Phool Chandra Ram v. Bihar State Housing Board — 1995 DIGILAW 145 (PAT)

Judgment R.M.Prasad, J. 1. In this application the petitioners pray for quashing of that portion of the allotment letters, as contained in Annexure-5, whereby the prices have been fixed as on 30.6.1992 and for issuance of a direction to the respondents t reduce the prices of the weaker section income group (Janta flats) built at Harmoo, Ranchi, in 1974 and, further, for a direction to them to fix the prices of the flats as on the date of their completion as was done in the cases of allotment of similar flats in the past. Further, the petitioners also pray for a direction to the respondents to make necessary repairs of the said Janta flats, including electrical fittings, sewerage system and drain age system as also for eviction of the unauthorised occupants of the said flats before the agreement is executed pursuant to the allotment letters (Annexure-5) with the petitioners. 2. In short, the case of the petitioners is that in the year 1974, 360 Janta flats were constructed at Harmoo, Ranchi, by the respondent Bihar State Housing Board (hereinafter referred to as the Board). The Board in the year 1980 made allotment of some of the said Janta flats to the applicants for the same at a price of Rs. 11,000.00 . However, as some of the Janta flats remained unallotted, the Board issued fresh notice inviting applications for allotment of 275 Janta flats vide notice published in the "Ranchi Express" dated 28.8.1988, a newspaper published from Ranchi. In response to the said notice, the petitioners, in September, 1988, applied for allotment of the said flats along with a deposit of Rs. 2,500.00 as earnest money. 3. Further case of the petitioners is that even after the said notice, in the year 1991, some allotment of Janta flats was made and Rs. 37,640.80 was fixed as disposal price. In support of this, an allotment letter dated 7.8.1991 has been annexed as Annexure-4. Later lottery was held and in May, 1992, the individual allotment letters were issued to the petitioners. A copy of one of such letter as a specimen has been filed as Annexure-5 to the writ application. In the said allotment letter which has been issued by the Manager, Estate-cum-Addl. Secretary of the Board (Respondent No. 2), Rs. 61, 120.00 has been fixed as the price for the said flats and the petitioners were asked to deposit Rs. A copy of one of such letter as a specimen has been filed as Annexure-5 to the writ application. In the said allotment letter which has been issued by the Manager, Estate-cum-Addl. Secretary of the Board (Respondent No. 2), Rs. 61, 120.00 has been fixed as the price for the said flats and the petitioners were asked to deposit Rs. 9, 924.00 within 30 days and thereafter to get the agreement executed. As per the terms and conditions of the said allotment, the petitioners have been required to pay Rs. 518.00 or Rs. 595.00 (as the case may be depending on the date of payment) per month to the respondent by way of monthly instalment and the total price is to be finally cleared in 180 such instalments. 4. The petitioners claim to belong to the economically weaker section of the society. It is contended that the Janta flats were constructed for such a weaker section. They come from very poor class and are labourers, petty shop-keepers, foot-path hawkers, Rickshaw pullers and the like and they do not have their own home. According to the annual income submitted by the petitioners to the respondents along with their applications, their annual income does not exceed Rs. 9, 240.00 , i.e. at the rate of Rs. 770.00 per month. It is stated that for such flats which are not worth living at the present the petitioners have been asked to deposit Rs. 518.00 or Rs. 595.00 per month which for a limited and small income earned by the petitioners is impossible as they have to maintain their family as well. According to the petitioners, the said flats are in a very bad shape. In most of them no door, no windows and wooden frame are even fitted. The roof are also leaking. It is also devoid of electrical Fittings and sanitary fittings, some of which have been removed by the anti-social persons who were in unauthorised occupation of the said flats. The sewerage and drainage system is also not functioning and in some cases it is not even provided at all. Thus, it is stated that the houses as such are not worth living without making huge expenditure for their repairs which at least would be about Rs. 10, 000.00 to make it worth living. 5. The sewerage and drainage system is also not functioning and in some cases it is not even provided at all. Thus, it is stated that the houses as such are not worth living without making huge expenditure for their repairs which at least would be about Rs. 10, 000.00 to make it worth living. 5. A counter-affidavit has been filed on behalf of the respondents in which, inter alia, it has been stated that in the year 1980 the price of the said flats was fixed at Rs. 11, 000.00 which was a tentative one and, in August, 1987, the price on recalculation was fixed at Rs. 37, 640.80 and not in the year 1991, as wrongly alleged in the writ application. Their further case is that the said price was fixed in the light of the observation of this Court in C.W.J.C. No. 1779 of 1989 (R). The respondent have denied the fact that the constructions of Janta flats were complete in the year 1974. However, it is stated that before .the Bihar State Housing Board Act, 1982 came into force the distributions allotment of flats was used to be made in accordance with the seniority of the eligible applicants but since after coming into force of the said Act such flats are allotted on the basis of lottery. On 21.8.1987, lottery was held for allotment of various Janta flats for the applicants prior to 1987 but the allotment could not be made as in all there were only five applicants. Therefore, the second advertisement was published in August, 1988 (Annexure-1) for the remaining Janta flats for which the petitioners were also applicants. It is stated that the Board constructs houses/flats after taking loan with high interest from various financial organisations and as such the final costing of the houses/flats depend on the interest to be paid by the Board to such financial organisations. The Board has also denied the aforementioned allegations in regard to the flats being under unauthorised occupation as also as regards the fact that the flats in question are in damaged condition. The Board has also denied the aforementioned allegations in regard to the flats being under unauthorised occupation as also as regards the fact that the flats in question are in damaged condition. However, it is admitted that getting the flats vacant some persons are using the same but as soon as the actual allottee enters into agreement with the Board and asks for possession through the S.D.O. of toe Housing Board, the actual physical possession will be given to them by requesting the occupants to vacate the flat. 6. Mr. Anwar, learned Counsel appearing for me petitioners submitted that the said flats having been constructed for the economically weaker income group of the society categorised as Janta income group, the action of the respondents in increasing the price to Rs. 61, 000.00 and odd is wholly unreasonable and arbitrary. He also contended that it is not in dispute that on the date when the advertisement was issued in response to which the petitioners filed applications, the Janta flats in question were ready for allotment. It is also not in dispute that in the year 1990 the said flats were allotted only for Rs. 37, 000.00 and odd whereas the petitioners, who also filed their applications in September, 1988, are required to pay almost double the price which 1991 allottees were required to pay. Thus, he submitted that the action of the respondents in fixing price at almost the double rate for the petitioners is wholly unreasonable, arbitrary and violative of Article 14 of the Constitution of India. 7. On the other hand, Mr. Sinha, learned Counsel appearing for the respondents submitted that the petitioners cannot claim that the prices of the flats which were put on lottery in the year 1992 should be the same as those which were put in the year 1987 as the petitioners were not even applicants in the year 1987. According to him, the prices are enhanced on the basis of the amount of interest accruing and added with the price as existed in the year 1987. The Board who constructs houses/flats after taking loan from the financial organisations are required to repay the loans with interest, as such to meet such financial burden the interest is charged from the allottees of the subsequent years. The Board who constructs houses/flats after taking loan from the financial organisations are required to repay the loans with interest, as such to meet such financial burden the interest is charged from the allottees of the subsequent years. He submitted that the allotments have already been made to the petitioners and the vacant possession may be given to them by the Board in accordance with law immediately after they enter into an agreement. He also contended that some of the petitioners and other allottees of the same time have already accepted the allotment and have also deposited the amount and executed the agreement as well. In this regard Mr. Sinha submitted that at least those persons who have already executed the agreement are bound by the terms of the said agreement and cannot be permitted to resile from the same. 8. In support of the same learned Counsel appearing for the Board placed reliance on a decision of this Court reported in 1993 (1) PLJR 361 (Rajendra Pd. Singh V/s. State) wherein the Court declined to grant any relief to the petitioners of that case at the belated stage. In the said case, the auction purchasers of MIG houses executed deed of agreement on various dates in 1984-85 and also made part payment. However, when the payments were not being made regularly, the Board issued a direction to the auction purchasers to deposit balance amount within the time fixed, failing which action under Section S9-A of 1982 Act was to be taken for recovery of the amount due. The validity of the same was questioned in the same application. The Court held that the purchaser through open auction bid cannot be equated with allottees under hire purchase scheme. The Housing Board may adopt different modes for payment of instalments and fix different conditions for the two types of agreements and such classification cannot be termed to be unreasonable and arbitrary. The Court further held that auction purchaser cannot be allowed at a belated stage to challenge the terms and conditions of the agreements and mode for payment for which they agreed. However, in the said case, the Court directed that the Housing Board cannot charge interests with respect to those houses, possession of which was not given. 9. Mr. The Court further held that auction purchaser cannot be allowed at a belated stage to challenge the terms and conditions of the agreements and mode for payment for which they agreed. However, in the said case, the Court directed that the Housing Board cannot charge interests with respect to those houses, possession of which was not given. 9. Mr. Anwar, learned Counsel appearing for the petitioners, on the other hand, submitted that the said case is not applicable to the facts of the present case. It was a case of auction where the auction purchasers themselves made offer and pursuant thereto the agreement was executed. Thus, this Court held that they were not entitled for any relief in the said case. 10. According to Mr. Sinha, learned Counsel appearing for the respondents, in fact, the lottery was held on 30.5.1992 and the prices of the flats were, assessed on the basis of the construction cost, development charges and interest paid to the loanee. Thus, he submitted that it is not unreasonable as only interest which the Board has paid or is to pay to the loanee is being charged over and above the prices fixed in the year 1987. 11. On the other hand, Mr. Anwar learned Counsel appearing for. the petitioners, in reply submitted that the Board being a Public Authority cannot be permitted to act as a private earning business concern. 12. From the facts stated in the counter-affidavit it appears that except the bald statement that there is no delay in holding lottery by the Board in June, 1992, nothing has been stated as to why when the application were invited in 1988 and the petitioners in response to the same had already submitted their applications, the Board did not held lottery for four long years and allowed the interest to accumulate. It has, however, been vaguely stated that in the year 1990 the lottery could not be done due to agitation by the applicants regarding modification in the process of lottery and that in the year 1991 the modification in the process of lottery was done by the Board but again certain objections were raised by the displaced persons, in solving of which the Board took too much time and, finally, when it was solved in the year 1992, the lottery was held. In my opinion, the said plea of the Board without any supporting material cannot be accepted. Thus, I find that the Board has not reasonably explained as to why it took four years to make the allotments. 13. In the present case, the allotment was made by way of lottery and no offer was made by the applicants participating in the lottery. In fact, the price has been fixed by the Board which is wholly unjustified and arbitrary. The Board being the Public Authority cannot be permitted to act like an ordinary businessman. 14. Mr. Anwar, learned Counsel appearing for the petitioners relied on a decision of this Court reported in 1992 (1) BLJR 367 (Citizens Cause, Ranchi V/s. Bihar State Housing Board and Ors. ) in which the question involved was he to whether the allottees were liable to pay the price of the flats as per valuation prevalent in the year 1987 when the lottery was held, or in the year 1990 when the allottees were called upon to execute the agreement and deposit the necessary amount. The Court, on consideration of-the laches on the part of the Housing Board and applying the equitable principle held that the disposal price of flats should be fixed as it was in the month of August, 1987 when the lottery was held, keeping in view the actual cost of construction and other charges as on that date. 15. In the instant case, I find that the Board has not come up with any specific reason for delay in holding of auction and that too with a supporting material in support of the plea taken in Paragraph 15 of the counter-affidavit. In that view of the matter, in my opinion, the Board cannot be permitted to charge interest for the period 1988 to the 31st of May, 1992, when the allotment letters were issued to the petitioners. 16. It is well settled that even the State action in commercial/or contractual transactions with private parties must be in consonance with Article 14 and not arbitrary. Decision making process of public authorities, if influenced by extraneous and irrelevant considerations would vitiate the decision even if it is without bias. The Supreme Court in the case of Sterling Computers Limited V/s. M/s M and N Publications Limited and Ors. Decision making process of public authorities, if influenced by extraneous and irrelevant considerations would vitiate the decision even if it is without bias. The Supreme Court in the case of Sterling Computers Limited V/s. M/s M and N Publications Limited and Ors. reported in -- held that though public authorities have some dissection in contracts having commercial element, discretion is not absolute and must be governed by some norms and procedures in public interest and for public good and that the same is opened for judicial review. 17. In the present case, it is not in dispute that as per the scheme framed by the Board, the Janta flats were constructed for allotment to the economically weaker section income group of the society categorised as Janta Income group by the respondents, such as, the labourers, petty shop-keepers, foot-path hawkers, Rickshaw pullers and the like, who does not own their own home. The petitioners who belong to the said, category have been made to suffer by charging higher price of the flats which were ready on the date when the advertisement was issued on account of gross laches on the part of the Board in delaying the allotment process and thereby making allotment after lapse of four years. 18. In the circumstances, I am of the view that it is equitable that the disposal price of the flats should be refixed by excluding the interest for the period from the date of notice in August, 1988 to the date of allotment on 31st May, 1992. 19. I, therefore, allow this writ application, quash that part of Annexure-5 which is a specimen copy of the latter received by the allottees wherein the disposal price has been mentioned as Rs. 61,120.00 and direct the Board to refix the disposal price keeping in view the actual cost of construction and other charges as on the date of the notice, i.e., 20.8.1988, as also the interest after the date of allotment daring which period the petitioners were defaulters in not depositing the price without prejudice to their claim in the present writ application. This re-valuation must be done within two months from the date of receipt/production of a copy of this order and the allottees are directed on deposit the requisite amount in terms of Regulation, 1983 read with the terms is the allotment letter and comply all the formalities within a month thereafter. This re-valuation must be done within two months from the date of receipt/production of a copy of this order and the allottees are directed on deposit the requisite amount in terms of Regulation, 1983 read with the terms is the allotment letter and comply all the formalities within a month thereafter. If any of the allottees has deposited the amount in terms of Annexure-5, the Board shall adjust the same against the dues of that particular allottee. After all the formalities are complete, the Board is directed to hand over the vacant possession of the flats is question to the petitioners.