M.P. HOUSING BOARD versus ANIL KUMAR KHIWANI

Citation: [2005] 2 S.C.R. 765 · Decided: 14-03-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

M.P. HOUSING BOARD 
v. 
ANIL KUMAR KHIW ANI 
MARCH 14, 2005 
[ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] 
A 
B 
Code of Civil Procedure, 1908-0rder 39 Rule I-Commercial 
Complex-Scheme of construction-Under self financing scheme-
Advertisement in newspapers inviting offers giving estimated cost-Application 
by a buyer-Subsequentlycost enhanced-Refusal to pay the enhanced cost- C 
Cancellation of registration-Suit by buyer-Interim injunction by trial Court-
Confirmed by High Court-On appeal, held : Grant of interim injunction not 
justified-Courts should be slow in interfering at interim stage with schemes 
based on costing-Interim injunction at initial stage would result in entire 
collapse of project-Matter remitted to trial Court-Urban Development. 
D 
Appellant-Board issued advertisements in a local newspaper and 
'Times of India' inviting offers to subscribe to residential and commercial 
schemes. As per the advertisement in 'Times of India' the cost of a 
showroom in a commercial complex was Rs. 39 lacs while according to 
advertisement in the local newspaper, Rs. 39 lacs was the estimated cost. E 
Respondent-buyer, on the basis of advertisement in 'Times of India' · 
applied for a showroom, with Rs. 3.90 lacs i.e. 10% of the cost towards . 
registration amount. Thereafter, the appellant after preparing detailed 
project report and getting approval from the concerned autl·orities, 
worked out the actual cost which came to Rs. 2000 per sq. ft. and the cost 
of show room came to Rs. 71 lacs. Hence appellant called upon all the ' F 
contributors including the respondent giving an option to withdraw from 
the Scheme if they did not agree with the proposed actual cost. Respondent 
was not willing either to withdraw from the Scheme or to accept the 
actual cost. 
Appellant called upon the respondent to deposit Rs. 71 lacs which 
was objected by respondent. Ultimately appellant cancelled the registration 
of the appellant. 
Respondent filed a suit for declaration and injunction and application 
.G 
765 
H 
766 
SUPREME COURT REPORTS 
[2005] 2 S.C.R. 
A for temporary injunction. Trial Court by its interim order restrained the 
Board from allotting the showroom in dispute to any other person till 
final disposal of the suit. Appeals against order of trial Court was 
dismissed by High Court. 
B. 
In appeal to this Court appellant contended that in advertisement 
in 'Times of India' the word 'estimated' inadvertently stood omitted; 
and that respondent was fully aware that Rs. 39 lacks was the estimated 
cost as terms and conditions attached to the application form filled in by 
the respondent specifically stated so. 
, Respondent contended that the impugned orders should not be 
C interfered with as they were confined only to a particular unit; that 
appellant was bound by its offer as contained in 'Times of India; and 
that in view of the terms and conditions in the document, matter cannot 
be interfered with as the document was not placed befor.e t~e Courts 
below. 
D 
Allowing the appeals, the Court 
HELD: 1. Courts should be slow 'in interfering a.t int~.rim stage 
with schem~s which are based on costing. India is. ha".ing cost-push 
economy. In a self-financing scheme based on costing, an interim 
E injunction has a cascading effect. Failure on the part of even one 
contributory in contributin'g the amount to the cost results in total failure 
of the project. The developer, like the Housing Board, makes an initial 
' 
. 
. 
. 
investment by borrowing funds from the market. Therefore, an interim 
injunction at the initial stage of the· project would result in the total 
collapse of the entire project. It would also affect the contributions made' 
F by other co-purchas~rs. Several components go into costing, including 
the lease ren,t payable to the Sta~e Government. These aspects have not 
been considered by the trial Court. (771-D-E] 
· .. 
/~dore Development Authority v. Sadhana Agarwal (Snit.) ana Ors., 
GI (19951 3 sec 1, relied on. 
Kanpur Development Authority v. Smt. Sheela Devi and'Ors., AIR 
(2004) SC 400, distinguished. 
'! 
Gujarat Bottling Co. Ltd. v. Coca Cola Co., (1995) 5 SCC 545, referred 
H to. 
-
M.P. HOUSING BOARD v.KHIWANI [KAPADIA, J.] 
767 
2. The developer in the present case has an absolute right to increase A 
the cost of flats initially announced as estimated cost. The final cost 
should be proportionate to the estimated cost mentioned in the offer 
keeping in mind the rate of inflation, escalatio

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