Bangalore Land Allotment Dispute: Supreme Court Upholds BDA's Authority on Pricing

The case of Bangalore Development Authority vs. R. Jayakumar & Ors. revolves around the contentious issue of site allotment under the Bangalore Development Authority (BDA). The dispute centered on whether applicants who opted for allotment under a later notification could demand pricing based on an earlier one.

The Supreme Court ruled in favor of the BDA, reinforcing the principle that site pricing can be altered by the authority and must be accepted by allottees.

Background of the Case

The Bangalore Development Authority (BDA) had issued a notification dated March 10, 1988, inviting applications for site allotment. However, due to logistical constraints, the allotment process faced delays. Later, another notification was issued on October 15, 1988, offering applicants an option to be governed by its terms.

Most applicants, including the respondents, opted for the October 15, 1988, notification, which mentioned only proposed sites and provided that the BDA could allot sites in any of its future layouts.

However, when the BDA allotted sites in 1997-98 at revised rates, the respondents objected, arguing that they should be charged the rates applicable under the March 10, 1988 notification.

The respondents challenged this in the Karnataka High Court, which ruled in their favor based on a precedent set in E.R. Manjaiah & Ors. vs. Bangalore Development Authority. The BDA then appealed to the Supreme Court.

Arguments of the Petitioner (Bangalore Development Authority)

The BDA, represented by legal counsel, argued:

The respondents had voluntarily opted to be governed by the terms of the October 15, 1988 notification.
The sites offered under that notification were ‘proposed’ and subject to change.
Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, allows for changes in site value, and allottees must accept the revised price.
The decision in E.R. Manjaiah was not applicable, as it pertained to a different notification.

Arguments of the Respondents (Applicants)

The respondents contended:

They had applied for sites under the original March 10, 1988 notification and should be charged the rates applicable then.
The BDA’s decision to charge revised rates was arbitrary and discriminatory.
The High Court had rightly relied on E.R. Manjaiah, where the BDA was not allowed to unilaterally increase prices.

Supreme Court’s Observations

The Supreme Court, comprising Justices Sanjiv Khanna and Bela M. Trivedi, analyzed the case and concluded:

The respondents had voluntarily opted for the October 15, 1988 notification, which allowed the BDA flexibility in site allotment.
The sites under that notification were only ‘proposed’ and not fixed.
Rule 12 of the BDA Allotment Rules empowers the authority to alter site pricing.
The case of E.R. Manjaiah was distinguishable, as it involved applicants under a different notification with more rigid allotment terms.

Supreme Court’s Verdict

On March 9, 2022, the Supreme Court ruled:

The High Court erred in applying E.R. Manjaiah as a precedent.
The BDA had the legal authority to revise site prices under Rule 12.
The respondents were bound by the terms of the October 15, 1988 notification.
The High Court’s order was quashed, and the BDA’s pricing policy was upheld.

The Court concluded:

“All allottees under the 15.10.1988 Notification have been treated alike and similar price is payable. No allottee has been discriminated.”

Conclusion

This judgment reinforces the authority of public bodies to revise pricing in line with evolving circumstances. It establishes:

Government discretion in pricing: Public authorities can revise land rates as long as it is done transparently.
Binding nature of contract terms: Applicants who opt for specific terms cannot later demand benefits from a previous notification.
Judicial clarity in land allotment cases: Courts should differentiate between cases based on distinct notifications.

The Supreme Court’s decision ensures that government agencies retain the flexibility needed to manage urban land development effectively.

Petitioner Name: Bangalore Development Authority.
Respondent Name: R. Jayakumar & Ors..
Judgment By: Justice Sanjiv Khanna, Justice Bela M. Trivedi.
Place Of Incident: Bangalore, Karnataka.
Judgment Date: 09-03-2022.

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