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Each one of them was allotted a flat and he paid the price voluntarily. Ratio |
They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat. Ratio |
I The Authority in its affidavit in reply in terms stated that it is willing to take back the fiats and to repay them the full price. Ratio |
The transaction is complete, viz., possession of the flat is taken and price is paid. Ratio |
At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to re open and wriggle out of a concluded contract only partially. Ratio |
In a similar and identical situation a Constitution Bench of this Court in Har Shankar & ors.vs The Dy.Excise & Taxation Commr.& ors.has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. PRE |
Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. PRE |
By such a test no contract would ever have a binding force. PRE |
The jurisdiction of this Court under article 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. PRE |
It would thus appear that petitions ought not to have been entertained. PRE |
However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the Authority is discriminatory inasmuch as no surcharge was levied on flats in MIG scheme... |
MIG flats involved in these petitions were constructed and were available for allotment in November 1976 and the lots were drawn in January 1977. PRE |
There is one more MIG scheme at Munirka where the allotment took place at or about the same time but in which case no surcharge was levied. PRE |
The contention is that once for the purpose of eligibility to acquire a flat, the criterion is grounded in income brackets, MIG, LIG, et . PRE |
those in the same income bracket form one class even for the purpose of determining disposal price of flat allotable to them irrespective of situation, location or other relevant determinants which enter into price calculation and therefore, in the same income group there cannot be differentiation by levying of surchar... |
It is difficult to appreciate how article 14 can be attracted in the circumstances hereinabove mentioned. PRE |
Cost price of a property offered for sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. PRE |
Except the submission that the Authority has a proclaimed policy of constructing and offering flats on 'no profit no loss ' basis which according to Mr. Nariman has a statutory flavour in the regulations enacted under the Act, the Authority is under no statutory obligation about its pricing policy of the flats construc... |
When the flats were offered to the petitioners the price in round figure in respect of each flat was mentioned and surcharge was not separately set out and this price has been accepted by the petitioners. Ratio |
The obligation that regulations are binding on the Authority and have provided for a statutory price fixation formula on 'no profit no loss ' basis will be presently examined but save this the Authority is under no obligation to fix price of different flats in differed schemes albeit in the same income group at the sam... |
The Authority having the trappings of a State might be covered by the expression 'other authority ' in article 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme. Ratio |
Those who opt to take flats in a particular income wise area wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract article 14. Ratio |
But to say that throughout its course of existence the Authority would be bound to offer flats income groupwise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure. Ratio |
In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide. Ratio |
The experts alone can work out the mechanics of price determination; Court can certainly not be expected to decide without ' the assistance of the experts (See Prag Ice & oil Mills and Anr.vs Union of India) In the leading judgment it has been observed that mechanics of price fixation have necessarily to be left to the... |
716 This Court in Avinder Singh vs State of Punjab,(l) approved the following dictum of Willis on Constitutional Law, page 587: "The State does not have to tax everything in order to tax something. PRE |
It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably . PRE |
The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation. PRE |
What is forbidden by article 14 is discrimination amongst persons of the same class and for the purposes of allotment of flats scheme wise, allottees of flats in the same scheme, not different schemes in the same income bracket, will have to be treated as a class and unless in each such class there is unequal treatment... |
Therefore, in the State of Gujarat & Another vs Shri Ambica Mills Ltd., Ahmedabad, etc., Mathew, J., speaking for the Court observed as under: "A reasonable classification is one which includes all who are similarly situated and none who are not. PRE |
The question then is what does the phrase 'similarly situated ' mean ? PRE |
The answer to the question is that we must look beyond the classification to the purpose of the law. PRE |
A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law. PRE |
The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good." PRE |
" Is the classification income wise scheme wise violative of article 14 in any manner ? The Authority formulates income wise area wise schemes for constructing flats. Ratio |
Petitioners contend that there should be only income wise classification wholly ignoring area and time factor for classification. Ratio |
They say that allottees of flats in all MIG schemes irrespective of area and location and irrespective of when the flats were constructed form one class for determining price of flats. Ratio |
There is no merit in this contenting. Ratio |
What are price determinants ? Ratio |
Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation. Ratio |
Their cost varies time wise, place wise, availability wise. Ratio |
All these uncertain factors cannot 717 be overlooked for the purpose of classification. Ratio |
Therefore, it is not possible to hold that allottees of flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing policy only valid basis for classification would be income wise, area wise, time wise, scheme wise, meaning all flats constructed at or about the same time in ... |
And there is no discrimination amongst them. Ratio |
Pricing policy is an executive policy. Ratio |
If the Authority was set up for making available dwelling units at reasonable price to persons belonging to different income groups it would not be precluded from devising its own price formula for different income groups. Ratio |
If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. Ratio |
In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply or can... |
People in, the MIG can be charged more than the actual cost price so as to give benefit to allottees of flats in LIG, Janata and CPS. Ratio |
And yet record shows that those better off got flats comparatively cheaper to such flats in open market. Ratio |
It is a well recognised policy underlying tax law that the State has wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. Ratio |
It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a violation of article 14, (see East India Tobacco Co. vs State of Andhra Pradesh). Ratio |
Can it be said that classification, income wise cum scheme wise is unreasonable ? Ratio |
The answer is a firm No. Ratio |
Even the petitioners could not point out unequal treatment in same class. Ratio |
However, a feeble attempt was made to urge that allottees of flats in MIG scheme at Munirka which project came up at or about the same time were not subjected to surcharge. Ratio |
This will be presently examined but aside from that, contention is that why within a particular period, namely, November 1976 to January 1977 the policy of levying surcharge was resorted to and t hat in MIG schemes pertaining to period prior to November 1976 and later April 1977 no surcharge was levied. Ratio |
718 If a certain pricing policy was adopted for a certain period and was uniformly applied to projects coming up during that period, it cannot be the foundation for a submission why such policy was not adopted earlier or abandoned later. Ratio |
It was, however, said that levying of surcharge runs counter to object for which the Authority was set up, namely, to make available housing accommodation on 'no profit no loss ' basis. Ratio |
The argument proceeds on the assumption that the principle of 'no profit no loss ' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat. Ratio |
Principle of 'no profit no loss ' has been explained by the respondents. Ratio |
It IS said that in the over all working, planning and execution of projects which the Authority undertakes as part of development of Delhi, the integral part of it being construction of flats for different income groups the motives and working of it would not be profit oriented but would work on 'no profit no loss ' ec... |
This would not for a moment suggest that the principle of 'no profit no loss ' should apply either to every flat or to every scheme or to every piece of land developed by the Authority. Ratio |
It would be impossible for the Authority to function on such fragmented basis and such a policy statement has not been made by the Authority. Ratio |
Of course, some public statement appears to have been made that the overall working of the Authority is on "no profit no loss ' basis. Ratio |
Respondent 1 has been able to point out that the Authority 's housing scheme, as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded o... |
It is also shown that till Municipal authority takes over municipal services the Authority spends for the same and incurs cost. Ratio |
Apart from that petitioners have not been able to show that the Authority is actuated by commercial profit oriented approach in its overall working. Ratio |
It is, however, necessary to examine the contention whether this 'no profit no loss ' policy statement has any statutory flavour as contended by Mr Nariman. Ratio |
The regulations styled as the Delhi Development Authority (Management and Disposal of Housing Estates) Regulations, 1968, ( 'Regulations ' for short) are framed in exercise of the powers conferred by section 57 and were laid before the Houses of Parliament as required by section 58. Ratio |
Disposal price has been defined in Regulation 2(13) to mean in relation to a property such price as may be fixed by the Authority for such property. Ratio |
There is not the slightest or even a remote reference to 'no profit no loss ' formula for 719 determining the cost price. Ratio |
A quick survey of the Regulations do A not spell out any formula for price determination on the basis of 'no profit no loss '. Ratio |
Whether the power to determine disposal price is in the Housing Committee will be presently examined. Ratio |
Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the Authority and as price has been fixed by the delegate of the Authority even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the Authority. Ratio |
It is at this stage necessary to examine the contention that in the case of Wazirpur and Munirka LIG schemes which came up during this very period no surcharge was levied and, therefore, there is invidious discrimination amongst members of the same class. Ratio |
Again the argument proceeds that income wise classification alone is valid. Ratio |
Here time wise (November 1976 to January 1977) classification is relied upon. Ratio |
It is an admitted position that no surcharge is levied on MIG flats at Munirka. Ratio |
The affidavit in reply shows that the land on which flats are constructed in Munirka MIG scheme turned out to be very rocky with the result that the construction cost in respect of flats at Munirka MIG scheme worked out at Rs. 456 per plinth area per metre whereas in respect of Lawrence Road it came to Rs. 401.54 p. On... |
The Authority, therefore, thought that if surcharge is levied on flats under MIG scheme in Munirka area the disposal price would be very high and would be beyond the reach of MIG. Ratio |
It is in this background of the special facts that 'no surcharge was levied in respect of any flat in MIG in Munirka area. Ratio |
Project wise price fixation cannot be dubbed as arbitrary or discriminatory in comparison with other projects at different places. Ratio |
It was, however, pointed out that 132 flats in Rajouri Garden MIG scheme were disposed of without levying surcharge as component of sale price. Ratio |
It is pointed out in affidavit in reply that those flats were handed over to the Government of India for meeting their needs for staff quarters and that was done in the year 1978. Ratio |
It is also pointed out that the Government charged half the price of the land in respect of these 132 flats and, therefore, surcharge was not levied. Ratio |
There is two fold fallacy in this submission. Ratio |
Government ordinarily is in a class by itself and its needs of staff quarters deserve to be met in large public interest. Ratio |
Government has not got any undeserved benefit at the cost and risk of petitioners. Ratio |
Hence their complaint in this behalf is without merits. Ratio |
It was next contended that surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not answer any 720 rational, tangible, scientific cr understandable formula. Ratio |
How the figure of surcharge has been worked out has been explained in detail in affidavit in reply. Ratio |
Briefly recapitulating the same, it may be mentioned that initial estimates for 304 MIG flats in Prasad Nagar area were prepared in or about 1971 and the estimated cost was Rs. 1,17,83,200 and that on March 21, 1972, an estimate of Rs 1,09,97,100 was sanctioned. Ratio |
After the work commenced and the actual cost started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000 which was approved by the Vice Chairman on September 18, 1976. Ratio |
According to the revised estimate the approximate disposal cost for each flat came to Rs. 68,202 and the cost of land per dwelling unit was Rs. 7,008. Ratio |
Extracts of original notes of Financial Adviser (Housing) and the approval of the same by the Vice Chairman have been set out in the affidavit in reply. Ratio |
The subsequent revised estimates show that disposal price of each flat would be Rs. 75,200. Ratio |
In the meantime the Income Tax Department wanted to acquire 40 MIG flats in Prasad Nagar area and the same were offered at the price of Rs. 75,000, per flat. Ratio |
Commissioner of Income Tax accepted the price. Ratio |
This became the starting point for working out the disposal price in that period. Ratio |
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