Case Note & Summary
The case concerned a dispute over the applicable land rates for a flat allotted by the Delhi Development Authority (DDA) under its Registration Scheme of New Pattern, 1979. The respondent, Pushpendra Kumar Jain, was a successful applicant in a draw of lots held on October 12, 1990 for allotment of flats. The draw was conducted for nearly three thousand flats. Between the draw date and the communication of the allotment letter, the DDA revised land rates by circular dated December 6, 1990, resulting in a substantial enhancement of about fifty to seventy per cent. The allotment-cum-demand letter was issued to the respondent on January 9/13, 1991, and he was required to pay the first installment calculated on the basis of the revised land rates. The respondent filed a writ petition in the Delhi High Court contending that only the land rates prevailing on the date of draw should apply, as he became entitled to the flat on that date and the delay in issuance of the allotment letter was due to the inefficiency of the DDA. The Division Bench of the High Court accepted this contention and directed the DDA to revise the demand and charge rates as on October 12, 1990. The High Court reasoned that since the draw was held on October 12, 1990 and the allotment letter was delayed without reason, the respondent became entitled on the draw date and could not be charged enhanced rates. The DDA appealed to the Supreme Court by special leave. The Supreme Court allowed the appeal and set aside the High Court order. The Court held that the High Court's two grounds were unsustainable. First, there was no material to record a finding that the three-month interval was due to inefficiency of the DDA. The draw was for nearly three thousand flats and the process of calculating costs and sending demand-cum-allotment letters took time; such delay was not inordinate or deliberate. The scheme did not prescribe a time limit for communication of allotment. Second, the Court held that mere draw of lots did not vest any legal right in the allottee to allotment at the price prevailing on the date of draw. Draw of lots is only a mode, method, or process to identify the allottee—it is a process of selection and not allotment by itself. The right to a flat arises only upon communication of the letter of allotment, and therefore the price prevailing on that date applies unless the scheme provides otherwise. Clause 14 of the scheme expressly stated that estimated prices were illustrative and subject to revision or modification depending upon exigencies of layout, cost of construction, etc. The Court noted that registration under the scheme had opened on September 1, 1979 and closed on September 30, 1979, with about 1,70,000 applicants, and flats were being constructed continuously; the price revision clause had to be understood in that context of rising costs. The Court also observed that no provision of law supported the proposition that draw of lots vested an indefeasible right at the price prevailing on the draw date. If the respondent was not willing to accept the allotment at the revised rate, he was free to decline it; the Court saw no unfairness in the procedure. The validity or justification of the revision of land rates by circular dated December 6, 1990 was not questioned, and the Court proceeded on the assumption that it was valid. Accordingly, the appeal was allowed and the judgment and order of the High Court was set aside.
Headnote
A) Land Laws - Allotment of Flats by Public Authority - Delhi Development Authority (Registration Scheme of New Pattern, 1979) - Draw of lots is not allotment but a mode of selection to identify allottee - It does not create a vested right to allotment at price prevailing on draw date - The right to flat arises only upon communication of letter of allotment - Held that the High Court erred in holding that the respondent became entitled to the flat on the date of draw of lots and that revised land rates could not be charged; no legal basis existed for such a right under the scheme or any law. B) Land Laws - Price Revision - Clause 14 of DDA Registration Scheme of New Pattern, 1979 - Estimated prices in brochure are illustrative and subject to revision/modification - The scheme expressly contemplated revision of prices depending on exigencies of layout and cost of construction - The court held that since the scheme permits revision and the allottee's right arises only on communication, the price prevailing on date of communication is applicable unless the scheme provides otherwise - Held that the allottee could decline the allotment if unwilling to accept the revised rate, and there was no unfairness in the procedure. C) Administrative Law - Delay in Issuing Allotment Letter - No prescribed time limit in scheme for communicating allotment after draw - Court held that a three-month interval between draw and dispatch of allotment letters for nearly three thousand flats was not inordinate or deliberate delay, and there was no material to attribute it to inefficiency of DDA - Held that the High Court's finding of inefficiency was unsustainable.
Issue of Consideration
Whether mere draw of lots creates a vested right to allotment at the price prevailing on the date of draw, and whether the allottee can be charged revised land rates applicable on the date of communication of the allotment letter.
Final Decision
Appeal allowed; judgment and order of the Delhi High Court set aside; DDA entitled to charge revised land rates prevailing on the date of communication of the allotment letter; draw of lots does not constitute allotment; respondent free to decline allotment if unwilling to accept revised rates; validity of land rate revision circular not questioned and assumed valid.
Law Points
- Draw of lots is only a mode of selection and not allotment
- no vested right to allotment at price prevailing on draw date
- right to flat arises only on communication of letter of allotment
- price prevailing on date of communication applies unless scheme provides otherwise
- Clause 14 of DDA Registration Scheme of New Pattern
- 1979 permits revision of estimated prices
