KANPUR DEVELOPMENT AUTHORITY versus SMT. SHEELA DEVI AND ORS. ETC

Citation: [2003] SUPP. 6 S.C.R. 374 · Decided: 28-11-2003 · Supreme Court of India · Bench: SHIVARAJ V. PATIL · Disposal: Dismissed

Judgment (excerpt)

A 
B 
KANPUR DEVELOPMENT AUTHORITY 
v. 
SMT. SHEELA DEVI AND ORS. ETC. 
. ' 
NOVEMBER 28, 2003 
[SHIVRAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.] 
Development Authority-Housing Scheme floated in 19 78-Tentative 
cost of MIG Flat fixed at Rs. 48, 000-Applications received for such 
scheme less than total number of flats to be constructed under the scheme-
C Brochure containing a clause that the price was not to be escalated in 
excess of 10% of the tentative cost-Construction of flats under the Scheme 
was completed in 1980-However, flats not allotted to eligible applicants 
who applied for the scheme-No fault was attributed to the applicants-
In 1994 the price of the Flat was increased from Rs. 48,000 to Rs. 
D 2,08,000-Challenge to High Court directing delivery of possession of flats 
at the cost mentioned in the brochure-Held, valid-The cost of construction 
of flats was to be determined on the date of the completion of the 
construCtion and not on the date of delivering possession - The determination 
of cost of house/flat or escalation of cost cannot be arbitrary or erratic~ 
.E The Development Authority could not enhance the prices for the unforeseen 
or/or compelling reasons beyond control of the Development Authority 
even as against the terms and conditions contained in. the brochur~'. ·" 
t·. 
Appellant floated three housing schemes with financial support 
from 'HUDCO' "on no profit no loss basis" for Lower Income GFb'up; 
F and Middle Income Group. A brochure was issued showing the' cost 
of each house and terms and conditions of the scheme. Respondents 
applied for Middle Income Group (the "MIG") and were not allMteci 
the house after more than 18 years for no fault of theirs. The estimated 
cost of each house was specified in the brochure, which was Rs. 48,000. 
G The houses were to be allotted among the valid applicants by lottery 
and on receipt of letter of information of allotment, the applicants ha'd 
to deposit the balance of the I/4th of the cost of the house. Thereafter 
the physical possession of the houses was to be delivered to the allottees 
and the remaining 3/4th of the cost of the house was to be paid by t'1e 
H allottees in 48 quarterly installments in 12 years. Out of 111 MlG flats 
374 
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI 375 
only 108 were valid applications so all the applicants were required to A 
be allotted the MIG flats when l/4th of the cost of the flats were 
deposited. However, the Appellant chose to include the names of some 
more persons after the last date, which gave rise to disputes. Some 
affected applicants filed suits and the court finding fault with the 
Appellant decreed the suit and directed it to allot the houses to 108 B 
valid applicants keeping 8 houses reserved for the persons who were 
plaintiffs in those two suits. The appeals filed by the Appellants against 
the decree passed by the trial court were also dismissed. Instead of 
complying with the decree, Appellant increased the cost of house from 
Rs. 48,000 to Rs. 2,08,000 and directed the applicants to deposit further C 
sum of Rs. 40,000 and in case of default the name of such applicant 
would not be included in the list of lottery for allotment of houses. Some 
of the Respondents filed Writ Petitions, which were admitted. The High 
Court quashed the order issued by the Appellant and directed the 
Appellant to deliver the possession of the houses to the Respondents D 
at the cost fixed in the brochure. Hence these appeals. 
It was contended by the Appellant that the High Court failed to 
appreciate that the Vice Chairman of the Appellant could determine 
the cost of the houses and the cost fixed by him was reasonable and 
fair; t!iat the Appellant had brought out the scheme for allotment of E 
houses on 'no profit no loss basis'; that the cost fixed was based on the 
relevant materials and it was not arbitrary so as to interfere with the 
same; that it was not open for the High Court to hold that the price 
of the house fixed was arbitrary and unreasonable without going into 
the method or the basis for calculating the cost of the house; the delay F 
in allotment of houses was not deliberate or intentional but was 
because of the long pending litigation in court; that the houses were 
constructed by raising loans under the HUDCO Scheme; that enor-
mous amount of interest has been paid on the loan amount; and that 
the appellant had to pay heavy compensation for the acquisition of 
~~ 
G 
It was contende

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