WP/8963/2000 of U.SITARAMAJU AND 3 OTHERS Vs APHB VISAKHAPATNAM DIST AND 2 OTHERS on 31 December 2008

Conclusion

COMMON JUDGMENT:

The questions involved in both the writ petitions are one and thesame. Hence, they are disposed of through common judgment.

W.P.No.8256 of 2000 was filed, initially by 12 petitioners. At various stages, petitioner Nos.1, 3, 4, 6, 7 and 10 have withdrawn. W.P.No.8963 of 2000 was filed by 4 petitioners, and petitioners 3 and4 therein, have withdrawn.

Petitioners are allottees of houses, constructed by the A.P.Housing Board, at Vizianagaram. The allotment was done throughdrawal of lots, and the allottees were inducted into possession, afterthe construction was completed. By the time the allottees wereinducted into possession, the cost of the buildings was not finallydetermined. On the basis of tentative cost, arrived at by therespondents, installments were fixed, and the petitioners are payingthe same, from time to time. The respondents issued letters of demanddated 11-03-2000, signed on 12-04-2000, requesting the petitioners topay the amounts specified therein, being the difference between finalcost and tentative cost. Petitioners assail the same on severalgrounds. Their principal contention is that the impugned notice isviolative of Regulation 23(2) of the A.P. Housing Board (Allotment,Management and Sale of MIG/LIG Houses) Regulations 1975, (forshort ‘the Regulation’), inasmuch as it was issued beyond the periodstipulated therein. Other contentions are also urged.

Respondents 1 and 2, on the one hand, and respondent No.3,on the other hand, filed counter affidavits. On behalf of the HousingBoard it is stated that, final cost of the buildings could not be determined, on account of the uncertainty, that prevailed as to the costof the land, acquired for the purpose of the project, and the pendencyof claims of the contractors. It is stated that the 3[rd] respondent had accorded permission for the determination, whichwas made beyond two years, from the date of delivery of possession. The 3[rd] respondent is, almost a formal party, and there is no seriousopposition from it.

Sri D. Sudhakara Rao, learned counsel for the petitioners,emphatically argued that Regulation 23 has a definite purpose toserve, and it prescribes the limitation of two years for determination ofthe final cost of the buildings, without permission of the Government,and it does not provide for ex post facto permission. He contends thatthe action of the respondents 1 and 2, in issuing the impugned notice,is arbitrary and cannot be sustained in law.

Learned Standing Counsel for the respondents 1 and 2, andlearned Government Pleader for respondent No.3, on the other hand,submit that the object underlying Regulation 23(2) is, to enable theGovernment to have control on the acts and omissions of the HousingBoard, and the same does not confer any right on the petitioners. Theycontend that the petitioners cannot be said to have suffered anydetriment on account of the delayed determination of the final cost.

The fact that the petitioners are allottees of the respectivehouses, and that they have paid the tentative cost of the buildings,determined by the respondents 1 and 2, is not in dispute. There is nocontroversy that respondents 1 and 2 did not determine the final cost,by the time the petitioners were inducted into possession of thebuildings. It took more than a decade, for the respondents, todetermine the final cost of the buildings. Strong reliance is placed upon Regulation 23(3), while assailing the impugned notices. Theprovision reads as under:

“23(3): The final fixation of sale price should be done withintwo years from the date of allotment of the house. The saidperiod may however be extended by Government in the caseof such of the houses whose final cost cannot be fixed withintwo years prescribed, because the matters relating to landcompensation to the payment of final bills to the Contractorsare pending in the Court”.

In the ordinary course, whenever any building is constructed, orother civil works are taken up, the final cost thereof, becomes evident,at the stage of completion of the work. However, the works undertakenby the Housing Board stand on a slightly different footing, in thisregard. The reason is that, the uncertainty, as regards certain factors;continues even after the buildings are constructed. For example, thedetermination of compensation, payable for the land, that is acquiredfor construction of houses; is a long-drawn affair. While theconstructions are undertaken, soon after the possession of the land istaken, the proceedings under the Land Acquisition Act, be it, in theform of an award enquiry, or reference under Section 18, or an appealto the High Court, and in some cases to the Supreme Court, would bepending, even for decades.

The cost of the land, would have a direct bearing on the cost of thebuilding. It is only after the compensation payable for the land is finallydecided, that a clear picture would emerge about the cost of thebuilding. Similarly, in certain cases, the estimates undergo changesdue to variation of prices of the materials, such as cement and steel,and the claims made by the contractors, in this regard, need to befinalized. Even this picture would emerge quite some time, after thecompletion of the construction.

Regulation 23(3) gives a margin of two years for determinationof final sale price, from the date of the allotment of the house. It is notas if the determination thereafter, is prohibited.

The only requirement is that the permission of the Government is to beobtained.

It is no doubt true, that respondents 1 and 2 issued demandnotices, after determining the final sale price, without obtaining thepermission of the Government, and that the same came to bewithdrawn by them, after writ petitions were filed. Such withdrawal,however, does not take away the right of the respondents 1 and 2, toraise the demand, in accordance with law. The demands were issuedafter the Government accorded its permission. Government extendedthe period, beyond two years.

Much stress is laid upon the words ‘ex post facto’, used in theimpugned notices. On a close examination thereof, it becomes evidentthat the expression superfluous. Once the Government is conferredwith the power to extend the time, to determine the final sale price,beyond two years, and when there does not exist any ceiling on that,the petitioner cannot raise any objection. At any rate, the restrictionplaced through Regulation 23(3), is only for internal administration andcontrol, and it does not have any bearing on the rights and obligationsof the allottees of houses, on the one hand, and the A.P. HousingBoard on the other hand. This much, however, can be said that, theHousing Board cannot penalize the allottees for the delay, on its part,in determining the final sale price. Therefore, this Court is not inclinedto interfere with the impugned demand notices. The petitioners,however, cannot be burdened with interest, for the period, from thedate of allotment, till the date of the notice.

For the foregoing reasons, the writ petitions are disposed of, upholding the determination of final cost of the houses of thepetitioners, and directing that, a)the petitioners shall be liable to pay the difference betweenthe final sale price and tentative sale price, and not theinterest thereon, from the date of allotment, till the date of thedemand, through the impugned notices.the final sale price and tentative sale price, and not theinterest thereon, from the date of allotment, till the date of thedemand, through the impugned notices.

b)The petitioners shall deposit the difference of the sale price,within four weeks from today. In default, they shall be liableto pay the said amount, with interest at 7% per annum fromthe date of filing of the writ petitions, till the date of deposit.within four weeks from today. In default, they shall be liableto pay the said amount, with interest at 7% per annum fromthe date of filing of the writ petitions, till the date of deposit.

c)The Housing Board shall execute the sale deeds in favourof the petitioners within one month from the date of paymentof the final cost, as indicated above.of the petitioners within one month from the date of paymentof the final cost, as indicated above.

There shall be no order as to costs.

Dt.10-04-2007.

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L. NARASIMHA REDDY, J.

Note:L. R. copy to be marked.(B/O)KO*