ivil Appeal Nos
2809 2812A of 1986
From the Judgment and Order dated 621986 of the Alla habad High Court in Civil Misc
WP Nos 2274 2983 3860 4558 and 3202 of 1984
Rajinder Sachher and Bharat Sanghal for the Appellants
Harbans Lal Dr Meera Agarwal RC Misra and Arun Madan for the Respondents
The Judgment of the Court was delivered by section RATNAVEL PANDIAN J
These five appeals by Special Leave under Article 136 of the Constitution of India are preferred against the Judgment and Or let dated 6286 passed by the Allahabad High Court in Civil Misc
Writ Petition No 227484 connected with Civil Misc
Writ Peti tion Nos
298384 386084 455884  320284 directing the respondents appellants herein to re determine the cost of the appellants  respondents herein flats and instalments payable by them after hearing their grievances
Since identical contentions are urged in all the ap peals we are rendering a common judgment
As it is said that Civil Appeal No 280986 arising out of Civil Misc
Writ Petition No 227484 is more comprehen sive and the facts alleged therein may be taken as represen tative in character the facts relating to this appeal are briefly stated
The Bareilly Development Authority hereinafter re ferred
as BDA  the first appellant was constituted under Section 4 of the UP Urban Planning and Development Act 1973 by the State Government 747 for the purposes of development in the District of Bareilly With a view to casing the acute housing problem in the said District the BDA has undertaken construction of dwelling units for people belonging to different income groups styled as Lower Income Group  Middle Income Group  High Income Group  and the Economically Weaker Sections  hereinafter referred as LIG MIG HIG and EWS respectively
The BDA issued  an advertisement offering to register names of intending applicants desirous of purchas ing dwelling housesflats in any one of the different income groups intended to be constructed by the BDA
In this appeal ie Civil Appeal No 280986 the respondents 1 to 17 and 20 got themselves registered for allotment of flats in MIG scheme and respondents 18 and 19 in HIG scheme with the BDA in accordance with the terms and conditions contained in the brochure issued by the Authority
The following table of the brochure shows the necessary details inclusive of the esti mated cost for the different types of flats under various categories Type of Range of Cost Initial Interest Approx House Income payment monthly instalment MIG Rs 1000 to Rs64000 Rs5000 12 Rs551 pm for Rs 1500 pm 15 yrs
HIG Rs 1500 and Rs 1 15000 Rs7000 12 Rs 1440 above pm pm for 10 yrs
LIG Rs351 to Rs35000 Rs2000 11 Rs345 pm for Rs 1000 pm 15 yrs
EWS Rs350 pm Rs 11000 Rs 100 7 Rs89 pm for 20 yrs
The note under the General Information Table  given in the said brochure states that the cost shown therein is only estimated cost and it would increase or decrease according to the rise or fail in the price at the time of completion of the housesflats
All the respondents registeredtheir names  for MIG HIG and 748 EWS flats as the case may be and made the initial deposit
Thereafter the respondents in MIG group received indentical notices dated 1920184 from the Secretary Bareilly Devel opment Authority second appellant intimating that the revised cost of housesflats of MIG group as well as the amount of monthly instalment would be as follows 1
No of houses available 77 2
Cost of the house Rs 127000 3
Down payment to be made Rs35000 paid on allotment 4
No of monthly instalment 180 fixed for the payment of remaining amount 5
Rate of yearly interest 135 6
Amount of monthly instalment Rs 103150 with interest
By the said notice the respondents in MIG group were informed that 40 of the housesflats mentioned in the notice would be given to the allottees who would deposit the entire cost in one cash payment and that the other allottees who intend to buy housesflats on the above revised priceinstalments must send by 28184 their written accept ance on the annexed proforma to the Registration Section of the office of the BDA otherwise their claims would not be included in the lots to be drawn on 3111984
Except the respondents Nos 13 17 18 and 20 all other respondents in reply to those notices gave their unequivocal and uncondi tional written consent
Hence their names were included in the draw and on being lucky in the draw the respondents barring the above 4 were allotted their respective houses
After allotment they were asked to complete the other formalities and make down payments in accordance with the notice
dated 192011984 by a further notice dated 321984 Annexure F 
Similar notices were issued to all the registered allottees for all types of houses and the respondents were also intimated that in case any of the registered persons does not want to purchase the house his name would not be included in the draw but he would have his choice later on
749 At this stage all the respondents in these appeals approached the High Court under Article 226 of the Constitu tion of India challenging the revised terms and conditions of the BDA on the ground that the petitioners were estopped from changing the conditions subject to which the respond ents applicants had applied for registration and deposited the initial payment in the year 1980 that the enhancement of cost of the houseflat amounting almost double of the estimated cost as shown in the brochure while inviting the applications and the increase of the monthly instalments are much beyond the means of the respondents and that this arbitrary and unilateral stand of the petitioners is to the prejudice of the respondents
On the above contentions the respondents prayed in their respective petitions for issue of writ of mandamus directing the petitioners to maintain the allotment of the flats in their favour on the original terms and conditions to hand over the possession of the same and further to restrain the petitioners from cancelling the original allotment
The above plea was resisted by the petitioners strongly relying on certain conditions contained in the brochure especially of clauses 12 and 13 as per which the BDA has reserved its discretion to change alter or modify any of the terms andor conditions of the allotment given in the brochure that its decision would be final with regard to any matter concerning the registration and allot ment and that the BDA has right to relax any condition in its discretion
It has been further contended that respond ents barring 13 17 18 and 20 have given their written acceptance to the changed conditions as mentioned in the notice dated 192011984 and as such they are not entitled to the reliefs claimed in the writ petition
According to the petitioners the increase in the cost and the interest demanded from the respondents is neither arbitrary nor unreasonable and the High Court is not the proper forum for examining in detail the terms regarding payment of instal ments in the circumstances of the present case and if the respondents were not agreeable to the changed terms and conditions they could as well resile from their consent
Finally it was contended that the respondents are estopped from challenging the varied terms and conditions of the allotment after having consented
The High Court though repelled the contention of the respondents allottees based on the principle of promissory estoppel made the following observations with regard to the case of the respondents in the MIG category In the circumstances of the present case the fixation of monthly instalment to the tune of Rs103150 from the 750 petitioners of MIG group whose income is hardly Rs 1500 per month appears to us smack ing of arbitrariness and unreasonableness on the part of the contesting opposite party petitioners herein In the circumstances of the present case we are not satisfied that the contesting opposite party has succeeded in establishing its demand of double the estimated cost by facts and figures
The end of justice demands that the authority should refix the cost of the peti tioner s flats after hearing their grievance
 The High Court answered the objections taken by the petitioners herein that the respondents have consented for the changed terms and conditions observing We think that the consent obtained from the petitioners was also not reasonable act on the part of the contesting opposite par ties appellants herein
Finally the High Court adopting the above reasoning in respect of the cases of other re spondents also falling under various categories directed the appellants herein in all the writ petitions to re determine the cost of the petitioners  respondents herein flats and instalments payable by them after heating their grievances Being aggrieved by the impugned judgment the appellants have filed these appeals by special leave
Shri Rajinder Sachher St Adv
after taking us through the relevant documents and the additional affidavit filed by the second respondent and the reply affidavit assailed the reasonings given by the High Court contending that the said Court has erroneously held that the BDA has failed to justi fy the demand of the enhancement in the cost of housesflats as well as the increase of the monthly instalments in dis proportionate to their income because the income of the applicant was relevant only to determine the category of the scheme in which the applicant had to be included for eligi bility to get a houseflat under the scheme but not for enhancement of the cost of the houses flats and monthly instalments
According to him since the declared policy of the BDA being No Profit No Loss  it had fixed the cost of the housesflats and the rate of instalments after taking into consideration of the escalation of the building materi al labour charges cost of transport and the allied valu able factors which all enter into the price fixation and as such the High Court is not correct in going into the ques tion of computation of cost of the construction of housesflats and 751 the plea of clerical mistakes exercising its jurisdiction under Article 226 of the Constitution of India
He further submits that the High Court has gone wrong in importing the principle laid down in Ramana Dayaram Shetty vs The Interna tional Airport Authority of India  Ors AIR 1979 Supreme Court 1628 to the present facts and circumstances of the case in view of the fact that in price fixation the execu tive has a wide discretion and it is only answerable provid ed there is any statutory control over its policy of price fixation and it is not the function of the High Court to sit in judgment over such matters of economic policy
It has been vehemently urged that after the parties have entered into the field of ordinary contract the relations are no longer covered by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se
The fact that all respondents had applied for registra tion only on acceptance of terms and conditions contained in the brochure inclusive of Clauses 12  13 as well as the conditions mentioned in the Notes 1 and 2 of the General Information Table  of the said brochure and further the respondents barring respondents Nos 13 17 18 and 20 in MIG group gave their reply accepting the changed terms and conditions as per letter dated 192011984 cannot be chal lenged in view of the unassailable documentary evidence namely Annexures A  D  E  and F 
Now we shall reproduce some of the relevant conditions of the brochure as well as the changed conditions contained in the letter dated 192011984
Clauses 12 and 13 of the brochure issued by the BDA and the notes 1 and 2 of the General Information Table thereto read thus Clause 12 For allotment by lottery all the above men tioned terms and rules given in the booklet would ordinarily be followed but the Develop ment Authority will have the right to change enhance or amend any of the terms andor condition as and when it thinks necessary and at its discretion
Clause 13 The decision of the Development Authority in regard to any matter in relation to the regis tration application will be final
It would have the right to relax any of the conditions at its discretion
The fight to sell by auc tion the Middle 752 Income Group and Higher Income Group plotshouses or any portion thereof of the various schemes will also vest in the Devel opment Authority
General Information Table Note 1 The cost shown in the column 4 is only estimated cost
It will increase or decrease according to the rise or fall in the price at the time of completion of the property
Note 2 The data given in the above mentioned table can be amended as felt neces sary
The last paragraph of the letter dated 1920184 Annexure D  reads thus If you want to buy the house on the above priceinstalment then you must send by 2811984 your written acceptance on the annexed proforma to the Registration Section of this office
 It may be mentioned here that in this letter Annexure D  the BDA has informed the allottees of MIG about the enhancement of the cost of the housesflats as well as the increase of the monthly instalment and the rate of yearly interest etc
and requested the allottees to give their written acceptance so that their names could be included in the list
The respondents except the four above have sent their written acceptance to the letter Annexure D 
For a better appreciation of the case of the appellants we think that as an example the letter Annexure E  of the first respondent in this case namely Shri Ajay Pal Singh may be reproduced I Ajay Pal Singh So Shri Sujan Singh want to take a Middle Income Group house in the Housing Scheme No 2 situated at Tibrinath of the Bareilly Development Authority on payment by instalment
I have seen the house and am satisfied
I accept the rules of the Bareilly Development Authority
 753 Only on the basis of the written acceptance the name of the first respondent was included in the draw and he has successful in getting the allotment of House No 37 in MIG type which fact if clearly borne out by the letter from the second respondent Annexure F 
In this connection it is worthwhile to note that the first respondent Shri Ajay Pal Singh is the Principal of Shri Guru Govind Singh Inter College and his educational qualifications are MA Econ  Hist BSc BEd LLB
From the above it is clear that all the respondents who have sent their applications for registration with initial payment only after having fully understood the terms and conditions of the brochure inclu sive of the Clauses 12 and 13 and Notes 1 and 2 of the General Information Table as per which the BDA has reserved its right to change enhance or amend any of the terms andor conditions as and when felt necessary and also the right to relax any of the conditions at its discretion and that the cost shown in the column 4 of the brochure was only estimated cost subject to increase or decrease according to the rise or fail in the price at the time of completion of the property
This is not only the case of the applicants of MIG scheme but also of the other applicants falling under the other categories ie HIG LIG and EWS
So it cannot be said that there was a mis statemennt or incorrect statement or an fraudulent concealment in the information supplied in the brochure published by the BDA on the strength of which all the applicants falling under the various categories applied and got their names registered
In such a circum stance the respondents cannot be heard to say that the BDA has arbitrarily and unreasonably changed the terms and conditions of the brochure to the prejudice of the respond ents
More so the respondents barring respondent Nos 13 17 18 and 20 after having given their written consent accepting the changed and varied terms and conditions as shown in the letter dated 1920184 are not justified in contending that the BDA has gone back on its original terms  and conditions and has substituted new conditions to their detriment
It is quite un understandable that the persons like the first respondent who is highly educated occupying the post of the Principal of a College and who has accepted the changed terms and conditions by his letter is making these allega tions against the BDA
The respondents were under no obligation to seek allot ment of housesflats even after they had registered them selves
Notwithstanding they voluntarily registered them selves as applicants only after fully understanding the terms and conditions of the brochure inclusive of Clauses 12 and 13 and Notes 1 and 2 of the General Information 754 Table which we have reproduced above they are now trying to obtain the housesflats at the price indicated in the bro chure at the initial stage conveniently ignoring the other express conditions by and under which the BDA has reserved its right to change the terms and conditions as and when felt necessary evidently depending upon the escalation of the prices
One should not loose sight of the fact that the BDA did not compel anyone of the applicants to purchase the flat at the rates subsequently fixed by it and pay the increased monthly instalments
On the contrary the option was left over only to the allottees
In fact the respond ents in Civil Appeal No 2809 of 1986 except the four above mentioned have unconditionally accepted the changed terms and conditions
Thus the factual position in this case clearly and unambiguously reveals that the respondents after voluntarily accepting the conditions imposed by the BDA have entered into the realm of concluded contract pure and simple with the BDA and hence the respondents can only claim the right conferred upon them by the said contract and are bound by the terms of the contract unless some statute steps in and confers some special statutory obligations on the part of the BDA in the contractual field
In the case before us the contract between the respondents and the BDA does not con tain any statutory terms andor conditions
When the factual position is so the High Court placing reliance on the decision in Ramana Dayaram Shetty case  has erroneously held It has not been disputed that the contesting opposite party is included within the term other authority  mentioned under Article 12 of the Constitution
Therefore the contesting opposite parties cannot be permitted to act arbitrarily with the principle which meets the test of reason and relevance
Where an author ity appears acting unreasonably this Court is not powerless and a writ of mandamus can be issued for performing its duty free from arbitrariness or unreasonableness
 This finding in our view is not correct in the light of the facts and circumstances of this case because in Ramana Dayaram Shetty case there was no concluded contract as in this case
Even conceding that the BDA has the trap pings of a State or would be comprehended in other authori ty  for the purpose of Article 12 of the Constitution while determining price of the housesflats constructed by it and the rate of monthly instalments to be paid the authority  or its agent after 755 entering into the field of ordinary contract acts purely in its executive capacity
Thereafter the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se
In this sphere they can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the authority ie BDA in this case in the said contractual field
There is a line of decisions where the contract entered into between the State and the persons aggrieved is non statutory and purely contractual and the rights are governed only by the terms of the contract no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple Radhakrishna Agarwal  Ors
vs State of Bihar  Ors
   Premji Bhai Parmar  Ors etc
vs Delhi Development Authority  Ors  and DFO vs Biswanath Tea Company Ltd In view of the authoritative judicial pronouncements of this Court in the series of cases dealing with the scope of interference of a High Court while exercising its writ jurisdiction under Article 226 of the Constitution of India in cases of non statutory concluded contracts like the one in hand we are constrained to hold that the High Court in the present case has gone wrong in its finding that there is arbitrariness and unreasonableness on the part of the appel lants herein in increasing the cost of the housesflats and the rate of monthly instalments and giving directions in the writ petitions as prayed for
For the reasons hereinbefore stated we set aside the judgment of the High Court and accordingly allow all the appeals
There will be no order as to costs
Before parting with the judgment we would like to observe that it is open to the respondents to approach the appellants for correction of any clerical mistakes in the calculation if any and they are at liberty to move any proper authority for any remedy if they are otherwise legal ly entitled to
PSS Appeals al lowed


Summary:
The appellant company applied for a requisite central excise licence for manufacture of goods falling under Tariff Item 68 and for the purpose of such goods L 4 licence was also furnished and also the requisite ground plans of the factory in which the various goods were manufactured
The excise authorities granted L 4 licence
The appellant claimed benefit of exemption of Notification No 8979 CE dated March 1 1979
The classification list submitted by the appellant was approved by the Assistant Collector by his letter dated May 25 1979
For the period April 1 1979 to June 30 1979 the appellant filed his RT 12 for assessment which was also finally assessed without any protest or objection
As the appellant claimed that his goods were wholly exempted by virtue of notification No 8979 CE dated March 1 1979 the appellant wrote to the Superintendent asking for dispensation from filing RT 12 every month
The Superintendent informed the appellant that it need not file RT 12 but should inform the excise authorities monthly by means of a simple letter the total clearance effected in the month in question
Thereafter the appellant submitted classification list in 1980 1981 and 1982 and claimed benefit of exemption under notification No 10580 CE dated June 19 1980
The Assistant Collector approved the classification list
The Central Excise Officer attached to the preventive branch visited the factory in July 1982 and examined the products manufactured by the appellant
In January 1983 a show cause notice was issued to the appellant asking it to show cause as why excise duty should not be demanded under Tariff Item 52 in respect of the piece of nuts manu 871 factured and removed by the appellant during the period April 1 1981 to July 19 1982 without payment of appropri ate excise duty thereon and also to show cause why penalty should not be imposed for failure to obtain the requisite L 4 licence under Tariff Item 52 and to show cause why the material seized on August 26 1982 should not be confiscat ed
The appellant showed cause and drew the attention of the authorities to the fact that the goods in question were not nuts but end products or connectors for lubricating purposes and as such were integral parts of Diesel Engine Pipes failing under Tariff item 68
The Collector of Central Excise passed orders on July 16 1984 holding that fittings were nuts classifiable under Tariff Item 52 and that appropriate duty on the clearance effected by the appellant during the period April 1 1981 to July 19 1982 should be paid and the seized goods were liable to confiscation but in lieu thereof a redemption fine of Rs4000 could be paid
The Collector also imposed a penalty of Rs 1 lakh
The appellant went up in appeal before the Tribunal which partly allowed the appeal and partly upheld the order of the Collector
With regard to classification of the different fittings was concerned it was held that the classification should have been as nuts under Tariff Item 52 of the Central Excise Tariff
It further held that the appellant was guilty of suppression and therefore rejected the submission of the appellant that the show cause notice was barred by time
It however reduced the amount of Penalty imposed by the Collector from Rs 1 lakh to Rs50000
The appellant appealed to this Court by special leave
In the appeal to this Court on the question whether the goods manufactured by the appellant were end products or connectors for lubricating purposes and as such were inte gral parts of the Diesel Engine Pipes failing under Tariff Item 68 as claimed by the appellant or nuts classifiable under Tariff Item 52
Dismissing the appeal HELD 1
The Tribunal was right in classifying the goods under Tariff Item 52 of the Central Excise Tariff and in upholding the demand of the duty for a period beyond six months as contemplated by section 11 A of the Act
The Tribunal duly gave benefit of the exemption notification in respect of the goods which had been exported
878F 872 2a The Tribunal was right in upholding the demand of duty for a period beyond six months as contemplated by section 11 A of the Act
878F 2b Whether there was any fraud collusion wilful mis statement or suppression of fact for the department to be justified to claim duty beyond a period of six months under the proviso to section 11 A of the Act is a question of fact
878B 2c The appellant
was both buying and selling these nuts and as such there was no conceivable reason why these nuts were described as end fittings in the declaration to the Department
In the declaration it was so described
878C D 2d The fact that the officers of the Department visit ed the factory of the appellant and they should have been aware of the production of the goods in question was no reason for the appellant not to truly and properly describe these goods
878D E 2e Not only did the appellant as found by the Tribu nal not described these goods properly but also gave a misleading description
878E 3
The Tribunal on appraisement of all the materials held that these were nuts manufactured by the appellant
Such finding cannot be said to be wrong or perverse
It was arrived at after giving opportunity to both the parties and considering all relevant materials
There is no cogent ground to sustain any challenge to the findings of the Tribunal
The Tribunal has considered all the relevant evidence and not ignored any relevant piece of evidence
It had applied the correct principle of law applicable to the determination of the question
It has also applied the test of commercial identity of the goods and examined the matter from the angle of the conduct of the appellant
These find ings of the Tribunal cannot be assailed in appeal under section 35L of the Act
875E 877B C 4
The Tribunal having come to the conclusion that there was deliberate suppression or wrong statement it follows automatically that the Tribunal was justified in upholding the imposition of penalty
The quantum of penalty was a matter which the Tribunal was free to fix as it thought fit as the justice of the case demanded
Nothing has been shown that the conclusion was bad
878G H 879A 873