Swam Lata Kanth v. State Of Bihar — 1999 DIGILAW 1141 (PAT)

Judgment 1. One Ram Sharan Prasad Kanth, husband of petitioner no.1 and father of petitioner no.2 was the allottee of a flat constructed by the Bihar State Housing Board (the Board, hereinafter). According to the petitioners, after his death on 5.6.1994 petitioner no.1, his widowed wife continues to be in occupation of the flat, in exercise of her rights as the allottee, on the basis of the express consent given by each of her children, including petitioner no.2. The two petitioners seek to challenge the demand for additional payment (of Rs.46,039/- as on 28.2.1999) made by the Board in demand letters as contained in Annexure 5 series. It is the case of the petitioners that all payments in full and final settlement of the consideration for the flat was made long ago and they seek a direction to the Board to execute the necessary transfer deeds in respect of the flat in favour of petitioner no.1.2. The facts of the case which are quite simple and undisputed can be stated thus. In 1987 the Board announced its scheme for construction of 384 flats under self financing scheme. The flats were to be constructed in three categories and in this case we are concerned with a flat in category A, having an area of 1450 sq.ft. The projected period for completing the construction was two years and the tentative price of a category A flat was fixed at Rs.2,20,0007-. The allotment was to be made by lottery and the payment schedule as indicated in the scheme brochure was as follows : Rs. 15,000/- along with the application. Rs. 60,000/- within 30 days of the issuance of the allotment letter. Rs. 55,000/- within six months from the date of the 1st instalment. Rs. 55,000/- within one year from the date of the 1st instalment. 2. The balance amount, including interest, misc. expenses, if any, etc. was to be paid by way of full and final payment before possession of the flat would be delivered to the allottee. 3. The deceased husband of petitioner no.1, who was a retired Government servant made an application along with Rs.15,000/- being the earnest money for allotment of a flat in category A against 6% quota reserved for retired Government servants. 4. A lottery was held on 27.6.1989 in which the husband of petitioner no.1 was allotted flat no. 3. The deceased husband of petitioner no.1, who was a retired Government servant made an application along with Rs.15,000/- being the earnest money for allotment of a flat in category A against 6% quota reserved for retired Government servants. 4. A lottery was held on 27.6.1989 in which the husband of petitioner no.1 was allotted flat no. 3-SFa-3/35 and letter dated 1.7.1989 (Annexure 1) was issued to him from the Board intimating him about the allotment of the flat in his favour. Following the allotment, according to the provisions of the scheme, the husband of petitioner no.1 made payments to the Board in the following manner: (i) 31.07.1989 1st instalment of Rs.66,000/-. (ii) 23.12.1989 2nd instalment of Rs.55,000/-. (iii) 25.06.1990 3rd instalment of Rs.55.000/-. 5. In the meanwhile on 1.3.1990 he was issued a formal letter of allotment (Annexure 2) of the aforesaid flat in his favour. In para 3 of this letter it was stated that in the brochure containing the details of the scheme (Vivrani Pustika) the valuation of the flat was fixed at Rs.2.20 lacs on an interim and completely adhoc basis; that in case of any increase in the price of the flat on account of land acquisition, development work and other incidental and miscellaneous works connected with the construction of flat(s), the allottee would be liable to pay the difference along with the last instalment, before possession of the flat was handed over; that the valuation of the flat fixed by the Board would be final and the Board would not be required to furnish any figures for accounts for the same; that payments to the Board were to be made in the following manner : 1st instalment : 30% of the adhoc value within 30 days of the issuance of the allotment order. 2nd instalment : 25% of the adhoc value within six months from the date of issuance of the allotment order. 3rd instalment : 25% of the adhoc value within one year from the date of issuance of the allotment order. 4th & final instalment : The difference between the final value and the total payments made by the allottee, including the earnest money deposited at the time of making application. 6. As noted above, the husband of petitioner no.1 had already made payments in due time, as stipulated in the formal order of allotment dated 1.3.1990. 7. 4th & final instalment : The difference between the final value and the total payments made by the allottee, including the earnest money deposited at the time of making application. 6. As noted above, the husband of petitioner no.1 had already made payments in due time, as stipulated in the formal order of allotment dated 1.3.1990. 7. The issuance of the order of allotment was followed by the execution of a registered deed of agreement between the Board and the allottee, the husband of petitioner no.1. Clause 3(b) of the agreement was as follows: "Purchaser agrees to pay the final instalment to the Board wnich shall include the difference between the estimated cost and final cost within one month from the date of demand before taking possession." 8. Thereafter, the petitioner was issued letter, dated 4.8.1993 (Annexure 3) in which the interim price of the flat as on 31.8.1993 was fixed at Rs. 3,58,334/- (being the amount deposited by the allottee along with interest) a balance of Rs.43,862/- was arrived at. The husband of petitioner no.1 was accordingly required to make payment of Rs.43,862/- by 31.8.1993 by way of the last instalment. It was made clear that on non-payment the amount would increase due to accumulation of interest and the blanace as on 30.9.1993 would be Rs.44,388.00. 9. As required by letter, dated 4.3.1993 the husband of petitioner no.1 deposited a sum of Rs. 43,862/- on 21.8.93 as evidenced from the receipt at Annexure 3/1. 10. Thus, the final instalment having been paid, the Executive Engineer of the Board by letter, dated 6.10.1993 intimated that the allottee could be given possession of the flat and the actual possession was handed over to the husband of petitioner no.1 on 14.2.1994. Since then the petitioners are in possession of the flat and are awaiting the execution of the deed of transfer in their favour. 11. On 25.2.1999 petitioner no.2 received a personal slip (Annexure 5) issued by the Executive Engineer of the Board in which a demand was made for an additional payment of Rs. 46,039/- as being the balance on 28.2.1999. On enquiry it transpired that two letters were earlier purported to have been issued from the Board in the name of the original allottee, the husband of petitioner no.1 on 28.12.1998 and 23.1.1999 respectively. 46,039/- as being the balance on 28.2.1999. On enquiry it transpired that two letters were earlier purported to have been issued from the Board in the name of the original allottee, the husband of petitioner no.1 on 28.12.1998 and 23.1.1999 respectively. In those letters it was stated that in addition to the payments made earlier, the allottee was still required to make payment of the balance amount of Rs. 45,325/- as 31.1.1999 which increased to Rs.46,039/- as on 28.2.1999. According to the petitioners, the officials of the Board did not explain to them the reason for which the additional payment was being demanded and hence, they were left with no option but to come to this court in this writ petition. 12. in the counter affidavit fifed on behalf of the Board none of the statements made on behalf of the petitioners as noted above is denied. It is admitted that the allottee made payments as claimed by him in terms of the allotment order, dated 1.3.1990 and the final instal ment of Rs.43,862/- as directed by letter, dated 4.8.1993. The impugned additional demand is, however, justified in para 12 of the counter affidavit which is as follows ; "That it is stated that demand of Rs.45,325/- upto 31.01.1999 or Rs.46,039/- upto 28.02.1999, it has been decided to determine the cost of the flat in month of first information of allotment i.e. the month of holding the lottery and after capitalising the same with effective rate of interest, the deposits be adjusted towards capitalised value and interest to be calculated on reducing balance basis. The eamest money is to be adjusted in the month of last payment as amount of earnest money is non-interest bearing." 13. On what basis the interim price of the flat was fixed at Rs.3,58,334/- as on 31.8.1993 and why the allottee was given to understand that the payment of Rs. 43,862/- would constitute the final instalment, in full and final settlement of the consideration of the flat, is not explained or stated in the counter affidavit. It is also not clear what was the need for the change in the mode of computation of the price of the flat and despite repeated queries in course of hearing of the case no answer in that regard was given by the counsel for the Board. 14. It is also not clear what was the need for the change in the mode of computation of the price of the flat and despite repeated queries in course of hearing of the case no answer in that regard was given by the counsel for the Board. 14. From the computation given at the end of the above quoted statement in the Boards counter affidavit, it appears that it was decided by the Board to determine the price of the flat at Rs.205,000/- at the time of holding of the lottery. It is clear that the price of the flat at that time could only be notional as its construction was yet to be completed. On the price so fixed interest was added till the entire price was paid up.To be fair to the Board, interest was also allowed on the deposits made by the allottee (excepting the earnest money of Rs.15,000/-) and the difference of the two sums is the balance which is now being demanded as additional price. There may not be any objection to this particular mode of determination of the price of the flat but what is objected to is the introduction of this mode of construction long after the transaction between the Board and allottee was completed and the only obligation left for the Board was to execute the transfer deed. It is further to be noted that according to the Boards own showing there is no real increase in price on account of any of the factors indicated in the allotment order, namely, land acquisition, development work or other incidental and miscellaneous work connected with the construction of the flats. The enhancement of the price, on the other hand, is solely due to adopting a particular made of computation and substituting it in place of the earlier mode. 15. Further, this particular mode of computation seems to have been adopted simply because it provides for application of interest over a far longer period. The notional valuation of the flat being determined on the date of the lottery, it allows the Board a far longer period for the application of interest till the final payment was made by the allottees. It may be noted here that the projected time for the construction of the flats was a period of two years. The notional valuation of the flat being determined on the date of the lottery, it allows the Board a far longer period for the application of interest till the final payment was made by the allottees. It may be noted here that the projected time for the construction of the flats was a period of two years. Its construction was, however, delayed by two years and the letter for making final payment was issued to the allottee on 4.8.1993. The allottee in this case cannot be held responsible for the delay in construction as he admittedly made all payments in due time. The responsibility for delay in construction must, therefore, lay with the Board. It, thus, follows that by adopting this particular mode of computation of the price of the flat the Board is trying to capitalise on its own lapses. This, to my mind, would be wholly unfair, unjust and unreasonable. 16. At this rate, it will be a never ending process. It is to be noted that even in the demand letters at Annexure 5 series it is nowhere stated that it was the final demand based on the final determination of the valuation of the flat Therefore, even in case the petitioners, instead of coming to this court had made the payment in compliance with the Boards demand, it would be still open for the Board to sit over the matter for two years or more and then come out with another mode of computation for raising further demands, for instance, the Board might say that it was further shifting back the date for determining the valuation of the flat and further that the valuation of the flat, on the date the scheme was settled was fixed at Rs. 2 lacs or Rs. 1.97 lacs. It would, thus, deceptively tell the allottee that it was further reducing the valuation of the flat. What it would not tell the allottee, however, is that though lowering down the price of the flat by rupees five to seven thousands, it was gaining an even longer period for accrual of interest and at the end of the computation, therefore, it would be in a position to raise further demands against the allottee. 17. It seems that the Board never indicates a cut-off date for fixing the valuation of the flat and it never seems to close its account. 18. 17. It seems that the Board never indicates a cut-off date for fixing the valuation of the flat and it never seems to close its account. 18. It is further to be noted that the allottee was never informed about this mode of computation and it is being introduced more than five years after the final instalment was paid by the allottee. 19. For the foregoing reasons, I am unable to sustain the impugned demand as contained in Annexure 5 series. The impugned demand letters are accordingly set aside and the Board is restrained from realising any additional money from the petitioners in respect of the flat. As full and final payment for the flat has been made long ago, it is further directed to complete the transfer of the flat in favour of the heirs of the deceased allottee in accordance with law within three months from the date of receipt/production of a copy of this order. 20. In the result, this writ petition is allowed but with no order as to costs.