DELHI DEVELOPMENT AUTHORITY versus KANWAR KUMAR MEHTA AND ORS. ETC.

Citation: [1996] SUPP. 6 S.C.R. 364 · Decided: 16-09-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
DELHI DEVELOPMENT AUTHORITY 
v. 
KANWAR KUMAR MEHTA AND ORS. ETC. 
SEPTEMBER 16, 1996 
B 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.) 
Urban Development : 
Land allotted by Delhi Development Authority-Delay in developing 
C the lands due to High Court's stay order on the land acquisition-On equit} 
DDA charging escalation at 16.62% per annum-High Court ordering escala-
tion to be charged at the same 7% p.a. the rate of interest which DDA pays 
to unsuccessjitl applican~n appea~ held, escalation charged at 16.62% 
per annum justified, DDA to adjust the 7% p.a. interest on the deposits from 
D the date ·of original draw till the communication of letters of allotment. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 13053 of 
1996 Etc. 
From the Judgment and order dated 265.95 of the Delhi High Court 
E in C.W.P. No. 5329 of 1993. 
Arun Jately and V.B. Saharya for the Appellant. 
M. Shekhar, Bimal Roy Jad, Devendra Singh, S.M. Garg, N. Shekhar, 
F Ms. Arnita Gupta and Ms. Chandra Kumari for the Respondents. 
The following Order of the Court was delivered : 
Delay condoned .. 
G 
Leave granted. 
We have heard learned counsel of both sides. 
The question of law that arises for consideration in these appeals is: 
whether the High Court was right in directing calculation of interest @ 7% 
H of the escalation charges on the principle of equity? 
364 
D.DA v. K.K. MEHTA 
365 
The facts of the case are not in dispute. On March 27, 1991 draw of A 
plots was made for allotment of 5000 plots in Sectors 23 and 24 of Rohini 
Scheme in Delhi. Between 6th April, 1991 and March 27, 1991, around 
3000 orders of allotment came to be issued. Only Woo persons are yet to 
be issued of the allotment letters. It is settled law that the rate of plot is 
as is prevailing on the date of communication of the allotment letter. B 
Before the letters of allotment was communicated to the rest of the 
suceessful applicant, the owners of the lands acquired under the notifica-
tion issued under Section 4(1) had approached the High Court and had 
stay of further proceedings. Consequently, the issuance of the letters of 
allotment was stopped. Subsequently, the stay was vacated on August 4, C 
1992 and it is stated in the counter-affidavit that the owners had ap-
proached this Court by way of appeal and in September 1992 this Court 
had dismissed the special leave petitions. In the meanwhile, the Govern-
ment of India have pre-determined the cost of the land for allotment of 
the acquired land for the year 1993-94 effective from April 1, 1993 to 
March 31, 1994 at Rs. 2675.29 per square mtr. The ODA evolved the D 
principle of calculating the cost of developmental charges at par with cost 
of living index rate which admittedly worked out to 16.62% per annum. On 
that basis, it had worked out the cost of plot at the rate of Rs. 1579.71 per 
square mtr. On the basis thereof, they recalculated the cost of allotment 
and issued letter of allotment to the reEpondents. The respondents came E 
to challenge that order in the High Court. The impugned judgment made 
on August 11, 1995 in C.W.P. No. 196/94 was declared invalid. The Division 
Bench of the High Court has ultimately held that when the DDA seeks 
equity, it must also do equity. When the claimants have been directed to 
bear interest only at the rate of 7% per annum oa the amount deposited 
by them towards advance payment deposited adjustable of the successful 
bidders and refund is made to the unsuccessful applicants with the same 
rate of interest, the DDA should equally charge the escalation charges at 
the rate of 7% per annum. Therefore, directions to deposit the costs of 
plot at 16.62% per annum as escalation cost is unjust in law. 
/ 
Mr. Arun Jaitley, learned senior counsel appearing for ODA, has 
contended that the DOA, with a view to do justice to the claimants, have 
F 
G 
not demanded the rate of charges prevailing as on the date of allotment as 
determined by the Government of India namely, Rs. 2675.79 per square H 
366 
SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. 
A metre and instead worked oQt special equity by enhancing the cost of 
escalation charges at 16.62% per annum as per the cost of living index. The 
High Court was not justified in giving the direction to charge the escalation 
only at the rate of 7% per annum. We find force in the contention. Though 
Shri M. Shekhar and Shri Bimal Roy Jad, learned counsel appearing for 
B the respondents, have contended that the ODA has not produ

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