DELHI DEVELOPMENT AUTHORITYversusKANWAR KUMAR MEHTA AND ORS. ETC.

A                  DELHI DEVELOPMENT AUTHORITY
                                        v.
                KANWAR KUMAR MEHTA AND ORS. ETC.

                             SEPTEMBER 16, 1996

B              [K. RAMASWAMY AND G.B. PATTANAIK, JJ.)

          Urban Development :

         Land allotted by Delhi Development Authority-Delay in developing
C the lands due to High Court's stay order on the land acquisition-On equit}
  DDA charging escalation at 16.62% per annum-High Court ordering escala-
  tion to be charged at the same 7% p.a. the rate of interest which DDA pays
  to unsuccessjitl applican~n appea~ held, escalation charged at 16.62%
  per annum justified, DDA to adjust the 7% p.a. interest on the deposits from
D the date ·of original draw till the communication of letters of allotment.

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 13053 of
    1996 Etc.

         From the Judgment and order dated 265.95 of the Delhi High Court
E   in C.W.P. No. 5329 of 1993.

          Arun Jately and V.B. Saharya for the Appellant.

          M. Shekhar, Bimal Roy Jad, Devendra Singh, S.M. Garg, N. Shekhar,
F Ms. Arnita Gupta and Ms. Chandra Kumari for the Respondents.
          The following Order of the Court was delivered :

          Delay condoned..

          Leave granted.
G
          We have heard learned counsel of both sides.

          The question of law that arises for consideration in these appeals is:
    whether the High Court was right in directing calculation of interest @ 7%
H   of the escalation charges on the principle of equity?
                                        364
                         D.DA v. K.K. MEHTA                           365

       The facts of the case are not in dispute. On March 27, 1991 draw of A
plots was made for allotment of 5000 plots in Sectors 23 and 24 of Rohini
Scheme in Delhi. Between 6th April, 1991 and March 27, 1991, around
3000 orders of allotment came to be issued. Only Woo persons are yet to
be issued of the allotment letters. It is settled law that the rate of plot is
as is prevailing on the date of communication of the allotment letter. B
Before the letters of allotment was communicated to the rest of the
suceessful applicant, the owners of the lands acquired under the notifica-
tion issued under Section 4(1) had approached the High Court and had
stay of further proceedings. Consequently, the issuance of the letters of
allotment was stopped. Subsequently, the stay was vacated on August 4, C
1992 and it is stated in the counter-affidavit that the owners had ap-
proached this Court by way of appeal and in September 1992 this Court
had dismissed the special leave petitions. In the meanwhile, the Govern-
ment of India have pre-determined the cost of the land for allotment of
the acquired land for the year 1993-94 effective from April 1, 1993 to
March 31, 1994 at Rs. 2675.29 per square mtr. The ODA evolved the D
principle of calculating the cost of developmental charges at par with cost
of living index rate which admittedly worked out to 16.62% per annum. On
that basis, it had worked out the cost of plot at the rate of Rs. 1579.71 per
square mtr. On the basis thereof, they recalculated the cost of allotment
and issued letter of allotment to the reEpondents. The respondents came E
to challenge that order in the High Court. The impugned judgment made
on August 11, 1995 in C.W.P. No. 196/94 was declared invalid. The Division
Bench of the High Court has ultimately held that when the DDA seeks
equity, it must also do equity. When the claimants have been directed to
bear interest only at the rate of 7% per annum oa the amount deposited F
by them towards advance payment deposited adjustable of the successful
bidders and refund is made to the unsuccessful applicants with the same
rate of interest, the DDA should equally charge the escalation charges at
the rate of 7% per annum. Therefore, directions to deposit the costs of
plot at 16.62% per annum as escalation cost is unjust in law.
                                                               /
                                                                             G

      Mr. Arun Jaitley, learned senior counsel appearing for ODA, has
contended that the DOA, with a view to do justice to the claimants, have
not demanded the rate of charges prevailing as on the date of allotment as
determined by the Government of India namely, Rs. 2675.79 per square         H
    366                   SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A metre and instead worked oQt special equity by enhancing the cost of
    escalation charges at 16.62% per annum as per the cost of living index. The
    High Court was not justified in giving the direction to charge the escalation
    only at the rate of 7% per annum. We find force in the contention. Though
    Shri M. Shekhar and Shri Bimal Roy Jad, learned counsel appearing for
B   the respondents, have contended that the ODA has not produced any
    material to show that the escalation cost would be at the rate of 16.62 and
    that there is no evidence to show that between the date of the stay by the
    High Court and th~ date of the demand, this amount has been expended
    for developmental charges bythe DDA. That point was not raised before
C   the High Court, the appellant is not entitled tO raise the contention. We
    find no force in the contention. It is the very basis on which the appellant
    has justified their demand in the High Court which was also accepted by
    the High Court, on the basis of which, it proceeded that due to grant of
    stay by the High Court the escalation charges have increased for improve-
    ments effected. Consequently they worked out the escalation charges ap-
D   plying the special equity namely, the basis of living costs of index which
    admittedly was 16.62% per annum.

          Under those circumstances, we are of the view that the basis on
    which all parties have proceeded and the High Court has accepted was
E   that the escalation charges for improvements have been worked out at
    16.2% per annum. On that basis re-calculation came to be made and the
    pre-determined rate value was determined at the ra~e of Rs. 1579.71 per
    square yard. The direction of the High Court, that they have to pay, while
    working out equity at 7%, is not based on any rational principle. The High
F   Court lost sight of the fact that the appellant had spent money for develop-
    ment of the plots and to meet the cost demand in allotment letters was
    made at reduced rate. It is also stated that the two allottees who were in
    the low priority· list in 1991 had same benefit of pre 1991 rates and the
    same be extended to the respondents. Though this contention was not
    raised in the High Court, nor the High Court had advantage of it, we are
G   of the view that it has no legal foundation is a mistaken allotment to them
    in 1991 is no ground to allot to respondent at the same rate. .

          The appellants are, however, directed to charge the rate of interest
    at 7% on the deposits made by the respondents till the date of the letter
H   of allotment. Time for payment of the amount at the rate of Rs. 1579.71
                             D.DA v. K.K. MEHTA                        367

A   per square metre is extended for six months and the appellant is directed A
    to deduct the difference of the rate of interest on the deposit amount at
    7% from the date of the original draw till the date of communication of
    the letters of allotment.

           The appeals are accordingly allowed. The order of the High Court   B
B   is set aside, but iri the circumstanees, without costs.

    G.N.                                                  Appeals allowed.



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