Premji Bhai Parmar & Others Etc. v. Delhi Development Authority & Others

Judgment

ORIGINAL JURISDICTION : Writ Petitions Nos. 4660/78 & 562/79 (Under Article 32 of the Constitution). Y. S. Chita/f and R. R. Datar for the Petitioner in W.P. No. 4660/76. L. M. Sing!!l"i. Sardar B"hudur Sahariya, Vishnu Bahadur Sahariya antl L. K. Pm;dey for the Respondent No. 1 in both the Writ Petiticns. F. S. NarimaJZ and B. Datta and K. K. Manchanda for the Petitioner in W.P. No. 562/79. The Judgment of the Court was delivered by DESAI, J. Allottees of fiats, constructed by the Delhi Develop· men; Authority ('Authority' for short), loca'ed at Rajouri Garden, [19HJ1 2 S.C.R. Prasad Nagar and Lawrence Road comprised in Middle Income G10,1p scl,"me, question the decision of first respondent (De;hi Devclopmen:

Authority) to collect surcharge as part of the sale price of eoch flat from each of :hem as unautho,-ised ahtl discriminatory in character, in thc•se two petitions under Article 32 of th•c Constitution. _Both the petitions raise idcn'.ical contenLic.as and i_· was said that ,~Vrit Petiti0n No. 562 o[ 1979 is more cornrrehcnsive in cb~~ractcr and, therefore, the facts alieged therein may \Jc taken as representative i'n character. They may be briefly s'.ated. Delhi Development Authority was set up under the Delhi Development Act, 1957. The Act was enac~:ed to provide for the development of Delhi according to plan and for matters ancillary thereto and for carrying ou: the objects underlyrng the Act, the Authority has prepared Master and Zonal development p'.ans for Delhi.

W1tb a view to easing the acute housing problems in the capital city the Authority undertakes construction of dwelling units for people belonging to different income groups s"yled as Middle Income Group ('MIG' for short), Low Income Group ('LIG' for short), Janta and Community Personnel Service ('CPS' for short). In 1971 the Authority commenced registration of intending applicants desirous of having a dwelling unit in different income groups. Some of the peti"ioners got themselves registered with the authority in accordance with the terms and conditions laid down by it and made the initial deposits as required by 1he terms and conditions. Petitioners had applied and got themselves registered for al'.otment of flats in MIG scheme situated at La\\Tcnoe Road.

As the number of available flats in this scheme were less than the number of allot:ees registered, lots were drawn and the pe"itioncrs were informed that they have been allotted flats and that each of them should deposit the amount men'ioned in the letter of allotment. It appears that the peti' ionors paid the amount they were called upon to pay and a flat was allotted to each of them &nd they have entered into possession. Petitioners now contend that the Authority being a statutory body formed with a'n object of working on 'no profit no loss' basis and having prescribed a formula for workin~ out the cost price of flats has ~evied and collec~od a surcharge from each of the petitioner. According to the petitioners the cost price worked out in accordance with the formula prescribod by the Authority, cost of each flat would be between Rs. 51,800 and Rs. 55.600 dependinQ upon rhe area. extra bolconv etc. However, each one of them had to pay between Rs. 56.000 to Rs. 60.000 and that according to" the petitioners a surcharge varying from Rs. 3.'100 to Rs. 6.000 for a flat has been illeoal\y and unla wfulJy collected by way of premium or profit.

It is further alleged that the , P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) Autl101ity has not levied and collected such surcharg;~ from other allottcees of fia's in some other MIG Schemes and that this action of levying and co;lecting surcharge is violative of Art. 14 inasmuch as persons belonging to the same class. namely, allottees of fiats in MIG scheme have been unequally treated. It is also alleged that there was no valid or understandable justification of levying and collecting surchar~e as price cf fiats compr18ed in MIG Schemes, between 19 76 and 1977, and that from May 10, 1978, this unauthorised surcharge has been abolished.

Petitioners also contend that th~ assertion cf the Authority lhat ·this surcharge was levied and col:ected with a view to financing housing projects for lower income groups, Janta and CPS dwelling units so as to provide these weaker sections of the society, houses at a price lower than cost price with a view to making them affordable by such members of the weaker sections of the society, is mlkd by facts undisputed and that the whole attempt of the Authority, in violation of its avowed policy, was to make profit by levybg such illegal surcharge. The petitioners, therefore, prayed for issue ol a writ or order or direction declaring the l·~vy of surcharge "s illegul and unconstitutional and for a direction for refund thereof togNher with the interest at the ra'.e of 12% per annum from th~ <late of levy and collection till the date of refund.

In the cognate petition the p~'.itioners are allottees of flats situatro at Prasad Nagar and Rajouri Garden under MIG scheme and they e-0mrl~in that in their case surcharge varies from Rs. 19,200 to Rs. 22,600. Respondents to the petition are Delhi Development Authority, No. 1 am' Chairman and Vice-Chairman of the AuthorLy, Nos. 2 and 3 respectively. In Writ Petition No. 4660178 the Authority is respondent 1 and Union of India, respondent 2. Petitions were mainly contested by and on behalf of the Authority. The Delhi Development Act, 1957 ('Act' for short), was enacted as its ll'ng title shows with the a vkw to providing for the deve:opm.:nt of Dcln1 according . to the plan and for arresting haphazard growth and for matters ancillary thereto.

It envisages the set'.ing up of an Authority to be styled as Delhi Development Authority which would h;, a buly corporate by the name aforesaid having perpetual succci;sioll and a common seal with power 'o acquire, hold and dispose of property. both movable and immovable, and to contract and shall by the said name, sue and be sued. The composition of the Authority is set out in sub-section (iii) of s. 3. Amongst others, Administrator of Union Territory of D~lhi would be an ex-officio Chairman and a Vice-Chairman to be appointed by the Central Government. The ll (1%0] 2 S.C.R. Vice-Chairman may be either a who:e-time or part-time officer a> the Central Gover,;nment may think ftt. Section 5 contemplates the constitution of an Advisory Conncil for the purpose of advising the Authority on the preparation of the master plan and on such matters relating to the planning of development or arising out of or in connection with the administration of :he Act.

Section 5A which was added by am~nding Act 56 of 1963 confers power on the Authority to constitute as many committees con,isting wholly of members or wholly of other persons or partly of membens and parly of other persons and for such purpose or purposes as it may think fit. Chapter III-A which was inserted by the Amending Act of 1963 confern power for moJification of the master phfn once prepared. Chapter JV providog for development of lands. Chapter V confers power on the Central Government to acq uirc land (or the purposes of development or for any other purpose under the Act under the provisions ot tho Land Acquisition Act, I 894, and further authorises the LtUtral Governmeht to transfer the :and so acquired to he Authority. Chapc·er VI provides for finances and audit of the accounts of the Authority. Ch8pter VII provides for supplemental and miscellaneous provisions.

Section 52 confers power on the Au:hority to delega:e any power exercisable by it under the Act, except the power to make regulations, on such officer or local authority or committee constitucd under s. SA as may be mentiohe<l, by a notifica:ion to be published in the Official Gazette in such cases and subject to such conditions, if any, as may be specified therein. One mar·~ section of which notice should be taken is s. 57 which confers power on the Authority with th: prc;•ious approval of the Central Governmen: by notification m the Oflicial Gazette to make regulations consistent with the Act and the rules made thereunder to carry out the purposes of this Act. Sub-s. (2) provides that until the Authority is established under the Act any regulation which may be made under sub-s. (1) may be made by the Central Government and any regulation so made may be altered or rcsc•nded by the Authority in exercise ol its powers under ,ub-s. (1).

Sec'. ion 58 makes it obligatory to lay every rul•c and regulation made under this Act before each I-louse of Parliame'nt in session f0r a period of 30 days and subjccto any alteration or modificuuon therein, the rule or regulation shall after expiry of the prescnbed pcricod mentioned have e!Iect only i·n such modified form or be of no effect as the case may be. so however that any such modification or an11ulm2nt shall be without prejudice to the validity of any;hing previously cto·ne under the rule or regulation. Petitioners belong to MIG, each of whom registered himself as an· intendbg app:ican'. for a flat in MIG scheme and each of whom h"~ P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 7 11 been allotted a flat either in Rajouri Garden, Prasad Nagar or Lawrence Road.

Number of persons desirous of having a flat registered with the Authority far outnumbered the available flats with the result that lots had to be drawn and the lucky Gile• got a letter of allotment to pay the price set out in the brochure in respect of each scheme and to obtain a flat. Each petitioner had paid the price and has entered into possession of the allotted fla:t. All the petitioners now contend that the Authority has levied and collected a surcharge as part of purchase price of flat arbitrarily and without the authority of law and has collected the same from them in vio:ation of its object of functioning on 'no profit no loss' basis and thereby made a huge profit. They further contend that they have been subjected to discrimh;atory treatment in contravention of Art. 14 of the Constitution inasmuch as no surcharge has been collected from allottees of flats in MIG schemes prior to November 1976 and subs•:quent to January 1977 except these three schemes and one Wazirpur MIG scheme.

Further, no other MIG scheme fiats have been subjected to such unauthorised levy ol' surcharge. It is pointed out that the levy of surcharge has been scrapped in 1978. The petitioners contend that levy of surcharge has no n:xus to the object for which the Au'hority was set up, namely, providing housing accommodation at reasonable price by the Authority whose declared policy is 'no profit nu luss'. It was said on behalf of the petitioners that even if :b:

Authority was set up for providing housing accommodation to the people in dillercnt income groups (keeping in view their financial capacity/affordab1lity J yet a statutory body like the Authority operating on 'no profit rm loss' bas:s must have a scientifically prescribed formula for working out its price structure and that must be uniformly applied to all those who apply for flats and to whom they are allotted and such a statutory Authority cannot discriminate in working out the disposal price of the flats by including surchar19;, in respect of some MIG schemes within a certain specified period, a surcharge not authorised by law and not sanctioned by the Authority as a component of price and unknown to pricing of fiats, while others similarly situated and similarly circumstanced and belonging to the same income group enjoyed the benefit of getting flats at cost price and, therefore, pe!itioners have been accorded discriminatory treatment in th;, matter of price of flats allotted to them.

Petitioners, therefore, contend that even if they applied for flats and got registered and were offered fiats and accepted the same at the price stated in the brochure and even if it has resulted in a concluded contract yet the Court should not turn a blind eye to such gross discrimination by a statutory authority charged with a duty to provide housing accommodation a~ting on the declared policy of 'no profit no 8-91SCI[80 71 2 [l\loO] 2 S.C.R. Joss'. lt was simul:aneously co·ntended that the Vice-Chairman of the Authority authorised to determine the prices of flats in each incom<: group has not made any order or has not given any direction for levying surcharge and that the levy of surcharge was wholly unauthori>ed. A preliminary objection was raised by the Authority that the petitions are not maintai·nable under Art. 32 of the Constitution inasmuch as the petitioners hav•2 not come to the Court for enforcement of a fundamental right con(erred upon tbe petitioners under Part III of the Constitution but the petitioners have invoked jurisdiction of this.

C::ourt for ~ relief of re-opening concluded contracts. It was also submitted that if the Court accepts the contention of the petitioners they would derive an unf"ir advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is exc:uded they may have applied for flats at a lower price and, therefore, also the Court should not entertain the petitions. Though we are not inclined to reject the petitio"ns on this preliminary objection as we have heard them on merits it is undeniable that camouflage of Art. 14 cannot conceal tbc real purpose motivating these petitions, namely, to get back a part of the purchase price of flats paicl by the petitioners with wide open eyes after flats have been securely obtained and petitio·n to this Court under Art. 32 is not a proper remedy nor is this Court a proper forum for re-opening the <:oncluded contracts with a view to getting back a part of the purchase price paid and the benefit taken.

The undisputed facts are that petitioners offered themselves for registration for allotment of flats thai may be constructed by th2 Authority for MIG scheme. After the registration and when the flats were constructed and ready for occupation brochures were issued by the Authority. One such brochure for allotment of MIG flats in Lawrence Road residential scheme is Arnexure R-1. This brochure specifies the terms and conditions including price on which flat will be offered. It also reserved the right to smTendcr or cancel the registratio"n, the mode and method of paying the price and handing over the poosession. There is an application form annexed to the brochure. Annexure 'A' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively. It sets ont the premium amount payable for land as also the total cost in respect of the flats ou the ground floor, first floor and second floor.

The statement also shows tho earnest money depooited at the time of the registration and the balance payable. It is on the basis ot these. brochures that the applicants applied for the flats in LawNnce Road and other MIG schemes. They knew and are presumed :o know the contents of the brochure and particularly the price 'l'. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) payable. They offered to purchase the fiats at the price on which th~ Authority offered to sell the same. After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took pos9ossion of the fiat, and thus sale became complete. There is no suggestion that there was a mis-statement or incorrect statement or .any fraudulent concealme'nt in the information supplied in the brochure published by th.: Authority on the strength of which they applied and obtained :flats.

How the seller works out his price is a matter of his own choice unless. it is subject to statutory control. Price of property is in the realm of con!ract between a seller and buyer. There is no obligation -on the purcha9er to purchase the flat at the price offered. Even after registration the registered applicants may opt for other schemes. His right to enter into--other scheme opting out of present offer is not thereby jeopardised or negatived a-nd applicants so outnumbered the available fiats that lots had to be drawn. With this background the petitioners now contend that the Authority has collected surcharge as component of price which the Authority was not authoris•ed or entitled to collect. Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject-matter of a petition under Art. 32. And Art. 14 cannot camouflage the real bnne of contention.

Conceding for this submission that the Authority has the trapplngs of a Stat•:: or would be comprehended in 'other authority' for the purpose of Art. 12, while determining price of fiats constructed by it, it acts purely in its executive capacity and "is. bound by the obligations which dealings of the State with the individual citizens import into every tra:nsaction entered into the exercise of its constitutional powers. Bui after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by th" Constitutional provisions but by the legally valid contract which determines rights and obligations of the parties iJtter se. No questio·n arises of violation of Art. 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act.

In this ~phere, thoy can only claim rights conferred upon them by contract and are bound by the· terms of the contract -only unless some statute steps in nnd confers some special statutorv power er obligation on the State in the contractual fold which is apai:t from contract" (see Radhakrishna Aganval & Ors. v. State of Bihar & Ors.) . ( l) Petitioners were under no obligation to seek allotment of fiats even after th::y had registered themselves. They looked at the price and flats and applied for the fiats. This they did voluntarily. They were advised by the brochures to look at the flats before going (l) [1977] 3 S.C.R. 249 at 255. [1980j 2 S.C.R. in for the same. They were lucky enough to get allotment when the· lots were drawn. Each one of them was allotted a fiat and he paid the price voluntarily.

They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of fiat. , The Authority in its affidavit in reply in terms stated that it is. willing to take back the fiats and to repay them the full price. The transaction is complete, viz., possession of the fiat is taken and price is paid. At a later stage when they are secure in possess.ion with title, petitioners are trying to get back a part of the purchase price and thus trying to re-open and wriggle out of a concluded cmrtract only partially. In a similar and identical situation a Constitution Bench of this Court in Har Shankar & Ors. etc. etc. v. The Dy. Excise & Taxation Commr. & Ors.(1) has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits.

Reciprocal rights mod obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract. would ever have a binding force. The jurisdiction of this Court under Art. 32 of the Constitution is not intended to facilitate avoidance of ob!iga· lions voluntarily incurred. It would thus appear that petitions ought not to have b:~en entertained. However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined. The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the Authority is discriminatory inasmuch as no surcharge was levied on fiats in MIG scheme coinstructed and allotted prior to November 1976 and after January 1977.

MIG fiats involved in these petitions were constructed and were available for allctment in November 1976 and the lots were drawn in January 1977. Theroo is one more MIG scheme at Munirka where the allotment took place at or about the same time but in which case no sur- .:harg~ was levied. The contention is that once for the purpose of eligibility to acquire a fiat, the criterion is grounded in income brackets, MIG, LIG, et et. those in the same income bracket form one class even for the purpose of determining disposal price of fiat allotable to them irrespective of sitnation, location or other relevant determinants which enter into price calculation and therefore, in the same income group there cannot be differentiation by levying of surcharge in some cases and charging only the cost price in other cases and that the discrimination is thus writ large on the face of the record (I) [1975J 3 s.c.R. 254. P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.)

71 i; 'because by levying surcharge in case of petitioners they have been treated unequally and with an evil eye. It is difficult to appreciate how Art. 14 can be attracted in the circumstances he1'.':inabove mentioned. Cost price of a prope1ty offered for sale is determined according to the voiition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. Except the submissim that the Authority has a proclaimed policy of constructing and offering flats on 'no profit no loss' basis which according to Mr. Nariman has a statutory flavour in the regulatiohs enacted under the Act, the Au:hcrity is under no statutory obligation about its pricing policy of the flats constructed by it.

When the fiats were offered to the petitioners the price in round figure in respect of each flat was mentiooed and surcharge was not separately set out and this price has been acoopted by the petitioners. The obligation that regulations are binding on the Authority and have provided for a statutory pric•o fixation formula on 'no profit no loss' basis will be presently examined but save this the Authority is under no obligation to fix price of different fiats in diffcren\ schemes albeit in the same income group at the same level or by a·ny particular statutory or binding formula. The Authority having the trappings of a State might be covered by the expression 'other authority' in Art. 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase fiats in tbe same scheme.

Those who opt to take flats in "' particular income-wise area-wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract Art. 14. But to say that throughout its course of existence tile Authority would be bound to offer fiats income-groupwise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure. In price fixation eioecutive has a wide discretion and is only ahswerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Gove(mnent of the day to decide. The experts alone can work out the mechanics of price determi"nation; Court can certainly not be expected to decide without1 the assistance of the experts (See Prag Ice & Oil Mills and Anr. etc. v. Union of India)(')

In the leading judgment it has been observed that mechanics qf price fixation have necessarily to be left to the executive and unless it is pat·~nt that there is hostile discrimination against a class the processual basis of price fixation has to be accepted in the generality of cases as valid. (!) [1978] 3 S.C.R. 293 at 330. [1980] 2 3.C.R. This Court in Avinder Singh State of Punjab.( 1) approved the following dictum of Willis on Constitutional Law, page 587 : "The State does not have to tax everything in order to tax something. It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably ... The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation." What is forbidden by Art. 14 is discrimination amongst persons of the same class and for the pnrposes of allotme'nt of flats scheme-wise, sllottecs of flats in the same scheme, not different schemes in the same income bracket, will have to be treated as a class and unless in each such class there is unequal treatment or unreasonable or arbitrary treatment, the complaint that Art. 14 is violated cannot be entertained.

Therefore, in the State of Gujarat & Another v. Shri Ambica Mills Ltd., Ahmedabad, etc.,(') Mathew, J., speaking for the Court observed a$ under : "A ioeasonablc classification is one which includ·~s all who are similarly situated and none who are not. The question then is what does the phrase 'similarly situated' mean ? The answer to the qu•estion is that we must look beyond the classification to the purpose of the law. reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law. The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good." Is the classification income-wise scheme-wise violative of Art. 14 in any manner? The Authority formulates inconro-wise area-wise schemes for constructing flats. Petitioners contend that there should be only income-wise classification wholly ighoring area and time factor for classification.

They say that allottees of flats in all MIG schemes irrespective of area and location and irrespective of when the flats were constructed form one class for determining price of flats. There is no merit in this contention. Wha: are price determinahts ? Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management chargos are alf variable factors that enter into price fixation. Their cost varies ;imewise, place-wise, availability-wise. All these uncertain factors cannot (I) [1979] 1 S.C.R. 845. (2) [1974] 3 S.C.R. 760 at 782. I t ~ P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 717 be overlooked for the purpose of classification. Therefor-<,, it is not possible to hold that allottees of flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing pvlicy.

Only valid basis for classification would be income-wise, areawis-e, time-wise, scheme-wise, meaning all fla:ts constructed at or about tbe same time in same area in one project for particular income-group will form a class. And there is no discrimination amongst them. Pricing policy is an executive policy. If the Authority was set up for making available dwelling units at reasonable prioc to persons belonging to different rncome-groups it would not be precluded from devising its own price formula for different income-groups. If in 30 doing it uniformally collects something more than cost price from those with cushion to benefit those who are Jess fortunate it cannot be accused of discrimination.

In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaki'ng a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can _by no stretch of imagination attract Art. 14. People in the MIG can be charg"d more than the actual coot price so as to give benefit to allottees of flats in LIG, Janata and CPS. And yet record shows that those better off got flats comparatively cheaper to such IJms in open market. It is a well recognis·od policy underlying tax Jaw that the State has a wide discretion in selectin~ the persons or objects it will tax and that the statute is 'not open to attack on the ground that it tuxes some persons or objects and not others.

It is only when within the range of its selection the: Jaw operates unequally, and this cannot be ju>,ified on the basis of a valid classification, that there would be a violation of Art. 14, (see East India Tobacco Co. v. State of A11dhra Pradesh). ( 1) Can it be said that classification, income-wise-cumscheme-wise is unreasonable? The answer is a firm no. Even the petilioners could not point out unequal treatment in same class. However, a feeble attempt was made to urge that allottees of flats in MlG schoome at Munirka which project came up at or about the same time were uot subjected to surcharge. This will be presently examined but aside from that, contention is that why within a particular period, namely, November 1976 to January 1977 th•o policy of levying surch~rge was resorted to and that in MIG schemes pertaining to period pnor to November 1976 and later April 1977 no surcharge was levied. (!) [1963] I S.C.R. 404.

71 8 If a ce11ain pricing policy was adopted for a certain period and was uniformly applied to projects coming up during that period, it canno'. be the foundation for a submission why such policy was not adopted earlier or abandoned later. It was, however, said that J."vying of surcharge runs counter to object for which the Authority was set up, namely, to make available housing accommodation on 'no profit no Joss' basis. The argument proceeds o'n the assumption that the principle of 'no profit no loss' implies that in re~pect of each fiat the cost of its construction musti be worked out and that alone can be the disposal price of each fiat. Principle of 'no profit no loss' bas been explained by the respondents.

It is said that in tho over-al! working, planning and executio'n of projects which the Authority undertakes as part of development of Delhi, the integral part of it being construction of fiats for different incomegroups the motives and working of it would not be profit oriented but would work on 'no profit no loss' economic doctrine. This would not for a moment suggest that the principle of 'no profit no Joss' should apply either to every fiat or to every scheme or to •overy piece of land developed by the Authority. It would be impossible for the Authority to function on such fragmented basis and such a policy cta•emcnt has not been made by the Authority. Of course, som~ public statement appears to have been made that the overall working of the Authority is on "no profit no Joss' basis.

Respondent 1 has been able to point out that the Authority's housing scheme as a whole has been running in a heavy deficit because fiats including such as those of the petitioners actually cost much more than the initiaily determined estimates and by the time fiats are ready for occupation initial estimates founded o'n prevalent market prices of materials and labour escalate and revised estimates have to be made. It is also shown that till Municipal authority . talo~s over municipal services the Authority spends for the same and incurs cost. Apart from that p~litioners have not been able to show that the Authority is actuated by commercial profit oriented approach in its overall working. It is, however, neoossary to examine the contention whether this "no profit no Joss' policy statement has any statutory flavour as contended by Mr. Nariman. The regulations styled as the Delhi Development Authority (Management and Disposal of Housing Estates)

Regulations, 1968, ('Regulations' for short) are f~amed in exercise of the powers conferred by s. 57 and were laid before the Houses of Parliament as required by s. 58. Disposal price has been defined in Regulation 2 (13) to mean in relation to a property such price as may be fixed by the Authority for such property. There is not the slightest or even a remote reference to 'no profit no loss' formula for • ~- B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, !.) 71 9 determini~g tho cost price. A quick survey of the Regulatio'ns do not spell out any formula for price determination on the basis of 'no profit no Joss'. Whether the power to determine disposal price is in the Housing Commi:tee will bo presently examined.

Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the Authority and as price has b"en fixed by the delegate of the Authority even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the Authority. It is at this stage necessary to examine the contention that in the ·case of Wazirpur and Munirka LIG schemes which came up during this very period no surchar(lo was levied and, therefore, there is invidious discriminatio'n amongst members of the same class. Again ·the argument proceeds that income-wise classification alone is valid. Here time-wise (November 1976 to January 1977) classification is relied upon. It is an admitted position that no surcharge is levied 0n MIG fiats at Munirka.

The affidavit. in reply shows that the land -on which fiats are constructed in Mu'nirka MIG scheme turned out lo be very rocky with the result that the construction cost in respect -Of fiats at .Munirka MIGs scheme worked out at Rs. 456 per plinth area per metp;, whereas in respect of Lawrence Road it came to Rs. 401.54 p. only. The Authority, therefore, thought that if sur- -eharge is levied on fiats under MIG scheme in Munirka area the disposal price would be very high and would be beyond the reach of MIG. It is in this background of the special facts that no surcharge was levied in respect of any fiat in MIG in Munirka area. Projectwise price fixation cannot be dnbbed as arbitrary or discriminatory in comparison with other projects at diffurent places. It was, however, pointed out that 132 flats in Rajouri Garden MIG scheme were disposed ofwithout levying surcharge as component of sale price.

It is pointed out in affidavit in reply that these flats were handed over to the Government of India for meeting their needs for staff quarters and that was done in the year 1978. It is ~!so pointed out that the Government charged half the price of the fand in respect of these 132 fiats and, therefore, surcharge was not levied. There is two-fold fallacy in this submission. Government ordinarily is in a class by itself and its needs of staff quarters deserve to be met in large public inters!. Government has not got any undeserved benefit at the cost and risk of petitiomrs. Hence their complaint in this behalf is without merits. 1 It was 'next contended tha: surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not answer any SUPRE1'1E CO.URT REPORTS rational, tangible, scientific er understandable formula. '"How th" figure of surcharge has been worked out has been explain~d in detail in. affidavit in reply.

Briefly recapitulating the same, it may be mentioned that initial estimates for 304 MIG flats i:n Prasad Nagar area were prepared in or about 1971 and the estimated cost was Rs. 1,17,83,200 and that on March 21, 1972, an estimate of Rs. 1,09,97,100 was sanctioned. After the work commenced and the actual cost started coming in the revised estimate for 304 flats was of the order of Rs. 2.07,33,000 which was approved by the Vice- Chairman on September 18, 1976. According to :he revised estimate the approximate disposal cost for each flat came to Rs. 68,202 and the cost of land per dwdli"ng unit was Rs. 7,008. Extracts of original notes of Financial Adviser (Housing) and the approval of the same by the Vice-Chairman have been set out in the affidavit in reply. The subsequent r-"vised estimates show that disposal price of each flat would be Rs. 75,200. In the meantime the Income Tax Department wanted to acquire 40 MIG flats in Prasad Nagar area a'nd the same w~re offered at the price of Rs. 75,000, per flat.

Commissioner of Income Tax accepted the price. This became the starting point for working out the disposal price in that period. The difference h~tween the cost price and the disposal price of Rs. 75,000 per flat was treated as surcharge and the purpose was to use the extra money for extending cost reduction benefit to the allottees of flats in LIG, Janata and CPS schemes. Affidavit in reply of the Secretary of Respondent 1 provides further information which shows tha:t the cost price would be Rs. 78,000. Therefore, at best the component of surcharge would be between Rs. 1700 to Rs. 2200 in Rajouri Garden MIG flats. Similarly, with ""gard to MIG flats at Lawrence Road the actual cost price would be in close proximity of the disposal price· would be in close proximity of the disposal price charged from the petitioners. It is, therefore, difficult to ent·~rtain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational.

The next contention is that Vice-Chairman had no authority to levy surcharge and that even if he has authorised the same it runs counter to the principle of fixing disposal price incorporated in Resolution No. 209 dated November 26, 1974. The Vice-Chairman is to be appointed by the Central GoV'~rnment as per s. 3 (3) (b) of the Act. It appears that this Vice-Chairman is whole-time offic•er and will be the Chief Executive of the Authority. This becomes clear from regubt,lon 3 of the Regulations which provides as under : "3. These regulations shall be administered by the Vice- Chairman, snbject to general guidance and rcsolutio"ns of the P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) Authority, who may delegate his powers to any officer of the Authority". Thus the Vice-Chairman, subject to general guidance and resolutions of the Authority, shall administer the regulations. He can delegate the functions to any officer of the Authority.

Regulation 59 is important which reads as under: "59. The Authority may delegate all or any of its powers under these regulations to the Vice-Chairman or to a wholetirne men1~r". A .. Armed with this power of delegation the Authority adopted Resolution No. 60 dated Febrnary 21, 1970 w'hich reads as under : "Reoolved that the recommendations of the Committee be approved and all the powers of Delhi Development Authority be exercised by the Housing Committee and the Chairman, Delhi Development Authority be authorised to constitute the said committee, determine the organisational set-up and take (sic) all efforts for implementing the housing and allied schemesn. Serious exception was taken to this gross abdication of its powers and functions by the Authority. The composition of the Authority as set out in s.

3 would include such persons as Finance ahd Accounts Member, Engineering Member, representatives of Municipal Corporation of Delhi and representative.s of Metropolitan Council as and when set up. Three o,ther persons were to be nominated by Central Government of whom one shall be person with experience of planning. It is a high power body. Yet it completely abdicated its power and authority in favour of Housing Committee. The Housing Committee will practically supplant the Authority. But the more objectionable part of Resolution No. 60 is that such Housing. Committee which is to enjoy all pcwers and fu'nctions of the Authority was to be constituted by the Chairman at his sole discretion because he was authorised not only to constitute the Housing Committee but to determine organisationa~ set up and then make all efforts for implementing the housing and allied schemes.

It is really difficn;t to appreciate sru:h whole-sale abdication or d•clegation of powers by a :statutory authority in favour of a Committee whose composition would be determined by one man, the Chairma'n. By process of elimination the Housing Committee could supplant the Authority and the Chairman could constitute Housing Committee. Therefore, the Chairman enjoyed 72 2 a very ."".ide discretionary power. Though Mr. Nariman did challenge the ~ahd1ty of R~solution No. 60, Mr. Chitaley in cognate petition reframe~ from domg so. Once the power to delegate is given by the Regulattons the challenge to validity on th~ ground of delegation must fail. It is, however, necessary to examine the submission whether Vice-Chairman could have permitted levy of surcharge as a component of the price of flats in MIG schemes. In this connection it would be advantageous to refer to Resolution No. 200 dated June 18, 1968, of the Authority by which the recommendations of the Standing Committee, inter alia, empowerrng the Vice-Chairman to approve forms of application as well as to fix the disposal and hire-purchase price were accepted.

Resolution No. 209 is th~ one adopted by the Horning Committee. It takes note of the delegation of powers to fix disposal and hire-purchase price of flats to the Vice-Chairman and further provides that if there is a marginal saving in any scheme the amount is always diverted to subsidise cost of Janata and CPS houses. It seems the Resolution is for rnformation of the Housing Committee and the Housing Committee has merely resolved that the information be noted. The Resolution No. 200 of 'the Authority with Resolution No. 209 of the Housing Committee sets out clearly that the power to fix the disposal price was delegated to the Vice-Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with s. 59 clearly envisages such delgation of powers.

It is, therefore, idle to contend that the Vice-Chairman had no authority to levy the surcharge as component of disposal price of flats. It was next contended that even if Vice-Chairma'n had such power there is nothing to show that he has exercised this power and that, therefore, somewhere without any authority someone has added the surcharge to the disposal price and that, therefore, the levy of surcharge is unauthorised. The submission seems to be factually incorrect. The note of Accounts Officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the fiats have been offered at the rate of Rs. 75,000 to th~ Commissioner of Income Tax for the Income Tax Department nnd that should be the disposal price. This note was approved by the Financial · Advisor (Housing) and ultimately countersigned by the Vice-Chairman. Therefore, the price of Rs. 75,000 as the disposal price is approved by the Vice-Chairman.

Even if it includes surcharge it cannot be said with confidence that the Vice-Chairma'n has not approved the surcharge as a compr:nent of disposal price. P. B. PARMAR v. DELHI DEVELOPMENT AUTHORITY (Desai, J.) 723 The last contention is that the Anthority has made a huge profit by levy of surcharge. In this connection statistical table was annexed to the petition and there was serious controversy about the facts and figures set out therein, by the other side. Having gone through the detailed ·affidavit in reply it transpires that the contention is without merits. Therefore, there is no substance in the contention that the Authority has made a huge profit. On the contrary it appears that the overall working of the Authority is deficit ridden. These were all the contentions in these petitions and as there is no merit in any of them the petitions are dismissed. There will be no order as to cost. Petitions dismissed. N. K. A