Laws laid down by supreme court

HOUSING BOARD CHARGING MORE FOR BEST LOCATION


HOUSING BOARD CHARGING MORE FOR BEST LOCATION

This is the case where allotment of house is done    by draw of lots in lottery .The system of lottery decides the fate of the allot tee by sheer luck and housing board cannot charge more for corner plot or for best location –alleges complainant before the consumer court at Indore .Housing board asked the allot tee to pay 10% extra for corner plot and 5% extra for best location in spite of the fact this privilege to the complainant was by lottery and sheer luck thereof. District Consumer Dispute Redressal Forum gave order in favour of complainant and directed the board not to levy the extra charges .Board went in appeal before the State Consumer Dispute Redressal Commission, Madhya Pradesh questioning the correctness of the order passed by the district court. State commission reverted back the order passed by the District forum on the bases of documents such as boards advertisement related to registration of Higher Income Group Houses and also the manual issued by the board in the year 1978 about such levy .National Commission however felt that allotment was made on the basis of lottery and sheer luck, hence further levy policy is not applicable to the present case. The matter now comes before the apex court of the country.

Before we discuss on the relevant point, it is pertinent to mention that housing is the area on which Supreme Court has delivered number of judgments giving its very clear version on each issue. The first case on housing M.K. Gupta V/s Luck now Development Authority in the year 1993 is the exhaustive order which covered every aspect related to housing .However there were as many as 64 cases on housing and the leading case named as Ghaziabad Development Authority V/S Dinesh kumar and all the cases were decided together in 2002 giving clear verdict on each issue. Some cases went in appeal also and final verdict on all issues were again given in the year 2004 in the matter of Ghaziabad Development authority v/s Balbir Singh SC, 2004, [CTJ] PAGE 605.

The issue of escalation of cost was also discussed in all the above cases and it was held by the court that board can charge more on the bases of prevailing rate at the time if cost of material goes higher in duration of the construction. But at the same time this was also made clear that under the circumstances if the allot tee cannot pay more due to his financial situation and constraints, he can surrender the allotment and shall be entitled to interest on his deposits . Normally there is always a clause in the prospectus issued by the housing boards on the issue when allot tee withdraws the allotment. In such cases Housing board make some deduction as specified in the prospectus and returns the balance amount to the allot tee who withdraws on his own interest and choice. But Supreme Court in the matters of Ghaziabad Development Authority& others in 2004 held that allotted under the circumstances where he is not able to meet the additional expenses, is entitled to interest on his money instead of any deduction.

But in the present case situation is different. Charging more than normal is for corner house and best location. Question before the Hon; ble Supreme Court is as to whether board can ask for escalated cost. For coming to the logical end on the issue, Supreme Court went into the details of the policy of the board. In this context terms and conditions for the registration of allotment are the important factor which is as here under –

‘as per the prevailing rules of board, on  house situated in the corner, a price of 10% and house situated on the main road, a separate price of 5% shall have to be given in addition to the average land of the house. The price for more land shall be taken separately which will be informed as per the actual map certificate at the time of allotment of the house. As per rules, these rates and other charges shall be payable separately. ‘

From the reading of above terms and conditions, two things are clarified –

Charges for extra land will be demanded in case of corner plot allotted, meaning thereby that corner plot shall have extra land in compare to other plots .Since many allotters shall wish to have corner plot ,this privilege could be given by lottery system and not by discretion of the authorities . In other words lottery system was not for the purpose of giving extra land without charging but to avoid arbitrary decision by the authorities. Similarly many allot tees would   like to have best location plot even willing to pay more. Here also lottery was meant to avoid allegation of partiality. But it never meant to cause loss to the authority by not charging for extra land or for premium location. This is also clear from board’s advertisement related to registration and from the provisions in the manual of the board.

In yet another case on housing National Consumer Dispute Redressal Commission found Delhi Development Authority going beyond the Principal of equality while allotting the flats to the customers and charging towards the cost in arbitrary manner.

When it comes to the question of pricing and cost of the flat, land or any dewelling, it is an established law that deciding the cost is the authority of housing board and court do not interfere in the domain of the board. But in a case of Rajender Prasad & others against DDA, this was not the situation. Allottees were charged lesser amount under the same scheme with no changes in landcost, construction cost and even taxation structure. Delhi Development Authority after allotment of flats to group of customers including complainant in present case, made two major changes-

•           The share money shall not form part of costing and

•           Service charges shall not be part of overall cost of land.

 

.National commission in its order dated 19.5.2014 held it discrimination and arbitrariness against those who had been delivered possession by charging more. Commission was of the opinion that this change in formula for calculating total cost has to be made uniform ally applicable to all the allotees in same area under the same scheme if certain allotments were made before passing of resolution It is bounded duty of DDA to refund amount to such allot tees if charged extra . 

 

In nut shell courts interpret the law as spelled out in their own rules; they do not change the basic structure of the legislature but give logical and meaningful interpretation to the clause wherever authorities act arbitrarily.

 

 

DR PREM LATA

EX-MEMBER ,CONSUMER COURT

www.consumerawakening.com

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