BARELLLY DEVELOPMENT AUTHORITY versus VRINDA GUJARATI AND ORS.

Citation: [2004] 2 S.C.R. 728 · Decided: 26-02-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
BARElLLY DEVELOPMENT AUTHORITY 
v. 
VRINDA GU JARA TI AND ORS. 
FEBRUARY ·26, 2004 
B 
(S. RAJENDRA BABU, DR. AR. LAKHSMANAN AND G.P. 
MA THUR, JJ.] 
U.P. Urban Planning and Development Act, 1973-Section 3-U.P. 
Zamindari Abolition and Land Reforms Act, 1950-Allotment of flats under 
C &If Financing Scheme by Development Authority-Brochure and allotment 
letter stating estimated cost of construction and that final costing to be done 
after completion on basis of actual cost-Demand of enhanced price-Allottees 
filing affidavits of undertaking that they are bound by final costing of flats and 
also liable to pay enhanced amount-Possession of flats delivered-Failure of 
D allottees to pay enhanced amount-Recov~ry Proceedings-Issuance of 
recovery certificates-Writ Petition challenging enhancement in final cost and 
recovery proceedings-High Court directing the authority to adjust amounts 
against final price of flats though not striking down the enhanced price-On 
appeal held: Enhancement in cost was due to actual increase in cost of flat 
in accordance with the brochure and allotment letter issued-Allottees after 
E filing undertaking to pay the enhanced amount and taking possession of flats 
cannot avoid payment-Also there is no inordinate delay in allotment-Hence, 
allottees directed to pay enhanced price of flats in six monthly equal instalments 
with 9% simple interest. 
Appellant-Bareilly Development Authority invited applications for 
F allotment of flats to be constructed by it under the Housing Scheme. The 
Housing Scheme is a Self Financing Scheme wherein the allottees were to pay 
the cost of the flats in quarterly instalments on which no interest is payable. 
However, if the amounts are not paid within the prescribed time limit, penal 
interest of 18% per annum would be payable along with amounts due. Clause 
G 2 and 15 of the Brochure specified that the cost of each flat given in the 
Brochure was estimated cost and that the final costing will be done later which 
was subject to amendment by the appellant. It did not contain any prescribed 
date or time period for either construction of the flats or the delivery of 
possession. Respondents applied for allotment of flats. They were allotted 
under draw of lots and allotment letters were issued indicating that the price 
H 
ns 
BAREILL Y DEVELOPMENT AUTHORITY v. VRINDA GUJARATI 
729 
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of the flat was stili an estimated one and that the final costing would be done A 
after completion on the basis of the actual. costs. Final Costing Committee 
was set up. Thereafter, respondents were informed about the final costing of 
the said flats and also that the balance amount of price of the flat as well as 
the proposed lease rent was to be deposited within 15 days of the receipt of 
the notice. Respondents filed objections to the increase in price which were B 
rejected. Respondents then filed affidavits of undertaking that they were 
bound by the final costing of the flats and also liable to pay the enhanced 
amount. Thereafter, the possession was delivered to them. Respondents again 
made representation against the final costing of the said flats. In the meantime 
~ 
appellants issued another notice to the respondents to pay the enhanced unpaid 
amounts of the costs with 18% interest. Respondents failed to pay the said c 
amount. Appellants then initiated recovery proceedings against respondents 
under U.P. Zamindari Abolition and Land Reforms Act, 1950 and issued 
recovery certificates against respondents. Respondents filed writ petition 
challenging enhancement in the final cost of the flats and the recovery 
proceedings. High Court allowed the writ petition and directed the appellants 
D 
to adjust various amounts against the final price of the flats, though it did 
not strike down the enhanced price or hold it illegal; and that since there was 
unreasonable delay in delivery of possession, appellants were directed to pay 
18% interest to respondents from date of allotment to date of delivery of 
possession. Hence the present appeal. 
Appellant-Development Authority contended that High Court failed to E 
appreciate that Clauses 2 and 15 of the Brochure clearly stated that the cost 
of each flat given in the Brochure was only an estimated cost of the said flats 
· and the final costing will be done later which was subject to amendment by 
the appellant; that the revised cost of the said flats was necessitated by the 
increase in size of the flat as well as inc

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