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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.
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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
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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.
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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
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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
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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
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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.
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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
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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.
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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
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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.
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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
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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 :-
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“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 = 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
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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 = 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
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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 = 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.
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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
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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
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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
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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.
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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.
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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)
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……………….J
(MARKANDEY KATJU)
New Delhi
Dated: 02.09.2008