants in South Delhi, relevant portion whereof reads as under : \0232.  Price of the flat i)      In cases (pertaining to any locality) where  demanded amounts were received prior to  22.08.1996 by DDA, the restoration of  allotment/regularisation of delay, if  considered would be on \023old cost  interest\024. ii)     In case where allottees default a small  percentage of total demanded amount upto  10% beyond the due date, the delay if  regularised, would be on \023old cost +  interest\024. iii)    If the allocated/allotted flat is in South Delhi  i.e. where the construction has been  undertaken by the South East Zone and  South West Zone of the Engineering Wing  except Dwarka (being in West Delhi), the  price of the flat, if restored, would be \023old  cost + interest or current cost\024, whichever is  higher.  This clause will be applicable in  cases for which demanded amount by DDA  is received after 22.08.1996 and the delay is  regularised. iv)     In other cases of all category flats i.e. where  the construction of flats has been undertaken  by other zones of Engineering Wing, the  restoration shall be at \023old cost + interest\024. 3.      Sur Charge         The premium of 20% over the disposal cost

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worked out on current cost or old cost for the SFS  flats in South Delhi, where the real value in the  market of DDA flats is much more than DDA is  charging as per its costing formula, shall be  charged.\024       16.     The said orders were issued in purported supersession of the previous  orders on the subject and were to come into force with immediate effect.   Some of the registrants made payments pursuant thereto or in furtherance  thereof.  Some had made payments although, according to them,  aforementioned resolution will have no application to their case.  17.     The said resolution was given a retrospective effect and retroactive  operation.   Proceedings : 18.     Several writ petitions were filed at that stage questioning the legality  and/or validity of the said purported resolutions.   19.     A learned Single Judge of the Delhi High Court allowed the said writ  petitions in part quashing the policy of charging current cost and upholding  the policy of charging 20% surcharge.  Letters Patent Appeals were  preferred thereagainst.  A Division Bench of the High Court, having regard  to conflict in decisions operating in the field referred the matter to a larger  Bench.   20.     The Full Bench of the said Court by reason of the impugned judgment  modified the judgment and order of the learned Single Judge in respect of  \021current cost\022 holding that the Authority had the requisite jurisdiction also in  respect thereof.  The validity of levy of 20% surcharge was also upheld.  

Contention before the Full Bench  : 21.     Before the Full Bench, the registrants, inter alia, raised a contention  that levy of an additional amount over and above the disposal price on the  allocatees or flats in South Delhi was wholly unjustified. It was also urged  that adoption of current cost formula being contrary to the regulations was  also not sustainable in law inasmuch as rights of the writ petitioners   crystallized on issuance of the allocation letter and not when the actual  allotment of flat took place. Levy of surcharge amounts to a levy of tax or  cess, wherefor there is no authority in law.    22.     Relying on or on the basis of a decision of this Court in Premji Bhai  Parmar and Others v. Delhi Development Authority [AIR 1980 SC 738] as  also on Delhi Development Authority v. Pushpendra Kumar Jain  [AIR 1995  SC 1], the respondents, on the other hand, contended that the right of  registrants gets crystallized only upon final allotment and not at the stage of  issuance of allocation letter.  Relying furthermore upon a Full Bench  decision of the High Court in Smt. Sheelawant v. Delhi Development  Authority [1995 (1) AD (Delhi) 725], its jurisdiction to delve into the price  fixation policy was also questioned.    

Issues raised before the Full Bench : 23.     Two principal issues which were raised before the High Court are :          (i)     Whether the action of the Development  Authority       in levying 20% surcharge from the  registrants of the South Delhi is justified ?          (ii)    Whether demand for payment of current cost  as      calculated by the Delhi Development  Authority       from the defaulter registrants could be  said to be justified?\024

Findings of the Full Bench : 24. (i)     Levy of 20% surcharge is within the competence of the Authority in  view of the definition of the \021disposal price\022 as contained in  Regulation 2(13) of the Delhi Development Authority (Management  and Disposal of Housing Estates) Regulations, 1968 (for short, \021the

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Regulations\022), in respect whereof a decision was taken by the Vice- Chairman on 22.08.1996.   (ii)    The said Regulations governing the field exclusively permits the  Authority to decide and fix the price which would include surcharge  being in the realm of contract, the relationship between the parties was  clearly contractual; surcharge being a component of the price of the  flat.          (iii)   It is also to be noted that most of the Appellants were defaulter who  had defaulted in making payments of the first four instalments on time  and therefore there was delay in making payments in their cases.  Since there was an automatic cancellation clause in the agreement the  original contracts stood cancelled. (iv)    Regulation 2(13) of the DDA Regulations defined disposal price or  hire purchase price in relation to a property to mean such price as may  be fixed by the authority.  Hence the levy of surcharge was within the  competence of the authority. (v)     DDA could include surcharge in its pricing formula which would be  in the realm of contract as the relationship was purely contractual. (vi)    The meaning of the word \023cost and price\024 has been settled by the Full  Bench of the Delhi High Court in Sheelawant v. DDA which was  upheld by the Supreme Court and reaffirmed in DDA v. Ashok Kumar  Behl [(2002) 7 SCC 135]. (vii)   The present case was different from the case of P.N. Verma v. Union  of India [AIR 1985 (Delhi) 417]

Submissions of the learned counsel on behalf of the registrants :

25.     Mr. Rungta, Mr. Maninder Singh and Mr. Shekhar, learned counsel,  submitted :  (i)     Having regard to the admitted fact that all allocations were made  during the period 1991 and 1994 and all of them having paid the  instalments except the fourth one, prior to taking of the purported  policy decision dated 22.08.1996, the Authority had no jurisdiction  either to recalculate the current cost or impose a levy of 20%  surcharge.   (ii)    As the impugned \021Levy\022 comprises of three elements, namely, (i) the  current cost which is determined; whereover  (ii) 20% over the actual  cost is taken into consideration, and again (iii) 20% surcharge is  required to be paid,   the same is unreasonable.   (iii)   The Full Bench wrongly applied P.N. Verma (supra), R.K. Sacher  (supra) and Premji Bhai Parmar (supra), which were decided on  wholly different set of facts as the scheme(s) involved therein was for  low income group of people in terms whereof payments were to be  made on completion of construction; whereas in the case of SFS,   instalments of payment is sought for immediately after the allocation.     (iv)    Restoration of allotment in the case of defaulter having been the  subject-matter of contract, the terms and conditions thereof could not  have been altered or modified by the Authority unilaterally.   (v)     In any event, the impugned policy decision can not be given  retrospective effect or retrospective operation.   (vi)    Classification for value of flats being income-wise, area-wise, time- wise and scheme-wise as has been laid down in Premji Bhai Parmar  (supra), any micro classification introduced by the impugned policy  decision insofar as the registrants of South Delhi alone had been asked  to pay a higher amount must be held to be discriminatory in nature.   (vii)   The purported cut-off date being 22.08.1996 creates a class between  those whose allotments, although cancelled, had been restored on the  terms of the contract and those who had applied for restoration  thereafter. (viii)  As policy did not prescribe any rational basis and the same having  wrongly been applied, the same is wholly without jurisdiction and,  thus, a nullity. (ix)    Clause 5.10 of the brochure has wrongly been applied by the Full  Bench insofar as value of the land and cost of construction were also

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existing in P.N. Verma (supra), R.K. Sacher (supra) and Premji Bhai  Parmar (supra).   (x)     The policy decision having been taken on the basis of \021lack of cash  flow\022, the stand taken by the Authority in its counter affidavit, that a  large sum of money was invested for rehabilitation of the migrants  from Jammu & Kashmir and Punjab is wholly untenable.    (xi)    As the current cost of the flat was required to be determined in terms  of the definition contained in Regulation 2(13) of the Regulation, any  other mode or method adopted in respect thereof was wholly illegal.   (xii)   Had such value been required to be arrived at having regard to the  nature and time of the project when it was launched, the impugned  policy decision is barred under the principle of promissory estoppel.   (xiii)  By reason of an Executive Order, levy cannot be imposed with  retrospective effect.   (xiv)   The Full Bench of the High Court misconstrued and misinterpreted  the decision of the Division Bench of the Delhi High Court in P.N.  Verma (supra), which covered the case of registrants.

26.     Mr. Arun Jaitley and Mr. Sunil Gupta, learned senior counsel,  appearing on behalf of the respondents, on the other hand, submitted : (i)     The relationship between the parties being contractual, the writ  petitions were not maintainable. (ii)    Price fixation of flats being within the exclusive domain of the  Authority, the High Court has rightly refused to interfere therewith. (iii)   The findings arrived at in P.N. Verma (supra) falling in the line of  Pushpendra Kumar Jain (supra), on the one hand, and Premji Bhai  Parmar (supra), on the other, are strictly not applicable in this case as  the policy decision adopted by the Authority on 22.08.1996 was a new  one in terms whereof having regard to the equitable principle in mind,  the Authority adopted a policy de\022hors clause (4) of the letter of  allotment. (iv)    This Court not only in Premji Bhai Parmar (supra) but also  subsequently having upheld the decisions of the Delhi High Court in  P.N. Verma (supra) and Sheelawanti (supra) and in D.D.A. v. Ashok  Kumar Behl [(2002 (7) SCC 135], the same constituted a binding  precedent. (v)     Sections 5 and 6 of the Act read with Regulation 5 having authorised  the Authority to fix the price of the flats, the validity of impugned  restoration policy comprising payment of surcharge of 20% and the  interest on the said rate or current cost whichever is higher, could not  have been questioned in writ proceedings. (vi)    As the  policy was formulated on the representations made by the  registrants, the registrants are estopped and precluded from  questioning the validity of the same.   (vii)   In a case of this nature where interpretation of clause of contract is  involved, judicial review is not permissible. (viii)  Levy of surcharge for the subsidised schemes for weaker sections of  the society having, inter alia, been upheld in Premji Bhai Parmar  (supra), the impugned policy decision  must be held to be reasonable  so as to satisfy the tests of Article 14 of the Constitution of India. (ix)    Cost of the land even in South Delhi having been worked out on the  valuation of the land situated in Dwarka, classification made in  respect of the allocation at South Delhi where market rates were much  higher from the actual cost, the scheme for restoration of flats in that  area cannot be held to be arbitrary or discriminatory.

Statutory provisions : 27.     The Act was enacted to provide for the development of Delhi  according to plan and for matters connected therewith or ancillary thereto.      Interpretation clause is contained in Section 2 of the Act.  Section 2(h)  defines the term \021Regulation\022 to mean a Regulation made under this Act.        Section 3 provides for constitution of the Authority consisting of a  Chairman, who shall be the Lieutenant Governor of the National Capital  Territory of Delhi, ex-officio, a Vice-Chairman to be appointed by the  Central Government, amongst others.  Section 4 provides for staff of the

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Authority.  Section 5-A provides for constitution of Committee in the  following terms : \0235-A.  Constitution of Committee.-(1) The  Authority may constitute as many Committees  consisting wholly of members or wholly of other  persons or partly of members and partly of other  persons and for such purpose or purposes as it may  think fit.

       (2) A Committee constituted under this  Section shall meet at such time and place and shall  observe such Rules of procedure in regard to the  transaction of business at its meetings as may be  determined by Regulations made in this behalf.

       (3) The members of a Committee (other than  the members of the Authority) shall be paid such  fees and allowances for attending its meetings and  for attending to any other work of the Authority, as  may be determined by Regulations made in this  behalf.\024      

       Section 6 provides for objects of the Authority, in the following terms: \0236. Objects of the Authority.- The objects of the  Authority shall be to promote and secure the  development of Delhi according to plan and for  that purpose the Authority shall have the power to  acquire, hold, manage and dispose of land and  other property, to carry out building, engineering,  and manage and dispose of land and property, to  execute works in connection with supply of water  and electricity, disposal of sewage and other  services and amenities and generally to do  anything necessary or expedient for purposes of  such development for purposes incidental thereto :

       Provided that save as provided in this Act,  nothing contained in this act shall be construed as  authorizing the disregard by the Authority of any  law for the time being in force.\024    

       Section 52 of the Act reads as under :          \02352. Power to delegate .- (1) The Authority may,  by notification in the Official Gazette, direct that  any power exercisable by it under this Act except  the power to make Regulations may also be  exercised by such officer or local Authority or  committee constituted under Section 5-A as may  be mentioned therein, in such cases and subject to  such conditions, if any, as may be specified  therein.

(2)     The Central Government may, by  notification in the Official Gazette, direct that any  power exercisable by it under this Act, except the  power to make Rules may also be exercised by  such officer as may be mentioned therein, in such  cases and subject to such conditions, if any, as may  be specified therein.

(3)     The Lieutenant Governor of the National  Capital Territory of Delhi may, by notification in

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the Official Gazette, direct that any power  exercisable by him under this Act, except the  power to hear appeals, may also be exercised by  such officer as may be mentioned therein, in such  cases and subject to such conditions, if any, as may  be specified therein.\024    

       Section 57 (1)(f) of the Act reads as under :                  \02357.  Power to make Regulations. (1) The  Authority, with the previous approval of the  Central Government, may, by notification in the  Official Gazette, make Regulations consistent with  this Act and the Rules made thereunder, to carry  out the purposes of this Act, and without prejudice  to the generality of this power, such Regulations  may provide for \026

               \005                    \005                     \005

       (f)     The terms and conditions subject to  which user of lands and buildings in contravention  of plans may be continued.\024       

28.     Indisputably, in exercise of its regulation making power contained in  Section 57 of the Act, the Central Government made regulations known as  \021Delhi Development Authority (Management and Disposal of Housing  Estates) Regulations, 1968\022.        Regulation 2(13) thereof defines \021disposal price\022 in the following  terms : \0232(13)  \023disposal price\024 or \023hire purchase price\024 in  relation to property means such price as may be  fixed by the Authority for such property.\024   

       Sub-sections (25) and (30) of Section 2 of the Act define \023penalty\024  and \023Scheme\024 respectively, as under :                 \0232(25) \023penalty\024 means an additional amount as  laid down in the  relevant agreement payable by  the allottee or hirer as a consequence of his default  in the payment of prescribed dues;\024

\0232(30)  \023scheme\024 means a scheme prepared by the  Authority for the creation of one or more housing  estates;\024

       Regulation 3 empowers the Vice-Chairman to administer the Act  subject to general guidance and resolutions of the Authority, who may  delegate his powers to any officer of the Authority. Regulation 5 provides  for disposal of the property which may be effected by either hire-purchase or  sale or in such other manner and subject to such terms and conditions as may  be decided by the Authority from time to time.          Regulation 6 provides for fixation of price to be one which may be  determined by the Authority.         Regulation 8 provides for the manner of payment of disposal price.       Chapter III of the Regulations provides for the procedure for disposal  of property.  In terms of Regulation 30 of the Regulations, the Authority is  mandated to prepare an allotment register in which names and other  particulars of the registrants are to be entered.  The names of the persons on  the waiting list should also be entered in a separate section of the same  register in the order in which their names appear in the draw of lots.  Power  to decide representations has been conferred upon the Committee in regard  to the selection of applicants for allotment of property.  

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    Regulation 37 provides for handing over of possession of the  property.        Regulation 59 provides for delegation of all or any of the powers of  the authority under the Regulations to the Vice-Chairman or to a whole time  member.

Functions of DDA : 29.     In Premji Bhai Parmar (supra), a Bench of this Court noticed that the  Authority had adopted a resolution delegating its power to the Vice- Chairman and the power to fix disposal price was said to have been  delegated to the Vice-Chairman. 30.     At the outset, we may notice that the stand taken before us by Mr.  Jaitely that the scheme in question was a new one which had to be framed  keeping in view the exigencies of the situation arising out of the  representations made by the registrants, whose allotment had been cancelled,  had not been raised before the High Court.  Such a stand, in fact, had never  been taken. 31.     The Authority issues an invitation through its brochure.  32.     The 5th SFS Scheme was announced in the year 1982.  Any person  could himself get registered upon payment of fees prescribed therefor.  The  brochure published by the Authority indicated the tentative cost of different  flats in different scheme category-wise. Pursuant thereto, an intending  allocattee  applies thereunder, and if in the draw of lots he is declared  successful, an allocation-cum-demand letter specifying the locality and the  floor is communicated to him.  It is not the case of the parties that the  estimated cost or the tentative cost was the final one.  The Authority  indisputably has the jurisdiction to fix the disposal price finally upon taking  into consideration all relevant factors.  In terms of the letter of allotment the  estimated price is to be paid in four equal instalments.  Admittedly, question  of the final cost is communicated to the registrants who is asked to pay the  balance amount after deducting the payment made in four instalments  together with the 5th instalment.  The estimated cost, according to the  Authority, itself should be worked out having regard to the following  parameters.

1.      Cost of construction 2.      Community facility charges 3.      Floor equilization for ground floor and  subsidised for upper floors 4.      Departmental charges 5.      Administrative charges 6.      Cost of land (Land Rate on the date of  allocation letter is taken).

The land rates of the project area are determined  on the basis of break even rates arrived on cost  benefit analysis which includes cost of acquisition,  enhanced compensation and future realisations.   This rate is approved by the Government of India.   The land rates approved by the Government of  India for Dwarka is also applied on flats in South  Delhi.  They are predetermined rates on actual  break even basis.   

7.      Surcharge @ 20% w.e.f. 16.8.96.\024                          

33.     Indisputably again, other components for determining the cost  remains the same every year.  The only change which was effected, is the  change in the land rate, which is approved by the Government.  Other  parameters for calculating the material cost were approved by the Vice- Chairman of the Authority.  34.    Delhi Development Authority has been created under a Parliamentary  Act.  It, indisputedly, is a State within the meaning of Article 12 of the  Constitution of India.   Being so, the provisions of Part III of the

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Constitution of India must be applied by it.  Undisputedly, again, it has also  the duty to strive hard for giving effect to the Directive Principles of State  Policy as contained in Part IV of the Constitution of India.   35.     Objects of the DDA is stated in Section 6 of the Act.  We may notice  that although the heading of Section 6 states about the object of the Act, the  main provision contain both its objects and powers.  It is also curious to  notice that its power to constitute a scheme so as to provide housing  facilities to the citizens of India and, in particular, those belonging to lower  income group as also coming from lower strata of the society has not been  mentioned which we would find pari materia in statutes framed by other  States.  [See Chairman, Indore Vikas Pradhikaran v. M/s. Pure Industrial  Cock & Chem. Ltd. & Ors. 2007 (8) SCALE 110]  36.    It is accepted that although the Act was enacted in the year 1957, the  idea of providing for implementation of such housing scheme started much  later.  The Rules, as noticed hereinbefore, were framed only in the year 1968    and implementation of actual housing schemes are said to have been started  in late seventies or early eighties.   37.     While acting as a \021State\022 within the meaning of Article 12 of the  Constitution of India, it is imperative that D.D.A., while implementing its  statutory power, upholds the fundamental rights of the citizens and strive  hard to give effect to their Directive Principles of the State Policy.  We,  however, cannot also shut our eyes to the fact that in terms of Article 37 of  the Constitution of India whereas the provisions of Part III are justiciable,  the provisions of Part IV are not.  Only when an action of the State is taken  to give effect to any of the provision of Part IV of the Constitution of India  which is not otherwise ultra vires the Constitution or offends the principles  embodied in Part III of the Constitution of India, the same may be upheld,  having regard to the provisions contained in Part III thereof.  The action of  the State, therefore, must at the first instance be adjudged on the touchstone  of the principles of Fundamental Rights and then the provisions contained in  the Parliamentary Act, the regulations framed thereunder as also the terms of  the contract entered into by and between the parties. 38.     We may or may not agree with the submission of learned counsel for  the appellants that the right of housing arising out of such a scheme is a  fundamental right within the meaning of Articles 19(1)(e) and 21 of the  Constitution of India, but there cannot be any doubt whatsoever that the  action of a State must satisfy the principal requirements of Article 14, viz.,  treating persons similarly situated equally and grant of equal protection to  them.  Reasonableness and fairness is the heart and soul of Article 14 of the  Constitution of India.  Keeping the aforementioned principles in mind, we  may consider the points involved herein. Scheme 39.     The basic fact that the scheme was floated in the year 1991 being SFS  is not in dispute.  It has also not been denied or disputed before us that the  said scheme in its application is fundamentally different from those of the  others schemes, viz., MIG, LIG, Janta and Expandable Housing Scheme.    There is also not much dispute as regards the fact that in terms of the said  scheme, estimated costs as well as rights and liabilities of the parties are laid  down in the invitation to offer.  Allocation of the area, floor etc. ought to be  notified on acceptance of the offer by the registrants.  Such allocation again  undisputedly is made on the basis of draw of lot having regard to the specific  number of flats available.  The registrants have no choice in that behalf.    Although he might have exercised his right of option in relation to the area  or the floor but then he, in fact, has no hands thereover.  The letter of  allotment contains the schedule of payment as also other terms and  conditions in support thereof.   40.     We, in this batch of appeals, are principally concerned, inter alia, with  the interpretation of clause 4 of the Letters of Allotment.    41.    This scheme, ordinarily, was to operate within a time frame.  DDA  was expected to complete the constructions within a period of 2= years.   Four six-monthly instalments were required to be paid by the registrants  within the aforementioned period which would include the grace period.  42.    Whereas ninety days\022 time is not taken into consideration for the  purpose of computing the default clause, indisputably, again the power of  the authority to regularize the default on receipt of interest @ 18% per

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annum on the amount due to and owing to an allottee is specifically provided  for.  The period of 2= years vis-‘-vis the six-monthly interest must have  been laid down keeping in view the fact that whereas the amount deposited  by the registrants by instalments would be invested for construction of the  flats.  18% interest is prescribed for default both on the part of the DDA as  also on the part of  the registrants.  No time limit is fixed for completion of  the scheme.  The only penalty which the scheme prescribes is payment of  interest.  So far as area of SFS is concerned, a registrant has no role to play.   Admittedly, constructions have been completed in the year 2000. 43.     For interpretation of clause 4 of the scheme, the aforementioned  background is required to be borne in mind.         Ingredients of clause 4 are : \023(a) The allotment letter would indicate the four  due dates on which the first four  installments are to be paid.  The fifth  installment would be paid on demand. (b)     90 days delay in the first four installments is  condonable subject to payment of prescribed  interest. (c)     After the expiry of 90 days if payment is not  made for first four installments there would  be automatic cancellation. (d)     This automatic cancellation can be restored  on payment of interest and other charges  subject to availability of the flat. (e)     The cancellation due to non-payment of  final installment will be made if the payment  is not made within 120 days with no  provision of any further extension.\024

44.     It has not been denied or disputed that although the registrants  defaulted in making payments but the flats were available.  In fact, when the  default took place, the flats were not constructed.  They have, thus, not been  allotted to the persons on the wait list. 45.     It may be true that recourse to clause (d) should be undertaken by the  allocattees within a reasonable time.  What would be a reasonable time  would, however, depend on the facts and circumstances of each case.  No  hard and fast rule can be laid down therefor.    46.     In a given case, it may be a few months but in another having regard  to the conduct of DDA, it may be one year or more.  What would constitute  a reasonable period must also be considered keeping in view the rights of the  parties as also the fact that in terms of clause 4 of the offer of allotment there  does not exist any prohibition to pray for regularization upon default,  even  after a period of 120 days.  In a situation of this nature, it may not be  unjustified to arrive at the conclusion that such a right can be exercised, if  not, when the flats were ready for handing over actual possession, but at  least when there has been a substantial progress.   We must also take into  consideration that the scheme, the letter of allotment, the contract between  the parties to pay interest in case of default to each other leads to a  conclusion that DDA in its wisdom thought that payment of 18% interest  shall subserve the purpose.  We, however, hasten to add that it does not  mean that DDA must entertain such an application for restoration and/or  condonation of default despite lapse of time.  It has its own right in relation  thereto which may be invoked.  The right to allot the flat to a person who is  on the wait-list as a result whereof a seal of finality can be put, the right of  the registrants or registrants even the whole or a part of the advance or other  amounts deposited by him stand forfeited.  

Interpretation of the Act : 47.     DDA functions through the Committees constituted in terms of  Section 5A of the Act.  Power has been delegated in favour of its Chairman  and the Vice-Chairman.  Such delegation of power, however, as provided for  under Section 52 of the Act does not extend to make regulations.  What,  therefore, cannot be done by way of regulation, cannot be done by executive

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order. 48.     It has not been denied or disputed that having regard to clause 5.10 of  the brochure and clause 4 of the letter of allotment, the term \023tentative cost\024  must be given its natural meaning.   49.     It varies from time to time as it is not a one time process.  The price  difference between the estimated cost and the initial cost \023as it worked out  on the completion as per costing formula in vogue\024 would have to be paid  along with the 5th and final instalment.   Notifications : 50.     The impugned circulars have three distinct elements : 1.      Price of South Delhi flats would be worked out by adding 20%  surcharge in terms of the office order dated 16.8.1996 duly approved  on 22.8.1996. 2.      20% surcharge will have to be paid in case where there is a small  delay, in which case only interest has to be paid. 3.      In all other cases original cost + 18% or the current cost whichever is  higher would be payable.   51.     Legality and/or validity of the said circulars is in question.  We may,  at the outset, notice that there is nothing on record to show that the Office  Orders dated 16.8.1996, 27.8.1996 and 21.3.1999 were published in the  Gazette or were otherwise brought to the notice of the registrants.   Conduct : 52.     Conduct of the parties may be noticed from the case of Manjit Singh.   Admittedly, the registrants failed to pay instalments within the stipulated  period.  A notice dated 23.4.1997 was served on him which is in the  following terms :         \023WHEREAS you had been allocated a  second floor category \026 II, SFS flat in Pkt. F,  Sheikh Saria Residential Scheme vide allocation \026  cum demand letter dated 31.3.93 under the DDA  (Management & Disposal of Housing Estates)  Regulations 1968 against your registration under  the 5th SFS \026 1982.         AND WHEREAS as per the allocation cum  demand letter the following installments were to  be paid as per the following schedule :- Installments    Amount  Due Date        Installment     Challan                          paid on No.

1st     Rs.1,35,867/-   30.4.93 24.5.93 032601                                         (Rs.1,35,867) IInd    Rs.1,25,060/-   30.10.93        30.10.93        112025                          31.05.94  (Rs.43,675)                         (Rs.50,000)

IIIrd   Rs.1,56,325/-   30.4.94 24.11.94        010243                                          (Rs.50,000)

IVth    Rs.1,25,060     30.10.96        25.07.96        010245                                          (Rs.50,000)         From the perusal of the above chart, it can  be seen that you have not deposited the installment  as per schedule indicated in the allocation cum  demand letter.           AND WHEREAS as per the terms and  conditions of the allocation cum demand letter as  contained in Clause \026 4 the allocation was liable to  be cancelled if the installments are not made as per  the schedule.         AND WHEREAS it is evident that you  failed to deposit the installments as per the  schedule and thus have committed the breach of  the terms and conditions of the allocation cum  demand letter dated 31.3.1993         Therefore, I, Dy. Director (SFS) hereby

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inform you that the allocation made to you vide  letter dated 26.3.93 \026 31.3.1993 stands  automatically cancelled due to the breach of the  terms and conditions of allocation.         It is further inform (sic) that the 5th SFS  Scheme 1982 stands already closed, therefore, you  are advised to return all the original FDR, Demand  cum allocation letter and third copy of challan so  that your case can be processed for the refund of  the amount deposited by you.\024       53.     He submitted a representation praying for condonation of default.  In  his representation, he stated: \023Immediately on receipt of the DDA letter I ran  hither and thither for financial loans from relatives,  friends, and well wishes and was able to deposit  Rs.2,12,770/- vide challan No.039576 dated  12.5.97 (Annexure F) bringing the total payment to  DDA to 90% of the cost of flat.  The flats are yet  to be completed. I now, therefore, humbly APPEAL to you to  condone the delay in the payment of installments  for reasons stated above, on humanitarian and  compassionate grounds and to regularise the  allocation of the flat for which act of kindness I  shall ever pray.  I am also ready to pay any amount  yet due in the form of interest.\024       54.     The said representation was accepted by DDA in terms of a letter  dated 10.12.1998 which reads as under : \023It is our pleasure to inform that you have been  allotted SFS Flat with the following details  through a computerized draw held on __/10/1998:- Flat No.                61 Floor                   SEC Category                II Sector Block Pocket Type Locality        SHEIKH SARAI         We are advising the Housing Acts  Department to issue the 5th and Final Demand  Letter to you at the earliest.\024

55.     It allotted the flat.   No condition therefor was put.   It did not ask for  payment of any surcharge.  The original terms were not deviated from.  It  did not ask for any extra-cost.  The delay in payment of instalments was  condoned and the allocation of flat which stood cancelled in terms of the  aforementioned notice dated 23.4.1997 stood restored.  DDA, thus, acted  strictly in terms of the original scheme.  The offer of the allocattee was  accepted relying on or on the basis of clause 4, viz., the amount of default  and an interest charged thereupon @ 18% per annum.  It is only when the 5th  and final instalment was directed to be paid in terms of demand letter dated  15.2.1999, the current cost computed in terms of the office order dated  16.8.1996 and subsequent office orders was included.  The allocattee at that  stage might not have any other option but to pay the same for obtaining  possession.  But by reason thereof, he never gave up his right to question the  action on the part of DDA.  Rule of estoppel, therefore, has no application. 56.     It was, on the other hand, DDA who having accepted the offer of the  allocattee by restoring the allotment, in our opinion, is estopped and  precluded from raising a plea as regards application of office order dated  16.8.1996.  It may be noticed that even contents of those letters were not  disclosed to the allocattee. Was it a Restoration Scheme ?

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57.     The office orders, on the basis whereof the purported impugned policy  had been taken, do not refer to the scheme as a restoration scheme. The  resolutions do not say so.  Had it been so, DDA would have issued a fresh  notification or at least made its stand clear to the allocattees either by way of  public notice or by informing each of such defaulters individually.  Had such  conditions for the purpose of restoration being made known, the allocattees  would have accepted it or rejected it.  Evidently, it is a part of the original  scheme.  It is not a new one.  It is well known principle of law that a person  would be bound by the terms of the contract subject of course to its validity.   A contract in certain situations may also be avoided.  With a view to make  novation of a contract binding and in particular some of the terms and  conditions thereof, the offeree must be made known thereabout.  A party to  the contract cannot at a later stage, while the contract was being performed,  impose terms and conditions which were not part of the offer and which  were based upon unilateral issuance of office orders, but not communicated  to the other party to the contract and which were not even the subject matter  of a public notice.  Apart from the fact that the parties rightly or wrongly  proceeded on the basis that the demand by way of 5th instalment was a part  of the original scheme, DDA in its counter affidavit either before the High  Court or before us did not raise any contra plea.  Submissions of Mr. Jaitley  in this behalf could have been taken into consideration only if they were  pleaded in the counter affidavit filed by DDA before the High Court. 58.     We have also reservations that in absence of any provision contained  in the Act or the Regulations, the delegatee on its own could frame such a  new scheme.  If not, the purported restoration policy would be ultra vires.   We, therefore, cannot persuade ourselves to agree with the contention of  DDA that the restoration policy cannot be tested on grounds of terms and  conditions of the original scheme.  If it is a new scheme, it would bear  repetition to state, the terms contained therein should have been known to  the allocattees.  We, thus, have no other option but to proceed to consider the  legality and/or validity of such imposition on the premise that the impugned  policy decision is a part of the original scheme and does not contain any new  policy. Policy Decision : 59.     An executive order termed as a policy decision is not beyond the pale  of judicial review.  Whereas the superior courts may not interfere with the  nitty gritties of the policy, or substitute one by the other but it will not be  correct to contend that the court shall like its judicial hands off, when a plea  is raised that the impugned decision is a policy decision.  Interference  therewith on the part of the superior court would not be without jurisdiction  as it is subject to judicial review.   60.     Broadly, a policy decision is subject to judicial review on the  following grounds : (a)     if it is unconstitutional; (b)     if it is de\022hors the provisions of the Act and the Regulations; (c)     if the delegatee has acted beyond its power of delegation; (d)     if the executive policy is contrary to the statutory or a larger policy. 61.     The stand taken by DDA itself is that the relationship between the  parties arises out of the contract.  The terms and conditions therefor were,  therefore, required to be complied with by both the parties.  Terms and  conditions of the contract can indisputably be altered or modified.  They  cannot, however, be done unilaterally unless there exists any provision either  in contract itself or in law.  Novation of contract in terms of Section 60 of  the Contract Act must precede the contract making process.  The parties  thereto must be ad idem so far as the terms and conditions are concerned.  If  DDA, a contracting party, intended to alter or modify the terms of contract,  it was obligatory on its part to bring the same to the notice of the allocate.   Having not done so, it, relying on or on the basis of the purported office  orders which is not backed by any statute, new terms of contract could thrust  upon the other party to the contract.  The said purported policy is, therefore,  not beyond the pale of judicial review.  In fact, being in the realm of  contract, it cannot be stated to be a policy decision as such. Price Fixation 62.     We would assume that the office orders were issued by DDA keeping

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in view the representations made by a large number of defaulters.  The plea  taken by DDA gives rise to a dichotomy.  If it is a case of contract qua  contract, the provisions of the Contract Act must be taken recourse to.  If  DDA was exercising a statutory power, the same must be tested on  application of doctrine of ultra vires.  Floating a scheme for providing  housing facilities to a group of people, although is governed by statute,  power under the statute by an executive not only can be tested on the  touchstone of Article 14 of the Constitution of India, but can also be tested  on the touchstone of source of the power under the statute.  No provision  either in the Act or the Regulations was brought to our notice which makes  the allocattee bound by the purported policy decision taken by DDA.  Even  if it is so, the superior courts may exercise its power of judicial review as the  power which is sought to be exercised by a statutory authority is not under  the contract but under a statute.  When a contract emanates from a statute or  is otherwise governed by the provisions thereof, the superior court can also  exercise the power of judicial review.    63.    In Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd.  [(1983) 3 SCC 379 : AIR 1983 SC 848], it is stated that such contracts can  be subject to judicial review.  64.    Regulations 5 and 6 should not be very liberally construed.   Concededly, the manner in which power is to be exercised is governed by  the past practice.  Norms have been fixed for computing the disposal cost.   Although, the superior courts ordinarily would not interfere in the price  fixation but there does not exist any absolute ban.  In a case where fixation  of price is required to be made in a particular manner and upon taking into  consideration the factors prescribed and if price is fixed de\022 hors the  statutory provisions, judicial review would be permissible.   65.     Strong reliance has been placed upon the residuary power conferred  upon the Authority to determine the cost of construction.   66.     When the same is done having regard to the relevant factors on the  basis of which brochure as well as the notice inviting tender was issued, the  superior courts may not interfere; but the same must be done in terms of the  original contract and not de\022 hors the same.  The authority, even while  exercising its residuary power, is required to act within the four corners of  the contract.  While doing so, the terms of the contract cannot be altered to  include any other factors which were contemplated thereunder.  While  computing the extra cost, no additional factor, thus, can be taken into  consideration.  If such a power is conceded in the authority, the same would  give rise to exercise of arbitrary power.  It is not contemplated in law.  When  construing a provision delegates a power on an authority under a statute, the  constitutional provisions must be kept in mind.   67.     At the time of calculation of the amount which would be the subject  matter of demand of 5th and final instalment, the jurisdiction of DDA is to  keep itself confined only to the factors on the basis whereof, the brochure  has been issued and offer was made.  No additional factor, thus, could be  taken into consideration at the time of issuing notice other than the ones on  the basis whereof offer was made by the registrants.  Imposition of  equalization charge also falls within the said purview.  68.    There may be some charges like conversion charges which per se may  or may not be bad.  Conversion charges levied by the DDA pursuant to the  directions issued by the Central Government which in terms of Section 41 of  the Act is binding on DDA for converting the leasehold into freehold.   However, such a power also must be exercised reasonably and fairly.   Conversion of the property from leasehold to freehold is a separate  transaction.  The same has nothing to do with the actions, qua contract.   Imposition of conversion charges, therefore, even if, per se, may not be held  to be bad, the said factor cannot be taken into consideration for the purpose  of computing construction costs.  The High Court has struck down the  inclusion of such conversion charges in the costing of the flats.  After 1996,  the ordinary cost of construction of a flat was Rs.2,00,000/-, in South Delhi  but not only it framed the basis for computing the final cost but also 20%  additional amount as also 20% surcharge were claimed thereupon.   Sometimes interest also was charged as and when applicable.  Thus, so long  the conversion charge is charged by way of a separate transaction, no  exception can be taken.  But, purported price fixation as has been done in the

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instant case cannot receive our approval.  The same is, thus, in our opinion,  bad in law. Applicability : 69.     The scheme in question was floated in 1992-93.  The purported  default on the part of the registrants took place prior to the purported  adoption of the policy decision.  The purported office order dated 16.8.1996  discloses shows that an internal decision had been taken to condone the  delay in making payments of first four instalments.  The authorities  mentioned therein had been delegated with the power for the period(s)  mentioned as under:  Director (H)-1                  Upto 3 months Commissioner (Housing)          Upto 1 year Principal Commissioner          From 1 year to 1 = year Vice-Chairman                   Full powers         Clause 3 of the said office order reads as under : \023There are presently cases in the Housing  Department where there have been delays in the  making of the payments of the flats  allocated/allotted in South Delhi under SFS.   Before the aforesaid revision took place, delays of  one year or so were being regularized with usual  charges, i.e., on payment of 18% interest per  annum and restoration charges, etc. in few cases  where delays are unusually long, current price has  also been demanded.\024

70.     Thus, a decision in that behalf had not only been taken but also was  made applicable both in the case where the delay is of one year or so and the  delay which was unusually long. By reason of the said circular, delay in  making payments of instalment was to be condoned on payment of either  current price or old price whichever is higher.  From a perusal of the  Resolution dated 27.8.1996, it appears that 20% surcharge was levied over  the disposal cost worked out for the flats in South Delhi SFS.  It does not  show that any subsidy was proposed to be granted for the migrants from  Jammu and Kashmir or Punjab.  The policy was taken only with a view to  balance the reduced cash in-flow.  DDA, thus, had in view commercial  aspect of the matter and not the social justice aspect. 71.     Again, by reason of the office order dated 31.3.1999, the delegation of  power in favour of various authorities was redefined.  The Vice-Chairman  could deal with delay or default even if it exceeds one year and six months.   22.8.1996 was prescribed as the cut off date for the purpose thereof.  Price of  the flat was to be calculated on the basis of either current price or old price  whichever is higher.  It was sought to be applied irrespective of the extent of  delay.  On what basis 22.8.1996 was taken to be the cut off date has not been  disclosed.  We would, however, assume that the said date was taken into  consideration in view of the Resolution dated 27.8.1996.    72.    An executive officer, in absence of any provision of a statute, cannot  apply his own decision with a retrospective effect.  A delegatee is bound to  act within the four corners of the delegation and not beyond the same.  73.    Delegation of power in favour of an authority under a statute must  also be tested in terms of the statutory provisions.  No provision under the  Act or the Regulations has been brought to our notice which empowers the  delegatee to alter the terms and conditions of the contract with retrospective  effect.  The purported policy decision must, therefore, be tested not only  having regard to the provisions of the statute but also having regard to clause  4 of the offer.   74.     Current cost has been calculated upon computing 20% over and above  the actual cost.  A provision for surcharge had also been made in terms  whereof a premium of 20% over the disposal cost was worked out on current  cost for the SFS flats in South Delhi.  Imposition of surcharge is subject to  the condition that the real value in the market of DDA flats would be much  more than it had been charging as per the cost formula.  Parameters of  computation of disposal price have been laid down which we have noticed  supra. The authority having itself adopted a formula for computing the  disposal cost, the same was binding upon the delegatees.  A delegatee cannot

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take any action contrary to or inconsistent with the factors laid down for  computation of disposal cost as defined in Section 2(30) of the Act.   Regulations 5 and 6 do not authorize the delegatee to apply a formula which  was not contemplated by the Authority itself.  If an Executive Authority in  absence of any statutory provision cannot apply a decision with retrospective  effect, the same would be ultra vires.    75.    In Vice Chancellor, M.D. University, Rohtak v. Jahan Singh [2007 (4)  SCALE 226], this Court observed:                 \023The Act does not confer any power on the  Executive Council to make a regulation with  retrospective effect.  The purported regulations,  thus, could not have been given retrospective  effect or retro-active operation as it is now well- settled that in absence of any provision contained  in the legislative Act, a delegatee cannot make a  delegated legislation with retrospective effect.\024

       [See also Ashok Lanka and Another v. Rishi Dixit and Others, (2005)  5 SCC 598] 76.     A definite price is an essential element of binding agreement.  A  definite price although need not be stated in the contract but it must be  worked out on some premise as was laid down in the contract.  A contract  cannot be uncertain.  It must not be vague.  Section 29 of the Indian Contract  Act reads as under : \023Section 29 - Agreements void for uncertainty  Agreements, the meaning of which is not certain,  or capable of being made certain, are void.\024

77.     A contract, therefore, must be construed so as to lead to a conclusion  that the parties understood the meaning thereof.  The terms of agreement  cannot be vague or indefinite.  No mechanism has been provided for  interpretation of the terms of the contract.  When a contract has been worked  out, a fresh liability cannot thrust upon a contracting party.  78.    It is well settled that a definite price is an essential element of a  binding agreement.  Although a definite price need not be stated in the  contract, but assertion thereof either expressly or impliedly is imperative. Impugned Judgment :  79.    The Full Bench of the Delhi High Court has placed strong reliance on  P.N. Verma (supra).  One of the fundamental errors which has been  committed by the Full Bench, with respect, is applying P.N. Verma (supra)  without noticing the distinction between the provisions contained in the  clauses of the Brochure in the present case and those obtaining therein.  In  the present case Clause 5.10 of the DDA Brochure stipulates that the price  mentioned in the allocation letter is only the estimated price and it could be  changed only on the basis of escalations in the price to be determined by  DDA on the completion of flats.  In P.N. Verma (supra), however, the price  was to be fixed on allotment of flats.  It gives rise to a lot of difference in  determining the issue.         In P.N. Verma (supra), the High Court observed: \02324\005 If the stand of the DDA is that the price they  demand is only on the same formula as was  announced and that the increased price demanded  is only due to escalation in cost of construction and  fluctuation in other cost factors, then the issue will  only be whether the fixation of price is in  accordance with the contract and that can be gone  into, both by reason of principle and because it will  involve complicated factual investigations, only in  a suit.  This is the alternative stand of the DDA  which we will discuss later.  But if the DDA says,  whatever we may have said earlier, we can fix the  price or any basis and that cannot be questioned at  all because it is a contractual matter, the argument  is fallacious because this stand of the DDA means  going behind the contract and revising the earlier

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formula of price fixation which means travelling  back to the pre-contractual statutory stage\005\024

It was also stated: \02346\005That actual cost was tentatively fixed at a  figure ’which was announced subject, however, to  variations in cost factors. It is not open to the DDA  to alter this basis for the determination of the  disposal cost. So long as the DDA adheres to this  basis in fixing the disposal cost, court will not  interfere. It will not interfere even if there should  be some mistakes or exaggerations in the  calculation of the components of the figure arrived  at, as that would be a matter for determination after  evidence and investigation in a suit. Even if an  item should be included in the cost components,  about the inclusion of which as one of the cost  factors there could be some doubt, the writ court  may not interfere and may leave the parties to fight  out their battle in a regular suit. But where the  disposal cost is fixed on a basis totally different  from that announced earlier or where the  components taken into account cannot be  described by any stretch of imagination as cost  factors or where a component of the cost is shown  to have been fixed arbitrarily and without any basis  whatsoever, the Court has no option but to quash  the determination of the disposal cost so fixed and  direct the DDA to undertake afresh a proper  determination thereof in accordance with the terms  of the original contract or after excluding the items  unwarrantedly included therein or after re- determining the value of any component on a  proper and reasoned basis\005\024

       On legal principle, therefore, ratio of P.N. Verma (supra) is not very  different from what has been held herein. 80.     Another fundamental error committed by the Full Bench was to  approve para 29 of the judgment of the Division Bench of the Delhi High  Court in R.K. Sachar v. DDA (LPA No. 727 of 2002 decided on 15.12.2003)  opining that this Court had already approved the contention of the DDA that  it was entitled to recover such a charge in the light of the decision in Premji  Bhai Parmar (supra). 81.     The Full Bench failed to notice that in P.N. Verma (supra) surcharge  over and above the disposal price titled \023equalization charge\024 purporting to  provide subsidy for construction of flats for weaker sections of the society in  trans Yamuna area was held to be ultra vires and that the said decision has  been approved by this Court.  P.N. Verma (supra), therefore, was misread  and misconstrued. 82.     In Premji Bhai Parmar (supra), surcharge was a component of the  disposal price.  The disposal price was known to the registrants at the time of  conclusion of contract.  As the contract was found to be binding on the  parties, levy of surcharge, thus, was held to be vitiated in law.   83.     In this case, the case of the appellant is not that they are not bound to  pay the binding contractual stipulation as contained in Clause 4 of the letter  of allotment.  They are and they must.  But what cannot be thrust on them is  the price determined on the basis of factors which were not contemplated in  the original contract. 84.     In Premji Bhai Parmar (supra), this Court did not record a finding that  even if a surcharge was not a part of Brochure, still the same could be  imposed without any sanction in law so as to bind the allocates to pay the  same although neither they were made aware thereof nor did they give their  consent for payment of surcharge as a part of the contract.  The Full Bench  of the High Court wrongly relied upon R.K. Sachar (supra).  In the light of  the decision of this Court in Premji Bhai Parmar (supra), the nature of levy

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should have been held to be completely distinct and, thus, Premji Bhai  Parmar (supra) had no application to the fact of the present case.   85.     The Full Bench also misdirected itself insofar as it failed to take into  consideration that levy of 20% surcharge was in effect and substance a  compulsory exaction to augment the revenue requirements of the DDA and,  thus, could not have been a part of the contract.  Any compulsory exaction  should be viewed in the light of Article 265 of the Constitution of India,  unless it comes within the sphere of contract. 86.     It may be reiterated that it is only those components which fall within  the Brochure of the DDA or within the purview of the statutory requirements  can be included in the exercise of price fixation.  To the said extent are the  decision of the Delhi High Court in P.N. Verma (supra), Narsingh Jain v.  Union of India [(80) 1999 DLT 742] and DDA SFS Flat Owners Society v.  UOI [AIR 2001 Del 39].  87.    Against the said judgment of the Division Bench of the High Court in  P.N. Verma (supra), an appeal was preferred by the DDA before this Court.   This Court in the said appeal titled as DDA v. SFS Assn. and Ors. [Civil  Appeal No. 4402 of 1985] rejected the contention of the DDA that under the  terms of the Brochure related to the said scheme it was empowered to  recover from the registrants an additional amount over and above the  disposal price by way of equalization charges in the following terms: \023The lengthy and elaborate judgment of the High  Court under appeal makes instructive reading in  prohibiting the DDA from adding to the prices of  the named flats on escalation termed as  \021equalisation and ad hoc charges\022.  From the terms  of the model contract entered into by the DDA  with the people who opted for the self-financing  scheme, charging of the said equalization and ad  hoc charges is evidently totally missing.  The DDA  in support thereof has banked upon the justness of  its cause and demand, and has no where been able  to project that to begin with, it was part and parcel  of the cost factor.  The High Court has seen  through its design and has termed the venture as a  camouflage.  We see no reason to take a different  view than the one taken by the High Court.\024

       The said decision of this Court is binding upon the DDA. Conclusion :  88.    For the reasons aforementioned, the impugned judgment cannot be  sustained which is set aside accordingly.  The appeals are allowed with  costs.  Counsel\022s fee assessed at Rs. 25,000/- in each case.  Appeals filed by  the DDA are dismissed.