HUDA’s Additional Price Demand on Plot Allottees Declared Illegal: Supreme Court Imposes Costs
The case of Haryana Urban Development Authority (HUDA) vs. Jagdeep Singh revolves around the demand for an additional price by HUDA from a plot allottee after a price revision. The Supreme Court ruled against HUDA, holding that the demand for additional charges was illegal since it was not based on land acquisition cost enhancement as required by the allotment letter.
The Court not only dismissed HUDA’s appeal but also imposed costs on the authority for filing a frivolous appeal, emphasizing the need to curb litigation that wastes judicial resources.
Background of the Case
The dispute originated when Jagdeep Singh, the respondent, was allotted Plot No. 1084 in Sector-14 (Part), Hisar, through an allotment letter dated August 21, 1986. The price was fixed at Rs. 224.90 per square yard.
However, on January 15, 1993, HUDA issued a notice raising a demand for additional charges, citing an increase in land cost. The authority threatened to resume the plot if the demand was not met. Several subsequent notices followed, with the final one being issued on January 28, 2002.
Jagdeep Singh filed a civil suit on October 1, 2003, challenging HUDA’s demand. The trial court ruled in his favor, holding that:
- The allotment letter only allowed additional price recovery in case of a land acquisition cost enhancement by a competent authority.
- In this case, there was no such enhancement under the Land Acquisition Act.
The decision was upheld by the First Appellate Court and later by the Punjab and Haryana High Court. HUDA, dissatisfied with these rulings, appealed to the Supreme Court.
Petitioner’s Arguments
HUDA, represented by its counsel, contended:
- The land was initially transferred from the Animal Husbandry Department of Haryana to HUDA at Rs. 1,21,000 per acre.
- Later, the cost was revised to Rs. 3,00,000 per acre, necessitating additional price recovery from allottees.
- The additional price was Rs. 76.80 per square yard, raising the final plot price to Rs. 301.70 per square yard.
- The demand was justified because the increased land cost had to be passed on to the allottees.
- Allottees were given the option to surrender their plots and receive a refund with 10% interest.
Respondent’s Arguments
Jagdeep Singh’s counsel argued:
- The allotment letter explicitly stated that additional charges could only be levied in case of an increase in land acquisition cost under the Land Acquisition Act.
- The land in question was not acquired but was transferred between government departments, making HUDA’s demand invalid.
- HUDA’s attempt to recover additional charges violated the terms of the allotment agreement.
Supreme Court’s Observations
The Supreme Court examined the relevant facts and contractual clauses, making the following key observations:
- HUDA’s own allotment letter clearly stated that additional price recovery was linked to cost enhancement by a competent authority under the Land Acquisition Act.
- Since no such enhancement occurred, HUDA had no legal basis to demand additional charges.
- The land was transferred from one government department to another, not acquired through compulsory acquisition.
- The same issue was previously decided in Sanjay Gera vs. HUDA (2005), where HUDA’s additional price demand was struck down.
- Despite knowing the outcome of the Sanjay Gera case, HUDA continued litigating similar matters, wasting judicial resources.
Key Judgment Excerpt
The Supreme Court held:
“Clause 9 of the allotment letter clearly states that additional price can be demanded only in case of enhancement in land cost awarded by a competent authority under the Land Acquisition Act. Since no such enhancement took place, HUDA’s demand for additional price is illegal.”
The Court further criticized HUDA’s litigation tactics:
“For filing the present frivolous appeal, in our opinion, the appellants deserve to be burdened with heavy costs. This Court has deprecated the conduct of litigants in flooding courts with frivolous litigations, which are choking the dockets as a result of which matters requiring consideration are delayed.”
Final Verdict
The Supreme Court dismissed HUDA’s appeal and imposed costs:
- HUDA was directed to pay Rs. 1,00,000 to the Supreme Court Mediation Centre.
- Jagdeep Singh was awarded Rs. 50,000 as litigation costs.
- The costs were to be recovered from the officers responsible for pursuing the appeal despite an earlier Supreme Court ruling on the same issue.
- The Court directed HUDA to file a compliance affidavit confirming the recovery of costs from the responsible officers.
This ruling reinforces the principle that government authorities must abide by their contractual obligations and cannot arbitrarily impose additional costs on allottees without a legal basis. It also serves as a warning against unnecessary litigation that burdens the judicial system.
Petitioner Name: Haryana Urban Development Authority.Respondent Name: Jagdeep Singh.Judgment By: Justice Abhay S. Oka, Justice Rajesh Bindal.Place Of Incident: Hisar, Haryana.Judgment Date: 08-05-2023.
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