Case Note & Summary
The dispute arose from a provisional letter of allotment issued by Haryana Urban Development Authority for an industrial plot at Roz-Ka-Meo Industrial Estate, Gurgaon, measuring 4000 sq. yards at a tentative price of Rs.2,42,000 (Rs.60.50 per sq. yard). The allottee deposited Rs.25,000 and was required to deposit a further Rs.35,500 within a stipulated period as 25% of the cost. The balance 75% was payable in six annual instalments with 10% interest, subject to compliance with formalities including registration, building plan approval, financial sanction, and electricity connection. The provisional letter provided that acceptance must be communicated within time; if within 30 days, the letter remained valid for 90 days for self-financing or 180 days if raising a loan. The allottee sought extension to complete formalities, but the extension was granted subject to payment of Rs.1 per sq. yard per month as extension fee. The allottee did not pay the extension fee, and the authority declined further extension. Meanwhile, land rates increased to Rs.192.45 per sq. yard by July 31, 1992. The final letter of allotment was issued on November 23, 1992, demanding Rs.9,20,680.80 at the increased rate. The allottee challenged this demand in a writ petition before the Punjab and Haryana High Court, which directed the authority to collect at the provisional rate of Rs.60.50. The authority appealed to the Supreme Court. The appellant contended that under Clause 5 of the provisional letter, if extension of time was sought, rates prevalent at the time of final letter of allotment must be charged. The respondent relied on a government policy directive dated September 21, 1991 and two letters (one from Commissioner of Industries dated June 15, 1993) directing that cost of land communicated in the letter of intent/provisional allotment should remain unchanged during the extended period. The Supreme Court held that the directive of June 15, 1993, which was endorsed to authorities on June 21, 1993, applied prospectively to cases where extension was completed after that date, not to cases already finalized. Since the final letter of allotment was issued on November 23, 1992, before the directive, the High Court's direction was erroneous. The appeal was allowed, and the respondent was directed to pay at the rate of Rs.192.45 per sq. yard as per the final letter of allotment, with time extended for payment with 10% interest for five months from the date of the order. If the respondent failed to pay within the specified time, the writ petition would stand dismissed without further reference. No costs were awarded.
Headnote
A) Contract Law - Provisional Allotment - Extension of Time and Price Determination - No specific statute; terms of Provisional Letter of Allotment Clause 5 - The first respondent was provisionally allotted an industrial plot at Rs.60.50 per sq. yard and sought extension to complete formalities, including obtaining finance; Clause 5 provided that if extension of time is sought, the rates prevalent at the time of issue of final letter of allotment shall be charged - The appellant granted extension subject to payment of extension fee which the respondent did not pay, and the final letter of allotment was issued at the increased rate of Rs.192.45 per sq. yard - Held that as per Clause 5, the respondent was bound to pay the increased rate prevailing at the final letter of allotment, not the provisional rate. B) Administrative Law - Government Policy Directive - Prospective Application - No specific statute; government directive dated June 15, 1993 - The respondent relied on a policy directive that cost of land communicated in LOI/PLA should remain unchanged during extended period; the Court found the directive was issued on June 15, 1993 and endorsed to authorities on June 21, 1993 - The final letter of allotment was issued on November 23, 1992, before the directive, and the direction applied only to cases where extension was completed after the directive date - Held that the High Court erred in applying the directive retrospectively to an already finalized allotment.
Issue of Consideration
Whether the High Court was right in directing the appellant to charge at provisional allotment rate Rs.60.50 per sq. yard despite the respondent's failure to comply with conditions and pay extension fee, when the final letter of allotment was issued at the increased rate of Rs.192.45 per sq. yard.
Final Decision
Appeal allowed. High Court order set aside. Respondent directed to pay at the rate of Rs.192.45 per sq. yard as per final letter of allotment. Time extended for payment with 10% interest for five months from date of order. If respondent fails to pay within specified time, writ petition would stand dismissed without further reference. No costs.
Law Points
- Under Clause 5 of Provisional Letter of Allotment
- if extension of time is sought for completion of formalities
- rates prevalent at time of issue of final letter of allotment shall be charged
- Government directive dated June 15
- 1993 applies prospectively to extensions completed after that date
- not to already finalized allotments.
