REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4211 OF 2004

Ishwar Dass Nassa and others … Appellants

versus

State of Haryana and others … Respondents

With

CIVIL APPEAL NO. 4209 OF 2004

Pyare Lal and others … Appellants

versus

State of Haryana and others … Respondents

J U D G M E N T

G. S. Singhvi, J.

1. Whether  the  Haryana  Housing  Board  (for  short,  `the  Board’)  could  

ignore the time limit of 7 years specified in clause 2(w) of the Hire Purchase  

Tenancy  Agreement  executed  by  the  appellants  as  per  the  requirement  of  

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Regulation 11(4) of the Housing Board Haryana (Allotment, Management and  

Sale of Tenements) Regulations, 1972 (for short, ‘the Regulations’) framed by  

the Board in exercise of the power conferred upon it under Section 74 of the  

Haryana Housing Board Act, 1971 (for short, `the Act’)  and demand additional  

price from them after 10 years of the allotment of tenements is the question  

which arises for consideration in these appeals filed against the orders passed  

by the  Division Bench of  the  Punjab and Haryana High Court  whereby the  

letters  patent  appeals  filed  by  the  appellants  were  dismissed  and  the  order  

passed  by  the  learned  Single  Judge  declining  their  prayer  for  quashing  the  

demand of additional price was upheld.  

2. In  response  to  an  advertisement  issued  by  the  Board  in  1975,  the  

appellants  applied for  the houses  proposed to be constructed at  Sonepat  for  

Economically  Weaker  Sections  (EWS),  Lower  Income  Group  (LIG)  and  

Middle Income Group (MIG).  After scrutiny of the applications, the competent  

authority  allotted  tenements  of  different  categories  to  the  appellants.  The  

allotment letters were issued in their favour in November/December 1978.  For  

the  sake  of  reference,  the  allotment  letter  issued  in  favour  of  one  of  the  

appellants, namely, Dharam Pal is reproduced below:

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“HOUSING BOARD HARYANA

HOUSING BOARD COLONY  SONEPAT

       DATED 9.12.78 REGD.

No.830

Sh.Dharam Pal c/o Mangat Ram Redy,  Model Town ,  Smalkha (Karnal)

Reference: Your application for registration No.64/EWS

2. EWS/LIG|MIG Tenement No.285 Area 49.94 S.Yds.  The  Housing  Colony  at  Sonepat  is  allottes  to  you  on  hire-purchase  basis on a tentative price noted below:

i) Price of House (Normal area) Rs.8000/- (Tentative) ii) Cost of additional land, if any       ----- iii) Additional charges for preferential   

(corner) plot ________ TOTAL        Rs.8000/-

3. The  detail  of  the  amount  deposited  by  you  as  per  your  application etc., is given below:

a) Registration deposit  Rs.  500/- b) Amount deposited for preferential  

allotment    ---- c) Amount deposit for preferential

(corner)house.    ---- d) ----

4. You are requested to deposit the following amounts and take  possession of the house within 30 days of the issue this letter:-

i) Cost of additional land    ---- ii) Additional  charges for(corner)  

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preferential plot    ---- iii) Initial  instalments/Ist yearly instalment  Rs. 700/- iv) Cost of H.P.T.A.form  Rs.     2.25

Total  Rs.702.25/-

5. The balance price of the house is payable in monthly/yearly  instalments of Rs. 481/- each over a period of 18 years.

Sd/- Estate Manager

Housing Board Haryana Sonepat

CONDITIONS

1. The  allottee  shall  be  bound  by  the  Haryana  Housing  Board Act, Rules and Regulations thereunder.  

2. If the allottee fails to execute the agreement and to take  possession of the house within 30 days of the issue of this letter  his name shall be removed from the allotment register and any  amount upto 50% of the earnest money deposited by him shall  be forfeited.   

3. Possession of the tenement will be given after the Hire  -Purchase Tenancy Agreement is duly executed as prescribed  under the rules and the allottee has paid the initial deposit, first  instalment and such other dues as shall have been demanded by  the Board.

4. xxxx xxxx xxxx

5. xxxx xxxx xxxx

6. xxxx xxxx xxxx

7. xxxx xxxx xxxx

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8. The conveyance  deed will  be executed  after  the  entire  amount  due  is  paid  by  the  allottee.   All  expenses  for  the  registration etc. shall be borne by the allottee.”

3. The appellants deposited the amount in accordance with the stipulations  

contained  in  the  allotment  letters  and  executed  Hire  Purchase  Tenancy  

Agreements.  The relevant portions of the Hire Purchase Tenancy Agreement  

executed by the Board and Dharam Pal are extracted below:

“HIRE PURCHASE TENANCY AGREEMENT

This  INDENTURE MADE THIS 7th day of  December  One  thousand  nine  hundred  and  seventy  eight  (7.12.78)  BETWEEN HOUSING BOARD HARYANA constituted under  the Haryana Board Act 1971 (Act. No. 20 of 1971) (Hereinafter  called the owner and includes its successors and assigns) of the  one  part  and  Shri  Dharam  Pal  (Hereinafter  called  the  hirer  which expression shall, unless inconsistent with the context of  meaning,  includes,  as  hereinafter  provide,  the  nominees  approved and failing which is heir,  executors,  administrators,  legal representatives and permitted assigns) of the other part.

WHEREAS in pursuance of the Housing Board Haryana  Act Rule & Regulation (hereinafter called the regulations) the  hirer  has  apparently  applied to  the  owner  for  allotment  of  a  house  under  the  Hire-Purchase  Scheme  and  the  owner  has  agreed to allot a house to hirer upon the terms and conditions  hereinafter set forth.”

xx xx xx xx xx xx xx xx xx xx

“2(w) If  after  the  receipt  of  the  final  bills  for  the  construction  of  tenements  or  as  the  result  of  land  award  or  arbitration proceeding or  enhancement in cost of land on any  account,  the Board considers it  necessary to revise the price,  already specified, it  may do so and determine the final price  

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payable by the hirer who shall be bound by this determination  and shall pay dues, if any, between final price so determined  and price paid by him including the price paid in lump sum,  provided that no change in the price shall be made after 7 years  from the date of allotment.”

4. After about 10 years, the Estate Manager, Sonepat issued notices to the  

appellants  and directed them to pay additional price in lieu of the enhanced  

compensation allegedly paid by Improvement Trust, Sonepat for the land which  

was sold to the Board.  The appellants challenged the notices by filing writ  

petitions under Article 226 of the Constitution.  They pleaded that in view of  

clause  2(w)  of  the  Hire  Purchase  Tenancy  Agreement,  the  Board  cannot  

demand  additional  price  after  7  years  of  the  allotment  of  tenements.   The  

appellants further pleaded that most of them had already paid the installments  

of price specified in the allotment letters and many of them had also obtained  

no dues certificates.  They relied upon Resolution dated 10.05.1989 passed by  

the  Board  not  to  recover  the  additional  cost  of  land  from the  allottees  and  

prayed that in view of the decision taken by the Board, the demand notices  

should be quashed.  In the written statement filed on behalf of the respondents it  

was not denied that the Board had decided not to charge additional price from  

the allottees but it was averred that they were under a moral obligation to share  

the burden of additional cost paid to the Improvement Trust.   

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5. The  learned  Single  Judge  rejected  the  appellants’  challenge  to  the  

demand of additional price by making the following observations:

“Where  judgments  are  passed  by  the  Court  of  Competent  jurisdiction increasing the amount of compensation awarded to  the land owners, whose land was acquired for development of  these projects at a much subsequent stage, cannot be hit by this  clause  as  the  increase  in  the  basic  cost  of  the  land  is  a  compulsion  imposed  upon  the  acquiring  as  well  as  on  the  authority for the benefit of which the same was acquired.  The  judgments of the Court are obviously not controlled either by  the acquiring body or by the Board.  If the cost of acquisition is  increased  by  the  Court  of  Competent  jurisdiction,  it  will  be  unfortunate that the general public is called upon to pay such  increased  costs,  while  the  land  for  the  flats/plots  has  been  acquired  for  the  benefit,  utilization  and  enjoyment  by  the  petitioners exclusively.  Such an interpretation in fact would be  opposed to public policy. Every contract or instrument should  be  construed  harmoniously  so  as  to  fall  in  line  with  the  principles  of  public  policy  rather  than  be  opposed  to  it.   A  Bench of  this court in the case of Subhash Chander Arora and  others versus Housing Board, Haryana, Chandigarh through its  Chief Administrator and others - 1991-2 P.L.R. 698, relating to  the same clause held as under:-

"As far as the first point is concerned I find no merit in  the same.  No doubt, the tentative price had been made  final  but  the  increase  in  the  price  was  due  to  the  enhancement in the compensation of the land which was  done by a Court of Law.  It was not at the instance of the  Board that  the  prices were being increased.   Since the  Board  had  to  pay  more  compensation,  naturally  the  burden will fall on all the allottees of the land of which  the  compensation  has  been  enhanced.  Accordingly  the  Board was right in demanding enhanced price.  However  question  arises  as  whether  the  burden  of  enhanced  compensation  should  be  borne  only  by  allottees  of  residential  area  or  by  all  persons  including  who  have  commercial property, like Cinema, shops etc."

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Even  otherwise,  the  language  of  the  Letter  of  Allotment  or  clause 2(w) does not suggest the interpretation as put forward  by  the  petitioners.   Every  contract  or  document  of  this  kind  must be read in its entirety and construed to give it a meaning  permissible  in  Law.   The  power  of  the  Board  is  whether  it  intends to revise the price payable by an allottee, allottee should  be bound by such determination. Obviously, this clause would  operate where there is increase in the price by the act or deed of  the Board in relation to construction or any other factor. But if  there  is  increase  in  the  price  for  circumstances  beyond  the  control of the Board and in furtherance to the Judgment of a  Court of Law, there appears to be least scope for the Board to  apply its mind.  Application of mind is a well accepted canon of  administrative law, but it must have some basis or field to be  operated upon.  The judgments of the Court are binding on the  parties and the concerned Govt. or authority is obliged to pay  the compensation awarded to the land owners for acquisition of  their respective lands except where such Judgments is set aside  by  the  highest  Court  of  Competent  jurisdiction  which  admittedly  is not the case here.  The judgments of the Courts  have  attained  finality  and  have  directed  the  Government  of  Haryana and HUDA to pay enhanced compensation to the land- owners-claimants.  

As a result of this compulsive directive of the Court over which  the State of Haryana, the HUDA or the Board had no discretion  to exercise, HUDA had issued the Letters for recovery of the  enhanced amount from the Board to whom the land was given  with the condition of recovery of enhanced amount.  All that  the  Estate  Officer  has  done  is  to  raise  the  letter  of  demand,  forward  the  demand  of  HUDA  with  added  interest  for  the  interregnum  period  of  HUDA's  letter  and  recovery,  more  particularly in the background that it had already paid amounts  to HUDA.  The argument of the petitioners has an inherent and  inbuilt  fallacy.   If  such  interpretation,  as  suggested  by  the  petitioners is accepted, it will be opposed to public policy. In  other words, the lands which are to be enjoyed and are being  enjoyed by the petitioners, higher compensation would have to  be paid by the State from the money of the ordinary income tax  

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payer,  who  is  neither  the  beneficiary  nor  even  remotely  connected with such land.  Such welfare schemes of the State  are founded on the principles of fairness and to meet the general  requirements of the Society at large.  Such schemes cannot act  detrimental to the very basis of State Welfare policies.”

6. The Division Bench of the High Court summarily dismissed the letters  

patent appeals filed against the orders of the learned Single Judge and thereby  

approved the demand of additional price.

7. Shri Harish Chander, learned senior counsel appearing for the appellants  

argued  that  in  view of  the  express  bar  contained  in  para  2(w)  of  the  Hire  

Purchase  Tenancy  Agreement  against  change in  the  price  after  7  years,  the  

Board did not have the jurisdiction to demand additional price simply because it  

was  required  to  pay  additional  cost  for  the  land  purchased  from  the  

Improvement  Trust.   He submitted  that  the  reasons  assigned by the  learned  

Single Judge for upholding the demand of additional price are legally untenable  

and the Division Bench committed serious error by summarily dismissing the  

letters patent appeals.  

8. Shri T.V. George, learned counsel for the Board argued that the terms  

and conditions incorporated in the Hire Purchase Tenancy Agreement are not  

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applicable to the cases in which the Board is required to pay additional cost for  

the land on which the tenements are constructed.  He submitted that if the State  

Government  or  the  Board  is  required  to  pay  higher  compensation  to  the  

landowners in compliance of the direction given by the competent Court or an  

award of the Arbitrator,  the burden thereof is  bound to be passed on to the  

allottees  of  plots/houses/tenements.   Learned  counsel  emphasized  that  the  

demand  notices  were  issued  to  the  appellants  because  Improvement  Trust,  

Sonepat had asked the Board to pay additional cost for the land in lieu of the  

enhanced compensation  payable  to  the  landowners.   He submitted  that  time  

bound adjudication of the landowners’ claim for higher compensation is  not  

within the control of the State Government or the Board and the fact that the  

appeals filed by the landowners are decided after considerable time cannot be a  

ground  to  relieve  the  allottees  of  their  obligation  to  share  the  burden  of  

additional cost.

9. We  have  considered  the  respective  submissions.   For  deciding  the  

question  arising  in  these  appeals,  it  will  be  useful  to  notice  the  extracts  of  

agenda item Nos.109-113 of the Board’s meeting held on 10.5.1989,  resolution  

passed in that meeting and Clauses 10(1) and (2) and 11(1), (3) and (4).  The  

same are reproduced below:

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  AGENDA ITEM AND RESOLUTION OF THE BOARD  

“To consider and accord ex-post-facto sanction to the payment  of  enhanced  land  compensation  for  the  land  purchased  by  Board  at  Sonepat  Phase  I  &  II  from  Improvement  Trust,  Sonepat.

The Board purchased the land from I.T.S. during 1972-75 @  Rs.3/-  per sq.  yard.  As per agreement executed with ITS in  respect of land allotted for Phase I, the land enhancement was  payable by Board as and when demand raised by Improvement  Trust.  The land of Phase-II was allotted on the same terms of  Phase-I, its agreement could not be executed reasons for which  are not available in the record.  As per the advise obtained from  the Advocate, the term applicable in agreement of Phase-I was  so  applicable  in  case  of  Phase-II  in  respect  of  execution  of  agreement of Phase-II.

Improvement  Trust,  Sonepat  vide  its  letter  No.279,  dated  24.3.86 informed that the land owner filed a writ in the court  for land enhancement and as per judgment of A.D.J. Sonepat  dated 3.10.85 the land sale has been enhanced from Rs.3/- per  sq.  yard  to  Rs.22/-  (Rs.25/-  per  sq.  yard)  in  respect  of  the  adjoining 100 wide road in the scheme.   

As per H.P.T.A. executed with allottees of Phase-I the cost of  houses  once  fixed  cannot  be  enhanced  to  disadvantage  of  allottees,  similarly as per H.P.T.A. executed with allottees of  Phase-II to whom houses were allotted in 1978-79 the enhanced  out of the house cannot be recovered from the allottees after  expiry of 7 years from the date of allotment.  Hence State Govt.  was requested vide Housing Board Officer letter No.1100 dated  15.1.87 to pay the amount from State Govt.  fund as Board was  not  in a position to pay such huge amount.   However,  State  Govt. decided vide letter No.6/1/87-IHG dated 4.2.87 that the  Board  should  meet  with  this  expenditure  from  its  overall  budget.

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Board is further requested to approve the raising the demand  from allottees of Sonepat Phase I & II at the tentative recovery  rate of Rs.229/-  per sq. yard.

The following resolution passed by the Board on dated  11.5.89.

1) The  consider  &  accord  ex-post-facto  sanction  to  the  payment of enhance land compensation for the purchase  of land phase I & II from Improvement Trust, Sonepat.

2) The  Board  accorded  ex-post-facto  sanction  for  the    payment  of  Rs.53,98,091-00  the  Improvement  Trust,  Sonepat  and  State  Govt.  may  be  approached  for  reimbursing this amount as demand from allottees cannot  be raised at this stage.”

 (emphasis supplied)   

THE REGULATIONS

10. Allotment letter,  conditions of allotment etc.- (1) After  the allotment of tenements is finalized the Estate Manager shall  issue  an  allotment  letter  informing  the  allottee  that  it  is  proposed  to  allot  to  him  the  tenement  on  the  terms  and  conditions specified in the letter, and asking him to call at the  concerned office of the Board and take delivery of the authority  letter  and to take over possession of the tenement within the  period specified in the letter.

(2) On receipt of an allotment letter, the allottee may, within  the  period  specified  in  the  letter,  accept  the  allotment  of  a  tenement and shall execute a hire purchase tenancy agreement  if required by the Board and shall comply with the terms and  conditions of such agreement.

11.  General  liability  of  allottees.--(1)  Every  allottee  shall  regularly  pay  to  the  Board  the  instalments  due  from him in  respect of the purchase price of the tenement allotted to him. He  shall  also pay municipal  taxes,  water  and electricity  charges,  ground  rent,  his  share  of  common  services  (e.g.,  common  

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lights,  sweeper,  watchman  and  the  like)  and  other  public  charges, due in respect of the land and the building occupied by  him to the authorities to whom such taxes and charges are due.

(3) The hirer shall make full and regular payment of all the dues  that  are  required  to  be  made  by  him  in  pursuance  of  these  presents or the Regulation. If any such payment is delayed, he  shall be liable to pay a penalty at the rate of one per cent per  month.   In  case  of  defaults  of  more  than  two  months,  the  tenancy shall stand determined and the hirer shall be liable to be  evicted.  All  the  outstanding  dues  of  the  owner  shall  be  recoverable  as  arrears  of  land  revenue.  The  proceedings  of  eviction shall be governed by the provisions of Chapter VI of  the Act.

Provided further that in the case of eviction, the amount already  deposited by the hirer shall be utilised for recovering all dues  whatsoever of the owner as the first charge and all the dues of  the public bodies as the second charge and only the remainder  shall be refunded to the hirer on his demand.

(4) On payment of the first instalment and such other dues as  shall have been demanded by the Board, the hirer shall execute  a hire-purchase agreement in the form “A”.

10. A conjoint reading of the allotment letter and clause 2 (w) of the Hire  

Purchase  Tenancy  Agreement,  which  every  allottee  is  required  to  execute  

makes it clear that the price of the tenement specified in the allotment letter is  

tentative  and  the  Board  can  revise  the  price  after  receiving  final  bills  

representing the cost of construction or if as a result of an order of the Court or  

an award made by the Arbitrator it is required to pay higher cost for the land  

used for construction of the tenements. In either case, the allottee is bound to  

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pay  the  additional  amount  which  would  represent  the  final  price  of  the  

tenement. If the cost of land is enhanced for any other similar reason then too  

the Board can revise the price and ask the allottees to pay additional price. In a  

given case, the Board may revise the tentative price more than once and the  

allottees are bound to share the burden of additional cost. However, in these  

cases, the Board’s power to revise the price of the tenements is hedged with the  

limitation of 7 years contained in clause 2(w) of the Hire Purchase Tenancy  

Agreement.   That clause contained an express bar against the change in price  

after 7 years of the allotment of tenement.   To put it differently, in view of the  

bar  contained in  clause  2(w) of  the  Hire  Purchase  Tenancy Agreement,  the  

Board could not  revise the price after  7 years of the allotment of tenement,  

irrespective of the justification for such revision.  The Board’s understanding of  

the  prohibition  contained  in  clause  2  (w)  of  the  Hire  Purchase  Tenancy  

Agreement is evinced from Resolution dated 10.5.1989 wherein it was clearly  

mentioned that enhanced cost is not to be recovered from the allottees after 7  

years  from the  date  of  allotment.   This  is  also  the  reason  why  the  Board  

accorded ex post facto sanction for payment of Rs.53,98,091/- to Improvement  

Trust, Sonepat.  

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11. While preparing the format of Hire Purchase Tenancy Agreement,  the  

Board must have taken into consideration various factors which could lead to an  

increase in the cost  of tenements and consciously incorporated a prohibition  

against  change  in  the  price  after  7  years  from  the  date  of  allotment  of  

tenements.  The rationale of this embargo was that once the allottee pays the  

total  price,  he may not be subjected to the burden of additional cost after a  

number  of  years.   Surely,  adjudication  of  the  landowners’  claim for  higher  

compensation is not within the domain of the Board or the allottees but once the  

Board has, after due deliberations, incorporated a prohibition against change in  

the price after a period of 7 years from the allotment of tenements, there is no  

reason  why  it  should  not  be  asked  to  honour  the  commitment  made  to  the  

allottees that they will not live under the fear of being asked to pay additional  

price after an indefinite period.  Unfortunately, the learned Single Judge and the  

Division Bench of the High Court did not give due weightage to the prohibition  

contained  in  Clause  2(w)  of  the  Hire  Purchase  Tenancy  Agreement  and  

negatived  the  appellants’  challenge  to  the  demand  of  additional  price  by  

assuming that the Board is vested with the power to revise the price at any time.  

The use of the expression ‘or enhancement in cost of land on any account’ after  

the expression ‘the receipt of the final bill for the construction of tenements or  

as the result of land award or arbitration proceeding’ shows that while framing  

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the regulations, the Board had kept in view all the eventualities which could  

lead to an increase in the cost of land made available for construction of the  

tenements and yet it thought proper to put an embargo against the revision of  

price after 7 years. Therefore, the learned Single Judge and the Division Bench  

of the High Court were not right in deciding the writ  petitions and the writ  

appeals on the premise that once the cost of land gets increased on account of  

payment  of  higher  compensation  to  the  landowners  the  Board  is  entitled  to  

demand additional price from the allottees.  

12. In the result, the appeals are allowed.  The impugned order as also the  

one passed by the learned Single Judge are set aside and the demand notices  

issued by Estate Manager, Sonepat requiring the appellants to pay the additional  

price are quashed.  The parties are left to bear their own costs.  

   …………...………………...........................J.     [G.S. SINGHVI]

NEW DELHI;     …………...………………...........................J. DECEMBER 12, 2011.   [SUDHANSU JYOTI MUKHOPADHAYA]

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