SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1373 OF 2006

V.N. Bharat           ...Appellant

Vs.

D.D.A. & Another    ...Respondents

J U D G M E N T  

ALTAMAS KABIR,J.

1

1. The  appellant  applied  for  registration  in

respect of a Category-II flat under the 1985

Sixth  Self-Financing  Housing  Registration

Scheme,  advertised  by the Delhi Development

Authority  (hereinafter  referred  to  as  the

“DDA”).  As per the scheme, the flats to be

constructed  on  a  Multi-storied  basis  was

expected to be ready within a period of two

years.  In clause 10 of the Scheme, the method

of payment has been provided for as follows:-

“After  a  person  has  been  allotted  a flat  he/she  would  be  called  upon  to make the payments as per the following schedule:

25%  (including  the  amount  paid  as registration  deposit)  as  initial deposit on allotment/allocation.

20% after six months

25% after next six months  

20% after next six months

10%  when  required  to  take  over possession.

The  Demand-cum-allotment  letter, whenever issued to the allottees will indicate the prescribed dates by which payments  shall  have  to  be  made  in regard to the first four instalments as

2

mentioned  above.   For  the  fifth  and final  installment,  a  fresh  demand letter  will  be  issued  separately  and which  may  also  include  the  possible increase in the cost of the flat.”

2. As  far  as  the  first  four  installments  are

concerned, there is no difficulty since such

payments  had  undisputedly  been  made  by  the

appellant.   The problem arose in connection

with  the  payment  of  the  fifth  and  final

instalment in respect of which a fresh demand

letter  was  to  be  separately  issued,  which

could  include  a possible escalation towards

the cost of the flat.

3. Clause  13  of  the  Scheme  provided  that  the

allotment of specific flats would be made on

the basis of “draw of lots” to be held by the

DDA when the flats were completed.  It was

also  stipulated  that all persons registered

under the Scheme, irrespective of the date on

which they were registered, would be treated

at par with each other.

3

4. Admittedly,  the  appellant  had  applied  for

registration  of  a  semi-finished  flat  on

payment  of  Rs.10,000/-  towards  registration

deposit  in  respect  of  the  same.    On  6th

December, 1991 the appellant was allotted a

flat  at  Dwarka,  Sector  3,  Pocket-II,  First

Floor in Category-II and allotment letter was

also  issued  to  him  by  the  DDA  on  31st

December,  1991,  wherein  the  schedule  for

payment  of  the  first  four  installments  was

given. As indicated hereinabove, between 31st

January,  1992  and  20th October,  1993,  the

appellant paid all the four installments in

accordance with the demands made by DDA.

5. As will appear from the materials on record

the  appellant,  despite  being  allotted  a

specific flat, did not make payment of the

fifth and final instalment within 15 days of

the  receipt  of  the  allotment  letter  as

stipulated in the terms and conditions of the

4

Self-Financing  Scheme.  This resulted in the

issuance of a show-cause notice by the DDA,

which was received by the appellant on 10th

September, 1997, asking him to explain as to

why  he  had  failed  to  make  payment  of  the

amount  of  Rs.1,63,512/-  by  31st December,

1996, towards the fifth and final installment.

Without replying to the show-cause notice, the

appellant  by  a  letter  dated  19th November,

1997,  informed  the  DDA  that  he  had  never

received any demand letter from the DDA for

making  payment  of  the  fifth  and  final

installment.   The  appellant  accordingly,

requested the DDA to issue a demand letter

indicating the amount of the fifth instalment

so that he could take over possession of the

flat in question.  Subsequently, on 8th May,

1998, the appellant received a letter from the

DDA dated 22nd April, 1998, informing him that

a  demand  letter  had  been  issued  on  11th

September, 1996.  According to the appellant,

the said letter had never been tendered to

5

him.  In fact, in the letter dated 22nd April,

1998, sent by DDA it was stated that another

demand  letter  was  in  process  and  would  be

issued in due course.

6. It is the case of the appellant that on 6th

May,  1998,  he  paid  the  fifth  and  final

installment to the DDA by a pay-order for a

sum  of  Rs.1,63,512/-,  being  the  amount

mentioned in the show cause notice dated 10th

September, 1997, even prior to the receipt of

the DDA’s letter dated 22nd April, 1998 on 8th

May, 1998.

7. Thereafter, on 26th May, 1998, the appellant

filed  a  complaint  against  the  respondents

herein under Section 36(B) and Section 12-A of

the Monopolies and Restrictive Trade Practices

Act,  1969,  (hereinafter  referred  to  as  the

“MRTP Act, 1969”) before the Monopolies and

Restrictive  Trade  Practices  Commission

alleging unfair trade practice by the DDA on

6

various grounds.   The appellant prayed for

registration of the sale deed by the DDA in

his favour and also for compensation of Rs.2

lacs.

8. While disposing of the appellant’s application

under  Section  12-A  of  the  MRTP  Act,  the

Commission directed the respondent not to hand

over the possession of the flat in question to

any one and not to dispose  of the same in any

way until the conclusion of the inquiry under

Section 36(B) of the Act. On an interpretation

of clause 4 of the Self-Financing Scheme, the

Commission  came  to  the  conclusion  that  the

allegations of unfair trade practice on the

part of the respondent authority, had not been

proved.  The notice of inquiry was, therefore,

discharged and the interim order issued under

Section 12-A of the Act was vacated.   The

present  appeal  is  directed  against  the

aforesaid order of the Commission.

7

9. Mr.  R.  Srivastava,  learned  senior  advocate

appearing  for  the appellant, submitted that

the  Commission  had  erred  in  upholding  the

contention of the Respondent that since the

initial allotment had been cancelled, even the

revival of the earlier proposal to make an

allotment  in  favour  of  the  appellant  would

have to be in the nature of a fresh allotment.

Mr. Srivastava submitted that pursuant to the

representation  made  by  the  appellant  for

restoration of the allotment of the flat in

question at the current cost, the DDA issued a

letter dated 22nd April, 1998, informing him

that  a  fresh  demand  letter  for  the  final

installment  would  be  issued  to  him  in  due

course.   The  said  representation  was  made

after  the  appellant  had  received  the  show-

cause notice dated 10th September, 1997, from

the DDA. However, the appellant deposited the

amount  as  was  mentioned  in  the  show-cause

notice  before  receiving  the  fresh  demand

letter,  which  was  allegedly  issued  on  16th

8

June,  1998.   The  definite   case  of  the

appellant, however, is that the same was not

received by him and was returned undelivered

to  the  postal  authorities.   Mr.  Srivastava

reiterated the submissions which had been made

before the Commission to the effect that the

restoration of the allotment, which was said

to have been automatically cancelled, being a

continuation  of  the  initial  allotment,  it

could not be said to be a new allotment which

entailed payment of fresh transfer fees.  Mr.

Srivastava pointed out that while the demand

in respect of the fifth and final installment

was Rs.1,63,512/-, in the fresh demand letter

for the fifth and final installment the net

amount payable was shown to be Rs.4,43,336/-.  

10. Mr. Srivastava submitted that since the demand

notice for the fifth and final installment had

not  been  received  by  the  appellant,  the

question of paying the amount in the demand

notice within a stipulated time did not arise.

9

He submitted that it is only after the show-

cause notice was received, that the appellant

became aware of the demand of Rs.1,63,512/-

which  was  immediately  deposited  by  the

appellant.  It is only thereafter, that the

appellant  was  informed  that  he  would  be

required to pay not the amount as mentioned in

the show-  cause notice, but a further sum of

Rs.4,43,336/-on account of the fresh allotment

of  the  flat  made  in  his  favour.   Mr.

Srivastava  submitted  that  the  question  of

fresh allotment did not arise having regard to

the fact that even in the show-cause notice

dated  10th September,  1997,  it  had  been

indicated that cause should be shown as to why

the  allotment  should  not  be  cancelled  for

breach of the terms and conditions of such

allegations.   In the show-cause notice it was

also mentioned that in case the reply was not

to the satisfaction of the DDA, the allotment

would be cancelled and the amount of penalty

and interest charges would be adjusted against

10

the  deposit  made  by  the  appellant  and  the

balance money would be refunded to him.  Mr.

Srivastava  pointed  out  that  without

termination  of  the appellant’s allotment of

22nd April,  1997,  the  DDA  wrote  to  the

appellant as follows :-  

“DELHI DEVELOPMENT AUTHORITY

F.177(691)/91/sfs/11/43

22.4.1998

FROM :

P.L. Arora, Accounts Officer, SFS- I, D- Block, 3rd Floor, Vikas Sadan.

To

Sh. Vishwanath Bharat, H.No. 539, Gali No. 5-A Gibind Puri (Kalkaji) New Delhi – 19

Sub.: For issue of the 5th & final demand letter

Please refer to your letter dated 9.2.1998  and  subsequent  letter  dated 12.2.1998 on the subject cited above.

11

In the connection it is informed that 5th and final demand letter was issued to  you  vide  this  office  letter  dated 11.9.96  through  Regd.  Post  RL  2911 which has not been returned undelivered to this office so far.

However  the  matter  for  issue  of another demand letter is in process and will be issued in due course.

Sd/- (PL Arora)

Sr. Accounts Officer/SFS/II”

11. Mr. Srivastava pointed out that even in the

said letter it had been indicated that a fresh

demand  letter  was  in  process  and  would  be

issued in due course.  It was urged that the

contents of the said letter clearly supports

the claim of the appellant that the fifth and

final demand was to be made on the basis that

it was with reference to the allotment which

had  already  been  made  in  the  appellant’s

favour.   

12. In fact, Mr. Srivastava concluded on the note

that  the  only  point  for  decision  in  this

12

appeal is whether alleged cancellation of the

appellant’s  original  allotment  could  on

revival be said to be a fresh allotment which

entailed payment of fresh allotment charges.

According to Mr. Srivastava, since at no point

of  time  had  the  respondent  treated  the

appellant’s allotment  to be cancelled, the

issue being raised on behalf of the respondent

DDA  was  untenable  and  had  erroneously  been

accepted by the Commission.

13. Ms. Manika Tripathy Pandey, learned advocate

appearing  for  the  DDA,  however,  reiterated

that after an allotment is cancelled, there

can only be a fresh allotment and the question

of revival of a dead proposal could not arise.

Ms. Tripathy emphatically relied on clause 4

of the Scheme which indicates the procedure to

be  followed  in  the  matter  of  allotment  of

flats  and  the  same  is  reproduced

hereinbelow :-

13

“The  estimated  cost  of  the  flat  as given  in  this  letter  is  provisional and  is  subject  to  revision  on  the completion  of  the  flat.   Any  price difference between the estimated cost and  the  cost  as  it  works  out  on completion as per costing formula in vogue  would have to be paid alongwith the  fifth and final instalment.  No definite  time  by  which  the construction,  of  the  flats  will  be completed  can  be  indicted  at  this stage.  Normally it takes 2 ½ years period for completion of the project. Sometimes,  due  to  unforeseenable reasons completion of project may get delayed.  For delay beyond 30th month upto  36th month  till  the  issue  of demand  letter  for  fifth  and  final instalment the allottee shall be paid interest @ 7% per annum and beyond 36th month  interest  will  be  paid  10%  on his/her deposit.

The specific flat number will be allotted  through draw of lots.  The date  and  time  for  the  draw  will  be announced  through  the  leading newspapers.   The  demand  letters  for fifth and final instalment indicating the  number  of  flat  allotted,  the amount  payable,  documents  to  be furnished  and  formalities  to  be completed  for  taking  over  the possession will be sent by RAD post to the allottee at the address on record with the DDA within one month from the date of draw of letter for allotment of specific flat number.  Failure to furnish  all  the  requisite  documents within a period of 120 days from the date of issue of the demand letter for fifth and final instalment will result

14

in  automatic  cancellation  of  the allotment.”

14. Ms. Tripathy submitted that the allotment of

flats by the DDA was to be done in two phases.

In the first phase the estimated cost of the

flat  is  given  on  a  provisional  basis  and

subject to revision on the completion of the

flat. No definite time period was indicated

but it has been mentioned that it takes about

2  ½  years  to  complete  the  project,  which

period  could  also  stretch  upto  36  months.

For delay beyond the 30th upto the 36th month,

till the issue of demand letter for the fifth

and final instalment, the allottee shall be

paid interest @ 7% per annum and beyond 36th

months  interest  will  be  paid  @  10%  on  the

deposit  of  the  applicant.   In  the  second

phase, on the basis of a ‘draw of lots’ a

specific flat number would be allotted and the

demand  letter  for  the  fifth  and  final

installment indicating the number of the flat

15

allotted, the amount payable, documents to be

furnished and formalities to be completed for

taking  over  possession  would  be  sent  by

Registered  post  with acknowledgement due to

the allottee at the address on record with the

DDA, within one month from the date of the

draw for allotment of a specific flat number.

Ms. Tripathy laid stress on the condition that

failure to furnish all the requisite documents

within a period of 120 days from the date of

issue of the demand letter for the fifth and

final  installment  would result in automatic

cancellation of the allotment.   

15. Ms.  Tripathy  contended that having remained

silent  despite  having  received  the  demand

notice as also the show-cause notice, which

led  to  the  termination  of  the  appellant’s

allotment, the appellant waited for 2 ½ years

before making payment of the purported balance

when, in fact, the amount had to be calculated

on  the  basis  that  the  restoration  was,  in

fact, a fresh allotment.   

16

16. Ms. Tripathy urged that since the notice of

demand  in  respect  of  fifth  and  final

installment  had  been  duly  sent  to  the

appellant  by  Registered  Post  with

acknowledgement due at the address given by

him, there would be a statutory presumption

under Section 114(f) of the Evidence Act that

the demand notice had been duly served on the

appellant.   Ms.  Tripathy  urged  that  the

Commission rightly dealt with the matter and

no ground had been made out on behalf of the

appellant for interference with the same.

17. As  will  be  evident  from  what  has  been

mentioned hereinbefore, the real controversy

in  this  appeal  appears  to  be  whether  the

demand letter dated 10th September, 1996, for

payment  of  the  fifth  and  final  installment

had, in fact, been received by the appellant

and as to whether non-compliance with the same

resulted  in  termination  of  the  appellant’s

allotment and whether the restoration of such

17

allotment  on  a  representation  made  by  the

appellant  would  amount  to  a  fresh  or  new

allotment.   

18. As submitted by Ms. Tripathy, except for the

statutory presumption under Section 114(f) of

the Evidence Act, there is no other material

to suggest that the demand notice had actually

been received by the appellant.

19. The assertion of service of notice on account

of such presumption has been denied by the

appellant as a result whereof onus of proving

service shifted back to the respondent.   The

respondent DDA has not led any other evidence

in support of the presumption of service.  In

such circumstances, it has to be held that

such  service  had  not  been  effected.

Therefore, when on the appellant’s application

for  restoration  of  the  allotment,  the

allotment  was  restored, the only conclusion

that can be arrived at is that  the earlier

18

allotment continued as no cancellation and/or

termination had, in fact, taken place in terms

of clause 4 of the Scheme in question.

20. As far as the MRTP Commission is concerned,

there is no definite finding on the question

of service of the demand notice. On the other

hand,  the  Commission  presumed  that  the

appellant  must  have  had  knowledge  of  the

allotment which had been widely publicised in

leading  newspapers.   According  to  the

Commission, it was for the appellant to have

made inquiries relating to completion of the

construction and it should have waited for a

demand notice to have been sent to him.  In

our view, the Commission also erred in placing

the onus of proof of service of the demand

notice  on  the  appellant,  since  except  for

denial  there  is  nothing  else  that  the

appellant  could  have  produced  to  prove  a

negative  fact.   As  we  have  indicated

hereinbefore,  the  presumption  under  Section

19

114(f) of the Evidence Act is a rebuttable

presumption and on denial of receipt of the

Registered  letter  from  DDA  the  appellant

discharged his onus and the onus reverted back

to the respondent to prove such service by

either  examining  the  postal  authorities  or

obtaining a certificate from them showing that

the registered article had been delivered to

and had been received by the appellant.  It is

on a mistaken understanding of the provisions

of Section 114(f) of the Evidence Act that the

Commission  came  to the erroneous conclusion

that the allegation of unfair trade practice

on the part of the respondent authority had

not  been  proved.  In  our  view,  from  the

material on record it is quite clear that the

respondent authority was unable to prove that

service of the demand notice for the fifth and

final  installment  had  been  effected  on  the

appellant.

20

21. Once  it  is  established  that  the  notice  of

demand for the fifth and final installment had

not been received by the appellant, the other

consequences,  as  indicated by Ms. Tripathy,

namely,  automatic  termination  and  fresh

allotment, cannot follow.  In any event, in

our view, the restoration of the allotment did

not amount to a fresh allotment on the basis

of which the fresh demand notice could have

been issued.

22. Having  regard  to  what  has  been  stated

hereinabove, in our view the MRTP Commission

erred in law in shifting the onus of proof of

service of the demand notice on the appellant

and in discharging the notice of inquiry and

vacating  the  interim  order  issued  under

Section  12-A  of  the  M.R.T.P.  Act.   The

allegation  of  unfair  trade  practice  on  the

part  of  the  respondent  authority  stands

established.  The decision of the Commission

is, therefore, liable to be set aside.   

21

23. The  appeal  is,  therefore,  allowed.   The

judgment of the MRTP Commission impugned in

this Appeal is set aside. The respondents are

directed to accept the sum of Rs.1,63,512/-,

which  had  been  deposited  by  the  appellant

prior  to  receipt  of  the  demand  notice,

together  with  interest,  if  any,  accrued

thereupon,  in  full  and  final  settlement  of

their dues in respect of the flat allotted to

the  appellant  and  to  hand  over  possession

thereof to the appellant within a month from

the date of receipt of a copy of this order.

24. Having regard to the facts of the case, the

parties will bear their own costs.  

..................J (ALTAMAS KABIR)

22

...................J (MARKANDEY KATJU)

New Delhi Dated: 02.09.2008

23