SANJAY KISHAN KAUL, J. ( 1 ) DELHI Development Authority (DDA) was constituted under the Delhi Development Act, 1957 (hereinafter to be referred to as the said Act ) with the avowed object, unfulfilled as it may be, for the development of Delhi according to plan and for matters ancillary thereto. ( 2 ) IN order to meet the requirements of housing needs of the residents of Delhi, vast strips of land were acquired and placed at the disposal of DDA for its housing projects. The dda propounded various schemes for construction of dwelling units. One mode was to allot the flat after carrying out construction and registration under the scheme was based upon the economic condition of the registrants. Under this scheme, Higher Income group (HIG), Middle Income Group (MIG), lower Income Group (LIG) and Janta flats were constructed and thereafter sold to the registrants. The number of registrants were much higher than the original number of flats envisaged to be constructed and, thus, periodically draw of lots had to be held from time to time to make the allotment. ( 3 ) THE DDA simultaneously adopted another mode of construction of flats where registrants were financial participants in construction of the flats by contributing funds from time to time. These were the self-financing schemes (SFSs ). The allottees were registered under these schemes and draws of lots were held, since under these schemes also the number of registrants were far beyond expectation and the immediate construction ability of the respondent DDA. The registrants, who were successful in draws of lots, were issued allocation letters allocating the particular category of flat in a locality and zone. Thus, it was a mere matter of chance as a result of the draw as to in which area, the allottee would be allocated the flat. Pursuant to these draws, allocation letters were issued specifying the terms and conditions specifically, which were already set out in the brochure and the rules and regulations applicable as framed under the said Act. However, no specific flat number was assigned at that stage and the allottee only knew that he was to get a flat on a particular floor in a particular locality, zone and area. ( 4 ) THE allocation letter provided for payment of four instalments towards 90% of the tentative price of the flat. However, no specific flat number was assigned at that stage and the allottee only knew that he was to get a flat on a particular floor in a particular locality, zone and area. ( 4 ) THE allocation letter provided for payment of four instalments towards 90% of the tentative price of the flat. The word tentative has material bearing as in all cases by the time the construction of the flats was complete, there was considerable increase in the final cost and the contributions towards the first four instalments towards 90% of the estimated cost did not actually reflect 90% of the final cost. At the stage when the flats were almost ready for allotment, draws of lots were to be held allotting specific flat numbers and thereafter the fifth and final demand letter was issued allotting specific flat number and making demand for the balance payment to be paid within the stipulated period of time. It is on payment made pursuant thereto and completion of necessary formalities, the possession of the flat was handed over. ( 5 ) IN the allocation letter issued, dates were stipulated for making payments of the first four instalments and there were consequences of making default in payment. Payment could be made belatedly with interest up to a maximum period of 90 days without applying for extension. The interest chargeable was @ 12% per annum for the first month and @ 18% per annum for the subsequent period and there was provision for automatic cancellation of the flat in case of failure to make payment even during the extended period of time. The cancellation due to nonpayment of any instalment could, however, be revoked and the registration restored on payment of dues with interest along with cancellation and registration charges for each cancellation, subject to availability of the allocated flat. ( 6 ) THE allocation letter originally envisaged a time period about two and a half years for construction of the project. However in case of delay, interest was payable @7% per annum for the period of six months and thereafter @ 10% per annum to be adjusted against the cost of the flat. ( 7 ) THE DDA came out with a number of self-financing schemes in early 1980s evoking large response. However in case of delay, interest was payable @7% per annum for the period of six months and thereafter @ 10% per annum to be adjusted against the cost of the flat. ( 7 ) THE DDA came out with a number of self-financing schemes in early 1980s evoking large response. The VSFS was announced in november, 1986 and in view of large number of unsuccessful applicants in the first four sfss, a decision was taken to permit even the applicants of the first four SFSs to apply for being considered for the draw of lots under the V SFS. The brochure provided that the scheme would be governed by the terms and conditions contained in the brochure and the DDA (Management and Disposal of housing Estates) Regulations, 1968 (hereinafter to be referred to as the said regulations ). It would be relevant to reproduce some of the paras of the scheme as under: "mode of payment: the demand-cum-allotment letters issued will indicate the prescribed dates by which the payments will be required to be made, the demand letter for 5th and final instalment will be issued separately and this may also include the possible increase in the cost of the flat. No separate letters will be issued for any of the subsequent instalments. It will be obligatory on the part of the allottees to make the payments before the due dates indicated therein. In the event of default the allocation of the flat in the scheme will liable to be cancelled. Surrender/cancellation: if the allotment of flat is cancelled (either on the allottee s own request or due to the non-fulfilment of the terms and conditions of allotment by the allottee) after the expiry of 1, 2, 3 and 4 months from the date of issue of demand-cum-allotment letter, interest calculated @ 12% p. a. for the 1st month and 18% p. a. for the 2nd, 3rd and 4th month on the amount demanded in the demand letter shall be charged in addition to the amount of penalty specified above. If the applicant does not pay the subsequent instalments before the due date the allotment of the flat in the scheme will be cancelled and the amount deposited till date will be refunded to the penalty after deducting 10% of the amount of the registration deposit. If the applicant does not pay the subsequent instalments before the due date the allotment of the flat in the scheme will be cancelled and the amount deposited till date will be refunded to the penalty after deducting 10% of the amount of the registration deposit. General (ii) Intending purchasers are also requested to study carefully the Delhi development Authority (Management and Disposal of Housing Estate) regulations, 1968 and the various deeds which are appended thereto before filling up the application form. The booklet containing these Regulations is available on payment at the form Sales counter of DDA. (iv) The above terms and conditions will be followed generally but the DDA reserves its right to alter any of them in its discretion if and when considered necessary. The altered terms, if any, will supersede these terms and conditions. " ( 8 ) ANNEXURE A to the brochure specified the localities in which the flats were to be offered on the different floors and note to the said annexure stated that no preference for block, floor or pocket would be exercised. ( 9 ) EVEN in this V SFS, all the persons could not be accommodated and thereafter the VI, via, VIB, VIII and IX Self Financing Schemes were floated. The relevant terms and conditions, however, remained the same, though the clause numbers may have changed. Similarly, draws were held in these cases also and allocation letters were issued along with the terms and conditions. ( 10 ) CLAUSE 4 of the allocation letter is as under: "4. The amount demanded should be paid on or before the due date mentioned in paras 2 and 3 above. Extension of time for making payment of the amount demanded in column 7 of para 3 above upto a maximum period of 90 days from the due date is admissible. An allottee need not apply for extension but he will have to pay interest @ 12% p. a. for the first month and @ 18% p. a. for the subsequent period. In case payment of the amount asked for in the demand letter is not made within 90 days of the due date, the allotment shall stand cancelled automatically. An allottee need not apply for extension but he will have to pay interest @ 12% p. a. for the first month and @ 18% p. a. for the subsequent period. In case payment of the amount asked for in the demand letter is not made within 90 days of the due date, the allotment shall stand cancelled automatically. However, cancellation due to non-payment of first 4 instalments during the stipulated period can be got restored on payment of dues with interest along with cancellation and restoration charges for each cancellation due to non-payment, subject to availability of the allocated flat. The cancellation due to non-payment of final instalment within 120 days of the date of issue (latter of the block date) of the demand letter for 5th instalment shall not be restored under any circumstances. " ( 11 ) SOME of the other relevant general terms and conditions circulated with the letter are as under: "1. No separate demand letters will be issued for 2nd, 3rd and 4th instalments. It will be obligatory on your part to make the payment before the due date indicated; failing which the allocation is liable to be cancelled. 2. The estimated cost of the flats as given in this letter is provisional and subject to revision on the completion of the flat. Any price difference between the estimated cost and the cost as it comes out on completion as per costing formula then in vogue would have to be paid along with the 5th and final instalment. There would be no review of the cost of the flat in the intermining period. Interest @ 7% on the amount deposited will be payable for the period beyond 3 1/2 years to the date of issue of possession later if the construction of the houses is not completed by then. 3. The amount demanded should be paid on or before the stipulated due date failing which the allotment shall be liable to be cancelled without notice. In case, due to unavoidable reasons, the allottee is not able to make the payment within the due time, then he must ensure that his acceptance of the allotment reaches the Housing department before the due date of payment with a request for extension. In case, due to unavoidable reasons, the allottee is not able to make the payment within the due time, then he must ensure that his acceptance of the allotment reaches the Housing department before the due date of payment with a request for extension. A special counter has been opened at the Ground Floor of Vikas Minar where such acceptance can be given and a receipt obtained about giving the acceptance. However, those allottees who cannot come to Vikas Minar can send their acceptance by registered post. But it should be ensured that it reaches before the due date to avoid cancellation of the flat. The maximum extension would be available only for four months from the due date on payment of interest for the first month @ 12% p. a. ; for second, third and fourth month @ 18% p. a. chargeable from the due date of payment. No further extension of more than four months, in any circumstances, would be given and any request would be summarily rejected. In case the payment is not received even during the extended period and if the acceptance is received, the allotment will be cancelled without any show-cause notice and he will also be liable to pay the usual cancellation charges/penalty, etc. The broken period upto 15 days is taken as half month while that exceeding 15 days as full month for calculation of interest. The dda reserves the right to refuse the permission of extension in its discretion at any time. Delay in the sanction of the loan by the employers of the allottees, would not be considered a ground for the deferment of the due date of payment. Whether the financiers grant the loan to the allottee or not the interest on the belated payments would be payable at the fixed rates. No request for the waiving of penal interest would be considered on this ground. 4. Penalty equal to 10% of the registration deposits is to be payable for the surrender/cancellation of the flat after the draw, but within one month of issue of the demand-cum-allocation letter after which an additional interest @ 12% p. a. will be charged on the amount of first instalment and if the allocation is surrendered/cancelled within the second, third and fourth month of the issue of the demand-cum-allocation letter, an additional interest @ 18% p. a. will be charged. In case the payment is not received within the permissible period, it will be deducted from the registration deposit. In case the allottee gets the allotment of scooter garage surrendered/cancelled on the basis of draw of lots after the draw, but within one month from the date of allocation, he will be liable to pay penalty of Rs. 100/ -. If the allocation of scooter garage is cancelled (either on the allottee s own request or due to the non-fulfilment of the terms and conditions of allotment by the allottee) after the expiry of one month from the date of issue of demand-cum-allocation letter, interest calculated @ 12% p. a. on the amount demanded in the demand letter after expiry of 2nd, 3rd and 4th month @ 18% p. a. shall be charged in addition to the amount of penalty specified above. 5. If the applicant does not pay the subsequent instalments before the due date, the allocation of the flat in the scheme will be cancelled and the amount deposited till date, will be refunded without interest to the party, after deducting 10% of the amount of the registration deposits The applicant will, however, be allowed to continue to remain an registered if he opts to keep Rs. 10,000/- or Rs. 15,000/- (as the case may be) with the DDA for such purpose out of the amount so found to be refundable. 15. 10,000/- or Rs. 15,000/- (as the case may be) with the DDA for such purpose out of the amount so found to be refundable. 15. You are not allowed to transfer, mortgage or otherwise part with the possession of the whole or any part of the flat without the previous consent of the Authority in writing and the authority shall be entitled to refuse the permission in its absolute discretion: provided that in the event of a transfer being made without obtaining previous consent of the Authority in writing, such transfer shall not be recognised by the Authority and it shall be open to the Authority to cancel the allotment and resume the flat: provided further that in the event of consent being given, the authority may impose such terms and conditions as it may think and the Authority shall be entitled to claim and recover a portion of the unearned increase in the value of land i. e. difference between the premium paid and the market value of the land prevailing on the day of transfer at the time of sale, transfer, assignment or parting with the title, the amount to be recovered being 50% of the unearned increase. The decision of the authority in respect of the market value of the land shall be final and binding: provided further that the Authority have the pre-emptive right to purchase the property (less depreciation) and 50% of the unearned increase in the cost of land. ( 12 ) IN the present batch of writ petitions, the allottees are of the V and VISFSs, who were allocated flats in Jasola, Sarita Vihar and Sheikh sarai. The VISFS opened in December, 1992 and closed in January, 1993. The successful allocates were issued allocation letters specifying the due dates for payment of the first four instalments. There were some delay in construction subsequently and as a consequence of the same, in some of the cases, second, third and fourth instalments were deferred, but there was no deferring of the first instalment. There were defaults in payments by a number of allocates and the allocations were being restored on the conditions of payment of stipulated interest and registration charges. However, in August, 1996, a circular was issued by the DDA in the form of an office order dated 16. 08. There were defaults in payments by a number of allocates and the allocations were being restored on the conditions of payment of stipulated interest and registration charges. However, in August, 1996, a circular was issued by the DDA in the form of an office order dated 16. 08. 19% in respect of the regularisation of delays of the flats allotted in South Delhi under the SFSs. The circular was issued under the signatures of the Commissioner (Housing), DDA and was approved by the Vice-Chairman, DD/ on 22. 08. 1996. The said circular dated 16. 8. 1996 is in the following terms: "no. PA/ch/dda/96/150 Dated:16. 8. 1996 office ORDER sub: Regularisation of delays in respect of the Flats allotted in South Delhi under the SFS under the present delegation of powers, delays in making payments of first 4 instalments as well as payment of 5th and final instalment are regularised as per following delegation of powers: director (H) -I - Upto 3 months commr. (Housing) - Upto 1 Year principal Commr.- From 1 Year to v. C.- Full pwers 1 1/2 Year 2. With the approval of L. G. a decision was taken that the current price for south Delhi flats will be worked out by adding a surcharge of 20% from the price worked out as per old format. The approval of L. G. to this decision was granted on 12. 7. 1996. 3. There are presently cases in the housing Department where there have been delays in the making of the payments of the flats allocated/allotted in South Delhi under S. F. S. Before the aforesaid revision took place, delays of one year or so were being regularised with usual charges, i. e. , on payment of 18% interest per annum and restoration charges, etc. in few cases where delays are unusually long, current price has also been demanded. 4. With the revision aforesaid, a question has arisen whether delay should be got regularised or flats should be disposed of, at current price since that can fetch perhaps some more revenue in few cases. 5. in few cases where delays are unusually long, current price has also been demanded. 4. With the revision aforesaid, a question has arisen whether delay should be got regularised or flats should be disposed of, at current price since that can fetch perhaps some more revenue in few cases. 5. Matter has been considered and it is felt that non-regularisation of delays in deserving cases will be presented and therefore, in the cases of those who have got allocations/allotments in South delhi, if any time extension/regularisation of delay is done as per above delegation of powers, then we may do so with the following condition: "delay shall be regularised on payment of either current price or old price/usual charges, whichever is higher. " 6. This may please be approved, so that further action in individual cases is accordingly taken. Sd/- kewal K. Sharma commissioner (Housing)" ( 13 ) THE effect of the aforesaid circular was that in respect of South Delhi flats, a 20% surcharge was added. Simultaneously, it was decided that in respect of South Delhi flats where there has been defaults in making payment, the delay in making payment was to be regularised only by payment of either current price or old price/usual charges, whichever was higher. This policy decision, thus, came into force on 22. 8. 1996 when the scheme was approved by the Vice- chairman, DDA. ( 14 ) ON 27. 8. 1996, the authority constituted under the said Act passed a resolution being item No. 105 dealing with the grant of incentives to applicants of the proposed expandable Housing Scheme - 1976 for making payment on cash down. To balance the reduced cash flow because of the discount being offered for cash down payment under the scheme, it was found necessary to charge premium in the areas where the real value in the market of DDA flats in much higher and, thus, a 20% premium over the disposable cost was worke out for South Delhi flats. ( 15 ) ANOTHER office order was issued by the respondent DDA on 5. 11. 1998 also dealing with the issue of delayed payments of instalments, which is as under: "no. ( 15 ) ANOTHER office order was issued by the respondent DDA on 5. 11. 1998 also dealing with the issue of delayed payments of instalments, which is as under: "no. HAU-IX/delay/98/dda/239-M november 5, 1998 office ORDER while issuing allocation /allotment letters to the registrants of various schemes announced by DDA, a demand is raised from the concerned allottees specifying the amounts to be paid with due date of payment. However, sometimes on account of the problems faced by the concerned allottees the payment received by the DDA are later than the scheduled date. Such cases are usually examined on merits and the delay is regularised if there is merit in the case as non-regularisation of delays in deserving cases may be resulted by the allottees. The following shall be the rules applicable to the allottees of all category of flats in case there payments are delayed and are regularised by the competent authority. A. Competent Authority to regularise the delay: period of delay. Designation i) Upto 30 days Jt/dy. Directors ii) Beyond 30 days but upto 90 days. Directors (Housing) ii) Beyond 90 days but upto 1 year. Commissioner (Housing) iv)Beyond 1 year but upto 1 Year 6 months Principal commissioner v) More than 1 year 6 months. Vice-Chairman b. Price of the Flat. i) If the allocated/allotted the flat in south Delhi where the construction has been undertaken by the South east Zone and South West Zone of the engineering Wing Except Dwarka (being in West Delhi) the price of the flat if restored, would be "old Cost" interest or current cost whichever is higher. ii) In case where allottees of the localities mentioned (i) above default a small percentage of demanded amount upto 10% beyond the due date, this delay, if regularised, would be on "old Cost interest". iii) In other cases of all category flats i. e. where the construction of flats has been undertaken by other zones of engineering Wing the restoration shall be at "old Cost interest". 2. A decision exists that while working out the current cost for flats in South delhi, a surcharge of 20% from the price worked out as per old formula, will be added. This surcharge will continue to be added ,for South Delhi flats. The interest rates in the above case shall be @ 18% per annum on the defaulted amount. 2. A decision exists that while working out the current cost for flats in South delhi, a surcharge of 20% from the price worked out as per old formula, will be added. This surcharge will continue to be added ,for South Delhi flats. The interest rates in the above case shall be @ 18% per annum on the defaulted amount. C. RESTORATION CHARGES: in addition to the above, the allottees/ allocatees whose allotment is restored by the competent authority, shall be liable to pay Restoration Charges @ 25% of the registration money of the respective scheme. D. EXTENSION OF TIME the requests concerning extension of time, if made, shall be governed by the same rules as above and the clause of restoration charges as mentioned in (C) above, will not apply. The competent authority will be as per (A) above. 3. The above orders are in supersession of the previous orders on the subject and would come into force with immediate effect. Sd/- (Gyanesh Kumar) commissioner (Housing)" ( 16 ) AT this stage, it would be appropriate to also refer to two earlier resolution of the DDA as a consequence of the issues arising in some of the writ petitions where the allottees requested for change of floor in the same locality or change of locality in the same zone. The first policy decision is a resolution of the authority bearing No. 51 dated 9. 7. 1990 providing that in case of left-out flats, the case was to be worked out at the current cost formula, but depreciation @ 1% per annum was to be allowed thereon. The relevant extract of the said resolution is as under: "no. Sub: Calculation of revised cost in respect of left 51 out flats 9. 7. 90 File No. PA/ch/dda/90/25-H precis the allotment of flats by DDA is made on no Profit No Loss basis. After completion of the flats, the allotment is made by DDA to the eligible registrants. During the process of allotment some flats are surrendered by the allottees or the allotments are cancelled for various reasons. As per the existing procedure 2 1/2% of the total flats constructed in each pocket/scheme are also reserved for allotment on out of turn basis. After completion of the flats, the allotment is made by DDA to the eligible registrants. During the process of allotment some flats are surrendered by the allottees or the allotments are cancelled for various reasons. As per the existing procedure 2 1/2% of the total flats constructed in each pocket/scheme are also reserved for allotment on out of turn basis. The cost of the left-out flats is updated at the time of allotment in case such flats remain vacant for more than 6 months from the date of original draw. RESOLUTION it was resolved that cost of the left out flats be worked out at the current cost formula and depreciation @ 1% p. a. be allowed thereon. " ( 17 ) THE further resolution No. 103 dated 13. 9. 1991 dealt with the issue of price of flats in cases where change is allowed on the request of the allottee and discussed the earlier resolution No. 51 dated 9. 7. 1990. This was on account of the fact that revised land rates had come into force from 6. 12. 1990. It was decided that in cases of change at the request of the allottees, the up-to-date cost of the subsequent flat based on revised land charge and current building cost would be leviable and as the change is allowed to the benefit/advantage of the allottee, no interest on his deposit against earlier flat is allowed, which was being done even earlier. ( 18 ) AN office order was also issued on 23. 1. 2001 in the nature of a clarification of the circular dated 31. 3. 1999, which are as under: "delhi DEVELOPMENT AUTHORITY no. HAU-IX/delay/98/dda March 31,1999 office ORDER while issuing allocation/allotment letters to the registrants of various schemes announced by the DDA, a demand is raised from the concerned allottees specifying the amounts to be paid with due dates of payments. However, sometimes on account of the problems faced by the concerned allottees, the payments received by the DDA are later than the scheduled date. Such cases are usually examined on merits and the delay is regularized if there is merit in the case, as non-regularisation of delays in deserving cases may be resented by the allottees. The following shall be the rules applicable to the allottees of all category if flats in case their payments are delayed and are regularized by the competent authority. 1. The following shall be the rules applicable to the allottees of all category if flats in case their payments are delayed and are regularized by the competent authority. 1. COMPETENT AUTHORITY TO regularise THE DELAY: v253. htm note: however, the cases where allottees default a small percentage of total demanded amount upto 10% beyond the due date, regularization of delay/ restoration of allotment, if considered, the competent authority shall be the commissioner (Housing) to restore the allotment/regularize the delay irrespective of the period of delay. 2. PRICE OF THE FLAT i) In cases (pertaining to any locality) where demanded amounts were received prior to 22. 08. 1996 by DDA, the restoration of allotment/ regularization of delay, if considered, would be on "old cost + interest". ii) In case where allottees default a small percentage of total demanded amount upto 10% beyond the due date, the delay, if regularized, would be on "old cost + interest". iii) If the allocated / allotted flat is in south Delhi i. e. where the construction has been undertaken by the South east Zone and South West Zone of the engineering Wing except Dwarka (being in West Delhi), the price of the flat, if restored, would be "old cost + interest or current cost", whichever is higher. This clause will be applicable in cases for which demanded amount by DDA is received after 22. 08. 1996 and the delay is regularized. iv) In other cases of all category flats i. e. where the construction of flats has been undertaken by other zones of engineering Wing, the restoration shall be at "old cost = interest". 3. SURCHARGE the premium of 20% over the disposal cost worked out on current cost or old cost for the SFS flats in South Delhi, where the real value in the market of dda flats in much more than DDA is charging as per its costing formula, shall be charged. 4. INTEREST i) Where the allottee enters the scheme at a later stage, he shall deposit all the due instalments with Actual Period interest @ 10% per annum from time to time as per schedule already fixed. ii) While working out the current disposal cost, in addition to current land premium at pre-determined rate, Actual Period interest @ 10% per annum shall be charged. ii) While working out the current disposal cost, in addition to current land premium at pre-determined rate, Actual Period interest @ 10% per annum shall be charged. iii) For updating the old cost, Actual period interest on the 5th and final instalment shall be charged @ 18% per annum from the date of issue of demand letters in bulk. iv) In other cases, the interest rate shall be @ 18% per annum. 5. RESTORATION CHARGES in addition to the above, the allottees/ allocates of SFS flats whose allotment is restored by the competent authority, shall be liable to pay Restoration Charge @ 25% of the registration money as per terms of allocation/allotment letter. However, such allottees of other categories of flats, shall be liable to pay "restoration Charge" as Rs. 1000/- for janta, Rs. 1500/- for LIG and EHS Type a and Rs. 2500/- for MIG and EHS type- b . 6. EXTENSION OF TIME the request concerning Extension of time, if made, shall be governed by the same rules as above and the clause of restoration charge as mentioned above, will not apply. The competent authority will be as per (1) above. 7. PAYMENT OF BELATED construction INTEREST as per scheme brochures, terms and conditions of the SFS allocation/allotment, in case where construction of flats is delayed beyond 30 months (2 years 6 months), interest @ 7% per annum on the amount paid, upto 36 months and @ 10% per annum thereafter is permissible to the allocatees/allottees. Accordingly, the Belated Construction interest will be paid for the period beyond 2 years 6 months till the date of issue of 5th and final demand letters in bulk of the same sector/pocket/scheme. This amount ill be adjusted in the cost of the flat. This provision will, therefore, be applicable to the allocates/allottees whose payments are in time or in cases where delays stands regularized by the Competent authority. The above orders are in suppression of the previous orders on the subject and would come into force with immediate effect. Sd/- (Gyanesh Kumar) commissioner (Housing)" "no. PA/ch/dda Dated 23rd / 2000/18-N January, 2001 office ORDER there is some confusion regarding the applicability of the Circular dated 31. 3. 99 regarding charging of old cost plus interest in cases where all four instalments were paid before 22. 8. Sd/- (Gyanesh Kumar) commissioner (Housing)" "no. PA/ch/dda Dated 23rd / 2000/18-N January, 2001 office ORDER there is some confusion regarding the applicability of the Circular dated 31. 3. 99 regarding charging of old cost plus interest in cases where all four instalments were paid before 22. 8. 96 (except in cases where one or two instalments were deferred but one or two instalments were delayed ). In this regard, it is now made clear that benefit of old cost plus interest as per the circular of 31. 3. 99 would apply in cases where the conditions are fulfilled: 1. Any delay in deposition of instalment money should have been condoned by the Competent Authority after charging the penal interest and other usual as per the terms and conditions of the allotment. 2. The cases should be of original allottee only. No benefit will be given to GPA/spa cases. 3. 5th and final demand letter should have been issued on or after 31. 3. 99 or where the action is still to be taken. No settled case where amount has been deposited thus would be re-opened. In such cases once benefit of old cost plus interest is agreed to, belated construction interest (BCI) will also be payable as per prevailing rules. This bears the approval of FM and V. C. Sd/- (Devendra Bhushan Gupta) commissioner (Housing)" ( 19 ) THE office order dated 31. 3. 1999 was issued in relation to cases where the payment of instalments was received after the scheduled date. In terms of the circular where the demanded amount was received prior to 22. 8. 1996, the old cost plus interest formula was to apply. This was also made applicable where the default was a small percentage of the total amount up to 10%. After 22. 8. 19%, the formula was to remain the same for areas other than South Delhi where it would be old cost plus interest or current cost, whichever was higher and surcharge of 20% was also applicable to these flats. The interest rate and restoration charges as also payment of belated construction interest were also provided for. ( 20 ) THE effect of the office order dated 23. 1. The interest rate and restoration charges as also payment of belated construction interest were also provided for. ( 20 ) THE effect of the office order dated 23. 1. 2001 was that the benefit was not to be granted to persons, who were not original allocatees and were attorney holders, who had purchased the flat on such agreement to sell and power of attorney. The ostensible reason for this policy was that such sales were contrary to the terms and conditions of the allotment providing for the restriction on such transfer. ( 21 ) MR. S. K. Rungta, learned Counsel for the petitioners appearing In most of the matters, has sought to crystallised his submissions in respect of two broad subject matters arising for adjudication in the present writ petitions. The first aspect is the imposition of 20% surcharge and the second aspect is the charging of current cost. This charging of current cost in turn arises on account of (a) delayed payment of instalments; (b) change of floor at the request of the allottee (s); and (c) delay in sending demand letters and change of locality at the request of the petitioners. ( 22 ) LEARNED Counsel for the petitioners has submitted that the principles laid down in r. K. Sachar Vs. Delhi Development authority, 104 (2003) DLT 426=2002 VIII ad (DELHI) 280 would not apply to the facts of the present case. This is stated to be so on account of the fact that the present cases are one of Self Financing Scheme (s ). The policy decision in respect of imposition of 20% surcharge was taken on 16. 8. 1996 and came into force on 22. 8. 1996, when it was approved by the Vice-Chairman, DDA. It was submitted that at least two instalments had already been paid prior to the date of 16. 8. 1996 and there was deferred payment of instalments in certain cases on account of delay in construction by DDA. The delay had dual consequences of deferment of payment of instalments and interest on the belated construction beyond 30 months. It was, thus, submitted that but for the delay on the part of the respondent DDA in completing the project, the allottees would have got possession prior to the date of 16. 8. The delay had dual consequences of deferment of payment of instalments and interest on the belated construction beyond 30 months. It was, thus, submitted that but for the delay on the part of the respondent DDA in completing the project, the allottees would have got possession prior to the date of 16. 8. 19% and the policy would have had no application insofar as the registrants who had registered much earlier and were entitled to the flats within at least 30 months period of time, but that did not happen. ( 23 ) LEARNED Counsel for the petitioners has submitted by reference to Item No. 105 of 27. 8. 1996 that it was in order to balance the reduced cash-flow because of the proposed discount on cash-down basis payment that the charge of 20% premium was imposed on the South Delhi flats. It was further submitted that the same was linked with announcement of the Expandable Housing Scheme - 1996 and Self Financing Scheme of 1996. It was, thus, submitted that the same would have no application to SFS prior to 1996. The said item No. 105 of 27. 8. 1996 is as under: "item No. 105/27. 8. 96 sub: Grant of an incentive to the applicants of proposed Expandable housing Scheme - 1976 for making payment on cash down basis. No. F. 10 (15v96/ehs precis to dispose of about 700 expandable houses available with DDA, a new scheme was brought before the authority in its meeting held on 22. 3. 1996. Authority had approved the proposal for (i) offering 50% of the flats to the various Public Sector undertakings/government organizations and (ii) for offering the remaining 50% houses to the public by announcing a new Expandable Housing Scheme. A copy of the relevant Agenda item together with the resolution recorded by the Authority is added as App. A. P. No. 39. Under this proposal, matter is being placed before the Authority for considering giving a rebate to those applicants who accept the allotment of the flats on cash down basis. 2. On the basis of the aforesaid resolutions of the Authority, 50% flats are proposed to be offered to the public. It is also being proposed to offer to public the unavailable flats if any out of the 50% flats being reserved for govt. organisations/psus. 2. On the basis of the aforesaid resolutions of the Authority, 50% flats are proposed to be offered to the public. It is also being proposed to offer to public the unavailable flats if any out of the 50% flats being reserved for govt. organisations/psus. In this manner, number of flats to be offered to the public can be beyond 50%. 3. The nature of hire purchase mode of payment to be incorporated in the scheme being opened to public is separately under finalisation. 4. While this facility is being given to all the applicants it is felt that we may simultaneously think of measures by which allottees are encouraged to pay the entire price of the flat before taking possession. When the hire purchase facility exists ordinarily no one comes towards to accept allotment on cash down basis. To loans or otherwise make arrangements to pay full price of the flat before possession, it is proposed that following discount may be provided in the scheme. Name of the Discount to be locality provided (i) Dwarka sub-City 5% on the disposal price (ii) Rohini, Narela and Kondli Gharoli 15% on the disposal price to balance the reduced cash in-flow because of the proposed discount it will be necessary to charge premium in the areas where the real value in the market of DDA flats is much more than what DDA is changing as per its costing formula in the demand letters. It would be in the fitness of thing to charge premium of 20% over the disposal cost worked out for the flats in Sough Delhi sfs. 6. This discount, however, will not be provided to the Public Sector undertakings/government Organizations availing the flats. 7. The above proposals were placed before the Lt. Governor/chairman, DDA and his permission was sought for implementing the proposals and seeking post facto approval of the Authority since the proposals/are linked with announcement of Expandable Housing scheme - 1996 and Self Financing housing Scheme - 1996. Matter is now accordingly placed before the Authority for approval. Resolved that proposal contained in the agenda Item be approved. " ( 24 ) LEARNED Counsel for the petitioners has referred to Division Bench judgment of this court in P. N. Verma and Ors. Vs. Union of india and Ore. , AIR 1985 Delhi 417. Matter is now accordingly placed before the Authority for approval. Resolved that proposal contained in the agenda Item be approved. " ( 24 ) LEARNED Counsel for the petitioners has referred to Division Bench judgment of this court in P. N. Verma and Ors. Vs. Union of india and Ore. , AIR 1985 Delhi 417. In the said case, the Division Bench referred to judgment of the Supreme Court Premji Bhai parmar and Ore. Vs. Delhi Development authority and Ore. , (1980) 2 SCC 129 = air 1980 SC 738 . The Division Bench was of the view that the principles laid down in Premji bhai Parmar s case (supra) would not be applicable in view of he fact that there was a material difference insofar as P. N. Verma s case (supra) was concerned. The difference arose on account of the fact that while the cost of the flat as announced in the brochure included surcharge in Premji Bhai Parmar s case (supra), this was not position in P. N. Verma s case (supra ). Secondly, P. N. Verma s case (supra) dealt with SFS cases where there was participatory financing and what could be included was only the cost of construction and cost of land, though the estimated cost may have been tentative. The Division Bench in P. N. Verma s case (supra) was of the view that there could not be a revision of the policy of price fixation, which is a pre-contractual stage and the formula must remain the same. Thus, the fixation cannot be on any basis at the whim and fancy of DDA. The Division Bench also relied on the principles of promissory estoppel. The equalization charges, which was a component sought to be included in the pricing was, thus, struck down in the said case. ( 25 ) LEARNED Counsel for the petitioners has submitted that at no stage was any consent taken from the allottees nor were they put to notice of any such surcharge to be imposed. Learned Counsel has referred to judgment of the Division Bench of this Court in Nar Singh jain and Ors. Vs. Union of India and Ore. , (80) 1999 DLT 742 . The Division Bench took note of the Full Bench judgment of this Court in Smt. Sheelawanti and Anr. Vs. D. D. A. and anr. Learned Counsel has referred to judgment of the Division Bench of this Court in Nar Singh jain and Ors. Vs. Union of India and Ore. , (80) 1999 DLT 742 . The Division Bench took note of the Full Bench judgment of this Court in Smt. Sheelawanti and Anr. Vs. D. D. A. and anr. , 95 (1995) DLT 801 (FB)=air 1995 delhi 212 dealing with the scope of scrutiny by the Court in matters of price fixation, but held that equalization charges could not be included in the cost of flats in view of the decision of Supreme Court in Civil Appeal No. 4402/1985 titled delhi Development authority Vs. Self Financing Residents association and Ore. decided on 28. 11. 1996 where it was held that from the terms of the model contracts entered into by DDA with the people who opted for Self Financing scheme, charging of equalization and ad hoc charges is evidently totally missing and, thus, could not be recovered. However, insofar as the charges for conversion were concerned, the Division Bench upheld the same being in larger public interest and having been uniformly applied. Learned Counsel also made reference to para 19 of the said judgment where the expression cost of the flat was discussed and it was stated that the same is nothing, but the price paid or to be paid for something which in the instant case is the flat. Thus, the cost or the price is the cost to acquire it by the seller and something more by way of margin of profit. ( 26 ) LEARNED Counsel for the petitioners also referred to the Delhi Development Authority (Management and Disposal of Housing estates) Regulations, 1968 (hereinafter to be referred to as the said Regulations ). Regulation 2 (13) defines the disposable price to mean such price as may be fixed by the authority for such property. It was submitted that 20% surcharge was over and above the disposable price while the said Regulations permit only the disposable price to be charged. It was submitted that different paras of regulation 2 gave expression to different meanings used in the said Regulations and, thus, the meaning given in Regulation 2 (13) are to be made applicable. It was submitted that 20% surcharge was over and above the disposable price while the said Regulations permit only the disposable price to be charged. It was submitted that different paras of regulation 2 gave expression to different meanings used in the said Regulations and, thus, the meaning given in Regulation 2 (13) are to be made applicable. ( 27 ) LEARNED Counsel further submitted that if this 20% surcharge was taken as part of the cost, the same would have ramification on other charges, which are calculated on the basis of the disposable cost. Illustrations of these were given as documentation charges, ground rent, etc. ( 28 ) LEARNED Counsel then referred to the issue of charging of current cost arising as a consequence of the change of floor and took the example of CWP No. 5141/2000. After the first three instalments had been paid, the change of floor was granted and all payments had been made within time. Learned Counsel has, thus, submitted that there was no basis for charging of current cost in such cases as it was open to the respondents to consider the case for change of floor, but that would not give rise to the consequence of current cost and nor was there any intimation of such charging. Learned Couns: jl has further submitted that at least insofar as the SFS flats were concerned, no policy has been placed on record to substantiate charging of such current cost. ( 29 ) A reference was than made to the cases of delayed payment of instalments. It was submitted that in Sheikh Sarai, there was no deferment of instalments even though the project was delayed. The allocation was made in the year 1993, but the fifth and final demand letter was issued only in the year 1999. Interest on blocked capital was given, but not for cases where therewas any default. It was, thus, submitted that in case deferment was granted of instalments taking into consideration the progress of the project, the parties would not have been in default of payment of instalments. Reference, in this behalf, was made to CWP No. 5937/2000. ( 30 ) THE pricing of these flats is stated to be in terms of the office order dated 31. 3. Reference, in this behalf, was made to CWP No. 5937/2000. ( 30 ) THE pricing of these flats is stated to be in terms of the office order dated 31. 3. 1999 and it was submitted that clause 2 (iii) is illegal and invalid, which requires higher of the two costs to be charged between the old cost plus interest or current cost. This is sought to be made applicable in cases where the demanded amount is received by DDA after 22. 8. 1996. ( 31 ) LEARNED Counsel further submitted that in a number of cases, the overdue instalments were paid with interest, the name was included in the draw thereafter and demand letter was issued. It was stated that all this happened before the cut-off date of 22. 8. 1996 for imposition of surcharge. It was, thus, submitted that in such cases, there would neither be an issue of 20% surcharge or current cost, which if would be applicable, would amount to discrimination between persons in the same scheme. Learned Counsel referred to the observations in para 9 of premji Bhai Parmar's case (supra) to the effect that the authority having trapping of state might be covered by the expression 'other authority' under Article 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme. Thus, it was contended that there cannot be discrimination within the class itself. ( 32 ) LEARNED Counsel has submitted that the very concept of restoration means to put back a person in the original position and that if the completion date was taken as the relevant date and calculation made working backwards in time, the instalments could, in fact, have been treated as having been paid in time. Learned Counsel has further submitted that there was, in fact, not even any intimation of the change of costing, which would arise on restoration by charging current cost to the allottees at the stage when such restoration took place. ( 33 ) THE anomaly in Sheikh Sarai cases was further sought to be explained by learned counsel for the petitioners on the basis that the fourth instalment was payable in October, 1997 and was, thus, paid three years before time. The revised letter was issued only in february, 2000. ( 33 ) THE anomaly in Sheikh Sarai cases was further sought to be explained by learned counsel for the petitioners on the basis that the fourth instalment was payable in October, 1997 and was, thus, paid three years before time. The revised letter was issued only in february, 2000. ( 34 ) THE fifth and final demand letters had, in fact, been sent in February, 1999, but the flat was still not ready for delivery. It was submitted that all the instalments, even though delayed, had been paid by 1998 much before the flats were ready for delivery of possession. ( 35 ) LEARNED Counsel has also referred to judgment of the Supreme Court in K. Eapen chako Vs. The Provident Investment company (P) Ltd. , AIR 1976 SC 2610 , more particularly para 37, which is as under: "37. A statute has to be looked into for the general scope and purview of the statute and at the remedy sought to be applied. In that connection the former state of the law is to be considered and also the legislative changes contemplated by the statute. Words not requiring retrospective operation so as to affect an existing statutory provision prejudicially ought not be so construed. It is a well- recognised rule that statute should be interpreted if possible so as to respect vested rights. Where the effect would be to alter a transaction already entered into, where it would be to make that valid which was previously invalid, to make an instrument which had no effect at all, and from enactments merely affect procedure and do not extend to rights of action. See Re Joseph Sucha and Co. Ltd. (1875) 1 Ch D 48. If the legislature forms a new procedure alterations in the form of procedure are retrospective unless there is some good reason or other why they should not be. In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties it will be held to apply prima facie to all actions, pending as well as future. In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties it will be held to apply prima facie to all actions, pending as well as future. " ( 36 ) INSOFAR as the issue of delay in sending demand letters in cases of change of locality at the request of the petitioners is concerned, reference was made to CWP No. 2833/2003 where there was three and a half years delay in issuance of allotment letter. The change was accepted on 3. 11. 1999. Learned Counsel also referred to the allotment letter dated 22. 11. 1999 to state that it was a case of adjustment against change of allotment. It was submitted that this change was sought as the original allocation was on the ground floor in Jasola, but the allotment had been made on the third floor. However, this fact is not correct as borne out from the record, since the allocation letter is in respect of the third floor. ( 37 ) MR. Maninder Singh, learned Counsel for the petitioner in CWP No. 4901 of 2000, apart from relying on the submissions made by Mr. Rungta, sought to advance certain additional submissions. Learned Counsel sought to challenge the very jurisdiction of dda to issue a cancellation letter under the contract when the stage of construction was not commensurate with the amount liable to be paid by that stage of time. Learned Counsel referred to the scheme and submitted that the same stipulated a financial participation during the period of construction by the persons, who wish to own flats offered by dda. The same was set out in the beginning of the scheme itself as under: "fifth SELF-FINANCING HOUSING registration SCHEME-1992 the name of the Scheme will be "fifth self Financing Housing Registration scheme" of the Delhi Development authority. This Scheme has been formulated to obtain financial participation during the period of construction by persons who wish to own flats according to the different type/designs offered by the D. D. A. " ( 38 ) LEARNED Counsel referred to clause 5 of the Scheme, which stipulated that flats in south Delhi may also be offered subject to availability of land. The said clause is as under: "5. Areas: flats to be constructed under the Fifth self Financing Scheme will be released in due course. The said clause is as under: "5. Areas: flats to be constructed under the Fifth self Financing Scheme will be released in due course. Subject to availability of land, flats in South Delhi may also be offered. "learned Counsel, thus, submitted that at the stage of registration, it was not even known whether any flats in South Delhi would be offered to the allottees or not and certainty no provision was made for any different terms to be made applicable to South Delhi flats. ( 39 ) LEARNED Counsel then referred to clause 16 of the scheme, which is as under: "16. General: (i) Other terms and conditions of allotment would be the same as are presently applicable to the Self Financing schemes as stipulated under the Delhi development Authority (Management and Disposal of Housing Estates) regulations, 1968. (ii) The above terms and conditions will be followe'd generally but D. D. A. Reserves its right to alter any of them in its discretion if and when considered necessary. " ( 40 ) LEARNED Counsel submitted that clause 16 (i) made applicable the Regulations and stipulated terms and conditions of allotment. It was submitted that unless a charge is specifically covered under the scheme or under the said Regulations, the same cannot be levied. Learned Counsel, thus, submitted that 20% surcharge, not having been provided for, could not be levied without there being a statutory amendment to the said Regulations. ( 41 ) INSOFAR as clause 16 (ii) is concerned, which is the principal clause on which the respondent has relied upon in support of its authority for stipulation of the charges, it was submitted that the same cannot be read as a right to alter the very scheme. It was, thus, submitted that the right to exercise under clause 16 (ii) could be only incidental to what was stipulated in the scheme, since if it was read otherwise, it was liable to be struck down as unconscionable under Section 23 of the Indian Contract Act, 1872 (hereinafter to be referred to as, 'the contract Act' ). The said Section 23 is as under: "23. The said Section 23 is as under: "23. What consideration and objects are lawful, and what notthe consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. " ( 42 ) LEARNED Counsel submitted that the matter in issue has even to be tested on the touch tone of the provisions of the constitution of India (hereinafter to be referred to as, 'the Constitution') more specifically Article 19 (l) (e) and Article 21. This submission was advanced on the basis that the right to shelter effects the very human existence and has, thus, to be tested on the touch tone of the aforesaid provisions as also article 14. ( 43 ) TO substantiate the aforesaid contention, learned Counsel referred to judgment of the supreme Court in U. P. Avas Evam Vikas parishad and Anr. Vs. Friends Co-op. Housing Society Ltd. and Anr. , AIR 1996 SC 114 , where the Supreme Court observed that the right to shelter is a Fundamental right, which springs from the right to residence assured under Article 19 (l) (e) and right to life under Article 21 of the Constitution. Learned Counsel also referred to judgment of the Supreme Court in Ahmedabad municipal Corporation Vs. Nawab Khan gulab Khan and Ore. , AIR 1997 SC 152 to contend that even encroachers on public land were required to be removed only after following certain principles of natural justice as enunciated in the said judgment. ( 44 ) LEARNED Counsel sought to challenge the very authority of the respondent DDA to impose 20% surcharge and submitted that clause 16 (ii) will have to be read with Section 23 of the Contract Act, if it is relatable to Part iii of the Constitution. Learned Counsel, thus, sought to place great reliance on judgment of the Supreme Court in Central Inland water Transport Corporation Ltd. and anr. Vs. Brojo Nath Ganguly and Anr. Learned Counsel, thus, sought to place great reliance on judgment of the Supreme Court in Central Inland water Transport Corporation Ltd. and anr. Vs. Brojo Nath Ganguly and Anr. , AIR 1986 SC 1571 , wherein the Supreme Court while taking into consideration the submissions and counter submissions in respect of the right of the parties to terminate the contract of employment considered the issue of unconscionable contract or bargain. This was in view of the submission of the appellant therein that unconscionability was not mentioned in the Contract Act as one of the grounds which invalidate the contract. The supreme Court observed as under: "76. We need not trouble ourselves with the other sections of the Contract Act except Secs. 23 and 24. Section 23 states that the consideration or object of an agreement is lawful unless inter alia the Court regards it as opposed to public policy. This section further provides that every agreement of which the object or consideration is unlawful is void. Under Sec. 24, if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object is unlawful, the agreement is void. The agreement is, however, not always void in its entirety for it is well settled that if several distinct promises are made for one and the same lawful consideration, and one or more of them be such as the law will not enforce. that will not of itself prevent the rest from being enforceable. The general rule was stated by Willes, J, in Pickering vs. Ilfracombe Ry. Co. (1868) 3 CP 235 as follows: "the general rule is that, where you cannot sever the illegal from the legal part of a covenant, the contract is altogether void; but where you can sever them, whether the illegality be created by statute or by the common law, you may reject the bad part and retain the good. "in the said case, after discussing the law prevalent in this behalf in UK, USA, France and Germany, the Supreme Court set down its conclusion in para 90 as under: "90. . . . "in the said case, after discussing the law prevalent in this behalf in UK, USA, France and Germany, the Supreme Court set down its conclusion in para 90 as under: "90. . . . This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No Court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations and with their vast infra-structural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in- unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances. " ( 45 ) IN the said case, the Supreme Court was of the view that such a clause in the contract has to be adjudged as void and, thus, must fall under one of the relevant sections of the contract Act. It was held that the only relevant provision in the Contract Act is Section 23 as the decision was opposed to public policy. ( 46 ) LEARNED Counsel sought to make light of the delays in making payment on the ground that the subsequent communications and the delay in construction made the same irrelevant. It may, however, be noticed that in para 7 of the counter-affidavit, it has been stated that the petitioner delayed in depositing part of the second instalment by 7 months and part by 4 1/2 months and in the third instalment by 27 and 37 1/2 months. Learned counsel referred to the notice dated 23. 4. 1997 intimating to the petitioner that the flat allotted to the petitioner had been automatically cancelled in view of the delay in payments. On representations of the petitioner, the matter was reconsidered and letter dated 10. 12. 1998 was issued allotting the flat to the petitioner in Sheikh Sarai. It was submitted that the said letter states the reference no. of the file in terms whereof the earlier allocation was made to the petitioner and vide the said letter in the draw held on 15. 10. 1998 specific flat no. was allotted to the petitioner. It was submitted that there was not even a reference of restoration of any cancellation of allotment in the said letter. Learned Counsel, thus, submitted that there could not be any question of charging current cost from the petitioner in view thereof. ( 47 ) LEARNED Counsel further submitted that there was no authority in law to levy 20% surcharge since it did not form part of the said Regulations or the scheme and in this behalf referred to recent judgment of the supreme Court in Civil Appeal No. 4167 of 2003 titled I. I. T. T. College of Engineering v. State of H. P. and Ors. decided on 8. 8. decided on 8. 8. 2003 to contend that even assuming the laudable object of 20% surcharge, the same cannot form the basis of a levy, unless a power is conferred in this behalf. The Supreme Court while dealing with the issue of appointment of an Administrator in the private college by the high Court taking note of deficiencies in the management held that in the absence of a provision under which Management of unaided private schools could be taken over by the Administrator, no such order could be justified under law however laudable the object behind the step taken by the High court. ( 48 ) LEARNED Counsel submitted that the legislature in its wisdom ftas not given the head of levy or such a surcharge in terms of the said Regulations and by the administrative order such a surcharge could not be levied, which is really in the nature of a tax as it would amount to circumventing the procedure or legislative enactment. ( 49 ) LEARNED Counsel also submitted that, in fact, the flat allotted to the petitioner is practically surrounded by slums as would be apparent from the photographs annexed to the rejoinder filed in CWP No. 4901 of 2000. It was submitted that the petitioner was not even given an option to take a flat in South delhi or elsewhere and, thus, there could be no question of levy of 20% surcharge. Learned Counsel submitted that a number of these aspects including the right to levy such surcharge was not contended before this court in R. K. Sachet's case (supra) and this court is not precluded from considering the said submissions now irrespective of the decision in the said case. Learned Counsel submitted that the sub silent principle would apply in such a case and referred to judgment of the Supreme Court in Municipal corporation of Delhi Vs. Gurnam Kaur, air 1989 SC 38 = 1989 (1) SCC 101 , wherein it was observed as under: "10. It is axiomatic that when a direction or order is made by consent of the parties, the Court does not adjudicate upon the rights of the parties nor does it lay down any principle. Quotability as ' law' applies to the principle of a case, its ratio decidend. It is axiomatic that when a direction or order is made by consent of the parties, the Court does not adjudicate upon the rights of the parties nor does it lay down any principle. Quotability as ' law' applies to the principle of a case, its ratio decidend. The only thing in a judge's decision binding as an authority upon a subsequent judge is the principle upon which the case was decided. Statements which are not part of the ratio decidendi are distinguished as obiter dicta and are not authoritative. The task of finding the principle is fraught with difficulty because without an investigation into the facts, as in the present case, it could not be assumed whether a similar direction must or ought to be made as a measure of social justice. That being so, the direction made by this Court in Jamna das case could not be treated to be a precedent. The High Court failed to realise that the direction in Jamna Das case was made not only with the consent of the parties but there was an interplay of various factors and the court was moved by compassion to evolve a situation to mitigate hardship which was acceptable by all the parties concerned. The Court no doubt made incidental observation to the Directive principles of State Policy enshrined in article 38 (2) of the Constitution and said: "article 38 (2) of the Constitution mandates the State to strive to minimise, amongst others, the inequalities in facilities and opportunities amongst individuals. One who tries to survive by one's own labour has to be encouraged because for want of opportunity destitution may disturb the conscience of the society. Here are persons carrying on some paltry trade in an open space in the scorching heat of Delhi sun freezing cold or torrential rain. They are being denied continuance at that place under the specious plea that they constitute an obstruction to easy access to hospitals. A little more space in the access to the hospital may be welcomed but not at the cost of someone being deprived of his very source of livelihood so as to swell the rank of the fast growing unemployed. As far as possible this should be avoided which we propose to do by this short order. A little more space in the access to the hospital may be welcomed but not at the cost of someone being deprived of his very source of livelihood so as to swell the rank of the fast growing unemployed. As far as possible this should be avoided which we propose to do by this short order. " this indeed was a very noble sentiment but incapable of being implemented in a fast growing city like the Metropolitan city of Delhi where public streets are overcrowded and the pavement squatters create a hazard to the vehicular traffic and cause obstruction to the pedestrians on the pavement. 11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the teamed Judge who passed the order in Jamna Das case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the high Court because, it seems to us that it is wrong in principle and,cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the Court on the question whether or not any direction could properly be made compelling the municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P. J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn. explains the concept of sub silentio at p. 153 in these words: "a decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although point b was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point 8 is said to pass sub silentio. " ( 50 ) LEARNED Counsel also referred to judgment of the Supreme Court in State of u. P. and Anr. Vs. Synthetics And Chemicals ltd. ft Anr. , (1991) 4 SCC 139 , where it was observed as under: "39. But the problem has arisen due to the conclusion in the case of Synthetic and Chemicals. The question was if the state Legislature could levy vend fee or excise duty on industrial alcohol. The bench answered the question in the negative as industrial alcohol being unfit for human consumption the State legislation was incompetent to levy any duty of excise either under Entry 51 or entry 8 of List II of the Seventh schedule. While doing so the bench recorded the conclusion extracted earlier. It was not preceded by any discussion. No reason or rationale could be found in the order. This gives rise to an important question if the conclusion is law declared under Article 141 of the constitution or it is per incuriam and is liable to be ignored. 40. 'incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered,' in ignoratium of a statute or other binding authority'. (Young Vs. Bristol Aeroplane Co. Ltd. ). Same has been accepted, approved and adopted by this Court while interpreting article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury's Laws of England incorporating one of the exceptions when the decision of an appellate Court is not binding. 41. In Jaisri Sahu v. Rajdewan Dubey, this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury's Laws of England incorporating one of the exceptions when the decision of an appellate Court is not binding. 41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English Courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub silentio. "a decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. " (Salmond on jurisprudence 12th Edn. , p. 153 ). In lancaster Motor Company (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this court in Municipal Corporation of delhi Vs. Gurnam Kaur. The Bench held that, ' precedents sub silentio and without argument are of no moment'. The Courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Sharma Rao v. Union Territory of Pondicherry it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law. "