ORDER
1. These 140 writ petitioners
who were allotted plots on reserve price in the year 1976 are aggrieved by the action of the Ludhiana Improvement Trust, Ludhiana (hereinafter to be referred to as ‘The Trust’) for demanding additional amount on account of the increase in price of the plots. This increase in price has occurred on account of the award of the Court regarding compensation compensation to the landowners.
2. The respondent-Trust vide resolution dated November 27, 1974, invited applications from weaker sections for allotment of plots on lease-hold basis. It is averred that in spite of the fixation of reserve price on subsidised rates, the response to this notice was very poor. Thereafter, the Trust resolved that the plots be allotted on free-hold basis. Accordingly, in the year 1976, the Trust invited applications for the allotment of residential plots from persons belonging to the economically weaker sections and low income groups. The size of the plots varied from 100 square yards to 250 square yards. The reserve price of plots measuring 100 square yards to 150 square yards was fixed at Rs. 40/- per square yard and in respect of the plots measuring 200 and 250 square yards the price was fixed at Rs. 50/ – per square yard. In response to this notification, the petitioners submitted their applications and were allotted plots in the year 1976. A copy of one such letter of allotment has been appended as Annexure 1-4 with the writ petition. In this letter of allotment, it was, inter alia, provided that the balance 75 per cent of the amount along with 10 per cent interest shall be recovered in seven half-yearly instalments. Further, the allottee was debarred from selling the plot or the house constructed thereon for a period of 10 years. It was further stipulated that “within a period of one month of the receipt of this letter you will enter into an agreement on a stamp paper of Rs. 3/-
with the Trust regarding/relating to allotment and the conditions of sale.” It was further stipulated that in case the conditions laid down in the letter of allotment were acceptable to the allottee he will complete various formalities within the stipulated period failing which it would be presumed that he was not interested in the allotment of the plot.
3. The petitioners aver that subsequent to the allotment, the agreement was executed and clause 16 of the agreement regarding the payment of the enhanced price could not be added in the agreement because the form of agreement given in the Ludhiana Improvement Trust Land Disposal Rules, 1964 (hereinafter referred to as the ‘rules’) did not contain any such clause. They further aver that some plots were sold in public auction. Such persons as have purchased the plots in open auction were not subjected to the conditions imposed upon the allottees.
4. In the year 1987, the Trust demanded enhanced amount from the allottees including the petitioners. Notices were issued to each one of the petitioners. Copies of three out of these notices have been appended as Annexure P-6 to Annexure P-8. By these notices, the petitioners were called upon the deposit additional amounts on account of the enhanced compensation awarded to the landowners. This demand for enhanced price has been challenged in this petition on various grounds.
5. A written statement has been filed on behalf of the. Trust. It has been, inter alia, pleaded by way of preliminary objection that the petition is highly belated and is even barred on account of the availability of an effective alternative remedy by way of arbitration as provided for in the agreement. Objection regarding the maintainability of a joint petition has also been raised. On merits, it has been interi alia averred that the. petitioners have not attached a complete copy of the application form. According to the respondents the application form was as appended with the written statement at Annexure R-1. It has been further averred that a conditional offer of allotment was made to the petitioners,
according to which they were bound to abide by various terms and conditions of the rules and also to execute an agreement. The respondents further aver that under the provisions of the rules even the concessional price could not be less than the cost price of the land and as such clause 16 in the agreement which enables the Trust to charge higher price and bound the allottee to pay it was neither illegal nor unfair. It has also been averred that the provisions in the agreement could not be challenged after a lapse of 12 years. A copy of one of the agreements executed between the parties has been appended as Annexure R-2 with the written statement.
6. During the pendency of the case Civil Misc. Application No. 4818 of 1988 was moved on behalf of the petitioners praying, inter alia, for the issue of a direction to the Trust to execute the sale deeds in favour of the allottees sanction the site plans, deliver possession of the sites and issue no objection certificates for water and sewerage connections without insisting upon the payment of additional amount. On January 31, 1989 M. S. Liberhan, J. passed life following order on this application:–
“Counsel for the respondent states that they will give an opportunity of hearing to the writ petitioners, and the writ petitioners be directed to appear before the Executive Officer, Improvement Trust, Ludhiana. The parties are directed to appear before him on February 21, 1989, on which date he will fix the case in the presence of parties for hearing them on any date available to him. In view of this, the case shall come up for hearing after the decision by the Executive Officer.”
“In pursuance to the above direction, the representatives of the petitioners were heard and the Executive Officer passed an order dated April 11, 1989. A copy of these proceedings has been placed on record and is Mark ‘A’. In a nutshell it has been stated by the Executive Officer that the enhanced price was being claimed by the Trust because of the fact “that the Courts had enhanced the amounts of compensation payable to the parties, whose lands had been acquired by the Trust for the execution of the scheme of
Kitchlu Nagar on account of the amendment in Land Acquisition Act, 1894, made in the year 1984, vide which not only the rate of compensation was enhanced but also solatium and interest had been increased from 15% to 30% in addition 12% over and above the price of the land was granted from the date of Notification u/S. 36 till the date of delivery of possession……. The amount of Rs. 116
per square yard was fixed after calculating the amount of compensation, the expenses of development charges which includes Road, Water supply, Electric Supply, Development of Park and Sewerage in addition to establishment charges.”
7. I have heard Mr. J. N. Kaushal on behalf of the petitioners and Mr. S. P. Karwal, for the respondents. Mr. Kaushal has submitted that the petitioners had applied for the allotment of plots in pursuance to a notice. In this notice there was no stipulation for any enhancement of the price. Accordingly, the learned counsel has contended that clause 16 in the agreement which provided for the enhancement of price is contrary to the provisions of rules. Learned counsel further submits that the plots had been allotted to weaker sections under the 20 point programme of the then Prima Minister of India and clause 16 was even contrary to the provisions of S. 23 of the Contract Act. The public policy was to help the poor and the action of the respondents in incorporating clause 16 was totally violative of S. 23. It is also contended that the action was violative of Art. 14 of the Constitution of India inasmuch as the Trust was charging higher price from the allottees while no such demand was being made from those who had purchased plots in open auction. The learned counsel further contended that Rule 5 contemplated the allotment of plots on concessional price. Once the Trust had decided to allot plots at a concessional price to weaker sections, it was estopped from demanding higher price at a later stage.
8. Mr. Karwat, on the other hand, contended that according to the scheme of the rules, the price of plots could not be less than the cost price. Accordingly, he submitted that
the petitioners had no claim either under the rules or in equity. He further submitted that even the local displaced persons who had a much better claim for allotment of plots as their land had been compulsorily acquired by the Trust were liable to pay the higher price. As such, the petitioners had no right to claim that somebody else should pay towards the price of the plots allotted to them. Regarding to the validity of the contract, the learned counsel submitted that the claim of the petitioners was wholly untenable. He went to the extent of arguing that if a contract was void as claimed by the petitioners, it would be void in entirety and not in parts. It was also pointed out that the contract did not violate any principle of public policy or law. According to the counsel, there was no prohibition in law which may have been violated in the instant case. It was also contended that the challenge to the agreement at this belated stage was wholly untenable.
9. For a proper appreciation of the controversy, it is necessary to notice a few provisions of the rules Learned counsel for the parties are agreed that these rules are statutory and thus have the force of law. The relevant provisions are contained in rules 5,7 and 21, which read as under:–
“5. (i) The trust shall thereafter fix the freehold price or premium and/ or ground rent at the market rates for all land available for disposal. Such fixation shall be made either by plot or for a group of plot or for an area as a whole.
(ii) The trust shall similarly fix a concessional price at which land comprised in a scheme will be sold to local displaced person. The concessional price shall not be less than the cost price of the land to the Trust, i.e. the estimated cost of acquisition of the land plus development charges etc. Not more than one plot of land when demarcated into plots, shall be sold to a local displaced person. The size of the plot to be, allocated shall be in keeping with the quantum of land acquired and as for as possible, he will be accommodated near his own land. Only after the claims, if any, of this category of persons have been met, the land shall be sold to others.
7. The Trust may reserve a suitable number of plots in any scheme for military personnel on active service, political sufferers, social workers, genuine Housing Co-operatives or an other category of deserving persons treating them at par with the local displaced persons subject to the condition that the plots thus allotted will not be allowed to be alienated for a period of ten years unless houses are constructed thereon.
21. In the case of free hold disposal, an agreement for sale in form ‘C’ shall be executed when the payment is made in full and in form ‘D’ when the payment is to be made in instalments, which shall provide besides other things, for all the architectural and other condition that the purchaser has to fulfil and which are not covered by the Building bye-laws. The purchaser shall be required to deposit 5% of the total value of the plot subject to a maximum of Rs. 500/- and minimum of Rs. 100/- as security for the due fulfilment of these conditions. If the building is not completed in accordance with the condition set forth in the agreement for sale, the security will be forfeited and if completed in accordance with the conditions, it will be refunded without interest. If the building is completed in accordance with the conditions of the agreement for sale and the sale money etc. has been paid in full, the sale deed shall be executed.”
A perusal of these rules would show that under Rule 5(i) the Trust has to fix the price or permit and/or ground rent at the market rates. Under clause (ii) of Rule 5, the Trust can fix a “concessional price” which “shall not be less than the cost price of the land to the Trust”. Further rule 7 provides for reservation of a suitable number of plots for various categories of persons including any other category of “deserving persons”. However, under the rule such categories have to be treated at par with the local displaced persons. Under R. 21, the forms for the execution of the agreements etc. have been prescribed. The agreement has to be executed in form ‘C’ when the payment is made in full and in form ‘D’ when the payment is made in instalments. A perusal of this rule indicates that the
agreement forms are not exhaustive. It is categorically provided that the agreement for sale in form ‘C’ or ‘D’ shall provide besides other things for all the architectural and other conditions that the purchaser has to fulfil and which are not covered by the Building bye-laws….”
10. Mr. Kaushal contends that the form prescribed under R. 21 is statutory form. In this form nothing like clause 16 providing for enhancement of price is contained. Consequently, the clause is beyond the statutory agreement prescribed under the rules and cannot be sustained.
The said clause provides as under:–
“16.1 undertake that in the event of the present rate of land offered to the original owners being revised and enhanced by the competent authority as a result of reference made by the trust u/S. 18 of the Land Acquisition Act and now pending before the Land Acquisition Tribunal, Ludhiana. I shall pay to the trust such other amount as may be fixed by the Trust to meet the additional cost of land arising out. Price of the land shall be tentative subject to fixation by the competent authority. I and my legal heirs and successors shall be bound to pay the difference.”
I do not think that the counsel is right in his submission. The statutory rule has to be read as a whole. According to these rules, the Trust is competent to fix the price of the plots which is normally equal to the “market rates”. Concessional price can be fixed in the case of local displaced persons or in case of the various other categories contemplated under R. 7. Even in their case, the price cannot be less than the cost price. In this background it is clear that Cl. 16 of the agreement merely implements the scheme of the rules and does no violation thereto. It merely ensures that the allottee is liable to pay the cost price of the plot. It asks the allottee for no more.
11. Consequently, the petitioners could be asked to pay the cost price of the plots including the expenditure incurred on development charges. A provision as made in the agreement to ensure the fulfilment of such
a condition postulated under the rule. The agreement cannot be said to be contrary to the rules.
12. Nor am I persuaded to hold that the clause is contrary to public policy. The rule contemplates the payment of market price by a purchaser. In case of special categories like displaced persons etc. the obligation to pay cost price is mandatory. Clause 16 of the agreement is calculated to ensure that the allottee pays the market price. In my view, no principle of public policy is violated in the instant case. It is no doubt true that persons belonging to weaker sections can be allotted plots at concessional rates. Under the rules, which embody the public policy such concessional rates cannot be below the market price. No principle of public policy is shown to have been violated in the present case. It appears that the respondents are merely implementing the provisions of the rules. Consequently, the contention based on the alleged violation of S. 23 of the Contract Act cannot be sustained.
13. It was next contended that the action of the Trust was even violative of Art. 14 of the Constitution of India. Certain plots had been sold in public auction. Those who purchased the plots in auction were not being asked to pay any additional price. As against this, the petitioners were being asked to pay an additional price which was far more than the reserve price originally fixed. In my view, the auction purchasers constitute a separate and distinct class of persons. They are not at par with the persons like the petitioners who were allotted plots at concessional rates. They paid the price in a competitive auction. In the normal course of events such a price is equivalent to the market price. The petitioners contend that this price was lower than the price being demanded from them by the Improvement Trust. This may or may not be so. No date has been furnished in the petition in support of this contention. Assuming the price paid at the time of auction in the year 1976 was lower than the price now being demanded from the petitioners, no grievance tenable in law can be said to have been made out. The petitioners were at liberty to participate in the auction. Secondly, an amount of money paid in the year 1976 would have
increased many-fold by now. In the absence of specific data, it is not possible for me to hold that the action of the respondents has resulted in any arbitrariness or violation of Art. 14 of the Constitution of India.
14. It has been contended by Mr. Kaushal that vide letter dated September 8, 1980, the Trust has informed Shrimati Jagjit Kaur that the provision regarding enhancement of price as a result of the decision in the reference u/S. 18 of the Land Acquisition Act is not applicable to Plot No. 21-D. Consequently, the learned counsel contends that the action of the respondents in demanding higher price is barred by the principle of estoppel. This letter, firstly, was issued in the year 1980 when the references u/S. 18 were pending. The decision by the Court appears to have been rendered much later. Secondly, the obligation to pay cost price arises out of the rules. There is no estoppel against law. Thirdly, it is not clear from the record as to how the Superintendent (Lands) could have bound the Trust by issuing the letter under reference. Further, it is not shown that any general decision was taken or that similar letters were sent to all the petitioners. It is also apparent from the record that the decision to charge the petitioners the enhanced price was taken by the Trust vide Resolution dated November 20, 1985 (Annexure P-9). Even the validity of this Resolution has not been questioned and no prayer for the quashing of the Resolution has been made. In this situation, I am unable to uphold the plea of the learned counsel for the petitioners.
15. The points raised in the petition and considered above are in fact concluded by the Full Bench judgment of this Court in Avtar Singh v. State of Haryana, (1990) 98 Pun LR 1. The right of Trust to charge higher price, the validity of the contract and the arguments based on Art. 14 of the Constitution of India have been considered by their Lordships in detail. In view thereof, the pleas raised on behalf of the petitioners cannot be sustained. Even otherwise, fixation of price is basically a matter for the authorities to consider is a matter for determination by experts. Courts cannot substitute their own opinion unless the action is apparently arbitrary. The position in
this behalf has been clarified by two Division Bench judgments of this Court in C.W.P. No. 1270 of 1985 decided on July 8, 1986 and C.W.P. No. 14891 of 1989 decided on Nov. 20, 1989.
16. I thus find no merit in this writ petition. It is accordingly dismissed. The parties are, however, left to bear their own costs.
17. Before parting with the judgment it may be mentioned that C.M. Application No. 4331 of 1991 was filed on behalf of the petitioners, in which certain new points were sought to be raised. Since the arguments in the main case had been concluded on June 8, 1991 and the judgment had been dictated during vacation, I had dismissed this application at the motion bearing vide my order of July 8, 1991. However, in response to Mr. Kaushal’s request, learned counsel for the parties were heard by me today before pronouncing the order. In a nut-shell, Mr. Kaushal’s submission was that the demand of the Trust for Rs. 116/- was absolutely arbitrary and there should be some forum where the petitioners may agitate this matter. Mr. Karwal on the other hand submitted that no such contention had been raised in the writ petition and, therefore, it could not be raised at this belated stage.
18. Having heard learned counsel for the parties, I am of the view that there is no data before me on the basis of which the question may be gone into at this stage. It is, however, clarified that the dismissal of writ petition would not debar the petitioners from resorting to such other remedy as may be open to them under the law. Since the point had not been specifically raised in the writ petition and adequate data was not furnished, I have expressed no opinion on this aspect of the matter.
19. Petition dismissed.